Parent and Guarantor Consolidating Financial Statements

Certain of our senior notes issued by the parent are guaranteed by 100% directly owned subsidiaries of Ally (the Guarantors). As of December 31, 2016, the Guarantors include Ally US LLC and IB Finance Holding Company, LLC (IB Finance), each of which fully and unconditionally guarantee the senior notes on a joint and several basis.

The following financial statements present condensed consolidating financial data for (i) Ally Financial Inc. (on a parent company-only basis); (ii) the Guarantors; (iii) the nonguarantor subsidiaries (all other subsidiaries); and (iv) an elimination column for adjustments to arrive at (v) the information for the parent company, the Guarantors, and nonguarantors on a consolidated basis.

Investments in subsidiaries are accounted for by the parent company and the Guarantors using the equity-method for this presentation. Results of operations of subsidiaries are therefore classified in the parent company’s and Guarantors’ investment in subsidiaries accounts. The elimination entries set forth in the following condensed consolidating financial statements eliminate distributed and undistributed income of subsidiaries, investments in subsidiaries, and intercompany balances and transactions between the parent, the Guarantors, and nonguarantors.

Condensed Consolidating Statements of Comprehensive Income



Year ended December 31, 2016 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Financing (loss) revenue and other interest income
Interest and fees on finance receivables and loans	$	(104	)	$	—		$	5,266		$	—		$	5,162
Interest and fees on finance receivables and loans — intercompany	11			—			8			(19		)	—
Interest and dividends on investment securities and other earning assets	—			—			421			(3		)	418
Interest on cash and cash equivalents	5			—			9			—			14
Interest-bearing cash — intercompany	—			—			9			(9		)	—
Operating leases	17			—			2,694			—			2,711
Total financing (loss) revenue and other interest income	(71		)	—			8,407			(31		)	8,305
Interest expense
Interest on deposits	8			—			822			—			830
Interest on short-term borrowings	40			—			17			—			57
Interest on long-term debt	1,161			—			581			—			1,742
Interest on intercompany debt	20			—			11			(31		)	—
Total interest expense	1,229			—			1,431			(31		)	2,629
Net depreciation expense on operating lease assets	14			—			1,755			—			1,769
Net financing revenue	(1,314		)	—			5,221			—			3,907
Cash dividends from subsidiaries
Nonbank subsidiaries	965			—			—			(965		)	—
Other revenue
Insurance premiums and service revenue earned	—			—			945			—			945
(Loss) gain on mortgage and automotive loans, net	(11		)	—			22			—			11
Loss on extinguishment of debt	(3		)	—			(2		)	—			(5		)
Other gain on investments, net	—			—			176			9			185
Other income, net of losses	1,253			—			937			(1,796		)	394
Total other revenue	1,239			—			2,078			(1,787		)	1,530
Total net revenue	890			—			7,299			(2,752		)	5,437
Provision for loan losses	408			—			509			—			917
Noninterest expense
Compensation and benefits expense	573			—			419			—			992
Insurance losses and loss adjustment expenses	—			—			342			—			342
Other operating expenses	1,261			—			2,130			(1,786		)	1,605
Total noninterest expense	1,834			—			2,891			(1,786		)	2,939
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries	(1,352		)	—			3,899			(966		)	1,581
Income tax (benefit) expense from continuing operations	(279		)	(82		)	831			—			470
Net (loss) income from continuing operations	(1,073		)	82			3,068			(966		)	1,111
Loss from discontinued operations, net of tax	(39		)	—			(5		)	—			(44		)
Undistributed income (loss) of subsidiaries
Bank subsidiary	1,273			1,273			—			(2,546		)	—
Nonbank subsidiaries	906			(2		)	—			(904		)	—
Net income	1,067			1,353			3,063			(4,416		)	1,067
Other comprehensive loss, net of tax	(110		)	(63		)	(106		)	169			(110		)
Comprehensive income	$	957		$	1,290		$	2,957		$	(4,247	)	$	957



Year ended December 31, 2015 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Financing (loss) revenue and other interest income
Interest and fees on finance receivables and loans	$	(83	)	$	—		$	4,653		$	—		$	4,570
Interest and fees on finance receivables and loans — intercompany	17			—			24			(41		)	—
Interest on loans held-for-sale	—			—			40			—			40
Interest and dividends on investment securities and other earning assets	—			—			381			—			381
Interest on cash and cash equivalents	1			—			7			—			8
Interest-bearing cash — intercompany	—			—			8			(8		)	—
Operating leases	9			—			3,389			—			3,398
Total financing (loss) revenue and other interest income	(56		)	—			8,502			(49		)	8,397
Interest expense
Interest on deposits	10			—			708			—			718
Interest on short-term borrowings	40			—			9			—			49
Interest on long-term debt	1,121			—			541			—			1,662
Interest on intercompany debt	32			—			17			(49		)	—
Total interest expense	1,203			—			1,275			(49		)	2,429
Net depreciation expense on operating lease assets	7			—			2,242			—			2,249
Net financing revenue	(1,266		)	—			4,985			—			3,719
Cash dividends from subsidiaries
Bank subsidiaries	525			525			—			(1,050		)	—
Nonbank subsidiaries	1,123			—			—			(1,123		)	—
Other revenue
Insurance premiums and service revenue earned	—			—			940			—			940
(Loss) gain on mortgage and automotive loans, net	(9		)	—			54			—			45
Loss on extinguishment of debt	(355		)	—			(2		)	—			(357		)
Other gain on investments, net	—			—			155			—			155
Other income, net of losses	1,373			—			1,373			(2,387		)	359
Total other revenue	1,009			—			2,520			(2,387		)	1,142
Total net revenue	1,391			525			7,505			(4,560		)	4,861
Provision for loan losses	157			—			550			—			707
Noninterest expense
Compensation and benefits expense	571			—			842			(450		)	963
Insurance losses and loss adjustment expenses	—			—			293			—			293
Other operating expenses	1,247			—			2,195			(1,937		)	1,505
Total noninterest expense	1,818			—			3,330			(2,387		)	2,761
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries	(584		)	525			3,625			(2,173		)	1,393
Income tax (benefit) expense from continuing operations	(267		)	—			763			—			496
Net (loss) income from continuing operations	(317		)	525			2,862			(2,173		)	897
Income from discontinued operations, net of tax	356			—			36			—			392
Undistributed income (loss) of subsidiaries
Bank subsidiary	581			581			—			(1,162		)	—
Nonbank subsidiaries	669			(1		)	—			(668		)	—
Net income	1,289			1,105			2,898			(4,003		)	1,289
Other comprehensive loss, net of tax	(165		)	(43		)	(172		)	215			(165		)
Comprehensive income	$	1,124		$	1,062		$	2,726		$	(3,788	)	$	1,124



Year ended December 31, 2014 ($ in millions)	Parent			Guarantors			Nonguarantors		Consolidating adjustments			Ally consolidated
Financing revenue and other interest income
Interest and fees on finance receivables and loans	$	(14	)	$	—		$	4,471	$	—		$	4,457
Interest and fees on finance receivables and loans — intercompany	37			—			82		(119		)	—
Interest on loans held-for-sale	—			—			1		—			1
Interest and dividends on investment securities and other earning assets	—			—			367		—			367
Interest on cash and cash equivalents	1			—			7		—			8
Interest-bearing cash — intercompany	—			—			6		(6		)	—
Operating leases	269			—			3,289		—			3,558
Total financing revenue and other interest income	293			—			8,223		(125		)	8,391
Interest expense
Interest on deposits	15			—			649		—			664
Interest on short-term borrowings	43			—			9		—			52
Interest on long-term debt	1,492			—			575		—			2,067
Interest on intercompany debt	88			—			37		(125		)	—
Total interest expense	1,638			—			1,270		(125		)	2,783
Net depreciation expense on operating lease assets	161			—			2,072		—			2,233
Net financing revenue	(1,506		)	—			4,881		—			3,375
Cash dividends from subsidiaries
Bank subsidiaries	1,800			1,800			—		(3,600		)	—
Nonbank subsidiaries	651			—			—		(651		)	—
Other revenue
Insurance premiums and service revenue earned	—			—			979		—			979
(Loss) gain on mortgage and automotive loans, net	(5		)	—			12		—			7
Loss on extinguishment of debt	(202		)	—			—		—			(202		)
Other gain on investments, net	—			—			181		—			181
Other income, net of losses	1,279			—			1,299		(2,267		)	311
Total other revenue	1,072			—			2,471		(2,267		)	1,276
Total net revenue	2,017			1,800			7,352		(6,518		)	4,651
Provision for loan losses	250			—			207		—			457
Noninterest expense
Compensation and benefits expense	586			—			793		(432		)	947
Insurance losses and loss adjustment expenses	—			—			410		—			410
Other operating expenses	1,267			—			2,159		(1,835		)	1,591
Total noninterest expense	1,853			—			3,362		(2,267		)	2,948
(Loss) income from continuing operations before income tax (benefit) expense and undistributed (loss) income of subsidiaries	(86		)	1,800			3,783		(4,251		)	1,246
Income tax (benefit) expense from continuing operations	(457		)	—			778		—			321
Net income from continuing operations	371			1,800			3,005		(4,251		)	925
Income from discontinued operations, net of tax	193			—			32		—			225
Undistributed (loss) income of subsidiaries
Bank subsidiary	(680		)	(680		)	—		1,360			—
Nonbank subsidiaries	1,266			(1		)	—		(1,265		)	—
Net income	1,150			1,119			3,037		(4,156		)	1,150
Other comprehensive income, net of tax	210			188			212		(400		)	210
Comprehensive income	$	1,360		$	1,307		$	3,249	$	(4,556	)	$	1,360

Condensed Consolidating Balance Sheet



December 31, 2016 ($ in millions)	Parent (a)			Guarantors		Nonguarantors (a)			Consolidating adjustments			Ally consolidated
Assets
Cash and cash equivalents
Noninterest-bearing	$	720		$	—	$	827		$	—		$	1,547
Interest-bearing	100			—		4,287			—			4,387
Interest-bearing — intercompany	—			—		401			(401		)	—
Total cash and cash equivalents	820			—		5,515			(401		)	5,934
Trading securities	—			—		82			(82		)	—
Available-for-sale securities	—			—		19,253			(327		)	18,926
Held-to-maturity securities	—			—		839			—			839
Finance receivables and loans, net
Finance receivables and loans, net	4,705			—		114,239			—			118,944
Intercompany loans to
Bank subsidiary	1,125			—		—			(1,125		)	—
Nonbank subsidiaries	1,779			—		626			(2,405		)	—
Allowance for loan losses	(115		)	—		(1,029		)	—			(1,144		)
Total finance receivables and loans, net	7,494			—		113,836			(3,530		)	117,800
Investment in operating leases, net	42			—		11,428			—			11,470
Intercompany receivables from
Bank subsidiary	299			—		—			(299		)	—
Nonbank subsidiaries	107			—		67			(174		)	—
Investment in subsidiaries
Bank subsidiary	17,727			17,727		—			(35,454		)	—
Nonbank subsidiaries	10,318			—		—			(10,318		)	—
Premiums receivable and other insurance assets	—			—		1,936			(31		)	1,905
Other assets	4,347			—		5,085			(2,578		)	6,854
Total assets	$	41,154		$	17,727	$	158,041		$	(53,194	)	$	163,728
Liabilities
Deposit liabilities
Noninterest-bearing	$	—		$	—	$	84		$	—		$	84
Interest-bearing	167			—		78,771			—			78,938
Total deposit liabilities	167			—		78,855			—			79,022
Short-term borrowings	3,622			—		9,051			—			12,673
Long-term debt	21,798			—		32,330			—			54,128
Intercompany debt to
Bank subsidiary	330			—		—			(330		)	—
Nonbank subsidiaries	1,027			—		2,903			(3,930		)	—
Intercompany payables to
Nonbank subsidiaries	153			—		351			(504		)	—
Interest payable	253			—		98			—			351
Unearned insurance premiums and service revenue	—			—		2,500			—			2,500
Accrued expenses and other liabilities	487			—		3,911			(2,661		)	1,737
Total liabilities	27,837			—		129,999			(7,425		)	150,411
Total equity	13,317			17,727		28,042			(45,769		)	13,317
Total liabilities and equity	$	41,154		$	17,727	$	158,041		$	(53,194	)	$	163,728


(a)	Amounts presented are based upon the legal transfer of the underlying assets to VIEs in order to reflect legal ownership.



December 31, 2015 ($ in millions)	Parent (a)			Guarantors		Nonguarantors (a)			Consolidating adjustments			Ally consolidated
Assets
Cash and cash equivalents
Noninterest-bearing	$	1,234		$	—	$	914		$	—		$	2,148
Interest-bearing	401			—		3,831			—			4,232
Interest-bearing — intercompany	—			—		850			(850		)	—
Total cash and cash equivalents	1,635			—		5,595			(850		)	6,380
Available-for-sale securities	—			—		17,157			—			17,157
Loans held-for-sale, net	—			—		105			—			105
Finance receivables and loans, net
Finance receivables and loans, net	2,636			—		108,964			—			111,600
Intercompany loans to
Bank subsidiary	600			—		—			(600		)	—
Nonbank subsidiaries	3,277			—		559			(3,836		)	—
Allowance for loan losses	(72		)	—		(982		)	—			(1,054		)
Total finance receivables and loans, net	6,441			—		108,541			(4,436		)	110,546
Investment in operating leases, net	81			—		16,190			—			16,271
Intercompany receivables from
Bank subsidiary	186			—		—			(186		)	—
Nonbank subsidiaries	259			—		282			(541		)	—
Investment in subsidiaries
Bank subsidiary	16,496			16,496		—			(32,992		)	—
Nonbank subsidiaries	10,902			11		—			(10,913		)	—
Premiums receivable and other insurance assets	—			—		1,827			(26		)	1,801
Other assets	4,785			—		4,488			(2,952		)	6,321
Total assets	$	40,785		$	16,507	$	154,185		$	(52,896	)	$	158,581
Liabilities
Deposit liabilities
Noninterest-bearing	$	—		$	—	$	89		$	—		$	89
Interest-bearing	229			—		66,160			—			66,389
Total deposit liabilities	229			—		66,249			—			66,478
Short-term borrowings	3,453			—		4,648			—			8,101
Long-term debt	21,048			—		45,186			—			66,234
Intercompany debt to
Nonbank subsidiaries	1,409			—		3,877			(5,286		)	—
Intercompany payables to
Bank subsidiary	142			—		—			(142		)	—
Nonbank subsidiaries	420			—		191			(611		)	—
Interest payable	258			—		92			—			350
Unearned insurance premiums and service revenue	—			—		2,434			—			2,434
Accrued expenses and other liabilities	387			82		4,028			(2,952		)	1,545
Total liabilities	27,346			82		126,705			(8,991		)	145,142
Total equity	13,439			16,425		27,480			(43,905		)	13,439
Total liabilities and equity	$	40,785		$	16,507	$	154,185		$	(52,896	)	$	158,581


(a)	Amounts presented are based upon the legal transfer of the underlying assets to VIEs in order to reflect legal ownership.

Condensed Consolidating Statement of Cash Flows



Year ended December 31, 2016 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash provided by operating activities	$	241		$	6		$	5,383		$	(1,063	)	$	4,567
Investing activities
Purchases of available-for-sale securities	—			—			(16,031		)	—			(16,031		)
Proceeds from sales of available-for-sale securities	—			—			11,036			—			11,036
Proceeds from maturities and repayments of available-for-sale securities	—			—			3,379			—			3,379
Purchases of held-to-maturity securities	—			—			(841		)	—			(841		)
Purchases of loans held-for-investment	(4		)	—			(3,855		)	—			(3,859		)
Proceeds from sales of finance receivables and loans originated as held-for-investment	—			—			4,285			—			4,285
Originations and repayments of loans held-for-investment and other	2,013			—			(10,839		)	—			(8,826		)
Net change in loans — intercompany	877			—			(67		)	(810		)	—
Purchases of operating lease assets	—			—			(3,274		)	—			(3,274		)
Disposals of operating lease assets	25			—			6,279			—			6,304
Acquisitions, net of cash acquired	(309		)	—			—			—			(309		)
Capital contributions to subsidiaries	(3,908		)	—			—			3,908			—
Returns of contributed capital	3,678			8			—			(3,686		)	—
Net change in restricted cash	(120		)	—			512			—			392
Net change in nonmarketable equity investments	—			—			(628		)	—			(628		)
Other, net	(206		)	—			(197		)	91			(312		)
Net cash provided by (used in) investing activities	2,046			8			(10,241		)	(497		)	(8,684		)
Financing activities
Net change in short-term borrowings — third party	169			—			4,395			—			4,564
Net (decrease) increase in deposits	(61		)	—			12,569			—			12,508
Proceeds from issuance of long-term debt — third party	979			—			13,176			—			14,155
Repayments of long-term debt — third party	(2,662		)	—			(23,750		)	—			(26,412		)
Net change in debt — intercompany	(382		)	—			(877		)	1,259			—
Redemption of preferred stock	(696		)	—			—			—			(696		)
Repurchase of common stock	(341		)	—			—			—			(341		)
Dividends paid — third party	(108		)	—			—			—			(108		)
Dividends paid and returns of contributed capital — intercompany	—			(14		)	(4,644		)	4,658			—
Capital contributions from parent	—			—			3,908			(3,908		)	—
Net cash (used) in provided by financing activities	(3,102		)	(14		)	4,777			2,009			3,670
Effect of exchange-rate changes on cash and cash equivalents	—			—			1			—			1
Net decrease in cash and cash equivalents	(815		)	—			(80		)	449			(446		)
Cash and cash equivalents at beginning of year	1,635			—			5,595			(850		)	6,380
Cash and cash equivalents at end of year	$	820		$	—		$	5,515		$	(401	)	$	5,934



Year ended December 31, 2015 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash provided by operating activities	$	370		$	525		$	6,390		$	(2,174	)	$	5,111
Investing activities
Purchases of available-for-sale securities	—			—			(12,250		)	—			(12,250		)
Proceeds from sales of available-for-sale securities	—			—			6,874			—			6,874
Proceeds from maturities and repayments of available-for-sale securities	—			—			4,255			—			4,255
Purchases of loans held-for-investment	(169		)	—			(4,332		)	—			(4,501		)
Proceeds from sales of finance receivables and loans originated as held-for-investment	—			—			3,197			—			3,197
Originations and repayments of loans held-for-investment and other	1,954			—			(11,298		)	—			(9,344		)
Net change in loans — intercompany	240			—			1,211			(1,451		)	—
Purchases of operating lease assets	(94		)	—			(4,591		)	—			(4,685		)
Disposals of operating lease assets	7			—			5,539			—			5,546
Capital contributions to subsidiaries	(796		)	(1		)	—			797			—
Returns of contributed capital	1,444			—			—			(1,444		)	—
Proceeds from sale of business units, net	1,049			—			—			—			1,049
Net change in restricted cash	(7		)	—			271			—			264
Net change in nonmarketable equity investments	—			—			(147		)	—			(147		)
Other, net	(47		)	—			42			—			(5		)
Net cash provided by (used in) investing activities	3,581			(1		)	(11,229		)	(2,098		)	(9,747		)
Financing activities
Net change in short-term borrowings — third party	115			—			913			—			1,028
Net (decrease) increase in deposits	(91		)	—			8,338			—			8,247
Proceeds from issuance of long-term debt — third party	5,428			—			25,237			—			30,665
Repayments of long-term debt — third party	(5,931		)	—			(25,419		)	—			(31,350		)
Net change in debt — intercompany	(977		)	—			(240		)	1,217			—
Repurchase and redemption of preferred stock	(559		)	—			—			—			(559		)
Repurchase of common stock	(16		)	—			—			—			(16		)
Dividends paid — third party	(2,571		)	—			—			—			(2,571		)
Dividends paid and returns of contributed capital — intercompany	—			(525		)	(3,092		)	3,617			—
Capital contributions from parent	—			1			796			(797		)	—
Net cash (used in) provided by financing activities	(4,602		)	(524		)	6,533			4,037			5,444
Effect of exchange-rate changes on cash and cash equivalents	—			—			(4		)	—			(4		)
Net (decrease) increase in cash and cash equivalents	(651		)	—			1,690			(235		)	804
Cash and cash equivalents at beginning of year	2,286			—			3,905			(615		)	5,576
Cash and cash equivalents at end of year	$	1,635		$	—		$	5,595		$	(850	)	$	6,380



Year ended December 31, 2014 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash provided by operating activities	$	330		$	1,789		$	5,533		$	(4,249	)	$	3,403
Investing activities
Purchases of available-for-sale securities	—			—			(5,417		)	—			(5,417		)
Proceeds from sales of available-for-sale securities	—			—			4,277			(17		)	4,260
Proceeds from maturities and repayments of available-for-sale securities	—			—			2,657			—			2,657
Purchases of loans held-for-investment	—			—			(894		)	17			(877		)
Proceeds from sales of finance receivables and loans originated as held-for-investment	—			—			2,592			—			2,592
Originations and repayments of loans held-for-investment and other	1,900			—			(6,047		)	—			(4,147		)
Net change in loans — intercompany	1,428			—			154			(1,582		)	—
Purchases of operating lease assets	(2,337		)	—			(7,547		)	—			(9,884		)
Disposals of operating lease assets	3,053			—			2,807			—			5,860
Capital contributions to subsidiaries	(1,179		)	—			—			1,179			—
Returns of contributed capital	1,422			—			—			(1,422		)	—
Proceeds from sale of business units, net	46			—			1			—			47
Net change in restricted cash	—			—			1,625			—			1,625
Net change in nonmarketable equity investments	—			—			66			—			66
Other, net	(29		)	—			35			—			6
Net cash provided by (used in) investing activities	4,304			—			(5,691		)	(1,825		)	(3,212		)
Financing activities
Net change in short-term borrowings — third party	113			—			(1,607		)	—			(1,494		)
Net (decrease) increase in deposits	(121		)	—			4,972			—			4,851
Proceeds from issuance of long-term debt — third party	3,132			—			24,060			—			27,192
Repayments of long-term debt — third party	(8,186		)	—			(22,240		)	—			(30,426		)
Net change in debt — intercompany	52			—			(1,428		)	1,376			—
Dividends paid — third party	(268		)	—			—			—			(268		)
Dividends paid and returns of contributed capital — intercompany	—			(1,826		)	(3,846		)	5,672			—
Capital contributions from parent	—			—			1,179			(1,179		)	—
Net cash (used in) provided by financing activities	(5,278		)	(1,826		)	1,090			5,869			(145		)
Effect of exchange-rate changes on cash and cash equivalents	—			—			(1		)	—			(1		)
Net (decrease) increase in cash and cash equivalents	(644		)	(37		)	931			(205		)	45
Cash and cash equivalents at beginning of year	2,930			37			2,974			(410		)	5,531
Cash and cash equivalents at end of year	$	2,286		$	—		$	3,905		$	(615	)	$	5,576