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): September 9, 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
Third Quarter 1995
On September 20, 1995, Lehman Brothers Holdings Inc. (the
"Registrant") issued a press release with respect to its third quarter
1995 earnings (the "Earnings Release").
Copy of the Earnings Release follows.
Sale of Omnitel Interest
On September 9, 1995, the Registrant issued a press release with
respect to its sale of its interest in Omnitel Sistemi Radiocellullari
Italiani S.p.A. A copy of the press release is attached hereto.
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are filed as part of this Report.
99.1 Press Release Relating to Third
Quarter 1995 Earnings
99.2 Selected Statistical Information
99.3 Consolidated Statement of Operations
(Nine Months Ended August 31, 1995)
(Preliminary and Unaudited)
99.4 Press Release Relating to the Sale of the
Registrant's interest in Omnitel
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: September 21, 1995
EXHIBIT INDEX
Exhibit No. Exhibit
Exhibit 99.1 Press Release Relating to Third
Quarter 1995 Earnings
Exhibit 99.2 Selected Statistical Information
Exhibit 99.3 Consolidated Statement of
Operations (Nine Months Ended August 31,
1995) (Preliminary and Unaudited)
Exhibit 99.4 Press Release relating to
sale of the Registrant's interest in
Omnitel
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
THIRD QUARTER EARNINGS
NEW YORK, September 20, 1995 _ Lehman Brothers Holdings Inc.
(NYSE: LEH) today reported net income of $71 million, which, net
of preferred dividends, resulted in earnings of $0.52 per share
of common stock for the third quarter ended August 31, 1995. Net
income increased by 22 percent over the $58 million reported for
the second quarter of 1995 and 223 percent over the $22 million
of net income reported for the third quarter of 1994.
Richard S. Fuld Jr., Chairman and Chief Executive Officer, said:
"As we saw in the prior quarter, the combined effect of revenue
growth and continued cost reduction resulted in further
improvement in our operating margins, leading to the higher
earnings we are reporting today. The Firm's pre-tax margin was
14.5 percent, a full ten percentage points higher than last
year's third quarter results."
Net revenues (total revenues less interest expense) for the third
quarter were $750 million compared to $731 million for the second
quarter of 1995 and $719 million for the third quarter of 1994.
The increase in revenues reflects continued strengthening in
customer flow and origination activity, particularly equities, as
the market environment improved throughout the quarter.
Operating expenses of $641 million were unchanged from the second
quarter of 1995, despite the increase in revenues, and are down
from $686 million reported in the third quarter of 1994.
Compensation and benefits expense totaled $380 million, or 50.7
percent of net revenues. At the end of the third quarter, the
Firm's headcount was 8,069 compared to 8,195 at the end of the
second quarter of 1995. Non-personnel expenses of $261 million
decreased by $37 million on an annualized basis from the second
quarter of 1995 and $151 million versus the benchmark established
in the third quarter of 1994.
Mr. Fuld added: "Expenses continued their downward trend during
the quarter. Compensation expenses as a percentage of revenues
were held flat to the prior quarter, despite an aggressive
recruiting program for certain businesses, notably investment
banking and high-net-worth brokerage. At the same time, non-
personnel expenses have come down significantly for the fifth
consecutive quarter."
As of August 31, 1995, Lehman Brothers' stockholders' equity was
$3,631 million and total capital (stockholders' equity and long-
term debt) was $16,528 million. Book value per common share was
$25.23.
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
8/31/95 5/31/95 2/28/95 11/30/94 8/31/94
<S> <C> <C> <C> <C> <C>
Income Statement
Net Revenues $750 $ 731 $ 707 $ 708 $ 719
Non-Interest Expenses:
Compensation and
Benefits 380 371 360 356 388
Nonpersonnel Expenses 261 270 277 287 298
Net Income 71 58 45 46 22
Financial Ratios (%)
Return on Common Equity
(annualized) 8.5 7.0 5.1 5.2 1.6
Pretax Operating
Margin 14.5 12.3 9.9 9.1 4.6
Compensation &
Benefits/
Net Revenues 50.7 50.7 50.9 50.3 53.9
Effective Tax Rate 35.0 35.5 35.8 29.2 35.1
Balance Sheet
Total Assets 117,000 123,421 127,304 109,947 121,246
Total Assets Excluding
Matched Book (a) 80,000 83,115 85,257 72,457 76,677
Common Stockholders'
Equity 2,923 2,767 2,718 2,687 2,652
Total Stockholders'
Equity 3,631 3,475 3,426 3,395 3,360
Total Capital (long-
term debt plus
stockholders'
Equity) 16,528 16,257 14,603 14,716 14,187
Book Value per Common
Share (b) 25.23 25.16 24.69 24.35 23.97
Other Data (#s)
Common Stock
Outstanding 104,558,121 104,524,685 104,494,667 104,537,690 105,528,914
Employees 8,069 8,195 8,428 8,512 8,926
(a) Matched book is defined as securities purchased under agreements to resell.
(b) This calculation includes restricted stock units granted under the
Lehman Stock Award Programs.
EXHIBIT 99.3
</TABLE>
<TABLE>
LEHMAN BROTHERS HOLDINGS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Preliminary and Unaudited)
(In millions, except per share data)
<CAPTION>
Three Months Ended Percentage of
August 31, August 31, Dollar Change
1995 1994 (Note 1) Inc/(Dec)
<S> <C> <C> <C>
Revenues:
Principal transactions $245 $335 (27)%
Investment banking 251 172 46
Commissions 116 113 3
Interest and dividends 2,830 1,901 49
Other 11 16 (31)
Total revenues 3,453 2,537 36
Interest expense 2,703 1,818 49
Net revenues 750 719 4
Non-interest expenses:
Compensation and benefits 380 388 (2)
Brokerage, commissions and
clearance fees 59 58 2
Communications 43 51 (16)
Occupancy and equipment 44 45 (2)
Professional services 39 49 (20)
Business development 27 33 (18)
Depreciation and amortization 26 33 (21)
Other 23 29 (21)
Total non-interest expenses 641 686 (7)
Income before taxes 109 33 #
Provision for income taxes 38 11 #
Net income $ 71 $ 22 #
Net income applicable to
common stock $ 60 $ 11 #
Number of shares used in
earnings per 116.2 109.1
common share computation (Note 2)
Earnings per common share $0.52 $ 0.10
</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.
# Denotes variance of more than 100%.
<TABLE>
LEHMAN BROTHERS HOLDINGS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Preliminary and Unaudited)
(In millions, except per share data)
<CAPTION>
Nine Months Eight Months
Ended Ended
August 31, August 31,
1995 1994 (Note 1)
<S> <C> <C>
Revenues:
Principal transactions $959 $1,054
Investment banking 540 421
Commissions 342 333
Interest and dividends 7,986 4,547
Other 36 40
Total revenues 9,863 6,395
Interest expense 7,675 4,365
Net revenues 2,188 2,030
Non-interest expenses:
Compensation and benefits 1,111 1,057
Brokerage, commissions and clearance fees 183 179
Communications 137 136
Occupancy and equipment 134 114
Professional services 123 121
Business development 84 85
Depreciation and amortization 80 86
Other 67 76
Spin-off expenses 15
Severance charge 33
Total non-interest expenses 1,919 1,902
Income before taxes and cumulative
effect of change in accounting principle 269 128
Provision for income taxes 95 48
Income before cumulative effect of
change in accounting principle 174 80
Cumulative effect of change in
accounting principle (13)
Net income $ 174 $ 67
Net income applicable to common stock $ 142 $ 40
Number of shares used in earnings per 112.2 107.0
common share computation (Note 2)
Earnings per common share:
Income before cumulative effect
of change in accounting principle $1.27 $0.49
Cumulative effect of change in
accounting principle (0.12)
Net income $1.27 $ 0.37
</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.
EXHIBIT 99.4
For Immediate Release CONTACT: Steven Faigen
(212) 526-4379
LEHMAN BROTHERS SELLS ITS INTEREST IN OMNITEL TO OLIVETTI
NEW YORK, September 9, 1995 _ Lehman Brothers Holdings Inc. today
announced that it has reached an agreement to sell its eight percent
interest in Omnitel Sistemi Radiocellullari Italiani S.p.A. ("Omnitel")
to Olivetti S.p.A. ("Olivetti") as part of Olivetti's plan of
recapitalization announced today. This agreement is subject to the
completion of the plan of recapitalization.
Omnitel is the consortium that has been awarded by the Italian
government the license to operate a second national cellular telephone
network in Italy.
It is currently estimated that Lehman Brothers will report in the fourth
quarter of 1995 a net gain of approximately $50 million in connection
with the sale of its interest in Omnitel, after adjusting for related
expenses that include the cost of the Firm's original investment in
Omnitel and subsequent capital calls, as well as transaction,
compensation and tax expenses.
Lehman Brothers is a global investment bank with leadership positions in
corporate and municipal finance and advisory services and in securities
sales, trading and research. Lehman Brothers serves the financial needs
of corporate, governmental and institutional clients, and high-net-worth
individuals through offices in major financial centers worldwide.
