FORM 10-Q
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
|
HC2 HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
|
Delaware
|
|
54-1708481
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
450 Park Avenue, 30th Floor, New York, NY
|
|
10022
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock, par value $0.001 per share
|
HCHC
|
New York Stock Exchange
|
Large accelerated filer
|
☐
|
Accelerated filer
|
x
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
|
$
|
439.9
|
|
|
$
|
455.0
|
|
|
$
|
844.8
|
|
|
$
|
870.5
|
|
Life, accident and health earned premiums, net
|
|
29.9
|
|
|
19.9
|
|
|
59.8
|
|
|
39.9
|
|
||||
Net investment income
|
|
50.3
|
|
|
19.4
|
|
|
101.4
|
|
|
37.1
|
|
||||
Net realized and unrealized gains (losses) on investments
|
|
(1.5
|
)
|
|
2.5
|
|
|
4.0
|
|
|
3.0
|
|
||||
Net revenue
|
|
518.6
|
|
|
496.8
|
|
|
1,010.0
|
|
|
950.5
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
|
381.2
|
|
|
400.6
|
|
|
738.9
|
|
|
776.3
|
|
||||
Policy benefits, changes in reserves, and commissions
|
|
48.0
|
|
|
35.4
|
|
|
100.7
|
|
|
67.7
|
|
||||
Selling, general and administrative
|
|
52.1
|
|
|
57.1
|
|
|
105.0
|
|
|
109.1
|
|
||||
Depreciation and amortization
|
|
7.6
|
|
|
9.0
|
|
|
14.5
|
|
|
18.7
|
|
||||
Other operating (income) expenses
|
|
(1.2
|
)
|
|
0.2
|
|
|
(1.6
|
)
|
|
(2.0
|
)
|
||||
Total operating expenses
|
|
487.7
|
|
|
502.3
|
|
|
957.5
|
|
|
969.8
|
|
||||
Income (loss) from operations
|
|
30.9
|
|
|
(5.5
|
)
|
|
52.5
|
|
|
(19.3
|
)
|
||||
Interest expense
|
|
(23.0
|
)
|
|
(17.2
|
)
|
|
(45.3
|
)
|
|
(36.5
|
)
|
||||
Gain on sale and deconsolidation of subsidiary
|
|
—
|
|
|
102.1
|
|
|
—
|
|
|
102.1
|
|
||||
Income from equity investees
|
|
6.1
|
|
|
10.7
|
|
|
1.2
|
|
|
5.5
|
|
||||
Gain on bargain purchase
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
||||
Other income (expense), net
|
|
(4.7
|
)
|
|
(0.9
|
)
|
|
(1.4
|
)
|
|
0.2
|
|
||||
Income from continuing operations
|
|
10.4
|
|
|
89.2
|
|
|
8.1
|
|
|
52.0
|
|
||||
Income tax expense
|
|
(1.2
|
)
|
|
(9.4
|
)
|
|
(5.2
|
)
|
|
(11.1
|
)
|
||||
Net income
|
|
9.2
|
|
|
79.8
|
|
|
2.9
|
|
|
40.9
|
|
||||
Less: Net (income) loss attributable to noncontrolling interest and redeemable noncontrolling interest
|
|
0.2
|
|
|
(24.4
|
)
|
|
3.7
|
|
|
(20.5
|
)
|
||||
Net income attributable to HC2 Holdings, Inc.
|
|
9.4
|
|
|
55.4
|
|
|
6.6
|
|
|
20.4
|
|
||||
Less: Preferred dividends, deemed dividends, and repurchase gains
|
|
0.4
|
|
|
0.7
|
|
|
(0.8
|
)
|
|
1.4
|
|
||||
Net income attributable to common stock and participating preferred stockholders
|
|
$
|
9.0
|
|
|
$
|
54.7
|
|
|
$
|
7.4
|
|
|
$
|
19.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income per common share
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.19
|
|
|
$
|
1.11
|
|
|
$
|
0.15
|
|
|
$
|
0.39
|
|
Diluted
|
|
$
|
0.12
|
|
|
$
|
1.08
|
|
|
$
|
0.08
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
45.6
|
|
|
44.2
|
|
|
45.2
|
|
|
44.1
|
|
||||
Diluted
|
|
58.1
|
|
|
45.5
|
|
|
59.9
|
|
|
45.3
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
|
$
|
9.2
|
|
|
$
|
79.8
|
|
|
$
|
2.9
|
|
|
$
|
40.9
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
(0.7
|
)
|
|
(6.2
|
)
|
|
0.2
|
|
|
(1.7
|
)
|
||||
Unrealized gain (loss) on available-for-sale securities
|
|
81.4
|
|
|
(22.9
|
)
|
|
229.6
|
|
|
(51.6
|
)
|
||||
Other comprehensive income (loss)
|
|
80.7
|
|
|
(29.1
|
)
|
|
229.8
|
|
|
(53.3
|
)
|
||||
Comprehensive income (loss)
|
|
89.9
|
|
|
50.7
|
|
|
232.7
|
|
|
(12.4
|
)
|
||||
Net (income) loss attributable to noncontrolling interest and redeemable noncontrolling interest
|
|
0.4
|
|
|
(24.4
|
)
|
|
3.6
|
|
|
(20.5
|
)
|
||||
Comprehensive income (loss) attributable to HC2 Holdings, Inc.
|
|
$
|
90.3
|
|
|
$
|
26.3
|
|
|
$
|
236.3
|
|
|
$
|
(32.9
|
)
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
||||
Investments:
|
|
|
|
|
||||
Fixed maturity securities, available-for-sale at fair value
|
|
$
|
3,812.6
|
|
|
$
|
3,391.6
|
|
Equity securities
|
|
143.2
|
|
|
200.5
|
|
||
Mortgage loans
|
|
151.8
|
|
|
137.6
|
|
||
Policy loans
|
|
19.4
|
|
|
19.8
|
|
||
Other invested assets
|
|
71.1
|
|
|
72.5
|
|
||
Total investments
|
|
4,198.1
|
|
|
3,822.0
|
|
||
Cash and cash equivalents
|
|
280.4
|
|
|
325.0
|
|
||
Accounts receivable, net
|
|
350.7
|
|
|
379.2
|
|
||
Recoverable from reinsurers
|
|
961.4
|
|
|
1,000.2
|
|
||
Deferred tax asset
|
|
2.3
|
|
|
2.1
|
|
||
Property, plant and equipment, net
|
|
416.4
|
|
|
376.3
|
|
||
Goodwill
|
|
178.4
|
|
|
171.7
|
|
||
Intangibles, net
|
|
224.9
|
|
|
219.2
|
|
||
Other assets
|
|
270.6
|
|
|
208.1
|
|
||
Total assets
|
|
$
|
6,883.2
|
|
|
$
|
6,503.8
|
|
|
|
|
|
|
||||
Liabilities, temporary equity and stockholders’ equity
|
|
|
|
|
||||
Life, accident and health reserves
|
|
$
|
4,536.6
|
|
|
$
|
4,562.1
|
|
Annuity reserves
|
|
238.8
|
|
|
245.2
|
|
||
Value of business acquired
|
|
231.9
|
|
|
244.6
|
|
||
Accounts payable and other current liabilities
|
|
338.5
|
|
|
344.9
|
|
||
Deferred tax liability
|
|
59.9
|
|
|
30.3
|
|
||
Debt obligations
|
|
828.2
|
|
|
743.9
|
|
||
Other liabilities
|
|
197.9
|
|
|
110.8
|
|
||
Total liabilities
|
|
6,431.8
|
|
|
6,281.8
|
|
||
Commitments and contingencies
|
|
|
|
|
||||
Temporary equity
|
|
|
|
|
||||
Preferred stock
|
|
10.3
|
|
|
20.3
|
|
||
Redeemable noncontrolling interest
|
|
10.3
|
|
|
8.0
|
|
||
Total temporary equity
|
|
20.6
|
|
|
28.3
|
|
||
Stockholders’ equity
|
|
|
|
|
||||
Common stock, $.001 par value
|
|
—
|
|
|
—
|
|
||
Shares authorized: 80,000,000 at June 30, 2019 and December 31, 2018;
|
|
|
|
|
|
|
||
Shares issued: 46,480,105 and 45,391,397 at June 30, 2019 and December 31, 2018;
|
|
|
|
|
|
|
||
Shares outstanding: 45,776,190 and 44,907,818 at June 30, 2019 and December 31, 2018, respectively
|
|
|
|
|
|
|
||
Additional paid-in capital
|
|
270.9
|
|
|
260.5
|
|
||
Treasury stock, at cost: 703,915 and 483,579 shares at June 30, 2019 and December 31, 2018, respectively
|
|
(3.2
|
)
|
|
(2.6
|
)
|
||
Accumulated deficit
|
|
(54.9
|
)
|
|
(57.2
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
117.1
|
|
|
(112.6
|
)
|
||
Total HC2 Holdings, Inc. stockholders’ equity
|
|
329.9
|
|
|
88.1
|
|
||
Noncontrolling interest
|
|
100.9
|
|
|
105.6
|
|
||
Total stockholders’ equity
|
|
430.8
|
|
|
193.7
|
|
||
Total liabilities, temporary equity and stockholders’ equity
|
|
$
|
6,883.2
|
|
|
$
|
6,503.8
|
|
|
|
Three Months Ended June 30, 2019
|
|||||||||||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Treasury
Stock |
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total HC2 Stockholders' Equity
|
|
Non-
controlling Interest |
Total Stockholders’ Equity
|
Temporary Equity
|
|||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019
|
|
45.6
|
|
|
$
|
—
|
|
|
$
|
264.4
|
|
|
$
|
(3.2
|
)
|
|
$
|
(64.3
|
)
|
|
$
|
36.2
|
|
|
$
|
233.1
|
|
|
$
|
99.1
|
|
|
$
|
332.2
|
|
|
$
|
17.6
|
|
Share-based compensation
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|||||||||
Preferred stock dividend
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|||||||||
Issuance of common stock
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Transactions with noncontrolling interests
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|
2.1
|
|
|
7.3
|
|
|
3.1
|
|
|||||||||
Other
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|||||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
9.4
|
|
|
(0.1
|
)
|
|
9.3
|
|
|
(0.1
|
)
|
|||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80.9
|
|
|
80.9
|
|
|
(0.2
|
)
|
|
80.7
|
|
|
—
|
|
|||||||||
Balance as of June 30, 2019
|
|
45.8
|
|
|
$
|
—
|
|
|
$
|
270.9
|
|
|
$
|
(3.2
|
)
|
|
$
|
(54.9
|
)
|
|
$
|
117.1
|
|
|
$
|
329.9
|
|
|
$
|
100.9
|
|
|
$
|
430.8
|
|
|
$
|
20.6
|
|
|
|
Six Months Ended June 30, 2019
|
|||||||||||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Treasury
Stock |
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total HC2 Stockholders' Equity
|
|
Non-
controlling Interest |
Total Stockholders’ Equity
|
Temporary Equity
|
|||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018
|
|
44.9
|
|
|
$
|
—
|
|
|
$
|
260.5
|
|
|
$
|
(2.6
|
)
|
|
$
|
(57.2
|
)
|
|
$
|
(112.6
|
)
|
|
$
|
88.1
|
|
|
$
|
105.6
|
|
|
$
|
193.7
|
|
|
$
|
28.3
|
|
Cumulative effect of accounting for leases
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
|
(4.3
|
)
|
|
(0.7
|
)
|
|
(5.0
|
)
|
|
(0.1
|
)
|
|||||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|||||||||
Fair value adjustment of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
(0.2
|
)
|
|||||||||
Taxes paid in lieu of shares issued for share-based compensation
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|||||||||
Preferred stock dividend
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|||||||||
Issuance of common stock
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Purchase of preferred stock by subsidiary
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|
(10.0
|
)
|
|||||||||
Transactions with noncontrolling interests
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
(0.9
|
)
|
|
3.8
|
|
|
3.1
|
|
|||||||||
Other
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|||||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.6
|
|
|
—
|
|
|
6.6
|
|
|
(3.2
|
)
|
|
3.4
|
|
|
(0.5
|
)
|
|||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229.7
|
|
|
229.7
|
|
|
0.1
|
|
|
229.8
|
|
|
—
|
|
|||||||||
Balance as of June 30, 2019
|
|
45.8
|
|
|
$
|
—
|
|
|
$
|
270.9
|
|
|
$
|
(3.2
|
)
|
|
$
|
(54.9
|
)
|
|
$
|
117.1
|
|
|
$
|
329.9
|
|
|
$
|
100.9
|
|
|
$
|
430.8
|
|
|
$
|
20.6
|
|
|
|
Three Months Ended June 30, 2018
|
|||||||||||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Treasury
Stock |
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total HC2 Stockholders' Equity
|
|
Non-
controlling Interest |
Total Stockholders’ Equity
|
Temporary Equity
|
|||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||
Balance as of March 31, 2018
|
|
44.5
|
|
|
$
|
—
|
|
|
$
|
253.1
|
|
|
$
|
(2.4
|
)
|
|
$
|
(252.2
|
)
|
|
$
|
15.8
|
|
|
$
|
14.3
|
|
|
$
|
112.0
|
|
|
$
|
126.3
|
|
|
$
|
29.5
|
|
Cumulative effect of accounting for revenue recognition
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|||||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|||||||||
Fair value adjustment of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
0.8
|
|
|||||||||
Exercise of stock options
|
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|||||||||
Preferred stock dividend
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|||||||||
Issuance of common stock
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Transactions with noncontrolling interests
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|
6.6
|
|
|
(27.7
|
)
|
|
(21.1
|
)
|
|
5.0
|
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.4
|
|
|
—
|
|
|
55.4
|
|
|
24.3
|
|
|
79.7
|
|
|
0.2
|
|
|||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28.8
|
)
|
|
(28.8
|
)
|
|
0.4
|
|
|
(28.4
|
)
|
|
(0.8
|
)
|
|||||||||
Balance as of June 30, 2018
|
|
44.7
|
|
|
$
|
—
|
|
|
$
|
260.0
|
|
|
$
|
(2.4
|
)
|
|
$
|
(197.1
|
)
|
|
$
|
(9.2
|
)
|
|
$
|
51.3
|
|
|
$
|
109.3
|
|
|
$
|
160.6
|
|
|
$
|
34.7
|
|
|
|
Six Months Ended June 30, 2018
|
|||||||||||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Treasury
Stock |
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total HC2 Stockholders' Equity
|
|
Non-
controlling Interest |
Total Stockholders’ Equity
|
Temporary Equity
|
|||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||
Balance as of December 31, 2017
|
|
44.2
|
|
|
$
|
—
|
|
|
$
|
254.7
|
|
|
$
|
(2.1
|
)
|
|
$
|
(221.2
|
)
|
|
$
|
41.7
|
|
|
$
|
73.1
|
|
|
$
|
115.0
|
|
|
$
|
188.1
|
|
|
$
|
27.9
|
|
Cumulative effect of accounting for revenue recognition
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
0.3
|
|
|
0.7
|
|
|
—
|
|
|||||||||
Cumulative effect of accounting for the recognition and measurement of financial assets and financial liabilities
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|
(1.7
|
)
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|||||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
6.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.6
|
|
|
—
|
|
|
6.6
|
|
|
—
|
|
|||||||||
Fair value adjustment of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(3.3
|
)
|
|
3.3
|
|
|||||||||
Exercise of stock options
|
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|||||||||
Taxes paid in lieu of shares issued for share-based compensation
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|||||||||
Preferred stock dividend
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|||||||||
Issuance of common stock
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Transactions with noncontrolling interests
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|
6.4
|
|
|
(27.7
|
)
|
|
(21.3
|
)
|
|
5.0
|
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.4
|
|
|
—
|
|
|
20.4
|
|
|
21.3
|
|
|
41.7
|
|
|
(0.7
|
)
|
|||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53.0
|
)
|
|
(53.0
|
)
|
|
0.4
|
|
|
(52.6
|
)
|
|
(0.8
|
)
|
|||||||||
Balance as of June 30, 2018
|
|
44.7
|
|
|
$
|
—
|
|
|
$
|
260.0
|
|
|
$
|
(2.4
|
)
|
|
$
|
(197.1
|
)
|
|
$
|
(9.2
|
)
|
|
$
|
51.3
|
|
|
$
|
109.3
|
|
|
$
|
160.6
|
|
|
$
|
34.7
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
2.9
|
|
|
$
|
40.9
|
|
Adjustments to reconcile net income to cash provided by (used in) operating activities
|
|
|
|
|
||||
Provision for doubtful accounts receivable
|
|
0.4
|
|
|
0.8
|
|
||
Share-based compensation expense
|
|
3.8
|
|
|
4.8
|
|
||
Depreciation and amortization
|
|
19.0
|
|
|
22.0
|
|
||
Amortization of deferred financing costs and debt discount
|
|
6.2
|
|
|
4.7
|
|
||
Amortization of (discount) premium on investments
|
|
3.9
|
|
|
2.4
|
|
||
Gain on embedded derivative
|
|
(5.6
|
)
|
|
—
|
|
||
Gain on sale or disposal of assets
|
|
(0.8
|
)
|
|
(2.4
|
)
|
||
Gain on sale or disposal of a subsidiary
|
|
—
|
|
|
(102.1
|
)
|
||
Income from equity investees
|
|
(1.2
|
)
|
|
(5.5
|
)
|
||
Net realized and unrealized gains on investments
|
|
(3.5
|
)
|
|
(3.0
|
)
|
||
Receipt of dividends from equity investees
|
|
7.6
|
|
|
3.1
|
|
||
Annuity benefits
|
|
2.9
|
|
|
4.2
|
|
||
Other operating activities
|
|
2.9
|
|
|
1.9
|
|
||
Changes in assets and liabilities, net of acquisitions
|
|
|
|
|
||||
Accounts receivable
|
|
41.5
|
|
|
(23.1
|
)
|
||
Recoverable from reinsurers
|
|
0.2
|
|
|
(4.9
|
)
|
||
Other assets
|
|
(5.1
|
)
|
|
(21.4
|
)
|
||
Life, accident and health reserves
|
|
12.9
|
|
|
34.1
|
|
||
Accounts payable and other current liabilities
|
|
(28.4
|
)
|
|
(9.7
|
)
|
||
Other liabilities
|
|
(22.8
|
)
|
|
12.0
|
|
||
Cash provided by (used in) operating activities
|
|
36.8
|
|
|
(41.2
|
)
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Purchase of property, plant and equipment
|
|
(19.2
|
)
|
|
(20.2
|
)
|
||
Disposal of property, plant and equipment
|
|
3.7
|
|
|
3.5
|
|
||
Purchase of investments
|
|
(575.3
|
)
|
|
(207.5
|
)
|
||
Sale of investments
|
|
449.3
|
|
|
155.5
|
|
||
Maturities and redemptions of investments
|
|
37.2
|
|
|
40.0
|
|
||
Cash received from dispositions, net
|
|
—
|
|
|
93.3
|
|
||
Cash paid on acquisitions
|
|
(53.5
|
)
|
|
(46.0
|
)
|
||
Other investing activities
|
|
3.2
|
|
|
(2.2
|
)
|
||
Cash (used in) provided by investing activities
|
|
(154.6
|
)
|
|
16.4
|
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Proceeds from debt obligations
|
|
84.9
|
|
|
180.3
|
|
||
Principal payments on debt obligations
|
|
(10.3
|
)
|
|
(110.7
|
)
|
||
Cash received by subsidiary to issue preferred stock
|
|
8.9
|
|
|
—
|
|
||
Cash paid by subsidiary to purchase HC2 preferred stock
|
|
(8.3
|
)
|
|
—
|
|
||
Annuity receipts
|
|
1.1
|
|
|
1.3
|
|
||
Annuity surrenders
|
|
(9.5
|
)
|
|
(11.2
|
)
|
||
Transactions with noncontrolling interests
|
|
5.5
|
|
|
(14.9
|
)
|
||
Payment of dividends
|
|
(1.7
|
)
|
|
(1.0
|
)
|
||
Other financing activities
|
|
(1.6
|
)
|
|
(0.7
|
)
|
||
Cash provided by financing activities
|
|
69.0
|
|
|
43.1
|
|
||
Effects of exchange rate changes on cash, cash equivalents and restricted cash
|
|
0.3
|
|
|
(0.3
|
)
|
||
Net change in cash, cash equivalents and restricted cash
|
|
(48.5
|
)
|
|
18.0
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
330.4
|
|
|
98.9
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
281.9
|
|
|
$
|
116.9
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
38.7
|
|
|
$
|
33.9
|
|
Cash paid for taxes (net of refunds)
|
|
$
|
3.7
|
|
|
$
|
11.5
|
|
Non-cash investing and financing activities:
|
|
|
|
|
||||
Property, plant and equipment included in accounts payable
|
|
$
|
6.3
|
|
|
$
|
1.2
|
|
Investments included in accounts payable
|
|
$
|
31.6
|
|
|
$
|
0.8
|
|
Investments included in accounts receivable
|
|
$
|
9.7
|
|
|
$
|
—
|
|
|
|
June 30, 2019
|
|
June 30, 2018
|
||||
Cash and cash equivalents, beginning of period
|
|
$
|
325.0
|
|
|
$
|
97.9
|
|
Restricted cash included in other assets
|
|
5.4
|
|
|
1.0
|
|
||
Total cash and cash equivalents and restricted cash
|
|
$
|
330.4
|
|
|
$
|
98.9
|
|
|
|
|
|
|
||||
Cash and cash equivalents, end of period
|
|
$
|
280.4
|
|
|
$
|
112.3
|
|
Restricted cash included in other assets
|
|
1.5
|
|
|
4.6
|
|
||
Total cash and cash equivalents and restricted cash
|
|
$
|
281.9
|
|
|
$
|
116.9
|
|
•
|
Cash flow assumptions must be reviewed at least annually and updated if necessary. The impact of these updates will be reported through net income. Current accounting policy requires the liability assumptions for long-duration contracts and limited payment contracts be locked in at contract inception, unless the contracts project a loss position which would allow the liability assumptions to be unlocked so that the loss could be recognized.
|
•
|
The rate used to discount the liability projections is to be based on an A-rated asset with observable market inputs and duration consistent with the duration of the liabilities. The discount rate is to be updated quarterly with the impact of the change in the discount rate recognized through other comprehensive income. Current accounting policy allows the use of an expected investment yield (which is not required to be observable in the market) to discount the liability projections.
|
•
|
Deferred acquisition costs for long-duration contracts are to be amortized in proportion to premiums, gross profits, or gross margins and those balances must be amortized on a constant-level basis over the expected life of the contract. Current accounting policy would amortize deferred acquisition costs based on revenue and profits. The Company does not have any deferred acquisition costs but VOBA amortization will follow this new guidance.
|
•
|
Market risk benefits are to be measured at fair value and presented separately in the statement of financial position. Under current accounting policy benefit features that will meet the definition of market risk benefits are accounted for as embedded derivatives or insurance liabilities via the benefit ratio model. The Company does not have any benefit features that will be categorized as market risk benefits.
|
•
|
Disaggregated rollforwards of beginning to ending balances of the liability for future policy benefits, policyholder account balances, VOBA, as well as information about significant inputs, judgments, assumptions, and methods used in measurement are required to be disclosed.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
(1)
|
|
|
|
|
|
|
|
|
||||||||
Construction
|
|
$
|
195.7
|
|
|
$
|
176.9
|
|
|
$
|
387.8
|
|
|
$
|
335.9
|
|
Marine Services
|
|
39.4
|
|
|
68.4
|
|
|
81.8
|
|
|
105.1
|
|
||||
Energy
|
|
5.5
|
|
|
7.1
|
|
|
10.6
|
|
|
11.6
|
|
||||
Telecommunications
|
|
189.3
|
|
|
190.5
|
|
|
344.8
|
|
|
392.8
|
|
||||
Broadcasting
|
|
10.0
|
|
|
11.1
|
|
|
19.8
|
|
|
21.7
|
|
||||
Other
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
3.4
|
|
||||
Total revenue
|
|
$
|
439.9
|
|
|
$
|
455.0
|
|
|
$
|
844.8
|
|
|
$
|
870.5
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Accounts receivables with customers
|
|
|
|
|
||||
Construction
|
|
$
|
190.1
|
|
|
$
|
196.6
|
|
Marine Services
|
|
37.7
|
|
|
48.3
|
|
||
Energy
|
|
5.7
|
|
|
3.3
|
|
||
Telecommunications
|
|
90.5
|
|
|
117.6
|
|
||
Broadcasting
|
|
8.7
|
|
|
9.2
|
|
||
Total accounts receivables with customers
|
|
$
|
332.7
|
|
|
$
|
375.0
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Commercial
|
|
$
|
52.9
|
|
|
$
|
67.9
|
|
|
$
|
112.3
|
|
|
$
|
137.5
|
|
Convention
|
|
28.4
|
|
|
22.2
|
|
|
57.1
|
|
|
53.8
|
|
||||
Healthcare
|
|
13.6
|
|
|
29.2
|
|
|
22.4
|
|
|
57.1
|
|
||||
Industrial
|
|
62.7
|
|
|
28.3
|
|
|
116.5
|
|
|
36.1
|
|
||||
Transportation
|
|
16.3
|
|
|
8.2
|
|
|
34.4
|
|
|
13.4
|
|
||||
Other
|
|
21.6
|
|
|
21.1
|
|
|
44.9
|
|
|
38.0
|
|
||||
Total revenue from contracts with customers
|
|
195.5
|
|
|
176.9
|
|
|
387.6
|
|
|
335.9
|
|
||||
Other revenue
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Total Construction segment revenue
|
|
$
|
195.7
|
|
|
$
|
176.9
|
|
|
$
|
387.8
|
|
|
$
|
335.9
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Contract assets
|
|
$
|
59.7
|
|
|
$
|
69.0
|
|
Contract liabilities
|
|
$
|
(49.6
|
)
|
|
$
|
(62.0
|
)
|
|
|
Within one year
|
|
Within five years
|
|
Total
|
||||||
Commercial
|
|
$
|
96.7
|
|
|
$
|
25.1
|
|
|
$
|
121.8
|
|
Convention
|
|
26.4
|
|
|
—
|
|
|
26.4
|
|
|||
Healthcare
|
|
35.8
|
|
|
—
|
|
|
35.8
|
|
|||
Industrial
|
|
127.0
|
|
|
19.9
|
|
|
146.9
|
|
|||
Transportation
|
|
90.1
|
|
|
1.2
|
|
|
91.3
|
|
|||
Other
|
|
46.1
|
|
|
0.2
|
|
|
46.3
|
|
|||
Remaining unsatisfied performance obligations
|
$
|
422.1
|
|
|
$
|
46.4
|
|
|
$
|
468.5
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Telecommunication - Maintenance
|
|
$
|
20.0
|
|
|
$
|
22.1
|
|
|
$
|
41.0
|
|
|
$
|
43.9
|
|
Telecommunication - Installation
|
|
10.0
|
|
|
16.5
|
|
|
15.4
|
|
|
23.8
|
|
||||
Power - Operations, Maintenance & Construction Support
|
|
5.1
|
|
|
11.9
|
|
|
9.3
|
|
|
16.6
|
|
||||
Power - Cable Installation & Repair
|
|
4.3
|
|
|
17.9
|
|
|
16.1
|
|
|
20.8
|
|
||||
Total revenue from contracts with customers
|
|
39.4
|
|
|
68.4
|
|
|
81.8
|
|
|
105.1
|
|
||||
Other revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Marine Services segment revenue
|
|
$
|
39.4
|
|
|
$
|
68.4
|
|
|
$
|
81.8
|
|
|
$
|
105.1
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Contract assets
|
|
$
|
11.5
|
|
|
$
|
5.2
|
|
Contract liabilities
|
|
$
|
(15.8
|
)
|
|
$
|
(1.0
|
)
|
|
|
Within one year
|
|
Within five years
|
|
Thereafter
|
|
Total
|
||||||||
Telecommunication - Maintenance
|
|
$
|
37.2
|
|
|
$
|
217.4
|
|
|
$
|
59.9
|
|
|
$
|
314.5
|
|
Telecommunication - Installation
|
|
15.3
|
|
|
—
|
|
|
—
|
|
|
15.3
|
|
||||
Power - Operations, Maintenance & Construction Support
|
|
5.9
|
|
|
18.9
|
|
|
—
|
|
|
24.8
|
|
||||
Power - Cable Installation & Repair
|
|
3.0
|
|
|
48.6
|
|
|
—
|
|
|
51.6
|
|
||||
Remaining unsatisfied performance obligations
|
$
|
61.4
|
|
|
$
|
284.9
|
|
|
$
|
59.9
|
|
|
$
|
406.2
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Volume-related
|
|
$
|
5.3
|
|
|
$
|
4.0
|
|
|
$
|
10.1
|
|
|
$
|
8.1
|
|
Maintenance services
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Total revenue from contracts with customers
|
|
5.3
|
|
|
4.0
|
|
|
10.1
|
|
|
8.2
|
|
||||
RNG incentives
|
|
0.1
|
|
|
0.4
|
|
|
0.4
|
|
|
0.7
|
|
||||
Alternative fuel tax credit
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
||||
Other revenue
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
||||
Total Energy segment revenue
|
|
$
|
5.5
|
|
|
$
|
7.1
|
|
|
$
|
10.6
|
|
|
$
|
11.6
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Termination of long distance minutes
|
|
$
|
189.3
|
|
|
$
|
190.5
|
|
|
$
|
344.8
|
|
|
$
|
392.8
|
|
Total revenue from contracts with customers
|
|
189.3
|
|
|
190.5
|
|
|
344.8
|
|
|
392.8
|
|
||||
Other revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Telecommunications segment revenue
|
|
$
|
189.3
|
|
|
$
|
190.5
|
|
|
$
|
344.8
|
|
|
$
|
392.8
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Network advertising
|
|
$
|
5.4
|
|
|
$
|
7.0
|
|
|
$
|
10.8
|
|
|
$
|
13.8
|
|
Broadcast station
|
|
2.9
|
|
|
2.8
|
|
|
5.6
|
|
|
5.5
|
|
||||
Network distribution
|
|
1.2
|
|
|
0.9
|
|
|
2.7
|
|
|
1.8
|
|
||||
Other
|
|
0.5
|
|
|
0.4
|
|
|
0.7
|
|
|
0.6
|
|
||||
Total revenue from contracts with customers
|
|
10.0
|
|
|
11.1
|
|
|
19.8
|
|
|
21.7
|
|
||||
Other revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Broadcasting segment revenue
|
|
$
|
10.0
|
|
|
$
|
11.1
|
|
|
$
|
19.8
|
|
|
$
|
21.7
|
|
Other invested assets
|
|
$
|
0.9
|
|
Cash and cash equivalents
|
|
8.6
|
|
|
Accounts receivable
|
|
28.8
|
|
|
Property, plant and equipment
|
|
15.4
|
|
|
Goodwill
|
|
50.7
|
|
|
Intangibles
|
|
44.1
|
|
|
Other assets
|
|
18.9
|
|
|
Total assets acquired
|
|
167.4
|
|
|
Accounts payable and other current liabilities
|
|
(23.7
|
)
|
|
Other liabilities
|
|
(3.9
|
)
|
|
Total liabilities assumed
|
|
(27.6
|
)
|
|
Total net assets acquired
|
|
$
|
139.8
|
|
Fixed maturity securities, available-for-sale at fair value
|
|
$
|
1,575.4
|
|
Equity securities
|
|
0.3
|
|
|
Mortgage loans
|
|
0.9
|
|
|
Policy loans
|
|
2.9
|
|
|
Cash and cash equivalents
|
|
806.6
|
|
|
Recoverable from reinsurers
|
|
902.5
|
|
|
Other assets
|
|
28.2
|
|
|
Total assets acquired
|
|
3,316.8
|
|
|
Life, accident and health reserves
|
|
(2,931.3
|
)
|
|
Annuity reserves
|
|
(11.3
|
)
|
|
Value of business acquired
|
|
(214.4
|
)
|
|
Accounts payable and other current liabilities
|
|
(6.5
|
)
|
|
Deferred tax liability
|
|
(25.3
|
)
|
|
Other liabilities
|
|
(11.5
|
)
|
|
Total liabilities assumed
|
|
(3,200.3
|
)
|
|
Total net assets acquired
|
|
116.5
|
|
|
Total fair value of consideration
|
|
—
|
|
|
Gain on bargain purchase
|
|
$
|
116.5
|
|
•
|
The Unified Loss Rules tax attribute reduction to tax value of assets and the seller tax adjustments to tax value of liabilities contribute significantly to the bargain purchase price.
|
•
|
The reduction in the federal income tax rate, from 35% at the time the seller contribution was established to 21% effective January 1, 2018, effectively generates the remaining balance for the bargain purchase price.
|
•
|
Changes in fair value of acquired assets and assumed liabilities between the date the deal was signed and the closing date was driven by the time it took to obtain regulatory approvals, amongst other closing conditions.
|
|
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
||||
Net revenue
|
|
$
|
571.8
|
|
|
$
|
1,072.4
|
|
Net income (loss) from operations
|
|
$
|
38.9
|
|
|
$
|
52.4
|
|
Net income (loss) attributable to HC2 Holdings, Inc.
|
|
$
|
89.6
|
|
|
$
|
75.7
|
|
June 30, 2019
|
|
Amortized
Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair
Value
|
||||||||
U.S. Government and government agencies
|
|
$
|
17.5
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
18.5
|
|
States, municipalities and political subdivisions
|
|
411.4
|
|
|
31.1
|
|
|
—
|
|
|
442.5
|
|
||||
Residential mortgage-backed securities
|
|
75.9
|
|
|
4.8
|
|
|
(0.6
|
)
|
|
80.1
|
|
||||
Commercial mortgage-backed securities
|
|
104.0
|
|
|
2.4
|
|
|
—
|
|
|
106.4
|
|
||||
Asset-backed securities
|
|
537.2
|
|
|
1.6
|
|
|
(12.6
|
)
|
|
526.2
|
|
||||
Corporate and other
|
|
2,491.5
|
|
|
177.0
|
|
|
(29.6
|
)
|
|
2,638.9
|
|
||||
Total fixed maturity securities
|
|
$
|
3,637.5
|
|
|
$
|
217.9
|
|
|
$
|
(42.8
|
)
|
|
$
|
3,812.6
|
|
December 31, 2018
|
|
Amortized
Cost |
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair
Value
|
||||||||
U.S. Government and government agencies
|
|
$
|
24.7
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
25.4
|
|
States, municipalities and political subdivisions
|
|
413.7
|
|
|
9.6
|
|
|
(1.4
|
)
|
|
421.9
|
|
||||
Residential mortgage-backed securities
|
|
92.6
|
|
|
3.1
|
|
|
(1.3
|
)
|
|
94.4
|
|
||||
Commercial mortgage-backed securities
|
|
94.7
|
|
|
0.3
|
|
|
(1.1
|
)
|
|
93.9
|
|
||||
Asset-backed securities
|
|
540.8
|
|
|
0.8
|
|
|
(30.1
|
)
|
|
511.5
|
|
||||
Corporate and other
|
|
2,311.0
|
|
|
17.0
|
|
|
(83.5
|
)
|
|
2,244.5
|
|
||||
Total fixed maturity securities
|
|
$
|
3,477.5
|
|
|
$
|
31.5
|
|
|
$
|
(117.4
|
)
|
|
$
|
3,391.6
|
|
|
|
Amortized
Cost |
|
Fair
Value
|
||||
Corporate, Municipal, U.S. Government and Other securities
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
28.9
|
|
|
$
|
29.6
|
|
Due after one year through five years
|
|
233.6
|
|
|
238.8
|
|
||
Due after five years through ten years
|
|
337.8
|
|
|
354.5
|
|
||
Due after ten years
|
|
2,320.1
|
|
|
2,477.0
|
|
||
Subtotal
|
|
2,920.4
|
|
|
3,099.9
|
|
||
Mortgage-backed securities
|
|
179.9
|
|
|
186.5
|
|
||
Asset-backed securities
|
|
537.2
|
|
|
526.2
|
|
||
Total
|
|
$
|
3,637.5
|
|
|
$
|
3,812.6
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||
|
|
Amortized Cost
|
|
Fair
Value
|
|
% of
Total
|
|
Amortized Cost
|
|
Fair
Value |
|
% of
Total |
||||||||||
Finance, insurance, and real estate
|
|
$
|
550.1
|
|
|
$
|
569.3
|
|
|
21.6
|
%
|
|
$
|
469.0
|
|
|
$
|
452.9
|
|
|
20.2
|
%
|
Transportation, communication and other services
|
|
768.7
|
|
|
808.4
|
|
|
30.6
|
%
|
|
758.6
|
|
|
734.0
|
|
|
32.7
|
%
|
||||
Manufacturing
|
|
731.0
|
|
|
788.2
|
|
|
29.9
|
%
|
|
712.7
|
|
|
693.5
|
|
|
30.9
|
%
|
||||
Other
|
|
441.7
|
|
|
473.0
|
|
|
17.9
|
%
|
|
370.7
|
|
|
364.1
|
|
|
16.2
|
%
|
||||
Total
|
|
$
|
2,491.5
|
|
|
$
|
2,638.9
|
|
|
100.0
|
%
|
|
$
|
2,311.0
|
|
|
$
|
2,244.5
|
|
|
100.0
|
%
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
|
|
Unrealized Losses
|
|
% of
Total
|
|
Unrealized Losses
|
|
% of
Total |
||||||
Less than 20%
|
|
$
|
(42.5
|
)
|
|
99.3
|
%
|
|
$
|
(116.0
|
)
|
|
98.8
|
%
|
20% or more for less than six months
|
|
(0.3
|
)
|
|
0.7
|
%
|
|
(0.8
|
)
|
|
0.7
|
%
|
||
20% or more for six months or greater
|
|
—
|
|
|
—
|
%
|
|
(0.6
|
)
|
|
0.5
|
%
|
||
Total
|
|
$
|
(42.8
|
)
|
|
100.0
|
%
|
|
$
|
(117.4
|
)
|
|
100.0
|
%
|
June 30, 2019
|
|
Less than 12 months
|
|
12 months or greater
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized Losses
|
|
Fair
Value |
|
Unrealized Losses
|
|
Fair
Value |
|
Unrealized Losses
|
|||||||||||||
U.S. Government and government agencies
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
|
5.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
|
—
|
|
||||||
Residential mortgage-backed securities
|
|
11.6
|
|
|
(0.5
|
)
|
|
2.6
|
|
|
(0.1
|
)
|
|
14.2
|
|
|
(0.6
|
)
|
||||||
Commercial mortgage-backed securities
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
||||||
Asset-backed securities
|
|
362.3
|
|
|
(7.6
|
)
|
|
61.0
|
|
|
(5.0
|
)
|
|
423.3
|
|
|
(12.6
|
)
|
||||||
Corporate and other
|
|
275.7
|
|
|
(25.8
|
)
|
|
39.6
|
|
|
(3.8
|
)
|
|
315.3
|
|
|
(29.6
|
)
|
||||||
Total fixed maturity securities
|
|
$
|
656.3
|
|
|
$
|
(33.9
|
)
|
|
$
|
103.2
|
|
|
$
|
(8.9
|
)
|
|
$
|
759.5
|
|
|
$
|
(42.8
|
)
|
December 31, 2018
|
|
Less than 12 months
|
|
12 months of greater
|
|
Total
|
||||||||||||||||||
|
Fair
Value |
|
Unrealized Losses
|
|
Fair
Value |
|
Unrealized Losses
|
|
Fair
Value |
|
Unrealized Losses
|
|||||||||||||
U.S. Government and government agencies
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
—
|
|
|
$
|
8.3
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
|
117.2
|
|
|
(1.3
|
)
|
|
1.9
|
|
|
(0.1
|
)
|
|
119.1
|
|
|
(1.4
|
)
|
||||||
Residential mortgage-backed securities
|
|
22.4
|
|
|
(1.2
|
)
|
|
5.7
|
|
|
(0.1
|
)
|
|
28.1
|
|
|
(1.3
|
)
|
||||||
Commercial mortgage-backed securities
|
|
57.8
|
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
57.8
|
|
|
(1.1
|
)
|
||||||
Asset-backed securities
|
|
466.0
|
|
|
(29.6
|
)
|
|
5.9
|
|
|
(0.5
|
)
|
|
471.9
|
|
|
(30.1
|
)
|
||||||
Corporate and other
|
|
1,418.2
|
|
|
(71.9
|
)
|
|
254.6
|
|
|
(11.6
|
)
|
|
1,672.8
|
|
|
(83.5
|
)
|
||||||
Total fixed maturity securities
|
|
$
|
2,086.6
|
|
|
$
|
(105.1
|
)
|
|
$
|
271.4
|
|
|
$
|
(12.3
|
)
|
|
$
|
2,358.0
|
|
|
$
|
(117.4
|
)
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Common stocks
|
|
$
|
22.8
|
|
|
$
|
15.0
|
|
Perpetual preferred stocks
|
|
120.4
|
|
|
185.5
|
|
||
Total equity securities
|
|
$
|
143.2
|
|
|
$
|
200.5
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Measurement Alternative
|
|
Equity
Method |
|
Measurement Alternative
|
|
Equity
Method
|
||||||||
Common Equity
|
|
$
|
—
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
Preferred Equity
|
|
—
|
|
|
8.0
|
|
|
1.6
|
|
|
9.6
|
|
||||
Other
|
|
—
|
|
|
60.8
|
|
|
—
|
|
|
59.2
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
71.1
|
|
|
$
|
1.6
|
|
|
$
|
70.9
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Fixed maturity securities, available-for-sale at fair value
|
|
$
|
43.7
|
|
|
$
|
16.2
|
|
|
$
|
87.3
|
|
|
$
|
31.9
|
|
Equity securities
|
|
2.1
|
|
|
0.7
|
|
|
4.6
|
|
|
1.3
|
|
||||
Mortgage loans
|
|
3.1
|
|
|
1.6
|
|
|
6.8
|
|
|
2.8
|
|
||||
Policy loans
|
|
0.2
|
|
|
0.3
|
|
|
0.6
|
|
|
0.6
|
|
||||
Other invested assets
|
|
1.4
|
|
|
0.6
|
|
|
2.6
|
|
|
0.6
|
|
||||
Gross investment income
|
|
50.5
|
|
|
19.4
|
|
|
101.9
|
|
|
37.2
|
|
||||
External investment expense
|
|
(0.2
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
(0.1
|
)
|
||||
Net investment income
|
|
$
|
50.3
|
|
|
$
|
19.4
|
|
|
$
|
101.4
|
|
|
$
|
37.1
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Realized gains on fixed maturity securities
|
|
$
|
4.2
|
|
|
$
|
2.4
|
|
|
$
|
5.1
|
|
|
$
|
3.7
|
|
Realized losses on fixed maturity securities
|
|
(3.3
|
)
|
|
(0.6
|
)
|
|
(5.1
|
)
|
|
(1.3
|
)
|
||||
Realized gains on equity securities
|
|
0.3
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
||||
Realized losses on equity securities
|
|
(0.2
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
||||
Net unrealized gains (losses) on equity securities
|
|
(1.6
|
)
|
|
0.5
|
|
|
5.8
|
|
|
(0.2
|
)
|
||||
Net unrealized gains (losses) on derivative instruments
|
|
(0.9
|
)
|
|
0.2
|
|
|
(1.1
|
)
|
|
0.8
|
|
||||
Net realized and unrealized gains (losses)
|
|
$
|
(1.5
|
)
|
|
$
|
2.5
|
|
|
$
|
4.0
|
|
|
$
|
3.0
|
|
June 30, 2019
|
|
|
|
Fair Value Measurement Using:
|
||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government and government agencies
|
|
$
|
18.5
|
|
|
$
|
4.1
|
|
|
$
|
14.4
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
|
442.5
|
|
|
—
|
|
|
438.8
|
|
|
3.7
|
|
||||
Residential mortgage-backed securities
|
|
80.1
|
|
|
—
|
|
|
67.6
|
|
|
12.5
|
|
||||
Commercial mortgage-backed securities
|
|
106.4
|
|
|
—
|
|
|
40.0
|
|
|
66.4
|
|
||||
Asset-backed securities
|
|
526.2
|
|
|
—
|
|
|
113.6
|
|
|
412.6
|
|
||||
Corporate and other
|
|
2,638.9
|
|
|
17.3
|
|
|
2,463.5
|
|
|
158.1
|
|
||||
Total fixed maturity securities
|
|
3,812.6
|
|
|
21.4
|
|
|
3,137.9
|
|
|
653.3
|
|
||||
Equity securities
|
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
22.8
|
|
|
17.9
|
|
|
—
|
|
|
4.9
|
|
||||
Perpetual preferred stocks
|
|
120.4
|
|
|
7.4
|
|
|
55.9
|
|
|
57.1
|
|
||||
Total equity securities
|
|
143.2
|
|
|
25.3
|
|
|
55.9
|
|
|
62.0
|
|
||||
Total assets accounted for at fair value
|
|
$
|
3,955.8
|
|
|
$
|
46.7
|
|
|
$
|
3,193.8
|
|
|
$
|
715.3
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Embedded derivative
|
|
$
|
2.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.9
|
|
Other
|
|
5.4
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
||||
Total liabilities accounted for at fair value
|
|
$
|
8.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.3
|
|
December 31, 2018
|
|
|
|
Fair Value Measurement Using:
|
||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government and government agencies
|
|
$
|
25.4
|
|
|
$
|
6.1
|
|
|
$
|
19.3
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions
|
|
421.9
|
|
|
—
|
|
|
421.9
|
|
|
—
|
|
||||
Residential mortgage-backed securities
|
|
94.4
|
|
|
—
|
|
|
75.4
|
|
|
19.0
|
|
||||
Commercial mortgage-backed securities
|
|
93.9
|
|
|
—
|
|
|
35.7
|
|
|
58.2
|
|
||||
Asset-backed securities
|
|
511.5
|
|
|
—
|
|
|
33.3
|
|
|
478.2
|
|
||||
Corporate and other
|
|
2,244.5
|
|
|
6.6
|
|
|
2,152.9
|
|
|
85.0
|
|
||||
Total fixed maturity securities
|
|
3,391.6
|
|
|
12.7
|
|
|
2,738.5
|
|
|
640.4
|
|
||||
Equity securities
|
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
|
15.0
|
|
|
9.1
|
|
|
—
|
|
|
5.9
|
|
||||
Perpetual preferred stocks
|
|
185.5
|
|
|
7.2
|
|
|
123.0
|
|
|
55.3
|
|
||||
Total equity securities
|
|
200.5
|
|
|
16.3
|
|
|
123.0
|
|
|
61.2
|
|
||||
Total assets accounted for at fair value
|
|
$
|
3,592.1
|
|
|
$
|
29.0
|
|
|
$
|
2,861.5
|
|
|
$
|
701.6
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Embedded derivative
|
|
$
|
8.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.4
|
|
Other
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||
Total liabilities accounted for at fair value
|
|
$
|
11.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.9
|
|
|
|
|
Total realized/unrealized gains (losses) included in
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Balance at March 31, 2019
|
Net earnings (loss)
|
Other comp. income (loss)
|
Purchases and issuances
|
Sales and settlements
|
Transfer to Level 3
|
|
Transfer out of Level 3
|
|
Balance at June 30, 2019
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
States, municipalities and political subdivisions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.5
|
)
|
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Residential mortgage-backed securities
|
|
13.1
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
12.5
|
|
||||||||
Commercial mortgage-backed securities
|
|
61.8
|
|
|
—
|
|
|
0.6
|
|
|
5.1
|
|
|
(0.1
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
66.4
|
|
||||||||
Asset-backed securities
|
|
472.1
|
|
|
(1.6
|
)
|
|
4.7
|
|
|
39.9
|
|
|
(102.5
|
)
|
|
—
|
|
|
—
|
|
|
412.6
|
|
||||||||
Corporate and other
|
|
198.5
|
|
|
(0.1
|
)
|
|
(6.0
|
)
|
|
15.8
|
|
|
(12.9
|
)
|
|
—
|
|
|
(37.2
|
)
|
|
158.1
|
|
||||||||
Total fixed maturity securities
|
|
745.5
|
|
|
(1.7
|
)
|
|
(0.5
|
)
|
|
60.8
|
|
|
(116.5
|
)
|
|
4.2
|
|
|
(38.5
|
)
|
|
653.3
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stocks
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
4.9
|
|
||||||||
Perpetual preferred stocks
|
|
55.1
|
|
|
(3.4
|
)
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
3.0
|
|
|
(0.1
|
)
|
|
57.1
|
|
||||||||
Total equity securities
|
|
61.2
|
|
|
(3.4
|
)
|
|
—
|
|
|
2.5
|
|
|
(1.0
|
)
|
|
3.0
|
|
|
(0.3
|
)
|
|
62.0
|
|
||||||||
Total financial assets
|
|
$
|
806.7
|
|
|
$
|
(5.1
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
63.3
|
|
|
$
|
(117.5
|
)
|
|
$
|
7.2
|
|
|
$
|
(38.8
|
)
|
|
$
|
715.3
|
|
|
|
|
|
Total realized/unrealized (gains) losses included in
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Balance at March 31, 2019
|
Net (earnings) loss
|
Other comp. (income) loss
|
Purchases and issuances
|
Sales and settlements
|
|
Transfer to Level 3
|
|
Transfer out of Level 3
|
|
Balance at June 30, 2019
|
|||||||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded derivative
|
|
$
|
6.1
|
|
|
$
|
(3.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.9
|
|
Other
|
|
2.7
|
|
|
(0.3
|
)
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
||||||||
Total financial liabilities
|
|
$
|
8.8
|
|
|
$
|
(3.5
|
)
|
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.3
|
|
|
|
|
Total realized/unrealized gains (losses) included in
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Balance at December 31, 2018
|
Net earnings (loss)
|
Other comp. income (loss)
|
Purchases and issuances
|
Sales and settlements
|
Transfer to Level 3
|
|
Transfer out of Level 3
|
|
Balance at June 30, 2019
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
States, municipalities and political subdivisions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.5
|
)
|
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Residential mortgage-backed securities
|
|
19.0
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(6.0
|
)
|
|
12.5
|
|
||||||||
Commercial mortgage-backed securities
|
|
58.2
|
|
|
—
|
|
|
2.1
|
|
|
7.5
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.9
|
)
|
|
66.4
|
|
||||||||
Asset-backed securities
|
|
478.2
|
|
|
(1.6
|
)
|
|
18.0
|
|
|
88.5
|
|
|
(176.1
|
)
|
|
5.6
|
|
|
—
|
|
|
412.6
|
|
||||||||
Corporate and other
|
|
85.0
|
|
|
(0.1
|
)
|
|
2.3
|
|
|
20.4
|
|
|
(17.5
|
)
|
|
105.0
|
|
|
(37.0
|
)
|
|
158.1
|
|
||||||||
Total fixed maturity securities
|
|
640.4
|
|
|
(1.7
|
)
|
|
22.7
|
|
|
116.4
|
|
|
(195.4
|
)
|
|
114.8
|
|
|
(43.9
|
)
|
|
653.3
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stocks
|
|
5.9
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
4.9
|
|
||||||||
Perpetual preferred stocks
|
|
55.3
|
|
|
(3.7
|
)
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
57.1
|
|
||||||||
Total equity securities
|
|
61.2
|
|
|
(3.5
|
)
|
|
—
|
|
|
2.5
|
|
|
(1.0
|
)
|
|
3.0
|
|
|
(0.2
|
)
|
|
62.0
|
|
||||||||
Total financial assets
|
|
$
|
701.6
|
|
|
$
|
(5.2
|
)
|
|
$
|
22.7
|
|
|
$
|
118.9
|
|
|
$
|
(196.4
|
)
|
|
$
|
117.8
|
|
|
$
|
(44.1
|
)
|
|
$
|
715.3
|
|
|
|
|
|
Total realized/unrealized (gains) losses included in
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Balance at December 31, 2018
|
Net (earnings) loss
|
Other comp. (income) loss
|
Purchases and issuances
|
Sales and settlements
|
|
Transfer to Level 3
|
|
Transfer out of Level 3
|
|
Balance at June 30, 2019
|
|||||||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded derivative
|
|
$
|
8.4
|
|
|
$
|
(5.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.9
|
|
Other
|
|
3.5
|
|
|
(1.1
|
)
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
||||||||
Total financial liabilities
|
|
$
|
11.9
|
|
|
$
|
(6.6
|
)
|
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.3
|
|
|
|
|
|
Total realized/unrealized gains (losses) included in
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Balance at March 31, 2018
|
Net earnings (loss)
|
Other comp. income (loss)
|
Purchases and issuances
|
Sales and settlements
|
Transfer to Level 3
|
Transfer out of Level 3
|
Balance at June 30, 2018
|
||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
States, municipalities and political subdivisions
|
|
$
|
6.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6.0
|
)
|
|
$
|
0.4
|
|
Residential mortgage-backed securities
|
|
7.2
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
(0.8
|
)
|
|
5.6
|
|
|
—
|
|
|
12.3
|
|
||||||||
Commercial mortgage-backed securities
|
|
17.8
|
|
|
—
|
|
|
(0.2
|
)
|
|
4.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.1
|
|
||||||||
Asset-backed securities
|
|
137.9
|
|
|
0.5
|
|
|
(1.8
|
)
|
|
18.5
|
|
|
(19.4
|
)
|
|
—
|
|
|
(2.9
|
)
|
|
132.8
|
|
||||||||
Corporate and other
|
|
37.6
|
|
|
—
|
|
|
(0.8
|
)
|
|
23.9
|
|
|
(2.6
|
)
|
|
9.1
|
|
|
—
|
|
|
67.2
|
|
||||||||
Total fixed maturity securities
|
|
206.9
|
|
|
0.5
|
|
|
(2.5
|
)
|
|
46.9
|
|
|
(22.8
|
)
|
|
14.7
|
|
|
(8.9
|
)
|
|
234.8
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stocks
|
|
0.6
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||||||
Perpetual preferred stocks
|
|
23.9
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.3
|
|
||||||||
Total equity securities
|
|
24.5
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.8
|
|
||||||||
Derivatives
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||||
Total financial assets
|
|
$
|
231.7
|
|
|
$
|
0.8
|
|
|
$
|
(2.5
|
)
|
|
$
|
46.9
|
|
|
$
|
(22.8
|
)
|
|
$
|
14.7
|
|
|
$
|
(8.9
|
)
|
|
$
|
259.9
|
|
|
|
|
|
Total realized/unrealized (gains) losses included in
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Balance at March 31, 2018
|
Net (earnings) loss
|
Other comp. (income) loss
|
Purchases and issuances
|
Sales and settlements
|
Transfer to Level 3
|
Transfer out of Level 3
|
Balance at June 30, 2018
|
||||||||||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other
|
|
$
|
4.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
Total financial liabilities
|
|
$
|
4.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
|
|
|
|
Total realized/unrealized gains (losses) included in
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Balance at December 31, 2017
|
Net earnings (loss)
|
Other comp. income (loss)
|
Purchases and issuances
|
Sales and settlements
|
Transfer to Level 3
|
Transfer out of Level 3
|
Balance at June 30, 2018
|
||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed maturity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
States, municipalities and political subdivisions
|
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
(6.0
|
)
|
|
$
|
0.4
|
|
Residential mortgage-backed securities
|
|
14.6
|
|
|
0.1
|
|
|
0.6
|
|
|
—
|
|
|
(5.1
|
)
|
|
5.5
|
|
|
(3.4
|
)
|
|
12.3
|
|
||||||||
Commercial mortgage-backed securities
|
|
12.2
|
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
10.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.1
|
|
||||||||
Asset-backed securities
|
|
133.7
|
|
|
1.2
|
|
|
(3.2
|
)
|
|
68.0
|
|
|
(64.0
|
)
|
|
—
|
|
|
(2.9
|
)
|
|
132.8
|
|
||||||||
Corporate and other
|
|
26.3
|
|
|
0.1
|
|
|
(0.9
|
)
|
|
29.0
|
|
|
(3.0
|
)
|
|
15.7
|
|
|
—
|
|
|
67.2
|
|
||||||||
Total fixed maturity securities
|
|
192.8
|
|
|
1.3
|
|
|
(3.9
|
)
|
|
107.4
|
|
|
(72.1
|
)
|
|
21.6
|
|
|
(12.3
|
)
|
|
234.8
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stocks
|
|
0.2
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.5
|
|
||||||||
Perpetual preferred stocks
|
|
6.4
|
|
|
0.4
|
|
|
—
|
|
|
14.9
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
24.3
|
|
||||||||
Total equity securities
|
|
6.6
|
|
|
0.3
|
|
|
—
|
|
|
14.9
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
24.8
|
|
||||||||
Derivatives
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||||
Total financial assets
|
|
$
|
199.7
|
|
|
$
|
1.6
|
|
|
$
|
(3.9
|
)
|
|
$
|
122.3
|
|
|
$
|
(72.1
|
)
|
|
$
|
24.6
|
|
|
$
|
(12.3
|
)
|
|
$
|
259.9
|
|
|
|
|
|
Total realized/unrealized (gains) losses included in
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Balance at December 31, 2017
|
Net (earnings) loss
|
Other comp. (income) loss
|
Purchases and issuances
|
Sales and settlements
|
Transfer to Level 3
|
Transfer out of Level 3
|
Balance at June 30, 2018
|
||||||||||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other
|
|
$
|
4.8
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
Total financial liabilities
|
|
$
|
4.8
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
June 30, 2019
|
|
|
|
|
|
Fair Value Measurement Using:
|
||||||||||||||
|
Carrying Value
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
|
$
|
151.8
|
|
|
$
|
151.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
151.8
|
|
Policy loans
|
|
19.4
|
|
|
19.4
|
|
|
—
|
|
|
19.4
|
|
|
—
|
|
|||||
Total assets not accounted for at fair value
|
|
$
|
171.2
|
|
|
$
|
171.2
|
|
|
$
|
—
|
|
|
$
|
19.4
|
|
|
$
|
151.8
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Annuity benefits accumulated
(1)
|
|
$
|
237.8
|
|
|
$
|
235.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
235.2
|
|
Debt obligations
(2)
|
|
789.0
|
|
|
758.4
|
|
|
—
|
|
|
758.4
|
|
|
—
|
|
|||||
Total liabilities not accounted for at fair value
|
|
$
|
1,026.8
|
|
|
$
|
993.6
|
|
|
$
|
—
|
|
|
$
|
758.4
|
|
|
$
|
235.2
|
|
December 31, 2018
|
|
|
|
|
|
Fair Value Measurement Using:
|
||||||||||||||
|
Carrying Value
|
|
Estimated Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
|
$
|
137.6
|
|
|
$
|
137.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
137.6
|
|
Policy loans
|
|
19.8
|
|
|
19.8
|
|
|
—
|
|
|
19.8
|
|
|
—
|
|
|||||
Other invested assets
|
|
1.6
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|||||
Total assets not accounted for at fair value
|
|
$
|
159.0
|
|
|
$
|
159.0
|
|
|
$
|
—
|
|
|
$
|
19.8
|
|
|
$
|
139.2
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Annuity benefits accumulated
(1)
|
|
$
|
244.0
|
|
|
$
|
241.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
241.7
|
|
Debt obligations
(2)
|
|
702.5
|
|
|
703.0
|
|
|
—
|
|
|
703.0
|
|
|
—
|
|
|||||
Total liabilities not accounted for at fair value
|
|
$
|
946.5
|
|
|
$
|
944.7
|
|
|
$
|
—
|
|
|
$
|
703.0
|
|
|
$
|
241.7
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Contracts in progress
|
|
$
|
171.7
|
|
|
$
|
188.2
|
|
Trade receivables
|
|
99.9
|
|
|
127.5
|
|
||
Unbilled retentions
|
|
67.1
|
|
|
65.6
|
|
||
Other receivables
|
|
18.0
|
|
|
4.2
|
|
||
Allowance for doubtful accounts
|
|
(6.0
|
)
|
|
(6.3
|
)
|
||
Total accounts receivable, net
|
|
$
|
350.7
|
|
|
$
|
379.2
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Cable-ships and submersibles
|
|
$
|
241.3
|
|
|
$
|
251.1
|
|
Equipment, furniture and fixtures, and software
|
|
207.1
|
|
|
148.0
|
|
||
Building and leasehold improvements
|
|
48.5
|
|
|
47.3
|
|
||
Land
|
|
36.9
|
|
|
32.8
|
|
||
Construction in progress
|
|
13.5
|
|
|
12.9
|
|
||
Plant and transportation equipment
|
|
12.3
|
|
|
12.0
|
|
||
|
|
559.6
|
|
|
504.1
|
|
||
Less: Accumulated depreciation
|
|
143.2
|
|
|
127.8
|
|
||
Total
|
|
$
|
416.4
|
|
|
$
|
376.3
|
|
|
Construction
|
Marine Services
|
|
Energy
|
|
Telecom
|
|
Insurance
|
Broadcasting
|
Total
|
||||||||||||||||||
Balance at December 31, 2018
|
|
$
|
82.2
|
|
|
$
|
14.3
|
|
|
$
|
2.1
|
|
|
$
|
4.4
|
|
|
$
|
47.3
|
|
|
$
|
21.4
|
|
|
$
|
171.7
|
|
Measurement period adjustment
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
|||||||
Impairments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|||||||
Balance at June 30, 2019
|
|
$
|
89.3
|
|
|
$
|
14.3
|
|
|
$
|
2.1
|
|
|
$
|
4.0
|
|
|
$
|
47.3
|
|
|
$
|
21.4
|
|
|
$
|
178.4
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
FCC licenses
|
|
$
|
132.6
|
|
|
$
|
120.6
|
|
State licenses
|
|
2.5
|
|
|
2.5
|
|
||
Total
|
|
$
|
135.1
|
|
|
$
|
123.1
|
|
|
|
Weighted-Average Original Useful Life
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|||||||||||||
Trade names
|
|
13 Years
|
|
$
|
26.0
|
|
|
$
|
(7.0
|
)
|
|
$
|
19.0
|
|
|
$
|
25.9
|
|
|
$
|
(5.9
|
)
|
|
$
|
20.0
|
|
Customer relationships
|
|
10 Years
|
|
53.6
|
|
|
(11.5
|
)
|
|
42.1
|
|
|
53.6
|
|
|
(7.2
|
)
|
|
46.4
|
|
||||||
Channel sharing arrangements
|
|
40 Years
|
|
25.2
|
|
|
(0.5
|
)
|
|
24.7
|
|
|
25.2
|
|
|
—
|
|
|
25.2
|
|
||||||
Developed technology
|
|
5 Years
|
|
1.2
|
|
|
(1.2
|
)
|
|
—
|
|
|
1.2
|
|
|
(1.2
|
)
|
|
—
|
|
||||||
Other
|
|
6 Years
|
|
5.5
|
|
|
(1.5
|
)
|
|
4.0
|
|
|
5.5
|
|
|
(1.0
|
)
|
|
4.5
|
|
||||||
Total
|
|
|
|
$
|
111.5
|
|
|
$
|
(21.7
|
)
|
|
$
|
89.8
|
|
|
$
|
111.4
|
|
|
$
|
(15.3
|
)
|
|
$
|
96.1
|
|
Fiscal Year
|
|
Estimated Amortization Expense
|
||
2019
|
|
$
|
5.5
|
|
2020
|
|
$
|
8.1
|
|
2021
|
|
$
|
7.9
|
|
2022
|
|
$
|
7.7
|
|
2023
|
|
$
|
6.9
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Long-term care insurance reserves
|
|
$
|
4,158.5
|
|
|
$
|
4,142.5
|
|
Traditional life insurance reserves
|
|
179.9
|
|
|
196.8
|
|
||
Other accident and health insurance reserves
|
|
198.2
|
|
|
222.8
|
|
||
Total life, accident and health reserves
|
|
$
|
4,536.6
|
|
|
$
|
4,562.1
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Beginning balance
|
|
$
|
738.7
|
|
|
$
|
243.5
|
|
Less: recoverable from reinsurers
|
|
(136.4
|
)
|
|
(100.6
|
)
|
||
Beginning balance, net
|
|
602.3
|
|
|
142.9
|
|
||
Incurred related to insured events of:
|
|
|
|
|
||||
Current year
|
|
108.8
|
|
|
36.4
|
|
||
Prior years
|
|
(41.2
|
)
|
|
2.6
|
|
||
Total incurred
|
|
67.6
|
|
|
39.0
|
|
||
Paid related to insured events of:
|
|
|
|
|
||||
Current year
|
|
(2.9
|
)
|
|
(1.4
|
)
|
||
Prior years
|
|
(74.1
|
)
|
|
(25.2
|
)
|
||
Total paid
|
|
(77.0
|
)
|
|
(26.6
|
)
|
||
Interest on liability for policy and contract claims
|
|
10.7
|
|
|
2.6
|
|
||
Ending balance, net
|
|
603.6
|
|
|
157.9
|
|
||
Add: recoverable from reinsurers
|
|
137.4
|
|
|
106.4
|
|
||
Ending balance
|
|
$
|
741.0
|
|
|
$
|
264.3
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Accounts payable
|
|
$
|
133.1
|
|
|
$
|
104.7
|
|
Accrued expenses and other current liabilities
|
|
95.5
|
|
|
83.4
|
|
||
Accrued interconnection costs
|
|
64.1
|
|
|
103.0
|
|
||
Accrued payroll and employee benefits
|
|
35.1
|
|
|
44.2
|
|
||
Accrued interest
|
|
8.1
|
|
|
8.8
|
|
||
Accrued income taxes
|
|
2.6
|
|
|
0.8
|
|
||
Total accounts payable and other current liabilities
|
|
$
|
338.5
|
|
|
$
|
344.9
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Construction
|
|
|
|
|
||||
LIBOR plus 5.85% Note, due 2023
|
|
$
|
78.0
|
|
|
$
|
80.0
|
|
LIBOR plus 1.50% Line of Credit
|
|
53.4
|
|
|
34.0
|
|
||
Other
|
|
0.3
|
|
|
—
|
|
||
Marine Services
|
|
|
|
|
||||
Obligations under capital leases
|
|
36.8
|
|
|
40.4
|
|
||
7.49% Note, due 2020
|
|
21.6
|
|
|
14.0
|
|
||
Notes payable and revolving lines of credit, various maturity dates
|
|
11.5
|
|
|
12.9
|
|
||
Energy
|
|
|
|
|
||||
LIBOR plus 3.00% Term Loan due in 2023
|
|
28.0
|
|
|
—
|
|
||
5.00% Term Loan due in 2022
|
|
11.8
|
|
|
12.4
|
|
||
4.50% Note due in 2022
|
|
10.8
|
|
|
11.3
|
|
||
Other, various maturity dates
|
|
3.2
|
|
|
3.2
|
|
||
Life Sciences
|
|
|
|
|
||||
Notes payable due in 2019
|
|
—
|
|
|
1.7
|
|
||
Broadcasting
|
|
|
|
|
||||
8.50% Notes due 2019
|
|
54.0
|
|
|
35.0
|
|
||
Other, various maturity dates
|
|
12.0
|
|
|
11.1
|
|
||
Non-Operating Corporate
|
|
|
|
|
||||
11.5% Senior Secured Notes, due 2021
|
|
470.0
|
|
|
470.0
|
|
||
7.5% Convertible Senior Notes, due 2022
|
|
55.0
|
|
|
55.0
|
|
||
LIBOR plus 6.75% Line of Credit
|
|
15.0
|
|
|
—
|
|
||
Total
|
|
861.4
|
|
|
781.0
|
|
||
Issuance discount, net and deferred financing costs
|
|
(33.2
|
)
|
|
(37.1
|
)
|
||
Debt obligations
|
|
$
|
828.2
|
|
|
$
|
743.9
|
|
|
|
Operating Leases
|
||
2019
|
|
$
|
22.0
|
|
2020
|
|
18.7
|
|
|
2021
|
|
16.4
|
|
|
2022
|
|
8.8
|
|
|
2023
|
|
6.8
|
|
|
Thereafter
|
|
20.3
|
|
|
Total obligations
|
|
$
|
93.0
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost - benefits earning during the period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost on projected benefit obligation
|
|
1.3
|
|
|
1.4
|
|
|
2.7
|
|
|
2.7
|
|
||||
Expected return on assets
|
|
(1.7
|
)
|
|
(2.0
|
)
|
|
(3.4
|
)
|
|
(3.9
|
)
|
||||
Actuarial gain
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency gain (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit
|
|
$
|
(0.4
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(1.2
|
)
|
|
|
June 30, 2019
|
|
June 30, 2018
|
Expected option life (in years)
|
|
—
|
|
0.88 - 5.84
|
Risk-free interest rate
|
|
—%
|
|
2.24 - 2.85%
|
Expected volatility
|
|
—%
|
|
47.51 - 47.89%
|
Dividend yield
|
|
—%
|
|
—%
|
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested - December 31, 2018
|
|
3,031,469
|
|
|
$
|
5.93
|
|
Granted
|
|
542,450
|
|
|
$
|
2.57
|
|
Vested
|
|
(1,144,831
|
)
|
|
$
|
6.07
|
|
Forfeited
|
|
(5,842
|
)
|
|
$
|
3.14
|
|
Unvested - June 30, 2019
|
|
2,423,246
|
|
|
$
|
5.12
|
|
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||
Outstanding - December 31, 2018
|
|
7,160,861
|
|
|
$
|
6.51
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
Exercised
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
|
—
|
|
|
$
|
—
|
|
Expired
|
|
(93,269
|
)
|
|
$
|
5.47
|
|
Outstanding - June 30, 2019
|
|
7,067,592
|
|
|
$
|
6.52
|
|
|
|
|
|
|
|||
Eligible for exercise
|
|
6,613,099
|
|
|
$
|
6.59
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||
Preferred shares authorized, $0.001 par value
|
|
20,000,000
|
|
|
20,000,000
|
|
Series A shares issued and outstanding
|
|
6,375
|
|
|
6,375
|
|
Series A-2 shares issued and outstanding
|
|
4,000
|
|
|
14,000
|
|
•
|
The Company agreed that in the event that Corrib and Luxor would have been entitled to any Participating Dividends payable, had they not converted the Preferred Stock (as defined in the respective Series A and Series A-1 Certificate of Designation), after the date of their Preferred Share conversion, then the Company will issue to Corrib and Luxor, on the date such Participating Dividends become payable by the Company, in a transaction exempt from the registration requirements of the Securities Act the number of shares of common stock equal to (a) the value of the Participating Dividends Corrib or Luxor would have received pursuant to Sections (2)(c) and (2)(d) of the respective Series A and Series A-1 Certificate of Designation, divided by (b) the Thirty Day VWAP (as defined in the respective Series A and Series A-1 Certificate of Designation) for the period ending two business days prior to the underlying event or transaction that would have entitled Corrib or Luxor to such Participating Dividend had Corrib’s or Luxor’s Preferred Stock remain unconverted.
|
•
|
The Company agreed that it will issue to Corrib and Luxor, on each quarterly anniversary commencing May 29, 2017 (or, if later, the date on which the corresponding dividend payment is made to the holders of the outstanding Preferred Stock), through and until the Maturity Date (as defined in the respective Series A and Series A-1 Certificate of Designation), in a transaction exempt from the registration requirements of the Securities Act the number of shares of common stock equal to (a)
1.875%
the Accrued Value (as defined in the respective Series A and Series A-1 Certificate of Designation) of Corrib’s or Luxor’s Preferred Stock as of the Closing Date (as defined in applicable Voluntary Conversion Agreements) divided by (b) the Thirty Day VWAP (as defined in the respective Series A and Series A-1 Certificate of Designation) for the period ending two business days prior to the applicable Dividend Payment Date (as defined in the respective Series A and Series A-1 Certificate of Designation).
|
Declaration Date
|
|
March 31, 2019
|
|
|
June 30, 2019
|
|
||
Holders of Record Date
|
|
March 31, 2019
|
|
|
June 30, 2019
|
|
||
Payment Date
|
|
April 15, 2019
|
|
|
July 15, 2019
|
|
||
Total Dividend
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Declaration Date
|
|
March 31, 2018
|
|
|
June 30, 2018
|
|
||
Holders of Record Date
|
|
March 31, 2018
|
|
|
June 30, 2018
|
|
||
Payment Date
|
|
April 16, 2018
|
|
|
July 16, 2018
|
|
||
Total Dividend
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net revenue
|
|
$
|
1.0
|
|
|
$
|
3.8
|
|
|
$
|
3.0
|
|
|
$
|
7.6
|
|
Operating expenses
|
|
$
|
0.1
|
|
|
$
|
0.6
|
|
|
$
|
0.7
|
|
|
$
|
1.0
|
|
Interest expense
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.5
|
|
|
$
|
0.7
|
|
Dividends
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
1.1
|
|
|
$
|
2.4
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Accounts receivable
|
|
$
|
0.8
|
|
|
$
|
5.0
|
|
Long-term obligations
|
|
$
|
25.6
|
|
|
$
|
28.5
|
|
Accounts payable
|
|
$
|
0.1
|
|
|
$
|
2.2
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
|
|
Segment
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Customer A
|
|
Telecommunications
|
|
10.4%
|
|
11.9%
|
|
10.5%
|
|
11.3%
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net Revenue by Geographic Region
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
469.9
|
|
|
$
|
423.0
|
|
|
$
|
910.5
|
|
|
$
|
835.4
|
|
United Kingdom
|
|
38.8
|
|
|
65.4
|
|
|
81.0
|
|
|
101.8
|
|
||||
Other
|
|
9.9
|
|
|
8.4
|
|
|
18.5
|
|
|
13.3
|
|
||||
Total
|
|
$
|
518.6
|
|
|
$
|
496.8
|
|
|
$
|
1,010.0
|
|
|
$
|
950.5
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net revenue
|
|
|
|
|
|
|
|
|
||||||||
Construction
|
|
$
|
195.7
|
|
|
$
|
176.9
|
|
|
$
|
387.8
|
|
|
$
|
335.9
|
|
Marine Services
|
|
39.4
|
|
|
68.4
|
|
|
81.8
|
|
|
105.1
|
|
||||
Energy
|
|
5.5
|
|
|
7.1
|
|
|
10.6
|
|
|
11.6
|
|
||||
Telecommunications
|
|
189.3
|
|
|
190.5
|
|
|
344.8
|
|
|
392.8
|
|
||||
Insurance
|
|
82.1
|
|
|
43.8
|
|
|
170.9
|
|
|
84.0
|
|
||||
Broadcasting
|
|
10.0
|
|
|
11.1
|
|
|
19.8
|
|
|
21.7
|
|
||||
Other
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
3.4
|
|
||||
Eliminations
(*)
|
|
(3.4
|
)
|
|
(2.0
|
)
|
|
(5.7
|
)
|
|
(4.0
|
)
|
||||
Total net revenue
|
|
$
|
518.6
|
|
|
$
|
496.8
|
|
|
$
|
1,010.0
|
|
|
$
|
950.5
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income (loss) from operations
|
|
|
|
|
|
|
|
|
||||||||
Construction
|
|
$
|
16.2
|
|
|
$
|
11.8
|
|
|
$
|
21.9
|
|
|
$
|
17.9
|
|
Marine Services
|
|
(2.7
|
)
|
|
2.8
|
|
|
(6.8
|
)
|
|
—
|
|
||||
Energy
|
|
(0.3
|
)
|
|
1.5
|
|
|
(0.7
|
)
|
|
0.9
|
|
||||
Telecommunications
|
|
0.2
|
|
|
1.1
|
|
|
0.8
|
|
|
2.1
|
|
||||
Insurance
|
|
30.9
|
|
|
4.0
|
|
|
65.3
|
|
|
6.9
|
|
||||
Life Sciences
|
|
(1.8
|
)
|
|
(6.6
|
)
|
|
(3.6
|
)
|
|
(9.8
|
)
|
||||
Broadcasting
|
|
(1.7
|
)
|
|
(8.4
|
)
|
|
(5.0
|
)
|
|
(16.1
|
)
|
||||
Other
|
|
—
|
|
|
(1.2
|
)
|
|
—
|
|
|
(1.4
|
)
|
||||
Non-operating Corporate
|
|
(6.5
|
)
|
|
(8.5
|
)
|
|
(13.7
|
)
|
|
(15.8
|
)
|
||||
Eliminations
(*)
|
|
(3.4
|
)
|
|
(2.0
|
)
|
|
(5.7
|
)
|
|
(4.0
|
)
|
||||
Total income (loss) from operations
|
|
$
|
30.9
|
|
|
$
|
(5.5
|
)
|
|
$
|
52.5
|
|
|
$
|
(19.3
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income (loss) from operations
|
|
$
|
30.9
|
|
|
$
|
(5.5
|
)
|
|
$
|
52.5
|
|
|
$
|
(19.3
|
)
|
Interest expense
|
|
(23.0
|
)
|
|
(17.2
|
)
|
|
(45.3
|
)
|
|
(36.5
|
)
|
||||
Gain on sale and deconsolidation of subsidiary
|
|
—
|
|
|
102.1
|
|
|
—
|
|
|
102.1
|
|
||||
Income from equity investees
|
|
6.1
|
|
|
10.7
|
|
|
1.2
|
|
|
5.5
|
|
||||
Gain on bargain purchase
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
||||
Other income (expense), net
|
|
(4.7
|
)
|
|
(0.9
|
)
|
|
(1.4
|
)
|
|
0.2
|
|
||||
Income from continuing operations
|
|
10.4
|
|
|
89.2
|
|
|
8.1
|
|
|
52.0
|
|
||||
Income tax expense
|
|
(1.2
|
)
|
|
(9.4
|
)
|
|
(5.2
|
)
|
|
(11.1
|
)
|
||||
Net income
|
|
9.2
|
|
|
79.8
|
|
|
2.9
|
|
|
40.9
|
|
||||
Less: Net (income) loss attributable to noncontrolling interest and redeemable noncontrolling interest
|
|
0.2
|
|
|
(24.4
|
)
|
|
3.7
|
|
|
(20.5
|
)
|
||||
Net income attributable to HC2 Holdings, Inc.
|
|
9.4
|
|
|
55.4
|
|
|
6.6
|
|
|
20.4
|
|
||||
Less: Preferred dividends, deemed dividends, and repurchase gains
|
|
0.4
|
|
|
0.7
|
|
|
(0.8
|
)
|
|
1.4
|
|
||||
Net income attributable to common stock and participating preferred stockholders
|
|
$
|
9.0
|
|
|
$
|
54.7
|
|
|
$
|
7.4
|
|
|
$
|
19.0
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
||||||||
Construction
|
|
$
|
4.0
|
|
|
$
|
1.7
|
|
|
$
|
7.9
|
|
|
$
|
3.2
|
|
Marine Services
|
|
6.4
|
|
|
6.3
|
|
|
13.0
|
|
|
13.3
|
|
||||
Energy
|
|
1.5
|
|
|
1.3
|
|
|
2.9
|
|
|
2.7
|
|
||||
Telecommunications
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
||||
Insurance
(*)
|
|
(6.0
|
)
|
|
(1.3
|
)
|
|
(12.5
|
)
|
|
(2.3
|
)
|
||||
Life Sciences
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
||||
Broadcasting
|
|
1.5
|
|
|
0.8
|
|
|
2.9
|
|
|
1.5
|
|
||||
Total
|
|
$
|
7.6
|
|
|
$
|
9.0
|
|
|
$
|
14.5
|
|
|
$
|
18.7
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Capital Expenditures
(*)
|
|
|
|
|
|
|
|
|
||||||||
Construction
|
|
$
|
2.8
|
|
|
$
|
2.9
|
|
|
$
|
5.4
|
|
|
$
|
4.1
|
|
Marine Services
|
|
5.1
|
|
|
7.5
|
|
|
8.2
|
|
|
14.1
|
|
||||
Energy
|
|
0.2
|
|
|
0.4
|
|
|
0.3
|
|
|
1.2
|
|
||||
Telecommunications
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Insurance
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
||||
Life Sciences
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Broadcasting
|
|
4.7
|
|
|
0.2
|
|
|
5.1
|
|
|
0.3
|
|
||||
Total
|
|
$
|
12.8
|
|
|
$
|
11.0
|
|
|
$
|
19.2
|
|
|
$
|
20.2
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Investments
|
|
|
|
|
||||
Construction
|
|
$
|
0.9
|
|
|
$
|
0.9
|
|
Marine Services
|
|
65.9
|
|
|
58.3
|
|
||
Insurance
|
|
4,213.7
|
|
|
3,821.4
|
|
||
Life Sciences
|
|
15.7
|
|
|
16.3
|
|
||
Other
|
|
3.3
|
|
|
5.6
|
|
||
Eliminations
|
|
(101.4
|
)
|
|
(80.5
|
)
|
||
Total
|
|
$
|
4,198.1
|
|
|
$
|
3,822.0
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Property, plant and equipment, net
|
|
|
|
|
||||
United States
|
|
$
|
223.8
|
|
|
$
|
178.2
|
|
United Kingdom
|
|
187.6
|
|
|
192.7
|
|
||
Other
|
|
5.0
|
|
|
5.4
|
|
||
Total
|
|
$
|
416.4
|
|
|
$
|
376.3
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Total Assets
|
|
|
|
|
||||
Construction
|
|
$
|
535.0
|
|
|
$
|
537.9
|
|
Marine Services
|
|
380.6
|
|
|
368.6
|
|
||
Energy
|
|
122.1
|
|
|
77.6
|
|
||
Telecommunications
|
|
122.5
|
|
|
139.9
|
|
||
Insurance
|
|
5,517.5
|
|
|
5,213.1
|
|
||
Life Sciences
|
|
38.3
|
|
|
35.6
|
|
||
Broadcasting
|
|
245.2
|
|
|
202.8
|
|
||
Other
|
|
3.4
|
|
|
5.6
|
|
||
Non-operating Corporate
|
|
20.0
|
|
|
9.2
|
|
||
Eliminations
|
|
(101.4
|
)
|
|
(86.5
|
)
|
||
Total
|
|
$
|
6,883.2
|
|
|
$
|
6,503.8
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income attributable to common stock and participating preferred stockholders
|
|
$
|
9.0
|
|
|
$
|
54.7
|
|
|
$
|
7.4
|
|
|
$
|
19.0
|
|
Earnings allocable to common shares:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Numerator for basic and diluted earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Participating shares at end of period:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common stock outstanding
|
|
45.6
|
|
|
44.2
|
|
|
45.2
|
|
|
44.1
|
|
||||
Unvested restricted stock
|
|
0.6
|
|
|
0.4
|
|
|
0.5
|
|
|
0.3
|
|
||||
Preferred stock (as-converted basis)
|
|
2.1
|
|
|
4.8
|
|
|
2.2
|
|
|
4.8
|
|
||||
Total
|
|
48.3
|
|
|
49.4
|
|
|
47.9
|
|
|
49.2
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Percentage of loss allocated to:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
94.5
|
%
|
|
89.5
|
%
|
|
94.4
|
%
|
|
89.6
|
%
|
||||
Unvested restricted stock
|
|
1.2
|
%
|
|
0.8
|
%
|
|
1.0
|
%
|
|
0.6
|
%
|
||||
Preferred stock
|
|
4.3
|
%
|
|
9.7
|
%
|
|
4.6
|
%
|
|
9.8
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income attributable to common stock, basic
|
|
$
|
8.5
|
|
|
$
|
48.9
|
|
|
$
|
7.0
|
|
|
$
|
17.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distributed and Undistributed earnings to Common Shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Effect of assumed shares under treasury stock method for stock options and restricted shares and if-converted method for convertible instruments
|
|
(1.4
|
)
|
|
0.1
|
|
|
(2.4
|
)
|
|
—
|
|
||||
Net Income attributable to common stock, diluted
|
|
$
|
7.1
|
|
|
$
|
49.0
|
|
|
$
|
4.6
|
|
|
$
|
17.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator for basic and dilutive earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding - basic
|
|
45.6
|
|
|
44.2
|
|
|
45.2
|
|
|
44.1
|
|
||||
Effect of assumed shares under treasury stock method for stock options and restricted shares and if-converted method for convertible instruments
|
|
12.5
|
|
|
1.3
|
|
|
14.7
|
|
|
1.2
|
|
||||
Weighted average common shares outstanding - diluted
|
|
58.1
|
|
|
45.5
|
|
|
59.9
|
|
|
45.3
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to participating security holders - Basic
|
|
$
|
0.19
|
|
|
$
|
1.11
|
|
|
$
|
0.15
|
|
|
$
|
0.39
|
|
Net income attributable to participating security holders - Diluted
|
|
$
|
0.12
|
|
|
$
|
1.08
|
|
|
$
|
0.08
|
|
|
$
|
0.38
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Net revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
|
$
|
195.7
|
|
|
$
|
176.9
|
|
|
$
|
18.8
|
|
|
$
|
387.8
|
|
|
$
|
335.9
|
|
|
$
|
51.9
|
|
Marine Services
|
|
39.4
|
|
|
68.4
|
|
|
(29.0
|
)
|
|
81.8
|
|
|
105.1
|
|
|
(23.3
|
)
|
||||||
Energy
|
|
5.5
|
|
|
7.1
|
|
|
(1.6
|
)
|
|
10.6
|
|
|
11.6
|
|
|
(1.0
|
)
|
||||||
Telecommunications
|
|
189.3
|
|
|
190.5
|
|
|
(1.2
|
)
|
|
344.8
|
|
|
392.8
|
|
|
(48.0
|
)
|
||||||
Insurance
|
|
82.1
|
|
|
43.8
|
|
|
38.3
|
|
|
170.9
|
|
|
84.0
|
|
|
86.9
|
|
||||||
Broadcasting
|
|
10.0
|
|
|
11.1
|
|
|
(1.1
|
)
|
|
19.8
|
|
|
21.7
|
|
|
(1.9
|
)
|
||||||
Other
|
|
—
|
|
|
1.0
|
|
|
(1.0
|
)
|
|
—
|
|
|
3.4
|
|
|
(3.4
|
)
|
||||||
Eliminations
(1)
|
|
(3.4
|
)
|
|
(2.0
|
)
|
|
(1.4
|
)
|
|
(5.7
|
)
|
|
(4.0
|
)
|
|
(1.7
|
)
|
||||||
Total net revenue
|
|
518.6
|
|
|
496.8
|
|
|
21.8
|
|
|
1,010.0
|
|
|
950.5
|
|
|
59.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction
|
|
$
|
16.2
|
|
|
$
|
11.8
|
|
|
$
|
4.4
|
|
|
$
|
21.9
|
|
|
$
|
17.9
|
|
|
$
|
4.0
|
|
Marine Services
|
|
(2.7
|
)
|
|
2.8
|
|
|
(5.5
|
)
|
|
(6.8
|
)
|
|
—
|
|
|
(6.8
|
)
|
||||||
Energy
|
|
(0.3
|
)
|
|
1.5
|
|
|
(1.8
|
)
|
|
(0.7
|
)
|
|
0.9
|
|
|
(1.6
|
)
|
||||||
Telecommunications
|
|
0.2
|
|
|
1.1
|
|
|
(0.9
|
)
|
|
0.8
|
|
|
2.1
|
|
|
(1.3
|
)
|
||||||
Insurance
|
|
30.9
|
|
|
4.0
|
|
|
26.9
|
|
|
65.3
|
|
|
6.9
|
|
|
58.4
|
|
||||||
Life Sciences
|
|
(1.8
|
)
|
|
(6.6
|
)
|
|
4.8
|
|
|
(3.6
|
)
|
|
(9.8
|
)
|
|
6.2
|
|
||||||
Broadcasting
|
|
(1.7
|
)
|
|
(8.4
|
)
|
|
6.7
|
|
|
(5.0
|
)
|
|
(16.1
|
)
|
|
11.1
|
|
||||||
Other
|
|
—
|
|
|
(1.2
|
)
|
|
1.2
|
|
|
—
|
|
|
(1.4
|
)
|
|
1.4
|
|
||||||
Non-operating Corporate
|
|
(6.5
|
)
|
|
(8.5
|
)
|
|
2.0
|
|
|
(13.7
|
)
|
|
(15.8
|
)
|
|
2.1
|
|
||||||
Eliminations
(1)
|
|
(3.4
|
)
|
|
(2.0
|
)
|
|
(1.4
|
)
|
|
(5.7
|
)
|
|
(4.0
|
)
|
|
(1.7
|
)
|
||||||
Total income (loss) from operations
|
|
30.9
|
|
|
(5.5
|
)
|
|
36.4
|
|
|
52.5
|
|
|
(19.3
|
)
|
|
71.8
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
|
(23.0
|
)
|
|
(17.2
|
)
|
|
(5.8
|
)
|
|
(45.3
|
)
|
|
(36.5
|
)
|
|
(8.8
|
)
|
||||||
Gain on sale and deconsolidation of subsidiary
|
|
—
|
|
|
102.1
|
|
|
(102.1
|
)
|
|
—
|
|
|
102.1
|
|
|
(102.1
|
)
|
||||||
Income from equity investees
|
|
6.1
|
|
|
10.7
|
|
|
(4.6
|
)
|
|
1.2
|
|
|
5.5
|
|
|
(4.3
|
)
|
||||||
Gain on bargain purchase
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||||
Other income (expense), net
|
|
(4.7
|
)
|
|
(0.9
|
)
|
|
(3.8
|
)
|
|
(1.4
|
)
|
|
0.2
|
|
|
(1.6
|
)
|
||||||
Income from continuing operations
|
|
10.4
|
|
|
89.2
|
|
|
(78.8
|
)
|
|
8.1
|
|
|
52.0
|
|
|
(43.9
|
)
|
||||||
Income tax expense
|
|
(1.2
|
)
|
|
(9.4
|
)
|
|
8.2
|
|
|
(5.2
|
)
|
|
(11.1
|
)
|
|
5.9
|
|
||||||
Net income
|
|
9.2
|
|
|
79.8
|
|
|
(70.6
|
)
|
|
2.9
|
|
|
40.9
|
|
|
(38.0
|
)
|
||||||
Less: Net (income) loss attributable to noncontrolling interest and redeemable noncontrolling interest
|
|
0.2
|
|
|
(24.4
|
)
|
|
24.6
|
|
|
3.7
|
|
|
(20.5
|
)
|
|
24.2
|
|
||||||
Net income attributable to HC2 Holdings, Inc.
|
|
9.4
|
|
|
55.4
|
|
|
(46.0
|
)
|
|
6.6
|
|
|
20.4
|
|
|
(13.8
|
)
|
||||||
Less: Preferred dividends, deemed dividends, and repurchase gains
|
|
0.4
|
|
|
0.7
|
|
|
(0.3
|
)
|
|
(0.8
|
)
|
|
1.4
|
|
|
(2.2
|
)
|
||||||
Net income attributable to common stock and participating preferred stockholders
|
|
$
|
9.0
|
|
|
$
|
54.7
|
|
|
$
|
(45.7
|
)
|
|
$
|
7.4
|
|
|
$
|
19.0
|
|
|
$
|
(11.6
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Net revenue
|
|
$
|
195.7
|
|
|
$
|
176.9
|
|
|
$
|
18.8
|
|
|
$
|
387.8
|
|
|
$
|
335.9
|
|
|
$
|
51.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
155.3
|
|
|
149.1
|
|
|
6.2
|
|
|
318.1
|
|
|
284.8
|
|
|
33.3
|
|
||||||
Selling, general and administrative
|
|
20.2
|
|
|
14.3
|
|
|
5.9
|
|
|
40.0
|
|
|
29.5
|
|
|
10.5
|
|
||||||
Depreciation and amortization
|
|
4.0
|
|
|
1.7
|
|
|
2.3
|
|
|
7.9
|
|
|
3.2
|
|
|
4.7
|
|
||||||
Other operating (income) expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.4
|
|
|
(0.5
|
)
|
||||||
Income from operations
|
|
$
|
16.2
|
|
|
$
|
11.8
|
|
|
$
|
4.4
|
|
|
$
|
21.9
|
|
|
$
|
18.0
|
|
|
$
|
3.9
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Net revenue
|
|
$
|
39.4
|
|
|
$
|
68.4
|
|
|
$
|
(29.0
|
)
|
|
$
|
81.8
|
|
|
$
|
105.1
|
|
|
$
|
(23.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of revenue
|
|
30.6
|
|
|
54.0
|
|
|
(23.4
|
)
|
|
63.8
|
|
|
84.0
|
|
|
(20.2
|
)
|
||||||
Selling, general and administrative
|
|
5.9
|
|
|
5.2
|
|
|
0.7
|
|
|
12.0
|
|
|
10.5
|
|
|
1.5
|
|
||||||
Depreciation and amortization
|
|
6.4
|
|
|
6.3
|
|
|
0.1
|
|
|
13.0
|
|
|
13.3
|
|
|
(0.3
|
)
|
||||||
Other operating income
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(0.2
|
)
|
|
(2.7
|
)
|
|
2.5
|
|
||||||
Income (loss) from operations
|
|
$
|
(2.7
|
)
|
|
$
|
2.9
|
|
|
$
|
(5.6
|
)
|
|
$
|
(6.8
|
)
|
|
$
|
—
|
|
|
$
|
(6.8
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Net revenue
|
|
$
|
5.5
|
|
|
$
|
7.1
|
|
|
$
|
(1.6
|
)
|
|
$
|
10.6
|
|
|
$
|
11.6
|
|
|
$
|
(1.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue
|
|
3.3
|
|
|
2.7
|
|
|
0.6
|
|
|
6.5
|
|
|
5.6
|
|
|
0.9
|
|
||||||
Selling, general and administrative expenses
|
|
1.0
|
|
|
1.4
|
|
|
(0.4
|
)
|
|
1.9
|
|
|
2.3
|
|
|
(0.4
|
)
|
||||||
Depreciation and amortization
|
|
1.5
|
|
|
1.3
|
|
|
0.2
|
|
|
2.9
|
|
|
2.7
|
|
|
0.2
|
|
||||||
Other operating expense
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
||||||
Income (loss) from operations
|
|
$
|
(0.3
|
)
|
|
$
|
1.6
|
|
|
$
|
(1.9
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
0.9
|
|
|
$
|
(1.6
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Net revenue
|
|
$
|
189.3
|
|
|
$
|
190.5
|
|
|
$
|
(1.2
|
)
|
|
$
|
344.8
|
|
|
$
|
392.9
|
|
|
$
|
(48.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue
|
|
186.4
|
|
|
186.6
|
|
|
(0.2
|
)
|
|
338.7
|
|
|
385.4
|
|
|
(46.7
|
)
|
||||||
Selling, general and administrative
|
|
2.1
|
|
|
2.7
|
|
|
(0.6
|
)
|
|
4.6
|
|
|
5.2
|
|
|
(0.6
|
)
|
||||||
Depreciation and amortization
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
||||||
Other operating expense
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||||
Income from operations
|
|
$
|
0.2
|
|
|
$
|
1.1
|
|
|
$
|
(0.9
|
)
|
|
$
|
0.8
|
|
|
$
|
2.1
|
|
|
$
|
(1.3
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Life, accident and health earned premiums, net
|
|
$
|
30.1
|
|
|
$
|
19.9
|
|
|
$
|
10.2
|
|
|
$
|
59.9
|
|
|
$
|
39.9
|
|
|
$
|
20.0
|
|
Net investment income
|
|
52.5
|
|
|
19.4
|
|
|
33.1
|
|
|
105.5
|
|
|
37.1
|
|
|
68.4
|
|
||||||
Net realized and unrealized (losses) gains on investments
|
|
(0.5
|
)
|
|
4.5
|
|
|
(5.0
|
)
|
|
5.5
|
|
|
7.0
|
|
|
(1.5
|
)
|
||||||
Net revenue
|
|
82.1
|
|
|
43.8
|
|
|
38.3
|
|
|
170.9
|
|
|
84.0
|
|
|
86.9
|
|
||||||
Policy benefits, changes in reserves, and commissions
|
|
48.0
|
|
|
35.4
|
|
|
12.6
|
|
|
100.7
|
|
|
67.7
|
|
|
33.0
|
|
||||||
Selling, general and administrative
|
|
9.2
|
|
|
5.7
|
|
|
3.5
|
|
|
17.4
|
|
|
11.6
|
|
|
5.8
|
|
||||||
Depreciation and amortization
|
|
(6.0
|
)
|
|
(1.3
|
)
|
|
(4.7
|
)
|
|
(12.5
|
)
|
|
(2.3
|
)
|
|
(10.2
|
)
|
||||||
Income from operations
(1)
|
|
$
|
30.9
|
|
|
$
|
4.0
|
|
|
$
|
26.9
|
|
|
$
|
65.3
|
|
|
$
|
7.0
|
|
|
$
|
58.3
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Selling, general and administrative
|
|
$
|
1.6
|
|
|
$
|
6.5
|
|
|
$
|
(4.9
|
)
|
|
$
|
3.4
|
|
|
$
|
9.7
|
|
|
$
|
(6.3
|
)
|
Depreciation and amortization
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
||||||
Loss from operations
|
|
$
|
(1.7
|
)
|
|
$
|
(6.6
|
)
|
|
$
|
4.9
|
|
|
$
|
(3.5
|
)
|
|
$
|
(9.8
|
)
|
|
$
|
6.3
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Net revenue
|
|
$
|
10.0
|
|
|
$
|
11.1
|
|
|
$
|
(1.1
|
)
|
|
$
|
19.8
|
|
|
$
|
21.7
|
|
|
$
|
(1.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of revenue
|
|
5.6
|
|
|
7.2
|
|
|
(1.6
|
)
|
|
11.8
|
|
|
14.0
|
|
|
(2.2
|
)
|
||||||
Selling, general and administrative
|
|
5.6
|
|
|
11.4
|
|
|
(5.8
|
)
|
|
12.0
|
|
|
22.3
|
|
|
(10.3
|
)
|
||||||
Depreciation and amortization
|
|
1.5
|
|
|
0.8
|
|
|
0.7
|
|
|
2.9
|
|
|
1.4
|
|
|
1.5
|
|
||||||
Other operating (income) expense
|
|
(1.0
|
)
|
|
0.1
|
|
|
(1.1
|
)
|
|
(1.9
|
)
|
|
0.1
|
|
|
(2.0
|
)
|
||||||
Loss from operations
|
|
$
|
(1.7
|
)
|
|
$
|
(8.4
|
)
|
|
$
|
6.7
|
|
|
$
|
(5.0
|
)
|
|
$
|
(16.1
|
)
|
|
$
|
11.1
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Selling, general and administrative
|
|
$
|
6.5
|
|
|
$
|
8.5
|
|
|
$
|
(2.0
|
)
|
|
$
|
13.7
|
|
|
$
|
15.8
|
|
|
$
|
(2.1
|
)
|
Loss from operations
|
|
$
|
(6.5
|
)
|
|
$
|
(8.5
|
)
|
|
$
|
2.0
|
|
|
$
|
(13.7
|
)
|
|
$
|
(15.8
|
)
|
|
$
|
2.1
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Construction
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
Marine Services
|
|
6.3
|
|
|
11.6
|
|
|
(5.3
|
)
|
|
2.5
|
|
|
7.7
|
|
|
(5.2
|
)
|
||||||
Life Sciences
|
|
(0.2
|
)
|
|
(0.7
|
)
|
|
0.5
|
|
|
(1.3
|
)
|
|
(2.1
|
)
|
|
0.8
|
|
||||||
Income from equity investees
|
|
$
|
6.1
|
|
|
$
|
10.8
|
|
|
$
|
(4.7
|
)
|
|
$
|
1.2
|
|
|
$
|
5.5
|
|
|
$
|
(4.3
|
)
|
(in millions)
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||||||
|
|
Core Operating Subsidiaries
|
|
Early Stage & Other
|
|
|
|
Total HC2
|
||||||||||||||||||||||||||||
|
Construction
|
Marine Services
|
|
Energy
|
|
Telecom
|
|
Life Sciences
|
|
Broadcasting
|
Other & Elimination
|
Non-operating Corporate
|
|
|||||||||||||||||||||||
Net income attributable to HC2 Holdings, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9.4
|
|
||||||||||||||||
Less: Net Income attributable to HC2 Holdings Insurance segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30.3
|
|
|||||||||||||||||
Less: Consolidating eliminations attributable to HC2 Holdings Insurance segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3.2
|
)
|
|||||||||||||||||
Net Income (loss) attributable to HC2 Holdings, Inc., excluding Insurance Segment
|
|
$
|
8.9
|
|
|
$
|
1.9
|
|
|
$
|
(0.7
|
)
|
|
$
|
0.4
|
|
|
$
|
(1.4
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(22.5
|
)
|
|
$
|
(17.7
|
)
|
Adjustments to reconcile net income (loss) to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Depreciation and amortization
|
|
4.0
|
|
|
6.4
|
|
|
1.5
|
|
|
0.1
|
|
|
0.1
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
13.6
|
|
|||||||||
Depreciation and amortization (included in cost of revenue)
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|||||||||
Amortization of equity method fair value adjustment at acquisition
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|||||||||
Other operating (income) expenses
|
|
—
|
|
|
(0.8
|
)
|
|
0.1
|
|
|
0.5
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|||||||||
Interest expense
|
|
2.2
|
|
|
1.0
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
17.3
|
|
|
23.3
|
|
|||||||||
Other (income) expense, net
|
|
0.2
|
|
|
(0.3
|
)
|
|
0.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.3
|
|
|
0.8
|
|
|
3.7
|
|
|
4.7
|
|
|||||||||
Net loss on contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||||||||
Foreign currency (gain) loss (included in cost of revenue)
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||||||
Income tax (benefit) expense
|
|
4.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
(4.8
|
)
|
|
(0.5
|
)
|
|||||||||
Noncontrolling interest
|
|
0.8
|
|
|
0.8
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||||||||
Share-based payment expense
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
1.4
|
|
|
2.1
|
|
|||||||||
Non-recurring items
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Acquisition and disposition costs
|
|
0.5
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.5
|
|
|
1.5
|
|
|||||||||
Adjusted EBITDA
|
|
$
|
23.1
|
|
|
$
|
9.6
|
|
|
$
|
1.3
|
|
|
$
|
0.8
|
|
|
$
|
(1.8
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
|
$
|
(4.4
|
)
|
|
$
|
27.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total Core Operating Subsidiaries
|
|
$
|
34.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||||||||||||||||||
|
|
Core Operating Subsidiaries
|
|
Early Stage & Other
|
|
|
|
Total HC2
|
||||||||||||||||||||||||||||
|
Construction
|
Marine Services
|
|
Energy
|
|
Telecom
|
|
Life Sciences
|
|
Broadcasting
|
Other & Elimination
|
Non-operating Corporate
|
|
|||||||||||||||||||||||
Net income attributable to HC2 Holdings, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
55.4
|
|
||||||||||||||||
Less: Net Income attributable to HC2 Holdings Insurance segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.6
|
|
|||||||||||||||||
Less: Consolidating eliminations attributable to HC2 Holdings Insurance segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.0
|
)
|
|||||||||||||||||
Net Income (loss) attributable to HC2 Holdings, Inc., excluding Insurance segment
|
|
$
|
7.4
|
|
|
$
|
10.9
|
|
|
$
|
0.7
|
|
|
$
|
1.0
|
|
|
$
|
74.2
|
|
|
$
|
(11.9
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(25.0
|
)
|
|
$
|
56.8
|
|
Adjustments to reconcile net income (loss) to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Depreciation and amortization
|
|
1.6
|
|
|
6.4
|
|
|
1.4
|
|
|
0.1
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
10.3
|
|
|||||||||
Depreciation and amortization (included in cost of revenue)
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|||||||||
Amortization of equity method fair value adjustment at acquisition
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|||||||||
Other operating (income) expenses
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||||||
Gain on sale and deconsolidation of subsidiary
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102.1
|
)
|
|||||||||
Interest expense
|
|
0.5
|
|
|
1.3
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
13.5
|
|
|
17.2
|
|
|||||||||
Loss on early extinguishment or restructuring of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|||||||||
Other (income) expense, net
|
|
—
|
|
|
(2.0
|
)
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
(1.3
|
)
|
|||||||||
Foreign currency (gain) loss (included in cost of revenue)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|||||||||
Income tax (benefit) expense
|
|
3.3
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
2.8
|
|
|
5.9
|
|
|||||||||
Noncontrolling interest
|
|
0.6
|
|
|
4.0
|
|
|
0.3
|
|
|
—
|
|
|
20.6
|
|
|
(0.7
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
24.3
|
|
|||||||||
Bonus to be settled in equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||||||||
Share-based payment expense
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
2.7
|
|
|
3.7
|
|
|||||||||
Non-recurring items
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Acquisition and disposition costs
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
2.4
|
|
|
0.9
|
|
|
—
|
|
|
0.2
|
|
|
4.1
|
|
|||||||||
Adjusted EBITDA
|
|
$
|
15.5
|
|
|
$
|
20.4
|
|
|
$
|
3.0
|
|
|
$
|
1.3
|
|
|
$
|
(4.8
|
)
|
|
$
|
(6.3
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(5.4
|
)
|
|
$
|
22.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total Core Operating Subsidiaries
|
|
$
|
40.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||||||
|
|
Core Operating Subsidiaries
|
|
Early Stage & Other
|
|
|
|
Total HC2
|
||||||||||||||||||||||||||||
|
Construction
|
Marine Services
|
|
Energy
|
|
Telecom
|
|
Life Sciences
|
|
Broadcasting
|
Other & Elimination
|
Non-operating Corporate
|
|
|||||||||||||||||||||||
Net Income attributable to HC2 Holdings, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6.6
|
|
||||||||||||||||
Less: Net Income attributable to HC2 Holdings Insurance segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64.1
|
|
|||||||||||||||||
Less: Consolidating eliminations attributable to HC2 Holdings Insurance segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5.5
|
)
|
|||||||||||||||||
Net Income (loss) attributable to HC2 Holdings, Inc., excluding Insurance segment
|
|
$
|
11.0
|
|
|
$
|
(4.5
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
1.0
|
|
|
$
|
(4.0
|
)
|
|
$
|
(7.9
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(46.1
|
)
|
|
$
|
(52.0
|
)
|
Adjustments to reconcile net income (loss) to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Depreciation and amortization
|
|
7.9
|
|
|
13.0
|
|
|
2.9
|
|
|
0.2
|
|
|
0.1
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
27.0
|
|
|||||||||
Depreciation and amortization (included in cost of revenue)
|
|
4.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|||||||||
Amortization of equity method fair value adjustment at acquisition
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|||||||||
Other operating (income) expenses
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
0.1
|
|
|
0.5
|
|
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|||||||||
Interest expense
|
|
4.7
|
|
|
2.1
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
34.0
|
|
|
45.6
|
|
|||||||||
Net loss on contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||||||||
Other (income) expense, net
|
|
0.2
|
|
|
(0.3
|
)
|
|
0.2
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.4
|
|
|
0.2
|
|
|
1.0
|
|
|
1.6
|
|
|||||||||
Foreign currency (gain) loss (included in cost of revenue)
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||||||
Income tax (benefit) expense
|
|
5.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
(2.5
|
)
|
|
2.8
|
|
|||||||||
Noncontrolling interest
|
|
0.9
|
|
|
(1.6
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
(3.7
|
)
|
|||||||||
Share-based payment expense
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.4
|
|
|
—
|
|
|
2.5
|
|
|
3.8
|
|
|||||||||
Non-recurring costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Acquisition and disposition costs
|
|
1.3
|
|
|
0.7
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.6
|
|
|
3.1
|
|
|||||||||
Adjusted EBITDA
|
|
$
|
35.5
|
|
|
$
|
9.7
|
|
|
$
|
2.3
|
|
|
$
|
1.6
|
|
|
$
|
(4.7
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
—
|
|
|
$
|
(10.5
|
)
|
|
$
|
30.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total Core Operating Subsidiaries
|
|
$
|
49.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||||||||||||||
|
|
Core Operating Subsidiaries
|
|
Early Stage & Other
|
|
|
|
Total HC2
|
||||||||||||||||||||||||||||
|
Construction
|
Marine Services
|
|
Energy
|
|
Telecom
|
|
Life Sciences
|
|
Broadcasting
|
Other & Elimination
|
Non-operating Corporate
|
|
|||||||||||||||||||||||
Net Income attributable to HC2 Holdings, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20.4
|
|
||||||||||||||||
Less: Net Income attributable to HC2 Holdings Insurance segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.8
|
|
|||||||||||||||||
Less: Consolidating eliminations attributable to HC2 Holdings Insurance segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4.0
|
)
|
|||||||||||||||||
Net Income (loss) attributable to HC2 Holdings, Inc., excluding Insurance Segment
|
|
$
|
10.8
|
|
|
$
|
4.6
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
70.2
|
|
|
$
|
(24.5
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(39.9
|
)
|
|
$
|
22.6
|
|
Adjustments to reconcile net income (loss) to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Depreciation and amortization
|
|
3.2
|
|
|
13.3
|
|
|
2.7
|
|
|
0.2
|
|
|
0.1
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
20.9
|
|
|||||||||
Depreciation and amortization (included in cost of revenue)
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||||||
Amortization of equity method fair value adjustment at acquisition
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|||||||||
Other operating (income) expenses
|
|
0.4
|
|
|
(2.7
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|||||||||
Interest expense
|
|
0.9
|
|
|
2.5
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|
—
|
|
|
25.2
|
|
|
36.5
|
|
|||||||||
Loss on early extinguishment or restructuring of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|||||||||
Gain on sale and deconsolidation of subsidiary
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102.1
|
)
|
|||||||||
Other (income) expense, net
|
|
—
|
|
|
(1.0
|
)
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
|
(0.5
|
)
|
|
(1.1
|
)
|
|||||||||
Foreign currency (gain) loss (included in cost of revenue)
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|||||||||
Income tax (benefit) expense
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.5
|
)
|
|
4.4
|
|
|||||||||
Noncontrolling interest
|
|
0.9
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
19.9
|
|
|
(1.3
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
20.5
|
|
|||||||||
Bonus to be settled in equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|||||||||
Share-based payment expense
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.7
|
|
|
0.2
|
|
|
2.9
|
|
|
4.8
|
|
|||||||||
Non-recurring items
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Acquisition and disposition costs
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
2.5
|
|
|
2.6
|
|
|
—
|
|
|
0.4
|
|
|
6.5
|
|
|||||||||
Adjusted EBITDA
|
|
$
|
25.5
|
|
|
$
|
18.0
|
|
|
$
|
3.6
|
|
|
$
|
2.4
|
|
|
$
|
(9.2
|
)
|
|
$
|
(11.3
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(12.0
|
)
|
|
$
|
15.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total Core Operating Subsidiaries
|
|
$
|
49.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions):
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Construction
|
|
$
|
23.1
|
|
|
$
|
15.5
|
|
|
$
|
7.6
|
|
|
$
|
35.5
|
|
|
$
|
25.5
|
|
|
$
|
10.0
|
|
Marine Services
|
|
9.6
|
|
|
20.4
|
|
|
(10.8
|
)
|
|
9.7
|
|
|
18.0
|
|
|
(8.3
|
)
|
||||||
Energy
|
|
1.3
|
|
|
3.0
|
|
|
(1.7
|
)
|
|
2.3
|
|
|
3.6
|
|
|
(1.3
|
)
|
||||||
Telecommunications
|
|
0.8
|
|
|
1.3
|
|
|
(0.5
|
)
|
|
1.6
|
|
|
2.4
|
|
|
(0.8
|
)
|
||||||
Total Core Operating Subsidiaries
|
|
34.8
|
|
|
40.2
|
|
|
(5.4
|
)
|
|
49.1
|
|
|
49.5
|
|
|
(0.4
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Life Sciences
|
|
(1.8
|
)
|
|
(4.8
|
)
|
|
3.0
|
|
|
(4.7
|
)
|
|
(9.2
|
)
|
|
4.5
|
|
||||||
Broadcasting
|
|
(0.9
|
)
|
|
(6.3
|
)
|
|
5.4
|
|
|
(3.4
|
)
|
|
(11.3
|
)
|
|
7.9
|
|
||||||
Other and Eliminations
|
|
—
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
—
|
|
|
(1.2
|
)
|
|
1.2
|
|
||||||
Total Early Stage and Other
|
|
(2.7
|
)
|
|
(12.1
|
)
|
|
9.4
|
|
|
(8.1
|
)
|
|
(21.7
|
)
|
|
13.6
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-Operating Corporate
|
|
(4.4
|
)
|
|
(5.4
|
)
|
|
1.0
|
|
|
(10.5
|
)
|
|
(12.0
|
)
|
|
1.5
|
|
||||||
Adjusted EBITDA
|
|
$
|
27.7
|
|
|
$
|
22.7
|
|
|
$
|
5.0
|
|
|
$
|
30.5
|
|
|
$
|
15.8
|
|
|
$
|
14.7
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||||||||
Net income (loss) - Insurance segment
|
|
$
|
30.3
|
|
|
$
|
0.6
|
|
|
$
|
29.7
|
|
|
$
|
64.1
|
|
|
$
|
1.8
|
|
|
$
|
62.3
|
|
Effect of investment (gains)
(1)
|
|
0.5
|
|
|
(4.5
|
)
|
|
5.0
|
|
|
(5.5
|
)
|
|
(7.0
|
)
|
|
1.5
|
|
||||||
Bargain Purchase Gain
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
||||||
Acquisition costs
|
|
1.6
|
|
|
0.8
|
|
|
0.8
|
|
|
1.8
|
|
|
1.1
|
|
|
0.7
|
|
||||||
Insurance AOI
|
|
31.3
|
|
|
(3.1
|
)
|
|
34.4
|
|
|
59.3
|
|
|
(4.1
|
)
|
|
63.4
|
|
||||||
Income tax expense (benefit)
|
|
1.7
|
|
|
3.6
|
|
|
(1.9
|
)
|
|
2.4
|
|
|
6.8
|
|
|
(4.4
|
)
|
||||||
Pre-tax Insurance AOI
|
|
$
|
33.0
|
|
|
$
|
0.5
|
|
|
$
|
32.5
|
|
|
$
|
61.7
|
|
|
$
|
2.7
|
|
|
$
|
59.0
|
|
|
|
Six Months Ended June 30,
|
Increase / (Decrease)
|
|||||||||
|
|
2019
|
|
2018
|
|
|||||||
Operating activities
|
|
$
|
36.8
|
|
|
$
|
(41.2
|
)
|
|
$
|
78.0
|
|
Investing activities
|
|
(154.6
|
)
|
|
16.4
|
|
|
(171.0
|
)
|
|||
Financing activities
|
|
69.0
|
|
|
43.1
|
|
|
25.9
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
0.3
|
|
|
(0.3
|
)
|
|
0.6
|
|
|||
Net decrease in cash,cash equivalents and restricted cash
|
|
$
|
(48.5
|
)
|
|
$
|
18.0
|
|
|
$
|
(66.5
|
)
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Measurement Alternative
|
|
Equity
Method |
|
Measurement Alternative
|
|
Equity
Method |
||||||||
Common Equity
|
|
$
|
—
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
Preferred Equity
|
|
—
|
|
|
8.0
|
|
|
1.6
|
|
|
9.6
|
|
||||
Other
|
|
—
|
|
|
60.8
|
|
|
—
|
|
|
59.2
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
71.1
|
|
|
$
|
1.6
|
|
|
$
|
70.9
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
|
|
Fair Value
|
|
Percent
|
|
Fair Value
|
|
Percent
|
||||||
U.S. Government and government agencies
|
|
$
|
18.5
|
|
|
0.4
|
%
|
|
$
|
25.4
|
|
|
0.7
|
%
|
States, municipalities and political subdivisions
|
|
442.5
|
|
|
10.5
|
%
|
|
421.9
|
|
|
11.0
|
%
|
||
Residential mortgage-backed securities
|
|
80.1
|
|
|
1.9
|
%
|
|
94.4
|
|
|
2.5
|
%
|
||
Commercial mortgage-backed securities
|
|
106.4
|
|
|
2.5
|
%
|
|
93.9
|
|
|
2.5
|
%
|
||
Asset-backed securities
|
|
526.2
|
|
|
12.5
|
%
|
|
511.5
|
|
|
13.4
|
%
|
||
Corporate and other
(*)
|
|
2,656.1
|
|
|
63.0
|
%
|
|
2,250.5
|
|
|
58.8
|
%
|
||
Common stocks
(*)
|
|
36.3
|
|
|
0.9
|
%
|
|
25.5
|
|
|
0.7
|
%
|
||
Perpetual preferred stocks
|
|
176.4
|
|
|
4.2
|
%
|
|
240.9
|
|
|
6.3
|
%
|
||
Mortgage loans
|
|
151.8
|
|
|
3.6
|
%
|
|
137.6
|
|
|
3.6
|
%
|
||
Policy loans
|
|
19.4
|
|
|
0.5
|
%
|
|
19.8
|
|
|
0.5
|
%
|
||
Other invested assets
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
|
$
|
4,213.7
|
|
|
100.0
|
%
|
|
$
|
3,821.4
|
|
|
100.0
|
%
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
|
|
Fair Value
|
|
Percent
|
|
Fair Value
|
|
Percent
|
||||||
AAA, AA, A
|
|
$
|
1,914.3
|
|
|
49.8
|
%
|
|
$
|
1,742.4
|
|
|
51.4
|
%
|
BBB
|
|
1,676.2
|
|
|
43.8
|
%
|
|
1,444.1
|
|
|
42.5
|
%
|
||
Total investment grade
|
|
3,590.5
|
|
|
93.6
|
%
|
|
3,186.5
|
|
|
93.9
|
%
|
||
BB
|
|
167.2
|
|
|
4.4
|
%
|
|
143.8
|
|
|
4.2
|
%
|
||
B
|
|
17.8
|
|
|
0.5
|
%
|
|
14.7
|
|
|
0.4
|
%
|
||
CCC, CC, C
|
|
40.8
|
|
|
1.1
|
%
|
|
44.4
|
|
|
1.3
|
%
|
||
D
|
|
13.5
|
|
|
0.4
|
%
|
|
8.2
|
|
|
0.2
|
%
|
||
Total non-investment grade
|
|
239.3
|
|
|
6.4
|
%
|
|
211.1
|
|
|
6.1
|
%
|
||
Total
|
|
$
|
3,829.8
|
|
|
100.0
|
%
|
|
$
|
3,397.6
|
|
|
100.0
|
%
|
•
|
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;
|
•
|
our possible inability to generate sufficient liquidity, margins, earnings per share, cash flow and working capital from our operating segments;
|
•
|
our dependence on distributions from our subsidiaries to fund our operations and payments on our obligations;
|
•
|
the impact on our business and financial condition of our substantial indebtedness and the significant additional indebtedness and other financing obligations we may incur;
|
•
|
the impact of covenants in the Indenture governing HC2’s Notes, the Certificates of Designation governing HC2’s Preferred Stock and all other subsidiary debt obligations as summarized in Note
13. Debt Obligations
and future financing agreements on our ability to operate our business and finance our pursuit of acquisition opportunities;
|
•
|
our dependence on certain key personnel, in particular, our Chief Executive Officer, Philip Falcone;
|
•
|
uncertain global economic conditions in the markets in which our operating segments conduct their businesses;
|
•
|
the ability of our operating segments to attract and retain customers;
|
•
|
increased competition in the markets in which our operating segments conduct their businesses;
|
•
|
our expectations regarding the timing, extent and effectiveness of our cost reduction initiatives and management’s ability to moderate or control discretionary spending;
|
•
|
management’s plans, goals, forecasts, expectations, guidance, objectives, strategies and timing for future operations, acquisitions, synergies, asset dispositions, fixed asset and goodwill impairment charges, tax and withholding expense, selling, general and administrative expenses, product plans, performance and results;
|
•
|
management’s assessment of market factors and competitive developments, including pricing actions and regulatory rulings;
|
•
|
the impact of additional material charges associated with our oversight of acquired or target businesses and the integration of our financial reporting;
|
•
|
the impact of expending significant resources in considering acquisition targets or business opportunities that are not consummated;
|
•
|
our expectations and timing with respect to our ordinary course acquisition activity and whether such acquisitions are accretive or dilutive to stockholders;
|
•
|
our expectations and timing with respect to any strategic dispositions and sales of our operating subsidiaries including GMSL, or businesses that we may make in the future and the effect of any such dispositions or sales on our results of operations;
|
•
|
our expectations and timing with respect to any strategic dispositions and sales of our operating subsidiaries or businesses that we may make in the
future and the effect of any such dispositions or sales on our results of operations;
|
•
|
the possibility of indemnification claims arising out of divestitures of businesses;
|
•
|
tax consequences associated with our acquisition, holding and disposition of target companies and assets;
|
•
|
the effect any interests our officers, directors, stockholders and their respective affiliates may have in certain transactions in which we are involved;
|
•
|
our ability to effectively increase the size of our organization, if needed, and manage our growth;
|
•
|
the potential for, and our ability to, remediate future material weaknesses in our internal controls over financial reporting;
|
•
|
our possible inability to raise additional capital when needed or refinance our existing debt, on attractive terms, or at all; and
|
•
|
our possible inability to hire and retain qualified executive management, sales, technical and other personnel.
|
•
|
its ability to realize cost savings from expected performance of contracts, whether as a result of improper estimates, performance, or otherwise;
|
•
|
potential impediments and limitations on our ability to complete ordinary course acquisitions in anticipated time frames or at all;
|
•
|
uncertain timing and funding of new contract awards, as well as project cancellations;
|
•
|
cost overruns on fixed-price or similar contracts or failure to receive timely or proper payments on cost-reimbursable contracts, whether as a result of improper estimates, performance, disputes, or otherwise;
|
•
|
risks associated with labor productivity, including performance of subcontractors that DBMG hires to complete projects;
|
•
|
its ability to settle or negotiate unapproved change orders and claims;
|
•
|
changes in the costs or availability of, or delivery schedule for, equipment, components, materials, labor or subcontractors;
|
•
|
adverse impacts from weather affecting DBMG’s performance and timeliness of completion of projects, which could lead to increased costs and affect the quality, costs or availability of, or delivery schedule for, equipment, components, materials, labor or subcontractors;
|
•
|
fluctuating revenue resulting from a number of factors, including the cyclical nature of the individual markets in which our customers operate;
|
•
|
adverse outcomes of pending claims or litigation or the possibility of new claims or litigation, and the potential effect of such claims or litigation on DBMG’s business, financial condition, results of operations or cash flow; and
|
•
|
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.
|
•
|
its ability to realize cost savings from expected performance of contracts, whether as a result of improper estimates, performance, or otherwise;
|
•
|
the possibility of global recession or market downturn with a reduction in capital spending within the targeted market segments in which the business operates;
|
•
|
project implementation issues and possible subsequent overruns;
|
•
|
risks associated with operating outside of core competencies when moving into different market segments;
|
•
|
possible loss or severe damage to marine assets;
|
•
|
vessel equipment aging or reduced reliability;
|
•
|
risks associated with two equity method investments that operate in China (i.e., Huawei Marine Systems Co. Limited, a Hong Kong holding company with a Chinese operating subsidiary and SB Submarine Systems Co. Ltd.);
|
•
|
risks related to noncompliance with a wide variety of anti-corruption laws;
|
•
|
changes to the local laws and regulatory environment in different geographical regions;
|
•
|
loss of key senior employees;
|
•
|
difficulties attracting enough skilled technical personnel;
|
•
|
foreign exchange rate risk;
|
•
|
liquidity risk; and
|
•
|
potential for financial loss arising from the failure by customers to fulfill their obligations as and when these obligations come due.
|
•
|
automobile and engine manufacturers’ limited production of originally manufactured natural gas vehicles and engines for the markets in which ANG participates;
|
•
|
environmental regulations and programs mandating the use of cleaner burning fuels;
|
•
|
competition from oil and gas companies, retail fuel providers, industrial gas companies, natural gas utilities and other organizations;
|
•
|
the infrastructure for natural gas vehicle fuels;
|
•
|
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;
|
•
|
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;
|
•
|
demand for natural gas vehicles;
|
•
|
advances in other alternative vehicle fuels or technologies, or improvements in gasoline, diesel or hybrid engines; and
|
•
|
increases, decreases and general volatility in oil, gasoline, diesel and natural gas prices.
|
•
|
our expectations regarding increased competition, pricing pressures and usage patterns with respect to ICS’s product offerings;
|
•
|
significant changes in ICS’s competitive environment, including as a result of industry consolidation, and the effect of competition in its markets, including pricing policies;
|
•
|
its compliance with complex laws and regulations in the U.S. and internationally;
|
•
|
further changes in the telecommunications industry, including rapid technological, regulatory and pricing changes in its principal markets; and
|
•
|
an inability of ICS’ suppliers to obtain credit insurance on ICS in determining whether or not to extend credit.
|
•
|
our Insurance segment’s ability to maintain statutory capital and maintain or improve their financial strength;
|
•
|
our Insurance segment’s reserve adequacy, including the effect of changes to accounting or actuarial assumptions or methodologies;
|
•
|
the accuracy of our Insurance segment’s assumptions and estimates regarding future events and ability to respond effectively to such events, including mortality, morbidity, persistency, expenses, interest rates, tax liability, business mix, frequency of claims, severity of claims, contingent liabilities, investment performance, and other factors related to its business and anticipated results;
|
•
|
availability, affordability and adequacy of reinsurance and credit risk associated with reinsurance;
|
•
|
extensive regulation and numerous legal restrictions on our Insurance segment;
|
•
|
our Insurance segment’s ability to defend itself against litigation, inherent in the insurance business (including class action litigation) and respond to enforcement investigations or regulatory scrutiny;
|
•
|
the performance of third parties, including distributors and technology service providers, and providers of outsourced services;
|
•
|
the impact of changes in accounting and reporting standards;
|
•
|
our Insurance segment’s ability to protect its intellectual property;
|
•
|
general economic conditions and other factors, including prevailing interest and unemployment rate levels and stock and credit market performance which may affect, among other things, our Insurance segment’s ability to access capital resources and the costs associated therewith, the fair value of our Insurance segment’s investments, which could result in impairments and other-than-temporary impairments, and certain liabilities;
|
•
|
our Insurance segment’s exposure to any particular sector of the economy or type of asset through concentrations in its investment portfolio;
|
•
|
the ability to increase sufficiently, and in a timely manner, premiums on in-force long-term care insurance policies and/or reduce in-force benefits, as may be required from time to time in the future (including as a result of our Insurance segment’s failure to obtain any necessary regulatory approvals or unwillingness or inability of policyholders to pay increased premiums);
|
•
|
other regulatory changes or actions, including those relating to regulation of financial services affecting, among other things, regulation of the sale, underwriting and pricing of products, and minimum capitalization, risk-based capital and statutory reserve requirements for our Insurance segment, and our Insurance segment’s ability to mitigate such requirements;
|
•
|
our Insurance segment’s ability to effectively implement its business strategy or be successful in the operation of its business;
|
•
|
our Insurance segment’s ability to retain, attract and motivate qualified employees;
|
•
|
interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data residing on such systems;
|
•
|
medical advances, such as genetic research and diagnostic imaging, and related legislation; and
|
•
|
the occurrence of natural or man-made disasters or a pandemic.
|
•
|
our Life Sciences segment’s ability to invest in development stage companies;
|
•
|
our Life Sciences segment’s ability to develop products and treatments related to its portfolio companies;
|
•
|
medical advances in healthcare and biotechnology; and
|
•
|
governmental regulation in the healthcare industry.
|
•
|
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;
|
•
|
new and growing sources of competition in the broadcasting industry; and
|
•
|
FCC regulation of the television broadcasting industry.
|
•
|
our Other segment’s ability to operate in highly competitive markets and maintain market share; and
|
•
|
our Other segment’s ability to effectively implement its business strategy or be successful in the operation of its business.
|
|
|
Decline in equity market prices
|
||||||||||
|
|
10%
|
|
20%
|
|
30%
|
||||||
Fixed Maturity Securities
|
|
$
|
381.3
|
|
|
$
|
762.5
|
|
|
$
|
1,143.8
|
|
Equity Securities
|
|
$
|
14.3
|
|
|
$
|
28.6
|
|
|
$
|
43.0
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32*
|
|
|
|
|
|
101
|
|
The following materials from the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2019, formatted in extensible business reporting language (XBRL); (i) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018, (ii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2019 and 2018 (iii) Condensed Consolidated Balance Sheets at June 30, 2019 and December 31, 2018, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2019 and 2018, (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018, and (vi) Notes to Condensed Consolidated Financial Statements (filed herewith).
|
*
|
These certifications are being "furnished" and will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
|
|
|
|
|
|
HC2 Holdings, Inc.
|
|
|
|
|
Date: August 8, 2019
|
By:
|
/s/ Michael J. Sena
|
|
|
Michael J. Sena
|
|
|
Chief Financial Officer
|
|
|
(Duly Authorized Officer and Principal Financial and Accounting Officer)
|
(a)
|
All FCC Licenses and all proceeds from the sale, lease, assignment or transfer of such FCC Licenses to a third party to the fullest extent that the creation of a security interest in any such FCC License would be permitted by applicable Law as in effect in any applicable jurisdiction, including after giving effect to Section 9-408 of the Uniform Commercial Code as in effect in any applicable jurisdiction;
|
(b)
|
all accounts, chattel paper, deposit accounts, documents, equipment, general intangibles, payment intangibles, software, commercial tort claims, instruments, inventory, investment property, letter of credit rights, letters of credit, money and any supporting obligations related to any of the foregoing (each as defined in the Uniform Commercial Code of the State of New York (“
UCC
”));
|
(c)
|
all books and records pertaining to the property described in this
Section
;
|
(d)
|
all Intellectual Property pertaining to the property described in this
Section
; and
|
(e)
|
to the extent not otherwise included, all proceeds of the foregoing in whatever form, including, without limitation any insurance, indemnity, warranty or guaranty payable with respect to any Additional Collateral, any awards or payments due or payable in connection with any condemnation, requisition, confiscation, seizure or forfeiture of any Additional Collateral by any person acting under Governmental Authority or color thereof, and any damages or other amounts payable to Borrowers in connection with any lawsuit regarding any of the Additional Collateral.
|
6.1
|
Grant
. The Parent Borrower, as collateral security for the prompt and complete payment and performance when due of the obligations of the Borrowers hereunder, whether now existing or hereafter incurred, matured or unmatured, direct or indirect, primary or secondary or due or to become due, hereby grants to the Lenders a lien on and security interest in all of Parent Borrower’s right, title and interest, whether now owned or hereafter acquired, in the Pledged Stock. Each Subsidiary Borrower, as collateral security for the prompt and complete payment and performance when due of the obligations of the Borrowers hereunder, whether now existing or hereafter incurred, matured or unmatured, direct or indirect, primary or secondary or due or to become due, hereby grants to the Lenders a lien on and security interest in, all of such Subsidiary Borrower’s right, title and interest in, to and under the Additional Collateral, whether now owned or hereafter acquired.
|
6.1
|
Grant
. Subject to the Agreement Re: Secured Notes, the Parent Borrower, as collateral security for the prompt and complete payment and performance when due of the obligations of the Borrowers hereunder, whether now existing or hereafter incurred, matured or unmatured, direct or indirect, primary or secondary or due or to become due, hereby grants to the Lenders a lien on and security interest in all of Parent Borrower’s right, title and interest, whether now owned or hereafter acquired, in the Pledged Stock. Subject to the Agreement Re: Secured Notes, each Subsidiary Borrower, as collateral security for the prompt and complete payment and performance when due of the obligations of the Borrowers hereunder, whether now existing or hereafter incurred, matured or unmatured, direct or indirect, primary or secondary or due or to become due, hereby grants to the Lender a lien on and security interest in, all of such Subsidiary Borrower’s right, title and interest in, to and under the Additional Collateral, whether now owned or hereafter acquired.
|
(1)
|
DTV America Corp., et al.
, Order and Consent Decree, 32 FCC Rcd 9129 (MB Oct. 31, 2017);
1
|
(2)
|
Mako Communications LLC
, Order and Consent Decree, 31 FCC Rcd 112 (MB Jan. 13, 2016);
2
|
(3)
|
Una Vez Mas Las Vegas License, LLC Licensee of KHDF-CA, Las Vegas, NV Facility Id No. 66807
, Forfeiture Order, 22 FCC Rcd 6355 (EB Mar. 28, 2007).
3
|
1
|
The Parties to the Order and Consent Decree include DTV America Corporation, King Forward, Inc., Tiger Eye Broadcasting Corporation, and Tiger Eye Licensing, LLC, as licensees, and HC2 Broadcasting Inc. and HC2 Broadcasting License Inc., as proposed assignees/transferees and successors-in-interest. The Parties agreed to implement a compliance plan for three years (
i.e.
until October 31, 2020). The FCC authorizations subject to the Consent Decree are listed in Appendix A to the Consent Decree.
|
2
|
Mako Communications LLC (“
Mako
”), predecessor-in-interest to HC2 LPTV Station Group, entered into a Consent Decree with the FCC’s Media Bureau to resolve alleged violations of the FCC’s public inspection file rules by station KNBX-CD (FID 33819). Mako and its successors-in-interest agreed to implement a compliance plan for two years (
i.e.
, until January 13, 2018) under the terms of the Consent Decree. The requirements of this Order and Consent Decree have likely been satisfied or expired but are noted here out of an abundance of caution.
|
3
|
The FCC found Una Vez Mas Las Vegas License, LLC, predecessor-in-interest to HC2 Station Group, liable for a monetary forfeiture in the amount of $6,400 for willful and repeated violation of section 73.3526 of the FCC’s rules by KHDF-CA (FID 66807). The requirements of this Order and Consent Decree have likely been satisfied or expired but are noted here out of an abundance of caution.
|
(f)
|
permit or cause the sale of any assets of such Borrower or its subsidiaries, except (i) as set forth on
Schedule 7.2(e)
hereto, (ii) as permitted by
Section 7.2(g)
or (iii) for sales of any such assets not constituting Collateral in a single transaction or series of related transactions with a fair market value not to exceed $2,500,000;
|
1.
|
US $35,000,000 secured note, dated as of August 7, 2018, among the Borrowers and the Initial Lenders (as amended by the Agreement Re: Secured Notes, the “
$35,000,000 Secured Note
”).
|
2.
|
US $7,500,000 secured note, dated as of January 22, 2019, among the Borrowers and the Initial Lenders (the “
$7,500,000 Secured Note
” and, together with the $35,000,000 Secured Note, the “
Great American Secured Notes
”).
|
3.
|
US $700,000 secured note, dated as of April 1, 2019, among the Borrowers and MBI (the “
$700,000 Secured Note
”).
|
4.
|
US $10,750,000 secured note, dated as of the date hereof, among the Borrowers and the First-Out Lender (the “
First-Out Secured Note
” and, together with the $35,000,000 Secured Note, the $7,500,000 Secured Note and the $700,000 Secured Note, the “
Secured Notes
”).
|
(1)
|
DTV America Corp., et al.
, Order and Consent Decree, 32 FCC Rcd 9129 (MB Oct. 31, 2017);
1
|
(2)
|
Mako Communications LLC
, Order and Consent Decree, 31 FCC Rcd 112 (MB Jan. 13, 2016);
2
|
(3)
|
Una Vez Mas Las Vegas License, LLC Licensee of KHDF-CA, Las Vegas, NV Facility Id No. 66807
, Forfeiture Order, 22 FCC Rcd 6355 (EB Mar. 28, 2007).
3
|
1
|
The Parties to the Order and Consent Decree include DTV America Corporation, King Forward, Inc., Tiger Eye Broadcasting Corporation, and Tiger Eye Licensing, LLC, as licensees, and HC2 Broadcasting Inc. and HC2 Broadcasting License Inc., as proposed assignees/transferees and successors-in-interest. The Parties agreed to implement a compliance plan for three years (
i.e.
until October 31, 2020). The FCC authorizations subject to the Consent Decree are listed in Appendix A to the Consent Decree.
|
2
|
Mako Communications LLC (“
Mako
”), predecessor-in-interest to HC2 LPTV Station Group, entered into a Consent Decree with the FCC’s Media Bureau to resolve alleged violations of the FCC’s public inspection file rules by station KNBX-CD (FID 33819). Mako and its successors-in-interest agreed to implement a compliance plan for two years (
i.e.
, until January 13, 2018) under the terms of the Consent Decree. The requirements of this Order and Consent Decree have likely been satisfied or expired but are noted here out of an abundance of caution.
|
3
|
The FCC found Una Vez Mas Las Vegas License, LLC, predecessor-in-interest to HC2 Station Group, liable for a monetary forfeiture in the amount of $6,400 for willful and repeated violation of section 73.3526 of the FCC’s rules by KHDF-CA (FID 66807). The requirements of this Order and Consent Decree have likely been satisfied or expired but are noted here out of an abundance of caution.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of HC2 Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: August 8, 2019
|
By:
|
/s/ Philip A. Falcone
|
|
|
|
Name:
|
Philip A. Falcone
|
|
|
Title:
|
Chairman, President and Chief Executive
|
|
|
|
Officer (Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of HC2 Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: August 8, 2019
|
By:
|
/s/ Michael J. Sena
|
|
|
|
Name:
|
Michael J. Sena
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
/s/ Philip A. Falcone
|
|
|
/s/ Michael J. Sena
|
Philip A. Falcone
|
|
|
Michael J. Sena
|
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|