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Related Party Transactions
6 Months Ended
Jun. 30, 2017
Related Party Transactions [Abstract]  
Related Party Transactions
Note 15 - Related Party Transactions
For the three month periods ended June 30, 2017 and 2016, 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 $0.2 million and $0.3 million, respectively, and for the six month periods ended June 30, 2017 and 2016, totaled $0.3 million and $0.6 million, respectively. As of June 30, 2017 and December 31, 2016, receivables from this contractual joint venture totaled $0.8 million and $0.7 million, respectively. Related performance guarantees, which are based on the original full contract value, as of both June 30, 2017 and December 31, 2016, totaled Canadian $132.1 million (or approximately $101.9 million and $98.3 million, respectively). In connection with this contractual joint venture, the Company provided project-related financing of $2.3 million and $3.1 million, respectively, for the three and six month periods ended June 30, 2017, and $1.4 million and $4.9 million, respectively, for the three and six month periods ended June 30, 2016. As of June 30, 2017, there were no additional amounts committed to this entity.
In connection with an April 2017 acquisition, the Company acquired a 40% interest in an entity, valued at $0.4 million. The Company has a subcontracting arrangement with this entity. For the three month period ended June 30, 2017, the Company incurred $0.2 million of expenses under this subcontracting arrangement, and associated amounts payable as of June 30, 2017 totaled $0.1 million. Amounts advanced to this entity during the second quarter of 2017, which amount was outstanding as of June 30, 2017, totaled $0.3 million. Additionally, during the second quarter of 2017, in connection with this acquisition, the Company made payments of $3.8 million under a vendor financing arrangement to an entity that is owned by a member of subsidiary management. As of June 30, 2017, related payables totaled approximately $1.4 million.
During the second quarter of 2017, the Company committed to invest $2.0 million in connection with its expected approximate 4% interest in a special purpose acquisition corporation, focusing on transactions in the telecommunications industry, upon completion of its initial public offering, which occurred in the third quarter of 2017. Upon completion of the offering, José R. Mas, MasTec’s Chief Executive Officer, became a director of this corporation and another employee of the Company is this corporation’s Chief Executive Officer.
MasTec purchases, rents and leases equipment used in its business from a number of different vendors on a non-exclusive basis, including CCI, in which the Company has a cost method investment. Juan Carlos Mas, who is the brother of Jorge Mas, Chairman of MasTec’s Board of Directors, and José R. Mas, serves as the chairman of CCI. For the three month periods ended June 30, 2017 and 2016, MasTec paid CCI approximately $11.0 million and $2.8 million, respectively, for equipment supplies, rentals, leases and servicing. For the six month periods ended June 30, 2017 and 2016, MasTec paid CCI approximately $12.0 million and $3.6 million, respectively, net of rebates. As of June 30, 2017 and December 31, 2016, related payables totaled approximately $10.9 million and $1.5 million, respectively.
MasTec has a subcontracting arrangement with an entity for the performance of construction services, the minority owners of which include an entity controlled by Jorge Mas and José R. Mas, along with two members of management of a MasTec subsidiary. For the three month periods ended June 30, 2017 and 2016, MasTec incurred $15.0 million and $1.8 million, respectively, of expenses under this subcontracting arrangement, and for the six month periods ended June 30, 2017 and 2016, MasTec incurred $15.5 million and $3.3 million, respectively. As of June 30, 2017 and December 31, 2016, related amounts payable totaled $6.5 million and $0.1 million, respectively.
MasTec leases employees to a customer in which Jorge Mas and José R. Mas own a majority interest. For both three month periods ended June 30, 2017 and 2016, MasTec charged approximately $0.2 million to this customer, and for both the six month periods ended June 30, 2017 and 2016, charged $0.4 million. As of both June 30, 2017 and December 31, 2016, outstanding receivables from employee leasing arrangements with this customer totaled $0.2 million. The Company also provides satellite communication services to this customer. For both three month periods ended June 30, 2017 and 2016, revenue from satellite communication services provided to this customer totaled approximately $0.2 million, and for both the six month periods ended June 30, 2017 and 2016, satellite communication revenues totaled $0.4 million. As of June 30, 2017 and December 31, 2016, receivables from this arrangement totaled approximately $0.3 million and $0.4 million, respectively.
MasTec has a leasing arrangement with a third party that leases an aircraft from a Company owned by Jorge Mas. For the three month periods ended June 30, 2017 and 2016, MasTec paid $0.5 million and $0.6 million, respectively, under this leasing arrangement, and for the six month periods ended June 30, 2017 and 2016, MasTec paid $1.0 million and $1.3 million, respectively. As of June 30, 2017, there were no related amounts payable, and, as of December 31, 2016, related amounts payable were de minimis.
For the three month periods ended June 30, 2017 and 2016, related party lease payments for operational facilities and equipment, which are primarily associated with members of subsidiary management, totaled approximately $14.4 million and $9.9 million, respectively, and for the six month periods ended June 30, 2017 and 2016, related party lease payments totaled approximately $27.1 million and $19.1 million, respectively. Payables associated with related party leases totaled approximately $0.2 million and $0.3 million as of June 30, 2017 and December 31, 2016, respectively. Additionally, 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 $7.9 million and $3.6 million for the three month periods ended June 30, 2017 and 2016, respectively, and totaled $14.5 million and $6.8 million for the six month periods ended June 30, 2017 and 2016, respectively. As of June 30, 2017 and December 31, 2016, associated amounts payable totaled approximately $3.9 million and $3.7 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, which transactions are eliminated in consolidation. The Company made distributions of earnings of $1.3 million in the first quarter of 2017 to holders of its non-controlling interests.
Split Dollar Agreements
MasTec has split dollar insurance agreements with each of José R. Mas and Jorge Mas. The Company paid $0.7 million and $0.5 million in the second quarter of 2017 in connection with the agreements for José R. Mas and Jorge Mas, respectively. The Company paid $0.7 million and $0.5 million in the second quarter of 2016 in connection with the agreements for José R. Mas and Jorge Mas, respectively. As of June 30, 2017 and December 31, 2016, life insurance assets associated with these agreements totaled $16.0 million and $14.8 million, respectively, which amount is included within other long-term assets.