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, 2025

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

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 31, 2025 was 206,255,979.

Jefferies Financial Group, Inc.

Index to Quarterly Report on Form 10-Q

February 28, 2025

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 ...............................................	42
Item 3. Quantitative and Qualitative Disclosures About Market Risk ....................................................................................................	63
Item 4. Controls and Procedures ..................................................................................................................................................................	63
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .............................................................................................................................................................................	64
Item 1A. Risk Factors .....................................................................................................................................................................................	64
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ..................................................................................................	64
Item 5. Other Information ..............................................................................................................................................................................	64
Item 6. Exhibits ................................................................................................................................................................................................	64

2 Jefferies Financial Group Inc.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Consolidated Statements of Financial Condition (Unaudited)
$ in thousands, except share and per share amounts	February 28,  2025	November 30,  2024
Assets
Cash and cash equivalents ..............................................................................................................................................................	$11,176,343	$12,153,414
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations (includes $381,467 and $120,414 of securities at fair value) .......................................................................	1,665,894	1,132,612
Financial instruments owned, at fair value (includes securities pledged of $19,399,604 and $18,441,751) ......................	26,087,291	24,138,274
Investments in and loans to related parties ..................................................................................................................................	1,383,293	1,385,658
Securities borrowed ..........................................................................................................................................................................	8,402,198	7,213,421
Securities purchased under agreements to resell ........................................................................................................................	8,125,231	6,179,653
Securities received as collateral, at fair value ...............................................................................................................................	287,078	185,588
Receivables:
Brokers, dealers and clearing organizations ..............................................................................................................................	3,534,080	2,666,591
Customers .......................................................................................................................................................................................	2,462,027	2,494,717
Fees, interest and other .................................................................................................................................................................	707,151	663,536
Premises and equipment ..................................................................................................................................................................	1,217,202	1,194,720
Goodwill ..............................................................................................................................................................................................	1,824,647	1,827,938
Assets held for sale ...........................................................................................................................................................................	51,885	51,885
Other assets (includes assets pledged of $472,953 and $429,347) .........................................................................................	3,294,571	3,072,302
Total assets ........................................................................................................................................................................................	$70,218,891	$64,360,309
Liabilities and Equity
Short-term borrowings ......................................................................................................................................................................	$1,172,806	$443,160
Financial instruments sold, not yet purchased, at fair value .......................................................................................................	13,997,227	11,007,328
Securities loaned ...............................................................................................................................................................................	2,501,643	2,540,861
Securities sold under agreements to repurchase .........................................................................................................................	13,664,290	12,337,935
Other secured financings (includes $22,231 and $24,848 at fair value) ...................................................................................	2,280,003	2,183,000
Obligation to return securities received as collateral, at fair value ............................................................................................	287,078	185,588
Payables:
Brokers, dealers and clearing organizations ..............................................................................................................................	4,221,702	3,686,367
Customers .......................................................................................................................................................................................	4,122,388	4,073,975
Lease liabilities ..................................................................................................................................................................................	616,031	635,306
Accrued expenses and other liabilities ...........................................................................................................................................	2,301,325	3,510,831
Long-term debt (includes $3,075,403 and $2,351,346 at fair value) ..........................................................................................	14,785,553	13,530,565
Total liabilities ...................................................................................................................................................................................	59,950,046	54,134,916
Mezzanine Equity
Redeemable noncontrolling interests .............................................................................................................................................	406	406
Equity
Preferred shares, par value of $1 per share, authorized 70,000 shares; 55,125 shares issued and outstanding; liquidation preference of $17,500 per share .............................................................................................................................	55	55
Common shares, par value $1 per share, authorized 565,000,000 shares; 206,249,504 and 205,504,272 shares issued and outstanding, after deducting 114,868,566 and 115,613,798 shares held in treasury .....................................	206,250	205,504
Non-voting common shares, par value $1 per share, authorized 35,000,000, shares; no shares issued and outstanding ....................................................................................................................................................................................	—	—
Additional paid-in capital ..................................................................................................................................................................	2,094,138	2,104,199
Accumulated other comprehensive loss .......................................................................................................................................	(408,072)	(423,131)
Retained earnings ..............................................................................................................................................................................	8,311,857	8,270,145
Total Jefferies Financial Group Inc. shareholders' equity .........................................................................................................	10,204,228	10,156,772
Noncontrolling interests ...................................................................................................................................................................	64,211	68,215
Total equity ........................................................................................................................................................................................	10,268,439	10,224,987
Total liabilities and equity ...............................................................................................................................................................	$70,218,891	$64,360,309

See accompanying notes to consolidated financial statements.

February 2025 Form 10-Q 3

Consolidated Statements of Earnings (Unaudited)

$ in thousands, except per share amounts	Three Months Ended
	February 28,  2025	February 29,  2024
Revenues
Investment banking ...................................................................................................................................................................	$729,510	$679,065
Principal transactions ...............................................................................................................................................................	407,230	640,736
Commissions and other fees ..................................................................................................................................................	288,300	245,543
Asset management fees and revenues .................................................................................................................................	85,408	50,372
Interest ........................................................................................................................................................................................	845,171	819,489
Other ............................................................................................................................................................................................	117,245	116,737
Total revenues ...........................................................................................................................................................................	2,472,864	2,551,942
Interest expense ........................................................................................................................................................................	879,845	813,739
Net revenues ..............................................................................................................................................................................	1,593,019	1,738,203
Non-interest expenses
Compensation and benefits .....................................................................................................................................................	841,127	926,871
Brokerage and clearing fees ....................................................................................................................................................	109,436	109,670
Underwriting costs ....................................................................................................................................................................	17,846	18,484
Technology and communications ..........................................................................................................................................	139,475	137,512
Occupancy and equipment rental ...........................................................................................................................................	30,199	28,153
Business development .............................................................................................................................................................	72,291	57,651
Professional services ...............................................................................................................................................................	72,466	77,844
Depreciation and amortization ................................................................................................................................................	30,988	43,202
Cost of sales ..............................................................................................................................................................................	41,568	34,671
Other expenses ..........................................................................................................................................................................	86,558	83,903
Total non-interest expenses ...................................................................................................................................................	1,441,954	1,517,961
Earnings from continuing operations before income taxes ................................................................................................	151,065	220,242
Income tax expense ..................................................................................................................................................................	14,216	55,959
Net earnings from continuing operations ..............................................................................................................................	136,849	164,283
Net losses from discontinued operations, net of income tax benefit of $3,003 ..............................................................	—	(7,891)
Net earnings ...............................................................................................................................................................................	136,849	156,392
Net losses attributable to noncontrolling interests ..............................................................................................................	(6,983)	(7,438)
Preferred stock dividends ........................................................................................................................................................	16,039	14,189
Net earnings attributable to common shareholders ...........................................................................................................	$127,793	$149,641
Earnings per common share
Basic from continuing operations ...........................................................................................................................................	$0.60	$0.71
Diluted from continuing operations ........................................................................................................................................	0.57	0.69
Basic ............................................................................................................................................................................................	0.60	0.68
Diluted .........................................................................................................................................................................................	0.57	0.66
Weighted-average common shares outstanding ................................................................................................................
Basic ............................................................................................................................................................................................	214,536	220,046
Diluted .........................................................................................................................................................................................	222,448	225,291

See accompanying notes to consolidated financial statements.

4 Jefferies Financial Group Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

$ in thousands	Three Months Ended
	February 28,  2025	February 29,  2024
Net earnings ..................................................................................................................................................................................	$136,849	$156,392
Other comprehensive income (loss), net of tax:
Currency translation adjustments and other (1) .....................................................................................................................	(15,322)	(99)
Changes in fair value related to instrument-specific credit risk (2) ......................................................................................	30,256	(2,752)
Unrealized gains on available-for-sale-securities ...................................................................................................................	125	1,958
Total other comprehensive income (loss), net of tax (3) ......................................................................................................	15,059	(893)
Comprehensive income ...............................................................................................................................................................	151,908	155,499
Net losses attributable to noncontrolling interests .................................................................................................................	(6,983)	(7,438)
Preferred stock dividends ............................................................................................................................................................	16,039	14,189
Comprehensive income attributable to common shareholders ...........................................................................................	$142,852	$148,748

(1)Includes income tax benefit of $4.5 million and $14.0 thousand for the three months ended February 28, 2025, and February 29, 2024, respectively.

(2)Includes income tax (expense) benefit of $(10.6) million and $1.2 million for the three months ended February 28, 2025 and February 29, 2024,

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 2025 Form 10-Q 5

Consolidated Statements of Changes in Equity (Unaudited)

$ in thousands	Three Months Ended
	February 28,  2025	February 29,  2024
Preferred shares $1 par value
Balance, beginning of period ....................................................................................................................................................	$55	$42
Balance, end of period ..............................................................................................................................................................	$55	$42
Common shares $1 par value
Balance, beginning of period ....................................................................................................................................................	$205,504	$210,627
Purchase of common shares for treasury ..........................................................................................................................	(696)	(1,067)
Other .........................................................................................................................................................................................	1,442	2,441
Balance, end of period ..............................................................................................................................................................	$206,250	$212,001
Additional paid-in capital
Balance, beginning of period ....................................................................................................................................................	$2,104,199	$2,044,859
Share-based compensation expense ..................................................................................................................................	35,637	20,215
Purchase of common shares for treasury ..........................................................................................................................	(55,622)	(41,966)
Dividend equivalents ..............................................................................................................................................................	8,597	4,754
Change in equity interest related to consolidated subsidiaries .......................................................................................	853	—
Other .........................................................................................................................................................................................	474	(1,278)
Balance, end of period ..............................................................................................................................................................	$2,094,138	$2,026,584
Accumulated other comprehensive loss, net of tax
Balance, beginning of period ....................................................................................................................................................	$(423,131)	$(395,545)
Other comprehensive income (loss), net of taxes .............................................................................................................	15,059	(893)
Balance, end of period ..............................................................................................................................................................	$(408,072)	$(396,438)
Retained earnings
Balance, beginning of period ....................................................................................................................................................	$8,270,145	$7,849,844
Net earnings attributable to Jefferies Financial Group Inc. ..............................................................................................	143,832	163,830
Dividends - common shares ($0.40 and $0.30 per share) ................................................................................................	(91,095)	(68,363)
Dividends - preferred shares .................................................................................................................................................	(11,025)	(6,300)
Cumulative effect of change in accounting principle for current expected credit losses, net of tax .........................	—	(644)
Other .........................................................................................................................................................................................	—	(459)
Balance, end of period ..............................................................................................................................................................	$8,311,857	$7,937,908
Total Jefferies Financial Group Inc. shareholders' equity .................................................................................................	$10,204,228	$9,780,097
Noncontrolling interests
Balance, beginning of period ....................................................................................................................................................	$68,215	$92,308
Net losses attributable to noncontrolling interests ...........................................................................................................	(6,983)	(7,438)
Contributions ...........................................................................................................................................................................	104	9,316
Distributions ............................................................................................................................................................................	(2,795)	(7,126)
Change in equity interest related to consolidated subsidiaries .......................................................................................	(853)	—
Other .........................................................................................................................................................................................	6,523	312
Balance, end of period ..............................................................................................................................................................	$64,211	$87,372
Total equity .................................................................................................................................................................................	$10,268,439	$9,867,469

See accompanying notes to consolidated financial statements.

6 Jefferies Financial Group Inc.

Consolidated Statements of Cash Flows (Unaudited)

$ in thousands	Three Months Ended
	February 28,  2025	February 29,  2024
Cash flows from operating activities:
Net earnings ......................................................................................................................................................................................	$136,849	$156,392
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization ....................................................................................................................................................	32,995	44,199
Share-based compensation .........................................................................................................................................................	35,637	20,215
Net bad debt expense ...................................................................................................................................................................	7,493	39,712
Income on investments in and loans to related parties ...........................................................................................................	(7,052)	(8,692)
Distributions received on investments in related parties ........................................................................................................	16,142	855
Other adjustments .........................................................................................................................................................................	(44,419)	75,411
Net change in assets and liabilities:
Receivables:
Brokers, dealers and clearing organizations ..........................................................................................................................	(877,505)	(629,142)
Customers ...................................................................................................................................................................................	32,699	(155,699)
Fees, interest and other .............................................................................................................................................................	(47,567)	(11,191)
Securities borrowed ......................................................................................................................................................................	(1,198,188)	401,010
Financial instruments owned .......................................................................................................................................................	(2,271,617)	(1,492,492)
Securities purchased under agreements to resell ....................................................................................................................	(1,976,348)	(1,604,900)
Other assets ...................................................................................................................................................................................	(236,583)	(504,938)
Payables:
Brokers, dealers and clearing organizations ..........................................................................................................................	546,020	212,200
Customers ...................................................................................................................................................................................	48,413	241,605
Securities loaned ...........................................................................................................................................................................	(30,136)	870,714
Financial instruments sold, not yet purchased .........................................................................................................................	3,027,469	801,138
Securities sold under agreements to repurchase .....................................................................................................................	1,359,656	684,917
Lease liabilities ..............................................................................................................................................................................	(21,429)	(27,895)
Accrued expenses and other liabilities ......................................................................................................................................	(1,197,694)	(371,040)
Net cash used in operating activities from continuing operations .........................................................................................	(2,665,165)	(1,257,621)
Net cash provided by (used in) operating activities from discontinued operations ............................................................	—	(45,282)
Cash flows from investing activities:
Contributions to investments in and loans to related parties .................................................................................................	(21,949)	(47,751)
Capital distributions from investments and repayments of loans from related parties .....................................................	13,752	4,977
Originations and purchases of automobile loans, notes and other receivables ..................................................................	—	(89,540)
Principal collections of automobile loans, notes and other receivables ...............................................................................	—	83,268
Net payments on premises and equipment ..............................................................................................................................	(49,578)	(96,241)
Net cash used in investing activities from continuing operations ..........................................................................................	(57,775)	(145,287)

February 2025 Form 10-Q 7

Consolidated Statements of Cash Flows (Unaudited)

$ in thousands	Three Months Ended
	February 28,  2025	February 29,  2024
Cash flows from financing activities:
Proceeds from short-term borrowings .......................................................................................................................................	$3,253,704	$847,000
Payments on short-term borrowings ..........................................................................................................................................	(2,662,000)	(568,739)
Proceeds from issuance of long-term debt, net of issuance costs .......................................................................................	1,536,928	359,380
Repayment of long-term debt ......................................................................................................................................................	(188,890)	(317,794)
Purchase of common shares for treasury .................................................................................................................................	(56,318)	(43,033)
Dividends paid to common and preferred shareholders .........................................................................................................	(92,735)	(69,909)
Net proceeds from other secured financings ...........................................................................................................................	98,941	124,715
Net change in bank overdrafts ....................................................................................................................................................	137,305	(13,609)
Proceeds from contributions of noncontrolling interests .......................................................................................................	104	9,316
Payments on distributions to noncontrolling interests ............................................................................................................	(2,795)	(7,126)
Other ................................................................................................................................................................................................	1,916	704
Net cash provided by financing activities from continuing operations ..................................................................................	2,026,160	320,905
Net cash provided by (used in) financing activities from discontinued operations .............................................................	—	(3,297)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash ...............................................................	(8,062)	(1,683)
Change in cash, cash equivalents, and restricted cash reclassified from (to) assets held for sale ....................................	—	(13,796)
Net decrease in cash, cash equivalents, and restricted cash ....................................................................................................	(704,842)	(1,132,265)
Cash, cash equivalents, and restricted cash at beginning of period ........................................................................................	13,165,612	9,830,758
Cash, cash equivalents, and restricted cash at end of period ..................................................................................................	$12,460,770	$8,684,697
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ............................................................................................................................................................................................	$845,673	$839,475
Income taxes, net ..........................................................................................................................................................................	9,089	25,927

Noncash investing activities:

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

Noncash financing activities:

During the three months ended February 29, 2024, we purchased common shares for treasury of $1.2 million.

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

	February 28,	November 30,
$ in thousands	2025	2024
Cash and cash equivalents ...........................................................................................................................................	$11,176,343	$12,153,414
Cash on deposit for regulatory purposes with clearing and depository organizations .......................................	1,284,427	1,012,198
Total cash, cash equivalents and restricted cash ....................................................................................................	$12,460,770	$13,165,612

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 ............................................................................................................................................................................................	10
Note 4. Business Acquisitions ....................................................................................................................................................................................................	10
Note 5. Assets Held for Sale and Discontinued Operations ...................................................................................................................................................	11
Note 6. Fair Value Disclosures ....................................................................................................................................................................................................	12
Note 7. Derivative Financial Instruments ..................................................................................................................................................................................	20
Note 8. Collateralized Transactions ...........................................................................................................................................................................................	23
Note 9. Securitization Activities .................................................................................................................................................................................................	25
Note 10. Variable Interest Entities ..............................................................................................................................................................................................	25
Note 11. Investments ...................................................................................................................................................................................................................	28
Note 12. Credit Losses on Financial Assets Measured at Amortized Cost .........................................................................................................................	30
Note 13. Goodwill and Intangible Assets ..................................................................................................................................................................................	31
Note 14. Revenues from Contracts with Customers ...............................................................................................................................................................	32
Note 15. Compensation Plans ....................................................................................................................................................................................................	33
Note 16. Borrowings .....................................................................................................................................................................................................................	33
Note 17. Total Equity ....................................................................................................................................................................................................................	35
Note 18. Income Taxes ................................................................................................................................................................................................................	37
Note 19. Commitments, Contingencies and Guarantees .......................................................................................................................................................	37
Note 20. Regulatory Requirements ............................................................................................................................................................................................	38
Note 21. Segment Reporting .......................................................................................................................................................................................................	39
Note 22. Related Party Transactions .........................................................................................................................................................................................	40

February 2025 Form 10-Q 9

Notes to Consolidated Financial Statements

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.

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, 2024.

During the three months ended February 28, 2025, there were no

significant changes made to the Company’s significant

accounting policies.

10 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

Note 3. Accounting Developments

Accounting Standards to be Adopted in Future Periods

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 will require enhanced disclosures about

significant segment expenses. The amendments in ASU 2023-07

are effective for fiscal years beginning after December 15, 2023,

and interim periods within fiscal years beginning after December

15, 2024, with early adoption permitted, and are to be applied on

a retrospective basis. We are evaluating the impact of the

standard on our segment reporting disclosures.

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, with early adoption permitted, 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.

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.

Note 4. Business Acquisitions

We acquired OpNet during the fourth quarter of 2023. OpNet is a

fixed wireless broadband service provider in Italy and also owned

a majority of the common shares of Tessellis S.p.A. (“Tessellis”),

a telecommunications company publicly listed on the Italian

stock exchange. Upon obtaining control of OpNet, we accounted

for under this transaction under the acquisition method of

accounting, which requires that the assets acquired, including

identifiable intangible assets, and liabilities assumed to be

recognized at their respective fair values as of the acquisition

date.

OpNet

We historically owned 47.4% of the common shares and 50.0% of

the voting rights of OpNet and various classes of convertible

preferred stock issued by OpNet (the “preferred shares”). On

November 30, 2023, we provided notice of our intent to convert

certain classes of our preferred shares into common shares and,

as a result, we obtained control of OpNet. Upon conversion on

May 7, 2024, our ownership increased to 57.5% of the common

shares and our voting rights increased to 72.5% of the aggregate

voting rights of OpNet.

Upon obtaining control of OpNet on November 30, 2023, the

assets and liabilities of OpNet have been included in our

consolidated financial statements. The initial consolidation of

OpNet was accounted for under the acquisition method of

accounting and we remeasured our previously existing interests

at fair value and recognized a gain of $115.8 million, representing

the excess of the fair value of our previously existing interests

over the carrying value of our investment of $201.6 million.

The fair value of the previously existing interests was measured

based on an estimate of what could be recognized in a sale

transaction for wholesale net operating assets operating assets

of OpNet, which have been classified as held for sale. The

remaining identifiable assets and assumed liabilities of OpNet

represented the assets and liabilities of Tessellis. An enterprise

value for Tessellis was estimated based on its market

capitalization at November 30, 2023, which was then allocated to

the identifiable assets, including intangible assets, liabilities, and

noncontrolling interests of Tessellis using an income approach,

which calculates the present value of the estimated economic

benefit of future cash flows, in order to determine the fair value

of the identified customer relationships and Tessellis trade

name. Property and equipment and developed technology assets

were valued using a replacement cost methodology. Critical

estimates included future expected cash flows, including

forecasted revenues and expenses, and applicable discount

rates. Discount rates used to compute the present value of

expected net cash flows were based upon estimated weighted

average cost of capital. The initial allocation of the purchase

price resulted in the recognition of goodwill relating to Tessellis

of $127.1 million. No consideration was transferred in connection

with the consolidation.

The initial estimated purchase price allocation as of November

30, 2023 for Tessellis was revised during the first quarter of 2024

as new information was received and analyzed resulting in an

increase in intangible assets of $39.3 million, a decrease in

property and equipment of $12.3 million, and a decrease in

goodwill of $27.0 million.

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 and we received net cash proceeds of

$322.8 million and recognized a pre-tax gain on sale of

$3.5 million. The sale of OpNet’s operating assets did not include

our interest in Tessellis.

During 2024, Tessellis executed various acquisitions and, as a

result, recognized assets and liabilities of $24.5 million and

$18.8 million, respectively, on the acquisition dates. Total assets

primarily relate to goodwill, property and equipment, intangible

assets, and short-term trade receivables. Total liabilities primarily

relate to financial debt assumed and trade payables. The primary

acquisition executed during 2024 was the acquisition of a 97.2%

ownership interest in Go Internet S.p.A. (“Go Internet”) for a total

consideration of €4.1 million. We are in the process of finalizing

the purchase price allocation adjustments related to the

identified assets and may adjust these amounts upon completion

of our assessment.

February 2025 Form 10-Q 11

Notes to Consolidated Financial Statements

Note 5. Assets Held for Sale and Discontinued Operations

Foursight

On November 20, 2023, we entered into an agreement to sell

Foursight. Assets held for sale are recorded initially at the lower

of their carrying value or estimated fair value, less estimated

costs to sell.

During the second quarter of 2024, we closed the sale of

Foursight and recognized a gain on sale of $24.2 million, which is

included within Other revenues.

OpNet

In February 2024, we agreed to sell substantially all of OpNet’s

wholesale operating assets. The sale closed in August 2024 and

we recognized a pre-tax gain on sale of $3.5 million. For the year

ended November 30, 2024, the activities of OpNet’s wholesale

operations have been classified as discontinued operations and

OpNet’s results are presented in Net losses from discontinued

operations, net of income tax benefit.

Airplanes

During 2024, we classified certain airplanes related to a sale

leaseback transaction executed by our subsidiary, Aircadia

Leasing II LLC as held for sale. The airplanes are included within

Assets held for sale on our Consolidated Statements of Financial

Condition and have a carrying amount of $51.9 million at both

February 28, 2025 and November 30, 2024. We are actively

pursuing avenues to dispose of the airplanes through a sale

process. Effective with the designation of the airplanes as held

for sale, we suspended recording depreciation on these assets.

12 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

Note 6. Fair Value Disclosures

	February 28, 2025 (1)
$ in thousands	Level 1	Level 2	Level 3	Counterparty and Cash Collateral Netting (2)	Total
Assets:
Financial instruments owned:
Corporate equity securities ................................................................................	$6,246,599	$213,504	$212,409	$—	$6,672,512
Corporate debt securities ...................................................................................	—	6,641,104	25,925	—	6,667,029
Collateralized debt obligations and collateralized loan obligations ............	—	1,140,317	71,827	—	1,212,144
U.S. government and federal agency securities .............................................	2,481,241	92,098	—	—	2,573,339
Municipal securities ............................................................................................	—	427,829	—	—	427,829
Sovereign obligations .........................................................................................	978,901	734,661	—	—	1,713,562
Residential mortgage-backed securities .........................................................	—	1,971,845	7,526	—	1,979,371
Commercial mortgage-backed securities .......................................................	—	84,937	471	—	85,408
Other asset-backed securities ...........................................................................	—	380,601	147,319	—	527,920
Loans and other receivables ..............................................................................	—	1,891,354	153,764	—	2,045,118
Derivatives ............................................................................................................	263	4,271,426	4,305	(3,617,326)	658,668
Investments at fair value ....................................................................................	—	8	157,881	—	157,889
Total financial instruments owned, excluding Investments at fair value based on NAV .................................................................................................	$9,707,004	$17,849,684	$781,427	$(3,617,326)	$24,720,789
Securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations ............................	$381,467	$—	$—	$—	$381,467
Securities received as collateral .......................................................................	287,078	—	—	—	287,078
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities ................................................................................	$4,600,182	$124,726	$590	$—	$4,725,498
Corporate debt securities ...................................................................................	—	4,369,662	1,113	—	4,370,775
U.S. government and federal agency securities .............................................	2,433,696	—	—	—	2,433,696
Sovereign obligations .........................................................................................	889,042	759,466	—	—	1,648,508
Residential mortgage-backed securities .........................................................	—	—	15	—	15
Commercial mortgage-backed securities .......................................................	—	—	1,154	—	1,154
Loans.....................................................................................................................	—	138,269	848	—	139,117
Derivatives ............................................................................................................	—	4,209,460	46,381	(3,577,377)	678,464
Total financial instruments sold, not yet purchased ....................................	$7,922,920	$9,601,583	$50,101	$(3,577,377)	$13,997,227
Other secured financings ...................................................................................	$—	$9,526	$12,705	$—	$22,231
Obligation to return securities received as collateral ....................................	287,078	—	—	—	287,078
Long-term debt ....................................................................................................	—	2,214,719	860,684	—	3,075,403

(1)Excludes investments at fair value based on net asset value (“NAV”) of $1.37 billion at February 28, 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 2025 Form 10-Q 13

Notes to Consolidated Financial Statements

	November 30, 2024 (1)
$ in thousands	Level 1	Level 2	Level 3	Counterparty and Cash Collateral Netting (2)	Total
Assets:
Financial instruments owned:
Corporate equity securities ................................................................................	$5,238,058	$302,051	$239,364	$—	$5,779,473
Corporate debt securities ...................................................................................	—	5,310,815	24,931	—	5,335,746
Collateralized debt obligations and collateralized loan obligations ............	—	1,029,662	63,976	—	1,093,638
U.S. government and federal agency securities .............................................	3,583,139	160,227	—	—	3,743,366
Municipal securities ............................................................................................	—	320,507	—	—	320,507
Sovereign obligations .........................................................................................	749,912	630,681	172	—	1,380,765
Residential mortgage-backed securities .........................................................	—	2,348,862	7,714	—	2,356,576
Commercial mortgage-backed securities .......................................................	—	146,752	477	—	147,229
Other asset-backed securities ...........................................................................	—	110,687	103,214	—	213,901
Loans and other receivables ..............................................................................	—	1,706,152	152,586	—	1,858,738
Derivatives ............................................................................................................	146	3,181,454	3,926	(2,667,751)	517,775
Investments at fair value ....................................................................................	—	6	137,865	—	137,871
Total financial instruments owned, excluding Investments at fair value based on NAV .................................................................................................	$9,571,255	$15,247,856	$734,225	$(2,667,751)	$22,885,585
Securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations .............................	$120,414	$—	$—	$—	$120,414
Securities received as collateral .......................................................................	185,588	—	—	—	185,588
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities ................................................................................	$3,013,877	$73,240	$208	$—	$3,087,325
Corporate debt securities ...................................................................................	—	3,105,010	165	—	3,105,175
U.S. government and federal agency securities .............................................	2,904,379	26	—	—	2,904,405
Sovereign obligations .........................................................................................	667,647	422,124	—	—	1,089,771
Commercial mortgage-backed securities ......................................................	—	—	1,153	—	1,153
Loans.....................................................................................................................	—	92,321	16,864	—	109,185
Derivatives ............................................................................................................	13	3,477,802	26,212	(2,793,713)	710,314
Total financial instruments sold, not yet purchased ....................................	$6,585,916	$7,170,523	$44,602	$(2,793,713)	$11,007,328
Other secured financings ...................................................................................	$—	$9,964	$14,884	$—	$24,848
Obligation to return securities received as collateral ...................................	185,588	—	—	—	185,588
Long-term debt ....................................................................................................	—	1,529,443	821,903	—	2,351,346

(1)Excludes investments at fair value based on NAV of $1.25 billion at November 30, 2024 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.

14 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

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, 2024.

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, 2025
$ in thousands	Fair Value (1)	Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Hedge Funds (2) ..............	$672,192	$—	Quarterly (52%) Monthly (48%)	45 - 90 days 45 - 60 days
Private Equity Funds (3) ..............	63,573	27,172	N/R (100%)	N/R
Credit Funds (4) ..............	456,714	106	Quarterly (64%) Monthly (3%) N/R (33%)	90 days 30 days N/R
Real Estate and Other Funds (5) ....	174,023	169,928	Quarterly (24%) N/R (76%)	90 days N/R
Total ......................	$1,366,502	$197,206

	November 30, 2024
$ in thousands	Fair Value (1)	Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Hedge Funds (2) ............	$660,720	$—	Quarterly (53%) Monthly (47%)	45 - 90 days 45 - 60 days
Private Equity Funds (3) ............	60,215	30,530	N/R (100%)	N/R
Credit Funds (4)	430,429	30,554	Quarterly (72%) Monthly (3%) N/R (25%)	90 days 30 days N/R
Real Estate and Other Funds (5) .	101,325	232,696	N/R (100%)	N/R
Total ...................	$1,252,689	$293,780

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, in 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 ten 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;

•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.

February 2025 Form 10-Q 15

Notes to Consolidated Financial Statements

Level 3 Rollforwards

									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

									For instruments still held at February 29, 2024, changes in unrealized gains/(losses) included in:
$ in thousands	Balance at November 30, 2023	Total gains/ losses (realized and unrealized) (1)	Purchases	Sales	Settlements	Issuances	Net transfers into/ (out of) Level 3	Balance at February 29, 2024	Earnings (1)	Other comprehensive income (1)
Assets:
Financial instruments owned:
Corporate equity securities .......................	$181,294	$(197)	$167	$(265)	$—	$—	$(7,785)	$173,214	$(158)	$—
Corporate debt securities	26,112	846	20,437	(513)	(200)	—	(11,347)	35,335	801	—
CDOs and CLOs .................	64,862	11,121	16,997	(13,836)	(9,539)	—	(238)	69,367	1,355	—
RMBS ..................................	20,871	(202)	—	—	(5,360)	—	(14,625)	684	32	—
CMBS ..................................	508	(35)	—	—	—	—	—	473	(64)	—
Other ABS ...........................	117,661	(3,165)	11,686	(17,650)	(5,834)	—	(442)	102,256	(1,468)	—
Loans and other receivables ....................	130,101	(15,592)	5,477	(24,382)	(3,007)	—	(13,712)	78,885	(17,991)	—
Investments at fair value .	130,835	(10,691)	1,627	—	—	—	(7)	121,764	(10,691)	—
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities .......................	$676	$(7)	$—	$6	$—	$—	$—	$675	$7	$—
Corporate debt securities	124	—	—	—	—	—	—	124	—	—
CMBS ..................................	840	—	(245)	350	—	—	(1)	944	—	—
Loans ..................................	1,521	(54)	(81)	—	—	—	80	1,466	(183)	—
Net derivatives (2) .............	50,955	(4,833)	—	245	—	—	5,722	52,089	4,340	—
Other secured financings .	3,898	4,482	—	—	(4,415)	—	—	3,965	(4,482)	—
Long-term debt ..................	744,597	12,284	—	—	—	21,456	1,192	779,529	(14,477)	2,193

(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 29, 2024

Transfers of assets of $11.2 million from Level 2 to Level 3 of the

fair value hierarchy are primarily attributed to:

•Loans and other receivables of $6.5 million, Other ABS of $1.7

million, corporate debt securities of $1.7 million and corporate

equity securities of $1.3 million due to reduced pricing

transparency.

Transfers of assets of $59.4 million from Level 3 to Level 2 are

primarily attributed to:

•Loans and other receivables of $20.2 million, RMBS of $14.6

million, corporate debt securities of $13.0 million, corporate

equity securities of $9.1 million and other ABS of $2.2 million

due to greater pricing transparency supporting classification

into Level 2.

Transfers of liabilities of $31.6 million from Level 2 to Level 3 of

the fair value hierarchy are primarily attributed to:

•Structured notes within long-term debt of $16.1 million and net

derivatives of $15.4 million due to reduced pricing and market

transparency.

Transfers of liabilities of $24.6 million from Level 3 to Level 2 of

the fair value hierarchy are primarily attributed to:

•Structured notes within long-term debt of $14.9 million and net

derivatives of $9.7 million due to greater pricing and market

transparency.

Net losses on Level 3 assets were $17.9 million and net losses

on Level 3 liabilities were $11.9 million for the three months

ended February 29, 2024. Net losses on Level 3 assets were

primarily due to decreased market values across loans and other

receivables, investments at fair value and other ABS, partially

offset by increased valuations of CDOs and CLOs. Net losses on

Level 3 liabilities were primarily due to increased market

valuations of structured notes within Long-term debt and Other

secured financings, partially offset by decreases in certain

derivatives.

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

February 2025 Form 10-Q 17

Notes to Consolidated Financial Statements

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 28, 2025
Financial Instruments Owned	Fair Value (in thousands)	Valuation Technique	Significant Unobservable Input(s)	Input / Range			Weighted Average
Corporate equity securities .....................	$212,409
Non-exchange-traded securities		Market approach	Price	$0	-	$486	$83
		Scenario Analysis	EBITDA multiple	4.6			—
Corporate debt securities ........................	$25,925	Market approach	Price	$49	-	$117	$71
		Discounted cash flows	Discount rate/yield	22%			—
CDOs and CLOs ..........................................	$57,986	Discounted cash flows	Constant prepayment rate	20%			—
			Constant default rate	2%			—
			Loss severity	30%			—
			Discount rate/yield	13%	-	17%	17%
		Market approach	Price	$70	-	$104	$98
		Scenario analysis	Estimated recovery percentage	49%			—
RMBS ...........................................................	$7,526	Discounted cash flows	Constant prepayment rate	40%			—
			Loss severity	90%			—
			Discount rate/yield	15%			—
Other ABS ...................................................	$146,290	Discounted cash flows	Discount rate/yield	12%	-	34%	22%
			Cumulative loss rate	18%	-	34%	26%
			Duration (years)	0.7	-	0.8	0.8
		Market approach	Price	$104	-	$126	$114
		Scenario analysis	Estimated recovery percentage	92%			—
Loans and other receivables ...................	$153,764	Market approach	Price	$21	-	$104	$77
		Scenario analysis	Estimated recovery percentage	18%	-	245%	84%
Derivatives ..................................................	$2,816
Embedded options		Market approach	Basis points upfront	0.4			—
Investments at fair value ..........................	$152,786
Private equity securities		Market approach	Price	$0	-	$8,335	$1,616
			Discount rate/yield	28%			—
			Revenue	$29,753,075			—
Financial Instruments Sold, Not Yet Purchased:
Loans ..........................................................	$848	Market approach	Price	$21	-	$100	$24
Derivatives ..................................................	$45,281
Equity options		Volatility benchmarking	Volatility	34%	-	95%	49%
Options		Market approach	Basis points upfront	7.8	-	22.6	15.0
Other secured financings .........................	$12,705	Scenario analysis	Estimated recovery percentage	76%	-	100%	96%
		Market approach	Price	$115			—
Long-term debt ..........................................	$860,684
Structured notes		Market approach	Price	$59	-	$113	$92

18 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

November 30, 2024
Financial Instruments Owned	Fair Value (in thousands)	Valuation Technique	Significant Unobservable Input(s)	Input / Range			Weighted Average
Corporate equity securities .....................	$239,364
Non-exchange-traded securities		Market approach	Price	$0	-	$486	$68
Corporate debt securities ........................	$24,931	Market approach	Price	$28	-	$105	$74
CDOs and CLOs ..........................................	$53,388	Discounted cash flows	Constant prepayment rate	20%			—
			Constant default rate	2%			—
			Loss severity	30%			—
			Discount rate/yield	14%	-	32%	26%
		Market approach	Price	$70	-	$106	$94
RMBS	$7,714	Discounted cash flows	Constant prepayment rate	20%			—
			Loss severity	10%			—
			Discount rate/yield	12%			—
Other ABS ...................................................	$98,172	Discounted cash flows	Discount rate/yield	19%	-	30%	25%
			Cumulative loss rate	17%	-	34%	24%
			Duration (years)	0.9	-	1.0	0.9
		Market approach	Price	$106	-	$127	$121
		Scenario analysis	Estimated recovery percentage	92%			—
Loans and other receivables ...................	$152,586	Market approach	Price	$17	-	$106	$75
		Scenario analysis	Estimated recovery percentage	3%	-	252%	50%
Derivatives ..................................................	$1,396
Embedded options		Market approach	Basis points upfront	0.3			—
Investments at fair value ..........................	$132,769
Private equity securities		Market approach	Price	$1	-	$8,506	$501
			Discount rate/yield	28%			—
			Revenue	$29,908,372			—
Financial Instruments Sold, Not Yet Purchased:
Loans ..........................................................	$16,864	Market approach	Price	$17	-	$100	$75
		Scenario analysis	Estimated recovery percentage	0%	-	205%	50%
Derivatives ..................................................	$25,045
Equity options		Volatility benchmarking	Volatility	28%	-	102%	49%
Options		Market approach	Basis points upfront	8.0	-	22.3	14.9
Other secured financings .........................	$14,884	Scenario analysis	Estimated recovery percentage	60%	-	100%	93%
		Market approach	Price	$117			—
Long-term debt ..........................................	$821,903
Structured notes		Market approach	Price	$61	-	$122	$96

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,

2025 and November 30, 2024, asset exclusions consisted of

$21.9 million and $23.9 million, respectively, primarily composed

of CDOs and CLOs, Other ABS, Investments at fair value, certain

derivatives, RMBS and CMBS. At February 28, 2025 and

November 30, 2024, liability exclusions consisted of $4.0 million

and $2.7 million, respectively, primarily composed of certain

derivatives, loans, CMBS, RMBS, 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, other ABS, loans

and other receivables, other secured financings or structured

February 2025 Form 10-Q 19

Notes to Consolidated Financial Statements

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

measurement. A significant increase (decrease) in the 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.

•Non-exchange-traded securities, loans and other receivables,

CDOs and CLOs, other ABS and other secured financings using

scenario analysis. A significant increase (decrease) in the

possible recovery rates and EBITDA multiple of the cash flow

outcomes 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 flow 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.

•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 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, 2024.

Fair value option gains (losses):

	Three Months Ended
$ in thousands	February 28, 2025	February 29, 2024
Financial instruments owned:
Loans and other receivables ................................	$13,283	$(7,410)
Other secured financings:
Other changes in fair value (2) .............................	$1,938	$(4,482)
Long-term debt:
Changes in instrument-specific credit risk (1) ..	$37,898	$(3,980)
Other changes in fair value (2) .............................	16,994	(43,817)

(1)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.

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

Fair value option amounts by which contractual principal is

greater than (less than) fair value:

$ in thousands	February 28, 2025	November 30, 2024
Financial instruments owned:
Loans and other receivables (1) ...........................	$1,317,633	$1,603,512
Loans and other receivables on nonaccrual status and/or 90 days or greater past due (1) (2) ...........................................................	188,801	132,838
Long-term debt .......................................................	198,249	131,107
Other secured financings ......................................	2,397	459

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

is included in Interest revenues.

(2)Amounts include loans and other receivables 90 days or greater past due by

which contractual principal exceeds fair value of $62.4 million and $48.8

million at February 28, 2025 and November 30, 2024, respectively.

The aggregate fair value of loans and other receivables on

nonaccrual status and/or 90 days or greater past due was $113.4

million and $126.9 million at February 28, 2025 and

November 30, 2024, respectively, which includes loans and other

receivables 90 days or greater past due of $111.0 million and

$120.0 million at February 28, 2025 and November 30, 2024,

respectively.

Assets Measured at Fair Value on a Non-recurring Basis

Certain assets were measured at fair value on a non-recurring

basis and are not included in the tables above. During the three

months ended February 29, 2024, our shares in Monashee, an

equity method investment, were converted to a newly created

class of nonmarketable preferred shares. Our equity method

investment was remeasured to a fair value of $21.9 million in

connection with its nonmonetary exchange into the preferred

shares, which are accounted for at cost pursuant to the

measurement alternative subsequent to the nonmonetary

exchange.

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, 2025 and November 30, 2024. There were no

impairments and downward adjustments on these investments

during the three months ended February 28, 2025 and

February 29, 2024.

20 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

Note 7. Derivative Financial Instruments

Our derivative activities are recorded at fair value 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, 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 ........................................	$4,897	3	$—	—
Foreign exchange contracts:
Bilateral OTC .......................................	58,815	3	—	—
Total derivatives designated as accounting hedges ............................	63,712		—
Derivatives not designated as accounting hedges:
Interest rate contracts:
Exchange-traded ................................	263	45,486	—	22,552
Cleared OTC ........................................	1,790,994	7,264	1,823,494	7,679
Bilateral OTC .......................................	350,898	1,518	667,793	991
Foreign exchange contracts:
Bilateral OTC .......................................	101,760	42,295	119,188	12,740
Equity contracts:
Exchange-traded ................................	842,797	2,002,426	731,454	1,764,359
Bilateral OTC .......................................	1,025,374	29,093	838,819	23,043
Commodity contracts:
Exchange-traded ................................	10	602	115	568
Bilateral OTC .......................................	4,519	11,289	1,509	5,148
Credit contracts:
Cleared OTC ........................................	43,080	106	42,589	72
Bilateral OTC .......................................	52,587	17	30,880	24
Total derivatives not designated as accounting hedges .......................	4,212,282		4,255,841
Total gross derivative assets/ liabilities:
Exchange-traded ................................	843,070		731,569
Cleared OTC ........................................	1,838,971		1,866,083
Bilateral OTC .......................................	1,593,953		1,658,189
Amounts offset in our Consolidated Statements of Financial Condition (3):
Exchange-traded ................................	(617,442)		(617,442)
Cleared OTC ........................................	(1,836,758)		(1,848,671)
Bilateral OTC .......................................	(1,163,126)		(1,111,264)
Net amounts per Consolidated Statements of Financial Condition (4) .................................	$658,668		$678,464

(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 2025 Form 10-Q 21

Notes to Consolidated Financial Statements

	November 30, 2024 (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 .........................................	$3,396	3	$—	—
Foreign exchange contracts:
Bilateral OTC ........................................	41,903	3	—	—
Total derivatives designated as accounting hedges .............................	45,299		—
Derivatives not designated as accounting hedges:
Interest rate contracts:
Exchange-traded .................................	273	16,548	13	32,984
Cleared OTC .........................................	1,030,842	6,663	1,030,671	6,891
Bilateral OTC ........................................	365,678	1,096	717,255	1,256
Foreign exchange contracts:
Bilateral OTC ........................................	132,240	57,786	138,608	35,545
Equity contracts:
Exchange-traded .................................	682,327	1,777,822	521,889	1,574,498
Bilateral OTC ........................................	855,169	33,516	1,024,129	20,587
Commodity contracts:
Exchange-traded .................................	22	806	17	697
Bilateral OTC .......................................	4,570	11,691	1,381	5,180
Credit contracts:
Cleared OTC .........................................	31,488	66	38,711	32
Bilateral OTC ........................................	37,618	16	31,353	32
Total derivatives not designated as accounting hedges .............................	3,140,227		3,504,027
Total gross derivative assets/ liabilities:
Exchange-traded .................................	682,622		521,919
Cleared OTC .........................................	1,065,726		1,069,382
Bilateral OTC ........................................	1,437,178		1,912,726
Amounts offset in our Consolidated Statements of Financial Condition (3):
Exchange-traded .................................	(476,364)		(476,364)
Cleared OTC .........................................	(1,058,995)		(1,066,232)
Bilateral OTC ........................................	(1,132,392)		(1,251,117)
Net amounts per Consolidated Statements of Financial Condition (4) ..................................	$517,775		$710,314

(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
Gains (Losses)	February 28, 2025	February 29, 2024
Interest rate swaps (1) ................................................	$(5,628)	$(4,558)
Long-term debt .............................................................	(6,691)	(11,267)
Total ...............................................................................	$(12,319)	$(15,825)

(1)Includes net settlements of $11.9 million and $15.8 million for the three

months ended February 28, 2025 and February 29, 2024, respectively.

Gains (losses) on our net investment hedges recognized in

Currency translation and other adjustments, a component of

Other comprehensive income (loss):

$ in thousands	Three Months Ended
Gains (Losses)	February 28, 2025	February 29, 2024
Foreign exchange contracts .......................................	$16,854	$2,117
Total ...............................................................................	$16,854	$2,117

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
Gains (Losses)	February 28, 2025	February 29, 2024
Interest rate contracts .................................................	$(22,502)	$21,722
Foreign exchange contracts .......................................	(4,875)	(9,834)
Equity contracts ...........................................................	494,216	(309,656)
Commodity contracts ..................................................	5,734	4,100
Credit contracts ............................................................	1,051	(4,573)
Total ...............................................................................	$473,624	$(298,241)

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

OTC Derivatives

Remaining contract maturities at February 28, 2025:

	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 ......................................	$4,514	$—	$—	$—	$4,514
Equity options and forwards ..........	237,386	216,424	—	—	453,810
Credit default swaps .......................	—	27,055	—	—	27,055
Total return swaps ...........................	150,024	54,555	231	(3,816)	200,994
Foreign currency forwards, swaps and options .................................	119,656	2,013	—	—	121,669
Fixed income forwards ...................	25,679	—	—	—	25,679
Interest rate swaps, options and forwards ......................................	68,054	157,692	32,137	(30,958)	226,925
Total ...................................................	$605,313	$457,739	$32,368	$(34,774)	1,060,646
Cross-product counterparty netting ..........................................					(36,026)
Total OTC derivative assets included in Financial instruments owned ....................					$1,024,620

	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 ......................................	$1,504	$—	$—	$—	$1,504
Equity options and forwards ..........	123,339	85,742	13,442	—	222,523
Credit default swaps ........................	1,049	3,748	—	—	4,797
Total return swaps ...........................	181,051	93,519	—	(3,816)	270,754
Foreign currency forwards, swaps and options .................................	78,859	1,425	—	—	80,284
Fixed income forwards ...................	718	—	—	—	718
Interest rate swaps, options and forwards ......................................	57,420	104,297	440,665	(30,958)	571,424
Total ...................................................	$443,940	$288,731	$454,107	$(34,774)	1,152,004
Cross-product counterparty netting ..........................................					(36,026)
Total OTC derivative liabilities included in Financial instruments sold, not yet purchased ...................................					$1,115,978

(1)At February 28, 2025, we held net exchange-traded derivative assets and

liabilities and other credit agreements with a fair value of $225.6 million and

$114.1 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, 2025, cash collateral received and pledged was $591.6 million

and $551.6 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, 2025:

Counterparty credit quality (1):	$ in thousands
A- or higher ...............................................................................................	$170,331
BBB- to BBB+ ...........................................................................................	42,612
BB+ or lower .............................................................................................	487,458
Unrated .....................................................................................................	324,219
Total ..........................................................................................................	$1,024,620

(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, 2025
	External Credit Rating
$ in millions	Investment Grade	Non- investment Grade	Total Notional
Credit protection sold:
Index credit default swaps .....................	$1,746.9	$605.2	$2,352.1

	November 30, 2024
	External Credit Rating
$ in millions	Investment Grade	Non- investment Grade	Total Notional
Credit protection sold:
Index credit default swaps .....................	$395.2	$553.4	$948.6

Contingent Features

Certain of our derivative instruments contain provisions that

require our debt to maintain an investment grade credit rating

from each of the major credit rating agencies. If our debt were to

fall below investment grade, it would be in violation of these

provisions and the counterparties to the derivative instruments

could request immediate payment or demand immediate and

ongoing full overnight collateralization on our derivative

instruments in liability positions. The following table presents the

aggregate fair value of all derivative instruments with such credit-

risk-related contingent features that are in a liability position, the

collateral amounts we have posted or received in the normal

course of business and the potential collateral we would 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, 2025	November 30, 2024
Derivative instrument liabilities with credit-risk- related contingent features ...................................	$135.5	$102.3
Collateral posted ..........................................................	(99.5)	(50.6)
Collateral received .......................................................	295.4	296.1
Return of and additional collateral required in the event of a credit rating downgrade below investment grade (1) ..............................................	331.4	347.8

(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 2025 Form 10-Q 23

Notes to Consolidated Financial Statements

Note 8. Collateralized Transactions

	February 28, 2025
$ in millions	Securities Lending Arrangements	Repurchase Agreements	Obligation to Return Securities Received as Collateral, at Fair Value	Total
Collateral Pledged:
Corporate equity securities .....................	$1,979.7	$2,190.7	$257.7	$4,428.1
Corporate debt securities .....................	474.9	5,146.5	—	5,621.4
Mortgage-backed and asset-backed securities .....................	—	2,187.7	—	2,187.7
U.S. government and federal agency securities .....................	30.3	8,665.9	—	8,696.2
Municipal securities ........	—	228.3	—	228.3
Sovereign obligations .....	16.8	1,889.9	29.4	1,936.0
Loans and other receivables ..................	—	376.4	—	376.4
Total ..................................	$2,501.6	$20,685.4	$287.1	$23,474.1

	November 30, 2024
$ in millions	Securities Lending Arrangements	Repurchase Agreements	Obligation to Return Securities Received as Collateral, at Fair Value	Total
Collateral Pledged:
Corporate equity securities .....................	$2,059.8	$1,394.2	$3.9	$3,457.8
Corporate debt securities .....................	416.4	4,522.5	—	4,938.9
Mortgage-backed and asset-backed securities .....................	—	2,384.8	—	2,384.8
U.S. government and federal agency securities .....................	30.9	6,837.1	—	6,868.0
Municipal securities ........	—	212.1	—	212.1
Sovereign obligations .....	33.7	1,981.0	181.7	2,196.4
Loans and other receivables ..................	—	757.4	—	757.4
Total ..................................	$2,540.9	$18,088.9	$185.6	$20,815.4

	February 28, 2025
$ in millions	Overnight and Continuous	Up to 30 Days	31-90 Days	Greater than 90 Days	Total
Securities lending arrangements ..............	$1,552.0	$138.4	$383.8	$427.4	$2,501.6
Repurchase agreements .	2,601.6	8,388.2	5,671.7	4,023.9	20,685.4
Obligation to return securities received as collateral, at fair value .............................	287.1	—	—	—	287.1
Total ...................................	$4,440.7	$8,526.6	$6,055.5	$4,451.3	$23,474.1

	November 30, 2024
$ in millions	Overnight and Continuous	Up to 30 Days	31-90 Days	Greater than 90 Days	Total
Securities lending arrangements ..............	$1,617.8	$154.3	$250.4	$518.4	$2,540.9
Repurchase agreements .	2,258.1	7,055.1	4,182.8	4,592.9	18,088.9
Obligation to return securities received as collateral, at fair value .............................	185.6	—	—	—	185.6
Total ...................................	$4,061.5	$7,209.4	$4,433.2	$5,111.2	$20,815.4

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, 2025 and

November 30, 2024, the approximate fair value of securities

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

$44.15 billion and $37.63 billion, respectively. At February 28,

2025 and November 30, 2024, a substantial portion of the

securities received by us had been sold or repledged.

24 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

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, 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 (3)
Assets:
Securities borrowing arrangements ...................................	$8,402.2	$—	$8,402.2	$(435.3)	$(1,804.9)	$6,162.0
Reverse repurchase agreements .........................................	15,146.3	(7,021.1)	8,125.2	(1,607.0)	(6,418.1)	100.1
Securities received as collateral, at fair value ...................	287.1	—	287.1	—	(287.1)	—
Liabilities:
Securities lending arrangements ........................................	$2,501.6	$—	$2,501.6	$(435.3)	$(1,999.0)	$67.3
Repurchase agreements .......................................................	20,685.4	(7,021.1)	13,664.3	(1,607.0)	(11,182.2)	875.1
Obligation to return securities received as collateral, at fair value .............................................................................	287.1	—	287.1	—	(287.1)	—

	November 30, 2024
$ 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 ...................................	$7,213.4	$—	$7,213.4	$(325.4)	$(1,537.3)	$5,350.7
Reverse repurchase agreements .........................................	11,930.7	(5,751.0)	6,179.7	(1,475.9)	(4,574.0)	129.8
Securities received as collateral, at fair value ...................	185.6	—	185.6	—	(185.6)	—
Liabilities:
Securities lending arrangements ........................................	$2,540.9	$—	$2,540.9	$(325.4)	$(2,091.4)	$124.1
Repurchase agreements .......................................................	18,088.9	(5,751.0)	12,337.9	(1,475.9)	(10,274.6)	587.4
Obligation to return securities received as collateral, at fair value .............................................................................	185.6	—	185.6	—	(185.6)	—

(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 $6.10 billion of securities borrowing arrangements, for which we have received securities collateral of $5.94 billion, and $815.0 million of repurchase

agreements, for which we have pledged securities collateral of $831.5 million, which are subject to master netting agreements, but we have not determined the

agreements to be legally enforceable.

(4)Includes $5.31 billion of securities borrowing arrangements, for which we have received securities collateral of $5.19 billion, and $645.0 million of repurchase

agreements, for which we have pledged securities collateral of $656.9 million, which are subject to master netting agreements, but we have not determined the

agreements to be legally enforceable.

February 2025 Form 10-Q 25

Notes to Consolidated Financial Statements

Cash and Securities Segregated and on Deposit for Regulatory

Purposes or Deposited with Clearing and Depository

Organizations

Cash and securities segregated in accordance with regulatory

regulations and deposited with clearing and depository

organizations primarily consist of deposits in accordance with

Rule 15c3-3 of the Securities Exchange Act of 1934, which

subjects Jefferies LLC as a broker-dealer carrying customer

accounts to requirements related to maintaining cash or qualified

securities in segregated special reserve bank accounts for the

exclusive benefit of its customers.

$ in millions	February 28,  2025	November 30,  2024
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations ...................	$1,665.9	$1,132.6

Note 9. 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 10, 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.

Securitizations that were accounted for as sales in which we had

continuing involvement:

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Transferred assets .....................................................	$42.0	$1,502.0
Proceeds on new securitizations .............................	42.0	1,502.0
Cash flows received on retained interests ..............	6.4	11.0

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, 2025 and November 30, 2024.

Our retained interests in SPEs where we transferred assets and

have continuing involvement and received sale accounting

treatment:

$ in millions	February 28, 2025		November 30, 2024
Securitization Type	Total Assets	Retained Interests	Total Assets	Retained Interests
U.S. government agency RMBS ...	$3,125.7	$29.7	$3,956.8	$105.7
U.S. government agency CMBS ...	1,348.6	55.6	1,817.1	91.8
CLOs .................................................	9,083.5	31.3	9,001.9	37.2
Consumer and other loans ...........	1,204.0	36.1	1,424.4	52.1

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 10, Variable

Interest Entities.

Note 10. 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;

•Acting as servicer for a fee to automobile loan financing

vehicles;

26 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

•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.

Consolidated VIEs:

	February 28, 2025 (1)
$ in millions	Secured Funding Vehicles	Other
Cash ...................................................................................	$—	$2.0
Financial instruments owned ........................................	—	43.4
Securities purchased under agreements to resell (2)	2,964.0	—
Receivables from brokers (3) .........................................	—	18.9
Other receivables .............................................................	—	3.0
Other assets (4) ...............................................................	—	89.3
Total assets ......................................................................	$2,964.0	$156.6
Financial instruments sold, not yet purchased ...........	$—	$9.0
Other secured financings (5) .........................................	2,958.8	22.8
Other liabilities (6) ...........................................................	5.2	23.4
Long-term debt ................................................................	—	70.1
Total liabilities .................................................................	$2,964.0	$125.3

	November 30, 2024 (1)
$ in millions	Secured Funding Vehicles	Other
Cash ...................................................................................	$—	$1.6
Financial instruments owned .........................................	—	40.0
Securities purchased under agreements to resell (2)	2,829.7	—
Receivables from brokers (3) .........................................	—	23.5
Other receivables .............................................................	—	3.0
Other assets (4) ...............................................................	—	90.3
Total assets ......................................................................	$2,829.7	$158.4
Financial instruments sold, not yet purchased ...........	$—	$7.6
Other secured financings (5) .........................................	2,823.0	26.1
Other liabilities (6) ...........................................................	6.7	23.1
Long-term debt ................................................................	—	70.1
Total liabilities .................................................................	$2,829.7	$126.9

(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 from related consolidated entities, which

are all eliminated in consolidation.

(3)$1.0 million and $1.5 million of receivables from brokers at February 28, 2025

and November 30, 2024, respectively, are with related consolidated entities,

which are eliminated in consolidation.

(4)$3.5 million and $3.4 million of the other assets at February 28, 2025 and

November 30, 2024, respectively, represent intercompany receivables with

related consolidated entities, which are eliminated in consolidation.

(5)$855.4 million and $719.0 million of the other secured financings at

February 28, 2025 and November 30, 2024, respectively, are with related

consolidated entities and are eliminated in consolidation.

(6)$22.0 million of the other liabilities amounts at both February 28, 2025 and

November 30, 2024, are with related consolidated entities, which are

eliminated in consolidation.

Secured Funding Vehicles. We are the primary beneficiary of

asset-backed financing vehicles to which we sell agency and non-

agency residential and commercial mortgage loans, and asset-

backed securities 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, which we manage, 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. In addition, we also from time to time

securitize other financial instruments and own variable interests

in the securitization vehicles to the extent that we consolidate

such vehicles.

Other. We are the primary beneficiary of certain investment

vehicles that we manage for external investors and certain

investment vehicles set up for the benefit of our employees as

well as investment vehicles managed by third parties where we

have a controlling financial interest. 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. 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.

February 2025 Form 10-Q 27

Notes to Consolidated Financial Statements

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 interest in the VIEs primarily

consists of our ownership of certificates issued by the VIEs.

Nonconsolidated VIEs

	February 28, 2025
	Carrying Amount		Maximum Exposure to Loss	VIE Assets
$ in millions	Assets	Liabilities
CLOs ......................................	$1,356.6	$26.3	$6,109.4	$15,549.0
Asset-backed vehicles ........	853.6	—	989.5	4,354.2
Related party private equity vehicles ............................	3.3	—	13.6	33.9
Other investment vehicles ..	1,238.7	—	1,394.5	19,586.5
Total .......................................	$3,452.2	$26.3	$8,507.0	$39,523.6

	November 30, 2024
	Carrying Amount		Maximum Exposure to Loss	VIE Assets
$ in millions	Assets	Liabilities
CLOs ......................................	951.8	$26.5	$6,511.1	$14,872.4
Asset-backed vehicles ........	827.4	—	946.3	4,266.7
Related party private equity vehicles ............................	3.7	—	14.0	34.4
Other investment vehicles ..	1,107.8	—	1,365.8	19,064.1
Total .......................................	$2,890.7	$26.5	$8,837.2	$38,237.6

Our maximum exposure to loss often differs from the carrying

value of the variable interests. The maximum exposure to loss is

dependent on the nature of our variable interests in the VIEs and

is limited to the notional amounts of certain loan and equity

commitments and guarantees. Our 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 and is not reduced by the amount of

collateral held as part of a transaction with a VIE.

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 in

connection with CLOs where we have been involved in providing

underwriting and/or advisory services consist of the following:

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

price, corporate loans and ownership interests in an entity

holding such corporate loans to CLOs;

•Warehouse funding arrangements in the form of:

◦Participation interests in corporate loans held by CLOs and

commitments to fund such participation interests;

◦Reverse repurchase agreements with collateral margin

maintenance obligations and commitments to fund such

reverse repurchase agreements; and

◦Senior and subordinated notes issued in connection with

CLO warehousing activities.

•Trading positions in securities issued in CLO transactions; and

•Investments in variable funding notes issued by CLOs.

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 11, 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 in the JCP Funds, JCP General

Partners and JCP Manager (collectively, the “JCP Entities”)

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 both February 28, 2025 and November 30, 2024, our

total equity commitment in the JCP Entities was $133.0 million,

of which $123.2 million had been funded. The carrying value of

our equity investments in the JCP Entities was $2.8 million and

$3.2 million at February 28, 2025 and November 30, 2024,

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

carrying value and unfunded equity commitment. The assets of

the JCP Entities primarily consist of private equity and equity

related investments. At both February 28, 2025 and November 30,

2024, we had also committed to invest $1.0 million, of which $0.5

million was funded in a private equity fund managed by us for the

benefit of our employees. The carrying value of our equity was

$0.5 million at both February 28, 2025 and November 30, 2024.

Other Investment Vehicles. At February 28, 2025 and

November 30, 2024, we had equity commitments to invest $1.46

billion and $1.43 billion, respectively, in various other investment

vehicles, of which $1.30 billion and $1.17 billion was funded,

respectively. The carrying value of our equity investments was

$1.24 billion and $1.11 billion at February 28, 2025 and

November 30, 2024, respectively. 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 and various oil and gas

assets.

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.

28 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

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, 2025 and November 30, 2024, we held $1.55

billion and $1.84 billion of agency mortgage-backed securities,

respectively, and $67.6 million and $201.1 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 11. 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, 2025	November 30, 2024
Total Investments in and loans to related parties ........................................................	$1,383.3	$1,385.7

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Total equity method pickup earnings recognized in Other revenues ....................................................	$7.1	$8.7

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, 2025,

November 30, 2024 and February 29, 2024.

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, 2025, 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, 2025, our remaining

commitment to Jefferies Finance was $15.4 million. The

investment commitment is scheduled to expire on March 1, 2026

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 Secured Revolving Credit

Facility is a committed amount of $500.0 million at February 28,

2025. Advances are shared equally between us and MassMutual.

The facility is scheduled to mature on March 1, 2026 with

automatic one year extensions absent a 60 day termination

notice by either party. At February 28, 2025, our $250.0 million

commitment was undrawn.

Activity related to the facility:

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Unfunded commitment fees .......................................	$0.3	$0.3

Selected financial information for Jefferies Finance:

$ in millions	February 28, 2025	November 30, 2024
Total assets ....................................................	$6,007.1	$5,762.6
Total liabilities ................................................	4,669.9	4,415.6
Total mezzanine equity .................................	13.8	14.4

$ in millions	February 28, 2025	November 30, 2024
Our total investment balance .......................	$661.7	$666.3

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Net earnings (losses) attributable to members ........	$(1.7)	$6.9

February 2025 Form 10-Q 29

Notes to Consolidated Financial Statements

Activity related to our other transactions with Jefferies Finance:

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Origination and syndication fee revenues (1) ..........	$60.2	$52.4
Origination fee expenses (1) ......................................	18.5	14.9
CLO placement and structuring fee revenues (2) ..	0.2	—
Investment fund placement fee revenues (3) ...........	0.6	0.5
Service fees (4) .............................................................	54.4	44.9

(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, for which we recognized fees and are included in

Investment banking revenues.

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

Finance, for which we recognized fees and are included in Commissions and

other fees.

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

administrative services provided.

In connection with non-U.S. dollar loans originated by Jefferies

Finance to borrowers who are investment banking clients of ours,

we have entered into an agreement to indemnify Jefferies

Finance with respect to any foreign currency exposure.

Receivables from Jefferies Finance, included in Other assets,

were $2.5 million and $1.9 million at February 28, 2025 and

November 30, 2024, respectively. At November 30, 2024,

payables to Jefferies Finance, related to cash deposited with us

and included in Payables to customers, was $13.7 million.

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 and corporate guaranty, and we have

agreed to reimburse Berkshire Hathaway for one-half of any

losses incurred thereunder. At February 28, 2025, the aggregate

amount of commercial paper outstanding was $1.47 billion.

Selected financial information for Berkadia:

$ in millions	February 28, 2025	November 30, 2024
Total assets ...................................................	$4,183.1	$4,963.2
Total liabilities ...............................................	2,840.6	3,515.6
Total noncontrolling interest .......................	397.0	502.1

$ in millions	February 28, 2025	November 30, 2024
Our total investment balance .......................	$428.5	$427.7

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Net earnings attributable to members ......................	$37.8	$29.3

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Distributions ..................................................................	$16.1	$3.8

At February 28, 2025 and November 30, 2024, we had

commitments to purchase $18.1 million and $21.8 million,

respectively, of agency CMBS from Berkadia.

Activity related to our other transactions with Berkadia:

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Transaction referral fee revenue (1) ..........................	$0.1	$—

(1)We refer Berkadia to our clients to act as a transaction servicer and receive

fees, which are included in Commissions and other fees.

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 our significant real estate

investments:

$ in millions	February 28, 2025	November 30, 2024
Total assets ....................................................	$329.2	$326.0
Total liabilities ................................................	484.2	484.7
	February 28, 2025	November 30, 2024
Our total investment balance .......................	$99.1	$97.8

	Three Months Ended
$ in millions	February 28, 2025	February 29, 2024
Net earnings ..................................................................	$4.6	$2.5

30 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

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 $2.7 million and $2.9 million at February 28, 2025 and

November 30, 2024, respectively. 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
$ in millions	February 28, 2025	February 29, 2024
Net losses from our investments in JCP Fund V ......	$(0.2)	$(0.3)

At both February 28, 2025 and November 30, 2024, we were

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

At both February 28, 2025 and November 30, 2024, 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, 2025 of the combined

equity interests:

	Three Months Ended December 31,
$ in millions	2024	2023
Net decrease in net assets resulting from operations (1) ..........................................................	$(0.6)	$(0.9)

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

three months ended February 28, 2025 and February 29, 2024 is included

based on the periods presented.

Asset Management Investments

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. The

investment is accounted for under the equity method with a

carrying amount of $28.1 million and $27.5 million at

February 28, 2025 and November 30, 2024, respectively. On

March 1, 2025 we made an additional investment of $75 million

in Hildene Insurance, which resulted in an increase of our

effective ownership from 8.83% to 23.3%.

Selected financial information for 100.0% of Hildene Insurance:

$ in millions	December 31, 2024 (1)	September 30, 2024 (1)
Total assets ....................................................	$359.1	$304.2
Total liabilities ................................................	31.8	0.2
Total members’ equity ..................................	327.3	304.0

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

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

financial position at February 28, 2025 and November 30, 2024 is based on

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

ended February 28, 2025 is based on the period presented.

ApiJect

We own shares that represent a 33.6% economic interest in

ApiJect at both February 28, 2025 and at November 30, 2024,

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, 2025 and November 30, 2024, the

total fair value of our total equity investment in common shares

of ApiJect was $116.1 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, and we have a right to 1.125% of ApiJect’s future

revenues.

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

for $23.3 million, which will mature on April 30, 2025. 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, 2025 and November 30, 2024, which would be

classified as Level 3 in the fair value hierarchy.

Aircadia

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

owned subsidiary, purchased airplanes 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 recognized within Premises

and equipment at $57.7 million. During the three months ended

February 28, 2025 and February 29, 2024, we recognized $5.6

million and $3.8 million, respectively, of operating lease income.

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

$0.7 million and $0.6 million on the loan during the three months

ended February 28, 2025 and February 29, 2024, 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

$37.1 million at both February 28, 2025 and November 30, 2024,

and are classified within Level 3 of the fair value hierarchy.

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

May 2025, 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 the three months

ended February 28, 2025.

During 2024, we classified the airplanes related to the sale

leaseback transaction as held for sale. The airplanes are included

within Assets held for sale on our Consolidated Statements of

Financial Condition and have a carrying amount of $51.9 million

at both February 28, 2025 and November 30, 2024. We are

actively pursuing avenues to dispose of the airplanes through a

sale process. Effective with the designation of the airplanes as

held for sale, we suspended recording depreciation on these

assets.

Note 12. 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

February 2025 Form 10-Q 31

Notes to Consolidated Financial Statements

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.

Allowance for credit losses for investment banking receivables:

	Three Months Ended
$ in thousands	February 28, 2025	February 29, 2024
Beginning balance .............................................	$5,277	$6,306
Bad debt expense ..............................................	1,347	1,011
Charge-offs .........................................................	(3,076)	(2,500)
Recoveries collected .........................................	(1,502)	(1,854)
Ending balance (1) .............................................	$2,046	$2,963

(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. During the three months

ended February 29, 2024, we recognized bad debt expense of

$27.0 million related to receivables associated with our asset

management arrangements with Weiss Multi-Strategy Advisers.

Note 13. Goodwill and Intangible Assets

Goodwill

	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

	Three Months Ended February 29, 2024
$ in thousands	Investment Banking and Capital Markets	Asset Management	Total
Balance, at beginning of period ...................	$1,532,172	$315,684	$1,847,856
Currency translation and other adjustments ..............................................	(231)	—	(231)
Measurement period adjustments (1) ........	—	(26,954)	(26,954)
Goodwill relating to acquisitions by Tessellis .....................................................	—	3,366	3,366
Balance, at end of period .............................	$1,531,941	$292,096	$1,824,037

(1)Refer to Note 4, Business Acquisitions for further discussion.

Carrying values of goodwill by reporting unit:

$ in millions	February 28, 2025	November 30, 2024
Investment banking .............................................................	$700.1	$700.7
Equities and wealth management .....................................	255.2	255.4
Fixed income ........................................................................	576.5	576.9
Asset management .............................................................	143.0	143.0
Other investments ...............................................................	149.8	151.9
Total ......................................................................................	$1,824.6	$1,827.9

Intangible Assets

	February 28, 2025				Weighted Average Remaining Lives (Years)
$ in thousands	Gross Cost	Assets Acquired	Accumulated Amortization	Net Carrying Amount
Customer relationships .......................	$161,576	$622	$(107,035)	$55,163	5.3
Trademarks and trade names ............	156,418	—	(49,634)	106,784	21.2
Exchange and clearing organization membership interests and registrations ..........................................	8,678	—	—	8,678	N/A
Other ......................................................	76,049	41	(33,456)	42,634	3.6
Total .......................................................	$402,721	$663	$(190,125)	$213,259

	November 30, 2024					Weighted Average Remaining Lives (Years)
$ in thousands	Gross Cost	Assets Acquired (1)	Impairment Losses	Accumulated Amortization	Net Carrying Amount
Customer relationships	$136,049	$26,450	$—	$(104,539)	$57,960	5.6
Trademarks and trade names ..............................	146,032	8,533	—	(45,412)	109,153	21.4
Exchange and clearing organization membership interests and registrations ............	8,715	—	(10)	—	8,705	N/A
Other ................................	50,930	26,316	—	(26,693)	50,553	3.9
Total ................................	$341,726	$61,299	$(10)	$(176,644)	$226,371

(1)Includes a $39.3 million measurement period adjustment recorded during the

first quarter of 2024 related to the OpNet acquisition. Refer to Note 4,

Business Acquisitions for further information.

Amortization Expense

For finite life intangible assets, we recognized aggregate

amortization expense of $7.8 million and $5.6 million for the

three months ended February 28, 2025 and February 29, 2024,

respectively. These expenses are included in Depreciation and

amortization.

32 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

Estimated future amortization expense for the next five fiscal

years (in thousands):

Remainder of fiscal year 2025 ................................................................	$22,496
Year ending November 30, 2026 ............................................................	29,880
Year ending November 30, 2027 ............................................................	27,563
Year ending November 30, 2028 ............................................................	26,383
Year ending November 30, 2029 ............................................................	15,382

Note 14. Revenues from Contracts with Customers

	Three Months Ended
$ in thousands	February 28, 2025	February 29, 2024
Revenues from contracts with customers:
Investment banking .....................................................	$725,661	$679,065
Commissions and other fees ....................................	287,965	245,543
Asset management fees .............................................	45,808	29,361
Real estate revenues ...................................................	11,081	3,149
Internet connection and broadband revenues (1) ...	57,804	63,616
Other contracts with customers ................................	16,107	14,099
Total revenue from contracts with customers .......	1,144,426	1,034,833
Other sources of revenue:
Principal transactions ..................................................	407,230	640,736
Revenues from strategic affiliates ............................	43,449	21,011
Interest ...........................................................................	845,171	819,489
Other (1) .........................................................................	32,588	35,873
Total revenues .............................................................	$2,472,864	$2,551,942

(1)There was an immaterial correction associated with classification of certain

revenue as revenue from contracts with customers, which resulted in a

$63.6 million decrease in other revenue and a $63.6 million increase in

internet connection and broadband revenues for the three months ended

February 29, 2024.

Disaggregation of Revenue

	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