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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported): February 13, 2017 (February 13, 2017)
 
OneMain Holdings, Inc.

(Exact name of registrant as specified in its charter)
 
Delaware
001-36129
27-3379612
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
601 N.W. Second Street,
Evansville, Indiana 47708
(Address of principal executive offices)(Zip Code)
(812) 424-8031
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
 
 
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




 
 
 
 
 





Item 2.02
Results of Operations and Financial Condition.

On February 13, 2017, OneMain Holdings, Inc. (the “Company”) issued a press release announcing the Company’s results for its fiscal quarter ended December 31, 2016. A copy of the Company’s press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference in its entirety.

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.

Item 9.01
Financial Statements and Exhibits.

(d)     Exhibits.

Exhibit Number
 
Description
99.1
 
Press Release issued February 13, 2017.







Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
ONEMAIN HOLDINGS, INC.
 
 
 
(Registrant)
 
 
 
 
Date:
February 13, 2017
By:
/s/ Scott T. Parker
 
 
 
Scott T. Parker
 
 
 
Executive Vice President and Chief Financial Officer







Exhibit Index

Exhibit Number
 
Description
99.1
 
Press Release issued February 13, 2017.



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit



Exhibit 99.1

ONEMAIN HOLDINGS, INC. REPORTS FOURTH QUARTER 2016 RESULTS

Evansville, IN, February 13, 2017 - OneMain Holdings, Inc. (NYSE: OMF) today reported income before provision for income taxes of $29 million and net income of $27 million for the fourth quarter of 2016, compared to a loss before provision for income taxes of $302 million and a net loss of $197 million the prior year quarter. Earnings per diluted share were $0.20 in the fourth quarter of 2016, compared to a loss of $1.46 in the prior year quarter.

Net income was $215 million for the full year of 2016, compared to a loss of $220 million in the prior year. Earnings per diluted share were $1.59 for the full year of 2016, compared to a loss of $1.72 in the prior year.

Jay Levine, President and CEO of OneMain Holdings, Inc. said, “2016 was an incredibly important and transformational year for us. We began the year having just closed the OneMain acquisition, and over the course of the year we have made significant progress in bringing our organization together. I am incredibly proud of our entire team for the tremendous effort they put in throughout the year. Our entire nationwide branch network is now on a unified origination and servicing platform, enhancing our ability to drive very solid returns and to build meaningful shareholder value.”

Consumer and Insurance Segment*

Consumer and Insurance adjusted pretax earnings were $175 million and adjusted net income was $108 million for the fourth quarter of 2016, compared to adjusted pretax earnings of $143 million and adjusted net income of $89 million for the prior year quarter. Consumer and Insurance adjusted earnings per diluted share were $0.80 for the fourth quarter of 2016, compared to $0.66 for the prior year quarter.

Net finance receivables reached $13.5 billion at December 31, 2016, up from $13.0 billion at December 31, 2015.

Net finance receivables per branch totaled $7.4 million at December 31, 2016, up from $7.1 million at December 31, 2015.

Yield was 24.3% and risk adjusted yield, which represents yield less net charge-off ratio, was 16.8% in the fourth quarter of 2016.

The net charge-off ratio was 7.5% in the fourth quarter of 2016.

The 30-89 delinquency ratio was 2.3% at December 31, 2016, down from 2.6% at September 30, 2016 and up from 2.2% at December 31, 2015.

The 60+ delinquency ratio was 3.6% at December 31, 2016, up from 3.3% at September 30, 2016 and up from 3.0% at December 31, 2015.


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Acquisitions and Servicing Segment*

Acquisitions and Servicing adjusted pretax earnings were $2 million in the fourth quarter of 2016, compared to $28 million in the prior year quarter. Net finance receivables at December 31, 2016 were zero as a result of the sale of the company’s interests in SpringCastle on March 31, 2016.

Real Estate Segment*

Real Estate adjusted pretax losses were $7 million in the fourth quarter of 2016, compared to $34 million in the prior year quarter. Net finance receivables, including finance receivables held for sale, were $308 million at December 31, 2016, compared to $747 million at December 31, 2015.

*Reported on a non-GAAP basis. Refer to the required reconciliations of non-GAAP to comparable GAAP measures at the end of this press release.

Liquidity and Capital Resources

As of December 31, 2016, the company had $579 million of cash and cash equivalents, which included $264 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that is unavailable for general corporate purposes. The company had undrawn conduit financing facilities of $4.8 billion and had total outstanding debt of $14.0 billion at December 31, 2016, in a variety of debt instruments.

Use of Non-GAAP Financial Measures

We report the operating results of our Consumer and Insurance segment, Acquisitions and Servicing segment, Real Estate segment, and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, primarily interest expense, loan loss reserves and acquisition costs to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). These allocations and adjustments currently have a material effect on our reported segment basis income as compared to GAAP. We believe the Segment Accounting Basis (a basis other than GAAP) provides investors a consistent basis on which management evaluates segment performance.

Consumer and Insurance adjusted pretax earnings, Consumer and Insurance adjusted net income, Consumer and Insurance adjusted earnings per diluted share, Acquisitions and Servicing adjusted pretax earnings, Real Estate adjusted pretax earnings and Other adjusted pretax earnings are key performance measures used by management in evaluating the performance of our business. Consumer and Insurance adjusted pretax earnings, Acquisitions and Servicing adjusted pretax earnings, Real Estate adjusted pretax earnings and Other adjusted pretax earnings represents income (loss) before provision for (benefit from) income taxes on a Segment Accounting Basis and excludes acquisition-related transaction and integration expenses, net gain (loss) on sales of personal and real estate loans, net gain on sale of SpringCastle interests, SpringCastle transaction costs, losses resulting from repurchases and repayments of debt, debt refinance costs, and net loss on liquidation of our United Kingdom subsidiary. Management believes these non-GAAP financial measures are useful in assessing the profitability of our segments and uses these non-GAAP financial measures in evaluating our operating performance. These non-GAAP financial measures should be considered supplemental to, but not as a substitute for or superior to, income (loss) before provision for (benefit from) income taxes, net income, or other measures of financial performance prepared in accordance with GAAP.

Conference Call & Webcast Information

OneMain management will host a conference call and webcast to discuss our fourth quarter 2016 results and other general matters at 8:00 am Eastern Time on Tuesday, February 14, 2017. Both the call and webcast are open to the general public. The general public is invited to listen to the call by dialing 877-330-3668 (U.S. domestic), or

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678-304-6859 (international), conference ID 59799309, or via a live audio webcast through the Investor Relations section of the website. For those unable to listen to the live broadcast, a replay will be available on our website or by dialing 800-585-8367 (U.S. domestic), or 404-537-3406, conference ID 59799309, beginning approximately two hours after the event. The replay of the conference call will be available through May 14, 2017. An investor presentation will be available on the Investor Relations page of OneMain’s website at https://www.onemainfinancial.com prior to the start of the conference call.

This document contains summarized information concerning OneMain Holdings, Inc. (the “Company”) and the Company’s business, operations, financial performance and trends. No representation is made that the information in this document is complete. For additional financial, statistical and business related information, as well as information regarding business and segment trends, see the Company's most recent Annual Report on Form 10-K (“Form 10-K”) and Quarterly Reports on Form 10-Q (“Form 10-Qs”) filed with the U.S. Securities and Exchange Commission (the “SEC”), as well as the Company’s other reports filed with the SEC from time to time. Such reports are or will be available in the Investor Relations section of the Company's website (https://www.onemainfinancial.com) and the SEC's website (http://www.sec.gov).

Cautionary Note Regarding Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent only management’s current beliefs regarding future events. By their nature, forward-looking statements involve inherent risks, uncertainties and other important factors that may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. We caution you not to place undue reliance on these forward-looking statements that speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events. Forward-looking statements include, without limitation, statements concerning future plans, objectives, goals, projections, strategies, events or performance, and underlying assumptions and other statements related thereto. Statements preceded by, followed by or that otherwise include the words “anticipates,” “appears,” “are likely,” “believes,” “estimates,” “expects,” “foresees,” “intends,” “plans,” “projects” and similar expressions or future or conditional verbs such as “would,” “should,” “could,” “may,” or “will,” are intended to identify forward-looking statements. Important factors that could cause actual results, performance or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following: the inability to obtain, or delays in obtaining, cost savings and synergies from the OneMain Acquisition and risks and other uncertainties associated with the integration of the companies; unanticipated expenditures relating to the OneMain Acquisition; any litigation, fines or penalties that could arise relating to the OneMain Acquisition; the impact of the OneMain Acquisition on our relationships with employees and third parties; various risks relating to the Lendmark Sale, in connection with the previously disclosed Settlement Agreement with the U.S. Department of Justice; risks relating to continued compliance with the Settlement Agreement; changes in general economic conditions, including the interest rate environment in which we conduct business and the financial markets through which we can access capital and also invest cash flows from our Consumer and Insurance segment; levels of unemployment and personal bankruptcies; natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or branches or other operating facilities; war, acts of terrorism, riots, civil disruption, pandemics, disruptions in the operation of our information systems, cyber-attacks or other security breaches, or other events disrupting business or commerce; changes in the rate at which we can collect or potentially sell our finance receivables portfolio; the effectiveness of our credit risk scoring models in assessing the risk of customer unwillingness or lack of capacity to repay; changes in our ability to attract and retain employees or key executives to support our businesses; changes in the competitive environment in which we operate, including the demand for our products, customer responsiveness to our distribution channels, our ability to make technological improvements, and the strength and ability of our competitors to operate independently or to enter into business combinations that result in a more attractive range of customer products or provide greater financial resources; risks related to the acquisition or sale of assets or businesses or the formation, termination or operation of joint ventures or other strategic alliances or arrangements, including delinquencies, integration or

3




migration issues, increased costs of servicing, incomplete records, and retention of customers; the inability to successfully and timely expand our centralized loan servicing capabilities through the integration of the Springleaf and OneMain servicing facilities; risks associated with our insurance operations, including insurance claims that exceed our expectations or insurance losses that exceed our reserves; the inability to successfully implement our growth strategy for our consumer lending business as well as successfully acquiring portfolios of consumer loans, pursuing acquisitions, and/or establishing joint ventures; declines in collateral values or increases in actual or projected delinquencies or credit losses; changes in federal, state or local laws, regulations, or regulatory policies and practices, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (which, among other things, established the Consumer Financial Protection Bureau, which has broad authority to regulate and examine financial institutions, including us), that affect our ability to conduct business or the manner in which we conduct business, such as licensing requirements, pricing limitations or restrictions on the method of offering products, as well as changes that may result from increased regulatory scrutiny of the sub-prime lending industry, our use of third-party vendors and real estate loan servicing; potential liability relating to real estate and personal loans which we have sold or may sell in the future, or relating to securitized loans, if it is determined that there was a non-curable breach of a representation or warranty made in connection with such transactions; the costs and effects of any actual or alleged violations of any federal, state or local laws, rules or regulations, including any litigation associated therewith, any impact to our business operations, reputation, financial position, results of operations or cash flows arising therefrom, any impact to our relationships with lenders, investors or other third parties attributable thereto, and the costs and effects of any breach of any representation, warranty or covenant under any of our contractual arrangements, including indentures or other financing arrangements or contracts, as a result of any such violation; the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority and any litigation associated therewith; our continued ability to access the capital markets or the sufficiency of our current sources of funds to satisfy our cash flow requirements; our ability to comply with our debt covenants; our ability to generate sufficient cash to service all of our indebtedness; any material impairment or write-down of the value of our assets; the effects of any downgrade of our debt ratings by credit rating agencies, which could have a negative impact on our cost of and/or access to capital; our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry, or our ability to incur additional borrowings; the impacts of our securitizations and borrowings; our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries; changes in accounting standards or tax policies and practices and the application of such new standards, policies and practices; changes in accounting principles and policies or changes in accounting estimates; any failure or inability to achieve the SpringCastle Portfolio performance requirements set forth in the SpringCastle Interests Sale purchase agreement; the effect of future sales of our remaining portfolio of real estate loans and the transfer of servicing of these loans, including the environmental liability and costs for damage caused by hazardous waste if a real estate loan goes into default; and other risks and uncertainties described in the “Risk Factors” and “Management’s Discussion and Analysis” sections of the Company’s most recent Form 10-K and Form 10-Qs filed with the SEC and in the Company’s other filings with the SEC from time to time. The foregoing list of factors that could cause actual results, performance, or achievements to differ materially from those expressed in or implied by forward-looking statements does not purport to be complete and new factors, risks and uncertainties may arise in the future that are impossible for us to currently predict.


4




CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 
 
Three Months Ended
December 31,
 
Years Ended
December 31,
(dollars in millions, except per share amounts)
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
 
Finance charges
 
$
765

 
$
643

 
$
3,036

 
$
1,870

Finance receivables held for sale originated as held for investment
 
3

 
47

 
74

 
60

Total interest income
 
768

 
690

 
3,110

 
1,930

 
 
 
 
 
 
 
 
 
Interest expense
 
201

 
215

 
856

 
715

 
 
 
 
 
 
 
 
 
Net interest income
 
567

 
475

 
2,254

 
1,215

 
 
 
 
 
 
 
 
 
Provision for finance receivable losses
 
258

 
483

 
932

 
716

 
 
 
 
 
 
 
 
 
Net interest income (loss) after provision for finance receivable losses
 
309

 
(8
)
 
1,322

 
499

 
 
 
 
 
 
 
 
 
Other revenues:
 
 
 
 
 
 
 
 
Insurance
 
107

 
95

 
449

 
211

Investment
 
20

 
8

 
86

 
52

Net loss on repurchases and repayments of debt
 
(1
)
 

 
(17
)
 

Net gain on sale of SpringCastle interests
 

 

 
167

 

Net gain on sales of personal and real estate loans and related trust assets
 

 

 
18

 

Other
 
21

 
5

 
70

 
(1
)
Total other revenues
 
147

 
108

 
773

 
262

 
 
 
 
 
 
 
 
 
Other expenses:
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
Salaries and benefits
 
191

 
180

 
788

 
485

Acquisition-related transaction and integration expenses
 
33

 
33

 
108

 
62

Other operating expenses
 
164

 
146

 
676

 
344

Insurance policy benefits and claims
 
39

 
43

 
167

 
96

Total other expenses
 
427

 
402

 
1,739

 
987

 
 
 
 
 
 
 
 
 
Income (loss) before provision for (benefit from) income taxes
 
29

 
(302
)
 
356

 
(226
)
 
 
 
 
 
 
 
 
 
Provision for (benefit from) income taxes
 
2

 
(134
)
 
113

 
(133
)
 
 
 
 
 
 
 
 
 
Net income (loss)
 
27

 
(168
)
 
243

 
(93
)
 
 
 
 
 
 
 
 
 
Net income attributable to non-controlling interests
 

 
29

 
28

 
127

 
 
 
 
 
 
 
 
 
Net income (loss) attributable to OneMain Holdings, Inc.
 
$
27

 
$
(197
)
 
$
215

 
$
(220
)
 
 
 
 
 
 
 
 
 
Share Data:
 
 
 
 
 
 
 
 
Weighted average number of shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
134,760,705

 
134,465,781

 
134,718,588

 
127,910,680

Diluted
 
135,562,817

 
134,465,781

 
135,135,860

 
127,910,680

Earnings (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.20

 
$
(1.46
)
 
$
1.60

 
$
(1.72
)
Diluted
 
$
0.20

 
$
(1.46
)
 
$
1.59

 
$
(1.72
)

5




CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(dollars in millions)
 
 
 
 
December 31,
 
2016
 
2015
 
 
 
 
 
Assets
 
 
 
 
Cash and cash equivalents
 
$
579

 
$
939

Investment securities
 
1,764

 
1,867

Net finance receivables:
 
 
 
 
Personal loans
 
13,577

 
13,295

SpringCastle Portfolio
 

 
1,703

Real estate loans
 
144

 
538

Retail sales finance
 
11

 
23

Net finance receivables
 
13,732

 
15,559

Unearned insurance premium and claim reserves
 
(586
)
 
(662
)
Allowance for finance receivable losses
 
(689
)
 
(592
)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses
 
12,457

 
14,305

Finance receivables held for sale
 
153

 
793

Restricted cash and cash equivalents
 
568

 
676

Goodwill
 
1,422

 
1,440

Other intangible assets
 
492

 
559

Other assets
 
688

 
611

 
 
 
 
 
Total assets
 
$
18,123

 
$
21,190

 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
Long-term debt
 
$
13,959

 
$
17,300

Insurance claims and policyholder liabilities
 
757

 
747

Deferred and accrued taxes
 
9

 
29

Other liabilities
 
332

 
384

Total liabilities
 
15,057

 
18,460

 
 
 
 
 
Shareholders’ equity:
 
 
 
 
Common stock
 
1

 
1

Additional paid-in capital
 
1,548

 
1,533

Accumulated other comprehensive loss
 
(6
)
 
(33
)
Retained earnings
 
1,523

 
1,308

OneMain Holdings, Inc. shareholders’ equity
 
3,066

 
2,809

Non-controlling interests
 

 
(79
)
Total shareholders’ equity
 
3,066

 
2,730

 
 
 
 
 
Total liabilities and shareholders’ equity
 
$
18,123

 
$
21,190


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KEY METRICS (GAAP BASIS)
(dollars in millions)
 
Three Months Ended December 31,
 
At or for the
Years Ended
 December 31,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Finance receivables held for investment:
 
 
 
 
 
 
 
 
Net finance receivables
 
 
 
 
 
$
13,732

 
$
15,559

Number of accounts
 
 
 
 
 
2,208,894

 
2,465,857

Finance receivables held for sale:
 
 
 
 
 
 
 
 
Net finance receivables
 
 
 
 
 
$
153

 
$
793

Number of accounts
 
 
 
 
 
2,800

 
148,932

Finance receivables held for investment and held for sale: (a)
 
 
 
 
 
 
 
 
Average net receivables
 
$
13,809

 
$
13,059

 
$
14,463

 
$
8,305

Yield
 
22.04
 %
 
20.90
 %
 
21.37
 %
 
23.04
 %
Gross charge-off ratio
 
7.57
 %
 
3.21
 %
 
6.05
 %
 
4.36
 %
Recovery ratio
 
(0.63
)%
 
(0.43
)%
 
(0.51
)%
 
(0.67
)%
Net charge-off ratio
 
6.94
 %
 
2.78
 %
 
5.54
 %
 
3.69
 %
30-89 Delinquency ratio (b)
 
 
 
 
 
2.31
 %
 
2.57
 %
Origination volume
 
$
2,337

 
$
2,510

 
$
9,475

 
$
5,803

Number of accounts originated
 
329,832

 
390,728

 
1,326,574

 
991,051

                                     
(a)
Includes personal loans held for sale, but excludes real estate loans held for sale in order to be comparable with our Consumer and Insurance segment statistics.

(b)
Net finance receivables 30-89 days past due as a percentage of net finance receivables. Prior to December 31, 2016, delinquency ratio was calculated as unpaid principal balance ("UPB") 60 days or more past due as a percentage of UPB. The prior period has been revised to conform to the 2016 presentation.

CONSUMER AND INSURANCE KEY METRICS (NON-GAAP BASIS)
(dollars in millions)
 
Three Months Ended December 31,
 
At or for the
Years Ended
December 31,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Finance receivables held for investment:
 
 
 
 
 
 
 
 
Net finance receivables
 
 
 
 
 
$
13,455

 
$
12,954

Number of accounts
 
 
 
 
 
2,200,584

 
2,202,091

Finance receivables held for sale:
 
 
 
 
 
 
 
 
Net finance receivables
 
 
 
 
 
$

 
$
617

Number of accounts
 
 
 
 
 

 
145,736

Finance receivables held for investment and held for sale:
 
 
 
 
 
 
 
 
Average net receivables
 
$
13,470

 
$
10,546

 
$
13,445

 
$
5,734

Yield
 
24.26
 %
 
25.08
 %
 
24.75
 %
 
25.85
 %
Gross charge-off ratio
 
8.33
 %
 
9.55
 %
 
7.82
 %
 
7.52
 %
Recovery ratio
 
(0.84
)%
 
(0.71
)%
 
(0.77
)%
 
(0.80
)%
Net charge-off ratio
 
7.49
 %
 
8.84
 %
 
7.05
 %
 
6.72
 %
30-89 Delinquency ratio *
 
 
 
 
 
2.26
 %
 
2.23
 %
Origination volume
 
$
2,337

 
$
2,488

 
$
9,455

 
$
5,715

Number of accounts originated
 
329,832

 
390,728

 
1,326,574

 
991,051

                                     
*
Net finance receivables 30-89 days past due as a percentage of net finance receivables. Prior to December 31, 2016, delinquency ratio was calculated as UPB 60 days or more past due as a percentage of UPB. The prior period has been revised to conform to the 2016 presentation.

 





7




RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

Reconciliations of income (loss) before provision for income taxes attributable to OMH on a GAAP basis (purchase accounting) to a Segment Accounting Basis:
(dollars in millions)
 
Three Months Ended December 31,
 
Years Ended
 December 31,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Income (loss) before provision for (benefit from) income taxes attributable to OMH - GAAP basis
 
$
29

 
$
(331
)
 
$
328

 
$
(353
)
GAAP to Segment Accounting Basis adjustments:
 
 
 
 
 
 
 
 
Interest income
 
61

 
100

 
371

 
91

Interest expense
 
8

 
29

 
55

 
123

Provision for finance receivable losses
 
15

 
284

 
1

 
298

Other revenues
 
8

 
6

 
6

 
18

Acquisition-related transaction and integration expenses
 
(12
)
 
(3
)
 
(20
)
 
(3
)
Other expenses
 
14

 
11

 
54

 
14

Income before provision for income taxes attributable to OMH - Segment Accounting Basis
 
$
123

 
$
96

 
$
795

 
$
188


Income (loss) before provision for income taxes attributable to OMH on a Segment Accounting Basis by segment was as follows:
(dollars in millions)
 
Three Months Ended December 31,
 
Years Ended
 December 31,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Income (loss) before provision for income taxes attributable to OMH - Segment Accounting Basis
 
 
 
 
 
 
 
 
Consumer and Insurance
 
$
136

 
$
127

 
$
688

 
$
345

Acquisitions and Servicing
 
2

 
27

 
197

 
127

Real Estate
 
(7
)
 
(35
)
 
(59
)
 
(173
)
Other
 
(8
)
 
(23
)
 
(31
)
 
(111
)
Income before provision for income taxes attributable to OMH - Segment Accounting Basis
 
$
123

 
$
96

 
$
795

 
$
188



8




Reconciliations of income (loss) before provision for (benefit from) income taxes attributable to OMH on a Segment Accounting Basis to adjusted pretax earnings (loss) (non-GAAP):
(dollars in millions)
 
Three Months Ended December 31,
 
Years Ended
December 31,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Consumer and Insurance
 
 
 
 
 
 
 
 
Income before provision for income taxes - Segment Accounting Basis
 
$
136

 
$
127

 
$
688

 
$
345

Adjustments:
 
 
 
 
 
 
 
 
Acquisition-related transaction and integration expenses
 
38

 
16

 
100

 
16

Net gain on sale of personal loans
 

 

 
(22
)
 

Net loss on repurchases and repayments of debt
 
1

 

 
14

 

Debt refinance costs
 

 

 
4

 

Adjusted pretax earnings (non-GAAP)
 
$
175

 
$
143

 
$
784

 
$
361

 
 
 
 
 
 
 
 
 
Acquisitions and Servicing
 
 
 
 
 
 
 
 
Income before provision for income taxes attributable to OMH - Segment Accounting Basis
 
$
2

 
$
27

 
$
197

 
$
127

Adjustments:
 
 
 
 
 
 
 
 
Net gain on sale of SpringCastle interests
 

 

 
(167
)
 

Acquisition-related transaction and integration expenses
 

 
1

 
1

 
1

SpringCastle transaction costs
 

 

 
1

 

Adjusted pretax earnings attributable to OMH (non-GAAP)
 
$
2

 
$
28

 
$
32

 
$
128

 
 
 
 
 
 
 
 
 
Real Estate
 
 
 
 
 
 
 
 
Loss before benefit from income taxes - Segment Accounting Basis
 
$
(7
)
 
$
(35
)
 
$
(59
)
 
$
(173
)
Adjustments:
 
 
 
 
 
 
 
 
Net loss on sale of real estate loans
 

 

 
12

 

Net loss on repurchases and repayments of debt
 

 

 
1

 

Acquisition-related transaction and integration expenses
 

 
1

 
1

 
1

Debt refinance costs
 

 

 
1

 

Adjusted pretax loss (non-GAAP)
 
$
(7
)
 
$
(34
)
 
$
(44
)
 
$
(172
)
 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
 
 
Loss before benefit from income taxes - Segment Accounting Basis
 
$
(8
)
 
$
(23
)
 
$
(31
)
 
$
(111
)
Adjustments:
 
 
 
 
 
 
 
 
Acquisition-related transaction and integration expenses
 
7

 
18

 
26

 
47

Net loss on liquidation of United Kingdom subsidiary
 
1

 

 
6

 

Adjusted pretax earnings (loss) (non-GAAP)
 
$

 
$
(5
)
 
$
1

 
$
(64
)

Consumer and Insurance adjusted earnings per share (non-GAAP) is calculated as follows:
(dollars in millions)
 
Three Months Ended December 31,
 
Years Ended
December 31,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Consumer and Insurance
 
 
 
 
 
 
 
 
Adjusted pretax earnings (non-GAAP)
 
$
175

 
$
143

 
$
784

 
$
361

Provision for income taxes *
 
67

 
54

 
298

 
134

Adjusted net income (non-GAAP)
 
$
108

 
$
89

 
$
486

 
$
227

 
 
 
 
 
 
 
 
 
Weighted average diluted shares
 
135,562,817

 
134,465,781

 
135,135,860

 
127,910,680

Adjusted EPS (non-GAAP)
 
$
0.80

 
$
0.66

 
$
3.60

 
$
1.77

                                      
*
Provision for income taxes assumes a combined U.S. federal and state statutory income tax rate of 37% prior to the OneMain Acquisition and 38% subsequent to the OneMain Acquisition.

9




OneMain Holdings, Inc.

Contact:
Craig Streem, 812-468-5752                            Rohit Dewan, 812-492-2582
craig.streem@onemainfinancial.com                        rohit.dewan@onemainfinancial.com


Source: OneMain Holdings, Inc.

10
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