falsedesktopMTZ2020-09-30000001561520000032{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☑\tAccelerated filer\t☐\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "\t\tPage\nPart I. FINANCIAL INFORMATION\t\t3\nItem 1\tFinancial Statements (Unaudited)\t3\n\tConsolidated Statements of Operations\t3\n\tConsolidated Statements of Comprehensive Income\t4\n\tConsolidated Balance Sheets\t5\n\tConsolidated Statements of Equity\t6\n\tConsolidated Statements of Cash Flows\t8\n\tNotes to Consolidated Financial Statements (Unaudited)\t9\nItem 2\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t26\nItem 3\tQuantitative and Qualitative Disclosures About Market Risk\t38\nItem 4\tControls and Procedures\t39\nPart II. OTHER INFORMATION\t\t40\nItem 1\tLegal Proceedings\t40\nItem 1A\tRisk Factors\t40\nItem 2\tUnregistered Sales of Equity Securities and Use of Proceeds\t41\nItem 4\tMine Safety Disclosures\t41\nItem 6\tExhibits\t41\nSIGNATURES\t\t42\n", "q10k_tbl_2": "\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRevenue\t1698279\t2016618\t4684180\t5473965\nCosts of revenue excluding depreciation and amortization\t1380522\t1690558\t3948644\t4636006\nDepreciation\t71397\t50515\t182173\t160019\nAmortization of intangible assets\t11200\t4681\t28384\t14152\nGeneral and administrative expenses\t72690\t77146\t243163\t220581\nInterest expense net\t13553\t19297\t45365\t58178\nEquity in earnings of unconsolidated affiliates\t(7445)\t(6966)\t(22092)\t(19778)\nLoss on extinguishment of debt\t5569\t0\t5569\t0\nOther (income) expense net\t(6612)\t8002\t(18481)\t16323\nIncome before income taxes\t157405\t173385\t271455\t388484\nProvision for income taxes\t(40520)\t(43303)\t(61681)\t(95073)\nNet income\t116885\t130082\t209774\t293411\nNet income attributable to non-controlling interests\t394\t1486\t48\t1993\nNet income attributable to MasTec Inc.\t116491\t128596\t209726\t291418\nEarnings per share (Note 2):\t\t\t\t\nBasic earnings per share\t1.61\t1.71\t2.87\t3.88\nBasic weighted average common shares outstanding\t72138\t75217\t72971\t75131\nDiluted earnings per share\t1.59\t1.69\t2.84\t3.85\nDiluted weighted average common shares outstanding\t73095\t75934\t73787\t75760\n", "q10k_tbl_3": "\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nNet income\t116885\t130082\t209774\t293411\nOther comprehensive (loss) income:\t\t\t\t\nForeign currency translation losses net of tax\t(616)\t(334)\t(1753)\t(321)\nUnrealized gains (losses) on investment activity net of tax\t2839\t(7108)\t(21447)\t(21302)\nComprehensive income\t119108\t122640\t186574\t271788\nComprehensive income attributable to non-controlling interests\t394\t1486\t48\t1993\nComprehensive income attributable to MasTec Inc.\t118714\t121154\t186526\t269795\n", "q10k_tbl_4": "\tSeptember 30 2020\tDecember 31 2019\nAssets\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t238174\t71427\nAccounts receivable net of allowance\t917099\t850326\nContract assets\t1019879\t1024568\nInventories net\t85541\t100069\nPrepaid expenses\t44365\t52000\nOther current assets\t29017\t75169\nTotal current assets\t2334075\t2173559\nProperty and equipment net\t994193\t905835\nOperating lease assets\t187531\t229903\nGoodwill net\t1231717\t1221440\nOther intangible assets net\t191673\t211528\nOther long-term assets\t262560\t254741\nTotal assets\t5201749\t4997006\nLiabilities and equity\t\t\nCurrent liabilities:\t\t\nCurrent portion of long-term debt including finance leases\t138935\t118429\nCurrent portion of operating lease liabilities\t74439\t81561\nAccounts payable\t582849\t535029\nAccrued salaries and wages\t108796\t87562\nOther accrued expenses\t169748\t115581\nContract liabilities\t368184\t206180\nOther current liabilities\t71203\t74784\nTotal current liabilities\t1514154\t1219126\nLong-term debt including finance leases\t1164457\t1314030\nLong-term operating lease liabilities\t125639\t154553\nDeferred income taxes\t301216\t296326\nOther long-term liabilities\t219138\t221280\nTotal liabilities\t3324604\t3205315\nCommitments and contingencies (Note 14)\t\t\nEquity\t\t\nPreferred stock $1.00 par value: authorized shares - 5000000; issued and outstanding shares - none\t0\t0\nCommon stock $0.10 par value: authorized shares - 145000000; issued shares - 92761041 and 91909430 (including 1732454 and 1221593 of unvested stock awards) as of September 30 2020 and December 31 2019 respectively\t9276\t9191\nCapital surplus\t829495\t809753\nRetained earnings\t1720435\t1510709\nAccumulated other comprehensive loss\t(98906)\t(75706)\nTreasury stock at cost: 18941926 shares and 15344917 shares as of September 30 2020 and December 31 2019 respectively\t(586955)\t(466727)\nTotal MasTec Inc. shareholders' equity\t1873345\t1787220\nNon-controlling interests\t3800\t4471\nTotal equity\t1877145\t1791691\nTotal liabilities and equity\t5201749\t4997006\n", "q10k_tbl_5": "\tCommon Stock\t\tTreasury Stock\t\tCapital Surplus\tRetained Earnings\tAccumulated Other Comprehensive Loss\tTotal MasTec Inc. Shareholders' Equity\tNon-Controlling Interests\tTotal Equity\n\tShares\tAmount\tShares\tAmount\t\t\t\nFor the Three Months Ended September 30 2020\t\t\t\t\t\t\t\t\t\t\nBalance as of June 30 2020\t92665097\t9267\t(18941926)\t(586955)\t821584\t1603944\t(101129)\t1746711\t4125\t1750836\nNet income\t\t\t\t\t\t116491\t\t116491\t394\t116885\nOther comprehensive income\t\t\t\t\t\t\t2223\t2223\t\t2223\nNon-cash stock-based compensation\t\t\t\t\t5639\t\t\t5639\t\t5639\nIssuance of restricted shares net\t1391\t0\t\t\t0\t\t\t0\t\t0\nOther stock issuances net of shares withheld for taxes\t94553\t9\t\t\t2272\t\t\t2281\t\t2281\nDistributions to non-controlling interests\t\t\t\t\t\t\t\t0\t(719)\t(719)\nBalance as of September 30 2020\t92761041\t9276\t(18941926)\t(586955)\t829495\t1720435\t(98906)\t1873345\t3800\t1877145\nFor the Three Months Ended September 30 2019\t\t\t\t\t\t\t\t\t\t\nBalance as of June 30 2019\t91626986\t9163\t(15344917)\t(466727)\t799162\t1281198\t(74675)\t1548121\t3217\t1551338\nNet income\t\t\t\t\t\t128596\t\t128596\t1486\t130082\nOther comprehensive loss\t\t\t\t\t\t\t(7442)\t(7442)\t\t(7442)\nNon-cash stock-based compensation\t\t\t\t\t4192\t\t\t4192\t\t4192\nForfeiture of restricted shares net\t(920)\t0\t\t\t0\t\t\t0\t\t0\nOther stock issuances net of shares withheld for taxes\t28092\t2\t\t\t1133\t\t\t1135\t\t1135\nBalance as of September 30 2019\t91654158\t9165\t(15344917)\t(466727)\t804487\t1409793\t(82117)\t1674601\t4703\t1679304\n", "q10k_tbl_6": "\tCommon Stock\t\tTreasury Stock\t\tCapital Surplus\tRetained Earnings\tAccumulated Other Comprehensive Loss\tTotal MasTec Inc. Shareholders' Equity\tNon-Controlling Interests\tTotal Equity\n\tShares\tAmount\tShares\tAmount\t\t\t\nFor the Nine Months Ended September 30 2020\t\t\t\t\t\t\t\t\t\t\nBalance as of December 31 2019\t91909430\t9191\t(15344917)\t(466727)\t809753\t1510709\t(75706)\t1787220\t4471\t1791691\nNet income\t\t\t\t\t\t209726\t\t209726\t48\t209774\nOther comprehensive loss\t\t\t\t\t\t\t(23200)\t(23200)\t\t(23200)\nNon-cash stock-based compensation\t\t\t\t\t15538\t\t\t15538\t\t15538\nIssuance of restricted shares net\t694746\t69\t\t\t(69)\t\t\t0\t\t0\nOther stock issuances net of shares withheld for taxes\t156865\t16\t\t\t4273\t\t\t4289\t\t4289\nAcquisition of treasury stock at cost\t\t\t(3597009)\t(120228)\t\t\t\t(120228)\t\t(120228)\nDistributions to non-controlling interests\t\t\t\t\t\t\t\t0\t(719)\t(719)\nBalance as of September 30 2020\t92761041\t9276\t(18941926)\t(586955)\t829495\t1720435\t(98906)\t1873345\t3800\t1877145\nFor the Nine Months Ended September 30 2019\t\t\t\t\t\t\t\t\t\t\nBalance as of December 31 2018\t91327009\t9133\t(15329817)\t(466125)\t789009\t1118375\t(60494)\t1389898\t2126\t1392024\nNet income\t\t\t\t\t\t291418\t\t291418\t1993\t293411\nOther comprehensive loss\t\t\t\t\t\t\t(21623)\t(21623)\t\t(21623)\nNon-cash stock-based compensation\t\t\t\t\t12132\t\t\t12132\t\t12132\nIssuance of restricted shares net\t232499\t23\t\t\t(23)\t\t\t0\t\t0\nOther stock issuances net of shares withheld for taxes\t94650\t9\t\t\t3369\t\t\t3378\t\t3378\nAcquisition of treasury stock at cost\t\t\t(15100)\t(602)\t\t\t\t(602)\t\t(602)\nContributions from non-controlling interests\t\t\t\t\t\t\t\t0\t584\t584\nBalance as of September 30 2019\t91654158\t9165\t(15344917)\t(466727)\t804487\t1409793\t(82117)\t1674601\t4703\t1679304\n", "q10k_tbl_7": "\tFor the Nine Months Ended September 30\t\n\t2020\t2019\nCash flows from operating activities:\t\t\nNet income\t209774\t293411\nAdjustments to reconcile net income to net cash provided by operating activities:\t\t\nDepreciation\t182173\t160019\nAmortization of intangible assets\t28384\t14152\nNon-cash interest expense net\t2201\t1691\nNon-cash stock-based compensation expense\t15538\t12132\nProvision for deferred income taxes\t7947\t8546\nProvision for credit losses\t14213\t1326\nEquity in earnings of unconsolidated affiliates\t(22092)\t(19778)\nGains on sales of assets net\t(12874)\t(9627)\nOther non-cash items net\t8833\t(2841)\nChanges in assets and liabilities net of acquisitions:\t\t\nAccounts receivable net of allowance\t(49802)\t(33522)\nContract assets\t10637\t34253\nInventories\t15645\t21293\nOther assets current and long-term portion\t38729\t16641\nAccounts payable and accrued expenses\t109689\t(30641)\nContract liabilities\t160648\t(52537)\nOther liabilities current and long-term portion\t(7185)\t26876\nNet cash provided by operating activities\t712458\t441394\nCash flows from investing activities:\t\t\nCash paid for acquisitions net of cash acquired\t(11251)\t(94647)\nCapital expenditures\t(183725)\t(85095)\nProceeds from sale of property and equipment\t29744\t27102\nPayments for other investments\t(17436)\t(5589)\nProceeds from other investments\t648\t14705\nOther investing activities net\t4843\t0\nNet cash used in investing activities\t(177177)\t(143524)\nCash flows from financing activities:\t\t\nProceeds from credit facilities\t1415426\t2185714\nRepayments of credit facilities\t(1725845)\t(2371965)\nProceeds from issuance of 4.50% senior notes\t600000\t0\nRepayments of 4.875% senior notes\t(400000)\t0\nRepayments of other borrowings net\t(50)\t(333)\nPayments of finance lease obligations\t(92260)\t(59045)\nPayments of acquisition-related contingent consideration\t(39379)\t(29267)\n(Distributions to) proceeds from non-controlling interests\t(719)\t584\nProceeds from stock-based awards\t5483\t3414\nPayments for stock-based awards\t(614)\t(34)\nRepurchases of common stock\t(120228)\t(5652)\nOther financing activities net\t(11078)\t(5459)\nNet cash used in financing activities\t(369264)\t(282043)\nEffect of currency translation on cash\t730\t(154)\nNet increase in cash and cash equivalents\t166747\t15673\nCash and cash equivalents - beginning of period\t71427\t27422\nCash and cash equivalents - end of period\t238174\t43095\n", "q10k_tbl_8": "Supplemental cash flow information:\t\t\nInterest paid\t57098\t73570\nIncome tax payments net of refunds\t12091\t73502\nSupplemental disclosure of non-cash information:\t\t\nAdditions to property and equipment from finance leases\t86083\t163458\n", "q10k_tbl_9": "\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nNet income attributable to MasTec:\t\t\t\t\nNet income - basic and diluted (a)\t116491\t128596\t209726\t291418\nWeighted average shares outstanding:\t\t\t\t\nWeighted average shares outstanding - basic\t72138\t75217\t72971\t75131\nDilutive common stock equivalents (b)\t957\t717\t816\t629\nWeighted average shares outstanding - diluted\t73095\t75934\t73787\t75760\n", "q10k_tbl_10": "\tCommunications\tOil and Gas\tElectrical Transmission\tClean Energy and Infrastructure\tTotal Goodwill\nGoodwill gross\t551.4\t496.0\t150.1\t152.8\t1350.3\nAccumulated impairment loss\t0\t(118.6)\t0\t0\t(118.6)\nGoodwill net\t551.4\t377.4\t150.1\t152.8\t1231.7\n", "q10k_tbl_11": "\tOther Intangible Assets\t\t\t\t\t\n\tNon-Amortizing\t\tAmortizing\t\t\t\n\tTrade Names\tPre-Qualifications\tCustomer Relationships and Backlog\tPre-Qualifications\tOther (a)\tTotal\nOther intangible assets gross as of December 31 2019\t34.5\t72.9\t286.5\t0\t26.3\t420.2\nAccumulated amortization\t\t\t(191.2)\t0\t(17.5)\t(208.7)\nOther intangible assets net as of December 31 2019\t34.5\t72.9\t95.3\t0\t8.8\t211.5\nAdditions from new business combinations\t0\t0\t9.7\t0\t0.1\t9.8\nClassification changes (b)\t0\t(69.8)\t0\t69.8\t0\t0\nMeasurement period adjustments (c)\t0\t0\t(0.2)\t0\t0\t(0.2)\nCurrency translation adjustments\t0\t(3.1)\t0\t2.1\t0\t(1.0)\nAmortization expense\t\t\t(19.8)\t(7.1)\t(1.5)\t(28.4)\nOther intangible assets net as of September 30 2020\t34.5\t0\t85.0\t64.8\t7.4\t191.7\n", "q10k_tbl_12": "\tSeptember 30 2020\tDecember 31 2019\nContract billings\t939.6\t860.4\nLess allowance\t(22.5)\t(10.1)\nAccounts receivable net of allowance\t917.1\t850.3\nRetainage\t313.1\t345.2\nUnbilled receivables\t706.8\t679.4\nContract assets\t1019.9\t1024.6\n", "q10k_tbl_13": "\tSeptember 30 2020\tDecember 31 2019\nLand\t6.0\t4.9\nBuildings and leasehold improvements\t40.8\t35.8\nMachinery and equipment\t1834.7\t1659.4\nOffice furniture and equipment\t216.3\t197.3\nConstruction in progress\t29.8\t26.1\nTotal property and equipment\t2127.6\t1923.5\nLess accumulated depreciation and amortization\t(1133.4)\t(1017.7)\nProperty and equipment net\t994.2\t905.8\n", "q10k_tbl_14": "Description\tMaturity Date\tSeptember 30 2020\tDecember 31 2019\nSenior secured credit facility:\tSeptember 19 2024\t\t\nRevolving loans\t\t19.9\t339.2\nTerm loan\t\t400.0\t400.0\n4.50% Senior Notes\tAugust 15 2028\t600.0\t0\n4.875% Senior Notes\tMarch 15 2023\t0\t400.0\nFinance lease and other obligations\t\t300.2\t305.6\nTotal debt obligations\t\t1320.1\t1444.8\nLess unamortized deferred financing costs\t\t(16.7)\t(12.4)\nTotal debt net of deferred financing costs\t\t1303.4\t1432.4\nCurrent portion of long-term debt\t\t138.9\t118.4\nLong-term debt\t\t1164.5\t1314.0\n", "q10k_tbl_15": "\tFinance Leases\tOperating Leases\n2020 remaining three months\t41.6\t29.4\n2021\t131.7\t72.6\n2022\t91.5\t46.5\n2023\t38.9\t23.8\n2024\t6.4\t15.6\nThereafter\t0.2\t30.0\nTotal minimum lease payments\t310.3\t217.9\nLess amounts representing interest\t(15.2)\t(17.9)\nTotal lease obligations net of interest\t295.1\t200.0\nLess current portion\t128.9\t74.4\nLong-term portion of lease obligations net of interest\t166.2\t125.6\n", "q10k_tbl_16": "Activity restricted shares: (a)\tRestricted Shares\tPer Share Weighted Average Grant Date Fair Value\nNon-vested restricted shares as of December 31 2019\t1221593\t45.36\nGranted\t936946\t27.15\nVested\t(183885)\t39.60\nCanceled/forfeited\t(239900)\t58.96\nNon-vested restricted shares as of September 30 2020\t1734754\t34.26\n", "q10k_tbl_17": "\tFor the Nine Months Ended September 30\t\n\t2020\t2019\nCash proceeds (in millions)\t5.5\t3.4\nCommon shares issued\t193655\t87014\nWeighted average price per share\t28.29\t39.23\nWeighted average per share grant date fair value\t8.61\t9.97\n", "q10k_tbl_18": "\tMultiemployer Plans\t\t\t\t\n\tCovered Employees\t\tContributions (in millions)\t\t\n\tLow\tHigh\tPension\tOther Multiemployer\tTotal\nFor the Three Months Ended September 30:\t\t\t\t\t\n2020\t1452\t1469\t7.2\t1.7\t8.9\n2019\t3814\t5349\t23.0\t1.2\t24.2\nFor the Nine Months Ended September 30:\t\t\t\t\t\n2020\t1119\t1469\t19.5\t5.5\t25.0\n2019\t1626\t5349\t51.7\t4.0\t55.7\n", "q10k_tbl_19": "\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\nRevenue:\t2020\t2019\t2020\t2019\nCommunications (a)\t645.4\t679.5\t1943.8\t1944.9\nOil and Gas\t462.5\t972.5\t1190.1\t2530.5\nElectrical Transmission\t128.5\t103.0\t380.7\t298.3\nClean Energy and Infrastructure\t468.9\t261.7\t1181.4\t701.3\nOther\t0.1\t0.1\t0.2\t0.1\nEliminations\t(7.1)\t(0.2)\t(12.0)\t(1.1)\nConsolidated revenue\t1698.3\t2016.6\t4684.2\t5474.0\n", "q10k_tbl_20": "\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\nEBITDA:\t2020\t2019\t2020\t2019\nCommunications\t79.6\t57.1\t206.8\t154.8\nOil and Gas\t160.4\t212.9\t315.0\t499.6\nElectrical Transmission\t9.1\t7.8\t14.2\t20.3\nClean Energy and Infrastructure\t34.4\t2.3\t69.5\t14.4\nOther\t7.6\t6.7\t22.5\t19.4\nCorporate\t(37.5)\t(38.9)\t(100.6)\t(87.7)\nConsolidated EBITDA\t253.6\t247.9\t527.4\t620.8\n", "q10k_tbl_21": "\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\nDepreciation and Amortization:\t2020\t2019\t2020\t2019\nCommunications\t21.1\t15.7\t62.1\t45.7\nOil and Gas\t47.5\t28.8\t107.7\t97.7\nElectrical Transmission\t6.2\t5.1\t18.6\t14.8\nClean Energy and Infrastructure\t5.0\t3.3\t13.7\t9.7\nOther\t0.0\t0.0\t0.0\t0.1\nCorporate\t2.8\t2.3\t8.5\t6.2\nConsolidated depreciation and amortization\t82.6\t55.2\t210.6\t174.2\n", "q10k_tbl_22": "\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\nEBITDA Reconciliation:\t2020\t2019\t2020\t2019\nIncome before income taxes\t157.4\t173.4\t271.5\t388.5\nPlus:\t\t\t\t\nInterest expense net\t13.6\t19.3\t45.4\t58.2\nDepreciation\t71.4\t50.5\t182.2\t160.0\nAmortization of intangible assets\t11.2\t4.7\t28.4\t14.2\nConsolidated EBITDA\t253.6\t247.9\t527.4\t620.8\n", "q10k_tbl_23": "\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\nCustomer:\t2020\t2019\t2020\t2019\nAT&T (including DIRECTV®) (a)\t15%\t18%\t19%\t20%\nEquitrans Midstream Corporation (b)\t3%\t17%\t2%\t12%\n", "q10k_tbl_24": "Reportable Segment (in millions):\tSeptember 30 2020\tJune 30 2020\tSeptember 30 2019\nCommunications\t3853\t3915\t3968\nOil and Gas\t2413\t2659\t2109\nElectrical Transmission\t545\t551\t457\nClean Energy and Infrastructure\t891\t1042\t988\nOther\t0\t1\t1\nEstimated 18-month backlog\t7702\t8168\t7523\n", "q10k_tbl_25": "\tFor the Three Months Ended September 30\t\t\t\tFor the Nine Months Ended September 30\t\t\t\n\t2020\t\t2019\t\t2020\t\t2019\t\nRevenue\t1698.3\t100.0%\t2016.6\t100.0%\t4684.2\t100.0%\t5474.0\t100.0%\nCosts of revenue excluding depreciation and amortization\t1380.5\t81.3%\t1690.6\t83.8%\t3948.6\t84.3%\t4636.0\t84.7%\nDepreciation\t71.4\t4.2%\t50.5\t2.5%\t182.2\t3.9%\t160.0\t2.9%\nAmortization of intangible assets\t11.2\t0.7%\t4.7\t0.2%\t28.4\t0.6%\t14.2\t0.3%\nGeneral and administrative expenses\t72.7\t4.3%\t77.1\t3.8%\t243.2\t5.2%\t220.6\t4.0%\nInterest expense net\t13.6\t0.8%\t19.3\t1.0%\t45.4\t1.0%\t58.2\t1.1%\nEquity in earnings of unconsolidated affiliates\t(7.4)\t(0.4)%\t(7.0)\t(0.3)%\t(22.1)\t(0.5)%\t(19.8)\t(0.4)%\nLoss on extinguishment of debt\t5.6\t0.3%\t0\t-%\t5.6\t0.1%\t0\t-%\nOther (income) expense net\t(6.6)\t(0.4)%\t8.0\t0.4%\t(18.5)\t(0.4)%\t16.3\t0.3%\nIncome before income taxes\t157.4\t9.3%\t173.4\t8.6%\t271.5\t5.8%\t388.5\t7.1%\nProvision for income taxes\t(40.5)\t(2.4)%\t(43.3)\t(2.1)%\t(61.7)\t(1.3)%\t(95.1)\t(1.7)%\nNet income\t116.9\t6.9%\t130.1\t6.5%\t209.8\t4.5%\t293.4\t5.4%\nNet income attributable to non-controlling interests\t0.4\t0.0%\t1.5\t0.1%\t0.0\t0.0%\t2.0\t0.0%\nNet income attributable to MasTec Inc.\t116.5\t6.9%\t128.6\t6.4%\t209.7\t4.5%\t291.4\t5.3%\n", "q10k_tbl_26": "\tRevenue\t\t\t\tEBITDA and EBITDA Margin\t\t\t\t\t\t\t\n\tFor the Three Months Ended September 30\t\tFor the Nine Months Ended September 30\t\tFor the Three Months Ended September 30\t\t\t\tFor the Nine Months Ended September 30\t\t\t\nReportable Segment:\t2020\t2019\t2020\t2019\t2020\t\t2019\t\t2020\t\t2019\t\nCommunications\t645.4\t679.5\t1943.8\t1944.9\t79.6\t12.3%\t57.1\t8.4%\t206.8\t10.6%\t154.8\t8.0%\nOil and Gas\t462.5\t972.5\t1190.1\t2530.5\t160.4\t34.7%\t212.9\t21.9%\t315.0\t26.5%\t499.6\t19.7%\nElectrical Transmission\t128.5\t103.0\t380.7\t298.3\t9.1\t7.1%\t7.8\t7.6%\t14.2\t3.7%\t20.3\t6.8%\nClean Energy and Infrastructure\t468.9\t261.7\t1181.4\t701.3\t34.4\t7.3%\t2.3\t0.9%\t69.5\t5.9%\t14.4\t2.1%\nOther\t0.1\t0.1\t0.2\t0.1\t7.6\tNM\t6.7\tNM\t22.5\tNM\t19.4\tNM\nEliminations\t(7.1)\t(0.2)\t(12.0)\t(1.1)\t0\t0\t0\t0\t0\t0\t0\t0\nCorporate\t0\t0\t0\t0\t(37.5)\t0\t(38.9)\t0\t(100.6)\t0\t(87.7)\t0\nConsolidated Results\t1698.3\t2016.6\t4684.2\t5474.0\t253.6\t14.9%\t247.9\t12.3%\t527.4\t11.3%\t620.8\t11.3%\n", "q10k_tbl_27": "\tFor the Three Months Ended September 30\t\t\t\tFor the Nine Months Ended September 30\t\t\t\n\t2020\t\t2019\t\t2020\t\t2019\t\nNet income\t116.9\t6.9%\t130.1\t6.5%\t209.8\t4.5%\t293.4\t5.4%\nInterest expense net\t13.6\t0.8%\t19.3\t1.0%\t45.4\t1.0%\t58.2\t1.1%\nProvision for income taxes\t40.5\t2.4%\t43.3\t2.1%\t61.7\t1.3%\t95.1\t1.7%\nDepreciation\t71.4\t4.2%\t50.5\t2.5%\t182.2\t3.9%\t160.0\t2.9%\nAmortization of intangible assets\t11.2\t0.7%\t4.7\t0.2%\t28.4\t0.6%\t14.2\t0.3%\nEBITDA\t253.6\t14.9%\t247.9\t12.3%\t527.4\t11.3%\t620.8\t11.3%\nNon-cash stock-based compensation expense\t5.6\t0.3%\t4.2\t0.2%\t15.5\t0.3%\t12.1\t0.2%\nLoss on extinguishment of debt\t5.6\t0.3%\t0\t-%\t5.6\t0.1%\t0\t-%\nAdjusted EBITDA\t264.8\t15.6%\t252.1\t12.5%\t548.5\t11.7%\t633.0\t11.6%\n", "q10k_tbl_28": "\tFor the Three Months Ended September 30\t\t\t\tFor the Nine Months Ended September 30\t\t\t\n\t2020\t\t2019\t\t2020\t\t2019\t\nEBITDA\t253.6\t14.9%\t247.9\t12.3%\t527.4\t11.3%\t620.8\t11.3%\nNon-cash stock-based compensation expense\t5.6\t0.3%\t4.2\t0.2%\t15.5\t0.3%\t12.1\t0.2%\nLoss on extinguishment of debt\t5.6\t0.3%\t0\t-%\t5.6\t0.1%\t0\t-%\nAdjusted EBITDA\t264.8\t15.6%\t252.1\t12.5%\t548.5\t11.7%\t633.0\t11.6%\nReportable Segment:\t\t\t\t\t\t\t\t\nCommunications\t79.6\t12.3%\t57.1\t8.4%\t206.8\t10.6%\t154.8\t8.0%\nOil and Gas\t160.4\t34.7%\t212.9\t21.9%\t315.0\t26.5%\t499.6\t19.7%\nElectrical Transmission\t9.1\t7.1%\t7.8\t7.6%\t14.2\t3.7%\t20.3\t6.8%\nClean Energy and Infrastructure\t34.4\t7.3%\t2.3\t0.9%\t69.5\t5.9%\t14.4\t2.1%\nOther\t7.6\tNM\t6.7\tNM\t22.5\tNM\t19.4\tNM\nCorporate\t(26.3)\t0\t(34.7)\t0\t(79.5)\t0\t(75.5)\t0\nAdjusted EBITDA\t264.8\t15.6%\t252.1\t12.5%\t548.5\t11.7%\t633.0\t11.6%\n", "q10k_tbl_29": "\tFor the Three Months Ended September 30\t\t\t\n\t2020\t\t2019\t\n\tNet Income (in millions)\tDiluted Earnings Per Share\tNet Income (in millions)\tDiluted Earnings Per Share\nReported U.S. GAAP measure\t116.9\t1.59\t130.1\t1.69\nAdjustments:\t\t\t\t\nNon-cash stock-based compensation expense\t5.6\t0.08\t4.2\t0.06\nLoss on extinguishment of debt\t5.6\t0.08\t0\t0\nAmortization of intangible assets\t11.2\t0.15\t4.7\t0.06\nTotal adjustments pre-tax\t22.4\t0.31\t8.9\t0.12\nIncome tax effect of adjustments (a)\t(4.8)\t(0.07)\t(1.7)\t(0.02)\nStatutory tax rate effects\t0\t0\t(0.5)\t(0.01)\nAdjusted non-U.S. GAAP measure\t134.5\t1.83\t136.8\t1.78\n", "q10k_tbl_30": "\tFor the Nine Months Ended September 30\t\t\t\n\t2020\t\t2019\t\n\tNet Income (in millions)\tDiluted Earnings Per Share\tNet Income (in millions)\tDiluted Earnings Per Share\nReported U.S. GAAP measure\t209.8\t2.84\t293.4\t3.85\nAdjustments:\t\t\t\t\nNon-cash stock-based compensation expense\t15.5\t0.21\t12.1\t0.16\nLoss on extinguishment of debt\t5.6\t0.08\t0\t0\nAmortization of intangible assets\t28.4\t0.38\t14.2\t0.19\nTotal adjustments pre-tax\t49.5\t0.67\t26.3\t0.35\nIncome tax effect of adjustments (a)\t(11.0)\t(0.15)\t(8.2)\t(0.11)\nStatutory tax rate effects (b)\t0\t0\t(1.9)\t(0.02)\nAdjusted non-U.S. GAAP measure\t248.3\t3.36\t309.6\t4.06\n", "q10k_tbl_31": "\tFor the Nine Months Ended September 30\t\n\t2020\t2019\nNet cash provided by operating activities\t712.5\t441.4\nNet cash used in investing activities\t(177.2)\t(143.5)\nNet cash used in financing activities\t(369.3)\t(282.0)\n", "q10k_tbl_32": "Period\tTotal Number of Shares Purchased (a)\tAverage Price Paid per Share\tTotal Number of Shares Purchased as Part of Publicly Announced Program\tApproximate Dollar Value of Shares that May Yet be Purchased under the Program (b)\nJuly 1 through July 31\t0\t0\t0\t158617588\nAugust 1 through August 31\t456\t46.24\t0\t158617588\nSeptember 1 through September 30\t0\t0\t0\t158617588\nTotal\t456\t\t0\t\n", "q10k_tbl_33": "Exhibit No.\tDescription\n4.1\tForm of 4.50% Senior Notes due 2028 incorporated by reference to Exhibit A of Exhibit 4.2.\n4.2\tIndenture dated August 4 2020 by and among the Company certain of the Company's subsidiaries and U.S. Bank National Association as trustee filed as Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on August 4 2020 and incorporated by reference herein.\n31.1*\tCertifications required by Section 302(a) of the Sarbanes-Oxley Act of 2002.\n31.2*\tCertifications required by Section 302(a) of the Sarbanes-Oxley Act of 2002.\n32.1**\tCertifications required by Section 906 of the Sarbanes-Oxley Act of 2002.\n32.2**\tCertifications required by Section 906 of the Sarbanes-Oxley Act of 2002.\n101.INS\tInline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.\n101.SCH\tInline XBRL Taxonomy Extension Schema\n101.CAL\tInline XBRL Taxonomy Extension Calculation Linkbase\n101.DEF\tInline XBRL Taxonomy Extension Definition Linkbase\n101.LAB\tInline XBRL Taxonomy Extension Label Linkbase\n101.PRE\tInline XBRL Taxonomy Extension Presentation Linkbase\n104\tThe cover page of MasTec Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30 2020 formatted in Inline XBRL (included with the Exhibit 101 attachments).\n"}{"bs": "q10k_tbl_4", "is": "q10k_tbl_2", "cf": "q10k_tbl_7"}None
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __ to __
Commission File Number 001-08106
_____________________________________________
MasTec, Inc.
(Exact name of registrant as specified in its charter)
Florida
65-0829355
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
800 S. Douglas Road, 12th Floor
Coral Gables,
Florida
33134
(Address of principal executive offices)
(Zip Code)
(305) 599-1800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $0.10 Par Value
MTZ
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☑
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes ☐ No ☑
As of October 26, 2020, MasTec, Inc. had 73,866,947 shares of common stock outstanding.
(unaudited - in thousands, except per share amounts)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2020
2019
2020
2019
Revenue
$
1,698,279
$
2,016,618
$
4,684,180
$
5,473,965
Costs of revenue, excluding depreciation and amortization
1,380,522
1,690,558
3,948,644
4,636,006
Depreciation
71,397
50,515
182,173
160,019
Amortization of intangible assets
11,200
4,681
28,384
14,152
General and administrative expenses
72,690
77,146
243,163
220,581
Interest expense, net
13,553
19,297
45,365
58,178
Equity in earnings of unconsolidated affiliates
(7,445)
(6,966)
(22,092)
(19,778)
Loss on extinguishment of debt
5,569
—
5,569
—
Other (income) expense, net
(6,612)
8,002
(18,481)
16,323
Income before income taxes
$
157,405
$
173,385
$
271,455
$
388,484
Provision for income taxes
(40,520)
(43,303)
(61,681)
(95,073)
Net income
$
116,885
$
130,082
$
209,774
$
293,411
Net income attributable to non-controlling interests
394
1,486
48
1,993
Net income attributable to MasTec, Inc.
$
116,491
$
128,596
$
209,726
$
291,418
Earnings per share (Note 2):
Basic earnings per share
$
1.61
$
1.71
$
2.87
$
3.88
Basic weighted average common shares outstanding
72,138
75,217
72,971
75,131
Diluted earnings per share
$
1.59
$
1.69
$
2.84
$
3.85
Diluted weighted average common shares outstanding
73,095
75,934
73,787
75,760
The accompanying notes are an integral part of these consolidated financial statements.
3
MASTEC, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited - in thousands)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2020
2019
2020
2019
Net income
$
116,885
$
130,082
$
209,774
$
293,411
Other comprehensive (loss) income:
Foreign currency translation losses, net of tax
(616)
(334)
(1,753)
(321)
Unrealized gains (losses) on investment activity, net of tax
2,839
(7,108)
(21,447)
(21,302)
Comprehensive income
$
119,108
$
122,640
$
186,574
$
271,788
Comprehensive income attributable to non-controlling interests
394
1,486
48
1,993
Comprehensive income attributable to MasTec, Inc.
$
118,714
$
121,154
$
186,526
$
269,795
The accompanying notes are an integral part of these consolidated financial statements.
4
MASTEC, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited - in thousands, except share information)
September 30, 2020
December 31, 2019
Assets
Current assets:
Cash and cash equivalents
$
238,174
$
71,427
Accounts receivable, net of allowance
917,099
850,326
Contract assets
1,019,879
1,024,568
Inventories, net
85,541
100,069
Prepaid expenses
44,365
52,000
Other current assets
29,017
75,169
Total current assets
$
2,334,075
$
2,173,559
Property and equipment, net
994,193
905,835
Operating lease assets
187,531
229,903
Goodwill, net
1,231,717
1,221,440
Other intangible assets, net
191,673
211,528
Other long-term assets
262,560
254,741
Total assets
$
5,201,749
$
4,997,006
Liabilities and equity
Current liabilities:
Current portion of long-term debt, including finance leases
$
138,935
$
118,429
Current portion of operating lease liabilities
74,439
81,561
Accounts payable
582,849
535,029
Accrued salaries and wages
108,796
87,562
Other accrued expenses
169,748
115,581
Contract liabilities
368,184
206,180
Other current liabilities
71,203
74,784
Total current liabilities
$
1,514,154
$
1,219,126
Long-term debt, including finance leases
1,164,457
1,314,030
Long-term operating lease liabilities
125,639
154,553
Deferred income taxes
301,216
296,326
Other long-term liabilities
219,138
221,280
Total liabilities
$
3,324,604
$
3,205,315
Commitments and contingencies (Note 14)
Equity
Preferred stock, $1.00 par value: authorized shares - 5,000,000; issued and outstanding shares – none
$
—
$
—
Common stock, $0.10 par value: authorized shares - 145,000,000; issued shares - 92,761,041 and 91,909,430 (including 1,732,454 and 1,221,593 of unvested stock awards) as of September 30, 2020 and December 31, 2019, respectively
9,276
9,191
Capital surplus
829,495
809,753
Retained earnings
1,720,435
1,510,709
Accumulated other comprehensive loss
(98,906)
(75,706)
Treasury stock, at cost: 18,941,926 shares and 15,344,917 shares as of September 30, 2020 and December 31, 2019, respectively
(586,955)
(466,727)
Total MasTec, Inc. shareholders’ equity
$
1,873,345
$
1,787,220
Non-controlling interests
$
3,800
$
4,471
Total equity
$
1,877,145
$
1,791,691
Total liabilities and equity
$
5,201,749
$
4,997,006
The accompanying notes are an integral part of these consolidated financial statements.
5
MASTEC, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited - in thousands, except shares)
Common Stock
Treasury Stock
Capital Surplus
Retained Earnings
Accumulated Other Comprehensive Loss
Total
MasTec, Inc. Shareholders’ Equity
Non-Controlling Interests
Total Equity
Shares
Amount
Shares
Amount
For the Three Months Ended September 30, 2020
Balance as of June 30, 2020
92,665,097
$
9,267
(18,941,926)
$
(586,955)
$
821,584
$
1,603,944
$
(101,129)
$
1,746,711
$
4,125
$
1,750,836
Net income
116,491
116,491
394
116,885
Other comprehensive income
2,223
2,223
2,223
Non-cash stock-based compensation
5,639
5,639
5,639
Issuance of restricted shares, net
1,391
—
—
—
—
Other stock issuances, net of shares withheld for taxes
94,553
9
2,272
2,281
2,281
Distributions to non-controlling interests
—
(719)
(719)
Balance as of September 30, 2020
92,761,041
$
9,276
(18,941,926)
$
(586,955)
$
829,495
$
1,720,435
$
(98,906)
$
1,873,345
$
3,800
$
1,877,145
For the Three Months Ended September 30, 2019
Balance as of June 30, 2019
91,626,986
$
9,163
(15,344,917)
$
(466,727)
$
799,162
$
1,281,198
$
(74,675)
$
1,548,121
$
3,217
$
1,551,338
Net income
128,596
128,596
1,486
130,082
Other comprehensive loss
(7,442)
(7,442)
(7,442)
Non-cash stock-based compensation
4,192
4,192
4,192
Forfeiture of restricted shares, net
(920)
—
—
—
—
Other stock issuances, net of shares withheld for taxes
28,092
2
1,133
1,135
1,135
Balance as of September 30, 2019
91,654,158
$
9,165
(15,344,917)
$
(466,727)
$
804,487
$
1,409,793
$
(82,117)
$
1,674,601
$
4,703
$
1,679,304
The accompanying notes are an integral part of these consolidated financial statements.
6
MASTEC, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited - in thousands, except shares)
Common Stock
Treasury Stock
Capital Surplus
Retained Earnings
Accumulated Other Comprehensive Loss
Total
MasTec, Inc. Shareholders’ Equity
Non-Controlling Interests
Total Equity
Shares
Amount
Shares
Amount
For the Nine Months Ended September 30, 2020
Balance as of December 31, 2019
91,909,430
$
9,191
(15,344,917)
$
(466,727)
$
809,753
$
1,510,709
$
(75,706)
$
1,787,220
$
4,471
$
1,791,691
Net income
209,726
209,726
48
209,774
Other comprehensive loss
(23,200)
(23,200)
(23,200)
Non-cash stock-based compensation
15,538
15,538
15,538
Issuance of restricted shares, net
694,746
69
(69)
—
—
Other stock issuances, net of shares withheld for taxes
156,865
16
4,273
4,289
4,289
Acquisition of treasury stock, at cost
(3,597,009)
(120,228)
(120,228)
(120,228)
Distributions to non-controlling interests
—
(719)
(719)
Balance as of September 30, 2020
92,761,041
$
9,276
(18,941,926)
$
(586,955)
$
829,495
$
1,720,435
$
(98,906)
$
1,873,345
$
3,800
$
1,877,145
For the Nine Months Ended September 30, 2019
Balance as of December 31, 2018
91,327,009
$
9,133
(15,329,817)
$
(466,125)
$
789,009
$
1,118,375
$
(60,494)
$
1,389,898
$
2,126
$
1,392,024
Net income
291,418
291,418
1,993
293,411
Other comprehensive loss
(21,623)
(21,623)
(21,623)
Non-cash stock-based compensation
12,132
12,132
12,132
Issuance of restricted shares, net
232,499
23
(23)
—
—
Other stock issuances, net of shares withheld for taxes
94,650
9
3,369
3,378
3,378
Acquisition of treasury stock, at cost
(15,100)
(602)
(602)
(602)
Contributions from non-controlling interests
—
584
584
Balance as of September 30, 2019
91,654,158
$
9,165
(15,344,917)
$
(466,727)
$
804,487
$
1,409,793
$
(82,117)
$
1,674,601
$
4,703
$
1,679,304
The accompanying notes are an integral part of these consolidated financial statements.
7
MASTEC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited - in thousands)
For the Nine Months Ended September 30,
2020
2019
Cash flows from operating activities:
Net income
$
209,774
$
293,411
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
182,173
160,019
Amortization of intangible assets
28,384
14,152
Non-cash interest expense, net
2,201
1,691
Non-cash stock-based compensation expense
15,538
12,132
Provision for deferred income taxes
7,947
8,546
Provision for credit losses
14,213
1,326
Equity in earnings of unconsolidated affiliates
(22,092)
(19,778)
Gains on sales of assets, net
(12,874)
(9,627)
Other non-cash items, net
8,833
(2,841)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net of allowance
(49,802)
(33,522)
Contract assets
10,637
34,253
Inventories
15,645
21,293
Other assets, current and long-term portion
38,729
16,641
Accounts payable and accrued expenses
109,689
(30,641)
Contract liabilities
160,648
(52,537)
Other liabilities, current and long-term portion
(7,185)
26,876
Net cash provided by operating activities
$
712,458
$
441,394
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired
(11,251)
(94,647)
Capital expenditures
(183,725)
(85,095)
Proceeds from sale of property and equipment
29,744
27,102
Payments for other investments
(17,436)
(5,589)
Proceeds from other investments
648
14,705
Other investing activities, net
4,843
—
Net cash used in investing activities
$
(177,177)
$
(143,524)
Cash flows from financing activities:
Proceeds from credit facilities
1,415,426
2,185,714
Repayments of credit facilities
(1,725,845)
(2,371,965)
Proceeds from issuance of 4.50% senior notes
600,000
—
Repayments of 4.875% senior notes
(400,000)
—
Repayments of other borrowings, net
(50)
(333)
Payments of finance lease obligations
(92,260)
(59,045)
Payments of acquisition-related contingent consideration
(39,379)
(29,267)
(Distributions to) proceeds from non-controlling interests
(719)
584
Proceeds from stock-based awards
5,483
3,414
Payments for stock-based awards
(614)
(34)
Repurchases of common stock
(120,228)
(5,652)
Other financing activities, net
(11,078)
(5,459)
Net cash used in financing activities
$
(369,264)
$
(282,043)
Effect of currency translation on cash
730
(154)
Net increase in cash and cash equivalents
$
166,747
$
15,673
Cash and cash equivalents - beginning of period
$
71,427
$
27,422
Cash and cash equivalents - end of period
$
238,174
$
43,095
Supplemental cash flow information:
Interest paid
$
57,098
$
73,570
Income tax payments, net of refunds
$
12,091
$
73,502
Supplemental disclosure of non-cash information:
Additions to property and equipment from finance leases
$
86,083
$
163,458
The accompanying notes are an integral part of these consolidated financial statements.
8
MASTEC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 – Business, Basis of Presentation and Significant Accounting Policies
Nature of the Business
MasTec, Inc. (collectively with its subsidiaries, “MasTec” or the “Company”) is a leading infrastructure construction company operating mainly throughout North America across a range of industries. The Company’s primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and other infrastructure, such as: wireless, wireline/fiber and customer fulfillment activities; pipeline infrastructure; electrical utility transmission and distribution; power generation, including from clean energy and renewable sources; heavy civil; and industrial infrastructure. MasTec’s customers are primarily in these industries. MasTec reports its results under five reportable segments: (1) Communications; (2) Oil and Gas; (3) Electrical Transmission; (4) Clean Energy and Infrastructure; and (5) Other. During the second quarter of 2020, the Company renamed its Power Generation and Industrial segment as the Clean Energy and Infrastructure segment to better represent the nature of the segment’s operations, end markets and customer characteristics. There was no change to the composition of the segment or its historical results.
Basis of Presentation
The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying consolidated balance sheet as of December 31, 2019 is derived from the Company’s audited financial statements as of that date. Because certain information and footnote disclosures have been condensed or omitted, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019 contained in the Company’s 2019 Annual Report on Form 10-K (the “2019 Form 10-K”). In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been included. When necessary, certain prior year amounts have been reclassified to conform to the current period presentation. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The Company believes that the disclosures made in these consolidated financial statements are adequate to make the information not misleading.
Principles of Consolidation
The accompanying consolidated financial statements include MasTec, Inc. and its subsidiaries and include the accounts of all majority owned subsidiaries over which the Company exercises control and, when applicable, entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Other parties’ interests in entities that MasTec consolidates are reported as non-controlling interests within equity, except for mandatorily redeemable non-controlling interests, which are recorded within liabilities. Net income or loss attributable to non-controlling interests is reported as a separate line item below net income or loss. The Company’s investments in entities for which the Company does not have a controlling interest, but over which it has the ability to exert significant influence, are accounted for using the equity method of accounting.For equity investees in which the Company has an undivided interest in the assets, liabilities and profits or losses of an unincorporated entity, but does not exercise control over the entity, the Company consolidates its proportional interest in the accounts of the entity.
Translation of Foreign Currencies
The assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. dollars at period-end exchange rates, with resulting translation gains or losses included within other comprehensive income or loss. Revenue and expenses are translated into U.S. dollars at average rates of exchange during the applicable period. Substantially all of the Company’s foreign operations use their local currency as their functional currency. Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in other income or expense, net. In these consolidated financial statements, “$” means U.S. dollars unless otherwise noted.
Management Estimates
The preparation of consolidated financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates are based on historical experience and various other assumptions, including the potential future effects of the COVID-19 pandemic and other relevant global events. These estimates form the basis for making judgments about the Company’s operating results and the carrying values of assets and liabilities that are not readily apparent from other sources. While management believes that such estimates are reasonable when considered in conjunction with the Company’s consolidated financial position and results of operations taken as a whole, actual results could differ materially from those estimates.
Key estimates include: the recognition of revenue and project profit or loss, which the Company defines as project revenue, less project costs of revenue, including project-related depreciation, in particular, on construction contracts accounted for under the cost-to-cost method, for which the recorded amounts require estimates of costs to complete and the amount and probability of variable consideration included in the contract transaction price; fair value estimates, including those related to acquisitions, valuations of goodwill and intangible assets, acquisition-related contingent consideration and other liabilities, equity investments and other long-lived assets; allowances for credit losses; asset lives used in computing depreciation and amortization; fair values of financial instruments; self-insurance liabilities; other accruals and allowances; income taxes; and the estimated effects of litigation and other contingencies.
9
COVID-19 Pandemic
During March 2020, the World Health Organization declared a global pandemic related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The COVID-19 pandemic has significantly affected economic conditions in the United States and internationally, as national, state and local governments reacted to the public health crisis by requiring mitigation measures resulting in workforce, supply chain and other market disruptions that have created significant uncertainties in the U.S. and global economies and disrupted business activities for an uncertain period of time. Although certain jurisdictions have subsequently taken steps to lift or ease such restrictions to various degrees, such lifting or easing could subsequently be reversed, or new restrictions imposed, due to a rise in cases of COVID-19.
Most of the Company’s construction services have been and currently are deemed essential under state and local pandemic mitigation orders, and all of its business segments continue to operate. Where safe and possible, the Company has generally been directed by its customers to maintain normal work schedules. Management’s top priority has been to take appropriate actions to protect the health and safety of its employees, customers and business partners, including adjusting its standard operating procedures to respond to evolving health guidelines. The COVID-19 pandemic has had a negative impact on the Company’s operations and is expected to have some continued negative impact. These impacts include lost productivity from governmental permitting approval delays, reduced crew productivity due to social distancing, other mitigation measures or other factors, the health and availability of work crews or other key personnel, including subcontractors or supply chain disruptions, and/or delayed project start dates or project shutdowns or cancellations that may be mandated or requested by governmental authorities or others, all of which could result in lower revenue or higher operating costs and/or create lower levels of overhead cost absorption.
In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020. The CARES Act provides for various tax relief and incentive measures, including provisions permitting the deferral and/or reduction of certain federal and payroll tax amounts. The Company has pursued certain of these relief provisions, and for the nine month period ended September 30, 2020, has deferred approximately $22 million of payroll taxes, net. The Company will continue to evaluate the potential effects of the CARES Act on its financial position, results of operations and cash flows.
Management believes that it is taking appropriate steps to mitigate any potential impact to the Company; however, given the uncertainty regarding the potential effects of the COVID-19 pandemic, any future impacts cannot be quantified or predicted with specificity.
Significant Accounting Policies
Revenue Recognition
The Company recognizes revenue from contracts with customers under Accounting Standards Codification (“ASC”) Topic 606 (“Topic 606”). Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which an entity expects to be entitled in exchange for the goods and services transferred. Revenue is primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied for the related contracts.
Contracts. The Company derives revenue primarily from construction projects performed under: (i) master and other service agreements, which provide a menu of available services in a specific geographic territory that are utilized on an as-needed basis, and are typically priced using either a time and materials, or a fixed price per unit basis; and (ii) contracts for specific projects requiring the construction and installation of an entire infrastructure system, or specified units within an infrastructure system, which are subject to multiple pricing options, including fixed price, unit price, time and materials, or cost plus a markup. Revenue derived from projects performed under master service and other service agreements totaled 32% of consolidated revenue for both the three month periods ended September 30, 2020 and 2019, and totaled 36% and 35% for the nine month periods ended September 30, 2020 and 2019, respectively.
For certain master service and other service agreements under which the Company performs installation and maintenance services, primarily for install-to-the-home service providers in its Communications segment, revenue is recognized at a point in time. This is generally when the work order has been fulfilled, which is typically the same day the work is initiated. Point in time revenue accounted for approximately 4% of consolidated revenue for both the three month periods ended September 30, 2020 and 2019, and accounted for approximately 5% for both the nine month periods ended September 30, 2020 and 2019. Substantially all of the Company’s other revenue is recognized over time.
The total contract transaction price and cost estimation processes used for recognizing revenue over time under the cost-to-cost method is based on the professional knowledge and experience of the Company’s project managers, engineers and financial professionals. Management reviews estimates of total contract transaction price and total project costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and the Company’s profit recognition. Changes in these factors could result in revisions to revenue in the period in which the revisions are determined, which could materially affect the Company’s consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are determined. For both the nine month periods ended September 30, 2020 and 2019, project profit was affected by less than 5% as a result of changes in contract estimates included in projects that were in process as of December 31, 2019 and 2018. Revenue recognized for the three month periods ended September 30, 2020 and 2019 as a result of changes in total contract transaction price estimates, including for variable consideration, from performance obligations satisfied or partially satisfied in prior periods, totaled approximately $8.8 million and $13.3 million, respectively, and totaled $11.5 million and $52.2 million for the nine month periods ended September 30, 2020 and 2019, respectively.
The Company may incur certain costs that can be capitalized, such as initial set-up or mobilization costs. Such costs, which are amortized over the life of the respective projects, were not material as of September 30, 2020 or December 31, 2019.