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Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

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•	On November 8, 2015, Anbang entered into the FGL Merger Agreement. Pursuant to this agreement, Anbang, through its subsidiaries, will acquire all of the outstanding shares of FGL at closing. Stockholders of FGL will receive $26.80 per share in cash at closing. At the date of the transaction, the Company owned 47 million shares, or 80.4% of FGL.

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During the Fiscal 2016 Nine Months, Compass completed the sale of its Holly, Waskom, and Danville assets (the “Compass Sold Assets”) to Indigo Resources LLC (the “Buyer”) for total cash consideration of $153.4 million, pursuant to the Purchase Agreement entered into with the Buyer as previously announced on October 9, 2015 (the “Compass Asset Sale”). Proceeds were primarily used to reduce Compass’ borrowings under its existing credit facility (the “Compass Credit Agreement”).

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Subsequent to the end of the Fiscal 2016 Quarter, on July 1, 2016, HGI Energy entered into an agreement to sell its equity interests in Compass to a third party for a cash purchase price of $145.0 million (the “Compass Sale”). The purchase price will be reduced at closing by the balance of Compass’ credit facility outstanding at closing ($125.0 million as of June 30, 2016) and is subject to other customary closing adjustments, including adjustments for title and environmental defects. The closing of the Compass Sale is subject to the satisfaction of customary closing conditions.

•	During the Fiscal 2016 Nine Months, Compass reduced its borrowing under the Compass Credit Agreement from $327.0 million to $125.0 million, a reduction of $202.0 million.

•	During the Fiscal 2016 Nine Months, our Energy segment recorded impairments to its oil and natural gas properties of $93.2 million based on the ceiling test limitation under the full cost method of accounting. The impairments were primarily due to the decline in oil and natural gas prices.

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During the Fiscal 2016 Quarter, Salus and Front Street received a partial recovery on the loan to RadioShack Corporation (“RadioShack”) of $43.4 million, excluding $21.7 million repayment on FGL’s participation on the loan. As a result of the aforementioned partial recovery, we also reversed $18.0 million of previously recorded allowance for bad debt, excluding $9.0 million of realized gains by FGL recorded in “(Loss) income from discontinued operations, net of tax” in the accompanying Condensed Consolidated Statements of Operations.

•	During the Fiscal 2016 Quarter, CorAmerica amended its investment management agreement with a counterparty that resulted in a decrease to CorAmerica’s projected future revenues, which triggered a goodwill impairment test. The test resulted in an impairment of $10.7 million to goodwill.

•	During the Fiscal 2016 Quarter, Front Street was provided information on a recapture notice of a reinsurance agreement between third parties and as a result, Front Street’s funds withheld receivables and insurance reserves decreased by approximately $83.0 million during the Fiscal 2016 Quarter and the Fiscal 2016 Nine Months.

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Basic and diluted net income from continuing operations attributable to common stockholders for the Fiscal 2016 Quarter was $0.39 and $0.38 per basic and diluted common share attributable to controlling interest, respectively, compared to basic and diluted net loss from continuing operations attributable to common stockholders of $0.82 per basic and diluted common share attributable to controlling interest in the Fiscal 2015 Quarter.

•	We ended the quarter with corporate cash and investments of approximately $210.3 million (primarily held at HRG and HGI Funding).

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Our Consumer Products segment’s operating income for the Fiscal 2016 Quarter increased $71.1 million, or 52.4%, to $206.8 million from $135.7 million for the Fiscal 2015 Quarter. Our Consumer Products segment’s adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA - Consumer Products”) increased by $42.9 million, or 18.2%, to $279.2 million versus the Fiscal 2015 Quarter. The increase in operating income and Adjusted EBITDA - Consumer Products was primarily driven by higher profitability in Armored AutoGroup Parent Inc. (“AAG”) that was acquired during the fiscal year 2015; coupled with higher sales and margins in the home and garden product line due to increased demand for repellents and household insect controls driven by the Zika virus. Adjusted EBITDA margin represented 20.5% of sales as compared to 18.9% in the Fiscal 2015 Quarter.

•	Our Insurance segment’s operating profit for the Fiscal 2016 Quarter was $3.6 million compared to an operating loss of $28.6 million for the Fiscal 2015 Quarter. The decrease in operating loss was primarily due to credit impairment losses on intercompany investments recorded in the Fiscal 2015 Quarter.

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Our Energy segment’s operating loss for the Fiscal 2016 Quarter was $22.0 million compared to $114.3 million in the Fiscal 2015 Quarter. The decrease in operating loss was primarily driven by lower ceiling test impairments recorded in the Fiscal 2016 Quarter, partially offset by decreased revenues as a result of lower oil and natural gas prices. The Energy segment’s adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA - Energy”) for the Fiscal 2016

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Our Asset Management segment recorded an operating loss of $1.7 million for the Fiscal 2016 Quarter compared to operating loss of $14.2 million for the Fiscal 2015 Quarter. The decrease in operating loss was mainly as a result of reversal of bad debt expenses associated with the partial repayment on the loan to RadioShack and a reduction in operating expenses, partially offset by lower revenues and the impairment to CorAmerica’s goodwill.

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During the Fiscal 2016 Nine Months, we received cash dividends of approximately $47.0 million from our subsidiaries, including $37.3 million, $9.3 million and $0.4 million from Spectrum Brands, FGL and CorAmerica, respectively, which does not give effect to the net impact from interest payments made by HRG on behalf of our Energy segment with respect to certain intercompany notes issued by HGI Energy.

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(1)	Mmcfe is calculated by converting one barrel of oil or natural gas liquids into six Mcf of natural gas.

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Item 3.	Quantitative and Qualitative Disclosures about Market Risk

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Item 4.	Controls and Procedures

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•	our dependence on distributions from our subsidiaries to fund our operations and payments on our debt and other obligations;

•	the decision of our subsidiaries’ boards to make upstream cash distributions, which is subject to numerous factors such as restrictions contained in applicable financing agreements, state and regulatory restrictions and other relevant considerations as determined by the applicable board;

•	our and our subsidiaries’ liquidity, which may be impacted by a variety of factors, including the capital needs of us and our current and future subsidiaries;

•	limitations on our ability to successfully identify suitable acquisition, disposition and other strategic opportunities and to compete for these opportunities with others who have greater resources;

•	the need to provide sufficient capital to our operating businesses;

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the impact of covenants in the indenture governing our 7.875% Senior Secured Notes due 2019, the covenants in the indenture governing our 7.750% Senior Notes due 2022, the continuing covenants contained in the certificate of designation governing our Series A Participating Convertible Preferred Stock and future financing or refinancing agreements, on our ability to operate our business and finance our pursuit of our business strategy;

•	our ability to incur new debt and refinance our existing indebtedness;

•	the impact on our business and financial condition of our substantial indebtedness and the significant additional indebtedness and other financing obligations we and our subsidiaries may incur;

•	the impact on the aggregate value of our assets and our stock price from changes in the market prices of publicly traded equity interests we hold, particularly during times of volatility in security prices;

•	the impact of additional material charges associated with our oversight of acquired or target businesses and the integration of our financial reporting;

•	the impact of restrictive covenants and applicable laws, including securities laws, on our ability to dispose of equity interests we hold;

•	the impact of decisions by our significant stockholders, whose interest may differ from those of our other stockholders, or any of them ceasing to remain significant stockholders;

•	the effect any interests of our officers, directors, stockholders and their respective affiliates may have in certain transactions in which we are involved;

•	our dependence on certain key personnel;

•	the impact on us and/or our subsidiaries from interruption or other operational failures in telecommunication, information technology and other operational systems, or a failure to maintain the security, integrity confidentiality or privacy of sensitive data residing on such systems;

•	our and our subsidiaries’ ability to attract and retain key employees;

•	the impact of potential losses and other risks from changes in the value of our assets;

•	our ability to effectively increase the size of our organization, if needed, and manage our growth;

•	the impact of a determination that we are an investment company or personal holding company;

•	the impact of claims or litigation arising from operations, agreements and transactions, including litigation arising from or involving former subsidiaries;

•	the impact of expending significant resources in considering acquisition or disposition targets or business opportunities that are not consummated;

•	our ability to successfully integrate current and future acquired businesses into our existing operations and achieve the expected economic benefits;

•	tax consequences associated with our acquisition, holding and disposition of target companies and assets;

•	the impact of delays or difficulty in satisfying the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 or negative reports concerning our internal controls;

•	the impact of the relatively low market liquidity for shares of our common stock;

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•	the impact on the holders of our common stock if we issue additional shares of our common stock or preferred stock; and

•	the effect of price fluctuations in our common stock caused by general market and economic conditions and a variety of other factors, including factors that affect the volatility of the common stock of any of our publicly-held subsidiaries.

•	the impact of Spectrum Brands’ substantial indebtedness on its business, financial condition and results of operations;

•	the impact of restrictions in Spectrum Brands’ debt instruments on its ability to operate its business, finance its capital needs or pursue or expand its business strategies;

•	any failure to comply with financial covenants and other provisions and restrictions of Spectrum Brands’ debt instruments;

•	the impact of expenses resulting from the implementation of new business strategies, divestitures or current and proposed restructuring activities;

•	Spectrum Brands’ inability to successfully integrate and operate new acquisitions at the level of financial performance anticipated;

•	the unanticipated loss of key members of Spectrum Brands’ senior management;

•	the impact of fluctuations in commodity prices, costs or availability of raw materials or terms and conditions available from suppliers, including suppliers’ willingness to advance credit;

•	interest rate and exchange rate fluctuations;

•	the loss of, or a significant reduction in, sales to any significant retail customer(s);

•	competitive promotional activity or spending by competitors or price reductions by competitors;

•	the introduction of new product features or technological developments by competitors and/or the development of new competitors or competitive brands;

•	the effects of general economic conditions, including inflation, recession or fears of a recession, depression or fears of a depression, labor costs and stock market volatility or changes in trade, monetary or fiscal policies in the countries where Spectrum Brands does business;

•	changes in consumer spending preferences and demand for Spectrum Brands’ products;

•	Spectrum Brands’ ability to develop and successfully introduce new products, protect its intellectual property and avoid infringing the intellectual property of third parties;

•	Spectrum Brands’ ability to successfully implement, achieve and sustain manufacturing and distribution cost efficiencies and improvements, and fully realize anticipated cost savings;

•	the cost and effect of unanticipated legal, tax or regulatory proceedings or new laws or regulations (including environmental, public health and consumer protection regulations);

•	public perception regarding the safety of Spectrum Brands’ products, including the potential for environmental liabilities, product liability claims, litigation and other claims;

•	the impact of pending or threatened litigation;

•	changes in accounting policies applicable to Spectrum Brands’ business;

•	government regulations;

•	the seasonal nature of sales of certain of Spectrum Brands’ products;

•	the effects of climate change and unusual weather activity; and

•	the effects of political or economic conditions, terrorist attacks, acts of war or other unrest in international markets.

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•	the ability to satisfy the closing conditions, including regulatory approvals, contained in the FGL Merger Agreement;

•	the impact on the stock price, business, financial condition and results of operations if the FGL Merger is not consummated or not consummated timely;

•	the impact of the operating restrictions in the FGL Merger Agreement and their impact on FGL;

•	litigation arising from the FGL Merger;

•	the impact of restrictions in FGL’s debt instruments on its ability to operate its business, finance its capital needs or pursue or expand its business strategies;

•	the accuracy of FGL’s and Front Street’s assumptions and estimates;

•	the accuracy of FGL’s and Front Street’s assumptions regarding the fair value and future performance of their investments;

•	FGL and its insurance subsidiaries’ abilities to maintain or improve their financial strength ratings;

•	FGL’s and Front Street’s and their insurance subsidiaries’ potential need for additional capital to maintain their financial strength and credit ratings and meet other requirements and obligations;

•	FGL’s and Front Street’s ability to defend themselves against or respond to, potential litigation (including class action litigation), enforcement investigations or increased regulatory scrutiny;

•	FGL’s and Front Street’s ability to manage their businesses in a highly-regulated industry, which is subject to numerous legal restrictions and regulations;

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regulatory changes or actions, including those relating to regulation of financial services, affecting (among other things) underwriting of insurance products and regulation of the sale, underwriting and pricing of products and minimum capitalization and statutory reserve requirements for insurance companies, or the ability of FGL’s and Front Street’s insurance subsidiaries to make cash distributions to FGL or Front Street, as applicable (including dividends or payments on surplus notes FGL’s subsidiaries issue to FGL);

•	the impact of the newly finalized Department of Labor “fiduciary” rule on FGL, its products, distribution and business model;

•	the impact of the anticipated implementation of principle based reserving on FGL’s ability to write certain products, manage risk and deploy capital efficiently;

•	the impact of FGL’s reinsurers failing to meet or timely meet their assumed obligations, increasing their reinsurance rates, or becoming subject to adverse developments that could materially adversely impact their ability to provide reinsurance to FGL at consistent and economical terms;

•	restrictions on FGL’s ability to use captive reinsurers;

•	FGL and Front Street being forced to sell investments at a loss to cover policyholder withdrawals;

•	the impact of interest rate fluctuations on FGL and Front Street and withdrawal demands in excess of FGL’s and Front Street’s assumptions;

•	the availability of credit or other financings and the impact of equity and credit market volatility or disruption on FGL’s ability to obtain capital and the value and liquidity of FGL’s and Front Street’s investments;

•	changes in the federal income tax laws and regulations which may affect the relative income tax advantages of FGL’s products;

•	increases in FGL’s and Front Street’s valuation allowance against FGL’s and Front Street’s deferred tax assets, and restrictions on FGL’s and Front Street’s ability to fully utilize such assets;

•	the performance of third-parties, including independent distributors, underwriters, actuarial consultants and other service providers;

•	interruption or other operational failures in telecommunication, information technology and other operational systems, or a failure to maintain the security, integrity, confidentiality or privacy of sensitive data residing on such systems;

•	the continued availability of capital required for FGL’s and Front Street’s insurance subsidiaries to grow;

•	the impact on FGL’s or Front Street’s business of new accounting rules or changes to existing accounting rules;

•	the risk that FGL’s or Front Street’s exposure to unidentified or unanticipated risk is not adequately addressed by their risk management policies and procedures;

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general economic conditions and other factors, including prevailing interest and unemployment rate levels and stock and credit market performance which may affect (among other things) FGL’s ability to sell its products and the fair value of FGL’s and Front Street’s investments, which could result in impairments and other than temporary impairments and certain liabilities, and the lapse rate and profitability of policies;

•	FGL’s ability to protect its intellectual property;

•	difficulties arising from FGL’s and Front Street’s outsourcing relationships;

•	the impact on FGL’s and Front Street’s business of natural and of man-made catastrophes, pandemics, computer viruses, network security breaches and malicious and terrorist acts;

•	FGL’s and Front Street’s ability to compete in a highly competitive industry;

•	FGL’s and Front Street’s ability to maintain competitive policy expense costs;

•	adverse consequences if the independent contractor status of FGL’s independent insurance marketing organizations is successfully challenged;

•	FGL’s ability to attract and retain national marketing organizations and independent agents;

•	the potential adverse tax consequences to FGL if FGL generates passive income in excess of operating expenses;

•	the significant operating and financial restrictions contained in FGL’s debt agreements, which may prevent FGL from capitalizing on business opportunities;

•	the inability of FGL’s and Front Street’s subsidiaries and affiliates to generate sufficient cash to service all of their obligations;

•	the impact on FGL and Front Street of non-performance of loans originated by Salus;

•	the ability of FGL’s and Front Street’s subsidiaries to pay dividends; and

•	the ability to maintain or obtain approval of the Iowa Insurance Division and other regulatory authorities as required for FGL’s operations and those of its insurance subsidiaries.

•	their respective abilities, as applicable, to recover amounts that are contractually owed to them by their borrowers;

•	their respective abilities to continue to find attractive business opportunities, particularly if the FGL Merger is consummated;

•	their respective abilities to address a number of issues to implement their respective business strategies;

•	the impact on these businesses resulting from deterioration in economic conditions;

•	their respective abilities to compete with traditional competitors and new market entrants; and

•	their respective abilities to address a variety of other risks associated with their business, including reputational risk, legal, litigation and compliance risk, the risk of fraud or theft, operational errors and systems malfunctions.

•	fluctuations in oil, natural gas liquids and natural gas prices sold by Compass;

•	the impact of Compass’ substantial indebtedness on its business, financial condition and results of operations;

•	the impact of the sharp decline in commodity prices and commodity pricing volatility on Compass’ business, operations and cash flows;

•	Compass’ ability to manage counterparty credit risk in a depressed commodity pricing environment, which may lead to one or more of Compass’ counterparties failing to satisfy their contractual obligations;

•	the impact of restrictions in Compass’ debt instruments on its ability to operate its business, finance its capital needs or pursue or expand its business strategies;

•	changes in the differential between the New York Mercantile Exchange or other benchmark prices of oil, natural gas liquids and natural gas and the reference or regional index price used to price Compass’ actual oil and natural gas sales;

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•	Compass’ ability to operate successfully as an independent business;

•	Compass’ ability to replace natural gas marketing services upon the expiration of the current arrangements with EXCO Resources, Inc.;

•	the impact on Compass if it is unable to successfully execute or consummate one or more disposition, acquisition or reserve development opportunities;

•	Compass’ ability to market and sell its oil, natural gas liquids and natural gas and its exposure to the credit risk of its customers, working interest owners and other counterparties and the risks associated with drilling activities;

•	the inherent uncertainty of estimates of oil and natural gas reserves;

•	the risk that Compass will be unable to identify or complete, or complete on economically attractive terms, suitable disposition and/or acquisition opportunities of oil and gas properties;

•	Compass’ ability to successfully operate in a highly regulated and litigious environment, including exposure to operating hazards and uninsured risks;

•	Compass’ ability to effectively mitigate the impact of commodity price volatility from its cash flows with its hedging strategy;

•	changes in the U.S. federal income tax laws and regulations that may affect the relative income tax advantages of Compass’ products;

•	the impact of future and existing environmental regulations;

•	the effects of climate change and unusual weather activity;

•	the intense competition in the oil and gas industry, including acquiring properties, contracting for drilling equipment and hiring experienced personnel;

•	the unavailability of pipelines or other facilities interconnected to Compass’ gathering and transportation pipelines;

•	the ability to satisfy the applicable closing conditions and close, on a timely basis or at all, the sale of the equity of Compass.

Item 1.	Legal Proceedings

Item 1A.	Risk Factors

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Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.	Defaults upon Senior Securities

Item 4.	Mine Safety Disclosures

Item 5.	Other Information

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*	Filed herewith

**	Furnished herewith

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