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Delaware
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27-3379612
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(State of incorporation)
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(I.R.S. Employer Identification No.)
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601 N.W. Second Street, Evansville, IN
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47708
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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•
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the inability to obtain, or delays in obtaining, cost savings and synergies from the “OneMain Acquisition”, as defined in “Business Overview” in Item 1 on page 5 of this report, and risks associated with the integration of the companies;
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unanticipated expenditures relating to the OneMain Acquisition;
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any litigation, fines or penalties that could arise relating to the OneMain Acquisition;
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the impact of the OneMain Acquisition on each company’s relationships with employees and third parties;
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various risks relating to the proposed sale of branches to Lendmark Financial Services, LLC (the “Lendmark Sale”) in connection with the previously disclosed settlement with the U.S. Department of Justice (the “DOJ”), including the costs and effects of any failure or inability to consummate the Lendmark Sale timely or at all, which could potentially result in a sale of such branches to another buyer on terms less favorable than the proposed Lendmark Sale;
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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;
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levels of unemployment and personal bankruptcies;
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natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or branches or other operating facilities;
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war, acts of terrorism, riots, civil disruption, pandemics, cyber security breaches, or other events disrupting business or commerce;
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changes in the rate at which we can collect or potentially sell our finance receivables portfolio;
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the effectiveness of our credit risk scoring models in assessing the risk of customer unwillingness or lack of capacity to repay;
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changes in our ability to attract and retain employees or key executives to support our businesses;
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changes in the competitive environment in which we operate, including the demand for our products, customer responsiveness to our distribution channels, 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;
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shifts in collateral values, delinquencies, or credit losses;
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changes in federal, state or local laws, regulations, or regulatory policies and practices, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank 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;
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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;
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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;
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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;
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our continued ability to access the capital markets or the sufficiency of our current sources of funds to satisfy our cash flow requirements;
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our ability to comply with our debt covenants;
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our ability to generate sufficient cash to service all of our indebtedness;
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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;
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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;
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the impacts of our securitizations and borrowings;
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our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries;
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changes in accounting standards or tax policies and practices and the application of such new policies and practices to the manner in which we conduct business;
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the effect of future sales of our remaining portfolio of real estate loans and the transfer of servicing for these loans; and
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other risks described in “Risk Factors” in Item 1A in Part I of this report.
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provide responsible personal loan products;
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offer credit and non-credit insurance;
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pursue strategic acquisitions of loan portfolios; and
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pursue acquisitions of companies and/or establish joint ventures.
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Consumer and Insurance;
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Acquisitions and Servicing; and
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Real Estate.
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Credit life insurance
— Insures the life of the borrower in an amount typically equal to the unpaid balance of the finance receivable and provides for payment to the lender of the finance receivable in the event of the borrower’s death.
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Credit disability insurance
— Provides scheduled monthly loan payments to lender during borrower’s disability due to illness or injury.
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Credit involuntary unemployment insurance
— Provides scheduled monthly loan payments to the lender during borrower’s involuntary unemployment.
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Credit-related property and casualty insurance
— Written to protect the value of property pledged as collateral for the finance receivable.
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mail and telephone solicitations;
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payment processing;
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originating “out of footprint” loans;
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servicing of delinquent real estate loans and certain personal loans;
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bankruptcy process for Chapter 7, 11, 12 and 13 loans;
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litigation requests for wage garnishments and other actions against borrowers;
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collateral protection insurance tracking;
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repossessing and re-marketing of titled collateral; and
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charge-off recovery operations.
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Our operational policies and procedures standardize various aspects of lending and collections.
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Our branch finance receivable systems control amounts, rates, terms, and fees of our customers’ accounts; create loan documents specific to the state in which the branch office operates or to the customer’s location if the loan is made electronically through our centralized operations; and control cash receipts and disbursements.
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Our headquarters accounting personnel reconcile bank accounts, investigate discrepancies, and resolve differences.
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Our credit risk management system reports allow us to track individual branch office performance and to monitor lending and collection activities.
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Our executive information system is available to headquarters and field operations management to review the status of activity through the close of business of the prior day.
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Our branch field operations management structure is designed to control a large, decentralized organization with succeeding levels of supervision staffed with more experienced personnel.
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Our field operations compensation plan aligns the operating activities and goals with corporate strategies by basing the incentive portion of field personnel compensation on profitability and credit quality.
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Our compliance department assesses our compliance with federal and state laws and regulations, as well as our compliance with our internal policies and procedures; oversees compliance training to ensure employees have a sufficient level of understanding of the laws and regulations that impact their job responsibilities; and manages our regulatory examination process.
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Our executive office of customer care maintains our consumer complaint resolution and reporting process.
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Our internal audit department audits our business for adherence to operational policy and procedure and compliance with federal and state laws and regulations.
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the Dodd-Frank Act;
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the Equal Credit Opportunity Act (prohibits discrimination against creditworthy applicants) and the Consumer Financial Protection Bureau’s (“CFPB”) Regulation B, which implements this Act;
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the Fair Credit Reporting Act (governs the accuracy and use of credit bureau reports);
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the Truth in Lending Act (governs disclosure of applicable charges and other finance receivable terms) and the CFPB’s Regulation Z, which implements this Act;
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the Fair Debt Collection Practices Act;
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the Gramm-Leach-Bliley Act (governs the handling of personal financial information) and CFPB Regulation P, which implements this Act;
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the Servicemembers Civil Relief Act, which can impose limitations on the servicer’s ability to collect on a loan originated with an obligor who is on active duty status and up to nine months thereafter;
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the Real Estate Settlement Procedures Act and the CFPB’s Regulation X (both of which regulate the making and servicing of certain loans secured by real estate);
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the Federal Trade Commission’s Consumer Claims and Defenses Rule, also known as the “Holder in Due Course” Rule; and
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the Federal Trade Commission Act.
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provide for state licensing and periodic examination of lenders and loan originators, including state laws adopted or amended to comply with licensing requirements of the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “SAFE Act”) (which, in some states, requires licensing of individuals who perform real estate loan modifications);
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require the filing of reports with regulators;
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impose maximum term, amount, interest rate, and other charge limitations;
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regulate whether and under what circumstances we may offer insurance and other ancillary products in connection with a lending transaction; and
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provide for additional consumer protections.
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licensing;
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conduct of business, including marketing and sales practices;
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periodic financial and market conduct examination of the affairs of insurers;
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form and content of required financial reports;
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standards of solvency;
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limitations on the payment of dividends and other affiliate transactions;
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types of products offered;
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approval of policy forms and premium rates;
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formulas used to calculate any unearned premium refund due to an insured customer;
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permissible investments;
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reserve requirements for unearned premiums, losses, and other purposes; and
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claims processing.
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licensing;
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conduct of business, including marketing and sales practices;
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periodic financial and market conduct examination of the affairs of insurers;
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form and content of required financial reports;
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standards of solvency;
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limitations on the payment of dividends and other affiliate transactions;
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types of products offered; and
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reserve requirements for unearned premiums, losses, and other purposes.
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the integration of the portfolio into our information technology platforms and servicing systems;
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the quality of servicing during any interim servicing period after we purchase a portfolio but before we assume servicing obligations from the seller or its agents;
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the disruption to our ongoing businesses and distraction of our management teams from ongoing business concerns;
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incomplete or inaccurate files and records;
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the retention of existing customers;
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the creation of uniform standards, controls, procedures, policies and information systems;
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the occurrence of unanticipated expenses; and
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potential unknown liabilities associated with the transactions, including legal liability related to origination and servicing prior to the acquisition.
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the integration of the personnel with certain of our management teams, strategies, operations, products and services;
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the integration of the physical facilities with our information technology platforms and servicing systems; and
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the disruption to our ongoing businesses and distraction of our management teams from ongoing business concerns.
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our representations and warranties concerning the quality and characteristics of the finance receivable are inaccurate;
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there is borrower fraud; and
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we fail to comply, at the individual finance receivable level or otherwise, with regulatory requirements in connection with the origination and servicing of the finance receivables.
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address the risks associated with our new focus on personal (including auto) loan receivables, including, but not limited to consumer demand for finance receivables, and changes in economic conditions and interest rates;
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address the risks associated with the new centralized method of originating and servicing our internet loans through our centralized operations, which represents a departure from our traditional high-touch branch-based servicing function and includes the potential for higher default and delinquency rates;
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integrate, and develop the expertise required to capitalize on, our centralized operations;
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obtain regulatory approval in connection with our internet lending;
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obtain regulatory approval in connection with the acquisition of consumer loan portfolios and/or companies in the business of selling consumer loans or related products;
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comply with regulations in connection with doing business and offering loan products over the internet, including various state and federal e-signature rules mandating that certain disclosures be made and certain steps be followed in order to obtain and authenticate e-signatures, with which we have limited experience;
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finance future growth;
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successfully source, underwrite and integrate new acquisitions of loan portfolios and other businesses; and
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successfully integrate the combined companies.
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it may require us to dedicate a significant portion of our cash flow from operations to the payment of the principal of, and interest on, our indebtedness, which reduces the funds available for other purposes, including finance receivable originations;
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it could limit our ability to withstand competitive pressures and reduce our flexibility in responding to changing regulatory, business and economic conditions;
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it may limit our ability to incur additional borrowings or securitizations for working capital, capital expenditures, business development, debt service requirements, acquisitions or general corporate or other purposes, or to refinance our indebtedness;
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it may require us to seek to change the maturity, interest rate and other terms of our existing debt;
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it may place us at a competitive disadvantage to competitors that are proportionately not as highly leveraged;
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it may cause a downgrade of our debt and long-term corporate ratings; and
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it may cause us to be more vulnerable to periods of negative or slow growth in the general economy or in our business.
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incur or guarantee additional indebtedness or issue certain preferred stock;
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make dividend payments or distributions on or purchases of OMFH’s equity interests;
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make other restricted payments or investments;
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create certain liens;
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make certain dispositions of assets;
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engage in certain transactions with affiliates;
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sell certain securities of our subsidiaries;
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in the case of such restricted subsidiaries, incur limitations on the ability to pay dividends or make other payments; and
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merge, consolidate or sell all or substantially all of OneMain’s properties and assets.
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our ability to generate sufficient cash to service all of our outstanding debt;
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our continued ability to access debt and securitization markets and other sources of funding on favorable terms;
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our ability to complete on favorable terms, as needed, additional borrowings, securitizations, finance receivable portfolio sales, or other transactions to support liquidity, and the costs associated with these funding sources, including sales at less than carrying value and limits on the types of assets that can be securitized or sold, which would affect profitability;
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the potential for downgrade of our debt by rating agencies, which would have a negative impact on our cost of, and access to, capital;
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our ability to comply with our debt covenants;
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the amount of cash expected to be received from our finance receivable portfolio through collections (including prepayments) and receipt of finance charges, which could be materially different than our estimates;
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the potential for declining financial flexibility and reduced income should we use more of our assets for securitizations and finance receivable portfolio sales; and
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the potential for reduced income due to the possible deterioration of the credit quality of our finance receivable portfolios.
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our inability to grow our personal loan portfolio with adequate profitability to fund operations, loan losses, and other expenses;
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our inability to monetize assets including, but not limited to, our access to debt and securitization markets;
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our inability to obtain the additional necessary funding to finance the Company’s operations after the OneMain Acquisition;
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the effect of federal, state and local laws, regulations, or regulatory policies and practices, including the Dodd-Frank Act (which, among other things, established the CFPB with broad authority to regulate and examine financial institutions), on 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;
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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 warranty made in connection with the transaction;
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the potential for increasing costs and difficulty in servicing our loan portfolio as a result of heightened nationwide regulatory scrutiny of loan servicing and foreclosure practices in the industry generally, and related costs that could be passed on to us in connection with the subservicing of our real estate loans that were originated or acquired centrally;
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reduced cash receipts as a result of the liquidation of our real estate loan portfolio;
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the potential for additional unforeseen cash demands or accelerations of obligations;
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reduced income due to loan modifications where the borrower’s interest rate is reduced, principal payments are deferred, or other concessions are made;
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the potential for declines in bond and equity markets; and
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the potential effect on us if the capital levels of our regulated and unregulated subsidiaries prove inadequate to support current business plans.
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a classified board of directors with staggered three-year terms;
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removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote (provided, however, that for so long as Fortress and certain of its affiliates and permitted transferees beneficially own, directly or indirectly, at least 30% of our issued and outstanding common stock (including Fortress’ proportionate interest in shares of our common stock held by the Initial Stockholder), directors may be removed with or without cause with the affirmative vote of a majority of the voting interest of stockholders entitled to vote);
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provisions in our restated certificate of incorporation and amended and restated bylaws prevent stockholders from calling special meetings of our stockholders (provided, however, that for so long as Fortress and certain of its affiliates and permitted transferees beneficially own, directly or indirectly, at least 20% of our issued and outstanding common stock (including Fortress’s proportionate interest in shares of our common stock held by the Initial Stockholder), any stockholders that collectively beneficially own at least 20% of our issued and outstanding common stock may call special meetings of our stockholders);
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advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings;
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certain rights to Fortress and certain of its affiliates and permitted transferees with respect to the designation of directors for nomination and election to our board of directors, including the ability to appoint a majority of the members of our board of directors, plus one director, for so long as Fortress and certain of its affiliates and permitted transferees continue to beneficially own, directly or indirectly at least 30% of our issued and outstanding common stock (including Fortress’s proportionate interest in shares of our common stock held by the Initial Stockholder);
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no provision in our restated certificate of incorporation or amended and restated bylaws for cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election;
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our restated certificate of incorporation and our amended and restated bylaws only permit action by our stockholders outside a meeting by unanimous written consent, provided, however, that for so long as Fortress and certain of its affiliates and permitted transferees beneficially own, directly or indirectly, at least 20% of our issued and outstanding common stock (including Fortress’s proportionate interest in shares of our common stock held by the Initial Stockholder), our stockholders may act without a meeting by written consent of a majority of our stockholders; and
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under our restated certificate of incorporation, our board of directors has authority to cause the issuance of preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders. Nothing in our restated certificate of incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock.
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reaction to the OneMain Acquisition;
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variations in our quarterly or annual operating results;
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changes in our earnings estimates (if provided) or differences between our actual financial and operating results and those expected by investors and analysts;
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the contents of published research reports about us or our industry or the failure of securities analysts to cover our common stock after this offering;
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additions to, or departures of, key management personnel;
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any increased indebtedness we may incur in the future;
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announcements by us or others and developments affecting us;
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actions by institutional stockholders;
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litigation and governmental investigations;
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changes in market valuations of similar companies;
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speculation or reports by the press or investment community with respect to us or our industry in general;
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increases in market interest rates that may lead purchasers of our shares to demand a higher yield;
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announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments; and
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general market, political and economic conditions, including any such conditions and local conditions in the markets in which our borrowers are located.
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High
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Low
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||||
2015
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||||
First Quarter
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$
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54.34
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$
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31.35
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Second Quarter
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53.80
|
|
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44.67
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Third Quarter
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52.00
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|
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41.00
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Fourth Quarter
|
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51.39
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|
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39.24
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|
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||||
2014
|
|
|
|
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||||
First Quarter
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$
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28.56
|
|
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$
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23.43
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|
Second Quarter
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|
27.35
|
|
|
22.35
|
|
||
Third Quarter
|
|
34.74
|
|
|
25.28
|
|
||
Fourth Quarter
|
|
39.86
|
|
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32.04
|
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10/16/2013
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12/31/2013
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12/31/2014
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12/31/2015
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||||||||
OneMain Holdings, Inc.
|
$
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100.00
|
|
$
|
131.26
|
|
$
|
187.80
|
|
$
|
215.68
|
|
NYSE Composite Index
|
100.00
|
|
106.12
|
|
113.28
|
|
108.65
|
|
||||
NYSE Financial Sector Index
|
100.00
|
|
104.89
|
|
113.28
|
|
109.21
|
|
(dollars in millions except earnings (loss) per share)
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|
At or for the Years Ended December 31,
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||||||||||||||||||
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2015 (a)
|
|
2014
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|
2013
|
|
2012
|
|
2011
|
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Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
|
$
|
1,931
|
|
|
$
|
1,982
|
|
|
$
|
2,154
|
|
|
$
|
1,715
|
|
|
$
|
1,871
|
|
Interest expense
|
|
715
|
|
|
734
|
|
|
920
|
|
|
1,075
|
|
|
1,285
|
|
|||||
Provision for finance receivable losses
|
|
759
|
|
|
474
|
|
|
527
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|
|
342
|
|
|
330
|
|
|||||
Other revenues
|
|
261
|
|
|
832
|
|
|
153
|
|
|
98
|
|
|
142
|
|
|||||
Other expenses
|
|
987
|
|
|
701
|
|
|
782
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|
|
701
|
|
|
758
|
|
|||||
Income (loss) before provision for (benefit from) income taxes
|
|
(269
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)
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|
905
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|
|
78
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|
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(305
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)
|
|
(360
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)
|
|||||
Net income (loss)
|
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(122
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)
|
|
608
|
|
|
94
|
|
|
(218
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)
|
|
(242
|
)
|
|||||
Net income attributable to non-controlling interests
|
|
120
|
|
|
103
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) attributable to OneMain Holdings, Inc.
|
|
(242
|
)
|
|
505
|
|
|
(19
|
)
|
|
(218
|
)
|
|
(242
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(1.89
|
)
|
|
$
|
4.40
|
|
|
$
|
(0.19
|
)
|
|
$
|
(2.18
|
)
|
|
$
|
(2.42
|
)
|
Diluted
|
|
(1.89
|
)
|
|
4.38
|
|
|
(0.19
|
)
|
|
(2.18
|
)
|
|
(2.42
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses (b)
|
|
$
|
14,141
|
|
|
$
|
6,090
|
|
|
$
|
13,253
|
|
|
$
|
11,489
|
|
|
$
|
12,961
|
|
Total assets (b)
|
|
21,056
|
|
|
10,812
|
|
|
15,176
|
|
|
14,501
|
|
|
15,363
|
|
|||||
Long-term debt (b)
|
|
17,300
|
|
|
8,356
|
|
|
12,714
|
|
|
12,593
|
|
|
13,067
|
|
|||||
Total liabilities (b)
|
|
18,451
|
|
|
8,975
|
|
|
13,289
|
|
|
13,320
|
|
|
14,018
|
|
|||||
OneMain Holdings, Inc. shareholders’ equity
|
|
2,751
|
|
|
2,025
|
|
|
1,540
|
|
|
1,181
|
|
|
1,345
|
|
|||||
Non-controlling interests
|
|
(146
|
)
|
|
(188
|
)
|
|
347
|
|
|
—
|
|
|
—
|
|
|||||
Total shareholders’ equity
|
|
2,605
|
|
|
1,837
|
|
|
1,887
|
|
|
1,181
|
|
|
1,345
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
(c)
|
|
|
2.22
|
|
|
1.08
|
|
|
(c)
|
|
|
(c)
|
|
(a)
|
Selected financial data for 2015 includes OneMain’s results effective from November 1, 2015, pursuant to our contractual agreements with Citigroup.
|
(b)
|
Prior year consolidated balance sheet data reflects (i) reclassification of debt issuance costs from other assets to long-term debt as a result of our early adoption of accounting standards update 2015-03,
Interest - Imputation of Interest
, which totaled
$29 million
,
$55 million
,
$28 million
,
$21 million
at December 31, 2014, 2013, 2012, and 2011, respectively, and (ii) reclassification of unearned insurance premium and claim reserves related to finance receivables from insurance claims and policyholder liabilities to a contra-asset to net finance receivables in connection with our policy integration with OneMain, which totaled
$217 million
,
$172 million
,
$138 million
,
$127 million
at December 31, 2014, 2013, 2012, and 2011, respectively.
|
(c)
|
Earnings did not cover total fixed charges by
$269 million
in 2015,
$305 million
in 2012, and
$360 million
in 2011.
|
Topic
|
|
Page
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
•
|
Personal Loans —
We offer personal loans through our combined branch network and over the internet through our centralized operations to customers who generally need timely access to cash. Our personal loans are typically non-revolving with a fixed-rate and a fixed, original term of
three
to
six years
. At
December 31, 2015
, we had over
2.3 million
personal loans, representing
$13.9 billion
of net finance receivables (including personal loans held for sale of
$617 million
). At
December 31, 2015
,
$2.8 billion
, or
21%
, were secured by collateral consisting of titled personal property (such as automobiles) and
$10.5 billion
, or
79%
, were secured by consumer household goods or other items of personal property or were unsecured, compared to
$1.9 billion
of personal loans, or
49%
, secured by collateral consisting of titled personal property and
$1.9 billion
, or
51%
, secured by consumer household goods or other items of personal property or unsecured at December 31, 2014.
|
•
|
Insurance Products —
We offer our customers credit insurance (life insurance, disability insurance, and involuntary unemployment insurance) and non-credit insurance through both our combined branch network and our centralized operations. Credit insurance and non-credit insurance products are provided by Springleaf insurance subsidiaries, Merit and Yosemite, and by OneMain insurance subsidiaries, AHL and Triton. We also offer home and auto membership plans of an unaffiliated company as an ancillary product.
|
•
|
SpringCastle Portfolio —
We service the SpringCastle Portfolio that we acquired through a joint venture in which we own a
47%
equity interest. These loans include unsecured loans and loans secured by subordinate residential real
|
•
|
Real Estate Loans —
We ceased real estate lending in January of 2012, and during 2014, we sold $6.4 billion real estate loans held for sale. The remaining real estate loans may be closed-end accounts or open-end home equity lines of credit, generally have a fixed rate and maximum original terms of 360 months, and are secured by first or second mortgages on residential real estate. We continue to service the liquidating real estate loans and support any advances on open-end accounts. At
December 31, 2015
, we had
$524 million
of real estate loans held for investment, of which
$202 million
, or
39%
, were secured by first mortgages and
$322 million
, or
61%
, were secured by second mortgages, compared to
$227 million
of real estate loans, or
36%
, secured by first mortgages and
$398 million
, or
64%
, secured by second mortgages at December 31, 2014. Real estate loans held for sale totaled
$179 million
and $205 million at
December 31, 2015
and 2014, respectively, all of which were secured by first mortgages.
|
•
|
Retail Sales Finance —
We ceased purchasing retail sales contracts and revolving retail accounts in January of 2013. We continue to service the liquidating retail sales contracts and will provide revolving retail sales financing services on our revolving retail accounts. We refer to retail sales contracts and revolving retail accounts collectively as “retail sales finance.”
|
•
|
Consumer and Insurance;
|
•
|
Acquisitions and Servicing; and
|
•
|
Real Estate.
|
•
|
On November 15, 2015, we completed the acquisition of OneMain. See Note
2
of the Notes to Consolidated Financial Statements in Item 8 for further information on the OneMain Acquisition.
|
•
|
Net finance receivables
—
Consumer and Insurance reached
$13.6 billion
at
December 31, 2015
, including
$617 million
personal loans held for sale, compared to
$3.8 billion
at December 31, 2014.
|
•
|
Origination volume
—
Consumer and Insurance totaled
$5.7 billion
in
2015
compared to
$3.6 billion
in 2014 (including
$1.1 billion
of direct auto loan originations during
2015
compared to
$250 million
during 2014).
|
•
|
Pretax core earnings (a non-GAAP measure) was
$481 million
in
2015
compared to
$378 million
in 2014.
|
•
|
Significant expansion of our geographical presence.
We believe that our expanded footprint will allow us to reach new customers for our personal finance products and further enhance our reputation in the communities we serve.
|
•
|
Diversification of our customer base.
Our branch customer base more than doubled as a result of the OneMain Acquisition and, in addition, we believe the OneMain Acquisition will enable us to extend our reach to higher credit score segments than we presently serve.
|
•
|
Product cross‑sell opportunities and scale benefits.
The OneMain Acquisition will enable us to distribute existing Springleaf products through OneMain branches and leverage key OneMain technology and sales practices to achieve greater scale benefits in existing Springleaf branches.
|
•
|
Significant cost savings opportunities by combining complementary businesses.
The highly complementary nature of our two businesses, including branch operations, will enable us to achieve significant on‑going cost savings. Expected drivers of cost savings include consolidation of branch operations, elimination of redundant centralized and corporate functions and greater efficiency of marketing programs.
|
•
|
Earnings accretion.
We expect to realize approximately $275 million - $300 million of synergies from the OneMain Acquisition, with that amount reflected in our results beginning with the second half of 2017. We also anticipate incurring approximately $275 million of acquisition-related expenses to consolidate the two companies, which we expect to incur primarily during 2016 and the first half of 2017.
|
(dollars in millions except earnings (loss) per share)
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
1,931
|
|
|
$
|
1,982
|
|
|
$
|
2,154
|
|
Interest expense
|
|
715
|
|
|
734
|
|
|
920
|
|
|||
Provision for finance receivable losses
|
|
759
|
|
|
474
|
|
|
527
|
|
|||
Net interest income after provision for finance receivable losses
|
|
457
|
|
|
774
|
|
|
707
|
|
|||
Other revenues
|
|
261
|
|
|
832
|
|
|
153
|
|
|||
Acquisition-related transaction and integration expenses
|
|
62
|
|
|
—
|
|
|
—
|
|
|||
Other expenses
|
|
925
|
|
|
701
|
|
|
782
|
|
|||
Income (loss) before provision for (benefit from) income taxes
|
|
(269
|
)
|
|
905
|
|
|
78
|
|
|||
Provision for (benefit from) income taxes
|
|
(147
|
)
|
|
297
|
|
|
(16
|
)
|
|||
Net income (loss)
|
|
(122
|
)
|
|
608
|
|
|
94
|
|
|||
Net income attributable to non-controlling interests
|
|
120
|
|
|
103
|
|
|
113
|
|
|||
Net income (loss) attributable to OneMain Holdings, Inc.
|
|
$
|
(242
|
)
|
|
$
|
505
|
|
|
$
|
(19
|
)
|
|
|
|
|
|
|
|
||||||
Share Data:
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
127,910,680
|
|
|
114,791,225
|
|
|
102,917,172
|
|
|||
Diluted
|
|
127,910,680
|
|
|
115,265,123
|
|
|
102,917,172
|
|
|||
Earnings (loss) per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(1.89
|
)
|
|
$
|
4.40
|
|
|
$
|
(0.19
|
)
|
Diluted
|
|
$
|
(1.89
|
)
|
|
$
|
4.38
|
|
|
$
|
(0.19
|
)
|
(dollars in millions)
|
|
||
|
|
||
2015 compared to 2014
|
|
||
Decrease in Springleaf average net receivables
|
$
|
(632
|
)
|
Increase in Springleaf yield
|
335
|
|
|
OneMain finance charges in 2015
|
246
|
|
|
Total
|
$
|
(51
|
)
|
•
|
Springleaf average net receivables
decrease
d in
2015
primarily due to (i) Springleaf liquidating real estate loan portfolio, including the transfers of real estate loans with a total carrying value of
$6.7 billion
to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014, (ii) the transfer of $608 million of Springleaf personal loans to finance receivables held for sale on September 30, 2015 as part of our initiative to close the OneMain Acquisition, and (iii) the liquidating status of the SpringCastle Portfolio. This
decrease
was partially offset by higher personal loan average net receivables resulting from (i) our continued focus on personal loan
|
•
|
Springleaf yield
increase
d in
2015
primarily due to a higher proportion of Springleaf personal loans, which have higher yields, as a result of the real estate loan sales during 2014. The
increase
in yield was partially offset by the launch of our auto loan product in June of 2014, which generally has lower yields.
|
•
|
OneMain finance charges
for 2015 included two months of finance charges, net of a purchase accounting adjustment of
$109 million
primarily due to accretion of premium on OneMain personal loans, as a result of the OneMain Acquisition.
|
•
|
Springleaf average debt
decreased
in
2015
primarily due to debt repurchases and repayments of
$2.0 billion
during 2015 and the elimination of $3.5 billion of debt associated with our mortgage securitizations as a result of the sales of the Company’s beneficial interests in the mortgage-backed certificates during 2014 and the resulting deconsolidation of the securitization trusts and their outstanding certificates reflected as long-term debt. These decreases were partially offset by net debt issuances pursuant to SFC’s consumer securitization transactions completed during 2015 and additional borrowings under its conduit facilities. See Note
13
of the Notes to Consolidated Financial Statements in Item 8 for further information on SFC’s consumer loan securitization transactions and borrowings under its conduit facilities.
|
•
|
Weighted average interest rate on Springleaf debt
increase
d in
2015
primarily due to the elimination of debt associated with our mortgage securitizations discussed above, which generally have lower interest rates. This
increase
was partially offset by the debt repurchases and repayments discussed above, which resulted in lower accretion of net discount, established at the date Fortress acquired a significant ownership interest in OMH (the “Fortress Acquisition”), applied to long-term debt.
|
•
|
OneMain interest expense
for 2015 included two months of interest expense on acquired debt as a result of the OneMain Acquisition. See Notes
12
and
13
of the Notes to Consolidated Financial Statements in Item 8 for further information on OneMain’s long-term debt, consumer securitizations, and borrowing under its revolving conduit facility.
|
•
|
Allowance requirements
on Springleaf real estate loans decreased in
2015
as a result of the transfers of real estate loans with a total carrying value of
$6.7 billion
to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014.
|
•
|
Net charge-offs
decrease
d in
2015
primarily due to (i) lower net charge-offs on the SpringCastle Portfolio reflecting the improved central servicing performance as the acquired portfolio matures under our ownership and (ii) lower net charge-offs on Springleaf real estate loans reflecting the 2014 transfer of real estate loans previously discussed. This
decrease
was partially offset by higher net charge-offs on Springleaf personal loans primarily due to growth in these personal loans during
2015
and a higher Springleaf personal loan delinquency ratio in
2015
.
|
•
|
OneMain provision for finance receivable losses
for
2015
reflected two months of net charge-offs and allowance requirements on OneMain personal loans totaling
$393 million
. Since we acquired the OneMain personal loans at a premium, an allowance was recorded to reflect the losses inherent in the portfolio over the loss emergence period.
|
•
|
Springleaf other revenues
decreased
$630 million
in
2015
due to the net of the following: (i) transactions that occurred in 2014 including net gain on sales of real estate loans and related trust assets of
$726 million
, net loss on repurchases and repayments of debt of
$66 million
, and net loss on fair value adjustments on debt of
$15 million
, (ii) net increase in revenues associated with the 2014 real estate loans sales of $4 million (higher investment revenue generated from investing the proceeds of the sales, partially offset by lower insurance revenue reflecting the cancellations of dwelling policies as a result of the sales) and (iii)
increase
in other revenues — other of
$11 million
primarily due to lower net charge-offs recognized on finance receivables held for sale and provision adjustments for liquidated held for sale accounts during 2015.
|
•
|
OneMain other revenues
for
2015
included two months of (i) insurance revenues of
$53 million
, (ii) other revenues — other of
$5 million
, and (iii) investment revenues of
$1 million
.
|
•
|
Springleaf salaries and benefits
increased
$54 million
in
2015
primarily due to (i) increased staffing in Springleaf centralized operations and (ii) non-cash incentive compensation expense of $15 million recorded in the second quarter of 2015 related to the rights of certain Springleaf executives to a portion of the cash proceeds from the sale of our common stock by the Initial Stockholder. See Note
17
of the Notes to Consolidated Financial Statements in Item 8 for further information on the equity offering.
|
•
|
Springleaf other operating expenses
increased
$7 million
in
2015
primarily due to (i) higher Springleaf advertising expenses due to increased direct mailings to pre-approved customers, our increased focus on e-commerce and social media marketing, and our marketing efforts on Springleaf auto loan product during 2015 and (ii) higher Springleaf information technology expenses. The increase in other operating expenses was partially offset by (i) costs of $7 million recorded in 2014 related to the real estate loan sales, (ii) a $6 million reduction in reserves related to Springleaf estimated Property Protection Insurance (“PPI”) claims, and (iii) lower subservicing fees on our real estate loans as a result of the real estate loan sales during 2014. See Note
20
of the Notes to Consolidated Financial Statements in Item 8 for further information on the loss contingencies related to PPI claims.
|
•
|
Springleaf insurance policy benefits and claims
decreased
$3 million
in
2015
primarily due to favorable variances in Springleaf benefit reserves.
|
•
|
OneMain other expenses
for
2015
included two months of (i) salaries and benefits expenses of
$71 million
, (ii) other operating expenses of
$71 million
, and (iii) insurance policy benefits and claims of
$24 million
.
|
(dollars in millions)
|
|
||
|
|
||
2014 compared to 2013
|
|
||
Decrease in average net receivables
|
$
|
(435
|
)
|
Increase in yield
|
202
|
|
|
Interest income on finance receivables held for sale
|
61
|
|
|
Total
|
$
|
(172
|
)
|
•
|
Average net receivables
decreased in 2014 primarily due to (i) our liquidating real estate loan portfolio, including the transfers of real estate loans with a total carrying value of $6.7 billion to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014 and (ii) lower SpringCastle average net receivables resulting from liquidations. This decrease was partially offset by higher personal loan average net receivables resulting from our continued focus on personal loan originations through our branch network and centralized operations.
|
•
|
Yield
increased in 2014 primarily from our personal loans, which have higher yields. This increase also reflected a higher proportion of personal loans as a result of the transfers of real estate loans to finance receivables held for sale during 2014.
|
•
|
SpringCastle finance charges
for 2014 included an additional three months of finance charges on the SpringCastle Portfolio totaling $143 million, which is included in the change in average net receivables and yield in the table above.
|
•
|
Interest income on finance receivables held for sale
in 2014 resulted from the transfers of real estate loans to finance receivables held for sale during 2014.
|
•
|
Average debt
decreased in 2014 primarily due to debt repurchases and repayments of $4.7 billion during 2014 and the elimination of $3.5 billion of debt associated with our mortgage securitizations as a result of the sales of the Company’s beneficial interests in the mortgage-backed certificates during 2014. These decreases were partially offset by net debt issuances pursuant to our consumer securitization transactions completed during 2014.
|
•
|
Weighted average interest rate on our debt
increased in 2014 primarily due to the elimination of debt associated with our mortgage securitizations discussed above, which generally have lower interest rates. This increase was partially offset by the debt repurchases and repayments discussed above, which resulted in lower accretion of net discount applied to long-term debt.
|
•
|
SpringCastle interest expense
for 2014 included an additional three months of interest expense on long-term debt associated with the securitization of the SpringCastle Portfolio totaling $22 million, which is included in the change in average debt and weighted average interest rate in the table above.
|
•
|
Allowance requirements
decreased in 2014 primarily due to a reduction in the allowance requirements on our real estate loans deemed to be purchased credit impaired finance receivables and troubled debt restructured (“TDR”) finance receivables subsequent to the Fortress Acquisition as a result of the transfers of real estate loans with a total
|
•
|
Net charge-offs
increased in 2014 primarily due to (i) higher net charge-offs on our personal loans primarily due to growth in our personal loans during 2014 and a higher personal loan delinquency ratio at December 31, 2014 and (ii) $37 million of recoveries recorded in June 2013 resulting from a sale of previously charged-off finance receivables in June 2013 (net of a $4 million adjustment for the subsequent buyback of certain finance receivables).
|
•
|
SpringCastle provision for finance receivable losses
for 2014 included an additional three months of provision for finance receivable losses associated with the SpringCastle Portfolio totaling $53 million.
|
•
|
Salaries and benefits
decreased $104 million in 2014 primarily due to $146 million of share-based compensation expense due to the grant of restricted stock units (“RSUs”) to certain of our executives and employees in the second half of 2013. This decrease was partially offset by (i) higher salary accruals reflecting an increase in number of employees and increased commissions related to originations of personal loans, (ii) share-based compensation expenses of $6 million during 2014 due to the grant of RSUs to certain of our executives and employees subsequent to the initial public offering of OMH common stock, and (iii) employee retention and severance accruals of $3 million recorded in the second half of 2014 due to the workforce reduction of approximately 170 employees in 2014.
|
•
|
Other operating expenses
increased $13 million in 2014 primarily due to higher professional fees primarily due to costs relating to the real estate sales transactions and higher advertising and information technology expenses during 2014. This increase was partially offset by servicing fee expenses for the SpringCastle Portfolio recorded in 2013 pursuant to an interim servicing agreement that was in place between April 1, 2013 and August 31, 2013.
|
•
|
Insurance policy benefits and claims
increased $10 million in 2014 primarily due to unfavorable variances in benefit reserves and claim reserves.
|
(a)
|
Interest income adjustments consist of: (i) the net purchase accounting impact of the amortization (accretion) of the net premium (discount) assigned to finance receivables and (ii) the impact of identifying purchased credit impaired finance receivables as compared to the historical values of finance receivables.
|
(b)
|
Interest expense adjustments primarily include the accretion of the net discount applied to our long term debt as part of purchase accounting.
|
(c)
|
Provision for finance receivable losses consists of the adjustment to reflect the difference between our allowance adjustment calculated under our Segment Accounting Basis and our GAAP basis. In addition, in 2015, the Company reversed loan loss provision of
$364 million
recorded related to OneMain’s acquired finance receivables balance, as we do not believe the initial recording of the provision is indicative of the run rate of the business.
|
*
|
Reflects required adjustment under GAAP to establish the allowance for finance receivable losses post application of initial purchase accounting related to the OneMain Acquisition.
|
(d)
|
Repurchases and repayments of long-term debt adjustments reflect the impact on acceleration of the accretion of the net discount or amortization of the net premium applied to long-term debt.
|
(e)
|
Fair value adjustments on debt reflect differences between Segment Accounting Basis and GAAP basis. On a Segment Accounting Basis, certain long-term debt components are marked-to-market on a recurring basis and are no longer marked-to-market on a recurring basis after the application of purchase accounting at the applicable time of acquisition.
|
(f)
|
Fair value adjustments on sales of finance receivables held for sale originated as held for investment reflect the impact of carrying value differences between Segment Accounting Basis and purchase accounting basis when measuring mark to market for loans held for sale.
|
(g)
|
Amortization of other intangible assets reflects the net impact of amortization associated with identified intangibles as part of purchase accounting and deferred costs impacted by purchase accounting.
|
(h)
|
“Other” items reflect differences between Segment Accounting Basis and GAAP basis relating to various items such as the elimination of deferred charges, adjustments to the basis of other real estate assets, fair value adjustments to fixed assets, adjustments to insurance claims and policyholder liabilities, and various other differences all as of the applicable date of acquisition.
|
(i)
|
Includes acquisition-related transaction and integration expenses of
$47 million
for 2015. See “Segment Results - Other” for further discussion of pretax operating results of our other non-core/non-originating legacy operations.
|
Provision for finance receivable losses
|
Directly correlated with a specific segment, except for allocations to Other, which are based on the remaining delinquent accounts as a percentage of total delinquent accounts.
|
Other revenues
|
Directly correlated with a specific segment, except for: (i) net gain (loss) on repurchases and repayments of debt, which is allocated to the segments based on the interest expense allocation of debt and (ii) gains and losses on foreign currency exchange, which is allocated to the segments based on the interest expense allocation of debt.
|
Salaries and benefits
|
Directly correlated with a specific segment. Other salaries and benefits not directly correlated with a specific segment are allocated to each of the segments based on services provided.
|
Acquisition-related transaction and integration expenses
|
Consists of: (i) acquisition-related transaction and integration costs related to the OneMain Acquisition, including legal and other professional fees, which we report in Other, as these are costs related to acquiring the business as opposed to operating the business; (ii) software termination costs, which are allocated to Consumer and Insurance; and (iii) incentive compensation incurred above and beyond expected cost from acquiring and retaining talent in relation to the OneMain Acquisition, which are allocated to each of the segments based on services provided.
|
Other operating expenses
|
Directly correlated with a specific segment. Other operating expenses not directly correlated with a specific segment are allocated to each of the segments based on services provided.
|
Insurance policy benefits and claims
|
Directly correlated with a specific segment.
|
(dollars in millions)
|
|
|
|
|
|
|
||||||
At or for the Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
1,952
|
|
|
$
|
1,466
|
|
|
$
|
1,211
|
|
Interest expense
|
|
329
|
|
|
246
|
|
|
221
|
|
|||
Provision for finance receivable losses
|
|
441
|
|
|
354
|
|
|
250
|
|
|||
Net interest income after provision for finance receivable losses
|
|
1,182
|
|
|
866
|
|
|
740
|
|
|||
Other revenues
|
|
334
|
|
|
251
|
|
|
233
|
|
|||
Acquisition-related transaction and integration expenses
|
|
17
|
|
|
—
|
|
|
—
|
|
|||
Other expenses
|
|
915
|
|
|
660
|
|
|
549
|
|
|||
Pretax operating income
|
|
584
|
|
|
457
|
|
|
424
|
|
|||
Pretax operating income attributable to non-controlling interests
|
|
120
|
|
|
103
|
|
|
113
|
|
|||
Pretax operating income attributable to OneMain Holdings, Inc.
|
|
$
|
464
|
|
|
$
|
354
|
|
|
$
|
311
|
|
|
|
|
|
|
|
|
||||||
Consumer and Insurance
|
|
|
|
|
|
|
||||||
Finance receivables held for investment:
|
|
|
|
|
|
|
||||||
Net finance receivables
|
|
$
|
12,954
|
|
|
$
|
3,807
|
|
|
$
|
3,141
|
|
Number of accounts
|
|
2,202,091
|
|
|
918,564
|
|
|
830,513
|
|
|||
TDR finance receivables
|
|
$
|
502
|
|
|
$
|
22
|
|
|
$
|
15
|
|
Allowance for finance receivable losses - TDR
|
|
$
|
237
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
||||||
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
|
|
$
|
5,734
|
|
|
$
|
3,395
|
|
|
$
|
2,793
|
|
Yield
|
|
25.85
|
%
|
|
26.99
|
%
|
|
25.84
|
%
|
|||
Gross charge-off ratio (a)
|
|
7.52
|
%
|
|
5.65
|
%
|
|
5.18
|
%
|
|||
Recovery ratio (b)
|
|
(0.80
|
)%
|
|
(0.71
|
)%
|
|
(1.66
|
)%
|
|||
Charge-off ratio (a) (b)
|
|
6.72
|
%
|
|
4.94
|
%
|
|
3.52
|
%
|
|||
Delinquency ratio
|
|
3.03
|
%
|
|
2.82
|
%
|
|
2.60
|
%
|
|||
Origination volume
|
|
$
|
5,715
|
|
|
$
|
3,644
|
|
|
$
|
3,253
|
|
Number of accounts originated
|
|
991,051
|
|
|
784,613
|
|
|
790,943
|
|
|||
|
|
|
|
|
|
|
||||||
Acquisitions and Servicing
|
|
|
|
|
|
|
||||||
Net finance receivables
|
|
$
|
1,576
|
|
|
$
|
1,979
|
|
|
$
|
2,505
|
|
Number of accounts
|
|
232,383
|
|
|
277,533
|
|
|
344,045
|
|
|||
Average net receivables
|
|
$
|
1,769
|
|
|
$
|
2,217
|
|
|
$
|
2,731
|
|
Yield
|
|
26.54
|
%
|
|
24.78
|
%
|
|
23.78
|
%
|
|||
Net charge-off ratio
|
|
4.90
|
%
|
|
6.74
|
%
|
|
6.44
|
%
|
|||
Delinquency ratio
|
|
4.07
|
%
|
|
4.69
|
%
|
|
8.18
|
%
|
(a)
|
The gross charge-off ratio and charge-off ratio in 2015 reflect $62 million of additional charge-offs recorded in December of 2015 (on a Segment Accounting Basis) related to alignment in charge-off policy for personal loans in connection with the OneMain integration. Excluding these additional charge-offs, our gross charge-off ratio and charge-off ratio would have been 6.43% and 5.62%, respectively.
|
(b)
|
The recovery ratio and charge-off ratio in 2013 reflects $23 million of recoveries on charged-off personal loans resulting from a sale of our charged-off finance receivables in June of 2013, net of a $3 million adjustment for the subsequent buyback of certain personal loans. Excluding the impacts of the $15 million of additional charge-offs and the $23 million of recoveries on charged-off personal loans, the charge-off ratio would have been 3.81% in 2013.
|
•
|
Interest income — Consumer and Insurance
increased
$566 million
in 2015 primarily due to the net of the following:
|
◦
|
Springleaf finance charges
increased
$168 million
in 2015 primarily due to higher average net receivables, partially offset by lower yield. Average net receivables increased in 2015 primarily due to increased originations on Springleaf personal loans resulting from our continued focus on personal loans, including the launch of the Springleaf auto loan product in June of 2014. At
December 31, 2015
, we had over
86,000
auto loans totaling
$1.0 billion
compared to 19,000 auto loans totaling $238 million at
December 31, 2014
. Springleaf yield decreased in 2015 primarily due to the higher proportion of Springleaf auto loan product, which generally has lower yields.
|
◦
|
Springleaf interest income on finance receivables held for sale
of
$43 million
in 2015 resulted from the transfer of personal loans to finance receivables held for sale on September 30, 2015.
|
◦
|
OneMain finance charges
for 2015 of
$355 million
included two months of finance charges on OneMain personal loans as a result of the OneMain Acquisition, with an effective closing date of October 31, 2015.
|
•
|
Interest income — Acquisitions and Servicing
decreased
$80 million
in 2015 primarily due to lower average net receivables reflecting the liquidating status of the acquired SpringCastle Portfolio.
|
•
|
Interest expense — Consumer and Insurance
increased
$78 million
in 2015 due to the following:
|
◦
|
Springleaf interest expense
increased
$26 million
in 2015 primarily due to the redistribution of the allocation of long-term debt as of November 1, 2015, based on the interim excess cash proceeds from the 2014 real estate loan sales used to finance the OneMain Acquisition. This increase was partially offset by a reduction in the utilization of financing from Springleaf unsecured notes that was replaced by consumer loan securitizations and additional borrowings under our conduit facilities, which generally have lower interest rates.
|
◦
|
OneMain interest expense
of
$52 million
for 2015 included two months of interest expense on acquired debt as a result of the OneMain Acquisition.
|
•
|
Interest expense — Acquisitions and Servicing
increased
$5 million
in 2015 primarily due to the refinance of the SpringCastle 2013-A Notes in October of 2014, which resulted in an increase in average debt.
|
•
|
Provision for finance receivable losses — Consumer and Insurance
increased
$149 million
in 2015 due to the following:
|
◦
|
Springleaf provision for finance receivable losses
increased
$57 million
in 2015 primarily due to higher net charge-offs on Springleaf personal loans during 2015 reflecting (i) growth in Springleaf personal loans in 2015 and (ii) a higher Springleaf personal loan delinquency ratio at
December 31, 2015
.
|
◦
|
OneMain provision for finance receivable losses
for 2015 reflected two months of net charge-offs and allowance requirements totaling
$92 million
.
|
•
|
Provision for finance receivable losses — Acquisitions and Servicing
decreased
$62 million
in 2015 primarily due to lower net charge-offs on the SpringCastle Portfolio reflecting improvements in servicing of the acquired portfolio and its liquidating status.
|
•
|
Springleaf other revenues
increased
$21 million
in
2015
due to the net of the following: (i) transactions that occurred in 2014 including net loss on repurchases and repayments of debt of $28 million and net loss on fair value adjustments on debt of $15 million, (ii)
decrease
in other revenues — other of
$14 million
primarily due to decreased servicing fee revenues for the fees charged by Acquisitions and Servicing for servicing the SpringCastle Portfolio reflecting the liquidating status of the acquired portfolio (these fees are eliminated in consolidated operating results with the servicing fee expenses, which are included in other operating expenses), and (iii)
decrease
in insurance revenues of
$8 million
primarily due to decreases in credit and non-credit earned premiums reflecting the cancellations of dwelling policies as a result of the real estate loan sales during 2014 and fewer non-credit policies written, respectively.
|
•
|
OneMain other revenues
for
2015
included two months of (i) insurance revenues of
$53 million
, (ii) other revenues — other of
$5 million
, and (iii) investment revenues of
$4 million
.
|
•
|
Other expenses — Consumer and Insurance
increased
$267 million
in 2015 due to the net of the following:
|
◦
|
Springleaf salaries and benefits
increased
$70 million
in 2015 primarily due to (i) higher variable compensation reflecting increased originations of personal loans, (ii) increased staffing in Springleaf centralized operations, and (iii) the redistribution of the allocation of salaries and benefit expenses as a result of the real estate loan sales in 2014.
|
◦
|
Springleaf other operating expenses
increased
$46 million
in 2015 primarily due to (i) higher advertising expenses reflecting our increased focus on e-commerce and social media marketing and our marketing efforts on our auto loan product during 2015, (ii) higher information technology expenses reflecting increased depreciation and software maintenance as a result of software purchases and the capitalization of internally developed software, (iii) higher occupancy costs resulting from increased general maintenance costs of our branches and higher leasehold improvement amortization expense from the servicing facilities added in 2014, (iv) higher professional fees relating to legal and audit services, (v) higher credit and collection related costs reflecting growth in personal loans, including our auto loan product, and (vi) the redistribution of the allocation of other operating expenses as a result of the real estate loan sales in 2014.
|
◦
|
Springleaf insurance policy benefits and claims
decreased
$3 million
in 2015 primarily due to favorable variances in benefit reserves.
|
◦
|
OneMain other expenses
for
2015
included two months of (i) salaries and benefits expenses of
$72 million
, (ii) other operating expenses of
$63 million
, and (iii) insurance policy benefits and claims of
$19 million
.
|
•
|
Other expenses — Acquisitions and Servicing
decreased
$12 million
in 2015 primarily due to decreased credit and collection related costs reflecting lower portfolio servicing costs due to the liquidating status of the acquired SpringCastle Portfolio.
|
•
|
Interest income — Consumer and Insurance
increased $194 million in 2014 primarily due to the following:
|
◦
|
Average net receivables
increased in 2014 primarily due to increased originations of personal loans resulting from our continued focus on personal loans.
|
◦
|
Yield
increased in 2014 primarily due to pricing of new personal loans at higher state specific rates with concentrations in states with more favorable returns.
|
•
|
Interest income — Acquisitions and Servicing
increased
$61 million
in 2014 primarily due to an additional three months of finance charges on the SpringCastle Portfolio, partially offset by lower average net receivables reflecting the liquidating status of the acquired portfolio.
|
•
|
Interest expense — Consumer and Insurance
increased $15 million in 2014 primarily due to additional funding required to support increased originations of personal loans. This increase was partially offset by less utilization of financing from unsecured notes that was replaced by consumer loan securitizations, which generally have lower interest rates.
|
•
|
Interest expense — Acquisitions and Servicing
increased
$10 million
in 2014 primarily due to an additional three months of interest expense on long-term debt associated with the securitization of the SpringCastle Portfolio and the refinance of the SpringCastle 2013-A Notes in October of 2014, which resulted in an increase in average debt.
|
•
|
Provision for finance receivable losses — Consumer and Insurance
increased $85 million in 2014 primarily due to (i) higher net charge-offs and additional allowance requirements on our personal loans resulting from increased originations of personal loans in 2014 and a higher personal loan delinquency ratio at December 31, 2014 and (ii) $23 million of recoveries recorded in June 2013 on previously charged-off personal loans resulting from a sale of these loans in June 2013 (net of a $3 million adjustment for the subsequent buyback of certain personal loans).
|
•
|
Provision for finance receivable losses — Acquisitions and Servicing
increased
$19 million
in 2014 primarily due to an additional three months of provision for finance receivable losses on the SpringCastle Portfolio.
|
•
|
Other expenses — Consumer and Insurance
increased
$85 million
in 2014 due to the following:
|
◦
|
Other operating expenses
increased $51 million in 2014 primarily due to higher professional fees, advertising, and information technology expenses and the redistribution of the allocation of other operating expenses as a result of the real estate loan sales in 2014.
|
◦
|
Salaries and benefits
increased $24 million in 2014 primarily due to increased originations of personal loans and the redistribution of the allocation of salaries and benefit expenses as a result of the real estate loan sales in 2014.
|
◦
|
Insurance policy benefits and claims
increased $10 million in 2014 primarily due to unfavorable variances in benefit reserves and claim reserves.
|
•
|
Other expenses — Acquisitions and Servicing
increased
$26 million
in 2014 primarily due to an additional three months of operating expenses allocated to Acquisitions and Servicing.
|
(dollars in millions)
|
|
|
|
|
|
|
||||||
At or for the Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
68
|
|
|
$
|
406
|
|
|
$
|
698
|
|
Interest expense
|
|
212
|
|
|
353
|
|
|
546
|
|
|||
Provision for finance receivable losses
|
|
(2
|
)
|
|
128
|
|
|
255
|
|
|||
Net interest loss after provision for finance receivable losses
|
|
(142
|
)
|
|
(75
|
)
|
|
(103
|
)
|
|||
Other revenues (a)
|
|
3
|
|
|
154
|
|
|
7
|
|
|||
Acquisition-related transaction and integration expenses
|
|
1
|
|
|
—
|
|
|
—
|
|
|||
Other expenses
|
|
33
|
|
|
93
|
|
|
83
|
|
|||
Pretax operating income (loss)
|
|
$
|
(173
|
)
|
|
$
|
(14
|
)
|
|
$
|
(179
|
)
|
|
|
|
|
|
|
|
||||||
Finance receivables held for investment:
|
|
|
|
|
|
|
||||||
Net finance receivables
|
|
$
|
565
|
|
|
$
|
670
|
|
|
$
|
9,335
|
|
Number of accounts
|
|
21,631
|
|
|
22,852
|
|
|
119,483
|
|
|||
TDR finance receivables
|
|
$
|
160
|
|
|
$
|
160
|
|
|
$
|
3,263
|
|
Allowance for finance receivable losses - TDR
|
|
$
|
57
|
|
|
$
|
56
|
|
|
$
|
755
|
|
Average net receivables
|
|
$
|
619
|
|
|
$
|
5,131
|
|
|
$
|
9,932
|
|
Yield
|
|
8.99
|
%
|
|
6.91
|
%
|
|
7.03
|
%
|
|||
Loss ratio (b) (c)
|
|
3.73
|
%
|
|
2.10
|
%
|
|
2.20
|
%
|
|||
Delinquency ratio
|
|
7.71
|
%
|
|
8.07
|
%
|
|
8.04
|
%
|
|||
|
|
|
|
|
|
|
||||||
Finance receivables held for sale:
|
|
|
|
|
|
|
||||||
Net finance receivables
|
|
$
|
182
|
|
|
$
|
200
|
|
|
$
|
—
|
|
Number of accounts
|
|
3,196
|
|
|
3,578
|
|
|
—
|
|
|||
TDR finance receivables
|
|
$
|
187
|
|
|
$
|
194
|
|
|
$
|
—
|
|
(a)
|
For purposes of our segment reporting presentation in Note
23
of the Notes to Consolidated Financial Statements in Item 8, we have combined the lower of cost or fair value adjustments recorded on the date the real estate loans were transferred to finance receivables held for sale with the final gain (loss) on the sales of these loans.
|
(b)
|
The loss ratio in 2014 reflects $2 million of recoveries on charged-off real estate loans resulting from a sale of previously charged-off real estate loans in March of 2014. Excluding these recoveries, our Real Estate loss ratio would have been 2.14% in 2014.
|
(c)
|
The loss ratio in 2013 reflects $9 million of recoveries on charged-off real estate loans resulting from a sale of our charged-off finance receivables in June of 2013, net of a $1 million adjustment for the subsequent buyback of certain real estate loans. Excluding these recoveries, our Real Estate loss ratio would have been 2.30% in 2013.
|
•
|
Finance charges
decreased
$299 million
in 2015 primarily due to the net of the following:
|
◦
|
Average net receivables
decreased in 2015 primarily due to the continued liquidation of the real estate portfolio, including the transfers of real estate loans with a total carrying value of
$7.2 billion
to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014.
|
◦
|
Yield
increased in 2015 primarily due to a higher proportion of our remaining real estate loans that are secured by second mortgages, which generally have higher yields.
|
•
|
Interest income on real estate loans held for sale
decreased
$39 million
in 2015 primarily due to lower average real estate loans held for sale during 2015.
|
•
|
Other operating expenses
decreased
$36 million
in 2015 primarily due to lower professional services expenses and credit and collection related costs resulting from the sales of real estate loans during 2014. This decrease also reflected the redistribution of the allocation of other operating expenses as a result of the real estate loan sales in 2014.
|
•
|
Salaries and benefits
decreased
$24 million
in 2015 primarily due to the redistribution of the allocation of salaries and benefit expenses as a result of the real estate loan sales in 2014.
|
•
|
Finance charges
decreased
$344 million
in 2014 primarily due to the following:
|
◦
|
Average net receivables
decreased in 2014 primarily due to the continued liquidation of the real estate portfolio, including the transfers of real estate loans with a total carrying value of $7.2 billion to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014.
|
◦
|
Yield
decreased in 2014 reflecting a higher proportion of TDR finance receivables during the first half of 2014, which generally have lower rates than non-modified real estate loans. The decrease in yield was partially offset by a higher proportion of our remaining real estate loans that are secured by second mortgages, which generally have higher yields.
|
•
|
Interest income
on real estate loans held for sale in 2014 resulted from the transfers of real estate loans to held for sale during 2014.
|
(a)
|
Interest expense for
2015
when compared to
2014
reflected higher interest expense on unsecured debt, which was allocated based on a higher cash balance held in anticipation of the OneMain Acquisition.
|
(b)
|
Acquisition-related transaction and integration costs of
$47 million
for
2015
reflected costs relating to the OneMain Acquisition and the Lendmark Sale, including transaction costs, technology termination and certain compensation and benefit related costs. See Note
2
of the Notes to Consolidated Financial Statements in Item 8 for further information.
|
(c)
|
Other expenses for
2015
included non-cash incentive compensation expense of $15 million recorded in the second quarter of 2015 related to the rights of certain executives to a portion of the cash proceeds from the sale of our common stock by the Initial Stockholder.
|
(d)
|
Other expenses for 2013 included $146 million of share-based compensation expense due to the grant of RSUs to certain of our executives and employees in the second half of 2013.
|
(dollars in millions)
|
|
Personal
Loans
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
60-89 days past due
|
|
$
|
124
|
|
|
$
|
22
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
164
|
|
90-119 days past due
|
|
93
|
|
|
14
|
|
|
3
|
|
|
—
|
|
|
110
|
|
|||||
120-149 days past due
|
|
54
|
|
|
11
|
|
|
2
|
|
|
1
|
|
|
68
|
|
|||||
150-179 days past due
|
|
50
|
|
|
10
|
|
|
2
|
|
|
—
|
|
|
62
|
|
|||||
180 days or more past due
|
|
4
|
|
|
1
|
|
|
12
|
|
|
—
|
|
|
17
|
|
|||||
Total delinquent finance receivables
|
|
325
|
|
|
58
|
|
|
37
|
|
|
1
|
|
|
421
|
|
|||||
Current
|
|
12,776
|
|
|
1,475
|
|
|
474
|
|
|
22
|
|
|
14,747
|
|
|||||
30-59 days past due
|
|
166
|
|
|
43
|
|
|
13
|
|
|
—
|
|
|
222
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
60-89 days past due
|
|
$
|
37
|
|
|
$
|
31
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
81
|
|
90-119 days past due
|
|
30
|
|
|
19
|
|
|
9
|
|
|
—
|
|
|
58
|
|
|||||
120-149 days past due
|
|
24
|
|
|
16
|
|
|
5
|
|
|
1
|
|
|
46
|
|
|||||
150-179 days past due
|
|
21
|
|
|
14
|
|
|
4
|
|
|
—
|
|
|
39
|
|
|||||
180 days or more past due
|
|
2
|
|
|
2
|
|
|
12
|
|
|
—
|
|
|
16
|
|
|||||
Total delinquent finance receivables
|
|
114
|
|
|
82
|
|
|
42
|
|
|
2
|
|
|
240
|
|
|||||
Current
|
|
3,661
|
|
|
1,839
|
|
|
565
|
|
|
45
|
|
|
6,110
|
|
|||||
30-59 days past due
|
|
56
|
|
|
58
|
|
|
18
|
|
|
1
|
|
|
133
|
|
|||||
Total
|
|
$
|
3,831
|
|
|
$
|
1,979
|
|
|
$
|
625
|
|
|
$
|
48
|
|
|
$
|
6,483
|
|
(dollars in millions)
|
|
Personal
Loans *
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans *
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables
|
|
$
|
46
|
|
|
$
|
13
|
|
|
$
|
201
|
|
|
$
|
260
|
|
Allowance for TDR finance receivable losses
|
|
$
|
17
|
|
|
$
|
4
|
|
|
$
|
34
|
|
|
$
|
55
|
|
Number of TDR accounts
|
|
12,449
|
|
|
1,656
|
|
|
3,506
|
|
|
17,611
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables
|
|
$
|
22
|
|
|
$
|
10
|
|
|
$
|
196
|
|
|
$
|
228
|
|
Allowance for TDR finance receivable losses
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
32
|
|
|
$
|
36
|
|
Number of TDR accounts
|
|
8,075
|
|
|
1,159
|
|
|
3,463
|
|
|
12,697
|
|
*
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Personal
Loans
|
|
Real Estate
Loans
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
December 31, 2015
|
|
|
|
|
|
|
||||||
TDR net finance receivables
|
|
$
|
2
|
|
|
$
|
92
|
|
|
$
|
94
|
|
Number of TDR accounts
|
|
738
|
|
|
1,322
|
|
|
2,060
|
|
|||
|
|
|
|
|
|
|
||||||
December 31, 2014
|
|
|
|
|
|
|
||||||
TDR net finance receivables
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
91
|
|
Number of TDR accounts
|
|
—
|
|
|
1,284
|
|
|
1,284
|
|
•
|
On January 15, 2016, we drew
$298 million
under the variable funding notes issued by the Springleaf Funding Trust 2013-VFN1 (the “Springleaf 2013-VFN1 Trust”) and repaid
$300 million
on the variable funding notes issued by the Mill River Funding Trust 2015-VFN1 (the “Mill River 2015-VFN1 Trust”).
|
•
|
On January 21, 2016, OMFH entered into four separate bilateral conduit facilities with unaffiliated financial institutions that provide an aggregate
$2.4 billion
of committed financing on a revolving basis for personal loans originated by OneMain, which we refer to as the “New Facilities”. The New Facilities replaced OMFH’s revolving
|
•
|
On January 21, 2016, we amended the note purchase agreement with the Springleaf 2013-VFN1 Trust to (i) increase the maximum principal balance from
$350 million
to
$850 million
and (ii) extend the revolving period ending in April 2017 to January 2018, which may be extended to January 2019, subject to satisfaction of customary conditions precedent. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in the
36
th
month following the end of the revolving period. As of February 24, 2016,
$298 million
was outstanding under the notes.
|
•
|
On January 21, 2016, we amended the note purchase agreement with the Mill River 2015-VFN1 Trust to decrease the maximum principal balance from
$400 million
to
$100 million
. As of February 24, 2016,
$100 million
was outstanding under the notes.
|
•
|
On February 10, 2016, OMFH completed a private securitization transaction in which a wholly owned special purpose vehicle of OMFH, OneMain Financial Issuance Trust 2016-1 (“OMFIT 2016-1”), issued
$500 million
of notes backed by personal loans.
$414 million
of the notes issued by OMFIT 2016-1, represented by Classes A and B, were sold to unaffiliated third parties at a weighted average interest rate of
3.79%
and
$86 million
of the notes issued by OMFIT 2016-1, represented by Classes C and D, were retained by OMFH.
|
•
|
On February 16, 2016, Sixteenth Street Funding LLC (“Sixteenth Street”), a wholly owned subsidiary of SFC, exercised its right to redeem the asset backed notes issued by the Springleaf Funding Trust 2013-B on June 19, 2013 (the “2013-B Notes”). To redeem the 2013-B Notes, Sixteenth Street paid a redemption price of
$371 million
, which excluded
$30 million
for the Class C and Class D Notes owned by Sixteenth Street on the date of the optional redemption. The outstanding principal balance of the 2013-B Notes was
$400 million
on the date of the optional redemption.
|
•
|
On February 16, 2016, Sumner Brook Funding Trust 2013-VFN1, a wholly owned special purpose vehicle of SFC, repaid the entire
$100 million
outstanding principal balance of its variable funding notes.
|
•
|
On February 24, 2016, we amended the note purchase agreement with the Midbrook Funding Trust 2013-VFN1 to (i)extend the revolving period ending in June 2016 to February 2018 and (ii) decrease the maximum principal balance from $300 million to $250 million on February 24, 2017. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in the
36
th
month following the end of the revolving period. As of February 24, 2016,
no
amounts were outstanding under the notes.
|
•
|
On February 24, 2016, we amended the note purchase agreement with the Whitford Brook Funding Trust 2014-VFN1 to extend the revolving period ending in June 2017 to June 2018. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in the
12
th
month following the end of the revolving period. As of February 24, 2016,
$200 million
was outstanding under the notes.
|
•
|
our inability to grow or maintain our personal loan portfolio with adequate profitability;
|
•
|
the effect of federal, state and local laws, regulations, or regulatory policies and practices;
|
•
|
potential liability relating to real estate and personal loans which we have sold or may sell in the future, or relating to securitized loans; and
|
•
|
the potential for disruptions in the debt and equity markets.
|
•
|
maintaining disciplined underwriting standards and pricing for loans we originate or purchase and managing purchases of finance receivables;
|
•
|
pursuing additional debt financings (including new securitizations and new unsecured debt issuances, debt refinancing transactions and standby funding facilities), or a combination of the foregoing;
|
•
|
purchasing portions of our outstanding indebtedness through open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we may determine; and
|
•
|
obtaining secured revolving credit facilities to allow us to use excess cash to pay down higher cost debt.
|
(dollars in millions)
|
|
Initial Note Amounts Issued (a)
|
|
Initial
Collateral
Balance (b)
|
|
Current
Note
Amounts
Outstanding
|
|
Current
Collateral
Balance (b)
|
|
Current
Weighted
Average
Interest Rate
|
|
Collateral
Type
|
|
Revolving
Period
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumer Securitizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Springleaf
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
SLFT 2013-B
|
|
$
|
370
|
|
|
$
|
442
|
|
|
$
|
370
|
|
|
$
|
442
|
|
|
3.99
|
%
|
|
Personal loans
|
|
3 years
|
SLFT 2014-A
|
|
559
|
|
|
644
|
|
|
559
|
|
|
644
|
|
|
2.55
|
%
|
|
Personal loans
|
|
2 years
|
||||
SLFT 2015-A
|
|
1,163
|
|
|
1,250
|
|
|
1,163
|
|
|
1,250
|
|
|
3.47
|
%
|
|
Personal loans
|
|
3 years
|
||||
SLFT 2015-B
|
|
314
|
|
|
335
|
|
|
314
|
|
|
336
|
|
|
3.78
|
%
|
|
Personal loans
|
|
5 years
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
OneMain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
OMFIT 2014-1
|
|
760
|
|
|
1,004
|
|
|
760
|
|
|
984
|
|
|
2.54
|
%
|
|
Personal loans
|
|
2 years
|
||||
OMFIT 2014-2
|
|
1,185
|
|
|
1,325
|
|
|
1,185
|
|
|
1,292
|
|
|
2.93
|
%
|
|
Personal loans
|
|
2 years
|
||||
OMFIT 2015-1
|
|
1,229
|
|
|
1,397
|
|
|
1,229
|
|
|
1,367
|
|
|
3.74
|
%
|
|
Personal loans
|
|
3 years
|
||||
OMFIT 2015-2
|
|
1,250
|
|
|
1,346
|
|
|
1,250
|
|
|
1,322
|
|
|
3.07
|
%
|
|
Personal loans
|
|
2 years
|
||||
OMFIT 2015-3
|
|
293
|
|
|
330
|
|
|
293
|
|
|
327
|
|
|
4.21
|
%
|
|
Personal loans
|
|
5 years
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total consumer securitizations
|
|
7,123
|
|
|
8,073
|
|
|
7,123
|
|
|
7,964
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
SpringCastle Securitization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
SCFT 2014-A
|
|
2,559
|
|
|
2,737
|
|
|
1,917
|
|
|
2,095
|
|
|
4.08
|
%
|
|
Personal and junior mortgage loans
|
|
N/A (c)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total secured structured financings
|
|
$
|
9,682
|
|
|
$
|
10,810
|
|
|
$
|
9,040
|
|
|
$
|
10,059
|
|
|
|
|
|
|
|
(a)
|
Represents securities sold at time of issuance or at a later date and does not include retained notes.
|
(b)
|
Represents UPB of the collateral supporting the issued and retained notes.
|
(c)
|
Not applicable.
|
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
|||
|
|
|
|
|
|
|
|||
Weighted average interest rate
|
|
5.27
|
%
|
|
5.35
|
%
|
|
5.48
|
%
|
(dollars in millions)
|
|
2016
|
|
2017-2018
|
|
2019-2020
|
|
2021+
|
|
Securitizations
|
|
Revolving
Conduit Facilities |
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Principal maturities on long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Securitization debt (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consumer
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,123
|
|
|
$
|
—
|
|
|
$
|
7,123
|
|
SpringCastle Portfolio
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,917
|
|
|
—
|
|
|
1,917
|
|
|||||||
Revolving conduit facilities (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,620
|
|
|
2,620
|
|
|||||||
Medium-term notes
|
|
375
|
|
|
1,903
|
|
|
1,700
|
|
|
1,750
|
|
|
—
|
|
|
—
|
|
|
5,728
|
|
|||||||
Junior subordinated debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|||||||
Total principal maturities
|
|
375
|
|
|
1,903
|
|
|
1,700
|
|
|
2,100
|
|
|
9,040
|
|
|
2,620
|
|
|
17,738
|
|
|||||||
Interest payments on debt (b)
|
|
408
|
|
|
625
|
|
|
394
|
|
|
563
|
|
|
908
|
|
|
118
|
|
|
3,016
|
|
|||||||
Operating leases (c)
|
|
65
|
|
|
80
|
|
|
32
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
198
|
|
|||||||
Total
|
|
$
|
848
|
|
|
$
|
2,608
|
|
|
$
|
2,126
|
|
|
$
|
2,684
|
|
|
$
|
9,948
|
|
|
$
|
2,738
|
|
|
$
|
20,952
|
|
(a)
|
On-balance sheet securitizations and borrowing under revolving conduit facilities are not included in maturities by period due to their variable monthly payments.
|
(b)
|
Future interest payments on floating-rate debt and revolving conduit facilities are estimated based upon floating rates in effect and revolving balances at
December 31, 2015
.
|
(c)
|
Operating leases include annual rental commitments for leased office space, automobiles, and information technology and related equipment.
|
Average debt
|
average of debt for each day in the period
|
Average net receivables
|
average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by 2) in the period
|
Charge-off ratio
|
annualized net charge-offs as a percentage of the average of net finance receivables at the beginning of each month in the period
|
Delinquency ratio
|
UPB 60 days or more past due (greater than three payments unpaid) as a percentage of UPB
|
Gross charge-off ratio
|
annualized gross charge-offs as a percentage of the average of net finance receivables at the beginning of each month in the period
|
Trust Preferred Securities
|
capital securities classified as debt for accounting purposes but due to their terms are afforded, at least in part, equity capital treatment in the calculation of effective leverage by rating agencies
|
Loss ratio
|
annualized net charge-offs, net writedowns on real estate owned, net gain (loss) on sales of real estate owned, and operating expenses related to real estate owned as a percentage of the average of real estate loans at the beginning of each month in the period
|
Net interest income
|
interest income less interest expense
|
Recovery ratio
|
annualized recoveries on net charge-offs as a percentage of the average of net finance receivables at the beginning of each month in the period
|
Tangible equity
|
total equity less accumulated other comprehensive income or loss
|
Weighted average interest rate
|
annualized interest expense as a percentage of average debt
|
Yield
|
annualized finance charges as a percentage of average net receivables
|
December 31,
|
|
2015
|
|
2014
|
||||||||||||
(dollars in millions)
|
|
+100 bp
|
|
-100 bp
|
|
+100 bp
|
|
-100 bp
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Net finance receivables, less allowance for finance receivable losses
|
|
$
|
(249
|
)
|
|
$
|
267
|
|
|
$
|
(146
|
)
|
|
$
|
153
|
|
Finance receivables held for sale
|
|
(19
|
)
|
|
20
|
|
|
(12
|
)
|
|
14
|
|
||||
Fixed-maturity investment securities
|
|
(75
|
)
|
|
76
|
|
|
(41
|
)
|
|
40
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
|
$
|
(385
|
)
|
|
$
|
383
|
|
|
$
|
(253
|
)
|
|
$
|
266
|
|
Topic
|
|
Page
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
||
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
(dollars in millions except par value amount)
|
|
|
|
|
||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
939
|
|
|
$
|
879
|
|
Investment securities
|
|
1,867
|
|
|
2,935
|
|
||
Net finance receivables:
|
|
|
|
|
||||
Personal loans (includes loans of consolidated VIEs of $11.4 billion in 2015 and $1.9 billion in 2014)
|
|
13,267
|
|
|
3,831
|
|
||
SpringCastle Portfolio (includes loans of consolidated VIEs of $1.6 billion in 2015 and $2.0 billion in 2014)
|
|
1,576
|
|
|
1,979
|
|
||
Real estate loans
|
|
524
|
|
|
625
|
|
||
Retail sales finance
|
|
23
|
|
|
48
|
|
||
Net finance receivables
|
|
15,390
|
|
|
6,483
|
|
||
Unearned insurance premium and claim reserves
|
|
(662
|
)
|
|
(217
|
)
|
||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $431 million in 2015 and $72 million in 2014)
|
|
(587
|
)
|
|
(176
|
)
|
||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses
|
|
14,141
|
|
|
6,090
|
|
||
Finance receivables held for sale (includes finance receivables held for sale of consolidated VIEs of $435 million in 2015)
|
|
796
|
|
|
205
|
|
||
Restricted cash and cash equivalents (includes restricted cash and cash equivalents of consolidated VIEs of $663 million in 2015 and $210 million in 2014)
|
|
676
|
|
|
218
|
|
||
Goodwill
|
|
1,440
|
|
|
—
|
|
||
Other intangible assets
|
|
559
|
|
|
21
|
|
||
Other assets
|
|
638
|
|
|
464
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
21,056
|
|
|
$
|
10,812
|
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Long-term debt (includes debt of consolidated VIEs of $11.7 billion in 2015 and $3.6 billion in 2014)
|
|
$
|
17,300
|
|
|
$
|
8,356
|
|
Insurance claims and policyholder liabilities
|
|
747
|
|
|
229
|
|
||
Deferred and accrued taxes
|
|
20
|
|
|
152
|
|
||
Other liabilities
|
|
384
|
|
|
238
|
|
||
Total liabilities
|
|
18,451
|
|
|
8,975
|
|
||
Commitments and contingent liabilities (Note 20)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
||||
Common stock, par value $.01 per share; 2,000,000,000 shares authorized, 134,494,172 and 114,832,895 shares issued and outstanding at December 31, 2015 and 2014, respectively
|
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
|
1,533
|
|
|
529
|
|
||
Accumulated other comprehensive income (loss)
|
|
(33
|
)
|
|
3
|
|
||
Retained earnings
|
|
1,250
|
|
|
1,492
|
|
||
OneMain Holdings, Inc. shareholders’ equity
|
|
2,751
|
|
|
2,025
|
|
||
Non-controlling interests
|
|
(146
|
)
|
|
(188
|
)
|
||
Total shareholders’ equity
|
|
2,605
|
|
|
1,837
|
|
||
|
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
|
$
|
21,056
|
|
|
$
|
10,812
|
|
(dollars in millions except earnings (loss) per share)
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Interest income:
|
|
|
|
|
|
|
||||||
Finance charges
|
|
$
|
1,870
|
|
|
$
|
1,921
|
|
|
$
|
2,154
|
|
Finance receivables held for sale originated as held for investment
|
|
61
|
|
|
61
|
|
|
—
|
|
|||
Total interest income
|
|
1,931
|
|
|
1,982
|
|
|
2,154
|
|
|||
|
|
|
|
|
|
|
||||||
Interest expense
|
|
715
|
|
|
734
|
|
|
920
|
|
|||
|
|
|
|
|
|
|
||||||
Net interest income
|
|
1,216
|
|
|
1,248
|
|
|
1,234
|
|
|||
|
|
|
|
|
|
|
||||||
Provision for finance receivable losses
|
|
759
|
|
|
474
|
|
|
527
|
|
|||
|
|
|
|
|
|
|
||||||
Net interest income after provision for finance receivable losses
|
|
457
|
|
|
774
|
|
|
707
|
|
|||
|
|
|
|
|
|
|
||||||
Other revenues:
|
|
|
|
|
|
|
||||||
Insurance
|
|
211
|
|
|
166
|
|
|
148
|
|
|||
Investment
|
|
52
|
|
|
39
|
|
|
35
|
|
|||
Net loss on repurchases and repayments of debt
|
|
—
|
|
|
(66
|
)
|
|
(42
|
)
|
|||
Net gain (loss) on fair value adjustments on debt
|
|
—
|
|
|
(15
|
)
|
|
6
|
|
|||
Net gain on sales of real estate loans and related trust assets
|
|
—
|
|
|
726
|
|
|
—
|
|
|||
Other
|
|
(2
|
)
|
|
(18
|
)
|
|
6
|
|
|||
Total other revenues
|
|
261
|
|
|
832
|
|
|
153
|
|
|||
|
|
|
|
|
|
|
||||||
Other expenses:
|
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
||||||
Salaries and benefits
|
|
485
|
|
|
360
|
|
|
464
|
|
|||
Acquisition-related transaction and integration expenses
|
|
62
|
|
|
—
|
|
|
—
|
|
|||
Other operating expenses
|
|
344
|
|
|
266
|
|
|
253
|
|
|||
Insurance policy benefits and claims
|
|
96
|
|
|
75
|
|
|
65
|
|
|||
Total other expenses
|
|
987
|
|
|
701
|
|
|
782
|
|
|||
|
|
|
|
|
|
|
||||||
Income (loss) before provision for (benefit from) income taxes
|
|
(269
|
)
|
|
905
|
|
|
78
|
|
|||
|
|
|
|
|
|
|
||||||
Provision for (benefit from) income taxes
|
|
(147
|
)
|
|
297
|
|
|
(16
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
(122
|
)
|
|
608
|
|
|
94
|
|
|||
|
|
|
|
|
|
|
||||||
Net income attributable to non-controlling interests
|
|
120
|
|
|
103
|
|
|
113
|
|
|||
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to OneMain Holdings, Inc.
|
|
$
|
(242
|
)
|
|
$
|
505
|
|
|
$
|
(19
|
)
|
|
|
|
|
|
|
|
||||||
Share Data:
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
127,910,680
|
|
|
114,791,225
|
|
|
102,917,172
|
|
|||
Diluted
|
|
127,910,680
|
|
|
115,265,123
|
|
|
102,917,172
|
|
|||
Earnings (loss) per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(1.89
|
)
|
|
$
|
4.40
|
|
|
$
|
(0.19
|
)
|
Diluted
|
|
$
|
(1.89
|
)
|
|
$
|
4.38
|
|
|
$
|
(0.19
|
)
|
(dollars in millions)
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(122
|
)
|
|
$
|
608
|
|
|
$
|
94
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on non-credit impaired available-for-sale
securities
|
|
(28
|
)
|
|
20
|
|
|
(12
|
)
|
|||
Retirement plan liabilities adjustments
|
|
(9
|
)
|
|
(50
|
)
|
|
18
|
|
|||
Foreign currency translation adjustments
|
|
(6
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Income tax effect:
|
|
|
|
|
|
|
||||||
Net unrealized (gains) losses on non-credit impaired available-for-sale securities
|
|
10
|
|
|
(7
|
)
|
|
4
|
|
|||
Retirement plan liabilities adjustments
|
|
3
|
|
|
17
|
|
|
(6
|
)
|
|||
Foreign currency translation adjustments
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income (loss), net of tax, before reclassification adjustments
|
|
(28
|
)
|
|
(20
|
)
|
|
3
|
|
|||
Reclassification adjustments included in net income (loss):
|
|
|
|
|
|
|
||||||
Net realized gains on available-for-sale securities
|
|
(12
|
)
|
|
(8
|
)
|
|
(3
|
)
|
|||
Income tax effect:
|
|
|
|
|
|
|
||||||
Net realized gains on available-for-sale securities
|
|
4
|
|
|
3
|
|
|
1
|
|
|||
Reclassification adjustments included in net income (loss), net of tax
|
|
(8
|
)
|
|
(5
|
)
|
|
(2
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
(36
|
)
|
|
(25
|
)
|
|
1
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income (loss)
|
|
(158
|
)
|
|
583
|
|
|
95
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income attributable to non-controlling interests
|
|
120
|
|
|
103
|
|
|
113
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income (loss) attributable to OneMain Holdings, Inc.
|
|
$
|
(278
|
)
|
|
$
|
480
|
|
|
$
|
(18
|
)
|
|
|
OneMain Holdings, Inc. Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||||||
(dollars in millions)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
OneMain Holdings, Inc. Shareholders’ Equity
|
|
Non-controlling Interests
|
|
Total Shareholders’ Equity
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2015
|
|
$
|
1
|
|
|
$
|
529
|
|
|
$
|
3
|
|
|
$
|
1,492
|
|
|
$
|
2,025
|
|
|
$
|
(188
|
)
|
|
$
|
1,837
|
|
Sale of common stock, net of offering costs
|
|
—
|
|
|
976
|
|
|
—
|
|
|
—
|
|
|
976
|
|
|
—
|
|
|
976
|
|
|||||||
Non-cash incentive compensation from Initial Stockholder
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||||
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||||
Excess tax benefit from share-based compensation
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||||
Withholding tax on vested RSUs
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||
Change in non-controlling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distributions declared to joint venture partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
(78
|
)
|
|||||||
Accumulated other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(242
|
)
|
|
(242
|
)
|
|
120
|
|
|
(122
|
)
|
|||||||
Balance, December 31, 2015
|
|
$
|
1
|
|
|
$
|
1,533
|
|
|
$
|
(33
|
)
|
|
$
|
1,250
|
|
|
$
|
2,751
|
|
|
$
|
(146
|
)
|
|
$
|
2,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2014
|
|
$
|
1
|
|
|
$
|
524
|
|
|
$
|
28
|
|
|
$
|
987
|
|
|
$
|
1,540
|
|
|
$
|
347
|
|
|
$
|
1,887
|
|
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||||
Withholding tax on vested RSUs
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||
Change in non-controlling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distributions declared to joint venture partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(638
|
)
|
|
(638
|
)
|
|||||||
Accumulated other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
505
|
|
|
505
|
|
|
103
|
|
|
608
|
|
|||||||
Balance, December 31, 2014
|
|
$
|
1
|
|
|
$
|
529
|
|
|
$
|
3
|
|
|
$
|
1,492
|
|
|
$
|
2,025
|
|
|
$
|
(188
|
)
|
|
$
|
1,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2013
|
|
$
|
1
|
|
|
$
|
147
|
|
|
$
|
27
|
|
|
$
|
1,006
|
|
|
$
|
1,181
|
|
|
$
|
—
|
|
|
$
|
1,181
|
|
Sale of common stock, net of offering costs
|
|
—
|
|
|
231
|
|
|
—
|
|
|
—
|
|
|
231
|
|
|
—
|
|
|
231
|
|
|||||||
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
146
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
—
|
|
|
146
|
|
|||||||
Change in non-controlling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Contributions from joint venture partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
438
|
|
|
438
|
|
|||||||
Distributions declared to joint venture partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(204
|
)
|
|
(204
|
)
|
|||||||
Accumulated other comprehensive income
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|
113
|
|
|
94
|
|
|||||||
Balance, December 31, 2013
|
|
$
|
1
|
|
|
$
|
524
|
|
|
$
|
28
|
|
|
$
|
987
|
|
|
$
|
1,540
|
|
|
$
|
347
|
|
|
$
|
1,887
|
|
(dollars in millions)
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(122
|
)
|
|
$
|
608
|
|
|
$
|
94
|
|
Reconciling adjustments:
|
|
|
|
|
|
|
||||||
Provision for finance receivable losses
|
|
759
|
|
|
474
|
|
|
527
|
|
|||
Depreciation and amortization
|
|
191
|
|
|
35
|
|
|
(55
|
)
|
|||
Deferred income tax charge (benefit)
|
|
(212
|
)
|
|
20
|
|
|
(119
|
)
|
|||
Non-cash incentive compensation from Initial Stockholder
|
|
15
|
|
|
—
|
|
|
—
|
|
|||
Net loss (gain) on fair value adjustments on debt
|
|
—
|
|
|
15
|
|
|
(6
|
)
|
|||
Net gain on sales of real estate loans and related trust assets
|
|
—
|
|
|
(726
|
)
|
|
—
|
|
|||
Net loss on repurchases and repayments of debt
|
|
—
|
|
|
66
|
|
|
42
|
|
|||
Share-based compensation expense, net of forfeitures
|
|
15
|
|
|
6
|
|
|
146
|
|
|||
Other
|
|
4
|
|
|
10
|
|
|
19
|
|
|||
Cash flows due to changes in:
|
|
|
|
|
|
|
||||||
Other assets and other liabilities
|
|
(35
|
)
|
|
(31
|
)
|
|
16
|
|
|||
Insurance claims and policyholder liabilities
|
|
27
|
|
|
51
|
|
|
29
|
|
|||
Taxes receivable and payable
|
|
102
|
|
|
(98
|
)
|
|
(10
|
)
|
|||
Accrued interest and finance charges
|
|
(14
|
)
|
|
(36
|
)
|
|
(42
|
)
|
|||
Restricted cash and cash equivalents not reinvested
|
|
—
|
|
|
5
|
|
|
36
|
|
|||
Other, net
|
|
1
|
|
|
1
|
|
|
(2
|
)
|
|||
Net cash provided by operating activities
|
|
731
|
|
|
400
|
|
|
675
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
||||||
Net principal collections (originations) of finance receivables held for investment and
held for sale |
|
(1,037
|
)
|
|
215
|
|
|
851
|
|
|||
Proceeds on sales of finance receivables held for sale originated as held for investment
|
|
78
|
|
|
3,799
|
|
|
15
|
|
|||
Purchase of OneMain Financial Holdings, LLC, net of cash acquired
|
|
(3,902
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of SpringCastle Portfolio
|
|
—
|
|
|
—
|
|
|
(2,964
|
)
|
|||
Available-for-sale securities purchased
|
|
(525
|
)
|
|
(351
|
)
|
|
(555
|
)
|
|||
Trading and other securities purchased
|
|
(1,482
|
)
|
|
(2,978
|
)
|
|
(10
|
)
|
|||
Available-for-sale securities called, sold, and matured
|
|
525
|
|
|
291
|
|
|
847
|
|
|||
Trading and other securities called, sold, and matured
|
|
3,797
|
|
|
687
|
|
|
8
|
|
|||
Change in restricted cash and cash equivalents
|
|
(70
|
)
|
|
112
|
|
|
(414
|
)
|
|||
Proceeds from sale of real estate owned
|
|
14
|
|
|
59
|
|
|
109
|
|
|||
Other, net
|
|
(36
|
)
|
|
(13
|
)
|
|
(10
|
)
|
|||
Net cash provided by (used for) investing activities
|
|
(2,638
|
)
|
|
1,821
|
|
|
(2,123
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt, net of commissions
|
|
3,027
|
|
|
3,557
|
|
|
6,296
|
|
|||
Proceeds from issuance of common stock, net of offering costs
|
|
976
|
|
|
—
|
|
|
231
|
|
|||
Repayments of long-term debt
|
|
(1,960
|
)
|
|
(4,691
|
)
|
|
(6,435
|
)
|
|||
Contributions from joint venture partners
|
|
—
|
|
|
—
|
|
|
438
|
|
|||
Distributions to joint venture partners
|
|
(78
|
)
|
|
(638
|
)
|
|
(204
|
)
|
|||
Excess tax benefit from share-based compensation
|
|
3
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used for) financing activities
|
|
1,968
|
|
|
(1,772
|
)
|
|
326
|
|
(dollars in millions)
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
|
60
|
|
|
448
|
|
|
(1,123
|
)
|
|||
Cash and cash equivalents at beginning of period
|
|
879
|
|
|
431
|
|
|
1,554
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
939
|
|
|
$
|
879
|
|
|
$
|
431
|
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
(594
|
)
|
|
$
|
(541
|
)
|
|
$
|
(724
|
)
|
Income taxes received (paid)
|
|
38
|
|
|
(375
|
)
|
|
(113
|
)
|
|||
|
|
|
|
|
|
|
||||||
Supplemental non-cash activities
|
|
|
|
|
|
|
||||||
Transfer of finance receivables to real estate owned
|
|
$
|
11
|
|
|
$
|
49
|
|
|
$
|
93
|
|
Transfer of finance receivables held for investment to finance receivables held for sale (prior to deducting allowance for finance receivable losses)
|
|
617
|
|
|
6,902
|
|
|
18
|
|
|||
Net unsettled investment security purchases
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
(dollars in millions)
|
|
Amounts
|
||
|
|
|
||
Cash consideration
|
|
$
|
4,478
|
|
Fair value of assets acquired:
|
|
|
||
Cash and cash equivalents (a)
|
|
958
|
|
|
Investment securities
|
|
1,294
|
|
|
Personal loans
|
|
8,801
|
|
|
Intangibles (b)
|
|
555
|
|
|
Other assets (c)
|
|
247
|
|
|
Fair value of liabilities assumed:
|
|
|
||
Long-term debt
|
|
(7,725
|
)
|
|
Unearned premium, insurance policy and claims reserves (d)
|
|
(936
|
)
|
|
Other liabilities (e)
|
|
(156
|
)
|
|
Goodwill (f)
|
|
$
|
1,440
|
|
(a)
|
Cash and cash equivalents includes restricted cash and cash equivalents.
|
(b)
|
Goodwill and intangibles were recorded at OMFH subsidiary level.
|
(c)
|
Other assets consist of deferred tax assets, premises and equipment, and other acquired assets.
|
(d)
|
Unearned premium, insurance policy and claims reserves includes
$409 million
related to unearned premium and claims reserves, which is presented as a contra-asset on the balance sheet.
|
(e)
|
Other liabilities consist of accounts payable, accrued expenses, and other assumed liabilities.
|
(dollars in millions)
|
|
Amount
|
|
Estimated
Useful
Life
|
||
|
|
|
|
|
||
Trade names
|
|
$
|
220
|
|
|
Indefinite
|
Customer relationships
|
|
205
|
|
|
6 years
|
|
Value of business acquired (“VOBA”)
|
|
105
|
|
|
5-30 years
|
|
Licenses
|
|
25
|
|
|
Indefinite
|
|
Total
|
|
$
|
555
|
|
|
|
(dollars in millions)
|
|
|
||
Two Months Ended December 31,
|
|
2015
|
||
|
|
|
||
Interest income
|
|
$
|
246
|
|
Net loss
|
|
(187
|
)
|
•
|
Consumer and Insurance;
|
•
|
Acquisitions and Servicing; and
|
•
|
Real Estate.
|
•
|
prior finance receivable loss and delinquency experience;
|
•
|
the composition of our finance receivable portfolio; and
|
•
|
current economic conditions, including the levels of unemployment and personal bankruptcies.
|
•
|
we intend to sell the security;
|
•
|
it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or
|
•
|
we do not expect to recover the security’s entire amortized cost basis (even if we do not intend to sell the security).
|
•
|
the nature, frequency, and severity of current and cumulative financial reporting losses;
|
•
|
the timing of the reversal of our gross taxable temporary differences in an amount sufficient to provide benefit for our gross deductible temporary differences;
|
•
|
the carryforward periods for the net operating and capital loss carryforwards;
|
•
|
the sources and timing of future taxable income; and
|
•
|
tax planning strategies that would be implemented, if necessary, to accelerate taxable amounts.
|
(dollars in millions)
|
|
Consumer
and Insurance |
|
Real
Estate |
|
Other
|
||||||
Assets *
|
|
|
|
|
|
|
||||||
March 31, 2015
|
|
$
|
5,117
|
|
|
$
|
3,613
|
|
|
$
|
1,690
|
|
December 31, 2014
|
|
4,411
|
|
|
4,116
|
|
|
441
|
|
|||
September 30, 2014
|
|
4,633
|
|
|
3,745
|
|
|
615
|
|
|||
June 30, 2014
|
|
4,397
|
|
|
6,688
|
|
|
963
|
|
|||
December 31, 2013
|
|
4,139
|
|
|
8,650
|
|
|
520
|
|
*
|
The revised amounts do not reflect the retrospective reclassifications of our debt issuance costs previously recorded in other assets to long-term debt, as a result of our early adoption of ASU 2015-03.
|
•
|
Personal loans —
are secured by consumer goods, automobiles, or other personal property or are unsecured, typically non-revolving with a fixed-rate and a fixed, original term of
three
to
six years
. At
December 31, 2015
,
$2.8 billion
of personal loans, or
21%
, were secured by collateral consisting of titled personal property (such as automobiles) and
$10.5 billion
, or
79%
, were secured by consumer household goods or other items of personal property or were unsecured, compared to
$1.9 billion
of personal loans, or
49%
, secured by collateral consisting of titled personal property and
$1.9 billion
, or
51%
, secured by consumer household goods or other items of personal property or unsecured at December 31, 2014.
|
•
|
SpringCastle Portfolio —
includes unsecured loans and loans secured by subordinate residential real estate mortgages (which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking
|
•
|
Real estate loans —
are secured by first or second mortgages on residential real estate, generally have maximum original terms of
360 months
, and are considered non-conforming. At
December 31, 2015
,
$202 million
of real estate loans, or
39%
, were secured by first mortgages and
$322 million
, or
61%
, were secured by second mortgages, compared to
$227 million
of real estate loans, or
36%
, secured by first mortgages and
$398 million
, or
64%
, secured by second mortgages at December 31, 2014. Real estate loans may be closed-end accounts or open-end home equity lines of credit and are primarily fixed-rate products. Since we ceased real estate lending in January of 2012, our real estate loans are in a liquidating status.
|
•
|
Retail sales finance —
include retail sales contracts and revolving retail accounts. Retail sales contracts are closed-end accounts that represent a single purchase transaction. Revolving retail accounts are open-end accounts that can be used for financing repeated purchases from the same merchant. Retail sales contracts are secured by the personal property designated in the contract and generally have maximum original terms of
60 months
. Revolving retail accounts are secured by the goods purchased and generally require minimum monthly payments based on the amount financed calculated after the most recent purchase or outstanding balances. Our retail sales finance portfolio is also in a liquidating status.
|
(dollars in millions)
|
|
Personal Loans
|
|
SpringCastle Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross receivables *
|
|
$
|
15,325
|
|
|
$
|
1,545
|
|
|
$
|
520
|
|
|
$
|
25
|
|
|
$
|
17,415
|
|
Unearned finance charges and points and fees
|
|
(2,261
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2,263
|
)
|
|||||
Accrued finance charges
|
|
147
|
|
|
31
|
|
|
4
|
|
|
—
|
|
|
182
|
|
|||||
Deferred origination costs
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross receivables *
|
|
$
|
4,493
|
|
|
$
|
1,941
|
|
|
$
|
621
|
|
|
$
|
52
|
|
|
$
|
7,107
|
|
Unearned finance charges and points and fees
|
|
(765
|
)
|
|
—
|
|
|
(1
|
)
|
|
(5
|
)
|
|
(771
|
)
|
|||||
Accrued finance charges
|
|
58
|
|
|
38
|
|
|
5
|
|
|
1
|
|
|
102
|
|
|||||
Deferred origination costs
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
Total
|
|
$
|
3,831
|
|
|
$
|
1,979
|
|
|
$
|
625
|
|
|
$
|
48
|
|
|
$
|
6,483
|
|
*
|
Gross receivables are defined as follows:
|
•
|
Finance receivables purchased as a performing receivable
— gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; additionally, the remaining unearned discount, net of premium established at the time of purchase, is included in both interest bearing and precompute accounts to reflect the finance receivable balance at its fair value;
|
•
|
Finance receivables originated subsequent to the OneMain Acquisition and the Fortress Acquisition
— gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; and
|
•
|
Purchased credit impaired finance receivables
— gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts.
|
(dollars in millions)
|
|
|
|
|
||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Personal loans
|
|
$
|
2
|
|
|
$
|
1
|
|
SpringCastle Portfolio
|
|
365
|
|
|
354
|
|
||
Real estate loans
|
|
30
|
|
|
31
|
|
||
Total
|
|
$
|
397
|
|
|
$
|
386
|
|
December 31,
|
|
2015
|
|
2014 *
|
||||||||||
(dollars in millions)
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
|
|
|
|
|
|
|
|
|
||||||
North Carolina
|
|
$
|
1,356
|
|
|
9
|
%
|
|
$
|
634
|
|
|
10
|
%
|
Texas
|
|
1,198
|
|
|
8
|
|
|
237
|
|
|
4
|
|
||
Pennsylvania
|
|
950
|
|
|
6
|
|
|
388
|
|
|
6
|
|
||
California
|
|
928
|
|
|
6
|
|
|
533
|
|
|
8
|
|
||
Ohio
|
|
769
|
|
|
5
|
|
|
388
|
|
|
6
|
|
||
Virginia
|
|
707
|
|
|
5
|
|
|
349
|
|
|
5
|
|
||
Illinois
|
|
663
|
|
|
4
|
|
|
412
|
|
|
6
|
|
||
Georgia
|
|
654
|
|
|
4
|
|
|
283
|
|
|
4
|
|
||
Other
|
|
8,165
|
|
|
53
|
|
|
3,259
|
|
|
51
|
|
||
Total
|
|
$
|
15,390
|
|
|
100
|
%
|
|
$
|
6,483
|
|
|
100
|
%
|
*
|
December 31, 2014
concentrations of net finance receivables are presented in the order of
December 31, 2015
state concentrations.
|
(dollars in millions)
|
|
Personal Loans
|
|
SpringCastle Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
60-89 days past due
|
|
$
|
124
|
|
|
$
|
22
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
164
|
|
90-119 days past due
|
|
93
|
|
|
14
|
|
|
3
|
|
|
—
|
|
|
110
|
|
|||||
120-149 days past due
|
|
54
|
|
|
11
|
|
|
2
|
|
|
1
|
|
|
68
|
|
|||||
150-179 days past due
|
|
50
|
|
|
10
|
|
|
2
|
|
|
—
|
|
|
62
|
|
|||||
180 days or more past due
|
|
4
|
|
|
1
|
|
|
12
|
|
|
—
|
|
|
17
|
|
|||||
Total delinquent finance receivables
|
|
325
|
|
|
58
|
|
|
37
|
|
|
1
|
|
|
421
|
|
|||||
Current
|
|
12,776
|
|
|
1,475
|
|
|
474
|
|
|
22
|
|
|
14,747
|
|
|||||
30-59 days past due
|
|
166
|
|
|
43
|
|
|
13
|
|
|
—
|
|
|
222
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
60-89 days past due
|
|
$
|
37
|
|
|
$
|
31
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
81
|
|
90-119 days past due
|
|
30
|
|
|
19
|
|
|
9
|
|
|
—
|
|
|
58
|
|
|||||
120-149 days past due
|
|
24
|
|
|
16
|
|
|
5
|
|
|
1
|
|
|
46
|
|
|||||
150-179 days past due
|
|
21
|
|
|
14
|
|
|
4
|
|
|
—
|
|
|
39
|
|
|||||
180 days or more past due
|
|
2
|
|
|
2
|
|
|
12
|
|
|
—
|
|
|
16
|
|
|||||
Total delinquent finance receivables
|
|
114
|
|
|
82
|
|
|
42
|
|
|
2
|
|
|
240
|
|
|||||
Current
|
|
3,661
|
|
|
1,839
|
|
|
565
|
|
|
45
|
|
|
6,110
|
|
|||||
30-59 days past due
|
|
56
|
|
|
58
|
|
|
18
|
|
|
1
|
|
|
133
|
|
|||||
Total
|
|
$
|
3,831
|
|
|
$
|
1,979
|
|
|
$
|
625
|
|
|
$
|
48
|
|
|
$
|
6,483
|
|
(dollars in millions)
|
|
Personal Loans
|
|
SpringCastle Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Performing
|
|
$
|
13,066
|
|
|
$
|
1,540
|
|
|
$
|
505
|
|
|
$
|
22
|
|
|
$
|
15,133
|
|
Nonperforming
|
|
201
|
|
|
36
|
|
|
19
|
|
|
1
|
|
|
257
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Performing
|
|
$
|
3,754
|
|
|
$
|
1,928
|
|
|
$
|
595
|
|
|
$
|
47
|
|
|
$
|
6,324
|
|
Nonperforming
|
|
77
|
|
|
51
|
|
|
30
|
|
|
1
|
|
|
159
|
|
|||||
Total
|
|
$
|
3,831
|
|
|
$
|
1,979
|
|
|
$
|
625
|
|
|
$
|
48
|
|
|
$
|
6,483
|
|
•
|
OneMain Acquisition
— effective November 1, 2015, we acquired personal loans (the “OM Loans”), some of which were determined to be credit impaired. We recorded the acquired loans at their fair value of $
734 million
on November 1, 2015, and determined at this date that these loans with contractually required principal and interest of
$1.8 billion
and expected undiscounted cash flows of
$899 million
were credit impaired.
|
•
|
Joint venture acquisition of the SpringCastle Portfolio (the “SCP Loans”)
— on April 1, 2013, we acquired a
47%
equity interest in the SCP Loans, certain of which were determined to be credit impaired on the date of purchase.
|
•
|
Fortress Acquisition
— we revalued our assets and liabilities based on their fair value at the date of the Fortress Acquisition, November 30, 2010, in accordance with purchase accounting and adjusted the carrying value of our finance receivables (the “FA Loans”) to their fair value.
|
(dollars in millions)
|
|
OM Loans
|
|
SCP Loans
|
|
FA Loans *
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Carrying amount, net of allowance
|
|
$
|
624
|
|
|
$
|
223
|
|
|
$
|
76
|
|
|
$
|
923
|
|
Outstanding balance
|
|
911
|
|
|
482
|
|
|
136
|
|
|
1,529
|
|
||||
Allowance for purchased credit impaired finance receivable losses
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Carrying amount, net of allowance
|
|
$
|
—
|
|
|
$
|
340
|
|
|
$
|
93
|
|
|
$
|
433
|
|
Outstanding balance
|
|
—
|
|
|
628
|
|
|
151
|
|
|
779
|
|
||||
Allowance for purchased credit impaired finance receivable losses
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
*
|
Purchased credit impaired FA Loans held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
|
|
|
||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Carrying amount
|
|
$
|
55
|
|
|
$
|
68
|
|
Outstanding balance
|
|
89
|
|
|
99
|
|
(dollars in millions)
|
|
OM Loans
|
|
SCP Loans
|
|
FA Loans
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
—
|
|
|
$
|
541
|
|
|
$
|
19
|
|
|
$
|
560
|
|
Additions from OneMain Acquisition
|
|
166
|
|
|
—
|
|
|
—
|
|
|
166
|
|
||||
Accretion (a)
|
|
(14
|
)
|
|
(83
|
)
|
|
(10
|
)
|
|
(107
|
)
|
||||
Reclassifications from nonaccretable difference (b)
|
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
||||
Disposals of finance receivables (c)
|
|
(9
|
)
|
|
(36
|
)
|
|
(1
|
)
|
|
(46
|
)
|
||||
Balance at end of period
|
|
$
|
143
|
|
|
$
|
422
|
|
|
$
|
39
|
|
|
$
|
604
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
—
|
|
|
$
|
325
|
|
|
$
|
772
|
|
|
$
|
1,097
|
|
Accretion (a)
|
|
—
|
|
|
(80
|
)
|
|
(81
|
)
|
|
(161
|
)
|
||||
Reclassifications from nonaccretable difference (b)
|
|
—
|
|
|
331
|
|
|
—
|
|
|
331
|
|
||||
Transfers due to finance receivables sold
|
|
—
|
|
|
—
|
|
|
(656
|
)
|
|
(656
|
)
|
||||
Disposals of finance receivables (c)
|
|
—
|
|
|
(35
|
)
|
|
(16
|
)
|
|
(51
|
)
|
||||
Balance at end of period
|
|
$
|
—
|
|
|
$
|
541
|
|
|
$
|
19
|
|
|
$
|
560
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
629
|
|
|
$
|
629
|
|
Additions
|
|
—
|
|
|
438
|
|
|
—
|
|
|
438
|
|
||||
Accretion
|
|
—
|
|
|
(77
|
)
|
|
(129
|
)
|
|
(206
|
)
|
||||
Reclassifications from nonaccretable difference (b)
|
|
—
|
|
|
—
|
|
|
305
|
|
|
305
|
|
||||
Disposals of finance receivables (c)
|
|
—
|
|
|
(36
|
)
|
|
(33
|
)
|
|
(69
|
)
|
||||
Balance at end of period
|
|
$
|
—
|
|
|
$
|
325
|
|
|
$
|
772
|
|
|
$
|
1,097
|
|
(a)
|
Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
|
||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Accretion
|
|
$
|
6
|
|
|
$
|
14
|
|
(b)
|
Reclassifications from nonaccretable difference represents the increases in accretion resulting from higher estimated undiscounted cash flows.
|
(c)
|
Disposals of finance receivables represent finance charges forfeited due to purchased credit impaired finance receivables charged off during the period.
|
(dollars in millions)
|
|
Personal Loans (a)
|
|
SpringCastle Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
TDR gross finance receivables (b)
|
|
$
|
46
|
|
|
$
|
14
|
|
|
$
|
200
|
|
|
$
|
260
|
|
TDR net finance receivables
|
|
46
|
|
|
13
|
|
|
201
|
|
|
260
|
|
||||
Allowance for TDR finance receivable losses
|
|
17
|
|
|
4
|
|
|
34
|
|
|
55
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
TDR gross finance receivables (b)
|
|
$
|
22
|
|
|
$
|
11
|
|
|
$
|
196
|
|
|
$
|
229
|
|
TDR net finance receivables
|
|
22
|
|
|
10
|
|
|
196
|
|
|
228
|
|
||||
Allowance for TDR finance receivable losses
|
|
1
|
|
|
3
|
|
|
32
|
|
|
36
|
|
(a)
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Personal
Loans
|
|
Real Estate
Loans |
|
Total
|
||||||
|
|
|
|
|
|
|
|
|||||
December 31, 2015
|
|
|
|
|
|
|
|
|||||
TDR gross finance receivables
|
|
$
|
2
|
|
|
$
|
92
|
|
|
$
|
94
|
|
TDR net finance receivables
|
|
2
|
|
|
92
|
|
|
94
|
|
|||
|
|
|
|
|
|
|
|
|||||
December 31, 2014
|
|
|
|
|
|
|
|
|||||
TDR gross finance receivables
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
91
|
|
TDR net finance receivables
|
|
—
|
|
|
91
|
|
|
91
|
|
(b)
|
As defined earlier in this Note.
|
(dollars in millions)
|
|
Personal Loans (a)
|
|
SpringCastle Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
TDR average net receivables (b)
|
|
$
|
35
|
|
|
$
|
12
|
|
|
$
|
198
|
|
|
$
|
245
|
|
TDR finance charges recognized
|
|
3
|
|
|
1
|
|
|
11
|
|
|
15
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
TDR average net receivables
|
|
$
|
17
|
|
|
$
|
5
|
|
|
$
|
957
|
|
|
$
|
979
|
|
TDR finance charges recognized
|
|
2
|
|
|
1
|
|
|
48
|
|
|
51
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
TDR average net receivables
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
1,120
|
|
|
$
|
1,135
|
|
TDR finance charges recognized
|
|
1
|
|
|
—
|
|
|
63
|
|
|
64
|
|
(a)
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Personal
Loans |
|
Real Estate
Loans |
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|||||
TDR average net receivables *
|
|
$
|
2
|
|
|
$
|
91
|
|
|
$
|
93
|
|
TDR finance charges recognized
|
|
—
|
|
|
5
|
|
|
5
|
|
|||
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
||||||
TDR average net receivables **
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
250
|
|
TDR finance charges recognized
|
|
—
|
|
|
5
|
|
|
5
|
|
*
|
TDR personal loan average net receivables held for sale for 2015 reflect a three-month average since the personal loans were transferred to finance receivables held for sale on September 30, 2015.
|
**
|
TDR real estate loan average net receivables held for sale for 2014 reflect a five-month average since the real estate loans were transferred to finance receivables held for sale on August 1, 2014.
|
(b)
|
TDR personal loan average net receivables for 2015 reflect a two-month average for OneMain’s TDR average net receivables.
|
(dollars in millions)
|
|
Personal Loans (a)
|
|
SpringCastle Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
48
|
|
|
$
|
7
|
|
|
$
|
21
|
|
|
$
|
76
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
|
|||||||
Rate reduction
|
|
$
|
31
|
|
|
$
|
6
|
|
|
$
|
17
|
|
|
$
|
54
|
|
Other (b)
|
|
12
|
|
|
—
|
|
|
5
|
|
|
17
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
43
|
|
|
$
|
6
|
|
|
$
|
22
|
|
|
$
|
71
|
|
Number of TDR accounts
|
|
8,425
|
|
|
721
|
|
|
385
|
|
|
9,531
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
18
|
|
|
$
|
10
|
|
|
$
|
215
|
|
|
$
|
243
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
|
|||||||
Rate reduction
|
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
158
|
|
|
$
|
178
|
|
Other (b)
|
|
6
|
|
|
—
|
|
|
46
|
|
|
52
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
16
|
|
|
$
|
10
|
|
|
$
|
204
|
|
|
$
|
230
|
|
Number of TDR accounts
|
|
4,213
|
|
|
1,155
|
|
|
2,385
|
|
|
7,753
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
576
|
|
|
$
|
591
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
|
|||||||
Rate reduction
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
554
|
|
|
$
|
562
|
|
Other (b)
|
|
4
|
|
|
—
|
|
|
51
|
|
|
55
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
605
|
|
|
$
|
617
|
|
Number of TDR accounts
|
|
3,240
|
|
|
—
|
|
|
7,106
|
|
|
10,346
|
|
(a)
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Personal
Loans
|
|
Real Estate
Loans
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|||
Pre-modification TDR net finance receivables
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
7
|
|
Post-modification TDR net finance receivables
|
|
$
|
1
|
|
|
$
|
7
|
|
|
$
|
8
|
|
Number of TDR accounts
|
|
162
|
|
|
113
|
|
|
275
|
|
|||
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
||||||
Pre-modification TDR net finance receivables
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Post-modification TDR net finance receivables
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Number of TDR accounts
|
|
—
|
|
|
94
|
|
|
94
|
|
(b)
|
“Other” modifications include extension of term and forgiveness of principal or interest.
|
(dollars in millions)
|
|
Personal Loans
|
|
SpringCastle Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables (b)
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
13
|
|
Number of TDR accounts
|
|
1,655
|
|
|
147
|
|
|
46
|
|
|
1,848
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables (b)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
33
|
|
|
$
|
35
|
|
Number of TDR accounts
|
|
141
|
|
|
53
|
|
|
524
|
|
|
718
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables (b)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
70
|
|
Number of TDR accounts
|
|
355
|
|
|
—
|
|
|
929
|
|
|
1,284
|
|
(a)
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Real Estate
Loans |
||
|
|
|
||
Year Ended December 31, 2015
|
|
|
||
TDR net finance receivables
|
|
$
|
1
|
|
Number of TDR accounts
|
|
17
|
|
|
|
|
|
||
Year Ended December 31, 2014
|
|
|
||
TDR net finance receivables
|
|
$
|
3
|
|
Number of TDR accounts
|
|
49
|
|
(b)
|
Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.
|
(dollars in millions)
|
|
Personal
Loans
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance
|
|
Consolidated
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
132
|
|
|
$
|
3
|
|
|
$
|
40
|
|
|
$
|
1
|
|
|
$
|
176
|
|
Provision for finance receivable losses
|
|
655
|
|
|
88
|
|
|
14
|
|
|
2
|
|
|
759
|
|
|||||
Charge-offs
|
|
(292
|
)
|
|
(99
|
)
|
|
(19
|
)
|
|
(3
|
)
|
|
(413
|
)
|
|||||
Recoveries
|
|
47
|
|
|
12
|
|
|
6
|
|
|
1
|
|
|
66
|
|
|||||
Reduction in the carrying value of personal loans transferred to finance receivables held for sale (a)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Balance at end of period
|
|
$
|
541
|
|
|
$
|
4
|
|
|
$
|
41
|
|
|
$
|
1
|
|
|
$
|
587
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
95
|
|
|
$
|
1
|
|
|
$
|
235
|
|
|
$
|
2
|
|
|
$
|
333
|
|
Provision for finance receivable losses
|
|
205
|
|
|
152
|
|
|
114
|
|
|
3
|
|
|
474
|
|
|||||
Charge-offs (b)
|
|
(193
|
)
|
|
(164
|
)
|
|
(76
|
)
|
|
(5
|
)
|
|
(438
|
)
|
|||||
Recoveries (c)
|
|
25
|
|
|
14
|
|
|
7
|
|
|
1
|
|
|
47
|
|
|||||
Reduction in the carrying value of real estate loans transferred to finance receivables held for sale (d)
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|
—
|
|
|
(240
|
)
|
|||||
Balance at end of period
|
|
$
|
132
|
|
|
$
|
3
|
|
|
$
|
40
|
|
|
$
|
1
|
|
|
$
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
2
|
|
|
$
|
183
|
|
Provision for finance receivable losses
|
|
130
|
|
|
133
|
|
|
265
|
|
|
(1
|
)
|
|
527
|
|
|||||
Charge-offs (e)
|
|
(149
|
)
|
|
(138
|
)
|
|
(160
|
)
|
|
(9
|
)
|
|
(456
|
)
|
|||||
Recoveries (f)
|
|
48
|
|
|
6
|
|
|
16
|
|
|
10
|
|
|
80
|
|
|||||
Transfers to finance receivables held for sale (g)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Balance at end of period
|
|
$
|
95
|
|
|
$
|
1
|
|
|
$
|
235
|
|
|
$
|
2
|
|
|
$
|
333
|
|
(a)
|
During 2015, we reduced the carrying value of certain personal loans to
$608 million
as a result of the transfer of these finance receivables from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future.
|
(b)
|
Charge-offs during 2014 included a
$4 million
reduction related to a change in recognizing charge-offs of unsecured loans of customers in bankruptcy status effective mid-November 2014.
|
(c)
|
Recoveries during 2014 included
$2 million
of real estate loan recoveries resulting from a sale of previously charged-off real estate loans in March 2014.
|
(d)
|
During 2014, we reduced the carrying value of certain real estate loans to
$6.7 billion
as a result of the transfer of these loans from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future.
|
(e)
|
Effective March 31, 2013, we charge off to the allowance for finance receivable losses personal loans that are
180 days
past due. Previously, we charged-off to the allowance for finance receivable losses personal loans on which payments received in the prior six months totaled less than
5%
of the original loan amount. As a result of this change, we recorded
$13 million
of additional charge-offs in March 2013.
|
(f)
|
Recoveries in 2013 included
$37 million
(
$23 million
of personal loan recoveries,
$9 million
of real estate loan recoveries, and
$5 million
of retail sales finance recoveries) resulting from a sale of previously charged-off finance receivables in June 2013, net of a
$4 million
adjustment for the subsequent buyback of certain finance receivables.
|
(g)
|
During the fourth quarter of 2013, we decreased the allowance for finance receivable losses as a result of the transfer of
$18 million
of personal loans of our lending operations in Puerto Rico from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future.
|
*
|
Represents additional impairment recognized, subsequent to the establishment of the pools of purchased credit impaired loans, related to loans that have been foreclosed and transferred to real estate owned status.
|
(dollars in millions)
|
|
Personal
Loans
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for finance receivable losses for finance receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collectively evaluated for impairment
|
|
$
|
524
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
525
|
|
Acquired with deteriorated credit quality (purchased credit impaired finance receivables)
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Individually evaluated for impairment (TDR finance receivables)
|
|
17
|
|
|
4
|
|
|
34
|
|
|
—
|
|
|
55
|
|
|||||
Total
|
|
$
|
541
|
|
|
$
|
4
|
|
|
$
|
41
|
|
|
$
|
1
|
|
|
$
|
587
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collectively evaluated for impairment
|
|
$
|
12,599
|
|
|
$
|
1,340
|
|
|
$
|
387
|
|
|
$
|
23
|
|
|
$
|
14,349
|
|
Purchased credit impaired finance receivables
|
|
624
|
|
|
223
|
|
|
28
|
|
|
—
|
|
|
875
|
|
|||||
TDR finance receivables
|
|
44
|
|
|
13
|
|
|
109
|
|
|
—
|
|
|
166
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for finance receivable losses as a percentage of finance receivables
|
|
4.07
|
%
|
|
0.27
|
%
|
|
7.93
|
%
|
|
3.45
|
%
|
|
3.81
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for finance receivable losses for finance receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collectively evaluated for impairment
|
|
$
|
131
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
135
|
|
Purchased credit impaired finance receivables
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
TDR finance receivables
|
|
1
|
|
|
3
|
|
|
32
|
|
|
—
|
|
|
36
|
|
|||||
Total
|
|
$
|
132
|
|
|
$
|
3
|
|
|
$
|
40
|
|
|
$
|
1
|
|
|
$
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance receivables:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collectively evaluated for impairment
|
|
$
|
3,809
|
|
|
$
|
1,629
|
|
|
$
|
490
|
|
|
$
|
48
|
|
|
$
|
5,976
|
|
Purchased credit impaired finance receivables
|
|
—
|
|
|
340
|
|
|
30
|
|
|
—
|
|
|
370
|
|
|||||
TDR finance receivables
|
|
22
|
|
|
10
|
|
|
105
|
|
|
—
|
|
|
137
|
|
|||||
Total
|
|
$
|
3,831
|
|
|
$
|
1,979
|
|
|
$
|
625
|
|
|
$
|
48
|
|
|
$
|
6,483
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for finance receivable losses as a percentage of finance receivables
|
|
3.45
|
%
|
|
0.14
|
%
|
|
6.42
|
%
|
|
1.56
|
%
|
|
2.71
|
%
|
(dollars in millions)
|
|
Cost/
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair
Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and government sponsored entities
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
111
|
|
Obligations of states, municipalities, and political subdivisions
|
|
140
|
|
|
1
|
|
|
(1
|
)
|
|
140
|
|
||||
Non-U.S. government and government sponsored entities
|
|
126
|
|
|
1
|
|
|
(1
|
)
|
|
126
|
|
||||
Corporate debt
|
|
1,018
|
|
|
3
|
|
|
(22
|
)
|
|
999
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgage-backed securities (“RMBS”)
|
|
128
|
|
|
—
|
|
|
—
|
|
|
128
|
|
||||
Commercial mortgage-backed securities (“CMBS”)
|
|
117
|
|
|
—
|
|
|
(1
|
)
|
|
116
|
|
||||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”)
|
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
||||
Total bonds
|
|
1,712
|
|
|
5
|
|
|
(26
|
)
|
|
1,691
|
|
||||
Preferred stock
|
|
14
|
|
|
—
|
|
|
(1
|
)
|
|
13
|
|
||||
Common stock
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Other long-term investments
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total (a)
|
|
$
|
1,751
|
|
|
$
|
5
|
|
|
$
|
(27
|
)
|
|
$
|
1,729
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and government sponsored entities
|
|
$
|
61
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
64
|
|
Obligations of states, municipalities, and political subdivisions
|
|
99
|
|
|
3
|
|
|
—
|
|
|
102
|
|
||||
Certificates of deposit and commercial paper (b)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Corporate debt
|
|
256
|
|
|
12
|
|
|
(1
|
)
|
|
267
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
||||||||
RMBS
|
|
71
|
|
|
2
|
|
|
—
|
|
|
73
|
|
||||
CMBS
|
|
25
|
|
|
—
|
|
|
(1
|
)
|
|
24
|
|
||||
CDO/ABS
|
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
||||
Total bonds
|
|
578
|
|
|
20
|
|
|
(2
|
)
|
|
596
|
|
||||
Preferred stock
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Other long-term investments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total (a)
|
|
$
|
586
|
|
|
$
|
20
|
|
|
$
|
(2
|
)
|
|
$
|
604
|
|
(a)
|
Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of
$1 million
at
December 31, 2015
and
2014
, which is classified as a restricted investment and carried at cost.
|
(b)
|
Includes certificates of deposit pledged as collateral, totaling
$2 million
at December 31,
2014
, primarily to support bank lines of credit.
|
|
|
Less Than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
(dollars in millions)
|
|
Fair
Value
|
|
Unrealized Losses *
|
|
Fair
Value
|
|
Unrealized Losses *
|
|
Fair
Value
|
|
Unrealized Losses
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and government sponsored entities
|
|
$
|
102
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
102
|
|
|
$
|
(1
|
)
|
Obligations of states, municipalities, and political subdivisions
|
|
69
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
71
|
|
|
(1
|
)
|
||||||
Non-U.S. government and government sponsored entities
|
|
19
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
19
|
|
|
(1
|
)
|
||||||
Corporate debt
|
|
786
|
|
|
(22
|
)
|
|
7
|
|
|
—
|
|
|
793
|
|
|
(22
|
)
|
||||||
RMBS
|
|
107
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
—
|
|
||||||
CMBS
|
|
104
|
|
|
(1
|
)
|
|
5
|
|
|
—
|
|
|
109
|
|
|
(1
|
)
|
||||||
CDO/ABS
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
||||||
Total bonds
|
|
1,258
|
|
|
(26
|
)
|
|
14
|
|
|
—
|
|
|
1,272
|
|
|
(26
|
)
|
||||||
Preferred stock
|
|
2
|
|
|
—
|
|
|
6
|
|
|
(1
|
)
|
|
8
|
|
|
(1
|
)
|
||||||
Common stock
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||||
Other long-term investments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Total
|
|
$
|
1,277
|
|
|
$
|
(26
|
)
|
|
$
|
20
|
|
|
$
|
(1
|
)
|
|
$
|
1,297
|
|
|
$
|
(27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and government sponsored entities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Obligations of states, municipalities, and political subdivisions
|
|
27
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
28
|
|
|
—
|
|
||||||
Corporate debt
|
|
36
|
|
|
(1
|
)
|
|
6
|
|
|
—
|
|
|
42
|
|
|
(1
|
)
|
||||||
RMBS
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||||
CMBS
|
|
16
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
18
|
|
|
(1
|
)
|
||||||
CDO/ABS
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
||||||
Total bonds
|
|
134
|
|
|
(2
|
)
|
|
10
|
|
|
—
|
|
|
144
|
|
|
(2
|
)
|
||||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||
Total
|
|
$
|
140
|
|
|
$
|
(2
|
)
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
150
|
|
|
$
|
(2
|
)
|
*
|
Unrealized losses on certain available-for-sale securities were less than
$1 million
and, therefore, are not quantified in the table above.
|
(dollars in millions)
|
|
|
||
At or for the Years Ended December 31,
|
|
2015
|
||
|
|
|
||
Balance at beginning of period
|
|
$
|
1
|
|
Additions:
|
|
|
||
Due to other-than-temporary impairments:
|
|
|
||
Impairment not previously recognized
|
|
1
|
|
|
Balance at end of period
|
|
$
|
2
|
|
(dollars in millions)
|
|
Fair
Value
|
|
Amortized
Cost
|
||||
|
|
|
|
|
||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
|
|
|
|
|
||||
Due in 1 year or less
|
|
$
|
170
|
|
|
$
|
170
|
|
Due after 1 year through 5 years
|
|
602
|
|
|
607
|
|
||
Due after 5 years through 10 years
|
|
419
|
|
|
424
|
|
||
Due after 10 years
|
|
185
|
|
|
195
|
|
||
Mortgage-backed, asset-backed, and collateralized securities
|
|
315
|
|
|
316
|
|
||
Total
|
|
$
|
1,691
|
|
|
$
|
1,712
|
|
(dollars in millions)
|
|
|
|
|
||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Fixed maturity trading and other securities:
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
$
|
—
|
|
|
$
|
303
|
|
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
14
|
|
||
Certificates of deposit and commercial paper
|
|
—
|
|
|
238
|
|
||
Non-U.S. government and government sponsored entities
|
|
3
|
|
|
20
|
|
||
Corporate debt
|
|
124
|
|
|
1,056
|
|
||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
||||
RMBS
|
|
2
|
|
|
36
|
|
||
CMBS
|
|
2
|
|
|
151
|
|
||
CDO/ABS
|
|
—
|
|
|
512
|
|
||
Total bonds
|
|
131
|
|
|
2,330
|
|
||
Preferred stock
|
|
6
|
|
|
—
|
|
||
Total *
|
|
$
|
137
|
|
|
$
|
2,330
|
|
*
|
The fair value of other securities totaled
$128 million
at
December 31, 2015
and
$5 million
at
December 31, 2014
.
|
*
|
The net unrealized and realized gains (losses) on our other securities for the year ended
December 31, 2013
were less than
$1 million
and, therefore, are not quantified in the table above.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
||
|
|
|
||
Year Ended December 31, 2015
|
|
|
||
Balance at beginning of period
|
|
$
|
—
|
|
Goodwill - OneMain Acquisition *
|
|
1,440
|
|
|
Balance at end of period
|
|
$
|
1,440
|
|
*
|
Goodwill was recorded at OMFH subsidiary level.
|
(dollars in millions)
|
|
Gross Carrying Amount *
|
|
Accumulated Amortization
|
|
Net Other Intangible Assets
|
||||||
|
|
|
|
|
|
|
||||||
December 31, 2015
|
|
|
|
|
|
|
||||||
Customer relationships
|
|
223
|
|
|
(24
|
)
|
|
199
|
|
|||
Trade names
|
|
220
|
|
|
—
|
|
|
220
|
|
|||
VOBA
|
|
141
|
|
|
(39
|
)
|
|
102
|
|
|||
Licenses
|
|
37
|
|
|
—
|
|
|
37
|
|
|||
Customer lists
|
|
9
|
|
|
(9
|
)
|
|
—
|
|
|||
Domain names
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total
|
|
$
|
631
|
|
|
$
|
(72
|
)
|
|
$
|
559
|
|
|
|
|
|
|
|
|
||||||
December 31, 2014
|
|
|
|
|
|
|
||||||
Customer relationships
|
|
$
|
18
|
|
|
$
|
(15
|
)
|
|
$
|
3
|
|
VOBA
|
|
36
|
|
|
(32
|
)
|
|
4
|
|
|||
Licenses
|
|
12
|
|
|
—
|
|
|
12
|
|
|||
Customer lists
|
|
9
|
|
|
(8
|
)
|
|
1
|
|
|||
Domain names
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total
|
|
$
|
76
|
|
|
$
|
(55
|
)
|
|
$
|
21
|
|
*
|
In connection with the OneMain Acquisition, OMFH recorded
$555 million
of other intangible assets in November of 2015. See Note
2
for further information on the other intangibles related to the OneMain Acquisition.
|
(dollars in millions)
|
|
Estimated Aggregate Amortization Expense
|
||
|
|
|
||
2016
|
|
$
|
67
|
|
2017
|
|
52
|
|
|
2018
|
|
44
|
|
|
2019
|
|
40
|
|
|
2020
|
|
38
|
|
(a)
|
Fixed assets were net of accumulated depreciation of
$190 million
at
December 31, 2015
and
$170 million
at
December 31, 2014
.
|
(b)
|
Other investments primarily include commercial mortgage loans, receivables related to investments, and accrued investment income.
|
(c)
|
As a result of our early adoption of ASU 2015-03, we reclassified
$29 million
of debt issuance costs from other assets to long-term debt as of
December 31, 2014
.
|
(d)
|
Current tax receivable includes current federal, foreign, and state tax assets.
|
(e)
|
Receivables related to sales of real estate loans and related trust assets includes
$5 million
and
$64 million
, respectively, of holdback provisions as of
December 31, 2015
and
2014
.
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
(dollars in millions)
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value *
|
|
Fair
Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Senior debt
|
|
$
|
17,128
|
|
|
$
|
17,371
|
|
|
$
|
8,184
|
|
|
$
|
8,920
|
|
Junior subordinated debt
|
|
172
|
|
|
245
|
|
|
172
|
|
|
262
|
|
||||
Total
|
|
$
|
17,300
|
|
|
$
|
17,616
|
|
|
$
|
8,356
|
|
|
$
|
9,182
|
|
*
|
As a result of our early adoption of ASU 2015-03, we reclassified
$29 million
of debt issuance costs from other assets to long-term debt - senior debt as of
December 31, 2014
.
|
|
|
Years Ended December 31,
|
|
At December 31,
|
|||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Senior debt
|
|
6.56
|
%
|
|
6.84
|
%
|
|
6.75
|
%
|
|
5.32
|
%
|
|
7.16
|
%
|
Junior subordinated debt
|
|
12.26
|
|
|
12.26
|
|
|
12.26
|
|
|
12.26
|
|
|
12.26
|
|
Total
|
|
6.65
|
|
|
6.93
|
|
|
6.82
|
|
|
5.39
|
|
|
7.26
|
|
|
|
Senior Debt
|
|
|
|
|
||||||||||||||
(dollars in millions)
|
|
Securitizations
|
|
Revolving
Conduit Facilities |
|
Medium
Term
Notes
|
|
Junior
Subordinated
Debt
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rates (a)
|
|
2.41% - 6.94%
|
|
|
1.65% - 3.65%
|
|
|
5.25% - 8.25%
|
|
|
6.00%
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
First quarter 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Second quarter 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Third quarter 2016
|
|
—
|
|
|
—
|
|
|
375
|
|
|
—
|
|
|
375
|
|
|||||
Fourth quarter 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2016
|
|
—
|
|
|
—
|
|
|
375
|
|
|
—
|
|
|
375
|
|
|||||
2017
|
|
—
|
|
|
—
|
|
|
1,903
|
|
|
—
|
|
|
1,903
|
|
|||||
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2019
|
|
—
|
|
|
—
|
|
|
1,400
|
|
|
—
|
|
|
1,400
|
|
|||||
2020
|
|
—
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
|||||
2021-2067
|
|
—
|
|
|
—
|
|
|
1,750
|
|
|
350
|
|
|
2,100
|
|
|||||
Securitizations (b)
|
|
9,040
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,040
|
|
|||||
Revolving conduit facilities (b)
|
|
—
|
|
|
2,620
|
|
|
—
|
|
|
—
|
|
|
2,620
|
|
|||||
Total principal maturities
|
|
$
|
9,040
|
|
|
$
|
2,620
|
|
|
$
|
5,728
|
|
|
$
|
350
|
|
|
$
|
17,738
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total carrying amount (c)
|
|
$
|
9,034
|
|
|
$
|
2,620
|
|
|
$
|
5,474
|
|
|
$
|
172
|
|
|
$
|
17,300
|
|
Debt issuance costs (d)
|
|
$
|
(16
|
)
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
(a)
|
The interest rates shown are the range of contractual rates in effect at
December 31, 2015
.
|
(b)
|
Securitizations and borrowing under revolving conduit facilities are not included in above maturities by period due to their variable monthly repayments. See Note
13
for further information on our long-term debt associated with securitizations and revolving conduit facilities.
|
(c)
|
The net carrying amount of our long-term debt associated with certain securitizations that were either (i) issued at a premium or discount or (ii) revalued at a premium or discount based on its fair value at the time of the OneMain Acquisition or the Fortress Acquisition or (iii) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value.
|
(d)
|
As a result of our early adoption of ASU 2015-03 in June of 2015, we report debt issuance costs as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities, which we continue to report in other assets.
|
(a)
|
In connection with our disclosure integration with OneMain, we have expanded our presentation to include cash and cash equivalents, other assets and other liabilities associated with our securitization trusts.
|
(b)
|
As a result of our early adoption of ASU 2015-03 in June of 2015, we reclassified
$14 million
of debt issuance costs related to our long-term debt associated with our securitizations as of December 31, 2014, from other assets to long-term debt.
|
(dollars in millions)
|
|
Principal Amount
of Previously Retained
Notes Issued
|
|
Carrying Amount
of Additional
Debt Recorded
|
||||
|
|
|
|
|
||||
Mortgage Securitizations
|
|
|
|
|
||||
SLFMT 2012-2
|
|
$
|
20
|
|
|
$
|
21
|
|
SLFMT 2012-3
|
|
8
|
|
|
8
|
|
||
SLFMT 2013-2
|
|
158
|
|
|
149
|
|
||
SLFMT 2013-3
|
|
23
|
|
|
23
|
|
(a)
|
Reported as a contra-asset to net finance receivables in connection with the OneMain policy integration.
|
(b)
|
Reported in insurance claims and policyholder liabilities.
|
*
|
As a result of the offering of our common stock in May of 2015, the economic interests of AIG is no longer material; therefore, the reinsurance agreements with insurers that are subsidiaries of AIG as of December 31, 2015 have not been segregated.
|
(dollars in millions)
|
|
|
|
|
|
|
||||||
At or for the Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
$
|
48
|
|
|
$
|
46
|
|
|
$
|
51
|
|
Reserve for unpaid claims and loss adjustment expenses assumed in connection with the OneMain Acquisition
|
|
104
|
|
|
—
|
|
|
—
|
|
|||
Additions for losses and loss adjustment expenses incurred to:
|
|
|
|
|
|
|
||||||
Current year
|
|
83
|
|
|
65
|
|
|
59
|
|
|||
Prior years *
|
|
5
|
|
|
(3
|
)
|
|
(6
|
)
|
|||
Total
|
|
88
|
|
|
62
|
|
|
53
|
|
|||
Reductions for losses and loss adjustment expenses paid related to:
|
|
|
|
|
|
|
||||||
Current year
|
|
(63
|
)
|
|
(39
|
)
|
|
(35
|
)
|
|||
Prior years
|
|
(26
|
)
|
|
(21
|
)
|
|
(23
|
)
|
|||
Total
|
|
(89
|
)
|
|
(60
|
)
|
|
(58
|
)
|
|||
Balance at end of period
|
|
$
|
151
|
|
|
$
|
48
|
|
|
$
|
46
|
|
*
|
Reflects (i) a shortfall in the prior years’ net reserves of
$5 million
at
December 31, 2015
primarily resulting from increased estimates for claims incurred in prior years as claims have developed and (ii) a redundancy in the prior years’ net reserves of
$3 million
at
December 31, 2014
and
$6 million
at
December 31, 2013
primarily resulting from the settlement of claims incurred in prior years for amounts that were less than expected.
|
(dollars in millions)
|
|
|
|
|
||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Property and casualty:
|
|
|
|
|
||||
Yosemite Insurance Company
|
|
$
|
76
|
|
|
$
|
108
|
|
Triton Insurance Company
|
|
181
|
|
|
—
|
|
||
|
|
|
|
|
||||
Life and disability:
|
|
|
|
|
||||
Merit Life Insurance Co.
|
|
$
|
123
|
|
|
$
|
171
|
|
American Health and Life Insurance Company
|
|
184
|
|
|
—
|
|
(dollars in millions)
|
|
|
|
|
||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Other accrued expenses and accounts payable
|
|
$
|
83
|
|
|
$
|
31
|
|
Salary and benefit liabilities
|
|
75
|
|
|
36
|
|
||
Accrued interest on debt
|
|
67
|
|
|
57
|
|
||
Retirement plans
|
|
55
|
|
|
50
|
|
||
Loan principal warranty reserve
|
|
15
|
|
|
24
|
|
||
Other insurance liabilities
|
|
8
|
|
|
4
|
|
||
Bank overdrafts
|
|
14
|
|
|
5
|
|
||
Other
|
|
67
|
|
|
31
|
|
||
Total
|
|
$
|
384
|
|
|
$
|
238
|
|
|
|
Preferred Stock *
|
|
Common Stock
|
||||
|
|
|
|
|
||||
Par value
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
Shares authorized
|
|
300,000,000
|
|
|
2,000,000,000
|
|
*
|
No
shares of preferred stock were issued and outstanding at
December 31, 2015
or
2014
.
|
At or for the Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
|||
|
|
|
|
|
|
|
|||
Balance at beginning of period
|
|
114,832,895
|
|
|
114,832,895
|
|
|
100,000,000
|
|
Common shares issued
|
|
19,661,277
|
|
|
—
|
|
|
14,832,895
|
|
Balance at end of period
|
|
134,494,172
|
|
|
114,832,895
|
|
|
114,832,895
|
|
(dollars in millions except earnings (loss) per share)
|
|
|
|
|
|
|
||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Numerator (basic and diluted):
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to OneMain Holdings, Inc.
|
|
$
|
(242
|
)
|
|
$
|
505
|
|
|
$
|
(19
|
)
|
Denominator:
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding (basic)
|
|
127,910,680
|
|
|
114,791,225
|
|
|
102,917,172
|
|
|||
Effect of dilutive securities *
|
|
—
|
|
|
473,898
|
|
|
—
|
|
|||
Weighted average number of shares outstanding (diluted)
|
|
127,910,680
|
|
|
115,265,123
|
|
|
102,917,172
|
|
|||
Earnings (loss) per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(1.89
|
)
|
|
$
|
4.40
|
|
|
$
|
(0.19
|
)
|
Diluted
|
|
$
|
(1.89
|
)
|
|
$
|
4.38
|
|
|
$
|
(0.19
|
)
|
*
|
We have excluded the following shares in the diluted earnings (loss) per share calculation for
2015
,
2014
, and
2013
because these shares would be anti-dilutive, which could impact the earnings per share calculation in the future:
|
(dollars in millions)
|
|
Unrealized Gains (Losses) Available-for-Sale Securities
|
|
Retirement Plan Liabilities Adjustments
|
|
Foreign Currency Translation Adjustments
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
12
|
|
|
$
|
(13
|
)
|
|
$
|
4
|
|
|
$
|
3
|
|
Other comprehensive loss before reclassifications
|
|
(18
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
(28
|
)
|
||||
Reclassification adjustments from accumulated other comprehensive income (loss)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Balance at end of period
|
|
$
|
(14
|
)
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
4
|
|
|
$
|
20
|
|
|
$
|
4
|
|
|
$
|
28
|
|
Other comprehensive income (loss) before reclassifications
|
|
13
|
|
|
(33
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Reclassification adjustments from accumulated other comprehensive income
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Balance at end of period
|
|
$
|
12
|
|
|
$
|
(13
|
)
|
|
$
|
4
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
14
|
|
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
27
|
|
Other comprehensive income (loss) before reclassifications
|
|
(8
|
)
|
|
12
|
|
|
(1
|
)
|
|
3
|
|
||||
Reclassification adjustments from accumulated other comprehensive income
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Balance at end of period
|
|
$
|
4
|
|
|
$
|
20
|
|
|
$
|
4
|
|
|
$
|
28
|
|
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
|||
|
|
|
|
|
|
|
|||
Statutory federal income tax rate
|
|
35.00
|
%
|
|
35.00
|
%
|
|
35.00
|
%
|
|
|
|
|
|
|
|
|||
Non-controlling interests
|
|
15.52
|
|
|
(3.98
|
)
|
|
(51.01
|
)
|
State income taxes, net of federal
|
|
6.41
|
|
|
1.49
|
|
|
(5.55
|
)
|
Foreign operations
|
|
—
|
|
|
0.38
|
|
|
4.69
|
|
Interest and penalties on prior year tax returns
|
|
—
|
|
|
(0.10
|
)
|
|
7.67
|
|
Nontaxable investment income
|
|
0.17
|
|
|
(0.10
|
)
|
|
(1.94
|
)
|
Change in tax status
|
|
—
|
|
|
—
|
|
|
(14.64
|
)
|
Nondeductible compensation
|
|
(2.01
|
)
|
|
—
|
|
|
3.49
|
|
Other, net
|
|
(0.50
|
)
|
|
0.15
|
|
|
1.42
|
|
Effective income tax rate
|
|
54.59
|
%
|
|
32.84
|
%
|
|
(20.87
|
)%
|
(dollars in millions)
|
|
|
|
|
||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Allowance for loan losses
|
|
$
|
221
|
|
|
$
|
80
|
|
State taxes, net of federal
|
|
42
|
|
|
22
|
|
||
Pension/employee benefits
|
|
37
|
|
|
26
|
|
||
Joint venture
|
|
27
|
|
|
12
|
|
||
Capital loss carryforward
|
|
27
|
|
|
—
|
|
||
Net operating losses and tax attributes
|
|
16
|
|
|
19
|
|
||
Deferred insurance commissions
|
|
12
|
|
|
3
|
|
||
Acquisition costs
|
|
10
|
|
|
—
|
|
||
Legal and warranty reserve
|
|
6
|
|
|
10
|
|
||
Payment protection insurance liability
|
|
2
|
|
|
5
|
|
||
Other
|
|
19
|
|
|
5
|
|
||
Total
|
|
419
|
|
|
182
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Debt writedown
|
|
121
|
|
|
194
|
|
||
Impact of tax accounting method change
|
|
76
|
|
|
—
|
|
||
Discount - debt exchange
|
|
20
|
|
|
23
|
|
||
Mark-to-market
|
|
17
|
|
|
47
|
|
||
Other intangible assets
|
|
12
|
|
|
7
|
|
||
Insurance reserves
|
|
11
|
|
|
10
|
|
||
Goodwill
|
|
5
|
|
|
—
|
|
||
Other
|
|
—
|
|
|
5
|
|
||
Total
|
|
262
|
|
|
286
|
|
||
|
|
|
|
|
||||
Net deferred tax assets (liabilities) before valuation allowance
|
|
157
|
|
|
(104
|
)
|
||
Valuation allowance
|
|
(38
|
)
|
|
(44
|
)
|
||
Net deferred tax assets (liabilities)
|
|
$
|
119
|
|
|
$
|
(148
|
)
|
(dollars in millions)
|
|
Lease Commitments
|
||
|
|
|
||
First quarter 2016
|
|
$
|
17
|
|
Second quarter 2016
|
|
17
|
|
|
Third quarter 2016
|
|
16
|
|
|
Fourth quarter 2016
|
|
15
|
|
|
2016
|
|
65
|
|
|
2017
|
|
48
|
|
|
2018
|
|
32
|
|
|
2019
|
|
20
|
|
|
2020
|
|
12
|
|
|
2021+
|
|
21
|
|
|
Total
|
|
$
|
198
|
|
*
|
Reflects the elimination of the reserve associated with other prior sales of finance receivables.
|
(dollars in millions)
|
|
Pension (a)
|
|
Postretirement (b)
|
||||||||||||||||
At or for the Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Projected benefit obligation, beginning of period
|
|
$
|
409
|
|
|
$
|
323
|
|
|
$
|
368
|
|
|
$
|
2
|
|
|
$
|
7
|
|
Interest cost
|
|
15
|
|
|
15
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|||||
Actuarial loss (gain) (c)
|
|
(24
|
)
|
|
83
|
|
|
(47
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Benefits paid:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Plan assets
|
|
(12
|
)
|
|
(12
|
)
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|||||
Curtailment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||||
Projected benefit obligation, end of period
|
|
388
|
|
|
409
|
|
|
323
|
|
|
—
|
|
|
2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value of plan assets, beginning of period
|
|
359
|
|
|
317
|
|
|
347
|
|
|
—
|
|
|
—
|
|
|||||
Actual return on plan assets, net of expenses
|
|
(15
|
)
|
|
54
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|||||
Company contributions
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Benefits paid:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Plan assets
|
|
(12
|
)
|
|
(12
|
)
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|||||
Fair value of plan assets, end of period
|
|
333
|
|
|
359
|
|
|
317
|
|
|
—
|
|
|
—
|
|
|||||
Funded status, end of period
|
|
$
|
(55
|
)
|
|
$
|
(50
|
)
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net amounts recognized in the consolidated balance sheet:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other liabilities
|
|
(55
|
)
|
|
(50
|
)
|
|
(13
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Total amounts recognized
|
|
$
|
(55
|
)
|
|
$
|
(50
|
)
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pretax net gain (loss) recognized in accumulated other comprehensive income or loss
|
|
$
|
29
|
|
|
$
|
(19
|
)
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
4
|
|
(a)
|
Includes non-qualified unfunded plans, for which the aggregate projected benefit obligation was
$10 million
at
December 31, 2015
and
2014
.
|
(b)
|
We do not currently fund postretirement benefits.
|
(c)
|
We adopted new mortality tables in 2014, which increased the plan liabilities during 2014.
|
(dollars in millions)
|
|
PBO and ABO Exceeds
Fair Value of Plan Assets |
||||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Projected benefit obligation
|
|
$
|
388
|
|
|
$
|
409
|
|
Accumulated benefit obligation
|
|
388
|
|
|
409
|
|
||
Fair value of plan assets
|
|
333
|
|
|
359
|
|
(dollars in millions)
|
|
Pension
|
|
Postretirement
|
||||||||||||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
|
15
|
|
|
15
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|||||
Expected return on assets
|
|
(19
|
)
|
|
(16
|
)
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||||
Curtailment gain
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||||
Settlement gain
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||||
Net periodic benefit cost
|
|
(4
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|
1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other changes in plan assets and projected benefit obligation recognized in other comprehensive income or loss:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net actuarial loss (gain)
|
|
9
|
|
|
46
|
|
|
(13
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Net settlement gain
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|||||
Total recognized in other comprehensive income or loss
|
|
9
|
|
|
46
|
|
|
(13
|
)
|
|
4
|
|
|
(5
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total recognized in net periodic benefit cost and other comprehensive income or loss
|
|
$
|
5
|
|
|
$
|
45
|
|
|
$
|
(14
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
•
|
the estimated net loss that will be amortized from accumulated other comprehensive income or loss into net periodic benefit cost over the next fiscal year will be less than
$1 million
for our combined defined benefit pension plans;
|
•
|
the estimated prior service credit that will be amortized from accumulated other comprehensive income or loss into net periodic benefit cost over the next fiscal year will be
zero
for our combined defined benefit pension plans; and
|
•
|
the estimated amortization from accumulated other comprehensive income or loss for net loss and prior service credit that will be amortized into net periodic benefit cost over the next fiscal year will be
zero
for our defined benefit postretirement plans.
|
|
|
Pension
|
|
Postretirement
|
||||||||
December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
|
|
|
||||
Projected benefit obligation:
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
4.26
|
%
|
|
3.89
|
%
|
|
3.45
|
%
|
|
3.80
|
%
|
Rate of compensation increase
|
|
—
|
|
|
—
|
|
|
N/A *
|
|
|
N/A *
|
|
|
|
|
|
|
|
|
|
|
||||
Net periodic benefit costs:
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
3.89
|
%
|
|
4.83
|
%
|
|
3.80
|
%
|
|
3.80
|
%
|
Expected long-term rate of return on plan assets
|
|
5.27
|
%
|
|
5.29
|
%
|
|
N/A *
|
|
|
N/A *
|
|
Rate of compensation increase (average)
|
|
—
|
|
|
—
|
|
|
N/A *
|
|
|
N/A *
|
|
*
|
Not applicable
|
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. (a)
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||
International (b)
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. investment grade (c)
|
|
—
|
|
|
291
|
|
|
—
|
|
|
291
|
|
||||
U.S. high yield (d)
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Total
|
|
$
|
3
|
|
|
$
|
330
|
|
|
$
|
—
|
|
|
$
|
333
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. (a)
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||
International (b)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. investment grade (c)
|
|
—
|
|
|
335
|
|
|
—
|
|
|
335
|
|
||||
U.S. high yield (d)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Total
|
|
$
|
2
|
|
|
$
|
357
|
|
|
$
|
—
|
|
|
$
|
359
|
|
(a)
|
Includes index mutual funds that primarily track several indices including S&P 500 and S&P 600 in addition to other actively managed accounts, comprised of investments in large cap companies.
|
(b)
|
Includes investment mutual funds in companies in emerging and developed markets.
|
(c)
|
Includes investment mutual funds in U.S. and non-U.S. government issued bonds, U.S. government agency or sponsored agency bonds, and investment grade corporate bonds.
|
(d)
|
Includes investment mutual funds in securities or debt obligations that have a rating below investment grade.
|
|
|
Number of Shares
|
|
Weighted
Average
Grant Date Fair Value
|
|
Weighted
Average
Remaining
Term (in Years)
|
|||
|
|
|
|
|
|
|
|||
Unvested as of January 1, 2015
|
|
1,352,865
|
|
|
$
|
17.91
|
|
|
|
Granted
|
|
1,115,662
|
|
|
47.44
|
|
|
|
|
Vested
|
|
(384,902
|
)
|
|
18.45
|
|
|
|
|
Forfeited
|
|
(74,201
|
)
|
|
24.65
|
|
|
|
|
Unvested at December 31, 2015
|
|
2,009,424
|
|
|
33.95
|
|
|
2.91
|
|
|
Number of Shares
|
|
Weighted
Average
Grant Date Fair Value
|
|
Weighted
Average
Remaining
Term (in Years)
|
|||
|
|
|
|
|
|
|
|||
Unvested as of January 1, 2015
|
|
583,459
|
|
|
$
|
25.84
|
|
|
|
Granted
|
|
16,091
|
|
|
34.45
|
|
|
|
|
Forfeited
|
|
(18,437
|
)
|
|
35.05
|
|
|
|
|
Unvested at December 31, 2015
|
|
581,113
|
|
|
25.79
|
|
|
2.59
|
•
|
Consumer and Insurance;
|
•
|
Acquisitions and Servicing; and
|
•
|
Real Estate.
|
•
|
Consumer and Insurance
— We originate and service personal loans (secured and unsecured) through
two
business divisions: branch operations and centralized operations and offer credit insurance (life insurance, disability insurance, and involuntary unemployment insurance), non-credit insurance, and ancillary products, such as warranty protection. As a result of the OneMain Acquisition, our combined branch operations primarily conduct business in
43
states, which are our core operating states. Our centralized operations underwrite and process certain loan applications that we receive from our branch operations or through an internet portal. If the applicant is located near an existing branch (“in footprint”), our centralized operations make the credit decision regarding the application and then request, but do not require, the customer to visit a nearby branch for closing, funding and servicing. If the applicant is not located near a branch (“out of footprint”), our centralized operations originate the loan.
|
•
|
Acquisitions and Servicing
— We service the SpringCastle Portfolio that we acquired through a joint venture in which we own a
47%
equity interest. The SpringCastle Portfolio consists of unsecured loans and loans secured by subordinate residential real estate mortgages (which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking security interests) and includes both closed-end accounts and open-end lines of credit. These loans vary in form and substance from our typical branch serviced loans and are in a liquidating status.
|
•
|
Real Estate
— We service and hold real estate loans secured by first or second mortgages on residential real estate. Real estate loans previously originated through our branch offices or previously acquired or originated through centralized distribution channels are serviced by: (i) MorEquity and subserviced by Nationstar; (ii) Select Portfolio Servicing, Inc.; or (iii) our centralized operations. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. Prior to the OneMain Acquisition, this segment also included proceeds from the sale of our real estate loans in 2014. We used these proceeds to acquire OneMain.
|
Salaries and benefits
|
Directly correlated with a specific segment. Other salaries and benefits not directly correlated with a specific segment are allocated to each of the segments based on services provided.
|
Acquisition-related transaction and integration expenses
|
Consists of: (i) acquisition-related transaction and integration costs related to the OneMain Acquisition, including legal and other professional fees, which we report in Other, as these are costs related to acquiring the business as opposed to operating the business; (ii) software termination costs, which are allocated to Consumer and Insurance; and (iii) incentive compensation incurred above and beyond expected cost from acquiring and retaining talent in relation to the OneMain Acquisition, which are allocated to each of the segments based on services provided.
|
Other operating expenses
|
Directly correlated with a specific segment. Other operating expenses not directly correlated with a specific segment are allocated to each of the segments based on services provided.
|
Insurance policy benefits and claims
|
Directly correlated with a specific segment.
|
•
|
interest income
- the net purchase accounting impact of the amortization (accretion) of the net premium (discount) assigned to finance receivables and the impact of identifying purchased credit impaired finance receivables as compared to the historical values of finance receivables;
|
•
|
interest expense
- primarily includes the accretion of the net discount applied to our long term debt as part of purchase accounting;
|
•
|
provision for finance receivable losses
- the adjustment to reflect the difference between our allowance adjustment calculated under our Segment Accounting Basis and our GAAP basis. In addition, in 2015, the Company reversed loan loss provision of
$364 million
recorded related to OneMain’s acquired finance receivables balance, as we do not believe the initial recording of the provision is indicative of the run rate of the business;
|
•
|
other revenues
- the impact of carrying value differences between Segment Accounting Basis and purchase accounting basis when measuring mark to market for loans held for sale and realized gains/losses associated with our investment portfolio; and
|
•
|
other expenses
- the net impact of amortization associated with identified intangibles as part of purchase accounting and deferred costs impacted by purchase accounting.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Acquisitions
and
Servicing
|
|
Real
Estate
|
|
Other
|
|
Eliminations
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At or for the Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
|
$
|
1,482
|
|
|
$
|
470
|
|
|
$
|
68
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
(97
|
)
|
|
$
|
1,931
|
|
Interest expense
|
|
242
|
|
|
87
|
|
|
212
|
|
|
56
|
|
|
(5
|
)
|
|
123
|
|
|
715
|
|
|||||||
Provision for finance receivable losses
|
|
351
|
|
|
90
|
|
|
(2
|
)
|
|
1
|
|
|
—
|
|
|
319
|
|
|
759
|
|
|||||||
Net interest income (loss) after provision for finance receivable losses
|
|
889
|
|
|
293
|
|
|
(142
|
)
|
|
(49
|
)
|
|
5
|
|
|
(539
|
)
|
|
457
|
|
|||||||
Other revenues
|
|
276
|
|
|
58
|
|
|
3
|
|
|
—
|
|
|
(57
|
)
|
|
(19
|
)
|
|
261
|
|
|||||||
Acquisition-related transaction and integration expenses
|
|
16
|
|
|
1
|
|
|
1
|
|
|
47
|
|
|
—
|
|
|
(3
|
)
|
|
62
|
|
|||||||
Other expenses
|
|
804
|
|
|
111
|
|
|
33
|
|
|
15
|
|
|
(52
|
)
|
|
14
|
|
|
925
|
|
|||||||
Income (loss) before provision for (benefit from) income taxes
|
|
345
|
|
|
239
|
|
|
(173
|
)
|
|
(111
|
)
|
|
—
|
|
|
(569
|
)
|
|
(269
|
)
|
|||||||
Income before provision for income taxes attributable to non-controlling interests
|
|
—
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|||||||
Income (loss) before provision for (benefit from) income taxes attributable to OneMain Holdings, Inc.
|
|
$
|
345
|
|
|
$
|
119
|
|
|
$
|
(173
|
)
|
|
$
|
(111
|
)
|
|
$
|
—
|
|
|
$
|
(569
|
)
|
|
$
|
(389
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Assets *
|
|
$
|
16,050
|
|
|
$
|
1,663
|
|
|
$
|
711
|
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
2,270
|
|
|
$
|
21,056
|
|
*
|
Includes
$11.2 billion
of OneMain assets, which are reported in Consumer and Insurance.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Acquisitions
and
Servicing
|
|
Real
Estate
|
|
Other
|
|
Eliminations
|
|
Segment to
GAAP Adjustment |
|
Consolidated
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At or for the Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
|
$
|
916
|
|
|
$
|
550
|
|
|
$
|
406
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
93
|
|
|
$
|
1,982
|
|
Interest expense
|
|
164
|
|
|
82
|
|
|
353
|
|
|
8
|
|
|
(5
|
)
|
|
132
|
|
|
734
|
|
|||||||
Provision for finance receivable losses
|
|
202
|
|
|
152
|
|
|
128
|
|
|
7
|
|
|
—
|
|
|
(15
|
)
|
|
474
|
|
|||||||
Net interest income (loss) after provision for finance receivable losses
|
|
550
|
|
|
316
|
|
|
(75
|
)
|
|
2
|
|
|
5
|
|
|
(24
|
)
|
|
774
|
|
|||||||
Other revenues
|
|
215
|
|
|
36
|
|
|
154
|
|
|
1
|
|
|
(71
|
)
|
|
497
|
|
|
832
|
|
|||||||
Other expenses
|
|
537
|
|
|
123
|
|
|
93
|
|
|
11
|
|
|
(66
|
)
|
|
3
|
|
|
701
|
|
|||||||
Income (loss) before provision for (benefit from) income taxes
|
|
228
|
|
|
229
|
|
|
(14
|
)
|
|
(8
|
)
|
|
—
|
|
|
470
|
|
|
905
|
|
|||||||
Income before provision for income taxes attributable to non-controlling interests
|
|
—
|
|
|
103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
103
|
|
|||||||
Income (loss) before provision for (benefit from) income taxes attributable to OneMain Holdings, Inc.
|
|
$
|
228
|
|
|
$
|
126
|
|
|
$
|
(14
|
)
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
470
|
|
|
$
|
802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Assets *
|
|
$
|
4,165
|
|
|
$
|
2,434
|
|
|
$
|
4,116
|
|
|
$
|
441
|
|
|
$
|
(363
|
)
|
|
$
|
19
|
|
|
$
|
10,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At or for the Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
|
$
|
722
|
|
|
$
|
489
|
|
|
$
|
698
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
2,154
|
|
Interest expense
|
|
149
|
|
|
72
|
|
|
546
|
|
|
15
|
|
|
—
|
|
|
138
|
|
|
920
|
|
|||||||
Provision for finance receivable losses
|
|
117
|
|
|
133
|
|
|
255
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
527
|
|
|||||||
Net interest income after provision for finance receivable losses
|
|
456
|
|
|
284
|
|
|
(103
|
)
|
|
30
|
|
|
—
|
|
|
40
|
|
|
707
|
|
|||||||
Other revenues
|
|
197
|
|
|
36
|
|
|
7
|
|
|
(2
|
)
|
|
(31
|
)
|
|
(54
|
)
|
|
153
|
|
|||||||
Other expenses
|
|
452
|
|
|
97
|
|
|
83
|
|
|
178
|
|
|
(31
|
)
|
|
3
|
|
|
782
|
|
|||||||
Income (loss) before provision for (benefit from) income taxes
|
|
201
|
|
|
223
|
|
|
(179
|
)
|
|
(150
|
)
|
|
—
|
|
|
(17
|
)
|
|
78
|
|
|||||||
Income before provision for income taxes attributable to non-controlling interests
|
|
—
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|||||||
Income (loss) before provision for (benefit from) income taxes attributable to OneMain Holdings, Inc.
|
|
$
|
201
|
|
|
$
|
110
|
|
|
$
|
(179
|
)
|
|
$
|
(150
|
)
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Assets *
|
|
$
|
3,938
|
|
|
$
|
2,702
|
|
|
$
|
8,623
|
|
|
$
|
520
|
|
|
$
|
—
|
|
|
$
|
(607
|
)
|
|
$
|
15,176
|
|
*
|
Assets reflect the following:
|
•
|
As a result of our early adoption of ASU 2015-03, we reclassified debt issuance costs of
$29 million
and
$55 million
as of
December 31, 2014
and 2013, respectively, from other assets to long-term debt.
|
•
|
In connection with our policy integration with OneMain, we report unearned insurance premium and claim reserves related to finance receivables (previously reported in insurance claims and policyholder liabilities) as a contra-asset to net finance receivables, which totaled
$217 million
and
$172 million
at
December 31, 2014
and 2013, respectively.
|
•
|
See Note
3
for further information on the correction of the total asset segment disclosure error.
|
|
|
Fair Value Measurements Using
|
|
Total
Fair
Value
|
|
Total Carrying Value
|
||||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
939
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
939
|
|
|
$
|
939
|
|
Investment securities
|
|
36
|
|
|
1,829
|
|
|
2
|
|
|
1,867
|
|
|
1,867
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
15,943
|
|
|
15,943
|
|
|
14,803
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
819
|
|
|
819
|
|
|
796
|
|
|||||
Restricted cash and cash equivalents
|
|
676
|
|
|
—
|
|
|
—
|
|
|
676
|
|
|
676
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage loans
|
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
|
62
|
|
|||||
Escrow advance receivable
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
11
|
|
|||||
Receivables related to sales of real estate loans and related trust assets
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
17,616
|
|
|
$
|
—
|
|
|
$
|
17,616
|
|
|
$
|
17,300
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
714
|
|
|
$
|
165
|
|
|
$
|
—
|
|
|
$
|
879
|
|
|
$
|
879
|
|
Investment securities
|
|
—
|
|
|
2,926
|
|
|
9
|
|
|
2,935
|
|
|
2,935
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
6,979
|
|
|
6,979
|
|
|
6,307
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
209
|
|
|
209
|
|
|
205
|
|
|||||
Restricted cash and cash equivalents
|
|
218
|
|
|
—
|
|
|
—
|
|
|
218
|
|
|
218
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial mortgage loans
|
|
—
|
|
|
—
|
|
|
78
|
|
|
78
|
|
|
85
|
|
|||||
Escrow advance receivable
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
8
|
|
|||||
Receivables related to sales of real estate loans and related trust assets
|
|
—
|
|
|
67
|
|
|
—
|
|
|
67
|
|
|
79
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
9,182
|
|
|
$
|
—
|
|
|
$
|
9,182
|
|
|
$
|
8,356
|
|
|
|
Fair Value Measurements Using
|
|
Total Carried At Fair Value
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents in mutual funds
|
|
$
|
240
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
240
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and government sponsored entities
|
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
126
|
|
|
—
|
|
|
126
|
|
||||
Corporate debt
|
|
—
|
|
|
999
|
|
|
—
|
|
|
999
|
|
||||
RMBS
|
|
—
|
|
|
128
|
|
|
—
|
|
|
128
|
|
||||
CMBS
|
|
—
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||
CDO/ABS
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
||||
Total bonds
|
|
—
|
|
|
1,691
|
|
|
—
|
|
|
1,691
|
|
||||
Preferred stock
|
|
6
|
|
|
7
|
|
|
—
|
|
|
13
|
|
||||
Common stock
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Total available-for-sale securities (a)
|
|
29
|
|
|
1,698
|
|
|
2
|
|
|
1,729
|
|
||||
Trading and other securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds:
|
|
|
|
|
|
|
|
|
||||||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Corporate debt
|
|
—
|
|
|
124
|
|
|
—
|
|
|
124
|
|
||||
RMBS
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
CMBS
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Total bonds
|
|
—
|
|
|
131
|
|
|
—
|
|
|
131
|
|
||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total trading and other securities (b)
|
|
6
|
|
|
131
|
|
|
—
|
|
|
137
|
|
||||
Total investment securities
|
|
35
|
|
|
1,829
|
|
|
2
|
|
|
1,866
|
|
||||
Restricted cash in mutual funds
|
|
277
|
|
|
—
|
|
|
—
|
|
|
277
|
|
||||
Total
|
|
$
|
552
|
|
|
$
|
1,829
|
|
|
$
|
2
|
|
|
$
|
2,383
|
|
(a)
|
Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of
$1 million
at
December 31, 2015
, which is carried at cost.
|
(b)
|
The fair value of other securities totaled
$128 million
at
December 31, 2015
.
|
|
|
Fair Value Measurements Using
|
|
Total Carried At Fair Value
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents in mutual funds
|
|
$
|
236
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
236
|
|
Cash equivalents in certificates of deposit and commercial paper
|
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
||||
Investment securities:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and government sponsored entities
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
102
|
|
|
—
|
|
|
102
|
|
||||
Certificates of deposit and commercial paper
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Corporate debt
|
|
—
|
|
|
263
|
|
|
4
|
|
|
267
|
|
||||
RMBS
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
||||
CMBS
|
|
—
|
|
|
21
|
|
|
3
|
|
|
24
|
|
||||
CDO/ABS
|
|
—
|
|
|
63
|
|
|
—
|
|
|
63
|
|
||||
Total bonds
|
|
—
|
|
|
589
|
|
|
7
|
|
|
596
|
|
||||
Preferred stock
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total available-for-sale securities (a)
|
|
—
|
|
|
596
|
|
|
8
|
|
|
604
|
|
||||
Trading and other securities:
|
|
|
|
|
|
|
|
|
||||||||
Bonds:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and government sponsored entities
|
|
—
|
|
|
303
|
|
|
—
|
|
|
303
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||
Certificates of deposit and commercial paper
|
|
—
|
|
|
238
|
|
|
—
|
|
|
238
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||
Corporate debt
|
|
—
|
|
|
1,056
|
|
|
—
|
|
|
1,056
|
|
||||
RMBS
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
||||
CMBS
|
|
—
|
|
|
151
|
|
|
—
|
|
|
151
|
|
||||
CDO/ABS
|
|
—
|
|
|
512
|
|
|
—
|
|
|
512
|
|
||||
Total trading and other securities (b)
|
|
—
|
|
|
2,330
|
|
|
—
|
|
|
2,330
|
|
||||
Total investment securities
|
|
—
|
|
|
2,926
|
|
|
8
|
|
|
2,934
|
|
||||
Restricted cash in mutual funds
|
|
207
|
|
|
—
|
|
|
—
|
|
|
207
|
|
||||
Total
|
|
$
|
443
|
|
|
$
|
3,091
|
|
|
$
|
8
|
|
|
$
|
3,542
|
|
(a)
|
Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of
$1 million
at
December 31, 2014
, which is carried at cost.
|
(b)
|
The fair value of other securities totaled
$5 million
at
December 31, 2014
.
|
|
|
|
|
Net gains (losses) included in:
|
|
Purchases, sales, issues,
settlements (a)
|
|
Transfers
into
Level 3
|
|
Transfers
out of Level 3
(b)
|
|
Balance at end of period
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
(dollars in millions)
|
|
Balance at beginning of period
|
|
Other revenues
|
|
Other
comprehensive income (loss)
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Year Ended
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate debt
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
CMBS
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||||||
Total bonds
|
|
7
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||||||
Other long-term investments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Total
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
2
|
|
(a)
|
The detail of purchases and settlements is presented in the table below:
|
(dollars in millions)
|
|
Purchases
|
|
Settlements
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Year Ended
December 31, 2015 |
|
|
|
|
|
|
||||||
Investment securities:
|
|
|
|
|
|
|
||||||
Available-for-sale securities:
|
|
|
|
|
|
|
||||||
Bonds:
|
|
|
|
|
|
|
||||||
Corporate debt
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
Other long-term investments
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
(b)
|
During
2015
, we transferred
$3 million
of CMBS out of Level 3 primarily related to the greater observability of pricing inputs.
|
|
|
|
|
Net gains (losses) included in:
|
|
Purchases, sales, issues,
settlements (a)
|
|
Transfers
into
Level 3
(b)
|
|
Transfers
out of Level 3
(c)
|
|
Balance at end of period
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
(dollars in millions)
|
|
Balance at beginning of period
|
|
Other revenues
|
|
Other
comprehensive income (loss)
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Year Ended
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate debt
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
CMBS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||||
CDO/ABS
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||||
Total bonds
|
|
14
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
3
|
|
|
(1
|
)
|
|
7
|
|
|||||||
Other long-term investments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Total available-for-sale securities
|
|
15
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
3
|
|
|
(1
|
)
|
|
8
|
|
|||||||
Trading and other securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
RMBS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||||
CDO/ABS
|
|
7
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||||
Total trading and other securities
|
|
7
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|||||||
Total
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
$
|
8
|
|
(a)
|
“Purchases, sales, issues, and settlements” column consisted only of settlements, as the purchases were less than
$1 million
.
|
(b)
|
During
2014
, we transferred
$3 million
of CMBS available-for-sale securities and
$1 million
of RMBS other securities into Level 3 primarily related to the reduced observability of pricing inputs.
|
(c)
|
During
2014
, we transferred
$1 million
of CDO/ABS available-for-sale securities,
$1 million
of RMBS other securities, and
$1 million
of CDO/ABS trading and other securities out of Level 3 primarily related to the greater observability of pricing inputs.
|
|
|
|
Range (Weighted Average)
|
|
|
Valuation Technique(s)
|
Unobservable Input
|
December 31, 2015
|
December 31, 2014
|
Corporate debt
|
Discounted cash flows
|
Yield
|
—
|
1.05% (a)
|
RMBS
|
Discounted cash flows
|
Spread
|
665 bps (a)
|
736 bps (a) (b)
|
CMBS
|
Discounted cash flows
|
Spread
|
—
|
139 bps (a) (b)
|
Other long-term investments
|
Discounted cash flows and indicative valuations
|
Historical costs Nature of investment Local market conditions Comparables Operating performance Recent financing activity
|
N/A (c)
|
N/A (c)
|
(a)
|
At
December 31, 2015
and
2014
, RMBS consisted of
one
bond, which was less than
$1 million
. At
December 31, 2014
, corporate debt and CMBS also consisted of
one
bond.
|
(b)
|
During the first quarter of 2015, we identified that we incorrectly disclosed the weighted average ranges of our RMBS bond and CMBS bond as of December 31, 2014. The weighted average ranges of these bonds at December 31, 2014 have been corrected in the table above.
|
(c)
|
Not applicable.
|
|
|
Fair Value Measurements Using *
|
|
|
|
Impairment Charges
|
||||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At or for the Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate owned
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
3
|
|
Commercial mortgage loans
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
(2
|
)
|
|||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At or for the Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate owned
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
16
|
|
Commercial mortgage loans
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
(2
|
)
|
|||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
30
|
|
|
$
|
14
|
|
*
|
The fair value information presented in the table is as of the date the fair value adjustment was recorded.
|
|
|
|
Range (Weighted Average)
|
|
|
Valuation Technique(s)
|
Unobservable Input
|
December 31, 2015
|
December 31, 2014
|
Real estate owned
|
Market approach
|
Third-party valuation
|
N/A *
|
N/A *
|
Commercial mortgage loans
|
Market approach
Income approach Cost approach |
Local market conditions Nature of investment Comparable property sales Operating performance
|
N/A *
|
N/A *
|
*
|
Not applicable.
|
(dollars in millions except earnings (loss) per share)
|
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
684
|
|
|
$
|
428
|
|
|
$
|
413
|
|
|
$
|
406
|
|
Interest expense
|
|
215
|
|
|
171
|
|
|
171
|
|
|
158
|
|
||||
Provision for finance receivable losses
|
|
510
|
|
|
82
|
|
|
80
|
|
|
87
|
|
||||
Other revenues
|
|
103
|
|
|
51
|
|
|
56
|
|
|
51
|
|
||||
Other expenses
|
|
402
|
|
|
204
|
|
|
207
|
|
|
174
|
|
||||
Income (loss) before provision for (benefit from) income taxes
|
|
(340
|
)
|
|
22
|
|
|
11
|
|
|
38
|
|
||||
Provision for (benefit from) income taxes
|
|
(148
|
)
|
|
2
|
|
|
(8
|
)
|
|
7
|
|
||||
Net income (loss)
|
|
(192
|
)
|
|
20
|
|
|
19
|
|
|
31
|
|
||||
Net income attributable to non-controlling interests
|
|
27
|
|
|
31
|
|
|
31
|
|
|
31
|
|
||||
Net loss attributable to OneMain Holdings, Inc.
|
|
$
|
(219
|
)
|
|
$
|
(11
|
)
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(1.63
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
—
|
|
Diluted
|
|
(1.63
|
)
|
|
(0.08
|
)
|
|
(0.09
|
)
|
|
—
|
|
(dollars in millions except earnings (loss) per share)
|
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
413
|
|
|
$
|
484
|
|
|
$
|
533
|
|
|
$
|
552
|
|
Interest expense
|
|
157
|
|
|
180
|
|
|
192
|
|
|
205
|
|
||||
Provision for finance receivable losses
|
|
95
|
|
|
103
|
|
|
115
|
|
|
161
|
|
||||
Other revenues
|
|
(27
|
)
|
|
686
|
|
|
92
|
|
|
81
|
|
||||
Other expenses
|
|
172
|
|
|
190
|
|
|
171
|
|
|
168
|
|
||||
Income (loss) before provision for (benefit from) income taxes
|
|
(38
|
)
|
|
697
|
|
|
147
|
|
|
99
|
|
||||
Provision for (benefit from) income taxes
|
|
(13
|
)
|
|
235
|
|
|
44
|
|
|
31
|
|
||||
Net income (loss)
|
|
(25
|
)
|
|
462
|
|
|
103
|
|
|
68
|
|
||||
Net income attributable to non-controlling interests
|
|
21
|
|
|
35
|
|
|
31
|
|
|
16
|
|
||||
Net income (loss) attributable to OneMain Holdings, Inc.
|
|
$
|
(46
|
)
|
|
$
|
427
|
|
|
$
|
72
|
|
|
$
|
52
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.41
|
)
|
|
$
|
3.72
|
|
|
$
|
0.63
|
|
|
$
|
0.46
|
|
Diluted
|
|
(0.41
|
)
|
|
3.70
|
|
|
0.63
|
|
|
0.45
|
|
(a)
|
(1) The following consolidated financial statements of OneMain Holdings, Inc. and subsidiaries are included in Item 8:
|
Exhibits are listed in the Exhibit Index beginning on page
|
herein.
|
(b)
|
Exhibits
|
(c)
|
Schedule I - Condensed Financial Information of Registrant
|
(dollars in millions)
|
|
|
|
|
||||
December 31,
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1
|
|
|
$
|
6
|
|
Investment in subsidiaries
|
|
2,630
|
|
|
1,789
|
|
||
Note receivable from affiliate
|
|
134
|
|
|
239
|
|
||
Receivable from affiliate
|
|
1
|
|
|
—
|
|
||
Total assets
|
|
$
|
2,766
|
|
|
$
|
2,034
|
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Payable to affiliates
|
|
$
|
10
|
|
|
$
|
8
|
|
Deferred and accrued taxes
|
|
5
|
|
|
1
|
|
||
Total liabilities
|
|
15
|
|
|
9
|
|
||
Shareholders’ equity
|
|
2,751
|
|
|
2,025
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
2,766
|
|
|
$
|
2,034
|
|
|
|
|
|
|
|
Period
|
||||||
|
|
|
|
|
|
August 9, 2013
|
||||||
|
|
|
|
|
|
Through
|
||||||
(dollars in millions)
|
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||
|
|
|
|
|
|
|
||||||
Interest income from affiliate
|
|
$
|
13
|
|
|
$
|
8
|
|
|
$
|
2
|
|
Investment income
|
|
1
|
|
|
—
|
|
|
—
|
|
|||
Income before provision for income taxes
|
|
14
|
|
|
8
|
|
|
2
|
|
|||
Provision for income taxes
|
|
5
|
|
|
3
|
|
|
1
|
|
|||
Equity in undistributed net income (loss) from
subsidiaries
|
|
(251
|
)
|
|
500
|
|
|
37
|
|
|||
Net income (loss)
|
|
(242
|
)
|
|
505
|
|
|
38
|
|
|||
Other comprehensive income (loss), net of tax
|
|
(36
|
)
|
|
(25
|
)
|
|
1
|
|
|||
Comprehensive income (loss)
|
|
$
|
(278
|
)
|
|
$
|
480
|
|
|
$
|
39
|
|
|
|
|
|
|
|
Period
|
||||||
|
|
|
|
|
|
August 9, 2013
|
||||||
|
|
|
|
|
|
Through
|
||||||
(dollars in millions)
|
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||
|
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
||||||
Capital contributions to subsidiaries
|
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|||
Principal collections on note receivable from affiliate
|
|
96
|
|
|
—
|
|
|
—
|
|
|||
Cash advance on note receivable from affiliate
|
|
—
|
|
|
—
|
|
|
(230
|
)
|
|||
Net cash used for investing activities
|
|
(1,004
|
)
|
|
—
|
|
|
(230
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock, net of offering costs paid
|
|
976
|
|
|
—
|
|
|
236
|
|
|||
Net cash provided by financing activities
|
|
976
|
|
|
—
|
|
|
236
|
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
|
(5
|
)
|
|
—
|
|
|
6
|
|
|||
Cash and cash equivalents at beginning of period
|
|
6
|
|
|
6
|
|
|
—
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
||||||
Supplemental non-cash financing activities
|
|
|
|
|
|
|
||||||
Increase in payable to affiliate for stock offering costs
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
ONEMAIN HOLDINGS, INC.
|
||
|
|
||
|
By:
|
/s/
|
Scott T. Parker
|
|
|
|
Scott T. Parker
|
|
(Executive Vice President and Chief Financial Officer)
|
/s/
|
Jay N. Levine
|
|
/s/
|
Douglas L. Jacobs
|
|
Jay N. Levine
|
|
|
Douglas L. Jacobs
|
(President, Chief Executive Officer, and Director — Principal Executive Officer)
|
|
(Director)
|
||
|
|
|
|
|
/s/
|
Scott T. Parker
|
|
/s/
|
Anahaita N. Kotval
|
|
Scott T. Parker
|
|
|
Anahaita N. Kotval
|
(Executive Vice President and Chief Financial Officer — Principal Financial Officer)
|
|
(Director)
|
||
|
|
|
|
|
/s/
|
Sean P. Donnelly
|
|
/s/
|
Ronald M. Lott
|
|
Sean P. Donnelly
|
|
|
Ronald M. Lott
|
(Vice President and Senior Managing Director — Principal Accounting Officer)
|
|
(Director)
|
||
|
|
|
|
|
/s/
|
Wesley R. Edens
|
|
|
|
|
Wesley R. Edens
|
|
|
|
(Chairman of the Board and Director)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
|
Roy A. Guthrie
|
|
|
|
|
Roy A. Guthrie
|
|
|
|
(Director)
|
|
|
|
Exhibit
|
|
|
|
|
|
2.1
|
|
Stock Purchase Agreement, dated as of March 2, 2015, by and between Springleaf Holdings, Inc. and CitiFinancial Credit Company (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 3, 2015).
|
|
|
|
2.2 *
|
|
Closing Letter Agreement, dated as of November 12, 2015, by and among Citifinancial Credit Company, Springleaf Holdings, Inc., and Independence Holdings, LLC, filed herewith as Exhibit 2.2.
|
|
|
|
3 a.
|
|
Restated Certificate of Incorporation of Springleaf Holdings, Inc. Incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the period ended September 30, 2013.
|
|
|
|
a.1
|
|
Amendment to Restated Certificate of Incorporation of OneMain Holdings, Inc. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on November 17, 2015.
|
|
|
|
b.
|
|
Amended and Restated Bylaws of Springleaf Holdings, Inc. Incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q for the period ended September 30, 2013.
|
|
|
|
b.1
|
|
First Amendment to the Amended and Restated Bylaws of OneMain Holdings, Inc. (formerly known as Springleaf Holdings, Inc.), filed herewith as Exhibit 3.1.
|
|
|
|
4 a.
|
|
The following instruments are filed pursuant to Item 601(b)(4)(ii) of Regulation S-K, which requires with certain exceptions that all instruments be filed which define the rights of holders of the Company’s long-term debt and of our consolidated subsidiaries. In the aggregate, the outstanding issuances of debt at December 31, 2015 under the following Indenture exceeds 10% of the Company’s total assets on a consolidated basis:
|
|
|
|
(i)
|
|
Indenture dated as of May 1, 1999 from Springleaf Finance Corporation (formerly American General Finance Corporation) to Wilmington Trust Company (successor trustee to Citibank, N.A.). Incorporated by reference to Exhibit 4a.(i) to Springleaf Finance Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-06155).
|
|
|
|
(ii)
|
|
Indenture dated as of October 3, 2014 from SpringCastle America Funding, LLC, SpringCastle Credit Funding, LLC, and SpringCastle Finance, LLC to Wilmington Trust Company. Incorporated by reference to Exhibit 10 to our Current Report on Form 8-K dated October 6, 2014.
|
|
|
|
(iii)
|
|
Indenture, dated as of December 3, 2014, by Springleaf Finance Corporation, Springleaf Holdings, Inc., as Guarantor, and Wilmington Trust, National Association. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated December 3, 2014.
|
|
|
|
(iv)
|
|
Indenture, dated as of February 26, 2015, among Springleaf Funding Trust 2015-A, as Issuer, Springleaf Finance Corporation, as Servicer, and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated March 4, 2015.
|
|
|
|
b.
|
|
In accordance with Item 601(b)(4)(iii) of Regulation S-K, certain other instruments defining the rights of holders of the Company’s long-term debt and of our consolidated subsidiaries have not been filed as exhibits to this Annual Report on Form 10-K because the total amount of securities authorized and outstanding under each instrument does not exceed 10% of the total assets of the Company on a consolidated basis. We hereby agree to furnish a copy of each instrument to the Securities and Exchange Commission upon request.
|
|
|
|
10
|
|
Form of Indemnification Agreement. Incorporated by reference to Exhibit 10.1 to Amendment No. 2 to the Registration Statement on Form S-1 of Springleaf Holdings, Inc. (formerly known as Springleaf Holdings, LLC), filed October 1, 2013.
|
|
|
|
10.1 **
|
|
Springleaf Finance, Inc. Excess Retirement Income Plan dated as of January 1, 2011. Incorporated by reference to Exhibit 10.1 to Springleaf Finance Corporation’s Current Report on Form 8-K dated December 3, 2010.
|
|
|
|
10.2 **
|
|
Amendment to Springleaf Finance, Inc. Excess Retirement Income Plan effective as of December 19, 2012. Incorporated by reference to Exhibit 10.5 to Springleaf Finance Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012.
|
|
|
|
10.3 **
|
|
Employment Letter, dated October 1, 2012, for Minchung (Macrina) Kgil. Incorporated by reference to Exhibit 10.4 to Springleaf Finance Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012.
|
|
|
|
10.4 **
|
|
Employment Agreement by and among Springleaf Finance, Inc., Springleaf General Services Corporation and Jay Levine, dated as of September 30, 2013. Incorporated by reference to Exhibit 10.10 to Springleaf Finance Corporation’s Registration Statement on Form S-4 dated October 30, 2013.
|
|
|
|
10.5 **
|
|
Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan. Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 of Springleaf Holdings, Inc., filed October 15, 2013.
|
|
|
|
Exhibit
|
|
|
|
|
|
10.6 **
|
|
Form of Restricted Stock Award Agreement under the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan (Employees). Incorporated by reference to Exhibit 10.9 to Amendment No. 2 to the Registration Statement on Form S-1 of Springleaf Holdings, Inc., filed October 1, 2013.
|
|
|
|
10.7 **
|
|
Form of Restricted Stock Award Agreement under the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan (Non-Employee Directors). Incorporated by reference to Exhibit 10.10 to Amendment No. 2 to the Registration Statement on Form S-1 of Springleaf Holdings, Inc., filed October 1, 2013.
|
|
|
|
10.8 **
|
|
Form of Restricted Stock Unit Award Agreement under the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan. Incorporated by reference to Exhibit 10.16 to Amendment No. 4 to the Registration Statement on Form S-1 of Springleaf Holdings, Inc., filed October 11, 2013.
|
|
|
|
10.9
|
|
Stockholders Agreement between Springleaf Holdings, Inc. and Springleaf Financial Holdings, LLC. Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the period ended September 30, 2013.
|
|
|
|
10.10
|
|
Guaranty, dated December 30, 2013, by Springleaf Holdings, Inc. in respect of Springleaf Finance Corporation’s 8.250% Senior Notes due 2023. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated January 3, 2014.
|
|
|
|
10.11
|
|
Guaranty, dated December 30, 2013, by Springleaf Holdings, Inc. in respect of Springleaf Finance Corporation’s 7.750% Senior Notes due 2021. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated January 3, 2014.
|
|
|
|
10.12
|
|
Guaranty, dated December 30, 2013, by Springleaf Holdings, Inc. in respect of Springleaf Finance Corporation’s 6.00% Senior Notes due 2020. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K dated January 3, 2014.
|
|
|
|
10.13
|
|
Guaranty, dated December 30, 2013, by Springleaf Holdings, Inc. in respect of Springleaf Finance Corporation’s Senior Notes issued and outstanding on December 30, 2013 under the Indenture dated as of May 1, 1999, between SFC and Wilmington Trust, National Association (the successor trustee to Citibank N.A.). Incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K dated January 3, 2014.
|
|
|
|
10.14
|
|
Guaranty, dated December 30, 2013, by Springleaf Holdings, Inc. in respect of Springleaf Finance Corporation’s 60-year junior subordinated debenture. Incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K dated January 3, 2014.
|
|
|
|
10.15
|
|
Trust Guaranty, dated December 30, 2013, by Springleaf Holdings, Inc. in respect of Springleaf Finance Corporation’s trust securities. Incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K dated January 3, 2014.
|
|
|
|
10.16
|
|
OneMain Holdings, Inc. Amended and Restated Annual Leadership Incentive Plan, effective retroactively to January 1, 2016, filed herewith as Exhibit 10.16.
|
|
|
|
10.17**
|
|
Springleaf Holdings, Inc. Executive Severance Plan, effective March 16, 2015, and form of Severance Agreement and General Release. Incorporated by reference to Exhibit 10.17 to our Annual Report on Form 10-K for the year ended December 31, 2014.
|
|
|
|
10.18**
|
|
Second Amended and Restated Limited Liability Company Agreement of Springleaf Financial Holdings, LLC. Incorporated by reference to Exhibit 10.11 to Amendment No. 4 to the Registration Statement on Form S-1 of Springleaf Holdings, Inc. filed on October 11, 2013.
|
|
|
|
10.19**
|
|
Amendment No. 1 to Second Amended and Restated Limited Liability Company Agreement of Springleaf Financial Holdings, LLC, dated October 13, 2015, filed herewith as Exhibit 10.19.
|
|
|
|
10.20**
|
|
Amendment No. 2 to Second Amended and Restated Limited Liability Company Agreement of Springleaf Financial Holdings, LLC, dated October 26, 2015, filed herewith as Exhibit 10.20.
|
|
|
|
10.21**
|
|
Offer Letter by Springleaf Finance, Inc. and Springleaf General Services Corporation to Lawrence Skeats, dated as of January 3, 2014. Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
|
|
|
|
10.22**
|
|
Employment Agreement by and among Springleaf Finance, Inc., Springleaf General Services Corporation and Robert Hurzeler, dated as of April 13, 2015, to be effective as of January 1, 2016. Incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
|
|
|
|
10.23**
|
|
Employment Agreement by and among Springleaf Finance, Inc., Springleaf General Services Corporation and Timothy Ho, dated as of April 13, 2015, to be effective as of January 1, 2016. Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
|
|
|
|
Exhibit
|
|
|
|
|
|
10.24**
|
|
Employment Agreement by and among Springleaf Finance, Inc., Springleaf General Services Corporation and Scott T. Parker, dated as of October 12, 2015, filed herewith as Exhibit 10.24.
|
|
|
|
12.1
|
|
Computation of ratio of earnings to fixed charges
|
|
|
|
21.1
|
|
Subsidiaries of OneMain Holdings, Inc.
|
|
|
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certifications of the President and Chief Executive Officer of OneMain Holdings, Inc.
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certifications of the Executive Vice President and Chief Financial Officer of OneMain Holdings, Inc.
|
|
|
|
32.1
|
|
Section 1350 Certifications
|
|
|
|
101
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
|
*
|
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
|
**
|
Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b).
|
1.
|
Closing Balance Sheet
. Notwithstanding anything in the Agreement to the contrary, if the Closing Date occurs on or prior to November 15, 2015 (the period beginning at 12:00 a.m. on November 1, 2015 and ending at the Effective Time being referred to as the “
November Closing Period
”), the Closing Balance Sheet shall present the consolidated financial position of the Company and its Subsidiaries as at 11:59 p.m. on October 31, 2015 instead of as at the close of business on the Closing Date in accordance with the Agreement, and the calculation of the Total Closing Payment and any adjustment thereto shall for all purposes of the Agreement be based on such Closing Balance Sheet as of October 31, 2015. For the avoidance of doubt, all earnings and losses of the Company generated or incurred, as the case may be, during the November Closing Period shall be for the account of the Buyer.
|
2.
|
Closing Timing
. If the Closing Date occurs on or prior to November 15, 2015:
|
a.
|
Buyer and Seller agree that the Closing shall take place at the Effective Time. “
Effective Time
” means 12:01 a.m. (New York City time) on the first Sunday after the conditions set forth in Article 10 of the Agreement (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction of such conditions or, to the extent permissible, waiver of such conditions by the party or parties entitled to the benefit of those conditions, in each case, at the Closing) are satisfied or, to the extent permissible, waived by the party or parties entitled to the benefit
|
b.
|
In order to facilitate the Closing occurring on a day that is not a Business Day as contemplated by Section 2(a) above, Buyer and Seller agree that no later than the last Business Day prior to the anticipated Closing Date, (i) Buyer shall deposit an amount equal to the sum of the Estimated Total Closing Payment
plus
the Harmony Termination Payment (as defined below) (the “
Escrow Funds
”) into an escrow account (the “
Escrow Account
”) with Citibank N.A. or an Affiliate thereof (the “
Bank
”), and (ii) Buyer, Seller and the Bank will enter into an escrow agreement substantially in the form attached hereto as
Exhibit A
with the Bank as escrow agent pursuant to which, subject only to the occurrence of the Closing, (x) at the Effective Time, ownership and control of the Escrow Account will be transferred to Seller and (y) following the Effective Time, Seller will have the right to direct the transfer of the Escrow Funds to Seller, in full satisfaction of Buyer’s obligation to pay the Estimated Total Closing Payment and the Harmony Termination Payment to Seller at the Closing.
|
3.
|
Project Harmony
. Section 7.11(a) of the Seller Disclosure Schedule provides that, if Project Harmony is terminated (whether with respect to the Company or with respect to all participants in Project Harmony), then Buyer will be responsible for certain Harmony Termination Costs (as defined therein). Prior to the Closing Date, Seller shall terminate Project Harmony with respect to the Company (the “
Harmony Termination
”). Buyer and Seller acknowledge and agree that the amount of Harmony Termination Costs for which Buyer is responsible is equal to $9,330,000 (the “
Harmony Termination Payment
”). Buyer agrees to deliver the Harmony Termination Payment to Seller in the manner prescribed by Section 2 above in full satisfaction of Buyer’s obligations under Section 7.11(a) of the Seller Disclosure Schedule to make such payment and Seller agrees to, promptly after the Closing, deliver a portion of such payment to Fiserv in full satisfaction of the Company’s obligations to deliver a termination payment to Fiserv in connection with the Harmony Termination.
|
4.
|
Treatment of Certain Representations
. If the Closing Date occurs on or prior to November 15, 2015, then, solely for purposes of
Section 11.02(a)(i)
of the Agreement, any inaccuracy or breach of any representation or warranty made by Seller pursuant to the Agreement shall be measured as of October 31, 2015 as if
|
5.
|
Certain Covenants
. During the November Closing Period, Seller has not permitted the Company or any of its Subsidiaries to, and will not permit the Company or any of its Subsidiaries to, (i) incur any liability (other than any liability accruing under Intercompany Accounts (as defined below)) to or on behalf of Seller or any of its Affiliates, or make any payment or transfer (other than as contemplated by Section 6(e) of this letter agreement) to or for the benefit of Seller or any of its Affiliates, in each case, including by (a) declaring, setting aside or paying any dividend or other distribution to Seller or any of its Affiliates, (b) waiving or forgiving any amounts owed by Seller or any of its Affiliates to the Company or any of its Subsidiaries, (c) making any loans, advances or capital contributions to, or investments in, Seller or any of its Affiliates, (d) paying any management, monitoring or other similar fees or bonuses or payments of a similar nature to Seller or any of its Affiliates, (e) paying or incurring any M&A financial or M&A legal advisory fees, costs or expenses in connection with the Transaction or any fees, costs or expenses that are contingent upon the closing of the Transaction, including any bonuses payable to members of OneMain management upon the closing of the Transaction or (f) agreeing or committing to do any of the foregoing; or (ii) settle any material litigation or any Tax dispute;
provided
, that; the covenants in this Section 5 shall not limit the Company or any of its Subsidiaries from incurring any liability accruing under Intercompany Accounts to Seller or any of its Affiliates and all such liabilities shall be settled in accordance with Section 6(c) and 6(e) of this letter agreement;
provided, further
, that, except for any fees, costs or expenses set forth in Section 5(i)(e) of this letter agreement, during the November Closing Period, the Company and its Subsidiaries may continue to pay and incur costs and expenses relating to the Transaction or the other transactions contemplated by the Agreement or the other Transaction Agreements in a manner consistent with past practice, and any such actions shall not be considered to have been to or for the benefit of Seller or any of its Affiliates.
|
6.
|
Intercompany Accounts
. If the Closing Date occurs on or prior to November 15, 2015, then Section 7.04 of the Agreement shall be deemed deleted in its entirety and Buyer and Seller agree as follows:
|
a.
|
All intercompany agreements between Seller or any of its Affiliates, on the one hand, and the Company or any of its Subsidiaries, on the other hand, as of the Closing shall be terminated, except for any intercompany agreement set forth on Section 7.04 of the Seller Disclosure Schedule, which shall remain in full force and effect following the Closing.
|
b.
|
All intercompany accounts between Seller or any of its Affiliates, on the one hand, and the Company or any of its Subsidiaries, on the other hand (including amounts owed by the Company or its Subsidiaries to Seller or its Affiliates from time to time under the Citigroup Tax Sharing Agreement, as reflected in the “Income taxes payable” line item included in the Balance Sheet) (“
Intercompany Accounts
”) accruing on or prior to October 31, 2015 that have not been settled and paid in full in cash on or prior to October 31, 2015 shall be reflected on the Closing Balance Sheet, and the calculation of Closing Repayable Debt and any adjustment thereto pursuant to Sections 2.04 and 2.05 of the Agreement.
|
c.
|
All Intercompany Accounts accruing during the November Closing Period (and not settled prior to the Closing as contemplated by Section 6(e) of this letter agreement) shall survive the Closing and shall be settled and paid in full in cash after the Closing pursuant to the billing and invoice procedures set forth in Article 4 of the Transition Services Agreement or Reverse Transition Services Agreements, as applicable. For the avoidance of doubt, Intercompany Accounts accruing during the November Closing Period will not be taken into account in the Closing Balance Sheet or the calculation of the Total Closing Payment and any adjustment thereto pursuant to Sections 2.04 and 2.05 of the Agreement.
|
d.
|
Notwithstanding the foregoing, but subject to Section 2.04 and Section 2.05 of the Agreement and Section 6(b) and (c) of this letter agreement, upon payment of the Total Closing Payment at Closing, all Closing Repayable Debt as of 11:59 p.m. on October 31, 2015 with respect to which Seller or any of its Affiliates is the lender shall be deemed to have been settled and paid in full.
|
e.
|
Notwithstanding the foregoing, it is understood and agreed that, prior to the Closing, the Company may make one or more cash payments to Seller in the ordinary course consistent with past practice in settlement of certain allocations accruing during the November Closing Period under Intercompany Accounts that are cash settled in the ordinary course as part of the systemic practices of Seller and its Affiliates. For the avoidance of doubt, to the extent any Intercompany Accounts are settled prior to the Closing as contemplated by this Section 6(e), such amounts will not separately be settled after the Closing as contemplated by Section 6(c).
|
7.
|
Delivery of Closing Balance Sheet
. Seller will use its reasonable best efforts to cause to be prepared and delivered to Buyer within 45 days after the Closing Date (instead of within 60 days after the Closing Date) the Closing Balance Sheet and a schedule based on such Closing Balance Sheet setting forth Seller’s calculation of (i) Closing Stockholders Equity, (ii) the Purchase Price, (iii) Closing Repayable Debt and (iv) the Total Closing Payment.
|
8.
|
Conversion
. Buyer and Seller acknowledge that, as contemplated by
Section 8.02(e)
of the Agreement, on May 26, 2015, OneMain Financial Holdings, Inc., a Delaware corporation, was converted into OneMain Financial Holdings, LLC, a Delaware limited liability company (the “
Company LLC
”). From and after such conversion, (i) all references in the Agreement to the Company shall be deemed to refer to the Company LLC, (ii) all references in the Agreement to the Shares shall be deemed to refer to all of the outstanding limited liability company interests in the Company LLC and (iii) the representation in
Section 3.05(a)
of the Agreement shall be deemed to state that the authorized equity interests in the Company consist of an unlimited number of limited liability company interests in the Company LLC.
|
9.
|
Assignment
. In accordance with
Section 13.04
of the Agreement, (i) Buyer hereby assigns its rights and obligations under the Agreement (the “
Assignment
”) to Independence Holdings, LLC, a Delaware limited liability company and a Subsidiary of Buyer (“
Independence
”), effective immediately, (ii) Seller hereby acknowledges the Assignment and (iii) Independence hereby accepts the Assignment;
provided
that the Assignment shall not relieve Buyer of its obligations under the Agreement.
|
10.
|
Amendment of Seller Disclosure Schedule
. Section 7.04 of the Seller Disclosure Schedule is hereby amended and restated in its entirety to read as set forth on
Exhibit B
hereto.
|
11.
|
336(e) Agreement
. Buyer and Seller hereby agree, and agree to cause the Company and each Applicable Subsidiary, to enter into a 336(e) Agreement as soon as reasonably practicable after the Closing in accordance with clause (A) of Section 8.01(b)(i) of the Agreement.
|
12.
|
5% Ownership Events
. Clause (i) of Section 8.02(b) is hereby amended to (i) insert “the last Business Day prior to” in between “the Procedure Retest Date and” and “the Closing Date,” and (ii) delete “prior to Closing.”
|
13.
|
Effectiveness of this Letter Agreement
. For the avoidance of doubt, if the Closing Date does not occur on or prior to November 15, 2015, then this letter agreement shall automatically be void and of no further force and effect.
|
14.
|
Miscellaneous
. Except as expressly provided in this letter, the Agreement remains unchanged, and the Agreement as modified hereby remains in full force and effect. The provisions of
Article 13
of the Agreement shall apply
mutatis mutandis
to this letter.
|
CITIFINANCIAL CREDIT COMPANY
|
|||
By:
|
/s/ Laurie Hesslein
|
||
|
Name: Laurie Hesslein
|
|
|
|
Title: President and Chief Executive Officer
|
|
SPRINGLEAF HOLDINGS, INC.
|
||
By:
|
/s/ John C. Anderson
|
|
|
Name:
|
John C. Anderson
|
|
Title:
|
Executive Vice President,
Capital Markets
|
INDEPENDENCE HOLDINGS, LLC
|
||
By:
|
/s/ John C. Anderson
|
|
|
Name:
|
John C. Anderson
|
|
Title:
|
Executive Vice President
|
Name & Address
(including fax number) of Member
|
Initial Capital Contribution to Series A
|
Initial Capital Contribution to Series B
|
Additional Capital Contributions to Series A
|
Additional Capital Contributions to Series B
|
Number of Series A Common Units and
Aggregate Series A Common Unit Percentage
|
Number of Series B Common Units and
Aggregate Series B Common Unit Percentage
|
Number of Series A Incentive Units and
Aggregate Series A Incentive Unit Percentage
|
Number of Series B-1 Incentive Units and Aggregate Series B-1 Incentive Unit Percentage
|
Number of Series B-2 Incentive Units and Aggregate Series B-2 Incentive Unit Percentage
|
FCFI Acquisition LLC
c/o Fortress Investment Group LLC
1345 Avenue of the Americas,
46th Floor
New York, NY 10019
(F) (212) 798-6120
Attn: Mr. Randal A. Nardone
E-mail: rnardone@fortress.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(F) (212) 735-2000
Attention:Gregory A. Fernicola
Joseph A. Coco
|
|
$1,280,000,000
|
|
|
|
1,280,000 Units;
99.9955%
|
|
|
|
AIG Capital Corporation
c/o American International Group, Inc.
80 Pine Street
New York, NY 10005
(F) (212) 425-2175
Attn: General Counsel
and the Observer, as from time to time appointed by AIG Capital
E-mail: Jeff.Swiatek@aig.com
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(F) (212) 310-8007
Attention:Michael J. Aiello
Joseph T. Verdesca
|
$240,000,000
(Series A-1);
$80,000,000
(Series A-2)
|
|
|
|
240,000
(Series A-1);
80,000
(Series A-2);
99.994%
|
|
|
|
|
Jay Levine
Address, e-mail and fax number as shown in the Company’s personnel records
|
|
|
$13.333.33
(Series A-1)
|
$48,226.983
|
13.422
(Series A-1)
0.004%
|
35.561
0.0028%
|
2,000 Units;
66.66%
|
7,544 Units;
66.66%
|
|
John Anderson
Address, e-mail and fax number as shown in the Company’s personnel records
|
|
|
$6,666.76
(Series A-1)
|
$24,113.560
|
6.711
(Series A-1)
0.002%
|
17.781
0.0014%
|
1,000 Units;
33.33%
|
3,772 Units;
33.33%
|
|
Scott T. Parker
Address, e-mail and fax number as shown in the Company’s personnel records
|
|
|
|
$7,659.457
(deemed contribution attributable to purchased Units)
|
|
3.233
0.0003%
|
|
|
684 Units
100%
|
Name & Address
(including fax number) of Member
|
Initial Capital Contribution to Series A
|
Initial Capital Contribution to Series B
|
Additional Capital Contributions to Series A
|
Additional Capital Contributions to Series B
|
Number of Series A Common Units and
Aggregate Series A Common Unit Percentage
|
Number of Series B Common Units and
Aggregate Series B Common Unit Percentage
|
Number of Series A Incentive Units and
Aggregate Series A Incentive Unit Percentage
|
Number of Series B-1 Incentive Units and Aggregate Series B-1 Incentive Unit Percentage
|
Number of Series B-2 Incentive Units and Aggregate Series B-2 Incentive Unit Percentage
|
Number of Series B-3 Incentive Units and Aggregate Series B-3 Incentive Unit Percentage
|
FCFI Acquisition LLC
c/o Fortress Investment Group LLC
1345 Avenue of the Americas,
46th Floor
New York, NY 10019
(F) (212) 798-6120
Attn: Mr. Randal A. Nardone
E-mail: rnardone@fortress.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(F) (212) 735-2000
Attention:Gregory A. Fernicola
Joseph A. Coco
|
|
$1,280,000,000
|
|
|
|
1,280,000 Units;
99.9955%
|
|
|
|
|
AIG Capital Corporation
c/o American International Group, Inc.
80 Pine Street
New York, NY 10005
(F) (212) 425-2175
Attn: General Counsel
and the Observer, as from time to time appointed by AIG Capital
E-mail: Jeff.Swiatek@aig.com
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(F) (212) 310-8007
Attention:Michael J. Aiello
Joseph T. Verdesca
|
$240,000,000
(Series A-1);
$80,000,000
(Series A-2)
|
|
|
|
240,000
(Series A-1);
80,000
(Series A-2);
99.994%
|
|
|
|
|
|
Jay Levine
Address, e-mail and fax number as shown in the Company’s personnel records
|
|
|
$13.333.33
(Series A-1)
|
$44,775.703
|
13.422
(Series A-1)
0.004%
|
34.124
0.0027%
|
2,000 Units;
66.66%
|
7,240 Units;
66.66%
|
|
|
John Anderson
Address, e-mail and fax number as shown in the Company’s personnel records
|
|
|
$6,666.76
(Series A-1)
|
$22,387.920
|
6.711
(Series A-1)
0.002%
|
17.063
0.0013%
|
1,000 Units;
33.33%
|
3,620 Units;
33.33%
|
|
|
Name & Address
(including fax number) of Member
|
Initial Capital Contribution to Series A
|
Initial Capital Contribution to Series B
|
Additional Capital Contributions to Series A
|
Additional Capital Contributions to Series B
|
Number of Series A Common Units and
Aggregate Series A Common Unit Percentage
|
Number of Series B Common Units and
Aggregate Series B Common Unit Percentage
|
Number of Series A Incentive Units and
Aggregate Series A Incentive Unit Percentage
|
Number of Series B-1 Incentive Units and Aggregate Series B-1 Incentive Unit Percentage
|
Number of Series B-2 Incentive Units and Aggregate Series B-2 Incentive Unit Percentage
|
Number of Series B-3 Incentive Units and Aggregate Series B-3 Incentive Unit Percentage
|
Scott T. Parker
Address, e-mail and fax number as shown in the Company’s personnel records
|
|
|
|
$7,659.457
(deemed contribution attributable to purchased Units)
|
|
3.233
0.0003%
|
|
|
684 Units
100%
|
|
David Hogan
Address, e-mail and fax number as shown in the Company’s personnel records
|
|
|
|
$2,588.460 (deemed contribution attributable to purchased Units)
|
|
1.078
0.0001%
|
|
|
|
228 Units
50%
|
Bradford Borchers
Address, e-mail and fax number as shown in the Company’s personnel records
|
|
|
|
$2,588.460 (deemed contribution attributable to purchased Units)
|
|
1.078
0.0001%
|
|
|
|
228 Units
50%
|
Standard Benefits:
|
Relocation Allowance* - $5,000
|
Household Goods - rental truck or moving company
|
In-Transit Expenses (final trip)
|
Spousal Assistance - 3 Months Outplacement Benefits
|
Realtor Tour - 1 Day
|
Sale of Current House - Closing Costs (BVO)
|
New Home Closing Costs*
|
*
|
Indicates taxable payments that will be grossed up. Amounts shown are the net amounts.
|
Team Member Opt Out Benefits:
|
Instead of home sale - 3.5% of value*
|
Instead of home purchase - 1.5% of price*
|
*
|
Indicates taxable payments that will be grossed up.
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Years Ended December 31,
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before provision for (benefit from) income taxes
|
|
$
|
(269
|
)
|
|
$
|
905
|
|
|
$
|
78
|
|
|
$
|
(305
|
)
|
|
$
|
(360
|
)
|
Interest expense
|
|
715
|
|
|
734
|
|
|
920
|
|
|
1,075
|
|
|
1,285
|
|
|||||
Implicit interest in rents
|
|
13
|
|
|
10
|
|
|
10
|
|
|
12
|
|
|
12
|
|
|||||
Total earnings
|
|
$
|
459
|
|
|
$
|
1,649
|
|
|
$
|
1,008
|
|
|
$
|
782
|
|
|
$
|
937
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
715
|
|
|
$
|
734
|
|
|
$
|
920
|
|
|
$
|
1,075
|
|
|
$
|
1,285
|
|
Implicit interest in rents
|
|
13
|
|
|
10
|
|
|
10
|
|
|
12
|
|
|
12
|
|
|||||
Total fixed charges
|
|
$
|
728
|
|
|
$
|
744
|
|
|
$
|
930
|
|
|
$
|
1,087
|
|
|
$
|
1,297
|
|
Ratio of earnings to fixed charges
|
|
*
|
|
|
2.22
|
|
|
1.08
|
|
|
*
|
|
|
*
|
|
*
|
Earnings did not cover total fixed charges by
$269 million
in 2015,
$305 million
in 2012, and
$360 million
in 2011.
|
As of February 24, 2016
|
|
Jurisdiction of
Incorporation |
|
|
|
AGFC Capital Trust I
|
|
Delaware
|
American Health and Life Insurance Company
|
|
Texas
|
CommoLoCo, Inc.
|
|
Puerto Rico
|
CREDITHRIFT of Puerto Rico, Inc.
|
|
Puerto Rico
|
Eighteenth Street Funding LLC
|
|
Delaware
|
Eighth Street Funding LLC
|
|
Delaware
|
Eleventh Street Funding LLC
|
|
Delaware
|
Fifteenth Street Funding LLC
|
|
Delaware
|
First Avenue Funding LLC
|
|
Delaware
|
Fourteenth Street Funding LLC
|
|
Delaware
|
Fourth Avenue Funding LLC
|
|
Delaware
|
iLoan Trust 2015-A
|
|
Delaware
|
iLoan, Inc.
|
|
Delaware
|
Independence Holdings, LLC
|
|
Delaware
|
Interstate Agency, Inc.
|
|
Indiana
|
Merit Life Insurance Co.
|
|
Indiana
|
Midbrook Funding LLC
|
|
Delaware
|
Midbrook Funding Trust 2013-VFN1
|
|
Delaware
|
Mill River Funding Trust 2015-VFN1
|
|
Delaware
|
MorEquity, Inc.
|
|
Nevada
|
Nineteenth Street Funding LLC
|
|
Delaware
|
Ocean Finance and Mortgages Limited
|
|
England and Wales
|
Ocean Money Limited
|
|
England and Wales
|
OMF HY, Inc.
|
|
Delaware
|
OneMain Alliance, LLC
|
|
Texas
|
OneMain Assurance Services, LLC
|
|
Texas
|
OneMain Financial B1 Warehouse Trust
|
|
Delaware
|
OneMain Financial B2 Warehouse Trust
|
|
Delaware
|
OneMain Financial B3 Warehouse Trust
|
|
Delaware
|
OneMain Financial B4 Warehouse Trust
|
|
Delaware
|
OneMain Financial (HI), Inc.
|
|
Hawaii
|
OneMain Financial Funding II, LLC
|
|
Delaware
|
OneMain Financial Funding III, LLC
|
|
Delaware
|
OneMain Financial Funding IV, LLC
|
|
Delaware
|
OneMain Financial Funding, LLC
|
|
Delaware
|
OneMain Financial Group, LLC
|
|
Delaware
|
OneMain Financial Holdings, LLC
|
|
Delaware
|
OneMain Financial Insurance Agency of Florida, LLC
|
|
Florida
|
OneMain Financial Insurance Agency of Washington, LLC
|
|
Washington
|
OneMain Financial Issuance Trust 2014-1
|
|
Delaware
|
OneMain Financial Issuance Trust 2014-2
|
|
Delaware
|
OneMain Financial Issuance Trust 2015-1
|
|
Delaware
|
OneMain Financial Issuance Trust 2015-2
|
|
Delaware
|
OneMain Financial Issuance Trust 2015-3
|
|
Delaware
|
OneMain Financial Issuance Trust 2016-1
|
|
Delaware
|
OneMain Financial Services, Inc.
|
|
Minnesota
|
OneMain Financial Warehouse Trust
|
|
Delaware
|
OneMain Financial Warehouse, LLC
|
|
Delaware
|
OneMain Financial, Inc.
|
|
West Virginia
|
OneMain Remarketing, LLC
|
|
Delaware
|
Second Avenue Funding LLC
|
|
Delaware
|
Second Street Funding Corporation
|
|
Delaware
|
Service Bureau of Indiana, Inc.
|
|
Indiana
|
Seventeenth Street Funding LLC
|
|
Delaware
|
Sixteenth Street Funding LLC
|
|
Delaware
|
Sixth Street Funding LLC
|
|
Delaware
|
SpringCastle Acquisition LLC
|
|
Delaware
|
As of February 24, 2016
|
|
Jurisdiction of
Incorporation |
|
|
|
SpringCastle America Funding Trust
|
|
Delaware
|
SpringCastle America Funding, LLC
|
|
Delaware
|
SpringCastle America Trust
|
|
Delaware
|
SpringCastle America, LLC
|
|
Delaware
|
SpringCastle Credit Funding Trust
|
|
Delaware
|
SpringCastle Credit Funding, LLC
|
|
Delaware
|
SpringCastle Credit Trust
|
|
Delaware
|
SpringCastle Credit, LLC
|
|
Delaware
|
SpringCastle Finance Funding Trust
|
|
Delaware
|
SpringCastle Finance Funding, LLC
|
|
Delaware
|
SpringCastle Finance Trust
|
|
Delaware
|
SpringCastle Finance, LLC
|
|
Delaware
|
SpringCastle Holdings, LLC
|
|
Delaware
|
Springleaf Acquisition Corporation
|
|
Delaware
|
Springleaf Asset Holding II, Inc.
|
|
Delaware
|
Springleaf Asset Holding, Inc.
|
|
Delaware
|
Springleaf Asset Holdings, LLC
|
|
Delaware
|
Springleaf Auto Finance, Inc.
|
|
Delaware
|
Springleaf Auto Finance, Inc.
|
|
Tennessee
|
Springleaf Branch Holding Company
|
|
Delaware
|
Springleaf Consumer Holdings, LLC
|
|
Delaware
|
Springleaf Consumer Loan Holding Company
|
|
Delaware
|
Springleaf Consumer Loan Management Corporation
|
|
Delaware
|
Springleaf Consumer Loan of Pennsylvania, Inc.
|
|
Pennsylvania
|
Springleaf Consumer Loan of West Virginia, Inc.
|
|
West Virginia
|
Springleaf Consumer Loan, Inc.
|
|
Delaware
|
Springleaf Documentation Services, Inc.
|
|
California
|
Springleaf Finance Commercial Corp.
|
|
Indiana
|
Springleaf Finance Corporation
|
|
Indiana
|
Springleaf Finance Foundation, Inc.
|
|
Indiana
|
Springleaf Finance Management Corporation
|
|
Indiana
|
Springleaf Finance, Inc.
|
|
Indiana
|
Springleaf Finance, Inc.
|
|
Nevada
|
Springleaf Financial Asset Holdings, LLC
|
|
Delaware
|
Springleaf Financial Cash Services, Inc.
|
|
Delaware
|
Springleaf Financial Center Thrift Company
|
|
California
|
Springleaf Financial Center, Inc.
|
|
Indiana
|
Springleaf Financial Center, Incorporated
|
|
Indiana
|
Springleaf Financial Funding Company
|
|
Delaware
|
Springleaf Financial Funding Company II
|
|
Delaware
|
Springleaf Financial Funding II Holding Company
|
|
Delaware
|
Springleaf Financial Services of Alabama, Inc.
|
|
Delaware
|
Springleaf Financial Services of America, Inc.
|
|
Delaware
|
Springleaf Financial Services of America, Inc.
|
|
Iowa
|
Springleaf Financial Services of America, Inc.
|
|
North Carolina
|
Springleaf Financial Services of Arizona, Inc.
|
|
Arizona
|
Springleaf Financial Services of Arkansas, Inc.
|
|
Delaware
|
Springleaf Financial Services of Florida, Inc.
|
|
Florida
|
Springleaf Financial Services of Hawaii, Inc.
|
|
Hawaii
|
Springleaf Financial Services of Illinois, Inc.
|
|
Illinois
|
Springleaf Financial Services of Indiana, Inc.
|
|
Indiana
|
Springleaf Financial Services of Louisiana, Inc.
|
|
Louisiana
|
Springleaf Financial Services of Massachusetts, Inc.
|
|
Massachusetts
|
Springleaf Financial Services of New Hampshire, Inc.
|
|
Delaware
|
Springleaf Financial Services of New York, Inc.
|
|
New York
|
Springleaf Financial Services of North Carolina, Inc.
|
|
North Carolina
|
Springleaf Financial Services of Ohio, Inc.
|
|
Ohio
|
Springleaf Financial Services of Pennsylvania, Inc.
|
|
Pennsylvania
|
Springleaf Financial Services of South Carolina, Inc.
|
|
South Carolina
|
Springleaf Financial Services of Utah, Inc.
|
|
Utah
|
As of February 24, 2016
|
|
Jurisdiction of
Incorporation |
|
|
|
Springleaf Financial Services of Washington, Inc.
|
|
Washington
|
Springleaf Financial Services of Wisconsin, Inc.
|
|
Wisconsin
|
Springleaf Financial Services of Wyoming, Inc.
|
|
Wyoming
|
Springleaf Financial Services, Inc.
|
|
Delaware
|
Springleaf Financial Technology, Inc.
|
|
Indiana
|
Springleaf Funding Trust 2013-A
|
|
Delaware
|
Springleaf Funding Trust 2013-B
|
|
Delaware
|
Springleaf Funding Trust 2013-VFN1
|
|
Delaware
|
Springleaf Funding Trust 2014-A
|
|
Delaware
|
Springleaf Funding Trust 2015-A
|
|
Delaware
|
Springleaf Funding Trust 2015-B
|
|
Delaware
|
Springleaf General Services Corporation
|
|
Delaware
|
Springleaf Home Equity, Inc.
|
|
Delaware
|
Springleaf Home Equity, Inc.
|
|
West Virginia
|
Springleaf Mortgage Holding Company
|
|
Delaware
|
Springleaf Mortgage Management Corporation
|
|
Delaware
|
Springleaf Mortgage Services, Inc.
|
|
Delaware
|
Springleaf Properties, Inc.
|
|
Indiana
|
State Financial Services—Springleaf, Inc.
|
|
Texas
|
Sumner Brook Funding LLC
|
|
Delaware
|
Sumner Brook Funding Trust 2013-VFN1
|
|
Delaware
|
Tenth Street Funding LLC
|
|
Delaware
|
Third Avenue Funding LLC
|
|
Delaware
|
Third Street Funding LLC
|
|
Delaware
|
Thrift, Incorporated
|
|
Indiana
|
Triton Insurance Company
|
|
Texas
|
Twelfth Street Funding LLC
|
|
Delaware
|
Twentieth Street Funding LLC
|
|
Delaware
|
Twenty-First Street Funding LLC
|
|
Delaware
|
Twenty-Second Street Funding LLC
|
|
Delaware
|
Twenty-Sixth Street Funding LLC
|
|
Delaware
|
Twenty-Third Street Funding LLC
|
|
Delaware
|
Whitford Brook Funding LLC
|
|
Delaware
|
Whitford Brook Funding Trust 2014-VFN1
|
|
Delaware
|
Wilmington Finance, Inc.
|
|
Delaware
|
Yosemite Insurance Company
|
|
Indiana
|
1.
|
I have reviewed this Annual Report on Form 10-K of OneMain Holdings, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 29, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Jay N. Levine
|
|
|
|
Jay N. Levine
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of OneMain Holdings, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 29, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Scott T. Parker
|
|
|
|
Scott T. Parker
|
|
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Jay N. Levine
|
|
|
|
Jay N. Levine
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ Scott T. Parker
|
|
|
|
Scott T. Parker
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Date:
|
February 29, 2016
|
|
|