Lehman Brothers took a $3.5 billion writedown related to residential and commercial assets in its fourth fiscal quarter but was able to offset it with about $2 billion in hedging gains, the company's global head of risk management said in a Dec. 13 conference call.Considering that the global credit crunch made November the "single worst month on record" for securitized assets, Lehman's 12% decline in year-to-year quarterly income, to $886 million, was a sign that the company did a relatively good job of managing its risk even though it did not emerge from the quarter unscathed, Chris O'Meara said. The residential-related portion of the writedown totaled $2.2 billion, Mr. O'Meara said.

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