file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.

htm

8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

January 14, 2010

LEHMAN BROTHERS HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware 1-9466 13-3216325

(State or other jurisdiction (Commission (IRS Employer
Of incorporation) File Number) Identification No.)

1271 Avenue of the Americas

New York, New York
10020
(Address of Principal Executive Offices)
(Zip Code)

Registrant’s telephone number, including area code:

(646) 285-9000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01 Regulation FD Disclosure.

As previously disclosed, on September 15, 2008, Lehman Brothers Holdings Inc. (the “Registrant”) filed a voluntary petition for relief
under Chapter 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of
New York (the “Court”) in a jointly administered proceeding named In re Lehman Brothers Holdings Inc., et. al. under Case Number
08-13555 (the “Chapter 11 Proceeding”). As further disclosed previously, certain of the Registrant’s subsidiaries (collectively with

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (1 of 9) [1/14/2010 8:10:53 PM]

 file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm

the Registrant, the “Debtors”) have also filed proceedings under Chapter 11 of the Bankruptcy Code. The Debtors’ Chapter 11 cases have
been consolidated for procedural purposes only and are being jointly administered pursuant to Rule 1015(b) of the Federal
Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and the Debtors continue to operate as debtors-in-possession pursuant to
sections 1107(a) and 1108 of the Bankruptcy Code.

On January 14, 2010, the Debtors filed with the Court a Monthly Operating Report (the “Monthly Operating Report”). A copy of the
Monthly Operating Report for the Debtors is attached hereto as Exhibit 99.1. This Current Report (including the Exhibits hereto) will not
be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.

Limitation on Incorporation by Reference

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 shall not be deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that
section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such a filing.

Cautionary Statements Regarding Financial and Operating Data

The Registrant cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly
Operating Report, as it was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities
of any of the Debtors, or any other affiliate of the Registrant. The Monthly Operating Report is not prepared in accordance with U.S.
generally accepted accounting principles, was not audited or reviewed by independent accountants, will not be subject to audit or review by
the Registrant’s external auditors at any time in the future, is in a format consistent with applicable bankruptcy laws, and is subject to
future adjustment and reconciliation. There can be no assurances that, from the perspective of an investor or potential investor in
the Registrant’s securities, the Monthly Operating Report is accurate or complete. The Monthly Operating Report contains a
further description of limitations on the information contained therein. The Monthly Operating Report also contains information for
periods which are shorter or otherwise different from those required in the Registrant’s reports pursuant to the Exchange Act, and
such information might not be indicative of the Registrant’s financial condition or operating results for the period that would be reflected in
the Registrant’s financial statements or in its reports pursuant to the Exchange Act. Results set forth in the Monthly Operating Report
should not be viewed as indicative of future results.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K and Exhibit 99.1 hereto may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to the Registrant’s financial condition, results of operations, and business that
is not historical information. As a general matter, forward-looking statements are those focused upon future or

anticipated events or trends and expectations and beliefs relating to matters that are not historical in nature. The words “believe,”
“expect,” “plan,” “intend,” “estimate,” or “anticipate” and similar expressions, as well as future or conditional verbs such as “will,”
“should,” “would,” and “could,” often identify forward-looking statements. The Registrant believes there is a reasonable basis for
its expectations and beliefs, but they are inherently uncertain, and the Registrant may not realize its expectations and its beliefs may not
prove correct. The Registrant undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of
new information, future events, or otherwise. The Registrant’s actual results and future financial condition may differ materially from
those described or implied by any such forward-looking statements as a result of many factors that may be outside the Registrant’s
control. Such factors include, without limitation: (i) the ability of the Registrant to develop, prosecute, confirm, and consummate any plan
of reorganization or liquidation with respect to the Chapter 11 Proceeding; (ii) the Registrant’s ability to obtain Court approval with respect
to motions in the Chapter 11 Proceeding; (iii) risks associated with third parties seeking and obtaining court approval for the appointment of
a Chapter 11 trustee; and (iv) the potential adverse impact of the Chapter 11 Proceeding on the Registrant’s liquidity or results of
operations. This list is not intended to be exhaustive.

The Registrant’s informational filings with the Court, including this Monthly Operating Report, are available to the public at the office of
the Clerk of the Bankruptcy Court, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004-1408.
Such informational filings may be available electronically, for a fee, through the Court’s Internet world wide web site (www.nysb.
uscourts.gov), and/or free of cost, at a world wide web site maintained by the Registrant’s Court-approved noticing agent (www.
lehman-docket.com).

ITEM 9.01 Financial Statements and Exhibits.

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (2 of 9) [1/14/2010 8:10:53 PM]

 file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm

(a) Exhibits

99.1 Lehman Brothers Holdings Inc. — Monthly Operating Report filed with the Bankruptcy Court on January 14,
2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.

LEHMAN BROTHERS HOLDINGS INC.

Date: January 14, 2010 By: /s/ William J. Fox

Name: William J. Fox
Title: Chief Financial Officer and Executive Vice President

EXHIBIT INDEX

Exhibit No. Description

99.1 Lehman Brothers Holdings Inc. — Monthly Operating Report filed with the Bankruptcy Court on January 14, 2010

EX-99.1

Exhibit 99.1

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

In re: Chapter 11 Case No.

Lehman Brothers Holdings Inc., et al., 08-13555

Debtors.

MONTHLY OPERATING REPORT

DECEMBER 2009

SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

SCHEDULE OF PROFESSIONAL FEE AND EXPENSE DISBURSEMENTS

DEBTORS’ ADDRESS: LEHMAN BROTHERS HOLDINGS INC.

c/o WILLIAM J. FOX
1271 AVENUE OF THE AMERICAS
35th FLOOR

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (3 of 9) [1/14/2010 8:10:53 PM]

 file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm

NEW YORK, NY 10020

DEBTORS’ ATTORNEYS: WEIL, GOTSHAL & MANGES LLP

c/o SHAI WAISMAN
767 FIFTH AVENUE
NEW YORK, NY 10153

REPORT PREPARER: LEHMAN BROTHERS HOLDINGS INC., A DEBTOR IN POSSESSION (IN THE SOUTHERN
DISTRICT OF NEW YORK)

THIS OPERATING STATEMENT MUST BE SIGNED BY A REPRESENTATIVE OF THE DEBTOR

The undersigned, having reviewed the attached report and being familiar with the Debtors’ financial affairs, verifies under penalty of
perjury, that the information contained therein is complete, accurate and truthful to the best of my knowledge.

Lehman Brothers Holdings Inc.

Date: January 14, 2010 By: /s/ William J. Fox

William J. Fox
Executive Vice President

Indicate if this is an amended statement by checking here: AMENDED STATEMENT o

TABLE OF CONTENTS

Schedule of Debtors 3

Lehman Brothers Holdings Inc. (“LBHI”) and Other Debtors and Other Controlled Subsidiaries
Basis of Presentation — Schedule of Cash Receipts and Disbursements 4
Schedule of Cash Receipts and Disbursements 5

LBHI
Basis of Presentation — Schedule of Professional Fee and Expense Disbursements 6
Schedule of Professional Fee and Expense Disbursements 7

LBHI
Quarterly Hedging Transactions Update 8
Schedule of Hedging Transactions as of December 31, 2009 9

SCHEDULE OF DEBTORS

The following entities have filed for bankruptcy in the Southern District of New York:

Case No. Date Filed

Lead Debtor:
Lehman Brothers Holdings Inc. (“LBHI”) 08-13555 9/15/2008

Related Debtors:
LB 745 LLC 08-13600 9/16/2008
PAMI Statler Arms LLC(1) 08-13664 9/23/2008
Lehman Brothers Commodity Services Inc. 08-13885 10/3/2008
Lehman Brothers Special Financing Inc. 08-13888 10/3/2008
Lehman Brothers OTC Derivatives Inc. 08-13893 10/3/2008
Lehman Brothers Derivative Products Inc. 08-13899 10/5/2008

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (4 of 9) [1/14/2010 8:10:53 PM]

 file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm

Lehman Commercial Paper Inc. 08-13900 10/5/2008

Lehman Brothers Commercial Corporation 08-13901 10/5/2008
Lehman Brothers Financial Products Inc. 08-13902 10/5/2008
Lehman Scottish Finance L.P. 08-13904 10/5/2008
CES Aviation LLC 08-13905 10/5/2008
CES Aviation V LLC 08-13906 10/5/2008
CES Aviation IX LLC 08-13907 10/5/2008
East Dover Limited 08-13908 10/5/2008
Luxembourg Residential Properties Loan Finance S.a.r.l 09-10108 1/7/2009
BNC Mortgage LLC 09-10137 1/9/2009
LB Rose Ranch LLC 09-10560 2/9/2009
Structured Asset Securities Corporation 09-10558 2/9/2009
LB 2080 Kalakaua Owners LLC 09-12516 4/23/2009
Merit LLC 09-17331 12/14/2009
LB Somerset LLC 09-17503 12/22/2009
LB Preferred Somerset LLC 09-17505 12/22/2009

(1) On May 26, 2009, a motion was filed on behalf of Lehman Brothers Holdings Inc. seeking entry of an order pursuant to Section 1112
(b) of the Bankruptcy Code to dismiss the Chapter 11 Case of PAMI Statler Arms LLC, with a hearing to be held on June 24, 2009.
On June 19, 2009, the motion was adjourned without a date for a continuation hearing.

The Chapter 11 case of Fundo de Investimento Multimercado Credito Privado Navigator Investimento No Exterior (Case No: 08-13903)
has been dismissed.

The Chapter 11 case of Lehman Brothers Finance SA (Case No: 08-13887) has been dismissed.

LEHMAN BROTHERS HOLDINGS INC., (“LBHI”), AND OTHER DEBTORS AND OTHER CONTROLLED ENTITIES

BASIS OF PRESENTATION
SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
DECEMBER 1, 2009 TO DECEMBER 31, 2009

The information and data included in this Report are derived from sources available to Lehman Brothers Holdings Inc. (“LBHI”) and
its Controlled Entities (collectively, the “Company”). The term “Controlled Entities” refers to those entities that are directly or
indirectly controlled by LBHI, and excludes, among other things, those entities that are under separate administrations in the United States
or abroad, including Lehman Brothers Inc., which is the subject of proceedings under the Securities Investor Protection Act. LBHI and
certain of its Controlled Entities have filed for protection under Chapter 11 of the Bankruptcy Code, and those entities are referred to herein
as the “Debtors”. The Debtors’ Chapter 11 cases have been consolidated for procedural purposes only and are being jointly
administered pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure. The Debtors have prepared this presentation, as
required by the Office of the United States Trustee, based on the information available to the Debtors at this time, but note that
such information may be incomplete and may be materially deficient in certain respects. This Monthly Operating Report, (“MOR”), is
not meant to be relied upon as a complete description of the Debtors, their business, condition (financial or otherwise), results of
operations, prospects, assets or liabilities. The Debtors reserve all rights to revise this report.

1. This MOR is not prepared in accordance with U.S. generally accepted accounting principles (GAAP). This MOR should be read in
conjunction with the financial statements and accompanying notes in the Company’s annual and quarterly reports that were filed with the
United States Securities and Exchange Commission.

2. This MOR is not audited and will not be subject to audit or review by the Company’s external auditors at any time in the future.

3. The beginning and ending balances include cash in demand-deposit accounts (DDA), money-market funds (MMF), treasury bills, and
other investments.

4. The ending cash balances are based on preliminary closing numbers and are subject to adjustment.

5. Beginning and ending cash balances exclude cash that has been posted as collateral for derivatives hedging activity.

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (5 of 9) [1/14/2010 8:10:53 PM]

 file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm

6. Beginning and ending cash balances exclude cash related to LBHI’s wholly-owned indirect subsidiaries Aurora Bank FSB (formerly
known as Lehman Brothers Bank FSB), Woodlands Commercial Bank (formerly known as Lehman Brothers Commercial Bank), Lehman
Brothers Trust Company N.A., and Lehman Brothers Trust Company of Delaware.

7. Intercompany transfers between Lehman entities are listed as disbursements for the paying entity and receipts for the receiving entity.

8. The following entities have filed for protection under Chapter 11 of the Bankruptcy Code during the month of December and are
included in the report herein:

a. Merit LLC – filed December 14, 2009.

b. LB Somerset LLC – filed December 22, 2009.

c. LB Preferred Somerset LLC – filed December 22, 2009.

LEHMAN BROTHERS HOLDINGS INC. and Other Debtors and Other Controlled Entities
Schedule of Cash Receipts and Disbursements
December 1, 2009 - December 31, 2009
Unaudited ($ in millions)
Beginning Cash & Ending Cash &
Filing Investments FX Investments
Legal Entity Date (12/1/09) (a) Receipts Transfers (b) Disbursements (c) Fluctuation (d) (12/31/09) (e)
Lehman Brothers Holdings Inc. 9/15/2008 $ 2,474 $ 1,435(f) $ 5 (939)(g) $ (10)$ 2,964
LB 745 LLC 9/16/2008 — — — — — —
PAMI Statler Arms LLC 9/23/2008 — — — — — —
Lehman Brothers Special Financing Inc.
(“LBSF”) 10/3/2008 5,118 571 — (278)(h) (10) 5,401
Lehman Brothers Commodity Services Inc.
(“LBCS”) 10/3/2008 1,176 44 — (21) (1) 1,198
Lehman Brothers OTC Derivatives Inc
(“LOTC”) 10/3/2008 167 1 — — — 167
Lehman Commercial Paper Inc. (“LCPI”) 10/5/2008 3,546 897(i) — (812)(i) (3) 3,628
Lehman Brothers Commercial Corporation
(“LBCC”) 10/5/2008 472 15 — — — 488
Lehman Brothers Derivative Products Inc.
(“LBDP”) 10/5/2008 387 — — — — 387
Lehman Brothers Financial Products Inc
(“LBFP”) 10/5/2008 426 1 — (2) — 425
CES Aviation LLC 10/5/2008 — — — — — —
CES Aviation V LLC 10/5/2008 — — — — — —
CES Aviation IX LLC 10/5/2008 — — — — — —
East Dover Limited 10/5/2008 — — — — — —
Lehman Scottish Finance L.P. 10/5/2008 2 — — — — 2
Luxembourg Residential Properties Loan
Finance 1/7/2009 — — — — — —
BNC Mortgage LLC 1/9/2009 — — — — — —
LB Rose Ranch LLC 2/9/2009 1 — — — — 1
Structured Asset Securities Corporation
(“SASCO”) 2/9/2009 — — — — — —
LB 2080 Kalakaua Owners LLC 4/23/2009 — — — — — —
Merit LLC 12/14/2009 — — — — — —
LB Somerset LLC 12/22/2009 — — — — — —
LB Preferred Somerset LLC 12/22/2009 — — — — — —
Debtor Cash and Investment Flows -
Domestically Managed (j) 13,769 $ 2,963 $ 5$ (2,051) $ (24) 14,661
Non-Debtor Cash and Investment Balances -
Domestically Managed (j) 1,987 1,920
Debtor and Non-Debtor Cash and Investment
Balances - Foreign Managed (k) 576 573
Total Cash and Investment Balances $ 16,332 $ 17,154

Notes:
(a) Beginning Cash & Investments balance has been restated from November 30, 2009 closing balance by ($2 million) for LBSF.
(b) Reflects transfers from bank accounts managed in other regions to the US.

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (6 of 9) [1/14/2010 8:10:53 PM]

 file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm

(c) $264 million was disbursed from subsidiaries of LBHI to reimburse LBHI for estimated operating expenses and professional fees which had been paid by LBHI from
June 2009 to November 2009, and are subject to adjustment and true-up (LBSF $180 million, LCPI $41 million, LBCS 21 million, LBFP $1 million, and Non-Debtors $21
million).
(d) Reflects fluctuation in value in foreign currency bank accounts.
(e) Ending Cash and Investments balances include approximately $2.6 billion of cash associated with pledged assets, court order segregated accounts, funds administratively held
by banks, and other identified funds which may not belong to the Debtor or non-Debtor subsidiaries. These amounts are preliminarily estimated as follows: Debtors - LBHI
$215 million, LBSF $310 million, LBCS $33 million, LCPI $1.9 billion, LBCC $8 million, Lehman Scottish Finance $2 million; Non-Debtors $100 million; and International
$98 million, and are subject to adjustment. Ending cash balances also exlcude approximately $414 million in cash posted as collateral for derivatives hedging activity; broken
down as follows: LBSF $390 million, LBFP $15 million, and LBCS $10 million. Cash pledged on or prior to September 15, 2008 by the Company in connection with certain
documents executed by the Company and various financial institutions has been excluded from this report.
(f) Includes $837 million in receipts from Aurora Bank associated with repayment of court approved repo financing transactions. On 12/31/09, there was $0 outstanding on the
repo with Aurora Bank. Also includes $264 million in receipts from subsidiaries for estimated operating expenses and professional fees which had been paid by LBHI, and are
subject to adjustment and true-up.
(g) Reflects ordinary course outflows and other court approved disbursements, including court approved disbursements to Aurora Bank for repo financing transactions of $606
million.
(h) Reflects $180 million transferred to LBHI for cost allocation, $71 million returned to a counterparty for a wire transfer sent in error in April 2009, $21 million posted as
collateral for court approved hedging activity, and $6 million disbursements related to live trades.
(i) LCPI, in its capacity as loan agreement agent, receives and passes along principal and interest to loan syndicate participants.
(j) Represents bank accounts managed and reconciled by Lehman US operations, which may include cash associated with foreign entities. Foreign currency cash flows are
reflected in USD equivalents.
(k) Represents bank accounts managed and reconciled by Lehman foreign operations. Ending balance of $573 million includes Asia balance of $464 million, South America
balance of $26 million and Europe balance of $83 million.

LEHMAN BROTHERS HOLDINGS INC. (“LBHI”)

BASIS OF PRESENTATION
SCHEDULE OF PROFESSIONAL FEE AND EXPENSE DISBURSEMENTS
DATED FROM FILING DATE TO DECEMBER 31, 2009

The information and data included in this Report are derived from sources available to Lehman Brothers Holdings Inc. (“LBHI”) and
its Controlled Entities (collectively, the “Company”). The term “Controlled Entities” refers to those entities that are directly or
indirectly controlled by LBHI, and excludes, among other things, those entities that are under separate administrations in the United States
or abroad, including Lehman Brothers Inc., which is the subject of proceedings under the Securities Investor Protection Act. LBHI and
certain of its Controlled Entities have filed for protection under Chapter 11 of the Bankruptcy Code, and those entities are referred to herein
as the “Debtors”. The Debtors’ Chapter 11 cases have been consolidated for procedural purposes only and are being jointly
administered pursuant to Rule 101(b) of the Federal Rules of Bankruptcy Procedure. The Debtors have prepared this presentation, as
required by the Office of the United States Trustee, based on information from the Debtors internal systems, but note that such
information may be incomplete in certain respects and the Debtors reserve all rights to revise this report. This MOR is not meant to be
relied upon as a complete description of the Debtors, their business, condition (financial or otherwise), results of operations, prospects,
assets or liabilities.

1. This MOR is not prepared in accordance with U.S. generally accepted accounting principles (GAAP). This MOR should be read in
conjunction with the financial statements and accompanying notes in the Company’s annual and quarterly reports that were filed with the
United States Securities and Exchange Commission.

2. This MOR is not audited and will not be subject to audit or review by the Company’s external auditors at any time in the future.

3. The professional fee disbursements presented in this report reflect the date of actual cash payments to professional service providers.
The Debtors have incurred additional professional fee expenses during the reporting period that will be reflected in future MORs as cash
payments are made to providers.

LEHMAN BROTHERS HOLDINGS INC.

Schedule of Professional Fee and Expense Disbursements (a)
December 2009
Unaudited ($ in thousands)
Filing Date
Dec-09 Through Dec-09 (b)
Debtors - Section 363 Professionals

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (7 of 9) [1/14/2010 8:10:53 PM]

 file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm

Alvarez & Marsal LLC Interim Management $ 15,877 $ 218,297

Kelly Matthew Wright Art Consultant and Auctioneer — 47
Natixis Capital Markets Inc. Derivatives Consultant 1,428 8,121
Debtors - Section 327 Professionals
Bingham McCutchen LLP Special Counsel - Tax 590 8,516
Bortstein Legal LLC Special Counsel - IT and Other Vendor Contracts 267 2,548
Curtis, Mallet-Prevost, Colt & Mosle LLP Special Counsel - Conflicts 1,250 13,032
Discover Ready LLC eDiscovery Services — 4,812
Ernst & Young LLP Audit and Tax Services 71 1,367
Hudson Global Resources Contract Attorneys — 1,928
Huron Consulting Tax Services 155 1,973
Jones Day Special Counsel - Asia and Domestic Litigation 1,952 14,292
Lazard Freres & Co. Investment Banking Advisor 3,219 17,118
McKenna Long & Aldridge LLP Special Counsel - Commercial Real Estate Lending 907 3,227
Pachulski Stang Ziehl & Jones Special Counsel - Real Estate 124 661
Reilly Pozner LLP Special Counsel - Mortgage Litigation and Claims 211 1,763
Special Counsel - SEC Reporting, Asset Sales, and
Simpson Thacher & Bartlett LLP Congressional Testimony 25 2,117
Weil Gotshal & Manges LLP Lead Counsel — 127,143
Windels Marx Lane & Mittendorf, LLP Special Counsel - Real Estate 153 750
Debtors - Claims and Noticing Agent
Epiq Bankruptcy Solutions LLC Claims Management and Noticing Agent 3,741 6,514
Creditors - Section 327 Professionals
FTI Consulting Inc. Financial Advisor 4,355 20,625
Houlihan Lokey Howard & Zukin Capital Inc. Investment Banking Advisor 487 5,683
Milbank Tweed Hadley & McCloy LLP Lead Counsel 5,933 42,360
Quinn Emanuel Urquhart Oliver & Hedges LLP Special Counsel - Conflicts 614 4,894
Richard Sheldon, Q.C. Special Counsel - UK — 74
Examiner - Section 327 Professionals
Duff & Phelps LLC Financial Advisor 5,016 26,411
Jenner & Block LLP Examiner 6,074 33,961
Fee Examiner
Feinberg Rozen LLP Fee Examiner 75 418
Brown Greer Plc Fee and Expense Analyst 87 87
Total Non-Ordinary Course Professionals 52,612 568,741
Debtors - Ordinary Course Professionals 2,280 19,134
US Trustee Quarterly Fees — 483
Total Professional Fees and UST Fees $ 54,892 $ 588,358

(a) All professional fees have been paid by LBHI; however, a portion has been charged back to debtor and non-debtor subsidiaries based on
the direct costs associated with each entity and an allocation methodology.
(b) The figures reflected in this table represent cash disbursements from LBHI’s filing date through the end of December 2009 and do not
include holdback amounts required by court order for Non-Ordinary Course Professionals. The figures do not include accruals.

LEHMAN BROTHERS HOLDINGS INC. (“LBHI”)

QUARTERLY HEDGING TRANSACTIONS UPDATE

AS OF DECEMBER 31, 2009

The information and data included in this report are derived from sources available to Lehman Brothers Holdings Inc. (“LBHI”) and

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (8 of 9) [1/14/2010 8:10:53 PM]

 file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm

its Controlled Entities (collectively, the “Company”). The term “Controlled Entities” refers to those entities that are directly or
indirectly controlled by LBHI, and excludes, among other things, those entities that are under separate administrations in the United States
or abroad, including Lehman Brothers Inc., which is the subject of proceedings under the Securities Investor Protection Act. LBHI and
certain of its Controlled Entities have filed for protection under Chapter 11 of the Bankruptcy Code, and those entities are referred to herein
as the “Debtors”. The Debtors’ Chapter 11 cases have been consolidated for procedural purposes only and are being jointly
administered pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure.

On March 11, 2009, the United States Court for the Southern District of New York overseeing the Debtors’ chapter 11 cases (the
“Court”) entered an “Order Pursuant to Sections 105 and 364 of the Bankruptcy Code Authorizing the Debtors to Grant First Priority Liens
in Cash Collateral Posted in Connection With the Hedging Transactions the Debtors Enter Into Through Certain Futures and Prime
Brokerage Account” [Docket No. 3047] (the “Derivatives Order”).

On July 16, 2009, the Court entered a separate “Order Pursuant to Sections 105 and 364 of the Bankruptcy Code Authorizing the Debtors
to Grant First Priority Liens in Collateral Posted in Connection With the Hedging Transactions” [Docket No. 4423] (the “Residential
Loan Order”).

Terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Derivatives Order or the Residential Loan
Order, as the case may be.

The Debtors have prepared this Quarterly Hedging Transactions Update, as required by the Derivatives Order, based on the
information available to the Debtors at this time, but note that such presentation is partially based on market pricing which is subject to day-
to-day fluctuations. The Debtors reserve all rights to revise this report.

Derivatives Order. Between the entry of the Derivatives Order and December 31, 2009 (the “Report Date”), the Debtors have proposed
12 Hedging Transactions to the Hedging Transactions Committee. As of the Report Date, the Debtors had executed all 12
Hedging Transactions and posted an aggregate $414 million in cash collateral pursuant thereto. The Open Derivative Positions correspond
to 100 un-terminated derivative contracts with an estimated recovery value as of the Report Date equal to $812 million. The
expected recovery amounts are determined using various models, data sources, and certain assumptions regarding contract provisions.
The Company expects to adjust the amounts recorded for the Open Derivative Positions in the future; such adjustments (including write-
downs and write-offs) may be material. For further description regarding derivative recovery values, please refer to the
November 2009 Monthly Operating Report filed on December 14, 2009.

As of the Report Date, the Hedging Transactions were allocated to individual Debtors as set forth on the following page.

Residential Loan Order. Between the entry of the Residential Loan Order and the Report Date, there were no Residential
Hedging Transactions.

Lehman Brothers Holdings Inc.

As of December 31, 2009

Collateral Posted Estimated Recovery

For Hedging Value of Receivables
Debtor Transactions Being Hedged
Lehman Brothers Special Financing Inc. (LBSF) $ 390,238,000 $ 802,757,351
Lehman Brothers Financial Products (LBFP) 14,500,000 2,669,285
Lehman Brothers Commodity Services (LBCS) 9,500,000 6,931,010

$ 414,238,000 $ 812,357,646

file:///C|/Documents%20and%20Settings/Troy%20Uhlman/Desktop/filing_raw.php.htm (9 of 9) [1/14/2010 8:10:53 PM]