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): January 4, 2001
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
<PAGE>
Item 5. Other Events
Fourth Quarter Earnings
On January 4, 2001, Lehman Brothers Holdings Inc. (the "Registrant")
issued a press release with respect to its fourth quarter and full fiscal year
2000 earnings (the "Earnings Release").
Copy of the Earnings Release follows.
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are filed as part of this Report.
99.1 Press Release Relating to Fourth Quarter 2000 Earnings
99.2 Consolidated Statement of Income
(Three Months Ended November 30, 2000)
(Preliminary and Unaudited)
99.3 Consolidated Statement of Income
(Twelve Months Ended November 30, 2000)
(Preliminary and Unaudited)
99.4 Segment Net Revenue Information
(Three and Twelve Months Ended November 30, 2000)
(Preliminary and Unaudited)
99.5 Selected Statistical Information
(Preliminary and Unaudited)
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ David Goldfarb
------------------------------------
David Goldfarb
Chief Financial Officer
(Principal Financial Officer)
Date: January 4, 2001
3
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
Exhibit 99.1 Press Release Relating to Fourth Quarter 2000 Earnings
Exhibit 99.2 Consolidated Statement of Income
(Three Months Ended November 30, 2000)
(Preliminary and Unaudited)
Exhibit 99.3 Consolidated Statement of Income
(Twelve Months Ended November 30, 2000)
(Preliminary and Unaudited)
Exhibit 99.4 Segment Net Revenue Information
(Three and Twelve Months Ended November 30, 2000)
(Preliminary and Unaudited)
Exhibit 99.5 Selected Statistical Information
(Preliminary and Unaudited)
4
<PAGE>
EXHIBIT 99.1
[GRAPHIC OMITTED]
LEHMAN BROTHERS
Press Release
For Immediate Release Media Contact: William J. Ahearn
(212) 526-4379
Investor Contact: Shaun Butler
(212) 526-8381
LEHMAN BROTHERS REPORTS
RECORD 2000 EARNINGS OF $1.78 BILLION,
UP 57% FROM 1999
Fourth Quarter Earnings Increase 33%, Revenues Up 20%
NEW YORK, January 4, 2001 -- Lehman Brothers Holdings Inc. (NYSE: LEH) today
reported that net income was a record $1.78 billion for the full fiscal year
2000, an increase of 57 percent from the $1.13 billion of net income reported in
fiscal 1999. For the full year, earnings per common share increased 56 percent
to a record $6.38 (diluted), compared with $4.08 per share (diluted) in fiscal
1999.
For the quarter ended November 30, 2000, net income was $399 million, or $1.46
per common share (diluted), an increase of 33 percent from $301 million, or
$1.14 per share (diluted), reported in the fourth quarter of fiscal 1999.
"This was a terrific year for Lehman Brothers, as we set new records for
revenues, net
-- more --
<PAGE>
2000 Earnings/Page 2
income, and return on equity," said Richard S. Fuld, Jr., Chairman and
Chief Executive Officer. "Across the board, our results clearly demonstrate
that the Firm is among the top performers in the industry."
Mr. Fuld also noted that Lehman Brothers' performance in the 2000 fourth
quarter, in particular, underscored the strategic and financial strength of the
Firm's global equity, fixed income and investment banking franchises.
"In what was clearly one of the most difficult operating environments in several
years, Lehman Brothers posted significant year-over-year increases in the fourth
quarter, and a return on equity over 22 percent," he said. "This demonstrates
not only the strength, but also the diversification of the Firm's business mix
from a product and a geographic standpoint, as well as our continued successful
management of expenses and risk."
Mr. Fuld said that for the full year, Lehman Brothers posted record results in
its investment banking, global equities, fixed income, and high-net-worth retail
businesses, as well as across all regions.
For the 12 months of fiscal 2000, net revenues (total revenues less interest
expense) were $7.7 billion, an increase of 44 percent from $5.3 billion in
fiscal 1999. Net revenues for the fourth quarter were $1.7 billion, an increase
of 20 percent from $1.4 billion in the fourth quarter of fiscal 1999.
For the full fiscal year, non-interest expenses were $5.1 billion. Non-personnel
expenses were $1.2 billion, compared with $1 billion in the 1999 fiscal year.
Non-interest expenses for the fiscal 2000 fourth quarter were $1.1 billion.
Non-personnel expenses for the same period were $338 million, compared with $312
million in the fiscal 2000
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<PAGE>
2000 Earnings/page 3
third quarter, and $258 million in the previous fiscal year's fourth quarter.
For the year, compensation and benefits as a percentage of net revenues were 51
percent, down from 52 percent in the first three quarters of fiscal 2000, even
as the Firm continued to expand its investment banking, equities, and European
businesses, as well as its technology infrastructure around the world.
For the full year, the Firm's pre-tax margin was 33.5 percent, compared with
30.5 percent in fiscal 1999. Return on common equity was 27.4 percent, compared
with 21.8 percent in fiscal 1999. For the fiscal 2000 fourth quarter, the Firm's
pre-tax margin was 32.6 percent, compared with 31.1 percent in the fourth
quarter of fiscal 1999. Return on common equity was 22.4 percent for the quarter
ended November 30, 2000, compared with 21.6 percent in the fourth quarter of
fiscal 1999. Return on common equity is calculated before any adjustments for
special preferred dividends.
As of November 30, 2000, Lehman Brothers stockholders' equity and trust
preferred securities totaled $8.6 billion, and total capital (stockholders'
equity, trust preferred securities, and long-term debt) was $44 billion. Book
value per common share was $28.78.
Earnings per share calculations reflect a 2-for-1 split of the Firm's common
stock effective on October 20, 2000. Earnings per share also include the impact
of a special preferred dividend of $50 million in the full 1999 and 2000 fiscal
years. American Express Company and Nippon Life Insurance Company 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 maximum of $50 million per year, through mid-year 2002.
-- more --
<PAGE>
2000 Earnings/page 4
Lehman Brothers (NYSE: LEH), an innovator in global finance, serves the
financial needs of corporations, governments and municipalities, institutional
clients, and high-net-worth individuals worldwide. Founded in 1850, Lehman
Brothers maintains leadership positions in equity and fixed income sales,
trading and research, investment banking, private equity, and private client
services. The Firm is headquartered in New York, London, and Tokyo and operates
in a network of offices around the world. For further information about Lehman
Brothers' services, products, and recruitment opportunities, visit our Web site
at www.lehman.com.
Financial Information Attached
Conference Call
A conference call to discuss the Firm's financial results and its outlook for
2001, will be held at 10:30 a.m. EST on Thursday, January 4. Members of the
public who would like to access the conference call should dial 712-257-0489
(passcode: LEH). The conference call will also be accessible through the
"Shareholders" section of the Firm's web site, www.lehman.com. For those unable
to listen to the live broadcast, a replay will be available on the Firm's web
site or by dialing 1-800-469-6599 (domestic) or 402-220-2034 (international),
beginning approximately one hour after the event, and remaining through January
19, 2001.
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements. These statements are
not historical facts but instead represent only the Firm's expectations,
estimates and projections regarding future events. These statements are not
guarantees of future performance and involve certain risks and uncertainties
that are difficult to predict. The Firm's actual results and financial condition
may differ, perhaps materially, from the anticipated results and financial
condition in any such forward-looking statements. For more information
concerning the risks and other factors that could affect the Firm's future
results and financial condition, see "Management's Discussion and Analysis of
Financial Condition and Results of Operation" in the Firm's most recent Annual
Report to Shareholders and most recent Quarterly Report on Form 10-Q.
<PAGE>
EXHIBIT 99.2
LEHMAN BROTHERS HOLDINGS INC.
CONSOLIDATED STATEMENT OF INCOME
(Preliminary and Unaudited)
(In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Percentage Of
------------------------------------
November 30 November 30 Dollar Change
2000 1999 Inc/(Dec)
<S> <C> <C>
Revenues:
Principal transactions $ 659 $ 623
Investment banking 552 432
Commissions 254 186
Interest and dividends 4,928 3,453
Other 21 7
----------------- -----------------
Total revenues 6,414 4,701
Interest expense 4,716 3,290
----------------- -----------------
Net revenues 1,698 1,411 20%
----------------- -----------------
Non-interest expenses:
Compensation and benefits 806 715
Technology and communications 91 85
Brokerage and clearance fees 76 57
Business development 57 31
Professional fees 56 33
Occupancy 38 32
Other 20 20
----------------- -----------------
Total non-interest expenses 1,144 973 18%
----------------- -----------------
Income from operations
before taxes and dividends on
trust preferred securities 554 438 26%
Provision for income taxes 141 122
Dividends on trust preferred securities 14 15
----------------- -----------------
Net income 399 301 33%
Preferred stock dividends 13 9
----------------- -----------------
Net income applicable to
common stock $ 386 $ 292 33%
================= =================
Earnings per common share
Basic $ 1.60 $ 1.21
================= =================
Diluted $ 1.46 $ 1.14
================= =================
</TABLE>
<PAGE>
EXHIBIT 99.3
LEHMAN BROTHERS HOLDINGS INC.
CONSOLIDATED STATEMENT OF INCOME
(Preliminary and Unaudited)
(In millions, except per share data)
<TABLE>
<CAPTION>
Twelve Months Ended Percentage Of
-----------------------------------
November 30 November 30 Dollar Change
2000 1999 Inc/(Dec)
-----------------------------------
<S> <C> <C>
Revenues:
Principal transactions $ 3,713 $ 2,341
Investment banking 2,216 1,682
Commissions 944 651
Interest and dividends 19,440 14,251
Other 134 64
----------------- ---------------
Total revenues 26,447 18,989
Interest expense 18,740 13,649
----------------- ---------------
Net revenues 7,707 5,340 44%
----------------- ---------------
Non-interest expenses:
Compensation and benefits 3,931 2,707
Technology and communications 341 327
Brokerage and clearance fees 264 232
Business development 182 122
Professional fees 184 115
Occupancy 135 116
Other 91 90
----------------- ---------------
Total non-interest expenses 5,128 3,709 38%
----------------- ---------------
Income from operations
before taxes and dividends on
trust preferred securities 2,579 1,631 58%
Provision for income taxes 748 457
Dividends on trust preferred securities 56 42
----------------- ---------------
Net income 1,775 1,132 57%
Preferred stock dividends 96 95
----------------- ---------------
Net income applicable to
common stock $ 1,679 $ 1,037 62%
================= ===============
Earnings per common share
Basic $ 6.89 $ 4.27
================= ===============
Diluted $ 6.38 $ 4.08
================= ===============
</TABLE>
<PAGE>
EXHIBIT 99.4
LEHMAN BROTHERS HOLDINGS INC.
SEGMENT NET REVENUE INFORMATION
(Preliminary and Unaudited)
(In millions)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
---------------------------------- ------------------------------------
November 30 November 30 November 30 November 30
2000 1999 2000 1999
--------------- ---------------- ---------------- ----------------
Investment Banking:
<S> <C> <C> <C> <C>
Advisory $243 $129 $777 $504
Equity 135 155 817 456
Debt 166 141 585 704
--------------- ---------------- ---------------- ----------------
Total 544 425 2,179 1,664
--------------- ---------------- ---------------- ----------------
Capital Markets:
Equity 329 320 2,629 1,425
Fixed Income 657 508 2,060 1,668
--------------- ---------------- ---------------- ----------------
Total 986 828 4,689 3,093
--------------- ---------------- ---------------- ----------------
Client Services:
Private Client 157 153 795 573
Private Equity 11 5 44 10
--------------- ---------------- ---------------- ----------------
Total 168 158 839 583
--------------- ---------------- ---------------- ----------------
Total Lehman $1,698 $1,411 $7,707 $5,340
=============== ================ ================ ================
</TABLE>
<PAGE>
EXHIBIT 99.5
LEHMAN BROTHERS HOLDINGS INC.
SELECTED STATISTICAL INFORMATION
(Preliminary and Unaudited)
(Dollars in millions, except per share data)
<TABLE>
<CAPTION>
Twelve Months Ended Quarters Ended
---------- ------------- ------------ -------------- ------------- ------------ --------------
2000 1999 11/30/00 8/31/00 5/31/00 2/29/00 11/30/99
-------------- ------------- ------------ -------------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement
Net Revenues $ 7,707 $ 5,340 $ 1,698 $ 2,052 $ 1,755 $ 2,202 $ 1,411
Non-Interest Expenses:
Compensation and Benefits 3,931 2,707 806 1,067 912 1,145 715
Nonpersonnel Expenses 1,197 1,002 338 312 285 263 258
Net Income 1,775 1,132 399 457 378 541 301
Net Income Applicable to
Common Stock 1,679 1,037 386 444 366 482 292
Earnings per Common Share (a)
Basic $6.89 $4.27 $1.60 $1.83 $1.49 $1.96 $1.21
Diluted $6.38 $4.08 $1.46 $1.68 $1.39 $1.84 $1.14
Financial Ratios (%)
Return on Common Equity
(annualized) (b) 27.4 21.8 22.4 27.5 24.0 36.8 21.6
Return on Common Equity
(annualized) (c) 26.6 20.8 22.4 27.5 24.0 33.3 21.6
Pretax Operating Margin 33.5 30.5 32.6 32.8 31.8 36.1 31.1
Compensation & Benefits/
Net Revenues 51.0 50.7 47.5 52.0 52.0 52.0 50.7
Effective Tax Rate 29.0 28.0 25.5 30.0 29.7 30.1 28.0
Balance Sheet
Total Assets $225,000 $ 225,668 $ 233,433 $ 213,889 $ 192,244
Total Assets Excluding Matched Book (d) 143,000 153,051 149,691 137,125 130,022
Common Stockholders' Equity 7,081 6,690 6,246 5,986 5,595
Total Stockholders' Equity + Trust
Preferred Securities 8,641 8,250 7,806 7,296 6,993
Total Capital (e) 43,874 43,657 41,339 39,610 37,684
Book Value per Common Share (a) (f) 28.78 27.58 25.59 24.40 22.75
Other Data (#s)
Employees 11,326 10,512 9,343 9,026 8,893
Common Stock Outstanding 236,395,332 240,223,072 243,416,862 240,300,436 239,825,620
Average Shares (a)
Basic 243,762,511 242,954,118 241,873,653 242,258,734 246,345,300 246,054,882 241,522,130
Diluted (g) (h) 264,163,612 258,565,344 265,421,298 265,043,124 265,265,690 262,411,968 257,988,744
</TABLE>
(a) All share and per share data have been restated for the two-for-one common
stock split.
(b) Return on common equity calculated using net income before adjusting for
special preferred dividends.
(c) Return on common equity calculated using net income after adjusting for
special preferred dividends.
(d) Matched book is defined as the lower of securities purchased under
agreements to resell or securities sold
under agreements to repurchase.
(e) Total capital includes long-term debt, Trust Preferred Securities and
stockholders' equity.
(f) This calculation includes restricted stock units granted under the Lehman
Stock Award Programs included in
stockholders' equity.
(g) For the quarter ended November 30, 1999, the assumed conversion of Series A
and B Convertible Preferred Stock into 4,236,792 common shares had the
effect of decreasing diluted earnings per share by $0.01. For the year
ended November 30, 1999, the assumed conversion of Series A and B
Convertible Preferred Stock into 5,559,474 common shares had the effect of
decreasing diluted earnings per share by $0.02.
(h) For the quarters ended November 30, August 31 and May 31, 2000, the assumed
conversion of Series A and B Convertible Preferred Stock into 2,438,375,
common shares had the effect of decreasing diluted earnings per share by
$0.01. For the quarter ended February 29, 2000, the assumed conversion of
Series A and B Convertible Preferred Stock into 2,438,604 common shares had
the effect of decreasing diluted earnings per share by $0.01. For the year
ended November 30, 2000, the assumed conversion of Series A and B
Convertible Preferred Stock into 2,438,375 shares had the effect of
decreasing diluted earnings per share by $0.03.
<PAGE>
