Consolidating Financial Information

9 Months Ended

Jun. 30, 2017

following schedules present the Company’s accompanying Condensed Consolidated Balance Sheets information at June 30, 2017 and September 30, 2016, and accompanying Condensed Consolidated Statements of Operations information for the nine months ended June 30, 2017 and 2016. These schedules present the individual segments of the Company and their contribution to the Condensed Consolidated Financial Statements. Amounts presented will not necessarily be the same as those in the individual financial statements of the Company’s subsidiaries due to adjustments for purchase accounting, income taxes and noncontrolling interests. In addition, some of the Company’s subsidiaries use a classified balance sheet which also leads to differences in amounts reported for certain line items.

The Corporate and Other column primarily reflects the parent company’s investment in its subsidiaries, invested cash portfolio and corporate long term debt, and the results of Salus and HGI Energy. Reflected in Corporate and Other is also $84.4 of negative book value of HGI Asset Management Holdings LLC as of June 30, 2017, which is primarily attributable to historical loan losses incurred by Salus. The elimination adjustments are for intercompany assets and liabilities, adjustments to align segment accounting policies with the consolidated basis, interest and dividends, the parent company’s investment in capital stocks of subsidiaries, and various reclasses of debit or credit balances to the amounts in consolidation. Purchase accounting adjustments have been pushed down to the appropriate subsidiary.

HRG Group, Inc. - Condensed Consolidating Balance Sheets Information



June 30, 2017	Consumer Products		Corporate and Other			Discontinued Operations		Eliminations and adjustments			Total
Assets:
Investments in subsidiaries and affiliates	$	—	$	2,605.2		$	—	$	(2,605.2	)	$	—
Affiliated loans and receivables	—		0.2			—		(0.2		)	—
Cash and cash equivalents	109.9		156.3			—		—			266.2
Receivables, net	658.3		2.7			—		—			661.0
Inventories, net	843.7		—			—		—			843.7
Deferred tax assets	18.3		—			—		—			18.3
Property, plant and equipment, net	675.1		0.8			—		—			675.9
Goodwill	2,621.3		—			—		—			2,621.3
Intangibles, net	2,453.4		—			—		—			2,453.4
Other assets	141.1		2.9			—		—			144.0
Assets of business held for sale	—		—			27,811.7		—			27,811.7
Total assets	$	7,521.1	$	2,768.1		$	27,811.7	$	(2,605.4	)	$	35,495.5

Liabilities and Equity
Debt	$	4,100.6	$	1,791.8		$	—	$	140.1		$	6,032.5
Accounts payable and other current liabilities	871.2		70.6			—		—			941.8
Employee benefit obligations	112.6		4.5			—		—			117.1
Deferred tax liabilities	583.9		12.1			—		—			596.0
Other liabilities	37.6		2.9			—		—			40.5
Affiliated debt and payables	—		158.5			—		(158.5		)	—
Liabilities of business held for sale	—		—			25,870.9		—			25,870.9
Total liabilities	5,705.9		2,040.4			25,870.9		(18.4		)	33,598.8
Total stockholders’ equity	1,060.3		729.3			1,526.7		(2,587.0		)	729.3
Noncontrolling interests	754.9		(1.6		)	414.1		—			1,167.4
Total permanent equity	1,815.2		727.7			1,940.8		(2,587.0		)	1,896.7
Total liabilities and equity	$	7,521.1	$	2,768.1		$	27,811.7	$	(2,605.4	)	$	35,495.5



September 30, 2016	Consumer Products		Corporate and Other			Discontinued Operations		Eliminations and adjustments			Total
Assets:
Investment in subsidiaries and affiliates	$	—	$	2,405.3		$	—	$	(2,405.3	)	$	—
Cash and cash equivalents	275.3		189.9			—		—			465.2
Receivables, net	538.2		0.9			—		—			539.1
Inventories, net	740.6		—			—		—			740.6
Deferred tax assets	18.3		—			—		—			18.3
Property, plant and equipment, net	542.1		1.3			—		—			543.4
Goodwill	2,478.4		—			—		—			2,478.4
Intangibles, net	2,372.5		—			—		—			2,372.5
Other assets	103.7		34.6			—		—			138.3
Assets of business held for sale	—		—			26,284.3		—			26,284.3
Total assets	$	7,069.1	$	2,632.0		$	26,284.3	$	(2,405.3	)	$	33,580.1

Liabilities and Equity:
Debt	$	3,620.2	$	1,747.7		$	—	$	157.9		$	5,525.8
Accounts payable and other current liabilities	931.6		51.6			—		—			983.2
Employee benefit obligations	120.2		5.2			—		—			125.4
Deferred tax liabilities	532.7		13.3			—		—			546.0
Other liabilities	20.4		8.3			—		—			28.7
Affiliated debt and payables	—		171.2			—		(171.2		)	—
Liabilities of business held for sale	—		—			24,553.8		—			24,553.8
Total liabilities	5,225.1		1,997.3			24,553.8		(13.3		)	31,762.9
Total stockholders’ equity	1,040.4		638.1			1,351.6		(2,392.0		)	638.1
Noncontrolling interests	803.6		(3.4		)	378.9		—			1,179.1
Total permanent equity	1,844.0		634.7			1,730.5		(2,392.0		)	1,817.2
Total liabilities and equity	$	7,069.1	$	2,632.0		$	26,284.3	$	(2,405.3	)	$	33,580.1

HRG Group, Inc. - Condensed Consolidating Statements of Operations Information



Nine months ended June 30, 2017	Consumer Products			Corporate and Other			Discontinued Operations		Eliminations and adjustments			Total
Revenues:
Net sales	$	3,685.6		$	—		$	—	$	—		$	3,685.6
Net investment income	—			1.1			—		—			1.1
Total revenues	3,685.6			1.1			—		—			3,686.7
Operating costs and expenses:
Cost of goods sold	2,307.1			—			—		—			2,307.1
Selling, acquisition, operating and general expenses	925.5			41.0			—		—			966.5
Total operating costs and expenses	3,232.6			41.0			—		—			3,273.6
Operating income	453.0			(39.9		)	—		—			413.1
Equity in net income of subsidiaries	—			281.7			—		(281.7		)	—
Interest expense	(158.8		)	(110.3		)	—		(0.5		)	(269.6		)
Affiliated interest expense	—			(5.6		)	—		5.6			—
Other (expense) income, net	(2.9		)	0.6			—		—			(2.3		)
Income from continuing operations before income taxes	291.3			126.5			—		(276.6		)	141.2
Income tax expense (benefit)	88.8			(5.6		)	—		4.2			87.4
Net income from continuing operations	202.5			132.1			—		(280.8		)	53.8
Income (loss) from discontinued operations, net of tax	—			—			195.4		—			195.4
Net income (loss)	202.5			132.1			195.4		(280.8		)	249.2
Less: Net income attributable to noncontrolling interest	85.5			(0.1		)	31.6		—			117.0
Net income (loss) attributable to controlling interest	$	117.0		$	132.2		$	163.8	$	(280.8	)	$	132.2



Nine months ended June 30, 2016	Consumer Products			Corporate and Other			Discontinued Operations			Eliminations and adjustments			Total
Revenues:
Net sales	$	3,790.0		$	—		$	—		$	—		$	3,790.0
Net investment income	—			7.9			—			—			7.9
Other	—			0.9			—			—			0.9
Total revenues	3,790.0			8.8			—			—			3,798.8
Operating costs and expenses:
Cost of goods sold	2,355.8			—			—			—			2,355.8
Selling, acquisition, operating and general expenses	936.4			68.6			—			—			1,005.0
Total operating costs and expenses	3,292.2			68.6			—			—			3,360.8
Operating income	497.8			(59.8		)	—			—			438.0
Equity in net income of subsidiaries	—			(27.2		)	—			27.2			—
Interest expense	(175.8		)	(107.2		)	—			(6.8		)	(289.8		)
Affiliated interest expense	—			(9.4		)	—			9.4			—
Other (expense) income, net	(6.5		)	4.4			—			1.9			(0.2		)
Income from continuing operations before income taxes	315.5			(199.2		)	—			31.7			148.0
Income tax expense (benefit)	46.9			(2.5		)	—			(48.9		)	(4.5		)
Net income from continuing operations	268.6			(196.7		)	—			80.6			152.5
Income (loss) from discontinued operations, net of tax	—			—			(222.6		)	—			(222.6		)
Net income (loss)	268.6			(196.7		)	(222.6		)	80.6			(70.1		)
Less: Net income attributable to noncontrolling interest	113.5			(5.2		)	13.1			—			121.4
Net income (loss) attributable to controlling interest	$	155.1		$	(191.5	)	$	(235.7	)	$	80.6		$	(191.5	)