Acquisitions

Allocations of purchase prices for acquisitions are based on estimates of the fair value of consideration paid and of the net assets acquired and are subject to adjustment upon finalization of these fair value estimates. In the second and third quarters of 2013 and in December 2012, the Company acquired certain businesses, as discussed below and in Note 3 - Acquisitions and Other Investments of the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2012. As of September 30, 2013, the allocations of purchase prices to the fair values of tangible and intangible assets and liabilities, including the estimated values of contingent earn-out obligations and the estimated useful lives of acquired assets for these acquisitions, are provisional and remain preliminary as management continues to assess the valuation of these items and any ultimate purchase price adjustments that may result based on the final net assets and net working capital of the acquired businesses, as prescribed in the corresponding purchase agreements.

During the three and nine month periods ended September 30, 2013, the Company revised its preliminary allocations for certain of the 2013 and 2012 acquisitions based on new information about the facts and circumstances existing as of the respective dates of such acquisitions, or, for purchase price adjustments, based on the final net assets and net working capital of the businesses acquired, as prescribed in the relevant purchase agreements. These adjustments resulted in the recognition of, or adjusted the fair values of, certain acquired assets and assumed liabilities, which, for the 2012 acquisitions, resulted in the revision of comparative prior period financial information. Such measurement period adjustments are presented as if the adjustments had been taken into account as of the dates of the respective acquisitions. All changes that do not qualify as measurement period adjustments are included in current period earnings.

2013 Acquisitions

Big Country

Effective May 1, 2013, MasTec acquired all of the issued and outstanding interests of Big Country Energy Services, Inc. and its affiliated operating companies (collectively, "Big Country"). Big Country is a North American oil and gas pipeline and facility construction services company, headquartered in Calgary, Alberta, Canada. Big Country also has construction offices in Alberta, British Columbia and Saskatchewan, as well as in Wyoming and North Dakota. Big Country's services include oil, natural gas and natural gas liquids gathering systems and pipeline construction; pipeline modification and replacement services; compressor and pumping station construction; and other related services supporting the oil and gas production, processing and transportation industries. Big Country is expected to significantly expand MasTec's ability to take advantage of the rapidly expanding opportunities anticipated for energy infrastructure work in North America in the coming years. Big Country is reported within the Company's oil and gas segment.

The following table summarizes the preliminary estimated fair value of consideration paid and the identifiable assets acquired and liabilities assumed, as adjusted, as of the date of acquisition (in millions):



Purchase price consideration:	May 1, 2013
Cash	$	103.5
Fair value of contingent consideration (earn-out liability)	22.8
Total consideration transferred	$	126.3
Identifiable assets acquired and liabilities assumed:
Current assets	$	69.0
Property and equipment	44.0
Pre-qualifications	29.6
Finite-lived intangible assets	10.7
Current liabilities	(21.7		)
Long-term debt	(24.4		)
Deferred income taxes	(13.1		)
Total identifiable net assets	$	94.1
Goodwill	$	32.2
Total net assets acquired, including goodwill	$	126.3

The fair values and weighted average useful lives of Big Country's acquired finite-lived intangible assets, as adjusted, as of the date of acquisition were assigned as follows:



	Fair Value		Weighted Average Useful Life
	(in millions)		(in years)
Backlog	$	1.9	1
Non-compete agreements	1.8		8
Customer relationships	7.0		6
Total acquired amortizing intangibles	$	10.7	5

Finite-lived intangible assets will be amortized in a manner consistent with the pattern in which the related benefits are expected to be consumed. The intangible asset related to Big Country's pre-qualifications with companies in the oil and gas industry has been assigned an indefinite life as the pre-qualifications do not expire or diminish in value, and the companies to which they relate have extremely long operating histories. Goodwill arising from the acquisition represents the estimated value of Big Country's geographic presence in key high growth Canadian markets, its assembled workforce, its management team's industry-specific project management expertise and synergies expected to be achieved from the combined operations of Big Country and MasTec. As of the date of acquisition, the total amount of goodwill expected to be deductible for tax purposes was $4.0 million.

The contingent earn-out obligation is equal to 25% of the excess, if any, of Big Country’s annual earnings before interest, taxes, depreciation and amortization ("EBITDA") above certain thresholds for a five-year period, as set forth in the purchase agreement, and is payable annually in cash. The fair value of the earn-out liability was estimated using an income approach and incorporates significant inputs not observable in the market. Key assumptions in the estimated valuation include the discount rate and probability-weighted EBITDA projections. The range of potential undiscounted payments that MasTec could be required to make under the earn-out arrangement is estimated to be between $1 million and $110 million; however, there is no maximum earn-out payment amount.

Other 2013 Acquisitions

Effective April 1, 2013, MasTec acquired a former subcontractor to its wireless business, which will provide self-perform communications tower construction, installation, maintenance and other services in support of telecommunications infrastructure construction in the Company's communications segment. In addition, effective August 1, 2013, MasTec acquired an electrical transmission services company, which focuses primarily on substation construction activities within the Company's electrical transmission segment.

Unaudited Pro Forma Information - 2013 Acquisitions

The following unaudited supplemental pro forma results of operations include the results of operations of each of the companies acquired in 2013 as if each had been consolidated as of January 1, 2012 and have been provided for illustrative purposes only. These unaudited pro forma results of operations do not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented, or of the results that may be achieved by the combined companies in the future. Future results may vary significantly from the results reflected in the following unaudited pro forma financial information because of future events and transactions, as well as other factors, many of which are beyond MasTec’s control.

The unaudited pro forma combined results of operations presented below for three and nine month periods ended September 30, 2013 and 2012, respectively, have been prepared by adjusting the historical results of MasTec to include the historical results of the acquisitions described above as if they occurred on January 1, 2012. The unaudited pro forma combined historical results were then adjusted (i) to remove one-time acquisition costs; (ii) to increase amortization expense resulting from incremental intangible assets acquired in such acquisitions; (iii) to increase interest expense as a result of the cash consideration paid; and (iv) to reduce interest expense from the repayment of acquired debt. The unaudited pro forma results of operations do not include any adjustments to reflect the impact of cost savings or other synergies that may result from these acquisitions. As noted above, the unaudited pro forma results of operations do not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achieved by the combined company in the future.



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2013		2012		2013		2012
	(unaudited, in millions)				(unaudited, in millions)
Revenue	$	1,273.6	$	1,158.7	$	3,284.9	$	3,026.2
Net income from continuing operations	$	50.0	$	42.7	$	113.4	$	88.9

Results of Businesses Acquired in 2013

Revenues and net income from the Company's 2013 acquisitions for the periods indicated are as follows (in millions):



	For the Three Months Ended September 30, 2013		For the Nine Months Ended September 30, 2013
Revenue	$	101.8	$	141.4
Net income	$	6.2	$	7.7

The above results do not include acquisition costs of $0.3 million and $1.5 million for the three and nine month periods ended September 30, 2013, respectively, and also do not include interest expense associated with consideration paid for these acquisitions.

2012 Acquisitions

Effective December 1, 2012, MasTec acquired all of the issued and outstanding interests of Bottom Line Services, LLC ("BLS"), a natural gas and petroleum pipeline infrastructure services company for an aggregate purchase price composed of approximately $67.6 million in cash and a five year earn-out, valued at $11.1 million as of the date of acquisition. BLS's services include pipeline and facilities construction, painting and maintenance services, primarily in eastern Texas. Additionally, effective December 1, 2012, MasTec acquired a former subcontractor to MasTec's oil and gas business, which provides self-perform clearing and trenching services for natural gas and petroleum pipeline infrastructure construction, and also acquired a former subcontractor to MasTec's wireless business, which provides self-perform communications tower construction, installation, maintenance and other services in support of telecommunications infrastructure construction.

Results of Businesses Acquired in 2012

Revenues and net income from the Company's 2012 acquisitions for the periods indicated are as follows (in millions):



	For the Three Months Ended September 30, 2013		For the Nine Months Ended September 30, 2013
Revenue	$	39.9	$	129.0
Net income	$	1.4	$	5.2

The above results do not include interest expense associated with consideration paid for these acquisitions.

Measurement Period Adjustments

Measurement period adjustments associated with the Company's 2012 acquisitions have been reflected in the Company's December 31, 2012 consolidated balance sheet as follows (in millions):



As of December 31, 2012	As Previously Reported		Measurement Period Adjustments/Reclassifications			As Revised
Current assets	$	1,047.1	$	2.5		$	1,049.6
Property and equipment, net	$	350.4	$	(0.2	)	$	350.2
Goodwill	$	820.3	$	4.7		$	825.0
Other long-term assets, including discontinued operations	$	53.1	$	1.1		$	54.2
Current liabilities	$	705.7	$	8.1		$	713.8