| | (3) | Fiscal 2013 operating results includes the Hardware & Home Improvement business’ (“HHI business”) operations since the acquisition date of December 17, 2012. The HHI business contributed $869.6 million in revenues and recorded an operating profit of $88.7 million for the period from December 30, 2012 through September 30, 2013. Fiscal 2013 also includes $53.2 million of acquisition and integration-related charges principally associated with the HHI business acquisition. |
| | (4) | In Fiscal 2016, HRG recorded net increase to provision of $12.8 million for credit losses on Salus’ asset-based loan portfolio and impairments of $10.7 million to goodwill of CorAmerica Capital, LLC (“CorAmerica”) as a result of amending its investment management agreement with a counterparty that resulted in a decrease to CorAmerica’s projected future revenues. In addition, $4.7 million impairment on indefinite-lived intangible asset was recorded due to the reduction in value of certain tradenames in response to changes Spectrum Brands’ strategy. In Fiscal 2015, HRG recorded $93.5 million related to deterioration in Salus’ asset-based loan portfolio, including $66.0 million related to the bankruptcy of RadioShack Corporation (“RadioShack”), a significant Salus borrower. HRG also recorded impairments of $60.2 million to goodwill and the intangible assets as a result of the change of strategic direction of HRG’s former subsidiary, Frederick’s of Hollywood Group Inc. (“FOH”). In April 2015, FOH, its parent company, FOHG Holdings, LLC (“FOHG”), and their subsidiaries filed for bankruptcy, and any remaining assets and liabilities were deconsolidated. Upon deconsolidation, HRG recognized a gain of $38.5 million, primarily resulting from the elimination of FOH’s cumulative historical losses. Following the completion of the bankruptcy of FOHG, FOH and their subsidiaries, such entities ceased to be subsidiaries of HRG. |
| | (5) | Fiscal 2016, 2015, 2014, 2013 and 2012 interest expense includes charges totaling $21.4 million, $58.8 million, $9.2 million, $210.1 million and $31.7 million, respectively, relating to the refinancing, prepayment and/or amendment of various senior debt. Such charges include cash fees and expenses of $15.6 million, $46.0 million, $0.0 million, $181.2 million and $26.4 million, respectively, and non-cash charges for write-off and accelerated amortization of unamortized debt issuance costs and discount/premium of $5.8 million, $12.8 million, $9.2 million $28.9 million and $5.3 million, respectively. |
| | (6) | In Fiscal 2016, following FGL and Anbang Insurance Group Co., Ltd and its affiliates entering into a definitive merger agreement, our ownership interest in FGL was classified as held for sale in the accompanying Consolidated Balance Sheets and FGL’s operations were classified as discontinued operations in the accompanying Consolidated Statements of Operations and the Consolidated Statements of Cash Flows and reported separately for all periods presented. In addition, following the completion of the sale of Compass in Fiscal 2016, the Company no longer owns, directly or indirectly, any oil and gas properties and as a result, the results of Compass were presented as discontinued operations in the accompanying Consolidated Statements of Operations and Consolidated Statements of Cash Flows and reported separately for Fiscal 2016, Fiscal 2015, Fiscal 2014 and Fiscal 2013. |
| | (7) | Fiscal 2015, 2013 and 2012 income tax (benefit) expense of $(16.2) million, $29.4 million and $60.4 million, respectively, include non-cash charges of approximately $190.8 million, $171.7 million and $58.2 million, respectively, resulting from an increase in the valuation allowance against certain net deferred tax assets. Fiscal 2016 and 2014 income tax expense of $41.5 million and $89.6 million, respectively, include non-cash benefits of approximately $42.3 million and $31.8 million, respectively, resulting primarily from a decrease in the valuation allowance. |
| | (8) | For Fiscal 2016, there were 1.9 million and 1.3 million weighted-average shares of HRG’s common stock related to awards of restricted stock and stock units and stock options, respectively, that were included in the calculation of “diluted net loss per common share attributable to controlling interest.” For Fiscal 2015, there were 2.7 million and 1.3 million weighted-average shares of HRG’s common stock related to awards of restricted stock and stock units and stock options, respectively, that were excluded from the calculation of “diluted net loss per common share attributable to controlling interest” because the as-converted, unvested restricted stock and stock units, and stock options would have been anti-dilutive for Fiscal 2015. Also excluded from the calculations for Fiscal 2016, 2015 and 2014 were respectively 1.2 million, 1.8 million and 3.0 million shares of HRG common stock issuable upon the exercise of warrants issued by the Company because the warrants have an exercise price of $13.125 per share ,which was above the average stock price of HRG’s common stock during the entirety of the applicable year. In Fiscal 2014, diluted weighted average common shares outstanding did not reflect the conversion effect of the Series A Participating Convertible Preferred Stock (“Series A Preferred Shares”) and the Series A-2 Participating Convertible Preferred Stock (“Series A-2 Preferred Shares”, together with the Series A Preferred Shares, the “Preferred Stock”) for the portion of the period that these were outstanding, or the exercise of dilutive common stock equivalents as both would be antidilutive. In Fiscal 2013, diluted weighted average common shares outstanding did not reflect any conversion effect of the Preferred Stock or the exercise of dilutive common stock equivalents as both would be antidilutive. For Fiscal 2012, diluted weighted average common shares outstanding assumes only the exercise of dilutive common stock equivalents as the conversion effect of Preferred Stock would be antidilutive. See Note 21, Earnings Per Share, to our Consolidated Financial Statements included elsewhere in this report for further details regarding the calculation of net income (loss) per common share. For Fiscal 2016 and 2015, the conversion effect of the Preferred Stock had no impact on the diluted weighted average common shares as the Preferred Stock was converted in the third quarter of Fiscal 2014. |
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