LUK Leucadia National Corp.

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.

JEFFERIES GROUP LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in Thousands) (Unaudited)           Successor Predecessor Quarter Ended Six Months Ended Quarter Ended Quarter Ended May 31, 2014 May 31, 2014 May 31, 2013 February 28, 2013   Revenues: Commissions $ 167,378 $ 329,441 $ 162,759 $ 146,240 Principal transactions 183,416 421,779 134,571 300,278 Investment banking 331,149 745,469 277,134 288,278

Asset management fees and investment income (loss) from managed funds

(3,101) 6,856 10,527 10,883 Interest income 283,540 532,808 258,665 249,277 Other revenues   8,404   31,473   26,245   27,004 Total revenues 970,786 2,067,826 869,901 1,021,960 Interest expense   247,794   445,806   211,463   203,416 Net revenues 722,992 1,622,020 658,438 818,544

Interest on mandatorily redeemable preferred interests of consolidated subsidiaries

  -   -   3,368   10,961

Net revenues, less interest on mandatorily redeemable preferred interests of consolidated subsidiaries

  722,992   1,622,020   655,070   807,583   Non-interest expenses: Compensation and benefits 404,876 912,775 373,880 474,217   Non-compensation expenses: Floor brokerage and clearing fees 54,020 103,533 48,902 46,155 Technology and communications 70,257 134,563 63,839 59,878 Occupancy and equipment rental 26,673 53,175 32,225 24,309 Business development 24,917 51,393 22,732 24,927 Professional services 25,345 50,164 29,519 24,135 Other   17,767   35,011   18,720   14,475 Total non-compensation expenses   218,979   427,839   215,937   193,879 Total non-interest expenses   623,855   1,340,614   589,817   668,096 Earnings before income taxes 99,137 281,406 65,253 139,487 Income tax expense   37,323   104,200   25,007   48,645 Net earnings 61,814 177,206 40,246 90,842 Net earnings attributable to noncontrolling interests   488   3,448   738   10,704 Net earnings attributable to Jefferies Group LLC/common stockholders $ 61,326 $ 173,758 $ 39,508 $ 80,138   JEFFERIES GROUP LLC AND SUBSIDIARIES SELECTED STATISTICAL INFORMATION (Amounts in Thousands, Except Other Data) (Unaudited)           Successor Predecessor Quarter Ended Six Months Ended Quarter Ended Quarter Ended May 31, 2014 May 31, 2014 May 31, 2013 February 28, 2013

Revenues by Source

Equities $ 177,238 $ 366,061 $ 141,590 $ 167,354 Fixed income   217,706     503,634     229,187     352,029   Total 394,944 869,695 370,777 519,383     Equity 83,726 178,464 53,564 61,380 Debt   147,000     320,038     133,714     140,672   Capital markets 230,726 498,502 187,278 202,052 Advisory   100,423     246,967     89,856     86,226   Investment banking 331,149 745,469 277,134 288,278  

Asset management fees and investment income (loss) from managed funds:

Asset management fees 4,927 14,373 11,332 11,083 Investment loss from managed funds   (8,028 )   (7,517 )   (805 )   (200 ) Total   (3,101 )   6,856     10,527     10,883   Net revenues   722,992     1,622,020     658,438     818,544   Interest on mandatorily redeemable preferred interests of consolidated subsidiaries   -     -     3,368     10,961   Net revenues, less mandatorily redeemable preferred interests of consolidated subsidiaries $ 722,992   $ 1,622,020   $ 655,070   $ 807,583    

Other Data

Number of trading days 63 124 64 60   Average firmwide VaR (in millions) (A) $ 14.94 $ 15.60 $ 8.77 $ 9.27 Average firmwide VaR excluding Knight Capital (in millions) (A) $ 8.63 $ 10.60 $ 5.77 $ 5.99 Average firmwide VaR excluding Knight Capital and Harbinger Group Inc. (in millions) (A) $ 7.97 $ 8.59 $ 5.77 $ 5.99  

(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 (Amounts in Millions, Except Where Noted) (Unaudited)           Successor Predecessor Quarter Ended Six Months Ended Quarter Ended Quarter Ended May 31, 2014 May 31, 2014 May 31, 2013 February 28, 2013  

Results:

Net earnings attributable to Jefferies Group LLC / common stockholders (in thousands) $ 61,326 $ 173,758 $ 39,508 $ 80,138 Pretax operating margin 13.7 % 17.3 % 10.0 % 17.3 % Effective tax rate 37.6 % 37.0 % 38.3 % 34.9 %  

Financial position:

Total assets (1) $ 43,610 $ 43,610 $ 38,938 $ 37,800 Average total assets for the period (1) $ 50,379 $ 49,749 $ 47,150 $ 45,418 Average total assets less goodwill and intangible assets for the period (1) $ 48,394 $ 47,764 $ 45,157 $ 45,039   Cash and cash equivalents (1) $ 3,958 $ 3,958 $ 3,403 $ 3,018 Cash and cash equivalents and other sources of liquidity (1) (2) $ 5,824 $ 5,824 $ 5,187 $ 4,726 Cash and cash equivalents and other sources of liquidity - % total assets (1) (2) 13.4 % 13.4 % 13.3 % 12.5 % Cash and cash equivalents and other sources of liquidity - % total assets less goodwill and intangible assets (1) (2) 14.0 % 14.0 % 14.0 % 12.6 %   Financial instruments owned (1) $ 17,144 $ 17,144 $ 15,270 $ 16,414 Goodwill and intangible assets (1) $ 1,984 $ 1,984 $ 1,982 $ 380   Total equity (including noncontrolling interests) $ 5,527 $ 5,527 $ 5,183 $ 3,688 Total member's / common stockholders' equity $ 5,496 $ 5,496 $ 5,147 $ 3,332 Tangible member's / common stockholders' equity (3) $ 3,512 $ 3,512 $ 3,165 $ 2,952  

Level 3 financial instruments:

Level 3 financial instruments owned (1) (4) $ 490 $ 490 $ 447 $ 505 Level 3 financial instruments owned - % total assets (1) 1.1 % 1.1 % 1.1 % 1.3 % Level 3 financial instruments owned - % total financial instruments owned (1) 2.9 % 2.9 % 2.9 % 3.1 % Level 3 financial instruments owned - % tangible member's / common stockholders' equity (1) 14.0 % 14.0 % 14.1 % 17.1 %  

Other data and financial ratios:

Total capital (1) (5) $ 11,941 $ 11,941 $ 11,271 $ 9,624 Leverage ratio (1) (6) 7.9 7.9 7.5 10.2 Adjusted leverage ratio (1) (7) 10.0 10.0 9.9 10.4 Tangible gross leverage ratio (1) (8) 11.9 11.9 11.7 12.7 Leverage ratio - excluding merger impacts (1) (9) 10.0 10.0 9.5 N/A   Number of trading days 63 124 64 60   Average firmwide VaR (10) $ 14.94 $ 15.60 $ 8.77 $ 9.27 Average firmwide VaR excluding Knight Capital (10) $ 8.63 $ 10.60 $ 5.77 $ 5.99 Average firmwide VaR excluding Knight Capital and Harbinger Group Inc. (10) $ 7.97 $ 8.59 $ 5.77 $ 5.99   Number of employees, at period end 3,785 3,785 3,785 3,841  

JEFFERIES GROUP LLC AND SUBSIDIARIESFINANCIAL 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:

      May 31,       May 31, $ millions 2014 2013 Total assets $ 43,610 $ 38,938 Goodwill and acquisition accounting fair value adjustments on the merger with Leucadia (1,957 ) (1,957 ) Net amortization to date on asset related purchase accounting adjustments   37     9   Total assets excluding the impact of the merger $ 41,690   $ 36,990     Total equity $ 5,527 $ 5,183 Equity arising from merger consideration (1,426 ) (1,426 ) Preferred stock assumed by Leucadia 125 125 Net amortization to date of purchase accounting adjustments, net of tax   (48 )   (8 ) Total equity excluding the impact of the merger $ 4,178   $ 3,874     Leverage ratio - excluding merger impacts   10.0     9.5    

(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.

Jefferies Group LLCPeregrine C. Broadbent, 212-284-2338Chief Financial Officer