Revenues Increase 24% to $5.5 billion, Reflecting Strong Growth
Across All Four Operating Segments;
Operating Income Up 80% from Fiscal 2012
NEW YORK--(BUSINESS WIRE)--Nov. 21, 2013--
Harbinger Group Inc. ("HGI"; NYSE:HRG), a diversified holding company
focused on acquiring and growing businesses that are undervalued or
fairly valued with attractive financial or strategic characteristics,
today announced its consolidated results for the fourth quarter and full
year period ended on September 30, 2013 ("Fiscal 2013"). The results
include HGI's four segments:
-
Consumer Products, which consists of Spectrum Brands Holdings, Inc.
("Spectrum Brands"; NYSE: SPB);
-
Insurance, which includes Fidelity & Guaranty Life ("FGL") and Front
Street Re, Ltd. ("FSR");
-
Energy, which includes the company's interest in an oil and gas joint
venture with EXCO Resources, Inc. (the "EXCO/HGI JV"); and
-
Financial Services, which includes Salus Capital Partners, LLC
("Salus") and Five Island Asset Management, LLC ("Five Island").
Philip Falcone, HGI Chairman and Chief Executive Officer, said, “We are
pleased with our performance in fiscal 2013, including strong top line
growth and profitability, solid operational performance, and the
successful completion of key initiatives - such as the HHI acquisition
in our Consumer Products segment and the establishment of our Energy
business - that position us for continued success. Our performance
demonstrates the value of our diversified holding company model and
patient capital approach. It also reflects the strength of our operating
subsidiaries, all of which are rooted in industries that have attractive
long-term fundamentals and market dynamics. We are committed to building
upon the progress made this year and further enhancing shareholder
value.”
Omar Asali, HGI President, said, “Each of our market segments performed
well in fiscal 2013. In particular, Consumer Products grew revenues by
26% and operating profit by 16%, reflecting the benefits of the HHI
acquisition and power of Spectrum Brands’ ‘Same Performance, Less
Price/Better Value’ proposition in today’s economic environment.
Operating income in our Insurance segment has performed strongly and
grown to $522.9 million due to a more favorable economic environment and
our solid market position, while our financial and newly-established
energy businesses continued to gain scale and positive momentum. Our
focus remains on value and patient capital allocation as we continue to
build upon our disciplined strategy of seeking opportunities in
industries we know well and operating businesses with strong management
teams and strong free cash flow potential over the long term.”
Fiscal 2013 Results Highlights:
-
Total revenues increased 23.7% from the year ended September 30, 2012
("Fiscal 2012"), driven by strong growth across all operating segments.
-
Consolidated operating income increased 80.1% to $737.4 million in
Fiscal 2013 from $409.5 million in Fiscal 2012.
-
Net loss attributable to common and participating preferred
stockholders was $94.2 million, or $0.67 per common share attributable
to controlling interest ($0.67 diluted), compared to net income
attributable to common and participating preferred stockholders of
$29.9 million, or $0.15 per common share attributable to controlling
interest ($0.15 diluted), in Fiscal 2012.
-
Fiscal 2013 results include $248.0 million of realized investment
gains in the Insurance segment, a $101.6 million non-cash charge
related to the fair value of the preferred stock equity conversion
feature, reflecting HGI’s stock price appreciation of 23.0% from $8.43
to $10.37 per share during Fiscal 2013 and increased interest expense
primarily due to acquisition and other financing, along with
refinancing to lower interest rate debt.
-
HGI ended Fiscal 2013 with corporate cash and short-term investments
of approximately $301.2 million (primarily held at HGI and HGI Funding
LLC).
-
Consumer Products segment’s operating profit for Fiscal 2013 increased
$49.4 million, or 16.4%, to $351.2 million from $301.8 million for
Fiscal 2012.
-
Insurance segment’s operating profit for Fiscal 2013 increased by
$363.0 million, to $522.9 million from $159.9 million for Fiscal 2012.
Insurance segment’s adjusted operating income (“Insurance AOI”)
increased by $163.5 million, or 282.4%, to $221.4 million.
-
The Financial Services segment reported operating profit of $10.4
million for Fiscal 2013, compared to $2.5 million earned during Fiscal
2012, an increase of $7.9 million.
-
Energy segment reported revenues of $90.2 million and an operating
loss of $45.2 million primarily as a result of a non cash impairment
charge of $54.3 million of oil and natural gas properties.
-
HGI received dividends of approximately $127.1 million from its
subsidiaries, including $93.0 million from FGL, $22.8 million from
Spectrum Brands, $7.5 million from the EXCO/HGI JV, and $3.8 million
from Salus. In addition, at the close of the EXCO/HGI JV transaction,
HGI received a $22.7 million benefit, in the form of a purchase price
reduction.
Fiscal 2013 Business Highlights:
-
Finalized joint venture with EXCO Resources, Inc. to create the
EXCO/HGI JV to operate certain of EXCO’s producing U.S. conventional
oil and natural gas assets in the Permian Basin and the Cotton Valley
of East Texas and North Louisiana. Subsequently, EXCO/HGI JV purchased
the associated shallow Cotton Valley assets from an affiliate of BG
Group.
-
Completed Spectrum Brands' acquisition of Stanley Black & Decker,
Inc.'s Hardware & Home Improvement Group ("HHI"), including the
acquisition of the Taiwanese residential lockset business, Tong Lung
Metal Industry.
-
Refinanced $500.0 million of 10.625% senior secured notes on more
favorable terms, and further increased financial flexibility through
the issuance of an aggregate $925.0 million of 7.875% senior secured
notes.
-
Pursuant to a $50.0 million share repurchase program in August 2013,
purchased $12.3 million of common stock in the fourth quarter.
Detail on Fiscal 2013 Results:
HGI's consolidated revenues for Fiscal 2013 were $5.5 billion, compared
to $4.5 billion for Fiscal 2012. The increase was primarily driven by
the HHI acquisition in the Consumer Products segment, realized gains on
sales of fixed maturity securities in the Insurance segment, revenues
from the EXCO/HGI JV, and new business activity in the Energy and
Financial Services segments.
Operating profit for Fiscal 2013 increased $327.9 million, or 80.1%, to
$737.4 million from $409.5 million for Fiscal 2012. The increase was
primarily the result of revenue increases described above, and favorable
changes in reserve and amortization estimates in our Insurance segment.
The increase was offset in part by increased stock compensation, bonus
and transaction related costs in our Corporate segment, and impairments
of oil and gas properties at our Energy segment.
HGI's Fiscal 2013 results include a $101.6 million loss from the change
in the fair value of the equity conversion feature of preferred stock
which was the result of a 23.0% increase in HGI’s stock price from $8.43
to $10.37 per share during Fiscal 2013, and a $260.9 million increase in
interest expense, that was primarily due to acquisition and other
financing, along with refinancing to lower interest rate debt.
Additionally, the Company incurred tax expense totaling $187.3 million,
which was primarily driven by: (i) the profitability of FGL’s life
insurance business; (ii) pre-tax losses in the United States and some
foreign jurisdictions for which the tax benefits are offset by valuation
allowances; (iii) an increase in the fair value of the equity conversion
feature of the Preferred Stock with no tax benefit; (iv) tax
amortization of certain indefinite lived intangibles; and (v) tax
expense on income in certain foreign jurisdictions for which the Company
will not receive tax credits in the United States due to its tax loss
position. Partially offsetting these factors was a partial release of
U.S. valuation allowances as a result of a recent acquisition by
Spectrum Brands.
Consumer Products:
Net sales increased by $833.2 million, or 25.6%, to $4.09 billion in
Fiscal 2013 from $3.25 billion in Fiscal 2012. Excluding negative
foreign exchange impacts of $19.2 million, net sales increased $852.4
million, or 26.2%. The increase was primarily due to sales from HHI. In
addition, and to a lesser extent, sales benefited from an increase in
pet supplies as a result of increased companion animal sales, an
increase in electric personal care products due to new innovative
products and additional distribution channels, increased home and garden
product sales due to favorable weather conditions, and the full period
impact of the FURminator acquisition completed in December of 2011. The
increases were offset in part by the planned exit of marginally
profitable small appliances products, the ongoing, negative impact of a
one-time shaving and grooming category shelf space reduction at a major
retailer, and the negative impact of movements in foreign currency in
consumer batteries. Since the acquisition by Spectrum Brands on December
17, 2012, the HHI products category recorded net sales of $869.6 million.
Consumer Products delivered Adjusted EBITDA of $677.1 million, up $8.7
million, or 1.3% year-on-year (or 4.7% excluding the negative impact of
foreign exchange) including HHI as if acquired at the beginning of
Fiscal 2012. For the fourth consecutive year, legacy Spectrum Brands
delivered record adjusted EBITDA with growth of 2.1% to $495.5 million
in Fiscal 2013 versus Fiscal 2012, or 6.1% excluding the negative impact
of foreign exchange. Adjusted EBITDA is a non-U.S. GAAP measure that
excludes interest, income tax expense, restructuring and related
charges, acquisition and integration related charges, intangible asset
impairment and depreciation and amortization expenses - see "Non-U.S.
GAAP Measures" and the reconciliation of Adjusted EBITDA to the Consumer
Product segment's net income or loss table below.
Consumer Products operating income increased to $351.2 million in Fiscal
2013 from $301.8 million in Fiscal 2012, representing an increase of
16.4% or $49.4 million. Gross profit, representing Consumer Products’
net sales minus its cost of goods sold, for Fiscal 2013 was $1.39
billion, compared to $1.12 billion for Fiscal 2012. Spectrum Brands’
gross profit margin, representing gross profit as a percentage of net
sales, for Fiscal 2013 decreased to 34.0% from 34.3% in Fiscal 2012. The
slight decrease in gross profit margin was driven by a $31.0 million
increase to cost of goods sold due to the sale of inventory which was
revalued in connection with the acquisition of the HHI business, which
offset improvements to gross profit resulting from the exit of low
margin products in Spectrum Brands’ small appliances category.
For more information on HGI's Consumer Products segment, interested
parties should read Spectrum Brands' announcements and public filings,
including Spectrum Brands' fourth quarter earnings announcement, by
visiting Spectrum Brands' website: www.spectrumbrands.com.
Insurance:
The Insurance segment recorded annuity sales, which for GAAP purposes
are recorded as deposit liabilities (i.e. contract holder funds), for
Fiscal 2013 of $1.0 billion, compared to $1.7 billion for Fiscal 2012.
The reduced sales level reflects company initiated pricing changes that
depressed sales as well as high sales during the same period last year
due to the launch of new products. Such pricing changes were made in
order to maintain target profitability and target capital ratios. Sales
levels have been consistent for the past four quarters and FGL continues
to achieve target profitability levels. Additionally, during Fiscal
2013, FGL grew indexed universal life sales by 16%.
The Insurance segment had net income of $350.2 million for Fiscal 2013,
compared to $344.2 million for Fiscal 2012. The Insurance segment
reported operating income of $522.9 million for Fiscal 2013 versus
operating income of $159.9 million for Fiscal 2012. The increase is
primarily due to gains on bond sales and adjustments to amortization and
reserves to reflect updated assumptions related to interest rates and
option costs based on the current market environment, which
significantly improved during Fiscal 2013 versus last year.
The segment’s adjusted operating income (“Insurance AOI”) increased by
$163.5 million (pre-tax), or 282.4%, to $221.4 million from $57.9
million for Fiscal 2012. This increase is primarily due to annual
assumption changes made to the surrender rates, earned rates and future
index credits used in the FIA embedded derivative reserve calculation
which resulted in a reserve decrease of $86.5 million during the fourth
quarter of Fiscal 2013, net of related DAC and VOBA amortization and
unlocking impact. Also contributing to the increase were immediate
annuity mortality gains of $36.3 million during Fiscal 2013 caused by
large case deaths, as discussed above in benefits and other changes in
policy reserves, and the absence of an $11.0 million charge for
unclaimed death benefits, net of reinsurance, recorded in Fiscal 2012 -
see “Non-GAAP Measures” and a reconciliation of adjusted operating net
income before taxes to the Insurance segment's reported net income
before taxes below.
FGL had approximately $17.4 billion of assets under management as of
September 30, 2013, compared to $17.6 billion as of September 30, 2012.
The investment portfolio continues to be conservatively positioned in
its credit and duration profile and well matched against its liabilities.
As of September 30, 2013, HGI's Insurance segment had a net GAAP book
value of $1.2 billion (excluding Accumulated Other Comprehensive Income
("AOCI") of $112.9 million). As of September 30, 2013, the Insurance
segment's investment portfolio had $305.0 million in net unrealized
gains on a GAAP basis. FGL's statutory total adjusted capital at
September 30, 2013 was approximately $1,135.5 million.
On November 1, 2013, FGL announced that it is re-domesticating from
Maryland to Iowa effective November 1, 2013. Iowa’s deep insurance
talent pool, sophisticated regulatory approach to indexed products, and
strong business climate will allow FGL to continue to grow and pursue
its business. In addition, on August 29, 2013, FGL filed for a U.S.
initial public offering.
Energy:
On February 14, 2013, HGI closed on the EXCO/HGI JV transaction, which
created a private oil and gas limited partnership. From inception
through September 30, 2013, the partnership generated oil and natural
gas revenues of $90.2 million, while the segment experienced an
operating loss of $45.2 million, primarily as the result of the $54.3
million non-cash impairment of oil and natural gas properties. Energy
segment adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA-Energy") from inception through September
30, 2013 was $39.6 million. Adjusted EBITDA-Energy is a non-GAAP measure
that excludes non-recurring other operating items, accretion of discount
on asset retirement obligations, unrealized gains or losses of
derivatives, non-cash write-downs of assets, and stock-based
compensation - see "Non-GAAP Measures" and a reconciliation of Adjusted
EBITDA-Energy to the Energy segment's net loss below.
For the period from inception to September 30, 2013, the Energy
segment’s developmental activities in the Permian basin included 14
wells spud and 15 wells completed and turned-to-sales. For the same
period, the segment's net production was 18.1 Bcfe, consisting of
approximately 81% natural gas, 10% natural gas liquids and 9% oil.
On October 22, 2013, the Oil and Gas Financial Journal recognized the
EXCO/HGI JV as the Transaction of the Year under $1.0 Billion.
Financial Services:
The Financial Services segment had net income for Fiscal 2013 of $6.2
million. The Financial Services segment reported operating income of
$10.4 million in Fiscal 2013, compared to $2.5 million earned during
Fiscal 2012, an increase of $7.9 million. Revenues for Fiscal 2013
increased $20.3 million to $28.9 million from $8.6 million in Fiscal
2012. The increases in revenues and operating income during the year are
as a result of an increase in asset-backed loans originated and serviced
by the operations of Salus to $565.6 million in Fiscal 2013 from $181.5
million in Fiscal 2012.
Also contributing to revenues and operating income in Fiscal 2013 was an
increase in asset management fees earned from the Insurance segment by
the operations of Five Island, a newly formed, wholly-owned asset
management company, with up to $0.5 billion, as of September 30, 2013,
in assets under management related to the Reinsurance Transaction.
During Fiscal 2013, Salus closed on 33 transactions, representing $779.5
million in total commitments to a variety of well recognized businesses.
Additionally, Salus expanded its scope in third party asset management
with two successful closings of a CLO, representing $550.0 million in
direct loan participations.
Fourth Quarter 2013 Highlights:
-
Total revenues for the fourth quarter of Fiscal 2013 were $1.5
billion, compared to $1.2 billion in the same period last year, an
increase of 25.2%.
-
Operating income for the fourth quarter of Fiscal 2013 increased by
$85.1 million, or 70.7%, to $205.4 million from $120.3 million for
same period last year.
-
Consumer Products segment recorded net sales of $1.14 billion in the
fourth quarter of Fiscal 2013, compared to $832.6 million last year.
Consumer Products' operating income for the fourth quarter increased
$47.5 million, or 70.4%, to $115.0 million from $67.5 million for the
fourth quarter of Fiscal 2012.
-
Insurance segment recorded annuity sales of $246.9 million in the
fourth quarter of Fiscal 2013, compared to $264.4 million last year.
Insurance’s operating income for the fourth quarter was $171.4
million, compared to $70.4 million for the fourth quarter of Fiscal
2012.
-
Energy segment recorded net sales of $35.7 million in the fourth
quarter of Fiscal 2013 and operating loss of $50.5 million.
-
Financial Services segment recorded net sales of $7.7 million in the
fourth quarter of Fiscal 2013, compared to $6.5 million last year, and
operating income of $0.4 million compared to $3.0 million for the
fourth quarter of Fiscal 2012.
Forward Looking Statements
“Safe Harbor” Statement Under the Private Securities Litigation Reform
Act of 1995: This document contains, and certain oral statements made by
our representatives from time to time may contain, forward-looking
statements, including those statements regarding our subsidiaries'
ability to pay dividends. Such statements are subject to risks and
uncertainties that could cause actual results, events and developments
to differ materially from those set forth in or implied by such
statements. These statements are based on the beliefs and assumptions of
HGI's management and the management of HGI's subsidiaries (including
target businesses). Generally, forward-looking statements include
information concerning possible or assumed future distributions from
subsidiaries, other actions, events, results, strategies and
expectations and are generally identifiable by use of the words
“believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,”
“estimates,” “projects,” “may,” “will” “could,” “might,” or “continues”
or similar expressions. Factors that could cause actual results, events
and developments to differ include, without limitation: the ability of
HGI's subsidiaries (including, target businesses following their
acquisition) to generate sufficient net income and cash flows to make
upstream cash distributions, capital market conditions, HGI and its
subsidiaries ability to identify any suitable future acquisition
opportunities, efficiencies/cost avoidance, cost savings, income and
margins, growth, economies of scale, combined operations, future
economic performance, conditions to, and the timetable for, completing
the integration of financial reporting of acquired or target businesses
with HGI or HGI subsidiaries, completing future acquisitions and
dispositions, litigation, potential and contingent liabilities,
management's plans, changes in regulations, taxes and the those forward
looking statements included under the caption “Risk Factors” in HGI's
most recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q filed during fiscal 2013. All forward-looking statements described
herein are qualified by these cautionary statements and there can be no
assurance that the actual results, events or developments referenced
herein will occur or be realized. HGI does not undertake any obligation
to update or revise forward-looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to future
operation results.
Non-GAAP Measures
Management believes that certain non-GAAP financial measures may be
useful in certain instances to provide additional meaningful comparisons
between current results and results in prior operating periods.
Reconciliations of such measures to the most comparable GAAP measures
are included herein.
Our Consumer Products segment uses adjusted earnings before interest,
taxes, depreciation and amortization (“Adjusted EBITDA-Consumer
Products”), a non-GAAP financial measure. Management believes that
Adjusted EBITDA-Consumer Products is significant to gaining an
understanding of Spectrum Brands' results as it is frequently used by
the financial community to provide insight into an organization's
operating trends and facilitates comparisons between peer companies,
since interest, taxes, depreciation and amortization can differ greatly
between organizations as a result of differing capital structures and
tax strategies. Adjusted EBITDA-Consumer Products can also be a useful
measure of our Consumer Product segment's ability to service debt and is
one of the measures used for determining Spectrum Brand's debt covenant
compliance. Adjusted EBITDA-Consumer Products excludes certain items
that are unusual in nature or not comparable from period to period.
Our Insurance segment uses Adjusted Operating Income, a non-GAAP
financial measure frequently used throughout the insurance industry.
Adjusted Operating Income is calculated by adjusting the reported
insurance segment operating income to eliminate the impact of net
investment gains, excluding gains and losses on derivatives and
including net other-than-temporary impairment losses recognized in
operations, the effect of changes in the rates used to discount the FIA
embedded derivative liability and the effects of acquisition-related
reinsurance transactions. While these adjustments are an integral part
of the overall performance of our Insurance Segment, market conditions
impacting these items can overshadow the underlying performance of the
business. Accordingly, we believe using a measure which excludes their
impact is effective in analyzing the trends of our Insurance segment's
operations.
Our Energy segment uses adjusted earnings before interest, taxes,
depreciation and amortization (“Adjusted EBITDA-Energy”), a non-GAAP
financial measure. Management believes that Adjusted EBITDA-Energy is
significant to gaining an understanding of the EXCO/HGI Partnership's
results as it is frequently used by the financial community and
management to provide insight into an organization's operating trends
and facilitates comparisons between peer companies, since interest,
taxes, depreciation and amortization can differ greatly between
organizations as a result of differing capital structures and tax
strategies. Adjusted EBITDA-Energy excludes certain items that are
unusual in nature or not comparable from period to period such as
accretion of discount on asset retirement obligations, unrealized gains
or losses of derivatives, non-cash write-downs of assets, and
stock-based compensation.
While management believes that non-GAAP measurements are useful
supplemental information, such adjusted results are not intended to
replace GAAP financial results and should be read in conjunction with
those GAAP results.
(Tables Follow)
|
|
|
|
|
HARBINGER GROUP INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In millions, except per share data)
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Year ended September 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Net consumer product sales
|
|
$
|
1,137.8
|
|
|
$
|
832.6
|
|
|
$
|
4,085.6
|
|
|
$
|
3,252.4
|
|
Oil and natural gas
|
|
35.7
|
|
|
—
|
|
|
90.2
|
|
|
—
|
|
Insurance premiums
|
|
11.9
|
|
|
13.1
|
|
|
58.8
|
|
|
55.3
|
|
Net investment income
|
|
195.0
|
|
|
183.7
|
|
|
734.7
|
|
|
722.7
|
|
Net investment gains
|
|
100.1
|
|
|
155.4
|
|
|
511.6
|
|
|
410.0
|
|
Insurance and investment product fees and other
|
|
18.1
|
|
|
12.1
|
|
|
62.5
|
|
|
40.3
|
|
Total revenues
|
|
1,498.6
|
|
|
1,196.9
|
|
|
5,543.4
|
|
|
4,480.7
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
Consumer products cost of goods sold
|
|
741.3
|
|
|
552.7
|
|
|
2,695.3
|
|
|
2,136.8
|
|
Oil and natural gas direct operating costs
|
|
17.1
|
|
|
—
|
|
|
44.0
|
|
|
—
|
|
Benefits and other changes in policy reserves
|
|
100.1
|
|
|
217.7
|
|
|
531.8
|
|
|
777.4
|
|
Selling, acquisition, operating and general expenses
|
|
340.9
|
|
|
240.4
|
|
|
1,220.5
|
|
|
932.7
|
|
Impairment of oil and natural gas properties
|
|
54.3
|
|
|
—
|
|
|
54.3
|
|
|
—
|
|
Amortization of intangibles
|
|
39.5
|
|
|
65.8
|
|
|
260.1
|
|
|
224.3
|
|
Total operating costs and expenses
|
|
1,293.2
|
|
|
1,076.6
|
|
|
4,806.0
|
|
|
4,071.2
|
|
Operating income
|
|
205.4
|
|
|
120.3
|
|
|
737.4
|
|
|
409.5
|
|
Interest expense
|
|
(209.2
|
)
|
|
(56.6
|
)
|
|
(511.9
|
)
|
|
(251.0
|
)
|
Loss from the change in the fair value of the equity conversion
feature of preferred stock
|
|
(183.5
|
)
|
|
(32.6
|
)
|
|
(101.6
|
)
|
|
(156.6
|
)
|
Gain on contingent purchase price reduction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41.0
|
|
Other income (expense), net
|
|
2.1
|
|
|
8.5
|
|
|
(5.6
|
)
|
|
(17.5
|
)
|
(Loss) income from continuing operations before income taxes
|
|
(185.2
|
)
|
|
39.6
|
|
|
118.3
|
|
|
25.4
|
|
Income tax expense (benefit)
|
|
20.1
|
|
|
(135.9
|
)
|
|
187.3
|
|
|
(85.3
|
)
|
Net (loss) income
|
|
(205.3
|
)
|
|
175.5
|
|
|
(69.0
|
)
|
|
110.7
|
|
Less: Net (loss) income attributable to noncontrolling interest
|
|
(15.1
|
)
|
|
2.4
|
|
|
(23.2
|
)
|
|
21.2
|
|
Net (loss) income attributable to controlling interest
|
|
(190.2
|
)
|
|
173.1
|
|
|
(45.8
|
)
|
|
89.5
|
|
Less: Preferred stock dividends and accretion
|
|
12.1
|
|
|
14.0
|
|
|
48.4
|
|
|
59.6
|
|
Net (loss) income attributable to common and participating preferred
stockholders
|
|
$
|
(202.3
|
)
|
|
$
|
159.1
|
|
|
$
|
(94.2
|
)
|
|
$
|
29.9
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share attributable to controlling
interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.45
|
)
|
|
$
|
0.79
|
|
|
$
|
(0.67
|
)
|
|
$
|
0.15
|
|
Diluted
|
|
$
|
(1.45
|
)
|
|
$
|
0.78
|
|
|
$
|
(0.67
|
)
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HARBINGER GROUP INC. AND SUBSIDIARIES
|
ADJUSTED EBITDA AND ADJUSTED OPERATING INCOME RECONCILIATIONS
|
(In millions)
|
|
The table below shows the adjustments made to the reported net
(loss) income of the consumer products segment to calculate its
Adjusted EBITDA (unaudited):
|
|
|
|
|
|
|
|
|
Fiscal Quarter
|
|
Fiscal
|
Reconciliation to reported net (loss) income:
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Reported net (loss) income - consumer products segment
|
|
$
|
(36.9
|
)
|
|
$
|
5.4
|
|
|
$
|
(55.3
|
)
|
|
$
|
48.6
|
Add back:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
183.8
|
|
|
41.8
|
|
|
375.6
|
|
|
191.9
|
Income tax (benefit) expense
|
|
(27.5
|
)
|
|
21.6
|
|
|
27.4
|
|
|
60.4
|
HHI Business inventory fair value adjustment
|
|
—
|
|
|
—
|
|
|
31.0
|
|
|
—
|
Pre-acquisition earnings of HHI Business
|
|
—
|
|
|
53.0
|
|
|
30.3
|
|
|
183.1
|
Restructuring and related charges
|
|
6.3
|
|
|
3.7
|
|
|
34.0
|
|
|
19.6
|
Acquisition and integration related charges
|
|
7.9
|
|
|
10.5
|
|
|
48.4
|
|
|
31.1
|
Venezuela devaluation
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
—
|
Adjusted EBIT - consumer products segment
|
|
133.6
|
|
|
136.0
|
|
|
493.4
|
|
|
534.7
|
Depreciation and amortization, net of accelerated depreciation
|
|
|
|
|
|
|
|
|
Depreciation of properties
|
|
19.4
|
|
|
12.1
|
|
|
62.0
|
|
|
40.8
|
Amortization of intangibles
|
|
20.3
|
|
|
17.2
|
|
|
77.8
|
|
|
63.7
|
Stock-based compensation
|
|
11.3
|
|
|
13.4
|
|
|
43.9
|
|
|
29.2
|
Adjusted EBITDA - consumer products segment
|
|
$
|
184.6
|
|
|
$
|
178.7
|
|
|
$
|
677.1
|
|
|
$
|
668.4
|
|
|
|
|
|
The table below shows the adjustments made to the reported net
loss of the energy segment to calculate its Adjusted EBITDA
(unaudited):
|
|
|
|
|
|
|
|
Fiscal Quarter
|
|
Fiscal
|
Reconciliation to reported net loss:
|
|
2013
|
|
2013
|
Reported net loss - energy segment
|
|
$
|
(56.7
|
)
|
|
$
|
(56.8
|
)
|
Interest expense
|
|
4.1
|
|
|
10.3
|
|
Depreciation, amortization and depletion
|
|
12.5
|
|
|
31.0
|
|
EBITDA - energy segment
|
|
(40.1
|
)
|
|
(15.5
|
)
|
Accretion of discount on asset retirement obligations
|
|
0.5
|
|
|
1.2
|
|
Non-cash write down of oil and natural gas properties
|
|
54.3
|
|
|
54.3
|
|
Loss on derivative financial instruments
|
|
2.1
|
|
|
1.3
|
|
Cash settlements on derivative financial instruments
|
|
(0.5
|
)
|
|
(1.8
|
)
|
Stock based compensation expense
|
|
0.1
|
|
|
0.1
|
|
Adjusted EBITDA - energy segment
|
|
$
|
16.4
|
|
|
$
|
39.6
|
|
|
|
|
|
|
The table below shows the adjustments made to the reported net
income before income taxes of the insurance segment to calculate
its pretax adjusted operating income (unaudited):
|
|
|
|
|
|
|
|
Fiscal Quarter
|
|
Fiscal
|
Reconciliation to reported net income before income taxes:
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Reported net income before income taxes:
|
|
$
|
162.0
|
|
|
$
|
69.9
|
|
|
$
|
511.2
|
|
|
$
|
198.5
|
|
Interest expense
|
|
9.0
|
|
|
0.6
|
|
|
11.5
|
|
|
2.5
|
|
Other expense (income)
|
|
0.4
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
(0.1
|
)
|
Gain on contingent purchase price reduction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41.0
|
)
|
Reported operating income - insurance segment
|
|
171.4
|
|
|
70.4
|
|
|
522.9
|
|
|
159.9
|
|
Effect of investment gains, net of offsets
|
|
(41.9
|
)
|
|
(60.2
|
)
|
|
(248.0
|
)
|
|
(132.4
|
)
|
Effect of change in FIA embedded derivative discount rate, net of
offsets
|
|
5.3
|
|
|
7.8
|
|
|
(53.5
|
)
|
|
18.6
|
|
Effects of transaction-related reinsurance
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
Adjusted operating income - insurance segment
|
|
$
|
134.8
|
|
|
$
|
18.0
|
|
|
$
|
221.4
|
|
|
$
|
57.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Harbinger Group Inc.
For investor inquiries: Harbinger Group Inc. Investor
Relations Tara Gendelman, 212-906-8560
or For
media inquiries: Sard Verbinnen & Co Jamie Tully or
David Millar 212-687-8080
|