Related Party Transactions

3 Months Ended

Mar. 31, 2021

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, sells certain supplies, 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 March 31, 2021 and 2020, such payments to related party entities totaled approximately $20.5 million and $25.3 million, respectively. Payables associated with such arrangements totaled approximately $10.4 million and $8.9 million as of March 31, 2021 and December 31, 2020, respectively. Revenue from such related party arrangements totaled approximately $1.1 million and $1.0 million for the three month periods ended March 31, 2021 and 2020, respectively. Related amounts receivable, net, totaled approximately $0.2 million and $0.5 million as of March 31, 2021 and December 31, 2020, respectively.

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, net, totaled approximately $0.2 million and $0.1 million as of March 31, 2021 and December 31, 2020, respectively, which amounts are expected to be settled under customary terms associated with the related purchase agreement.

The Company rents and leases equipment, and purchases certain supplies and servicing from CCI. 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. For the three month periods ended March 31, 2021 and 2020, MasTec paid CCI $5.0 million and $0.3 million, net of rebates, respectively, related to this activity. Amounts payable to CCI, net of rebates receivable, totaled approximately $4.6 million and $4.2 million as of March 31, 2021 and December 31, 2020, respectively. The Company has also rented equipment to CCI. Revenue from equipment rentals to CCI totaled approximately $0.1 million for the three month period ended March 31, 2021, for which related receivables totaled approximately $0.1 million as of March 31, 2021, and as of December 31, 2020, were de minimis.

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. For the three month periods ended March 31, 2021 and 2020, MasTec incurred subcontracting expenses of approximately $29.0 million and $0.7 million, respectively, under these arrangements. As of March 31, 2021 and December 31, 2020, related amounts payable totaled approximately $18.6 million and $1.4 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 March 31, 2021 and 2020, MasTec paid approximately $0.6 million related to this leasing arrangement.

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. For the three month period ended March 31, 2021, charges under these arrangements were de minimis, and for the three month period ended March 31, 2020, MasTec charged approximately $4.0 million. Related amounts outstanding as of both March 31, 2021 and December 31, 2020 were de minimis. Payments for other expenses related to the Franchise for the three month periods ended March 31, 2021 and 2020 totaled approximately $0.1 million and $0.2 million, respectively, for which there were no amounts outstanding as of either March 31, 2021 or December 31, 2020.

MasTec leases employees and provides satellite communications services to a customer in which Jorge Mas and José R. Mas own a majority interest. For both the three month periods ended March 31, 2021 and 2020, charges to this customer under these arrangements totaled approximately $0.3 million. As of March 31, 2021 and December 31, 2020, related amounts receivable totaled approximately $0.8 million and $0.9 million, respectively.

The Company, through a second quarter 2020 acquisition, has a 25% interest in an entity, under which the acquired business and the 25%-owned entity have a subcontracting arrangement. The Company’s interest in this entity, for which post-acquisition operating activity is de minimis, is accounted for as an equity method investment. As of both March 31, 2021 and December 31, 2020, the Company’s net investment in this entity was a liability of approximately $2.0 million, which net amount includes approximately $1.9 million of accounts receivable, net, less deferred revenue, related to the subcontracting arrangement. Additionally, the Company has certain arrangements with an entity in which members of management have an ownership interest, including a fee arrangement in conjunction with a $15.0 million letter of credit issued by the Company on behalf of this entity. For the three month period ended March 31, 2021, approximately $0.2 million of income was recognized in connection with these arrangements. As of March 31, 2021 and December 31, 2020, related amounts receivable totaled $0.6 million and $0.4 million, respectively.

Split Dollar Agreements

MasTec has split dollar life insurance agreements with trusts, of which Jorge Mas or José R. Mas is a trustee. There were no payments made in connection with these agreements in either of the three month periods ended March 31, 2021 or 2020, and life insurance assets associated with these agreements totaled approximately $22.2 million as of both March 31, 2021 and December 31, 2020.