Ally Financial Inc. · NYSE:ALLY
Ally Financial — General Motors Acceptance — Investor Presentation (January 2005)
27 slides from Ally Financial's investor presentation, Jan 14, 2005
Slide 1: 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 2: GMAC Consolidated Net Income
GMAC Consolidated Net Income
Slide 3: 2004 Financial Results
GMAC 2004 Financial Results • Achieved in a difficult environment - - Credit rating downgrades - - Rising market interest rates - - Widening GMAC borrowing spreads - - Declining mortgage volume
Slide 4: Sustainable Net Income
GMAC Sustainable Net Income Prelim. • 2003 not an aberration • GMAC earnings power going forward more in line with 2003/2004 than with historical results
Slide 5: Objectives
GMAC 2005 Objectives • Net income — Earn at least $2.5 billion • Dividends to GM — Remit in excess of $2.0 billion • Strong liquidity position — Ensure ample funding under downside scenarios
Slide 6: Net Income: At least $2.5 Billion
GMAC 2005 Net Income Financing Operations Insurance Operations Mortgage Operations At least $2.5 Billion
Slide 7: Mortgage Outlook
GMAC 2005 Mortgage Outlook Industry Volume GMAC Mortgage Profitability
Slide 8: Mortgage Operations
GMAC Mortgage Operations • Volume up 46% in 2003 ^ Profits up 130% • Volume down 30% in 2004 ^ Profits down only 10%
Slide 9: Mortgage Outlook
GMAC 2005 GMAC Mortgage Outlook • Growing market share in residential - -Expect 8th year in a row of market share gains • Mortgage servicing income tends to increase in a rising interest rate environment - -Natural hedge to mortgage lending business • Growing investment/asset management business - -
Slide 10: Net Income: At least $2.5 Billion
GMAC 2005 Net Income Financing Operations Insurance Operations Mortgage Operations At least $2.5 Billion
Slide 11: Insurance Operations 2003-2004
GMAC insurance Operations 2003-2004 • Insurance premium growth ( G ) • Underwriting performance ( G ) • Investment portfolio performance ( G )
Slide 12: Insurance Operations 2005 Outlook
GMAC insurance Operations 2005 Outlook •Insurance premium growth ( G ) •Underwriting performance ( G ) •Growth in international markets ( G ) •Income from investment portfolio ( G ) $Millions 1/1/03 1/1/04 9/30/04 Market value of $5,080 $6,248 $6,625 investment portfolio
Slide 13: Net Income: At least $2.5 Billion
GMAC 2005 Net Income Financing Operations Insurance Operations Mortgage Operations At least $2.5 Billion
Slide 14: Challenges: Rising Interest Rates
GMAC 2005 Challenges Challenge • Rising interest rates - - Cost of floating rate debt will increase Mitigating Factor • GMAC has rebalanced its debt portfolio - - Replaced a large portion of floating rate debt with fixed rate debt at attractive levels
Slide 15: Challenges: Widening Borrowing Spreads
GMAC 2005 Challenges Challenge • Widening borrowing spreads on GMAC unsecured debt Mitigating Factor • GMAC has reduced its reliance on “expensive” unsecured debt - - Tapping many forms of lower-cost secured funding
Slide 16: U.S. Funding Mix
GMAC U.S. Funding Mix Institutional Unsecured Retail Asset Backed Securities Whole Loan Sales
Slide 17: Change in Auto Finance Business Model
GMAC change in Auto Finance Business Model • Transition from “Storage Business” to “Moving Business” • Historical model: “Storage Business” — Originate auto loans — Store on GMAC balance sheet • New model: “Moving Business” — Originate auto loans — Sell auto loans to financial institutions — GMAC re
Slide 18: Originate/Sell Auto Finance Model
GMAC Originate Auto Finance Model CMAC Financial Institutions “Front-End” “Back-End” • Unique origination platform • Captive financing for • Low cost of funds GM’s subverted business u Balance sheet capacity • Auto loan underwriting expertise • Loan servicing expertise
Slide 19: GMAC Auto Finance Originate/Sell Model
GAMAC Auto Finance Originate/Sell Model • GMAC will remain “face” to dealer/customer - -GMAC originates loan - -GMAC services loan - -Sale of auto loan “irrelevant” to dealer/customer • GMAC will continue to provide strong strategic support for GM Vehicle Operations — Wholesale and retail auto finan
Slide 20: Financing Outlook
GMAC Financing Outlook 2005 Outlook • Rising interest rates ( Y ) • Widening borrowing spreads ( Y ) • Balance sheet capacity ( Y ) • Credit losses ( G )
Slide 21: Net Income: At least $2.5 Billion
GMAC 2005 Net Income Financing Operations Insurance Operations Mortgage Operations At least $2.5 Billion
Slide 22: Dividends
GMAC Dividends Memo: Y-E Funding to 10.9:1 10.4:1 9.8:1 Equity Ratio
Slide 23: Objectives
GMAC 2005 Objectives • Net income - - Earn at least $2.5 billion • Dividends to GM - - Remit in excess of $2.0 billion • Strong liquidity position - - Ensure ample funding under downside scenarios
Slide 24: Strong Liquidity Position
GMAC strong Liquidity Position • Large cash balances - - $24.4 billion at end of September • Many new funding channels cultivated • Funding to equity ratio reduced • Term debt maturities extended
Slide 25: Liquidity Profile
GMAC Liquidity Profile Asset and Liability Scheduled Maturities* * As of September 30, 2004. Excludes on-balance sheet secured assets and on-balance sheet secured debt I
Slide 26: Residential Mortgage Operation Stand-alone Credit Rating
GMAC Residential Mortgage Operation Stand-alone Credit Rating GM GM/GMAC Automotive GMAC Credit Rating RFC Residential Residential Capital
Slide 27: Summary
GMAC Summary • GMAC continues to produce record earnings despite difficult challenges • GMAC implementing strategic changes to ensure sustainable earnings long term - -Funding strategies altered - -Shift to “originate/sell” model • GMAC providing support to GM Vehicle Operations with auto financing
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