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
