Segments and Related Information

3 Months Ended

Mar. 31, 2021

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) Clean Energy and Infrastructure; (3) Oil and Gas; (4) Electrical Transmission 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, as well as infrastructure for utilities, among others. The Clean Energy and Infrastructure segment primarily serves energy, utility and other end-markets through the installation and construction of power generation facilities, including from clean energy and renewable sources, such as wind, solar and biomass, as well as various types of heavy civil and industrial infrastructure. The Company performs engineering, construction and maintenance services for 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 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.

	For the Three Months Ended March 31,
Revenue:	2021		2020
Communications (a)	$	568.6	$	644.1
Clean Energy and Infrastructure	350.4		286.3
Oil and Gas	725.5		359.1
Electrical Transmission	133.5		128.1
Other	0.0		0.0
Eliminations	(2.6)		(1.0)
Consolidated revenue	$	1,775.4	$	1,416.6

(a)    Revenue generated primarily by utilities customers represented 20.1% and 15.2% of Communications segment revenue for the three month periods ended March 31, 2021 and 2020, respectively.

	For the Three Months Ended March 31,
EBITDA:	2021		2020
Communications	$	48.9	$	50.8
Clean Energy and Infrastructure	10.9		5.0
Oil and Gas	167.6		74.4
Electrical Transmission	3.6		8.3
Other	7.4		7.4
Corporate	(40.0)		(31.9)
Consolidated EBITDA	$	198.4	$	114.0

	For the Three Months Ended March 31,
Depreciation and Amortization:	2021		2020
Communications	$	21.8	$	19.7
Clean Energy and Infrastructure	7.6		4.0
Oil and Gas	52.1		28.1
Electrical Transmission	6.1		5.9
Other	0.0		0.0
Corporate	2.9		2.8
Consolidated depreciation and amortization	$	90.5	$	60.5

	For the Three Months Ended March 31,
EBITDA Reconciliation:	2021		2020
Income before income taxes	$	95.4	$	36.5
Plus:
Interest expense, net	12.5		17.0
Depreciation	79.3		53.1
Amortization of intangible assets	11.2		7.4
Consolidated EBITDA	$	198.4	$	114.0

Foreign Operations and Other. MasTec has operations in North America, primarily in the United States and Canada, and, to a lesser extent, in Mexico, the Caribbean and India. Revenue derived from U.S. operations totaled $1.7 billion and $1.4 billion for the three month periods ended March 31, 2021 and 2020, respectively. Revenue derived from foreign operations totaled $46.4 million and $45.7 million for the three month periods ended March 31, 2021 and 2020, respectively, substantially all of which was derived from the Company’s Canadian operations in its Oil and Gas segment. Long-lived assets held in the U.S. included property and equipment, net, of $1.0 billion as of both March 31, 2021 and December 31, 2020, and, for the Company’s businesses in foreign countries, totaled $22.2 million and $22.8 million, respectively. Intangible assets and goodwill, net, related to the Company’s U.S. operations totaled approximately $1.4 billion as of both March 31, 2021 and December 31, 2020, and for the Company’s businesses in foreign countries, totaled approximately $49.4 million and $50.5 million as of March 31, 2021 and December 31, 2020, respectively. The majority of the Company’s long-lived and intangible assets and goodwill in foreign countries relate to its Canadian operations. As of both March 31, 2021 and December 31, 2020, amounts due from customers from which foreign revenue was derived accounted for approximately

5%, respectively, of the Company’s consolidated net accounts receivable position, which represents accounts receivable, net, less deferred revenue. Revenue from governmental entities for the three month periods ended March 31, 2021 and 2020 totaled approximately 4% and 2%, respectively, of total revenue, substantially all of which 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:

	For the Three Months Ended March 31,
Customer:	2021	2020
Enbridge, Inc. (a)	25%	1%
AT&T (b)	11%	24%

(a)    The Company’s relationship with Enbridge, Inc. is based upon various construction contracts for pipeline activities, for which the related revenue is included within the Oil and Gas segment.

(b)    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. Revenue from AT&T is included within the Communications segment. The decrease in AT&T revenue for the three month period ended March 31, 2021 as compared with the same period in 2020 was primarily driven by lower levels of wireless services, including from the effects of the COVID-19 pandemic and temporary project timing delays related to recently completed 5G spectrum auctions.