Ally Bank 2011 Annual Report Download - page 187

Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10−K
for the Amended Series A Preferred Stock included in Ally's Certificate of Incorporation. Ally may not redeem the Amended Series A Preferred Stock
before May 15, 2016, and after such time the Amended Series A Preferred Stock may be redeemed in certain circumstances. In the event of any liquidation,
dissolution or winding up of the affairs of Ally, holders of the Amended Series A Preferred Stock will be entitled to receive the liquidation amount per share
of Amended Series A Preferred Stock and an amount equal to all declared, but unpaid dividends declared prior to the date of payment out of assets available
for distribution, before any distribution is made for holders of stock that ranks junior in interest to the Amended Series A Preferred Stock, subject to the
rights of Ally's creditors.
The changes to the terms of the Existing Series A Preferred Stock pursuant to the terms of the Amendment were deemed substantive, and as a result,
the transaction was accounted for as a redemption of the Existing Series A Preferred Stock and the issuance of the Amended Series A Preferred Stock. The
Existing Series A Preferred Stock was removed at its carrying value, the Amended Series A Preferred Stock was recognized at its fair value, and the
difference of $32 million was recorded as an increase to retained earnings, which impacted the income available to common stockholders used for the
earnings per common share calculation.
Series G Preferred Stock
Effective June 30, 2009, we converted (the Conversion) from a Delaware limited liability company into a Delaware corporation in accordance with
applicable law. In connection with the Conversion, the 7% Cumulative Perpetual Preferred Stock (the Blocker Preferred) of Preferred Blocker Inc. (PBI), a
wholly owned subsidiary, was required to be converted into or exchanged for preferred stock. For this purpose, we had previously authorized for issuance
its 7% Fixed Rate Cumulative Perpetual Preferred Stock, Series G (the Series G Preferred Stock). Pursuant to the terms of a Certificate of Merger, effective
October 15, 2009, PBI merged with and into Ally with Ally continuing as the surviving entity. At that time, each share of the Blocker Preferred issued and
outstanding immediately prior to the effective time of the merger was converted into the right to receive an equal number of newly issued shares of Series G
Preferred Stock. In the aggregate, 2,576,601 shares of Series G Preferred Stock were issued to holders of the Blocker Preferred in connection with the
merger. The Series G Preferred Stock ranks equally in right of payment with each of our outstanding series of preferred stock in accordance with the terms
thereof.
The Series G Preferred Stock accrues dividends at a rate of 7% per annum. Dividends are payable quarterly, in arrears, only if and when declared by
Ally's Board of Directors. Subject to any other restrictions contained in the terms of any other series of stock or other agreements that Ally is or may
become subject to, at Ally's option and subject to Ally having obtained any required regulatory approvals, Ally may, subject to certain conditions, redeem
the Series G Preferred Stock, in whole or in part, at any time or from time to time, upon proper notice given, at a redemption price equal to the liquidation
amount plus the amount of any accrued and unpaid dividends thereon through the date of redemption. The Series G Preferred Stock generally is nonvoting
other than class−voting on certain matters under certain circumstances including generally, the authorization of senior capital stock or amendments that
adversely impact the Series G Preferred Stock. Ally is generally prohibited from making any Restricted Payments on or prior to January 1, 2014, and may
only make Restricted Payments after January 1, 2014, if certain conditions are satisfied. For this purpose, Restricted Payments include, subject to certain
exceptions, any dividend payment or distribution of assets on any common stock or any redemption, purchase, or other acquisition of any shares of common
stock.
21. Accumulated Other Comprehensive Income (Loss)
The following table presents changes, net of tax, in each component of accumulated other comprehensive income (loss).
($ in millions)
Unrealized
(losses) gains on
investment
securities (a)
Translation
adjustments and
net investment
hedges Cash flow hedges Defined benefit pension plans
Accumulated other
comprehensive
(loss) income
Balance at December 31, 2008 $ (72) $ (168) $ (28) $ (121) $ (389)
Net unrealized gains arising during the period 115 601 — 24 740
Less: Net realized losses reclassified to net income (108) — (1) — (109)
2009 net change 223 601 1 24 849
Balance at December 31, 2009 151 433 (27) (97) 460
Net unrealized gains (losses) arising during the period 320 (18) 33 (40) 295
Less: Net realized gains (losses) reclassified to net income 497 (1) — — 496
2010 net change (177) (17) 33 (40) (201)
Balance at December 31, 2010 (26) 416 6 (137) 259
Net unrealized gains (losses) arising during the period 196 (72) — (27) 97
Less: Net realized gains (losses) reclassified to net income 284 (8) — (7) 269
2011 net change (88) (64) — (20) (172)
Balance at December 31, 2011 $ (114) $ 352 $ 6 $ (157) $ 87
(a) Represents the after−tax difference between the fair value and amortized cost of our available−for−sale securities portfolio.
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