Lehman Brothers — Corporate Update (September 2010)
31 slides from Lehman Brothers's corporate update, Sep 22, 2010
Slide 1: Lehman Brothers Holdings Inc. The State of the Estate
Exhibit 99.1 Lehman Brothers Holdings Inc. The State of the Estate September 22, 2010 LEADERSHIP P R O B L E M SO L V I N G VALUE CREATION © Copyright 2010. Alvarez & Marsal Holdings, LLC. All Rights Reserved.
Slide 2: Lehman Brothers Holdings Inc. – The State of the Estate
Lehman Brothers Holdings Inc. – The State of the Estate The information and data included in this report are derived from sources available to Lehman Brothers Holdings Inc. and its subsidiaries that have filed proceedings under chapter 11 of the Bankruptcy Code (collectively, the "Debtors"). The Deb
Slide 3: Contents
Contents I. Executive Summary II. Asset Recovery Update A. Cash Position B. Cash Flow (Filing to Date) C. Highlights by Asset Category 1.) Loans 2.) Derivatives 3.) Private Equity / Principal Investments 4.) Real Estate 5.) Other Assets 6.) Litigation Activities D. Future Recovery Estimates 1.) By A
Slide 4: Contents (continued)
Contents (continued) V. Plan Status Report A. Progress to Date B. Considerations C. Economic Compromise Plan D. Priorities E. Timetable and Objectives 3
Slide 5: I. Executive Summary
I. Executive Summary Overall • Highly complex case that has advanced significantly since the last State of the Estate (11/18/09) • Market liquidity continues to improve resulting in more buyers or refinancing sources • Aggressive recovery management strategy continues to enhance ultimate recovery va
Slide 6: I. Executive Summary (continued)
I. Executive Summary (continued) Asset Recovery Update • Every asset team has revised projected recoveries to higher levels since the last report • Continue to see stabilizing and improving markets that are increasing the value of assets under administration • Employing a reasonable and orderly liqu
Slide 7: I. Executive Summary (continued)
I. Executive Summary (continued) Claims Management • Claims filed against LBHI in the amount of $860 Billion by the final Bar date plus claims filed against the subsidiaries of LBHI in the amount of $302 Billion, resulting in total filed claims of almost $1.2 Trillion plus numerous unliquidated clai
Slide 8: I. Executive Summary (continued)
I. Executive Summary (continued) 7
Slide 9: I. Executive Summary (continued)
I. Executive Summary (continued) Plan Progress • Size, complexity and diverse interests and parties made the original timing target for confirmation of the Plan unachievable • Major efforts expended to educate foreign administrators (80+ proceedings, 11+ Official Representatives, multiple jurisdicti
Slide 10: II. Asset Recovery Update
II. Asset Recovery Update A. Cash Position B. Cash Flow (Filing to Date) C. Highlights by Asset Category D. Future Recovery Estimates 9
Slide 11: A. Cash and Cash Investment Position at 6/30/10
II. Asset Recovery Update A. Cash and Cash Investment Position at 6/30/10 (a) ($ in Millions, foreign currencies reflected in USD equivalents) General Segregated Total Funds Funds (b) Funds Legal Entities LB Holdings Inc. (LBHI) $ 1,605 $ 470 $ 2,075 (c) LB Special Financing Inc. (LBSF) 6,745 610 7,
Slide 12: B. Cash Flow: Filing Date to 6/30/10
II. Asset Recovery Update (continued) B. Cash Flow: Filing Date to 6/30/10 ($ in Millions, foreign currencies reflected in USD equivalents) Sources of Cash Comments Derivatives $ 11,467 Primarily settlements from counterparties Loans 3,929 Primarily principal and interest from corporate borrowers Re
Slide 13: C. Highlights by Asset Category: Loans
II. Asset Recovery Update (continued) C. Highlights by Asset Category 1.) Loans • Market dynamics have improved • Refinancings are happening ahead of schedule • Overall recoveries are being accelerated • 85% of unfunded revolver commitments, or $26 Billion, have been eliminated at minimal cost • Gro
Slide 14: C. Highlights by Asset Category: Derivatives
II. Asset Recovery Update (continued) C. Highlights by Asset Category 2.) Derivatives • Estimate of gross recovery proceeds has been increased by $850 Million from April 2010 Forecast • Expect to collect $15 Billion from derivatives receivables from all operations under LAMCO supervision • Approxima
Slide 15: C. Highlights by Asset Category: Private Equity / Principal Investments
II. Asset Recovery Update (continued) C. Highlights by Asset Category 3.) Private Equity / Principal Investments • $681 Million collected in 1H 2010 and $950 Million in forecasted collections for full year 2010 • Market conditions for disposition of assets are improving and pricing is better • Cash
Slide 16: C. Highlights by Asset Category: Real Estate
II. Asset Recovery Update (continued) C. Highlights by Asset Category 4.) Real Estate • Market conditions continue to improve with better pricing and accelerated recovery versus the April 2010 Forecast • Gross recovery proceeds have increased by $100 Million+ from April 2010 Forecast • Significant u
Slide 17: II. Asset Recovery Update (continued)
II. Asset Recovery Update (continued) 16
Slide 18: II. Asset Recovery Update (continued)
II. Asset Recovery Update (continued) 17
Slide 19: D. Future Recovery Estimates: By Asset Category
II. Asset Recovery Update (continued) D. Future Recovery Estimates 1.) By Asset Category ($ in Billions) Actual Net Cash Recovery Latest Thinking Plan & Other Amount Forecast (Preliminary) 4/14/10 (a) Adjustments (b) Adjustment 6/30/10 (c) Cash $ 15.6 $ 5.5 $ - $ 21.1 Real Estate 12.1 (0.8) 0.1 11.4
Slide 20: D. Future Recovery Estimates: By Legal Entity
II. Asset Recovery Update (continued) D. Future Recovery Estimates 2.) By Legal Entity ($ in Billions) As of June 30, 2010 Estimated Total Future Preliminary Recovery Cash (a) Proceeds Proceeds (b) LBHI $ 6.3 $ 9.9 $ 16.2 LBSF 7.4 3.3 10.7 LCPI 1.1 8.2 9.3 LBCS 1.5 0.3 1.8 LBCC 0.5 0.2 0.7 Other Deb
Slide 21: III. Consolidated Headcount Plan
III. Consolidated Headcount Plan Consolidated Headcount Plan 20
Slide 22: III. Consolidated Headcount Plan
III. Consolidated Headcount Plan % Change 4/01/09 (actual) 4/01/10 (actual) 4/01/11 (projected) 4/01/10 to 4/01/11 Lehman A&M Lehman A&M Lehman A&M Lehman A&M LAMCO (a) 331 85 379 69 339 27 (11)% (60)% Administration (b) 117 48 136 62 136 31 0% (50)% Litigation (c) 21 27 19 18 25 8 32% (56)% Total H
Slide 23: IV. Claims Resolution Update
IV. Claims Resolution Update Claims Resolution Update 22
Slide 24: IV. Claims Resolution Update
IV. Claims Resolution Update ($ in Billions) April 14, 2010 (a) Current ADJUSTED Likely ADJUSTED Likely Claims Outstanding Allowed Outstanding Allowed LBHI: As Filed Claims Claims (b) Claims Claims (b) Direct Claims $210 $183 $102 $112 $112 Intercompany Claims 80 56 43 59 43 Third-Party Guarantee Cl
Slide 25: IV. Claims Resolution Update (continued)
IV. Claims Resolution Update (continued) SUMMARY HIGHLIGHTS • Although not adjudicated, substantial progress has been made in narrowing gross amount of claims from nearly $1.2 Trillion to $464 Billion • Affiliate Guarantee Adjusted Outstanding Claims are projected to decrease by $150 Billion, reflec
Slide 26: V. Plan Status Report
V. Plan Status Report A. Progress to Date B. Considerations C. Economic Compromise Plan D. Priorities E. Timetable and Objectives 25
Slide 27: V. Plan Status Report: A. Progress to Date
V. Plan Status Report A. Progress to Date September 22, 2009 – Bar Date for Filing Proofs of Claim(a)(b) March 15, 2010 – Filed Proposed Joint Chapter 11 Plan as basis for discussion with parties in interest April 14, 2010 – Filed Proposed Disclosure Statement and Proposed Amended Joint Chapter 11 P
Slide 28: V. Plan Status Report: B. Subject Presented for Consideration
V. Plan Status Report (continued) B. Subject Presented By Parties In Interest And Debtors For Consideration (a) Substantive Consolidation (b) Non-Substantive Consolidation (b) • Operated as one company, by business unit, not by • Separate subsidiary financial statements, but mostly legal entity/some
Slide 29: V. Plan Status Report: C. Economic Compromise Plan
V. Plan Status Report (continued) C. Economic Compromise Plan Subsidiary Debtors currently are administered as separate entities for financial reporting and accounting purposes Economic compromise is proposed and embedded in the Plan: • Third-party guarantee claims are limited to estimated third-par
Slide 30: V. Plan Status Report (continued)
V. Plan Status Report (continued) 29
Slide 31: V. Plan Status Report (continued)
V. Plan Status Report (continued) 30
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