-----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, Np6QI9nEsIU/YQCUbFbtHiPn0Zddrj62u2K4A6we+YW5fxz6aqFvS26gLSuAYtBj mF1wR6uX9YbF51OWxGlZmg== 0000912057-01-522135.txt : 20010702 0000912057-01-522135.hdr.sgml : 20010702 ACCESSION NUMBER: 0000912057-01-522135 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010629 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: 11-K SEC ACT: SEC FILE NUMBER: 001-09466 FILM NUMBER: 1672087 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 11-K 1 a2053286z11-k.txt FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM 11-K -------------------------- [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to ______________ -------------------------------- COMMISSION FILE NUMBER 1-7657 -------------------------------- A. Full title of the plan and the address of the plan, if different from that of the issuer named below: LEHMAN BROTHERS HOLDINGS INC. TAX DEFERRED SAVINGS PLAN LEHMAN BROTHERS HOLDINGS INC. 3 WORLD FINANCIAL CENTER NEW YORK, NY 10285 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: LEHMAN BROTHERS HOLDINGS INC. 3 WORLD FINANCIAL CENTER NEW YORK, NY 10285 FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION LEHMAN BROTHERS HOLDINGS INC. TAX DEFERRED SAVINGS PLAN YEARS ENDED DECEMBER 31, 2000, AND DECEMBER 30, 1999 WITH REPORT OF INDEPENDENT AUDITORS Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Financial Statements and Supplemental Information Years ended December 31, 2000, and December 30, 1999 CONTENTS Report of Independent Auditors....................................... 1 Financial Statements Statements of Net Assets Available for Plan Benefits................. 2 Statements of Changes in Net Assets Available for Plan Benefits...... 3 Notes to Financial Statements........................................ 4 Supplemental Information Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year............................................. 13 Schedule H, Line 4(j)--Schedule of Reportable Transactions............ 14 Report of Independent Auditors Employee Benefit Plans Committee Lehman Brothers Holdings Inc. We have audited the accompanying statements of net assets available for plan benefits of the Lehman Brothers Holdings Inc. Tax Deferred Savings Plan (the "Plan") as of December 31, 2000 and December 30, 1999, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 2000 and December 30, 1999, and the changes in its net assets available for plan benefits for the years then ended in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes at end of year as of December 31, 2000, and reportable transactions for the year then ended, are presented for purposes of additional analysis and not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. June 22, 2001 /s/ Ernst & Young LLP 1 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Statements of Net Assets Available for Plan Benefits
DECEMBER DECEMBER 31, 2000 30, 1999 ----------------------------- ASSETS Investments, at fair value $605,595,107 $590,603,557 Cash and short-term investments 3,176,308 17,092,954 Participant loans 4,939,962 5,084,521 Other receivables 2,223,678 2,137,116 Interest and dividends receivable 18,507 383,872 ----------------------------- Total assets 615,953,562 615,302,020 LIABILITIES Accrued and other liabilities 248,224 229,229 ----------------------------- Net assets available for plan benefits $615,705,338 $615,072,791 =============================
SEE NOTES TO FINANCIAL STATEMENTS. 2 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Statements of Changes in Net Assets Available for Plan Benefits
YEARS ENDED DECEMBER DECEMBER 31, 2000 30, 1999 -------------------------------- Investment income: Interest and dividends $ 15,374,959 $ 16,384,590 Net realized and unrealized appreciation (depreciation) in fair value of investments (18,416,542) 119,640,104 -------------------------------- (3,041,583) 136,024,694 Contributions: Employer 1,970,878 2,045,136 Participants 39,967,370 34,215,645 Rollovers 6,454,020 5,728,220 -------------------------------- 48,392,268 41,989,001 Administrative fees (699,131) (183,453) Participant withdrawals (44,019,007) (40,785,732) -------------------------------- (44,718,138) (40,969,185) Net increase 632,547 137,044,510 Net assets available for plan benefits, beginning of year 615,072,791 478,028,281 -------------------------------- Net assets available for plan benefits, end of year $ 615,705,338 $ 615,072,791 ================================
SEE NOTES TO FINANCIAL STATEMENTS. 3 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements December 31, 2000 1. DESCRIPTION OF THE PLAN GENERAL The Lehman Brothers Holdings Inc. Tax Deferred Savings Plan (the "Plan") is a defined contribution plan. The Plan, which became effective January 1, 1984, was amended and restated effective March 29, 2001. Under the terms of the Plan, qualified employees of Lehman Brothers Holdings Inc. ("Lehman") and its participating subsidiaries (collectively, the "Company") are eligible to participate in the plan as soon as administratively possible after their date of employment. Effective January 1, 2001 the plan year and related trust fiscal and taxable years were changed to the calendar year, with an intervening short plan year beginning and ending on December 31, 2000. Prior to this, the plan year and related trust and fiscal years ran from December 31 through December 30. For the short plan year beginning and ending on December 31, 2000 there were no employee contributions, employer contributions, transfers between funds or investment experience. The short-term interest earned on December 31, 2000 has been deemed de minimis. This interest was included with the interest earnings for the month of December 2000 as part of the December 30, 2000 valuation of the Plan. As such, the opening and closing balances for the short plan year beginning and ending on December 31, 2000 are identical to closing balances for the plan year ending on December 30, 2000. The Plan is subject to the provisions of ERISA. A complete description of the Plan is contained in the Plan document available to all participants from the Plan Administrator. CONTRIBUTIONS Upon enrollment, a participant may elect to contribute, on a pre-tax basis, between one and fifteen percent of eligible compensation, as defined in the Plan document. The Company may make a contribution, in Lehman stock or cash, on behalf of eligible participants who have completed 12 months of service and are employees on the last day of the Plan year. The amount of the contribution, if any, will be determined by the Company's Board of Directors. If a Company contribution is made it will be allocated as follows: 4 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) 1. Participants whose compensation is below $37,800 per year and are not Investment Representatives, Investment Representative Trainees, Branch Managers, or Institutional Salespeople will receive a Company contribution of $400 plus a matching contribution of 100 percent of the first $600 of the employee's Before-Tax contributions. 2. Participants whose compensation is between $37,800 and $100,000 per year will receive a matching contribution of up to 100 percent of the first $1,000 of the employee's Before-Tax contributions. Company contributions to participants whose compensation is between $37,800 and $100,000 per year will be made only if there are funds remaining after contributions are made for participants making less than $37,800 per year. 3. Company contributions are not made for participants whose compensation exceeds $100,000 per year. In 2000 and 1999, Company contributions were made in cash which was used to purchase common stock in the Company. Participant's Before-Tax Contributions are not subject to tax until distribution. The Internal Revenue Code of 1986, as amended (the "Code"), provides that Before-Tax Contributions (and any elective deferrals to other plans containing a cash or deferred arrangement) will be included in a participant's gross income to the extent such contributions exceed the statutory limitation, which is indexed for inflation. The maximum limitation amount was $10,500 for 2000 and $10,000 for 1999. The Company's contributions on behalf of a participant, as well as the income and appreciation on amounts invested in the investment funds offered under the Plan, are not includable in the participant's taxable income until distributed. Rollover contributions represent from contributions to the Plan of certain assets previously held on behalf of participants by other qualified plans. 5 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) VALUATION OF PARTICIPANT ACCOUNTS Separate accounts are maintained for each participant whereby the participant's account is credited for contributions and credited or charged, as appropriate, for investment experience. Participant accounts are also charged for withdrawals and loans. The periodic allocation of investment experience is based upon the participant's beneficial interest in each of the investment funds on the valuation date. INVESTMENTS Investment of contributions among the investment funds can be made in increments of 10%, with a maximum of 50% of contributions permitted to be invested in the Lehman Brothers Holdings Inc. Common Stock Fund. Participants can elect to change their contribution rate and investment direction of new contributions on a monthly basis. Participants may also elect to transfer existing fund balances among investment funds, generally on a monthly basis. The following table presents the fair value of investments held by the plan at December 31, 2000 and December 30, 1999, respectively:
DECEMBER DECEMBER 31, 2000 30, 1999 ----------------------------- Investments, at fair value: Mutual Funds $356,317,214 $380,837,885 Fixed Income Fund 95,868,260 85,479,027 American Express Company Common Stock 57,438,077 62,884,140 Lehman Brothers Holdings Inc. Common Stock 95,971,556 61,402,505 ----------------------------- Total $605,595,107 $590,603,557 =============================
6 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED)
YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 30, 1999 ------------------------------------ Net appreciation (depreciation) in fair value of investments: Mutual Funds $ (51,274,490) $ 67,148,527 American Express Company Common Stock (2,152,704) 22,398,898 Lehman Brothers Holdings Inc. Common Stock 35,010,652 30,092,679 ------------------------------------ $ (18,416,542) $ 119,640,104 ====================================
INVESTMENTS IN EXCESS OF 5% OF NET ASSETS AVAILABLE FOR PLAN BENEFITS The following is a schedule of investments held in excess of 5% of the net assets available for plan benefits at the end of 2000 and 1999:
FAIR VALUE AT FAIR VALUE AT DECEMBER DECEMBER Funds 31, 2000 30, 1999 ------------------------------ Lehman Brothers Holdings Inc. Common Stock $ 95,971,556 $ 61,402,505 Twentieth Century Ultra Investors Fund 94,871,177 114,308,128 Vanguard Institutional Index Fund 77,808,442 85,662,574 American Express Company Common Stock 57,438,077 62,884,140 10 Uncommon Values Fund 46,281,565 47,434,807 Templeton Foreign Fund 40,290,941 42,905,230
7 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) BENEFITS A participant may elect, after attaining the age of 59-1/2, to withdraw all or a portion of the value of his accounts, provided that each withdrawal is at least $1,000 (or is 100% of the value of his account if less than $1,000). Withdrawals by actively employed participants before the age of 59-1/2 are permitted for before-tax contributions and pre-1989 earnings thereon, only after meeting specified financial hardship criteria and after obtaining approval by the Employee Benefit Plans Committee of the Company. A participant can elect to withdraw all or a portion of their rollover contribution made to the Plan. Although hardship and rollover withdrawals are allowed, a participant may be subject to an additional 10% tax imposed by the Code. If a participant's employment with the Company terminates for a reason other than death, any distributions made before age 59 1/2 must be in the form of a lump-sum payment. However, if the balance in a participant's account exceeds $5,000, payment will not be made before age 65 without prior consent. Upon death, the balance in the participant's account is paid to the designated beneficiary (as provided by the Plan) in a lump-sum payment. BENEFITS PAYABLE Benefits payable to those participants who have elected to receive a distribution (or be paid automatically as described above) from the Plan but have not yet been paid was $5,931,157 and $7,166,446 in 2000 and 1999, respectively. VESTING Plan participants are 100 percent vested in all amounts in their respective Plan accounts. 8 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) INCOME TAX STATUS The Plan received a determination letter from the Internal Revenue Service ("IRS") dated February 14, 1995, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code ("Code") and, therefore, the related trust is exempt from taxation. The Plan has been amended subsequent to the receipt of the determination letter. The Employee Benefit Plans Committee intends to apply for a new determination letter from the IRS. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Employee Benefit Plans Committee believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. 9 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PARTICIPANT LOANS RECEIVABLE Participants may borrow from their plan accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their vested account balance, whichever is less. Loan transactions are treated as a transfer from (to) the investment fund to (from) the loan account. Loan terms range from 1 year to 5 years or up to 10 years for the purchase of a primary residence as long as documentation is provided. The loans are secured by one half of the balance in the participant's accounts and bear interest at the rate of prime plus one. Principal and interest are paid ratably through biweekly or monthly payroll deductions, depending on the frequency with which the employee is paid. Participants who terminate with outstanding loan balances have until the end of the quarter following the quarter in which they terminate to pay the balance of their loan in full, in one lump sum payment. Loans not repaid in that timeframe will be reported as taxable distributions. Outstanding loan balances will also be treated as taxable distributions for those participants who request a distribution of their account prior to repaying their loan. For the year ended December 31, 2000, $681,389 in outstanding loan balances have been reported as taxable distributions to participants. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES VALUATION OF INVESTMENTS Investments in mutual funds are valued at the quoted redemption prices on the last business day of the Plan year; investments in the common stock of American Express and the Company are valued at the quoted market price on the last business day of the Plan year; short-term investments and deposits with insurance companies in connection with contracts are valued at cost plus accrued interest. Purchase and sales of securities are reflected on a trade-date basis. OTHER Dividend income is recorded on the ex-dividend date. Income from other investments is recorded on the accrual basis. 10 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Certain financial statement items for the year ended December 31, 1999 have been reclassified to conform to the 2000 presentation. 3. THIRD PARTY ADMINISTRATIVE FEES Except to the extent paid by the Company, all expenses of the Plan are paid by the Plan. In 2000 and 1999, the Plan was charged $699,131 and $183,453 for third party administrative expenses incurred during the respective years. The Company paid all expenses not directly relating to the administration of the Plan. 4. PLAN TERMINATION While it has not expressed any intent to do so, the Company has the right to terminate the Plan at any time subject to the provisions set forth in ERISA and the Code. 5. SUBSEQUENT EVENTS Effective February 1, 2001 Fidelity Investments became the Recordkeeping, Trustee and Investment Services provider for the Plan. Fidelity was selected by the Employee Benefit Plans Committee following an extensive review of the top-tier 401(k) providers in the Large Corporate Plan marketplace. New services and enhancements available to participants (effective March 29, 2001) include daily valuation of accounts, an expanded menu of investment options and access to online planning tools. 11 Supplemental Information 12 EIN: #13-3216325 Plan #003 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year December 31, 2000
PAR VALUE/ CURRENT VALUE COST AT NUMBER OF AT DECEMBER DECEMBER SHARES 31, 2000 31, 2000 ----------------------------------------------------- FIXED INCOME FUND Allstate Life Insurance Co.: Contract #GICA5584 8,727,332 $ 8,727,332 $ 8,727,332 Contract #GICA5806 2,891,337 2,891,337 2,891,337 American International Life Assurance Company of New York: Contract #18180T 4,968,231 4,968,231 4,968,231 Bank of America: Contract #99-238 14,235,459 14,235,459 14,235,459 Chase Manhattan Bank: Contract #431429-T 13,774,517 13,774,517 13,774,517 People's Security Insurance Co.: Contract #BDA00473FR 16,082,508 16,082,508 16,082,508 Contract #BDA00568FR 6,364,402 6,364,402 6,364,402 The Principal Financial Group Contract #4-26575-01 12,769,496 12,769,496 12,769,496 New York Life Insurance Co.: Contract #30727 2,347,041 2,347,041 2,347,041 TransAmerica Life Insurance Co.: Contract #51499 2,258,044 2,258,044 2,258,044 Travelers Life Insurance Co.: Contract #GA16953 5,725,089 5,725,089 5,725,089 UBS AG: Contract #5085 5,724,804 5,724,804 5,724,804 ----------------------------- 95,868,260 95,868,260 STOCK FUNDS American Express Company Common Stock 1,045,511 57,438,077 9,606,352 Lehman Brothers Holdings Inc. Common Stock 1,416,417 95,971,556 27,916,119 ----------------------------- 153,409,633 37,522,471 MUTUAL FUNDS Twentieth Century Ultra Investors Fund 2,930,836 94,871,177 86,059,327 Prime Value Obligations Fund 14,152,260 14,152,260 14,152,260 Templeton Foreign Fund 3,896,609 40,290,941 37,481,144 Income Fund of America 1,183,955 18,872,246 18,554,184 Fidelity Capital & Income Fund 2,445,645 18,904,833 23,026,752 Vanguard Institutional Index Fund 644,536 77,808,442 78,410,439 PIMCO Total Return Fund 1,324,243 13,758,887 13,576,564 Vanguard Fixed Income Long-Term Corporate Portfolio 1,234,828 10,434,298 10,729,730 ICM Small Company Portfolio Fund 208,602 4,701,893 4,797,345 10 Uncommon Values Fund 5,637,219 46,281,565 56,230,795 Brandywine Blue Fund 589,070 16,240,672 18,436,325 ----------------------------- -- 356,317,214 361,454,865 LOAN ACCOUNT -- 4,939,962 -- ----------------------------- Total Investments -- $610,535,069 $494,845,596 =============================
13 EIN: #13-3216325 Plan #003 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Schedule H, Line 4(j)--Schedule of Reportable Transactions Year ended December 31, 2000
NUMBER NUMBER COST OF OF COST OF OF PROCEEDS ASSETS GAIN DESCRIPTION TRANSACTIONS PURCHASES TRANSACTIONS FROM SALES DISPOSED (LOSS) - -------------------------------------------------------------------------------------------------------------------------- CATEGORY (III)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS TBC Inc. Pooled Employee Funds 478 $104,855,446 344 $ 106,983,661 $106,983,661 $ - BSDT-Late Money Deposit Account 55 23,796,287 59 31,803,123 31,803,123 -
14 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Lehman Brothers Holdings Inc. Employee Benefit Plans Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. LEHMAN BROTHERS HOLDINGS INC. TAX DEFERRED SAVINGS PLAN By: /s/ Wendy M. Uvino ------------------------------------ Wendy M. Uvino Lehman Brothers Holdings Inc. Employee Benefit Plans Committee June 29, 2001 15 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 23 Consent of Independent Auditors 16 EX-23 2 a2053286zex-23.txt EXHIBIT 23 EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement of Lehman Brothers Holdings Inc. (Form S-8, File No. 33-53923), pertaining to the Lehman Brothers Holdings Inc. Tax Deferred Savings Plan (the "Plan"), of our report dated June 22, 2001, with respect to the financial statements and supplemental schedules of the Plan included in the Plan's Annual Report (Form 11-K) for the year ended December 31, 2000. /s/ Ernst & Young LLP New York, New York June 29, 2001 -----END PRIVACY-ENHANCED MESSAGE-----