{ "docId": "019dd923-622b-71dc-a6da-d663f7d16bb8", "docSlug": "6b632aa627e3", "documentTitle": "Lehman Brothers (LEH)", "authorId": "04_Greenlight_Capital", "authorName": "David Einhorn", "documentKindSlug": "conference-presentation", "documentKindLabel": "Conference presentation", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2008-05-21 00:00:00", "orientation": "portrait", "aspectRatio": 0.7428985, "pageNumber": 6, "pageCount": 9, "prevPage": 5, "nextPage": 7, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 7, "notes": "This is a text-heavy slide acting as a forensic analysis of financial reporting inconsistencies.", "elementsJson": [ "paragraph", "quote_block" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6da-d663f7d16bb8/6", "deckHref": "/decks/019dd923-622b-71dc-a6da-d663f7d16bb8", "deckJsonHref": "/decks/019dd923-622b-71dc-a6da-d663f7d16bb8.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6da-d663f7d16bb8#slide-6", "components": [ { "bbox": null, "kind": "callout", "text": "As you can see, the table in the 10-Q does not match the conference call. There is no reasonable explanation as to how the numbers could move like this between the conference call and the 10-Q.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0936-7173-ab16-2cb12ea9d271", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.72, "x": 0.14, "y": 0.28 }, "kind": "paragraph", "text": "Last week, Lehman’s CFO and corporate controller confirmed that the whole $6.5 billion consisted of CDOs or synthetic CDOs. This is after Wall Street spent the last half year asking, “Who has CDOs?”", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "68fec99a-ba2b-4cc1-bf74-b643c00cfe0a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.72, "x": 0.14, "y": 0.41 }, "kind": "paragraph", "text": "I asked them how they could justify only a $200 million write-down on any $6.5 billion pool of CDOs that included $1.6 billion of below investment grade pieces.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7a0f2ba5-0fe7-4196-b785-a87f00b9e228", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.72, "x": 0.14, "y": 0.55 }, "kind": "paragraph", "text": "Now, I’d like to put up Lehman’s table of Level 3 assets (Table 3). I want you to look at the column to the far right while I read to you what Ms. Callan said about this during the Q&A on the earnings conference call on March 17.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8eb6eaa1-84a1-4709-b0a4-4e86cdfb7092", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.72, "x": 0.14, "y": 0.08 }, "kind": "paragraph", "text": "Now let’s look at the footnote 1 of the table, explaining Other asset-backed securities: The Company purchases interests in and enters into derivatives with collateralized debt obligation securitization entities (“CDOs”).", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "96255dec-e2b5-46d1-a4f6-434f3fbb3f99", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.72, "x": 0.14, "y": 0.63 }, "kind": "paragraph", "text": "[A]t the end of the year, we were about 38.8 [billion] in total Level 3 assets... net sort of payments, purchases, or sales of 1.8 billion... net transfers in of 1.1 billion... 875 million of write-downs. So that gives you a balance of 38,682.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a7188bf7-070a-4a45-a739-eff88b5fcff4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.75 }, "kind": "paragraph", "text": "As you can see, the table in the 10-Q does not match the conference call. There is no reasonable explanation as to how the numbers could move like this between the conference call and the 10-Q.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c330a784-2dac-40c1-88a0-0bbe5748d178", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "[A]t the end of the year, we were about 38.8 [billion] in total Level 3 assets. In terms of what happened in Level 3 asset changes this quarter, we had net sort of payments, purchases, or sales of 1.8 billion. We had net transfers in of 1.1 billion. So stuff that was really moved in or recharacterized from Level 2. And then there was about 875 million of write-downs. So that gives you a balance of 38,682 as of February 29. — Ms. Callan (Lehman CFO)", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0936-7173-ab16-320d91caeac1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.95 }, "kind": "source-note", "text": "FOIA CONFIDENTIAL TREATMENT REQUESTED BY LEHMAN BROTHERS HOLDINGS INC. 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