Harbinger Group Inc. -SEC Filings

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SEC Filings

10-Q

HRG GROUP, INC. filed this Form 10-Q on 05/05/2017

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	March 31, 2017
	Level 1		Level 2		Level 3		Fair Value		Carrying Amount
Assets (a)
Asset-based loans, included in other assets	$	—	$	—	$	6.3	$	6.3	$	6.3
Policy loans, included in funds withheld receivables	—		—		8.3		8.3		8.3
Total financial assets	$	—	$	—	$	14.6	$	14.6	$	14.6

Liabilities (a)
Investment contracts, included in contractholder funds and other insurance reserves	$	—	$	—	$	882.6	$	882.6	$	946.0
Total debt (b)	—		5,867.8		10.1		5,877.9		5,623.9
Total financial liabilities	$	—	$	5,867.8	$	892.7	$	6,760.5	$	6,569.9



	September 30, 2016
	Level 1		Level 2		Level 3		Fair Value		Carrying Amount
Assets (a)
Asset-based loans, included in other assets	$	—	$	—	$	35.0	$	35.0	$	35.0
Policy loans, included in funds withheld receivables	—		—		8.5		8.5		8.5
Total financial assets	$	—	$	—	$	43.5	$	43.5	$	43.5

Liabilities (a)
Investment contracts, included in contractholder funds and other insurance reserves	$	—	$	—	$	922.9	$	922.9	$	988.3
Total debt (b)	—		5,700.1		29.1		5,729.2		5,430.9
Total financial liabilities	$	—	$	5,700.1	$	952.0	$	6,652.1	$	6,419.2

(a) The carrying value of cash and cash equivalents, trade receivables, accounts payable and accrued investment income approximate fair value due to their short duration and, accordingly, they are not presented in the tables above.

(b) The fair value of debt set forth above is generally based on quoted or observed market prices.

Valuation Methodology

Investment Contracts and Other Insurance Reserves

Investment contracts assumed from FGL by Front Street include deferred annuities, FIAs and immediate annuities. The fair value of deferred annuity and FIAs is based on their cash surrender value (which is the cost the Company would incur to extinguish the liability) as these contracts are generally issued without an annuitization date. See “Reinsurance Agreements with FGL” section above for discussion of the calculation of the fair value of the insurance reserves.

Asset-based loans

The fair value of the asset-based loans originated by Salus approximate their net carrying value. Such loans carry a variable rate that are typically revolving in nature and can be settled at the demand of either party. Nonaccrual loans are considered impaired for reporting purposes and are measured and recorded at fair value on a non-recurring basis. As the loans are collateral dependent, Salus measures such impairment based on the estimated fair value of eligible proceeds. This is generally based on estimated market prices, which may be obtained from a variety of sources, including in certain instances from appraisals prepared by third parties. The impaired loan balance represents those nonaccrual loans for which impairment was recognized during the quarter.

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