-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, rdiIFPoD3O1np93HUA5Bl4cZPR0ND+wAT0vbu/KMtvvCOj8KPDizFUdEXgk6p2wv MERWkPosi8pXHVbaMZGHNA== 0000950123-94-001247.txt : 19940803 0000950123-94-001247.hdr.sgml : 19940803 ACCESSION NUMBER: 0000950123-94-001247 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19940719 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19940729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEHMAN BROTHERS HOLDINGS INC CENTRAL INDEX KEY: 0000806085 STANDARD INDUSTRIAL CLASSIFICATION: 6211 IRS NUMBER: 133216325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09466 FILM NUMBER: 94540937 BUSINESS ADDRESS: STREET 1: AMERICAN EXPRESS TWR STREET 2: 3 WORLD FINANCIAL CNTR CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2122982000 MAIL ADDRESS: STREET 1: AMERICAN EXPRESS TOWER STREET 2: WORLD FINANCIAL CENTER ATTN GEN COUNSEL CITY: NEW YORK STATE: NY ZIP: 10283 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 8-K 1 LEHMAN BROTHERS HOLDING INC. FORM 8-K 1 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): July 19, 1994 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 ---------------------------------------- 2 Item 5. OTHER EVENTS SECOND QUARTER AND YEAR-TO-DATE 1994 EARNINGS On July 19, 1994, Lehman Brothers Holdings Inc. (the "Registrant") issued a press release with respect to its second quarter and year-to-date 1994 earnings (the "Earnings Release"). In addition, on July 19, 1994 the Registrant also issued a press release (the "Stock Award Release") in which it announced that the Compensation and Benefits Committee of the Board of Directors of the Registrant had approved the Lehman Brothers Stock Award Program pursuant to which certain salaried, bonus eligible employees will receive an award of restricted stock units as a pre-tax advance against 1994 bonuses. Copies of the Earnings Release and the Stock Award Release follow. 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 1994 Earnings 99.2 Selected Statistical Information 99.3 Consolidated Statement of Operations (Three Months Ended June 30, 1994) (Preliminary and Unaudited) 99.4 Consolidated Statement of Operations (Six Months Ended June 30, 1994) (Preliminary and Unaudited) 99.5 Press Release Relating to Lehman Brothers Stock Award Program
The Exhibit Index to this Report is incorporated herein by reference. - 2 - 3 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: July 29, 1994 - 3 - 4 EXHIBIT INDEX Exhibit No. Exhibit Exhibit 99.1 Press Release Relating to Second Quarter 1994 Earnings Exhibit 99.2 Selected Statistical Information Exhibit 99.3 Consolidated Statement of Operations (Three Months Ended June 30, 1994) (Preliminary and Unaudited) Exhibit 99.4 Consolidated Statement of Operations (Six Months Ended June 30, 1994) (Preliminary and Unaudited) Exhibit 99.5 Press Release Relating to Lehman Brothers Stock Award Program - 4 - EX-99.1 2 PRESS RELEASE RELATING TO SEC. QTR. 1994 EARNINGS 1 EXHIBIT 99.1 2 LEHMAN BROTHERS NEWS RELEASE For Immediate Release Contact: Steven Faigen (212) 526-4379 Public Relations Shaun Butler (212) 526-8381 Investor Relations LEHMAN BROTHERS REPORTS SECOND QUARTER AND HALF-YEAR RESULTS NEW YORK, July 19, 1994 -- Lehman Brothers Holdings Inc. today reported second quarter net income from operations of $32 million compared to net income of $95 million for the businesses that comprised Lehman in the second quarter of 1993. After accounting for the after-tax charge of $12 million relating to the Firm's May 31 spin-off from the American Express Company, the Firm posted net income of $20 million. Quarterly earnings per common share were $0.11 and, when adjusted for the spin-off charge, were $0.23. Both figures are adjusted for the shares outstanding on the date of the Firm's spin-off from American Express. Richard S. Fuld, Jr., Chairman and Chief Executive Officer, stated, "We are pleased to be an independent public company, with a strong capital base that will allow us to grow our business over time. The difficult market environment that existed during our first quarter as an independent company clearly affected our operating results. Lower syndicate volumes in both equities and fixed income had a significantly adverse effect on our business. Market volatility also impaired the profitability of our customer flow activity in certain areas, resulting in a less favorable business mix. Higher revenue performance from our mortgage-backed, derivatives, financial advisory and non U.S. businesses helped to offset some of the weaknesses in our other business activities." Mr. Fuld added, "Despite the current environment, we continue to build Lehman's global presence and remain committed to our client/customer-driven strategy. While we recognize that continued investment is required to position the firm for future growth and greater operating efficiencies, we must also continue our cost reduction efforts." --more-- 3 - - -2- Revenues Net revenues (gross revenues less interest expense) of $696 million for the second quarter, declined by 22% from the prior year's period. The decrease in net revenues reflected adverse market conditions in both the United States and Europe that led to the sharp declines in underwriting and market making activities. Market making and principal transactions were $361 million, down 17% from the prior year's quarter. Rising interest rates and increased market volatility reduced the Firm's profitability in its customer flow activity and contributed to lower revenues in fixed income, equities and foreign exchange. These decreases were offset, in part, by stronger revenues in U.S. and foreign governments, mortgage-backed securities and derivatives. Investment banking revenues of $151 million represented a 27% decline from the prior year's period. Revenues were impacted by a weak syndicate calendar in fixed income and equities, offset, in part, by stronger results from financial advisory activities. Despite the weaker underwriting environment, Lehman was ranked the number two underwriter of U.S. debt and equity and the number four underwriter of debt and equity worldwide, for the half year ended June 30, 1994. Net interest and dividend revenues of $54 million decreased by 53% from the prior year's period, reflecting the combination of reduced spreads on fixed income products, higher funding costs and changes in hedging strategies. Commission revenues of $117 million for the quarter were down slightly year to year, with relatively sustained volumes of customer activity in listed securities. Expenses Non-interest expenses of $646 million, excluding the spin-off charge, reflected a 12% decline from last year's second quarter. Consistent with the lower levels of business activity in the quarter, compensation and benefits decreased to $364 million from $476 million in the prior year. --more-- 4 - - -3- Other non-interest expenses, excluding compensation and benefits and spin-off expenses, increased 10% to $282 million in the second quarter of 1994. Increases in these expense categories, which are less sensitive to business volumes, reflected ongoing investments in the Firm's international franchise as well as additional investments in systems and technology. Capital At June 30, 1994, Lehman's stockholders' equity was $3,310 million and total capital (stockholders' equity and long-term debt) was $13,877 million. The infusion of $1,050 million of common equity and $200 million of preferred stock, in connection with the Firm's spin-off from American Express, occurred in late May, 1994. Proceeds from the capital increase were used to repay commercial paper and short-term debt. Six Month Results Net income from operations for the first half of 1994 was $87 million, before the above-mentioned spin-off expenses as well as a charge of $13 million in the first quarter related to the implementation of SFAS No. 112. Including these charges, net income for the first half of 1994 was $62 million, down 52% from the $129 million posted in 1993 for the Lehman businesses. For the first six months of 1994, earnings per common share were $0.40; six month earnings per share were $0.63, before charges for the spin-off and SFAS No. 112. In March, 1994, the Lehman Board of Directors approved a change in the Firm's fiscal year from December 31 to November 30. Consequently, the Firm will report its next quarterly earnings period for the three months ended August 31, 1994. Lehman Brothers Holdings Inc. is one of the leading global investment banks serving institutional, corporate, government and high net worth individual clients and customers through offices in New York, London, Tokyo and other major cities, worldwide. --more-- EX-99.2 3 SELECTED STATISTICAL INFORMATION 1 EXHIBIT 99.2 2 - - -4- Lehman Brothers Holdings Inc. Selected Statistical Information (Preliminary and Unaudited)
Lehman Businesses ---------- 6/30/94 3/31/94 6/30/93 ------- ------- ------- Balance Sheet (Dollars in Millions) Total Assets (a) $119,000 $112,277 $105,495 Total Assets Excluding Matched Book (b) 75,000 71,147 60,423 Common Stockholders' Equity 2,601 1,275 1,224 Total Stockholders' Equity 3,310 2,033 1,982 Total Capital (long-term debt plus stockholders' equity) 13,877 12,608 10,694 Financial Ratios (for the 3 months ended) Book Value per Common Share $24.64 N/A N/A Return on Equity (%) 2.8 N/A N/A Pretax Operating Margin (%) 7.0 10.4 18.0 Compensation & Benefits/Net Revenues (%) (c) 52.3 53.1 53.3 Effective Tax Rate (%) (d) 34.6 38 41.1 Other Data (#s) Common Stock Outstanding 105,557,170 N/A N/A Employees 8,948 9,292 N/A
(a) Reflects the FIN 39 adjustment to reported assets of $85.3 billion at June 30, 1993. (b) Matched book defined as securities purchased under agreements to resell. (c) For the period ended March 31, 1994, compensation expense excludes the severance charge of $33 million. (d) For the period ended June 30, 1994, the actual tax rate was 41.6%, reflecting the non-deductibility of certain spin-off expenses. --more-- EX-99.3 4 CONSOLIDATED STATEMENT OF OPERATIONS 1 EXHIBIT 99.3 2 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF OPERATIONS 5 (PRELIMINARY AND UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA)
Three Months Ended Three Months June 30, 1993 (Note 1) Percentage of Dollar Ended ------------------------------------ Change Inc/(Dec) June 30, Lehman Businesses Lehman 1994 Businesses Sold Total Businesses ------------ ---------- ---------- ----- -------------------- Revenues: Market making and principal transactions $ 361 $ 433 $ 127 $ 560 (17) Investment banking 151 206 60 266 (27) Commissions 117 119 346 465 (2) Interests and dividends 1,699 1,413 70 1,483 20 Other 13 19 174 193 (32) ----- ----- ----- ----- Total revenues 2,341 2,190 777 2,967 7 Interest expense 1,645 1,297 63 1,360 27 ----- ----- ----- ----- Net revenues 696 893 714 1,607 (22) Non-interest expenses: ----- ----- ----- ----- Compensation benefits 364 476 475 951 (24) Communications 51 50 58 108 2 Brokerage, commissions and clearance fees 43 43 (9) 34 Occupancy and equipment 43 42 42 84 2 Professional services 47 39 15 54 21 Advertising and market development 32 31 10 41 3 Depreciation and amortization 34 26 20 46 31 Other 32 25 53 78 28 Spin-off expenses 15 ----- ----- ----- ----- Total non-interest expenses 661 732 664 1,396 (10) ----- ----- ----- ----- Income before taxes 35 161 50 211 (78) Provision for income taxes 15 66 24 90 (77) ----- ----- ----- ----- Net income 20 95 26 121 (79) Preferred stock dividends 7 12 12 (42) ----- ----- ----- ----- Net income applicable to common stock $ 13 $ 83 $ 26 $ 109 (84) ===== ====== ===== ===== Number of shares used in per share computation (Note 2) 105.7 105.7 ===== ===== Earnings per common share $ .11 $1.04 ===== =====
Note 1: Certain prior period amounts have been reclassified to conform to the current year's presentation. Note 2: Pursuant to SEC requirements, the number of common shares used in the calculations of earnings per share includes shares issued in the spin-off. --more-- EX-99.4 5 CONSOLIDATED STATEMENT OF OPERATIONS. 6 MONTHS 1 EXHIBIT 99.4 2 LEHMAN BROTHERS HOLDINGS INC. CONSOLIDATED STATEMENT OF OPERATIONS (PRELIMINARY AND UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA) 6
Six Months Ended Six Months June 30, 1993 (Note 1) Percentage of Dollar Ended ------------------------------------ Change Inc/(Dec) June 30, Lehman Businesses Lehman 1994 Businesses Sold Total Businesses ------------ ---------- ---------- ----- -------------------- Revenues: Market making and principal transactions $ 802 $ 870 $ 282 $ 1,152 (8) Investment banking 326 370 124 494 (12) Commissions 258 235 710 945 10 Interests and dividends 3,226 2,718 136 2,854 19 Other 30 38 345 383 (21) ----- ----- ----- ----- Total revenues 4,642 4,231 1,597 5,828 10 Interest expense 3,098 2,505 125 2,630 24 ----- ----- ----- ----- Net revenues 1,544 1,726 1,472 3,198 (11) ----- ----- ----- ----- Non-interest expenses: Compensation and benefits 814 937 984 1,921 (13) Communications 101 96 109 205 5 Brokerage, commissions and clearance fees 95 86 (18) 68 10 Occupancy and equipment 85 83 83 166 2 Professional services 89 74 32 106 20 Advertising and market development 63 62 26 88 2 Depreciation and amortization 65 50 40 90 30 Other 61 73 104 177 (16) Severance charge 33 Spin-off expenses 15 Loss on sale of Shearson 535 535 Reserves for non-core businesses 32 120 152 ----- ----- ----- ----- Total non-interest expenses 1,421 1,493 2,015 3,508 (5) ----- ----- ----- ----- Income (loss) from continuing operations before taxes and cumulative effect of change in accounting principle 123 233 (543) (310) (47) Provision for income taxes 48 104 105 209 (54) ----- ----- ----- ----- Income (loss) from continuing operations before cumulative effect of change in accounting principle 75 129 (648) (519) (42) Income from discontinued operations, net of taxes: Income from operations 24 24 Gain on disposal Net income from discontinued operations 165 165 ----- ----- ----- ----- 189 189 ----- ----- ----- ----- Income (loss) before cumulative effect of change in accounting principle 75 129 (459) (330) (42) Cumulative effect of change in accounting principle (13) ----- ----- ----- ----- Net income (loss) 62 129 (459) (330) (52) Preferred stock dividends 19 24 24 (21) ----- ----- ----- ----- Net income (loss) applicable to common stock $ 43 $ 105 $(459) $(354) (59) ===== ====== ====== ====== Number of shares used in per share computation (Note 2) 105.7 105.7 ===== ====== Earnings per common share: Income (loss) before cumulative effect of change in accounting principle $ .52 $(3.14) Discontinued operations - 1.79 Cumulative effect of change in accounting principle (.12) - ----- ------- Net income (loss) $ .40 $(3.35) ===== =======
Note 1: Certain prior period amounts have been reclassified to conform to the current year's presentation. Note 2: Pursuant to SEC requirements, the number of common shares used in the calculations of earnings per share includes shares issued in the spin-off. ####### EX-99.5 6 PRESS RELEASE RELATING TO LEHMAN BRS. STOCK AWARD 1 EXHIBIT 99.5 2 LEHMAN BROTHERS NEWS RELEASE For Immediate Release CONTACT: Steven Faigen (212) 526-4379 LEHMAN BROTHERS INSTITUTES STOCK AWARD PROGRAM NEW YORK, July 19, 1994 -- Lehman Brothers Holdings Inc. (NYSE: LEH) today announced that the Compensation and Benefits Committee of the Board of Directors has approved the Lehman Brothers Stock Award Program. Under the program, salaried, bonus-eligible employees as of June 30, 1994 whose total compensation exceeds $75,000 will receive an award of restricted stock units, effective July 1, 1994, as a pre-tax advance against their 1994 bonuses. Salaried, bonus-eligible employees with 1993 total compensation of $75,000 or less will receive a one-time grant of 50 restricted stock units. Certain vesting and sales restrictions will apply to all units, and they will convert into Lehman Brothers common stock on a one-for-one basis in five years. For the Operating Committee, total compensation is based on the financial performance of the Firm. Under the Stock Award Program, Operating Committee members will receive restricted stock units representing up to 50 percent of their total 1994 compensation. Messrs. Richard S. Fuld, Jr., Chairman and Chief Executive Officer, and T. Christopher Pettit, President and Chief Operating Officer, will receive up to 62.5 percent of their total compensation in restricted stock units. These awards carry the same vesting and sales restrictions as those outlined above for other employees receiving awards. The Stock Award Program has been launched now to encourage all employees to increase shareholder value from Lehman Brothers' inception as a public company. - more - 3 Stock Award Program p. 2 "This action represents a significant step toward our goal of both broadening and increasing our level of employee ownership," stated Mr. Fuld. "The Stock Award Program should drive shareholder value by providing Lehman Brothers employees with a direct stake in the financial results of the Firm." Approximately 5.2 million units will be awarded to employees this year, excluding members of the Firm's Operating Committee as described earlier. In order to meet the share requirements of the program, Lehman Brothers Holdings Inc. has been authorized to repurchase shares in the open market, as circumstances and events permit. The Firm also has the authority to issue shares for these programs. Lehman Brothers is a global investment bank with leadership positions in corporate and municipal finance, advisory services and in securities sales, trading and research. Lehman Brothers serves the financial needs of corporate, governmental and institutional clients, and high-net-worth individuals, through 44 offices in major financial centers worldwide. # # # -----END PRIVACY-ENHANCED MESSAGE-----