bbolivai's picture
From bbolivai rss RSS  subscribe Subscribe

Services Toronto Investor Presentation 

 

 
 
Tags:  p  balance  statement  500  statements  management  finance  earnings  l  fortune  earning  results 
Views:  320
Published:  December 31, 2009
 
0
download

Share plick with friends Share
save to favorite
Report Abuse Report Abuse
 
Related Plicks
No related plicks found
 
More from this user
Health Care Advice And Prescription Help By Charles Myrick Of American Consultants Rx166

Health Care Advice And Prescription Help By Charles Myrick Of American Consultants Rx166

From: bbolivai
Views: 412
Comments: 0

Getting Pregnant Tips

Getting Pregnant Tips

From: bbolivai
Views: 355
Comments: 0

Jobsbridge   Erp Jobs Update 21st May

Jobsbridge Erp Jobs Update 21st May

From: bbolivai
Views: 310
Comments: 0

Webroot Endpoint Security Software Datasheet - Webroot Antispyware Corporate Edition w/ AntiVirus

Webroot Endpoint Security Software Datasheet - Webroot Antispyware Corporate Edition w/ AntiVirus

From: bbolivai
Views: 583
Comments: 0

PACCAR 02 paccarannual report

PACCAR 02 paccarannual report

From: bbolivai
Views: 732
Comments: 0

Acer aspire one aoa150 1786 8.9 notebook (1.6 g-hz intel atom n270 1gb ram 120gb hdd xp home)

Acer aspire one aoa150 1786 8.9 notebook (1.6 g-hz intel atom n270 1gb ram 120gb hdd xp home)

From: bbolivai
Views: 529
Comments: 0

See all 
 
 
 URL:          AddThis Social Bookmark Button
Embed Thin Player: (fits in most blogs)
Embed Full Player :
 
 

Name

Email (will NOT be shown to other users)

 

 
 
Comments: (watch)
 
 
Notes:
 
Slide 1: Update on Investor Update Toronto, Canada May 23, 2006 Sanjiv Khattri EVP & CFO
Slide 2: Forward Looking Statements In the presentation that follows and in related comments by General Motors Acceptance Corporation management, our use of the words “expect”, “anticipate”, “estimate”, “forecast”, “objective”, “plan”, “goal”, “project”, “outlook”, “priorities,” ”targets”, “intend”, “evaluate”, “pursue”, “seek” and similar expressions is intended to identify forward looking statements. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important factors that are described in GMAC’s most recent report on SEC Form 10-K, which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: the ability of General Motors to complete a transaction with a strategic investor regarding a controlling interest in GMAC while maintaining a significant stake in GMAC, securing separate credit ratings and low cost funding to sustain growth for GMAC and ResCap and maintaining the mutually beneficial relationship between GMAC and General Motors; changes in economic conditions, currency exchange rates, significant terrorist attacks or political instability in the major markets where we operate; changes in the laws, regulations, policies or other activities of governments, agencies and similar organizations where such actions may affect the production, licensing, distribution or sale of our products, the cost thereof or applicable tax rates; and the threat of terrorism, the outbreak or escalation of hostilities between the United States and any foreign power or territory and changes in international political conditions may continue to affect both the United States and the global economy and may increase other risks. Use of the term “loans” describes products associated with direct and indirect lending activities of GMAC’s global operations. The specific products include retail installment sales contracts, loans, lines of credit, leases or other financing products. The term “originate” refers to GMAC’s purchase, acquisition or direct origination of various “loan” products. 1
Slide 3: Outline for Discussion Sale of Controlling Interest in GMAC GMAC Business Update Q&A
Slide 4: Sale of Controlling Interest in GMAC
Slide 5: Transaction Overview Investor Consortium Eq u 51 % 49 % Eq ui ty ity
Slide 6: Components of Transaction GM has agreed to sell a 51% controlling interest in GMAC to a Consortium led by Cerberus Capital Management, L.P. (“Cerberus”) Cerberus will control all of the Consortium’s 51% voting shares Cerberus has a strong track record of performance One of the largest private investment firms in North America, with $18 billion under management Experienced investor in financial institutions and automotive businesses Long-term investment horizon Significant stability for all stakeholders Consortium and GM to invest $1.9 billion in preferred equity GM expects to receive approximately $14B in cash over 3 years $10B at closing
Slide 7: Components of Transaction (cont’d) GM will receive dividends from GMAC equal to its earnings prior to closing, which will largely fund GM repayment of intercompany debt GMAC and most of its U.S. operations (excluding the Insurance Group) will be converted to Limited Liability Company (LLC) form Beneficial for shareholders’ tax planning Long-term investment by Consortium Committed to a 5-year minimum hold period In years 1-2 after closing, plan to retain essentially all GMAC’s “aftertax” earnings in the business In years 3-5 after closing, Cerberus committed to reinvest all of its aftertax distributions into GMAC preferred stock Capital plan reflects a return to GMAC’s historical record of successfully reinvesting profits for growth and profitability
Slide 8: Components of Transaction (cont’d) Assets retained by GM At closing, GM will retain approximately $20 billion of assets Predominantly U.S. lease assets and associated funding Net book value estimated at about $4 billion Retained lease assets reduce GMAC’s credit exposure to GM Going forward, GMAC will continue to originate and retain all lease assets GM call option term of ten years on Global Auto Finance business GM has to have either an investment grade rating or a rating higher than GMAC’s rating to enable call Arranging incremental credit facilities totaling $25 billion -supported by $12.5 billion Citigroup commitment -- to enhance GMAC’s already strong liquidity Committed 3-year revolving facility Asset-backed funding to support lease, wholesale, SmartBuy and other not traditionally securitized assets
Slide 9: Strong Independent Corporate Governance Cerberus will be the managing owner of GMAC LLC and control the Consortium’s 51% voting shares Board Composition: 13 Board members Consortium: 6 GM: 4 Independent: 3 Audit Committee to consist of all three Independent Directors Consortium has the ability to raise a significant amount of new equity capital for GMAC and dilute GM’s ownership without GM consent Majority Independent Director approval required for certain matters, including related party transactions and certain dividend payouts
Slide 10: Mutually Beneficial Services Agreements Services Agreements support key GM-GMAC objectives: GM: Strategic support for GM vehicle sales worldwide GMAC: Increased finance penetration and revenue GMAC granted 10-year exclusivity covering U.S., Canadian and International subvented wholesale and consumer business GMAC commitment to provide financing to GM retail customers and wholesale dealers in accordance with historical practices GMAC will retain right to make all credit decisions GMAC will finance a broad spectrum of customers and dealers generally in line with prior years Agreement provides GMAC ample flexibility to provide GM with required financing support without compromising historical underwriting standards Agreement provides GMAC with a competitive return
Slide 11: Profitable Asset Generation Capability Protected Services agreements will preserve GM / GMAC mutually-beneficial relationship for the long-term Support global $60+ billion a year auto loan origination platform Services Agreements Will continue to give GMAC exclusivity on retail and lease subvented financing programs Will continue to finance GM vehicles to customers across the full credit spectrum GM “special rate” programs represent steady profitable business for GMAC Generate large volume of auto finance assets Assets originated at low acquisition cost to GMAC Generate higher credit quality assets
Slide 12: GM/GMAC Rating Delinkage Cerberus-Led Consortium 49% gs e tin ag Ra ink el D 51%
Slide 13: Credit Exposure to GM Under terms of transaction, GMAC’s unsecured credit exposure to GM will be capped at $1.5 billion on a global basis Cap will include receivables from GM and any implicit “out of the money” risk sharing or residual value support due to loss in residual values Estimate that GMAC’s unsecured credit exposure to GM will amount to $0.4 billion at closing GM to repay certain inter-company borrowings prior to closing GM to paydown residual support and risk sharing obligations on lease assets remaining with GMAC Going forward, GM to pay residual support upfront on new lease assets originated by GMAC Undrawn GMAC $4 billion unsecured credit line to GM, expiring Sept 2006, not planned to be renewed
Slide 14: GMAC Credit Profile GMAC’s credit profile will be improved considerably Consortium and GM to invest $1.9 billion in preferred equity Significant re-investment of earnings over 5 years Substantial reduction in credit exposure to GM Strong independent corporate governance 10-year steady flow of auto financing volume for GMAC
Slide 15: Impact to Credit Rating Transaction expected to achieve rating de-linkage from GM Sale by GM of controlling interest Dramatic reduction in GM exposure Sound governance to protect all GMAC stakeholders Contractual agreement that ensures arm’s length GM-GMAC operating relationship Rating agencies have provided indication that transaction will achieve de-linkage of GMAC credit ratings from those of GM Target stable investment grade rating Fundamentally strong credit profile Need some time to “season” new structure and validate de-linkages with GM
Slide 16: GM/GMAC Strategic Linkage Solid Strategic Linkage Auto financing relationship GMAC exclusive provider of GM’s subvented auto finance programs GMAC relationships with GM dealer network GMAC Customers: Dealer floorplan financing GMAC Sales Force: Auto finance & insurance products “GM Family” customer base Millions of customers for GMAC’s consumer finance products
Slide 17: Next Steps Meet all pre-closing conditions PBGC agreement that GMAC and its subsidiaries will have no liability that could arise from GM’s pension plans No Material Adverse Effect (including a credit rating below CCC for GM’s unsecured long-term debt) Obtain significant number of regulatory approvals Other appropriate conditions, certain legal opinions and approvals Close transaction in Q4-2006
Slide 18: Transaction Benefits Summary - GM Significant liquidity for GM $10 billion upfront $14 billion over 3 years Broad auto financing support for GM GM will benefit from comprehensive wholesale and retail automotive financing to support its vehicle sales globally Ongoing earnings from GM’s 49% equity stake retained in GMAC Expect that minority equity stake in thriving company will generate steadily growing earnings stream Will remain a significant % of GM total earnings
Slide 19: Transaction Benefits Summary - GMAC Strengthened GMAC capital base long-term Preferred equity injection of $1.9 billion Earnings reinvestment provisions Improved GMAC liquidity Committed 3-year $25 billion funding facilities Anticipated access to unsecured markets Significant and steady flow of auto financing revenue Agreement grants GMAC 10-year exclusivity on GM’s subvented auto finance programs Believe transaction will achieve credit rating de-linkage from GM Governance provisions further establishing GMAC independence from GM Cap on unsecured credit exposure to GM Contractual arm’s length agreement governing all GM/GMAC auto financing Consortium committed to a successful GMAC View transaction as ‘strategic” with a long-term investment horizon
Slide 20: GMAC Business Update
Slide 21: Business Outlook -- 2006 Consolidated Results Financing Operations Mortgage Operations Insurance Operations Funding Update
Slide 22: Consolidated Earnings Trend $ millions 3,500 3,000 2,500 2,000 1,500 1,000 500 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2,793 2,913 2,833 * 1,786 1,325 1,241 1,301 920 1,031 1,527 1,602 1,870 % of Income Non-Financing 16% 22% 24% 30% 26% 31% 34% 30% 34% 51% 49% 62% • This is a non-GAAP financial measure. Consolidated earnings on a GAAP basis were $2,394 million, which includes a one-time goodwill impairment charge of $439 million.
Slide 23: Net Income – 2006 First Quarter $ Millions Financing Mortgage Insurance Total 2005 $248 385 95 $728 2006 $313 230 129 $672 2006 Fav/(Unfav) 2005 $65 (155) 34 ($56)
Slide 24: Recent Challenges Credit rating downgraded below investment grade Several additional GM / GMAC rating downgrades incurred GMAC borrowing spreads climbed to unprecedented levels Short-term interest rates trended upward 3-month LIBOR increased by nearly 200 bps Yield curve flattened
Slide 25: Earnings Mix – Business Diversification 2001 2005 * 30% 70% 62% 38% Financing Mortgage / Insurance * Excludes goodwill impairment charge of $439 million
Slide 26: Earnings Mix – Geographic Diversification International Net Income* $ Millions 2001 192 72 9 273 2005 415 270 63 748 ** Compound Annual Growth Rate CAGR** 21% 39% 63% 29% Financing Mortgage Insurance Total * Income outside U.S. and Canada
Slide 27: Insurance Operations Premium / Revenue growing International growth Niche acquisitions Insurance Net Income $ Millions 400 300 200 100 0 2002 2003 417 329 179 87 2004 2005 Favorable loss cost experience Steadily increasing underwriting profits Increasing competitive trends Growing investment portfolio ($ Billions) 12/02 $5.1 12/03 $6.2 12/04 $7.3 12/05 $7.7 Market Value of Investment Portfolio
Slide 28: Mortgage Operations GMAC has maintained strong profitability at its Residential Mortgage Operations despite decline in industry volume and margin pressures Growth in residential market share for 9 consecutive years Increased mortgage servicing income Profitable expansion overseas Stand-alone investment grade rating ResCap Net Income $ Millions 1,200 1,000 800 600 400 200 0 2002 Memo: ($ Trillions) Industry Volume* U.S. Mortgage Debt Outstanding* * Source: Fannie Mae 912 1,021 904 319 2003 3.8 7.1 2004 2.7 8.1 2005 2.9 9.1 2.8 6.3
Slide 29: Financing Operations Funding constrained business Ratings impact competitiveness Upcoming ratings delinkage will benefit costs $ Millions Financing 1,239 1,360 1,476 1,064* 1,600 1,200 800 400 0 2002 2003 Leverage existing relationships to capture opportunities within GM dealer channel Leverage existing dealer relationships to expand presence in non-GM dealer network Continue to expand footprint into new countries 2004 2005 • Excluding after-tax goodwill impairment of $398 million for Commercial Finance
Slide 30: Funding Update
Slide 31: Strong Liquidity Position GMAC continues to have access to large liquidity cushion Cash balance of $22 billion* at March 31, 2006 Over $45 billion of unutilized bank lines and conduit capacity Multi-year committed whole loan facilities with Bank of America and Bank of Nova Scotia with $59 billion of unutilized commitments Arranging incremental credit facilities totaling $25 billion – supported by $12.5 billion Citigroup commitment – to enhance GMAC’s already strong liquidity Committed 3-year revolving facility Asset-backed funding to support SmartLease, wholesale, SmartBuy and other assets that have not been traditionally securitized * Includes $4.8B in cash invested in a portfolio of highly liquid marketable securities
Slide 32: Strong Liquidity Position (cont’d) In March, closed sale of majority interest in GMAC Commercial Mortgage and received $8.8 billion comprised of sale proceeds and repayment of inter-company debt Strong stand-alone ResCap funding capability established ResCap has repaid all inter-company debt to GMAC using proceeds from recent bond transactions Many other innovative funding channels established
Slide 33: 2005 U.S. Term Funding $41 Billion 10% Secured Funding & Whole Loan Sales Unsecured Funding 90% Note: Represents domestic auto finance only
Slide 34: 2005 U.S. Term Funding $41 Billion 10% 42% 35% 13% Unsecured Funding Note: Represents domestic auto finance only Money Market Investors Term Investors Secured Funding & Whole Loan Sales (90%) Whole Loans (10%)
Slide 35: Evolution of U.S. Term Funding 2001 2004 2005 10% 21% 54% 79% 46% 90% $65 Billion Secured Funding & Whole Loan Sales Note: Represents domestic auto finance only $47 Billion $41 Billion Unsecured Funding
Slide 36: Structural Subordination Analysis Asset Coverage Ratio continues to adequately protect unsecured debt holders despite increase in secured funding Although unencumbered assets have declined, asset coverage ratio remains stable-to-higher as unsecured debt levels decline even more rapidly $ Billions 2004 188 169 111% 2005 151 132 115% Q1 2006 140 120 117% 2006 Unencumbered Assets* Unsecured Debt Asset Coverage Ratio Stable-toHigher * Total Assets less [Secured Debt+Other Non-Debt Liabilities+Intangible Assets]
Slide 37: GMAC Funding Plan GMAC’s innovative funding initiatives have reduced its need to rely on unsecured financing With a stable and potentially improving credit rating postclosing, GMAC will opportunistically seek to access the unsecured institutional and retail markets
Slide 38: GMAC Global Liquidity Profile GMAC has access to massive liquidity cushion Two large, multi-year funding agreements: Bank of America (BofA), Bank of Nova Scotia (BNS), with plans for a third $25B facility anchored by Citigroup BofA and BNS commitments for retail assets while the $25B facility includes leases, dealer floor plan, SmartBuy, and other assets not traditionally securitized Continued access to significant amount of bank funding $ billion As of 3/31/06 Cash (1) Committed Flow agreements Proposed Citigroup-led $25B Funding Facility Committed Bank facilities Total Committed Uncommitted Bank facilities Total Note: (1) Including $4.8Bn of marketable securities (2) Utilized/expired Line Size 22 75 25 85 185 9 216 Utilized 0 16 0 39 55 8 63 (2) Unutilized 22 59 25 46 130 1 153
Slide 39: Consolidated Asset and Liability Maturities $ Billions Interest-Earning Assets Interest-Bearing Liabilities 125 104 86 63 77 100 75 50 25 Under 3 months Under 6 months Under 1 year 50 19 56 29 67 44 Under 2 years Under 3 years Note: Includes cash, excludes on-balance sheet secured debt and the related assets, as of March 31, 2006
Slide 40: ResCap Capital Structure GMAC plans to maintain the ResCap firewall to preserve ResCap’s relatively higher credit rating ResCap already enjoys significant access to unsecured liquidity $ Billion (as of 05/16/06) Firewall: Governance and Dividend Limitations Global Debt Issued Global Bank Lines Total 12.4 4.0 16.4
Slide 41: Conclusion Operating metrics for Financing, Mortgage and Insurance remain strong Some margin pressures due to interest rate cycle and competitive trends, but expect to have solid performance in 2006 GM, GMAC and Cerberus led consortium working on speedy closing of 51% sale transaction Target fourth quarter closing Plan to maintain current conservative funding strategy until risks to closing are reduced Following the closing of the 51% sale, GMAC will be even better positioned to execute our business plan under which we will: Support GM vehicle sales with a broad range of auto financing activities Continue to grow all segments of the business Generate a strong return on investment for GMAC’s shareholders
Slide 42: GMAC Strategic Vision Create Premier Global Finance Company GMAC Business Strengths Leadership positions across all major sectors #1 in Auto Finance Top 10 player in Mortgage #1 provider of Extended Warranty #1 provider of Dealer Inventory Insurance Consortium Provided Benefits Stable/Improving credit rating Balance sheet capacity Competitive funding cost Operational expertise Strong independent corporate governance Tremendous asset origination capability World-class servicing Global franchise Well-managed risk profile
Slide 43: Long-Term Outlook Existing Business Strengths Improved Capital Position and Credit Ratings + Long Term Profitable Growth
Slide 44: Q&A

   
Time on Slide Time on Plick
Slides per Visit Slide Views Views by Location