Related Party Transactions

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

Related Party Transactions

Note 15 – Related Party Transactions

MasTec purchases, rents and leases equipment and purchases various types of supplies and services used in its business, including ancillary construction services, project-related site restoration and marketing and business development activities, from a number of different vendors on a non-exclusive basis, and from time to time, rents equipment to, or performs construction services on behalf of, entities in which members of subsidiary management have ownership or commercial interests. For the three month periods ended June 30, 2020 and 2019, such payments to related party entities totaled approximately $16.2 million and $17.8 million, respectively, and for the six month periods ended June 30, 2020 and 2019, totaled approximately $41.5 million and $46.3 million, respectively. Related payables totaled approximately $7.6 million and $14.7 million as of June 30, 2020 and December 31, 2019, respectively. Revenue from such related party arrangements totaled approximately $1.3 million and $0.6 million for the three month periods

ended June 30, 2020 and 2019, respectively, and totaled $2.3 million and $0.9 million for the six month periods ended June 30, 2020 and 2019, respectively. As of June 30, 2020, related amounts receivable, net, totaled approximately $0.4 million, and as of December 31, 2019, were de minimis.

In 2018, MasTec acquired a construction management firm specializing in steel building systems, of which Juan Carlos Mas, who is the brother of Jorge Mas, Chairman of MasTec’s Board of Directors, and José R. Mas, MasTec’s Chief Executive Officer, was a minority owner. Amounts outstanding for advances made by the Company on behalf of this entity totaled approximately $0.1 million and $0.5 million, net as of June 30, 2020 and December 31, 2019, respectively, which are expected to be settled under customary terms associated with the related purchase agreement.

The Company rents and leases equipment and purchases equipment supplies and servicing from CCI, in which it has a 15% equity investment. Juan Carlos Mas serves as the chairman of CCI, and a member of management of a MasTec subsidiary and an entity that is owned by the Mas family are minority owners. MasTec paid CCI, net of rebates, $1.0 million and $9.8 million, respectively, for the three month periods ended June 30, 2020 and 2019, and $1.4 million and $15.8 million, respectively, for the six month periods ended June 30, 2020 and 2019. As of June 30, 2020 and December 31, 2019, amounts payable to CCI, net of rebates receivable, totaled approximately $1.4 million and $0.2 million, respectively. The Company has also rented equipment to CCI. Revenue from equipment rentals to CCI totaled approximately $0.6 million for both the three and six month periods ended June 30, 2020, and related receivables totaled approximately $0.1 million as of June 30, 2020.

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. No subcontracting expenses were incurred by MasTec for the three month period ended June 30, 2020. MasTec incurred subcontracting expenses of approximately $4.6 million for the three month period ended June 30, 2019. MasTec incurred subcontracting expenses of approximately $0.6 million, net and $6.2 million for the six month periods ended June 30, 2020 and 2019, respectively. As of both June 30, 2020 and December 31, 2019, related amounts payable totaled approximately $0.2 million.

MasTec has a leasing arrangement for an aircraft that is owned by an entity that Jorge Mas owns. For the three month periods ended June 30, 2020 and 2019, MasTec paid approximately $0.6 million and $0.7 million, respectively, related to this leasing arrangement, and for the six month periods ended June 30, 2020 and 2019, paid approximately $1.3 million and $1.4 million, respectively.

MasTec performs construction services on behalf of a professional Miami soccer franchise (the “Franchise”) in which Jorge Mas and José R. Mas are minority owners. Services provided by MasTec include the construction of a soccer facility and stadium, including wireless infrastructure services. MasTec charged approximately $1.5 million and $5.5 million under these arrangements for the three and six month periods ended June 30, 2020, respectively, and charged approximately $2.3 million for both the three and six month periods ended June 30, 2019. Amounts outstanding as of June 30, 2020 and December 31, 2019 totaled approximately $3.1 million and $3.9 million, respectively. Payments for other expenses related to the Franchise totaled $0.2 million for the six month period ended June 30, 2020.

MasTec leases employees and provides satellite communications services to a customer in which Jorge Mas and José R. Mas own a majority interest. Charges to this customer totaled approximately $0.3 million and $0.4 million, respectively, for the three month periods ended June 30, 2020 and 2019, and for both the six month periods ended June 30, 2020 and 2019 totaled approximately $0.7 million. As of June 30, 2020 and December 31, 2019, outstanding receivables related to these arrangements totaled approximately $0.9 million and $0.8 million, respectively.

Split Dollar Agreements

MasTec has split dollar life insurance agreements with trusts, of which Jorge Mas or José R. Mas is a trustee. The company paid $0.5 million and $0.7 million in the second quarters of both 2020 and 2019 in connection with the agreements for Jorge Mas and José R. Mas, respectively. As of June 30, 2020 and December 31, 2019, life insurance assets associated with these agreements totaled approximately $21.5 million and $20.3 million, respectively.