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 following is a rollforward of the accrual related to all restructuring and related activities, included within Other Current Liabilities, by cost type, for the years ended September 30, 2016, 2015, and 2014:
(in millions)
 
Termination
Benefits
 
Other
Costs
 
Total
Accrual balance at September 30, 2014
 
$
9.9

 
$
1.6

 
$
11.5

Provisions
 
5.1

 
3.9

 
9.0

Cash expenditures
 
(9.5
)
 
(1.7
)
 
(11.2
)
Non Cash Items
 
(1.2
)
 
0.1

 
(1.1
)
Accrual balance at September 30, 2015
 
4.3

 
3.9

 
8.2

Provisions
 
4.3

 
10.9

 
15.2

Cash expenditures
 
(6.9
)
 
(13.6
)
 
(20.5
)
Non-cash items
 
(0.1
)
 
(0.2
)
 
(0.3
)
Accrual balance at September 30, 2016
 
$
1.6

 
$
1.0

 
$
2.6

The following summarizes restructuring and related charges by segment for the years ended September 30, 2016, 2015, and 2014, cumulative costs on restructuring initiatives as of September 30, 2016 and future expected costs to be incurred by segment:
(in millions)
 
GBA
 
PET
 
HHI
 
GAC
 
Corporate
 
Total
For the year ended September 30, 2016
 
$
0.8

 
$
4.6

 
$
4.5

 
$
5.3

 
$

 
$
15.2

For the year ended September 30, 2015
 
8.5

 
9.5

 
10.3

 

 
0.4

 
28.7

For the year ended September 30, 2014
 
11.2

 
3.0

 
8.2

 

 
0.5

 
22.9

Cumulative costs through September 30, 2016
 
30.0

 
15.1

 
19.3

 
5.3

 
2.1

 
71.8

Future costs to be incurred
 
1.0

 
1.8

 
0.1

 
14.6

 
0.1

 
17.6

NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of the Company’s financial assets and liabilities are defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Fair value measurements are classified using a fair value hierarchy that is based upon the observability of inputs used in measuring fair value. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed assumptions about hypothetical transactions in the absence of market data. Fair value measurements are classified under the following hierarchy:
Level 1 - Unadjusted quoted prices for identical instruments in active markets.
Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 - Significant inputs to the valuation model are unobservable.
The Company utilizes valuation techniques that attempt to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company’s derivatives are valued on a recurring basis using internal models, which are based on market observable inputs including interest rate curves and both forward and spot prices for currencies and commodities, which are generally based on quoted or observed market prices (Level 2). The fair value of certain derivative financial instruments is estimated using pricing models based on contracts with similar terms and risks. Modeling techniques assume market correlation and volatility, such as using prices of one delivery point to calculate the price of the contract’s different delivery point. The nominal value of interest rate transactions is discounted using applicable forward interest rate curves. In addition, by applying a credit reserve which is calculated based on credit default swaps or published default probabilities for the actual and potential asset value, the fair value of the Company’s derivative financial instrument assets reflects the risk that the counterparties to these contracts may default on the obligations. Likewise, by assessing the requirements of a reserve for non-performance which is calculated based on the probability of default by the Company, the Company adjusts its derivative contract liabilities to reflect the price at which a potential market participant would be willing to assume the Company’s liabilities. The Company has not changed the valuation techniques used in measuring the fair value of any financial assets and liabilities during the year.
The fair values of derivative instruments as of September 30, 2016 and 2015 are as follows. See Note 12, “Derivatives” for additional detail:
 
 
2016
 
2015
 
 
Carrying
 
 
 
Carrying
 
 
(in millions)
 
Amount
 
Fair Value
 
Amount
 
Fair Value
Derivative Assets
 
$
8.7

 
$
8.7

 
$
6.0

 
$
6.0

Derivative Liabilities
 
3.2

 
3.2

 
9.8

 
9.8


S-28

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