Harbinger Group Inc.
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SEC Filings

10-K
HRG GROUP, INC. filed this Form 10-K on 11/23/2016
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(12) Goodwill and Intangibles, net
A summary of the changes in the carrying amounts of goodwill and intangible assets are as follows:
 
 
 
Intangible Assets
 
Goodwill
 
Indefinite Lived
 
Definite Lived
 
Total
Balance at September 30, 2014
$
1,524.8

 
$
1,215.9

 
$
917.2

 
$
2,133.1

Acquisitions (Note 3)
1,054.7

 
341.5

 
184.9

 
526.4

Impairments (Note 2)
(28.3
)
 
(31.9
)
 
—

 
(31.9
)
Deconsolidation in connection to bankruptcy of a subsidiary
(16.2
)
 
(9.9
)
 
—

 
(9.9
)
Periodic amortization
—

 
—

 
(87.8
)
 
(87.8
)
Effect of translation
(47.6
)
 
(25.3
)
 
(24.3
)
 
(49.6
)
Balance at September 30, 2015
2,487.4

 
1,490.3

 
990.0

 
2,480.3

Adjustments
3.3

 
1.0

 
3.2

 
4.2

Impairments (Note 2)
(10.7
)
 
(4.7
)
 
—

 
(4.7
)
Periodic amortization
—

 
—

 
(93.9
)
 
(93.9
)
Effect of translation
(1.6
)
 
(13.1
)
 
(0.3
)
 
(13.4
)
Balance at September 30, 2016
$
2,478.4

 
$
1,473.5

 
$
899.0

 
$
2,372.5

During Fiscal 2016 and 2015, the Company recorded additions to goodwill and intangible assets related to the acquisitions of AAG, Salix, European IAMS and Eukanuba, Tell, Liquid Fence, FOH and CorAmerica. See Note 3, Acquisitions, for further detail.
During Fiscal 2015, FOHG Holdings, LLC, FOH and their subsidiaries (together, “FOHG”) filed for bankruptcy. Prior to the bankruptcy, three of the Company’s consolidated subsidiaries were lenders to FOHG. Following the completion of the bankruptcy of FOHG, such entities ceased to be subsidiaries of HRG and the Company deconsolidated FOHG from the Consolidated Financial Statements. The Company recorded a $38.5 gain on the deconsolidation, reported in “Gain on deconsolidation of subsidiary” on the accompanying Consolidated Statements of Operations and $16.2 of impairments related to certain loans between FOHG and subsidiaries of the Company. On June 3, 2015, following receipt of court approval, FOHG sold its brand and inventory to a third party licensing company, with the majority of the proceeds used to repay a portion of the loans made by subsidiaries of the Company. The deconsolidation of FOHG also resulted in a decrease of goodwill and intangibles associated with FOHG of $16.2 and $9.9, respectively.
See Note 2, Significant Accounting Policies and Practices and Recent Accounting Pronouncements, for further detail.
Definite Lived Intangible Assets
Amortizable intangible assets as of September 30, 2016 and 2015 consist of the following:
 
September 30, 2016
 
September 30, 2015
 
Cost
 
Accumulated Amortization
 
Net
 
Cost
 
Accumulated Amortization
 
Net
Customer relationships
$
984.8

 
$
(302.9
)
 
$
681.9

 
$
985.2

 
$
(247.4
)
 
$
737.8

Technology assets
237.2

 
(96.7
)
 
140.5

 
238.6

 
(78.1
)
 
160.5

Trade names
165.7

 
(89.1
)
 
76.6

 
165.4

 
(73.7
)
 
91.7

 
$
1,387.7

 
$
(488.7
)
 
$
899.0

 
$
1,389.2

 
$
(399.2
)
 
$
990.0

Amortization expense for the years ended September 30, 2016, 2015 and 2014 was $93.9, $87.8 and $81.7, respectively. Excluding the impact of any future acquisitions or change in foreign currency, the Company estimates annual amortization expense of amortizable intangible assets for the next five fiscal years will be as follows:
Fiscal Year
 
Estimated Amortization Expense
2017
 
$
91.9

2018
 
85.7

2019
 
85.4

2020
 
85.2

2021
 
81.9



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