Jefferies Financial Group Inc.JEF
Jefferies Financial Group Inc. Income Taxes Disclosure
Note 19. Income Taxes
Provision for income tax expense components:
Year Ended November 30, | |||
$ in thousands | 2025 | 2024 | 2023 |
Current: ............................................. | |||
U.S. Federal ...................................... | $(1,397) | $138,259 | $14,600 |
U.S. state and local ......................... | (28,466) | 75,977 | 14,896 |
Foreign .............................................. | 104,496 | 83,089 | 51,923 |
Total current .................................... | 74,633 | 297,325 | 81,419 |
Deferred: | |||
U.S. Federal ...................................... | 95,071 | (9,453) | 10,380 |
U.S. state and local ......................... | 18,925 | (2,912) | 3,112 |
Foreign .............................................. | (4,059) | 8,234 | (3,030) |
Total deferred .................................. | 109,937 | (4,131) | 10,462 |
Total income tax expense from continuing operations .................... | $184,570 | $293,194 | $91,881 |
U.S. and non-U.S. components of earnings from continuing
operations before income tax expense:
Year Ended November 30, | |||
$ in thousands | 2025 | 2024 | 2023 |
U.S. .................................................... | $541,510 | $703,981 | $177,595 |
Non-U.S. (1) ...................................... | 329,479 | 301,565 | 176,674 |
Earnings from continuing operations before income tax expense ............................................ | $870,989 | $1,005,546 | $354,269 |
(1)For purposes of this table, non-U.S. income is defined as income generated
from operations located outside the U.S.
Income tax expense differed from the amounts computed by
applying the U.S. Federal statutory income tax rate of 21.0% to
earnings from continuing operations before income taxes as a
result of the following:
Year Ended November 30, | ||||||
2025 | 2024 | 2023 | ||||
$ in thousands | Amount | Percent | Amount | Percent | Amount | Percent |
Computed expected federal income taxes ........... | $182,908 | 21.0% | $211,165 | 21.0% | $74,396 | 21.0% |
Increase (decrease) in income taxes resulting from: | ||||||
State and local income taxes, net of Federal income tax benefit ................ | 28,469 | 3.3 | 47,642 | 4.8 | 17,071 | 4.8 |
International operations (including foreign rate differential) ...... | 19,003 | 2.2 | 19,567 | 1.9 | 7,306 | 2.1 |
Foreign tax credits, net ............................. | (19,231) | (2.2) | (10,324) | (1.0) | (4,504) | (1.3) |
Non-deductible executive compensation .......... | 12,329 | 1.4 | 14,481 | 1.5 | 11,664 | 3.3 |
Transferrable investment tax credits ....................... | (9,761) | (1.1) | — | — | — | — |
Employee share- based awards .......... | (3,630) | (0.4) | (12,044) | (1.2) | (16,136) | (4.6) |
Change in unrecognized tax benefits related to prior years ............... | (61,147) | (7.0) | (15,696) | (1.6) | (25,561) | (7.2) |
Interest on unrecognized tax benefits ..................... | 5,926 | 0.7 | 26,257 | 2.6 | 18,988 | 5.4 |
Revaluation of deferred tax asset (1) .............................. | 17,276 | 2.0 | (1,502) | (0.1) | (2,814) | (0.8) |
Interest on amended tax returns ...................... | (10,841) | (1.2) | — | — | — | — |
Other, net (1) ............ | 23,269 | 2.5 | 13,648 | 1.3 | 11,471 | 3.2 |
Total income tax expense from continuing operations ................ | $184,570 | 21.2% | $293,194 | 29.2% | $91,881 | 25.9% |
(1)Prior period amounts have been revised to conform with the current period
presentation.
Reconciliation of gross unrecognized tax benefits:
Year Ended November 30, | |||
$ in thousands | 2025 | 2024 | 2023 |
Balance at beginning of period ............. | $346,429 | $332,323 | $349,955 |
Increases based on tax positions related to the current period .................. | 8,340 | 29,454 | 1,555 |
Increases based on tax positions related to prior periods ........................... | 4,978 | 8,022 | 10,134 |
Decreases based on tax positions related to prior periods ........................... | (115,339) | (23,370) | (28,622) |
Decreases related to settlements with taxing authorities .................................... | (2,771) | — | (699) |
Balance at end of period ........................ | $241,637 | $346,429 | $332,323 |
During 2025, decreases in unrecognized tax benefits based on
tax positions related to prior periods are primarily attributable to
the resolution of certain state and local tax matters, in addition to
expiration of state and local statutes of limitation. Decreases for
2024 and 2023 are primarily attributable to expiration of state
and local statutes of limitation.
The total amount of unrecognized tax benefits that, if recognized,
would favorably affect the effective tax rate was $190.9 million
and $273.8 million (net of Federal benefit) at November 30, 2025
and 2024, respectively.
We recognize interest accrued related to unrecognized tax
benefits and penalties, if any, as components of Income tax
expense. Net interest expense related to unrecognized tax
benefits was $1.2 million, $34.6 million and $25.5 million for the
years ended November 30, 2025, 2024 and 2023, respectively. At
November 30, 2025, 2024 and 2023, we had interest accrued of
approximately $177.9 million, $176.6 million and $142.1 million,
respectively, included in Accrued expenses and other liabilities.
No material penalties were accrued for the years ended
November 30, 2025, 2024 and 2023.
Cumulative tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and liabilities:
November 30, | ||
$ in thousands | 2025 | 2024 |
Deferred tax assets: | ||
Net operating loss carryover ...................................... | $273,096 | $254,142 |
Compensation and benefits ....................................... | 214,845 | 221,395 |
Accrued expenses and other ...................................... | 239,844 | 195,216 |
Operating lease liabilities ............................................ | 132,709 | 150,665 |
Capital loss carryforward ............................................ | 84,643 | — |
Long-term debt ............................................................. | 73,834 | 83,680 |
Investments in associated companies ..................... | — | 73,211 |
Sub-total ........................................................................ | 1,018,971 | 978,309 |
Valuation allowance .................................................... | (261,804) | (240,231) |
Total deferred tax assets ........................................... | 757,167 | 738,078 |
Deferred tax liabilities: | ||
Operating lease right-of-use assets .......................... | 117,421 | 132,867 |
Investments in associated companies ..................... | 67,876 | — |
Amortization of intangibles ........................................ | 49,869 | 55,067 |
Other .............................................................................. | 62,949 | 52,554 |
Total deferred tax liabilities ....................................... | 298,115 | 240,488 |
Net deferred tax asset, included in Other assets ... | $459,052 | $497,590 |
The valuation allowance represents the portion of our deferred
tax assets for which it is more likely than not that the benefit of
such items will not be realized. We believe that the realization of
the net deferred tax asset of $459.1 million at November 30,
2025 is more likely than not based on expectations of future
taxable income in the jurisdictions in which we operate.
As of November 30, 2025, we have capital loss carryforwards of
$84.6 million which, if unutilized, will expire in 2031.
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. It is reasonably possible that, within the next
twelve months, statutes of limitation will expire which would have
the effect of reducing the balance of unrecognized tax benefits
by $36.4 million.
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 ....................................................................................... | 2022 |
Germany ................................................................................................... | 2019 |
Hong Kong ............................................................................................... | 2019 |
India ........................................................................................................... | 2011 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 28, 2026 | Showing above |
| 2024 | Jan 28, 2025 | |
| 2023 | Jan 26, 2024 | |
| 2022 | Jan 27, 2023 | |
| 2021 | Jan 28, 2022 | |
| 2020 | Jan 29, 2021 | |
| 2019 | Jan 29, 2020 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 19, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.