EX-12 2 exhibit1220120930.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12 2012.09.30


Exhibit 12
Ally Financial Inc.

Ratio of Earnings to Fixed Charges
 
 
Nine months ended September 30,
 
Year ended December 31,
($ in millions)
2012 (a)
 
2011 (a)
2010 (a)
2009 (a)
2008 (a)
2007 (a)
Earnings
 
 
 
 
 
 
 
Consolidated net (loss) income from continuing operations
$
(172
)
 
$
(112
)
$
986

$
(6,983
)
$
4,863

$
(1,950
)
Income tax expense (benefit) from continuing operations
172

 
179

153

74

(150
)
477

Equity-method investee distribution
—

 
—

—

—

111

65

Equity-method investee (earnings) losses
(68
)
 
(87
)
(57
)
(10
)
533

5

Minority interest expense
1

 
1

1

1

1

2

Consolidated (loss) income from continuing operations before income taxes, minority interest, and income or loss from equity investees
(67
)
 
(19
)
1,083

(6,918
)
5,358

(1,401
)
Fixed charges
4,010

 
6,298

6,743

7,017

10,041

13,592

Earnings available for fixed charges
$
3,943

 
$
6,279

$
7,826

$
99

$
15,399

$
12,191

Fixed charges
 
 
 
 
 
 
 
Interest, discount, and issuance expense on debt
$
3,989

 
$
6,266

$
6,712

$
6,984

$
9,991

$
13,533

Portion of rentals representative of the interest factor
21

 
32

31

33

50

59

Total fixed charges
4,010

 
6,298

6,743

7,017

10,041

13,592

Preferred dividend requirements (b)
601

 
763

2,149

1,224

—

192

Total fixed charges and preferred dividend requirements
$
4,611

 
$
7,061

$
8,892

$
8,241

$
10,041

$
13,784

Ratio of earning to fixed charges (c)
0.98

 
0.99

1.16

0.01

1.53

0.90

Ratio of earnings to fixed charges and preferred dividend requirements (d)
0.86

 
0.89

0.88

0.01

1.53

0.88

(a)
During 2011, 2010, and 2009, we committed to sell certain operations of our International Automotive Finance operations, Insurance operations, Mortgage operations, and Commercial Finance Group. We report these businesses separately as discontinued operations in the Condensed Consolidated Financial Statements. Refer to Note 2 to the Condensed Consolidated Financial Statements for further discussion of our discontinued operations. All reported periods of the calculation of the ratio of earnings to fixed charges exclude discontinued operations.
(b)
Amount for 2010 includes a $616 million reduction to retained earnings (accumulated deficit) related to a conversion of preferred stock and related amendment that occurred on December 30, 2010.
(c)
The ratio indicates a less than one-to-one coverage for the nine months ended September 30, 2012, and the years ended December 31, 2011, 2009, and 2007. Earnings for the nine months ended September 30, 2012, and the years ended December 31, 2011, 2009, and 2007 were inadequate to cover fixed charges. The deficient amounts for the ratio were $67 million for the nine months ended September 30, 2012, and $19 million, $6,918 million, and $1,401 million for the years ended December 31, 2011, 2009, and 2007, respectively.
(d)
The ratio indicates a less than one-to-one coverage for the nine months ended September 30, 2012, and the years ended December 31, 2011, 2010, 2009, and 2007. Earnings for the nine months ended September 30, 2012, and the years ended December 31, 2011, 2010, 2009, and 2007 were inadequate to cover total fixed charges and preferred dividend requirements. The deficient amounts for the ratio were $668 million for the nine months ended September 30, 2012, and $782 million, $1,066 million, $8,142 million, and $1,593 million for the years ended December 31, 2011, 2010, 2009, and 2007, respectively.