Ally Bank 2011 Annual Report Download - page 66

Table of Contents
Management's Discussion and Analysis
Ally Financial Inc. • Form 10−K
Corporate and Other
The following table summarizes the activities of Corporate and Other excluding discontinued operations for the periods shown. Corporate and Other
primarily consists of our centralized corporate treasury and deposit gathering activities, such as management of the cash and corporate investment securities
portfolios, short− and long−term debt, retail and brokered deposit liabilities, derivative instruments, the amortization of the discount associated with new
debt issuances and bond exchanges, most notably from the December 2008 bond exchange, and the residual impacts of our corporate funds−transfer pricing
and treasury ALM activities. Corporate and Other also includes our Commercial Finance Group, certain equity investments, and reclassifications and
eliminations between the reportable operating segments.
Year ended December 31, ($ in millions) 2011 2010 2009
Favorable/
(unfavorable)
2011−2010
% change
Favorable/
(unfavorable)
2010−2009
% change
Net financing loss
Total financing revenue and other interest income $ 138 $ 165 $ (78) (16) n/m
Interest expense
Original issue discount amortization 925 1,204 1,143 23 (5)
Other interest expense 907 1,060 1,239 14 14
Total interest expense 1,832 2,264 2,382 19 5
Net financing loss (1,694) (2,099) (2,460) 19 15
Other revenue
(Loss) gain on extinguishment of debt (64) (123) 661 48 (119)
Other gain on investments, net 119 146 85 (18) 72
Other income, net of losses 135 (65) 194 n/m (134)
Total other revenue (expense) 190 (42) 940 n/m (104)
Total net expense (1,504) (2,141) (1,520) 30 (41)
Provision for loan losses (89) (42) 491 112 109
Noninterest expense
Compensation and benefits expense 475 614 405 23 (52)
Other operating expense 17 (88) 74 (119) n/m
Total noninterest expense 492 526 479 6 (10)
Loss from continuing operations before income tax expense $ (1,907) $ (2,625) $ (2,490) 27 (5)
Total assets $ 29,641 $ 28,561 $ 32,714 4 (13)
n/m = not meaningful
The following table summarizes the components of net financing losses for Corporate and Other.
At and for the year ended December 31, ($ in millions) 2011 2010 2009
Original issue discount amortization
2008 bond exchange amortization $ (886) $ (1,158) $ (1,108)
Other debt issuance discount amortization (39) (46) (35)
Total original issue discount amortization (a) (925) (1,204) (1,143)
Net impact of the funds transfer pricing methodology
Cost of liquidity (708) (617) (655)
Funds−transfer pricing / cost of funds mismatch (342) (391) (672)
Benefit (cost) of net non−earning assets 186 8 (110)
Total net impact of the funds transfer pricing methodology (864) (1,000) (1,437)
Other (including Commercial Finance Group net financing revenue) 95 105 120
Total net financing losses for Corporate and Other $ (1,694) $ (2,099) $ (2,460)
Outstanding original issue discount balance $ 2,194 $ 3,169 $ 4,373
(a) Amortization is included as interest on long−term debt in the Consolidated Statement of Income.
63