Supplemental Guarantor Financial Information

9 Months Ended

Sep. 30, 2019

Condensed Unaudited Financial Statements, Supplemental Guarantor Information [Abstract]

Supplemental Guarantor Financial Information

Note 16 – Supplemental Guarantor Condensed Consolidating Financial Information

The 4.875% Senior Notes are fully and unconditionally guaranteed on an unsecured, unsubordinated, joint and several basis by certain of the Company’s existing and future 100%-owned direct and indirect domestic subsidiaries that are, as of September 30, 2019, each guarantors of the Credit Facility or other outstanding indebtedness (the “Guarantor Subsidiaries”). The Company’s subsidiaries organized outside of the United States and certain domestic subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) do not guarantee these notes. A Guarantor Subsidiary’s guarantee is subject to release in certain customary circumstances, including upon the sale of a majority of the capital stock or substantially all of the assets of such Guarantor Subsidiary; if the Guarantor Subsidiary’s guarantee under the Company’s Credit Facility and other indebtedness is released or discharged (other than due to payment under such guarantee); or when the requirements for legal defeasance are satisfied or the obligations are discharged in accordance with the related indentures.

The following supplemental financial information sets forth the condensed consolidating balance sheets and the condensed consolidating statements of operations and comprehensive income (loss) and cash flows for MasTec, Inc., the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis and the eliminations necessary to arrive at the information for the Company as reported on a consolidated basis. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among MasTec, Inc., the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries.  Investments in subsidiaries are accounted for using the equity method for this presentation.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (unaudited - in millions)

For the Three Months Ended September 30, 2019	MasTec, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated MasTec, Inc.
Revenue	$	—		$	1,916.8		$	126.4		$	(26.6	)	$	2,016.6
Costs of revenue, excluding depreciation and amortization	—			1,609.2			108.0			(26.6		)	1,690.6
Depreciation and amortization	—			51.8			3.4			—			55.2
General and administrative expenses	0.8			72.2			4.1			—			77.1
Interest expense (income), net	—			35.4			(16.1		)	—			19.3
Equity in earnings of unconsolidated affiliates	—			—			(7.0		)	—			(7.0		)
Other expense (income), net	—			8.6			(0.6		)	—			8.0
(Loss) income before income taxes	$	(0.8	)	$	139.6		$	34.6		$	—		$	173.4
Benefit from (provision for) income taxes	0.2			(39.1		)	(4.4		)	—			(43.3		)
Net (loss) income before equity in income from subsidiaries	$	(0.6	)	$	100.5		$	30.2		$	—		$	130.1
Equity in income from subsidiaries, net of tax	129.2			—			—			(129.2		)	—
Net income (loss)	$	128.6		$	100.5		$	30.2		$	(129.2	)	$	130.1
Net income attributable to non-controlling interests	—			—			1.5			—			1.5
Net income (loss) attributable to MasTec, Inc.	$	128.6		$	100.5		$	28.7		$	(129.2	)	$	128.6
Comprehensive income (loss)	$	121.2		$	100.5		$	22.7		$	(121.7	)	$	122.6

For the Three Months Ended September 30, 2018	MasTec, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated MasTec, Inc.
Revenue	$	—		$	1,894.5		$	102.3		$	(19.6	)	$	1,977.2
Costs of revenue, excluding depreciation and amortization	—			1,603.0			98.0			(19.6		)	1,681.4
Depreciation and amortization	—			49.7			5.2			—			54.9
General and administrative expenses	0.7			73.2			6.4			—			80.3
Interest expense (income), net	—			38.7			(16.4		)	—			22.3
Equity in earnings of unconsolidated affiliates	—			—			(7.7		)	—			(7.7		)
Other expense (income), net	—			2.1			(1.8		)	—			0.3
(Loss) income before income taxes	$	(0.7	)	$	127.8		$	18.6		$	—		$	145.6
Benefit from (provision for) income taxes	0.2			(35.9		)	10.6			—			(25.1		)
Net (loss) income before equity in income from subsidiaries	$	(0.5	)	$	91.9		$	29.2		$	—		$	120.5
Equity in income from subsidiaries, net of tax	121.2			—			—			(121.2		)	—
Net income (loss)	$	120.7		$	91.9		$	29.2		$	(121.2	)	$	120.5
Net loss attributable to non-controlling interests	—			—			(0.1		)	—			(0.1		)
Net income (loss) attributable to MasTec, Inc.	$	120.7		$	91.9		$	29.3		$	(121.2	)	$	120.7
Comprehensive income (loss)	$	124.9		$	91.9		$	33.6		$	(125.5	)	$	124.9

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (unaudited - in millions)

For the Nine Months Ended September 30, 2019	MasTec, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated MasTec, Inc.
Revenue	$	—		$	5,164.0		$	388.9		$	(78.9	)	$	5,474.0
Costs of revenue, excluding depreciation and amortization	—			4,354.7			360.2			(78.9		)	4,636.0
Depreciation and amortization	—			161.7			12.5			—			174.2
General and administrative expenses	2.3			205.6			12.7			—			220.6
Interest expense (income), net	—			105.6			(47.4		)	—			58.2
Equity in losses (earnings) of unconsolidated affiliates	—			0.1			(19.9		)	—			(19.8		)
Other expense (income), net	—			53.9			(37.6		)	—			16.3
(Loss) income before income taxes	$	(2.3	)	$	282.4		$	108.4		$	—		$	388.5
Benefit from (provision for) income taxes	0.7			(90.1		)	(5.7		)	—			(95.1		)
Net (loss) income before equity in income from subsidiaries	$	(1.6	)	$	192.3		$	102.7		$	—		$	293.4
Equity in income from subsidiaries, net of tax	293.0			—			—			(293.0		)	—
Net income (loss)	$	291.4		$	192.3		$	102.7		$	(293.0	)	$	293.4
Net income attributable to non-controlling interests	—			—			2.0			—			2.0
Net income (loss) attributable to MasTec, Inc.	$	291.4		$	192.3		$	100.7		$	(293.0	)	$	291.4
Comprehensive income (loss)	$	269.8		$	192.3		$	81.1		$	(271.4	)	$	271.8

For the Nine Months Ended September 30, 2018	MasTec, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated MasTec, Inc.
Revenue	$	—		$	4,717.0		$	372.0		$	(97.1	)	$	4,991.9
Costs of revenue, excluding depreciation and amortization	—			4,048.2			334.2			(97.1		)	4,285.3
Depreciation and amortization	—			139.2			17.3			—			156.5
General and administrative expenses	2.3			195.6			13.6			—			211.5
Interest expense (income), net	—			108.7			(48.5		)	—			60.2
Equity in earnings of unconsolidated affiliates	—			—			(19.1		)	—			(19.1		)
Other expense (income), net	—			0.8			(2.8		)	—			(2.0		)
(Loss) income before income taxes	$	(2.3	)	$	224.5		$	77.3		$	—		$	299.4
Benefit from (provision for) income taxes	0.6			(60.9		)	(11.7		)	—			(72.0		)
Net (loss) income before equity in income from subsidiaries	$	(1.7	)	$	163.6		$	65.6		$	—		$	227.4
Equity in income from subsidiaries, net of tax	229.4			—			—			(229.4		)	—
Net income (loss)	$	227.7		$	163.6		$	65.6		$	(229.4	)	$	227.4
Net loss attributable to non-controlling interests	—			—			(0.3		)	—			(0.3		)
Net income (loss) attributable to MasTec, Inc.	$	227.7		$	163.6		$	65.9		$	(229.4	)	$	227.7
Comprehensive income (loss)	$	240.6		$	163.6		$	78.3		$	(242.2	)	$	240.3

CONDENSED CONSOLIDATING BALANCE SHEETS (unaudited - in millions)

As of September 30, 2019	MasTec, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated MasTec, Inc.
Assets
Total current assets	$	—	$	2,036.8	$	266.5	$	(104.6	)	$	2,198.7
Property and equipment, net	—		821.7		41.2		—			862.9
Operating lease assets	—		216.9		16.5		—			233.4
Goodwill and other intangible assets, net	—		1,244.5		81.3		—			1,325.8
Investments in and advances to consolidated affiliates, net	1,656.2		1,118.9		843.0		(3,618.1		)	—
Other long-term assets	18.4		39.2		180.2		—			237.8
Total assets	$	1,674.6	$	5,478.0	$	1,428.7	$	(3,722.7	)	$	4,858.7
Liabilities and equity
Total current liabilities	$	—	$	1,319.2	$	119.9	$	(104.6	)	$	1,334.5
Long-term debt, including finance leases	—		1,217.6		3.5		—			1,221.1
Long-term operating lease liabilities	—		146.8		12.5		—			159.3
Other long-term liabilities	—		454.6		9.8		—			464.4
Total liabilities	$	—	$	3,138.2	$	145.7	$	(104.6	)	$	3,179.3
Total equity	$	1,674.6	$	2,339.8	$	1,283.0	$	(3,618.1	)	$	1,679.3
Total liabilities and equity	$	1,674.6	$	5,478.0	$	1,428.7	$	(3,722.7	)	$	4,858.7

As of December 31, 2018	MasTec, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated MasTec, Inc.
Assets
Total current assets	$	—	$	1,993.0	$	248.5	$	(72.5	)	$	2,169.0
Property and equipment, net	—		699.2		48.6		—			747.8
Goodwill and other intangible assets, net	—		1,188.0		81.7		—			1,269.7
Investments in and advances to consolidated affiliates, net	1,373.1		1,138.4		816.9		(3,328.4		)	—
Other long-term assets	16.8		42.0		194.6		—			253.4
Total assets	$	1,389.9	$	5,060.6	$	1,390.3	$	(3,400.9	)	$	4,440.0
Liabilities and equity
Total current liabilities	$	—	$	1,185.9	$	170.2	$	(72.5	)	$	1,283.6
Long-term debt, including finance leases	—		1,319.4		4.9		—			1,324.2
Other long-term liabilities	—		429.2		10.8		—			440.1
Total liabilities	$	—	$	2,934.5	$	185.9	$	(72.5	)	$	3,047.9
Total equity	$	1,389.9	$	2,126.1	$	1,204.4	$	(3,328.4	)	$	1,392.0
Total liabilities and equity	$	1,389.9	$	5,060.6	$	1,390.3	$	(3,400.9	)	$	4,440.0

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (unaudited - in millions)

For the Nine Months Ended September 30, 2019	MasTec, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated MasTec, Inc.
Net cash provided by operating activities	$	—		$	416.5		$	24.9		$	—	$	441.4
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired	—			(94.6		)	—			—		(94.6		)
Capital expenditures	—			(81.5		)	(3.6		)	—		(85.1		)
Proceeds from sale of property and equipment	—			17.5			9.6			—		27.1
Payments for other investments	—			(4.3		)	(1.3		)	—		(5.6		)
Proceeds from other investments	—			10.8			3.9			—		14.7
Net cash (used in) provided by investing activities	$	—		$	(152.1	)	$	8.6		$	—	$	(143.5	)
Cash flows from financing activities:
Proceeds from credit facilities	—			2,175.7			10.0			—		2,185.7
Repayments of credit facilities	—			(2,362.0		)	(10.0		)	—		(2,372.0		)
Repayments of other borrowings, net	—			(0.3		)	—			—		(0.3		)
Payments of finance lease obligations	—			(57.5		)	(1.5		)	—		(59.0		)
Payments of acquisition-related contingent consideration	—			(29.3		)	—			—		(29.3		)
Proceeds from non-controlling interests	—			—			0.6			—		0.6
Repurchases of common stock	(5.7		)	—			—			—		(5.7		)
Proceeds from stock-based awards, net	3.4			—			—			—		3.4
Other financing activities, net	—			(5.5		)	—			—		(5.5		)
Net financing activities and advances from (to) consolidated affiliates	2.3			21.4			(23.7		)	—		—
Net cash used in financing activities	$	—		$	(257.5	)	$	(24.6	)	$	—	$	(282.0	)
Effect of currency translation on cash	—			—			(0.2		)	—		(0.2		)
Net increase in cash and cash equivalents	$	—		$	6.9		$	8.7		$	—	$	15.7
Cash and cash equivalents - beginning of period	$	—		$	11.9		$	15.6		$	—	$	27.4
Cash and cash equivalents - end of period	$	—		$	18.8		$	24.3		$	—	$	43.1

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (unaudited - in millions)

For the Nine Months Ended September 30, 2018	MasTec, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated MasTec, Inc.
Net cash (used in) provided by operating activities	$	—		$	(105.3	)	$	132.1		$	—	$	26.8
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired	—			(6.7		)	—			—		(6.7		)
Capital expenditures	—			(130.1		)	(4.1		)	—		(134.2		)
Proceeds from sale of property and equipment	—			20.2			9.5			—		29.7
Payments for other investments	—			(11.8		)	(24.5		)	—		(36.3		)
Proceeds from other investments	—			—			5.4			—		5.4
Net cash used in investing activities	$	—		$	(128.4	)	$	(13.7	)	$	—	$	(142.1	)
Cash flows from financing activities:
Proceeds from credit facilities	—			2,396.7			25.9			—		2,422.6
Repayments of credit facilities	—			(1,971.2		)	(26.2		)	—		(1,997.4		)
Repayments of other borrowings, net	—			(15.5		)	(0.4		)	—		(15.8		)
Payments of finance lease obligations	—			(49.8		)	(4.7		)	—		(54.6		)
Payments of acquisition-related contingent consideration	—			(15.9		)	—			—		(15.9		)
Repurchases of common stock	(198.4		)	—			—			—		(198.4		)
Distributions to non-controlling interests	—			(0.6		)	—			—		(0.6		)
Proceeds from stock-based awards, net	3.1			—			—			—		3.1
Net financing activities and advances from (to) consolidated affiliates	195.3			(71.5		)	(123.8		)	—		—
Net cash provided by (used in) financing activities	$	—		$	272.2		$	(129.2	)	$	—	$	142.9
Effect of currency translation on cash	—			—			0.6			—		0.6
Net increase (decrease) in cash and cash equivalents	$	—		$	38.5		$	(10.2	)	$	—	$	28.2
Cash and cash equivalents - beginning of period	$	—		$	10.0		$	30.3		$	—	$	40.3
Cash and cash equivalents - end of period	$	—		$	48.5		$	20.1		$	—	$	68.5