OneMain Holdings Inc

Results of Operations

The results of OMFC are consolidated into the results of OMH. Due to the nominal differences between OMFC and OMH, content throughout this section relates only to OMH. See Note 1 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information.

OMH’S CONSOLIDATED RESULTS

See the table below for OMH’s consolidated operating results and selected financial statistics. A further discussion of OMH’s operating results for our operating segment is provided under “Segment Results” below.

(a) See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.

(b) The calculations for the three and six months ended June 30, 2024 have been adjusted for policy alignment associated with the Foursight Acquisition.

Comparison of Consolidated Results for Three and Six Months Ended June 30, 2024 and 2023

Interest income increased $102 million or 9% and $182 million or 8% for the three and six months ended June 30, 2024 when compared to the same periods in 2023 due to growth in average net receivables.

Interest expense increased $53 million or 22% and $92 million or 19% for the three and six months ended June 30, 2024 when compared to the same periods in 2023 due to an increase in average debt to support our receivables growth and a higher average cost of funds.

Provision for finance receivable losses increased $96 million or 20% and $141 million or 16% for the three and six months ended June 30, 2024 when compared to the same periods in 2023 due to growth in net finance receivables largely attributed to the Foursight Acquisition and higher net charge-offs, partially offset by a larger build in the allowance for finance receivable losses in the prior year periods.

Other revenues decreased $11 million or 6% and $9 million or 3% for the three and six months ended June 30, 2024 when compared to the same periods in 2023 due to a net loss on repurchases and repayments of debt in the current period not present in the prior period.

Other expenses decreased $12 million or 3% for the three months ended June 30, 2024 when compared to the same period in 2023 due to regulatory settlements in the prior period and a decrease in salaries and benefits expense reflecting the cost benefits of the restructuring initiatives taken in the first quarter of 2024, partially offset by increases in general operating expenses due to growth in our receivables and our strategic investments in the business.

Other expenses increased $17 million or 2% for the six months ended June 30, 2024 when compared to the same period in 2023 due to restructuring charges in the current period associated with strategic cost-savings initiatives and an increase in general operating expenses due to growth in our receivables and our strategic investments in the business, partially offset by regulatory settlements in the prior period.

Income taxes decreased $14 million or 39% and $20 million or 23% for the three and six months ended June 30, 2024 when compared to the same periods in 2023 due to lower pretax income.

NON-GAAP FINANCIAL MEASURES

Management uses C&I adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment. C&I adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes restructuring charges, regulatory settlements, net gain or loss resulting from repurchases and repayments of debt, acquisition-related transaction and integration expenses, and other items and strategic activities. Management believes C&I adjusted pretax income (loss) is useful in assessing the profitability of our segment.

Management also uses C&I pretax capital generation, a non-GAAP financial measure, as a key performance measure of our segment. This measure represents C&I adjusted pretax income as discussed above and excludes the change in our C&I allowance for finance receivable losses in the period while still considering the C&I net charge-offs incurred during the period. Management believes that C&I pretax capital generation is useful in assessing the capital created in the period impacting the overall capital adequacy of the Company. Management believes that the Company’s reserves, combined with its equity, represent the Company’s loss absorption capacity.

Management utilizes both C&I adjusted pretax income (loss) and C&I pretax capital generation in evaluating our performance. Additionally, both of these non-GAAP measures are consistent with the performance goals established in OMH’s executive compensation program. C&I adjusted pretax income (loss) and C&I pretax capital generation are non-GAAP financial measures and should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with GAAP.

OMH’s reconciliations of income before income tax expense on a Segment Accounting Basis to C&I adjusted pretax income (non-GAAP) and C&I pretax capital generation (non-GAAP) were as follows: