-----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, LAxa9LZC+WDshjiZt7g/CdWwbaeGoKrpBjjdxXPtgGdUV8CTZrh32PzZFvn5RN7V /4kM2a947b8JlrgTRAR/zA== 0000806085-02-000205.txt : 20021219 0000806085-02-000205.hdr.sgml : 20021219 20021219162027 ACCESSION NUMBER: 0000806085-02-000205 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20021219 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEHMAN BROTHERS HOLDINGS INC CENTRAL INDEX KEY: 0000806085 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133216325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09166 FILM NUMBER: 02863263 BUSINESS ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 8-K 1 f02-12_198k.txt FORM 8K 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): December 19, 2002 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.) 745 Seventh Avenue New York, NY 10019 (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: (212) 526-7000 Item 5. Other Events Earnings Release On December 19, 2002, Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its earnings for the fourth fiscal quarter and the full fiscal year ended November 30, 2002 (the "Earnings Release"). A copy of the Earnings Release follows as Exhibits 99.1 through 99.5 hereto. Item 7. Financial Statements and Exhibits (c) Exhibits The following Exhibits are filed as part of this Report. Exhibit 99.1 Press Release Relating to Fourth Fiscal Quarter and Fiscal Year 2002 Earnings Exhibit 99.2 Selected Statistical Information (Preliminary and Unaudited) Exhibit 99.3 Consolidated Statement of Income Three Months Ended November 30, 2002 and 2001 (Preliminary and Unaudited) Exhibit 99.4 Consolidated Statement of Income Twelve Months Ended November 30, 2002 and 2001 (Preliminary and Unaudited) Exhibit 99.5 Segment Net Revenue Information Three and Twelve Months Ended November 30, 2002 and 2001 (Preliminary and Unaudited) 2 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. (Registrant) Date: December 19, 2002 By: /s/ David Goldfarb ------------------------------- David Goldfarb Chief Financial Officer (Principal Financial Officer) 3 EXHIBIT INDEX Exhibit 99.1 Press Release Relating to Fourth Fiscal Quarter and Fiscal Year 2002 Earnings Exhibit 99.2 Selected Statistical Information (Preliminary and Unaudited) Exhibit 99.3 Consolidated Statement of Income Three Months Ended November 30, 2002 and 2001 (Preliminary and Unaudited) Exhibit 99.4 Consolidated Statement of Income Twelve Months Ended November 30, 2002 and 2001 (Preliminary and Unaudited) Exhibit 99.5 Segment Net Revenue Information Three and Twelve Months Ended November 30, 2002 and 2001 (Preliminary and Unaudited) 4 EX-99 3 f02-12_198kexh991.txt EXHIBIT 99.1 PRESS RELEASE EXHIBIT 99.1 For Immediate Release Media Contact: Hannah Burns 212-526-4064 Investor Contact: Shaun Butler 212-526-8381 LEHMAN BROTHERS REPORTS NET INCOME OF $243 MILLION, OR $0.91 PER COMMON SHARE FOR THE FOURTH QUARTER RESULTS UP SIGNIFICANTLY FROM BOTH FOURTH QUARTER 2001 AND THIRD QUARTER 2002 NEW YORK, December 19, 2002 - Lehman Brothers Holdings Inc. (NYSE: LEH) today reported net income of $243 million, or $0.91 per common share (diluted) for the fourth quarter ended November 30, 2002, compared to $130 million, or $0.46 per common share (diluted) in the fourth quarter of fiscal 2001. For the full year of fiscal 2002, the Firm reported net income of $1.03 billion, or $3.68 per common share (diluted) compared to $1.26 billion, or $4.38 per common share (diluted) for fiscal 2001. 2002 Business Highlights o International Financing Review named Lehman Brothers "Bank of the Year 2002." o Market share increases globally in M&A and most products within debt and equity origination. o Lehman Brothers' U.S. Research ranked #1 overall by Institutional Investor: #1 in Fixed Income Research and #2 in Equity Research. o Lehman Brothers' Fixed Income Trading ranked #2 by Institutional Investor. 1 The results for the fourth quarter and full year fiscal 2002 reflect the impact of two special items: a net pre-tax gain of $108 million associated with September 11 related costs and insurance settlement proceeds; and a $128 million pre-tax charge related to decisions in the quarter to reconfigure certain global real estate. The net pre-tax effect of these two items is a charge of $20 million, or $0.09 per common share after-tax (diluted). Fiscal 2001 fourth quarter results reflect the adverse effect of the events of September 11, which resulted in the displacement and relocation of the Firm's New York employees located in lower Manhattan, including a special pre-tax charge of $127 million, or $0.27 per common share after-tax (diluted). Richard S. Fuld, Jr., chairman and chief executive officer, said, "These results highlight the Firm's ability to deliver attractive returns to shareholders across the market cycle. Although the environment has been difficult, the Firm's competitive position has never been stronger. We continue to gain market share by improving our ability to deliver our global platform to our clients. Our strategy is working." Mr. Fuld noted that the Firm has benefited during the year from a balanced mix of businesses. Net revenues (total revenues less interest expense) for the fourth quarter of fiscal 2002 were $1.54 billion, a 14% increase from $1.35 billion for the third quarter of fiscal 2002 and a 28% increase from $1.20 billion for the same period of fiscal 2001. For the full fiscal year of 2002, revenues were $6.16 billion, a 9% decrease from $6.74 billion in the same period a year ago. A record performance for the second consecutive year in Fixed Income Capital Markets businesses, driven by strong institutional flow as clients repositioned their portfolios into more defensive asset classes, was partially offset by the impact of lackluster equity origination and merger and acquisition volumes. Nonpersonnel expenses for the fourth quarter of fiscal 2002 were $400 million, compared with $391 million in the prior quarter. Compensation and benefits expenses were $785 million for the fourth quarter of fiscal 2002, compared to $687 million in the third quarter of 2002. Compensation and benefits as a percentage of net revenues remained at 51%. For the full 12 months of 2002, nonpersonnel expenses were $1.52 billion, compared with $1.42 billion in fiscal 2001. 2 The Firm recognized a net gain of $108 million (pre-tax) during the fiscal 2002 fourth quarter relating to September 11. The net gain reflects the finalization of the Firm's insurance claim, partially offset by costs associated with decisions made during the quarter to dispose of excess space in the New York City area resulting from occupancy actions the Firm took following September 11. In addition, the Firm recognized a charge of $128 million (pre-tax) associated with decisions to reconfigure certain other global real estate. This charge principally includes the costs associated with its decision to exit its current facilities in London as the Firm readies itself for the relocation of its European headquarters to its new Canary Wharf facility. This relocation provides the Firm with productivity opportunities as it consolidates from several locations into one principle headquarters location, while establishing state-of-the-art technology and communication capabilities with clients and customers. For the fiscal 2002 fourth quarter, the Firm's pre-tax operating margin was 22%, compared with 10% percent in the fourth quarter of fiscal 2001 and 20% in the previous quarter. Return on common equity was 11.2% for the quarter ended November 30, 2002, compared with 6.3% percent a year ago and 8.9% for the previous quarter of fiscal 2002. For fiscal 2002, the Firm's pre-tax operating margin was 24%, compared with 26% for fiscal 2001. Return on common equity was 11.9% for the year ended November 30, 2002, compared with 15.9% in fiscal 2001. Return on common equity for all periods is calculated after adjusting for a special preferred dividend, where applicable. Before giving effect to the special preferred dividend, return on common equity was 12.2% for fiscal 2002 and 16.5% for fiscal 2001. As of November 30, 2002, Lehman Brothers' stockholders' equity and trust preferred securities were $9.7 billion and total capital (stockholders' equity, trust preferred, and long-term debt) was approximately $48.4 billion. Book value per common share was $34.38. 3 Earnings per share calculations for 2002 and 2001 include the impact of a special preferred dividend of $25 million in the first quarter of 2002 and $50 million in the second quarter of 2001 on the Redeemable Voting Preferred Stock which was owned by American Express Company and Nippon Life Insurance Company. American Express and Nippon Life were entitled to receive an annual non-cumulative preferred dividend equal to 50% of the amount by which the Firm's net income for the full fiscal year exceeded $400 million, up to a maximum of $50 million per year. This Redeemable Voting Preferred Stock has been redeemed; the final special preferred dividend was 50% of the amount by which the Firm's net income in the first half of fiscal 2002 exceeded $200 million, up to a maximum of $25 million. Lehman Brothers (ticker symbol 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 Statements Following 4 Conference Call A conference call, to discuss the Firm's financial results and outlook, will be held at 9:30 a.m., EST on Thursday, December 19. Members of the public who would like to access the conference call should dial, from the United States, 800-779-9312 or from outside the U.S., 712-257-3094. The pass code for all callers is LEHMAN. The conference call will also be accessible through the "Shareholders" section of the Firm's Web site under the subcategory "Webcasts." For those unable to listen to the live broadcast, a replay will be available on the Firm's Web site or by dialing 800-756-3031 (domestic) or 402-998-0792 (international). The replay will be available approximately one hour after the event. The conference call replay will remain available until 3:30 p.m., EST on January 10, 2003. 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, which may include market, credit or counterparty, liquidity, legal, and operational risks. 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. 5 EX-99 4 f02-12_198kexh992.txt EXHIBIT 99.2 SELECTED STATISTICAL INFORMATION EXHIBIT 99.2 LEHMAN BROTHERS HOLDINGS INC. SELECTED STATISTICAL INFORMATION (Preliminary and Unaudited) (Dollars in millions, except per share data)
Twelve Months Ended Quarters Ended ----------------------------------------------------------- ----------------------------------------------------------- 2002 2001 11/30/02 8/31/02 5/31/02 2/28/02 11/30/01 ----------------------------------------------------------- Income Statement Net Revenues $6,155 $6,736 $1,539 $1,347 $1,663 $1,606 $1,203 Non-Interest Expenses: Compensation and Benefits 3,139 3,437 785 687 848 819 615 Nonpersonnel Expenses 1,517 1,424 400 391 379 347 345 September 11, 2001 related (recoveries)/expenses, net (108) 127 (108) - - - 127 Other real estate reconfiguration costs 128 - 128 - - - - Net Income (a) 1,031 1,255 243 194 296 298 130 Net Income Applicable to Common Stock 962 1,161 232 183 285 262 119 Earnings per Common Share (b) Basic $3.92 $4.77 $0.95 $0.74 $1.16 $1.07 $0.49 Diluted $3.68 $4.38 $0.91 $0.70 $1.08 $0.99 $0.46 Financial Ratios (%) Return on Common Equity (annualized) (c) 11.9% 15.9% 11.2% 8.9% 14.1% 13.4% 6.3% Return on Common Equity (annualized, excluding the special preferred dividends, where applicable) (d) 12.2% 16.5% 11.2% 8.9% 14.1% 14.6% 6.3% Pretax Operating Margin (e) 24.0% 26.0% 21.7% 20.0% 26.2% 27.4% 9.6% Compensation & Benefits/Net Revenues 51.0% 51.0% 51.0% 51.0% 51.0% 51.0% 51.1% Effective Tax Rate (f) 26.5% 25.0% 23.1% 22.6% 29.0% 29.0% (24.4)% Balance Sheet Total Assets $260,000$265,213$267,787$260,061$247,816 Total Assets Excluding Matched Book (g) 165,000 159,879 173,671 168,850 164,538 Common Stockholders' Equity 8,298 8,209 8,206 7,948 7,759 Total Stockholders' Equity + Preferred Securities Subject to 9,708 9,619 9,616 Mandatory Redemption 9,358 9,169 Total Capital (h) 48,385 48,530 46,259 47,343 47,470 Net Leverage (i) 17.0x 16.6x 18.1x 18.0x 17.9x Book Value per Common Share (j) 34.38 33.49 33.22 32.47 31.81 Other Data (#s) Employees 12,343 12,980 12,694 12,851 13,090 Common Stock Outstanding (in millions) 231.1 239.0 243.6 244.2 237.5 Weighted Average Shares (in millions) Basic 245.4 243.1 243.9 246.7 245.8 245.3 241.9 Diluted 261.2 265.3 255.1 261.0 263.5 265.2 261.6
(a) Fourth quarter 2002 net income includes a $22 million after tax charge ($128 million pre-tax charge related to the reconfiguration of certain of the Firm's global real estate, less $108 million pretax gain from September 11th related (recoveries)/expenses, net). Fourth quarter 2001 net income includes a $71 million after tax charge ($127 million pre-tax) for September 11th related (recoveries)/expenses, net. (b) For the year and quarter ended November 30, 2002 basic EPS and fully diluted EPS was reduced by $.09, respectively, as a result of the other real estate charge and September 11th related (recoveries)/expenses, net. For the year and quarter ended November 30, 2001 basic EPS was reduced $0.29 and $0.30 and fully diluted EPS was reduced by $0.26 and $0.27, respectively, as a result of September 11th related (recoveries)/expenses, net. (c) For the year and quarter ended November 30, 2002, the Company's return on common equity was reduced by 0.3% and 1.1%, as a result of the other real estate charge and September 11th 2001 related (recoveries)/expenses, net. For the year and quarter ended November 30, 2001, the Company's return on common equity was reduced by 1.0% and 3.7%, respectively as a result of the September 11th related (recoveries)/expenses, net. (d) Return on common equity calculated using net income before adjusting for special preferred dividends of $25 million in the first quarter of 2002 and $50 million in the second quarter of 2001. These dividends have been excluded on an adjusted basis, as they will no longer be recurring after 2002. (e) Pre-tax operating margin for the year and quarter ended November 30, 2002 was reduced by approximately 0.4% and 1.3%, respectively, as a result of the other real estate charge and September 11th 2001 related (recoveries)/expenses, net. Pre-tax operating margin for the year and quarter ended November 30, 2001 was reduced by approximately 1.8% and 10.6%, respectively, as a result of the September 11th related (recoveries)/expenses, net. (f) The effective tax rate for the year and quarter ended November 30, 2002 increased by approximately 0.5% and 1.9%, respectively, as a result of the other real estate charge and September 11th related (recoveries)/expenses, net. The effective tax rate for the year and quarter ended November 30, 2001 decreased by approximately 1.3% and 35.9%, respectively as a result of the September 11th related (recoveries)/expenses, net. (g) Matched book is defined as the lower of securities purchased under agreements to resell or securities sold under agreements to repurchase. (h) Total capital includes long-term debt, stockholders' equity and preferred securities subject to mandatory redemption. (i) Net leverage ratio is calculated using total assets excluding matched book to total stockholders' equity and other preferred securities. (j) The book value per common share calculation includes restricted stock units granted under Lehman Stock Award Programs included in stockholders' equity. EX-99 5 f02-12_198kexh993.txt EXHIBIT 99.3 CONSOLIDATED STATEMENT OF INCOME EXHIBIT 99.3 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF INCOME (Preliminary and Unaudited) (In millions, except per share data) Three Months Ended --------------------
Percentage of November 30 November 30 Dollar Change 2002 2001 Inc/(Dec) ---------------- --- --------------- ------------------- Revenues: Principal transactions $ 520 $ 161 Investment banking 409 461 Commissions 308 264 Interest and dividends 2,885 3,400 Other 11 14 ---------------- --------------- Total revenues 4,133 4,300 Interest expense 2,594 3,097 ---------------- --------------- Net revenues 1,539 1,203 28% ---------------- --------------- Non-interest expenses: Compensation and benefits 785 615 Technology and communications 148 125 Brokerage and clearance 92 76 Occupancy 74 61 Professional fees 39 26 Business development 34 34 Other 13 23 September 11, 2001 related (recoveries)/expenses, net (108) 127 Other real estate reconfiguration costs 128 - ---------------- --------------- Total non-interest expenses 1,205 1,087 11% ---------------- --------------- Income before taxes and dividends on trust preferred securities 334 116 Provision (Benefit) for income taxes 77 (28) Dividends on trust preferred securities 14 14 ---------------- --------------- Net income $ 243 $ 130 87% ================ =============== Preferred stock dividends 11 11 Net income applicable to common stock $ 232 $ 119 95% ================ =============== Earnings per common share Basic $0.95 $0.49 ================ =============== Diluted $0.91 $0.46 ================ ===============
EX-99 6 f02-12_198kexh994.txt EXHIBIT 99.4 CONSOLIDATED STATEMENT OF INCOME EXHIBIT 99.4 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF INCOME (Preliminary and Unaudited) (In millions, except per share data)
Twelve Months Ended ---------------------------------------- Percentage of November 30 November 30 2001 Dollar Change 2002 Inc/(Dec) ------------------ -- ------------------ ------------------- Revenues: Principal transactions $ 1,951 $ 2,779 Investment banking 1,771 2,000 Commissions 1,286 1,091 Interest and dividends 11,728 16,470 Other 45 52 ------------------ ------------------ Total revenues 16,781 22,392 Interest expense 10,626 15,656 ------------------ ------------------ Net revenues 6,155 6,736 (9%) ------------------ ------------------ Non-interest expenses: Compensation and benefits 3,139 3,437 Technology and communications 552 501 Brokerage and clearance 329 308 Occupancy 287 198 Business development 146 183 Professional fees 129 152 Other 74 82 September 11, 2001 related (recoveries)/expenses, net (108) 127 Other real estate reconfiguration costs 128 - ------------------ ------------------ Total non-interest expenses 4,676 4,988 (6%) ------------------ ------------------ Income before taxes and dividends on trust preferred securities 1,479 1,748 Provision for income taxes 392 437 Dividends on trust preferred securities 56 56 ------------------ ------------------ Net income $ 1,031 $ 1,255 (18%) ================== ================== Preferred stock dividends 69 94 Net income applicable to common stock $ 962 $ 1,161 (17%) ================== ================== Earnings per common share Basic $ 3.92 $ 4.77 ================== ================== Diluted $ 3.68 $ 4.38 ================== ==================
EX-99 7 f02-12_198kexh995.txt EXHIBIT 99.5 SEGMENT NET REVENUE INFORMATION EXHIBIT 99.5 LEHMAN BROTHERS HOLDINGS INC. SEGMENT NET REVENUE INFORMATION (Preliminary and Unaudited) (In millions)
Three Months Ended Twelve Months Ended ---------------------------- ---------------------------- Nov. 30 Nov. 30 Nov. 30 Nov. 30 2002 2001 2002 2001 ------------ ------------ ----------- ------------- Investment Banking: Debt Underwriting $207 $217 $886 $893 Equity Underwriting 55 76 420 440 Merger and Acquisition Advisory 138 150 425 592 ------------ ------------ ----------- ------------- Total 400 443 1,731 1,925 ------------ ------------ ----------- ------------- Capital Markets: Fixed Income 733 378 2,619 2,227 Equities 213 199 1,001 1,797 ------------ ------------ ----------- ------------- Total 946 577 3,620 4,024 ------------ ------------ ----------- ------------- Client Services: Private Client 183 165 762 711 Private Equity 10 18 42 76 ------------ ------------ ----------- ------------- Total 193 183 804 787 ------------ ------------ ----------- ------------- Total Lehman $1,539 $1,203 $6,155 $6,736 ============ ============ =========== =============
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