Harbinger Group Inc. Reports Third Quarter Fiscal 2013 Results

  Harbinger Group Inc. Reports Third Quarter Fiscal 2013 Results

   Revenues Up 39%, Operating Income Increased 124% from Prior Year Period

 Results Reflect Continued Success and Strong Trajectory Across All Operating
                                   Segments

    HGI Board Authorized $50 Million Stock Repurchase Program Underscoring
             Commitment to Realizing and Building Long Term Value

Business Wire

NEW YORK -- August 8, 2013

Harbinger Group Inc. ("HGI"; NYSE: HRG), a diversified holding company focused
on acquiring and growing attractive businesses, today announced its
consolidated results for the third quarter of Fiscal 2013 ended on June30,
2013 (the "Fiscal 2013 Quarter"). 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 Holdings, Inc. (“FGL”)
    and Front Street Re, Ltd. ("FSR");
  *Energy, which includes the company's EXCO/HGI Joint Venture (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, “HGI
performance this quarter demonstrates the value of our diversified holding
company model and the strength of our underlying operating subsidiaries, as
they continue to execute on their business strategies. HGI remains well
positioned for the future and we look forward to continuing to grow the
powerful platform we have built and increasing shareholder value.”

Omar Asali, President of HGI, said, “We had a strong quarter operationally as
evidenced by the 39% increase in revenues and a 124% increase in operating
income. Operating income at our Consumer Products segment increased by 22% as
a result of the continued positive performance of Spectrum Brands, including
the successful integration of the Hardware and Home Improvement business
("HHI"). The Insurance segment generated operating income of just over $78.5
million, compared to a small loss in the Fiscal 2012 quarter. Additionally,
both the Energy segment, which we established in February, and Financial
Services continue to ramp up nicely. We see significant value in each of our
operating businesses and strong growth potential, and we expect that HGI will
continue to benefit from their success."

Separately, HGI announced today that its Board of Directors approved a share
repurchase program of up to $50 million of HGI common stock. This stock
repurchase program underscores HGI's ability to act opportunistically and
capitalize on the significant value it sees in HGI and HGI's underlying
businesses.

Third Quarter Fiscal 2013 Results Highlights:

  *HGI recorded total revenues of $1.4 billion for the Fiscal 2013 Quarter,
    an increase of $398.4 million, or 39.4% from the third quarter of Fiscal
    2012 (the "Fiscal 2012 Quarter").
  *Consolidated operating income was $182.6 million in the Fiscal 2013
    Quarter, compared to $81.5 million in the Fiscal 2012 Quarter, an increase
    of $101.1 million (124.0%).
  *Net income attributable to common and participating preferred stockholders
    increased to $91.6 million, or $0.45 per common share attributable to
    controlling interest ($0.25 diluted), compared to a net loss of $149.1
    million, or $1.07 per common share attributable to controlling interest
    ($1.07 diluted), in the Fiscal 2012 Quarter.
  *Fiscal 2013 Quarter results include a $52.6 million gain from the change
    in the fair value of the equity conversion feature of preferred stock
    which was the result of HGI's stock price decreasing 8.7% from $8.26 to
    $7.54 per share during the quarter; $20.4 million of realized investment
    gains in the Insurance segment; and tax expense of $36.8 million.
  *Spectrum Brands paid a quarterly common stock dividend of $0.25 per share
    on May 14, 2013, resulting in $7.6 million in dividends to HGI. Through
    the nine months ended June 30, 2013, HGI received dividends of
    approximately $108.7 million from its subsidiaries, including $93.0
    million, $15.0 million and $0.7 million from FGL, Spectrum Brands and
    Salus, respectively. The FGL dividend of $93.0 million includes the
    special dividend of $73.0 million paid out of the proceeds from the $300.0
    million aggregate principal amount of the FGL notes.
  *HGI ended the quarter with corporate cash and short-term investments of
    approximately $122.0 million (primarily held at HGI and HGI Funding, LLC),
    which supports HGI's business strategy and growth of existing businesses.
  *Subsequent to quarter-end, HGI completed a successful tack-on notes
    offering of $225.0 million in senior-secured notes. The offering was
    approximately 4x over-subscribed and upsized from an initial offering of
    $150.0 million in senior secured notes.

Quarterly Segment Highlights:

  *Consumer Products segment operating income for the Fiscal 2013 Quarter
    increased by $20.5 million, or 21.5%, to $115.7 million from $95.2 million
    in the Fiscal 2012 Quarter, and adjusted earnings before interest, taxes,
    depreciation and amortization ("Adjusted EBITDA") increased by 1.9% to
    $188.5 million from $185.0 million. See Non- GAAP measures below for more
    details.
  *On April 8, 2013, Spectrum Brands completed the acquisition of the
    Taiwanese residential lockset business, Tong Lung Metal Industry, closing
    the second and final stage of the acquisition of HHI.
  *Insurance segment operating income for the Fiscal 2013 Quarter increased
    $80.0 million, to $78.5 million from an operating loss of $1.5 million for
    the Fiscal 2012 Quarter.
  *On July 17, 2013, Standard & Poor's Ratings Services upgraded Fidelity &
    Guaranty Life to investment grade financial strength (BBB- from BB+) with
    a positive outlook. Fidelity & Guaranty Life continued to deliver strong
    GAAP and statutory results, with GAAP book value (ex AOCI) increasing
    approximately 63% from the Fiscal 2012 Quarter, and statutory total
    adjusted capital increasingapproximately 32%.
  *Energy segment oil and natural gas revenues were $37.8 million for the
    Fiscal 2013 Quarter and operating income for the Fiscal 2013 Quarter was
    $4.8 million. Energy segment Adjusted EBITDA for the Fiscal 2013 Quarter
    was $16.0 million. See Non-GAAP measures below for more details.
  *Financial Services segment reported operating income of $4.1 million in
    the Fiscal 2013 Quarter, compared to $0.5 million during the Fiscal 2012
    Quarter. Salus Capital Partners closed on seven transactions in Fiscal
    2013 Quarter bringing the total number of deals since inception to 40 and
    cumulative committed capital to over $800 million.

Detail on Third Quarter Fiscal 2013 Results:

HGI's consolidated revenues for the Fiscal 2013 Quarter were $1.4 billion,
compared to $1.0 billion for the Fiscal 2012 Quarter. The increase was
primarily driven by the HHI acquisition in the Consumer Products segment, and
to a lesser extent, realized and unrealized gains on derivative instruments,
contributions from the newly formed EXCO/HGI JV, and new business activity in
the Financial Services segment.

HGI's consolidated operating income for the Fiscal 2013 Quarter increased by
$101.1 million, or 124.0%, to $182.6 million from $81.5 million for the Fiscal
2012 Quarter. The increase was primarily the result of favorable investment
gains in the Insurance segment, the HHI acquisition in the Consumer Products
segment, and new business activity in the Energy and Financial Services
segments. The increase was offset in part by increased salary and overhead
costs in the Corporate segment to support growth in the business.

HGI reported a net income attributable to common stockholders of $91.6
million, or $0.45 per common share attributable to controlling interest ($0.25
diluted), compared to a net loss of $149.1 million, or $1.07 per common share
attributable to controlling interest ($1.07 diluted), in the Fiscal 2012
Quarter.

HGI's Fiscal 2013 Quarter results include a $52.6 million gain from the change
in the fair value of the equity conversion feature of preferred stock, which
was the result of HGI's stock price decreasing 8.7% from $8.26 to $7.54 per
share during the quarter and tax expense of $36.8 million resulting in an
effective tax rate of 23.7%.

Consumer Products:

Consumer Products net sales for the Fiscal 2013 Quarter increased $265.0
million, or 32.1%, to $1.09 billion from $824.8 million in the Fiscal 2012
Quarter. The increase was primarily due to sales from the HHI acquisition. The
increase was offset in part by a decline in household insect control sales in
the Home and Garden product line due to the late arrival of warm weather that
resulted in a delay to the major selling season for these products; the
planned exit from marginally profitable products in small appliances, largely
in North America; and lower consumer battery sales resulting from the
non-recurrence of promotions and inventory management at key retailers.

In its second full quarter since the acquisition bySpectrum
BrandsonDecember 17, 2012, the hardware and home improvement products
category recorded net sales of$285.2 million, an increase of 12.7% compared
to$253.0 million as if combined with the Consumer Products segmentin the
Fiscal 2012 Quarter. The revenue growth was primarily driven by double-digit
improvements in the product category's U.S. residential security and plumbing
businesses. The hardware and home improvement product category recorded net
income, as adjusted, of$40.1 in the Fiscal 2013 Quarter. The Adjusted EBITDA
margin for the hardware and home improvement product category in the Fiscal
2013 Quarter approached 18.6%. The integration of HHI is on track and
proceeding well.

Gross profit, representing Consumer Products' net sales minus its cost of
goods sold, for the Fiscal 2013 Quarter was $382.8 million compared to $291.7
million for the Fiscal 2012 Quarter. The HHI acquired products contributed
$101.4 million in gross profit. Spectrum Brands' gross profit margin,
representing gross profit as a percentage of its net sales, for the Fiscal
2013 Quarter decreased slightly to 35.1% from 35.4% for the Fiscal 2012
Quarter. The decrease in gross profit margin was driven by unfavorable product
mix and increased product costs.

Consumer Products operating income increased $20.5 million to $115.7 million
in the Fiscal 2013 Quarter compared to $95.2 million in the Fiscal 2012
Quarter. The increase was due to the HHI acquisition contributing $39.4
million of operating income, which was partially offset by additional selling,
acquisition, operating and general expenses from the inclusion of HHI and a
decrease in the global batteries and appliances businesses profit due to
decreased sales; unfavorable product mix and pricing pressures in the U.S.

Adjusted EBITDA-Consumer Products for the Fiscal 2013 Quarter was $188.5
million, an increase of 1.9% compared to $185.0 million in the Fiscal 2012
Quarter, including the HHI acquisition in the prior year period on a pro forma
basis, reflecting higher sales, synergy benefits and cost reduction
initiatives. Adjusted EBITDA-Consumer Products as a percentage of Consumer
Products net sales improved slightly to 17.3% versus 17.2% in the Fiscal 2012
Quarter, including the HHI acquisition in the prior year period on a pro forma
basis. Legacy Spectrum Brands' Adjusted EBITDA-Consumer Products of $135.5
million in the Fiscal 2013 Quarter represented the eleventh consecutive
quarter of year-over-year adjusted EBITDA growth, starting with the first
quarter of fiscal 2011. Adjusted EBITDA-Consumer Products is a non-GAAP
measure that excludes interest, income tax expense, restructuring and related
charges, acquisition and integration related charges, and depreciation and
amortization expenses - see “Non-GAAP Measures” and a reconciliation of
Adjusted EBITDA-Consumer Products to the Consumer Product segment's operating
income below.

For more information on HGI's Consumer Products segment, interested parties
should read Spectrum Brands' announcements and public filings, including
Spectrum Brands' third quarter earnings announcement, by visiting Spectrum
Brands' filings with the Securities & Exchange Commission at www.sec.gov.

Insurance:

The insurance segment recorded annuity sales, which for GAAP purposes are
recorded as deposit liabilities (i.e. contract holder funds), for the Fiscal
2013 Quarter of $270.8 million compared to $468.0 million in the Fiscal 2012
Quarter. On a sequential basis, annuity sales increased 11% as compared to the
Fiscal 2013 second quarter. During the Fiscal 2013 Quarter, FGL refreshed its
flagship Prosperity Elite fixed deferred index annuity and launched a new
traditional fixed annuity, Simplicity Elite, targeted at solving income
distribution needs for seniors.

The insurance segment reported operating income of $78.5 million for the
Fiscal 2013 Quarter versus an operating loss of $1.5 million for the Fiscal
2012 Quarter. During the Fiscal 2013 Quarter the revaluation of liabilities to
reflect increased interest rates resulted in an increase in operating income
of $52.3 million quarter over quarter. In the Fiscal 2012 Quarter, a one-time
charge in connection with FGL's use of the U.S. Social Security
Administration's Death Master File to identify potential life insurance claims
reduced operating earnings by $11.0 million.

The segment recorded adjusted operating income of $23.7 million (pre-tax) for
the Fiscal 2013 Quarter, an increase of $20.3 million from $3.4 million for
the Fiscal 2012 Quarter. The increase is primarily due to the absence of the
one-time $11.0 million net increase in the claims liability recorded in the
prior year quarter as referenced above. Adjusted operating income is a
non-GAAP insurance industry measure that eliminates the impact of realized
investment gains (losses), the effect of interest rate changes on the fixed
indexed annuities ("FIA") embedded derivative liability, and the effects of
acquisition-related reinsurance transactions - see “Non-GAAP Measures” and a
reconciliation of adjusted operating income to the Insurance segment's
operating income below.

FGL has approximately $17.4 billion of assets under management as of June30,
2013, compared to $18.1 billion as of March 31, 2013. The investment portfolio
continues to be conservatively positioned in its credit and duration profile
and well matched against its liabilities.

As of June 30, 2013, HGI's Insurance segment had a net GAAP book value of
$1,110.3 million (excluding AOCI of $175.4 million). As of June30, 2013, the
Insurance segment's investment portfolio had $469.3 million in net unrealized
gains on a GAAP basis.

Estimated risk-based capital (RBC) ratio at June30, 2013 remained in excess
of 350%. FGL's statutory total adjusted capital at June30, 2013 was
approximately $1,167.0 million.

In July, Standard & Poor's Rating Services upgraded the FGL insurance
operating subsidiaries to investment grade recognizing the businesses'
improved capital position, strong operating performance and competitive
positions.

Energy:

Oil and natural gas revenues were $37.8 million for the Fiscal 2013 Quarter.
Operating income for the Fiscal 2013 Quarter was $4.8 million. Energy segment
adjusted earnings before interest, taxes, depreciation and amortization
("Adjusted EBITDA-Energy") for the Fiscal 2013 Quarter was $16.0 million.
Adjusted EBITDA-Energy is a non-GAAP measure that excludes non-recurring other
operating items, accretion of discount on asset retirement obligations,
non-cash changes in the fair value 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 operating
income below.

For the Fiscal 2013 Quarter, the Energy segment's production net was 119 MBbl
of oil, 126 MBbl of natural gas liquids and 5,953.0 Mmcf of natural gas. For
the period from inception to June30, 2013, the Energy segment's production
was 177 MBbl of oil, 180 MBbl of natural gas liquids and 8,726 Mmcf of natural
gas.

Financial Services:

Financial Services reported operating income of $4.1 million in the Fiscal
2013 Quarter, compared to $0.5 million during the Fiscal 2012 Quarter. The
growth in operating income was the result of an increase in asset-backed loans
originated by Salus, from $145.5 million in the Fiscal 2012 Quarter, to $586.4
million in the Fiscal 2013 Quarter. In the Fiscal 2013 Quarter, Salus closed
on seven transactions, bringing the total number of deals since inception to
40 and cumulative committed capital to over $800 million.

Also contributing to operating income in the Fiscal 2013 Quarter was an
increase in asset management fees earned from Five Island, a recently formed,
wholly-owned asset management company. The infrastructure and operational
build out of Five Island continued during the Fiscal 2013 Quarter with Eli
Ullum, joining as Portfolio Manager on July 8, 2013.

About Harbinger Group Inc.

Harbinger Group Inc. (“HGI”; NYSE: HRG) is a diversified holding company.
HGI's principal operations are conducted through companies that: offer life
insurance and annuity products; branded consumer products (such as consumer
batteries, residential locksets, residential builders' hardware, faucets,
shaving and grooming products, personal care products, small household
appliances, specialty pet supplies, lawn and garden and home pest control
products, and personal insect repellents); and asset-backed loans; and own
energy assets. HGI is principally focused on acquiring controlling and other
equity stakes in businesses across a diversified range of industries and
growing its existing businesses. In addition to HGI's intention to acquire
controlling equity interests, HGI may also from time to time make investments
in debt instruments and acquire minority equity interests in companies.
Harbinger Group Inc. is headquartered in New York and traded on the New York
Stock Exchange under the symbol HRG. For more information on HGI, visit:
www.harbingergroupinc.com.

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, non-cash changes in the fair value
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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
                                                                 
                                                  June 30,       September 30,
                                                  2013           2012
                                                  (Unaudited)
ASSETS
Investments:
Fixed maturities                                  $ 15,578.3     $  16,088.9
Equity securities                                 337.0          394.9
Derivatives                                       227.4          200.7
Asset-backed loans                                430.2          180.1
Other invested assets                             27.6          53.8        
Total investments                                 16,600.5       16,918.4
Cash and cash equivalents                         1,243.7        1,470.7
Receivables, net                                  611.3          414.4
Inventories, net                                  707.3          452.6
Accrued investment income                         159.9          191.6
Reinsurance recoverable                           2,371.0        2,363.1
Deferred tax assets                               279.9          312.7
Properties, including oil and natural gas         999.4          221.6
properties, net
Goodwill                                          1,470.2        694.2
Intangibles, including DAC and VOBA, net          2,649.9        1,988.5
Other assets                                      271.9         172.6       
Total assets                                      $ 27,365.0    $  25,200.4 
                                                                 
LIABILITIES AND EQUITY
                                                                 
Insurance reserves:
Contractholder funds                              $ 15,342.6     $  15,290.4
Future policy benefits                            3,576.2        3,614.8
Liability for policy and contract claims          66.9           91.1
Funds withheld from reinsurers                    39.5          54.7        
Total insurance reserves                          19,025.2       19,051.0
Debt                                              4,554.3        2,167.0
Accounts payable and other current                843.4          754.2
liabilities
Equity conversion feature of preferred            147.3          232.0
stock
Employee benefit obligations                      114.1          95.1
Deferred tax liabilities                          508.4          382.4
Other liabilities                                 439.6         600.6       
Total liabilities                                 25,632.3      23,282.3    
                                                                 
Commitments and contingencies
                                                                 
Temporary equity:
Redeemable preferred stock                        325.4         319.2       
                                                                 
Harbinger Group Inc. stockholders' equity:
Common stock                                      1.4            1.4
Additional paid-in capital                        834.3          861.2
Retained earnings (Accumulated deficit)           9.7            (98.2       )
Accumulated other comprehensive income            140.0         413.2       
Total Harbinger Group Inc. stockholders'          985.4          1,177.6
equity
Noncontrolling interest                           421.9         421.3       
Total permanent equity                            1,407.3       1,598.9     
Total liabilities and equity                      $ 27,365.0    $  25,200.4 
                                                                             

                                               
HARBINGER GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
                                                    
                       Three months ended          Nine months ended
                       June 30,    July 1,       June 30,    July 1,    
                       2013          2012           2013          2012
                       (Unaudited)                  (Unaudited)
Revenues:                          
Net consumer           $ 1,089.8    $  824.8      $ 2,947.8    $  2,419.9 
product sales
Oil and natural          37.8           —             54.5           —
gas
Insurance                19.0           12.1          46.9           42.2
premiums
Net investment           189.6          179.2         539.7          539.0
income
Net investment           58.3           (12.9   )     411.5          254.6
gains (losses)
Insurance and
investment              16.1         9.0         44.4         28.2    
product fees and
other
Total revenues           1,410.6        1,012.2       4,044.8        3,283.9
Operating costs
and expenses:
Consumer
products cost of         707.0          533.1         1,954.0        1,584.1
goods sold
Oil and natural
gas direct               18.1           —             26.9           —
operating costs
Benefits and
other changes in         107.2          141.0         431.7          559.7
policy reserves
Selling,
acquisition,             310.7          213.6         879.6          692.4
operating and
general expenses
Amortization of         85.0         43.0        220.6        158.5   
intangibles
Total operating
costs and               1,228.0      930.7       3,512.8      2,994.7 
expenses
Operating income         182.6          81.5          532.0          289.2
Interest expense         (83.9   )     (54.4   )     (302.7  )      (194.4  )
Gain (loss) from
the change in
the fair value
of the equity            52.6           (125.5  )     81.9           (124.0  )
conversion
feature of
preferred stock
Gain on
contingent               —              —             —             41.0
purchase price
reduction
Other income            4.2          (17.5   )    (7.7    )     (26.0   )
(expense), net
Income (loss)
from continuing
operations               155.5          (115.9  )     303.5          (14.2   )
before income
taxes
Income tax
expense                 36.8         (5.8    )    167.2        50.6    
(benefit)
Net income               118.7          (110.1  )     136.3          (64.8   )
(loss)
Less: Net income
(loss)
attributable to         15.1         25.0        (8.1    )     18.8    
noncontrolling
interest
Net income
(loss)
attributable to          103.6          (135.1  )     144.4          (83.6   )
controlling
interest
Less: Preferred
stock dividends         12.0         14.0        36.3         45.6    
and accretion
Net income
(loss)
attributable to
common and             $ 91.6       $  (149.1  )   $ 108.1      $  (129.2  )
participating
preferred
stockholders
                                                                             
Net income
(loss) per
common share
attributable to
controlling
interest:
                                                                             
Basic                  $ 0.45       $  (1.07   )   $ 0.54       $  (0.93   )
Diluted                $ 0.25       $  (1.07   )   $ 0.30       $  (0.93   )
                                                                             

                    HARBINGER GROUP INC. AND SUBSIDIARIES
        ADJUSTED EBITDA AND ADJUSTED OPERATING INCOME RECONCILIATIONS
                                (In millions)

The table below shows the adjustments made to the reported operating income of
the consumer products segment to calculate its Adjusted EBITDA:

                                                            
                           Three months ended        Nine months ended
                          June 30,    July 1,      June 30,    July 1,   
                           2013         2012          2013         2012
                           (Unaudited)                (Unaudited)
Reported operating
income - consumer          $  115.7    $  95.2      $  236.1    $  234.2  
products segment
Add: Other expense            (2.6  )      (2.2   )      (7.9  )      (2.2   )
not included above
Add back:
HHI Business
inventory fair value          —            —             31.0         —
adjustment
Pre-acquisition
earnings of HHI               —            52.5          30.3         130.1
Business
Restructuring and             13.2         3.9           27.7         15.9
related charges
Acquisition and
integration related           7.7          5.2           40.5         20.6
charges
Venezuela                    —          —           2.0        —      
devaluation
Adjusted EBIT -
consumer products             134.0        154.6         359.7        398.6
segment
Depreciation and
amortization, net of
accelerated
depreciation
Depreciation of               16.4         9.8           42.6         28.7
properties
Amortization of               20.3         16.1          57.5         46.5
intangibles
Stock-based                  17.8       4.5         32.6       15.8   
compensation
Adjusted EBITDA -
consumer products          $  188.5    $  185.0     $  492.4    $  489.6  
segment


The table below shows the adjustments made to the reported operating income of
the Energy segment to calculate its Adjusted EBITDA:

                                     Three months ended  Nine months ended
                                       June 30,             June 30,
                                        2013                 2013
                                        (Unaudited)          (Unaudited)
Reported operating income -             $     4.8            $    5.3
energy segment
Depreciation, amortization and          12.7                18.5         
depletion
EBITDA - energy segment                 17.5                 23.8
Accretion of discount on asset          0.4                  0.7
retirement obligations
Realized loss on derivative             (1.9          )      (1.3         )
financial instruments
Adjusted EBITDA - energy segment        $     16.0          $    23.2    
                                                                          

The table below shows the adjustments made to the reported operating income
(loss) of the insurance segment to calculate its pretax adjusted operating
income:

                                                             
                            Three months ended         Nine months ended
                                                                   
                            June 30,                 June 30,             
                            2013         July 1,       2013         July 1,
                                         2012                       2012
                            (Unaudited)                (Unaudited)
Reported operating
income - insurance          $  78.5     $  (1.5   )   $ 351.5     $  89.5  
segment
Effect of investment           (20.4 )      (17.2  )     (206.1 )      (72.2 )
gains, net of offsets
Effect of change in
FIA embedded                   (34.4 )      17.9         (58.8  )      10.8
derivative discount
rate, net of offsets
Effects of
transaction-related           —          4.2        —           11.8  
reinsurance
Adjusted operating
income - insurance          $  23.7     $  3.4       $ 86.6      $  39.9  
segment

Contact:

For investor inquiries:
Harbinger Group Inc.
Investor Relations
Tara Glenn, 212-906-8560
investorrelations@harbingergroupinc.com
or
For media inquires:
Sard Verbinnen & Co
Jamie Tully or Michael Henson, 212-687-8080
 
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