SCHEDULE II

Condensed Financial Information of the Registrant

HARBINGER GROUP INC. (Registrant Only)

BALANCE SHEETS

(In thousands)


	September 30, 2012			September 30, 2011
ASSETS
Cash and cash equivalents	$	235,783		$	134,790
Short-term investments		33,986			74,889
Prepaid expenses and other current assets		6,433			1,678

Total current assets		276,202			211,357
Investments in consolidated subsidiaries		2,001,800			1,517,241
Advances to consolidated subsidiaries		9,434			58,773
Properties, net		302			410
Deferred charges and other assets		11,571			14,543

Total assets	$	2,299,309		$	1,802,324

LIABILITIES AND EQUITY
Accounts payable	$	734		$	366
Accrued and other current liabilities		61,701			33,844

Total current liabilities		62,435			34,210
Long-term debt		497,739			497,168
Equity conversion feature of preferred stock		231,950			75,350
Employee benefit obligations		5,119			6,055
Deferred income taxes		4,925			1,343
Other liabilities		319			320

Total liabilities		802,487			614,446

Temporary equity:
Redeemable preferred stock		319,225			292,437

Stockholders’ equity:
Common stock		1,402			1,393
Additional paid-in capital		861,191			872,683
Accumulated deficit		(98,168	)		(128,083	)
Accumulated other comprehensive income		413,172			149,448

Total stockholders’ equity		1,177,597			895,441

Total liabilities and equity	$	2,299,309		$	1,802,324

See accompanying Report of Independent Registered Public Accounting Firm.

HARBINGER GROUP INC. (Registrant Only)

STATEMENTS OF OPERATIONS

(In thousands)


	Year Ended September 30,						Period from June 16, 2010 (a) through September 30, 2010
	2012			2011
Revenues	$	—		$	—		$	—
Cost of revenues		—			—			—

Gross profit		—			—			—
Operating expenses:
General and administrative		48,377			13,883			1,438
Acquisition related charges		3,729			8,696			6,649

Total operating expenses		52,106			22,579			8,087

Operating loss		(52,106	)		(22,579	)		(8,087	)
Other income (expense):
Equity in net income (losses) of subsidiaries		354,628			75,014			(55,772	)
Interest expense		(56,565	)		(39,005	)		—
(Increase) decrease in fair value of equity conversion feature of preferred stock		(156,600	)		27,910			—
Other, net		190			723			195

Income (loss) before income taxes		89,547			42,063			(63,664	)
Income tax (benefit) expense		(9	)		4			6

Net income (loss)		89,556			42,059			(63,670	)
Less: Preferred stock dividends and accretion		59,641			19,833			—

Net income (loss) attributable to common and participating preferred stockholders	$	29,915		$	22,226		$	(63,670	)

(a)	Date from which the registrant’s results of operations are included in the accompanying consolidated financial statements, as discussed further in Note 1 to the consolidated financial statements.

See accompanying Report of Independent Registered Public Accounting Firm.

HARBINGER GROUP INC. (Registrant Only)

STATEMENTS OF CASH FLOWS

(In thousands)


	Year Ended September 30,						Period from June 16, 2010 through September 30, 2010
	September 30, 2012			September 30, 2011
Cash flows from operating activities:
Net income (loss)	$	89,556		$	42,059		$	(63,670	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of properties		133			91			19
Stock-based compensation		1,886			116			34
Amortization of debt issuance costs		2,856			1,770			—
Amortization of debt discount		571			613			—
Deferred income taxes		3,582			376			881
Equity in net (income) losses of subsidiaries		(354,628	)		(75,014	)		55,772
Dividends from subsidiaries		69,470			20,000			—
Increase (decrease) in fair value of equity conversion feature of preferred stock		156,600			(27,910	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(4,640	)		62			(561	)
Accounts payable and accrued and other current liabilities		27,042			15,697			989
Other operating		(1,652	)		1,797			701

Net cash used in operating activities		(9,224	)		(20,343	)		(5,835	)

Cash flows from investing activities:
Proceeds from investments sold, matured or repaid		108,887			101,006			30,094
Cost of investments acquired		(67,983	)		(121,930	)		(3,989	)
Capital contributions to consolidated subsidiaries		(36,330	)		(727,162	)		—
Return of capital from subsidiary		88,000			—			—
(Advances to) repayments from consolidated subsidiaries		49,339			(49,339	)		—
Capital expenditures		(26	)		(345	)		(58	)

Net cash provided by (used in) investing activities		141,887			(797,770	)		26,047

Cash flows from financing activities:
Dividends paid on preferred stock		(31,670	)		—			—
Proceeds from senior secured notes		—			498,459			—
Proceeds from preferred stock issuance, net of issuance costs		—			385,973			—
Debt issuance costs		—			(16,207	)		—
Other financing activities		—			416

Net cash provided by (used in) financing activities		(31,670	)		868,641			—

Net increase in cash and cash equivalents		100,993			50,528			20,212
Cash and cash equivalents at beginning of period		134,790			84,262			64,050

Cash and cash equivalents at end of period	$	235,783		$	134,790		$	84,262

(a)	Date from which the registrant’s results of operations are included in the accompanying consolidated financial statements, as discussed further in Note 1 to the consolidated financial statements.