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): June 21, 1995
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.)
3 World Financial Center
New York, New York 10285
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including
area code: (212) 526-7000
________________________________________
Item 5. Other Events
Second Quarter 1995
On June 21, 1995, Lehman Brothers Holdings Inc. (the "Registrant")
issued a press release with respect to its second quarter 1995 earnings
(the "Earnings Release").
Copies of the Earnings Release follow.
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are filed as part of this Report.
99.1 Press Release Relating to Second
Quarter 1995 Earnings
99.2 Selected Statistical Information
99.3 Consolidated Statement of Operations
(Six Months Ended May 31, 1995) (Preliminary
and Unaudited)
The Exhibit Index to this Report is incorporated herein by reference.
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
(Principal Financial Officer)
Date: June 28, 1995
EXHIBIT INDEX
Exhibit No. Exhibit
Exhibit 99.1 Press Release Relating to
Second Quarter
1995 Earnings
Exhibit 99.2 Selected Statistical
Information
Exhibit 99.3 Consolidated Statement of
Operations (Six Months Ended May 31, 1995)
(Preliminary and Unaudited)
Exhibit 99.1
For Immediate Release MEDIA CONTACT: Steven H.Faigen
(212) 526-4379
INVESTOR CONTACT: Shaun Butler
(212) 526-8381
LEHMAN BROTHERS REPORTS 1995 FISCAL YEAR
SECOND QUARTER EARNINGS
NEW YORK, June 21, 1995 _ Lehman Brothers Holdings Inc. (NYSE: LEH)
today reported net income of $58 million or $0.43 per share of common
stock for the second quarter ended May 31, 1995. Net income increased
by 29 percent over the $45 million reported for the first quarter of
1995 and 81 percent over the $32 million of net operating income
reported for the second quarter of 1994 before recognition of the $12
million after-tax spin-off charge.
Richard S. Fuld Jr., Chairman and Chief Executive Officer, said: "The
second quarter saw a clear shift in expectations for the direction of
interest rates. This created a better revenue environment for the
quarter, as activity with both investors and issuers increased. Also
during the quarter, we continued our program of bringing down costs
and increasing productivity throughout the Firm. The result has been
further improvement in pre-tax margins and profitability."
Net revenues (total revenues less interest expense) for the second
quarter were $731 million compared to $707 million for the first
quarter of 1995 and $719 million for the second quarter of 1994.
Customer flow showed an improvement compared to the first quarter of
1995. Investment banking advisory fees remained strong and, towards
the end of the quarter, the syndicate calendar began to build.
Operating expenses were $641 million versus $637 million for the first
quarter of 1995 and $669 million for the second quarter of 1994.
Compensation and benefits expense totaled $371 million, or 50.7
percent of revenues compared to 50.9 percent in the first quarter. At
the end of the second quarter, the Firm's headcount was 8,195 compared
to 8,428 at the end of the first quarter of 1995 and down from a peak
of 9,400 employees reached during January 1994. Non-personnel expenses
of $270 million decreased by $28 million on an annualized basis from
the first quarter of 1995 and $143 million, on an annualized basis,
versus the second quarter of 1994.
"Looking ahead, we remain committed to our strategy of enhancing
profitability and positioning the Firm for future growth. We will
continue the cost reduction program launched in the fourth quarter of
1994, and increase productivity to improve margins further. At the
same time, we will continue strengthening those businesses that
present the greatest potential for significant, profitable growth,"
added Mr. Fuld.
As of May 31, 1995, Lehman Brothers' stockholders' equity was $3,475
million and total capital (stockholders' equity and long-term debt)
was $16,257 million. Book value per common share was $25.16.
Separately, the Firm announced today the terms of its 1995 Stock Award
Program. Launched in 1994, this program is designed to encourage all
employees of the Firm to align their interests with those of
shareholders by giving them a direct stake in the equity of the Firm.
Under the 1995 Program, employees will receive approximately 7 million
Restricted Stock Units (RSUs) as part of their total compensation.
Including this year's award, ownership by employees will increase to
16 percent, up from the current level of 10 percent.
Lehman Brothers is a global investment bank with leadership positions
in corporate finance, advisory services, municipal finance and
securities sales, trading and research. Lehman Brothers serves the
financial needs of corporate, government and institutional clients,
and high-net-worth individuals, through offices in major financial
centers worldwide.
Exhibit 99.2
<TABLE>
LEHMAN BROTHERS HOLDINGS INC.
SELECTED STATISTICAL INFORMATION
(Preliminary and Unaudited)
(Dollars in millions, except per share data)
<CAPTION>
Quarters ended
5/31/95 2/28/95 11/30/94 8/31/94(a) 6/30/94(a) 3/31/94
<S> <C> <C> <C> <C> <C> <S>
Income Statement
Net Revenues $ 731 $ 707 $ 708 $ 719 $ 719 $ 868
Non-Interest Expenses:
Compensation and
Benefits 371 360 356 388 364 450
Nonpersonnel
Expenses 270 277 287 298 305 297
Aftertax Income from
Operations (excluding
special charges) 58 45 46 22 32 73
Special Charges (aftertax):
Spin-Off Expenses (12)
Severance Charge (18)
Accounting Change (13)
Net Income 58 45 46 22 20 42
Financial Ratios (%)
Return on Common Equity
(annualized) 7.0 5.1 5.2 1.6 2.8 N/A
Pretax Operating Margin
(excluding special
charges) 12.3 9.9 9.1 4.6 6.8 14.0
Compensation &
Benefits/
Net Revenues 50.7 50.9 50.3 53.9 50.7 51.8
Effective Tax Rate 35.5 35.8 29.2 35.1 34.6 38.0
Balance Sheet
Total Assets $123,000 $127,304 $109,947 $121,246 $118,511 $112,277
Total Assets
Excluding Matched
Book (b) 83,000 85,257 72,457 76,677 74,375 71,147
Common Stockholders'
Equity 2,767 2,718 2,687 2,652 2,602 1,275
Total Stockholders'
Equity 3,475 3,426 3,395 3,360 3,310 2,033
Total Capital (long-
term debt plus
stockholders'
Equity 16,257 14,603 14,716 14,187 13,877 12,608
Book Value per
Common Share (c) 25.16 24.69 24.35 23.97 24.65 N/A
Other Data (#s)
Common Stock
Outstanding 104,494,667 104,537,690 105,528,914 105,554,748 N/A
104,524,685
Employees 8,195 8,428 8,512 8,926 8,948 9,292
</TABLE>
(a) The results for the month of June 1994 are reflected in both the
second and third quarters of 1994.
(b) Matched book is defined as securities purchased under agreements to
resell.
(c) Beginning in August 31, 1994, this calculation includes restricted
stock units granted under the 1994 Lehman Stock Award Program.
Exhibit 99.3
<TABLE>
LEHMAN BROTHERS HOLDINGS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Preliminary and Unaudited)
(In millions, except per share data)
<CAPTION>
Three Months Ended Percentage of
May 31, June 30, Dollar Change
1995 1994 (Note 1) Inc/(Dec)
<S> <C> <C> <C>
Revenues:
Principal transactions $355 $383 (7)%
Investment banking 152 151 1
Commissions 121 117 3
Interest and dividends 2,655 1,699 56
Other 15 14 7
Total revenues 3,298 2,364 40
Interest expense 2,567 1,645 56
Net revenues 731 719 2
Non-interest expenses:
Compensation and benefits 371 364 2
Brokerage, commissions
and clearance fees 60 66 (9)
Communications 47 51 (8)
Occupancy and equipment 45 43 5
Professional services 42 47 (11)
Business development 28 32 (13)
Depreciation and amortization 27 34 (21)
Other 21 32 (34)
Spin-off expenses 15
Total non-interest expenses 641 684 (6)
Income before taxes 90 35 157
Provision for income taxes 32 15 113
Net income $ 58 $ 20 190
Net income applicable
to common stock $ 48 $ 12 300
Number of shares used in
earnings per 110.2 105.7
common share computation (Note 2)
Earnings per common share $0.43 $ 0.11
</TABLE>
Note 1:Certain amounts have been reclassified to conform to the current
year's presentation.
Note 2: Pursuant to SEC requirements, the number of common shares used in
the 1994 calculation of earnings per share includes shares issued in the
spin-off.
<TABLE>
LEHMAN BROTHERS HOLDINGS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Preliminary and Unaudited)
(In millions, except per share data)
<CAPTION>
Six Months Ended Percentage of
May 31, June 30, Dollar Change
1995 1994 (Note 1) Inc/(Dec)
<S> <C> <C> <C>
Revenues:
Principal transactions $714 $845 (16)%
Investment banking 289 326 (11)
Commissions 226 258 (12)
Interest and dividends 5,156 3,226 60
Other 25 30 (17)
Total revenues 6,410 4,685 37
Interest expense 4,972 3,098 60
Net revenues 1,438 1,587 (9)
Non-interest expenses:
Compensation and benefits 730 814 (10)
Brokerage, commissions
and clearance fees 124 140 (11)
Communications 94 101 (7)
Occupancy and equipment 90 85 6
Professional services 84 89 (6)
Business development 57 63 (10)
Depreciation and amortization 54 65 (17)
Other 45 59 (24)
Spin-off expenses 15
Severance charge 33
Total non-interest
expenses 1,278 1,464 (13)
Income before taxes and
cumulative effect of
change in accounting
principle 160 123 30
Provision for income taxes 57 48 19
Income before cumulative effect
change in accounting principle 103 75 37
Cumulative effect of change in
accounting principle (13)
Net income $ 103 $ 62 66
Net income applicable
to common stock $ 82 $ 42 95
Number of shares used in
earnings per 110.2 105.7
common share computation (Note 2)
Earnings per common share:
Income before cumulative effect
of change in accounting
principle $0.74 $0.52
Cumulative effect of change in
accounting principle (0.12)
Net income $0.74 $ 0.40
</TABLE>
Note 1:Certain amounts have been reclassified to conform to the current
year's presentation.
Note 2:Pursuant to SEC requirements, the number of common shares used in
the 1994 calculation of earnings per share includes shares issued in the
spin-off.
