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Contact GMAC Investor Relations at (866) 710-4623 or [email protected]
FINANCIAL UPDATE
MAY 15, 2007
SANJIV KHATTRI
EXECUTIVE VICE PRESIDENT &CHIEF FINANCIAL OFFICER
1
Forward Looking StatementsIn 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,” “pursue,” “seek,” “may,” “would,” “could,” “should,” “believe,” “potential,” “continue,” or 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, these statements are not guarantees of any events or financial results, and GMAC’s actual results may differ materially due to numerous important factors that are described in the most recent reports on SEC Form 10-K for GMAC and Residential Capital, LLC (“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: securing low cost funding to sustain growth for GMAC and ResCap and maintaining the mutually beneficial relationship between GMAC and General Motors Corporation (“GM”); our ability to maintain an appropriate level of debt; the profitability and financial condition of GM; restrictions on ResCap’s ability to pay dividends to us; recent developments in the residential mortgage market, especially in the nonprime sector; changes in the residual value of off-lease vehicles; the impact on ResCap of the continuing 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; changes in our contractual servicing rights; costs and risks associated with litigation; 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 or GM; 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 except where expressly required by law. A reconciliation of certain non-GAAP financial measures included within this presentation is provided in the supplemental charts.
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.
2
Overview
Performance Summary
Funding
Update on Canada
Strategic Overview
2007 Outlook & Summary
Q&A
Performance Summary
4
2007 – First Quarter Performance Highlights1Q 2007 net loss of ($305) million compared to net income of $495 million for 1Q 2006Pressures in the U.S. residential mortgage market remained high throughout the quarter― Slowing home price appreciation has impacted valuations― Nonprime credit has weakened significantly― Prevailing market environment has depressed loan valuations
Strong operating performance at Auto Finance in the quarter― Improved margins with new vehicle originations in line with year-ago levels― Significantly increased used vehicle originations
Insurance reported yet another quarter of strong earnings with robust underwriting results― Favorable loss experience compared to year-ago levels
GMAC and ResCap maintain strong liquidity positions― Cash and marketable securities totaled $12.8 billion at the end of 1Q― $1.0 billion common equity injected by GM, based on final settlement provisions of
the GMAC sale transaction
5
First Quarter Net Income
* 1Q 2007 includes 21% ownership of our former Commercial Mortgage unit; 1Q 2006 includes 100% ownership through March 23, 2006, sale date and 21% ownership thereafter
($ millions) 1Q 2007 1Q 2006 ChangeGlobal Automotive Finance $396 $186 $210ResCap (910) 201 (1,111)Insurance 143 129 14Other* 66 (21) 87Net Income ($305) $495 ($800)
6
($ millions) 1Q 2007 1Q 2006 ChangeGlobal Automotive Finance $436 $268 $168ResCap (851) 339 (1,190)Insurance 191 186 5Other* 69 (76) 145Pre-tax income (155) 717 (872)Taxes (150) (222) 72Net Income ($305) $495 ($800)
First Quarter Pre-Tax Income
* 1Q 2007 includes 21% ownership of our former Commercial Mortgage unit; 1Q 2006 includes 100% ownership through March 23, 2006, sale date and 21% ownership thereafter
A number of GMAC’s U.S. entities converted to limited liability companies (LLC) in conjunction with the transaction to sell a controlling interest in the company last year
7
ResCap is diversified across most sectors of the residential mortgage market― Well positioned to capitalize on market opportunities across the mortgage
spectrumResCap has obtained separate investment grade credit ratings as an independent finance subsidiary of GMAC from all four rating agencies
Diversified Mortgage Enterprise
8
2006 – Negative nonprime valuation1Q 07 – Reduced exposure to higher risk loans
2006 – Increase in loan loss provisions on nonprime1Q 07 – Credit pressure remains as nonprime portfolio runs-off
2006 – Nonprime credit issues in warehouse lending1Q 07 – Increased provisions for nonprime warehouse lending
2006 – Increased origination volumes1Q 07 – Continued strong performance and residual risk was reduced
ResCap – Key Metrics2006 1Q 07
Moving(Securitization/Sales)
Storage(HFI/Servicing)
Warehouse Lending(Lending Receivables)
Business Capital(Lending Receivables)
International
2006 & 1Q 07 – Solid 2006 earnings due to sale of home builder, but weakness among certain other home builders
9
Warehouse Lending ReceivablesTotal: $6.5B
ResCap – Nonprime Loan RiskRelative nonprime loan exposure varies on balance sheet as does its risk
Loan Servicing PortfolioTotal: $452.9B
Nonprime
Prime
16%
Held For InvestmentTotal: $65.3B
Held For SaleTotal: $22.0B
As of 3/31/2007
18%
23% 73%
10
RFG HFS Portfolio Residual RiskTotal 1Q 2007 sales were $29.9 billion― $16.0 billion of total sales were issued through public securitization:
$11.5 billion – ResCap did not retain any risk $1.0 billion in prime assets were issued - ResCap retained $34 million in residuals $2.3 billion in nonprime assets were issued - ResCap retained $79.2 million in residuals $1.2 billion was issued - ResCap retained $31.4 million in subordinate risk
Closely monitoring market conditions and marking residual position monthly at conservative prices― Objective is still to sell when/if reasonable
1Q 2007 Distribution of $29.9 billion
Agency $9.8B
Non-Agency Public Securitizations
$16.0B
Private $0.3B
Non-Agency Whole Loans $3.7B
33%54%
1%
12%
11
U.S. HFI Nonprime Portfolio
20%
14% 9%
34%
23%
2002 2003 2004 2005 2006
U.S. Nonprime HFI Reduction In 1Q 07 Totaled $4.5 billion
U.S. nonprime HFI portfolio decreased $4.5 billion to $45.0 billion at 03/31/07― 2005 and 2006 vintages represented 54% of runoff
On target to achieve $20 billion reduction in nonprime HFI in 2007 ― Run-off expected to generate over $1 billion of cash
12
0.2%0.2% 0.2%
0.1%0.2%
0.2%0.3%
0.3% 0.3%
1Q '05
2Q'05
3Q'05
4Q'05
1Q'06
2Q'06
3Q'06
4Q'06
1Q'07
9.2% 9.1% 9.2% 9.0%8.4% 8.3%
9.2%
10.5%
11.9%
1Q '05
2Q'05
3Q'05
4Q'05
1Q'06
2Q'06
3Q'06
4Q'06
1Q'07
ResCap – Held for Investment Portfolio - Credit Quality
Asset quality weaker due to continuing slow housing market and stress in nonprime mortgage market
Nonprime assets continue to drive increase in delinquencies and nonaccruals
Slowing of home price appreciation increased severity of losses
Allowance for loan losses increased to 2.54% at 3/31/2007 from 2.17% at 12/31/2006 for the HFI portfolio
Much of portfolio is securitized –ResCap net exposure limited to $1.2 billion first loss position at 3/31/3007 compared to $1.6 billion at YE 2006
* MLHFI – Mortgage Loans Held for Investment. The total MLHFI is $65.3 billion for quarter ended 3/31/2007, $69.4 billion for 2006 & $69.0 billion for 2005 and is included in the balance sheet under the caption "Finance receivables and loans, net of unearned income"
Nonaccrual Loans as a % of total MLHFI *
Net charge-offs as a % of total MLHFI *
13
0.00% 0.02% 0.00% 0.03% 0.00% 0.03% 0.00% 0.02%
0.38%
1Q '05
2Q'05
3Q'05
4Q'05
1Q'06
2Q'06
3Q'06
4Q'06
1Q'07
0.05% 0.12% 0.08% 0.50% 0.41% 0.24% 0.21%
9.29%10.94%
1Q '05
2Q'05
3Q'05
4Q'05
1Q'06
2Q'06
3Q'06
4Q'06
1Q'07
ResCap – Lending Receivables Portfolio - Credit Quality
Net charge-offs as a % of total lending receivables
Nonaccrual Assets as a % of total lending receivables
Continued asset quality weakness due to severe stress with some nonprime counterparties
Allowance for loan losses increased to 4.06% at 3/31/2007 from 2.66% at 12/31/2006 for lending receivables
Warehouse receivables represented $6.5 billion of lending receivables with only 15% supported with nonprime collateral on 3/31/2007
Nonprime warehouse receivables reduced by $1.2B or 50% in 1Q 2007
Total lending receivables are $12.9 billion for quarter ended 3/31/2007, $14.9 billion for 2006 & $13.6 billion for 2005 and are included in the balance sheet under the caption “Finance receivables and loans, net of unearned income”
14
ResCap – Business Capital
Business Capital’s operating earnings were flat despite continued weakness in the home building industry
— Residential real estate market remains challenging for our customers
— Diversified presence across borrowers, geographies and products
Bolstering risk mitigation efforts
— Raising standards for new transactions/reduced volume
— Pursuing opportunities to reduce risk exposures in whole or in part
— Increased account monitoring activities
— Increasing proportion of secured borrowing
Business Capital is a world class franchise in the building space, with long-term mutually beneficial relationships
Also continue to grow businesses not directed at residential construction
— Health Capital
— Resort Finance
15
ResCap – International
Year-over-year improvement largely driven by increased gain on sale volume sold
— Challenging competition reduced expected loan production but up year-over-year
U.K. market continued to show strong appetite for assets, generating favorable margins on whole loan sales
— Favorable capital market conditions allowed International to sell a larger risk position
First residual sale in Latin America
Continued expansion through new operations, new relationships and strategic investments
— Increase market share in existing countries
— New country development and builder lending to support long-term earnings growth
16
ResCap - Recent Changes in U.S. Underwriting and Servicing
Tightened underwriting standards for consumer loans in a number of areas— Nonprime and Alt-A mortgages
— Second liens and home equity loans
Refocused warehouse lending strategy— Targeting relationship-oriented clients— Stricter adherence to margin and document requirements
Implemented targeted loss mitigation strategies to reduce both frequency and severity
— Performing special targeting of certain asset populations
Modifications
Repayment plans
Foreclosure alternatives
Enhanced enterprise risk management efforts— Revamped credit risk management
— Created workout team for warehouse lending and implemented more rigorous collateral valuation process
17
ResCap – Liquidity
Cash balance of $2.6 billion at the end of 1Q 07, up $600 million from YE 2006
Ended 1Q with $7.2 billion in equity (includes $500 million March capital contribution)― Additional $500 million capital contribution made in April
Only $1.3 billion unsecured debt maturities in 2007
Strong levels of contingent liquidity available— Executed $2.2 billion in new committed funding facilities in the quarter
Anticipate continued good access to global markets
($ in billions) 03/31/07Cash and Cash Equivalents $2.6Unused Bank Facilities 8.6Unused Conduit Capacity 56.3Unused Whole Loan Facilities 4.6Total Available Liquidity $72.1
18
ResCap – Capital StrategyGMAC committed an incremental $1 billion to maintain a strong capital position at ResCap to support investment grade rating― Injected $500 million of equity in 1Q 07 and an additional $500 million in April
Restore ResCap’s equity base to levels above YE 2005/YE 2006
Align ResCap’s capital position with economic capital requirements
GMAC remains very committed to ResCap long-term
YE YE
Common Equity
* Prior to April 2007 $500 million capital injection
$7.5 $7.6 $7.2*
($ billions) 2005 2006 3/31/07
$2.6$2.3 $2.0Cash and Cash Equivalents
19
ResCap - 2007 OutlookWeak financial performance in 1Q 07 largely driven by deterioration in the nonprime market
— Profits from international and business capital operations overshadowed by disappointing U.S. mortgage performance
— Multiple actions underway to mitigate risk and improve controls
New management team with significant mortgage experience
Current capitalization and liquidity are ample
— Should real estate market pressures continue, ResCap has significant liquidity to operate throughout the cycle
Anticipate considerable improvement in 2Q financial performance,with losses in U.S. residential mortgage at a much reduced level
Diverse earnings base coupled with strong origination and servicing platforms should drive longer-term earnings growth
20
Strong lease and retail originationsOriginations
Credit Losses
Lease Residuals
Margins
Auto Finance – Key Metrics
Credit losses trending up but remain at expected levels
2006 – U.S. residuals down slightly, reflecting weaker used car prices in 2H
1Q 07 - U.S. residual performance improved, reflecting higher sales proceeds supported by stable used car prices
Improved NAO margins more than offset margins at IO which remain under pressure
2006 1Q 07
21
Auto Finance – Consumer Originations
($ billions)
Total Units 603 627 817 528 624(in 000s)
$12$13
$19
$11$12
$2.1$1.4$1.4$1.4$1.5
1Q '06 2Q '06 3Q '06 4Q '06 1Q '07
New
Used
1Q 2007 new vehicle originations in line with 2006 levels despite lower retail volumes at GM
— Significant increase in used vehicle originations consistent with growth strategy
22
Auto Finance – Consumer Credit Quality
1Q 2007 delinquency up slightly versus year-ago levels. Performance remains near historically low levels
Annualized credit losses as a % of average managed retail contracts
Delinquencies as a % of serviced retail assets30 days or more past due
Losses remain near historically low levels
2.16%2.06%
2.34% 2.40%2.21% 2.27%
2.47% 2.41%2.33%
1Q'05
2Q'05
3Q'05
4Q'05
1Q'06
2Q'06
3Q'06
4Q'06
1Q'07
0.95% 0.91%1.09% 0.96% 1.11%
0.95%1.12% 1.22% 1.14%
1Q'05
2Q'05
3Q'05
4Q'05
1Q'06
2Q'06
3Q'06
4Q'06
1Q'07
23
Auto Finance – NonprimeNonprime auto market has not experienced the pressures affectingthe nonprime mortgage industry
― Historically, leading indicators for deterioration in nonprime auto credit performance have been rising interest rates or rising unemployment – neither one a factor to date
GMAC's exposure to nearprime and nonprime auto loans is limited
― Less than 15% of U.S. serviced consumer asset base is considered nonprime or nearprime using traditional credit bureau scores
2006 and early 2007 retail auto delinquencies above 2005 levels but in line with expectations and broader industry experience
Other factors that distinguish nonprime auto from nonprime mortgage
― No floating rate or option arm equivalent
― Loan pricing reflects depreciating characteristic of the asset
— Consistent underwriting and credit-scoring criteria
24
2006 – Flat despite decline in GM retail volume and increased competition in U.S. personal lines
1Q 07 – Growth in reinsurance and international markets offset by declines in vehicle service contracts and personal lines
Written Revenue*
Underwriting Results
InvestmentIncome
Insurance – Key Metrics
Strong results driven by higher earned premiums and lower loss experience
2006 – Rebalanced investment portfolio to reduce capital requirements
1Q 07 – Increase in the amount of fixed income assets in the portfolio from 68% to 92%
2006 1Q 07
* Includes Written Premium
25
Insurance – Consolidated Earnings
Favorable underlying core earnings trend continues
1. Core Earnings = Underwriting income + Investment income (net of tax)2. Represents a post tax number, pre-tax capital gains was $4 for 2007 and $29 for 20063. Represents a post tax number, pre-tax interest expense was $4 for 2007 and $12 for 20064. Combined Ratio = Sum of all reported losses and expenses (excluding interest and income tax expense) divided by the total of
premiums and service revenues earned and other income
($ millions) 1Q 2007 1Q 2006 Change
Core Earnings1 $143 $118 $25
Capital Gains2 3 19 (16)Interest Expense3 (3) (8) 5
Net Income $143 $129 $14
Combined Ratio4 91.0% 91.3%
26
GMAC Insurance has reached an agreement to purchase U.K.-based Provident Insurance
― Leading automotive insurer with a strong management team
― The acquisition will complement GMAC's existing U.K. insurance operations and support European growth initiatives
Acquisition will be financed with capital available within GMACI
― Purchase price is GBP 170 million (approx. $340 million)
Assuming no regulatory hurdles, transaction is expected to close in 2Q 07
Important “bolt-on” acquisition consistent with GMAC growth and diversification strategy
Insurance – Provident Insurance Acquisition
Funding
28
03/31/07Cash and Marketable Securities* $13Unused Bank Facilities 31Unused Conduit Capacity 86Unused Whole Loan Facility 44Total Available Liquidity $174
GMAC and ResCap maintain strong liquidity position
― Cash levels down primarily due to significant debt maturities in 1Q 2007
― Completed $6 billion bridge funding facility to provide added liquidity protection for older wholesale securitizations
― Received $1 billion equity injection from GM based on final settlement provisions of the GMAC sale transaction
GMAC and ResCap will continue to balance prudent liquidity management with reductions in cost of borrowing
Global Liquidity
($ billions)
* Includes $3 billion cash invested in a portfolio of highly liquid marketable securities
29
Global Debt Maturities
Staggered maturity profile minimizes refinancing risks
― Significant debt outstanding beyond 5 years provides flexibility
Scheduled Maturity Of Long-Term Debt At 12/31/2006
UnsecuredSecured
$13.6 $12.4 $6.4 $2.1 $1.6
$55.2$28.1$22.8 $16.6
$11.1$7.9 $13.3
$27.9
$16.7
2006 2007 2008 2009 2010 2011 2012 andthereafter
$83.1
$35.2 $33.3
$17.5$10.0 $14.9
$41.7
($ billions)
30
47%
3% 6%
44%
0% 10%
63%
25%
14%
21%0%
65%
Asset Backed Securities
Institutional Unsecured
Whole Loan Sales
Retail
2001$65B
2005$41B
2006$32B
Unsecured share of funding likely to increase going forward
Institutional Assets: Retail Private TransactionsRetail Lease Syndicated Transactions
Wholesale Committed Flow AgreementsNon-Traditional Assets Full Securitizations
(Nuvell, GMACCF)
Markets: ABCP - NCATABCP - Multi-Seller
Bank ConduitsTerm Securitizations
WHOLE LOANSSECURITIZATIONUNSECURED
Diversified U.S. Auto Term Funding
31
2007 Funding Plan
Maintain appropriate liquidity cushion
― Significant cash balances and committed liquidity facilities
― Extensive auto loan assets that can be monetized quickly (“dry powder”)
― Laddering of debt with moderate near-term maturities
Reduce all-in cost of borrowings
― Active liability management to reduce cost of high-coupon debt
― Continue to diversify unsecured funding across markets and currencies
― Further expand securitization programs
― Expand GMAC Bank funding
Project level of funding in 2007 to be consistent with 2005-2006
Update on Canada
33
GMACCL Retail Auto Loans – Credit Quality
General Motors Acceptance Corporation of Canada, Limited is the largest Canadian auto finance company with assets of approximately C$21 billion at 12/31/2006
Delinquencies remain at historically low levels
2006 2002-2005Average Daily Delinquency >30 Past Due* 0.61% 0.63%Net Losses* 0.22% 0.21%
* As a % of average retail contracts outstanding
34
GMACCL Funding Profile Diverse Funding Sources
― Domestic Medium Term Notes & Bonds*
― Euro Medium Term Notes & Bonds*
― Commercial Paper*
― Public Term Asset Backed Securities
― Multi-Seller Bank Conduits
(C$ billions) 12/31/2006 12/31/2005Unsecured 7.2 10.0Secured 9.8 6.4
Total 17.0 16.4
* GMACCL’s unsecured debt is fully guaranteed by GMAC LLC
Outstanding Debt
35
GMACCL – 2007 Funding Plan
Resume Continuous MTN Issuance Program
Syndicated domestic MTN’s from time to time
Periodically access the Public Term ABS market
Opportunistically issue long term unsecured debt in international markets
GMACStrategic Overview
37
Automotive Finance InsuranceResCap
GMAC
Other
North American Auto
International Auto
MIC
Personal Lines
Commercial Finance Group
Equity interest in Capmark*
* Minority equity interest in Capmark. In March 2006, we closed the sale of approximately 78% of our equity in Capmark (formerly GMAC Commercial Mortgage)
Residential Finance
Business Capital
International
GMAC Financial Services
GMAC is a diversified global financial services company
38
With the growth in our mortgage and insurance operations, our auto finance earnings now represent less than half of GMAC’s net income― Very different than a few years ago when GMAC was predominantly an auto
finance company
81%
15%4%
5%
39%
56%
38%
44%
18%
Auto Finance ResCap
2005$2.7B1
2006$2.0B1,2
Insurance
2002$2.2B1
1 Operating earnings figures include “Other” business segment. However, the graphical representations exclude “Other” business segment2 Includes insurance investment portfolio rebalancing gains of $568 million in 2006.
Operating Earnings Mix – Business Diversification
39
Gross Revenue – Business Diversification
Notably strong growth in diversified revenues with about 50% of revenue being contributed by our mortgage and insurance operations
70%
14%
12% 4%
52%
30%
16%2%
Gross revenue reflects gross financing revenue plus insurance premiums and service revenue plus mortgage banking income plus investment income and other income. Gross revenue is not net of interest and discount expense and provision for credit losses
56%26%
13%5%
2005$33.3B
2006$35.7B
2002$24.5B
Auto Finance ResCap Insurance Other
40
Cerberus led
InvestorConsortium
The Transaction
51% Equity49% Equity
41
New GMACWith the closing of the GMAC sale transaction, GMAC has emerged as an independent company with an improved credit profile
― Strengthened capital position
De-linkage from GM rating
New $2.1 billion (face) layer of preferred equity injected
$1 billion GM equity contribution in March 2007
― Dividend restrictions
Essentially all 2007-2008 “after-tax earnings” to be retained by GMAC
― Pursuing global operating efficiencies
― More diversified business strategies
GMAC Strategic Focus
― Transform GMAC from a captive operation into an independent globally-diversified financial services company
42
Strategic Priorities
Implement changes to U.S. mortgage operations to address deteriorating non-prime market environment
― Position business to grow again as industry consolidates
Diversify operations beyond GM-related businesses
― Leverage existing dealer relationship to expand presence beyond GM dealer network
Continue profitable expansion overseas
― Capitalize on uniquely broad footprint and extensive experience in international markets
Maintain appropriate liquidity cushion and reduce all-in cost of borrowings
43
Strategic Priorities (Continued…)
Grow GMAC fee-based businesses (e.g., SmartAuction, Fee for Servicing, etc.)
― Generates cashflow with virtually no strain on capital position
Capitalize on cross-sell opportunities across GMAC’s 18 million customers
― Sell more products per customer
― Reduce asset acquisition cost
Attack cost side of the business by aligning resources more efficiently across multiple operations and regions
Maintain asset quality
― Further strengthen credit measures and historically strong credit culture across all major businesses
44
Priority Equity Holder Initiatives
• Bolster Capital Base• Enhance Liquidity • Strengthen Credit Measures
Aligned Interests
• Provides SignificantProtection to Unsecured Bondholders
• Drives Equity Holder Returns
• Reduce Borrowing Costs• Expand Net Margins • Increase Net Income
VALUE PLAY
New GMAC - Symmetry Of Shareholder / Bondholder Interest
2007 Outlook & Summary
46
2007 Outlook
Continuing pressures at ResCap likely to constrain overall GMAC results near term
Highest priority is implementing changes at ResCap to address rapidly changing mortgage market
Anticipate considerable improvement in 2Q financial performance, with losses in U.S. residential mortgage at a much reduced level
Global Auto Finance is well-positioned to generate attractive returns
Insurance is expected to deliver another robust year
GMAC’s long-term prospects remain favorable
― ResCap’s fundamental earnings potential remains solid
― Auto finance and insurance operations should mitigate pressure at ResCap in near-term and provide base for growth in long-term
47
1Q 2007— Disappointing performance driven largely by ResCap loss due to falling nonprime
mortgage asset values— Solid performances at Insurance and Auto Finance were not enough to offset the
loss— Despite operating challenges, GMAC and ResCap maintain strong liquidity
positionSignificant cash balances, large-scale committed funding facilities and access to unsecured markets offer extensive financial flexibility
Strong franchise with favorable long-term prospects— Top-tier market player with meaningful business diversification— Robust liquidity position— Strong capital base
Due to near-term expectations of continued U.S. mortgage market pressures, have implemented measures to reduce risk at ResCap
Longer-term, GMAC’s diversity and liquidity anticipated to spur successful earnings growth
— Well positioned to withstand near term challenges and structured to pursue long-term possibilities
— On track with growth strategy
Summary
Q & A
Contact GMAC Investor Relations at (866) 710-4623 or [email protected]
FINANCIAL UPDATE
MAY 15, 2007
SANJIV KHATTRI
EXECUTIVE VICE PRESIDENT &CHIEF FINANCIAL OFFICER
SupplementalThe following supplemental chart is provided to reconcileadjusted financial data comprehended in the primary chart set with GAAP-based data (per GMAC’s financial statements) and/or provide clarification with regard to definition of non-GAAP terminology
ResCap – HFI Portfolio
Domestic Securitization Financial Exposure
Domestic On-Balance Sheet securitization exposure declined in 1Q 2007
($ billions) 3/31/2007 12/31/2006Mortgage loans held for investment $47.5 $52.0Allowance for loan losses (1.5) (1.4)Other assets – Foreclosed assets 0.7 0.6Other assets – Interest receivable and deal costs 0.1 0.2Total Assets Related To Domestic Securitizations 46.8 51.5
Collateralized borrowings under securitization trusts $45.4 $49.7Other liabilities – Accrued interest and other 0.2 0.2Total Liabilities Related To Domestic Securitizations 45.6 49.9
Net Domestic Securitized On-Balance Sheet Assets Subject to Credit Exposure $1.2 $1.6
S1
S2
($ millions) 3/31/07 12/31/06 9/30/06 6/30/06 3/31/06
On-balance sheet assets $60,774 $61,106 $65,962 $62,394 $65,732
Off-balance sheet securitized assets 5,632 6,589 4,389 5,108 5,875
Managed assets 66,406 67,695 70,351 67,502 71,607
Whole loan sales* 19,657 19,354 19,684 20,707 18,095 Serviced assets $86,063 $87,049 $90,035 $88,209 $89,702
* Retail receivables included in whole loan sales and full securitization transactions where GMAC is no longer exposed to credit and/or interest rate risk
Retail Auto Finance
Reconciliation of Managed to Serviced Assets
Overall trends remain stable― 1Q performance improved reflecting strong used car prices
Note: Figures represent GMAC serviced portfolio
($ per vehicle)
Lease terminations 69 69 68 66 76 (Units 000s)
S3
$14,546
$14,065$13,648
$13,938
$14,736
1Q '06 2Q '06 3Q '06 4Q '06 1Q '07
36-Month Leases (Adjusted for Vehicle Mix)
36-Month Leases (Adjusted for Vehicle Mix)
Sales Proceeds on Scheduled U.S. Lease Terminations
Reconciliation of Insurance Core Earnings
1. Amount within premium tax and other expense in Forms 10-Q and 10-K respectively2. Amount within investment income in Forms 10-Q and 10-K respectively
($ millions) 1Q 2007 1Q 2006Net Income $143 $129Add: Pre-tax interest expense1 4 12Less: Pre-tax capital gains2 (4) (29)Add: Tax expense on interest & capital gains - 6Core Earnings $143 $118
S4