424B5 1 file1.htm

FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION FILE NO.: 333-134553

PRICING SUPPLEMENT No. 4
to Prospectus Supplement dated October 5, 2006
to Prospectus Supplement dated May 30, 2006
and Prospectus dated May 30, 2006

$65,000,000
LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES I
0.25% Notes Due December 12, 2013
Performance Linked to the Common Stock of Under Armour, Inc. (UARM)

Because these notes are part of a series of Lehman Brothers Holdings' debt
securities called Medium-Term Notes, Series I, this pricing supplement and
the accompanying prospectus supplement, dated October 5, 2006 (the "synthetic
convertible prospectus supplement") should also be read with the accompanying
prospectus supplement, dated May 30, 2006 (the "MTN prospectus supplement")
and the accompanying prospectus dated May 30, 2006 (the "base prospectus").
Terms used here have the meanings given them in the synthetic convertible
prospectus supplement, the MTN prospectus supplement or the base prospectus,
unless the context requires otherwise.

o INDEX STOCK ISSUER: The common stock of Under Armour, Inc. Under Armour, Inc.
is not involved in this offering and has no obligation with respect to the
notes.

o PRINCIPAL AMOUNT: $1,000 per note, and in the aggregate, $65,000,000.

o STATED MATURITY DATE: December 12, 2013, subject to postponement if the
valuation date is postponed. If the stated maturity date is not a business
day, any payment required to be made on the stated maturity date will instead
be made on the next business day, as described on page S-17 of the MTN
prospectus supplement.

o VALUATION DATE RELATED TO THE STATED MATURITY DATE: December 9, 2013, subject
to postponement if a market disruption event occurs or if such day is not a
scheduled trading day, as described under the caption "Description of the
Notes-Settlement value" on page SS-18 of the synthetic convertible
prospectus supplement.

o INTEREST RATE: 0.25% per annum.

o INTEREST PAYMENT DATES: June 12 and December 12 of each year, beginning on
June 12, 2007.

o INTEREST PAYMENT RECORD DATES: 15 calendar days prior to each interest
payment date.

o THRESHOLD VALUE: $62.4061, which represents 132.36% of $47.1488, which is the
average execution price per share of common stock that an affiliate of Lehman
Brothers Holdings has paid to hedge Lehman Brothers Holdings' obligations
under the notes.

o EARLIEST REDEMPTION DATE: December 5, 2009.

o REDEMPTION NOTICE PERIOD: 30 calendar days.

o OPTIONAL REPURCHASE NOTICE PERIOD: Eight business days.

o DETERMINATION PERIOD: Three business days.

o MULTIPLIER: The initial multiplier for the shares of common stock of Under
Armour, Inc. is 1.0. The multiplier is subject to adjustment under various
circumstances, as described under the caption "Description of the
Notes-Adjustments to multipliers and to securities included in the
calculation of the settlement value" on page SS-19 of the synthetic
convertible prospectus supplement, including if Under Armour, Inc. pays a
cash dividend on its shares of common stock. The effective adjustment date
for adjusting the multiplier will be the first business day immediately
following the 15th day of each January, April, July and October and the
valuation date, as applicable.

o STOCK SETTLEMENT: Yes, upon exercise by the holder of the repurchase option
and at the option of Lehman Brothers Holdings at maturity, all as described
under the caption "Description of the Notes-Stock settlement" on page SS-25
of the synthetic convertible prospectus supplement. Lehman Brothers Holdings
will provide the trustee with written notice no later than the valuation date
if it elects the stock settlement option.

o DENOMINATIONS: $1,000 and whole multiples of $1,000.

o LISTING: The notes will not be listed on any exchange.

o CUSIP NO.: 524908UC2

o ISIN NO.: US524908UC20

Investing in the notes involves risks. Risk Factors begin on page SS-6 of the
synthetic convertible prospectus supplement.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
pricing supplement, any accompanying prospectus supplement or any accompanying
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

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Per Note Total
---------- -----------

Public offering price................................................... 100.00% $65,000,000
Underwriting discount..................................................... 0.25% $162,500
Proceeds to Lehman Brothers Holdings..................................... 99.75% $64,837,500

Lehman Brothers Holdings has granted the underwriter an option to purchase,
within 13 days of the original issuance, up to an additional $9,750,000
aggregate principal amount of notes on the same terms and conditions set forth
above solely to cover over-allotments, if any.

The notes are expected to be ready for delivery in book-entry form only through
The Depository Trust Company on or about December 12, 2006.

----------------------

LEHMAN BROTHERS

December 5, 2006

EXAMPLES OF AMOUNT PAYABLE AT MATURITY OR UPON REDEMPTION OR REPURCHASE

Here are two examples of hypothetical alternative redemption amount
calculations. In each of these examples it is assumed that Under Armour, Inc.
does not pay any cash dividends on its shares of common stock during the term of
the notes.

EXAMPLE 1. ASSUMING THE SETTLEMENT VALUE IS $40.00:

Alternative redemption amount per $1,000 note =

$40.00
$1,000 x ----------- = $640.96
$62.4061

As a result, on the stated maturity date or upon redemption, you would receive
$1,000, plus accrued but unpaid interest, per $1,000 note because $1,000 is
greater than $640.96.

In the case of stock settlement on the stated maturity date or upon repurchase
in this example, you would receive, if you held a $1,000 note, 25 shares of
common stock of Under Armour, Inc. plus $0.00 in cash, plus accrued but unpaid
interest, at maturity, or 16 shares of common stock of Under Armour, Inc. plus
$0.96 in cash, plus accrued but unpaid interest, upon repurchase. To the extent
that you hold more than $1,000 aggregate principal amount of notes, the
calculations of cash payments in lieu of fractional shares would be made on an
aggregate, rather than on a per $1,000 note, basis. For example, if you held
$65,000,000 aggregate principal amount of notes, you would receive, in total,
1,625,000 shares of common stock of Under Armour, Inc. plus $0.00 in cash, plus
accrued but unpaid interest, at maturity, or 1,041,560 shares of common stock of
Under Armour, Inc. plus $0.00 in cash, plus accrued but unpaid interest, upon
repurchase.

EXAMPLE 2. ASSUMING THE SETTLEMENT VALUE IS $65.00:

Alternative redemption amount per $1,000 note =

$65.00
$1,000 x ----------- = $1,041.56
$62.4061

As a result, on the stated maturity date or upon redemption, you would receive
$1,041.56, plus accrued but unpaid interest, per $1,000 note because $1,041.56
is greater than $1,000.

In the case of stock settlement on the stated maturity date or upon repurchase
in this example, you would receive, if you held a $1,000 note, 16 shares of
common stock of Under Armour, Inc. plus $1.56 in cash, plus accrued but unpaid
interest, at maturity or upon repurchase. To the extent that you hold more than
$1,000 aggregate principal amount of notes, the calculations of cash payments in
lieu of fractional shares would be made on an aggregate, rather than on a per
$1,000 note, basis. For example, if you held $65,000,000 aggregate principal
amount of notes, you would receive, in total, 1,041,560 shares of common stock
of Under Armour, Inc. plus $0.00 in cash, plus accrued but unpaid interest, at
maturity or upon repurchase.

To the extent the actual settlement value differs from the values assumed above
or that Under Amour, Inc. begins paying a cash dividend on its shares of common
stock, the results indicated above would be different.

PS-2

INDEX STOCK ISSUER AND INDEX STOCK

UNDER ARMOUR, INC.

Lehman Brothers Holdings has obtained the following information regarding Under
Armour, Inc. from Under Armour, Inc.'s reports filed with the SEC.

Under Armour, Inc.'s principal business activity is the design, development,
marketing and distribution of technologically advanced, branded performance
products for men, women and youth. Under Armour, Inc. designs and sells a broad
offering of apparel and accessories that utilize a variety of synthetic
microfiber fabrications. Under Armour, Inc.'s active wear and sports apparel
accessories are designed to wick perspiration away from the skin, help regulate
body temperature, enhance comfort and mobility and improve performance
regardless of weather condition.

Under Armour, Inc.'s products are offered worldwide in over 8,700 retail stores
and can currently be purchased across the United States, Canada, Japan and the
United Kingdom through large national and regional chains of retailers, as well
as smaller, independent and specialty retailers. Virtually all of Under Armour,
Inc.'s products are manufactured by unaffiliated manufacturers operating in 19
countries. Most of our products are manufactured in facilities outside of the
United States.

The index stock is registered under the Securities Exchange Act of 1934.
Companies with securities registered under that Act are required to file
periodically certain financial and other information specified by the SEC.
Information provided to or filed with the SEC can be inspected and copied at the
public reference facilities maintained by the SEC or through the SEC's website
described under "Where You Can Find More Information" on page 58 of the
accompanying base prospectus. In addition, information regarding the index stock
issuer may be obtained from other sources including, but not limited to, press
releases, newspaper articles and other publicly disseminated documents.

HISTORICAL INFORMATION ABOUT THE INDEX STOCK

The shares of common stock of Under Armour, Inc. are quoted on The NASDAQ Stock
Market under the symbol "UARM". Under Armour, Inc. completed its IPO in November
2005.

The following table presents the high and low closing prices for the shares of
common stock of Under Armour, Inc., as reported on The NASDAQ Stock Market
during the fourth quarter in 2005 and each fiscal quarter in 2006 (through the
date of this pricing supplement), and the closing price at the end of the fourth
quarter in 2005 and each quarter in 2006 (through the date of this pricing
supplement).

The historical prices of the index stock are not necessarily indicative of
future performance. Lehman Brothers Holdings cannot assure you that the price of
the index stock will not be below the threshold value on the valuation date
related to the repurchase if you exercise your repurchase option, or will
increase enough so that the alternative redemption amount will be greater than
or equal to $1,000. The historical prices below have been adjusted to reflect
any stock splits or reverse stock splits.

All information in the table that follows was obtained from Bloomberg L.P.,
without independent verification.

PS-3

HIGH LOW PERIOD END
---- --- ----------

2005
Fourth Quarter*............................. $39.86 $13.00 $38.31

2006
First Quarter............................... $40.30 $26.55 $32.40
Second Quarter ............................. 42.62 31.14 42.62
Third Quarter .............................. 42.91 32.45 40.02
Fourth Quarter (through the business
day immediately prior to the date
of this pricing supplement)............... 49.57 39.78 49.57

* Note that stock began trading November 17, 2005.

PS-4

HYPOTHETICAL RETURNS

The table below illustrates, for a range of hypothetical settlement values on
the valuation date, in each case assuming that (a) the investment is held from
the date on which the notes are first issued until the stated maturity date and
(b) Under Armour, Inc. does not pay any cash dividends on its shares of common
stock during the term of the notes:

o the hypothetical alternative redemption amount per $1,000 note;

o the percentage change from the principal amount to the hypothetical
alternative redemption amount;

o the hypothetical total amount payable at stated maturity per $1,000 note
(without interest);

o the hypothetical total rate of return (without interest);

o the hypothetical annualized pre-tax rate of return (without interest);

o the hypothetical total rate of return (including interest); and

o the hypothetical annualized pre-tax rate of return (including interest).

PERCENTAGE HYPOTHETICAL
CHANGE FROM TOTAL
THE AMOUNT
PRINCIPAL PAYABLE AT HYPOTHETICAL
AMOUNT TO STATED HYPOTHETICAL ANNUALIZED
HYPOTHETICAL THE MATURITY HYPOTHETICAL ANNUALIZED HYPOTHETICAL PRE-TAX
HYPOTHETICAL ALTERNATIVE HYPOTHETICAL PER $1,000 TOTAL RATE PRE-TAX RATE TOTAL RATE RATE OF
SETTLEMENT REDEMPTION ALTERNATIVE NOTE OF RETURN OF RETURN OF RETURN RETURN
LEVEL ON THE AMOUNT PER REDEMPTION (WITHOUT (WITHOUT (WITHOUT (INCLUDING (INCLUDING
VALUATION DATE $1,000 NOTE AMOUNT INTEREST) INTEREST) INTEREST) INTEREST) INTEREST)
----------------------------------------------------------------------------------------------------------------------

$40.00 $640.96 -35.90% $1,000.00 0.00% 0.00% 1.75% 0.25%
45.00 721.08 -27.89 1,000.00 0.00 0.00 1.75 0.25
50.00 801.20 -19.88 1,000.00 0.00 0.00 1.75 0.25
55.00 881.32 -11.87 1,000.00 0.00 0.00 1.75 0.25
62.4061(1) 1,000.00 0.00 1,000.00 0.00 0.00 1.75 0.25
67.41 1,080.12 8.01 1,080.12 8.01 1.11 9.76 1.34
72.41 1,160.24 16.02 1,160.24 16.02 2.15 17.77 2.36
77.41 1,240.36 24.04 1,240.36 24.04 3.13 25.79 3.33
82.41 1,320.48 32.05 1,320.48 32.05 4.05 33.80 4.25

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(1) This figure reflects the threshold value.

The above figures are for purposes of illustration only. The actual amount
received by investors and the resulting total and pre-tax rates of return will
depend entirely on the actual settlement value determined by the calculation
agent. In particular, the actual settlement value could be lower or higher than
those reflected in the table.

The table above only provides hypothetical return information with regard to
notes held to maturity. It is not applicable in the case of notes repurchased or
redeemed prior to the stated maturity date.

You should compare the features of the notes to other available investments
before deciding to purchase the notes. Due to the uncertainty as to whether the
alternative redemption amount, at stated maturity or in connection with a
repurchase or redemption, will be greater than $1,000 per $1,000 note or whether
the notes will be redeemed prior to the stated maturity date, the return on
investment with respect to the notes may be higher or lower than the return
available on other securities issued by Lehman Brothers Holdings or by others
and available through Lehman Brothers Inc. You should reach an investment
decision only after carefully considering the suitability of the notes in light
of your particular circumstances.

PS-5

SUPPLEMENTAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

Lehman Brothers Holdings is required to provide the comparable yield to you and,
solely for tax purposes, is also required to provide a projected payment
schedule that includes the actual interest payments on the notes and estimates
the amount and timing of contingent payments on the notes. Lehman Brothers
Holdings will not determine the actual comparable yield of the notes until they
are issued. You can obtain the comparable yield of the notes and the projected
payment schedule by submitting a written request for them to Lehman Brothers
Holdings at the following address:

Controller's Office
Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York 10019
(212) 526-7000

Lehman Brothers Holdings agrees and, by purchasing a note, you agree, for United
States federal income tax purposes, to be bound by Lehman Brothers Holdings'
determination of the comparable yield and projected payment schedule. As a
consequence, for United States federal income tax purposes, you must use the
comparable yield determined by Lehman Brothers Holdings and the projected
payments set forth in the projected payment schedule prepared by Lehman Brothers
Holdings in determining your interest accruals, and the adjustments thereto, in
respect of the notes.

PS-6

SUPPLEMENTAL PLAN OF DISTRIBUTION

Lehman Brothers Holdings has agreed to sell to Lehman Brothers Inc. and Lehman
Brothers Inc. has agreed to purchase, all of the notes at the price indicated on
the cover of this pricing supplement.

Lehman Brothers Holdings has agreed to indemnify Lehman Brothers Inc. against
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments that Lehman Brothers Inc. may be required to make
relating to these liabilities as described in the MTN prospectus supplement and
the base prospectus.

Lehman Brothers Inc. will offer the notes initially at a public offering price
equal to the issue price set forth on the cover of this pricing supplement.
After the initial public offering, the public offering price may from time to
time be varied by Lehman Brothers Inc.

Lehman Brothers Holdings has granted to Lehman Brothers Inc. an option to
purchase, at any time within 13 days of the original issuance of the notes, up
to $9,750,000 additional aggregate principal amount of notes solely to cover
over-allotments. To the extent that the option is exercised, Lehman Brothers
Inc. will be committed, subject to certain conditions, to purchase the
additional notes. If this option is exercised in full, the total public offering
price, the underwriting discount and proceeds to Lehman Brothers Holdings would
be $74,750,000, $186,875 and $74,563,125 respectively.

Lehman Brothers Holdings expects to deliver the notes against payment on or
about December 12, 2006, which is the fifth business day following the date of
this pricing supplement.

Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally
are required to settle in three business days, unless the parties to any such
trade expressly agree otherwise. Accordingly, if any purchaser wishes to trade
the notes on the date of this pricing supplement, it will be required, by virtue
of the fact that the notes initially will settle on the fifth business day
following the date of this pricing supplement, to specify an alternate
settlement cycle at the time of any such trade to prevent a failed settlement.

Lehman Brothers Holdings or an affiliate has entered into swap agreements or
related hedge transactions with one of Lehman Brothers Holdings' other
affiliates or unaffiliated counterparties in connection with the sale of the
notes and Lehman Brothers Inc. and/or an affiliate has earned additional income
as a result of payments pursuant to the swap, or related hedge transactions.

PS-7

$65,000,000

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I
0.25% NOTES DUE DECEMBER 12, 2013

PERFORMANCE LINKED TO THE
COMMON STOCK OF UNDER ARMOUR, INC. (UARM)

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PRICING SUPPLEMENT
DECEMBER 5, 2006

(INCLUDING PROSPECTUS SUPPLEMENT
DATED OCTOBER 5, 2006,

PROSPECTUS SUPPLEMENT
DATED MAY 30, 2006 AND

PROSPECTUS
DATED MAY 30, 2006)

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LEHMAN BROTHERS