Harbinger Group Inc.
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SEC Filings

S-3ASR
HRG GROUP, INC. filed this Form S-3ASR on 02/04/2016
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3. Pro Forma Adjustments - FGL Merger
(a) As a result of the FGL Merger Agreement, the Company’s ownership interest in FGL has been classified as held for sale on the condensed combined balance sheet. These adjustments represent the components of FGL’s assets and liabilities included in the September 30, 2015 combined balance sheet. Such balances reflect intercompany transactions between FGL and other entities consolidated by HRG as they will remain and continue to exist following the closing of the FGL Merger. Below is a summary of the adjustments:
As of September 30, 2015
 
FGL Held for Sale Classification
 
Impact of intercompany transactions that will remain and continue to exist following the closing of the FGL Merger
 
Deferred tax adjustment (1)
 
Total adjustment due to FGL Merger Agreement
Assets:
 
 
 
 
 
 
 
 
Investments
 
$
(18,831.7
)
 
$

 
$

 
$
(18,831.7
)
Cash and cash equivalents
 
(501.8
)
 

 

 
(501.8
)
Receivables, net
 

 

 

 

Inventories, net
 

 

 

 

Accrued investment income
 
(190.7
)
 

 

 
(190.7
)
Reinsurance recoverable
 
(2,351.9
)
 

 

 
(2,351.9
)
Deferred tax assets
 
(194.7
)
 

 
328.8

 
134.1

Properties, including oil and gas properties, net
 
(14.4
)
 

 

 
(14.4
)
Goodwill
 

 

 

 

Intangibles, including DAC and VOBA, net
 
(1,048.6
)
 

 

 
(1,048.6
)
Other assets (including funds withheld assets)
 
(82.5
)
 
1,073.9

 

 
991.4

Assets held for sale
 
23,216.3

 
1,769.8

 

 
24,986.1

Total assets
 
$

 
$
2,843.7

 
$
328.8

 
$
3,172.5

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Insurance liabilities
 
$
(21,302.4
)
 
$
1,226.8

 
$

 
$
(20,075.6
)
Debt
 
(300.0
)
 
330.7

 

 
30.7

Accounts payable and other current liabilities
 
(43.7
)
 
1.6

 

 
(42.1
)
Employee benefit obligations
 

 

 

 

Deferred tax liabilities
 

 

 
328.8

 
328.8

Other liabilities
 
(502.9
)
 
11.0

 

 
(491.9
)
Liabilities held for sale
 
22,149.0

 
1,273.6

 

 
23,422.6

Total liabilities
 
$

 
$
2,843.7

 
$
328.8

 
$
3,172.5

(1) Included in the deferred tax assets and deferred tax liabilities above is an adjustment of $328.8 that represents the recognition of a deferred tax liability on the Company’s investment in FGL due to its classification as held for sale. The deferred tax liability resulted in a decrease in valuation allowance on deferred tax assets based on the Company’s change in judgment on realizability.
(b) As a result of the FGL Merger Agreement, FGL’s operations were classified as discontinued operations and the results of continuing operations are reported separately for all periods presented. These adjustments represent the components of income attributable to FGL included in the combined statement of operations for the years ended September 30, 2015, 2014 and 2013.
(c) This adjustment reflects non-controlling interest in FGL’s pro forma net income adjustments using a non-controlling interest factor of 19.5% and 19.6% for the years ended September 30, 2015 and 2014, respectively.
(d) Basic and diluted earnings per share were recalculated based on 198,142,363, 162,941,070 and 139,855,645 weighted-average common shares outstanding - basic and diluted for the years ended September 30, 2015, 2014 and 2013, respectively.

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