þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 38-0572512 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
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PART I — FINANCIAL INFORMATION |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Financing revenue and other interest income | ||||||||||||||||
Interest and fees on finance receivables and loans | $ | 1,166 | $ | 1,114 | $ | 3,358 | $ | 3,345 | ||||||||
Interest on loans held-for-sale | 2 | — | 40 | 1 | ||||||||||||
Interest and dividends on available-for-sale investment securities | 102 | 94 | 283 | 282 | ||||||||||||
Interest on cash and cash equivalents | 2 | 2 | 6 | 6 | ||||||||||||
Operating leases | 830 | 899 | 2,586 | 2,653 | ||||||||||||
Total financing revenue and other interest income | 2,102 | 2,109 | 6,273 | 6,287 | ||||||||||||
Interest expense | ||||||||||||||||
Interest on deposits | 181 | 166 | 530 | 495 | ||||||||||||
Interest on short-term borrowings | 13 | 12 | 36 | 40 | ||||||||||||
Interest on long-term debt | 410 | 493 | 1,258 | 1,576 | ||||||||||||
Total interest expense | 604 | 671 | 1,824 | 2,111 | ||||||||||||
Depreciation expense on operating lease assets | 528 | 549 | 1,713 | 1,600 | ||||||||||||
Net financing revenue | 970 | 889 | 2,736 | 2,576 | ||||||||||||
Other revenue | ||||||||||||||||
Servicing fees | 12 | 6 | 32 | 22 | ||||||||||||
Insurance premiums and service revenue earned | 236 | 246 | 706 | 736 | ||||||||||||
(Loss) gain on mortgage and automotive loans, net | (2 | ) | — | 45 | 6 | |||||||||||
Loss on extinguishment of debt | — | — | (354 | ) | (46 | ) | ||||||||||
Other gain on investments, net | 6 | 45 | 106 | 129 | ||||||||||||
Other income, net of losses | 80 | 78 | 251 | 214 | ||||||||||||
Total other revenue | 332 | 375 | 786 | 1,061 | ||||||||||||
Total net revenue | 1,302 | 1,264 | 3,522 | 3,637 | ||||||||||||
Provision for loan losses | 211 | 102 | 467 | 302 | ||||||||||||
Noninterest expense | ||||||||||||||||
Compensation and benefits expense | 235 | 241 | 726 | 710 | ||||||||||||
Insurance losses and loss adjustment expenses | 61 | 97 | 239 | 353 | ||||||||||||
Other operating expenses | 378 | 404 | 1,128 | 1,213 | ||||||||||||
Total noninterest expense | 674 | 742 | 2,093 | 2,276 | ||||||||||||
Income from continuing operations before income tax expense | 417 | 420 | 962 | 1,059 | ||||||||||||
Income tax expense from continuing operations | 144 | 127 | 341 | 285 | ||||||||||||
Net income from continuing operations | 273 | 293 | 621 | 774 | ||||||||||||
(Loss) income from discontinued operations, net of tax | (5 | ) | 130 | 405 | 199 | |||||||||||
Net income | 268 | 423 | 1,026 | 973 | ||||||||||||
Other comprehensive income (loss), net of tax | 61 | (55 | ) | (56 | ) | 126 | ||||||||||
Comprehensive income | $ | 329 | $ | 368 | $ | 970 | $ | 1,099 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in dollars) (a) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Basic earnings per common share | ||||||||||||||||
Net income (loss) from continuing operations | $ | 0.49 | $ | 0.47 | $ | (1.52 | ) | $ | 1.19 | |||||||
(Loss) income from discontinued operations, net of tax | (0.01 | ) | 0.27 | 0.84 | 0.41 | |||||||||||
Net income (loss) | $ | 0.48 | $ | 0.74 | $ | (0.68 | ) | $ | 1.60 | |||||||
Diluted earnings per common share | ||||||||||||||||
Net income (loss) from continuing operations | $ | 0.49 | $ | 0.47 | $ | (1.52 | ) | $ | 1.19 | |||||||
(Loss) income from discontinued operations, net of tax | (0.01 | ) | 0.27 | 0.84 | 0.41 | |||||||||||
Net income (loss) | $ | 0.47 | $ | 0.74 | $ | (0.68 | ) | $ | 1.60 |
(a) | Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers. |
($ in millions, except share data) | September 30, 2015 | December 31, 2014 | ||||||
Assets | ||||||||
Cash and cash equivalents | ||||||||
Noninterest-bearing | $ | 1,666 | $ | 1,348 | ||||
Interest-bearing | 3,561 | 4,228 | ||||||
Total cash and cash equivalents | 5,227 | 5,576 | ||||||
Investment securities (Refer to Note 5 for discussion of investment securities pledged as collateral) | 18,758 | 16,137 | ||||||
Loans held-for-sale, net | 37 | 2,003 | ||||||
Finance receivables and loans, net | ||||||||
Finance receivables and loans, net of unearned income | 107,991 | 99,948 | ||||||
Allowance for loan losses | (1,018 | ) | (977 | ) | ||||
Total finance receivables and loans, net | 106,973 | 98,971 | ||||||
Investment in operating leases, net | 17,292 | 19,510 | ||||||
Premiums receivable and other insurance assets | 1,794 | 1,695 | ||||||
Other assets | 6,024 | 7,302 | ||||||
Assets of operations held-for-sale | — | 634 | ||||||
Total assets | $ | 156,105 | $ | 151,828 | ||||
Liabilities | ||||||||
Deposit liabilities | ||||||||
Noninterest-bearing | $ | 91 | $ | 64 | ||||
Interest-bearing | 63,950 | 58,158 | ||||||
Total deposit liabilities | 64,041 | 58,222 | ||||||
Short-term borrowings | 5,378 | 7,062 | ||||||
Long-term debt | 67,461 | 66,558 | ||||||
Interest payable | 437 | 477 | ||||||
Unearned insurance premiums and service revenue | 2,438 | 2,375 | ||||||
Accrued expenses and other liabilities | 1,751 | 1,735 | ||||||
Total liabilities | 141,506 | 136,429 | ||||||
Contingencies (refer to Note 26) | ||||||||
Equity | ||||||||
Common stock and paid-in capital ($0.01 par value, shares authorized 1,100,000,000; issued 482,552,750 and 480,136,039; and outstanding 481,750,247 and 480,094,891) | 21,082 | 21,038 | ||||||
Preferred stock | 813 | 1,255 | ||||||
Accumulated deficit | (7,158 | ) | (6,828 | ) | ||||
Accumulated other comprehensive loss | (122 | ) | (66 | ) | ||||
Treasury stock, at cost (802,503 shares) | (16 | ) | — | |||||
Total equity | 14,599 | 15,399 | ||||||
Total liabilities and equity | $ | 156,105 | $ | 151,828 |
($ in millions) | September 30, 2015 | December 31, 2014 | ||||||
Assets | ||||||||
Finance receivables and loans, net | ||||||||
Finance receivables and loans, net of unearned income | $ | 27,165 | $ | 30,081 | ||||
Allowance for loan losses | (191 | ) | (179 | ) | ||||
Total finance receivables and loans, net | 26,974 | 29,902 | ||||||
Investment in operating leases, net | 5,916 | 5,595 | ||||||
Other assets | 1,410 | 2,010 | ||||||
Total assets | $ | 34,300 | $ | 37,507 | ||||
Liabilities | ||||||||
Long-term debt | $ | 21,946 | $ | 24,343 | ||||
Accrued expenses and other liabilities | 27 | 173 | ||||||
Total liabilities | $ | 21,973 | $ | 24,516 |
($ in millions) | Common stock and paid-in capital | Preferred stock | Accumulated deficit | Accumulated other comprehensive (loss) income | Treasury stock | Total equity | |||||||||||||||||
Balance at January 1, 2014 | $ | 20,939 | $ | 1,255 | $ | (7,710 | ) | $ | (276 | ) | $ | — | $ | 14,208 | |||||||||
Net income | 973 | 973 | |||||||||||||||||||||
Preferred stock dividends | (200 | ) | (200 | ) | |||||||||||||||||||
Share-based compensation | 83 | 83 | |||||||||||||||||||||
Other comprehensive income | 126 | 126 | |||||||||||||||||||||
Balance at September 30, 2014 | $ | 21,022 | $ | 1,255 | $ | (6,937 | ) | $ | (150 | ) | $ | — | $ | 15,190 | |||||||||
Balance at January 1, 2015 | $ | 21,038 | $ | 1,255 | $ | (6,828 | ) | $ | (66 | ) | $ | — | $ | 15,399 | |||||||||
Net income | 1,026 | 1,026 | |||||||||||||||||||||
Preferred stock dividends | (1,356 | ) | (a) | (1,356 | ) | ||||||||||||||||||
Series A preferred stock repurchase | (325 | ) | (325 | ) | |||||||||||||||||||
Series G preferred stock redemption | (117 | ) | (117 | ) | |||||||||||||||||||
Share-based compensation | 44 | 44 | |||||||||||||||||||||
Other comprehensive loss | (56 | ) | (56 | ) | |||||||||||||||||||
Share repurchases related to employee stock-based compensation awards | (16 | ) | (16 | ) | |||||||||||||||||||
Balance at September 30, 2015 | $ | 21,082 | $ | 813 | $ | (7,158 | ) | $ | (122 | ) | $ | (16 | ) | $ | 14,599 |
(a) | Preferred stock dividends include $1,193 million recognized in connection with the partial redemption of the Series G Preferred Stock and the repurchase of the Series A Preferred Stock. These dividends represent an additional return to preferred shareholders calculated as the excess consideration paid over the carrying amount derecognized. Refer to Note 16 for additional preferred stock information. |
Nine months ended September 30, ($ in millions) | 2015 | 2014 | ||||||
Operating activities | ||||||||
Net income | $ | 1,026 | $ | 973 | ||||
Reconciliation of net income to net cash provided by operating activities | ||||||||
Depreciation and amortization | 2,130 | 2,133 | ||||||
Provision for loan losses | 467 | 302 | ||||||
Gain on mortgage and automotive loans, net | (45 | ) | (6 | ) | ||||
Other gain on investments, net | (106 | ) | (129 | ) | ||||
Loss on extinguishment of debt | 354 | 46 | ||||||
Originations and purchases of loans held-for-sale | (1,594 | ) | — | |||||
Proceeds from sales and repayments of loans originated as held-for-sale | 1,580 | 59 | ||||||
Impairment and settlement related to Residential Capital, LLC | — | (150 | ) | |||||
(Gain) loss on sale of subsidiaries, net | (452 | ) | 7 | |||||
Net change in | ||||||||
Deferred income taxes | 406 | 174 | ||||||
Interest payable | (40 | ) | (346 | ) | ||||
Other assets | 528 | 42 | ||||||
Other liabilities | (212 | ) | (529 | ) | ||||
Other, net | (88 | ) | (118 | ) | ||||
Net cash provided by operating activities | 3,954 | 2,458 | ||||||
Investing activities | ||||||||
Purchases of available-for-sale securities | (10,011 | ) | (4,117 | ) | ||||
Proceeds from sales of available-for-sale securities | 4,408 | 2,974 | ||||||
Proceeds from maturities and repayment of available-for-sale securities | 3,141 | 1,877 | ||||||
Net increase in finance receivables and loans | (9,175 | ) | (1,267 | ) | ||||
Proceeds from sales of finance receivables and loans | 2,665 | 1,557 | ||||||
Purchases of operating lease assets | (3,423 | ) | (7,770 | ) | ||||
Disposals of operating lease assets | 3,855 | 4,505 | ||||||
Proceeds from sale of business units, net (a) | 1,049 | 47 | ||||||
Net change in restricted cash | 489 | 2,128 | ||||||
Other, net | (17 | ) | 71 | |||||
Net cash (used in) provided by investing activities | (7,019 | ) | 5 |
Nine months ended September 30, ($ in millions) | 2015 | 2014 | ||||||
Financing activities | ||||||||
Net change in short-term borrowings | (1,692 | ) | (3,298 | ) | ||||
Net increase in deposits | 5,819 | 3,501 | ||||||
Proceeds from issuance of long-term debt | 23,844 | 18,942 | ||||||
Repayments of long-term debt | (23,454 | ) | (21,239 | ) | ||||
Repurchase and redemption of preferred stock | (442 | ) | — | |||||
Dividends paid on preferred stock | (1,356 | ) | (200 | ) | ||||
Net cash provided by (used in) financing activities | 2,719 | (2,294 | ) | |||||
Effect of exchange-rate changes on cash and cash equivalents | (3 | ) | (1 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (349 | ) | 168 | |||||
Cash and cash equivalents at beginning of year | 5,576 | 5,531 | ||||||
Cash and cash equivalents at September 30, | $ | 5,227 | $ | 5,699 | ||||
Supplemental disclosures | ||||||||
Cash paid for | ||||||||
Interest | $ | 1,825 | $ | 2,380 | ||||
Income taxes | 95 | 13 | ||||||
Noncash items | ||||||||
Finance receivables and loans transferred to loans held-for-sale | 777 | 1,602 | ||||||
Other disclosures | ||||||||
Proceeds from sales and repayments of mortgage loans held-for-investment originally designated as held-for-sale | 61 | 29 |
(a) | Cash flows of discontinued operations are reflected within operating, investing, and financing activities in the Condensed Consolidated Statement of Cash Flows. The cash balance of these operations is reported as assets of operations held-for-sale on the Condensed Consolidated Balance Sheet. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Select Automotive Finance operations | |||||||||||||||
Total net revenue | $ | — | $ | 29 | $ | — | $ | 95 | |||||||
Pretax (loss) income including direct costs to transact a sale (a) | (1 | ) | 46 | 452 | 101 | ||||||||||
Tax expense (b) | 3 | — | 68 | 4 | |||||||||||
Other operations | |||||||||||||||
Pretax (loss) income | $ | (1 | ) | $ | 5 | $ | 19 | $ | 25 | ||||||
Tax benefit | — | (79 | ) | (2 | ) | (77 | ) |
(a) | Includes certain treasury and other corporate activity recognized by Corporate and Other. |
(b) | Includes certain income tax activity recognized by Corporate and Other. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Remarketing fees | $ | 25 | $ | 28 | $ | 78 | $ | 85 | |||||||
Late charges and other administrative fees | 23 | 23 | 66 | 66 | |||||||||||
Income from equity-method investments | 11 | 5 | 48 | 13 | |||||||||||
Other, net | 21 | 22 | 59 | 50 | |||||||||||
Total other income, net of losses | $ | 80 | $ | 78 | $ | 251 | $ | 214 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Insurance commissions | $ | 95 | $ | 95 | $ | 283 | $ | 279 | |||||||
Technology and communications | 65 | 77 | 198 | 255 | |||||||||||
Lease and loan administration | 31 | 32 | 92 | 92 | |||||||||||
Advertising and marketing | 26 | 27 | 80 | 81 | |||||||||||
Professional services | 23 | 20 | 68 | 73 | |||||||||||
Premises and equipment depreciation | 20 | 23 | 62 | 61 | |||||||||||
Regulatory and licensing fees | 18 | 23 | 59 | 69 | |||||||||||
Vehicle remarketing and repossession | 20 | 22 | 56 | 61 | |||||||||||
Occupancy | 13 | 12 | 38 | 34 | |||||||||||
Non-income taxes | 11 | 12 | 26 | 32 | |||||||||||
Other | 56 | 61 | 166 | 176 | |||||||||||
Total other operating expenses | $ | 378 | $ | 404 | $ | 1,128 | $ | 1,213 |
September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized | Fair value | Amortized cost | Gross unrealized | Fair value | |||||||||||||||||||||||||||
($ in millions) | gains | losses | gains | losses | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||||||
Debt securities | ||||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies | $ | 1,805 | $ | 5 | $ | (1 | ) | $ | 1,809 | $ | 1,195 | $ | 1 | $ | (18 | ) | $ | 1,178 | ||||||||||||||
U.S. States and political subdivisions | 635 | 17 | (1 | ) | 651 | 389 | 17 | — | 406 | |||||||||||||||||||||||
Foreign government | 176 | 8 | — | 184 | 224 | 8 | — | 232 | ||||||||||||||||||||||||
Mortgage-backed residential (a) | 11,560 | 130 | (76 | ) | 11,614 | 10,431 | 119 | (125 | ) | 10,425 | ||||||||||||||||||||||
Mortgage-backed commercial | 519 | — | (2 | ) | 517 | 254 | — | (1 | ) | 253 | ||||||||||||||||||||||
Asset-backed | 1,947 | 6 | (2 | ) | 1,951 | 1,989 | 5 | (3 | ) | 1,991 | ||||||||||||||||||||||
Corporate debt | 1,043 | 13 | (9 | ) | 1,047 | 734 | 14 | (2 | ) | 746 | ||||||||||||||||||||||
Total debt securities (b) (c) | 17,685 | 179 | (91 | ) | 17,773 | 15,216 | 164 | (149 | ) | 15,231 | ||||||||||||||||||||||
Equity securities | 1,097 | 1 | (113 | ) | 985 | 891 | 49 | (34 | ) | 906 | ||||||||||||||||||||||
Total available-for-sale securities | $ | 18,782 | $ | 180 | $ | (204 | ) | $ | 18,758 | $ | 16,107 | $ | 213 | $ | (183 | ) | $ | 16,137 |
(a) | Residential mortgage-backed securities include agency-backed bonds totaling $8,536 million and $7,557 million at September 30, 2015, and December 31, 2014, respectively. |
(b) | Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. Amounts deposited totaled $15 million at both September 30, 2015, and December 31, 2014. |
(c) | Investment securities with a fair value of $1,702 million and $801 million at September 30, 2015, and December 31, 2014, were pledged to secure short-term borrowings or repurchase agreements and for other purposes as required by contractual obligation or law. Under these agreements, Ally has granted the counterparty the right to sell or pledge the underlying investment securities. |
Total | Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years (a) | |||||||||||||||||||||||||||||||
($ in millions) | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||||||||
September 30, 2015 | |||||||||||||||||||||||||||||||||||
Fair value of available-for-sale debt securities | |||||||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies | $ | 1,809 | 1.6 | % | $ | 7 | 5.0 | % | $ | 905 | 1.2 | % | $ | 897 | 2.1 | % | $ | — | — | % | |||||||||||||||
U.S. States and political subdivisions | 651 | 3.3 | 53 | 2.2 | 48 | 2.2 | 130 | 2.9 | 420 | 3.7 | |||||||||||||||||||||||||
Foreign government | 184 | 2.6 | 9 | 1.4 | 82 | 2.7 | 93 | 2.7 | — | — | |||||||||||||||||||||||||
Mortgage-backed residential | 11,614 | 2.8 | — | — | 38 | 2.1 | 40 | 2.5 | 11,536 | 2.8 | |||||||||||||||||||||||||
Mortgage-backed commercial | 517 | 1.9 | — | — | — | — | 3 | 2.7 | 514 | 1.9 | |||||||||||||||||||||||||
Asset-backed | 1,951 | 2.1 | 4 | 1.4 | 1,189 | 2.0 | 553 | 2.4 | 205 | 2.2 | |||||||||||||||||||||||||
Corporate debt | 1,047 | 2.9 | 48 | 3.1 | 601 | 2.5 | 368 | 3.3 | 30 | 5.5 | |||||||||||||||||||||||||
Total available-for-sale debt securities | $ | 17,773 | 2.6 | $ | 121 | 2.6 | $ | 2,863 | 1.9 | $ | 2,084 | 2.5 | $ | 12,705 | 2.8 | ||||||||||||||||||||
Amortized cost of available-for-sale debt securities | $ | 17,685 | $ | 120 | $ | 2,854 | $ | 2,067 | $ | 12,644 | |||||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||||||
Fair value of available-for-sale debt securities | |||||||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies | $ | 1,178 | 1.5 | % | $ | 7 | 3.0 | % | $ | 677 | 1.2 | % | $ | 494 | 1.9 | % | $ | — | — | % | |||||||||||||||
U.S. States and political subdivisions | 406 | 3.7 | 34 | 1.9 | 12 | 2.1 | 106 | 3.0 | 254 | 4.3 | |||||||||||||||||||||||||
Foreign government | 232 | 2.7 | — | — | 128 | 2.5 | 104 | 2.9 | — | — | |||||||||||||||||||||||||
Mortgage-backed residential | 10,425 | 2.6 | 34 | 3.1 | 58 | 2.1 | — | — | 10,333 | 2.6 | |||||||||||||||||||||||||
Mortgage-backed commercial | 253 | 1.5 | — | — | 30 | 1.8 | — | — | 223 | 1.4 | |||||||||||||||||||||||||
Asset-backed | 1,991 | 1.9 | — | — | 1,311 | 1.9 | 463 | 2.0 | 217 | 2.2 | |||||||||||||||||||||||||
Corporate debt | 746 | 3.2 | 33 | 3.1 | 460 | 2.7 | 216 | 3.8 | 37 | 5.6 | |||||||||||||||||||||||||
Total available-for-sale debt securities | $ | 15,231 | 2.5 | $ | 108 | 2.7 | $ | 2,676 | 1.9 | $ | 1,383 | 2.4 | $ | 11,064 | 2.6 | ||||||||||||||||||||
Amortized cost of available-for-sale debt securities | $ | 15,216 | $ | 108 | $ | 2,674 | $ | 1,374 | $ | 11,060 |
(a) | Actual maturities may differ from contractual maturities due to call or prepayment options. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Taxable interest | $ | 90 | $ | 87 | $ | 252 | $ | 256 | |||||||
Taxable dividends | 7 | 6 | 18 | 18 | |||||||||||
Interest and dividends exempt from U.S. federal income tax | 5 | 1 | 13 | 8 | |||||||||||
Interest and dividends on available-for-sale securities | $ | 102 | $ | 94 | $ | 283 | $ | 282 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Gross realized gains | $ | 28 | $ | 48 | $ | 134 | $ | 150 | |||||||
Gross realized losses | (11 | ) | (3 | ) | (14 | ) | (11 | ) | |||||||
Other-than-temporary impairment | (11 | ) | — | (14 | ) | (10 | ) | ||||||||
Other gain on investments, net | $ | 6 | $ | 45 | $ | 106 | $ | 129 |
September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Less than 12 months | 12 months or longer | |||||||||||||||||||||||||||||
($ in millions) | Fair value | Unrealized loss | Fair value | Unrealized loss | Fair value | Unrealized loss | Fair value | Unrealized loss | ||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||||||
Debt securities | ||||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies | $ | 220 | $ | — | $ | 373 | $ | (1 | ) | $ | 297 | $ | (3 | ) | $ | 859 | $ | (15 | ) | |||||||||||||
U.S. States and political subdivisions | 173 | (1 | ) | — | — | 50 | — | — | — | |||||||||||||||||||||||
Foreign government | 9 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Mortgage-backed | 1,731 | (11 | ) | 2,517 | (67 | ) | 1,172 | (10 | ) | 3,098 | (116 | ) | ||||||||||||||||||||
Asset-backed | 696 | (2 | ) | 24 | — | 819 | (3 | ) | 8 | — | ||||||||||||||||||||||
Corporate debt | 449 | (8 | ) | 10 | (1 | ) | 132 | (2 | ) | 11 | — | |||||||||||||||||||||
Total temporarily impaired debt securities | 3,278 | (22 | ) | 2,924 | (69 | ) | 2,470 | (18 | ) | 3,976 | (131 | ) | ||||||||||||||||||||
Temporarily impaired equity securities | 793 | (84 | ) | 68 | (29 | ) | 231 | (24 | ) | 40 | (10 | ) | ||||||||||||||||||||
Total temporarily impaired available-for-sale securities | $ | 4,071 | $ | (106 | ) | $ | 2,992 | $ | (98 | ) | $ | 2,701 | $ | (42 | ) | $ | 4,016 | $ | (141 | ) |
($ in millions) | September 30, 2015 | December 31, 2014 | ||||||
Consumer automotive | $ | — | $ | 1,515 | ||||
Consumer mortgage | — | 452 | ||||||
Commercial and industrial — Other | 37 | 36 | ||||||
Total loans held-for-sale, net | $ | 37 | $ | 2,003 |
($ in millions) | September 30, 2015 | December 31, 2014 | ||||||
Consumer automotive (a) | $ | 63,610 | $ | 56,570 | ||||
Consumer mortgage (b)(c) | 9,770 | 7,474 | ||||||
Commercial | ||||||||
Commercial and industrial | ||||||||
Automotive | 29,020 | 30,871 | ||||||
Other | 2,289 | 1,882 | ||||||
Commercial real estate — Automotive | 3,302 | 3,151 | ||||||
Total commercial | 34,611 | 35,904 | ||||||
Total finance receivables and loans (d) | $ | 107,991 | $ | 99,948 |
(a) | Includes $107 million and $35 million of fair value adjustment for loans in hedge accounting relationships at September 30, 2015, and December 31, 2014, respectively. Refer to Note 20 for additional information. |
(b) | Includes loans originated as interest-only mortgage loans of $1.0 billion and $1.2 billion at September 30, 2015, and December 31, 2014, respectively, 8% of which are expected to start principal amortization in the remainder of 2015, 33% in 2016, 21% in 2017, 2% in 2018, and 4% thereafter. |
(c) | Includes consumer mortgages at a fair value of $1 million at both September 30, 2015, and December 31, 2014, as a result of fair value option election. |
(d) | Totals include a net increase of $43 million at September 30, 2015, compared to a net reduction of $266 million at December 31, 2014, for unearned income, unamortized premiums and discounts, and deferred fees and costs. |
Three months ended September 30, 2015 ($ in millions) | Consumer automotive | Consumer mortgage | Commercial | Total | ||||||||||||
Allowance at July 1, 2015 | $ | 767 | $ | 119 | $ | 88 | $ | 974 | ||||||||
Charge-offs | (220 | ) | (10 | ) | (1 | ) | (231 | ) | ||||||||
Recoveries | 64 | 4 | 2 | 70 | ||||||||||||
Net charge-offs | (156 | ) | (6 | ) | 1 | (161 | ) | |||||||||
Provision for loan losses | 200 | 6 | 5 | 211 | ||||||||||||
Other (a) | (7 | ) | — | 1 | (6 | ) | ||||||||||
Allowance at September 30, 2015 | $ | 804 | $ | 119 | $ | 95 | $ | 1,018 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
Three months ended September 30, 2014 ($ in millions) | Consumer automotive | Consumer mortgage | Commercial | Total | ||||||||||||
Allowance at July 1, 2014 | $ | 729 | $ | 302 | $ | 140 | $ | 1,171 | ||||||||
Charge-offs | (188 | ) | (13 | ) | — | (201 | ) | |||||||||
Recoveries | 51 | 1 | — | 52 | ||||||||||||
Net charge-offs | (137 | ) | (12 | ) | — | (149 | ) | |||||||||
Provision for loan losses | 112 | (7 | ) | (3 | ) | 102 | ||||||||||
Other (a) | (11 | ) | — | — | (11 | ) | ||||||||||
Allowance at September 30, 2014 | $ | 693 | $ | 283 | $ | 137 | $ | 1,113 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
Nine months ended September 30, 2015 ($ in millions) | Consumer automotive | Consumer mortgage | Commercial | Total | ||||||||||||
Allowance at January 1, 2015 | $ | 685 | $ | 152 | $ | 140 | $ | 977 | ||||||||
Charge-offs | (579 | ) | (41 | ) | (1 | ) | (621 | ) | ||||||||
Recoveries | 195 | 12 | 3 | 210 | ||||||||||||
Net charge-offs | (384 | ) | (29 | ) | 2 | (411 | ) | |||||||||
Provision for loan losses | 510 | 4 | (47 | ) | 467 | |||||||||||
Other (a) | (7 | ) | (8 | ) | — | (15 | ) | |||||||||
Allowance at September 30, 2015 | $ | 804 | $ | 119 | $ | 95 | $ | 1,018 | ||||||||
Allowance for loan losses at September 30, 2015 | ||||||||||||||||
Individually evaluated for impairment | $ | 22 | $ | 48 | $ | 19 | $ | 89 | ||||||||
Collectively evaluated for impairment | 782 | 71 | 76 | 929 | ||||||||||||
Loans acquired with deteriorated credit quality | — | — | — | — | ||||||||||||
Finance receivables and loans at historical cost at September 30, 2015 | ||||||||||||||||
Ending balance | $ | 63,610 | $ | 9,769 | $ | 34,611 | $ | 107,990 | ||||||||
Individually evaluated for impairment | 285 | 268 | 75 | 628 | ||||||||||||
Collectively evaluated for impairment | 63,325 | 9,501 | 34,536 | 107,362 | ||||||||||||
Loans acquired with deteriorated credit quality | — | — | — | — |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
Nine months ended September 30, 2014 ($ in millions) | Consumer automotive | Consumer mortgage | Commercial | Total | ||||||||||||
Allowance at January 1, 2014 | $ | 673 | $ | 389 | $ | 146 | $ | 1,208 | ||||||||
Charge-offs | (511 | ) | (38 | ) | (5 | ) | (554 | ) | ||||||||
Recoveries | 170 | 6 | 11 | 187 | ||||||||||||
Net charge-offs | (341 | ) | (32 | ) | 6 | (367 | ) | |||||||||
Provision for loan losses | 372 | (55 | ) | (15 | ) | 302 | ||||||||||
Other (a) | (11 | ) | (19 | ) | — | (30 | ) | |||||||||
Allowance at September 30, 2014 | $ | 693 | $ | 283 | $ | 137 | $ | 1,113 | ||||||||
Allowance for loan losses at September 30, 2014 | ||||||||||||||||
Individually evaluated for impairment | $ | 25 | $ | 180 | $ | 15 | $ | 220 | ||||||||
Collectively evaluated for impairment | 668 | 103 | 122 | 893 | ||||||||||||
Loans acquired with deteriorated credit quality | — | — | — | — | ||||||||||||
Finance receivables and loans at historical cost at September 30, 2014 | ||||||||||||||||
Ending balance | $ | 58,675 | $ | 7,594 | $ | 33,248 | $ | 99,517 | ||||||||
Individually evaluated for impairment | 289 | 904 | 73 | 1,266 | ||||||||||||
Collectively evaluated for impairment | 58,384 | 6,690 | 33,175 | 98,249 | ||||||||||||
Loans acquired with deteriorated credit quality | 2 | — | — | 2 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Consumer automotive | $ | 704 | $ | 1,562 | $ | 704 | $ | 1,562 | ||||||||
Consumer mortgage | 2 | — | 75 | 40 | ||||||||||||
Commercial | 1 | — | 1 | — | ||||||||||||
Total sales and transfers | $ | 707 | $ | 1,562 | $ | 780 | $ | 1,602 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Consumer automotive | $ | 272 | $ | — | $ | 272 | $ | — | ||||||||
Consumer mortgage | 990 | 83 | 3,640 | 98 | ||||||||||||
Total purchases of finance receivables and loans | $ | 1,262 | $ | 83 | $ | 3,912 | $ | 98 |
($ in millions) | 30-59 days past due | 60-89 days past due | 90 days or more past due | Total past due | Current | Total finance receivables and loans | ||||||||||||||||||
September 30, 2015 | ||||||||||||||||||||||||
Consumer automotive | $ | 1,439 | $ | 310 | $ | 180 | $ | 1,929 | $ | 61,681 | $ | 63,610 | ||||||||||||
Consumer mortgage | 101 | 19 | 88 | 208 | 9,561 | 9,769 | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Automotive | — | — | 6 | 6 | 29,014 | 29,020 | ||||||||||||||||||
Other | — | — | — | — | 2,289 | 2,289 | ||||||||||||||||||
Commercial real estate — Automotive | — | — | — | — | 3,302 | 3,302 | ||||||||||||||||||
Total commercial | — | — | 6 | 6 | 34,605 | 34,611 | ||||||||||||||||||
Total consumer and commercial | $ | 1,540 | $ | 329 | $ | 274 | $ | 2,143 | $ | 105,847 | $ | 107,990 | ||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Consumer automotive | $ | 1,340 | $ | 293 | $ | 164 | $ | 1,797 | $ | 54,773 | $ | 56,570 | ||||||||||||
Consumer mortgage | 76 | 25 | 124 | 225 | 7,248 | 7,473 | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Automotive | — | 9 | — | 9 | 30,862 | 30,871 | ||||||||||||||||||
Other | — | — | — | — | 1,882 | 1,882 | ||||||||||||||||||
Commercial real estate — Automotive | — | — | — | — | 3,151 | 3,151 | ||||||||||||||||||
Total commercial | — | 9 | — | 9 | 35,895 | 35,904 | ||||||||||||||||||
Total consumer and commercial | $ | 1,416 | $ | 327 | $ | 288 | $ | 2,031 | $ | 97,916 | $ | 99,947 |
($ in millions) | September 30, 2015 | December 31, 2014 | ||||||
Consumer automotive | $ | 413 | $ | 386 | ||||
Consumer mortgage | 149 | 177 | ||||||
Commercial | ||||||||
Commercial and industrial | ||||||||
Automotive | 26 | 32 | ||||||
Other | 45 | 46 | ||||||
Commercial real estate — Automotive | 4 | 4 | ||||||
Total commercial | 75 | 82 | ||||||
Total consumer and commercial finance receivables and loans | $ | 637 | $ | 645 |
September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||
($ in millions) | Performing | Nonperforming | Total | Performing | Nonperforming | Total | ||||||||||||||||||
Consumer automotive | $ | 63,197 | $ | 413 | $ | 63,610 | $ | 56,184 | $ | 386 | $ | 56,570 | ||||||||||||
Consumer mortgage | 9,620 | 149 | 9,769 | 7,296 | 177 | 7,473 |
September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||
($ in millions) | Pass | Criticized (a) | Total | Pass | Criticized (a) | Total | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Automotive | $ | 27,423 | $ | 1,597 | $ | 29,020 | $ | 29,150 | $ | 1,721 | $ | 30,871 | ||||||||||||
Other | 1,856 | 433 | 2,289 | 1,509 | 373 | 1,882 | ||||||||||||||||||
Commercial real estate — Automotive | 3,156 | 146 | 3,302 | 3,015 | 136 | 3,151 | ||||||||||||||||||
Total commercial | $ | 32,435 | $ | 2,176 | $ | 34,611 | $ | 33,674 | $ | 2,230 | $ | 35,904 |
(a) | Includes loans classified as special mention, substandard, or doubtful. These classifications are based on regulatory definitions and generally represent loans within our portfolio that have a higher default risk or have already defaulted. |
($ in millions) | Unpaid principal balance | Carrying value before allowance | Impaired with no allowance | Impaired with an allowance | Allowance for impaired loans | |||||||||||||||
September 30, 2015 | ||||||||||||||||||||
Consumer automotive | $ | 285 | $ | 285 | $ | — | $ | 285 | $ | 22 | ||||||||||
Consumer mortgage | 271 | 268 | 63 | 205 | 48 | |||||||||||||||
Commercial | ||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||
Automotive | 26 | 26 | 9 | 17 | 4 | |||||||||||||||
Other | 45 | 45 | — | 45 | 15 | |||||||||||||||
Commercial real estate — Automotive | 4 | 4 | 4 | — | — | |||||||||||||||
Total commercial | 75 | 75 | 13 | 62 | 19 | |||||||||||||||
Total consumer and commercial finance receivables and loans | $ | 631 | $ | 628 | $ | 76 | $ | 552 | $ | 89 | ||||||||||
December 31, 2014 | ||||||||||||||||||||
Consumer automotive | $ | 282 | $ | 282 | $ | — | $ | 282 | $ | 23 | ||||||||||
Consumer mortgage | 340 | 336 | 86 | 250 | 62 | |||||||||||||||
Commercial | ||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||
Automotive | 32 | 32 | 4 | 28 | 5 | |||||||||||||||
Other | 46 | 46 | — | 46 | 15 | |||||||||||||||
Commercial real estate — Automotive | 4 | 4 | 1 | 3 | 1 | |||||||||||||||
Total commercial | 82 | 82 | 5 | 77 | 21 | |||||||||||||||
Total consumer and commercial finance receivables and loans | $ | 704 | $ | 700 | $ | 91 | $ | 609 | $ | 106 |
2015 | 2014 | |||||||||||||||
Three months ended September 30, ($ in millions) | Average balance | Interest income | Average balance | Interest income | ||||||||||||
Consumer automotive | $ | 288 | $ | 4 | $ | 297 | $ | 5 | ||||||||
Consumer mortgage | 268 | 3 | 914 | 7 | ||||||||||||
Commercial | ||||||||||||||||
Commercial and industrial | ||||||||||||||||
Automotive | 36 | — | 32 | — | ||||||||||||
Other | 45 | — | 51 | — | ||||||||||||
Commercial real estate — Automotive | 6 | — | 3 | — | ||||||||||||
Total commercial | 87 | — | 86 | — | ||||||||||||
Total consumer and commercial finance receivables and loans | $ | 643 | $ | 7 | $ | 1,297 | $ | 12 |
2015 | 2014 | |||||||||||||||
Nine months ended September 30, ($ in millions) | Average balance | Interest income | Average balance | Interest income | ||||||||||||
Consumer automotive | $ | 291 | $ | 13 | $ | 298 | $ | 14 | ||||||||
Consumer mortgage | 283 | 7 | 923 | 22 | ||||||||||||
Commercial | ||||||||||||||||
Commercial and industrial | ||||||||||||||||
Automotive | 35 | 1 | 68 | 1 | ||||||||||||
Other | 39 | 3 | 62 | 4 | ||||||||||||
Commercial real estate — Automotive | 5 | — | 7 | — | ||||||||||||
Total commercial | 79 | 4 | 137 | 5 | ||||||||||||
Total consumer and commercial finance receivables and loans | $ | 653 | $ | 24 | $ | 1,358 | $ | 41 |
2015 | 2014 | |||||||||||||||||||||
Three months ended September 30, ($ in millions) | Number of loans | Pre-modification carrying value before allowance | Post-modification carrying value before allowance | Number of loans | Pre-modification carrying value before allowance | Post-modification carrying value before allowance | ||||||||||||||||
Consumer automotive | 4,612 | $ | 75 | $ | 66 | 4,361 | $ | 72 | $ | 63 | ||||||||||||
Consumer mortgage | 53 | 13 | 13 | 37 | 7 | 6 | ||||||||||||||||
Commercial | ||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||
Automotive | — | — | — | — | — | — | ||||||||||||||||
Other | 1 | 21 | 21 | — | — | — | ||||||||||||||||
Commercial real estate — Automotive | 1 | 3 | 3 | — | — | — | ||||||||||||||||
Total commercial | 2 | 24 | 24 | — | — | — | ||||||||||||||||
Total consumer and commercial finance receivables and loans | 4,667 | $ | 112 | $ | 103 | 4,398 | $ | 79 | $ | 69 |
2015 | 2014 | |||||||||||||||||||||
Nine months ended September 30, ($ in millions) | Number of loans | Pre-modification carrying value before allowance | Post-modification carrying value before allowance | Number of loans | Pre-modification carrying value before allowance | Post-modification carrying value before allowance | ||||||||||||||||
Consumer automotive | 12,763 | $ | 202 | $ | 173 | 13,681 | $ | 223 | $ | 193 | ||||||||||||
Consumer mortgage | 169 | 42 | 40 | 350 | 71 | 66 | ||||||||||||||||
Commercial | ||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||
Automotive | — | — | — | 3 | 23 | 23 | ||||||||||||||||
Other | 1 | 21 | 21 | 3 | 48 | 48 | ||||||||||||||||
Commercial real estate — Automotive | 1 | 3 | 3 | — | — | — | ||||||||||||||||
Total commercial | 2 | 24 | 24 | 6 | 71 | 71 | ||||||||||||||||
Total consumer and commercial finance receivables and loans | 12,934 | $ | 268 | $ | 237 | 14,037 | $ | 365 | $ | 330 |
2015 | 2014 | |||||||||||||||||||||
Three months ended September 30, ($ in millions) | Number of loans | Carrying value before allowance | Charge-off amount | Number of loans | Carrying value before allowance | Charge-off amount | ||||||||||||||||
Consumer automotive | 1,742 | $ | 21 | $ | 12 | 1,790 | $ | 22 | $ | 12 | ||||||||||||
Consumer mortgage | 2 | 1 | — | 5 | 1 | — | ||||||||||||||||
Commercial | — | — | — | — | — | — | ||||||||||||||||
Total consumer and commercial finance receivables and loans | 1,744 | $ | 22 | $ | 12 | 1,795 | $ | 23 | $ | 12 |
2015 | 2014 | |||||||||||||||||||||
Nine months ended September 30, ($ in millions) | Number of loans | Carrying value before allowance | Charge-off amount | Number of loans | Carrying value before allowance | Charge-off amount | ||||||||||||||||
Consumer automotive | 4,822 | $ | 58 | $ | 33 | 5,020 | $ | 62 | $ | 33 | ||||||||||||
Consumer mortgage | 9 | 1 | — | 10 | 2 | — | ||||||||||||||||
Commercial | — | — | — | — | — | — | ||||||||||||||||
Total consumer and commercial finance receivables and loans | 4,831 | $ | 59 | $ | 33 | 5,030 | $ | 64 | $ | 33 |
($ in millions) | September 30, 2015 | December 31, 2014 | ||||||
Vehicles | $ | 21,270 | $ | 23,144 | ||||
Accumulated depreciation | (3,978 | ) | (3,634 | ) | ||||
Investment in operating leases, net | $ | 17,292 | $ | 19,510 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Depreciation expense on operating lease assets (excluding remarketing gains) | $ | 633 | $ | 654 | $ | 1,995 | $ | 1,982 | |||||||
Remarketing gains | (105 | ) | (105 | ) | (282 | ) | (382 | ) | |||||||
Depreciation expense on operating lease assets | $ | 528 | $ | 549 | $ | 1,713 | $ | 1,600 |
($ in millions) | Consolidated involvement with VIEs | Assets of nonconsolidated VIEs (a) | Maximum exposure to loss in nonconsolidated VIEs | ||||||||||
September 30, 2015 | |||||||||||||
On-balance sheet variable interest entities | |||||||||||||
Consumer automotive | $ | 29,429 | (b) | ||||||||||
Commercial automotive | 15,118 | ||||||||||||
Off-balance sheet variable interest entities | |||||||||||||
Consumer automotive | — | $ | 2,870 | $ | 2,870 | (c) | |||||||
Commercial other | 197 | (d) | — | (e) | 445 | (f) | |||||||
Total | $ | 44,744 | $ | 2,870 | $ | 3,315 | |||||||
December 31, 2014 | |||||||||||||
On-balance sheet variable interest entities | |||||||||||||
Consumer automotive | $ | 31,994 | (b) | ||||||||||
Commercial automotive | 18,171 | ||||||||||||
Off-balance sheet variable interest entities | |||||||||||||
Consumer automotive | — | $ | 2,801 | $ | 2,801 | (c) | |||||||
Commercial other | 146 | (d) | — | (e) | 362 | (f) | |||||||
Total | $ | 50,311 | $ | 2,801 | $ | 3,163 |
(a) | Asset values represent the current unpaid principal balance of outstanding consumer finance receivables and loans within the VIEs. |
(b) | Includes $10.2 billion and $12.7 billion of assets that are not encumbered by VIE beneficial interests held by third parties at September 30, 2015, and December 31, 2014, respectively. Ally or consolidated affiliates hold the interests in these assets which eliminate in consolidation. |
(c) | Maximum exposure to loss represents the current unpaid principal balance of outstanding loans based on our customary representation and warranty provisions. This measure is based on the unlikely event that all of the loans have underwriting defects or other defects that trigger a representation and warranty provision and the collateral supporting the loans are worthless. This required disclosure is not an indication of our expected loss. |
(d) | Includes $211 million and $164 million classified as other assets, offset by $14 million and $18 million classified as accrued expenses and other liabilities at September 30, 2015, and December 31, 2014, respectively. |
(e) | Includes VIEs for which we have no management oversight and therefore we are not able to provide the total assets of the VIEs. |
(f) | For certain nonconsolidated affordable housing entities, maximum exposure to loss represents the yield we guaranteed investors through long term guarantee contracts. The amount disclosed is based on the unlikely event that the underlying properties cease generating yield to investors and the yield delivered to investors in the form of low income tax housing credits is recaptured. For nonconsolidated equity investments, maximum exposure to loss represents our outstanding investment, additional committed capital, and low income housing tax credits subject to recapture. The amount disclosed is based on the unlikely event that our committed capital is funded, our investments become worthless, and the tax credits previously delivered to us are recaptured. This required disclosure is not an indication of our expected loss. |
Nine months ended September 30, ($ in millions) | Consumer automotive | Consumer mortgage | ||||||
2015 | ||||||||
Cash proceeds from transfers completed during the period | $ | 1,044 | $ | — | ||||
Servicing fees | 21 | — | ||||||
2014 | ||||||||
Cash proceeds from transfers completed during the period | $ | 1,557 | $ | — | ||||
Servicing fees | 6 | — | ||||||
Representations and warranties obligations | — | (9 | ) |
Total Amount | Amount 60 days or more past due | |||||||||||||||
($ in millions) | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||
On-balance sheet loans | ||||||||||||||||
Consumer automotive | $ | 63,610 | $ | 58,085 | $ | 490 | $ | 457 | ||||||||
Consumer mortgage | 9,770 | 7,926 | 107 | 151 | ||||||||||||
Commercial automotive | 32,322 | 34,022 | 6 | 9 | ||||||||||||
Commercial other | 2,326 | 1,918 | — | — | ||||||||||||
Total on-balance sheet loans | 108,028 | 101,951 | 603 | 617 | ||||||||||||
Off-balance sheet securitization entities | ||||||||||||||||
Consumer automotive | 2,870 | 2,801 | 8 | 5 | ||||||||||||
Total off-balance sheet securitization entities | 2,870 | 2,801 | 8 | 5 | ||||||||||||
Whole-loan transactions (a) | 2,030 | 929 | 15 | 33 | ||||||||||||
Total | $ | 112,928 | $ | 105,681 | $ | 626 | $ | 655 |
(a) | Whole-loan transactions are not part of a securitization transaction, but represent consumer automotive pools of loans sold to third-party investors. |
Net credit losses | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
On-balance sheet loans | ||||||||||||||||
Consumer automotive | $ | 156 | $ | 137 | $ | 384 | $ | 341 | ||||||||
Consumer mortgage | 6 | 12 | 29 | 32 | ||||||||||||
Commercial automotive | — | — | — | 1 | ||||||||||||
Commercial other | (1 | ) | — | (2 | ) | (7 | ) | |||||||||
Total on-balance sheet loans | 161 | 149 | 411 | 367 | ||||||||||||
Off-balance sheet securitization entities | ||||||||||||||||
Consumer automotive | 1 | — | 3 | 1 | ||||||||||||
Total off-balance sheet securitization entities | 1 | — | 3 | 1 | ||||||||||||
Whole-loan transactions | — | 1 | — | 5 | ||||||||||||
Total | $ | 162 | $ | 150 | $ | 414 | $ | 373 |
($ in millions) | September 30, 2015 | December 31, 2014 | |||||
On-balance sheet automotive finance loans and leases | |||||||
Consumer automotive | $ | 63,352 | $ | 58,085 | |||
Commercial automotive | 32,322 | 34,022 | |||||
Operating leases | 16,955 | 19,510 | |||||
Other | 61 | 55 | |||||
Off-balance sheet automotive finance loans | |||||||
Loans sold to third-party investors | |||||||
Securitizations | 2,901 | 2,832 | |||||
Whole-loan | 2,027 | 887 | |||||
Total serviced automotive finance loans and leases | $ | 117,618 | $ | 115,391 |
($ in millions) | September 30, 2015 | December 31, 2014 | |||||
Property and equipment at cost | $ | 648 | $ | 775 | |||
Accumulated depreciation | (436 | ) | (550 | ) | |||
Net property and equipment | 212 | 225 | |||||
Restricted cash collections for securitization trusts (a) | 1,791 | 2,221 | |||||
Net deferred tax assets | 1,459 | 1,812 | |||||
Nonmarketable equity securities | 313 | 271 | |||||
Fair value of derivative contracts in receivable position (b) | 299 | 263 | |||||
Cash reserve deposits held-for-securitization trusts (c) | 255 | 303 | |||||
Unamortized debt issuance costs | 230 | 238 | |||||
Other accounts receivable | 196 | 298 | |||||
Collateral placed with counterparties | 72 | 236 | |||||
Other assets | 1,197 | 1,435 | |||||
Total other assets | $ | 6,024 | $ | 7,302 |
(a) | Represents cash collections from customer payments on securitized receivables. These funds are distributed to investors as payments on the related secured debt. |
(b) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(c) | Represents credit enhancement in the form of cash reserves for various securitization transactions. |
($ in millions) | September 30, 2015 | December 31, 2014 | |||||
Noninterest-bearing deposits | $ | 91 | $ | 64 | |||
Interest-bearing deposits | |||||||
Savings and money market checking accounts | 33,839 | 26,769 | |||||
Certificates of deposit | 29,864 | 31,070 | |||||
Dealer deposits | 247 | 319 | |||||
Total deposit liabilities | $ | 64,041 | $ | 58,222 |
September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||
($ in millions) | Unsecured | Secured (a) | Total | Unsecured | Secured (a) | Total | ||||||||||||||||||
Demand notes | $ | 3,374 | $ | — | $ | 3,374 | $ | 3,338 | $ | — | $ | 3,338 | ||||||||||||
Federal Home Loan Bank | — | 400 | 400 | — | 2,950 | 2,950 | ||||||||||||||||||
Securities sold under agreements to repurchase | — | 1,520 | 1,520 | — | 774 | 774 | ||||||||||||||||||
Other | 84 | — | 84 | — | — | — | ||||||||||||||||||
Total short-term borrowings | $ | 3,458 | $ | 1,920 | $ | 5,378 | $ | 3,338 | $ | 3,724 | $ | 7,062 |
(a) | Refer to Note 14 for further details on assets restricted as collateral for payment of the related debt. |
September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||
($ in millions) | Unsecured | Secured | Total | Unsecured | Secured | Total | ||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||
Due within one year | $ | 1,848 | $ | 11,565 | $ | 13,413 | $ | 4,809 | $ | 12,629 | $ | 17,438 | ||||||||||||
Due after one year (a) | 17,407 | 36,196 | 53,603 | 17,154 | 31,514 | 48,668 | ||||||||||||||||||
Fair value adjustment (b) | 445 | — | 445 | 452 | — | 452 | ||||||||||||||||||
Total long-term debt (c) | $ | 19,700 | $ | 47,761 | $ | 67,461 | $ | 22,415 | $ | 44,143 | $ | 66,558 |
(a) | Includes $2.6 billion of trust preferred securities at both September 30, 2015, and December 31, 2014. |
(b) | Represents the fair value adjustment associated with the application of hedge accounting on certain of our long-term unsecured debt positions. Refer to Note 20 for additional information. |
(c) | Includes advances from the Federal Home Loan Bank of Pittsburgh (FHLB) of $6.4 billion and $2.8 billion at September 30, 2015, and December 31, 2014, respectively. |
Year ended December 31, ($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 and thereafter | Fair value adjustment | Total | ||||||||||||||||||||||||
Unsecured | ||||||||||||||||||||||||||||||||
Long-term debt | $ | 11 | $ | 1,934 | $ | 4,393 | $ | 2,951 | $ | 1,625 | $ | 9,741 | $ | 445 | $ | 21,100 | ||||||||||||||||
Original issue discount | (17 | ) | (74 | ) | (86 | ) | (97 | ) | (34 | ) | (1,092 | ) | — | (1,400 | ) | |||||||||||||||||
Total unsecured | (6 | ) | 1,860 | 4,307 | 2,854 | 1,591 | 8,649 | 445 | 19,700 | |||||||||||||||||||||||
Secured | ||||||||||||||||||||||||||||||||
Long-term debt | 3,731 | 10,150 | 14,403 | 8,913 | 5,521 | 5,043 | — | 47,761 | ||||||||||||||||||||||||
Total long-term debt | $ | 3,725 | $ | 12,010 | $ | 18,710 | $ | 11,767 | $ | 7,112 | $ | 13,692 | $ | 445 | $ | 67,461 |
September 30, 2015 | December 31, 2014 | |||||||||||||||
($ in millions) | Total | Ally Bank (a) | Total | Ally Bank (a) | ||||||||||||
Investment securities (b) | $ | 1,591 | $ | — | $ | 786 | $ | 786 | ||||||||
Mortgage assets held-for-investment and lending receivables | 9,746 | 9,746 | 7,541 | 7,541 | ||||||||||||
Consumer automotive finance receivables | 34,186 | 9,491 | 33,438 | 11,263 | ||||||||||||
Commercial automotive finance receivables | 18,122 | 17,681 | 20,605 | 20,083 | ||||||||||||
Investment in operating leases, net | 6,810 | 3,947 | 6,820 | 4,672 | ||||||||||||
Total assets restricted as collateral (c) (d) | $ | 70,455 | $ | 40,865 | $ | 69,190 | $ | 44,345 | ||||||||
Secured debt (e) | $ | 49,681 | $ | 23,686 | $ | 47,867 | $ | 27,134 |
(a) | Ally Bank is a component of the total column. |
(b) | The investment securities are restricted under repurchase agreements. Refer to Note 13 for information on the repurchase agreements. |
(c) | Ally Bank has an advance agreement with the FHLB, and had assets pledged to secure borrowings that were restricted as collateral to the FHLB totaling $13.0 billion and $10.7 billion at September 30, 2015, and December 31, 2014, respectively. These assets were composed primarily of consumer mortgage finance receivables and loans, net. Ally Bank has access to the Federal Reserve Bank Discount Window. Ally Bank had assets pledged and restricted as collateral to the Federal Reserve Bank totaling $3.0 billion and $3.2 billion at September 30, 2015, and December 31, 2014, respectively. These assets were composed of consumer automotive finance receivables and loans, net and investment in operating leases, net. Availability under these programs is only for the operations of Ally Bank and cannot be used to fund the operations or liabilities of Ally or its subsidiaries. |
(d) | Excludes restricted cash and cash reserves for securitization trusts recorded within other assets on the Condensed Consolidated Balance Sheet. Refer to Note 11 for additional information. |
(e) | Includes $1.9 billion and $3.7 billion of short-term borrowings at September 30, 2015, and December 31, 2014, respectively. |
Outstanding | Unused capacity (a) | Total capacity | ||||||||||||||||||||||
($ in millions) | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||||||||
Bank funding | ||||||||||||||||||||||||
Secured | $ | 3,015 | $ | 3,250 | $ | 235 | $ | 250 | $ | 3,250 | $ | 3,500 | ||||||||||||
Parent funding | ||||||||||||||||||||||||
Secured | 17,154 | 15,030 | 1,256 | 3,425 | 18,410 | 18,455 | ||||||||||||||||||
Total committed facilities | $ | 20,169 | $ | 18,280 | $ | 1,491 | $ | 3,675 | $ | 21,660 | $ | 21,955 |
(a) | Funding from committed secured facilities is available on request in the event excess collateral resides in certain facilities or is available to the extent incremental collateral is available and contributed to the facilities. |
($ in millions) | September 30, 2015 | December 31, 2014 | |||||
Accounts payable | $ | 487 | $ | 298 | |||
Employee compensation and benefits | 236 | 298 | |||||
Reserves for insurance losses and loss adjustment expenses | 182 | 208 | |||||
Fair value of derivative contracts in payable position (a) | 176 | 252 | |||||
Deferred revenue | 126 | 151 | |||||
Other liabilities | 544 | 528 | |||||
Total accrued expenses and other liabilities | $ | 1,751 | $ | 1,735 |
(a) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
September 30, 2015 | December 31, 2014 | |||||||
Series A preferred stock (a) | ||||||||
Carrying value ($ in millions) | $ | 696 | $ | 1,021 | ||||
Par value (per share) | 0.01 | 0.01 | ||||||
Liquidation preference (per share) | 25 | 25 | ||||||
Number of shares authorized | 40,870,560 | 40,870,560 | ||||||
Number of shares issued and outstanding | 27,870,560 | 40,870,560 | ||||||
Dividend/coupon | ||||||||
Prior to May 15, 2016 | 8.5 | % | 8.5 | % | ||||
On and after May 15, 2016 | Three month LIBOR + 6.243% | Three month LIBOR + 6.243% | ||||||
Series G preferred stock | ||||||||
Carrying value ($ in millions) | $ | 117 | $ | 234 | ||||
Par value (per share) | 0.01 | 0.01 | ||||||
Liquidation preference (per share) | 1,000 | 1,000 | ||||||
Number of shares authorized | 2,576,601 | 2,576,601 | ||||||
Number of shares issued and outstanding | 1,288,301 | 2,576,601 | ||||||
Dividend/coupon | 7 | % | 7 | % |
($ in millions) | Unrealized losses on investment securities (a) | Translation adjustments and net investment hedges (b) | Cash flow hedges | Defined benefit pension plans | Accumulated other comprehensive loss | ||||||||||||||
Balance at December 31, 2013 | $ | (269 | ) | $ | 65 | $ | 5 | $ | (77 | ) | $ | (276 | ) | ||||||
2014 net change | 148 | (27 | ) | 1 | 4 | 126 | |||||||||||||
Balance at September 30, 2014 | $ | (121 | ) | $ | 38 | $ | 6 | $ | (73 | ) | $ | (150 | ) | ||||||
Balance at December 31, 2014 | $ | (21 | ) | $ | 36 | $ | 7 | $ | (88 | ) | $ | (66 | ) | ||||||
2015 net change | (35 | ) | (21 | ) | — | — | (56 | ) | |||||||||||
Balance at September 30, 2015 | $ | (56 | ) | $ | 15 | $ | 7 | $ | (88 | ) | $ | (122 | ) |
(a) | Represents the after-tax difference between the fair value and amortized cost of our available-for-sale securities portfolio. |
(b) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
Three months ended September 30, 2015 ($ in millions) | Before Tax | Tax Effect | After Tax | ||||||||
Investment securities | |||||||||||
Net unrealized gains arising during the period | $ | 106 | $ | (41 | ) | $ | 65 | ||||
Less: Net realized gains reclassified to income from continuing operations | 6 | (a) | (3 | ) | (b) | 3 | |||||
Net change | 100 | (38 | ) | 62 | |||||||
Translation adjustments | |||||||||||
Net unrealized losses arising during the period | (17 | ) | 5 | (12 | ) | ||||||
Less: Net realized losses reclassified to income from discontinued operations, net of tax | (1 | ) | — | (1 | ) | ||||||
Net change | (16 | ) | 5 | (11 | ) | ||||||
Net investment hedges | |||||||||||
Net unrealized gains arising during the period | 15 | (5 | ) | 10 | |||||||
Other comprehensive income | $ | 99 | $ | (38 | ) | $ | 61 |
(a) | Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive Income. |
(b) | Includes amounts reclassified to income tax expense (benefit) from continuing operations in our Condensed Consolidated Statement of Comprehensive Income. |
Three months ended September 30, 2014 ($ in millions) | Before Tax | Tax Effect | After Tax | ||||||||
Investment securities | |||||||||||
Net unrealized losses arising during the period | $ | (15 | ) | $ | 5 | $ | (10 | ) | |||
Less: Net realized gains reclassified to income from continuing operations | 45 | (a) | (1 | ) | (b) | 44 | |||||
Net change | (60 | ) | 6 | (54 | ) | ||||||
Translation adjustments | |||||||||||
Net unrealized losses arising during the period | (11 | ) | 4 | (7 | ) | ||||||
Net investment hedges | |||||||||||
Net unrealized gains arising during the period | 8 | (3 | ) | 5 | |||||||
Cash flow hedges | |||||||||||
Net unrealized gains arising during the period | 1 | — | 1 | ||||||||
Other comprehensive loss | $ | (62 | ) | $ | 7 | $ | (55 | ) |
(a) | Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive Income. |
(b) | Includes amounts reclassified to income tax expense (benefit) from continuing operations in our Condensed Consolidated Statement of Comprehensive Income. |
Nine months ended September 30, 2015 ($ in millions) | Before Tax | Tax Effect | After Tax | ||||||||
Investment securities | |||||||||||
Net unrealized gains arising during the period | $ | 53 | $ | (21 | ) | $ | 32 | ||||
Less: Net realized gains reclassified to income from continuing operations | 106 | (a) | (39 | ) | (b) | 67 | |||||
Net change | (53 | ) | 18 | (35 | ) | ||||||
Translation adjustments | |||||||||||
Net unrealized losses arising during the period | (33 | ) | 11 | (22 | ) | ||||||
Less: Net realized gains reclassified to income from discontinued operations, net of tax | 42 | (20 | ) | 22 | |||||||
Net change | (75 | ) | 31 | (44 | ) | ||||||
Net investment hedges | |||||||||||
Net unrealized gains arising during the period | 31 | (11 | ) | 20 | |||||||
Less: Net realized losses reclassified to income from discontinued operations, net of tax | (4 | ) | 1 | (3 | ) | ||||||
Net change | 35 | (12 | ) | 23 | |||||||
Other comprehensive loss | $ | (93 | ) | $ | 37 | $ | (56 | ) |
(a) | Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive Income. |
(b) | Includes amounts reclassified to income tax expense (benefit) from continuing operations in our Condensed Consolidated Statement of Comprehensive Income. |
Nine months ended September 30, 2014 ($ in millions) | Before Tax | Tax Effect | After Tax | ||||||||
Investment securities | |||||||||||
Net unrealized gains arising during the period | $ | 358 | $ | (89 | ) | $ | 269 | ||||
Less: Net realized gains reclassified to income from continuing operations | 129 | (a) | (8 | ) | (b) | 121 | |||||
Net change | 229 | (81 | ) | 148 | |||||||
Translation adjustments | |||||||||||
Net unrealized losses arising during the period | (21 | ) | 8 | (13 | ) | ||||||
Less: Net realized gains reclassified to income from discontinued operations, net of tax | 23 | (3 | ) | 20 | |||||||
Net change | (44 | ) | 11 | (33 | ) | ||||||
Net investment hedges | |||||||||||
Net unrealized gains arising during the period | 10 | (4 | ) | 6 | |||||||
Cash flow hedges | |||||||||||
Net unrealized gains arising during the period | 1 | — | 1 | ||||||||
Defined benefit pension plans | |||||||||||
Less: Net losses reclassified to income from continuing operations | (7 | ) | (c) | 3 | (b) | (4 | ) | ||||
Other comprehensive income | $ | 203 | $ | (77 | ) | $ | 126 |
(a) | Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive Income. |
(b) | Includes amounts reclassified to income tax expense (benefit) from continuing operations in our Condensed Consolidated Statement of Comprehensive Income. |
(c) | Includes losses reclassified to compensation and benefits expense in our Condensed Consolidated Statement of Comprehensive Income. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions, except share data) (a) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income from continuing operations | $ | 273 | $ | 293 | $ | 621 | $ | 774 | ||||||||
Preferred stock dividends (b) | (38 | ) | (67 | ) | (1,356 | ) | (200 | ) | ||||||||
Net income (loss) from continuing operations attributable to common shareholders | 235 | 226 | (735 | ) | 574 | |||||||||||
(Loss) income from discontinued operations, net of tax | (5 | ) | 130 | 405 | 199 | |||||||||||
Net income (loss) attributable to common shareholders | $ | 230 | $ | 356 | $ | (330 | ) | $ | 773 | |||||||
Basic weighted-average common shares outstanding (c) | 483,073,329 | 481,611,138 | 482,725,342 | 480,916,395 | ||||||||||||
Diluted weighted-average common shares outstanding (c) (d) | 484,399,091 | 482,506,091 | 482,725,342 | 481,545,506 | ||||||||||||
Basic earnings per common share | ||||||||||||||||
Net income (loss) from continuing operations | $ | 0.49 | $ | 0.47 | $ | (1.52 | ) | $ | 1.19 | |||||||
(Loss) income from discontinued operations, net of tax | (0.01 | ) | 0.27 | 0.84 | 0.41 | |||||||||||
Net income (loss) | $ | 0.48 | $ | 0.74 | $ | (0.68 | ) | $ | 1.60 | |||||||
Diluted earnings per common share | ||||||||||||||||
Net income (loss) from continuing operations | $ | 0.49 | $ | 0.47 | $ | (1.52 | ) | $ | 1.19 | |||||||
(Loss) income from discontinued operations, net of tax | (0.01 | ) | 0.27 | 0.84 | 0.41 | |||||||||||
Net income (loss) | $ | 0.47 | $ | 0.74 | $ | (0.68 | ) | $ | 1.60 |
(a) | Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers. |
(b) | Preferred stock dividends for the nine months ended September 30, 2015, include $1,193 million recognized in connection with the partial redemption of the Series G Preferred Stock and the repurchase of the Series A Preferred Stock. These dividends represent an additional return to preferred shareholders calculated as the excess consideration paid over the carrying amount derecognized. Refer to Note 16 for additional preferred stock information. |
(c) | Includes shares related to share-based compensation that vested but were not yet issued for the three months and nine months ended September 30, 2015, and 2014, respectively. |
(d) | Due to antidilutive effect of the net loss from continuing operations attributable to common shareholders for the nine months ended September 30, 2015, basic weighted-average common shares outstanding were used to calculate basic and diluted earnings per share. |
Under Basel III | Under Basel I | ||||||||||||||||||
September 30, 2015 (a) | December 31, 2014 (b) | Required minimum | Well-capitalized minimum | ||||||||||||||||
($ in millions) | Amount | Ratio | Amount | Ratio | |||||||||||||||
Risk-based capital | |||||||||||||||||||
Common Equity Tier 1 (to risk-weighted assets) (c) | |||||||||||||||||||
Ally Financial Inc. | $ | 13,444 | 10.05 | % | $ | 12,588 | 9.64 | % | 4.50 | % | (d) | ||||||||
Ally Bank | 16,311 | 17.50 | 16,022 | 16.89 | 4.50 | 6.50 | % | ||||||||||||
Tier 1 (to risk-weighted assets) | |||||||||||||||||||
Ally Financial Inc. | $ | 16,087 | 12.02 | % | $ | 16,389 | 12.55 | % | 6.00 | % | 6.00 | % | |||||||
Ally Bank | 16,311 | 17.50 | 16,022 | 16.89 | 6.00 | 8.00 | |||||||||||||
Total (to risk-weighted assets) | |||||||||||||||||||
Ally Financial Inc. | $ | 17,327 | 12.95 | % | $ | 17,294 | 13.24 | % | 8.00 | % | 10.00 | % | |||||||
Ally Bank | 16,739 | 17.96 | 16,468 | 17.36 | 8.00 | 10.00 | |||||||||||||
Tier 1 leverage (to adjusted quarterly average assets) (e) | |||||||||||||||||||
Ally Financial Inc. | $ | 16,087 | 10.43 | % | $ | 16,389 | 10.94 | % | 4.00 | % | (d) | ||||||||
Ally Bank | 16,311 | 15.35 | 16,022 | 15.44 | 15.00 | (f) | 5.00 | % |
(a) | U.S. Basel III became effective for us on January 1, 2015, subject to transitional provisions primarily related to deductions and adjustments impacting Common Equity Tier 1 capital and Tier 1 capital. |
(b) | Capital ratios as of December 31, 2014 are presented under the U.S. Basel I capital framework. |
(c) | Previously referred to as Tier 1 Common Equity under the U.S. Basel I capital framework. |
(d) | Currently, there is no ratio component for determining whether a BHC is "well-capitalized." |
(e) | Federal regulatory reporting guidelines require the calculation of adjusted quarterly average assets using a daily average methodology. |
(f) | Ally Bank, in accordance with the CLMA, is required to maintain a Tier 1 leverage ratio of at least 15%. |
September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||
Derivative contracts in a | Notional amount | Derivative contracts in a | Notional amount | |||||||||||||||||||||
($ in millions) | receivable position (a) | payable position (b) | receivable position (a) | payable position (b) | ||||||||||||||||||||
Derivatives qualifying for hedge accounting | ||||||||||||||||||||||||
Interest rate contracts | ||||||||||||||||||||||||
Swaps (c) (d) | $ | 182 | $ | 33 | $ | 17,204 | $ | 118 | $ | 7 | $ | 18,554 | ||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||
Forwards | 2 | — | 233 | — | — | 210 | ||||||||||||||||||
Total derivatives qualifying for hedge accounting | 184 | 33 | 17,437 | 118 | 7 | 18,764 | ||||||||||||||||||
Economic hedges | ||||||||||||||||||||||||
Interest rate contracts | ||||||||||||||||||||||||
Swaps | 50 | 71 | 6,353 | 40 | 65 | 11,979 | ||||||||||||||||||
Futures and forwards | 5 | 4 | 7,850 | 4 | 2 | 18,886 | ||||||||||||||||||
Written options | — | 56 | 18,007 | — | 94 | 14,823 | ||||||||||||||||||
Purchased options | 55 | — | 18,086 | 94 | — | 15,159 | ||||||||||||||||||
Total interest rate risk | 110 | 131 | 50,296 | 138 | 161 | 60,847 | ||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||
Swaps | — | — | — | — | 74 | 1,210 | ||||||||||||||||||
Futures and forwards | 1 | 1 | 161 | 5 | 4 | 304 | ||||||||||||||||||
Total foreign exchange risk | 1 | 1 | 161 | 5 | 78 | 1,514 | ||||||||||||||||||
Equity contracts | ||||||||||||||||||||||||
Forwards | — | 8 | 47 | — | 3 | 74 | ||||||||||||||||||
Written options | — | 3 | 1 | — | 3 | 1 | ||||||||||||||||||
Purchased options | 4 | — | — | 2 | — | — | ||||||||||||||||||
Total equity risk | 4 | 11 | 48 | 2 | 6 | 75 | ||||||||||||||||||
Total economic hedges | 115 | 143 | 50,505 | 145 | 245 | 62,436 | ||||||||||||||||||
Total derivatives | $ | 299 | $ | 176 | $ | 67,942 | $ | 263 | $ | 252 | $ | 81,200 |
(a) | Derivative contracts in a receivable position are classified as other assets on the Condensed Consolidated Balance Sheet, and includes accrued interest of $34 million and $50 million at September 30, 2015, and December 31, 2014, respectively. |
(b) | Derivative contracts in a liability position are classified as accrued expenses and other liabilities on the Condensed Consolidated Balance Sheet, and includes accrued interest of $9 million and $17 million at September 30, 2015, and December 31, 2014, respectively. |
(c) | Includes fair value hedges consisting of receive-fixed swaps on fixed-rate debt obligations with $182 million and $97 million in a receivable position, $0 million and $1 million in a payable position, and a $5.7 billion and $4.7 billion notional amount at September 30, 2015, and December 31, 2014, respectively. Of the hedge notional amount at September 30, 2015, $2.2 billion is associated with debt maturing in five or more years. |
(d) | Other fair value hedges include pay-fixed swaps on portfolios of held-for-investment automotive loan assets with $0 million and $21 million in a receivable position, $33 million and $6 million in a payable position, and an $11.5 billion and $13.9 billion notional amount at September 30, 2015, and December 31, 2014, respectively. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Derivatives qualifying for hedge accounting | ||||||||||||||||
(Loss) gain recognized in earnings on derivatives | ||||||||||||||||
Interest rate contracts | ||||||||||||||||
Interest and fees on finance receivables and loans (a) | $ | (34 | ) | $ | 28 | $ | (50 | ) | $ | 22 | ||||||
Interest on long-term debt (b) | 132 | (39 | ) | 121 | 102 | |||||||||||
Gain (loss) recognized in earnings on hedged items | ||||||||||||||||
Interest rate contracts | ||||||||||||||||
Interest and fees on finance receivables and loans (c) | 38 | (15 | ) | 73 | 14 | |||||||||||
Interest on long-term debt (d) | (135 | ) | 49 | (128 | ) | (90 | ) | |||||||||
Total derivatives qualifying for hedge accounting | 1 | 23 | 16 | 48 | ||||||||||||
Economic derivatives | ||||||||||||||||
(Loss) gain recognized in earnings on derivatives | ||||||||||||||||
Interest rate contracts | ||||||||||||||||
Loss on mortgage and automotive loans, net | (2 | ) | — | (2 | ) | — | ||||||||||
Other income, net of losses | — | (5 | ) | (9 | ) | (24 | ) | |||||||||
Total interest rate contracts | (2 | ) | (5 | ) | (11 | ) | (24 | ) | ||||||||
Foreign exchange contracts (e) | ||||||||||||||||
Interest on long-term debt | (1 | ) | (108 | ) | (139 | ) | (117 | ) | ||||||||
Other income, net of losses | 1 | 8 | 9 | 8 | ||||||||||||
Total foreign exchange contracts | — | (100 | ) | (130 | ) | (109 | ) | |||||||||
Equity contracts | ||||||||||||||||
Compensation and benefits expense | (4 | ) | (6 | ) | (7 | ) | (6 | ) | ||||||||
Total equity contracts | (4 | ) | (6 | ) | (7 | ) | (6 | ) | ||||||||
Loss recognized in earnings on derivatives | $ | (5 | ) | $ | (88 | ) | $ | (132 | ) | $ | (91 | ) |
(a) | Amounts exclude losses related to interest for qualifying accounting hedges of retail automotive loans held-for-investment, which are primarily offset by the fixed coupon payments of the loans. The losses were $18 million and $16 million for the three months ended September 30, 2015, and 2014, respectively, and $50 million and $43 million for the nine months ended September 30, 2015, and 2014, respectively. |
(b) | Amounts exclude gains related to interest for qualifying accounting hedges of debt, which are primarily offset by the fixed coupon payment on the long-term debt. The gains were $24 million and $27 million for the three months ended September 30, 2015, and 2014, respectively, and $71 million and $89 million for the nine months ended September 30, 2015, and 2014, respectively. |
(c) | Amounts exclude losses related to amortization of deferred loan basis adjustments on the de-designated hedged item of $1 million for the three months ended September 30, 2015, and $1 million for the nine months ended September 30, 2015. |
(d) | Amounts exclude gains related to amortization of deferred basis adjustments on the de-designated hedged item of $14 million and $38 million for the three months ended September 30, 2015, and 2014, respectively, and $59 million and $120 million for the nine months ended September 30, 2015, and 2014, respectively. |
(e) | Amounts exclude gains related to the revaluation of the related foreign-denominated debt or receivable of $1 million and $102 million for the three months ended September 30, 2015, and 2014, respectively, and $134 million and $112 million for the nine months ended September 30, 2015, and 2014, respectively. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Cash flow hedges | ||||||||||||||||
Interest rate contracts | ||||||||||||||||
Loss reclassified from accumulated other comprehensive income to interest on long-term debt | $ | — | $ | (1 | ) | $ | — | $ | (1 | ) | ||||||
Total interest on long-term debt | $ | — | $ | (1 | ) | $ | — | $ | (1 | ) | ||||||
Gain recognized in other comprehensive income | $ | — | $ | 1 | $ | — | $ | 1 | ||||||||
Net investment hedges | ||||||||||||||||
Foreign exchange contracts | ||||||||||||||||
Loss reclassified from accumulated other comprehensive loss to income from discontinued operations, net | $ | — | $ | — | $ | (4 | ) | $ | — | |||||||
Total loss from discontinued operations, net | $ | — | $ | — | $ | (4 | ) | $ | — | |||||||
Gain recognized in other comprehensive income (a) | $ | 15 | $ | 8 | $ | 35 | $ | 10 |
(a) | The amounts represent the effective portion of net investment hedges. There are offsetting amounts recognized in accumulated other comprehensive income related to the revaluation of the related net investment in foreign operations, including the tax impacts of the hedge and related net investment, as disclosed separately in Note 17. There were losses of $16 million and losses of $10 million for the three months ended September 30, 2015, and 2014, respectively. There were losses of $56 million and $37 million for the nine months ended September 30, 2015, and 2014, respectively. |
Level 1 | Inputs are quoted prices in active markets for identical assets or liabilities at the measurement date. Additionally, the entity must have the ability to access the active market, and the quoted prices cannot be adjusted by the entity. |
Level 2 | Inputs are other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full term of the assets or liabilities. |
Level 3 | Unobservable inputs are supported by little or no market activity. The unobservable inputs represent management's best assumptions of how market participants would price the assets or liabilities. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation. |
Transfers | Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfer occurred. There were no transfers between any levels during the nine months ended September 30, 2015. |
• | Available-for-sale securities — All classes of available-for-sale securities are carried at fair value based on observable market prices, when available. If observable market prices are not available, our valuations are based on internally developed discounted cash flow models (an income approach) that use a market-based discount rate and consider recent market transactions, experience with similar securities, current business conditions, and analysis of the underlying collateral, as available. To estimate cash flows, we are required to utilize various significant assumptions including market observable inputs (e.g., forward interest rates) and internally developed inputs (including prepayment speeds, delinquency levels, and credit losses). |
• | Mortgage loans held-for-sale, net — Certain of our mortgage loans held-for-sale are accounted for at fair value because of fair value option elections. Mortgage loans held-for-sale are typically pooled together and sold into certain exit markets depending on underlying attributes of the loan, such as eligibility with the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), or the Government National Mortgage Association (Ginnie Mae) (collectively, the Government-sponsored Enterprises, or GSEs), product type, interest rate, and credit quality. Mortgage loans previously classified as Level 2 were mainly GSE-eligible mortgage loans carried at fair value due to fair value option election, which were valued predominantly using published forward agency prices. It also included any domestic loans where recently negotiated market prices for the loan pool exist with a counterparty (which approximates fair value) or quoted market prices for similar loans are available. These mortgage loans were transferred into Level 3 as of December 31, 2014, based on decreased observability of significant inputs resulting from no longer being an active seller of mortgage loans to GSEs. As a result, at December 31, 2014, they were valued based on a discounted cash flow basis utilizing cash flow projections from internally developed models that utilized prepayment, default, and discount rate assumptions. |
• | Interests retained in financial asset sales — The interests retained are in securitization trusts and deferred purchase prices on the sale of whole-loans. Due to inactivity in the market, valuations are based on internally developed discounted cash flow models (an income approach) that use a market-based discount rate; therefore, we classified these assets as Level 3. The valuation considers recent market transactions, experience with similar assets, current business conditions, and analysis of the underlying collateral, as available. To estimate cash flows, we utilize various significant assumptions, including market observable inputs (e.g., forward interest rates) and internally developed inputs (e.g., prepayment speeds, delinquency levels, and credit losses). |
• | Derivative instruments — We enter into a variety of derivative financial instruments as part of our risk management strategies. Certain of these derivatives are exchange traded, such as Eurodollar futures, options of Eurodollar futures, and equity options. To determine the fair value of these instruments, we utilize the quoted market prices for the particular derivative contracts; therefore, we classified these contracts as Level 1. |
Recurring fair value measurements | ||||||||||||||||
September 30, 2015 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Investment securities | ||||||||||||||||
Available-for-sale securities | ||||||||||||||||
Debt securities | ||||||||||||||||
U.S. Treasury and federal agencies | $ | 1,114 | $ | 695 | $ | — | $ | 1,809 | ||||||||
U.S. State and political subdivisions | — | 651 | — | 651 | ||||||||||||
Foreign government | 10 | 174 | — | 184 | ||||||||||||
Mortgage-backed residential | — | 11,614 | — | 11,614 | ||||||||||||
Mortgage-backed commercial | — | 517 | — | 517 | ||||||||||||
Asset-backed | — | 1,951 | — | 1,951 | ||||||||||||
Corporate debt securities | — | 1,047 | — | 1,047 | ||||||||||||
Total debt securities | 1,124 | 16,649 | — | 17,773 | ||||||||||||
Equity securities (a) | 985 | — | — | 985 | ||||||||||||
Total available-for-sale securities | 2,109 | 16,649 | — | 18,758 | ||||||||||||
Other assets | ||||||||||||||||
Interests retained in financial asset sales | — | — | 29 | 29 | ||||||||||||
Derivative contracts in a receivable position (b) | ||||||||||||||||
Interest rate | 5 | 287 | — | 292 | ||||||||||||
Foreign currency | — | 3 | — | 3 | ||||||||||||
Other | 4 | — | — | 4 | ||||||||||||
Total derivative contracts in a receivable position | 9 | 290 | — | 299 | ||||||||||||
Total assets | $ | 2,118 | $ | 16,939 | $ | 29 | $ | 19,086 | ||||||||
Liabilities | ||||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||||
Derivative contracts in a payable position (b) | ||||||||||||||||
Interest rate | $ | (4 | ) | $ | (160 | ) | $ | — | $ | (164 | ) | |||||
Foreign currency | — | (1 | ) | — | (1 | ) | ||||||||||
Other | (3 | ) | (8 | ) | — | (11 | ) | |||||||||
Total derivative contracts in a payable position | (7 | ) | (169 | ) | — | (176 | ) | |||||||||
Total liabilities | $ | (7 | ) | $ | (169 | ) | $ | — | $ | (176 | ) |
(a) | Our investment in any one industry did not exceed 13%. |
(b) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
Recurring fair value measurements | ||||||||||||||||
December 31, 2014 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Investment securities | ||||||||||||||||
Available-for-sale securities | ||||||||||||||||
Debt securities | ||||||||||||||||
U.S. Treasury and federal agencies | $ | 217 | $ | 961 | $ | — | $ | 1,178 | ||||||||
U.S. State and political subdivisions | — | 406 | — | 406 | ||||||||||||
Foreign government | 14 | 218 | — | 232 | ||||||||||||
Mortgage-backed residential | — | 10,425 | — | 10,425 | ||||||||||||
Mortgage-backed commercial | — | 253 | — | 253 | ||||||||||||
Asset-backed | — | 1,991 | — | 1,991 | ||||||||||||
Corporate debt securities | — | 746 | — | 746 | ||||||||||||
Total debt securities | 231 | 15,000 | — | 15,231 | ||||||||||||
Equity securities (a) | 906 | — | — | 906 | ||||||||||||
Total available-for-sale securities | 1,137 | 15,000 | — | 16,137 | ||||||||||||
Mortgage loans held-for-sale, net (b) | — | — | 3 | 3 | ||||||||||||
Other assets | ||||||||||||||||
Interests retained in financial asset sales | — | — | 47 | 47 | ||||||||||||
Derivative contracts in a receivable position (c) | ||||||||||||||||
Interest rate | 4 | 252 | — | 256 | ||||||||||||
Foreign currency | — | 5 | — | 5 | ||||||||||||
Other | 2 | — | — | 2 | ||||||||||||
Total derivative contracts in a receivable position | 6 | 257 | — | 263 | ||||||||||||
Collateral placed with counterparties (d) | — | 15 | — | 15 | ||||||||||||
Total assets | $ | 1,143 | $ | 15,272 | $ | 50 | $ | 16,465 | ||||||||
Liabilities | ||||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||||
Derivative contracts in a payable position (c) | ||||||||||||||||
Interest rate | $ | (2 | ) | $ | (166 | ) | $ | — | $ | (168 | ) | |||||
Foreign currency | — | (78 | ) | — | (78 | ) | ||||||||||
Other | (2 | ) | (4 | ) | — | (6 | ) | |||||||||
Total derivative contracts in a payable position | (4 | ) | (248 | ) | — | (252 | ) | |||||||||
Total liabilities | $ | (4 | ) | $ | (248 | ) | $ | — | $ | (252 | ) |
(a) | Our investment in any one industry did not exceed 16%. |
(b) | Carried at fair value due to fair value option elections. |
(c) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(d) | Represents collateral in the form of investment securities. Cash collateral was excluded. |
Level 3 recurring fair value measurements | |||||||||||||||||||||||||||||||
Net realized/unrealized gains | Fair value at September 30, 2015 | Net unrealized gains included in earnings still held at September 30, 2015 | |||||||||||||||||||||||||||||
($ in millions) | Fair value at July 1, 2015 | included in earnings | included in OCI | Purchases | Sales | Issuances | Settlements | Transfers out of Level 3 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Mortgage loans held-for-sale, net | $ | 4 | $ | — | $ | — | $ | — | $ | (4 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Other assets | |||||||||||||||||||||||||||||||
Interests retained in financial asset sales | 32 | 1 | (a) | — | — | — | 1 | (5 | ) | — | 29 | — | |||||||||||||||||||
Total assets | $ | 36 | $ | 1 | $ | — | $ | — | $ | (4 | ) | $ | 1 | $ | (5 | ) | $ | — | $ | 29 | $ | — |
(a) | Reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income. |
Level 3 recurring fair value measurements | |||||||||||||||||||||||||||||||
Fair value at July 1, 2014 | Net realized/unrealized gains | Purchases | Sales | Issuances | Settlements | Transfers out of Level 3 | Fair value at September 30, 2014 | Net unrealized gains included in earnings still held at September 30, 2014 | |||||||||||||||||||||||
($ in millions) | included in earnings | included in OCI | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Other assets | |||||||||||||||||||||||||||||||
Interests retained in financial asset sales | $ | 74 | $ | 4 | (a) | $ | — | $ | — | $ | — | $ | — | $ | (17 | ) | $ | — | $ | 61 | $ | — | |||||||||
Total assets | $ | 74 | $ | 4 | $ | — | $ | — | $ | — | $ | — | $ | (17 | ) | $ | — | $ | 61 | $ | — |
Level 3 recurring fair value measurements | |||||||||||||||||||||||||||||||
Fair Value at Jan. 1, 2015 | Net realized/unrealized gains | Purchases | Sales | Issuances | Settlements | Transfers out of Level 3 | Fair value at September 30, 2015 | Net unrealized gains included in earnings still held at September 30, 2015 | |||||||||||||||||||||||
($ in millions) | included in earnings | included in OCI | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Mortgage loans held-for-sale, net | $ | 3 | $ | 1 | $ | — | $ | — | $ | (4 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Other assets | |||||||||||||||||||||||||||||||
Interests retained in financial asset sales | 47 | 8 | (a) | — | — | — | 2 | (28 | ) | — | 29 | — | |||||||||||||||||||
Total assets | $ | 50 | $ | 9 | $ | — | $ | — | $ | (4 | ) | $ | 2 | $ | (28 | ) | $ | — | $ | 29 | $ | — |
(a) | Reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income. |
Level 3 recurring fair value measurements | |||||||||||||||||||||||||||||||
Fair Value at Jan. 1, 2014 | Net realized/unrealized gains | Purchases | Sales | Issuances | Settlements | Transfers out of level 3 | Fair value at September 30, 2014 | Net unrealized gains included in earnings still held at September 30, 2014 | |||||||||||||||||||||||
($ in millions) | included in earnings | included in OCI | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Other assets | |||||||||||||||||||||||||||||||
Interests retained in financial asset sales | $ | 100 | $ | 9 | (a) | $ | — | $ | — | $ | — | $ | — | $ | (48 | ) | $ | — | $ | 61 | $ | — | |||||||||
Derivative contracts, net | (1 | ) | — | — | — | — | — | (2 | ) | 3 | — | — | |||||||||||||||||||
Total assets | $ | 99 | $ | 9 | $ | — | $ | — | $ | — | $ | — | $ | (50 | ) | $ | 3 | $ | 61 | $ | — |
(a) | Reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income. |
Nonrecurring fair value measurements | Lower-of-cost or fair value or valuation reserve allowance | Total gain included in earnings for the three months ended | Total gain included in earnings for the nine months ended | ||||||||||||||||||||||
September 30, 2015 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Loans held-for-sale, net | |||||||||||||||||||||||||
Other | $ | — | $ | — | $ | 37 | $ | 37 | $ | — | n/m | (a) | n/m | (a) | |||||||||||
Total loans held-for-sale, net | — | — | 37 | 37 | — | n/m | (a) | n/m | (a) | ||||||||||||||||
Commercial finance receivables and loans, net (b) | |||||||||||||||||||||||||
Automotive | — | — | 13 | 13 | (4 | ) | n/m | (a) | n/m | (a) | |||||||||||||||
Other | — | — | 30 | 30 | (15 | ) | n/m | (a) | n/m | (a) | |||||||||||||||
Total commercial finance receivables and loans, net | — | — | 43 | 43 | (19 | ) | n/m | (a) | n/m | (a) | |||||||||||||||
Other assets | |||||||||||||||||||||||||
Repossessed and foreclosed assets (c) | — | — | 9 | 9 | (3 | ) | n/m | (a) | n/m | (a) | |||||||||||||||
Other | — | — | 2 | 2 | — | n/m | (a) | n/m | (a) | ||||||||||||||||
Total assets | $ | — | $ | — | $ | 91 | $ | 91 | $ | (22 | ) | n/m | n/m |
(a) | We consider the applicable valuation or loan loss allowance to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation or loan loss allowance. |
(b) | Represents the portion of the portfolio specifically impaired during 2015. The related valuation allowance represents the cumulative adjustment to fair value of those specific receivables. |
(c) | The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value. |
Nonrecurring fair value measurements | Lower-of-cost or fair value or valuation reserve allowance | Total gain included in earnings for the three months ended | Total gain included in earnings for the nine months ended | ||||||||||||||||||||||||||
September 30, 2014 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Commercial finance receivables and loans, net (a) | |||||||||||||||||||||||||||||
Automotive | $ | — | $ | — | $ | 16 | $ | 16 | $ | (1 | ) | n/m | (b) | n/m | (b) | ||||||||||||||
Other | — | — | 37 | 37 | (14 | ) | n/m | (b) | n/m | (b) | |||||||||||||||||||
Total commercial finance receivables and loans, net | — | — | 53 | 53 | (15 | ) | n/m | (b) | n/m | (b) | |||||||||||||||||||
Other assets | |||||||||||||||||||||||||||||
Repossessed and foreclosed assets (c) | — | — | 8 | 8 | (3 | ) | n/m | (b) | n/m | (b) | |||||||||||||||||||
Other | — | — | 2 | 2 | — | $ | — | $ | — | ||||||||||||||||||||
Total assets | $ | — | $ | — | $ | 63 | $ | 63 | $ | (18 | ) | n/m | n/m |
(a) | Represents the portion of the portfolio specifically impaired during 2014. The related valuation allowance represents the cumulative adjustment to fair value of those specific receivables. |
(b) | We consider the applicable valuation or loan loss allowance to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation or loan loss allowance. |
(c) | The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value. |
Estimated fair value | |||||||||||||||||||
($ in millions) | Carrying value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
September 30, 2015 | |||||||||||||||||||
Financial assets | |||||||||||||||||||
Loans held-for-sale, net | $ | 37 | $ | — | $ | — | $ | 37 | $ | 37 | |||||||||
Finance receivables and loans, net | 106,973 | — | — | 107,846 | 107,846 | ||||||||||||||
Nonmarketable equity investments | 313 | — | 287 | 43 | 330 | ||||||||||||||
Financial liabilities | |||||||||||||||||||
Deposit liabilities | $ | 64,041 | $ | — | $ | — | $ | 64,728 | $ | 64,728 | |||||||||
Short-term borrowings | 5,378 | — | — | 5,378 | 5,378 | ||||||||||||||
Long-term debt | 67,461 | — | 21,384 | 47,762 | 69,146 | ||||||||||||||
December 31, 2014 | |||||||||||||||||||
Financial assets | |||||||||||||||||||
Loans held-for-sale, net | $ | 2,003 | $ | — | $ | 485 | $ | 1,554 | $ | 2,039 | |||||||||
Finance receivables and loans, net | 98,971 | — | — | 99,430 | 99,430 | ||||||||||||||
Nonmarketable equity investments | 271 | — | 246 | 33 | 279 | ||||||||||||||
Financial liabilities | |||||||||||||||||||
Deposit liabilities | $ | 58,222 | $ | — | $ | — | $ | 58,777 | $ | 58,777 | |||||||||
Short-term borrowings | 7,062 | — | — | 7,063 | 7,063 | ||||||||||||||
Long-term debt | 66,558 | — | 25,224 | 44,084 | 69,308 |
• | Cash and cash equivalents — Included in cash and cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal. Classified as Level 1 under the fair value hierarchy, cash and cash equivalents generally expose us to limited credit risk and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates. As such, the carrying value approximates the fair value of these instruments. |
• | Loans held-for-sale, net — Loans held-for-sale classified as Level 3 include all loans valued using internally developed valuation models because observable market prices were not available. We based our valuation of automotive loans held-for-sale on internally developed discounted cash flow models (an income approach). These valuation models estimate the exit price we expect to receive in the loan’s principal market, which, depending on characteristics of the loans, may be the whole-loan market or the securitization market. Although we utilize and give priority to market observable inputs, such as interest rates and market spreads within these models, we are typically required to utilize internal inputs, such as prepayment speeds (absolute prepayment model, or ABS), gross loss range by loan segment (percentage of receivable balance lost in the event of default), and credit spreads (the risk premium component added to observed benchmark rate to determine the discount rate used in the discounted cash flow model). While |
• | Finance receivables and loans, net — With the exception of mortgage loans held-for-investment, the fair value of finance receivables and loans was based on discounted future cash flows using applicable spreads to approximate current rates applicable to each category of finance receivables and loans (an income approach using Level 3 inputs). The carrying value of commercial receivables in certain markets and certain automotive and other receivables for which interest rates reset on a short-term basis with applicable market indices are assumed to approximate fair value either because of the short-term nature or because of the interest rate adjustment feature. The fair value of commercial receivables in other markets was based on discounted future cash flows using applicable spreads to approximate current rates applicable to similar assets in those markets. |
• | Deposit liabilities — Deposit liabilities represent certain consumer and brokered bank deposits, mortgage escrow deposits, and dealer deposits. The fair value of deposits at Level 3 were estimated by discounting projected cash flows based on discount factors derived from the forward interest rate swap curve. |
• | Short-term borrowings and Long-term debt — Level 2 debt was valued using quoted market prices for similar instruments, when available, or other means for substantiation with observable inputs. Debt valued by discounting projected cash flows using internally derived inputs, such as prepayment speeds and discount rates, was classified as Level 3. |
Gross Amounts of Recognized Assets/(Liabilities) | Gross Amounts Offset in the Condensed Consolidated Balance Sheet | Net Amounts of Assets/(Liabilities) Presented in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||||
September 30, 2015 ($ in millions) | Financial Instruments | Collateral (a) (b) (c) | Net Amount | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Derivative assets in net asset positions | $ | 298 | $ | — | $ | 298 | $ | (114 | ) | $ | (122 | ) | $ | 62 | ||||||||||
Derivative assets in net liability positions | 1 | — | 1 | (1 | ) | — | — | |||||||||||||||||
Total assets (d) | $ | 299 | $ | — | $ | 299 | $ | (115 | ) | $ | (122 | ) | $ | 62 | ||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative liabilities in net liability positions | $ | (54 | ) | $ | — | $ | (54 | ) | $ | 1 | $ | 11 | $ | (42 | ) | |||||||||
Derivative liabilities in net asset positions | (114 | ) | — | (114 | ) | 114 | — | — | ||||||||||||||||
Derivative liabilities with no offsetting arrangements | (8 | ) | — | (8 | ) | — | — | (8 | ) | |||||||||||||||
Total derivative liabilities (d) | (176 | ) | — | (176 | ) | 115 | 11 | (50 | ) | |||||||||||||||
Securities sold under agreements to repurchase (e) | (1,520 | ) | — | (1,520 | ) | — | 1,520 | — | ||||||||||||||||
Total liabilities | $ | (1,696 | ) | $ | — | $ | (1,696 | ) | $ | 115 | $ | 1,531 | $ | (50 | ) |
(a) | Financial collateral received/pledged shown as a balance based on the sum of all net asset and liability positions between Ally and each individual derivative counterparty. |
(b) | Amounts disclosed are limited to the financial asset or liability balance and, accordingly, exclude excess collateral received or pledged and non-cash collateral received. $8 million of non-cash derivative collateral pledged to us was excluded at September 30, 2015. We do not record such collateral received on our Condensed Consolidated Balance Sheet unless certain conditions are met. |
(c) | Certain agreements grant us the right to sell or pledge the non-cash assets we receive as collateral. Non-cash collateral pledged to us where the agreement grants us the right to sell or pledge the underlying assets had a fair value of $8 million at September 30, 2015. We have not sold or pledged any of the non-cash collateral received under these agreements as of September 30, 2015. |
(d) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(e) | For additional information on securities sold under agreements to repurchase, refer to Note 13. |
Gross Amounts of Recognized Assets/(Liabilities) | Gross Amounts Offset in the Condensed Consolidated Balance Sheet | Net Amounts of Assets/(Liabilities) Presented in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||||
December 31, 2014 ($ in millions) | Financial Instruments | Collateral (a) | Net Amount | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Derivative assets in net asset positions | $ | 216 | $ | — | $ | 216 | $ | (60 | ) | $ | (68 | ) | $ | 88 | ||||||||||
Derivative assets in net liability positions | 47 | — | 47 | (47 | ) | — | — | |||||||||||||||||
Total assets (b) | $ | 263 | $ | — | $ | 263 | $ | (107 | ) | $ | (68 | ) | $ | 88 | ||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative liabilities in net liability positions | $ | (188 | ) | $ | — | $ | (188 | ) | $ | 47 | $ | 54 | $ | (87 | ) | |||||||||
Derivative liabilities in net asset positions | (60 | ) | — | (60 | ) | 60 | — | — | ||||||||||||||||
Derivative liabilities with no offsetting arrangements | (4 | ) | — | (4 | ) | — | — | (4 | ) | |||||||||||||||
Total derivative liabilities (b) | (252 | ) | — | (252 | ) | 107 | 54 | (91 | ) | |||||||||||||||
Securities sold under agreements to repurchase (c) | (774 | ) | — | (774 | ) | — | 774 | — | ||||||||||||||||
Total liabilities | $ | (1,026 | ) | $ | — | $ | (1,026 | ) | $ | 107 | $ | 828 | $ | (91 | ) |
(a) | Financial collateral received/pledged shown as a balance based on the sum of all net asset and liability positions between Ally and each individual derivative counterparty. |
(b) | For additional information on derivative instruments and hedging activities, refer to Note 20. |
(c) | For additional information on securities sold under agreements to repurchase, refer to Note 13. |
Three months ended September 30, ($ in millions) | Automotive Finance operations | Insurance operations | Mortgage operations | Corporate and Other (a) | Consolidated (b) | |||||||||||||||
2015 | ||||||||||||||||||||
Net financing revenue | $ | 870 | $ | 16 | $ | 20 | $ | 64 | $ | 970 | ||||||||||
Other revenue | 63 | 233 | 10 | 26 | 332 | |||||||||||||||
Total net revenue | 933 | 249 | 30 | 90 | 1,302 | |||||||||||||||
Provision for loan losses | 201 | — | 6 | 4 | 211 | |||||||||||||||
Total noninterest expense | 385 | 209 | 17 | 63 | 674 | |||||||||||||||
Income from continuing operations before income tax expense | $ | 347 | $ | 40 | $ | 7 | $ | 23 | $ | 417 | ||||||||||
Total assets | $ | 113,843 | $ | 6,997 | $ | 9,772 | $ | 25,493 | $ | 156,105 | ||||||||||
2014 | ||||||||||||||||||||
Net financing revenue | $ | 850 | $ | 16 | $ | 9 | $ | 14 | $ | 889 | ||||||||||
Other revenue | 69 | 287 | — | 19 | 375 | |||||||||||||||
Total net revenue | 919 | 303 | 9 | 33 | 1,264 | |||||||||||||||
Provision for loan losses | 109 | — | (7 | ) | — | 102 | ||||||||||||||
Total noninterest expense | 395 | 243 | 19 | 85 | 742 | |||||||||||||||
Income (loss) from continuing operations before income tax expense | $ | 415 | $ | 60 | $ | (3 | ) | $ | (52 | ) | $ | 420 | ||||||||
Total assets | $ | 110,937 | $ | 7,178 | $ | 7,402 | $ | 23,678 | $ | 149,195 |
(a) | Total assets for Corporate Finance were $2.3 billion and $1.7 billion at September 30, 2015, and 2014, respectively. |
(b) | Net financing revenue after the provision for loan losses totaled $759 million and $787 million for the three months ended September 30, 2015, and 2014, respectively. |
Nine months ended September 30, ($ in millions) | Automotive Finance operations | Insurance operations | Mortgage operations | Corporate and Other (a) | Consolidated (b) | |||||||||||||||
2015 | ||||||||||||||||||||
Net financing revenue | $ | 2,529 | $ | 42 | $ | 50 | $ | 115 | $ | 2,736 | ||||||||||
Other revenue (loss) | 170 | 769 | 84 | (237 | ) | 786 | ||||||||||||||
Total net revenue (loss) | 2,699 | 811 | 134 | (122 | ) | 3,522 | ||||||||||||||
Provision for loan losses | 460 | — | 4 | 3 | 467 | |||||||||||||||
Total noninterest expense | 1,160 | 678 | 46 | 209 | 2,093 | |||||||||||||||
Income (loss) from continuing operations before income tax expense | $ | 1,079 | $ | 133 | $ | 84 | $ | (334 | ) | $ | 962 | |||||||||
Total assets | $ | 113,843 | $ | 6,997 | $ | 9,772 | $ | 25,493 | $ | 156,105 | ||||||||||
2014 | ||||||||||||||||||||
Net financing revenue (loss) | $ | 2,554 | $ | 47 | $ | 35 | $ | (60 | ) | $ | 2,576 | |||||||||
Other revenue | 195 | 849 | 13 | 4 | 1,061 | |||||||||||||||
Total net revenue (loss) | 2,749 | 896 | 48 | (56 | ) | 3,637 | ||||||||||||||
Provision for loan losses | 367 | — | (55 | ) | (10 | ) | 302 | |||||||||||||
Total noninterest expense | 1,167 | 785 | 62 | 262 | 2,276 | |||||||||||||||
Income (loss) from continuing operations before income tax expense | $ | 1,215 | $ | 111 | $ | 41 | $ | (308 | ) | $ | 1,059 | |||||||||
Total assets | $ | 110,937 | $ | 7,178 | $ | 7,402 | $ | 23,678 | $ | 149,195 |
(a) | Total assets for Corporate Finance were $2.3 billion and $1.7 billion at September 30, 2015, and 2014, respectively. |
(b) | Net financing revenue after the provision for loan losses totaled $2.3 billion for each of the nine months ended September 30, 2015, and 2014, respectively. |
Three months ended September 30, ($ in millions) | Revenue (a) | Income (loss) from continuing operations before income tax expense (b) | Net income (b)(c) | |||||||||
2015 | ||||||||||||
Canada | $ | 24 | $ | 11 | $ | 9 | ||||||
Europe | — | 1 | — | |||||||||
Asia-Pacific | — | — | — | |||||||||
Total foreign (d) | 24 | 12 | 9 | |||||||||
Total domestic (e) | 1,278 | 405 | 259 | |||||||||
Total | $ | 1,302 | $ | 417 | $ | 268 | ||||||
2014 | ||||||||||||
Canada | $ | 31 | $ | 7 | $ | 9 | ||||||
Europe | — | (1 | ) | 1 | ||||||||
Asia-Pacific | — | — | 29 | |||||||||
Total foreign | 31 | 6 | 39 | |||||||||
Total domestic (e) | 1,233 | 414 | 384 | |||||||||
Total | $ | 1,264 | $ | 420 | $ | 423 |
(a) | Revenue consists of net financing revenue and total other revenue as presented in our Condensed Consolidated Financial Statements. |
(b) | Domestic amounts include original discount amortization of $16 million and $51 million for the three months ended September 30, 2015, and 2014, respectively. |
(c) | Gain (loss) realized on sale of discontinued operations are allocated to the geographic area in which the business operated. |
(d) | Our foreign operations as of September 30, 2015, consist of our ongoing Insurance operations in Canada and our remaining international entities in wind-down. |
(e) | Amounts include eliminations between our domestic and foreign operations. |
Nine months ended September 30, ($ in millions) | Revenue (a) | Income from continuing operations before income tax expense (b) | Net income (loss) (b)(c) | |||||||||
2015 | ||||||||||||
Canada | $ | 76 | $ | 35 | $ | 30 | ||||||
Europe | 1 | 5 | 28 | |||||||||
Latin America | — | — | — | |||||||||
Asia-Pacific | — | — | 452 | |||||||||
Total foreign (d) | 77 | 40 | 510 | |||||||||
Total domestic (e) | 3,445 | 922 | 516 | |||||||||
Total | $ | 3,522 | $ | 962 | $ | 1,026 | ||||||
2014 | ||||||||||||
Canada | $ | 95 | $ | 36 | $ | 55 | ||||||
Europe | 2 | — | 5 | |||||||||
Latin America | — | — | (8 | ) | ||||||||
Asia-Pacific | — | — | 95 | |||||||||
Total foreign | 97 | 36 | 147 | |||||||||
Total domestic (e) | 3,540 | 1,023 | 826 | |||||||||
Total | $ | 3,637 | $ | 1,059 | $ | 973 |
(a) | Revenue consists of net financing revenue and total other revenue as presented in our Condensed Consolidated Financial Statements. |
(b) | Domestic amounts include original discount amortization of $45 million and $149 million for the nine months ended September 30, 2015, and 2014, respectively. |
(c) | Gain (loss) realized on sale of discontinued operations are allocated to the geographic area in which the business operated. |
(d) | Our foreign operations as of September 30, 2015, consist of our ongoing Insurance operations in Canada and our remaining international entities in wind-down. |
(e) | Amounts include eliminations between our domestic and foreign operations. |
Three months ended September 30, 2015 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Financing revenue and other interest income | ||||||||||||||||||||
Interest and fees on finance receivables and loans | $ | (33 | ) | $ | — | $ | 1,199 | $ | — | $ | 1,166 | |||||||||
Interest and fees on finance receivables and loans — intercompany | 3 | — | 1 | (4 | ) | — | ||||||||||||||
Interest on loans held-for-sale | — | — | 2 | — | 2 | |||||||||||||||
Interest and dividends on available-for-sale investment securities | — | — | 102 | — | 102 | |||||||||||||||
Interest on cash and cash equivalents | — | — | 2 | — | 2 | |||||||||||||||
Interest-bearing cash — intercompany | — | — | 2 | (2 | ) | — | ||||||||||||||
Operating leases | 1 | — | 829 | — | 830 | |||||||||||||||
Total financing revenue and other interest income | (29 | ) | — | 2,137 | (6 | ) | 2,102 | |||||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | 3 | — | 178 | — | 181 | |||||||||||||||
Interest on short-term borrowings | 10 | — | 3 | — | 13 | |||||||||||||||
Interest on long-term debt | 272 | — | 138 | — | 410 | |||||||||||||||
Interest on intercompany debt | 3 | — | 3 | (6 | ) | — | ||||||||||||||
Total interest expense | 288 | — | 322 | (6 | ) | 604 | ||||||||||||||
Depreciation expense on operating lease assets | 1 | — | 527 | — | 528 | |||||||||||||||
Net financing (loss) revenue | (318 | ) | — | 1,288 | — | 970 | ||||||||||||||
Cash dividends from subsidiaries | ||||||||||||||||||||
Nonbank subsidiaries | 494 | — | — | (494 | ) | — | ||||||||||||||
Other revenue | ||||||||||||||||||||
Servicing fees | 289 | — | 210 | (487 | ) | 12 | ||||||||||||||
Insurance premiums and service revenue earned | — | — | 236 | — | 236 | |||||||||||||||
Loss on mortgage and automotive loans, net | (1 | ) | — | (1 | ) | — | (2 | ) | ||||||||||||
Other gain on investments, net | — | — | 6 | — | 6 | |||||||||||||||
Other income, net of losses | 78 | — | 119 | (117 | ) | 80 | ||||||||||||||
Total other revenue | 366 | — | 570 | (604 | ) | 332 | ||||||||||||||
Total net revenue | 542 | — | 1,858 | (1,098 | ) | 1,302 | ||||||||||||||
Provision for loan losses | 48 | — | 163 | — | 211 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Compensation and benefits expense | 138 | — | 212 | (115 | ) | 235 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | — | 61 | — | 61 | |||||||||||||||
Other operating expenses | 315 | — | 552 | (489 | ) | 378 | ||||||||||||||
Total noninterest expense | 453 | — | 825 | (604 | ) | 674 | ||||||||||||||
Income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries | 41 | — | 870 | (494 | ) | 417 | ||||||||||||||
Income tax (benefit) expense from continuing operations | (30 | ) | — | 174 | — | 144 | ||||||||||||||
Net income from continuing operations | 71 | — | 696 | (494 | ) | 273 | ||||||||||||||
Loss from discontinued operations, net of tax | (5 | ) | — | — | — | (5 | ) | |||||||||||||
Undistributed income (loss) of subsidiaries | ||||||||||||||||||||
Bank subsidiary | 254 | 254 | — | (508 | ) | — | ||||||||||||||
Nonbank subsidiaries | (52 | ) | (1 | ) | — | 53 | — | |||||||||||||
Net income | 268 | 253 | 696 | (949 | ) | 268 | ||||||||||||||
Other comprehensive income, net of tax | 61 | 65 | 55 | (120 | ) | 61 | ||||||||||||||
Comprehensive income | $ | 329 | $ | 318 | $ | 751 | $ | (1,069 | ) | $ | 329 |
Three months ended September 30, 2014 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Financing revenue and other interest income | ||||||||||||||||||||
Interest and fees on finance receivables and loans | $ | 16 | $ | — | $ | 1,098 | $ | — | $ | 1,114 | ||||||||||
Interest and fees on finance receivables and loans — intercompany | 10 | — | 21 | (31 | ) | — | ||||||||||||||
Interest and dividends on available-for-sale investment securities | — | — | 94 | — | 94 | |||||||||||||||
Interest on cash and cash equivalents | — | — | 2 | — | 2 | |||||||||||||||
Interest-bearing cash - intercompany | — | — | 1 | (1 | ) | — | ||||||||||||||
Operating leases | 1 | — | 898 | — | 899 | |||||||||||||||
Total financing revenue and other interest income | 27 | — | 2,114 | (32 | ) | 2,109 | ||||||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | 3 | — | 163 | — | 166 | |||||||||||||||
Interest on short-term borrowings | 10 | — | 2 | — | 12 | |||||||||||||||
Interest on long-term debt | 350 | — | 143 | — | 493 | |||||||||||||||
Interest on intercompany debt | 22 | — | 10 | (32 | ) | — | ||||||||||||||
Total interest expense | 385 | — | 318 | (32 | ) | 671 | ||||||||||||||
Depreciation expense on operating lease assets | (4 | ) | — | 553 | — | 549 | ||||||||||||||
Net financing (loss) revenue | (354 | ) | — | 1,243 | — | 889 | ||||||||||||||
Cash dividends from subsidiaries | ||||||||||||||||||||
Bank subsidiaries | 150 | 150 | — | (300 | ) | — | ||||||||||||||
Nonbank subsidiaries | 141 | — | — | (141 | ) | — | ||||||||||||||
Other revenue | ||||||||||||||||||||
Servicing fees | 6 | — | — | — | 6 | |||||||||||||||
Insurance premiums and service revenue earned | — | — | 246 | — | 246 | |||||||||||||||
(Loss) gain on mortgage and automotive loans, net | (2 | ) | — | 2 | — | — | ||||||||||||||
Other gain on investments, net | — | — | 45 | — | 45 | |||||||||||||||
Other income, net of losses | 206 | — | 373 | (501 | ) | 78 | ||||||||||||||
Total other revenue | 210 | — | 666 | (501 | ) | 375 | ||||||||||||||
Total net revenue | 147 | 150 | 1,909 | (942 | ) | 1,264 | ||||||||||||||
Provision for loan losses | 88 | — | 14 | — | 102 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Compensation and benefits expense | 153 | — | 199 | (111 | ) | 241 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | — | 97 | — | 97 | |||||||||||||||
Other operating expenses | 252 | — | 542 | (390 | ) | 404 | ||||||||||||||
Total noninterest expense | 405 | — | 838 | (501 | ) | 742 | ||||||||||||||
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries | (346 | ) | 150 | 1,057 | (441 | ) | 420 | |||||||||||||
Income tax (benefit) expense from continuing operations | (68 | ) | — | 195 | — | 127 | ||||||||||||||
Net (loss) income from continuing operations | (278 | ) | 150 | 862 | (441 | ) | 293 | |||||||||||||
Income from discontinued operations, net of tax | 127 | — | 3 | — | 130 | |||||||||||||||
Undistributed income (loss) of subsidiaries | ||||||||||||||||||||
Bank subsidiary | 150 | 150 | — | (300 | ) | — | ||||||||||||||
Nonbank subsidiaries | 424 | (2 | ) | — | (422 | ) | — | |||||||||||||
Net income | 423 | 298 | 865 | (1,163 | ) | 423 | ||||||||||||||
Other comprehensive loss, net of tax | (55 | ) | (3 | ) | (50 | ) | 53 | (55 | ) | |||||||||||
Comprehensive income | $ | 368 | $ | 295 | $ | 815 | $ | (1,110 | ) | $ | 368 |
Nine months ended September 30, 2015 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Financing revenue and other interest income | ||||||||||||||||||||
Interest and fees on finance receivables and loans | $ | (45 | ) | $ | — | $ | 3,403 | $ | — | $ | 3,358 | |||||||||
Interest and fees on finance receivables and loans — intercompany | 15 | — | 22 | (37 | ) | — | ||||||||||||||
Interest on loans held-for-sale | — | — | 40 | — | 40 | |||||||||||||||
Interest and dividends on available-for-sale investment securities | — | — | 283 | — | 283 | |||||||||||||||
Interest on cash and cash equivalents | 1 | — | 5 | — | 6 | |||||||||||||||
Interest-bearing cash — intercompany | — | — | 6 | (6 | ) | — | ||||||||||||||
Operating leases | 1 | — | 2,585 | — | 2,586 | |||||||||||||||
Total financing revenue and other interest income | (28 | ) | — | 6,344 | (43 | ) | 6,273 | |||||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | 8 | — | 522 | — | 530 | |||||||||||||||
Interest on short-term borrowings | 30 | — | 6 | — | 36 | |||||||||||||||
Interest on long-term debt | 856 | — | 402 | — | 1,258 | |||||||||||||||
Interest on intercompany debt | 28 | — | 15 | (43 | ) | — | ||||||||||||||
Total interest expense | 922 | — | 945 | (43 | ) | 1,824 | ||||||||||||||
Depreciation expense on operating lease assets | 1 | — | 1,712 | — | 1,713 | |||||||||||||||
Net financing (loss) revenue | (951 | ) | — | 3,687 | — | 2,736 | ||||||||||||||
Cash dividends from subsidiaries | ||||||||||||||||||||
Bank subsidiary | 525 | 525 | — | (1,050 | ) | — | ||||||||||||||
Nonbank subsidiaries | 980 | — | — | (980 | ) | — | ||||||||||||||
Other revenue | ||||||||||||||||||||
Servicing fees | 846 | — | 621 | (1,435 | ) | 32 | ||||||||||||||
Insurance premiums and service revenue earned | — | — | 706 | — | 706 | |||||||||||||||
(Loss) gain on mortgage and automotive loans, net | (9 | ) | — | 54 | — | 45 | ||||||||||||||
Loss on extinguishment of debt | (353 | ) | — | (1 | ) | — | (354 | ) | ||||||||||||
Other gain on investments, net | — | — | 106 | — | 106 | |||||||||||||||
Other income, net of losses | 199 | — | 398 | (346 | ) | 251 | ||||||||||||||
Total other revenue | 683 | — | 1,884 | (1,781 | ) | 786 | ||||||||||||||
Total net revenue | 1,237 | 525 | 5,571 | (3,811 | ) | 3,522 | ||||||||||||||
Provision for loan losses | 111 | — | 356 | — | 467 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Compensation and benefits expense | 431 | — | 634 | (339 | ) | 726 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | — | 239 | — | 239 | |||||||||||||||
Other operating expenses | 935 | — | 1,635 | (1,442 | ) | 1,128 | ||||||||||||||
Total noninterest expense | 1,366 | — | 2,508 | (1,781 | ) | 2,093 | ||||||||||||||
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries | (240 | ) | 525 | 2,707 | (2,030 | ) | 962 | |||||||||||||
Income tax (benefit) expense from continuing operations | (231 | ) | — | 572 | — | 341 | ||||||||||||||
Net (loss) income from continuing operations | (9 | ) | 525 | 2,135 | (2,030 | ) | 621 | |||||||||||||
Income from discontinued operations, net of tax | 367 | — | 38 | — | 405 | |||||||||||||||
Undistributed income (loss) of subsidiaries | ||||||||||||||||||||
Bank subsidiary | 302 | 302 | — | (604 | ) | — | ||||||||||||||
Nonbank subsidiaries | 366 | (1 | ) | — | (365 | ) | — | |||||||||||||
Net income | 1,026 | 826 | 2,173 | (2,999 | ) | 1,026 | ||||||||||||||
Other comprehensive (loss) income, net of tax | (56 | ) | 40 | (64 | ) | 24 | (56 | ) | ||||||||||||
Comprehensive income | $ | 970 | $ | 866 | $ | 2,109 | $ | (2,975 | ) | $ | 970 |
Nine months ended September 30, 2014 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Financing revenue and other interest income | ||||||||||||||||||||
Interest and fees on finance receivables and loans | $ | (2 | ) | $ | — | $ | 3,347 | $ | — | $ | 3,345 | |||||||||
Interest and fees on finance receivables and loans — intercompany | 26 | — | 64 | (90 | ) | — | ||||||||||||||
Interest on loans held-for-sale | — | — | 1 | — | 1 | |||||||||||||||
Interest and dividends on available-for-sale investment securities | — | — | 282 | — | 282 | |||||||||||||||
Interest on cash and cash equivalents | 1 | — | 5 | — | 6 | |||||||||||||||
Interest-bearing — intercompany | — | — | 4 | (4 | ) | — | ||||||||||||||
Operating leases | 269 | — | 2,384 | — | 2,653 | |||||||||||||||
Total financing revenue and other interest income | 294 | — | 6,087 | (94 | ) | 6,287 | ||||||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | 11 | — | 484 | — | 495 | |||||||||||||||
Interest on short-term borrowings | 32 | — | 8 | — | 40 | |||||||||||||||
Interest on long-term debt | 1,143 | — | 433 | — | 1,576 | |||||||||||||||
Interest on intercompany debt | 68 | — | 26 | (94 | ) | — | ||||||||||||||
Total interest expense | 1,254 | — | 951 | (94 | ) | 2,111 | ||||||||||||||
Depreciation expense on operating lease assets | 164 | — | 1,436 | — | 1,600 | |||||||||||||||
Net financing (loss) revenue | (1,124 | ) | — | 3,700 | — | 2,576 | ||||||||||||||
Cash dividends from subsidiaries | ||||||||||||||||||||
Bank subsidiary | 1,650 | 1,650 | — | (3,300 | ) | — | ||||||||||||||
Nonbank subsidiaries | 462 | — | — | (462 | ) | — | ||||||||||||||
Other revenue | ||||||||||||||||||||
Servicing fees | 22 | — | — | — | 22 | |||||||||||||||
Insurance premiums and service revenue earned | — | — | 736 | — | 736 | |||||||||||||||
(Loss) gain on mortgage and automotive loans, net | (2 | ) | — | 8 | — | 6 | ||||||||||||||
Loss on extinguishment of debt | (46 | ) | — | — | — | (46 | ) | |||||||||||||
Other gain on investments, net | — | — | 129 | — | 129 | |||||||||||||||
Other income, net of losses | 591 | — | 1,007 | (1,384 | ) | 214 | ||||||||||||||
Total other revenue | 565 | — | 1,880 | (1,384 | ) | 1,061 | ||||||||||||||
Total net revenue | 1,553 | 1,650 | 5,580 | (5,146 | ) | 3,637 | ||||||||||||||
Provision for loan losses | 165 | — | 137 | — | 302 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Compensation and benefits expense | 441 | — | 604 | (335 | ) | 710 | ||||||||||||||
Insurance losses and loss adjustment expenses | — | — | 353 | — | 353 | |||||||||||||||
Other operating expenses | 648 | — | 1,614 | (1,049 | ) | 1,213 | ||||||||||||||
Total noninterest expense | 1,089 | — | 2,571 | (1,384 | ) | 2,276 | ||||||||||||||
Income from continuing operations before income tax (benefit) expense and undistributed (loss) income of subsidiaries | 299 | 1,650 | 2,872 | (3,762 | ) | 1,059 | ||||||||||||||
Income tax (benefit) expense from continuing operations | (309 | ) | — | 594 | — | 285 | ||||||||||||||
Net income from continuing operations | 608 | 1,650 | 2,278 | (3,762 | ) | 774 | ||||||||||||||
Income from discontinued operations, net of tax | 172 | — | 27 | — | 199 | |||||||||||||||
Undistributed (loss) income of subsidiaries | ||||||||||||||||||||
Bank subsidiary | (802 | ) | (802 | ) | — | 1,604 | — | |||||||||||||
Nonbank subsidiaries | 995 | (2 | ) | — | (993 | ) | — | |||||||||||||
Net income | 973 | 846 | 2,305 | (3,151 | ) | 973 | ||||||||||||||
Other comprehensive income, net of tax | 126 | 116 | 124 | (240 | ) | 126 | ||||||||||||||
Comprehensive income | $ | 1,099 | $ | 962 | $ | 2,429 | $ | (3,391 | ) | $ | 1,099 |
September 30, 2015 ($ in millions) | Parent (a) | Guarantors | Nonguarantors (a) | Consolidating adjustments | Ally consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Noninterest-bearing | $ | 797 | $ | — | $ | 869 | $ | — | $ | 1,666 | ||||||||||
Interest-bearing | 1,201 | — | 2,360 | — | 3,561 | |||||||||||||||
Interest-bearing — intercompany | — | — | 722 | (722 | ) | — | ||||||||||||||
Total cash and cash equivalents | 1,998 | — | 3,951 | (722 | ) | 5,227 | ||||||||||||||
Investment securities | — | — | 18,758 | — | 18,758 | |||||||||||||||
Loans held-for-sale, net | — | — | 37 | — | 37 | |||||||||||||||
Finance receivables and loans, net | ||||||||||||||||||||
Finance receivables and loans, net | 3,818 | — | 104,173 | — | 107,991 | |||||||||||||||
Intercompany loans to | ||||||||||||||||||||
Nonbank subsidiaries | 1,781 | — | 546 | (2,327 | ) | — | ||||||||||||||
Allowance for loan losses | (86 | ) | — | (932 | ) | — | (1,018 | ) | ||||||||||||
Total finance receivables and loans, net | 5,513 | — | 103,787 | (2,327 | ) | 106,973 | ||||||||||||||
Investment in operating leases, net | 92 | — | 17,200 | — | 17,292 | |||||||||||||||
Intercompany receivables from | ||||||||||||||||||||
Bank subsidiary | 338 | — | — | (338 | ) | — | ||||||||||||||
Nonbank subsidiaries | 218 | — | 242 | (460 | ) | — | ||||||||||||||
Investment in subsidiaries | ||||||||||||||||||||
Bank subsidiary | 16,296 | 16,296 | — | (32,592 | ) | — | ||||||||||||||
Nonbank subsidiaries | 10,931 | 12 | — | (10,943 | ) | — | ||||||||||||||
Premiums receivable and other insurance assets | — | — | 1,816 | (22 | ) | 1,794 | ||||||||||||||
Other assets | 4,932 | — | 3,971 | (2,879 | ) | 6,024 | ||||||||||||||
Total assets | $ | 40,318 | $ | 16,308 | $ | 149,762 | $ | (50,283 | ) | $ | 156,105 | |||||||||
Liabilities | ||||||||||||||||||||
Deposit liabilities | ||||||||||||||||||||
Noninterest-bearing | $ | — | $ | — | $ | 91 | $ | — | $ | 91 | ||||||||||
Interest-bearing | 248 | — | 63,702 | — | 63,950 | |||||||||||||||
Total deposit liabilities | 248 | — | 63,793 | — | 64,041 | |||||||||||||||
Short-term borrowings | 3,458 | — | 1,920 | — | 5,378 | |||||||||||||||
Long-term debt | 19,820 | — | 47,641 | — | 67,461 | |||||||||||||||
Intercompany debt to | ||||||||||||||||||||
Nonbank subsidiaries | 1,268 | — | 1,781 | (3,049 | ) | — | ||||||||||||||
Intercompany payables to | ||||||||||||||||||||
Bank subsidiary | 24 | — | — | (24 | ) | — | ||||||||||||||
Nonbank subsidiaries | 374 | — | 420 | (794 | ) | — | ||||||||||||||
Interest payable | 223 | — | 214 | — | 437 | |||||||||||||||
Unearned insurance premiums and service revenue | — | — | 2,438 | — | 2,438 | |||||||||||||||
Accrued expenses and other liabilities | 304 | 82 | 4,245 | (2,880 | ) | 1,751 | ||||||||||||||
Total liabilities | 25,719 | 82 | 122,452 | (6,747 | ) | 141,506 | ||||||||||||||
Total equity | 14,599 | 16,226 | 27,310 | (43,536 | ) | 14,599 | ||||||||||||||
Total liabilities and equity | $ | 40,318 | $ | 16,308 | $ | 149,762 | $ | (50,283 | ) | $ | 156,105 |
(a) | Amounts presented are based upon the legal transfer of the underlying assets to VIEs in order to reflect legal ownership. |
December 31, 2014 ($ in millions) | Parent (a) | Guarantors | Nonguarantors (a) | Consolidating adjustments | Ally consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Noninterest-bearing | $ | 986 | $ | — | $ | 362 | $ | — | $ | 1,348 | ||||||||||
Interest-bearing | 1,300 | — | 2,928 | — | 4,228 | |||||||||||||||
Interest-bearing — intercompany | — | — | 615 | (615 | ) | — | ||||||||||||||
Total cash and cash equivalents | 2,286 | — | 3,905 | (615 | ) | 5,576 | ||||||||||||||
Investment securities | — | — | 16,137 | — | 16,137 | |||||||||||||||
Loans held-for-sale, net | 3 | — | 2,000 | — | 2,003 | |||||||||||||||
Finance receivables and loans, net | ||||||||||||||||||||
Finance receivables and loans, net | 4,225 | — | 95,723 | — | 99,948 | |||||||||||||||
Intercompany loans to | ||||||||||||||||||||
Bank subsidiary | 625 | — | — | (625 | ) | — | ||||||||||||||
Nonbank subsidiaries | 3,500 | — | 1,770 | (5,270 | ) | — | ||||||||||||||
Allowance for loan losses | (102 | ) | — | (875 | ) | — | (977 | ) | ||||||||||||
Total finance receivables and loans, net | 8,248 | — | 96,618 | (5,895 | ) | 98,971 | ||||||||||||||
Investment in operating leases, net | — | — | 19,510 | — | 19,510 | |||||||||||||||
Intercompany receivables from | ||||||||||||||||||||
Bank subsidiary | 219 | — | — | (219 | ) | — | ||||||||||||||
Nonbank subsidiaries | 267 | — | 393 | (660 | ) | — | ||||||||||||||
Investment in subsidiaries | ||||||||||||||||||||
Bank subsidiary | 15,967 | 15,967 | — | (31,934 | ) | — | ||||||||||||||
Nonbank subsidiaries | 11,559 | 12 | — | (11,571 | ) | — | ||||||||||||||
Premiums receivable and other insurance assets | — | — | 1,717 | (22 | ) | 1,695 | ||||||||||||||
Other assets | 4,889 | — | 4,879 | (2,466 | ) | 7,302 | ||||||||||||||
Assets of operations held-for-sale | 634 | — | — | — | 634 | |||||||||||||||
Total assets | $ | 44,072 | $ | 15,979 | $ | 145,159 | $ | (53,382 | ) | $ | 151,828 | |||||||||
Liabilities | ||||||||||||||||||||
Deposit liabilities | ||||||||||||||||||||
Noninterest-bearing | $ | — | $ | — | $ | 64 | $ | — | $ | 64 | ||||||||||
Interest-bearing | 319 | — | 57,839 | — | 58,158 | |||||||||||||||
Total deposit liabilities | 319 | — | 57,903 | — | 58,222 | |||||||||||||||
Short-term borrowings | 3,338 | — | 3,724 | — | 7,062 | |||||||||||||||
Long-term debt | 21,199 | — | 45,359 | — | 66,558 | |||||||||||||||
Intercompany debt to | ||||||||||||||||||||
Nonbank subsidiaries | 2,385 | — | 4,125 | (6,510 | ) | — | ||||||||||||||
Intercompany payables to | ||||||||||||||||||||
Bank subsidiary | 94 | — | — | (94 | ) | — | ||||||||||||||
Nonbank subsidiaries | 454 | — | 354 | (808 | ) | — | ||||||||||||||
Interest payable | 316 | — | 161 | — | 477 | |||||||||||||||
Unearned insurance premiums and service revenue | — | — | 2,375 | — | 2,375 | |||||||||||||||
Accrued expenses and other liabilities | 568 | 82 | 3,551 | (2,466 | ) | 1,735 | ||||||||||||||
Total liabilities | 28,673 | 82 | 117,552 | (9,878 | ) | 136,429 | ||||||||||||||
Total equity | 15,399 | 15,897 | 27,607 | (43,504 | ) | 15,399 | ||||||||||||||
Total liabilities and equity | $ | 44,072 | $ | 15,979 | $ | 145,159 | $ | (53,382 | ) | $ | 151,828 |
(a) | Amounts presented are based upon the legal transfer of the underlying assets to VIEs in order to reflect legal ownership. |
Nine months ended September 30, 2015 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Operating activities | ||||||||||||||||||||
Net cash provided by operating activities | $ | 51 | $ | 525 | $ | 5,408 | $ | (2,030 | ) | $ | 3,954 | |||||||||
Investing activities | ||||||||||||||||||||
Purchases of available-for-sale securities | — | — | (10,011 | ) | — | (10,011 | ) | |||||||||||||
Proceeds from sales of available-for-sale securities | — | — | 4,408 | — | 4,408 | |||||||||||||||
Proceeds from maturities and repayments of available-for-sale securities | — | — | 3,141 | — | 3,141 | |||||||||||||||
Net decrease (increase) in finance receivables and loans | 398 | — | (9,573 | ) | — | (9,175 | ) | |||||||||||||
Proceeds from sales of finance receivables and loans | — | — | 2,665 | — | 2,665 | |||||||||||||||
Net decrease in loans — intercompany | 2,392 | — | 1,225 | (3,617 | ) | — | ||||||||||||||
Net (increase) decrease in operating lease assets | (94 | ) | — | 526 | — | 432 | ||||||||||||||
Capital contributions to subsidiaries | (228 | ) | (1 | ) | 1 | 228 | — | |||||||||||||
Returns of contributed capital | 881 | — | — | (881 | ) | — | ||||||||||||||
Proceeds from sale of business units, net | 1,049 | — | — | — | 1,049 | |||||||||||||||
Net change in restricted cash | (12 | ) | — | 501 | — | 489 | ||||||||||||||
Other, net | (29 | ) | — | 12 | — | (17 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 4,357 | (1 | ) | (7,105 | ) | (4,270 | ) | (7,019 | ) | |||||||||||
Financing activities | ||||||||||||||||||||
Net change in short-term borrowings — third party | 120 | — | (1,812 | ) | — | (1,692 | ) | |||||||||||||
Net (decrease) increase in deposits | (72 | ) | — | 5,891 | — | 5,819 | ||||||||||||||
Proceeds from issuance of long-term debt — third party | 4,037 | — | 19,807 | — | 23,844 | |||||||||||||||
Repayments of long-term debt — third party | (5,866 | ) | — | (17,588 | ) | — | (23,454 | ) | ||||||||||||
Net change in debt — intercompany | (1,117 | ) | — | (2,393 | ) | 3,510 | — | |||||||||||||
Repurchase and redemption of preferred stock | (442 | ) | — | — | — | (442 | ) | |||||||||||||
Dividends paid — third party | (1,356 | ) | — | — | — | (1,356 | ) | |||||||||||||
Dividends paid and returns of contributed capital — intercompany | — | (525 | ) | (2,386 | ) | 2,911 | — | |||||||||||||
Capital contributions from parent | — | 1 | 227 | (228 | ) | — | ||||||||||||||
Net cash (used in) provided by financing activities | (4,696 | ) | (524 | ) | 1,746 | 6,193 | 2,719 | |||||||||||||
Effect of exchange-rate changes on cash and cash equivalents | — | — | (3 | ) | — | (3 | ) | |||||||||||||
Net (decrease) increase in cash and cash equivalents | (288 | ) | — | 46 | (107 | ) | (349 | ) | ||||||||||||
Cash and cash equivalents at beginning of year | 2,286 | — | 3,905 | (615 | ) | 5,576 | ||||||||||||||
Cash and cash equivalents at September 30 | $ | 1,998 | $ | — | $ | 3,951 | $ | (722 | ) | $ | 5,227 |
Nine months ended September 30, 2014 ($ in millions) | Parent | Guarantors | Nonguarantors | Consolidating adjustments | Ally consolidated | |||||||||||||||
Operating activities | ||||||||||||||||||||
Net cash provided by operating activities | $ | 544 | $ | 1,639 | $ | 4,036 | $ | (3,761 | ) | $ | 2,458 | |||||||||
Investing activities | ||||||||||||||||||||
Purchases of available-for-sale securities | — | — | (4,117 | ) | — | (4,117 | ) | |||||||||||||
Proceeds from sales of available-for-sale securities | — | — | 2,974 | — | 2,974 | |||||||||||||||
Proceeds from maturities and repayments of available-for-sale securities | — | — | 1,877 | — | 1,877 | |||||||||||||||
Net decrease (increase) in finance receivables and loans | 1,669 | — | (2,936 | ) | — | (1,267 | ) | |||||||||||||
Proceeds from sales of finance receivables and loans | — | — | 1,557 | — | 1,557 | |||||||||||||||
Net (increase) decrease in loans — intercompany | (104 | ) | — | 147 | (43 | ) | — | |||||||||||||
Net decrease (increase) in operating lease assets | 146 | — | (3,411 | ) | — | (3,265 | ) | |||||||||||||
Capital contributions to subsidiaries | (744 | ) | — | — | 744 | — | ||||||||||||||
Returns of contributed capital | 1,251 | — | — | (1,251 | ) | — | ||||||||||||||
Proceeds from sale of business unit, net | 46 | — | 1 | — | 47 | |||||||||||||||
Net change in restricted cash | — | — | 2,128 | — | 2,128 | |||||||||||||||
Other, net | (17 | ) | — | 88 | — | 71 | ||||||||||||||
Net cash provided by (used in) investing activities | 2,247 | — | (1,692 | ) | (550 | ) | 5 | |||||||||||||
Financing activities | ||||||||||||||||||||
Net change in short-term borrowings — third party | 151 | — | (3,449 | ) | — | (3,298 | ) | |||||||||||||
Net (decrease) increase in deposits | (72 | ) | — | 3,573 | — | 3,501 | ||||||||||||||
Proceeds from issuance of long-term debt — third party | 2,310 | — | 16,632 | — | 18,942 | |||||||||||||||
Repayments of long-term debt — third party | (5,535 | ) | — | (15,704 | ) | — | (21,239 | ) | ||||||||||||
Net change in debt — intercompany | (143 | ) | — | 104 | 39 | — | ||||||||||||||
Dividends paid — third party | (200 | ) | — | — | — | (200 | ) | |||||||||||||
Dividends paid and returns of contributed capital — intercompany | — | (1,676 | ) | (3,337 | ) | 5,013 | — | |||||||||||||
Capital contributions from parent | — | — | 744 | (744 | ) | — | ||||||||||||||
Net cash used in financing activities | (3,489 | ) | (1,676 | ) | (1,437 | ) | 4,308 | (2,294 | ) | |||||||||||
Effect of exchange-rate changes on cash and cash equivalents | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Net (decrease) increase in cash and cash equivalents | (698 | ) | (37 | ) | 906 | (3 | ) | 168 | ||||||||||||
Cash and cash equivalents at beginning of year | 2,930 | 37 | 2,974 | (410 | ) | 5,531 | ||||||||||||||
Cash and cash equivalents at September 30 | $ | 2,232 | $ | — | $ | 3,880 | $ | (413 | ) | $ | 5,699 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions, except per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Total financing revenue and other interest income | $ | 2,102 | $ | 2,109 | $ | 6,273 | $ | 6,287 | ||||||||
Total interest expense | 604 | 671 | 1,824 | 2,111 | ||||||||||||
Depreciation expense on operating lease assets | 528 | 549 | 1,713 | 1,600 | ||||||||||||
Net financing revenue | 970 | 889 | 2,736 | 2,576 | ||||||||||||
Total other revenue | 332 | 375 | 786 | 1,061 | ||||||||||||
Total net revenue | 1,302 | 1,264 | 3,522 | 3,637 | ||||||||||||
Provision for loan losses | 211 | 102 | 467 | 302 | ||||||||||||
Total noninterest expense | 674 | 742 | 2,093 | 2,276 | ||||||||||||
Income from continuing operations before income tax expense | 417 | 420 | 962 | 1,059 | ||||||||||||
Income tax expense from continuing operations | 144 | 127 | 341 | 285 | ||||||||||||
Net income from continuing operations | 273 | 293 | 621 | 774 | ||||||||||||
(Loss) income from discontinued operations, net of tax | (5 | ) | 130 | 405 | 199 | |||||||||||
Net income | $ | 268 | $ | 423 | $ | 1,026 | $ | 973 | ||||||||
Basic earnings per common share: | ||||||||||||||||
Net income (loss) from continuing operations | $ | 0.49 | $ | 0.47 | $ | (1.52 | ) | $ | 1.19 | |||||||
Net income (loss) | 0.48 | 0.74 | (0.68 | ) | 1.60 | |||||||||||
Diluted earnings per common share: | ||||||||||||||||
Net income (loss) from continuing operations | $ | 0.49 | $ | 0.47 | $ | (1.52 | ) | $ | 1.19 | |||||||
Net income (loss) | 0.47 | 0.74 | (0.68 | ) | 1.60 | |||||||||||
Market price per common share: | ||||||||||||||||
High closing | $ | 22.99 | $ | 24.95 | $ | 23.88 | $ | 25.21 | ||||||||
Low closing | 19.93 | 22.60 | 18.71 | 22.60 | ||||||||||||
Period end closing | 20.38 | 23.14 | 20.38 | 23.14 |
At and for the three months ended September 30, | At and for the nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Selected period-end balance sheet data: | ||||||||||||||||
Total assets | $ | 156,105 | $ | 149,195 | $ | 156,105 | $ | 149,195 | ||||||||
Long-term debt | $ | 67,461 | $ | 67,299 | $ | 67,461 | $ | 67,299 | ||||||||
Preferred stock | $ | 813 | $ | 1,255 | $ | 813 | $ | 1,255 | ||||||||
Total equity | $ | 14,599 | $ | 15,190 | $ | 14,599 | $ | 15,190 | ||||||||
Financial ratios: | ||||||||||||||||
Return on average assets (a) | 0.69 | % | 1.12 | % | 0.90 | % | 0.87 | % | ||||||||
Return on average equity (a) | 7.37 | % | 11.20 | % | 9.20 | % | 8.88 | % | ||||||||
Return on average tangible common equity (non-GAAP) (b) | 6.77 | % | 10.34 | % | (3.16 | )% | 7.68 | % | ||||||||
Equity to assets (a) | 9.31 | % | 9.98 | % | 9.74 | % | 9.77 | % | ||||||||
Net interest spread (a)(c) | 2.55 | % | 2.38 | % | 2.43 | % | 2.34 | % | ||||||||
Net interest spread excluding original issue discount (a)(c) | 2.59 | % | 2.55 | % | 2.48 | % | 2.50 | % | ||||||||
Net yield on interest-earning assets (a)(d) | 2.64 | % | 2.52 | % | 2.54 | % | 2.47 | % | ||||||||
Net yield on interest-earning assets excluding original issue discount (a)(d) | 2.67 | % | 2.65 | % | 2.58 | % | 2.60 | % |
(a) | The ratios were based on average assets and average equity using a combination of monthly and daily average methodologies. |
(b) | Return on average tangible common equity represents net income available to common shareholders under accounting principles generally accepted in the United States of America (GAAP) divided by a two-period average of tangible common equity, which is total shareholder's equity less preferred stock and goodwill. |
(c) | Net interest spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities, excluding discontinued operations for the periods shown. |
(d) | Net yield on interest-earning assets represents net financing revenue as a percentage of total interest-earning assets. |
Under Basel III | Under Basel I | |||||||||||
Transitional | Fully Phased-in | |||||||||||
($ in millions) | September 30, 2015 | September 30, 2014 | ||||||||||
Common Equity Tier 1 capital ratio (a) | 10.05 | % | 9.57 | % | 9.69 | % | ||||||
Tier 1 capital ratio (b) | 12.02 | % | 11.94 | % | 12.65 | % | ||||||
Total capital ratio (c) | 12.95 | % | 12.88 | % | 13.47 | % | ||||||
Tier 1 leverage (to adjusted quarterly average assets) (d) | 10.43 | % | 10.41 | % | 10.91 | % | ||||||
Total equity | $ | 14,599 | $ | 14,599 | $ | 15,190 | ||||||
Preferred stock | (813 | ) | (813 | ) | (1,255 | ) | ||||||
Goodwill and certain other intangibles | (27 | ) | (27 | ) | (27 | ) | ||||||
Unrealized gains and other adjustments | (315 | ) | (886 | ) | (1,481 | ) | ||||||
Common Equity Tier 1 capital (non-GAAP) (a) | 13,444 | 12,873 | 12,427 | |||||||||
Preferred stock | 725 | 696 | 1,255 | |||||||||
Trust preferred securities | 2,547 | 2,547 | 2,545 | |||||||||
Other adjustments | (629 | ) | (58 | ) | — | |||||||
Tier 1 capital (b) | $ | 16,087 | $ | 16,058 | $ | 16,227 | ||||||
Risk-weighted assets (e) | $ | 133,821 | $ | 134,508 | $ | 128,248 |
(a) | Common Equity Tier 1 Capital generally consists of common stock (plus any related surplus and net of any treasury stock), retained earnings, accumulated other comprehensive income, and minority interests in the common equity of consolidated subsidiaries, together subject to certain adjustments and deductions. At September 30, 2014, the capital ratio presented reflects the Tier 1 common ratio, the closest analogue under U.S. Basel I to the Common Equity Tier 1 capital ratio introduced by U.S. Basel III. We consider various measures when evaluating capital utilization and adequacy, including the Common Equity Tier 1 Capital ratio. Because GAAP does not include capital ratio measures, we believe there are no comparable GAAP financial measures to these ratios. Common Equity Tier 1 Capital is not formally defined by GAAP and, therefore, is considered to be a non-GAAP financial measure. We believe the Common Equity Tier 1 Capital measure is important because we believe analysts and banking regulators may assess our capital adequacy using this ratio. Additionally, presentation of this measure allows readers to compare certain aspects of our capital adequacy on the same basis to other companies in the industry. |
(b) | Tier 1 capital generally consists of common equity, minority interests, qualifying noncumulative preferred stock, and the fixed rate cumulative preferred stock sold to the U.S. Department of the Treasury (Treasury) under the Troubled Asset Relief Program, less goodwill and other adjustments. |
(c) | Total capital is the sum of Tier 1 and Tier 2 capital. Tier 2 capital generally consists of preferred stock not qualifying as Tier 1 capital, limited amounts of subordinated debt and the allowance for loan losses, and other adjustments. |
(d) | Tier 1 leverage equals Tier 1 capital divided by adjusted quarterly average total assets (which reflects adjustments for disallowed goodwill and certain intangible assets). |
(e) | Risk-weighted assets are defined by regulation and are determined by allocating assets and specified off-balance sheet financial instruments into several broad risk categories. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | 2015 | 2014 | Favorable/ (unfavorable) % change | ||||||||||||||
Total net revenue (loss) | ||||||||||||||||||||
Dealer Financial Services | ||||||||||||||||||||
Automotive Finance operations | $ | 933 | $ | 919 | 2 | $ | 2,699 | $ | 2,749 | (2) | ||||||||||
Insurance operations | 249 | 303 | (18) | 811 | 896 | (9) | ||||||||||||||
Mortgage operations | 30 | 9 | n/m | 134 | 48 | 179 | ||||||||||||||
Corporate and Other | 90 | 33 | 173 | (122 | ) | (56 | ) | (118) | ||||||||||||
Total | $ | 1,302 | $ | 1,264 | 3 | $ | 3,522 | $ | 3,637 | (3) | ||||||||||
Income (loss) from continuing operations before income tax expense | ||||||||||||||||||||
Dealer Financial Services | ||||||||||||||||||||
Automotive Finance operations | $ | 347 | $ | 415 | (16) | $ | 1,079 | $ | 1,215 | (11) | ||||||||||
Insurance operations | 40 | 60 | (33) | 133 | 111 | 20 | ||||||||||||||
Mortgage operations | 7 | (3 | ) | n/m | 84 | 41 | 105 | |||||||||||||
Corporate and Other | 23 | (52 | ) | 144 | (334 | ) | (308 | ) | (8) | |||||||||||
Total | $ | 417 | $ | 420 | (1) | $ | 962 | $ | 1,059 | (9) |
• | Our Dealer Financial Services operations offer a wide range of financial services and products to retail automotive consumers and automotive dealerships. Our Dealer Financial Services consist of two separate reportable segments — Automotive Finance and Insurance operations. Our automotive finance services include providing retail installment sales financing, loans, and leases; offering term loans to dealers, financing dealer floorplans and other lines of credit to dealers; fleet financing, and vehicle remarketing services. |
• | Our ongoing Mortgage operations are limited to the management of our held-for-investment loan portfolio and include the execution of bulk purchases of high-quality jumbo mortgage loans originated by third parties. During the nine months ended September 30, 2015, we continued to execute bulk purchases of mortgage loans that were originated by third parties. Year-to-date purchases have totaled $3.6 billion. We expect this activity to continue in support of our treasury asset liability management (ALM) activities and diversification. Further, we executed the sale of troubled debt restructured (TDR) loans totaling $677 million of unpaid principal balance during the nine months ended September 30, 2015. |
• | Corporate and Other primarily consists of Corporate Finance, centralized corporate treasury activities, such as management of the cash and corporate investment securities and loan portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, the amortization of the discount associated with debt issuances and bond exchanges, and the residual impacts of our corporate funds-transfer pricing (FTP) and treasury ALM activities. Corporate and Other also includes certain equity investments, reclassifications and eliminations between the reportable operating segments, and overhead that was previously allocated to operations that have since been sold or classified as discontinued operations. Corporate Finance provides senior secured commercial-lending products to primarily U.S.-based middle market companies. Effective May 1, 2014, Corporate Finance was aligned under Ally Bank, allowing this business to have a more competitive source of funding. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | 2015 | 2014 | Favorable/ (unfavorable) % change | ||||||||||||||
Net financing revenue | ||||||||||||||||||||
Total financing revenue and other interest income | $ | 2,102 | $ | 2,109 | — | $ | 6,273 | $ | 6,287 | — | ||||||||||
Total interest expense | 604 | 671 | 10 | 1,824 | 2,111 | 14 | ||||||||||||||
Depreciation expense on operating lease assets | 528 | 549 | 4 | 1,713 | 1,600 | (7) | ||||||||||||||
Net financing revenue | 970 | 889 | 9 | 2,736 | 2,576 | 6 | ||||||||||||||
Other revenue | ||||||||||||||||||||
Servicing fees | 12 | 6 | 100 | 32 | 22 | 45 | ||||||||||||||
Insurance premiums and service revenue earned | 236 | 246 | (4) | 706 | 736 | (4) | ||||||||||||||
(Loss) gain on mortgage and automotive loans, net | (2 | ) | — | n/m | 45 | 6 | n/m | |||||||||||||
Loss on extinguishment of debt | — | — | n/m | (354 | ) | (46 | ) | n/m | ||||||||||||
Other gain on investments, net | 6 | 45 | (87) | 106 | 129 | (18) | ||||||||||||||
Other income, net of losses | 80 | 78 | 3 | 251 | 214 | 17 | ||||||||||||||
Total other revenue | 332 | 375 | (11) | 786 | 1,061 | (26) | ||||||||||||||
Total net revenue | 1,302 | 1,264 | 3 | 3,522 | 3,637 | (3) | ||||||||||||||
Provision for loan losses | 211 | 102 | (107) | 467 | 302 | (55) | ||||||||||||||
Noninterest expense | ||||||||||||||||||||
Compensation and benefits expense | 235 | 241 | 2 | 726 | 710 | (2) | ||||||||||||||
Insurance losses and loss adjustment expenses | 61 | 97 | 37 | 239 | 353 | 32 | ||||||||||||||
Other operating expenses | 378 | 404 | 6 | 1,128 | 1,213 | 7 | ||||||||||||||
Total noninterest expense | 674 | 742 | 9 | 2,093 | 2,276 | 8 | ||||||||||||||
Income from continuing operations before income tax expense | 417 | 420 | (1) | 962 | 1,059 | (9) | ||||||||||||||
Income tax expense from continuing operations | 144 | 127 | (13) | 341 | 285 | (20) | ||||||||||||||
Net income from continuing operations | $ | 273 | $ | 293 | (7) | $ | 621 | $ | 774 | (20) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | 2015 | 2014 | Favorable/ (unfavorable) % change | ||||||||||||||
Net financing revenue | ||||||||||||||||||||
Consumer | $ | 833 | $ | 774 | 8 | $ | 2,363 | $ | 2,276 | 4 | ||||||||||
Commercial | 228 | 246 | (7) | 701 | 772 | (9) | ||||||||||||||
Loans held-for-sale | 2 | — | n/m | 35 | — | n/m | ||||||||||||||
Operating leases | 830 | 899 | (8) | 2,586 | 2,653 | (3) | ||||||||||||||
Other interest income | 2 | 3 | (33) | 6 | 8 | (25) | ||||||||||||||
Total financing revenue and other interest income | 1,895 | 1,922 | (1) | 5,691 | 5,709 | — | ||||||||||||||
Interest expense | 497 | 523 | 5 | 1,449 | 1,555 | 7 | ||||||||||||||
Depreciation expense on operating lease assets | 528 | 549 | 4 | 1,713 | 1,600 | (7) | ||||||||||||||
Net financing revenue | 870 | 850 | 2 | 2,529 | 2,554 | (1) | ||||||||||||||
Other revenue | ||||||||||||||||||||
Servicing fees | 12 | 6 | 100 | 32 | 22 | 45 | ||||||||||||||
(Loss) gain on automotive loans, net | (2 | ) | 6 | n/m | (23 | ) | 6 | n/m | ||||||||||||
Other income | 53 | 57 | (7) | 161 | 167 | (4) | ||||||||||||||
Total other revenue | 63 | 69 | (9) | 170 | 195 | (13) | ||||||||||||||
Total net revenue | 933 | 919 | 2 | 2,699 | 2,749 | (2) | ||||||||||||||
Provision for loan losses | 201 | 109 | (84) | 460 | 367 | (25) | ||||||||||||||
Noninterest expense | ||||||||||||||||||||
Compensation and benefits expense | 121 | 112 | (8) | 370 | 341 | (9) | ||||||||||||||
Other operating expenses | 264 | 283 | 7 | 790 | 826 | 4 | ||||||||||||||
Total noninterest expense | 385 | 395 | 3 | 1,160 | 1,167 | 1 | ||||||||||||||
Income from continuing operations before income tax expense | $ | 347 | $ | 415 | (16) | $ | 1,079 | $ | 1,215 | (11) | ||||||||||
Total assets | $ | 113,843 | $ | 110,937 | 3 | $ | 113,843 | $ | 110,937 | 3 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | 2015 | 2014 | Favorable/ (unfavorable) % change | ||||||||||||||
Net operating lease revenue | ||||||||||||||||||||
Operating lease revenue | $ | 830 | $ | 899 | (8) | $ | 2,586 | $ | 2,653 | (3) | ||||||||||
Depreciation expense | ||||||||||||||||||||
Depreciation expense on operating lease assets (excluding remarketing gains) | 633 | 654 | 3 | 1,995 | 1,982 | (1) | ||||||||||||||
Remarketing gains | (105 | ) | (105 | ) | — | (282 | ) | (382 | ) | (26) | ||||||||||
Total depreciation expense on operating lease assets | 528 | 549 | 4 | 1,713 | 1,600 | (7) | ||||||||||||||
Total net operating lease revenue | $ | 302 | $ | 350 | (14) | $ | 873 | $ | 1,053 | (17) |
Consumer automotive financing originations | % Share of Ally originations | |||||||||||
Three months ended September 30, ($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
GM | ||||||||||||
New retail standard | $ | 2,809 | $ | 1,910 | 25 | 16 | ||||||
New retail subvented | 712 | 1,805 | 6 | 15 | ||||||||
Lease | 20 | 2,391 | — | 20 | ||||||||
Used | 1,400 | 1,389 | 13 | 12 | ||||||||
Total GM vehicle originations | 4,941 | 7,495 | ||||||||||
Chrysler | ||||||||||||
New retail standard | 1,295 | 989 | 12 | 9 | ||||||||
Lease | 755 | 477 | 7 | 4 | ||||||||
Used | 608 | 458 | 6 | 4 | ||||||||
Total Chrysler vehicle originations | 2,658 | 1,924 | ||||||||||
Non-GM/Chrysler | ||||||||||||
New retail vehicles | 1,342 | 917 | 12 | 8 | ||||||||
Lease | 260 | 161 | 2 | 1 | ||||||||
Used | 1,893 | 1,321 | 17 | 11 | ||||||||
Total Non-GM/Chrysler vehicle originations | 3,495 | 2,399 | ||||||||||
Total consumer automotive financing originations (a) | $ | 11,094 | $ | 11,818 |
(a) | Nonprime originations represented 13.5% of total consumer automotive financing originations during the three months ended September 30, 2015, compared to 8.6% during the three months ended September 30, 2014. We define nonprime consumer automotive loans primarily as those loans with a FICO score (or an equivalent score) at origination of less than 620. |
Consumer automotive financing originations | % Share of Ally originations | |||||||||||
Nine months ended September 30, ($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
GM | ||||||||||||
New retail standard | $ | 7,440 | $ | 5,385 | 23 | 17 | ||||||
New retail subvented | 1,912 | 3,526 | 6 | 11 | ||||||||
Lease | 1,270 | 7,431 | 4 | 23 | ||||||||
Used | 4,303 | 4,112 | 14 | 13 | ||||||||
Total GM vehicle originations | 14,925 | 20,454 | ||||||||||
Chrysler | ||||||||||||
New retail standard | 3,646 | 2,718 | 11 | 9 | ||||||||
Lease | 1,761 | 1,099 | 6 | 4 | ||||||||
Used | 1,766 | 1,336 | 6 | 4 | ||||||||
Total Chrysler vehicle originations | 7,173 | 5,153 | ||||||||||
Non-GM/Chrysler | ||||||||||||
New retail vehicles | 3,657 | 2,375 | 11 | 7 | ||||||||
Lease | 608 | 375 | 2 | 1 | ||||||||
Used | 5,379 | 3,593 | 17 | 11 | ||||||||
Total Non-GM/Chrysler vehicle originations | 9,644 | 6,343 | ||||||||||
Total consumer automotive financing originations (a) | $ | 31,742 | $ | 31,950 |
(a) | Nonprime originations represented 13.1% of total consumer automotive financing originations during the nine months ended September 30, 2015, compared to 9.0% during the nine months ended September 30, 2014. |
Average balance | % Share of manufacturer franchise dealer inventory | |||||||||||
Three months ended September 30, ($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
GM new vehicles (a) | $ | 14,410 | $ | 16,214 | 62 | 63 | ||||||
Chrysler new vehicles (a) | 8,061 | 7,209 | 43 | 44 | ||||||||
Non-GM/Chrysler new vehicles | 3,572 | 2,851 | ||||||||||
Used vehicles | 3,483 | 3,165 | ||||||||||
Total commercial wholesale finance receivables | $ | 29,526 | $ | 29,439 |
(a) | Share of dealer inventory based on a 4-point average of dealer inventory. |
Average balance | % Share of manufacturer franchise dealer inventory | |||||||||||
Nine months ended September 30, ($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
GM new vehicles (a) | $ | 15,026 | $ | 16,646 | 63 | 64 | ||||||
Chrysler new vehicles (a) | 8,103 | 7,607 | 44 | 45 | ||||||||
Non-GM/Chrysler new vehicles | 3,487 | 2,972 | ||||||||||
Used vehicles | 3,406 | 3,050 | ||||||||||
Total commercial wholesale finance receivables | $ | 30,022 | $ | 30,275 |
(a) | Share of dealer inventory based on a 10-point average of dealer inventory. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | 2015 | 2014 | Favorable/ (unfavorable) % change | ||||||||||||||
Insurance premiums and other income | ||||||||||||||||||||
Insurance premiums and service revenue earned | $ | 236 | $ | 246 | (4) | $ | 706 | $ | 736 | (4) | ||||||||||
Investment income, net (a) | 9 | 53 | (83) | 93 | 150 | (38) | ||||||||||||||
Other income | 4 | 4 | — | 12 | 10 | 20 | ||||||||||||||
Total insurance premiums and other income | 249 | 303 | (18) | 811 | 896 | (9) | ||||||||||||||
Expense | ||||||||||||||||||||
Insurance losses and loss adjustment expenses | 61 | 97 | 37 | 239 | 353 | 32 | ||||||||||||||
Acquisition and underwriting expense | ||||||||||||||||||||
Compensation and benefits expense | 18 | 15 | (20) | 53 | 46 | (15) | ||||||||||||||
Insurance commissions expense | 95 | 95 | — | 283 | 279 | (1) | ||||||||||||||
Other expenses | 35 | 36 | 3 | 103 | 107 | 4 | ||||||||||||||
Total acquisition and underwriting expense | 148 | 146 | (1) | 439 | 432 | (2) | ||||||||||||||
Total expense | 209 | 243 | 14 | 678 | 785 | 14 | ||||||||||||||
Income from continuing operations before income tax expense | $ | 40 | $ | 60 | (33) | $ | 133 | $ | 111 | 20 | ||||||||||
Total assets | $ | 6,997 | $ | 7,178 | (3) | $ | 6,997 | $ | 7,178 | (3) | ||||||||||
Insurance premiums and service revenue written | $ | 254 | $ | 265 | (4) | $ | 755 | $ | 775 | (3) | ||||||||||
Combined ratio (b) | 87.7 | % | 98.4 | % | 95.3 | % | 106.0 | % |
(a) | Includes loss on investments of $5 million and gains on investments of $57 million for the three months and nine months ended September 30, 2015, respectively, and gains on investments of $39 million and $107 million for the three months and nine months ended September 30, 2014, respectively; and interest expense of $12 million and $38 million for the three months and nine months ended September 30, 2015, respectively, and $14 million and $41 million for the three months and nine months ended September 30, 2014, respectively. |
(b) | Management uses a combined ratio as a primary measure of underwriting profitability. Underwriting profitability is indicated by a combined ratio under 100% and is calculated as the sum of all incurred losses and expenses (excluding interest and income tax expense) divided by the total of premiums and service revenues earned and other fee income. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Vehicle service contracts | ||||||||||||||||
New retail | $ | 120 | $ | 114 | $ | 331 | $ | 320 | ||||||||
Used retail | 120 | 129 | 385 | 386 | ||||||||||||
Reinsurance | (47 | ) | (41 | ) | (131 | ) | (115 | ) | ||||||||
Total vehicle service contracts | 193 | 202 | 585 | 591 | ||||||||||||
Wholesale | 44 | 47 | 122 | 139 | ||||||||||||
Other finance and insurance (a) | 17 | 16 | 48 | 45 | ||||||||||||
Total | $ | 254 | $ | 265 | $ | 755 | $ | 775 |
(a) | Other finance and insurance includes GAP coverage, excess wear and tear, and other ancillary products. |
($ in millions) | September 30, 2015 | December 31, 2014 | ||||||
Cash | ||||||||
Noninterest-bearing cash | $ | 233 | $ | 239 | ||||
Interest-bearing cash | 847 | 1,289 | ||||||
Total cash | 1,080 | 1,528 | ||||||
Available-for-sale securities | ||||||||
Debt securities | ||||||||
U.S. Treasury and federal agencies | 94 | 392 | ||||||
U.S. States and political subdivisions | 632 | 406 | ||||||
Foreign government | 184 | 232 | ||||||
Mortgage-backed | 964 | 1,097 | ||||||
Asset-backed | 5 | 6 | ||||||
Corporate debt | 1,047 | 746 | ||||||
Total debt securities | 2,926 | 2,879 | ||||||
Equity securities | 985 | 906 | ||||||
Total available-for-sale securities | 3,911 | 3,785 | ||||||
Total cash and securities | $ | 4,991 | $ | 5,313 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | 2015 | 2014 | Favorable/ (unfavorable) % change | ||||||||||||||
Net financing revenue | ||||||||||||||||||||
Total financing revenue and other interest income | $ | 81 | $ | 68 | 19 | $ | 221 | $ | 217 | 2 | ||||||||||
Total interest expense | 61 | 59 | (3) | 171 | 182 | 6 | ||||||||||||||
Net financing revenue | 20 | 9 | 122 | 50 | 35 | 43 | ||||||||||||||
Gain on mortgage loans, net | 9 | — | n/m | 79 | 6 | n/m | ||||||||||||||
Other income, net of losses | 1 | — | n/m | 5 | 7 | (29) | ||||||||||||||
Total other revenue | 10 | — | n/m | 84 | 13 | n/m | ||||||||||||||
Total net revenue | 30 | 9 | n/m | 134 | 48 | 179 | ||||||||||||||
Provision for loan losses | 6 | (7 | ) | (186) | 4 | (55 | ) | (107) | ||||||||||||
Total noninterest expense | 17 | 19 | 11 | 46 | 62 | 26 | ||||||||||||||
Income (loss) from continuing operations before income tax expense | $ | 7 | $ | (3 | ) | n/m | $ | 84 | $ | 41 | 105 | |||||||||
Total assets | $ | 9,772 | $ | 7,402 | 32 | $ | 9,772 | $ | 7,402 | 32 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
($ in millions) | 2015 | 2014 | Favorable/ (unfavorable) % change | 2015 | 2014 | Favorable/ (unfavorable) % change | ||||||||||||||
Net financing revenue (loss) | ||||||||||||||||||||
Total financing revenue and other interest income | $ | 98 | $ | 89 | 10 | $ | 281 | $ | 273 | 3 | ||||||||||
Interest expense | ||||||||||||||||||||
Original issue discount amortization | 16 | 51 | 69 | 45 | 149 | 70 | ||||||||||||||
Other interest expense | 18 | 24 | 25 | 121 | 184 | 34 | ||||||||||||||
Total interest expense | 34 | 75 | 55 | 166 | 333 | 50 | ||||||||||||||
Net financing revenue (loss) (a) | 64 | 14 | n/m | 115 | (60 | ) | n/m | |||||||||||||
Other revenue (expense) | ||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | (354 | ) | (46 | ) | n/m | ||||||||||||
Other gain on investments, net | 11 | 6 | 83 | 49 | 22 | 123 | ||||||||||||||
Other income, net of losses | 15 | 13 | 15 | 68 | 28 | 143 | ||||||||||||||
Total other revenue (expense) | 26 | 19 | 37 | (237 | ) | 4 | n/m | |||||||||||||
Total net revenue (loss) | 90 | 33 | 173 | (122 | ) | (56 | ) | (118) | ||||||||||||
Provision for loan losses | 4 | — | n/m | 3 | (10 | ) | (130) | |||||||||||||
Total noninterest expense (b) | 63 | 85 | 26 | 209 | 262 | 20 | ||||||||||||||
Income (loss) from continuing operations before income tax expense | $ | 23 | $ | (52 | ) | 144 | $ | (334 | ) | $ | (308 | ) | (8) | |||||||
Total assets | $ | 25,493 | $ | 23,678 | 8 | $ | 25,493 | $ | 23,678 | 8 |
(a) | Refer to the table that follows for further details on the components of net financing revenue (loss). |
(b) | Includes a reduction of $168 million and $510 million for the three months and nine months ended September 30, 2015, respectively, and $172 million and $518 million for the three months and nine months ended September 30, 2014, respectively, related to the allocation of corporate overhead expenses to other segments. The receiving segments record their allocation of corporate overhead expense within other operating expense. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Original issue discount amortization (a) | $ | (16 | ) | $ | (51 | ) | $ | (45 | ) | $ | (149 | ) | ||||
Net impact of the funds-transfer pricing methodology | 53 | 47 | 83 | 33 | ||||||||||||
Other (including Corporate Finance net financing revenue) | 27 | 18 | 77 | 56 | ||||||||||||
Total net financing revenue (loss) for Corporate and Other | $ | 64 | $ | 14 | $ | 115 | $ | (60 | ) | |||||||
Outstanding original issue discount balance | $ | 1,400 | $ | 1,455 | $ | 1,400 | $ | 1,455 |
(a) | Amortization is included as interest on long-term debt in the Condensed Consolidated Statement of Comprehensive Income. |
Year ended December 31, ($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 and thereafter (a) | Total | |||||||||||||||||||||
Original issue discount | ||||||||||||||||||||||||||||
Outstanding balance | $ | 1,383 | $ | 1,309 | $ | 1,223 | $ | 1,126 | $ | 1,092 | $ | 1,057 | ||||||||||||||||
Total amortization (b) | 17 | 74 | 86 | 97 | 34 | 1,092 | $ | 1,400 |
(a) | The maximum annual scheduled amortization for any individual year is $158 million in 2030. |
(b) | The amortization is included as interest on long-term debt on the Condensed Consolidated Statement of Comprehensive Income. |
($ in millions) | September 30, 2015 | December 31, 2014 | ||||||
Cash | ||||||||
Noninterest-bearing cash | $ | 1,407 | $ | 1,083 | ||||
Interest-bearing cash | 2,708 | 2,933 | ||||||
Total cash | 4,115 | 4,016 | ||||||
Available-for-sale securities | ||||||||
Debt securities | ||||||||
U.S. Treasury and federal agencies | 1,715 | 786 | ||||||
U.S. States and political subdivisions | 19 | — | ||||||
Mortgage-backed | 11,167 | 9,581 | ||||||
Asset-backed | 1,946 | 1,985 | ||||||
Total debt securities | $ | 14,847 | $ | 12,352 | ||||
Total cash and securities | $ | 18,962 | $ | 16,368 |
($ in millions) | September 30, 2015 | December 31, 2014 | ||||||
Finance receivables and loans | ||||||||
Automotive Finance operations | $ | 95,932 | $ | 90,592 | ||||
Mortgage operations | 9,770 | 7,474 | ||||||
Corporate and Other | 2,289 | 1,882 | ||||||
Total finance receivables and loans | 107,991 | 99,948 | ||||||
Loans held-for-sale | ||||||||
Automotive Finance operations | — | 1,515 | ||||||
Mortgage operations | — | 452 | ||||||
Corporate and Other | 37 | 36 | ||||||
Total loans held-for-sale | 37 | 2,003 | ||||||
Total on-balance sheet loans | $ | 108,028 | $ | 101,951 | ||||
Off-balance sheet securitized loans | ||||||||
Automotive Finance operations (a) | $ | 2,870 | $ | 2,801 | ||||
Total off-balance sheet securitized loans | $ | 2,870 | $ | 2,801 | ||||
Operating lease assets | ||||||||
Automotive Finance operations | $ | 17,292 | $ | 19,510 | ||||
Total operating lease assets | $ | 17,292 | $ | 19,510 | ||||
Serviced loans and leases | ||||||||
Automotive Finance operations (b) | $ | 117,618 | $ | 115,391 | ||||
Mortgage operations | 9,770 | 7,926 | ||||||
Corporate and Other | 2,217 | 1,347 | ||||||
Total serviced loans and leases | $ | 129,605 | $ | 124,664 |
(a) | Represents the current unpaid principal balance of outstanding loans based on our customary representation and warranty provisions. |
(b) | Includes $2.0 billion and $887 million of off-balance sheet whole-loan transactions at September 30, 2015, and December 31, 2014, respectively. |
Outstanding | Nonperforming (a) | Accruing past due 90 days or more | ||||||||||||||||||||||
($ in millions) | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||||||||
Consumer | ||||||||||||||||||||||||
Finance receivables and loans | ||||||||||||||||||||||||
Loans at historical cost | $ | 73,379 | $ | 64,043 | $ | 562 | $ | 563 | $ | — | $ | — | ||||||||||||
Loans at fair value | 1 | 1 | — | — | — | — | ||||||||||||||||||
Total finance receivables and loans | 73,380 | 64,044 | 562 | 563 | — | — | ||||||||||||||||||
Loans held-for-sale | — | 1,967 | — | 8 | — | — | ||||||||||||||||||
Total consumer loans (b) | 73,380 | 66,011 | 562 | 571 | — | — | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Finance receivables and loans | ||||||||||||||||||||||||
Loans at historical cost | 34,611 | 35,904 | 75 | 82 | — | — | ||||||||||||||||||
Loans held for sale | 37 | 36 | — | — | — | — | ||||||||||||||||||
Total commercial loans | 34,648 | 35,940 | 75 | 82 | — | — | ||||||||||||||||||
Total on-balance sheet loans | $ | 108,028 | $ | 101,951 | $ | 637 | $ | 653 | $ | — | $ | — |
(a) | Includes nonaccrual TDR loans of $274 million and $281 million at September 30, 2015, and December 31, 2014, respectively. |
(b) | Includes outstanding loans from our Commercial Services Group (CSG) of $5.9 billion and $5.2 billion at September 30, 2015, and December 31, 2014, respectively, and recreational vehicle loans of $1.4 billion and $1.2 billion at September 30, 2015, and December 31, 2014, respectively. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
Net charge-offs (recoveries) | Net charge-off ratios (a) | Net charge-offs (recoveries) | Net charge-off ratios (a) | |||||||||||||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
Finance receivables and loans at historical cost | $ | 162 | $ | 149 | 0.9 | % | 0.9 | % | $ | 413 | $ | 373 | 0.8 | % | 0.8 | % | ||||||||||||
Commercial | ||||||||||||||||||||||||||||
Finance receivables and loans at historical cost | (1 | ) | — | — | — | (2 | ) | (6 | ) | — | — | |||||||||||||||||
Total finance receivables and loans at historical cost | $ | 161 | $ | 149 | 0.6 | % | 0.6 | % | $ | 411 | $ | 367 | 0.5 | % | 0.5 | % |
(a) | Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value and loans held-for-sale during the period for each loan category. |
Outstanding | Nonperforming (a) | Accruing past due 90 days or more | ||||||||||||||||||||||
($ in millions) | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||||||||
Consumer automotive (b) (c) | $ | 63,610 | $ | 56,570 | $ | 413 | $ | 386 | $ | — | $ | — | ||||||||||||
Consumer mortgage | 9,769 | 7,473 | 149 | 177 | — | — | ||||||||||||||||||
Total consumer finance receivables and loans | $ | 73,379 | $ | 64,043 | $ | 562 | $ | 563 | $ | — | $ | — |
(a) | Includes nonaccrual TDR loans of $226 million and $216 million at September 30, 2015, and December 31, 2014, respectively. |
(b) | Includes $107 million and $35 million of fair value adjustment for loans in hedge accounting relationships at September 30, 2015, and December 31, 2014, respectively. Refer to Note 20 to the Condensed Consolidated Financial Statements for additional information. |
(c) | Includes outstanding CSG loans of $5.9 billion and $5.0 billion at September 30, 2015, and December 31, 2014, respectively, and RV loans of $1.4 billion and $1.2 billion at September 30, 2015, and December 31, 2014, respectively. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
Net charge-offs | Net charge-off ratios (a) | Net charge-offs | Net charge-off ratios (a) | |||||||||||||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Consumer automotive | $ | 156 | $ | 137 | 1.0 | % | 0.9 | % | $ | 384 | $ | 341 | 0.9 | % | 0.8 | % | ||||||||||||
Consumer mortgage | 6 | 12 | 0.3 | 0.6 | 29 | 32 | 0.5 | 0.5 | ||||||||||||||||||||
Total consumer finance receivables and loans | $ | 162 | $ | 149 | 0.9 | % | 0.9 | % | $ | 413 | $ | 373 | 0.8 | % | 0.8 | % |
(a) | Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value and loans held-for-sale during the period for each loan category. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Consumer automotive (a) | $ | 10,059 | $ | 8,789 | $ | 28,103 | $ | 23,045 |
(a) | Includes $1.2 billion of loans originated as held-for-sale during the first quarter of 2015. We did not originate any consumer mortgage loans during three and nine months ended September 30, 2015, or 2014. |
September 30, 2015 (a) | December 31, 2014 | |||||||||||
Automotive | Mortgage | Automotive | Mortgage | |||||||||
Texas | 13.7 | % | 6.1 | % | 13.6 | % | 6.0 | % | ||||
California | 7.1 | 33.4 | 6.2 | 30.8 | ||||||||
Florida | 7.6 | 4.1 | 7.3 | 3.7 | ||||||||
Pennsylvania | 5.1 | 1.5 | 5.3 | 1.6 | ||||||||
Illinois | 4.4 | 4.2 | 4.4 | 4.2 | ||||||||
Georgia | 4.3 | 2.2 | 4.2 | 2.1 | ||||||||
Ohio | 3.8 | 0.6 | 3.9 | 0.6 | ||||||||
New York | 3.6 | 2.0 | 4.0 | 1.9 | ||||||||
North Carolina | 3.6 | 1.8 | 3.5 | 1.9 | ||||||||
Michigan | 3.2 | 2.4 | 3.8 | 3.1 | ||||||||
Other United States | 43.6 | 41.7 | 43.8 | 44.1 | ||||||||
Total consumer loans | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(a) | Presentation is in descending order as a percentage of total consumer finance receivables and loans at September 30, 2015. |
Outstanding | Nonperforming (a) | Accruing past due 90 days or more | ||||||||||||||||||||||
($ in millions) | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Automotive | $ | 29,020 | $ | 30,871 | $ | 26 | $ | 32 | $ | — | $ | — | ||||||||||||
Other (b) | 2,289 | 1,882 | 45 | 46 | — | — | ||||||||||||||||||
Commercial real estate — Automotive | 3,302 | 3,151 | 4 | 4 | — | — | ||||||||||||||||||
Total commercial finance receivables and loans | $ | 34,611 | $ | 35,904 | $ | 75 | $ | 82 | $ | — | $ | — |
(a) | Includes nonaccrual TDR loans of $48 million and $59 million at September 30, 2015, and December 31, 2014, respectively. |
(b) | Other commercial primarily includes senior secured commercial lending. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
Net (recoveries) charge-offs | Net charge-off ratios (a) | Net charge-offs (recoveries) | Net charge-off ratios (a) | |||||||||||||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||
Automotive | $ | — | $ | — | — | % | — | % | $ | — | $ | 1 | — | % | — | % | ||||||||||||
Other | (1 | ) | — | (0.2 | ) | — | (2 | ) | (7 | ) | (0.1 | ) | (0.5 | ) | ||||||||||||||
Total commercial finance receivables and loans | $ | (1 | ) | $ | — | — | % | — | % | $ | (2 | ) | $ | (6 | ) | — | % | — | % |
(a) | Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value and loans held-for-sale during the period for each loan category. |
September 30, 2015 | December 31, 2014 | |||||
Texas | 16.9 | % | 13.8 | % | ||
Florida | 9.7 | 12.3 | ||||
Michigan | 9.6 | 9.9 | ||||
California | 8.5 | 9.0 | ||||
North Carolina | 4.0 | 3.9 | ||||
Virginia | 4.0 | 4.1 | ||||
Pennsylvania | 3.7 | 3.8 | ||||
Georgia | 3.7 | 3.7 | ||||
Illinois | 2.9 | 2.7 | ||||
New York | 2.5 | 3.9 | ||||
Other United States | 34.5 | 32.9 | ||||
Total commercial real estate finance receivables and loans | 100.0 | % | 100.0 | % |
September 30, 2015 | December 31, 2014 | |||||
Industry | ||||||
Automotive | 81.2 | % | 87.3 | % | ||
Services | 5.7 | 2.0 | ||||
Electronics | 3.9 | 2.9 | ||||
Other | 9.2 | 7.8 | ||||
Total commercial criticized finance receivables and loans | 100.0 | % | 100.0 | % |
Three months ended September 30, 2015 ($ in millions) | Consumer automotive | Consumer mortgage | Total consumer | Commercial | Total | |||||||||||||||
Allowance at July 1, 2015 | $ | 767 | $ | 119 | $ | 886 | $ | 88 | $ | 974 | ||||||||||
Charge-offs | (220 | ) | (10 | ) | (230 | ) | (1 | ) | (231 | ) | ||||||||||
Recoveries | 64 | 4 | 68 | 2 | 70 | |||||||||||||||
Net charge-offs | (156 | ) | (6 | ) | (162 | ) | 1 | (161 | ) | |||||||||||
Provision for loan losses | 200 | 6 | 206 | 5 | 211 | |||||||||||||||
Other (a) | (7 | ) | — | (7 | ) | 1 | (6 | ) | ||||||||||||
Allowance at September 30, 2015 | $ | 804 | $ | 119 | $ | 923 | $ | 95 | $ | 1,018 | ||||||||||
Allowance for loan losses to finance receivables and loans outstanding at September 30, 2015 (b) | 1.3 | % | 1.2 | % | 1.3 | % | 0.3 | % | 0.9 | % | ||||||||||
Annualized net charge-offs to average finance receivables and loans outstanding at September 30, 2015 (b) | 1.0 | % | 0.3 | % | 0.9 | % | — | % | 0.6 | % | ||||||||||
Allowance for loan losses to total nonperforming finance receivables and loans at September 30, 2015 (b) | 194.5 | % | 80.1 | % | 164.3 | % | 127.1 | % | 159.9 | % | ||||||||||
Ratio of allowance for loan losses to annualized net charge-offs at September 30, 2015 | 1.3 | 4.9 | 1.4 | n/m | 1.6 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
(b) | Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts. |
Three months ended September 30, 2014 ($ in millions) | Consumer automotive | Consumer mortgage | Total consumer | Commercial | Total | |||||||||||||||
Allowance at July 1, 2014 | $ | 729 | $ | 302 | $ | 1,031 | $ | 140 | $ | 1,171 | ||||||||||
Charge-offs | (188 | ) | (13 | ) | (201 | ) | — | (201 | ) | |||||||||||
Recoveries | 51 | 1 | 52 | — | 52 | |||||||||||||||
Net charge-offs | (137 | ) | (12 | ) | (149 | ) | — | (149 | ) | |||||||||||
Provision for loan losses | 112 | (7 | ) | 105 | (3 | ) | 102 | |||||||||||||
Other (a) | (11 | ) | — | (11 | ) | — | (11 | ) | ||||||||||||
Allowance at September 30, 2014 | $ | 693 | $ | 283 | $ | 976 | $ | 137 | $ | 1,113 | ||||||||||
Allowance for loan losses to finance receivables and loans outstanding at September 30, 2014 (b) | 1.2 | % | 3.7 | % | 1.5 | % | 0.4 | % | 1.1 | % | ||||||||||
Annualized net charge-offs to average finance receivables and loans outstanding at September 30, 2014 (b) | 0.9 | % | 0.6 | % | 0.9 | % | — | % | 0.6 | % | ||||||||||
Allowance for loan losses to total nonperforming finance receivables and loans at September 30, 2014 (b) | 194.8 | % | 147.0 | % | 178.0 | % | 187.9 | % | 179.2 | % | ||||||||||
Ratio of allowance for loan losses to annualized net charge-offs at September 30, 2014 | 1.3 | 6.0 | 1.6 | n/m | 1.9 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
(b) | Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts. |
Nine months ended September 30, 2015 ($ in millions) | Consumer automotive | Consumer mortgage | Total consumer | Commercial | Total | |||||||||||||||
Allowance at January 1, 2015 | $ | 685 | $ | 152 | $ | 837 | $ | 140 | $ | 977 | ||||||||||
Charge-offs | (579 | ) | (41 | ) | (620 | ) | (1 | ) | (621 | ) | ||||||||||
Recoveries | 195 | 12 | 207 | 3 | 210 | |||||||||||||||
Net charge-offs | (384 | ) | (29 | ) | (413 | ) | 2 | (411 | ) | |||||||||||
Provision for loan losses | 510 | 4 | 514 | (47 | ) | 467 | ||||||||||||||
Other (a) | (7 | ) | (8 | ) | (15 | ) | — | (15 | ) | |||||||||||
Allowance at September 30, 2015 | $ | 804 | $ | 119 | $ | 923 | $ | 95 | $ | 1,018 | ||||||||||
Allowance for loan losses to finance receivables and loans outstanding at September 30, 2015 (b) | 1.3 | % | 1.2 | % | 1.3 | % | 0.3 | % | 0.9 | % | ||||||||||
Annualized net charge-offs to average finance receivables and loans outstanding at September 30, 2015 (b) | 0.9 | % | 0.5 | % | 0.8 | % | — | % | 0.5 | % | ||||||||||
Allowance for loan losses to total nonperforming finance receivables and loans at September 30, 2015 (b) | 194.5 | % | 80.1 | % | 164.3 | % | 127.1 | % | 159.9 | % | ||||||||||
Ratio of allowance for loan losses to annualized net charge-offs at September 30, 2015 | 1.6 | 3.0 | 1.7 | n/m | 1.9 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
(b) | Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts. |
Nine months ended September 30, 2014 ($ in millions) | Consumer automotive | Consumer mortgage | Total consumer | Commercial | Total | |||||||||||||||
Allowance at January 1, 2014 | $ | 673 | $ | 389 | $ | 1,062 | $ | 146 | $ | 1,208 | ||||||||||
Charge-offs | (511 | ) | (38 | ) | (549 | ) | (5 | ) | (554 | ) | ||||||||||
Recoveries | 170 | 6 | 176 | 11 | 187 | |||||||||||||||
Net charge-offs | (341 | ) | (32 | ) | (373 | ) | 6 | (367 | ) | |||||||||||
Provision for loan losses | 372 | (55 | ) | 317 | (15 | ) | 302 | |||||||||||||
Other (a) | (11 | ) | (19 | ) | (30 | ) | — | (30 | ) | |||||||||||
Allowance at September 30, 2014 | $ | 693 | $ | 283 | $ | 976 | $ | 137 | $ | 1,113 | ||||||||||
Allowance for loan losses to finance receivables and loans outstanding at September 30, 2014 (b) | 1.2 | % | 3.7 | % | 1.5 | % | 0.4 | % | 1.1 | % | ||||||||||
Annualized net charge-offs to average finance receivables and loans outstanding at September 30, 2014 (b) | 0.8 | % | 0.5 | % | 0.8 | % | — | % | 0.5 | % | ||||||||||
Allowance for loan losses to total nonperforming finance receivables and loans at September 30, 2014 (b) | 194.8 | % | 147.0 | % | 178.0 | % | 187.9 | % | 179.2 | % | ||||||||||
Ratio of allowance for loan losses to annualized net charge-offs at September 30, 2014 | 1.5 | 6.8 | 2.0 | (16.7 | ) | 2.3 |
(a) | Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale. |
(b) | Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the unpaid principal balance, net of premiums and discounts. |
2015 | 2014 | |||||||||||||||||||
September 30, ($ in millions) | Allowance for loan losses | Allowance as a % of loans outstanding | Allowance as a % of allowance for loan losses | Allowance for loan losses | Allowance as a % of loans outstanding | Allowance as a % of allowance for loan losses | ||||||||||||||
Consumer | ||||||||||||||||||||
Consumer automotive | $ | 804 | 1.3 | % | 79.0 | % | $ | 693 | 1.2 | % | 62.3 | % | ||||||||
Consumer mortgage | 119 | 1.2 | 11.7 | 283 | 3.7 | 25.4 | ||||||||||||||
Total consumer loans | 923 | 1.3 | 90.7 | 976 | 1.5 | 87.7 | ||||||||||||||
Commercial | ||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||
Automotive | 26 | 0.1 | 2.5 | 59 | 0.2 | 5.3 | ||||||||||||||
Other | 47 | 2.0 | 4.6 | 47 | 2.7 | 4.2 | ||||||||||||||
Commercial real estate — Automotive | 22 | 0.7 | 2.2 | 31 | 1.0 | 2.8 | ||||||||||||||
Total commercial loans | 95 | 0.3 | 9.3 | 137 | 0.4 | 12.3 | ||||||||||||||
Total allowance for loan losses | $ | 1,018 | 0.9 | % | 100.0 | % | $ | 1,113 | 1.1 | % | 100.0 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
($ in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Consumer | ||||||||||||||||
Consumer automotive | $ | 200 | $ | 112 | $ | 510 | $ | 372 | ||||||||
Consumer mortgage | 6 | (7 | ) | 4 | (55 | ) | ||||||||||
Total consumer loans | 206 | 105 | 514 | 317 | ||||||||||||
Commercial | ||||||||||||||||
Commercial and industrial | ||||||||||||||||
Automotive | 1 | (3 | ) | (39 | ) | (6 | ) | |||||||||
Other | 4 | — | 3 | (10 | ) | |||||||||||
Commercial real estate — Automotive | — | — | (11 | ) | 1 | |||||||||||
Total commercial loans | 5 | (3 | ) | (47 | ) | (15 | ) | |||||||||
Total provision for loan losses | $ | 211 | $ | 102 | $ | 467 | $ | 302 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Off-lease vehicles terminated (in units) | 65,363 | 79,280 | 194,546 | 225,424 | ||||||||||||
Average gain per vehicle ($ per unit) | $ | 1,611 | $ | 1,327 | $ | 1,454 | $ | 1,698 | ||||||||
Method of vehicle sales | ||||||||||||||||
Auction (internet and physical) | 59 | % | 60 | % | 60 | % | 60 | % | ||||||||
Sale to dealer, lessee, and other | 41 | % | 40 | % | 40 | % | 40 | % |
September 30, | 2015 | 2014 | ||||
Car | 39 | % | 41 | % | ||
Truck | 13 | 12 | ||||
Sport utility vehicle | 48 | 47 |
September 30, 2015 | December 31, 2014 | |||||||||||||
Change in Interest Rates ($ in millions) | Instantaneous | Gradual (a) | Instantaneous | Gradual (a) | ||||||||||
-100 basis points | $ | (40 | ) | $ | 3 | $ | 78 | n/a | ||||||
+100 basis points | (50 | ) | (7 | ) | (130 | ) | n/a | |||||||
+200 basis points | (180 | ) | (31 | ) | (215 | ) | n/a |
(a) | Gradual changes in interest rates are recognized over 12 months. |
September 30, 2015 | ||||||||
Change in Interest Rates ($ in millions) | Instantaneous | Gradual (a) | ||||||
-100 basis points | $ | (192 | ) | $ | (50 | ) | ||
+100 basis points | 48 | 29 | ||||||
+200 basis points | 62 | 50 |
(a) | Gradual changes in interest rates are recognized over 12 months. |
($ in millions) | 3rd Quarter 2015 | 2nd Quarter 2015 | 1st Quarter 2015 | 4th Quarter 2014 | 3rd Quarter 2014 | 2nd Quarter 2014 | 1st Quarter 2014 | ||||||||||||||
Number of retail accounts | 1,931,380 | 1,874,632 | 1,818,770 | 1,731,105 | 1,698,585 | 1,641,327 | 1,589,441 | ||||||||||||||
Deposits | |||||||||||||||||||||
Retail | $ | 53,502 | $ | 51,750 | $ | 50,633 | $ | 47,954 | $ | 46,718 | $ | 45,934 | $ | 45,193 | |||||||
Brokered | 10,201 | 9,861 | 9,853 | 9,885 | 9,692 | 9,684 | 9,683 | ||||||||||||||
Other (a) | 91 | 89 | 79 | 64 | 73 | 75 | 70 | ||||||||||||||
Total deposits | $ | 63,794 | $ | 61,700 | $ | 60,565 | $ | 57,903 | $ | 56,483 | $ | 55,693 | $ | 54,946 |
(a) | Other deposits include mortgage escrow and other deposits (excluding intercompany deposits). |
• | Ally Financial Inc. renewed, increased, and/or extended $16.1 billion in U.S. credit facilities. The automotive credit facility renewal amount includes the March 2015 refinancing of $12.5 billion in credit facilities at both the parent company and Ally Bank with a syndicate of eighteen lenders. The $12.5 billion capacity is secured by retail, lease, and dealer floorplan automotive assets and is allocated to two separate facilities; one is a $9.25 billion facility which is available to the parent company, while the other is a $3.25 billion facility available to Ally Bank. Both facilities mature in March 2017. |
• | Ally Financial Inc. continued to access the public and private term asset-backed securitization markets completing ten U.S. transactions that raised $7.3 billion, with $3.9 billion and $3.4 billion raised by Ally Bank and the parent company, respectively. Included in Ally Bank's funding for 2015 is one off-balance sheet securitization backed by retail automotive loans, which raised $1 billion. In addition, Ally Bank raised $2.0 billion related to two whole-loan sales comprised of retail automotive loans. |
• | Ally Financial Inc. accessed the unsecured debt capital markets in the first nine months of 2015, and raised $3.9 billion. |
• | In October 2015, Ally Financial Inc. raised $759 million through a public securitization backed by retail automotive loans. |
($ in millions) | Bank | Parent | Total | % | ||||||||||
September 30, 2015 | ||||||||||||||
Secured financings | $ | 23,686 | $ | 25,995 | $ | 49,681 | 36 | |||||||
Institutional term debt | — | 18,867 | 18,867 | 14 | ||||||||||
Retail debt programs (a) | — | 3,846 | 3,846 | 3 | ||||||||||
Total debt (b) | 23,686 | 48,708 | 72,394 | 53 | ||||||||||
Deposits (c) | 63,794 | 247 | 64,041 | 47 | ||||||||||
Total on-balance sheet funding | $ | 87,480 | $ | 48,955 | $ | 136,435 | 100 | |||||||
December 31, 2014 | ||||||||||||||
Secured financings | $ | 27,135 | $ | 20,732 | $ | 47,867 | 36 | |||||||
Institutional term debt | — | 21,628 | 21,628 | 17 | ||||||||||
Retail debt programs (a) | — | 3,673 | 3,673 | 3 | ||||||||||
Total debt (b) | 27,135 | 46,033 | 73,168 | 56 | ||||||||||
Deposits (c) | 57,903 | 319 | 58,222 | 44 | ||||||||||
Total on-balance sheet funding | $ | 85,038 | $ | 46,352 | $ | 131,390 | 100 |
(a) | Includes $388 million and $335 million of Retail Term Notes at September 30, 2015, and December 31, 2014, respectively. |
(b) | Excludes fair value adjustment as described in Note 22 to the Condensed Consolidated Financial Statements. |
(c) | Bank deposits include retail, brokered, and other deposits. Parent deposits include dealer deposits. Intercompany deposits are not included. |
Outstanding | Unused capacity (a) | Total capacity | ||||||||||||||||||||||
($ in millions) | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||||||||
Bank funding | ||||||||||||||||||||||||
Secured | $ | 3,015 | $ | 3,250 | $ | 235 | $ | 250 | $ | 3,250 | $ | 3,500 | ||||||||||||
Parent funding | ||||||||||||||||||||||||
Secured | 17,154 | 15,030 | 1,256 | 3,425 | 18,410 | 18,455 | ||||||||||||||||||
Total committed facilities | $ | 20,169 | $ | 18,280 | $ | 1,491 | $ | 3,675 | $ | 21,660 | $ | 21,955 |
(a) | Funding from committed secured facilities is available on request in the event excess collateral resides in certain facilities or is available to the extent incremental collateral is available and contributed to the facilities. |
Rating agency | Short-term | Senior unsecured debt | Outlook | Date of last action | ||||
Fitch | B | BB+ | Stable | April 8, 2015 (a) | ||||
Moody’s | Not Prime | Ba3 | Stable | October 20, 2015 (b) | ||||
S&P | B | BB+ | Positive | October 21, 2015 (c) | ||||
DBRS | R-4 | BB (High) | Positive | May 18, 2015 (d) |
(a) | Fitch affirmed our senior unsecured debt rating of BB+, affirmed our short-term rating of B, and maintained a Stable outlook on April 8, 2015. |
(b) | Moody's upgraded our senior unsecured debt rating to Ba3 from B1, affirmed our short-term rating of Not Prime, and changed the outlook to Stable on October 20, 2015. |
(c) | Standard & Poor's affirmed our senior unsecured debt rating of BB+, affirmed our short-term rating of B, and changed the outlook from Stable to Positive on October 21, 2015. |
(d) | DBRS upgraded our senior unsecured debt rating to BB (High) from BB, confirmed our short-term rating of R-4, and maintained a Positive trend on all ratings on May 18, 2015. |
• | Allowance for loan losses |
• | Valuation of automotive lease assets and residuals |
• | Fair value of financial instruments |
• | Legal and regulatory reserves |
• | Determination of provision for income taxes |
2015 | 2014 | Increase (decrease) due to (a) | ||||||||||||||||||||||||||||||||
Three months ended September 30, ($ in millions) | Average balance (b) | Interest income/ Interest expense | Yield/ rate | Average balance (b) | Interest income/ Interest expense | Yield/ rate | Volume | Yield/rate | Total | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||
Interest on cash and cash equivalents | $ | 3,667 | $ | 2 | 0.22 | % | $ | 3,867 | $ | 2 | 0.21 | % | $ | — | $ | — | $ | — | ||||||||||||||||
Investment securities (c) | 17,745 | 95 | 2.12 | 16,182 | 88 | 2.16 | 8 | (1 | ) | 7 | ||||||||||||||||||||||||
Loans held-for-sale, net | 111 | 2 | 7.15 | 3 | — | — | 2 | — | 2 | |||||||||||||||||||||||||
Finance receivables and loans, net (d) (e) | 105,604 | 1,166 | 4.38 | 100,089 | 1,114 | 4.42 | 61 | (9 | ) | 52 | ||||||||||||||||||||||||
Investment in operating leases, net (f) | 17,519 | 302 | 6.84 | 19,114 | 350 | 7.26 | (28 | ) | (20 | ) | (48 | ) | ||||||||||||||||||||||
Total interest-earning assets | 144,646 | 1,567 | 4.30 | 139,255 | 1,554 | 4.43 | 43 | (30 | ) | 13 | ||||||||||||||||||||||||
Noninterest-bearing cash and cash equivalents | 1,563 | 1,688 | ||||||||||||||||||||||||||||||||
Other assets (g) | 9,855 | 10,323 | ||||||||||||||||||||||||||||||||
Allowance for loan losses | (988 | ) | (1,174 | ) | ||||||||||||||||||||||||||||||
Total assets | $ | 155,076 | $ | 150,092 | ||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||
Interest-bearing deposit liabilities | $ | 62,810 | $ | 181 | 1.14 | % | $ | 56,301 | $ | 166 | 1.17 | % | 19 | (4 | ) | 15 | ||||||||||||||||||
Short-term borrowings | 6,745 | 13 | 0.76 | 6,187 | 12 | 0.77 | 1 | — | 1 | |||||||||||||||||||||||||
Long-term debt (e) (h) (i) | 67,028 | 410 | 2.43 | 67,687 | 493 | 2.89 | (5 | ) | (78 | ) | (83 | ) | ||||||||||||||||||||||
Total interest-bearing liabilities (e) (h) (j) | 136,583 | 604 | 1.75 | 130,175 | 671 | 2.05 | 15 | (82 | ) | (67 | ) | |||||||||||||||||||||||
Noninterest-bearing deposit liabilities | 91 | 75 | ||||||||||||||||||||||||||||||||
Total funding sources (h) (k) | 136,674 | 604 | 1.75 | 130,250 | 671 | 2.04 | ||||||||||||||||||||||||||||
Other liabilities (l) | 3,971 | 4,856 | ||||||||||||||||||||||||||||||||
Total liabilities | 140,645 | 135,106 | ||||||||||||||||||||||||||||||||
Total equity | 14,431 | 14,986 | ||||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 155,076 | $ | 150,092 | ||||||||||||||||||||||||||||||
Net financing revenue | $ | 963 | $ | 883 | $ | 28 | $ | 52 | $ | 80 | ||||||||||||||||||||||||
Net interest spread (m) | 2.55 | % | 2.38 | % | ||||||||||||||||||||||||||||||
Net interest spread excluding original issue discount (m) | 2.59 | % | 2.55 | % | ||||||||||||||||||||||||||||||
Net interest spread excluding original issue discount and including noninterest-bearing deposit liabilities (m) | 2.60 | % | 2.55 | % | ||||||||||||||||||||||||||||||
Net yield on interest-earning assets (n) | 2.64 | % | 2.52 | % | ||||||||||||||||||||||||||||||
Net yield on interest-earning assets excluding original issue discount (n) | 2.67 | % | 2.65 | % |
(a) | Changes in interest not solely due to volume or yield/rate are allocated in proportion to the absolute dollar amount of change in volume and yield/rate. |
(b) | Average balances are calculated using a combination of monthly and daily average methodologies. |
(c) | Excludes equity investments with an average balance of $1,014 million and $793 million at September 30, 2015, and 2014, respectively, and related income on equity investments of $7 million and $6 million for the three months ended September 30, 2015, and 2014, respectively. Yields on available-for-sale debt securities are based on fair value as opposed to historical cost. |
(d) | Nonperforming finance receivables and loans are included in the average balances. For information on our accounting policies regarding nonperforming status, refer to Note 1 to the Consolidated Financial Statements in our 2014 Annual Report on Form 10-K. |
(e) | Includes the effects of derivative financial instruments designated as hedges. |
(f) | Includes remarketing gains of $105 million and $105 million during the three months ended September 30, 2015, and 2014, respectively. Excluding these gains on sale, the annualized yield would be 4.44% and 5.09% at September 30, 2015, and 2014, respectively. |
(g) | Includes average balances of assets of discontinued operations for the three months ended September 30, 2014. |
(h) | Average balance includes $1,322 million and $1,411 million related to original issue discount (OID) at September 30, 2015, and 2014, respectively. Interest expense includes OID amortization of $11 million and $47 million during the three months ended September 30, 2015, and 2014, respectively. |
(i) | Excluding OID, the rate on long-term debt was 2.32% and 2.56% at September 30, 2015, and 2014, respectively. |
(j) | Excluding OID, the rate on total interest-bearing liabilities was 1.71% and 1.88% at September 30, 2015, and 2014, respectively. |
(k) | Excluding OID, the rate on total funding sources was 1.70% and 1.88% at September 30, 2015, and 2014, respectively. |
(l) | Includes average balances of liabilities of discontinued operations for the three months ended September 30, 2014. |
(m) | Net interest spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities. |
(n) | Net yield on interest-earning assets represents net financing revenue as a percentage of total interest-earning assets. |
2015 | 2014 | Increase (decrease) due to (a) | ||||||||||||||||||||||||||||||||
Nine months ended September 30, ($ in millions) | Average balance (b) | Interest income/ Interest expense | Yield/ rate | Average balance (b) | Interest income/ Interest expense | Yield/ rate | Volume | Yield/rate | Total | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||
Interest on cash and cash equivalents | $ | 4,025 | $ | 6 | 0.20 | % | $ | 4,339 | $ | 6 | 0.18 | % | $ | — | $ | — | $ | — | ||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 3 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Investment securities (c) | 16,916 | 264 | 2.09 | 15,826 | 264 | 2.23 | 17 | (17 | ) | — | ||||||||||||||||||||||||
Loans held-for-sale, net | 1,177 | 40 | 4.54 | 13 | 1 | 10.28 | 41 | (2 | ) | 39 | ||||||||||||||||||||||||
Finance receivables and loans, net (d) (e) | 102,161 | 3,358 | 4.39 | 99,769 | 3,345 | 4.48 | 80 | (67 | ) | 13 | ||||||||||||||||||||||||
Investment in operating leases, net (f) | 18,474 | 873 | 6.32 | 18,556 | 1,053 | 7.59 | (5 | ) | (175 | ) | (180 | ) | ||||||||||||||||||||||
Total interest-earning assets | 142,756 | 4,541 | 4.25 | 138,503 | 4,669 | 4.51 | 133 | (261 | ) | (128 | ) | |||||||||||||||||||||||
Noninterest-bearing cash and cash equivalents | 1,574 | 1,560 | ||||||||||||||||||||||||||||||||
Other assets (g) | 9,773 | 11,167 | ||||||||||||||||||||||||||||||||
Allowance for loan losses | (970 | ) | (1,193 | ) | ||||||||||||||||||||||||||||||
Total assets | $ | 153,133 | $ | 150,037 | ||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||
Interest-bearing deposit liabilities | $ | 61,160 | $ | 530 | 1.16 | % | $ | 55,361 | $ | 495 | 1.20 | % | 50 | (15 | ) | 35 | ||||||||||||||||||
Short-term borrowings | 6,362 | 36 | 0.76 | 6,325 | 40 | 0.85 | — | (4 | ) | (4 | ) | |||||||||||||||||||||||
Long-term debt (e) (h) (i) | 66,256 | 1,258 | 2.54 | 68,143 | 1,576 | 3.09 | (43 | ) | (275 | ) | (318 | ) | ||||||||||||||||||||||
Total interest-bearing liabilities (e) (h) (j) | 133,778 | 1,824 | 1.82 | 129,829 | 2,111 | 2.17 | 7 | (294 | ) | (287 | ) | |||||||||||||||||||||||
Noninterest-bearing deposit liabilities | 82 | 69 | ||||||||||||||||||||||||||||||||
Total funding sources (h) (k) | 133,860 | 1,824 | 1.82 | 129,898 | 2,111 | 2.17 | ||||||||||||||||||||||||||||
Other liabilities (l) | 4,352 | 5,484 | ||||||||||||||||||||||||||||||||
Total liabilities | 138,212 | 135,382 | ||||||||||||||||||||||||||||||||
Total equity | 14,921 | 14,655 | ||||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 153,133 | $ | 150,037 | ||||||||||||||||||||||||||||||
Net financing revenue | $ | 2,717 | $ | 2,558 | $ | 126 | $ | 33 | $ | 159 | ||||||||||||||||||||||||
Net interest spread (m) | 2.43 | % | 2.34 | % | ||||||||||||||||||||||||||||||
Net interest spread excluding original issue discount (m) | 2.48 | % | 2.50 | % | ||||||||||||||||||||||||||||||
Net interest spread excluding original issue discount and including noninterest-bearing deposit liabilities (m) | 2.48 | % | 2.50 | % | ||||||||||||||||||||||||||||||
Net yield on interest-earning assets (n) | 2.54 | % | 2.47 | % | ||||||||||||||||||||||||||||||
Net yield on interest-earning assets excluding original issue discount (n) | 2.58 | % | 2.60 | % |
(a) | Changes in interest not solely due to volume or yield/rate are allocated in proportion to the absolute dollar amount of change in volume and yield/rate. |
(b) | Average balances are calculated using a combination of monthly and daily average methodologies. |
(c) | Excludes equity investments with an average balance of $967 million and $868 million at September 30, 2015, and 2014, respectively, and related income on equity investments of $19 million and $18 million for the nine months ended September 30, 2015, and 2014, respectively. Yields on available-for-sale debt securities are based on fair value as opposed to historical cost. |
(d) | Nonperforming finance receivables and loans are included in the average balances. For information on our accounting policies regarding nonperforming status, refer to Note 1 to the Consolidated Financial Statements in our 2014 Annual Report on Form 10-K. |
(e) | Includes the effects of derivative financial instruments designated as hedges. |
(f) | Includes remarketing gains of $282 million and $382 million during the nine months ended September 30, 2015, and 2014, respectively. Excluding these gains on sale, the annualized yield would be 4.27% and 4.83% at September 30, 2015, and 2014, respectively. |
(g) | Includes average balances of assets of discontinued operations for the nine months ended September 30, 2014. |
(h) | Average balance includes $1,333 million and $1,462 million related to original issue discount (OID) at September 30, 2015, and 2014, respectively. Interest expense includes OID amortization of $33 million and $137 million during the nine months ended September 30, 2015, and 2014, respectively. |
(i) | Excluding OID, the rate on long-term debt was 2.42% and 2.76% at September 30, 2015, and 2014, respectively. |
(j) | Excluding OID, the rate on total interest-bearing liabilities was 1.77% and 2.01% at September 30, 2015, and 2014, respectively. |
(k) | Excluding OID, the rate on total funding sources was 1.77% and 2.01% at September 30, 2015, and 2014, respectively. |
(l) | Includes average balances of liabilities of discontinued operations for the nine months ended September 30, 2014. |
(m) | Net interest spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities. |
(n) | Net yield on interest-earning assets represents net financing revenue as a percentage of total interest-earning assets. |
Three months ended September 30, 2015 | Total number of shares repurchased | Weighted-average price paid per share | |||||
July 2015 | 2,264 | $ | 22.81 | ||||
August 2015 | 55 | 21.98 | |||||
September 2015 | 434 | 20.95 | |||||
Total | 2,753 | $ | 22.50 |
Ally Financial Inc. (Registrant) | |
/S/ CHRISTOPHER A. HALMY | |
Christopher A. Halmy Chief Financial Officer |
/S/ DAVID J. DEBRUNNER | |
David J. DeBrunner Vice President, Chief Accounting Officer, and Corporate Controller |
Exhibit | Description | Method of Filing |
3.1 | Ally Financial Inc. Bylaws, dated October 27, 2015 | Filed herewith. |
12 | Computation of Ratio of Earnings to Fixed Charges | Filed herewith. |
31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) | Filed herewith. |
31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) | Filed herewith. |
32 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 | Filed herewith. |
101 | Interactive Data File | Filed herewith. |
A. | Authorized Stock. The authorized classes and shares of stock of Ally Financial Inc. (“Corporation”) are stated in the Corporation’s Amended and Restated Certificate of Incorporation. |
B. | Authorization and Issuances of Stock. Any authorization or issuance of additional common or preferred stock of the Corporation (beyond that currently authorized and outstanding) requires prior approval of the Ally Financial Inc. Board of Directors (“Board”). |
C. | Non-certificated Stock. Stock of the Corporation is issued in non-certificated form, but if directed by the Board, the Corporation will issue one or more certificates of common stock to a stockholder of record representing the shares of stock held by that stockholder. |
D. | Transfer of Stock. Common stock of the Corporation is transferrable. |
1. | Transfer Instructions. The Corporation will effect a transfer of common stock only upon instructions received from the stockholder of record or his or her authorized designee. |
2. | Validity. No transfer of common stock is valid against the Corporation for any purpose until properly recorded in the Corporation’s stock register. |
3. | Registration Rights of Certain Common Holders. The common stockholders have the registration rights contained in the attached Exhibit F, which is part of these Bylaws. |
E. | Dividends. Dividends on common stock of the Corporation will be paid if, as, and when declared by the Board, and dividends on each series of preferred stock of the Corporation will be paid in accordance with their respective certificates of designation. |
F. | Stockholder Meetings. |
1. | Annual Meeting. The annual meeting of common stockholders will be held on the date determined by the Corporation’s Chief Executive Officer, subject to applicable legal requirements. |
2. | Special Meetings. The Board or the Chief Executive Officer of the Corporation may call special meetings of common stockholders from time to time. |
a. | Any special meeting of the common stockholders will be held on the date, and at the time, and for the purpose(s) stated in the notice of the meeting, in all cases subject to any rules and procedures adopted by the Board. |
b. | The party who requested the special meeting may revoke the request at any time before the meeting occurs by sending written notice of the revocation to the Secretary of the Corporation. |
3. | Director Nomination and Other Stockholder Business. At any stockholder meeting, the only business that will be conducted is that which is properly brought before the stockholders. |
a. | For annual meetings, nominations of individuals for election to the Board, or proposals of other business to be transacted, may be made only through one of the following means: |
i. | Pursuant to the Corporation’s notice of the annual stockholder meeting (or any supplement to it). |
ii. | By, or at the direction of, the Board or any committee of the Board. |
iii. | By anyone who: |
A. | Is a common stockholder of record of the Corporation both at the time such common stockholder gives the notices contemplated by this Section I.F.3 and at the time of such annual stockholder meeting, and |
B. | Who is entitled to vote at the meeting, and |
C. | Complies with the procedures of this Section I.F.3 and applicable legal requirements. |
b. | For special meetings, nominations of individuals for election to the Board and proposals for other business to be transacted must comply with this Section I.F.3. |
c. | A common stockholder that intends to nominate a director for election or re-election, or to propose any other business, at a stockholder meeting must submit to the Secretary of the Corporation a timely written notice of this intent that complies with the Bylaws and/or Regulation 14A, as applicable, (“Notice of Intent”). |
i. | For an annual meeting, a Notice of Intent is “timely” given only if the Secretary of the Corporation receives the Notice of Intent at least 120 calendar days before that annual meeting but not more than 180 calendar days before that annual meeting. |
ii. | For a special meeting called under Section I.F.2 above, a Notice of Intent is “timely” given only if the Secretary of the Corporation receives the Notice of Intent at least 60 calendar days before the special meeting. |
d. | Each Notice of Intent submitted to the Secretary of the Corporation in connection with an annual stockholder meeting under Section I.F.3.a.iii above must include the following information: |
i. | For each individual that the stockholder proposes to nominate for election or re-election as a director, all information that is required to be disclosed in connection with soliciting proxies for the election of directors, or that is otherwise required, under Regulation 14A (including, without limitation, the individual’s written consent to being named in the proxy statement as a nominee and to serving as a director, if elected or re-elected). |
ii. | As to any business other than the nomination of directors, a brief description of the business to be addressed, including relevant background and context; reasons for raising the matter at the stockholder meeting; and any material interest of the stockholder (and any beneficial owner of stock on whose behalf the stockholder is acting) related to the business. |
• | The stockholder’s name and address and whether it is a nominal stockholder acting on behalf of, or for the benefit of, someone else. |
• | The class and number of shares of common stock and any other securities of the Corporation held by the stockholder. |
• | Description of any agreement, arrangement, or understanding between the stockholder on one hand, and any beneficial owner of stock on whose behalf the stockholder is acting on the other hand, and their respective affiliates, and any other person(s) in connection with the nomination or proposal of other business. |
• | Description of any agreement, arrangement, or understanding (including, without limitation, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares, in each case regardless of the form of settlement) that has been entered into by or on behalf of the stockholder, in each case where the effect or intent of the agreement, arrangement, or understanding with respect to the Corporation’s securities is to: create or mitigate loss to; manage |
• | A representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at the contemplated stockholder meeting and will appear in person or by proxy at the meeting to bring the nomination or other business before the meeting. |
• | A representation as to whether the stockholder (or any beneficial owner of stock on whose behalf the stockholder is acting) will, or is part of a group that will, either deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding common stock required to approve or adopt the proposal or to elect each identified nominee, and/or otherwise solicit proxies from stockholders in support of that proposal or nomination. |
e. | With respect to stockholder proposals to be included in any proxy statement of the Corporation, stockholders must comply with the requirements of Securities and Exchange Commission Rule 14a-8, if applicable, instead of this Section I.F. |
f. | The Board will determine any question as to whether and to what extent the Bylaws’ requirements related to stockholder meetings have been satisfied, and its determination will be conclusive and binding on all stockholders and the Corporation. |
i. | If the Board determines that any requirement has not been satisfied as to a particular meeting, then it may elect to waive the deficiency for that meeting, or disregard the nomination or decline to allow the proposed business to be transacted at the meeting. |
ii. | If a stockholder, or its qualified representative, does not appear at a stockholder meeting to make its nomination or proposal of other business, then the nomination will be disregarded and the proposed business will not be transacted, even if the Corporation has received proxies with respect to votes on those matters. |
• | As used above, “qualified representative” means a person who is a duly authorized officer, manager, or partner of the absent stockholder, or another individual who is authorized in a writing signed by the absent stockholder, or an electronic transmission delivered to the Secretary of the Corporation by the absent stockholder, to act as its proxy at the stockholder meeting and who produces the writing or the electronic transmission or a reliable reproduction of either. |
g. | Notwithstanding any contrary provision or inference in these Bylaws, nothing in these Bylaws limits any legal or stock exchange listing requirements applicable to stockholders as to director nominations or proposals as to any other business to be transacted at any stockholder meeting. |
4. | Meeting Location. Unless the Board decides to hold a physical meeting, all common stockholder meetings will be held by telephone, video conference, or similar communications equipment that allows all meeting participants to hear each other. |
a. | Any physical meetings of the common stockholders will be held at a location determined by the Board, which may, but is not required to, be in the State of Delaware. |
b. | As to any physical meetings of the common stockholders, any common stockholders may participate in the meeting by telephone, video conference, or similar communications equipment that allows all meeting participants to hear each other. |
c. | Any stockholder that participates in a meeting by telephone, video conference, or similar communications equipment that allows all meeting participants to hear each other is deemed to have been present at the meeting and to have waived any deficiency of notice. |
5. | Notices. The Corporation will give notices to stockholders as follows: |
a. | Notice for the annual meeting will be given to common stockholders entitled to the notice between ten and sixty calendar days before the meeting date. |
b. | Notice for any special meeting called by the Chief Executive Officer or the Board will be given to common stockholders entitled to the notice between ten and sixty calendar days before the meeting date. |
c. | Any and all notices may be given by: in-person delivery; United States mail; commercial delivery company; facsimile, electronic mail, or other electronic means; issuing a press release in accordance with applicable securities laws and regulations; and/or by filing a report with the United States Securities and Exchange Commission on Form 8-K. |
6. | Waiver of Notice. Meetings may be held without notice if all holders of common stock entitled to vote at the meeting are present in person or by proxy, or if notice is waived in writing by those not present, either before or after the meeting. |
a. | Any stockholder who is present in person or by proxy at a common stockholder meeting is conclusively presumed to have: |
i. | Waived notice of the meeting, except when he or she attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. |
ii. | Assented to any action taken, unless his or her dissent is entered in the minutes of the meeting or unless his written dissent or abstention is filed with the person acting as secretary of the meeting before it adjourns or is forwarded by registered mail to the Secretary of the Corporation immediately after the meeting. |
7. | List of Stockholders Entitled to Vote. Before every meeting of stockholders, the Secretary of the Corporation will prepare a complete list of the stockholders entitled to vote at the meeting in compliance with the requirements of the laws of the State of Delaware. |
8. | Quorum. A quorum for the transaction of business at a stockholder meeting consists of the holders of a majority of the outstanding shares of stock entitled to vote on the business to be transacted, who are present in person or by proxy at the meeting. |
9. | Absence of Quorum. If a quorum is not present within sixty minutes after the designated starting time for the meeting, the meeting may be adjourned and the Secretary may reschedule the meeting to occur within three to ten business days after the adjourned meeting. |
10. | Voting. At any meeting of the common stockholders, each common stockholder is entitled to vote in accordance with the number of voting shares it holds of record and voting powers of those shares. |
a. | Each common stockholder is entitled to one vote for each share of common stock it holds. |
b. | Unless otherwise required by law, the Corporation’s Amended and Restated Certificate of Incorporation, or these Bylaws, all matters subject to a vote of the stockholders will be decided by the vote of the holders of a majority of the outstanding shares of stock entitled to vote on the matter and who are present in person or by proxy at the meeting. |
c. | Election of directors will be decided by a plurality of the votes cast by the common stockholders. |
d. | Holders of common stock will vote together as a single class. |
e. | Notwithstanding any contrary provision or inference in these Bylaws, holders of any series of preferred stock of the Corporation have no right to vote on or approve any matter, except as provided in their respective certificates of designation. |
11. | Proxies. Each common stockholder entitled to vote, approve, consent, or otherwise act on a matter may authorize another person or persons to act for him by proxy, but the proxy, whether revocable or irrevocable, must comply with the requirements of applicable laws of the State of Delaware. |
12. | Conduct of Stockholder Meetings. The Board may adopt rules and procedures for the conduct of stockholder meetings (including, without limitation, advance notice requirements, meeting notice content requirements, disclosure requirements, etc.), which will be binding on the stockholders. |
A. | Responsibility. The business and affairs of the Corporation are managed by, or under the direction of, the Board. |
B. | Number of Directors. The number of directors on the Board will be between nine and thirteen, as determined by the Board in its discretion. |
C. | Chairperson. The Board will elect a chairperson from among the independent directors on the Board, and the chairperson (or in the chairperson’s absence, an alternate director designated by the chairperson) will preside at Board meetings. |
D. | Term. Each director will hold office until a successor is duly elected and qualified or until his or her earlier death, resignation, or removal. |
E. | Resignation. Any director may resign at any time by giving written notice to the Chief Executive Officer, or to the Secretary, of the Corporation. |
1. | Effective date. The resignation takes effect upon receipt or notice of it, or at any later time that is specified in the notice. |
2. | Acceptance Unnecessary. Unless specified in the resignation notice, acceptance of it is not necessary to make it effective. |
F. | Vacancies. Any vacancy on the Board created by reason of the death, removal, or resignation of a director, or by increase in the number of directors on the Board, may be filled by action of a majority of the remaining members of the Board even if they do not constitute a quorum. |
G. | Meetings. The Board will hold regular meetings of the Board at least four times during any twelve month period, and at least once during any consecutive three month period. |
1. | Special Meetings. The Chief Executive Officer of the Corporation, the chairperson of the Board, or a majority of the directors on the Board may call a special meeting of the Board at any time, subject to the advance notice requirements in Section II.G.2 below. |
2. | Notice of Meetings. The Corporation will give written notice of each regular and special Board meeting at least three calendar days before the meeting date, if sent by United States mail or commercial delivery company, or at least twenty-four before the meeting date, if sent by e-mail or facsimile or delivered in person. |
3. | Meetings Without Notice. Meetings may be held without notice if all directors entitled to vote at the meeting are present in person, or if notice is waived in writing by those not present either before or after the meeting. |
4. | Waiver of Notice. Any director who is present in person at a meeting of the Board or a Board committee is conclusively presumed to have: |
a. | Waived notice of the meeting, except when he or she attends for the express purpose of objecting or abstaining at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. |
b. | Assented to any action taken unless his dissent or abstention is entered in the minutes of the meeting or unless his written dissent or abstention is filed with the person acting as secretary of the meeting before it adjourns or is forwarded by registered mail to the Secretary of the Corporation immediately after the meeting. |
5. | Meeting Location. Board meetings will be held at a location determined by the Board, which may, but is not required to, be in the State of Delaware |
H. | Quorum. The presence of directors constituting a majority of the full Board constitutes a quorum for the transaction of business. |
1. | If a quorum is not present within sixty minutes after the time appointed for a Board meeting, the meeting may be adjourned and the chairperson may reschedule the meeting to be held between two and ten business days from the date of the adjourned meeting. |
2. | Notwithstanding any contrary provision in these Bylaws, interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a Board committee that authorizes any interested party contract or transaction. |
I. | Voting. Each director is entitled to cast one vote as to each matter brought before the Board or any committee of the Board of which that director is a member, and all matters to be determined by the Board will be determined by a majority vote of the directors present at a meeting at which a quorum is present. |
J. | Action Without a Meeting. Any action requiring a vote of the Board may be taken without a meeting and without prior notice or vote, if all directors consent in writing (including facsimile, e-mail, or other electronic means) to the contemplated action. |
K. | Telephonic Meetings. Board meetings may be held, and directors may participate in any Board meeting (regardless of how it is held), by telephone, video conference, or similar communications equipment that allows all meeting participants to hear each other, and participation in a meeting under this section constitutes presence at the meeting (and participation “in person”) and waiver of any deficiency of notice. |
L. | Compensation of Directors. Directors that are not also officers or employees of the Corporation may receive compensation for their services as directors, including service on any Board committee, in the form and amount as determined by the Board from time to time. |
1. | Directors that are Officers. Directors that are also officers or employees of the Corporation will not receive any separate compensation for services in their capacity as directors. |
2. | Expense Reimbursement. The Corporation will reimburse directors for any reasonable out-of-pocket expenses related to attendance at each regular or special meeting of the Board, subject to the Corporation’s internal expense policies, including requirements as to reporting and documenting of those expenses. |
M. | Conflicts of Interest. If any director has an actual or potential conflict of interest as against the Corporation (including vis-à-vis any stockholder), he or she will disclose the conflict to the Board and the Ally Legal Staff and address the conflict in accordance with applicable legal requirements. |
N. | Independence. A director qualifies as an independent director if the Board affirmatively determines that the director meets the independence standards issued by the New York Stock Exchange. |
O. | Fiduciary Duties. To the extent permitted under the laws of the State of Delaware, no director is personally liable to the Corporation or any of its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. |
A. | Designation of Committee. The Board may designate one or more committees of the Board and delegate to it responsibility and authority for any matter. |
1. | Committee Composition. A Board committee may consist of only one director. |
2. | Alternate Committee Members. The Board may designate one or more directors as alternate members of any committee, who may replace absent or disqualified directors at any meeting of that committee, subject to any limitations imposed by the Board. |
3. | Quorum. The presence of directors constituting a majority of the Board committee constitutes a quorum for the transaction of business by the committee. |
4. | Majority Vote. Any action to be taken by a Board committee requires the vote of a majority of the directors of the committee. |
5. | Reports. Each committee of the Board will report its activities to the full Board on a regular basis. |
6. | Removal. Any committee member may be removed, or any authority granted to a committee may be revoked (subject to applicable law), at any time for any reason by the Board. |
7. | Committee Authority. To the extent provided in any resolution of the Board, any committee of the Board has and may exercise all of the authority of the full Board. |
8. | Committee Rules of Procedure. Each committee of the Board may fix its own rules of procedure, subject to these Bylaws or resolution of the Board, and will hold its meetings in accordance with those rules. |
B. | The current standing committees of the Board are the Audit Committee; the Compensation, Nominating, and Governance Committee; and the Risk and Compliance Committee. |
1. | Audit Committee. The Audit Committee has and may exercise the powers, authority, and responsibilities that are normally appropriate for the functions of an audit committee. |
2. | Compensation, Nominating, and Governance Committee. The Compensation Committee has and may exercise the powers, authority, and responsibilities as delegated to it by the Board. |
3. | Risk and Compliance Committee. The Risk and Compliance Committee has and may exercise the powers, authority, and responsibilities as delegated to it by the Board. |
A. | Officer Positions. The officers of the Corporation are the Chief Executive Officer, President, Chief Financial Officer, Corporate Treasurer, Secretary, any Assistant Secretary, General Counsel, any Vice President, and any other position with the designation “officer” in the title. |
B. | Additional Officer Positions. The Board may create additional officer positions beyond those listed in Section IV.A above. |
C. | Appointment and Removal of Officers. The Board will appoint any and all officers of the Corporation, and only the Board may remove an officer from the office he or she holds, except as provided below. |
1. | The Board may delegate authority to the director that is also the Chief Executive Officer to appoint and remove any officer of the Corporation. |
2. | Each such appointment or removal by the director that is also the Chief Executive Officer is deemed to be the act of the full Board. |
D. | Number of Offices. A person may hold any number of offices. |
E. | Officer Responsibilities and Authorities. Each officer of the Corporation has and must exercise the powers and authorities as generally pertain to, or are necessarily incident to, the office(s) he or she holds, subject to the direction of the Board and/or the Chief Executive Officer of the Corporation. |
1. | Specific Officer Responsibilities and Authorities. The following officers have the responsibilities and authorities indicated: |
a. | The Chief Executive Officer of the Corporation is its principal executive officer, and subject to the direction of the Board, the Chief Executive Officer: |
i. | Has full responsibility and authority for, and must exercise, direct charge of, and general supervision over, the business and affairs of the Corporation; |
ii. | Has any and all other powers and must perform such other duties, as may be specifically assigned to him or her from time to time by the Board; and |
iii. | Is fully responsible for carrying into effect all resolutions and orders of the Board, and may delegate to any other officer(s) or employee(s) of the Corporation any of his powers and his duties. |
b. | The Chief Financial Officer of the Corporation has full responsibility and authority for the financial records, books, and accounts of the Corporation. |
c. | The President of the Corporation has full responsibility and authority for the global automotive services (including insurance) business of the Corporation. |
d. | The Corporate Treasurer of the Corporation has custody of the Corporation’s funds and securities and is fully responsible for maintaining accounts in the name of the Corporation for the deposit of funds to the Corporation’s credit; for the disbursement of funds on behalf of the Corporation; and maintaining accurate accounts of receipts and disbursements in the Corporation’s books. |
e. | The General Counsel of the Corporation has full responsibility and authority for all legal affairs of the Corporation, subject to applicable rules of professional conduct for lawyers. |
f. | The Secretary of the Corporation will attend all meetings of the common stockholders and of the Board and its committees and will record all votes and the minutes of all meetings. |
i. | The Secretary will give notice of all meetings of the stockholders and of the Board and its committees. |
ii. | The Secretary will perform such other duties as may be assigned to him or her from time to time by the Board or the Chief Executive Officer. |
2. | Reservation of Authorities. Any power or authority not specifically reserved to the Board or the common stockholders under these Bylaws, the Corporation’s Amended and Restated Certificate of Incorporation, the laws of the State of Delaware, or resolution of the Board is within the powers and authorities of each of the Chief Executive Officer and any other applicable officer(s) of the Corporation. |
F. | Conflicts of Interest. If any officer of the Corporation has an actual or potential conflict of interest as against the Corporation (including vis-à-vis any stockholder), he or she will address the conflict in accordance with applicable legal requirements. |
A. | Offices. The Corporation’s principal office is located at 200 Renaissance Center, Detroit, MI 48265, or any other location as determined by the Board, and its registered office is located at 1209 Orange Street, Wilmington, New Castle County, Delaware. |
1. | Registered Agent The name of the Corporation’s registered agent is The Corporation Trust Company. |
2. | Location of Corporate Books. The books of the Corporation may be kept inside or outside the State of Delaware. |
B. | Seal. The corporate seal will have inscribed upon it the name of the Corporation, the year of its organization, and the words “Corporate Seal” and “Delaware”. |
C. | Fiscal Year. The fiscal year of the Corporation begins on January 1st and ends on December 31st in each year. |
A. | Derivative Actions. Any derivative action or proceeding brought on behalf of the Corporation. |
B. | Fiduciary Duty Claims. Any action asserting a claim of breach of fiduciary duty to the Corporation or its stockholders owed by any director, officer, or other employee of the Corporation. |
C. | Claims Under Delaware Law and Organizational Documents. Any action asserting a claim arising under the Delaware General Corporation Law, the Corporation’s Amended and Restated Certificate of Incorporation, and/or these Bylaws. |
D. | Internal Affairs Doctrine. Any other action asserting a claim governed by the internal affairs doctrine. |
A. | Amendments by the Board. The Board may change, or repeal these Bylaws, or adopt additional bylaws. |
C. | Amendment of Exhibit F. Notwithstanding the foregoing, |
1. | Exhibit F of these Bylaws may not be changed or repealed in any manner or through any means without the consent of Eligible Holders (as defined in Exhibit F) holding a majority of the then outstanding Registrable Securities (as defined in Exhibit F), and no change or repeal of Exhibit F will be effective against an Eligible Holder without such Eligible Holder’s consent if it reduces or limits (other than in an immaterial respect) the rights of such Eligible Holder or otherwise disadvantages (other than in an immaterial respect) such Eligible Holder. |
2. | No change or repeal, whether by merger, consolidation, combination, reclassification or otherwise, of Section VII.C.1 above may be made without the prior consent of Eligible Holders (as defined in Exhibit F) holding a majority of the then outstanding Registrable Securities (as defined in Exhibit F), and no change or repeal of Section VII.C.1 above or this Section VII.C.2 will be effective against an Eligible Holder without such Eligible Holder’s consent if it reduces or limits (other than in an immaterial respect) the rights of such Eligible Holder or otherwise disadvantages (other than in an immaterial respect) such Eligible Holder. |
Nine months ended September 30, | Year ended December, | |||||||||||||||||||
($ in millions) | 2015 (a) | 2014 (a) | 2013 (a) | 2012 (a) | 2011 (a) | 2010 (a) | ||||||||||||||
Earnings | ||||||||||||||||||||
Consolidated net income (loss) from continuing operations | $ | 621 | $ | 925 | $ | 416 | $ | 1,370 | $ | (219 | ) | $ | (334 | ) | ||||||
Income tax expense (benefit) from continuing operations | 341 | 321 | (59 | ) | (856 | ) | 42 | 97 | ||||||||||||
Equity-method investee earnings | (48 | ) | (18 | ) | (15 | ) | (6 | ) | (7 | ) | (8 | ) | ||||||||
Minority interest expense | — | — | — | 1 | 1 | 1 | ||||||||||||||
Consolidated income (loss) from continuing operations before income taxes, minority interest, and income or loss from equity investees | 914 | 1,228 | 342 | 509 | (183 | ) | (244 | ) | ||||||||||||
Fixed charges | 1,838 | 2,826 | 3,344 | 4,031 | 4,668 | 4,880 | ||||||||||||||
Earnings available for fixed charges | $ | 2,752 | $ | 4,054 | $ | 3,686 | $ | 4,540 | $ | 4,485 | $ | 4,636 | ||||||||
Fixed charges | ||||||||||||||||||||
Interest, discount, and issuance expense on debt | $ | 1,825 | $ | 2,810 | $ | 3,330 | $ | 4,014 | $ | 4,652 | $ | 4,862 | ||||||||
Portion of rentals representative of the interest factor | 13 | 16 | 15 | 17 | 16 | 18 | ||||||||||||||
Total fixed charges | 1,838 | 2,826 | 3,345 | 4,031 | 4,668 | 4,880 | ||||||||||||||
Preferred dividend requirements (b) | 2,100 | 361 | 1,049 | 801 | 763 | 1,860 | ||||||||||||||
Total fixed charges and preferred dividend requirements | $ | 3,938 | $ | 3,187 | $ | 4,394 | $ | 4,832 | $ | 5,431 | $ | 6,740 | ||||||||
Ratio of earnings to fixed charges (c) | 1.50 | 1.43 | 1.10 | 1.13 | 0.96 | 0.95 | ||||||||||||||
Ratio of earnings to fixed charges and preferred dividend requirements (d) | 0.70 | 1.27 | 0.84 | 0.94 | 0.83 | 0.69 |
(a) | During 2013 and 2012, certain disposal groups met the criteria to be presented as discontinued operations. For all periods presented, the operating results for these operations have been removed from continuing operations. 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 the nine months ended September 30, 2015 includes a $1,185 million reduction (increase) to retained earnings (accumulated deficit) related to a redemption of our Series G Preferred Stock in April 2015, and a $22 million reduction (increase) to retained earnings (accumulated deficit) related to a repurchase of our Series A Preferred Shares in May 2015. Amount for 2013 includes a $240 million reduction (increase) to retained earnings (accumulated deficit) related to a repurchase of mandatorily convertible preferred stock held by U.S. Department of Treasury and elimination of share adjustment right on November 20, 2013. Amount for 2010 includes a $616 million reduction (increase) 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 years ended December 31, 2011 and 2010. Earnings available for fixed charges for the years ended December 31, 2011 and 2010 were inadequate to cover fixed charges. The deficient amounts for the ratio were $183 million and $244 million for the years ended December 31, 2011 and 2010, respectively. |
(d) | The ratio indicates a less than one-to-one coverage for the nine months ended September 30, 2015, and the years ended December 31, 2013, 2012, 2011, and 2010. Earnings available for fixed charges and preferred dividend requirements for the nine months ended September 30, 2015, and the years ended December 31, 2013, 2012, 2011, and 2010 were inadequate to cover total fixed charges and preferred dividend requirements. The deficient amounts for the ratio were $1,186 million, $708 million, $292 million, $946 million, and $2,104 million for the nine months ended September 30, 2015, and the years ended December 31, 2013, 2012, 2011, and 2010, respectively. |
1. | I have reviewed this report on Form 10-Q of Ally Financial Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ JEFFREY J. BROWN | |
Jeffrey J. Brown Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Ally Financial Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ CHRISTOPHER A. HALMY | |
Christopher A. Halmy Chief Financial Officer |
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/S/ JEFFREY J. BROWN | |
Jeffrey J. Brown | |
Chief Executive Officer | |
October 29, 2015 | |
/S/ CHRISTOPHER A. HALMY | |
Christopher A. Halmy | |
Chief Financial Officer | |
October 29, 2015 |
Investment Securities (Tables) |
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Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities Reconciliation [Table Text Block] | Our portfolio of securities includes bonds, equity securities, asset- and mortgage-backed securities, and other investments. The cost, fair value, and gross unrealized gains and losses on available-for-sale securities were as follows.
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Investments Classified by Contractual Maturity Date [Table Text Block] | The maturity distribution of available-for-sale debt securities outstanding is summarized in the following tables. Prepayments may cause actual maturities to differ from contractual maturities.
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Investment Income [Table Text Block] | The following table presents interest and dividends on available-for-sale securities.
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Schedule of Realized Gain (Loss) [Table Text Block] | The following table presents gross gains and losses realized upon the sales of available-for-sale securities and other-than-temporary impairment.
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Schedule of Unrealized Loss on Investments [Table Text Block] | The table below summarizes available-for-sale securities in an unrealized loss position in accumulated other comprehensive income. Based on the methodology that was applied to these securities, we believe that the unrealized losses relate to factors other than credit losses in the current market environment. As of September 30, 2015, we did not have the intent to sell the debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As of September 30, 2015, we had the ability and intent to hold equity securities with an unrealized loss position in accumulated other comprehensive income, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss position in accumulated other comprehensive income are not considered to be other-than-temporarily impaired at September 30, 2015. Refer to Note 1 to the Consolidated Financial Statements in our 2014 Annual Report on Form 10-K for additional information related to investment securities and our methodology for evaluating potential other-than-temporary impairments.
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Derivative Instruments and Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Amounts of Derivative Instruments Reported On Our Condensed Consolidated Balance Sheet [Table Text Block] | The following table summarizes the fair value amounts of derivative instruments reported on our Condensed Consolidated Balance Sheet. The fair value amounts are presented on a gross basis, are segregated by derivatives that are designated and qualifying as hedging instruments or those that are not, and are further segregated by type of contract within those two categories. Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. In our view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market rate fluctuations and counterparty credit risk.
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Gains and Losses On Derivative Instruments Reported in Statement of Comprehensive Income [Table Text Block] | The following table summarizes the location and amounts of gains and losses on derivative instruments reported in our Condensed Consolidated Statement of Comprehensive Income.
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Derivative Instruments Used in Cash Flow and Net Investment Hedge Accounting Relationships [Table Text Block] | The following table summarizes derivative instruments used in cash flow and net investment hedge accounting relationships.
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Long-Term Debt (Tables) |
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Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt Portfolio [Table Text Block] | The following table presents the composition of our long-term debt portfolio.
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Scheduled Remaining Maturity of Long-term Debt [Table Text Block] | The following table presents the scheduled remaining maturity of long-term debt, assuming no early redemptions will occur. The actual payment of secured debt may vary based on the payment activity of the related pledged assets.
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Pledged assets for the payment of the related secured borrowings and repurchase agreements [Table Text Block] | The following summarizes assets restricted as collateral for the payment of the related debt obligation primarily arising from securitization transactions accounted for as secured borrowings and repurchase agreements.
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Schedule Of Committed Funding Facilities [Table Text Block] |
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