Slide 1: Preliminary 2008 Fourth Quarter and Full-Year Results
Preliminary 2008 Fourth Quarter and Full-Year Results February 3, 2009 9:00 AM EST Contact GMAC Investor Relations at (866) 710-4623 or investor.relations@gmacfs.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements In the presentation that follows and related comments by GMAC LLC (“GMAC”) management, the use of the words “expect,” “anticipate,” “estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,” “project,” “outlook,” “priorities,” “target,” “intend,” “evaluate,” “pursu
Slide 3: Table of Contents
Table of Contents GMAC Page 4 Global Auto Finance Page 7 Insurance Page 11 ResCap Page 13 Global Capital and Liquidity Page 21 GMAC General Items Page 25 Conclusion Page 28 Supplemental Page 29 3
Slide 4: GMAC: 2008 Actions
GMAC: 2008 Actions 2/08 Announced North American Auto Finance restructuring 6/08 Completed largest bank line refinancing ever, covering $46 billion of commitments 6/08 Completed ResCap bond exchange, capturing a $1.7 billion discount 7/08 Sold Polish Commercial Finance unit 7/08 Secured ownership of
Slide 5: GMAC: Fourth Quarter 2008 Performance Highlights
GMAC: Fourth Quarter 2008 Performance Highlights Q4 2008 consolidated net income of $7.5 billion, primarily driven by a gain on the bond exchange Excluding the bond exchange gain of $11.4 billion, the consolidated net loss was $3.96 billion Loss of $1.3 billion at Global Auto Finance, driven by weak
Slide 6: GMAC: Net Income by Segment
GMAC: Net Income by Segment Net Income by Segment * ResCap total GAAP net income was $981 million, including $754 million debt retirement gains. ** Other segment includes Commercial Finance, equity investments and other corporate activities. Other had total GAAP net income of $9.66 billion, includin
Slide 7: Global Auto Finance: Key Metrics
Global Auto Finance: Key Metrics ($ bil) All tables include North American and International Operations except where noted. Origination and asset base figures include auto loans and leases. *U.S. scheduled terminations on a managed basis by termination year - all lease terms, all vehicle segments (c
Slide 8: Global Auto Finance: Condensed Income Statement
Global Auto Finance: Condensed Income Statement Notable Items (Pre-Tax) ($ millions) Q4 2008 Q4 2007 Revenue Total financing revenue $3,303 $3,804 Interest expense 2,276 2,314 Depreciation expense on operating leases 1,273 1,383 Impairment of investment in operating leases 425 - Net financing (loss)
Slide 9: Global Auto Finance: Consumer Auto Loss Trends
Global Auto Finance: Consumer Auto Loss Trends Net Retail Losses (% Avg Assets) Q4 2008 2.51% 0.85% 0.70% 1.49% 2.10% Q4 2007 1.31% -0.01% 0.47% 1.20% 1.05% Year over Year Change +120bps +86bps +23bp +29bps +105bps North Asia Latin America EuropePacific America Global Losses are up significantly due
Slide 10: Global Auto Finance: Auto Delinquency Trends
Global Auto Finance: Auto Delinquency Trends Loans > 30 Days Past Due Q4 2008 3.18% 1.52% 1.74% 4.06% 2.96% Q4 2007 2.77% 1.36% 1.90% 4.08% 2.68% Year over Year Change +41bps +16bps -16bps -2bps +28bps North Asia Latin AmericaEuropePacific America Global Delinquency has historically been highly corr
Slide 11: Insurance: Key Metrics
Insurance: Key Metrics ($ mil) * Core Earnings = underwriting income + investment income + goodwill impairment + interest expense, less gain on sale of business, less capital gains; net of tax. See supplemental charts for a reconciliation of core earnings to GAAP income. ** Combined ratio represents
Slide 12: Insurance: Condensed Income Statement
Insurance: Condensed Income Statement Notable Items (Pre-Tax) ($ millions) Q4 2008 Q4 2007 Revenue Insurance premiums and service revenue earned $963 $1,133 Investment income 9 107 Other income 132 42 Total insurance premiums and other income 1,104 1,282 Expense Insurance losses and loss adjustment
Slide 13: ResCap: Key Messages
ResCap: Key Messages Operating and market environments Execution of strategic initiatives continues to reduce the balance sheet and lower operating costs; however, weak real estate market conditions persist Credit-related costs remain at elevated levels Cost of funding is very high Significant porti
Slide 14: ResCap: Key Metrics
ResCap: Key Metrics 2 1 Q4 ’08 includes $754 million after-tax gain on extinguishment of debt. 2 Total assets include the assets of auto division of GMAC Bank as presented on ResCap’s financial statements. 3 Government and Prime Second Liens are included in Prime Non-conforming. 3 Of the total, $4.2
Slide 15: ResCap: Condensed Income Statement
ResCap: Condensed Income Statement Note: Income statement presentation (condensed) as it appears on a GMAC reported basis; results on a ResCap reported basis can be found on page 37 of this presentation. Notable Items (Pre-Tax)* ($ millions) Q4 2008 Q4 2007 Revenue Total financing revenue $600 $1,28
Slide 16: ResCap: Global Portfolio Credit Quality
ResCap: Global Portfolio Credit Quality Excluding loans impacted by FAS 159 Excluding loans impacted by FAS 159 Total HFI* = $25.9 billion Total Lending Receivables* = $6.6 billion *Note: HFI and Lending Receivables balances are carry value before allowance; charge-off percentages are not annualized
Slide 17: ResCap: Capital and Liquidity
ResCap: Capital and Liquidity Total equity of $2.2 billion (12/31/08) ResCap received equity infusions of $1.67 billion from GMAC during Q4 2008, including $690 million of GMAC MSR debt forgiveness and the contribution of $976 million of ResCap bonds (face value plus accrued interest) that resulted
Slide 18: GMAC Bank: IB Finance Transaction
GMAC Bank: IB Finance Transaction On January 30, GMAC acquired 100% of ResCap’s non-voting equity interest in IB Finance Holdings, the parent company of GMAC Bank Prior to the transaction, IB Finance was jointly owned by GMAC and ResCap (GMAC held 100% of outstanding voting interests, and ResCap hel
Slide 19: Global Capital and Liquidity: GMAC Bank
Global Capital and Liquidity: GMAC Bank Continuing to grow GMAC Bank assets and deposits in line with FDIC guidelines Assets of $32.9 billion include $10.9 billion of assets at the auto division, and $22.0 billion of assets at the mortgage division Increased marketing efforts have raised deposits to
Slide 20: GMAC Bank: Regulatory Restrictions for Auto Assets
GMAC Bank: Regulatory Restrictions for Auto Assets Banking regulations limit GMAC Bank’s ability to fund the majority of GMAC’s U.S. auto assets Certain transactions with affiliates are extremely limited, without an exemption Currently, GM is considered an affiliate of GMAC Bank GMAC Bank can not fu
Slide 21: Global Capital and Liquidity: Cash Roll Forward
Global Capital and Liquidity: Cash Roll Forward GMAC ResCap GMAC ($ billions) Consolidated Consolidated Bank Cash & Cash Equivalents (9/30/08) $13.5 $6.9 $4.9 Debt Maturities (5.5) (0.3) 0.0 Q4 Wholesale Securitization Maturities (0.7) 0.0 0.0 Asset RunOff net of On-Balance Sheet Securitizations 7.5
Slide 22: Global Capital and Liquidity: Capital Base
Global Capital and Liquidity: Capital Base The bond exchange increased equity capital by $3.7 billion from principal reduction, cash tender and issuance of other securities, $0.2 billion from converting principal to preferred stock and $7.7 billion from recording the debt and preferred at fair marke
Slide 23: Global Capital and Liquidity: Capital Ratios
Global Capital and Liquidity: Capital Ratios Capital ratios * The ratio of Tangible Equity/Tangible Assets excludes Intangibles of $1.4 billion (12/31/08), $1.5 billion (9/30/08) and $1.6 billion (12/31/07) from Total Equity and Total Assets. ** Under a revolving credit facility, we are subject to a
Slide 24: Global Capital and Liquidity: Term Debt Maturity Profile
Global Capital and Liquidity: Term Debt Maturity Profile Debt exchange did not significantly change GMAC’s overall maturity profile Unsecured and secured term maturities in 2009 are $30.5 billion, down only $2.0 billion from pre-exchange levels *Note: Pre-exchange maturities as of 9/30/2008 and post
Slide 25: GMAC: Funding Strategy
GMAC: Funding Strategy Within GMAC Bank: Increase deposits and shift toward a higher proportion of retail deposits Continue to access FHLB funding Access federal funding facilities as appropriate Outside GMAC Bank Maintain key components of current funding strategy Emphasis on secured committed faci
Slide 26: GMAC: Selected BHC Requirements
GMAC: Selected BHC Requirements The transformation to a BHC involves a number of changes, including those to our current business model, corporate governance and reporting requirements GMAC-GM operating agreements being revised GMAC Board will be reconstituted GMAC must comply with bank regulations
Slide 27: GMAC: Corporate Governance
GMAC: Corporate Governance GMAC is required to reconstitute its board by March 24, 2009 The new board will be comprised of seven members including: One member appointed by Cerberus Two members appointed by the Trustee of the “Treasury Trust“ The Treasury Trust is a blind trust or trusts that will be
Slide 28: Conclusion
Conclusion The difficult economic and financial environment in 2008 threatened GMAC’s mission of lending to car buyers, homebuyers and auto dealers Our actions throughout the year have improved GMAC’s position, yet challenges remain Stressed capital markets Poor economic conditions Weaker consumer a
Slide 29: Supplemental Charts
Supplemental Charts GMAC FINANCIAL SERVICES eee Q4 2008 GMAC Preliminary Results 29
Slide 30: GMAC: Preliminary Quarterly Consolidated Net Income
GMAC: Preliminary Quarterly Consolidated Net Income Supplemental ($ millions) Q4 2008 Q4 2007 Revenue Total financing revenue $4,000 $5,193 Interest expense 2,917 3,653 Depreciation expense on operating lease assets 1,274 1,384 Impairment of investment in operating leases 425 - Net financing (loss)
Slide 31: GMAC: Preliminary Full-Year Consolidated Net Income
GMAC: Preliminary Full-Year Consolidated Net Income Supplemental ($ millions) 2008 2007 Revenue Total financing revenue $18,395 $21,187 Interest expense 11,870 14,776 Depreciation expense on operating lease assets 5,483 4,915 Impairment of investment in operating leases 1,234 - Net financing (loss)
Slide 32: GMAC: Preliminary Consolidated Balance Sheet
GMAC: Preliminary Consolidated Balance Sheet Supplemental ($ billions) Assets 12/31/2008 12/31/2007 Cash and cash equivalents $15.2 $17.7 Investment securities 8.4 16.7 Loans held for sale 7.9 20.6 Finance receivables and loans, net of unearned income 100.1 127.5 Allowance for credit losses (3.4) (2
Slide 33: GMAC: Leverage Ratio as of 12/31/08
GMAC: Leverage Ratio as of 12/31/08 Supplemental Less: Adjusted December 31, 2008 ($ millions) GMAC LLC ResCap leverage metrics Consolidated borrowed funds: Total debt $126,321 $30,576 $95,745 Less: Obligations of bankruptcy-remote SPEs (54,876) (3,753) (51,123) Intersegment eliminations - (7,440) 7
Slide 34: Global Auto Finance: Lease Residual Trends
Global Auto Finance: Lease Residual Trends U.S. and Canada Sales Proceeds as a % of Original ALG Estimate * U.S. scheduled terminations on a managed basis, all lease terms. **Canada scheduled terminations on a managed basis, all lease terms. Supplemental 1- U.S. scheduled terminations, all lease ter
Slide 35: Auto Finance: Portfolio Composition
Auto Finance: Portfolio Composition Supplemental North America Lease Portfolio by Vehicle Mix As of 12/31/08. Numbers may not foot due to rounding. *U.S. managed portfolio, adjusted for Q4 2008 vehicle mix. As % of Units Units (000's) As % of Value Net Book Value ($bn) Car 49% 651 40% $9.4 Truck 17%
Slide 36: Reconciliation of Insurance Core Earnings
Reconciliation of Insurance Core Earnings Supplemental 3. Amount within investment income in Forms 10-Q and 10-K. 2. Amount within other income in Forms 10-Q and 10-K. 1. Amount within acquisition and underwriting expense in Forms 10-Q and 10-K. ($ millions) 4Q 2008 3Q 2008 2Q 2008 1Q 2008 4Q 2007 3
Slide 37: ResCap: Income Statement
ResCap: Income Statement Note: Numbers may not foot due to rounding. Income statement presentation (condensed) as it appears on a ResCap reported basis; results as they appear on a GMAC reported basis can be found on page 15 of this presentation. Supplemental ($ millions) Q4 2008 Q4 2007 Revenue Tot
Slide 38: ResCap: Mortgage Production
ResCap: Mortgage Production 1 International includes some nonprime production. 1 1 Supplemental 1 International includes some nonprime production. Note: Totals may not foot due to rounding. ($ billions) Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007 Q3 2007 Q2 2007 Q1 2007 Prime conforming $5.2 $6.8 $12.2
Slide 39: ResCap: Nonprime and Prime Exposure
ResCap: Nonprime and Prime Exposure Prime and Other 2 1) The nonprime category includes high FICO/high LTV loans, high FICO alternative attribute loans, purchased distressed assets, and subprime assets (Weighted Average FICO 618) for the domestic business and international loans with at least some a
Slide 40: ResCap: Global HFS Portfolio
HFS and HFI Q4 08 transfers: HFS to HFI $240 million HFI to HFS $17 million ResCap: Global HFS Portfolio Supplemental Note: ResCap’s HFS is part of total Loans Held for Sale Q4 2008 Total HFS Portfolio of $2.6 billion 10% 33% 11% 0% 46% Prime Conforming Prime Nonconforming Nonprime Prime Second-lien
Slide 41: ResCap: HFI Portfolio
ResCap: HFI Portfolio GMAC Bank HFI On-Balance Sheet HFI Securitizations Non Bank HFI 159 Loans Fair Value The Q4 2007 pie chart represents the HFI portfolio before FAS 159 Fair Value Election on January 1, 2008 which resulted in a $10.5 billion reduction in HFI balance related to securitized loans
Slide 42: ResCap: Q4 Significant Items
ResCap: Q4 Significant Items 1 Gain/(Loss) on Sale of Loans excludes the Gain/(Loss) from Deconsolidation of Securitized HFI Note: These amounts are classified according to ResCap's income statement presentation (includes auto division of GMAC Bank). Supplemental GMAC ResCap Significant Items (Pre-t
Slide 43: ResCap: Term Debt Maturity Profile
ResCap: Term Debt Maturity Profile Supplemental Note: Maturities as of 12/31/2008 and reflect par value of debt. Excludes collateralized borrowings in securitizations trusts representing mortgage lending related debt that is repaid upon the principal payments of the underlying assets, of $3.8 billio