-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BbzyLkg9N7YBEqw9/IV/IjG4bw1k9g7p0ldn9FNdAs0a6Mh4gb7rY/3UXOx9dATV H5pMlUyRGJUp2q6WrvLSbA== /in/edgar/work/20000616/0000806085-00-000049/0000806085-00-000049.txt : 20000919 0000806085-00-000049.hdr.sgml : 20000919 ACCESSION NUMBER: 0000806085-00-000049 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20000531 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEHMAN BROTHERS HOLDINGS INC CENTRAL INDEX KEY: 0000806085 STANDARD INDUSTRIAL CLASSIFICATION: [6211 ] IRS NUMBER: 133216325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09466 FILM NUMBER: 656400 BUSINESS ADDRESS: STREET 1: AMERICAN EXPRESS TWR STREET 2: 3 WORLD FINANCIAL CNTR CITY: NEW YORK STATE: NY ZIP: 10285 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: AMERICAN EXPRESS TOWER 15TH FL STREET 2: 2 WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 8-K 1 0001.txt LEHMAN BROTHERS HOLDINGS INC. 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): June 16, 2000 LEHMAN BROTHERS HOLDINGS INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 1-9466 13-3216325 (Commission File Number) (IRS Employer Identification No.) 3 World Financial Center New York, New York 10285 (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: (212) 526-7000 Item 5. Other Events Second Quarter Earnings On June 16, 2000 Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its second quarter 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 Second Quarter 2000 Earnings 99.2 Consolidated Statement of Income (Three Months Ended May 31, 2000) (Preliminary and Unaudited) 99.3 Consolidated Statement of Income (Six Months Ended May 31, 2000) (Preliminary and Unaudited) 99.4 Segment Information (Three and Six Months Ended May 31, 2000) (Preliminary and Unaudited) 99.5 Selected Statistical Information (Preliminary and Unaudited) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. LEHMAN BROTHERS HOLDINGS INC. By: /s/ David Goldfarb David Goldfarb Chief Financial Officer (Principal Financial Officer) Date: June 16, 2000 EXHIBIT INDEX Exhibit No. Exhibit Exhibit 99.1 Press Release Relating to Second Quarter 2000 Earnings Exhibit 99.2 Consolidated Statement of Income (Three Months Ended May 31, 2000) (Preliminary and Unaudited) Exhibit 99.3 Consolidated Statement of Income (Six Months Ended May 31, 2000) (Preliminary and Unaudited) Exhibit 99.4 Segment Information (Three and Six Months Ended May 31, 2000) (Preliminary and Unaudited) Exhibit 99.5 Selected Statistical Information (Preliminary and Unaudited) EX-99.1 2 0002.txt EXHIBIT 99.1 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. - more - 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. - more - 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 - more - 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. # # # Financial Statements Attached EX-99.2 3 0003.txt EXHIBIT 99.2 EXHIBIT 99.2 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF INCOME (Preliminary and Unaudited) (In millions, except per share data)
Three Months Ended ---------------------------------------- Percentage of May 31 May 31 Dollar Change 2000 1999 Inc/(Dec) -------------- ------------- ------------- Revenues: Principal transactions $ 870 $ 685 Investment banking 480 445 Commissions 226 168 Interest and dividends 4,738 3,627 Other 20 7 ------- -------- Total revenues 6,334 4,932 Interest expense 4,579 3,477 ----- ----- Net revenues 1,755 1,455 21% ----- ----- Non-interest expenses: Compensation and benefits 912 738 Technology and communications 85 81 Brokerage and clearance fees 62 61 Business development 42 30 Professional fees 43 28 Occupancy 32 28 Other 21 23 ------- ---- Total non-interest expenses 1,197 989 21% ----- --- Income from operations before taxes and dividends on trust preferred securities 558 466 Provision for income taxes 166 126 Dividends on trust preferred securities 14 10 ------- ------- Net income $ 378 $ 330 15% ===== ===== Net income applicable to common stock $ 366 $ 268 37% ===== ===== Earnings per common share Basic $2.97 $2.19 ===== ===== Diluted $2.78 $2.09 ===== =====
EX-99.3 4 0004.txt EXHIBIT 99.3 EXHIBIT 99.3 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF INCOME (Preliminary and Unaudited) (In millions, except per share data)
Six Months Ended ---------------------------------------- Percentage of May 31 May 31 Dollar Change 2000 1999 Inc/(Dec) -------------- ------------- ------------- Revenues: Principal transactions $ 1,984 $ 1,219 Investment banking 1,082 758 Commissions 455 314 Interest and dividends 9,051 7,208 Other 102 24 -------- -------- Total revenues 12,674 9,523 Interest expense 8,717 6,950 ----- ----- Net revenues 3,957 2,573 54% ----- ----- Non-interest expenses: Compensation and benefits 2,057 1,305 Technology and communications 169 163 Brokerage and clearance fees 120 119 Business development 77 58 Professional fees 75 50 Occupancy 62 56 Other 45 47 ------- ------- Total non-interest expenses 2,605 1,798 45% ----- ----- Income from operations before taxes and dividends on trust preferred securities 1,352 775 Provision for income taxes 405 222 Dividends on trust preferred securities 28 13 ------- ------- Net income $ 919 $ 540 70% ===== ===== Net income applicable to common stock $ 848 $ 466 82% ===== ===== Earnings per common share Basic $6.87 $3.82 ===== ===== Diluted $6.46 $3.66 ===== =====
EX-99.4 5 0005.txt EXHIBIT 99.4 EXHIBIT 99.4 LEHMAN BROTHERS HOLDINGS INC. SEGMENT INFORMATION (Preliminary and Unaudited) (In millions)
Three Months Ended Six Months Ended ----------------------------------- ------------------------------------ May 31 May 31 May 31 May 31 2000 1999 2000 1999 ---------------- ---------------- ---------------- ---------------- Investment Banking: Advisory 128 135 307 235 Equity 227 126 488 185 Debt 116 174 269 324 ---------------- ---------------- ---------------- ---------------- Total 471 435 1,064 744 ---------------- ---------------- ---------------- ---------------- Capital Markets: Equity 707 433 1,575 639 Fixed Income 375 445 846 926 ---------------- ---------------- ---------------- ---------------- Total 1,082 878 2,421 1,565 ---------------- ---------------- ---------------- ---------------- Client Services: Private Client 192 136 452 255 Private Equity 10 6 20 9 ---------------- ---------------- ---------------- ---------------- Total 202 142 472 264 ---------------- ---------------- ---------------- ---------------- Total Lehman 1,755 1,455 3,957 2,573 ================ ================ ================ ================
EX-99.5 6 0006.txt EXHIBIT 99.5 EXHIBIT 99.5 LEHMAN BROTHERS HOLDINGS INC. SELECTED STATISTICAL INFORMATION (Preliminary and Unaudited) (Dollars in millions, except per share data)
Quarters Ended ------------ ------------ -------------- ------------- ------------ ------------- 5/31/00 2/29/00 11/30/99 8/31/99 5/31/99 2/28/99 - -------------------------------------------------- ------------ ------------ -------------- ------------- ------------ ------------- Income Statement Net Revenues $1,755 $2,202 $1,411 $1,356 $1,455 $1,118 Non-Interest Expenses: Compensation and Benefits 912 1,145 715 688 738 567 Nonpersonnel Expenses 285 263 258 251 251 242 Net Income 378 541 301 290 330 211 Net Income Applicable to Common Stock 366 482 292 279 268 198 Earnings per Common Share Basic $2.97 $3.92 $2.41 $2.30 $2.19 $1.62 Diluted $2.78 $3.69 $2.28 $2.20 $2.09 $1.57 Financial Ratios (%) Return on Common Equity (annualized) (a) 24.0 36.8 21.6 22.1 26.3 17.2 Return on Common Equity (annualized) (b) 24.0 33.3 21.6 22.1 22.1 17.2 Pretax Operating Margin 31.8 36.1 31.1 30.8 32.0 27.6 Compensation & Benefits/ Net Revenues 52.0 52.0 50.7 50.7 50.7 50.7 Effective Tax Rate 29.7 30.1 28.0 27.0 27.0 31.0 Balance Sheet Total Assets $234,000 $214,000 $192,244 $202,149 $191,543 $179,305 Total Assets Excluding Matched Book (c) 152,000 137,000 130,022 136,106 128,822 121,881 Common Stockholders' Equity 6,246 5,986 5,595 5,192 4,935 4,731 Total Stockholders' Equity + Trust Preferred Securities 7,806 7,296 6,993 6,660 6,453 5,964 Total Capital (d) 41,383 39,610 37,684 36,517 34,915 32,682 Book Value per Common Share (e) 51.19 48.79 45.50 42.91 40.58 38.72 Other Data (#s) Employees 9,343 9,026 8,893 8,729 8,511 8,695 Common Stock Outstanding 121,708,431 120,150,218 119,912,810 120,070,089 119,700,830 118,977,746 Average Shares Basic 123,172,650 123,027,441 120,761,065 121,317,358 122,144,018 121,942,892 Diluted (f) (g) 132,632,845 131,205,984 128,994,372 129,063,197 130,364,705 125,776,277
(a) Return on common equity calculated using net income before adjusting for special preferred dividends. (b) Return on common equity calculated using net income after adjusting for special preferred dividends. (c) Matched book is defined as the lower of securities purchased under agreements to resell or securities sold under agreements to repurchase. (d) Total capital includes long-term debt, Trust Preferred Securities and stockholders' equity. (e) This calculation includes restricted stock units granted under the Lehman Stock Award Programs included in stockholders' equity. (f) For the quarters ended November 30, August 31 and May 31, 1999, the assumed conversion of Series A and B Convertible Preferred Stock into 2,118,396, 2,607,680 and 2,912,505 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 2,779,737 common shares had the effect of decreasing diluted earnings per share by $0.04. (g) For the quarters ended May 31, and February 29, 2000, the assumed conversion of Series A and B convertible Preferred Stock into 1,219,188 and 1,219,302 common shares had the effect of decreasing diluted earnings per share by $0.01 and $0.02. -----END PRIVACY-ENHANCED MESSAGE-----