Lehman Brothers Holdings Inc Plan Trust (LEHMQ) 8-K Lehman Brothers Reports Record Net Revenues, Net Income and Earnings Per Share for Fiscal 2006

Exhibit 99.1

Press Release

For Immediate Release	Media Contact:	Hannah Burns 212-526-4064
	Investor Contact:	Shaun Butler 212-526-8381

LEHMAN BROTHERS REPORTS RECORD NET REVENUES,
NET INCOME AND EARNINGS PER SHARE FOR FISCAL 2006

-Reports Record Quarterly Net Revenues for the Fourth Quarter of Fiscal 2006-

NEW YORK–  December 14, 2006 – Lehman Brothers Holdings Inc. (ticker symbol: LEH) today reported net income of $1.0 billion, or $1.72 per common share (diluted), for the fourth quarter ended November 30, 2006, representing increases of 22% and 25%, respectively, from net income of $823 million, or $1.38 per common share (diluted), reported for the fourth quarter of fiscal 2005.  Third quarter fiscal 2006 net income was $916 million, or $1.57 per common share (diluted).

For the 2006 full fiscal year, net income and earnings per common share (diluted) increased 23% and 25%, respectively, to a record $4.0 billion and $6.81, respectively, compared to $3.3 billion and $5.43, respectively, in fiscal 2005.

Full Year Business Highlights

·Reported record net revenues, net income and earnings per share (diluted) for the third consecutive year

·Achieved record net revenues across all business segments and regions for the year

·Reported record annual pre-tax margin of 33.6%

1

·Ranked #1 in both Equity and Fixed Income Research by Institutional Investor’s “All-America Research” polls for the fourth consecutive year; ranked #1 in Equity Sales by Institutional Investor’s 2006 “All-America Sales” poll

·Ranked #1 dealer on the London Stock Exchange for 16 consecutive months; ranked #2 on Xetra and #2 on Euronext by trading volume

·Ranked #1 in Barron’s 500, the publication’s annual survey of the corporate performance of the 500 largest U.S. and Canadian companies

·Grew assets under management to a record $225 billion

Richard S. Fuld, Jr., chairman and chief executive officer, said, “Once again, we have achieved outstanding results across all our business segments and geographic regions this year.  Our record performance is the result of our client-focused strategy and our continued investment in strategic areas that enable us to deliver the best capabilities, intellectual capital and solutions to our clients.  As always, our success is a tribute to how well our people continue to work together across the Firm to deliver superior value to our clients and shareholders.”

Net revenues (total revenues less interest expense) for the fourth quarter of fiscal 2006 were $4.5 billion, an increase of 23% from $3.7 billion reported in the fourth quarter of fiscal 2005 and an increase of 8% from the $4.2 billion reported in the third quarter of fiscal 2006.  Investment Banking revenues were a record for the quarter, increasing 5% to $858 million from $817 million in the fourth quarter of fiscal 2005.  These revenues were driven by strong performances in debt and equity origination, which increased 14% and 7%, respectively, from the prior year’s period, and solid merger and acquisition advisory revenue, which decreased 7% from the record results in the fourth quarter of fiscal 2005.  Capital Markets net revenues increased 28% to $3.0 billion in the fourth quarter of fiscal 2006 from $2.4 billion in the prior year’s fourth quarter on strong performances from both Fixed Income and Equities Capital Markets.  Fixed Income Capital Markets reported its second highest revenue quarter, an increase of 31% from the fourth quarter of fiscal 2005, reflecting strong levels of client activity, as well as improved results in credit products.  Equities Capital Markets also reported its second highest revenue quarter, an increase of 22% compared to the fourth quarter of fiscal 2005, driven by solid customer flow activities, improved market conditions and continued growth in the prime brokerage businesses.  The Firm also reported its highest revenue quarter in Investment Management, with net revenues

2

increasing 26% to $640 million in the fourth quarter of fiscal 2006, from $509 million in the fourth quarter of fiscal 2005.  This performance was driven by record revenues in Private Investment Management and record-matching revenues in Asset Management.  Assets under management grew to a record $225 billion.

For the full 2006 fiscal year, net revenues increased 20% to a record $17.6 billion, from $14.6 billion for fiscal 2005, with record net revenues in each business segment and in each region. For fiscal 2006, non-U.S. revenues grew 21% to a record $6.5 billion, representing 37% of Firmwide net revenues.

Non-interest expenses for the fourth quarter of fiscal 2006 were $3.0 billion, compared to $2.8 billion in the third quarter of fiscal 2006 and $2.5 billion in the fourth quarter of fiscal 2005.  Compensation and benefits as a percentage of net revenues was 49.3% during the fourth quarter of fiscal 2006, compared to 49.3% for the third quarter of fiscal 2006 and 48.7% for the fourth quarter of fiscal 2005.  For the full 2006 fiscal year, compensation and benefits as a percentage of net revenues remained flat at 49.3% compared to fiscal 2005.  Non-personnel expenses in the fourth quarter of fiscal 2006 were $809 million, compared with $751 million in the third quarter of fiscal 2006 and $675 million in the fourth quarter of fiscal 2005, reflecting continued investments in growing the franchise.  Non-personnel expenses for the full year of fiscal 2006 were $3.0 billion, compared with $2.6 billion in fiscal 2005.

The Firm’s pre-tax margin was 32.8% for the fourth quarter of fiscal 2006 and a record 33.6% for the full 2006 fiscal year, compared to 33.0% for both the quarter and year ended November 30, 2005.  Return on average common equity was 22.3% for the fourth quarter of fiscal 2006, compared with 20.9% for the fourth quarter of fiscal 2005.  For the full 2006 fiscal year, return on average common equity was 23.4%, compared with 21.6% for fiscal 2005.  Return on average tangible common equity was 27.6% for the fourth quarter of fiscal 2006, compared with 26.5% for the fourth quarter of fiscal 2005.  For the full 2006 fiscal year, return on average tangible common equity was 29.1%, compared with 27.8% for fiscal 2005.

As of November 30, 2006, Lehman Brothers’ total stockholders’ equity was $19.2 billion, and total long-term capital (stockholders’ equity and long-term borrowings, excluding any

3

borrowings with remaining maturities of less than twelve months) was approximately $99.8 billion.  Book value per common share was $33.87.

Prior period share and earnings per share amounts have been restated to reflect the two-for-one common stock split on April 28, 2006.

Lehman Brothers (ticker symbol: LEH), an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide.  Founded in 1850, Lehman Brothers maintains leadership positions in investment banking, equity and fixed income sales, trading and research, private investment management, asset management and private equity.  The Firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world.  For further information about Lehman Brothers’ services, products and recruitment opportunities, visit the Firm’s Web site at www.lehman.com.

Conference Call

A conference call, to discuss the Firm’s financial results and outlook, will be held today at 11:00 a.m. EST.  The call will be open to the public. Members of the public who would like to access the conference call should dial, from the U.S., 888-323-4182 or from outside the U.S., 517-623-4500.  The pass code for all callers is LEHMAN.  The conference call will also be accessible through the “Shareholders” section of the Firm’s Web site under the subcategory “Webcasts.”  For those unable to listen to the live broadcast, a replay will be available on the Firm’s Web site or by dialing 866-457-6650 (domestic) or 203-369-1299 (international).  The replay will be available approximately one hour after the event and will remain available on the Lehman Brothers Web site until 5:00 p.m. EST on January 14, 2007, and by phone until 11:59 p.m. EST on January 14, 2007.

Please direct any questions regarding the conference call to Shaun Butler at 212-526-8381, sbutler@lehman.com or Elizabeth Besen at 212-526-2733, ebesen@lehman.com.

4

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements. These statements are not historical facts, but instead represent only the Firm’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, which may include risks and uncertainties relating to market fluctuations and volatility, industry competition and changes in the competitive environment, investor sentiment, liquidity and credit ratings, credit exposures, operational risks and legal and regulatory matters. The Firm’s actual results and financial condition may differ, perhaps materially, from the anticipated results and financial condition in any such forward-looking statements and, accordingly, readers are cautioned not to place undue reliance on such statements.  The Firm undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. For more information concerning the risks and other factors that could affect the Firm’s future results and financial condition, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Firm’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

# # #

5

LEHMAN BROTHERS HOLDINGS INC.

SELECTED STATISTICAL INFORMATION

(Preliminary and Unaudited)

(Dollars in millions, except per share data)

	At or for the Year Ended						At or for the Quarter Ended
	2006			2005			11/30/06			8/31/06			5/31/06			2/28/06			11/30/05
Income Statement
Net Revenues	$	17,583		$	14,630		$	4,533		$	4,178		$	4,411		$	4,461		$	3,690
Non-Interest Expenses:
Compensation and Benefits	8,669			7,213			2,235			2,060			2,175			2,199			1,798
Non-personnel Expenses	3,009			2,588			809			751			738			711			675
Income Before Cumulative Effect of Accounting Change	3,960			3,260			1,004			916			1,002			1,038			823
Cumulative Effect of Accounting Change	47			—			—			—			—			47			—
Net Income	4,007			3,260			1,004			916			1,002			1,085			823
Net Income Applicable to Common Stock	3,941			3,191			987			899			986			1,069			807
Earnings per Basic Common Share: (a)
Before Cumulative Effect of Accounting Change	$	7.17		$	5.74		$	1.83		$	1.66		$	1.81		$	1.87		$	1.46
Cumulative Effect of Accounting Change	0.09			—			—			—			—			0.09			—
Earnings per Basic Common Share	$	7.26		$	5.74		$	1.83		$	1.66		$	1.81		$	1.96		$	1.46
Earnings per Diluted Common Share: (a)
Before Cumulative Effect of Accounting Change	$	6.73		$	5.43		$	1.72		$	1.57		$	1.69		$	1.75		$	1.38
Cumulative Effect of Accounting Change	0.08			—			—			—			—			0.08			—
Earnings per Diluted Common Share	$	6.81		$	5.43		$	1.72		$	1.57		$	1.69		$	1.83		$	1.38
Financial Ratios (%)
Return on Average Common Stockholders’ Equity (annualized) (b)	23.4		%	21.6		%	22.3		%	21.0		%	23.7		%	26.7		%	20.9		%
Return on Average Tangible Common Stockholders’ Equity (annualized) (c)	29.1		%	27.8		%	27.6		%	26.1		%	29.5		%	33.5		%	26.5		%
Pre-tax Margin	33.6		%	33.0		%	32.8		%	32.7		%	34.0		%	34.8		%	33.0		%
Compensation and Benefits/Net Revenues	49.3		%	49.3		%	49.3		%	49.3		%	49.3		%	49.3		%	48.7		%
Effective Tax Rate	32.9		%	32.5		%	32.5		%	33.0		%	33.1		%	33.1		%	32.4		%
Financial Condition
Total Assets							$	503,700		$	473,737		$	456,202		$	439,796		$	410,063
Net Assets (d)							268,538			239,424			240,719			227,048			211,424
Common Stockholders’ Equity							18,096			17,301			16,887			16,398			15,699
Total Stockholders’ Equity							19,191			18,396			17,982			17,493			16,794
Total Stockholders’ Equity Plus Junior Subordinated Notes(d)							21,929			21,088			20,699			20,116			18,820
Tangible Equity Capital (d)							18,567			17,724			17,402			16,834			15,564
Total Long-Term Capital (e)							99,802			92,430			90,502			76,224			70,693
Book Value per Common Share (f) (a)							33.87			32.16			31.08			30.01			28.75
Gross Leverage Ratio(g)							26.2		x	25.8		x	25.4		x	25.1		x	24.4		x
Net Leverage Ratio(d)							14.5		x	13.5		x	13.8		x	13.5		x	13.6		x
Other Data (#s)
Employees							25,936			24,775			23,387			22,919			22,919
Assets Under Management (in billions)							$	225		$	207		$	198		$	188		$	175
Common Stock Outstanding (in millions) (a)							533.4			530.3			540.3			538.3			542.9
Weighted Average Shares (in millions): (a)
Basic	543.0			556.3			539.2			540.9			545.1			546.3			551.8
Diluted	578.4			587.2			573.1			573.3			582.8			584.2			585.2

See Footnotes to Selected Statistical Information on page 7.

6

LEHMAN BROTHERS HOLDINGS INC.

FOOTNOTES TO SELECTED STATISTICAL INFORMATION

(Preliminary and Unaudited)

(a)Share and per common share amounts for periods prior to the two-for-one stock split on April 28, 2006 have been restated.

(b)Return on average common stockholders’ equity is computed by dividing annualized net income applicable to common stock for the period by average common stockholders’ equity. See the reconciliation on page 11.

(c)Return on average tangible common stockholders’ equity is computed by dividing annualized net income applicable to common stock for the period by average tangible common stockholders’ equity. Average tangible common stockholders’ equity equals average total common stockholders’ equity less average identifiable intangible assets and goodwill. See the reconciliation on page 11. Management believes tangible common stockholders’ equity is a meaningful measure because it reflects the common stockholders’ equity deployed in our businesses.

(d)Net leverage ratio is defined as net assets (total assets excluding: 1) cash and securities segregated and on deposit for regulatory and other purposes, 2) securities received as collateral, 3) securities purchased under agreements to resell, 4) securities borrowed and 5) identifiable intangible assets and goodwill) divided by tangible equity capital. We believe net leverage based on net assets to be a more useful measure of leverage, because it excludes certain low-risk, non-inventory assets and utilizes tangible equity capital as a measure of our equity base. We believe tangible equity to be a more meaningful measure of our equity base as it includes stockholders’ equity and junior subordinated notes (which we consider to be equity-like instruments due to their subordinated and long-term nature) and excludes identifiable intangible assets and goodwill (which we do not consider available to support our remaining net assets). See the reconciliation on page 13. This definition of net leverage is used by many of our creditors and a leading rating agency. These measures are not necessarily comparable to similarly titled measures provided by other companies in the securities industry because of different methods of calculation.

(e)Total long-term capital includes long-term borrowings (excluding any borrowings with remaining maturities of less than twelve months) and total stockholders’ equity. We believe total long-term capital is useful to investors as a measure of our financial strength.

(f)The book value per common share calculation includes amortized restricted stock units granted under stock award programs.

(g)Gross leverage ratio is defined as total assets divided by total stockholders’ equity.

7

LEHMAN BROTHERS HOLDINGS INC.

CONSOLIDATED STATEMENT OF INCOME

(Preliminary and Unaudited)

(In millions, except per share data)

	Quarter Ended						% Change from
	Nov 30, 2006		Aug 31, 2006		Nov 30, 2005		Aug 31, 2006		Nov 30, 2005
Revenues: (a)
Principal transactions	$	2,504	$	2,247	$	1,887
Investment banking	858		726		817
Commissions	521		529		476
Interest and dividends	8,898		7,867		5,627
Asset management and other	379		358		248
Total revenues	13,160		11,727		9,055
Interest expense	8,627		7,549		5,365
Net revenues	4,533		4,178		3,690		8	%	23	%
Non-interest expenses:
Compensation and benefits	2,235		2,060		1,798
Technology and communications	261		247		222
Brokerage, clearance and distribution fees (b)	167		164		140
Occupancy	131		128		126
Professional fees	118		90		79
Business development	90		77		64
Other (b)	42		45		44
Total non-interest expenses	3,044		2,811		2,473		8	%	23	%
Income before provision for income taxes	1,489		1,367		1,217
Provision for income taxes	485		451		394
Net income	$	1,004	$	916	$	823	10	%	22	%
Net income applicable to common stock	$	987	$	899	$	807	10	%	22	%
Earnings per common share: (c)
Basic	$	1.83	$	1.66	$	1.46	10	%	25	%
Diluted	$	1.72	$	1.57	$	1.38	10	%	25	%

(a)Certain revenues have been reclassified to conform to the current presentation.

(b)Expense amounts for the quarter ended November 30, 2005 have been reclassified to conform to the current year presentation.

(c)Earnings per share for the quarter ended November 30, 2005 have been restated to reflect the two-for-one stock split on April 28, 2006.

8

LEHMAN BROTHERS HOLDINGS INC.

CONSOLIDATED STATEMENT OF INCOME

(Preliminary and Unaudited)

(In millions, except per share data)

	Year Ended				% Change from
	Nov 30, 2006		Nov 30, 2005		Nov 30, 2005
Revenues:
Principal transactions	$	9,802	$	7,811
Investment banking	3,160		2,894
Commissions	2,050		1,728
Interest and dividends	30,284		19,043
Asset management and other	1,413		944
Total revenues	46,709		32,420
Interest expense	29,126		17,790
Net revenues	17,583		14,630		20	%
Non-interest expenses:
Compensation and benefits	8,669		7,213
Technology and communications	974		834
Brokerage, clearance and distribution fees (a)	629		548
Occupancy	539		490
Professional fees	364		282
Business development	301		234
Other (a)	202		200
Total non-interest expenses	11,678		9,801		19	%
Income before taxes and cumulative effect of accounting change	5,905		4,829
Provision for income taxes	1,945		1,569
Income before cumulative effect of accounting change	3,960		3,260
Cumulative effect of accounting change	47		—
Net income	$	4,007	$	3,260	23	%
Net income applicable to common stock	$	3,941	$	3,191	24	%
Earnings per basic common share: (b)
Before cumulative effect of accounting change	$	7.17	$	5.74
Cumulative effect of accounting change	0.09		—
Earnings per basic common share	$	7.26	$	5.74	26	%
Earnings per diluted common share: (b)
Before cumulative effect of accounting change	$	6.73	$	5.43
Cumulative effect of accounting change	0.08		—
Earnings per diluted common share	$	6.81	$	5.43	25	%

(a)Prior year expense amounts have been reclassified to conform to the current year presentation.

(b)Prior year earnings per share amounts have been restated to reflect the two-for-one stock split on April 28, 2006.

9

LEHMAN BROTHERS HOLDINGS INC.

SEGMENT NET REVENUE INFORMATION

(Preliminary and Unaudited)

(In millions)

	Quarter Ended						% Change from
	Nov 30, 2006		Aug 31, 2006		Nov 30, 2005		Aug 31, 2006		Nov 30, 2005
Investment Banking:
Global Finance - Debt	$	378	$	348	$	332
Global Finance - Equity	224		183		209
Advisory Services	256		195		276
Total	858		726		817		18	%	5	%
Capital Markets:
Fixed Income	2,135		2,010		1,624
Equities	900		837		740
Total	3,035		2,847		2,364		7	%	28	%
Investment Management:
Asset Management	368		349		265
Private Investment Management	272		256		244
Total	640		605		509		6	%	26	%
Total Net Revenues	$	4,533	$	4,178	$	3,690	8	%	23	%

	Year Ended				% Change from
	Nov 30, 2006		Nov 30, 2005		Nov 30, 2005
Investment Banking:
Global Finance - Debt	$	1,424	$	1,304
Global Finance - Equity	815		824
Advisory Services	921		766
Total	3,160		2,894		9	%
Capital Markets:
Fixed Income	8,447		7,334
Equities	3,559		2,473
Total	12,006		9,807		22	%
Investment Management:
Asset Management	1,432		1,026
Private Investment Management	985		903
Total	2,417		1,929		25	%
Total Net Revenues	$	17,583	$	14,630	20	%

10

LEHMAN BROTHERS HOLDINGS INC.

RECONCILIATION OF AVERAGE COMMON STOCKHOLDERS’ EQUITY TO

AVERAGE TANGIBLE COMMON STOCKHOLDERS’ EQUITY

(Preliminary and Unaudited)

(In millions)

	Quarter Ended
	Nov 30, 2006			Aug 31, 2006			May 31, 2006			Feb 28, 2006			Nov 30, 2005
Average common stockholders’ equity	$	17,699		$	17,094		$	16,643		$	16,049		$	15,469
Less: average identifiable intangible assets and goodwill	(3,363		)	(3,331		)	(3,290		)	(3,269		)	(3,259		)
Average tangible common stockholders’ equity	$	14,336		$	13,763		$	13,353		$	12,780		$	12,210

	Year Ended
	Nov 30, 2006			Nov 30, 2005
Average common stockholders’ equity	$	16,876		$	14,741
Less: average identifiable intangible assets and goodwill	(3,312		)	(3,272		)
Average tangible common stockholders’ equity	$	13,564		$	11,469

11

LEHMAN BROTHERS HOLDINGS INC.

ASSETS UNDER MANAGEMENT

(Preliminary and Unaudited)

(In billions)

	At
Composition of Assets Under Management	Nov 30, 2006		Aug 31, 2006		Nov 30, 2005
Equity	$	95	$	87	$	75
Fixed Income	61		58		55
Money Markets	48		43		29
Alternative Investments	21		19		16
Assets Under Management	$	225	$	207	$	175

	Year Ended				Quarter Ended
	Nov 30,		Nov 30,		Nov 30,
Assets Under Management Rollforward	2006		2005		2006
Opening balance	$	175	$	137	$	207
Net additions	35		26		10
Net market appreciation	15		12		8
Total increase	50		38		18
Ending balance	$	225	$	175	$	225

12

LEHMAN BROTHERS HOLDINGS INC.

GROSS LEVERAGE and NET LEVERAGE CALCULATIONS

(Preliminary and Unaudited)

(In millions)

	Nov 30, 2006			Aug 31, 2006			May 31, 2006			Feb 28, 2006			Nov 30, 2005
Net assets:
Total assets	$	503,700		$	473,737		$	456,202		$	439,796		$	410,063
Less:
Cash and securities segregated and on deposit for regulatory and other purposes	(6,100		)	(5,736		)	(6,810		)	(5,569		)	(5,744		)
Securities received as collateral	(6,100		)	(5,046		)	(5,382		)	(5,001		)	(4,975		)
Collateralized agreements	(219,600		)	(220,167		)	(199,994		)	(198,896		)	(184,664		)
Identifiable intangible assets and goodwill	(3,362		)	(3,364		)	(3,297		)	(3,282		)	(3,256		)
Net assets	$	268,538		$	239,424		$	240,719		$	227,048		$	211,424
Tangible equity capital:
Total stockholders’ equity	$	19,191		$	18,396		$	17,982		$	17,493		$	16,794
Junior subordinated notes	2,738			2,692			2,717			2,623			2,026
Less: Identifiable intangible assets and goodwill	(3,362		)	(3,364		)	(3,297		)	(3,282		)	(3,256		)
Tangible equity capital	$	18,567		$	17,724		$	17,402		$	16,834		$	15,564
Gross leverage (total assets / total stockholders’ equity)	26.2		x	25.8		x	25.4		x	25.1		x	24.4		x
Net leverage (net assets / tangible equity capital)	14.5		x	13.5		x	13.8		x	13.5		x	13.6		x

13