Market Overview

Leucadia National Corporation Announces First Quarter 2018 Results

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Leucadia National Corporation (NYSE:LUK) today announced its financial
results for the three month period ended March 31, 2018. Consistent with
the expectation expressed in our press release of April 9, 2018, Income
before income taxes was $107 million and net income attributable to
Leucadia National Corporation common shareholders was $125 million, or
$0.34 per diluted share.

Rich Handler, CEO of Leucadia, and Brian Friedman, President of
Leucadia, said: "We are pleased with another quarter of solid
performance across Leucadia. Jefferies' first quarter results reflect
continued strong performances in Investment Banking, with net revenues
of $434 million, and solid performance in both Equities and Fixed
Income, with total revenues of $369 million. Investment Banking results
reflect a good new-issue equity and debt environment, and another strong
quarter in mergers and acquisitions. Fixed Income revenues were a strong
$213 million and relatively consistent across the quarter. Equities
revenues were $156 million. Our share of Berkadia's income was $26
million, buoyed by strong originations during the quarter, and our share
of HomeFed's income was also higher than previous quarters, due to a
gain from the sale of one of its assets.

"Our Leucadia Merchant Banking portfolio also continues to deliver
strong results, with National Beef generating pre-tax income of $69
million during a typically lighter seasonal quarter for beef processing.
The remainder of our merchant banking portfolio produced solid results,
through either cash generation or value-building, offset partly by a $21
million mark-to-market reduction in the value of our HRG position.

"We patiently continue to develop our alternative asset management
platform. During the first quarter, we recorded losses of $78 million
mainly due to two strategies impacted by exceptional volatility during
the quarter.

"Our recently announced strategic transactions, including the agreed
upon sale of 48% of National Beef, the agreed upon sale of 100% of our
equity interest in Garcadia and the acquisition by Vitesse Energy
Finance of $190 million of additional Bakken oil and gas assets, will
complete an ongoing transformation of Leucadia to a diversified
financial services company. We expect these to close in the next four
months."

After the end of the first quarter, through April 26, 2018, Leucadia
repurchased a total of 10.3 million common shares at an average price of
$24.40 per share. 14.7 million shares remain authorized for repurchase.

* * * *

More information on the Company's results of operations for the three
months ended March 31, 2018 will be provided upon filing of the
Company's Form 10-Q with the Securities and Exchange Commission.

This press 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 and
statements that are not historical facts. These forward-looking
statements are usually preceded by the words "should," "expect,"
"intend," "may," "will," or similar expressions. Forward-looking
statements may contain expectations regarding revenues, earnings,
operations, and other results, and may include statements of future
performance, plans, and objectives. Forward-looking statements include
expectations relating to the National Beef and Garcadia transactions
disclosed in this press release. Forward-looking statements also include
statements pertaining to our strategies for future development of our
businesses and products. Forward-looking statements represent only our
belief regarding future events, many of which by their nature are
inherently uncertain. It is possible that the actual results may differ,
possibly materially, from the anticipated results indicated in these
forward-looking statements. Information regarding important factors,
including Risk Factors that could cause actual results to differ,
perhaps materially, from those in our forward-looking statements is
contained in reports we file with the SEC. You should read and interpret
any forward-looking statement together with reports we file with the SEC.

Past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk. Therefore, it
should not be assumed that future performance of any specific investment
or investment strategy will be profitable or equal the corresponding
indicated performance level(s).

     

SUMMARY FOR LEUCADIA NATIONAL CORPORATION
AND SUBSIDIARIES

(In thousands, except per share amounts)
(Unaudited)

 

 

For the Three Months Ended
March 31,

2018   2017
 
Net revenues $ 2,680,793   $ 2,867,982  
 
Income before income taxes and income (loss) related to associated
companies
74,554 526,671
 
Income (loss) related to associated companies 32,100   (128,574 )
 
Income before income taxes 106,654 398,097
 
Income tax provision (benefit) (32,495 ) 104,174  
 
Net income 139,149 293,923
 
Net loss attributable to the noncontrolling interests 1,344 523
 
Net income attributable to the redeemable noncontrolling interests (14,796 ) (12,022 )
 
Preferred stock dividends (1,172 ) (1,016 )
 
Net income attributable to Leucadia National Corporation common
shareholders
$ 124,525   $ 281,408  
 
Basic earnings per common share attributable to Leucadia National
Corporation common shareholders:
Net income $ 0.34   $ 0.76  
 
Number of shares in calculation 366,427   369,267  
 
Diluted earnings per common share attributable to Leucadia National
Corporation common shareholders:
Net income $ 0.34   $ 0.75  
 
Number of shares in calculation 373,461   375,721  
 

A summary of results for the three months ended March 31, 2018 and 2017
is as follows (in thousands):

             
Financial Services

Leucadia Merchant
Banking Portfolio

Jefferies  

Other
Financial
Services

National
Beef

 

Other
Merchant
Banking

Corporate
and Other

Parent
Company
Interest

Total

2018

Net revenues $ 820,919   $ (27,930 ) $ 1,785,358   $ 94,002   $ 8,444   $   $ 2,680,793  
 
Expenses:
Cost of sales 1,670,776 81,935 1,752,711
Compensation and benefits 454,760 11,245 10,207 4,625 19,029 499,866
Floor brokerage and clearing fees 42,176 42,176
Interest expense 5,770 2,109 982 14,746 23,607
Depreciation and amortization 16,366 1,834 25,519 8,662 1,298 53,679
Selling, general and other expenses 181,887   22,776   7,856   7,780   13,901     234,200  
Total expenses 695,189   41,625   1,716,467   103,984   34,228   14,746   2,606,239  
Income (loss) before income taxes and income (loss) related to
associated companies
125,730 (69,555 ) 68,891 (9,982 ) (25,784 ) (14,746 ) 74,554
Income (loss) related to associated companies   30,045     (41 ) 2,096     32,100  
Income (loss) before income taxes $ 125,730   $ (39,510 ) $ 68,891   $ (10,023 ) $ (23,688 ) $ (14,746 ) $ 106,654  
 
 

2017

Net revenues $ 797,386   $ 56,223   $ 1,561,456   $ 445,227   $ 7,690   $   $ 2,867,982  
 
Expenses:
Cost of sales 1,463,838 69,256 1,533,094
Compensation and benefits 460,672 15,184 9,312 4,965 13,194 503,327
Floor brokerage and clearing fees 45,858 45,858
Interest expense 9,971 1,814 869 14,730 27,384
Depreciation and amortization 15,601 2,905 22,399 7,738 867 49,510
Selling, general and other expenses 142,985   14,196   6,990   9,254   8,713     182,138  
Total expenses 665,116   42,256   1,504,353   92,082   22,774   14,730   2,341,311  
Income (loss) before income taxes and income (loss) related to
associated companies
132,270 13,967 57,103 353,145 (15,084 ) (14,730 ) 526,671
Income (loss) related to associated companies   (133,003 )   3,849   580     (128,574 )
Income (loss) before income taxes $ 132,270   $ (119,036 ) $ 57,103   $ 356,994   $ (14,504 ) $ (14,730 ) $ 398,097  

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