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8-K

HRG GROUP, INC. filed this Form 8-K on 02/05/2016

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8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 5, 2016

HRG GROUP, INC.

(Exact name of registrant as specified in its charter)




Delaware	1-4219	74-1339132
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

450 Park Avenue, 29th Floor, New York, New York		10022
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (212) 906-8555

Former name or former address, if changed since last report.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



q	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



q	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



q	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



q	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02.	Results of Operations and Financial Condition.

The following information, including the Exhibits referenced in this Item 2.02, to the extent the Exhibits discusses financial results of HRG Group, Inc. (the “Company”), are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

On February 5, 2016, the Company issued a press release (the “Press Release”) discussing, among other things, its financial results for its quarterly period ended December 31, 2015. A copy of the Press Release is furnished as Exhibit 99.1 to this Report.

As previously announced, the Company will host a conference call on February 5, 2016 to discuss its financial results for its quarterly period ended December 31, 2015. A copy of the presentation (the "Company Presentation") to be used during the conference call is attached hereto as Exhibit 99.2 to this Report.



Item 9.01	Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(d) Exhibits




Exhibit No.		Description

99.1		Press Release
99.2		Company Presentation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	HRG GROUP, INC.

	/s/ George C. Nicholson
	Name: George C. Nicholson
	Title: Senior Vice President, Chief Accounting Officer and Acting Chief Financial Officer

Dated: February 5, 2016

Exhibit

HRG Group, Inc. Reports First Quarter Results Achieves Consolidated Revenue Growth of 7.4% Over the First Quarter of 2015

NEW YORK - February 5, 2016 -- HRG Group, Inc. (“HRG” or the “Company”; NYSE: HRG), a diversified holding company focused on owning businesses that it believes can, in the long term, generate sustainable free cash flow or attractive returns on investment, today announced its consolidated results for the first quarter of Fiscal 2016 ended on December 31, 2015 (the “Fiscal 2016 Quarter”). The results include HRG's four segments:


•	Consumer Products, which consists of Spectrum Brands Holdings, Inc. and its subsidiaries (“Spectrum Brands”; NYSE: SPB);


•	Insurance, which consists of Front Street Re (Delaware) Ltd. and its subsidiaries (“Front Street”);


•	Energy, which consists of Compass Production Partners, LP and its subsidiaries (“Compass”); and


•	Asset Management, which consists of Salus Capital Partners, LLC (“Salus”), Energy & Infrastructure Capital, LLC (“EIC”) and CorAmerica Capital, LLC (“CorAmerica”).

"HRG reported very strong results this quarter, highlighted by solid consolidated topline growth at HRG overall as well as another excellent performance from the Consumer Products segment, which included record first quarter revenue and Adjusted EBITDA at Spectrum Brands," said Omar Asali, President and Chief Executive Officer of HRG. "We also made excellent progress this quarter executing against our strategic initiatives, which, at Fidelity & Guaranty Life, included advancing the transaction with Anbang; at Spectrum Brands, an increase of the quarterly dividend to $0.38 per SPB share; at Compass, substantially reducing its leverage while maintaining its profitability on an Adjusted EBITDA basis in spite of very challenging commodity market conditions; and overall, significantly reducing our operating expenses, including at the Asset Management segment.

"Looking ahead, we continue to anticipate that the Fidelity & Guaranty Life transaction will close in the upcoming second quarter of calendar year 2016, and expect to realize our return in a tax-efficient manner. We will outline our plan for our use of the proceeds following the closing, but we remain committed to deleveraging and pursuing strategies to maximize shareholder value.

"Looking further into the year, we expect the momentum in Spectrum Brands will continue in Fiscal 2016, and we anticipate record levels of annual revenue, Adjusted EBITDA and free cash flow from that business. We will continue to look for opportunities to grow this important segment throughout 2016 from both organic sources and attractive M&A, and will be supportive in their pursuits of growth."

Important Note Regarding the Presentation of our Insurance Segment:

During the quarter, Fidelity & Guaranty Life (“FGL”; NYSE: FGL) announced it had reached a definitive merger agreement under which Anbang Insurance Group Co., Ltd. and certain of its subsidiaries will acquire FGL for $26.80 per share in cash. At the date of the transaction, the Company owned 47 million shares in FGL, or an 80.4% interest as of December 31, 2015. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the second quarter of calendar year 2016.

As a result of this agreement, beginning with the first quarter of Fiscal 2016, the Company's investment in FGL has been classified as held for sale on the balance sheet and FGL's operations have been classified as discontinued operations, and results for all periods have been reclassified accordingly. Previously, FGL's results were reflected in the Insurance segment; however, all segment information has been adjusted to exclude FGL's results from this segment. Accordingly, the commentary for the Insurance segment in this release no longer reflects the performance of FGL in either the current or prior year quarters.

First Quarter Fiscal 2016 Consolidated Highlights:

•

HRG recorded total revenues of $1.2 billion for the Fiscal 2016 Quarter, an increase of $84.4 million, or 7.4%, as compared to the first quarter of fiscal 2015 (the "Fiscal 2015 Quarter"), as higher Consumer Products revenues, driven primarily by growth from acquisitions and organic revenue growth, more than offset the impact of unfavorable foreign exchange as well as the impact of net investment losses in Insurance.

•

Consolidated operating income of $35.3 million in the Fiscal 2016 Quarter increased $250.3 million as compared to the $215.0 million of operating loss reported in the Fiscal 2015 Quarter. The increase was due primarily to a lesser amount of impairments and bad debt expense in the current quarter, as described further in the Additional Items section. Excluding the impact of impairments and bad debt expense, operating income of $98.5 million in the Fiscal 2016 Quarter increased $63.7 million, or 183%, due primarily to the impact of the higher revenues in Consumer Products.


•	Results reflect a $21.1 million increase in interest expense relative to the Fiscal 2015 Quarter associated with higher overall debt levels, due primarily to financing activities completed in connection with accretive acquisitions.

•

HRG incurred a tax expense of $1.9 million in the Fiscal 2016 Quarter and a 4.3% effective tax rate as compared to a $6.0 million expense in the Fiscal 2015 Quarter and a (5.1)% effective tax rate. The decrease in tax expense in the current quarter was principally due to the recognition of tax benefits on a portion of current year losses from our Energy and Corporate and Other segments in the U.S. that are more likely than not to be realized based on the expected taxable gain from the FGL transaction.

•

Net income from continuing operations attributable to common stockholders of $11.1 million, or $0.06 per common share attributable to controlling interest during the Fiscal 2016 Quarter, as compared to a net loss from continuing operations attributable to common stockholders of $123.5 million, or $0.63 per common share attributable to controlling interest during the Fiscal 2015 Quarter. The improvement was due primarily to the higher operating income as well as a gain on the sale of certain oil and gas assets, as described more fully in the “Additional Items” section.


•	HRG ended Fiscal 2016 Quarter with corporate cash and investments of approximately $295.4 million (primarily held at HRG and HGI Funding LLC), a decrease of $35.9 million from the comparable balance of $331.3 million held as of September 30, 2015 due primarily to the vesting of previously-awarded variable compensation and related tax settlements.


•	In Fiscal 2016 Quarter, HRG received dividends of $14.8 million from its subsidiaries, comprised of $11.3 million and $0.4 million from the Consumer Products and Asset Management segments, respectively, as well as $3.1 million from FGL.

Additional Items:

Compass Transaction

During the Fiscal 2016 Quarter, Compass completed the previously-announced sale of its Holly, Waskom and Danville assets, which collectively accounted for approximately 38% of Energy segment revenues in Fiscal 2015. Proceeds from the sale were approximately $151.7 million, and the Company recorded a gain of $105.6 million to its Fiscal 2016 Quarter as a result of this transaction. Proceeds from the transaction, along with cash held on Compass' balance sheet, were used to reduce the borrowings under Compass' credit facility by $167.0 million during the quarter, and as a result, as of December 31^st, total borrowings outstanding under Compass' credit facility were $160.0 million.

Non-Cash Impairments and Bad Debt Expense

Energy

Pursuant to SEC reporting requirements, Compass performed a ceiling test at the end of the quarter utilizing simple average first day of the month 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 $54.4 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 2016 Quarter, and, if oil and gas prices do not increase, additional, non-cash impairments to properties may be required in Fiscal 2016. In the Fiscal 2015 Quarter, Compass recorded $190.0 million of impairments.

Asset Management

During the Fiscal 2016 Quarter, $8.4 million of impairments and bad-debt expense were recorded. As of December 31^st, Salus' portfolio of asset-based loans receivable was $153.1 million, a decline of $73.6 million from the comparable balance as of September 30^th,as Salus continues to execute the orderly wind down of its operations.

Discontinued Operations

During the Fiscal 2016 Quarter, the Company recorded a $35.6 million loss from discontinued operations to reflect the net impact of FGL's results. This amount includes $90.9 million of deferred tax expense, the majority of which will be offset by tax benefits the Company expects to realize in the subsequent quarters of Fiscal 2016.

Detail on First Quarter Segment Results:

Consumer Products:

Note: Adjusted EBITDA-Consumer Products, as described below, is a non-U.S. GAAP measure that excludes interest, income tax expense, certain purchase accounting fair value adjustments, restructuring and related charges, acquisition and integration related charges, depreciation and amortization expenses and stock-based compensation - see "Non-U.S. GAAP Measures" and the reconciliation of Adjusted EBITDA-Consumer Products to the Consumer Product segment's net income or loss in the tables accompanying this release.

Consumer Products reported consolidated net sales of $1,218.8 million for the Fiscal 2016 Quarter, an increase of $151.0 million, or 14.1%, as compared to the $1,067.8 million reported in the Fiscal 2015 Quarter. The increase was due primarily to the impact of newly acquired businesses and organic growth in certain product categories, including consumer batteries and hardware and home improvement, which more than offset the negative impact of $61.4 million from unfavorable foreign exchange as the Euro weakened relative to the US dollar during the quarter. Excluding the net impact of foreign exchange, sales increased $212.4 million, or 19.9%, as compared to the Fiscal 2015 Quarter, with higher sales in all product categories as compared to Fiscal 2015 except small appliances, which declined due primarily to lower volumes in the product category and increased competitor discounting during the holiday season. Excluding the impacts of both foreign exchange and $144.9 million in revenue from businesses acquired in Fiscal 2015, Consumer Products revenue increased $67.5 million, or 6.3%, on an organic basis over the Fiscal 2015 Quarter.

Gross profit, representing net Consumer Products sales minus Consumer Products cost of goods sold, increased $70.5 million, or 19.0%, to $440.7 million in the Fiscal 2016 Quarter. The increase was driven by the same factors that affected revenue. Gross profit margin, representing gross profit as a percentage of Consumer Products net sales, was 36.2% in the Fiscal 2016 Quarter, an increase of 150 basis points over the Fiscal 2015 Quarter, due, in part, to a shift toward higher margin products and continuing cost improvements.

Operating income increased $26.9 million, or 23.3%, to $142.5 million in the Fiscal 2016 Quarter, as compared to $115.6 million in the Fiscal 2015 Quarter, due primarily to higher profitability in acquired businesses.

Consumer Products adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA-Consumer Products”) was $207.1 million for the Fiscal 2016 Quarter, an increase of $31.3 million, or 17.8%, as compared to the Fiscal 2015 Quarter.

After the close of the Fiscal 2016 Quarter, on January 28, 2016, Spectrum Brands announced that its Board of Directors declared a quarterly dividend of $0.38 per share on Spectrum Brands’ common stock. This is a 15.2% increase in the quarterly dividend declared as compared to the $0.33 quarterly dividend paid per share in connection with the comparable period in Fiscal 2015. Over the past three years, the quarterly dividend Spectrum Brands has paid to its common stockholders has increased 52%.

For more information on HRG's Consumer Products segment, interested parties should read Spectrum Brands' announcements and public filings with the Securities and Exchange Commission, including Spectrum Brands' most recent quarterly earnings announcement, which may be accessed at www.spectrumbrands.com.

Insurance:

Insurance segment revenues declined $44.5 million in the Fiscal 2016 Quarter, from $34.5 million recorded in the Fiscal 2015 Quarter to a loss of $10.0 million. The decrease was due primarily to unrealized losses on underlying securities included in the funds withheld receivable, driven by an increase in risk-free interest rates and widening credit spreads during the quarter, which resulted in lower valuations of the fixed maturity securities in Front Street's funds withheld receivable.

The operating loss for the Fiscal 2016 Quarter reflected a decrease of $5.6 million from the operating income of $5.6 million reported for the Fiscal 2015 Quarter. The decline was due primarily to lower revenues, partially offset by lower insurance liability expenses. Operating expenses were flat compared to the prior year.

Energy:

Note: Adjusted EBITDA-Energy is a non-U.S. GAAP measure that excludes interest expense, depreciation, amortization and depletion, accretion of discount on asset retirement obligations, non-cash write-downs of assets, gain on remeasurement of investment to fair value, gain on sale of oil and gas properties, non-recurring other operating items, non-cash changes in the fair value of derivatives, cash settlements on derivative financial instruments and stock-based compensation - see “Non-U.S. GAAP Measures” and a reconciliation of Adjusted EBITDA-Energy to the Energy segment's operating income below.

Oil and natural gas revenues were $16.8 million for the Fiscal 2016 Quarter, a decrease of $17.5 million, or 51.0%, from the $34.3 million of revenues in the Fiscal 2015 Quarter. The decline was due primarily to lower prices for oil, natural gas and natural gas liquids, as the average sales price per barrel for oil and natural gas liquids declined by 39% and 40%, respectively, in Fiscal 2016 as compared to Fiscal 2015 Quarter. Revenue in both periods was further affected by the expected decreases in natural gas production as well as the disposition of the Holly, Waskom and Danville assets as of December 1, 2015.

Operating loss for the Fiscal 2016 Quarter was $64.5 million, an improvement of $130.5 million from the operating loss of $195.0 million recorded in the Fiscal 2015 Quarter. The improvement was due primarily to a lesser amount of ceiling test impairment in the current quarter as discussed in the "Additional Items" section. Excluding impairments, the operating loss of $10.1 million in the Fiscal 2016 Quarter compared to an operating loss of $5.0 million in the Fiscal 2015 Quarter, with the decline in profitability due primarily to the impact of the lower revenues.

Energy segment adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA-Energy") was $6.3 million for the Fiscal 2016 Quarter, a decrease of $6.6 million, or 51.2%, from the $12.9 million recorded in the Fiscal 2015 Quarter.

For the Fiscal 2016 Quarter, the Energy segment's production was 106 Mbbl of oil, 129 Mbbl of natural gas liquids and 5,115 Mmcf of natural gas. In the Fiscal 2016 Quarter, average daily production at Compass was 71 Mmcfe as compared to 85 Mmcfe in the Fiscal 2015 Quarter, with the decrease due primarily to the disposition of the Holly, Waskom and Danville assets as of December 1, 2015, as well as the impact of natural production declines.

Asset Management:

The Asset Management segment reported revenues of $6.0 million for the Fiscal 2016 Quarter, a decrease of $2.0 million, or 25.0%, from the $8.0 million reported in the Fiscal 2015 Quarter. The decrease was due primarily to a lower amount of interest income generated at Salus, which is in the process of winding down its operations and maximizing the recovery of capital from the existing loan portfolio. As of December 31, 2015, Salus, together with its affiliated co-lender Front Street Re, had $153.1 million of loans outstanding, net of allowance for credit losses of $43.7 million.

The Asset Management segment reported an operating loss of $9.1 million for the Fiscal 2016 Quarter, a decline of $7.9 million as compared to the operating loss of $1.2 million for the Fiscal 2015 Quarter. The decrease in profitability was due primarily to the impairments and bad debt expense described in the Additional Items section. Excluding the

impact of impairments and bad debt expense from both periods, the operating losses of $0.7 million in the Fiscal 2016 Quarter improved $0.9 million from for the Fiscal 2015 Quarter, reflecting a reduction in operating expenses at Salus.

Conference Call

HRG Group, Inc. will host a live conference call to discuss its results on Friday, February 5, 2016 at 10:00 a.m. Eastern Standard Time. To join the event, participants may call 1.844.856.8663 (U.S. callers) or 1.779.232.4737 (international callers), using conference ID number 79310320. Alternatively, a live webcast of the conference call can be accessed by interested parties through the Investor Relations section of the HRG Website, www.HRGgroup.com.

For those unable to listen to the live broadcast of the conference call, a telephonic replay of the call will be available through midnight February 8, 2016 by dialing 1.855.859.2056 (U.S. callers) or 1.404.537.3406 (international callers), ID number 79310320. A replay will also be available on the Company's website.

About HRG Group, Inc.

HRG Group, Inc. is a diversified holding company focused on owning businesses that the Company believes can, in the longer term, generate sustainable free cash flow or attractive returns on investment. The Company's principal operations are conducted through businesses that: offer branded consumer products (such as consumer batteries, residential locksets, residential builders' hardware, faucets, shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn, garden and home pest control products, personal insect repellents, and auto care products); offer life insurance and annuity products; provide asset-backed loans; and own energy assets. HRG is headquartered in New York and traded on the New York Stock Exchange under the symbol HRG. For more information on HRG, visit: www.HRGgroup.com.

Forward Looking Statements

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: This document contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements, including those statements regarding the completion of the merger between FGL and Anbang, the Company's use of proceeds from the FGL merger, expected dividends from our subsidiaries, our or our subsidiaries' capital needs and potential acquisitions, dispositions or other transactions by us or our subsidiaries, and expectations with respect to foreign exchange rates and commodity prices. Generally, forward-looking statements include information concerning possible or assumed future distributions from subsidiaries, other actions, events, results, strategies and expectations and are identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans," "seeks," "estimates," "projects," "may," "will," "could," "might," or "continues" or similar expressions. Such forward-looking statements are subject to risks and uncertainties that could cause actual results, events and developments to differ materially from those set forth in or implied by such statements. These statements are based on the beliefs and assumptions of HRG's management and the management of HRG's subsidiaries (including target businesses). Factors that could cause actual results, events and developments to differ include, without limitation: the ability of HRG subsidiaries to close previously announced transactions; the ability of HRG's subsidiaries (including, target businesses following their acquisition) to generate sufficient net income and cash flows to make upstream cash distributions; the decision of HRG subsidiaries' boards to make upstream cash distributions, which is subject to numerous factors such as restrictions contained in applicable financing agreements, state and regulatory restrictions and other relevant considerations as determined by the applicable board; HRG's liquidity, which may be impacted by a variety of factors, including the capital needs of HRG's current and future subsidiaries; capital market conditions; commodity market conditions; foreign exchange rates; HRG's and its subsidiaries' ability to identify, pursue or complete any suitable future acquisition or disposition opportunities, including realizing such transaction's expected benefits, efficiencies/cost avoidance or savings, income and margins, growth, economies of scale, streamlined/combined operations, economic performance and conditions to, and the timetable for, completing applicable financial reporting requirements; litigation; potential and contingent liabilities; management's plans; changes in regulations; taxes; and the risks that may affect the performance of the operating subsidiaries of HRG and those factors listed under the caption "Risk Factors" in HRG's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission. All forward-looking statements described herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Neither

HRG nor any of its affiliates undertake any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operation results, except as required by law.

Non-U.S. GAAP Measures

Management believes that certain non-U.S. GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Reconciliations of such measures to the most comparable U.S. GAAP measures are included herein.

Adjusted EBITDA is a non-GAAP financial measure used in our Consumer Products (“Adjusted EBITDA - Consumer Products”) and Energy (“Adjusted EBITDA - Energy”) segments and one of the measures used for determining Spectrum Brands and Compass’ debt covenant compliance. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) represent net income adjusted to exclude interest expense, income taxes and depreciation, depletion and amortization. Adjusted EBITDA excludes certain items that are unusual in nature or not comparable from period to period and other non-recurring operating items, accretion of discount on asset retirement obligations, non-cash changes in the fair value of derivatives, non-cash write-downs of assets, and stock-based compensation. Adjusted EBITDA is a metric used by management and frequently used by the financial community and provides insight into an organization's operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA can also be a useful measure of a company’s ability to service debt. Computations of EBITDA and Adjusted EBITDA may differ from computations of similarly titled measures of other companies due to differences in the inclusion or exclusion of items in our computations as compared to those of others.

While management believes that non-U.S. GAAP measurements are useful supplemental information, such adjusted results are not intended to replace U.S. GAAP financial results and should be read in conjunction with those U.S. GAAP results.

For further information contact:



HRG Group, Inc. James Hart, SVP Communications Tel: 212.906.8542 Email: [email protected]

Source: HRG Group, Inc.

(Tables Follow)

HRG GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)



	December 31, 2015			September 30, 2015
	(Unaudited)			(As Adjusted)
ASSETS
Investments	$	155.6		$	278.9
Cash and cash equivalents	576.4			695.2
Funds withheld receivables	1,664.0			1,710.1
Receivables, net	636.9			632.9
Inventories, net	867.7			780.8
Deferred tax assets	303.4			51.2
Properties, including oil and natural gas properties, net	664.3			798.4
Goodwill	2,478.1			2,487.4
Intangibles	2,445.3			2,480.3
Other assets	143.6			134.3
Assets of business held for sale	25,097.5			24,984.5
Total assets	$	35,032.8		$	35,034.0

LIABILITIES AND EQUITY
Insurance reserves	$	1,827.1		$	1,856.0
Debt	6,285.4			6,310.5
Accounts payable and other current liabilities	854.1			1,095.6
Employee benefit obligations	84.7			92.9
Deferred tax liabilities	905.0			574.5
Other liabilities	72.7			95.5
Liabilities of business held for sale	23,630.8			23,420.9
Total liabilities	33,659.8			33,445.9

Commitments and contingencies

HRG Group, Inc. shareholders' equity:
Common stock	2.0			2.0
Additional paid-in capital	1,430.3			1,458.5
Accumulated deficit	(867.0		)	(833.1		)
Accumulated other comprehensive loss	(174.3		)	(40.7		)
Total HRG Group, Inc. shareholders' equity	391.0			586.7
Noncontrolling interest	982.0			1,001.4
Total shareholders' equity	1,373.0			1,588.1
Total liabilities and equity	$	35,032.8		$	35,034.0

HRG GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)



	Three months ended December 31,
	2015			2014
	(Unaudited)
Revenues:
Net consumer and other product sales	$	1,218.8		$	1,088.8
Oil and natural gas	16.8			34.3
Net investment income	20.3			24.1
Net investment losses	(32.0		)	(6.5		)
Insurance and investment product fees and other	2.3			1.1
Total revenues	1,226.2			1,141.8
Operating costs and expenses:
Cost of consumer products and other goods sold	778.1			712.0
Oil and natural gas direct operating costs	17.1			20.5
Benefits and other changes in policy reserves	0.8			17.8
Selling, acquisition, operating and general expenses	308.1			336.2
Impairments and bad debt expense	63.2			249.8
Amortization of intangibles	23.6			20.5
Total operating costs and expenses	1,190.9			1,356.8
Operating income (loss)	35.3			(215.0		)
Interest expense	(97.5		)	(76.4		)
Gain on sale of oil and gas properties	105.6			—
Gain upon gaining control of equity method investment	—			141.2
Other income, net	1.1			32.8
Income (loss) from continuing operations before income taxes	44.5			(117.4		)
Income tax expense	1.9			6.0
Net income (loss) from continuing operations	42.6			(123.4		)
(Loss) income from discontinued operations, net of tax	(35.6		)	17.0
Net income (loss)	7.0			(106.4		)
Less: Net income attributable to noncontrolling interest	40.9			3.4
Net loss attributable to controlling interest	$	(33.9	)	$	(109.8	)

Amounts attributable to controlling interest:
Net income (loss) from continuing operations	$	11.1		$	(123.5	)
Net (loss) income from discontinued operations	(45.0		)	13.7
Net loss attributable to controlling interest	$	(33.9	)	$	(109.8	)

Net loss per common share attributable to controlling interest:
Basic income (loss) from continuing operations	$	0.06		$	(0.63	)
Basic (loss) income from discontinued operations	(0.23		)	0.07
Basic	$	(0.17	)	$	(0.56	)

Diluted income (loss) from continuing operations	$	0.06		$	(0.63	)
Diluted (loss) income from discontinued operations	(0.23		)	0.07
Diluted	$	(0.17	)	$	(0.56	)

HRG GROUP, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(In millions)



	Fiscal Quarter
	2016			2015

Revenues:
Consumer Products	$	1,218.8		$	1,067.8
Insurance	(10.0		)	34.5
Energy	16.8			34.3
Asset Management	6.0			8.0
Intersegment elimination	(5.4		)	(23.8		)
Consolidated segment revenues	1,226.2			1,120.8
Corporate and Other	—			21.0
Total revenues	$	1,226.2		$	1,141.8

Operating income (loss):
Consumer Products	$	142.5		$	115.6
Insurance	—			5.6
Energy	(64.5		)	(195.0		)
Asset Management	(9.1		)	(1.2		)
Intersegment elimination	(19.0		)	(16.2		)
Total segment operating income (loss)	49.9			(91.2		)
Corporate and Other and eliminations	(14.6		)	(123.8		)
Consolidated operating income (loss)	35.3			(215.0		)
Interest expense	(97.5		)	(76.4		)
Gain on sale of oil and gas properties	105.6			—
Gain upon gaining control of equity method investment	—			141.2
Other income, net	1.1			32.8
Income (loss) from continuing operations before income taxes	$	44.5		$	(117.4	)

HRG GROUP, INC. AND SUBSIDIARIES

ADJUSTED EBITDA AND ADJUSTED OPERATING INCOME RECONCILIATIONS

(In millions)

The table below shows the adjustments made to the reported net income of the Consumer Products segment to calculate its Adjusted EBITDA (unaudited):



	Fiscal Quarter
Reconciliation to reported net income:	2016		2015
Reported net income - Consumer Products segment	$	73.7	$	50.0
Add back:
Interest expense	58.4		44.4
Income tax expense	6.9		20.5
Depreciation and amortization, net of accelerated depreciation
Depreciation of properties	23.0		18.6
Amortization of intangibles	23.6		20.5
EBITDA - Consumer Products segment	185.6		154.0
Stock-based compensation	10.1		5.4
Restructuring and related charges	1.2		7.4
Acquisition and integration related charges	9.9		8.1
Other	0.3		0.9
Adjusted EBITDA - Consumer Products segment	$	207.1	$	175.8

The table below shows the adjustments made to the reported net income (loss) of the Energy segment to calculate its Adjusted EBITDA (unaudited):



	Fiscal Quarter
Reconciliation to reported net income (loss):	2016			2015
Reported net income (loss) - Energy segment	$	38.3		$	(39.5	)
Interest expense	4.6			4.5
Depreciation, amortization and depletion	6.5			13.5
EBITDA - Energy segment	49.4			(21.5		)
Accretion of discount on asset retirement obligations	0.6			0.6
Impairments and bad debt expense	54.4			190.0
Gain on sale of oil and gas properties	(105.6		)	—
Gain on remeasurement of investment to fair value	—			(141.2		)
Non-recurring other operating items	1.0			1.0
Gain on derivative financial instruments	(1.8		)	(18.7		)
Cash settlements on derivative financial instruments	8.3			2.4
Stock based compensation expense	—			0.3
Adjusted EBITDA - Energy segment	$	6.3		$	12.9

ex9921q16conferencecalls

February 5th, 2016 1st Quarter Conference Call Private & Confidential

2 Agenda  Quarterly Overview & Operating Highlights Omar Asali, President and CEO  Questions & Answers Omar Asali, President and CEO George Nicholson, Chief Financial Officer (NYSE: HRG)

Safe Harbor Disclaimer 3 Limitations on the Use of Information. This company overview has been prepared by HRG Group Inc. (the “Company” or “HRG”) solely for informational purposes, and not for the purpose of updating any information or forecast with respect to the Company or any of its affiliates or any other purpose. This information is subject to change without notice and should not be relied upon for any purpose. Neither the Company nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein and no such party shall have any liability for such information. In furnishing this information and making any oral statements, neither the Company nor any of its affiliates undertakes any obligation to provide the recipient with access to any additional information or to update or correct such information. The information herein or in any oral statements (if any) are prepared as of the date hereof or as of such earlier dates as presented herein; neither the delivery of this document nor any other oral statements regarding the affairs of Company or its affiliates shall create any implication that the information contained herein or the affairs of the Company or its affiliates have not changed since the date hereof or after the dates presented herein (as applicable); that such information is correct as of any time subsequent to its date; or that such information is an indication regarding the performance of the Company or any of its affiliates since the time of the Company’s or such affiliates latest public filings or disclosure. These materials and any related oral statements are not all-inclusive and shall not be construed as legal, tax, investment or any other advice. You should consult your own counsel, accountant or business advisors. Special Note Regarding Forward-Looking Statements. This document contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements, including those statements regarding the completion of the merger between FGL and Anbang, the Company’s use of proceeds from the FGL merger, expected dividends from our subsidiaries, our or our subsidiaries' capital needs and potential acquisitions, dispositions or other transactions by us or our subsidiaries, and expectations with respect to foreign exchange rates and commodity prices. Generally, forward-looking statements include information concerning possible or assumed future distributions from subsidiaries, other actions, events, results, strategies and expectations and are identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans," "seeks," "estimates," "projects," "may," "will," "could," "might," or "continues" or similar expressions. Such forward-looking statements are subject to risks and uncertainties that could cause actual results, events and developments to differ materially from those set forth in or implied by such statements. These statements are based on the beliefs and assumptions of HRG's management and the management of HRG's subsidiaries (including target businesses). Factors that could cause actual results, events and developments to differ include, without limitation: the ability of HRG subsidiaries to close previously announced transactions; the ability of HRG's subsidiaries (including, target businesses following their acquisition) to generate sufficient net income and cash flows to make upstream cash distributions; the decision of HRG subsidiaries' boards to make upstream cash distributions, which is subject to numerous factors such as restrictions contained in applicable financing agreements, state and regulatory restrictions and other relevant considerations as determined by the applicable board; HRG's liquidity, which may be impacted by a variety of factors, including the capital needs of HRG's current and future subsidiaries; capital market conditions; commodity market conditions; foreign exchange rates; HRG's and its subsidiaries' ability to identify, pursue or complete any suitable future acquisition or disposition opportunities, including realizing such transaction's expected benefits, efficiencies/cost avoidance or savings, income and margins, growth, economies of scale, streamlined/combined operations, economic performance and conditions to, and the timetable for, completing applicable financial reporting requirements; litigation; potential and contingent liabilities; management's plans; changes in regulations; taxes; and the risks that may affect the performance of the operating subsidiaries of HRG and those factors listed under the caption "Risk Factors" in HRG's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission. All forward-looking statements described herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Neither HRG nor any of its affiliates undertake any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operation results, except as required by law. Important Note Regarding the Presentation of our Insurance Segment: During the quarter, FGL announced it had reached a definitive merger agreement under which Anbang Insurance Group Co., Ltd. and certain of its subsidiaries will acquire FGL for $26.80 per share in cash. At the date of the transaction, the Company owned 47 million shares in FGL, or an 80.4% interest as of December 31, 2015. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the second quarter of calendar year 2016. As a result of this agreement, beginning with the first quarter of Fiscal 2016, the Company's investment in FGL has been classified as held for sale on the balance sheet and FGL's operations have been classified as discontinued operations, and results for all periods have been reclassified accordingly. Previously, FGL's results were reflected in the Insurance segment; however, all segment information has been adjusted to exclude FGL's results from this segment. Accordingly, the commentary for the Insurance segment in this release no longer reflects the performance of FGL in either the current or prior year quarters, and the Insurance segment as reported consists of Front Street Re (Delaware) Ltd. and its subsidiaries. Non-GAAP Measures. Management believes that certain non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Reconciliations of such measures to the most comparable U.S. GAAP measures are included herein. Adjusted EBITDA is a non-GAAP financial measure used in our Consumer Products (“Adjusted EBITDA - Consumer Products”) and Energy (“Adjusted EBITDA - Energy”) segments and one of the measures used for determining Spectrum Brands and Compass’ debt covenant compliance. “Insurance AOI” is a non-GAAP financial measure frequently used throughout the insurance industry and is an economic measure the Insurance segment uses to evaluate financial performance each period. FGL’s adjusted operating income (“AOI”) is calculated by adjusting net income to eliminate (i) the impact of net investment gains including other-than-temporary impairment ("OTTI") losses recognized in operations, but excluding gains and losses on derivatives hedging our indexed annuity policies, (ii) the effect of changes in the interest rates used to discount the FIA embedded derivative liability, (iii) the effect of change in fair value of reinsurance related embedded derivative, and (iv) the effect of class action litigation reserves. All adjustments to AOI are net of the corresponding VOBA, DAC and income tax impact (using an effective tax rate of 35%) related to these adjustments as appropriate. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) represent net income adjusted to exclude interest expense, income taxes and depreciation, depletion and amortization. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) represent net income adjusted to exclude interest expense, income taxes and depreciation, depletion and amortization. Adjusted EBITDA excludes certain items that are unusual in nature or not comparable from period to period and other non-recurring operating items, accretion of discount on asset retirement obligations, non-cash changes in the fair value of derivatives, gain on sale of oil and gas properties, non-cash write-downs of assets, and stock-based compensation. Adjusted EBITDA is a metric used by management and frequently used by the financial community and provides insight into an organization's operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA can also be a useful measure of a company’s ability to service debt. Computations of EBITDA and Adjusted EBITDA may differ from computations of similarly titled measures of other companies due to differences in the inclusion or exclusion of items in our computations as compared to those of others. We exclude the impact of foreign currency losses of $61.4 million and $144.9 million of revenues from acquisitions in the quarter on the measure of currency consistent organic revenue growth, which is based on a non-GAAP financial measure. We believe this measure assists in understanding the trends in our business. While management believes that non-U.S. GAAP measurements are useful supplemental information, such adjusted results are not intended to replace U.S. GAAP financial results and should be read in conjunction with those U.S. GAAP results. By accepting this document, each recipient agrees to and acknowledges the foregoing terms and conditions.

Quarterly Overview & Operating Highlights Omar Asali Private & Confidential

HRG State of the Business 5 Consumer Products Asset Management Energy Other Insurance & Reinsurance  Strong organic topline growth on a currency- consistent basis  Synergies expected from AAG acquisition are on- track to be realized  Record fiscal year expected for revenue, Adjusted EBITDA, cash flow 1. Reflects the aggregate principal amount of debt outstanding at HRG as of December 31, 2015, excluding issuance discounts, and does not give effect to debt held by the subsidiaries. 2. As of December 31, 2015; includes $25.1 billion of assets held for sale related to Fidelity & Guaranty Life. 3. As of December 31, 2015, corporate cash, cash equivalents and investments held at HRG.  Debt1: $1.75BN  Consolidated Assets2: ~$35.0BN  Cash and Investments3: $297.4MM  Transaction with Anbang progressing on track; expected close in upcoming 2nd quarter of calendar year  Expect to realize transaction proceeds tax efficiently  FGL now reflected as a discontinued operation in results  Closed sale of assets accounting for ~40% of segment’s 2015 revenue  Proceeds used to substantially delever, reducing HRG’s guarantee to $30 million  Ongoing focus on leverage & liquidity  Successful wind down of Salus’ operations  ABL portfolio down substantially  Substantial reduction in segment G&A expenses  Continuing focus on maximizing capital recovery  Significantly reducing operating expenses  De-levering at the HRG-level remains the priority  Committed to pursuing strategies that maximize shareholder value

Spectrum continues to deliver strong growth through product and geography expansion, and smart M&A 6 Consumer Products  Record first quarter financial performance at Spectrum and continued execution of strategy: —14.1% reported revenue growth, despite ongoing F/X headwinds —17.8% increase in Adjusted EBITDA to $207.1 million —17.0% Adjusted EBITDA margin, up 50 basis points from 1Q15 — Integration of Armored AutoGroup progressing as expected, synergies being realized —36.2% gross profit margins, up 150 basis points from 1Q15  6.3% currency-consistent organic revenue growth —Broad-based, reflecting contributions from nearly all businesses —Record results in Home and Garden and Hardware and Home Improvement —Nearly 15% increase in Global battery sales on a currency-consistent basis  FY 2016 reported sales expected to increase in high-single digit range, including acquisitions, and partially offset by negative F/X impacts, with free cash flow growing to between $505-$515 million  Continue to expect 7th consecutive year of record financial performance in 2016

7 Insurance Segment As of December 31, 2015, our Insurance segment only reflects the results of Front Street, our reinsurance business Fidelity & Guaranty Life reported very strong 1st quarter results  Insurance segment: —As of December 31, 2015, our investment in FGL has been classified as an asset “held for sale” —FGL’s operations have been classified as discontinued operations  FGL business: —Adjusted operating income at FGL increased nearly 15% over 1Q15 —Average assets under management at FGL increased 5.6% to $18.2 billion —FGL’s investment portfolio continues to perform very well, with across-the-board increases: —Average earned yield increased from 1Q15 to 4.87% —Net investment income of $222 million, up 6.7% from 1Q15 —Net investment spreads across all product lines increased 30 basis points from 1Q15 —Average NAIC rating remains approximately 1.5 —FGL’s GAAP book value, excluding AOCI, increased to $1.46 billion

Our Energy Segment is comprised of long- lived, lower-decline rate and lower geologic risk conventional oil and gas assets 8 Energy Segment  Delivered on deleveraging commitment —Compass term loan reduced by more than 50% during the quarter through proceeds from disposition of assets —Term loan balance at $160 million as of December 31st —HGI Funding guarantee reduced to $30 million  Decrease in average sale prices of 39% and 40% in oil and natural gas liquids, respectively, as compared to the prior year  Despite severe pressure on revenue, the business remains profitable on an Adjusted EBITDA basis —Operational oversight and strong cost controls —Production levels managed for maximum protection of value  We remain focused on protecting & building HRG value and managing leverage and liquidity

Our focus in Asset Management is mitigating risk to protect book value 9 Asset Management  Unwind of asset-based loan portfolio continues —No new loan originations since 2Q15 —Amounts outstanding declining due primarily to capital recovery —Dramatic reductions to segment G&A

Private & Confidential 1Q 2016 Sum of the Parts Valuation (Dilutive) without AOCI 10 As of the close of the first quarter, the estimated net value of our assets and liabilities was $15.04 per share of diluted common stock. SUM OF THE PARTS VALUATION – ESTIMATED VALUE VS. COMMON STOCK PRICE ($) $13.56 $6.39 -$0.57 $3.33 -$0.27 $1.46 -$8.86 $15.04 $13.56 Difference of $1.48 or a 9.8% Discount Spectrum Brands1 Insurance Segment2 Total Estimated Value8 December 31st Common Stock Price9 HGI Funding LLC4 HGI Asset Mgmt Holdings LLC5 Cash6 Debt & Other Liabilities7 HGI Energy Holdings LLC3 1. The valuation of HRG’s interest in Spectrum Brands (NYSE: SPB) is based on the volume weighted average closing price (“VWAP”) of SPB shares for the 20 day trading period of $98.42 through December 31, 2015 multiplied by the 27,756,905 SPB shares owned by HRG. 2. The valuation of HRG’s interest in the insurance segment reflects the sum of the per-share-value of its interests in (i) Fidelity & Guaranty Life (NYSE: FGL) based on the VWAP of FGL shares for the 20-day trading period of $25.58 through December 31, 2015 multiplied by the 47,000,000 shares owned by HRG (or $5.97 per share); and (ii) of the $0.70 per share book value of the Insurance segment, Front Street Re (Holdings) Ltd. represents a net book value of $84.9 million, or $0.42 per share. 3. The valuation of HGI Energy Holdings LLC reflects its net book of value as of December 31, 2015. 4. The valuation of HGI Funding LLC reflects its net book value as of December 31, 2015 (which includes 6,582,847 SPB shares and the market value of other securities owned by HGI Funding). 5. The valuation of HGI Asset Management Holdings LLC, reflects its net book of value as of December 31, 2015. 6. Total cash consists of cash at HRG as of December 31, 2015. 7. Debt and other liabilities includes the face value of all liabilities at HRG as of December 31, 2015, excluding deferred tax liabilities. 8. Per share amount for each of the above mentioned assets and liabilities is calculated by dividing the total valuation of such asset or liability by the 201,389,915 shares of HRG common stock (NYSE: HRG) outstanding as of December 31, 2015, which amount does gives effect to dilution for the vesting of all outstanding restricted shares (4,283,697). 9. The closing price for HRG’s shares of common stock December 31, 2015. Note: Book value as reflected above is not necessarily indicative of market value

Questions and Answers Private & Confidential

February 5th, 2016 1st Quarter Conference Call Private & Confidential

Appendix Private & Confidential

Private & Confidential Reconciliation of Adjusted EBITDA of Consumer Products Segment to U.S. GAAP Net Income (Unaudited) 14 RECONCILIATION OF ADJUSTED EBITDA OF CONSUMER PRODUCTS SEGMENT TO U.S. GAAP NET INCOME (UNAUDITED) ($ in Millions) 2016 2015 Reported net income - Consumer Products segment 73.7$ 50.0$ Add back: Interest expense 58.4 44.4 Income tax expense 6.9 20.5 Depreciation and amortization, net of accelerated depreciation Depreciation of properties 23.0 18.4 Amortization of intangibles 23.6 20.5 EBITDA - Consumer Products segment 185.6 153.8 Stock-based compensation 10.1 5.6 Inventory fair value adjustment - 0.8 Restructuring and related charges 1.2 7.4 Acquisition and integration related charges 9.9 8.1 Other 0.3 0.1 Adjusted EBITDA - Consumer Products segment 207.1$ 175.8$ Fiscal Quarter (a) a. For the three months ended December 31, 2015.

Private & Confidential Reconciliation of Adjusted EBITDA of Energy Segment to U.S. GAAP Net Loss (Unaudited) 15 RECONCILIATION OF ADJUSTED EBITDA OF ENERGY SEGMENT TO U.S. GAAP NET LOSS (UNAUDITED) ($ in Millions) 2016 2015 Reported net income (loss) - Energy segment 38.3$ (39.5)$ Interest expense 4.6 4.5 Depreciation, amortization and depletion 6.5 13.5 EBITDA - Energy segment 49.4 (21.5) Accretion of discount on asset retirement obligations 0.6 0.6 Impairments and bad debt expense 54.4 190.0 Gain on sale of oil and gas properties (105.6) - Gain on remeasurement of investment to fair value - (141.2) Non-recurring other operating items 1.0 1.0 Gain on derivative financial instruments (1.8) (18.7) Cash settlements on derivative financial instruments 8.3 2.4 Stock-based compensation expense - 0.3 Adjusted EBITDA - Energy segment 6.3$ 12.9$ Fiscal Quarter (a) a. For the three months ended December 31, 2015.

Private & Confidential Reconciliation of Adjusted Operating Income of Fidelity & Guaranty Life to U.S. GAAP Net (Loss) Income (Unaudited) 16 RECONCILIATION OF ADJUSTED OPERATING INCOME OF FIDELITY & GUARANTY LIFE TO U.S. GAAP NET (LOSS) INCOME (UNAUDITED) ($ in Millions) 2016 2015 Reported net income - Fidelity & Guaranty Life 48$ 14$ Effect of investment losses, net of offsets 3$ 2$ Effect of change in FIA embedded derivative discount rate, net of offsets (7)$ 20$ Effect of change in fair value of reinsurance related embedded derivative, net of offsets (13)$ (8)$ Effect of class action litigation reserves, net of offsets -$ (1)$ Adjusted operating Income - Fidelity & Guaranty Life 31$ 27$ Fiscal Quarter (a) a. For the three months ended December 31, 2015.

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