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.

Consolidated VIEs:


	May 31, 2026 (1)
$ in millions	Secured Funding Vehicles		Other
Cash	$	0.1	$	8.2

Financial instruments owned	2.7		185.7
Securities purchased under agreements to resell (2)	2,885.3		—
Receivables from brokers (3)	—		66.5
Other receivables	0.4		3.1
Other assets (4)	—		85.0
Total assets	$	2,888.5	$	348.5
Financial instruments sold, not yet purchased	$	—	$	107.9
Other secured financings (5)	2,881.0		28.9


Other liabilities (6)	6.5		90.7
Long-term debt	—		70.2
Total liabilities	$	2,887.5	$	297.7


	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 May 31, 2026 and November 30, 2025, respectively, with related consolidated entities, which are eliminated in consolidation.

(4)Includes $3.0 million and $3.4 million at May 31, 2026 and November 30, 2025, respectively, with related consolidated entities, which are eliminated in consolidation.

(5)Includes $603.2 million and $780.5 million at May 31, 2026 and November 30, 2025, respectively, with related consolidated entities, which are eliminated in consolidation.

(6)Includes $89.3 million and $84.0 million at May 31, 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


	May 31, 2026
	Carrying Amount				Maximum Exposure to Loss		VIE Assets
$ in millions	Assets		Liabilities
CLOs	$	991.5	$	4.2	$	5,605.9	$	18,305.4
Asset-backed vehicles	1,299.1		—		1,611.8		8,980.8
Related party private equity vehicles	3.9		—		13.7		72.0
Other investment vehicles	1,613.5		—		1,833.6		82,166.8
Total	$	3,908.0	$	4.2	$	9,065.0	$	109,525.0


	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 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 May 31, 2026 and November 30, 2025, our remaining equity commitment in the JCP Entities was $8.8 million and $9.7 million, respectively. At May 31, 2026 and November 30, 2025, we also had remaining commitments of $0.3 million and $0.4 million, respectively, to a private equity fund managed by us for the benefit of our employees. The carrying value of our collective equity interests were $4.0 million and $3.4 million at May 31, 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 May 31, 2026 and November 30, 2025, our remaining equity commitment in various other investment vehicles was $205.6 million and $282.2 million,

respectively. The carrying value of our equity investments was $1.61 billion at $1.72 billion May 31, 2026 and November 30, 2025, respectively. Our exposure to loss is limited to the total of our carrying value and unfunded equity commitment. These investment vehicles have assets primarily consisting of private and public equity investments, debt instruments, trade and insurance claims, various oil and gas assets. Additionally, we hold an investment in an unconsolidated energy tax credit vehicle in the form of a limited partnership, which operates with the objective of generating a return derived from tax credits earned within the partnership. The proportional amortization method has been elected for this investment and the amortization of the investment and related income tax credits and other income tax benefits are recorded as a component of income tax expense.


$ in thousands			May 31, 2026
Carrying value (1)	$	33,462

$ in thousands			Three and Six Months Ended May 31, 2026
Income tax credits and other income tax benefits	$	30,828
Proportional amortization			(22,728)
Net benefits included in income tax expense			$	8,100

(1)Amounts presented within Other Assets in our Consolidated Statements of Financial Condition and Consolidated Statements of Cash Flows.

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 May 31, 2026 and November 30, 2025, we held $1.16 billion and $1.06 billion of agency mortgage-backed securities, respectively, and $156.6 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