Ally Bank 2011 Annual Report Download - page 43

Table of Contents
Management's Discussion and Analysis
Ally Financial Inc. • Form 10−K
Global Automotive Services
Results for Global Automotive Services are presented by reportable segment, which includes our North American Automotive Finance operations, our
International Automotive Finance operations, and our Insurance operations.
North American Automotive Finance Operations
Results of Operations
The following table summarizes the operating results of our North American Automotive Finance operations for the periods shown. North American
Automotive Finance operations consist of automotive financing in the United States and Canada and include the automotive activities of Ally Bank and
ResMor Trust. The amounts presented are before the elimination of balances and transactions with our other reportable segments.
Year ended December 31, ($ in millions) 2011 2010 2009
Favorable/
(unfavorable)
2011−2010
% change
Favorable/
(unfavorable)
2010−2009
% change
Net financing revenue
Consumer $ 2,831 $ 2,339 $ 1,804 21 30
Commercial 1,325 1,425 1,136 (7) 25
Loans held−for−sale 5 112 320 (96) (65)
Operating leases 2,283 3,570 5,408 (36) (34)
Other interest income 106 149 269 (29) (45)
Total financing revenue and other interest income 6,550 7,595 8,937 (14) (15)
Interest expense 2,367 2,377 2,363 — (1)
Depreciation expense on operating lease assets 1,028 1,897 3,500 46 46
Net financing revenue 3,155 3,321 3,074 (5) 8
Other revenue
Servicing fees 161 226 238 (29) (5)
Gain on automotive loans, net 48 249 220 (81) 13
Other income 224 215 299 4 (28)
Total other revenue 433 690 757 (37) (9)
Total net revenue 3,588 4,011 3,831 (11) 5
Provision for loan losses 93 286 611 67 53
Noninterest expense
Compensation and benefits expense 434 387 435 (12) 11
Other operating expenses 955 994 1,161 4 14
Total noninterest expense 1,389 1,381 1,596 (1) 13
Income before income tax expense $ 2,106 $ 2,344 $ 1,624 (10) 44
Total assets $ 96,971 $ 81,893 $ 68,282 18 20
Operating data
Retail originations $ 36,528 $ 31,471 $ 19,519 16 61
Lease originations 7,316 3,888 259 88 n/m
n/m = not meaningful
2011 Compared to 2010
Our North American Automotive Finance operations earned income before income tax expense of $2.1 billion for the year ended December 31, 2011,
compared to $2.3 billion for the year ended December 31, 2010. Results for the year ended December 31, 2011, were primarily driven by less favorable
remarketing results in our operating lease portfolio, due primarily to lower lease terminations and the absence of gains on the sale of automotive loans due
to the expiration of our forward flow agreements during the fourth quarter of 2010. These declines were partially offset by increased consumer financing
revenue driven by strong loan origination volume related primarily to improvement in automotive industry sales, the growth in used automobile financings,
and a lower loan loss provision due to an improved credit mix and improved consumer credit performance.
Consumer financing revenue increased 21% for the year ended December 31, 2011, compared to 2010, due to an increase in consumer asset levels
primarily related to strong loan origination volume during 2010 and 2011 resulting primarily from higher automotive industry
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