Lehman Brothers Inc'

1
Lehman Brothers Inc.

• 399 Park Avenue
• NEW YORK NY 10179
• www.lehman.com

2
History of Lehman Brothers
? Founded in 1844 by Henry Lehman in Montgomery,
Alabama. Two brothers joined him 6 years later
to form Lehman Brothers initially as a cotton
broker. ? Opened office in NYC in 1858 to expand
commodities operations. ? By 1900, had expanded
into securities trading and investment banking in
US, Europe, and Japan. ? Over the next 60 years,
Lehman grew organically by building strong
relationships in every major sector. ? 1920s -
Motion Pictures (studios) w/ Paramount, Fox ?
1930s - Oil Gas w/ Halliburton, Kerr-McGee ?
1940s - Consumer Industries w/ Ford, GM ?
1950s Electronics/Computers w/ Digital
Equipment ? 1960s Transportation/Travel w/
Hertz, TWA, American Airlines 1984- American
Express acquired Lehman to combine its strength
in i-banking and institutional sales with newly
acquired Shearson Loeb, known particularly for
retail sales strength New firm Shearson Lehman
produced uneven results, so Amex sold Shearson,
then Lehman in 1993. Loss of retail sales network
and poor compensation plans drove away top equity
analyst talent and Lehmans underwriting
business. Good news..Lehman is back!
3
Lehman Price Performance (1996-2006)
4
Lehman Today

• The Leader in Fixed Income Business
• Growing in reputation for Equity and MA
• Investment Management Division continues to grow
• Lehman has rebounded and is again seen as a
  strong competitor

5
Fixed Income Focus

• 82 of Pretax Profits from underwriting/trading
  of bonds (Q3 2006)
• Working to diversifying business
• Purchased Mutual Fund Neuberger Berman in 2003
• Total Assets under Management now total 160
  billion
• Non-fixed income workforce has increased 68
  since 2001

6
Financials
Source Business Week
7
Financials.continued
Current Stock Price 76.15 Current Market
Capitalization 40.4 billion As of close of
trading 11/6/06
Source Business Week
8
Culture

• Client focused
• Global bank New York, Tokyo, London
• Pride themselves in the talent and diversity of
  their employees
• People are fairly atypical for Wall Street
• Important to get into a strong group at Lehman
• Recruiting organization distinguishes b/w
• I-Banking Associate
• Private Investment Management Associate
• Strengths
• Generalist program, with rotation through several
  groups, then receive specific assignment after
  assessing the groups and your interests
• Three and a half year program
• Flat organization, and meritocracy
• Lehmans name will be better recognized on resume
  than small boutiques and newly formed specialist
  I-banks

9
Management

• Dick Fuld
• With Lehman since analyst days in 1955
• According to Lehman Brothers' former Chairman and
  CEO Peter Peterson, Dick deserves enormous
  credit for reinventing the culture of Lehman
  Brothers. He was wise enough to see how
  destructive the old Lehman culture was and
  effective enough to build a new culture to
  replace it. In today's investment banking
  industry, with trading and capital markets and
  investment banking so integrated, that kind of
  teamwork is utterly essential, and I think it's
  one big reason why they've been so successful.
• Joseph M. Gregory, President and Chief Operating
  Officer
• Chris OMeara, Chief Financial Officer

10
Recognitions

• 1 Corporate Performance - Barron 2006
• 1 "All-America Fixed-Income Research Team" -
  Institutional Investor 2006
• 1 "All-America Equities Research Team" -
  Institutional Investor 2006
• Best MA House in Western Europe Euromoney
  2006
• 3 Global Mergers and Acquisitions -
  BusinessWeek 2006
• "Most Improved Investment Bank of the Decade"
  Financial News 2006
• Best Investment Bank Euromoney 2005
• 2 Most Admired Securities Company Fortune
  2005
• 1 All America Fixed Income Research , Trading,
  and Sales Team Institutional Investor 2005
• 1 All America Fixed Income Trading Team
  Institutional Investor 2005
• 1 All America Fixed Income Sales Team
  Institutional Investor 2005
• Fortune rates the companies in their industry on
  eight attributes
• Innovation
• Employee Talent
• Use of Corporate Assets
• Social Responsibility
• Quality of Management
• Financial Soundness