Fair Value Disclosures (Tables)

3 Months Ended

Feb. 28, 2023

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis

The following is a summary of our financial assets and liabilities that are accounted for at fair value on a recurring basis, excluding Investments at fair value based on net asset value (“NAV”) of $1.26 billion and $1.29 billion at February 28, 2023 and November 30, 2022, respectively, by level within the fair value hierarchy (in thousands):

	February 28, 2023
	Level 1		Level 2		Level 3		Counterparty  and Cash Collateral Netting (1)		Total
Assets:
Financial instruments owned:
Corporate equity securities	$	3,575,362	$	99,227	$	261,634	$	—	$	3,936,223
Corporate debt securities	—		4,499,406		41,793		—		4,541,199
Collateralized debt obligations and collateralized loan obligations	—		191,584		72,438		—		264,022
U.S. government and federal agency securities	4,828,607		33,667		—		—		4,862,274
Municipal securities	—		286,611		—		—		286,611
Sovereign obligations	750,488		959,837		—		—		1,710,325
Residential mortgage-backed securities	—		1,556,712		23,987		—		1,580,699
Commercial mortgage-backed securities	—		353,227		486		—		353,713
Other asset-backed securities	—		371,821		100,428		—		472,249
Loans and other receivables	—		1,082,976		148,673		—		1,231,649
Derivatives	1,698		2,551,146		11,898		(2,140,103)		424,639
Investments at fair value	—		4,617		157,863		—		162,480
Total financial instruments owned, excluding Investments at fair value based on NAV	$	9,156,155	$	11,990,831	$	819,200	$	(2,140,103)	$	19,826,083
Securities received as collateral	$	67,380	$	—	$	—	$	—	$	67,380
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	2,117,652	$	19,021	$	628	$	—	$	2,137,301
Corporate debt securities	—		2,934,248		285		—		2,934,533
U.S. government and federal agency securities	2,916,046		—		—		—		2,916,046
Sovereign obligations	806,905		666,210		—		—		1,473,115
Residential mortgage-backed securities	—		78		—		—		78
Commercial mortgage-backed securities	—		17		525		—		542
Loans	—		118,074		3,045		—		121,119
Derivatives	68		3,082,153		99,229		(1,726,088)		1,455,362
Total financial instruments sold, not yet purchased	$	5,840,671	$	6,819,801	$	103,712	$	(1,726,088)	$	11,038,096
Other secured financings	$	—	$	—	$	1,712	$	—	$	1,712
Obligation to return securities received as collateral	67,380		—		—		—		67,380
Long-term debt	—		926,739		683,698		—		1,610,437

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

	November 30, 2022
	Level 1		Level 2		Level 3		Counterparty  and Cash  Collateral Netting (1)		Total
Assets:
Financial instruments owned:
Corporate equity securities	$	3,117,327	$	140,157	$	240,347	$	—	$	3,497,831
Corporate debt securities	—		3,972,153		30,232		—		4,002,385
Collateralized debt obligations and collateralized loan obligations	—		71,640		55,824		—		127,464
U.S. government and federal agency securities	3,442,484		15,111		—		—		3,457,595
Municipal securities	—		574,903		—		—		574,903
Sovereign obligations	896,805		849,558		—		—		1,746,363
Residential mortgage-backed securities	—		1,314,199		27,617		—		1,341,816
Commercial mortgage-backed securities	—		442,471		839		—		443,310
Other asset-backed securities	—		333,164		94,677		—		427,841
Loans and other receivables	—		1,069,041		168,875		—		1,237,916
Derivatives	3,437		3,427,921		11,052		(3,093,244)		349,166
Investments at fair value	—		3,750		161,992		—		165,742
Total financial instruments owned, excluding Investments at fair value based on NAV	$	7,460,053	$	12,214,068	$	791,455	$	(3,093,244)	$	17,372,332
Securities received as collateral	$	100,362	$	—	$	—	$	—	$	100,362
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	2,097,436	$	48,931	$	750	$	—	$	2,147,117
Corporate debt securities	—		2,337,691		500		—		2,338,191
U.S. government and federal agency securities	3,223,637		—		—		—		3,223,637
Sovereign obligations	879,909		771,125		—		—		1,651,034
Commercial mortgage-backed securities	—		—		490		—		490
Loans	—		180,147		3,164		—		183,311
Derivatives	204		4,174,082		70,576		(2,732,165)		1,512,697
Total financial instruments sold, not yet purchased	$	6,201,186	$	7,511,976	$	75,480	$	(2,732,165)	$	11,056,477
Other secured financings	$	—	$	—	$	1,712	$	—	$	1,712
Obligation to return securities received as collateral	100,362		—		—		—		100,362
Long-term debt	—		922,705		661,123		—		1,583,828

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

Investments Measured at Fair Value Based on Net Asset Value Per Share

The following tables present information about our investments in entities that have the characteristics of an investment company (in thousands):

	February 28, 2023
	Fair Value (1)		Unfunded Commitments
Equity Long/Short Hedge Funds (2)	$	460,061	$	—
Equity Funds (3)	47,218		27,598
Commodity Funds (4)	22,894		—
Multi-asset Funds (5)	349,719		20,000
Other Funds (6)	377,035		145,388
Total	$	1,256,927	$	192,986

	November 30, 2022
	Fair Value (1)		Unfunded Commitments
Equity Long/Short Hedge Funds (2)	$	441,229	$	—
Equity Funds (3)	73,176		36,861
Commodity Funds (4)	24,283		—
Multi-asset Funds (5)	401,655		—
Other Funds (6)	353,621		53,994
Total	$	1,293,964	$	90,855

(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. At February 28, 2023 and November 30, 2022, approximately 56% and 58%, respectively, are redeemable quarterly with 90 days prior written notice and approximately 6% and 6%, respectively, are redeemable quarterly with 60 days prior written notice. The remaining balance at February 28, 2023 and November 30, 2022 cannot be redeemed because these investments include restrictions that do not allow for redemption before November 30, 2023 or August 31, 2025.

(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 twelve years.

(4)Includes investments in a hedge fund that invests, long and short, primarily in commodities. These investments are redeemable quarterly with 60 days prior written notice.

(5)Includes investments in hedge funds that invest, long and short, primarily in multi-asset securities in domestic and international markets in both the public and private sectors. At February 28, 2023 and November 30, 2022, investments representing approximately 78% and 78%, respectively, of the fair value of investments are redeemable monthly with 60 days prior written notice. At February 28, 2023 and November 30, 2022, approximately 13% and 15%, respectively, of the fair value of investments are redeemable quarterly with 90 days prior written notice.

(6)Primarily includes investments in a fund that invests in short-term trade receivables and payables that are expected to generally be outstanding between 90 to 120 days and short-term credit instruments, as well as investments in a fund that invests, long and short, in distressed and special situations credit strategies across sectors and asset types. Investments in this category are primarily redeemable quarterly with 90 days prior written notice.

Summary of Changes in Fair Value of Financial Assets and Liabilities Classified as Level 3

The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended February 28, 2023 (in thousands):

	Three Months Ended February 28, 2023
	Balance at November 30, 2022		Total gains/losses (realized and unrealized) (1)		Purchases		Sales		Settlements		Issuances		Net transfers into/ (out of) Level 3		Balance at February 28, 2023		For instruments still held at  February 28, 2023, changes in unrealized gains (losses) included in:
																	Earnings (1)		Other comprehensive income  (loss) (1)
Assets:
Financial instruments owned:
Corporate equity securities	$	240,347	$	17,688	$	—	$	(297)	$	—	$	—	$	3,896	$	261,634	$	17,648	$	—
Corporate debt securities	30,232		(1,715)		3,147		(7,305)		(200)		—		17,634		41,793		(1,834)		—
CDOs and CLOs	55,824		4,810		36,441		(15,666)		(8,971)		—		—		72,438		(2,985)		—
RMBS	27,617		(3,605)		—		—		(25)		—		—		23,987		(2,868)		—
CMBS	839		(353)		—		—		—		—		—		486		(356)		—
Other ABS	94,677		(2,940)		13,740		—		(5,959)		—		910		100,428		(1,716)		—
Loans and other receivables	168,875		446		3,267		(10,160)		(8)		—		(13,747)		148,673		38		—
Investments at fair value	161,992		(2,636)		5,637		(2,420)		(4,710)		—		—		157,863		(2,636)		—
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	750	$	(135)	$	—	$	13	$	—	$	—	$	—	$	628	$	135	$	—
Corporate debt securities	500		(28)		(187)		—		—		—		—		285		28		—
CMBS	490		—		—		35		—		—		—		525		525		—
Loans	3,164		120		(211)		—		—		—		(28)		3,045		(199)		—
Net derivatives (2)	59,524		9,713		—		127		(537)		—		18,504		87,331		(10,352)		—
Other secured financings	1,712		—		—		—		—		—		—		1,712		—		—
Long-term debt	661,123		19,877		—		—		—		203		2,495		683,698		15,593		(35,470)

(1)Realized and unrealized gains/losses are primarily reported in Principal transactions revenues in our Consolidated Statements of Earnings. Changes in instrument-specific credit risk related to structured notes within Long-term debt are included in our Consolidated Statement of Comprehensive Income, net of tax.

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

The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended February 28, 2022 (in thousands):

	Three Months Ended February 28, 2022
	Balance at November 30, 2021		Total gains/losses (realized and unrealized) (1)		Purchases		Sales		Settlements		Issuances		Net transfers into/ (out of) Level 3		Balance at February 28, 2022		For instruments still held at February 28, 2022, changes in unrealized gains (losses) included in:
																	Earnings (1)		Other comprehensive income  (loss) (1)
Assets:
Financial instruments owned:
Corporate equity securities	$	118,489	$	(6,538)	$	2,079	$	(706)	$	(651)	$	—	$	23,729	$	136,402	$	(7,297)	$	—
Corporate debt securities	11,803		(1,176)		118,970		(103,602)		(9)		—		16,372		42,358		(1,929)		—
CDOs and CLOs	31,946		(671)		13,523		(7,740)		(1,643)		—		9,804		45,219		(906)		—
RMBS	1,477		(69)		—		(187)		(35)		—		—		1,186		(44)		—
CMBS	2,333		1,177		—		—		—		—		222		3,732		1,655		—
Other ABS	93,524		2,033		11,588		(14,485)		(14,269)		—		(16,009)		62,382		(3,661)		—
Loans and other receivables	178,417		(3,707)		10,554		(13,078)		—		—		11,904		184,090		(2,956)		—
Investments at fair value	154,373		32,034		14,249		(6,826)		(615)		—		(23,407)		169,808		28,557		—
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	4,635	$	(3,447)	$	(812)	$	5,050	$	—	$	—	$	240	$	5,666	$	3,447	$	—
Corporate debt securities	482		(8,866)		(63,714)		66,976		—		—		12,430		7,308		5,210		—
CMBS	210		—		—		105		—		—		—		315		—		—
Loans	9,925		372		(4,637)		—		—		—		—		5,660		(781)		—
Net derivatives (2)	67,769		(54,836)		—		—		—		35,069		(232)		47,770		53,352		—
Other secured financings	25,905		—		—		—		—		6,472		—		32,377		—		—
Long-term debt	881,732		(92,871)		—		—		—		23,753		(18,154)		794,460		60,739		32,132

(1)Realized and unrealized gains/losses are primarily reported in Principal transactions revenues in our Consolidated Statements of Earnings. Changes in instrument-specific credit risk related to structured notes within Long-term debt are included in our Consolidated Statements of Comprehensive Income, net of tax.

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

Quantitative Information about 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 with 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.

February 28, 2023
Financial Instruments Owned:	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input(s)	Input / Range				Weighted Average
Corporate equity securities	$	261,634
Non-exchange-traded securities			Market approach	Price	$0		-	$325	$42
Corporate debt securities	$	41,793	Market approach	EBITDA multiple	4.2				—
				Price	$1		-	$47	$33
			Scenario analysis	Estimated recovery percentage	5	%	-	64%	62%
CDOs and CLOs	$	72,438	Discounted cash flows	Constant prepayment rate	20%				—
				Constant default rate	2%				—
				Loss severity	30%				—
				Discount rate/yield	15	%	-	22%	19%
			Market approach	Price	$50		-	$100	$86
			Scenario analysis	Estimated recovery percentage	69%				—
CMBS	$	486	Scenario analysis	Estimated recovery percentage	28%				—
Other ABS	$	84,763	Discounted cash flows	Discount rate/yield	7	%	-	20%	17%
				Cumulative loss rate	6	%	-	27%	19%
				Duration (years)	1.0		-	2.1	1.7
			Market approach	Price	$100				—
Loans and other receivables	$	148,673	Market approach	Price	$1		-	$147	$85
			Scenario analysis	Estimated recovery percentage	0	%	-	73%	26%
Investments at fair value	$	154,709
Private equity securities			Market approach	Price	$1		-	$14,919	$534
				Discount rate/yield	27%				—
				Revenue	$30,425,783				—
Financial Instruments Sold, Not Yet Purchased:
Corporate debt securities	$	285	Scenario analysis	Estimated recovery percentage	7%				—
Derivatives	$	94,624
Equity options			Volatility benchmarking	Volatility	27	%	-	78%	56%
Other secured financings	$	1,712	Scenario analysis	Estimated recovery percentage	9	%	-	30%	23%
Long-term debt
Structured notes	$	683,698	Market approach	Price	$53		-	$97	$75
				Price	€55		-	€101	€80

November 30, 2022
Financial Instruments Owned:	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input(s)	Input / Range				Weighted Average
Corporate equity securities	$	240,347
Non-exchange-traded securities			Market approach	Price	$0		-	$325	$43
Corporate debt securities	$	30,232	Market approach	Price	$48		-	$82	$65
				EBITDA multiple	4.2				—
			Scenario analysis	Estimated recovery percentage	7%				—
CDOs and CLOs	$	55,824	Discounted cash flows	Constant prepayment rate	20%				—
				Constant default rate	2	%	-	3%	2%
				Loss severity	30	%	-	40%	32%
				Discount rate/yield	18	%	-	23%	22%
			Market approach	Price	$67		-	$102	$89
			Scenario analysis	Estimated recovery percentage	69%				—
CMBS	$	839	Scenario analysis	Estimated recovery percentage	45%				—
Other ABS	$	55,858	Discounted cash flows	Discount rate/yield	6	%	-	20%	17%
				Cumulative loss rate	8	%	-	22%	19%
				Duration (years)	0.8		-	1.6	1.2
Loans and other receivables	$	168,875	Market approach	Price	$1		-	$150	$82
			Scenario analysis	Estimated recovery percentage	6	%	-	78%	30%
Investments at fair value	$	159,304
Private equity securities			Market approach	Price	$0		-	$14,919	$604
				Discount rate/yield	23%				—
				Revenue	$30,194,338				—
Financial Instruments Sold, Not Yet Purchased:
Derivatives	$	65,841
Equity options			Volatility benchmarking	Volatility	26	%	-	75%	51%
Other secured financings	$	1,712	Scenario analysis	Estimated recovery percentage	9	%	-	30%	23%
Long-term debt	$	661,123
Structured notes			Market approach	Price	$51		-	$97	$64
				Price	€59		-	€99	€77

Summary of Gains (Losses) Due to Changes in Instrument Specific Credit Risk and Summary of Contractual Principal Exceeds Fair Value for Loans and Other Receivables

The following is a summary of gains (losses) due to changes in fair value related to instrument-specific credit risk on loans, other receivables and debt instruments and gains (losses) due to other changes in fair value on Long-term debt measured at fair value under the fair value option (in thousands):

	Three Months Ended  February 28,
	2023		2022
Financial instruments owned:
Loans and other receivables	$	7,454	$	(2,287)
Financial instruments sold, not yet purchased:
Loans	$	—	$	1,548
Long-term debt:
Changes in instrument-specific credit risk (1)	$	(71,660)	$	51,248
Other changes in fair value (2)	45,825		94,551

(1)Changes in fair value of structured notes related to instrument-specific credit risk are included in our Consolidated Statements of Comprehensive Income, net of tax.

(2)Other changes in fair value are included in Principal transactions revenues in our Consolidated Statements of Earnings.

The following is a summary of the amounts by which contractual principal is greater than (less than) fair value for loans and other receivables, Other secured financings and Long-term debt measured at fair value under the fair value option (in thousands):

	February 28, 2023		November 30, 2022
Financial instruments owned:
Loans and other receivables (1)	$	2,283,130	$	2,144,632
Loans and other receivables on nonaccrual status and/or 90 days or greater past due (1) (2)	373,852		181,766
Long-term debt	347,104		369,990
Other secured financings	3,563		3,563

(1)Interest income is recognized separately from other changes in fair value and is included in Interest revenues in our Consolidated Statements of Earnings.

(2)Amounts include loans and other receivables 90 days or greater past due by which contractual principal exceeds fair value of $70.7 million and $83.4 million at February 28, 2023 and November 30, 2022, respectively.