0000806085-95-000163.txt : 19950925 0000806085-95-000163.hdr.sgml : 19950925 ACCESSION NUMBER: 0000806085-95-000163 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950921 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950921 SROS: NYSE 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: 001-09466 FILM NUMBER: 95575179 BUSINESS ADDRESS: STREET 1: AMERICAN EXPRESS TWR STREET 2: 3 WORLD FINANCIAL CNTR CITY: NEW YORK STATE: NY ZIP: 10048 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 FORM 8-K FOR THIRD QUARTER 1995 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): September 9, 1995 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 Third Quarter 1995 On September 20, 1995, Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its third quarter 1995 earnings (the "Earnings Release"). Copy of the Earnings Release follows. Sale of Omnitel Interest On September 9, 1995, the Registrant issued a press release with respect to its sale of its interest in Omnitel Sistemi Radiocellullari Italiani S.p.A. A copy of the press release is attached hereto. Item 7. Financial Statements and Exhibits (c) Exhibits The following Exhibits are filed as part of this Report. 99.1 Press Release Relating to Third Quarter 1995 Earnings 99.2 Selected Statistical Information 99.3 Consolidated Statement of Operations (Nine Months Ended August 31, 1995) (Preliminary and Unaudited) 99.4 Press Release Relating to the Sale of the Registrant's interest in Omnitel The Exhibit Index to this Report is incorporated herein by reference. 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/ Robert Matza__________ Robert Matza Chief Financial Officer (Principal Financial Officer) Date: September 21, 1995 EXHIBIT INDEX Exhibit No. Exhibit Exhibit 99.1 Press Release Relating to Third Quarter 1995 Earnings Exhibit 99.2 Selected Statistical Information Exhibit 99.3 Consolidated Statement of Operations (Nine Months Ended August 31, 1995) (Preliminary and Unaudited) Exhibit 99.4 Press Release relating to sale of the Registrant's interest in Omnitel EXHIBIT 99.1 For Immediate Release MEDIA CONTACT: Steven H. Faigen (212) 526-4379 INVESTOR CONTACT: Shaun Butler (212) 526-8381 LEHMAN BROTHERS REPORTS 1995 FISCAL YEAR THIRD QUARTER EARNINGS NEW YORK, September 20, 1995 _ Lehman Brothers Holdings Inc. (NYSE: LEH) today reported net income of $71 million, which, net of preferred dividends, resulted in earnings of $0.52 per share of common stock for the third quarter ended August 31, 1995. Net income increased by 22 percent over the $58 million reported for the second quarter of 1995 and 223 percent over the $22 million of net income reported for the third quarter of 1994. Richard S. Fuld Jr., Chairman and Chief Executive Officer, said: "As we saw in the prior quarter, the combined effect of revenue growth and continued cost reduction resulted in further improvement in our operating margins, leading to the higher earnings we are reporting today. The Firm's pre-tax margin was 14.5 percent, a full ten percentage points higher than last year's third quarter results." Net revenues (total revenues less interest expense) for the third quarter were $750 million compared to $731 million for the second quarter of 1995 and $719 million for the third quarter of 1994. The increase in revenues reflects continued strengthening in customer flow and origination activity, particularly equities, as the market environment improved throughout the quarter. Operating expenses of $641 million were unchanged from the second quarter of 1995, despite the increase in revenues, and are down from $686 million reported in the third quarter of 1994. Compensation and benefits expense totaled $380 million, or 50.7 percent of net revenues. At the end of the third quarter, the Firm's headcount was 8,069 compared to 8,195 at the end of the second quarter of 1995. Non-personnel expenses of $261 million decreased by $37 million on an annualized basis from the second quarter of 1995 and $151 million versus the benchmark established in the third quarter of 1994. Mr. Fuld added: "Expenses continued their downward trend during the quarter. Compensation expenses as a percentage of revenues were held flat to the prior quarter, despite an aggressive recruiting program for certain businesses, notably investment banking and high-net-worth brokerage. At the same time, non- personnel expenses have come down significantly for the fifth consecutive quarter." As of August 31, 1995, Lehman Brothers' stockholders' equity was $3,631 million and total capital (stockholders' equity and long- term debt) was $16,528 million. Book value per common share was $25.23. Lehman Brothers is a global investment bank with leadership positions in corporate finance, advisory services, municipal finance and securities 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. EXHIBIT 99.2 LEHMAN BROTHERS HOLDINGS INC. SELECTED STATISTICAL INFORMATION (Preliminary and Unaudited) (Dollars in millions, except per share data)
Quarters Ended 8/31/95 5/31/95 2/28/95 11/30/94 8/31/94 Income Statement Net Revenues $750 $ 731 $ 707 $ 708 $ 719 Non-Interest Expenses: Compensation and Benefits 380 371 360 356 388 Nonpersonnel Expenses 261 270 277 287 298 Net Income 71 58 45 46 22 Financial Ratios (%) Return on Common Equity (annualized) 8.5 7.0 5.1 5.2 1.6 Pretax Operating Margin 14.5 12.3 9.9 9.1 4.6 Compensation & Benefits/ Net Revenues 50.7 50.7 50.9 50.3 53.9 Effective Tax Rate 35.0 35.5 35.8 29.2 35.1 Balance Sheet Total Assets 117,000 123,421 127,304 109,947 121,246 Total Assets Excluding Matched Book (a) 80,000 83,115 85,257 72,457 76,677 Common Stockholders' Equity 2,923 2,767 2,718 2,687 2,652 Total Stockholders' Equity 3,631 3,475 3,426 3,395 3,360 Total Capital (long- term debt plus stockholders' Equity) 16,528 16,257 14,603 14,716 14,187 Book Value per Common Share (b) 25.23 25.16 24.69 24.35 23.97 Other Data (#s) Common Stock Outstanding 104,558,121 104,524,685 104,494,667 104,537,690 105,528,914 Employees 8,069 8,195 8,428 8,512 8,926 (a) Matched book is defined as securities purchased under agreements to resell. (b) This calculation includes restricted stock units granted under the Lehman Stock Award Programs. EXHIBIT 99.3
LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF OPERATIONS (Preliminary and Unaudited) (In millions, except per share data)
Three Months Ended Percentage of August 31, August 31, Dollar Change 1995 1994 (Note 1) Inc/(Dec) Revenues: Principal transactions $245 $335 (27)% Investment banking 251 172 46 Commissions 116 113 3 Interest and dividends 2,830 1,901 49 Other 11 16 (31) Total revenues 3,453 2,537 36 Interest expense 2,703 1,818 49 Net revenues 750 719 4 Non-interest expenses: Compensation and benefits 380 388 (2) Brokerage, commissions and clearance fees 59 58 2 Communications 43 51 (16) Occupancy and equipment 44 45 (2) Professional services 39 49 (20) Business development 27 33 (18) Depreciation and amortization 26 33 (21) Other 23 29 (21) Total non-interest expenses 641 686 (7) Income before taxes 109 33 # Provision for income taxes 38 11 # Net income $ 71 $ 22 # Net income applicable to common stock $ 60 $ 11 # Number of shares used in earnings per 116.2 109.1 common share computation (Note 2) Earnings per common share $0.52 $ 0.10
Note 1: Certain amounts have been reclassified to conform to the current year's presentation. Note 2: Pursuant to SEC requirements, the number of common shares used in the 1994 calculation of earnings per share includes shares issued in the spin-off. # Denotes variance of more than 100%. LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF OPERATIONS (Preliminary and Unaudited) (In millions, except per share data)
Nine Months Eight Months Ended Ended August 31, August 31, 1995 1994 (Note 1) Revenues: Principal transactions $959 $1,054 Investment banking 540 421 Commissions 342 333 Interest and dividends 7,986 4,547 Other 36 40 Total revenues 9,863 6,395 Interest expense 7,675 4,365 Net revenues 2,188 2,030 Non-interest expenses: Compensation and benefits 1,111 1,057 Brokerage, commissions and clearance fees 183 179 Communications 137 136 Occupancy and equipment 134 114 Professional services 123 121 Business development 84 85 Depreciation and amortization 80 86 Other 67 76 Spin-off expenses 15 Severance charge 33 Total non-interest expenses 1,919 1,902 Income before taxes and cumulative effect of change in accounting principle 269 128 Provision for income taxes 95 48 Income before cumulative effect of change in accounting principle 174 80 Cumulative effect of change in accounting principle (13) Net income $ 174 $ 67 Net income applicable to common stock $ 142 $ 40 Number of shares used in earnings per 112.2 107.0 common share computation (Note 2) Earnings per common share: Income before cumulative effect of change in accounting principle $1.27 $0.49 Cumulative effect of change in accounting principle (0.12) Net income $1.27 $ 0.37
Note 1: Certain amounts have been reclassified to conform to the current year's presentation. Note 2: Pursuant to SEC requirements, the number of common shares used in the 1994 calculation of earnings per share includes shares issued in the spin-off. EXHIBIT 99.4 For Immediate Release CONTACT: Steven Faigen (212) 526-4379 LEHMAN BROTHERS SELLS ITS INTEREST IN OMNITEL TO OLIVETTI NEW YORK, September 9, 1995 _ Lehman Brothers Holdings Inc. today announced that it has reached an agreement to sell its eight percent interest in Omnitel Sistemi Radiocellullari Italiani S.p.A. ("Omnitel") to Olivetti S.p.A. ("Olivetti") as part of Olivetti's plan of recapitalization announced today. This agreement is subject to the completion of the plan of recapitalization. Omnitel is the consortium that has been awarded by the Italian government the license to operate a second national cellular telephone network in Italy. It is currently estimated that Lehman Brothers will report in the fourth quarter of 1995 a net gain of approximately $50 million in connection with the sale of its interest in Omnitel, after adjusting for related expenses that include the cost of the Firm's original investment in Omnitel and subsequent capital calls, as well as transaction, compensation and tax expenses. Lehman Brothers is a global investment bank with leadership positions in corporate and municipal finance and advisory services and in securities sales, trading and research. Lehman Brothers serves the financial needs of corporate, governmental and institutional clients, and high-net-worth individuals through offices in major financial centers worldwide.