-----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, NieTz8Puv2nCx8+xcteBzeBQH3dnGtdGvHnMII2UG6VrRCOfSeXN4/R/jkns/x0Q 5GcSgJs2F0Rl28uiPROe0Q== 0000806085-99-000110.txt : 19990924 0000806085-99-000110.hdr.sgml : 19990924 ACCESSION NUMBER: 0000806085-99-000110 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990831 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990923 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: SEC FILE NUMBER: 001-09466 FILM NUMBER: 99715910 BUSINESS ADDRESS: STREET 1: AMERICAN EXPRESS TWR STREET 2: 3 WORLD FINANCIAL CNTR CITY: NEW YORK STATE: NY ZIP: 10285 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. 3RD QUARTER 1999 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 23, 1999 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 Earnings On September 23, 1999 Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its third quarter 1999 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 Third Quarter 1999 Earnings 99.2 Consolidated Statement of Income (Three Months Ended August 31, 1999) (Preliminary and Unaudited) 99.3 Consolidated Statement of Income (Nine Months ended August 31, 1999) (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/ John L. Cecil John L. Cecil Chief Financial Officer (Principal Financial Officer) Date: September 23, 1999 EXHIBIT INDEX Exhibit No. Exhibit Exhibit 99.1 Press Release Relating to Third Quarter 1999 Earnings Exhibit 99.2 Consolidated Statement of Income (Three Months Ended August 31, 1999) (Preliminary and Unaudited) Exhibit 99.3 Consolidated Statement of Income (Nine Months ended August 31, 1999) (Preliminary and Unadudited) Exhibit 99.4 Selected Statistical Information EX-99 2 EXHIBIT 99.1 [GRAPHIC OMITTED] Exhibit 99.1 For Immediate Release MEDIA CONTACT: William J. Ahearn (212) 526-4379 INVESTOR CONTACT: Shaun Butler (212) 526-8381 LEHMAN BROTHERS REPORTS EARNINGS OF $290 MILLION IN THIRD QUARTER, UP 92% Posts Record Earnings Per Share of $2.20, and Record Nine Month Earnings of $830 Million NEW YORK, September 23, 1999 -- Lehman Brothers Holdings Inc. (NYSE: LEH) today reported net income of $290 million, or $2.20 per common share (diluted), for the third quarter ended August 31, 1999. Net income increased by 92 percent from the $151 million earned in the third quarter of 1998. Earnings per share increased by 100 percent, from $1.10 (diluted) in the year-earlier quarter. The current quarter's performance represented the highest quarterly earnings per share that Lehman Brothers has ever posted, surpassing the $2.12 per share earned in the fiscal 1998 second quarter. For the first nine months of fiscal 1999, net income was a record $830 million, an increase of 25 percent from $662 million in net income for the first nine months of fiscal 1998. -- more -- Third Quarter 1999/page 2 "This continues to be a terrific year for Lehman Brothers, with another quarter of record performance," said Richard S. Fuld, Jr., Chairman and Chief Executive Officer. "The Firm is well on its way to having its most profitable year ever, a clear indication that our strategy of expanding key business franchises and broadening our international presence has been successful." Mr. Fuld noted that the strong performance in revenues, operating margin, net income, and return on equity in the fiscal 1999 third quarter reflected the continuing shift in the Firm's business mix to high-return, franchise-based activities, particularly investment banking and equities, as well as significant growth in European operations. Net revenues (total revenues less interest expense) for the third quarter were $1.356 billion, an increase of 46 percent from $930 million in the third quarter of fiscal 1998. Mr. Fuld noted that the quarter was among the best the Firm had ever posted in terms of net revenues. For the first nine months of fiscal 1999, net revenues were a record $3.929 billion, an increase of 14 percent from $3.448 billion in the fiscal 1998 first nine months. Non-interest expenses for the third quarter were $939 million. Compensation and benefits as a percentage of net revenues remained at 50.7 percent for the 18th successive quarter. Nonpersonnel expenses were $251 million, the same as in the previous fiscal year's third quarter, despite continued investments in a number of key strategic businesses and in Year 2000 technology initiatives. For the first nine months of fiscal 1999, non-interest expenses were $2.737 billion. -- more -- Third Quarter 1999/page 3 Nonpersonnel expenses were $745 million, compared with $741 million in the first nine months of fiscal 1998. For the fiscal 1999 third quarter, the Firm's pre-tax margin was 30.8 percent, up from 22.3 percent in the third quarter of fiscal 1998. Return on common equity was 22.1 percent for the quarter ended August 31, 1999, compared with 13 percent a year ago. For the first nine months of fiscal 1999, the Firm's pre-tax margin was 30.3 percent, compared with 27.8 percent for the first nine months of fiscal 1998; for the same period, return on common equity was 21.9 percent, compared with 20.1 percent in fiscal 1998. (Return on common equity for the nine months of both 1999 and 1998 is calculated using net income before adjusting for special preferred dividends.) As of August 31, 1999, Lehman Brothers stockholders' equity and trust preferred securities were $6.7 billion and total capital (stockholders' equity, trust preferred, and long-term debt) was $36.5 billion. Book value per common share was $42.91. As a result of the level of earnings Lehman Brothers attained in the first nine months of 1999 and 1998, earnings per share calculations include the impact of a special preferred dividend of $50 million expected to be paid to American Express Company and to Nippon Life Insurance Company at year end. American Express and Nippon Life are entitled to receive an annual non-cumulative preferred dividend equal to 50 percent of the amount by which the Firm's net income for the full fiscal year exceeds $400 million, up to a maximum of $50 million per year, through mid-year 2002. The special preferred dividend, while not payable until year end, was accrued in the second quarter of fiscal 1999. -- more -- Third Quarter 1999/page 4 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. # # # EX-99 3 EXHIBIT 99.2 Exhibit 99.2 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF INCOME (Preliminary and Unaudited) (In millions, except per share data)
Three Months Ended Percentage of August 31 August 31 Dollar Change 1999 1998 Inc/(Dec) -------------- ------------- --------------- Revenues: Principal transactions $493 $131 * Investment banking 498 493 1% Commissions 151 137 10 Interest and dividends 3,590 5,254 (32) Other 33 (52) * ------- --------- Total revenues 4,765 5,963 (20) Interest expense 3,409 5,033 (32) ----- ----- Net revenues 1,356 930 46 ----- ------ Non-interest expenses Compensation and benefits 688 472 46 Technology and communications 79 83 (5) Brokerage and clearance 56 63 (11) Business development 33 27 22 Occupancy 29 29 Professional fees 31 29 7 Other 23 20 15 ------- ------- Total non-interest expenses 939 723 30 ------ ------ Income before taxes and dividends on trust preferred securities 417 207 * Provision for income taxes 112 56 * Dividends on trust preferred securities 15 _____ * ------- Net income $ 290 $ 151 92 ===== ===== Net income applicable to common stock $ 279 $ 139 * ===== ===== Earnings per common share Basic $2.30 $1.15 ===== ===== Diluted $2.20 $1.10 ===== =====
* Denotes equal to or greater than 100 percent. EX-99 4 EXHIBIT 99.3 Exhibit 99.3 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF INCOME (Preliminary and Unaudited) (In millions, except per share data)
Nine Months Ended Percentage of August 31 August 31 Dollar Change 1999 1998 Inc/(Dec) -------------- ------------- --------------- Revenues: Principal transactions $1,682 $1,142 47% Investment banking 1,286 1,336 (4) Commissions 465 378 23 Interest and dividends 10,798 13,235 (18) Other 57 6 * --------- ---------- Total revenues 14,288 16,097 (11) Interest expense 10,359 12,649 (18) ------ ------ Net revenues 3,929 3,448 14 ------- ------- Non-interest expenses Compensation and benefits 1,992 1,749 14 Technology and communications 242 243 Brokerage and clearance 175 183 (4) Business development 91 79 15 Occupancy 85 87 (2) Professional fees 82 78 5 Other 70 71 (1) ------- ------- Total non-interest expenses 2,737 2,490 10 ----- ----- Income before taxes and dividends on trust preferred securities 1,192 958 24 Provision for income taxes 334 296 13 Dividends on trust preferred securities 28 _____ * ------- Net income $ 830 $ 662 25 ===== ===== Net income applicable to common stock $ 745 $ 587 27 ===== ===== Earnings per common share Basic $6.12 $4.86 ===== ===== Diluted $5.86 $4.67 ===== =====
* Denotes equal to or greater than 100 percent. EX-99 5 EXHIBIT 99.4 Exhibit 99.4 LEHMAN BROTHERS HOLDINGS INC. SELECTED STATISTICAL INFORMATION (Preliminary and Unaudited) (Dollars in millions, except per share data)
Quarters Ended ------------- ------------- ------------- -------------- ------------- ------------- 8/31/99 5/31/99 2/28/99 11/30/98 8/31/98 5/31/98 ------------- ------------- ------------- -------------- ------------- ------------- Income Statement Net Revenues $1,356 $1,455 $1,118 $665 $930 $1,473 Non-Interest Expenses: Compensation and Benefits 688 738 567 337 472 747 Nonpersonnel Expenses 251 251 242 234 251 250 Net Income 290 330 211 74 151 324 Net Income Applicable to Common Stock 279 268 198 62 139 268 Earnings per Common Share Basic $2.30 $2.19 $1.62 $0.51 $1.15 $2.22 Diluted $2.20 $2.09 $1.57 $0.51 $1.10 $2.12 Financial Ratios (%) Return on Common Equity (annualized)(a) 22.1 26.3 17.2 5.6 13.0 29.9 Return on Common Equity (annualized)(b) 22.1 22.1 17.2 5.6 13.0 25.2 Pretax Operating Margin 30.8 32.0 27.6 14.1 22.3 32.4 Compensation & Benefits/Net Revenues 50.7 50.7 50.7 50.7 50.7 50.7 Effective Tax Rate 27.0 27.0 31.0 20.5 27.0 32.0 Balance Sheet Total Assets $203,000 $191,543 $179,305 $153,890 $191,074 $179,067 Total Assets Excluding Matched Book(c) 137,000 128,822 121,881 111,509 133,787 130,140 Common Stockholders' Equity 5,192 4,935 4,731 4,505 4,391 4,326 Total Stockholders' Equity + Trust Preferred Securities 6,660 6,453 5,964 5,413 5,349 5,084 Total Capital(d) 36,517 34,915 32,682 32,754 33,730 31,929 Book Value per Common Share(e) 42.91 40.58 38.72 37.06 36.35 35.93 Other Data (#'s) Employees 8,729 8,511 8,695 8,873 8,839 8,387 Common Stock Outstanding 120,070,089 119,700,830 118,977,746 113,657,877 116,673,240 117,114,203 Average Shares Basic 121,317,358 122,144,018 121,942,892 120,726,366 121,523,227 120,633,663 Diluted(f) 129,063,197 130,364,705 125,776,277 122,527,953 126,222,483 126,301,259
- -------- (a) Return on common equity calculated using net income before adjusting for special preferred dividends. (b) Return on common equity calculated using net income after adjusting for special preferred dividends. (c) Matched book is defined as the lower of securities purchased under agreements to resell or securities sold under agreements to repurchase. (d) Total capital includes long-term debt and stockholders' equity, as well as Trust Preferred Securities, where applicable. (e) This calculation includes restricted stock units granted under the Lehman Stock Award Programs included in stockholders' equity. (f) For the quarters ended August 31 and May 31, 1999, the assumed conversion of Series A and B Convertible Preferred Stock into 2,607,680 and 2,912,505 common shares had the effect of decreasing diluted earnings per share by $0.01. -----END PRIVACY-ENHANCED MESSAGE-----