Harbinger Group Inc.
    Print Page | Close Window

SEC Filings

8-K
HRG GROUP, INC. filed this Form 8-K on 08/29/2016
Entire Document
 << Previous Page | Next Page >>



HRG GROUP, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
The Company reports a business as held for sale when management has approved or received approval to sell the business and is committed to a formal plan, the business is available for immediate sale, the business is being actively marketed, the sale is anticipated to occur during the next twelve months and certain other specified criteria are met, each in accordance with ASC 360. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized. Assets and liabilities related to a business classified as held for sale are segregated in the current and prior balance sheets in the period in which the business is classified as held for sale. Transactions between the businesses held for sale and businesses held for use that are expected to continue to exist after the disposal are not eliminated to appropriately reflect the continuing operations and balances held for sale. If a business is classified as held for sale after the balance sheet date but before the financial statements are issued or are available to be issued, the business continues to be classified as held and used in those financial statements when issued or when available to be issued. The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the business is classified as held for sale, in accordance with ASC 360 and Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 2015) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”).
The guidance above does not apply to oil and gas properties that are accounted for using the full-cost method of accounting as prescribed by the SEC (Regulation S-X, Rule 4-10, Financial Accounting and Reporting for Oil and Gas Producing Activities Pursuant to the Federal Securities Laws and the Energy Policy and Conservation Act of 1975) unless the disposal represents all or substantially all of a full cost pool as a discontinued operation.
As noted above, the HWD Asset Sale did not represent all or substantially all of Compass’ full-cost method assets as of the date of the transaction and, as a result, the operations associated with these assets were historically presented as continuing operations in the Company’s condensed consolidated statements of operations. The disposal resulting from the Compass Sale represents all of the remaining oil and gas properties that were accounted for using the full-cost method as of June 30, 2016. As a result, the Company’s interest in Compass met all of the held for sale criteria required by ASC 360 on July 1, 2016, subsequent to the Company’s end of the third fiscal quarter of 2016.
The unaudited pro forma condensed consolidated balance sheet as of June 30, 2016 is presented as if the Energy Transactions had occurred on June 30, 2016. The unaudited pro forma condensed consolidated statements of operations for the years ended September 30, 2015, 2014 and 2013 and the nine months ended June 30, 2016 are presented as if the Energy Transactions had occurred on October 1, 2012.
2. Pro Forma Adjustments
(a) Adjustments to reflect the elimination of the following assets and liabilities of Compass as of June 30, 2016 (in millions):
 
 
June 30,
2016
ASSETS
 
 
Cash and cash equivalents
 
$
5.4

Receivables, net
 
6.3

Properties, including oil and natural gas properties, net
 
114.1

Other assets
 
1.1

Total Assets
 
$
126.9

 
 
 
LIABILITIES
 
 
Debt
 
$
123.4

Accounts payable and other current liabilities
 
15.2

Other liabilities
 
22.3

Total Liabilities
 
$
160.9


7

 << Previous Page | Next Page >>