Good day, ladies and gentlemen, and welcome to Q4 2015 Ally Financial Earnings Conference Call. My name is Sandra, and I'm your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of the conference. As a reminder, this call is being recorded for replay purposes. I'd now like to hand the call over to Michael Brown, Executive Director of Investor Relations (00:28). Please go ahead, sir.

Thanks, Sandra, and thank you everyone for joining us as we review Ally Financial's fourth quarter 2015 results. You can find the presentation we'll reference during the call on the Investor Relations section of our website ally.com. I would like to direct your attention to the second slide of today's presentation regarding forward-looking statements and risk factors. The contents of our conference call will be governed by this language. This morning, our CEO, Jeff Brown; and our CFO, Chris Halmy will cover the fourth quarter results. We'll also have some time set aside for Q&A at the end. Now, I'd like to turn the call over to Jeff Brown. Jeffrey Brown - Chief Executive Officer & Director: Thanks, Michael. Good morning, everyone. We appreciate you joining us today. Let me start by saying that operationally and financially, we had a strong quarter and overall year. I am beyond proud of what my teammates delivered in 2015. Now to hit the highlights, we posted net income of $263 million for the quarter and $1.3 billion for the year. From a core pre-tax income basis, we delivered $446 million for the quarter and $1.8 million for the year. This reflects increases in profitability on all fronts and Chris will walk through more details in just a bit. I do want to spend a minute on the stock price. I hope it goes without saying that I'm obviously disappointed by the performance of the stock, which I believe does not reflect the strength in results, the quality of this company and our leading franchises, the ability to deliver real returns for shareholders. There may be some technical dynamics, i.e., a transitioning investor base impacting us. There may be some elevated auto fears impacting us. Frankly, I don't care to make excuses and make…

Thanks, JB. Turning to slide 10, we delivered another solid and consistent quarter with $446 million of core pre-tax income bringing us to $1.8 billion for the full year 2015. Net financing revenue increased to nearly $1 billion for the quarter driven by continued strong order originations and improving net interest margin. The notable story is looking at the full year net financing revenue of around $3.8 billion, which is up over $200 million from 2014. Other revenue of $358 million was up this quarter, which is generally in line with our quarterly expectations. On the credit side, losses performed slightly better than expected this quarter with provision expense of $240 million, which was up due to typical seasonality in our retail auto loan portfolio. We've discussed for the past few quarters another driver of provision expense is the fact that we are growing the loan portfolio as the origination mix continues to shift to loans over lease. The increase in total provision expense year-over-year is also driven by a reserve release last year in the mortgage segment as the credit quality of that portfolio improved. Total non-interest expense was $667 million for the quarter, which we break out controllable and non-controllable items. Controllable expenses were down $13 million year-over-year as we continue to manage costs and increase efficiencies across the business segments. Overall, non-interest expense is down over $150 million on an annualized basis since 2014, so obviously we made real progress on creating operating leverage. These results drove GAAP net income of $263 million for the quarter. Moving to key metrics, our adjusted EPS for the quarter was $0.52, which was up $0.12 year-over-year helped by improved core earnings and lower preferred dividends. Core ROTCE was up to 9.8% and our adjusted efficiency ratio was 44% in the…

Okay, great. Thanks, JB. As we move into Q&A, we do request that you limit yourself to one question plus a single follow-up. If you have additional follow-up questions after the call, the Investor Relations team will be available. Sandra, if you could please start the Q&A?

Certainly. Your first question comes from Cheryl Pate from Morgan Stanley. Please go ahead. Jeffrey Brown - Chief Executive Officer & Director: Hi, Cheryl. Cheryl M. Pate - Morgan Stanley & Co. LLC: Hi, good morning and congratulations on a strong performance. Look, I think – the stock price is obviously reflecting a pretty bearish expectation from investors and I'm just wondering if maybe you can help us think through some additional detail on the reserving policy in terms of expectations for residual values, used car pricing and sort of the stressing that you go through there? And then, related to that, can you maybe give us some more detail on how to think about the portfolio today relative to where we were in the last credit cycle? Thanks. Jeffrey Brown - Chief Executive Officer & Director: Sure, let me start. I think the first thing to point out is that we expect our charge-off rate to drift up another 10 basis points to 15 basis points over the next year. And that really has to do with the normalization of our mix as some of the older vintages roll off and some of the new mix that we're putting on comes on the books. We've been pretty open about where we see used car prices coming down. We've actually been wrong. I mean, used car prices have held up pretty well over the last year or so, and we haven't necessarily seen the dip that we've expected. But we still expect that; we still model those used car prices to come down about 5% a year. Now, as the lease portfolio runs down, obviously our risk to used car prices continues to come off the books as well. And while used car prices have an effect on the overall…

Thank you. We have another question for you. Apologies for pronunciation, this one is from Moshe Orenbuch from Credit Suisse. Please go ahead. Moshe Ari Orenbuch - Credit Suisse Securities (USA) LLC (Broker): Great. Thanks very much. I guess maybe, JB you mentioned the ideas and plans to accelerate the return on common equity. Could you talk a little bit about how the mortgage and commercial businesses fit into that because I guess, I'm struck with the stock here at two thirds of adjusted book value as to whether in fact pulling back on some of those things and kind of looking to return more capital might be of greater interest than expansion and just also could you mention how does that DTA figure into your plans for capital return? Jeffrey Brown - Chief Executive Officer & Director: Sure. So, thanks for the question. So, I mean look, I think you bring up a very fair point given where the stock currently trades at the high hurdle rate to consider any type of growth objective versus thinking about capital returns. I think as you know very well in this type of regulated environment with the CCAR process, capital returns are not as fluid as one may want to believe. So you seek to try to balance all these angles all the time. With respect specifically to the mortgage business, I mean, one of the advantages relative to auto, it's part of the reason we like it is 50% risk weighted assets, funds through the [flubs] (32:14), it's a very efficient asset and it generates a pretty attractive ROE, think about it in the 14%, 15% type of range there. And so, some modest expansion there, some modest diversification there makes sense to us. On the Corporate Finance book, given the success we've had in moving that business into the bank, that's generating returns in the neighborhood of 17%, 18%. So growth in those arenas seem to make sense to overall contribution of ROE growth over a longer horizon. I mean, I think as we've said, Auto businesses kind of hovers in this 9% to 10% type of range given the risk profile that we're comfortable with. And so these other areas provide steps towards that ROE expansion in addition to the continued financial engineering, expense normalization that we continue to go after. So that's on that piece and then Chris, you want to highlight on DTA.

Yeah, I mean obviously the amortization of the disallowed DTA is creating capital for us. I would point out however that the Fed, when they put out their guidance around capital returns, really focus on the earnings and the earnings power of the company as opposed to the amortizing DTA. So when I think about capital return, I think about it as a percentage of our earnings and a little less about the amortization of the DTA. Think about the amortization of DTA as incremental capital that we can use to either grow some of these high ROE type businesses. Jeffrey Brown - Chief Executive Officer & Director: Yeah. Moshe Ari Orenbuch - Credit Suisse Securities (USA) LLC (Broker): Great. Thanks very much. Jeffrey Brown - Chief Executive Officer & Director: Thanks.

And we have another question for you. Apologies again for pronunciation, this one is from Chris Donat and he is from Sandler O'Neill. Please go ahead. Jeffrey Brown - Chief Executive Officer & Director: Hey Chris. Christopher R. Donat - Sandler O'Neill & Partners LP: Thanks for taking my question and thanks for the pronunciation actually. Wanted to ask on the – and I know you're going to give us more detail at the Investor Day but just as we think about your origination platform and how you've been able to move more into the used channel, there's so many concerns around used car prices. Can you give us some color on what you would expect to happen in the used car market, say if prices go down not 5%, but 10%, does that create much more opportunity for you to originate on used? Or is it sort of weigh on you? I'm just trying to figure out if there are sort of offsets on the new channel or on recovery values if something goes bad in used car pricing? Jeffrey Brown - Chief Executive Officer & Director: Yeah, I don't think about it as a determinant on the originations, but obviously on the amount we lend against the car and the LTVs are determinant on those car prices. But keep in mind, used car when we originate a loan for a used car, the predictability of where the value of that car is going over the next few years is pretty consistent, I mean we can predict that pretty well. Where you really see the drop off is really on a new car once it rolls off a lot and you see a much bigger drop in the value of that car and it's much harder to predict because it's a brand new car and you haven't seen it. So if we're out financing two-year, three-year, four-year old cars, believe me, from a loss perspective, we're very comfortable with that and honestly over the last year as we've gotten more and more into used, where we've really exceeded from a loss perspective, where we've done better than expected really has been in the used car channel. It's been very consistent, so I wouldn't' think that the overall drop in used car prices that we're expecting is going to be a significant driver really of our loss rate in used cars at this point. Christopher R. Donat - Sandler O'Neill & Partners LP: Okay. And then is it fair to say that if – as your mix shift moves towards more used on your balance sheet that your loss content is likely to shrink just because the used are so much more predictable than new?

What you see – it's a dynamics between the frequency and the severity. As you do more used cars, your frequency increases, but your severity is actually better and much more predictive. So I would say it's fairly balanced and we keep to where our loss projections are going to be. And right now we're doing about 40% of our business in used. So when I tell you that I think losses will take up another 10 basis points to 15 basis points, that takes that assumption into account. Christopher R. Donat - Sandler O'Neill & Partners LP: Okay, got it. Thanks Chris.

Thank you. We have another question for you. This one is from Eric Beardsley from Goldman Sachs. Please go ahead. You're live in the call. Eric Beardsley - Goldman Sachs & Co.: Hi, thank you. Just to follow-up on your comment that you look to prioritize shareholder value over growth, I guess given the runoff in the lease portfolio, is that something that you would consider selling and also your auction business?

No. I mean, first of all keep in the mind, we're still in the leasing business. So while our GM Subvented lease has come down and will continue to come down pretty significantly, we still do leasing and we still do it in other channels. So it's not a business we're looking to exit and therefore really not looking to sell it. We have a pretty good infrastructure around lease and we feel like we do it very well. The other thing, it's a core offering along with the SmartAuction channel that we have, which is a significant offering we have to our dealer relationships. And at this point we don't have any plans really to divest of that. Eric Beardsley - Goldman Sachs & Co.: Okay, great. And just a follow-up, on the charge-offs, I guess on the 14% of originations that were subprime, what's your charge-off expectation on those loans specifically?

Yeah, if you think about our – what we call kind of non-prime anything under 620, the rates are around 3%. Eric Beardsley - Goldman Sachs & Co.: Okay, great, thank you.

On an annualized perspective. So I mean keep that in mind guys. I mean people often think about our non-prime channel. I mean, our non-prime channel is a 3% loss channel. It's not a 10%, it's not an 8%, it's not a 12%, it's a 3%. And when I look at the charge-offs even in the fourth quarter in that non-prime segment, it's $75 million, that's it. Eric Beardsley - Goldman Sachs & Co.: Great, thanks. Jeffrey Brown - Chief Executive Officer & Director: Thanks, Eric.

Thank you. We have another question for you. This one is from – apologies for pronunciation, Eric Wasserstrom from Guggenheim Securities. Please go ahead.

Thanks very much. I just wanted to circle back on the capital question for a moment, because your fully phased in number of 8.7% would put you at the lower end of peer group and probably among the lower end of CCAR banks given you risk exposure. So how do you think about the long term sort of adequacy of capital and what would be your target accretion subsequent to some sustainable level of capital return? Jeffrey Brown - Chief Executive Officer & Director: Yeah, I mean the way we think about it today is a 9% common equity tier 1 ratio is really the benchmark that we look at and where we have set some of our board targets and we believe that's appropriate for the risk profile of the assets that we have on the books and the assets we plan to originate in the next few years. Now, having said that, I realize that's lower than most of the other CCAR banks but its lower because we have a lower loss asset compared to a lot of the other regional type banks. So, we're very comfortable at that 9%. The fully phased-in is at 8.7%, I expect that to rise over 9% when we actually get fully phased-in and when you think about CCAR, it actually uses the transitional number which is at 9.3%. So, when I think about our capital floating over the 9% number as we generate earnings and even accrete the DTA, I think about that as incremental capital that we can deploy. So, whether that deployment is either going to be through returning it to shareholders through dividends and share buybacks or other type of growth that we think the growth really creates long-term shareholder value.

And Chris, just on the – I mean what would be your expectation for sort of annual accretion to that figure?

I mean, I want to keep it down towards the 9%. So, this company is going to generate – we are going to generate over $1 billion of earnings a year and my expectation is we should be able to deploy that. Jeffrey Brown - Chief Executive Officer & Director: So Eric, I mean, I think what Chris is basically saying look, 9% is kind of the go-forward target. So as we generate returns that would take us in excess of that, you can kind of back into our overall capital deployment strategy. It would be again subject to CCAR and would be a combination of some dividend and buybacks.

Thanks very much. Jeffrey Brown - Chief Executive Officer & Director: Thanks, Eric.

Thank you for your question. We have another one for you. This one is from Ken Bruce from Merrill Lynch. Please go ahead.

Thank you and good morning. I guess my name is easier to pronounce. First of all, congratulations on a good year. You're clearly frustrated by the stock performance, as I think many of us are. I'm interested in what you think the market needs to see from Ally. You've delivered on all the targets, as you point out, creditability matters. And you seem to have basically hit your targets and then some. Clearly, the market is thinking about this in a very different context. You seemed to be linked to some of the other public non-prime lenders, which unfortunately the history has not been all that great for those companies in this industry in general. So I guess I'm interested in what you think you need to do to change the way the market perceives Ally. Jeffrey Brown - Chief Executive Officer & Director: Yeah. So, Ken, thanks for the question. I think it's – obviously, it's spot on. And I think it's part of what we try to take a step forward and do today, which was really, look, we have been very focused on delivering what we put out to all of you. We don't try to get out over our skis. We try to deliver on what we promised to you, because we do believe creditability matters. And over a longer horizon, you generate book value, you put points on the board, eventually the stock's going to come around. There have been a number of theories, and we spend a lot of time talking to investors. We spend a lot of time talking to the analyst community as well and try to understand, is it the credit cycle? Is there fear that Ally is subject to a big credit bubble? We tried to dispel that today because…

One follow-up. I guess, as you think about car prices maybe falling 5%, obviously you've kind of pointed that that's been persistently better than expected, what is it that you are looking at that makes you think that used car values, or just car prices in general, could see that 5% reduction over the next year or so? And just so we kind of understand what goes into the model.

Sure. It's really a supply and demand dynamic and as leasing picked up a few years ago, a lot of those cars are coming off lease creating incremental used car supply into the market. Where we've really been surprised over the last year or so has been on demand side. So the demand has really risen and met that supply hurdle. So as we look forward, we continue thinking that the demand may not be as robust as it's been and we're pretty conservative on that. But it's really that supply/demand dynamic that makes us believe some of the used car prices will come down.

Great. Thank you. Jeffrey Brown - Chief Executive Officer & Director: Thanks, Ken.

Thank you. We have another question for you. This one is from David Ho, Deutsche Bank. Please go ahead.

Good morning, and I definitely share the – sympathetic on the stock price here. Can you talk a little bit about on competition and how that's changed this year so far? I know it's pretty early, but seems like there is a little more competition from smaller players? And then, what are your prospects or prediction for any kind of market disruption and where do you think you could take share in that scenario? Thanks. Jeffrey Brown - Chief Executive Officer & Director: Yeah I mean, competition has been very pretty steady over the last year. I don't think we've seen any real incremental competition at least for the retail auto loans that we're overly concerned about. Obviously, some of the small players, even though a lot of the credit unions been very competitive with us particularly in the high FICO type space. We've seen more of the competition really on the dealer floorplan side. It's a very low loss business and we see a lot the big banks really competing for that business pretty aggressively from a pricing perspective, but I would say that in the retail channel, it's been pretty steady over the last year or so. We've actually started to see some areas or pockets where prices are increasing over the last couple of months, which I think is a positive sign given some of the short end rates have actually come up a bit. So I think you're seeing some good momentum there and hopefully that continues. When I think about kind of through the cycle and gaining market share and disruptions, one of the places we often think about or focus on really is the capital markets and when you see disruptions in the capital markets and where liquidity is either going to get more expensive or more difficult to obtain, having the large deposit base that we now have should allow us to really take some market share because we feel pretty confident in the liquidity that we have, so I point you to that over the cycle. We think that's one of the places of strength for us where you'll see us really grow the market share.

Okay, thanks. And separately on credit, one of your competitors on the bank side called out some weakness and some particular MSAs due to energy and seems like Texas is fairly larger exposure for you guys. Can you comment on any weakness in those MSAs? Jeffrey Brown - Chief Executive Officer & Director: Yeah, we're watching. We watch this stuff very closely and we continue to watch it closely. Now Texas is a big state and Texas has a very diverse business environment today, so it's not all energy, but there are pockets within places like Texas or Oklahoma, or West Virginia that obviously rely on lot of the energy sector. We're not seeing much change in the book right now, so we're not seeing any significant rise in delinquencies in those areas, but it's something I would tell you that we're keeping a pretty close eye on and to the extent that we need to either pull back or make decisions around places that could be under pressure from an unemployment perspective we'll do that. But right now we're not seeing anything significant.

Great. Thanks for the color. Jeffrey Brown - Chief Executive Officer & Director: Thanks, David.

Thank you. We have another question for you, apologies for pronunciation. This one is from Sanjay Sakhrani from KBW. Please go ahead. Sanjay Sakhrani - Keefe, Bruyette & Woods, Inc.: Thank you. I guess I wanted to follow along with some of the questions that were asked previously. JB, I appreciate all the comments at the outset of the call, but you mentioned that you guys would consider all the options to drive shareholder value. Obviously we have talked about some of them and maybe you could just kind of go through them little bit. Obviously, there is a disconnect between fundamentals and the stock, but what options do you have available to you in this backdrop? And I guess one of the questions on a related matter is just when we think about your capital return expectations. I mean is it possible that more of a focus is given to the share buyback versus dividend? Thanks. Jeffrey Brown - Chief Executive Officer & Director: Sure. I mean some the strategic options obviously – the questions what has come up in front of us is – could the company be sold? Could it be sold in total? Could it be sold in pieces? Would you be open to that? I think obviously, we have a strong belief in the outlook of the company, but we also have a strong understanding of the regulatory environment. And while you've seen some recent progress and a few bank deals getting done, I mean, you'd have to go back pre-crisis before you could see any type of deal that approach anywhere near our size. And so I don't want to imply that a sale in total is not possible, but my phone is open every single day and it's not ringing. So let's take…

We continue to look at that 75% of earnings as the level we're targeting. We did receive the CCAR scenarios late last week. We're going through them. We're digesting them, and so obviously over the next month or two, we'll be crunching the numbers and going through the stress tests, and will have to make kind of the final decision on what we're going to submit for our capital return. So I don't have any better information just because the numbers haven't been calculated yet, but we're still targeting something in that area. I would also say to your earlier question Sanjay, we do expect that share buybacks would be higher than the dividend. So we would skew this much more towards the share buyback side. Sanjay Sakhrani - Keefe, Bruyette & Woods, Inc.: All right, thank you.

Thank you for your questions. We'll now hand back to Michael Brown for closing remarks. Thank you.

Thanks, Sandra. If you have additional questions, please feel free to reach out to Investor Relations after the call. Thanks for joining us this morning. Thanks, Sandra. Jeffrey Brown - Chief Executive Officer & Director: Thank you.

You're welcome. Thank you, ladies and gentlemen. That concludes your conference call for today. You may now disconnect. Thank you for joining and enjoy the rest of your day.