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:
July 20, 1995
SALOMON INC
(Exact name of registrant as specified in its charter)
Delaware 1-4346 22-1660266
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
Seven World Trade Center, New York, New York 10048
(Address of Principal Executive Offices) (Zip Code)
(212) 783-7000
(Registrant's Telephone No.)
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Item 5. Other Events
On July 20, 1995, the Registrant issued a press release, a
copy of which is filed herewith as Exhibit 99 and incorporated herein by
reference in its entirety.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
Exhibits:
(99) Press release dated July 20, 1995
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SALOMON INC
(Registrant)
Date: July 20, 1995 By: /s/ Richard Carbone
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Controller
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Contact: Robert F. Baker
212-783-6299
For immediate release:
SALOMON INC REPORTS A QUARTERLY NET LOSS OF $60 MILLION
New York, July 20, 1995 - Salomon Inc today announced a second quarter net loss
of $60 million, somewhat less than the amount previously estimated. For the
first six months of 1995, the Company recorded net income of $21 million
compared with a net loss of $138 million in the first six months of 1994.
Salomon Brothers, the Company's global investment banking and securities
business, recorded pretax income of $56 million in the second quarter and $116
million in the first six months of 1995. While total Salomon Brothers results
for the second quarter were nearly equal to the first quarter, there was a
significant shift in the mix of earnings between the Client-Related and
Proprietary Trading Businesses.
Salomon Brothers Client-Related Business recorded pretax income of $149 million
in the second quarter of 1995, which represented its best quarter since 1993,
and the fifth most profitable quarter since 1990. Revenues of $595 million for
the quarter were up $370 million, or 164%, from the first quarter. The equity
business had a strong performance for the quarter, reflecting an improvement in
U.S. equity underwriting rankings to third for the quarter, on a lead basis.
Fixed income revenue also improved significantly, benefiting from increased
volumes in global bond markets.
Salomon Brothers Proprietary Trading Business recorded pretax profits of $146
million in the first six months of 1995, compared with $93 million in the first
half of 1994. Proprietary Trading strategies are often designed with time
horizons of a year or more; as such, results should be viewed over longer-term
periods. The interim volatility of results over the first two quarters of 1995
($239 million pretax profit in the first quarter; $93 million pretax loss in the
second quarter) reflects the Company's mark-to-market accounting practices and
is consistent with management's expectations relative to current position risk
levels.
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For the first six months of 1995, the Phibro Division recorded a pretax loss of
$39 million compared with pretax earnings of $132 million in the first half of
1994. The Phibro Division recorded $123 million of pretax profits in the first
quarter of 1995 and $162 million of pretax losses in the second quarter of 1995.
Results for Phibro Division are likely to show significant quarter-to-quarter
volatility.
Phibro USA, the Company's oil refining and marketing business, recorded pretax
earnings of $1 million in the second quarter of 1995, compared to a pretax loss
of $10 million in the second quarter of 1994. The 1995 second quarter reflects
improvement from the $51 million pretax loss in the first quarter of 1995,
principally due to higher gasoline margins. For the first six months of 1995,
Phibro USA recorded a pretax loss of $50 million, compared with pretax earnings
of $17 million in the first half of 1994.
Total assets were $164 billion at June 30, 1995 and average assets for the
quarter were $176 billion. Book value per common share was $32.38 at June 30,
1995 compared with $32.65 at the end of 1994. Treasury share repurchases were
negligible during the first six months of 1995; shares authorized for repurchase
by the Company's Board of Directors remained at 9.8 million at June 30, 1995.
Selected financial information and the unaudited consolidated statement of
income follow:
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SALOMON INC AND SUBSIDIARIES
Selected Financial Information (unaudited)
(Dollars in millions, except per share data)
Quarter ended Six months ended
June 30, March 31, June 30, June 30, June 30,
1995 1995 1994 1995 1994
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SUMMARY OF OPERATING RESULTS BY SEGMENT:
Income (loss) before taxes:
Salomon Brothers' business unit contributions:
Client-Related Business $ 149 $ (179) $ (291) $ (30) $ (464)
Proprietary Trading Businesses (93) 239 (119) 146 93
Total Salomon Brothers 56 60 (410) 116 (371)
Phibro Division (162) 123 82 (39) 132
Phibro USA 1 (51) (10) (50) 17
Corporate and other 6 2 (8) 8 (12)
Income (loss) before taxes $ (99) $ 134 $ (346) $ 35 $ (234)
Salomon Brothers' revenues, net of interest expense:
Client-Related Business:
Global investment banking $ 154 $ 22 $ 86 $ 176 $ 256
Fixed income secondary markets 224 135 (125) 359 46
Equity secondary markets 201 55 62 256 73
Foreign exchange 6 (2) 55 4 (56)
Private Investment Department - 6 6 6 11
Asset management 10 9 11 19 20
Total Client-Related Business 595 225 95 820 350
Proprietary Trading Businesses (43) 362 (60) 319 281
Total Salomon Brothers' revenues,
net of interest expense $ 552 $ 587 $ 35 $ 1,139 $ 631
PRIMARY RETURN ON AVERAGE COMMON
STOCKHOLDERS' EQUITY (8.8) % 7.1 % (22.0) % (0.8) % (8.0) %
PER COMMON SHARE:
Cash dividends $ 0.16 $ 0.16 $ 0.16 $ 0.32 $ 0.32
High market price 43 1/4 40 1/8 52 5/8 43 1/4 52 3/4
Low market price 33 1/4 32 1/4 47 1/4 32 1/4 44 3/4
Ending market price 40 1/8 33 7/8 47 3/4
Book value at quarter-end 32.38 33.22 35.71
AT QUARTER-END (in billions):
Total assets $ 164 $ 165 $ 176
Average assets for the quarter 176 172 176
Common equity 3.5 3.6 3.8
Convertible preferred equity 0.7 0.7 0.7
Perpetual preferred equity 0.3 0.3 0.3
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SALOMON INC AND SUBSIDIARIES
Consolidated Statement of Income (unaudited)
(Dollars in millions, except per share data)
Quarter ended Six months ended
June 30, March 31, June 30, June 30, June 30,
1995 1995 1994 1995 1994
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Revenues:
Interest and dividends $ 1,944 $ 1,608 $ 1,347 $ 3,552 $ 2,747
Principal transactions (252) 370 (245) 118 (192)
Investment banking 154 22 86 176 256
Commissions 81 89 85 170 175
Other 27 (21) 10 6 66
Total revenues 1,954 2,068 1,283 4,022 3,052
Interest expense 1,553 1,325 1,112 2,878 2,170
Revenues, net of interest expense 401 743 171 1,144 882
Noninterest expenses:
Compensation and employee-related 324 431 338 755 755
Technology 64 64 61 128 121
Occupancy 42 41 51 83 89
Professional services and business
development 35 45 39 80 73
Clearing and exchange fees 17 16 15 33 35
Other 18 12 13 30 43
Total noninterest expenses 500 609 517 1,109 1,116
Income (loss) before taxes (99) 134 (346) 35 (234)
Income taxes (39) 53 (142) 14 (96)
Net income (loss) $ (60) $ 81 $ (204) $ 21 $ (138)
PRIMARY EARNINGS (LOSS)
PER SHARE $ (0.73) $ 0.59 $ (2.08) $ (0.14) $ (1.54)
WEIGHTED AVERAGE SHARES
OF COMMON STOCK
OUTSTANDING (in thousands):
For primary earnings per share 106,500 106,300 105,800 106,400 107,900
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