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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 11, 2019 (February 11, 2019)

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, IN
 
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))


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


 





Item 2.02
Results of Operations and Financial Condition.
On February 11, 2019, OneMain Holdings, Inc. (the “Company”) issued a press release announcing the Company’s results for its fiscal year ended December 31, 2018. 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 7.01
Regulation FD Disclosure.
On February 11, 2019, the Company issued a press release announcing that its Board of Directors has declared a quarterly cash dividend of $0.25 per share of outstanding common stock payable on March 15, 2019 to stockholders of record as of the close of business on February 26, 2019. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

The information in the press release is being furnished, not filed, pursuant to this Item 7.01. Accordingly, the information in the press release will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this Current Report with respect to the press release is not intended to, and does not, constitute a determination or admission by the Company that the information in this Current Report with respect to the press release is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.

Item 9.01
Financial Statements and Exhibits.
(d)     Exhibits.
Exhibit Number
 
Description
 







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 11, 2019
By:
/s/ Scott T. Parker
 
 
 
Scott T. Parker
 
 
 
Executive Vice President and Chief Financial Officer






(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1 - 4Q'18)

Exhibit








Exhibit 99.1
ONEMAIN HOLDINGS, INC. REPORTS FOURTH QUARTER 2018 RESULTS
4Q 2018 diluted EPS of $1.24
4Q 2018 C&I adjusted diluted EPS of $1.39
4Q 2018 C&I Ending Net Finance Receivables of $16.2 billion
4Q 2018 C&I Net Charge-Off ratio of 6.3%
Initiating quarterly dividend of $0.25 per share

Evansville, IN, February 11, 2019 - OneMain Holdings, Inc. (NYSE: OMF) today reported pretax income of $214 million and net income of $168 million for the fourth quarter of 2018, compared to $187 million and $39 million, respectively, in the prior year quarter. Net income for the fourth quarter of 2017 included approximately $81 million of additional tax expense, primarily reflecting the remeasurement of our deferred tax asset due to tax reform. Earnings per diluted share were $1.24 in the fourth quarter of 2018, compared to $0.29 in the prior year quarter.

Net income was $447 million for the full year of 2018, compared to $183 million for the full year of 2017, including the aforementioned additional tax expense in the prior year, due to tax reform. Earnings per diluted share were $3.29 in the full year of 2018, compared to $1.35 in the prior year.

OneMain's Board of Directors approved the initiation of a quarterly dividend of $0.25 per share, with the dividend to be paid on March 15, 2019 to shareholders of record as of the close of business on February 26, 2019.

"We produced great earnings and results in the fourth quarter of 2018, highlighted by robust profitability, disciplined growth, and strong credit performance." said Doug Shulman, President and CEO of OneMain. "We are confident in the stability and resiliency of our business, as demonstrated by our decision to institute a quarterly dividend. I am excited about the opportunities ahead of us."

The following segment results are 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.

Consumer and Insurance Segment (“C&I”)

C&I generated adjusted pretax income of $248 million and adjusted net income of $189 million for the fourth quarter of 2018, compared to $229 million and $144 million, respectively, in the prior year quarter. Adjusted earnings per diluted share were $1.39 for the fourth quarter of 2018, compared to $1.06 in the prior year quarter.

C&I generated adjusted net income of $688 million for the full year of 2018, compared to $480 million in the prior year. Adjusted earnings per diluted share were $5.06 for the full year of 2018, compared to $3.54 in the prior year.

Originations totaled $3.3 billion in the fourth quarter of 2018, up 4% from $3.1 billion in the prior year quarter. The percentage of secured originations was 53% in the fourth quarter of 2018, up from 44% in the prior year quarter.

Ending net finance receivables reached $16.2 billion at December 31, 2018, up 9% from $14.8 billion in the prior year. Secured receivables represented $1.4 billion of the increase in ending net finance receivables from the prior year and were 47% of ending net finance receivables at December 31, 2018, up from 43% in the prior year.

Average net finance receivables were $16.0 billion in the fourth quarter of 2018, up 10% from $14.6 billion in the prior year quarter.

Interest income in the fourth quarter of 2018 was $959 million, up from $875 million in the prior year quarter, reflecting higher average receivables.

Yield was 23.8% in the fourth quarter of 2018, consistent with the prior year quarter.

The provision for finance receivable losses was $275 million in the fourth quarter of 2018, up from $245 million in the prior year quarter, as a result of higher average receivables.

The 30-89 day delinquency ratio was 2.4% at December 31, 2018, up seasonally from 2.3% at September 30, 2018 and consistent with 2.4% at December 31, 2017.


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The 90+ day delinquency ratio was 2.3% at December 31, 2018, up seasonally from 2.0% at September 30, 2018 and consistent with 2.3% at December 31, 2017.

The net charge-off ratio was 6.3% in the fourth quarter of 2018, up seasonally from 5.8% in the third quarter of 2018 and down from 6.4% in the prior year quarter.

Operating expense for the fourth quarter of 2018 was $312 million, up 4% from $299 million in the prior year quarter, primarily reflecting additional investment in our business during 2018.

Acquisitions and Servicing Segment (“A&S”)

A&S broke even in the fourth quarter of 2018 on an adjusted pretax income basis, consistent with the prior year quarter.

Other

During the fourth quarter of 2018, Other generated an adjusted pretax loss of $3 million, compared to an adjusted pretax loss of $7 million in the prior year quarter. Other consists of our non-originating legacy operations, which include our liquidating real estate loan portfolio. During the fourth quarter, we sold a portion of our real estate loans and recorded a net gain on the sale in other revenue. The remaining real estate loans are carried at $103 million compared to the unpaid principal balance of $169 million.

Funding and Liquidity

As of December 31, 2018, the company had principal debt balances outstanding of $15.5 billion, 48% of which was secured and 52% of which was unsecured. The company had $679 million of cash and cash equivalents, which included $226 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that are unavailable for general corporate purposes. The company had undrawn revolving conduit facilities of approximately $6.0 billion and $7.6 billion of unencumbered personal loans.

Use of Non-GAAP Financial Measures
We report the operating results of Consumer and Insurance, Acquisitions and Servicing, 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). Consumer and Insurance adjusted pretax income (loss), Consumer and Insurance adjusted net income (loss), Consumer and Insurance adjusted earnings (loss) per diluted share, Acquisitions and Servicing adjusted pretax income (loss), and Other adjusted pretax income (loss) are key performance measures used by management in evaluating the performance of our business. Consumer and Insurance adjusted pretax income (loss), Acquisitions and Servicing adjusted pretax income (loss), and Other adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes acquisition-related transaction and integration expenses, net losses resulting from repurchases and repayments of debt, restructuring charges, net loss on sale of real estate loans, and non-cash incentive compensation expense. 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 and as a performance goal under the company’s executive compensation programs. These non-GAAP financial measures should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles ("GAAP").

Conference Call & Webcast Information

OneMain management will host a conference call and webcast to discuss our fourth quarter 2018 results and other general matters at 8:00 am Eastern Time on Tuesday, February 12, 2019. 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 678-304-6859 (international), and using conference ID 3296455, 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, and using conference ID 3296455, beginning approximately four hours after the event. The replay of the conference call will be available via audio webcast through February 26, 2019. An investor presentation will be available on the Investor Relations page of OneMain’s website at https://www.omf.com prior to the start of the conference call.

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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 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.omf.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 are subject to risks, uncertainties, assumptions 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 update or revise 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 (including statements regarding the timing, declaration, amount and payment of any future dividends), 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: adverse changes in general economic conditions, including the interest rate environment and the financial markets; risks related to the acquisition or sale of assets or businesses or the formation, termination or operation of joint ventures or other strategic alliances, including increased loan delinquencies or net charge-offs, integration or migration issues, increased costs of servicing, incomplete records, and retention of customers; our estimates of the allowance for finance receivable losses may not be adequate to absorb actual losses, causing our provision for finance receivable losses to increase, which would adversely affect our results of operations; increased levels of unemployment and personal bankruptcies; our strategy of increasing the proportion of secured loans may lead to declines in or slower growth in our personal loan receivables and portfolio yield; adverse changes in the rate at which we can collect or potentially sell our finance receivables portfolio; our decentralized branch loan approval process could expose us to greater than historical delinquencies and charge-offs; 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, or other events disrupting business or commerce; a failure in or breach of our operational or security systems or infrastructure or those of third parties, including as a result of cyber-attacks; or other cyber-related incidents involving the loss, theft or unauthorized disclosure of personally identifiable information, or “PII,” of our present or former customers; our credit risk scoring models may be inadequate to properly assess the risk of customer unwillingness or lack of capacity to repay; adverse changes in our ability to attract and retain employees or key executives to support our businesses; increased competition, lack of customer responsiveness to our distribution channels, an inability to make technological improvements, and the ability of our competitors to offer a more attractive range of personal loan products than we offer; changes in federal, state or local laws, regulations, or regulatory policies and practices that adversely affect our ability to conduct business or the manner in which we are permitted to 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

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real estate loan servicing, or changes in corporate or individual income tax laws or regulations, including effects of the Tax Cuts and Jobs Act; risks associated with our insurance operations, including insurance claims that exceed our expectations or insurance losses that exceed our reserves; our ability be unable to successfully implement our growth strategy for our consumer lending business or successfully acquire portfolios of personal loans; declines in collateral values or increases in actual or projected delinquencies or net charge-offs; potential liability relating to finance receivables which we have sold or securitized or may sell or securitize in the future 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; 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 ownership of our common stock continues to be highly concentrated, which may prevent minority stockholders from influencing significant corporate decisions and may result in conflicts of interest; 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; 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; management estimates and assumptions, including estimates and assumptions about future events, may prove to be incorrect; any failure to achieve the SpringCastle Portfolio performance requirements, which could, among other things, cause us to lose our loan servicing rights over the SpringCastle Portfolio; various risks relating to continued compliance with the Settlement Agreement with the U.S. Department of Justice; 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.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this document that could cause actual results to differ before making an investment decision to purchase our common stock and should not place undue reliance on any of our forward-looking statements. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.






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OneMain Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
(unaudited, $ in millions, except per share amounts)
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/2017
 
 
 
 
 
 
 
 
 
 
 
Interest Income:
 
 
 
 
 
 
 
 
 
 
Finance charges
 
$
954

 
$
930

 
$
854

 
$
3,645

 
$
3,183

Finance receivables held for sale originated as held for investment
 
4

 
3

 
3

 
13

 
13

Total interest income
 
958

 
933

 
857

 
3,658

 
3,196

 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(229
)
 
(227
)
 
(204
)
 
(875
)
 
(816
)
Provision for finance receivable losses
 
(278
)
 
(256
)
 
(231
)
 
(1,048
)
 
(955
)
Net interest income after provision for finance receivable losses
 
451

 
450

 
422

 
1,735

 
1,425

 
 
 
 
 
 
 
 
 
 
 
Other Revenues:
 
 
 
 
 
 
 
 
 
 
Insurance
 
111

 
106

 
106

 
429

 
420

Investment
 
16

 
18

 
15

 
66

 
73

Net gain on sale of real estate loans
 
18

 

 

 
18

 

Net loss on repurchases and repayments of debt
 

 

 

 
(9
)
 
(29
)
Other (1)
 
8

 
20

 
25

 
70

 
96

Total other revenues
 
153

 
144

 
146

 
574

 
560

 
 
 
 
 
 
 
 
 
 
 
Other Expenses
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
Salaries and benefits (2)
 
(206
)
 
(197
)
 
(195
)
 
(903
)
 
(757
)
Acquisition-related transaction and integration expenses
 
(6
)
 
(9
)
 
(10
)
 
(54
)
 
(69
)
Other operating expenses
 
(131
)
 
(141
)
 
(131
)
 
(536
)
 
(544
)
Insurance policy benefits and claims
 
(47
)
 
(48
)
 
(45
)
 
(192
)
 
(184
)
Total other expenses
 
(390
)
 
(395
)
 
(381
)
 
(1,685
)
 
(1,554
)
Income before income taxes
 
214

 
199

 
187

 
624

 
431

Income taxes (3)
 
(46
)
 
(51
)
 
(148
)
 
(177
)
 
(248
)
Net income
 
$
168

 
$
148

 
$
39

 
$
447

 
$
183

 
 
 
 
 
 
 
 
 
 
 
Share Data:
 
 
 
 
 
 
 
 
 
 
Weighted average number of diluted shares:
 
136.2

 
136.1

 
135.9

 
136.0

 
135.7

Diluted EPS
 
$
1.24

 
$
1.09

 
$
0.29

 
$
3.29

 
$
1.35

 
 
Note: Year-to-Date may not sum due to rounding.
(1) 4Q18 and YE 2018 include the fair value impairment of the remaining loans in held for sale after the 4Q18 real estate loan sale.
(2) YE 2018 includes $106 million of incentive compensation expense associated with the Fortress transaction, this expense was non-cash, equity neutral
      and not tax deductible. See our 2Q18 Earnings Release for more information.
(3) 4Q17 and YE 2017 includes a one-time impact of tax reform. See our 4Q17 Earnings Release for more information.


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OneMain Holdings, Inc.
 
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
 
 
 
 
 
 
As of
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/2018
 
9/30/2018
 
12/31/2017
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
679

 
$
1,243

 
$
987

 
Investment securities
 
1,694

 
1,707

 
1,697

 
Net finance receivables:
 
 
 
 
 
 
 
Personal loans
 
16,164

 
15,750

 
14,823

 
Other receivables (1), (2)
 

 

 
134

 
Net finance receivables
 
16,164

 
15,750

 
14,957

 
Unearned insurance premium and claim reserves
 
(662
)
 
(631
)
 
(590
)
 
Allowance for finance receivable losses
 
(731
)
 
(706
)
 
(697
)
 
Net finance receivables, less unearned insurance premium and claim
     reserves and allowance for finance receivable losses
 
14,771

 
14,413

 
13,670

 
Finance receivables held for sale (2)
 
103

 
207

 
132

 
Restricted cash and restricted cash equivalents
 
499

 
495

 
498

 
Goodwill
 
1,422

 
1,422

 
1,422

 
Other intangible assets
 
388

 
398

 
440

 
Other assets
 
534

 
583

 
587

 
Total assets
 
$
20,090

 
$
20,468

 
$
19,433

 
 
 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
 
Long-term debt
 
$
15,178

 
$
15,731

 
$
15,050

 
Insurance claims and policyholder liabilities
 
685

 
689

 
737

 
Deferred and accrued taxes
 
45

 
24

 
45

 
Other liabilities
 
383

 
384

 
323

 
Total liabilities
 
16,291

 
16,828

 
16,155

 
 
 
 
 
 
 
 
 
Common stock
 
1

 
1

 
1

 
Additional paid-in capital
 
1,681

 
1,678

 
1,560

 
Accumulated other comprehensive income (loss)
 
(34
)
 
(22
)
 
11

 
Retained earnings
 
2,151

 
1,983

 
1,706

 
Total shareholders’ equity
 
3,799

 
3,640

 
3,278

 
Total liabilities and shareholders’ equity
 
$
20,090

 
$
20,468

 
$
19,433

 
 
 
(1) Other Receivables consist of Real Estate Loans and Retail Sales Finance, which were reported separately in prior periods.
(2) On September 30, 2018, the company transferred all of the real estate loans from Other Receivables to Finance Receivables Held for Sale.

6




OneMain Holdings, Inc.
 
 
 
 
 
 
CONSOLIDATED KEY FINANCIAL METRICS (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/2018
 
9/30/2018
 
12/31/2017
 
12/31/2018
 
12/31/2017
 
 
 
 
 
 
 
 
 
 
 
Non-TDR Net Finance Receivables
 
$
15,711

 
$
15,340

 
$
14,590

 
$
15,711

 
$
14,590

TDR Net Finance Receivables
 
453

 
410

 
367

 
453

 
367

Net Finance Receivables
 
$
16,164

 
$
15,750

 
$
14,957

 
$
16,164

 
$
14,957

 
 
 
 
 
 
 
 
 
 
 
Average Net Receivables
 
$
15,964

 
$
15,695

 
$
14,738

 
$
15,471

 
$
14,057

Average Daily Debt Balances
 
15,516

 
15,743

 
14,696

 
15,444

 
14,224

Origination Volume
 
3,268

 
2,899

 
3,132

 
11,923

 
10,537

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-TDR Allowance
 
$
561

 
$
546

 
$
550

 
$
561

 
$
550

TDR Allowance
 
170

 
160

 
147

 
170

 
147

Allowance
 
$
731

 
$
706

 
$
697

 
$
731

 
$
697

 
 
 
 
 
 
 
 
 
 
 
Non-TDR Allowance Ratio
 
3.6
 %
 
3.6
 %
 
3.7
 %
 
3.6
 %
 
3.7
 %
TDR Allowance Ratio
 
37.5
 %
 
39.0
 %
 
39.9
 %
 
37.5
 %
 
39.9
 %
Allowance Ratio
 
4.5
 %
 
4.5
 %
 
4.7
 %
 
4.5
 %
 
4.7
 %
 
 
 
 
 
 
 
 
 
 
 
Gross Charge-Off
 
$
280

 
$
256

 
$
256

 
$
1,104

 
$
1,054

Recoveries
 
(26
)
 
(27
)
 
(24
)
 
(113
)
 
(107
)
Net Charge-Off
 
$
254

 
$
229

 
$
232

 
$
991

 
$
947

 
 
 
 
 
 
 
 
 
 
 
Gross Charge-Off Ratio
 
7.0
 %
 
6.5
 %
 
6.9
 %
 
7.1
 %
 
7.5
 %
Recoveries
 
(0.7
)%
 
(0.7
)%
 
(0.7
)%
 
(0.7
)%
 
(0.8
)%
Net Charge-Off Ratio
 
6.3
 %
 
5.8
 %
 
6.3
 %
 
6.4
 %
 
6.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30-89 Delinquency
 
$
390

 
$
367

 
$
372

 
$
390

 
$
372

30+ Delinquency
 
753

 
687

 
729

 
753

 
729

60+ Delinquency
 
524

 
472

 
517

 
524

 
517

90+ Delinquency
 
363

 
320

 
357

 
363

 
357

 
 
 
 
 
 
 
 
 
 
 
30-89 Delinquency Ratio
 
2.4
 %
 
2.3
 %
 
2.5
 %
 
2.4
 %
 
2.5
 %
30+ Delinquency Ratio
 
4.7
 %
 
4.4
 %
 
4.9
 %
 
4.7
 %
 
4.9
 %
60+ Delinquency Ratio
 
3.3
 %
 
3.0
 %
 
3.5
 %
 
3.3
 %
 
3.5
 %
90+ Delinquency Ratio
 
2.3
 %
 
2.0
 %
 
2.4
 %
 
2.3
 %
 
2.4
 %
 
 
Note: Delinquency ratios are calculated as a percentage of net finance receivables. Charge-off ratios are calculated as a percentage of average net finance receivables. Ratios may not sum due to rounding.

7




OneMain Holdings, Inc.
BALANCE SHEET METRICS (UNAUDITED)
 
 
 
 
 
As of
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/2018
 
9/30/2018
 
12/31/2017
 
 
 
 
 
 
 
Liquidity
 
 
 
 
 
 
Cash and cash equivalents
 
$
679

 
$
1,243

 
$
987

Unencumbered personal loans
 
7,607

 
6,646

 
5,007

Undrawn conduit facilities
 
5,950

 
5,800

 
5,050

 
 
 
 
 
 
 
Total Assets
 
$
20,090

 
$
20,468

 
$
19,433

Less: Goodwill
 
(1,422
)
 
(1,422
)
 
(1,422
)
Less: Other intangible assets
 
(388
)
 
(398
)
 
(440
)
Tangible Managed Assets
 
$
18,280

 
$
18,648

 
$
17,571

 
 
 
 
 
 
 
Long-term debt
 
$
15,178

 
$
15,731

 
$
15,050

Less: Junior subordinated debt
 
(172
)
 
(172
)
 
(172
)
Adjusted Debt
 
$
15,006

 
$
15,559

 
$
14,878

 
 
 
 
 
 
 
Total Shareholders' Equity
 
$
3,799

 
$
3,640

 
$
3,278

Less: Goodwill
 
(1,422
)
 
(1,422
)
 
(1,422
)
Less: Other intangible assets
 
(388
)
 
(398
)
 
(440
)
Plus: Junior subordinated debt
 
172

 
172

 
172

Adjusted Tangible Common Equity
 
$
2,161

 
$
1,992

 
$
1,588

 
 
 
 
 
 
 
Adjusted Debt to Adjusted Tangible Common Equity (Tangible Leverage)
 
6.9
x
 
7.8
x
 
9.4
x
 
 
 
 
 
 
 
Adjusted Tangible Common Equity to Tangible Managed Assets
 
11.8
%
 
10.7
%
 
9.0
%
 
 
 
 
 
 
 
 
 

8




OneMain Holdings, Inc.
CONSOLIDATED RETURN ON RECEIVABLES (UNAUDITED)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/17
 
 
 
 
 
 
 
 
 
 
 
Revenue (1)
 
26.7
 %
 
26.2
 %
 
26.0
 %
 
26.1
 %
 
25.4
 %
Net Charge-Off
 
(6.3
)%
 
(5.8
)%
 
(6.2
)%
 
(6.4
)%
 
(6.7
)%
Risk Adjusted Margin
 
20.3
 %
 
20.4
 %
 
19.8
 %
 
19.7
 %
 
18.7
 %
Operating Expenses
 
(8.6
)%
 
(8.8
)%
 
(9.1
)%
 
(9.7
)%
 
(9.7
)%
Unlevered Return on Receivables
 
11.7
 %
 
11.6
 %
 
10.7
 %
 
10.1
 %
 
9.0
 %
Interest Expense
 
(5.7
)%
 
(5.8
)%
 
(5.5
)%
 
(5.7
)%
 
(5.8
)%
Change in Allowance
 
(0.6
)%
 
(0.7
)%
 
(0.1
)%
 
(0.4
)%
 
(0.1
)%
Income Tax Expense  (2)
 
(1.2
)%
 
(1.3
)%
 
(4.0
)%
 
(1.1
)%
 
(1.8
)%
Return on Receivables
 
4.3
 %
 
3.8
 %
 
1.1
 %
 
2.9
 %
 
1.3
 %
 
 
Note: All ratios are based on consolidated results as a percentage of average net finance receivables held for investment. Ratios may not sum due to rounding.
(1) Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.
(2) Income taxes assume a 37% statutory tax rate for 2017 and 24% for 2018.

9




OneMain Holdings, Inc.
CONSUMER AND INSURANCE SEGMENT (UNAUDITED) (Non-GAAP)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/2018
 
9/30/2018
 
12/31/2017
 
12/31/2018
 
12/31/2017
 
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
959

 
$
935

 
$
875

 
$
3,677

 
$
3,305

 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(220
)
 
(218
)
 
(195
)
 
(844
)
 
(765
)
Provision for finance receivable losses
 
(275
)
 
(253
)
 
(245
)
 
(1,047
)
 
(963
)
Net interest income after provision for finance receivable losses
 
464

 
464

 
435

 
1,786

 
1,577

 
 
 
 
 
 
 
 
 
 
 
Insurance
 
111

 
106

 
106

 
429

 
420

Investment
 
16

 
21

 
18

 
71

 
88

Other
 
16

 
13

 
14

 
58

 
57

Total other revenues
 
143

 
140

 
138

 
558

 
565

 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
(312
)
 
(320
)
 
(299
)
 
(1,247
)
 
(1,197
)
Insurance policy benefits and claims
 
(47
)
 
(49
)
 
(45
)
 
(192
)
 
(185
)
Total other expenses
 
(359
)
 
(369
)
 
(344
)
 
(1,439
)
 
(1,382
)
 
 
 
 
 
 
 
 
 
 
 
Adjusted pretax income (non-GAAP)
 
248

 
235

 
229

 
905

 
760

 
 
 
 
 
 
 
 
 
 
 
Income taxes (1)
 
(59
)
 
(56
)
 
(85
)
 
(217
)
 
(280
)
 
 
 
 
 
 
 
 
 
 
 
Adjusted net income (non-GAAP)
 
$
189

 
$
179

 
$
144

 
$
688

 
$
480

 
 
 
 
 
 
 
 
 
 
 
Weighted average number of diluted shares
 
136.2

 
136.1

 
135.9

 
136.2

 
135.7

C&I adjusted diluted EPS (2)
 
$
1.39

 
$
1.31

 
$
1.06

 
5.06

 
3.54

 
 
Note: Year-to-Date may not sum due to rounding.
(1) Income taxes assume a 37% statutory tax rate for 2017 periods and 24% for 2018 periods.
(2) C&I adjusted diluted EPS is calculated as the adjusted net income (non-GAAP) divided by the weighted average number of diluted shares outstanding.



10




OneMain Holdings, Inc.
CONSUMER AND INSURANCE SEGMENT - KEY FINANCIAL METRICS (UNAUDITED) (Non-GAAP)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/2018
 
9/30/2018
 
12/31/2017
 
12/31/2018
 
12/31/2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-TDR Net Finance Receivables
 
$
15,640

 
$
15,253

 
$
14,339

 
$
15,640

 
$
14,339

TDR Net Finance Receivables
 
555

 
524

 
481

 
555

 
481

Net Finance Receivables (1)
 
$
16,195

 
$
15,777

 
$
14,820

 
$
16,195

 
$
14,820

 
 
 
 
 
 
 
 
 
 
 
Average Net Receivables
 
$
15,994

 
$
15,619

 
$
14,589

 
$
15,401

 
$
13,860

Origination Volume
 
3,268

 
2,899

 
3,133

 
11,923

 
10,537

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-TDR Allowance
 
$
563

 
$
551

 
$
533

 
$
563

 
$
533

TDR Allowance
 
210

 
202

 
191

 
210

 
191

Allowance (1)
 
$
773

 
$
753

 
$
724

 
$
773

 
$
724

 
 
 
 
 
 
 
 
 
 
 
Non-TDR Allowance Ratio
 
3.6
 %
 
3.6
 %
 
3.7
 %
 
3.6
 %
 
3.7
 %
TDR Allowance Ratio
 
37.7
 %
 
38.6
 %
 
39.7
 %
 
37.7
 %
 
39.7
 %
Allowance Ratio
 
4.8
 %
 
4.8
 %
 
4.9
 %
 
4.8
 %
 
4.9
 %
 
 
 
 
 
 
 
 
 
 
 
Gross Charge-Off
 
$
285

 
$
260

 
$
264

 
$
1,127

 
$
1,100

Recoveries
 
(30
)
 
(31
)
 
(28
)
 
(129
)
 
(129
)
Net Charge-Off
 
$
255

 
$
229

 
$
236

 
$
998

 
$
971

 
 
 
 
 
 
 
 
 
 
 
Gross Charge-Off Ratio
 
7.1
 %
 
6.6
 %
 
7.2
 %
 
7.3
 %
 
7.9
 %
Recoveries
 
(0.8
)%
 
(0.8
)%
 
(0.8
)%
 
(0.8
)%
 
(0.9
)%
Net Charge-Off Ratio
 
6.3
 %
 
5.8
 %
 
6.4
 %
 
6.5
 %
 
7.0
 %
 
 
 
 
 
 
 
 
 
 
 
30-89 Delinquency
 
$
393

 
$
369

 
$
362

 
$
393

 
$
362

30+ Delinquency
 
758

 
691

 
701

 
758

 
701

60+ Delinquency
 
527

 
475

 
496

 
527

 
496

90+ Delinquency
 
365

 
322

 
339

 
365

 
339

 
 
 
 
 
 
 
 
 
 
 
30-89 Delinquency Ratio
 
2.4
 %
 
2.3
 %
 
2.4
 %
 
2.4
 %
 
2.4
 %
30+ Delinquency Ratio
 
4.7
 %
 
4.4
 %
 
4.7
 %
 
4.7
 %
 
4.7
 %
60+ Delinquency Ratio
 
3.3
 %
 
3.0
 %
 
3.4
 %
 
3.3
 %
 
3.4
 %
90+ Delinquency Ratio
 
2.3
 %
 
2.0
 %
 
2.3
 %
 
2.3
 %
 
2.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. Delinquency ratios are calculated as a percentage of net finance receivables. All other ratios are shown as a percentage of C&I average net finance receivables. Ratios may not sum due to rounding.
(1) For reconciliation to GAAP, see "Reconciliation of Key Segment Metrics (Unaudited) (Non-GAAP)".

11




OneMain Holdings, Inc.
CONSUMER & INSURANCE SEGMENT METRICS (UNAUDITED) (Non-GAAP)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/17
 
 
 
 
 
 
 
 
 
 
 
Revenue (1)
 
26.4
 %
 
26.3
 %
 
26.5
 %
 
26.2
 %
 
26.6
 %
Net Charge-Off
 
(6.3
)%
 
(5.8
)%
 
(6.4
)%
 
(6.5
)%
 
(7.0
)%
Risk Adjusted Margin
 
20.1
 %
 
20.5
 %
 
20.1
 %
 
19.8
 %
 
19.6
 %
Operating Expenses
 
(7.8
)%
 
(8.2
)%
 
(8.2
)%
 
(8.1
)%
 
(8.6
)%
Unlevered Return on Receivables
 
12.3
 %
 
12.3
 %
 
11.9
 %
 
11.7
 %
 
10.9
 %
Interest Expense
 
(5.5
)%
 
(5.6
)%
 
(5.3
)%
 
(5.5
)%
 
(5.5
)%
Change in Allowance
 
(0.5
)%
 
(0.7
)%
 
(0.2
)%
 
(0.3
)%
 
0.1
 %
Income Tax Expense (2)
 
(1.5
)%
 
(1.4
)%
 
(2.4
)%
 
(1.4
)%
 
(2.0
)%
Return on Receivables
 
4.7
 %
 
4.6
 %
 
4.0
 %
 
4.5
 %
 
3.5
 %
 
 
Note: Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. All ratios are shown as a percentage of C&I average net finance receivables. Ratios may not sum due to rounding.
(1) Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.
(2) Income taxes assume a 37% statutory tax rate for 2017 and 24% for 2018.



12




OneMain Holdings, Inc.
 ACQUISITIONS AND SERVICING SEGMENT (UNAUDITED) (Non-GAAP)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/2018
 
9/30/2018
 
12/31/2017
 
12/31/2018
 
12/31/2017
 
 
 
 
 
 
 
 
 
 
 
Portfolio Servicing Fees from SpringCastle
 
$
7

 
$
8

 
$
10

 
$
33

 
$
40

Other
 

 

 

 

 
2

Total Other Revenues
 
7

 
8

 
10

 
33

 
42

 
 
 
 
 
 
 
 
 
 
 
Total Other Expenses
 
(7
)
 
(8
)
 
(10
)
 
(32
)
 
(41
)
 
 
 
 
 
 
 
 
 
 
 
Adjusted pretax income (non-GAAP)
 
$

 
$

 
$

 
$
1

 
$
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note:
Acquisitions & Servicing financial information is presented on an adjusted Segment Accounting Basis.
Year-to-Date may not sum due to rounding.

13




OneMain Holdings, Inc.
OTHER (UNAUDITED) (Non-GAAP)
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/2018
 
9/30/2018
 
12/31/2017
 
12/31/2018
 
12/31/2017
 
 
 
 
 
 
 
 
 
 
 
Interest Income:
 
 
 
 
 
 
 
 
 
 
Finance Charges
 
$

 
$
2

 
$
3

 
$
7

 
$
12

Finance Receivables Held for Sale
 
4

 
2

 
2

 
10

 
11

Total Interest Income
 
4

 
4

 
5

 
17

 
23

 
 
 
 
 
 
 
 
 
 
 
Interest Expense
 
(4
)
 
(4
)
 
(5
)
 
(17
)
 
(21
)
Provision for Finance Receivable Losses (1)
 

 

 

 
5

 
(7
)
Net Interest Income after Provision for Finance Receivable Losses
 

 

 

 
5

 
(5
)
 
 
 
 
 
 
 
 
 
 
 
Total Other Revenues
 
1

 
1

 
3

 

 
3

 
 
 
 
 
 
 
 
 
 
 
Total Other Expenses
 
(4
)
 
(5
)
 
(10
)
 
(25
)
 
(33
)
 
 
 
 
 
 
 
 
 
 
 
Adjusted Pretax Income (non-GAAP)
 
$
(3
)
 
$
(4
)
 
$
(7
)
 
$
(20
)
 
$
(35
)
 
 
 
 
 
 
 
 
 
 
 
Net Finance Receivables Held for Investment:
 
 
 
 
 
 
 
 
 
 
Personal Loans
 
$

 
$

 
$
6

 
$

 
$
6

Other Receivables (2)
 

 

 
136

 

 
136

Total Net Finance Receivables Held for Investment
 
$

 
$

 
$
142

 
$

 
$
142

 
 
 
 
 
 
 
 
 
 
 
Net Finance Receivables Held For Sale
 
$
103

 
$
215

 
$
138

 
$
103

 
$
138

 
 
 
Note:
Other financial information is presented on an adjusted Segment Accounting Basis.
Effective 1Q18, Retail Sales Finance and Real Estate receivables were combined as "Other Receivables."
Prior periods have been revised to conform to the new presentation.
Year-to-Date may not sum due to rounding.
(1
)
For the year ended 2017 provision for finance receivable losses includes approximately $5 million increase in net charge-offs attributable to the impact of hurricanes Harvey and Maria.
(2
)
On September 30, 2018, the company transferred Other Receivables from held for investment to held for sale.


14




OneMain Holdings, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/17
 
 
 
 
 
 
 
 
 
 
 
Consumer & Insurance
 
$
234

 
$
226

 
$
219

 
$
787

 
$
676

Acquisitions & Servicing
 

 

 

 
1

 
1

Other
 
(9
)
 
(4
)
 
(7
)
 
(132
)
 
(41
)
Segment to GAAP Adjustment
 
(11
)
 
(23
)
 
(25
)
 
(32
)
 
(205
)
Income Before Income Taxes - GAAP basis
 
$
214

 
$
199

 
$
187

 
$
624

 
$
431

 
 
 
 
 
 
 
 
 
 
 
Pretax Income - Segment Accounting Basis
 
$
234

 
$
226

 
$
219

 
$
787

 
$
676

Net Loss on Repurchases and Repayments of Debt (1)
 

 

 

 
63

 
18

Acquisition-Related Transaction and Integration Expenses (1)
 
6

 
9

 
10

 
47

 
66

Restructuring Charges
 
8

 

 

 
8

 

Consumer & Insurance Adjusted Pretax Income (non-GAAP)
 
$
248

 
$
235

 
$
229

 
$
905

 
$
760

 
 
 
 
 
 
 
 
 
 
 
Pretax Income - Segment Accounting Basis
 

 

 

 
1

 
1

Adjustments
 

 

 

 

 

Acquisitions & Servicing Adjusted Pretax Income (non-GAAP)
 
$

 
$

 
$

 
$
1

 
$
1

 
 
 
 
 
 
 
 
 
 
 
Pretax Loss - Segment Accounting Basis
 
$
(9
)
 
$
(4
)
 
$
(7
)
 
$
(132
)
 
$
(41
)
Net Loss on Sale of Real Estate Loans (2)
 
6

 

 

 
6

 

Non-Cash Incentive Compensation Expense (3)
 

 

 

 
106

 

Acquisition-Related Transaction and Integration Expenses (1)
 

 

 

 

 
6

Other Adjusted Pretax Loss (non-GAAP)
 
$
(3
)
 
$
(4
)
 
$
(7
)
 
$
(20
)
 
$
(35
)
 
 
 
 
 
 
 
 
 
 
 
Springleaf Debt Discount Accretion
 
$
(6
)
 
$
(6
)
 
$
(11
)
 
$
(24
)
 
$
(69
)
OMFH LLR Provision Catch-up
 
(4
)
 
(4
)
 
(3
)
 
(15
)