UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended February 28, 2026

OR

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

For the transition period from to

Commission file number 1-05721

Jefferies Financial Group Inc.

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

past 90 days. Yes ☒ No ☐

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

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

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

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

the Exchange Act.

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

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

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

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

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

Jefferies Financial Group, Inc.

Index to Quarterly Report on Form 10-Q

February 28, 2026

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

2		Jefferies Financial Group Inc.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

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

See accompanying notes to consolidated financial statements.

February2026 Form 10-Q		3

Consolidated Statements of Earnings (Unaudited)

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

See accompanying notes to consolidated financial statements.

4		Jefferies Financial Group Inc.

Consolidated Statements of Comprehensive Income(Unaudited)

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

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

months endedFebruary 28, 2025.

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

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

noncontrolling interests.

See accompanying notes to consolidated financial statements.

February2026 Form 10-Q		5

Consolidated Statements of Changes in Equity (Unaudited)

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

See accompanying notes to consolidated financial statements.

6		Jefferies Financial Group Inc.

Consolidated Statements of Cash Flows (Unaudited)

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

February2026 Form 10-Q		7

Consolidated Statements of Cash Flows (Unaudited)

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

Noncash investing activities:

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

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

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

See accompanying notes to consolidated financial statements.

8		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Index

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

February2026 Form 10-Q		9

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Organization and Basis of Presentation

Organization

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

investment banking and capital markets firm. The accompanying

consolidated financial statements represent the accounts of

Jefferies Financial Group Inc. and subsidiaries (together, the

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

subsidiaries and through our affiliates, deliver a broad range of

financial services across investment banking, capital markets

and asset management.

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

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

Investment Banking and Capital Markets reportable business

segment includes our capital markets activities and our

investment banking business, which provides underwriting and

financial advisory services to our clients. We operate in the

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

Investment Banking and Capital Markets also includes our

corporate lending joint venture (“Jefferies Finance LLC” or

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

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

Management reportable business segment provides alternative

investment management services to investors globally and

generates investment income from capital invested in and

managed by us or our affiliated asset managers, and includes

certain remaining businesses and assets of our legacy merchant

banking portfolio.

Basis of Presentation

The accompanying consolidated financial statements have been

prepared in accordance with U.S. generally accepted accounting

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

our consolidated financial statements and notes thereto included

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

30, 2025. Certain footnote disclosures included in our Annual

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

been condensed or omitted from the consolidated financial

statements as they are not required for interim reporting under

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

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

of management, necessary for the fair presentation of the results

for the interim period. The results presented in our consolidated

financial statements for interim periods are not necessarily

indicative of the results for the entire year.

We have made a number of estimates and assumptions relating

to the reporting of assets and liabilities, the disclosure of

contingent assets and liabilities and the reported amounts of

revenues and expenses during the reporting period to prepare

these consolidated financial statements in conformity with U.S.

GAAP. The most important of these estimates and assumptions

relate to fair value measurements, compensation and benefits,

goodwill and intangible assets and the accounting for income

taxes. Although these and other estimates and assumptions are

based on the best available information, actual results could be

materially different from these estimates.

Certain prior period amounts in our consolidated financial

statements and respective notes have been reclassified to be

consistent with the current period presentation. Such

reclassifications had no impact on net earnings, total assets,

total liabilities, or stockholders’ equity.

Consolidation

Our policy is to consolidate all entities that we control by

ownership of a majority of the outstanding voting stock. In

addition, we consolidate entities that meet the definition of a

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

beneficiary. The primary beneficiary is the party who has the

power to direct the activities of a VIE that most significantly

impact the entity’s economic performance and who has an

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

benefits from the entity that could potentially be significant to the

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

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

Noncontrolling interests in our Consolidated Statements of

Financial Condition and Consolidated Statements of Changes in

Equity. The portion of net earnings attributable to the

noncontrolling interests is presented as Net earnings (losses)

attributable to noncontrolling interests in our Consolidated

Statements of Earnings.

In situations in which we have significant influence, but not

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

the equity method of accounting or fair value accounting

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

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

revenues or Principal transactions revenues, respectively. We

also have formed nonconsolidated investment vehicles with

third-party investors that are typically organized as partnerships

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

as general partner or managing member for these investment

vehicles and have generally provided the third-party investors

with termination or “kick-out” rights.

Intercompany accounts and transactions are eliminated in

consolidation.

Note 2. Summary of Significant Accounting Policies

For a detailed discussion about the Company’s significant

accounting policies, refer to Note 2, Summary of Significant

Accounting Policies in our consolidated financial statements

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

the year ended November 30, 2025.

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

significant changes made to the Company’s significant

accounting policies.

Note 3. Accounting Developments

Accounting Standards to be Adopted in Future Periods

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

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

Disclosures. The guidance is intended to improve income tax

disclosure requirements by requiring (i) consistent categories

and greater disaggregation of information in the rate

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

jurisdiction. The guidance makes several other changes to the

income tax disclosure requirements. The amendments in ASU

2023-09 are effective for fiscal years beginning after December

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

option of retrospective application. We are evaluating the impact

of the standard on our income tax disclosures.

10		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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

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

The guidance primarily will require enhanced disclosures about

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

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

interim periods within fiscal years beginning after December 15,

2027 and may be applied either on a prospective or retrospective

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

disclosures.

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

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

guidance provides an optional practical expedient when applying

the guidance related to the estimation of expected credit losses

for current accounts receivable and current contract assets

resulting from transactions arising from contracts with

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

fiscal years beginning after December 15, 2025, and interim

reporting periods, with early adoption permitted. We are

evaluating the impact of the standard on our financial

statements.

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

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

Internal-Use Software. The guidance modernizes and clarifies the

threshold for when an entity is required to start capitalizing

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

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

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

will be used to perform the function intended. The amendments

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

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

adoption permitted. We are evaluating the impact of the standard

on our financial statements.

Derivatives and Hedging and Revenue from Contracts with

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

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

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

guidance refines the scope of Topic 815 to clarify which

contracts are subject to derivative accounting. The guidance also

provides clarification under Topic 606 for share-based payments

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

2025-07 are effective for fiscal years beginning after December

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

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

financial statements.

Adopted Accounting Standards

Segment Reporting. In November 2023, the Financial Accounting

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

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

The guidance primarily requires enhanced disclosures about

significant segment expenses. We adopted the guidance

beginning with our year ended November 30, 2025, which

impacted our disclosures only. Refer to Note 20, Segment

Reporting for additional information.

Note 4. Assets and Liabilities Held for Sale

Tessellis

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

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

quarter of 2027.

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

carrying value or estimated fair value, less estimated costs to

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

recording depreciation and amortization expense on such assets.

Tessellis is included within our asset management reportable

segment.

Tessellis’ major classes of assets and liabilities:

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

February2026 Form 10-Q		11

Notes to Consolidated Financial Statements

(Unaudited)

Note 5. Fair Value Disclosures

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

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

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

12		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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

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

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

February2026 Form 10-Q		13

Notes to Consolidated Financial Statements

(Unaudited)

There have been no significant changes in valuation techniques

and inputs used in measuring our financial assets and liabilities

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

our consolidated financial statements included in Part II, Item 8

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

November 30, 2025.

Investments at Fair Value

Investments at fair value includes investments in hedge funds,

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

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

the fund managers and are excluded from the fair value

hierarchy. Investments at fair value also include direct equity

investments in private companies, which are measured at fair

value using valuation techniques involving quoted prices of or

market data for comparable companies, similar company ratios

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

cash flow analyses and transaction prices observed for

subsequent financing or capital issuance by the company. Direct

equity investments in private companies are categorized within

Level 2 or Level 3 of the fair value hierarchy.

Information about our investments in entities that have the

characteristics of an investment company:

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

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

N/R - Not redeemable

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

each of the funds’ capital statements.

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

both public and private equity securities in domestic and international

markets, commodities and multi-asset securities.

(3)Includes investments in equity funds that invest in the equity of various U.S.

and foreign private companies in a broad range of industries. These

investments cannot be redeemed; instead, distributions are received through

the liquidation of the underlying assets of the funds which are primarily

expected to be liquidated in approximately one to nine years.

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

•Distressed and special situations long/short credit strategies across

sectors and asset types;

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

outstanding between 90 to 120 days; and

•Distressed and event-driven opportunities across structured credit,

opportunistic credit, and private credit.

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

buying or building real estate businesses and investments in venture capital

funds.

14		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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

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

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

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

Analysis of Level 3 Assets and Liabilities for the Three Months

Ended February 28, 2026

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

fair value hierarchy are primarily attributed to:

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

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

receivables of $3.5 million due to reduced pricing

transparency.

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

primarily attributed to:

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

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

corporate equity securities of $3.3 million due to greater

pricing transparency.

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

the fair value hierarchy are primarily attributed to:

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

derivatives of $1.6 million due to reduced pricing and market

transparency.

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

the fair value hierarchy are primarily attributed to:

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

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

derivatives of $1.2 million due to greater pricing and market

transparency.

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

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

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

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

and corporate equity securities, partially offset by an increase in

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

primarily due to decreased market valuations of certain

structured notes within long-term debt and certain derivatives.

February2026 Form 10-Q		15

Notes to Consolidated Financial Statements

(Unaudited)

DownloadSimilarLinkTag

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

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

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

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

Analysis of Level 3 Assets and Liabilities for the Three Months

Ended February 28, 2025

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

fair value hierarchy are primarily attributed to:

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

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

due to reduced pricing transparency.

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

primarily attributed to:

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

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

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

transparency.

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

the fair value hierarchy are primarily attributed to:

•Net derivatives of $13.2 million and structured notes within

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

market transparency.

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

the fair value hierarchy are primarily attributed to:

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

loans of $14.5 million due to greater pricing and market

transparency.

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

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

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

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

corporate debt securities and loans and other receivables,

partially offset by an increase in corporate equity securities. Net

gains on Level 3 liabilities were primarily due to decreased

market valuations of certain structured notes within long-term

debt, certain derivatives and other secured financings.

16		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Significant Unobservable Inputs used in Level 3 Fair Value

Measurements

The tables below present information on the valuation

techniques, significant unobservable inputs and their ranges for

our financial assets and liabilities, subject to threshold levels

related to the market value of the positions held, measured at fair

value on a recurring basis with a significant Level 3 balance. The

range of unobservable inputs could differ significantly across

different firms given the range of products across different firms

in the financial services sector. The inputs are not representative

of the inputs that could have been used in the valuation of any

one financial instrument (i.e., the input used for valuing one

financial instrument within a particular class of financial

instruments may not be appropriate for valuing other financial

instruments within that given class). Additionally, the ranges of

inputs presented below should not be construed to represent

uncertainty regarding the fair values of our financial instruments;

rather, the range of inputs is reflective of the differences in the

underlying characteristics of the financial instruments in each

category.

For certain categories, we have provided a weighted average of

the inputs allocated based on the fair values of the financial

instruments comprising the category. We do not believe that the

range or weighted average of the inputs is indicative of the

reasonableness of uncertainty of our Level 3 fair values. The

range and weighted average are driven by the individual financial

instruments within each category and their relative distribution in

the population. The disclosed inputs when compared to the

inputs as disclosed in other periods should not be expected to

necessarily be indicative of changes in our estimates of

unobservable inputs for a particular financial instrument as the

population of financial instruments comprising the category will

vary from period to period based on purchases and sales of

financial instruments during the period as well as transfers into

and out of Level 3 each period.

February2026 Form 10-Q		17

Notes to Consolidated Financial Statements

(Unaudited)

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

18		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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

February2026 Form 10-Q		19

Notes to Consolidated Financial Statements

(Unaudited)

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

determined based on third-party pricing information, unadjusted

past transaction prices or a percentage of the reported enterprise

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

2026 and November 30, 2025, asset exclusions consisted of

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

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

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

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

million, respectively, primarily composed of loans, corporate

equity securities and corporate debt securities.

Uncertainty of Fair Value Measurement from Use of Significant

Unobservable Inputs

For recurring fair value measurements categorized within Level 3

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

measurement due to the use of significant unobservable inputs

and interrelationships between those unobservable inputs (if any)

are described below:

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

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

equity securities, certain derivatives, other secured financings

and structured notes using a market approach valuation

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

private equity securities, nonexchange-traded securities,

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

loans and other receivables, other secured financings and

structured notes would result in a significantly higher (lower)

fair value measurement. A significant increase (decrease) in

the revenue or revenue multiple related to private equity

securities would result in a significantly higher (lower) fair

value measurement. A significant increase (decrease) in the

discount rate/security yield related to private equity securities

would result in a significantly lower (higher) fair value

measurement. Depending on whether we are a receiver or

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

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

fair value measurement of options.

•Corporate debt securities, loans and other receivables, other

ABS and other secured financings using a scenario analysis

valuation technique. A significant increase (decrease) in the

possible recovery rates underlying the financial instrument

would result in a significantly higher (lower) fair value

measurement for the financial instrument.

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

ABS using a discounted cash flows valuation technique. A

significant increase (decrease) in isolation in the constant

default rate, loss severity or cumulative loss rate would result

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

impact of changes in the constant prepayment rate and

duration would have differing impacts depending on the capital

structure and type of security. A significant increase

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

significantly lower (higher) fair value measurement.

•Corporate equity securities and derivative equity options using

volatility benchmarking. A significant increase (decrease) in

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

measurement.

Fair Value Option Election

For a description of our financial assets and liabilities for which

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

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

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

Fair value option gains (losses):

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

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

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

risk are presented net of tax in our Consolidated Statements of

Comprehensive Income.

Difference between contractual principal and fair value (1):

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

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

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

is included in Interest revenues.

Fair value of loans and other receivables on nonaccrual status:

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

Financial Instruments Not Measured at Fair Value

Certain of our financial instruments are not carried at fair value

but are recorded at amounts that approximate fair value due to

their liquid or short-term nature and generally negligible credit

risk. These financial assets include Cash and cash equivalents

and Cash and securities segregated and on deposit for regulatory

purposes or deposited with clearing and depository organizations

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

hierarchy.

We have equity securities without readily determinable fair

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

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

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

impairments and downward adjustments on these investments

during the three months endedFebruary 28, 2026 and 2025.

20		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 6. Derivative Financial Instruments

Our derivative activities are recorded at fair value in our

Consolidated Statement of Financial Condition in Financial

instruments owned and Financial instruments sold, not yet

purchased, net of cash paid or received under credit support

agreements and on a net counterparty basis when a legally

enforceable right to offset exists under a master netting

agreement. We enter into derivative transactions to satisfy the

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

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

interest rate swaps that have been designated as fair value

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

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

foreign exchange contracts designated as hedges to offset the

change in the value of certain net investments in foreign

operations.

Derivatives are subject to various risks similar to other financial

instruments, including market, credit and operational risk. The

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

should be considered on an aggregate basis along with our other

trading-related activities. We manage the risks associated with

derivatives on an aggregate basis along with the risks associated

with proprietary trading as part of our firm wide risk management

policies.

In connection with our derivative activities, we may enter into

International Swaps and Derivatives Association, Inc. master

netting agreements or similar agreements with counterparties.

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

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

exchange. Cleared OTC derivatives include derivatives executed bilaterally and

subsequently novated to and cleared through central clearing counterparties.

Bilateral OTC derivatives include derivatives executed and settled bilaterally

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

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

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

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

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

paid or received.

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

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

offset beyond what has been offset in our Consolidated Statements of

Financial Condition.

February2026 Form 10-Q		21

Notes to Consolidated Financial Statements

(Unaudited)

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

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

exchange. Cleared OTC derivatives include derivatives executed bilaterally and

subsequently novated to and cleared through central clearing counterparties.

Bilateral OTC derivatives include derivatives executed and settled bilaterally

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

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

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

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

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

paid or received.

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

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

offset beyond what has been offset in our Consolidated Statements of

Financial Condition.

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

hedges:

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

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

ended February 28, 2026 and2025, respectively.

Gains (losses) on our net investment hedges recognized in

Currency translation and other adjustments, a component of

Other comprehensive income (loss), in our Consolidated

Statements of Comprehensive Income:

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

Unrealized and realized gains (losses) on derivative contracts

recognized primarily in Principal transactions revenues, which are

utilized in connection with our client activities and our economic

risk management activities:

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

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

are one of a number of activities comprising our business

activities and are before consideration of economic hedging

transactions, which generally offset the net gains (losses)

included above. We substantially mitigate our exposure to market

risk on our cash instruments through derivative contracts, which

generally provide offsetting revenues, and we manage the risk

associated with these contracts in the context of our overall risk

management framework.

22		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

OTC Derivatives

Remaining contract maturities at February 28, 2026:

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

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

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

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

which are not included in these tables.

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

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

pledged in our Consolidated Statements of Financial Condition. At

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

and $782.0 million, respectively.

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

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

for the same counterparty within product category across maturity categories.

OTC derivative assets at February 28, 2026:

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

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

department. Credit ratings determined by Risk Management use

methodologies that produce ratings generally consistent with those produced

by external rating agencies.

Credit Related Derivative Contracts

External credit ratings of the underlyings or referenced assets for

our written credit related derivative contracts:

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

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

Contingent Features

Certain derivative instruments contain provisions that require us

to either post additional collateral or immediately settle any

outstanding liability balances upon a specific event related to our

credit, primarily downgrades in our credit ratings. The following

table presents the aggregate fair value of all derivative

instruments with such credit-risk-related contingent features that

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

posted or received in the normal course of business and the

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

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

contingent features underlying these agreements were triggered:

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

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

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

counterparties elect to terminate the contract after a downgrade.

February2026 Form 10-Q		23

Notes to Consolidated Financial Statements

(Unaudited)

Note 7. Collateralized Transactions

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

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

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

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

We receive securities as collateral under resale agreements,

securities borrowing transactions, customer margin loans, and in

connection with securities-for-securities transactions in which we

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

margin on certain derivative transactions. In many instances, we

are permitted by contract to rehypothecate the securities

received as collateral. These securities may be used to secure

repurchase agreements, enter into securities lending

transactions, satisfy margin requirements on derivative

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

November 30, 2025, the approximate fair value of securities

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

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

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

securities received by us had been sold or repledged.

24		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Securities Financing Agreements

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

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

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

(repurchase transactions).

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

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

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

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

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

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

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

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

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

agreements to be legally enforceable.

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

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

agreements to be legally enforceable.

Note 8. Securitization Activities

We engage in securitization activities related to corporate loans,

mortgage loans, consumer loans and mortgage-backed and other

asset-backed securities. In our securitization transactions, we

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

as the placement or structuring agent for the beneficial interests

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

transactions are the securitization of assets issued or

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

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

consolidate the SPEs as we are not considered the primary

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

Entities for further discussion on VIEs and our determination of

the primary beneficiary.

We account for our securitization transactions as sales, provided

we have relinquished control over the transferred assets.

Transferred assets are carried at fair value with unrealized gains

and losses reflected in Principal transactions revenues prior to

the identification and isolation for securitization. Subsequently,

revenues recognized upon securitization are reflected as net

underwriting revenues. We generally receive cash proceeds in

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

however, have continuing involvement with the transferred

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

securitization (primarily senior and subordinated debt securities

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

securities or CLOs). These securities are included in Financial

instruments owned, at fair value and are generally initially

categorized as Level 2 within the fair value hierarchy.

February2026 Form 10-Q		25

Notes to Consolidated Financial Statements

(Unaudited)

Securitizations that were accounted for as sales in which we had

continuing involvement:

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

We have no explicit or implicit arrangements to provide additional

financial support to these SPEs, have no liabilities related to

these SPEs and do not have any outstanding derivative contracts

executed in connection with these securitization activities at

February 28, 2026 and November 30, 2025.

Our retained interests in SPEs where we transferred assets and

have continuing involvement and received sale accounting

treatment:

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

Total assets represent the unpaid principal amount of assets in

the SPEs in which we have continuing involvement and are

presented solely to provide information regarding the size of the

transactions and the size of the underlying assets supporting our

retained interests and are not considered representative of the

risk of potential loss. Assets retained in connection with a

securitization transaction represent the fair value of the

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

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

this fair value amount which is included in total Financial

instruments owned in our Consolidated Statements of Financial

Condition.

Although not obligated, in connection with secondary market-

making activities we may make a market in the securities issued

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

these securities from and sell these securities to investors.

Securities purchased through these market-making activities are

not considered to be continuing involvement in these SPEs. To

the extent we purchased securities through these market-making

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

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

mortgage-backed and asset-backed securitizations in the

nonconsolidated VIEs section presented in Note 9, Variable

Interest Entities.

If we have not relinquished control over the transferred assets,

the assets continue to be recognized in Financial instruments

owned and a corresponding liability is recognized in Other

secured financings. The related liabilities do not have recourse to

our general credit.

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

Note 9. Variable Interest Entities

VIEs are entities in which equity investors lack the characteristics

of a controlling financial interest. VIEs are consolidated by the

primary beneficiary. The primary beneficiary is the party who has

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

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

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

benefits from the entity that could potentially be significant to the

entity.

Our variable interests in VIEs include debt and equity interests,

commitments, guarantees and certain fees. Our involvement with

VIEs arises primarily from:

•Purchases of securities in connection with our trading and

secondary market making activities;

•Retained interests held as a result of securitization activities;

•Acting as placement agent and/or underwriter in connection

with client-sponsored securitizations;

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

other asset-backed securities;

•Warehouse funding arrangements for client-sponsored

consumer and mortgage loan vehicles and CLOs through

participation agreements, forward sale agreements, reverse

repurchase agreements, and revolving loan and note

commitments; and

•Loans to, investments in and fees from various investment

vehicles.

We determine whether we are the primary beneficiary of a VIE

upon our initial involvement with the VIE and we reassess

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

basis. Our determination of whether we are the primary

beneficiary of a VIE is based upon the facts and circumstances

for each VIE and requires judgment. Our considerations in

determining the VIE’s most significant activities and whether we

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

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

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

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

initial design and the existence of explicit or implicit financial

guarantees. In situations where we have determined that the

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

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

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

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

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

activities or we determine that decisions require consent of each

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

beneficiary.

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

aggregate to determine whether we have an obligation to absorb

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

potentially be significant to the VIE. The determination of whether

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

determining the significance of our variable interest, we consider

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

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

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

26		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Consolidated VIEs:

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

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

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

these assets and liabilities are eliminated in consolidation.

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

due under collateralized transactions on related consolidated entities, all of

which are eliminated in consolidation.

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

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

consolidation.

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

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

consolidation.

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

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

eliminated in consolidation.

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

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

eliminated in consolidation.

Secured Funding Vehicles. We sell agency and non-agency

residential and commercial mortgage loans, and asset-backed

securities to asset-backed financing vehicles pursuant to the

terms of a master repurchase agreement. Our variable interests

in these vehicles consist of our collateral margin maintenance

obligations under the master repurchase agreement, and retained

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

reverse repurchase agreements, which are available for the

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

securitize other financial instruments and own variable interests

in other securitization vehicles.

Other. We manage investment vehicles for external investors and

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

controlling financial interest in investment vehicles managed by

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

securities and broker receivables. Our variable interests in these

vehicles consist of equity securities, management and

performance fees and revenue share arrangements. The

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

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

debt.

We are the primary beneficiary of a real estate syndication entity

that develops multi-family residential property and manages the

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

and its liabilities primarily consist of accrued expenses and long-

term debt secured by the real estate property. Our variable

interest in the VIE primarily consists of our limited liability

company interest, a sponsor promote and development and

asset management fees for managing the project.

We are the primary beneficiary of special purpose vehicles that

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

backed transactions. Our variable interests in the VIEs primarily

consist of our ownership of certificates issued by the VIEs.

Nonconsolidated VIEs

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

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

Maximum Exposure to Loss

Maximum exposure to loss represents the total of the carrying

value of our on-balance sheet interests in the unconsolidated

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

arrangements with the unconsolidated VIEs. With respect to

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

arrangements typically represent the undrawn notional amount of

arrangements to finance the acquisition of assets during the

warehousing and pre-closing phase of the vehicles. The

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

of the assets in the VIEs become worthless and incorporates not

only potential losses associated with the carrying amounts of

assets recognized on the Consolidated Statements of Financial

Condition but also potential losses associated with unfunded

commitments and other contractual arrangements. The

maximum exposure to loss does not include the offsetting

benefit of any financial instruments that may be utilized to hedge

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

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

February2026 Form 10-Q		27

Notes to Consolidated Financial Statements

(Unaudited)

and does not consider any executed forward sale agreements

where we have committed to sell ownership interests in any of

the investment vehicles.

Collateralized Loan Obligations. Assets collateralizing the CLOs

include bank loans, participation interests, sub-investment grade

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

denominated corporate leveraged loans and bonds. We

underwrite securities issued in CLO transactions on behalf of

sponsors and provide advisory services to the sponsors. We may

also sell corporate loans to the CLOs. Our variable interests

where we have been involved in providing underwriting and/or

advisory services include:

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

price, corporate loans and ownership interests in a CLO;

•Warehouse funding arrangements in the form of:

◦Participation interests in corporate loans and commitments

to fund such participation interests;

◦Reverse repurchase agreements and commitments to fund

such reverse repurchase agreements;

◦Variable funding notes; and

◦Senior and subordinated notes issued in connection with

CLO warehousing activities.

•Trading positions in securities issued in CLO transactions.

Asset-Backed Vehicles. We provide financing and lending related

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

funding note agreements, revolving credit facilities, forward

purchase agreements and reverse repurchase agreements. We

also may transfer originated corporate loans to certain VIEs and

hold subordinated interests issued by the vehicle. The underlying

assets, which are collateralizing the vehicles, are primarily

composed of unsecured consumer loans, mortgage loans and

corporate loans. In addition, we may provide structuring and

advisory services and act as an underwriter or placement agent

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

activities of these entities.

Related Party Private Equity Vehicles. We have committed to

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

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

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

Additionally, we have committed to invest in the general partners

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

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

total, provide us with limited and general partner investment

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

by the JCP General Partners and a portion of the management

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

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

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

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

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

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

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

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

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

carrying value and unfunded equity commitment. The assets of

the vehicles primarily consist of private equity and equity related

investments.

Other Investment Vehicles. At February 28, 2026 and

November 30, 2025, our remaining equity commitment in various

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

respectively. The carrying value of our equity investments was

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

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

and unfunded equity commitment. These investment vehicles

have assets primarily consisting of private and public equity

investments, debt instruments, trade and insurance claims,

various oil and gas assets and energy tax credits.

Mortgage-Backed and Other Asset-Backed Secured Funding

Vehicles. In connection with our secondary trading and market-

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

mortgage-backed securities and other asset-backed securities,

which are issued by third-party securitization SPEs and are

generally considered variable interests in VIEs. Securities issued

by securitization SPEs are backed by residential mortgage loans,

U.S. agency collateralized mortgage obligations, commercial

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

as installment receivables, automobile loans and student loans.

These securities are accounted for at fair value and included in

Financial instruments owned. We have no other involvement with

the related SPEs and therefore do not consolidate these entities.

We also engage in underwriting, placement and structuring

activities for third-party-sponsored securitization trusts generally

through agency (Fannie Mae, Federal Home Loan Mortgage

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

sponsored SPEs and may purchase loans or mortgage-backed

securities from third-parties that are subsequently transferred

into the securitization trusts. The securitizations are backed by

residential and commercial mortgage, home equity and

automobile loans. We do not consolidate agency-sponsored

securitizations as we do not have the power to direct the

activities of the SPEs that most significantly impact their

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

agency-sponsored securitizations and therefore do not have

power to direct the most significant activities of the SPEs and

accordingly, do not consolidate these entities. We may retain

unsold senior and/or subordinated interests at the time of

securitization in the form of securities issued by the SPEs.

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

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

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

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

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

and underwriting, placement and structuring activities. Our

maximum exposure to loss on these securities is limited to the

carrying value of our investments in these securities. These

mortgage-backed and other asset-backed secured funding

vehicles discussed are not included in the above table containing

information about our variable interests in nonconsolidated VIEs.

Note 10. Investments

Investments for which we exercise significant influence over the

investee are accounted for under the equity method of

accounting with our shares of the investees’ earnings recognized

in Other revenues. Equity method investments, including any

loans to the investees, are reported within Investments in and

loans to related parties.

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

28		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

The following presents summarized financial information about

our significant equity method investees. For certain investees, we

receive financial information on a lag and the summarized

information provided for these investees is based on the latest

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

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

Jefferies Finance

Jefferies Finance, our 50/50 joint venture with Massachusetts

Mutual Life Insurance Company (“MassMutual”) structures,

underwrites and syndicates primarily senior secured loans to

corporate borrowers; and manages proprietary and third-party

investments in both broadly syndicated and direct lending loans.

In connection with its Leveraged Finance business, loans are

originated primarily through our investment banking efforts and

Jefferies Finance typically syndicates to third-party investors

substantially all of its arranged volume through us. The Asset

Management business is a multi-strategy private credit platform

that manages proprietary and third-party capital across

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

business development companies, CLOs and levered balance

sheet funds. Broadly syndicated loan investments are sourced

through transactions arranged by Jefferies Finance and third-

party arrangers and managed through its subsidiary, Apex Credit

Partners LLC. Direct lending investments are primarily sourced

through us. Jefferies Finance and its subsidiaries that are

involved in investment management are registered investment

advisers with the SEC.

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

commitments to Jefferies Finance of $750.0 million, for a

combined total commitment of $1.5 billion. The equity

commitment is reduced quarterly based on our share of any

undistributed earnings from Jefferies Finance and the

commitment is increased only to the extent the share of such

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

commitment to Jefferies Finance was $15.4 million. The

investment commitment is scheduled to expire on March 1, 2027

with automatic one year extensions absent a 60 day termination

notice by either party.

Jefferies Finance has executed a secured revolving credit facility

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

underwritings by Jefferies Finance, which bears interest based on

the interest rates of the related Jefferies Finance underwritten

loans and is secured by the underlying loans funded by the

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

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

equally between us and MassMutual. The facility is scheduled to

mature on March 1, 2027 with automatic one year extensions

absent a 60 day termination notice by either party. At

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

Activity related to the facility:

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

Selected financial information for Jefferies Finance:

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

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

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

Activity related to our other transactions with Jefferies Finance:

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

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

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

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

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

which are recognized as Business development expenses.

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

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

banking revenues.

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

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

fees.

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

Finance.

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

administrative services provided.

Additional balances with Jefferies Finance as reported in our

Consolidated Statements of Financial Condition.

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

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

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

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

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

(3)Includes OTC foreign currency derivatives.

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

derivatives.

February2026 Form 10-Q		29

Notes to Consolidated Financial Statements

(Unaudited)

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

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

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

any foreign currency exposure on these loans.

Berkadia

Berkadia is a commercial real estate finance and investment

sales joint venture that was formed by us and Berkshire

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

Berkadia. Berkadia originates commercial and multifamily real

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

investors with Berkadia retaining the servicing rights. Berkadia

also provides advisory services in connection with sales of

multifamily assets. Berkadia is a servicer of commercial real

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

servicing functions for U.S. government agency programs and

financial services companies.

Commercial paper issued by Berkadia is supported by a

$1.50 billion surety policy issued by a Berkshire Hathaway

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

corporate guaranty, and we have agreed to reimburse Berkshire

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

February 28, 2026, the aggregate amount of commercial paper

outstanding was $1.47 billion.

Selected financial information for Berkadia:

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

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

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

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

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

commitments to purchase $13.4 million and $13.6 million,

respectively, of agency CMBS from Berkadia.

Revenues from other transactions with Berkadia for the three

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

$0.1 million, respectively.

Real Estate Investments

Our real estate equity method investments primarily consist of

our equity interests in Brooklyn Renaissance Plaza and Hotel and

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

office building complex and parking garage located in Brooklyn,

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

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

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

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

significant influence on this investment. We are amortizing our

basis difference between the estimated fair value and the

underlying book value of Brooklyn Renaissance office building

and garage over the respective useful lives (weighted average life

of 39 years).

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

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

is in the process of being liquidated.

Selected financial information for the real estate investments:

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

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

JCP Fund V

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

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

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

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

process of being fully liquidated. The amount of our investments

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

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

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

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

managers. The following summarizes the results from these

investments which are included in Principal transactions

revenues:

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

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

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

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

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

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

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

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

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

equity interests:

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

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

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

periods presented.

Hildene

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

Equity Units of Hildene Insurance Holdings, LLC (“Hildene

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

March 1, 2025, we made an additional investment of

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

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

is accounted for under the equity method with a carrying amount

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

November 30, 2025, respectively.

30		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Selected financial information for Hildene Insurance:

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

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

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

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

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

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

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

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

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

the parent of Hildene Insurance. We will contribute our existing

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

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

contribute their ownership interests and approximately

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

expected in the third quarter of 2026, subject to customary

approvals.

ApiJect

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

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

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

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

within corporate equity securities in Financial instruments owned,

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

the total fair value of our total equity investment in common

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

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

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

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

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

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

accounted for at amortized cost and is reported within Other

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

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

classified as Level 3 in the fair value hierarchy.

In December 2025, we purchased two secured convertible

promissory notes totaling $9.8 million from ApiJect. These

promissory notes are accounted for at fair value in Financial

instruments owned and classified within Level 3 of the fair value

hierarchy.

Aircadia

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

owned subsidiary, purchased airplanes from one of our clients

and simultaneously entered into a lease with the seller to lease

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

accounted for as a sale leaseback and the airplanes were

recorded within Premises and equipment at $57.7 million. During

the third quarter of 2025, we sold the airplanes.

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

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

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

accounted for at amortized cost and included within Investments

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

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

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

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

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

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

are classified within Level 3 of the fair value hierarchy.

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

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

privately owned aircraft and guaranteed by the individual. We

recognized interest income of $0.5 million for both the three

months ended February 28, 2026 and 2025.

Note 11. Credit Losses on Financial Assets Measured at

Amortized Cost

Secured Financing Receivables. In evaluating secured financing

receivables (reverse repurchases agreements, securities

borrowing arrangements, and margin loans), the underlying

collateral maintenance provisions are taken into consideration.

The underlying contractual collateral maintenance for

significantly all of our secured financing receivables requires that

the counterparty continually adjust the collateralization amount,

securing the credit exposure on these contracts. Collateralization

levels for our secured financing receivables are initially

established based upon the counterparty, the type of acceptable

collateral that is monitored daily and adjusted to mitigate the

potential of any credit losses. Credit losses are not recognized

for secured financing receivables where the underlying

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

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

equal or exceed the amortized cost basis, the allowance for

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

value of the collateral at the reporting date and the amortized

cost basis of the financial assets.

Broker Receivables. Our receivables from brokers, dealers, and

clearing organizations include deposits of cash with exchange

clearing organizations to meet margin requirements, amounts

due from clearing organizations for daily variation settlements,

securities failed-to-deliver or receive and receivables and

payables for fees and commissions. These receivables generally

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

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

due to the credit protection framework inherent in the design and

operations of brokers, dealers and clearing organizations. As

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

these receivables.

Investment Banking Fee Receivables. Our allowance for credit

losses on our investment banking fee receivables uses a

provisioning matrix based on the shared risk characteristics and

historical loss experience for such receivables. In some

instances, we may adjust the allowance calculated based on the

provision matrix to incorporate a specific allowance based on the

unique credit risk profile of a receivable. The provisioning matrix

is periodically updated to reflect changes in the underlying

portfolio’s credit characteristics and most recent historical loss

data.

February2026 Form 10-Q		31

Notes to Consolidated Financial Statements

(Unaudited)

Allowance for credit losses for investment banking receivables:

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

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

acquisitions and restructuring fee receivables, which include recoverable

expense receivables.

Other Financial Assets. For all other financial assets measured at

amortized cost, we estimate expected credit losses over the

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

information about past events, current conditions, and

reasonable and supportable forecasts.

Note 12. Goodwill and Intangible Assets

Goodwill

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

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

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

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

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

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

Carrying values of goodwill by reporting unit:

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

Intangible Assets

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

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

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

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

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

Liabilities Held for Sale.

Amortization Expense

For finite life intangible assets, we recognized aggregate

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

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

These expenses are included in Depreciation and amortization.

Estimated future amortization expense for the next five fiscal

years:

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

Note 13. Revenues from Contracts with Customers

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

32		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Disaggregation of Revenue

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

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

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

fixed income businesses primarily represent commissions and other fee

revenue.

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

the allocation of revenues to geographic regions.

Information on Remaining Performance Obligations and Revenue

Recognized from Past Performance

We do not disclose information about remaining performance

obligations pertaining to contracts that have an original expected

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

remaining unsatisfied or partially unsatisfied performance

obligations with an original expected duration exceeding one year

was not material at February 28, 2026. Investment banking

advisory fees that are contingent upon completion of a specific

milestone and fees associated with certain distribution services

are also excluded as the fees are considered variable and not

included in the transaction price.

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

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

revenue related to performance obligations satisfied (or partially

satisfied) in previous periods, mainly due to resolving

uncertainties in variable consideration that was constrained in

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

million of revenues primarily associated with distribution services

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

respectively, a portion of which relates to prior periods.

Contract Balances

The timing of our revenue recognition may differ from the timing

of payment by our customers. We record a receivable when

revenue is recognized prior to payment and we have an

unconditional right to payment. Alternatively, when payment

precedes the provision of the related services, we record deferred

revenue until the performance obligations are satisfied.

Our deferred revenue primarily relates to retainer and milestone

fees received in investment banking advisory engagements

where the performance obligation has not yet been satisfied.

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

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

recorded in Accrued expenses and other liabilities. During the

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

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

were recorded as deferred revenue at the beginning of the

periods.

We had receivables related to revenues from contracts with

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

2026 and November 30, 2025, respectively.

Contract Costs

We capitalize costs to fulfill contracts associated with

investment banking advisory engagements where the revenue is

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

recoverable. Capitalized costs to fulfill a contract are recognized

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

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

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

respectively, which are recorded in Receivables – Fees, interest

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

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

respectively, related to costs to fulfill a contract that were

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

significant impairment charges recognized in relation to these

capitalized costs for the three months ended February 28, 2026

and 2025.

Note 14. Compensation Plans

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

Senior Executive Compensation Plan and other compensation

plans refer to Note 15. Compensation Plans in our consolidated

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

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

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

of restricted stock outstanding with future service required,

6.4 million RSUs outstanding with future service required

(including target RSUs that may be issued under the senior

executive compensation plan), 10.3 million RSUs outstanding

with no future service required, and 5.1 million stock options

outstanding. The maximum potential increase to common shares

outstanding resulting from these outstanding awards is

21.8 million at February 28, 2026.

February2026 Form 10-Q		33

Notes to Consolidated Financial Statements

(Unaudited)

In December 2025, the Compensation Committee of our Board of

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

each of our senior executives as follows:

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

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

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

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

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

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

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

profit sharing plan and other forms of restricted cash awards.

Restricted cash awards are subject to ratable vesting terms with

service requirements. These awards are amortized as

compensation expense over the relevant service period, which is

generally considered to start at the beginning of the annual

compensation year.

Components of total compensation cost associated with certain

of our compensation plans:

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

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

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

forfeitures and clawbacks.

Remaining unamortized amounts related to certain

compensation plans at February 28, 2026:

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

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

Note 15. Borrowings

Short-Term Borrowings

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

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

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

short-term nature.

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

average interest rate on bank loans outstanding is 4.94% and

4.92% per annum, respectively.

Our borrowings include credit facilities that contain certain

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

specified level of tangible net worth, require a minimum

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

Jefferies LLC, and impose certain restrictions on the future

indebtedness of certain of our subsidiaries that are borrowers.

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

or other adjusted rates, as defined in the various credit

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

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

were in compliance with all covenants under these credit

facilities.

34		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Long-Term Debt

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

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

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

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

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

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

as fair value hedges.

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

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

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

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

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

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

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

(4)Interest rates exclude structured notes.

February2026 Form 10-Q		35

Notes to Consolidated Financial Statements

(Unaudited)

For the three months endedFebruary 28, 2026, long-term debt

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

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

unsecured senior notes and $74.8 million from currency gains on

foreign currency borrowings. These increases were partially

offset by repayments of $188.2 million on our unsecured senior

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

reclassification of $51.9 million of Tessellis’ borrowings to Held

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

further information), and $42.3 million from decreased

subsidiaries’ borrowings.

Note 16. Total Equity

Common Stock

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

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

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

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

common shares outstanding, respectively.

During the three months endedFebruary 28, 2026, we

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

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

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

market under our share repurchase program, and 0.5 million of

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

share tax withholding under our equity compensation plan. In

March 2026, the Board of Directors has authorized the

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

repurchase program.

Preferred Shares

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

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

55,125 shares issued and outstanding.

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

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

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

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

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

voting common stock upon dissolution, liquidation or winding up

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

Stock is automatically convertible into 500 shares of non-voting

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

years after issuance. The Series B Preferred Stock participates in

cash dividends and distributions alongside our voting common

stock on an as-converted basis.

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

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

which entitles SMBC to exchange shares of our voting common

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

shares of voting common stock for one share of Series B

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

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

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

SMBC had exchanged approximately 27.6 million shares of

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

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

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

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

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

with the President and Executive Officer of SMBC taking over the

position following his election at the Annual Shareholder Meeting

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

Transactions for further information regarding transactions with

SMBC.

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

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

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

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

Preferred Stock has a liquidation preference of $500 per share

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

Series B Preferred Stock upon dissolution, liquidation or winding

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

Preferred Stock is automatically convertible into 500 shares of

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

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

Series B-1 Preferred Stock also participates in cash dividends

and distributions alongside our voting common stock on an as-

converted basis.

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

and restated Exchange Agreement (the “Amended and Restated

Exchange Agreement”) with SMBC, which entitles SMBC to

exchange shares of our voting common stock for shares of the

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

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

Amended and Restated Exchange Agreement is limited to 17,500

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

Restated Exchange Agreement, SMBC is permitted to increase its

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

converted and fully diluted basis, while continuing to own less

than 5% of a voting interest in the Company.

36		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Earnings Per Common Share

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

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

follows:

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

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

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

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

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

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

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

February2026 Form 10-Q		37

Notes to Consolidated Financial Statements

(Unaudited)

Dividends

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

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

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

shareholders of record at May 18, 2026.

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

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

Preferred stock.

The payment of dividends is subject to the discretion of our

Board of Directors and depends upon general business

conditions and other factors that our Board of Directors may

deem to be relevant.

Accumulated Other Comprehensive Income (Loss)

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

Amounts reclassified out of accumulated other comprehensive

income (loss) to net earnings:

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

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

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

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

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

benefits expenses.

Note 17. Income Taxes

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

unrecognized tax benefits were $240.0 million and

$241.6 million, respectively.

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

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

included in Accrued expenses and other liabilities.

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

would favorably affect the effective tax rate was $189.5 million

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

and November 30, 2025, respectively.

We recognize interest and penalties, if any, related to

unrecognized tax benefits in income tax expense.

We are currently under examination by a number of taxing

jurisdictions. Though we do not expect that resolution of these

examinations will have a material effect on our consolidated

financial position, they may have a material impact on our

consolidated results of operations for the period in which

resolution occurs.

Earliest tax years that remain subject to examination in the major

tax jurisdictions in which we operate:

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

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

Note 18. Commitments, Contingencies and Guarantees

Commitments

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

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

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

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

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

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

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

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

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

agreements to repurchase settled within three business days.

Equity Commitments. Includes commitments to invest in our joint

venture, Jefferies Finance, asset management funds and in

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

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

February 28, 2026, our outstanding commitments relating to

Jefferies Capital Partners, LLC and its private equity funds were

$9.7 million.

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

equity commitments to invest up to $192.9 million with strategic

affiliates and $35.7 million to various other investments.

38		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Loan Commitments. From time to time, we make commitments

to extend credit to clients and to strategic affiliates. These

commitments and any related drawdowns of these facilities

typically have fixed maturity dates and are contingent on certain

representations, warranties and contractual conditions applicable

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

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

strategic affiliates.

Loan commitments outstanding at February 28, 2026 also

include our portion of the outstanding secured revolving credit

facility provided to Jefferies Finance, to support loan

underwritings by Jefferies Finance.

Underwriting Commitments. In connection with investment

banking activities, we may from time to time provide underwriting

commitments to our clients in connection with capital raising

transactions.

Forward Starting Reverse Repos and Repos. We enter into

commitments to take possession of securities with agreements

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

agreements to repurchase on a forward starting basis that are

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

Other Unfunded Commitments. Other unfunded commitments

include obligations in the form of revolving notes, warehouse

financings and debt securities to provide financing to asset-

backed and CLO vehicles. Upon advancing funds, drawn amounts

are collateralized by the assets of an entity. Other unfunded

commitments also include written put options to certain

bondholders of an equity method investee.

Guarantees

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

variety of derivative instruments. Certain derivative contracts that

we have entered into meet the accounting definition of a

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

written foreign currency options and written equity put options.

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

and foreign currency options, the maximum payout cannot be

quantified since the increase in interest or foreign exchange rates

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

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

maximum potential payout under these contracts.

Notional amounts associated with our derivative contracts

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

February 28, 2026:

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

The derivative contracts deemed to meet the definition of a

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

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

of any risk exposure. Written equity options and written credit

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

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

substantially mitigate our exposure to market risk on these

contracts through hedges, such as other derivative contracts

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

with these contracts in the context of our overall risk

management framework. We believe notional amounts overstate

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

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

the fair value of derivative contracts meeting the definition of a

guarantee, gross of any counterparty and cash collateral netting,

is a liability of approximately $635.0 million.

HomeFed. For real estate development projects, we are generally

required to obtain infrastructure improvement bonds at the

beginning of construction work and warranty bonds upon

completion of such improvements. These bonds are issued by

surety companies to guarantee a municipality satisfactory

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

municipality accepts the improvements, the bonds are released.

At February 28, 2026, the aggregate amount of infrastructure

improvement bonds outstanding was $74.4 million.

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

guarantees to certain counterparties in the form of standby

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

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

commit us to make payment to the beneficiary if the guaranteed

party fails to fulfill its obligation under a contractual arrangement

with that beneficiary. Since commitments associated with these

collateral instruments may expire unused, the amount shown

does not necessarily reflect the actual future cash funding

requirement.

Other Guarantees. We are members of various exchanges and

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

guarantees to securities clearing houses and exchanges. These

guarantees generally are required under the standard

membership agreements, such that members are required to

guarantee the performance of other members. Additionally, if a

member becomes unable to satisfy its obligations to the clearing

house, other members would be required to meet these

shortfalls. To mitigate these performance risks, the exchanges

and clearing houses often require members to post collateral.

Our obligations under such guarantees could exceed the

collateral amounts posted. Our maximum potential liability under

these arrangements cannot be quantified; however, the potential

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

deemed remote. Accordingly, no liability has been recognized for

these arrangements. Additionally, we provide certain

indemnifications in connection with third-party clearing and

execution arrangements whereby a third-party may clear and

settle transactions on behalf of our clients. These

indemnifications generally have standard contractual terms and

are entered into in the ordinary course of business. Our

obligations in respect of such transactions are secured by the

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

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

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

material payments under these arrangements and no material

liabilities related to these indemnifications have been recognized.

Note 19. Regulatory Requirements

Net Capital

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

member firm of the Financial Industry Regulatory Authority

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

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

capital, and has elected to calculate minimum capital

requirements using the alternative method permitted by Rule

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

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

February2026 Form 10-Q		39

Notes to Consolidated Financial Statements

(Unaudited)

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

Futures Trading Commission (“CFTC”) under the Commodity

Exchange Act, which sets forth minimum financial requirements.

The minimum net capital requirement in determining excess net

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

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

1.17. FINRA is the designated examining authority for Jefferies

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

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

LLC as an FCM.

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

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

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

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

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

the CFTC’s regulatory capital requirements pursuant to the

minimum financial requirements for swap dealers. Additionally,

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

requirements of the NFA. The SEC is the designated examining

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

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

dealer.

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

requirements as prescribed by the regulatory authorities in their

respective jurisdictions. This includes Jefferies International

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

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

Jefferies GmbH, which is subject to the regulatory supervision of

the German Federal Financial Supervisory Authority.

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

follows:

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

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

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

are in compliance with their applicable requirements.

The regulatory capital requirements referred to above may

restrict our ability to withdraw capital from our regulated

subsidiaries.

Customer Protection and Segregation Requirement

As a registered broker dealer that clears and carries customer

accounts, Jefferies LLC is subject to the customer protection

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

reserve formula requirement for customer accounts and deposit

cash or qualified securities into a special reserve bank account

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

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

Government securities on deposit in special reserve bank

accounts for the exclusive benefit of customers.

As a registered broker dealer that clears and carries proprietary

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

Jefferies LLC is also required to compute a reserve requirement

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

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

Government securities in special reserve bank accounts for the

exclusive benefit of PABs.

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

and PAB requirements are included in Cash and securities

segregated and Securities purchased under agreements to resell.

JFSI is exempt from the CFTC and SEC segregation rules.

Note 20. Segment Reporting

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

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

Investment Banking and Capital Markets reportable business

segment includes our capital markets activities and investment

banking business, which is composed of financial advisory and

underwriting activities. The Investment Banking and Capital

Markets reportable business segment provides the sales, trading,

origination and advisory effort for various fixed income, equity

and advisory products and services. The Asset Management

reportable business segment provides investment management

services to investors globally and invests capital in hedge funds,

separately managed accounts and third-party asset managers.

Our reportable business segment information is prepared using

the following methodologies:

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

investments directly associated with each reportable business

segment are included in determining earnings (losses) from

continuing operations before income taxes.

•Net revenues and expenses not directly associated with

specific reportable business segments are allocated based on

the most relevant measures applicable, including each

reportable business segment’s net revenues, headcount and

other factors.

•Reportable business segment assets include an allocation of

indirect corporate assets that have been fully allocated to our

reportable business segments, generally based on each

reportable business segment’s capital utilization.

Net revenues presented for our Investment Banking and Capital

Markets reportable segment include allocations of interest

income and interest expense as we assess the profitability of

these businesses inclusive of the net interest revenue or expense

associated with the respective activities, including the net

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

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

the related funding costs.

40		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Our Chief Executive Officer and President serve collectively as

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

CODM evaluates the performance of each business segment and

allocates resources based on a variety of strategic and financial

considerations. These considerations include measures of

segment results and profitability, including net revenues and

earnings before income taxes, which are calculated in

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

in our Consolidated Statements of Earnings. The CODM regularly

reviews results and profitability measures to monitor budget

versus actual results. Furthermore, the ongoing monitoring of

budget versus actual results is used to assess the performance

of each reportable business segment and significantly influences

decisions about allocating resources.

Summary of our results by reportable business segment:

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	Three Months Ended February 28,
$ in millions	2026	2025
Investment Banking and Capital Markets:
Revenues
Non-interest revenues............................................................	$1,801.4	$1,403.7
Interest income.......................................................................	770.1	802.6
Total revenues (1)..................................................................	2,571.5	2,206.3
Interest expense.....................................................................	775.5	807.3
Net revenues (1).....................................................................	1,796.0	1,399.0
Non-interest expenses
Compensation and benefits..................................................	1,021.3	769.1
Brokerage and clearing fees.................................................	121.8	100.2
Technology and communications.......................................	142.5	127.6
Business development..........................................................	70.3	58.7
Other segment items (3) (4).................................................	189.1	176.4
Total non-interest expenses................................................	1,545.0	1,232.0
Earnings before income taxes..............................................	$251.0	$167.0
Asset Management:
Revenues
Non-interest revenues............................................................	$255.9	$221.7
Interest income.......................................................................	43.0	42.5
Total revenues (2)..................................................................	298.9	264.2
Interest expense.....................................................................	78.6	72.5
Net revenues (2).....................................................................	220.3	191.7
Non-interest expenses
Compensation and benefits..................................................	64.6	72.0
Brokerage and clearing fees.................................................	11.3	9.2
Technology and communications.......................................	17.3	11.9
Business development..........................................................	5.2	13.6
Cost of sales...........................................................................	29.9	41.6
Other segment items (3) (5).................................................	131.6	61.6
Total non-interest expenses................................................	259.9	209.9
Losses before income taxes (6) (7)....................................	$(39.6)	$(18.2)
Total of Reportable Business Segments:
Revenues
Non-interest revenues............................................................	$2,057.3	$1,625.4
Interest income.......................................................................	813.1	845.1
Total revenues........................................................................	2,870.4	2,470.5
Interest expense.....................................................................	854.1	879.8
Net revenues...........................................................................	2,016.3	1,590.7
Non-interest expenses
Compensation and benefits..................................................	1,085.9	841.1
Brokerage and clearing fees.................................................	133.1	109.4
Technology and communications.......................................	159.8	139.5
Business development..........................................................	75.5	72.3
Cost of sales...........................................................................	29.9	41.6
Other segment items (3).......................................................	320.7	238.0
Total non-interest expenses................................................	1,804.9	1,441.9
Earnings before income taxes.............................................	$211.4	$148.8

(1)Includes total net earnings related to equity method investees of $20.3 million

and $4.7 million, respectively.

(2)Includes total net earnings (losses) related to equity method investees of $4.2

million and $2.4 million, respectively.

(3)Primarily consists of underwriting costs, occupancy and equipment rental,

professional services, and depreciation and amortization.

(4)Includes depreciation and amortization of $33.5 million and $9.9 million,

respectively.

(5)Includes depreciation and amortization of $23.4 million and $21.1 million,

respectively.

(6)Consists of earnings before income taxes of $80.0 million and $13.3 million,

respectively, related to asset management fees and investment return and

consists of losses before income taxes of $119.6 million and $31.5 million,

respectively, related to Other investments.

(7)Includes losses before income taxes related to non-controlling interests of

$15.8 million and $7.0 million, respectively.

February2026 Form 10-Q		41

Notes to Consolidated Financial Statements

(Unaudited)

Reconciliation of Reportable Segment Information:

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	Three Months Ended February 28,
$ in millions	2026	2025
Total revenues for reportable segments.................	$2,016.3	$1,590.7
Other revenues not allocated to segments...............	0.8	2.3
Total consolidated net revenues...............................	$2,017.1	$1,593.0
Total earnings for reportable segments..................	$211.4	$148.8
Earnings not allocated to segments..........................	0.8	2.3
Total consolidated earnings.......................................	$212.2	$151.1

Assets by reportable business segment:

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$ in millions	February 28, 2026	November 30, 2025
Investment Banking and Capital Markets.................	$68,934.9	$70,335.5
Asset Management......................................................	5,445.6	5,676.8
Total assets..................................................................	$74,380.5	$76,012.3

Net Revenues by Geographic Region

Net revenues for the Investment Banking and Capital Markets

reportable business segment are recorded in the geographic

region in which the position was risk-managed or, in the case of

investment banking, in which the senior coverage banker is

located. For the Asset Management reportable business

segment, net revenues are allocated according to the location of

the investment advisor or the location of the invested capital.

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	Three Months Ended February 28,
$ in millions	2026	2025
Americas (1).................................................................	$1,405.8	$1,084.3
Europe and the Middle East (2)..................................	436.3	370.6
Asia-Pacific...................................................................	175.0	138.1
Net revenues................................................................	$2,017.1	$1,593.0

(1)Primarily relates to U.S. results.

(2)Primarily relates to U.K. results.

Note 21. Related Party Transactions

Officers, Directors and Employees

The following sets forth information regarding related party

transactions with our officers, directors and employees:

•At February 28, 2026 and November 30, 2025, we had $16.7

million and $19.2 million, respectively, of loans, net of

allowance, outstanding to certain of our officers and

employees (none of whom are executive officers or directors)

that are included in Other assets.

•Receivables from and payables to customers include balances

arising from officers’, directors’ and employees’ individual

security transactions. These transactions are subject to the

same regulations as all customer transactions and are

provided on substantially the same terms.

•Two of our directors and certain of our officers have total

investments in entities managed by us of approximately

$10.5 million and $10.4 million at February 28, 2026 and

November 30, 2025, respectively.

SMBC

We have a strategic alliance with Sumitomo Mitsui Financial

Group, Inc., Sumitomo Mitsui Banking Corporation (“SMBC”) and

SMBC Nikko Securities Inc. (together referred to as “SMBC

Group”) to collaborate on corporate and investment banking

business opportunities as well as opportunities related to equity

sales, trading and research.

The following tables summarize balances with SMBC as reported

in our Consolidated Statements of Financial Condition and

Consolidated Statements of Earnings. In addition, the synergies

and value creation resulting from our strategic alliance with

SMBC generate additive benefits for us, which are not necessarily

reflected by the activity presented in the following tables.

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$ in thousands	February 28, 2026	November 30, 2025
Assets
Cash and cash equivalents.........................................	$398,415	$444,506
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations................	27,444	27,975
Financial instruments owned, at fair value...............	6,312	395
Securities borrowed.....................................................	7,466	3,872
Securities purchased under agreements to resell...	263,644	357,261
Receivables:
Brokers, dealers and clearing organizations........	4,240	7,752
Customers.................................................................	—	206
Fees, interest and other...........................................	6,514	5,438
Other assets..................................................................	9,267	6,203
Total assets..................................................................	$723,302	$853,608
Liabilities
Financial instruments sold, not yet purchased, at fair value...................................................................	$2,814	$6,763
Securities loaned..........................................................	89,662	620
Securities sold under agreements to repurchase...	562,528	638,581
Payables:
Brokers, dealers and clearing organizations .......	3,403	470
Accrued expenses and other liabilities.....................	10,496	9,537
Long-term debt (1).......................................................	—	—
Total liabilities..............................................................	$668,903	$655,971

(1)We have credit facilities with SMBC totaling $1.15 billion with interest rates

based on various benchmark rates and associated spreads.

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	Three Months Ended February 28,
$ in thousands	2026	2025
Revenues
Investment banking...............................................................	$3,329	$3,849
Principal transactions (1).....................................................	326	(4,192)
Commissions and other fees...............................................	523	649
Interest....................................................................................	4,525	7,617
Total revenues.......................................................................	8,703	7,923
Interest expense....................................................................	6,948	10,871
Net revenues..........................................................................	$1,755	$(2,948)
Non-interest expenses
Compensation and benefits	$1,243	$—
Technology and communications.......................................	1,024	—
Business development.........................................................	9,575	4,688
Other expenses......................................................................	1,090	4
Total non-interest expenses...............................................	$12,932	$4,692

(1)Primarily represents net gains (losses) on interest rate derivatives executed

with SMBC.

42		Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Other Related Party Transactions

We have other related party transactions with equity method

investees. Refer to Note 10, Investments for further information.

February2026 Form 10-Q		43

Item 2. Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Forward-Looking Statements

This report may contain or incorporate by reference certain

“forward-looking statements” within the meaning of Section 27A

of the Securities Act of 1933, Section 21E of the Securities

Exchange Act of 1934 and/or the Private Securities Litigation

Reform Act of 1995. Forward-looking statements include

statements about our future and statements that are not

historical or current facts. These forward-looking statements are

often preceded by the words “should,” “expect,” “believe,”

“intend,” “may,” “will,” “would,” “could” or similar expressions.

Forward-looking statements may contain expectations regarding

revenues, earnings, operations and other results, and may include

statements of future performance, plans and objectives. Forward-

looking statements also include statements pertaining to our

strategies for future development of our business and products.

Forward-looking statements represent only our belief regarding

future events, many of which by their nature are inherently

uncertain. It is possible that the actual results may differ, possibly

materially, from the anticipated results indicated in these

forward-looking statements. Information regarding important

factors that could cause actual results to differ, perhaps

materially, from those in our forward-looking statements is

contained in this report and other documents we file. You should

read and interpret any forward-looking statement together with

these documents, including the following:

•the description of our business and risk factors contained in

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

November 30, 2025 and filed with the Securities and Exchange

Commission (“SEC”) on January 28, 2026;

•the discussion of our analysis of financial condition and results

of operations contained in this report under the caption

“Management’s Discussion and Analysis of Financial Condition

and Results of Operations” herein;

•the discussion of our risk management policies, procedures

and methodologies contained in this report under the caption

“Management’s Discussion and Analysis of Financial Condition

and Results of Operations – Risk Management” herein;

•the consolidated financial statements and notes to the

consolidated financial statements contained in this report; and

•cautionary statements we make in our public documents,

reports and announcements.

Any forward looking statement speaks only as of the date on

which that statement is made. We undertake no obligation to

update any forward looking statement to reflect events or

circumstances that occur after the date on which the statement

is made, except as required by applicable law.

Our business, by its nature, does not produce predictable or

necessarily recurring earnings. Our results in any given period

can be materially affected by conditions in global financial

markets, economic conditions generally and our own activities

and positions.

Consolidated Results of Operations

Overview

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	Three Months Ended February 28,
$ in thousands	2026	2025	% Change
Net revenues....................................................	$2,017,130	$1,593,019	26.6%
Non-interest expenses....................................	1,804,914	1,441,954	25.2%
Earnings from continuing operations before income taxes........................................	212,216	151,065	40.5%
Income tax expense from continuing operations..........................................................	52,870	14,216	271.9%
Net earnings from continuing operations.....	159,346	136,849	16.4%
Net losses attributable to noncontrolling interests.............................................................	(15,858)	(6,983)	127.1%
Preferred stock dividends...............................	19,504	16,039	21.6%
Net earnings attributable to common shareholders.....................................................	155,700	127,793	21.8%
Effective tax rate from continuing operations........................................................	24.9%	9.4%

Executive Summary

Three Months Ended February 28, 2026 Versus February 28, 2025

Net earnings attributable to common shareholders were

$155.7 million and $127.8 million for the three months ended

February 28, 2026 and 2025, respectively.

Our effective tax rate was 24.9%, and 9.4% for the three months

ended February 28, 2026 and 2025, respectively.

The remainder of our “Consolidated Results of Operations” is

presented on a detailed product and expense basis. Our

“Revenues by Source” is reported along the following business

lines: Investment Banking, Equities, Fixed Income and Asset

Management.

At February 28, 2026, we had 7,596 employees globally across all

of our consolidated subsidiaries within our Investment Banking

and Capital Markets and Asset Management reportable

segments, compared to 7,787 at November 30, 2025. Included

within our global headcount are 1,578 employees at February 28,

2026 and 1,797 employees at November 30, 2025 of our Stratos,

Tessellis, HomeFed and M Science subsidiaries.

Revenues by Source

We present our results as two reportable business segments:

Investment Banking and Capital Markets and Asset Management.

Additionally, corporate activities are fully allocated to each of

these reportable business segments.

Net revenues presented for our Investment Banking and Capital

Markets reportable segment include allocations of interest

income and interest expense as we assess the profitability of

these businesses inclusive of these costs, including the net

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

function of the mix of each business’s associated assets and

liabilities and the related funding costs.

Debt valuation adjustments on derivative contracts, gains and

losses on investments held in deferred compensation plans,

foreign currency transaction gains or losses or certain other

corporate income items are not considered by management in

assessing the financial performance of our operating businesses

and are, therefore, not reported as part of our business segment

results.

44		Jefferies Financial Group Inc.

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	Three Months Ended February 28,
	2026		2025
$ in thousands	Amount	% of Net Revenues	Amount	% of Net Revenues	% Change
Advisory..................................	$527,128	26.2%	$397,780	25.0%	32.5%
Equity underwriting...............	305,969	15.2	128,520	8.1	138.1
Debt underwriting..................	181,858	9.0	199,362	12.5	(8.8)
Other investment banking....	2,338	0.1	(24,970)	(1.6)	N/M
Total Investment Banking...	1,017,293	50.5	700,692	44.0	45.2
Equities...................................	558,488	27.7	409,058	25.7	36.5
Fixed income.........................	220,268	10.9	289,226	18.2	(23.8)
Total Capital Markets..........	778,756	38.6	698,284	43.9	11.5
Total Investment Banking and Capital Markets (1).	1,796,049	89.1	1,398,976	87.9	28.4
Asset management fees and revenues...................	69,910	3.5	88,630	5.6	(21.1)
Investment return..................	88,992	4.4	(5,634)	(0.4)	N/M
Allocated net interest (2).....	(22,238)	(1.1)	(17,221)	(1.1)	29.1
Other investments, inclusive of net interest..	83,598	4.1	125,940	7.9	(33.6)
Total Asset Management....	220,262	10.9	191,715	12.0	14.9
Other.......................................	819	—	2,328	0.1	(64.8)
Net revenues.........................	$2,017,130	100.0%	$1,593,019	100.0%	26.6%

N/M — Not Meaningful

(1)Allocated net interest is not separately disaggregated for Investment Banking

and Capital Markets. This presentation is aligned to our Investment Banking

and Capital Markets internal performance measurement.

(2)Allocated net interest represents an allocation to Asset Management of our

long-term debt interest expense, net of interest income on our Cash and cash

equivalents and other sources of liquidity. Allocated net interest has been

disaggregated to increase transparency and to make clearer actual

Investment return. We believe that aggregating Investment return and

Allocated net interest would obscure the Investment return by including an

amount that is unique to our credit spreads, debt maturity profile, capital

structure, liquidity risks and allocation methods.

Investment Banking Revenues

Investment banking is composed of revenues from:

•advisory services with respect to mergers and acquisitions,

debt financing, restructurings and private capital transactions;

•underwriting services, which include debt underwriting and

placement services related to investment grade debt, high yield

bonds, leveraged loans, emerging market debt, global

structured notes, municipal debt and mortgage-backed and

asset-backed securities; equity underwriting and placement

services related to equity offerings, preferred stock and equity-

linked securities; and loan syndication;

•our 50% share of net earnings from our Jefferies Finance joint

venture;

•our 45% share of net earnings from our commercial real estate

joint venture, Berkadia, which includes commercial mortgage

origination and servicing as well as investment sales;

•securities and loans received or acquired in connection with

our investment banking activities; and

•certain revenue-sharing agreements with SMBC primarily

associated with investment banking transactions.

Deals Completed
	Three Months Ended
	February 28, 2026	February 28, 2025
Advisory transactions ..................................................	99	92
Public and private equity and convertible offerings.	56	35
Public and private debt financings.............................	257	213

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Aggregate Value
	Three Months Ended
$ in billions	February 28, 2026	February 28, 2025
Advisory transactions ..................................................	$87.5	$111.8
Public and private equity and convertible offerings.	37.1	22.4
Public and private debt financings.............................	143.9	147.2

Three Months Ended February 28, 2026 Versus February 28, 2025

Investment banking net revenues were $1.02 billion, up45.2%

compared to $700.7 million for the prior year quarter.

Advisory net revenues of $527.1 million were up32.5% compared

to $397.8 million for the prior year quarter, partially driven by

increased deal volumes across several sectors.

Total underwriting net revenues were $487.8 million, up48.8%

from $327.9 million for the prior year quarter, primarily driven by

market share gains and increased activity in Equity underwriting

across a range of sectors. Debt underwriting remained solid but

decreased compared to the prior year quarter.

Other investment banking net revenues were $2.3 million,

compared to net revenues of $(25.0) million for the prior year

quarter and include mark-to-market net gains on certain

investment positions for the current quarter. Performance from

our Jefferies Finance joint venture improved and performance

from our Berkadia joint venture modestly increased from the prior

year quarter.

Our investment banking backlog remains strong, although the

extent and timing of its realization is always subject to change.

Backlog snapshots are subject to limitations as the time frame

for the realization of revenues from these expected transactions

varies and is influenced by factors we do not control.

Transactions not included in the estimate may occur, and

expected transactions may be modified or cancelled.

Equities Net Revenues

Equities is composed of net revenues from:

•services provided to our clients from which we earn

commissions or spread revenue by executing, settling and

clearing transactions for clients;

•advisory services offered to clients;

•financing, securities lending and other prime brokerage

services offered to clients, including capital introductions and

outsourced trading;

•corporate equity derivative transactions; and

•wealth management services.

February2026 Form 10-Q		45

Three Months Ended February 28, 2026 Versus February 28, 2025

Equities net revenues were $558.5 million, up36.5% from

$409.1 million for the prior year quarter, marking our strongest

first quarter on record, due to market share gains and higher

global trading volumes driving stronger results, particularly within

our equity options, corporate derivatives and global electronic

trading businesses. Our prime services, and Europe and U.S.

equity cash businesses also produced strong results.

Fixed Income Net Revenues

Fixed income is composed of net revenues from:

•executing transactions for clients and making markets in

securitized products, investment grade, high-yield, distressed,

emerging markets, municipal, sovereign and emerging markets

securities and loans;

•customized products and corporate hedging and foreign

currency solutions through derivative products; and

•financing and other structuring services.

Three Months Ended February 28, 2026 Versus February 28, 2025

Fixed income net revenues were $220.3 million, down23.8%

compared to $289.2 million for the prior year quarter as credit

markets remained challenging in the current quarter for the

products and services where we are most active, impacting the

overall trading environment and several of our businesses.

Strong performance in our municipal securities and emerging

markets businesses was more than offset by lower results from

our securitized products business, which includes a gross mark-

to-market loss of $42.8 million associated with Market Financial

Solutions during the current quarter.

Asset Management

We operate a diversified alternative asset management platform

that provides institutional clients with a broad range of

investment strategies, both directly and through our strategic

affiliated asset managers. Certain affiliated managers also

benefit from access to our global marketing and distribution

platform, as well as operational infrastructure and support. Our

asset management business makes seed and additional

strategic investments directly in alternative asset management

separately managed accounts and co-mingled funds where we

act as the asset manager or in affiliated asset managers where

we have strategic relationships and participate in the revenues or

profits of the affiliated manager.

Asset management fees and revenues primarily consist of:

•Management and performance fees from funds and accounts

managed by us;

•Placement and distribution fees for raising capital from

investors; and

•Revenue from strategic affiliated asset managers where we are

entitled to portions of their operating revenues and income

based on our ownership interests in the affiliates.

Fees and revenues are generally tied to the value of assets under

management and the performance of those assets.

Performance-based fees are earned when returns exceed

specified benchmarks or performance targets and are typically

recognized annually generally in our first quarter, once they

become fixed and determinable and are not subject to significant

reversal.

We also generate an investment return from capital invested in

our managed funds and in funds managed by our affiliated asset

managers. Additionally, we earn revenues from other

investments, including our portfolio of real estate development

activities, foreign exchange trading, and telecommunications

operations.

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	Three Months Ended February 28,
$ in thousands	2026	2025	% Change
Asset management fees and other..	$6,899	$45,808	(84.9)%
Revenue from strategic affiliates (1)	63,011	42,822	47.1%
Total asset management fees and revenues..........................................	69,910	88,630	(21.1)%
Investment return................................	88,992	(5,634)	N/M
Allocated net interest..........................	(22,238)	(17,221)	29.1%
Other investments...............................	83,598	126,128	(33.7)%
Total Asset Management..................	$220,262	$191,903	14.8%

N/M — Not Meaningful

(1)Amounts include our share of fees received by affiliated asset management

companies with which we have revenue and profit share arrangements, as

well as earnings on our ownership interest in affiliated asset managers.

Three Months Ended February 28, 2026 Versus February 28, 2025

Asset management fees and revenues were $69.9 million, down

21.1% compared to $88.6 million for the prior year quarter,

reflecting higher performance fees on funds managed through

our strategic affiliates, offset by lower performance fees largely

associated with Point Bonita.

Investment return was $89.0 million, compared to $(5.6) million

for the prior year quarter due to improved returns generated

across a number of fund strategies, particularly those with a long

equity bias.

Other investments net revenues were $83.6 million, down33.6%

compared to $125.9 million in the prior year quarter, as

performance from Stratos and HomeFed was lower than the prior

year quarter and mark-to-market gains on certain investments

were lower than the prior year quarter. In February 2026, we

entered into a binding offer with a third party to sell Tessellis. We

expect the sale to close during the first quarter of 2027.

Assets Under Management

Assets under management (“AUM”) represents the assets we

manage or are managed by our affiliated asset managers with

whom we have revenue sharing arrangements. AUM primarily

refers to the basis of assets from which we are entitled to earn

fees and revenues though the measure also includes funds and

separately managed accounts for which we do not charge fees.

AUM includes:

•the net asset value of a fund or separately managed account

managed by us or our affiliated managers and may include an

agreed target AUM utilizing leverage;

•unfunded capital commitments to a fund; and

•the fair value of any invested capital in our consolidated funds

or separately managed accounts.

Net asset value generally refers to the fair value the assets less

the liabilities of a fund or account.

46		Jefferies Financial Group Inc.

Assets under management:

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$ in millions	February 28, 2026	November 30, 2025
Net asset value seeded by us:
Jefferies funds or separately managed accounts..............................................................	$376	$358
Our affiliates funds or separately managed accounts..............................................................	1,712	1,741
Total net asset value of Jefferies’ invested capital (1).............................................................	2,088	2,099
Fair value of investment purchased with leverage................................................................	539	699
Total AUM attributed to Jefferies as investor....	$2,627	$2,798
Net asset value of third-party investors:
Jefferies funds or separately managed accounts (2)........................................................	1,618	2,462
Our affiliates funds or separately managed accounts (3)........................................................	26,898	25,387
Total AUM attributed to third-party investors....	$28,516	$27,849
Unfunded capital commitments............................	194	195
Aggregated AUM.....................................................	$31,337	$30,842

(1)Revenues related to the investments made by us are presented in Investment

return within the results of our asset management businesses.

(2)We earn asset management fees as a result of the third-party investments,

which are presented in Asset management fees and revenues within the

results of our asset management business.

(3)Revenues from our share of fees received by affiliated asset managers are

presented in Revenue from strategic affiliates within the results of our asset

management business.

Our definition of assets under management may differ from the

calculations of other asset managers; and as a result, this

measure may not be comparable to similar measures presented

by other asset managers. Our definition of AUM may differ from

that referenced in any of our investment management

agreements, differs from the manner in which “Regulatory Assets

Under Management” is reported to the SEC on Form ADV, and

includes assets for which we do not act as an asset manager.

In addition to our investments directly in Jefferies’ and our

strategic affiliates funds and separately managed accounts, we

have capital invested in other equity method investees as part of

our asset management business of $178.0 million and

$174.0 million at February 28, 2026 and November 30, 2025,

respectively.

Other

Other revenues include foreign currency transaction gains or

losses, debt valuation adjustments on derivative contracts, gains

and losses on investments held in deferred compensation plans

or certain other corporate income items that are not attributed to

business segments as management does not consider such

amounts in assessing the financial performance of our operating

businesses.

Non-interest Expenses

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	Three Months Ended February 28,
$ in thousands	2026	2025	% Change
Compensation and benefits...........	$1,085,890	$841,127	29.1%
Brokerage and clearing fees..........	133,132	109,436	21.7
Underwriting costs..........................	31,383	17,846	75.9
Technology and communications	159,858	139,475	14.6
Occupancy and equipment rental.	33,860	30,199	12.1
Business development...................	75,422	72,291	4.3
Professional services.....................	76,944	72,466	6.2
Depreciation and amortization......	56,865	30,988	83.5
Cost of sales....................................	29,920	41,568	(28.0)
Other..................................................	121,640	86,558	40.5
Total non-interest expenses.........	$1,804,914	$1,441,954	25.2%

Total Non-interest Expenses

Three Months Ended February 28, 2026 Versus February 28, 2025

Non-interest expenses were $1.80 billion, an increase of 25.2%,

compared to $1.44 billion for the prior year quarter, primarily due

to an increase in compensation and benefits expenses

attributable to higher net revenues.

Compensation and Benefits

Compensation and benefits expense consists of salaries,

benefits, commissions, annual cash compensation and share-

based awards and the amortization of share-based and cash

compensation awards to employees.

Cash and share-based awards granted to employees may contain

provisions such that employees who terminate their employment

or are terminated without cause may continue to vest in their

awards, so long as those awards are not forfeited as a result of

other forfeiture provisions (primarily non-compete clauses) of

those awards. Accordingly, the compensation expense for a

portion of awards granted at year end as part of annual

compensation is recorded during the year of the award.

Compensation and benefits expense includes amortization

expense associated with these awards to the extent vesting is

contingent on future service. In addition, certain awards to our

Chief Executive Officer and our President contain performance

conditions and the awards are amortized over their service

periods.

Compensation and benefits expense was $1.09 billion compared

to $841.1 million for the prior year quarter. A significant portion

of our compensation expense is highly variable with net

revenues. Compensation and benefits expense as a percentage

of Net revenues was 53.8% compared with 52.8% for prior year

quarter.

Compensation expense related to the amortization of share- and

cash-based awards was $183.3 million compared to $150.7

million for the prior year quarter.

At February 28, 2026, we had 7,596 employees globally across all

of our consolidated subsidiaries within our Investment Banking

and Capital Markets and Asset Management reportable

segments, compared to 7,787 at November 30, 2025. Included

within our global headcount are 1,578 employees at February 28,

2026 and 1,797 employees at November 30, 2025 of our Stratos,

Tessellis, HomeFed, and M Science subsidiaries.

February2026 Form 10-Q		47

Non-interest Expenses (Excluding Compensation and Benefits)

Three Months Ended February 28, 2026 Versus February 28, 2025

Non-compensation expenses as a percentage of Net revenues

was 35.6% compared to 37.7% for the current quarter and prior

year quarter, respectively, and was impacted by the following:

•Brokerage and clearing fees were higher by $23.7 million

primarily tied to strong equities revenue growth across regions.

•Technology and communication expenses were higher by

$20.4 million related to the continued development of various

trading and management systems as well as higher data

related costs.

•Other expenses were higher by $35.1 million compared to the

prior year period, primarily due to the write-down of goodwill

associated with the expected sale of Tessellis.

Income Taxes

Three Months Ended February 28, 2026 Versus February 28, 2025

The provision for income taxes on continuing operations was

$52.9 million and $14.2 million for the three months ended

February 28, 2026 and 2025, respectively, representing an

effective tax rate of 24.9%, and 9.4%, respectively. The fluctuation

in rate was primarily driven by the resolution of certain state and

local tax matters in the prior year quarter.

Accounting Developments

There are no accounting standard updates, except as discussed

in Note 3, Accounting Developments in our consolidated financial

statements including in this quarterly report on Form 10-Q which

we have either determined are applicable or expected to have a

material impact on our consolidated financial statements.

48		Jefferies Financial Group Inc.

Critical Accounting Estimates

Our consolidated financial statements are prepared in conformity

with U.S. generally accepted accounting principles (“U.S. GAAP”),

which requires management to make estimates and

assumptions that affect the amounts reported in our

consolidated financial statements and related notes. Actual

results can and may differ from estimates. These differences

could be material to our consolidated financial statements.

We believe our application of U.S. GAAP and the associated

estimates are reasonable. Our accounting estimates are

reevaluated, and adjustments are made when facts and

circumstances dictate a change. Historically, we have found our

application of accounting policies to be appropriate, and actual

results have not differed materially from those determined using

necessary estimates.

For further discussions of the following significant accounting

policies and other significant accounting policies, refer to Note 2,

Summary of Significant Accounting Policies, in our consolidated

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

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

Valuation of Financial Instruments

Financial instruments owned and Financial instruments sold, not

yet purchased are recorded at fair value. The fair value of a

financial instrument is the amount that would be received to sell

an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date (the exit

price). Unrealized gains or losses are generally recognized in

Principal transactions revenues.

Fair Value Hierarchy – In determining fair value, we maximize the

use of observable inputs and minimize the use of unobservable

inputs by requiring that observable inputs be used when

available. Observable inputs are inputs that market participants

would use in pricing the asset or liability based on market data

obtained from independent sources. Unobservable inputs reflect

our assumptions that market participants would use in pricing

the asset or liability developed based on the best information

available in the circumstances. We apply a hierarchy to

categorize our fair value measurements broken down into three

levels based on the transparency of inputs, where Level 1 uses

observable prices in active markets and Level 3 uses valuation

techniques that incorporate significant unobservable inputs.

Greater use of management judgment is required in determining

fair value when inputs are less observable or unobservable in the

marketplace, such as when the volume or level of trading activity

for a financial instrument has decreased and when certain

factors suggest that observed transactions may not be reflective

of orderly market transactions. Judgment must be applied in

determining the appropriateness of available prices, particularly

in assessing whether available data reflects current prices and/or

reflects the results of recent market transactions. Prices or

quotes are weighed when estimating fair value with greater

reliability placed on information from transactions that are

considered to be representative of orderly market transactions.

Fair value is a market-based measure; therefore, when market

observable inputs are not available, our judgment is applied to

reflect those judgments that a market participant would use in

valuing the same asset or liability. The availability of observable

inputs can vary for different products. We use prices and inputs

that are current as of the measurement date even in periods of

market disruption or illiquidity. The valuation of financial

instruments categorized within Level 3 of the fair value hierarchy

involves the greatest extent of management judgment. (Refer to

Note 2, Summary of Significant Accounting Policies, in our

consolidated financial statements included in Part II, Item 8 of

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

2025 and Note 5, Fair Value Disclosures in our consolidated

financial statements included in this Quarterly Report on Form

10-Q for further information on the definitions of fair value, Level

1, Level 2 and Level 3 and related valuation techniques).

For information on the composition of our Financial instruments

owned and Financial instruments sold, not yet purchased

recorded at fair value and the composition of activity of our Level

3 assets and Level 3 liabilities, refer to Note 5, Fair Value

Disclosures in our consolidated financial statements included in

this Quarterly Report on Form 10-Q.

Controls Over the Valuation Process for Financial Instruments –

Our Independent Price Verification Group, independent of the

trading function, plays an important role in determining that our

financial instruments are appropriately valued and that fair value

measurements are reliable. This is particularly important where

prices or valuations that require inputs are less observable. In the

event that observable inputs are not available, the control

processes are designed to assure that the valuation approach

utilized is appropriate and consistently applied and that the

assumptions are reasonable. Where a pricing model is used to

determine fair value, these control processes include reviews of

the pricing model’s theoretical soundness and appropriateness

by risk management personnel with relevant expertise who are

independent from the trading desks. In addition, recently

executed comparable transactions and other observable market

data are considered for purposes of validating assumptions

underlying the model.

Income Taxes

Significant judgment is required in estimating our provision for

income taxes. In determining the provision for income taxes, we

must make judgments and interpretations about how to apply

inherently complex tax laws to numerous transactions and

business events. In addition, we must make estimates about the

amount, timing and geographic mix of future taxable income,

which includes various tax planning strategies to utilize tax

attributes and deferred tax assets before they expire.

We record a valuation allowance to reduce our net deferred tax

asset to the amount that is more likely than not to be realized. We

are required to consider all available evidence, both positive and

negative, and to weigh the evidence when determining whether a

valuation allowance is required and the amount of such valuation

allowance. Generally, greater weight is required to be placed on

objectively verifiable evidence when making this assessment, in

particular on recent historical operating results.

We also record reserves for unrecognized tax benefits based on

our assessment of the probability of successfully sustaining tax

filing positions. Management exercises significant judgment

when assessing the probability of successfully sustaining tax

filing positions, and in determining whether a contingent tax

liability should be recorded and if so, estimating the amount. If

our tax filing positions are successfully challenged, payments

could be required that are in excess of reserved amounts or we

may be required to reduce the carrying amount of our net

deferred tax asset, either of which could be significant to our

financial condition or results of operations.

Impairment of Equity Method Investments

We evaluate equity method investments for impairment when

operating losses or other factors may indicate a decrease in

value which is other than temporary. We consider a variety of

February2026 Form 10-Q		49

factors including economic conditions nationally and in an

investment’s geographic area of operation, adverse changes in

the industry in which an investment operates, declines in

business prospects, deterioration in earnings, increasing costs of

operations and other relevant factors specific to the

investee. Whenever we believe conditions or events indicate that

one of these investments might be significantly impaired, we

generally obtain from such investee updated cash flow

projections and obtain other relevant information related to

assessing the overall valuation of the investee. Utilizing this

information, we assess whether the investment is considered to

be other-than-temporarily impaired. To the extent an investment

is deemed to be other-than-temporarily impaired, an impairment

charge is recognized for the amount, if any, by which the

investment’s book value exceeds our estimate of the

investment’s fair value.

Goodwill

At February 28, 2026, goodwill of $1.73 billion (excluding goodwill

classified as held for sale) represents 2.3% of total assets. The

nature and accounting for goodwill is discussed in Note 2,

Summary of Significant Accounting Policies in our consolidated

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

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

Note 12, Goodwill and Intangible Assets in our consolidated

financial statements included in this Quarterly Report on Form

10-Q. Goodwill must be allocated to reporting units and tested for

impairment at least annually, or when circumstances or events

make it more likely than not that an impairment occurred.

Goodwill is tested by comparing the estimated fair value of each

reporting unit with its carrying value. Our annual goodwill

impairment testing date for a substantial portion of our reporting

units is August 1 and November 30 for other identified reporting

units. The results of our annual tests did not indicate any

goodwill impairment.

Estimating the fair value of a reporting unit requires management

judgment and often involves the use of estimates and

assumptions that could have a significant effect on whether or

not an impairment charge is recorded and the magnitude of such

a charge. Estimated fair values for our reporting units utilize

market valuation methods that incorporate price-to-earnings and

price-to-book multiples of comparable public companies and/or

projected cash flows. Under the market valuation approach, the

key assumptions are the selected multiples and our internally

developed projections of future profitability, growth and return on

equity for each reporting unit. The weight assigned to the

multiples requires judgment in qualitatively and quantitatively

evaluating the size, profitability and the nature of the business

activities of the reporting units as compared to the comparable

publicly-traded companies. Under the income approach, the key

assumptions include our internally developed projections of

future cash flows, growth rates and risk adjusted discount rates,

which are sensitive to the interest rate environment and capital

market conditions. The valuation methodologies for our reporting

units are sensitive to management’s forecasts of future

profitability, which are a significant component of the valuation

and come with a level of uncertainty regarding trading volumes

and capital market transaction levels. In addition, as the fair

values determined under the market valuation approach

represent a noncontrolling interest, we apply a control premium

to arrive at the estimate fair value of each reporting unit on a

controlling basis.

We use allocated tangible equity plus allocated goodwill and

intangible assets for the carrying amount of each reporting unit.

The amount of tangible equity allocated to a reporting unit is

based on our cash capital model deployed in managing our

businesses, which seeks to approximate the capital a business

would require if it were operating independently. For further

information on our Cash Capital Policy, refer to the Liquidity,

Financial Condition and Capital Resources section herein.

Intangible assets are allocated to a reporting unit based on either

specifically identifying a particular intangible asset as pertaining

to a reporting unit or, if shared among reporting units, based on

an assessment of the reporting unit’s benefit from the intangible

asset in order to generate results.

For certain of our reporting units included within Other

investments we may first assess qualitative factors to determine

whether it is more likely than not that the fair value of the

reporting unit is less than its carrying amount. If we determine on

the basis of this qualitative assessment that it is not more likely

than not that a reporting unit’s fair value is less than its carrying

amount, we place reliance on our qualitative assessment and no

quantitative calculation of the fair value of the reporting unit is

performed.

Carrying values of goodwill by reporting unit:

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

The results of our annual assessments indicated that all of our

reporting units had a fair value in excess of their carrying

amounts. Our valuation methodologies and the assessment of

qualitative factors are sensitive to management’s forecasts of

future probability. At February 28, 2026, our Stratos reporting unit

with allocated goodwill of $5.5 million is highly sensitive to the

forecast assumptions used in our market approach valuation.

Reductions in trading volumes and/or a decline in performance

from the expected levels assumed in our forecast could cause a

decline in the estimated fair value of our Stratos reporting unit

and a resulting impairment of a portion of our goodwill.

During the current quarter, a binding offer to sell our Tessellis

reporting unit was accepted. We have evaluated the goodwill

allocated to Tessellis and, based on the estimated sales

proceeds, recorded an impairment to goodwill of $58.2 million in

the current quarter, which is recognized within Other expenses. At

February 28, 2026, the remaining goodwill allocated to our

Tessellis reporting unit is $56.9 million.

Refer to Note 4, Assets and Liabilities Held for Sale and Note 12,

Goodwill and Intangible Assets in our consolidated financial

statements included in this Quarterly Report on Form 10-Q for

further details on goodwill.

50		Jefferies Financial Group Inc.

Liquidity, Financial Condition and Capital Resources

Our CFO and Global Treasurer are responsible for developing and

implementing our liquidity, funding and capital management

strategies. These policies are determined by the nature and

needs of our day-to-day business operations, business

opportunities, regulatory obligations, and liquidity requirements.

Our actual levels of capital, total assets and financial leverage are

a function of a number of factors, including asset composition,

business initiatives and opportunities, regulatory requirements,

rating agency ratios and cost and availability of both long term

and short-term funding. We have historically maintained a

balance sheet consisting of a large portion of our total assets in

cash and liquid marketable securities. The liquid nature of these

assets provides us with flexibility in financing and managing our

business.

We also own a legacy portfolio of businesses and investments

that are reflected as consolidated subsidiaries, equity

investments or securities. Over the most recent years, we

completed several critical steps to substantially liquidate our

legacy Other investments portfolio of businesses. We recently

announced the sale of our interest in Tessellis S.p.A., which we

anticipate to close during the first quarter of 2027.

In keeping with our strategy of returning excess liquidity to

shareholders, during the three months endedFebruary 28, 2026,

we repurchased a total 3.0 million of our common shares for

$174.3 million, or an average price of $58.18 per share,

comprised of 2.5 million of our common shares for $143.8

million in the open market under our share repurchase program,

and 0.5 million of our common shares for $30.5 million in

connection with net-share tax withholding under our equity

compensation plan.

We maintain modest leverage to support our investment grade

ratings. The growth of our balance sheet is supported by our

equity and we have quantitative metrics in place to monitor

leverage and double leverage. Our capital plan is robust, in order

to sustain our operating model through stressed conditions. We

maintain adequate financial resources to support business

activities in both normal and stressed market conditions,

including a buffer in excess of our regulatory, or other internal or

external, requirements. Our access to funding and liquidity is

stable and efficient to ensure that there is sufficient liquidity to

meet our financial obligations in normal and stressed market

conditions.

Our Balance Sheet

A business unit level balance sheet and cash capital analysis are

prepared and reviewed with senior management on a weekly

basis. As a part of this balance sheet review process, capital is

allocated to all assets and gross balance sheet limits are

adjusted, as necessary. This process ensures that the allocation

of capital and costs of capital are incorporated into business

decisions. The goals of this process are to protect the firm’s

platform, enable our businesses to remain competitive, maintain

the ability to manage capital proactively and hold businesses

accountable for both balance sheet and capital usage.

We actively monitor and evaluate our financial condition and the

composition of our assets and liabilities. We continually monitor

our overall securities inventory, including the inventory turnover

rate, which confirms the liquidity of our overall assets. A

significant portion of our financial instruments are valued on a

daily basis and we monitor and employ balance sheet limits for

our various businesses.

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$ in millions	February 28, 2026	November 30, 2025	% Change
Total assets...........................................	$74,380.5	$76,012.3	(2.1)%
Cash and cash equivalents..................	11,963.2	14,043.9	(14.8)
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations....................................	1,752.5	917.7	91.0
Financial instruments owned..............	28,079.5	27,722.7	1.3
Financial instruments sold, not yet purchased.........................................	14,459.1	13,320.2	8.6
Total Level 3 assets..............................	849.2	737.8	15.1
Securities borrowed..............................	$7,675.9	$8,295.2	(7.5)%
Securities purchased under agreements to resell........................	7,784.1	8,449.1	(7.9)
Total securities borrowed and securities purchased under agreements to resell.......................	$15,460.0	$16,744.3	(7.7)%
Securities loaned...................................	$2,690.4	$2,540.8	5.9%
Securities sold under agreements to repurchase........................................	10,380.3	12,156.7	(14.6)
Total securities loaned and securities sold under agreements to repurchase...................................	$13,070.7	$14,697.5	(11.1)%

Total assets at February 28, 2026 and November 30, 2025 were

$74.38 billion and $76.01 billion, respectively, a decrease of 2.1%.

During the three months ended February 28, 2026, average total

assets were higher by 12.9% than total assets at February 28,

2026.

Our total Financial instruments owned inventory was $28.08

billion and $27.72 billion at February 28, 2026 and November 30,

2025, respectively. During the three months ended February 28,

2026, our total Financial instruments owned increased primarily

due to increased sovereign obligations and U.S. government and

agency securities, partially offset by a decrease in corporate

equity securities. Financial instruments sold, not yet purchased

inventory was $14.46 billion at February 28, 2026, an increase of

8.6% from $13.32 billion at November 30, 2025, with the increase

primarily driven by increases in corporate debt securities,

corporate equity securities and sovereign obligations, partially

offset by a decrease in U.S. government and agency securities

and derivative contracts. Our overall net inventory position was

$13.62 billion and $14.40 billion at February 28, 2026 and

November 30, 2025, respectively, with the decrease primarily due

to decreases in corporate equity securities and corporate debt

securities, partially offset by increases in U.S. government and

agency securities and derivative contracts.

Level 3 assets:

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$ in millions	February 28, 2026	Percent	November 30, 2025	Percent
Investment Banking............	$119.5	14.1%	$111.7	15.1%
Equities and Fixed Income.	441.2	52.0	343.6	46.7
Asset Management (1).......	232.8	27.4	230.5	31.2
Other......................................	55.7	6.5	52.0	7.0
Total......................................	$849.2	100.0%	$737.8	100.0%

February2026 Form 10-Q		51

(1)At February 28, 2026 and November 30, 2025, $200.5 million and $195.8

million, respectively, are attributed to Other investments within our Asset

Management reportable segment.

Securities financing assets and liabilities include financing for

our financial instruments trading activity, matched book

transactions and mortgage finance transactions. Matched book

transactions accommodate customers, as well as obtain

securities for the settlement and financing of inventory positions.

Our average month end balance of total reverse repos and stock

borrows during three months ended February 28, 2026 was 28.3%

higher than the balance at February 28, 2026. Our average month

end balance of total repos and stock loans during the three

months ended February 28, 2026 was 50.6%higher than the

balance at February 28, 2026.

Select information related to repurchase agreements:

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$ in millions	Three Months Ended February 28, 2026	Year Ended November 30, 2025
Securities Purchased Under Agreements to Resell:
Period end..........................................	$7,784	$8,449
Month end average...........................	10,217	10,526
Maximum month end.......................	23,202	14,927
Securities Sold Under Agreements to Repurchase:
Period end..........................................	$10,380	$12,157
Month end average...........................	15,991	16,497
Maximum month end.......................	18,914	19,785

Fluctuations in the balance of our repurchase agreements from

period to period and intraperiod are dependent on business

activity in those periods. Additionally, the fluctuations in the

balances of our securities purchased under agreements to resell

are influenced in any given period by our clients’ balances and

our clients’ desires to execute collateralized financing

arrangements via the repurchase market or via other financing

products. Average balances and period end balances will

fluctuate based on market and liquidity conditions and we

consider the fluctuations intraperiod to be typical for the

repurchase market.

Leverage Ratios:

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$ in millions	February 28, 2026	November 30, 2025
Total assets..................................................................	$74,380	$76,012
Total equity...................................................................	$10,662	$10,642
Total shareholders’ equity..........................................	$10,611	$10,575
Deduct: Goodwill and intangible assets, net............	(1,979)	(2,040)
Tangible shareholders’ equity...................................	$8,632	$8,535
Leverage ratio (1).........................................................	7.0	7.1
Tangible gross leverage ratio (2)...............................	8.4	8.7

(1)Leverage ratio equals total assets divided by total equity.

(2)Tangible gross leverage ratio (a non-GAAP financial measure) equals total

assets less goodwill and identifiable intangible assets, net divided by tangible

shareholders’ equity. The tangible gross leverage ratio is used by rating

agencies in assessing our leverage ratio.

Liquidity Management

The key objectives of the liquidity management framework are to

support the successful execution of our business strategies

while ensuring sufficient liquidity through the business cycle and

during periods of financial and idiosyncratic distress. Our liquidity

management policies are designed to mitigate the potential risk

that we may be unable to access adequate financing to service

our financial obligations without material franchise or business

impact.

The principal elements of our liquidity management framework

are our Cash Capital Policy, our assessment of Modeled Liquidity

Outflow (“MLO”) and our Contingency Funding Plan (“CFP”).

Liquidity Management Framework. Our Liquidity Management

Framework is based on a model of a potential liquidity

contraction over a one-year time period. This incorporates

potential cash outflows during a market or our idiosyncratic

liquidity stress event, including, but not limited to, the following:

•Repayment of all unsecured debt maturing within one year and

no incremental unsecured debt issuance;

•Maturity rolloff of outstanding letters of credit with no further

issuance and replacement with cash collateral;

•Higher margin requirements than currently exist on assets on

securities financing activity, including repurchase agreements

and other secured funding including central counterparty

clearinghouses;

•Liquidity outflows related to possible credit downgrade;

•Lower availability of secured funding;

•Client cash withdrawals;

•The anticipated funding of outstanding investment and loan

commitments; and

•Certain accrued expenses and other liabilities and fixed costs.

Cash Capital Policy. We maintain a cash capital model that

measures long-term funding sources against requirements.

Sources of cash capital include our equity, mezzanine equity and

the noncurrent portion of long-term borrowings. Uses of cash

capital include the following:

•Illiquid assets such as equipment, goodwill, net intangible

assets, exchange memberships, deferred tax assets and

certain investments;

•A portion of securities inventory and other assets not expected

to be financed on a secured basis in a credit stressed

environment (i.e., margin requirements); and

•Drawdowns of unfunded commitments.

To ensure that we do not need to liquidate inventory in the event

of a funding stress, we seek to maintain surplus cash capital. Our

total long-term capital of $23.70 billion at February 28, 2026

exceeded our cash capital requirements.

MLO. Our businesses are diverse, and our liquidity needs are

determined by many factors, including market movements,

collateral requirements and client commitments, all of which can

change dramatically in a difficult funding environment. During a

liquidity stress, credit-sensitive funding, including unsecured debt

and some types of secured financing agreements, may be

unavailable, and the terms (e.g., interest rates, collateral

provisions and tenor) or availability of other types of secured

financing may change. As a result of our policy to ensure we have

sufficient funds to cover what we estimate may be needed in a

liquidity stress, we hold more cash and unencumbered securities

and have greater long-term debt balances than our businesses

would otherwise require. As part of this estimation process, we

calculate an MLO that could be experienced in a liquidity stress.

MLO is based on a scenario that includes both a market-wide

stress and firm-specific stress, characterized by some or all of

the following elements:

52		Jefferies Financial Group Inc.

•Global recession, default by a medium-sized sovereign, low

consumer and corporate confidence, and general financial

instability.

•Severely challenged market environment with material declines

in equity markets and widening of credit spreads.

•Damaging follow-on impacts to financial institutions leading to

the failure of a large bank.

•A firm-specific crisis potentially triggered by material losses,

reputational damage, litigation, executive departure, and/or a

ratings downgrade.

The following are the critical modeling parameters of the MLO:

•Liquidity needs over a 30-day scenario.

•A two-notch downgrade of our long-term senior unsecured

credit ratings.

•No support from government funding facilities.

•A combination of contractual outflows, such as upcoming

maturities of unsecured debt, and contingent outflows (e.g.,

actions though not contractually required, we may deem

necessary in a crisis). We assume that most contingent

outflows will occur within the initial days and weeks of a

stress.

•No diversification benefit across liquidity risks. We assume

that liquidity risks are additive.

The calculation of our MLO under the above stresses and

modeling parameters considers the following potential

contractual and contingent cash and collateral outflows:

•All upcoming maturities of unsecured long-term debt,

promissory notes and other unsecured funding products

assuming we will be unable to issue new unsecured debt or

rollover any maturing debt.

•Repurchases of our outstanding long-term debt in the ordinary

course of business as a market maker.

•A portion of upcoming contractual maturities of secured

funding activity due to either the inability to refinance or the

ability to refinance only at wider haircuts (i.e., on terms which

require us to post additional collateral). Our assumptions

reflect, among other factors, the quality of the underlying

collateral and counterparty concentration.

•Collateral postings to counterparties due to adverse changes in

the value of our over-the-counter (“OTC”) derivatives and other

outflows due to trade terminations, collateral substitutions,

collateral disputes, collateral calls or termination payments

required by a two-notch downgrade in our credit ratings.

•Variation margin postings required due to adverse changes in

the value of our outstanding exchange-traded derivatives and

any increase in initial margin and guarantee fund requirements

by derivative clearing houses.

•Liquidity outflows associated with our prime services business,

including withdrawals of customer credit balances, and a

reduction in customer short positions.

•Liquidity outflows to clearing banks to ensure timely

settlements of cash and securities transactions.

•Draws on our unfunded commitments considering, among

other things, the type of commitment and counterparty.

•Other upcoming large cash outflows, such as employee

compensation, tax and dividend payments, with no expectation

of future dividends from any subsidiaries.

Based on the sources and uses of liquidity calculated under the

MLO scenarios, we determine, based on a calculated surplus or

deficit, additional long-term funding that may be needed versus

funding through the repurchase financing market and consider

any adjustments that may be necessary to our inventory balances

and cash holdings. At February 28, 2026, we had sufficient

excess liquidity to meet all contingent cash outflows detailed in

the MLO for at least 30 days without balance sheet reduction. We

regularly refine our model to reflect changes in market or

economic conditions and our business mix.

CFP. Our CFP ensures the ability to access adequate liquid

financial resources to meet liquidity shortfalls that may arise in

emergency situations. The CFP triggers the following actions:

•Sets out the governance for managing liquidity during a

liquidity crisis;

•Identifies key liquidity and capital early warning indicators that

will help guide the response to the liquidity crisis;

•Identifies the actions and escalation procedures should we

experience a liquidity crisis including coordination amongst

senior management and the Board of Directors;

•Sets out the sources of funding available during a liquidity

crisis;

•Sets out the communication plan during a liquidity crisis for

key external stakeholders including regulators, relationship

banks, rating agencies and funding counterparties; and

•Sets out an action plan to source additional funding.

Sources of Liquidity

Financial instruments that are cash and cash equivalents or are

deemed by management to be generally readily convertible into

cash, marginable or accessible for liquidity purposes within a

relatively short period of time:

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$ in thousands	February 28, 2026	Average Balance Quarter Ended February 28, 2026 (1)	November 30, 2025
Cash and cash equivalents:
Cash in banks.............................................	$5,153,327	$5,282,239	$3,903,807
Money market investments (2)...............	6,809,838	6,686,432	10,140,082
Total cash and cash equivalents............	11,963,165	11,968,671	14,043,889
Other sources of liquidity:
Debt securities owned and securities purchased under agreements to resell (3)................................................	1,961,124	2,115,211	1,823,733
Other (4)......................................................	1,065,391	1,168,287	1,836,150
Total other sources...................................	3,026,515	3,283,498	3,659,883
Total cash and cash equivalents and other liquidity sources.......................	$14,989,680	$15,252,169	$17,703,772
Total cash and cash equivalents and other liquidity sources as % of Total assets....................................................	20.2%		23.3%
Total cash and cash equivalents and other liquidity sources as % of Total assets less goodwill and intangible assets....................................................	20.7%		23.9%

(1)Average balances are calculated based on weekly balances.

February2026 Form 10-Q		53

(2)At February 28, 2026 and November 30, 2025, $6.80 billion and $10.12 billion,

respectively, was invested in U.S. government money funds that invest

primarily in cash, securities issued by the U.S. government and U.S.

government-sponsored entities, and repurchase agreements that are fully

collateralized by cash or government securities. The remaining balances at

February 28, 2026 and November 30, 2025 are primarily invested in AAA-rated

prime money funds. The average balance of U.S. government money funds for

the quarter ended February 28, 2026 was $6.67 billion.

(3)Consists of unencumbered high-quality sovereign government securities and

reverse repurchase agreements collateralized by U.S. government securities

and other high quality sovereign government securities; deposits with a central

bank within the European Economic Area, United Kingdom, Canada, Australia,

Japan, Switzerland or the U.S.; and securities issued by a designated

multilateral development bank and reverse repurchase agreements with

underlying collateral composed of these securities.

(4)Other includes unencumbered inventory representing an estimate of the

amount of additional secured financing that could be reasonably expected to

be obtained from our Financial instruments owned that are currently not

pledged after considering reasonable financing haircuts.

In addition to the cash balances and liquidity pool presented

above, the majority of financial instruments (both long and short)

in our trading accounts are actively traded and readily

marketable. At February 28, 2026, we had the ability to readily

obtain repurchase financing for 73.1% of our inventory at haircuts

of 10% or less, which reflects the liquidity of our inventory. In

addition, as a matter of our policy, all of these assets have

internal capital assessed, which is in addition to the funding

haircuts provided in the securities finance markets. Additionally,

certain of our Financial instruments owned primarily consisting

of loans and investments are predominantly funded by long term

capital. Under our cash capital policy, we model capital allocation

levels that are more stringent than the haircuts used in the

market for secured funding; and we maintain surplus capital at

these more stringent levels. We continually assess the liquidity of

our inventory based on the level at which we could obtain

financing in the marketplace for a given asset. Assets are

considered to be liquid if financing can be obtained in the

repurchase market or the securities lending market at collateral

haircut levels of 10% or less.

Financial instruments by asset class that we consider to be of a

liquid nature and the amount of such assets that have not been

pledged as collateral:

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	February 28, 2026		November 30, 2025
$ in thousands	Liquid Financial Instruments	Unencumbered Liquid Financial Instruments (1)	Liquid Financial Instruments	Unencumbered Liquid Financial Instruments (1)
Corporate equity securities.............	$6,846,950	$1,260,037	$7,433,971	$2,715,099
Corporate debt securities.............	4,971,407	414,057	4,788,698	280,512
U.S. government, agency and municipal securities.............	3,148,135	160,097	3,013,344	55,781
Other sovereign obligations..........	1,779,436	1,698,650	1,460,571	1,731,074
Agency mortgage- backed securities (2).......	3,635,424	—	3,060,262	—
Loans and other receivables..........	145,675	—	159,939	—
Total...........................	$20,527,027	$3,532,841	$19,916,785	$4,782,466

(1)Unencumbered liquid balances represent assets that can be sold or used as

collateral for a loan but have not been.

(2)Consists solely of agency mortgage-backed securities issued by the Federal

Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National

Mortgage Association (“Fannie Mae”) and the Government National Mortgage

Association (“Ginnie Mae”).

In addition to being able to be readily financed at reasonable

haircut levels, we estimate that each of the individual securities

within each asset class above could be sold into the market and

converted into cash within three business days under normal

market conditions, assuming that the entire portfolio of a given

asset class was not simultaneously liquidated. There are no

restrictions on the unencumbered liquid securities, nor have they

been pledged as collateral.

Sources of Funding and Capital Resources

Our assets are funded by equity capital, senior debt, securities

loaned, securities sold under agreements to repurchase,

customer free credit balances, bank loans and other payables.

Secured Financing

We rely principally on readily available secured funding to finance

our inventory of financial instruments owned and financial

instruments sold. Our ability to support increases in total assets

is largely a function of our ability to obtain short- and

intermediate-term secured funding, primarily through securities

financing transactions. We finance a portion of our long inventory

and cover some of our short inventory by pledging and borrowing

securities in the form of repurchase or reverse repurchase

agreements (collectively “repos”), respectively. A portion of our

cash and noncash repurchase financing activities is used as

collateral that is considered eligible collateral by central clearing

corporations. Central clearing corporations are situated between

participating members who borrow cash and lend securities (or

vice versa); accordingly, repo participants contract with the

central clearing corporation and not one another individually.

Therefore, counterparty credit risk is borne by the central clearing

corporation which mitigates the risk through initial margin

demands and variation margin calls from repo participants. The

comparatively large proportion of our total repo activity that is

eligible for central clearing reflects the high quality and liquid

composition of the inventory we carry in our trading books. For

those asset classes not eligible for central clearing house

financing, we seek to execute our bi-lateral financings on an

extended term basis and the tenor of our repurchase and reverse

repurchase agreements generally exceeds the expected holding

period of the assets we are financing. The weighted average

maturity of cash and noncash repurchase agreements for non-

clearing corporation eligible funded inventory is approximately

seven months at February 28, 2026.

Our ability to finance our inventory via central clearinghouses and

bi-lateral arrangements is augmented by our ability to draw bank

loans on an uncommitted basis under our various banking

arrangements. At February 28, 2026, short-term borrowings,

which must be repaid within one year or less include bank loans,

overdrafts and borrowings under revolving credit facilities.

Letters of credit are used in the normal course of business

mostly to satisfy various collateral requirements in favor of

exchanges in lieu of depositing cash or securities. Average short-

term borrowings outstanding were $1.85 billion for the three

months ended February 28, 2026.

At February 28, 2026 and November 30, 2025, our borrowings

under bank loans in Short-term borrowings were $750.8 million

and $533.8 million, respectively. Our borrowings include credit

facilities that contain certain covenants that, among other things,

require us to maintain a specified level of tangible net worth,

require a minimum regulatory net capital requirement for our U.S.

broker-dealer, Jefferies LLC, and impose certain restrictions on

the future indebtedness of certain of our subsidiaries that are

54		Jefferies Financial Group Inc.

borrowers. Interest is based on rates at spreads over the federal

funds rate or other adjusted rates, as defined in the various credit

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

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

were in compliance with all covenants under these credit

facilities.

In addition to the above financing arrangements, we issue notes

backed by eligible collateral under master repurchase

agreements, which provide an additional financing source for our

inventory (our “repurchase agreement financing program”). The

notes issued under the program are presented within Other

secured financings. At February 28, 2026, the outstanding notes

totaled $2.16 billion, bear interest primarily at a spread over the

Secured Overnight Funding Rate (“SOFR”) and mature from April

2026 to October 2028.

Total Long-Term Capital

At February 28, 2026 and November 30, 2025, we had total long-

term capital of $23.70 billion and $23.14 billion, respectively,

resulting in a long-term debt to equity capital ratio of 1.22:1 and

1.17:1, respectively.

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$ in thousands	February 28, 2026	November 30, 2025
Unsecured Long-Term Debt (1)..................................	$13,037,385	$12,494,842
Total Mezzanine Equity...............................................	406	406
Total Equity...................................................................	10,661,728	10,642,203
Total Long-Term Capital............................................	$23,699,519	$23,137,451

(1)Amounts at February 28, 2026 and November 30, 2025 exclude our secured

long-term debt, $886.2 million and $869.5 million, respectively, of our Callable

Notes as the note matured on April 16, 2026, and $46.1 million and

$45.2 million, respectively, of our Floating Senior Notes as the notes matured

on June 19, 2026. The amount at February 28, 2026 excludes $39.7 million of

our Callable Notes as the note has been called. The amounts at February 28,

2026 and November 30, 2025 also exclude $74.8 million and $102.7 million,

respectively, of structured notes as the notes mature within one year.

Long-Term Debt

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

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

as presented in our Consolidated Statements of Financial

Condition. This increase is primarily due to proceeds of

$1.63 billion from the issuances of unsecured senior notes and

$74.8 million from currency gains on foreign currency

borrowings. These increases were partially offset by repayments

of $188.2 million on our unsecured senior notes, $52.2 million

from net repayments of structured notes, the reclassification of

$51.9 million of Tessellis’ borrowings to liabilities held for sale

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

information), and $42.3 million from decreased subsidiaries’

borrowings.

At February 28, 2026, our unsecured long-term debt has a

weighted average maturity of approximately 7.6 years.

At February 28, 2026 and November 30, 2025, our borrowings

under several credit facilities classified within Long-term debt in

our Consolidated Statements of Financial Condition amounted to

$703.0 million and $803.2 million, respectively. Interest on these

credit facilities is based on an adjusted SOFR plus a spread or

other adjusted rates, as defined in the various credit agreements.

The credit facility agreements contain certain covenants that,

among other things, require us to maintain specified levels of

tangible net worth and liquidity amounts, certain credit and rating

levels and impose certain restrictions on future indebtedness of

and require specified levels of regulated capital and cash

reserves for certain of our subsidiaries. At February 28, 2026, we

were in compliance with all covenants under theses credit

facilities.

Long-term debt ratings:

	Rating	Outlook
Moody’s Investors Service .........................................	Baa2	Stable
Standard & Poor’s........................................................	BBB	Stable
Fitch Ratings.................................................................	BBB+	Stable

	Jefferies LLC		Jefferies International Limited		Jefferies GmbH
	Rating	Outlook	Rating	Outlook	Rating	Outlook
Moody’s Investors Service ..........	Baa1	Stable	Baa1	Stable	Baa1	Stable
Standard & Poor’s............	BBB+	Stable	BBB+	Stable	BBB+	Stable

Access to external financing to finance our day-to-day operations,

as well as the cost of that financing, is dependent upon various

factors, including our debt ratings. Our current debt ratings are

dependent upon many factors, including industry dynamics,

operating and economic environment, operating results,

operating margins, earnings trend and volatility, balance sheet

composition, liquidity and liquidity management, our capital

structure, our overall risk management, business diversification

and our market share and competitive position in the markets in

which we operate. Deterioration in any of these factors could

impact our credit ratings. While certain aspects of a credit rating

downgrade are quantifiable pursuant to contractual provisions,

the impact on our business and trading results in future periods

is inherently uncertain and depends on a number of factors,

including the magnitude of the downgrade, the behavior of

individual clients and future mitigating action taken by us.

Equity Capital

Common Stock

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

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

par value of $1.00 per share and had 204,422,673 and

206,296,167 common shares outstanding, respectively. At

February 28, 2026, we had 16,746,087 share-based awards that

do not require the holder to pay any exercise price and 5,064,740

stock options that require the holder to pay an exercise price of

$22.69 per share.

During the three months endedFebruary 28, 2026, we

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

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

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

market under our share repurchase program, and 0.5 million of

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

share tax withholding under our equity compensation plan. In

March 2026, the Board of Directors has authorized the

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

repurchase program.

Dividends

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

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

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

shareholders of record at March 18, 2026.

February2026 Form 10-Q		55

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

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

Preferred stock.

The payment of dividends is subject to the discretion of our

Board of Directors and depends upon general business

conditions and other factors that our Board of Directors may

deem to be relevant.

Non-Voting Common Stock

On June 28, 2023, shareholders approved an Amended and

Restated Certificate of Incorporation, which authorized the

issuance of 35,000,000 shares of non-voting common stock with

a par value of $1.00 per share (the “Non-Voting Common

Shares”). The Non-Voting Common Shares are entitled to share

equally, on a per share basis, with the voting common stock, in

dividends and distributions. Upon the effectiveness of the

Amended and Restated Certificate of Corporation on June 30,

2023, the number of authorized shares of common stock

remains at 600,000,000 shares, composed of 565,000,000 shares

of voting common stock and 35,000,000 shares of Non-Voting

Common Shares.

Preferred Stock

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

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

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

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

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

voting common stock upon dissolution, liquidation or winding up

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

Stock is automatically convertible into 500 shares of non-voting

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

years after issuance. The Series B Preferred Stock participates in

cash dividends and distributions alongside our voting common

stock on an as-converted basis.

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

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

which entitles SMBC to exchange shares of our voting common

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

shares of voting common stock for one share of Series B

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

shares of Preferred Stock and SMBC is required to pay $1.50 per

share of voting common stock so exchanged. As of November

30, 2025, SMBC had exchanged approximately 27.6 million

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

Preferred Stock. At February 28, 2026, SMBC owns approximately

15.9% of our common stock on an as-converted basis and 14.4%

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

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

Board, with the President and Executive Officer of SMBC taking

over the position following his election at the Annual Shareholder

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

Party Transactions for further information regarding transactions

with SMBC.

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

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

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

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

Preferred Stock has a liquidation preference of $500 per share

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

Series B Preferred Stock upon dissolution, liquidation or winding

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

Preferred Stock is automatically convertible into 500 shares of

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

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

Series B-1 Preferred Stock also participates in cash dividends

and distributions alongside our voting common stock on an as-

converted basis.

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

and restated Exchange Agreement (the “Amended and Restated

Exchange Agreement”) with SMBC, which entitles SMBC to

exchange shares of our voting common stock for shares of the

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

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

Amended and Restated Exchange Agreement is limited to 17,500

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

Restated Exchange Agreement, SMBC is permitted to increase its

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

converted and fully diluted basis, while continuing to own less

than 5% of a voting interest in the Company.

Net Capital

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

member firm of the Financial Industry Regulatory Authority

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

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

capital, and has elected to calculate minimum capital

requirements using the alternative method permitted by Rule

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

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

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

Futures Trading Commission (“CFTC”) under the Commodity

Exchange Act, which sets forth minimum financial requirements.

The minimum net capital requirement in determining excess net

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

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

Regulation 1.17. FINRA is the designated examining authority for

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

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

LLC as an FCM.

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

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

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

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

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

the CFTC’s regulatory capital requirements pursuant to the

minimum financial requirements for swap dealers. Additionally,

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

requirements of the NFA. The SEC is the designated examining

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

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

dealer.

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

requirements as prescribed by the regulatory authorities in their

respective jurisdictions. This includes Jefferies International

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

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

Jefferies GmbH, which is subject to the regulatory supervision of

the German Federal Financial Supervisory Authority.

56		Jefferies Financial Group Inc.

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

follows:

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

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

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

are in compliance with their applicable requirements.

The regulatory capital requirements referred to above may

restrict our ability to withdraw capital from our regulated

subsidiaries.

Customer Protection and Segregation Requirement

As a registered broker dealer that clears and carries customer

accounts, Jefferies LLC is subject to the customer protection

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

reserve formula requirement for customer accounts and deposit

cash or qualified securities into a special reserve bank account

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

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

Government securities on deposit in special reserve bank

accounts for the exclusive benefit of customers.

As a registered broker dealer that clears and carries proprietary

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

Jefferies LLC is also required to compute a reserve requirement

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

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

Government securities in special reserve bank accounts for the

exclusive benefit of PABs.

The qualified securities meeting the 15c3-3 customer and PAB

requirements are included in Cash and securities segregated and

Securities purchased under agreements to resell.

JFSI is exempt from the CFTC and SEC segregation rules.

Other Developments

Following Russia’s 2022 invasion of Ukraine, the U.S., the U.K.,

and the European Union governments, among others, developed

financial and economic sanctions targeting Russia that, in

various ways, constrain transactions with numerous Russian

entities, including major Russian banks and individuals;

transactions in Russian sovereign debt; and investment, trade

and financing to, from, or in Ukraine. We do not have any

operations in Russia or any clients with significant Russian

operations, and we have minimal market risk related to securities

of companies either domiciled or operating in Russia. We

continue to closely monitor the status of global sanctions and

restrictions, trading conditions related to Russian securities and

the credit risk and nature of our counterparties.

Global markets continue to experience disruption and volatility

following the geopolitical instability from the ongoing conflicts

along Israel’s border with the Gaza Strip and elsewhere in the

Middle East, including the recent military conflict among the U.S.,

Israel, and Iran. Our investments and assets in our growing

business in the Persian Gulf, Saudi Arabia and Israel, as well as

the related global macroeconomic climate, could be negatively

affected by consequences from the geopolitical instability,

including disruptions in the Strait of Hormuz, and military conflict

throughout the region. We continue to monitor these and other

geopolitical conflicts, including recent developments between the

United States, Venezuela and other Latin American countries, and

assess their potential impact on our business.

Throughout 2025, the United States introduced actions through

various means to increase import tariffs at various rates,

including on certain products imported from almost all countries.

Other countries have responded with retaliatory actions or plans

for retaliatory actions. Some of these tariff announcements have

since been followed by announcements of limited exemptions

and temporary pauses, and wholly new arrangements with key

trading partners of the United States. These actions, along with

recent legal and policy developments, have led to increased

economic uncertainty, and could negatively impact global supply

chains and trade flow. The potential impact of tariffs on

corporate earnings remains uncertain. We continue to closely

monitor the impact of these matters on our business.

Beginning on September 24, 2025, First Brands Group, LLC and

certain of its affiliates (“First Brands”) filed voluntary petitions for

Chapter 11 bankruptcy protection. First Brands is an aftermarket

auto parts manufacturer that sells its products to major auto-

parts retailers (the “Obligors”). Point Bonita Capital, a division of

Leucadia Asset Management (“LAM”), managed on behalf of

third-party institutional and other investors an approximately $3

billion portfolio of trade-finance assets, which was supported by

total invested equity of $1.9 billion, of which $113 million, or

5.9%, is owned by LAM. Since 2019, the portfolio has included

purported accounts receivable purchased from First Brands and

arising from the sale of First Brands’ products to Obligors. The

purchase of receivables in this fashion is called factoring, and as

of the Chapter 11 filing the Point Bonita portfolio had

approximately $715 million in purported receivables due from

retailers, including Walmart, AutoZone, NAPA, O’Reilly Auto Parts,

and Advanced Auto Parts, with First Brands, as the servicer,

responsible for collecting and remitting the Obligors’ payments to

Point Bonita. For almost six years until September 15, 2025, Point

Bonita had been paid on time and in full. On September 15, 2025,

First Brands stopped directing timely transfers of funds to Point

Bonita.

The First Brands bankruptcy proceedings have uncovered what is

alleged to be a massive fraud that has resulted in the bankrupt

estate bringing claims against its former CEO, its former

Executive Vice President, one of its significant financing

counterparties, and various related entities to recover billions of

dollars in allegedly fraudulent transfers. As it relates to factoring,

the alleged fraudulent activities included First Brands selling

certain receivables more than once, selling receivables that had

been inflated in amount, and selling fabricated receivables. The

Company is exerting every effort to recover assets from First

Brands and from the various Obligors. That process will take

months to years to complete and, given the fraud, the recovery is

highly uncertain. Our investment as it relates to exposure to First

Brands as of this quarter has been valued at zero.

Separately, Apex Credit Partners LLC (“Apex”), a wholly owned

subsidiary of Jefferies Finance, 50%-owned by us, manages on

behalf of third-party institutional and other investors certain CLOs

that invest in broadly syndicated loans with approximately $4.5

billion in assets under management. 12 CLOs managed by Apex

own approximately $49 million in the aggregate of First Brands’

term loans (including PIK interest) and $9 million of First Brands’

debtor-in-possession term loans, which is approximately 1% of

the CLO assets managed by Apex. Additionally, approximately, $1

million of First Brands’ term loans (including PIK interest) and

February2026 Form 10-Q		57

$0.2 million of debt-in-possession term loans were transferred

from an Apex-managed CLO warehouse to Apex in anticipation of

a CLO closing in January 2026. Apex beneficially owns a portion

of the equity tranche and other senior tranches in an amount to

comply with applicable securitization risk-retention rules and in

certain instances such additional amounts which are not

material.

In February 2026, we entered into a binding offer with a third

party to sell our interest in Tessellis S.p.A. We expect the sale to

close during first quarter of 2027.

Off-Balance Sheet Arrangements

We have contractual commitments arising in the ordinary course

of business for securities loaned or purchased under agreements

to resell, repurchase agreements, future purchases and sales of

foreign currencies, securities transactions on a when-issued

basis, purchases and sales of corporate loans in the secondary

market and underwriting. Each of these financial instruments and

activities contains varying degrees of off-balance sheet risk

whereby the fair values of the securities underlying the financial

instruments may be in excess of, or less than, the contract

amount. The settlement of these transactions is not expected to

have a material effect upon our consolidated financial

statements.

In the normal course of business, we engage in other off balance-

sheet arrangements, including derivative contracts. Neither

derivatives’ notional amounts nor underlying instrument values

are reflected as assets or liabilities in our Consolidated

Statements of Financial Condition. Rather, the fair values of

derivative contracts are reported in our Consolidated Statements

of Financial Condition as Financial instruments owned or

Financial instruments sold, not yet purchased as applicable.

Derivative contracts are reflected net of cash paid or received

pursuant to credit support agreements and are reported on a net

by counterparty basis when a legal right of offset exists under an

enforceable master netting agreement. For additional information

about our accounting policies and our derivative activities, refer

to Note 2, Summary of Significant Accounting Policies, in our

consolidated financial statements included in Part II, Item 8 of

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

2025 and Note 5, Fair Value Disclosures and Note 6, Derivative

Financial Instruments in our consolidated financial statements

included in this Quarterly Report on Form 10-Q.

Risk Management

Overview

Risk is an inherent part of our business and activities. The extent

to which we properly and effectively identify, assess, monitor and

manage each of the various types of risk involved in our activities

is critical to our financial soundness, viability and profitability.

Accordingly, we have a comprehensive risk management

approach, with a formal governance structure and policies and

procedures outlining frameworks and processes to identify,

assess, monitor and manage risk. Principal risks involved in our

business activities include market, credit, liquidity and capital,

operational, model and strategic risk. Legal and compliance, new

business and reputational risk are also included within our

principal risks.

Risk management is a multifaceted process that requires

communication, judgment and knowledge of financial products

and markets. Our risk management process encompasses the

active involvement of executive and senior management, and

also many departments independent of the revenue-producing

business units, including Risk Management, Operations,

Information Technology, Compliance, Legal and Finance. Our risk

management policies, procedures and methodologies are flexible

in nature and are subject to ongoing review and modification.

In achieving our strategic business objectives, our risk appetite

incorporates keeping our clients’ interests as top priority and

ensuring we are in compliance with applicable laws, rules and

regulations, as well as adhering to the highest ethical standards.

We undertake prudent risk-taking that protects the capital base

and franchise, utilizing risk limits and tolerances that avoid

outsized risk-taking. We maintain a diversified business mix and

avoid significant concentrations to any sector, product,

geography or activity and set quantitative concentration limits to

manage this risk. We consider contagion, second order effects

and correlation in our risk assessment process and actively seek

out value opportunities of all sizes. We manage the risk of

opportunities larger than our approved risk levels through risk

sharing and risk distribution, sell-down and hedging as

appropriate. We have a limited appetite for illiquid assets and

complex derivative financial instruments. We maintain the asset

quality of our balance sheet through conducting trading activity in

liquid markets and generally ensure high turnover of our

inventory. We subject less liquid positions and derivative financial

instruments to particular scrutiny and use a wide variety of

specific metrics, limits and constraints to manage these risks.

We protect our reputation and franchise, as well as our standing

within the market. We operate a federated approach to risk

management and assign risk oversight responsibilities to a

number of functions with specific areas of focus.

For discussion of liquidity and capital risk management, refer to

the “Liquidity, Financial Condition and Capital Resources” section

herein.

Governance and Risk Management Structure

For a discussion of our governance and risk management

structure and our risk management framework, see

“Management’s Discussion and Analysis of Financial Condition

and Results of Operations—Risk Management” in Part II, Item 7 of

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

2025.

Risk Considerations

We apply a comprehensive framework of limits on a variety of

key metrics to constrain the risk profile of our business activities.

The size of the limits reflects our risk appetite for a certain

activity under normal business conditions. Key metrics included

in our risk management framework include inventory position

and exposure limits on a gross and net basis, scenario analysis

and stress tests, Value-at-Risk (“VaR”), sensitivities, exposure

concentrations, aged inventory, Level 3 assets, counterparty

exposure, leverage and cash capital.

Market Risk

Market risk is defined as the risk of loss due to fluctuations in the

market value of financial assets and liabilities attributable to

changes in market variables.

Our market risk principally arises from interest rate risk, from

exposure to changes in the yield curve, the volatility of interest

rates, and credit spreads, and from equity price risks from

exposure to changes in prices and volatilities of individual

equities, equity baskets and equity indices. In addition,

commodity price risk results from exposure to the changes in

prices and volatilities of individual commodities, commodity

58		Jefferies Financial Group Inc.

baskets and commodity indices, and foreign exchange risk

results from changes in foreign currency rates.

Market risk is present in our capital markets business through

market making, proprietary trading, underwriting and investing

activities and is present in our asset management business

through investments in separately managed accounts and direct

investments in funds. Given our involvement in a broad set of

financial products and markets, market risk exposures are

diversified and economic hedges are established as appropriate.

Market risk is monitored and managed through a set of key risk

metrics such as VaR, stress scenarios, risk sensitivities and

position exposures. Limits are set on the key risk metrics to

monitor and control the risk exposure ensuring that it is in line

with our risk appetite. Our risk appetite, including the market risk

limits, is periodically reviewed to reflect business strategy and

market environment. Material risk changes, top/emerging risks

and limit utilizations/breaches are highlighted through risk

reporting and escalated as necessary.

Trading is principally managed through front office trader

mandates, where each trader is provided a specific mandate in

line with our product registry. Mandates set out the activities,

currencies, countries and products that a desk is permitted to

trade in and set the limits applicable to a desk. Traders are

responsible for knowing their trading limits and trading in a

manner consistent with their mandate.

VaR

VaR is a statistical estimate of the potential loss from adverse

market movements over a specified time horizon within a

specified probability (confidence level). It provides a common

risk measure across financial instruments, markets and asset

classes. We estimate VaR using a model that simulates revenue

and loss distributions by applying historical market changes to

the current portfolio. We calculate a one-day VaR using a one-

year look-back period measured at a 95% confidence level.

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	VaR at February 28, 2026	Daily Firmwide VaR
$ in millions		Daily VaR for the Three Months Ended February 28, 2026
Risk Categories		Average	High	Low
Interest Rates and Credit Spreads.............................	$3.18	$4.06	$8.05	$1.41
Equity Prices........................	8.24	8.45	11.85	5.13
Currency Rates....................	2.54	2.50	3.51	2.03
Commodity Prices..............	0.19	0.40	0.87	0.07
Diversification Effect (1)....	(5.61)	(5.63)	N/A	N/A
Firmwide VaR (2)................	$8.54	$9.78	$13.07	$7.74

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	VaR at November 30, 2025	Daily Firmwide VaR
$ in millions		Daily VaR for the Three Months Ended November 30, 2025
Risk Categories		Average	High	Low
Interest Rates and Credit Spreads.............................	$4.52	$4.79	$6.72	$3.37
Equity Prices........................	7.83	7.53	9.18	5.73
Currency Rates....................	1.91	1.79	2.54	1.37
Commodity Prices..............	0.56	0.45	0.93	0.15
Diversification Effect (1)....	(5.86)	(5.06)	N/A	N/A
Firmwide VaR (2)................	$8.96	$9.50	$11.05	$7.60

(1)The diversification effect is not applicable for the maximum and minimum

VaR values as the firmwide VaR and the VaR values for the four risk categories

might have occurred on different days during the period.

(2)The aggregated VaR presented here is less than the sum of the individual

components (i.e., interest rate risk, foreign exchange rate risk, equity risk and

commodity price risk) due to the benefit of diversification among the four risk

categories. Diversification benefit equals the difference between aggregated

VaR and the sum of VaRs for the four risk categories and arises because the

market risk categories are not perfectly correlated.

VaR for our capital markets trading activities, which excludes the

impact on VaR for each component of market risk from our asset

management activities, by interest rate and credit spreads, equity,

currency and commodity products:

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	VaR at February 28, 2026	Daily Capital Markets VaR
$ in millions		Daily VaR for the Three Months Ended February 28, 2026
Risk Categories		Average	High	Low
Interest Rates and Credit Spreads.............................	$2.79	$3.90	$7.87	$1.26
Equity Prices........................	4.55	5.05	8.94	3.03
Currency Rates....................	2.30	2.10	2.97	1.56
Diversification Effect (1)....	(3.03)	(3.81)	N/A	N/A
Capital Markets VaR (2)....	$6.61	$7.24	$9.74	$5.26

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	VaR at November 30, 2025	Daily Capital Markets VaR
$ in millions		Daily VaR for the Three Months Ended November 30, 2025
Risk Categories		Average	High	Low
Interest Rates and Credit Spreads.............................	$4.46	$4.96	$7.26	$3.59
Equity Prices........................	4.37	4.34	5.06	3.58
Currency Rates....................	1.72	1.47	1.99	1.18
Commodity Prices..............	—	0.03	0.09	—
Diversification Effect (1)....	(4.11)	(4.01)	N/A	N/A
Capital Markets VaR (2)....	$6.44	$6.79	$9.04	$4.48

(1)The diversification effect is not applicable for the maximum and minimum

VaR values as the capital markets VaR and the VaR values for the four risk

categories might have occurred on different days during the period.

(2)The aggregated VaR presented here is less than the sum of the individual

components (i.e., interest rate risk, foreign exchange rate risk, equity risk and

commodity price risk) due to the benefit of diversification among the four risk

categories. Diversification benefit equals the difference between aggregated

VaR and the sum of VaRs for the four risk categories and arises because the

market risk categories are not perfectly correlated.

February2026 Form 10-Q		59

The efficacy of the VaR model is tested by comparing our actual daily net revenues for those positions included in the calculation of

VaR with the daily VaR estimate. This evaluation is performed at various levels, from the overall level down to specific business lines.

For the VaR model, revenue is defined as principal transactions revenues, trading related commissions, revenue from securitization

activities and net interest income. VaR backtesting methodologies differ for regulated entities with approved capital models.

For a 95% confidence one day VaR model (i.e.,no intra-day trading), assuming current changes in market value are consistent with the

historical changes used in the calculation, losses would not be expected to exceed the VaR estimates more than twelve times on an

annual basis (i.e., once in every 20 days). During the three months ended February 28, 2026, there were zero days when the aggregate

net trading loss exceeded the 95% one day VaR.

The chart below presents our daily firmwide and capital markets VaR over the last four quarters. The fluctuations in VaR during the first

quarter of 2026 were primarily driven by volatility in the equity markets.

Daily Net Trading Revenue

There was 1 day with firmwide trading loss out of a total of 61 trading days during the three months ended February 28, 2026. The

histogram below presents the distribution of our actual daily net trading revenue for substantially all of our trading activities:

60		Jefferies Financial Group Inc.

Other Risk Measures

The VaR model does not include certain positions that are best measured and monitored using sensitivity analysis. Risk Management

has additional procedures in place to assure that the level of potential loss driven by those positions not in the VaR model arising from

market movements are within acceptable levels. Such procedures include performing stress tests and profit and loss analysis. The

table below presents the potential reduction in earnings associated with a 10% stress of the fair value of the positions that are not

included in the VaR model at February 28, 2026:

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$ in thousands	10% Sensitivity
Investment in funds and other (1)..........................................................................................................................................................................	$172,770
Private investments..................................................................................................................................................................................................	60,180
Corporate debt securities in default.......................................................................................................................................................................	23,722
Trade claims..............................................................................................................................................................................................................	2,141

(1)Primarily includes investments in hedge funds, fund of funds and private equity funds classified within Level 3 of the fair value hierarchy and

excluded from the fair value hierarchy based on net asset value.

The impact of changes in our own credit spreads on our structured notes for which the fair value option was elected is not included in

VaR. The estimated credit spread risk sensitivity for each one basis point widening in our own credit spreads on financial liabilities for

which the fair value option was elected was an increase in value of approximately $2.0 million at February 28, 2026, which is included in

other comprehensive income.

Other Risk

We are also subject to interest rate risk on our long-term fixed interest rate debt. Generally, the fair market value of debt securities with

a fixed interest rate will increase as interest rates fall, and the fair market value will decrease as interest rates rise. The following table

represents principal cash flows by expected maturity dates and the related weighted-average interest rate on those maturities for our

consolidated long-term debt obligations, inclusive of any related interest rate hedges. For the variable rate borrowings, the weighted-

average interest rates are based on the rates in effect at the reporting date. Our market risk with respect to foreign currency exposure

on our long-term debt is also presented in the table below.

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	Expected Maturity Date (Fiscal Years)
$ in thousands	2026	2027	2028	2029	2030	Thereafter	Total	Fair Value
Rate Sensitive Liabilities:
Fixed Interest Rate Borrowings..........................	$214,299	$666,604	$1,316,474	$376,878	$1,481,879	$7,044,653	$11,100,787	$11,143,530
Weighted-Average Interest Rate........................	3.36%	5.23%	5.12%	5.31%	4.48%	5.65%
Variable Interest Rate Borrowings.....................	$—	$726,500	$528,544	$1,317	$3,878	$1,377,786	$2,638,025	$2,495,295
Weighted-Average Interest Rate........................	—%	6.30%	6.08%	4.67%	4.48%	5.57%
Borrowings with Foreign Currency Exposure...	$932,519	$644,408	$590,950	$590,950	$—	$1,157,316	$3,916,143	$3,745,860
Weighted-Average Interest Rate........................	3.90%	3.03%	3.37%	4.05%	—%	—%

Stress Tests and Scenario Analysis

Stress tests are used to analyze the potential impact of specific

events or extreme market moves on the current portfolio both

firm-wide and within business segments. Stress testing is an

important part of our risk management approach because it

allows us to quantify our exposure to tail risks, highlight potential

loss concentrations, undertake risk/reward analysis, set risk

controls and overall assess and mitigate our risk.

We employ a range of stress scenarios, which comprise both

historical market price and rate changes and hypothetical market

environments, and generally involve simultaneous changes of

many risk factors. Indicative market changes in the scenarios

include, but are not limited to, a large widening of credit spreads,

a substantial decline in equities markets, significant moves in

selected emerging markets, large moves in interest rates and

changes in the shape of the yield curve.

Unlike our VaR, which measures potential losses within a given

confidence interval, stress scenarios do not have an associated

implied probability. Rather, stress testing is used to estimate the

potential loss from market moves that tend to be larger than

those embedded in the VaR calculation. Stress testing

complements VaR to cover for potential limitations of VaR such

as the breakdown in correlations, non-linear risks, tail risk and

extreme events and capturing market moves beyond the

confidence levels assumed in the VaR calculations.

Stress testing is performed and reported at least weekly as part

of our risk management process and on an ad hoc basis in

response to market events or concerns. Current stress tests

provide estimated revenue and loss of the current portfolio

through a range of both historical and hypothetical events. The

stress scenarios are reviewed and assessed at least annually so

that they remain relevant and up to date with market

developments. Additional hypothetical scenarios are also

conducted on a sub-portfolio basis to assess the impact of any

relevant idiosyncratic stress events as needed.

February2026 Form 10-Q		61

Counterparty Credit Risk

Credit risk is the risk of loss due to adverse changes in a

counterparty’s credit worthiness or its ability or willingness to

meet its financial obligations in accordance with the terms and

conditions of a financial contract.

We are exposed to credit risk as a trading counterparty to other

broker-dealers and customers, as a counterparty to derivative

contracts, as a direct lender and through extending loan

commitments and providing securities-based lending and as a

member of exchanges and clearing organizations. Credit

exposure exists across a wide range of products, including cash

and cash equivalents, loans, securities finance transactions and

over-the-counter derivative contracts. The main sources of credit

risk are:

•Loans and lending arising in connection with our investment

banking and capital markets activities, which reflects our

exposure at risk on a default event with no recovery of loans.

Current exposure represents loans that have been drawn by the

borrower and lending commitments that are outstanding. In

addition, credit exposures on forward settling traded loans are

included within our loans and lending exposures for

consistency with the balance sheet categorization of these

items. Loans and lending also arise in connection with our

portion of a Secured Revolving Credit Facility that is with us

and Massachusetts Mutual Life Insurance Company, to be

funded equally, to support loan underwritings by Jefferies

Finance. For further information on this facility, refer to Note

10, Investments in our consolidated financial statements

included in this Quarterly Report on Form 10-Q.

•Securities and margin financing transactions, which reflect our

credit exposure arising from reverse repurchase agreements,

repurchase agreements and securities lending agreements to

the extent the fair value of the underlying collateral differs from

the contractual agreement amount and from margin provided

to customers.

•OTC derivatives, which are reported net by counterparty when a

legal right of setoff exists under an enforceable master netting

agreement. OTC derivative exposure is based on a contract at

fair value, net of cash collateral received or posted under credit

support agreements. In addition, credit exposures on forward

settling trades are included within our derivative credit

exposures.

•Cash and cash equivalents, which includes both interest-

bearing and non-interest-bearing deposits at banks.

Credit is extended to counterparties in a controlled manner and in

order to generate acceptable returns, whether such credit is

granted directly or is incidental to a transaction. All extensions of

credit are monitored and managed as a whole to limit exposure

to loss related to credit risk. Credit risk is managed according to

the Credit Risk Management Policy, which sets out the process

for identifying counterparty credit risk, establishing counterparty

limits, and managing and monitoring credit limits. The policy

includes our approach for:

•Client on-boarding and approving counterparty credit limits;

•Negotiating, approving and monitoring credit terms in legal and

master documentation;

•Determining the analytical standards and risk parameters for

ongoing management and monitoring credit risk books;

•Actively managing daily exposure, exceptions and breaches;

and

•Monitoring daily margin call activity and counterparty

performance.

Counterparty credit exposure limits are granted within our credit

ratings framework, as detailed in the Credit Risk Management

Policy. The Credit Risk Department assesses counterparty credit

risk and sets credit limits at the counterparty master agreement

level. Limits must be approved by appropriate credit officers and

initiated in our credit and trading systems before trading

commences. All credit exposures are reviewed against approved

limits on a daily basis.

Our Secured Revolving Credit Facility, which supports loan

underwritings by Jefferies Finance, is governed under separate

policies other than the Credit Risk Management Policy and is

approved by our Board. The loans outstanding to certain of our

officers and employees are extended pursuant to a review by our

most senior management.

Current counterparty credit exposures at February 28, 2026 and

November 30, 2025 are summarized in the tables below and

provided by credit quality, region and industry. Credit exposures

presented take netting and collateral into consideration by

counterparty and master agreement. Collateral taken into

consideration includes both collateral received as cash as well as

collateral received in the form of securities or other

arrangements. Current exposure is the loss that would be

incurred on a particular set of positions in the event of default by

the counterparty, assuming no recovery. Current exposure equals

the fair value of the positions less collateral. Issuer risk is the

credit risk arising from inventory positions (for example,

corporate debt securities and secondary bank loans). Issuer risk

is included in our country risk exposure within the following

tables.

62		Jefferies Financial Group Inc.

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Counterparty Credit Exposure by Credit Rating
	Loans and Lending		Securities and Margin Finance		OTC Derivatives		Total		Cash and Cash Equivalents		Total with Cash and Cash Equivalents
	At		At		At		At		At		At
$ in millions	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025
AAA Range	$—	$—	$1.8	$10.7	$—	$—	$1.8	$10.7	$6,809.9	$10,140.1	$6,811.7	$10,150.8
AA Range	86.6	91.1	328.4	218.8	291.1	270.5	706.1	580.4	101.1	156.8	807.2	737.2
A Range	36.2	24.5	1,385.9	1,081.5	158.9	173.6	1,581.0	1,279.6	4,808.1	3,514.5	6,389.1	4,794.1
BBB Range	266.2	263.7	218.7	166.7	23.2	20.2	508.1	450.6	242.9	232.5	751.0	683.1
BB or Lower	32.5	38.4	62.6	42.6	192.4	173.8	287.5	254.8	1.2	—	288.7	254.8
Unrated	399.4	279.5	—	—	3.0	9.9	402.4	289.4	—	—	402.4	289.4
Total	$820.9	$697.2	$1,997.4	$1,520.3	$668.6	$648.0	$3,486.9	$2,865.5	$11,963.2	$14,043.9	$15,450.1	$16,909.4
Counterparty Credit Exposure by Region
	Loans and Lending		Securities and Margin Finance		OTC Derivatives		Total		Cash and Cash Equivalents		Total with Cash and Cash Equivalents
	At		At		At		At		At		At
$ in millions	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025
Asia-Pacific/Latin America/Other	$15.8	$15.8	$333.4	$234.6	$2.7	$0.4	$351.9	$250.8	$568.0	$766.3	$919.9	$1,017.1
Europe and the Middle East	44.9	1.7	622.3	426.5	62.3	88.4	729.5	516.6	67.4	71.3	796.9	587.9
North America	760.2	679.7	1,041.7	859.2	603.6	559.2	2,405.5	2,098.1	11,327.8	13,206.3	13,733.3	15,304.4
Total	$820.9	$697.2	$1,997.4	$1,520.3	$668.6	$648.0	$3,486.9	$2,865.5	$11,963.2	$14,043.9	$15,450.1	$16,909.4
Counterparty Credit Exposure by Industry
	Loans and Lending		Securities and Margin Finance		OTC Derivatives		Total		Cash and Cash Equivalents		Total with Cash and Cash Equivalents
	At		At		At		At		At		At
$ in millions	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025	February 28, 2026	November 30, 2025
Asset Managers, Funds and Investment Advisors (1)	$607.3	$438.6	$112.3	$83.6	$21.7	$—	$741.3	$522.2	$6,809.9	$10,140.1	$7,551.2	$10,662.3
Banks, Broker-Dealers	5.9	5.7	1,157.8	863.8	481.0	478.9	1,644.7	1,348.4	5,153.3	3,903.8	6,798.0	5,252.2
Corporates	148.0	145.3	—	—	161.2	165.8	309.2	311.1	—	—	309.2	311.1
As Agent Banks	—	—	675.1	529.9	—	—	675.1	529.9	—	—	675.1	529.9
Other	59.7	107.6	52.2	43.0	4.7	3.3	116.6	153.9	—	—	116.6	153.9
Total	$820.9	$697.2	$1,997.4	$1,520.3	$668.6	$648.0	$3,486.9	$2,865.5	$11,963.2	$14,043.9	$15,450.1	$16,909.4

(1)Includes a $250.0 million secured revolving credit facility to Jefferies Finance at both February 28, 2026 and November 30, 2025.

February2026 Form 10-Q		63

Country Risk Exposure

Country risk is the risk that events or developments that occur in the general environment of a country or countries due to economic,

political, social, regulatory, legal or other factors, will affect the ability of obligors of the country to honor their obligations. We define the

country of risk as the country of jurisdiction or domicile of the obligor and monitor country risk resulting from both trading positions and

counterparty exposure, which may not include the offsetting benefit of any financial instruments utilized to manage market risk. The

following tables reflect our top ten exposures at February 28, 2026 and November 30, 2025 to the sovereign governments, corporations

and financial institutions in those non- U.S. countries in which we have net long issuer and counterparty exposure:

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	February 28, 2026
	Issuer Risk			Counterparty Risk				Issuer and Counterparty Risk
$ in millions	Fair Value of Long Debt Securities	Fair Value of Short Debt Securities	Net Derivative Notional Exposure	Loans and Lending	Securities and Margin Finance	OTC Derivatives	Cash and Cash Equivalents	Excluding Cash and Cash Equivalents	Including Cash and Cash Equivalents
United Kingdom	$2,310.7	$(926.1)	$(591.1)	$40.4	$94.9	$54.7	$(7.6)	$983.5	$975.9
Canada	201.8	(162.3)	17.7	0.9	56.7	387.2	0.4	502.0	502.4
Germany	1,037.6	(814.1)	(63.5)	1.6	113.0	0.8	33.7	275.4	309.1
Japan	3,149.1	(3,070.3)	0.5	—	84.8	—	103.7	164.1	267.8
Hong Kong	89.0	(69.3)	1.7	—	39.5	—	191.5	60.9	252.4
France	757.3	(573.0)	(201.1)	1.5	240.1	0.1	7.0	224.9	231.9
India	28.0	(16.8)	0.8	—	—	—	203.4	12.0	215.4
Taiwan	2,204.7	(2,130.3)	(41.6)	—	166.0	—	—	198.8	198.8
China	1,851.7	(1,623.3)	(42.8)	—	0.6	2.4	—	188.6	188.6
Italy	874.1	(815.3)	101.6	—	0.7	—	2.6	161.1	163.7
Total	$12,504.0	$(10,200.8)	$(817.8)	$44.4	$796.3	$445.2	$534.7	$2,771.3	$3,306.0

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	November 30, 2025
	Issuer Risk			Counterparty Risk				Issuer and Counterparty Risk
$ in millions	Fair Value of Long Debt Securities	Fair Value of Short Debt Securities	Net Derivative Notional Exposure	Loans and Lending	Securities and Margin Finance	OTC Derivatives	Cash and Cash Equivalents	Excluding Cash and Cash Equivalents	Including Cash and Cash Equivalents
Canada	$175.2	$(152.5)	$46.3	$—	$56.9	$373.3	$—	$499.2	$499.2
United Kingdom	1,391.5	(806.6)	(260.2)	0.9	44.6	84.1	7.8	454.3	462.1
Hong Kong	54.6	(41.0)	1.7	—	24.3	—	294.9	39.6	334.5
Australia	837.8	(611.8)	(87.4)	—	11.6	0.2	92.8	150.4	243.2
France	628.5	(405.8)	(131.4)	0.9	149.2	—	0.1	241.4	241.5
Japan	1,570.6	(1,929.7)	364.7	—	67.6	0.1	140.0	73.3	213.3
Spain	546.6	(341.8)	(76.3)	—	74.9	0.2	1.1	203.6	204.7
India	19.9	(17.8)	0.6	—	—	—	198.9	2.7	201.6
Sweden	250.9	(168.4)	52.7	—	—	—	10.5	135.2	145.7
Taiwan	1,119.2	(903.9)	(172.2)	—	101.5	—	—	144.6	144.6
Total	$6,594.8	$(5,379.3)	$(261.5)	$1.8	$530.6	$457.9	$746.1	$1,944.3	$2,690.4

Operational Risk

Operational risk is the risk of financial or non-financial impact,

resulting from inadequate or failed internal processes, people

and systems or from external events. We interpret this definition

as including not only financial loss or gain but also other negative

impacts to our objectives such as reputational impact, legal/

regulatory impact and impact on our clients. Third-party risk is

also included as a subset of operational risk and is defined as the

potential threat presented to us, our employees or clients from

our supply chain and other third parties used to perform a

process, service or activity on our behalf.

Our Operational Risk framework includes governance as well as

operational risk processes, comprises operational risk event

capture and analysis, risk and control self-assessments,

operational risk key indicators, action tracking, risk monitoring

and reporting, deep dive risk assessments, new business

approvals and vendor risk management. Each revenue producing

and support department is responsible for the management and

reporting of operational risks and the implementation of the

Operational Risk Management Policy and processes within the

department with regular operational risk training provided to our

employees.

Operational risk events are mapped to risk categories used for

the consistent classification of risk data to support root cause

and trend analysis, which includes:

•Fraud and Theft

•Clients and Business Practices

•Market Conduct / Regulatory Compliance

•Business Disruption

•Technology

•Data Protection and Privacy

•Trading

•Transaction and Process Management

•People

•Cybersecurity

•Vendor Risk

Our Operational Risk Management Policy and operational risk

management framework, infrastructure, methodology, processes,

guidance and oversight of the operational risk processes are

centralized and consistent firmwide and, additionally, subject to

regional and legal entity operational risk governance, as required.

64		Jefferies Financial Group Inc.

We also maintain a Third-Party (“Vendor”) Risk Management

Policy and Framework to ensure adequate control and monitoring

over our critical third parties, which includes processes for

conducting periodic reviews covering areas of risk including

financial health, information security, privacy, business continuity

management, disaster recovery and operational risk of our

vendors.

Model Risk

Model risk refers to the risk of loss resulting from decisions that

are based on the output of models, due to errors or weaknesses

in the design and development, implementation or improper use

of models. We use quantitative models primarily to value certain

financial assets and liabilities and to monitor and manage our

risk. Model risk is a function of the model materiality, frequency

of use, complexity and uncertainty around inputs and

assumptions used in a given model. Robust model risk

management is a core part of our risk management approach

and is overseen through our risk governance structure and risk

management controls.

Legal and Compliance Risk

Legal and compliance risk includes the risk of noncompliance

with applicable legal and regulatory requirements. We are subject

to extensive regulation in the different jurisdictions in which we

conduct our business. We have various procedures addressing

issues such as regulatory capital requirements, sales and trading

practices, use of and safekeeping of customer funds, credit

granting, collection activities, anti-money laundering and record

keeping. These risks also reflect the potential impact that

changes in local and international laws and tax statutes have on

the economics and viability of current or future transactions. In

an effort to mitigate these risks, we continuously review new and

pending regulations and legislation and participate in various

industry interest groups. We also maintain an anonymous hotline

for employees or others to report suspected inappropriate

actions by us or by our employees or agents.

New Business Risk

New business risk refers to the risks of entering into a new line of

business or offering a new product. By entering a new line of

business or offering a new product, we may face risks that we are

unaccustomed to dealing with and may increase the magnitude

of the risks we currently face. The New Business Committee

reviews proposals for new businesses and new products to

determine if we are prepared to handle the additional or

increased risks associated with entering into such activities.

Reputational Risk

We recognize that maintaining our reputation among clients,

investors, regulators and the general public is an important

aspect of minimizing legal and operational risks. Maintaining our

reputation depends on a large number of factors, including the

selection of our clients and the conduct of our business

activities. We seek to maintain our reputation by screening

potential clients and by conducting our business activities in

accordance with high ethical standards. Our reputation and

business activity can be affected by statements and actions of

third parties, even false or misleading statements by them. We

actively monitor public comment concerning us and are vigilant

in seeking to assure accurate information and perception

prevails.

Item 3. Quantitative and Qualitative Disclosures About Market

Risk

Quantitative and qualitative disclosures about market risk are set

forth under “Management’s Discussion and Analysis of Financial

Condition and Results of Operations —Risk Management” in

Part I, Item 2 of this Form 10-Q.

Item 4. Controls and Procedures

Our Management, under the direction of our Chief Executive

Officer and Chief Financial Officer, evaluated the effectiveness of

our disclosure controls and procedures as of February 28, 2026.

Based on that evaluation, our Chief Executive Officer and Chief

Financial Officer concluded that our disclosure controls and

procedures as of February 28, 2026 are functioning effectively to

provide reasonable assurance that the information required to be

disclosed by us in reports filed under the Securities Exchange Act

of 1934 is (i) recorded, processed, summarized and reported

within the time periods specified in the SEC’s rules and forms and

(ii) accumulated and communicated to our management,

including our Chief Executive Officer and Chief Financial Officer,

as appropriate, to allow timely decisions regarding disclosure. A

controls system cannot provide absolute assurance that the

objectives of the controls system are met, and no evaluation of

controls can provide absolute assurance that all control issues

and instances of fraud, if any, within a company have been

detected.

No change in our internal control over financial reporting

occurred during the quarter ended February 28, 2026 that has

materially affected, or is reasonably likely to materially affect, our

internal control over financial reporting.

February2026 Form 10-Q		65

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Many aspects of our business involve substantial risks of legal

and regulatory liability. In the normal course of business, we have

been named as defendants or co-defendants in lawsuits involving

primarily claims for damages. We are also involved in a number

of judicial and regulatory matters, including exams, investigations

and similar reviews, arising out of the conduct of our business.

Based on currently available information, we do not believe that

any matter will have a material adverse effect on our

consolidated financial statements.

In July 2024, we commenced litigation against the former

portfolio manager of 3ǀ5ǀ2 Capital ABS Master Fund LP (the

“Fund”) and a variety of individuals and entities (collectively, the

“defendants”), alleging that the defendants engaged in a

longstanding Ponzi scheme resulting in the misappropriation of

approximately $106 million from investors in the Fund and in

certain related accounts, including a separately managed

account held by the Company. In June 2025, we commenced

litigation against First Fed Bank alleging that it participated in and

aided and abetted the Ponzi scheme. The Company has

recognized a loss of $17.2 million in respect of our investment in

the Fund. We anticipate that this litigation, which will not be

resolved in the near term, will result in the recovery of some or all

of our losses but cannot, with any reliable accuracy, estimate

how much we will be able to recover, or the outcome of this

litigation, which may lead to additional proceedings.

On February 26, 2026, Eugena II Investment Holdings Limited and

Eugenia III Investment Holdings Limited, investors in Point Bonita

Capital Fund (Cayman) LP, filed a lawsuit against us in the

Supreme Court for the State of New York alleging that the

defendants have liability for approximately $18.4 million in losses

allegedly suffered in connection with investments in receivables

purchased from First Brands Group.

On March 6, 2026, Western Alliance Trust Company, N.A. and

Western Alliance Bank filed a lawsuit against the Company in the

Supreme Court for the State of New York alleging that the

Company is responsible, based on theories of veil piercing and

fraud, for $126 million in loan obligations incurred by special

purpose vehicles that purchased receivables from affiliates of

First Brands Group, LLC.

Item 1A. Risk Factors

Information regarding our risk factors appears in Item 1A. of our

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

2025. These risk factors describe some of the assumptions,

risks, uncertainties and other factors that could adversely affect

our business or that could otherwise result in changes that differ

materially from our expectations.

Item 2. Unregistered Sales of Equity Securities and Use of

Proceeds

(a) We did not have any unregistered sales of equity securities

during the three months ended February 28, 2026.

(c) Issuer Purchases of Equity Securities.

Purchases of our common shares during the three months ended

February 28, 2026:

DownloadSimilarLinkTag

$ in thousands, except share and per share amounts	(a) Total Number of Shares Purchased (1)	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
December 1, 2025 to December 31, 2025.................	406,618	$61.16	—	$250,000
January 1, 2026 to January 31, 2026.....................	457,264	$62.05	450,000	$222,077
February 1, 2026 to February 28, 2026....................	2,132,262	$56.78	2,048,000	$106,159
Total...........................................	2,996,144	$58.18	2,498,000

(1)An aggregate 498,144 shares repurchased other than as part of our publicly

announced Board authorized repurchase program. We repurchased securities in

connection with our share compensation plans which allow participants to satisfy

certain tax liabilities arising from the vesting of restricted shares and the distribution

of restricted share units with shares.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the three months ended February 28, 2026, no directors or

executive officers entered into, modified or terminated, contracts,

instructions or written plans for the sale or purchase of the

Company’s securities that were intended to satisfy the

affirmative defense conditions of Rule 10b5-1.

Item 6. Exhibits

Exhibit No.	Description
3.1	Restated Certificate of Incorporation of Jefferies Financial Group Inc. is incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on March 31, 2026. *
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
101	Interactive Data Files pursuant to Rule 405 of Regulation S-T, formatted in Inline Extensible Business Reporting Language (iXBRL).
104	Cover page interactive data file pursuant to Rule 406 of Regulation S-T, formatted in iXBRL (included in exhibit 101)
*	Incorporated by reference.
**	Furnished herewith pursuant to item 601(b) (32) of Regulation S-K.

66		Jefferies Financial Group Inc.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the

Securities Exchange Act of 1934, the registrant has duly caused

this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

Jefferies Financial Group Inc.

/s/ MATT LARSON

Matt Larson

Executive Vice President and Chief Financial Officer

Dated: April 7, 2026