Harbinger Group Inc.
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SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 05/05/2017
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The following table summarizes the components of “Net (loss) income from discontinued operations” in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2017 and 2016:
 
Three months ended March 31,
 
Six months ended March 31,
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
Insurance premiums
$
2.7

 
$
16.2

 
$
13.8

 
$
31.6

Net investment income
246.4

 
226.7

 
486.2

 
448.9

Net investment gains (losses)
80.0

 
(39.2
)
 
136.3

 
27.0

Insurance and investment product fees and other
43.9

 
31.7

 
82.2

 
60.5

Total revenues
373.0

 
235.4

 
718.5

 
568.0

Operating costs and expenses:
 
 
 
 
 
 
 
Benefits and other changes in policy reserves
268.0

 
188.1

 
287.9

 
369.0

Selling, acquisition, operating and general expenses
32.6

 
28.4

 
60.9

 
56.6

Amortization of intangibles
36.5

 
0.4

 
156.5

 
33.9

Total operating costs and expenses
337.1

 
216.9

 
505.3

 
459.5

Operating income
35.9

 
18.5

 
213.2

 
108.5

Interest expense
(6.0
)
 
(5.9
)
 
(12.1
)
 
(11.8
)
(Write-down) write-up of assets of business held for sale to fair value less cost to sell
(72.8
)
 
(23.5
)
 
71.7

 
(23.5
)
Net (loss) income before income taxes
(42.9
)
 
(10.9
)
 
272.8

 
73.2

Income tax expense (a)
11.5

 
2.2

 
68.4

 
121.9

Net (loss) income
(54.4
)
 
(13.1
)
 
204.4

 
(48.7
)
Less: net income attributable to noncontrolling interest
6.4

 
1.8

 
27.5

 
11.2

Net (loss) income - attributable to controlling interest
$
(60.8
)
 
$
(14.9
)
 
$
176.9

 
$
(59.9
)
(a) Included in the income tax expense for the six months ended March 31, 2016 was a $90.9 of net income tax expense related to the establishment of a deferred tax liability of $328.6 at March 31, 2016, which was a result of classifying the Company’s ownership interest in FGL as held for sale. The deferred tax liability was partially offset by a $237.7 reduction of valuation allowance on HRG’s net operating and capital loss carryforwards expected to offset the FGL taxable gain at March 31, 2016. The remaining liability is expected to be offset by current year losses recognized in continuing operations except for the $13.2 of estimated alternative minimum taxes.
Compass
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 accounted for using the full-cost method prior to their disposal. The Company has determined that the completion of HGI Energy’s sale of its equity interests in Compass to a third party 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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