Harbinger Group Inc.
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SEC Filings

8-K
HRG GROUP, INC. filed this Form 8-K on 08/06/2015
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Over the nine month period ending June 30, 2015 (the "Fiscal 2015 Nine Months"), HRG received dividends of $51.4 million from its subsidiaries, which excludes $9.0 million of interest payments made by HRG on behalf of HGI Energy with respect to certain intercompany notes issued by HGI Energy to other HRG subsidiaries. In Fiscal 2015, the Company expects to receive approximately $66.7 million in dividends from its subsidiaries, which includes the $51.4 million already received.
HRG ended the Fiscal 2015 Nine Months with corporate cash and investments of approximately $393.7 million (primarily held at HRG and HGI Funding LLC), an increase of $141.1 million from the comparable balance of $252.6 million held as of March 31, 2015 due primarily to the proceeds from the Company's recent debt issuances as well as the receipt of a receivable related to a purchase price reduction claim, both of which are described below in the Additional Items section.
Net loss attributable to common and participating preferred stockholders of $75.6 million, or $0.38 per common share attributable to controlling interest during the Fiscal 2015 Quarter, compared to a Net income attributable to common and participating preferred stockholders of $49.0 million, or $0.28 per common share attributable to controlling interest during the Fiscal 2014 Quarter. The loss increased due primarily to the lower Operating income in the current period.

Additional Items:
Armored AutoGroup Acquisition
In May, Spectrum acquired Armored AutoGroup, the leader in the US automotive aftermarket appearance category, for $1.4 billion. The transaction was financed by Spectrum, in part, through a registered offering of $575 million of Spectrum common stock. HRG acquired 3,045,945 shares of Spectrum common stock, or 49% of the offering, for $281.8 million.
Debt
In transactions completed during the quarter, the Company issued $260.0 million in aggregate principal amount of new 7.875% Senior Secured Notes due 2019 (which, taken together with the existing notes issued under the same indenture, the "Senior Secured Notes") and $140.0 million in aggregate principal amount of new 7.75% Senior Notes (which, taken together with the existing notes issued under the same indenture, the "Senior Notes"). The proceeds were used, in part, to fund the Company's acquisition of the newly issued Spectrum common stock. The newly issued notes are incremental to, and will vote together with, the Senior Secured Notes and Senior Notes, respectively, in existence prior to the offering.
As of June 30, 2015, the Company had approximately $864.4 million in aggregate principal amount of Senior Secured Notes outstanding and approximately $890.0 million in aggregate principal amount Senior Notes outstanding. These amounts do not include the debt that has been issued at the Company's subsidiaries.
Receipt of Contingent Purchase Price Reduction
During the quarter, HRG received $61.6 million from OM Group (UK) Limited, reflecting a settlement by the parties with respect to a $50.0 million purchase price adjustment claim made by the Company in connection with its acquisition of FGL in 2011, as well as interest and attorney's fees, net of counter-claims. In the Fiscal 2015 Quarter, a $3.0 million Gain on contingent purchase price reduction was recorded to earnings.
Non-Cash Impairments
Energy
Pursuant to SEC reporting requirements, Compass performed a ceiling test at the end of the quarter utilizing simple average spot prices for the trailing twelve month period for proved reserves, which may not be indicative of actual market values or forward strip prices for those reserves. As a result of this test, Compass recorded a non-cash impairment of $102.8 million to its proved oil and natural gas properties during the quarter, due primarily to the decline in oil and natural gas prices. This impairment is reflected in the Operating income of the Energy segment for the Fiscal 2015 Quarter.

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