Harbinger Group Inc.
    Print Page | Close Window

SEC Filings

DEF 14A
HRG GROUP, INC. filed this Form DEF 14A on 11/15/1995
Entire Document
 << Previous Page | Next Page >>
<PAGE>
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
 
  All of the Company's oil and gas production from its Bolivian properties is
sold to Yacimientos Petroliferos Fiscales Bolivianos ("YPFB"), Bolivia's state-
owned oil company. Because of YPFB's improved performance under renegotiated
contracts and improved operating conditions in Bolivia, Zapata returned to the
accrual method of accounting for its Bolivian oil and gas operations in fiscal
1994. Prior to 1994, the Company used cash-basis revenue recognition for sales
from its Bolivian oil and gas properties. The effect of changing to accrual
accounting in 1994 increased revenues by $1.8 million. Fiscal 1994, 1993 and
1992 revenues include $4.1 million, $3.2 million and $10.1 million,
respectively, related to the Bolivian oil and gas properties.
 
  Revenues related to the natural gas services marketing activities are
recognized when all obligations to deliver products are satisfied. Revenues
related to natural gas processing activities are recognized when products are
produced and sold, while revenues related to the gathering activities are
recognized as gas flows through the Company's pipelines.
 
  The Company's natural gas compression operation sells, leases and rents gas
compressors in the oil and gas industry. Leases are accounted for as either
sales-type or operating. Revenue from sales-type leases is recognized at the
inception of the lease, whereas, revenue from operating leases is recognized
over the lease term.
 
 Futures Contracts
 
  The Company's natural gas gathering and processing operation periodically
enters into futures contracts to hedge its exposure to price fluctuations on
natural gas and natural gas liquids transactions. Recognized gains and losses
on hedge contracts are reported as a component of the related transaction. In
fiscal 1994 and 1993, the Company recognized a loss of $34,000 and a gain of
$178,000, respectively, related to such hedge transactions. At September 30,
1994, such unrealized losses on open hedge transactions were insignificant.
 
 Income taxes
 
  Zapata adopted Statement of Financial Accounting Standards No. 109 ("SFAS
109"), "Accounting for Income Taxes" as of October 1, 1993. The adoption of
SFAS 109 changed Zapata's method of accounting for income taxes to the asset
and liability approach. This approach requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of existing
temporary differences between the financial reporting and tax reporting basis
of assets and liabilities, and operating loss and tax credit carryforwards for
tax purposes.
 
 Earnings per share
 
  Income per share is based on the weighted average number of common shares and
common share equivalents outstanding during each year. Common share equivalents
include the average shares issuable for convertible preference stock and stock
options. Income used for purposes of this calculation has been reduced by
accruals for preferred and preference stock dividends.
 
  Loss per share is based on the weighted average number of common shares
outstanding during each year. No common share equivalents are incorporated in
fiscal 1994 calculations because to do so would be antidilutive. Preferred
stock dividends are considered as their effect is to increase the loss per
share.
 
  The average shares used in the per share calculations were 31,377,498 in
1994, 27,324,993 in 1993 and 25,723,048 in 1992.
 
                                       20

 << Previous Page | Next Page >>