Harbinger Group Inc.
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DEF 14A
HRG GROUP, INC. filed this Form DEF 14A on 11/15/1995
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<PAGE>
 
  Including its Corpus Christi, Texas location, Energy Industries maintains
eleven branch offices in Texas, Louisiana, Oklahoma, Arkansas and New Mexico.
Branch office personnel negotiate natural gas compressor package rentals and
sales, perform maintenance services for Energy Industries' fleet of rental
compressors and other natural gas compressor packages on a contract basis and
recondition Energy Industries' rental fleet packages when rental contracts
expire. Energy Industries also has facilities for fabricating natural gas
compressor packages at its branches in Midland and Houston, Texas and
Lafayette, Louisiana, if market conditions require.
 
  The following table identifies major categories of Energy Industries' natural
gas compression revenue for the twelve months ended September 30, 1993 and 1994
and the nine months ended June 30, 1995. Because the Company acquired Energy
Industries in November 1993, the Company's consolidated financial results for
its fiscal year ended September 30, 1994 include only eleven months of Energy
Industries' operations. For comparative purposes, however, the fiscal 1994
revenues presented in the following table are for the twelve months ended
September 30, 1994 and include Energy Industries' revenue information for an
additional month when Energy Industries was not owned by the Company. The
Company did not own Energy Industries in fiscal 1993 and that period is
presented for comparison purposes only.
 

<TABLE>       
<CAPTION>
                                                             TWELVE MONTHS ENDED
                                                NINE MONTHS     SEPTEMBER 30,
                                                   ENDED     -------------------
                                               JUNE 30, 1995   1994      1993
                                               ------------- --------- ---------
                                                        (IN THOUSANDS)
      <S>                                      <C>           <C>       <C>
      Compressor rentals......................    $12,978    $  17,575 $  15,256
      Fabrication and sales...................     21,879       29,842    22,020
      Parts and service.......................     14,919       21,138    16,662
      Other...................................      3,310        9,981     9,334
                                                  -------    --------- ---------
          Total...............................    $53,086    $  78,536 $  63,272
                                                  =======    ========= =========
</TABLE>
    
 
  Natural Gas Compressor Package Rentals. Energy Industries maintains a fleet
of approximately 770 natural gas compressor packages of various capacities for
rental to natural gas producers and processors. Energy Industries rents natural
gas compressor packages to its customers under contracts which require monthly
payments based on a fixed fee or on the volume of gas compressed. The initial
fixed term of a natural gas compressor package rental is generally between one
and 36 months and thereafter continues on a month-to-month basis. Customers
typically continue to rent a package for a period substantially longer than the
initial term of the contract. Contract compression pricing, which is based on
prevailing market conditions, generally contains provisions for periodic rate
adjustments to reflect market changes.
 
  Natural gas compressor package rental utilization is affected primarily by
the number and age of producing oil and gas wells, the volume of natural gas
consumed and natural gas prices. Rental rates for natural gas compressor
packages are determined primarily by the demand for packages and secondarily by
the size and horsepower of a natural gas compressor package. The following
table compares utilizations and rental rates (on a horsepower basis) and fleet
size for the Energy Industries' fleet of natural gas compressor packages at
September 30, 1993 and 1994 and at June 30, 1995. The Company did not own
Energy Industries prior to November 1993.
 

<TABLE>
<CAPTION>
                                                           AS OF SEPTEMBER 30,
                                                 AS OF     --------------------
                                             JUNE 30, 1995   1994       1993
                                             ------------- ---------  ---------
   <S>                                       <C>           <C>        <C>
   FLEET UTILIZATION:
     Horsepower.............................       81.5%        82.6%      74.4%
   MONTHLY RENTAL RATE, BASED ON:
     Horsepower.............................     $15.54       $16.61     $17.25
   FLEET SIZE:
     Number of Units........................        771          706        681
     Horsepower.............................    129,467      113,786    106,175
</TABLE>

 
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