EXHIBIT 99.1 Media Contact: William J. Ahearn
[GRAPHIC OMITTED] (212) 526-4379
Investor Contact: Shaun Butler
For Immediate Release (212) 526-8381
LEHMAN BROTHERS REPORTS
EARNINGS OF
$378 MILLION IN SECOND QUARTER
Firm Posts Second Best Quarter Ever; Record Six Months Earnings of $919 Million
NEW YORK, June 16, 2000 -- Lehman Brothers Holdings Inc. (NYSE: LEH) today
reported net income of $378 million, or $2.78 per common share (diluted), for
the second quarter ended May 31, 2000. The quarter's performance represented the
second highest quarterly earnings Lehman Brothers has ever posted. Net income
rose 15 percent from the $330 million of net income the Firm reported in the
second quarter of fiscal 1999, while net income per common share increased 33
percent from $2.09 per share a year ago.
For the first six months of fiscal 2000, net income was a record $919 million,
an increase of 70 percent from $540 million in net income for the first half of
fiscal 1999.
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Second Quarter 2000/page 2
In the first six months of 2000, Lehman Brothers earned more than it had in any
full year since going public in 1994, with the exception of the $1.1 billion
earned in 1999.
"Despite a significant downturn in the markets in late April and May, the second
quarter proved to be a strong one for Lehman Brothers," said Richard S. Fuld,
Jr., Chairman and Chief Executive Officer. "Given the less-than-favorable market
environment, posting our second best quarter ever underscores the broad-based
strength and diversity of the Firm's franchise businesses, and our continued
success in building our high margin activities."
Mr. Fuld added: "These results speak directly to the significant progress we
have made in implementing our strategy, and in how we
operate our businesses on a daily basis."
Net revenues (total revenues less interest expense) for the second quarter were
$1.755 billion, an increase of 21 percent from $1.455 billion in the second
quarter of fiscal 1999. Mr. Fuld noted that the quarter was the second best the
Firm had ever posted in terms of net revenues, and reflected significant
strength in Lehman Brothers' equity sales, trading and origination activities
globally. For the quarter, the Firm's non-U.S. activities accounted for
approximately 49 percent of total net revenues, an all-time high that
illustrated the recent growth in Lehman Brothers' European and Asian franchises.
"That strength in equities and in our international operations reflects Lehman
Brothers' success in diversifying its revenue mix by business and by region,"
Mr. Fuld said. He noted that revenues from the Firm's investment banking and
equities activities represented approximately two-thirds of Lehman Brothers'
total net revenues.
For the first six months of fiscal 2000, net revenues were a record $3.957
billion, an increase of 54 percent compared with $2.573 billion in the fiscal
1999 first half.
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Second Quarter 2000/page 3
Non-interest expenses for the second quarter were $1,197 million. Nonpersonnel
expenses for the same period were $285 million, up from $251 million in the
previous fiscal year's second quarter. Nonpersonnel expenses as a percentage of
net revenues decreased in the quarter to 16.2 percent from 17.3 percent a year
ago. Compensation and benefits as a percentage of net revenues was 52 percent,
unchanged from the fiscal 2000 first quarter, as the Firm continued its
aggressive growth plan in investment banking, equities, and Europe, as well as
investing in information technology and e-commerce activities.
For the fiscal 2000 second quarter, the Firm's pre-tax margin was 31.8 percent,
relatively unchanged from the second quarter of fiscal 1999. Return on common
equity was 24 percent for the quarter ended May 31, 2000, compared with 26.3
percent a year ago. For the first six months of fiscal 2000, the Firm's pre-tax
margin was 34.2 percent, compared with 30.1 percent for the first six months of
fiscal 1999; for the same period, return on common equity was 30.2 percent,
compared with 21.8 percent in fiscal 1999. Return on common equity for all
periods is calculated using net income before adjusting for a special preferred
dividend.
As of May 31, 2000, Lehman Brothers stockholders' equity and trust preferred
securities were $7.8 billion and total capital (stockholders' equity, trust
preferred, and long-term debt) was $41.4 billion. Book value per common share
was $51.19.
Earnings per share calculations include the impact of a special preferred
dividend of $50 million in the first fiscal quarter of 2000 and the second
fiscal quarter of 1999. The dividend is expected to be paid to American Express
Company and to Nippon Life Insurance Company at year end. American Express and
Nippon Life are entitled to receive an annual non-cumulative preferred dividend
equal to 50 percent of the amount by which the Firm's net income for the full
fiscal year exceeds $400 million, up to a
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Second Quarter 2000/page 4
maximum of $50 million per year, through mid-year 2002.
Lehman Brothers is a global investment bank with leadership positions in
corporate finance, advisory services, municipal finance and fixed income and
equity 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.
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Financial Statements Attached
