Acquisitions (Tables)

12 Months Ended

Sep. 30, 2012

Summarization of Provisional and Final Amounts on Assets Acquired and Liabilities at Fair Value

The following table summarizes the provisional and final amounts recognized at fair value for each major class of assets acquired and liabilities assumed as of the FGL Acquisition Date:


	Provisional Amounts		Fiscal 2012 Measurement Period Adjustments			Final Amounts
Investments, cash and accrued investment income, including cash acquired of $1,040,470	$	17,705,419	$	—		$	17,705,419
Reinsurance recoverable		929,817		15,246			945,063
Intangible assets (VOBA)		577,163		—			577,163
Deferred tax assets		256,584		(3,912	)		252,672
Other assets		72,801		—			72,801

Total assets acquired		19,541,784		11,334			19,553,118

Contractholder funds and future policy benefits		18,415,022		—			18,415,022
Liability for policy and contract claims		60,400		—			60,400
Note payable		95,000		—			95,000
Other liabilities		475,285		4,070			479,355

Total liabilities assumed		19,045,707		4,070			19,049,777

Net assets acquired		496,077		7,264			503,341
Cash consideration, net of $5,000 re-characterized as expense		345,000		—			345,000

Bargain purchase gain	$	151,077	$	7,264		$	158,341

Components of Net Deferred Tax Assets

The components of the net deferred tax assets as of the FGL Acquisition Date (updated for measurement period adjustments) are as follows:


Deferred tax assets:
DAC	$	96,764
Insurance reserves and claim related adjustments		401,659
Net operating losses		128,437
Capital losses (carryovers and deferred)		267,468
Tax credits		75,253
Other deferred tax assets		24,066

Total deferred tax assets		993,647
Valuation allowance		(405,370	)

Deferred tax assets, net of valuation allowance		588,277

Deferred tax liabilities:
VOBA		202,007
Investments		121,160
Other deferred tax liabilities		12,438

Total deferred tax liabilities		335,605

Net deferred tax assets	$	252,672

Selected Financial Information

The following table presents selected financial information reflecting results for FGL that are included in the Consolidated Statement of Operations for the year ended September 30, 2011:


	For the period April 6, 2011 to September 30, 2011
Total revenues	$	290,886
Income, net of taxes	$	23,703

Schedule of Total Purchase Price

The total purchase price of Russell Hobbs was approximately $597,579 determined as follows:


SBI closing price per share on June 16, 2010	$	28.15
Purchase price — Russell Hobbs allocation — 20,704 shares ^(a)(b)		575,203
Cash payment to pay off Russell Hobbs’ North American credit facility		22,376

Total purchase price of Russell Hobbs	$	597,579

(a)	Number of shares calculated based upon conversion formula, as defined in the merger agreement, using balances as of June 16, 2010.

(b)	The fair value of 271 shares of unvested restricted stock units as they relate to post combination services will be recorded as operating expense over the remaining service period and were assumed to have no fair value for the purchase price.

Company's Pro forma Results

The following table reflects the Company’s unaudited pro forma results for Fiscal 2011 and 2010 had the results of Russell Hobbs and FGL been included for each of the full year periods, as if the respective acquisitions were completed on October 1, 2009.


	Year Ended September 30,
	2011 ^(a)		2010
Revenues:
Reported revenues	$	3,477,782	$	2,567,011
FGL adjustment ^(b)		685,767		953,911
Russell Hobbs adjustment		—		543,952

Pro forma revenues	$	4,163,549	$	4,064,874

Income (loss) from continuing operations:
Reported income (loss) from continuing operations	$	7,379	$	(195,507	)
FGL adjustment ^(b)		84,912		(206,441	)
Russell Hobbs adjustment		—		(5,504	)

Pro forma income (loss) from continuing operations	$	92,291	$	(407,452	)

Income (loss) per common share attributable to controlling interest:
Reported basic income (loss) per common share from continuing operations	$	0.11	$	(1.13	)
FGL adjustment		0.42		(1.56	)
Russell Hobbs adjustment		—		(0.04	)

Pro forma basic income (loss) per common share from continuing operations	$	0.53	$	(2.73	)

Pro forma diluted income (loss) per common share from continuing operations	$	0.51	$	(2.73	)

(a)

Reported revenues and net income for Fiscal 2011 include the actual reported results of FGL for the approximate six month period subsequent to April 6, 2011. Reported net income also includes the $158,341 non-recurring bargain purchase gain which was recorded as of the FGL Acquisition Date, and reflects the retrospective measurement period adjustments disclosed above.

(b)	The pro forma information primarily reflects the following pro forma adjustments applied to FGL’s historical results:

•

Reduction in net investment income to reflect amortization of the premium on fixed maturity securities — available-for-sale resulting from the fair value adjustment of these assets;

•

Reversal of amortization associated with the elimination of FGL’s historical DAC;

•

Amortization of VOBA associated with the establishment of VOBA arising from the acquisition;

•

Adjustments to reflect the impacts of the recapture of the life business from OM Re and the retrocession of the majority of the recaptured business and the reinsurance of certain life business previously not reinsured to an unaffiliated third party reinsurer, including the amortization of the related $13,750 Structuring Fee;

•

Adjustments to eliminate interest expense on notes payable to seller and add interest expense on the new $95,000 surplus note payable (which was subsequently settled in October 2011);

•

Adjustments to reflect the full-period effect of interest expense on the initial $350,000 of 10.625% Notes issued on November 15, 2010, the proceeds of which were used to fund the FGL Acquisition; and

•

Reversal of the change in the deferred tax valuation allowance included in the income tax provision.

Summary of Acquisition and Integration Related Charges Incurred

The following table summarizes acquisition and integration related charges incurred by the Company:


	Year Ended September 30,
	2012		2011		2010
SB/RH Merger
Integration costs	$	10,168	$	23,084	$	3,777
Employee termination charges		3,900		8,105		9,713
Legal and professional fees		1,495		4,883		24,962

		15,563		36,072		38,452
FGL		—		22,677		331
Spectrum Brands		—		1,129		4,284
FURminator		7,938		—		—
BlackFlag		3,379		—		—
Other		7,956		3,721		2,034

Total acquisition and integration related charges	$	34,836	$	63,599	$	45,101

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

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