SEC Filings
10-Q | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HRG GROUP, INC. filed this Form 10-Q on 05/05/2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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for sale, partially offset by a $237.7 million reduction of valuation allowance on HRG’s net operating and capital loss carryforwards expected to offset the tax effects of the completion of any disposition resulting from the FGL Strategic Evaluation Process. At March 31, 2017, the carrying value of the Company’s interest in FGL was $291.1 million higher than the fair value less cost to sell based on the closing price of FGL’s common stock at March 31, 2017 and as a result, the Company partially reversed the previously recorded $362.8 million write-down of assets of business held for sale by $71.7 million. The decrease in the carrying value of the Company’s interest was primarily as a result of a decrease in unrealized gains on FGL’s investment portfolio during the Fiscal 2017 Six Months due to the increase in market yields. The increase in net income attributable to FGL’s operations of $65.8 million was driven primarily by the change in the fixed indexed annuity present value of future credits and guarantee liability that decreased $160.6 million during the Fiscal 2017 Six Months compared to an increase of $53.9 million for the Fiscal 2016 Six Months due to the increase in longer duration risk free rates in the current period. Also contributing to the increase in net income attributable to FGL was higher net investment income driven by higher assets under management. These increases were partially offset by credit-related impairment losses of $20.0 million on available-for-sale debt securities; and higher amortization of intangibles and income tax expense. Noncontrolling Interest. The net income attributable to noncontrolling interest reflects the share of the net income of our subsidiaries, which are not wholly-owned, attributable to the noncontrolling interest. Such amount varies in relation to such subsidiary’s net income or loss for the period and the percentage interest not owned by HRG. Consumer Products Segment Presented below is a table that summarizes the results of operations of our Consumer Products segment and compares the amount of the change between the periods (in millions):
Net consumer and other product sales. Net consumer and other product sales for the Fiscal 2017 Quarter decreased $39.7 million, or 3.3%, to $1,169.9 million from $1,209.6 million for the Fiscal 2016 Quarter. The decrease in net consumer and other product sales in the Fiscal 2017 Quarter was primarily due to a decline in home and garden control products, global pet supplies and small appliances product categories, and a negative impact of foreign exchange rates of $9.6 million. These decreases were partially offset by the increases in organic net sales in hardware and home improvement and consumer batteries product categories. Net consumer and other product sales for the Fiscal 2017 Six Months decreased $46.7 million, or 1.9%, to $2,381.7 million from $2,428.4 million for the Fiscal 2016 Six Months. The decrease in net consumer and other product sales in the Fiscal 2017 Six Months was primarily due to the negative impact of foreign exchange rates of $28.4 million and a decline in organic net sales in home and garden control products, global pet supplies, small appliances, global auto care and personal care product categories. These decreases were partially offset by the increase in organic net sales in consumer batteries and hardware and home improvement product categories. Organic net sales exclude the impact of foreign currency translation and is considered a non-GAAP measurement (See “Non-GAAP Measurements” section below for reconciliation of net sales to organic net sales). Consolidated net sales by product category for each of those respective periods are as follows (in millions):
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