-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 S7mVraSKzuvDMlgdKCCXSD6jUtlh7V5g8/9iatCTCF1SSHcSGXXYaiTjEdsQcwkq
 ly2MT+5TOoOot/h3+cm3IQ==

<SEC-DOCUMENT>0000950117-03-004929.txt : 20031118
<SEC-HEADER>0000950117-03-004929.hdr.sgml : 20031118
<ACCEPTANCE-DATETIME>20031118134557
ACCESSION NUMBER:		0000950117-03-004929
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20031106
ITEM INFORMATION:		Acquisition or disposition of assets
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20031118

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LEUCADIA NATIONAL CORP
		CENTRAL INDEX KEY:			0000096223
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				132615557
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05721
		FILM NUMBER:		031010076

	BUSINESS ADDRESS:	
		STREET 1:		315 PARK AVE S
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10010
		BUSINESS PHONE:		2124601900

	MAIL ADDRESS:	
		STREET 1:		315 PARK AVENUE SOUTH
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10010

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TALCOTT NATIONAL CORP
		DATE OF NAME CHANGE:	19800603
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a36518.txt
<DESCRIPTION>LEUCADIA NATIONAL CORPORATION
<TEXT>

<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    --------
                                    FORM 8-K

                             CURRENT REPORT PURSUANT

                          TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                                    --------


       Date of Report (Date of Earliest Event Reported): November 6, 2003
                                ----------------

                          Leucadia National Corporation
                  ---------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                                    New York
                     --------------------------------------
                 (State or Other Jurisdiction of Incorporation)

<TABLE>
<S>                                        <C>
         1-5721                                      13-2615557
    --------------------                    --------------------------------
  (Commission File Number)                (I.R.S. Employer Identification No.)

             315 Park Avenue South, New York, N.Y.                  10010
          (Address of Principal Executive Offices)              (Zip Code)
</TABLE>

                                 (212) 460-1900
                 ----------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

         ---------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

================================================================================







<PAGE>


Item 2. Acquisition of Assets.

         On November 6, 2003, Leucadia National Corporation ("Leucadia")
consummated the acquisition of WilTel Communications Group, Inc. ("WilTel"). The
acquisition was accomplished through an exchange offer followed by a merger of a
wholly-owned subsidiary of Leucadia with and into WilTel, resulting in WilTel
becoming a wholly-owned subsidiary of Leucadia. The consideration Leucadia
offered in the exchange offer and merger was 0.4242 of a Leucadia common share
and one Contingent Sale Right ("CSR") for each share of WilTel common stock
(approximately 11,156,460 Leucadia common shares in the aggregate, assuming no
WilTel stockholders exercise appraisal rights and no Leucadia common shares
become issuable pursuant to the CSRs). Additional information concerning the
transactions was included in Leucadia's Registration Statement on Form S-4, as
amended (File No. 333-108519), that was filed with the Securities and Exchange
Commission in connection with the exchange offer and merger (the "Registration
Statement").

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

         (a)      Financial Statements of Businesses Acquired.

                  Unaudited consolidated financial statements for WilTel as of,
                  and for the nine-month period ended, September 30, 2003, are
                  included herein as Exhibit 99.1. WilTel's consolidated
                  financial statements for its three most recently completed
                  fiscal years have been previously reported in the Registration
                  Statement and are incorporated herein by this reference to
                  WilTel's Annual Report on Form 10-K, as amended, for the
                  fiscal year ended December 31, 2002.

         (b)      Pro Forma Financial Information.

                  Unaudited pro forma financial information with respect to
                  Leucadia's acquisition of WilTel is included herein as
                  Exhibit 99.2.

         (c)      Exhibits.

          23.1      Consent of independent auditors from Ernst & Young LLP,
                    independent accountants of WilTel.

          99.1      Unaudited consolidated financial statements for WilTel as
                    of, and for the nine-month period ended, September 30, 2003.

          99.2      Unaudited pro forma financial information.




                                       2





<PAGE>

                                    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 hereunto duly authorized.

                               LEUCADIA NATIONAL CORPORATION



                               By:         /s/ Joseph A. Orlando
                                  ----------------------------------------------

                               Name: Joseph A. Orlando

                               Title: Vice President and Chief Financial Officer

Date:  November 18, 2003





                                       3





<PAGE>


                                  EXHIBIT INDEX


     23.1   Consent of independent auditors from Ernst & Young LLP, independent
            accountants of WilTel.

     99.1   Unaudited consolidated financial statements for WilTel as of, and
            for the nine-month period ended, September 30, 2003.

     99.2   Unaudited pro forma financial information.





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>3
<FILENAME>ex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>

                        Consent of Independent Auditors


We consent to the incorporation by reference in the Registration Statements on
Form S-8 (No. 2-84303), Form S-8 and S-3 (No. 33-6054), Form S-8 and S-3 (No.
33-26434), Form S-8 and S-3 (No. 33-30277), Form S-8 (No. 33-61682), Form S-8
(No. 33-61718), Form S-8 (No. 333-51494) and Form S-4 (No. 333-86018) of
Leucadia National Corporation of our report dated March 14, 2003, with respect
to the consolidated financial statements and schedules of WilTel Communications
Group, Inc. included in its Annual Report (Form 10-K/A) for the year ended
December 31, 2002, incorporated by reference in the Current Report on Form 8-K
dated November 18, 2003 of Leucadia National Corporation, filed with the
Securities and Exchange Commission.


/s/ Ernst & Young LLP

Tulsa, Oklahoma
November 14, 2003

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>ex99-1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>

<PAGE>

                                      INDEX

<TABLE>
<CAPTION>

Financial Statements                                                                                        Page
                                                                                                            ----

<S>                                                                                                           <C>
     Condensed Consolidated Balance Sheets as of September 30, 2003 (Successor Company) and
       December 31, 2002 (Successor Company)............................................................      2
     Condensed Consolidated Statements of Operations for the Three and Nine Months Ended
       September 30, 2003 (Successor Company) and 2002 (Predecessor Company)............................      3
     Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003
       (Successor Company) and 2002 (Predecessor Company)...............................................      4
     Notes to Condensed Consolidated Financial Statements...............................................      5

</TABLE>








<PAGE>




                        WilTel Communications Group, Inc.

                      Condensed Consolidated Balance Sheets

                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                         Successor Company
                                                                   -------------------------------
                                                                   September 30,      December 31,
                                                                       2003              2002
                                                                   -------------      ------------
                                                                        (In thousands)

<S>                                                                 <C>              <C>
Assets
Current assets:
   Cash and cash equivalents                                        $  215,313       $  291,288
   Receivables less allowance of $5,035,000 ($610,000 in 2002)         233,088          180,768
   Notes receivable                                                       --             55,114
   Prepaid assets and other                                             57,032           25,525
                                                                    ----------       ----------
Total current assets                                                   505,433          552,695
Property, plant and equipment, net                                   1,252,852        1,460,010
Other assets and deferred charges, net                                  57,346           49,568
                                                                    ----------       ----------
Total assets                                                        $1,815,631       $2,062,273
                                                                    ==========       ==========

Liabilities and stockholders' equity
Current liabilities:
   Accounts payable                                                   $178,553         $184,759
   Deferred revenue                                                     48,063           61,312
   Accrued liabilities                                                 207,647          235,782
   Long-term debt due within one year                                    4,142           51,503
                                                                    ----------       ----------
Total current liabilities                                              438,405          533,356
Long-term debt                                                         502,862          517,986
Long-term deferred revenue                                             158,165          178,978
Other liabilities                                                      136,276          136,932
Minority interest in consolidated subsidiary                              --              5,290
Contingent liabilities and commitments
Stockholders' equity:
   WilTel common stock, $0.01 par value, 200 million shares
      authorized, 50 million shares outstanding in 2003 and 2002           500              500
   Capital in excess of par value                                      749,500          749,500
   Accumulated deficit                                                (170,077)         (61,049)
   Accumulated other comprehensive income                                 --                780
                                                                    ----------       ----------
Total stockholders' equity                                             579,923          689,731
                                                                    ----------       ----------
Total liabilities and stockholders' equity                          $1,815,631       $2,062,273
                                                                    ==========       ==========

</TABLE>

                             See accompanying notes.



                                                                               2






<PAGE>



                        WilTel Communications Group, Inc.

                 Condensed Consolidated Statements of Operations

                                   (Unaudited)

<TABLE>
<CAPTION>

                                                            Successor      Predecessor       Successor        Predecessor
                                                             Company         Company          Company           Company
                                                            ---------      -----------       ----------       -----------
                                                               Three Months Ended               Nine Months Ended
                                                                  September 30,                   September 30,
                                                            --------------------------      -----------------------------
                                                              2003            2002             2003             2002
                                                            --------        ---------       ----------       ----------
                                                                    (In thousands, except per share amounts)

<S>                                                         <C>              <C>              <C>              <C>
Revenues                                                    $360,367         $306,148         $971,824         $897,852

Operating expenses:
   Cost of sales                                             294,920          268,287          789,306          785,908
   Selling, general and administrative                        40,401           46,592          132,127          167,689
   Provision for doubtful accounts                               173            7,087            4,327           18,610
   Depreciation and amortization                              61,384          143,813          186,322          429,112
   Restructuring charges                                        --              1,816             --             15,149
   Other expense (income), net                                   (74)          (2,907)          (1,245)           6,829
                                                            --------        ---------       ----------       ----------
     Total operating expenses                                396,804          464,688        1,110,837        1,423,297
                                                            --------        ---------       ----------       ----------
Loss from operations                                         (36,437)        (158,540)        (139,013)        (525,445)
Net interest expense                                          (9,620)         (19,230)         (31,070)        (190,969)
Investing income                                               2,006            2,340            3,949           20,222
Minority interest in loss of consolidated subsidiary             475            2,927            2,378           11,514
Gain on sale of consolidated subsidiary                       21,089             --             21,089             --
Other income, net                                             33,403              283           33,663              539
Reorganization items, net                                       --            (52,280)            --           (115,879)
                                                            --------        ---------       ----------       ----------
Income (loss) before income taxes                             10,916         (224,500)        (109,004)        (800,018)
Provision for income taxes                                        (7)            (273)             (23)          (1,136)
                                                            --------        ---------       ----------       ----------
Net income (loss)                                             10,909         (224,773)        (109,027)        (801,154)
Preferred stock dividends and amortization of
   preferred stock issuance costs                               --               --               --             (5,473)
                                                            --------        ---------       ----------       ----------
Net income (loss) attributable to common
   stockholders                                             $ 10,909        $(224,773)       $(109,027)      $ (806,627)
                                                            ========        =========       ==========       ==========

Basic and diluted loss per share:
   Net income (loss) attributable to common
     stockholders                                           $    .22        $    (.45)      $    (2.18)      $    (1.62)
                                                            ========        =========       ==========       ==========

   Weighted average shares outstanding                        50,000          499,566           50,000          497,435

</TABLE>

                             See accompanying notes.


                                                                               3




<PAGE>



                        WilTel Communications Group, Inc.

                 Condensed Consolidated Statements of Cash Flows

                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                Successor     Predecessor
                                                                 Company        Company
                                                                ---------     -----------
                                                                    Nine Months Ended
                                                                       September 30,
                                                                -------------------------
                                                                  2003            2002
                                                                --------       ---------
                                                                    (In thousands)

<S>                                                            <C>             <C>
Operating activities

Net loss                                                       $(109,027)      $(801,154)
Adjustments to reconcile net loss to net cash provided by
   (used in) operating activities:
   Depreciation and amortization                                 186,322         429,112
   Non-cash reorganization items, net                               --            36,797
   Provision for doubtful accounts                                 4,327          18,610
   Minority interest in loss of consolidated subsidiary           (2,378)        (11,514)
   Gain on sale of consolidated subsidiary                       (21,089)           --
   Cash provided by (used in) changes in:
     Receivables                                                 (33,964)        171,717
     Prepaid assets and other current assets                     (36,103)         (4,381)
     Accounts payable                                             11,972         (29,599)
     Current deferred revenue                                     (7,134)         16,447
     Accrued liabilities                                          (5,712)        102,839
     Long-term deferred revenue                                  (21,787)        (11,276)
     Other                                                        (6,198)          2,456
                                                                --------       ---------
Net cash used in operating activities                            (40,771)        (79,946)
Financing activities
Proceeds from long-term debt                                        --            10,909
Payments on long-term debt                                       (19,827)       (278,980)
Proceeds from issuance of common stock, net of expenses             --             9,329
Preferred stock dividends paid                                      --            (4,161)
Other                                                               --              (531)
                                                                --------       ---------
Net cash used in financing activities                            (19,827)       (263,434)
Investing activities
Property, plant and equipment:
   Capital expenditures                                          (40,830)        (63,442)
   Proceeds from tax refunds, settlements and sales               31,288          48,730
   Changes in accrued liabilities                                (12,348)        (87,346)
Proceeds from sale of consolidated subsidiary                     19,575            --
Restricted cash                                                  (13,062)           --
Purchase of investments                                             --          (220,786)
Proceeds from sales of investments                                  --           952,929
Other                                                               --              (907)
                                                                --------       ---------
Net cash provided by (used in) investing activities              (15,377)        629,178
                                                                --------       ---------

Increase (decrease) in cash and cash equivalents                 (75,975)        285,798
Cash and cash equivalents at beginning of period                 291,288         116,038
                                                                --------       ---------
Cash and cash equivalents at end of period                      $215,313       $ 401,836
                                                                ========       =========

</TABLE>

                             See accompanying notes.



                                                                               4




<PAGE>


                        WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

1. Basis of Presentation

    On April 22, 2002, Williams Communications Group, Inc. ("WCG") and CG
Austria, Inc. (collectively, the "Debtors") commenced proceedings under chapter
11 of title 11 of the United States Code (the "Bankruptcy Code"). Pursuant to
the terms of a plan of reorganization (the "Plan"), WilTel Communications Group,
Inc. ("WilTel" and, together with its direct and indirect subsidiaries, the
"Company") emerged on October 15, 2002 as the successor to WCG.

    The Company implemented fresh start accounting under the provisions of
Statement of Position ("SOP") 90-7, "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code," effective October 31, 2002 to
coincide with its normal monthly financial closing cycle. The financial results
in the condensed consolidated statements of operations and condensed
consolidated cash flows have been separately presented under the label
"Successor Company" for the three and nine months ended September 30, 2003 and
"Predecessor Company" for the three and nine months ended September 30, 2002 as
required by SOP 90-7. All periods in the condensed consolidated balance sheets
have been presented under the label "Successor Company" as required by SOP 90-7.
The Successor Company is also referred to as "WilTel" and the Predecessor
Company is also referred to as "WCG". As a result of implementing fresh start
accounting, the Successor Company financial statements are not comparable to the
Predecessor Company financial statements.

    The Successor Company and Predecessor Company interim financial statements
presented herein are based on the results of operations and financial position
of WilTel and its direct and indirect subsidiaries and WCG and its direct and
indirect subsidiaries, respectively. The interim condensed consolidated
financial statements do not include all notes in annual financial statements and
therefore should be read in conjunction with the consolidated financial
statements and notes thereto in WilTel's Annual Report on Form 10-K/A for the
year ended December 31, 2002. The financial statements have not been audited by
independent auditors but include all normal recurring adjustments and others,
which, in the opinion of the Company's management, are necessary to present
fairly the Company's financial position as of September 30, 2003 and its results
of operations and cash flows for the three and nine months ended September 30,
2003 and 2002.

2. Segment Revenues and Profit (Loss)

     The Company evaluates performance based upon segment profit (loss) from
operations, which represents earnings before interest, income taxes,
depreciation and amortization and other unusual, non-recurring or non-cash
items, such as asset impairments and restructuring charges, equity earnings or
losses and minority interest. A reconciliation of segment profit (loss) from
operations to loss from operations is provided below. Intercompany sales are
generally accounted for as if the sales were to unaffiliated third parties. The
following tables present certain financial information concerning the Company's
reportable segments.

                                                                               5




<PAGE>



                        WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


Successor Company:

<TABLE>
<CAPTION>
                                              Network      Vyvx      Other     Eliminations      Total
                                              -------      ----      -----     ------------      -----
                                                                        (In thousands)
Three Months Ended September 30, 2003
<S>                                          <C>         <C>       <C>            <C>           <C>
Revenues:
   Capacity and other                        $331,288    $29,079   $     --       $    --       $360,367
   Intercompany                                 6,471         --         --        (6,471)            --
                                             --------    -------   --------       -------       --------
Total segment revenues                       $337,759    $29,079   $     --       $(6,471)      $360,367
                                             ========    =======   ========       =======       ========

Cost of sales                                $281,788    $19,603   $     --       $(6,471)      $294,920
                                             ========    =======   ========       =======       ========

Segment profit:
   Loss from operations                      $(35,982)   $  (455)  $     --            --       $(36,437)
   Adjustments to reconcile loss from
     operations to segment profit:
     Depreciation and amortization             58,045      3,339         --            --         61,384
                                             --------    -------   --------       -------       --------
Segment profit                               $ 22,063    $ 2,884   $     --       $    --       $ 24,947
                                             ========    =======   ========       =======       ========
</TABLE>


Predecessor Company:

<TABLE>
<CAPTION>
                                              Network       Vyvx      Other     Eliminations       Total
                                              -------       ----      -----     ------------       -----
                                                                        (In thousands)

Three Months Ended September 30, 2002
<S>                                          <C>          <C>        <C>           <C>           <C>
Revenues:
   Capacity and other                        $ 272,980   $  33,168   $    --       $    --       $ 306,148
   Intercompany                                  8,466          32        --        (8,498)             --
                                             ---------    --------   -------       -------       ---------
Total segment revenues                       $ 281,446    $ 33,200   $    --       $(8,498)      $ 306,148
                                             =========    ========   =======       =======       =========

Cost of sales                                $ 249,129    $ 27,656   $    --       $(8,498)      $ 268,287
                                             =========    ========   =======       =======       =========

Segment loss:
   Loss from operations                      $(144,759)   $(17,397)  $ 3,616            --       $(158,540)
   Adjustments to reconcile loss from
     operations to segment loss:
     Depreciation and amortization             132,351      11,462        --            --         143,813
     Other:
        Credit resulting from exit cost
           reserves no longer required              --          --    (3,573)           --          (3,573)
        Restructuring charges                     (372)      2,188        --            --           1,816
                                             ---------    --------   -------       -------       ---------
Segment loss                                 $ (12,780)   $ (3,747)  $    43       $    --       $ (16,484)
                                             ==========   ========   =======       =======       =========
</TABLE>

                                                                               6




<PAGE>



                        WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


Successor Company:

<TABLE>
<CAPTION>
                                               Network     Vyvx      Other       Eliminations       Total
                                               -------     ----      -----       ------------       -----
                                                                        (In thousands)
Nine Months Ended September 30, 2003
<S>                                          <C>          <C>       <C>            <C>            <C>
Revenues:
   Capacity and other                        $ 878,990    $92,834   $     --       $     --       $ 971,824
   Intercompany                                 19,251         --         --        (19,251)             --
                                             ---------    -------   --------       --------       ---------
Total segment revenues                       $ 898,241    $92,384   $     --       $(19,251)      $ 971,824
                                             =========    =======   ========       ========       =========

Cost of sales                                $ 748,343    $60,214   $     --       $(19,251)      $ 789,306
                                             =========    =======   ========       ========       =========

Segment profit:
   Income (loss) from operations             $(139,820)   $   807   $     --       $     --       $(139,013)
   Adjustments to reconcile loss from
     operations to segment profit:
     Depreciation and amortization             175,272     11,050         --             --         186,322
                                             ---------    -------   --------       --------       ---------
Segment profit                               $  35,452    $11,857   $     --       $     --       $  47,309
                                             =========    =======   ========       ========       =========
</TABLE>


Predecessor Company:

<TABLE>
<CAPTION>
                                              Network       Vyvx      Other      Eliminations       Total
                                              -------       ----      -----      ------------       -----
                                                                        (In thousands)
Nine Months Ended September 30, 2002
<S>                                          <C>          <C>        <C>           <C>            <C>
Revenues:
   Capacity and other                        $ 788,935    $108,917   $    --       $     --       $ 897,852
   Intercompany                                 29,862         134        --        (29,996)             --
                                             ---------    --------   -------       --------       ---------
Total segment revenues                       $ 818,797    $109,051   $    --       $(29,996)      $ 897,852
                                             =========    ========   =======       ========       =========

Cost of sales                                $ 713,567    $102,337   $    --       $(29,996)      $ 785,908
                                             =========    ========   =======       ========       =========

Segment loss:
   Loss from operations                      $(452,995)   $(75,580)  $ 3,130       $     --       $(525,445)
   Adjustments to reconcile loss from
     operations to segment loss:
     Depreciation and amortization             388,482      40,630        --             --         429,112
     Other:
        Restructuring charges                    9,722       4,998       429             --          15,149
        Contingencies accrued, net of
          settlement gains                      28,644          --        --             --          28,644
        Credit resulting from exit cost
          reserves no longer required               --          --    (3,573)            --          (3,573)
                                             ---------    --------   -------       --------       ---------
Segment loss                                 $ (26,147)   $(29,952)  $   (14)      $     --       $ (56,113)
                                             =========    ========   =======       ========       =========
</TABLE>


<TABLE>
<CAPTION>
                                                   Successor Company
                                              -----------------------------
                                                      Total Assets
                                              -----------------------------
                                              September 30,    December 31,
                                                  2003             2002
                                               ----------       ----------
                                                        (In thousands)
<S>                                            <C>              <C>
Network                                        $1,450,147       $1,577,372
Vyvx                                               53,190           82,819
Other                                             312,294          402,082
                                               ----------       ----------

  Total                                        $1,815,631       $2,062,273
                                               ==========       ==========
</TABLE>

                                                                               7




<PAGE>


                       WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)


3. Depreciation and Amortization

    In conjunction with fresh start accounting, the Company reassessed and
changed its useful lives for its property, plant and equipment from a weighted
average life of 21 years to 15 years. The impact of this change on the Company's
depreciation and amortization expense for the three and nine months ended
September 30, 2003 was an increase of approximately $18 million and $55 million,
respectively.

4. Severance Charges

    Severance charges of $12.3 million for the nine months ended September 30,
2002 were recorded in restructuring charges on the income statement as the
charges were related to the Company's reorganization. As of December 31, 2002,
the Company had an accrued liability of approximately $12 million for severance
related expenses, essentially all of which the Company has paid as of September
30, 2003. During 2003, the Company recorded $4.7 million of additional severance
charges to general and administrative expense, essentially all of which has been
paid.

5. Other Operating Income, Net - Predecessor Company

    Transactions included in segment profit (loss)

    The Company recorded other operating expense, net of $0.7 million for the
three months ended September 30, 2002 and other operating income, net of $18.2
million for the nine months ended September 30, 2002, which included cash
settlement gains of $17.8 million for the nine months ended September 30, 2002
related to the termination of various agreements.

    Transactions excluded from segment profit (loss)

    Other operating income, net of $3.6 million for the three months ended
September 30, 2002 represents a credit resulting from the determination that
remaining liabilities accrued for exit costs established in previous years
related to various business sales and abandonments were no longer required.

    Other operating expense, net of $25.0 million for the nine months ended
September 30, 2002 included a $35.0 million accrual for contingent liabilities
partially offset by a $3.6 million credit discussed above, a non-cash settlement
gain of $3.5 million and income of $2.9 million related to revisions of
estimated costs associated with the fourth quarter 2001 sale of lit fiber to
WorldCom, Inc.

6. Gain on Sale of Consolidated Subsidiary - Successor Company

    At the time the Company implemented fresh start accounting, the net assets
of PowerTel Limited ("PowerTel"), a consolidated subsidiary, were assumed to
have minimal value based on assessments by management and its financial advisor
assisting with the potential sale of the Company's ownership interest in
PowerTel. Important elements of that assessment included PowerTel's struggles to
maintain compliance with its bank covenants, and the assessment that
improvements in market conditions or improved operations during the periods
following fresh start, neither of which could be predicted with certainty, would
be required in order to ascribe a higher value.

    During the first six months of 2003, the Company was unsuccessful in its
attempts to sell its ownership interest in PowerTel. However, in August 2003,
market conditions improved such that WilTel successfully entered into agreements
to sell its ownership interest in PowerTel. WilTel sold its common and preferred
stock interest to TVG Consolidation Holdings SPRL for 20 million Australian
dollars (or $13.1 million). In addition, WilTel also


                                                                               8




<PAGE>



                       WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)



settled its intercompany receivable from PowerTel for 10 million Australian
dollars (or $6.5 million). The proceeds from the sale of the PowerTel stock were
placed in a restricted bank account pursuant to the terms of agreements related
to the Company's One Technology Center Notes outstanding. Accordingly, the
Company has classified the restricted bank account in other noncurrent assets.
The sale resulted in a non-recurring gain of $21.1 million. Net loss
attributable to PowerTel was $.6 million and $1.6 million for the three and nine
months ended September 30, 2003, respectively.

7. Other Income, Net - Successor Company

    Other income, net of $33.4 million and $33.7 million for the three and nine
months ended September 30, 2003, respectively, includes non-recurring,
non-operating settlement gains of $20.0 million related to the termination of
various agreements. As a result of the termination of the agreements, the
Company will no longer be required to perform the contractual obligations that
were the basis for the recording of the deferred revenue performance
obligations. In addition, other income, net includes $13.4 million of
non-recurring, non-operating gains primarily related to the termination of
arrangements previously accrued as unfavorable commitments in fresh start
accounting and recoveries of various receivables previously written off.

8. Reorganization Items, Net

<TABLE>
<CAPTION>
                                                         Predecessor Company
                                                 -------------------------------
                                                 Three Months       Nine Months
                                                    Ended              Ended
                                                 September 30,     September 30,
                                                     2002              2002
                                                 -------------     -------------
                                                          (In thousands)
<S>                                            <C>                <C>
Reorganization items, net:
   Gain on forgiveness of interest                    $  4,125         $  73,898
   Write-off of deferred financing costs                    --           (92,391)
   Write-off of debt discounts                              --           (10,055)
   Retention bonus agreements                          (21,239)          (21,239)
   Retention incentive expense                         (12,656)          (12,656)
   Professional fees and other                         (23,803)          (55,706)
   Interest income                                       1,293             2,270
                                                      --------         ---------
                                                      $(52,280)        $(115,879)
                                                      ========         =========
</TABLE>

     In March 2002, certain provisions of the indenture related to the Trust
Notes, which were senior secured notes issued by a WCG subsidiary in March 2001,
were amended. The amendment, among other things, provided that The Williams
Companies, Inc. ("TWC"), the former parent of WCG and guarantor of the Trust
Notes, would make the required March and September 2002 interest payments
totaling approximately $115 million on behalf of WCG to WCG Note Trust, and WCG
would not be required to reimburse TWC for these interest payments. Since the
interest accrued on these notes was not a claim in the chapter 11 proceedings,
WCG recognized a gain of $4.1 million and $73.9 million for the three and nine
months ended September 30, 2002, respectively, in accordance with SOP 90-7.

    The Company wrote off deferred financing costs and debt discounts associated
with liabilities subject to compromise and a portion of the deferred financing
costs associated with the Company's credit facility to reorganization items in
accordance with SOP 90-7 since the deferred financing costs and debt discount
did not have a remaining useful life as a result of the chapter 11 proceedings.

    The Company recorded charges of $21.2 million for the three and nine months
ended September 30, 2002 primarily related to taxes on the Company's retention
bonus agreements. In addition, the Company recorded


                                                                               9




<PAGE>



                       WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)



charges of $12.7 million for the three and nine months ended September 30, 2002
pursuant to an employee incentive program that was adopted to retain employees
during the Company's restructuring process.

    Professional fees and other primarily consists of professional fees for
legal and financial advisory services in connection with the reorganization.

    The Company recognized interest income of $1.3 million and $2.3 million for
the three and nine months ended September 30, 2002, respectively, on accumulated
cash that the Company did not disburse as a result of the chapter 11
proceedings.

9. Provision for Income Taxes

    The provision for income taxes includes:

<TABLE>
<CAPTION>
                            Successor       Predecessor     Successor      Predecessor
                             Company          Company        Company         Company
                            ---------       -----------     ---------      -----------
                                Three Months Ended               Nine Months Ended
                                   September 30,                   September 30,
                            ---------------------------     --------------------------
                               2003             2002           2003           2002
                            ---------       -----------     ---------      -----------
                                                   (In thousands)
<S>                         <C>            <C>              <C>           <C>
Current:
   Federal                        $--             $  --          $ --          $    --
   State                           (7)               (5)          (23)             (14)
   Foreign                         --                --            --               --
                                  ---             -----          ----          -------
                                   (7)               (5)          (23)             (14)
Deferred:
   Federal                         --              (226)           --             (949)
   State                           --               (42)           --             (173)
   Foreign                         --               --             --               --
                                  ---             -----          ----          -------
                                   --              (268)           --           (1,122)
                                  ---             -----          ----          -------
     Total provision              $(7)            $(273)         $(23)         $(1,136)
                                  ===             =====          ====          =======
</TABLE>


    The tax provision for the three months ended September 30, 2003 is
significantly different than the provision expected from applying the federal
statutory rate to pre-tax income primarily due to the Company's net operating
loss carryforward position. The tax provision for the nine months ended
September 30, 2003 and the three and nine months ended September 30, 2002 is
significantly different than the benefit expected from applying the federal
statutory rate to pre-tax losses primarily due to a valuation allowance
established for the Company's net deferred tax assets. The valuation allowance
fully reserves the Company's net deferred tax assets, primarily resulting from
net operating loss carryforwards, as the Company believes it is more likely than
not that the net deferred tax asset will not be realized.

10. Net Income (Loss) Per Share

    For WilTel, the basic and diluted income (loss) per share is the same as it
does not have any dilutive securities outstanding. For WCG, diluted loss per
common share was the same as the basic calculation as the inclusion of any stock
options and convertible preferred stock would be antidilutive since WCG reported
a net loss for the periods presented. Stock options and convertible preferred
stock of 5.9 million shares and 7.8 million shares for the three and nine months
ended September 30, 2002 were excluded from the computation of diluted loss per
common share.


                                                                              10




<PAGE>


                       WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)



11. Prepaid Assets and Other

    As of September 30, 2003, prepaid assets and other includes a deposit of
approximately $38 million related to the posting of a $44.1 million appeal bond
in first quarter 2003 for the Thoroughbred Technology and Telecommunications,
Inc. (TTTI) litigation (see Note 14). The deposit is reflected as a use of cash
in the operating activities section in the condensed consolidated statements of
cash flows. As discussed further in Note 14, subsequent to September 30, 2003,
the Company reached a verbal settlement of its disputes with TTTI, which is
expected to result in a payment to TTTI in an amount that approximates the
amount of the deposit during the fourth quarter of 2003. Accordingly, for
liquidity purposes, the settlement is not expected to have any further impact on
cash flows.

12. Debt

    Debt consists of the following:


<TABLE>
<CAPTION>
                                                              Successor Company
                                                        -----------------------------
                                           Weighted-
                                            average
                                           interest     September 30,    December 31,
                                             Rate*         2003             2002
                                           ---------    -------------    ------------
                                                         (In thousands)
<S>                                      <C>           <C>             <C>
    Exit Credit Agreement                     5.6%           $375,000        $375,000
    One Technology Center ("OTC") Notes       8.1%            119,311         141,663
    Aircraft Capital Lease                   12.2%              7,776              --
    PowerTel                                   --                  --          44,353
    Other                                     8.5%              4,917           8,473
                                                             --------        --------
                                                              507,004         569,489
    Less current maturities                                    (4,142)        (51,503)
                                                             --------        --------
    Long-term debt                                           $502,862        $517,986
                                                             ========        ========
</TABLE>


- --------------
*  As of September 30, 2003

    Aircraft Capital Lease

    In May 2003, the Company entered into a sale-leaseback transaction on its
two airplanes and recorded a capital lease obligation representing the present
value of the future minimum lease payments during the lease term. The airplanes
were sold for approximately $21 million in cash and leased back for a period of
10 years. Per the terms of the transaction, approximately $5 million from the
cash proceeds was held as cash collateral for the lease.

    OTC Notes

    The OTC Notes were reduced in third quarter 2003 by the net cash proceeds of
$15.1 million from the Aircraft Capital Lease transaction per the terms of the
OTC Notes agreement and by $6.5 million related to the final settlement and
payment terms pursuant to an agreement for the purchase of the One Technology
Center building. The net cash proceeds of $15.1 million had been initially
placed in escrow subject to resolution of the final settlement.


                                                                              11




<PAGE>



                       WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)



13. Comprehensive Income (Loss)

    Comprehensive loss is as follows:

<TABLE>
<CAPTION>
                                                         Successor     Predecessor      Successor      Predecessor
                                                          Company        Company         Company         Company
                                                         ---------     -----------      ---------      -----------
                                                             Three Months Ended             Nine Months Ended
                                                                September 30,                  September 30,
                                                         -------------------------      --------------------------
                                                           2003           2002             2003            2002
                                                         ---------     -----------      ---------      -----------
                                                                               (In thousands)
<S>                                                   <C>              <C>                  <C>        <C>
Net income (loss)                                          $10,909       $(224,773)     $(109,027)       $(801,154)
   Other comprehensive loss:
       Unrealized loss on securities                            --          (1,664)            --           (8,043)
       Less:  reclassification adjustment for net
          gains realized in net loss                            --              --             --             (605)
                                                           -------       ---------      ---------        ---------
       Net unrealized loss                                      --          (1,664)            --           (8,648)
       Foreign currency translation adjustments             (1,517)         (1,321)          (780)           1,432
                                                           -------       ---------      ---------        ---------
   Other comprehensive loss before taxes                    (1,517)         (2,985)          (780)          (7,216)
   Income tax benefit on other comprehensive loss               --             267             --            1,122
                                                           -------       ---------      ---------        ---------
Comprehensive income (loss)                                $ 9,392       $(227,491)     $(109,807)       $(807,248)
                                                           =======       =========      =========        =========
</TABLE>

14. Contingencies

    Litigation

    Department of Labor Investigation

     In April 2003, the Company received written notice from the United States
Department of Labor that it is exercising its authority under Section 504 of the
Employee Retirement Income Security Act of 1974 ("ERISA") to conduct periodic
investigations of employee benefit plans to determine whether such plans conform
with the provisions of ERISA and other applicable regulations. The stated scope
of the review covers the Williams Communications Investment Plan (a defined
contribution plan) for a time period extending from 1998 through the present
date. The Company is cooperating fully with the Department of Labor. At this
time, neither the length of the review nor likely outcome of the investigation
can be determined. The Company believes that all of its actions with respect to
employee benefit plans have been in full compliance with ERISA and other
applicable regulations.

    Right of Way Class Action Litigation

    A number of suits attempting to achieve class action status seek damages and
other relief from the Company based on allegations that the Company installed
portions of its fiber-optic cable without all necessary landowner consents.
These allegations relate to the use of rights of way licensed by railroads,
state departments of transportation and others controlling pre-existing
right-of-way corridors. The putative members of the class in each suit are those
owning the land underlying or adjoining the right-of-way corridors. Similar
actions have been filed against all major carriers with fiber-optic networks. It
is likely that additional actions will be filed. The Company believes it
obtained sufficient rights to install its cable. It also believes that the class
action suits are subject to challenge on procedural grounds.

    The Company and other major carriers are seeking to settle the class action
claims referenced above relating to the railroad rights of way through an agreed
class action. These companies initially sought approval of a settlement in a
case titled Zografos et al. vs. Qwest Communications Corp., et al., filed in the
U.S. District Court


                                                                              12




<PAGE>



                       WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)



for the District of Oregon on January 31, 2002. On July 12, 2002, the Oregon
Court dismissed the action. Thereafter, on September 4, 2002, an existing case
titled Smith, et al., vs. Sprint, et al., pending in the U.S. District Court for
the Northern District of Illinois, was amended to join the Company and two other
telecommunications companies as defendants. On July 25, 2003, the judge in this
case issued an order preliminarily approving a proposed settlement agreement and
issued an injunction, which stayed other putative class action railroad rights
of way cases against the Company. Two of the intervening plaintiffs filed
appeals, which were consolidated. If this settlement withstands potential
challenges by plaintiffs' counsel, it will settle the majority of the putative
nationwide and statewide class actions related to the railroad right-of-way
claims. Based on the Company's estimate of a likely settlement range, the
Company has accrued $16.7 million as of September 30, 2003.

    Platinum Equity Dispute

    In March 2001, the Company sold its Solutions segment to Platinum Equity LLC
("Platinum Equity") for a sales price that was subject to adjustment based upon
a computation of the net working capital of the business as of March 31, 2001. A
dispute arose between the companies with respect to the net working capital
amount as defined in the agreement. Pursuant to the provisions of the sale
agreement, the parties submitted the dispute to binding arbitration before an
independent public accounting firm.

    In September 2002, Platinum Equity filed suit in the District Court of
Oklahoma County, State of Oklahoma, against the Company alleging various
breaches of representations and warranties related to the sale of the Solutions
segment and requested a ruling that no payment was due under a promissory note
issued by Platinum Equity at the time of purchase until all disputes were
resolved. Many of the claims alleged by Platinum Equity in this suit are the
same claims asserted by Platinum Equity in the net working capital dispute.
Discovery in this suit is ongoing, with the trial expected to begin sometime in
Spring 2004.

    In May 2003, the arbitrator rendered a determination of the adjustment
amount under the net working capital dispute, and an order entry of judgment was
entered against Platinum Equity in the amount of approximately $38 million,
which represented the amount that Platinum Equity owed under the promissory
note, offset by the net working capital adjustment determined by the arbitrator.
The Company adjusted the carrying amount of the note receivable to $38 million
by offsetting amounts previously accrued for the net working capital dispute. In
July 2003, the Company collected approximately $39 million, including interest,
from Platinum Equity related to the judgment. The receipt of the $39 million
does not resolve all of the issues between Platinum Equity and the Company as
neither company has waived any of the claims currently pending in the litigation
discussed above. The Company continues to believe that it is adequately reserved
or accrued with respect to its receivable and payable positions with Platinum
Equity.

    Thoroughbred Technology and Telecommunications, Inc. vs. Williams
    Communications, LLC

    Thoroughbred Technology and Telecommunications, Inc. ("TTTI") filed suit on
July 24, 2001, against Williams Communications, LLC ("WCL"), which changed its
name to WilTel Communications, LLC in January 2003, in a case titled
Thoroughbred Technology and Telecommunications, Inc. vs. Williams
Communications, LLC f/k/a Williams Communications, Inc., Civil Action No.
1:01-CV-1949-RLV, pending in the U.S. District Court for the Northern District
of Georgia, Atlanta Division. TTTI alleged claims that included breach of
contract with respect to a fiber-optic installation project that TTTI was
constructing for itself and other parties, including WCL, with respect to
certain conduit segments including a three-conduit segment between Cleveland,
Ohio and Boyce, Virginia. TTTI sought specific performance to require that WCL
take title to the Cleveland-Boyce segment and pay TTTI in excess of $36 million
plus pre-judgment interest for such purchase. WCL alleged various defenses,
including significant warranty and breach of contract claims against TTTI.


                                                                              13




<PAGE>



                       WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)



    On May 9, 2002, the trial court determined that WCL did not have the right
to terminate the contract with respect to the Cleveland-Boyce segment, but
deferred ruling on TTTI's remedy until a later time. In a series of rulings on
January 27, 2003, the court ordered, among other things, (1) that WCL's claims
against TTTI for breach of contract and construction deficiencies for certain of
the telecommunications routes constructed by TTTI be heard by an arbitration
panel; and (2) that WCL close the purchase of the Cleveland-Boyce segment and
pay TTTI the sum of $36.3 million plus pre-judgment interest for such purchase.
The court denied WCL's motion for a stay of the proceedings while the
construction claims against TTTI are adjudicated through arbitration and further
denied the Company's request to stay closing on the Cleveland-Boyce segment
pending an appeal of the trial court's decision. WCL sought and obtained a stay
of the trial court's order compelling a closing of the Cleveland-Boyce segment
from the United States Court of Appeals for the 11th Circuit thereby staying
WCL's obligation to close the transaction until the appeal is decided. The stay
granted by the Court of Appeals was conditioned on the posting of an appropriate
supersedeas bond by the Company, which was posted by the Company in March 2003
in the approximate amount of $44.1 million. The Company posted the bond, which
was docketed by the trial court on March 13, 2003. WCL is proceeding with its
appeal of the trial court's decision while pursuing its arbitration claims of
construction defects against TTTI. Oral arguments in the appeal are scheduled
for November 2003.

    On March 21, 2003, WCL filed its demand for arbitration with the American
Arbitration Association. Subsequently, TTTI filed its response and alleged
unquantified additional counterclaims against WCL for breach of contract. The
parties confirmed dates for the arbitration in December 2003 following a
decision by the arbitration panel denying TTTI's request to stay the proceeding
until after the appeal is concluded. WCL's arbitrable claims against TTTI
aggregate approximately $70 million. TTTI's counterclaims against WCL aggregate
approximately $24 million.

    Subsequent to September 30, 2003, the parties reached a verbal settlement of
their disputes, which is expected to result in a payment to TTTI in the amount
of $37.5 million. The Company anticipates that definitive agreements will be
executed by November 19, 2003 pursuant to which all lawsuits will be dismissed
and WilTel will take title to the constructed segments that were the subject of
the dispute.

    StarGuide

    On October 12, 2001, StarGuide Digital Networks ("StarGuide") sued WCG in
the United States District Court for Nevada for infringement of three patents
relating to streaming transmission of audio and video content. Subsequently,
StarGuide added WCL as a party to the action. StarGuide seeks compensation for
past infringement, an injunction against infringing use, and treble damages due
to willful infringement. On July 1, 2002, StarGuide initiated a second patent
suit against WCL with respect to a patent that is a continuation of the patents
at issue in the prior litigation. The two actions have been consolidated. In
July 2003, the parties reached a settlement, and this case was dismissed by
joint agreement. The settlement did not have a material impact on the Company's
results of operations, financial position or cash flows.

    WilTel Shareholder Lawsuits

    On May 15, 2003, the first of several shareholder class actions was filed
against WilTel, the nine members of WilTel's Board of Directors and Leucadia
National Corporation ("Leucadia"). Currently, the Company has been served with
notice of eight (8) shareholder derivative class actions: four (4) in Clark
County, Nevada, one (1) in Washoe County, Nevada, two (2) in New York County,
New York and one (1) in Tulsa County, Oklahoma. Each of the lawsuits sets
forth substantially the same allegations of breach of fiduciary duty in
connection with Leucadia's proposed exchange offer announced on May 15, 2003.
Amended complaints were filed in each of the lawsuits based upon Leucadia's
withdrawal of its initial offer and Leucadia's subsequent offers. The parties in


                                                                              14




<PAGE>



                       WilTel Communications Group, Inc.

              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)



these litigations have reached an agreement in principle to settle the
litigation. The proposed settlement is subject to numerous conditions,
including the drafting and execution of a formal settlement agreement and
final approval of the settlement by the New York courts. Plaintiffs' counsel
intend to apply to the New York courts for an award of attorneys' fees and
reimbursement of expenses in the amount of $300,000. (For additional
information on Leucadia's exchange offer see Note 15.)

    Summary

    The Company is a party to various other claims, legal actions, and
complaints arising in the ordinary course of business. In the opinion of
management, upon the advice of legal counsel, the ultimate resolution of all
claims, legal actions, and complaints, after consideration of amounts accrued of
approximately $83 million as of September 30, 2003, the verbal settlement and
posting of the appeal bond related to TTTI discussed above, insurance coverage,
or other indemnification arrangements, is not expected to have a materially
adverse effect upon the Company's future financial position or results of
operations, although unfavorable outcomes in the items discussed above could
significantly impact the Company's liquidity.

15. Leucadia Exchange Offer

     In August 2003, WilTel and Leucadia announced a merger agreement that
provided for an exchange offer pursuant to which tendering WilTel stockholders
will receive .4242 of a Leucadia common share for each share of WilTel common
stock to be followed by a back-end merger for the same consideration as offered
in the exchange offer. The merger agreement also provides that WilTel
stockholders receive contingent sale rights which entitle WilTel stockholders to
additional Leucadia common shares if Leucadia sells substantially all of
WilTel's assets or outstanding shares of capital stock prior to October 15,
2004, or consummates such a sale at a later date if the sale agreement was
entered into prior to August 21, 2004, and in either case the net proceeds
exceed the valuation ascribed to WilTel's equity in this transaction.

     As of November 5, 2003, the WilTel stockholders had tendered 23,547,423
shares of WilTel common stock, representing approximately 89.5% of the WilTel
shares not owned by Leucadia, which when added to the WilTel common stock
already owned by Leucadia represent approximately 94.5% of the total outstanding
WilTel common stock. Leucadia accepted all of the WilTel common stock tendered
in exchange for Leucadia common shares, and has acquired the balance of the
WilTel stock not tendered in a back-end merger. Holders of common stock acquired
pursuant to the back-end merger have appraisal rights under Nevada law, which
could result in those stockholders receiving cash consideration from WilTel
rather than Leucadia common shares. Leucadia issued 9,988,817 of its common
shares for the WilTel common stock tendered in the exchange offer, and if no
appraisal rights are appropriately exercised, will issue an aggregate of
11,156,460 Leucadia common shares (including the shares issued pursuant to the
offer) for all of the WilTel common stock not previously owned by Leucadia.
Leucadia will not know the number of shares of common stock, if any, as to which
appraisal rights will be exercised until December 2003. Upon completion of the
back-end merger, WilTel ceased to be a public company, and as such will no
longer file reports with the SEC.


                                                                              15






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>ex99-2.txt
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<PAGE>


             UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

    The following unaudited pro forma consolidated financial statements reflect
the acquisition of all of the outstanding shares of WilTel common stock not
owned by Leucadia pursuant to the offer and merger.

    The execution of the Merger Agreement on August 21, 2003 created a
measurement date for accounting purposes enabling Leucadia to determine the
value of the Leucadia common shares to be issued. Leucadia averaged the closing
prices of its common shares for the five-business day period commencing two days
before and ending two days after the Merger Agreement was executed. That
average, $37.90 per share, was used to calculate the aggregate value of the
shares issued for purposes of the unaudited pro forma consolidated financial
statements that follow, and will also be used to determine the actual cost of
the acquisition.




                                       1




<PAGE>



Leucadia National Corporation and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
September 30, 2003
(In thousands)

Percentage of WilTel Acquired                                  100%

<TABLE>
<CAPTION>
                                                                                            Pro Forma          Pro Forma As
                                                          Leucadia         WilTel          Adjustments           Adjusted
                                                          --------         ------          -----------           --------
<S>                                                      <C>             <C>                <C>                 <C>
Assets
Investments                                              $1,052,510              $0                $0           $1,052,510
Cash and cash equivalents                                   195,028         215,313            (2,000)(a)          408,341
Trade, notes and other receivables, net                     317,723         233,088                 0              550,811
Prepaids, other assets and deferred
  charges, net                                              289,493         114,378                 0              403,871
Property, plant, equipment and
  leasehold improvements, net                               221,053       1,252,852            88,399 (b)        1,562,304
Investments in associated companies, net                    695,486               0          (288,392)(c)          407,094
                                                         ----------      ----------         ---------           ----------
  Total                                                  $2,771,293      $1,815,631         ($201,993)          $4,384,931
                                                         ==========      ==========         =========           ==========

Liabilities
Customer banking deposits                                  $184,200              $0                $0             $184,200
Trade payables and expense accruals                         107,460         386,200                 0              493,660
Deferred income                                                   0         206,228                 0              206,228
Other liabilities                                            81,700         136,276                 0              217,976
Income taxes payable                                         24,899               0                 0               24,899
Deferred tax liability                                       98,473               0           (44,900)(d)           53,573
Debt, including current maturities                          613,573         507,004                 0            1,120,577
                                                         ----------      ----------         ---------           ----------
  Total liabilities                                       1,110,305       1,235,708           (44,900)           2,301,113
                                                         ----------      ----------         ---------           ----------

Commitments and contingencies
Minority interest                                            12,063                                 0               12,063
                                                         ----------      ----------         ---------           ----------
Company-obligated mandatorily redeemable
  preferred securities of subsidiary trust
  holding solely subordinated debt securities
  of the Company                                                                  0                 0
                                                         ----------      ----------         ---------           ----------

Shareholders' Equity
Common stock                                                 59,655             500              (500)(e)           70,812
                                                                                               11,157 (f)
Additional paid-in capital                                  201,318         749,500          (749,500)(e)          612,991
                                                                                              411,673 (f)
Accumulated other comprehensive income                      111,767                                 0 (e)          111,767
Retained earnings (Accumulated deficit)                   1,276,185        (170,077)          170,077 (e)        1,276,185
                                                         ----------      ----------         ---------           ----------
  Total shareholders' equity                              1,648,925         579,923          (157,093)           2,071,755
                                                         ----------      ----------         ---------           ----------
  Total                                                  $2,771,293      $1,815,631         ($201,993)          $4,384,931
                                                         ==========      ==========         =========           ==========

BV per share                                                  27.64           11.60                                  29.26
Equivalent pro forma                                                                                                 12.41
</TABLE>


                                     2



<PAGE>


Leucadia National Corporation and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 2003
(In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                            Historical
                                                                      Leucadia       WilTel
                                                                    Nine Months    Nine Months
                                                                       Ended          Ended
                                                                   September 30,  September 30,  Pro Forma         Pro Forma
                                                                        2003          2003      Adjustments       As Adjusted
                                                                    ---------------------------------------       -----------
<S>                                                                 <C>             <C>             <C>              <C>
Revenues:
 Manufacturing                                                      $40,794                                          $40,794
 Wireless messaging revenues                                         45,509                                           45,509
 Finance                                                             44,673                                           44,673
 Telecommunications                                                                  $971,824                        971,824
 Investment and other income                                        114,561            59,946 (o)                    174,507
 Net securities gains (losses)                                          546                                              546
                                                                    ---------------------------------------        ---------
                                                                    246,083         1,031,770             0        1,277,853
                                                                    ---------------------------------------        ---------
Expenses:
 Manufacturing cost of sales                                         29,331                                           29,331
 Wireless messaging network operating expenses                       24,449                                           24,449
 Telecommunications cost of sales                                                     789,306                        789,306
 Depreciation and amortization                                       15,174           186,322         4,420 (i)      205,916
 Asset impairments and restructuring charges                                                                               0
 Reorganization items, net                                                                                                 0
 Interest                                                            26,188            31,070                         57,258
 Selling, general and other expenses                                144,898           136,454                        281,352
                                                                    ---------------------------------------        ---------
                                                                    240,040         1,143,152         4,420        1,387,612
                                                                    ---------------------------------------        ---------
 Income (loss) from continuing operations before income taxes,
  minority interest and equity in income (losses) of associated
  companies                                                           6,043          (111,382)       (4,420)        (109,759)
Income tax (benefit) provision                                       (9,689)               23         9,747 (l)           81
                                                                    ---------------------------------------        ---------
 Income (loss) from continuing operations before minority interest
  and equity in income (losses) of associated companies              15,732          (111,405)      (14,167)        (109,840)
Minority expense of trust preferred securities, net of taxes         (2,761)                         (1,487)(l)       (4,248)
Minority interest in loss of consolidated subsidiary                                    2,378             0            2,378
Equity in income (losses) of associated companies, net of taxes      42,942                          50,881 (l)      150,972
                                                                                                     57,149 (m)
                                                                    ---------------------------------------        ---------
Income (loss) from continuing operations                            $55,913         ($109,027)      $92,376          $39,262
                                                                    =======================================        =========
Basic loss per common share                                                                                            $0.55
Number of shares used in calculation                                 59,630                          11,156 (n)       70,786

Diluted loss per common share                                                                                          $0.55
Number of shares used in calculation                                 60,044                          11,156 (n)       71,200

Equivalent pro forma
  Basic loss per common share                                                                                          $0.24
  Diluted loss per common share                                                                                        $0.23
</TABLE>

                                       3


<PAGE>



Leucadia National Corporation and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
For the year ended December 31, 2002
(In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                             Historical
                                                               WilTel        WilTel
                                                  Leucadia   Ten Months    Two Months
                                                 Year Ended     Ended        Ended
                                                December 31, October 31,  December 31,      Pro Forma          Pro Forma
                                                    2002        2002          2002         Adjustments        As Adjusted
                                                ------------------------------------------------------        -----------
<S>                                              <C>        <C>             <C>            <C>                  <C>
Revenues:
 Manufacturing                                    $50,744                                                         $50,744
 Finance                                           87,812                                                          87,812
 Telecommunications                                         $1,000,007      $191,656           ($6,664)(g)      1,184,999
 Investment and other income                      140,315       19,756           445                              160,516
 Net securities gains (losses)                    (37,066)                                                        (37,066)
                                                 -----------------------------------------------------         ----------
                                                  241,805    1,019,763       192,101            (6,664)         1,447,005
                                                 -----------------------------------------------------         ----------

Expenses:
 Manufacturing cost of sales                       33,963                                                          33,963
 Telecommunications cost of sales                              862,405       171,605            (6,614)(h)      1,027,396
 Depreciation and amortization                     17,266      460,989        44,294          (231,853)(i)        290,696
 Asset impairments and restructuring charges                    28,483         8,572            (8,572)(h)         28,483
 Reorganization items, net                                  (2,066,032)                      2,156,330 (j)         90,298
 Interest                                          33,547      195,602         7,221          (136,481)(k)         99,889
 Selling, general and other expenses              198,554      218,621        22,257                              439,432
                                                 -----------------------------------------------------         ----------
                                                  283,330     (299,932)      253,949         1,772,810          2,010,157
                                                 -----------------------------------------------------         ----------

 Income (loss) from continuing operations
  before income taxes, minority interest and
  equity in income (losses) of associated
  companies                                       (41,525)   1,319,695       (61,848)       (1,779,474)          (563,152)
Income tax (benefit) provision                   (144,865)       1,030             3            25,837 (l)       (117,995)
                                                 -----------------------------------------------------         ----------
 Income (loss) from continuing operations
  before minority interest and equity in
  income (losses) of associated companies         103,340    1,318,665       (61,851)       (1,805,311)          (445,157)
Minority expense of trust preferred securities,
  net of taxes                                     (5,521)                                      (2,973)(l)         (8,494)
Minority interest in loss of consolidated
  subsidiary                                                    12,530           802                 0             13,332
Equity in income (losses) of associated
  companies, net of taxes                          54,712                                       36,700 (l)        104,812
                                                                                                13,400 (m)
                                                 -----------------------------------------------------         ----------
Income (loss) from continuing operations         $152,531   $1,331,195      ($61,049)      ($1,758,184)         ($335,507)
                                                 =====================================================         ==========

Basic earnings (loss) per common share              $2.74                                                          ($5.02)
Number of shares used in calculation               55,667                                       11,156 (n)         66,823

Diluted earnings (loss) per common share            $2.72                                                          ($5.02)
Number of shares used in calculation               56,016                                       10,807 (n)         66,823

Equivalent pro forma
  Basic loss per common share                                                                                       (2.13)
  Diluted loss per common share                                                                                     (2.13)

</TABLE>


                                       4




<PAGE>


         NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

    The unaudited pro forma consolidated balance sheet as of September 30, 2003
assumes that all of the shares of WilTel common stock not owned by Leucadia are
acquired and reflects the adjustments necessary to record the acquisition as
though it had occurred on September 30, 2003. The aggregate purchase price of
$424,800,000 for the shares of WilTel common stock not already owned by Leucadia
consists of $422,800,000 of Leucadia common shares and estimated cash expenses
of $2,000,000, as described in the notes below.

    The unaudited pro forma consolidated statement of operations for the year
ended December 31, 2002 and the unaudited pro forma consolidated statement of
operations for the nine months ended September 30, 2003 have been prepared
assuming the acquisition of WilTel common stock occurred on January 1, 2002 and
reflect the effects of certain adjustments to the historical consolidated
financial statements that result from the acquisition of WilTel common stock.
WilTel emerged from bankruptcy in October 2002 and adopted the provisions of
fresh start accounting on October 31, 2002. WilTel's emergence from bankruptcy
resulted in a new reporting entity for accounting purposes and, as such, its
financial results for periods before and after its emergence are presented
separately.

    At acquisition, under generally accepted accounting principles, Leucadia is
required to allocate the purchase price to specific tangible and intangible
assets and liabilities based upon their relative fair values. Leucadia will
employ independent appraisals and other techniques to determine these fair
values. For purposes of the pro forma balance sheet, Leucadia principally
utilized the independent appraisals, market quotes, discounted cash flow
techniques and comparable sales information utilized by WilTel to prepare their
fresh start balance sheet upon emergence from bankruptcy as of October 31, 2002.
Leucadia reviewed this information in light of the passage of time since its
preparation and the changes in the telecommunications industry to determine
whether the information was still in a range of reasonable estimates of fair
values for use in the pro forma balance sheet, and concluded that it was. At
acquisition, the determination of the actual relative fair values may result in
a different allocation than was assumed for the pro forma financial statements.
Any such differences are expected to result in an increase or decrease to
property, plant and equipment and deferred income, could also result in a
different weighted average life used for depreciation and amortization purposes
and, as a result, could either increase or decrease the annual amount of actual
depreciation and amortization recorded. Accordingly, except for the effects of
the pro forma adjustments to property, plant and equipment, the September 30,
2003 historical WilTel balances were assumed to be reasonable estimates of fair
values for purposes of the allocation of the purchase price in the pro forma
balance sheet.

    The 'Pro Forma Adjustments' column combines the accounting effects of
Leucadia's actual purchases in 2002 with the pro forma accounting effect of the
offer to purchase the remaining shares. The principal accounting differences
between the actual 2002 purchases and the pro forma 2003 purchase are the amount
of excess purchase price over WilTel's historical book value of assets acquired
for each transaction, and the related depreciation and amortization expenses
reflected, on a pro forma basis, for each transaction. As of September 30, 2003,
the amount of the excess was $13,508,000 for the 2002 purchases and $74,891,000,
on a pro forma basis, for the 2003 offer to acquire the remaining shares. Each
of these amounts is assumed to be amortized as depreciation and amortization
expense over an average life of 15 years. In addition, the 2003 offer to
purchase the remaining shares will allow Leucadia to recognize WilTel's deferred
tax assets in an amount equal to Leucadia's deferred tax liability.

    The following notes pertain to the unaudited pro forma consolidated
financial statements:

     (a) Represents estimated expenses incurred in connection with the
         acquisition of WilTel common stock in the offer.

     (b) Represents the preliminary adjustment to fair value of the assets
         acquired. The excess of the amount paid to acquire WilTel common stock
         in the offer over the historical carrying amounts of net assets
         acquired is assumed allocated to property, plant and equipment.

                                        5






<PAGE>


     (c) Represents the elimination of the carrying amount of Leucadia's 47.4%
         interest in WilTel prior to the acquisition.

     (d) Represents the recognition of net deferred tax assets of WilTel in an
         amount equal to Leucadia's deferred tax liabilities. Additional
         deferred tax assets have not been recognized as they are not deemed
         more likely than not to be realizable.

     (e) Represents the elimination of the historical stockholders' equity of
         WilTel.

     (f) Reflects the issuance of 11,156,460 Leucadia common shares, based on a
         valuation of $37.90 per share, the average of the closing share prices
         for the five business day period commencing two days before and ending
         two days after the Merger Agreement was executed.

     (g) Represents an adjustment to the historical amortization of WilTel's
         deferred revenue as a result of the adjustment to the carrying amount
         of deferred revenue to reflect its fair value as of the date of
         acquisition.

     (h) The adjustment to reduce telecommunications cost of sales by $6,614,000
         results from the recognition of a liability for the fair value of
         unfavorable contracts as of the date of the acquisition assumed in the
         pro forma financial statements. Cost of sales has been reduced for
         actual amounts expensed for these contracts during the ten month period
         ended October 31, 2002; no other amounts were expensed for these
         contracts for any other period presented. The adjustment to reduce
         asset impairments and restructuring charges by $8,572,000 substantially
         reflects the reversal of severance expense recorded by WilTel, which
         was recognized by Leucadia as a liability in its allocation of the
         purchase price to the fair value of the acquired liabilities.

     (i) For both periods presented, represents an increase to depreciation
         expense ($4,420,000 for 2003 and $6,000,000 for 2002) related to the
         adjustment to fair value of property, plant and equipment at June 30,
         2003, which fair value adjustment is assumed amortized over an average
         life of 15 years. Property, plant and equipment primarily consists of
         network equipment (fiber, optronics and capacity IRUs) with depreciable
         lives of 3-20 years, rights-of-way with depreciable lives of 20 years,
         buildings and leasehold improvements with depreciable lives of 10-30
         years, computer equipment and software with depreciable lives of 2-3
         years, general office furniture and fixtures of 5-8 years, and
         construction in progress. Depreciation expense is computed using the
         straight-line method.

         The 2002 period also includes a reduction of $231,853,000 to WilTel's
         historical depreciation expense, as the historical carrying amount of
         WilTel's property, plant and equipment as of January 1, 2002 is nearly
         $3 billion more than the preliminary amount allocated to property,
         plant and equipment assumed in the pro forma financial statements.
         Accordingly, depreciation expense was substantially reduced on a pro
         forma basis since the actual depreciation expense recorded on a much
         larger asset would not have been recorded on a pro forma basis.

     (j) Represents the reversal of the gain recognized upon the discharge of
         WilTel's indebtedness in bankruptcy ($4.3 billion) and the reversal of
         the net charge recognized upon WilTel's application of fresh start
         accounting adjustments to the historical carrying amounts of its asset
         and liabilities ($2.1 billion).

     (k) Represents the reversal of historical interest expense related to all
         debt that was converted to equity under WilTel's bankruptcy plan.

     (l) Represents the reversal of Leucadia's historical federal income tax
         provision as losses generated by WilTel exceed Leucadia's historical
         income. Leucadia did not record in its historical financial statements
         a deferred tax benefit for its share of WilTel's losses, as its ability
         to utilize these unrealized capital losses to reduce taxes due on
         capital gains in the future was uncertain. Therefore, no amount of
         adjustment (l) relates to Leucadia's share of WilTel's losses. The 'Pro
         Forma As Adjusted' amounts for the line item 'income tax (benefit)
         provision' for all periods includes amounts for state income and
         franchise taxes

                                       6






<PAGE>



         and, for the 2002 period, a reversal of Leucadia tax reserves as a
         result of the resolution of certain federal income tax contingencies
         unrelated to the WilTel acquisition.

     (m) Represents the reversal of Leucadia's recognition of its share of
         WilTel's losses under the equity method of accounting as a result of
         the pro forma consolidation.

     (n) For basic and diluted earnings (loss) per common share, represents the
         number of shares issued in connection with the acquisition of WilTel
         common stock pursuant to the offer. In addition, for the year ended
         December 31, 2002, the pro forma adjustment for diluted earnings (loss)
         per common share includes a reduction of approximately 349,000 shares
         issuable pursuant to outstanding Leucadia options, that are included in
         the historical calculation but not in the pro forma calculation as the
         result is antidilutive.

     (o) For the nine months ended September 30, 2003, WilTel's other income
         includes non-operating and non-recurring gains of $54,400,000. Such
         gains are attributable to a gain on the sale of a subsidiary
         ($21,100,000) and gains resulting from the termination of various
         agreements that released WilTel from previously accrued obligations.

                                       7




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
