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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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

Other invested assets
5.3

 
—

 
—

 
5.3

 
5.3

Total other investments
$
19.4

 
$
—

 
$
—

 
$
19.4

 
$
19.4


(10) Debt
The Company’s consolidated debt consists of the following:
 
 
September 30, 2016
 
September 30, 2015
 
 
Amount
 
Rate
 
Amount
 
Rate
Salus
 
 
 
 
 
 
 
 
Unaffiliated long-term debt of consolidated variable-interest entity
 
$
39.7

 
—
%
 
$
40.4

 
—
%
Long-term debt of consolidated variable-interest entity with FGL*
 
63.0

 
—
%
 
274.0

 
3.9
%
Unaffiliated secured borrowings under non-qualifying loan participations
 
2.0

 
—
%
 
8.8

 
10.5
%
Secured borrowings under non-qualifying loan participations with FGL*
 
—

 
—
%
 
4.2

 
4.5
%
Promissory note to FGL*
 
—

 
—

 
2.5

 
5.3
%
Total
 
104.7

 
 
 
329.9

 
 
Original issuance discounts on debt, net of premiums
 
(0.8
)
 
 
 
(0.9
)
 
 
Unamortized debt issue costs
 
(4.4
)
 
 
 
(5.4
)
 
 
Total debt
 
99.5

 
 
 
323.6

 
 
Less current maturities
 
2.0

 
 
 
11.3

 
 
Non-current portion of debt
 
$
97.5

 
 
 
$
312.3

 
 
* The debt balances included in the accompanying Condensed Consolidated Balance Sheets and in the table above reflect transactions between the business held for sale and businesses held for use that are expected to continue to exist after the close of the FGL Merger. Such transactions are not eliminated in the Condensed Consolidated Financial Statements in order to appropriately reflect the continuing operations and balances held for sale.

S-86
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