Ally Bank 2012 Annual Report Download - page 143

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Commercial Criticized Exposure
Finance receivables and loans classified as special mention, substandard, or doubtful are deemed as criticized. These classifications are
based on regulatory definitions and generally represent finance receivables and loans within our portfolio that have a higher default risk or
have already defaulted. The following table presents the percentage of total commercial criticized finance receivables and loans reported at
carrying value before allowance for loan losses by industry concentrations.
December 31, 2012 2011
Industry
Automotive 85.7% 82.9%
Manufacturing 5.5 1.8
Services 4.9 1.9
Other 3.9 13.4
Total commercial criticized finance receivables and loans 100.0% 100.0%
9. Investment in Operating Leases, Net
Investments in operating leases were as follows.
December 31, ($ in millions) 2012 2011
Vehicles and other equipment $ 16,009 $ 11,160
Accumulated depreciation (2,459) (1,885)
Investment in operating leases, net $ 13,550 $ 9,275
Depreciation expense on operating lease assets includes remarketing gains and losses recognized on the sale of operating lease assets.
The following summarizes the components of depreciation expense on operating lease assets.
Year ended December 31, ($ in millions) 2012 2011 2010
Depreciation expense on operating lease assets (excluding remarketing gains) $ 1,515 $ 1,158 $ 1,806
Remarketing gains (116) (217) (555)
Depreciation expense on operating lease assets $ 1,399 $ 941 $ 1,251
The following table presents the future lease nonresidual rental payments due from customers for equipment on operating leases.
Year ended December 31, ($ in millions)
2013 $ 2,573
2014 1,705
2015 618
2016 27
2017 and after —
Total $ 4,923
10. Securitizations and Variable Interest Entities
Overview
We are involved in several types of securitization and financing transactions that utilize special-purpose entities (SPEs). A SPE is an
entity that is designed to fulfill a specified limited need of the sponsor. Our principal use of SPEs is to obtain liquidity and favorable capital
treatment by securitizing certain of our financial assets.
The SPEs involved in securitization and other financing transactions are generally considered variable interest entities (VIEs). VIEs are
entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated
financial support or whose equity investors lack the ability to control the entity's activities. Due to the deconsolidation of ResCap, our
mortgage securitization activity and involvement with certain mortgage-related VIEs has substantially changed. Refer to Note 1 for additional
information related to ResCap.
Securitizations
We provide a wide range of consumer and commercial automobile loans, operating leases, other commercial loans, and mortgage loan
products to a diverse customer base. We often securitize these loans and leases (which we collectively describe as loans or financial assets)
through the use of securitization entities, which may or may not be consolidated on our Consolidated Balance Sheet. We securitize consumer
Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10-K