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, 1998
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
YEARS ENDED DECEMBER 30, 1998 AND 1997
WITH REPORT OF INDEPENDENT AUDITORS
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Financial Statements
and Supplemental Information
Years ended December 30, 1998 and 1997
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............................................... 6
Supplemental Information
Schedule I--Schedule of Investments Held.................................... 16
Schedule II--Schedule of Series of Transactions in Excess of
5% of Net Assets Available for Plan Benefits at Beginning of Year........ 17
Report of Independent Auditors
The Employee Benefits 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 (the
"Plan") as of December 30, 1998 and 1997, 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 management. 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 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 Plan at
December 30, 1998 and 1997, and the changes in its net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed 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, 1998, and series of transactions in
excess of five percent of net assets available for plan benefits for the year
then ended, 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 statements of net assets
available for the plan benefits and the statements of changes in net assets
available for plan benefits are 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.
May 12, 1999
2
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Net Assets Available for Plan Benefits,
With Fund Information
December 30, 1998
Investment Funds
----------------------------------------------------------------------------------
AMERICAN LEHMAN
EXPRESS BROTHERS AMERICAN
SHORT COMPANY HOLDINGS INC. CENTURY PRIME
TERM FIXED COMMON COMMON ULTRA VALUE
INTEREST INCOME STOCK STOCK INVESTORS OBLIGATIONS
FUND FUND FUND FUND FUND FUND
----------------------------------------------------------------------------------
ASSETS
Institutional Contracts (at cost plus $107,798,944
interest)
Investments at fair value:
American Express Company Common Stock Fund
419,796 shares (cost: $11,517,390) $43,999,868
Lehman Brothers Holdings Inc. Common Stock
Fund 762,688 shares (cost: $20,393,942) $33,033,924
American Century Ultra Investors Fund
2,524,064 shares (cost: $64,399,562) $83,925,129
Prime Value Obligations Fund
16,771,235 shares (cost: $16,771,235) $16,771,235
Templeton Foreign Fund
4,039,463 shares (cost: $38,504,473)
Income Fund of America
1,488,947 shares (cost: $23,178,143)
Fidelity Capital & Income Fund
2,360,964 shares (cost: $22,475,386)
Vanguard Index Trust 500 Portfolio
613,345 shares (cost: $42,522,721)
PIMCO Total Return Fund
1,152,063 shares (cost: $11,921,823)
Brandywine Blue Fund
225,804 shares (cost: $6,101,144)
ICM Small Company Portfolio
59,669 shares (cost: $1,552,157)
Vanguard Fixed Income Long-Term
Corporate Portfolio
1,244,394 shares (cost: $10,981,727)
----------------------------------------------------------------------------------
-- 107,798,944 43,999,868 33,033,924 83,925,129 16,771,235
Cash and short-term investments $ 354,122 3,393,619 57 1,882,099 -- --
Interest and dividends receivable 1,911 7,766 52 398 -- 70,775
Participant loans -- -- -- -- -- --
Other receivables 10,084 6,457 42,788 100,827 4,243 --
Net Inter-fund transfers (payable) receivable 7,813 (620,670) (50,077) (17,084) (63,176) 234,472
----------------------------------------------------------------------------------
Total assets 373,930 110,586,116 43,992,688 35,000,164 83,866,196 17,076,482
LIABILITIES
Accrued liabilities 1,050 55,287 15,216 13,184 28,378 7,799
Other liabilities -- -- -- -- -- 101,687
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Total liabilities 1,050 55,287 15,216 13,184 28,378 109,486
----------------------------------------------------------------------------------
Net assets available for plan benefits $ 372,880 $110,530,829 $43,977,472 $34,986,980 $83,837,818 $16,966,996
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
--------------------------------------------------------------------------
FIDELITY VANGUARD PIMCO
TEMPLETON INCOME CAPITAL & INDEX TOTAL
FOREIGN FUND OF INCOME TRUST 500 RETURN
FUND AMERICA FUND PORTFOLIO FUND
--------------------------------------------------------------------------
ASSETS
Institutional Contracts (at cost plus
interest)
Investments at fair value:
American Express Company Common Stock Fund
419,796 shares (cost: $11,517,390)
Lehman Brothers Holdings Inc. Common Stock
Fund 762,688 shares (cost: $20,393,942)
American Century Ultra Investors Fund
2,524,064 shares (cost: $64,399,562)
Prime Value Obligations Fund
16,771,235 shares (cost: $16,771,235)
Templeton Foreign Fund
4,039,463 shares (cost: $38,504,473) $33,850,697
Income Fund of America
1,488,947 shares (cost: $23,178,143) $25,758,789
Fidelity Capital & Income Fund
2,360,964 shares (cost: $22,475,386) $22,216,669
Vanguard Index Trust 500 Portfolio
613,345 shares (cost: $42,522,721) $70,031,696
PIMCO Total Return Fund
1,152,063 shares (cost: $11,921,823) $12,142,743
Brandywine Blue Fund
225,804 shares (cost: $6,101,144)
ICM Small Company Portfolio
59,669 shares (cost: $1,552,157)
Vanguard Fixed Income Long-Term
Corporate Portfolio
1,244,394 shares (cost: $10,981,727)
--------------------------------------------------------------------------
33,850,697 25,758,789 22,216,669 70,031,696 12,142,743
Cash and short-term investments (13,987) 4,030 -- 15,248 414
Interest and dividends receivable -- -- -- -- --
Participant loans -- -- -- -- --
Other receivables 13,959 1,240 4,896 35,033 --
Net Inter-fund transfers (payable) receivable 6,296 (11,016) (40,577) 315,186 30,684
--------------------------------------------------------------------------
Total assets 33,856,965 25,753,043 22,180,988 70,397,163 12,173,841
LIABILITIES
Accrued liabilities 15,337 13,960 9,051 34,756 5,326
Other liabilities -- -- 4,889 -- 256
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Total liabilities 15,337 13,960 13,940 34,756 5,582
--------------------------------------------------------------------------
Net assets available for plan benefits $33,841,628 $25,739,083 $22,167,048 $70,362,407 $12,168,259
--------------------------------------------------------------------------
--------------------------------------------------------------------------
---------------------------------------------------------------------------------
VANGUARD
ICM FIXED INCOME
BRANDYWINE SMALL LONG TERM
BLUE COMPANY LOAN CORPORATE
FUND PORTFOLIO ACCOUNT PORTFOLIO TOTAL
---------------------------------------------------------------------------------
ASSETS
Institutional Contracts (at cost plus $107,798,944
interest)
Investments at fair value:
American Express Company Common Stock Fund
419,796 shares (cost: $11,517,390) 43,999,868
Lehman Brothers Holdings Inc. Common Stock
Fund 762,688 shares (cost: $20,393,942) 33,033,924
American Century Ultra Investors Fund
2,524,064 shares (cost: $64,399,562) 83,925,129
Prime Value Obligations Fund
16,771,235 shares (cost: $16,771,235) 16,771,235
Templeton Foreign Fund
4,039,463 shares (cost: $38,504,473) 33,850,697
Income Fund of America
1,488,947 shares (cost: $23,178,143) 25,758,789
Fidelity Capital & Income Fund
2,360,964 shares (cost: $22,475,386) 22,216,669
Vanguard Index Trust 500 Portfolio
613,345 shares (cost: $42,522,721) 70,031,696
PIMCO Total Return Fund
1,152,063 shares (cost: $11,921,823) 12,142,743
Brandywine Blue Fund
225,804 shares (cost: $6,101,144) $5,755,751 5,755,751
ICM Small Company Portfolio
59,669 shares (cost: $1,552,157) $1,420,115 1,420,115
Vanguard Fixed Income Long-Term
Corporate Portfolio
1,244,394 shares (cost: $10,981,727) $11,722,187 11,722,187
---------------------------------------------------------------------------------
5,755,751 1,420,115 -- 11,722,187 468,427,747
Cash and short-term investments -- -- -- -- 5,635,602
Interest and dividends receivable 4 -- -- -- 80,906
Participant loans -- -- 3,976,563 -- 3,976,563
Other receivables -- -- -- 1,798 221,325
Net Inter-fund transfers (payable) receivable (13,385) 209,665 -- 11,869 --
---------------------------------------------------------------------------------
Total assets 5,742,370 1,629,780 3,976,563 11,735,854 478,342,143
LIABILITIES
Accrued liabilities 1,105 151 -- 4,469 205,069
Other liabilities 995 966 -- -- 108,793
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Total liabilities 2,100 1,117 -- 4,469 313,862
---------------------------------------------------------------------------------
Net assets available for plan benefits $5,740,270 $1,628,663 $3,976,563 $11,731,385 $478,028,281
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES.
2
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Net Assets Available for
Plan Benefits, With Fund Information
December 30, 1997
Investment Funds
-------------- ------------- --------------- -------------- ----------------
AMERICAN LEHMAN
EXPRESS BROTHERS
FIXED COMPANY HOLDINGS AMERICAN
SHORT-TERM INCOME COMMON INC. COMMON CENTURY ULTRA
INTEREST FUND FUND STOCK FUND STOCK FUND INVESTORS FUND
-------------- ------------- --------------- -------------- ----------------
ASSETS
Institutional Contracts (at cost plus interest) $120,784,299
Investments at fair value:
American Express Company Common Stock Fund
440,443 shares (cost: $10,122,019) $38,593,823
Lehman Brothers Holdings Inc. Common Stock Fund
703,642 shares (cost: $15,659,963) $35,138,123
American Century Ultra Investors Fund
2,329,416 shares (cost: $56,928,938) $63,499,886
Prime Value Obligations Fund
16,716,816 shares (cost: $16,716,816)
Templeton Foreign Fund
3,713,252 shares (cost: $36,051,442)
Income Fund of America
1,340,881 shares (cost: $20,187,646)
Fidelity Capital & Income Fund
2,063,971 shares (cost: $19,392,385)
Vanguard Index Trust 500 Portfolio
516,381 shares (cost: $31,062,694)
PIMCO Total Return Fund
972,301 shares (cost: $9,938,846)
Brandywine Blue Fund
79,718 shares (cost: $2,300,525)
Vanguard Fixed Income Long-Term Corporate
Portfolio 1,063,658 shares (cost: $9,218,984)
-------------- ------------- --------------- -------------- ----------------
-- 120,784,299 38,593,823 35,138,123 63,499,886
Cash and short-term investments $324,335 2,328 -- 100,427 --
Interest and dividends receivable 1,512 3 99,240 287 2
Other receivables 10,084 10,839 79,678 1,702,188 4,137
Net Inter-fund transfers (payable) receivable 7,648 (1,937,644) (141,038) 28,870 (69,856)
-------------- ------------- --------------- -------------- ----------------
Total assets 343,579 118,859,825 38,631,703 36,969,895 63,434,169
LIABILITIES
Accrued liabilities -- 49,860 12,375 77,833 21,586
Other liabilities -- -- -- -- --
-------------- ------------- --------------- -------------- ----------------
Total liabilities -- 49,860 12,375 77,833 21,586
-------------- ------------- --------------- -------------- ----------------
-------------- ------------- --------------- -------------- ----------------
Net assets available for plan benefits $343,579 $118,809,965 $38,619,328 $36,892,062 $63,412,583
-------------- ------------- --------------- -------------- ----------------
-------------- ------------- --------------- -------------- ----------------
-------------- -------------- -------------- -------------- --------------
PRIME VALUE INCOME FIDELITY VANGUARD
OBLIGATIONS TEMPLETON FUND OF CAPITAL & INDEX TRUST
FUND FOREIGN FUND AMERICA INCOME FUND 500 PORTFOLIO
-------------- -------------- -------------- -------------- --------------
ASSETS
Institutional Contracts (at cost plus interest)
Investments at fair value:
American Express Company Common Stock Fund
440,443 shares (cost: $10,122,019)
Lehman Brothers Holdings Inc. Common Stock Fund
703,642 shares (cost: $15,659,963)
American Century Ultra Investors Fund
2,329,416 shares (cost: $56,928,938)
Prime Value Obligations Fund
16,716,816 shares (cost: $16,716,816) $16,716,816
Templeton Foreign Fund
3,713,252 shares (cost: $36,051,442) $36,946,857
Income Fund of America
1,340,881 shares (cost: $20,187,646) $23,800,644
Fidelity Capital & Income Fund
2,063,971 shares (cost: $19,392,385) $20,598,427
Vanguard Index Trust 500 Portfolio
516,381 shares (cost: $31,062,694) $46,531,049
PIMCO Total Return Fund
972,301 shares (cost: $9,938,846)
Brandywine Blue Fund
79,718 shares (cost: $2,300,525)
Vanguard Fixed Income Long-Term Corporate
Portfolio 1,063,658 shares (cost: $9,218,984)
-------------- -------------- -------------- -------------- --------------
16,716,816 36,946,857 23,800,644 20,598,427 46,531,049
Cash and short-term investments -- -- -- -- --
Interest and dividends receivable -- -- 1 -- 1
Other receivables -- 150 1,307 -- 10,557
Net Inter-fund transfers (payable) receivable (348,666) (287,693) 160,679 (8,801) 510,638
-------------- -------------- -------------- -------------- --------------
Total assets 16,368,150 36,659,314 23,962,631 20,589,626 47,052,245
LIABILITIES
Accrued liabilities 6,987 13,308 7,866 7,417 13,119
Other liabilities 117,404 -- -- 4,058 --
-------------- -------------- -------------- -------------- --------------
Total liabilities 124,391 13,308 7,866 11,475 13,119
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Net assets available for plan benefits $16,243,759 $36,646,006 $23,954,765 $20,578,151 $47,039,126
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
--------------- -------------- -------------- ----------------
VANGUARD
FIXED INCOME
LONG-TERM
PIMCO TOTAL BRANDYWINE CORPORATE
RETURN FUND BLUE FUND PORTFOLIO TOTAL
--------------- -------------- -------------- ----------------
ASSETS
Institutional Contracts (at cost plus interest) $120,784,299
Investments at fair value:
American Express Company Common Stock Fund
440,443 shares (cost: $10,122,019) 38,593,823
Lehman Brothers Holdings Inc. Common Stock Fund
703,642 shares (cost: $15,659,963) 35,138,123
American Century Ultra Investors Fund
2,329,416 shares (cost: $56,928,938) 63,499,886
Prime Value Obligations Fund
16,716,816 shares (cost: $16,716,816) 16,716,816
Templeton Foreign Fund
3,713,252 shares (cost: $36,051,442) 36,946,857
Income Fund of America
1,340,881 shares (cost: $20,187,646) 23,800,644
Fidelity Capital & Income Fund
2,063,971 shares (cost: $19,392,385) 20,598,427
Vanguard Index Trust 500 Portfolio
516,381 shares (cost: $31,062,694) 46,531,049
PIMCO Total Return Fund
972,301 shares (cost: $9,938,846) $10,539,748 10,539,748
Brandywine Blue Fund
79,718 shares (cost: $2,300,525) $2,105,351 2,105,351
Vanguard Fixed Income Long-Term Corporate
Portfolio 1,063,658 shares (cost: $9,218,984) $ 9,881,380 9,881,380
--------------- -------------- -------------- ----------------
10,539,748 2,105,351 9,881,380 425,136,403
Cash and short-term investments -- -- -- 427,090
Interest and dividends receivable 1 -- -- 101,047
Other receivables -- -- 1,367 1,820,307
Net Inter-fund transfers (payable) receivable 200,681 1,562,248 322,934 --
--------------- -------------- -------------- ----------------
Total assets 10,740,430 3,667,599 10,205,681 427,484,847
LIABILITIES
Accrued liabilities 3,998 114 3,469 217,932
Other liabilities 946 3 -- 122,411
--------------- -------------- -------------- ----------------
Total liabilities 4,944 117 3,469 340,343
--------------- -------------- -------------- ----------------
--------------- -------------- -------------- ----------------
Net assets available for plan benefits $10,735,486 $3,667,482 $10,202,212 $427,144,504
--------------- -------------- -------------- ----------------
--------------- -------------- -------------- ----------------
SEE ACCOMPANYING NOTES.
3
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits,
With Fund Information
Year ended December 30, 1998
Investment Funds
-------------------------------------------------------------------------------------------
AMERICAN LEHMAN
EXPRESS BROTHERS AMERICAN
SHORT COMPANY HOLDINGS INC. CENTURY PRIME
TERM FIXED COMMON COMMON ULTRA VALUE
INTEREST INCOME STOCK STOCK INVESTORS OBLIGATIONS
FUND FUND FUND FUND FUND FUND
-------------------------------------------------------------------------------------------
Investment income:
Interest and dividends $ 29,251 $ 7,590,053 $ 283,510 $ 225,844 $ (39) $ 899,433
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments -- -- 6,180,264 (4,770,276) 21,856,734 --
-------------------------------------------------------------------------------------------
29,251 7,590,053 6,463,774 (4,544,432) 21,856,695 899,433
Contributions:
Employer -- -- -- 2,077,735 -- --
Participants -- 2,821,357 -- 3,190,813 6,466,345 1,105,194
Rollovers -- 388,080 -- 590,184 544,803 60,372
-------------------------------------------------------------------------------------------
-- 3,209,437 -- 5,858,732 7,011,148 1,165,566
Net inter-fund transfers (out) in -- (4,127,748) (1,439,591) (1,068,932) (2,758,482) 2,045,683
Administrative fees 50 (104,062) (29,277) (32,548) (49,935) (10,766)
Participant withdrawals -- (14,846,816) (2,064,178) (2,346,102) (5,634,191) (3,633,097)
Transfer (to) from other plan -- -- 2,427,416 228,200 -- 256,418
-------------------------------------------------------------------------------------------
50 (19,078,626) (1,105,630) (3,219,382) (8,442,608) (1,341,762)
-------------------------------------------------------------------------------------------
Net increase (decrease) 29,301 (8,279,136) 5,358,144 (1,905,082) 20,425,235 723,237
Net assets available for plan
benefits, beginning of year 343,579 118,809,965 38,619,328 36,892,062 63,412,583 16,243,759
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Net assets available for plan
benefits, $ 372,880 $110,530,829 $43,977,472 $34,986,980 $83,837,818 $16,966,996
end of year
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
FIDELITY VANGUARD PIMCO
TEMPLETON INCOME CAPITAL & INDEX TOTAL BRANDYWINE
FOREIGN FUND OF INCOME TRUST 500 RETURN BLUE
FUND AMERICA FUND PORTFOLIO FUND FUND
------------------------------------------------------------------------------------------
Investment income:
Interest and dividends $ 954,383 $ 1,214,108 $ 1,756,813 $ 782,231 $ 838,317 $ 45,112
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments (2,825,659) 1,037,865 (756,739) 14,171,726 255,730 (192,747)
------------------------------------------------------------------------------------------
(1,871,276) 2,251,973 1,000,074 14,953,957 1,094,047 (147,635)
Contributions:
Employer -- -- -- -- -- --
Participants 4,024,880 1,669,221 2,419,907 7,436,154 788,415 1,078,208
Rollovers 325,635 369,239 304,872 1,713,908 200,346 345,775
------------------------------------------------------------------------------------------
4,350,515 2,038,460 2,724,779 9,150,062 988,761 1,423,983
Net inter-fund transfers (out) in (2,718,360) (526,918) (408,145) 3,884,540 106,457 982,606
Administrative fees (24,292) (17,114) (15,087) (41,207) (7,778) (3,983)
Participant withdrawals (2,540,965) (1,962,083) (1,712,724) (4,624,071) (748,714) (182,183)
Transfer (to) from other plan -- -- -- -- -- --
------------------------------------------------------------------------------------------
(5,283,617) (2,506,115) (2,135,956) (780,738) (650,035) 796,440
------------------------------------------------------------------------------------------
Net increase (decrease) (2,804,378) 1,784,318 1,588,897 23,323,281 1,432,773 2,072,788
Net assets available for plan
benefits, beginning of year 36,646,006 23,954,765 20,578,151 47,039,126 10,735,486 3,667,482
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Net assets available for plan
benefits, $33,841,628 $25,739,083 $22,167,048 $70,362,407 $12,168,259 $ 5,740,270
end of year
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
-----------------------------------------------------------------
VANGUARD
ICM FIXED INCOME
SMALL LONG TERM
COMPANY LOAN CORPORATE
PORTFOLIO ACCOUNT PORTFOLIO TOTAL
-----------------------------------------------------------------
Investment income:
Interest and dividends $ 7,691 $ 136,113 $ 693,039 $ 15,455,859
Net realized and unrealized
appreciation/(depreciation) in
fair value of investments (66,953) -- 301,110 35,191,055
-----------------------------------------------------------------
(59,262) 136,113 994,149 50,646,914
Contributions:
Employer -- -- -- 2,077,735
Participants 92,815 -- 859,368 31,952,677
Rollovers 74,808 -- 169,730 5,087,752
-----------------------------------------------------------------
167,623 -- 1,029,098 39,118,164
Net inter-fund transfers (out) in 1,522,619 3,897,432 608,839 --
Administrative fees (446) -- (7,716) (344,161)
Participant withdrawals (1,871) (56,982) (1,095,197) (41,449,174)
Transfer (to) from other plan -- -- -- 2,912,034
-----------------------------------------------------------------
1,520,302 3,840,450 (494,074) (38,881,301)
-----------------------------------------------------------------
Net increase (decrease) 1,628,663 3,976,563 1,529,173 50,883,777
Net assets available for plan
benefits, beginning of year -- -- 10,202,212 427,144,504
-----------------------------------------------------------------
-----------------------------------------------------------------
Net assets available for plan
benefits, $1,628,663 $3,976,563 $11,731,385 $478,028,281
end of year
-----------------------------------------------------------------
-----------------------------------------------------------------
SEE ACCOMPANYING NOTES
4
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Statement of Changes in Net Assets Available
for Plan Benefits, With Fund Information
Year ended December 30, 1997
Investment Funds
--------------- -------------- ------------- ---------------- ---------------
AMERICAN LEHMAN
EXPRESS BROTHERS
COMPANY HOLDINGS INC. AMERICAN
SHORT-TERM FIXED INCOME COMMON COMMON CENTURY ULTRA
INTEREST FUND FUND STOCK FUND STOCK FUND INVESTORS FUND
--------------- -------------- ------------- ---------------- ---------------
Investment Income:
Interest and dividends $ 19,078 $ 8,639,070 $ 537,266 $ 167,428 $ 24,548
Net realized and unrealized appreciation
(depreciation) in fair value of -- -- 12,205,160 12,234,246 11,186,103
investments
--------------- -------------- ------------- ---------------- ---------------
19,078 8,639,070 12,742,426 12,401,674 11,210,651
Contributions:
Employer -- -- -- 1,722,065 --
Participants -- 3,313,957 -- 1,904,278 6,042,414
Rollovers -- 73,357 -- 346,569 885,332
--------------- -------------- ------------- ---------------- ---------------
-- 3,387,314 -- 3,972,912 6,927,746
Net Inter-fund transfers (out) in -- (6,365,374) (1,380,654) 1,862,026 (1,171,441)
Administrative fees -- (122,050) (29,555) (25,684) (50,500)
Participant withdrawals -- (13,914,036) (2,380,147) (2,357,871) (5,656,672)
Transfer (to) from other plans -- -- -- -- --
--------------- -------------- ------------- ---------------- ---------------
-- (20,401,460) (3,790,356) (521,529) (6,878,613)
--------------- -------------- ------------- ---------------- ---------------
Net increase (decrease) 19,078 (8,375,076) 8,952,070 15,853,057 11,259,784
Net assets available for plan benefits,
beginning of year 324,501 127,185,041 29,667,258 21,039,005 52,152,799
--------------- -------------- ------------- ---------------- ---------------
--------------- -------------- ------------- ---------------- ---------------
Net assets available for plan benefits,
end of year $343,579 $118,809,965 $38,619,328 $36,892,062 $63,412,583
--------------- -------------- ------------- ---------------- ---------------
--------------- -------------- ------------- ---------------- ---------------
---------------- -------------- ---------------- --------------- ----------------
PRIME VALUE FIDELITY VANGUARD INDEX
OBLIGATIONS TEMPLETON INCOME FUND OF CAPITAL TRUST 500
FUND FOREIGN FUND AMERICA & INCOME FUND PORTFOLIO
---------------- -------------- ---------------- --------------- ----------------
Investment Income:
Interest and dividends $ 976,869 $ 1,328,608 $ 1,142,260 $ 1,358,842 $ 757,961
Net realized and unrealized appreciation
(depreciation) in fair value of -- 1,159,175 2,899,941 1,307,405 9,834,067
investments
---------------- -------------- ---------------- --------------- ----------------
976,869 2,487,783 4,042,201 2,666,247 10,592,028
Contributions:
Employer -- -- -- -- --
Participants 1,258,054 3,903,768 1,459,306 2,316,102 5,070,556
Rollovers 237,325 700,351 207,136 518,134 1,128,887
---------------- -------------- ---------------- --------------- ----------------
1,495,379 4,604,119 1,666,442 2,834,236 6,199,443
Net Inter-fund transfers (out) in (113,136) 133,272 962,039 (838,733) 2,664,068
Administrative fees (14,775) (31,568) (18,081) (16,901) (35,445)
Participant withdrawals (3,381,091) (3,154,266) (1,422,994) (1,499,523) (3,208,126)
Transfer (to) from other plans -- -- -- -- --
---------------- -------------- ---------------- --------------- ----------------
(3,509,002) (3,052,562) (479,036) (2,355,157) (579,503)
---------------- -------------- ---------------- --------------- ----------------
Net increase (decrease) (1,036,754) 4,039,340 5,229,607 3,145,326 16,211,968
Net assets available for plan benefits,
beginning of year 17,280,513 32,606,666 18,725,158 17,432,825 30,827,158
---------------- -------------- ---------------- --------------- ----------------
---------------- -------------- ---------------- --------------- ----------------
Net assets available for plan benefits,
end of year $16,243,759 $36,646,006 $23,954,765 $20,578,151 $ 47,039,126
---------------- -------------- ---------------- --------------- ----------------
---------------- -------------- ---------------- --------------- ----------------
--------------- --------------- ----------------- ---------------
VANGUARD
FIXED INCOME
LONG-TERM
PIMCO TOTAL BRANDYWINE CORPORATE
RETURN FUND BLUE FUND PORTFOLIO TOTAL
--------------- --------------- ----------------- ---------------
Investment Income:
Interest and dividends $ 649,540 $ -- $ 596,346 $ 16,197,816
Net realized and unrealized appreciation
(depreciation) in fair value of 273,864 (206,749) 436,086 51,329,298
investments
--------------- --------------- ----------------- ---------------
923,404 (206,749) 1,032,432 67,527,114
Contributions:
Employer -- -- -- 1,722,065
Participants 793,294 22,709 759,110 26,843,548
Rollovers 85,395 -- 178,619 4,361,105
--------------- --------------- ----------------- ---------------
878,689 22,709 937,729 32,926,718
Net Inter-fund transfers (out) in (392,051) 3,851,778 788,206 --
Administrative fees (8,750) (256) (7,229) (360,794)
Participant withdrawals (654,284) -- (882,191) (38,511,201)
Transfer (to) from other plans -- -- -- --
--------------- --------------- ----------------- ---------------
(1,055,085) 3,851,522 (101,214) (38,871,995)
--------------- --------------- ----------------- ---------------
Net increase (decrease) 747,008 3,667,482 1,868,947 61,581,837
Net assets available for plan benefits,
beginning of year 9,988,478 -- 8,333,265 365,562,667
--------------- --------------- ----------------- ---------------
--------------- --------------- ----------------- ---------------
Net assets available for plan benefits,
end of year $ 10,735,486 $ 3,667,482 $10,202,212 $427,144,504
--------------- --------------- ----------------- ---------------
--------------- --------------- ----------------- ---------------
SEE ACCOMPANYING NOTES.
5
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements
December 30, 1998 and 1997
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 November 15, 1998. 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 as soon
as administratively possible upon employment. Prior to July 1, 1995, there was a
12-month service requirement for plan participants.
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 the participant's 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 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.
6
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 1998 and 1997, 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 Internal Revenue Code of 1986, as amended (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. The maximum limitation amount was
$10,000 and $9,500 for 1998 and 1997, respectively. 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.
7
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
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
Participants' 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 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, generally on a monthly basis.
The following is a general description of each investment fund in which the Plan
invested since January 1997, as directed by participants:
8
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
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 (%) 1998 1997
------------ ----------- -------------------- -------------------
Metropolitan Life Insurance Co.
Contract #24565 12/15/01 7.30 $ 5,976,916 $ 11,140,578
Contract #13955 06/15/99 8.25 6,697,411 12,373,979
Allstate Life Insurance Company
Contract #GICGA5584 12/15/00 7.30 15,082,111 14,055,623
Contract #GICGA5806 07/05/00 6.81 7,564,002 7,081,548
Prudential Asset Management Group
Contract #7430-211 12/15/99 6.52 10,363,944 9,729,580
American International Life
Assurance Company of New York
Contract #18180T 6/15/00 5.45 8,934,160 14,120,693
People's Security Insurance Co.
Contract #BDA00473FR 08/15/01 8.20 13,734,267 12,693,416
Contract #BDA00568FR 12/15/01 6.85 11,963,674 11,200,343
The Principal Financial Group
Contract #4-08804-01 12/15/00 6.15 4,267,388 5,360,200
Contract #4-08804-02 12/15/02 6.40 11,277,600 10,599,252
New York Life Insurance Company
Contract #30727 6/14/02 6.52 3,405,565 7,376,078
Transamerica Life Insurance Company
Contract #51499 12/15/02 6.02 3,439,335 5,053,009
Travelers Life Insurance Company
Contract #GA16953 12/15/02 6.02 5,092,571 -
-------------------- -------------------
$107,798,944 $ 120,784,299
==================== ===================
9
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
The carrying value of the contracts approximates their fair value as of
December 30, 1998 and 1997. Carrying 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.
AMERICAN 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 large-sized companies with above average growth potential.
PRIME VALUE OBLIGATIONS 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.
10
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
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.
BRANDYWINE BLUE FUND: This fund invests in high quality blue chip stocks
with the objective of providing long-term growth. This fund was added as an
investment option to the Plan on November 1, 1997.
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.
ICM SMALL COMPANY PORTFOLIO: This fund invests in common stock of smaller
companies in terms of revenue and assets and more, importantly, in terms of
market capitalization with the objective of providing maximum long-term
total return. This fund was added as an investment option to the Plan on
June 1, 1998.
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.
11
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENTS IN EXCESS OF 5% OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
The following is a schedule of investments held in excess of 5% of the net
assets available for plan benefits at the end of 1998:
MARKET VALUE
NUMBER AT DECEMBER
FUNDS OF SHARES 30, 1998
------------------- --------------------
American Express Company common stock 419,796 $43,999,868
Lehman Brothers Holdings Inc. common stock 762,688 33,033,924
American Century Ultra Investors Fund 2,524,064 83,925,129
Templeton Foreign Fund 4,039,463 33,850,697
Vanguard Index Trust 500 Portfolio 613,345 70,031,696
Income Fund of America 1,488,947 25,758,789
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 from
before-tax contributions and pre-1989 earnings thereon, only after meeting
specified financial hardship criteria and after obtaining approval by the
Employee Benefit Plans Committee of the Company. A participant can elect to
withdraw all or a part of their rollover contribution made to the Plan. Prior to
1999, such a withdrawal must have been at least $1,000 (or 100% of the value of
his account if less) and was allowed only once during any consecutive 12-month
period.
12
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Although hardship and rollover withdrawals are allowed, a participant may be
subject to an additional 10% tax imposed by the Code for distributions before
age 59 1/2. 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, if the balance in his account
exceeds $5000, payment will not be made before age 65 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 receive distributions
(or to be paid automatically as described above) from the Plan but have not yet
been paid was $5,319,943 and $5,173,739 in 1998 and 1997, respectively.
VESTING
Plan participants are 100 percent vested in all amounts in their respective Plan
accounts.
INCOME TAX STATUS
The Plan received a determination letter from the Internal Revenue Service
("IRS") dated February 14, 1995, stating that the Plan is qualified under
Section 401(a) of the Internal Revenue Code ("Code") and, therefore, the related
trust is exempt from taxation. The Plan has been amended subsequent to the
receipt of the determination letter. The Employee Benefits Plan Committee
intends to apply for a new determination letter from the IRS. Once qualified,
the Plan is required to operate in conformity with the Code to maintain its
qualification. The Employee Benefits Plan Committee believes the Plan is being
operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is tax
exempt.
13
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT LOANS RECEIVABLE
Participants may borrow from their plan accounts a minimum of $1,000 up to a
maximum of $50,000 or 50% of their vested account balance, whichever is less.
Loan transactions are treated as a transfer from (to) the investment fund to
(from) the loan account. Loan terms range from 1 year to 5 years or up to 10
years for the purchase of a primary residence as long as documentation is
provided. The loans are secured by one half of the balance in the participant's
accounts and bear interest at the rate of prime plus one. Principal and interest
are paid ratably through biweekly or monthly payroll deductions, depending on
the frequency with which the employee is paid. Participants who terminate with
outstanding loan balances have until the end of the quarter following the
quarter in which they terminate to pay the balance of their loan in full, in one
lump sum payment. Loans not repaid in that timeframe will be reported as taxable
distributions. Outstanding loan balances will also be treated as taxable
distributions for those participants who request a distribution of their account
prior to repaying their loan. For the year ended December 30, 1998, $45,982 in
outstanding loan balances were reclassified as taxable distributions.
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.
14
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
OTHER
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded on the accrual basis
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 1998 and 1997, the Plan was charged $327,110 and $360,794 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. TRANSFER FROM OTHER PLAN
A transfer was made from the Lehman Brothers Holdings Inc. Employee Stock
Ownership Plan upon its termination for participants who elected to transfer
their account balances in the amount of $2,912,034. On December 1, 1998, 24,259
shares of American Express common shares valued at $2,427,416, 4,564 shares of
Lehman Brothers Holdings common shares valued at $228,200, and $256,418 in cash
were transferred into the Plan on behalf of these participants.
15
Supplemental Information
SCHEDULE I
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Item 27a--Schedule of Investments Held
Plan No. 003
Employer Identification No. 13-3216325
December 30, 1998
PAR VALUE/ CURRENT VALUE COST AT
NUMBER OF AT DECEMBER DECEMBER
SHARES 30, 1998 30, 1998
----------------- ----------------- ------------------
CONTRACTS ISSUED BY INSTITUTIONS
Metropolitan Life Insurance Co.
Contract #24565 $ 5,976,916 $ 5,976,916 $ 5,976,916
Contract #13955 6,697,411 6,697,411 6,697,411
Allstate Life Insurance Co.
Contract #GICA5584 15,082,111 15,082,111 15,082,111
Contract #GICA5806 7,564,002 7,564,002 7,564,002
Prudential Asset Management Group
Contract #7430-211 10,363,944 10,363,944 10,363,944
American International Life Assurance Company of New York
Contract #18180T 8,934,160 8,934,160 8,934,160
People's Security Insurance Co.
Contract #BDA00473FR 13,734,267 13,734,267 13,734,267
Contract #BDA00568FR 11,963,674 11,963,674 11,963,674
The Principal Financial Group
Contract #4-08804-01 4,267,388 4,267,388 4,267,388
Contract #4-08804-02 11,277,600 11,277,600 11,277,600
New York Life Insurance Co.
Contract #30727 3,405,565 3,405,565 3,405,565
TransAmerica Life Insurance Co.
Contract #51499 3,439,335 3,439,335 3,439,335
Travelers Life Insurance Co.
Contract #GA16953 5,092,571 5,092,571 5,092,571
----------------- ------------------
107,798,944 107,798,944
STOCK FUNDS
American Express Company common stock 419,796 43,999,868 11,517,390
Lehman Brothers Holdings Inc. common stock 762,688 33,033,924 20,393,942
----------------- ------------------
77,033,792 31,911,332
MUTUAL FUNDS
American Century Ultra Investors Fund 2,524,064 83,925,129 64,399,562
Prime Value Obligations Fund 16,771,235 16,771,235 16,771,235
Templeton Foreign Fund 4,039,463 33,850,697 38,504,473
Income Fund of America 1,488,947 25,758,789 23,178,143
Fidelity Capital & Income fund 2,360,964 22,216,669 22,475,386
Vanguard Index Trust 500 Portfolio 613,345 70,031,696 42,522,721
PIMCO Total Return Fund 1,152,063 12,142,743 11,921,823
Vanguard Fixed Income Long-Term Corporate Portfolio 1,244,394 11,722,187 10,981,727
ICM Small Company Portfolio Fund 59,669 1,420,115 1,552,157
Brandywine Blue Fund 225,804 5,755,751 6,101,144
----------------- ------------------
283,595,011 238,408,371
LOAN ACCOUNT 3,976,563 3,976,563
----------------- ------------------
TOTAL INVESTMENTS $472,404,310 $382,095,210
================= ==================
16
SCHEDULE II
Lehman Brothers Holdings Inc.
Tax Deferred Savings Plan
Item 27d--Schedule of Series of Transactions in Excess of 5% of
Net Assets Available for Plan Benefits at Beginning of Year
Plan No. 003
Employer Identification No. 13-3216325
For the year ended December 30, 1998
COST OF PROCEEDS
DESCRIPTION PURCHASES FROM SALES GAIN(LOSS)
- ---------------------------------------- ------------------ ------------------- ---------------
CATEGORY (III)
American Century Ultra Investors $14,103,503
American Century Ultra Investors $8,375,286 $1,742,407
THERE WERE NO CATEGORY (I), (II) OR (IV) TRANSACTIONS.
17
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:________________________________
Wendy Kleinschmidt
Lehman Brothers Holdings Inc.
Employee Benefit Plans Committee
June 29, 1999
18
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
(23) Consent of Experts
19