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, 2019, 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) a column for adjustments to arrive at (v) the information for the parent company, the Guarantors, and nonguarantors on a consolidated basis.

Investment in subsidiaries is 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, investment 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, 2019 ($ in millions)	Parent			Guarantors		Nonguarantors		Consolidating adjustments			Ally consolidated
Financing revenue and other interest income
Interest and fees on finance receivables and loans	$	(60	)	$	—	$	1,867	$	—		$	1,807
Interest and fees on finance receivables and loans — intercompany	3			—		2		(5		)	—
Interest on loans held-for-sale	—			—		2		—			2
Interest and dividends on investment securities and other earning assets	—			—		240		—			240
Interest on cash and cash equivalents	2			—		21		—			23
Interest-bearing cash — intercompany	2			—		3		(5		)	—
Operating leases	2			—		359		—			361
Total financing (loss) revenue and other interest income	(51		)	—		2,494		(10		)	2,433
Interest expense
Interest on deposits	—			—		592		—			592
Interest on short-term borrowings	13			—		31		—			44
Interest on long-term debt	211			—		208		—			419
Interest on intercompany debt	5			—		5		(10		)	—
Total interest expense	229			—		836		(10		)	1,055
Net depreciation expense on operating lease assets	1			—		245		—			246
Net financing (loss) revenue	(281		)	—		1,413		—			1,132
Cash dividends from subsidiaries
Bank subsidiary	400			400		—		(800		)	—
Nonbank subsidiaries	42			—		—		(42		)	—
Other revenue
Insurance premiums and service revenue earned	—			—		261		—			261
Gain on mortgage and automotive loans, net	4			—		6		—			10
Other gain on investments, net	—			—		108		—			108
Other income, net of losses	103			—		144		(160		)	87
Total other revenue	107			—		519		(160		)	466
Total net revenue	268			400		1,932		(1,002		)	1,598
Provision for loan losses	27			—		272		(17		)	282
Noninterest expense
Compensation and benefits expense	12			—		306		—			318
Insurance losses and loss adjustment expenses	—			—		59		—			59
Other operating expenses	155			—		458		(160		)	453
Total noninterest expense	167			—		823		(160		)	830
Income from continuing operations before income tax (benefit) expense and undistributed income of subsidiaries	74			400		837		(825		)	486
Income tax (benefit) expense from continuing operations	(61		)	—		172		—			111
Net income from continuing operations	135			400		665		(825		)	375
Loss from discontinued operations, net of tax	(1		)	—		—		—			(1		)
Undistributed income of subsidiaries
Bank subsidiary	57			57		—		(114		)	—
Nonbank subsidiaries	183			—		—		(183		)	—
Net income	374			457		665		(1,122		)	374
Other comprehensive income, net of tax	306			229		320		(549		)	306
Comprehensive income	$	680		$	686	$	985	$	(1,671	)	$	680



Three months ended March 31, 2018 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Financing revenue and other interest income
Interest and fees on finance receivables and loans	$	11		$	—		$	1,532		$	—		$	1,543
Interest and fees on finance receivables and loans — intercompany	2			—			1			(3		)	—
Interest and dividends on investment securities and other earning assets	—			—			176			—			176
Interest on cash and cash equivalents	2			—			14			(1		)	15
Interest-bearing cash — intercompany	2			—			2			(4		)	—
Operating leases	2			—			380			—			382
Total financing revenue and other interest income	19			—			2,105			(8		)	2,116
Interest expense
Interest on deposits	—			—			354			(3		)	351
Interest on short-term borrowings	10			—			22			—			32
Interest on long-term debt	258			—			153			—			411
Interest on intercompany debt	3			—			2			(5		)	—
Total interest expense	271			—			531			(8		)	794
Net depreciation expense on operating lease assets	4			—			269			—			273
Net financing (loss) revenue	(256		)	—			1,305			—			1,049
Cash dividends from subsidiaries
Bank subsidiary	1,000			1,000			—			(2,000		)	—
Nonbank subsidiaries	169			—			—			(169		)	—
Other revenue
Insurance premiums and service revenue earned	—			—			256			—			256
Gain on mortgage and automotive loans, net	28			—			1			(28		)	1
Other loss on investments, net	—			—			(12		)	—			(12		)
Other income, net of losses	96			—			221			(208		)	109
Total other revenue	124			—			466			(236		)	354
Total net revenue	1,037			1,000			1,771			(2,405		)	1,403
Provision for loan losses	81			—			208			(28		)	261
Noninterest expense
Compensation and benefits expense	23			—			283			—			306
Insurance losses and loss adjustment expenses	—			—			63			—			63
Other operating expenses	182			—			471			(208		)	445
Total noninterest expense	205			—			817			(208		)	814
Income from continuing operations before income tax (benefit) expense and undistributed (loss) income of subsidiaries	751			1,000			746			(2,169		)	328
Income tax (benefit) expense from continuing operations	(56		)	—			132			—			76
Net income from continuing operations	807			1,000			614			(2,169		)	252
Loss from discontinued operations, net of tax	(1		)	—			(1		)	—			(2		)
Undistributed (loss) income of subsidiaries
Bank subsidiary	(597		)	(597		)	—			1,194			—
Nonbank subsidiaries	41			—			—			(41		)	—
Net income	250			403			613			(1,016		)	250
Other comprehensive loss, net of tax	(328		)	(276		)	(339		)	615			(328		)
Comprehensive (loss) income	$	(78	)	$	127		$	274		$	(401	)	$	(78	)

Condensed Consolidating Balance Sheet



March 31, 2019 ($ in millions)	Parent			Guarantors		Nonguarantors			Consolidating adjustments			Ally consolidated
Assets
Cash and cash equivalents
Noninterest-bearing	$	45		$	—	$	901		$	—		$	946
Interest-bearing	14			—		2,997			—			3,011
Interest-bearing — intercompany	1,345			—		697			(2,042		)	—
Total cash and cash equivalents	1,404			—		4,595			(2,042		)	3,957
Equity securities	—			—		536			—			536
Available-for-sale securities	—			—		27,630			—			27,630
Held-to-maturity securities	—			—		2,404			(17		)	2,387
Loans held-for-sale, net	—			—		107			—			107
Finance receivables and loans, net
Finance receivables and loans, net	2,109			—		127,928			18			130,055
Intercompany loans to
Nonbank subsidiaries	372			—		104			(476		)	—
Allowance for loan losses	(36		)	—		(1,252		)	—			(1,288		)
Total finance receivables and loans, net	2,445			—		126,780			(458		)	128,767
Investment in operating leases, net	3			—		8,336			—			8,339
Intercompany receivables from
Bank subsidiary	104			—		—			(104		)	—
Nonbank subsidiaries	46			—		110			(156		)	—
Investment in subsidiaries
Bank subsidiary	16,499			16,499		—			(32,998		)	—
Nonbank subsidiaries	6,687			—		—			(6,687		)	—
Premiums receivable and other insurance assets	—			—		2,401			—			2,401
Other assets	2,292			—		5,440			(1,739		)	5,993
Total assets	$	29,480		$	16,499	$	178,339		$	(44,201	)	$	180,117
Liabilities and equity
Deposit liabilities
Noninterest-bearing	$	—		$	—	$	141		$	—		$	141
Interest-bearing	—			—		113,158			—			113,158
Interest-bearing — intercompany	—			—		1,345			(1,345		)	—
Total deposit liabilities	—			—		114,644			(1,345		)	113,299
Short-term borrowings	2,486			—		3,629			—			6,115
Long-term debt	11,887			—		29,603			—			41,490
Intercompany debt to
Bank subsidiary	17			—		—			(17		)	—
Nonbank subsidiaries	801			—		372			(1,173		)	—
Intercompany payables to
Bank subsidiary	46			—		—			(46		)	—
Nonbank subsidiaries	108			—		113			(221		)	—
Interest payable	218			—		478			—			696
Unearned insurance premiums and service revenue	—			—		3,096			—			3,096
Accrued expenses and other liabilities	218			—		3,236			(1,732		)	1,722
Total liabilities	15,781			—		155,171			(4,534		)	166,418
Total equity	13,699			16,499		23,168			(39,667		)	13,699
Total liabilities and equity	$	29,480		$	16,499	$	178,339		$	(44,201	)	$	180,117



December 31, 2018 ($ in millions)	Parent			Guarantors		Nonguarantors			Consolidating adjustments			Ally consolidated
Assets
Cash and cash equivalents
Noninterest-bearing	$	55		$	—	$	755		$	—		$	810
Interest-bearing	5			—		3,722			—			3,727
Interest-bearing — intercompany	1,249			—		521			(1,770		)	—
Total cash and cash equivalents	1,309			—		4,998			(1,770		)	4,537
Equity securities	—			—		773			—			773
Available-for-sale securities	—			—		25,303			—			25,303
Held-to-maturity securities	—			—		2,382			(20		)	2,362
Loans held-for-sale, net	—			—		314			—			314
Finance receivables and loans, net
Finance receivables and loans, net	2,349			—		127,577			—			129,926
Intercompany loans to
Nonbank subsidiaries	882			—		397			(1,279		)	—
Allowance for loan losses	(55		)	—		(1,187		)	—			(1,242		)
Total finance receivables and loans, net	3,176			—		126,787			(1,279		)	128,684
Investment in operating leases, net	5			—		8,412			—			8,417
Intercompany receivables from
Bank subsidiary	158			—		—			(158		)	—
Nonbank subsidiaries	45			—		129			(174		)	—
Investment in subsidiaries
Bank subsidiary	16,213			16,213		—			(32,426		)	—
Nonbank subsidiaries	6,928			—		—			(6,928		)	—
Premiums receivable and other insurance assets	—			—		2,326			—			2,326
Other assets	2,226			—		5,453			(1,526		)	6,153
Total assets	$	30,060		$	16,213	$	176,877		$	(44,281	)	$	178,869
Liabilities and equity
Deposit liabilities
Noninterest-bearing	$	—		$	—	$	142		$	—		$	142
Interest-bearing	1			—		106,035			—			106,036
Interest-bearing — intercompany	—			—		1,249			(1,249		)	—
Total deposit liabilities	1			—		107,426			(1,249		)	106,178
Short-term borrowings	2,477			—		7,510			—			9,987
Long-term debt	12,774			—		31,419			—			44,193
Intercompany debt to
Bank subsidiary	20			—		—			(20		)	—
Nonbank subsidiaries	918			—		882			(1,800		)	—
Intercompany payables to
Bank subsidiary	45			—		—			(45		)	—
Nonbank subsidiaries	124			—		129			(253		)	—
Interest payable	159			—		364			—			523
Unearned insurance premiums and service revenue	—			—		3,044			—			3,044
Accrued expenses and other liabilities	274			—		2,962			(1,560		)	1,676
Total liabilities	16,792			—		153,736			(4,927		)	165,601
Total equity	13,268			16,213		23,141			(39,354		)	13,268
Total liabilities and equity	$	30,060		$	16,213	$	176,877		$	(44,281	)	$	178,869

Condensed Consolidating Statement of Cash Flows



Three months ended March 31, 2019 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash provided by operating activities	$	155		$	400		$	1,369		$	(843	)	$	1,081
Investing activities
Purchases of equity securities	—			—			(48		)	—			(48		)
Proceeds from sales of equity securities	—			—			383			—			383
Purchases of available-for-sale securities	—			—			(3,401		)	—			(3,401		)
Proceeds from sales of available-for-sale securities	—			—			656			—			656
Proceeds from repayments of available-for-sale securities	—			—			694			—			694
Purchases of held-to-maturity securities	—			—			(131		)	—			(131		)
Proceeds from repayments of held-to-maturity securities	—			—			44			—			44
Net change in investment securities — intercompany	—			—			3			(3		)	—
Purchases of finance receivables and loans held-for-investment	—			—			(1,843		)	391			(1,452		)
Proceeds from sales of finance receivables and loans initially held-for-investment	402			—			146			(391		)	157
Originations and repayments of finance receivables and loans held-for-investment and other, net	301			—			848			—			1,149
Net change in loans — intercompany	507			—			290			(797		)	—
Purchases of operating lease assets	—			—			(792		)	—			(792		)
Disposals of operating lease assets	1			—			623			—			624
Capital contributions to subsidiaries	(1		)	—			—			1			—
Returns of contributed capital	15			—			—			(15		)	—
Net change in nonmarketable equity investments	(1		)	—			172			—			171
Other, net	—			—			(94		)	(1		)	(95		)
Net cash provided by (used in) investing activities	1,224			—			(2,450		)	(815		)	(2,041		)
Financing activities
Net change in short-term borrowings — third party	9			—			(3,881		)	—			(3,872		)
Net (decrease) increase in deposits	(1		)	—			7,211			(96		)	7,114
Proceeds from issuance of long-term debt — third party	7			—			1,759			—			1,766
Repayments of long-term debt — third party	(900		)	—			(3,590		)	—			(4,490		)
Net change in debt — intercompany	(118		)	—			(507		)	625			—
Repurchase of common stock	(211		)	—			—			—			(211		)
Dividends paid — third party	(70		)	—			—			—			(70		)
Dividends paid and returns of contributed capital — intercompany	—			(400		)	(458		)	858			—
Capital contributions from parent	—			—			1			(1		)	—
Net cash (used in) provided by financing activities	(1,284		)	(400		)	535			1,386			237
Effect of exchange-rate changes on cash and cash equivalents and restricted cash	—			—			1			—			1
Net increase (decrease) in cash and cash equivalents and restricted cash	95			—			(545		)	(272		)	(722		)
Cash and cash equivalents and restricted cash at beginning of year	1,398			—			5,998			(1,770		)	5,626
Cash and cash equivalents and restricted cash at March 31,	$	1,493		$	—		$	5,453		$	(2,042	)	$	4,904

The following table provides a reconciliation of cash and cash equivalents and restricted cash from the Condensed Consolidated Balance Sheet to the Condensed Consolidated Statement of Cash Flows.



March 31, 2019 ($ in millions)	Parent		Guarantors		Nonguarantors		Consolidating adjustments			Ally consolidated
Cash and cash equivalents on the Condensed Consolidated Balance Sheet	$	1,404	$	—	$	4,595	$	(2,042	)	$	3,957
Restricted cash included in other assets on the Condensed Consolidated Balance Sheet (a)	89		—		858		—			947
Total cash and cash equivalents and restricted cash in the Condensed Consolidated Statement of Cash Flows	$	1,493	$	—	$	5,453	$	(2,042	)	$	4,904


(a)	Restricted cash balances relate primarily to Ally securitization arrangements. Refer to Note 10 for additional details describing the nature of restricted cash balances.



Three months ended March 31, 2018 ($ in millions)	Parent			Guarantors			Nonguarantors			Consolidating adjustments			Ally consolidated
Operating activities
Net cash provided by operating activities	$	456		$	1,000		$	1,812		$	(2,171	)	$	1,097
Investing activities
Purchases of equity securities	—			—			(374		)	—			(374		)
Proceeds from sales of equity securities	—			—			220			—			220
Purchases of available-for-sale securities	—			—			(2,360		)	—			(2,360		)
Proceeds from sales of available-for-sale securities	—			—			328			—			328
Proceeds from repayments of available-for-sale securities	—			—			795			—			795
Purchases of held-to-maturity securities	—			—			(155		)	—			(155		)
Proceeds from repayments of held-to-maturity securities	—			—			35			—			35
Net change in investment securities — intercompany	—			—			9			(9		)	—
Purchases of finance receivables and loans held-for-investment	—			—			(2,317		)	820			(1,497		)
Proceeds from sales of finance receivables and loans initially held-for-investment	820			—			—			(820		)	—
Originations and repayments of finance receivables and loans held-for-investment and other, net	432			—			(1,732		)	—			(1,300		)
Net change in loans — intercompany	(423		)	—			1			422			—
Purchases of operating lease assets	—			—			(969		)	—			(969		)
Disposals of operating lease assets	4			—			972			—			976
Capital contributions to subsidiaries	(49		)	(6		)	—			55			—
Returns of contributed capital	38			—			—			(38		)	—
Net change in nonmarketable equity investments	—			—			(19		)	—			(19		)
Other, net	(3		)	—			(80		)	1			(82		)
Net cash provided by (used in) investing activities	819			(6		)	(5,646		)	431			(4,402		)
Financing activities
Net change in short-term borrowings — third party	(214		)	—			(1,634		)	—			(1,848		)
Net (decrease) increase in deposits	(6		)	—			3,776			403			4,173
Proceeds from issuance of long-term debt — third party	15			—			6,650			—			6,665
Repayments of long-term debt — third party	(1,152		)	—			(4,619		)	—			(5,771		)
Net change in debt — intercompany	(127		)	—			422			(295		)	—
Repurchase of common stock	(185		)	—			—			—			(185		)
Dividends paid — third party	(58		)	—			—			—			(58		)
Dividends paid and returns of contributed capital — intercompany	—			(1,000		)	(1,208		)	2,208			—
Capital contributions from parent	—			6			49			(55		)	—
Net cash (used in) provided by financing activities	(1,727		)	(994		)	3,436			2,261			2,976
Effect of exchange-rate changes on cash and cash equivalents	—			—			(2		)	—			(2		)
Net decrease in cash and cash equivalents and restricted cash	(452		)	—			(400		)	521			(331		)
Cash and cash equivalents and restricted cash at beginning of year	1,395			—			5,707			(1,833		)	5,269
Cash and cash equivalents and restricted cash at March 31,	$	943		$	—		$	5,307		$	(1,312	)	$	4,938

The following table provides a reconciliation of cash and cash equivalents and restricted cash from the Condensed Consolidated Balance Sheet to the Condensed Consolidated Statement of Cash Flows.



March 31, 2018 ($ in millions)	Parent		Guarantors		Nonguarantors		Consolidating adjustments			Ally consolidated
Cash and cash equivalents on the Condensed Consolidated Balance Sheet	$	796	$	—	$	4,237	$	(1,312	)	$	3,721
Restricted cash included in other assets on the Condensed Consolidated Balance Sheet (a)	147		—		1,070		—			1,217
Total cash and cash equivalents and restricted cash in the Condensed Consolidated Statement of Cash Flows	$	943	$	—	$	5,307	$	(1,312	)	$	4,938


(a)	Restricted cash balances relate primarily to Ally securitization arrangements. Refer to Note 10 for additional details describing the nature of restricted cash balances.