JEF 10-Q Quarterly Report Feb. 28, 2025

JEFFERIES FINANCIAL GROUP INC.

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jef-20250228

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


☐	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 unrealiz ed 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