<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE COMMISSION
For the fiscal year ended December 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______.
Commission file number 1-7657
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
LEHMAN BROTHERS HOLDINGS INC.
TAX DEFERRED SAVINGS PLAN
Lehman Brothers Holdings Inc.
3 World Financial Center
New York, NY 10285
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Lehman Brothers Holdings Inc.
3 World Financial Center
New York, NY 10285
<PAGE> 2
Financial Statements
and Supplemental Information
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
For the years ended December 30, 1996 and 1995
with Report of Independent Auditors
<PAGE> 3
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Financial Statements
and Supplemental Information
For the years ended December 30, 1996 and 1995
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors........................................................ 1
Financial Statements
Statements of Net Assets Available for Plan Benefits, With Fund Information.......... 2
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information................................................................. 4
Notes to Financial Statements......................................................... 6
Supplemental Information
Schedule I Schedule of Investments Held........................................... 14
Schedule II Schedule of Series of Transactions in Excess of Five Percent of
Net Assets Available for Plan Benefits at Beginning of Year..... 15
</TABLE>
A schedule of single transactions in excess of five percent of net assets
available for plan benefits at beginning of year has not been presented because
there were no single transactions in excess of five percent of net assets during
the fiscal year 1996, which require disclosure under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and for which there are no
statutory or administrative exemptions.
A schedule of party-in-interest transactions has not been presented because
there were no party-in-interest transactions which are prohibited by Section 406
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
for which there are no statutory or administrative exemptions.
<PAGE> 4
Report of Independent Auditors
The Employee Benefit Plans Committee
Lehman Brothers Holdings Inc.
We have audited the accompanying statements of net assets available for plan
benefits of the Lehman Brothers Holdings Inc. Tax Deferred Savings Plan as of
December 30, 1996 and 1995, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial statements
are the responsibility of the Plan's administrator. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Lehman
Brothers Holdings Inc. Tax Deferred Savings Plan at December 30, 1996 and 1995,
and the changes in its net assets available for plan benefits for the years then
ended, in conformity with general accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of investments held as of December 30, 1996, and single and series of
transactions in excess of five percent of net assets available for plan benefits
for the year ended December 30, 1996, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The Fund Information in
the statement of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Ernst & Young LLP
June 1, 1997
<PAGE> 5
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Net Assets Available for Plan Benefits, With Fund Information
December 30, 1996
Investment Funds
<TABLE>
<CAPTION>
-----------------------------------------------------------------
American Lehman
Short Express Brothers
Term Fixed Company Holdings Inc.
Interest Income Common Common
Assets Fund Fund Stock Fund Stock Fund
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Contracts(at cost plus interest) $126,138,571
Investments at fair value:
American Express Company common stock
523,614 shares (cost: $12,033,409) $30,042,353
Lehman Brothers Holdings Inc. common stock
624,363 shares (cost: $11,363,000) $19,589,389
Twentieth Century Ultra Investors Fund
1,829,588 shares (cost: $41,439,988)
Prime Value Obligations Fund
16,757,626 shares (cost: $16,757,626)
Templeton Foreign Fund
3,175,898 shares (cost: $29,764,390)
Income Fund of America
1,134,086 shares (cost: $16,197,319)
Fidelity Capital & Income Fund
1,866,652 shares (cost: $17,459,339)
Vanguard Index Trust 500 Portfolio
431,688 shares (cost: $23,244,493)
PIMCO Total Return Fund
941,665 shares (cost: $9,570,046)
Vanguard Fixed Income Long-Term Corporate Portfolio
929,657 shares (cost: $7,958,488)
-----------------------------------------------------------------
- 126,138,571 30,042,353 19,589,389
Cash and short-term investments $263,792 598,115 472 43,781
Interest and dividends receivable 1,658 750,574 93 -
Other receivables 11,173 5,039 43,932 1,818,875
Net Inter-fund transfers (payable) receivable 47,878 (266,836) (411,102) (407,841)
-----------------------------------------------------------------
Total assets 324,501 127,225,463 29,675,748 21,044,204
Liabilities
Accrued liabilities - 40,422 8,490 5,199
Other liabilities - - - -
-----------------------------------------------------------------
Total liabilities - 40,422 8,490 5,199
-----------------------------------------------------------------
Net assets available for plan benefits $324,501 $127,185,041 $29,667,258 $21,039,005
=================================================================
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------
Twentieth
Century
Ultra Prime Value Templeton Income
Investors Obligations Foreign Fund of
Assets Fund Fund Fund America
------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Contracts(at cost plus interest)
Investments at fair value:
American Express Company common stock
523,614 shares (cost: $12,033,409)
Lehman Brothers Holdings Inc. common stock
624,363 shares (cost: $11,363,000)
Twentieth Century Ultra Investors Fund
1,829,588 shares (cost: $41,439,988) $52,015,185
Prime Value Obligations Fund
16,757,626 shares (cost: $16,757,626) $16,757,626
Templeton Foreign Fund
3,175,898 shares (cost: $29,764,390) $32,711,752
Income Fund of America
1,134,086 shares (cost: $16,197,319) $18,882,528
Fidelity Capital & Income Fund
1,866,652 shares (cost: $17,459,339)
Vanguard Index Trust 500 Portfolio
431,688 shares (cost: $23,244,493)
PIMCO Total Return Fund
941,665 shares (cost: $9,570,046)
Vanguard Fixed Income Long-Term Corporate Portfolio
929,657 shares (cost: $7,958,488)
------------------------------------------------------------
52,015,185 16,757,626 32,711,752 18,882,528
Cash and short-term investments 101,091 27 57,707 21,006
Interest and dividends receivable - - - -
Other receivables 10,297 1,584 400 1,544
Net Inter-fund transfers (payable) receivable 143,106 635,063 (95,782) (153,304)
------------------------------------------------------------
Total assets 52,269,679 17,394,300 32,674,077 18,751,774
Liabilities
Accrued liabilities 15,789 5,478 9,704 5,610
Other liabilities 101,091 108,309 57,707 21,006
------------------------------------------------------------
Total liabilities 116,880 113,787 67,411 26,616
------------------------------------------------------------
Net assets available for plan benefits $52,152,799 $17,280,513 $32,606,666 $18,725,158
============================================================
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------
Vanguard
Vanguard PIMCO Fixed Income
Fidelity Index Trust Total Long Term
Capital & 500 Return Corporate
Assets Income Fund Portfolio Fund Portfolio Total
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional Contracts(at cost plus interest) $126,138,571
Investments at fair value:
American Express Company common stock
523,614 shares (cost: $12,033,409) 30,042,353
Lehman Brothers Holdings Inc. common stock
624,363 shares (cost: $11,363,000) 19,589,389
Twentieth Century Ultra Investors Fund
1,829,588 shares (cost: $41,439,988) 52,015,185
Prime Value Obligations Fund
16,757,626 shares (cost: $16,757,626) 16,757,626
Templeton Foreign Fund
3,175,898 shares (cost: $29,764,390) 32,711,752
Income Fund of America
1,134,086 shares (cost: $16,197,319) 18,882,528
Fidelity Capital & Income Fund
1,866,652 shares (cost: $17,459,339) $17,434,530 17,434,530
Vanguard Index Trust 500 Portfolio
431,688 shares (cost: $23,244,493) $30,377,873 30,377,873
PIMCO Total Return Fund
941,665 shares (cost: $9,570,046) $ 9,953,400 9,953,400
Vanguard Fixed Income Long-Term Corporate Portfolio
929,657 shares (cost: $7,958,488) $8,320,428 8,320,428
--------------------------------------------------------------------
17,434,530 30,377,873 9,953,400 8,320,428 362,223,635
Cash and short-term investments 31,523 79,873 9,999 14,708 1,222,094
Interest and dividends receivable - - - - 752,325
Other receivables - 7,441 - 975 1,901,260
Net Inter-fund transfers (payable) receivable 5,800 449,454 39,015 14,549 -
--------------------------------------------------------------------
Total assets 17,471,853 30,914,641 10,002,414 8,350,660 366,099,314
Liabilities
Accrued liabilities 5,246 7,610 3,028 2,687 109,263
Other liabilities 33,782 79,873 10,908 14,708 427,384
--------------------------------------------------------------------
Total liabilities 39,028 87,483 13,936 17,395 536,647
--------------------------------------------------------------------
Net assets available for plan benefits $17,432,825 $30,827,158 $ 9,988,478 $8,333,265 $365,562,667
====================================================================
</TABLE>
See accompanying notes
<PAGE> 6
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Net Assets Available for Plan Benefits, With Fund Information
December 30, 1995
Investment Funds
<TABLE>
<CAPTION>
--------------------------------------------------------------------
American Lehman Twentieth
Short Express Brothers Century
Term Fixed Company Holdings Inc. Ultra
Interest Income Common Common Investors
Assets Fund Fund Stock Fund Stock Fund Fund
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional Contracts(at cost plus interest) $132,302,233
Investments at fair value:
American Express Company common stock
629,545 shares (cost: $14,453,710) $26,047,424
Lehman Brothers Holdings Inc. common stock
583,133 shares (cost: $9,999,553) $12,391,576
Twentieth Century Ultra Investors Fund
1,617,105 shares (cost: $34,455,115) $42,222,614
Lehman Brothers Prime Value Money Market Fund
18,862,032 shares (cost: $18,862,032)
Templeton Foreign Fund
2,817,938 shares (cost: $26,120,965)
Income Fund of America
971,763 shares (cost: $13,266,086)
Fidelity Capital & Income Fund
1,648,532 shares (cost: $15,509,153)
Vanguard Index Trust 500 Portfolio
284,211 shares (cost: $13,849,110)
PIMCO Total Return Fund
864,302 shares (cost: $8,733,498)
Vanguard Fixed Income Long-Term Corporate Portfolio
899,925 shares (cost: $7,620,417)
--------------------------------------------------------------------
- 132,302,233 26,047,424 12,391,576 42,222,614
Cash and short-term investments $264,946 1,366 19 1,970,388 79,748
Interest and dividends receivable 1,403 208 5,308 1,024 17
Other receivables 38,741 20,286 43,894 - 817
Net Inter-fund transfers (payable) receivable - (3,487,122) (165,254) 202,581 1,475,836
--------------------------------------------------------------------
Total assets 305,090 128,836,971 25,931,391 14,565,569 43,779,032
Liabilities
Accrued liabilities - 43,599 9,024 3,885 13,627
Other liabilities - - - 686,824 79,016
--------------------------------------------------------------------
Total liabilities - 43,599 9,024 690,709 92,643
--------------------------------------------------------------------
Net assets available for plan benefits $305,090 $128,793,372 $25,922,367 $13,874,860 $43,686,389
====================================================================
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------
Lehman
Brothers
Prime Value Templeton Income Fidelity
Money Foreign Fund of Capital &
Assets Market Fund Fund America Income Fund
---------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Contracts(at cost plus interest)
Investments at fair value:
American Express Company common stock
629,545 shares (cost: $14,453,710)
Lehman Brothers Holdings Inc. common stock
583,133 shares (cost: $9,999,553)
Twentieth Century Ultra Investors Fund
1,617,105 shares (cost: $34,455,115)
Lehman Brothers Prime Value Money Market Fund
18,862,032 shares (cost: $18,862,032) $18,862,032
Templeton Foreign Fund
2,817,938 shares (cost: $26,120,965) $25,868,671
Income Fund of America
971,763 shares (cost: $13,266,086) $15,421,879
Fidelity Capital & Income Fund
1,648,532 shares (cost: $15,509,153) $15,100,549
Vanguard Index Trust 500 Portfolio
284,211 shares (cost: $13,849,110)
PIMCO Total Return Fund
864,302 shares (cost: $8,733,498)
Vanguard Fixed Income Long-Term Corporate Portfolio
899,925 shares (cost: $7,620,417)
---------------------------------------------------------
18,862,032 25,868,671 15,421,879 15,100,549
Cash and short-term investments 18,680 45,917 18,226 39,346
Interest and dividends receivable - 1 17 9
Other receivables 802 326 1,825 -
Net Inter-fund transfers (payable) receivable (158,132) 256,638 669,924 36,368
---------------------------------------------------------
Total assets 18,723,382 26,171,553 16,111,871 15,176,272
Liabilities
Accrued liabilities 6,576 8,373 4,757 4,849
Other liabilities 133,953 47,411 18,161 40,767
---------------------------------------------------------
Total liabilities 140,529 55,784 22,918 45,616
---------------------------------------------------------
Net assets available for plan benefits $18,582,853 $26,115,769 $16,088,953 $15,130,656
=========================================================
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------
Vanguard
Vanguard PIMCO Fixed Income
Index Trust Total Long Term
500 Return Corporate
Assets Portfolio Fund Portfolio Total
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Contracts(at cost plus interest) $132,302,233
Investments at fair value:
American Express Company common stock
629,545 shares (cost: $14,453,710) 26,047,424
Lehman Brothers Holdings Inc. common stock
583,133 shares (cost: $9,999,553) 12,391,576
Twentieth Century Ultra Investors Fund
1,617,105 shares (cost: $34,455,115) 42,222,614
Lehman Brothers Prime Value Money Market Fund
18,862,032 shares (cost: $18,862,032) 18,862,032
Templeton Foreign Fund
2,817,938 shares (cost: $26,120,965) 25,868,671
Income Fund of America
971,763 shares (cost: $13,266,086) 15,421,879
Fidelity Capital & Income Fund
1,648,532 shares (cost: $15,509,153) 15,100,549
Vanguard Index Trust 500 Portfolio
284,211 shares (cost: $13,849,110) $16,370,552 16,370,552
PIMCO Total Return Fund
864,302 shares (cost: $8,733,498) $9,265,317 9,265,317
Vanguard Fixed Income Long-Term Corporate Portfolio
899,925 shares (cost: $7,620,417) $8,531,288 8,531,288
-----------------------------------------------------------
16,370,552 9,265,317 8,531,288 322,384,135
Cash and short-term investments 55,643 723 15,987 2,510,989
Interest and dividends receivable - - - 7,987
Other receivables 6,252 119 1,957 115,019
Net Inter-fund transfers (payable) receivable 1,140,740 (27,797) 56,218 -
-----------------------------------------------------------
Total assets 17,573,187 9,238,362 8,605,450 325,018,130
Liabilities
Accrued liabilities 4,790 2,909 2,647 105,036
Other liabilities 55,524 - 15,696 1,077,352
-----------------------------------------------------------
Total liabilities 60,314 2,909 18,343 1,182,388
-----------------------------------------------------------
Net assets available for plan benefits $17,512,873 $9,235,453 $8,587,107 $323,835,742
===========================================================
</TABLE>
See accompanying notes
<PAGE> 7
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for
Plan Benefits, With Fund Information
For the year ended December 30, 1996
<TABLE>
<CAPTION>
Investment Funds
-------------------------------------------------------------
American Lehman
Short Express Brothers
Term Fixed Company Holdings Inc.
Interest Income Common Common
Fund Fund Stock Fund Stock Fund
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Interest and dividends $ 19,411 $ 9,326,533 $ 536,067 $ 134,879
Net realized and unrealized appreciation/(depreciation) in
fair value of investments -- -- 8,942,664 6,382,929
-------------------------------------------------------------
19,411 9,326,533 9,478,731 6,517,808
Contributions:
Employer -- -- -- 1,829,783
Participants -- 3,982,268 -- 1,332,461
Rollovers -- 134,831 -- 160,079
-------------------------------------------------------------
-- 4,117,099 -- 3,322,323
Net inter-fund transfers (out) in -- (2,057,350) (1,982,537) (850,253)
Administrative fees -- (61,495) (13,103) (8,943)
Participant withdrawals -- (12,724,436) (3,568,012) (1,783,659)
Transfer (to) from other plan -- (208,682) (170,188) (33,131)
-------------------------------------------------------------
-- (15,051,963) (5,733,840) (2,675,986)
-------------------------------------------------------------
Net increase (decrease) 19,411 (1,608,331) 3,744,891 7,164,145
Net assets available for plan benefits, beginning of year 305,090 128,793,372 25,922,367 13,874,860
-------------------------------------------------------------
Net assets available for plan benefits, end of year $324,501 $ 127,185,041 $ 29,667,258 $ 21,039,005
=============================================================
<CAPTION>
Investment Funds
----------------------------------------------------------------
Twentieth
Century
Ultra Prime Value Templeton Income
Investors Obligations Foreign Fund of
Fund Fund Fund America
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Interest and dividends $ 1,011 $ 919,531 $ 856,000 $ 964,379
Net realized and unrealized appreciation/(depreciation) in
fair value of investments 7,163,514 -- 3,972,698 1,718,857
----------------------------------------------------------------
7,164,525 919,531 4,828,698 2,683,236
Contributions:
Employer -- -- -- --
Participants 5,632,595 1,632,992 3,693,459 1,360,245
Rollovers 772,818 336,682 524,518 71,573
----------------------------------------------------------------
6,405,413 1,969,674 4,217,977 1,431,818
Net inter-fund transfers (out) in 339,031 (443,195) 1,068,291 83,558
Administrative fees (26,153) (7,931) (15,740) (9,226)
Participant withdrawals (5,179,526) (3,622,291) (3,477,019) (1,500,889)
Transfer (to) from other plan (236,880) (118,128) (131,310) (52,292)
----------------------------------------------------------------
(5,103,528) (4,191,545) (2,555,778) (1,478,849)
----------------------------------------------------------------
Net increase (decrease) 8,466,410 (1,302,340) 6,490,897 2,636,205
Net assets available for plan benefits, beginning of year 43,686,389 18,582,853 26,115,769 16,088,953
----------------------------------------------------------------
Net assets available for plan benefits, end of year $ 52,152,799 $ 17,280,513 $ 32,606,666 $ 18,725,158
================================================================
<CAPTION>
Investment Funds
--------------------------------------------------------------------------------
Vanguard
Vanguard PIMCO Fixed Income
Fidelity Index Trust Total Long Term
Capital & 500 Return Corporate
Income Fund Portfolio Fund Portfolio Total
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest and dividends $ 1,449,302 $ 509,242 $ 580,338 $ 543,227 $ 15,839,920
Net realized and unrealized appreciation/
(depreciation) in
fair value of investments 355,639 4,987,516 (128,978) (433,708) 32,961,131
--------------------------------------------------------------------------------
1,804,941 5,496,758 451,360 109,519 48,801,051
Contributions:
Employer -- -- -- -- 1,829,783
Participants 2,279,015 3,334,129 876,072 855,438 24,978,674
Rollovers 426,623 948,487 193,738 105,738 3,675,087
--------------------------------------------------------------------------------
2,705,638 4,282,616 1,069,810 961,176 30,483,544
Net inter-fund transfers (out) in (519,343) 5,106,198 (80,036) (664,364) --
Administrative fees (8,356) (13,127) (4,814) (4,295) (173,183)
Participant withdrawals (1,665,853) (1,478,919) (682,915) (652,215) (36,335,734)
Transfer (to) from other plan (14,858) (79,241) (380) (3,663) (1,048,753)
--------------------------------------------------------------------------------
(2,208,410) 3,534,911 (768,145) (1,324,537) (37,557,670)
--------------------------------------------------------------------------------
Net increase (decrease) 2,302,169 13,314,285 753,025 (253,842) 41,726,925
Net assets available for plan benefits,
beginning of year 15,130,656 17,512,873 9,235,453 8,587,107 323,835,702
--------------------------------------------------------------------------------
Net assets available for plan benefits,
end of year $ 17,432,825 $ 30,827,158 $ 9,988,478 $ 8,333,265 $365,562,657
================================================================================
</TABLE>
See accompanying notes
<PAGE> 8
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for
Plan Benefits, With Fund Information
For the year ended December 30, 1995
<TABLE>
<CAPTION>
Investment Funds
------------------------------------------------
American
Short Express
Term Fixed Company
Interest Income Common
Fund Fund Stock Fund
------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Interest and dividends $ 26,828 $ 10,071,950 $ 523,084
Net realized and unrealized appreciation
in fair value of invesments -- -- 8,654,132
------------------------------------------------
26,828 10,071,950 9,177,216
Contributions:
Employer -- -- --
Participants -- 5,033,752 --
Rollovers -- 278,928 --
------------------------------------------------
-- 5,312,680 --
Net inter-fund transfers (out) in -- (5,178,427) (1,885,859)
Administrative fees -- (63,637) (12,970)
Participant withdrawals -- (12,664,640) (4,617,562)
Transfer (to) from other plan -- (19,216) (52,181)
------------------------------------------------
-- (17,925,920) (6,568,572)
------------------------------------------------
Net increase (decrease) 26,828 (2,541,290) 2,608,644
Net assets available for plan benefits,
beginning of year 278,262 131,334,662 23,313,723
------------------------------------------------
Net assets available for plan benefits,
end of year $ 305,090 $ 128,793,372 $ 25,922,367
===============================================
<CAPTION>
Investment Funds
-----------------------------------------------
Lehman Twentieth Lehman
Brothers Century Brothers
Holdings Inc. Ultra Prime Value
Common Investors Money
Stock Fund Fund Market Fund
-----------------------------------------------
<S> <C> <C> <C>
Investment Income:
Interest and dividends $ 111,718 $ 81 $ 1,279,112
Net realized and unrealized appreciation
in fair value of invesments 2,692,213 11,341,951 --
-----------------------------------------------
2,803,931 11,342,032 1,279,112
Contributions:
Employer 1,942,105 -- --
Participants 911,904 4,710,456 2,239,425
Rollovers 346,015 853,738 792,644
-----------------------------------------------
3,200,024 5,564,194 3,032,069
Net inter-fund transfers (out) in 2,381,618 3,467,897 (4,457,741)
Administrative fees (7,353) (20,892) (7,300)
Participant withdrawals (1,175,156) (3,871,504) (5,337,041)
Transfer (to) from other plan (3,895) -- 1,896
-----------------------------------------------
1,195,214 (424,499) (9,800,186)
-----------------------------------------------
Net increase (decrease) 7,199,169 16,481,727 (5,489,005)
Net assets available for plan benefits,
beginning of year 6,675,691 27,204,662 24,071,858
-----------------------------------------------
Net assets available for plan benefits,
end of year $ 13,874,860 $ 43,686,389 $ 18,582,853
==============================================
<CAPTION>
Investment Funds
-----------------------------------------------
Templeton Income Fidelity
Foreign Fund of Capital &
Fund America Income Fund
-----------------------------------------------
<S> <C> <C> <C>
Investment Income:
Interest and dividends $ 679,973 $ 760,033 $ 1,258,820
Net realized and unrealized appreciation
in fair value of invesments 2,032,974 2,663,597 690,665
-----------------------------------------------
2,712,947 3,423,630 1,949,485
Contributions:
Employer -- -- --
Participants 3,855,195 1,323,131 2,102,150
Rollovers 340,238 103,436 1,385,821
-----------------------------------------------
4,195,433 1,426,567 3,487,971
Net inter-fund transfers (out) in 335,733 1,123,167 538,318
Administrative fees (12,940) (7,393) (7,449)
Participant withdrawals (2,961,087) (1,137,603) (1,608,695)
Transfer (to) from other plan (2,340) (2,080) (1,387)
-----------------------------------------------
(2,640,634) (23,909) (1,079,213)
-----------------------------------------------
Net increase (decrease) 4,267,746 4,826,288 4,358,243
Net assets available for plan benefits,
beginning of year 21,848,023 11,262,665 10,772,413
-----------------------------------------------
Net assets available for plan benefits,
end of year $ 26,115,769 $ 16,088,953 $ 15,130,656
==============================================
<CAPTION>
Investment Funds
------------------------------
Vanguard PIMCO
Index Trust Total
500 Return
Portfolio Fund
------------------------------
<S> <C> <C>
Investment Income:
Interest and dividends $ 264,339 $ 570,046
Net realized and unrealized appreciation
in fair value of invesments 3,543,643 923,361
------------------------------
3,807,982 1,493,407
Contributions:
Employer -- --
Participants 1,944,526 979,827
Rollovers 1,135,472 242,340
------------------------------
3,079,998 1,222,167
Net inter-fund transfers (out) in 3,290,669 196,222
Administrative fees (7,572) (4,534)
Participant withdrawals (1,152,683) (533,950)
Transfer (to) from other plan -- --
------------------------------
2,130,414 (342,262)
------------------------------
Net increase (decrease) 9,018,394 2,373,312
Net assets available for plan benefits,
beginning of year 8,494,479 6,862,141
------------------------------
Net assets available for plan benefits,
end of year $ 17,512,873 $ 9,235,453
==============================
<CAPTION>
Investment Funds
---------------------------------
Vanguard
Fixed Income
Long Term
Corporate
Portfolio Total
---------------------------------
<S> <C> <C>
Investment Income:
Interest and dividends $ 580,903 $ 16,126,887
Net realized and unrealized appreciation
in fair value of invesments 1,231,803 33,774,339
---------------------------------
1,812,706 49,901,226
Contributions:
Employer -- 1,942,105
Participants 823,661 23,924,027
Rollovers 110,257 5,588,889
---------------------------------
933,918 31,455,021
Net inter-fund transfers (out) in 188,403 --
Administrative fees (4,060) (156,100)
Participant withdrawals (785,212) (35,845,133)
Transfer (to) from other plan -- (79,203)
---------------------------------
(600,869) (36,080,436)
---------------------------------
Net increase (decrease) 2,145,755 45,275,811
Net assets available for plan benefits,
beginning of year 6,441,352 278,559,931
---------------------------------
Net assets available for plan benefits,
end of year $ 8,587,107 $ 323,835,742
=================================
</TABLE>
See accompanying notes
<PAGE> 9
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements
December 30, 1996 and 1995
1. DESCRIPTION OF THE PLAN
GENERAL
The Lehman Brothers Holdings Inc. Tax Deferred Savings Plan (the "Plan") is a
defined contribution plan. The Plan became effective January 1, 1984, was
amended and restated effective January 1, 1989 and was subsequently amended
through April 1, 1996. Under the terms of the Plan, qualified employees of
Lehman Brothers Holdings Inc. ("Lehman") and its participating subsidiaries
(collectively, the "Company") are eligible to become Plan participants as soon
as administratively possible upon employment. Prior to July 1, 1995, there was a
12 month service requirement for plan participants.
The Plan is subject to the provisions of ERISA. A complete description of the
Plan is contained in the Plan document available to all participants from the
Plan Administrator.
CONTRIBUTIONS
Upon enrollment, a participant may elect to contribute, on a pre-tax basis,
between one and fifteen percent of the participants annual compensation, as
defined in the Plan document. The Company may make a contribution, in Company
stock or cash, on behalf of eligible participants who have completed 12 months
of service and are employees on the last day of the Plan year. The amount of the
contribution, if any, will be determined by the Company's Board of Directors. If
a Company contribution is made it will be allocated as follows:
1. Participants whose compensation is below $37,800 per year who have not
earned commission income greater than $1,000 and are not Investment
Representatives, Investment Representative Trainees, Branch Managers, or
Institutional Salespeople will receive a Company contribution of $400 plus
a matching contribution of 100 percent of the first $600 of the employee's
Before-Tax contributions.
2. Participants whose compensation is between $37,800 and $100,000 per
year will receive a matching contribution of up to 100 percent of the
first $1,000 of the employee's Before-Tax contributions. Company
contributions to participants whose compensation is between $37,800 and
$100,000 per year will be made only if there are funds remaining after
contributions are made for participants making less than $37,800 per year.
3. Company contributions will not be made for participants whose
compensation exceeds $100,000 per year.
6
<PAGE> 10
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
1. DESCRIPTION OF THE PLAN-CONTINUED
In 1996 and 1995, Company contributions were made in cash. Boston Safe Deposit &
Trust Company ("Boston Safe"), the Plan's custodian, used cash to purchase the
Company's common stock.
A participant's Before-Tax Contributions will not be subject to tax until
distribution. The Code provides that Before-Tax Contributions (and any elective
deferrals to other plans containing a cash or deferred arrangement) will be
included in a participant's gross income to the extent such contributions exceed
the statutory limitation, which is indexed for inflation. In 1996 and 1995, the
maximum limitation amount was $9,500 and $9,240, respectively. For 1997, the
maximum limitation amount is $9,500. The Company's contributions on behalf of a
participant, as well as the income and appreciation on amounts invested in the
investment funds offered under the Plan, are not includable in the participant's
taxable income until distributed.
Rollover contributions arise from contributions to the Plan of certain assets
previously held on behalf of participants by other qualified plans.
VALUATION OF PARTICIPANT ACCOUNTS
Separate accounts are maintained for each participant whereby the participant's
account is credited for contributions and investment income and credited or
charged, as appropriate, for investment appreciation or depreciation.
Participant accounts are charged for withdrawals. The periodic allocation of
investment income and investment appreciation or depreciation is based upon the
participant's beneficial interest in each of the investment funds at the
valuation date.
INVESTMENTS
Effective April 1, 1994, a participant's contributions can be invested in any of
the funds listed below. Investments of contributions among the investment funds
can be made in increments of 10%, with a maximum of 50% of contributions
permitted to be invested in the Lehman Brothers Holdings Inc. Common Stock Fund.
Participants can elect to change their contribution rate and investment
direction of new contributions on a monthly basis. Participants may also elect
to transfer existing fund balances among the investment funds on a monthly
basis.
7
<PAGE> 11
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
1. DESCRIPTION OF THE PLAN-CONTINUED
The following is a general description of each investment fund in which the Plan
invested since January 1995, as directed by participants:
Fixed Income Fund: This fund invests its assets with one or more insurance
companies or financial institutions (collectively, "institutions") which
issue contracts ("contracts") providing for the repayment of principal with
a specified annual rate of interest for a specified period. The fund is
currently invested in contracts negotiated with the following institutions:
<TABLE>
<CAPTION>
Carrying Value at
Maturity Interest December 30,
Date Rate(%) 1996 1995
--------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Metropolitan Life Insurance Co.
Contract #24565 12/15/01 7.30 $ 9,946,912 $ --
Contract #12865 03/31/97 8.10 5,401,713 10,058,107
Contract #13955 06/15/99 8.25 17,035,023 15,839,622
Contract #11649 06/30/96 9.62 -- 7,668,194
Allstate Life Insurance Company
Contract #GICGA5584 12/15/00 7.30 17,365,463 16,278,034
Contract #GICGA5806 07/05/00 6.81 8,792,551 9,085,550
John Hancock Mutual Life Insurance Co.
Contract #5565 09/30/97 9.60 5,488,257 11,156,679
Contract #5724 01/08/96 9.51 -- 5,330,455
Prudential Asset Management Group
Contract #7430-211 12/15/99 6.52 9,086,741 8,574,596
Contract #7430-212 12/15/99 7.30 -- 12,544,475
American International Life
Assurance Company of New York
Contract #18180T 10/01/98 5.45 13,332,607 12,698,805
People's Security Insurance Co.
Contract #BDA00473FR 08/15/01 8.20 11,655,780 10,842,259
Contract #BDA00568FR 12/15/01* 6.85 10,425,516 1,067,481
Aetna Life Insurance Co.
Contract #014005 12/30/97 8.80 4,597,936 6,401,281
The Principal Financial Group
Contract #4-08804-01 12/15/00 6.15 5,024,934 4,756,695
Contract #4-08804-02 12/15/02 6.40 7,985,138 --
------------ ------------
$126,138,571 $132,302,233
============ ============
</TABLE>
* This contract is cancelable by the issuer on 06/30/97
8
<PAGE> 12
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements
December 30, 1996 and 1995
1. DESCRIPTION OF THE PLAN-CONTINUED
The present value of the contracts approximates their fair value as of
December 30, 1996 and December 30, 1995. Present value was estimated using
an analysis based on the Plan's current investment rate for a similar
contract.
American Express Company Common Stock Fund: This fund invests solely in
the common stock of American Express. As of May 31, 1994, this fund has
been closed to any new contributions, dividend reinvestments, or transfers
in from other funds.
Lehman Brothers Holdings Inc. Common Stock Fund: This fund invests solely
in the common stock of the Company.
Twentieth Century Ultra Investors Fund: The primary objective of this fund
is to provide a high level of capital appreciation by investing primarily
in medium and small-sized companies with above average growth potential.
Prime Value Obligations Fund: The objective of this short-term, fixed
income money market fund is to provide current income and stability of
principal. Prior to November 15, 1996 this fund was called the Lehman
Brothers Prime Value Money Market Fund.
Templeton Foreign Fund: The primary objective of this fund is to provide
long-term growth of capital by investing primarily in securities of
companies located outside the United States.
Income Fund of America: This fund's objective is to provide current income
by investing in debt securities and capital appreciation by investing in
equity securities.
Fidelity Capital & Income Fund: The primary objective of this fund is to
provide a high total return of capital growth and income. The fund invests
primarily in lower rated debt securities and securities of companies with
uncertain financial position.
Vanguard Index Trust 500 Portfolio/S&P 500 Index Fund: This equity fund's
objective is to replicate the investment performance of the Standard &
Poor's 500 Index.
PIMCO Total Return Fund: This fund is an intermediate term, fixed income
fund whose objective is to provide a high level of current income with
reasonable risk by investing in a diversified portfolio of fixed income
securities of varying maturities.
9
<PAGE> 13
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
1. DESCRIPTION OF THE PLAN-CONTINUED
Vanguard Fixed Income Long-Term Corporate Portfolio: This fund invests in
a diversified portfolio of long-term corporate and government bonds with
the objective of providing a high level of current income.
In addition to the funds described above, a short-term interest fund provides
overnight investments in money market funds of Boston Safe for temporarily
invested cash. While cash for withdrawals is disbursed from this fund,
withdrawals are recorded in the investment fund from which the participant
withdrew.
INVESTMENTS IN EXCESS OF 5% OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
The following is a schedule of investments held in excess of 5% of the net
assets available for plan benefits at the end of 1996.
<TABLE>
<CAPTION>
PAR VALUE/ MARKET VALUE
NUMBER AT DECEMBER
FUNDS OF SHARES 30, 1996
- ----- --------- --------
<S> <C> <C>
American Express Company common stock 523,614 $30,042,353
Lehman Brothers Holdings Inc. common stock 624,363 19,589,389
Twentieth Century Ultra Investors Fund 1,829,588 52,015,185
Templeton Foreign Fund 3,175,898 32,711,752
Vanguard Index Trust 500 Portfolio 431,688 30,377,873
Income Fund Of America 1,134,086 18,882,528
--------------
$183,619,080
==============
</TABLE>
BENEFITS
A participant may elect, after attaining the age of 59-1/2, to withdraw all or
any portion of the value of his accounts, provided that each withdrawal is at
least $1,000 (or is 100% of the value of his account if less than $1,000).
Withdrawals by participants before the age of 59-1/2 are permitted only after
meeting specified financial hardship criteria and after obtaining approval by
the Employee Benefit Plans Committee of the Company. Effective April 1, 1996, a
participant can elect to withdraw all or a part of their rollover contribution
made to the Plan, as long as the partial withdrawal of their rollover
contribution is at least $1,000. However a participant can elect to withdraw all
or part of their rollover contribution only once during any consecutive 12-
month period. Although hardship and rollover withdrawals are allowed, a
participant may be subject to an additional 10 percent tax imposed by the Code.
10
<PAGE> 14
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
1. DESCRIPTION OF THE PLAN-CONTINUED
If a participant's employment with the Company terminates for a reason other
than death, the balance in the participant's account is paid to the participant
in a lump-sum payment. However, if the balance in his account exceeds $3,500,
payment will not be made without the participant's consent. Upon death of the
participant, the balance in the participant's account is paid to the designated
beneficiary (as provided by the Plan) in a lump-sum payment.
BENEFITS PAYABLE
Benefits payable to those participants who have elected to withdraw from the
Plan but have not yet been paid was $4,508,785 and $5,837,737 in 1996 and 1995,
respectively.
VESTING
Plan participants are 100 percent vested in all amounts in their respective Plan
accounts.
INCOME TAX STATUS
The Internal Revenue Service ("IRS") made a favorable determination in a letter
dated February 14, 1995 that the Plan is qualified under Sections 401(a) and
401(k) of the Code and that the trust established as part of the Plan is,
therefore, exempt from federal income taxes under the provisions of Section
501(a) of the Code. It is not anticipated that amendments to the Plan after the
date of the IRS determination letter will affect the qualified and tax-exempt
status of the Plan and trust.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS
Investments in mutual funds are valued at the quoted redemption prices on the
last business day of the Plan year; investments in the common stock of American
Express and the Company are valued at the quoted market price on the last
business day of the Plan year; short-term investments and deposits with
insurance companies in connection with contracts are valued at cost plus accrued
interest.
Purchase and sales of securities are reflected on a trade-date basis.
OTHER
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded on the accrual basis.
11
<PAGE> 15
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual
results may differ from those estimates.
3. ADMINISTRATIVE FEES
Except to the extent paid by the Company, all expenses of the Plan are paid by
the Plan. In 1996 and 1995, the Plan was charged $173,183 and $156,101 for
administrative expenses incurred during the respective years. The Company paid
all expenses not directly relating to the administration of the Plan, as well as
all expenses paid to affiliated investment managers.
4. PLAN TERMINATION
While it has not expressed any intent to do so, the Company has the right to
terminate the Plan at any time subject to the provisions set forth in ERISA and
the Code.
5. RELATED PARTY TRANSACTIONS
On November 15, 1996, the Company sold the Lehman Brothers Prime Value Money
Market Fund to Federated Investors. On April 1, 1995, the manager of the S&P 500
Index Fund was changed to The Vanguard Group. Prior to April 1, 1995, the
investments maintained in the S&P 500 Index Fund were managed by PanAgora Asset
Management ("PanAgora"), an affiliate of the Company. Prior to April 1, 1995,
all fees relating to the management of the S&P 500 Index Fund were paid by the
Company. The investment objective of both funds remained the same.
6. TRANSFER TO OTHER PLAN
Prior to May 31, 1994, the Company was a subsidiary of the American Express
Company ("American Express"). On May 31, 1994, American Express completed the
distribution of a special dividend (the "Spin-off") to its shareholders of all
of the common stock of the Company held by American Express. As a result of the
Spin-off, the Company was no longer a subsidiary of American Express. The
account balances associated with former employees of the company, who
transferred to American Express prior to May 31, 1994 were transferred to the
American Express Incentive Savings Plan in 1996.
12
<PAGE> 16
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
6. TRANSFER TO OTHER PLAN-CONTINUED
On July 31, 1993, pursuant to an asset purchase agreement (the "Agreement") with
Primerica Corporation (now known as "The Travelers Inc.") and its subsidiary,
Smith Barney, Harris, Upham & Company Incorporated ("Smith Barney"), the Company
sold its domestic retail brokerage business (except for such businesses
conducted under the Lehman Brothers name) and substantially all of its asset
management business. As a result of the sale, a significant number of employees
became employed by Smith Barney. In 1995, additional employees were transferred
to Smith Barney. The account balances associated with these participants were
transferred to the Primerica Corporation Savings Plan for Shearson Employees in
1995.
13
<PAGE> 17
Supplemental Information
<PAGE> 18
Schedule 1
LEHMAN BROTHERS HOLDINGS INC.
TAX DEFERRED SAVINGS PLAN
SCHEDULE OF INVESTMENTS HELD
DECEMBER 30, 1996
<TABLE>
<CAPTION>
PAR VALUE/ CURRENT VALUE COST
NUMBER AT DECEMBER AT DECEMBER
OF SHARES 30, 1996 30, 1996
---------- ------------ ====--------
<S> <C> <C> <C>
CONTRACTS ISSUED BY INSTITUTIONS
Metropolitan Life Insurance Co.
Contract #24565 9,946,912 $ 9,946,912 $ 9,946,912
Contract #12865 5,401,713 5,401,713 5,401,713
Contract #13955 17,035,023 17,035,023 17,035,023
Allstate Life Insurance Co.
Contract #GICA5584 17,365,463 17,365,463 17,365,463
Contract #GICA5806 8,792,551 8,792,551 8,792,551
John Hancock Mutual Life Insurance Co.
Contract $5565 5,488,257 5,488,257 5,488,257
Prudential Asset Management Group
Contract #7430-211 9,086,741 9,086,741 9,086,741
American International Life Assurance Company Of New York
Contract 18180T 13,332,607 13,332,607 13,332,607
People's Security Insurance Co.
Contract #BDA00473FR 11,655,780 11,655,780 11,655,780
Contract #BDA00568FR 10,425,516 10,425,516 10,425,516
Aetna Life Insurance Co.
Contract #014005 4,597,936 4,597,936 4,597,936
The Principal Financial Group
Contract #4-08804-01 5,024,934 5,024,934 5,024,934
Contract #4-08804-02 7,985,138 7,985,138 7,985,138
------------------------------------
$126,138,571 $126,138,571
====================================
STOCK FUNDS
American Express Company common stock 523,614 $ 30,042,353 * $ 12,033,409
Lehman Brothers Holdings Inc. common stock 624,363 19,589,389 * 11,363,000
------------------------------------
$ 49,631,742 $ 23,396,409
====================================
MUTUAL FUNDS
Twentieth Century Ultra Investors Fund 1,829,588 $ 52,015,185 * $ 41,439,988
Prime Value Obligations Fund 16,757,626 16,757,626 16,757,626
Templeton Foreign Fund 3,175,898 32,711,752 * 29,764,390
Income Fund Of America 1,134,086 18,882,528 * 16,197,319
Fidelity Capital & Income Fund 1,866,652 17,434,530 17,459,339
Vanguard Index Trust 500 Portfolio 431,688 30,377,873 * 23,244,493
PIMCO Total Return Fund 941,665 9,953,400 9,570,046
Vanguard Fixed Income Long-Term Corporate Portfolio 929,657 8,320,428 7,958,488
------------------------------------
$186,453,322 $162,391,689
====================================
</TABLE>
* Investment in excess of five percent of Net Assets Available for Plan
Benefits at end of Plan year
<PAGE> 19
Schedule II
LEHMAN BROTHERS HOLDINGS INC.
TAX DEFERRED SAVINGS PLAN
SCHEDULE OF SERIES OF TRANSACTIONS IN EXCESS OF FIVE PERCENT OF
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING OF YEAR
FOR THE YEAR ENDED DECEMBER 30, 1996
<TABLE>
<CAPTION>
CONTRACT COST OF PROCEEDS FROM
DESCRIPTION NUMBER PURCHASES SALES GAIN(LOSS)
- ----------- -------- --------- ------------- ----------
<S> <C> <C> <C> <C>
People's Security Insurance Co. BDA00568 $22,828,022 -
People's Security Insurance Co. BDA00568 $13,469,987
Metropolitan Life Insurance Co. 24565 $14,984,026 -
Metropolitan Life Insurance Co. 24565 $5,037,113
Twentieth Century Ultra Investors $9,618,586
Twentieth Century Ultra Investors $6,989,528 $1,443,608
</TABLE>
15
<PAGE> 20
Schedule III
LEHMAN BROTHERS HOLDINGS INC.
TAX DEFERRED SAVINGS PLAN
SCHEDULE OF SINGLE TRANSACTIONS IN EXCESS OF FIVE PERCENT OF
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING OF YEAR
FOR THE YEAR ENDED DECEMBER 30, 1996
<TABLE>
<CAPTION>
COST OF PROCEEDS FROM
DESCRIPTION PURCHASES SALES GAIN(LOSS)
- ----------- --------- ------------- ----------
<S> <C> <C> <C>
</TABLE>
16
<PAGE> 21
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Lehman Brothers Holdings Inc. Employee Benefit Plans Committee has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
LEHMAN BROTHERS HOLDINGS INC.
TAX DEFERRED SAVINGS PLAN
By: /s/ Wendy Kleinschmidt
--------------------------------
Wendy Kleinschmidt
Lehman Brothers Holdings Inc.
Employee Benefit Plans Committee
June 30, 1997
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
(23) Consent of Experts
</TABLE>
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Lehman Brothers Holdings Inc. (Form S-8, File No. 333-07875), pertaining to the
Lehman Brothers Holdings Inc. Tax Deferred Savings Plan (the "Plan"), of our
report dated June 1, 1997 with respect to the financial statements and
supplemental schedules of the Plan included in the Plan's Annual Report (Form
11-K) for the year ended December 30, 1996.
/s/ Ernst & Young LLP
New York, New York
June 26, 1997
