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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(25) Segment and Geographic Data
The Company follows the accounting guidance which establishes standards for reporting information about operating segments in interim and annual financial statements. The Company’s reportable business segments are organized in a manner that reflects how HRG’s management views those business activities. As discussed in Note 1, Basis of Presentation and Nature of Operations, as a result of the disposition of its interests in Compass and CorAmerica, and the continuing runoff of the results of its asset management businesses, the Company elected to realign its reportable segments to reflect these changes. Accordingly, the Company currently reports its business in two reporting segments: (i) Consumer Products and (ii) Insurance. The results of continuing businesses formerly reported in the energy and asset management segments are now reported within the Corporate and Other segment. Refer to Note 26, Consolidating Financial Information, for disclosure of total assets for each segment.
The following schedules present the Company’s segment information for Fiscal 2016, 2015 and 2014:
 
 
Fiscal
 
 
2016
 
2015
 
2014
Revenues:
 
 
 
 
 
 
Consumer Products
 
$
5,039.7

 
$
4,690.4

 
$
4,429.1

Insurance
 
150.4

 
(98.8
)
 
144.3

Intersegment elimination (a)
 
16.4

 
54.7

 
7.8

Consolidated segment revenues
 
5,206.5

 
4,646.3

 
4,581.2

Corporate and Other
 
8.9

 
63.4

 
53.5

Total revenues
 
$
5,215.4

 
$
4,709.7

 
$
4,634.7

 
 
 
 
 
 
 
Depreciation and amortization
 
 
 
 
 
 
Consumer Products
 
$
183.0

 
$
170.0

 
$
157.7

Corporate
 
0.7

 
1.0

 
0.5

Consolidated depreciation and amortization
 
$
183.7

 
$
171.0

 
$
158.2

 
 
 
 
 
 
 
Operating income (loss):
 
 
 
 
 
 
Consumer Products
 
$
656.3

 
$
474.1

 
$
481.9

Insurance
 
(12.4
)
 
(68.7
)
 
40.1

Intersegment elimination (a,b)
 
68.1

 
(62.9
)
 
32.5

Total segment operating income
 
712.0

 
342.5

 
554.5

Corporate and Other eliminations
 
(84.0
)
 
(296.7
)
 
(127.1
)
Consolidated operating income
 
628.0

 
45.8

 
427.4

Interest expense
 
(397.1
)
 
(401.6
)
 
(298.8
)
Loss from the change in the fair value of the equity conversion feature of preferred stock
 
—

 
—

 
(12.7
)
Gain on deconsolidation of subsidiary
 
—

 
38.5

 
—

Other income (expense), net
 
1.0

 
10.2

 
(11.9
)
Income (loss) from continuing operations before income taxes
 
231.9

 
(307.1
)
 
104.0

Income tax expense (benefit)
 
41.5

 
(16.2
)
 
89.6

Net income (loss) from continuing operations
 
190.4

 
(290.9
)
 
14.4

(Loss) income from discontinued operations, net of tax
 
(224.3
)
 
(221.5
)
 
87.3

Net (loss) income
 
(33.9
)
 
(512.4
)
 
101.7

Less: Net income attributable to noncontrolling interest
 
164.9

 
44.4

 
112.0

Net loss attributable to controlling interest
 
$
(198.8
)
 
$
(556.8
)
 
$
(10.3
)
(a) The Intersegment eliminations primarily represent the reversal and reclassification of impairments recorded in the Company’s Insurance segment on affiliated investments, as well as usual intercompany transactions for the period. For Fiscal 2015, the Insurance segment eliminations include the reversal of intercompany asset impairments of $57.1.
(b) For its stand-alone reporting purposes, Front Street elected, since inception, to apply the fair value option to account for its funds withheld receivables, non-funds withheld assets and future policyholder benefits reserves related to its assumed reinsurance. For Company’s consolidated reporting, the results from Front Street’s assumed reinsurance business with FGL is reported on FGL’s historical basis. Accordingly, in order to align Company’s consolidated reporting, we have recorded a net intersegment adjustment to operating income (loss) of $59.7, $(115.4) and $45.1 for Fiscal 2016, 2015 and 2014, respectively. Upon completion of the FGL Merger, the Company’s consolidated results will reflect all reinsurance business on the fair value option.

F-77
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