Jefferies Financial Group Inc. Files 10-Q for Period Ending February 29, 2024

TL;DR

<b>Jefferies Financial Group Inc. has filed its quarterly report (10-Q) for the period ending February 29, 2024.</b>

AI Summary

Jefferies Financial Group Inc. (JEF) filed a Quarterly Report (10-Q) with the SEC on April 5, 2024. Jefferies Financial Group Inc. filed a 10-Q report for the period ending February 29, 2024. The filing covers the period from December 1, 2023, to February 29, 2024. The company's fiscal year ends on November 30. Jefferies Financial Group Inc. is classified under SIC code 6211 (Security Brokers, Dealers & Flotation Companies). The company's principal business address is 520 Madison Avenue, New York, NY 10022.

Why It Matters

For investors and stakeholders tracking Jefferies Financial Group Inc., this filing contains several important signals. This 10-Q filing provides investors and analysts with the latest financial performance and operational details of Jefferies Financial Group Inc. for the specified quarter. Understanding the company's financial health, revenue streams, and any disclosed risks is crucial for making informed investment decisions regarding JEF.

Risk Assessment

Risk Level: low — Jefferies Financial Group Inc. shows low risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report and does not inherently contain significant new risks beyond those typically associated with financial services firms.

Analyst Insight

Review the detailed financial statements and segment performance within the 10-Q to assess Jefferies Financial Group Inc.'s current operational health and identify any emerging trends.

Revenue Breakdown

Key Numbers

• 2024-02-29 — Reporting Period End Date (Conformed period of report)
• 2024-04-05 — Filing Date (Filed as of date)
• 1130 — Fiscal Year End (Fiscal year end)
• 6211 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• Jefferies Financial Group Inc. (company) — Filer name
• New York (location) — Business and mailing address state
• Leucadia National Corp (company) — Former company name
• Talcott National Corp (company) — Former company name

FAQ

Key Dates

• 2024-02-29: Quarter End — End of the reporting period for the 10-Q.
• 2024-04-05: Filing Date — Date the 10-Q was officially filed with the SEC.

Key Financial Figures

• $1 — ch registered Common Shares, par value $1 per share JEF New York Stock Exchange

Filing Documents

• jef-20240229.htm (10-Q) — 3946KB
• exhibit3112292024.htm (EX-31.1) — 10KB
• exhibit3122292024.htm (EX-31.2) — 10KB
• exhibit3212292024.htm (EX-32.1) — 6KB
• exhibit3222292024.htm (EX-32.2) — 6KB
• jef-20240229_g1.jpg (GRAPHIC) — 87KB
• jef-20240229_g2.jpg (GRAPHIC) — 101KB
• 0000096223-24-000015.txt (&nbsp;) — 22825KB
• jef-20240229.xsd (EX-101.SCH) — 150KB
• jef-20240229_cal.xml (EX-101.CAL) — 156KB
• jef-20240229_def.xml (EX-101.DEF) — 900KB
• jef-20240229_lab.xml (EX-101.LAB) — 1425KB
• jef-20240229_pre.xml (EX-101.PRE) — 1141KB
• jef-20240229_htm.xml (XML) — 4691KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Page

Financial Statements

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)

Notes to Consolidated Financial Statements (Unaudited) 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 66

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 100

Controls and Procedures

Item 4. Controls and Procedures 100

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 101

Risk Factors

Item 1A. Risk Factors 101

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 101

Other Information

Item 5. Other Information 101

Exhibits

Item 6. Exhibits 102 1 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. JEFFERIES FINANCIAL GROUP INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (In thousands except share and per share amounts) February 29, 2024 November 30, 2023 ASSETS Cash and cash equivalents $ 7,615,691 $ 8,526,363 Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations (includes $ 126,340 and $ 110,198 at fair value) 1,195,346 1,414,593 Financial instruments owned, at fair value (includes securities pledged of $ 17,369,731 and $ 17,158,747 ) 23,211,546 21,747,473 Investments in and loans to related parties 1,267,570 1,239,345 Securities borrowed 6,789,055 7,192,091 Securities purchased under agreements to resell 7,546,785 5,950,549 Securities received as collateral, at fair value 110,897 8,800 Receivables: Brokers, dealers and clearing organizations 3,008,327 2,380,732 Customers 1,860,124 1,705,425 Fees, interest and other 612,296 630,142 Premises and equipment 1,103,490 1,065,680 Assets held for sale (includes pledged assets of $ 25,600 and $ 181,900 at fair value) 1,571,981 1,545,472 Goodwill 1,824,037 1,847,856 Other assets (includes assets pledged of $ 321,367 and $ 244,604 ) 3,215,855 2,650,640 Total assets $ 60,933,000 $ 57,905,161 LIABILITIES AND EQUITY Short-term borrowings $ 1,254,310 $ 989,715 Financial instruments sold, not yet purchased, at fair value 12,043,950 11,251,154 Securities loaned 2,709,170 1,840,518 Securities sold under agreements to repurchase 11,596,778 10,920,606 Other secured financings (includes $ 3,965 and $ 3,898 at fair value) 1,429,753 1,430,199 Obligation to return securities received as collateral, at fair value 110,897 8,800 Payables: Brokers, dealers and clearing organizations 3,947,779 3,737,810 Customers 4,202,162 3,960,557 Lease liabilities 533,761 544,650 Liabilities held for sale 1,146,802 1,173,648 Accrued expenses and other liabilities 2,172,485 2,546,211 Long-ter

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Index Note Page Note 1. Organization and Basis of Presentation 9 Note 2. Summary of Significant Accounting Policies 10 Note 3. Accounting Developments 10 Note 4. Business Acquisitions 12 Note 5. Assets Held for Sale and Discontinued Operations 14 Note 6. Fair Value Disclosures 16 Note 7. Derivative Financial Instruments 26 Note 8. Collateralized Transactions 32 Note 9. Securitization Activities 36 Note 10. Variable Interest Entities 37 Note 11. Investments 41 Note 12. Credit Losses on Financial Assets Measured at Amortized Cost 47 Note 13. Goodwill and Intangible Assets 49 Note 14. Revenues from Contracts with Customers 50 Note 15. Compensation Plans 53 Note 16. Borrowings 54 Note 17. Total Equity 57 Note 18. Income Taxes 59 Note 19. Commitments, Contingencies and Guarantees 60 Note 20. Regulatory Requirements 62 Note 21. Segment Reporting 63 Note 22. Related Party Transactions 65 8 Table of Contents JEFFERIES FINANCIAL GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) 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 across most industry sectors. We operate globally in the Americas; Europe and the Middle East; and Asia-Pacific. Investment Banking and Capital Markets also includes our corporate lending joint venture ("JFIN Parent LLC" or "Jefferies Finance"), our commercial real estate joint venture ("Berkadia Commercial Holding LLC" or "Berkadia") and 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. On January 13, 2023, our consolidated subsidiary, Vitesse Energy, Inc. ("Vitesse Energy"), issued shares measured at a total consideration of $ 30.6 million in exchange for acquiring all of the outstanding capital interests of Vitesse Oil, LLC ("Vitesse Oil"). Prior to the acquisition, Vitesse Oil was controlled by Jefferies Capital Partners V L.P. and Jefferies SBI USA Fund L.P. (together, "JCP Fu

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) 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 th

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) Financial Instruments - Credit Losses . In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. The guidance provides for estimating credit losses on financial assets measured at amortized cost by introducing an approach based on expected losses over the financial asset's entire life, recorded at inception or purchase. On January 1, 2023, Berkadia, our equity method investee, adopted this guidance and applied a modified retrospective approach through a cumulative-effect adjustment to retained earnings upon adoption. At transition on January 1, 2023, the new accounting guidance's adoption resulted in a decrease in retained earnings of $ 14.8 million, net of tax attributable to an increase in the allowance for credit losses. Our equity method investee, Jefferies Finance, adopted the guidance on December 1, 2023, and the impact on our consolidated financial statements was not material . 11 Table of Contents JEFFERIES FINANCIAL GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) Note 4. Business Acquisitions We acquired Stratos and OpNet during the fourth quarter of 2023. Stratos is a global provider of online foreign exchange services. OpNet is a fixed wireless broadband service provider in Italy and also owns 59.3 % of the common shares of Tessellis S.p.A. ("Tessellis"), a telecommunications company publicly listed on the Italian stock exchange. These transac

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