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Previous: FIRST TRUST GNMA SERIES 31 & SERIES 32, 24F-2NT/A, 1994-02-24 |
Next: FIRST TRUST GNMA SERIES 33 & SERIES 34, 24F-2NT/A, 1994-02-24 |
<PAGE> 1
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): January 24, 1994
LEHMAN BROTHERS HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-9466 13-3216325
(Commission File Number) (IRS Employer Identification No.)
Three World Financial Center
New York, New York 10285
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including
area code: (212) 298-2000
________________________________________
<PAGE> 2
ITEM 5. OTHER EVENTS.
FOURTH QUARTER AND YEAR-TO-DATE 1993 EARNINGS
Filed herewith are the preliminary and unaudited Consolidated Statements
of Operations of Lehman Brothers Holdings Inc. ("the Company"), for the quarter
and year ended December 31, 1993, which Consolidated Statements of Operations
will be superseded by information contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 1993. All adjustments which are, in
the opinion of management, necessary for a fair presentation of the
Consolidated Statements of Operations for the periods presented have been
included. Certain amounts for fourth quarter and year-to-date 1992 reflect
reclassifications to conform to the current periods' presentation. In
addition, filed herewith are unaudited pro forma Consolidated Statements of
Operations for the years ended December 31, 1993 and 1992, respectively, which
reflect, among other things, the elimination of revenues and expenses of
certain of the Company's retail and asset management businesses, as well as
certain other assets related to such businesses (the "SLBD Results of
Operations"), the loss on the sale of such businesses and the sale of a
non-core business. The presentation herein of historical information for 1993
(the "Current Presentation") differs from the presentations set forth in the
Reports on Form 10-Q for the first, second and third quarters of 1993, which
presentations reflect SLBD Results of Operations, the loss on the sale of such
businesses and reserves for certain non-core businesses in one line item called
"Retail/Asset Management." In the Current Presentation, SLBD Results of
Operations are included in all applicable line items through July 31, 1993 (the
date of the closing of the sale of the Company's retail and asset management
businesses).
LEHMAN BROTHERS HOLDINGS INC. TO BECOME INDEPENDENT CORPORATION
On January 24, 1994, American Express Company ("American Express")
announced plans to issue a special dividend to its common shareholders. Such
special dividend will consist of the common shares of the Company which
American Express owns immediately preceding such dividend, including common
stock which it receives in exchange for the Company's $250 million Money Market
Cumulative Preferred(sm) Stock. Prior to the issuance of such dividend, the
Company's equity capital will increase by $1.25 billion, bringing its equity
capital to approximately $3.3 billion. The additional equity will be the
result of the purchase of i) $160 million of newly-issued Company common stock
by the Company's employees, approximately $60 million of which would come from
an employee ownership plan that was established in 1993; and ii) $200 million
of newly-issued Company preferred stock and $890 million of newly-issued
Company common stock, each by American Express.
In addition, American Express' plan to spin-off the Company provides
that American Express would receive 50% of any of the Company's net income in
excess of $400 million per year, with a cap of $50 million per year, for each
of the next eight years. Such plan also provides for American Express to
receive certain contingent revenue and earnings related
- 2 -
<PAGE> 3
participations due to the Company from Travelers Corporation for a period of
three and five years, respectively, in connection with the sale last year of
the Company's retail and asset management businesses.
Final terms of the proposed transaction, which is subject to certain
conditions, have not yet been determined. The completion of the proposed
transaction, which is expected to occur during the second quarter of 1994,
would result in the Company emerging as an independent publicly owned
corporation.
Filed herewith is certain unaudited pro forma financial information
which reflects, as stated above, the effects of the sales of certain businesses
on such financial information, and is also presented in order to reflect the
estimated effects of the proposed transaction.
- 3 -
<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(b) Pro Forma Financial Information:
LEHMAN BROTHERS HOLDINGS INC.
PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma financial information set forth in Exhibits
99.3, 99.4 and 99.5 is presented in order to illustrate the estimated
effects of the proposed capital infusion by American Express and related
actions (the "Current Transaction"), as well as the elimination of the
SLBD Results of Operations, the loss on the sale of certain of the
Company's retail and asset management businesses and the sale of a
non-core business.
The pro forma financial statements for the Company assume for statement
of operations purposes that the Primerica Transaction (as hereinafter
defined), the sale of Shearson Lehman Hutton Mortgage Corporation (the
"SLHMC Transaction") and the Current Transaction were consummated as of
the first day of the period reported and assume for balance sheet
purposes that such Transactions were consummated on the last day of the
period reported.
The pro forma financial information is presented for comparative
purposes only and is not necessarily indicative of the Company's results
of operations or financial position in the future or of what the
Company's results of operations or financial position would have been
had the Primerica Transaction, the SLHMC Transaction and the Current
Transaction been consummated on or as of the dates referred to in the
immediately preceding paragraph. The pro forma financial information
should be read in conjunction with the consolidated financial statements
of the Company and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1992.
(c) Exhibits
The following Exhibits are filed as a part of this Report.
99.1 Consolidated Statement of Operations
(Three Months Ended December 31, 1993)
(Preliminary and Unaudited)
99.2 Consolidated Statement of Operations
(Year Ended December 31, 1993)
(Preliminary and Unaudited)
- 4 -
<PAGE> 5
99.3 Historical and Pro Forma
Consolidated Balance Sheets
(At December 31, 1993)
(Unaudited)
99.4 Historical and Pro Forma Consolidated
Statements of Operations
(Year Ended December 31, 1993)
(Unaudited)
99.5 Historical and Pro Forma Consolidated
Statements of Operations
(Year Ended December 31, 1992)
(Unaudited)
The Exhibit Index to this Report is incorporated herein by reference.
- 5 -
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEHMAN BROTHERS HOLDINGS INC.
BY: /S/ ROBERT MATZA
-------------------------
ROBERT MATZA
CHIEF FINANCIAL OFFICER
DATE: FEBRUARY 24, 1994
- 6 -
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<S> <C>
Exhibit 99.1 Consolidated Statement of Operations
(Three Months Ended December 31, 1993)
(Preliminary and Unaudited)
Exhibit 99.2 Consolidated Statement of Operations
(Year Ended December 31, 1993)
(Preliminary and Unaudited)
Exhibit 99.3 Historical and Pro Forma
Consolidated Balance Sheets
(At December 31, 1993)
(Unaudited)
Exhibit 99.4 Historical and Pro Forma
Consolidated Statements of Operations
(Year Ended December 31, 1993)
(Unaudited)
Exhibit 99.5 Historical and Pro Forma
Consolidated Statements of Operations
(Year Ended December 31, 1992)
(Unaudited)
</TABLE>
- 7 -
<PAGE> 1
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
PRELIMINARY AND UNAUDITED
(IN MILLIONS)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
---------------------------
Revenues 1993 1992
---- ----
<S> <C> <C>
Market making and principal transactions $ 359 $ 365
Investment banking 246 169
Commissions 127 425
Interest and dividends 1,451 1,419
Other 20 182
----- -----
Total Revenues 2,203 2,560
Interest Expense 1,326 1,271
----- -----
Net Revenues 877 1,289
----- -----
Non-interest expenses
Compensation and benefits 442 785
Communications 48 96
Brokerage, commissions and clearance fees 42 35
Professional services 45 57
Occupancy and equipment 38 91
Advertising and market development 33 58
Depreciation and amortization 33 46
Other 33 410
----- -----
Total non-interest expenses 714 1,578
----- -----
Income (loss) from continuing operations before taxes 163 (289)
Provision for (benefit from) income taxes 49 (102)
----- -----
Income (loss) from continuing operations 114 (187)
Income from discontinued operations, net of taxes - 21
------ -----
Net income (loss) 114 (166)
Preferred stock dividend requirements (12) (12)
----- -----
Net income (loss) applicable to common shares $ 102 $ (178)
====== ======
</TABLE>
<PAGE> 1
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
PRELIMINARY AND UNAUDITED
(IN MILLIONS)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
Revenues 1993 1992
---- ----
<S> <C> <C>
Market making and principal transactions $1,967 $1,697
Commissions 1,316 1,677
Investment banking 972 892
Interest and dividends 5,840 5,661
Other 491 684
------ ------
Total Revenues 10,586 10,611
Interest Expense 5,368 5,185
------ ------
Net Revenues 5,218 5,426
------ ------
Non-interest expenses
Compensation and benefits 2,989 3,310
Communications 318 378
Occupancy and equipment 254 326
Professional services 203 212
Advertising and market development 161 205
Depreciation and amortization 157 185
Brokerage, commissions and clearance fees 140 117
Other 282 695
Loss on sale of SLBD 535
Reserves for non-core businesses 152
Computervision Writedown 245
-------- ------
Total non-interest expenses 5,191 5,673
------ ------
Income (loss) from continuing operations before taxes
and cumulative effect of changes in accounting
principles 27 (247)
Provision for (benefit from) income taxes 318 (54)
------ ------
Loss from continuing operations before cumulative
effect of changes in accounting principles (291) (193)
Income from discontinued operations, net of taxes
Income from operations 24 77
Gain on disposal 165
------ --------
189 77
------ -------
Loss before cumulative effect of changes
in accounting principles (102) (116)
Cumulative effect of changes in accounting
principles (7)
------- ------
Net loss (102) (123)
Preferred stock dividend requirements (48) (48)
------ ------
Net loss applicable to common shares $ (150) $ (171)
====== ======
</TABLE>
<PAGE> 1
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
HISTORICAL AND PRO FORMA CONSOLIDATED BALANCE SHEETS
UNAUDITED
(IN MILLIONS)
<TABLE>
<CAPTION>
ASSETS December 31, 1993
-------------------------------------------------
Pro Forma
-----------------------------
Historical Adjustments Total
---------- ----------- -----
<S> <C> <C>
Cash and cash equivalents $1,333 $1,333
Cash and securities segregated under federal
and other regulations 1,073 1,073
Receivables:
Brokers and Dealers 5,059 5,059
Customers 2,646 2,646
Other 2,693 2,693
Securities purchased under agreements to resell 26,046 26,046
Securities borrowed 4,372 4,372
Securities and commodities owned 35,699 35,699
Buildings, furnishings, equipment and leasehold
improvements, at cost (net of accumulated
depreciation and amortization of $438) 529 529
Deferred expenses and other assets 750 750
Excess of cost over fair value of net assets
acquired (net of accumulated amortization
of $107) 274 274
------- --------- -------
$80,474 $80,474
======= ========= =======
</TABLE>
<PAGE> 2
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
HISTORICAL AND PRO FORMA CONSOLIDATED BALANCE SHEETS
UNAUDITED
(IN MILLIONS)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY December 31, 1993
----------------------------------------------
Pro Forma
-------------------------------
Historical Adjustments Total
---------- ------------------ -------
<S> <C> <C> <C>
Commercial paper and short-term debt $10,208 $(1,190) (f) $9,018
Payables:
Brokers and dealers 1,385 1,385
Customers 4,130 4,130
Banks 722 722
Accrued liabilities and other payables 3,458 (60) (e) 3,398
Securities sold under agreements to repurchase 39,191 39,191
Securities loaned 1,116 1,116
Securities and commodities sold but net yet purchased 8,313 8,313
Term notes 7,779 7,779
Subordinated indebtedness 2,120 2,120
------ -------- ------
Total liabilities 78,422 (1,250) 77,172
------ ------- ------
Stockholders' equity:
Preferred stock, $1 par value; 38,000,000
shares authorized:
5% Cumulative Convertible Voting, Series A, 13,000,000
shares authorized, issued and outstanding; $39.10
liquidation preference per share 508 508
Money Market Cumulative, 3,300 shares authorized; 250
shares issued and outstanding; $1,000,000 liquidation
preference per share 250 (250) (a)
Perpetual Voting Preferred 200 (b) 200
Common stock, $.10 par value; 300,000,000 shares
authorized; 168,235,284 shares issued and outstanding 17 17
Additional paid-in capital 1,871 890 (c) 3,171
250 (a)
100 (d)
60 (e)
Foreign currency translation adjustment (12) (12)
Accumulated deficit (582) (582)
------- --------- -------
Total stockholders' equity 2,052 1,250 3,302
------- ------- -------
$80,474 $80,474
======= ========= =======
</TABLE>
<PAGE> 3
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
HISTORICAL AND PRO FORMA CONSOLIDATED BALANCE SHEET ADJUSTMENTS
At December 31, 1993
a) Adjustment reflects the exchange of the existing $250 million
of Money Market Cumulative Preferred Stock at a current rate of
9% for common equity.
b) Adjustment reflects American Express' purchase of $200 million
of newly-issued Perpetual Voting Preferred Stock at the
prevailing market rate estimated to be approximately 8%.
c) Adjustment reflects American Express' $890 million cash
purchase of newly-issued Common Stock.
d) Adjustment reflects $100 million of newly-issued Common Stock
to be purchased by employees.
e) Adjustment reflects $60 million of newly-issued Common Stock
purchased by employees through an employee ownership plan
established in 1993.
f) Adjustment reflects the net proceeds received from adjustments
(b), (c) and (d).
When the number of shares of Common Stock to be issued as a result of
the Current Transaction has been determined, a reclassification from additional
paid in capital to common stock will be reflected equal to the number of Common
Shares issued times the $.10 par value.
On the effective date of the Current Transaction the Company will no
longer be included in the consolidated U.S. income tax return of American
Express. The Company does not anticipate any significant adverse tax
consequences as a result of the completion of the Current Transaction.
<PAGE> 1
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
HISTORICAL AND PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(IN MILLIONS)
<TABLE>
<CAPTION>
Year Ended December 31,1993
----------------------------------------------------------
Pro Forma Adjustments
-----------------------------------
Revenues
Historical SLBD SLHMC
---------- ---- -----
<S> <C> <C> <C>
Market making and principal transactions $1,967 $(323)(a)
Commissions 1,316 (828)(a)
Investment banking 972 (170)(a)
Interest and dividends 5,840 (148)(a) $ (13)(b)
Other 491 (356)(a) (56)(b)
------- ------ ------
Total Revenues 10,586 (1,825) (69)
Interest Expense 5,368 (116)(a),(d) (7)(b)
------ ------- -------
Net Revenues 5,218 (1,709) (62)
------ ------- -------
Non-interest Expenses
Compensation and benefits 2,989 (1,147)(a) (17)(b)
Communications 318 (126)(a) (4)(b)
Occupancy and equipment 254 (104)(a) (3)(b)
Professional services 203 (40)(a) (2)(b)
Advertising and market development 161 (33)(a) (1)(b)
Depreciation and amortization 157 (44)(a)
Brokerage, commissions and clearance fees 140 32 (a)
Other 282 (110)(a) (35)(b)
Loss on sale of SLBD 535 (535)(a)
Reserves for non-core businesses 152 (120)(c)
------ -------- -------
Total non-interest Expenses 5,191 (2,107) (182)
------ -------- -------
Income from continuing operations before
taxes 27 398 120
Provision for income taxes 318 (157)(a),(f) 41
------ ------- ------
(Loss) income from continuing operations $(291) $ 555 $ 79
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,1993
----------------------------------------------------------
Pro Forma
Adjustments
-------------
Revenues Current
Transaction Total
----------- -----
<S> <C> <C>
Market making and principal transactions $1,644
Commissions 488
Investment banking 802
Interest and dividends 5,679
Other 79
------ -------
Total Revenues 8,692
Interest Expense (42)(e) 5,203
------ ------
Net Revenues 42 3,489
------ ------
Non-interest Expenses
Compensation and benefits 1,825
Communications 188
Occupancy and equipment 147
Professional services 161
Advertising and market development 127
Depreciation and amortization 113
Brokerage, commissions and clearance fees 172
Other 137
Loss on sale of SLBD
Reserves for non-core businesses 32
------ -------
Total non-interest Expenses 2,902
------ -------
Income from continuing operations before
taxes 42 587
Provision for income taxes 17(f) 219
------ ------
(Loss) income from continuing operations $ 25 $ 368
====== ======
</TABLE>
<PAGE> 2
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
HISTORICAL AND PRO FORMA STATEMENTS OF OPERATIONS ADJUSTMENTS
For the Year Ended December 31, 1993
Since The Boston Company, Inc. ("Boston") is reported as a
discontinued operation in the Company's financial statements, its results are
not reflected in the Company's 1993 results from continuing operations. The
historical loss of $291 million from continuing operations before cumulative
effect of changes in accounting principles represents: (i) income from the
continuing core businesses of the Company of $376 million; (ii) the net income
of SLBD of $63 million; (iii) the net loss on the sale of SLBD of $630 million;
and (iv) the net reserve for non- core businesses of $100 million of which $21
million of such reserve is related to certain non-core partnership syndication
activities in which the Company is no longer actively engaged. The pro forma
adjustments to the statement of operations give effect to the items described
below:
a) Adjustment reflects the elimination of revenues and expenses of
certain of the Company's retail and asset management businesses,
as well as certain other assets related to such businesses
("SLBD") and the loss on the sale of such assets (the "Primerica
Transaction"). Also eliminated is the income tax expense of
$149 million related to these items.
b) Adjustment reflects the elimination of revenues and expenses of
SLHMC.
c) Adjustment to reserves for non-core businesses reflects the
elimination of the reserves related to the sale of SLHMC. Also
eliminated is the income tax benefit of $41 million related to
these items. Adjustments have not been made for reserves taken in
the first quarter of 1993 related to certain non-core partnership
syndication activities in which the Company is no longer actively
engaged.
d) Adjustment reflects reduced interest expense of approximately $52
million resulting from the utilization of cash proceeds (from the
sales of Boston, SLBD and SLHMC) to reduce the Company's
short-term debt and term notes, offset by interest expense of $72
million allocated to SLBD and SLHMC for the carrying costs of
buildings, improvements and equipment and certain acquisition
related debt, which is not directly eliminated by the Primerica
Transaction or the sale of SLHMC other than through the
utilization of available sales proceeds.
e) Adjustment reflects reduced interest expense of approximately $42
million resulting from the utilization of the cash received of
$1,090 million as capital infusion from American Express and the
$100 million raised through the proposed sale of Common Stock to
the Company's employees.
f) Adjustments (d) and (e) are tax effected at a rate of 40%.
<PAGE> 3
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
HISTORICAL AND PRO FORMA STATEMENTS OF OPERATIONS ADJUSTMENTS
In recognition of its capital infusion, American Express will receive
50% of any of the Company's net income in excess of $400 million per year, with
a cap of $50 million per year for each of the next eight years. This threshold
would not have been achieved in 1993. In addition, American Express will
receive certain contingent revenue and earnings related participations due to
the Company from Travelers Corporation (previously Primerica Corporation) for a
period of three and five years, respectively, in connection with the sale of
SLBD.
On the effective date of the Current Transaction the Company will no
longer be included in the consolidated U.S. income tax return of American
Express. The Company does not anticipate any significant adverse tax
consequences as a result of a completion of the Current Transaction.
<PAGE> 1
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
HISTORICAL AND PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(IN MILLIONS)
<TABLE>
<CAPTION>
Year Ended December 31,1992
-------------------------------------------------------------------
Pro Forma Adjustments
-------------------------------------------------
Revenues
Historical SLBD SLHMC
---------- ---- -----
<S> <C> <C> <C>
Market making and principal transactions $1,697 $ (575)(a)
Commissions 1,677 (1,231)(a)
Investment banking 892 (218)(a)
Interest and dividends 5,661 (226)(a) $ (31)(b)
Other 684 (531)(a) (88)(b)
------ ------- ------
Total Revenues 10,611 (2,781) (119)
Interest Expense 5,185 (243)(a),(c) (24)(b)
------ ------ ------
Net Revenues 5,426 (2,538) (95)
------ ------- ------
Non-interest Expenses
Compensation and benefits 3,310 (1,736)(a) (23)(b)
Communications 378 (194)(a) (6)(b)
Occupancy and equipment 326 (183)(a) (4)(b)
Professional services 212 (66)(a) (3)(b)
Advertising and market development 205 (84)(a) (2)(b)
Depreciation and amortization 185 (89)(a) (1)(b)
Brokerage, commissions and clearance fees 117 52 (a)
Other 695 (136)(a) (61)(b)
Computervision Writedown 245
------ ------- -------
Total non-interest Expenses 5,673 (2,436) (100)
------ ------- -------
Income from continuing operations
before taxes and cumulative effect of
changes in accounting principles (247) (102) 5
(Benefit from) income taxes (54) (53)(a),(e) 2(b)
------- ------ ------
(Loss) income from continuing operations
before cumulative effect of changes
in accounting principles $(193) $ (49) $ 3
====== ======= ======
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,1992
-------------------------------------------------------------------
Pro Forma Adjustments
-------------------------------------------------
Current
Transaction Total
----------- -----
<S> <C> <C>
Market making and principal transactions $1,122
Commissions 446
Investment banking 674
Interest and dividends 5,404
Other 65
------- ------
Total Revenues 7,711
Interest Expense $(42)(d) 4,876
----- ------
Net Revenues 42 2,835
------ ------
Non-interest Expenses
Compensation and benefits 1,551
Communications 178
Occupancy and equipment 139
Professional services 143
Advertising and market development 119
Depreciation and amortization 95
Brokerage, commissions and clearance fees 169
Other 498
Computervision Writedown 245
------- ------
Total non-interest Expenses 3,137
------- ------
Income from continuing operations
before taxes and cumulative effect of
changes in accounting principles 42 (302)
(Benefit from) income taxes 17(e) (88)
------ ------
(Loss) income from continuing operations
before cumulative effect of changes
in accounting principles $ 25 $(214)
====== ======
</TABLE>
<PAGE> 2
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
HISTORICAL AND PRO FORMA STATEMENTS OF OPERATIONS ADJUSTMENTS
For the Year Ended December 31, 1992
Since Boston is reported as a discontinued operation in the Company's financial
statements, its results are not reflected in the Company's 1992 results from
continuing operations. The pro forma adjustments to the statement of
operations give effect to the items described below:
a) Adjustment reflects the elimination of revenues and expenses
of SLBD.
b) Adjustment reflects the elimination of revenues and expenses
of SLHMC.
c) Adjustment reflects reduced interest expense of approximately
$112 million resulting from the utilization of cash proceeds
to reduce the Company's short-term debt and term notes, offset
by interest expense of $102 million allocated to SLBD and
SLHMC for the carrying costs of buildings, improvements and
equipment and certain acquisition related debt, which is not
directly eliminated by the Primerica Transaction or the SLHMC
Transaction other than through the utilization of available
sales proceeds.
d) Adjustment reflects reduced interest expense of approximately
$42 million resulting from the utilization of the cash
received of $1,090 million as capital infusion from American
Express and the $100 million raised through the proposed sale
of Common Stock to the Company's employees.
e) Adjustments (c) and (d) are tax effected at a rate of 40%.
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