SEC Filings
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| 10-K | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HRG GROUP, INC. filed this Form 10-K on 11/23/2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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(7) Commitments and Contingencies Operating Lease The Company’s minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. All of the leases expire between November 2018 and December 2022. The Company subleases certain of its lease commitments to affiliated and non-affiliated entities partially offsetting rent expense. Future annual minimum rental commitments under non-cancelable operating leases pertaining to buildings, net of contractual third-party sublease, are as follows:
During Fiscal 2016 and 2015, the Company received sublease income from affiliated entities of $1,507 and $1,802, respectively. During Fiscal 2016 and 2015, the Company received sublease income from third-parties of $575 and $104, respectively. Letters of Credit As of September 30, 2016, the Company issued unused letters of credit totaling $2,300, related to property leases of the Company and its affiliates. Guarantees During Fiscal 2015, Salus Capital Partners, LLC (“Salus”), a subsidiary of HRG, executed a Canadian Dollar (“CAD”) swap agreement with Fidelity & Guaranty Life Insurance Company (“FGL Insurance”), a subsidiary of HRG, to convert the CAD cash flows into United States Dollar (“USD”) cash flows. Under this swap agreement, Salus would reimburse FGL Insurance for certain realized foreign exchange losses related to cash flows on these loan participations from origination date through maturity date. The Company executed an agreement with FGL Insurance to guarantee, subject to the terms of the agreement, the fulfillment of Salus’ obligation under the swap agreement. During Fiscal 2016, Salus and FGL Insurance settled and terminated the swap agreement, which also terminated the Company’s guarantee with FGL Insurance. (8) Related Party Transactions During Fiscal 2015, Spectrum Brands completed its acquisition of Armored AutoGroup Parent Inc. (the “AAG Acquisition”), a consumer products company. Spectrum Brands funded the AAG Acquisition with the proceeds of its offering of debt and a registered offering of 6.2 million of shares of Spectrum Brands’ common stock (the “Equity Offering”). In the Equity Offering, the Company acquired 3.0 million shares of the common stock offered thereby. On October 9, 2015, the Company entered into a Stock Purchase Agreement with HC2 Holdings, Inc. (“HC2”) and the purchasers party thereto, whereby HGI Funding sold its remaining equity interest in HC2 for an aggregate purchase price of $35,088. Jefferies LLC (“Jefferies”), one of the participating underwriters, is a wholly owned subsidiary of Leucadia, which through subsidiaries beneficially owns more than 10% of the Company’s outstanding shares of Common Stock, agreed to purchase 1.2 million shares in the transaction at a purchase price of $7.50 per share. In addition, Mr. Philip Falcone, who was at that time through Harbinger Capital Partners LLC and certain of its affiliated funds (“HCP”) the beneficial owner of more than 10% of the outstanding shares of common stock of HRG, purchased through an HCP fund 0.5 million shares of HC2 in the transaction at a purchase price of $7.50 per share. The market value of the investment in HC2 at September 30, 2015 was $32,796. On August 23, 2016, the Company sold 0.8 million shares of marketable equity securities, at a purchase price of $130.59 per share to HGI Energy Holdings, LLC (“HGI Energy”), a wholly-owned subsidiary of HRG. The purchase price was determined based on the closing market price of such securities out of a certain number of days. The Company recognized a gain of $85,518 and the total proceeds of $110,000 were used to return capital to HRG.
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