Attached files
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| 8-K - FORM 8-K - Ally Financial Inc. | d354053d8k.htm |
Exhibit 99.1
ALLY FINANCIAL INC.
The following Unaudited Pro Forma Condensed Consolidated Financial Statements of Ally Financial Inc. and its consolidated subsidiaries (collectively, “Ally”, “we” and “our”) are included herein:
| • | Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2012 |
| • | Unaudited Pro Forma Condensed Consolidated Statement of Income for the three months ended March 31, 2012 |
| • | Unaudited Pro Forma Condensed Consolidated Statement of Income for the year ended December 31, 2011 |
| • | Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements |
The Unaudited Pro Forma Condensed Consolidated Financial Statements and the related Notes presented reflect the deconsolidation of Residential Capital, LLC (“ResCap”) and its consolidated subsidiaries (collectively, “ResCap”) as a result of the filing by ResCap and certain of its subsidiaries on May 14, 2012 (the “Petition Date”) for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Ally has determined that, as a result of the bankruptcy filing and beginning on the Petition Date, ResCap will be deconsolidated from Ally’s financial statements.
The Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared by applying pro forma adjustments to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2011 and our Unaudited Condensed Consolidated Financial Statements included in our Quarterly Report on Form 10-Q for the period ended March 31, 2012. The Unaudited Pro Forma Condensed Consolidated Statements of Income for the three months ended March 31, 2012 and the year ended December 31, 2011 reflect the deconsolidation of ResCap, assuming the bankruptcy filing had occurred as of the beginning of the year ended December 31, 2011. The Unaudited Pro Forma Condensed Consolidated Balance Sheet reflects the deconsolidation of ResCap, assuming the bankruptcy filing had occurred on March 31, 2012. The pro forma adjustments, as described in the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements, are based on currently available information. While such adjustments are subject to change, management believes such adjustments are reasonable and directly attributable to the deconsolidation of ResCap.
The Unaudited Pro Forma Condensed Consolidated Financial Statements are presented for informational purposes only and are not necessarily indicative of the operating results or financial position that would have occurred had the bankruptcy filing occurred on, or as of, the dates indicated, nor are they necessarily indicative of future operating results or financial position.
ALLY FINANCIAL INC.
CONDENSED CONSOLIDATED BALANCE SHEET (unaudited)
| ($ in millions) |
March 31, 2012 As Reported (a) |
Less: Deconsolidation of ResCap (b) |
Pro Forma Adjustments (c) |
Pro Forma | ||||||||||||
| Assets |
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| Cash and cash equivalents |
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| Noninterest-bearing |
$ | 2,279 | $ | (500 | ) | $ | 1 | $ | 1,780 | |||||||
| Interest-bearing |
10,800 | (153 | ) | — | 10,647 | |||||||||||
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| Total cash and cash equivalents |
13,079 | (653 | ) | 1 | 12,427 | |||||||||||
| Trading assets |
895 | (32 | ) | — | 863 | |||||||||||
| Investment securities |
14,942 | — | — | 14,942 | ||||||||||||
| Loans held-for-sale, net |
6,670 | (4,271 | ) | — | 2,399 | |||||||||||
| Finance receivables and loans, net |
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| Finance receivables and loans, net |
119,818 | (1,038 | ) | 1,410 | (d) | 120,190 | ||||||||||
| Allowance for loan losses |
(1,546 | ) | 29 | — | (1,517 | ) | ||||||||||
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| Total finance receivables and loans, net |
118,272 | (1,009 | ) | 1,410 | (d) | 118,673 | ||||||||||
| Investment in operating leases, net |
10,048 | — | — | 10,048 | ||||||||||||
| Mortgage servicing rights |
2,595 | (1,254 | ) | — | 1,341 | |||||||||||
| Premiums receivable and other insurance assets |
1,876 | (3 | ) | — | 1,873 | |||||||||||
| Other assets |
16,965 | (8,454 | ) | 6,975 | (e)(f) | 15,486 | ||||||||||
| Assets of operations held-for-sale |
1,008 | — | — | 1,008 | ||||||||||||
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| Total assets |
$ | 186,350 | $ | (15,676 | ) | $ | 8,386 | $ | 179,060 | |||||||
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| Liabilities |
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| Deposit liabilities |
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| Noninterest-bearing |
$ | 2,314 | $ | — | $ | 1 | $ | 2,315 | ||||||||
| Interest-bearing |
44,892 | — | 81 | 44,973 | ||||||||||||
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| Total deposit liabilities |
47,206 | — | 82 | 47,288 | ||||||||||||
| Short-term borrowings |
7,203 | (818 | ) | 660 | (d) | 7,045 | ||||||||||
| Long-term debt |
93,990 | (5,889 | ) | 750 | (d) | 88,851 | ||||||||||
| Interest payable |
1,675 | (124 | ) | — | 1,551 | |||||||||||
| Unearned insurance premiums and service revenue |
2,632 | — | — | 2,632 | ||||||||||||
| Reserves for insurance losses and loss adjustment expenses |
565 | (87 | ) | — | 478 | |||||||||||
| Accrued expenses and other liabilities |
13,089 | (8,359 | ) | 6,495 | (e) | 11,225 | ||||||||||
| Liabilities of operations held-for-sale |
323 | — | — | 323 | ||||||||||||
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| Total liabilities |
166,683 | (15,277 | ) | 7,987 | 159,393 | |||||||||||
| Equity |
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| Common stock and paid-in capital |
19,668 | — | — | 19,668 | ||||||||||||
| Mandatorily convertible preferred stock held by U.S. Department of Treasury |
5,685 | — | — | 5,685 | ||||||||||||
| Preferred stock |
1,255 | — | — | 1,255 | ||||||||||||
| Accumulated deficit |
(7,215 | ) | — | — | (7,215 | ) | ||||||||||
| Accumulated other comprehensive income |
274 | — | — | 274 | ||||||||||||
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| Total equity |
19,667 | (399 | ) | 399 | (f) | 19,667 | ||||||||||
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| Total liabilities and equity |
$ | 186,350 | $ | (15,676 | ) | $ | 8,386 | $ | 179,060 | |||||||
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See the notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.
ALLY FINANCIAL INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME (unaudited)
| ($ in millions) |
Three months ended March 31, 2012 As Reported (a) |
Less: Deconsolidation of ResCap (g) |
Pro Forma Adjustments (h) |
Pro Forma | ||||||||||||
| Financing revenue and other interest income |
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| Interest and fees on finance receivables and loans |
$ | 1,678 | $ | (49 | ) | $ | 12 | $ | 1,641 | |||||||
| Interest on loans held-for-sale |
73 | (42 | ) | — | 31 | |||||||||||
| Interest on trading assets |
11 | (2 | ) | — | 9 | |||||||||||
| Interest and dividends on available-for-sale investment securities |
84 | — | — | 84 | ||||||||||||
| Interest-bearing cash |
14 | (2 | ) | — | 12 | |||||||||||
| Operating leases |
540 | — | — | 540 | ||||||||||||
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| Total financing revenue and other interest income |
2,400 | (95 | ) | 12 | 2,317 | |||||||||||
| Interest expense |
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| Interest on deposits |
186 | — | — | 186 | ||||||||||||
| Interest on short-term borrowings |
75 | (13 | ) | — | 62 | |||||||||||
| Interest on long-term debt |
1,177 | (91 | ) | 12 | 1,098 | |||||||||||
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| Total interest expense |
1,438 | (104 | ) | 12 | 1,346 | |||||||||||
| Depreciation expense on operating lease assets |
293 | — | — | 293 | ||||||||||||
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| Net financing revenue |
669 | 9 | — | 678 | ||||||||||||
| Other revenue |
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| Servicing fees |
310 | (189 | ) | 1 | 122 | |||||||||||
| Servicing asset valuation and hedge activities, net |
9 | (115 | ) | — | (106 | ) | ||||||||||
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| Total servicing income, net |
319 | (304 | ) | — | 16 | |||||||||||
| Insurance premiums and service revenue earned |
375 | (4 | ) | — | 371 | |||||||||||
| Gain on mortgage and automotive loans, net |
126 | (107 | ) | 1 | 20 | |||||||||||
| Other gain on investments, net |
90 | — | — | 90 | ||||||||||||
| Other income, net of losses |
277 | (21 | ) | 27 | 283 | |||||||||||
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| Total other revenue |
1,187 | (436 | ) | 29 | 780 | |||||||||||
| Total net revenue |
1,856 | (427 | ) | 29 | 1,458 | |||||||||||
| Provision for loan losses |
140 | 1 | (1 | ) | 140 | |||||||||||
| Noninterest expense |
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| Compensation and benefits expense |
475 | (103 | ) | — | 372 | |||||||||||
| Insurance losses and loss adjustment expenses |
159 | (4 | ) | — | 155 | |||||||||||
| Other operating expenses |
716 | (202 | ) | 26 | 540 | |||||||||||
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| Total noninterest expense |
1,350 | (309 | ) | 26 | 1,067 | |||||||||||
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| Income from continuing operations before income tax expense |
$ | 366 | $ | (119 | ) | $ | 4 | $ | 251 | |||||||
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See the notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.
ALLY FINANCIAL INC.
CONSOLIDATED STATEMENT OF INCOME (unaudited)
| ($ in millions) |
Year
ended December 31, 2011 As Reported (i) |
Less: Deconsolidation of ResCap (g) |
Pro Forma Adjustments (h) |
Pro Forma | ||||||||||||
| Financing revenue and other interest income |
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| Interest and fees on finance receivables and loans |
$ | 6,635 | $ | (221 | ) | $ | 46 | $ | 6,460 | |||||||
| Interest on loans held-for-sale |
332 | (152 | ) | — | 180 | |||||||||||
| Interest on trading assets |
19 | (11 | ) | — | 8 | |||||||||||
| Interest and dividends on available-for-sale investment securities |
398 | (1 | ) | — | 397 | |||||||||||
| Interest-bearing cash |
54 | (6 | ) | — | 48 | |||||||||||
| Operating leases |
2,298 | — | — | 2,298 | ||||||||||||
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| Total financing revenue and other interest income |
9,736 | (391 | ) | 46 | 9,391 | |||||||||||
| Interest expense |
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| Interest on deposits |
700 | — | 1 | 701 | ||||||||||||
| Interest on short-term borrowings |
314 | (55 | ) | — | 259 | |||||||||||
| Interest on long-term debt |
5,209 | (379 | ) | 45 | 4,875 | |||||||||||
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| Total interest expense |
6,223 | (434 | ) | 46 | 5,835 | |||||||||||
| Depreciation expense on operating lease assets |
1,038 | — | — | 1,038 | ||||||||||||
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| Net financing revenue |
2,475 | 43 | — | 2,518 | ||||||||||||
| Other revenue |
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| Servicing fees |
1,358 | (840 | ) | 6 | 524 | |||||||||||
| Servicing asset valuation and hedge activities, net |
(789 | ) | 356 | — | (433 | ) | ||||||||||
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| Total servicing income, net |
569 | (484 | ) | 6 | 91 | |||||||||||
| Insurance premiums and service revenue earned |
1,573 | (17 | ) | — | 1,556 | |||||||||||
| Gain on mortgage and automotive loans, net |
470 | (222 | ) | (19 | ) | 229 | ||||||||||
| Loss on extinguishment of debt |
(64 | ) | — | — | (64 | ) | ||||||||||
| Other gain on investments, net |
294 | — | — | 294 | ||||||||||||
| Other income, net of losses |
754 | 48 | 79 | 881 | ||||||||||||
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| Total other revenue |
3,596 | (675 | ) | 66 | 2,987 | |||||||||||
| Total net revenue |
6,071 | (632 | ) | 66 | 5,505 | |||||||||||
| Provision for loan losses |
219 | (24 | ) | (3 | ) | 192 | ||||||||||
| Noninterest expense |
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| Compensation and benefits expense |
1,574 | (320 | ) | — | 1,254 | |||||||||||
| Insurance losses and loss adjustment expenses |
713 | (31 | ) | — | 682 | |||||||||||
| Other operating expenses |
3,498 | (1,087 | ) | 72 | 2,483 | |||||||||||
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| Total noninterest expense |
5,785 | (1,438 | ) | 72 | 4,419 | |||||||||||
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| Income from continuing operations before income tax expense |
$ | 67 | $ | 830 | $ | (3 | ) | $ | 894 | |||||||
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See the notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.
ALLY FINANCIAL INC.
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
| (a) | Amounts represent historical financial information from our Quarterly Report on Form 10-Q for the period ended March 31, 2012. |
| (b) | Reflects the reclassification of the previously consolidated assets and liabilities of ResCap to unconsolidated investments. |
| (c) | We have made no adjustments to the Unaudited Pro Forma Condensed Balance Sheet as of March 31, 2012 for intercompany transactions that occurred subsequent to March 31, 2012. |
| (d) | Amount was reclassified as finance receivables and loans, net for financial statement presentation. Prior to the deconsolidation, these amounts were considered intercompany short-term borrowings and intercompany long-term debt and eliminated in the consolidation process. Subsequent to the deconsolidation, these amounts are shown as transactions with affiliates. |
| (e) | Amount, which includes derivatives, was reclassified as other assets for financial statement presentation. Prior to the deconsolidation, these amounts were considered intercompany accrued expenses and other liabilities and eliminated in the consolidation process. Subsequent to the deconsolidation, these amounts are shown as transactions with affiliates. |
| (f) | Subsequent to the deconsolidation, we will account for our investment in ResCap using the cost method of accounting. For purposes of the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2012 we have valued our investment in ResCap at an amount equal to the carrying value at that time. |
| (g) | Represents the Condensed Consolidated Statement of Income of ResCap for the three months ended March 31, 2012 and for the year ended December 31, 2011. |
| (h) | Adjustments relate to normal recurring intercompany transactions between Ally and ResCap, which as a result of the deconsolidation would no longer be eliminated. |
| (i) | Amounts represent historical financial information from our Annual Report on Form 10-K for the year ended December 31, 2011. |