Related Party Transactions

9 Months Ended

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.