Jefferies Reports Second Quarter 2014 Financial Results

Jefferies Group LLC today announced financial results for its fiscal second quarter 2014.

Highlights for the three months ended May 31, 2014:

• Net revenues of $723 million
• Net earnings of $61 million
• Investment banking net revenues of $331 million
• Trading net revenues of $395 million

Highlights for the six months ended May 31, 2014:

• Net revenues of $1,622 million
• Net earnings of $174 million
• Investment banking net revenues of $745 million
• Trading net revenues of $870 million

Richard B. Handler, Chairman and Chief Executive Officer of Jefferies, commented: “We are pleased to report quarterly results well-above those of the same quarter last year, due to an over 19% increase in our investment banking net revenues and an almost 7% increase in our overall trading net revenues. Our momentum has continued in investment banking and we are continuing to add to our team to capitalize further on our broad capabilities. Without the impact of marking to market certain equity block holdings, our equity and fixed income net revenues each declined about 5% in the most recent quarter compared to the same quarter last year. During the second quarter, clients have been cautious and generally less active in trading due to the unsettled markets, but we believe Jefferies’ results reflect gains in market share. Our industry and competitors are in the midst of significant changes. We believe our platform, strategy, business mix and unique culture will allow us to continue to provide a differentiated and value-added service to our clients.”

The attached financial tables should be read in connection with our Quarterly Report on Form 10-Q for the quarter ended February 28, 2014 and our Annual Report on Form 10-K for the year ended November 30, 2013.

Jefferies, the global investment banking firm focused on serving clients for over 50 years, is a leader in providing insight, expertise and execution to investors, companies and governments. The firm provides a full range of investment banking, sales, trading, research and strategy across the spectrum of equities, fixed income, foreign exchange, futures and commodities, as well as wealth management, in the Americas, Europe and Asia. Jefferies Group LLC is a wholly-owned subsidiary of Leucadia National Corporation (NYSE:LUK), a diversified holding company.

(A) VaR estimates the potential loss in value of our trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value at risk" in Part II, Item 7 "Management's Discussion and Analysis" in our Annual Report on Form 10-K for the year ended November 30, 2013.

JEFFERIES GROUP LLC AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS - FOOTNOTES

(1) Amounts pertaining to May 31, 2014 represent a preliminary estimate as of the date of this earnings release and may be revised in our Quarterly Report on Form 10-Q for the three months ended May 31, 2014.

(2) As of May 31, 2014, other sources of liquidity include high quality sovereign government securities and reverse repurchase agreements collateralized by U.S. government securities and other high quality sovereign government securities of $1,202 million, in aggregate, and $664 million, being the total of the estimated amount of additional secured financing that could be reasonably expected to be obtained from our financial instruments that are currently not pledged at reasonable financing haircuts and additional funds available under the committed senior secured revolving credit facility available for working capital needs of Jefferies Bache. The corresponding amounts included in other sources of liquidity as of May 31, 2013 were $1,221 million and $562 million, and as of February 28, 2013, were $1,132 million and $576 million, respectively.

(3) Tangible member's / common stockholders' equity (a non-GAAP financial measure) represents total member's / common stockholders' equity less goodwill and identifiable intangible assets. We believe that tangible member's / common stockholders' equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible member's / common stockholders' equity, making these ratios meaningful for investors.

(4) Level 3 financial instruments represent those financial instruments classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned.

(5) As of May 31, 2014 and 2013, total capital includes our long-term debt of $6,414 million and $6,088 million, respectively, and total equity. As of February 28, 2013, total capital includes our long term debt, mandatorily redeemable convertible preferred stock, mandatorily redeemable preferred interest of consolidated subsidiaries, in aggregate $5,936 million, and total equity. Long-term debt included in total capital is reduced by amounts outstanding under the revolving credit facility and the amount of debt maturing in less than one year, where applicable.

(6) Leverage ratio equals total assets divided by total equity.

(7) Adjusted leverage ratio (a non-GAAP financial measure) equals adjusted assets divided by tangible total equity, being total equity less goodwill and identifiable intangible assets. Adjusted assets (a non-GAAP financial measure) equals total assets less securities borrowed, securities purchased under agreements to resell, cash and securities segregated, goodwill and identifiable intangibles plus financial instruments sold, not yet purchased (net of derivative liabilities). As of May 31, 2014, May 31, 2013 and February 28, 2013 adjusted assets were $35,577 million, $31,648 million and $34,343 million, respectively. We believe that adjusted assets is a meaningful measure as it excludes certain assets that are considered of lower risk as they are generally self-financed by customer liabilities through our securities lending activities.

(8) Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and identifiable intangible assets divided by tangible member's / common stockholders' equity. The tangible gross leverage ratio is used by Rating Agencies in assessing our leverage ratio.

(9) Leverage ratio - excluding merger impacts (a non-GAAP financial measure) is calculated as follows:

(10) VaR estimates the potential loss in value of our trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value at risk" in Part II, Item 7 "Management's Discussion and Analysis" in our Annual Report on Form 10-K for the year ended November 30, 2013.