GMAC Financial Services Reports Preliminary Second Quarter 2007 Financial Results

GMAC Financial Services Reports Preliminary Second Quarter 2007 Financial Results

GMAC Financial Services today reported second quarter 2007 net income of $293 million, compared to net income of $787 million for the second quarter of 2006. Results for the second quarter of 2007 reflect continued strong performance in GMAC’s global automotive finance and insurance businesses, which more than offset losses in the real estate finance business.

GMAC’s second quarter net income generated by auto finance, insurance and other operations — excluding Residential Capital, LLC (ResCap) — amounted to $547 million, more than twice the earnings generated by these same operations in the second quarter of 2006. ResCap incurred a net loss of $254 million in the second quarter of this year, bringing GMAC’s consolidated net income to $293 million. The year-over-year net income comparison was affected by a $259 million gain on the sale of an equity interest in a regional homebuilder in the second quarter of 2006.

Second Quarter Net Income (Loss) ($ in millions) 2007 2006 Change Memo: Q1 2007 Global Automotive Finance $382 $137 $245 $396 Insurance 131 80 51 143 Other 34 22 12 66 Net Income before ResCap results 547 239 308 605 ResCap (254) 548* (802) (910) Consolidated Net Income $293 $787 ($494) ($305)

*ResCap’s results for the second quarter 2006 include a $259 million after-tax gain on the sale of an equity investment in a regional homebuilder.

GMAC consolidated net income of $293 million in the second quarter reflects a marked improvement from the $305 million consolidated net loss incurred in the first quarter this year. The large favorable swing in GMAC’s earnings from the prior quarter stemmed from the considerable improvement in ResCap’s performance, with second quarter losses at a much-reduced level. Although severe illiquidity in the nonprime mortgage market placed increasing pressure on asset valuations, aggressive measures undertaken to reduce ResCap’s nonprime exposure rendered the company less vulnerable in the second quarter to continued weakness in the market.

“The net losses incurred by ResCap continue to constrain GMAC’s bottom- line profitability. But we are encouraged to see that the aggressive risk- mitigation initiatives implemented in the first half of this year have reduced ResCap’s losses — quickly and significantly — despite increasing challenges in the U.S. mortgage market,” said GMAC Chief Executive Officer Eric Feldstein.

“Meanwhile, we are pleased with the continued strong performance of GMAC’s global auto finance and insurance operations, where second quarter earnings more than offset ResCap losses,” Feldstein said. “Operating trends in the auto finance and insurance business units remained favorable with a year-over- year increase in net margins, an improvement in auto lease residual performance, stable credit losses near historical lows and an increase in insurance underwriting profitability.”