SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE COMMISSION
For the fiscal year ended December 30, 1995
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
For the years ended December 30, 1995 and 1994
with Report of Independent Auditors
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Financial Statements
and Supplemental Information
For the years ended December 30, 1995 and 1994
Contents
Report of Independent Auditors 1
Financial Statements
Statements of Net Assets Available for Plan Benefits, With Fund Information 2
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information 4
Notes to Financial Statements 7
Supplemental Information
Schedule I Schedule of Investments Held 15
Schedule II Schedule of Series of Transactions in Excess of Five Percent
of Net Assets Available for Plan Benefits at
Beginning of Year 16
Schedule III Schedule of Single Transaction in Excess of Five Percent of
Net Assets Available for Plan Benefits at
Beginning of Year 17
A schedule of party-in-interest transactions has not been presented because
there were no party-in-interest transactions which are prohibited by Section 406
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
for which there are no statutory or administrative exemptions.
Report of Independent Auditors
The 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 as of
December 30, 1995 and 1994, 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 administrator. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about 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 Lehman
Brothers Holdings Inc. Tax Deferred Savings Plan at December 30, 1995 and 1994,
and the changes in its net assets available for plan benefits for the years then
ended, in conformity with general accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of investments held as of December 30, 1995, and single and series of
transactions in excess of five percent of net assets available for plan benefits
for the year ended December 30, 1995, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The Fund Information in
the statement of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Ernst & Young LLP
April 23, 1996
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Net Assets Available for Plan Benefits, With Fund Information
December 30, 1995
Investment Funds
-------------------------------------------------------------------------------------------------------------------------------
American Lehman Twentieth Lehman
Short Express Brothers Century Brothers
Term Fixed Company Holdings Inc. Ultra Prime Value
Interest Income Common Common Investors Money
Fund Fund Stock Fund Stock Fund Fund Market Fund
Assets
Institutional Contracts(at cost plus interest) $ 132,302,233
Investments at fair value:
American Express Company common stock
629,545 shares (cost: $14,453,710) $ 26,047,424
Lehman Brothers Holdings Inc. common stock
583,133 shares (cost: $9,999,553) $ 12,391,576
Twentieth Century Ultra Investors Fund
1,617,105 shares (cost: $34,455,115) $ 42,222,614
Lehman Brothers Prime Value Money Market Fund
18,862,032 shares (cost: $18,862,032 $ 18,862,032
Templeton Foreign Fund
2,817,938 shares (cost: $26,120,965)
Income Fund of America
971,763 shares (cost: $13,266,086)
Fidelity Capital & Income Fund
1,648,532 shares (cost: $15,509,153)
Vanguard Index Trust 500 Portfolio
284,211 shares (cost: $13,849,110)
PIMCO Total Return Fund
864,302 shares (cost: $8,733,498)
Vanguard Fixed Income Long-Term Corporate Portfolio
899,925 shares (cost: $7,620,417)
- 132,302,233 26,047,424 12,391,576 42,222,614 18,862,032
Cash and short-term investments ............ $ 264,946 1,366 19 1,970,388 79,748 18,680
Interest and dividends receivable .. 1,403 208 5,308 1,024 17 --
Other receivables ................... 38,741 20,286 43,894 -- 817 802
Net Inter-fund transfers (payable) receivable - (3,487,122) (165,254) 202,581 1,475,836 (158,132)
Total assets 305,090 128,836,971 25,931,391 14,565,569 43,779,032 18,723,382
Liabilities
Accrued liabilities - 43,599 9,024 3,885 13,627 6,576
Other liabilities - - - 686,824 79,016 133,953
Total liabilities - 43,599 9,024 690,709 92,643 140,529
-------------------------------------------------------------------------------------
Net assets available for plan benefits $305,090 $128,793,372 $25,922,367 $13,874,860 $ 43,686,389 $ 18,582,853
====================================================================================
See accompanying notes
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Net Assets Available for Plan Benefits, With Fund Information
December 30, 1995
Investment Funds (Cont'd.)
-------------------------------------------------------------------------------------------------------------------------------
Vanguard
Vanguard PIMCO Fixed Income
Templeton Income Fidelity Index Trust Total Long Term
Foreign Fund of Capital & 500 Return Corporate
Fund America Income Fund Portfolio Fund Portfolio Total
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
Institutional Contracts(at cost plus interest) $132,302,233
Investments at fair value:
American Express Company common stock
629,545 shares (cost: $14,453,710) 26,047,424
Lehman Brothers Holdings Inc. common stock
583,133 shares (cost: $9,999,553) 12,391,576
Twentieth Century Ultra Investors Fund
1,617,105 shares (cost: $34,455,115) 42,222,614
Lehman Brothers Prime Value Money Market Fund
18,862,032 shares (cost: $18,862,032 18,862,032
Templeton Foreign Fund
2,817,938 shares (cost: $26,120,965) $25,868,671 25,868,671
Income Fund of America
971,763 shares (cost: $13,266,086) $15,421,879 15,421,879
Fidelity Capital & Income Fund
1,648,532 shares (cost: $15,509,153) $15,100,549 15,100,549
Vanguard Index Trust 500 Portfolio
284,211 shares (cost: $13,849,110) $16,370,552 16,370,552
PIMCO Total Return Fund
864,302 shares (cost: $8,733,498) $9,265,317 9,265,317
Vanguard Fixed Income Long-Term Corporate Portfolio
899,925 shares (cost: $7,620,417) $8,531,288 8,531,288
--------------------------------------------------------------------------------------
25,868,671 15,421,879 15,100,549 16,370,552 9,265,317 8,531,288 322,384,135
Cash and short-term investments 45,917 18,226 39,346 55,643 723 15,987 2,510,989
Interest and dividends receivable 1 17 9 - - - 7,987
Other receivables 326 1,825 - 6,252 119 1,957 115,019
Net Inter-fund transfers (payable) receivable 256,638 669,924 36,368 1,140,740 (27,797) 56,218 -
-------------------------------------------------------------------------------------
Total assets 26,171,553 $16,111,871 $15,176,272 $17,573,187 $9,238,362 $8,605,450 $325,018,130
Liabilities
Accrued liabilities 8,373 4,757 4,849 4,790 2,909 2,647 105,036
Other liabilities 47,411 18,161 40,767 55,524 - 15,696 1,077,352
Total liabilities 55,784 22,918 45,616 60,314 2,909 18,343 1,182,388
Net assets available for plan benefits $26,115,769 $16,088,953 $15,130,656 $17,512,873 $9,235,453 $8,587,107 $323,835,742
See accompanying notes
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Net Assets Available for Plan Benefits, With Fund Information
December 30, 1994
Investment Funds
-------------------------------------------------------------------------------------------------------------------------------
American Lehman Twentieth Lehman
Short Express Brothers Century Brothers
Term Fixed Company Holdings Inc. Ultra Prime Value
Interest Income Common Common Investors Money
Fund Fund Stock Fund Stock Fund Fund Market Fund
Assets
Institutional Contracts(at cost plus interest) $ 129,781,154
Investments at fair value:
American Express Company common stock
785,101 shares (cost: $18,025,118) $ 23,160,480
Lehman Brothers Holdings Inc. common stock
266,054 shares (cost: $4,025,178) $ 3,924,294
Twentieth Century Ultra Investors Fund
1,374,370 shares (cost: $28,401,537) $ 27,418,687
Lehman Brothers Prime Value Money Market Fund
25,519,916 shares (cost: $25,519,916 $ 25,519,916
Templeton Foreign Fund
2,439,078 shares (cost: $22,799,568)
Income Fund of America
865,302 shares (cost: $11,613,345)
Fidelity Capital & Income Fund
1,237,997 shares (cost: $11,813,730)
S&P 500 Index Fund
2,976,168 shares (cost: $8,205,869)
PIMCO Total Return Fund
717,901 shares (cost: $7,235,949)
Vanguard Fixed Income Long-Term Corporate Portfolio
792,170 shares (cost: $6,664,576)
- 129,781,154 23,160,480 3,924,294 27,418,687 25,519,916
Cash and short-term investments ............ $ 421,886 23,406 30,670 2,043,805 57,022 4
Interest and dividends receivable .. 2,020 6 180,666 126 - -
Other receivables ................... - 257,926 598,648 7,541 647 20,396
Net Inter-fund transfers (payable) receivable (145,644) 1,329,188 (605,604) 723,022 (206,380) (1,292,122)
Total assets 278,262 131,391,680 23,364,860 6,698,788 27,269,976 24,248,194
Liabilities
Accrued liabilities - 11,782 42,384 5,027 - 56,600
Other liabilities - 45,236 8,753 18,070 65,314 119,736
Total liabilities - 57,018 51,137 23,097 65,314 176,336
-------------------------------------------------------------------------------------
Net assets available for plan benefits $278,262 $131,334,662 $23,313,723 $6,675,691 $27,204,662 $24,071,858
====================================================================================
See accompanying notes
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Net Assets Available for Plan Benefits, With Fund Information
December 30, 1994
Investment Funds (Cont'd.)
-------------------------------------------------------------------------------------------------------------------------------
Vanguard
PIMCO Fixed Income
Templeton Income Fidelity S&P Total Long Term
Foreign Fund of Capital & 500 Index Return Corporate
Fund America Income Fund Fund Fund Portfolio Total
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
Institutional Contracts(at cost plus interest) $129,781,154
Investments at fair value:
American Express Company common stock
785,101 shares (cost: $18,025,118) 23,160,480
Lehman Brothers Holdings Inc. common stock
266,054 shares (cost: $4,025,178) 3,924,294
Twentieth Century Ultra Investors Fund
1,374,370 shares (cost: $28,401,537) 25,519,916
Lehman Brothers Prime Value Money Market Fund
25,519,916 shares (cost: $25,519,916 21,512,668
Templeton Foreign Fund
2,439,078 shares (cost: $22,799,568) $25,512,668 25,868,671
Income Fund of America
865,302 shares (cost: $11,613,345) $11,370,073 11,370,073
Fidelity Capital & Income Fund
1,237,997 shares (cost: $11,813,730) $10,683,915 10,683,915
S&P 500 Index Fund
2,976,168 shares (cost: $8,205,869) $8,532,970 8,532,970
PIMCO Total Return Fund
717,901 shares (cost: $7,235,949) $6,956,461 6,956,461
Vanguard Fixed Income Long-Term Corporate Portfolio
792,170 shares (cost: $6,664,576) $6,376,973 6,376,973
--------------------------------------------------------------------------------------
21,512,668 11,370,073 10,683,915 8,532,970 6,956,461 6,376,973 275,237,591
Cash and short-term investments 44,084 17,088 - 44,660 11,986 14,969 2,709,580
Interest and dividends receivable - - 27,927 232 - - 210,977
Other receivables 2,340 - 21,006 - - - 908,504
Net Inter-fund transfers (payable) receivable 339,898 (106,044) 69,481 (79,819) (92,254) 66,278 -
-------------------------------------------------------------------------------------
Total assets 21,898,990 $11,281,117 $10,802,329 $8,498,043 $6,876,193 $6,458,220 $279,066,652
Liabilities
Accrued liabilities - (2,081) (1,387) - - - 112,325
Other liabilities 50,967 20,533 31,303 3,564 14,052 16,868 394,396
Total liabilities 50,967 18,452 29,916 3,564 14,052 16,868 506,721
Net assets available for plan benefits $21,848,023 $11,262,665 $10,772,413 $8,494,479 $6,862,141 $6,441,352 $278,559,931
See accompanying notes
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits,
With Fund Information
For the year ended December 30, 1995
Investment Funds
-----------------------------------------------------------------------------------------------
American Lehman Twentieth Lehman
Short Express Brothers Century Brothers
Term Fixed Company Holdings Inc. Ultra Prime Value
Interest Income Common Common Investors Money
Fund Fund Stock Fund Stock Fund Fund Market Fund
Investment Income:
Interest and dividends ................ $ 26,828 $ 10,071,950 $ 523,084 $ 111,718 $ 81 $ 1,279,112
Net realized and unrealized appreciation -- -- 8,654,132 2,692,213 11,341,951 --
in fair value of investments
26,828 10,071,950 9,177,216 2,803,931 11,342,032 1,279,112
Contributions:
Employer .................................. -- -- -- 1,942,105 -- --
Participants .............................. -- 5,033,752 -- 911,904 4,710,456 2,239,425
Rollovers ................................. -- 278,928 -- 346,015 853,738 792,644
----------
-- 5,312,680 -- 3,200,024 5,564,194 3,032,069
Net inter-fund transfers (out) in ......... -- (5,178,427) (1,885,859) 2,381,618 3,467,897 (4,457,741)
Administrative fees ....................... -- (63,637) (12,970) (7,353) (20,892) (7,300)
Participant withdrawals ................... -- (12,664,640) (4,617,562) (1,175,156) (3,871,504) (5,337,041)
Transfer (to) from other plan ............. -- (19,216) (52,181) (3,895) -- 1,896
----------
-- (17,925,920) (6,568,572) 1,195,214 (424,499) (9,800,186)
----------
Net increase (decrease) ................... 26,828 (2,541,290) 2,608,644 7,199,169 16,481,727 (5,489,005)
Net assets available for plan benefits, 278,262 131,334,662 23,313,723 6,675,691 27,204,662 24,071,858
beginning of year
Net assets available for plan benefits, $ 305,090 $128,793,372 $25,922,367 $13,874,860 $43,686,389 $18,582,853
end of year
See accompanying notes
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits,
With Fund Information
For the year ended December 30, 1995
Investment Funds (Cont'd)
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity Vanguard PIMCO Vanguard
Templeton Income Capital & Index Trust Total Fixed Income
Foreign Fund of Income 500 Common Return Long Term Total
-----------------------------------------------------------------------------------------------
Investment Income:
Interest and dividends ................ $ 679,973 $ 760,033 $ 1,258,820 $ 264,339 $ 570,046 $ 580,903 $16,126,887
Net realized and unrealized appreciation 2,032,974 2,663,597 690,665 3,543,643 923,361 1,231,803 33,774,339
in fair value of investments
2,712,947 3,423,630 1,949,485 3,807,982 1,493,407 1,812,706 49,901,226
Contributions:
Employer .................................. -- -- -- -- -- -- 1,942,105
Participants .............................3,855,195 1,323,131 2,102,150 1,944,526 979,827 823,661 23,924,027
Rollovers ................................. 340,238 103,436 1,385,821 1,135,472 242,340 110,257 5,588,889
4,195,433 1,426,567 3,487,971 3,079,998 1,222,167 933,918 31,455,021
Net inter-fund transfers (out) in ....... 335,733 1,123,167 538,318 3,290,669 196,222 188,403 --
Administrative fees ...................... (12,940) (7,393) (7,449) (7,572) (4,534) (4,060) (156,100)
Participant withdrawals ............... (2,961,087) (1,137,603) (1,608,695) (1,152,683 (533,950) (785,212) (35,845,133)
Transfer (to) from other plan ............ (2,340) (2,080) (1,387) -- -- -- (79,203)
(2,640,634) (23,909) (1,079,213) 2,130,414 (342,262) (600,869) (36,080,436)
Net increase (decrease) ................ 4,267,746 4,826,288 4,358,243 9,018,394 2,373,312 2,145,755 45,275,811
Net assets available for plan benefits, 21,848,023 11,262,665 10,772,413 8,494,479 6,862,141 6,441,352 278,559,931
beginning of year
Net assets available for plan $26,115,769 $16,088,953 15,130,656 $17,512,873 $ 9,235,453 $8,587,107 $323,835,742
benefits, end of year
See accompanying notes
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits,
With Fund Information
For the year ended December 30, 1994
Investment Funds
- ------------------------------------------------------------------------------------------------------------------------------------
American Lehman Twentieth Lehman
Express Brothers Century Brothers
Short Term Fixed Company Holdings Inc. Ultra Prime Value Templeton
Interest Income Common Common Investors Money Market Foreign
Fund Fund Stock Fund Stock Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------
Investment Income:
Interest and dividends ..........$ 17,158 $ 10,719,468 $ 1,135,434 $ 41,812 $ -- $ 1,056,132 $ 353,646
Net realized and unrealized
(depreciation) appreciation in
fair value of investments (81,618) -- 109,065 (100,703) (179,557) -- (93,396)
(64,460) 10,719,468 1,244,499 (58,891) (179,557) 1,056,132 260,250
Contributions:
Employer ........................ -- -- -- 2,031,469 -- -- --
Participants .................... -- 6,965,544 1,602,503 123,420 1,800,024 790,935 1,406,570
Rollovers ....................... -- 525,865 25,189 72,944 404,335 416,054 392,716
-- 7,491,409 1,627,692 2,227,833 2,204,359 1,206,989 1,799,286
Net inter-fund transfers (out) in. (63,126) (6,987,552) (8,198,496) 4,763,906 26,137,835 31,360,417 20,671,234
Administrative fees .............. -- (79,801) (15,345) (1,953) (16,226) (17,647) (13,217)
Participant withdrawals .......... (1,393) (11,758,274) (4,337,114) (266,825) (923,061) (8,498,990) (856,357)
Transfer (to) from other plan .... -- (1,343,886) (288,514) 11,621 (18,688) (1,035,043) (13,173)
(64,519) (20,169,513) (12,839,469) 4,506,749 25,179,860 21,808,737 19,788,487
Net (decrease) increase .......... (128,979) (1,958,636) (9,967,278) 6,675,691 27,204,662 24,071,858 21,848,023
Net assets available for plan
benefits, beginning of year 407,241 133,293,298 33,281,001 -- -- -- --
Net assets available for plan
benefits, end of year $ 278,262 $131,334,662 $ 23,313,723 $6,675,691 $27,204,662 $ 24,071,858 $ 21,848,023
==================================================================================================
See accompanying notes
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits,
With Fund Information
For the year ended December 30, 1994
Investment Funds (Cont'd.)
- ------------------------------------------------------------------------------------------------------------------------------------
Smith
Vanguard Barney High Income Smith
PIMCO Fixed Income Shearson Fund of Barney
Income Fidelity S&P Total Long-Term Daily Smith Barney Shearson
Fund of Capital & 500 Return Corporate Dividend Shearson Appreciation
America Income Fund Index Fund Fund Portfolio Fund Income Funds Fund Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
$ 472,299 $ 639,488 $ 8,568 $ 307,525 $ 292,025 $ 62,573 $ 382,324 $ 617,369
(186,129) (1,189,615) 342,231 (287,739) (307,078) -- (511,551) 143,120
286,170 (550,127) 350,799 19,786 (15,053) 62,573 (129,227) 760,489
- - - - - - -
550,492 810,032 477,273 355,373 385,975 549,660 1,270,058 2,985,947
176,936 179,253 222,513 128,301 76,922 17,209 39,730 76,793
727,428 989,285 699,786 483,674 462,897 566,869 1,309,788 3,062,740
10,502,421 10,900,037 7,836,419 6,537,906 6,245,445 (7,411,013) (12,057,837) (38,183,231)
(6,655) (6,681) (4,875) (4,127) (3,884) -- -- --
(248,433) (551,737) (385,788) (153,129) (250,212) (258,300) (454,733) (1,529,549)
1,734 (8,364) (1,862) (21,969) 2,159 141 (1,012) (2,895)
10,249,067 10,333,255 7,443,894 6,358,681 5,993,508 (7,669,172) (12,513,582) (39,715,675)
11,262,665 10,772,413 8,494,479 6,862,141 6,441,352 (7,039,730) (11,333,021) (35,892,446)
-- -- -- -- -- 7,039,730 11,333,021 35,892,446
$ 11,262,665 $ 10,772,413 $ 8,494,479 $ 6,862,141 $ 6,441,352 $ -- $ -- $ --
====================================================================================================================================
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits,
With Fund Information
For the year ended December 30, 1994
Investment Funds (Cont'd.)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities Diversified
Smith Smith Fund Strategic
Barney Barney of Smith Income Fund
Shearson Salomon Shearson Barney of Smith
Global Brothers Aggressive Shearson Barney
Opportunities Capital Growth Income Shearson
Fund Fund Fund Funds Income Funds Total
- -----------------------------------------------------------------------------------------------------------------------------------
$ 29,807 $ -- $ -- $ 167,315 $ 164,457 $ 16,467,400
29,702 (233,129) (1,014,214) (515,146) (188,634) (4,264,391)
59,509 (233,129) (1,014,214) (347,831) (24,177) 12,203,009
-- -- -- -- -- 2,031,469
1,915,442 -- 2,987,189 956,970 663,310 26,596,717
64,346 -- 93,284 39,939 17,805 2,970,134
1,979,788 -- 3,080,473 996,909 681,115 31,598,320
(14,403,295) (4,374,522) (19,599,511) (7,682,648) (5,994,389) --
-- -- -- -- -- (170,411)
(407,188) (128,826) (693,201) (234,367) (72,079) (32,009,556)
(1,976) (688) (3,704) 1,585 (208) (2,724,742)
(14,812,459) (4,504,036) (20,296,416) (7,915,430) (6,066,676) (34,904,709)
(12,773,162) (4,737,165) (18,230,157) (7,266,352) (5,409,738) 8,896,620
12,773,162 4,737,165 18,230,157 7,266,352 5,409,738 269,663,311
$ -- $ -- $ -- $ -- $ -- $ 278,559,931
===================================================================================================
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements
December 30, 1995 and 1994
1. Description of the Plan
General
The Lehman Brothers Holdings Inc. Tax Deferred Savings Plan (the "Plan") is a
defined contribution plan. The Plan became effective January 1, 1984, was
amended and restated effective January 1, 1989 and was subsequently amended
through April 1, 1996. Under the terms of the Plan, qualified employees of
Lehman Brothers Holdings Inc. ("Lehman") and its participating subsidiaries
(collectively, the "Company") are eligible to become Plan participants upon
completion of 12 months of service. Effective July 1, 1995, the 12-month
eligibility requirement has been eliminated and hourly employees are eligible to
participate in the Plan. All eligible employees of the Company can participate
in the Plan immediately upon date of hire.
Prior to May 31, 1994, the Company was a subsidiary of the American Express
Company ("American Express"). On May 31, 1994, American Express completed the
distribution of a special dividend to its shareholders of all of the common
stock of the Company held by American Express. In connection with this
distribution, shareholders of American Express received one fifth of one share
of the Company's common stock for every American Express common share held on
the record date. As a result of this special dividend, the Company is no longer
a subsidiary of American Express.
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 his annual compensation, as defined in the
Plan document. The Company may make a contribution, in Company 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:
1. Participants whose compensation is below $37,800 per year who have not
earned commission income greater than $1,000 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.
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes To Financial Statements (Continued)
1. Description of the Plan-continued
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 will not be made for participants whose
compensation exceeds $100,000 per year.
In 1995 and 1994, Company contributions were made in cash. Boston Safe Deposit &
Trust Company ("Boston Safe"), the Plan's custodian, used cash to purchase the
Company's common stock.
A participant's Before-Tax Contributions will not be subject to tax until
distribution. 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. In 1995 and 1994, the
maximum limitation amount was $9,240. For 1996, the maximum limitation amount is
$9,500. 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 arise from contributions to the Plan of certain assets
previously held on behalf of participants by other qualified plans.
Valuation of Participant Accounts
Separate accounts are maintained for each participant whereby the participant's
account is credited for contributions and investment income and credited or
charged, as appropriate, for investment appreciation or depreciation.
Participant accounts are charged for withdrawals. The periodic allocation of
investment income and investment appreciation or depreciation is based upon the
participant's beneficial interest in each of the investment funds at the
valuation date.
Investments
Effective April 1, 1994, a participant's contributions can be invested in any of
the funds listed below. Investments 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
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes To Financial Statements (Continued)
1. Description of the Plan-continued
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 the investment funds on a monthly basis.
The following is a general description of each investment fund in which the Plan
invested since April 1994, as directed by participants:
Fixed Income Fund: This fund invests its assets with one or more insurance
companies or financial institutions (collectively, "institutions") which
issue contracts ("contracts") providing for the repayment of principal with a
specified annual rate of interest for a specified period. The fund is
currently invested in contracts negotiated with the following institutions:
Carrying Value at
Maturity Interest December 30,
Date Rate(%) 1995 1994
Metropolitan Life Insurance Co.
Contract #11649 06/30/96 9.62 $7,668,194 $27,981,003
Contract #12865 03/31/97 8.10 10,058,107 9,304,447
Contract #13955 06/15/99 8.25 15,839,622 -
Allstate Life Insurance Company
Contract #GICGA5584 12/15/00 7.30 16,278,034 15,171,525
Contract #GICGA5806 07/15/00 6.81 9,085,550 -
John Hancock Mutual Life Insurance Co.
Contract #5724 01/08/96 9.51 5,330,455 12,169,828
Contract #5565 03/31/97 9.60 11,156,679 11,153,715
Prudential Asset Management Group
Contract #7430-211 12/15/99 6.52 8,574,596 12,075,132
Contract #7430-212 12/15/99 7.30 12,544,475 11,691,029
American International Life
Assurance Company of New York
Contract #18180T 10/01/98 5.45 12,698,805 12,042,490
People's Security Insurance Co.
Contract #BDA00473FR 08/15/01 8.20 10,842,259 7,826,976
Contract #BDA00568FR 12/15/01* 6.85 1,067,481 -
Aetna Life Insurance Co.
Contract #014005 12/30/97 8.80 6,401,281 5,883,534
The Principal Financial Group
Contract #4-08804-01 12/15/00 6.15
4,756,695 4,481,475
$132,302,233 $129,781,154
* This contract is cancelable by the issuer on 06/30/97
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements
December 30, 1995 and 1994
1. Description of the Plan-continued
The present value of the contracts approximates the carrying value as of
December 30, 1995 and December 30, 1994. Present value was estimated using an
analysis based on the Plan's current investment rate for a similar contract.
American Express Company Common Stock Fund: This fund invests solely in the
common stock of American Express. As of May 31, 1994, this fund has been
closed to any new contributions, dividend reinvestments, or transfers in from
other funds.
Lehman Brothers Holdings Inc. Common Stock Fund: This fund invests
solely in the common stock of the Company. This fund was established
May 31, 1994 and began accepting contributions as of July 1, 1994.
Twentieth Century Ultra Investors Fund: The primary objective of this fund is
to provide a high level of capital appreciation by investing primarily in
medium and small-sized companies with above average growth potential.
Lehman Brothers Prime Value Money Market Fund: The objective of this
short-term, fixed income money market fund is to provide current income and
stability of principal.
Templeton Foreign Fund: The primary objective of this fund is to provide
long-term growth of capital by investing primarily in securities of companies
located outside the United States.
Income Fund of America: This fund's objective is to provide current income by
investing in debt securities and capital appreciation by investing in equity
securities.
Fidelity Capital & Income Fund: The primary objective of this fund is to
provide a high total return of capital growth and income. The fund invests
primarily in lower rated debt securities and securities of companies with
uncertain financial position.
Vanguard Index Trust 500 Portfolio/S&P 500 Index Fund: This equity fund's
objective is to replicate the investment performance of the Standard & Poor's
500 Index.
PIMCO Total Return Fund: This fund is an intermediate term, fixed income fund
whose objective is to provide a high level of current income with reasonable
risk by investing in a diversified portfolio of fixed income securities of
varying maturities.
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
1. Description of the Plan-continued
Vanguard Fixed Income Long-Term Corporate Portfolio: This fund invests in a
diversified portfolio of long-term corporate and government bonds with the
objective of providing a high level of current income.
Prior to April 1994, a participant could invest in any of the following
investment funds listed below, as well as the American Express Company Common
Stock Fund and the Fixed Income Fund. During this period, contributions to the
investment funds could be made in increments of 25%, with a maximum of 50% of
contributions permitted to be invested in the American Express Company Common
Stock Fund. Participants could elect to change their contribution and investment
balance allocations among the investment funds effective December 31, April 1,
July 1, and October 1 of each year.
The following is a general description of the previous investment funds in which
the Plan invested prior to April 1, 1994:
Smith Barney Shearson Daily Dividend Fund: This fund invests in shares of
Smith Barney Shearson Daily Dividend Fund, Inc., a registered investment
company. The fund invests in short-term money market investments such as U.S.
Government issued or guaranteed securities, certificates of deposit, bankers
acceptances and high-grade commercial paper.
High Income Fund of the Smith Barney Shearson Income Funds: This fund invests
in Class C shares of Smith Barney Shearson High Income Fund, Inc., a
registered investment company. The fund invests in a diversified portfolio,
including high-yield fixed-income securities, preferred stocks, and domestic
and foreign government obligations.
Smith Barney Shearson Appreciation Fund, Inc.: This fund invests in Class C
shares of Smith Barney Shearson Appreciation Fund, Inc., a registered
investment company. The fund's objective is long-term appreciation of capital
by investing primarily in equity securities.
Smith Barney Shearson Global Opportunities Fund: This fund invests in Class C
shares of Smith Barney Shearson Global Opportunities Fund, a registered
investment company. The fund's objective is long-term appreciation of
capital, primarily through investments in common stocks of foreign and
domestic securities.
Salomon Brothers Capital Fund: This fund invests in shares of Salomon
Brothers Capital Fund, Inc., a registered investment company. The fund's
objective is to seek capital appreciation through investments in securities,
primarily common stock, which are believed
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
1. Description of the Plan-continued
to have above average price appreciation potential and which may also involve
above average risk. As of October 1, 1990, this fund has been closed to any
new contributions or transfers in from other funds.
Smith Barney Shearson Aggressive Growth Fund: This fund invests in Class C
shares of Smith Barney Shearson Aggressive Growth Fund, Inc., a registered
investment company. This fund invests principally in the securities of small-
or medium-sized companies which are believed to have above average price
appreciation potential, but which may also have above average risk.
Utilities Fund of the Smith Barney Shearson Income Funds: This fund invests
in Class C shares of the Utilities Fund of the Smith Barney Shearson Income
Funds, a registered investment company. This fund uses a balanced approach of
investing in a diversified portfolio of high quality utility stocks and
investment grade utility bonds to achieve its objective of current income.
Diversified Strategic Income Fund of the Smith Barney Shearson Income Funds:
This fund invests in Class C shares of the Diversified Strategic Income Fund
of the Smith Barney Shearson Income Funds, a registered investment company.
This fund's objective is to provide investors with high current income
through investment in a combination of U.S. government bond and agency
securities, high yield corporate bonds and foreign government bonds.
In addition to the funds described above, a short-term interest fund provides
overnight investments in money market funds of Boston Safe for temporarily
invested cash. While cash for withdrawals is disbursed from this fund,
withdrawals are recorded in the investment fund from which the participant
withdrew.
Benefits
A participant may elect, after attaining the age of 59-1/2, to withdraw all or
any 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 participants before the age of 59-1/2 are permitted only after
meeting specified financial hardship criteria and after obtaining approval by
the Employee Benefit Plans Committee of the Company. Although hardship
withdrawals are allowed, a participant may be subject to an additional 10
percent tax imposed by the Code.
If a participant's employment with the Company terminates for a reason
other than death, the balance in the participant's account is paid to the
participant in a lump-sum payment. However,
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (Continued)
1. Description of the Plan-continued
if the balance in his account exceeds $3,500, payment will not be made without
the participant's consent. Upon death of the participant, 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 withdraw from the
Plan but have not yet been paid was $5,837,737 and $6,847,867 in 1995 and 1994,
respectively.
Vesting
Plan participants are 100 percent vested in all amounts in their respective Plan
accounts.
Income Tax Status
The Internal Revenue Service ("IRS") made a favorable determination in a letter
dated February 14, 1995 that the Plan is qualified under Sections 401(a) and
401(k) of the Code and that the trust established as part of the Plan is,
therefore, exempt from federal income taxes under the provisions of Section
501(a) of the Code. It is not anticipated that amendments to the Plan after the
date of the IRS determination letter will affect the qualified and tax-exempt
status of the Plan and trust.
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.
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.
3. Administrative Fees
Except to the extent paid by the Company all expenses of the Plan are paid by
the Plan. In 1995 and 1994, the Plan was charged $156,101 and $170,411 for
administrative expenses incurred during the respective years. The Company paid
all expenses not directly relating to the administration of the Plan, as well as
all expenses paid to affiliated investment managers.
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. Related Party Transactions
On April 1, 1995, the manager of the S&P 500 Index Fund was changed to The
Vanguard Group. Prior to April 1, 1995, the investments maintained in the S&P
500 Index Fund were managed by PanAgora Asset Management ("PanAgora"), an
affiliate of the Company. Prior to April 1, 1995, all fees relating to the
management of the S&P 500 Index Fund were paid by the Company. The investment
objective of the fund remained the same.
The Company sponsors the Lehman Brothers Prime Value Money Market Fund.
6. Transfer to Other Plan
On July 31, 1993, pursuant to an asset purchase agreement (the "Agreement") with
Primerica Corporation (now known as "The Travelers Inc.") and its subsidiary,
Smith Barney, Harris, Upham & Company Incorporated ("Smith Barney"), the Company
sold its domestic retail brokerage business (except for such businesses
conducted under the Lehman Brothers name) and substantially all of its asset
management business. As a result of the sale, a significant number of employees
became employed by Smith Barney. In 1995 and 1994, additional employees
transferred to Smith Barney. The account balances associated with these
participants were transferred to the Primerica Corporation Savings Plan for
Shearson Employees in the applicable year.
Supplemental Information
Schedule I
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Schedule of Investments Held
December 30, 1995
Par Value/ Current Value Cost
Number at December at December
of Shares 30, 1995 30, 1995
Contracts Issued By Institutions
Metropolitan Life Insurance Co.
Contract #11649 7,668,194 $ 7,668,194 $ 7,668,194
Contract #12865 10,058,107 10,058,107 10,058,107
Contract #13955 15,839,622 15,839,622 * 15,839,622
Allstate Life Insurance Co.
Contract #GICA5584 16,278,034 16,278,034 * 16,278,034
Contract #GICA5806 9,085,550 9,085,550 9,085,550
John Hancock Mutual Life Insurance Co.
Contract #5724 5,330,455 5,330,455 5,330,455
Contract $5565 11,156,679 11,156,679 11,156,679
Prudential Asset Management Group
Contract #7430-211 8,574,596 8,574,596 8,574,596
Contract #7430-212 12,544,475 12,544,475 12,544,475
American International Life Assurance
Company Of New York
Contract 18180T 12,698,805 12,698,805 12,698,805
People's Security Insurance Co.
Contract #BDA00473FR 10,842,259 10,842,259 10,842,259
Contract #BDA00568FR 1,067,481 1,067,481 1,067,481
Aetna Life Insurance Co.
Contract #014005 6,401,281 6,401,281 6,401,281
The Principal Financial Group
Contract #4-08804-01 4,756,695 4,756,695 4,756,695
-------------------------
$132,302,233 $132,302,233
===========================
Stock Funds
American Express Company common stock 629,545 $26,047,424 * $14,453,710
Lehman Brothers Holdings Inc. common 583,133 12,391,576 9,999,553
stock
---------------------------
$38,439,000 $24,453,263
===========================
Mutual Funds
Twentieth Century Ultra Investors Fund 1,617,105 $42,222,614 * $34,455,115
Lehman Brothers Prime Value Money 18,862,032 18,862,032 * 18,862,032
Market Fund
Templeton Foreign Fund 2,817,938 25,868,671 * 26,120,965
Income Fund Of America 971,763 15,421,879 * 13,266,086
Fidelity Capital & Income Fund 1,648,532 15,100,549 * 15,509,153
Vanguard Index Trust 500 Portfolio 284,211 16,370,552 * 13,849,110
PIMCO Total Return Fund 864,302 9,265,317 8,733,498
Vanguard Fixed Income Long-Term 899,925 8,531,288 7,620,417
Corporate Portfolio
=============================
$151,642,902 $138,416,376
=============================
* Investment in excess of five percent of Net Assets Available for Plan
Benefits
Schedule II
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Schedule of Series of Transactions in Excess of Five Percent of
Net Assets Available for Plan Benefits at Beginning of Year
For the year ended December 30, 1995
Contract Cost of Proceeds
Description Number Purchases From Gain(Loss)
Sales
Lehman Prime Value Money $4,223,727
Market Fund
Lehman Prime Value Money $10,881,611 -
Market Fund
Vanguard Index Trust 500 14,696,157
Portfolio
Vanguard Index Trust 500 983,262 $99,832
Portfolio
Metropolitan Life Insurance Co. 11649 1,650,870
Metropolitan Life Insurance Co. 11649 21,963,679 -
Metropolitan Life Insurance Co. 13955 24,179,121
Metropolitan Life Insurance Co. 13955 8,339,499 -
Allstate Life Insurance Co. #GICA5806 15,961,146
Allstate Life Insurance Co. #GICA5806 6,875,596 -
Schedule III
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Schedule of Single Transactions In Excess of Five Percent of
Net Assets Available for Plan Benefits at Beginning of Year
For the year ended December 30, 1995
Cost of Proceeds
Description Purchases From Gain(Loss)
Sales
Metropolitan Life Insurance Co. 11649 -
Metropolitan Life Insurance Co. 21,963,679 -
SIGNATURE
Pursuant to the requirements of the Securities and 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 Kleinschmidt
Wendy Kleinschmidt
Lehman Brothers Holdings Inc.
Employee Benefit Plans Committee
June 28, 1996
EXHIBIT INDEX
Exhibit No. Description
(23) Consent of Experts
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 April 23, 1996, 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 30, 1995.
/s/ Ernst & Young LLP
New York, New York
June 28, 1996