Lehman Brothers — Presentation (July 2009)
24 slides from Lehman Brothers's investor presentation, Jul 8, 2009
Slide 1: Lehman Brothers Holdings Inc. § 341 Meeting July 8, 2009
Lehman Brothers Holdings Inc. § 341 Meeting July 8, 2009
Slide 2: Basis of presentation and information disclaimer
1 The information and data included in this Report are derived from sources available to Lehman Brothers Holdings Inc. and its other subsidiaries that have filed proceedings under Chapter 11 of the Bankruptcy Code (collectively, the "Debtors"). The Debtors have prepared this presentation based on th
Slide 3: Executive Summary: Current Situation
Current Situation Overall Steady progress on asset management, claims management, financial reporting, and litigation fronts Liquidity Continues to build but permitted investment options are poor Reporting December 31, 2008 Balance Sheets should be available in August 2009 Catch up on financials con
Slide 4: Executive Summary: Current Situation (continued)
Current Situation (continued) Claims Management Bar date of September 22, 2009 Sorting through myriad of guarantees and intercompany claims Litigation Significant activity underway with litigation in progress (Bank of America and Barclays) and litigation being developed for other institutions Prefer
Slide 5: Executive Summary: Personnel FTEs
4 Executive Summary (continued) Personnel FTE's Department Lehman A&M (a) Total Finance / Treasury / Tax 105 30 135 IT / Wind Down 15 32 47 Legal / CMS / Data / Forensic 30 31 61 Management (Admin / HR) 14 7 21 164 100 264 Asset Teams Derivatives 205 8 213 Principal Investments / Private Equity 91 1
Slide 6: Executive Summary: Key A&M Responsibilities
5 Executive Summary (continued) Key A&M Responsibilities Maximize Recovery Value of Assets 5 Asset Teams in place Tasks are defined / plans being executed Mitigate Potential Liability / Reconcile Claims Major pending open issues include Derivative Claims, Unfunded Commitments, Parent Guaranteed Debt
Slide 7: Executive Summary: Asset Reports, Bank Platforms
Asset Reports Bank Platforms No surprises on bank asset management front, asset values are stabilizing FDIC seems to be changing the rules of the game and OTS has been dissolved, no new CD issuance – facing issue of maturity mismatch between liabilities and assets Bank Book Unfunded commitment oblig
Slide 8: Asset Reports: Principal Investments, Real Estate, Derivatives
Asset Reports (continued) Principal Investments / Private Equity Focus on stabilization and / or spin-out of fund management companies for RE Mezzanine, RE Equity, and Euro Mezzanine Real Estate Assets Canyon Ranch (Miami), so far so good, strong market response Shifting from lender to asset manager
Slide 9: Asset Reports: International and Intercompany
Asset Reports (continued) International Lavender portfolio sale in Japan exceeded expectations Preliminary settlement discussions with Bankhaus receiver Intercompany Still have limited understanding of activities at LBI LBI / LBIE provide minimum transparency Working well with KPMG Receiver in Asia
Slide 10: Challenges: LBI and LBIE
Challenges LBI Not clear what they have done on collections, fails or preference items, complete lack of transparency, as the largest creditor we remain in the dark LBIE Could use improved PwC cooperation on various items, very conservative risk adverse administrative approach Executive Summary (con
Slide 11: Current Cash and Short-Term Investment Position – Americas
Current Cash and Short-Term Investment Position – Americas (a) 10 Financial – Cash Position ($ in millions) Filing Segregated / Date Date General Identified Total Filed Balance (c) Funds Funds (d) Funds (e) Debtor Entities (20 Entities) Lehman Brothers Holdings Inc. 9/15/08 1,148.2 $ 2,664.2 $ 274.5
Slide 12: Cash Flow Activities – LBHI (US)
Cash Flow Activities – LBHI (US) (a) 11 Financial – Cash Flow ($ in millions) Filing Date thru 06/30/09 Comments Receipts Asset Sales 1,831.5 $ $1.3B sale to Barclays, $0.3B sale of R3 Capital stake, and $0.2B sale of Eagle Energy Receipts from Subsidiaries 736.7 RE $411.1M, PI / PE $102.8M, XO Jet
Slide 13: Bank Platforms: LBCB / Woodlands Situation
12 Asset Team Reports Bank Platforms LBCB / Woodlands Situation (Utah) Significant Q1 capital improvement achieved via Court approved $200.0 million cash injection and elimination of approximately $3.0 billion of unfunded loan commitments March 31, 2009 Call Report indicated that Total Risk Based Ca
Slide 14: Bank Platforms: Aurora Bank Situation
13 Asset Team Reports (continued) Bank Platforms (continued) Aurora Bank Situation (Delaware Thrift) Aurora Bank recently completed a re-branding effort, submitted a 3-year plan to the OTS, and filed a Q1 quarterly report where Risk-Based Capital (RBC) was reported above 10% (the threshold for “well
Slide 15: Bank Book Commercial Loan Portfolio Summary
14 Asset Team Reports (continued) Bank Book Commercial Loan Portfolio Summary by legal entity (May 31, 2009 (a)) Highlights Unfunded Commitments – eliminated $13.6 billion of Unfunded credit exposure Open Loan Trades – over 81.9% of Open Trades closed, $257.0 million in proceeds realized Credit Revi
Slide 16: Principal Investments / Private Equity Summary
Asset Team Reports (continued) Principal Investments / Private Equity Summary Principal Investments The table below provides a summary of the approximately $9.2 billion portfolio of principal and private equity investments held on Lehman’s balance sheet, broken down by asset class 15 Notes (a) Pre-p
Slide 17: Real Estate Assets Summary
Real Estate Assets Summary Real Estate The table below provides a summary of the approximately $16.0 billion portfolio of real estate managed by Lehman. It excludes approximately $14.8 billion of real estate assets (as of September 12, 2008) controlled by other receivers and $4.8 billion (as of Sept
Slide 18: Derivatives Book: Cash Collections
18 Asset Team Reports (continued) Derivatives Book (continued) Cash Collections Steady progress on cash collections 0 1 2 3 4 5 6 As of 11/07/08 As of 01/02/09 As of 02/13/09 As of 03/27/09 As of 05/15/09 As of 06/30/09 $1.8 $0.7 $3.3 ($ in billions) $4.2 $1.1 $1.5 $0.9 $4.8 $0.6 $5.8 $1.0
Slide 19: Derivatives Book: Basis of Presentation
19 Asset Team Reports (continued) Derivatives Book (continued) Preliminary Portfolio Update: Basis of Presentation MOR Reported Amounts for assets and liabilities on the following slides represent amounts due from or to counterparties related to terminated / matured and open trades and are recorded
Slide 20: Derivatives Book: Preliminary Portfolio Update
20 Asset Team Reports (continued) Derivatives Book (continued) Preliminary Portfolio Update Open population significantly reduced since last meeting (less than 1% of trade legs remain open) ($ in millions) All Entities # of # of Trade Agmts (a) Legs (a) Receivables - $27.1 billion MOR Reported Amoun
Slide 21: Derivatives Book: Preliminary Portfolio Update (continued)
21 Asset Team Reports (continued) Derivatives Book (continued) Preliminary Portfolio Update (continued) ($ in millions) MOR Reported Amount as of September 15, 2008 - Respective Petition Date As of June 17, 2009 June 30, 2009 Balance Sheets # of % # of Trade % Cash Legal Entity Amount (a) Legal Enti
Slide 22: Derivatives Book: Open Trade Strategy
22 Asset Team Reports (continued) Derivatives Book (continued) Open Trade Strategy – Key Priority Active disposition of open contracts via assignment or mutual termination Assignment – slow progress amid challenging market landscape Balance sheet and liquidity constraints in marketplace Much of rema
Slide 23: Derivatives Book: Legal Strategy
23 Asset Team Reports (continued) Derivatives Book (continued) Legal Strategy Continued implementation of assertive legal recovery strategy Key litigation initiated on a) set off issues, b) non-performance on open contracts, and c) SPV purported terminations and related subordination Bar date hearin
Slide 24: IV. Claims Management: Forensic Work Streams
IV. Claims Management hs Forensic Work Streams 1) Reconstruct the actions of the Lehman clearing banks (JP Morgan, Bank of America, Citibank) in the time period leading up to the filing 2) Reconstruct the actions of the Lehman clearing banks, DTC and Federal Reserve during the week after the filing