| Condensed Financial Statements | 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 September 30, 2018 , 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 September 30, 2018 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Financing revenue and other interest income Interest and fees on finance receivables and loans $ (4 ) $ — $ 1,712 $ — $ 1,708 Interest and fees on finance receivables and loans — intercompany 3 — 2 (5 ) — Interest on loans held-for-sale — — 4 — 4 Interest and dividends on investment securities and other earning assets — — 198 — 198 Interest on cash and cash equivalents 2 — 16 — 18 Interest-bearing cash — intercompany 1 — 3 (4 ) — Operating leases 1 — 367 — 368 Total financing revenue and other interest income 3 — 2,302 (9 ) 2,296 Interest expense Interest on deposits — — 462 — 462 Interest on short-term borrowings 12 — 17 — 29 Interest on long-term debt 250 — 201 — 451 Interest on intercompany debt 5 — 4 (9 ) — Total interest expense 267 — 684 (9 ) 942 Net depreciation expense on operating lease assets 2 — 245 — 247 Net financing (loss) revenue (266 ) — 1,373 — 1,107 Cash dividends from subsidiaries Bank subsidiary 550 550 — (1,100 ) — Nonbank subsidiaries 88 — — (88 ) — Other revenue Insurance premiums and service revenue earned — — 258 — 258 Gain on mortgage and automotive loans, net 16 — 1 — 17 Other gain on investments, net — — 22 — 22 Other income, net of losses 105 — 187 (191 ) 101 Total other revenue 121 — 468 (191 ) 398 Total net revenue 493 550 1,841 (1,379 ) 1,505 Provision for loan losses 30 — 203 — 233 Noninterest expense Compensation and benefits expense 19 — 255 — 274 Insurance losses and loss adjustment expenses — — 77 — 77 Other operating expenses 175 — 472 (191 ) 456 Total noninterest expense 194 — 804 (191 ) 807 Income from continuing operations before income tax (benefit) expense and undistributed (loss) income of subsidiaries 269 550 834 (1,188 ) 465 Income tax (benefit) expense from continuing operations (88 ) — 179 — 91 Net income from continuing operations 357 550 655 (1,188 ) 374 Income (loss) from discontinued operations, net of tax — — — — — Undistributed (loss) income of subsidiaries Bank subsidiary (31 ) (31 ) — 62 — Nonbank subsidiaries 48 — — (48 ) — Net income 374 519 655 (1,174 ) 374 Other comprehensive loss, net of tax (133 ) (104 ) (133 ) 237 (133 ) Comprehensive income $ 241 $ 415 $ 522 $ (937 ) $ 241 Three months ended September 30, 2017 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Financing revenue and other interest income Interest and fees on finance receivables and loans $ 13 $ — $ 1,473 $ — $ 1,486 Interest and fees on finance receivables and loans — intercompany 2 — 1 (3 ) — Interest and dividends on investment securities and other earning assets — — 157 — 157 Interest on cash and cash equivalents 2 — 9 — 11 Interest-bearing cash — intercompany 1 — 2 (3 ) — Operating leases 3 — 431 — 434 Total financing revenue and other interest income 21 — 2,073 (6 ) 2,088 Interest expense Interest on deposits — — 286 (1 ) 285 Interest on short-term borrowings 16 — 18 — 34 Interest on long-term debt 278 — 138 — 416 Interest on intercompany debt 3 — 2 (5 ) — Total interest expense 297 — 444 (6 ) 735 Net depreciation expense on operating lease assets 3 — 269 — 272 Net financing (loss) revenue (279 ) — 1,360 — 1,081 Cash dividends from subsidiaries Bank subsidiary 2,900 2,900 — (5,800 ) — Nonbank subsidiaries 101 — — (101 ) — Other revenue Insurance premiums and service revenue earned — — 252 — 252 Gain on mortgage and automotive loans, net 9 — 6 — 15 Other gain on investments, net — — 23 — 23 Other income, net of losses 137 — 196 (242 ) 91 Total other revenue 146 — 477 (242 ) 381 Total net revenue 2,868 2,900 1,837 (6,143 ) 1,462 Provision for loan losses 161 — 153 — 314 Noninterest expense Compensation and benefits expense 17 — 247 — 264 Insurance losses and loss adjustment expenses — — 65 — 65 Other operating expenses 208 — 459 (243 ) 424 Total noninterest expense 225 — 771 (243 ) 753 Income from continuing operations before income tax (benefit) expense and undistributed (loss) income of subsidiaries 2,482 2,900 913 (5,900 ) 395 Income tax (benefit) expense from continuing operations (135 ) — 250 — 115 Net income from continuing operations 2,617 2,900 663 (5,900 ) 280 Income (loss) from discontinued operations, net of tax 4 — (2 ) — 2 Undistributed (loss) income of subsidiaries Bank subsidiary (2,524 ) (2,524 ) — 5,048 — Nonbank subsidiaries 185 — — (185 ) — Net income 282 376 661 (1,037 ) 282 Other comprehensive income, net of tax 48 36 51 (87 ) 48 Comprehensive income $ 330 $ 412 $ 712 $ (1,124 ) $ 330 Nine months ended September 30, 2018 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Financing revenue and other interest income Interest and fees on finance receivables and loans $ 6 $ — $ 4,892 $ — $ 4,898 Interest and fees on finance receivables and loans — intercompany 9 — 4 (13 ) — Interest on loans held-for-sale — — 10 — 10 Interest and dividends on investment securities and other earning assets — — 563 (1 ) 562 Interest on cash and cash equivalents 6 — 44 — 50 Interest-bearing cash — intercompany 5 — 7 (12 ) — Operating leases 4 — 1,120 — 1,124 Total financing revenue and other interest income 30 — 6,640 (26 ) 6,644 Interest expense Interest on deposits — — 1,212 — 1,212 Interest on short-term borrowings 32 — 69 — 101 Interest on long-term debt 765 — 531 — 1,296 Interest on intercompany debt 12 — 14 (26 ) — Total interest expense 809 — 1,826 (26 ) 2,609 Net depreciation expense on operating lease assets 7 — 778 — 785 Net financing (loss) revenue (786 ) — 4,036 — 3,250 Cash dividends from subsidiaries Bank subsidiary 2,050 2,050 — (4,100 ) — Nonbank subsidiaries 389 — — (389 ) — Other revenue Insurance premiums and service revenue earned — — 753 — 753 Gain on mortgage and automotive loans, net 44 — 3 (28 ) 19 Other gain on investments, net — — 37 — 37 Other income, net of losses 301 — 593 (587 ) 307 Total other revenue 345 — 1,386 (615 ) 1,116 Total net revenue 1,998 2,050 5,422 (5,104 ) 4,366 Provision for loan losses 143 — 537 (28 ) 652 Noninterest expense Compensation and benefits expense 67 — 805 — 872 Insurance losses and loss adjustment expenses — — 241 — 241 Other operating expenses 530 — 1,404 (587 ) 1,347 Total noninterest expense 597 — 2,450 (587 ) 2,460 Income from continuing operations before income tax (benefit) expense and undistributed (loss) income of subsidiaries 1,258 2,050 2,435 (4,489 ) 1,254 Income tax (benefit) expense from continuing operations (210 ) — 490 — 280 Net income from continuing operations 1,468 2,050 1,945 (4,489 ) 974 (Loss) income from discontinued operations, net of tax (2 ) — 1 — (1 ) Undistributed (loss) income of subsidiaries Bank subsidiary (576 ) (576 ) — 1,152 — Nonbank subsidiaries 83 — — (83 ) — Net income 973 1,474 1,946 (3,420 ) 973 Other comprehensive loss, net of tax (531 ) (436 ) (546 ) 982 (531 ) Comprehensive income $ 442 $ 1,038 $ 1,400 $ (2,438 ) $ 442 Nine months ended September 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 $ (57 ) $ — $ 4,358 $ — $ 4,301 Interest and fees on finance receivables and loans — intercompany 10 — 5 (15 ) — Interest and dividends on investment securities and other earning assets — — 439 (2 ) 437 Interest on cash and cash equivalents 6 — 17 — 23 Interest-bearing cash — intercompany 1 — 5 (6 ) — Operating leases 9 — 1,456 — 1,465 Total financing (loss) revenue and other interest income (31 ) — 6,280 (23 ) 6,226 Interest expense Interest on deposits 2 — 765 (1 ) 766 Interest on short-term borrowings 52 — 42 — 94 Interest on long-term debt 834 — 423 — 1,257 Interest on intercompany debt 12 — 10 (22 ) — Total interest expense 900 — 1,240 (23 ) 2,117 Net depreciation expense on operating lease assets 8 — 974 — 982 Net financing (loss) revenue (939 ) — 4,066 — 3,127 Cash dividends from subsidiaries Bank subsidiary 2,900 2,900 — (5,800 ) — Nonbank subsidiaries 528 — — (528 ) — Other revenue Insurance premiums and service revenue earned — — 720 — 720 Gain on mortgage and automotive loans, net 39 — 26 — 65 Other gain on investments, net — — 73 — 73 Other income, net of losses 568 — 630 (891 ) 307 Total other revenue 607 — 1,449 (891 ) 1,165 Total net revenue 3,096 2,900 5,515 (7,219 ) 4,292 Provision for loan losses 350 — 504 — 854 Noninterest expense Compensation and benefits expense 157 — 657 — 814 Insurance losses and loss adjustment expenses — — 278 — 278 Other operating expenses 709 — 1,431 (891 ) 1,249 Total noninterest expense 866 — 2,366 (891 ) 2,341 Income from continuing operations before income tax (benefit) expense and undistributed (loss) income of subsidiaries 1,880 2,900 2,645 (6,328 ) 1,097 Income tax (benefit) expense from continuing operations (362 ) — 712 — 350 Net income from continuing operations 2,242 2,900 1,933 (6,328 ) 747 Income (loss) from discontinued operations, net of tax 6 — (5 ) — 1 Undistributed (loss) income of subsidiaries Bank subsidiary (1,760 ) (1,760 ) — 3,520 — Nonbank subsidiaries 260 — — (260 ) — Net income 748 1,140 1,928 (3,068 ) 748 Other comprehensive income, net of tax 144 91 140 (231 ) 144 Comprehensive income $ 892 $ 1,231 $ 2,068 $ (3,299 ) $ 892 Condensed Consolidating Balance Sheet September 30, 2018 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Assets Cash and cash equivalents Noninterest-bearing $ 50 $ — $ 752 $ — $ 802 Interest-bearing 5 — 2,965 — 2,970 Interest-bearing — intercompany 913 — 569 (1,482 ) — Total cash and cash equivalents 968 — 4,286 (1,482 ) 3,772 Equity securities — — 514 — 514 Available-for-sale securities — — 24,122 — 24,122 Held-to-maturity securities — — 2,269 (23 ) 2,246 Loans held-for-sale, net — — 425 — 425 Finance receivables and loans, net Finance receivables and loans, net 4,379 — 122,226 — 126,605 Intercompany loans to Nonbank subsidiaries 821 — 405 (1,226 ) — Allowance for loan losses (98 ) — (1,150 ) — (1,248 ) Total finance receivables and loans, net 5,102 — 121,481 (1,226 ) 125,357 Investment in operating leases, net 7 — 8,571 — 8,578 Intercompany receivables from Bank subsidiary 113 — — (113 ) — Nonbank subsidiaries 44 — 121 (165 ) — Investment in subsidiaries Bank subsidiary 16,057 16,057 — (32,114 ) — Nonbank subsidiaries 6,999 — — (6,999 ) — Premiums receivable and other insurance assets — — 2,291 — 2,291 Other assets 2,220 — 4,999 (1,423 ) 5,796 Total assets $ 31,510 $ 16,057 $ 169,079 $ (43,545 ) $ 173,101 Liabilities Deposit liabilities Noninterest-bearing $ — $ — $ 180 $ — $ 180 Interest-bearing 3 — 101,196 — 101,199 Interest-bearing — intercompany — — 913 (913 ) — Total deposit liabilities 3 — 102,289 (913 ) 101,379 Short-term borrowings 2,575 — 4,763 — 7,338 Long-term debt 14,111 — 31,431 — 45,542 Intercompany debt to Bank subsidiary 23 — — (23 ) — Nonbank subsidiaries 974 — 821 (1,795 ) — Intercompany payables to Bank subsidiary 45 — — (45 ) — Nonbank subsidiaries 117 — 81 (198 ) — Interest payable 242 — 470 — 712 Unearned insurance premiums and service revenue — — 3,020 — 3,020 Accrued expenses and other liabilities 335 — 3,148 (1,458 ) 2,025 Total liabilities 18,425 — 146,023 (4,432 ) 160,016 Total equity 13,085 16,057 23,056 (39,113 ) 13,085 Total liabilities and equity $ 31,510 $ 16,057 $ 169,079 $ (43,545 ) $ 173,101 December 31, 2017 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Assets Cash and cash equivalents Noninterest-bearing $ 74 $ — $ 770 $ — $ 844 Interest-bearing 5 — 3,403 — 3,408 Interest-bearing — intercompany 1,138 — 695 (1,833 ) — Total cash and cash equivalents 1,217 — 4,868 (1,833 ) 4,252 Equity securities — — 518 — 518 Available-for-sale securities — — 22,303 — 22,303 Held-to-maturity securities — — 1,973 (74 ) 1,899 Loans held-for-sale, net — — 108 — 108 Finance receivables and loans, net Finance receivables and loans, net 7,434 — 115,459 — 122,893 Intercompany loans to Nonbank subsidiaries 879 — 408 (1,287 ) — Allowance for loan losses (185 ) — (1,091 ) — (1,276 ) Total finance receivables and loans, net 8,128 — 114,776 (1,287 ) 121,617 Investment in operating leases, net 19 — 8,722 — 8,741 Intercompany receivables from Bank subsidiary 80 — — (80 ) — Nonbank subsidiaries 71 — 77 (148 ) — Investment in subsidiaries Bank subsidiary 16,962 16,962 — (33,924 ) — Nonbank subsidiaries 8,111 — — (8,111 ) — Premiums receivable and other insurance assets — — 2,082 (35 ) 2,047 Other assets 2,207 — 5,105 (1,649 ) 5,663 Total assets $ 36,795 $ 16,962 $ 160,532 $ (47,141 ) $ 167,148 Liabilities Deposit liabilities Noninterest-bearing $ — $ — $ 108 $ — $ 108 Interest-bearing 12 — 93,136 — 93,148 Interest-bearing — intercompany — — 1,139 (1,139 ) — Total deposit liabilities 12 — 94,383 (1,139 ) 93,256 Short-term borrowings 3,171 — 8,242 — 11,413 Long-term debt 17,966 — 26,260 — 44,226 Intercompany debt to Bank subsidiary 74 — — (74 ) — Nonbank subsidiaries 1,103 — 879 (1,982 ) — Intercompany payables to Bank subsidiary 4 — — (4 ) — Nonbank subsidiaries 132 — 127 (259 ) — Interest payable 200 — 175 — 375 Unearned insurance premiums and service revenue — — 2,604 — 2,604 Accrued expenses and other liabilities 639 — 2,790 (1,649 ) 1,780 Total liabilities 23,301 — 135,460 (5,107 ) 153,654 Total equity 13,494 16,962 25,072 (42,034 ) 13,494 Total liabilities and equity $ 36,795 $ 16,962 $ 160,532 $ (47,141 ) $ 167,148 Condensed Consolidating Statement of Cash Flows Nine months ended September 30, 2018 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Operating activities Net cash provided by operating activities $ 1,417 $ 2,050 $ 4,366 $ (4,489 ) $ 3,344 Investing activities Purchases of equity securities — — (652 ) — (652 ) Proceeds from sales of equity securities — — 715 — 715 Purchases of available-for-sale securities — — (5,669 ) — (5,669 ) Proceeds from sales of available-for-sale securities — — 637 — 637 Proceeds from repayments of available-for-sale securities — — 2,509 — 2,509 Purchases of held-to-maturity securities — — (436 ) — (436 ) Proceeds from repayments of held-to-maturity securities — — 107 — 107 Net change in investment securities — intercompany — — 51 (51 ) — Purchases of finance receivables and loans held-for-investment (131 ) — (5,577 ) 930 (4,778 ) Proceeds from sales of finance receivables and loans initially held-for-investment 983 — — (930 ) 53 Originations and repayments of finance receivables and loans held-for-investment and other, net 2,092 — (2,650 ) — (558 ) Net change in loans — intercompany 45 — (6 ) (39 ) — Purchases of operating lease assets — — (2,991 ) — (2,991 ) Disposals of operating lease assets 9 — 2,452 — 2,461 Capital contributions to subsidiaries (58 ) (6 ) — 64 — Returns of contributed capital 222 — — (222 ) — Net change in nonmarketable equity investments (14 ) — 11 — (3 ) Other, net 1 — (241 ) (1 ) (241 ) Net cash provided by (used in) investing activities 3,149 (6 ) (11,740 ) (249 ) (8,846 ) Financing activities Net change in short-term borrowings — third party (596 ) — (3,478 ) — (4,074 ) Net (decrease) increase in deposits (9 ) — 7,846 226 8,063 Proceeds from issuance of long-term debt — third party 51 — 14,705 — 14,756 Repayments of long-term debt — third party (3,393 ) — (9,601 ) — (12,994 ) Net change in debt — intercompany (143 ) — (73 ) 216 — Repurchase of common stock (630 ) — — — (630 ) Dividends paid — third party (179 ) — — — (179 ) Dividends paid and returns of contributed capital — intercompany — (2,050 ) (2,661 ) 4,711 — Capital contributions from parent — 6 58 (64 ) — Net cash (used in) provided by financing activities (4,899 ) (2,044 ) 6,796 5,089 4,942 Effect of exchange-rate changes on cash and cash equivalents — — (2 ) — (2 ) Net decrease in cash and cash equivalents and restricted cash (333 ) — (580 ) 351 (562 ) 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 September 30, $ 1,062 $ — $ 5,127 $ (1,482 ) $ 4,707 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. September 30, 2018 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Cash and cash equivalents as disclosed on the Condensed Consolidated Balance Sheet $ 968 $ — $ 4,286 $ (1,482 ) $ 3,772 Restricted cash included in other assets on the Condensed Consolidated Balance Sheet (a) 94 — 841 — 935 Total cash and cash equivalents and restricted cash as disclosed in the Condensed Consolidated Statement of Cash Flows $ 1,062 $ — $ 5,127 $ (1,482 ) $ 4,707 (a) Restricted cash balances relate primarily to Ally securitization arrangements. Refer to Note 10 for additional details describing the nature of restricted cash balances. Nine months ended September 30, 2017 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Operating activities Net cash provided by operating activities $ 3,701 $ 2,900 $ 3,019 $ (6,247 ) $ 3,373 Investing activities Purchases of equity securities — — (612 ) — (612 ) Proceeds from sales of equity securities — — 728 — 728 Purchases of available-for-sale securities — — (8,410 ) — (8,410 ) Proceeds from sales of available-for-sale securities — — 2,198 — 2,198 Proceeds from repayments of available-for-sale securities — — 2,002 — 2,002 Purchases of held-to-maturity securities — — (709 ) — (709 ) Proceeds from repayments of held-to-maturity securities — — 32 — 32 Net change in investment securities — intercompany 7 — 281 (288 ) — Purchases of finance receivables and loans held-for-investment (35 ) — (3,090 ) — (3,125 ) Proceeds from sales of finance receivables and loans initially held-for-investment 96 — 1,227 — 1,323 Originations and repayments of finance receivables and loans held-for-investment and other, net 259 — 2,718 (1,956 ) 1,021 Net change in loans — intercompany 2,159 — 232 (2,391 ) — Purchases of operating lease assets — — (2,844 ) — (2,844 ) Disposals of operating lease assets 7 — 4,402 — 4,409 Capital contributions to subsidiaries (1,200 ) — — 1,200 — Returns of contributed capital 1,031 — — (1,031 ) — Net change in nonmarketable equity investments — — (20 ) — (20 ) Other, net (20 ) — (39 ) (96 ) (155 ) Net cash provided by (used in) investing activities 2,304 — (1,904 ) (4,562 ) (4,162 ) Financing activities Net change in short-term borrowings — third party (245 ) — (2,255 ) — (2,500 ) Net (decrease) increase in deposits (153 ) — 12,698 (1,495 ) 11,050 Proceeds from issuance of long-term debt — third party 355 — 10,986 1,961 13,302 Repayments of long-term debt — third party (4,125 ) — (18,251 ) — (22,376 ) Net change in debt — intercompany (366 ) — (2,166 ) 2,532 — Repurchase of common stock (563 ) — — — (563 ) Dividends paid — third party (130 ) — — — (130 ) Dividends paid and returns of contributed capital — intercompany — (2,900 ) (4,459 ) 7,359 — Capital contributions from parent — — 1,200 (1,200 ) — Net cash used in financing activities (5,227 ) (2,900 ) (2,247 ) 9,157 (1,217 ) Effect of exchange-rate changes on cash and cash equivalents — — 3 — 3 Net increase (decrease) in cash and cash equivalents and restricted cash 778 — (1,129 ) (1,652 ) (2,003 ) Cash and cash equivalents and restricted cash at beginning of year 989 — 7,293 (401 ) 7,881 Cash and cash equivalents and restricted cash at September 30, $ 1,767 $ — $ 6,164 $ (2,053 ) $ 5,878 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. September 30, 2017 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Cash and cash equivalents as disclosed on the Condensed Consolidated Balance Sheet $ 1,574 $ — $ 4,903 $ (2,053 ) $ 4,424 Restricted cash included in other assets on the Condensed Consolidated Balance Sheet (a) 193 — 1,261 — 1,454 Total cash and cash equivalents and restricted cash as disclosed in the Condensed Consolidated Statement of Cash Flows $ 1,767 $ — $ 6,164 $ (2,053 ) $ 5,878 (a) Restricted cash balances relate primarily to Ally securitization arrangements. Refer to Note 10 for additional details describing the nature of restricted cash balances. |
