Consolidating Financial Information

9 Months Ended

Jun. 30, 2013

The following schedules present the Company’s consolidating balance sheet information at June 30, 2013 and September 30, 2012, and consolidating statements of operations information for the nine months ended June 30, 2013 and July 1, 2012. These schedules present the individual segments of the Company and their contribution to the consolidated condensed 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. The elimination adjustments are for intercompany assets and liabilities, 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.

Harbinger Group Inc. - Condensed Consolidating Balance Sheet Information



June 30, 2013	Consumer Products		Insurance		Energy		Financial Services		Corporate and Other		Eliminations			Total
Assets:
Investments	$	—	$	16,298.5	$	—	$	268.0	$	34.0	$	—		$	16,600.5
Investments in subsidiaries and affiliates	—		62.0		—		—		2,088.6		(2,150.6		)	—
Affiliated loans and receivables	—		277.2		—		1.2		—		(278.4		)	—
Cash and cash equivalents	99.0		1,003.0		16.5		37.2		88.0		—			1,243.7
Receivables, net	542.1		41.0		27.7		0.5		—		—			611.3
Inventories, net	707.3		—		—		—		—		—			707.3
Accrued investment income	—		158.1		—		1.8		—		—			159.9
Reinsurance recoverable	—		2,371.0		—		—		—		—			2,371.0
Deferred tax assets	21.3		253.7		—		—		4.9		—			279.9
Properties, net	355.2		7.0		636.0		0.6		0.6		—			999.4
Goodwill	1,470.2		—		—		—		—		—			1,470.2
Intangibles, including DAC and VOBA, net	2,169.4		480.5		—		—		—		—			2,649.9
Other assets	173.0		60.6		5.3		7.6		25.4		—			271.9
Total assets	$	5,537.5	$	21,012.6	$	685.5	$	316.9	$	2,241.5	$	(2,429.0	)	$	27,365.0



Liabilities and Equity:
Insurance reserves	$	—	$	19,025.2	$	—	$	—		$	—	$	—		$	19,025.2
Debt	3,226.1		300.0		274.9		57.5			695.8		—			4,554.3
Accounts payable and other current liabilities	704.3		27.4		31.6		3.3			76.8		—			843.4
Equity conversion feature of preferred stock	—		—		—		—			147.3		—			147.3
Employee benefit obligations	109.3		—		—		—			4.8		—			114.1
Deferred tax liabilities	503.5		—		—		—			4.9		—			508.4
Other liabilities	24.8		373.1		25.7		14.9			1.1		—			439.6
Affiliated debt and payables	—		1.2		103.4		173.8			—		(278.4		)	—
Total liabilities	4,568.0		19,726.9		435.6		249.5			930.7		(278.4		)	25,632.3
Temporary equity	—		—		—		—			325.4		—			325.4
Total stockholders' equity	547.2		1,285.7		249.9		67.8			985.4		(2,150.6		)	985.4
Noncontrolling interests	422.3		—		—		(0.4		)	—		—			421.9
Total permanent equity	969.5		1,285.7		249.9		67.4			985.4		(2,150.6		)	1,407.3
Total liabilities and equity	$	5,537.5	$	21,012.6	$	685.5	$	316.9		$	2,241.5	$	(2,429.0	)	$	27,365.0



September 30, 2012	Consumer Products		Insurance		Energy		Financial Services		Corporate and Other		Eliminations			Total
Assets:
Investments	$	—	$	16,556.7	$	—	$	180.1	$	181.6	$	—		$	16,918.4
Investment in subsidiaries and affiliates	—		32.0		—		—		1,858.2		(1,890.2		)	—
Affiliated loans and receivables	—		150.1		—		—		—		(150.1		)	—
Cash and cash equivalents	158.0		1,054.6		—		12.4		245.7		—			1,470.7
Receivables, net	373.4		41.0		—		—		—		—			414.4
Inventories, net	452.6		—		—		—		—		—			452.6
Accrued investment income	—		191.6		—		—		—		—			191.6
Reinsurance recoverable	—		2,363.1		—		—		—		—			2,363.1
Deferred tax assets	28.2		279.6		—		—		4.9		—			312.7
Properties, net	214.0		6.9		—		0.4		0.3		—			221.6
Goodwill	694.2		—		—		—		—		—			694.2
Intangibles, including DAC and VOBA, net	1,715.0		273.5		—		—		—		—			1,988.5
Other assets	116.2		41.2		—		2.2		13.0		—			172.6
Total assets	$	3,751.6	$	20,990.3	$	—	$	195.1	$	2,303.7	$	(2,040.3	)	$	25,200.4

Liabilities and Equity:
Insurance reserves	$	—	$	19,051.0	$	—	$	—	$	—	$	—		$	19,051.0
Debt	1,669.3		—		—		—		497.7		—			2,167.0
Accounts payable and other current liabilities	594.2		93.2		—		—		66.8		—			754.2
Equity conversion feature of preferred stock	—		—		—		—		232.0		—			232.0
Employee benefit obligations	90.0		—		—		—		5.1		—			95.1
Deferred tax liabilities	377.5		—		—		—		4.9		—			382.4
Other liabilities	31.6		555.3		—		13.3		0.4		—			600.6
Affiliated debt and payables	—		—		—		150.1		—		(150.1		)	—
Total liabilities	2,762.6		19,699.5		—		163.4		806.9		(150.1		)	23,282.3
Temporary equity	—		—		—		—		319.2		—			319.2
Total stockholders' equity	567.7		1,290.8		—		31.7		1,177.6		(1,890.2		)	1,177.6
Noncontrolling interests	421.3		—		—		—		—		—			421.3
Total permanent equity	989.0		1,290.8		—		31.7		1,177.6		(1,890.2		)	1,598.9
Total liabilities and equity	$	3,751.6	$	20,990.3	$	—	$	195.1	$	2,303.7	$	(2,040.3	)	$	25,200.4

Harbinger Group Inc. - Condensed Consolidating Statements of Operations Information



Nine months ended June 30, 2013	Consumer Products			Insurance			Energy			Financial Services			Corporate and Other			Eliminations			Total
Revenues:
Net consumer product sales	$	2,947.8		$	—		$	—		$	—		$	—		$	—		$	2,947.8
Oil and natural gas	—			—			54.5			—			—			—			54.5
Insurance premiums	—			46.9			—			—			—			—			46.9
Net investment income	—			519.5			—			27.8			—			(7.6		)	539.7
Net investment gains (losses)	—			411.5			—			—			—			—			411.5
Insurance and investment product fees and other	—			44.4			—			1.7			—			(1.7		)	44.4
Total revenues	2,947.8			1,022.3			54.5			29.5			—			(9.3		)	4,044.8
Operating costs and expenses:
Consumer products cost of goods sold	1,954.0			—			—			—			—			—			1,954.0
Oil and natural gas direct operating costs	—			—			26.9			—			—			—			26.9
Benefits and other changes in policy reserves	—			431.7			—			—			—			—			431.7
Selling, acquisition, operating and general expenses	700.2			76.0			22.3			12.9			68.2			—			879.6
Amortization of intangibles	57.5			163.1			—			—			—			—			220.6
Total operating costs and expenses	2,711.7			670.8			49.2			12.9			68.2			—			3,512.8
Operating income	236.1			351.5			5.3			16.6			(68.2		)	(9.3		)	532.0
Equity in net income (losses) of subsidiaries	—			—			—			—			235.5			(235.5		)	—
Interest expense	(191.8		)	(5.9		)	(2.8		)	—			(102.2		)	—			(302.7		)
Affiliated interest income	—			3.4			(3.4		)	(6.6		)	—			6.6			—
Gain (loss) from the change in the fair value of the equity conversion feature of preferred stock	—			—			—			—			81.9			—			81.9
Other income (expense), net	(7.9		)	0.2			0.8			(0.9		)	0.1			—			(7.7		)
(Loss) income from continuing operations before income taxes	36.4			349.2			(0.1		)	9.1			147.1			(238.2		)	303.5
Income tax expense (benefit)	54.9			112.1			—			0.2			—			—			167.2
Net income (loss)	(18.5		)	237.1			(0.1		)	8.9			147.1			(238.2		)	136.3
Less: Net income (loss) attributable to noncontrolling interest	(8.5		)	—			—			0.4			—			—			(8.1		)
Net income (loss) attributable to controlling interest	(10.0		)	237.1			(0.1		)	8.5			147.1			(238.2		)	144.4
Less: Preferred stock dividends and accretion	—			—			—			—			36.3			—			36.3
Net income (loss) attributable to common and participating preferred stockholders	$	(10.0	)	$	237.1		$	(0.1	)	$	8.5		$	110.8		$	(238.2	)	$	108.1



Nine months ended July 1, 2012	Consumer Products			Insurance			Energy		Financial Services			Corporate and Other			Eliminations			Total
Revenues:
Net consumer product sales	$	2,419.9		$	—		$	—	$	—		$	—		$	—		$	2,419.9
Oil and natural gas	—			—			—		—			—			—			—
Insurance premiums	—			42.2			—		—			—			—			42.2
Net investment income	—			537.6			—		2.1			—			(0.7		)	539.0
Net investment gains (losses)	—			254.6			—		—			—			—			254.6
Insurance and investment product fees and other	—			28.2			—		—			—			—			28.2
Total revenues	2,419.9			862.6			—		2.1			—			(0.7		)	3,283.9
Operating costs and expenses:
Consumer products cost of goods sold	1,584.1			—			—		—			—			—			1,584.1
Benefits and other changes in policy reserves	—			559.7			—		—			—			—			559.7
Selling, acquisition, operating and general expenses	555.1			101.4			—		2.6			33.3			—			692.4
Amortization of intangibles	46.5			112.0			—		—			—			—			158.5
Total operating costs and expenses	2,185.7			773.1			—		2.6			33.3			—			2,994.7
Operating income	234.2			89.5			—		(0.5		)	(33.3		)	(0.7		)	289.2
Equity in net income (losses) of subsidiaries	—			—			—		—			139.9			(139.9		)	—
Interest expense	(150.1		)	(1.9		)	—		—			(42.4		)	—			(194.4		)
Affiliated interest income	—			—			—		(0.7		)	—			0.7			—
Gain (loss) from the change in the fair value of the equity conversion feature of preferred stock	—			—			—		—			(124.0		)	—			(124.0		)
Gain on contingent purchase price reduction	—			41.0			—		—			—			—			41.0
Other income (expense), net	(2.2		)	—			—		—			(23.8		)	—			(26.0		)
Income (loss) from continuing operations before income taxes	81.9			128.6			—		(1.2		)	(83.6		)	(139.9		)	(14.2		)
Income tax expense (benefit)	38.8			11.8			—		—			—			—			50.6
Net income (loss)	43.1			116.8			—		(1.2		)	(83.6		)	(139.9		)	(64.8		)
Less: Net income (loss) attributable to noncontrolling interest	18.8			—			—		—			—			—			18.8
Net income (loss) attributable to controlling interest	24.3			116.8			—		(1.2		)	(83.6		)	(139.9		)	(83.6		)
Less: Preferred stock dividends and accretion	—			—			—		—			45.6			—			45.6
Net income (loss) attributable to common and participating preferred stockholders	$	24.3		$	116.8		$	—	$	(1.2	)	$	(129.2	)	$	(139.9	)	$	(129.2	)