Sanjiv Khattri, Executive Vice President and CFO of GMAC Financial Services Canadian Fixed Income Investor Update May 15, 2007
1. FINANCIAL UPDATE
MAY 15, 2007
SANJIV KHATTRI
EXECUTIVE VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
Contact GMAC Investor Relations at (866) 710-4623 or investor.relations@gm.com
2. Forward Looking Statements
In the presentation that follows and related comments by GMAC LLC (“GMAC”) management, the use of the words
“expect,” “anticipate,” “estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,” “project,” “outlook,” “priorities,” “target,”
“intend,” “evaluate,” “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.
1
3. Overview
Performance Summary
Funding
Update on Canada
Strategic Overview
2007 Outlook & Summary
Q&A
2
5. 2007 – First Quarter Performance Highlights
1Q 2007 net loss of ($305) million compared to net income of $495
million for 1Q 2006
Pressures 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
―
$1.0 billion common equity injected by GM, based on final settlement provisions of
―
the GMAC sale transaction
4
6. First Quarter Net Income
($ millions) 1Q 2007 1Q 2006 Change
Global Automotive Finance $396 $186 $210
ResCap (910) 201 (1,111)
Insurance 143 129 14
Other* 66 (21) 87
Net Income ($305) $495 ($800)
* 1Q 2007 includes 21% ownership of our former Commercial Mortgage unit; 1Q 2006 includes 100% ownership through March 23, 2006, sale
date and 21% ownership thereafter
5
7. First Quarter Pre-Tax Income
($ millions) 1Q 2007 1Q 2006 Change
Global Automotive Finance $436 $268 $168
ResCap (851) 339 (1,190)
Insurance 191 186 5
Other* 69 (76) 145
Pre-tax income (155) 717 (872)
Taxes (150) (222) 72
Net Income ($305) $495 ($800)
* 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
6
8. Diversified Mortgage Enterprise
ResCap is diversified across most sectors of the residential mortgage
market
Well positioned to capitalize on market opportunities across the mortgage
―
spectrum
ResCap has obtained separate investment grade credit ratings as an
independent finance subsidiary of GMAC from all four rating agencies
7
9. ResCap – Key Metrics
2006 1Q 07
2006 – Negative nonprime valuation
Moving
1Q 07 – Reduced exposure to higher risk loans
(Securitization/Sales)
2006 – Increase in loan loss provisions on
nonprime
Storage
1Q 07 – Credit pressure remains as nonprime
(HFI/Servicing)
portfolio runs-off
2006 – Nonprime credit issues in warehouse
lending
Warehouse Lending
1Q 07 – Increased provisions for nonprime
(Lending Receivables)
warehouse lending
2006 & 1Q 07 – Solid 2006 earnings due to
Business Capital
sale of home builder, but weakness among
(Lending Receivables) certain other home builders
2006 – Increased origination volumes
International 1Q 07 – Continued strong performance and
residual risk was reduced
8
10. ResCap – Nonprime Loan Risk
Relative nonprime loan exposure varies on balance sheet as does its risk
Warehouse Lending Receivables
Loan Servicing Portfolio
Total: $6.5B
Total: $452.9B
16% 18%
Nonprime
Prime
Held For Sale Held For Investment
Total: $22.0B Total: $65.3B
73%
23%
As of 3/31/2007
9
11. RFG HFS Portfolio Residual Risk
Total 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
54%
33% Non-Agency Public
Agency
Securitizations
$9.8B
$16.0B
1%
Private
$0.3B
12%
Non-Agency Whole Loans
$3.7B 10
12. U.S. HFI Nonprime Portfolio
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
―
U.S. Nonprime HFI Reduction In 1Q 07 Totaled $4.5 billion
34%
23%
20%
9%
14%
2002 2003 2004 2005 2006
11
13. ResCap – Held for Investment Portfolio - Credit Quality
Asset quality weaker due to
Nonaccrual Loans as a % of total MLHFI * continuing slow housing market and
stress in nonprime mortgage market
11.9%
10.5%
Nonprime assets continue to drive
9.2% 9.2% 9.2% increase in delinquencies and
9.1% 9.0%
8.4% 8.3%
nonaccruals
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Slowing of home price appreciation
'05 '05 '05 '05 '06 '06 '06 '06 '07
increased severity of losses
Net charge-offs as a % of total MLHFI *
Allowance for loan losses increased to
2.54% at 3/31/2007 from 2.17% at
0.3% 0.3%
12/31/2006 for the HFI portfolio
0.3%
0.2% 0.2%
0.2%
0.2% 0.2%
0.1%
Much of portfolio is securitized –
ResCap net exposure limited to $1.2
billion first loss position at 3/31/3007
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
compared to $1.6 billion at YE 2006
'05 '05 '05 '05 '06 '06 '06 '06 '07
* 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 quot;Finance receivables and loans, net of unearned incomequot;
12
14. ResCap – Lending Receivables Portfolio - Credit Quality
Continued asset quality weakness
due to severe stress with some
Nonaccrual Assets as a % of total 10.94%
nonprime counterparties
lending receivables 9.29%
Allowance for loan losses
increased to 4.06% at 3/31/2007
0.05% 0.12% 0.08% 0.50% 0.41% 0.24% 0.21%
from 2.66% at 12/31/2006 for
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q lending receivables
'05 '05 '05 '05 '06 '06 '06 '06 '07
Warehouse receivables
represented $6.5 billion of lending
Net charge-offs as a % of total
receivables with only 15%
0.38%
lending receivables
supported with nonprime collateral
on 3/31/2007
0.03% 0.03%
0.00% 0.02% 0.00% 0.00% 0.02%
0.00%
Nonprime warehouse receivables
reduced by $1.2B or 50% in 1Q
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
'05 '05 '05 '05 '06 '06 '06 '06 '07 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”
13
15. 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
—
14
16. 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
—
15
17. 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 16
18. ResCap – Liquidity
03/31/07
($ in billions)
Cash and Cash Equivalents $2.6
Unused Bank Facilities 8.6
Unused Conduit Capacity 56.3
Unused Whole Loan Facilities 4.6
Total Available Liquidity $72.1
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
17
19. ResCap – Capital Strategy
GMAC 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 $500 million in April
―
Restore ResCap’s equity base to levels above YE 2005/YE 2006
Align ResCap’s capital position with economic capital requirements
GMAC remains very committed to ResCap long-term
YE YE
2005 2006 3/31/07
($ billions)
Cash and Cash Equivalents $2.3 $2.0 $2.6
Common Equity $7.5 $7.6 $7.2*
* Prior to April 2007 $500 million capital injection
18
20. ResCap - 2007 Outlook
Weak 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
19
21. Auto Finance – Key Metrics
2006 1Q 07
Strong lease and retail originations
Originations
Credit losses trending up but remain at
Credit Losses expected levels
2006 – U.S. residuals down slightly,
reflecting weaker used car prices in 2H
Lease Residuals
1Q 07 - U.S. residual performance
improved, reflecting higher sales proceeds
supported by stable used car prices
Improved NAO margins more than
Margins
offset margins at IO which remain
under pressure
20
22. Auto Finance – Consumer Originations
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
—
$19
($ billions)
$13
$12 $12
$11
New
Used
$2.1
$1.5 $1.4 $1.4
$1.4
1Q '06 2Q '06 3Q '06 4Q '06 1Q '07
Total Units 603 627 817 528 624
(in 000s)
21
23. Auto Finance – Consumer Credit Quality
Delinquencies as a % of serviced retail assets
30 days or more past due
1Q 2007 delinquency up
2.47% 2.41% slightly versus year-ago
2.34% 2.40% 2.33%
2.21% 2.27% levels. Performance
2.16%
2.06% remains near
historically low levels
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
'05 '05 '05 '05 '06 '06 '06 '06 '07
Annualized credit losses as a % of average
managed retail contracts
Losses remain near
1.12% 1.22% 1.14%
1.11%
1.09%
0.96%
0.95% 0.91% 0.95% historically low levels
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
'05 '05 '05 '05 '06 '06 '06 '06 '07
22
24. Auto Finance – Nonprime
Nonprime auto market has not experienced the pressures affecting
the 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
—
23
25. Insurance – Key Metrics
2006 1Q 07
2006 – Flat despite decline in GM retail
Written Revenue* 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
Underwriting Strong results driven by higher earned
Results premiums and lower loss experience
2006 – Rebalanced investment portfolio to
reduce capital requirements
Investment
1Q 07 – Increase in the amount of fixed
Income
income assets in the portfolio from 68% to
92%
* Includes Written Premium
24
26. Insurance – Consolidated Earnings
Favorable underlying core earnings trend continues
($ 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%
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 2006
3. Represents a post tax number, pre-tax interest expense was $4 for 2007 and $12 for 2006
4. 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
25
27. Insurance – Provident Insurance Acquisition
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. $340 million)
―
Assuming no regulatory hurdles, transaction is expected to close in
2Q 07
Important “bolt-on” acquisition consistent with GMAC growth and
diversification strategy
26
29. Global Liquidity
03/31/07
($ billions)
Cash and Marketable Securities* $13
Unused Bank Facilities 31
Unused Conduit Capacity 86
Unused Whole Loan Facility 44
Total Available Liquidity $174
* Includes $3 billion cash invested in a portfolio of highly liquid marketable securities
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
28
31. Diversified U.S. Auto Term Funding
Unsecured share of funding likely to increase going forward
2001 2005 2006
$65B $41B $32B
0% 3% 6%
0% 10%
21%
25%
47%
65% 44%
14%
63%
Institutional Unsecured Retail
Asset Backed Securities Whole Loan Sales
UNSECURED SECURITIZATION WHOLE LOANS
Institutional Assets: Retail Private Transactions
Retail Lease Syndicated Transactions
Wholesale Committed Flow Agreements
Full Securitizations
Non-Traditional Assets
(Nuvell, GMACCF)
Markets: ABCP - NCAT
ABCP - Multi-Seller
Bank Conduits
Term Securitizations
30
32. 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
31
34. 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$21 billion at 12/31/2006
Delinquencies remain at historically low levels
2006 2002-2005
Average Daily Delinquency >30 Past Due* 0.61% 0.63%
Net Losses* 0.22% 0.21%
* As a % of average retail contracts outstanding
33
35. GMACCL Funding Profile
Diverse Funding Sources
Domestic Medium Term Notes & Bonds*
―
Euro Medium Term Notes & Bonds*
―
Commercial Paper*
―
Public Term Asset Backed Securities
―
Multi-Seller Bank Conduits
―
Outstanding Debt
(C$ billions) 12/31/2006 12/31/2005
Unsecured 7.2 10.0
Secured 9.8 6.4
Total 17.0 16.4
* GMACCL’s unsecured debt is fully guaranteed by GMAC LLC
34
36. 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
35
38. GMAC
GMAC is a diversified global financial services company
GMAC Financial Services
Automotive
Other
ResCap Insurance
Finance
North American Commercial
Residential Finance MIC
Auto Finance Group
Business Capital Equity interest in
Personal Lines
International Auto
Capmark*
International
* Minority equity interest in Capmark. In March 2006, we closed the sale of approximately 78% of our equity in Capmark (formerly GMAC
Commercial Mortgage)
37
39. Operating Earnings Mix – Business Diversification
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
2002 2005 2006
1 1 1,2
$2.2B $2.7B $2.0B
4%
15% 18 %
39%
38%
56%
44%
81% 5%
Auto Finance ResCap Insurance
1 Operating earnings figures include “Other” business segment. However, the graphical representations exclude “Other” business segment
2 Includes insurance investment portfolio rebalancing gains of $568 million in 2006.
38
40. Gross Revenue – Business Diversification
Notably strong growth in diversified revenues with about 50% of
revenue being contributed by our mortgage and insurance operations
2002 2005 2006
$24.5B $33.3B $35.7B
4%
2%
12% 5% 16%
13%
14%
52%
56%
26%
30%
70%
Auto Finance ResCap Insurance Other
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
39
41. The Transaction
Cerberus
led
Investor
Consortium
ty
49
ui
%
Eq
Eq
uit %
y 51
40
42. New GMAC
With 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
41
43. 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
42
44. 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
43
45. New GMAC - Symmetry Of Shareholder / Bondholder Interest
VALUE PLAY
Aligned Interests
Priority Equity Holder
Initiatives
• Bolster Capital Base • Provides Significant
Protection to Unsecured
• Enhance Liquidity
Bondholders
• Strengthen Credit Measures
• Reduce Borrowing Costs
• Drives Equity Holder
• Expand Net Margins
Returns
• Increase Net Income
44
47. 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
46
48. Summary
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
—
position
Significant 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
—
47
50. FINANCIAL UPDATE
MAY 15, 2007
SANJIV KHATTRI
EXECUTIVE VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
Contact GMAC Investor Relations at (866) 710-4623 or investor.relations@gm.com
51. Supplemental
The following supplemental chart is provided to reconcile
adjusted 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
52. ResCap – HFI Portfolio
Domestic On-Balance Sheet securitization exposure declined in 1Q 2007
Domestic Securitization Financial Exposure
($ billions) 3/31/2007 12/31/2006
Mortgage loans held for investment $47.5 $52.0
Allowance for loan losses (1.5) (1.4)
Other assets – Foreclosed assets 0.7 0.6
Other assets – Interest receivable and deal costs 0.1 0.2
Total Assets Related To Domestic Securitizations 46.8 51.5
Collateralized borrowings under securitization trusts $45.4 $49.7
Other liabilities – Accrued interest and other 0.2 0.2
Total Liabilities Related To Domestic Securitizations 45.6 49.9
Net Domestic Securitized On-Balance Sheet Assets Subject to
$1.2 $1.6
Credit Exposure
S1
53. Reconciliation of Managed to Serviced Assets
Retail Auto Finance
($ 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 $89,702
* Retail receivables included in whole loan sales and full securitization transactions where GMAC is no longer exposed to
credit and/or interest rate risk
S2
55. Reconciliation of Insurance Core Earnings
1Q 2007 1Q 2006
($ millions)
Net Income $143 $129
1
4 12
Add: Pre-tax interest expense
2
Less: Pre-tax capital gains (4) (29)
Add: Tax expense on interest & capital gains - 6
Core Earnings $143 $118
1. Amount within premium tax and other expense in Forms 10-Q and 10-K respectively
2. Amount within investment income in Forms 10-Q and 10-K respectively
S4
