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Related Party Transactions
12 Months Ended
Dec. 31, 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 years ended December 31, 2022, 2021 and 2020, such payments to related party entities totaled approximately $35.0 million, $81.2 million and $80.9 million, respectively. Payables associated with such arrangements totaled approximately $2.6 million and $0.6 million as of December 31, 2022 and 2021, respectively. Revenue from such related party arrangements totaled approximately $10.4 million, $4.2 million and $4.1 million for the years ended December 31, 2022, 2021 and 2020, respectively, and related amounts receivable totaled approximately $3.2 million and $0.4 million as of December 31, 2022 and 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. MasTec paid CCI $4.0 million and $23.2 million for the years ended December 31, 2022 and 2021, respectively, and paid $6.8 million, net of rebates, for the year ended December 31, 2020 related to this activity. Amounts payable to CCI totaled approximately $0.6 million and $0.8 million as of December 31, 2022 and 2021, respectively. The Company has also rented equipment to CCI. Revenue from equipment rentals to CCI totaled approximately $0.3 million and $0.1 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, related receivables were de minimis, and as of December 31, 2021, there were no related receivables.
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 years ended December 31, 2022, 2021 and 2020, MasTec incurred subcontracting expenses in connection with this arrangement of approximately $0.2 million, $90.3 million and $1.9 million, respectively. As of December 31, 2022, related amounts payable were de minimis, and as of December 31, 2021, related amounts payable totaled approximately $0.5 million.
MasTec has a leasing arrangement for an aircraft that is owned by an entity that Jorge Mas owns. MasTec paid approximately $2.6 million in each of the years ended December 31, 2022, 2021 and 2020 related to this leasing arrangement.
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 totaled $0.5 million, $0.6 million and $0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, for which there were no amounts outstanding as of either December 31, 2022 or 2021.
In 2021, MasTec entered into 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 year ended December 31, 2022, revenue recognized by MasTec under this arrangement totaled approximately $128.4 million, and as of December 31, 2022, related amounts
receivable totaled approximately $42.0 million. No services were performed under this arrangement in 2021. MasTec pays a management fee to this entity in connection with the subcontracting arrangement, under which MasTec incurred approximately $1.5 million for the year ended December 31, 2022. As of December 31, 2022, related payables totaled approximately $0.3 million.
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 $1.1 million, $1.2 million and $1.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, related amounts receivable were de minimis, and as of December 31, 2021, related amounts receivable totaled approximately $0.8 million.
From time to time, the Company advances amounts to the former owners of acquired businesses. Such advances totaled approximately $1.5 million for both the years ended December 31, 2022 and 2021, and amounts receivable for such advances totaled approximately $2.0 million and $1.5 million as of December 31, 2022 and 2021, respectively. In addition, the Company has a subcontracting arrangement with an entity in which it has a 25% interest. The Company’s interest in this entity is accounted for as an equity method investment. For the year ended December 31, 2022, the Company made equity contributions to this entity of approximately $0.9 million. As of December 31, 2022 and 2021, the Company’s net investment in this entity was a liability of approximately $0.2 million and $1.6 million, respectively, which net amounts as of both December 31, 2022 and 2021, include 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. For both the years ended December 31, 2022 and 2021, approximately $0.8 million, of income was recognized in connection with these arrangements, and $0.9 million of income was recognized for the year ended December 31, 2020. As of both December 31, 2022 and 2021, related amounts receivable totaled $0.4 million. The Company advanced $1.2 million in 2020 on behalf of this entity, which amount was collected as of December 31, 2020.
One of the Company’s subsidiaries has a subcontracting arrangement with a contractual joint venture in which it holds a 35% undivided interest, for which the related project was fully complete as of December 31, 2022. Outstanding performance guarantees on behalf of this contractual joint venture totaled Canadian $9.7 million as of both December 31, 2022 and 2021, or approximately $7.1 million and $7.7 million, respectively.
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 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. In the first quarter of 2023, the Company acquired the remaining 15% equity interests of this entity for $10.0 million in cash, plus 120,000 shares of MasTec common stock, valued at approximately $11.6 million.
Split Dollar Agreements
MasTec has an amended and restated split dollar life insurance agreement with (i) Jorge Mas, and José R. Mas and Juan Carlos Mas, as trustees of the Jorge Mas Irrevocable Trust (the “Jorge Mas trust”); and (ii) José R. Mas, and Jorge Mas, Juan Carlos Mas and Patricia Mas, as trustees of the José Ramon Mas Irrevocable Trust (the “José R. Mas trust”). The Company is the sole owner of each of the policies and is designated as the named fiduciary under each split dollar agreement, and the policies subject to the split dollar agreement may not be surrendered without the express written consent of the applicable trust. The total maximum face amount of the insurance policies subject to the split dollar agreements is capped at $200 million in the case of Jorge Mas and $75 million in the case of José R. Mas. Upon the death of the applicable executive or the survivor of the applicable executive and his wife, the Company is entitled to receive a portion of the death benefit under the policy equal to the greater of (i) premiums paid by the Company on the policy and (ii) the then cash value of the policy (excluding surrender charges or other similar charges or reductions) immediately before the triggering death. In addition, each executive is entitled to purchase the applicable policy under certain events, including a change in control of the Company.
The Company paid approximately $1.1 million in each of the years ended December 31, 2022, 2021 and 2020 in connection with the split dollar agreements for Jorge Mas, and paid approximately $0.7 million in each of the years ended December 31, 2022, 2021 and 2020 in connection with the split dollar agreements for José R. Mas. Life insurance assets associated with these agreements, which amounts are included within other long-term assets, totaled approximately $25.8 million and $24.0 million as of December 31, 2022 and 2021, respectively.