SHAHEED SUKHDEV COLLEGE OF BUSINESS STUDIES

NEW DELHI

FACULTY SUBMITTED BY: ROLL NO.

SUPERVISOR

STUTI GULATI 8100

NAVYA ANAND 8114
SHRUTI SABERWAL 8128
EKTA SHARMA 8130
AANCHAL SHARMA 8132
 ACKNOWLEDGEMENT

We would like to thank all those who have helped to bring this project to its

present state.

We would like to express our gratitude to Mr. Sanjay K. Goyal, our faculty

coordinator, for his guidance and help in the completion of our project. Without

his help this project could not have taken concrete shape.
 INDEX
1. Introduction to Lehman brother’s bankruptcy

2. History of Lehman Brothers

3. The bankruptcy story

a. The Prime Culprit

b. Lehman's Colossal Miscalculation
c. The Beginning of the End
d. Hurtling Towards Failure
e. Too little too late
4. Subprime mortgage crisis
5. Impact of bankruptcy filing
6. Income statement
7. Analysis of income statement
8. Diagrammatic representation of operations
9. Cash flow statement
10. Position statement
11. Conclusion

1)
 INTRODUCTION TO LEHMAN BROTHERS
BANKRUPTCY

Lehman Brothers Holdings Inc. was a global financial services firm which, until
declaring bankruptcy in 2008, participated in business in investment banking,
equity and fixed-income sales, research and trading, investment management,
private equity, and private banking.

It was a primary dealer in the U.S. Treasury securities market. Its primary
subsidiaries included Lehman Brothers Inc., Neuberger Berman Inc., Aurora
Loan Services, Inc., SIB Mortgage Corporation, Lehman Brothers Bank, FSB,
Eagle Energy Partners, and the Crossroads Group. The firm's worldwide
headquarters were in New York City, with regional headquarters in London and
Tokyo, as well as offices located throughout the world.

On September 15, 2008, the firm filed for Chapter 11 bankruptcy protection
following the massive exodus of most of its clients, drastic losses in its stock, and
devaluation of its assets by credit rating agencies. The following day, the British
bank Barclays announced its agreement to purchase, subject to regulatory
approval, Lehman's North American investment-banking and trading divisions
along with its New York headquarters building.

The filing marked the largest bankruptcy in U.S. history as its assets far
surpassed those of previous bankrupt giants such as WorldCom and Enron.

Lehman was the fourth-largest U.S. investment bank at the time of its collapse,
with 25,000 employees worldwide. Lehman's demise also made it the largest
victim, of the U.S. subprime mortgage-induced financial crisis that swept through
global financial markets in 2008. Lehman's collapse was a seminal event that
greatly intensified the 2008 crisis and contributed to the erosion of close to $10
trillion in market capitalization from global equity markets in October 2008, the
biggest monthly decline on record at the time.

Lehman's collapse roiled global financial markets for weeks, given the size of the
company and its status as a major player in the U.S. and internationally. Many
questioned the U.S. government's decision to let Lehman fail, as compared to its
tacit support for Bear Stearns (which was acquired by JPMorgan Chase) in
March 2008. Lehman's bankruptcy led to more than $46 billion of its market value
being wiped out. Its collapse also served as the catalyst for the purchase of
Merrill Lynch by Bank of America in an emergency deal that was also announced
on September 15.
 HISTORY OF THE LEHMAN BROTHERS

Lehman Brothers had humble origins, tracing its roots back to a small general
store that was founded by German immigrant Henry Lehman in Montgomery,
Alabama, in 1844. In 1850, Henry Lehman and his brothers, Emanuel and
Mayer, founded Lehman Brothers.

While the firm prospered over the following decades as the U.S. economy grew
into an international powerhouse, Lehman had to contend with plenty of
challenges over the years. Lehman survived them all – the railroad bankruptcies
of the 1800s, the Great Depression of the 1930s, two world wars, a capital
shortage when it was spun off by American Express in 1994, and the Long Term
Capital Management collapse and Russian debt default of 1998.

Global Credit Crisis – A Timeline

 9/14: Lehman Brothers files for bankruptcy; Merrill Lynch is taken over by
Bank of America
 9/20: Barclays buys Lehman’s U.S. broker-dealer operation; Bush
administration presents $700 billion bailout bill to Congress
 9/22: Nomura Holdings buys Lehman Asia; later it buys Lehman Europe
 10/3: House of Representatives approves a revised bailout bill two days
after the Senate approves it;Wells Fargo agrees to buy Wachovia for $16B
 10/6: Dow Jones sinks below 10,000 for the first time in four years fearing
a global recession
 10/8: Britain to inject 50 billion pounds into top banks following dramatic
falls in the share prices of HBOS and Royal Bank of Scotland; Central
banks around the world cut interest rates
 10/10: Stocks fall 10% in Tokyo and 9% in London; Dow is 1.5% down
after a day of record volatility
 10/13: European governments pledge $1.3 trillion to banks sending stocks
soaring once again
 10/14: U.S. Treasury to inject $250 billion into banks in exchange for
preferred shares; nine banks agree
 THE BANKRUPTCY STORY

The Prime Culprit

In 2003 and 2004, with the U.S. housing boom well under way, Lehman acquired
five mortgage lenders, including subprime lender BNC Mortgage and Aurora
Loan Services, which specialized in Alt-A loans (made to borrowers without full
documentation). Lehman's acquisitions at first seemed prescient; record
revenues from Lehman's real estate businesses enabled revenues in the capital
markets unit to surge 56% from 2004 to 2006, a faster rate of growth than other
businesses in investment banking or asset management. The firm securitized
$146 billion of mortgages in 2006, a 10% increase from 2005. Lehman reported
record profits every year from 2005 to 2007. In 2007, the firm reported net
income of a record $4.2 billion on revenue of $19.3 billion

Lehman's Colossal Miscalculation

In February 2007, the stock reached a record $86.18, giving Lehman a market
capitalization of close to $60 billion. However, by the first quarter of 2007, cracks
in the U.S. housing market were already becoming apparent as defaults on
subprime mortgages rose to a seven-year high. On March 14, 2007, a day after
the stock had its biggest one-day drop in five years on concerns that rising
defaults would affect Lehman's profitability; the firm reported record revenues
and profit for its fiscal first quarter. In the post-earnings conference call,
Lehman's chief financial officer (CFO) said that the risks posed by rising home
delinquencies were well contained and would have little impact on the firm's
earnings. He also said that he did not foresee problems in the subprime market
spreading to the rest of the housing market or hurting the U.S. economy.

The Beginning of the End

As the credit crisis erupted in August 2007 with the failure of two Bear Stearns
hedge funds, Lehman's stock fell sharply. During that month, the company
eliminated 2,500 mortgage-related jobs and shut down its BNC unit. In addition, it
also closed offices of Alt-A lender Aurora in three states. Even as the correction
in the U.S. housing market gained momentum, Lehman continued to be a major
player in the mortgage market. In 2007, Lehman underwrote more mortgage-
backed securities than any other firm, accumulating an $85-billion portfolio, or
four times its shareholders' equity. In the fourth quarter of 2007, Lehman's stock
rebounded, as global equity markets reached new highs and prices for fixed-
income assets staged a temporary rebound. However, the firm did not take the
opportunity to trim its massive mortgage portfolio, which in retrospect, would turn
out to be its last chance. 

Hurtling Towards Failure

Lehman's high degree of leverage - the ratio of total assets to shareholders
equity - was 31 in 2007, and its huge portfolio of mortgage securities made it
increasingly vulnerable to deteriorating market conditions. On March 17, 2008,
following the near-collapse of Bear Stearns - the second-largest underwriter of
mortgage-backed securities - Lehman shares fell as much as 48% on concern it
would be the next Wall Street firm to fail. Confidence in the company returned to
some extent in April, after it raised $4 billion through an issue of preferred stock
that was convertible into Lehman shares at a 32% premium to its price at the
time. However, the stock resumed its decline as hedge fund managers began
questioning the valuation of Lehman's mortgage portfolio.  

On June 9, Lehman announced a second-quarter loss of $2.8 billion, its first loss
since being spun off by American Express, and reported that it had raised
another $6 billion from investors. The firm also said that it had boosted its
liquidity pool to an estimated $45 billion, decreased gross assets by $147 billion,
reduced its exposure to residential and commercial mortgages by 20%, and cut
down leverage from a factor of 32 to about 25.

Too Little, Too Late

However, these measures were perceived as being too little, too late. Over the
summer, Lehman's management made unsuccessful overtures to a number of
potential partners. The stock plunged 77% in the first week of September 2008,
amid plummeting equity markets worldwide, as investors questioned CEO
Richard Fuld's plan to keep the firm independent by selling part of its asset
management unit and spinning off commercial real estate assets. Hopes that the
Korea Development Bank would take a stake in Lehman were dashed on
September 9, as the state-owned South Korean bank put talks on hold.  

The news was a deathblow to Lehman, leading to a 45% plunge in the stock and
a 66% spike in credit-default swaps on the company's debt. The company's
hedge fund clients began pulling out, while its short-term creditors cut credit
lines. On September 10, Lehman pre-announced dismal fiscal third-quarter
results that underscored the fragility of its financial position. The firm reported a
loss of $3.9 billion, including a write-down of $5.6 billion, and also announced a
sweeping strategic restructuring of its businesses. The same day, Moody's
Investor Service announced that it was reviewing Lehman's credit ratings, and
also said that Lehman would have to sell a majority stake to a strategic partner in
order to avoid a rating downgrade. These developments led to a 42% plunge in
the stock on September 11.

With only $1 billion left in cash by the end of that week, Lehman was quickly
running out of time. Last-ditch efforts over the weekend of September 13
between Lehman, Barclays PLC and Bank of America, aimed at facilitating a
takeover of Lehman, were unsuccessful. On Monday September 15, Lehman
declared bankruptcy, resulting in the stock plunging 93% from its previous close
on September 12.
Subprime mortgage crisis

In August 2007, the firm closed its subprime lender, BNC Mortgage, eliminating
1,200 positions in 23 locations, and took an after-tax charge of $25 million and a
$27 million reduction in goodwill. Lehman said that poor market conditions in the
mortgage space "necessitated a substantial reduction in its resources and
capacity in the subprime space".

In 2008, Lehman faced an unprecedented loss to the continuing subprime

mortgage crisis. Lehman's loss was a result of having held on to large positions
in subprime and other lower-rated mortgage tranches when securitizing the
underlying mortgages; whether Lehman did this because it was simply unable to
sell the lower-rated bonds, or made a conscious decision to hold them, is
unclear. In any event, huge losses accrued in lower-rated mortgage-backed
securities throughout 2008. In the second fiscal quarter, Lehman reported losses
of $2.8 billion and was forced to sell off $6 billion in assets. In the first half of
2008 alone, Lehman stock lost 73% of its value as the credit market continued to
tighten. In August 2008, Lehman reported that it intended to release 6% of its
work force, 1,500 people, just ahead of its third-quarter-reporting deadline in
September.

On August 22, 2008, shares in Lehman closed up 5% (16% for the week) on
reports that the state-controlled Korea Development Bank was considering
buying the bank. Most of those gains were quickly eroded as news came in that
Korea Development Bank was "facing difficulties pleasing regulators and
attracting partners for the deal." It culminated on September 9, when Lehman's
shares plunged 45% to $7.79, after it was reported that the state-run South
Korean firm had put talks on hold.
On September 17, 2008 Swiss Re estimates its overall net exposure to Lehman
Brothers as approximately CHF 50 million.

Investor confidence continued to erode as Lehman's stock lost roughly half its
value and pushed the S&P 500 down 3.4% on September 9. The Dow Jones lost
300 points the same day on investors' concerns about the security of the bank.
The U.S. government did not announce any plans to assist with any possible
financial crisis that emerged at Lehman.

The next day, Lehman announced a loss of $3.9 billion and their intent to sell off
a majority stake in their investment-management business, which includes
Neuberger Berman. The stock slid seven percent that day. Lehman, after earlier
rejecting questions on the sale of the company, was reportedly searching for a
buyer as its stock price dropped another 40 percent on September 11, 2008.

Just before the collapse of Lehman Brothers, executives at Neuberger Berman

sent e-mail memos suggesting, among other things, that the Lehman Brothers'
top people forgo multi-million dollar bonuses to "send a strong message to both
employees and investors that management is not shirking accountability for
recent performance."

Lehman Brothers Investment Management Director George Herbert Walker IV

dismissed the proposal, going so far as to actually apologize to other members of
the Lehman Brothers executive committee for the idea of bonus reduction having
been suggested. He wrote, "Sorry team. I am not sure what's in the water at
Neuberger Berman. I'm embarrassed and I apologize."
 IMPACT OF BANKRUPTCY FILING
The Dow Jones closed down just over 500 points (−4.4%) on September 15,
2008, at the time the largest drop by points in a single day since the days
following the attacks on September 11, 2001. (This drop was subsequently
exceeded by an even larger −7.0% plunge on September 29, 2008.)

Lehman's bankruptcy is expected to cause some depreciation in the price of

commercial real estate. The prospect for Lehman's $4.3 billion in mortgage
securities getting liquidated sparked a selloff in the commercial mortgage-backed
securities (CMBS) market. Additional pressure to sell securities in commercial
real estate is feared as Lehman gets closer to liquidating its assets. Apartment-
building investors are also expected to feel pressure to sell as Lehman unloads
its debt and equity pieces of the $22 billion purchase of Archstone, the third-
largest United States Real Estate Investment Trust (REIT). Archstone's core
business is the ownership and management of residential apartment buildings in
major metropolitan areas of the United States. Jeffrey Spector, a real-estate
analyst at UBS said that in markets with apartment buildings that compete with
Archstone, "there is no question that if you need to sell assets, you will try to get
ahead" of the Lehman selloff, adding "Every day that goes by there will be more
pressure on pricing."

Several money funds and institutional cash funds had significant exposure to
Lehman with the institutional cash fund run by The Bank of New York Mellon and
the Primary Reserve Fund, a money-market fund, both falling below $1 per
share, called "breaking the buck", following losses on their holdings of Lehman
assets. In a statement The Bank of New York Mellon said its fund had isolated
the Lehman assets in a separate structure. It said the assets accounted for
1.13% of its fund. The drop in the Primary Reserve Fund was the first time since
1994 that a money-market fund had dropped below the $1-per-share level.

Putnam Investments, a unit of Canada's Great-West Lifeco, shut a $12.3 billion

money-market fund as it faced "significant redemption pressure" on September
17, 2008. Evergreen Investments said its parent Wachovia Corporation would
"support" three Evergreen money-market funds to prevent their shares from
falling. This move to cover $494 million of Lehman assets in the funds also raised
fears about Wachovia's ability to raise capital.

About 100 hedge funds used Lehman as their prime broker and relied largely on
the firm for financing. As administrators took charge of the London business and
the U.S. holding company filed for bankruptcy, positions held by those hedge
funds at Lehman were frozen. As a result the hedge funds are being forced to
de-lever and sit on large cash balances inhibiting chances at further growth.
In Japan, banks and insurers announced a combined 249 billion yen ($2.4 billion)
in potential losses tied to the collapse of Lehman. Mizuho Trust & Banking Co.
cut its profit forecast by more than half, citing 11.8 billion yen in losses on bonds
and loans linked to Lehman. The Bank of Japan Governor Masaaki Shirakawa
said "Most lending to Lehman Brothers was made by major Japanese banks, and
their possible losses seem to be within the levels that can be covered by their
profits," adding "There is no concern that the latest events will threaten the
stability of Japan's financial system."[31] During bankruptcy proceedings a lawyer
from The Royal Bank of Scotland Group said the company is facing between
$1.5 billion and $1.8 billion in claims against Lehman partially based on an
unsecured guarantee from Lehman and connected to trading losses with Lehman
subsidiaries, Martin Bienenstock.

Lehman was a counterparty to mortgage financier Freddie Mac in unsecured

lending transactions that matured on September 15, 2008. Freddie said it had not
received principal payments of $1.2 billion plus accrued interest. Freddie said it
had further potential exposure to Lehman of about $400 million related to the
servicing of single-family home loans, including repurchasing obligations. Freddie
also said it "does not know whether and to what extent it will sustain a loss
relating to the transactions" and warned that "actual losses could materially
exceed current estimates." Freddie was still in the process of evaluating its
exposure to Lehman and its affiliates under other business relationships.

After Constellation Energy was reported to have exposure to Lehman, its stock
went down 56% in the first day of trading having started at $67.87. The massive
drop in stocks led to the New York Stock Exchange halting trade of Constellation.
The next day, as the stock plummeted as low as $13 per share, Constellation
announced it was hiring Morgan Stanley and UBS to advise it on "strategic
alternatives" suggesting a buyout. While rumors suggested French power
company Électricité de France would buy the company or increase its stake,
Constellation ultimately agreed to a buyout by MidAmerican Energy, part of
Berkshire Hathaway (headed by billionaire Warren Buffett).

The Federal Agricultural Mortgage Corporation or Farmer Mac said it would have
to write off $48 million in Lehman debt it owned as a result of the bankruptcy.
Farmer Mac said it may not be in compliance with its minimum capital
requirements at the end of September.

In Hong Kong more than 43,700 individuals in the city have invested in HK$15.7
billion of "guaranteed mini-bonds" from Lehman. Many claim that banks and
brokers mis-sold them as low-risk. Conversely, bankers note that minibonds are
indeed low-risk instruments since they were backed by Lehman Brothers, which
until just months before its collapse was a venerable member of Wall Street with
high credit and investment ratings. The default of Lehman Brothers was a low
probability event, which was totally unexpected. Indeed, many banks accepted
minibonds as collateral for loans and credit facilities. Another HK$3 billion has
been invested in similar like derivatives. The Hong Kong government proposed a
plan to buy back the investments at their current estimated value, which will allow
investors to partially recover some of their loss by the end of the year. HK Chief
executive Donald Tsang insisted the local banks respond swiftly to the
government buy-back proposal as the Monetary Authority received more than
16,000 complaints. On October 17 He Guangbe, chairman of the Hong Kong
Association of Banks, agreed to buy back the bonds, which will be priced using
an agreed upon methodology based on its estimated current value. This episode
has deep repercussions on the banking industry, where misguided investor
sentiments have become hostile to both wealth management products as well as
the banking industry as a whole. Under intense pressure from the public, all
political parties have come out in support of the investors, further fanning distrust
towards the banking industry.

Politically the bankruptcy proved of influence on the 2008 United States

Presidential Election, for the day after Barack Obama moved ahead of John
McCain in the presidential gallup poll, never again to fall behind.
 INCOME STATEMENT

3 months
3 months
In Millions of USD (except ending 3 months ending 3 months ending 3 months ending
ending
for per share items) 2008-05- 2008-02-29 2007-11-30 2007-08-31
2008-08-31
31
Revenue 1,971.00 5,826.00 11,933.00 14,433.00 14,267.00
Other Revenue, Total 432.00 414.00 437.00 458.00 472.00
Total Revenue 2,403.00 6,240.00 12,370.00 14,891.00 14,739.00
Cost of Revenue, Total 5,306.00 6,908.00 8,863.00 10,500.00 10,431.00
Gross Profit -3,335.00 -1,082.00 3,070.00 3,933.00 3,836.00
Selling/General/Admin.
2,797.00 3,174.00 2,679.00 3,007.00 2,928.00
Expenses, Total
Research & Development 68.00 87.00 89.00 103.00 91.00
Depreciation/Amortization - - - - -
Interest Expense(Income) -
- - - - -
Net Operating
Unusual Expense (Income) - - - - -
Other Operating Expenses,
56.00 158.00 76.00 50.00 84.00
Total
Total Operating Expense 8,227.00 10,327.00 11,707.00 13,660.00 13,534.00
Operating Income -5,824.00 -4,087.00 663.00 1,231.00 1,205.00
Interest Income(Expense),
- - - - -
Net Non-Operating
Gain (Loss) on Sale of
- - - - -
Assets
Other, Net - - - - -
Income Before Tax -5,824.00 -4,087.00 663.00 1,231.00 1,205.00
Income After Tax -3,927.00 -2,774.00 489.00 887.00 887.00
Minority Interest - - - - -
Equity In Affiliates - - - - -
Net Income Before Extra.
-3,927.00 -2,774.00 489.00 887.00 887.00
Items
Accounting Change - - - - -
Discontinued Operations - - - - -
Extraordinary Item - - - - -
Net Income -3,927.00 -2,774.00 489.00 887.00 887.00
 ANALYSIS OF INCOME STATEMENT

1. From the given income statement of Lehman brothers, we can see that
the total revenue has declined from $14,739 in the third quarter of the
financial year 2007 to $2,403 in the third quarter of 2008 i.e. the total
revenue reduced by $12,336.

2. We can also see that the Gross Profit has declined from $3.836 in the
third quarter of the financial year 2007 to (-$3,335) in the third quarter of
2008 i.e. the Gross Profit reduced by $7,171

3. Operating Income has declined from $1,205 in the third quarter of the
financial year 2007 to (-$5,823) in the third quarter of 2008 i.e. the
Operating Income reduced by $7,028.

4. The Net Income has declined from $887 in the third quarter of the
financial year 2007 to (-$3,927) in the third quarter of 2008 i.e. the Net
Income reduced by $8,058.
 DIAGRAMATIC REPRESENTATION OF
OPERATIONS

INTERPRETATION:

1. Operating Income had been negligible in the financial year 2007 and it becomes
negative in 2008 showing that little or no returns are being generated from
operating activities.

2. Operating Margin were maintained at constant level till the 1st quarter of 2008.
Between the 1st quarter and 2nd quarter of 2008, the operating margins reduced
depicting a decline in the operating income. However during the 3rd quarter there
was a steep decline in the operating margin.
INTERPRETATION:

1. Revenues:
In the 3rd and 4th quarters of financial year 2007, revenues of Lehman Brothers
were above $13333 million. However thereafter revenues start declining
substantially.

2. Net Income:
In 2007, Net Income is positive due to higher revenues. However the company
starts incurring losses in the financial year 2008.

3. Profit Margin:
The profit margins remained stable from the 3rd quarter of financial year 2007 to
1st quarter of 2008. In the 2nd quarter of 2008, the profit margins reduced as a
consequence of a decline in the revenues. In the 3rd quarter of 2008, the profit
margins reduced drastically below the defined profit levels.
 CASH FLOW STATEMENT
In Millions of USD 3 months 3 months 3 months 3 months
(except for per share ending ending ending ending
items) 2008-8-30 2008-5-30 2007-11-30 2007-8-30
Net Income/Starting Line 4,192.00 4,007.00 3,260.00 2,369.00
Depreciation/Depletion 577.00 514.00 426.00 428.00
Amortization - - - -
Deferred Taxes 418.00 -60.00 -502.00 -74.00
Non-Cash Items 1,677.00 1,662.00 2,233.00 1,372.00
Changes in Working
-52,459.00 -42,499.00 -17,622.00 -17,665.00
Capital
Cash from Operating
-45,595.00 -36,376.00 -12,205.00 -13,570.00
Activities
Capital Expenditures -966.00 -586.00 -409.00 -401.00
Other Investing Cash Flow
-732.00 -206.00 -38.00 -130.00
Items, Total
Cash from Investing
-1,698.00 -792.00 -447.00 -531.00
Activities
Financing Cash Flow
7,744.00 7,340.00 4,857.00 2,420.00
Items
Total Cash Dividends Paid -418.00 -342.00 -302.00 -258.00
Issuance (Retirement) of
-2,162.00 -2,041.00 -1,999.00 -734.00
Stock, Net
Issuance (Retirement) of
43,428.00 33,298.00 9,556.00 10,191.00
Debt, Net
Cash from Financing
48,592.00 38,255.00 12,112.00 11,619.00
Activities
Foreign Exchange Effects - - - -
Net Change in Cash 1,299.00 1,087.00 -540.00 -2,482.00
Cash Interest Paid,
39,454.00 28,684.00 17,893.00 9,534.00
Supplemental
Cash Taxes Paid,
1,476.00 1,037.00 789.00 638.00
Supplemental

CASH FLOW ANALYSIS:

1. Changes in Working Capital from 2007 to 2008 show that the current liabilities
have increased substantially.
2. Cash used up in Operating Activities has increased approximately three times than
before.
 3. Cash used up in investing activities has also increased approximately 3 times than
before.
POSITION STATEMENT
In Millions of USD As of As of As of As of
(except for per share 2008-05- 2008-02- 2007-11- 2007-08-
items) 31 29 30 31
Cash & Equivalents 19,544.00 24,133.00 20,029.00 17,627.00
Short Term Investments - - - -
Cash and Short Term 19,544.00 24,133.00 20,029.00 17,627.00
Investments
Accounts Receivable - 37,485.00 49,213.00 40,627.00 35,747.00
Trade, Net
Receivables - Other - - - -
Total Receivables, Net 41,721.00 52,399.00 43,277.00 38,391.00
Total Inventory - - - -
Prepaid Expenses - - - -
Other Current Assets, - - - -
Total
Total Current Assets - - - -
Property/Plant/Equipment 6,975.00 6,756.00 6,299.00 5,999.00
, Total - Gross
Accumulated -2,697.00 -2,567.00 -2,438.00 -2,322.00
Depreciation, Total
Goodwill, Net - - 3,137.00 -
Intangibles, Net 4,101.00 4,112.00 990.00 4,108.00
Long Term Investments 563,935.0 695,339.0 614,363.0 589,724.0
0 0 0 0
Other Long Term Assets, - - - -
Total
Total Assets 639,432.0 786,035.0 691,063.0 659,216.0
0 0 0 0
Accounts Payable 61,086.00 84,552.00 64,307.00 51,829.00
Accrued Expenses 9,802.00 11,596.00 16,039.00 17,157.00
Notes Payable/Short 22,655.00 24,752.00 18,024.00 20,937.00
Term Debt
Current Port. of LT 20,991.00 18,510.00 16,801.00 13,997.00
Debt/Capital Leases
Other Current liabilities, - - - -
Total
Total Current Liabilities - - - -
Long Term Debt 128,182.0 128,285.0 123,150.0 120,331.0
0 0 0 0
Capital Lease Obligations - - - -
Total Long Term Debt 128,182.0 128,285.0 123,150.0 120,331.0
 0 0 0 0
Total Debt 171,828.0 171,547.0 157,975.0 155,265.0
0 0 0 0
Deferred Income Tax - - - -
Minority Interest - - - -
Other Liabilities, Total 370,440.0 493,508.0 430,252.0 413,232.0
0 0 0 0
Total Liabilities 613,156.0 761,203.0 668,573.0 637,483.0
0 0 0 0
Redeemable Preferred - - - -
Stock, Total
Preferred Stock - Non 6,993.00 2,993.00 1,095.00 1,095.00
Redeemable, Net
Common Stock, Total 61.00 61.00 61.00 61.00
Additional Paid-In Capital 11,268.00 11,129.00 9,733.00 9,802.00
Retained Earnings 16,901.00 19,880.00 19,698.00 18,915.00
(Accumulated Deficit)
Treasury Stock - -4,922.00 -5,149.00 -5,524.00 -5,658.00
Common
Other Equity, Total -4,025.00 -4,082.00 -2,573.00 -2,482.00
Total Equity 26,276.00 24,832.00 22,490.00 21,733.00
Total Liabilities & 639,432.0 786,035.0 691,063.0 659,216.0
Shareholders' Equity 0 0 0 0
Shares Outs - Common - - - -
Stock Primary Issue
Total Common Shares 552.70 551.38 531.89 529.45
Outstanding
DIAGRAMATIC REPRESENTATION OF ITEMS IN POSITION STATEMENT
 LIST OF 20 LARGEST UNSECURED CLAIMS OF LEHMAN BROTHERS
AS ON 15 SEPTEMBER 2008

Creditor Nature of Claim Amount (in billions)

1. Citibank, N.A. Bond Debt Approx. $ 138

2. The Bank of Bond Debt Approx. $ 12

New York
Mellon Corp.
(as Indenture Trustee)

3. The Bank of Bond debt Approx. $ 5

New York
Mellon Corp.
(as Indenture Trustee)

4. AOZORA Bank Loan $ 463 Million

5. Mizuho Corporate Bank Loan $ 289 Million

 Bank, Ltd.

6. Citibank, N.A. Bank Loan $ 275 Million

Hongkong Branch

7. Bank Paribas Bank Loan $ 250 Million

8. Shinsei Bank Ltd. Bank Loan $ 231 Million

9. UFJ Bank Ltd. Bank Loan $ 185 Million

10. Sumitomo Mitsubishi Bank Loan $ 177 Million

Banking Corp.

11. Svenska Handelsbanken Letter of Credit $ 140.6 Million

12. KBC Bank Letter of Credit $ 100 Million

13. Mizuho Corporate Bank Loan $ 93 Million

Bank Ltd.

14. Shinkin Central Bank Bank Loan $ 93 Million

15. The Bank of Bank Loan $ 93 Million

Nova Scotia
Singapore Branch

16. Chuo Mitsui Bank Loan $ 93 Million

Trust & Banking

17. Lloyds Bank Letter of Credit $ 75.4 Million

18. Hua Nan Bank Loan $ 59 Million

Commercial Bank

19. Bank of China Bank Loan $ 50 Million

New York Branch

20. Nippon Life Bank Loan $ 46 Million

Insurance Co.
 CONCLUSION

1. Lehman Bros, which till June 2008 had not reported a quarterly loss even
once, had earlier survived many an economic crises, like railroad
bankruptcies of the 1800s, the Great Depression in the 1930s, and the
collapse of Long-Term Capital Management in the 1990s.

2. The giant investment bank succumbed to the sub-prime mortgage crisis

that has rocked the United States and the global economy.

3. Lehman was strangled by a massive credit crisis and fast plummeting real
estate prices.

4. The gargantuan $60 billion loss in bad real estate loans forced the bank to
file for bankruptcy.

5. Lehman's collapse was also triggered by the refusal of other banks to do

business with it because of its complex and, at times, opaque ways of
trading .

6. Housing loans made by the bank to people with little support made these
loans very risky, and when interest rates rose, these borrowers could no
more repay Lehman .

7. This led to huge losses, the extent of which is not clear till date.