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)
January 18, 2000
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SALOMON SMITH BARNEY HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 1-4346 22-1660266
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
388 Greenwich Street, New York, NY 10013
(Address of principal executive offices) (Zip Code)
(212) 816-6000
(Registrant's telephone number, including area code)
SALOMON SMITH BARNEY HOLDINGS INC.
Current Report on Form 8-K
Item 5. Other Events
Acquisition of Investment Banking Business of Schroders PLC
Salomon Smith Barney Holdings Inc., a subsidiary of Citigroup Inc., and
Schroders PLC, today announced that Salomon Smith Barney will acquire Schroders'
investment banking business in a {British Pound}1.36 billion ($2.2 billion)
transaction. Schroders' shareholders will receive consideration expected to
approximate {British Pound}900 million ($1.46 billion) in cash, shares of
Citigroup common stock or loan notes issued by Salomon Smith Barney or an
affiliate for the U.K. operations of Schroders, with the balance of the purchase
price being paid to the company in cash for the investment banking operations
outside of the U.K. The book value of the assets to be acquired on a GAAP basis
is approximately {British Pound}800 million ($1.3 billion), indicating a
purchase price transaction of 1.7 times book value. The combined European
operations will be known as Schroders Salomon Smith Barney.
The transaction will be accounted for as a purchase. Under the transaction
Salomon Smith Barney is acquiring the global investment banking business and
related assets of Schroders, including all corporate finance, financial
markets and securities activities. Outside of Europe, Schroders' investment
banking function will be integrated into Salomon Smith Barney; in Japan, it
will become part of Nikko Salomon Smith Barney. In the U.S., Schroders'
private clients services team will join Salomon Smith Barney. Completion
of the transaction is subject to Schroders shareholder approval, various
regulatory approvals and other customary closing conditions.
Results of Operations
(Unaudited)
This report summarizes the results of operations of Salomon Smith Barney
Holdings Inc. for the three and twelve month periods ended December 31, 1999
and 1998. Certain prior period amounts have been reclassified to conform to
current period presentation.
SALOMON SMITH BARNEY HOLDINGS INC.
SELECTED FINANCIAL DATA
(Unaudited, dollars in millions)
December 31,
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1999 1998
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Total stockholder's equity $ 9,326 $ 8,768
Total assets under fee-based management $ 323,600 $ 274,400
Three Twelve
Months Ended Months Ended
December 31, December 31,
1999 1998 1999 1998
Revenues:
Commissions $1,019 $ 838 $3,642 $3,214
Investment banking 799 521 3,012 2,320
Asset management and administration fees 692 551 2,650 2,165
Principal transactions 551 123 2,562 (113)
Other 112 83 297 185
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Total noninterest revenues 3,173 2,116 12,163 7,771
------ ------ ------ ------
Interest and dividends 2,985 2,778 11,275 12,902
Interest expense 2,598 2,463 9,681 11,466
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Net interest and dividends 387 315 1,594 1,436
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Revenues, net of interest expense 3,560 2,431 13,757 9,207
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Noninterest expenses:
Compensation and benefits 1,641 1,667 6,847 5,848
Communications 144 126 504 477
Floor brokerage and other production 130 120 465 446
Occupancy and equipment 114 114 447 429
Advertising and market development 103 94 339 312
Professional services 85 79 259 245
Other operating and administrative expenses 147 120 643 408
Restructuring charge, net (2) 50 (243) (274)
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Total noninterest expenses 2,362 2,370 9,261 7,891
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Income before income taxes and cumulative
effect of change in accounting principle 1,198 61 4,496 1,316
Provision for income taxes 449 21 1,669 498
------ ------ ------ ------
Income before cumulative effect
of change in accounting principle 749 40 2,827 818
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Cumulative effect of change in accounting
principle (net of tax benefit of $12) - - (15) -
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Net income $ 749 $ 40 $2,812 $ 818
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: January 18, 2000 SALOMON SMITH BARNEY HOLDINGS INC.
By: /s/Michael J. Day
Michael J. Day
Controller