<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-Q
-------------
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995
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: 1-5721
LEUCADIA NATIONAL CORPORATION
- ---------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
New York 13-2615557
- -------------------------------- --------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) No.)
315 Park Avenue South, New York, New York 10010-3607
(212) 460-1900
- ---------------------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including Area Code
of Registrant's Principal Executive Offices)
N/A
- ---------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
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 [_]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes [_] No [_]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock at May 8, 1995:
28,143,512.
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS.
LEUCADIA NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Dollars in thousands, except par value)
<TABLE>
<CAPTION>
MARCH 31, December 31,
1995 1994
---------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Investments:
Available for sale (aggregate cost of $2,397,947 and $2,396,288) $ 2,380,614 $ 2,331,288
Trading securities (aggregate cost of $46,798 and $53,312) 49,697 52,231
Held to maturity (aggregate fair value of $54,021 and $52,820) 54,798 54,586
Policyholder loans 17,372 17,943
Other long-term investments, including accrued interest income 53,003 56,347
------------ -------------
Total investments 2,555,484 2,512,395
Cash and cash equivalents 299,981 252,495
Reinsurance receivable, net 301,554 310,682
Trade, notes and other receivables, net 548,655 463,981
Prepaids and other assets 252,231 245,476
Property, equipment and leasehold improvements, net 113,019 110,887
Deferred policy acquisition costs 85,227 74,536
Deferred income taxes 121,890 144,631
Separate and variable accounts 419,692 420,398
Investments in associated companies 142,497 138,565
------------ -------------
Total $ 4,840,230 $ 4,674,046
============ =============
LIABILITIES
Customer banking deposits $ 191,989 $ 179,888
Trade payables and expense accruals 239,536 189,280
Other liabilities 135,498 106,046
Income taxes payable 41,866 39,491
Policy reserves 1,960,121 1,964,730
Unearned premiums 441,173 413,546
Separate and variable accounts 418,550 419,355
Liability for unredeemed trading stamps 40,621 42,433
Debt, including current maturities 429,430 425,848
------------ -------------
Total liabilities 3,898,784 3,780,617
------------ -------------
Minority interest 12,605 11,614
------------ -------------
SHAREHOLDERS' EQUITY
Common shares, par value $1 per share, authorized 150,000,000 shares;
28,141,012 and 28,050,037 shares issued and outstanding, after deducting
30,282,563 and 30,272,650 shares held in treasury 28,141 28,050
Additional paid-in capital 126,647 126,225
Net unrealized (loss) on investments (11,119) (41,309)
Retained earnings 785,172 768,849
------------ -------------
Total shareholders' equity 928,841 881,815
------------ -------------
Total $ 4,840,230 $ 4,674,046
============ =============
</TABLE>
See notes to interim consolidated financial statements.
-2-
<PAGE>
<PAGE>
LEUCADIA NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended March 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---- ----
(In thousands, except per share amounts)
<S> <C> <C>
REVENUES:
Insurance revenues and commissions $ 234,960 $ 217,583
Manufacturing 45,164 46,650
Trading stamps 4,870 5,207
Finance 13,150 9,670
Investment and other income 62,132 58,465
Net securities gains (losses) 412 (1,467)
----------- -----------
360,688 336,108
----------- -----------
EXPENSES:
Provision for insurance losses and policy benefits 196,828 187,114
Amortization of deferred acquisition costs 23,153 20,879
Cost of goods sold:
Manufacturing 34,261 32,489
Trading stamps 1,262 55
Interest 11,797 10,771
Salaries 21,525 20,927
Selling, general and other expenses 48,308 41,597
Minority interest 132 242
----------- -----------
337,266 314,074
----------- -----------
Income before income taxes 23,422 22,034
----------- -----------
Income taxes:
Current 1,076 3,931
Deferred 6,023 3,884
----------- -----------
7,099 7,815
----------- -----------
Net income $ 16,323 $ 14,219
=========== ===========
Earnings per common and dilutive common equivalent share $ .56 $ .49
===== =====
Fully diluted earnings per common share $ .56 $ .49
===== =====
</TABLE>
See notes to interim consolidated financial statements.
-3-<PAGE>
<PAGE>
LEUCADIA NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---- ----
(Thousands of dollars)
<S> <C> <C>
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 16,323 $ 14,219
Adjustments to reconcile net income to net cash provided by operations:
Provision for deferred income taxes 6,023 3,884
Depreciation and amortization of property, equipment and leasehold improvements 4,459 4,246
Other amortization 23,301 23,961
Provision for doubtful accounts 2,615 2,869
Net securities (gains) losses (412) 1,467
Equity in losses of associated companies 105 2,765
(Gain) related to El Salvador Government bonds receivable -- (8,458)
Purchases of investments classified as trading (11,820) (24,340)
Proceeds from sales of investments classified as trading 21,098 26,371
Deferred policy acquisition costs incurred and deferred (33,844) (25,863)
Net change in:
Reinsurance receivable 9,128 17,048
Trade, notes and other receivables (49,244) (44,019)
Prepaids and other assets (10,211) (13,084)
Trade payables and expense accruals (14,976) (3,908)
Other liabilities 27,386 15,935
Income taxes 2,375 (908)
Policy reserves 1,126 1,550
Unearned premiums 27,627 22,255
Other 700 744
----------- ----------
Net cash provided by operating activities 21,759 16,734
----------- ----------
NET CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of real estate, property, equipment and leasehold improvements (11,408) (4,705)
Proceeds from disposals of real estate, property and equipment 2,803 931
Advances on loan receivables (41,837) (38,709)
Principal collections on loan receivables 33,582 30,876
Purchases of investments (other than short-term) (246,622) (295,293)
Proceeds from maturities of investments 107,550 123,026
Proceeds from sales of investments 171,824 230,675
----------- ----------
Net cash provided by investing activities 15,892 46,801
----------- ----------
NET CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in credit agreement and other short-term borrowings 1,125 (340)
Net change in customer banking deposits 12,023 (2,386)
Net change in policyholder account balances (5,735) (5,327)
Issuance of long-term debt, net of issuance costs 2,720 --
Reduction of long-term debt (298) (4,604)
----------- ----------
Net cash provided by (used for) financing activities 9,835 (12,657)
----------- ----------
Net increase in cash and cash equivalents 47,486 50,878
Cash and cash equivalents at January 1, 252,495 291,414
----------- ----------
Cash and cash equivalents at March 31, $ 299,981 $ 342,292
=========== ==========
</TABLE>
See notes to interim consolidated financial statements.
-4-
<PAGE>
<PAGE>
LEUCADIA NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the three months ended March 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
Net
Common Unrealized
Shares Additional Gain
$1 Par Paid-In (Loss) on Retained
Value Capital Investments Earnings Total
---------- ----------- ----------- -------- -----
(Thousands of dollars)
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1994 $ 27,897 $ 125,013 $ 49,912 $ 705,034 $ 907,856
Exercise of options to purchase
common shares 53 468 521
Purchase of stock for treasury (1) (29) (30)
Net change in unrealized gain (loss)
on investments (50,060) (50,060)
Net income 14,219 14,219
---------- ----------- ----------- ----------- -----------
BALANCE, MARCH 31, 1994 $ 27,949 $ 125,452 $ (148) $ 719,253 $ 872,506
========== =========== =========== =========== ===========
BALANCE, JANUARY 1, 1995 $ 28,050 $ 126,225 $ (41,309) $ 768,849 $ 881,815
Exercise of options to purchase
common shares 101 882 983
Purchase of stock for treasury (10) (460) (470)
Net change in unrealized gain (loss)
on investments 30,190 30,190
Net income 16,323 16,323
---------- ----------- ----------- ----------- -----------
BALANCE, MARCH 31, 1995 $ 28,141 $ 126,647 $ (11,119) $ 785,172 $ 928,841
========== =========== =========== =========== ===========
</TABLE>
See notes to interim consolidated financial statements.
-5-
<PAGE>
<PAGE>
LEUCADIA NATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited interim consolidated financial statements, which reflect
all adjustments (consisting only of normal recurring items) that
management believes necessary to present fairly results of interim
operations, should be read in conjunction with the Notes to
Consolidated Financial Statements (including the Summary of Significant
Accounting Policies) included in the Company's audited consolidated
financial statements for the year ended December 31, 1994, which are
included in the Company's Annual Report filed on Form 10-K for such
year (the "1994 10-K"). Results of operations for interim periods are
not necessarily indicative of annual results of operations. The
consolidated balance sheet at December 31, 1994 was extracted from the
audited annual financial statements and does not include all
disclosures required by generally accepted accounting principles for
annual financial statements.
Certain amounts for prior periods have been reclassified to be
consistent with the 1995 presentation.
2. As more fully described in the 1994 10-K, the most recent statistical
studies of trading stamp redemptions have indicated that the historical
pattern of redemptions has changed and that the recorded liability for
unredeemed trading stamps is in excess of the amount that ultimately
will be required to redeem trading stamps outstanding. Accordingly,
the Company has been amortizing the aggregate apparent excess over a
five year period. As a result, cost of goods sold applicable to the
trading stamp operations reflects a credit of approximately $1,300,000
and $3,000,000 for three month periods ended March 31, 1995 and 1994,
respectively. Based on the latest studies, the unamortized apparent
excess at March 31, 1995 was approximately $4,000,000.
3. In March 1993, in settlement of claims related to El Salvador's 1986
seizure of the assets of Compania de Alumbrado Electrico de San
Salvador, S.A. ("CAESS"), the Company received cash of approximately
$5,300,000 and approximately $12,000,000 principal amount of 6% U.S.
dollar denominated El Salvador Government bonds due in instalments
through 1996. The Company has recognized the gain on the cash basis.
During the first quarter of 1994, the Company disposed of the remaining
bonds and reported a pre-tax gain of approximately $8,458,000, which
gain is included in the caption "Investment and other income."
4. Earnings per common and dilutive common equivalent share were
calculated by dividing net income by the sum of the weighted average
number of common shares outstanding and the incremental weighted
average number of shares issuable upon exercise of outstanding options
and warrants for the periods they were outstanding. The number of
shares used to calculate primary earnings per share amounts was
29,295,000 for 1995 and 29,146,000 for 1994.
Fully diluted earnings per share was calculated as described above and,
for 1995, also assumes the outstanding 5 1/4% Convertible Subordinated
Debentures due 2003 had been converted into Common Shares and earnings
increased for the interest on such debentures, net of the income tax
effect. Conversion was not assumed for the 1994 period since the
effect of such assumed conversion would have been to increase earnings
per share. The number of shares used to calculate fully diluted
earnings per share was 31,034,000 for 1995 and 29,146,0000 for 1994.
5. Cash paid (received) for interest and income taxes (net of refunds) was
$14,474,000 and $(1,299,000), respectively, for the three month period
ended March 31, 1995 and $13,405,000 and $4,944,000, respectively, for
the three month period ended March 31, 1994.
-6-<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF INTERIM OPERATIONS.
The following should be read in conjunction with the Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the 1994 10-K.
LIQUIDITY AND CAPITAL RESOURCES
During each of the three month periods ended March 31, 1995 and 1994, the
Company operated profitably and net cash was provided from operations.
During the first quarter of 1995, the Company did not utilize its bank
Credit Agreement facilities, except for certain minor amounts borrowed to
meet daily cash requirements.
As more fully described in the 1994 10-K, securities classified as
"available for sale" are carried at fair value with unrealized gains and
losses reflected as a separate component of shareholders' equity, net of
taxes. Principally as a result of decreases in market interest rates
during 1995, the unrealized loss on investments at the end of 1994
decreased to an unrealized loss of $11,119,000 as of March 31, 1995. While
this has resulted in an increase in shareholders' equity, it had no effect
on results of operations or cash flows.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 COMPARED TO THE THREE MONTHS
ENDED MARCH 31, 1994
Earned premium revenues of the Colonial Penn P&C Group were approximately
$115,167,000 and $105,724,000 for the three month periods ended March 31,
1995 and 1994, respectively. The increase in earned premiums principally
resulted from acquired blocks of assigned risk business from other
insurance companies, offset in part by modest declines in policies in force
in other business lines. However, voluntary automobile policies in force
at March 31, 1995 were slightly greater than policies in force at December
31, 1994, as new business generated in 1995 exceeded lapsed business.
Earned premium revenues and commissions of the property and casualty
insurance operations of the Empire Group were approximately $77,721,000 and
$68,658,000 for the three month periods ended March 31, 1995 and 1994,
respectively. The increase in premium revenue principally resulted from
growth of policies in force and rate increases.
The Company's loss ratios for its property and casualty operations were as
follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Loss Ratio:
GAAP 84.5% 88.9%
SAP 84.1% 88.9%
Expense Ratio:
GAAP 16.9% 17.1%
SAP 16.1% 16.2%
Combined Ratio:
GAAP 101.4% 106.0%
SAP 100.2% 105.1%
</TABLE>
The decrease in the combined ratios principally reflects lower aggregate
catastrophe losses and related loss adjustment expenses estimated at
approximately $700,000 and $15,950,000 (including approximately $10,900,000
related to the California earthquake) for the three month periods ended
March 31, 1995 and 1994, respectively. The improvement in the combined
ratios was partially offset by an increase in the loss ratio for the Empire
Group, principally resulting from increased claims frequency in automobile
lines.
-7-<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF INTERIM OPERATIONS, CONTINUED.
Earned premium revenues of the life and health insurance operations were
approximately $42,072,000 and $43,201,000 for the three month periods ended
March 31, 1995 and 1994, respectively. Premium revenues and provision for
insurance losses and policy benefits of the life and health operations
reflect the continued profitable growth of the Graded Benefit Life product.
Premium revenues also reflect the run-off of the agent sold medicare
supplement business, which had less favorable loss experience in 1995.
Manufacturing revenues of the bathroom vanities division decreased in 1995
as compared to 1994 principally due to reduced demand from customers. This
decrease was partially offset by increased sales at the plastics division.
The decrease in manufacturing gross profit in 1995 as compared to 1994
principally reflects the decrease in manufacturing sales and increased raw
material and labor costs at the bathroom vanities division and an increase
in raw material prices at the plastics division.
Trading stamp revenues decreased in 1995 compared to 1994 principally due
to reduced demand from existing customers. Cost of goods sold applicable
to the trading stamp operations reflects amortization of the apparent
excess in the liability for unredeemed trading stamps of approximately
$1,300,000 and $3,000,000 for the three month periods ended March 31, 1995
and 1994, respectively.
Finance revenues and operating profits reflect the level of consumer
instalment loans. As more fully described in the 1994 10-K, based on its
experience in providing collateralized automobile loans to individuals
with poor credit histories, the Company concluded that there were
opportunities for successful expansion of this business. Accordingly, on a
controlled basis the Company is increasing its investments in such loans.
Such loans approximated $134,345,000 at March 31, 1995 and $129,512,000 at
December 31, 1994.
Investment and other income increased in 1995 compared to 1994 as a result
of higher available interest rates and increased fee income related to
acquired blocks of automobile assigned risk business. Investment and other
income in 1994 includes approximately $8,458,000 related to the disposition
of the El Salvador Government bonds receivable, as described more fully
above.
Net securities gains (losses) were $412,000 in 1995 and $(1,467,000) in
1994. Included in the 1994 period are provisions for write-downs of
investments of approximately $3,568,000.
Higher interest expense in the three month period ended March 31, 1995
compared to the three month period ended March 31, 1994 principally
reflects increased deposits at the Company's banking and industrial loan
subsidiaries and an increase in interest rates related to these deposits.
The increase in selling, general and other expenses in 1995 as compared to
1994 principally reflects operating expenses of real estate properties
acquired during 1994 and expenses relating to certain investing activities.
The real estate properties acquired in 1994 did not generate significant
revenues during the 1995 period.
The 1995 provision for income taxes was reduced to reflect the favorable
resolution of a state tax matter, which was the principal reason for the
decrease in the effective tax rate as compared to 1994.
The number of shares used to calculate primary earnings per share amounts
was 29,295,000 for 1995 and 29,146,000 for 1994. The number of shares used
to calculate fully diluted earnings per share amounts was 31,034,000
for 1995 and 29,146,000 for 1994. The increase in the number of shares
utilized in calculating per share amounts was principally caused by
the increase in the market price of the Company's common stock. In
addition, for fully diluted per share amounts, the 5 1/4% Convertible
Subordinated Debentures due 2003 were not assumed to have been converted in
1994 since the effect of such assumed conversion would have been to
increase earnings per share.
-8-<PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
PHLCORP MERGER
The Court has entered an order scheduling a hearing for August 21,
1995 to consider approving the settlement.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
A) EXHIBITS.
10.1 Deferred Compensation Agreement, dated March 29, 1995,
between the Company and Lawrence S. Hershfield.
27 Financial Data Schedule.
B) REPORTS ON FORM 8-K.
None
-9-<PAGE>
<PAGE>
SIGNATURES
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.
LEUCADIA NATIONAL CORPORATION
(Registrant)
Date: May 11, 1995 By /s/ Joseph A. Orlando
-------------------------
Joseph A. Orlando
Vice President and Comptroller
(Principal Financial and
Accounting Officer)
-10-<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit Exemption
Number Description Indication
- ------ ----------- ----------
10.1 Deferred Compensation Agreement, dated March 29, 1995,
between the Company and Lawrence S. Hershfield.
27 Financial Data Schedule.
<PAGE>
EXHIBIT 10.1
DEFERRED COMPENSATION AGREEMENT
-------------------------------
THIS DEFERRED COMPENSATION AGREEMENT, made and entered into
this 29th day of March, 1995, by and between LEUCADIA NATIONAL
CORPORATION, a New York corporation (the "Company"), and Lawrence S.
Hershfield (the "Executive");
WITNESSETH:
----------
WHEREAS, Executive is employed by the Company as an
Executive Vice President; and
WHEREAS, at the Company's request, Executive will relocate
to Russia to oversee the development of investment opportunities for
the Company in Russia and the CIS and to manage such investments; and
WHEREAS, Executive will serve as President of a special
purpose subsidiary of the Company ("Leucadia-International") to be
formed as the vehicle through which investment opportunities in Russia
and the CIS will be explored and developed; and
WHEREAS, in connection with such relocation and provision of
services to Leucadia-International, the Executive desires to defer the
receipt of certain compensation from the Company and Leucadia-
International to which in the future he may become entitled, and the
Company has agreed to do so, in accordance with the terms and
provisions herein contained;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties hereto
hereby agree as follows:
1. The Company shall defer, and shall cause Leucadia-
International to defer, the payment of all compensation (excluding any
amounts placed in escrow pursuant to that certain Agreement between
the Executive and the Company dated as of March 29, 1995) to be paid
to Executive by the Company (or Leucadia-International) and not yet,
as of the date hereof, earned by Executive in excess of $78,000
($71,500 for 1995) in each calendar year, commencing in 1995. All
such deferred payments shall accrue simple interest (on the basis of a
360-day year), from the first day of the quarter immediately following
the date such payment otherwise would have been paid if no deferral
had been made, until the date of actual payment, at a rate of interest
equal to the 1-year Treasury bill rate in effect at such
NYFS04...:\30\76830\0198\570\AGR1265M.53A
<PAGE>
<PAGE>
date, and such rate shall be reset on the first day of each subsequent
quarter. For purposes hereof, the quarters shall begin February 1,
May 1, August 1, and November 1.
Amounts deferred pursuant to this Agreement, and interest
thereon, shall be payable to Executive in the calendar year (the
"Payment Year") immediately following the last calendar year in which
Executive was treated as a Russian resident for Russian tax purposes;
provided that without the prior consent of Executive no such payment
shall be made later than March 31 of the Payment Year. Any amount
deferred pursuant to this Agreement, and interest thereon, shall be
prepayable in whole or in part, without penalty, at any time at the
option of the Company if the Company reasonably believes that
Executive will not be treated as a Russian resident for Russian tax
purposes in the year such deferred compensation is to be prepaid.
Notwithstanding the preceding two sentences, to the extent that
aggregate deferred payments hereunder (including interest thereon)
exceed the maximum annual amount deductible as compensation by the
Company under applicable U.S. federal tax laws, the Company may make
such payments in two or more installments in different taxable years
to permit the Company to obtain the maximum annual deduction
available.
The rights of Executive to the payment of the amounts pursuant to
this Agreement shall be no greater than the rights of an unsecured
general creditor of the Company and may not be assigned, pledged or
otherwise transferred by him during his lifetime to any person,
whether by operation of law or otherwise, and shall not be subject to
execution, attachment or similar proceeding. By written notice
delivered to the Company, Executive may designate (or change a prior
designation of) one or more beneficiaries (or his estate) to receive
payment hereunder in the event of his death.
2. Deductions and Withholding.
--------------------------
Executive acknowledges and agrees that the Company
shall be entitled to withhold from his compensation all federal,
state, local or other taxes which the Company determines are required
to be withheld on amounts payable to Executive pursuant to this
Agreement or otherwise. Executive further agrees to indemnify the
Company and Leucadia International and hold each harmless from and
against any and all taxes (and penalties thereon) and interest with
respect thereto arising out of Executive's failure to pay fully his
tax liability pursuant to any present or future law, regulation or
ordinance of the United States of America or any state, city or
municipality therein.
<PAGE>
<PAGE>
3. Governing Law.
-------------
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
4. Entire Agreement.
----------------
This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, understandings and arrangements, both
oral and written, between the parties hereto with respect to such
subject matter. This Agreement may not be modified in any manner,
except by a written instrument signed by both the Company and Execu-
tive.
5. Notices.
-------
Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly
given when delivered by hand or facsimile transmission or when depo-
sited in the United States mail, by registered or certified mail,
return receipt requested, postage prepaid, as follows:
If to the Company: Leucadia National Corporation
315 Park Avenue South
New York, NY 10010
with a copy to: Jeffrey Rosen
O'Melveny & Myers
555 13th St., N.W.
Washington, D.C. 20004
<PAGE>
<PAGE>
If to Executive:
Lawrence S. Hershfield
c/o Leucadia National Corporation
315 Park Avenue South
New York, New York 10010
with a copy to:
Jeffrey J. Rosen, Esq.
O'Melveny & Myers
555 13th Street, N.W.
Washington, D.C. 20004-1109
or to such other addresses as either party hereto may from time to
time specify to the other.
6. Amounts deferred pursuant to this Deferred Compensation
Agreement shall be paid to Executive only as provided herein. At any
time, by notice in writing from Executive to the Company, Executive
may terminate this Deferred Compensation Agreement whereupon any
compensation earned by Executive subsequent to such notification will
not be subject to the provisions hereof. Amounts earned prior to any
such notification shall remain subject to the terms hereof even after
such termination.
7. Benefit; Binding Effect.
-----------------------
This Agreement shall be for the benefit of and binding upon
the parties hereto and their respective heirs, personal
representatives, legal representative, successors and, where
applicable, assigns.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this agreement as of the day and year first above
written.
LEUCADIA NATIONAL CORPORATION
By:/s/ Joseph S. Orlando
-----------------------------
/s/ Lawrence S. Hershfield
--------------------------------
LAWRENCE S. HERSHFIELD
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial
information extracted from the financial
statements contained in the body of the
accompanying Form 10-Q and is qualified in its
entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 299,981
<SECURITIES> 2,555,484
<RECEIVABLES> 850,209
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0
0
<COMMON> 28,141
<OTHER-SE> 900,700
<TOTAL-LIABILITY-AND-EQUITY> 4,840,230
<SALES> 45,164
<TOTAL-REVENUES> 360,688
<CGS> 34,261
<TOTAL-COSTS> 255,504
<OTHER-EXPENSES> 69,965
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<INTEREST-EXPENSE> 11,797
<INCOME-PRETAX> 23,422
<INCOME-TAX> 7,099
<INCOME-CONTINUING> 16,323
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,323
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
</TABLE>
