Innovate Corp. · NYSE:VATE

Innovate — HC2 Holdings — Q4 2017 Earnings Presentation

29 slides from Innovate's earnings presentation, Mar 14, 2018

  1. Slide 1: Fourth Quarter & Year End 2017 Conference Call

    HC2 HOLDINGS, INC. © HC2 Holdings, Inc. 2018 Fourth Quarter & Year End 2017 Conference Call

  2. Slide 2: Special Note Regarding Forward-Looking Statements

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . 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-loo

  3. Slide 3: Non-GAAP Financial Measures

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . 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,

  4. Slide 4: Agenda

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

  5. Slide 5: Segment Financial Summary

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . ($m) FY 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2016 Adjusted EBITDA Core Operating Subsidiaries Construction $51.6 $15.1 $16.8 $11.1 $8.6 $59.9 Marine Services 44.0 15.3 8.8 3.6 16.3 41.2 Energy 2.9 0.4 0.3 1.0 1.2 2.5 Telecom 6.9 1.6 1.5 2.2 1.7 5.6 Total

  6. Slide 6: Fourth Quarter and Full Year 2017 Highlights

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Fourth Quarter and Full Year 2017 Highlights 5 Construction  $723 million record backlog provides significant visibility [~18 – 24 months]  $772 million backlog taking into consideration awarded, but not yet signed contracts  Continue to see opportunities

  7. Slide 7: HC2 Broadcasting Holdings Inc.

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . HC2 Broadcasting Holdings Inc. 6  Operational Stations: 135 – Full-Power Stations: 4 – Class A Stations: 34 – LPTV Stations: 97  Silent Licenses & Construction Permits: 476  U.S. Markets: >110  Total Footprint, Excluding Construction Permits, Covers Appr

  8. Slide 8: Looking Ahead - 2018 Focus and Priorities

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Looking Ahead - 2018 Focus and Priorities 7  Optimization of HC2 Capital Structure – Global refinancing of 11% Secured Notes to reduce cost of debt capital – Continue to reduce cumulative outstanding of preferred equity – Explore alternative financing struc

  9. Slide 9: Questions and Answers

    Questions and Answers

  10. Slide 10: Appendix

    Appendix:

  11. Slide 11: HC2's Diversified Portfolio

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . HC2’s Diversified Portfolio 10 Early Stage and Other Holdings Life Sciences: PANSEND  MediBeacon: Completed “Pilot Two” Clinical Study at Washington University in St. Louis (1Q17)  R2 Dermatology: Received FDA Approval for second generation R2 Dermal Cooli

  12. Slide 12: Consolidated Financial Summary

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Consolidated Financial Summary 11 ($m) Q4 2017 Q4 2016 FY 2017 FY 2016 Statement of Operations (Selected Financial Data) Total Net Revenue $458.5 $454.0 $1,634.1 $1,558.1 Total Operating Expenses $460.0 $449.0 $1,635.3 $1,559.5 Income Loss From Operations ($

  13. Slide 13: Construction: DBM Global Inc.

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Construction: DBM Global Inc. 12 4Q17 Net Income: $9.2m; FY17 Net Income: $23.6m versus $28.0m in FY16 4Q17 Adjusted EBITDA: $15.1m; FY17 Adjusted EBITDA: $51.6m versus $59.9m in FY16 Record backlog of $723m at end of 4Q17, an increase of over 44% vs. $503m

  14. Slide 14: Marine Services: Global Marine Group

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Marine Services: Global Marine Group 13  Joint Venture established in 1995 with China Telecom  China’s leading provider of submarine cable installation  Located in Shanghai and possesses a fleet of advanced purpose-built cable ships Currency Exchange: CNY

  15. Slide 15: Energy: American Natural Gas

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . 4Q17 Net Income: $1.5m; FY17 Net (Loss): ($0.5)m versus Net Income $0.01m in FY16 4Q17 Adjusted EBITDA: $0.4m; FY17 Adjusted EBITDA: $2.9m versus $2.5m in FY16 Signed first renewable natural gas supply agreement in 4Q17 Alternative Fuel Energy Tax Credit (“A

  16. Slide 16: Telecom: PTGi-ICS

    © 2 0 1 8 H C 2 H O L D I N G S , I N C .  Steady quarterly results again due to continued focus on higher margin wholesale traffic mix, smaller global accounts, and improved operational efficiencies – 4Q17 Net Income: $1.3m; FY17 Net Income: $6.2m versus $1.4m in FY16 – 4Q17 Adjusted EBITDA: $1.6m

  17. Slide 17: Insurance: Continental Insurance Group

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Insurance: Continental Insurance Group 16 Note: Reconciliation of Adjusted Operating Income to U.S. GAAP Net Income in appendix. All data as of December 31, 2017 unless otherwise noted  Continental Insurance Group serves as a platform for run-off Long Term

  18. Slide 18: Pansend

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Pansend 17 All data as of December 31, 2017 unless otherwise noted 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 viro

  19. Slide 19: Notable Financial and Other Updates

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Notable Financial and Other Updates 18  Collateral Coverage Ratio Exceeded 2.0x at Quarter End (4Q17)  $72.7 million in Consolidated Cash (excluding Insurance segment) – $29.4 million Corporate Cash  $11.5 million Received in Dividends and Tax Share from

  20. Slide 20: Reconciliations

    Reconciliations

  21. Slide 21: Reconciliation of Net Income (Loss) to Adjusted EBITDA - FY 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2017 20 (in thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (46,911)$ Less: Net Incom e

  22. Slide 22: Reconciliation of Net Income (Loss) to Adjusted EBITDA - FY 2016

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2016 21 (in thousands) Year Ended December 31, 2016 Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc.

  23. Slide 23: Reconciliation to Adjusted EBITDA - Three Months Ended Dec 31, 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended December 31, 2017 22 (in thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (8,537)$ Less: Net Incom

  24. Slide 24: Reconciliation to Adjusted EBITDA - Three Months Ended Sep 30, 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended September 30, 2017 23 (in thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (5,967)$ Less: Net Incom

  25. Slide 25: Reconciliation to Adjusted EBITDA - Three Months Ended Jun 30, 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2017 24 (in thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (17,911)$ Less: Net Incom e a

  26. Slide 26: Reconciliation to Adjusted EBITDA - Three Months Ended Mar 31, 2017

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2017 25 (in thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (14,496)$ Less: Net loss att

  27. Slide 27: Reconciliation to Adjusted EBITDA - Three Months Ended Dec 31, 2016

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended December 31, 2016 26 (in thousands) Construction Marine Energy Telecom Life Sciences Other & Elimination Net loss attributable to HC2 Holdings, Inc. (61,464)$ Less: Net loss

  28. Slide 28: Reconciliation to Insurance Adjusted Operating Income

    © 2 0 1 8 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Insurance Adjusted Operating Income 27 (in thousands) Adjusted Op rating Income - Insurance ("Insurance AOI") FY 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2016 Q4 2016 Net Income (loss) - Insurance segment 7,066

  29. Slide 29: HC2 Holdings, Inc. Investor Contact

    HC2 HOLDINGS, INC. © HC2 Holdings, Inc. 2018 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 t h F l o o r , N e w Y o r k , N Y 1 0 0 2 2 March 2018

HC2 Holdings — Q4 2017 Earnings Presentation on 6ix