GMAC Financial Services Reports 2006 and Fourth Quarter Earnings

GMAC Financial Services today reported 2006 net income of $2.1 billion, compared to net income of $2.3 billion in 2005. GMAC’s 2006 performance reflects record earnings in the insurance business and continued strong profitability in automotive finance, but significantly reduced net income at Residential Capital, LLC (ResCap), amid a declining U.S. residential housing market.

"The diversity of our earnings base continues to benefit GMAC’s consolidated results. The all-time record performance of our insurance business and strong net income at our global automotive finance operations helped to offset an earnings setback in the real estate finance segment," said GMAC Chief Executive Officer Eric Feldstein.

"For GMAC, 2006 marked a year of challenge and a year of opportunity," Feldstein continued. "GMAC encountered a very difficult environment — higher interest rates, a flat yield curve and a sharp downturn in the U.S. mortgage market. Nevertheless, the company was able to post $2.1 billion of net income. But far more significant, the sale of a majority interest in GMAC to a Cerberus-led consortium has set the stage for exciting new growth opportunities as we transform GMAC from a captive operation to a more globally diversified operation."