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Item 2. Management’s Discussion and Analysis

2020-11-09 compared with 2020-08-10 · 329 added, 292 removed, 648 unchanged (49% of the section changed)

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Some of the information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties.

You should review the "Risk Factors" section in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020, as well as the section below entitled "Special Note Regarding Forward-Looking Statements" for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

You should review the "Risk Factors" section in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020 and on Form 8-K filed with the SEC on October 7, 2020, as well as the section below entitled "Special Note Regarding Forward-Looking Statements" for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Unless the context otherwise requires, in this Quarterly Report on Form 10-Q, "HC2" means HC2 Holdings, Inc.

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We are a diversified holding company with principal operations conducted through seven operating platforms or reportable segments:

Construction ("DBMG"), Energy ("ANG"), Telecommunications ("ICS"), Insurance ("CIG"), Life Sciences ("Pansend"), Broadcasting, and Other, which includes businesses that do not meet the separately reportable segment thresholds.

Infrastructure ("DBMG"), Clean Energy ("Beyond6"), Telecommunications ("ICS"), Insurance ("CIG"), Life Sciences ("Pansend"), Spectrum, and Other, which includes businesses that do not meet the separately reportable segment thresholds.

Certain previous year amounts have been reclassified to conform with current year presentations, including:

• The reclassification of GMSL's results to discontinued operations.

• The recasting of GMSL's results to discontinued operations.

Further, the reclassification of prior period assets and liabilities have been classified as held for sale;

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Formerly the Marine Services segment, these entities and the investment in HMN have been reclassified to the Other segment.

• The restatement of Earnings per share in the prior period, as a result of the discontinued operations noted above.

• The recasting of Earnings per share in the prior period, as a result of the discontinued operations noted above.

This includes presenting EPS for Net (loss) income from continuing operations, Net (loss) income from discontinuing operations, and Net (loss) income.

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Our segments' operations can be highly cyclical and subject to seasonal patterns.

Our volume of business in our Construction segment may be adversely affected by declines or delays in projects, which may vary by geographic region.

Our volume of business in our Infrastructure segment may be adversely affected by declines or delays in projects, which may vary by geographic region.

Project schedules, particularly in connection with large, complex, and longer-term projects can also create fluctuations in the services provided, which may adversely affect us in a given period.

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The Company’s top priority is to protect its employees and their families, and those of the Company’s customers.

The Company is taking precautionary measures as directed by health authorities and the local government, including changing operational procedures as necessary, providing additional protective gear and cleaning to protect them, which has resulted and may continue to result in in disruptions to and increased costs of the Company’s operations.

The Company continues to take precautionary measures as directed by health authorities and the local government, including changing operational procedures as necessary, providing additional protective gear and cleaning to protect them, which has resulted and may continue to result in disruptions to and increased costs of the Company’s operations.

We may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, vendors, and suppliers.

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However, we do expect that it could have a material adverse impact on our future revenue growth as well as our overall profitability and may lead to revised payment terms with certain of our customers.

During the three and six months ended June 30, 2020, the effects of COVID-19 and the related actions undertaken in the U.S.

During the three and nine months ended September 30, 2020, the effects of COVID-19 and the related actions undertaken in the U.S.

to attempt to control its spread, specifically impact certain of our segments as follows:

Infrastructure

DBMG is dependent on its workforce to carry out its services.

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The nature of DBMG’s business does not permit alternative workforce arrangements in its facilities and project sites such as remote work schemes to be implemented effectively, and as a result of potential workforce disruptions, DBMG may experience delays or suspensions of projects.

DBMG has incurred significant costs related to inefficiency and additional procedures to maintain COVID-19 related safety measures.

During the three and six months ended June 30, 2020, $8.4 million and $8.8 million were incurred.

DBMG has incurred significant costs related to additional procedures to maintain COVID-19 related safety measures.

During the three and nine months ended September 30, 2020, $6.4 million and $15.2 million of COVID-19 related expenses were incurred.

DBMG may also experience disruptions in the supply chain depending on the spread of COVID-19 and related governmental orders.

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Our Insurance segment has been impacted by the COVID-19 pandemic, including multiple reductions in target interest rates by the Board of Governors of the Federal Reserve System, and significant market volatility, driving actual and projected results of our business operations as well as our views on potential effectiveness of certain prudent and feasible tax planning strategies.

The Company’s June 30, 2020 results reflected in earnings are primarily impacted by the Insurance segment's net unrealized losses on investments of $17.9 million, included in the Net realized and unrealized gains (loss) on investments line, primarily driven by preferred stock mark to market adjustments.

The impact on other comprehensive income was $9.2 million of unrealized gain on fixed maturity securities, a significant improvement as compared to the three months ended March 31, 2020 results, which reflected $355.5 million of unrealized loss on fixed maturity securities.

Both of these were largely attributable to market factors caused by the COVID-19 crisis for each of the three month periods ended March 31, 2020 and June 30, 2020, respectively.

The Company’s September 30, 2020 results reflected in earnings are primarily impacted by the Insurance segment's net unrealized losses on investments of $12.3 million, included in the Net realized and unrealized gains (loss) on investments line, primarily driven by preferred stock mark to market adjustments.

The impact on other comprehensive income was $91.2 million of unrealized gain on fixed maturity securities, a significant improvement as compared to March 31, 2020 and June 30, 2020 results, which reflected $355.5 million of unrealized loss and $9.2 million of unrealized gain, respectively, on fixed maturity securities.

Both of these were largely attributable to market factors caused by the COVID-19 crisis for each of the three month

periods ended March 31, 2020, June 30, 2020, and September 30, 2020 respectively.

Additional future recovery of losses will largely depend upon market reaction to additional COVID-19 stimulus packages, interest rates and timing and manner in which the economy is reopened.

The unrealized losses are considered temporary in nature, as we have the ability to hold these securities to maturity.

As a result of COVID-19, our Broadcasting segment has experienced adverse effects on its advertising business because of weakness in the advertising market as advertisers seek to reduce their own costs in response to the pandemic’s impact on their businesses.

As a result of COVID-19, our Spectrum segment has experienced adverse effects on its advertising business because of weakness in the advertising market as advertisers seek to reduce their own costs in response to the pandemic’s impact on their businesses.

We are not able to predict when or whether advertising budgets and the advertising market generally will return or be comparable to historical levels.

In addition, COVID-19 could impact our Broadcasting segment’s business, financial condition and results of operations in a number of other ways, including, but not limited to:

In addition, COVID-19 could impact our Spectrum segment’s business, financial condition and results of operations in a number of other ways, including, but not limited to:

• negative impact on our broadcast station revenue, as many of our customers also rely on advertising revenues and might be negatively affected by COVID-19;

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• increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online activity.

The magnitude of the impact on our Broadcasting segment will depend on numerous evolving factors that we may not be able to accurately predict, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19.

The magnitude of the impact on our Spectrum segment will depend on numerous evolving factors that we may not be able to accurately predict, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19.

Even after COVID-19 has subsided, we may experience materially adverse impacts to our business as a result of its global economic impact, including any recession that has occurred or may occur in the future.

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Debt Obligations

In March 2020, with the proceeds received from the sale of GMSL, the Company repaid $15.0 million of its 2019 Revolving Credit Agreement and $76.9 million of its Senior Secured Notes.

In April 2020 and May 2020, HC2 drew $10.0 million and $5.0 million on its 2020 Revolving Credit Agreement, respectively.

In June 2020, with the cash proceeds from the sale of New Saxon's 30% interest in HMN, HC2 redeemed an additional $50.6 million of its Senior Secured Notes.

HC2 received $0.5 million in dividends from our Telecommunications segment during the six months ended June 30, 2020.

HC2 received $1.1 million and $2.9 million in net management fees during the three and six months ended June 30, 2020, respectively.

HC2 received $13.5 million in dividends from its Construction segment during three and six months ended June 30, 2020.

On August 6, 2020 the Construction segment paid a cash dividend of $5.0 million, or $1.30 per share.

HC2 received approximately $4.5 million of the total dividend payout.

In August 2020, Clean Energy entered into a new credit facility with M&T bank.

Proceeds from the loan and cash on hand were used to repay the existing credit facilities with M&T and Pioneer as well as redeem its outstanding $14.0 million mandatorily redeemable preferred stock, included within Other liabilities on the Balance Sheets.

The new credit facility is comprised of a $57.0 million term loan facility, a $2.5 million revolving line of credit and an $8.0 million delayed draw term loan ear-marked for new station builds, as well as a $10.0 million accordion feature.

Clean Energy recognized $2.4 million and $1.8 million in extinguishment losses related to the pay down of the existing credit facilities with M&T and the redemption of its mandatorily redeemable preferred stock, respectively, which is included in Loss on early extinguishment or restructuring of debt in our Condensed Consolidated Statement of Operations.

In February 2020, Spectrum amended its agreement governing its privately placed note funded by MSD Partners, L.P., increasing the principal balance to $39.3 million.

The proceeds were used to repay principal and interest on existing debt.

In August 2020, Spectrum modified its agreement with MSD Partners, L.P.

and Great American Life Insurance Company to extend the maturity on its privately placed notes to October 2021.

In September 2020, Spectrum amended its agreement governing its privately placed note funded by MSD Partners, L.P., increasing the principal balance by $4.0 million to $43.3 million.

The proceeds were used to repay principal and interest on existing debt and for general business purposes.

Non-Operating Corporate

In March 2020, with the cash proceeds from the sale of GMSL, HC2 fully repaid its $15.0 million secured revolving line of credit with MSD PCOF Partners IX, LLC (the "2019 Revolving Credit Agreement").

HC2 recognized $0.4 million in extinguishment loss related to the repayment of the 2019 Revolving Credit Agreement, which is included in Loss on early extinguishment or restructuring of debt in our Condensed Consolidated Statement of Operations.

In March 2020, HC2 entered into a new $15.0 million secured revolving credit agreement (the “2020 Revolving Credit Agreement”).

The 2020 Revolving Credit Agreement matures in September 2021.

Loans under the 2020 Revolving Credit Agreement bear interest at a per annum rate equal to, at HC2's option, one, two or three month LIBOR plus a margin of 6.75%.

In April 2020 and May 2020, HC2 drew $10.0 million and $5.0 million of the 2020 Revolving Credit Agreement, respectively.

The Company used the proceeds for general corporate purposes.

In March 2020, with the cash proceeds from the sale of GMSL, HC2 redeemed $76.9 million of its 11.50% senior secured notes due 2021 (the "Senior Secured Notes") at a price equal to 104.5% of the principal amount plus accrued interest through the redemption date.

HC2 recognized $5.4 million in extinguishment loss related to the redemption of its Senior Secured Notes, which is included in Loss on early extinguishment or restructuring of debt in our Condensed Consolidated Statement of Operations.

In June 2020, with the cash proceeds from the partial sale of New Saxon's interest in HMN, HC2 redeemed $50.6 million of its Senior Secured Notes at a price equal to 104.5% of the principal amount plus accrued interest through the redemption date.

HC2 recognized $3.4 million in extinguishment loss related to the this redemption, which is included in Loss on early extinguishment or restructuring of debt in our Condensed Consolidated Statement of Operations.

Separation from Philip A.

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Falcone is no longer a director of the Company.

On April 16, 2020, R2 received $10 million in funding from Huadong Medicine Company Limited as part of Huadong's $30 million Series B equity investment in R2.

On October 2, 2020, a subsidiary of the Company entered into a stock purchase agreement with TransWorld Holdings Inc, formerly GoIP Global Inc, to sell 100% of ICS and its subsidiary.

The disposition closed on October 31, 2020.

In April 2020, R2 received $10 million in funding from Huadong Medicine Company Limited as part of Huadong's $30 million Series B equity investment in R2.

These funds will be used to commercialize R2's revolutionary CryoAesthetic technology which promises physicians a new way to lighten, brighten and rejuvenate skin.

This investment represents the second tranche of Huadong's investment at an approximate post-money valuation of $90 million and reduces Pansend's ownership by 7.8% to 56.1%.

Financial Presentation Background

Financial Presentation

In the below section within this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we compare, pursuant to U.S.

GAAP and SEC disclosure rules, the Company’s results of operations for the three and six months ended June 30, 2020 as compared to the three and six months ended June 30, 2019.

GAAP and SEC disclosure rules, the Company’s results of operations for the three and nine months ended September 30, 2020 as compared to the three and nine months ended September 30, 2019.

Results of Operations

The following table summarizes our results of operations and a comparison of the change between the periods (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

Construction $ 172.3 $ 195.7 $ (23.4) $ 348.8 $ 387.8 $ (39.0)

Energy 10.3 5.5 4.8 20.7 10.6 10.1

Infrastructure $ 160.8 $ 168.4 $ (7.6) $ 509.6 $ 556.2 $ (46.6)

Clean Energy 10.3 8.7 1.6 31.0 19.3 11.7

Telecommunications 136.4 162.2 (25.8) 430.1 507.0 (76.9)

Insurance 78.9 80.4 (1.5) 223.2 251.3 (28.1)

Broadcasting 9.5 10.0 (0.5) 19.6 19.8 (0.2)

Spectrum 9.7 10.0 (0.3) 29.3 29.8 (0.5)

Eliminations (1)

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Income (loss) from operations

Construction 4.5 16.2 (11.7) 7.1 21.9 (14.8)

Energy 2.2 (0.3) 2.5 3.9 (0.7) 4.6

Infrastructure 6.0 12.4 (6.4) 13.1 34.3 (21.2)

Clean Energy 1.5 0.4 1.1 5.4 (0.3) 5.7

Telecommunications 0.3 (0.4) 0.7 0.6 0.4 0.2

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Life Sciences (4.7) (3.0) (1.7) (11.4) (6.6) (4.8)

Broadcasting (1.2) (1.7) 0.5 (4.1) (5.0) 0.9

Spectrum (11.7) (3.8) (7.9) (15.8) (8.8) (7.0)

Other (0.5) 0.1 (0.6) (2.1) — (2.1)

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Loss on early extinguishment or restructuring of debt (4.2) — (4.2) (13.4) — (13.4)

(Loss) income from equity investees (0.2) 7.2 (7.4) (2.7) 1.3 (4.0)

Loss from equity investees (1.3) (1.3) — (4.0) — (4.0)

Gain on bargain purchase — — — — 1.1 (1.1)

Other income (loss) 7.3 6.1 1.2 74.1 4.7 69.4

Income (loss) from continuing operations 43.9 18.0 25.9 (9.7) 22.3 (32.0)

(Loss) income from continuing operations (20.0) (7.8) (12.2) (29.7) 14.5 (44.2)

Income tax expense (1.6) (1.1) (0.5) (4.4) (6.2) 1.8

Income (loss) from continuing operations 28.5 16.9 11.6 (12.5) 17.2 (29.7)

Loss from discontinued operations (including loss on disposal of $39.3 million) — (7.7) 7.7 (60.0) (14.3) (45.7)

Net income (loss) 28.5 9.2 19.3 (72.5) 2.9 (75.4)

Net (income) loss attributable to noncontrolling interest and redeemable noncontrolling interest (15.4) 0.2 (15.6) 2.5 3.7 (1.2)

Net income (loss) attributable to HC2 Holdings, Inc.

(Loss) income from continuing operations (21.6) (8.9) (12.7) (34.1) 8.3 (42.4)

Income (loss) from discontinued operations (including loss on disposal of $39.3 million) — 0.6 (0.6) (60.0) (13.7) (46.3)

Net loss (21.6) (8.3) (13.3) (94.1) (5.4) (88.7)

Net loss attributable to noncontrolling interest and redeemable noncontrolling interest 4.3 1.2 3.1 6.8 4.9 1.9

Net loss attributable to HC2 Holdings, Inc.

(17.3) (7.1) (10.2) (87.3) (0.5) (86.8)

Preferred dividends, deemed dividends, and repurchase gains 0.4 0.4 — 1.2 (0.4) 1.6

Net income (loss) attributable to common stock and participating preferred stockholders $ 12.7 $ 9.0 $ 3.7 $ (70.8) $ 7.4 $ (78.2)

(1) The Insurance segment results are inclusive of realized and unrealized gains and net investment income for the three and six months ended June 30, 2020 and 2019, inclusive of transactions between entities under common control, which are eliminated or are reclassified in consolidation.

Net loss attributable to common stock and participating preferred stockholders $ (17.7) $ (7.5) $ (10.2) $ (88.5) $ (0.1) $ (88.4)

(1) The Insurance segment results are inclusive of realized and unrealized gains and net investment income for the three and nine months ended September 30, 2020 and 2019, inclusive of transactions between entities under common control, which are eliminated or are reclassified in consolidation.

Net revenue :

Net revenue for the three months ended June 30, 2020 decreased $102.2 million to $377.0 million from $479.2 million for the three months ended June 30, 2019.

The decrease in revenue was driven by our Telecommunications segment, which can be attributed to changes in customer mix and fluctuations in wholesale traffic volumes, and our Construction segment primarily driven by lower revenues from our structural steel fabrication and erection business.

These were partially offset by increases at our Energy segment due to the Alternative Fuels Tax Credit ("AFTC") revenue related to CNG sales recognized in the current period and the acquisition of the ampCNG stations.

Net revenue for the six months ended June 30, 2020 decreased $106.4 million to $821.8 million from $928.2 million for the six months ended June 30, 2019.

The decrease is also due to our Insurance segment, net of eliminations, largely driven by unrealized losses resulting from unfavorable market movements in values for preferred stock holdings.

These were partially offset by increases at our Energy segment due to AFTC revenue related to CNG sales recognized in the current period and the acquisition of the ampCNG stations.

Income (loss) from operations :

Income from operations for the three months ended June 30, 2020 decreased $28.7 million to $4.9 million from $33.6 million for the three months ended June 30, 2019.

The decrease in operations was primarily driven by our Insurance segment due to an increase in policy benefits, changes in reserves, and commissions due to non-recurring favorable claims activity recognized in the comparable period along with unfavorable claims activity and reserves development in the current quarter, and our Construction segment primarily due to lower revenues from our structural steel fabrication and erection business and COVID-19 related costs.

Income (loss) from operations for the six months ended June 30, 2020 decreased $81.1 million to a loss of $21.9 million from income of $59.2 million for the six months ended June 30, 2019.

Net revenue for the three months ended September 30, 2020 decreased $34.2 million to $393.3 million from $427.5 million for the three months ended September 30, 2019.

The decrease in revenue was driven by our Telecommunications segment, which can be attributed to changes in customer mix and fluctuations in wholesale traffic volumes, and our Infrastructure segment, primarily driven by a decline in power and industrial repair and maintenance work performed.

Net revenue for the nine months ended September 30, 2020 decreased $140.6 million to $1,215.1 million from $1,355.7 million for the nine months ended September 30, 2019.

The decrease in revenue was driven by our Telecommunications segment, which can be attributed to changes in customer mix and fluctuations in wholesale traffic volumes, our Infrastructure segment, primarily driven by lower revenues from our structural steel fabrication and erection business, and our Insurance segment, net of eliminations, largely driven by lower net investment income and unfavorable market movements in values for preferred stock holdings and fixed maturity impairments.

These were partially offset by increases at our Clean Energy segment due to the acquisition of the ampCNG stations and the Alternative Fuels Tax Credit ("AFTC") revenue related to CNG sales recognized in the current period.

(Loss) income from operations :

Income from operations for the three months ended September 30, 2020 decreased $9.6 million to a loss of $2.1 million from income of $7.5 million for the three months ended September 30, 2019.

The decrease in income from operations was driven by our Spectrum segment, due to the impairment of licenses in the current period and our Infrastructure segment, driven by declines in power and industrial repair and maintenance work performed and decreased revenues from our structural steel fabrication and erection business.

The decrease was partially offset by an increase in our Insurance segment, due to favorable claims activity recognized in the current period.

(Loss) income from operations for the nine months ended September 30, 2020 decreased $90.7 million to a loss of $24.0 million from income of $66.7 million for the nine months ended September 30, 2019.

The decrease was primarily driven by our Insurance segment due to an increase in policy benefits, changes in reserves, and commissions due to non-recurring favorable claims activity recognized in the comparable period along with unfavorable claims activity and reserves development in the first half of 2020.

In addition there was a decline in revenues, due to unrealized losses from unfavorable market movements in preferred stock holdings.

The decrease is also attributable to our Construction segment due to lower revenues from our structural steel fabrication and erection business.

The decrease is also attributable to our Infrastructure segment due to lower revenues from our structural steel fabrication and erection business.

Interest expense :

Interest expense for the three months ended June 30, 2020 increased $2.3 million to $21.4 million from $19.1 million for the three months ended June 30, 2019.

Interest expense for the six months ended June 30, 2020 increased $4.8 million to $42.7 million from $37.9 million for the six months ended June 30, 2019.

The increases were attributable to an increase in the aggregate principal amount of debt at our Broadcasting and Energy segments.

Interest expense for the three months ended September 30, 2020 decreased $0.4 million to $19.7 million from $20.1 million for the three months ended September 30, 2019.

The decrease was attributable to a decrease in the aggregate principal amount of debt at our Corporate segment, partially offset by an increase in the aggregate principal amount of debt at our Spectrum segment.

Interest expense for the nine months ended September 30, 2020 increased $4.4 million to $62.4 million from $58.0 million for the nine months ended September 30, 2019.

The increase was attributable to an increase in the aggregate principal amount of debt at our Spectrum and Clean Energy segments.

Loss on early extinguishment or restructuring of debt :

Loss on early extinguishment or restructuring of debt for the three months ended June 30, 2020 was $3.4 million.

This was driven by the 4.5% redemption premium on the $50.6 million redemption of the Senior Secured Notes and the write-off of deferred financing costs and original issuance discount.

Loss on early extinguishment or restructuring of debt for the six months ended June 30, 2020 was $9.2 million.

Loss on early extinguishment or restructuring of debt for the three months ended September 30, 2020 was $4.2 million.

This was driven by the write-off of deferred financing costs and original issuance discount related to the repayment of existing credit facilities and redemption of the mandatorily redeemable preferred stock at our Clean Energy segment.

Loss on early extinguishment or restructuring of debt for the nine months ended September 30, 2020 was $13.4 million.

This was driven by the write-off of deferred financing costs and original issuance discount related to the $15.0 million pay down of the 2019 Revolving Credit Agreement and the $76.9 million redemption of the Senior Secured Notes at a 4.5% premium in the first quarter of 2020 and the $50.6 million redemption of the Senior Secured Notes at a 4.5% premium in the second quarter of 2020.

(Loss) income from equity investees :

(Loss) income from equity investees for the three months ended June 30, 2020 decreased $7.4 million to a loss of $0.2 million from income of $7.2 million for the three months ended June 30, 2019.

The decrease was driven by lower profit for the HMN investment, generally attributable to the timing of turnkey project work.

(Loss) income from equity investees for the six months ended June 30, 2020 decreased $4.0 million to a loss of $2.7 million from income of $1.3 million for the six months ended June 30, 2019.

The decrease was driven by an increase in losses for the HMN investment, which is generally attributable to the timing of turnkey project work.

This was also driven by the write-off of deferred financing costs and original issuance discount related to the pay down of the existing credit facilities and redemption of the mandatorily redeemable preferred stock at our Clean Energy segment.

Loss from equity investees :

Loss from equity investees for the three months ended September 30, 2020 remained unchanged from the three months ended September 30, 2019 at a loss of $1.3 million.

Loss from equity investees for the nine months ended September 30, 2020 decreased $4.0 million to a loss of $4.0 million from zero for the nine months ended September 30, 2019.

The decrease was driven by a decrease in income for the HMN investment, which is generally attributable to the timing of turnkey project work.

Other income (loss):

Other income (loss) for the three months ended June 30, 2020 increased $68.8 million to a gain of $64.0 million from a loss of $4.8 million for the three months ended June 30, 2019.

Other income (loss) for the six months ended June 30, 2020 increased $68.2 million to a gain of $66.8 million from a loss of $1.4 million for the six months ended June 30, 2020.

The increases were primarily driven by the gain recognized on the First HMN Sale partially offset by the loss recognized on the Convertible Note embedded conversion feature.

Other income (loss) for the three months ended September 30, 2020 increased $1.2 million to a gain of $7.3 million from a gain of $6.1 million for the three months ended September 30, 2019.

Other income (loss) for the nine months ended September 30, 2020 increased $69.4 million to a gain of $74.1 million from a gain of $4.7 million for the nine months ended September 30, 2020.

The increases were primarily driven by the gain recognized on the First HMN Sale, which closed during the second quarter of 2020.

Income tax expense :

Income tax expense was an expense of $15.4 million and $1.1 million for the three months ended June 30, 2020 and 2019, respectively.

The income tax expense recorded for the three months ended June 30, 2020 primarily relates to tax expense incurred in China from the partial sale of HMN and projected expense as calculated under ASC 740 for tax paying entities, primarily the Insurance segment, which is no longer in a valuation allowance.

Income tax expense was an expense of $1.6 million and $1.1 million for the three months ended September 30, 2020 and 2019, respectively.

The income tax expense recorded for the three months ended September 30, 2020 relates to the projected expense as calculated under ASC 740 for taxpaying entities, primarily the Insurance segment, which is no longer in a valuation allowance.

Additionally, the tax benefits associated with losses generated by the HC2 Holdings, Inc.

consolidated income tax return and certain other businesses have been reduced by a full valuation allowance as we do not believe it is more-likely-than-not that the losses will be utilized prior to expiration.

The income tax expense recorded for the three months ended June 30, 2019 relates to the projected expense as calculated under ASC 740 for taxpaying entities offset by a benefit from the release of the valuation allowance of the Insurance segment due to an increase in current year income.

Income tax expense was an expense of $2.8 million and $5.1 million for the six months ended June 30, 2020 and 2019, respectively.

The income tax expense recorded for the six months ended June 30, 2020 primarily relates to tax expense incurred in China from the partial sale of HMN and projected expense as calculated under ASC 740 for tax paying entities, primarily the Insurance segment, which is no longer in a valuation allowance, mostly offset by a tax benefit from the carryback of net operating losses at the Insurance segment as a result of the enactment of the CARES Act.

The income tax expense recorded for the three months ended September 30, 2019 relates to the projected expense as calculated under ASC 740 for taxpaying entities offset by a benefit from the release of the valuation allowance of the Insurance segment due to an increase in current year income.

Income tax expense was an expense of $4.4 million and $6.2 million for the nine months ended September 30, 2020 and 2019, respectively.

The income tax expense recorded for the nine months ended September 30, 2020 primarily relates to tax expense incurred in China from the partial sale of HMN and projected expense as calculated under ASC 740 for taxpaying entities, primarily the Insurance segment, offset by a discrete tax benefit from the carryback of net operating losses at the Insurance segment as a result of the enactment of the CARES Act.

Additionally, the tax benefits associated with losses generated by the HC2 Holdings, Inc.

The income tax expense recorded for the six months ended June 30, 2019 relates to the projected expense as calculated under ASC 740 for taxpaying entities offset by a benefit from the release of the valuation allowance of the Insurance segment due to an increase in current year income.

Loss from discontinued operations (including loss on disposal of $39.3 million) :

Loss from discontinued operations for the three months ended June 30, 2020 decreased $7.7 million to zero from $7.7 million for the three months ended June 30, 2019.

Loss from discontinued operations for the six months ended June 30, 2020 increased $45.7 million to $60.0 million from $14.3 million for the six months ended June 30, 2019.

The income tax expense recorded for the nine months ended September 30, 2019 relates to the projected expense as calculated under ASC 740 for taxpaying entities offset by a benefit from the release of the valuation allowance of the Insurance segment due to an increase in current year income.

Income (loss) from discontinued operations (including loss on disposal of $39.3 million) :

Income (loss) from discontinued operations for the three months ended September 30, 2020 decreased $0.6 million to zero from income of $0.6 million for the three months ended September 30, 2019.

Loss from discontinued operations for the nine months ended September 30, 2020 increased $46.3 million to a loss of $60.0 million from a loss of $13.7 million for the nine months ended September 30, 2019.

The increase in loss was largely driven by the $39.3 million loss on the sale of GMSL in the first quarter of 2020.

2 unchanged sentences

Preferred dividends, deemed dividends, and repurchase gains :

Preferred dividends, and deemed dividends, and repurchase gains for the three months ended June 30, 2020 remained unchanged from the three months ended June 30, 2019 at loss of $0.4 million.

Preferred dividends, and deemed dividends, and repurchase gains for the six months ended June 30, 2020 decreased $1.6 million to a loss of $0.8 million compared to a gain of $0.8 million for the six months ended June 30, 2019.

Preferred dividends, and deemed dividends, and repurchase gains for the three months ended September 30, 2020 remained unchanged from the three months ended September 30, 2019 at loss of $0.4 million.

Preferred dividends, and deemed dividends, and repurchase gains for the nine months ended September 30, 2020 decreased $1.6 million to a loss of $1.2 million compared to a gain of $0.4 million for the nine months ended September 30, 2019.

The decrease was largely driven by the Insurance segment's 2019 purchase of 10,000 shares of the Company's Series A-2 Preferred Stock at a $1.7 million discount.

2 unchanged sentences

Each table summarizes the results of operations of our operating segments and compares the amount of the change between the periods presented (in millions).

Construction Segment

Three Months Ended June 30, Six Months Ended June 30,

Infrastructure Segment

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

5 unchanged sentences

Income from operations $ 6.0 $ 12.4 $ (6.4) $ 13.1 $ 34.3 $ (21.2)

Net revenue from our Construction segment for the three months ended June 30, 2020 decreased $23.4 million to $172.3 million from $195.7 million for the three months ended June 30, 2019.

Net revenue from our Construction segment for the six months ended June 30, 2020 decreased $39.0 million to $348.8 million from $387.8 million for the six months ended June 30, 2019.

The decreases were primarily driven by lower revenues from our structural steel fabrication and erection business, which had increased activity in the comparable period on certain large commercial construction projects that are now at or near completion and lower revenues from our construction modeling and detailing business.

Net revenue from our Infrastructure segment for the three months ended September 30, 2020 decreased $7.6 million to $160.8 million from $168.4 million for the three months ended September 30, 2019.

The decrease was primarily driven by a decline in industrial maintenance and repair work performed, as well as a slight decline in revenues from our structural steel fabrication and erection business, which had increased activity in the comparable period on certain large commercial construction projects that are now at or near completion.

Net revenue from our Infrastructure segment for the nine months ended September 30, 2020 decreased $46.6 million to $509.6 million from $556.2 million for the nine months ended September 30, 2019.

The decreases were primarily driven by lower revenues from our structural steel fabrication and erection business, which had increased activity in the comparable period on certain large commercial construction projects that are now at or near completion, as well as slight decreases in power and industrial maintenance and repair work performed.

Cost of revenue:

Cost of revenue from our Construction segment for the three months ended June 30, 2020 decreased $8.7 million to $146.6 million from $155.3 million for the three months ended June 30, 2019.

Cost of revenue from our Construction segment for the six months ended June 30, 2020 decreased $20.3 million to $297.8 million from $318.1 million for the six months ended June 30, 2019.

The decreases were primarily driven by the timing of project work under execution and change in backlog mix, including a reduction in large commercial construction projects in the current period.

Cost of revenue from our Infrastructure segment for the three months ended September 30, 2020 increased $2.2 million to $133.0 million from $130.8 million for the three months ended September 30, 2019.

The increase was primarily due to higher costs incurred in response to the COVID-19 pandemic along with timing of project work under execution and change in backlog mix.

Cost of revenue from our Infrastructure segment for the nine months ended September 30, 2020 decreased $18.1 million to $430.8 million from $448.9 million for the nine months ended September 30, 2019.

The decrease was primarily driven by the timing of project work under execution and change in backlog mix, including a reduction in large commercial construction projects in the current period.

The decrease was partially offset by higher costs incurred in response to the COVID-19 pandemic.

Selling, general and administrative:

Selling, general and administrative from our Construction segment for the three months ended June 30, 2020 decreased $1.6 million to $18.6 million from $20.2 million for the three months ended June 30, 2019.

Selling, general and administrative from our Construction segment for the six months ended June 30, 2020 decreased $1.5 million to $38.5 million from $40.0 million for the six months ended June 30, 2019.

The decreases were primarily driven by lower travel expenses, acquisition costs, and bonus expense in the current period, partially offset by higher costs incurred due to COVID-19 pandemic.

Selling, general and administrative from our Infrastructure segment for the three months ended September 30, 2020 decreased $2.0 million to $19.3 million from $21.3 million for the three months ended September 30, 2019.

Selling, general and administrative from our Infrastructure segment for the nine months ended September 30, 2020 decreased $3.5 million to $57.8 million from $61.3 million for the nine months ended September 30, 2019.

The decreases were primarily driven by lower travel expenses and bonus expense in the current period, partially offset by higher costs incurred due to COVID-19 pandemic.

Depreciation and amortization :

Depreciation and amortization from our Construction segment for the three months ended June 30, 2020 decreased $1.3 million to $2.7 million from $4.0 million for the three months ended June 30, 2019.

Depreciation and amortization from our Construction segment for the six months ended June 30, 2020 decreased $2.6 million to $5.3 million from $7.9 million for the six months ended June 30, 2019.

Depreciation and amortization from our Infrastructure segment for the three months ended September 30, 2020 decreased $1.2 million to $2.7 million from $3.9 million for the three months ended September 30, 2019.

Depreciation and amortization from our Infrastructure segment for the nine months ended September 30, 2020 decreased $3.8 million to $8.0 million from $11.8 million for the nine months ended September 30, 2019.

The decreases were primarily related to the full depreciation and amortization of assets that took place subsequent to the comparable periods.

Energy Segment

Three Months Ended June 30, Six Months Ended June 30,

Clean Energy Segment

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

3 unchanged sentences

Depreciation and amortization 2.2 2.0 0.2 6.3 4.9 1.4

Other operating expense — (0.1) 0.1 — (0.1) 0.1

Income (loss) from operations $ 1.5 $ 0.4 $ 1.1 $ 5.4 $ (0.3) $ 5.7

Net revenue from our Energy segment for the three months ended June 30, 2020 increased $4.8 million to $10.3 million from $5.5 million for the three months ended June 30, 2019.

Net revenue from our Energy segment for the six months ended June 30, 2020 increased $10.1 million to $20.7 million from $10.6 million for the six months ended June 30, 2019.

The increases were primarily driven by higher volume-related revenues attributable to the inclusion of the acquired ampCNG stations, which was acquired in June 2019.

Net revenue from our Clean Energy segment for the three months ended September 30, 2020 increased $1.6 million to $10.3 million from $8.7 million for the three months ended September 30, 2019.

The increase was primarily driven by AFTC revenue related to CNG sales recognized in the current period, which had not yet been renewed for 2019 in the comparable period, as well as slight increases in income recognized from renewable energy tax credits under recently signed agreements related to the sale of renewable natural gas ("RNG").

Net revenue from our Clean Energy segment for the nine months ended September 30, 2020 increased $11.7 million to $31.0 million from $19.3 million for the nine months ended September 30, 2019.

The increase was primarily driven by higher volume-related revenues attributable to the inclusion of the acquired ampCNG stations, which was acquired in June 2019.

Additionally, the increases were driven by AFTC revenue related to CNG sales recognized in the current period.

1 unchanged sentence

Cost of revenue:

Cost of revenue from our Energy segment for the three months ended June 30, 2020 increased $1.4 million to $4.7 million from $3.3 million for the three months ended June 30, 2019.

Cost of revenue from our Energy segment for the six months ended June 30, 2020 increased $3.2 million to $9.7 million from $6.5 million for the six months ended June 30, 2019.

The increases were due to the overall growth in volume of gasoline gallons delivered and higher commodity and utility costs driven by the acquisition of ampCNG stations.

Cost of revenue from our Clean Energy segment for the three months ended September 30, 2020 remained unchanged from the three months ended September 30, 2019 at $5.1 million.

Cost of revenue from our Clean Energy segment for the nine months ended September 30, 2020 increased $3.2 million to $14.8 million from $11.6 million for the nine months ended September 30, 2019.

The increase was due to the overall growth in volume of gasoline gallon equivalents delivered and higher commodity and utility costs driven by the acquisition of ampCNG stations.

Selling, general and administrative:

Selling, general and administrative expenses from our Energy segment for the three months ended June 30, 2020 increased $0.4 million to $1.4 million from $1.0 million for the three months ended June 30, 2019.

Selling, general and administrative expenses from our Energy segment for the six months ended June 30, 2020 increased $1.1 million to $3.0 million from $1.9 million for the six months ended June 30, 2019.

The increases were driven by the overall growth of the Energy segment as it continues to increase its national footprint.

Selling, general and administrative expenses from our Clean Energy segment for the three months ended September 30, 2020 increased $0.2 million to $1.5 million from $1.3 million for the three months ended September 30, 2019.

Selling, general and administrative expenses from our Clean Energy segment for the nine months ended September 30, 2020 increased $1.3 million to $4.5 million from $3.2 million for the nine months ended September 30, 2019.

The increases were driven by the overall growth of the Clean Energy segment as it continues to increase its national footprint.

Depreciation and amortization :

Depreciation and amortization from our Energy segment for the three months ended June 30, 2020 increased $0.5 million to $2.0 million from $1.5 million for the three months ended June 30, 2019.

Depreciation and amortization from our Energy segment for the six months ended June 30, 2020 increased $1.2 million to $4.1 million from $2.9 million for the six months ended June 30, 2019.

The increases were due to additional depreciation and amortization from the acquisition of ampCNG stations completed in June 2019.

Depreciation and amortization from our Clean Energy segment for the three months ended September 30, 2020 increased $0.2 million to $2.2 million from $2.0 million for the three months ended September 30, 2019.

Depreciation and amortization from our Clean Energy segment for the nine months ended September 30, 2020 increased $1.4 million to $6.3 million from $4.9 million for the nine months ended September 30, 2019.

The increase was due to additional depreciation and amortization from the acquisition of ampCNG stations completed in June 2019.

Telecommunications Segment

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

6 unchanged sentences

Net revenue :

Net revenue from our Telecommunications segment for the three months ended June 30, 2020 decreased $82.0 million to $107.3 million from $189.3 million for the three months ended June 30, 2019.

Net revenue from our Telecommunications segment for the six months ended June 30, 2020 decreased $51.1 million to $293.7 million from $344.8 million for the six months ended June 30, 2019.

Net revenue from our Telecommunications segment for the three months ended September 30, 2020 decreased $25.8 million to $136.4 million from $162.2 million for the three months ended September 30, 2019.

Net revenue from our Telecommunications segment for the nine months ended September 30, 2020 decreased $76.9 million to $430.1 million from $507.0 million for the nine months ended September 30, 2019.

The decreases can be attributed to changes in our customer mix and fluctuations in wholesale traffic volumes, which can result in variability across periods.

Cost of revenue:

Cost of revenue from our Telecommunications segment for the three months ended June 30, 2020 decreased $81.1 million to $105.3 million from $186.4 million for the three months ended June 30, 2019.

Cost of revenue from our Telecommunications segment for the six months ended June 30, 2020 decreased $49.1 million to $289.6 million from $338.7 million for the six months ended June 30, 2019.

The decreases were directly correlated to the fluctuations in wholesale voice termination volumes, in addition to a slight reduction in margin mix attributed to market pressures on call termination rates.

Cost of revenue from our Telecommunications segment for the three months ended September 30, 2020 decreased $25.0 million to $134.8 million from $159.8 million for the three months ended September 30, 2019.

Cost of revenue from our Telecommunications segment for the nine months ended September 30, 2020 decreased $74.1 million to $424.4 million from $498.5 million for the nine months ended September 30, 2019.

The decreases were directly correlated to the fluctuations in wholesale voice termination volumes, in addition to a slight reduction in margin mix attributable to market pressures on call termination rates.

Selling, general and administrative:

Selling, general and administrative expenses from our Telecommunications segment for the three months ended June 30, 2020 decreased $0.4 million to $1.7 million from $2.1 million for the three months ended June 30, 2019.

Selling, general and administrative expenses from our Telecommunications segment for the six months ended June 30, 2020 decreased $1.0 million to $3.6 million from $4.6 million for the six months ended June 30, 2019.

The decreases were primarily due to a decrease in compensation expense due to a lower headcount.

Selling, general and administrative expenses from our Telecommunications segment for the three months ended September 30, 2020 decreased $0.6 million to $1.2 million from $1.8 million for the three months ended September 30, 2019.

Selling, general and administrative expenses from our Telecommunications segment for the nine months ended September 30, 2020 decreased $1.6 million to $4.8 million from $6.4 million for the nine months ended September 30, 2019.

The decreases were primarily due to a decrease in compensation expense due to a lower headcount along with a reduction in accounting and legal costs.

Other operating expense:

Other operating expense expenses from our Telecommunications segment for the three and six months ended June 30, 2020 decreased $0.5 million to zero from $0.5 million for the three and six months ended June 30, 2019.

Other operating expense expenses from our Telecommunications segment for the three months ended September 30, 2020 decreased $0.9 million to zero from $0.9 million for the three months ended September 30, 2019.

Other operating expense expenses from our Telecommunications segment for the nine months ended September 30, 2020 decreased $1.4 million to zero from $1.4 million for the nine months ended September 30, 2019.

The decreases were driven by impairment of goodwill in the comparable period as a result of declining performance at the segment.

Insurance Segment

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

8 unchanged sentences

$ 15.1 $ 10.6 $ 4.5 $ 16.7 $ 75.9 $ (59.2)

(1) The Insurance segment revenues are inclusive of realized and unrealized gains and net investment income for the three and six months ended June 30, 2020 and 2019, inclusive of transactions between entities under common control, which are eliminated or are reclassified in consolidation.

(1) The Insurance segment revenues are inclusive of realized and unrealized gains and net investment income for the three and nine months ended September 30, 2020 and 2019, inclusive of transactions between entities under common control, which are eliminated or are reclassified in consolidation.

Life, accident and health earned premiums, net:

Life, accident and health earned premiums, net from our Insurance segment for the three months ended June 30, 2020 decreased $0.4 million to $29.7 million from $30.1 million for the three months ended June 30, 2019.

The decrease is due to run-off of the closed blocks of business, partially offset by an increase in KIC LTC premiums from rate increases, outpacing terminations on this block.

Life, accident and health earned premiums, net from our Insurance segment for the six months ended June 30, 2020 decreased $1.7 million to $58.2 million from $59.9 million for the six months ended June 30, 2019.

The decrease was primarily related to run-off of the closed blocks of business.

Life, accident and health earned premiums, net from our Insurance segment for the three months ended September 30, 2020 decreased $0.2 million to $28.6 million from $28.8 million for the three months ended September 30, 2019.

Life, accident and health earned premiums, net from our Insurance segment for the nine months ended September 30, 2020 decreased $1.9 million to $86.8 million from $88.7 million for the nine months ended September 30, 2019.

The decreases were primarily related to natural run-off of the closed blocks of business.

Net investment income:

Net investment income from our Insurance segment for the three months ended June 30, 2020 decreased $1.3 million to $51.2 million from $52.5 million for the three months ended June 30, 2019.

The decrease was due to decreased holdings in preferred stocks and short term investments, largely offset from an increase in bonds due to increased holdings.

Net investment income from our Insurance segment for the three months ended September 30, 2020 decreased $4.3 million to $49.2 million from $53.5 million for the three months ended September 30, 2019.

Net investment income from our Insurance segment for the nine months ended September 30, 2020 decreased $4.3 million to $154.7 million from $159.0 million for the nine months ended September 30, 2019.

The decreases were primarily due to lower net investment income and unfavorable market movements in values for preferred stock holdings and fixed maturity impairments.

Net realized and unrealized gains (losses) on investments :

Net realized and unrealized gains (losses) on investments from our Insurance segment for the six months ended June 30, 2020 decreased $24.9 million to a loss of $19.4 million from a gain of $5.5 million for the six months ended June 30, 2019.

The decrease was driven by unfavorable market movements in common and preferred stocks driven by interest rate reductions due to the COVID-19 pandemic.

Net realized and unrealized gains (losses) on investments from our Insurance segment for the three months ended September 30, 2020 increased $3.0 million to a gain of $1.1 million from a loss of $1.9 million for the three months ended September 30, 2019.

The increase was largely due to favorable market movements on common and preferred stock, partially offset by an impairment of select investments in the current period.

Net realized and unrealized gains (losses) on investments from our Insurance segment for the nine months ended September 30, 2020 decreased $21.9 million to a loss of $18.3 million from a gain of $3.6 million for the nine months ended September 30, 2019.

The decrease was driven by unfavorable market movements in common and preferred stocks driven by interest rate reductions due to the COVID-19 pandemic and impairment of select investments in the current period.

Policy benefits, changes in reserves, and commissions :

Policy benefits, changes in reserves, and commissions from our Insurance segment for the three months ended June 30, 2020 increased $15.0 million to $63.0 million from $48.0 million for the three months ended June 30, 2019.

Policy benefits, changes in reserves, and commissions from our Insurance segment for the six months ended June 30, 2020 increased $34.7 million to $135.4 million from $100.7 million for the six months ended June 30, 2019.

The increases were due to non-recurring favorable claims activity recognized in the comparable period primarily driven by an increase in contingent non-forfeiture option activity as a result of in-force rate actions approved and implemented and unfavorable claims activity and reserves development in the first half of 2020.

Policy benefits, changes in reserves, and commissions from our Insurance segment for the three months ended September 30, 2020 decreased $6.5 million to $59.6 million from $66.1 million for the three months ended September 30, 2019.

The decrease was due to favorable claims activity recognized in the current period, partially offset by unfavorable reserves development.

Policy benefits, changes in reserves, and commissions from our Insurance segment for the nine months ended September 30, 2020 increased $28.2 million to $195.0 million from $166.8 million for the nine months ended September 30, 2019.

The increase was due to favorable claims activity recognized in the comparable period primarily driven by an increase in contingent non-forfeiture option activity as a result of in-force rate actions approved and implemented and unfavorable claims activity and reserves development in the current period.

Selling, general and administrative :

Selling, general and administrative expenses from our Insurance segment for the three months ended June 30, 2020 decreased $0.4 million to $8.8 million from $9.2 million for the three months ended June 30, 2019.

Selling, general and administrative expenses from our Insurance segment for the six months ended June 30, 2020 increased $1.3 million to $18.7 million from $17.4 million for the six months ended June 30, 2019.

The increases were driven by increases in miscellaneous software expenses, legal expenses, additional premium taxes, and third party management fees.

Selling, general and administrative expenses from our Insurance segment for the three months ended September 30, 2020 decreased $0.8 million to $8.6 million from $9.4 million for the three months ended September 30, 2019.

The decrease was primarily due to a reduction in bonus expense in the current period.

Selling, general and administrative expenses from our Insurance segment for the nine months ended September 30, 2020 increased $0.5 million to $27.3 million from $26.8 million for the nine months ended September 30, 2019.

The increase was primarily driven by increases in salaries due to headcount increases, severance expense incurred in the current period, third party management fees and premium taxes, largely offset by a reduction in bonus expense.

Depreciation and amortization :

Depreciation and amortization from our Insurance segment for the three months ended June 30, 2020 decreased $0.5 million to $5.5 million from $6.0 million for the three months ended June 30, 2019.

Depreciation and amortization from our Insurance segment for the six months ended June 30, 2020 decreased $1.1 million to $11.4 million from $12.5 million for the six months ended June 30, 2019.

Depreciation and amortization from our Insurance segment for the three months ended September 30, 2020 decreased $1.3 million to $4.4 million from $5.7 million for the three months ended September 30, 2019.

Depreciation and amortization from our Insurance segment for the nine months ended September 30, 2020 decreased $2.4 million to $15.8 million from $18.2 million for the nine months ended September 30, 2019.

The decreases were driven by a reduction in negative VOBA amortization largely due to lower policy terminations for the LTC policies acquired in 2018.

Life Sciences Segment

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

1 unchanged sentence

Depreciation and amortization — — — 0.1 0.1 —

Other operating expense 0.1 — 0.1 0.1 0.1 —

Loss from operations $ (4.7) $ (3.0) $ (1.7) $ (11.4) $ (6.6) $ (4.8)

Selling, general and administrative :

Selling, general and administrative expenses from our Life Sciences segment for the three months ended June 30, 2020 increased $1.8 million to $3.4 million from $1.6 million for the three months ended June 30, 2019.

Selling, general and administrative expenses from our Life Sciences segment for the six months ended June 30, 2020 increased $3.1 million to $6.6 million from $3.5 million for the six months ended June 30, 2019.

Selling, general and administrative expenses from our Life Sciences segment for the three months ended September 30, 2020 increased $1.6 million to $4.6 million from $3.0 million for the three months ended September 30, 2019.

Selling, general and administrative expenses from our Life Sciences segment for the nine months ended September 30, 2020 increased $4.8 million to $11.2 million from $6.4 million for the nine months ended September 30, 2019.

The increases were driven by higher expenses at R2 Technologies, which increased spending from the comparable period to ramp up efforts to achieve commercialization of its products.

Three Months Ended June 30, Six Months Ended June 30,

Spectrum Segment

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

3 unchanged sentences

Depreciation and amortization 1.7 1.8 (0.1) 5.1 4.7 0.4

Other operating income (2.1) (1.0) (1.1) (2.1) (1.9) (0.2)

Other operating (income) expense 9.6 (1.0) 10.6 7.5 (2.9) 10.4

Loss from operations $ (11.7) $ (3.8) $ (7.9) $ (15.8) $ (8.8) $ (7.0)

Net revenue :

Net revenue from our Broadcasting segment for the three months ended June 30, 2020 decreased $0.5 million to $9.5 million from $10.0 million for the three months ended June 30, 2019.

Net revenue from our Broadcasting segment for the six months ended June 30, 2020 decreased $0.2 million to $19.6 million from $19.8 million for the six months ended June 30, 2019.

The decreases were primarily driven by a decrease in advertising revenues at the Azteca network driven by the negative impact of the COVID-19 pandemic, partially offset by higher station revenues as our Broadcasting segment grew the number of operating stations and launched new customers across its broadcast platform.

Net revenue from our Spectrum segment for the three months ended September 30, 2020 decreased $0.3 million to $9.7 million from $10.0 million for the three months ended September 30, 2019.

Net revenue from our Spectrum segment for the nine months ended September 30, 2020 decreased $0.5 million to $29.3 million from $29.8 million for the nine months ended September 30, 2019.

The decreases were primarily driven by a decrease in advertising revenues at the Azteca network driven by the negative impact of the COVID-19 pandemic, partially offset by higher station revenues as our Spectrum segment grew the number of operating stations and launched new customers across its broadcast platform.

Cost of revenue:

Cost of revenue from our Broadcasting segment for the six months ended June 30, 2020 decreased $0.7 million to $11.1 million from $11.8 million for the six months ended June 30, 2019.

Cost of revenue from our Spectrum segment for the three months ended September 30, 2020 increased $0.2 million to $5.8 million from $5.6 million for the three months ended September 30, 2019.

The increase was primarily driven by increased cost of revenues associated with the higher number of operating stations, mostly offset by cost reductions at Network.

Cost of revenue from our Spectrum segment for the nine months ended September 30, 2020 decreased $0.5 million to $16.9 million from $17.4 million for the nine months ended September 30, 2019.

The decrease was primarily driven by cost reductions at Network, partially offset by increased cost of revenues associated with the higher number of operating stations.

Selling, general and administrative:

Selling, general and administrative expenses from our Broadcasting segment for the six months ended June 30, 2020 decreased $0.7 million to $11.3 million from $12.0 million for the six months ended June 30, 2019.

The decrease was primarily due to lower stock-based compensation, legal and other overhead expenses.

Selling, general and administrative expenses from our Spectrum segment for the three months ended September 30, 2020 decreased $3.1 million to $4.3 million from $7.4 million for the three months ended September 30, 2019.

Selling, general and administrative expenses from our Spectrum segment for the nine months ended September 30, 2020 decreased $3.8 million to $15.6 million from $19.4 million for the nine months ended September 30, 2019.

The decreases were primarily due to lower compensation and acquisition expenses.

Depreciation and amortization :

Depreciation and amortization from our Broadcasting segment for the three months ended June 30, 2020 increased $0.2 million to $1.7 million from $1.5 million for the three months ended June 30, 2019.

Depreciation and amortization from our Broadcasting segment for the six months ended June 30, 2020 increased $0.5 million to $3.4 million from $2.9 million for the six months ended June 30, 2019.

The increases were driven by additional amortization of fixed assets at new stations which were acquired subsequent to the comparable period.

Other operating income :

Other operating income from our Broadcasting segment for the three months ended June 30, 2020 increased $1.1 million to $2.1 million from $1.0 million for the three months ended June 30, 2019.

Other operating income from our Broadcasting segment for the six months ended June 30, 2020 increased $0.2 million to $2.1 million from $1.9 million for the six months ended June 30, 2019.

The changes were primarily due to receipt of FCC reimbursements.

Three Months Ended June 30, Six Months Ended June 30,

Depreciation and amortization from our Spectrum segment for the nine months ended September 30, 2020 increased $0.4 million to $5.1 million from $4.7 million for the nine months ended September 30, 2019.

The increase was driven by additional amortization of fixed assets at new stations which were acquired subsequent to the comparable period.

Other operating (income) expense :

Other operating (income) expense from our Spectrum segment for the three months ended September 30, 2020 decreased $10.6 million to an expense of $9.6 million from income of $1.0 million for the three months ended September 30, 2019.

Other operating (income) expense from our Spectrum segment for the nine months ended September 30, 2020 decreased $10.4 million to an expense of $7.5 million from income of $2.9 million for the nine months ended September 30, 2019.

The decreases were primarily due to the impairment of licenses in the current period and a decrease in gains from FCC reimbursements.

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

Selling, general and administrative $ 0.5 $ — $ 0.5 $ 2.1 $ 0.1 $ 2.0

Depreciation and amortization — — — — — —

Other operating (income) expense — (0.1) 0.1 — (0.1) 0.1

1 unchanged sentence

Selling, general and administrative :

Selling, general and administrative expenses from our Other segment for the three months ended June 30, 2020 increased $0.6 million to $0.6 million from zero for the three months ended June 30, 2019.

Selling, general and administrative expenses from our Other segment for the six months ended June 30, 2020 increased $1.6 million to $1.6 million from zero for the six months ended June 30, 2019.

Selling, general and administrative expenses from our Other segment for the three months ended September 30, 2020 increased $0.5 million to $0.5 million from zero for the three months ended September 30, 2019.

Selling, general and administrative expenses from our Other segment for the nine months ended September 30, 2020 increased $2.0 million to $2.1 million from $0.1 million for the nine months ended September 30, 2019.

The increases were predominantly driven by costs associated with the sale of HMN, which closed during the second quarter of 2020.

Non-operating Corporate

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

Selling, general and administrative $ 5.2 $ 6.5 $ (1.3) $ 22.3 $ 20.2 $ 2.1

Depreciation and amortization 0.1 0.1 — 0.1 0.1 —

Loss from operations $ (5.3) $ (6.6) $ 1.3 $ (22.4) $ (20.3) $ (2.1)

Selling, general and administrative :

Selling, general and administrative expenses from our Non-operating Corporate segment for the three months ended June 30, 2020 increased $1.5 million to $8.0 million from $6.5 million for the three months ended June 30, 2019.

Selling, general and administrative expenses from our Non-operating Corporate segment for the six months ended June 30, 2020 increased $3.4 million to $17.1 million from $13.7 million for the six months ended June 30, 2019.

The increases were driven by legal costs incurred associated with the consent revocation, acquisition costs, and the annual stockholder meeting related to the current board solicitation matter with certain stockholders of the Company.

This was partially offset by a decrease in bonus, stock compensation expense and overhead costs in the current period.

Selling, general and administrative expenses from our Non-operating Corporate segment for the three months ended September 30, 2020 decreased $1.3 million to $5.2 million from $6.5 million for the three months ended September 30, 2019.

The decrease was primarily due to a decrease in bonus, stock compensation expense, rent expense and various consulting expenses, partially offset by an increase in legal fees incurred.

Selling, general and administrative expenses from our Non-operating Corporate segment for the nine months ended September 30, 2020 increased $2.1 million to $22.3 million from $20.2 million for the nine months ended September 30, 2019.

The increase was driven by legal costs incurred associated with the consent revocation, acquisition costs, and the annual stockholder meeting related to the board solicitation matter with certain stockholders of the Company.

This was partially offset by a decrease in bonus, stock compensation expense, rent expense and various consulting expenses in the current period.

Income (loss) from Equity Investees

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

3 unchanged sentences

Life Sciences:

Loss from equity investees within our Life Sciences segment for the three months ended June 30, 2020 increased $0.9 million to $1.1 million from $0.2 million for the three months ended June 30, 2019.

Loss from equity investees within our Life Sciences segment for the six months ended June 30, 2020 increased $0.8 million to $2.1 million from $1.3 million for the six months ended June 30, 2019.

Loss from equity investees within our Life Sciences segment for the three months ended September 30, 2020 increased $0.3 million to $1.5 million from $1.2 million for the three months ended September 30, 2019.

Loss from equity investees within our Life Sciences segment for the nine months ended September 30, 2020 increased $1.1 million to $3.6 million from $2.5 million for the nine months ended September 30, 2019.

The increases in losses were largely due to higher equity method losses recorded from our investment in MediBeacon due to the timing of clinical trials.

Income (loss) from equity investees within our Other segment for the three months ended June 30, 2020 decreased $6.5 million to income of $0.9 million from income of $7.4 million for the three months ended June 30, 2019.

Income (loss) from equity investees within our Other segment for the six months ended June 30, 2020 decreased $3.2 million to a loss of $0.6 million from income $2.6 million for the six months ended June 30, 2019.

The decrease was driven by the equity investment in HMN, as the joint venture produced lower profits than in the prior periods, which is generally attributable to timing of turnkey project work, and a reduction in ownership as a result of the partial sale in the second quarter of 2020.

Income (loss) from equity investees within our Other segment for the three months ended September 30, 2020 increased $0.3 million to income of $0.2 million from a loss of $0.1 million for the three months ended September 30, 2019.

The increase was driven by the equity investment in HMN, as the joint venture produced higher profits than in the comparable period, which is generally attributable to timing of turnkey project work.

Income (loss) from equity investees within our Other segment for the nine months ended September 30, 2020 decreased $2.9 million to a loss of $0.4 million from income $2.5 million for the nine months ended September 30, 2019.

The decrease was driven by the equity investment in HMN, as the joint venture produced lower profits than in the comparable period, which is generally attributable to timing of turnkey project work, and a reduction in ownership as a result of the partial sale in the second quarter of 2020.

Non-GAAP Financial Measures and Other Information

30 unchanged sentences

Our board and management find the exclusion of the impact of these COVID-19 response initiatives from Adjusted EBITDA to be useful because it allows us and our investors to assess the impact of these response initiatives on our results of operations.

(in millions) Three Months Ended June 30, 2020

Core Operating Subsidiaries Early Stage & Other Non-operating Corporate HC2

Construction Energy Telecom Life Sciences Broadcasting Other and Eliminations

Net income attributable to HC2 Holdings, Inc.

(in millions) Three Months Ended September 30, 2020

Non-operating Corporate HC2

Infrastructure Clean Energy Telecom Life Sciences Spectrum Other and Eliminations

Net loss attributable to HC2 Holdings, Inc.

Net income attributable to HC2 Holdings Insurance segment 12.7

12 unchanged sentences

Share-based payment expense — — — — 0.1 — 0.7 0.8

Discontinued Operations — — — — — — — —

Non-recurring items 0.4 — — — — — 0.1 0.5

2 unchanged sentences

Adjusted EBITDA $ 17.7 $ 3.7 $ 0.4 $ (5.9) $ (0.2) $ (0.1) $ (3.7) $ 11.9

Total Core Operating Subsidiaries $ 23.5

(in millions) Three Months Ended June 30, 2019

Core Operating Subsidiaries Early Stage & Other Non-operating Corporate HC2

Construction Energy Telecom Life Sciences Broadcasting Other and Eliminations

Net income attributable to HC2 Holdings, Inc.

(in millions) Three Months Ended September 30, 2019

Non-operating Corporate HC2

Infrastructure Clean Energy Telecom Life Sciences Spectrum Other and Eliminations

Net loss attributable to HC2 Holdings, Inc.

Net income attributable to HC2 Holdings Insurance segment 10.5

8 unchanged sentences

Other (income) expense, net (0.1) (0.3) — (8.2) 0.9 0.1 2.7 (4.9)

Foreign currency (gain) loss (included in cost of revenue) — — 0.1 — — — — 0.1

Income tax (benefit) expense 2.9 — — — — — (2.8) 0.1

5 unchanged sentences

Adjusted EBITDA $ 19.4 $ 2.3 $ 0.8 $ (4.0) $ (1.9) $ (0.1) $ (4.7) $ 11.8

Total Core Operating Subsidiaries $ 25.2

Construction:

Net income (loss) from our Construction segment for the three months ended June 30, 2020 decreased by $7.3 million to income of $1.6 million from income of $8.9 million for the three months ended June 30, 2019.

Adjusted EBITDA from our Construction segment for the three months ended June 30, 2020 decreased $4.0 million to $19.1 million from $23.1 million for the three months ended June 30, 2019.

The decrease in Adjusted EBITDA can be attributed to the timing of project work under execution and change in backlog mix, including a reduction in large commercial construction projects in the current period.

Net income (loss) from our Energy segment for the three months ended June 30, 2020 increased by $1.1 million to income of $0.4 million from a loss of $0.7 million for the three months ended June 30, 2019.

Adjusted EBITDA from our Energy segment for the three months ended June 30, 2020 increased $2.9 million to $4.2 million from $1.3 million for the three months ended June 30, 2019.

The increase in Adjusted EBITDA was primarily driven by higher volume-related revenues from the acquisition of ampCNG stations in June 2019 and the AFTC recognized in the current period which had not yet been renewed in the comparable period.

Partially offsetting these increases were higher selling, general and administrative expenses as a result of the acquisition of the ampCNG stations.

Infrastructure:

Net income from our Infrastructure segment for the three months ended September 30, 2020 decreased by $4.5 million to $2.5 million from $7.0 million for the three months ended September 30, 2019.

Adjusted EBITDA from our Infrastructure segment for the three months ended September 30, 2020 decreased $1.7 million to $17.7 million from $19.4 million for the three months ended September 30, 2019.

The decrease in Adjusted EBITDA was primarily driven by a decline in power and industrial repair and maintenance work performed, as well as a slight decline in revenues from our structural steel fabrication and erection business, which had increased activity in the comparable period on certain large commercial construction projects that are now at or near completion.

Partially offsetting this were decreases in corporate overhead, including a reduction in bonus expense.

Clean Energy:

Net income (loss) from our Clean Energy segment for the three months ended September 30, 2020 decreased by $3.3 million to a loss of $3.4 million from a loss of $0.1 million for the three months ended September 30, 2019.

Adjusted EBITDA from our Clean Energy segment for the three months ended September 30, 2020 increased $1.4 million to $3.7 million from $2.3 million for the three months ended September 30, 2019.

The increase in Adjusted EBITDA was primarily driven the AFTC recognized in the current period which had not yet been renewed in the comparable period, as well as slight increases in income recognized from renewable energy tax credits under recently signed agreements related to the sale of RNG.

Telecommunications:

Net income (loss) from our Telecommunications segment for the three months ended June 30, 2020 decreased by $0.5 million to a loss of $0.1 million from income of $0.4 million for the three months ended June 30, 2019.

Adjusted EBITDA from our Telecommunications segment for the three months ended June 30, 2020 decreased $0.6 million to $0.2 million from $0.8 million for the three months ended June 30, 2019.

The decrease in Adjusted EBITDA was primarily due to a decline in the contracting of call termination margin as a result of the continued decline in the international long distance market, partially offset by a decrease in compensation expense due to headcount decreases.

Net income (loss) from our Telecommunications segment for the three months ended September 30, 2020 increased by $2.7 million to income of $2.4 million from a loss of $0.3 million for the three months ended September 30, 2019.

Adjusted EBITDA from our Telecommunications segment for the three months ended September 30, 2020 decreased $0.4 million to $0.4 million from $0.8 million for the three months ended September 30, 2019.

Life Sciences :

Net loss from our Life Sciences segment for the three months ended June 30, 2020 decreased $0.2 million to a loss of $1.2 million from a loss of of $1.4 million for the three months ended June 30, 2019.

Adjusted EBITDA loss from our Life Sciences segment for the three months ended June 30, 2020 increased $2.7 million to $4.5 million from $1.8 million for the three months ended June 30, 2019.

Net income (loss) from our Life Sciences segment for the three months ended September 30, 2020 decreased $9.9 million to a loss of $4.3 million from income of $5.6 million for the three months ended September 30, 2019.

Adjusted EBITDA loss from our Life Sciences segment for the three months ended September 30, 2020 increased $1.9 million to $5.9 million from $4.0 million for the three months ended September 30, 2019.

Broadcasting :

Net loss from our Broadcasting segment for the three months ended June 30, 2020 increased $1.2 million to $4.7 million from $3.5 million for the three months ended June 30, 2019.

Adjusted EBITDA loss from our Broadcasting segment for the three months ended June 30, 2020 increased $0.2 million to $1.1 million from $0.9 million for the three months ended June 30, 2019.

Net loss from our Spectrum segment for the three months ended September 30, 2020 increased $9.5 million to $15.7 million from $6.2 million for the three months ended September 30, 2019.

Adjusted EBITDA loss from our Spectrum segment for the three months ended September 30, 2020 decreased $1.7 million to $0.2 million from $1.9 million for the three months ended September 30, 2019.

The overall decrease in Adjusted EBITDA loss was primarily driven by a decrease in compensation expense, as well as higher station revenues as our Spectrum segment grew the number of operating stations and launched new customers across its broadcast platform.

This was partially offset by a decrease in advertising revenues at the Azteca network driven by the negative impact of the COVID-19 pandemic.

Other and Eliminations :

Net income from our Other and Eliminations segment for the three months ended June 30, 2020 increased $45.0 million to $46.1 million from $1.1 million for the three months ended June 30, 2019.

Adjusted EBITDA from our Other and Eliminations segment for the three months ended June 30, 2020 decreased $6.5 million to $0.9 million from $7.4 million for the three months ended June 30, 2019.

The decrease in EBITDA for Other and Eliminations was driven by lower profits for the HMN investment, which is generally attributable to the timing of turnkey project work.

Net income from our Other and Eliminations segment for the three months ended September 30, 2020 decreased $2.2 million to $0.2 million from $2.4 million for the three months ended September 30, 2019.

Adjusted EBITDA from our Other and Eliminations segment for the three months ended September 30, 2020 remained unchanged from the three months ended September 30, 2019 at a loss of $0.1 million.

Non-operating Corporate:

Net loss from our Non-operating Corporate segment for the three months ended June 30, 2020 increased $16.4 million to $38.9 million from $22.5 million for the three months ended June 30, 2019.

Adjusted EBITDA loss from our Non-operating Corporate segment for the three months ended June 30, 2020 decreased $0.8 million to $3.6 million from $4.4 million for the three months ended June 30, 2019.

The decrease in Adjusted EBITDA loss was driven by lower bonus and overhead costs compared to the prior period.

(in millions) Six Months Ended June 30, 2020

Core Operating Subsidiaries Early Stage & Other Non-operating Corporate HC2

Construction Energy Telecom Life Sciences Broadcasting Other and Eliminations

Net loss from our Non-operating Corporate segment for the three months ended September 30, 2020 decreased $14.2 million to $9.7 million from $23.9 million for the three months ended September 30, 2019.

Adjusted EBITDA loss from our Non-operating Corporate segment for the three months ended September 30, 2020 decreased $1.0 million to $3.7 million from $4.7 million for the three months ended September 30, 2019.

The decrease in Adjusted EBITDA loss was driven by a decrease in discretionary bonus and a general reduction in overhead expenses, including professional fees, travel and entertainment expenses, and rent expense, partially offset by an increase in recurring legal fees.

(in millions) Nine Months Ended September 30, 2020

Non-operating Corporate HC2

Infrastructure Clean Energy Telecom Life Sciences Spectrum Other and Eliminations

Net loss attributable to HC2 Holdings, Inc.

18 unchanged sentences

Adjusted EBITDA $ 45.8 $ 11.7 $ 1.0 $ (14.6) $ (2.3) $ (0.8) $ (12.3) $ 28.5

Total Core Operating Subsidiaries $ 36.7

(in millions) Six Months Ended June 30, 2019

Core Operating Subsidiaries Early Stage & Other Non-operating Corporate HC2

Construction Energy Telecom Life Sciences Broadcasting Other and Eliminations

Net income attributable to HC2 Holdings, Inc.

(in millions) Nine Months Ended September 30, 2019

Non-operating Corporate HC2

Infrastructure Clean Energy Telecom Life Sciences Spectrum Other and Eliminations

Net loss attributable to HC2 Holdings, Inc.

Net income attributable to HC2 Holdings Insurance segment 74.6

8 unchanged sentences

Other (income) expense, net 0.1 (0.1) — (8.3) 1.3 (0.1) 3.7 (3.4)

Foreign currency (gain) loss (included in cost of revenue) — — 0.1 — — — — 0.1

Income tax (benefit) expense 8.0 — — — 0.1 — (5.3) 2.8

Noncontrolling interest 1.4 (0.7) — (2.2) (2.7) (0.7) — (4.9)

Bonus to be settled in equity — — — — — — — —

Share-based payment expense — — — 0.1 0.5 — 4.0 4.6

3 unchanged sentences

Adjusted EBITDA $ 54.9 $ 4.6 $ 2.4 $ (8.7) $ (5.3) $ 2.4 $ (15.2) $ 35.1

Total Core Operating Subsidiaries $ 39.4

Construction:

Net income from our Construction segment for the six months ended June 30, 2020 decreased $9.5 million to $1.5 million from $11.0 million for the six months ended June 30, 2019.

Adjusted EBITDA from our Construction segment for the six months ended June 30, 2020 decreased $7.4 million to $28.1 million from $35.5 million for the six months ended June 30, 2019.

Net income (loss) from our Energy segment for the six months ended June 30, 2020 increased by $2.3 million to income of $1.0 million from a loss of $1.3 million for the six months ended June 30, 2019.

Adjusted EBITDA from our Energy segment for the six months ended June 30, 2020 increased $5.7 million to $8.0 million from $2.3 million for the six months ended June 30, 2019.

Infrastructure:

Net income from our Infrastructure segment for the nine months ended September 30, 2020 decreased $14.0 million to $4.0 million from $18.0 million for the nine months ended September 30, 2019.

Adjusted EBITDA from our Infrastructure segment for the nine months ended September 30, 2020 decreased $9.1 million to $45.8 million from $54.9 million for the nine months ended September 30, 2019.

This was partially offset by a decrease in recurring corporate overhead, including a reduction in bonus expense.

Clean Energy:

Net loss from our Clean Energy segment for the nine months ended September 30, 2020 increased by $1.0 million to a loss of $2.4 million from a loss of $1.4 million for the nine months ended September 30, 2019.

Adjusted EBITDA from our Clean Energy segment for the nine months ended September 30, 2020 increased $7.1 million to $11.7 million from $4.6 million for the nine months ended September 30, 2019.

Partially offsetting these increases were higher selling, general and administrative expenses as a result of the acquisition of the ampCNG stations.

Partially offsetting these increases were higher costs of revenue and selling, general and administrative expenses as a result of the acquisition of the ampCNG stations.

Telecommunications:

Net income from our Telecommunications segment for the six months ended June 30, 2020 decreased by $0.5 million to $0.5 million from $1.0 million for the six months ended June 30, 2019.

Adjusted EBITDA from our Telecommunications segment for the six months ended June 30, 2020 decreased $1.0 million to $0.6 million from $1.6 million for the six months ended June 30, 2019.

Net income from our Telecommunications segment for the nine months ended September 30, 2020 increased by $2.2 million to $2.9 million from $0.7 million for the nine months ended September 30, 2019.

Adjusted EBITDA from our Telecommunications segment for the nine months ended September 30, 2020 decreased $1.4 million to $1.0 million from $2.4 million for the nine months ended September 30, 2019.

The decrease in Adjusted EBITDA was primarily due to a decline in call termination margin as a result of the continued decline in the international long distance market, partially offset by a decrease in compensation expense due to headcount decreases.

Life Sciences:

Net loss from our Life Sciences segment for the six months ended June 30, 2020 increased $0.4 million to $4.4 million from $4.0 million for the six months ended June 30, 2019.

Adjusted EBITDA loss from our Life Sciences segment for the six months ended June 30, 2020 increased $4.0 million to $8.7 million from $4.7 million for the six months ended June 30, 2019.

Net income (loss) from our Life Sciences segment for the nine months ended September 30, 2020 decreased $10.3 million to a loss of $8.7 million from income of $1.6 million for the nine months ended September 30, 2019.

Adjusted EBITDA loss from our Life Sciences segment for the nine months ended September 30, 2020 increased $5.9 million to $14.6 million from $8.7 million for the nine months ended September 30, 2019.

The increase in Adjusted EBITDA loss was primarily driven by higher expenses at R2 Technologies, which increased spending from the comparable period to ramp up efforts to achieve commercialization of its products and higher equity method losses recorded from our investment in MediBeacon due to the timing of clinical trials.

Broadcasting:

Net loss from our Broadcasting segment for the six months ended June 30, 2020 increased $3.0 million to $10.9 million from $7.9 million for the six months ended June 30, 2019.

Adjusted EBITDA loss from our Broadcasting segment for the six months ended June 30, 2020 decreased $1.3 million to $2.1 million from $3.4 million for the six months ended June 30, 2019.

The overall decrease in Adjusted EBITDA loss was primarily driven by increased revenue from broadcast stations, as well as cost reductions at Network, partially offset by increased cost of revenues associated with the higher number of operating stations, and a decrease in advertising revenues at the Azteca network driven by the negative impact of the COVID-19 pandemic.

Net loss from our Spectrum segment for the nine months ended September 30, 2020 increased $12.5 million to $26.6 million from $14.1 million for the nine months ended September 30, 2019.

Adjusted EBITDA loss from our Spectrum segment for the nine months ended September 30, 2020 decreased $3.0 million to $2.3 million from $5.3 million for the nine months ended September 30, 2019.

The overall decrease in Adjusted EBITDA loss was primarily driven a decrease in compensation expense, as well as higher station revenues as our Spectrum segment grew the number of operating stations and launched new customers across its broadcast platform.

This was partially offset by a decrease in advertising revenues at the Azteca network driven by the negative impact of the COVID-19 pandemic.

Other and Eliminations:

Net income (loss) from our Other and Eliminations segment for the six months ended June 30, 2020 increased $8.7 million to income of $4.0 million from a loss of $4.7 million for the six months ended June 30, 2019.

Adjusted EBITDA from our Other and Eliminations segment for the six months ended June 30, 2020 decreased $3.2 million to a loss of $0.7 million from income of $2.5 million for the six months ended June 30, 2019.

Net income (loss) from our Other and Eliminations segment for the nine months ended September 30, 2020 increased $6.5 million to income of $4.2 million from a loss of $2.3 million for the nine months ended September 30, 2019.

Adjusted EBITDA from our Other and Eliminations segment for the nine months ended September 30, 2020 decreased $3.2 million to a loss of $0.8 million from income of $2.4 million for the nine months ended September 30, 2019.

The decrease in EBITDA for Other and Eliminations was driven by lower profits for the HMN investment, which is generally attributable to the timing of turnkey project work.

Non-operating Corporate:

Net loss from our Non-operating Corporate segment for the six months ended June 30, 2020 increased $23.9 million to a loss of $70.0 million from a loss of $46.1 million for the six months ended June 30, 2019.

Adjusted EBITDA loss from our Non-operating Corporate segment for the six months ended June 30, 2020 decreased $1.9 million to $8.6 million from $10.5 million for the six months ended June 30, 2019.

The decrease in Adjusted EBITDA loss was driven by non-recurring severance payments made in the comparable period and reduced overhead expenses.

Net loss from our Non-operating Corporate segment for the nine months ended September 30, 2020 increased $9.7 million to $79.7 million from $70.0 million for the nine months ended September 30, 2019.

Adjusted EBITDA loss from our Non-operating Corporate segment for the nine months ended September 30, 2020 decreased $2.9 million to $12.3 million from $15.2 million for the nine months ended September 30, 2019.

(in millions):

Three Months Ended June 30, Six months ended June 30,

Three Months Ended September 30, Nine months ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

Construction $ 19.1 $ 23.1 $ (4.0) $ 28.1 $ 35.5 $ (7.4)

Energy 4.2 1.3 2.9 8.0 2.3 5.7

Infrastructure $ 17.7 $ 19.4 $ (1.7) $ 45.8 $ 54.9 $ (9.1)

Clean Energy 3.7 2.3 1.4 11.7 4.6 7.1

Telecommunications 0.4 0.8 (0.4) 1.0 2.4 (1.4)

Total Core Operating Subsidiaries 23.5 25.2 (1.7) 36.7 39.4 (2.7)

Life Sciences (5.9) (4.0) (1.9) (14.6) (8.7) (5.9)

Broadcasting (1.1) (0.9) (0.2) (2.1) (3.4) 1.3

Spectrum (0.2) (1.9) 1.7 (2.3) (5.3) 3.0

Other and Eliminations (0.1) (0.1) — (0.8) 2.4 (3.2)

Total Early Stage and Other (4.7) 4.7 (9.4) (11.5) (5.6) (5.9)

Non-Operating Corporate (3.7) (4.7) 1.0 (12.3) (15.2) 2.9

23 unchanged sentences

Refer to the analysis of the fluctuations within the results of operations section:

Three Months Ended June 30, Six months ended June 30,

Three Months Ended September 30, Nine months ended September 30,

2020 2019 Increase / (Decrease) 2020 2019 Increase / (Decrease)

7 unchanged sentences

Pre-tax Insurance AOI $ 14.3 $ 13.5 $ 0.8 $ 35.5 $ 75.2 $ (39.7)

Net income for the three months ended June 30, 2020 decreased $18.9 million to $11.4 million from $30.3 million for the three months ended June 30, 2019.

Pre-tax Insurance AOI for the three months ended June 30, 2020 decreased $18.4 million to $14.6 million from $33.0 million for the three months ended June 30, 2019.

The decrease was primarily driven by non-recurring favorable claims activity recognized in the comparable period driven by an increase in contingent non-forfeiture option activity as a result of in-force rate actions approved and implemented and additional unfavorable claims activity and reserve developments in the current year.

Additionally, the Insurance segment incurred larger expenses due to additional premium taxes, miscellaneous software expenses, third party management fees, and legal expenses.

Net income for the six months ended June 30, 2020 decreased $52.7 million to $11.4 million from $64.1 million for the six months ended June 30, 2019.

Pre-tax Insurance AOI for the six months ended June 30, 2020 decreased $40.5 million to $21.2 million from $61.7 million for six months ended June 30, 2019.

Additionally, the Insurance segment incurred larger expenses due to additional premium taxes, miscellaneous software expenses, third party management fees, and legal expenses.

Net income for the three months ended September 30, 2020 increased $2.2 million to $12.7 million from $10.5 million for the three months ended September 30, 2019.

Pre-tax Insurance AOI for the three months ended September 30, 2020 increased $0.8 million to $14.3 million from $13.5 million for the three months ended September 30, 2019.

The increase was due to favorable claims activity recognized in the current period.

This was partially offset by a reduction in net investment income due to lower net investment income and unfavorable market movements in values for preferred stock holdings and fixed maturity impairments and unfavorable VOBA amortization largely due to lower policy terminations for the LTC policies acquired in 2018.

Net income for the nine months ended September 30, 2020 decreased $50.5 million to $24.1 million from $74.6 million for the nine months ended September 30, 2019.

Pre-tax Insurance AOI for the nine months ended September 30, 2020 decreased $39.7 million to $35.5 million from $75.2 million for nine months ended September 30, 2019.

The decrease was primarily driven by non-recurring favorable claims activity recognized in the comparable period and additional unfavorable claims activity and reserve developments in the current year.

Additionally, the Insurance segment had a reduction in net investment income due to lower net investment income and unfavorable market movements in values for preferred stock holdings and fixed maturity impairments and unfavorable VOBA amortization largely due to lower policy terminations for the LTC policies acquired in 2018.

Projects in backlog consist of awarded contracts, letters of intent, notices to proceed, change orders, and purchase orders obtained.

2 unchanged sentences

Backlog can be significantly affected by the receipt or loss of individual contracts.

Construction Segment

At June 30, 2020, DBMG's backlog was $410.3 million, consisting of $349.9 million under contracts or purchase orders and $60.4 million under letters of intent or notices to proceed.

Approximately $96.6 million, representing 23.5% of DBMG’s backlog at June 30, 2020, was attributable to five contracts, letters of intent, notices to proceed or purchase orders.

Infrastructure Segment

At September 30, 2020, DBMG's backlog was $435.9 million, consisting of $336.7 million under contracts or purchase orders and $99.2 million under letters of intent or notices to proceed.

Approximately $145.2 million, representing 33.3% of DBMG’s backlog at September 30, 2020, was attributable to five contracts, letters of intent, notices to proceed or purchase orders.

If one or more of these projects terminate or reduce their scope, DBMG’s backlog could decrease substantially.

2 unchanged sentences

HC2 is a holding company and its liquidity needs are primarily for interest payments on its Senior Secured Notes, 2020 Revolving Credit Agreement, 7.50% convertible notes due 2022 (the "Convertible Notes"), dividend payments on its Preferred Stock and recurring operational expenses.

As of June 30, 2020, the Company had $203.8 million of cash and cash equivalents compared to $228.8 million as of December 31, 2019.

On a stand-alone basis, as of June 30, 2020, HC2 had cash and cash equivalents of $0.9 million compared to $11.6 million at December 31, 2019.

At June 30, 2020, cash and cash equivalents in our Insurance segment was $139.5 million compared to $170.5 million at December 31, 2019.

Our subsidiaries' principal liquidity requirements arise from cash used in operating activities, debt service, and capital expenditures, including purchases of steel construction equipment and subsea cable equipment, fueling stations, network equipment (such as switches, related transmission equipment and capacity), and service infrastructure, liabilities associated with insurance products, development of back-office systems, operating costs and expenses, and income taxes.

As of June 30, 2020, the Company had $654.6 million of indebtedness on a consolidated basis compared to $805.0 million as of December 31, 2019.

On a stand-alone basis, as of June 30, 2020 and December 31, 2019, HC2 had indebtedness of $412.4 million and $540.0 million, respectively.

As of September 30, 2020, the Company had $163.6 million of cash and cash equivalents compared to $228.8 million as of December 31, 2019.

On a stand-alone basis, as of September 30, 2020, HC2 had cash and cash equivalents of $8.9 million compared to $11.6 million at December 31, 2019.

At September 30, 2020, cash and cash equivalents in our Insurance segment was $114.7 million compared to $170.5 million at December 31, 2019.

Our subsidiaries' principal liquidity requirements arise from cash used in operating activities, debt service, and capital expenditures, including purchases of steel construction equipment, fueling stations, network equipment (such as switches, related transmission equipment and capacity), and service infrastructure, liabilities associated with insurance products, development of back-office systems, operating costs and expenses, and income taxes.

As of September 30, 2020, the Company had $665.0 million of indebtedness on a consolidated basis compared to $805.0 million as of December 31, 2019.

On a stand-alone basis, as of September 30, 2020 and December 31, 2019, HC2 had indebtedness of $412.4 million and $540.0 million, respectively.

HC2's stand-alone debt consists of the $342.4 million aggregate principal amount of the Senior Secured Notes, the $55.0 million aggregate principal amount of the Convertible Notes, and the $15.0 million 2020 Revolving Credit Agreement.

1 unchanged sentence

HC2 is required to make dividend payments on its outstanding Preferred Stock on January 15 th , April 15 th , July 15 th , and October 15 th of each year.

HC2 received $0.5 million in dividends from our Telecommunications segment during the six months ended June 30, 2020.

HC2 received $1.1 million and $2.9 million in net management fees during the three and six months ended June 30, 2020, respectively.

HC2 received $13.5 million in dividends from its Construction segment during the three and six months ended June 30, 2020, and on July 17, 2020 the construction segment announced it will pay a cash dividend of $5.0 million, or $1.30 per share.

HC2 received approximately $4.5 million of the total dividend payout.

HC2 received $0.5 million in dividends from our Telecommunications segment during the nine months ended September 30, 2020.

Additionally, HC2 received a deemed dividend in September 2020 to settle a $6.0 million cash advance from our Telecommunications segment in May of 2020.

HC2 received $1.1 million and $4.0 million in net management fees during the three and nine months ended September 30, 2020, respectively.

HC2 received $4.5 million and $18.0 million in dividends from its Infrastructure segment during the three and nine months ended September 30, 2020, respectively.

We have financed our growth and operations to date, and expect to finance our future growth and operations, through public offerings and private placements of debt and equity securities, credit facilities, vendor financing, capital lease financing and other financing arrangements, as well as cash generated from the operations of our subsidiaries.

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In addition, the sale of assets or the Company’s investments may also make the Company less attractive to potential investors or future financing partners.

We have begun to see significant costs increases, primarily at our Construction segment, driven by expenses associated with maintaining a safe work environment, and while executing on their projects.

During the three and six months ended June 30, 2020, $8.4 million and $8.8 million of COVID-19 costs were incurred.

Although the COVID-19 pandemic did not have a material impact on the HC2’s liquidity in the first half of 2020, management believes the continuation of the pandemic and its related effect on the U.S.

We have begun to see significant costs increases, primarily at our Infrastructure segment, driven by expenses associated with maintaining a safe work environment, and while executing on their projects.

During the three and nine months ended September 30, 2020, $6.4 million and $15.2 million of COVID-19 costs were incurred.

Although the COVID-19 pandemic did not have a material impact on the HC2’s liquidity in the first three quarters of 2020, management believes the continuation of the pandemic and its related effect on the U.S.

and global economies could introduce added pressure on the Company’s liquidity position and financial performance.

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The maintenance of liquidity covenant provides that the Company will not permit the aggregate amount of (i) all unrestricted cash and cash equivalents of the Company and the Subsidiary Guarantors, (ii) amounts available for drawing under revolving credit facilities and undrawn letters of credit of the Company and the Subsidiary Guarantors and (iii) dividends, distributions or payments that are immediately available to be paid to the Company by any of its Restricted Subsidiaries to be less than the Company’s obligation to pay interest on the Senior Secured Notes and all other debt, including Convertible Preferred Stock mandatory cash dividends or any other mandatory cash pay Preferred Stock but excluding any obligation to pay interest on Convertible Preferred Stock or any other mandatory cash pay Preferred Stock which, in each case, may be paid by accretion or in-kind in accordance with its terms of the Company and its Subsidiary Guarantors for the next six months.

As of December 31, 2019, the Company was in compliance with this covenant.

As of September 30, 2020, the Company was in compliance with this covenant.

The maintenance of collateral coverage provides that the Company's Collateral Coverage Ratio (as defined in the Secured Indenture as the ratio of (i) the Loan Collateral to (ii) Consolidated Secured Debt (each as defined therein)) calculated on a pro forma basis as of the last day of each fiscal quarter may not be less than 1.50 to 1.00.

As of June 30, 2020, the Company was in compliance with this covenant.

As of September 30, 2020, the Company was in compliance with this covenant.

The maintenance of secured net leverage ratio provides that the Company’s Secured Net Leverage Ratio (as defined in the Secured Indenture) as of any date of determination calculated on a pro forma basis after accounting for the net proceeds from any Asset Sale which the Company has determined to apply to the repayment of any Debt to exceed 7.75 to 1.00.

As of June 30, 2020, the Company was in compliance with this covenant.

As of September 30, 2020, the Company was in compliance with this covenant.

The maintenance of fixed charge coverage ratio provides that commencing with the fiscal year ending December 31, 2020, that the Company will not permit the Fixed Charge Coverage Ratio (as defined in the Secured Indenture) calculated as of the last day of each fiscal year of the Company to be less than 1.00 to 1.00 or that the Company’s “HC2 Corporate Overhead” (as defined in the Secured Indenture) in any fiscal year not exceed the sum of $29.0 million for such fiscal year.

As of June 30, 2020, the Company was in compliance.

As of September 30, 2020, the Company was in compliance.

The instruments governing the Company’s Preferred Stock also limit the Company’s and its subsidiaries ability to take certain actions, including, among other things, to incur additional indebtedness;

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The below table summarizes the cash provided by or used in our continuing operating, investing and financing activities and the amount of the respective changes between the periods (in millions):

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Increase / (Decrease)

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Operating Activities

Cash provided by operating activities was $48.6 million for the six months ended June 30, 2020 as compared to cash provided by operating activities of $33.6 million for the six months ended June 30, 2019.

The $15.0 million change was the result of the working capital improvements in our Construction and Energy segments.

Our Construction segment benefited from increased billings in excess of costs on new projects, while our Energy segment benefited from AFTC related collections in the current period.

These increases were offset by the working capital declines in our Telecommunication and Insurance segments.

Our Telecommunication segment experienced a decline due to the timing of vendor payments and receivables collections, while our Insurance segment recorded a large tax receivable during the current period as a result of the CARES Act, refer to Note 15.

Income Taxes for further detail.

Cash provided by operating activities was $78.2 million for the nine months ended September 30, 2020 as compared to cash provided by operating activities of $82.5 million for the nine months ended September 30, 2019.

The $4.3 million change was the result of the working capital improvements in our Infrastructure, Clean Energy, and Corporate segments.

Our Infrastructure segment benefited from increased billings in excess of costs on new projects, while our Clean Energy segment benefited from AFTC related collections in the current period.

In addition, our Corporate segment benefited from a decrease in discretionary bonus and a general reduction in overhead expenses, including professional fees, travel and entertainment expenses, and rent expense, partially offset by an increase in legal fees.

These increases were offset by the working capital declines in our Telecommunication segment, which experienced a decline due to the timing of vendor payments and receivables collections.

Investing Activities

Cash provided by investing activities was $145.9 million for the six months ended June 30, 2020 as compared to cash used in investing activities of $149.0 million for the six months ended June 30, 2019.

Cash provided by investing activities was $77.4 million for the nine months ended September 30, 2020 as compared to cash used in investing activities of $193.2 million for the nine months ended September 30, 2019.

The $270.6 million change was a result of the sales of GMSL and HMN during the current year and acquisition of ampCNG during the comparable period.

Financing Activities

Cash used in financing activities was $220.2 million for the six months ended June 30, 2020 as compared to cash provided by financing activities of $66.5 million for the six months ended June 30, 2019.

Cash used in financing activities was $221.4 million for the nine months ended September 30, 2020 as compared to cash provided by financing activities of $53.6 million for the nine months ended September 30, 2019.

The $275.0 million change was largely a result of the principal payments on debt obligations at our Corporate segment and payments to minority stockholders at our Other segment for the portion of the proceeds received from the sale of GMSL and HMN.

Further adding to the decline were payments on borrowings at our Infrastructure and Spectrum segments when compared to the prior period.

Infrastructure

Cash flows from operating activities are the principal source of cash used to fund DBMG’s operating expenses, interest payments on debt, and capital expenditures.

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DBMG is required to make monthly or quarterly interest payments on all of its debt.

Based upon the June 30, 2020 debt balance, DBMG anticipates that its interest payments will be approximately $1.7 million each quarter of 2020.

Based upon the September 30, 2020 debt balance, DBMG anticipates that its interest payments will be approximately $1.6 million for the fourth quarter of 2020.

DBMG believes that its available funds, cash generated by operating activities and funds available under its bank credit facilities will be sufficient to fund its capital expenditures and its working capital needs.

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Market environment

As of June 30, 2020, CIG was in a position to hold any investment security showing an unrealized loss until recovery, provided it remains comfortable with the credit of the issuer.

As of September 30, 2020, CIG was in a position to hold any investment security showing an unrealized loss until recovery, provided it remains comfortable with the credit of the issuer.

CIG does not rely on short-term funding or commercial paper and to date it has experienced no liquidity pressure, nor does it anticipate such pressure in the foreseeable future.

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CIG monitors its insurance subsidiary's compliance with the RBC requirements specified by the National Association of Insurance Commissioners.

As of June 30, 2020, CIG’s insurance subsidiary exceeded the minimum RBC requirements.

As of September 30, 2020, CIG’s insurance subsidiary exceeded the minimum RBC requirements.

Insurance Companies Capital Contributions

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In addition, at any given time, CIG’s insurance subsidiary could hold cash, highly liquid, high-quality short-term investment securities and other liquid investment grade fixed maturity securities to fund anticipated operating expenses, surrenders and withdrawals.

At June 30, 2020 and December 31, 2019, CIG’s investment portfolio is comprised of the following (in millions):

June 30, 2020 December 31, 2019

At September 30, 2020 and December 31, 2019, CIG’s investment portfolio is comprised of the following (in millions):

September 30, 2020 December 31, 2019

Fair Value Percent Fair Value Percent

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The following table summarizes the credit quality, by NRSRO rating, of CIG's fixed income portfolio (in millions):

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Fair Value Percent Fair Value Percent

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Off-Balance Sheet Arrangements

DBMG’s off-balance sheet arrangements at June 30, 2020 included letters of credit of $9.1 million under Credit and Security Agreements and performance bonds of $108.0 million.

DBMG’s off-balance sheet arrangements at September 30, 2020 included letters of credit of $9.8 million under Credit and Security Agreements and performance bonds of $100.2 million.

DBMG’s contract arrangements with customers sometimes require DBMG to provide performance bonds to partially secure its obligations under its contracts.

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Critical Accounting Policies

There have been no material changes in the Company’s critical accounting policies during the quarter ended June 30, 2020.

There have been no material changes in the Company’s critical accounting policies during the quarter ended September 30, 2020.

For information about critical accounting policies, refer to “Critical Accounting Policies” under Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

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Our actual results or other outcomes may differ from those expressed or implied by forward-looking statements contained herein due to a variety of important factors, including, without limitation, the following:

• the effect of the recent novel coronavirus (“COVID-19”) pandemic and related governmental responses on our business, financial condition and results of operations;

• the effect of the novel coronavirus (“COVID-19”) pandemic and related governmental responses on our business, financial condition and results of operations;

• limitations on our ability to successfully identify any strategic acquisitions or business opportunities and to compete for these opportunities with others who have greater resources;

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• our possible inability to hire and retain qualified executive management, sales, technical and other personnel.

Construction / DBM Global Inc.

Infrastructure / DBM Global Inc.

Our actual results or other outcomes of DBM Global, Inc.

and its wholly-owned subsidiaries ("DBMG"), and, thus, our Construction segment, may differ from those expressed or implied by forward-looking statements contained herein due to a variety of important factors, including, without limitation, the following:

and its wholly-owned subsidiaries ("DBMG"), and, thus, our Infrastructure segment, may differ from those expressed or implied by forward-looking statements contained herein due to a variety of important factors, including, without limitation, the following:

• our ability to maintain efficient staffing and productivity as well as delays and cancellations as a result of the COVID-19 pandemic;

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• lack of necessary liquidity to provide bid, performance, advance payment and retention bonds, guarantees, or letters of credit securing DBMG’s obligations under bids and contracts or to finance expenditures prior to the receipt of payment for the performance of contracts.

Energy / ANG Holdings, Inc.

Our actual results or other outcomes of ANG, and, thus, our Energy segment, may differ from those expressed or implied by forward-looking statements contained herein due to a variety of important factors, including, without limitation, the following:

Clean Energy / Beyond6, Inc.

Our actual results or other outcomes of Beyond6, and, thus, our Clean Energy segment, may differ from those expressed or implied by forward-looking statements contained herein due to a variety of important factors, including, without limitation, the following:

• reductions in demand for our products as a result of the COVID-19 pandemic;

• automobile and engine manufacturers’ limited production of originally manufactured natural gas vehicles and engines for the markets in which ANG participates;

• automobile and engine manufacturers’ limited production of originally manufactured natural gas vehicles and engines for the markets in which Beyond6 participates;

• environmental regulations and programs mandating the use of cleaner burning fuels;

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• the safety and environmental risks of natural gas fueling operations and vehicle conversions;

• our Energy segment’s ability to implement its business plan in a regulated environment;

• our Clean Energy segment’s ability to implement its business plan in a regulated environment;

• the adoption, modification or repeal in environmental, tax, government regulations, and other programs and incentives that encourage the use of clean fuel and alternative vehicles;

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• governmental regulation in the healthcare industry.

Broadcasting / HC2 Broadcasting Holdings Inc.

Our actual results or other outcomes of HC2 Broadcasting Holdings Inc., and, thus, our Broadcasting segment, may differ from those expressed or implied by forward-looking statements contained herein due to a variety of important factors, including, without limitation, the following:

Spectrum / HC2 Broadcasting Holdings Inc.

Our actual results or other outcomes of HC2 Broadcasting Holdings Inc., and, thus, our Spectrum segment, may differ from those expressed or implied by forward-looking statements contained herein due to a variety of important factors, including, without limitation, the following:

• our ability to attract advertisers during the COVID-19 pandemic;

• our Broadcasting segment’s ability to integrate our recent and pending broadcasting acquisitions;

• our Broadcasting segment’s ability to operate in highly competitive markets and maintain market share;

• our Broadcasting segment’s ability to effectively implement its business strategy or be successful in the operation of its business;

• our Spectrum segment’s ability to integrate our recent and pending broadcasting acquisitions;

• our Spectrum segment’s ability to operate in highly competitive markets and maintain market share;

• our Spectrum segment’s ability to effectively implement its business strategy or be successful in the operation of its business;

• new and growing sources of competition in the broadcasting industry;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis