-----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, TXzJbZLgLOg0zp/j44At4lsrmnnJ1FzxvcpnA/Rr2AF4B0yX3l0oCBy6AErkb8wj 1ceg5RpD8gA/WY1NEre0cA== 0000806085-03-000130.txt : 20030619 0000806085-03-000130.hdr.sgml : 20030619 20030619094944 ACCESSION NUMBER: 0000806085-03-000130 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20030619 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030619 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: 03749583 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 f03-06_198k.txt FORM 8 K UNITED STATES 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 19, 2003 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 and Regulation FD Disclosure Earnings Release On June 19, 2003, Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its earnings for its most recently completed fiscal quarter (the "Earnings Release"). The Earnings Release and related attachments follow 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 Earnings Exhibit 99.2 Selected Statistical Information (Preliminary and Unaudited) Exhibit 99.3 Consolidated Statement of Income Three Months Ended May 31, 2003 (Preliminary and Unaudited) Exhibit 99.4 Consolidated Statement of Income Six Months Ended May 31, 2003 (Preliminary and Unaudited) Exhibit 99.5 Segment Net Revenue Information Three and Six Months Ended May 31, 2003 (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: June 19, 2003 By: /s/ David Goldfarb ----------------------------- David Goldfarb Chief Financial Officer (Principal Financial Officer) 3 EXHIBIT INDEX Exhibit 99.1 Press Release Relating to Earnings Exhibit 99.2 Selected Statistical Information (Preliminary and Unaudited) Exhibit 99.3 Consolidated Statement of Income Three Months Ended May 31, 2003 (Preliminary and Unaudited) Exhibit 99.4 Consolidated Statement of Income Six Months Ended May 31, 2003 (Preliminary and Unaudited) Exhibit 99.5 Segment Net Revenue Information Three and Six Months Ended May 31, 2003 (Preliminary and Unaudited) 4 EX-99 3 f03-06_198kexh991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 LEHMAN BROTHERS PRESS RELEASE For Immediate Release Media Contact: Hannah Burns (212) 526-4064 Investor Contact: Shaun Butler (212) 526-8381 LEHMAN BROTHERS REPORTS RECORD LEVEL OF REVENUES NET INCOME INCREASES 48% NEW YORK, June 19, 2003 -- Lehman Brothers Holdings Inc. (ticker symbol: LEH) today reported net income of $437 million, or $1.67 per common share (diluted), for the second quarter ended May 31, 2003, a 48% increase from $296 million, or $1.08 per common share (diluted), reported for the second quarter of fiscal 2002, and a 45% increase from $301 million, or $1.15 per common share (diluted), for the first quarter of fiscal 2003 ended February 28, 2003. Included in the second quarter 2003 results is a $77 million pretax ($45 million after tax) real estate-related charge. For the first six months of fiscal 2003, net income was $738 million, or $2.81 per common share (diluted), a 24% increase from $594 million, or $2.07 per common share (diluted), for the first half of fiscal 2002. Second Quarter Business Highlights o Delivered strong revenue growth across all business segments versus the trailing quarter o Increased customer flow activity drove record fixed income performance for the third consecutive quarter o Created Global Finance, which fully coordinates the Firm's equity, debt, leveraged finance, and private placement origination capabilities to deliver a full, single platform to our clients Richard S. Fuld, Jr., chairman and chief executive officer, said, "Our results for the second quarter confirm that our targeted client strategy is successful. The record level of revenues reflects the solid performance across our diversified set of businesses. While the market environment remains difficult, we are beginning to see positive signs for our industry, as demonstrated by the improvement in the equity markets, as well as a rise in announced mergers and acquisitions transactions." Net revenues (total revenues less interest expense) for the second quarter increased by 38% to a record $2.3 billion, from $1.7 billion for the same period in fiscal 2002. All of the Firm's business segments posted stronger results than the trailing quarter, contributing to the record level of revenues. The Firm's Fixed Income Capital Markets business recorded its highest level of quarterly revenues ever, driven by increased customer flow activity across most products, including derivatives, credit products, and mortgages. The Client Services business experienced its second highest level of revenues ever, as a result of the sixth consecutive record quarter in the distribution of fixed income products, and an approximate 20% increase in the sale of equity products over the trailing quarter, as investors signaled a return to the equity markets. For the first six months of fiscal 2003, net revenues were $4.0 billion, a 22% increase from $3.3 billion for the first half of fiscal 2002. Non-interest expenses for the quarter were $1.7 billion, compared to $1.2 billion for the second quarter of fiscal 2002. Compensation and benefits as a percentage of net revenues remained at 51% during the second quarter of fiscal 2003. Nonpersonnel expenses in the fiscal 2003 second quarter were $418 million, compared to $379 million in the same period a year ago. In addition, non-interest expenses in the second quarter of fiscal 2003 include a $77 million real estate charge. 2 The $77 million pretax real estate charge ($45 million after tax) was associated with the Firm's previous decision to dispose of certain excess real estate. This charge represents an adjustment to previously recorded charges, reflecting the further softening of the real estate markets in New York and London. For the quarter ended May 31, 2003, the Firm's pretax margin was 27.4%, compared to 26.2% in the fiscal 2002 second quarter, and 25.6% in the first quarter of 2003. For the fiscal 2003 second quarter, the Firm's return on common equity was 19.6%, compared to 14.1% in the fiscal 2002 second quarter, and 13.9% in the trailing quarter ended February 28, 2003. As of May 31, 2003, Lehman Brothers stockholders' equity totaled $9.6 billion, and total capital (stockholders' equity, trust preferred securities, and long-term debt) was approximately $54.2 billion. Book value per common share was $36.77. Lehman Brothers (ticker symbol: 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. Conference Call A conference call to discuss the Firm's financial results and outlook will be held at 10:00 a.m., EST on Thursday, June 19, 2003. Members of the public who would like to access the conference call should dial, from the U.S., 888-606-8409, or, from outside the U.S., 210-839-8512. The passcode for all callers is LEHMAN. The conference call will also be accessible through the "Shareholders" section of the Firm's Web site, www.lehman.com, 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 800-756-0344 (within the U.S.) or 402-998-0762 (from outside the U.S.). The replay will be available beginning approximately one hour after the event and will remain available on the Firm's Web site until 5:00 p.m., EST, on July 17, 2003, and by phone until 5:00 p.m., EST, on July 11, 2003. Please direct any questions regarding the conference call to Shaun Butler at 212-526-8381, or sbutler@lehman.com, or Benjamin Pratt at 212-526-5975, or benjamin.pratt@lehman.com . 3 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 risks and uncertainties relating to market fluctuations and volatility, industry competition and changes in the competitive environment, investor sentiment, liquidity risks, credit ratings changes, credit exposures and legal and regulatory changes and proceedings. 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 Quarterly Report on Form 10-Q. # # # EX-99 4 f03-06_198kexh992.txt EXHIBIT 99.2 SELECTED STATISTICAL INFORMATION LEHMAN BROTHERS HOLDINGS INC. Exhibit 99.2 SELECTED STATISTICAL INFORMATION (Preliminary and Unaudited) (Dollars in millions, except per share data)
Quarters Ended ---------------------------------------------------------- 5/31/03 2/28/03 11/30/02 8/31/02 5/31/02 ---------------------------------------------------------- Income Statement Net Revenues $2,291 $1,711 $1,539 $1,347 $1,663 Non-Interest Expenses: Compensation and Benefits 1,168 873 785 687 848 Nonpersonnel Expenses 418 401 400 391 379 September 11, 2001, related (recoveries)/expenses, net - - (108) - - Other real estate reconfiguration charges 77 - 128 - - Regulatory settlement - - 80 - - Net Income (a) 437 301 187 194 296 Net Income Applicable to Common Stock 426 290 176 183 285 Earnings per Common Share (b) Basic $1.76 $1.20 $0.72 $0.74 $1.16 Diluted $1.67 $1.15 $0.69 $0.70 $1.08 Financial Ratios (%) Return on Common Equity (annualized) (c) 19.6% 13.9% 8.6% 8.9% 14.1% Pretax Margin (d) 27.4% 25.6% 16.5% 20.0% 26.2% Compensation & Benefits/Net Revenues 51.0% 51.0% 51.0% 51.0% 51.0% Effective Tax Rate (e) 27.5% 28.0% 20.7% 22.6% 29.0% Financial Condition Total Assets $304,000 $268,293 $260,336 $265,213 $267,787 Total Assets Excluding Matched Book (f) 191,000 174,096 165,995 159,879 173,671 Securities Purchased Under Agreements to Resell 113,000 94,197 94,341 105,334 94,116 Long-Term Debt 43,530 41,247 38,678 38,911 36,643 Trust Issued Securities Subject to Mandatory Redemption(g) 1,010 710 710 710 710 Common Stockholders' Equity 8,935 8,457 8,242 8,209 8,206 Total Stockholders' Equity 9,635 9,157 8,942 8,909 8,906 Total Stockholders' Equity plus Trust Issued Securities Subject to Mandatory Redemption(h) 10,645 9,867 9,652 9,619 9,616 Total Capital (i) 54,175 51,114 48,330 48,530 46,259 Total Leverage (j) 31.6x 29.3x 29.1x 29.8x 30.1x Adjusted Leverage (h), (k) 28.6x 27.2x 27.0x 27.6x 27.8x Net Leverage (f), (h), (l) 17.9x 17.6x 17.2x 16.6x 18.1x Book Value per Common Share (m) 36.77 35.03 34.15 33.49 33.22 Other Data (#s) Employees 13,247 12,083 12,343 12,980 12,694 Common Stock Outstanding (in millions) 242.4 241.5 231.1 239.0 243.6 Weighted Average Shares (in millions) Basic 242.3 241.8 243.9 246.7 245.8 Diluted 255.8 253.0 255.1 261.0 263.5
(a) For the quarter ended May 31, 2003 net income includes a $77 million pre-tax charge ($45 million after tax) related to certain of the firm's real estate. Fourth quarter 2002 net income includes a $108 million pre-tax gain ($60 million after tax) from September 11th related (recoveries)/expenses, net, a $128 million pre-tax charge ($82 million after tax) related to the reconfiguration of certain of the Firm's global real estate and a pre-tax charge of $80 million ($56 million after tax) related to the Firm's regulatory settlement. (b) For the quarter ended May 31, 2003 basic EPS was reduced $0.19, and fully diluted EPS was reduced $0.17, respectively, as a result of the real estate charge. For the quarter ended November 30, 2002 basic EPS was reduced by $0.32, and fully diluted EPS was reduced by $0.31, respectively, as a result of the September 11th related recovery, the other real estate charge and the regulatory settlement charge. (c) For the quarter ended May 31, 2003, the Company's return on common equity was reduced by 2.1% as a result of the real estate charge. For the quarter ended November 30, 2002, the Company's return on common equity was reduced by 3.7% as a result of the September 11th related recovery, the other real estate charge and the regulatory settlement charge. (d) Pre-tax margin for the quarter ended May 31, 2003 was reduced by approximately 3.4% as a result of the real estate charge. Pre-tax margin for the quarter ended November 30, 2002 was reduced by approximately 6.5% as a result of the September 11th related recovery, the other real estate charge and the regulatory settlement charge. (e) The effective tax rate for the quarter ended May 31, 2003 decreased by approximately 1.5% as a result of the real estate charge. The effective tax rate for the quarter ended November 30, 2002 decreased by approximately 0.5% as a result of the September 11th related recovery, the other real estate charge and the regulatory settlement charge. (f) Matched book represents securities purchased under agreements to resell ("reverse repos") to the extent such balance is less than securities sold under agreements to repurchase. Certain rating agencies consider such reverse repos to be a proxy for matched book assets, as such assets are considered to have a low risk profile, and exclude such amounts in the calculation of leverage. Accordingly, the Company believes the ratio of total assets excluding matched book to total stockholders' equity and trust issued securities subject to mandatory redemption is useful to investors as a more meaningful measure of the Company's leverage. (g) Trust issued securities subject to mandatory redemption includes $710 million of trust preferred securities subject to mandatory redemption and $300 million of debt collateralizing trust preferred securities subject to mandatory redemption. (h) The Company believes total stockholders' equity plus trust issued securities subject to mandatory redemption to be a more meaningful measure of the Company's equity for purposes of calculating net leverage and adjusted leverage. (i) Total capital includes long-term debt, total stockholders' equity, and preferred securities subject to mandatory redemption. The Company believes total capital is useful to investors as a measure of the Company's financial strength. (j) Total Leverage is defined as total assets divided by total stockholders' equity. (k) Adjusted leverage is defined as total assets divided by total stockholders' equity plus trust issued securities subject to mandatory redemption. (l) Net leverage is defined as total assets excluding matched book divided by total stockholders' equity plus trust issued securities subject to mandatory redemption. (m) The book value per common share calculation includes restricted stock units granted under Lehman Stock Award Programs, which are included in total stockholders' equity. EX-99 5 f03-06_198kexh993.txt EXHIBIT 99.3 CONSOLIDATED STATEMENT OF INCOME LEHMAN BROTHERS HOLDINGS INC. Exhibit 99.3 CONSOLIDATED STATEMENT OF INCOME (Preliminary and Unaudited) (In millions, except per share data)
Three Months Ended % Change from ------------------------------------- ----------------------------- May 31 Feb 28 May 31 Feb 28 May 31 2003 2003 2002 2003 2002 ----------- -- --------- -- --------- ------------ -------------- Revenues: Principal transactions $1,275 $768 $627 Investment banking 432 371 465 Commissions 299 262 332 Interest and dividends 2,445 2,687 2,910 Other 19 12 13 ----------- --------- --------- Total revenues 4,470 4,100 4,347 Interest expense 2,179 2,389 2,684 ----------- --------- --------- Net revenues 2,291 1,711 1,663 34% 38% ----------- --------- --------- Non-interest expenses: Compensation and benefits 1,168 873 848 Technology and communications 147 143 142 Brokerage and clearance fees 90 86 76 Occupancy 73 82 71 Professional fees 41 29 34 Business development 37 32 40 Other 30 29 16 Global real estate reconfiguration 77 - - ----------- --------- --------- Total non-interest expenses 1,663 1,274 1,227 31% 36% Income before taxes and dividends on trust preferred securities 628 437 436 Provision for income taxes 173 122 126 Dividends on trust preferred securities 18 14 14 ----------- --------- --------- ----------- --------- --------- Net income $437 $301 $296 45% 48% =========== ========= ========= Net income applicable to common stock $426 $290 $285 47% 50% =========== ========= ========= Earnings per common share Basic $1.76 $1.20 $1.16 =========== ========= ========= Diluted $1.67 $1.15 $1.08 =========== ========= =========
EX-99 6 f03-06_198kexh994.txt EXHIBIT 99.4 CONSOLIDATED STATEMENT OF INCOME LEHMAN BROTHERS HOLDINGS INC. Exhibit 99.4 CONSOLIDATED STATEMENT OF INCOME (Preliminary and Unaudited) (In millions, except per share data)
Six Months Ended % Change from ------------------------------------ ------------------- May 31 May 31 May 31 2003 2002 2002 ---------------- --- --------------- ------------------- Revenues: Principal transactions $2,043 $1,196 Investment banking 803 935 Commissions 561 621 Interest and dividends 5,132 5,796 Other 31 25 ---------------- --------------- Total revenues 8,570 8,573 Interest expense 4,568 5,304 ---------------- --------------- Net revenues 4,002 3,269 22% ---------------- --------------- Non-interest expenses: Compensation and benefits 2,041 1,667 Technology and communications 290 264 Brokerage and clearance fees 176 151 Occupancy 155 140 Professional fees 70 54 Business development 69 74 Other 59 43 Global real estate reconfiguration 77 - ---------------- --------------- Total non-interest expenses 2,937 2,393 23% Income before taxes and dividends on trust preferred securities 1,065 876 Provision for income taxes 295 254 Dividends on trust preferred securities 32 28 ---------------- --------------- Net income $738 $594 24% ================ =============== Net income applicable to common stock $716 $547 31% ================ =============== Earnings per common share Basic $2.96 $2.23 ================ =============== Diluted $2.81 $2.07 ================ ===============
EX-99 7 f03-06_198kexh995.txt EXHIBIT 99.5 SEGMENT NET REVENUE INFORMATION LEHMAN BROTHERS HOLDINGS INC. Exhibit 99.5 SEGMENT NET REVENUE INFORMATION (Preliminary and Unaudited) (In millions)
Three Months Ended Six Months Ended ------------------------------------------- --------------------------- May 31 Feb 2003 May 31 May 31 May 31 2003 2002 2003 2002 ------------ ----------- ------------ ------------ ----------- Investment Banking: Equity Underwriting $75 $59 $109 $134 $272 Debt Underwriting 258 215 266 473 471 Merger and Acquisition Advisory 93 92 79 185 170 ------------ ----------- ------------ ------------ ----------- Total 426 366 454 792 913 ------------ ----------- ------------ ------------ ----------- Capital Markets: Equities 450 276 324 726 588 Fixed Income 1,186 891 676 2,077 1,357 ------------ ----------- ------------ ------------ ----------- Total 1,636 1,167 1,000 2,803 1,945 ------------ ----------- ------------ ------------ ----------- Client Services: Private Client 223 172 197 395 388 Private Equity 6 6 12 12 23 ------------ ----------- ------------ ------------ ----------- Total 229 178 209 407 411 ------------ ----------- ------------ ------------ ----------- Total Lehman $2,291 $1,711 $1,663 $4,002 $3,269 ============ =========== ============ ============ ===========
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