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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Components of direct operating costs and expenses for the Fiscal 2016 Quarter and the Fiscal 2015 Quarter, and for the Fiscal 2016 Six Months and Fiscal 2015 Six Months, are presented as follows (in millions):
 
Fiscal Quarter
 
Fiscal Six Months
 
2016
 
2015
 
Increase / (Decrease)
 
2016
 
2015
 
Increase /(Decrease)
Oil and natural gas operating costs
$
6.0

 
$
14.5

 
$
(8.5
)
 
$
16.7

 
$
28.0

 
$
(11.3
)
Gathering and transportation costs
1.1

 
4.9

 
(3.8
)
 
4.4

 
8.6

 
(4.2
)
Production and ad valorem taxes
2.1

 
3.9

 
(1.8
)
 
5.2

 
7.2

 
(2.0
)
Total direct operating costs
$
9.2

 
$
23.3

 
$
(14.1
)
 
$
26.3

 
$
43.8

 
$
(17.5
)
Selling, acquisition, operating and general expenses. The Energy segment’s selling, acquisition, operating and general expenses for the Fiscal 2016 Quarter were $5.8 million, a decrease of $11.6 million, or 66.7%, from $17.4 million for the Fiscal 2015 Quarter. The Energy segment’s selling, acquisition, operating and general expenses for the Fiscal 2016 Six Months decreased $20.6 million, or 56.9%, to $15.6 million compared with $36.2 million for the Fiscal 2015 Six Months. The decreases were primarily due to a decrease in depletion expense of $8.9 million and $16.2 million, for the Fiscal 2016 Quarter and Fiscal 2016 Six Months, respectively, mainly as a result of the Compass Asset Sale and lower asset carrying value due to ceiling test impairments.
Impairment of oil and natural gas properties. The Energy segment recognized ceiling test impairments to its proved oil and natural gas properties of $21.2 million and $75.6 million for the Fiscal 2016 Quarter and Fiscal 2016 Six Months, respectively. The impairments were due to the continued decline in oil and natural gas prices. The Energy segment recognized ceiling test impairments of $146.6 million and $336.6 million for the Fiscal 2015 Quarter and Fiscal 2015 Six Months, respectively. The impairments were primarily due to differences in the oil and natural gas prices utilized in the purchase price allocation at the formation of Compass and the prices used in the ceiling test calculation, as well as the acquisition of EXCO Resources, Inc.’s (“EXCO”) remaining 25.5% interest in Compass during the Fiscal 2015 Six Months. See Note 2, Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements to the Condensed Consolidated Financial Statements included in Part I - Item 1. Financial Statements for additional information regarding the ceiling test impairments.


50
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