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 calculation for the nine months ended September 30, 2024 has been adjusted for policy alignment associated with the Foursight Acquisition.

Comparison of Consolidated Results for Three and Nine Months Ended September 30, 2024 and 2023

Interest income increased $115 million or 10% and $296 million or 9% for the three and nine months ended September 30, 2024 when compared to the same periods in 2023 due to growth in average net receivables.

Interest expense increased $34 million or 13% and $125 million or 17% for the three and nine months ended September 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 $102 million or 25% for the three months ended September 30, 2024 when compared to the same period in 2023 due to higher net charge-offs and an increase in the allowance for finance receivable losses driven by growth in our receivables, partially offset by an increase in recoveries in the current period.

Provision for finance receivable losses increased $243 million or 19% for the nine months ended September 30, 2024 when compared to the same period in 2023 due to higher net charge-offs related to growth in our receivables, including the impact of the Foursight Acquisition. The increase was partially offset by an increase in recoveries in the current period and a larger build in the allowance for finance receivable losses in the prior period.

Other revenues remained consistent for the three and nine months ended September 30, 2024 when compared to the same periods in 2023.

Other expenses increased $15 million or 3% for the three months ended September 30, 2024 when compared to the same period in 2023 driven by an increase in general operating expenses due to growth in our receivables and our strategic investments in the business.

Other expenses increased $32 million or 2% for the nine months ended September 30, 2024 when compared to the same period in 2023 driven by an increase in general operating expenses due to our strategic investments in the business, including the Foursight Acquisition and growth in our receivables, and restructuring charges in the current period associated with strategic cost-savings initiatives. The increase was partially offset by regulatory settlements in the prior period.

Income taxes decreased $2 million or 4% and $23 million or 16% for the three and nine months ended September 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, net gain or loss resulting from repurchases and repayments of debt, acquisition-related transaction and integration expenses, regulatory settlements, 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: