FOR IMMEDIATE RELEASE

JEFFERIES GROUP ANNOUNCES SECOND QUARTER AND ALL-TIME RECORD FIRST HALF RESULTS; NET REVENUES UP 18% TO $327 MILLION; NET EARNINGS UP 29% TO $46 MILLION; EARNINGS PER SHARE UP 23% TO $0.32

NEW YORK--(BUSINESS WIRE)--July 18, 2006--Jefferies Group, Inc. (NYSE: JEF) today announced quarterly financial results for the quarter ended June 30, 2006.

Highlights for the second quarter ended June 30, 2006:

• Total revenues were up 33% to $457.1 million versus $344.2 million for the second quarter of 2005.
• Net revenues were up 18% to $327.3 million versus $276.6 million for the second quarter of 2005.
• Net earnings were up 29% to $45.6 million compared to $35.4 million for the second quarter of 2005.
• Earnings per share (diluted) were up 23% to $0.32 compared to $0.26 for the second quarter of 2005.
• Investment banking revenues were up 20% to $122.9 million versus $102.5 million for the second quarter of 2005.
• Total trading revenues were up 16% to $165.8 million versus $143.0 million for the second quarter of 2005.

Highlights for the first six months ended June 30, 2006:

• Total revenues were up 43% to a record $981.2 million versus $688.1 million for the first half of 2005.
• Net revenues were up 32% to a record $742.8 million versus $562.6 million for the first half of 2005.
• Net earnings were up 44% to a record $104.0 million compared to $72.1 million for the first half of 2005.
• Earnings per share (diluted) were up 35% to a record $0.73 compared to $0.54 for the first half of 2005. (This increase in earnings per share included $0.01 related to the cumulative effect of a change in accounting principle, net of tax.)
• Investment banking revenues were up 14% to $250.7 million versus $220.0 million for the first half of 2005.
• Total trading revenues were up 39% to $394.7 million versus $284.6 million for the first half of 2005.

"We are pleased with our solid results for the second quarter given the unfavorable market conditions that dominated the last two months of the quarter," commented Richard B. Handler, Chairman and Chief Executive Officer of Jefferies. "We continue to appreciate the hard work of our 2,078 employee partners and the continued support of our loyal clients."

Conference Call

A conference call with management discussion of financial results for the second quarter ended June 30, 2006 will be held July 18 at 9:00 AM Eastern and can be accessed at 617-801-9714 (code: 94439838). A replay of the call will be available approximately two hours post-call at 617-801-6888 (code: 18328938). A live audio webcast and delayed replay will also be available under "Investor Relations" at www.jefferies.com. Questions for consideration by management can be submitted in advance through the "Contact Us" function at www.jefferies.com or by calling 203-708-5975 by 8:45 AM Eastern on July 18.

About Jefferies

Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for over 40 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).

Press Release in PDF format (financials included)

CONTACT:
for Jefferies Group, Inc.
Joseph A. Schenk, 212-284-2338

SOURCE: Jefferies Group, Inc.