As filed with the Securities and Exchange Commission on January 13, 1993
Securities Act File No. 33-
62312
Investment Company Act File No. 811-7706
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____
/_/
Post-Effective Amendment No. 1
/X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 3
/X/
Lehman Brothers Funds, Inc.
(Exact Name of Registrant as Specified in Charter)
200 Vesey Street
New York, N.Y. 10285
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 640-0600
Copies to:
Mary E. Moran, Esq. Gary S. Schpero, Esq.
The Boston Company Advisors, Inc. Simpson Thacher & Bartlett
One Exchange Place 425 Lexington Avenue
Boston, Massachusetts 02109
(Name and Address of Agent for Service) New York, New York 10017
It is proposed that this filing will become effective
(check appropriate box):
X immediately upon filing pursuant to paragraph (b), or
_____on_________pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a), or
_____on_________pursuant to paragraph (a) of Rule 485
The Registrant has previously filed a declaration of indefinite registration
of its shares pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended. Registrant's Rule 24f-2 Notice for the fiscal year ending July 31,
1994 will be filed on or before September 30, 1994
LEHMAN BROTHERS FUNDS, INC.
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
Part A
Item No. Prospectus Heading
1. Cover Page Cover Page
2. Synopsis Background and Expense
Information
3. Condensed Financial
Information Not Applicable
4. General Description of
Registrant Investment
Objectives and Policies;
Additional Information
5. Management of the Fund Management of the Funds;
Purchase of Shares
6. Capital Stock and Other
Securities Dividends; Additional
Information
7. Purchase of Securities Valuation of Shares;
Being Offered Purchase of Shares
8. Redemption or Repurchase Redemption
of Shares
9. Pending Legal Proceedings Not Applicable
Part B Heading in Statement
Item No. of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12.General Information and
History Not Applicable
13. Investment Objectives and
Policies Investment Objectives and
Policies
14. Management of the Fund Management of the Funds
15. Control Persons and Principal
Holders of Securities Management of the Funds
16. Investment Advisory and
Other Services Management of the Funds
17. Brokerage Allocation Investment Objectives and
and Other Practices Policies; Additional Purchase
and Redemption Information
18. Capital Stock and Other
Securities Investment Objectives and
Policies
19. Purchase, Redemption and Additional Purchase and
Pricing of Securities Redemption Information
Being Offered
20. Tax Status Additional Information
Concerning Taxes
21. Underwriters Additional Purchase and
Redemption Information
22. Calculation of Performance Data Additional Yield
Information
23. Financial Statements Financial Statements
LEHMAN BROTHERS FUNDS, INC.
PART A
PROSPECTUS
LEHMAN BROTHERS DAILY INCOME FUND
LEHMAN BROTHERS MUNICIPAL INCOME FUND
Prospectus dated August 2, 1993 is incorporated by reference to Registrant's
filing of definitive copies of the Prospectus and Statement of Additional
Information
pursuant to Rule 497(c) on August 4, 1993.
PART B
LEHMAN BROTHERS FUNDS, INC.
STATEMENT OF ADDITIONAL INFORMATION
LEHMAN BROTHERS DAILY INCOME FUND
LEHMAN BROTHERS MUNICIPAL INCOME FUND
Statement of Additional Information dated August 2, 1993 (except for Financial
Statements included therein) is incorporated by reference to the Registrant's
filing of definitive copies of the Statement of Additional Information
pursuant to
Rule 497(c) on August 4, 1993.
PART B
LEHMAN BROTHERS FUNDS, INC.
STATEMENT OF ADDITIONAL INFORMATION
LEHMAN BROTHERS DAILY INCOME FUND
LEHMAN BROTHERS MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS DATED NOVEMBER 30, 1993
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Daily Income Fund
Portfolio of Investments
<TABLE>
<CAPTION>
November 30, 1993
(unaudited)
Market
Face
Value
Value
(Note 1)
- ------------
- -----------
<C> <S>
<C>
COMMERCIAL PAPER - 43.8%
$500,000 ABN - AMRO NA,
3.400% 01/24/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . $ 491,930
500,000 Alliance & Leic,
3.390% 01/31/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 491,456
4,000,000 Beta Finance,
3.380% 02/16/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 3,933,307
Broadway Capital Corporation:
26,649,000 3.150% 12/15/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 26,581,378
5,154,000 3.150% 12/20/1993 +. . . . . . . . . . . . . . . . . . . . . .
. . . . . . 5,141,824
6,000,000 Canadian Imperial Holdings,
3.280% 01/24/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 5,917,920
Central Hispano, North America:
3,000,000 3.260% 01/10/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 2,962,280
2,400,000 3.390% 02/10/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 2,358,907
2,000,000 3.380% 02/14/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,967,000
1,000,000 3.380% 02/22/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 984,238
2,000,000 CND Imperial Holding,
3.320% 02/08/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,966,431
Countrywide Funding:
9,000,000 3.120% 12/03/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 8,963,775
15,765,000 3.120% 12/20/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 15,722,237
15,000,000 3.120% 12/27/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 14,964,000
500,000 Credit Lyonnais,
3.220% 12/20/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 493,739
CSC Enterprises:
6,800,000 3.200% 12/03/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 6,785,493
10,000,000 3.160% 12/06/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 9,972,000
Den Danske,
2,000,000 3.350% 02/03/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,966,314
2,000,000 3.240% 03/11/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,967,060
General Electric Capital Corporation:
2,000,000 3.320% 02/02/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,966,800
2,500,000 3.230% 02/16/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 2,459,625
General Motor Acceptance:
2,000,000 3.375% 01/05/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,982,750
13,000,000 3.375% 01/11/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 12,879,344
5,000,000 3.400% 01/11/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 4,957,500
12,000,000 3.375% 01/12/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 11,887,500
1,000,000 3.350% 02/02/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 983,157
10,000,000 Golden Managers Acceptance,
3.160% 12/08/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 9,971,125
2,000,000 Goldman Sachs,
3.410% 02/09/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,965,756
20,000,000 Household Financial Corporation,
3.160% 12/08/1993 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 19,938,750
1,000,000 Kingdom of Sweden,
3.410% 01/14/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 984,787
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
DAILY INCOME FUND
Portfolio of Investments - (continued)
<TABLE>
<CAPTION>
November 30, 1993
(unaudited)
Market
Face
Value
Value
(Note 1)
- ------------
- -----------
<C> <S>
<C>
COMMERCIAL PAPER - (CONTINUED)
$2,000,000 McKenna Triangle National,
3.330% 01/25/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . $ 1,967,995
Merrill Lynch & Company:
4,000,000 3.270% 01/10/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 3,949,497
2,000,000 3.250% 02/17/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,968,403
3,000,000 3.250% 02/17/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 2,950,979
2,000,000 Morgan Stanley,
3.350% 02/07/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,966,128
25,000,000 Nationwide Building,
3.280% 01/10/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 24,797,278
Nordbanken,
500,000 3.430% 01/05/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 492,568
4,000,000 3.290% 01/11/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 3,967,100
27,000,000 3.290% 01/18/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 26,738,445
3,000,000 3.330% 01/18/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 2,957,820
1,000,000 3.440% 02/01/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 982,800
1,500,000 3.310% 02/22/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,475,175
3,000,000 3.310% 02/22/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 2,950,074
Postipankki US:
10,000,000 3.400% 01/18/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 9,903,422
17,000,000 3.290% 01/21/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 16,832,210
6,000,000 3.350% 03/01/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 5,899,500
3,000,000 3.290% 03/08/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 2,950,650
10,000,000 SFC USA Inc.,
3.420% 01/25/1994 +. . . . . . . . . . . . . . . . . . . . . .
. . . . . . 9,943,333
Svenska Handelsbanken:
4,000,000 3.290% 02/15/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 3,934,200
5,000,000 3.280% 03/02/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 4,917,544
Swedbank Inc.:
15,000,000 3.300% 01/13/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 14,861,125
15,000,000 3.300% 01/14/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 14,859,750
6,000,000 3.300% 01/20/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 5,941,150
2,000,000 United Airlines First Funding,
3.240% 01/24/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,971,478
12,400,000 Working Capital Management LP,
3.170% 01/07/1994 + . . . . . . . . . . . . . . . . . . . . .
. . . . . . 12,304,262
- -----------
TOTAL COMMERCIAL PAPER
(Cost $365,091,269) . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 365,091,269
- -----------
- -----------
CORPORATE BONDS AND NOTES - 23.7%
BANKING AND FINANCE - 21.6%
25,000,000 Abbey National Treasury Services,
3.650% 11/15/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 24,982,954
1,250,000 Bankers Trust Corporation, New York, Note,
9.375% 05/15/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,282,391
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
DAILY INCOME FUND
Portfolio of Investments - (continued)
<TABLE>
<CAPTION>
November 30, 1993
(unaudited)
Market
Face
Value
Value
(Note 1)
- ------------
- -----------
<C> <S>
<C>
CORPORATE BONDS AND NOTES - (CONTINUED)
BANKING AND FINANCE - (CONTINUED)
Bear Stearns Company INC., Medium Term Note:
$25,000,000 3.500% 10/05/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . $ 25,000,000
15,000,000 3.550% 10/21/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 15,000,000
24,000,000 Capital Auto Receivables, Series 1993-3, Class A-1,
3.300% 11/15/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 23,993,261
1,250,000 FCC National Bank, Wilmington, Delaware,
3.620% 01/25/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,250,451
General Motors Acceptance Corporation, Medium Term Note:
6,000,000 6.050% 06/01/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 6,067,574
2,450,000 8.700% 10/17/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 2,545,364
35,000,000 Goldman Sachs Group LP,
3.375% 10/12/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 35,000,000
10,000,000 Household Financial Corporation, Trust #324, Medium Term Note,
3.400% 08/18/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 9,985,811
35,000,000 Morgan Stanley Group Inc., Medium Term Note,
3.375% 11/08/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 35,000,000
- ------------
180,107,806
- ------------
LEASING - 1.1%
9,000,000 Concord Leasing Inc., Promissory Note,
3.262% 09/21/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 9,000,000
- -----------
OTHER - 1.0%
8,000,000 Secondary Market Services Corporation,
3.400% 09/01/2010 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 8,000,000
- ------------
TOTAL CORPORATE BONDS AND NOTES
(Cost $197,107,806) . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 197,107,806
- ------------
- ------------
CERTIFICATES OF DEPOSIT - 9.1%
YANKEE CERTIFICATE OF DEPOSIT - 4.9%
Fuji Bank, Japan:
15,000,000 3.150% 12/06/1993 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 15,000,000
15,000,000 3.150% 12/07/1993 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 15,000,000
1,000,000 Mitsubishi Bank,
3.340% 02/01/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,000,017
200,000 Mitsubishi Bank Limited, New York, Branch Deposit Note,
10.300% 03/23/1994. . . . . . . . . . . . . . . . . . . . . .
. . . . . . 203,787
10,000,000 Sanwa Bank Limited,
3.370% 01/31/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 9,999,832
- ------------
41,203,636
- ------------
EURO CERTIFICATE OF DEPOSIT - 4.2%
20,000,000 Norinchukin Bank London,
3.300% 01/21/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 20,000,281
15,000,000 Sumitomo Trust and Banking, London,
3.330% 01/26/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 14,999,306
- ------------
34,999,587
- ------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $76,203,223). . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 76,203,223
- ------------
- ------------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
DAILY INCOME FUND
Portfolio of Investments - (continued)
<TABLE>
<CAPTION>
November 30, 1993
(unaudited)
Market
Face
Value
Value
(Note 1)
- ------------
- -----------
<C> <S>
<C>
U.S. GOVERNMENT AGENCY OBLIGATIONS - 6.1%
$20,000,000 Federal Farm Credit Banks,
3.200% 09/07/1994 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . $ 19,983,569
Federal National Mortgage Association:
25,000,000 3.600% 10/07/1996 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 25,000,000
5,000,000 3.350% 09/02/1997 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 5,000,000
1,000,000 Student Loan Marketing Association, Note, Series BF,
3.585% 11/27/1996 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 1,005,555
- ------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $50,989,124). . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 50,989,124
- ------------
- ------------
REPURCHASE AGREEMENTS - 17.3%
50,000,000 Agreement with First Boston, dated 11/30/93 bearing 3.360% to
be
repurchased at $50,004,611 on 12/01/93, collateralized by
$61,995,714
market value of numerous Government Agency Obligations having
maturities
between 04/01/20 and 10/01/22 . . . . . . . . . . . . . . . . .
. . . . . . 50,000,000
94,120,000 Agreement with Paine Webber Group, dated 11/30/93 bearing
3.320% to be
repurchased at $94,128,785 on 12/01/93, collateralized by
$122,727,999
market value of numerous Government Agency Obligations having
maturities
between 10/25/11 and 10/01/31 . . . . . . . . . . . . . . . . .
. . . . . . 94,120,000
- ------------
TOTAL REPURCHASE AGREEMENTS
(Cost $144,120,000) . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 144,120,000
- ------------
- ------------
</TABLE>
<TABLE>
<S>
<C> <C>
TOTAL INVESTMENTS (Cost $833,511,422*) . . . . . . . . . . . . . . . . . . . .
. . . . . . 100.0% 833,511,422
OTHER ASSETS AND LIABILITIES (Net) . . . . . . . . . . . . . . . . . . . . . .
. . . . . . (0.0) (236,558)
- ----- ------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 100.0% $ 833,274,864
- ----- ------------
- ----- ------------
<FN>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Annualized yield at date of purchase.
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
- ------------------------------------------------------------------------------
- -
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Daily Income Fund
Statement of Assets and Liabilities
November 30, 1993 (unaudited)
- ------------------------------------------------------------
<TABLE>
<S> <C>
<C>
ASSETS:
Investments, at value (Cost $833,511,422)(Note 1)
See accompanying schedule:
Securities. . . . . . . . . . . . . . . . . . . . . . . . $
689,391,422
Repurchase Agreements . . . . . . . . . . . . . . . . . .
144,120,000 $ 833,511,422
----------
- --
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,209
Receivable for Fund shares sold . . . . . . . . . . . . . .
10,541,203
Interest receivable . . . . . . . . . . . . . . . . . . . .
3,219,288
Unamortized organization costs (Note 5) . . . . . . . . . .
424,506
- ------------
Total Assets. . . . . . . . . . . . . . . . . . . . . . .
847,766,628
LIABILITIES:
Payable for Fund shares redeemed. . . . . . . . . . . . . .
12,452,980
Dividends payable . . . . . . . . . . . . . . . . . . . . .
997,817
Organization costs payable. . . . . . . . . . . . . . . . .
429,473
Distribution fee payable (Note 3) . . . . . . . . . . . . .
238,600
Investment advisory fee payable (Note 2). . . . . . . . . .
133,541
Administration fee payable (Note 2) . . . . . . . . . . . .
89,028
Transfer agent fees payable (Note 2). . . . . . . . . . . .
74,810
Custodian fees payable (Note 2) . . . . . . . . . . . . . .
26,750
Accrued expenses and other payables . . . . . . . . . . . .
48,765
-----------
- --
Total Liabilities . . . . . . . . . . . . . . . . . . . .
14,491,764
- ------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 833,274,864
- ------------
- ------------
NET ASSETS consist of:
Accumulated net realized gain on investments sold . . . . .
$ 699
Par value . . . . . . . . . . . . . . . . . . . . . . . . .
833,274
Paid-in capital in excess of par value. . . . . . . . . . .
832,440,891
- ------------
Total Net Assets. . . . . . . . . . . . . . . . . . . . .
$ 833,274,864
- ------------
- ------------
NET ASSET VALUE, offering price and redemption price
per share ($833,274,864 - 833,274,165 shares of
beneficial interest outstanding). . . . . . . . . . . . . .
$1.00
- ------------
- ------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------------------------
- -
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Daily Income Fund
Statement of Assets and Liabilities
For the Period Ended November 30, 1993 (unaudited)*
- ------------------------------------------------------------
<TABLE>
<S> <C>
<C>
INVESTMENT INCOME:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,158,053
EXPENSES:
Investment advisory fee (Note 2). . . . . . . . . . . . . . $
467,414
Distribution fee (Note 3) . . . . . . . . . . . . . . . . .
389,511
Administration fee (Note 2) . . . . . . . . . . . . . . . .
311,609
Transfer agent fees (Note 2). . . . . . . . . . . . . . . .
179,587
Amortization of organization costs (Note 5) . . . . . . . .
30,144
Custodian fees (Note 2) . . . . . . . . . . . . . . . . . .
26,750
Legal and audit fees. . . . . . . . . . . . . . . . . . . .
17,667
Directors' fees and expenses (Note 2) . . . . . . . . . . .
14,185
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
92,680
Fees waived by investment adviser, administrator,
and distributor (Note 2). . . . . . . . . . . . . . . . . .
(665,517)
-------
- --
Total Expenses. . . . . . . . . . . . . . . . . . . . . .
864,030
- ---------
NET INVESTMENT INCOME. . . . . . . . . . . . . . . . . . . . . .
4,294,023
- ---------
NET REALIZED GAIN ON INVESTMENTS SOLD (Note 1) . . . . . . . . .
699
- ---------
NET INCREASE IN ASSETS RESULTING FROM
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4,294,722
- ---------
- ---------
<FN>
- ---------------
* The Lehman Brothers Daily Income Fund commenced operations on August 2,
1993.
</TABLE>
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------------------------
- -
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Daily Income Fund
Statement of Changes in Net Assets
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Period
Ended
11/30/93*
(unaudited)
___________
<S> <C>
Net investment income. . . . . . . . . . . . . . . . . . . . $ 4,294,023
Net realized gain on investments during the period . . . . . 699
-----------
Net increase in net assets resulting from operations . . . . 4,294,722
Distributions to shareholders from
Net investment income . . . . . . . . . . . . . . . . . (4,294,023)
Net increase in net assets from Fund share
transactions (Note 4) . . . . . . . . . . . . . . . . . 833,224,165
------------
Net increase in net assets . . . . . . . . . . . . . . . . . 833,224,864
NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . . . . . 50,000
------------
End of period. . . . . . . . . . . . . . . . . . . . . . . . $833,274,864
------------
------------
<FN>
- ---------------
* The Lehman Brothers Daily Income Fund commenced operations
on August 2, 1993.
</TABLE>
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------------------------
- -
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Daily Income Fund
Financial Highlights
For a Fund share outstanding throughout the period
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Period
Ended
11/30/93*
(unaudited)
------------
<S> <C>
Net Asset Value, beginning of period . . . . . . . . . $1.00
-------
Income from investment operations:
Net investment income. . . . . . . . . . . . . . . . . 0.0091
-------
Less distributions:
Distributions from net investment income . . . . . . . (0.0091)
-------
Net Asset Value, end of period . . . . . . . . . . . . $1.00
-------
Total Return ++. . . . . . . . . . . . . . . . . . . . 0.92%
-------
-------
Ratios to average net assets/supplemental
data: . . . . . . . . . . . . . . . . . . . . . . .
Net Assets, end of period (in 000's) . . . . . . . . . $833,275
Ratios of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . . 2.76% **
Ratios of operating expenses to average
net assets + . . . . . . . . . . . . . . . . . . . . 0.55% **
<FN>
- -----------------------
* The Fund commenced operations on August 2, 1993.
** Annualized.
+ Annualized expense ratio before waiver of fees by investment adviser,
administrator, and distributor for the period ended November 30,1993 was
0.98%.
++ Total return represents aggregate total return for the period indicated.
</TABLE>
See Notes to Financial Statements.
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (UNAUDITED)
MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
Market
Face
Value
Value
(Note 1)
- -------
- ----------
<C> <S>
<C>
MUNICIPAL BONDS AND NOTES - 102.1%
ALABAMA - 0.9%
$2,150,000 Phoenix City, Alabama, Industrial Development Board,
Environmental Impact Revenue,
(Mead Project),
2.700% due 12/1/23+++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . $ 2,150,000
- -------------
ARIZONA - 4.6%
9,000,000 Apache County, Arizona, Industrial Development Authority
Revenue, Series 83A,
2.300% due 12/15/18++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 9,000,000
Pima County, Arizona, Industrial Development Authority Revenue:
1,000,000 (Tucson Electric Power Project),
2.550% due 5/1/25 ++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,000,000
500,000 (Tucson),
2.400% due 12/1/22++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 500,000
- -------------
10,500,000
- -------------
CALIFORNIA - 11.3%
400,000 California Health Facilities, Hospital Revenue, Series B,
2.350% due 10/1/21++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 400,000
3,650,000 California Higher Education Loan Authority, Series E-1,
2.350% due 12/1/22++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3,650,000
2,805,000 California State, Revenue Anticipation Notes,
3.500% due 6/28/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,816,538
1,000,000 Chino, California, Tax and Revenue Anticipation Notes,
3.250% due 7/29/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,001,220
1,000,000 Huntington Beach, California, Tax and Revenue Anticipation
Notes,
3.250% due 7/29/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,001,865
300,000 Los Angeles County, California, Housing Authority, (Riverpark
Apartments Project)
3.400% due 9/1/10++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 300,000
300,000 Los Angeles County, California, Metropolitan Transportation
Authority,
2.100% due 7/1/20++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 300,000
300,000 Los Angeles County, California, Multifamily Housing Authority
Revenue,
2.300% due 10/1/14++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 300,000
9,000,000 Los Angeles County, California, Tax and Revenue Anticipation
Notes,
3.000% due 6/30/94 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 9,011,048
1,700,000 Marin County, California, Tax and Revenue Anticipation Notes,
3.000% due 7/6/94 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,700,031
200,000 Placer County, California, Industrial Development Authority,
Industrial Revenue,
(Chesapeake Industries Project),
2.300% due 12/1/95++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 200,000
200,000 Sacramento County, California, Multifamily Housing Authority
Revenue, Series A,
2.200% due 4/15/07++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 200,000
3,000,000 Sacramento County, California, Tax and Revenue Anticipation
Notes,
3.000% due 7/29/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3,005,278
800,000 San Francisco, California, Tax Anticipation Notes,
3.250% due 7/15/94 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 802,534
1,000,000 Southern California Rapid Transportation District, Series A,
3.000% due 2/22/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,000,355
- -------------
25,688,869
- -------------
COLORADO - 0.9%
800,000 Colorado Student Obligation Bond Authority, Series A,
2.550% due 3/1/24++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 800,000
1,250,000 Englewood, Colorado, Industrial Development Authority Revenue,
2.550% due 12/1/10 ++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,250,000
- -------------
2,050,000
- -------------
</TABLE>
See Note to Financial Statements.
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 1993 (UNAUDITED)
MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
Market
Face
Value
Value
(Note 1)
- -------
- ----------
<C> <S>
<C>
Market
MUNICIPAL BONDS AND NOTES (CONTINUED)
DISTRICT OF COLUMBIA - 1.8%
$4,000,000 District of Columbia, Revenue, (George Washington University),
2.500% due 3/1/06++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . $4,000,000
- -------------
FLORIDA - 3.3%
1,500,000 Dade County, Florida, Solid Waste, Industrial Development
Authority Revenue, Series A,
2.400% due 12/1/13++ . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 1,500,000
500,000 Florida Housing Finance Agency Revenue, Multifamily Housing,
2.600% due 12/1/11++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 500,000
2,830,000 Sarasota County, Florida, Health Facilities Authority,
2.500% due 12/1/19 ++ . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,830,000
1,500,000 St. John County, Florida, Industrial Development Authority
Revenue, Series 86,
2.600% due 12/1/16++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 1,500,000
1,100,000 St. Lucie County, Florida, Pollution Control Revenue,
2.450% due 5/1/27++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 1,100,000
- -------------
7,430,000
- -------------
GEORGIA - 1.5%
3,000,000 Georgia Municipal Electric Authority, Power Reserve, Series
1985A,
10.500% due 1/1/20+++ . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 3,305,070
- --------------
ILLINOIS - 9.5%
4,000,000 Chicago, Illinois, Revenue Bonds, Tax Anticipation Notes,
2.750% due 1/6/94 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 4,000,000
4,300,000 Illinois Health Facilities Authority, Pooled Financing, Series
F,
2.350% due 8/1/15++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 4,300,000
Illinois State, Certificates of Obligation:
500,000 3.250% due 4/15/94. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 500,795
1,000,000 3.250% due 5/16/94. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 1,001,470
2,000,000 3.500% due 6/15/94. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,006,810
5,100,000 Illinois State, Toll Highway Authority, Toll Revenue,
2.250% due 1/1/10++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 5,100,000
4,500,000 St. Charles, Illinois, Industrial Development Authority
Revenue, (Pier 1),
2.700% due 12/15/26 ++. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 4,500,000
- -------------
21,409,075
- -------------
INDIANA - 5.5%
2,000,000 Indiana Health Facilities Financing Authority, Aces Methodist
Hospital Inc., Series B,
2.500% due 9/1/22 ++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,000,000
8,500,000 Indiana Secondary Market Education Loan Revenue, Series B,
2.400% due 12/1/14++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 8,500,000
2,000,000 Indianapolis, Indiana, Economic Development Authority Revenue,
3.300% due 9/1/95 ++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,000,000
- -------------
12,500,000
- -------------
IOWA - 1.3%
3,000,000 Iowa State, Transportation Authority Revenue, Series A,
3.250% due 6/30/94 . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 3,007,953
- -------------
</TABLE>
See Note to Financial Statements.
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 1993 (UNAUDITED)
MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
Market
Face
Value
Value
(Note 1)
- -------
- ----------
<C> <S>
<C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
KENTUCKY - 1.5%
$1,000,000 Kentucky Housing Corporation, Housing Revenue, Series D,
2.750% due 1/1/22+++ . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . $1,000,000
2,495,000 Kentucky Rural Economic Development Authority Revenue,
2.700% due 12/1/09++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,495,000
- -------------
3,495,000
- -------------
LOUISIANA - 0.7%
1,000,000 Louisiana Housing Finance Agency Revenue, Multifamily,
(Alouette - A),
3.600% due 1/1/26++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 1,000,000
500,000 Louisiana Public Facilities Authority Revenue, Healthcare
Systems, (Sisters of Charity),
2.750% due 1/1/15+++ . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 500,000
- -------------
1,500,000
- -------------
MAINE - 2.3%
2,270,000 Maine State, Tax and Revenue Anticipation Notes,
3.500% due 6/30/94. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,279,239
3,000,000 Mid-Maine Waste Action Corporation, Revenue Authority,
4.000% due 8/1/12+++ . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 3,000,000
- -------------
5,279,239
- -------------
MARYLAND - 4.2%
5,000,000 Baltimore, Maryland, Pollution Control Revenue, (FMC
Corporation),
2.300% due 2/1/00++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 5,000,000
4,500,000 Maryland State Community Development Administration,
Multifamily Housing, Series B,
2.800% due 4/1/17+++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 4,500,123
- -------------
9,500,123
- -------------
MICHIGAN - 1.7%
500,000 Michigan State, Higher Education Student Loan Revenue
Authority, Series XIIB,
2.400% due 10/1/13++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 500,000
3,380,000 Michigan State, Municipal Bond Authority Revenue Notes, Series
B-3,
3.000% due 5/5/94 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 3,383,630
- -------------
3,883,630
- -------------
MINNESOTA - 0.3%
600,000 Beltrami County, Minnesota, Environmental Control Revenue,
1.900% due 12/1/21+ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 600,000
- -------------
MISSISSIPPI - 0.1%
150,000 Mississippi Business Finance Corporation, Series C,
(Aircruisers Project),
2.450% due 10/1/04++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 150,000
- -------------
MISSOURI - 4.3%
2,305,000 Kirksville, Missouri, Industrial Development Authority Revenue,
(Optech Project),
2.700% due 10/1/09 ++ . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,305,000
Missouri Higher Education Loan Authority:
1,500,000 Student Loan,
2.550% due 6/1/17++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 1,500,000
4,000,000 Series ,
2.550% due 6/1/20 ++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 4,000,000
2,000,000 University of Missouri, Capital Projects Notes, Series FY-4,
3.000% due 6/30/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,000,905
- -------------
9,805,905
- -------------
</TABLE>
See Note to Financial Statements.
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 1993 (UNAUDITED)
MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
Market
Face
Value
Value
(Note 1)
- -------
- ----------
<C> <S>
<C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEVADA - 0.4%
$500,000 Clark County, Nevada, Industrial Development Authority Revenue,
(Nevada Power Company),
2.750% due 11/1/18++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . $ 500,000
Nevada State, Department Commission, Industrial Development
Authority, Series A:
200,000 Series A, (Kinplex Project),
2.450% due 1/1/09++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 200,000
300,000 Series A, (Master Halco Project),
2.650% due 12/1/09++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 300,000
- -------------
1,000,000
- -------------
NEW MEXICO - 1.1%
1,000,000 Albuquerque, New Mexico, Revenue, (Charter Hospital, Inc.
Project),
2.200% due 3/1/14++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,000,000
500,000 Farmington, New Mexico, Pollution Control Revenue, Series 85A,
2.800% due 2/1/15+++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 499,955
1,000,000 New Mexico State, Severance Tax, Series B,
7.000% due 1/1/94 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,003,428
- -------------
2,503,383
- -------------
NEW YORK - 7.2%
5,000,000 New York, New York, City Municipal Water Finance Authority,
2.750% due 4/15/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 5,000,525
8,030,000 New York, New York, Revenue Anticipation Notes, Series B,
3.500% due 6/30/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 8,062,654
3,140,000 New York State, Mortgage Agency Revenue, Series 32B,
2.750% due 3/1/94 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3,140,000
- -------------
16,203,179
- -------------
NORTH CAROLINA - 0.9%
2,000,000 Bladen County, North Carolina, Industrial Facilities and
Pollution Control Revenue,
2.650% due 11/1/20++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,000,000
- -------------
OHIO - 3.8%
600,000 Columbus, Ohio, Economic Development Authority Revenue,
2.350% due 12/1/95++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 600,000
5,000,000 Ohio State, Environmental Improvement Development Revenue,
2.550% due 3/1/23 +++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 5,000,000
2,200,000 Ohio State University, General Receipts, Series B,
2.250% due 12/1/12++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,200,000
Student Loan Funding Corporation, Ohio, Cincinnati Loan Revenue:
300,000 Series 1983A,
2.500% due 12/29/98 ++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 300,000
500,000 Series A-1,
2.600% due 1/1/07++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 500,000
- -------------
8,600,000
- -------------
OKLAHOMA - 0.3%
550,000 Central Oklahoma, Transportation and Parking Authority Revenue,
8.200% due 7/1/94 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 566,380
- -------------
</TABLE>
See Note to Financial Statements.
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 1993 (UNAUDITED)
MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
Market
Face
Value
Value
(Note 1)
- -------
- ----------
<C> <S>
<C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
PENNSYLVANIA - 6.7%
$7,200,000 Pennsylvania State, Economic Development Authority, Solid Waste
Disposal,
2.700% due 12/1/19+++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . $ 7,200,000
2,000,000 Pennsylvania State, Higher Education Facilities Authority
Revenue,
2.400% due 6/1/99++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,000,000
2,200,000 Philadelphia, Pennsylvania, Hospital and Higher Education
Facilities Authority,
2.500% due 6/1/23 ++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,200,000
3,800,000 Schuylkill County, Pennsylvania, Industrial Development
Authority, Resource Recovery,
4.500% due 12/1/06+++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3,800,000
- -------------
15,200,000
- -------------
PUERTO RICO - 0.4%
1,000,000 Commonwealth of Puerto Rico, Government Development Bank,
2.250% due 12/1/15++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,000,000
- -------------
SOUTH CAROLINA - 0.4%
1,000,000 York County, South Carolina, Pollution Control Revenue, (NRU
Project), Series 84N-4,
2.700% due 9/15/14+++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,000,000
- -------------
SOUTH DAKOTA - 0.9%
2,000,000 South Dakota School District, Certificate of Participation,
4.050% due 12/30/93 . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,002,250
- -------------
TENNESSEE - 4.3%
300,000 Chatanooga, Tennessee, Industrial Development Revenue,
2.250% due 12/15/12++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 300,000
4,000,000 Coffee County, Tennessee, Industrial Development Board, Series
M,
3.550% due 12/1/01++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 4,000,000
1,500,000 Hamilton County, Tennessee, Industrial Development Board,
Industrial Development Revenue,
(Seaboard Feeds Chatanooga Project),
2.600% due 12/1/17++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,500,000
2,000,000 Metropolitan Government of Nashville and Davidson County,
Tennessee, University, Series 85A,
2.600% due 1/15/13 ++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,000,000
2,000,000 Metropolitan Nashville Airport Authority, Tennessee, Tennessee
Airport Revenue,
2.250% due 7/1/19 ++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,000,000
- -------------
9,800,000
- -------------
TEXAS - 10.8%
700,000 Capital Health Facilities Development Corporation, Texas, Health
Facilities,
2.600% due 12/1/16 ++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 700,000
5,400,000 City of Houston, Texas, Airport Authority Revenue,
2.650% due 1/13/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 5,400,000
3,400,000 Mansfield, Texas, Industrial Development Authority, (Corporation
Project),
2.700% due 11/1/26 ++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3,400,000
North Texas Higher Education Authority:
2,600,000 Series F,
2.500% due 4/1/20++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,600,000
8,000,000 Student Loan Revenue,
2.350% due 3/1/05++ . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 8,000,000
</TABLE>
See Note to Financial Statements.
<PAGE>
LEHMAN BROTHERS FUNDS, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 1993 (UNAUDITED)
MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
Market
Face
Value
Value
(Note 1)
- -------
- ----------
<C> <S>
<C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
TEXAS - (CONTINUED)
San Antonio, Texas, Housing Finance Corporation, Multifamily
Housing:
$300,000 (Cape Cod Apartments),
2.550% due 6/1/20 ++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . $ 300,000
1,000,000 (Mesa Ridge Apartments Project),
2.550% due 11/1/20 ++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,000,000
3,000,000 Texas State, Tax and Revenue Anticipation Notes,
3.250% due 8/31/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3,010,912
- -------------
24,410,912
- -------------
UTAH - 6.3%
3,000,000 Carbon County, Utah, Solid Waste Revenue,
2.800% due 7/1/08 +++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3,000,000
2,000,000 Intermountain Power Agency, Utah, Power Supply Revenue,
11.000% due 1/1/94. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 2,073,537
7,500,000 Tooele County, Utah, (Hazardous Waste Treatment Project), Series
A,
2.700% due 11/1/26 +++. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 7,500,000
1,600,000 Utah State, Board of Regents, Student Loan Revenue,
2.400% due 11/1/13 ++ . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,600,000
- -------------
14,173,537
- -------------
VIRGINIA - 1.8%
Virginia State, Housing Development Authority, Commonwealth
Mortgage:
$1,000,000 Series B, Subseries B- Stem II,
2.950% due 7/1/27+++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . $ 1,000,000
3,000,000 Series I, Subseries I- Stem,
2.800% due 7/1/20+++. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3,000,000
- -------------
4,000,000
- -------------
WASHINGTON - 0.4%
900,000 Snohomish County, Washington, Public Utilities Revenue,
5.500% due 1/1/94 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 901,936
- -------------
WISCONSIN - 0.7%
1,500,000 Milwaukee, Wisconsin, Metropolitan Sewer District,
5.100% due 9/1/94 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 1,525,379
- -------------
</TABLE>
<TABLE>
<S>
<C> <C>
TOTAL INVESTMENTS (Cost $231,141,820*) . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . 102.1% 231,141,820
OTHER ASSETS AND LIABILITIES (Net) . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . (2.1) (4,680,646)
- ------ -------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . 100.0% $ 226,461,174
- ------ -------------
- ------ -------------
<FN>
__________________________
* Aggregate cost for Federal tax purposes.
+ Variable rate demand notes are payable upon not more than one business
day's
notice. The interest rate shown reflects the rate currently in effect.
++ Variable rate demand notes are payable upon not more than seven business
days'
notice.
The interest rate shown reflects the rate currently in effect.
+++ Put bonds and notes have demand features which mature within one year.
</TABLE>
See Note to Financial Statements.
<PAGE>
- ------------------------------------------------------------------------------
- --
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Municipal Income Fund
Statement of Assets and Liabilities
November 30, 1993 (Unaudited)
- ----------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost $231,141,820) (Note 1)
See accompanying schedule. . . . . . . . . . . . . . . $
231,141,820
Receivable for Fund shares sold . . . . . . . . . . . . .
4,520,743
Interest receivable . . . . . . . . . . . . . . . . . . .
1,536,889
Unamortized organization costs (Note 5) . . . . . . . . .
169,198
---
- -----------
Total Assets . . . . . . . . . . . . . . . . . . . . .
237,368,650
LIABILITIES:
Payable for Fund shares redeemed. . . . . . . . . . . . . $ 6,874,450
Payable for investment securities purchased . . . . . . . 3,438,070
Dividends payable . . . . . . . . . . . . . . . . . . . . 204,470
Organization costs payable. . . . . . . . . . . . . . . . 156,026
Distribution fee payable (Note 3) . . . . . . . . . . . . 63,895
Investment advisory fee payable (Note 2). . . . . . . . . 49,658
Due to custodian. . . . . . . . . . . . . . . . . . . . . 42,641
Administration fee payable (Note 2) . . . . . . . . . . . 33,105
Custodian fees payable (Note 2) . . . . . . . . . . . . . 15,550
Transfer agent fees payable (Note 2). . . . . . . . . . . 4,439
Accrued expenses and other payables . . . . . . . . . . . 25,172
------------
Total Liabilities. . . . . . . . . . . . . . . . . . .
10,907,476
---
- -----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $
226,461,174
---
- -----------
---
- -----------
NET ASSETS consist of:
Accumulated net realized gain on investments sold . . . . $
300
Par value . . . . . . . . . . . . . . . . . . . . . . . .
226,461
Paid-in capital in excess of par value. . . . . . . . . .
226,234,413
---
- -----------
Total Net Assets . . . . . . . . . . . . . . . . . . . $
226,461,174
---
- -----------
---
- -----------
NET ASSET VALUE, offering price and redemption price
per share ($226,461,174 - 226,460,874 shares of
beneficial interest outstanding). . . . . . . . . . . . .
$1.00
---
- -----------
---
- -----------
</TABLE>
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------------------------
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Municipal Income Fund
Statement of Operations
For the Period Ended November 30, 1993 (Unaudited)*
- ------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . $
1,243,332
EXPENSES:
Investment advisory fee (Note 2). . . . . . . . . . . . . $ 138,466
Distribution fee (Note 3) . . . . . . . . . . . . . . . . 115,388
Administration fee (Note 2) . . . . . . . . . . . . . . . 92,310
Legal and audit fees. . . . . . . . . . . . . . . . . . . 17,667
Custodian fees (Note 2) . . . . . . . . . . . . . . . . . 15,550
Directors' fees and expenses (Note 2) . . . . . . . . . . 14,185
Amortization of organization costs (Note 5) . . . . . . . 12,015
Transfer agent fees (Note 2). . . . . . . . . . . . . . . 11,240
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 23,175
Fees waived by investment adviser, administrator and
distributor (Note 2). . . . . . . . . . . . . . . . . . (180,322)
------------
Total Expenses . . . . . . . . . . . . . . . . . . . .
259,674
---
- -----------
NET INVESTMENT INCOME. . . . . . . . . . . . . . . . . . . .
983,658
---
- -----------
NET REALIZED GAIN ON INVESTMENTS SOLD (Note 1) . . . . . . .
300
---
- -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . $
983,958
---
- -----------
---
- -----------
<FN>
_____
* The Lehman Brothers Municipal Income Fund commenced operations on August 2,
1993.
</TABLE>
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Municipal Income Fund
Statement of Changes in Net Assets
- ------------------------------------------
<TABLE>
<CAPTION>
Period
Ended
11/30/93*
(Unaudited)
--------------
<S> <C>
Net investment income. . . . . . . . . . . . . . . . . . . . $ 983,658
Net realized gain on investments sold during the period. . . 300
--------------
Net increase in net assets resulting from operations . . . . 983,958
Distributions to shareholders from net investment income . .
(983,658)
Net increase in net assets from Fund share
transactions (Note 4) . . . . . . . . . . . . . . . . . . 226,410,874
--------------
Net increase in net assets . . . . . . . . . . . . . . . . . 226,411,174
NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . . . . . 50,000
--------------
End of period. . . . . . . . . . . . . . . . . . . . . . . . $ 226,461,174
--------------
--------------
<FN>
_____
* The Lehman Brothers Municipal Income Fund commenced operations on August 2,
1993.
</TABLE>
See Notes to Financial Statements.
<PAGE>
- ------------------------------------------------------------------------------
- --
LEHMAN BROTHERS FUNDS, INC.
Lehman Brothers Municipal Income Fund
Financial Highlights
For a Fund share outstanding throughout the period
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Period
Ended
11/30/93*
(Unaudited)
---------
<S> <C>
Net Asset Value, beginning of period $1.00
---------
Income from investment operations:
Net investment income. . . . . . . . . . . . 0.0071
---------
Less distributions:
Distributions from net investment income (0.0071)
---------
Net Asset Value, end of period . . . . . . . $1.00
---------
Total Return++ . . . . . . . . . . . . . . . 0.72%
---------
---------
Ratios to average net assets/supplemental
data:. . . . . . . . . . . . . . . . . . .
Net assets, end of period (in 000's) . . . . $226,461
Ratios of net investment income to average
net assets . . . . . . . . . . . . . . . . 2.13%**
Ratios of operating expenses to average
net assets+. . . . . . . . . . . . . . . . 0.56%**
_________________________________________________________
<FN>
* The Fund commenced operations on August 2, 1993.
** Annualized.
+ Annualized expense ratio before waiver of fees by the investment adviser,
administrator and distributor for the period ended November 30, 1993 was
0.95%.
++ Total return represents aggregate total return for the period indicated.
</TABLE>
See Notes to Financial Statements.
<PAGE>
Lehman Brothers Funds, Inc.
Lehman Brothers Daily Income Fund
Lehman Brothers Municipal Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Lehman Brothers Funds, Inc. (the "Company") was incorporated under the
laws of the State of Maryland on May 5, 1993. It is an open-end management
investment company, which consists of two funds: Lehman Brothers Daily Income
Fund ("Daily Income Fund") and Lehman Brothers Municipal Income Fund
("Municipal Income Fund") (the "Funds"). The following is a summary of
significant accounting policies consistently followed by the Funds in the
preparation of their financial statements.
PORTFOLIO VALUATION: Securities are valued at amortized cost which
approximates market value. Amortized cost valuation involves valuing a
security
at cost initially and, thereafter, assuming a constant amortization to
maturity
of any discount or premium, regardless of the effect of fluctuating interest
rates on the market value of the security.
REPURCHASE AGREEMENTS: The Funds may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund
takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding
period.
This arrangement results in a fixed rate of return that is not subject to
market fluctuations during the Fund's holding period. The value of the
collateral is at least equal at all times to the total amount of the
repurchase
obligations, including interest. In the event of counterparty default, the
Fund
has the right
to use the collateral to offset losses incurred. There is potential loss to
the
Fund in the event the Fund is delayed or prevented from exercising its rights
to dispose of the collateral securities, including the risk of a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights. The Funds review the value of the collateral
and the creditworthiness of those banks and dealers with which the Funds enter
into repurchase agreements to evaluate potential risks.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are
recorded as of the trade date. Realized gains and losses on investments sold
are recorded on the basis of identified cost. Interest income is recorded on
the accrual basis.
FEDERAL INCOME TAXES: The Funds intend to qualify as regulated investment
companies by complying with the requirements of the Internal Revenue Code of
1986, as amended and applicable to regulated investment companies and by
distributing substantially all of their taxable income to their shareholders.
Therefore, no Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net
investment
income of each Fund are declared daily and paid monthly. Capital gains, unless
offset by any available capital loss carryforward, are distributed to
shareholders annually after the close of the fiscal year in which earned or
more frequently to maintain the Fund's net asset value of $1.00 per share. In
order to avoid the application of a 4% nondeductible excise tax on certain
undistributed amounts of ordinary income and capital gains, the Fund may make
additional distribution of any undistributed ordinary income or capital gains
before each
-1-
<PAGE>
Lehman Brothers Funds, Inc.
Lehman Brothers Daily Income Fund
Lehman Brothers Municipal Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
December 31, and expects to make any other distributions as are necessary to
avoid the application of this tax.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY
TRANSACTIONS
Lehman Brothers Global Asset Management Inc. ("LBGAM"), serves as each
Fund's investment adviser pursuant to separate investment advisory agreements.
LBGAM is a wholly owned subsidiary of Lehman Brothers Holdings Inc.
("Holdings"). All of the issued and outstanding common stock (representing 92%
of the voting stock) of Holdings is held by American Express Company
("American
Express"). The remainder of Holding's voting stock is owned by Nippon Life
Insurance Company. Under the investment advisory agreements, each Fund pays a
monthly fee at an annual rate of 0.30% of the value of such Fund's respective
average daily net assets. For the period ended November 30, 1993, LBGAM waived
fees of $333,872 and $88,808 for the Daily Income Fund and the Municipal
Income
Fund, respectively.
The Boston Company Advisors, Inc. ("Boston Advisors"), an indirect wholly
owned subsidiary of Mellon Bank Corporation, ("Mellon") serves as the Funds'
administrator pursuant to an administration agreement. Under the
administration
agreement each Fund pays a monthly fee at the annual rate of 0.20% of the
value
of its respective average daily net assets. For the period ended November 30,
1993, Boston Advisors waived fees of $222,582 and $59,205 for the Daily Income
Fund and Municipal Income Fund, respectively.
No employee of Lehman Brothers, LBGAM, Boston Advisors or of any parent,
subsidiary or affiliate thereof receives any compensation from the Company for
serving as an officer or Director of the Company. The Company pays each
Director who is not an officer or employee of Lehman Brothers, LBGAM or Boston
Advisors or any parent, subsidiary, or affiliate thereof $20,000 per annum,
plus $500 per meeting attended, and reimburses each such Director for travel
and out-of-pocket expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned
subsidiary
of Mellon, serves as the Funds' custodian. The Shareholder Services Group,
Inc.
("TSSG"), a subsidiary of First Data Corporation ("FDC"), serves as the Funds'
transfer agent. American Express retains a 21.5% interest in FDC.
3. DISTRIBUTION ARRANGEMENTS
Lehman Brothers acts as distributors of Fund shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company has adopted a plan
of distribution (the "Plan of Distribution") with respect to each Fund. Under
the Plan of Distribution each Fund compensates Lehman Brothers monthly for
advertising, marketing and distributing its shares, at an annual rate of 0.25%
of the value of its respective average daily net assets. For the period ended
November 30, 1993, Lehman Brothers waived fees of $109,063 and $32,309 for the
Daily Income Fund and the Municipal Income Fund, respectively.
4. SHARES OF CAPITAL STOCK
The Board of Directors have authority to issue 10,000,000,000 shares of
capital stock ($0.001 par value). Since the Funds have sold shares, issued
shares as reinvestments of dividends and redeemed shares only at a
-2-
<PAGE>
Lehman Brothers Funds, Inc.
Lehman Brothers Daily Income Fund
Lehman Brothers Municipal Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
constant net asset value of $1 per share, the number of shares represented by
such sales, reinvestments and redemptions is the same as the amounts shown
below for such transactions.
The Table below summarizes transactions of the Daily Income Fund:
Table>
[CAPTION]
PERIOD ENDED
11/30/93*
[S] [C]
Sold . . . . . . . . . . . . . . $1,579,302,037
Dividend Reinvestment. . . . . . 3,186,563
Redeemed . . . . . . . . . . . . (749,264,435)
--------------
Net increase . . . . . . . . . . $ 833,224,165
--------------
--------------
[FN]
__________________
*The Daily Income Fund commenced operations on August 2, 1993.
The Table below summarizes transactions of the Municipal Income Fund:
<TABLE>
<CAPTION>
PERIOD ENDED
11/30/93*
<S> <C>
Sold . . . . . . . . . . . . . . $ 403,149,759
Dividend Reinvestment. . . . . . 769,235
Redeemed . . . . . . . . . . . . (177,508,120)
--------------
Net increase . . . . . . . . . . $ 226,410,874
--------------
--------------
<FN>
__________________
*The Municipal Income Fund commenced operations on August 2, 1993.
</TABLE>
5. ORGANIZATION COSTS
The Funds bear all costs in connection with their organization including
fees and expenses of registering and qualifying their shares for distribution
under Federal and state securities regulations. All such costs are being
amortized on the straight-line method over a period of five years from the
commencement of operations of the Funds. In the event that any of the initial
shares of the Funds are redeemed during such amortization period, the Funds
will be reimbursed for any unamortized organization costs in the same
proportion as the number of shares redeemed bears to the number of initial
shares held at the time of redemption.
-3-
LEHMAN BROTHERS FUNDS, INC.
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Included in Part A:
None
(2) Included in Part B:
Portfolio of Investments
Statement of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Financial Highlights
(b) Exhibits:
Exhibit
Number Description
1
- --
Amended Articles of Incorporation of
Registrant are incorporated by reference
to the Registrant's Registration
Statement filed with the Securities and
Exchange Commission ("SEC") on Form N-1A
(the "Registration Statement") on May 6,
1993.
2
- --
By-Laws of Registrant are incorporated by
reference to Registrant's Pre-Effective
Amendment No. 1 to the Registration
Statement filed on July 22, 1993.
3
- --
Not Applicable.
4
- --
Specimen Certificate of Shares of Capital
Stock are incorporated by reference to
Registrant's Pre-Effective Amendment No.
1 to the Registration Statement filed
with the SEC on July 22, 1993
5
- --
Form of Investment Advisory Agreement
between Registrant and Lehman Brothers
Global Asset Management Inc. relating to
each Fund is incorporated by reference to
Registrant's Pre-Effective Amendment No.
1 to the Registration Statement filed
with the SEC on July 22, 1993
6
- --
Form of Distribution Agreement between
Registrant and Lehman Brothers Inc.
relating to each Fund is incorporated by
reference to Registrant's Pre-Effective
Amendment No. 1 to the Registration
Statement filed with the SEC on July 22,
1993
7
- --
Not Applicable.
8(a)
- --
Form of Custodian Agreement between
Registrant and Boston Safe Deposit and
Trust Company is incorporated by
reference to Registrant's Pre-Effective
Amendment No. 1 to the Registration
Statement filed with the SEC on July 22,
1993
9(a)
- --
Form of Administration Agreement between
Registrant and The Boston Company
Advisors, Inc is incorporated by
reference to Registrant's Pre-Effective
Amendment No. 1 to the Registration
Statement filed with the SEC on July 22,
1993
9(b)
- --
Form of Transfer Agency Agreement between
Registrant and The Shareholder Services
Group, Inc is incorporated by reference
to Registrant's Pre-Effective Amendment
No. 1 to the Registration Statement filed
with the SEC on July 22, 1993
10
- --
Opinion and Consent of Piper & Marbury is
incorporated by reference to Registrant's
Pre-Effective Amendment No. 2 to the
Registration Statement filed with the SEC
on July 27, 1993
11
- --
Consent of independent auditors is filed
herein
12
- --
Not Applicable.
13
- --
Form of Share Purchase Agreement between
Registrant and Lehman Brothers Inc is
incorporated by reference to Registrant's
Pre-Effective Amendment No. 1 to the
Registration Statement filed with the SEC
on July 22, 1993
14
- --
Not Applicable.
15
- --
Form of Plan of Distribution incorporated
by reference to Registrant's Pre-
Effective Amendment No. 1 to the
Registration Statement filed with the SEC
on July 22, 1993
16
- --
No Applicable.
18(a
)
- --
Powers of Attorney of Mr. Dorsett and Ms.
Holmes are incorporated by reference to
Registrant's Pre-Effective Amendment No.
2 to the Registration Statement filed
with the SEC on July 27, 1993
18(b
)
Power of Attorney of Mr Hatsopoulos is
filed herein
________________________
Item 25. Persons Controlled by or under Common Control with
Registrant
None
Item 26. Number of Holders of Securities
Title of Class
Common Stock, par value
$.001 per share
Holders as of January 5, 1994
FUND
Lehman Brothers Daily Income Fund 52,266.00
(Class A)
Lehman Brothers Municipal Income Fund 3,201.00
(Class B)
Item 27. Indemnification
Reference is made to Articles VII and VIII of Registrant's Amended
Articles of Incorporation filed as Exhibit 1 to the Registration
Statement, Article V of Registrant's By-Laws filed as Exhibit 2 to Pre-
Effective Amendment No. 2to the Registration Statement, and paragraph 4
of the Distribution Agreement filed as Exhibit 6 to Pre-Effective
Amendment No. 2 to the Registration Statement
Response to Item 27 is incorporated by reference to Registrant's
Pre-Effective Amendment No. 2 to the Registration Statement filed with
the SEC on July 27, 1993.
Item 28. Business and Other Connections of Investment Adviser
Lehman Brothers Global Asset Management Inc. ("LBGAM"), which
serves as investment adviser to the Registrant's portfolios, is a wholly
owned subsidiary of Lehman Brothers Holdings Inc. ("Holdings"). All of
the issued and outstanding common stock of Holdings (representing 92% of
the voting stock) is held by American Express Company. LBGAM is an
investment adviser registered under the Investment Advisers Act of 1940
(the "Advisers Act") and serves as investment counsel for individuals
with substantial capital, executors, trustees and institutions. It also
serves as investment adviser, sub-investment adviser, administrator or
sub-administrator to numerous investment companies.
The list required by this Item 28 of officers and directors of
LBGAM, together with information as to any other business profession,
vocation or employment of a substantial nature engaged in by such
officers and directors during the past two years, is incorporated by
reference to Schedules A and D of Form ADV filed by LBGAM pursuant to
the Advisers Act (SEC File No. 801-42006).
Item 29. Principal Underwriters
(a) In addition to acting as Distributor for the shares of the
Registrant's Funds, Lehman Brothers currently acts as distributor for
Lehman Brothers Institutional Funds Group Trust, The USA High Yield Fund
N.V., The Latin American Bond Fund N.V., Mexican Short-Term Investment
Portfolio N.V., Garzarelli Sector Analysis Portfolio N.V., The Mexican
Appreciation Fund N.V., The Mexico Premium Income Portfolio N.V., U.S.
Money Market Investments N.V., ECU Fixed-Income Investments N.V., U.S.
Government Securities Investments N.V., Global Bond Investments N.V.,
U.S. Appreciation Fund N.V., European Equity Investments N.V., Pacific
Equity Investments N.V., Japanese Yen Portfolio N.V., Deutsche Mark
Portfolio N.V., U.S. Money Market Fund N.V., Lehman Brothers Series I
Mortgage-Related Securities Portfolio N.V., TBC Enhanced Tactical Asset
Allocation Portfolio N.V., U.S. Tactical Asset Allocation Portfolio
N.V., Short-Term World Income Portfolio (Cayman Islands), TBC Portfolio
of Fixed-Income Securities, U.S. Tactical Asset Allocation Portfolio
N.V., The Global Advisors Portfolio N.V., The Asian Dragon Portfolio
N.V. and various series of unit investment trusts.
(b) Lehman Brothers is a wholly-owned subsidiary of Holdings.
The information required by this Item 29 with respect to each director,
officer and partner of Lehman Brothers is incorporated by reference to
Schedule A of Form BD filed by Lehman Brothers pursuant to the
Securities Exchange Act of 1934 (SEC File No. 8-12324).
(c) Not Applicable.
Item 30. Location of Accounts and Records
(1) Lehman Brothers Funds, Inc.
One Exchange Place
Boston, Massachusetts 02109
(2) Lehman Brothers Global Asset Management Inc.
3 World Financial Center
200 Vesey Street
New York, New York 10285
(3) The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
(4) Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 02108
(5) The Shareholder Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
Item 31. Management Services
Not Applicable
Item 32. Undertakings
Registrant hereby undertakes as follows:
The Registrant hereby undertakes to furnish to each person to whom
a prospectus of any series of the Registrant is delivered a copy of the
Registrant's latest annual report, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant certifies
that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in the City of
New York and State of New York, on the 13th day of January, 1994.
LEHMAN BROTHERS FUNDS, INC.
Registrant
By: /s/ Clint Kendrick
Clint Kendrick, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Steven Spiegel Director and Chairman of the Board January 13,
1994
Steven Spiegel
/s/ Vincent Nave Treasurer and Chief Financial Officer January 13,
1994
Vincent Nave
/s/ Burt N. Dorsett * Director January 13, 1994
Burt N. Dorsett
/s/ John Hatsopoulos * Director January 13, 1994
John Hatsopoulos
/s/ Kathleen C. Holmes * Director January 13, 1994
Kathleen C. Holmes
/s/ Steven Spiegel
* Steven Spiegel, Attorney-in-Fact
/s/ Clint Kendrick President(Principal January 14, 1994
Executive Officer)
SHARED\GLOBAL\LEHMANBROS\PEA'S\11394\N-1A.DOC
SHARED\GLOBAL\LEHMANBROS\PEA'S\11394\N-1A.DOC
CONSENT OF ERNST & YOUNG INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Auditors"
in the Statement of Additional Information and to the use of our
report dated July 15, 1993 with respect to the statement of assets
and liabilities of Lehman Brothers Daily Income Fund and Lehman
Brothers Municipal Income Fund (Portfolios of Lehman Brothers
Funds, Inc.) incorporated by reference in Post-Effective Amendment
No. 1 to the Registration Statement Number 33-62312 on Form
N-1A of Lehman Brothers Funds, Inc.
/s/ Ernst & Young
Ernst & Young
Boston, Massachusetts
January 12, 1994
