Harbinger Group Inc.
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10-K
HRG GROUP, INC. filed this Form 10-K on 11/23/2016
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from issuance of debt, net of financing costs of $917.5 million to fund certain acquisitions, organic growth and refinance debt with lower interest rates.
Debt Financing Activities
At September 30, 2016, HRG and its subsidiaries were in compliance with their respective covenants under their respective debt documents. See Note 15, Debt, to our Consolidated Financial Statements included in Part IV - Item 15. Exhibits, Financial Statements and Schedules for additional information regarding the Company and its subsidiaries’ debt activities during Fiscal 2016.

Equity Financing Activities
During Fiscal 2016, we granted shares and restricted stock awards representing approximately 99 thousand shares to our employees, our directors, and our consultants. All vesting dates of grants made to our employees are subject to the recipient’s continued employment with us, except as otherwise permitted by our Board of Directors, or in certain cases if the employee is terminated without cause or resigns for good reason. The total market value of the restricted shares on the date of grant was approximately $1.4 million, a portion of which represented unearned restricted stock-based compensation. Unearned compensation is amortized to expense over the appropriate vesting period.
From time to time we may repurchase our outstanding shares of common stock in the open market or otherwise. During Fiscal 2016, we did not repurchase any of our outstanding common stock under the $100.0 million repurchase program authorized by our Board in May 2014. As of September 30, 2016, under this program, we had repurchased a total of 6.9 million shares of our common stock, at an aggregate repurchase price of $87.7 million, with $12.3 million remaining value of the shares that may be purchased in the future. Under a different common stock repurchase program, during Fiscal 2015 and 2014, we repurchased 1.7 million and 5.2 million shares, respectively, of our outstanding common stock for $22.2 million and $65.5 million, respectively.

Contractual Obligations
The following table summarizes our contractual obligations as of September 30, 2016 and the effect such obligations are expected to have on our liquidity and cash flow in future periods (in millions) and excludes certain other obligations that have been reflected on our Consolidated Balance Sheets as of September 30, 2016 included in this report.
 
 
Payments Due by Period
 
 
Total
 
Less than 1 year
 
1 to 3 years
 
3 to 5 years
 
Thereafter
Contractual obligations of business held for use:
 
 
 
 
 
 
 
 
 
 
Annuity, universal life, and long-term products (a)
 
$
1,671.6

 
$
204.1

 
$
321.6

 
$
253.7

 
$
892.2

Debt, excluding capital lease (b)
 
5,426.0

 
156.0

 
891.1

 
125.4

 
4,253.5

Interest payments, excluding capital lease (b)
 
1,869.9

 
312.3

 
613.4

 
475.3

 
468.9

Capital lease (c)
 
114.7

 
10.0

 
18.3

 
18.5

 
67.9

Operating lease (d)
 
157.1

 
44.3

 
59.3

 
33.3

 
20.2

Employee benefit (e)
 
125.8

 
10.6

 
22.8

 
24.9

 
67.5

Letters of credit (f)
 
26.9

 
26.9

 
—

 
—

 
—

Unfunded asset-based lending commitments (g)
 
6.2

 
6.2

 
—

 
—

 
—

Total contractual obligations of business held for use
 
$
9,398.2

 
$
770.4

 
$
1,926.5

 
$
931.1

 
$
5,770.2

Contractual obligations of business held for sale:
 
 
 
 
 
 
 
 
 
 
Annuity and universal life products
 
$
29,781.2

 
$
2,223.7

 
$
4,391.4

 
$
3,974.1

 
$
19,192.0

Operating leases
 
8.4

 
1.9

 
3.6

 
2.9

 
—

Debt
 
300.0

 
—

 
—

 
300.0

 
—

Revolving credit facility
 
100.0

 
100.0

 
—

 
—

 
—

Interest expense
 
95.8

 
19.1

 
38.3

 
38.3

 
0.1

Total contractual obligations of business held for sale
 
$
30,285.4

 
$
2,344.7

 
$
4,433.3

 
$
4,315.3

 
$
19,192.1

At September 30, 2016, our Consolidated Balance Sheets included $47.9 million of reserves for uncertain tax positions. It is not possible to predict or estimate the timing of payments for these obligations and, accordingly, they are not reflected in the above table.
(a)
Consists of projected payments through the year 2030 that the Insurance segment is contractually obligated to pay to annuity, universal life, and long-term care policyholders. The payments are derived from actuarial models which assume a level interest rate scenario and incorporate assumptions regarding mortality and persistency, when applicable. These assumptions are based on historical experience, but actual amounts will differ.
(b)
For more information concerning debt, see Note 15, Debt, to our Consolidated Financial Statements.
(c)
Capital lease payments due by fiscal year include executory costs and imputed interest.
(d)
For more information concerning operating leases, see Note 22, Commitments and Contingencies, to our Consolidated Financial Statements.

99
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