Parent and Guarantor Condensed 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 March 31, 2017, 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



Three months ended March 31, 2017 ($ in millions)	Parent			Guarantors		Nonguarantors			Consolidating adjustments			Ally consolidated
Financing (loss) revenue and other interest income
Interest and fees on finance receivables and loans	$	(35	)	$	—	$	1,403		$	—		$	1,368
Interest and fees on finance receivables and loans — intercompany	4			—		3			(7		)	—
Interest and dividends on investment securities and other earning assets	—			—		135			(1		)	134
Interest on cash and cash equivalents	2			—		3			—			5
Interest-bearing cash — intercompany	—			—		1			(1		)	—
Operating leases	3			—		540			—			543
Total financing (loss) revenue and other interest income	(26		)	—		2,085			(9		)	2,050
Interest expense
Interest on deposits	1			—		230			—			231
Interest on short-term borrowings	17			—		10			—			27
Interest on long-term debt	281			—		143			—			424
Interest on intercompany debt	4			—		4			(8		)	—
Total interest expense	303			—		387			(8		)	682
Net depreciation expense on operating lease assets	2			—		387			—			389
Net financing revenue	(331		)	—		1,311			(1		)	979
Cash dividends from subsidiaries
Nonbank subsidiaries	41			—		—			(41		)	—
Other revenue
Insurance premiums and service revenue earned	—			—		241			—			241
(Loss) gain on mortgage and automotive loans, net	(2		)	—		16			—			14
Loss on extinguishment of debt	—			—		(1		)	—			(1		)
Other gain on investments, net	—			—		27			—			27
Other income, net of losses	268			—		224			(377		)	115
Total other revenue	266			—		507			(377		)	396
Total net revenue	(24		)	—		1,818			(419		)	1,375
Provision for loan losses	107			—		164			—			271
Noninterest expense
Compensation and benefits expense	122			—		163			—			285
Insurance losses and loss adjustment expenses	—			—		88			—			88
Other operating expenses	288			—		494			(377		)	405
Total noninterest expense	410			—		745			(377		)	778
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries	(541		)	—		909			(42		)	326
Income tax (benefit) expense from continuing operations	(134		)	—		247			—			113
Net (loss) income from continuing operations	(407		)	—		662			(42		)	213
Income (loss) from discontinued operations, net of tax	2			—		(1		)	—			1
Undistributed income of subsidiaries
Bank subsidiary	389			389		—			(778		)	—
Nonbank subsidiaries	230			—		—			(230		)	—
Net income	214			389		661			(1,050		)	214
Other comprehensive income, net of tax	20			5		19			(24		)	20
Comprehensive income	$	234		$	394	$	680		$	(1,074	)	$	234



Three months ended March 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	$	(38	)	$	—	$	1,273		$	—		$	1,235
Interest and fees on finance receivables and loans — intercompany	3			—		2			(5		)	—
Interest and dividends on investment securities and other earning assets	—			—		102			—			102
Interest on cash and cash equivalents	1			—		2			—			3
Interest-bearing cash — intercompany	—			—		2			(2		)	—
Operating leases	5			—		764			—			769
Total financing (loss) revenue and other interest income	(29		)	—		2,145			(7		)	2,109
Interest expense
Interest on deposits	2			—		191			—			193
Interest on short-term borrowings	10			—		3			—			13
Interest on long-term debt	289			—		153			—			442
Interest on intercompany debt	4			—		3			(7		)	—
Total interest expense	305			—		350			(7		)	648
Net depreciation expense on operating lease assets	4			—		506			—			510
Net financing revenue	(338		)	—		1,289			—			951
Cash dividends from subsidiaries
Nonbank subsidiaries	482			—		—			(482		)	—
Other revenue
Insurance premiums and service revenue earned	—			—		230			—			230
(Loss) gain on mortgage and automotive loans, net	(3		)	—		4			—			1
Loss on extinguishment of debt	(2		)	—		(2		)	—			(4		)
Other gain on investments, net	—			—		54			—			54
Other income, net of losses	374			—		217			(496		)	95
Total other revenue	369			—		503			(496		)	376
Total net revenue	513			—		1,792			(978		)	1,327
Provision for loan losses	60			—		160			—			220
Noninterest expense
Compensation and benefits expense	147			—		105			—			252
Insurance losses and loss adjustment expenses	—			—		73			—			73
Other operating expenses	340			—		542			(497		)	385
Total noninterest expense	487			—		720			(497		)	710
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries	(34		)	—		912			(481		)	397
Income tax (benefit) expense from continuing operations	(43		)	—		193			—			150
Net (loss) income from continuing operations	9			—		719			(481		)	247
Income (loss) from discontinued operations, net of tax	6			—		(3		)	—			3
Undistributed income (loss) of subsidiaries
Bank subsidiary	270			270		—			(540		)	—
Nonbank subsidiaries	(35		)	—		—			35			—
Net income	250			270		716			(986		)	250
Other comprehensive income, net of tax	146			84		151			(235		)	146
Comprehensive income	$	396		$	354	$	867		$	(1,221	)	$	396

Condensed Consolidating Balance Sheet



March 31, 2017 ($ in millions)	Parent (a)			Guarantors		Nonguarantors (a)			Consolidating adjustments			Ally consolidated
Assets
Cash and cash equivalents
Noninterest-bearing	$	690		$	—	$	823		$	—		$	1,513
Interest-bearing	800			—		1,989			—			2,789
Interest-bearing — intercompany	—			—		641			(641		)	—
Total cash and cash equivalents	1,490			—		3,453			(641		)	4,302
Available-for-sale securities	6			—		20,308			(6		)	20,308
Held-to-maturity securities	—			—		1,155			(51		)	1,104
Loans held-for-sale, net	—			—		1			—			1
Finance receivables and loans, net
Finance receivables and loans, net	4,864			—		114,138			—			119,002
Intercompany loans to
Bank subsidiary	425			—		—			(425		)	—
Nonbank subsidiaries	1,376			—		456			(1,832		)	—
Allowance for loan losses	(121		)	—		(1,034		)	—			(1,155		)
Total finance receivables and loans, net	6,544			—		113,560			(2,257		)	117,847
Investment in operating leases, net	35			—		10,426			—			10,461
Intercompany receivables from
Bank subsidiary	32			—		—			(32		)	—
Nonbank subsidiaries	46			—		255			(301		)	—
Investment in subsidiaries
Bank subsidiary	18,405			18,405		—			(36,810		)	—
Nonbank subsidiaries	9,680			—		—			(9,680		)	—
Premiums receivable and other insurance assets	—			—		1,974			(30		)	1,944
Other assets	4,275			—		4,764			(2,905		)	6,134
Total assets	$	40,513		$	18,405	$	155,896		$	(52,713	)	$	162,101
Liabilities
Deposit liabilities
Noninterest-bearing	$	—		$	—	$	102		$	—		$	102
Interest-bearing	85			—		84,299			—			84,384
Total deposit liabilities	85			—		84,401			—			84,486
Short-term borrowings	4,901			—		3,470			—			8,371
Long-term debt	20,156			—		30,905			—			51,061
Intercompany debt to
Bank subsidiary	51			—		—			(51		)	—
Nonbank subsidiaries	1,097			—		1,807			(2,904		)	—
Intercompany payables to
Bank subsidiary	127			—		—			(127		)	—
Nonbank subsidiaries	180			—		57			(237		)	—
Interest payable	231			—		151			—			382
Unearned insurance premiums and service revenue	—			—		2,514			—			2,514
Accrued expenses and other liabilities	320			—		4,506			(2,904		)	1,922
Total liabilities	27,148			—		127,811			(6,223		)	148,736
Total equity	13,365			18,405		28,085			(46,490		)	13,365
Total liabilities and equity	$	40,513		$	18,405	$	155,896		$	(52,713	)	$	162,101


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



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.

Condensed Consolidating Statement of Cash Flows



Three months ended March 31, 2017 ($ in millions)	Parent			Guarantors		Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(149	)	$	—	$	1,284		$	40		$	1,175
Investing activities
Purchases of available-for-sale securities	—			—		(2,833		)	—			(2,833		)
Proceeds from sales of available-for-sale securities	—			—		1,045			—			1,045
Proceeds from maturities and repayments of available-for-sale securities	—			—		589			—			589
Purchases of held-to-maturity securities	—			—		(215		)	—			(215		)
Proceeds from maturities and repayments of held-to-maturity securities	—			—		5			—			5
Net change in investment securities — intercompany	1			—		261			(262		)	—
Purchases of loans held-for-investment	(15		)	—		(390		)	—			(405		)
Proceeds from sales of finance receivables and loans originated as held-for-investment	—			—		1,164			—			1,164
Originations and repayments of loans held-for-investment and other	931			—		(1,145		)	(960		)	(1,174		)
Net change in loans — intercompany	1,146			—		170			(1,316		)	—
Purchases of operating lease assets	—			—		(893		)	—			(893		)
Disposals of operating lease assets	1			—		1,544			—			1,545
Capital contributions to subsidiaries	(83		)	—		—			83			—
Returns of contributed capital	645			—		—			(645		)	—
Net change in restricted cash	(27		)	—		385			(3		)	355
Net change in nonmarketable equity investments	—			—		213			—			213
Other, net	(26		)	—		58			(91		)	(59		)
Net cash provided by (used in) investing activities	2,573			—		(42		)	(3,194		)	(663		)
Financing activities
Net change in short-term borrowings — third party	1,278			—		(5,581		)	—			(4,303		)
Net (decrease) increase in deposits	(82		)	—		5,533			—			5,451
Proceeds from issuance of long-term debt — third party	330			—		3,196			962			4,488
Repayments of long-term debt — third party	(2,870		)	—		(4,703		)	—			(7,573		)
Net change in debt — intercompany	(203		)	—		(1,146		)	1,349			—
Repurchase of common stock	(169		)	—		—			—			(169		)
Dividends paid — third party	(38		)	—		—			—			(38		)
Dividends paid and returns of contributed capital — intercompany	—			—		(686		)	686			—
Capital contributions from parent	—			—		83			(83		)	—
Net cash used in financing activities	(1,754		)	—		(3,304		)	2,914			(2,144		)
Effect of exchange-rate changes on cash and cash equivalents	—			—		—			—			—
Net increase (decrease) in cash and cash equivalents	670			—		(2,062		)	(240		)	(1,632		)
Cash and cash equivalents at beginning of year	820			—		5,515			(401		)	5,934
Cash and cash equivalents at March 31,	$	1,490		$	—	$	3,453		$	(641	)	$	4,302



Three months ended March 31, 2016 ($ in millions)	Parent			Guarantors		Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(24	)	$	—	$	1,708		$	(482	)	$	1,202
Investing activities
Purchases of available-for-sale securities	—			—		(4,870		)	—			(4,870		)
Proceeds from sales of available-for-sale securities	—			—		4,175			—			4,175
Proceeds from maturities and repayments of available-for-sale securities	—			—		409			—			409
Purchases of held-to-maturity securities	—			—		(118		)	—			(118		)
Purchases of loans held-for-investment	—			—		(1,402		)	—			(1,402		)
Proceeds from sales of finance receivables and loans originated as held-for-investment	—			—		2,594			—			2,594
Originations and repayments of loans held-for-investment and other	(292		)	—		(392		)	—			(684		)
Net change in loans — intercompany	683			—		(44		)	(639		)	—
Purchases of operating lease assets	—			—		(701		)	—			(701		)
Disposals of operating lease assets	2			—		1,533			—			1,535
Capital contributions to subsidiaries	(128		)	—		—			128			—
Returns of contributed capital	223			—		—			(223		)	—
Net change in restricted cash	—			—		48			—			48
Net change in nonmarketable equity investments	—			—		(315		)	—			(315		)
Other, net	(32		)	—		12			—			(20		)
Net cash provided by investing activities	456			—		929			(734		)	651
Financing activities
Net change in short-term borrowings — third party	187			—		(2,926		)	—			(2,739		)
Net (decrease) increase in deposits	(10		)	—		3,790			—			3,780
Proceeds from issuance of long-term debt — third party	178			—		4,066			—			4,244
Repayments of long-term debt — third party	(580		)	—		(7,910		)	—			(8,490		)
Net change in debt — intercompany	(68		)	—		(684		)	752			—
Repurchase of common stock	(14		)	—		—			—			(14		)
Dividends paid — third party	(15		)	—		—			—			(15		)
Dividends paid and returns of contributed capital — intercompany	—			—		(705		)	705			—
Capital contributions from parent	—			—		128			(128		)	—
Net cash used in financing activities	(322		)	—		(4,241		)	1,329			(3,234		)
Effect of exchange-rate changes on cash and cash equivalents	—			—		2			—			2
Net increase (decrease) in cash and cash equivalents	110			—		(1,602		)	113			(1,379		)
Cash and cash equivalents at beginning of year	1,635			—		5,595			(850		)	6,380
Cash and cash equivalents at March 31,	$	1,745		$	—	$	3,993		$	(737	)	$	5,001