-----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, Tfg6ev8WJmqxgiYyJ8D6XnBu1yrAPxIAWnNGY5XnETo/Dxplpbcr3uY5IIDjFFpx VxT5ISulmIoaBXT56iJ/gg== 0000806085-97-000118.txt : 19970627 0000806085-97-000118.hdr.sgml : 19970627 ACCESSION NUMBER: 0000806085-97-000118 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970531 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970626 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: 97630137 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 LEHMAN BROTHERS HOLDINGS INC. LEHMAN BROTHERS HOLDINGS INC. 3 WORLD FINANCIAL CENTER NEW YORK, NY 10285-1000 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 26, 1997 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 26, 1997, Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its second quarter 1997 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 1997 Earnings 99.2 Consolidated Statement of Operations (Three Months Ended May 31, 1997) (Preliminary and Unaudited) 99.3 Consolidated Statement of Operations (Six Months ended May 31, 1997) (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/ Charles B. Hintz Charles B. Hintz Chief Financial Officer (Principal Financial Officer) Date: June 26, 1997 EXHIBIT INDEX Exhibit No. Exhibit Exhibit 99.1 Press Release Relating to Second Quarter 1997 Earnings Exhibit 99.2 Consolidated Statement of Operations (Three Months Ended May 31, 1997) (Preliminary and Unaudited) Exhibit 99.3 Consolidated Statement of Operations (Six Months Ended May 31, 1997) (Preliminary and Unaudited) Exhibit 99.4 Selected Statistical Information [GRAPHIC OMITTED] News Release ----------------------------------------------------------- For Immediate Release MEDIA CONTACT: William J. Ahearn (212) 526-4379 INVESTOR CONTACT: Shaun Butler (212) 526-8381 LEHMAN BROTHERS REPORTS SECOND QUARTER EARNINGS OF $121 MILLION, UP 12 PERCENT FROM A YEAR AGO NEW YORK, June 26, 1997 -- Lehman Brothers Holdings Inc. (NYSE: LEH) today reported net income of $121 million, or $0.95 per common share, for the second quarter ended May 31, 1997. Net income increased by 12 percent over the $108 million reported for the second quarter of 1996. Earnings per share increased by 7 percent from $0.89 in the year-ago quarter. For the first six months of 1997, net income was a record $265 million, an increase of 25 percent from $212 million in net income for the first half of 1996. "Despite an extremely difficult trading and underwriting environment in March and April, the second quarter earnings reflect continued progress in building on Lehman Brothers' position as a leading global investment bank," said Richard S. Fuld, Jr., Chairman and Chief Executive Officer. "While our results were below the strong levels of the 1997 first quarter, we still saw Second Quarter 1997/page 2 year-over-year improvement in revenues and earnings, which illustrates our success in positioning the institution so that it can perform well even in the volatile market conditions we experienced early in the quarter. Overall, the first half of 1997 was a very good one for the Firm." Net revenues (total revenues less interest expense) for the second quarter were $854 million, an increase of 3 percent from $833 million in the second quarter of 1996. Mr. Fuld noted that the increase in net revenues reflected particular strength in a number of strategic, higher margin businesses that Lehman Brothers is focusing on in 1997 and beyond. In particular, the Firm's global merger and acquisition advisory business, merchant banking, equity derivatives, and mortgage activities showed strength in the second quarter. For the first six months of 1997, net revenues were $1.779 billion, an increase of 8 percent from $1.654 billion in the 1996 first half. Non-interest expenses for the quarter were $682 million. Nonpersonnel expenses for the same period were $249 million, an increase of 3 percent from $242 million in the previous year's second quarter, and up from $237 million in the first quarter of 1997, reflecting planned investments in a number of key strategic businesses. Compensation and benefits as a percentage of net revenues remained at 50.7 percent for the ninth successive quarter. For the 1997 first half, non-interest expense was $1.388 billion. Nonpersonnel expenses were $486 million, compared with $488 million in the first six months of 1996. For the 1997 second quarter, the Firm's pre-tax margin was 20.2 percent, unchanged from the second quarter of 1996. Return on common equity was 12.8 percent for the quarter ended May Second Quarter 1997/page 3 31, 1997, compared with 13.4 percent for the second quarter of 1996. For the first six months of 1997, the Firm's pre-tax margin was 22.0 percent, compared with 19.7 percent for the first six months of 1996; for the same period, return on common equity was 14.4 percent, compared with 13.0 percent in 1996. As of May 31, 1997, Lehman Brothers stockholders' equity was $4.138 billion and total capital (stockholders' equity and long-term debt) was $22.083 billion. Book value per common share was $30.67. 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 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF OPERATIONS (Preliminary and Unaudited) (In millions, except per share data)
Three Months Ended Percentage of May 31 May 31 Dollar Change 1997 1996 Inc/(Dec) -------------- ------------- ------------- Revenues: Principal transactions $ 326 $ 398 (18)% Investment banking 274 223 23 Commissions 91 94 (3) Interest and dividends 3,099 2,749 13 Other 16 12 33 ------- ------- Total revenues 3,806 3,476 9 Interest expense 2,952 2,643 12 ----- ----- Net revenues 854 833 3 ------ ------ Non-interest expenses: Compensation and benefits 433 422 3 Brokerage, commissions and clearance fees 61 58 5 Professional services 47 39 21 Communications 36 38 (5) Occupancy and equipment 34 37 (8) Business development 26 25 4 Depreciation and amortization 21 22 (5) Other 24 23 4 ------- ------- Total non-interest expenses 682 664 3 ------ ------ Income before taxes 172 169 2 Provision for income taxes 51 61 (16) ------- ------- Net income $ 121 $ 108 12 ====== ====== Net income applicable to common stock $ 114 $ 102 12 ====== ====== Average common and common equivalent shares outstanding 120.4 114.8 ===== ===== Earnings per common share $0.95 $0.89 ===== =====
LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF OPERATIONS (Preliminary and Unaudited) (In millions, except per share data)
Six Months Ended Percentage of May 31 May 31 Dollar Change 1997 1996 Inc/(Dec) -------------- ------------- ------------- Principal transactions $ 672 $ 811 (17)% Investment banking 514 433 19 Commissions 188 190 (1) Interest and dividends 6,377 5,405 18 Other 54 23 135 ------- ------- Total revenues 7,805 6,862 14 Interest expense 6,026 5,208 16 ------ ----- Net revenues 1,779 1,654 8 ----- ----- Non-interest expenses: Compensation and benefits 902 839 8 Brokerage, commissions and clearance fees 118 115 3 Professional services 88 73 21 Communications 70 78 (10) Occupancy and equipment 69 77 (10) Business development 51 52 (2) Depreciation and amortization 43 46 (7) Other 47 47 ------- ------ Total non-interest expenses 1,388 1,327 5 ----- ----- Income before taxes 391 327 20 Provision for income taxes 126 115 10 ------ ------- Net income $ 265 $ 212 25 ====== ======= Net income applicable to common stock $ 252 $ 195 29 ====== ======= Average common and common equivalent shares outstanding 119.4 115.9 ===== ===== Earnings per common share $2.11 $1.68 ===== =====
LEHMAN BROTHERS HOLDINGS INC. SELECTED STATISTICAL INFORMATION (Preliminary and Unaudited) (Dollars in millions, except per share data)
Quarters Ended 5/31/97 2/28/97 11/30/96 8/31/96 5/31/96 2/29/96 Income Statement Net Revenues $ 854 $ 925 $1,068 $722 $833 $821 Non-Interest Expenses: Compensation and Benefits 433 469 542 366 422 416 Nonpersonnel Expenses (a) 249 237 247 240 242 246 Net Income from Operations Excluding Special Items 121 144 177 77 108 104 Special Charges (after-tax): Severance charge (50) Net Income 121 144 127 77 108 104 Net Income Applicable to Common Stock 114 138 113 71 102 93 Earnings per Common Share $0.95 $1.16 $0.96 $0.60 $0.89 $0.79 Financial Ratios (%) (b) Return on Common Equity (annualized) 12.8 16.1 20.6 9.0 13.4 12.6 Pretax Operating Margin 20.2 23.7 26.1 16.0 20.2 19.2 Compensation & Benefits/ Net Revenues 50.7 50.7 50.7 50.7 50.7 50.7 Effective Tax Rate (c) 30.0 34.0 36.7 33.6 36.0 34.0 Balance Sheet Total Assets $145,000 $149,493 $128,596 $125,666 $133,725 $128,702 Total Assets Excluding Matched Book (d) 105,000 114,474 96,256 90,216 89,864 84,608 Common Stockholders' Equity (e) 3,630 3,504 3,366 3,233 3,058 3,015 Total Stockholders' Equity (f) 4,138 4,012 3,874 3,741 3,566 3,523 Total Capital (long-term debt plus stockholders' equity) 22,083 21,308 19,796 17,955 17,135 16,994 Book Value per Common Share (g) 30.67 29.76 28.84 27.74 27.29 26.41 f Other Data (#s) Employees 7,788 7,602 7,556 7,762 7,794 7,703 Common Stock Outstanding 101,541,385 101,263,173 100,449,144 100,027,645 100,398,499 102,443,232 Average Common and Common Equivalent Shares Outstanding 120,420,733 118,460,215 116,947,549 117,205,775 114,788,688 116,932,697
(a) Excludes special items of $84 million relating to severance in the quarter ended November 30, 1996. (b) Financial ratios exclude the severance charge and the dividend on the Company's Redeemable Voting Preferred Stock in the quarter ended November 30, 1996. (c) The effective tax rate, including the severance charge was 34.9% for the quarter ended November 30, 1996. (d) Matched book is defined as the lower of securities purchased under agreements to resell or securities sold under agreements to repurchase. (e) The increase in common stockholders' equity at 8/31/96, reflects an increase in common stock issuable due to restricted stock units granted under the Lehman Stock Award Program effective July 1, 1996. (f) In February 1996, the Company repurchased the $200 million 8.44% Cumulative Preferred Stock owned by American Express with the proceeds from the issuance of $200 million of Quarterly Income Capital Securities Series A Subordinated Debentures with an interest rate of 8.3% maturing in 2035. The repurchase of the Preferred Stock included a premium of $2 million over the par value, which represents a one-time decrease in income available to common shareholders for purposes of calculating earnings per share. (g) This calculation includes restricted stock units granted under the Lehman Stock Award Programs included in stockholders' equity. -----END PRIVACY-ENHANCED MESSAGE-----