20. Operating Segment and Related Information

The Company currently has two primary reportable geographic segments - United States and United Kingdom. The Company has eight reportable operating segments based on management’s organization of the enterprise - Construction, Marine Services, Energy, Telecommunications, Insurance, Life Sciences, Broadcasting, Other, and a Non-operating Corporate segment. Net revenue and long-lived assets by geographic segment is reported on the basis of where the entity is domiciled. All inter-segment revenues are eliminated. The Company's revenue concentrations of 10% and greater are as follows:



		Three Months Ended September 30,		Nine Months Ended September 30,
	Segment	2018	2017	2018	2017
Customer A	Telecommunications	11.6%	*	11.4%	*

* Less than 10% revenue concentration

Summary information with respect to the Company’s geographic and operating segments is as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net Revenue by Geographic Region
United States	$	450,165	$	358,743	$	1,285,578	$	1,039,252
United Kingdom	45,068		42,233		146,866		112,958
Other	6,123		5,433		19,381		23,419
Total	$	501,356	$	406,409	$	1,451,825	$	1,175,629



	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Net revenue
Construction	$	195,358		$	151,697	$	531,209		$	403,325
Marine Services	44,825			42,817		149,923			123,382
Energy	4,561			3,919		16,141			12,301
Telecommunications	187,798			167,881		580,630			520,214
Insurance	77,229			37,737		161,179			112,032
Broadcasting	11,957			—		33,702			—
Other	271			2,358		3,680			4,375
Eliminations ⁽¹⁾	(20,643		)	—		(24,639		)	—
Total net revenue	$	501,356		$	406,409	$	1,451,825		$	1,175,629

⁽¹⁾ The Insurance segment revenues are inclusive of mark-to-market adjustments in the amount of $20.6 million and $24.6 million for the three and nine months ended September 30, 2018 respectively, recorded on equity securities in accordance with ASU 2016-01. Such adjustments are related to transactions between entities under common control which are eliminated or are reclassified to Other income (expenses), net in consolidation.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017

(Loss) income from operations
Construction	$	12,475		$	12,198		$	30,348		$	25,911
Marine Services	(8,515		)	(181		)	(8,519		)	(1,726		)
Energy	(356		)	(1,161		)	505			(1,784		)
Telecommunications	1,281			1,374			3,413			5,023
Insurance	7,539			17,476			14,488			20,704
Life Sciences	(2,221		)	(6,437		)	(12,017		)	(13,167		)
Broadcasting	(5,328		)	—			(21,393		)	—
Other	(993		)	(1,383		)	(2,420		)	(7,164		)
Non-operating Corporate	(7,591		)	(11,321		)	(23,395		)	(27,455		)
Eliminations⁽¹⁾	(20,643		)	—			(24,639		)	—
Total (loss) income from operations	$	(24,352	)	$	10,565		$	(43,629	)	$	342

A reconciliation of the Company's consolidated segment operating income to consolidated earnings before income taxes is as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
(Loss) income from operations	$	(24,352	)	$	10,565		$	(43,629	)	$	342
Interest expense	(17,456		)	(13,222		)	(53,962		)	(39,410		)
Gain on sale and deconsolidation of subsidiary	2,965			—			105,106			—
Gain on contingent consideration	—			6,320			—			6,001
Income from equity investees	8,134			971			13,655			12,667
Gain on bargain purchase	109,112			—			109,112			—
Other income (expenses), net	63,908			(97		)	64,032			(8,112		)
Income (loss) from continuing operations before income taxes	142,311			4,537			194,314			(28,512		)
Income tax benefit (expense)	9,230			(12,861		)	(1,863		)	(16,167		)
Net income (loss)	151,541			(8,324		)	192,451			(44,679		)
Less: Net (income) loss attributable to noncontrolling interest and redeemable noncontrolling interest	1,925			2,357			(18,615		)	6,305
Net income (loss) attributable to HC2 Holdings, Inc.	153,466			(5,967		)	173,836			(38,374		)
Less: Preferred stock and deemed dividends from conversions	703			703			2,109			2,079
Net income (loss) attributable to common stock and participating preferred stockholders	$	152,763		$	(6,670	)	$	171,727		$	(40,453	)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Depreciation and Amortization
Construction	$	1,851		$	1,314		$	5,043		$	4,194
Marine Services	6,853			6,221			20,110			16,561
Energy	1,389			1,247			4,092			3,876
Telecommunications	89			94			262			285
Insurance ⁽²⁾	(4,820		)	(1,319		)	(7,074		)	(3,440		)
Life Sciences	35			50			146			129
Broadcasting	827			—			2,275			—
Other	11			272			53			933
Non-operating Corporate	21			17			62			50
Total	$	6,256		$	7,896		$	24,969		$	22,588

⁽²⁾ Balance includes amortization of negative VOBA, which increases net income.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Capital Expenditures ⁽³⁾
Construction	$	6,594	$	2,517	$	10,756	$	9,729
Marine Services	4,707		3,463		18,806		8,195
Energy	274		2,099		1,486		6,540
Telecommunications	13		7		120		47
Insurance	—		—		273		383
Life Sciences	—		197		50		395
Broadcasting	449		—		736		—
Other	9		4		17		17
Non-operating Corporate	10		18		46		18
Total	$	12,056	$	8,305	$	32,290	$	25,324

⁽³⁾The above capital expenditures exclude assets acquired under terms of capital lease and vendor financing obligations.



	September 30,			December 31,
	2018			2017
Investments
Construction	$	146		$	250
Marine Services	56,259			66,322
Insurance	3,319,123			1,493,589
Life Sciences	16,144			17,771
Other	6,312			1,518
Eliminations	(16,791		)	(35,852		)
Total	$	3,381,193		$	1,543,598



	September 30,		December 31,
	2018		2017
Property, Plant and Equipment—Net
United States	$	161,235	$	162,788
United Kingdom	202,847		204,866
Other	5,689		7,006
Total	$	369,771	$	374,660



	September 30,			December 31,
	2018			2017
Total Assets
Construction	$	409,987		$	342,806
Marine Services	394,175			389,500
Energy	79,563			83,607
Telecommunications	105,910			114,445
Insurance	5,480,165			2,117,045
Life Sciences	36,466			31,485
Broadcasting	184,353			136,690
Other	6,320			2,674
Non-operating Corporate	55,849			35,291
Eliminations	(22,791		)	(35,852		)
Total	$	6,729,997		$	3,217,691