Greetings. Welcome to HC2 Holdings, Inc. Second Quarter 2020 Earnings Call. [Operator Instructions]. I will now turn the conference over to your host, Garrett Edson of ICR. Thank you. You may begin.

Thank you, and good afternoon. We'd like to thank you for joining us to review HC2's Second Quarter 2020 Earnings Results. With me today are Wayne Barr, Interim CEO of HC2; and Mike Sena, HC2's Chief Financial Officer. This afternoon's call is being webcast on our website at HC2.com in the Investor Relations section. We also invite you to follow along with our webcast presentation, which can be accessed on HC2's website, again, in the IR section. A replay of this call will be available approximately 1 hour after the call. The dial-in for the replay is 1-844-512-2921 with the confirmation code of 13707250. Before I turn the call over to Wayne, I'd like to remind everyone that certain statements and assumptions in this earnings call, which are not historical facts, will be forward-looking and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, among others, statements related to the expected or potential impact of the novel coronavirus, COVID-19 pandemic and the related responses of the government and HC2 on our business, financial condition and results of operations and any such forward-looking statements, whether concerning the COVID-19, pandemic or otherwise, involve risks, assumptions and uncertainties. These forward-looking statements are subject to certain assumptions and risk factors that could cause HC2's actual results to differ materially from these forward-looking statements. The risk factors that could cause these differences are more fully discussed in our filings with the SEC. In addition, the forward-looking statements included in this conference call are only made as of the date of this call and are as stated in our SEC reports. HC2 disclaims any intent or obligation to update or revise these forward-looking statements except as expressly required by law. During the call, management will provide certain information that will constitute non-GAAP financial measures under the SEC rules, such as but not limited to, adjusted EBITDA, insurance, adjusted operating income and insurance pretax adjusted operating income. Certain information required to be disclosed about these non-GAAP measures, including reconciliations with the most comparable GAAP measures is available in the most recent earnings press release, which is also available on our website. And finally, as a reminder, this call cannot be taped or otherwise duplicated without the company's prior consent. Now I'd like to turn the call over to HC2's Interim CEO, Wayne Barr. Wayne?

Thanks, Garrett, and good afternoon, everyone. Thank you for joining us, and we hope you and your families continue to remain safe and healthy. I also want to give special thanks to all of our employees at HC2 and our subsidiaries who continue to work tirelessly during these very challenging times to serve all of our customers across our portfolio of businesses. Your efforts are greatly appreciated. Let me quickly introduce myself. I've been a director on HC2's Board since the inception of the company. Since taking on the additional role of interim CEO, I've had the opportunity to catch up with our entire corporate management team as well as all of our subsidiaries. We have a business that has great potential to unlock significant value, and I look forward to working with the team in this role and continuing to contribute to HC2's long-term success. On today's call, I'll walk through some second quarter highlights, discuss the continued impact of COVID and our strategies regarding our business, and address our efforts for completing a successful refinancing, which is key to setting us up for long-term success. Our CFO, Mike Sena, will then provide more details on our second quarter performance, and then we'll take some questions. Our second quarter was clearly impacted as the country was by the ongoing COVID-19 pandemic. That said, there were a number of bright spots for HC2 in the quarter, which are helping set the stage to execute further on our priorities of debt and overhead reduction. Starting with our Energy segment, the recently renamed [indiscernible] , which was formerly known as American Natural Energy, continues to perform very well, more than tripling its adjusted EBITDA, compared to the prior year period, aided by the Alternative Fuels Tax Credit and the additional 20 fueling…

Thank you, Wayne. Let's review our second quarter performance. Consolidated total net revenue for the second quarter 2020 was $377 million, compared to $479.2 million in the prior year period as revenue -- as lower revenues from the Telecommunications, Construction and Broadcasting segments as well as the Insurance segment, net of eliminations, were partially offset by an increase in revenue from Energy. In particular, Telecommunications revenue was down primarily due to normal variability and industry pressures. Net income attributable to common and participating preferred stockholders for the second quarter of 2020 was $12.7 million or $0.26 per share compared to net income of $9 million or $0.12 per share in the prior year period. Second quarter 2019 net income attributable to continuing operations was $0.24 per share. At the company's core operating subsidiaries, which comprises of HC2's Construction, Energy and Telecom segments, adjusted EBITDA for the second quarter of 2020 was $23.5 million compared to $25.2 million in the prior year period as improvements in Energy were more than offset by reduced contributions from Construction and Telecom. Total adjusted EBITDA, which excludes our Insurance segment, was $15.2 million in the second quarter of 2020 compared to adjusted EBITDA of $25.5 million in the prior year period. The difference in the adjusted EBITDA compared to the prior year period was driven by lower income at our other segment, which now includes equity income from the 19% piece of the HMN joint venture. The decline in the Other segment from the prior year period was due to lower profits at the HMN joint venture due timing of turnkey project work. Also contributing to the lower adjusted EBITDA was an increase in losses from our Life Sciences segment due primarily to R2, which increased spending from the comparable period to ramp up efforts…

[Operator Instructions]. Our first question is from Sarkis Sherbetchyan with B. Riley.

Just to start. So I guess trying to get some clarity on what segments or assets does the board and management view as core today? Or I suppose, strategic to HC2's operations from this point forward?

Sure. Sarkis, it's Wayne. So obviously, there can be different approaches as to in different views as to what is core and what isn't core, but I think the main thing to kind of think about is that there's just been the singular and kind of uniting at the Board and at the management around the commitment to kind of reduce the debt obviously and to reduce our corporate overhead and kind of -- and continuing along those lines, we're looking at all of the assets that we have. We're taking a fresh look from a Board perspective and making -- trying to make those determinations. And as soon as those decisions are made, we'll be announcing those paths forward, and we'll be getting back to you.

And for kind of the corporate level overhead, I think you had some comments on the prepared remarks. I guess if we look at the run rate of corporate overhead costs going forward, what should we kind of expect as both an opportunity and kind of the run rate from this point forward?

Yes. Sarkis, this is Mike. As you can see, we have been continuing to work down our corporate overheads. And this quarter, we continued on that trend. We're looking at everything across the Board to continue to push those down. I think that we're starting to get to a real level. So for the quarter, we were $3.6 million. And that is where we're at today, and we will continue to try and work to find ways to bring that number down over the next few quarters.

Got it. And in a recently filed proxy statement, there were some changes mentioned to the incentive comp program. I guess, moving from a bonus plan based on NAV to one that's maybe more so key business goals or objectives, I guess can you maybe specifically highlight what those objectives are over and above the obvious need to successfully refi the debt?

Yes. Well, for 2020, you hit the nail on the head. That is the key KPI that we're all operating to. And that is to get this debt refinanced. And so for 2020, while we've announced that we're moving away from the NAV and we are the KPI that we're focused on right now is the primary focus of the company across the Board, which is reducing the debt. We are working on what the bonus plan will look like for 2021. And when the compensation committee finishes its work, we'll be able to provide a much more fulsome description of that particular plan.

Got it. One more for me, and this more so relates to the Life Sciences portfolio asset. I think you mentioned kind of despite some of the challenges brought on from COVID that the R2 technology is likely to be for preorder here in 3Q and 4Q launch coming up, kind of want to understand what does that mean from either a operating expense standpoint for that division or maybe some target sales or kind of profit metrics that you guys can maybe share on that?

Yes. This is Mike, Sarkis. We don't really give guidance out as far as that goes. But they received the second tranche of their $10 million will continue to spend through that. That's to help them get through the launch here. And there's a ramp-up that's associated with launching the product. So I think right now, I would just focus on the spend through the $10 million.

[Operator Instructions]. Our next question is from Craig Carlozzi with Longfellow.

I was wondering if you could give us a holding company liquidity number as of, I guess, today, ideally and perhaps walk through some of the sources and uses for the remainder of 2020, just to bridge our level of comfort should any asset sales be delayed?

Sure. Thanks for the question. We've pulled up over $20 million to date through deck -- through today, which includes the $5 million dividend or $4.5 million that came to HC2 in August. We're working on various strategic options to generate liquidity. However, to the extent those strategic options take longer than expected. We do have the ability to provide liquidity for the remainder of the year, and we're comfortable there. Our sources of cash, of course, are continued our overhead costs and along with our interest payment in December.

Are you willing to disclose the liquidity today at the holding company?

Well, we have the -- we've disclosed our cash at June 30, which was just under $1 million. We received the $4.5 million from DBM, and we have the ability to pull additional $25 million of liquidity through the end of the year.

We have reached the end of our question-and-answer session. I would like to turn the conference back over to Wayne for closing remarks.

Thank you. I'd like to thank everybody for joining us this afternoon. And hope that you stay tuned for some exciting things that they're on the horizon for HC2 and hope that you and your families are staying safe through the pandemic. Have a nice evening.

Thank you. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.