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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(15) Segment Data
The Company follows the accounting guidance which establishes standards for reporting information about operating segments in interim and annual financial statements. The Company’s reportable business segments are organized in a manner that reflects how HRG’s management views those business activities. Accordingly, the Company currently operates its business in two reporting segments: (i) Consumer Products and (ii) Insurance. 
The following schedules present the Company’s segment information 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:
 
 
 
 
 
 
 
 
Consumer Products
 
$
1,169.9

 
$
1,209.6

 
$
2,381.7

 
$
2,428.4

Insurance
 
41.0

 
40.1

 
12.3

 
30.1

Intersegment adjustments and eliminations
 
4.5

 
16.0

 
10.7

 
10.6

Consolidated segment revenues
 
1,215.4

 
1,265.7

 
2,404.7

 
2,469.1

Corporate and Other
 
0.7

 
1.6

 
1.0

 
7.6

Total revenues
 
$
1,216.1

 
$
1,267.3

 
$
2,405.7

 
$
2,476.7

 
 
 
 
 
 
 
 
 
Operating income:
 
 
 
 
 
 
 
 
Consumer Products
 
$
144.2

 
$
148.5

 
$
295.2

 
$
291.0

Insurance
 
(4.1
)
 
(1.4
)
 
(19.5
)
 
(1.4
)
Intersegment adjustments and eliminations (a)
 
13.5

 
12.8

 
15.8

 
(6.2
)
Total segment operating income
 
153.6

 
159.9

 
291.5

 
283.4

Corporate and Other
 
(10.1
)
 
(17.4
)
 
(30.3
)
 
(41.1
)
Consolidated operating income
 
143.5

 
142.5

 
261.2

 
242.3

Interest expense
 
(88.3
)
 
(94.4
)
 
(180.0
)
 
(189.6
)
Other expense, net
 
(2.0
)
 
—

 
(0.6
)
 
(0.7
)
Income from continuing operations before income taxes
 
53.2

 
48.1

 
80.6

 
52.0

Income tax expense (benefit)
 
50.2

 
(15.4
)
 
75.6

 
(21.0
)
Net income from continuing operations
 
3.0

 
63.5

 
5.0

 
73.0

(Loss) income from discontinued operations, net of tax
 
(54.4
)
 
(47.6
)
 
204.4

 
(50.1
)
Net (loss) income
 
(51.4
)
 
15.9

 
209.4

 
22.9

Less: Net income attributable to noncontrolling interest
 
30.7

 
40.6

 
79.3

 
81.5

Net (loss) income attributable to controlling interest
 
$
(82.1
)
 
$
(24.7
)
 
$
130.1

 
$
(58.6
)
(a) For its stand-alone reporting purposes, Front Street elected, since inception, to apply the fair value option to account for its funds withheld receivables, non-funds withheld assets and future policyholder benefits reserves related to its assumed reinsurance. For the Company’s consolidated reporting, the results from Front Street’s assumed reinsurance business with FGL is reported on FGL’s historical basis. Accordingly, in order to align the Company’s consolidated reporting, we have recorded a net intersegment adjustment to operating income (loss) of $13.1 and $13.9 for the three months ended March 31, 2017 and 2016, respectively, and $9.9 and $(3.2) for the six months ended March 31, 2017 and 2016, respectively. Upon the completion of any disposition resulting from the FGL Strategic Evaluation Process, the Company’s consolidated results will reflect all reinsurance business on the fair value option.


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