GMAC Financial Services Reports Preliminary Third Quarter 2009 Financial Results
- Third quarter net loss of $767 million - Net loss from continuing operations of $671 million - Focus remains on strengthening strategic operations and exiting non-strategic assets - Originated $7.7 billion and $15.9 billion of auto and mortgage loans, respectively - Launched dealer rewards program to promote growth in auto-related operations - Re-entered ABS market with TALF-eligible transactions and participated in the TLGP with debt offering - Ally Bank increased total deposits by $2.3 billion - Tier 1 capital ratio was 14.4 percent
NEW YORK, Nov. 4 -- GMAC Financial Services today reported a third quarter 2009 net loss of $767 million, compared to a net loss of $2.5 billion in the third quarter of 2008. Results in the quarter were adversely affected by losses related to legacy assets in the mortgage operations.
During the quarter, certain business lines were classified as discontinued operations. These businesses, which include GMAC's U.S. consumer property and casualty insurance business and three international automotive financing operations, have been removed from the company's continuing operations. Excluding these businesses, net loss from continuing operations totaled $671 million in the third quarter of 2009, compared to $2.5 billion in the comparable prior year period. Continuing operations in the quarter were affected by several significant items, including:
-- $515 million mortgage repurchase reserve expense;
-- $161 million loss provision on resort finance assets;
-- $309 million original issue discount amortization expense related to
the December 2008 bond exchange;
-- $79 million legacy mortgage provision expense;
-- $292 million tax benefit on operating losses;
-- $155 million mark-to-market gain on auto retained interests; and
-- $23 million net recovery on commercial and international portfolio
marks/write-downs.
Excluding these items, GMAC's net loss from continuing operations in the third quarter was $77 million.
Third Quarter Financial Highlights
($ in millions)
Pre-tax Income/(Loss) From Continuing Operations by Segment
Increase/(Decrease)
vs.
----------------
3Q 09 2Q 09 3Q 08 2Q 09 3Q 08
----- ----- ----- ----- -----
Automotive Finance - North
America $345 $302 $(323) $43 $668
Automotive Finance -
International 50 45 (56) 5 106
-------------------- --- --- --- --- ---
Global Automotive Finance 395 347 (379) 48 774
Insurance 81 95 73 (14) 8
Mortgage Operations (747) (2,044) (1,949) 1,297 1,202
Corporate and Other(1) (692) (616) (384) (76) (308)
------------------------- ---- ---- ---- --- ----
Pre-tax loss from continuing
operations (963) (2,218) (2,639) 1,255 1,676
Income tax expense (benefit) (292) 1,099 (101) (1,391) (191)
Discontinued
Operations(2) (96) (586) 15 490 (111)
---------------- --- ---- --- --- ----
Net income (loss) $(767) $(3,903) $(2,523) $3,136 $1,756
(1) Corporate and Other segment includes Commercial Finance, equity investments, amortization of original issue discount from GMAC bond exchange, and other corporate activities.
(2) Discontinued Operations currently includes: U.S. consumer property and casualty insurance (Insurance segment); Argentina operations, U.K. full-service leasing and Italy full-service leasing from International Operations (Global Automotive Finance segment). Other businesses may be included in discontinued operations in the future.
"We continue to work through solutions for certain legacy assets and that is still weighing on GMAC's financial performance," said GMAC Chief Executive Officer Alvaro G. de Molina. "Progress is being made toward the transformation of the company as we shed non-strategic operations while at the same time invest in structuring the company to be more competitive for the long term."
"Our focus is on growing operations where we can leverage our strengths," said de Molina. "We have made major strides in bringing the Chrysler business on line, we launched a competitive dealer program that leverages our full suite of auto products, and Ally Bank continues to attract customers."
Liquidity and Capital
GMAC's consolidated cash and cash equivalents were $14.2 billion as of Sept. 30, 2009, down from $18.7 billion at June 30, 2009. Included in the consolidated cash and cash equivalents balance are: $919 million at Residential Capital, LLC (ResCap); $5.0 billion at Ally Bank, which excludes $5.2 billion of intercompany overnight funds on deposit at Ally Bank; and $75 million at the insurance business. The decrease in consolidated cash reflects investment into high quality debt securities and the repayment of unsecured debt maturities.
GMAC's total equity at Sept. 30, 2009 was $24.9 billion, down from $26.0 billion at June 30, 2009. Total equity was marginally lower primarily due to the net loss in the quarter and the payment of preferred dividends. GMAC's preliminary third quarter Tier 1 capital ratio was 14.4 percent, and the Tier 1 common capital ratio was 6.1 percent. The increase in the Tier 1 capital ratio is the result of the company's continued effort to de-risk and de-lever.
Ally Bank and ResMor Trust continue to enhance GMAC's funding flexibility through growth in deposits. Ally Bank and ResMor Trust deposits, excluding $5.2 billion of certain intercompany amounts, increased in the third quarter to $28.8 billion as of Sept. 30, 2009, from $26.3 billion at June 30, 2009. Retail deposits at Ally Bank were $15.9 billion at quarter-end, compared to $14.5 billion at the end of second quarter 2009. Brokered deposits at Ally Bank increased to $9.5 billion at quarter-end, compared to $8.7 billion at the end of second quarter 2009.
In September, GMAC re-entered the asset-backed securities (ABS) market with a $941 million Ally Bank auto securitization offering that was eligible for the Term Asset-Backed Securities Loan Facility (TALF). This marked the first time GMAC or Ally Bank sponsored a TALF-eligible security, and the first time Ally Bank entered the ABS market with an auto transaction. This month Ally Bank sponsored another similar auto securitization for $885 million. Ally Bank continues to be a key component of GMAC's funding strategy, as exemplified by these transactions and the deposit growth.
Further enhancing GMAC's liquidity position, the company completed on Oct. 28, 2009 an offering for $2.9 billion of senior fixed rate notes guaranteed by the Federal Deposit Insurance Corporation (FDIC) pursuant to the FDIC Temporary Liquidity Guarantee Program (TLGP).
Global Automotive Finance
GMAC's global automotive finance business reported third quarter 2009 pre-tax income from continuing operations of $395 million, compared to a pre-tax loss from continuing operations of $379 million in the comparable prior year period. Continuing operations in the segment excludes certain discontinued operations, which consist of automotive finance operations in Argentina and full-service leasing operations in the U.K. and Italy. Continuing operations in the segment were driven by the continued normalization of origination volumes, credit improvement and used vehicle prices.
Total consumer financing originations during the third quarter of 2009 were $7.7 billion, which included $6.8 billion of new originations, approximately $800 million of used originations and approximately $100 million of new leases. Third quarter 2008 consumer financing originations totaled $13.3 billion, which included $9.2 billion of new originations, $2.0 billion of used originations and $2.1 billion of new leases/retail balloon contracts. Originations were lower compared to the prior year primarily due to a decrease in U.S. vehicle sales and lower leasing levels. Consumer financing origination levels continued to trend upward on a sequential basis as originations were up 26 percent from $6.1 billion in the second quarter of 2009. The increase from last quarter includes improved pricing competitiveness, an increase in Chrysler originations and the effect of the "cash-for-clunkers" program.
GMAC continues to make significant progress in extending financing to Chrysler dealers and customers. During third quarter 2009, the company originated approximately $720 million of Chrysler retail loans, versus approximately $200 million in the previous quarter. GMAC's penetration of U.S. retail sales for Chrysler improved to 21 percent for the month of September, compared to 10 percent in June 2009. In addition, GMAC's outstanding balance for wholesale financing of Chrysler dealers was approximately $3.3 billion at Sept. 30, 2009. Chrysler wholesale penetration was 67 percent in the U.S. and 85 percent in Canada at Sept. 30, 2009.
On Oct. 1, 2009, GMAC introduced Ally Dealer Rewards, a program designed to drive business volumes by providing benefits to dealers that consistently use the company's comprehensive suite of automotive products and services, including new and used retail financing, wholesale financing, insurance products and remarketing services. The program is currently only available to GM and Chrysler dealers in the U.S., but there are plans to expand the program in the future.
Credit losses increased in the third quarter of 2009 to 3.29 percent of managed retail assets, versus 1.56 percent in the third quarter of 2008. The increase is primarily due to a standardization of the company's charge-off policy to conform to regulatory requirements, the effect of a smaller asset base, and the underlying performance of certain subprime portfolios. Lower loss severities in North America have partially offset weak economic trends. Excluding the effect of the change in the charge-off policy, credit losses would have been 2.19 percent of managed retail assets in the third quarter of 2009.
Delinquencies, defined as contracts more than 30-days past due, also increased to 3.76 percent in the third quarter of 2009, compared to 2.77 percent in the third quarter of 2008 and 3.48 percent in the second quarter of 2009. Delinquency trends have been negatively affected by higher unemployment and a smaller asset portfolio in North America and Europe.
Insurance
GMAC's insurance business reported pre-tax income from continuing operations of $81 million in the third quarter of 2009, compared to $73 million in the prior year period. Continuing operations in the segment excludes the U.S. consumer property and casualty insurance business, which has been classified as discontinued operations. The increase in pre-tax income from continuing operations reflects higher investment income, partially offset by lower premiums resulting from the sale of GMAC's reinsurance unit in October 2008, lower volumes in dealer-related products due to lower automotive industry sales, and lower volumes from our international business.
Following a comprehensive strategic review of the insurance business, GMAC reached an agreement to sell its U.S. consumer property and casualty insurance business to American Capital Acquisition Corporation on Oct. 16, 2009. This business includes GMAC's U.S. automobile, commercial vehicle, motorcycle and recreational vehicle insurance offerings. The dealer-related insurance business, which includes extended service contracts and insurance for auto dealer inventories, is not affected by this transaction and remains a strategic component of GMAC's automotive financial services platform. The transaction is expected to close in the first quarter of 2010, subject to regulatory approval and other customary closing conditions.
The fair value of the insurance investment portfolio was $5.2 billion at Sept. 30, 2009, compared to $6.6 billion at Sept. 30, 2008, with the decrease being primarily attributable to the sale of GMAC's reinsurance unit.
Mortgage Operations
Mortgage operations, which includes ResCap and the mortgage activities of Ally Bank and ResMor Trust, reported a pre-tax loss from continuing operations of $747 million during third quarter 2009, versus a pre-tax loss from continuing operations of $1.9 billion in the comparable prior year period. While credit provisions have begun to moderate, segment results were negatively impacted by an expense of $515 million during third quarter 2009 to increase repurchase reserves. Losses were partially offset by stronger net revenue driven by improved core business margins and higher net servicing revenue.
Mortgage loan production in the third quarter of 2009 was $15.9 billion, compared to $18.8 billion in the second quarter of 2009 and $11.9 billion in the third quarter of 2008. Production for the quarter was driven by prime conforming and government loans, with a limited amount of high quality jumbo loans. Originations were down slightly from last quarter due to lower industry refinancing volume.
As part of its loss mitigation efforts, GMAC continues to participate in the Home Affordable Modification Program (HAMP), which was created to assist struggling homeowners. Through HAMP, the company had extended 31,720 trial plan offers to its customers as of Sept. 30, 2009.
Corporate and Other
GMAC's corporate and other segment reported a third quarter 2009 pre-tax loss from continuing operations of $692 million, compared to a pre-tax loss from continuing operations of $384 million in the comparable prior year period. The main drivers of the loss in the quarter were an original issue discount amortization expense related to the December 2008 bond exchange and an additional loss provision on resort finance assets in the commercial finance business.
Outlook
GMAC continues to focus on finding solutions for certain legacy and non-strategic assets that are no longer part of the long-term strategic vision and represent barriers to restoring financial health.
Additionally, the company continues to work toward reducing structural costs to optimize returns. Key components of the cost reduction plan include streamlining operations in line with business expectations and rationalizing non-core and non-strategic activities. GMAC has begun to execute plans toward this initiative, such as signing the agreement to sell the U.S. consumer property and casualty insurance business and classifying certain international automotive financing operations as discontinued operations.
Going forward, GMAC will continue to focus on its core competencies, including automotive-related products and services. The company is working to increase competitiveness in these areas and offer value to its customers.
GMAC also continues to execute its five core strategies:
-- Transition to and meet all bank holding company requirements
-- Strengthen liquidity and capital position by shifting largely to a
deposit-funded institution
-- Build a world-class organization
-- Expand and diversify customer-focused revenue opportunities
-- Drive returns by repositioning risk profile and maximizing
efficiencies
About GMAC Financial Services
GMAC is a bank holding company with 15 million customers worldwide. As a global, independent financial services institution, GMAC's diversified business operations include automotive finance, mortgage operations, insurance, commercial finance and online banking. As of Sept. 30, 2009, the company had approximately $178 billion in assets. Visit the GMAC media site at http://media.gmacfs.com/ for more information.
Forward-Looking Statements
In this earnings release and related comments by GMAC Inc. ("GMAC") management, the use of the words "expect," "anticipate," "estimate," "forecast," "initiative," "objective," "plan," "goal," "project," "outlook," "priorities," "target," "intend," "evaluate," "pursue," "seek," "may," "would," "could," "should," "believe," "potential," "continue," or the negative of any of those words or similar expressions is intended to identify forward-looking statements. All statements herein and in related charts and management comments, other than statements of historical fact, including without limitation, statements about future events and financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and GMAC's and Residential Capital, LLC's ("ResCap") actual results may differ materially due to numerous important factors that are described in the most recent reports on SEC Forms 10-K and 10-Q for GMAC and ResCap, each of which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: our inability to successfully accommodate the additional risk exposure relating to providing wholesale and retail financing to Chrysler dealers and customers and the resulting impact to our financial stability; uncertainty regarding GM's and Chrysler's recent emergence from bankruptcy protection; uncertainty related to the new financing arrangement between GMAC and Chrysler; securing low cost funding for GMAC and ResCap and maintaining the mutually beneficial relationship between GMAC and GM, and GMAC and Chrysler; our ability to maintain an appropriate level of debt and capital; the profitability and financial condition of GM and Chrysler; our ability to realize the anticipated benefits associated with our recent conversion to a bank holding company, and the increased regulation and restrictions that we are subject to; continued challenges in the residential mortgage and capital markets; the potential for deterioration in the residual value of off-lease vehicles; the continuing negative impact on ResCap of the decline in the U.S. housing market; changes in U.S. government-sponsored mortgage programs or disruptions in the markets in which our mortgage subsidiaries operate; disruptions in the market in which we fund GMAC's and ResCap's operations, with resulting negative impact on our liquidity; changes in our accounting assumptions that may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; changes in the credit ratings of ResCap, GMAC, GM or Chrysler; changes in economic conditions, currency exchange rates or political stability in the markets in which we operate; and changes in the existing or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar organizations. Investors are cautioned not to place undue reliance on forward-looking statements. GMAC undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other such factors that affect the subject of these statements, except where expressly required by law.
Contacts:
Gina Proia
646-781-2692
gina.proia@gmacfs.com
Christopher McNamee
917-369-2389
christopher.mcnamee@gmacfs.com
GMAC Financial Services Preliminary Unaudited Third Quarter 2009
Financial Highlights
($ in millions)
3Q 3Q YTD YTD
Summary Statement of Income Note 2009 2008 2009 2008
-------------------------------------------------------------------------
Revenue
Consumer $1,211 $1,687 $3,803 $5,267
Commercial 424 597 1,317 1,853
Loans held-for-sale 160 246 441 918
Operating leases 1,454 2,027 4,690 6,097
Interest and dividends on investment
securities 113 125 287 486
Other interest income 55 269 175 923
-------------------------------------------------------------------------
Total financing revenue and other
interest income 3,417 4,951 10,713 15,544
Interest expense
Deposits 178 179 535 533
Short-term borrowings 104 425 386 1,522
Long-term debt 1,555 2,084 5,025 6,487
Other 62 192 179 338
-------------------------------------------------------------------------
Total interest expense 1,899 2,880 6,125 8,880
Depreciation expense on operating
lease assets 944 1,472 3,154 4,307
Impairment of investment in
operating leases 0 93 0 808
-------------------------------------------------------------------------
Net financing revenue 574 506 1,434 1,549
Other revenue
Servicing fees 384 441 1,191 1,377
Servicing asset valuation and hedge
activities, net (110) (261) (710) (36)
-------------------------------------------------------------------------
Net loan servicing income 274 180 481 1,341
Insurance premiums and service revenue
earned 582 791 1,697 2,352
Gain (loss) on mortgage and automotive
loans, net 194 25 128 (1,674)
Gain on extinguishment of debt 10 59 667 1,164
Other gain (loss) on investments, net 216 (396) 297 (846)
Other income, net of losses 259 35 67 64
-------------------------------------------------------------------------
Total other revenue 1,535 694 3,337 2,401
Total net revenue 2,109 1,200 4,771 3,950
Provision for loan losses 704 1,099 2,708 2,345
Noninterest expense
Compensation and benefits expense 441 573 1,248 1,699
Insurance losses and loss adjustment
expenses 335 423 984 1,310
Other operating expenses 1,592 1,728 3,830 4,149
Impairment of goodwill 0 16 0 16
-------------------------------------------------------------------------
Total noninterest expense 2,368 2,740 6,062 7,174
Loss from continuing operations before
income tax expense (963) (2,639) (3,999) (5,569)
Income tax (benefit) expense from
continuing operations (292) (101) 681 72
-------------------------------------------------------------------------
Net loss from continuing operations (671) (2,538) (4,680) (5,641)
Net (loss) income from discontinued
operations, net of tax (96) 15 (665) 47
-------------------------------------------------------------------------
Net loss ($767) ($2,523) ($5,345) ($5,594)
-------------------------------------------------------------------------
Sep 30, Dec 31, Sep 30,
Select Balance Sheet Data 2009 2008 2008
-------------------------------------------------------------------------
Cash and cash equivalents $14,225 $15,151 $13,534
Loans held-for-sale 14,963 7,919 11,979
Finance receivables and loans,
net 1
Consumer 53,845 63,963 72,925
Commercial 33,607 36,110 39,497
Investments in operating leases,
net 2 18,867 26,390 30,628
Total assets 178,254 189,476 211,327
Total debt 3 102,041 126,321 160,631
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Third Quarter Nine Months
-------------------------------
Operating Statistics 2009 2008 2009 2008
-------------------------------------------------------------------------
GMAC's Worldwide Cost of
Borrowing 4 5.90% 6.01% 6.17% 5.99%
Tier 1 Capital 5 $23,795 N/A
Tier 1 Common Capital 5 10,008 N/A
Total Risk-Based Capital 5 26,127 N/A
Tangible Common Equity 5 10,468 N/A
Tangible Assets 5 177,568 N/A
Risk-Weighted Assets 5,6 165,181 N/A
Tier 1 Capital Ratio 5 14.41% N/A
Tier 1 Common Capital Ratio 5 6.06% N/A
Total Risk-Based Capital Ratio 5 15.82% N/A
Tangible Common Equity /
Tangible Assets 5 5.90% N/A
Tangible Common Equity /
Risk-Weighted Assets 5 6.34% N/A
-------------------------------------------------------------------------
(1) Finance receivables and loans are net of unearned income
(2) Net of accumulated depreciation
(3) Represents both secured and unsecured on-balance sheet debt such as
commercial paper, medium-term notes and long-term debt
(4) Improvements in the calculation have been made to more accurately
reflect the cost of borrowings ... Calculated by dividing average
interest expense by total average interest bearing liabilities
(5) GMAC was not a bank holding company in the third quarter of 2008 and
therefore was not subject to the related capital requirements
(6) Risk-weighted assets are determined by allocating assets and specified
off-balance sheet financial instruments into six weighted categories,
with higher levels of capital being required for the categories
perceived as representing greater risk. The company's Sept. 30,
2009 preliminary risk-weighted assets reflect estimated on-balance
sheet risk-weighted assets of $146 billion and derivative and off-
balance sheet risk-weighted assets of $19 billion
Numbers may not foot due to rounding
GMAC Financial Services Preliminary Unaudited Third Quarter 2009 Financial
Highlights (Continued)
($ in millions)
Note Third Quarter Nine Months
--------------------------------
GMAC Automotive Finance Operations 2009 2008 2009 2008
--------------------------------
NAO Income (loss) from continuing
operations before income tax
expense $345 ($323) $892 ($1,036)
Income tax expense (benefit)
from continuing operations $31 ($73) $942 ($86)
---- ---- ---- ----
Net income (loss) from
continuing operations $314 ($250) ($50) ($950)
==== ==== ==== ====
IO Income (loss) from continuing
operations before income tax
expense $50 ($56) $64 $243
Income tax expense (benefit)
from continuing operations $33 ($24) $174 $29
---- ---- ---- ----
Net income (loss) from
continuing operations $17 ($32) ($110) $214
==== ==== ==== ====
Consumer Portfolio Statistics
NAO Number of contracts originated
(# thousands) 229 393 479 1,268
Dollar amount of contracts
originated $6,185 $10,581 $13,176 $34,029
Dollar amount of contracts
outstanding at end of
period 7 $43,906 $59,176
Share of new GM retail sales 32% 42% 26% 45%
Share of new Chrysler retail
sales 17% N/A N/A N/A
Dollar amount of GM wholesale
outstanding at end of period $10,892 $19,662
GM wholesale penetration at
end of period 74% 81%
Dollar amount of Chrysler
wholesale outstanding at end
of period $3,347 $534
Chrysler wholesale
penetration
at end of period 70% N/A
Mix of retail & lease
contract originations
(% based on # of units):
New 82% 75% 81% 75%
Used 18% 25% 19% 25%
GM subvented (% based on #
of new units) 69% 86% 72% 80%
Chrysler subvented (%
based on # of new units) 38% N/A 34% N/A
Average original term in
months (U.S. retail only) 66 65 64 63
Off-lease remarketing
(U.S. only)
Sales proceeds on
scheduled
lease terminations
(36-month)
per vehicle - Serviced 8,9 $17,701 $13,207 $15,720 $13,712
Off-lease vehicles
terminated
- Serviced (# units) 9 86,683 108,063 285,138 328,438
Sales proceeds on
scheduled
lease terminations
(36-month)
per vehicle - On-balance
sheet 8 $18,115 $13,108 $15,994 $13,648
Off-lease vehicles
terminated
- On-balance sheet
(# units) 10 60,016 59,238 186,372 161,996
IO Number of contracts
originated
(# thousands) 107 161 304 543
Dollar amount of contracts
originated $1,519 $2,755 $4,323 $9,502
Dollar amount of contracts
outstanding at end of
period 11 $13,388 $18,306
Mix of retail & lease
contract
originations (% based
on # of units):
New 95% 86% 94% 86%
Used 5% 14% 6% 14%
GM subvented (% based on
# of units) 48% 37% 57% 40%
Asset Quality Statistics
NAO Annualized net retail
charge-offs as a % of
managed assets 12 3.31% 1.90% 2.93% 1.71%
Managed retail contracts
over 30 days delinquent 12,13 4.36% 2.90%
Serviced retail contracts
over 30 days delinquent 13,14 4.08% 2.85%
IO Annualized net charge-offs
as a % of managed assets 12 3.24% 0.70% 1.90% 0.72%
Managed retail contracts
over 30 days delinquent 12,13 2.85% 2.57%
Operating Statistics
NAO Allowance as a % of related
on-balance sheet consumer
receivables at end of
period 4.16% 4.37%
Repossessions as a % of
average number of managed
retail contracts
outstanding 12 3.61% 2.65% 3.50% 2.57%
Severity of loss per unit
serviced - Retail 14
New $9,288 $11,760 $10,387 $10,919
Used $8,058 $9,269 $8,719 $8,710
IO Allowance as a % of related
on-balance sheet consumer
receivables at end of period 1.64% 1.61%
Repossessions as a % of average
number of contracts
outstanding 0.74% 0.69% 0.84% 0.69%
--------------------------------------------------------------------------
(7) Represents on-balance sheet assets, which includes $17.2 billion of
lease assets and $8.5 billion of retail loans held for sale in 2009
(8) Prior period amounts based on current vehicle mix, in order to be
comparable
(9) Serviced assets represent operating leases where GMAC continues to
service the underlying asset
(10) GMAC-owned portfolio reflects lease assets on GMAC's books after
distribution to GM of automotive leases in connection with the sale
transaction which occurred in November 2006
(11) Represents on-balance sheet assets including retail leases
(12) Managed assets represent on and off-balance sheet finance receivables
and loans where GMAC continues to be exposed to credit and/or
interest rate risk
(13) Represents percentage of average number of contracts outstanding.
Excludes accounts in bankruptcy.
(14) Serviced assets represent on and off-balance sheet finance
receivables and loans where GMAC continues to service the underlying
asset
Numbers may not foot due to rounding
GMAC Financial Services Preliminary Unaudited Third Quarter 2009 Financial
Highlights (Continued)
($ in millions)
Note Third Quarter Nine Months
-----------------------------------
Mortgage Operations 2009 2008 2009 2008
-----------------------------------
Loss from continuing
operations before income
tax expense ($747) ($1,949) ($3,929) ($4,615)
Income tax (benefit) expense
from continuing operations ($154) ($18) ($480) $65
------ ------ ------ ------
Net loss from continuing
operations ($593) ($1,931) ($3,449) ($4,680)
====== ====== ====== ======
Gain (loss) on mortgage
loans, net
Domestic $209 $32 $561 ($213)
International 18 (170) (542) (1,735)
------ ------ ------ ------
Total gain (loss) on
mortgage loans, net $227 ($138) $19 ($1,948)
Portfolio Statistics
Mortgage loan production
Prime conforming $7,963 $6,766 $26,976 $34,391
Prime non-conforming 363 250 706 1,838
Government 7,099 4,138 19,419 9,873
Nonprime 0 0 0 3
Prime second-lien 0 86 0 872
Total Domestic 15,425 11,240 47,101 46,977
International 426 627 952 3,867
------ ------ ------ ------
Total Mortgage production $15,851 $11,867 $48,053 $50,844
Mortgage loan servicing rights
at end of period $3,243 $4,725
Loan servicing at end of period
Domestic $353,252 $391,945
International 26,774 34,079
------ ------
Total Loan servicing $380,026 $426,024
Asset Quality Statistics -
Mortgage Consolidated
Provision for credit losses
by product
Mortgage loans held for
investment $407 $533 $1,597 $1,158
Lending receivables (58) 118 319 256
------ ------ ------ ------
Total Provision for credit
losses $349 $652 $1,915 $1,414
Allowance by product at end
of period
Mortgage loans held for
investment $1,132 $975
Lending receivables 256 564
------ ------
Total Allowance by product $1,388 $1,539
Allowance as a % of related
receivables at end of period
Mortgage loans held for
investment 15 5.59% 3.66%
Lending receivables 12.17% 12.95%
Total Allowance as a %
of related receivables 15 6.21% 4.96%
Nonaccrual loans at end of
period 15 $4,369 $5,747
Nonaccrual loans as a % of
related receivables at end
of period 15 19.55% 18.53%
Total nonperforming
assets 16 $7,004 $8,493
Third Quarter Nine Months
-----------------------------------
GMAC Insurance Operations 2009 2008 2009 2008
-----------------------------------
Income from continuing
operations before income tax
expense $81 $73 $206 $382
Income tax expense from
continuing operations $56 $2 $88 $81
------ ------ ------ ------
Net income from continuing
operations $25 $71 $118 $301
====== ====== ====== ======
Premiums and service revenue
written $451 $714 $1,275 $2,241
Premiums and service revenue
earned 572 782 1,663 2,319
Combined ratio 17 101.6% 89.2% 99.0% 93.4%
Investment portfolio fair value
at end of period $5,244 $6,639
Memo: After-tax at end of period
Unrealized gains $156 $104
Unrealized losses (49) (172)
------ ------
Net unrealized gains
(losses) $107 ($68)
--------------------------------------------------------------------------
(15) Excludes SFAS 159 & SFAS 140 assets
(16) Includes SFAS 159 assets
(17) Combined ratio represents the sum of all incurred losses and expenses
(excluding interest and income tax expense) divided by the total of
premiums and service revenues earned and other income
Numbers may not foot due to rounding