Innovate Corp. · NYSE:VATE

Innovate — HC2 Holdings — Q1 2018 Earnings Presentation

37 slides from Innovate's earnings presentation, May 10, 2018

1. Slide 1: First Quarter 2018 Conference Call

   HC2 HOLDINGS, INC. First Quarter 2018 Conference Call © HC2 Holdings, Inc. 2018

2. Slide 2: Safe Harbor Disclaimers: Forward-Looking Statements

   Safe Harbor Disclaimers Special Note Regarding Forward-Looking Statements Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements. G

3. Slide 3: Safe Harbor Disclaimers: Non-GAAP Financial Measures

   Safe Harbor Disclaimers Non-GAAP Financial Measures Adjusted EBITDA In this presentation, HC2 refers to certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), including Core Operating Subsidiary Adjusted EBITDA, Total Adjusted EBI

4. Slide 4: Agenda

   Agenda OVERVIEW AND Philip Falcone Chairman, President and CEO FINANCIAL HIGHLIGHTS Philip A. Falcone Chairman, President and CEO Michael J. Sena Chief Financial Officer Q AND A Andrew G. Backman Managing Director © 2 0 1 8 H C 2 H O L D I N G S , I NC. 3

5. Slide 5: Quarterly Overview

   Quarterly Overview

6. Slide 6: Segment Financial Summary ($m)

   Segment Financial Summary ($m) Q1 2018 Q1 2017 Core Operating Subsidiaries Construction $10.0 $8.6 Marine Services (2.4) 16.3 Energy 0.7 1.2 Telecom 1.1 1.7 Total Core Operating $9.3 $27.8 Adjusted Early Stage and Other Holdings EBITDA Life Sciences ($4.4) ($4.1) Broadcasting (5.1) - Other (0.2) (1.

7. Slide 7: First Quarter 2018 Highlights

   First Quarter 2018 Highlights  $718 million near record backlog provides significant visibility [~18 – 24 months]  $759 million backlog taking into consideration awarded, but not yet signed contracts  Continue to see opportunities in commercial sector totaling approximately $300m Construction  C

8. Slide 8: First Quarter 2018 Highlights (con't)

   First Quarter 2018 Highlights (con’t)  $1.2 million Net Income for 1Q18; ($1.0) million Adjusted Operating Income for 1Q18  Insurance Acquisition of Humana’s ~$2.3 billion long-term care insurance business expected to close 3Q18; Will increase insurance investment platform to ~$3.5 billion of cash

9. Slide 9: 2018 Focus and Priorities – Update

   2018 Focus and Priorities – Update  Optimization of HC2 Capital Structure – Completed $110m tack-on to refinance senior secured bridge loans at 102.0% (5/7/18) – Global refinancing of 11% Secured Notes to reduce cost of debt capital remains focus – Continue to reduce cumulative outstanding of prefe

10. Slide 10: Questions and Answers

    Questions and Answers

11. Slide 11: Appendix

    Appendix:

12. Slide 12: HC2's Diversified Portfolio

    HC2’s Diversified Portfolio Core Financial Core Operating Subsidiaries Services Subsidiaries Construction: Marine Services: Energy: Telecommunications: Insurance: DBM GLOBAL (SCHUFF) GMSL ANG PTGI ICS CIG  1Q18 Revenue: $158.9m  1Q18 Revenue: $36.7m  1Q18 Revenue: $4.5m  1Q18 Revenue: $202.3m 

13. Slide 13: Consolidated Financial Summary ($m)

    Consolidated Financial Summary ($m) Q1 2018 Q1 2017 Total Net Revenue $453.7 $390.6 Total Operating Expenses $467.4 $389.6 Income Loss From Operations ($13.8) $1.0 Statement of Operations Interest Expense ($19.3) ($14.1) (Selected Financial Data) Income From Equity Investees ($5.2) $7.7 Income (loss

14. Slide 14: Segment Financial Summary ($m)

    Segment Financial Summary ($m) Q1 2018 FY 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2016 Core Operating Subsidiaries Construction $10.0 $51.6 $15.1 $16.8 $11.1 $8.6 $59.9 Marine Services (2.4) 44.0 15.3 8.8 3.6 16.3 41.2 Energy 0.7 2.9 0.4 0.3 1.0 1.2 2.5 Telecom 1.1 6.9 1.6 1.5 2.2 1.7 5.6 Total Core

15. Slide 15: Construction: DBM Global Inc. First Quarter Update

    Construction: DBM Global Inc. First Quarter Update  1Q18 Net Income: $3.5m versus $3.2m in 1Q17  1Q18 Adjusted EBITDA: $10.0m versus $8.6m in 1Q17  Near record backlog of $718m at end of 1Q18, an increase of over 44% vs. $498m in year-ago quarter – ~$759m taking into consideration awarded, but no

16. Slide 16: Marine Services: Global Marine Group First Quarter Update

    Marine Services: Global Marine Group First Quarter Update  1Q18 Net (Loss): ($6.3)m versus Net Income $11.2m in 1Q17  1Q18 Adjusted EBITDA (Loss): ($2.4)m versus Income $16.3m in 1Q17  Near record Global Marine backlog of $430m at 1Q18 quarter-end  1Q18 Adjusted EBITDA impacted by timing associa

17. Slide 17: Energy: American Natural Gas (ANG) First Quarter Update

    Energy: American Natural Gas (ANG) First Quarter Update  1Q18 Net Loss: ($0.7)m versus ($0.7)m in 1Q17  1Q18 Adjusted EBITDA: $0.7m versus $1.2m in 1Q17  Delivered 2,974,000 Gasoline Gallon Equivalents (GGEs) in 1Q18 vs. 2,791,000 GGEs in 1Q17  Completed integration & upgrade fueling stations in

18. Slide 18: Telecommunications: PTGi-ICS First Quarter Update

    Telecommunications: PTGi-ICS First Quarter Update  Steady quarterly results again due to continued focus on customer relationship management, smaller global accounts, and improved operational efficiencies – 1Q18 Net Income: $1.1m versus $1.5m in 1Q17 – 1Q18 Adjusted EBITDA: $1.1m versus $1.7m in 1Q

19. Slide 19: Insurance: Continental Insurance Group First Quarter Update

    Insurance: Continental Insurance Group First Quarter Update  Continental Insurance Group serves as HC2’s insurance platform and through its wholly owned subsidiary, Continental LTC Inc. (“CLI”), offers a platform for run-off Long Term Care (“LTC”) books of business – 1Q18 Net Income: $1.2m versus N

20. Slide 20: Pansend Life Sciences Segment

    Pansend HC2’s Pansend Life Sciences Segment Is Focused on the Development of Innovative Healthcare Technologies and Products  80% equity ownership of company focused on immunotherapy; Oncolytic virotherapy for treatment of solid cancer tumors  Founded by Dr. Matthew Mulvey & Dr. Ian Mohr (who co-d

21. Slide 21: Pansend: BeneVir / Janssen Acquisition Summary

    Pansend: BeneVir / Janssen Acquisition Summary BeneVir:  BeneVir is a portfolio company of Pansend, our Life Sciences segment – Focused on the development of a patent-protected oncolytic virus, BV-2711, for the treatment of solid cancer tumors  Pansend is the owner of all of BeneVir's outstanding

22. Slide 22: HC2 Broadcasting Holdings Inc.

    HC2 Broadcasting Holdings Inc. Business Description* Broadcast Television Stations: Key Metrics**  HC2 Broadcasting Holdings Inc., a subsidiary of HC2 Holdings, has  Operational Stations: 150 strategically acquired broadcast assets across the United States – Full-Power Stations: 10  HC2’s broadca

23. Slide 23: Notable Financial and Other Updates

    Notable Financial and Other Updates  Collateral Coverage Ratio Exceeded 2.00x at Quarter End (1Q18)  $69.1 million in Consolidated Cash (excluding Insurance segment) at Quarter End (1Q18) – $32.4 million Corporate Cash at Quarter End  $5.8 million received in Dividends and Tax Share from DBM Glob

24. Slide 24: Reconciliations

    Reconciliations

25. Slide 25: Reconciliation of (Loss) to Adjusted EBITDA, Q1 2018

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2018 (in thousands) Three Months Ended March 31, 2018 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Broadcasting Eliminati

26. Slide 26: Reconciliation of (Loss) to Adjusted EBITDA, FY 2017

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2017 (in thousands) Year Ended December 31, 2017 Core Operating Subsidiaries Early Stage & Other Non- operating Total HC2 Life Other & Corporate Construction Marine Energy Telecom Sciences Broadcasting Elim

27. Slide 27: Reconciliation of (Loss) to Adjusted EBITDA, Q4 2017

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended December 31, 2017 (in thousands) Three Months Ended December 31, 2017 Core Operating Subsidiaries Early Stage & Other Non- operating Total HC2 Life Other & Corporate Construction Marine Energy Telecom Sciences Broadc

28. Slide 28: Reconciliation of (Loss) to Adjusted EBITDA, Q3 2017

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended September 30, 2017 (in thousands) Three Months Ended September 30, 2017 Core Operating Subsidiaries Early Stage & Other Non- operating Total HC2 Life Other & Corporate Construction Marine Energy Telecom Sciences Broa

29. Slide 29: Reconciliation of (Loss) to Adjusted EBITDA, Q2 2017

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2017 (in thousands) Three Months Ended June 30, 2017 Core Operating Subsidiaries Early Stage & Other Non- operating Total HC2 Life Other & Corporate Construction Marine Energy Telecom Sciences Broadcasting E

30. Slide 30: Reconciliation of (Loss) to Adjusted EBITDA, Q1 2017

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2017 (in thousands) Three Months Ended March 31, 2017 Core Operating Subsidiaries Early Stage & Other Non- operating Total HC2 Life Other & Corporate Construction Marine Energy Telecom Sciences Broadcasting

31. Slide 31: Reconciliation of (Loss) to Adjusted EBITDA, FY 2016

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2016 (in thousands) Year Ended December 31, 2016 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Elimination Corporate Net l

32. Slide 32: Reconciliation of (Loss) to Adjusted EBITDA, Q4 2016

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended December 31, 2016 (in thousands) Three Months Ended December 31, 2016 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Elimination Corp

33. Slide 33: Reconciliation of (Loss) to Adjusted EBITDA, Q3 2016

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended September 30, 2016 (in thousands) Three Months Ended September 30, 2016 Core Operating Subsidiaries Early Stage & Other Non- Marine Life Other & operating Total HC2 Construction Services Energy Telecom Sciences Elimi

34. Slide 34: Reconciliation of (Loss) to Adjusted EBITDA, Q2 2016

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2016 (in thousands) Three Months Ended June 30, 2016 Core Operating Subsidiaries Early Stage & Other Non- Marine Life Other and operating Total HC2 Construction Services Energy Telecom Sciences Eliminations

35. Slide 35: Reconciliation of (Loss) to Adjusted EBITDA, Q1 2016

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2016 (in thousands) Three Months Ended March 31, 2016 Core Operating Subsidiaries Early Stage & Other Non- Marine Life Other and operating Total HC2 Construction Services Energy Telecom Sciences Elimination

36. Slide 36: Reconciliation of (Loss) to Insurance Adjusted Operating Income

    Reconciliation of U.S. GAAP Net Income (Loss) to Insurance Adjusted Operating Income (in thousands) Adjusted Operating Income - Insurance ("Insurance AOI") Q1 2018 FY 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2016 Q4 2016 Net Income (loss) - Insurance segment $ 1,245 $ 7,066 $ 3,381 $ 4,282 $ 164 $ (7

37. Slide 37: HC2 Holdings, Inc. Investor Contact

    HC2 HOLDINGS, INC. A n d r e w G . B a c k m a n • i r @ h c 2 . c o m • 2 1 2 . 2 3 5 . 2 6 9 1 • 4 5 0 P a r k A v e n u e , 3 0 th F l o o r , N e w Y o r k , © HC2 Holdings, Inc. 2018 N Y 1 0 0 2 2 May 2018

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