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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During Fiscal 2016, Salus and Front Street received a partial repayment on the loan to RadioShack of $45.4, excluding $22.7 repayment on FGL’s participation on the loan. At September 30, 2016, the Company expects an additional $3.0 of future recoveries of the loan to RadioShack, excluding $1.5 related to FGL’s participation on the loan that is included inAssets of business held for sale” in the accompanying Consolidated Balance Sheets. As a result of the higher than expected recovery rates during Fiscal 2016, the Company reversed $18.0 of previously recorded allowance for credit losses, excluding $9.0 of realized gains by FGL recorded in(Loss) income from discontinued operations, net of tax” in the accompanying Consolidated Statements of Operations. During Fiscal 2016, Salus recorded provision of credit losses of $30.8 related to delinquent loans unrelated to RadioShack where the underlying collateral was underperforming.
 
Internal Risk Rating
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
September 30, 2016
$

 
$
1.1

 
$
14.8

 
$
30.1

 
$
46.0

September 30, 2015
$
69.0

 
$
32.4

 
$
74.0

 
$
99.2

 
$
274.6

Concentrations of Credit Risk and Major Customers
The loans in the asset-based portfolio are collateralized with accounts receivable, inventory or other assets such as real estate or intellectual property. Salus is exposed to credit risk to the extent that the carrying value of the loans exceeds the realizable value of such underlying collateral. Inventory, accounts receivable and other assets represented 52.0%, 12.0% and 36.0%, respectively, of eligible collateral underlying the asset-based loans portfolio at September 30, 2016. The largest concentration to one single borrower represented 29.6% of the outstanding asset-based loans.
Concentrations of Asset-based Loans
As of September 30, 2016 and 2015, the Company’s most significant investment in one industry was the Company’s asset-based loan in the apparel industry with a carrying value of $18.8 and $66.0, respectively, or 40.9% and 24.0%, respectively of the Company’s asset-based loans. No investment in a single issuer exceeded 10% of the Company’s stockholders’ equity as of September 30, 2016 and 2015.
Other investments
The Company’s consolidated other investments included in Other assets” at September 30, 2015, can be summarized as follows:
 
September 30, 2015
 
Cost or Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
 
Carrying Value
Corporate fixed-maturity securities, available-for-sale
$
14.1

 
$

 
$

 
$
14.1

 
$
14.1

Equity securities - held for trading
18.7

 
14.1

 

 
32.8

 
32.8

Other invested assets
5.3

 

 

 
5.3

 
5.3

Total other investments
$
38.1

 
$
14.1

 
$

 
$
52.2

 
$
52.2

 
(14) Accounts Payable and Other Current Liabilities
Accounts payable and other current liabilities” in the accompanying Consolidated Balance Sheets consist of the following:
 
September 30,
 
2016
 
2015
Accounts payable
$
583.5

 
$
623.9

Accrued expenses and other
172.9

 
196.7

Wages and benefits
146.5

 
123.9

Accrued interest
68.3

 
93.4

Income taxes payable
16.0

 
16.0

Restructuring and related charges
2.6

 
8.1

Total accounts payable and other current liabilities
$
989.8

 
$
1,062.0



F-52

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