Related Party Transactions

3 Months Ended

Mar. 31, 2024

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 March 31, 2024 and 2023, such payments to related party entities totaled approximately $10.3 million and $16.1 million, respectively. Payables associated with such arrangements totaled approximately $1.2 million and $2.7 million as of March 31, 2024 and December 31, 2023, respectively. Revenue from such related party arrangements totaled approximately $4.4 million and $2.2 million for the three month periods ended March 31, 2024 and 2023, respectively. As of March 31, 2024, accounts receivable, net, less deferred revenue related to these arrangements totaled a receivable of approximately $3.2 million, and as of December 31, 2023, totaled a liability of approximately $0.4 million.

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 month periods ended March 31, 2024 and 2023, MasTec paid CCI approximately $5.8 million and $1.0 million, respectively, for such equipment, supply and servicing expenses, and related amounts payable totaled approximately $1.3 million and $4.6 million as of March 31, 2024 and December 31, 2023, respectively. The Company has also rented equipment to CCI.

MasTec has a subcontracting arrangement with an entity for the performance of construction services, the minority owners of which include an entity controlled by Jorge Mas and José R. Mas, along with two members of management of a MasTec subsidiary. For the three month periods ended March 31, 2024 and 2023, MasTec incurred subcontracting expenses in connection with this arrangement of approximately $3.7 million and $0.1 million, respectively. Related amounts payable totaled approximately $1.5 million and $3.1 million as of March 31, 2024 and December 31, 2023, respectively.

MasTec has an aircraft leasing arrangement with an entity that is owned by Jorge Mas, under which a new leasing agreement was entered into in December of 2023. For the three month periods ended March 31, 2024 and 2023, MasTec paid approximately $1.6 million and $0.7 million, respectively, related to this leasing arrangement. As of March 31, 2024, there were no amounts payable related to this arrangement, and as of December 31, 2023, related amounts payable totaled approximately $0.2 million.

MasTec performs construction services on behalf of a professional Miami soccer franchise (the “Franchise”) in which Jorge Mas and José R. Mas are majority owners. Construction services include, and have included, the construction of a soccer facility and stadium as well as wireless infrastructure services. In the third quarter of 2023, construction services related to site preparation for a new soccer complex began. For the three month periods ended March 31, 2024 and 2023, revenue under these arrangements totaled approximately $5.0 million and $0.1 million, respectively, and related amounts receivable totaled approximately $4.9 million and $4.1 million as of March 31, 2024 and December 31, 2023, respectively. Payments for other expenses related to the Franchise totaled approximately $0.2 million and $0.4 million for the three month periods ended March 31, 2024 and 2023, respectively, for which there were no amounts outstanding as of either March 31, 2024 or December 31, 2023.

MasTec has a subcontracting arrangement to perform construction services for an entity, in which José R. Mas previously held a minority interest. On January 1, 2024, MasTec acquired José R. Mas’ interest in this entity for approximately $0.7 million.

From time to time, the Company pays amounts on behalf of or to the former owners of acquired businesses, which, under the provisions of the related purchase agreements, the former owners are obligated to repay. The Company paid $0.2 million and $0.1 million of such amounts during the three month periods ended March 31, 2024 and 2023, respectively. Amounts receivable for such payments, which are expected to be settled under customary terms associated with the related purchase agreements, totaled approximately $2.9 million and $2.6 million as of March 31, 2024 and December 31, 2023, respectively. 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 March 31, 2024 and 2023, and related amounts receivable totaled approximately $0.2 million and $0.4 million as of March 31, 2024 and December 31, 2023, 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, including the ownership interests in two entities that the Company acquired in the second quarter of 2023, of which it sold certain minority interests to members of management of a MasTec subsidiary for $7.1 million of notes receivable in the fourth quarter of 2023. These notes, which bear interest at a rate of 5.0% per annum, and of which $5.5 million and $6.9 million was outstanding as of March 31, 2024 and December 31, 2023, respectively, are recorded within other current or long-term assets, as appropriate, in the consolidated balance sheets. For the three month period ended March 31, 2024, the Company recognized interest income of approximately $0.1 million related to these notes. Additionally, in the first quarter of 2023, the Company acquired the remaining 15% equity interests in one of its subsidiaries, which interests were previously accounted for as non-controlling interests, from two members of subsidiary management 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 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. For the three month period ended March 31, 2024, amounts paid in connection with these agreements were de minimis, and for the three month period ended March 31, 2023, no payments were made. Life insurance assets associated with these agreements totaled approximately $27.2 million as of both March 31, 2024 and December 31, 2023.