Highlights for the Fiscal 2016 Quarter and the Fiscal 2016 Six Months Significant Transactions and Activity
| | • | On November 8, 2015, Anbang entered into the FGL Merger Agreement. Pursuant to this agreement, Anbang, through its subsidiaries, will acquire all of the outstanding shares of FGL at closing. Stockholders of FGL will receive $26.80 per share in cash at closing. At the date of the transaction, the Company owned 47 million shares, or 80.4% of FGL. |
| | • | During the Fiscal 2016 Six Months, Compass completed the sale of its Holly, Waskom, and Danville assets (the “Compass Sold Assets”) to Indigo Resources LLC (the “Buyer”) for total cash consideration of $152.0 million, pursuant to the Purchase Agreement entered into with the Buyer as previously announced on October 9, 2015 (the “Compass Asset Sale”). Proceeds were primarily used to reduce Compass’ borrowings under its existing credit facility (the “Compass Credit Agreement”). |
| | • | During the Fiscal 2016 Six Months, Compass reduced its borrowing under the Compass Credit Agreement from $327.0 million to $160.0 million, a reduction of $167.0 million. |
| | • | During the Fiscal 2016 Six Months, our Energy segment recorded impairments to its oil and natural gas properties of $75.6 million based on the ceiling test limitation under the full cost method of accounting. The impairments were primarily due to the decline in oil and natural gas prices. |
Key financial highlights
| | • | Basic and diluted net loss from continuing operations attributable to common stockholders for the Fiscal 2016 Quarter was $0.10 per basic and diluted common share attributable to controlling interest, compared to basic and diluted net loss from continuing operations attributable to common stockholders of $1.20 per basic and diluted common share attributable to controlling interest in the Fiscal 2015 Quarter. |
| | • | We ended the quarter with corporate cash and investments of approximately $237.4 million (primarily held at HRG and HGI Funding). |
| | • | Our Consumer Products segment’s operating income for the Fiscal 2016 Quarter increased $60.1 million, or 68.0%, to $148.5 million from $88.4 million for the Fiscal 2015 Quarter. Our Consumer Products segment’s adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA - Consumer Products”) increased by $70.5 million, or 44.3%, to $229.6 million versus the Fiscal 2015 Quarter. The increase in operating income and Adjusted EBITDA - Consumer Products was primarily driven by higher profitability in the businesses acquired during the fiscal year 2015: Armored AutoGroup Parent Inc. (“AAG”); IAMS and Eukanuba brands (“European IAMS and Eukanuba”); and Salix Animal Health LLC (“Salix”), coupled with higher sales and margins in the home and garden product line due to increased demand for animal repellents and household insect controls driven by the Zika virus. Adjusted EBITDA margin represented 19.0% of sales as compared to 14.9% in the Fiscal 2015 Quarter. |
| | • | Our Insurance segment’s operating loss for the Fiscal 2016 Quarter was $1.8 million compared to $56.3 million for the Fiscal 2015 Quarter. The decrease in operating loss was primarily due to credit impairment losses on intercompany investments recorded in the Fiscal 2015 Quarter. |
| | • | Our Energy segment’s operating loss for the Fiscal 2016 Quarter was $26.7 million compared to $161.3 million in the Fiscal 2015 Quarter. The decrease in operating loss was primarily driven by lower ceiling test impairments recorded in the Fiscal 2016 Quarter, partially offset by decreased revenues as a result of lower oil and natural gas prices. The Energy segment’s adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA - Energy”) for the Fiscal 2016 Quarter was a loss of $0.6 million, a decrease of $6.1 million from the Fiscal 2015 Quarter. The decrease was primarily attributable to the decrease in average sales prices and volume during the Fiscal 2016 Quarter. |
| | • | Our Asset Management segment recorded an operating loss of $9.2 million for the Fiscal 2016 Quarter compared to $67.3 million for the Fiscal 2015 Quarter. The decrease in operating loss was mainly as a result of decreases in impairments and bad debt expenses, which were mainly associated with the impairment that was recorded in the Fiscal 2015 Quarter on a loan to RadioShack Corporation (“RadioShack”) which filed for bankruptcy in February 2015. |
| | • | During the Fiscal 2016 Six Months, we received cash dividends of approximately $30.9 million from our subsidiaries, including $24.3 million, $6.2 million and $0.4 million from Spectrum Brands, FGL and CorAmerica, respectively, which does not give effect to the net impact from interest payments made by HRG on behalf of our Energy segment with respect to certain intercompany notes issued by HGI Energy. |
|
