SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


[X]		QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		For the quarterly period endedJune 28, 2002

~~For the quarterly period ended~~ ~~March 29, 2002~~ OR


[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		For the transition period from ____________ to _____________

Commission file number 1-14947

JEFFERIES GROUP, INC.

(Exact name of registrant as specified in its charter)


Delaware		95-4719745

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


520 Madison Avenue, 12^th Floor, New York, New York			10022

(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code:(212) 284-2550

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

As of ~~March 29,~~June 28, 2002, the registrant had ~~26,774,168~~26,930,270 common shares, $.0001 par value, outstanding.

Page 1 of 1518

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
		CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
		CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative ~~Disclosure~~Disclosures About Market Risk
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
EXHIBIT ~~10.8~~99.1

JEFFERIES GROUP, INC. AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
~~MARCH 29,~~JUNE 28, 2002

Page

PART I.I
~~FINANCIAL INFORMATION~~
FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Financial Condition -
~~March 29,~~ June 28, 2002 (unaudited) and December 31, 2001 3

Consolidated Statements of Earnings (unaudited) -
Three Months and Six Months Ended ~~March 29,~~June 28, 2002 and ~~March 30,~~June 29, 2001 4

Consolidated Statement of Changes in Stockholders’ Equity (unaudited) -
~~Three~~ Six Months Ended ~~March 29,~~June 28, 2002 5

Consolidated Statements of Cash Flows (unaudited) -
~~Three~~ Six Months Ended ~~March 29,~~June 28, 2002 and ~~March 30,~~June 29, 2001 6

Notes to Consolidated Financial Statements (unaudited) 8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14 13

Item 3. Quantitative and Qualitative Disclosures About Market Risk 17 14

PART ~~II.~~II
~~OTHER INFORMATION~~
OTHER INFORMATION

Item 1. Legal Proceedings 17 14

Item 4. Submission of Matters to a Vote of Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 14 17

Page 2 of 1518

JEFFERIES GROUP, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share amounts)


					March 29,			December 31,							June 28,			December 31,
					2002			2001							2002			2001

					(unaudited)										(unaudited)
ASSETS	ASSETS										ASSETS
Cash and cash equivalents	Cash and cash equivalents				$	23,587		$	188,106		Cash and cash equivalents				$	14,806		$	188,106
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations	Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations					177,683			154,989		Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations					177,686			154,989
Receivable from brokers and dealers	Receivable from brokers and dealers					4,191,924			4,064,626		Receivable from brokers and dealers					3,479,153			4,064,626
Receivable from customers, officers and directors	Receivable from customers, officers and directors					244,588			136,605		Receivable from customers, officers and directors					195,012			136,605
Securities owned	Securities owned					456,268			285,372		Securities owned					458,552			285,372
Securities pledged to creditors	Securities pledged to creditors					103,933			100,262		Securities pledged to creditors					83,917			100,262
Investments	Investments					462,462			168,863		Investments					412,739			168,863
Premises and equipment	Premises and equipment					47,367			48,436		Premises and equipment					47,242			48,436
Other assets	Other assets					197,895			197,478		Other assets					220,917			197,478

					$	5,905,707		$	5,344,737						$	5,090,024		$	5,344,737

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY										LIABILITIES AND STOCKHOLDERS’ EQUITY
Bank loans	Bank loans				$	184,000		$	50,000		Bank loans				$	121,000		$	50,000
Payable to brokers and dealers	Payable to brokers and dealers					3,921,952			3,885,842		Payable to brokers and dealers					3,186,816			3,885,842
Payable to customers	Payable to customers					356,443			313,207		Payable to customers					343,886			313,207
Securities sold, not yet purchased	Securities sold, not yet purchased					207,354			150,146		Securities sold, not yet purchased					197,819			150,146
Accrued expenses and other liabilities	Accrued expenses and other liabilities					195,250			226,089		Accrued expenses and other liabilities					213,688			226,089

						4,864,999			4,625,284							4,063,209			4,625,284
Long-term convertible debt	Long-term convertible debt					2,752			2,817		Long-term convertible debt					3,133			2,817
Long-term debt	Long-term debt					466,614			150,980		Long-term debt					430,258			150,980

						5,334,365			4,779,081							4,496,600			4,779,081

Stockholders’ equity:	Stockholders’ equity:										Stockholders’ equity:
	Preferred stock, $.0001 par value. Authorized 10,000,000 shares; none issued					—			—		Preferred stock, $.0001 par value. Authorized 10,000,000 shares; none issued					—			—
	Common stock, $.0001 par value. Authorized 100,000,000 shares; issued 28,603,256 shares in 2002 and 27,896,622 shares in 2001					3			3		Common stock, $.0001 par value. Authorized 100,000,000 shares; issued 28,974,476 shares in 2002 and 27,896,622 shares in 2001					3			3
	Additional paid-in capital					179,782			159,018		Additional paid-in capital					191,752			159,018
	Retained earnings					455,555			439,195		Retained earnings					471,809			439,195
	Less:										Less:
		Treasury stock, at cost, 1,829,088 shares in 2002 and 1,060,788 shares in 2001				(58,341	)		(27,856	)		Treasury stock, at cost, 2,044,206 shares in 2002 and 1,060,788 shares in 2001				(67,723	)		(27,856	)
		Accumulated other comprehensive loss:										Accumulated other comprehensive loss:
			Currency translation adjustments			(3,356	)		(2,403	)			Currency translation adjustments			(116	)		(2,403	)
			Additional minimum pension liability			(2,301	)		(2,301	)			Additional minimum pension liability			(2,301	)		(2,301	)

		Total accumulated other comprehensive loss				(5,657	)		(4,704	)		Total accumulated other comprehensive loss				(2,417	)		(4,704	)

				Total stockholders’ equity		571,342			565,656					Total stockholders’ equity		593,424			565,656

					$	5,905,707		$	5,344,737						$	5,090,024		$	5,344,737

See accompanying unaudited notes to consolidated financial statements.

Page 3 of 1518

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except per share amounts)


			Three Months Ended						Three Months Ended					Six Months Ended

			March 29,		March 30,				June 28,			June 29,		June 28,			June 29,
			2002		2001				2002			2001		2002			2001

Revenues:	Revenues:						Revenues:
	Commissions		$	64,573	$	60,548	Commissions		$	63,063		$	53,859	$	127,636		$	114,407
	Principal transactions			66,667		86,826	Principal transactions			67,288			72,404		133,955			159,230
	Corporate finance			37,668		17,012	Corporate finance			41,650			44,077		79,318			61,089
	Interest			21,629		39,944	Interest			24,447			38,332		46,076			78,276
	Asset management			3,487		4,729	Asset management			2,724			5,811		6,211			10,540
	Other			1,318		649	Other			1,705			1,414		3,023			2,063

		Total revenues		195,342		209,708		Total revenues		200,877			215,897		396,219			425,605
Interest expense	Interest expense			17,598		32,803	Interest expense			22,748			34,453		40,346			67,256

Revenues, net of interest expense	Revenues, net of interest expense			177,744		176,905	Revenues, net of interest expense			178,129			181,444		355,873			358,349

Non-interest expenses:	Non-interest expenses:						Non-interest expenses:
	Compensation and benefits			104,567		107,484	Compensation and benefits			101,715			111,244		206,282			218,728
	Floor brokerage and clearing fees			14,148		10,905	Floor brokerage and clearing fees			13,442			11,183		27,590			22,088
	Communications			11,395		11,338	Communications			13,998			12,230		25,393			23,568
	Occupancy and equipment rental			6,158		5,492	Occupancy and equipment rental			6,148			6,135		12,306			11,627
	Travel and promotional			6,304		5,609	Travel and promotional			5,686			5,703		11,990			11,312
	Other			5,208		8,946	Other			6,468			6,375		11,676			15,321

		Total non-interest expenses		147,780		149,774		Total non-interest expenses		147,457			152,870		295,237			302,644

Earnings before income taxes				29,964		27,131
Earnings before income taxes and extraordinary item							Earnings before income taxes and extraordinary item			30,672			28,574		60,636			55,705
Income taxes	Income taxes			12,292		11,447	Income taxes			12,577			12,022		24,869			23,469

Earnings before extraordinary item							Earnings before extraordinary item			18,095			16,552		35,767			32,236
Extraordinary item — loss on early extinguishment of debt, net of tax							Extraordinary item — loss on early extinguishment of debt, net of tax			(480	)		—		(480	)		—

		Net earnings	$	17,672	$	15,684		Net earnings	$	17,615		$	16,552	$	35,287		$	32,236

Earnings per share:	Earnings per share:						Earnings per share:
Basic:							Basic:
							Earnings before extraordinary item		$	0.73		$	0.68	$	1.45		$	1.34
							Early extinguishment of debt			(0.01	)		—		(0.02	)		—

							Net earnings		$	0.72		$	0.68	$	1.43		$	1.34

Diluted:							Diluted:
							Earnings before extraordinary item		$	0.66		$	0.65	$	1.31		$	1.27
	Basic		$	0.71	$	0.65	Early extinguishment of debt			(0.02	)		—		(0.02	)		—

	Diluted		$	0.65	$	0.63	Net earnings		$	0.64		$	0.65	$	1.29		$	1.27

Weighted average shares:	Weighted average shares:						Weighted average shares:
	Basic			24,766		24,039	Basic			24,626			24,206		24,695			24,124
	Diluted			27,380		25,061	Diluted			27,436			25,564		27,407			25,321

Fixed charge coverage ratio	Fixed charge coverage ratio			6.3X		7.3X	Fixed charge coverage ratio			4.7X			7.7X		5.4X			7.5X

See accompanying unaudited notes to consolidated financial statements.

Page 4 of 1518

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
~~THREE~~SIX MONTHS ENDED ~~MARCH 29,~~JUNE 28, 2002
(Dollars in thousands, except per share amounts)


												Accumulated			Total														Accumulated			Total
				Additional								Other			Stock-						Additional								Other			Stock-
		Common		Paid-in		Retained			Treasury			Comprehensive			holders'				Common		Paid-in		Retained			Treasury			Comprehensive			holders'
		Stock		Capital		Earnings			Stock			Loss			Equity				Stock		Capital		Earnings			Stock			Loss			Equity

Balance, December 31, 2001	Balance, December 31, 2001	$	3	$	159,018	$	439,195		$	(27,856	)	$	(4,704	)	$	565,656		Balance, December 31, 2001	$	3	$	159,018	$	439,195		$	(27,856	)	$	(4,704	)	$	565,656
Exercise of stock options, including tax benefits (10,218 shares)			—		264		—			—			—			264
Purchase of treasury stock (668,300 shares)			—		—		—			(27,725	)		—			(27,725	)
Issuance of ESPP/SSPP shares (69,824 shares)			—		1,957		—			—			—			1,957
Issuance of restricted stock (526,592 shares), net of forfeitures, and additional vesting of restricted stock shares, including tax benefits			—		17,428		—			(2,760	)		—			14,668
Exercise of stock options, including tax benefits (73,580 shares)																		Exercise of stock options, including tax benefits (73,580 shares)		—		2,126		—			—			—			2,126
Purchase of treasury stock (882,400 shares)																		Purchase of treasury stock (882,400 shares)		—		—		—			(37,080	)		—			(37,080	)
Issuance of ESPP / SSPP shares (69,824 shares)																		Issuance of ESPP / SSPP shares (69,824 shares)		—		1,957		—			—			—			1,957
Issuance of common shares (7,500 shares)																		Issuance of common shares (7,500 shares)		—		370		—			—			—			370
Issuance of restricted stock (825,932 shares), net of forfeitures, and additional vesting of restricted stock shares, including tax benefits																		Issuance of restricted stock (825,932 shares), net of forfeitures, and additional vesting of restricted stock shares, including tax benefits		—		26,033		—			(2,787	)		—			23,246
Employee stock ownership plan amortization and stock purchases, net	Employee stock ownership plan amortization and stock purchases, net		—		1,115		—			—			—			1,115		Employee stock ownership plan amortization and stock purchases, net		—		2,248		—			—			—			2,248
Quarterly dividends ($.05 per share per quarter)	Quarterly dividends ($.05 per share per quarter)		—		—		(1,312	)		—			—			(1,312	)	Quarterly dividends ($.05 per share per quarter)		—		—		(2,673	)		—			—			(2,673	)
Comprehensive income:	Comprehensive income:																	Comprehensive income:
	Net earnings		—		—		17,672			—			—			17,672		Net earnings		—		—		35,287			—			—			35,287
	Other comprehensive loss, net of tax:																	Other comprehensive gain, net of tax:
	Translation adjustment		—		—		—			—			(953	)		(953	)	Translation adjustment		—		—		—			—			2,287			2,287

Comprehensive income	Comprehensive income		—		—		—			—			—			16,719		Comprehensive income		—		—		—			—			—			37,574

Balance, March 29, 2002		$	3	$	179,782	$	455,555		$	(58,341	)	$	(5,657	)	$	571,342
Balance, June 28, 2002																		Balance, June 28, 2002	$	3	$	191,752	$	471,809		$	(67,723	)	$	(2,417	)	$	593,424

See accompanying unaudited notes to consolidated financial statements.

Page 5 of 1518

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
Three Months Ended

March 29, March 30,
2002 2001

Cash flows from operating activities:
Net earnings $ 17,672 $ 15,684

Adjustments to reconcile net earnings to net cash provided by (used in) operations:
Depreciation and amortization 5,268 3,596
(Increase) decrease in cash and securities segregated and on deposit for regulatory purposes (22,694 ) 20,825
(Increase) decrease in receivables:
Brokers and dealers (127,298 ) (1,802,663 )
Customers, officers and directors (107,983 ) 61,721
(Increase) decrease in securities owned (170,896 ) 14,001
(Increase) decrease in securities pledged to creditors (3,671 ) 13,426
Increase in investments (293,599 ) (13,310 )
Increase in other assets (417 ) (19,988 )
Increase (decrease) in operating payables:
Brokers and dealers 36,110 1,992,012
Customers 43,236 (175,493 )
Increase (decrease) in securities sold, not yet purchased 57,208 (25,463 )
Decrease in accrued expenses and other liabilities (30,572 ) (56,531 )

Total adjustments (615,308 ) 12,133

Net cash provided by (used in) operating activities (597,636 ) 27,817

Six Months Ended

June 28, June 29,
2002 2001

Cash flows from operating activities:
Net earnings $ 35,287 $ 32,236

Adjustments to reconcile net earnings to net cash provided by (used in) operations:
Depreciation and amortization 10,552 7,971
(Increase) decrease in cash and securities segregated and on deposit for regulatory purposes (22,697 ) 38,107
(Increase) decrease in receivables:
Brokers and dealers 585,473 (93,148 )
Customers, officers and directors (58,407 ) 73,641
Increase in securities owned (173,180 ) (37,166 )
(Increase) decrease in securities pledged to creditors 16,345 (2,871 )
Increase in investments (243,876 ) (21,566 )
Increase in other assets (9,804 ) (21,766 )
Increase (decrease) in operating payables:
Brokers and dealers (699,026 ) 350,251
Customers 30,679 (207,377 )
Increase (decrease) in securities sold, not yet purchased 47,673 (18,831 )
Decrease in accrued expenses and other liabilities (12,401 ) (50,516 )

Total adjustments (528,669 ) 16,729

Net cash provided by (used in) operating activities (493,382 ) 48,965

Continued on next page.

See accompanying unaudited notes to consolidated financial statements.

Page 6 of 1518

JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS — CONTINUED (Unaudited)
(Dollars in thousands)


					Three Months Ended										Six Months Ended

					March 29,			March 30,							June 28,			June 29,
					2002			2001							2002			2001

Cash flows from financing activities:	Cash flows from financing activities:										Cash flows from financing activities:
													Net proceeds from (payments on):
													Bank loans			71,000			—
													8 7/8% Senior Notes			(49,861	)		—
			Net proceeds from (payments on):										7 3/4% Senior Notes			315,315			—
			Bank loans			134,000			—				Subordinated loans on consolidated subsidiary			—			1,300
			Senior Notes			315,315			—				Repurchase of treasury stock			(37,080	)		(6,741	)
			Repurchase of treasury stock			(27,725	)		(6,548	)			Dividends paid			(2,673	)		(2,514	)
			Dividends paid			(1,312	)		(1,240	)			Exercise of stock options			2,126			1,771
			Exercise of stock options			264			1,421				Issuance of ESPP / SSPP shares			1,957			2,405
			Issuance of ESPP/SSPP shares			1,957			1,556				Issuance of common shares			370			—
			Issuance of restricted stock			14,668			15,690				Issuance of restricted stock			23,246			22,468

				Net cash provided by financing activities		437,167			10,879					Net cash provided by financing activities		324,400			18,689

Cash flows from investing activities - purchase of premises and equipment	Cash flows from investing activities - purchase of premises and equipment					(3,032	)		(6,731	)	Cash flows from investing activities - purchase of premises and equipment					(6,921	)		(11,720	)

Effect of foreign currency translation on cash	Effect of foreign currency translation on cash					(1,018	)		(2,615	)	Effect of foreign currency translation on cash					2,603			(2,847	)

				Net increase (decrease) in cash and cash equivalents		(164,519	)		29,350					Net increase (decrease) in cash and cash equivalents		(173,300	)		53,087
Cash and cash equivalents — beginning of period	Cash and cash equivalents — beginning of period					188,106			24,996		Cash and cash equivalents — beginning of period					188,106			24,996

Cash and cash equivalents — end of period	Cash and cash equivalents — end of period				$	23,587		$	54,346		Cash and cash equivalents — end of period				$	14,806		$	78,083

Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:										Supplemental disclosures of cash flow information:
	Cash paid during the period for:										Cash paid during the period for:
		Interest			$	16,255		$	36,759			Interest			$	33,631		$	73,688

		Income taxes			$	12,456		$	3,507			Income taxes			$	30,185		$	29,893

See accompanying unaudited notes to consolidated financial statements.

Page 7 of 1518

JEFFERIES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Consolidated Financial Statements

The accompanying consolidated financial statements include the accounts of Jefferies Group, Inc. (“Group”) and all its subsidiaries (“Company”), including Jefferies & Company, Inc. (“JEFCO”). The accounts of Helfant Group, Inc. (“Helfant”) are consolidated because of the nature and extent of Group’s ownership interest in Helfant. The Company and its subsidiaries operate and are managed as a single business segment, that of a securities broker-dealer, which includes several types of financial services, such as principal and agency transactions in equity, convertible debt and high yield, as well as corporate finance activities. Since the Company’s services are provided using the same distribution channels, support services and facilities and all are provided to meet client needs, the Company does not identify assets or allocate all expenses to any service, or class of service as a separate business segment.

All significant intercompany accounts and transactions are eliminated in consolidation. The consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for the fair statement of the results for the interim periods and should be read in conjunction with the Company’s annual report for the year ended December 31, 2001.

Securities Transactions

All transactions in securities, commission revenues and related expenses are recorded on a trade-date basis.

Securities owned and securities sold, not yet purchased, are valued at market, and unrealized gains or losses are reflected in revenues from principal transactions.

Receivable from, and Payable to, Brokers and Dealers

Receivable from and payable to brokers and dealers consists of the following as of ~~March 29,~~June 28, 2002 (in thousands of dollars):


Receivable from brokers and dealers:	Receivable from brokers and dealers:			Receivable from brokers and dealers:
	Securities borrowed	$	3,822,037	Securities borrowed	$	3,237,823
	Other		369,887	Other		241,330

		$	4,191,924		$	3,479,153

Payable to brokers and dealers:	Payable to brokers and dealers:			Payable to brokers and dealers:
	Securities loaned	$	3,779,623	Securities loaned	$	3,047,350
	Other		142,329	Other		139,466

		$	3,921,952		$	3,186,816

Page 8 of 1518

JEFFERIES GROUP, INC. AND SUBSIDIARIES

Securities Owned, Securities Pledged to Creditors and Securities Sold, Not Yet Purchased

The following is a summary of the market value of major categories of securities owned and securities sold, not yet purchased, as of ~~March 29,~~June 28, 2002 (in thousands of dollars):


			Securities				Securities
			Sold,				Sold,
	Securities		Not Yet		Securities		Not Yet
	Owned		Purchased		Owned		Purchased

Corporate equity securities	$	70,925	$	118,196	$	49,057	$	69,640
High-yield securities		230,376		9,204		182,281		918
Corporate debt securities		149,625		68,578		213,146		93,341
U.S. Government and agency obligations		4,555		11,039		13,212		33,622
Options		787		337		856		298

	$	456,268	$	207,354	$	458,552	$	197,819

The following is a summary of the market value of major categories of securities pledged to creditors as of ~~March 29,~~June 28, 2002 (in thousands of dollars):


Corporate equity securities	$	83,807	$	56,111
High yield securities		2,562		13,859
Corporate debt securities		17,564		13,947

	$	103,933	$	83,917

Investments

Investments consist of the following as of ~~March 29,~~June 28, 2002 (in thousands of dollars):


Short term bond funds		$	315,269	$	268,506
Debt and equity investments	��		12,791		10,358
Partnership interests			45,740		44,203
Equity and debt interests in affiliates			88,662		89,672

		$	462,462	$	412,739

Long Term Convertible Debt and Long Term Debt

The following summarizes long term convertible debt and long term debt outstanding as of ~~March 29,~~June 28, 2002 (in thousands of dollars):


Long-Term Convertible Debt
Zero coupon, unsecured Euro denominated Convertible Loan Notes	$	2,752	$	3,133

Long-Term Debt
8 7/8% Senior Notes, due 2004, less unamortized discount of $145		49,855
7 1/2% Senior Notes, due 2007, less unamortized discount of $150		99,850
7 3/4% Senior Notes, due 2012, less unamortized discount of $7,546		315,609
7 1/2% Senior Notes, due 2007, less unamortized discount of $144			$	99,856
7 3/4% Senior Notes, due 2012, less unamortized discount of $7,421				329,102
10% Subordinated Loans, due 2003		1,000		1,000
10% Subordinated Loans, due 2004		300		300

	$	466,614	$	430,258

In March 2002, the Company issued $325 million aggregate principal amount of unsecured 7 3/4% senior notes due ~~March 15,~~ 2012, with a yield of 8.09%.

In May 2002, the Company retired $50 million aggregate principal amount of 8 7/8% senior notes due 2004. This resulted in an extraordinary after tax loss of $480,000.

Page 9 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

The Company has entered into a fair value hedge with no ineffectiveness using interest rate swaps in order to convert $200 million aggregate principal amount of unsecured 7 3/4% senior notes due March 15, 2012 into floating rates based

~~Page 9 of 15~~

~~JEFFERIES GROUP, INC. AND SUBSIDIARIES~~

upon LIBOR. The effective interest rate on the $200 million aggregate principal amount of unsecured 7 3/4% senior notes, after giving effect to the swaps, was ~~4.16%~~4.15%. The fair value of the mark to market of the swaps was ~~a negative $1.8~~positive $11.5 million as of ~~March 29,~~June 28, 2002, which was recorded as ~~a reduction to~~an increase in the book value of the debt and an increase in ~~accrued expenses and~~ other ~~liabilities.~~assets.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and short term investments. Cash equivalents are part of the cash management activities of the Company and generally mature within 90 days. The following is a summary of cash and cash equivalents as of ~~March 29,~~June 28, 2002 (in thousands of dollars):


Cash in banks	$	20,460	$	10,538
Short term investments		3,127		4,268

	$	23,587	$	14,806

Goodwill

Goodwill represents the excess of cost over net assets acquired and is included in other assets. Goodwill will no longer be amortized, but will be tested for impairment at least annually by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The following is a summary of goodwill as of ~~March~~June 28, 2002 and the impact of goodwill amortization on earnings for the three month and six month periods ended June 28, 2002 and June 29, ~~2002~~2001 (in thousands of dollars):


					Excess of
	Excess of				Purchase
	Purchase				Price Over
	Price Over				Net Assets							Excess of Purchase
	Net Assets		Accumulated		Acquired		Acquisition	Excess of Purchase Price Over Net		Accumulated		Price Over Net Assets
Acquisition	Acquired		Amortization		Remaining		Date	Assets Acquired		Amortization		Acquired Remaining		Acquisition Date

The Europe Company	$	12,953	$	1,830	$	11,123	Aug. 2000	$	12,953	$	1,830	$	11,123	Aug.2000
Lawrence Helfant, Inc.		23,477		—		23,477	Sept. 2001		23,853		—		23,853	Sept.2001
Bonds Direct Securities LLC									300		—		300	June2002

	$	36,430	$	1,830	$	34,600		$	37,106	$	1,830	$	35,276

Three Months Ended Six Months Ended

June 28, June 29, June 28, June 29,
2002 2001 2002 2001

Reported earnings before extraordinary item $ 18,095 $ 16,552 $ 35,767 $ 32,236
Add back goodwill amortization — 269 — 595

Adjusted earnings before extraordinary item 18,095 16,821 35,767 32,831
Extraordinary item — loss on early extinguishment of debt, net of tax (480 ) — (480 ) —

Adjusted net earnings $ 17,615 $ 16,821 $ 35,287 $ 32,831

Page 10 of 18

JEFFERIES GROUP, INC. AND SUBSIDIARIES

Earnings per Share

The following reconciles the numerators and denominators of the basic and diluted earnings per share computations for the three month and six month periods ended ~~March 29,~~June 28, 2002 and ~~March 30,~~June 29, 2001 (in thousands, except per share amounts):

Three Months Ended

March 29, March 30,
2002 2001

Net earnings $ 17,672 $ 15,684

Shares for basic and diluted calculations:
Average shares used in basic computation 24,766 24,039
Stock options 879 420
Restricted stock 1,735 602

Average shares used in diluted computation 27,380 25,061

Earnings per share:
Basic $ 0.71 $ 0.65

Diluted $ 0.65 $ 0.63

~~Page 10 of 15~~

~~JEFFERIES GROUP, INC. AND SUBSIDIARIES~~

Three Months Ended Six Months Ended

June 28, June 29, June 28, June 29,
2002 2001 2002 2001

Earnings before extraordinary item $ 18,095 $ 16,552 $ 35,767 $ 32,236
Extraordinary item — loss on early extinguishment of debt, net of tax (480 ) — (480 ) —

Net earnings $ 17,615 $ 16,552 $ 35,287 $ 32,236

Shares for basic and diluted calculations:
Average shares used in basic computation 24,626 24,206 24,695 24,124
Stock options 895 529 887 472
Restricted stock 1,915 829 1,825 725

Average shares used in diluted computation 27,436 25,564 27,407 25,321

Earnings per share:
Basic:
Earnings before extraordinary item $ 0.73 $ 0.68 $ 1.45 $ 1.34
Early extinguishment of debt (0.01 ) — (0.02 ) —

Net earnings $ 0.72 $ 0.68 $ 1.43 $ 1.34

Diluted:
Earnings before extraordinary item $ 0.66 $ 0.65 $ 1.31 $ 1.27
Early extinguishment of debt (0.02 ) — (0.02 ) —

Net earnings $ 0.64 $ 0.65 $ 1.29 $ 1.27

Asset Management

The following summarizes revenues from asset management for the three month and six month periods ended ~~March 29,~~June 28, 2002 and ~~March 30,~~June 29, 2001 (in thousands of dollars):

Three Months Ended

March 29, March 30,
2002 2001

High Yield (HY)
Performance based $ 1,798 $ 3,386
Asset based 826 500
Non-HY Employee Funds 86 81
International 777 762

Total $ 3,487 $ 4,729

Three Months Ended Six Months Ended

June 28, June 29, June 28, June 29,
2002 2001 2002 2001

High Yield (HY) Performance based $ 1,237 $ 4,489 $ 3,035 $ 7,875
Asset based 789 537 1,615 1,037
Non-HY Employee Funds 84 84 171 165
International 614 701 1,390 1,463

Total $ 2,724 $ 5,811 $ 6,211 $ 10,540

Page 11 of 18
JEFFERIES GROUP, INC. AND SUBSIDIARIES
Other Comprehensive ~~Loss~~Gain (Loss)
     The following summarizes other comprehensive gain and accumulated other comprehensive loss at June 28, 2002 and for the three months then ended (in thousands of dollars):

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Loss

Beginning at March 29, 2002 $ (3,356 ) $ (2,301 ) $ (5,657 )
Change in second quarter of 2002 3,240 — 3,240

Ending at June 28, 2002 $ (116 ) $ (2,301 ) $ (2,417 )

     The following summarizes other comprehensive loss and accumulated other comprehensive loss at ~~March~~June 29, ~~2002~~2001 and for the three months then ended (in thousands of dollars):

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Loss

Beginning at March 30, 2001 $ (3,311 ) $ (1,138 ) $ (4,449 )
Change in second quarter of 2001 (143 ) — (143 )

Ending at June 29, 2001 $ (3,454 ) $ (1,138 ) $ (4,592 )

     Comprehensive income for the three months ended June 28, 2002 and June 29, 2001 was as follows:

Before-Tax Income Tax Net-of-Tax
Amount or Benefit Amount

Currency translation adjustments $ (953 ) $ — $ (953 )
Minimum pension liability adjustment — — —

Other comprehensive loss $ (953 ) $ — $ (953 )

June 28, June 29,
2002 2001

Net earnings $ 17,615 $ 16,552
Other comprehensive gain (loss) 3,240 (143 )

Comprehensive income $ 20,855 $ 16,409

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Loss

Beginning at December 31, 2001 $ (2,403 ) $ (2,301 ) $ (4,704 )
Change in first quarter of 2002 (953 ) — (953 )

Ending at March 29, 2002 $ (3,356 ) $ (2,301 ) $ (5,657 )

     The following summarizes other comprehensive gain and accumulated other comprehensive loss at June 28, 2002 and for the six months then ended (in thousands of dollars):

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Loss

Beginning at December 31, 2001 $ (2,403 ) $ (2,301 ) $ (4,704 )
Change in first half of 2002 2,287 — 2,287

Ending at June 28, 2002 $ (116 ) $ (2,301 ) $ (2,417 )

     The following summarizes other comprehensive loss and accumulated other comprehensive loss at ~~March 30,~~June 29, 2001 and for the ~~three~~six months then ended (in thousands of dollars):

Before-Tax Income Tax Net-of-Tax
Amount or Benefit Amount

Currency translation adjustments $ (2,426 ) $ — $ (2,426 )
Minimum pension liability adjustment — — —

Other comprehensive loss $ (2,426 ) $ — $ (2,426 )

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Loss

Beginning at December 31, 2000 $ (885 ) $ (1,138 ) $ (2,023 )
Change in first quarter of 2001 (2,426 ) — (2,426 )

Ending at March 30, 2001 $ (3,311 ) $ (1,138 ) $ (4,449 )

Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Loss

Beginning at December 31, 2000 $ (885 ) $ (1,138 ) $ (2,023 )
Change in first half of 2001 (2,569 ) — (2,569 )

Ending at June 29, 2001 $ (3,454 ) $ (1,138 ) $ (4,592 )

Page 1112 of 1518
JEFFERIES GROUP, INC. AND SUBSIDIARIES
     Comprehensive income for the ~~three~~six months ended March 29, 2002 and March 30, 2001 was as follows:

March 29, March 30, June 28, June 29,
2002 2001 2002 2001

Net earnings $ 17,672 $ 15,684 $ 35,287 $ 32,236
Other comprehensive loss (953 ) (2,426 )
Other comprehensive gain (loss) 2,287 (2,569 )

Comprehensive income $ 16,719 $ 13,258 $ 37,574 $ 29,667

Net Capital Requirements
     As registered broker-dealers, JEFCO and Helfant are subject to the Securities and Exchange Commission’s Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital. JEFCO and Helfant have elected to use the alternative method permitted by the Rule, which requires that they each maintain minimum net capital, as defined, equal to the greater of $250,000 or 2% of the aggregate debit balances arising from customer transactions, as defined.
     Net capital changes from day to day, but as of ~~March 29,~~June 28, 2002, JEFCO’s and Helfant’s net capital was ~~$144.1~~$199.6 million and ~~$4.6~~$4.3 million, respectively, which exceeded minimum net capital requirements by ~~$138.1~~$194.9 million and ~~$4.4~~$4.1 million, respectively.
Quarterly Dividends
     In 1988, the Company instituted a policy of paying regular quarterly dividends. There are no restrictions on the Company’s present ability to pay dividends on common stock, other than the governing provisions of the Delaware General Corporation Law.
     Dividends per Common Share (declared and paid):

1^st Qtr. 1^st Qtr. 2^nd Qtr

2002 $ .05 $ .05 $ .05
2001 $ .05 $ .05 $ .05
Off-Balance Sheet Risk
     In the normal course of business, the Company had letters of credit outstanding aggregating ~~$36.8~~$41.5 million at ~~March 29,~~June 28, 2002, to satisfy various collateral requirements in lieu of depositing cash or securities.
Segment Reporting
     The company’s operations have been classified into a single business segment, a securities broker-dealer, which includes several types of financial services. This segment includes the traditional securities brokerage and investment banking activities of the Company. The Company’s business is predominantly in the United States with ~~less than~~about 10% of revenues and 2%3% of assets attributable to international operations.
~~Subsequent Event — Redemption~~Page 13 of ~~8 7/8% Senior Notes~~
     On April 10, 2002, the Company announced its decision to call its $50 million aggregate principal amount of 8 7/8% Senior Notes due 2004 (“Notes”) for redemption on May 13, 2002. Pursuant to the terms of the Notes, holders will receive $1,012 in cash per $1,000 principal amount, plus accrued interest.
~~Page 12 of 15~~18
JEFFERIES GROUP, INC. AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Analysis of Financial Condition
     Total assets ~~increased $561.0~~decreased $254.7 million from $5,344.7 million at December 31, 2001 to ~~$5,905.7~~$5,090.0 million at ~~March 29,~~June 28, 2002. The ~~increase~~decrease in total assets mostly relates to ~~increases~~a decrease of ~~$293.6~~$585.5 million in ~~investments, $170.9 million in securities owned, and $127.3 million in receivables~~receivable from brokers and ~~dealers.~~dealers, partially offset by an increase of $243.9 million in investments. Total liabilities decreased $282.5 million from $4,779.1 million at December 31, 2001 to $4,496.6 million at June 28, 2002. The ~~increases~~decrease in ~~assets were primarily funded~~total liabilities mostly relates to a decrease of $699.0 million in payable to brokers and dealers, partially offset by the issuance of $325 million aggregate principal amount of unsecured ~~7 3/~~73/4% senior notes due March 15, 2012 and ~~$134.0~~$71.0 million more in bank loans.
~~First~~Revenues by Source
     The following provides a breakdown of total revenues by source for the three and six months ended June 28, 2002 and June 29, 2001.

Three Months Ended

June 28, 2002 June 29, 2001

% of % of
Total Total
Amount Revenues Amount Revenues

(Dollars in thousands)
Commissions and principal transactions:
Equities $ 76,257 38 % $ 83,889 39 %
International 19,563 10 15,659 7
High Yield 9,826 5 17,897 8
Convertibles 7,573 4 6,718 3
Execution 8,262 4 385 0
Other proprietary trading 8,870 4 1,715 1

Total 130,351 65 126,263 58
Corporate finance 41,650 21 44,077 20
Interest 24,447 12 38,332 18
Asset management 2,724 1 5,811 3
Other 1,705 1 1,414 1

Total revenues $ 200,877 100 % $ 215,897 100 %

Page 14 of 18
JEFFERIES GROUP, INC. AND SUBSIDIARIES

Six Months Ended

June 28, 2002 June 29, 2001

% of % of
Total Total
Amount Revenues Amount Revenues

(Dollars in thousands)
Commissions and principal transactions:
Equities $ 159,420 40 % $ 184,438 43 %
International 36,548 9 35,099 8
High Yield 20,089 5 34,079 8
Convertibles 15,036 4 17,104 4
Execution 17,088 4 867 0
Other proprietary trading 13,410 4 2,050 1

Total 261,591 66 273,637 64
Corporate finance 79,318 20 61,089 14
Interest 46,076 12 78,276 18
Asset management 6,211 1 10,540 3
Other 3,023 1 2,063 1

Total revenues $ 396,219 100 % $ 425,605 100 %

Second Quarter 2002 Versus ~~First~~Second Quarter 2001
     Revenues, net of interest expense, were ~~$177.7~~$178.1 million, compared to ~~$176.9~~$181.4 million for the ~~first~~second quarter of 2001. The slight ~~increase~~decrease was due primarily to a ~~$20.7~~$3.1 million, or ~~121%~~53%, ~~increase~~decrease in asset management, a $2.4 million, or 6%, decrease in corporate finance, and a ~~$4.0~~$2.2 million, or ~~7%, increase in commissions, partially offset by a $20.2 million, or 23%, decrease in principal transactions, a $3.1 million, or 44%~~56%, decrease in net interest income (interest revenues less interest expense) ~~and~~, partially offset by a ~~$1.2~~$4.1 million, or ~~26%~~3%, ~~decrease~~increase in ~~asset management. Commissions~~trading revenues (commissions and principal transactions). Trading revenues increased mostly due to the ~~addition of the~~ Helfant execution ~~business. Principal transaction revenues decreased mostly due to~~business, which was acquired on September 28, 2001 and the ~~Equities~~other proprietary trading activities of stock loan and Bonds Direct, partially offset by High Yield ~~Divisions.~~and Equities. Corporate finance revenues ~~increased~~decreased due mostly to a reduction in fees from debt offerings, partially offset by an increase in advisory fees. The reduction in fees from debt offerings was primarily in the Consumer Business and Energy industries, while the rise in ~~debt offerings~~advisory fees was mostly in the Telecommunications and ~~advisory fees.~~Gaming industries. Net interest income was down largely due to a decreased spread on the securities borrowed and loaned matched book business. Asset management revenues decreased due to ~~the decrease~~a reduction in ~~revenue attributable to~~performance fees from the High Yield Funds.
     Total non-interest expenses decreased slightly to ~~$147.8~~$147.5 million, compared to ~~$149.8~~$152.9 million for the ~~first~~second quarter of 2001. ~~Other expense~~Compensation and benefits decreased ~~$3.7~~$9.5 million, or ~~42%~~9%, ~~largely~~mostly due to ~~lower legal and general consulting expenses.~~a decrease in the equity trading payout. Floor brokerage and clearing fees increased ~~$3.2~~$2.3 million, or ~~30%~~20%, due to increased volume of business executed on the various exchanges, including additional volume related to ~~Helfant, which was acquired on September 28, 2001. Compensation and benefits decreased $2.9~~Helfant. Communications increased $1.8 million, or 3%14%, mostly due to ~~a decrease in incentive based compensation accruals. Travel and promotional increased $695,000, or 12%, largely due to increased business travel.~~the addition of Helfant. Occupancy and equipment rental, ~~increased $666,000, or 12%, mostly due to office expansion. Communications~~travel and promotional and other expense all remained relatively unchanged as compared to the prior year’s quarter.
     Earnings before income taxes and extraordinary item were up ~~10%~~7% to ~~$30.0~~$30.7 million, compared to ~~$27.1~~$28.6 million for the same prior year period. The effective tax rate was approximately 41% for the second quarter of 2002 compared to 42% for the second quarter of 2001. Earnings before extraordinary item were up $1.5 million, or 9%, to $18.1 million, compared to $16.6 million for the same prior year period. The extraordinary item relates to a $480,000 after tax loss on the early extinguishment of $50 million face value of 8?% senior notes due 2004. Net earnings were up $1.1 million, or 6%, to $17.6 million, compared to $16.6 million for the same prior year period.
Page 15 of 18
JEFFERIES GROUP, INC. AND SUBSIDIARIES
     Basic earnings per share before extraordinary item were $0.73 for the second quarter of 2002 on 24,626,000 shares compared to $0.68 in the 2001 period on 24,206,000 shares. Diluted earnings per share before extraordinary item were $0.66 for the second quarter of 2002 on 27,436,000 shares compared to $0.65 in the comparable 2001 period on 25,564,000 shares.
     Basic net earnings per share were $0.72 for the second quarter of 2002 on 24,626,000 shares compared to $0.68 in the 2001 period on 24,206,000 shares. Diluted net earnings per share were $0.64 for the second quarter of 2002 on 27,436,000 shares compared to $0.65 in the comparable 2001 period on 25,564,000 shares.
First Half 2002 Versus First Half 2001
     Revenues, net of interest expense, were $355.9 million, compared to $358.3 million for the first half of 2001. The slight decrease was due primarily to a $12.0 million, or 4%, decrease in trading revenues (commissions and principal transactions), a $5.3 million, or 48%, decrease in net interest income (interest revenues less interest expense) and a $4.3 million, or 41%, decrease in asset management, partially offset by, a $18.2 million, or 30%, increase in corporate finance and a $960,000 increase in other income. Trading revenues decreased mostly due to High Yield and Equities, partially offset by increase from the Helfant execution business, which was acquired on September 28, 2001 and the other proprietary trading activities of stock loan, firm investment and Bonds Direct. Corporate finance revenues increased due mostly to a rise in advisory fees. The rise in advisory fees was primarily in the Telecommunications and Gaming industries. Net interest income was down largely due to a decreased spread on the securities borrowed and loaned matched book business. Asset management revenues decreased due to a reduction in performance fees from the High Yield Funds. Other income increased mostly due to higher correspondent revenue.
     Total non-interest expenses decreased slightly to $295.2 million, compared to $302.6 million for the first half of 2001. Compensation and benefits decreased $12.4 million, or 6%, mostly due to a decrease in the equity trading payout. Floor brokerage and clearing fees increased $5.5 million, or 25%, due to increased volume of business executed on the various exchanges, including additional volume related to Helfant. Other expense decreased $3.6 million or 24%, largely due to lower legal and general consulting expenses. Communications increased $1.8 million, or 8%, mostly due to the addition of Helfant. Occupancy and equipment rental increased $679,000, or 6%, mostly due to office expansion. Travel and promotional increased $678,000, or 6%, largely due to increased advertising and promotion.
     Earnings before income taxes and extraordinary item were up 9% to $60.6 million, compared to $55.7 million for the same prior year period. The effective tax rate was approximately 41% for the first ~~quarter~~half of 2002 compared to 42% for the first ~~quarter~~half of 2001. Earnings before extraordinary item were up $3.5 million, or 11%, to $35.8 million, compared to $32.2 million for the same prior year period. The extraordinary item relates to a $480,000 after tax loss on the early extinguishment of $50 million face value of 8?% senior notes due 2004. Net earnings were up ~~$2.0~~$3.1 million, or ~~13%~~9%, to ~~$17.7~~$35.3 million, compared to ~~$15.7~~$32.2 million for the same prior year period.
     Basic earnings per share before extraordinary item were $1.45 for the first half of 2002 on 24,695,000 shares compared to $1.34 in the 2001 period on 24,124,000 shares. Diluted earnings per share before extraordinary item were $1.31 for the first half of 2002 on 27,407,000 shares compared to $1.27 in the comparable 2001 period on 25,321,000 shares.
     Basic net earnings per share were ~~$0.71~~$1.43 for the first ~~quarter~~half of 2002 on ~~24,766,000~~24,695,000 shares compared to ~~$0.65~~$1.34 in the 2001 period on ~~24,039,000~~24,124,000 shares. Diluted net earnings per share were ~~$0.65~~$1.29 for the first ~~quarter~~half of 2002 on ~~27,380,000~~27,407,000 shares compared to ~~$0.63~~$1.27 in the comparable 2001 period on ~~25,061,000~~25,321,000 shares.
Liquidity and Capital Resources
     The Company’s liquidity and capital resources is largely unchanged since December 31, 2001, except for the issuance of $325 million aggregate principal amount of ~~unsecured 7 3/~~73/4% senior notes due March 15, ~~2012.~~2012 and the retirement of $50 million aggregate principal amount of 8?% senior notes due 2004.
Page 1316 of 1518
JEFFERIES GROUP, INC. AND SUBSIDIARIES
~~Revenues by Source~~
     ~~The following provides a breakdown~~     During the six months ended June 28, 2002, the Company purchased 882,400 shares of ~~total revenues by source~~treasury stock for $37.1 million, at prices ranging from $40.58 to $48.55 per share versus 237,000 shares of treasury stock for $6.7 million, at prices ranging from $26.21 to $31.00 per share for the ~~three months ended March 29, 2002 and March 30, 2001.~~comparable 2001 period.

Three Months Ended

March 29, 2002 March 30, 2001

% of % of
Total Total
Amount Revenues Amount Revenues

(Dollars in thousands)
Commissions and principal transactions:
Equities $ 83,163 43 % $ 100,549 48 %
International 16,985 9 19,440 9
High Yield 10,263 5 16,182 8
Convertibles 7,463 4 10,386 5
Execution 8,826 4 482 0
Other proprietary trading 4,540 2 335 0

Total 131,240 67 147,374 70
Corporate finance 37,668 19 17,012 8
Interest 21,629 11 39,944 19
Asset management 3,487 2 4,729 2
Other 1,318 1 649 1

Total revenues $ 195,342 100 % $ 209,708 100 %

Item 3. Quantitative and Qualitative Disclosures About Market Risk
     The Company’s market risk is largely unchanged from December 31, 2001, except for the issuance of $325 million aggregate principal amount of ~~unsecured~~ 7 3/4% senior notes due March 15, 2012, ~~and~~the related interest rate swaps to convert $200 million aggregate principal amount of the notes into floating rates based upon ~~LIBOR.~~LIBOR and the retirement of $50 million aggregate principal amount of 8 7/8% senior notes due 2004.
PART II. OTHER INFORMATION

Item 1. Legal Proceedings
     Many aspects of the Company’s business involve substantial risks of liability. In the normal course of business, the Company and its subsidiaries have been named as defendants or co-defendants in lawsuits involving primarily claims for damages. The Company’s management believes that pending litigation will not have a material adverse effect on the Company.
Item 4. Submission of Matters to a Vote of Security Holders
     An annual meeting of the Company’s shareholders was held on May 23, 2002. At the meeting, with respect to the matters under consideration, the following votes were cast in the following manner:

For Withheld Non-vote

Election of Directors

W. Patrick Campbell 13,423,920 91,729 0
Richard G. Dooley 13,423,052 92,597 0
Richard B. Handler 12,005,085 1,510,564 0
Sheldon B. Lubar 13,423,052 92,597 0
Frank J. Macchiarola 13,422,261 93,388 0
John C. Shaw, Jr. 12,006,976 1,508,673 0
Item 6. Exhibits and Reports on Form 8-K
~~(a)~~ ~~Exhibits~~
(a)Exhibits
~~(10.8)~~ ~~Letter agreement between Frank E. Baxter and Registrant dated February 15, 2002.~~
~~(b)~~(3.1) ~~Reports~~Registrant’s Amended and Restated Certificate of Incorporation is incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on ~~8-K~~April 30, 1999.

(3.2) ~~On March 12, 2002,~~Registrant’s By-Laws are incorporated by reference to Exhibit 3.2 of Registrant’s Form 10 filed on April 20, 1999.
(99.1)* Certification by the ~~Company filed a Form 8-K disclosing its underwriting agreement, dated March 7, 2002, with respect~~Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the ~~sale~~Sarbanes-Oxley Act of ~~its 7 3/4% Senior Notes due 2012.~~2002.
* Filed herewith.
(b)Reports on 8-K
      None.
Page 1417 of 1518
JEFFERIES GROUP, INC. AND SUBSIDIARIES
SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~JEFFERIES GROUP, INC.~~
~~(Registrant)~~
JEFFERIES GROUP, INC.

~~Date:~~               ~~May 10, 2002~~           ~~By:~~      ~~/s/     Joseph A. Schenk~~

(Registrant)
Date: August 12, 2002 By: /s/   Joseph A. Schenk
Joseph A. Schenk
Chief Financial Officer
Page 1518 of 1518


			Page

PART I.I	~~FINANCIAL INFORMATION~~		FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Consolidated Statements of Financial Condition - ~~March 29,~~ June 28, 2002 (unaudited) and December 31, 2001		3

		Consolidated Statements of Earnings (unaudited) - Three Months and Six Months Ended ~~March 29,~~June 28, 2002 and ~~March 30,~~June 29, 2001		4

		Consolidated Statement of Changes in Stockholders’ Equity (unaudited) - ~~Three~~ Six Months Ended ~~March 29,~~June 28, 2002		5

		Consolidated Statements of Cash Flows (unaudited) - ~~Three~~ Six Months Ended ~~March 29,~~June 28, 2002 and ~~March 30,~~June 29, 2001		6

		Notes to Consolidated Financial Statements (unaudited)		8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14	13

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17	14

PART ~~II.~~II	~~OTHER INFORMATION~~		OTHER INFORMATION

	Item 1.	Legal Proceedings	17	14

	Item 4.	Submission of Matters to a Vote of Security Holders	17

	Item 6.	Exhibits and Reports on Form 8-K		14	17


				Minimum			Accumulated
	Currency			Pension			Other
	Translation			Liability			Comprehensive
	Adjustments			Adjustment			Loss

Beginning at March 29, 2002	$	(3,356	)	$	(2,301	)	$	(5,657	)
Change in second quarter of 2002		3,240			—			3,240

Ending at June 28, 2002	$	(116	)	$	(2,301	)	$	(2,417	)


	Before-Tax			Income Tax		Net-of-Tax
	Amount			or Benefit		Amount

Currency translation adjustments	$	(953	)	$	—	$	(953	)
Minimum pension liability adjustment		—			—		—

Other comprehensive loss	$	(953	)	$	—	$	(953	)


		Three Months Ended

		June 28, 2002					June 29, 2001

				% of					% of
				Total					Total
		Amount		Revenues			Amount		Revenues

				(Dollars in thousands)
Commissions and principal transactions:
	Equities	$	76,257		38	%	$	83,889		39	%
	International		19,563		10			15,659		7
	High Yield		9,826		5			17,897		8
	Convertibles		7,573		4			6,718		3
	Execution		8,262		4			385		0
	Other proprietary trading		8,870		4			1,715		1

	Total		130,351		65			126,263		58
Corporate finance			41,650		21			44,077		20
Interest			24,447		12			38,332		18
Asset management			2,724		1			5,811		3
Other			1,705		1			1,414		1

	Total revenues	$	200,877		100	%	$	215,897		100	%


		Three Months Ended

		March 29, 2002					March 30, 2001

				% of					% of
				Total					Total
		Amount		Revenues			Amount		Revenues

		(Dollars in thousands)
Commissions and principal transactions:
	Equities	$	83,163		43	%	$	100,549		48	%
	International		16,985		9			19,440		9
	High Yield		10,263		5			16,182		8
	Convertibles		7,463		4			10,386		5
	Execution		8,826		4			482		0
	Other proprietary trading		4,540		2			335		0

	Total		131,240		67			147,374		70
Corporate finance			37,668		19			17,012		8
Interest			21,629		11			39,944		19
Asset management			3,487		2			4,729		2
Other			1,318		1			649		1

	Total revenues	$	195,342		100	%	$	209,708		100	%


	For		Withheld		Non-vote

Election of Directors
W. Patrick Campbell		13,423,920		91,729		0
Richard G. Dooley		13,423,052		92,597		0
Richard B. Handler		12,005,085		1,510,564		0
Sheldon B. Lubar		13,423,052		92,597		0
Frank J. Macchiarola		13,422,261		93,388		0
John C. Shaw, Jr.		12,006,976		1,508,673		0

~~(b)~~(3.1)		~~Reports~~Registrant’s Amended and Restated Certificate of Incorporation is incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on ~~8-K~~April 30, 1999.

(3.2)		~~On March 12, 2002,~~Registrant’s By-Laws are incorporated by reference to Exhibit 3.2 of Registrant’s Form 10 filed on April 20, 1999.

(99.1)*		Certification by the ~~Company filed a Form 8-K disclosing its underwriting agreement, dated March 7, 2002, with respect~~Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the ~~sale~~Sarbanes-Oxley Act of ~~its 7 3/4% Senior Notes due 2012.~~2002.

		JEFFERIES GROUP, INC.

~~Date:~~ ~~May 10, 2002~~	~~By:~~	~~/s/ Joseph A. Schenk~~

		(Registrant)

August 12, 2002

/s/ Joseph A. Schenk

Joseph A. Schenk
Chief Financial Officer