Jefferies 8-K Jefferies Announces Third Quarter Financial Results

Exhibit 99

Jefferies Announces Third Quarter Financial Results

NEW YORK--(BUSINESS WIRE)--October 21, 2008--Jefferies Group, Inc. (NYSE: JEF) today announced financial results for the third quarter ended September 30, 2008.

Highlights for the third quarter ended September 30, 2008:

• Net revenues were $274.6 million.
• The net loss for the third quarter of 2008 was $(31.3) million.
• The net loss per share (diluted) was $(0.18).
• The net loss includes approximately $11 million, or $(0.06) per share, relating to amounts owed Jefferies by Lehman Brothers.

“With unprecedented market challenges and a very difficult environment, Jefferies realized relatively positive financial results for the third quarter, and our financial and market position remains strong,” commented Richard B. Handler, Chairman and Chief Executive Officer of Jefferies. “Our excess liquidity and solid business base will help to position our platform to perform as conditions improve. We thank our clients, employees and shareholders for their continued support,” he added.

Conference Call

A conference call with management discussion of financial results for the third quarter ended September 30, 2008 will be held today, October 21, 2008, at 9:00 AM Eastern and can be accessed at 877-246-1929 or 706-634-9290. A one-week replay of the call will be available two hours post-call at 800-633-8284 or 402-977-9140 (reservation code # 21396018). A live audio webcast and delayed replay will also be available under “Investor Relations” at www.jefferies.com.

About Jefferies

Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for 45 years. Headquartered in New York, with more than 25 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com).

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
	Three Months Ended						Nine Months Ended
	Sep 30, 2008			Sep 30, 2007			Sep 30, 2008			Sep 30, 2007
Revenues:
Commissions		113,416			95,652			329,588			255,778
Principal Transactions		(3,430	)		47,325			138,303			320,804
Investment Banking		130,125			189,780			338,704			582,988
Asset Management fees and investment income (loss) from managed funds		(3,431	)		(6,283	)		(17,748	)		29,586
Interest		209,183			334,056			624,614			845,957
Other		7,388			6,434			20,302			21,480
Total Revenues		453,251			666,964			1,433,763			2,056,593
Interest Expense		178,605			332,540			565,839			837,900
Revenues, net of interest expense		274,646			334,424			867,924			1,218,693
Non-Interest Expenses:
Compensation And benefits		246,186			183,503			783,651			662,771
Floor brokerage and clearing fees		18,946			19,155			50,482			50,264
Technology and communications		31,500			26,120			91,894			71,980
Occupancy and equipment rental		19,205			20,280			56,898			56,315
Business development		11,228			13,791			35,106			38,980
Other		25,342			16,254			66,440			51,178
Total non-interest expenses		352,407			279,103			1,084,471			931,488
(Loss) / earnings before income taxes and minority interest		(77,761	)		55,321			(216,547	)		287,205
Income tax (benefit) / expense		(6,090	)		21,608			(59,966	)		107,312
(Loss) / earnings before minority interest		(71,671	)		33,713			(156,581	)		179,893
Minority interest in (loss) earnings of consolidated subsidiaries, net		(40,367	)		(5,060	)		(60,355	)		11,026
Net (loss) / earnings		(31,304	)		38,773			(96,226	)		168,867
(Loss) / earnings per share:
Basic	$	(0.18	)	$	0.27		$	(0.60	)	$	1.19
Diluted	$	(0.18	)	$	0.26		$	(0.60	)	$	1.12
Weighted Average Shares:
Basic		173,757			142,822			160,458			141,905
Diluted		173,757			155,480			160,458			153,911
Effective tax rate		7.8	%		39.1	%		27.7	%		37.4	%

JEFFERIES GROUP, INC. AND SUBSIDIARIES
SELECTED STATISTICAL INFORMATION
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
	Quarters Ended
	9/30/2008		6/30/2008		3/31/2008		12/31/2007		9/30/2007			6/30/2007
Statement of Earnings
Revenues, net of interest expense	274,646		392,082		201,196		349,397			334,424			465,460
Non Interest Expenses:
Compensation And Benefits	246,186		277,514		259,951		283,538			183,503			251,602
Non-personnel expenses	106,221		100,097		94,502		107,330			95,600			85,467
(Loss) / earnings before income taxes and minority interest	(77,761	)	14,471		(153,257	)	(41,471	)		55,321			128,391
Income tax (benefit) / expense	(6,090	)	4,016		(57,892	)	(14,134	)		21,608			45,046
(Loss)/earnings before minority interest	(71,671	)	10,455		(95,365	)	(27,337	)		33,713			83,345
Minority interest in (loss) earnings of consolidated subsidiaries, net	(40,367	)	14,840		(34,828	)	(3,135	)		(5,060	)		15,510
Net (loss) / earnings	($31,304	)	($4,385	)	($60,537	)	($24,202	)	$	38,773		$	67,835
Diluted (loss) / earnings per share	($0.18	)	($0.03	)	($0.43	)	($0.17	)	$	0.26		$	0.45
Financial Ratios
Pretax Operating Margin	-28.3	%	3.7	%	-76.2	%	-11.9	%		16.5	%		27.6	%
Compensation and Benefits / Net Revenues	89.6	%	70.8	%	129.2	%	81.2	%		54.9	%		54.1	%
Effective Tax Rate	7.8	%	27.8	%	37.8	%	34.1	%		39.1	%		35.1	%

JEFFERIES GROUP, INC. AND SUBSIDIARIES
SELECTED STATISTICAL INFORMATION
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
		Quarters Ended
		9/30/2008		6/30/2008	3/31/2008		12/31/2007		9/30/2007		6/30/2007
Revenues by Source
Equities		122,465		149,142	138,193		139,248		140,296		144,563
Fixed Income & Commodities
	Fixed Income (excluding high yield)
	and Commodities	56,213		69,499	33,668		36,201		16,502		40,443
	High Yield	(61,304	)	31,993	(51,676	)	(3,225	)	(7,387	)	34,123
	Fixed Income & Commodities Total	(5,091	)	101,492	(18,008	)	32,976		9,115		74,566
	Total	117,374		250,634	120,185		172,224		149,411		219,129
Investment banking		130,125		109,372	99,207		167,204		189,780		223,093
Asset management fees and investment income (loss) from managed funds:
Asset management fees		3,804		4,758	6,285		6,419		5,369		7,294
Investment income (loss) from managed funds		(7,235	)	8,721	(34,081	)	(12,471	)	(11,652	)	6,090
	Total	(3,431	)	13,479	(27,796	)	(6,052	)	(6,283	)	13,384
Interest		209,183		210,540	204,891		328,926		334,056		310,739
	Total Revenues	453,251		584,025	396,487		662,302		666,964		766,345
Other Data
Number of Trading Days		64		64	61		64		63		63
Average Employees		2,403		2,327	2,486		2,521		2,472		2,319
Common Shares Outstanding		163,429		162,121	132,762		124,453		125,657		125,740
Weighted Average Shares:
Basic		173,757		165,694	141,784		140,726		142,822		142,092
Diluted		173,757		165,694	141,784		140,726		155,480		154,301
As of September 30, 2008, stockholder's equity amounted to $2.2 billion, resulting in book value of $13.38 per share

JEFFERIES GROUP, INC. AND SUBSIDIARIES
SELECTED STATISTICAL INFORMATION
Shares Outstanding and Shares for Basic and Diluted EPS Calculations
(Unaudited)
					September 30, 2008
Shares outstanding					163,429,054
Note - All share information below for EPS purposes is based upon weighted-average balances for the applicable period.
					Three months ended		Nine months ended
					September 30, 2008		September 30, 2008
Shares Outstanding (weighted average)			(1	)	162,437,704		148,920,577
Unvested restricted stock			(2	)	(12,844,633	)	(11,973,630	)
Vested restricted stock units			(3	)	18,604,220		18,120,776
Other issuable shares			(4	)	5,559,791		5,390,413
Basic EPS Shares					173,757,083		160,458,136
Stock Options			(5	)	26,158		42,191
Mandatorily redeemable convertible preferred stock			(6	)	4,105,138		4,097,603
Unvested restricted stock/ restricted stock units			(5	)	9,433,723		8,255,952
Diluted EPS Shares *					187,322,102		172,853,883
*		For purposes of diluted EPS in the event of a net loss, only basic shares will be used due to anti-dilution factors
(1	)	Shares outstanding represents shares issued less shares repurchased in treasury stock. Shares issued includes public and private offerings, vested and unvested restricted stock, distributions related to restricted stock units, deferred compensation plans, employee stock purchase plan and stock option exercises. Shares issued does not include undistributed vested and unvested restricted stock units.
(2	)	As restricted stock is contingent upon a future service condition, unvested shares are removed from shares outstanding in the calculation of basic EPS as Jefferies obligation to issue these shares remains contingent.
(3	)	As vested restricted stock units are no longer contingent upon a future service condition or any other contingency and are issuable upon a certain date in the future, vested restricted stock units are added to shares outstanding in the calculation of basic EPS.
(4	)	Other shares issuable not pursuant to any contingency include shares issuable under certain deferred compensation plans and shares issuable in connection with earnout agreements.
(5	)	Calculated under the treasury stock method in accordance with FASB 128, Earnings per Share. The treasury stock method assumes the issuance of only a net incremental number of shares as proceeds from issuance are assumed to be used to repurchase shares at the average stock price for the period.
(6	)	Calculated under the if-converted method in accordance with FASB 128, Earnings per Share. The if-converted method assumes the conversion of convertible securities at the beginning of the period.

CONTACT:
Jefferies Group, Inc
Peregrine C. Broadbent, 212-284-2338
Chief Financial Officer