Segment and Geographic Information

Operating segments are defined as components of an enterprise that engage in business activity from which revenues are earned and expenses incurred for which discrete financial information is available that is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and in assessing performance.

Change in Reportable Segments

As a result of a change in how management views and operates our business, during the first quarter of 2016, we made changes in the composition of our operating segments. Financial information related to our Corporate Finance business is presented as a separate reportable segment. Previously, all such activity was included in Corporate and Other. Additionally, only the activity of our ongoing bulk acquisitions of mortgage loans and other originations and refinancing is presented in Mortgage Finance operations. The activity related to the management of our legacy mortgage portfolio is included in Corporate and Other. Our other operating segments, Automotive Finance operations and Insurance operations, were unchanged. Amounts for 2015 have been adjusted to conform to the current management view.

We report our results of operations on a line-of-business basis through four operating segments: Automotive Finance operations, Insurance operations, Mortgage Finance operations, and Corporate Finance operations, with the remaining activity reported in Corporate and Other. The operating segments are determined based on the products and services offered, and reflect the manner in which financial information is currently evaluated by management. The following is a description of each of our reportable operating segments.

Automotive Finance operations — Provides automotive financing services to consumers and automotive dealers. Our automotive financing services include providing retail installment sales financing, loans, and leases; offering term loans to dealers, financing dealer floorplans and other lines of credit to dealers; fleet financing, and vehicle remarketing services.

Insurance operations — Offers both consumer finance protection and insurance products sold primarily through the automotive dealer channel, and commercial insurance products sold to dealers. As part of our focus on offering dealers a broad range of consumer financial and insurance products, we provide vehicle service contracts, maintenance coverage, and guaranteed asset protection products. We also underwrite selected commercial insurance coverages, which primarily insure dealers' vehicle inventories.

Mortgage Finance operations — Includes the management of a held-for-investment consumer mortgage finance loan portfolio and is primarily comprised of high-quality jumbo and low-to-moderate income mortgage loans purchased or originated after January 1, 2009.

Corporate Finance operations — Primarily provides senior secured leveraged cash flow and asset-based loans to mostly U.S.-based middle market companies. The loans are used to support leveraged buyouts, mergers and acquisitions, debt refinancing, restructurings, and working capital.

Corporate and Other primarily consists of activity related to centralized corporate treasury activities such as management of the cash and corporate investment securities and loan portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, the amortization of the discount associated with new debt issuances and bond exchanges, and the residual impacts of our corporate funds-transfer pricing (FTP) and treasury asset liability management (ALM) activities. Corporate and Other also includes certain equity investments, the management of our legacy mortgage portfolio, and reclassifications and eliminations between the reportable operating segments. Additionally, beginning in June 2016, financial information related to TradeKing is included within Corporate and Other.

We utilize an FTP methodology for the majority of our business operations. The FTP methodology assigns charge rates and credit rates to classes of assets and liabilities based on expected duration and the benchmark rate curve plus an assumed credit spread. Matching duration allocates interest income and interest expense to these reportable segments so their respective results are insulated from interest rate risk. This methodology is consistent with our ALM practices, which includes managing interest rate risk centrally at a corporate level. The net residual impact of the FTP methodology is included within the results of Corporate and Other.

The information presented in our reportable operating segments and geographic areas tables that follow are based in part on internal allocations, which involve management judgment.

Financial information for our reportable operating segments is summarized as follows.



Three months ended September 30, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other			Consolidated (a)
2016
Net financing revenue (loss)	$	933	$	14	$	25	$	30	$	(6	)	$	996
Other revenue	74		264		—		4		46			388
Total net revenue	1,007		278		25		34		40			1,384
Provision for loan losses	270		—		1		3		(16		)	258
Total noninterest expense	418		222		16		16		63			735
Income (loss) from continuing operations before income tax expense	$	319	$	56	$	8	$	15	$	(7	)	$	391
Total assets	$	113,669	$	7,259	$	7,933	$	3,232	$	25,304		$	157,397
2015
Net financing revenue	$	870	$	16	$	17	$	22	$	45		$	970
Other revenue	63		233		—		10		26			332
Total net revenue	933		249		17		32		71			1,302
Provision for loan losses	201		—		3		4		3			211
Total noninterest expense	409		209		10		14		32			674
Income from continuing operations before income tax expense	$	323	$	40	$	4	$	14	$	36		$	417
Total assets	$	113,843	$	6,997	$	6,326	$	2,269	$	26,481		$	155,916


(a)	Net financing revenue after the provision for loan losses totaled $738 million and $759 million for the three months ended September 30, 2016, and 2015, respectively.



Nine months ended September 30, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other			Consolidated (a)
2016
Net financing revenue (loss)	$	2,758	$	44	$	71	$	87	$	(29	)	$	2,931
Other revenue	228		777		—		14		119			1,138
Total net revenue	2,986		821		71		101		90			4,069
Provision for loan losses	649		—		4		12		(15		)	650
Total noninterest expense	1,255		733		48		49		133			2,218
Income (loss) from continuing operations before income tax expense	$	1,082	$	88	$	19	$	40	$	(28	)	$	1,201
Total assets	$	113,669	$	7,259	$	7,933	$	3,232	$	25,304		$	157,397
2015
Net financing revenue	$	2,529	$	42	$	39	$	64	$	62		$	2,736
Other revenue (loss)	170		769		—		22		(175		)	786
Total net revenue (loss)	2,699		811		39		86		(113		)	3,522
Provision for loan losses	460		—		9		3		(5		)	467
Total noninterest expense	1,237		678		28		42		108			2,093
Income (loss) from continuing operations before income tax expense	$	1,002	$	133	$	2	$	41	$	(216	)	$	962
Total assets	$	113,843	$	6,997	$	6,326	$	2,269	$	26,481		$	155,916


(a)	Net financing revenue after the provision for loan losses totaled $2,281 million and $2,269 million for the nine months ended September 30, 2016, and 2015, respectively.

Information concerning principal geographic areas was as follows.



Three months ended September 30, ($ in millions)	Revenue (a)		Income from continuing operations before income tax expense		Net income (loss)
2016
Canada	$	22	$	10	$	9
Europe	—		—		(1		)
Latin America	—		—		(1		)
Total foreign (b)	22		10		7
Total domestic (c)	1,362		381		202
Total	$	1,384	$	391	$	209
2015
Canada	$	24	$	11	$	9
Europe	—		1		—
Total foreign (b)	24		12		9
Total domestic (c)	1,278		405		259
Total	$	1,302	$	417	$	268


(a)	Revenue consists of net financing revenue and total other revenue as presented in our Condensed Consolidated Financial Statements.


(b)	Our foreign operations as of September 30, 2016, and September 30, 2015, consist of our ongoing Insurance operations in Canada and our remaining international entities in wind-down.


(c)	Amounts include eliminations between our domestic and foreign operations.



Nine months ended September 30, ($ in millions)	Revenue (a)		Income from continuing operations before income tax expense		Net income (loss) (b)
2016
Canada	$	67	$	32	$	27
Europe	—		—		(4		)
Latin America	—		—		(1		)
Total foreign (c)	67		32		22
Total domestic (d)	4,002		1,169		797
Total	$	4,069	$	1,201	$	819
2015
Canada	$	76	$	35	$	30
Europe	1		5		28
Asia-Pacific	—		—		452
Total foreign (c)	77		40		510
Total domestic (d)	3,445		922		516
Total	$	3,522	$	962	$	1,026


(a)	Revenue consists of net financing revenue and total other revenue as presented in our Condensed Consolidated Financial Statements.


(b)	Gain (loss) realized on sale of discontinued operations are allocated to the geographic area in which the business operated.


(c)	Our foreign operations as of September 30, 2016, and September 30, 2015, consist of our ongoing Insurance operations in Canada and our remaining international entities in wind-down.


(d)	Amounts include eliminations between our domestic and foreign operations.