Financial Statement Offsetting

In connection with Jefferies Group's derivative activities and securities financing activities, Jefferies Group may enter into master netting agreements and collateral arrangements with counterparties to manage its exposure to credit risk. Generally, transactions are executed under standard industry agreements, including, but not limited to: derivative transactions – ISDA master netting agreements; master securities lending agreements (securities lending transactions); and master repurchase agreements (repurchase transactions).

The following table provides information regarding derivative contracts, repurchase agreements and securities borrowing and lending arrangements that are recognized in the Consolidated Statements of Financial Condition and (1) the extent to which, under enforceable master netting arrangements, such balances are presented net in the Consolidated Statements of Financial Condition as appropriate under GAAP and (2) the extent to which other rights of setoff associated with these arrangements exist and could have an effect on our consolidated financial position.



(In thousands)	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 at February 28, 2019
Derivative contracts	$	2,508,271	$	(2,296,080	)	$	212,191	$	—		$	—		$	212,191
Securities borrowing arrangements	$	7,231,073	$	—		$	7,231,073	$	(529,874	)	$	(1,171,891	)	$	5,529,308
Reverse repurchase agreements	$	15,852,250	$	(12,355,680	)	$	3,496,570	$	(328,449	)	$	(3,137,324	)	$	30,797

Liabilities at February 28, 2019
Derivative contracts	$	2,746,461	$	(2,383,752	)	$	362,709	$	—		$	—		$	362,709
Securities lending arrangements	$	2,234,700	$	—		$	2,234,700	$	(529,874	)	$	(1,681,346	)	$	23,480
Repurchase agreements	$	21,662,963	$	(12,355,680	)	$	9,307,283	$	(328,449	)	$	(8,097,893	)	$	880,941

Assets at November 30, 2018
Derivative contracts	$	2,580,706	$	(2,413,931	)	$	166,775	$	—		$	—		$	166,775
Securities borrowing arrangements	$	6,538,212	$	—		$	6,538,212	$	(468,778	)	$	(1,193,986	)	$	4,875,448
Reverse repurchase agreements	$	11,336,175	$	(8,550,417	)	$	2,785,758	$	(609,225	)	$	(2,126,730	)	$	49,803

Liabilities at November 30, 2018
Derivative contracts	$	3,640,703	$	(2,513,050	)	$	1,127,653	$	—		$	—		$	1,127,653
Securities lending arrangements	$	1,838,688	$	—		$	1,838,688	$	(468,778	)	$	(1,343,704	)	$	26,206
Repurchase agreements	$	17,193,486	$	(8,550,417	)	$	8,643,069	$	(609,225	)	$	(7,070,967	)	$	962,877

(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 the balance sheet because other netting provisions of GAAP are not met. Further, for derivative assets and liabilities, amounts netted include cash collateral paid or received.


(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)

At February 28, 2019, amounts include $5,495.4 million of securities borrowing arrangements, for which Jefferies Group has received securities collateral of $5,338.4 million, and $848.7 million of repurchase agreements, for which Jefferies Group has pledged securities collateral of $869.3 million, which are subject to master netting agreements, but Jefferies Group has not determined the agreements to be legally enforceable. At November 30, 2018, amounts include $4,825.7 million of securities borrowing arrangements, for which Jefferies Group has received securities collateral of $4,711.7 million, and $931.7 million of repurchase agreements, for which Jefferies Group has pledged securities collateral of $963.6 million, which are subject to master netting agreements, but Jefferies Group has not determined the agreements to be legally enforceable.