Segment Information

Our operating segments consist of our consolidated businesses, which offer different products and services and are managed separately. Our reportable segments, based on qualitative and quantitative requirements, are Jefferies Group and Corporate. Jefferies Group is a global full-service, integrated securities and investment banking firm.

Corporate assets primarily consist of financial instruments owned, the deferred tax asset (exclusive of Jefferies Group's deferred tax asset), cash and cash equivalents. Corporate revenues primarily include interest income. We do not allocate Corporate revenues or overhead expenses to the operating units.

All other consists of our other financial services businesses and investments and our merchant banking businesses and investments. Our other financial services businesses and investments include the Leucadia Asset Management platform, Foursight Capital, and our investments in Berkadia, HomeFed and FXCM. Our merchant banking businesses and investments primarily include Vitesse Energy Finance, JETX Energy, Idaho Timber and our investments in Spectrum Brands, National Beef, Garcadia, Linkem and Golden Queen. As a result of the announced transactions and our current operating strategy, we have made changes to the corporate segment to reflect the way we currently manage our business, and have reclassified the prior periods to conform to current presentation.

As discussed further in Notes 1 and 24, on June 5, 2018, we sold 48% of National Beef to Marfrig and deconsolidated our investment in National Beef. Results prior to June 5, 2018 are classified in discontinued operations and are not included in the table below. Our retained 31% interest in National Beef is accounted for under the equity method and results subsequent to the June 5, 2018 closing are included in All other in the table below.

Certain information concerning our segments is presented in the following table. Consolidated subsidiaries are reflected as of the date a majority controlling interest was acquired. As discussed above, Jefferies Group is reflected in our consolidated financial statements utilizing a one month lag.



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Net revenues:
Reportable Segments:
Jefferies Group	$	774,749		$	802,909		$	2,419,410		$	2,381,967
Corporate	8,692			1,915			14,753			4,257
Total net revenues related to reportable segments	783,441			804,824			2,434,163			2,386,224
All other (1)	367,405			52,399			523,277			634,386
Total consolidated net revenues	$	1,150,846		$	857,223		$	2,957,440		$	3,020,610

Income (loss) from continuing operations before income taxes:
Reportable Segments:
Jefferies Group	$	86,154		$	128,112		$	336,922		$	383,094
Corporate	(14,563		)	(16,311		)	(55,708		)	(56,816		)
Income from continuing operations before income taxes related to reportable segments	71,591			111,801			281,214			326,278
All other (1)	215,856			(71,516		)	111,007			130,722
Parent Company interest	(14,755		)	(14,737		)	(44,251		)	(44,201		)
Total consolidated income from continuing operations before income taxes	$	272,692		$	25,548		$	347,970		$	412,799

Depreciation and amortization expenses:
Reportable Segments:
Jefferies Group	$	17,175		$	15,928		$	50,829		$	46,877
Corporate	852			865			2,599			2,599
Total depreciation and amortization expenses related to reportable segments	18,027			16,793			53,428			49,476
All other	14,268			11,967			38,932			32,653
Total consolidated depreciation and amortization expenses	$	32,295		$	28,760		$	92,360		$	82,129

(1)

All other Net revenues and Income from continuing operations before income taxes include realized and unrealized gains (losses) relating to our investment in FXCM of $1.3 million and $(2.9) million, respectively, for the three months ended September 30, 2018; $16.4 million and $(2.9) million, respectively, for the nine months ended September 30, 2018; $2.3 million and $(2.0) million, respectively, for the three months ended September 30, 2017; and $17.6 million and $(148.7) million, respectively, for the nine months ended September 30, 2017.

Interest expense classified as a component of Net revenues relates to Jefferies Group. For the three months ended September 30, 2018 and 2017, interest expense classified as a component of Expenses was primarily comprised of parent company interest ($14.8 million and $14.7 million, respectively) and all other ($14.0 million and $10.9 million, respectively). For the nine months ended September 30, 2018 and 2017, interest expense classified as a component of Expenses was primarily comprised of parent company interest ($44.3 million and $44.2 million, respectively) and all other ($30.3 million and $32.6 million, respectively).

As discussed above, during the third quarter of 2018, we sold 100% of our equity interests in Garcadia and our associated real estate to our former partners, the Garff family and recognized a pre-tax gain of $221.7 million for the three and nine months ended September 30, 2018 in Other revenues. The gain on the sale is included within All other above.

Conwed Plastics ("Conwed") was our consolidated subsidiary that manufactured and marketed lightweight plastic netting. In January 2017, we sold 100% of Conwed to Schweitzer-Mauduit International, Inc., (NYSE: SWM) for $295 million in cash plus potential earn-out payments in 2019, 2020 and 2021 totaling up to $40 million in cash to the extent the results of Conwed’s subsidiary, Filtrexx International, exceed certain performance thresholds. We recognized a $178.2 million pre-tax gain on the sale of Conwed in Other revenues primarily during the nine months ended September 30, 2017. The gain on the sale of Conwed is included within All other above.