Ally Financial Inc. · NYSE:ALLY
Ally Financial — General Motors Acceptance — Investor Presentation (August 2004)
30 slides from Ally Financial's investor presentation, Aug 31, 2004
Slide 1: Investor Update 2004
Investor Update 2004 August 31, 2004 Sanjiv Khattri Executive Vice President & Chief Financial Officer
Slide 2: Safe Harbor
Safe Harbor In the presentation that follows and in related comments by General Motors Acceptance Corporation's management, our use of the words "expect", "anticipate", "project", "estimate", "forecast", "objective", "plan", "goal", "outlook", "target", "pursue" and similar expressions is intended t
Slide 3: Presentation Outline
Presentation Outline General Motors Acceptance Corp. (GMAC) Brief Update Key Issues Outlook
Slide 4: General Motors Acceptance Corporation
General Motors Acceptance Corporation
Slide 5: Consolidated Net Income
Consolidated Net Income $ Millions 9 % p.a. 49% p.a. Sustainable growth in earnings
Slide 6: GMAC Net Income — H1
GMAC Net Income — H1 2004 2003 2004 O/(U) $ Millions H1 H1 2003 Financing 894 698 196 Insurance 166 49 117 Mortgage 586 786 200) Consolidated 41,646 4,533 443
Slide 7: Key Issues For Next Months
Key Issues For Next 12 Months Interest Rate Environment Changing Mortgage Environment Off-Lease Performance Credit Losses Funding Outlook Insurance Underwriting Income
Slide 8: Key Issues For Next Months
Key Issues For Next 12 Months Interest Rate Environment Changing Mortgage Environment Off-Lease Performance Credit Losses Funding Outlook Insurance Underwriting Income
Slide 9: Interest Rate Environment
Interest Rate Environment Interest rates have increased and are anticipated to trend higher Will constrain net interest margins Will lead to decline in mortgage volume Nevertheless, GMAC is expected to continue to generate strong returns through 2004 and beyond
Slide 10: Interest Rate Environment Mitigating Factors
Interest Rate Environment Mitigating Factors Finance and Insurance Significant floating rate debt already swapped into fixed rate during 2003 at attractive rates Insurance underwriting and investment income are likely to remain strong in rising rate environment Mortgage Mortgage servicing asset will
Slide 11: Key Issues For Next Months
Key Issues For Next 12 Months Interest Rate Environment Changing Mortgage Environment Off-Lease Performance Credit Losses Funding Outlook Insurance Underwriting Income
Slide 12: U.S. Residential Mortgage Industry Volume
U.S. Residential Mortgage Industry Volume Source: Fannie Mae/Freddie Mac estimates
Slide 13: Changing Mortgage Environment
Changing Mortgage Environment Mortgage Group profitability projected to decline but disproportionately less than industry volume downturn Increase in Residential and RFC market share partially offsetting decline in industry volume Mortgage servicing asset will appreciate in rising interest rate envi
Slide 14: Key Issues For Next Months
Key Issues For Next 12 Months Interest Rate Environment Changing Mortgage Environment Off-Lease Performance Credit Losses Funding Outlook Insurance Underwriting Income
Slide 15: U.S. SmartLease Book Gain per Unit
U.S. SmartLease Book Gain per Unit
Slide 16: U.S. SmartLease Book Gain per Unit
U.S. SmartLease Book Gain per Unit
Slide 17: U.S. SmartLease Terminations Outlook
U.S. SmartLease Terminations Outlook
Slide 18: Off-Lease Performance
Off-Lease Performance Fundamentals are improving and sustainable Terminations decreasing to a reasonable range Remarketing efficiencies growing SmartAuction is leading-edge internet technology Enables GMAC to remarket off-lease vehicles faster Result is cost savings and fee income Recently sold one-
Slide 19: Key Issues For Next Months
Key Issues For Next 12 Months Interest Rate Environment Changing Mortgage Environment Off-Lease Performance Credit Losses Funding Outlook Insurance Underwriting Income
Slide 20: Total Retail and SmartLease Losses
Total Retail and SmartLease Losses As % Of Average Serviced Receivables % U.S. Auto Asset Quality
Slide 21: U.S. Auto Retail Loans Severity of Loss
U.S. Auto New and Used Retail Loans Severity of Loss Average Gross Loss per Unit with a Loss
Slide 22: U.S. Auto Retail Loans Frequency of Loss
% of Units Outstanding U.S. Auto New and Used Retail Loans Frequency of Loss
Slide 23: Key Issues For Next Months
Key Issues For Next 12 Months Interest Rate Environment Changing Mortgage Environment Off-Lease Performance Credit Losses Funding Outlook Insurance Underwriting Income
Slide 24: Growing Cash Balances
Growing Cash Balances Strong liquidity to support any short-term needs
Slide 25: Diversification of Funding Sources
2000 2001 2002 2003 2004 H1 Diversification of Funding Sources U.S. Term Funding Program 2003 2004 H1 Funding completed $47B $22B Funding Sources: Institutional 30% 35% Retail 18% 19% Securitization 52% 46% Total 100% 100%
Slide 26: Diversified Funding Strategy
Diversified Funding Strategy Grow access to institutional and retail bond markets in the U.S. and globally Diversified secured funding programs Public asset-backed securitizations Bank conduit asset-backed securitizations Sale of whole loans to financial / retail institutions Lease securitizations E
Slide 27: U.S. Liquidity Position
U.S. Liquidity Position Short-Term vs. Long-Term Funding Short-term as % of Total 36% 40% 33% 35% 13% 9% 10%
Slide 28: Key Issues For Next Months
Key Issues For Next 12 Months Interest Rate Environment Changing Mortgage Environment Off-Lease Performance Credit Losses Funding Outlook Insurance Underwriting Income
Slide 29: Underwriting Income
Underwriting Income Sustainable underwriting performance Multi-year focus on fundamental underwriting and pricing discipline across all business lines Increasing share Cost reductions and improved efficiency Improved loss performance, particularly in extended automotive warranty product line
Slide 30: Summary 2004 Performance
Summary 2004 Performance Targeting net income well in excess of $2 billion Containing Funding-to-Equity leverage ratio near current level Increasing support of GM vehicle operations with auto financing activities worldwide Diversification of businesses within GMAC likely to help sustain earnings lon
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