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.

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

Jefferies Group LLC is the largest independent U.S.-headquartered global full service, integrated investment banking and securities firm. The accompanying Consolidated Financial Statements represent the accounts of Jefferies Group LLC and all our subsidiaries (together “we” or “us”). The subsidiaries of Jefferies Group LLC include Jefferies LLC, Jefferies International Limited, Jefferies GmbH, Jefferies Hong Kong Limited, Jefferies Financial Services, Inc. (“JFSI”), Jefferies Funding LLC, Jefferies Leveraged Credit Products, LLC and all other entities in which we have a controlling financial interest or are the primary beneficiary.

Jefferies Group LLC is a direct wholly-owned subsidiary of publicly traded Jefferies Financial Group Inc. (“Jefferies”). Jefferies does not guarantee any of our outstanding debt securities. Jefferies Group LLC is a Securities and Exchange Commission (“SEC”) reporting company, filing annual, quarterly and periodic financial reports. Richard Handler, our Chief Executive Officer and Chairman, is the Chief Executive Officer of Jefferies, as well as a Director of Jefferies. Brian P. Friedman, our Chairman of the Executive Committee, is Jefferies’ President and a Director of Jefferies.

We operate in 2 reportable business segments: (1) Investment Banking and Capital Markets and (2) Asset Management. For further information on our reportable business segments, refer to Note 18,17, Segment Reporting.

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, 2020.2021. Certain footnote disclosures included in our Annual Report on Form 10-K for the year ended November 30, 20202021 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, the ability to realize certain deferred tax assets and the recognition and measurement of uncertain tax positions. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates.

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 (loss) 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.

For a detailed discussion about the Company’s significant accounting policies, see 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, 2020.2021.

During the six months ended May 31, 2021,2022, there were no significant changes made to the Company’s significant accounting policies.policies except as follows.

On December 1, 20202021, Jefferies transferred its investment in Foursight, a subsidiary of Jefferies, to us. Foursight is engaged primarily in automobile lending. At May 31, 2022, we had automobile loans, including accrued interest and appliedrelated fees, of $872.5 million, which are classified as either held for investment or held for sale depending on the intent to hold the underlying collateral and which are collateralized by a modified retrospective approach through a cumulative-effect adjustment to retained earnings upon adoption. At transition on December 1, 2020, the new accounting guidance's adoption resulted in a decreasesecurity interest in the provisionvehicles’ titles. Automobile loans held for investment consisted of approximately 17.2% with credit scores 680 and above, 47.2% with scores between 620 and 679 and 35.6% with scores below 620 at May 31, 2022. These loans are included in Receivables—fees, interest and other in our Consolidated Statements of Financial Condition and are not carried at fair value. The automobile loans have a fair value of $906.2 million at May 31, 2022, which would be classified as Level 3 in the fair value hierarchy.

Provision for credit losses of $3.6 million with a corresponding increaseare charged to income in retained earnings of $2.7 million, net of tax.amounts sufficient to maintain an allowance for credit losses inherent in automobile loans held for investment. The decrease was attributable to applying a revised provisioning methodologyallowance for credit losses is established systematically by management based on historical loss experience for our investment banking fee receivables. The impact upon adoption for our secured financing receivables (reverse repurchases agreements, securities borrowing arrangements, and margin loans) was immaterial becausethe determination of the contractual collateral maintenance provisions that require that the counterparty continually adjust the amount of collateralization securingcredit losses inherent in the credit exposure on these contracts. Forautomobile loans held for investment as of the remaining financial instruments within the guidance's scope, thereporting date. All automobile loans held for investment are collectively evaluated for impairment. Management's estimate of expected credit losses were also determined to be immaterial consideringis based on an evaluation of relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the counterparty's credit quality, an insignificant history of credit losses, or the short-term naturefuture collectability of the credit exposures. The updated accounting policyreported amounts. We use static pool modeling techniques to determine the allowance for estimating creditloan losses on financial assets measured at amortized cost as a resultexpected over the remaining life of this adoptionthe loans, which is outlined below.supplemented by management judgment. Expected losses are estimated for groups of accounts aggregated by monthly vintage.

A rollforward of the allowance for credit losses if any, is limitedrelated to the difference between the fair value of the collateral at the reporting date and the amortized cost basis of the financial assets. Duringour automobile loans for the three and six months ended May 31, 2022 is as follows (in thousands):

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 $900.2 million$1.31 billion and $956.0 million$1.01 billion at May 31, 20212022 and November 30, 2020,2021, respectively, by level within the fair value hierarchy (in thousands):