-----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, LBzBMmTSJmHGsD13kuQG5YdHpKCKSM0HolnBh4a0sYq6iV3/FZY+3CfN0yfEJA/c H+sKLrBZB9gndiV0eXDs2w== 0000806085-96-000004.txt : 19960111 0000806085-96-000004.hdr.sgml : 19960111 ACCESSION NUMBER: 0000806085-96-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960104 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960109 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: 96502074 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 TEST 8-K 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): January 4, 1996 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 Number) 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 1995 Fiscal Year End and Fourth Quarter Earnings On January 4, 1996, Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its fourth quarter and year end 1995 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 Fourth Quarter and 1995 Fiscal Year End Earnings 99.2 Consolidated Statement of Operations (Three Months Ended November 30, 1995) (Preliminary and Unaudited) 99.3 Consolidated Statement of Operations (Eleven Months Ended November 30, 1995) (Preliminary and Unaudited) 99.4 Selected Statistical Information 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: January 9, 1996 EXHIBIT INDEX Exhibit No. Exhibit Exhibit 99.1 Press Release Relating to Fourth Quarter 1995 Earnings Exhibit 99.2 Consolidated Statement of Operations (Three Months Ended November 30, 1995) (Preliminary and Unaudited) Exhibit 99.3 Consolidated Statement of Operations (Eleven Months Ended November 30, 1995) (Preliminary and Unaudited) Exhibit 99.4 Selected Statistical Information 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 END AND FOURTH QUARTER EARNINGS NEW YORK, January 4, 1996 _ Lehman Brothers Holdings Inc. (NYSE: LEH) today reported net income of $80 million for the fourth quarter ended November 30, 1995, before taking into account the effect of two special items. These items are a $47 million after-tax gain related to the Firm's sale of its interest in Omnitel Sistemi Radiocellullari Italiani S.p.A. ("Omnitel") and a $58 million after-tax charge for occupancy-related real estate expenses and severance payments. The occupancy-related real estate charge will produce annual pre-tax savings of $24 million. After taking into account these two items, the Firm reported net income of $69 million which, net of preferred dividends, resulted in earnings per share of $0.49 for the quarter. Net income before the special items increased by 13 percent over the $71 million reported for the third quarter of 1995 and 74 percent over the $46 million of net income reported for the fourth quarter of 1994. Lehman also reported net income of $242 million (or $1.76 per share) for fiscal 1995, compared to net income of $113 million (or $0.69 per share) for the 11 months comprising fiscal 1994. Richard S. Fuld, Jr., Chairman and Chief Executive Officer, said: "With the fourth quarter results we are reporting today, revenues have increased every quarter this year. Our revenue growth reflects the strengths of our franchise and the continued investments we have made this year to build our business. Coupled with our success in driving costs down, this has allowed us to raise our profitability in each quarter of 1995, with fourth quarter earnings up almost 75 percent from the fourth quarter earnings last year. In addition, we have increased equity by over $400 million and long-term capital by $2.8 billion since the spin-off. We enter 1996 with momentum in the marketplace, a more competitive cost structure and significantly greater financial strength." The following discussion of the Firm's fourth quarter and fiscal year results excludes the effect of the sale of Omnitel ($79 million pre-tax gain) and the restructuring charge totaling $97 million pre-tax (of which $80 million was for occupancy-related real estate expenses and $17 million was for severance payments). Net revenues (total revenues less interest expense) for the fourth quarter were $755 million, compared to $750 million in the third quarter of 1995 and $708 million in the fourth quarter of 1994. Mr. Fuld said: "Our revenues from the quarter showed continued growth and greater diversity. In particular, investment banking activities made strong contributions to our results. Revenues from debt and stock issuances increased 153 percent over the fourth quarter of 1994, with the greatest gains in equities. Merger and acquisition fees increased 50 percent. These results reflect our ongoing investment in banking, research, and distribution." Non-interest expenses for the quarter were $637 million. Non- personnel expenses for the same period were $254 million, a decrease of 3 percent from the third quarter of 1995 and 11 percent versus the fourth quarter of 1994. At the end of the fourth quarter, the Firm's headcount totaled 7,771 versus a peak of 9,400 employees reached during the first quarter of 1994. Mr. Fuld continued: "I am pleased to announce that we have completed our Firmwide program to reduce expenses by $300 million on an annualized basis. Compensation as a percentage of revenues for the quarter was 50.7 percent, down from 53.9 percent reported when the cost reduction program began in the third quarter of 1994. Non-personnel expenses have declined for the sixth quarter in a row and, on an annualized basis, are running $177 million below the third quarter 1994 run rate. Taxes and interest expenses have been reduced by $51 million. Combined with successive quarterly revenue growth and the ongoing cost reduction effort, the Firm achieved a pre-tax margin of 15.6 percent for the fourth quarter of 1995, an eleven percentage point increase over the third quarter of 1994." For the 12 months ended November 30, 1995, the Firm reported net revenue of $2,942 million. Compensation and benefits expenses were $1,494 million, while non-personnel expenses were $1,061 million. As of December 31, 1995, Lehman Brothers was ranked the number two underwriter of debt and equity in the U.S. and the number four underwriter of debt and equity worldwide, according to Securities Data Company. Lehman Brothers also ranked fifth in the number of mergers and acquisitions completed globally in 1995, according to Securities Data Company. As of November 30, 1995, Lehman Brothers stockholders' equity was $3,698 million and total capital (stockholders' equity and long-term debt) was $16,463 million. Book value per common share was $25.67. 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 CONSOLIDATED STATEMENT OF OPERATIONS (Preliminary and Unaudited) (In millions, except per share data) Three Months Ended Percentage of November 30, November 30, Dollar Change 1995 1994 Inc/(Dec)
Revenues: Principal transactions $ 434 $ 291 49% Investment banking 261 151 73 Commissions 108 112 (4) Interest and dividends 2,802 2,214 27 Other 8 27 (70) Total revenues 3,613 2,795 29 Interest expense 2,729 2,087 31 Net revenues 884 708 25 Non-interest expenses: Compensation and benefits 433 356 22 Brokerage, commissions and clearance fees 58 64 (9) Communications 43 48 (10) Occupancy and equipment 41 46 (11) Professional services 36 45 (20) Business development 26 31 (16) Depreciation and amortization 25 30 (17) Other 25 23 9 Restructuring charge 97 ----- Total non-interest expenses 784 643 22 Income before taxes 100 65 54 Provision for income taxes 31 19 63 Net income $ 69 $ 46 50 Net income applicable to common stock $ 58 $ 35 66 Number of shares used in earnings per common share computation 117.1 110.6 Earnings per common share $0.49 $0.32
EXHIBIT 99.3 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF OPERATIONS (Preliminary and Unaudited) (In millions, except per share data) Twelve Months Eleven Months Ended Ended November 30, November 30, 1995 1994
Revenues: Principal transactions $1,393 $1,345 Investment banking 801 572 Commissions 450 445 Interest and dividends 10,788 6,761 Other 44 67 Total revenues 13,476 9,190 Interest expense 10,405 6,452 Net revenues 3,071 2,738 Non-interest expenses: Compensation and benefits 1,544 1,413 Brokerage, commissions and clearance fees 241 243 Communications 180 184 Occupancy and equipment 174 160 Professional services 159 166 Business development 110 116 Depreciation and amortization 105 116 Other 92 99 Restructuring charge 97 Severance charge 33 Spin-off expenses _____ 15 Total non-interest expenses 2,702 2,545 Income before taxes and cumulative effect of change in accounting principle 369 193 Provision for income taxes 127 67 Income before cumulative effect of change in accounting principle 242 126 Cumulative effect of change in accounting principle, net of taxes _____ (13) Net income $ 242 $ 113 Net income applicable to common stock $ 200 $ 75 Number of shares used in earnings per 113.4 108.0 common share computation (Note 1) Earnings per common share: Income before cumulative effect of change in accounting principle $1.76 $0.81 Cumulative effect of change in accounting principle _____ (0.12) Net income $1.76 $ 0.69 Note 1: 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 LEHMAN BROTHERS HOLDINGS INC. SELECTED STATISTICAL INFORMATION (Preliminary and Unaudited) (Dollars in millions, except per share data) Twelve Eleven Months Months Quarters Ended 1995(a) 1994 11/30/95(a) 8/31/95 5/31/95 2/28/95 11/30/94
Income Statement Net Revenues $2,942 $2,738 $755 $750 $731 $707 $708 Non-Interest Expenses: Compensation and Benefits 1,494 1,413 383 380 371 360 356 Nonpersonnel Expenses(b) 1,061 1,084 254 261 270 277 287 Net Income from Operations Excluding Special Charges and Gain on Sale of Omnitel 253 156 80 71 58 45 46 Net After-Tax Gain from Sale of Omnitel 47 47 Special Charges (after-tax): Restructuring Charge (58) (58) Spin-Off Expenses (12) Severance Charge (18) Accounting Change (13) Net Income 242 113 69 71 58 45 46 Financial Ratios (%) (c) Return on Common Equity (annualized) 7.5 6.2 9.3 8.5 7.0 5.1 5.2 Pretax Operating 13.2 8.8 15.6 14.5 12.3 9.9 9.1 Margin Compensation & Benefits/ Net Revenues(d) 50.8 51.6 50.7 50.7 50.7 50.9 50.3 Effective Tax Rate 34.5 33.7 32.5 35.0 35.5 35.8 29.2 (e) Balance Sheet Total Assets $115,000 $117,518 $127,421 $127,304 $109,947 Total Assets Excluding Matched Book (f) 79,000 80,345 83,115 85,257 72,457 Common Stockholders' Equity 2,990 2,923 2,767 2,718 2,687 Total Stockholders' Equity 3,698 3,631 3,475 3,426 3,395 Total Capital (long- term debt plus stockholders' equity) 16,463 16,528 16,257 14,603 14,716 Book Value per Common Share(g) 25.67 25.23 25.16 24.69 24.35 Other Data (#s) Common Stock Outstanding 104,565,875 104,558,121 104,524,685 104,494,667 104,537,690 Employees 7,771 8,069 8,195 8,428 8,512 (a) Net revenues and non-interest expenses exclude the effects of the sale of Omnitel. (b) Excludes special charges of $97 million relating to real estate- and occupancy-related expenses and severance payments in the twelve months of 1995 and the quarter ended November 30, 1995 and special charges of $33 million and $15 million relating to severance and the spin-off, respectively, in the eleven months of 1994. (c) Financial ratios exclude special charges and Omnitel. (d) The actual Compensation & Benefits/Net Revenues ratios, including gross proceeds and the $50 million expense related to the sale of Omnitel, were 50.3% and 49.0% for the twelve months of 1995 and the quarter ended November 30, 1995, respectively. (e) The actual tax rates, including the effects of the sale of Omnitel and the restructuring charge, were 34.3% and 31.3% for the twelve months of 1995 and the quarter ended November 30, 1995, respectively. (f) Matched book is defined as securities purchased under agreements to resell. (g) This calculation includes restricted stock units granted under the Lehman Stock Award Programs included in stockholders' equity.
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