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Loans Receivable (Tables)

6 Months Ended

Jun. 30, 2019

Loans receivable consists of the following:



(In millions)	As of June 30, 2019
	Dealer Loans			Purchased Loans			Total
Loans receivable	$	4,466.0		$	2,407.6		$	6,873.6
Allowance for credit losses	(394.0		)	(95.6		)	(489.6		)
Loans receivable, net	$	4,072.0		$	2,312.0		$	6,384.0

(In millions)	As of December 31, 2018
	Dealer Loans			Purchased Loans			Total
Loans receivable	$	4,141.0		$	2,084.2		$	6,225.2
Allowance for credit losses	(378.1		)	(83.8		)	(461.9		)
Loans receivable, net	$	3,762.9		$	2,000.4		$	5,763.3

Summary of Changes in Loans Receivable

A summary of changes in Loans receivable is as follows:



(In millions)	For the Three Months Ended June 30, 2019
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	4,347.5		$	2,270.4		$	6,617.9
New Consumer Loan assignments (1)	608.8			346.4			955.2
Principal collected on Loans receivable	(520.1		)	(231.1		)	(751.2		)
Accelerated Dealer Holdback payments	15.7			—			15.7
Dealer Holdback payments	36.0			—			36.0
Transfers (2)	(21.6		)	21.6			—
Write-offs	(0.6		)	(0.1		)	(0.7		)
Recoveries (3)	0.3			0.4			0.7
Balance, end of period	$	4,466.0		$	2,407.6		$	6,873.6

(In millions)	For the Three Months Ended June 30, 2018
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	3,773.5		$	1,724.6		$	5,498.1
New Consumer Loan assignments (1)	604.3			300.3			904.6
Principal collected on Loans receivable	(480.5		)	(177.3		)	(657.8		)
Accelerated Dealer Holdback payments	16.8			—			16.8
Dealer Holdback payments	32.9			—			32.9
Transfers (2)	(14.7		)	14.7			—
Write-offs	(14.5		)	(0.9		)	(15.4		)
Recoveries (3)	0.6			0.3			0.9
Balance, end of period	$	3,918.4		$	1,861.7		$	5,780.1



(In millions)	For the Six Months Ended June 30, 2019
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	4,141.0		$	2,084.2		$	6,225.2
New Consumer Loan assignments (1)	1,327.8			732.8			2,060.6
Principal collected on Loans receivable	(1,051.4		)	(457.2		)	(1,508.6		)
Accelerated Dealer Holdback payments	28.0			—			28.0
Dealer Holdback payments	70.6			—			70.6
Transfers (2)	(47.3		)	47.3			—
Write-offs	(3.4		)	(0.2		)	(3.6		)
Recoveries (3)	0.7			0.7			1.4
Balance, end of period	$	4,466.0		$	2,407.6		$	6,873.6

(In millions)	For the Six Months Ended June 30, 2018
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	3,518.1		$	1,530.9		$	5,049.0
New Consumer Loan assignments (1)	1,313.5			642.7			1,956.2
Principal collected on Loans receivable	(959.2		)	(342.5		)	(1,301.7		)
Accelerated Dealer Holdback payments	29.4			—			29.4
Dealer Holdback payments	66.1			—			66.1
Transfers (2)	(33.1		)	33.1			—
Write-offs	(18.8		)	(3.0		)	(21.8		)
Recoveries (3)	2.4			0.5			2.9
Balance, end of period	$	3,918.4		$	1,861.7		$	5,780.1


(1)	The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.


(2)	Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance and the related allowance for credit losses balance to Purchased Loans in the period this forfeiture occurs.


(3)	Represents collections received on previously written off Loans.

Summary of Changes in Accretable Yield

A summary of changes in the accretable yield is as follows:



(In millions)	For the Three Months Ended June 30, 2019
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,361.2		$	865.0		$	2,226.2
New Consumer Loan assignments (1)	244.6			144.1			388.7
Accretion (2)	(224.8		)	(118.9		)	(343.7		)
Provision for credit losses	14.5			0.9			15.4
Forecast changes	3.4			9.6			13.0
Transfers (3)	(8.5		)	11.2			2.7
Balance, end of period	$	1,390.4		$	911.9		$	2,302.3

(In millions)	For the Three Months Ended June 30, 2018
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,191.1		$	653.8		$	1,844.9
New Consumer Loan assignments (1)	250.9			119.8			370.7
Accretion (2)	(202.6		)	(89.4		)	(292.0		)
Provision for credit losses	3.2			(1.4		)	1.8
Forecast changes	9.7			18.5			28.2
Transfers (3)	(5.7		)	7.1			1.4
Balance, end of period	$	1,246.6		$	708.4		$	1,955.0

(In millions)	For the Six Months Ended June 30, 2019
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,283.0		$	782.5		$	2,065.5
New Consumer Loan assignments (1)	535.9			304.1			840.0
Accretion (2)	(440.5		)	(227.3		)	(667.8		)
Provision for credit losses	26.1			3.8			29.9
Forecast changes	3.9			25.8			29.7
Transfers (3)	(18.0		)	23.0			5.0
Balance, end of period	$	1,390.4		$	911.9		$	2,302.3

(In millions)	For the Six Months Ended June 30, 2018
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,088.6		$	576.9		$	1,665.5
New Consumer Loan assignments (1)	540.3			267.6			807.9
Accretion (2)	(394.9		)	(169.5		)	(564.4		)
Provision for credit losses	21.9			3.3			25.2
Forecast changes	3.6			13.8			17.4
Transfers (3)	(12.9		)	16.3			3.4
Balance, end of period	$	1,246.6		$	708.4		$	1,955.0


(1)	The Dealer Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related advances paid to Dealers. The Purchased Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Purchase Program, less the related one-time payments made to Dealers.


(2)	Represents finance charges excluding the amortization of deferred direct origination costs for Dealer Loans.


(3)	Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance, the related allowance for credit losses balance and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.

Summary of Information Related to New Consumer Loan Assignments

Additional information related to new Consumer Loan assignments is as follows:



(In millions)	For the Three Months Ended June 30, 2019
	Dealer Loans		Purchased Loans		Total
Contractual net cash flows at the time of assignment (1)	$	955.6	$	753.3	$	1,708.9
Expected net cash flows at the time of assignment (2)	853.4		490.5		1,343.9
Fair value at the time of assignment (3)	608.8		346.4		955.2

(In millions)	For the Three Months Ended June 30, 2018
	Dealer Loans		Purchased Loans		Total
Contractual net cash flows at the time of assignment (1)	$	959.9	$	656.4	$	1,616.3
Expected net cash flows at the time of assignment (2)	855.2		420.1		1,275.3
Fair value at the time of assignment (3)	604.3		300.3		904.6

(In millions)	For the Six Months Ended June 30, 2019
	Dealer Loans		Purchased Loans		Total
Contractual net cash flows at the time of assignment (1)	$	2,087.1	$	1,603.6	$	3,690.7
Expected net cash flows at the time of assignment (2)	1,863.7		1,036.9		2,900.6
Fair value at the time of assignment (3)	1,327.8		732.8		2,060.6

(In millions)	For the Six Months Ended June 30, 2018
	Dealer Loans		Purchased Loans		Total
Contractual net cash flows at the time of assignment (1)	$	2,082.6	$	1,422.3	$	3,504.9
Expected net cash flows at the time of assignment (2)	1,853.8		910.3		2,764.1
Fair value at the time of assignment (3)	1,313.5		642.7		1,956.2

(1)

The Dealer Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments. The Purchased Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.


(2)	The Dealer Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make. The Purchased Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.


(3)	The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

Schedule of Consumer Loans Forecasted Collection Percentage

The following table compares our forecast of Consumer Loan collection rates as of June 30, 2019 with the forecasts as of March 31, 2019, as of December 31, 2018 and at the time of assignment, segmented by year of assignment:



	Forecasted Collection Percentage as of (1)								Current Forecast Variance from
Consumer Loan Assignment Year	June 30, 2019		March 31, 2019		December 31, 2018		Initial Forecast		March 31, 2019		December 31, 2018		Initial Forecast
2010	77.7	%	77.7	%	77.7	%	73.6	%	0.0	%	0.0	%	4.1	%
2011	74.8	%	74.8	%	74.7	%	72.5	%	0.0	%	0.1	%	2.3	%
2012	73.9	%	73.8	%	73.8	%	71.4	%	0.1	%	0.1	%	2.5	%
2013	73.5	%	73.5	%	73.5	%	72.0	%	0.0	%	0.0	%	1.5	%
2014	71.8	%	71.7	%	71.7	%	71.8	%	0.1	%	0.1	%	0.0	%
2015	65.5	%	65.4	%	65.4	%	67.7	%	0.1	%	0.1	%	-2.2	%
2016	64.2	%	64.1	%	64.2	%	65.4	%	0.1	%	0.0	%	-1.2	%
2017	65.1	%	65.2	%	65.5	%	64.0	%	-0.1	%	-0.4	%	1.1	%
2018	65.5	%	65.5	%	65.0	%	63.6	%	0.0	%	0.5	%	1.9	%
2019 (2)	64.7	%	64.1	%	—		64.2	%	0.6	%	—		0.5	%

(1)

Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates in the table.



	Forecasted Collection Percentage as of						Current Forecast Variance from
2019 Consumer Loan Assignment Period	June 30, 2019		March 31, 2019		Initial Forecast		March 31, 2019		Initial Forecast
January 1, 2019 through March 31, 2019	64.9	%	64.1	%	63.9	%	0.8	%	1.0	%
April 1, 2019 through June 30, 2019	64.5	%	—		64.4	%	—		0.1	%

Schedule of Additional Consumer Loans Forecasted Collection Percentage



	Forecasted Collection Percentage as of						Current Forecast Variance from
2019 Consumer Loan Assignment Period	June 30, 2019		March 31, 2019		Initial Forecast		March 31, 2019		Initial Forecast
January 1, 2019 through March 31, 2019	64.9	%	64.1	%	63.9	%	0.8	%	1.0	%
April 1, 2019 through June 30, 2019	64.5	%	—		64.4	%	—		0.1	%

Schedule of Consumer Loans Performance

The following table segments our Loan portfolio by the performance of the Loan pools:



(In millions)	As of June 30, 2019
	Loan Pool Performance Meets or Exceeds Initial Estimates						Loan Pool Performance Less than Initial Estimates
	Dealer Loans		Purchased Loans		Total		Dealer Loans			Purchased Loans			Total
Loans receivable	$	1,563.3	$	1,771.3	$	3,334.6	$	2,902.7		$	636.3		$	3,539.0
Allowance for credit losses	—		—		—		(394.0		)	(95.6		)	(489.6		)
Loans receivable, net	$	1,563.3	$	1,771.3	$	3,334.6	$	2,508.7		$	540.7		$	3,049.4

(In millions)	As of December 31, 2018
	Loan Pool Performance Meets or Exceeds Initial Estimates						Loan Pool Performance Less than Initial Estimates
	Dealer Loans		Purchased Loans		Total		Dealer Loans			Purchased Loans			Total
Loans receivable	$	1,355.1	$	1,392.1	$	2,747.2	$	2,785.9		$	692.1		$	3,478.0
Allowance for credit losses	—		—		—		(378.1		)	(83.8		)	(461.9		)
Loans receivable, net	$	1,355.1	$	1,392.1	$	2,747.2	$	2,407.8		$	608.3		$	3,016.1

Summary of Changes in Allowance for Credit Losses

A summary of changes in the allowance for credit losses is as follows:



(In millions)	For the Three Months Ended June 30, 2019
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	383.1		$	91.1		$	474.2
Provision for credit losses	14.5			0.9			15.4
Transfers (1)	(3.3		)	3.3			—
Write-offs	(0.6		)	(0.1		)	(0.7		)
Recoveries (2)	0.3			0.4			0.7
Balance, end of period	$	394.0		$	95.6		$	489.6

(In millions)	For the Three Months Ended June 30, 2018
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	379.3		$	69.1		$	448.4
Provision for credit losses	3.2			(1.4		)	1.8
Transfers (1)	(2.7		)	2.7			—
Write-offs	(14.5		)	(0.9		)	(15.4		)
Recoveries (2)	0.6			0.3			0.9
Balance, end of period	$	365.9		$	69.8		$	435.7

(In millions)	For the Six Months Ended June 30, 2019
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	378.1		$	83.8		$	461.9
Provision for credit losses	26.1			3.8			29.9
Transfers (1)	(7.5		)	7.5			—
Write-offs	(3.4		)	(0.2		)	(3.6		)
Recoveries (2)	0.7			0.7			1.4
Balance, end of period	$	394.0		$	95.6		$	489.6

(In millions)	For the Six Months Ended June 30, 2018
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	366.0		$	63.4		$	429.4
Provision for credit losses	21.9			3.3			25.2
Transfers (1)	(5.6		)	5.6			—
Write-offs	(18.8		)	(3.0		)	(21.8		)
Recoveries (2)	2.4			0.5			2.9
Balance, end of period	$	365.9		$	69.8		$	435.7


(1)	Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance and the related allowance for credit losses balance to Purchased Loans in the period this forfeiture occurs.


(2)	Represents collections received on previously written off Loans.