(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Costs of revenue, excluding depreciation and amortization | |||||||||||||||||||||||
Depreciation | |||||||||||||||||||||||
Amortization of intangible assets | |||||||||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | ( | ( | ( | ( | |||||||||||||||||||
Loss on extinguishment of debt | |||||||||||||||||||||||
Other (income) expense, net | ( | ( | |||||||||||||||||||||
Income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
Provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income attributable to non-controlling interests | |||||||||||||||||||||||
Net income attributable to MasTec, Inc. | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share (Note 2): | |||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Basic weighted average common shares outstanding | |||||||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted weighted average common shares outstanding |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||||||||
Foreign currency translation losses, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Unrealized gains (losses) on investment activity, net of tax | ( | ( | ( | ||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Comprehensive income attributable to non-controlling interests | |||||||||||||||||||||||
Comprehensive income attributable to MasTec, Inc. | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance | |||||||||||
Contract assets | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | $ | $ | |||||||||
Property and equipment, net | |||||||||||
Operating lease assets | |||||||||||
Goodwill, net | |||||||||||
Other intangible assets, net | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt, including finance leases | $ | $ | |||||||||
Current portion of operating lease liabilities | |||||||||||
Accounts payable | |||||||||||
Accrued salaries and wages | |||||||||||
Other accrued expenses | |||||||||||
Contract liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | $ | $ | |||||||||
Long-term debt, including finance leases | |||||||||||
Long-term operating lease liabilities | |||||||||||
Deferred income taxes | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | $ | $ | |||||||||
Commitments and contingencies (Note 14) | |||||||||||
Equity | |||||||||||
Preferred stock, $ | $ | $ | |||||||||
Common stock, $ | |||||||||||
Capital surplus | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost: | ( | ( | |||||||||
Total MasTec, Inc. shareholders’ equity | $ | $ | |||||||||
Non-controlling interests | $ | $ | |||||||||
Total equity | $ | $ | |||||||||
Total liabilities and equity | $ | $ |
Common Stock | Treasury Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Loss | Total MasTec, Inc. Shareholders’ Equity | Non-Controlling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted shares, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other stock issuances, net of shares withheld for taxes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to non-controlling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of restricted shares, net | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other stock issuances, net of shares withheld for taxes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2019 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ |
Common Stock | Treasury Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Loss | Total MasTec, Inc. Shareholders’ Equity | Non-Controlling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted shares, net | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other stock issuances, net of shares withheld for taxes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock, at cost | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to non-controlling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted shares, net | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other stock issuances, net of shares withheld for taxes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock, at cost | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2019 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ |
For the Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of intangible assets | |||||||||||
Non-cash interest expense, net | |||||||||||
Non-cash stock-based compensation expense | |||||||||||
Provision for deferred income taxes | |||||||||||
Provision for credit losses | |||||||||||
Equity in earnings of unconsolidated affiliates | ( | ( | |||||||||
Gains on sales of assets, net | ( | ( | |||||||||
Other non-cash items, net | ( | ||||||||||
Changes in assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable, net of allowance | ( | ( | |||||||||
Contract assets | |||||||||||
Inventories | |||||||||||
Other assets, current and long-term portion | |||||||||||
Accounts payable and accrued expenses | ( | ||||||||||
Contract liabilities | ( | ||||||||||
Other liabilities, current and long-term portion | ( | ||||||||||
Net cash provided by operating activities | $ | $ | |||||||||
Cash flows from investing activities: | |||||||||||
Cash paid for acquisitions, net of cash acquired | ( | ( | |||||||||
Capital expenditures | ( | ( | |||||||||
Proceeds from sale of property and equipment | |||||||||||
Payments for other investments | ( | ( | |||||||||
Proceeds from other investments | |||||||||||
Other investing activities, net | |||||||||||
Net cash used in investing activities | $ | ( | $ | ( | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from credit facilities | |||||||||||
Repayments of credit facilities | ( | ( | |||||||||
Proceeds from issuance of | |||||||||||
Repayments of | ( | ||||||||||
Repayments of other borrowings, net | ( | ( | |||||||||
Payments of finance lease obligations | ( | ( | |||||||||
Payments of acquisition-related contingent consideration | ( | ( | |||||||||
(Distributions to) proceeds from non-controlling interests | ( | ||||||||||
Proceeds from stock-based awards | |||||||||||
Payments for stock-based awards | ( | ( | |||||||||
Repurchases of common stock | ( | ( | |||||||||
Other financing activities, net | ( | ( | |||||||||
Net cash used in financing activities | $ | ( | $ | ( | |||||||
Effect of currency translation on cash | ( | ||||||||||
Net increase in cash and cash equivalents | $ | $ | |||||||||
Cash and cash equivalents - beginning of period | $ | $ | |||||||||
Cash and cash equivalents - end of period | $ | $ |
Supplemental cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Income tax payments, net of refunds | $ | $ | |||||||||
Supplemental disclosure of non-cash information: | |||||||||||
Additions to property and equipment from finance leases | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income attributable to MasTec: | |||||||||||||||||||||||
Net income - basic and diluted (a) | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Weighted average shares outstanding - basic | |||||||||||||||||||||||
Dilutive common stock equivalents (b) | |||||||||||||||||||||||
Weighted average shares outstanding - diluted |
Communications | Oil and Gas | Electrical Transmission | Clean Energy and Infrastructure | Total Goodwill | |||||||||||||||||||||||||
Goodwill, gross | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Accumulated impairment loss | ( | ( | |||||||||||||||||||||||||||
Goodwill, net | $ | $ | $ | $ | $ |
Other Intangible Assets | |||||||||||||||||||||||||||||||||||
Non-Amortizing | Amortizing | ||||||||||||||||||||||||||||||||||
Trade Names | Pre-Qualifications | Customer Relationships and Backlog | Pre-Qualifications | Other (a) | Total | ||||||||||||||||||||||||||||||
Other intangible assets, gross, as of December 31, 2019 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Accumulated amortization | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other intangible assets, net, as of December 31, 2019 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Additions from new business combinations | |||||||||||||||||||||||||||||||||||
Classification changes (b) | ( | ||||||||||||||||||||||||||||||||||
Measurement period adjustments (c) | ( | ( | |||||||||||||||||||||||||||||||||
Currency translation adjustments | ( | ( | |||||||||||||||||||||||||||||||||
Amortization expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Other intangible assets, net, as of September 30, 2020 | $ | $ | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Contract billings | $ | $ | |||||||||
Less allowance | ( | ( | |||||||||
Accounts receivable, net of allowance | $ | $ | |||||||||
Retainage | |||||||||||
Unbilled receivables | |||||||||||
Contract assets | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Land | $ | $ | |||||||||
Buildings and leasehold improvements | |||||||||||
Machinery and equipment | |||||||||||
Office furniture and equipment | |||||||||||
Construction in progress | |||||||||||
Total property and equipment | $ | $ | |||||||||
Less accumulated depreciation and amortization | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Description | Maturity Date | September 30, 2020 | December 31, 2019 | |||||||||||||||||
Senior secured credit facility: | ||||||||||||||||||||
Revolving loans | $ | $ | ||||||||||||||||||
Term loan | ||||||||||||||||||||
Finance lease and other obligations | ||||||||||||||||||||
Total debt obligations | $ | $ | ||||||||||||||||||
Less unamortized deferred financing costs | ( | ( | ||||||||||||||||||
Total debt, net of deferred financing costs | $ | $ | ||||||||||||||||||
Current portion of long-term debt | ||||||||||||||||||||
Long-term debt | $ | $ |
Finance Leases | Operating Leases | ||||||||||
2020, remaining three months | $ | $ | |||||||||
2021 | |||||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
Thereafter | |||||||||||
Total minimum lease payments | $ | $ | |||||||||
Less amounts representing interest | ( | ( | |||||||||
Total lease obligations, net of interest | $ | $ | |||||||||
Less current portion | |||||||||||
Long-term portion of lease obligations, net of interest | $ | $ |
Activity, restricted shares: (a) | Restricted Shares | Per Share Weighted Average Grant Date Fair Value | |||||||||
Non-vested restricted shares, as of December 31, 2019 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Canceled/forfeited | ( | ||||||||||
Non-vested restricted shares, as of September 30, 2020 | $ |
For the Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash proceeds (in millions) | $ | $ | |||||||||
Common shares issued | |||||||||||
Weighted average price per share | $ | $ | |||||||||
Weighted average per share grant date fair value | $ | $ |
Multiemployer Plans | |||||||||||||||||||||||||||||
Covered Employees | Contributions (in millions) | ||||||||||||||||||||||||||||
Low | High | Pension | Other Multiemployer | Total | |||||||||||||||||||||||||
For the Three Months Ended September 30: | |||||||||||||||||||||||||||||
2020 | $ | $ | $ | ||||||||||||||||||||||||||
2019 | $ | $ | $ | ||||||||||||||||||||||||||
For the Nine Months Ended September 30: | |||||||||||||||||||||||||||||
2020 | $ | $ | $ | ||||||||||||||||||||||||||
2019 | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
Revenue: | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Communications (a) | $ | $ | $ | $ | |||||||||||||||||||
Oil and Gas | |||||||||||||||||||||||
Electrical Transmission | |||||||||||||||||||||||
Clean Energy and Infrastructure | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Eliminations | ( | ( | ( | ( | |||||||||||||||||||
Consolidated revenue | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
EBITDA: | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Communications | $ | $ | $ | $ | |||||||||||||||||||
Oil and Gas | |||||||||||||||||||||||
Electrical Transmission | |||||||||||||||||||||||
Clean Energy and Infrastructure | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Corporate | ( | ( | ( | ( | |||||||||||||||||||
Consolidated EBITDA | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
Depreciation and Amortization: | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Communications | $ | $ | $ | $ | |||||||||||||||||||
Oil and Gas | |||||||||||||||||||||||
Electrical Transmission | |||||||||||||||||||||||
Clean Energy and Infrastructure | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Consolidated depreciation and amortization | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
EBITDA Reconciliation: | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
Plus: | |||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Depreciation | |||||||||||||||||||||||
Amortization of intangible assets | |||||||||||||||||||||||
Consolidated EBITDA | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
Customer: | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
AT&T (including DIRECTV®) (a) | |||||||||||||||||||||||
Equitrans Midstream Corporation (b) |
Reportable Segment (in millions): | September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||||||||||
Communications | $ | 3,853 | $ | 3,915 | $ | 3,968 | |||||||||||
Oil and Gas | 2,413 | 2,659 | 2,109 | ||||||||||||||
Electrical Transmission | 545 | 551 | 457 | ||||||||||||||
Clean Energy and Infrastructure | 891 | 1,042 | 988 | ||||||||||||||
Other | 0 | 1 | 1 | ||||||||||||||
Estimated 18-month backlog | $ | 7,702 | $ | 8,168 | $ | 7,523 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 1,698.3 | 100.0 | % | $ | 2,016.6 | 100.0 | % | $ | 4,684.2 | 100.0 | % | $ | 5,474.0 | 100.0 | % | |||||||||||||||||||||||||||||||
Costs of revenue, excluding depreciation and amortization | 1,380.5 | 81.3 | % | 1,690.6 | 83.8 | % | 3,948.6 | 84.3 | % | 4,636.0 | 84.7 | % | |||||||||||||||||||||||||||||||||||
Depreciation | 71.4 | 4.2 | % | 50.5 | 2.5 | % | 182.2 | 3.9 | % | 160.0 | 2.9 | % | |||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 11.2 | 0.7 | % | 4.7 | 0.2 | % | 28.4 | 0.6 | % | 14.2 | 0.3 | % | |||||||||||||||||||||||||||||||||||
General and administrative expenses | 72.7 | 4.3 | % | 77.1 | 3.8 | % | 243.2 | 5.2 | % | 220.6 | 4.0 | % | |||||||||||||||||||||||||||||||||||
Interest expense, net | 13.6 | 0.8 | % | 19.3 | 1.0 | % | 45.4 | 1.0 | % | 58.2 | 1.1 | % | |||||||||||||||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (7.4) | (0.4) | % | (7.0) | (0.3) | % | (22.1) | (0.5) | % | (19.8) | (0.4) | % | |||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 5.6 | 0.3 | % | — | — | % | 5.6 | 0.1 | % | — | — | % | |||||||||||||||||||||||||||||||||||
Other (income) expense, net | (6.6) | (0.4) | % | 8.0 | 0.4 | % | (18.5) | (0.4) | % | 16.3 | 0.3 | % | |||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 157.4 | 9.3 | % | $ | 173.4 | 8.6 | % | $ | 271.5 | 5.8 | % | $ | 388.5 | 7.1 | % | |||||||||||||||||||||||||||||||
Provision for income taxes | (40.5) | (2.4) | % | (43.3) | (2.1) | % | (61.7) | (1.3) | % | (95.1) | (1.7) | % | |||||||||||||||||||||||||||||||||||
Net income | $ | 116.9 | 6.9 | % | $ | 130.1 | 6.5 | % | $ | 209.8 | 4.5 | % | $ | 293.4 | 5.4 | % | |||||||||||||||||||||||||||||||
Net income attributable to non-controlling interests | 0.4 | 0.0 | % | 1.5 | 0.1 | % | 0.0 | 0.0 | % | 2.0 | 0.0 | % | |||||||||||||||||||||||||||||||||||
Net income attributable to MasTec, Inc. | $ | 116.5 | 6.9 | % | $ | 128.6 | 6.4 | % | $ | 209.7 | 4.5 | % | $ | 291.4 | 5.3 | % |
Revenue | EBITDA and EBITDA Margin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segment: | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Communications | $ | 645.4 | $ | 679.5 | $ | 1,943.8 | $ | 1,944.9 | $ | 79.6 | 12.3 | % | $ | 57.1 | 8.4 | % | $ | 206.8 | 10.6 | % | $ | 154.8 | 8.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Oil and Gas | 462.5 | 972.5 | 1,190.1 | 2,530.5 | 160.4 | 34.7 | % | 212.9 | 21.9 | % | 315.0 | 26.5 | % | 499.6 | 19.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electrical Transmission | 128.5 | 103.0 | 380.7 | 298.3 | 9.1 | 7.1 | % | 7.8 | 7.6 | % | 14.2 | 3.7 | % | 20.3 | 6.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Clean Energy and Infrastructure | 468.9 | 261.7 | 1,181.4 | 701.3 | 34.4 | 7.3 | % | 2.3 | 0.9 | % | 69.5 | 5.9 | % | 14.4 | 2.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 0.1 | 0.1 | 0.2 | 0.1 | 7.6 | NM | 6.7 | NM | 22.5 | NM | 19.4 | NM | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eliminations | (7.1) | (0.2) | (12.0) | (1.1) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate | — | — | — | — | (37.5) | — | (38.9) | — | (100.6) | — | (87.7) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Results | $ | 1,698.3 | $ | 2,016.6 | $ | 4,684.2 | $ | 5,474.0 | $ | 253.6 | 14.9 | % | $ | 247.9 | 12.3 | % | $ | 527.4 | 11.3 | % | $ | 620.8 | 11.3 | % |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 116.9 | 6.9 | % | $ | 130.1 | 6.5 | % | $ | 209.8 | 4.5 | % | $ | 293.4 | 5.4 | % | |||||||||||||||||||||||||||||||
Interest expense, net | 13.6 | 0.8 | % | 19.3 | 1.0 | % | 45.4 | 1.0 | % | 58.2 | 1.1 | % | |||||||||||||||||||||||||||||||||||
Provision for income taxes | 40.5 | 2.4 | % | 43.3 | 2.1 | % | 61.7 | 1.3 | % | 95.1 | 1.7 | % | |||||||||||||||||||||||||||||||||||
Depreciation | 71.4 | 4.2 | % | 50.5 | 2.5 | % | 182.2 | 3.9 | % | 160.0 | 2.9 | % | |||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 11.2 | 0.7 | % | 4.7 | 0.2 | % | 28.4 | 0.6 | % | 14.2 | 0.3 | % | |||||||||||||||||||||||||||||||||||
EBITDA | $ | 253.6 | 14.9 | % | $ | 247.9 | 12.3 | % | $ | 527.4 | 11.3 | % | $ | 620.8 | 11.3 | % | |||||||||||||||||||||||||||||||
Non-cash stock-based compensation expense | 5.6 | 0.3 | % | 4.2 | 0.2 | % | 15.5 | 0.3 | % | 12.1 | 0.2 | % | |||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 5.6 | 0.3 | % | — | — | % | 5.6 | 0.1 | % | — | — | % | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 264.8 | 15.6 | % | $ | 252.1 | 12.5 | % | $ | 548.5 | 11.7 | % | $ | 633.0 | 11.6 | % |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 253.6 | 14.9 | % | $ | 247.9 | 12.3 | % | $ | 527.4 | 11.3 | % | $ | 620.8 | 11.3 | % | |||||||||||||||||||||||||||||||
Non-cash stock-based compensation expense | 5.6 | 0.3 | % | 4.2 | 0.2 | % | 15.5 | 0.3 | % | 12.1 | 0.2 | % | |||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 5.6 | 0.3 | % | — | — | % | 5.6 | 0.1 | % | — | — | % | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 264.8 | 15.6 | % | $ | 252.1 | 12.5 | % | $ | 548.5 | 11.7 | % | $ | 633.0 | 11.6 | % | |||||||||||||||||||||||||||||||
Reportable Segment: | |||||||||||||||||||||||||||||||||||||||||||||||
Communications | $ | 79.6 | 12.3 | % | $ | 57.1 | 8.4 | % | $ | 206.8 | 10.6 | % | $ | 154.8 | 8.0 | % | |||||||||||||||||||||||||||||||
Oil and Gas | 160.4 | 34.7 | % | 212.9 | 21.9 | % | 315.0 | 26.5 | % | 499.6 | 19.7 | % | |||||||||||||||||||||||||||||||||||
Electrical Transmission | 9.1 | 7.1 | % | 7.8 | 7.6 | % | 14.2 | 3.7 | % | 20.3 | 6.8 | % | |||||||||||||||||||||||||||||||||||
Clean Energy and Infrastructure | 34.4 | 7.3 | % | 2.3 | 0.9 | % | 69.5 | 5.9 | % | 14.4 | 2.1 | % | |||||||||||||||||||||||||||||||||||
Other | 7.6 | NM | 6.7 | NM | 22.5 | NM | 19.4 | NM | |||||||||||||||||||||||||||||||||||||||
Corporate | (26.3) | — | (34.7) | — | (79.5) | — | (75.5) | — | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 264.8 | 15.6 | % | $ | 252.1 | 12.5 | % | $ | 548.5 | 11.7 | % | $ | 633.0 | 11.6 | % |
For the Three Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Net Income (in millions) | Diluted Earnings Per Share | Net Income (in millions) | Diluted Earnings Per Share | ||||||||||||||||||||
Reported U.S. GAAP measure | $ | 116.9 | $ | 1.59 | $ | 130.1 | $ | 1.69 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Non-cash stock-based compensation expense | 5.6 | 0.08 | 4.2 | 0.06 | |||||||||||||||||||
Loss on extinguishment of debt | 5.6 | 0.08 | — | — | |||||||||||||||||||
Amortization of intangible assets | 11.2 | 0.15 | 4.7 | 0.06 | |||||||||||||||||||
Total adjustments, pre-tax | $ | 22.4 | $ | 0.31 | $ | 8.9 | $ | 0.12 | |||||||||||||||
Income tax effect of adjustments (a) | (4.8) | (0.07) | (1.7) | (0.02) | |||||||||||||||||||
Statutory tax rate effects | — | — | (0.5) | (0.01) | |||||||||||||||||||
Adjusted non-U.S. GAAP measure | $ | 134.5 | $ | 1.83 | $ | 136.8 | $ | 1.78 |
For the Nine Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Net Income (in millions) | Diluted Earnings Per Share | Net Income (in millions) | Diluted Earnings Per Share | ||||||||||||||||||||
Reported U.S. GAAP measure | $ | 209.8 | $ | 2.84 | $ | 293.4 | $ | 3.85 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Non-cash stock-based compensation expense | 15.5 | 0.21 | 12.1 | 0.16 | |||||||||||||||||||
Loss on extinguishment of debt | 5.6 | 0.08 | — | — | |||||||||||||||||||
Amortization of intangible assets | 28.4 | 0.38 | 14.2 | 0.19 | |||||||||||||||||||
Total adjustments, pre-tax | $ | 49.5 | $ | 0.67 | $ | 26.3 | $ | 0.35 | |||||||||||||||
Income tax effect of adjustments (a) | (11.0) | (0.15) | (8.2) | (0.11) | |||||||||||||||||||
Statutory tax rate effects (b) | — | — | (1.9) | (0.02) | |||||||||||||||||||
Adjusted non-U.S. GAAP measure | $ | 248.3 | $ | 3.36 | $ | 309.6 | $ | 4.06 |
For the Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Net cash provided by operating activities | $ | 712.5 | $ | 441.4 | |||||||
Net cash used in investing activities | $ | (177.2) | $ | (143.5) | |||||||
Net cash used in financing activities | $ | (369.3) | $ | (282.0) |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet be Purchased under the Program (b) | ||||||||||||||||||||||
July 1 through July 31 | — | $ | — | — | $ | 158,617,588 | ||||||||||||||||||||
August 1 through August 31 | 456 | $ | 46.24 | — | $ | 158,617,588 | ||||||||||||||||||||
September 1 through September 30 | — | $ | — | — | $ | 158,617,588 | ||||||||||||||||||||
Total | 456 | — |
Exhibit No. | Description | |||||||
4.1 | ||||||||
4.2 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
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101.SCH | Inline XBRL Taxonomy Extension Schema | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |||||||
104 | The cover page of MasTec, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in Inline XBRL (included with the Exhibit 101 attachments). |
MASTEC, INC. | ||||||||
Date: | October 29, 2020 | |||||||
/s/ JOSÉ R. MAS | ||||||||
José R. Mas | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
/s/ GEORGE L. PITA | ||||||||
George L. Pita | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
Date: | October 29, 2020 | |||||||
/s/ José R. Mas | ||||||||
José R. Mas Chief Executive Officer (Principal Executive Officer) |
Date: | October 29, 2020 | |||||||
/s/ George L. Pita | ||||||||
George L. Pita Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: | October 29, 2020 | |||||||
/s/ José R. Mas | ||||||||
José R. Mas Chief Executive Officer (Principal Executive Officer) |
Date: | October 29, 2020 | |||||||
/s/ George L. Pita | ||||||||
George L. Pita Chief Financial Officer (Principal Financial and Accounting Officer) |
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Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Statement [Abstract] | ||||
Revenue | $ 1,698,279 | $ 2,016,618 | $ 4,684,180 | $ 5,473,965 |
Costs of revenue, excluding depreciation and amortization | 1,380,522 | 1,690,558 | 3,948,644 | 4,636,006 |
Depreciation | 71,397 | 50,515 | 182,173 | 160,019 |
Amortization of intangible assets | 11,200 | 4,681 | 28,384 | 14,152 |
General and administrative expenses | 72,690 | 77,146 | 243,163 | 220,581 |
Interest expense, net | 13,553 | 19,297 | 45,365 | 58,178 |
Equity in earnings of unconsolidated affiliates | (7,445) | (6,966) | (22,092) | (19,778) |
Loss on extinguishment of debt | 5,569 | 0 | 5,569 | 0 |
Other (income) expense, net | (6,612) | 8,002 | (18,481) | 16,323 |
Income before income taxes | 157,405 | 173,385 | 271,455 | 388,484 |
Provision for income taxes | (40,520) | (43,303) | (61,681) | (95,073) |
Net income | 116,885 | 130,082 | 209,774 | 293,411 |
Net income attributable to non-controlling interests | 394 | 1,486 | 48 | 1,993 |
Net income attributable to MasTec, Inc. | $ 116,491 | $ 128,596 | $ 209,726 | $ 291,418 |
Earnings per share (Note 2): | ||||
Basic earnings per share (in dollars per share) | $ 1.61 | $ 1.71 | $ 2.87 | $ 3.88 |
Basic weighted average common shares outstanding | 72,138 | 75,217 | 72,971 | 75,131 |
Diluted earnings per share (in dollars per share) | $ 1.59 | $ 1.69 | $ 2.84 | $ 3.85 |
Diluted weighted average common shares outstanding | 73,095 | 75,934 | 73,787 | 75,760 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 116,885 | $ 130,082 | $ 209,774 | $ 293,411 |
Other comprehensive (loss) income: | ||||
Foreign currency translation losses, net of tax | (616) | (334) | (1,753) | (321) |
Unrealized gains (losses) on investment activity, net of tax | 2,839 | (7,108) | (21,447) | (21,302) |
Comprehensive income | 119,108 | 122,640 | 186,574 | 271,788 |
Comprehensive income attributable to non-controlling interests | 394 | 1,486 | 48 | 1,993 |
Comprehensive income attributable to MasTec, Inc. | $ 118,714 | $ 121,154 | $ 186,526 | $ 269,795 |
Business, Basis of Presentation and Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Business, Basis of Presentation and Significant Accounting Policies | Note 1 – Business, Basis of Presentation and Significant Accounting Policies Nature of the Business MasTec, Inc. (collectively with its subsidiaries, “MasTec” or the “Company”) is a leading infrastructure construction company operating mainly throughout North America across a range of industries. The Company’s primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and other infrastructure, such as: wireless, wireline/fiber and customer fulfillment activities; pipeline infrastructure; electrical utility transmission and distribution; power generation, including from clean energy and renewable sources; heavy civil; and industrial infrastructure. MasTec’s customers are primarily in these industries. MasTec reports its results under five reportable segments: (1) Communications; (2) Oil and Gas; (3) Electrical Transmission; (4) Clean Energy and Infrastructure; and (5) Other. During the second quarter of 2020, the Company renamed its Power Generation and Industrial segment as the Clean Energy and Infrastructure segment to better represent the nature of the segment’s operations, end markets and customer characteristics. There was no change to the composition of the segment or its historical results. Basis of Presentation The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying consolidated balance sheet as of December 31, 2019 is derived from the Company’s audited financial statements as of that date. Because certain information and footnote disclosures have been condensed or omitted, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019 contained in the Company’s 2019 Annual Report on Form 10-K (the “2019 Form 10-K”). In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been included. When necessary, certain prior year amounts have been reclassified to conform to the current period presentation. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The Company believes that the disclosures made in these consolidated financial statements are adequate to make the information not misleading. Principles of Consolidation The accompanying consolidated financial statements include MasTec, Inc. and its subsidiaries and include the accounts of all majority owned subsidiaries over which the Company exercises control and, when applicable, entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Other parties’ interests in entities that MasTec consolidates are reported as non-controlling interests within equity, except for mandatorily redeemable non-controlling interests, which are recorded within liabilities. Net income or loss attributable to non-controlling interests is reported as a separate line item below net income or loss. The Company’s investments in entities for which the Company does not have a controlling interest, but over which it has the ability to exert significant influence, are accounted for using the equity method of accounting. For equity investees in which the Company has an undivided interest in the assets, liabilities and profits or losses of an unincorporated entity, but does not exercise control over the entity, the Company consolidates its proportional interest in the accounts of the entity. Translation of Foreign Currencies The assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. dollars at period-end exchange rates, with resulting translation gains or losses included within other comprehensive income or loss. Revenue and expenses are translated into U.S. dollars at average rates of exchange during the applicable period. Substantially all of the Company’s foreign operations use their local currency as their functional currency. Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in other income or expense, net. In these consolidated financial statements, “$” means U.S. dollars unless otherwise noted. Management Estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates are based on historical experience and various other assumptions, including the potential future effects of the COVID-19 pandemic and other relevant global events. These estimates form the basis for making judgments about the Company’s operating results and the carrying values of assets and liabilities that are not readily apparent from other sources. While management believes that such estimates are reasonable when considered in conjunction with the Company’s consolidated financial position and results of operations taken as a whole, actual results could differ materially from those estimates. Key estimates include: the recognition of revenue and project profit or loss, which the Company defines as project revenue, less project costs of revenue, including project-related depreciation, in particular, on construction contracts accounted for under the cost-to-cost method, for which the recorded amounts require estimates of costs to complete and the amount and probability of variable consideration included in the contract transaction price; fair value estimates, including those related to acquisitions, valuations of goodwill and intangible assets, acquisition-related contingent consideration and other liabilities, equity investments and other long-lived assets; allowances for credit losses; asset lives used in computing depreciation and amortization; fair values of financial instruments; self-insurance liabilities; other accruals and allowances; income taxes; and the estimated effects of litigation and other contingencies. COVID-19 Pandemic During March 2020, the World Health Organization declared a global pandemic related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The COVID-19 pandemic has significantly affected economic conditions in the United States and internationally, as national, state and local governments reacted to the public health crisis by requiring mitigation measures resulting in workforce, supply chain and other market disruptions that have created significant uncertainties in the U.S. and global economies and disrupted business activities for an uncertain period of time. Although certain jurisdictions have subsequently taken steps to lift or ease such restrictions to various degrees, such lifting or easing could subsequently be reversed, or new restrictions imposed, due to a rise in cases of COVID-19. Most of the Company’s construction services have been and currently are deemed essential under state and local pandemic mitigation orders, and all of its business segments continue to operate. Where safe and possible, the Company has generally been directed by its customers to maintain normal work schedules. Management’s top priority has been to take appropriate actions to protect the health and safety of its employees, customers and business partners, including adjusting its standard operating procedures to respond to evolving health guidelines. The COVID-19 pandemic has had a negative impact on the Company’s operations and is expected to have some continued negative impact. These impacts include lost productivity from governmental permitting approval delays, reduced crew productivity due to social distancing, other mitigation measures or other factors, the health and availability of work crews or other key personnel, including subcontractors or supply chain disruptions, and/or delayed project start dates or project shutdowns or cancellations that may be mandated or requested by governmental authorities or others, all of which could result in lower revenue or higher operating costs and/or create lower levels of overhead cost absorption. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020. The CARES Act provides for various tax relief and incentive measures, including provisions permitting the deferral and/or reduction of certain federal and payroll tax amounts. The Company has pursued certain of these relief provisions, and for the nine month period ended September 30, 2020, has deferred approximately $22 million of payroll taxes, net. The Company will continue to evaluate the potential effects of the CARES Act on its financial position, results of operations and cash flows. Management believes that it is taking appropriate steps to mitigate any potential impact to the Company; however, given the uncertainty regarding the potential effects of the COVID-19 pandemic, any future impacts cannot be quantified or predicted with specificity. Significant Accounting Policies Revenue Recognition The Company recognizes revenue from contracts with customers under Accounting Standards Codification (“ASC”) Topic 606 (“Topic 606”). Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which an entity expects to be entitled in exchange for the goods and services transferred. Revenue is primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied for the related contracts. Contracts. The Company derives revenue primarily from construction projects performed under: (i) master and other service agreements, which provide a menu of available services in a specific geographic territory that are utilized on an as-needed basis, and are typically priced using either a time and materials, or a fixed price per unit basis; and (ii) contracts for specific projects requiring the construction and installation of an entire infrastructure system, or specified units within an infrastructure system, which are subject to multiple pricing options, including fixed price, unit price, time and materials, or cost plus a markup. Revenue derived from projects performed under master service and other service agreements totaled 32% of consolidated revenue for both the three month periods ended September 30, 2020 and 2019, and totaled 36% and 35% for the nine month periods ended September 30, 2020 and 2019, respectively. For certain master service and other service agreements under which the Company performs installation and maintenance services, primarily for install-to-the-home service providers in its Communications segment, revenue is recognized at a point in time. This is generally when the work order has been fulfilled, which is typically the same day the work is initiated. Point in time revenue accounted for approximately 4% of consolidated revenue for both the three month periods ended September 30, 2020 and 2019, and accounted for approximately 5% for both the nine month periods ended September 30, 2020 and 2019. Substantially all of the Company’s other revenue is recognized over time. The total contract transaction price and cost estimation processes used for recognizing revenue over time under the cost-to-cost method is based on the professional knowledge and experience of the Company’s project managers, engineers and financial professionals. Management reviews estimates of total contract transaction price and total project costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and the Company’s profit recognition. Changes in these factors could result in revisions to revenue in the period in which the revisions are determined, which could materially affect the Company’s consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are determined. For both the nine month periods ended September 30, 2020 and 2019, project profit was affected by less than 5% as a result of changes in contract estimates included in projects that were in process as of December 31, 2019 and 2018. Revenue recognized for the three month periods ended September 30, 2020 and 2019 as a result of changes in total contract transaction price estimates, including for variable consideration, from performance obligations satisfied or partially satisfied in prior periods, totaled approximately $8.8 million and $13.3 million, respectively, and totaled $11.5 million and $52.2 million for the nine month periods ended September 30, 2020 and 2019, respectively. The Company may incur certain costs that can be capitalized, such as initial set-up or mobilization costs. Such costs, which are amortized over the life of the respective projects, were not material as of September 30, 2020 or December 31, 2019. Performance Obligations. A performance obligation is a contractual promise to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied. The vast majority of the Company’s performance obligations are completed within one year. Remaining performance obligations represent the amount of unearned transaction prices under contracts for which work is wholly or partially unperformed, including the Company’s share of unearned transaction prices from its proportionately consolidated non-controlled joint ventures. As of September 30, 2020, the amount of the Company’s remaining performance obligations was $5.3 billion. Based on current expectations, the Company expects to recognize approximately $1.6 billion of its remaining performance obligations as revenue during 2020, with the remainder to be recognized primarily in 2021. Variable Consideration. Transaction prices for the Company’s contracts may include variable consideration, which comprises items such as change orders, claims and incentives. Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the amount of consideration to which the Company will be entitled. Management’s estimates of variable consideration and the determination of whether to include estimated amounts in transaction prices are based largely on engineering studies and legal opinions, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available at the time of the estimate. To the extent unapproved change orders, claims and other variable consideration reflected in transaction prices are not resolved in the Company’s favor, or to the extent incentives reflected in transaction prices are not earned, there could be reductions in, or reversals of, previously recognized revenue. As of September 30, 2020 and December 31, 2019, the Company included approximately $50 million and $27 million, respectively, of change orders and/or claims in transaction prices for certain contracts that were in the process of being resolved in the ordinary course of business, including through negotiation, arbitration and other proceedings. These transaction price adjustments, when earned, are included within contract assets or accounts receivable, net of allowance, as appropriate. As of both September 30, 2020 and December 31, 2019, these change orders and/or claims were primarily related to certain projects in the Company’s Oil and Gas and Electrical Transmission segments. The Company actively engages with its customers to complete the final approval process, and generally expects these processes to be completed within one year. Amounts ultimately realized upon final agreement by customers could be higher or lower than such estimated amounts. Recently Issued Accounting Pronouncements See the recent accounting pronouncements discussion below for information pertaining to the effects of recently adopted and other recent accounting pronouncements, as updated from the discussion in the Company’s 2019 Form 10-K. Accounting Pronouncements Adopted in 2020 In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”) to reduce diversity in practice in accounting for the costs of implementing cloud computing arrangements that are service contracts. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for internal-use software. Accounting for the service element of the cloud computing arrangement is not affected by the new guidance. Under ASU 2018-15, amortization expense, payments for and asset balances related to such capitalized implementation costs are to be presented within the same line items of the entity’s statements of operations, cash flows and balance sheets, respectively, as the related service fee activity and balances would be presented. ASU 2018-15, which the Company adopted on a prospective basis during the first quarter of 2020, did not have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13, which is intended to improve the effectiveness of fair value measurement disclosures, modifies the disclosure requirements for certain estimates and assumptions used in determining the fair value of assets and liabilities. ASU 2018-13, which the Company adopted during the first quarter of 2020, did not have a material effect on the Company’s consolidated financial statements. See Note 4 - Fair Value of Financial Instruments for disclosure updates pertaining to significant unobservable inputs used to develop fair value estimates for certain of the Company’s Level 3 financial instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This ASU, together with its related clarifying ASUs (collectively, “ASU 2016-13”), introduced an expected credit loss methodology for the measurement and recognition of credit losses on most financial assets, including financial assets arising from revenue transactions, such as accounts receivable and contract assets. The new expected credit loss methodology, which is based on historical experience, current conditions and reasonable and supportable forecasts, replaced the incurred loss model for measuring and recognizing expected credit losses. The Company adopted this ASU in the first quarter of 2020 and incorporated this guidance into its methodology for estimating its accounts receivable allowances. Based on historical trends, the financial condition of the Company’s customers and management’s expectations of economic and industry factors affecting the Company’s customers, ASU 2016-13 did not have a material effect on the Company’s consolidated financial statements upon adoption. Future credit loss expectations could be affected by changes in estimates or developing trends, including from changes in credit quality of the Company’s customers, changes in specific risks associated with the Company’s financial assets, or from changes in management’s expectations of future economic and industry conditions or other factors. Management actively monitors the economic environment, including any potential effects from the COVID-19 pandemic and/or volatility in the oil and gas markets on the credit quality of the Company’s customers and/or its financial assets. For additional information about the Company’s accounts receivable and related allowances, see Note 5 - Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Note 2 – Earnings Per Share Basic earnings or loss per share is computed by dividing net income attributable to MasTec by the weighted average number of common shares outstanding for the period, which excludes non-participating unvested restricted share awards. Diluted earnings per share is computed by dividing net income attributable to MasTec by the weighted average number of fully diluted shares, as calculated under the treasury stock method, which includes the potential effect of dilutive common stock equivalents, such as issued but unvested restricted shares. If the Company reports a loss, rather than income, the computation of diluted loss per share excludes the effect of dilutive common stock equivalents, as their effect would be anti-dilutive. The following table provides details underlying the Company’s earnings per share calculations for the periods indicated (in thousands):
(a)Calculated as total net income less amounts attributable to non-controlling interests. (b)For the nine month period ended September 30, 2020, there were 58,759 anti-dilutive common stock equivalents. The Company repurchased approximately 3.6 million shares of its common stock during the nine month period ended September 30, 2020, as discussed in Note 11 - Equity. The effect of these repurchases on the Company’s weighted average shares outstanding for the nine month period ended September 30, 2020 was a reduction of approximately 2.6 million shares, due to the timing of the repurchases.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Note 3 – Goodwill and Other Intangible Assets The following table provides balances for goodwill by reportable segment as of September 30, 2020 (in millions):
For the nine month period ended September 30, 2020, goodwill included additions of $5.2 million from new business combinations and a net increase of $5.4 million from measurement period adjustments. Currency translation effects related to goodwill and accumulated impairment losses for the nine month period ended September 30, 2020 totaled approximately $3.2 million of losses and $2.9 million of gains, respectively. The following table provides a reconciliation of changes in other intangible assets, net, for the period indicated (in millions):
(a)Consists principally of trade names and non-compete agreements. (b)In connection with its first quarter assessment of goodwill and indefinite-lived intangible assets, management reassessed the indefinite-life classification of its two pre-qualification intangible assets. Management determined that, based on changes in the assets’ characteristics, including current and expected changes in the customer mix of the associated reporting units, a finite-life classification for these assets was more appropriate. As a result, in the first quarter of 2020, the Company changed the classification of these pre-qualification intangible assets from indefinite-lived to finite-lived and began amortizing them on an accelerated basis, with an estimated remaining weighted average useful life of approximately 12 years. (c)Represents adjustments to preliminary estimates of fair value within the measurement period of up to one year from the date of acquisition. Quarterly Assessment for Indicators of Impairment. During the third quarter of 2020, in conjunction with the Company’s quarterly review for indicators of impairment, management performed quantitative assessments of the goodwill associated with three reporting units within the Oil and Gas segment. Based on the results of these assessments, management determined that the estimated fair value of one of the reporting units, for which the related goodwill had a carrying value of approximately $15.3 million, exceeded its carrying value by approximately 10%, and the estimated fair values of the other two reporting units were determined to substantially exceed their carrying values. Significant changes in the assumptions or estimates used in management’s assessment, such as a reduction in profitability and/or cash flows, could result in non-cash goodwill and indefinite-lived intangible asset impairment charges in the future. 2020 Acquisitions. For the nine month period ended September 30, 2020, MasTec completed four acquisitions. Through a 96%-owned consolidated subsidiary, the Company acquired all of the equity interests in a heavy civil infrastructure construction company that is included within the Company’s Clean Energy and Infrastructure segment. The Company also acquired all of the equity interests in a utility service and telecommunications construction contractor that is included within the Company’s Communications segment. In addition, the Company acquired the assets of two entities, one that specializes in wireless telecommunications and one that specializes in electrical transmission services. The aggregate purchase price for these entities was composed of approximately $9.8 million in cash, net of cash acquired, with an additional $2.8 million due through 2023, subject to certain indemnification provisions, and a five-year earn-out liability valued at approximately $7.2 million. Earn-outs are generally payable annually and are recorded within other current and other long-term liabilities in the consolidated balance sheets. As of September 30, 2020, the range of remaining potential undiscounted earn-out liabilities for the 2020 acquisitions was estimated to be up to $13 million; however, there is no maximum payment amount. Determination of the estimated fair values of the net assets acquired and the estimated earn-out liabilities for these acquisitions was preliminary as of September 30, 2020; as a result, further adjustments to these estimates may occur. 2019 Acquisitions. During 2019, MasTec completed six acquisitions, one of which specializes in water infrastructure for pipeline companies and is included within the Company’s Oil and Gas segment, four of which are included within the Company’s Communications segment, including a wireline/fiber deployment construction contractor and a telecommunications company specializing in a broad range of end-to-end wireless telecommunications solutions, and one of which specializes in construction projects in the power industry and is included in the Company’s Clean Energy and Infrastructure segment. For all but one of these acquisitions, the Company acquired all of the equity interests in the related entities. For the telecommunications company specializing in wireless telecommunications solutions, the Company acquired 96% of the entity’s equity interests, with the obligation to acquire the balance over time. The aggregate purchase price for these entities, as adjusted, was composed of approximately $176.6 million in cash, net of cash acquired, plus earn-out liabilities and a mandatorily redeemable non-controlling interest valued at approximately $22.3 million and $17.8 million, respectively. The Company refers to its traditional earn-out arrangements and the mandatorily redeemable non-controlling interest collectively as “Earn-outs.” Earn-outs for the 2019 acquisitions have terms ranging from three to five years. As of September 30, 2020, the range of remaining potential undiscounted Earn-out liabilities for the 2019 acquisitions was estimated to be between $2 million and $62 million; however, there is no maximum payment amount. Determination of the estimated fair values of the net assets acquired and the estimated Earn-out liabilities for certain of these acquisitions was preliminary as of September 30, 2020; as a result, further adjustments to these estimates may occur. Pro Forma Financial Information and Acquisition Results. For the three month periods ended September 30, 2020 and 2019, unaudited supplemental pro forma revenue totaled approximately $1.7 billion and $2.1 billion, respectively, and unaudited supplemental pro forma net income totaled approximately $117.9 million and $127.4 million, respectively. For the nine month periods ended September 30, 2020 and 2019, unaudited supplemental pro forma revenue totaled approximately $4.7 billion and $5.8 billion, respectively, and unaudited supplemental pro forma net income totaled approximately $212.7 million and $300.7 million, respectively. For the three and nine month periods ended September 30, 2020, the Company’s consolidated results of operations included acquisition-related revenue of approximately $69.3 million and $182.4 million, respectively, and included acquisition-related net losses of approximately $4.3 million and $5.0 million, respectively, based on the Company’s consolidated effective tax rates. For the three and nine month periods ended September 30, 2019, the Company’s consolidated results of operations included acquisition-related revenue of approximately $41.7 million and $116.9 million, respectively, and included acquisition-related net income of approximately $1.5 million and acquisition-related net losses of approximately $5.9 million, respectively, based on the Company’s consolidated effective tax rates. These acquisition-related results do not include the effects of acquisition costs or interest expense associated with consideration paid for the related acquisitions.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 4 – Fair Value of Financial Instruments The Company’s financial instruments include cash and cash equivalents, accounts and notes receivable, cash collateral deposited with insurance carriers, life insurance assets, equity investments, certain other investments, deferred compensation plan assets and liabilities, accounts payable and other current liabilities, acquisition-related contingent consideration, mandatorily redeemable non-controlling interests and debt obligations. Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value guidance establishes a valuation hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs that may be used are: (i) Level 1 - quoted market prices in active markets for identical assets or liabilities; (ii) Level 2 - observable market-based inputs or other observable inputs; and (iii) Level 3 - significant unobservable inputs that cannot be corroborated by observable market data, which are generally determined using valuation models incorporating management estimates of market participant assumptions. Acquisition-Related Contingent Consideration and Other Liabilities Acquisition-related contingent consideration and other liabilities is composed of Earn-outs, which represent the estimated fair value of future amounts payable for businesses that are contingent upon the acquired business achieving certain levels of earnings in the future. As of September 30, 2020 and December 31, 2019, the estimated fair value of the Company’s Earn-out liabilities totaled $132.8 million and $173.2 million, respectively, of which $47.6 million and $54.1 million, respectively, was included within other current liabilities. The fair values of the Company’s Earn-out liabilities are estimated using income approaches such as discounted cash flows or option pricing models, both of which incorporate significant inputs not observable in the market (Level 3 inputs), including management’s estimates and entity-specific assumptions, and are evaluated on an ongoing basis. Key assumptions include the discount rate, which, as of September 30, 2020, ranged from 12.0% to 23.0%, with a weighted average rate of 14.0% based on the relative fair value of each instrument, and probability-weighted projections of earnings before interest, taxes, depreciation and amortization (“EBITDA”). Significant changes in any of these assumptions could result in significantly higher or lower potential Earn-out liabilities. The ultimate payment amounts for the Company’s Earn-out liabilities will be determined based on the actual results achieved by the acquired businesses. As of September 30, 2020, the range of potential undiscounted Earn-out liabilities was estimated to be between $34 million and $199 million; however, there is no maximum payment amount. Earn-out activity consists primarily of additions from new business combinations; changes in the expected fair value of future payment obligations; and payments. Measurement period adjustments for Earn-out liabilities, which are fair value adjustments relating to new information obtained about the facts and circumstances existing as of the date of acquisition for a period of up to one year, are recorded to goodwill. Other revisions to the expected fair values of the Company’s traditional earn-out liabilities are reflected as other income or expense, and for the mandatorily redeemable non-controlling interest, are recorded as interest expense or income. Earn-out payments, to the extent they relate to estimated liabilities as of the date of acquisition, are reflected within financing activities in the consolidated statements of cash flows. Payments in excess of acquisition date liabilities are classified within operating activities. There were no additions to acquisition-related contingent consideration and other liabilities from new business combinations in either of the three month periods ended September 30, 2020 or 2019, and for the nine month periods ended September 30, 2020 and 2019, additions totaled $7.2 million and $16.2 million, respectively. There were no measurement period adjustments for the three month period ended September 30, 2020, and measurement period adjustments for the nine month period ended September 30, 2020 totaled an increase of approximately $1.1 million, and related to a business in the Company’s Communications segment. There were no measurement period adjustments for the three or nine month periods ended September 30, 2019. There were no fair value adjustments for the three month period ended September 30, 2020, and fair value adjustments for the nine month period ended September 30, 2020 totaled a net increase of approximately $1.7 million, and related to businesses in the Company’s Oil and Gas and Communications segments. For the three and nine month periods ended September 30, 2019, fair value adjustments totaled a net increase of approximately $11.2 million and $47.6 million, respectively, and related primarily to businesses in the Company’s Oil and Gas and Communications segments. There were no Earn-out payments in either of the three month periods ended September 30, 2020 or 2019, and for the nine month periods ended September 30, 2020 and 2019, Earn-out payments totaled $50.4 million and $30.0 million, respectively. Equity Investments The Company’s equity investments as of September 30, 2020 include: (i) the Company’s 33% equity interests in Trans-Pecos Pipeline, LLC (“TPP”) and Comanche Trail Pipeline, LLC (“CTP,” and together with TPP, the “Waha JVs”), which are accounted for as equity method investments; (ii) a $15 million investment in Cross Country Infrastructure Services, Inc. (“CCI”); (iii) the Company’s 50% equity interests in each of FM Technology Holdings, LLC, FM USA Holdings, LLC and All Communications Solutions Holdings, LLC, collectively, “FM Tech,” for which the Company’s aggregate investment totals approximately $16 million, and is accounted for as an equity method investment; (iv) the Company’s equity interests in American Virtual Cloud Technologies, Inc., or “AVCT” (formerly named Pensare Acquisition Corp. (“Pensare”)); (v) the Company’s interests in certain proportionately consolidated non-controlled contractual joint ventures; and (vi) certain other equity investments. Investment Arrangements. From time to time, the Company may participate in selected investment or strategic arrangements, including equity interests in various business entities and participation in contractual joint ventures. The Company’s investment and strategic arrangements may involve the extension of loans or other types of financing arrangements, including approximately $6 million of financing commitments as of September 30, 2020. The Company has determined that certain of its investment arrangements are variable interest entities (“VIEs”). As of September 30, 2020, except for one individually insignificant VIE, the Company does not have the power to direct the primary activities that most significantly impact the economic performance of its VIEs nor is it the primary beneficiary. Accordingly, except for the previously mentioned VIE, the Company’s VIEs are not consolidated. Equity investments, other than those accounted for as equity method investments or those that are proportionately consolidated, are measured at fair value if their fair values are readily determinable. Equity investments that do not have readily determinable fair values are measured at cost, adjusted for changes from observable market transactions, if any, less impairment (“adjusted cost basis”). As of September 30, 2020 and December 31, 2019, the aggregate carrying value of the Company’s equity investments, including equity investments measured on an adjusted cost basis, totaled approximately $205 million and $196 million, respectively. As of September 30, 2020 and December 31, 2019, equity investments measured on an adjusted cost basis, including the Company’s investment in CCI, totaled approximately $17 million and $18 million, respectively. There were no material changes in the fair values of, or impairments related to, these investments during either of the nine month periods ended September 30, 2020 or 2019. The Waha JVs. The Waha JVs own and operate certain pipeline infrastructure that transports natural gas to the Mexican border for export. Equity in earnings related to the Company’s proportionate share of income from the Waha JVs, which is included within the Company’s Other segment, totaled approximately $7.7 million and $6.9 million for the three month periods ended September 30, 2020 and 2019, respectively, and totaled $22.9 million and $19.8 million for the nine month periods ended September 30, 2020 and 2019, respectively. Cumulative undistributed earnings from the Waha JVs, which represents cumulative equity in earnings for the Waha JVs less distributions of earnings, totaled $60.7 million as of September 30, 2020. Distributions of earnings from the Waha JVs, which are included within operating cash flows, totaled $2.4 million and $1.5 million for the three month periods ended September 30, 2020 and 2019, respectively, and totaled $10.2 million and $7.5 million for the nine month periods ended September 30, 2020 and 2019, respectively. The Company’s net investment in the Waha JVs, which differs from its proportionate share of the net assets of the Waha JVs due primarily to capitalized investment costs, totaled approximately $165 million and $174 million as of September 30, 2020 and December 31, 2019, respectively. The Waha JVs are party to separate non-recourse financing facilities, each of which are secured by pledges of the equity interests in the respective entities, as well as a first lien security interest over virtually all of their assets. The Waha JVs are also party to certain interest rate swaps, which are accounted for as qualifying cash flow hedges. The Company reflects its proportionate share of any unrealized fair market value gains or losses from fluctuations in interest rates associated with these swaps within other comprehensive income or loss, as appropriate. For the three and nine month periods ended September 30, 2020, the Company’s proportionate share of unrecognized unrealized activity on these interest rate swaps totaled gains of approximately $2.5 million and losses of approximately $29.5 million, respectively, or gains of $1.9 million and losses of $22.4 million, net of tax, respectively. For the three and nine month periods ended September 30, 2019, the Company’s proportionate share of unrecognized unrealized activity on these interest rate swaps totaled losses of approximately $9.4 million and $28.2 million, respectively, or $7.1 million and $21.3 million, net of tax, respectively. Other Investments. The Company has investments in AVCT. These investments include (i) shares of AVCT common stock, which are equity securities, (ii) warrants for the purchase of AVCT common stock, which are derivative financial instruments, and (iii) debentures that are convertible into shares of AVCT common stock, which are available-for-sale securities. As of September 30, 2020 and December 31, 2019, the Company’s ownership interest in AVCT’s common stock, represented by the AVCT shares, totaled approximately 9% and 21%, respectively, and its aggregate ownership interest, assuming the exercise and conversion of all legally exercisable warrants and convertible debt into AVCT common stock, totaled approximately 22% and 21%, respectively. José R. Mas, MasTec’s Chief Executive Officer, was a director of Pensare through the end of March 2020. The Company paid an aggregate of approximately $5 million for its investments in AVCT, all of which are included within other long-term assets in the Company’s consolidated financial statements. The issued shares and those underlying the derivative instruments are salable at various times subject to various contractual and securities law restrictions. The Company does not have the ability to exert significant influence over the operating and financial policies of AVCT. As of September 30, 2020, the aggregate fair value of the Company’s investments in AVCT approximated $11 million. For the three and nine month periods ended September 30, 2020, the Company recorded unrealized fair value measurement gains, net, on the AVCT securities within other income totaling approximately $0.9 million and $4.7 million, respectively, primarily related to the AVCT shares, for which the fair value was determined based on the market price of identical securities, adjusted for the restrictions on sale, which is a Level 3 input. Unrealized fair value measurement gains on the AVCT convertible debentures recognized within other comprehensive income, as determined based on Monte Carlo simulations, which is a Level 3 input, totaled approximately $0.9 million for both the three and nine month periods ended September 30, 2020. As of December 31, 2019, the AVCT shares were measured on an adjusted cost basis as their fair value was not readily determinable. The aggregate carrying value of the Company’s investment in AVCT as of December 31, 2019, including the AVCT shares and initial warrants, was approximately $2 million. The Company has equity interests in certain telecommunications entities, including FM Tech, that provide services to MasTec. For the three and nine month periods ended September 30, 2020, expense recognized in connection with these arrangements totaled $2.7 million and $9.0 million, respectively, and related amounts payable totaled $0.4 million as of September 30, 2020. Senior Notes As of September 30, 2020, the gross carrying amount of the Company’s 4.50% senior notes due August 15, 2028 (the “4.50% Senior Notes”) totaled $600 million and their estimated fair value totaled $606.0 million. As of December 31, 2019, the gross carrying amount of the Company’s 4.875% senior notes due March 15, 2023 (the “4.875% Senior Notes”) totaled $400 million and their estimated fair value totaled $404.5 million. The estimated fair values of the Company’s senior notes were determined using an “exit price” approach based on Level 1 inputs. See Note 7 - Debt for additional information on the third quarter 2020 redemption of the Company’s 4.875% Senior Notes and related issuance of its 4.50% Senior Notes.
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Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities | Note 5 – Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities The following table provides details of accounts receivable, net of allowance, and contract assets (together, “accounts receivable, net”) as of the dates indicated (in millions):
Contract billings represent the amount of performance obligations that have been billed but have not yet been collected, whereas contract assets consist of unbilled receivables and retainage. Unbilled receivables represent the estimated value of unbilled work for projects with performance obligations recognized over time. Retainage represents a portion of the contract amount that has been billed, but for which the contract allows the customer to retain a portion of the billed amount until final contract settlement (generally, from 5% to 10% of contract billings). For the three and nine month periods ended September 30, 2020, provisions for credit losses totaled $1.9 million and $14.2 million, respectively, including potential credit losses resulting from current economic uncertainty. For the three and nine month periods ended September 30, 2019, provisions for credit losses totaled $0.4 million and $1.3 million, respectively. Impairment losses on contract assets were not material in either period. Contract liabilities consist primarily of deferred revenue. Under certain contracts, the Company may be entitled to invoice the customer and receive payments in advance of performing the related contract work. In those instances, the Company recognizes a liability for advance billings in excess of revenue recognized, which is referred to as deferred revenue. Contract liabilities also include the amount of any accrued project losses. Total contract liabilities, including accrued project losses, totaled approximately $368.2 million and $206.2 million as of September 30, 2020 and December 31, 2019, respectively, of which deferred revenue comprised approximately $349.1 million and $184.1 million, respectively. The increase in deferred revenue was primarily driven by timing of billings for projects in the Company’s Oil and Gas and Clean Energy and Infrastructure segments. For the three and nine month periods ended September 30, 2020, the Company recognized revenue of approximately $10.3 million and $139.6 million, respectively, related to amounts that were included in deferred revenue as of December 31, 2019, resulting primarily from the advancement of physical progress on the related projects during the period. The Company is party to non-recourse financing arrangements in the ordinary course of business, under which certain receivables are settled with the customer’s bank in return for a nominal fee. Discount charges related to these arrangements, which are included within interest expense, net, totaled approximately $0.9 million and $2.4 million for the three month periods ended September 30, 2020 and 2019, respectively, and totaled $4.1 million and $8.1 million for the nine month periods ended September 30, 2020 and 2019, respectively.
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Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Note 6 – Property and Equipment, Net The following table provides details of property and equipment, net, including property and equipment held under finance leases as of the dates indicated (in millions):
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Debt |
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Debt | Note 7 – Debt The following table provides details of the carrying values of debt as of the dates indicated (in millions):
Issuance of 4.50% Senior Notes and Repurchase and Redemption of 4.875% Senior Notes On August 4, 2020, the Company issued $600 million aggregate principal amount of senior unsecured notes due August 15, 2028, which bear interest at a rate of 4.50% (the “4.50% Senior Notes”), at par in a private offering (the “Private Offering”). Interest on the 4.50% Senior Notes is payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2021. The 4.50% Senior Notes are general senior unsecured obligations of the Company, and rank equal in right of payment with all of the Company’s existing and future senior unsecured indebtedness and senior in right of payment to all of the Company’s existing and future subordinated indebtedness. The 4.50% Senior Notes are effectively subordinated to all secured indebtedness of the Company, including its existing credit facilities, to the extent of the value of the assets securing such indebtedness. The 4.50% Senior Notes are fully and unconditionally guaranteed on a senior unsecured, joint and several basis by the Company’s wholly-owned domestic restricted subsidiaries that guarantee its existing credit facilities, subject to certain exceptions. The Company used a portion of the proceeds from the Private Offering to redeem all $400 million of its outstanding 4.875% Senior Notes due 2023 (the “ 4.875% Senior Notes”) on August 19, 2020 (the “Redemption Date”) at a redemption price equal to 100.813% of the principal amount of the 4.875% Senior Notes redeemed, plus accrued and unpaid interest to, but not including, the Redemption Date. The remaining net proceeds from the Private Offering were primarily used to repay revolving loans under the Company’s existing credit facilities. The Company has the option to redeem all or a portion of the 4.50% Senior Notes at any time on or after August 15, 2023 at the redemption prices specified in the indenture that governs the 4.50% Senior Notes (the “4.50% Senior Notes Indenture”), plus accrued and unpaid interest, if any, to (but excluding) the redemption date. In addition, at any time prior to August 15, 2023, the Company may redeem all or a part of the 4.50% Senior Notes at a redemption price equal to 100% of the principal amount of the 4.50% Senior Notes redeemed, plus accrued and unpaid interest, if any, to (but excluding) the redemption date, plus a “make-whole” premium. Further, prior to August 15, 2023, the Company may redeem up to 40% of the aggregate principal amount of the 4.50% Senior Notes using the net cash proceeds of certain equity offerings, at a redemption price equal to 104.500% of the principal amount of the 4.50% Senior Notes redeemed, plus accrued and unpaid interest, if any, to (but excluding) the date of redemption, subject to certain conditions. If the Company undergoes a change of control, as defined in the 4.50% Senior Notes Indenture, the Company must make an offer to repurchase all of the 4.50% Senior Notes then outstanding at a price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to (but excluding) the date of repurchase. The 4.50% Senior Notes Indenture, among other things, generally limits the ability of the Company and certain of its subsidiaries, subject to certain exceptions, to (i) create liens, (ii) pay dividends, (iii) acquire shares of capital stock, (iv) make certain investments and (v) effect mergers. The 4.50% Senior Notes Indenture provides for customary events of default, subject to customary grace and cure periods. Generally, if an event of default occurs and is continuing, the trustee or holders of at least 30% of the 4.50% Senior Notes then outstanding may declare the principal of, premium, if any, and accrued interest on all of the 4.50% Senior Notes immediately due and payable. Financing costs incurred in connection with the issuance of the 4.50% Senior Notes totaled approximately $8.9 million. These deferred financing costs, which are reflected as a reduction of the carrying amount of the 4.50% Senior Notes, will be amortized over the term of the 4.50% Senior Notes using the effective interest method. Management determined that the repurchase and redemption of the Company’s 4.875% Senior Notes should be accounted for as a debt extinguishment. Accordingly, the Company recorded a pre-tax debt extinguishment loss of approximately $5.6 million in the third quarter of 2020, including $3.3 million of early repayment premiums and $2.3 million of unamortized deferred financing costs. This loss is separately disclosed within the Company’s consolidated statements of operations. Senior Secured Credit Facility The Company’s senior secured credit facility (the “Credit Facility”) has aggregate borrowing commitments totaling approximately $1.75 billion as of September 30, 2020, composed of $1.35 billion of revolving commitments and a term loan of approximately $400 million. The term loan is subject to amortization in quarterly principal installments of $2.5 million commencing in December 2020, which amount will increase to $5.0 million commencing in December 2021. Quarterly principal installments on the term loan are subject to adjustment, if applicable, for certain prepayments. As of September 30, 2020 and December 31, 2019, outstanding revolving loans, which included $20 million and $138 million, respectively, of borrowings denominated in foreign currencies, accrued interest at weighted average rates of approximately 1.98% and 3.50% per annum, respectively. The term loan accrued interest at rates of 1.39% and 3.05% as of September 30, 2020 and December 31, 2019, respectively. Letters of credit of approximately $134.8 million and $98.0 million were issued as of September 30, 2020 and December 31, 2019, respectively. As of both September 30, 2020 and December 31, 2019, letter of credit fees accrued at 0.375% per annum for performance standby letters of credit and at 1.25% per annum for financial standby letters of credit. Outstanding letters of credit mature at various dates and most have automatic renewal provisions, subject to prior notice of cancellation. As of September 30, 2020 and December 31, 2019, availability for revolving loans totaled $1,195.3 million and $912.8 million, respectively, or up to $515.2 million and $552.0 million, respectively, for new letters of credit. Revolving loan borrowing capacity included $280.1 million and $162.4 million of availability in either Canadian dollars or Mexican pesos as of September 30, 2020 and December 31, 2019, respectively. The unused facility fee as of both September 30, 2020 and December 31, 2019 accrued at a rate of 0.20%. The Credit Facility is guaranteed by certain subsidiaries of the Company (the “Guarantor Subsidiaries”) and the obligations under the Credit Facility are secured by substantially all of the Company’s and the Guarantor Subsidiaries’ respective assets, subject to certain exceptions. Other Credit Facilities. The Company has other credit facilities that support the working capital requirements of its foreign operations and certain letter of credit issuances. As of September 30, 2020, outstanding borrowings under the Company’s other credit facilities totaled approximately $5.1 million and accrued interest at an average rate of 3.20%, and as of December 31, 2019, there were no outstanding borrowings. Additionally, the Company has a credit facility under which it may issue up to $50.0 million of performance standby letters of credit. As of September 30, 2020 and December 31, 2019, letters of credit issued under this facility totaled $18.2 million and $17.1 million, respectively, and accrued fees at 0.50% and 0.40% per annum, respectively. The Company’s other credit facilities are subject to customary provisions and covenants. Debt Covenants MasTec was in compliance with the provisions and covenants of its outstanding debt instruments as of September 30, 2020 and December 31, 2019. Additional Information As of September 30, 2020 and December 31, 2019, accrued interest payable, which is recorded within other accrued expenses in the consolidated balance sheets, totaled $5.7 million and $7.5 million, respectively. For additional information pertaining to the Company’s debt instruments, see Note 7 - Debt in the Company’s 2019 Form 10-K.
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Lease Obligations |
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Lease Obligations | Note 8 – Lease Obligations In the ordinary course of business, the Company enters into agreements that provide financing for machinery and equipment and for other of its facility, vehicle and equipment needs, including related party leases. As of September 30, 2020, the Company’s leases have remaining lease terms of up to nine years. Lease agreements may contain renewal clauses, which, if elected, generally extend the term of the lease for one to five years for both equipment and facility leases. Certain lease agreements may also contain options to purchase the leased property and/or options to terminate the lease. In addition, lease agreements may include periodic adjustments to payment amounts for inflation or other variables, or may require payments for taxes, insurance, maintenance or other expenses, which are generally referred to as non-lease components. The Company’s lease agreements do not contain significant residual value guarantees or material restrictive covenants. Finance Leases The gross amount of assets held under finance leases as of September 30, 2020 and December 31, 2019 totaled $536.8 million and $463.5 million, respectively. Assets held under finance leases, net of accumulated depreciation, totaled $406.5 million and $375.9 million as of September 30, 2020 and December 31, 2019, respectively. Depreciation expense associated with finance leases totaled $17.5 million and $13.1 million for the three month periods ended September 30, 2020 and 2019, respectively, and totaled $50.1 million and $34.2 million for the nine month periods ended September 30, 2020 and 2019, respectively. Operating Leases Operating lease additions for the three and nine month periods ended September 30, 2020 totaled $3.3 million and $16.6 million, respectively, and totaled $19.9 million and $86.4 million for the three and nine month periods ended September 30, 2019, respectively, excluding the effect of adoption of ASU 2016-02, Leases (Topic 842), of approximately $230.0 million. For the three month periods ended September 30, 2020 and 2019, rent expense for leases that have terms in excess of one year totaled approximately $25.6 million and $29.5 million, respectively, of which $2.3 million and $3.1 million, respectively, represented variable lease costs, and for the nine month periods ended September 30, 2020 and 2019, rent expense for such leases totaled approximately $87.7 million and $84.8 million, respectively, of which $8.0 million and $7.5 million, respectively, represented variable lease costs. The Company also incurred rent expense for leases with terms of one year or less totaling approximately $74.0 million and $144.0 million for the three month periods ended September 30, 2020 and 2019, respectively, and totaling approximately $224.4 million and $352.4 million for the nine month periods ended September 30, 2020 and 2019, respectively. Rent expense for operating leases is generally consistent with the amount of the related payments, which payments are included within operating activities in the consolidated statements of cash flows. Additional Lease Information Future minimum lease commitments as of September 30, 2020 were as follows (in millions):
As of September 30, 2020, finance leases had a weighted average remaining lease term of 2.5 years and a weighted average discount rate of 4.0%. Non-cancelable operating leases had a weighted average remaining lease term of 4.0 years and a weighted average discount rate of 3.9% as of September 30, 2020.
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Stock-Based Compensation and Other Employee Benefit Plans |
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Stock-Based Compensation and Other Employee Benefit Plans | Note 9 – Stock-Based Compensation and Other Employee Benefit Plans The Company has stock-based compensation plans, under which shares of the Company’s common stock are reserved for issuance. Under all stock-based compensation plans in effect as of September 30, 2020, there were approximately 3,011,000 shares available for future grant. Non-cash stock-based compensation expense under all plans totaled $5.6 million and $4.2 million for the three month periods ended September 30, 2020 and 2019, respectively, and totaled $15.5 million and $12.1 million for the nine month periods ended September 30, 2020 and 2019, respectively. Income tax benefits associated with stock-based compensation arrangements totaled $1.4 million and $1.0 million for the three month periods ended September 30, 2020 and 2019, respectively. For the nine month periods ended September 30, 2020 and 2019 income tax benefits totaled $3.6 million and $5.3 million, respectively, including net tax deficiencies related to the vesting of share-based payment awards totaling $0.1 million and net tax benefits totaling $2.3 million, respectively. Restricted Shares MasTec grants restricted stock awards and restricted stock units (together, “restricted shares”) to eligible participants, which are valued based on the closing market share price of MasTec common stock (the “market price”) on the date of grant. During the restriction period, holders of restricted stock awards are entitled to vote the shares. As of September 30, 2020, total unearned compensation related to restricted shares was approximately $31.0 million, which is expected to be recognized over a weighted average period of approximately 2.0 years. The fair value of restricted shares that vested, which is based on the market price on the date of vesting, totaled $0.2 million for both the three month periods ended September 30, 2020 and 2019, and totaled $6.7 million and $14.1 million for the nine month periods ended September 30, 2020 and 2019, respectively.
(a) Includes 2,300 restricted stock units as of September 30, 2020. Employee Stock Purchase Plans The Company has certain employee stock purchase plans (collectively, “ESPPs”), under which shares of the Company’s common stock are available for purchase by eligible employees. The following table provides details pertaining to the Company’s ESPPs for the periods indicated:
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Other Retirement Plans |
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Other Retirement Plans | Note 10 – Other Retirement Plans Multiemployer Plans. Certain of MasTec’s subsidiaries, including certain subsidiaries in Canada, contribute amounts to multiemployer pension and other multiemployer benefit plans and trusts (“MEPPs”), which are recorded as a component of employee wages and salaries within costs of revenue, excluding depreciation and amortization. Contributions are generally based on fixed amounts per hour per employee for employees covered under these plans. Multiemployer plan contribution rates are determined annually and assessed on a “pay-as-you-go” basis based on union employee payrolls. Union payrolls cannot be determined for future periods because the number of union employees employed at a given time, and the plans in which they participate, vary depending upon the location and number of ongoing projects and the need for union resources in connection with those projects. Total contributions to multiemployer plans and the related number of employees covered by these plans for the periods indicated were as follows:
The fluctuations in the number of employees covered under multiemployer plans and related contributions in the table above related primarily to timing of activity for the Company’s union resource-based projects, the majority of which are within its oil and gas operations.
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Equity |
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Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | Note 11 – Equity Share Activity The Company’s share repurchase programs provide for the repurchase of shares of MasTec common stock from time to time in open market transactions or in privately negotiated transactions in accordance with applicable securities laws. The timing and the amount of any repurchases is determined based on market conditions, legal requirements, cash flow and liquidity needs and other factors. The Company’s share repurchase programs do not have an expiration date and may be modified or suspended at any time at the Company’s discretion. Share repurchases, which are recorded at cost and are held in the Company’s treasury, are funded with available cash or with availability under the Credit Facility. The Company may use either authorized and unissued shares or treasury shares to meet share issuance requirements. Treasury stock is recorded at cost. During the nine month period ended September 30, 2020, the Company repurchased 3.6 million shares of its common stock, substantially all of which were repurchased in the first quarter, for an aggregate purchase price totaling approximately $120.2 million. Of the total repurchased shares, 0.6 million were repurchased for $28.8 million under a $150 million share repurchase program that was established in September 2018 and completed in the first quarter of 2020, and 3.0 million were repurchased for $91.4 million under the Company’s December 2018 $100 million share repurchase program. For the nine month period ended September 30, 2019, share repurchases, which were completed in the first quarter under the Company’s September 2018 $150 million share repurchase program, totaled approximately $0.6 million. As of September 30, 2020, $158.6 million was available for future share repurchases under all of the Company’s open share repurchase programs, which included $8.6 million under the Company’s December 2018 share repurchase program, and the full amount of the Company’s March 2020 $150 million share repurchase program. Accumulated Other Comprehensive LossUnrealized foreign currency translation activity, net, for the three and nine month periods ended September 30, 2020 and 2019 relates to the Company’s operations in Canada and Mexico. For the three month period ended September 30, 2020, unrealized investment activity includes unrealized gains on both the interest rate swaps associated with the Waha JVs (the “Waha JV swaps”) and on the Company’s investment in AVCT convertible debentures. For the nine month period ended September 30, 2020, unrealized investment activity, net, includes unrealized losses on the Waha JV swaps, offset, in part, by unrealized gains on the AVCT convertible debentures. For the three and nine month periods ended September 30, 2019, unrealized losses on investment activity relates to the Waha JV swaps. See Note 4 - Fair Value of Financial Instruments for additional information pertaining to the Waha JV swaps and AVCT convertible debentures.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 – Income TaxesIn determining the quarterly provision for income taxes, management uses an estimated annual effective tax rate based on forecasted annual pre-tax income, permanent tax differences, statutory tax rates and tax planning opportunities in the various jurisdictions in which the Company operates. The effect of significant discrete items is separately recognized in the quarter(s) in which they occur. For the three month periods ended September 30, 2020 and 2019, the Company’s consolidated effective tax rates were 25.7% and 25.0%, respectively. For the nine month periods ended September 30, 2020 and 2019, the Company’s consolidated effective tax rates were 22.7% and 24.5%, respectively. The Company’s effective tax rate for the nine month period ended September 30, 2020 benefited from the release of approximately $9.6 million of certain valuation allowances on Canadian deferred tax assets that were no longer necessary, as well as from adjustments related to the finalization of the Company’s 2019 tax returns. For the nine month period ended September 30, 2019, the Company’s effective tax rate was favorably affected by reduced foreign earnings, the recognition of $2.3 million of excess tax benefits from the vesting of share-based awards, adjustments from the finalization of the Company’s 2018 tax returns and the effects of foreign tax rate changes. |
Segments and Related Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure | Note 13 – Segments and Related Information Segment Discussion The Company manages its operations under five operating segments, which represent its five reportable segments: (1) Communications; (2) Oil and Gas; (3) Electrical Transmission; (4) Clean Energy and Infrastructure and (5) Other. This structure is generally focused on broad end-user markets for the Company’s labor-based construction services. All five reportable segments derive their revenue from the engineering, installation and maintenance of infrastructure, primarily in North America. The Communications segment performs engineering, construction, maintenance and customer fulfillment activities related to communications infrastructure, primarily for wireless and wireline/fiber communications and install-to-the-home customers, and, to a lesser extent, infrastructure for utilities, among others. The Company performs engineering, construction and maintenance services for oil and natural gas pipelines and processing facilities for the energy and utilities industries through its Oil and Gas segment. The Electrical Transmission segment primarily serves the energy and utility industries through the engineering, construction and maintenance of electrical transmission lines and substations. The Clean Energy and Infrastructure segment primarily serves energy, utility and other end-markets through the installation and construction of power facilities, including from renewable sources, related electrical transmission infrastructure, ethanol/biofuel facilities and various types of heavy civil and industrial infrastructure. The Other segment includes certain equity investees, the services of which vary from those provided by the Company’s primary segments, as well as other small business units that perform construction and other services for a variety of international end-markets. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is the measure of profitability used by management to manage its segments and, accordingly, in its segment reporting. As appropriate, the Company supplements the reporting of its consolidated financial information determined in accordance with U.S. GAAP with certain non-U.S. GAAP financial measures, including EBITDA. The Company believes these non-U.S. GAAP measures provide meaningful information and help investors understand the Company’s financial results and assess its prospects for future performance. The Company uses EBITDA to evaluate its performance, both internally and as compared with its peers, because it excludes certain items that may not be indicative of the Company’s core operating results for its reportable segments, as well as items that can vary widely across different industries or among companies within the same industry. Segment EBITDA is calculated in a manner consistent with consolidated EBITDA. Summarized financial information for MasTec’s reportable segments is presented and reconciled to consolidated financial information for total MasTec in the following tables, including a reconciliation of consolidated income before income taxes to EBITDA, all of which are presented in millions. The tables below may contain slight summation differences due to rounding.
(a) Revenue generated primarily by utilities customers represented 15.7% and 14.9% of Communications segment revenue for the three month periods ended September 30, 2020 and 2019, respectively, and represented 15.3% for both the nine month periods ended September 30, 2020 and 2019.
Foreign Operations and Other. MasTec operates in North America, primarily in the United States and Canada, and, to a lesser extent, in Mexico and the Caribbean. Revenue derived from U.S. operations totaled $1.7 billion and $2.0 billion for the three month periods ended September 30, 2020 and 2019, respectively, and totaled $4.6 billion and $5.3 billion for the nine month periods ended September 30, 2020 and 2019, respectively. Revenue derived from foreign operations totaled $18.2 million and $64.1 million for the three month periods ended September 30, 2020 and 2019, respectively, and totaled $77.8 million and $191.0 million for the nine month periods ended September 30, 2020 and 2019, respectively, the majority of which was derived from the Company’s Canadian operations in its Oil and Gas segment, and, to a lesser extent, from the Company’s wireless operations in Mexico. Long-lived assets held in the U.S. included property and equipment, net, of $971.4 million and $874.7 million as of September 30, 2020 and December 31, 2019, respectively, and, for the Company’s businesses in foreign countries, totaled $22.8 million and $31.1 million, respectively. Intangible assets and goodwill, net, related to the Company’s U.S. operations totaled approximately $1.4 billion as of both September 30, 2020 and December 31, 2019, and for the Company’s businesses in foreign countries, totaled approximately $50.3 million and $56.4 million as of September 30, 2020 and December 31, 2019, respectively. The majority of the Company’s long-lived and intangible assets and goodwill in foreign countries relate to its Canadian operations. As of September 30, 2020 and December 31, 2019, amounts due from customers from which foreign revenue was derived accounted for approximately 4% and 5%, respectively, of the Company’s consolidated net accounts receivable position, which represents accounts receivable, net, less deferred revenue. Revenue from governmental entities for each of the three and nine month periods ended September 30, 2020 totaled approximately 2% of total revenue, and for each of the three and nine month periods ended September 30, 2019 totaled approximately 1%. Substantially all revenue from governmental entities was derived from the Company’s U.S. operations. Significant Customers Revenue concentration information for significant customers as a percentage of total consolidated revenue was as follows:
(a) The Company’s relationship with AT&T is based upon multiple separate master service and other service agreements, including for installation and maintenance services, as well as construction/installation contracts for AT&T’s: (i) wireless; (ii) wireline/fiber; and (iii) various install-to-the-home businesses, including DIRECTV®. Revenue from AT&T is included within the Communications segment. (b) The Company's relationship with Equitrans Midstream Corporation and its affiliates is based upon various construction contracts for pipeline activities, for which the related revenue is included in the Oil and Gas segment.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 – Commitments and Contingencies MasTec is subject to a variety of legal cases, claims and other disputes that arise from time to time in the ordinary course of its business, including project contract price and acquisition purchase price disputes. MasTec cannot provide assurance that it will be successful in recovering all or any of the potential damages it has claimed or in defending claims against the Company. The outcome of such cases, claims and disputes cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. Other Commitments and Contingencies Leases. In the ordinary course of business, the Company enters into non-cancelable operating leases for certain of its facility, vehicle and equipment needs, including related party leases. See Note 8 - Lease Obligations and Note 15 - Related Party Transactions. Letters of Credit. In the ordinary course of business, the Company is required to post letters of credit for its insurance carriers and surety bond providers and in support of performance under certain contracts as well as certain obligations associated with the Company’s equity investments and other strategic arrangements, including its variable interest entities. Such letters of credit are generally issued by a bank or similar financial institution. The letter of credit commits the issuer to pay specified amounts to the holder of the letter of credit under certain conditions. If this were to occur, the Company would be required to reimburse the issuer of the letter of credit, which, depending upon the circumstances, could result in a charge to earnings. As of September 30, 2020 and December 31, 2019, there were $153.0 million and $115.1 million, respectively, of letters of credit issued under the Company’s credit facilities. The Company is not aware of any material claims relating to its outstanding letters of credit as of September 30, 2020 or December 31, 2019. Performance and Payment Bonds. In the ordinary course of business, MasTec is required by certain customers to provide performance and payment bonds for contractual commitments related to its projects. These bonds provide a guarantee to the customer that the Company will perform under the terms of a contract and that the Company will pay its subcontractors and vendors. If the Company fails to perform under a contract or to pay its subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. The Company must reimburse the surety for expenses or outlays it incurs. As of September 30, 2020 and December 31, 2019, outstanding performance and payment bonds approximated $640.1 million and $551.4 million, respectively, and estimated costs to complete projects secured by these bonds totaled $226.3 million and $194.7 million as of September 30, 2020 and December 31, 2019, respectively. Investment and Strategic Arrangements. The Company holds undivided interests, ranging from 85% to 90%, in multiple proportionately consolidated non-controlled contractual joint ventures that provide infrastructure construction services for electrical transmission projects, as well as a 50% undivided interest in a civil construction project. Income and/or losses incurred by these joint ventures are generally shared proportionally by the respective joint venture members, with the members of the joint ventures jointly and severally liable for all of the obligations of the joint venture. The respective joint venture agreements provide that each joint venture partner indemnify the other party for any liabilities incurred by such joint venture in excess of its ratable portion of such liabilities. Thus, it is possible that the Company could be required to pay or perform obligations in excess of its share if the other joint venture partners fail or refuse to pay or perform their respective share of the obligations. As of September 30, 2020, the Company was not aware of any material future claims against it in connection with these arrangements. Included in the Company’s cash balances as of September 30, 2020 and December 31, 2019 are amounts held by entities that are proportionately consolidated totaling $8.4 million and $13.1 million, respectively. These amounts are available to support the operations of those entities, but are not available for the Company’s other operations. The Company has other investment and strategic arrangements, under which it may incur costs or provide financing, performance, financial and/or other guarantees. See Note 4 - Fair Value of Financial Instruments regarding the Company’s other investment and strategic arrangements. Self-Insurance. MasTec maintains insurance policies for workers’ compensation, general liability and automobile liability, which are subject to per claim deductibles. The Company is self-insured up to the amount of the deductible. The Company also maintains excess umbrella coverage. As of September 30, 2020 and December 31, 2019, MasTec’s estimated liability for unpaid claims and associated expenses, including incurred but not reported losses related to these policies, totaled $129.0 million and $123.4 million, respectively, of which $85.9 million and $87.3 million, respectively, were reflected within other long-term liabilities in the consolidated balance sheets. MasTec also maintains an insurance policy with respect to employee group medical claims, which is subject to annual per employee maximum losses. MasTec’s estimated liability for employee group medical claims totaled $4.1 million and $4.2 million as of September 30, 2020 and December 31, 2019, respectively. The Company is required to post collateral, generally in the form of letters of credit, surety bonds and cash to certain of its insurance carriers. Insurance-related letters of credit for the Company’s workers’ compensation, general liability and automobile liability policies amounted to $59.3 million and $64.0 million as of September 30, 2020 and December 31, 2019, respectively. Outstanding surety bonds related to self-insurance programs amounted to $37.4 million and $38.5 million as of September 30, 2020 and December 31, 2019, respectively. Collective Bargaining Agreements and Multiemployer Plans. As discussed in Note 10 - Other Retirement Plans, certain of MasTec’s subsidiaries are party to various collective bargaining agreements with unions representing certain of their employees, which require the Company to pay specified wages, provide certain benefits and contribute certain amounts to MEPPs. The Employee Retirement Income Security Act of 1974, as amended by the Multiemployer Pension Plan Amendments Act of 1980 (collectively, “ERISA”), which governs U.S.-registered MEPPs, subjects employers to substantial liabilities in the event of an employer’s complete or partial withdrawal from, or upon termination of, such plans. The Company currently contributes, and in the past, has contributed to, plans that are underfunded, and, therefore, could have potential liability associated with a voluntary or involuntary withdrawal from, or termination of, these plans. As of September 30, 2020, the Company does not have plans to withdraw from, and is not aware of circumstances that would reasonably lead to material claims against it, in connection with the MEPPs in which it participates. There can be no assurance, however, that the Company will not be assessed liabilities in the future, including in the form of a surcharge on future benefit contributions or increased contributions on underfunded plans. The amount the Company could be obligated to pay or contribute in the future cannot be estimated, as these amounts are based on future levels of work of the union employees covered by these plans, investment returns, which could be negatively affected by economic and market conditions, and the level of underfunding of such plans. Indemnities. The Company generally indemnifies its customers for the services it provides under its contracts, as well as other specified liabilities, which may subject the Company to indemnity claims, liabilities and related litigation. As of September 30, 2020 and December 31, 2019, the Company was not aware of any material asserted or unasserted claims in connection with these indemnity obligations. Other Guarantees. From time to time in the ordinary course of its business, MasTec guarantees the obligations of its subsidiaries, including obligations under certain contracts with customers, certain lease obligations and in some states, obligations in connection with obtaining contractors’ licenses. MasTec has also issued performance and other guarantees in connection with certain of its equity investments. MasTec also generally warrants the work it performs for a one to two year period following substantial completion of a project. Much of the work performed by the Company is evaluated for defects shortly after the work is completed. If warranty claims occur, the Company could be required to repair or replace warrantied items, or, if customers elect to repair or replace the warrantied item using the services of another provider, the Company could be required to pay for the cost of the repair or replacement. Warranty claims have historically not been material. Concentrations of Risk. The Company had approximately 435 customers for the nine month period ended September 30, 2020. As of September 30, 2020, two customers each accounted for approximately 15% and 13%, respectively, of the Company’s consolidated net accounts receivable position, which represents accounts receivable, net, less deferred revenue. As of December 31, 2019, three customers each accounted for approximately 17%, 13% and 11%, respectively, of the Company’s consolidated net accounts receivable position. In addition, the Company derived 63% and 65%, respectively, of its revenue from its top ten customers for the three month periods ended September 30, 2020 and 2019, and derived 61% and 63%, respectively, of its revenue from its top ten customers for the nine month periods ended September 30, 2020 and 2019.
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Related Party Transactions |
9 Months Ended |
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Sep. 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 September 30, 2020 and 2019, such payments to related party entities totaled approximately $23.8 million and $25.5 million, respectively, and for the nine month periods ended September 30, 2020 and 2019, totaled approximately $65.3 million and $71.8 million, respectively. Related payables totaled approximately $5.9 million and $14.7 million as of September 30, 2020 and December 31, 2019, respectively. Revenue from such related party arrangements totaled approximately $0.9 million and $0.7 million for the three month periods ended September 30, 2020 and 2019, respectively, and totaled $3.2 million and $1.6 million for the nine month periods ended September 30, 2020 and 2019, respectively. As of September 30, 2020, related amounts receivable, net, totaled approximately $0.5 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 were de minimis as of September 30, 2020 and totaled approximately $0.5 million, net, as of 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, $1.8 million and $7.7 million, respectively, for the three month periods ended September 30, 2020 and 2019, and $3.2 million and $23.6 million, respectively, for the nine month periods ended September 30, 2020 and 2019. As of September 30, 2020 and December 31, 2019, amounts payable to CCI, net of rebates receivable, totaled approximately $1.6 million and $0.2 million, respectively. The Company has also rented equipment to CCI. Revenue from equipment rentals to CCI totaled approximately $0.2 million and $0.8 million for the three and nine month periods ended September 30, 2020, respectively, and related receivables totaled approximately $0.2 million as of September 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 September 30, 2020, and for the three month period ended September 30, 2019, MasTec incurred subcontracting expenses of approximately $3.1 million. For the nine month periods ended September 30, 2020 and 2019, MasTec incurred subcontracting expenses of approximately $0.6 million and $9.3 million, respectively. As of September 30, 2020 and December 31, 2019, related amounts payable totaled approximately $0.1 million and $0.2 million, respectively. MasTec has a leasing arrangement for an aircraft that is owned by an entity that Jorge Mas owns. For both the three month periods ended September 30, 2020 and 2019, MasTec paid approximately $0.6 million, related to this leasing arrangement, and for the nine month periods ended September 30, 2020 and 2019, paid approximately $1.9 million and $2.0 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 as well as wireless infrastructure services. MasTec charged approximately $0.7 million and $5.2 million under these arrangements for the three month periods ended September 30, 2020 and 2019, respectively, and charged approximately $6.2 million and $7.4 million for the nine month periods ended September 30, 2020 and 2019, respectively. Amounts outstanding as of September 30, 2020 and December 31, 2019 totaled approximately $0.7 million and $3.9 million, respectively. Payments for other expenses related to the Franchise totaled $0.2 million for the nine month period ended September 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 for both the three month periods ended September 30, 2020 and 2019, and for the nine month periods ended September 30, 2020 and 2019, totaled approximately $1.0 million and $1.1 million, respectively. As of September 30, 2020 and December 31, 2019, outstanding receivables related to these arrangements totaled approximately $1.0 million and $0.8 million, respectively. The Company has a 25% interest in an entity associated with an acquisition, under which the acquired business and the entity have a subcontracting arrangement. The Company’s interest in this entity is accounted for as an equity method investment. As of September 30, 2020, the Company’s net investment in this entity was a liability of approximately $1.7 million, which net amount includes approximately $2.2 million of accounts receivable, net, less deferred revenue, related to the subcontracting arrangement. Additionally, the Company has a strategic arrangement with an entity associated with a separate acquisition, in which members of management of the acquired business have an ownership interest. For both the three and nine month periods ended September 30, 2020, approximately $0.6 million, net, of income was recognized in connection with this arrangement, and amounts receivable totaled $0.2 million as of September 30, 2020. In addition, for the nine month period ended September 30, 2020, the Company advanced $1.2 million on behalf of this entity, of which $0.6 million was outstanding as of September 30, 2020. Split Dollar Agreements MasTec has split dollar life insurance agreements with trusts, of which Jorge Mas or José R. Mas is a trustee. For both the three month periods ended September 30, 2020 and 2019, the Company paid $0.6 million in connection with the agreements for Jorge Mas, and no payments were made for José R. Mas. For both the nine month periods ended September 30, 2020 and 2019, the Company paid $1.1 million in connection with the split dollar agreements for Jorge Mas, and paid $0.7 million for both the nine month periods ended September 30, 2020 and 2019 for José R. Mas. As of September 30, 2020 and December 31, 2019, life insurance assets associated with these agreements totaled approximately $22.2 million and $20.3 million, respectively.
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Business, Basis of Presentation and Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying consolidated balance sheet as of December 31, 2019 is derived from the Company’s audited financial statements as of that date. Because certain information and footnote disclosures have been condensed or omitted, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019 contained in the Company’s 2019 Annual Report on Form 10-K (the “2019 Form 10-K”). In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been included. When necessary, certain prior year amounts have been reclassified to conform to the current period presentation. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The Company believes that the disclosures made in these consolidated financial statements are adequate to make the information not misleading.
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Reclassifications | When necessary, certain prior year amounts have been reclassified to conform to the current period presentation. |
Principles of Consolidation | Principles of ConsolidationThe accompanying consolidated financial statements include MasTec, Inc. and its subsidiaries and include the accounts of all majority owned subsidiaries over which the Company exercises control and, when applicable, entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Other parties’ interests in entities that MasTec consolidates are reported as non-controlling interests within equity, except for mandatorily redeemable non-controlling interests, which are recorded within liabilities. Net income or loss attributable to non-controlling interests is reported as a separate line item below net income or loss. The Company’s investments in entities for which the Company does not have a controlling interest, but over which it has the ability to exert significant influence, are accounted for using the equity method of accounting. For equity investees in which the Company has an undivided interest in the assets, liabilities and profits or losses of an unincorporated entity, but does not exercise control over the entity, the Company consolidates its proportional interest in the accounts of the entity. |
Equity Method Investments | The Company’s investments in entities for which the Company does not have a controlling interest, but over which it has the ability to exert significant influence, are accounted for using the equity method of accounting. |
Unincorporated Entities, Proportional Consolidation | For equity investees in which the Company has an undivided interest in the assets, liabilities and profits or losses of an unincorporated entity, but does not exercise control over the entity, the Company consolidates its proportional interest in the accounts of the entity |
Translation of Foreign Currencies | Translation of Foreign CurrenciesThe assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. dollars at period-end exchange rates, with resulting translation gains or losses included within other comprehensive income or loss. Revenue and expenses are translated into U.S. dollars at average rates of exchange during the applicable period. Substantially all of the Company’s foreign operations use their local currency as their functional currency. Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in other income or expense, net. |
Management Estimates | Management Estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates are based on historical experience and various other assumptions, including the potential future effects of the COVID-19 pandemic and other relevant global events. These estimates form the basis for making judgments about the Company’s operating results and the carrying values of assets and liabilities that are not readily apparent from other sources. While management believes that such estimates are reasonable when considered in conjunction with the Company’s consolidated financial position and results of operations taken as a whole, actual results could differ materially from those estimates. Key estimates include: the recognition of revenue and project profit or loss, which the Company defines as project revenue, less project costs of revenue, including project-related depreciation, in particular, on construction contracts accounted for under the cost-to-cost method, for which the recorded amounts require estimates of costs to complete and the amount and probability of variable consideration included in the contract transaction price; fair value estimates, including those related to acquisitions, valuations of goodwill and intangible assets, acquisition-related contingent consideration and other liabilities, equity investments and other long-lived assets; allowances for credit losses; asset lives used in computing depreciation and amortization; fair values of financial instruments; self-insurance liabilities; other accruals and allowances; income taxes; and the estimated effects of litigation and other contingencies.
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COVID-19 Disclosure | COVID-19 Pandemic During March 2020, the World Health Organization declared a global pandemic related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The COVID-19 pandemic has significantly affected economic conditions in the United States and internationally, as national, state and local governments reacted to the public health crisis by requiring mitigation measures resulting in workforce, supply chain and other market disruptions that have created significant uncertainties in the U.S. and global economies and disrupted business activities for an uncertain period of time. Although certain jurisdictions have subsequently taken steps to lift or ease such restrictions to various degrees, such lifting or easing could subsequently be reversed, or new restrictions imposed, due to a rise in cases of COVID-19. Most of the Company’s construction services have been and currently are deemed essential under state and local pandemic mitigation orders, and all of its business segments continue to operate. Where safe and possible, the Company has generally been directed by its customers to maintain normal work schedules. Management’s top priority has been to take appropriate actions to protect the health and safety of its employees, customers and business partners, including adjusting its standard operating procedures to respond to evolving health guidelines. The COVID-19 pandemic has had a negative impact on the Company’s operations and is expected to have some continued negative impact. These impacts include lost productivity from governmental permitting approval delays, reduced crew productivity due to social distancing, other mitigation measures or other factors, the health and availability of work crews or other key personnel, including subcontractors or supply chain disruptions, and/or delayed project start dates or project shutdowns or cancellations that may be mandated or requested by governmental authorities or others, all of which could result in lower revenue or higher operating costs and/or create lower levels of overhead cost absorption. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020. The CARES Act provides for various tax relief and incentive measures, including provisions permitting the deferral and/or reduction of certain federal and payroll tax amounts. The Company has pursued certain of these relief provisions, and for the nine month period ended September 30, 2020, has deferred approximately $22 million of payroll taxes, net. The Company will continue to evaluate the potential effects of the CARES Act on its financial position, results of operations and cash flows. Management believes that it is taking appropriate steps to mitigate any potential impact to the Company; however, given the uncertainty regarding the potential effects of the COVID-19 pandemic, any future impacts cannot be quantified or predicted with specificity.
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Revenue Recognition | Revenue Recognition The Company recognizes revenue from contracts with customers under Accounting Standards Codification (“ASC”) Topic 606 (“Topic 606”). Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which an entity expects to be entitled in exchange for the goods and services transferred. Revenue is primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied for the related contracts. Contracts. The Company derives revenue primarily from construction projects performed under: (i) master and other service agreements, which provide a menu of available services in a specific geographic territory that are utilized on an as-needed basis, and are typically priced using either a time and materials, or a fixed price per unit basis; and (ii) contracts for specific projects requiring the construction and installation of an entire infrastructure system, or specified units within an infrastructure system, which are subject to multiple pricing options, including fixed price, unit price, time and materials, or cost plus a markup. Revenue derived from projects performed under master service and other service agreements totaled 32% of consolidated revenue for both the three month periods ended September 30, 2020 and 2019, and totaled 36% and 35% for the nine month periods ended September 30, 2020 and 2019, respectively. For certain master service and other service agreements under which the Company performs installation and maintenance services, primarily for install-to-the-home service providers in its Communications segment, revenue is recognized at a point in time. This is generally when the work order has been fulfilled, which is typically the same day the work is initiated. Point in time revenue accounted for approximately 4% of consolidated revenue for both the three month periods ended September 30, 2020 and 2019, and accounted for approximately 5% for both the nine month periods ended September 30, 2020 and 2019. Substantially all of the Company’s other revenue is recognized over time. The total contract transaction price and cost estimation processes used for recognizing revenue over time under the cost-to-cost method is based on the professional knowledge and experience of the Company’s project managers, engineers and financial professionals. Management reviews estimates of total contract transaction price and total project costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and the Company’s profit recognition. Changes in these factors could result in revisions to revenue in the period in which the revisions are determined, which could materially affect the Company’s consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are determined. For both the nine month periods ended September 30, 2020 and 2019, project profit was affected by less than 5% as a result of changes in contract estimates included in projects that were in process as of December 31, 2019 and 2018. Revenue recognized for the three month periods ended September 30, 2020 and 2019 as a result of changes in total contract transaction price estimates, including for variable consideration, from performance obligations satisfied or partially satisfied in prior periods, totaled approximately $8.8 million and $13.3 million, respectively, and totaled $11.5 million and $52.2 million for the nine month periods ended September 30, 2020 and 2019, respectively. The Company may incur certain costs that can be capitalized, such as initial set-up or mobilization costs. Such costs, which are amortized over the life of the respective projects, were not material as of September 30, 2020 or December 31, 2019. Performance Obligations. A performance obligation is a contractual promise to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied. The vast majority of the Company’s performance obligations are completed within one year. Remaining performance obligations represent the amount of unearned transaction prices under contracts for which work is wholly or partially unperformed, including the Company’s share of unearned transaction prices from its proportionately consolidated non-controlled joint ventures. As of September 30, 2020, the amount of the Company’s remaining performance obligations was $5.3 billion. Based on current expectations, the Company expects to recognize approximately $1.6 billion of its remaining performance obligations as revenue during 2020, with the remainder to be recognized primarily in 2021. Variable Consideration. Transaction prices for the Company’s contracts may include variable consideration, which comprises items such as change orders, claims and incentives. Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the amount of consideration to which the Company will be entitled. Management’s estimates of variable consideration and the determination of whether to include estimated amounts in transaction prices are based largely on engineering studies and legal opinions, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available at the time of the estimate. To the extent unapproved change orders, claims and other variable consideration reflected in transaction prices are not resolved in the Company’s favor, or to the extent incentives reflected in transaction prices are not earned, there could be reductions in, or reversals of, previously recognized revenue. As of September 30, 2020 and December 31, 2019, the Company included approximately $50 million and $27 million, respectively, of change orders and/or claims in transaction prices for certain contracts that were in the process of being resolved in the ordinary course of business, including through negotiation, arbitration and other proceedings. These transaction price adjustments, when earned, are included within contract assets or accounts receivable, net of allowance, as appropriate. As of both September 30, 2020 and December 31, 2019, these change orders and/or claims were primarily related to certain projects in the Company’s Oil and Gas and Electrical Transmission segments. The Company actively engages with its customers to complete the final approval process, and generally expects these processes to be completed within one year. Amounts ultimately realized upon final agreement by customers could be higher or lower than such estimated amounts.
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements See the recent accounting pronouncements discussion below for information pertaining to the effects of recently adopted and other recent accounting pronouncements, as updated from the discussion in the Company’s 2019 Form 10-K. Accounting Pronouncements Adopted in 2020 In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”) to reduce diversity in practice in accounting for the costs of implementing cloud computing arrangements that are service contracts. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for internal-use software. Accounting for the service element of the cloud computing arrangement is not affected by the new guidance. Under ASU 2018-15, amortization expense, payments for and asset balances related to such capitalized implementation costs are to be presented within the same line items of the entity’s statements of operations, cash flows and balance sheets, respectively, as the related service fee activity and balances would be presented. ASU 2018-15, which the Company adopted on a prospective basis during the first quarter of 2020, did not have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13, which is intended to improve the effectiveness of fair value measurement disclosures, modifies the disclosure requirements for certain estimates and assumptions used in determining the fair value of assets and liabilities. ASU 2018-13, which the Company adopted during the first quarter of 2020, did not have a material effect on the Company’s consolidated financial statements. See Note 4 - Fair Value of Financial Instruments for disclosure updates pertaining to significant unobservable inputs used to develop fair value estimates for certain of the Company’s Level 3 financial instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This ASU, together with its related clarifying ASUs (collectively, “ASU 2016-13”), introduced an expected credit loss methodology for the measurement and recognition of credit losses on most financial assets, including financial assets arising from revenue transactions, such as accounts receivable and contract assets. The new expected credit loss methodology, which is based on historical experience, current conditions and reasonable and supportable forecasts, replaced the incurred loss model for measuring and recognizing expected credit losses. The Company adopted this ASU in the first quarter of 2020 and incorporated this guidance into its methodology for estimating its accounts receivable allowances. Based on historical trends, the financial condition of the Company’s customers and management’s expectations of economic and industry factors affecting the Company’s customers, ASU 2016-13 did not have a material effect on the Company’s consolidated financial statements upon adoption. Future credit loss expectations could be affected by changes in estimates or developing trends, including from changes in credit quality of the Company’s customers, changes in specific risks associated with the Company’s financial assets, or from changes in management’s expectations of future economic and industry conditions or other factors. Management actively monitors the economic environment, including any potential effects from the COVID-19 pandemic and/or volatility in the oil and gas markets on the credit quality of the Company’s customers and/or its financial assets. For additional information about the Company’s accounts receivable and related allowances, see Note 5 - Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities.
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share Information | The following table provides details underlying the Company’s earnings per share calculations for the periods indicated (in thousands):
(a)Calculated as total net income less amounts attributable to non-controlling interests. (b)For the nine month period ended September 30, 2020, there were 58,759 anti-dilutive common stock equivalents.
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill by Segment | The following table provides balances for goodwill by reportable segment as of September 30, 2020 (in millions):
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Rollforward of Other Intangible Assets | The following table provides a reconciliation of changes in other intangible assets, net, for the period indicated (in millions):
(a)Consists principally of trade names and non-compete agreements. (b)In connection with its first quarter assessment of goodwill and indefinite-lived intangible assets, management reassessed the indefinite-life classification of its two pre-qualification intangible assets. Management determined that, based on changes in the assets’ characteristics, including current and expected changes in the customer mix of the associated reporting units, a finite-life classification for these assets was more appropriate. As a result, in the first quarter of 2020, the Company changed the classification of these pre-qualification intangible assets from indefinite-lived to finite-lived and began amortizing them on an accelerated basis, with an estimated remaining weighted average useful life of approximately 12 years. (c)Represents adjustments to preliminary estimates of fair value within the measurement period of up to one year from the date of acquisition.
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Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Net of Allowance, and Contract Assets | The following table provides details of accounts receivable, net of allowance, and contract assets (together, “accounts receivable, net”) as of the dates indicated (in millions):
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Property and Equipment, Net (Tables) |
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Schedule of Property and Equipment, Net | The following table provides details of property and equipment, net, including property and equipment held under finance leases as of the dates indicated (in millions):
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Debt (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Values of Debt | The following table provides details of the carrying values of debt as of the dates indicated (in millions):
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Lease Obligations (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Commitments, Finance Leases | Future minimum lease commitments as of September 30, 2020 were as follows (in millions):
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Schedule of Future Minimum Lease Commitments, Operating Leases | Future minimum lease commitments as of September 30, 2020 were as follows (in millions):
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Stock-Based Compensation and Other Employee Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity, Restricted Shares |
(a) Includes 2,300 restricted stock units as of September 30, 2020.
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Schedule of Employee Stock Purchase Plans | The following table provides details pertaining to the Company’s ESPPs for the periods indicated:
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Other Retirement Plans (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Covered Employees and Contributions, Multiemployer Plans | Total contributions to multiemployer plans and the related number of employees covered by these plans for the periods indicated were as follows:
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Segments and Related Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Information by Reportable Segment |
(a) Revenue generated primarily by utilities customers represented 15.7% and 14.9% of Communications segment revenue for the three month periods ended September 30, 2020 and 2019, respectively, and represented 15.3% for both the nine month periods ended September 30, 2020 and 2019.
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Reconciliation of Consolidated Income before Income Taxes to EBITDA |
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Business, Basis of Presentation and Significant Accounting Policies (Remaining Performance Obligations) (Narrative) (Details) $ in Billions |
Sep. 30, 2020
USD ($)
|
---|---|
Accounting Policies [Abstract] | |
Revenue recognition, remaining performance obligations, contract price allocated (in dollars) | $ 5.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Accounting Policies [Abstract] | |
Revenue recognition, remaining performance obligations, contract price allocated (in dollars) | $ 1.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Earnings Per Share (Narrative) (Details) shares in Millions |
9 Months Ended |
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Sep. 30, 2020
shares
| |
Earnings Per Share [Abstract] | |
Treasury stock acquired (in shares) | 3.6 |
Effect of share repurchases, decrease in weighted average shares outstanding (in shares) | 2.6 |
Earnings Per Share (Schedule of Earnings Per Share Information) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Net income attributable to MasTec: | ||||
Net income - basic (in dollars) | $ 116,491 | $ 128,596 | $ 209,726 | $ 291,418 |
Net income - diluted (in dollars) | $ 116,491 | $ 128,596 | $ 209,726 | $ 291,418 |
Weighted average shares outstanding: | ||||
Weighted average shares outstanding - basic | 72,138,000 | 75,217,000 | 72,971,000 | 75,131,000 |
Dilutive common stock equivalents (in shares) | 957,000 | 717,000 | 816,000 | 629,000 |
Weighted average shares outstanding - diluted | 73,095,000 | 75,934,000 | 73,787,000 | 75,760,000 |
Anti-dilutive common stock (in shares) | 58,759 |
Goodwill and Other Intangible Assets (Schedule of Goodwill by Segment) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill, gross | $ 1,350,300 | |
Accumulated impairment loss | (118,600) | |
Goodwill, net | 1,231,717 | $ 1,221,440 |
Communications [Member] | ||
Goodwill [Line Items] | ||
Goodwill, gross | 551,400 | |
Accumulated impairment loss | 0 | |
Goodwill, net | 551,400 | |
Oil and Gas [Member] | ||
Goodwill [Line Items] | ||
Goodwill, gross | 496,000 | |
Accumulated impairment loss | (118,600) | |
Goodwill, net | 377,400 | |
Electrical Transmission [Member] | ||
Goodwill [Line Items] | ||
Goodwill, gross | 150,100 | |
Accumulated impairment loss | 0 | |
Goodwill, net | 150,100 | |
Clean Energy and Infrastructure [Member] | ||
Goodwill [Line Items] | ||
Goodwill, gross | 152,800 | |
Accumulated impairment loss | 0 | |
Goodwill, net | $ 152,800 |
Goodwill and Other Intangible Assets (Narrative) (Details) $ in Millions |
9 Months Ended |
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Sep. 30, 2020
USD ($)
| |
Goodwill [Line Items] | |
Goodwill, acquired during period | $ 5.2 |
Goodwill, measurement period adjustments | 5.4 |
Goodwill, Gross [Member] | |
Goodwill [Line Items] | |
Goodwill, currency translation gains (losses) | (3.2) |
Goodwill, Accumulated Impairment Loss [Member] | |
Goodwill [Line Items] | |
Goodwill, currency translation gains (losses) | $ 2.9 |
Goodwill and Other Intangible Assets (Quarterly Assessment for Indicators of Impairment) (Narrative) (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020
USD ($)
reportingunit
|
Dec. 31, 2019
USD ($)
|
|
Goodwill [Line Items] | ||
Goodwill, net | $ | $ 1,231,717 | $ 1,221,440 |
Oil and Gas [Member] | ||
Goodwill [Line Items] | ||
Number of reporting units | reportingunit | 3 | |
Goodwill, net | $ | $ 377,400 | |
Oil and Gas [Member] | Reporting Unit A [Member] | ||
Goodwill [Line Items] | ||
Number of reporting units | reportingunit | 1 | |
Goodwill, net | $ | $ 15,300 | |
Reporting unit, percentage of fair value in excess of carrying amount | 10.00% | |
Oil and Gas [Member] | Reporting Unit B [Member] | ||
Goodwill [Line Items] | ||
Number of reporting units | reportingunit | 2 |
Goodwill and Other Intangible Assets (Pro Forma Financial Information and Acquisition Results) (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Pro Forma Financial Information and Acquisition Results [Abstract] | ||||
Business combinations, unaudited supplemental pro forma revenue | $ 1,700.0 | $ 2,100.0 | $ 4,700.0 | $ 5,800.0 |
Business combinations, unaudited supplemental pro forma net income (loss) | 117.9 | 127.4 | 212.7 | 300.7 |
Business combinations, consolidated acquisition-related revenue | 69.3 | 41.7 | 182.4 | 116.9 |
Business combinations, consolidated acquisition-related income (loss) | $ (4.3) | $ 1.5 | $ (5.0) | $ (5.9) |
Fair Value of Financial Instruments (Other Investments - AVCT) (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Fair Value, Financial Instruments Measured on a Recurring Basis [Line Items] | |||
Equity investments, adjusted cost basis, amount | $ 17.0 | $ 17.0 | $ 18.0 |
AVCT [Member] | |||
Fair Value, Financial Instruments Measured on a Recurring Basis [Line Items] | |||
Equity investment ownership percentage | 9.00% | 9.00% | 21.00% |
Beneficial ownership of all interests, percentage | 22.00% | 22.00% | 21.00% |
Equity investment and warrants, amount paid (in dollars) | $ 5.0 | $ 5.0 | |
Unrealized fair value measurement gains, net, AVCT shares | 0.9 | 4.7 | |
Unrealized fair value measurement gains, AVCT convertible debentures | 0.9 | 0.9 | |
Equity investments, adjusted cost basis, amount | $ 2.0 | ||
AVCT [Member] | Common Stock [Member] | |||
Fair Value, Financial Instruments Measured on a Recurring Basis [Line Items] | |||
Equity securities, fair value | $ 11.0 | $ 11.0 |
Fair Value of Financial Instruments (Other Investments - Telecommunications Entities) (Narrative) (Details) - Equity Investee [Member] - Subcontracting Arrangements [Member] $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
|
Fair Value, Financial Instruments Measured on a Non-Recurring Basis [Line Items] | ||
Payments or expenses, related party | $ 2.7 | $ 9.0 |
Payables, related party | $ 0.4 | $ 0.4 |
Fair Value of Financial Instruments (Senior Notes) (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
4.875% Senior Notes [Member] | ||
Fair Value Disclosure of Liabilities Not Measured at Fair Value [Line Items] | ||
Senior Notes, gross carrying amount | $ 400.0 | |
4.875% Senior Notes [Member] | Senior Notes [Member] | ||
Fair Value Disclosure of Liabilities Not Measured at Fair Value [Line Items] | ||
Debt instrument, interest rate (percentage) | 4.875% | |
Debt instrument, maturity date | Mar. 15, 2023 | |
Senior Notes, estimated fair value | $ 404.5 | |
4.50% Senior Notes [Member] | ||
Fair Value Disclosure of Liabilities Not Measured at Fair Value [Line Items] | ||
Senior Notes, gross carrying amount | $ 600.0 | |
4.50% Senior Notes [Member] | Senior Notes [Member] | ||
Fair Value Disclosure of Liabilities Not Measured at Fair Value [Line Items] | ||
Debt instrument, interest rate (percentage) | 4.50% | |
Debt instrument, maturity date | Aug. 15, 2028 | |
Senior Notes, estimated fair value | $ 606.0 |
Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities (Schedule of Accounts Receivable, Net of Allowance and Contract Assets) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Receivables [Abstract] | ||
Contract billings | $ 939,600 | $ 860,400 |
Less allowance | (22,500) | (10,100) |
Accounts receivable, net of allowance | 917,099 | 850,326 |
Contract Assets [Abstract] | ||
Retainage | 313,100 | 345,200 |
Unbilled receivables | 706,800 | 679,400 |
Contract assets | $ 1,019,879 | $ 1,024,568 |
Property and Equipment, Net (Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Property and Equipment [Line Items] | ||
Property and equipment | $ 2,127,600 | $ 1,923,500 |
Less accumulated depreciation and amortization | (1,133,400) | (1,017,700) |
Property and equipment, net | 994,193 | 905,835 |
Land [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment | 6,000 | 4,900 |
Building and Leasehold Improvements [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment | 40,800 | 35,800 |
Machinery and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment | 1,834,700 | 1,659,400 |
Office Furniture and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment | 216,300 | 197,300 |
Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment | $ 29,800 | $ 26,100 |
Property and Equipment, Net (Narrative) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Capitalized internal-use software, gross | $ 149.3 | $ 138.2 |
Capitalized internal-use software, net | $ 32.5 | $ 31.5 |
Debt (Other Credit Facilities) (Narrative) (Details) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Letters of credit issued | $ 153,000,000.0 | $ 115,100,000 |
Other Credit Facilities [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt obligations | $ 5,100,000 | 0 |
Line of credit facility, interest rate (percentage) | 3.20% | |
Line of Credit [Member] | Letters of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 50,000,000.0 | |
Standby Letters of Credit [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Letters of credit issued | $ 18,200,000 | $ 17,100,000 |
Standby Letters of Credit [Member] | Line of Credit [Member] | Letters of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility, interest rate (percentage) | 0.50% | 0.40% |
Debt (Additional Information) (Narrative) (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Disclosure [Abstract] | ||
Debt instruments, accrued interest payable (in dollars) | $ 5.7 | $ 7.5 |
Lease Obligations (Additional Lease Information) (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Lessee, Lease, Description [Line Items] | |
Finance leases, weighted average remaining lease term (in years) | 2 years 6 months |
Finance leases, weighted average discount rate, percent | 4.00% |
Operating leases, weighted average remaining lease term (in years) | 4 years |
Operating leases, weighted average discount rate, percent | 3.90% |
Minimum [Member] | Equipment Leases [Member] | |
Lessee, Lease, Description [Line Items] | |
Leases, renewal term | 1 year |
Minimum [Member] | Facility Leases [Member] | |
Lessee, Lease, Description [Line Items] | |
Leases, renewal term | 1 year |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Leases, remaining lease terms | 9 years |
Maximum [Member] | Equipment Leases [Member] | |
Lessee, Lease, Description [Line Items] | |
Leases, renewal term | 5 years |
Maximum [Member] | Facility Leases [Member] | |
Lessee, Lease, Description [Line Items] | |
Leases, renewal term | 5 years |
Lease Obligations (Finance Leases) (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||||
Finance leases, assets, gross | $ 536.8 | $ 536.8 | $ 463.5 | ||
Finance leases, assets, net | 406.5 | 406.5 | $ 375.9 | ||
Finance leases, assets, depreciation | $ 17.5 | $ 13.1 | $ 50.1 | $ 34.2 |
Lease Obligations (Operating Leases) (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
Jan. 01, 2019 |
|
Operating Leased Assets [Line Items] | ||||||
Operating leases, additions | $ 3,300 | $ 19,900 | $ 16,600 | $ 86,400 | ||
Operating lease assets | 187,531 | 187,531 | $ 229,903 | |||
Operating leases, expense | 25,600 | 29,500 | 87,700 | 84,800 | ||
Operating leases, variable lease costs | 2,300 | 3,100 | 8,000 | 7,500 | ||
Operating leases, short-term leases, expense | $ 74,000 | $ 144,000 | $ 224,400 | $ 352,400 | ||
Minimum [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating leases, term of contract (in years) | 1 year | 1 year | ||||
Maximum [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating leases, term of contract (in years) | 1 year | 1 year | ||||
Accounting Standards Update 2016-02 [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating lease assets | $ 230,000 |
Lease Obligations (Schedule of Future Minimum Lease Commitments) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Finance Leases | ||
2020, remaining three months | $ 41,600 | |
2021 | 131,700 | |
2022 | 91,500 | |
2023 | 38,900 | |
2024 | 6,400 | |
Thereafter | 200 | |
Total minimum lease payments | 310,300 | |
Less amounts representing interest | (15,200) | |
Total lease obligations, net of interest | 295,100 | |
Less current portion | 128,900 | |
Long-term portion of lease obligations, net of interest | 166,200 | |
Operating Leases | ||
2020, remaining three months | 29,400 | |
2021 | 72,600 | |
2022 | 46,500 | |
2023 | 23,800 | |
2024 | 15,600 | |
Thereafter | 30,000 | |
Total minimum lease payments | 217,900 | |
Less amounts representing interest | (17,900) | |
Total lease obligations, net of interest | 200,000 | |
Less current portion | 74,439 | $ 81,561 |
Long-term portion of lease obligations, net of interest | $ 125,639 | $ 154,553 |
Stock-Based Compensation and Other Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Payment Arrangement [Abstract] | ||||
Stock-based compensation plans, number of shares available for future grant | 3,011,000 | 3,011,000 | ||
Non-cash stock-based compensation expense | $ 5.6 | $ 4.2 | $ 15.5 | $ 12.1 |
Stock-based compensation, income tax benefits | $ 1.4 | $ 1.0 | 3.6 | 5.3 |
Stock-based compensation, vested awards, net income tax benefits (deficiencies) | $ (0.1) | $ 2.3 |
Stock-Based Compensation and Other Employee Benefit Plans (Restricted Shares) (Narrative) (Details) - Restricted Shares [Member] - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Stock-Based Compensation and Other Employee Benefit Plans [Line Items] | |||||
Stock-based compensation awards, unearned compensation | $ 31.0 | $ 31.0 | $ 31.0 | ||
Stock-based compensation awards, unearned compensation, weighted average expected recognition period (in years) | 2 years | ||||
Stock-based compensation, vested awards, intrinsic value | $ 0.2 | $ 0.2 | $ 6.7 | $ 14.1 |
Stock-Based Compensation and Other Employee Benefit Plans (Schedule of Employee Stock Purchase Plans) (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Stock-Based Compensation and Other Employee Benefit Plans [Line Items] | ||
Cash proceeds (in dollars) | $ 5,483 | $ 3,414 |
Common shares issued (in shares) | 193,655 | 87,014 |
Weighted average price per share purchased under employee stock purchase plans | $ 28.29 | $ 39.23 |
Weighted average per share grant date fair value (in dollars per share) | $ 8.61 | $ 9.97 |
Employee Stock Purchase Plans [Member] | ||
Stock-Based Compensation and Other Employee Benefit Plans [Line Items] | ||
Cash proceeds (in dollars) | $ 5,500 | $ 3,400 |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Consolidated effective tax rate, percent | 25.70% | 25.00% | 22.70% | 24.50% |
Effective income tax rate reconciliation, other adjustments, amount | $ 9.6 | |||
Stock-based compensation, vested awards, net tax benefits | $ 2.3 |
Segments and Related Information (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020
numberOfSegments
| |
Segment Reporting [Abstract] | |
Number of operating segments | 5 |
Number of reportable segments | 5 |
Segments and Related Information (Schedule of Financial Information by Reportable Segment - EBITDA) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
EBITDA: | ||||
EBITDA | $ 253.6 | $ 247.9 | $ 527.4 | $ 620.8 |
Reportable Segments [Member] | Communications [Member] | ||||
EBITDA: | ||||
EBITDA | 79.6 | 57.1 | 206.8 | 154.8 |
Reportable Segments [Member] | Oil and Gas [Member] | ||||
EBITDA: | ||||
EBITDA | 160.4 | 212.9 | 315.0 | 499.6 |
Reportable Segments [Member] | Electrical Transmission [Member] | ||||
EBITDA: | ||||
EBITDA | 9.1 | 7.8 | 14.2 | 20.3 |
Reportable Segments [Member] | Clean Energy and Infrastructure [Member] | ||||
EBITDA: | ||||
EBITDA | 34.4 | 2.3 | 69.5 | 14.4 |
Reportable Segments [Member] | Other [Member] | ||||
EBITDA: | ||||
EBITDA | 7.6 | 6.7 | 22.5 | 19.4 |
Corporate [Member] | ||||
EBITDA: | ||||
EBITDA | $ (37.5) | $ (38.9) | $ (100.6) | $ (87.7) |
Segments and Related Information (Reconciliation of Consolidated Income before Income Taxes to EBITDA) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
EBITDA Reconciliation: | ||||
Income before income taxes | $ 157,405 | $ 173,385 | $ 271,455 | $ 388,484 |
Interest expense, net | 13,553 | 19,297 | 45,365 | 58,178 |
Depreciation | 71,397 | 50,515 | 182,173 | 160,019 |
Amortization of intangible assets | 11,200 | 4,681 | 28,384 | 14,152 |
EBITDA | $ 253,600 | $ 247,900 | $ 527,400 | $ 620,800 |
Segments and Related Information Segments and Related Information (Significant Customers) (Narrative) (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
AT&T [Member] | ||||
Segments and Related Information [Line Items] | ||||
Concentration risk, percentage of total | 15.00% | 18.00% | 19.00% | 20.00% |
Equitrans Midstream Corporation/EQT Corporation [Member] | ||||
Segments and Related Information [Line Items] | ||||
Concentration risk, percentage of total | 3.00% | 17.00% | 2.00% | 12.00% |
Commitments and Contingencies (Other Guarantees) (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Minimum [Member] | |
Other Guarantees [Line Items] | |
General warranty, period (in years) | 1 year |
Maximum [Member] | |
Other Guarantees [Line Items] | |
General warranty, period (in years) | 2 years |
Related Party Transactions (Construction Management Firm and CCI) (Narrative) (Details) - Immediate Family Member of Management [Member] - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Construction Management Firm Specializing in Steel Building Systems [Member] | |||||
Related Party Transaction [Line Items] | |||||
Advances outstanding, related party | $ 0.5 | ||||
CCI [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity investment, ownership percentage | 15.00% | 15.00% | |||
CCI [Member] | Equipment [Member] | |||||
Related Party Transaction [Line Items] | |||||
Payments, net of rebates, related party | $ 1.8 | $ 7.7 | $ 3.2 | $ 23.6 | |
Payables, related party | 1.6 | 1.6 | $ 0.2 | ||
Revenue, related party | 0.2 | 0.8 | |||
Receivables, related party | $ 0.2 | $ 0.2 |
Related Party Transactions (Split Dollar Agreements) (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Chairman, Board of Directors [Member] | |||||
Related Party Transaction [Line Items] | |||||
Payments for life insurance policies | $ 0.6 | $ 0.6 | $ 1.1 | $ 1.1 | |
Chief Executive Officer [Member] | |||||
Related Party Transaction [Line Items] | |||||
Payments for life insurance policies | 0.0 | $ 0.0 | 0.7 | $ 0.7 | |
Executive Officers [Member] | |||||
Related Party Transaction [Line Items] | |||||
Life insurance assets, carrying amount | $ 22.2 | $ 22.2 | $ 20.3 |
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