EXHIBIT 12
LEHMAN BROTHERS HOLDINGS INC. AND SUBSIDIARIES
COMPUTATION IN SUPPORT
OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
(DOLLARS IN MILLIONS)
FOR THE FOR THE
ELEVEN MONTHS YEAR
FOR THE YEAR ENDED DECEMBER 31 ENDED ENDED
-------------------------------------- NOVEMBER 30 NOVEMBER 30
1991 1992 1993 1994 1995
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Combined Fixed Charges and
Preferred Dividends:
Interest expense:
Subordinated indebtedness........ $ 170 $ 150 $ 144 $ 158 $ 206
Bank loans and other
borrowings*...................... 4,755 5,035 5,224 6,294 10,199
Interest component of rentals of
office and equipment............. 70 74 76 42 44
Other adjustments**.............. 2 2 7 4 28
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Total fixed charges.............. 4,997 5,261 5,451 6,498 10,477
Preferred dividends (tax
equivalent basis).............. 48 48 48 58 64
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TOTAL (A)........................ $5,045 $5,309 $5,499 $ 6,556 $ 10,541
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Earnings:
Pretax income (loss) from
continuing operations............ $ 150 $ (247) $ 27 $ 193 $ 369
Fixed charges.................... 4,997 5,261 5,451 6,498 10,477
Other adjustments***............. 7 (6) (4) (28)
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TOTAL (B)........................ $5,154 $5,014 $5,472 $ 6,687 $ 10,818
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(B / A).......................... 1.02 **** **** 1.02 1.03
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* Includes amortization of long-term debt discount.
** Other adjustments include capitalized interest and debt issuance costs and
amortization of capitalized interest.
*** Other adjustments include adding the net loss of affiliates accounted for
at equity whose debt is not guaranteed by the Company and subtracting
capitalized interest and debt issuance costs and undistributed net income
of affiliates accounted for at equity.
**** Earnings were inadequate to cover fixed charges and preferred dividends and
would have had to increase approximately $295 million in 1992 and $27
million in 1993 in order to cover the deficiency.