Toggle SGML Header (+)


Section 1: 8-K (8-K)

omf-20200427
0001584207FALSEApril 27, 202000015842072020-04-272020-04-2700015842072020-02-102020-02-10




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): April 27, 2020 (April 27, 2020)

ONEMAIN HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware001-3612927-3379612
(State or other jurisdiction of incorporation)(Commission file number)(I.R.S. employer identification number)

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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareOMFNew York Stock Exchange

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

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.





Item 2.02
Results of Operations and Financial Condition.
On April 27, 2020, OneMain Holdings, Inc. (the “Company”) issued a press release announcing the Company’s results for its fiscal quarter ended March 31, 2020. 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 (the “Securities Act”), or the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.

Item 7.01
Regulation FD Disclosure.
On April 27, 2020, the Company issued a press release announcing that the Company declared a regular quarterly dividend of $0.33 per share, payable on June 12, 2020 to record holders of our common stock as of the close of business on May 29, 2020. A copy of the Company’s 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 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 NumberDescription





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:April 27, 2020By:/s/ Micah R. Conrad
Micah R. Conrad
Executive Vice President and Chief Financial Officer





(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Document


Exhibit 99.1
ONEMAIN HOLDINGS, INC. REPORTS FIRST QUARTER 2020 RESULTS
1Q 2020 diluted EPS of $0.24
1Q 2020 C&I adjusted diluted EPS of $0.33
1Q 2020 C&I Ending Net Finance Receivables of $18.3 billion
1Q 2020 C&I Net Charge-Off ratio of 6.46%

Evansville, IN, April 27, 2020 - OneMain Holdings, Inc. (NYSE: OMF) today reported pretax income of $43 million and net income of $32 million for the first quarter of 2020, compared to $202 million and $152 million, respectively, in the prior year quarter. Earnings per diluted share were $0.24 in the first quarter of 2020, compared to $1.11 in the prior year quarter.

On April 27, 2020, OneMain's Board of Directors declared a regular quarterly dividend of $0.33 per share, payable on June 12, 2020 to record holders of our common stock as of the close of business on May 29, 2020.

"At OneMain, we're focused on the well-being of our customers, team members and the communities we serve," said Doug Shulman, President and CEO of OneMain. "We have built our business to be resilient through all economic cycles, including a severe downturn. Our sophisticated underwriting, hybrid operating model, and conservative balance sheet with considerable liquidity are core strengths that will enable us to effectively manage our business as the current economic environment continues to evolve."

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 $60 million and adjusted net income of $45 million for the first quarter of 2020, compared to $246 million and $187 million, respectively, in the prior year quarter. Adjusted earnings per diluted share were $0.33 for the first quarter of 2020, compared to $1.37 in the prior year quarter.

Management runs the business based on C&I adjusted net income excluding loan loss reserves net of tax, which was $221 million for the first quarter 2020 and represented a 22% increase versus the prior year period. Management believes this reflects the capital generation of the business.

Originations totaled $2.6 billion in the first quarter of 2020, consistent with the prior year quarter. The percentage of secured originations was 53% in the first quarter of 2020, down from 56% in the prior year quarter.

Ending net finance receivables reached $18.3 billion at March 31, 2020, up 13% from $16.2 billion in the prior year quarter. Secured receivables represented $1.6 billion of the increase in ending net finance receivables from the prior year and were 52% of ending net finance receivables at March 31, 2020, up from 49% in the prior year quarter.

Average net finance receivables were $18.4 billion in the first quarter of 2020, up 14% from $16.2 billion in the prior year quarter.

Yield was 24.07% in the first quarter of 2020, up from 23.92% in the prior year quarter, generally reflecting continued stability in origination APR.

Interest income in the first quarter of 2020 was $1.1 billion, up from $954 million in the prior year quarter, reflecting higher average receivables.

The provision for finance receivable losses was $530 million in the first quarter of 2020, up from $276 million in the prior year quarter, primarily as a result of the impact of COVID-19 on our macroeconomic outlook.

The 30-89 day delinquency ratio was 2.26% at March 31, 2020, down from 2.47% at December 31, 2019 and up from 1.94% at March 31, 2019.

The 90+ day delinquency ratio was 2.16% at March 31, 2020, up from 2.11% at December 31, 2019 and up from 2.08% at March 31, 2019.

The net charge-off ratio was 6.46% in the first quarter of 2020, up from 5.71% in the fourth quarter of 2019 and down from 7.11% in the prior year quarter.

1



Operating expense for the first quarter of 2020 was $330 million, up 7% from $309 million in the prior year quarter, primarily reflecting inflationary increases and investment in the business.

Other

During the first quarter of 2020, Other generated an adjusted pretax loss of $1 million compared to $2 million in the prior year quarter. Other consists of our liquidating servicing activity from the SpringCastle Portfolio and our non-originating legacy operations, which includes primarily our liquidating real estate loans.

Funding and Liquidity

As of March 31, 2020, the company had principal debt balances outstanding of $20.8 billion, 52% of which was secured and 48% of which was unsecured. The company had $4.2 billion of cash and cash equivalents, which included $181 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that are unavailable for general corporate purposes.

At March 31, 2020, we had access to 14 committed conduit facilities with a total borrowing capacity of $7.1 billion. As of March 31, 2020 we had drawn an aggregate of $3.5 billion under these facilities as a prudent liquidity risk management measure in light of the uncertainty in the capital markets resulting from COVID-19, providing all the cash we needed to fully fund the business through the end of 2021 under several stress scenarios. At March 31, 2020, we had $6.1 billion of unencumbered personal loans and remaining borrowing capacity of $3.6 billion on our committed lines.

Use of Non-GAAP Financial Measures

We report the operating results of Consumer and Insurance and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, primarily interest expense and other expenses, 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 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) and Other adjusted pretax income (loss) represent income (loss) before income taxes on a Segment Accounting Basis and excludes direct costs incurred as result of COVID-19, net losses resulting from repurchases and repayments of debt, acquisition-related transaction and integration expenses, net gain on sale of cost method investment, restructuring charges, and net loss on sale of real estate loans. Management believes these non-GAAP financial measures are useful in assessing the profitability of our segment.

Management also uses Consumer and Insurance adjusted pretax income (loss) excluding loan loss reserves (“pretax capital generation”), and Consumer and Insurance adjusted net income excluding loan loss reserves net of tax (“capital generation”) as a key performance measure of our segment. Consumer and Insurance adjusted pretax income (loss) excluding loan loss reserves represents adjusted pretax income discussed above and excludes the change in our allowance for finance receivable losses in the period while still considering the actual net charge-offs for the period. Management believes that this non-GAAP measure is useful in assessing the capital created in the period impacting the overall capital adequacy of the Company. Management believes that the Company’s reserves, combined with our equity represent the loss absorption of the Company.

Management utilizes these non-GAAP measures in evaluating our performance. Additionally, these non-GAAP measures are consistent with the performance goals established in OMH’s executive compensation program. 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 GAAP.

Conference Call & Webcast Information

OneMain management will host a conference call and webcast to discuss our first quarter 2020 results and other general matters at 8:00 am Eastern Time on Tuesday, April 28, 2020. 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 7959258, 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 7959258, beginning approximately two hours after the event. The replay of the conference call will be available via audio webcast through May 12, 2020. 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.
2



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 on which 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, whether as a result of new information, future developments or otherwise, except as required by law. 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 associated with the COVID-19 pandemic and the mitigation efforts by governments to the pandemic and related effects on us, our customers, and employees; 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; a change in the proportion of secured loans may affect our personal loan receivables and portfolio yield; adverse changes in the rate at which we can collect or potentially sell our finance receivables portfolio; natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or our 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; 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; 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, or changes in 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
3



currently 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 real estate loan servicing, or changes in corporate or individual income tax laws or regulations, including effects of the Tax Cuts and Jobs Act and the Coronavirus Aid, Relief, and Economic Security Act; risks associated with our insurance operations, including insurance claims that exceed our expectations or insurance losses that exceed our reserves; our inability 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 associated litigation; 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 associated litigation; our continued ability to access the capital markets and maintain adequate 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 other 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; 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 securities 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.

4




OneMain Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Quarter-to-Date
(unaudited, in millions, except per share amounts)3/31/202012/31/20193/31/2019
Interest income1,106  1,107  956  
Interest expense(255) (252) (236) 
Provision for finance receivable losses(531) (293) (286) 
Net interest income after provision for finance receivable losses320  562  434  
Other Revenues:
Insurance117  119  110  
Investment 24  26  
Net loss on repurchases and repayments of debt —  —  (21) 
Net gain on sale of real estate loans—  —   
Other (1)
15  19  30  
Total other revenues141  162  148  
Other Expenses
Operating expenses(350) (336) (335) 
Insurance policy benefits and claims(68) (44) (45) 
Total other expenses(418) (380) (380) 
Income before income taxes43  344  202  
Income taxes
(11) (83) (50) 
Net income$32  $261  $152  
Weighted average number of diluted shares136.1  136.5  136.2  
Diluted EPS$0.24  $1.91  $1.11  
Book value per basic share$22.73  $31.82  $29.03  
Return on assets0.6 %4.6 %2.9 %
Provision for finance receivable losses$(531) $(293) $(286) 
Less: Net charge-offs296  263  284  
Change in allowance for finance receivable losses$235  $30  $ 

(1)1Q19 includes the fair value impairment of the remaining loans in held for sale after certain real estate loan sales. It also includes a gain on sale related to an investment held at cost.

5




OneMain Holdings, Inc.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of
(unaudited, $ in millions)3/31/202012/31/20193/31/2019
Assets  
Cash and cash equivalents  $4,203  $1,227  $1,709  
Investment securities  1,800  1,884  1,743  
Net finance receivables  18,269  18,389  16,136  
Unearned insurance premium and claim reserves  (797) (793) (668) 
Allowance for finance receivable losses  (2,182) (829) (733) 
Net finance receivables, less unearned insurance premium and claim
reserves and allowance for finance receivable losses 
 15,290  16,767  14,735  
Restricted cash and restricted cash equivalents  575  405  575  
Goodwill  1,422  1,422  1,422  
Other intangible assets  334  343  372  
Other assets (1)
1,069  769  802  
Total assets  $24,693  $22,817  $21,358  
Liabilities and Shareholders’ Equity  
Long-term debt  $20,443  $17,212  $16,117  
Insurance claims and policyholder liabilities  633  649  642  
Deferred and accrued taxes  68  34  81  
Other liabilities  497  592  568  
Total liabilities  21,641  18,487  17,408  
Common stock     
Additional paid-in capital  1,645  1,689  1,682  
Accumulated other comprehensive income (loss) (6) 44  (2) 
Retained earnings  1,412  2,596  2,269  
Total shareholders’ equity  3,052  4,330  3,950  
Total liabilities and shareholders’ equity  $24,693  $22,817  $21,358  

(1)Effective 1Q20, the Finance Receivables Held for Sale are included within 'Other assets'. Prior periods' balance sheet presentations have been revised to conform with this new alignment.

6




OneMain Holdings, Inc.
CONSOLIDATED KEY FINANCIAL METRICS (UNAUDITED)
Quarter-to-Date
(unaudited, $ in millions)3/31/202012/31/20193/31/2019
Non-TDR Net Finance Receivables$17,581  $17,731  $15,634  
TDR Net Finance Receivables688  658  502  
Net Finance Receivables  $18,269  $18,389  $16,136  
Average Net Receivables$18,380  $18,103  $16,146  
Average Daily Debt Balances17,675  17,261  15,839  
Origination Volume2,589  3,685  2,582  
Non-TDR Allowance$1,880  $557  $537  
TDR Allowance302  272  196  
Allowance$2,182  $829  $733  
Non-TDR Allowance Ratio10.70 %3.14 %3.43 %
TDR Allowance Ratio43.88 %41.31 %38.98 %
Allowance Ratio11.95 %4.51 %4.54 %
Gross Charge-Offs $337  $296  $311  
Recoveries(41) (33) (27) 
Net Charge-Offs$296  $263  $284  
Gross Charge-Off Ratio7.35 %6.48 %7.82 %
Recoveries(0.90 %)(0.73 %)(0.70 %)
Net Charge-Off Ratio6.45 %5.75 %7.12 %
30-89 Delinquency$412  $453  $312  
30+ Delinquency806  839  647  
60+ Delinquency561  567  468  
90+ Delinquency394  386  335  
30-89 Delinquency Ratio2.25 %2.46 %1.93 %
30+ Delinquency Ratio4.41 %4.56 %4.01 %
60+ Delinquency Ratio3.07 %3.08 %2.90 %
90+ Delinquency Ratio2.16 %2.10 %2.08 %

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)3/31/202012/31/20193/31/2019
Liquidity
Cash and cash equivalents$4,203  $1,227  $1,709  
Cash and cash equivalents unavailable for general corporate purposes181  182  312  
Unencumbered personal loans6,120  9,879  6,944  
Undrawn conduit facilities3,600  7,100  6,200  
Long-term debt$20,443  $17,212  $16,117  
Less: Junior subordinated debt(172) (172) (172) 
Adjusted Debt$20,271  $17,040  $15,945  
Less: Available cash and cash equivalents(4,022) (1,045) (1,397) 
Net Adjusted Debt$16,249  $15,995  $14,548  
Total Shareholders' Equity$3,052  $4,330  $3,950  
Less: Goodwill(1,422) (1,422) (1,422) 
Less: Other intangible assets(334) (343) (372) 
Plus: Junior subordinated debt172  172  172  
Adjusted Tangible Common Equity$1,468  $2,737  $2,328  
Plus: Allowance for finance receivable losses, net of tax (1)
1,637  630  557  
Adjusted Capital$3,105  $3,367  $2,885  
Adjusted Tangible Leverage (Net Adjusted Debt to Adjusted Capital)5.2x  4.8x  5.0x  

(1)Income taxes assume a 25% statutory tax rate for 2020 and a 24% statutory tax rate for 2019 periods.


8




OneMain Holdings, Inc.
CONSOLIDATED RETURN ON RECEIVABLES (UNAUDITED)
Quarter-to-Date
(unaudited, $ in millions)3/31/202012/31/20193/31/2019
Revenue (1)
25.8 %26.8 %26.6 %
Net Charge-Off(6.5 %)(5.8 %)(7.1 %)
Risk Adjusted Margin19.4 %21.1 %19.5 %
Operating Expenses(7.7 %)(7.3 %)(8.4 %)
Unlevered Return on Receivables11.7 %13.7 %11.1 %
Interest Expense(5.6 %)(5.5 %)(5.9 %)
Change in Allowance(5.2 %)(0.7 %)(0.1 %)
Income Tax Expense(0.2 %)(1.8 %)(1.3 %)
Return on Receivables0.7 %5.7 %3.8 %

Note:All ratios are based on consolidated results as a percentage of 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.

9




OneMain Holdings, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Quarter-to-Date
(unaudited, $ in millions)3/31/202012/31/20193/31/2019
Consumer & Insurance$51  $354  $232  
Other(1) (1) (3) 
Segment to GAAP Adjustment(7) (9) (27) 
Income Before Income Taxes - GAAP basis$43  $344  $202  
Pretax Income - Segment Accounting Basis$51  $354  $232  
Direct Costs Associated with COVID-19 (1)
 —  —  
Acquisition-Related Transaction and Integration Expenses
 (2)  
Net Loss on Repurchase and Repayment of Debt (2)
—  —  16  
Net Gain on Sale of Cost Method Investment—  —  (11) 
Restructuring Charges—  —   
Consumer & Insurance Adjusted Pretax Income (non-GAAP)$60  $352  $246  
Pretax Loss - Segment Accounting Basis$(1) $(1) $(3) 
Net Loss on Sale of Real Estate Loans (3)
—  —   
Other Adjusted Pretax Loss (non-GAAP)
$(1) $(1) $(2) 
Springleaf Debt Discount Accretion$(5) $(5) $(6) 
OMFH LLR Provision Catch-up(2) (3) (10) 
OMFH Receivable Premium Amortization(1) (2) (5) 
OMFH Receivable Discount Accretion   
Other(4) (2) (9) 
Total Segment to GAAP Adjustment$(7) $(9) $(27) 

(1)
Direct costs associated with COVID-19 include (i) information technology costs to transition employees to work remotely, (ii) branch, central operations, and corporate locations sanitization services and supplies, and (iii) other costs and fees directly related to COVID-19.
(2)Amounts differ from those presented on "Consolidated Statements of Operations (Unaudited)" page as a result of purchase accounting adjustments that are not applicable on a Segment Accounting Basis.
(3)For 1Q19, the gain on the sale of the real estate loans sold has been combined with the resulting fair value impairment of the remaining loans in finance receivables held for sale.

10




OneMain Holdings, Inc.
RECONCILIATION OF KEY SEGMENT METRICS (UNAUDITED) (Non-GAAP)
As of
(unaudited, $ in millions)3/31/202012/31/20193/31/2019
Consumer & Insurance$18,283  $18,421  $16,170  
Other—  —  —  
Segment to GAAP Adjustment (1)
(14) (32) (34) 
Net Finance Receivables - GAAP basis$18,269  $18,389  $16,136  
Consumer & Insurance$2,202  $849  $765  
Other—  —  —  
Segment to GAAP Adjustment(20) (20) (32) 
Allowance for Finance Receivable Losses - GAAP basis$2,182  $829  $733  

(1)
As a As a result of the adoption of ASU 2016-13, we converted all purchased credit impaired finance receivables to purchased credit deteriorated finance receivables in accordance with ASC Topic 326, which resulted in the gross-up of net finance receivables and allowance for finance receivable losses of $15 million on January 1, 2020.

11




OneMain Holdings, Inc.
CONSUMER AND INSURANCE SEGMENT (UNAUDITED) (Non-GAAP)
Quarter-to-Date
(unaudited, in millions, except per share amounts)3/31/202012/31/20193/31/2019
Interest income$1,101  $1,101  $954  
Interest expense(249) (247) (229) 
Provision for finance receivable losses(530) (289) (276) 
Net interest income after provision for finance receivable losses322  565  449  
Insurance117  119  110  
Investment 24  27  
Other10  15  14  
Total other revenues136  158  151  
Operating expenses(330) (327) (309) 
Insurance policy benefits and claims(68) (44) (45) 
Total other expenses(398) (371) (354) 
Adjusted pretax income (non-GAAP)60  352  246  
Income taxes (1)
(15) (84) (59) 
Adjusted net income (non-GAAP)$45  $268  $187  
Weighted average number of diluted shares136.1  136.5  136.2  
C&I adjusted diluted EPS (2)
$0.33  $1.96  $1.37  
Provision for finance receivable losses$(530) $(289) $(276) 
Less: Net charge-offs296  261  284  
Change in C&I allowance for finance receivable losses
234  28  (8) 
Adjusted pretax income (non-GAAP)60  352  246  
Pretax capital generation(3) (non-GAAP)
294  380  238  
Change in C&I allowance for finance receivable losses, net of tax(1) (non-GAAP)
176  21  (6) 
Adjusted net income (non-GAAP)45  268  187  
Capital generation(3) (non-GAAP)
$221  $289  $181  

(1)Income taxes assume a 25% statutory tax rate for 2020 and a 24% statutory tax rate for 2019 periods.
(2)C&I adjusted diluted EPS is calculated as the C&I adjusted net income (non-GAAP) divided by the weighted average number of diluted shares outstanding.
(3)Pretax capital generation represents adjusted pretax income excluding change in C&I allowance for finance receivable losses (non-GAAP). Capital generation represents adjusted net income excluding change in C&I allowance for finance receivable losses, net of tax (non-GAAP).

12




OneMain Holdings, Inc.
CONSUMER AND INSURANCE SEGMENT - KEY FINANCIAL METRICS (UNAUDITED) (Non-GAAP)
Quarter-to-Date
(unaudited, $ in millions)3/31/202012/31/20193/31/2019
Non-TDR Net Finance Receivables$17,539  $17,700  $15,579  
TDR Net Finance Receivables744  721  591  
Net Finance Receivables (1)
$18,283  $18,421  $16,170  
Average Net Receivables$18,397  $18,136  $16,179  
Origination Volume2,589  3,685  2,582  
Non-TDR Allowance$1,876  $557  $539  
TDR Allowance326  292  226  
Allowance (1)
$2,202  $849  $765  
Non-TDR Allowance Ratio10.70 %3.15 %3.45 %
TDR Allowance Ratio43.88 %40.46 %38.35 %
Allowance Ratio12.05 %4.61 %4.73 %
Gross Charge-Offs$337  $299  $316  
Recoveries(41) (38) (32) 
Net Charge-Offs$296  $261  $284  
Gross Charge-Off Ratio7.36 %6.53 %7.92 %
Recoveries(0.90 %)(0.82 %)(0.81 %)
Net Charge-Off Ratio6.46 %5.71 %7.11 %
30-89 Delinquency$413  $455  $313  
30+ Delinquency808  843  650  
60+ Delinquency562  570  470  
90+ Delinquency395  388  337  
30-89 Delinquency Ratio2.26 %2.47 %1.94 %
30+ Delinquency Ratio4.42 %4.58 %4.02 %
60+ Delinquency Ratio3.07 %3.09 %2.91 %
90+ Delinquency Ratio2.16 %2.11 %2.08 %
Note:  Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. Delinquency ratios are calculated as a percentage of C&I 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)."

13




OneMain Holdings, Inc.
CONSUMER & INSURANCE SEGMENT METRICS (UNAUDITED) (Non-GAAP)
Quarter-to-Date
(unaudited, $ in millions)3/31/202012/31/20193/31/2019
Revenue (1)
25.6 %26.6 %26.6 %
Net Charge-Off(6.5 %)(5.7 %)(7.1 %)
Risk Adjusted Margin19.1 %20.8 %19.5 %
Operating Expenses(7.2 %)(7.1 %)(7.7 %)
Unlevered Return on Receivables11.9 %13.7 %11.7 %
Interest Expense(5.5 %)(5.4 %)(5.7 %)
Change in Allowance(5.1 %)(0.6 %)0.2 %
Income Tax Expense (2)
(0.3 %)(1.8 %)(1.5 %)
Return on Receivables1.0 %5.9 %4.7 %
Beginning Adjusted Capital (12/31/2019)$3,367  
Capital Generation(2),(4) (non-GAAP)
221  
Less: Common Stock Repurchased and Retired(45) 
Less: Cash Dividends(388) 
Capital Returns(433) 
Less: Other Comprehensive Loss(50) 
Less: Purchase Accounting Adjustments(12) 
Less: Change in the Assumed Tax Rate (2)
(8) 
Less: Withholding Tax on Share-based Compensation
(6) 
Less: Adjusted Other Net Income (non-GAAP)(1) 
Plus: Purchased Credit Deteriorated Finance Receivables Gross-up, net of tax (2), (3)
11  
Plus: Other Intangibles Amortization 
Plus: Share-based Compensation Expense, net of forfeitures 
Other(50) 
Ending adjusted capital (3/31/2020)$3,105  

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 25% statutory tax rate for 2020 and a 24% statutory tax rate for 2019 periods.
(3)
As a result of the adoption of ASU 2016-13, we converted all purchased credit impaired finance receivables to purchased credit deteriorated finance receivables in accordance with ASC Topic 326, which resulted in the gross-up of net finance receivables and allowance for finance receivable losses of $15 million on January 1, 2020.
(4)Capital generation represents adjusted net income excluding change in C&I allowance for finance receivable losses, net of tax (non-GAAP). 


14




OneMain Holdings, Inc.
OTHER (UNAUDITED) (Non-GAAP)
Quarter-to-Date
(unaudited, $ in millions)3/31/202012/31/20193/31/2019
Interest income$ $ $ 
Interest expense(1) (1) (2) 
Net interest income after provision for finance receivable losses   
Total other revenues (1)
   
Total other expenses(6) (8) (12) 
Adjusted pretax income (non-GAAP)$(1) $(1) $(2) 
Net finance receivables held for sale (2)
$63  $66  $79  

Note:  Other financial information is presented on an adjusted Segment Accounting Basis.
(1) Total other revenues include portfolio servicing fees from SpringCastle.
(2) Effective 1Q20, the Net Finance Receivables Held for Sale are included within 'Other assets' on our Consolidated Balance Sheets. Prior periods' balance sheet presentations have been revised to conform with this new alignment.

15





OneMain Holdings, Inc.

Investor Contact:
Kathryn Miller, 212-359-2442
Kathryn.Miller@omf.com

Source: OneMain Holdings, Inc.

16

(Back To Top)