Jefferies

Press Release

FOR IMMEDIATE RELEASE
Jefferies Reports Fiscal Second Quarter 2017 Financial Results

NEW YORK, June 20, 2017 – Jefferies Group LLC today announced financial results for its fiscal second quarter 2017.

Highlights for the three months ended May 31, 2017:

  • Total Net Revenues of $779 million
  • Investment Banking Net Revenues of $352 million
  • Total Equities and Fixed Income Net Revenues of $430 million
  • Earnings Before Income Taxes of $116 million
  • Net Earnings of $70 million (40% tax rate, primarily due to recent state and local tax legislation, which added 6%)

Highlights for the six months ended May 31, 2017:

  • Total Net Revenues of $1.6 billion
  • Investment Banking Net Revenues of $760 million
  • Total Equities and Fixed Income Net Revenues of $809 million
  • Earnings Before Income Taxes of $240 million
  • Net Earnings of $184 million (24% tax rate, primarily due to net foreign tax credits)

Rich Handler, Chairman and Chief Executive Officer, and Brian Friedman, Chairman of the Executive Committee, commented: "Our second quarter results reflect solid results in Investment Banking, with $352 million in revenues, compared to $253 million for the same quarter last year, primarily reflecting an improved environment for debt and equity new issuance. Our Equities revenues were $272 million, including a $96 million mark-to-market gain on our 24% equity ownership of KCG Holdings Inc. This compares to $224 million for our second quarter of last year, which included a markup in our KCG position of $56 million. During the quarter, Virtu Financial agreed to buy KCG for cash in a transaction that is expected to close during the third quarter. Excluding KCG, our core equity sales and trading business enjoyed a solid quarter and, despite quiet market activity and low volatility, our global cash businesses continued to gain market share. Fixed Income revenues were $159 million for the quarter as lower volumes and lower volatility prevailed throughout much of the quarter. Our tax expense for the quarter was $46 million, or about 40% of pre-tax profits. Following recently enacted legislation from New York State and New York City, our tax expense includes a net charge of $7 million that reflects the revaluation of a portion of our net deferred tax asset, which was partially offset by current year reduced state and local tax rates. The impact of this legislation will reduce the income apportioned to these jurisdictions going forward and thereby reduce our effective tax rate."

The attached financial tables should be read in conjunction with our Quarterly Report on Form 10-Q for the quarter ended February 28, 2017 and our Annual Report on Form 10-K for the year ended November 30, 2016. Amounts herein pertaining to May 31, 2017 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 quarter ended May 31, 2017.

This release contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements about our future results and performance, including our future market share and expected financial results. It is possible that the actual results may differ materially from the anticipated results indicated in these forward-looking statements. Please refer to our most recent Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from those projected in these forward-looking statements.

Jefferies, a global, full-service 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. Our firm provides a full range of investment banking, sales, trading, research and strategy across the spectrum of equities, fixed income and foreign exchange, 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.

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For further information, please contact:

Peregrine C. Broadbent
Chief Financial Officer
Jefferies Group LLC
(212) 284-2338