Harbinger Group Inc.
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SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 05/09/2016
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Results of Operations
Fiscal 2016 Quarter and Fiscal 2016 Six Months Compared to the Fiscal 2015 Quarter and Fiscal 2015 Six Months
Presented below is a table that summarizes our results of operations and compares the amount of the change between the fiscal periods (in millions):
 
Fiscal Quarter
 
Fiscal Six Months
 
2016
 
2015
 
Increase / (Decrease)
 
2016
 
2015
 
Increase / (Decrease)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Consumer Products
$
1,209.6

 
$
1,067.0

 
$
142.6

 
$
2,428.4

 
$
2,134.8

 
$
293.6

Insurance
39.6

 
(38.9
)
 
78.5

 
29.6

 
(4.4
)
 
34.0

Energy
9.5

 
26.0

 
(16.5
)
 
26.3

 
60.3

 
(34.0
)
Asset Management
1.6

 
5.1

 
(3.5
)
 
7.6

 
13.1

 
(5.5
)
Intersegment elimination
9.2

 
65.1

 
(55.9
)
 
11.1

 
43.2

 
(32.1
)
Consolidated segment revenues
1,269.5

 
1,124.3

 
145.2

 
2,503.0

 
2,247.0

 
256.0

Corporate and Other
—

 
19.5

 
(19.5
)
 
—

 
40.5

 
(40.5
)
Total revenues
$
1,269.5

 
$
1,143.8

 
$
125.7

 
$
2,503.0

 
$
2,287.5

 
$
215.5

Operating income (loss):
 
 
 
 
 
 
 
 
 
 
 
Consumer Products
$
148.5

 
$
88.4

 
$
60.1

 
$
291.0

 
$
204.0

 
$
87.0

Insurance
(1.8
)
 
(56.3
)
 
54.5

 
(1.8
)
 
(50.7
)
 
48.9

Energy
(26.7
)
 
(161.3
)
 
134.6

 
(91.2
)
 
(356.3
)
 
265.1

Asset Management
(9.2
)
 
(67.3
)
 
58.1

 
(18.3
)
 
(68.5
)
 
50.2

Intersegment elimination
13.2

 
43.9

 
(30.7
)
 
(5.8
)
 
27.7

 
(33.5
)
Total segment operating income (loss)
124.0

 
(152.6
)
 
276.6

 
173.9

 
(243.8
)
 
417.7

Corporate and Other and eliminations
(8.2
)
 
(24.5
)
 
16.3

 
(22.8
)
 
(148.3
)
 
125.5

Consolidated operating income (loss)
115.8

 
(177.1
)
 
292.9

 
151.1

 
(392.1
)
 
543.2

Interest expense
(95.8
)
 
(81.1
)
 
(14.7
)
 
(193.3
)
 
(157.5
)
 
(35.8
)
Gain on sale of oil and gas properties
—

 
—

 
—

 
105.6

 
—

 
105.6

Gain upon gaining control of equity method investment
—

 
—

 
—

 
—

 
141.2

 
(141.2
)
Other income, net
0.5

 
14.1

 
(13.6
)
 
1.6

 
46.9

 
(45.3
)
Income (loss) from continuing operations before income taxes
20.5

 
(244.1
)
 
264.6

 
65.0

 
(361.5
)
 
426.5

Income tax expense (benefit)
8.9

 
(0.8
)
 
9.7

 
10.8

 
5.2

 
5.6

Net income (loss) from continuing operations
11.6

 
(243.3
)
 
254.9

 
54.2

 
(366.7
)
 
420.9

(Loss) income from discontinued operations, net of tax
(13.1
)
 
5.8

 
(18.9
)
 
(48.7
)
 
22.8

 
(71.5
)
Net (loss) income
(1.5
)
 
(237.5
)
 
236.0

 
5.5

 
(343.9
)
 
349.4

Less: Net income (loss) attributable to noncontrolling interest
33.3

 
(9.2
)
 
42.5

 
74.2

 
(5.8
)
 
80.0

Net loss attributable to controlling interest
$
(34.8
)
 
$
(228.3
)
 
$
193.5

 
$
(68.7
)
 
$
(338.1
)
 
$
269.4

Revenues. Revenues for the Fiscal 2016 Quarter increased $125.7 million, or 11.0%, to $1,269.5 million from $1,143.8 million for the Fiscal 2015 Quarter. Revenues for the Fiscal 2016 Six Months increased $215.5 million, or 9.4%, to $2,503.0 million from $2,287.5 million for the Fiscal 2015 Six Months.
The increases were primarily due to growth from acquisitions and organic sales from our Consumer Products segment, coupled with an increase in fair value of the funds withheld receivables with third parties in the Insurance segment due to lower interest rates and tighter credit spreads. These increases were partially offset by negative impact of foreign exchange in the Consumer Product segment and lower sales in the Energy segment as a result of the decrease in oil and natural gas prices.
Consolidated operating income (loss). Consolidated operating income for the Fiscal 2016 Quarter increased $292.9 million, or 165.4%, to $115.8 million from an operating loss of $177.1 million for the Fiscal 2015 Quarter. Consolidated operating income for the Fiscal 2016 Six Months increased $543.2 million, or 138.5%, to $151.1 million from an operating loss of $392.1 million for the Fiscal 2015 Six Months.
The increases were primarily due to increased profitability in our Consumer Product segment as a result of the acquisitions of AAG, European IAMS and Eukanuba and Salix during the fiscal year ended September 30, 2015; lower ceiling test impairments in the Energy segment; credit impairment losses recorded in the Insurance and Asset Management segments mainly associated with the impairment of a loan to RadioShack that was recorded in the Fiscal 2015 Quarter; and impairments of goodwill and

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