NEW YORK — Ally Financial's chief executive officer described 2010 as a "transformative" year for the company. And one of its key business segments, Global Automotive Services, showed significant growth in preliminary fourth-quarter and full-year originations in the U.S. and throughout the globe.

Across all business segments, Ally reported full-year net income of $1.1 billion, compared with a net loss of $10.3 billion in the prior year. Core pre-tax income totaled $2.5 billion, compared to a core pre-tax loss of $5.8 billion in 2009.

For the quarter, the company posted net income of $79 million, compared with a net loss of $5 billion in the previous year.

Core pre-tax income was $533 million for the quarter, compared with a pre-tax loss of $3.5 billion in the same time frame of 2009.

"2010 was a transformative year for Ally as we successfully achieved our strategic objectives and restored financial performance with $2.5 billion of core pre-tax income last year," explained Michael Carpenter, Ally's CEO.

"Our automotive finance business remained a leading provider of auto loans, with U.S. consumer originations increasing 72 percent over last year. We substantially reduced risk in the mortgage business and are focused on our conforming mortgage origination and servicing platforms; and Ally Bank has demonstrated the strength of its customer value proposition with strong deposit growth and high retention rates," he continued.

"These steps, along with our improved cost and capital structures and access to the capital markets, have significantly strengthened the company and will enable repayment of the U.S. Treasury's investment over time," he added.

Global Automotive Services Results

Ally's Global Automotive Services business unit, which consists of North American Automotive Finance, International Automotive Finance and Insurance, reported fourth quarter pre-tax income from continuing operations of $765 million, compared with $283 million.

Looking specifically at North American Automotive Finance, which includes the U.S. and Canada, this segment reported pre-tax income from continuing operations of $589 million for the quarter, compared with $343 million in the same period of 2009.

"Results were driven by significantly lower loan loss provision due to improved credit quality, continued growth in originations and stable wholesale penetration. Origination levels have been supported by automakers' incentive programs, the expanded features and benefits of the Ally Dealer Rewards program and access to a broader dealer network via DealerTrack," management pointed out.

Meanwhile, the International Automotive Finance business segment posted pre-tax income from continuing operations of $12 million for the quarter, compared with a pre-tax loss of $145 million of certain tax and legal provisions. Officials noted the company's footprint currently includes 15 countries, including five core international markets of Germany, U.K., Brazil, Mexico and the China joint venture.

As for insurance, which includes dealer-centric products, this business unit reported pre-tax income from continuing operations of $164 million, compared with $85 million in the previous year. Officials noted these results were driven by "realized gains related to the investment portfolio and lower acquisition and underwriting expenses."

Auto Originations Soar

Continuing on, the company announced that total consumer financing originations climbed 56 percent during the quarter to $12.7 billion, compared with $8.2 billion.

Fourth-quarter originations included $9.9 billion in new originations, $1.4 billion of used originations and $1.4 billion of new leases. For the 2009 period, originations consisted of $6.8 billion in new originations, $1 billion in used originations and about $300 million in new leases.

"Growth in consumer financing originations was driven by higher industry sales and an increase in GM consumer penetration driven by year-end marketing programs," the management team highlighted. "The increase in used originations during the quarter reflects the company's view that this market continues to be a growth opportunity. Leasing increased to 11.0 percent of total originations in the fourth quarter from 4.1 percent in the corresponding periods last year as Ally continues to grow this business under prudent underwriting principles."

North American consumer financing originations for the period were $10.2 billion, including $9.3 billion in the U.S. For the 2009 time frame, consumer financing originations in North America were $6.6 billion, including about $5.9 billion in the U.S.

Furthermore, Ally reported that its U.S. wholesale penetration for GM dealer stock was 82.1 percent for the quarter, compared with 83.7 percent in the previous quarter and 87 percent in the fourth quarter of 2009.

U.S. consumer penetration for GM was 49.7 percent for the period, compared with 34.2 percent in the prior quarter and 30.3 percent in the fourth quarter of 2009.

"Ally continues to diversify its business as GM incentivized business accounted for 22 percent of Ally's overall consumer originations in 2010, compared to 45 percent for full-year 2009," management indicated.

As for Ally's average U.S. penetration for Chrysler dealer stock, officials said this was 76 percent for the quarter, compared with 76.2 percent in the third quarter and 74.8 percent in the fourth quarter of 2009. Ally's consumer penetration for Chrysler was 36.3 percent, compared with 49.4 percent in the prior quarter and 25.5 percent in the last quarter of 2009.

"The sequential quarterly decline was due to a change in the mix of sales incentives with Chrysler," management explained.

Reviewing international consumer originations from continuing operations, including the joint venture in China, officials said this figure was $2.5 billion for the quarter, compared with $1.6 billion.

"International consumer originations continued to be driven by the company's five key markets with strong growth in China, Brazil and Mexico during the quarter. Consumer originations increased 100 percent in Brazil, 97 percent in China and 54 percent in Mexico compared to the fourth quarter of 2009," management revealed.

Key Business Highlights

Finally, the management team culled out some key financials from its overall results, including:

—Ally was ranked No. 1 provider of new-vehicle retail financing in the U.S. for 2010, according to AutoCount data from Experian Automotive.

—Global consumer auto financing originations climbed 68 percent for the year.

—Global used consumer auto financing originations soared 92 percent for 2010.

—Ally's U.S. consumer penetration of the OEMs improved for the year. Its consumer penetration of GM was 38.2 percent, compared with 28.2 percent in the previous year. And U.S. consumer penetration of Chrysler was 45.4 percent, compared with 8.9 percent in 2009.

—Ally was selected as a recommended provider of F&I products for Saab dealerships and as the preferred financing provider for Fiat in the U.S.

—On Dec. 30, Ally and the U.S. Treasury agreed to convert $5.5 billion of the $11.4 billion of mandatorily convertible preferred (MCP) securities issued by Ally and owned by the U.S. Treasury into common equity.

—Deposits for the company grew by $7.3 billion, supported by strong CD retention rates.

—Ally said it strengthened access to capital markets with nearly $36 billion of new funding transactions completed for the year, compared with about $12 billion of these transactions during 2009.

—Ally indicated cost reduction efforts were successful, including surpassing its expense reduction goal with $680 million in savings and selling 15 non-core operations.

—Furthermore, Ally said it made progress in reducing mortgage risk for the year, including streamlining the balance sheet and stabilizing performance; selling legacy mortgage assets of about $2.5 billion of unpaid principal balance at a gain; and reducing representation and warranty exposure through several settlements such as with Fannie Mae and Freddie Mac.