Lehman Brothers came out Monday and said that it expects to post a $2.8bn second-quarter loss. The firm also said that it will raise $6bn in capital by way of a public offering. Here's an edited version of the press release:

 
NEW YORK, June 9, 2008 - Lehman Brothers Holdings Inc. (ticker symbol: LEH) announced today that continued challenging market conditions will result in an expected net loss of approximately $2.8 billion, or ($5.14) per common share (diluted) for the second quarter ended May 31, 2008, compared to net income of $489 million, or $0.81 per common share (diluted), for the first quarter of fiscal 2008 and $1.3 billion, or $2.21 per common share (diluted), for the second quarter of fiscal 2007.  For the first half of fiscal 2008, the Firm expects to report a net loss of approximately $2.3 billion, or ($4.33) per common share (diluted), compared to net income of $2.4 billion, or $4.17 per common share (diluted), for the first half of fiscal 2007.   
 
The Firm expects to report net revenues (total revenues less interest expense) for the second quarter of fiscal 2008 of negative ($0.7) billion, compared to $3.5 billion for the first quarter of 2008 and $5.5 billion for the second quarter of fiscal 2007.  Net revenues for the second quarter of fiscal 2008 reflect negative mark to market adjustments and principal trading losses, net of gains on certain debt liabilities.  Additionally, the Firm incurred losses on hedges this quarter, as gains from some hedging activity were more than offset by other hedging losses. For the first six months of fiscal 2008, the Firm expects to report net revenues of $2.8 billion, compared to $10.6 billion for the first half of fiscal 2007. 

During the fiscal second quarter, the Firm further strengthened its liquidity and capital position (all below amounts estimated as of May 31, 2008):  
 
• Grew the Holding Company liquidity pool to an estimated $45 billion from $34 billion at the end of the prior quarter
• Decreased gross assets by approximately $130 billion and net assets by approximately $60 billion
• Reduced gross leverage to under 25.0x from 31.7x at the end of the first quarter, and reduced net leverage to under 12.5x from 15.4x
• Reduced exposure to residential mortgages, commercial mortgages and real estate investments by an estimated 15-20% in each asset class  
• Reduced acquisition finance exposures by an estimated 35%  
• Reduced aggregate non-investment grade inventory (including funded acquisition finance assets) by an estimated 20%  
• Completed the budgeted full year fiscal 2008 unsecured funding plan  
• Increased the Firm's long-term capital through the issuance of $4 billion of convertible preferred stock in April and approximately $5.5 billion of public benchmark long-term debt
 
Chairman and Chief Executive Officer Richard S. Fuld, Jr. said, "I am very disappointed in this quarter's results. Notwithstanding the solid underlying performance of our client franchise, we had our first-ever quarterly loss as a public company. However, with our strengthened balance sheet and the improvement in the financial markets since March, we are well-positioned to serve our clients and execute our strategy."

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