-----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, OHP7awyB+gkw0803HYzClHp7hl7X+aW0nqfEJYyNooV/6coe+rr9xTbOorQHpMF7 x7H1LynAVN2Vt6Xl/71X9Q== 0000912057-00-012357.txt : 20000321 0000912057-00-012357.hdr.sgml : 20000321 ACCESSION NUMBER: 0000912057-00-012357 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000229 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000320 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: 573483 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 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): March 20, 2000 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 First Quarter Earnings On March 20, 2000 Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its first quarter 2000 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 First Quarter 2000 Earnings 99.2 Consolidated Statement of Income (Three Months Ended February 29, 2000) (Preliminary and Unaudited) 99.3 Selected Statistical Information 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 and Administrative Officer (Principal Financial Officer) Date: March 20, 2000 EXHIBIT INDEX Exhibit No. Exhibit Exhibit 99.1 Press Release Relating to First Quarter 2000 Earnings Exhibit 99.2 Consolidated Statement of Income (Three Months Ended February 29, 2000) (Preliminary and Unaudited) Exhibit 99.3 Selected Statistical Information EX-99.1 2 EXHIBIT 99.1 EXHIBIT 99.1 For Immediate Release Media Contact: William J. Ahearn (212) 526-4379 Investor Contact: Shaun Butler (212) 526-8381 LEHMAN BROTHERS REPORTS RECORD FIRST QUARTER EARNINGS OF $541 MILLION, UP 156% FROM A YEAR AGO NEW YORK, March 20, 2000 - Lehman Brothers Holdings Inc. (NYSE: LEH) today reported net income of $541 million, or $3.69 per common share (diluted), for the first quarter ended February 29, 2000. Net income increased by 156 percent over the $211 million reported for the first quarter of fiscal 1999. Net income per share increased 135 percent from $1.57 (diluted) in the year-ago quarter. The results for the fiscal 2000 first quarter were the best in the Firm's history in terms of revenues, net income, operating margin and return on equity. "This was an extremely strong quarter for Lehman Brothers, one which not only reflects the significant strength of the Firm today, but also underscores our ability to continue to enhance the organization's potential going forward," said Richard S. Fuld, Jr., Chairman and Chief Executive Officer. "Our businesses across the board performed extremely well this quarter, with equities and investment banking posting record revenues, and fixed income and private client services producing very strong results. The Firm is clearly hitting on all cylinders." Net revenues (total revenues less interest expense) for the first quarter were $2.202 billion, an increase of 97 percent from $1.118 billion in the first quarter of fiscal 1999. The revenue total was the highest in the Firm's history, surpassing the next highest quarterly total by more than $700 million. Mr. Fuld noted that the gains in the first quarter reflected record performance in equity underwriting and M&A advisory activities, as well as significant increases in the Firm's institutional customer flow activities across most equity and fixed income products. Mr. Fuld also pointed out that the breadth of Lehman Brothers' revenues for the first quarter of fiscal 2000 underscores the success of the Firm's efforts to diversify its revenue mix by business and by region. Mr. Fuld said the quarter continued the trend of significant revenue generation from each of the Firm's major business units, with equities actually representing the largest share of revenues for the period. Non-interest expenses for the quarter were $1,408 million, compared with $809 million in the fiscal 1999 first quarter. Nonpersonnel expenses in the fiscal 2000 first quarter were $263 million, compared with $242 million in the previous year's first quarter. Nonpersonnel expenses as a percentage of net revenues decreased in the quarter to 11.9 percent from 21.7 percent a year ago. Compensation and benefits as a percentage of net revenues was 52 percent, as the Firm stepped up its rate of investment to accelerate its growth, and take advantage of rapidly expanding opportunities in a number of businesses, particularly investment banking, equities, and Europe. The Firm also increased its investment in information technology and e-commerce activities, to support its growth strategy. For the fiscal 2000 first quarter, the Firm's return on common equity was a record 36.8 percent, more than double the 17.2 percent ROE of a year ago. For the quarter ended February 29, 2000, pre-tax operating margin was also a record at 36.1 percent, compared with 27.6 percent in the year-ago first quarter. Return on common equity for the first fiscal quarter of 2000 is calculated using net income before adjusting for a special preferred dividend. As a result of the level of earnings Lehman Brothers attained in the first quarter of fiscal 2000, 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. As of February 29, 2000, Lehman Brothers stockholders' equity and trust preferred securities totaled $7.3 billion and total capital (stockholders' equity, trust preferred securities, and long-term debt) was $39.6 billion. Book value per common share was $48.79. Lehman Brothers is a global investment bank with leadership positions in corporate finance, advisory services, private equity, 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 Information Attached) EX-99.2 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 February 29 February 28 Dollar Change 2000 1999 Inc/(Dec) -------------- ------------- --------------- Revenues: Principal transactions $ 1,114 $ 534 Investment banking 602 313 Commissions 229 146 Interest and dividends 4,313 3,581 Other 82 17 ------- ------- Total revenues 6,340 4,591 Interest expense 4,138 3,473 ----- ----- Net revenues 2,202 1,118 97% ----- ----- Non-interest expenses: Compensation and benefits 1,145 567 Technology and communications 84 82 Brokerage and clearance 58 58 Business development 35 28 Professional fees 32 22 Occupancy 30 28 Other 24 24 ------- ---- Total non-interest expenses 1,408 809 74% ----- --- Income before taxes and dividends on trust preferred securities 794 309 157% Provision for income taxes 239 96 Dividends on trust preferred securities 14 2 ------- -------- Net income $ 541 $ 211 156% ===== ===== Net income applicable to common stock $ 482 $ 198 143% ===== ===== Earnings per common share Basic $3.92 $1.62 ===== ===== Diluted $3.69 $1.57 ===== =====
LEHMAN BROTHERS HOLDINGS INC. SEGMENT INFORMATION (Preliminary and Unaudited) (In millions) Three Months Ended February 29 February 28 Percentage 2000 1999 Change -------------- ------------- -------------- Investment Banking: Net Revenue $ 593 $ 309 92% Pre-tax 179 84 113% Capital Markets: Net Revenue 1,339 687 95% Pre-tax 506 203 149% Client Services: Net Revenue 270 122 121% Pre-tax 109 22 395% Total Firm: Net Revenue $ 2,202 $ 1,118 97% Pre-tax 794 309 157% Note - Segment lines include the following business activities: Investment Banking - o Equity and debt underwriting o Mergers and acquisitions and other financial advisory Capital Markets - o Institutional sales and trading in equity and fixed income products Client Services - o Customer flow and asset management services to high net worth retail clients o Private equity management and incentive fees EX-99.3 4 EXHIBIT 99.3 EXHIBIT 99.3 LEHMAN BROTHERS HOLDINGS INC. SELECTED STATISTICAL INFORMATION (Preliminary and Unaudited) (Dollars in millions, except per share data)
Quarters Ended Twelve Months ------------------------------------------------------------------- ------------------ 2/29/00 11/30/99 8/31/99 5/31/99 2/28/99 1999 ------------ -------------- ------------- ------------- ------------ ------------------ Income Statement Net Revenues $2,202 $1,411 $1,356 $1,455 $1,118 $5,340 Non-Interest Expenses: Compensation and Benefits 1,145 715 688 738 567 2,707 Nonpersonnel Expenses 263 258 251 251 242 1,002 Net Income 541 301 290 330 211 1,132 Net Income Applicable to Common Stock 482 292 279 268 198 1,037 Earnings per Common Share Basic $3.92 $2.41 $2.30 $2.19 $1.62 $8.53 Diluted $3.69 $2.28 $2.20 $2.09 $1.57 $8.15 Financial Ratios (%) Return on Common Equity (annualized) (a) 36.8 21.6 22.1 26.3 17.2 21.8 Return on Common Equity (annualized) (b) 33.3 21.6 22.1 22.1 17.2 20.8 Pretax Operating Margin 36.1 31.1 30.8 32.0 27.6 30.5 Compensation & Benefits/ Net Revenues 52.0 50.7 50.7 50.7 50.7 50.7 Effective Tax Rate 30.1 28.0 27.0 27.0 31.0 28.0 Balance Sheet Total Assets $214,000 $192,244 $202,149 $191,543 $179,305 Total Assets Excluding Matched Book (c) 137,000 130,022 136,106 128,822 121,881 Common Stockholders' Equity 5,986 5,595 5,192 4,935 4,731 Total Stockholders' Equity + Trust Preferred Securities 7,296 6,993 6,660 6,453 5,964 Total Capital (d) 39,610 37,684 36,517 34,915 32,682 Book Value per Common Share (e) 48.79 45.50 42.91 40.58 38.72 Other Data (#s) Employees 9,026 8,893 8,729 8,511 8,695 Common Stock Outstanding 120,150,218 119,912,810 120,070,089 119,700,830 118,977,746 Average Shares Basic 123,027,441 120,761,065 121,317,358 122,144,018 121,942,892 121,477,059 Diluted (f) (g) 131,205,984 128,994,372 129,063,197 130,364,705 125,776,277 129,282,672
(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, Trust Preferred Securities and stockholders' equity. (e) This calculation includes restricted stock units granted under the Lehman Stock Award Programs included in stockholders' equity. (f) For the quarters ended November 30, August 31 and May 31, 1999, the assumed conversion of Series A and B Convertible Preferred Stock into 2,118,396, 2,607,680 and 2,912,505 common shares had the effect of decreasing diluted earnings per share by $0.01. For the year ended November 30, 1999 the assumed conversion of Series A and B Convertible Preferred Stock into 2,779,737 common shares had the effect of decreasing diluted earnings per share by $0.04. (g) For the quarter ended February 29, 2000, the assumed conversion of Series A and B convertible Preferred Stock into 1,221,740 common shares had the effect of decreasing diluted earnings per share by $0.02. -----END PRIVACY-ENHANCED MESSAGE-----