Harbinger Group Inc. -SEC Filings

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SEC Filings

10-Q

HRG GROUP, INC. filed this Form 10-Q on 02/05/2016

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granted pursuant to FGL’s equity plans and those shares of common stock with respect to appraisal rights under Delaware law are properly exercised and not withdrawn. The completion of the FGL Merger is subject to the satisfaction of a number of closing conditions, including the receipt of regulatory approvals from the Iowa Insurance Division, New York Department of Financial Services, Vermont Department of Financial Regulation, China Insurance Regulatory Commission and the Committee on Foreign Investment in the United States. In the event that the FGL Merger Agreement is terminated, under specified circumstances, FGL may be required to pay a termination fee to Anbang and its subsidiaries of $51.5.

At December 31, 2015, the Company determined that as a result of the FGL Merger Agreement, the Company’s investment in FGL met the criteria established by ASC 360 to classify it as held for sale. The following table summarizes the major categories of assets and liabilities classified as held for sale in the Condensed Consolidated Balance Sheets at December 31, 2015 and September 30, 2015:



	December 31, 2015		September 30, 2015
Assets
Investments, including loans and receivables from affiliates	$	19,071.2	$	19,206.7
Cash and cash equivalents	567.9		501.8
Accrued investment income	180.9		191.2
Reinsurance recoverable	3,551.6		3,578.7
Deferred tax assets	248.3		194.7
Properties	15.5		14.4
Deferred acquisition costs and value of business acquired, net	1,230.6		1,048.6
Other assets	231.5		248.4
Total assets held for sale	$	25,097.5	$	24,984.5
Liabilities
Insurance reserves	$	22,748.5	$	22,560.1
Debt	299.2		298.3
Accounts payable and other current liabilities	35.7		43.7
Other liabilities	547.4		518.8
Total liabilities held for sale	$	23,630.8	$	23,420.9

The balances included on the Condensed Consolidated Balance Sheets and in the table above reflect transactions between the businesses held for sale and businesses held for use that are expected to continue to exist after the closing of the FGL Merger are not eliminated to appropriately reflect the continuing operations and balances held for sale. As a result, adjustments to the carrying value of certain intercompany assets recorded by FGL, were reversed upon consolidation in the Company’s Condensed Consolidated Financial Statements.

Below is a summary of the impact of such intercompany balances on the Condensed Consolidated Balance Sheets:



	December 31, 2015		September 30, 2015
Assets
Funds withheld receivable	$	1,007.1	$	1,058.0
Other assets	15.9		15.9
Assets held for sale	1,694.7		1,769.8
Total assets	$	2,717.7	$	2,843.7
Liabilities
Insurance reserves	$	1,198.0	$	1,226.8
Debt	249.0		330.7
Accounts payable and other current liabilities	—		1.6
Other liabilities	12.4		11.0
Liabilities held for sale	1,258.3		1,273.6
Total liabilities	$	2,717.7	$	2,843.7

The carrying value of the Company’s interest in FGL was lower than the fair value less cost to sell based on the sales price at December 31, 2015.

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