(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 June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
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, net | ( | ( | ( | ( | |||||||||||||||||||
Other income, net | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
(Provision for) benefit from income taxes | ( | ( | ( | ||||||||||||||||||||
Net income (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Net income attributable to non-controlling interests | |||||||||||||||||||||||
Net income (loss) attributable to MasTec, Inc. | $ | $ | $ | ( | $ | ||||||||||||||||||
Earnings (loss) per share (Note 2): | |||||||||||||||||||||||
Basic earnings (loss) per share | $ | $ | $ | ( | $ | ||||||||||||||||||
Basic weighted average common shares outstanding | |||||||||||||||||||||||
Diluted earnings (loss) per share | $ | $ | $ | ( | $ | ||||||||||||||||||
Diluted weighted average common shares outstanding |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation (losses) gains, 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. | $ | $ | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
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 right-of-use 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 June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted shares, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld for taxes, net of other stock issuances | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock, at cost | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares in connection with acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted shares, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld for taxes, net of other stock issuances | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of non-controlling interests | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ |
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 Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted shares, net | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld for taxes, net of other stock issuances | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock, at cost | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares in connection with acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 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 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of non-controlling interests | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | $ |
For the Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of intangible assets | |||||||||||
Non-cash stock-based compensation expense | |||||||||||
Provision for (benefit from) deferred income taxes | ( | ||||||||||
Equity in earnings of unconsolidated affiliates, net | ( | ( | |||||||||
Gains on sales of assets, net | ( | ( | |||||||||
Non-cash interest expense, net | |||||||||||
Other non-cash items, net | ( | ||||||||||
Changes in assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | |||||||||||
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 | ( | ( | |||||||||
Payments of finance lease obligations | ( | ( | |||||||||
Repurchases of common stock | ( | ||||||||||
Payments of acquisition-related contingent consideration | ( | ( | |||||||||
Payments for acquisition-related contingent assets | ( | ||||||||||
Payments to non-controlling interests, including acquisition of interests | ( | ||||||||||
Payments for stock-based awards | ( | ( | |||||||||
Other financing activities, net | ( | ( | |||||||||
Net cash (used in) provided by financing activities | $ | ( | $ | ||||||||
Effect of currency translation on cash | ( | ||||||||||
Net decrease 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 taxes paid, net of refunds | $ | $ | |||||||||
Supplemental disclosure of non-cash information: | |||||||||||
Additions to property and equipment from finance leases | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income (loss) attributable to MasTec: | |||||||||||||||||||||||
Net income (loss) - basic (a) | $ | $ | $ | ( | $ | ||||||||||||||||||
Fair value gain (loss) related to resolved contingent payments (b) | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) - diluted (a) | $ | $ | $ | ( | $ | ||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Weighted average shares outstanding - basic(c) | |||||||||||||||||||||||
Dilutive common stock equivalents (d)(e) | |||||||||||||||||||||||
Weighted average shares outstanding - diluted |
Communications | Clean Energy and Infrastructure | Oil and Gas | Power Delivery | Total Goodwill | |||||||||||||||||||||||||
Goodwill, gross, as of December 31, 2021 (a) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Accumulated impairment loss (b) | ( | ( | |||||||||||||||||||||||||||
Goodwill, net, as of December 31, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Additions from new business combinations | |||||||||||||||||||||||||||||
Measurement period adjustments (c) | ( | ( | ( | ||||||||||||||||||||||||||
Currency translation adjustments | ( | ( | |||||||||||||||||||||||||||
Goodwill, net as of June 30, 2022 | $ | $ | $ | $ | $ |
Other Intangible Assets | |||||||||||||||||||||||||||||
Non-Amortizing | Amortizing | ||||||||||||||||||||||||||||
Trade Names | Customer Relationships and Backlog | Pre-Qualifications | Other (a) | Total | |||||||||||||||||||||||||
Other intangible assets, gross, as of December 31, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Accumulated amortization | ( | ( | ( | ( | |||||||||||||||||||||||||
Other intangible assets, net, as of December 31, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Additions from new business combinations | |||||||||||||||||||||||||||||
Measurement period adjustments (b) | ( | ||||||||||||||||||||||||||||
Currency translation adjustments | ( | ( | |||||||||||||||||||||||||||
Amortization expense | ( | ( | ( | ( | |||||||||||||||||||||||||
Other intangible assets, net, as of June 30, 2022 | $ | $ | $ | $ | $ |
Acquisition consideration(a): | HMG | All other | Total | ||||||||
Cash, net of cash acquired | $ | $ | $ | ||||||||
Shares transferred | |||||||||||
Estimated fair value of contingent consideration | |||||||||||
Total consideration | $ | $ | $ | ||||||||
Identifiable assets acquired and liabilities assumed: | |||||||||||
Accounts receivable and contract assets | $ | $ | $ | ||||||||
Current assets | |||||||||||
Property and equipment | |||||||||||
Long-term assets, primarily operating lease right-of-use assets | |||||||||||
Amortizing intangible assets | |||||||||||
Accounts payable | ( | ( | ( | ||||||||
Current liabilities, including current portion of operating lease liabilities | ( | ( | ( | ||||||||
Long-term debt, including finance lease obligations | ( | ( | ( | ||||||||
Long-term liabilities, primarily operating lease liabilities and deferred income taxes | ( | ( | ( | ||||||||
Total identifiable net assets | $ | $ | $ | ||||||||
Goodwill | |||||||||||
Total net assets acquired, including goodwill | $ | $ | $ | ||||||||
Bargain purchase gain | ( | ( | |||||||||
Total consideration | $ | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Contract billings | $ | $ | |||||||||
Less allowance | ( | ( | |||||||||
Accounts receivable, net of allowance | $ | $ | |||||||||
Retainage | |||||||||||
Unbilled receivables | |||||||||||
Contract assets | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
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 | June 30, 2022 | December 31, 2021 | |||||||||||||||||
Senior credit facility: | November 1, 2026 | |||||||||||||||||||
Revolving loans | $ | $ | ||||||||||||||||||
Term loan | ||||||||||||||||||||
August 15, 2028 | ||||||||||||||||||||
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 | ||||||||||
2022, remaining six months | $ | $ | |||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
Thereafter | |||||||||||
Total minimum lease payments | $ | $ | |||||||||
Less amounts representing interest | ( | ( | |||||||||
Total 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, 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Canceled/forfeited | ( | ||||||||||
Non-vested restricted shares, as of June 30, 2022 | $ |
Multiemployer Plans | |||||||||||||||||||||||||||||
Covered Employees | Contributions (in millions) | ||||||||||||||||||||||||||||
Low | High | Pension | Other Multiemployer | Total | |||||||||||||||||||||||||
For the Three Months Ended June 30: | |||||||||||||||||||||||||||||
2022 | $ | $ | $ | ||||||||||||||||||||||||||
2021 | $ | $ | $ | ||||||||||||||||||||||||||
For the Six Months Ended June 30: | |||||||||||||||||||||||||||||
2022 | $ | $ | $ | ||||||||||||||||||||||||||
2021 | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
Revenue: | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Communications (a) | $ | $ | $ | $ | |||||||||||||||||||
Clean Energy and Infrastructure | |||||||||||||||||||||||
Oil and Gas | |||||||||||||||||||||||
Power Delivery | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Eliminations | ( | ( | ( | ( | |||||||||||||||||||
Consolidated revenue | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
EBITDA: | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Communications | $ | $ | $ | $ | |||||||||||||||||||
Clean Energy and Infrastructure | ( | ||||||||||||||||||||||
Oil and Gas | |||||||||||||||||||||||
Power Delivery | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Corporate | ( | ( | ( | ( | |||||||||||||||||||
Consolidated EBITDA | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
Depreciation and Amortization: | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Communications | $ | $ | $ | $ | |||||||||||||||||||
Clean Energy and Infrastructure | |||||||||||||||||||||||
Oil and Gas | |||||||||||||||||||||||
Power Delivery | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Consolidated depreciation and amortization | $ | $ | $ | $ |
Assets: | June 30, 2022 | December 31, 2021 (a) | |||||||||
Communications | $ | $ | |||||||||
Clean Energy and Infrastructure | |||||||||||
Oil and Gas | |||||||||||
Power Delivery | |||||||||||
Other | |||||||||||
Corporate | |||||||||||
Consolidated segment assets | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
EBITDA Reconciliation: | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
Plus: | |||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Depreciation | |||||||||||||||||||||||
Amortization of intangible assets | |||||||||||||||||||||||
Consolidated EBITDA | $ | $ | $ | $ |
Reportable Segment (in millions): | June 30, 2022 | March 31, 2022 | June 30, 2021 | ||||||||||||||
Communications | $ | 5,031 | $ | 4,920 | $ | 4,240 | |||||||||||
Clean Energy and Infrastructure | 1,896 | 1,693 | 1,705 | ||||||||||||||
Oil and Gas | 1,456 | 1,382 | 1,933 | ||||||||||||||
Power Delivery | 2,622 | 2,650 | 1,330 | ||||||||||||||
Other | — | — | — | ||||||||||||||
Estimated 18-month backlog | $ | 11,005 | $ | 10,645 | $ | 9,208 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 2,301.8 | 100.0 | % | $ | 1,962.7 | 100.0 | % | $ | 4,256.2 | 100.0 | % | $ | 3,738.1 | 100.0 | % | |||||||||||||||||||||||||||||||
Costs of revenue, excluding depreciation and amortization | 2,028.1 | 88.1 | % | 1,675.2 | 85.4 | % | 3,761.4 | 88.4 | % | 3,189.1 | 85.3 | % | |||||||||||||||||||||||||||||||||||
Depreciation | 87.0 | 3.8 | % | 87.5 | 4.5 | % | 172.2 | 4.0 | % | 166.8 | 4.5 | % | |||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 27.7 | 1.2 | % | 19.9 | 1.0 | % | 53.3 | 1.3 | % | 31.2 | 0.8 | % | |||||||||||||||||||||||||||||||||||
General and administrative expenses | 133.8 | 5.8 | % | 81.5 | 4.2 | % | 279.2 | 6.6 | % | 152.1 | 4.1 | % | |||||||||||||||||||||||||||||||||||
Interest expense, net | 19.4 | 0.8 | % | 13.8 | 0.7 | % | 35.4 | 0.8 | % | 26.3 | 0.7 | % | |||||||||||||||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (6.6) | (0.3) | % | (7.5) | (0.4) | % | (13.4) | (0.3) | % | (14.9) | (0.4) | % | |||||||||||||||||||||||||||||||||||
Other income, net | (5.8) | (0.3) | % | (10.6) | (0.5) | % | (2.1) | (0.0) | % | (10.7) | (0.3) | % | |||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 18.2 | 0.8 | % | $ | 102.8 | 5.2 | % | $ | (29.9) | (0.7) | % | $ | 198.3 | 5.3 | % | |||||||||||||||||||||||||||||||
(Provision for) benefit from income taxes | (2.0) | (0.1) | % | (27.1) | (1.4) | % | 11.2 | 0.3 | % | (56.4) | (1.5) | % | |||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 16.3 | 0.7 | % | $ | 75.8 | 3.9 | % | $ | (18.7) | (0.4) | % | $ | 141.9 | 3.8 | % | |||||||||||||||||||||||||||||||
Net income attributable to non-controlling interests | 0.0 | 0.0 | % | 0.3 | 0.0 | % | 0.1 | 0.0 | % | 0.8 | 0.0 | % | |||||||||||||||||||||||||||||||||||
Net income (loss) attributable to MasTec, Inc. | $ | 16.2 | 0.7 | % | $ | 75.5 | 3.8 | % | $ | (18.8) | (0.4) | % | $ | 141.1 | 3.8 | % |
Revenue | EBITDA and EBITDA Margin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segment: | 2022 | 2021 | 2022 | 2021 | 2022 (a) | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Communications | $ | 822.0 | $ | 630.4 | $ | 1,486.2 | $ | 1,199.0 | $ | 84.2 | 10.2 | % | $ | 72.7 | 11.5 | % | $ | 124.6 | 8.4 | % | $ | 121.5 | 10.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Clean Energy and Infrastructure | 494.5 | 481.5 | 930.4 | 831.9 | (5.2) | (1.1) | % | 15.6 | 3.2 | % | 5.6 | 0.6 | % | 26.4 | 3.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil and Gas | 341.2 | 621.4 | 552.2 | 1,346.9 | 62.8 | 18.4 | % | 138.1 | 22.2 | % | 84.2 | 15.3 | % | 305.7 | 22.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Power Delivery | 646.5 | 232.5 | 1,296.9 | 366.0 | 41.4 | 6.4 | % | 9.3 | 4.0 | % | 87.5 | 6.7 | % | 12.9 | 3.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | 7.4 | NM | 8.3 | NM | 14.4 | NM | 15.8 | NM | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eliminations | (2.4) | (3.1) | (9.5) | (5.7) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate | — | — | — | — | (38.3) | — | (19.9) | — | (85.3) | — | (59.8) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Results | $ | 2,301.8 | $ | 1,962.7 | $ | 4,256.2 | $ | 3,738.1 | $ | 152.3 | 6.6 | % | $ | 224.1 | 11.4 | % | $ | 231.0 | 5.4 | % | $ | 422.5 | 11.3 | % |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 16.3 | 0.7 | % | $ | 75.8 | 3.9 | % | $ | (18.7) | (0.4) | % | $ | 141.9 | 3.8 | % | |||||||||||||||||||||||||||||||
Interest expense, net | 19.4 | 0.8 | % | 13.8 | 0.7 | % | 35.4 | 0.8 | % | 26.3 | 0.7 | % | |||||||||||||||||||||||||||||||||||
Provision for (benefit from) income taxes | 2.0 | 0.1 | % | 27.1 | 1.4 | % | (11.2) | (0.3) | % | 56.4 | 1.5 | % | |||||||||||||||||||||||||||||||||||
Depreciation | 87.0 | 3.8 | % | 87.5 | 4.5 | % | 172.2 | 4.0 | % | 166.8 | 4.5 | % | |||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 27.7 | 1.2 | % | 19.9 | 1.0 | % | 53.3 | 1.3 | % | 31.2 | 0.8 | % | |||||||||||||||||||||||||||||||||||
EBITDA | $ | 152.3 | 6.6 | % | $ | 224.1 | 11.4 | % | $ | 231.0 | 5.4 | % | $ | 422.5 | 11.3 | % | |||||||||||||||||||||||||||||||
Non-cash stock-based compensation expense | 6.8 | 0.3 | % | 6.1 | 0.3 | % | 13.2 | 0.3 | % | 11.6 | 0.3 | % | |||||||||||||||||||||||||||||||||||
Acquisition and integration costs | 12.5 | 0.5 | % | — | — | % | 26.1 | 0.6 | % | — | — | % | |||||||||||||||||||||||||||||||||||
Bargain purchase gain | (0.2) | (0.0) | % | — | — | % | (0.2) | (0.0) | % | — | — | % | |||||||||||||||||||||||||||||||||||
(Gains) losses, net, on fair value of investment | 7.1 | 0.3 | % | (1.0) | (0.0) | % | 7.1 | 0.2 | % | — | — | % | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 178.5 | 7.8 | % | $ | 229.2 | 11.7 | % | $ | 277.2 | 6.5 | % | $ | 434.1 | 11.6 | % |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 152.3 | 6.6 | % | $ | 224.1 | 11.4 | % | $ | 231.0 | 5.4 | % | $ | 422.5 | 11.3 | % | |||||||||||||||||||||||||||||||
Non-cash stock-based compensation expense (a) | 6.8 | 0.3 | % | 6.1 | 0.3 | % | 13.2 | 0.3 | % | 11.6 | 0.3 | % | |||||||||||||||||||||||||||||||||||
Acquisition and integration costs (b) | 12.5 | 0.5 | % | — | — | % | 26.1 | 0.6 | % | — | — | % | |||||||||||||||||||||||||||||||||||
Bargain purchase gain (a) | (0.2) | (0.0) | % | — | — | % | (0.2) | (0.0) | % | — | — | % | |||||||||||||||||||||||||||||||||||
(Gains) losses, net, on fair value of investment (a) | 7.1 | 0.3 | % | (1.0) | (0.0) | % | 7.1 | 0.2 | % | — | — | % | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 178.5 | 7.8 | % | $ | 229.2 | 11.7 | % | $ | 277.2 | 6.5 | % | $ | 434.1 | 11.6 | % | |||||||||||||||||||||||||||||||
Reportable Segment: | |||||||||||||||||||||||||||||||||||||||||||||||
Communications | $ | 85.3 | 10.4 | % | $ | 72.7 | 11.5 | % | $ | 126.5 | 8.5 | % | $ | 121.5 | 10.1 | % | |||||||||||||||||||||||||||||||
Clean Energy and Infrastructure | (5.2) | (1.1) | % | 15.6 | 3.2 | % | 5.6 | 0.6 | % | 26.4 | 3.2 | % | |||||||||||||||||||||||||||||||||||
Oil and Gas | 64.1 | 18.8 | % | 138.1 | 22.2 | % | 87.6 | 15.9 | % | 305.7 | 22.7 | % | |||||||||||||||||||||||||||||||||||
Power Delivery | 48.4 | 7.5 | % | 9.3 | 4.0 | % | 101.5 | 7.8 | % | 12.9 | 3.5 | % | |||||||||||||||||||||||||||||||||||
Other | 7.4 | NM | 8.3 | NM | 14.4 | NM | 15.8 | NM | |||||||||||||||||||||||||||||||||||||||
Corporate | (21.5) | — | (14.8) | — | (58.4) | — | (48.2) | — | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 178.5 | 7.8 | % | $ | 229.2 | 11.7 | % | $ | 277.2 | 6.5 | % | $ | 434.1 | 11.6 | % |
For the Three Months Ended June 30, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Net Income (in millions) | Diluted Earnings Per Share | Net Income (in millions) | Diluted Earnings Per Share | ||||||||||||||||||||
Reported U.S. GAAP measure | $ | 16.3 | $ | 0.20 | $ | 75.8 | $ | 1.02 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Non-cash stock-based compensation expense | 6.8 | 0.09 | 6.1 | 0.08 | |||||||||||||||||||
Amortization of intangible assets | 27.7 | 0.37 | 19.9 | 0.27 | |||||||||||||||||||
Acquisition and integration costs | 12.5 | 0.17 | — | — | |||||||||||||||||||
Bargain purchase gain | (0.2) | (0.00) | — | — | |||||||||||||||||||
(Gains) losses, net, on fair value of investment | 7.1 | 0.09 | (1.0) | (0.01) | |||||||||||||||||||
Total adjustments, pre-tax | $ | 53.9 | $ | 0.71 | $ | 25.0 | $ | 0.34 | |||||||||||||||
Income tax effect of adjustments (a) | (14.2) | (0.19) | (5.5) | (0.07) | |||||||||||||||||||
Statutory tax rate effects (b) | — | — | 0.7 | 0.01 | |||||||||||||||||||
Adjusted non-U.S. GAAP measure | $ | 56.0 | $ | 0.73 | $ | 96.0 | $ | 1.29 |
For the Six Months Ended June 30, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Net Loss (in millions) | Diluted Loss Per Share | Net Income (in millions) | Diluted Earnings Per Share | ||||||||||||||||||||
Reported U.S. GAAP measure | $ | (18.7) | $ | (0.27) | $ | 141.9 | $ | 1.91 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Non-cash stock-based compensation expense | 13.2 | 0.17 | 11.6 | 0.16 | |||||||||||||||||||
Amortization of intangible assets | 53.3 | 0.70 | 31.2 | 0.42 | |||||||||||||||||||
Acquisition and integration costs | 26.1 | 0.34 | — | — | |||||||||||||||||||
Bargain purchase gain | (0.2) | (0.00) | — | — | |||||||||||||||||||
(Gains) losses, net, on fair value of investment | 7.1 | 0.09 | — | — | |||||||||||||||||||
Total adjustments, pre-tax | $ | 99.4 | $ | 1.31 | $ | 42.8 | $ | 0.58 | |||||||||||||||
Income tax effect of adjustments (a) | (26.8) | (0.35) | (7.0) | (0.10) | |||||||||||||||||||
Statutory tax rate effects (b) | — | — | 1.2 | 0.02 | |||||||||||||||||||
Adjusted non-U.S. GAAP measure | $ | 54.0 | $ | 0.70 | $ | 178.8 | $ | 2.41 |
For the Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Net cash provided by operating activities | $ | 1.5 | $ | 349.3 | |||||||
Net cash used in investing activities | $ | (220.0) | $ | (676.1) | |||||||
Net cash (used in) provided by financing activities | $ | (3.0) | $ | 140.8 |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (b) | Approximate Dollar Value of Shares that May Yet be Purchased under the Program (c) | ||||||||||||||||||||||
April 1 through April 30 | 358,403 | $ | 73.03 | 349,020 | $ | 119,406,839 | ||||||||||||||||||||
May 1 through May 31 | 211,869 | $ | 73.16 | 202,582 | $ | 104,627,002 | ||||||||||||||||||||
June 1 through June 30 | 398,288 | $ | 71.16 | 384,706 | $ | 77,326,434 | ||||||||||||||||||||
Total | 968,560 | 936,308 |
Exhibit No. | Description | |||||||
2.1 | Agreement and Plan of Merger, dated as of July 24, 2022, by and among Infrastructure and Energy Alternatives, Inc., MasTec, Inc. and Indigo Acquisition I Corp., filed as Exhibit 2.1 to Infrastructure and Energy Alternatives, Inc.'s Current Report on Form 8-K filed with the SEC on July 25, 2022. | |||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
95.1* | ||||||||
101.INS | Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |||||||
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 June 30, 2022, formatted in Inline XBRL (included with the Exhibit 101 attachments). |
MASTEC, INC. | ||||||||
Date: | August 4, 2022 | |||||||
/s/ JOSÉ R. MAS | ||||||||
José R. Mas | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
/s/ GEORGE L. PITA | ||||||||
George L. Pita | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
Date: | August 4, 2022 | |||||||
/s/ José R. Mas | ||||||||
José R. Mas Chief Executive Officer (Principal Executive Officer) |
Date: | August 4, 2022 | |||||||
/s/ George L. Pita | ||||||||
George L. Pita Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: | August 4, 2022 | |||||||
/s/ José R. Mas | ||||||||
José R. Mas Chief Executive Officer (Principal Executive Officer) |
Date: | August 4, 2022 | |||||||
/s/ George L. Pita | ||||||||
George L. Pita Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
Mine Name / ID | Section 104 Citations(a) | Section 104(b) Orders(b) | Section 104(d) Citations and Orders(c) | Section 110(b)(2) Violations(d) | Section 107(a) Orders(e) | Proposed Assessments(f) | Fatalities(g) | Pending Legal Action(h) | ||||||||||||||||||||||||||||||||||||||||||
FNF Crushing 1 / 02-03091 | — | — | — | — | — | $ — | — | — | ||||||||||||||||||||||||||||||||||||||||||
FNF Crushing 2 / 02-02622 | — | — | — | — | — | $ — | — | — | ||||||||||||||||||||||||||||||||||||||||||
FNF Crushing 3 / 02-02774 | — | — | — | — | — | $ — | — | — | ||||||||||||||||||||||||||||||||||||||||||
FNF Crushing 4 / 02-03036 | — | — | — | — | — | $ — | — | — | ||||||||||||||||||||||||||||||||||||||||||
FNF Crushing 5 / 29-02226 | — | — | — | — | — | $ — | — | — | ||||||||||||||||||||||||||||||||||||||||||
FNF Crushing 6 / 02-02589 | — | — | — | — | — | $ — | — | — | ||||||||||||||||||||||||||||||||||||||||||
FNF Crushing 7 / 02-03079 | — | — | — | — | — | $ — | — | — | ||||||||||||||||||||||||||||||||||||||||||
FNF Crushing 8 / 02-03035 | — | — | — | — | — | $ — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total | — | — | — | — | — | — | — | — |
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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Statement [Abstract] | ||||
Revenue | $ 2,301,792 | $ 1,962,658 | $ 4,256,192 | $ 3,738,082 |
Costs of revenue, excluding depreciation and amortization | 2,028,111 | 1,675,232 | 3,761,427 | 3,189,091 |
Depreciation | 87,001 | 87,501 | 172,195 | 166,766 |
Amortization of intangible assets | 27,673 | 19,923 | 53,263 | 31,170 |
General and administrative expenses | 133,785 | 81,503 | 279,175 | 152,093 |
Interest expense, net | 19,387 | 13,829 | 35,428 | 26,288 |
Equity in earnings of unconsolidated affiliates, net | (6,587) | (7,525) | (13,364) | (14,871) |
Other income, net | (5,825) | (10,632) | (2,071) | (10,711) |
Income (loss) before income taxes | 18,247 | 102,827 | (29,861) | 198,256 |
(Provision for) benefit from income taxes | (1,992) | (27,062) | 11,157 | (56,379) |
Net income (loss) | 16,255 | 75,765 | (18,704) | 141,877 |
Net income attributable to non-controlling interests | 43 | 314 | 62 | 777 |
Net income (loss) attributable to MasTec, Inc. | $ 16,212 | $ 75,451 | $ (18,766) | $ 141,100 |
Earnings (loss) per share (Note 2): | ||||
Basic earnings (loss) per share (in dollars per share) | $ 0.22 | $ 1.04 | $ (0.25) | $ 1.95 |
Basic weighted average common shares outstanding (in shares) | 74,445 | 72,501 | 74,615 | 72,470 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.20 | $ 1.02 | $ (0.27) | $ 1.91 |
Diluted weighted average common shares outstanding (in shares) | 75,537 | 73,976 | 74,647 | 73,913 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 16,255 | $ 75,765 | $ (18,704) | $ 141,877 |
Other comprehensive income (loss): | ||||
Foreign currency translation (losses) gains, net of tax | (1,743) | 843 | (830) | 1,214 |
Unrealized gains (losses) on investment activity, net of tax | 7,843 | (3,465) | 21,597 | 10,374 |
Comprehensive income | 22,355 | 73,143 | 2,063 | 153,465 |
Comprehensive income attributable to non-controlling interests | 43 | 314 | 62 | 777 |
Comprehensive income attributable to MasTec, Inc. | $ 22,312 | $ 72,829 | $ 2,001 | $ 152,688 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 145,000,000 | 145,000,000 |
Common stock, shares issued (in shares) | 95,491,405 | 95,371,211 |
Treasury stock, shares (in shares) | 19,933,055 | 18,941,926 |
Common Stock | ||
Common stock, shares issued (in shares) | 95,491,405 | 95,371,211 |
Restricted Stock Awards | Common Stock | ||
Unvested stock awards (in shares) | 1,686,822 | 1,747,385 |
Business, Basis of Presentation and Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Business, Basis of Presentation and Significant Accounting Policies | 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: power delivery services, including transmission and distribution; wireless, wireline/fiber and customer fulfillment activities; power generation, primarily from clean energy and renewable sources; pipeline infrastructure, including natural gas pipeline and distribution infrastructure; heavy civil; and industrial infrastructure. MasTec’s customers are primarily in these industries. MasTec reports its results under five reportable segments: (1) Communications; (2) Clean Energy and Infrastructure; (3) Oil and Gas; (4) Power Delivery; and (5) Other. In the first quarter of 2022, the Company began integrating the acquisition of Henkels & McCoy Holdings, Inc., formerly known as Henkels & McCoy Group, Inc. (“HMG”), into its operations. The HMG acquisition was completed on December 30, 2021, with its initial balance sheet reported within the Company’s Power Delivery segment. During the first quarter of 2022, the Company reported portions of HMG’s operations within its Power Delivery, Communications and Oil and Gas segments, as appropriate, and HMG’s corporate functions within its Corporate results. Accordingly, HMG’s December 31, 2021 balance sheet information was recast to conform with the new reporting structure. See Note 13 - Segments and Related Information. 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, 2021 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, 2021 contained in the Company’s 2021 Annual Report on Form 10-K (the “2021 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 with the current period presentation, including for the first quarter 2022 change in segment balance sheet information for HMG, as discussed above. In addition, in the fourth quarter of 2021, the Company updated its presentation of gains or losses, net, from the sale of property and equipment to include such amounts within general and administrative expenses. Previously, such gains or losses were included within other income or expense. 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 other liabilities. Net income or loss attributable to non-controlling interests is reported as a separate line item below net income or loss. The Company applies the equity method of accounting for its investments in entities for which it does not have a controlling financial interest, but over which it has the ability to exert significant influence. 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. For foreign operations for which the local currency is not the functional currency, the operation’s non-monetary assets are remeasured into U.S. dollars at historical exchange rates. All other accounts are remeasured at current exchange rates. Gains or losses from remeasurement are included in other income or expense, net. 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 that management believes to be reasonable under the circumstances, including the potential future effects of macroeconomic trends and events, such as rising inflation and interest rate levels; climate-related matters; market, regulatory and industry factors; global events, such as the ongoing military conflict in Ukraine; and public health matters, such as the COVID-19 pandemic. 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 these 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, intangible and other assets, acquisition-related contingent consideration and other liabilities, equity investments and 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. General Economic Conditions, including the Effects of COVID-19 The Company has experienced, and may continue to experience, direct and indirect negative effects on its business and operations from negative economic conditions, including recent inflationary effects on fuel prices, labor and materials costs, rising interest rates and supply chain disruptions that have limited the availability of products. The Company may also experience negative effects from possible longer-term changes in consumer and customer behavior resulting from the effects of the COVID-19 pandemic. The COVID-19 pandemic disrupted business activities and global economic conditions beginning in 2020 and has negatively affected the Company’s operations during the same period. The Company has taken steps to mitigate the effects of the COVID-19 pandemic on its business, and its business model has, thus far, proven resilient. While the adverse effects of the COVID-19 pandemic have begun to subside, its effects vary by region, and uncertainties arising from the COVID-19 pandemic could continue to disrupt economic conditions and business activities, particularly as new variants arise. The extent to which general economic conditions and the COVID-19 pandemic, including its emerging variants, could affect the Company’s business, operations and financial results is uncertain as it will depend upon numerous evolving factors that management may not be able to accurately predict, and, therefore, any future impacts on the Company’s business, financial condition and/or results of operations cannot be quantified or predicted with specificity. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted in response to the effects of the COVID-19 pandemic, permitted deferral and/or reduction of certain federal and payroll tax amounts, certain of which the Company pursued. As of June 30, 2022, payroll tax deferrals under the CARES Act, the amount of which is due by December 31, 2022, totaled approximately $42 million. Significant Accounting Policies Revenue Recognition The Company recognizes revenue from contracts with customers when, or as, control of promised services and goods is transferred to customers. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for the services and goods transferred. The Company primarily recognizes revenue 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 generally 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 54% and 32% of consolidated revenue for the three month periods ended June 30, 2022 and 2021, respectively, and totaled 56% and 31% for the six month periods ended June 30, 2022 and 2021, respectively. For certain master service and other service agreements, revenue is recognized at a point in time, primarily for install-to-the-home and certain other wireless services in the Company’s Communications segment. 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 in each of the three and six month periods ended June 30, 2022 and 2021. 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 six month periods ended June 30, 2022 and 2021, 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, 2021 and 2020. Changes in recognized revenue, net, as a result of changes in total contract transaction price estimates, including from variable consideration, from performance obligations satisfied or partially satisfied in prior periods, for the three month periods ended June 30, 2022 and 2021, totaled a net reduction of approximately $0.6 million and a net increase of approximately $30.5 million, respectively. For the six month periods ended June 30, 2022 and 2021, such changes totaled net increases of approximately $8.8 million and $37.0 million, respectively. Performance Obligations. A performance obligation is a contractual promise to transfer a distinct good or service to a customer. 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 June 30, 2022, the amount of the Company’s remaining performance obligations was $5.2 billion. Based on current expectations, the Company anticipates it will recognize approximately $2.8 billion of its remaining performance obligations as revenue during 2022, with the majority of the remaining balance expected to be recognized in 2023. 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 June 30, 2022 and December 31, 2021, the Company included approximately $165 million and $104 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 June 30, 2022 and December 31, 2021, these change orders and/or claims primarily related to certain projects in the Company’s Clean Energy and Infrastructure and Power Delivery 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 The discussion below describes the effects of recent accounting pronouncements, as updated from the discussion in the Company’s 2021 Form 10-K. Recent Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) to improve consistency for revenue recognition in the post-acquisition period for acquired contracts as compared to contracts entered into subsequent to acquisition. ASU 2021-08 requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers, rather than at fair value. ASU 2021-08 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company does not expect that this ASU will have a material effect on its consolidated financial statements.
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Earnings Per Share |
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Earnings Per Share | Earnings Per Share Basic earnings or loss per share is computed by dividing net income or loss 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 primarily 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. For the six month period ended June 30, 2022, the Company reported a net loss, which resulted in the exclusion of approximately 1,173,000 weighted average common stock equivalents from the calculation of diluted net loss per share for the related period. The following table provides details underlying the Company’s earnings per share calculations for the periods indicated (in thousands):
(a)For basic net income, calculated as total net income or loss less amounts attributable to non-controlling interests. For diluted net income, calculated as total net income or loss, less amounts attributable to non-controlling interests, adjusted for the fair value gain or loss, if any, related to additional contingent payments to the former owners of an acquired business for which the contingency has been resolved as of the respective period. See discussion above and in Note 3 – Acquisitions, Goodwill and Other Intangible Assets. (b)For the three and six month periods ended June 30, 2022, represents the fair value gain or loss related to additional contingent payments for which the contingency has been resolved as of June 30, 2022. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets for additional information. (c)For the three and six month periods ended June 30, 2022, basic shares include approximately 132,000 and 101,000 weighted average shares, respectively, related to additional contingent payments. (d)For the three and six month periods ended June 30, 2022, weighted average anti-dilutive common stock equivalents totaled approximately 178,000 and 1,273,000 respectively, and for the three and six month periods ended June 30, 2021, totaled approximately 1,000 and 2,000, respectively. (e)For the three and six month periods ended June 30, 2022, common stock equivalents included approximately 1,000 and 32,000 weighted average shares, respectively, related to additional contingent payments to the former owners of an acquired business. For the six month period ended June 30, 2022, common stock equivalents were anti-dilutive except to the extent of the common stock equivalents associated with the additional contingent payments. For the three and six month periods ended June 30, 2022, the Company repurchased approximately 936,000 and 1,124,000 shares of its common stock, respectively, the effect of which on the Company’s weighted average shares outstanding for the respective periods was a reduction of approximately 554,000 and 330,000 shares. See Note 11 – Equity for details of the Company’s share repurchase transactions. Additionally, in May 2022 and December 2021, the Company issued approximately 133,000 and 1,975,000 shares, respectively, of its common stock in conjunction with an acquisition. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets for additional information.
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Acquisitions, Goodwill, and Other Intangible Assets |
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Acquisitions, Goodwill, and Other Intangible Assets | Acquisitions, Goodwill and Other Intangible Assets The following table provides a reconciliation of changes in goodwill by reportable segment for the six month period ended June 30, 2022 (in millions). Goodwill balances as of December 31, 2021 were recast in the first quarter of 2022 to reflect the change in segment reporting for the HMG acquisition, as discussed in Note 1 – Business, Basis of Presentation and Significant Accounting Policies. Goodwill was reallocated based on the estimated relative fair value of the respective HMG reporting units. See Note 13 – Segments and Related Information for additional information.
(a) The change in segment reporting for the HMG acquisition resulted in a decrease in Power Delivery segment goodwill of $23.4 million and an increase in goodwill for the Communications and Oil and Gas segments of $13.0 million and $10.4 million, respectively, as of December 31, 2021. (b) Accumulated impairment losses include the effects of currency translation gains and/or losses. (c) Represents adjustments to preliminary estimates of fair value within the measurement period of up to one year from the date of acquisition. The following table provides a reconciliation of changes in other intangible assets, net, for the period indicated (in millions):
(a)Consists principally of trademarks, trade names and non-compete agreements. (b)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 second quarter of 2022, the Company performed a quarterly review for indicators of impairment, which considered its results for the six month period ended June 30, 2022, together with its expectations of future results, including consideration of the potential effects of shifts in timing for certain projects. In conjunction with this quarterly review, management performed a quantitative assessment of the goodwill associated with two reporting units within its Oil and Gas segment and one reporting unit within its Power Delivery segment. Based on the results of these assessments, management determined that the estimated fair values of these reporting units substantially exceeded their carrying values as of June 30, 2022. Significant changes in the assumptions or estimates used in management’s assessment, such as a reduction in profitability and/or cash flows, changes in market conditions, including decreases in market activity levels or the effects of rising inflation, including on interest rates, could result in non-cash impairment charges to goodwill and indefinite-lived intangible assets in the future. Recent Acquisitions The Company seeks to grow and diversify its business both organically and through acquisitions and/or strategic arrangements in order to deepen its market presence, broaden its geographic reach and expand its service offerings. 2022 Acquisitions. For the six month period ended June 30, 2022, MasTec completed two acquisitions, which included all of the equity interests of (i) an infrastructure construction company focusing on water, sewer and utility projects and with expertise in excavation and site work, which acquisition is included within the Company’s Oil and Gas segment and was effective in January; and (ii) a telecommunications company specializing in wireline services, which acquisition is included within the Company’s Communications segment and was effective as of the end of May. The aggregate purchase price for these acquisitions was composed of approximately $15.8 million in cash, net of cash acquired and earn-out liabilities valued at approximately $1.8 million. Determination of the estimated fair values of net assets acquired and the estimated earn-out liabilities and consideration transferred was preliminary as of June 30, 2022; as a result, further adjustments to these estimates may occur. 2021 Acquisitions. During 2021, MasTec completed fourteen acquisitions, including all of the equity interests of the following: (i) Within the Company’s Power Delivery segment: HMG, an industry-leading utility services firm providing critical infrastructure design, construction and maintenance services to the power and renewables, telecommunications, gas distribution and pipeline services end-markets, which acquisition was effective in December. In the first quarter of 2022, MasTec integrated and began reporting the results of HMG within its Power Delivery, Communications and Oil and Gas segments, as appropriate, and began reporting HMG’s corporate functions within its corporate results. See Note 13 – Segments and Related Information for additional details. During 2021, the Company also acquired an electric utility distribution contractor and a company specializing in vegetation management services for the electric and telecommunications industries, which acquisitions were effective in December; and Intren, LLC (“INTREN”), a premier specialty utility contractor primarily providing electrical distribution network services under various multi-year master service agreements to some of the nation’s largest utilities, municipalities and cooperatives, which acquisition was effective in May; (ii) within the Company’s Clean Energy and Infrastructure segment: a heavy civil infrastructure construction company focusing on transportation projects; and a heavy industrial general contractor with concrete, piping and electrical capabilities, which acquisitions were effective in February and April, respectively; (iii) within the Company’s Communications segment: a telecommunications company specializing in cabling, plant and other network services, which acquisition was effective in November; a telecommunications and utility technical services company focusing on outside plant telecommunications engineering; a telecommunications and cable services provider; and a utilities infrastructure company, providing power line construction and repair services, all of which acquisitions were effective in May; and business operations specializing in install-to-the-home services, which acquisition was effective in August; and (iv) within the Company’s Oil and Gas segment: an infrastructure construction company focusing on water, sewer and utility projects, along with expertise in site work; and a company specializing in environmental services for energy infrastructure and heavy civil projects, both of which acquisitions were effective in December; and a pipeline contractor focusing on integrity and maintenance work related to gas distribution infrastructure, which acquisition was effective in February. These acquisitions were funded with cash on hand, borrowings under the Company’s credit facility and with shares of the Company’s common stock and are subject to customary purchase price adjustments. The following table summarizes the estimated fair values of consideration paid and net assets acquired for the 2021 acquisitions, as adjusted (in millions):
(a) Acquisition consideration in the table above excludes approximately $65 million of measurement period adjustments for estimated payments that will be made to the sellers of HMG if certain acquired receivables are collected. Given the pass-through nature of these contingent payments, they have been excluded from total consideration and current assets in the table above. See below for related discussion. Amortizing intangible assets related to the HMG acquisition are primarily composed of customer relationships, and to a lesser extent, trade names and backlog. Customer relationship intangible assets totaled approximately $132 million, and had a weighted average life of approximately 12 years, based on HMG’s operational history and established relationships with, and the nature of, its customers, which are primarily in the utilities industry. The weighted average life of amortizing intangible assets in the aggregate for the HMG acquisition was 11 years. Amortizing intangible assets related to “All other” acquisitions are primarily composed of customer relationships and trade names, which each had a weighted average life of approximately 17 years. The aggregate weighted average life related to “All other” amortizing intangible assets was 17 years. INTREN’s acquired intangible assets, which are included within “All other” acquisitions in the table above, included a customer relationship and a trade name intangible asset representing $284 million in the aggregate, having asset lives of approximately 20 years each based on INTREN’s operational history and established relationships with, and the nature of, its customers, which are primarily in the utilities industry. Amortizing intangible assets are amortized in a manner consistent with the pattern in which the related benefits are expected to be consumed. The goodwill balances for each of the respective acquisitions, including approximately $49 million for INTREN, represent the estimated values of each acquired company’s geographic presence in key markets, assembled workforce, management team’s industry-specific project management expertise and synergies expected to be achieved from the combined operations of each of the acquired companies and MasTec. Approximately $149 million of the goodwill balance related to the 2021 acquisitions is expected to be tax deductible as of June 30, 2022. One of the Company’s fourth quarter 2021 acquisitions within its Power Delivery segment resulted in the recognition of a bargain purchase gain of $3.6 million, of which $0.2 million was recognized during the six month period ended June 30, 2022. The HMG purchase agreement provides for certain additional payments to be made to the sellers if certain acquired receivables are collected by the Company (the “Additional Payments”). Pursuant to the terms of the purchase agreement, a portion of the Additional Payments will be made in cash, with the remainder due in shares of MasTec common stock. The estimated number of potential shares that could be issued related to such Additional Payments will be based on the amounts ultimately collected and the share price as defined within the purchase agreement. Changes in the estimated fair value of potential shares that could be issued, which result from changes in MasTec’s share price as compared with the share price as defined within the purchase agreement, are reflected within other income or expense, as appropriate. An Additional Payment of approximately $29.4 million was made in May 2022, which payment was composed of approximately $18 million in cash, which payment is reflected within financing activities in the consolidated statement of cash flows, and 133,157 shares of MasTec common stock. For both the three and six month periods ended June 30, 2022, a realized gain of approximately $1 million was recognized within other income, net, in connection with this payment. In addition, the HMG purchase agreement provides for a customary net working capital adjustment. In the second quarter of 2022, this working capital adjustment was resolved, resulting in a reduction in acquisition consideration for HMG of approximately $15 million, which reduction is reflected in the table above, and for which the related receivable is included within other current assets as of June 30, 2022. This working capital adjustment had no impact on the number of shares issued in connection with the acquisition. As of June 30, 2022, the estimated fair value of remaining Additional Payments was approximately $32 million, which amount is included within other current liabilities in the consolidated balance sheet and includes the effect of unrealized fair value gains related to the contingent shares. For both the three and six month periods ended June 30, 2022, unrealized fair value measurement activity related to the contingent shares totaled a gain of approximately $3.2 million, which amount is reflected within other income, net. The number of shares that would be paid in connection with the remaining Additional Payment liability as of June 30, 2022 is approximately 160,000 shares. See Note 2 – Earnings Per Share for the effect of the above referenced shares on the Company’s earnings per share calculations. Included within “All other” acquisition consideration is approximately $455 million of consideration, including estimated earn-out liabilities, for INTREN. Total cash paid for acquisitions, net, includes approximately $78 million of cash acquired. The shares of MasTec common stock transferred in connection with the HMG acquisition in the table above consisted of approximately 2.0 million shares, as determined based on the terms of the purchase agreement, valued at approximately $182 million, based on the market price of the Company’s common stock on the date of closing. The contingent consideration included in the table above is composed of earn-out liabilities, which equal a portion of the acquired companies’ earnings before interest, taxes, depreciation and amortization (“EBITDA”) in excess of thresholds agreed upon with the sellers, if applicable. The earn-out arrangements for the 2021 acquisitions generally range from one to five-year terms, as set forth in the respective purchase agreements, and are valued at approximately $103 million in the aggregate. The earn-out arrangement for the INTREN acquisition included within “All other” acquisitions had a term of less than one year. Earn-outs are generally payable annually and are recorded within other current and other long-term liabilities, as appropriate, in the consolidated balance sheets. See Note 4 - Fair Value of Financial Instruments for details pertaining to fair value estimates for the Company’s earn-out arrangements. As of June 30, 2022, the range of remaining potential undiscounted earn-out liabilities for the 2021 acquisitions was estimated to be between $4 million and $120 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 and consideration transferred for certain of these acquisitions was preliminary as of June 30, 2022; as a result, further adjustments to these estimates may occur. Pro forma results. For the three month periods ended June 30, 2022 and 2021, unaudited supplemental pro forma revenue totaled approximately $2.3 billion and $2.5 billion, respectively, and unaudited supplemental pro forma net income totaled $20.4 million and $81.6 million, respectively. For the six month periods ended June 30, 2022 and 2021, unaudited supplemental pro forma revenue totaled approximately $4.3 billion and $4.9 billion, respectively. For the six month period ended June 30, 2022, unaudited supplemental pro forma net loss totaled approximately $15.4 million, and for the six month period ended June 30, 2021, unaudited supplemental pro forma net income totaled approximately $125.1 million. Acquisition-related results. For the three and six month periods ended June 30, 2022, the Company’s consolidated results of operations included acquisition-related revenue of approximately $602.3 million and $1,307.0 million, respectively, including a total of $480.4 million and $1,028.5 million, respectively, for HMG and INTREN in the aggregate, and for the three and six month periods ended June 30, 2021, acquisition-related revenue totaled approximately $271.4 million and $358.2 million, respectively, including a total of $102.5 million for INTREN for both the three and six month periods ended June 30, 2021. For the three and six month periods ended June 30, 2022, the Company’s consolidated results of operations included acquisition-related net income of approximately $18.7 million and $9.4 million, respectively, based on the Company’s consolidated effective tax rates, and for the three and six month periods ended June 30, 2021, included acquisition-related net income of approximately $3.5 million and $4.7 million, respectively, based on the Company’s consolidated effective tax rates. These acquisition-related results include amortization of acquired intangible assets and acquisition integration costs, and exclude the effects of interest expense associated with consideration paid for the related acquisitions. Acquisition and integration costs. The Company incurred certain acquisition and integration costs in connection with its fourth quarter 2021 acquisitions, which costs are included within general and administrative expenses in the Company’s consolidated statements of operations. Acquisition and integration costs include i) the costs of integrating acquired entities, such as: employee termination expenses, including employee compensation relating to the elimination of certain positions that were determined to be redundant, and other integration-type costs, including facility consolidation expenses, lease termination expenses, system migration expenses, training, operating cost redundancies and other integration costs, as well as ii) legal, professional and other fees associated with the consummation of these acquisitions. The Company is currently in the process of integrating these acquisitions and expects to incur additional acquisition and integration expenses in 2022. Acquisition and integration costs for the three and six months period ended June 30, 2022 totaled approximately $12.5 million and $26.1 million, respectively, and as of June 30, 2022, approximately $1.5 million was included within current liabilities within the consolidated balance sheets related to such costs. IEA Acquisition. In July 2022, MasTec announced that it entered into a definitive agreement under which MasTec will acquire all of the outstanding shares of Infrastructure and Energy Alternatives, Inc. (“IEA”), a premier clean energy and infrastructure services provider, which acquisition is expected to close at the end of the fourth quarter of 2022, subject to IEA shareholder approval, regulatory approvals and other customary closing conditions. IEA is expected to be included within the Company’s Clean Energy and Infrastructure segment. Under the terms of the agreement, MasTec will acquire IEA in a cash and stock transaction valued at $14.00 per IEA share, composed of 75% cash ($10.50 per IEA share) and 25% stock consideration ($3.50 per IEA share). This acquisition will be funded with cash on hand, borrowings under the Company’s senior secured credit facility and additional debt financing. The Company intends to finance at least a portion of the cash required in connection with the transaction with a bridge facility, pursuant to which certain lenders have committed to provide a 364-day senior unsecured bridge term loan facility, or, as an alternative to the bridge facility, with the proceeds from the Term Facilities (as defined in Note 7 - Debt), for which it has also received bank commitments. See Note 7 - Debt for additional information.
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Fair Value of Financial Instruments |
6 Months Ended |
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Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments are primarily composed of 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 and additional contingent payments, 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, including for mandatorily redeemable non-controlling interests (together, “Earn-outs”), that are contingent upon the acquired business achieving certain levels of earnings in the future. As of June 30, 2022 and December 31, 2021, the estimated fair value of the Company’s Earn-out liabilities totaled $135.3 million and $160.2 million, respectively, of which $13.9 million related to mandatorily redeemable non-controlling interests as of both periods. Earn-out liabilities included within other current liabilities totaled approximately $39.6 million and $38.8 million as of June 30, 2022 and December 31, 2021, respectively. 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 June 30, 2022, ranged from 12.0% to 14.0%, with a weighted average rate of 12.5% 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 June 30, 2022, the range of potential undiscounted Earn-out liabilities was estimated to be between $17 million and $183 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. There were no additions from new business combinations for the three month period ended June 30, 2022, and additions for the six month period ended June 30, 2022 totaled approximately $1.7 million. For both the three and six month periods ended June 30, 2021, additions from new business combinations totaled $40.1 million. Measurement period adjustments totaled an increase of approximately $3.4 million for the three month period ended June 30, 2022 and related to the Company’s Oil and Gas segment, and for the six month period ended June 30, 2022, totaled an increase, net, of approximately $1.5 million and related to a net increase in the Company’s Oil and Gas segment, partially offset by a decrease in its Communications segment. There were no measurement period adjustments in either of the three or six month periods ended June 30, 2021. For both the three and six month periods ended June 30, 2022, fair value adjustments totaled a net decrease of approximately $1.3 million, and related primarily to the Company’s Communications segment. Fair value adjustments for the three and six month periods ended June 30, 2021 totaled net decreases of $8.9 million and $9.3 million, respectively, and related to decreases in the Company’s Oil and Gas and Clean Energy and Infrastructure segments, partially offset by increases in the Company’s Communications segment. Earn-out payments totaled $26.8 million for both the three and six month periods ended June 30, 2022, and totaled $46.2 million for both the three and six month periods ended June 30, 2021, including approximately $2.1 million related to mandatorily redeemable non-controlling interests. Equity Investments The Company’s equity investments as of June 30, 2022 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”); (ii) a 15% equity interest 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”; (iv) the Company’s interests in certain proportionately consolidated non-controlled contractual joint ventures; and (v) 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, some of which may involve the extension of loans or other types of financing arrangements. The Company has determined that certain of its investment arrangements are variable interest entities (“VIEs”). As of June 30, 2022, 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 June 30, 2022 and December 31, 2021, the aggregate carrying value of the Company’s equity investments, including equity investments measured on an adjusted cost basis, totaled approximately $288 million and $267 million, respectively. As of both June 30, 2022 and December 31, 2021, equity investments measured on an adjusted cost basis, including the Company’s $15 million investment in CCI, totaled approximately $20 million. There were no impairments related to these investments in any of the three or six month periods ended June 30, 2022 or 2021. The Waha JVs. The Waha JVs own and operate certain pipeline infrastructure that transports natural gas to the Mexican border for export. The Company’s investments in the Waha JVs are accounted for as equity method investments. 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 $7.6 million and $15.0 million for the three and six month periods ended June 30, 2022, respectively, and totaled $8.6 million and $16.3 million for the three and six month periods ended June 30, 2021, respectively. Distributions of earnings from the Waha JVs, which are included within operating cash flows, totaled $4.6 million and $7.6 million for the three and six month periods ended June 30, 2022, respectively. There were no distributions of earnings in either of the three or six month periods ended June 30, 2021. Cumulative undistributed earnings from the Waha JVs, which represents cumulative equity in earnings for the Waha JVs less distributions of earnings, totaled $102.3 million as of June 30, 2022. 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 equity method goodwill associated with capitalized investment costs, totaled approximately $245 million and $216 million as of June 30, 2022 and December 31, 2021, 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 (the “Waha JV 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 six month periods ended June 30, 2022, the Company’s proportionate share of unrecognized unrealized activity on the Waha JV swaps totaled gains of approximately $10.4 million and $28.7 million, respectively, or $7.8 million and $21.6 million, net of tax, respectively. For the three and six month periods ended June 30, 2021, the Company’s proportionate share of unrecognized unrealized activity on the Waha JV swaps totaled losses of approximately $4.9 million and gains of approximately $12.3 million, respectively, or $3.7 million and $9.4 million, net of tax, respectively. Other Investments. The Company has equity interests in certain telecommunications entities that are accounted for as equity method investments. As of both June 30, 2022 and December 31, 2021, the Company had an aggregate investment of approximately $20 million in these entities, including $18 million and $17 million for FM Tech, respectively, as of June 30, 2022 and December 31, 2021. For the three and six month periods ended June 30, 2022, the Company made equity contributions related to its investments in telecommunications entities totaling approximately $0.6 million and $1.1 million, respectively. For the three month period ended June 30, 2021, the Company made no equity contributions related to its investments in these entities, and for the six month period ended June 30, 2021, made equity contributions totaling approximately $2.0 million. Equity in losses, net, related to the Company’s proportionate share of income from these telecommunications entities totaled approximately $0.5 million and $0.9 million for the three and six month periods ended June 30, 2022, respectively, and equity in losses, net, totaled approximately $1.0 million for both the three and six month periods ended June 30, 2021. The difference between the carrying amount of these investments and the Company’s underlying equity in the net assets of the respective entities relates primarily to equity method goodwill associated with assembled workforce for each of these entities. Certain of these telecommunications entities provide services to MasTec. Expense recognized in connection with services provided by these entities totaled $1.6 million and $2.5 million for the three and six month periods ended June 30, 2022, respectively, and totaled $2.4 million and $4.1 million for the three and six month periods ended June 30, 2021, respectively. As of June 30, 2022 and December 31, 2021, related amounts payable to these entities totaled approximately $0.1 million and $0.3 million, respectively. In addition, the Company had an employee leasing arrangement with one of these entities and has advanced certain amounts to these entities. For the three and six month periods ended June 30, 2022, there were no employee lease expenses or advances. Employee lease expenses and advances to these entities for the three month period ended June 30, 2021 were de minimis, and for the six month period ended June 30, 2021, amounts advanced totaled $0.2 million. As of June 30, 2022 and December 31, 2021, employee lease and advances receivable totaled approximately $0.6 million and $0.9 million, respectively. The Company has 49% equity interests in certain entities included within its Power Delivery segment that are accounted for as equity method investments, for which its aggregate investment as of both June 30, 2022 and December 31, 2021 totaled approximately $4 million. For the three and six month periods ended June 30, 2022, equity in losses, net, related to these entities totaled approximately $0.2 million and $0.3 million, respectively. Certain of these entities provide construction services to MasTec. Expense recognized in connection with construction services provided by these entities totaled approximately $1.4 million and $5.0 million for the three and six month periods ended June 30, 2022, respectively. As of June 30, 2022, related amounts payable totaled approximately $0.1 million. In addition, the Company has line of credit arrangements with these investees, which, as of June 30, 2022 and December 31, 2021, provide for up to $4.5 million and $8.5 million, respectively, of borrowing availability, of which $0.5 million and $0.4 million, respectively, was drawn, which amounts are included within other current assets in the consolidated balance sheets. During the first quarter of 2021, MasTec committed to fund up to $2.5 million for a 75% equity interest in Confluence Networks, LLC (“Confluence”), an undersea fiber-optic communications systems developer and VIE. As of June 30, 2022, a total of $1.9 million had been funded, of which $0.2 million was funded during the second quarter of 2022. During the three and six month periods ended June 30, 2021, $0.6 million and $1.0 million, respectively, of funding was provided. Equity in losses related to the Company’s proportionate share of this investment totaled $0.1 million and $0.3 million for the three and six month periods ended June 30, 2022, and totaled $0.3 million for both the three and six month periods ended June 30, 2021. As of June 30, 2022, MasTec had less than a majority of the members on the board of Confluence and determined that it did not have a controlling financial interest, and therefore does not have the power to direct the primary activities that most significantly impact its economic performance, nor is it the primary beneficiary. The Company has the ability to exert significant influence over Confluence, and as a result, accounts for its investment in Confluence as an equity method investment as of June 30, 2022. The Company has certain equity investments in American Virtual Cloud Technologies, Inc. (“AVCT”), a publicly-traded company in which the Company currently has no active involvement. The Company’s investments in AVCT are included within other current assets in its consolidated financial statements, and include shares of AVCT common stock, which are equity securities, and warrants for the purchase of AVCT common stock, which are derivative financial instruments. Previously, the Company’s investment in AVCT included debentures that were convertible into shares of AVCT common stock, which were available-for-sale securities. In the third quarter of 2021, the Company’s investment in AVCT convertible debentures was automatically converted into shares of AVCT common stock. As of June 30, 2022 and December 31, 2021, the Company’s ownership interest in AVCT’s common stock totaled approximately 3% for both periods, and its aggregate ownership interest, assuming the exercise of all legally exercisable warrants into AVCT common stock, totaled approximately 5% and 6%, respectively. As of June 30, 2022 and December 31, 2021, the aggregate fair value of the Company’s investments in AVCT approximated $1 million and $8 million, respectively, with an aggregate cost approximating $6 million as of both periods. Unrealized fair value measurement activity related to the AVCT securities, which is based on the market price of its securities, a Level 1 input, and is recorded within other income or expense, net, totaled losses of approximately $2.2 million and $7.1 million for the three and six month periods ended June 30, 2022. For the three month period ended June 30, 2021, unrealized fair value measurement gains, net, totaled approximately $1.0 million, primarily related to the AVCT shares, and for the six month period ended June 30, 2021, unrealized fair value measurement losses, net, on the AVCT securities were de minimis. Unrealized fair value measurement activity related to the AVCT convertible debentures based on Level 3 inputs and recognized within other comprehensive income for the three and six month periods ended June 30, 2021, totaled gains of approximately $0.3 million and $1.3 million, respectively, or $0.2 million and $1.0 million, net of tax, respectively. Senior Notes As of both June 30, 2022 and December 31, 2021, 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, based on an exit price approach using Level 1 inputs, totaled $542.3 million and $619.5 million, respectively.
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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 | 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 not yet 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). The increase in unbilled receivables as of June 30, 2022 was driven primarily by ordinary course project activity associated with higher levels of revenue. For the six month period ended June 30, 2022, provisions for credit losses totaled $0.5 million, and for the six month period ended June 30, 2021, provisions for credit losses totaled a recovery of $11.0 million resulting from successful collection of previously reserved amounts. 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 $298.6 million and $314.0 million as of June 30, 2022 and December 31, 2021, respectively, of which deferred revenue comprised approximately $282.6 million and $296.1 million, respectively. For the three and six month periods ended June 30, 2022, the Company recognized revenue of approximately $59.5 million and $245.7 million, respectively, related to amounts that were included in deferred revenue as of December 31, 2021, resulting primarily from the advancement of physical progress on the related projects during the respective periods. 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 $1.5 million and $0.8 million for the three month periods ended June 30, 2022 and 2021, respectively, and totaled $2.5 million and $1.5 million, respectively, for the six month periods ended June 30, 2022 and 2021.
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Property and Equipment, Net |
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Property and Equipment, Net | 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 Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following table provides details of the carrying values of debt as of the dates indicated (in millions):
Senior Credit Facility As of June 30, 2022, the Company’s senior unsecured credit facility (the “Credit Facility”) had aggregate borrowing commitments totaling approximately $2.0 billion, which amount is composed of $1.65 billion of revolving commitments and a term loan with an original principal amount of $350 million (the “Term Loan”). The Term Loan is subject to amortization in quarterly principal installments of approximately $2.2 million commencing in March 2023, which quarterly installments increase to approximately $4.0 million in March 2025 until maturity. Quarterly principal installments on the Term Loan are subject to adjustment, if applicable, for certain prepayments. As of June 30, 2022 and December 31, 2021, outstanding revolving loans, which included $0.5 million and $32.3 million, respectively, of borrowings denominated in foreign currencies, accrued interest at weighted average rates of approximately 2.61% and 2.32% per annum, respectively. The Term Loan accrued interest at rates of 2.92% and 1.35% as of June 30, 2022 and December 31, 2021, respectively. Letters of credit of approximately $197.5 million and $166.3 million were issued as of June 30, 2022 and December 31, 2021, respectively. As of both June 30, 2022 and December 31, 2021, letter of credit fees accrued at 0.4375% 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 June 30, 2022 and December 31, 2021, availability for revolving loans totaled $466.9 million and $711.5 million, respectively, or up to $452.5 million and $483.7 million, respectively, for new letters of credit. Revolving loan borrowing capacity included $299.5 million and $267.7 million of availability in either Canadian dollars or Mexican pesos as of June 30, 2022 and December 31, 2021, respectively. The unused facility fee as of both June 30, 2022 and December 31, 2021 accrued at a rate of 0.175% per annum. The Credit Facility is guaranteed by certain subsidiaries of the Company and the obligations under the Credit Facility are not secured. Other Credit Facilities. The Company has other credit facilities that support: (i) the working capital requirements of its foreign operations and (ii) certain letter of credit issuances. There were no outstanding borrowings under the Company’s other credit facilities as of June 30, 2022 or December 31, 2021. Additionally, the Company has a separate credit facility, under which it may issue performance standby letters of credit. As of June 30, 2022 and December 31, 2021, letters of credit issued under this facility totaled $18.3 million and $22.2 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 Guarantees and Covenants The 4.50% Senior Notes are fully and unconditionally guaranteed on a senior unsecured, joint and several basis by certain of the Company’s wholly-owned domestic restricted subsidiaries that guarantee its existing credit facilities. MasTec was in compliance with the provisions and covenants of its outstanding debt instruments as of both June 30, 2022 and December 31, 2021. Additional Information As of June 30, 2022 and December 31, 2021, accrued interest payable, which is recorded within other accrued expenses in the consolidated balance sheets, totaled $13.1 million and $11.7 million, respectively. For additional information pertaining to the Company’s debt instruments, see Note 7 - Debt in the Company’s 2021 Form 10-K. Bridge Facility and Term Loan Commitments In July 2022, MasTec announced that it entered into an agreement to acquire all of the outstanding shares of IEA. This acquisition will be funded with cash on hand, borrowings under the Company’s senior secured credit facility and additional debt financing. The Company intends to finance at least a portion of the cash required in connection with this transaction with a bridge facility, pursuant to which certain lenders have committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to $1 billion, or, as an alternative to the bridge facility, with the proceeds from the Term Facilities (as defined below), for which the Company has also received bank commitments. Certain lenders have agreed to use commercially reasonable efforts to provide (i) a three-year senior unsecured term loan facility in an aggregate principal amount of $500 million and (ii) a five-year senior unsecured term loan facility in an aggregate principal amount of $500 million (together, the “Term Facilities”). Additionally, the Company may continue to evaluate alternative financing structures and amounts based on its needs and capital market conditions. The availability of borrowings under the above described facilities is subject to the satisfaction of certain customary conditions, including execution of definitive documentation and the substantially concurrent consummation of the IEA acquisition. Through August 1, 2022, MasTec has incurred approximately $3 million of financing costs in connection with these financing commitments, which amounts will be recorded as deferred financing costs and amortized to interest expense over the period of the related instruments. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets for additional information related to the IEA transaction.
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Lease Obligations |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Obligations | 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 June 30, 2022, the Company’s leases have remaining lease terms of up to eleven years. Lease agreements may contain renewal clauses, which, if elected, generally extend the term of the lease for 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 June 30, 2022 and December 31, 2021 totaled $624.8 million and $653.5 million, respectively. , totaled $452.3 million and $468.5 million as of June 30, 2022 and December 31, 2021, respectively. Depreciation expense associated with finance leases totaled $20.0 million and $18.7 million for the three month periods ended June 30, 2022 and 2021, respectively, and totaled $40.3 million and $37.7 million for the six month periods ended June 30, 2022 and 2021, respectively. Operating Leases Operating lease additions for the three month periods ended June 30, 2022 and 2021 totaled $18.4 million and $79.7 million, respectively, and for the six month periods ended June 30, 2022 and 2021, totaled $45.3 million and $85.3 million, respectively. Acquisition-related lease additions totaled $74.6 million for the six month period ended June 30, 2021. For the three month periods ended June 30, 2022 and 2021, rent expense for leases that have terms in excess of one year totaled approximately $33.9 million and $28.1 million, respectively, of which $2.5 million and $2.9 million, respectively, represented variable lease costs. For the six month periods ended June 30, 2022 and 2021, rent expense for such leases totaled approximately $67.9 million and $55.5 million, respectively, of which $5.5 million and $5.1 million, respectively, represented variable lease costs. The Company also incurred rent expense for leases with terms of one year or less totaling approximately $53.7 million and $130.8 million for the three month periods ended June 30, 2022 and 2021, respectively. Rent expense for such leases totaled approximately $159.3 million and $240.9 million for the six month periods ended June 30, 2022 and 2021, 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 June 30, 2022 were as follows (in millions):
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Lease Obligations | 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 June 30, 2022, the Company’s leases have remaining lease terms of up to eleven years. Lease agreements may contain renewal clauses, which, if elected, generally extend the term of the lease for 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 June 30, 2022 and December 31, 2021 totaled $624.8 million and $653.5 million, respectively. , totaled $452.3 million and $468.5 million as of June 30, 2022 and December 31, 2021, respectively. Depreciation expense associated with finance leases totaled $20.0 million and $18.7 million for the three month periods ended June 30, 2022 and 2021, respectively, and totaled $40.3 million and $37.7 million for the six month periods ended June 30, 2022 and 2021, respectively. Operating Leases Operating lease additions for the three month periods ended June 30, 2022 and 2021 totaled $18.4 million and $79.7 million, respectively, and for the six month periods ended June 30, 2022 and 2021, totaled $45.3 million and $85.3 million, respectively. Acquisition-related lease additions totaled $74.6 million for the six month period ended June 30, 2021. For the three month periods ended June 30, 2022 and 2021, rent expense for leases that have terms in excess of one year totaled approximately $33.9 million and $28.1 million, respectively, of which $2.5 million and $2.9 million, respectively, represented variable lease costs. For the six month periods ended June 30, 2022 and 2021, rent expense for such leases totaled approximately $67.9 million and $55.5 million, respectively, of which $5.5 million and $5.1 million, respectively, represented variable lease costs. The Company also incurred rent expense for leases with terms of one year or less totaling approximately $53.7 million and $130.8 million for the three month periods ended June 30, 2022 and 2021, respectively. Rent expense for such leases totaled approximately $159.3 million and $240.9 million for the six month periods ended June 30, 2022 and 2021, 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 June 30, 2022 were as follows (in millions):
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Stock-Based Compensation and Other Employee Benefit Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation and Other Employee Benefit Plans | 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 June 30, 2022, there were approximately 3,404,000 shares available for future grant. Non-cash stock-based compensation expense under all plans totaled $6.8 million and $6.1 million for the three month periods ended June 30, 2022 and 2021, respectively, and totaled $13.2 million and $11.6 million for the six month periods ended June 30, 2022 and 2021, respectively. Income tax benefits associated with stock-based compensation arrangements totaled $1.2 million for both the three month periods ended June 30, 2022 and 2021. For the six month periods ended June 30, 2022 and 2021, income tax benefits totaled $3.4 million and $2.3 million, respectively, including net tax benefits related to the vesting of share-based payment awards totaling $0.9 million and $0.1 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 June 30, 2022, total unearned compensation related to restricted shares was approximately $44.3 million, which amount 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 and $0.5 million for the three month periods ended June 30, 2022 and 2021, respectively, and totaled $19.2 million and $11.3 million for the six month periods ended June 30, 2022 and 2021, respectively.
(a) Includes 2,150 and 1,300 restricted stock units as of June 30, 2022 and December 31, 2021, respectively. 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 participants. Under the ESPPs, eligible participants are permitted to purchase MasTec, Inc. common stock at 85% of the fair market value of the shares on the date of purchase, which occurs on the last trading day of each two week offering period. At the Company’s discretion, share purchases may be satisfied by delivering newly issued common shares or common shares reacquired on the open market or in privately negotiated transactions. For the three month periods ended June 30, 2022 and 2021, 31,888 shares and 20,191 shares, respectively, were purchased by participants under the Company’s ESPPs for $1.8 million in both periods, and for the six month periods ended June 30, 2022 and 2021, 56,625 shares and 39,033 shares, respectively, were purchased for $3.6 million and $3.2 million, respectively. All shares purchased by participants under the Company’s ESPPs for the three and six month periods ended June 30, 2022 and 2021 were reacquired by the Company on the open market. Compensation expense associated with the Company’s ESPPs totaled approximately $0.3 million and $0.2 million for the three month periods ended June 30, 2022 and 2021, respectively, and totaled approximately $0.7 million and $0.5 million for the six month periods ended June 30, 2022 and 2021, respectively.
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Other Retirement Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Retirement Plans | Other Retirement PlansMultiemployer Plans. Certain of MasTec’s subsidiaries contribute amounts to multiemployer pension and other multiemployer benefit plans and trusts (“MEPPs”). 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 associated contributions in the table above related primarily to the timing of activity for the Company’s union resource-based projects. For the three and six month periods ended June 30, 2022, multiemployer plan activity was driven primarily by acquisition-related project work within the Company’s Power Delivery operations, whereas for the three and six month periods ended June 30, 2021, activity was driven primarily by projects within the Company’s Oil and Gas operations.
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Equity |
6 Months Ended |
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Jun. 30, 2022 | |
Equity [Abstract] | |
Equity | Equity Share Activity The Company’s share repurchase programs provide for the repurchase, from time to time, of MasTec common shares in open market transactions or in privately negotiated transactions in accordance with applicable securities laws. 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. For the three and six month periods ended June 30, 2022, the Company repurchased 0.9 million and 1.1 million shares of its common stock, respectively, under its share repurchase programs for an aggregate purchase price of approximately $67.5 million and $81.3 million, respectively. Of the total repurchased shares, 0.1 million were repurchased in the first quarter of 2022 for $8.6 million under the Company’s December 2018 $100 million share repurchase program, which completed the program. The remaining 1.0 million shares were repurchased for $72.7 million under the Company’s March 2020 $150 million share repurchase program. There were no share repurchases under the Company’s share repurchase programs in either of the three or six month periods ended June 30, 2021. The Company may use either authorized or unissued shares or treasury shares to meet its share issuance requirements. During the second quarter of 2022, the Company reissued 0.1 million shares of its treasury stock with a cost basis of $4.3 million in settlement of certain Additional Payments in connection with an acquisition. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets for additional information. As of June 30, 2022, $77.3 million was available for future share repurchases under the Company’s March 2020 share repurchase program. Accumulated Other Comprehensive Loss Unrealized foreign currency translation activity, net, for the three and six month periods ended June 30, 2022 and 2021 relates to the Company’s operations in Canada and Mexico. Unrealized investment activity, net, for the three and six month periods ended June 30, 2022 relates to activity associated with the Waha JV interest rate swaps. For the three month period ended June 30, 2021, unrealized investment activity, net, includes unrealized losses on the interest rate swaps, offset, in part, by unrealized gains on the Company’s investment in AVCT convertible debentures. For the six month period ended June 30, 2021, unrealized investment activity, net, includes unrealized gains on both the interest rate swaps and on the AVCT convertible debentures. See Note 4 - Fair Value of Financial Instruments for additional information related to the Waha JV swaps and the AVCT convertible debentures.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 June 30, 2022 and 2021, the Company’s consolidated effective tax rates were 10.9% and 26.3%, respectively, and for the six month periods ended June 30, 2022 and 2021, were 37.4% and 28.4%, respectively. The Company’s effective tax rate for the six month period ended June 30, 2022 included a net tax benefit of approximately $1.0 million related to the vesting of share-based payment awards as well as a benefit of approximately $2.0 million from the true-up of certain prior year non-deductible expenses, whereas for the six month period ended June 30, 2021, included the negative effect of $2.3 million related to non-deductible share-based compensation. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 disputes, other project-related liabilities 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. In the third quarter of 2021, a settlement was finalized in favor of MasTec for approximately $25 million. As of June 30, 2022, $12 million, net of related settlement costs, is due in 2022. 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 June 30, 2022 and December 31, 2021, there were $215.8 million and $188.5 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 June 30, 2022. 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 June 30, 2022 and December 31, 2021, outstanding performance and payment bonds approximated $2,154.3 million and $2,155.2 million, respectively, and estimated costs to complete projects secured by these bonds totaled $770.7 million and $768.8 million as of June 30, 2022 and December 31, 2021, respectively. Included in these balances as of both June 30, 2022 and December 31, 2021 are $115.0 million of outstanding performance and payment bonds issued on behalf of the Company’s proportionately consolidated non-controlled contractual joint ventures, representing the Company’s proportionate share of the total bond obligation for the related projects. 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 undivided interests ranging from 30% to 50% in three civil construction projects. 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 June 30, 2022, the Company was not aware of material future claims against it in connection with these arrangements. Included in the Company’s cash balances as of June 30, 2022 and December 31, 2021 are amounts held by entities that are proportionately consolidated totaling $13.1 million and $14.6 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 and Note 15 - Related Party Transactions for additional information pertaining to the Company’s 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. The Company manages certain of its insurance liabilities indirectly through its wholly-owned captive insurance companies, which reimburse claims up to the applicable insurance limits. Cash balances held by the Company’s captive insurance companies, which totaled approximately $0.3 million as of both June 30, 2022 and December 31, 2021, are generally not available for use in the Company’s other operations. As of June 30, 2022 and December 31, 2021, MasTec’s estimated liability for unpaid claims and associated expenses, including incurred but not reported losses related to its insurance policies, totaled $190.8 million and $189.8 million, respectively, of which $125.4 million and $126.5 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 $4.4 million and $4.2 million as of June 30, 2022 and December 31, 2021, 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 $154.3 million and $125.7 million as of June 30, 2022 and December 31, 2021, respectively. As of both June 30, 2022 and December 31, 2021, outstanding surety bonds related to self-insurance programs amounted to $52.9 million. 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 June 30, 2022, 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. In connection with the HMG acquisition, the Company assumed an obligation related to HMG’s 2016 withdrawal from a multiemployer pension plan, under which HMG is obligated to make quarterly payments of approximately $74,000 through 2036. As of June 30, 2022 and December 31, 2021, a withdrawal liability of approximately $3.3 million and $3.4 million, respectively, was recorded within other current and other long-term liabilities, as appropriate, within the consolidated balance sheets related to this obligation. 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 both June 30, 2022 and December 31, 2021, the Company had accrued project close-out liabilities of approximately $40 million. The Company is not aware of any other material asserted or unasserted claims in connection with its potential 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 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. For the six month period ended June 30, 2022, the Company had approximately 920 customers. In the third quarter of 2021, DIRECTV® was spun off from AT&T. As a result, for customer reporting purposes, AT&T and DIRECTV® are reported separately and all prior periods have been updated to give retroactive effect to the spin-off of DIRECTV® from AT&T. As of June 30, 2022 and December 31, 2021, there were no customers that represented greater than 10% of the Company’s consolidated net accounts receivable position, which is calculated as accounts receivable, net, less deferred revenue. For the three month periods ended June 30, 2022 and 2021, the Company derived approximately 42% and 53%, respectively, of its revenue from its top ten customers, and derived 43% and 58% for the six month periods ended June 30, 2022 and 2021, respectively.
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Related Party Transactions |
6 Months Ended |
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Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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, business development and administrative 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 June 30, 2022 and 2021, such payments to related party entities totaled approximately $7.8 million and $30.7 million, respectively, and for the six month periods ended June 30, 2022 and 2021, totaled approximately $14.6 million and $51.1 million, respectively. Payables associated with such arrangements totaled approximately $0.8 million and $0.6 million as of June 30, 2022 and December 31, 2021, respectively. Revenue from such related party arrangements totaled approximately $1.3 million and $0.9 million for the three month periods ended June 30, 2022 and 2021, respectively, and totaled approximately $5.1 million and $2.1 million, respectively, for the six month periods ended June 30, 2022 and 2021. Related amounts receivable, net, totaled approximately $2.5 million and $0.4 million as of June 30, 2022 and December 31, 2021, respectively. The Company rents and leases equipment and purchases certain supplies and servicing from CCI. 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, 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 and six month periods ended June 30, 2022, MasTec paid CCI $0.7 million and $1.7 million, respectively, related to this activity, and for the three and six month periods ended June 30, 2021, paid approximately $5.6 million and $10.7 million, net of rebates, respectively. Amounts payable to CCI totaled approximately $0.8 million as of both June 30, 2022 and December 31, 2021. 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 June 30, 2022 and 2021, MasTec incurred subcontracting expenses in connection with this arrangement of approximately $0.1 million and $16.8 million, respectively, and for the six month periods ended June 30, 2022 and 2021, incurred subcontracting expenses of approximately $0.1 million and $45.8 million, respectively. As of June 30, 2022 and December 31, 2021, related amounts payable totaled approximately $0.1 million and $0.5 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 June 30, 2022 and 2021, MasTec paid approximately $0.6 million related to this leasing arrangement, and paid approximately $1.3 million for both the six month periods ended June 30, 2022 and 2021. MasTec has performed construction services on behalf of a professional Miami soccer franchise (the “Franchise”) in which Jorge Mas and José R. Mas are majority owners. Services provided by MasTec have included the construction of a soccer facility and stadium as well as wireless infrastructure services. MasTec may perform additional construction services for the Franchise in the future. Payments for other expenses related to the Franchise for the three month periods ended June 30, 2022 and 2021 totaled approximately $0.2 million and $0.1 million, respectively, and totaled approximately $0.3 million and $0.2 million for the six month periods ended June 30, 2022 and 2021. In connection with a fourth quarter 2021 acquisition, MasTec has a subcontracting arrangement to perform construction services for an entity, of which José R. Mas acquired a minority interest, and of which a member of management of a MasTec subsidiary owns the remaining interest. For the three and six month periods ended June 30, 2022, revenue recognized by MasTec under this arrangement totaled approximately $31.9 million and $60.7 million, respectively, and as of June 30, 2022, related amounts receivable totaled approximately $9.0 million. There were no amounts receivable as of December 31, 2021. MasTec pays a management fee to this entity in connection with the subcontracting arrangement. MasTec incurred approximately $0.5 million and $0.7 million of management fee expenses related to this arrangement for the three and six month periods ended June 30, 2022, of which $0.3 million was payable as of June 30, 2022. MasTec leases employees and provides satellite communication services to a customer in which Jorge Mas and José R. Mas own a majority interest. Charges to this customer under these arrangements totaled approximately $0.3 million for both the three month periods ended June 30, 2022 and 2021, and totaled approximately $0.6 million for both the six month periods ended June 30, 2022 and 2021. As of both June 30, 2022 and December 31, 2021, related amounts receivable totaled approximately $0.8 million. The Company has advanced amounts on behalf of an entity that was acquired in 2021. Amounts outstanding for such advances, which are expected to be settled under customary terms associated with the related purchase agreement, totaled approximately $1.9 million and $0.5 million as of June 30, 2022 and December 31, 2021, respectively. Additionally, in 2021, the Company advanced amounts to the former owner of an acquired business. There were no remaining amounts outstanding as of June 30, 2022, and as of December 31, 2021, approximately $1.0 million of such advances was outstanding. In addition, the Company, through a 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. For the three month period ended June 30, 2022, the Company made no equity contributions to this entity, and for the six month period ended June 30, 2022, the Company made equity contributions of $0.5 million. As of June 30, 2022 and December 31, 2021, the Company’s net investment in this entity was a liability of approximately $1.3 million and $1.6 million, respectively, which net amounts each included approximately $2.3 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. Income recognized in connection with these arrangements totaled approximately $0.2 million for both the three month periods ended June 30, 2022 and 2021, and totaled $0.4 million for both the six month periods ended June 30, 2022 and 2021. As of both June 30, 2022 and December 31, 2021, related amounts receivable totaled $0.4 million. Non-controlling interests in entities consolidated by the Company represent ownership interests held by members of management of certain of the Company’s subsidiaries, primarily in the Company’s Oil and Gas segment. In June 2021, the Company acquired an additional 15% of the non-controlling interests in one of these entities from two members of subsidiary management for $6.8 million in cash. Split Dollar Agreements MasTec has split dollar life insurance agreements with trusts, for one of which Jorge Mas is a trustee and for the other of which José R. Mas is a trustee. The Company paid $0.5 million and $0.7 million, respectively, in both the second quarters of 2022 and 2021 in connection with these agreements. As of June 30, 2022 and December 31, 2021, life insurance assets associated with these agreements totaled approximately $25.2 million and $24.0 million, respectively.
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Business, Basis of Presentation and Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
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, 2021 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, 2021 contained in the Company’s 2021 Annual Report on Form 10-K (the “2021 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 with the current period presentation, including for the first quarter 2022 change in segment balance sheet information for HMG, as discussed above. In addition, in the fourth quarter of 2021, the Company updated its presentation of gains or losses, net, from the sale of property and equipment to include such amounts within general and administrative expenses. Previously, such gains or losses were included within other income or expense. 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 with the current period presentation, including for the first quarter 2022 change in segment balance sheet information for HMG, as discussed above. In addition, in the fourth quarter of 2021, the Company updated its presentation of gains or losses, net, from the sale of property and equipment to include such amounts within general and administrative expenses. Previously, such gains or losses were included within other income or expense |
Principles of Consolidation | 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 other liabilities. Net income or loss attributable to non-controlling interests is reported as a separate line item below net income or loss. The Company applies the equity method of accounting for its investments in entities for which it does not have a controlling financial interest, but over which it has the ability to exert significant influence. 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.
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Equity Method Investments | The Company applies the equity method of accounting for its investments in entities for which it does not have a controlling financial interest, but over which it has the ability to exert significant influence. |
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 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. For foreign operations for which the local currency is not the functional currency, the operation’s non-monetary assets are remeasured into U.S. dollars at historical exchange rates. All other accounts are remeasured at current exchange rates. Gains or losses from remeasurement are included in other income or expense, net. Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in other income or expense, net.
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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 that management believes to be reasonable under the circumstances, including the potential future effects of macroeconomic trends and events, such as rising inflation and interest rate levels; climate-related matters; market, regulatory and industry factors; global events, such as the ongoing military conflict in Ukraine; and public health matters, such as the COVID-19 pandemic. 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 these 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, intangible and other assets, acquisition-related contingent consideration and other liabilities, equity investments and 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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General Economic Conditions, including the Effects of COVID-19 | General Economic Conditions, including the Effects of COVID-19 The Company has experienced, and may continue to experience, direct and indirect negative effects on its business and operations from negative economic conditions, including recent inflationary effects on fuel prices, labor and materials costs, rising interest rates and supply chain disruptions that have limited the availability of products. The Company may also experience negative effects from possible longer-term changes in consumer and customer behavior resulting from the effects of the COVID-19 pandemic. The COVID-19 pandemic disrupted business activities and global economic conditions beginning in 2020 and has negatively affected the Company’s operations during the same period. The Company has taken steps to mitigate the effects of the COVID-19 pandemic on its business, and its business model has, thus far, proven resilient. While the adverse effects of the COVID-19 pandemic have begun to subside, its effects vary by region, and uncertainties arising from the COVID-19 pandemic could continue to disrupt economic conditions and business activities, particularly as new variants arise. The extent to which general economic conditions and the COVID-19 pandemic, including its emerging variants, could affect the Company’s business, operations and financial results is uncertain as it will depend upon numerous evolving factors that management may not be able to accurately predict, and, therefore, any future impacts on the Company’s business, financial condition and/or results of operations cannot be quantified or predicted with specificity. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted in response to the effects of the COVID-19 pandemic, permitted deferral and/or reduction of certain federal and payroll tax amounts, certain of which the Company pursued.
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Revenue Recognition | Revenue Recognition The Company recognizes revenue from contracts with customers when, or as, control of promised services and goods is transferred to customers. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for the services and goods transferred. The Company primarily recognizes revenue 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 generally 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 54% and 32% of consolidated revenue for the three month periods ended June 30, 2022 and 2021, respectively, and totaled 56% and 31% for the six month periods ended June 30, 2022 and 2021, respectively. For certain master service and other service agreements, revenue is recognized at a point in time, primarily for install-to-the-home and certain other wireless services in the Company’s Communications segment. 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 in each of the three and six month periods ended June 30, 2022 and 2021. 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 six month periods ended June 30, 2022 and 2021, 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, 2021 and 2020. Changes in recognized revenue, net, as a result of changes in total contract transaction price estimates, including from variable consideration, from performance obligations satisfied or partially satisfied in prior periods, for the three month periods ended June 30, 2022 and 2021, totaled a net reduction of approximately $0.6 million and a net increase of approximately $30.5 million, respectively. For the six month periods ended June 30, 2022 and 2021, such changes totaled net increases of approximately $8.8 million and $37.0 million, respectively. Performance Obligations. A performance obligation is a contractual promise to transfer a distinct good or service to a customer. 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 June 30, 2022, the amount of the Company’s remaining performance obligations was $5.2 billion. Based on current expectations, the Company anticipates it will recognize approximately $2.8 billion of its remaining performance obligations as revenue during 2022, with the majority of the remaining balance expected to be recognized in 2023. 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 June 30, 2022 and December 31, 2021, the Company included approximately $165 million and $104 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 June 30, 2022 and December 31, 2021, these change orders and/or claims primarily related to certain projects in the Company’s Clean Energy and Infrastructure and Power Delivery 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 The discussion below describes the effects of recent accounting pronouncements, as updated from the discussion in the Company’s 2021 Form 10-K. Recent Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) to improve consistency for revenue recognition in the post-acquisition period for acquired contracts as compared to contracts entered into subsequent to acquisition. ASU 2021-08 requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers, rather than at fair value. ASU 2021-08 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company does not expect that this ASU will have a material effect on its consolidated financial statements.
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Earnings Per Share (Tables) |
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Schedule of Earnings Per Share | The following table provides details underlying the Company’s earnings per share calculations for the periods indicated (in thousands):
(a)For basic net income, calculated as total net income or loss less amounts attributable to non-controlling interests. For diluted net income, calculated as total net income or loss, less amounts attributable to non-controlling interests, adjusted for the fair value gain or loss, if any, related to additional contingent payments to the former owners of an acquired business for which the contingency has been resolved as of the respective period. See discussion above and in Note 3 – Acquisitions, Goodwill and Other Intangible Assets. (b)For the three and six month periods ended June 30, 2022, represents the fair value gain or loss related to additional contingent payments for which the contingency has been resolved as of June 30, 2022. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets for additional information. (c)For the three and six month periods ended June 30, 2022, basic shares include approximately 132,000 and 101,000 weighted average shares, respectively, related to additional contingent payments. (d)For the three and six month periods ended June 30, 2022, weighted average anti-dilutive common stock equivalents totaled approximately 178,000 and 1,273,000 respectively, and for the three and six month periods ended June 30, 2021, totaled approximately 1,000 and 2,000, respectively. (e)For the three and six month periods ended June 30, 2022, common stock equivalents included approximately 1,000 and 32,000 weighted average shares, respectively, related to additional contingent payments to the former owners of an acquired business. For the six month period ended June 30, 2022, common stock equivalents were anti-dilutive except to the extent of the common stock equivalents associated with the additional contingent payments.
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Acquisitions, Goodwill, and Other Intangible Assets (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill by Segment | The following table provides a reconciliation of changes in goodwill by reportable segment for the six month period ended June 30, 2022 (in millions). Goodwill balances as of December 31, 2021 were recast in the first quarter of 2022 to reflect the change in segment reporting for the HMG acquisition, as discussed in Note 1 – Business, Basis of Presentation and Significant Accounting Policies. Goodwill was reallocated based on the estimated relative fair value of the respective HMG reporting units. See Note 13 – Segments and Related Information for additional information.
(a) The change in segment reporting for the HMG acquisition resulted in a decrease in Power Delivery segment goodwill of $23.4 million and an increase in goodwill for the Communications and Oil and Gas segments of $13.0 million and $10.4 million, respectively, as of December 31, 2021. (b) Accumulated impairment losses include the effects of currency translation gains and/or losses. (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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Schedule of Finite-Lived 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 trademarks, trade names and non-compete agreements. (b)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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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of consideration paid and net assets acquired for the 2021 acquisitions, as adjusted (in millions):
|
Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Commitments, Finance Leases | Future minimum lease commitments as of June 30, 2022 were as follows (in millions):
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Schedule of Future Minimum Lease Commitments, Operating Leases | Future minimum lease commitments as of June 30, 2022 were as follows (in millions):
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Stock-Based Compensation and Other Employee Benefit Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity, Restricted Shares |
(a) Includes 2,150 and 1,300 restricted stock units as of June 30, 2022 and December 31, 2021, respectively.
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Other Retirement Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Information by Reportable Segment | 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 24.1% and 20.6% of Communications segment revenue for the three month periods ended June 30, 2022 and 2021, respectively, and represented 24.8% and 20.4% for the six month periods ended June 30, 2021 and 2020, respectively.
(a) Segment assets as of December 31, 2021 were recast during the first quarter of 2022 to conform with the change in segment reporting for the HMG acquisition, the effect of which was a decrease in Power Delivery segment assets of $192.2 million, an increase in assets for the Communications and Oil and Gas segments of $69.4 million and $77.0 million, respectively, and an increase in Corporate assets of $45.8 million.
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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 - Narrative (Details) $ in Millions |
6 Months Ended |
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Jun. 30, 2022
USD ($)
segment
| |
Accounting Policies [Abstract] | |
Number of reportable segments | segment | 5 |
Accrued payroll taxes | $ | $ 42 |
Earnings Per Share - Narrative (Details) - shares |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
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May 31, 2022 |
Dec. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
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Business Acquisition [Line Items] | |||||||
Antidilutive securities excluded from computation of diluted net loss per share (in shares) | 1,173,000 | ||||||
Treasury stock acquired (in shares) | 936,000 | 0 | 1,124,000 | 0 | |||
Repurchase effect on weighted average shares outstanding, decrease (in shares) | 554,000 | 330,000 | |||||
HMG | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition, number of shares issued (in shares) | 133,000 | 1,975,000 | 2,000,000 |
Acquisitions, Goodwill, and Other Intangible Assets - Quarterly Assessment for Indicators of Impairment - Narrative (Details) |
3 Months Ended |
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Jun. 30, 2022
reporting_unit
| |
Oil and Gas | |
Goodwill [Line Items] | |
Number of reporting units | 2 |
Power Delivery | |
Goodwill [Line Items] | |
Number of reporting units | 1 |
Acquisitions, Goodwill, and Other Intangible Assets - IEA Acquisition (Details) - Subsequent Event |
1 Months Ended |
---|---|
Jul. 31, 2022
$ / shares
| |
Bridge Facility, Term Loan | Credit Facility | |
Business Acquisition [Line Items] | |
Debt instrument, term | 364 days |
IEA Acquisition | |
Business Acquisition [Line Items] | |
Business acquisition, share price (in dollars per share) | $ 14.00 |
IEA Acquisition | Bridge Facility, Term Loan | Credit Facility | |
Business Acquisition [Line Items] | |
Debt instrument, term | 364 days |
IEA Acquisition | Cash | |
Business Acquisition [Line Items] | |
Business acquisition, share price (in dollars per share) | $ 10.50 |
Business acquisition, percentage of consideration allocation | 0.75 |
IEA Acquisition | Stock | |
Business Acquisition [Line Items] | |
Business acquisition, share price (in dollars per share) | $ 3.50 |
Business acquisition, percentage of consideration allocation | 0.25 |
Fair Value of Financial Instruments - Other Investments - AVCT - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Fair Value, Financial Instruments Measured on a Recurring Basis [Line Items] | |||||
Equity investment and warrants, amount paid | $ 6.0 | $ 6.0 | $ 6.0 | ||
AVCT | |||||
Fair Value, Financial Instruments Measured on a Recurring Basis [Line Items] | |||||
Equity investment ownership, percentage | 3.00% | 3.00% | 3.00% | ||
Beneficial ownership of all interests, percentage | 5.00% | 5.00% | 6.00% | ||
Unrealized fair value measurement gains (losses), AVCT shares | $ (2.2) | $ 1.0 | $ (7.1) | ||
Unrealized gains (losses) on AVCT convertible debentures, before tax | 0.3 | $ 1.3 | |||
Unrealized gains (losses) on AVCT convertible debentures, net of tax | $ 0.2 | $ 1.0 | |||
AVCT | Common Stock | |||||
Fair Value, Financial Instruments Measured on a Recurring Basis [Line Items] | |||||
Equity securities, fair value | $ 1.0 | $ 1.0 | $ 8.0 |
Fair Value of Financial Instruments - Senior Notes - Narrative (Details) - 4.50% Senior Notes - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value Disclosure of Liabilities Not Measured at Fair Value [Line Items] | ||
Senior notes, gross carrying amount | $ 600.0 | $ 600.0 |
Senior Notes | ||
Fair Value Disclosure of Liabilities Not Measured at Fair Value [Line Items] | ||
Debt instrument, interest rate (percentage) | 4.50% | 4.50% |
Senior notes, estimated fair value | $ 542.3 | $ 619.5 |
Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities - Schedule of Accounts Receivable, Net of Allowance and Contract Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Receivables [Abstract] | ||
Contract billings | $ 1,022,900 | $ 1,027,100 |
Less allowance | (8,300) | (7,800) |
Accounts receivable, net of allowance | 1,014,616 | 1,019,324 |
Contract Assets [Abstract] | ||
Retainage | 273,300 | 296,800 |
Unbilled receivables | 1,246,100 | 931,100 |
Contract assets | $ 1,519,387 | $ 1,227,927 |
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Property and Equipment [Line Items] | ||
Property and equipment | $ 3,108,800 | $ 2,840,400 |
Less accumulated depreciation and amortization | (1,537,000) | (1,404,300) |
Property and equipment, net | 1,571,828 | 1,436,087 |
Land | ||
Property and Equipment [Line Items] | ||
Property and equipment | 55,800 | 40,000 |
Buildings and leasehold improvements | ||
Property and Equipment [Line Items] | ||
Property and equipment | 86,200 | 94,100 |
Machinery and equipment | ||
Property and Equipment [Line Items] | ||
Property and equipment | 2,616,600 | 2,411,000 |
Office furniture and equipment | ||
Property and Equipment [Line Items] | ||
Property and equipment | 275,800 | 262,600 |
Construction in progress | ||
Property and Equipment [Line Items] | ||
Property and equipment | $ 74,400 | $ 32,700 |
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Capitalized internal-use software, gross | $ 182.1 | $ 176.4 |
Capitalized internal-use software, net | $ 42.4 | $ 43.9 |
Debt - Schedule of Carrying Values of Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Finance lease and other obligations | $ 351,400 | $ 310,300 |
Total debt obligations | 2,286,900 | 2,032,600 |
Less unamortized deferred financing costs | (16,800) | (18,500) |
Total debt, net of deferred financing costs | 2,270,100 | 2,014,100 |
Current portion of long-term debt | 151,987 | 137,912 |
Long-term debt | 2,118,084 | 1,876,233 |
Credit Facility | Revolving Loans | ||
Debt Instrument [Line Items] | ||
Long-term debt obligations | 985,500 | 772,300 |
Credit Facility | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt obligations | 350,000 | 350,000 |
Senior Notes | 4.50% Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt obligations | $ 600,000 | $ 600,000 |
Debt instrument, interest rate (percentage) | 4.50% | 4.50% |
Debt - Other Credit Facilities - Narrative (Details) - USD ($) |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Letters of credit issued | $ 215,800,000 | $ 188,500,000 |
Other Credit Facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt obligations | 0 | 0 |
Standby Letters of Credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Letters of credit issued | $ 18,300,000 | $ 22,200,000 |
Standby Letters of Credit | Line of Credit | Letters of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit facility, interest rate (percentage) | 0.50% | 0.40% |
Debt - Debt Guarantees - Narrative (Details) |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
4.50% Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 4.50% | 4.50% |
Debt - Additional Information - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Disclosure [Abstract] | ||
Debt instruments, accrued interest payable | $ 13.1 | $ 11.7 |
Stock-Based Compensation and Other Employee Benefit Plans - Narrative (Details) - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Stock-Based Compensation and Other Employee Benefit Plans [Line Items] | ||||
Stock-based compensation plans, number of shares available for future grant (in shares) | 3,404 | 3,404 | ||
Non-cash stock-based compensation expense | $ 6.8 | $ 6.1 | $ 13.2 | $ 11.6 |
Stock-based compensation, income tax benefits | $ 1.2 | $ 1.2 | 3.4 | 2.3 |
Stock-based compensation, vested awards, net income tax benefits | $ 0.9 | $ 0.1 |
Stock-Based Compensation and Other Employee Benefit Plans - Restricted Shares, Narrative (Details) - Restricted Shares - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Stock-Based Compensation and Other Employee Benefit Plans [Line Items] | ||||
Stock-based compensation awards, unearned compensation | $ 44.3 | $ 44.3 | ||
Stock-based compensation awards, unearned compensation, weighted average expected recognition period (in years) | 2 years | |||
Stock-based compensation, vested awards, intrinsic value | $ 0.2 | $ 0.5 | $ 19.2 | $ 11.3 |
Stock-Based Compensation and Other Employee Benefit Plans - Schedule of Activity, Restricted Shares (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022
$ / shares
shares
| |
Restricted Shares | |
Restricted Shares | |
Non-vested restricted shares, beginning balance (in shares) | 1,748,685 |
Granted (in shares) | 179,247 |
Vested (in shares) | (229,325) |
Canceled/forfeited (in shares) | (9,635) |
Non-vested restricted shares, ending balance (in shares) | 1,688,972 |
Per Share Weighted Average Grant Date Fair Value | |
Non-vested restricted shares, beginning balance (in dollars per share) | $ / shares | $ 43.73 |
Granted (in dollars per share) | $ / shares | 86.49 |
Vested (in dollars per share) | $ / shares | 47.34 |
Canceled/forfeited (in dollars per share) | $ / shares | 39.13 |
Non-vested restricted shares, ending balance (in dollars per share) | $ / shares | $ 47.81 |
Restricted Stock Units | |
Restricted Shares | |
Non-vested restricted shares, beginning balance (in shares) | 1,300 |
Non-vested restricted shares, ending balance (in shares) | 2,150 |
Stock-Based Compensation and Other Employee Benefit Plans - ESPP (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Stock-Based Compensation and Other Employee Benefit Plans [Line Items] | ||||
Common shares issued (in shares) | 31,888 | 20,191 | 56,625 | 39,033 |
Employee Stock Purchase Plans | ||||
Stock-Based Compensation and Other Employee Benefit Plans [Line Items] | ||||
ESPP purchase price, percent | 85.00% | |||
Cash proceeds | $ 1.8 | $ 1.8 | $ 3.6 | $ 3.2 |
Compensation expense | $ 0.3 | $ 0.2 | $ 0.7 | $ 0.5 |
Equity (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Equity, Treasury Stock [Line Items] | |||||
Treasury stock acquired (in shares) | 936,000 | 0 | 1,124,000 | 0 | |
Treasury stock acquired, value | $ 67,500,000 | $ 81,291,000 | |||
Treasury shares reissued (in shares) | 100,000 | ||||
Treasury shares reissued | $ 4,300,000 | ||||
December 2018 Share Repurchase Program | |||||
Equity, Treasury Stock [Line Items] | |||||
Treasury stock acquired (in shares) | 100,000 | ||||
Treasury stock acquired, value | $ 8,600,000 | ||||
Share repurchase program, amount authorized, value | 100,000,000 | $ 100,000,000 | |||
March 2020 Share Repurchase Program | |||||
Equity, Treasury Stock [Line Items] | |||||
Treasury stock acquired (in shares) | 1,000,000 | ||||
Treasury stock acquired, value | $ 72,700,000 | ||||
Share repurchase program, amount authorized, value | 150,000,000 | 150,000,000 | |||
Stock repurchase program, remaining authorized repurchase amount | $ 77,300,000 | $ 77,300,000 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Consolidated effective tax rate, percent | 10.90% | 26.30% | 37.40% | 28.40% |
Tax benefit (expense), share-based payment arrangement | $ 1.0 | $ (2.3) | ||
Tax benefit (expense), other adjustments | $ 2.0 |
Segments and Related Information - Reconciliation of Consolidated Income before Income Taxes to EBITDA (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
EBITDA Reconciliation: | ||||
Income (loss) before income taxes | $ 18,247 | $ 102,827 | $ (29,861) | $ 198,256 |
Interest expense, net | 19,387 | 13,829 | 35,428 | 26,288 |
Depreciation | 87,001 | 87,501 | 172,195 | 166,766 |
Amortization of intangible assets | 27,673 | 19,923 | 53,263 | 31,170 |
Consolidated EBITDA | $ 152,300 | $ 224,100 | $ 231,000 | $ 422,500 |
Segments and Related Information - Significant Customers - Narrative (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2021 |
|
Revenue Benchmark | Enbridge, Inc. | Customer Concentration Risk | ||
Segments and Related Information [Line Items] | ||
Concentration risk, percentage of total | 12.00% | 18.00% |
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
---|---|---|---|
Loss Contingencies [Line Items] | |||
Other current assets | $ 154,108 | $ 81,884 | |
Third Quarter Settlement | Settled Litigation | |||
Loss Contingencies [Line Items] | |||
Other current assets | $ 12,000 | $ 25,000 |
Commitments and Contingencies - Concentrations of Risk - Narrative (Details) - customer |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Concentration Risk [Line Items] | ||||
Number of customers | 920 | |||
Revenue | Customer Concentration Risk | Ten Largest Customers | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage of total | 42.00% | 53.00% | 43.00% | 58.00% |
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