Lease Obligations

12 Months Ended

Dec. 31, 2012

Leases [Abstract]

Lease Obligations

Lease Obligations

Capital Leases

MasTec enters into agreements that provide financing for various machinery and equipment that expire on various dates. Leases meeting certain criteria are capitalized, with the related asset being recorded in property and equipment and an offsetting amount recorded as a liability. Capital lease additions are reflected in the consolidated statements of cash flows within the supplemental disclosures of non-cash information. Assets held under capital lease totaled $102.2 million and $27.7 million as of December 31, 2012 and 2011, respectively.

In January 2011, the Company modified the terms of certain of its equipment operating leases. These modifications led to a change in the classification of the corresponding leases from operating to capital as of the effective date of the lease modifications. Accordingly, $23.4 million of capital lease assets and corresponding capital lease obligations were recorded in the Company’s consolidated balance sheet as of January 1, 2011.

Operating Leases

In the ordinary course of business, the Company enters into non-cancelable operating leases for certain of its facility, vehicle and equipment needs, including related party leases. These leases allow the Company to conserve cash and provide flexibility in that the Company pays a monthly rental fee for the use of related facilities, vehicles and equipment rather than purchasing them. The terms of these agreements vary from lease to lease, including some with renewal options and escalation clauses. The Company may decide to cancel or terminate a lease before the end of its term, in which case the Company is typically liable for the remaining lease payments under the term of the lease. For operating leases with purchase options, the option to purchase equipment is at estimated fair market value. Rent expense relating to operating leases, including short term rentals, reflected within continuing operations, was approximately $222.5 million, $168.8 million and $129.3 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Future Lease Commitments

Minimum future lease commitments under capital leases and non-cancelable operating leases, including the effect of escalation clauses in effect as of December 31, 2012, were as follows (in millions):

	Capital Leases			Operating Leases
2013	$	31.2		$	37.2
2014	21.5			23.4
2015	16.5			14.6
2016	9.0			7.0
2017	3.6			4.0
Thereafter	0.4			0.8
Total minimum lease payments	$	82.2		$	87.0
Less amounts representing interest	(3.2		)
Total capital lease obligations, net of interest	$	79.0
Less current portion	(31.0		)
Long term portion of capital lease obligations, net of interest	$	48.0