Exhibit 99.2
CAPMARK FINANCIAL GROUP INC.
(“CAPMARK”)
Financial Supplement
SECOND QUARTER 2008
Table of Contents | | Page # |
Notice and Forward-Looking Statement Disclosure | | 2 |
Property Type Diversification | | 3 |
Geographic Diversification | | 4 |
Loan Vintage | | 5 |
Funded Loans and Unfunded Commitments | | 6 |
Weighted Average Loan To Value | | 7 |
Non-Performing Assets | | 8 |
Loan Originations | | 9 |
Adjusted Debt to Adjusted Equity Ratio (Non-GAAP) | | 10 |
Capmark’s Debt Ratings - Long Term and Short Term | | 11 |
Capmark’s Servicer Ratings | | 12 |
Capmark’s Global Servicing Portfolio | | 13 |
Capmark Investments’ Assets Under Management | | 14 |
Notice
All financial information included herein is unaudited.
The information should be read in conjunction with Capmark’s press release announcing its second quarter 2008 financial results issued August 11, 2008. The information in this Financial Supplement speaks as of the respective dates set forth herein and Capmark disclaims any obligation to update this report after such dates.
Forward-Looking Statement Disclosure
Certain statements in this report may constitute forward-looking statements. These statements are based on management’s current expectations and beliefs but are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, among others, adverse changes in debt and capital markets conditions, which may adversely impact Capmark’s access to capital on acceptable terms or the value or salability of our real estate related investments; interest rate and credit spread fluctuations; adverse changes in commercial real estate markets; changes in general economic and business conditions, which will, among other things, affect the amount Capmark may earn on products and services and the availability and credit worthiness of its customers; changes in applicable laws and regulations; risks posed by competition; currency risks and other risks associated with international markets.
Such forward-looking statements are made only as of the date of this release. Capmark expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Capmark’s expectations with regard thereto or changes in events, conditions, or circumstances on which any such statement is based.
####
2
Property Type Diversification - Capmark’s Global Loan Portfolio(1)
Dollars in Millions
| | Property Type Diversification | |
| | December 31, 2005 | | December 31, 2006 | |
Property Type | | Capmark
Bank Loan
Portfolio(2) | | % | | Capmark Non-
Bank Loan
Portfolio | | % | | Capmark Total
Loan Portfolio | | % | | Capmark
Bank Loan
Portfolio(2) | | % | | Capmark Non-
Bank Loan
Portfolio | | % | | Capmark Total
Loan Portfolio | | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Multifamily | | $ | 1,173.6 | | 25.5 | % | $ | 2,167.0 | | 27.3 | % | $ | 3,340.6 | | 26.7 | % | $ | 709.6 | | 20.0 | % | $ | 1,843.0 | | 22.6 | % | $ | 2,552.6 | | 21.8 | % |
Retail | | 727.4 | | 15.8 | | 1,029.0 | | 13.0 | | 1,756.4 | | 14.0 | | 526.3 | | 14.8 | | 1,297.0 | | 15.9 | | 1,823.3 | | 15.6 | |
Office | | 704.7 | | 15.3 | | 1,900.9 | | 24.0 | | 2,605.6 | | 20.8 | | 662.1 | | 18.6 | | 2,298.2 | | 28.2 | | 2,960.3 | | 25.3 | |
Hospitality | | 1,126.3 | | 24.5 | | 788.0 | | 9.9 | | 1,914.3 | | 15.3 | | 741.1 | | 20.9 | | 646.2 | | 7.9 | | 1,387.3 | | 11.8 | |
Healthcare | | 455.7 | | 9.9 | | 984.2 | | 12.4 | | 1,439.9 | | 11.5 | | 568.6 | | 16.0 | | 546.3 | | 6.7 | | 1,114.9 | | 9.5 | |
Mixed-Use(3),(4) | | 407.1 | | 9.0 | | 1,063.4 | | 13.4 | | 1,470.5 | | 11.7 | | 342.9 | | 9.7 | | 1,525.9 | | 18.7 | | 1,868.8 | | 16.0 | |
Other | | | | | | | | | | | | | | | | | | | | | | | | | |
Industrial | | | | | | | | | | | | | | | | | | | | | | | | | |
Land | | | | | | | | | | | | | | | | | | | | | | | | | |
Condominium | | | | See note 4 | | | | | | | | | | | | See note 4 | | | | | | | | | |
Golf Course | | | | | | | | | | | | | | | | | | | | | | | | | |
All Other | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 4,594.8 | | 100.0 | % | $ | 7,932.5 | | 100.0 | % | $ | 12,527.3 | | 100.0 | % | $ | 3,550.6 | | 100.0 | % | $ | 8,156.6 | | 100.0 | % | $ | 11,707.2 | | 100.0 | % |
Dollars in Millions
| | Property Type Diversification | |
| | December 31, 2007 | | June 30, 2008 | |
Property Type | | Capmark
Bank Loan
Portfolio(2) | | % | | Capmark Non-
Bank Loan
Portfolio | | % | | Capmark Total
Loan Portfolio | | % | | Capmark
Bank Loan
Portfolio(2) | | % | | Capmark Non-
Bank Loan
Portfolio | | % | | Capmark Total
Loan Portfolio | | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Multifamily | | $ | 1,326.5 | | 20.6 | % | $ | 1,501.8 | | 18.2 | % | $ | 2,828.3 | | 19.2 | % | $ | 2,032.5 | | 26.3 | % | $ | 1,365.1 | | 23.9 | % | $ | 3,397.6 | | 25.2 | % |
Retail | | 639.1 | | 9.9 | | 2,169.5 | | 26.3 | | 2,808.6 | | 19.1 | | 691.2 | | 8.9 | | 831.3 | | 14.5 | | 1,522.5 | | 11.3 | |
Office | | 1,436.0 | | 22.3 | | 1,616.1 | | 19.6 | | 3,052.1 | | 20.8 | | 1,616.0 | | 20.9 | | 1,110.4 | | 19.4 | | 2,726.4 | | 20.3 | |
Hospitality | | 1,254.5 | | 19.5 | | 303.6 | | 3.7 | | 1,558.1 | | 10.6 | | 1,487.2 | | 19.2 | | 240.8 | | 4.2 | | 1,728.0 | | 12.8 | |
Healthcare | | 1,130.3 | | 17.5 | | 481.4 | | 5.8 | | 1,611.7 | | 11.0 | | 1,187.1 | | 15.4 | | 402.7 | | 7.0 | | 1,589.8 | | 11.8 | |
Mixed-Use(3) | | 101.8 | | 1.6 | | 1,319.5 | | 16.0 | | 1,421.3 | | 9.7 | | 171.7 | | 2.2 | | 726.4 | | 12.7 | | 898.1 | | 6.7 | |
Other | | | | | | | | | | | | | | | | | | | | | | | | | |
Industrial | | 87.6 | | 1.4 | | 123.3 | | 1.5 | | 210.9 | | 1.4 | | 74.9 | | 1.0 | | 111.7 | | 2.0 | | 186.6 | | 1.3 | |
Land | | 139.5 | | 2.2 | | 273.8 | | 3.3 | | 413.3 | | 2.8 | | 127.7 | | 1.7 | | 303.6 | | 5.3 | | 431.3 | | 3.2 | |
Condominium | | 35.1 | | 0.5 | | 198.8 | | 2.4 | | 233.9 | | 1.6 | | 11.1 | | 0.1 | | 165.2 | | 2.9 | | 176.3 | | 1.3 | |
Golf Course | | 274.2 | | 4.3 | | 11.0 | | 0.1 | | 285.2 | | 1.9 | | 288.9 | | 3.7 | | 10.9 | | 0.2 | | 299.8 | | 2.2 | |
All Other | | 24.1 | | 0.2 | | 256.7 | | 3.1 | | 280.8 | | 1.9 | | 55.7 | | 0.6 | | 450.7 | | 7.9 | | 506.4 | | 3.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 6,448.7 | | 100.0 | % | $ | 8,255.5 | | 100.0 | % | $ | 14,704.2 | | 100.0 | % | $ | 7,744.0 | | 100.0 | % | $ | 5,718.8 | | 100.0 | % | $ | 13,462.8 | | 100.0 | % |
| (1) | Capmark’s loan portfolio consists of all loans (held for investment before allowance for loan losses and held for sale) reflected on Capmark’s consolidated balance sheet. |
| (2) | Capmark Bank loans consist only of loans owned by Capmark Bank, our Utah industrial bank subsidiary. |
| (3) | “Mixed-use” consists of loans secured by properties with more than one commercial real estate property type and loans secured by pools of mixed property types. |
| (4) | As of December 31, 2005 and 2006, “Mixed Use” includes the property types included in the “Other” heading. |
3
Geographic Diversification - Capmark’s Global Loan Portfolio (1)
Dollars in Millions
Geographic Diversification
| | December 31, 2005 | |
Location | | Capmark
Bank Loan
Portfolio(2) | | % | | Capmark Non-
Bank Loan
Portfolio | | % | | Capmark
Total Loan
Portfolio | | % | |
| | | | | | | | | | | | | |
Southern California | | $ | 479.0 | | 10.4 | % | $ | 964.0 | | 12.2 | % | $ | 1,443.0 | | 11.5 | % |
Metropolitan New York | | 352.2 | | 7.7 | | 364.7 | | 4.6 | | 716.9 | | 5.7 | |
Washington DC | | 270.3 | | 5.9 | | 287.2 | | 3.6 | | 557.5 | | 4.5 | |
Philadelphia | | 181.8 | | 4.0 | | 245.5 | | 3.1 | | 427.3 | | 3.4 | |
Northern California | | 94.2 | | 2.0 | | 271.0 | | 3.4 | | 365.2 | | 2.9 | |
Orlando | | 240.1 | | 5.2 | | 98.7 | | 1.2 | | 338.8 | | 2.7 | |
Dallas | | 86.1 | | 1.9 | | 175.3 | | 2.2 | | 261.4 | | 2.1 | |
Other - North America | | 2,891.1 | | 62.9 | | 2,938.8 | | 37.0 | | 5,829.9 | | 46.5 | |
Europe | | — | | — | | 1,773.3 | | 22.4 | | 1,773.3 | | 14.2 | |
Asia | | — | | — | | 814.0 | | 10.3 | | 814.0 | | 6.5 | |
| | | | | | | | | | | | | |
Total | | $ | 4,594.8 | | 100.0 | % | $ | 7,932.5 | | 100.0 | % | $ | 12,527.3 | | 100.0 | % |
| | December 31, 2006 | |
Location | | Capmark
Bank Loan
Portfolio(2) | | % | | Capmark Non-
Bank Loan
Portfolio | | % | | Capmark
Total Loan
Portfolio | | % | |
| | | | | | | | | | | | | |
Southern California | | $ | 488.2 | | 13.8 | % | $ | 687.7 | | 8.4 | % | $ | 1,175.9 | | 10.0 | % |
Metropolitan New York | | 147.6 | | 4.2 | | 273.4 | | 3.4 | | 421.0 | | 3.6 | |
Washington DC | | 111.8 | | 3.1 | | 235.7 | | 2.9 | | 347.5 | | 3.0 | |
Boston | | 189.4 | | 5.3 | | 102.0 | | 1.3 | | 291.4 | | 2.5 | |
Phoenix | | 91.9 | | 2.6 | | 194.5 | | 2.4 | | 286.4 | | 2.4 | |
London | | — | | 0.0 | | 276.1 | | 3.4 | | 276.1 | | 2.4 | |
Dallas | | 92.1 | | 2.6 | | 166.5 | | 2.0 | | 258.6 | | 2.2 | |
Other - North America | | 2,429.6 | | 68.4 | | 2,761.6 | | 33.8 | | 5,191.2 | | 44.3 | |
Europe - Other | | — | | — | | 2,547.3 | | 31.2 | | 2,547.3 | | 21.8 | |
Asia | | — | | — | | 911.8 | | 11.2 | | 911.8 | | 7.8 | |
| | | | | | | | | | | | | |
Total | | $ | 3,550.6 | | 100.0 | % | $ | 8,156.6 | | 100.0 | % | $ | 11,707.2 | | 100.0 | % |
Dollars in Millions
Geographic Diversification
| | December 31, 2007 | |
Location | | Capmark
Bank Loan
Portfolio(2) | | % | | Capmark Non-
Bank Loan
Portfolio | | % | | Capmark
Total Loan
Portfolio | | % | |
| | | | | | | | | | | | | |
Southern California | | $ | 618.4 | | 9.6 | % | $ | 547.8 | | 6.6 | % | $ | 1,166.2 | | 7.9 | % |
Metropolitan NY | | 415.9 | | 6.4 | | 255.1 | | 3.1 | | 671.0 | | 4.6 | |
Phoenix | | 266.1 | | 4.1 | | 307.7 | | 3.7 | | 573.8 | | 3.9 | |
Washington DC | | 264.0 | | 4.1 | | 279.3 | | 3.4 | | 543.3 | | 3.7 | |
Dallas | | 308.6 | | 4.8 | | 158.6 | | 1.9 | | 467.2 | | 3.2 | |
Atlanta | | 256.1 | | 4.0 | | 155.4 | | 1.9 | | 411.5 | | 2.8 | |
Philadelphia | | 318.5 | | 4.9 | | 67.0 | | 0.8 | | 385.5 | | 2.6 | |
Other - North America | | 4,001.1 | | 62.1 | | 2,638.1 | | 32.0 | | 6,639.2 | | 45.2 | |
Europe | | — | | — | | 3,036.4 | | 36.8 | | 3,036.4 | | 20.6 | |
Asia | | — | | — | | 810.1 | | 9.8 | | 810.1 | | 5.5 | |
| | | | | | | | | | | | | |
Total | | $ | 6,448.7 | | 100.0 | % | $ | 8,255.5 | | 100.0 | % | $ | 14,704.2 | | 100.0 | % |
| | June 30, 2008 | |
Location | | Capmark
Bank Loan
Portfolio(2) | | % | | Capmark Non-
Bank Loan
Portfolio | | % | | Capmark
Total Loan
Portfolio | | % | |
| | | | | | | | | | | | | |
Southern California | | $ | 626.6 | | 8.1 | % | $ | 568.7 | | 9.9 | % | $ | 1,195.3 | | 8.9 | % |
Metropolitan NY | | 502.5 | | 6.5 | | 238.5 | | 4.2 | | 741.0 | | 5.5 | |
Phoenix | | 313.6 | | 4.0 | | 293.2 | | 5.1 | | 606.8 | | 4.5 | |
Washington DC | | 279.1 | | 3.6 | | 283.6 | | 5.0 | | 562.7 | | 4.2 | |
Dallas | | 388.0 | | 5.0 | | 100.6 | | 1.8 | | 488.6 | | 3.6 | |
San Francisco | | 428.1 | | 5.6 | | 58.1 | | 1.0 | | 486.2 | | 3.6 | |
Atlanta | | 336.0 | | 4.3 | | 122.2 | | 2.1 | | 458.2 | | 3.4 | |
Other - North America (3) | | 4,870.1 | | 62.9 | | 2,287.3 | | 40.0 | | 7,157.4 | | 53.2 | |
Europe | | | | — | | 928.9 | | 16.2 | | 928.9 | | 6.9 | |
Asia | | | | — | | 837.7 | | 14.7 | | 837.7 | | 6.2 | |
| | | | | | | | | | | | | |
Total | | $ | 7,744.0 | | 100.0 | % | $ | 5,718.8 | | 100.0 | % | $ | 13,462.8 | | 100.0 | % |
(1) | | Capmark’s loan portfolio consists of all loans (held for investment before allowance for loan losses and held for sale) reflected on Capmark’s consolidated balance sheet. |
(2) | | Capmark Bank loans consist only of loans owned by Capmark Bank, our Utah industrial bank subsidiary. |
(3) | | No one location represents more than 3.3% of the total portfolio. |
4
Loan Vintage - Capmark’s Global Loan Portfolio (1)
Dollars in Millions
| | Loan Diversification by Origination Vintage | |
Vintage Year | | December 31, 2007 Loan Portfolio (3) | | % | | June 30, 2008
Loan Portfolio (3) | | % | |
| | | | | | | | | |
2008 | | $ | — | | — | % | $ | 1,706.7 | | 12.7 | % |
2007 | | 9,131.0 | | 62.2 | | 7,085.2 | | 52.6 | |
2006 | | 3,697.2 | | 25.1 | | 3,156.4 | | 23.5 | |
2005 | | 1,133.0 | | 7.7 | | 890.7 | | 6.6 | |
2004 | | 202.2 | | 1.4 | | 142.1 | | 1.1 | |
2003 | | 39.7 | | 0.3 | | 31.8 | | 0.2 | |
2002 | | 5.5 | | 0.0 | | 3.5 | | 0.0 | |
2001 | | 59.1 | | 0.4 | | 57.8 | | 0.4 | |
2000 & Prior | | 78.1 | | 0.5 | | 50.7 | | 0.4 | |
Acquired Non-Performing Loans (2) | | 358.4 | | 2.4 | | 337.9 | | 2.5 | |
| | | | | | | | | |
Totals | | $ | 14,704.2 | | 100.0 | % | $ | 13,462.8 | | 100.0 | % |
(1) | Capmark’s loan portfolio consists of all loans (held for investment before allowance for loan losses and held for sale) reflected on Capmark’s consolidated balance sheet. |
(2) | Acquired non-performing loans are not assigned a vintage year. |
(3) | Unpaid principal balance less the amount of any market valuation adjustments and other discounts to carrying value. |
5
Summary of Funded Loans / Unfunded Commitments - Capmark’s Global Loan Portfolio (1)
Dollars in Millions
| | Portfolio as of June 30, 2008 | |
| | Carrying Value (3) | | % of Funded
Total | | Unfunded
Commitment | | Total
Outstanding
Commitment | |
| | | | | | | | | |
Capmark Bank Loans (2) | | | | | | | | | |
Agency | | $ | 790.0 | | 10.2 | % | $ | 66.5 | | $ | 856.5 | |
Construction | | 891.3 | | 11.5 | | 993.2 | | 1,884.5 | |
Property Type (4) | | | | | | | | | |
Office | | 1,531.0 | | 19.8 | | 372.2 | | 1,903.2 | |
Multifamily | | 1,238.3 | | 16.0 | | 130.0 | | 1,368.3 | |
Retail | | 505.4 | | 6.5 | | 84.0 | | 589.4 | |
All Other | | 2,788.0 | | 36.0 | | 99.6 | | 2,887.6 | |
| | | | | | | | | |
Total Capmark Bank Loans | | $ | 7,744.0 | | 100.0 | % | $ | 1,745.5 | | $ | 9,489.5 | |
| | | | | | | | | |
Non-Capmark Bank Loans | | | | | | | | | |
Agency | | $ | 4.1 | | 0.1 | % | $ | — | | $ | 4.1 | |
Construction | | 293.6 | | 5.1 | | 277.9 | | 571.5 | |
Property Type (4) | | | | | | | | | |
Office | | 1,110.5 | | 19.4 | | 155.5 | | 1,266.0 | |
Multifamily | | 1,303.6 | | 22.8 | | 238.8 | | 1,542.4 | |
Retail | | 800.7 | | 14.0 | | 30.1 | | 830.8 | |
All Other | | 2,206.3 | | 38.6 | | 501.0 | | 2,707.3 | |
| | | | | | | | | |
Total Non-Capmark Bank Loans | | $ | 5,718.8 | | 100.0 | % | $ | 1,203.3 | | $ | 6,922.1 | |
| | | | | | | | | |
Total Capmark Loans | | | | | | | | | |
Agency | | $ | 794.1 | | 5.9 | % | $ | 66.5 | | $ | 860.6 | |
Construction | | 1,184.9 | | 8.8 | | 1,271.1 | | 2,456.0 | |
Property Type (4) | | | | | | | | | |
Office | | 2,641.5 | | 19.6 | | 527.7 | | 3,169.2 | |
Multifamily | | 2,541.9 | | 18.9 | | 368.8 | | 2,910.7 | |
Retail | | 1,306.1 | | 9.7 | | 114.1 | | 1,420.2 | |
All Other | | 4,994.3 | | 37.1 | | 600.6 | | 5,594.9 | |
| | | | | | | | | |
Total Capmark Loans | | $ | 13,462.8 | | 100.0 | % | $ | 2,948.8 | | $ | 16,411.6 | |
Dollars in Millions
Loan Portfolio (1) | | Total Unfunded
Commitment | |
| | | |
June 30, 2008 | | $ | 2,948.8 | |
| | | |
March 31, 2008 | | $ | 3,599.9 | |
| | | |
December 31, 2007 | | $ | 3,964.2 | |
(1) | Capmark’s loan portfolio consists of all loans (held for investment before allowance for loan losses and held for sale) reflected on Capmark’s consolidated balance sheet. |
(2) | Capmark Bank loans consist only of loans owned by Capmark Bank, our Utah industrial bank subsidiary. |
(3) | Unpaid principal balance less the amount of any market valuation adjustments and other discounts to carrying value. |
(4) | Property types for Agency and Construction loans are not presented in this table. For more information on property type diversification see page 3. |
6
Weighted Average Loan To Value - Capmark’s Global Loan Portfolio
| | December 31, | | March 31, | | June 30, | |
Loan To Value (LTV) statistics(1) | | 2006 | | 2007 | | 2008 | | 2008 | |
| | | | | | | | | |
WA Loan to Value (%) - Capmark Non-Bank Loan Portfolio | | 70.9 | % | 73.9 | % | 72.3 | % | 68.6 | % |
WA Loan to Value (%) - Capmark Bank Loan Portfolio | | 65.5 | % | 66.2 | % | 65.2 | % | 66.2 | % |
WA Loan to Value (%) - All Loans | | 69.2 | % | 70.4 | % | 68.9 | % | 67.2 | % |
(1) | Collateral values used for determination of weighted average LTV are derived from appraisals at the time of the origination of a loan or any subsequent appraisal ordered and received by Capmark. For property-repositioning and construction financings, the LTV percentages are typically based on the total commitment amount inclusive of future funding and a projected, appraised future stabilized value. |
7
Non-Performing Assets - Capmark’s Global Loan Portfolio
Non-Performing Asset Statistics
Dollars in Millions
| | December 31, | | March 31, | | June 30, | |
Non-Performing Assets (1) | | 2005 | | 2006 | | 2007 | | 2008 | | 2008 | |
| | | | | | | | | | | |
Number of Loans | | 20 | | 21 | | 22 | | 22 | | 22 | |
Gross unpaid principal balance | | $ | 179.6 | | $ | 214.5 | | $ | 259.3 | | $ | 288.8 | | $ | 346.8 | |
Basis adjustments before allowance for loan losses (2) | | (44.9 | ) | (52.6 | ) | (50.9 | ) | (74.1 | ) | (104.9 | ) |
Specifically assigned allowance for loan losses | | (20.9 | ) | (55.5 | ) | (6.9 | ) | (13.4 | ) | (16.0 | ) |
Carrying value | | $ | 113.8 | | $ | 106.4 | | $ | 201.5 | | $ | 201.3 | | $ | 225.9 | |
Ratio of non-performing assets to total loans and foreclosed real estate (3) | | 0.9 | % | 0.9 | % | 1.4 | % | 1.3 | % | 1.7 | % |
Carrying value as a percentage of total assets | | 0.6 | % | 0.5 | % | 0.9 | % | 0.9 | % | 1.1 | % |
Capmark’s historic loss severity on resolved non-performing loans from 2003 through June 30, 2008 was 30.04%.
(1) | Non-performing assets include all originated loans on non-accrual status and foreclosed real estate collateral. Non-performing assets do not include any non-performing loans acquired for investment purposes. |
(2) | Basis adjustments include valuation charges, impacts from pushdown accounting, and other discounts to carrying value. |
(3) | This ratio represents our ‘‘Non-Performing Assets’’ divided by our total loans (performing and non-performing) and real estate acquired through foreclosure on originated loans as of that period. All non-performing assets are assigned and allocated a specific allowance for loan losses. Non-performing assets are reported net of their actual specific reserves. |
8
Loan Origination - Capmark’s Global Loan Portfolio
The following table presents information concerning the volume of loans originated by Capmark by type of lending during the periods indicated.
Loan Origination Statistics
Dollars in Millions
| | Year Ended December 31, | |
| | 2005 | | 2006 | | 2007 | |
Lending Type | | Loan
Commitment
Amount | | % | | Loan
Commitment
Amount | | % | | Loan
Commitment
Amount | | % | |
| | | | | | | | | | | | | |
Capmark Bank (US Only) | | $ | 5,914.0 | | 19.8 | % | $ | 4,962.7 | | 16.6 | % | $ | 8,928.2 | | 30.6 | % |
Capmark Non-Bank(1) | | 10,449.0 | | 35.1 | | 11,904.8 | | 39.9 | | 7,551.3 | | 25.8 | |
GSE and Agency Lending | | 3,347.3 | | 11.2 | | 3,316.5 | | 11.1 | | 5,535.2 | | 18.9 | |
Third-Party | | 10,094.3 | | 33.9 | | 9,681.2 | | 32.4 | | 7,208.2 | | 24.7 | |
| | | | | | | | | | | | | |
Total | | $ | 29,804.6 | | 100.0 | % | $ | 29,865.2 | | 100.0 | % | $ | 29,222.9 | | 100.0 | % |
Dollars in Millions
| | Quarter Ended June 30, | | Year to Date June 30, | |
| | 2007 | | 2008 | | 2007 | | 2008 | |
Lending Type | | Loan
Commitment
Amount | | % | | Loan
Commitment
Amount | | % | | Loan
Commitment
Amount | | % | | Loan
Commitment
Amount | | % | |
| | | | | | | | | | | | | | | | | |
Capmark Bank (US Only) | | $ | 2,841.5 | | 36.5 | % | $ | 423.3 | | 14.9 | % | $ | 5,603.3 | | 33.8 | % | $ | 1,007.9 | | 18.3 | % |
Capmark Non-Bank(1) | | 2,774.5 | | 35.7 | | 30.2 | | 1.1 | | 5,031.9 | | 30.3 | | 229.0 | | 4.1 | |
GSE and Agency Lending | | 673.1 | | 8.7 | | 1,725.9 | | 60.9 | | 2,580.1 | | 15.5 | | 2,977.6 | | 54.0 | |
Third-Party | | 1,483.9 | | 19.1 | | 656.7 | | 23.1 | | 3,378.0 | | 20.4 | | 1,302.9 | | 23.6 | |
| | | | | | | | | | | | | | | | | |
Total | | $ | 7,773.0 | | 100.0 | % | $ | 2,836.1 | | 100.0 | % | $ | 16,593.3 | | 100.0 | % | $ | 5,517.4 | | 100.0 | % |
(1) Capmark non-bank includes all Capmark loan originations other than loans categorized as GSE and Agency Lending and originations by Capmark Bank, our Utah industrial bank subsidiary.
9
Adjusted Debt To Adjusted Equity Ratio (Non-GAAP)
Consolidated Financial Statements
Dollars in Millions
| | December 31, | | March 31, | | June 30, | |
| | 2005 | | 2006 | | 2007 | | 2008 | | 2008 | |
Adjusted Non-GAAP Debt to Equity Ratio Components | | | | | | | | | | | |
| | | | | | | | | | | |
Total indebtedness (GAAP) | | $ | 15,788 | | $ | 15,276 | | $ | 17,693 | | $ | 18,555 | | $ | 16,520 | |
Less: | | | | | | | | | | | |
Junior subordinated debentures | | — | | 250 | | 250 | | 250 | | 250 | |
Collateralized borrowings in securitization trusts | | 1,232 | | 1,477 | | 261 | | 262 | | 256 | |
Consolidated LIHTC partnership debt | | 196 | | 324 | | 336 | | 302 | | 227 | |
Adjusted debt (Non-GAAP) | | $ | 14,360 | | $ | 13,225 | | $ | 16,846 | | $ | 17,741 | | $ | 15,787 | |
| | | | | | | | | | | |
Total stockholders’ equity (GAAP) | | $ | 1,997 | | $ | 2,229 | | $ | 2,507 | | $ | 2,280 | | $ | 2,287 | |
Plus: | | | | | | | | | | | |
Trust preferred securities | | — | | 250 | | 250 | | 250 | | 250 | |
Mezzanine equity | | — | | 102 | | 102 | | 101 | | 96 | |
Adjusted equity (Non-GAAP) | | $ | 1,997 | | $ | 2,581 | | $ | 2,859 | | $ | 2,631 | | $ | 2,633 | |
| | | | | | | | | | | |
Debt to equity ratio (GAAP) | | 7.9 | x | 6.9 | x | 7.1 | x | 8.1 | x | 7.2 | x |
Adjusted debt to adjusted equity ratio (Non-GAAP) | | 7.2 | x | 5.1 | x | 5.9 | x | 6.7 | x | 6.0 | x |
Our ratio of adjusted debt to adjusted equity is a non-GAAP financial measure that our management uses to evaluate the degree of financial leverage present in our capital structure. Our measure may not be comparable to measurements used by other companies,
including other finance companies, and should not be considered as a substitute for, or an alternative to, a ratio of total indebtedness to total stockholders’ equity calculated on a GAAP basis. Our GAAP debt to equity ratio is the ratio of our total indebtedness to total stockholders’ equity.
In calculating adjusted debt for purposes of this non-GAAP ratio, we adjust GAAP total indebtedness to reflect the exclusion of the
junior subordinated debentures underlying the trust preferred securities issued by Capmark Trust and the portion of our indebtedness
relating to securitization transactions and indebtedness related to certain Low Income Housing Tax Credit (LIHTC) partnership interests, which is required to be consolidated under GAAP but is not considered to be indebtedness under our senior credit facilities.
In calculating adjusted equity for purposes of this non-GAAP ratio, we adjust GAAP total stockholders’ equity to reflect the inclusion of the trust preferred securities issued by Capmark Trust and the mezzanine equity we issued to our employees and directors, which are commonly considered by investors and rating agencies to be components of equity.
10
Capmark’s Debt Ratings - Long Term And Short Term
The following table presents the credit ratings and ratings outlook assigned to our unsecured indebtedness by Moody’s, S&P and Fitch as of the date of this report. Credit ratings are opinions of a rated entity’s ability to meet its ongoing obligations. Credit ratings are not recommendations to buy, sell or hold securities and are subject to revision or withdrawal at any time by the assigning rating agency. Each agency’s rating should be evaluated independently of any other agency’s rating.
Ratings as of August 11, 2008
Long-Term Senior Unsecured Debt Ratings
| | Rating | | Outlook |
| | | | |
Standard & Poor’s | | BBB- | | Stable |
| | | | |
Moody’s | | Baa3 | | Stable |
| | | | |
Fitch Ratings | | BBB | | Stable |
Short-Term Senior Unsecured Debt Ratings
| | Rating | | Outlook |
| | | | |
Standard & Poor’s | | A3 | | Stable |
| | | | |
Moody’s (1) | | — | | — |
| | | | |
Fitch Ratings | | F3 | | Stable |
(1) Moody’s does not rate our short term senior unsecured debt
11
Capmark’s Servicer Ratings
Ratings as of August 11, 2008
U.S. primary servicing | | | | UK / Ireland primary/master servicing | | |
| | | | | | |
(1) Standard & Poor’s | | Strong | | (1) Standard & Poor’s | | Strong |
| | | | | | |
(2) Fitch Ratings | | CPS1- | | (2) Fitch Ratings | | CPS1- |
| | | | | | |
(3) DBRS | | Superior | | (3) DBRS | | Superior |
| | | | | | |
U.S. master servicing | | | | UK / Ireland special servicing | | |
| | | | | | |
(1) Standard & Poor’s | | Strong | | (1) Standard & Poor’s | | Strong |
| | | | | | |
(2) Fitch Ratings | | CMS1- | | (2) Fitch Ratings | | CSS2+ |
| | | | | | |
(3) DBRS | | Superior | | (3) DBRS | | Not Rated |
| | | | | | |
U.S. special servicing | | | | | | |
| | | | | | |
(1) Standard & Poor’s | | Strong | | | | |
| | | | | | |
(2) Fitch Ratings | | CSS1 | | | | |
| | | | | | |
(3) DBRS | | Not Rated | | | | |
(1) “Strong” is the highest of five ratings given by S&P to servicing companies.
(2) Companies with a level “1” rating, the highest category of rating given a servicer of a commercial real estate transaction by Fitch, are expected to have all areas of their company operating at “top efficiency and productivity” and must have “proven abilities and performance of the highest standards.”
(3) “Superior” is the highest of four ratings given by DBRS to servicing companies.
12
Capmark’s Global Servicing Portfolio
Dollars in Millions
| | December 31, | |
Servicing Portfolio | | 2005 | | 2006 | | 2007 | |
| | # of Loans | | UPB | | # of Loans | | UPB | | # of Loans | | UPB | |
Master / Primary / Special | | 15,515 | | $ | 62,318 | | 13,881 | | $ | 57,888 | | 12,797 | | $ | 75,779 | |
Master / Primary | | 38,376 | | 168,342 | | 38,716 | | 215,400 | | 37,381 | | 261,175 | |
Special | | 6,103 | | 45,310 | | 5,529 | | 37,620 | | 4,994 | | 34,776 | |
| | | | | | | | | | | | | |
Total | | 59,994 | | $ | 275,970 | | 58,126 | | $ | 310,908 | | 55,172 | | $ | 371,730 | |
| | | | | | | | | | | | | |
Originated | | 8,987 | | $ | 68,338 | | 9,551 | | $ | 80,290 | | 9,514 | | $ | 91,927 | |
Acquired | | 29,307 | | 166,702 | | 28,540 | | 187,536 | | 27,100 | | 234,163 | |
Contracted | | 21,700 | | 40,930 | | 20,035 | | 43,082 | | 18,558 | | 45,640 | |
| | | | | | | | | | | | | |
Total | | 59,994 | | $ | 275,970 | | 58,126 | | $ | 310,908 | | 55,172 | | $ | 371,730 | |
Dollars in Millions
| | June 30, | |
Servicing Portfolio | | 2007 | | 2008 | |
| | # of Loans | | UPB | | # of Loans | | UPB | |
Master / Primary / Special | | 12,851 | | $ | 57,451 | | 11,916 | | $ | 78,557 | |
Master / Primary | | 39,691 | | 256,778 | | 36,132 | | 262,154 | |
Special | | 5,279 | | 36,356 | | 4,665 | | 32,482 | |
| | | | | | | | | |
Total | | 57,821 | | $ | 350,585 | | 52,713 | | $ | 373,193 | |
| | | | | | | | | |
Originated | | 9,568 | | $ | 88,056 | | 9,550 | | $ | 92,769 | |
Acquired | | 28,591 | | 219,420 | | 24,848 | | 229,256 | |
Contracted | | 19,662 | | 43,109 | | 18,315 | | 51,168 | |
| | | | | | | | | |
Total | | 57,821 | | $ | 350,585 | | 52,713 | | $ | 373,193 | |
13
Capmark Investments’ Assets Under Management
Dollars in Millions (1)
| | December 31, | | June 30, | |
| | 2005 | | 2006 | | 2007 | | 2008 | |
| | | | | | | | | |
Proprietary Investments: | | | | | | | | | |
Real estate equity | | $ | 398.8 | | $ | 232.1 | | $ | 191.8 | | $ | 174.5 | |
CMBS: below investment grade | | 192.0 | | 224.7 | | 76.5 | | 59.0 | |
CMBS: investment grade | | 22.4 | | 19.3 | | 8.8 | | 2.0 | |
ABS | | — | | 34.4 | | 2.6 | | 0.5 | |
Whole loans | | 122.0 | | 48.2 | | 47.5 | | 49.1 | |
Mezzanine debt | | — | | — | | 64.4 | | 79.2 | |
Commercial discount loans | | — | | — | | 5.5 | | 4.0 | |
CDOs | | 124.6 | | 65.9 | | 66.9 | | 52.9 | |
Funds invested in real estate equity | | 191.3 | | 286.1 | | 422.2 | | 439.7 | |
Funds invested in real estate debt instruments | | 39.9 | | 78.9 | | 100.1 | | 100.6 | |
| | | | | | | | | |
Subtotal Proprietary Investments | | 1,091.0 | | 989.6 | | 986.3 | | 961.5 | |
| | | | | | | | | |
Third Party Investments | | 8,624.1 | | 8,799.3 | | 9,328.2 | | 9,092.1 | |
| | | | | | | | | |
Total Assets Under Management | | $ | 9,715.1 | | $ | 9,788.9 | | $ | 10,314.5 | | $ | 10,053.6 | |
| | | | | | | | | |
Number of Clients | | 41 | | 33 | | 35 | | 34 | |
| | | | | | | | | |
Total market value of proprietary investments with RMBS exposure | | | | | | $ | 95.0 | | $ | 76.6 | |
(1) Amounts are subject to change based on the receipt of financial information for the underlying investments subsequent to the completion of the financial reports for the applicable period.
14
