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Related Party Transactions
12 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
Related Party Transactions
Note 15 - Related Party Transactions
For the years ended December 31, 2016, 2015, and 2014 revenue recognized by the Company’s Pacer subsidiary for work performed for a contractual joint venture in which it holds a 35% undivided interest totaled $1.0 million, $2.1 million and $1.7 million, respectively. As of December 31, 2016 and 2015, receivables from this contractual joint venture totaled $0.7 million and $1.2 million, respectively. Related performance guarantees as of both December 31, 2016 and 2015 totaled Canadian $132.1 million (or approximately $98.3 million and $95.4 million, respectively), based on the full contract value of the project, of which approximately 80% had been completed as of December 31, 2016. In addition, for the year ended December 31, 2016, the Company provided $6.8 million of project-related financing in connection with this contractual joint venture. As of December 31, 2016, there were no additional amounts committed.
The Company has undivided interests of 85%, 85% and 90%, respectively, in three proportionately consolidated non-controlled contractual joint ventures that provide electrical transmission infrastructure services, for which the Company and its respective joint venture partners equally share voting and decision-making control.
For the year ended December 31, 2016, MasTec paid CCP, an entity in which the Company has a cost method investment, approximately $24.5 million, net of rebates of approximately $0.4 million, for equipment supplies, rentals, leases and servicing. For the years ended December 31, 2015 and 2014, MasTec paid CCP approximately $10.6 million and $6.3 million, respectively. As of December 31, 2016 and 2015, related payables totaled approximately $1.5 million and $0.6 million, respectively.
MasTec entered into a subcontracting arrangement in the first quarter of 2016 for the performance of construction services with an entity, the minority owners of which include an entity controlled by Jorge Mas, MasTec’s Chairman of the Board of Directors, and José R. Mas, MasTec’s Chief Executive Officer, along with two members of the management of a subsidiary of the Company. For the year ended December 31, 2016, MasTec incurred $12.9 million of expenses under this subcontracting arrangement and sold equipment totaling $0.3 million to this entity. As of December 31, 2016, related amounts payable totaled $0.1 million.
MasTec leases employees to a customer in which Jorge Mas and José R. Mas own a majority interest. For each of the years ended December 31, 2016 and 2015, MasTec charged approximately $0.8 million to this customer, and in 2014, charged approximately $0.7 million to this customer. As of December 31, 2016 and 2015, outstanding receivables from employee leasing arrangements with this customer totaled $0.2 million and $0.1 million, respectively. The Company also provides satellite communication services to this customer. For each of the years ended December 31, 2016 and 2015, revenue from satellite communication services provided to this customer totaled approximately $0.9 million, and in 2014, totaled approximately $1.0 million. As of December 31, 2016 and 2015, receivables totaled approximately $0.4 million and $0.3 million, respectively.
MasTec leases a property located in Florida from Irma S. Mas, the mother of Jorge Mas and José R. Mas. For each of the years ended December 31, 2016, 2015 and 2014, lease payments associated with this property totaled approximately $48,000.
The Company entered into a leasing arrangement in 2015 with a third party that leases an aircraft from a Company owned by Jorge Mas. For the year ended December 31, 2016, the Company paid $2.6 million under this leasing arrangement, and in 2015, payments under this arrangement were de minimis. As of December 31, 2016, related amounts payable were de minimis.
For the years ended December 31, 2016, 2015 and 2014, related party lease payments for operational facilities and equipment, typically associated with members of subsidiary management, totaled approximately $43.3 million, $22.1 million and $12.2 million, respectively. Payables associated with related party leases totaled approximately $0.3 million and $0.1 million as of December 31, 2016 and 2015, respectively. In addition, related party payments for various types of supplies and services, including ancillary construction services, project-related site restoration, and marketing and business development activities associated with members of subsidiary management totaled approximately $27.7 million, $10.5 million and $6.0 million for the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016 and 2015, related payables totaled approximately $3.7 million and $2.1 million, respectively.
Non-controlling interests in entities consolidated by the Company represent ownership interests held by certain members of management of several of the Company’s subsidiaries, primarily in our Oil and Gas segment, and the Company has a subcontracting arrangement with one of these entities for the performance of ancillary oil and gas construction services. Expense related to this subcontracting arrangement is eliminated in consolidation.
Split Dollar Agreements
MasTec has a split dollar agreement with Jorge Mas, under which MasTec is the sole owner of the policies subject to the agreement. The Company makes the premium payments under each of the policies. Upon the death of Jorge Mas or the survivor of Jorge Mas and his wife (collectively, the “Jorge Mas insureds”) under the applicable policy, MasTec is entitled to receive a portion of the death benefit under the policy equal to the greater of (i) premiums paid by the Company on the policy and (ii) the then cash value of the policy (excluding surrender charges or other similar charges or reductions) immediately before the triggering death. The balance of the death benefit is payable to the Jorge Mas trust or other beneficiary designated by the trustees. In the event of the Company’s bankruptcy or dissolution, the Jorge Mas trust shall have the assignable option to purchase the policies subject to the split dollar agreement from the Company. The purchase price for each policy shall be the greater of either the total premiums paid by the Company for the policy, or the then cash value of the policy, excluding surrender charges or other similar charges or reductions. The total maximum face amount of the insurance policies subject to the split dollar agreement is capped at $200 million. The Company is designated as the named fiduciary under the split dollar agreement, and the policy may not be surrendered without the express written consent of the Jorge Mas trust.
MasTec also has a split dollar agreement with José R. Mas, under which MasTec is the sole owner of each of the policies subject to the agreement. The Company makes the premium payments under each of the policies. Upon the death of José R. Mas or the survivor of José R. Mas and his wife (collectively, the “José R. Mas insureds”) under the applicable policy, MasTec is entitled to receive a portion of the death benefit under the policy equal to the greater of (i) premiums paid by the Company on the policy and (ii) the then cash value of the policy (excluding surrender charges or other similar charges or reductions) immediately before the triggering death. The balance of the death benefit is payable to the Jose Mas trust or other beneficiary designated by the trustees. In the event of the Company’s bankruptcy or dissolution, the Jose Mas trust shall have the assignable option to purchase the policies subject to the split dollar agreement from the Company. The purchase price for each policy shall be the greater of either the total premiums paid by the Company for the policy, or the then cash value of the policy, excluding surrender charges or other similar charges or reductions. The total maximum face amount of the insurance policies subject to the split dollar agreement is capped at $75 million. The Company is designated as the named fiduciary under the split dollar agreement, and the policy may not be surrendered without the express written consent of the Jose Mas trust.
In connection with the split dollar agreement for Jorge Mas, the Company paid approximately $1.1 million in each of the years ended December 31, 2016, 2015 and 2014. In connection with the split dollar agreement for José R. Mas, the Company paid approximately $0.7 million in each of the years ended December 31, 2016 and 2015, and for the year ended December 31, 2014, the Company received $0.1 million of proceeds from policies surrendered, net of premiums paid. As of December 31, 2016 and 2015, life insurance assets associated with these agreements totaled $14.8 million and $13.0 million, respectively, which were included within other long-term assets.