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 June 30, 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 June 30, 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	)	$	—	$	1,482		$	—		$	1,447
Interest and fees on finance receivables and loans — intercompany	3			—		2			(5		)	—
Interest and dividends on investment securities and other earning assets	—			—		146			—			146
Interest on cash and cash equivalents	2			—		5			—			7
Interest-bearing cash — intercompany	—			—		2			(2		)	—
Operating leases	3			—		485			—			488
Total financing (loss) revenue and other interest income	(27		)	—		2,122			(7		)	2,088
Interest expense
Interest on deposits	1			—		249			—			250
Interest on short-term borrowings	19			—		14			—			33
Interest on long-term debt	274			—		143			—			417
Interest on intercompany debt	4			—		3			(7		)	—
Total interest expense	298			—		409			(7		)	700
Net depreciation expense on operating lease assets	3			—		318			—			321
Net financing revenue	(328		)	—		1,395			—			1,067
Cash dividends from subsidiaries
Nonbank subsidiaries	387			—		—			(387		)	—
Other revenue
Insurance premiums and service revenue earned	—			—		227			—			227
Gain on mortgage and automotive loans, net	32			—		4			—			36
Loss on extinguishment of debt	—			—		(1		)	—			(1		)
Other gain on investments, net	—			—		23			—			23
Other income, net of losses	163			—		211			(271		)	103
Total other revenue	195			—		464			(271		)	388
Total net revenue	254			—		1,859			(658		)	1,455
Provision for loan losses	82			—		187			—			269
Noninterest expense
Compensation and benefits expense	19			—		246			—			265
Insurance losses and loss adjustment expenses	—			—		125			—			125
Other operating expenses	213			—		478			(271		)	420
Total noninterest expense	232			—		849			(271		)	810
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries	(60		)	—		823			(387		)	376
Income tax (benefit) expense from continuing operations	(93		)	—		215			—			122
Net income from continuing operations	33			—		608			(387		)	254
Loss from discontinued operations, net of tax	—			—		(2		)	—			(2		)
Undistributed income (loss) of subsidiaries
Bank subsidiary	375			375		—			(750		)	—
Nonbank subsidiaries	(156		)	—		—			156			—
Net income	252			375		606			(981		)	252
Other comprehensive income, net of tax	76			50		72			(122		)	76
Comprehensive income	$	328		$	425	$	678		$	(1,103	)	$	328



Three months ended June 30, 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	$	(28	)	$	—		$	1,293	$	—		$	1,265
Interest and fees on finance receivables and loans — intercompany	3			—			2		(5		)	—
Interest and dividends on investment securities and other earning assets	—			—			99		—			99
Interest on cash and cash equivalents	1			—			3		—			4
Interest-bearing cash — intercompany	—			—			2		(2		)	—
Operating leases	5			—			696		—			701
Total financing (loss) revenue and other interest income	(19		)	—			2,095		(7		)	2,069
Interest expense
Interest on deposits	2			—			201		—			203
Interest on short-term borrowings	10			—			2		—			12
Interest on long-term debt	290			—			146		—			436
Interest on intercompany debt	4			—			3		(7		)	—
Total interest expense	306			—			352		(7		)	651
Net depreciation expense on operating lease assets	3			—			431		—			434
Net financing revenue	(328		)	—			1,312		—			984
Cash dividends from subsidiaries
Nonbank subsidiaries	148			—			—		(148		)	—
Other revenue
Insurance premiums and service revenue earned	—			—			236		—			236
(Loss) gain on mortgage and automotive loans, net	(2		)	—			5		—			3
Other gain on investments, net	—			—			39		—			39
Other income, net of losses	317			—			214		(435		)	96
Total other revenue	315			—			494		(435		)	374
Total net revenue	135			—			1,806		(583		)	1,358
Provision for loan losses	88			—			84		—			172
Noninterest expense
Compensation and benefits expense	139			—			103		—			242
Insurance losses and loss adjustment expenses	—			—			145		—			145
Other operating expenses	317			—			502		(433		)	386
Total noninterest expense	456			—			750		(433		)	773
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries	(409		)	—			972		(150		)	413
Income tax (benefit) expense from continuing operations	(65		)	(82		)	203		—			56
Net (loss) income from continuing operations	(344		)	82			769		(150		)	357
Income from discontinued operations, net of tax	3			—			—		—			3
Undistributed income (loss) of subsidiaries
Bank subsidiary	336			336			—		(672		)	—
Nonbank subsidiaries	365			(2		)	—		(363		)	—
Net income	360			416			769		(1,185		)	360
Other comprehensive income, net of tax	120			62			91		(153		)	120
Comprehensive income	$	480		$	478		$	860	$	(1,338	)	$	480



Six months ended June 30, 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	$	(70	)	$	—	$	2,885		$	—		$	2,815
Interest and fees on finance receivables and loans — intercompany	7			—		4			(11		)	—
Interest and dividends on investment securities and other earning assets	—			—		281			(1		)	280
Interest on cash and cash equivalents	4			—		8			—			12
Interest-bearing cash — intercompany	—			—		3			(3		)	—
Operating leases	6			—		1,025			—			1,031
Total financing (loss) revenue and other interest income	(53		)	—		4,206			(15		)	4,138
Interest expense
Interest on deposits	2			—		479			—			481
Interest on short-term borrowings	36			—		24			—			60
Interest on long-term debt	556			—		285			—			841
Interest on intercompany debt	8			—		7			(15		)	—
Total interest expense	602			—		795			(15		)	1,382
Net depreciation expense on operating lease assets	5			—		705			—			710
Net financing revenue	(660		)	—		2,706			—			2,046
Cash dividends from subsidiaries
Nonbank subsidiaries	427			—		—			(427		)	—
Other revenue
Insurance premiums and service revenue earned	—			—		468			—			468
Gain on mortgage and automotive loans, net	30			—		20			—			50
Loss on extinguishment of debt	—			—		(2		)	—			(2		)
Other gain on investments, net	—			—		50			—			50
Other income, net of losses	431			—		435			(648		)	218
Total other revenue	461			—		971			(648		)	784
Total net revenue	228			—		3,677			(1,075		)	2,830
Provision for loan losses	189			—		351			—			540
Noninterest expense
Compensation and benefits expense	140			—		410			—			550
Insurance losses and loss adjustment expenses	—			—		213			—			213
Other operating expenses	501			—		972			(648		)	825
Total noninterest expense	641			—		1,595			(648		)	1,588
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income of subsidiaries	(602		)	—		1,731			(427		)	702
Income tax (benefit) expense from continuing operations	(227		)	—		462			—			235
Net (loss) income from continuing operations	(375		)	—		1,269			(427		)	467
Income (loss) from discontinued operations, net of tax	2			—		(3		)	—			(1		)
Undistributed income of subsidiaries
Bank subsidiary	764			764		—			(1,528		)	—
Nonbank subsidiaries	75			—		—			(75		)	—
Net income	466			764		1,266			(2,030		)	466
Other comprehensive income, net of tax	96			55		91			(146		)	96
Comprehensive income	$	562		$	819	$	1,357		$	(2,176	)	$	562



Six months ended June 30, 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	$	(66	)	$	—		$	2,566		$	—		$	2,500
Interest and fees on finance receivables and loans — intercompany	6			—			4			(10		)	—
Interest and dividends on investment securities and other earning assets	—			—			201			—			201
Interest on cash and cash equivalents	2			—			5			—			7
Interest-bearing cash — intercompany	—			—			5			(5		)	—
Operating leases	10			—			1,460			—			1,470
Total financing (loss) revenue and other interest income	(48		)	—			4,241			(15		)	4,178
Interest expense
Interest on deposits	4			—			392			—			396
Interest on short-term borrowings	20			—			5			—			25
Interest on long-term debt	578			—			300			—			878
Interest on intercompany debt	9			—			6			(15		)	—
Total interest expense	611			—			703			(15		)	1,299
Net depreciation expense on operating lease assets	7			—			937			—			944
Net financing revenue	(666		)	—			2,601			—			1,935
Cash dividends from subsidiaries
Nonbank subsidiaries	629			—			—			(629		)	—
Other revenue
Insurance premiums and service revenue earned	—			—			466			—			466
(Loss) gain on mortgage and automotive loans, net	(5		)	—			9			—			4
Loss on extinguishment of debt	(2		)	—			(2		)	—			(4		)
Other gain on investments, net	—			—			93			—			93
Other income, net of losses	690			—			430			(929		)	191
Total other revenue	683			—			996			(929		)	750
Total net revenue	646			—			3,597			(1,558		)	2,685
Provision for loan losses	148			—			244			—			392
Noninterest expense
Compensation and benefits expense	286			—			208			—			494
Insurance losses and loss adjustment expenses	—			—			218			—			218
Other operating expenses	656			—			1,044			(929		)	771
Total noninterest expense	942			—			1,470			(929		)	1,483
(Loss) income from continuing operations before income tax (benefit) expense and undistributed income (loss) of subsidiaries	(444		)	—			1,883			(629		)	810
Income tax (benefit) expense from continuing operations	(108		)	(82		)	396			—			206
Net (loss) income from continuing operations	(336		)	82			1,487			(629		)	604
Income (loss) from discontinued operations, net of tax	9			—			(3		)	—			6
Undistributed income (loss) of subsidiaries
Bank subsidiary	607			607			—			(1,214		)	—
Nonbank subsidiaries	330			(2		)	—			(328		)	—
Net income	610			687			1,484			(2,171		)	610
Other comprehensive income, net of tax	266			145			243			(388		)	266
Comprehensive income	$	876		$	832		$	1,727		$	(2,559	)	$	876

Condensed Consolidating Balance Sheet



June 30, 2017 ($ in millions)	Parent (a)			Guarantors		Nonguarantors (a)			Consolidating adjustments			Ally consolidated
Assets
Cash and cash equivalents
Noninterest-bearing	$	591		$	—	$	923		$	—		$	1,514
Interest-bearing	850			—		2,013			—			2,863
Interest-bearing — intercompany	—			—		557			(557		)	—
Total cash and cash equivalents	1,441			—		3,493			(557		)	4,377
Available-for-sale securities	6			—		21,764			(6		)	21,764
Held-to-maturity securities	—			—		1,284			(95		)	1,189
Loans held-for-sale, net	—			—		17			—			17
Finance receivables and loans, net
Finance receivables and loans, net	5,733			—		114,795			—			120,528
Intercompany loans to
Bank subsidiary	250			—		—			(250		)	—
Nonbank subsidiaries	833			—		380			(1,213		)	—
Allowance for loan losses	(144		)	—		(1,081		)	—			(1,225		)
Total finance receivables and loans, net	6,672			—		114,094			(1,463		)	119,303
Investment in operating leases, net	29			—		9,688			—			9,717
Intercompany receivables from
Bank subsidiary	85			—		—			(85		)	—
Nonbank subsidiaries	50			—		145			(195		)	—
Investment in subsidiaries
Bank subsidiary	18,869			18,869		—			(37,738		)	—
Nonbank subsidiaries	10,023			—		—			(10,023		)	—
Premiums receivable and other insurance assets	—			—		2,055			(30		)	2,025
Other assets	3,482			—		4,684			(2,213		)	5,953
Total assets	$	40,657		$	18,869	$	157,224		$	(52,405	)	$	164,345
Liabilities
Deposit liabilities
Noninterest-bearing	$	—		$	—	$	107		$	—		$	107
Interest-bearing	45			—		86,031			—			86,076
Total deposit liabilities	45			—		86,138			—			86,183
Short-term borrowings	4,706			—		6,006			—			10,712
Long-term debt	20,755			—		28,390			—			49,145
Intercompany debt to
Bank subsidiary	95			—		—			(95		)	—
Nonbank subsidiaries	937			—		1,089			(2,026		)	—
Intercompany payables to
Bank subsidiary	1			—		—			(1		)	—
Nonbank subsidiaries	199			—		110			(309		)	—
Interest payable	192			—		207			—			399
Unearned insurance premiums and service revenue	—			—		2,541			—			2,541
Accrued expenses and other liabilities	254			—		3,852			(2,214		)	1,892
Total liabilities	27,184			—		128,333			(4,645		)	150,872
Total equity	13,473			18,869		28,891			(47,760		)	13,473
Total liabilities and equity	$	40,657		$	18,869	$	157,224		$	(52,405	)	$	164,345


(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



Six months ended June 30, 2017 ($ in millions)	Parent			Guarantors		Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash provided by operating activities	$	561		$	—	$	1,856		$	(347	)	$	2,070
Investing activities
Purchases of available-for-sale securities	—			—		(5,853		)	—			(5,853		)
Proceeds from sales of available-for-sale securities	—			—		2,162			—			2,162
Proceeds from maturities and repayments of available-for-sale securities	—			—		1,230			—			1,230
Purchases of held-to-maturity securities	—			—		(313		)	—			(313		)
Proceeds from maturities and repayments of held-to-maturity securities	—			—		17			—			17
Net change in investment securities — intercompany	1			—		269			(270		)	—
Purchases of finance receivables and loans held-for-investment	(35		)	—		(1,782		)	—			(1,817		)
Proceeds from sales of finance receivables and loans originated as held-for-investment	67			—		1,213			—			1,280
Originations and repayments of finance receivables and loans held-for-investment and other, net	1,044			—		(676		)	(1,956		)	(1,588		)
Net change in loans — intercompany	1,864			—		246			(2,110		)	—
Purchases of operating lease assets	—			—		(1,965		)	—			(1,965		)
Disposals of operating lease assets	4			—		3,039			—			3,043
Capital contributions to subsidiaries	(824		)	—		—			824			—
Returns of contributed capital	838			—		—			(838		)	—
Net change in restricted cash	(45		)	—		524			(5		)	474
Net change in nonmarketable equity investments	—			—		107			—			107
Other, net	(26		)	—		24			(91		)	(93		)
Net cash provided by (used in) investing activities	2,888			—		(1,758		)	(4,446		)	(3,316		)
Financing activities
Net change in short-term borrowings — third party	1,083			—		(3,045		)	—			(1,962		)
Net (decrease) increase in deposits	(123		)	—		7,256			—			7,133
Proceeds from issuance of long-term debt — third party	353			—		7,016			1,961			9,330
Repayments of long-term debt — third party	(3,323		)	—		(11,043		)	—			(14,366		)
Net change in debt — intercompany	(370		)	—		(1,864		)	2,234			—
Repurchase of common stock	(373		)	—		—			—			(373		)
Dividends paid — third party	(75		)	—		—			—			(75		)
Dividends paid and returns of contributed capital — intercompany	—			—		(1,266		)	1,266			—
Capital contributions from parent	—			—		824			(824		)	—
Net cash used in financing activities	(2,828		)	—		(2,122		)	4,637			(313		)
Effect of exchange-rate changes on cash and cash equivalents	—			—		2			—			2
Net increase (decrease) in cash and cash equivalents	621			—		(2,022		)	(156		)	(1,557		)
Cash and cash equivalents at beginning of year	820			—		5,515			(401		)	5,934
Cash and cash equivalents at June 30,	$	1,441		$	—	$	3,493		$	(557	)	$	4,377



Six months ended June 30, 2016 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash provided by operating activities	$	146		$	—		$	2,919		$	(629	)	$	2,436
Investing activities
Purchases of available-for-sale securities	—			—			(8,657		)	—			(8,657		)
Proceeds from sales of available-for-sale securities	—			—			6,584			—			6,584
Proceeds from maturities and repayments of available-for-sale securities	—			—			1,536			—			1,536
Purchases of held-to-maturity securities	—			—			(571		)	—			(571		)
Purchases of finance receivables and loans held-for-investment	—			—			(2,442		)	—			(2,442		)
Proceeds from sales of finance receivables and loans originated as held-for-investment	—			—			4,156			—			4,156
Originations and repayments of finance receivables and loans held-for-investment and other	(834		)	—			(2,377		)	—			(3,211		)
Net change in loans — intercompany	61			—			(2		)	(59		)	—
Purchases of operating lease assets	—			—			(1,472		)	—			(1,472		)
Disposals of operating lease assets	9			—			3,038			—			3,047
Acquisitions of subsidiaries, net of cash acquired	(288		)	—			—			—			(288		)
Capital contributions to subsidiaries	(988		)	—			—			988			—
Returns of contributed capital	1,971			8			—			(1,979		)	—
Net change in restricted cash	1			—			481			—			482
Net change in nonmarketable equity investments	—			—			(354		)	—			(354		)
Other, net	(82		)	—			13			—			(69		)
Net cash (used in) provided by investing activities	(150		)	8			(67		)	(1,050		)	(1,259		)
Financing activities
Net change in short-term borrowings — third party	123			—			(2,235		)	—			(2,112		)
Net (decrease) increase in deposits	(29		)	—			6,337			—			6,308
Proceeds from issuance of long-term debt — third party	1,115			—			7,905			—			9,020
Repayments of long-term debt — third party	(596		)	—			(13,709		)	—			(14,305		)
Net change in debt — intercompany	(8		)	—			(62		)	70			—
Redemption of preferred stock	(696		)	—			—			—			(696		)
Repurchase of common stock	(14		)	—			—			—			(14		)
Dividends paid — third party	(30		)	—			—			—			(30		)
Dividends paid and returns of contributed capital — intercompany	—			(8		)	(2,600		)	2,608			—
Capital contributions from parent	—			—			988			(988		)	—
Net cash used in financing activities	(135		)	(8		)	(3,376		)	1,690			(1,829		)
Effect of exchange-rate changes on cash and cash equivalents	—			—			3			—			3
Net decrease in cash and cash equivalents	(139		)	—			(521		)	11			(649		)
Cash and cash equivalents at beginning of year	1,635			—			5,595			(850		)	6,380
Cash and cash equivalents at June 30,	$	1,496		$	—		$	5,074		$	(839	)	$	5,731