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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): March 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
First Quarter 1995
On March 22, 1995, Lehman Brothers Holdings Inc. (the "Registrant")
issued a press release with respect to its first quarter 1995 earnings (the
"Earnings Release").
Copies of the Earnings Release follow.
Debt Ratings
On March 21, 1995, Moody's Investor Service lowered the ratings on the
Registrant's long-term senior debt from A-3 to Baa-1. Moody's confirmed
the Registrants' P-2 rating for its commercial paper.
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are filed as part of this Report.
99.1 Press Release Relating to First
Quarter 1995 Earnings
99.2 Selected Statistical Information
(Preliminary and Unaudited)
99.3 Consolidated Statement of Operations
(Three Months Ended February 28, 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: March 24, 1995
EXHIBIT INDEX
Exhibit No. Exhibit
Exhibit 99.1 Press Release Relating to
First Quarter
1995 Earnings
Exhibit 99.2 Selected Statistical
Information
(Preliminary and Unaudited)
Exhibit 99.3 Consolidated Statement of
Operations (Three Months Ended February 28,
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
FIRST QUARTER EARNINGS
NEW YORK, March 22, 1995 _ Lehman Brothers Holdings Inc.
(NYSE: LEH) today reported net income of $45 million or
$0.31 per share of common stock for the first quarter ended
February 28, 1995.
By comparison, the Firm reported net income of $46 million
for the fourth quarter of 1994 and $42 million for the first
quarter of 1994 (or $73 million before an $18 million
aftertax severance charge and a $13 million aftertax charge
relating to a change in accounting principle).
Richard S. Fuld, Jr., Chairman and Chief Executive Officer,
said: "Despite the difficult environment, revenues have not
varied significantly in any of the last four quarters, while
costs have declined. As a result, pre-tax margins have
improved for the second quarter in a row. By continuing to
focus on cost reduction, enhancing the competitive position
of our core businesses and investing to attain critical mass
in newer businesses that best leverage existing strengths,
we are well positioned to benefit from a market turnaround."
Net revenues for the first quarter (total revenues less
interest expense) were $707 million versus $708 million in
the fourth quarter of 1994 and $868 million in the first
quarter of 1994. Principal transaction revenues increased 23
percent versus the fourth quarter of 1994, although these
revenues remained below the levels achieved in the first
quarter of 1994. Investment banking revenues declined as a
result of low levels of fixed income and equity origination,
which have persisted since the second quarter of 1994.
Non-interest expenses were $637 million versus $643 million
for the fourth quarter of last year and $780 million from
last year's first quarter. Compensation and benefits expense
was $360 million in the first quarter of 1995. This expense
was essentially flat versus the fourth quarter of 1994.
Compared to the first quarter of 1994, compensation and
benefits expense decreased by 20 percent. Nonpersonnel
expenses of $277 million decreased by $40 million on an
annualized basis from the fourth quarter of 1994 and $80
million versus the first quarter of 1994, excluding the
severance charge. At the end of the first quarter, the
Firm's headcount was 8,428 versus 8,512 at the end of the
fourth quarter of 1994 and down from a peak of 9,400
employees reached during January of 1994.
Mr. Fuld added: "Cost reduction remains a priority as the
Firm continues to take the steps needed to meet the $300
million annualized savings target set late last year.
Headcount continued to decline and nonpersonnel expenses
continued their downward trend after reaching a peak in the
second quarter of 1994. Using the third quarter of 1994 as a
benchmark, total expenses have fallen by approximately $182
million on an annualized basis."
As of February 28, 1995, Lehman Brothers' stockholders'
equity was $3,426 million and total capital (stockholders'
equity and long-term debt) was $14,603 million. Book value
per common share was $24.69.
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
LEHMAN BROTHERS HOLDINGS INC.
SELECTED STATISTICAL INFORMATION
(Preliminary and Unaudited)
(Dollars in millions, except per share data)
<TABLE>
Eleven
Quarters Ended months
ended
2/28/95 11/30/94 8/31/94 6/30/94 3/31/94 November
30,
1994 (a)
<S> <C> <C> <C> <C> <S>
Income Statement
Net Revenues $ 707 $ 708 $ 719 $ 719 $868 $2,738
Non-Interest
Expenses:
Compensation and
Benefits 360 356 388 364 450 1,413
Non-Personnel
Expenses 277 287 298 305 297 1,084
After-Tax Income
from Operations
(excluding special
charges) 45 46 22 32 73 156
Special Charges
(aftertax):
Spin-Off Expenses (12) (12)
Severance Charge (18) (18)
Accounting Change (13) (13)
Net Income 45 46 22 20 42 113
Financial Ratios (%)
Return on Common
Equity (annualized) 5.1 5.2 1.6 2.8 N/A 4.0
Pre-Tax Operating
Margin (excluding)
special charges) 9.9 9.1 4.6 6.8 14.0 8.8
Compensation &
Benefits/
Net Revenues (b) 50.9 50.3 53.9 50.7 51.8 51.6
Effective Tax Rate 35.8 29.2 35.1 34.6 38.0 33.7
Balance Sheet
Total Assets $127,000 $109,947 $121,246 $118,511 $112,277
Total Assets
Excluding
Matched Book (c) 85,000 72,457 76,677 74,375 71,147
Common Stockholders'
Equity 2,718 2,687 2,652 2,602 1,275
Total Stockholders'
Equity 3,426 3,395 3,360 3,310 2,033
Total Capital (long-
term debt plus stockholders
equity) 14,603 14,716 14,187 13,877 12,608
Book Value per
Common Share (d) 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
Employees 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. Thus the four quarters of 1994 are
not additive.
(b) For the period ended March 31, 1994, compensation expense excludes the
severance charge of $33 million.
(c) Matched book is defined as securities purchased under agreements to
resell.
(d) Beginning August 31, 1994 this calculation includes restricted stock
units granted under the 1994 Lehman Stock Award Program.
Exhibit 99.3
LEHMAN BROTHERS HOLDINGS INC.
CONSOLIDATED STATEMENT OF
OPERATIONS
(Preliminary and Unaudited)
(In millions, except per share
data)
<TABLE>
Three Months Three Months Percentage of
Ended Ended Dollar
February 28, March 31, Change
1995 1994 (Note 1) Inc/(Dec)
Lehman
Businesses
<S> <C> <C> <C>
Revenues:
Principal transactions $ 359 $ 462 (22)%
Investment banking 137 175 (22)
Commissions 105 141 (26)
Interest and dividends 2,501 1,527 64
Other 10 16 (38)
Total revenues 3,112 2,321 34
Interest expense 2,405 1,453 66
Net revenues 707 868 (19)
Non-interest expenses:
Compensation and benefits 360 450 (20)
Brokerage, commissions and
clearance fees 64 74 (14)
Communications 47 50 (6)
Professional services 42 42
Occupancy and equipment 45 42 7
Business development 29 31 (6)
Depreciation and amortization 27 31 (13)
Other 23 27 (15)
Severance charge 33
Total non-interest expenses 637 780 (18)
Income before taxes and
cumulative
effect of change in
accounting principle 70 88 (20)
Provision for income taxes 25 33 (24)
Income before cummulative
effect of
change in accounting
principle 45 55 (18)
Cumulative effect of
change in accounting principle (13)
Net income $ 45 $ 42 7
Net income applicable to
common stock $ 34 $ 30 13
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 $0.31 $0.41
Cumulative effect of
change in accounting principle (0.12)
Net income $0.31 $0.29
</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.
