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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The Company believes its UTBs for uncertain tax positions are adequate, consistent with the principles of ASC Topic 740. The Company regularly assesses the likelihood of additional tax assessments by jurisdiction and, if necessary, adjusts its UTBs based on new information or developments.
The following table summarizes changes to the Company’s UTB reserves, excluding related interest and penalties:
 
 
Fiscal
 
 
2016
 
2015
 
2014
Unrecognized tax benefits at beginning of year
 
$
16.1

 
$
12.6

 
$
13.8

Gross increase — tax positions in prior period
 
29.9

 
4.7

 
2.7

Gross decrease — tax positions in prior period
 
(2.3
)
 
(1.9
)
 
(1.4
)
Gross increase — tax positions in current period
 
4.8

 
1.8

 
0.8

Settlements
 
(0.6
)
 
(0.8
)
 
(2.5
)
Lapse of statutes of limitations
 
—

 
(0.3
)
 
(0.8
)
Unrecognized tax benefits at end of year
 
$
47.9

 
$
16.1

 
$
12.6

The IRS is currently conducting an examination of HRG’s 2013 federal consolidated tax return. In addition, the New York State and New York City tax returns for the 2011 through 2013 tax years are under audit. As of September 30, 2016, the Company is not aware of any significant audit matters related to the U.S federal and state examinations and expects to receive a final closing agreement from both the IRS and New York State within the next 12 months.
Spectrum Brands files income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions and is subject to ongoing examination by the various taxing authorities. Spectrum Brand’s major taxing jurisdictions are the U.S., United Kingdom and Germany. In the U.S., federal tax filings for years prior to and including Spectrum Brands’ fiscal year ended September 30, 2012 are closed. However, the federal NOLs from Spectrum Brands’ fiscal years ended September 30, 2012 and prior are subject to IRS examination until the year that such NOL carryforwards are utilized and those years are closed for audit.
The increase in UTB related to Spectrum Brands for Fiscal 2016 includes a $25.5 expense to record a tax contingency reserve for a tax exposure in Germany. During the year, a local court ruled against Spectrum Brands’ characterization of certain assets as amortizable under Germany tax law. Spectrum Brands has appealed this ruling to the German Federal Court.
Filings in various U.S. state and local jurisdictions are also subject to audit and to date, no significant audit matters have arisen.
At September 30, 2016, previously filed income tax returns for certain of the Company’s legal entities in various jurisdictions were undergoing income tax audits. The Company cannot predict the ultimate outcome of these examinations; however, depending on the timing and final terms of actual settlements with the taxing authorities, it is reasonably possible that during the next twelve months some portion of the previously unrecognized tax benefits could be recognized.

(20) Restructuring and Related Charges
During Fiscal 2016, Spectrum Brands implemented a series of initiatives in the global auto care reporting unit to consolidate certain operations and reduce operating costs (the “GAC Business Rationalization Initiatives”). These initiatives include headcount reductions and the exit of certain facilities. Total costs associated with these initiatives are expected to be approximately $20.0, of which $5.3 has been incurred to date, the balance is anticipated to be incurred through September 30, 2017.
During Fiscal 2014, Spectrum Brands implemented a series of initiatives throughout the HHI reporting unit to reduce operating costs and exit low margin business outside the U.S. (the “HHI Business Rationalization Initiatives”). These initiatives include headcount reductions, the exit of certain facilities and the sale of a portion of the Hardware & Home Improvement Canadian operations. Total costs associated with these initiatives of $16.6 has been incurred to date, and completed as of September 30, 2016.
During Fiscal 2013, Spectrum Brands implemented a series of initiatives to reduce operating costs and to evaluate opportunities to improve its capital structure (the “Global Expense Rationalization Initiatives”). Total costs associated with these initiatives of $47.0 has been incurred to date, and completed as of September 30, 2016.
Spectrum Brands has entered or may enter into small, less significant initiatives and restructuring activities to reduce costs and improve margins throughout the organization (the “Other Restructuring Activities”). Individually these activities are not substantial, and occur over a shorter time period (less than 12 months).
The following tables summarize restructuring and related charges incurred during the Fiscal 2016, 2015 and 2014 where those charges are classified in the accompanying Consolidated Statements of Operations:

F-69
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