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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worldwide pet supplies business; (iv) Home and Garden, which consists of the Company’s home and garden and insect control businesses; and (v) Global Auto Care, and consists of the Company’s automotive appearance and performance products. Global strategic initiatives and financial objectives for each reportable segment are determined at the corporate level. Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives, and has a general manager responsible for the sales and marketing initiatives and financial results for product lines within the segment. Net sales attributable to foreign countries are determined based on the domiciled country of the customer.
Net sales relating to the segments for the years ended September 30, 2016, 2015 and 2014 are as follows: 
 
 
SBH
 
SB/RH
Net sales to external customers (in millions)
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Consumer batteries
 
$
840.7

 
$
829.5

 
$
957.8

 
$
840.7

 
$
829.5

 
$
957.8

Small appliances
 
656.0

 
734.6

 
730.8

 
656.0

 
734.6

 
730.8

Personal care
 
513.6

 
528.1

 
542.1

 
513.6

 
528.1

 
542.1

Global Batteries & Appliances
 
2,010.3

 
2,092.2

 
2,230.7

 
2,010.3

 
2,092.2

 
2,230.7

Hardware & Home Improvement
 
1,241.0

 
1,205.5

 
1,166.0

 
1,241.0

 
1,205.5

 
1,166.0

Global Pet Supplies
 
825.7

 
758.2

 
600.5

 
825.7

 
758.2

 
600.5

Home and Garden
 
509.0

 
474.0

 
431.9

 
509.0

 
474.0

 
431.9

Global Auto Care
 
453.7

 
160.5

 
—

 
453.7

 
160.5

 
—

Net sales
 
$
5,039.7

 
$
4,690.4

 
$
4,429.1

 
$
5,039.7

 
$
4,690.4

 
$
4,429.1

During the year ended September 30, 2016, the Company changed its performance metric to Adjusted EBITDA to better reflect how the Chief Operating Decision Maker is currently evaluating the business and making operating decisions. All amounts for prior periods have been recast to reflect current presentation. EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA further excludes (i) share based compensation expense as it is a non-cash based compensation cost; (ii) acquisition and integration costs that consist of transaction costs from acquisition transactions during the period, or subsequent integration related project costs directly associated with the acquired business; (iii) restructuring and related costs, which consist of project costs associated with restructuring initiatives across the segments; (iv) non-cash purchase accounting inventory adjustments recognized in earnings subsequent to an acquisition; (v) non-cash asset impairments or write-offs realized; (vi) and other. During the year ended September 30, 2016, other adjustments consisted of costs associated with the onboarding of a key executive and the involuntary transfer of inventory. During the year ended September 30, 2015, other consisted of costs associated with the exiting of a key executive, coupled with onboarding a key executive, plus a non-recurring adjustment for the devaluation of cash and cash equivalents denominated in Venezuelan currency. During the year ended September 30, 2014, other consisted of costs associated with the exiting of a key executive.
Segment Adjusted EBITDA in relation to the Company’s reportable segments for the years ended September 30, 2016, 2015 and 2014, is as follows:
 
 
SBH
 
SB/RH
Segment Adjusted EBITDA (in millions)
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Global Batteries & Appliances
 
$
311.4

 
$
306.9

 
$
326.6

 
$
311.4

 
$
306.9

 
$
326.6

Hardware & Home Improvement
 
241.6

 
225.5

 
210.3

 
241.6

 
225.5

 
210.3

Global Pet Supplies
 
140.1

 
124.5

 
113.2

 
140.1

 
124.5

 
113.2

Home and Garden
 
138.3

 
124.5

 
101.8

 
138.3

 
124.5

 
101.8

Global Auto Care
 
153.4

 
47.3

 
—

 
153.4

 
47.3

 
—

Total Segment Adjusted EBITDA
 
984.8

 
828.7

 
751.9

 
984.8

 
828.7

 
751.9

Depreciation and amortization
 
183.0

 
170.0

 
157.6

 
183.0

 
170.0

 
157.6

Share-based compensation
 
64.4

 
47.6

 
46.8

 
59.3

 
41.8

 
44.9

Corporate expenses
 
32.0

 
28.1

 
27.6

 
31.4

 
27.5

 
26.9

Purchase accounting inventory adjustment
 
—

 
21.7

 
—

 
—

 
21.7

 
—

Write-off from impairment of intangible assets
 
4.7

 
—

 
—

 
4.7

 
—

 
—

Acquisition and integration related charges
 
36.7

 
58.8

 
20.1

 
36.7

 
58.8

 
20.1

Restructuring and related charges
 
15.2

 
28.7

 
22.9

 
15.2

 
28.7

 
22.9

Interest expense
 
250.0

 
271.9

 
202.1

 
250.0

 
271.9

 
202.1

Other
 
1.2

 
8.6

 
1.3

 
1.2

 
8.6

 
1.3

Income from operations before income taxes
 
$
397.6

 
$
193.3

 
$
273.5

 
$
403.3

 
$
199.7

 
$
276.1


S-47
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