Harbinger Group Inc. -SEC Filings

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SEC Filings

10-Q

HRG GROUP, INC. filed this Form 10-Q on 02/07/2017

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Below is a summary of the impact of such intercompany balances in the accompanying Condensed Consolidated Balance Sheets:



	December 31, 2016		September 30, 2016
Assets
Funds withheld receivable	$	939.5	$	978.8
Other assets	15.0		15.1
Assets of business held for sale	1,349.0		1,375.5
Total assets	$	2,303.5	$	2,369.4
Liabilities
Insurance reserves	$	1,087.5	$	1,119.5
Debt	58.8		63.0
Liabilities of business held for sale	1,157.2		1,186.9
Total liabilities	$	2,303.5	$	2,369.4

The following table summarizes the components of “Net income (loss) from discontinued operations” in the accompanying Condensed Consolidated Statements of Operations for the three months ended December 31, 2016 and 2015:



	Three months ended December 31,
	2016			2015
Revenues:
Insurance premiums	$	11.1		$	15.4
Net investment income	239.8			222.2
Net investment gains	56.3			66.2
Insurance and investment product fees and other	38.3			28.8
Total revenues	345.5			332.6
Operating costs and expenses:
Benefits and other changes in policy reserves	19.9			180.9
Selling, acquisition, operating and general expenses	28.3			28.2
Amortization of intangibles	120.0			33.5
Total operating costs and expenses	168.2			242.6
Operating income	177.3			90.0
Interest expense	(6.1		)	(5.9		)
Write-up of assets of business held for sale to fair value less cost to sell	144.5			—
Net income before income taxes	315.7			84.1
Income tax expense (a)	56.9			119.7
Net income (loss)	258.8			(35.6		)
Less: net income attributable to noncontrolling interest	21.1			9.4
Net income (loss) - attributable to controlling interest	$	237.7		$	(45.0	)

(a) Included in the income tax expense for the three months ended December 31, 2015 was a $90.9 net income tax expense related to the establishment of a deferred tax liability of $338.6 at December 31, 2015, which was a result of classifying the Company’s ownership interest in FGL as held for sale, partially offset by a $247.7 reduction of valuation allowance on HRG’s net operating and capital loss carryforwards expected to offset the FGL taxable gain.

Compass Sale

On July 1, 2016, HGI Energy entered into an agreement to sell its equity interests in Compass to a third party (such agreement, the “Compass Sale Agreement”). During the fourth quarter of the fiscal year 2016, the transactions contemplated by the Compass Sale Agreement were consummated. This sale represented the disposal of all of the Company’s oil and gas properties, which were prior to their disposal accounted for using the full-cost method. The Company has determined that the completion of HGI Energy’s sale of its equity interests in Compass to a third party (the “Compass Sale”) represented a strategic shift for the Company and, accordingly, has presented the results of operations for Compass as discontinued operations in the accompanying Condensed Consolidated Statements of Operations.

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