| 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, 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 September 30, 2019 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Financing revenue and other interest income Interest and fees on finance receivables and loans $ (52 ) $ — $ 1,914 $ (3 ) $ 1,859 Interest and fees on finance receivables and loans — intercompany 4 — 1 (5 ) — Interest on loans held-for-sale — — 8 — 8 Interest and dividends on investment securities and other earning assets — — 237 — 237 Interest on cash and cash equivalents 2 — 17 — 19 Interest on cash and cash equivalents — intercompany 3 — 5 (8 ) — Operating leases — — 368 — 368 Total financing (loss) revenue and other interest income (43 ) — 2,550 (16 ) 2,491 Interest expense Interest on deposits — — 658 — 658 Interest on short-term borrowings 15 — 18 — 33 Interest on long-term debt 215 — 163 — 378 Interest on intercompany debt 6 — 7 (13 ) — Total interest expense 236 — 846 (13 ) 1,069 Net depreciation expense on operating lease assets 1 — 233 — 234 Net financing (loss) revenue (280 ) — 1,471 (3 ) 1,188 Cash dividends from subsidiaries Bank subsidiary 550 550 — (1,100 ) — Nonbank subsidiaries 52 — (1 ) (51 ) — Other revenue Insurance premiums and service revenue earned — — 280 — 280 Gain on mortgage and automotive loans, net 1 — 9 — 10 Other gain on investments, net 2 — 25 — 27 Other income, net of losses 72 — 143 (119 ) 96 Total other revenue 75 — 457 (119 ) 413 Total net revenue 397 550 1,927 (1,273 ) 1,601 Provision for loan losses 3 — 259 1 263 Noninterest expense Compensation and benefits expense 9 — 287 — 296 Insurance losses and loss adjustment expenses — — 74 — 74 Other operating expenses 124 — 463 (119 ) 468 Total noninterest expense 133 — 824 (119 ) 838 Income from continuing operations before income tax expense and undistributed income (loss) of subsidiaries 261 550 844 (1,155 ) 500 Income tax (benefit) expense from continuing operations (117 ) — 236 — 119 Net income from continuing operations 378 550 608 (1,155 ) 381 Income (loss) from discontinued operations, net of tax 1 — (1 ) — — Undistributed income (loss) of subsidiaries Bank subsidiary 17 17 — (34 ) — Nonbank subsidiaries (15 ) — — 15 — Net income 381 567 607 (1,174 ) 381 Other comprehensive income, net of tax 106 80 109 (189 ) 106 Comprehensive income $ 487 $ 647 $ 716 $ (1,363 ) $ 487 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 on cash and cash equivalents — 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 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 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 Nine months ended September 30, 2019 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Financing revenue and other interest income Interest and fees on finance receivables and loans $ (172 ) $ — $ 5,704 $ (6 ) $ 5,526 Interest and fees on finance receivables and loans — intercompany 10 — 4 (14 ) — Interest on loans held-for-sale — — 13 — 13 Interest and dividends on investment securities and other earning assets — — 721 — 721 Interest on cash and cash equivalents 8 — 55 — 63 Interest on cash and cash equivalents — intercompany 8 — 13 (21 ) — Operating leases 1 — 1,091 — 1,092 Total financing (loss) revenue and other interest income (145 ) — 7,601 (41 ) 7,415 Interest expense Interest on deposits — — 1,901 — 1,901 Interest on short-term borrowings 41 — 73 — 114 Interest on long-term debt 638 — 566 — 1,204 Interest on intercompany debt 17 — 18 (35 ) — Total interest expense 696 — 2,558 (35 ) 3,219 Net depreciation expense on operating lease assets 3 — 716 — 719 Net financing (loss) revenue (844 ) — 4,327 (6 ) 3,477 Cash dividends from subsidiaries Bank subsidiary 1,450 1,450 — (2,900 ) — Nonbank subsidiaries 188 — (1 ) (187 ) — Other revenue Insurance premiums and service revenue earned — — 802 — 802 Gain on mortgage and automotive loans, net 4 — 18 — 22 Other gain on investments, net 2 — 172 — 174 Other income, net of losses 266 — 432 (422 ) 276 Total other revenue 272 — 1,424 (422 ) 1,274 Total net revenue 1,066 1,450 5,750 (3,515 ) 4,751 Provision for loan losses 35 — 704 (17 ) 722 Noninterest expense Compensation and benefits expense 30 — 880 — 910 Insurance losses and loss adjustment expenses — — 260 — 260 Other operating expenses 438 — 1,363 (422 ) 1,379 Total noninterest expense 468 — 2,503 (422 ) 2,549 Income from continuing operations before income tax expense and undistributed income of subsidiaries 563 1,450 2,543 (3,076 ) 1,480 Income tax (benefit) expense from continuing operations (467 ) — 607 — 140 Net income from continuing operations 1,030 1,450 1,936 (3,076 ) 1,340 Loss from discontinued operations, net of tax (2 ) — (1 ) — (3 ) Undistributed income of subsidiaries Bank subsidiary 184 184 — (368 ) — Nonbank subsidiaries 125 — — (125 ) — Net income 1,337 1,634 1,935 (3,569 ) 1,337 Other comprehensive income, net of tax 721 546 740 (1,286 ) 721 Comprehensive income $ 2,058 $ 2,180 $ 2,675 $ (4,855 ) $ 2,058 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 on cash and cash equivalents — 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 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 Condensed Consolidating Balance Sheet September 30, 2019 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Assets Cash and cash equivalents Noninterest-bearing $ 51 $ — $ 672 $ — $ 723 Interest-bearing 12 — 2,882 — 2,894 Interest-bearing — intercompany 2,004 — 1,044 (3,048 ) — Total cash and cash equivalents 2,067 — 4,598 (3,048 ) 3,617 Equity securities — — 570 — 570 Available-for-sale securities — — 29,384 — 29,384 Held-to-maturity securities — — 2,630 (12 ) 2,618 Loans held-for-sale, net — — 1,000 — 1,000 Finance receivables and loans, net Finance receivables and loans, net 2,383 — 126,214 12 128,609 Intercompany loans to Nonbank subsidiaries 118 — 98 (216 ) — Allowance for loan losses (31 ) — (1,246 ) — (1,277 ) Total finance receivables and loans, net 2,470 — 125,066 (204 ) 127,332 Investment in operating leases, net 1 — 8,652 — 8,653 Intercompany receivables from Bank subsidiary 255 — — (255 ) — Nonbank subsidiaries 50 — 100 (150 ) — Investment in subsidiaries Bank subsidiary 16,981 16,981 — (33,962 ) — Nonbank subsidiaries 7,010 — — (7,010 ) — Premiums receivable and other insurance assets — — 2,521 — 2,521 Other assets 2,044 — 5,354 (1,608 ) 5,790 Total assets $ 30,878 $ 16,981 $ 179,875 $ (46,249 ) $ 181,485 Liabilities and equity Deposit liabilities Noninterest-bearing $ — $ — $ 156 $ — $ 156 Interest-bearing 1 — 119,073 — 119,074 Interest-bearing — intercompany — — 2,004 (2,004 ) — Total deposit liabilities 1 — 121,233 (2,004 ) 119,230 Short-term borrowings 2,501 — 2,834 — 5,335 Long-term debt 12,319 — 23,411 — 35,730 Intercompany debt to Bank subsidiary 12 — — (12 ) — Nonbank subsidiaries 1,142 — 118 (1,260 ) — Intercompany payables to Bank subsidiary 36 — — (36 ) — Nonbank subsidiaries 109 — 277 (386 ) — Interest payable 182 — 712 — 894 Unearned insurance premiums and service revenue — — 3,246 — 3,246 Accrued expenses and other liabilities 126 — 4,065 (1,591 ) 2,600 Total liabilities 16,428 — 155,896 (5,289 ) 167,035 Total equity 14,450 16,981 23,979 (40,960 ) 14,450 Total liabilities and equity $ 30,878 $ 16,981 $ 179,875 $ (46,249 ) $ 181,485 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 Nine months ended September 30, 2019 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Operating activities Net cash provided by operating activities $ 1,157 $ 1,450 $ 3,598 $ (3,072 ) $ 3,133 Investing activities Purchases of equity securities — — (301 ) — (301 ) Proceeds from sales of equity securities — — 615 — 615 Purchases of available-for-sale securities — — (11,214 ) — (11,214 ) Proceeds from sales of available-for-sale securities — — 5,699 — 5,699 Proceeds from repayments of available-for-sale securities — — 3,246 — 3,246 Purchases of held-to-maturity securities — — (514 ) — (514 ) Proceeds from repayments of held-to-maturity securities — — 195 — 195 Net change in investment securities — intercompany — — 9 (9 ) — Purchases of finance receivables and loans held-for-investment — — (3,857 ) 535 (3,322 ) Proceeds from sales of finance receivables and loans initially held-for-investment 548 — 414 (535 ) 427 Originations and repayments of finance receivables and loans held-for-investment and other, net (519 ) — 3,582 6 3,069 Net change in loans — intercompany 761 — 296 (1,057 ) — Purchases of operating lease assets — — (2,937 ) — (2,937 ) Disposals of operating lease assets 3 — 2,013 — 2,016 Capital contributions to subsidiaries (1 ) — — 1 — Returns of contributed capital 29 — — (29 ) — Net change in nonmarketable equity investments (12 ) — 191 — 179 Other, net (2 ) — (305 ) 1 (306 ) Net cash provided by (used in) investing activities 807 — (2,868 ) (1,087 ) (3,148 ) Financing activities Net change in short-term borrowings — third party 24 — (4,676 ) — (4,652 ) Net increase in deposits — — 13,788 (756 ) 13,032 Proceeds from issuance of long-term debt — third party 771 — 4,667 — 5,438 Repayments of long-term debt — third party (1,304 ) — (12,810 ) — (14,114 ) Net change in debt — intercompany 219 — (761 ) 542 — Repurchase of common stock (740 ) — — — (740 ) Dividends paid — third party (206 ) — — — (206 ) Dividends paid and returns of contributed capital — intercompany — (1,450 ) (1,646 ) 3,096 — Capital contributions from parent — — 1 (1 ) — Net cash used in financing activities (1,236 ) (1,450 ) (1,437 ) 2,881 (1,242 ) Effect of exchange-rate changes on cash and cash equivalents and restricted cash — — 2 — 2 Net decrease in cash and cash equivalents and restricted cash 728 — (705 ) (1,278 ) (1,255 ) 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 September 30, $ 2,126 $ — $ 5,293 $ (3,048 ) $ 4,371 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, 2019 ($ in millions) Parent Guarantors Nonguarantors Consolidating adjustments Ally consolidated Cash and cash equivalents on the Condensed Consolidated Balance Sheet $ 2,067 $ — $ 4,598 $ (3,048 ) $ 3,617 Restricted cash included in other assets on the Condensed Consolidated Balance Sheet (a) 59 — 695 — 754 Total cash and cash equivalents and restricted cash in the Condensed Consolidated Statement of Cash Flows $ 2,126 $ — $ 5,293 $ (3,048 ) $ 4,371 (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, 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 and restricted cash — — (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 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 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. |
