Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

The following table sets forth information for the Company’s goodwill and intangible assets as of the dates indicated (in millions):



	December 31, 2012			Weighted Average Amortization Period	December 31, 2011			Weighted Average Amortization Period
Amortizing intangible assets:⁽¹⁾
Gross carrying amount	$	129.4			$	95.8
Less: accumulated amortization	(58.5		)		(51.3		)
Amortizing intangible assets, net	$	70.9		12 years	$	44.5		14 years
Non-amortizing intangible assets:
Trade names	$	34.9			$	34.9
Pre-qualifications	31.3				31.3
Non-amortizing intangible assets	66.2				66.2
Goodwill	$	820.3			$	714.8
Goodwill and other intangible assets	$	957.4			$	825.5

(1)Consists principally of customer relationships, backlog, trade names and non-compete agreements with finite lives.

See Note 4 - Discontinued Operations for information pertaining to goodwill and other intangible assets of discontinued operations.

The following table provides a reconciliation of changes in goodwill and other intangible assets for the years indicated (in millions):



				Other Intangible Assets
	Goodwill			Non-amortizing		Amortizing			Total
Balance as of December 31, 2010	$	525.6		$	34.9	$	36.0		$	596.5
Additions from new business combinations	177.4			31.3		22.4			$	231.1
Accruals of acquisition-related contingent consideration ^(a)	11.8								$	11.8
Amortization expense						(13.9		)	$	(13.9	)
Balance as of December 31, 2011	$	714.8		$	66.2	$	44.5		$	825.5
Additions from new business combinations	80.2			—		38.6			$	118.8
Accruals of acquisition-related contingent consideration ^(a)	25.5								$	25.5
Amortization expense						(12.2		)	$	(12.2	)
Currency translation	(0.2		)	—		—			$	(0.2	)
Balance as of December 31, 2012	$	820.3		$	66.2	$	70.9		$	957.4


(a)	Represents contingent consideration for acquisitions prior to January 1, 2009, which is only accrued as earned, in accordance with U.S. GAAP.

The following table provides a reconciliation of changes in goodwill by reportable segment for the years indicated (in millions):



	Communications		Electrical Transmission		Oil & Gas			Power Generation & Industrial		Total Goodwill
Balance as of December 31, 2010	$	227.9	$	8.8	$	171.4		$	117.5	$	525.6
Additions from new business combinations	28.6		120.7		28.1			—		$	177.4
Accruals of acquisition-related contingent consideration^(a)	1.5		—		10.3			—		$	11.8
Balance as of December 31, 2011	$	258.0	$	129.5	$	209.8		$	117.5	$	714.8
Additions from new business combinations	36.5		—		43.7			—		$	80.2
Accruals of acquisition-related contingent consideration ^(a)	7.7		—		17.8			—		$	25.5
Currency translation	—		—		(0.2		)	—		$	(0.2	)
Balance as of December 31, 2012	$	302.2	$	129.5	$	271.1		$	117.5	$	820.3


(a)	Represents contingent consideration for acquisitions prior to January 1, 2009, which is only accrued as earned, in accordance with U.S. GAAP.

See Note 16 - Segments and Operations by Geographic Area for details pertaining to the Company's reportable segments.

Information about estimated future amortization expense associated with amortizing intangible assets, including those associated with preliminary purchase price allocations, is summarized in the following table (in millions):



	Amortization Expense
2013	$	16.4
2014	11.8
2015	9.0
2016	6.9
2017	5.3
Thereafter	21.5
Total	$	70.9

Annual Impairment Review. Management performs its annual impairment review of goodwill and intangible assets with indefinite lives during the fourth quarter each year at the reporting unit level, which is one level below the Company's reportable segments. A reporting unit is an operating segment or one level below an operating segment, also referred to as a component. Net assets of acquired businesses and related goodwill are allocated to the corresponding reporting units upon acquisition. Management identifies its Company’s reporting units by assessing whether components have discrete financial information available and if segment management regularly reviews the operating results of that component. To the extent that two or more components are deemed economically similar, those components are aggregated into one reporting unit for purposes of the Company’s annual goodwill impairment review. No components have been aggregated for the annual impairment review.

During the years ended December 31, 2012 and 2011, the Company assessed qualitative factors to determine whether it was more likely than not that the fair value of the Company’s reporting units were less than their carrying amounts as a basis for determining whether it was necessary to perform the traditional two-step goodwill impairment test. Based on these analyses, none of the Company’s reporting units were considered more likely than not to be impaired as of December 31, 2012 or 2011. During the year ended December 31, 2010, management estimated the fair values of the Company’s reporting units using a discounted cash flow methodology, which incorporated five-year projections of revenues, operating costs and cash flows considering historical and anticipated future results, general economic and market conditions, as well as the impact of planned business and operational strategies. Management applied a discounted cash flow technique utilizing a terminal value equal to 5.5 times year five EBITDA, which is defined as income from continuing operations before non-controlling interests before interest, taxes, depreciation and amortization. The discount rate was estimated to be 8.5% per annum and represented the Company’s estimated cost of capital at the time of the analysis. A 100 basis point change in the discount rate would not have had a material impact on the results of the impairment analyses. Based upon the Company's analysis, the estimated fair values of the Company’s reporting units for its continuing operations businesses were determined to substantially exceed their carrying values for each of the three years in the period ended December 31, 2012. In September 2012, MasTec's board of directors approved a plan of sale for the Globetec business. In connection with its decision to sell Globetec, the Company recognized impairment losses of $12.7 million, including $6.4 million of goodwill impairment charges, during the third quarter of 2012.

During the year ended December 31, 2012, the Company assessed qualitative factors to determine if it was more likely than not that the fair values of its indefinite-lived intangible assets were less than their carrying amounts. For the years ended December 31, 2011 and 2010, management estimated the fair values of its indefinite-lived intangible assets based on estimates of growth rates for the related businesses and estimated future economic conditions. Based upon the results of these analyses, there were no impairments of the Company's indefinite-lived intangible assets for its continuing operations businesses in any of the years in the three year period ended December 31, 2012.

See Note 4 - Discontinued Operations for details of the Globetec discontinued operation.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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