MASTEC INC

Previous wording

We have experienced, and may continue to experience, direct and indirect negative effects on our business and operations from economic, market and regulatory conditions. While the Federal Reserve decreased the Federal Funds rate to a range of 4.75% to 5.00% effective September 19, 2024, there continues to be uncertainty in the changing market and economic conditions, including the possibility of additional measures that could be taken by the Federal Reserve and other government agencies related to the overall macroeconomic environment. We expect the remainder of 2024 to continue to be a dynamic macroeconomic environment, with elevated market interest rates and continuing levels of cost inflation and potential market volatility, any or all of which could adversely affect our costs and customer demand. We will continue to monitor the market and economic conditions. The extent to which general economic, market and regulatory conditions could affect our business, operations and financial results is uncertain as it will depend upon numerous evolving factors that we may not be able to accurately predict, and, therefore, any future impacts on our business, financial condition and/or results of operations cannot be quantified or predicted with specificity. For additional information regarding the effects of general economic, market and regulatory conditions, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2023 Form 10-K.

Current wording

In addition, the impact of other trade policies, immigration policies, reduced federal government support for renewable power and other infrastructure projects, and increased federal support for oil and gas production may have both negative and positive effects on the demand for our services, capital costs, labor costs and availability and costs of our operations. We will continue to monitor the market and economic conditions. The extent to which general economic, market, political and regulatory conditions could affect our business, operations and financial results is uncertain as it will depend upon numerous evolving factors that we may not be able to accurately predict, and, therefore, any future impacts on our business, financial condition and/or results of operations cannot be quantified or predicted with specificity. For additional information regarding the effects of general economic, market and regulatory conditions, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2024 Form 10-K.

Previous wording

We are a leading infrastructure construction company operating mainly throughout North America across a range of industries. Our primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and other infrastructure, such as: wireless, wireline/fiber and customer fulfillment activities; power delivery infrastructure, including transmission, distribution, environmental planning and compliance; power generation infrastructure, primarily from clean energy and renewable sources; pipeline infrastructure, including for natural gas, water and carbon capture sequestration pipelines and pipeline integrity services; heavy civil and industrial infrastructure, including roads, bridges and rail; and environmental remediation services. Our customers are primarily in these industries. Including our predecessor companies, we have been in business for approximately 95 years. For the twelve month period ended September 30, 2024, we had an average of approxi mately 33,000 employees and 800 locations. Weoffer our services under the MasTec®and other service marks and we are ranked among the top five contractors within Engineering News-Record’s Top 400 Contractors.

Current wording

We are a leading infrastructure construction company operating mainly throughout North America across a range of industries. Our primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and other infrastructure, such as: wireless, wireline/fiber and customer fulfillment activities; power delivery infrastructure, including transmission, distribution, grid hardening and modernization, environmental planning and compliance; power generation infrastructure, primarily from clean energy and renewable sources; pipeline infrastructure, including for natural gas, water and carbon capture sequestration pipelines and pipeline integrity services;

Previous wording

We provide our services to a diversified base of customers and a significant portion of our services are provided under master service and other service agreements, which are generally multi-year agreements. The remainder of our work is generated pursuant to contracts for specific projects or jobs that require the construction or installation of an entire infrastructure system or specified units within an infrastructure system.

Current wording

We provide integrated, solutions-based services to a diversified base of customers and a significant portion of our services are provided under master service and other service agreements, which are generally multi-year agreements. The remainder of our work is generated pursuant to contracts for specific projects or jobs that require the construction or installation of an entire infrastructure system or specified units within an infrastructure system.

Previous wording

We manage our operations under five operating segments, which represent our five reportable segments: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Oil and Gas; and (5) Other. This structure is generally focused on broad end-user markets for our labor-based construction services. See Note 11 – Segments and Related Information and Note 12 – Commitments and Contingencies in the notes to the consolidated financial statements, which are incorporated by reference, for additional information regarding our segment reporting and significant customer concentrations.

Current wording

We manage our operations under five operating segments, which represent our five reportable segments: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Pipeline Infrastructure and (5) Other. This structure is generally focused on broad end-user markets for our labor-based construction services.

Previous wording

Estimated backlog represents the amount of revenue we expect to realize over the next 18 months from future work on uncompleted construction contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. Our estimated backlog also includes amounts under master service and other service agreements and our proportionate share of estimated revenue from proportionately consolidated non-controlled contractual joint ventures. Estimated backlog for work under master service and other service agreements is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. Based on current expectations of our customers’ requirements, we anticipate that we will realize approximately 25% of our estimated September 30, 2024 backlog in 2024. The following table presents 18-month estimated backlog by reportable segment as of the dates indicated:

Current wording

Estimated backlog represents the amount of revenue we expect to realize over the next 18 months from future work on uncompleted construction contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. Our estimated backlog also includes amounts under master service and other service agreements and our proportionate share of estimated revenue from proportionately consolidated non-controlled contractual joint ventures. Estimated backlog for work under master service and other service agreements is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. Based on current expectations of our customers’ requirements, we anticipate that we will realize approximately 60% of our estimated March 31, 2025 backlog in 2025. The following table presents 18-month estimated backlog by reportable segment as of the periods indicated:

Previous wording

As of September 30, 2024, 54% of our backlog is estimated to be attributable to amounts under master service or other service agreements, pursuant to which our customers are not contractually committed to purchase a minimum amount of services. Most of these agreements can be canceled on short or no advance notice. Timing of revenue for construction and installation projects included in our backlog can be subject to change as a result of customer, regulatory or other delays or cancellations, including from factors relative to “General Economic, Market and Regulatory Conditions” mentioned above. These effects, among others, could cause estimated revenue to be realized in periods later than originally expected, or not at all. We occasionally experience postponements, cancellations and reductions in expected future work due to these effects and/or other factors. There can be no assurance as to our customers’ requirements or that actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

Current wording

As of March 31, 2025, 51% of our backlog is estimated to be attributable to amounts under master service or other service agreements, pursuant to which our customers are not contractually committed to purchase a minimum amount of services. Most of these agreements can be canceled on short or no advance notice. Timing of revenue for construction and installation projects included in our backlog can be subject to change as a result of customer, regulatory or other delays or cancellations, including from factors relative to “General Economic, Market and Regulatory Conditions” mentioned above. These effects, among others, could cause estimated revenue to be realized in periods later than originally expected, or not at all. We occasionally experience postponements, cancellations and reductions in expected future work due to these effects and/or other factors. There can be no assurance as to our customers’ requirements or that actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

Previous wording

Backlog is a common measurement used in our industry. Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Backlog differs from the amount of our remaining performance obligations, which are described in Note 1 – Business, Basis of Presentation and Significant Accounting Policies in the notes to the consolidated financial statements, which is incorporated by reference. As of September 30, 2024, total 18-month backlog differed from the amount of our remaining performance obligations due primarily to the inclusion of $7.4 billion of estimated future revenue under master service and other service agreements within our backlog estimates, as described above, and the exclusion of approximately $3.0 billion of remaining performance obligations and estimated future revenue under master service and other service agreements in excess of 18 months, which amount is not included in the backlog estimates above. Backlog expected to be realized in 2024 differs from the amount of remaining performance obligations expected to be recognized for the same period due primarily to the inclusion of approximately $0.8 billion of estimated future revenue under master service and other service agreements included within our backlog estimate, which is not included within our remaining performance obligations for the same period.

Current wording

Backlog is a common measurement used in our industry. Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Backlog differs from the amount of our remaining performance obligations, which are described in Note 1 – Business, Basis of Presentation and Significant Accounting Policies in the notes to the consolidated financial statements, which is incorporated by reference. As of March 31, 2025, total 18-month backlog differed from the amount of our remaining performance obligations due primarily to the inclusion of $7.8 billion of estimated future revenue under master service and other service agreements within our backlog estimates, as described above, and the exclusion of approximately $2.9 billion of remaining performance obligations and estimated future revenue under master service and other service agreements in excess of 18 months, which amount is not included in the backlog estimates above. Backlog expected to be realized in 2025 differs from the amount of remaining performance obligations expected to be recognized for the same period due primarily to the inclusion of approximately $2.7 billion of estimated future revenue under master service and other service agreements included within our backlog estimate, which is not included within our remaining performance obligations for the same period.

Previous wording

We closely monitor the effects of changes in economic, industry and market conditions on our customers, which can affect demand for our customers’ products and services and can increase or decrease our customers’ planned capital and maintenance budgets in certain end-markets. Any of these factors and effects, as well as mergers and acquisitions or other business transactions among the customers we serve, could affect demand for our services, or the cost to provide such services and our profitability. For additional information regarding the potential effects of economic, industry and market factors on our business, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2023 Form 10-K.

Current wording

We closely monitor the effects of changes in economic, industry and market conditions on our customers, including the potential effects of the factors discussed above in “General Economic, Market and Regulatory Conditions,” which can affect demand for our customers’ products and services and can increase or decrease our customers’ planned capital and maintenance budgets in certain end-markets. Any of these factors and effects, as well as mergers and acquisitions or other business transactions among the customers we serve, could affect demand for our services, or the cost to provide such services and our profitability. For additional information regarding the potential effects of economic, industry and market factors on our business, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2024 Form 10-K.

Previous wording

Our revenue and results of operations are cyclical and can be subject to seasonal and other variations. For additional information regarding the effects of seasonality and the cyclical nature of our business, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2023 Form 10-K.

Current wording

Our revenue and results of operations can be subject to seasonal and other variations. For additional information regarding the effects of seasonality and the cyclical nature of our business, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2024 Form 10-K.

Previous wording

In connection with the restructuring in the first quarter of 2024 of the reporting units in the Power Delivery segment, management performed a quantitative assessment of the goodwill associated with each of the five reporting units of the Power Delivery operating segment. For additional details of the restructuring and the related assessment, refer to Note 3 – Acquisitions, Goodwill and Other Intangible Assets, Net, in the notes to the consolidated financial statements, which is incorporated by reference.

Current wording

In connection with the changes to our Communications segment and Power Delivery segment structures, management performed a quantitative assessment of the goodwill associated with each of the impacted reporting units within the Communications and Power Delivery operating segments, respectively. For additional details of the changes and the related assessment, refer to Note 3 – Acquisitions, Goodwill and Other Intangible Assets, Net, in the notes to the consolidated financial statements, which is incorporated by reference.

Previous wording

Other than the update to the reporting unit structure of the Power Delivery operating segment and the change in the estimated useful lives of certain machinery and equipment, as described above, there were no material changes in our critical accounting estimates or policies during the nine month period ended September 30, 2024.

Current wording

Other than the update to the reporting unit structure of our Communications and Power Delivery operating segments as described above, there were no material changes in our critical accounting estimates or policies during the three month period ended March 31, 2025.

Previous wording

The following table, which may contain slight summation differences due to rounding, reflects our consolidated results of operations in dollar and percentage of revenue terms for the periods indicated (dollar amounts in millions). Our consolidated results of operations are not necessarily comparable from period to period due to the effect of recent acquisitions and certain other items, which are described in the comparison of results section below. In our discussions, “acquisition” results are defined as results from acquired businesses for the first twelve months following the dates of the respective acquisitions, with the balance of results for a particular item attributed to “organic” activity.

Current wording

The following table, which may contain slight summation differences due to rounding, reflects our consolidated results of operations in dollar and percentage of revenue terms for the periods indicated (dollar amounts in millions). Our consolidated results of operations are not necessarily comparable from period to period due to the effect of recent acquisitions and certain other items, as appropriate, which are described in the comparison of results section below. Unless otherwise stated, comparisons are for the quarters ended March 31, 2025 and 2024. Historical financial information for our reportable segments has been recast to conform with the changes described in Note 11 – Segments and Related Information in the notes to the consolidated financial statements, which is incorporated by reference.

Previous wording

Revenue. For the three month period ended September 30, 2024, consolidated revenue totaled $3,252 million as compared with $3,257 million for the same period in 2023, a decrease of approximately $5 million. Revenue in our Oil and Gas segment decreased by approximately $174 million, or 26%, whereas revenue increased in our Communications segment by approximately $103 million, or 12%, in our Power Delivery segment by approximately $47 million, or 7%, and in our Clean Energy and Infrastructure segment by approximately$39 million, or 4%. See below for details of revenue by segment.

Current wording

Revenue. On a consolidated basis, revenue increased by $161 million driven by our segment results as follows: revenue increased in our Communications segment by approximately $175 million, or 35%, in our Clean Energy and Infrastructure segment by approximately $162 million, or 22%, and in our Power Delivery segment by approximately $102 million, or 13%, and decreased in our Pipeline Infrastructure segment by approximately $277 million, or 44%. See below for details of revenue by segment.

Previous wording

Costs of revenue, excluding depreciation and amortization. Costs of revenue, excluding depreciation and amortization, increased by approximately $8 million, or 0.1%, to $7,709 million for the nine month period ended September 30, 2024 from $7,701 million for the same period in 2023. Higher levels of revenue contributed an increase of $163 million in costs of revenue, excluding depreciation and amortization, whereas improved productivity resulted in a decrease of approximately $155 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue decreased by approximately 170 basis points to 86.6% of revenue for the nine month period ended September 30, 2024 from 88.4% of revenue for the same period in 2023. The basis point decrease was due to a combination of improved project efficiencies and project mix, primarily within our Oil and Gas and Clean Energy and Infrastructure segments, and the positive effects of certain project close-outs, offset, in part, by reduced productivity from the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work. See “Analysis of EBITDA by Segment” below for discussion of operating capacity effects by segment.

Current wording

Costs of revenue, excluding depreciation and amortization. Higher levels of revenue contributed an increase of $142 million in costs of revenue, excluding depreciation and amortization, and reduced productivity contributed an increase of approximately $14 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue increased by approximately 50 basis points to 89.1% of revenue for the three month period ended March 31, 2025 from 88.6% of revenue for the same period in 2024. The basis point increase was due to a combination of project mix and reduced project efficiencies, primarily within our Power Delivery and Pipeline Infrastructure segments, largely offset by improved productivity within our Clean Energy and Infrastructure segment. See “Analysis of Revenue and EBITDA by Segment” below for discussion of operating capacity effects by segment.

Previous wording

Depreciation. Depreciation was $80 million, or 2.5% of revenue, for the three month period ended September 30, 2024, as compared with $115 million, or 3.5% of revenue, for the same period in 2023, a decrease of approximately $35 million, or 30%. As a percentage of revenue, depreciation decreased by approximately 110 basis points, due primarily to a net reduction of approximately $18 million related to a change in the depreciable lives of certain machinery and equipment to better align the respective assets’ lives with their expected useful lives, and, in part, from lower levels of property and equipment, net.

Current wording

Depreciation. As a percentage of revenue, depreciation decreased by approximately 130 basis points, due primarily to a net reduction related to a change in the depreciable lives of certain machinery and equipment during 2024 to better align the respective assets’ lives with their expected useful lives, offset, in part, by higher capital expenditures and the replacement of older machinery and equipment.

Previous wording

Amortization of intangible assets. Amortization of intangible assets was $34 million, or 1.1% of revenue, for the three month period ended September 30, 2024, as compared with $42 million, or 1.3% of revenue, for the same period in 2023, a decrease of approximately $8 million, or 19%, due to a combination of the effects of timing of amortization for certain assets and the completion of amortization for certain intangible assets associated with prior year acquisitions. As a percentage of revenue, amortization of intangible assets decreased by approximately 20 basis points as compared with the same period in 2023.

Current wording

Amortization of intangible assets. The decrease in amortization of intangible assets was due to a combination of the effects of timing of amortization for certain assets and the completion of amortization for certain intangible assets associated with prior year acquisitions. As a percentage of revenue, amortization of intangible assets decreased by approximately 10 basis points as compared with the same period in 2024 due, in part, to higher levels of revenue.

Previous wording

General and administrative expenses. General and administrative expenses totaled $501 million, or 5.6% of revenue, for the nine month period ended September 30, 2024, as compared with $521 million, or 6.0% of revenue, for the same period in 2023, a decrease of approximately $19 million, or 4%. The decrease in general and administrative expenses was primarily due to a $53 million reduction in acquisition and integration costs, an increase in gains on sales of assets, net, and a decrease in various administrative costs, including information technology expenses, offset, in part, by an increase in compensation expense, the provision for credit losses, an increase in other administrative expenses, and the effects of timing of ordinary course legal matters. Overall, general and administrative expenses decreased by approximately 30 basis points as a percentage of revenue for the nine month period ended September 30, 2024 as compared with the same period in 2023.

Current wording

General and administrative expenses. The increase in general and administrative expenses was primarily due to the effects of timing of ordinary course legal matters which were largely offset by reductions in the provision for credit losses and other administrative costs. Overall, general and administrative expenses decreased by approximately 30 basis points as a percentage of revenue for the three month period ended March 31, 2025 as compared with the same period in 2024.

Previous wording

Equity in earnings of unconsolidated affiliates, net. For the nine month periods ended September 30, 2024 and 2023, equity in earnings from unconsolidated affiliates, net, totaled approximately $22 million and $23 million, respectively, and related primarily to our investments in the Waha JVs.

Current wording

Equity in earnings of unconsolidated affiliates, net. For the three month periods ended March 31, 2025 and 2024, equity in earnings from unconsolidated affiliates, net, totaled approximately $10 million and $9 million, respectively, and related primarily to our investments in the Waha JVs.

Previous wording

Other expense (income), net. Other expense, net, was $3 million for the three month period ended September 30, 2024, as compared with $17 million of other income, net for the same period in 2023. For the three month period ended September 30, 2024, other expense, net, included approximately $2 million of expense, net, from changes to estimated Earn-out accruals and approximately $2 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business, offset, in part, by other miscellaneous income, net, including from legal and other settlements. For the three month period ended September 30, 2023, other income, net, included approximately $5 million of income, net, from changes to estimated Earn-out accruals, and $7 million of other miscellaneous income, net, including from insurance and other settlements, $7 million of income from changes in the fair value of additional contingent payments to the former owners of an acquired business and approximately $3 million of impairment losses on an investment.

Current wording

Other (income) expense, net. For the three month period ended March 31, 2025, other income, net, included approximately $2 million other miscellaneous income, net and approximately $1 million of income, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business, offset, in part, by approximately, $1 million of expense, from changes to estimated Earn-out accruals. For the three month period ended March 31, 2024, other expense, net, included approximately $6 million of income, net, from changes to estimated Earn-out accruals, approximately $9 million of asset impairment and other valuation adjustments related to certain fixed assets and notes receivable, approximately $1 million of other miscellaneous income, net and approximately $2 million of expense from changes in the fair value of additional contingent payments to the former owners of an acquired business.

Previous wording

Provision for income taxes. Income tax expense was $32 million for the three month period ended September 30, 2024, as compared with $8 million for the same period in 2023. Pre-tax income totaled $137 million for the three month period ended September 30, 2024, as compared with $23 million for the same period in 2023. For the three month period ended September 30, 2024, our effective tax rate was 23.0% as compared with 33.1% for the same period in 2023. Our effective tax rate in the third quarter of 2024 included the effect of a lower state income tax rate partially offset by an increase in non-deductible expenses whereas the same period in 2023 included a benefit of approximately $4 million related to certain prior period tax return adjustments.

Current wording

Benefit from income taxes. For the three month period ended March 31, 2025, our effective tax rate was (37.8)% as compared with 24.3% for the same period in 2024. Our effective tax rate for the three month period ended March 31, 2025, included an income tax benefit primarily due to the reversal of uncertain tax position liabilities related to a state audit, offset, in part, by pre-tax income, whereas the same period in 2024 included the effect of an increase in non-deductible expenses.

Previous wording

Net income attributable to non-controlling interests. Net income attributable to non-controlling interests was $10 million for the three month period ended September 30, 2024, as compared with $1 million for the same period in 2023. The increase was primarily attributable to the results of certain acquisitions with minority interest holders.

Current wording

Net income attributable to non-controlling interests. Net income attributable to non-controlling interests was $2 million for the three month period ended March 31, 2025, as compared with $7 million for the same period in 2024. The decrease was primarily attributable to the decrease in activity of certain entities with minority interest holders.

Previous wording

We review our operating results by reportable segment. See Note 11 – Segments and Related Information in the notes to the consolidated financial statements, which is incorporated by reference. Our reportable segments are: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Oil and Gas; and (5) Other. Management’s review of segment results includes analyses of trends in revenue, EBITDA and EBITDA margin. EBITDA for segment reporting purposes is calculated consistently with our consolidated EBITDA calculation. See the discussion of our non-U.S. GAAP financial measures, including certain adjusted non-U.S. GAAP measures, as described below, following the comparison of results discussion. The following table presents revenue, EBITDA and EBITDA margin by segment for the periods indicated (dollar amounts in millions):

Current wording

We review our operating results by reportable segment. See Note 11 – Segments and Related Information in the notes to the consolidated financial statements, which is incorporated by reference. Our reportable segments are: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Pipeline Infrastructure and (5) Other. Management’s review of segment results includes analyses of trends in revenue, EBITDA and EBITDA margin. EBITDA for segment reporting purposes is calculated consistently with our consolidated EBITDA calculation. EBITDA margin is calculated by dividing EBITDA by revenue for the same period. See the discussion of our non-U.S. GAAP financial measures, including certain adjusted non-U.S. GAAP measures, as described below, following the comparison of results discussion. Historical financial information for our reportable segments has been recast to conform with the changes described in Note 11 – Segments and Related Information in the notes to the consolidated financial statements, which is incorporated by reference. The following table, which may contain slight summation differences due to rounding, presents revenue, EBITDA and EBITDA margin by segment for the periods indicated (dollar amounts in millions):

Previous wording

Communications Segment. Communications revenue was $927 million for the three month period ended September 30, 2024 as compared with $824 million for the same period in 2023, an increase of $103 million, or 12%. The increase in revenue was driven primarily by higher levels of wireless, wireline and utility project activity. These increases were offset, in part, by a decrease in our install-to-the-home activities due, in part, to changes in consumer behavior resulting in lower demand.

Current wording

Revenue. The increase in revenue was driven primarily by higher levels of wireless and wireline project activity, offset, in part, by a decrease in our install-to-the-home project activity due, in part, to changes in consumer behavior resulting in lower demand.

Previous wording

Other Segment. EBITDA from Other businesses totaled approximately $7 million and $4 million for the three month periods ended September 30, 2024 and 2023, respectively. EBITDA from Other businesses relates primarily to equity in earnings from our investments in the Waha JVs, offset, in part, by losses from other businesses and investments.

Current wording

EBITDA. EBITDA from Other businesses relates primarily to equity in earnings from our investments in the Waha JVs.

Previous wording

Corporate. Corporate EBITDA was negative $58 million for the three month period ended September 30, 2024, as compared with EBITDA of negative $31 million for the same period in 2023, for a decrease in EBITDA of approximately $27 million. For the three month period ended September 30, 2024, Corporate EBITDA included approximately $2 million of expense, net, from changes to estimated Earn-out accruals and approximately $2 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business. For the three month period ended September 30, 2023, Corporate EBITDA included approximately $5 million of income, net from changes to estimated Earn-out accruals and $7 million of income from changes in the fair value of additional contingent payments to former owners of an acquired business. Corporate expenses for the three month period ended September 30, 2024 not related to the above-described items increased by approximately $11 million as compared with the same period in 2023, due primarily to the effects of timing of ordinary course legal and other settlement matters and other administrative expenses.

Current wording

EBITDA. For the three month period ended March 31, 2025, Corporate EBITDA included approximately $1 million of expense, net, from changes to estimated Earn-out accruals and approximately $1 million of income, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business. For the three month period ended March 31, 2024, Corporate EBITDA included approximately $6 million of income, net, from changes to estimated Earn-out accruals, $2 million of expense from changes in the fair value of additional contingent payments to the former owners of an acquired business and the negative effect of a $2 million other valuation adjustment. Corporate expenses for the three month period ended March 31, 2025 not related to the above-described items, which were generally flat as compared with the same period in 2024, included the effects of timing of ordinary course legal and other settlement matters, offset, in part, by a decrease in information technology expenses.

Previous wording

As appropriate, we supplement our reported U.S. GAAP financial information with certain non-U.S. GAAP financial measures, including earnings before interest, income taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA (“Adjusted EBITDA”), adjusted net income (“Adjusted Net Income”), adjusted net income attributable to MasTec, Inc. (“Adjusted Net Income Attributable to MasTec, Inc.”) and adjusted diluted earnings per share (“Adjusted Diluted Earnings Per Share”). These “adjusted” non-U.S. GAAP measures exclude, as applicable to the respective periods, non-cash stock-based compensation expense; the loss on debt extinguishment; acquisition and integration costs related to certain acquisition activity; and fair value gains or losses, net, on an investment; and, for Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share, amortization of intangible assets and the tax effects of the adjusted items. These definitions of EBITDA and Adjusted EBITDA are not the same as in our Credit Facility or in the indenture governing our senior notes; therefore, EBITDA and Adjusted EBITDA as presented in this discussion should not be used for purposes of determining our compliance with the covenants contained in our debt instruments.

Current wording

As appropriate, we supplement our reported U.S. GAAP financial information with certain non-U.S. GAAP financial measures, including earnings before interest, income taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA (“Adjusted EBITDA”), adjusted net income (loss) (“Adjusted Net Income (Loss)”), adjusted net income (loss) attributable to MasTec, Inc. (“Adjusted Net Income (Loss) Attributable to MasTec, Inc.”) and adjusted diluted earnings (loss) per share (“Adjusted Diluted Earnings (Loss) Per Share”). These “adjusted” non-U.S. GAAP measures exclude, as applicable to the respective periods, non-cash stock-based compensation expense and changes in fair value of acquisition-related contingent items, as more fully described below; and, for Adjusted Net Income (Loss), Adjusted Net Income (Loss) Attributable to MasTec, Inc. and Adjusted Diluted Earnings (Loss) Per Share, amortization of intangible assets and the tax effects of the adjusted items. These definitions of EBITDA and Adjusted EBITDA are not the same as in our Credit Facility or in the indenture governing our senior notes; therefore, EBITDA and Adjusted EBITDA as presented in this discussion should not be used for purposes of determining our compliance with the covenants contained in our debt instruments.

Previous wording

We use EBITDA and Adjusted EBITDA, as well as Adjusted Net Income, Adjusted Net Income Attributable to MasTec Inc. and Adjusted Diluted Earnings Per Share, to evaluate our performance, both internally and as compared with our peers, because these measures exclude certain items that may not be indicative of our core, or underlying, operating results, as well as items that can vary widely across different industries or among companies within the same industry. We believe that these adjusted measures provide a baseline for analyzing trends in our underlying business. We also use these adjusted measures to allocate resources. Non-cash stock-based compensation expense can be subject to volatility from changes in the market price per share of our common stock or variations in the value and number of shares granted, and amortization of intangible assets is subject to acquisition activity, which varies from period to period. In 2021, we initiated a significant transformation of our end-market business operations to focus on the nation’s transition to low-carbon energy sources and position the Company for expected future opportunities. This transformation included significant acquisition activity to expand our scale and capacity in renewable energy, power delivery, heavy civil and telecommunications services, and resulted in significant acquisition and integration costs. Due to the extent of the acquisition costs related to this acquisition activity and the extent of the efforts that were required to integrate these acquisitions, we have excluded acquisition and integration costs related to this acquisition activity in our computation of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share. These acquisition and integration activities were completed in the fourth quarter of 2023.

Current wording

We use EBITDA and Adjusted EBITDA, as well as Adjusted Net Income (Loss), Adjusted Net Income (Loss) Attributable to MasTec, Inc. and Adjusted Diluted Earnings (Loss) Per Share, to evaluate our performance, both internally and as compared with our peers, because these measures exclude certain items that may not be indicative of our core, or underlying, operating results, as well as items that can vary widely across different industries or among companies within the same industry. We believe that these adjusted measures provide a baseline for analyzing trends in our underlying business. We also use these adjusted measures to allocate resources.

Previous wording

We exclude intangible asset amortization from our non-U.S. GAAP financial measures due to its non-operational nature and inherent volatility, as acquisition activity varies from period to period. We believe that this presentation is common practice within our industry and improves comparability of our results with those of our peers. Note that while intangible asset amortization related to the assets of acquired entities is excluded from our non-U.S. GAAP financial measures, the revenue and all other expenses of the acquired entities are included within our non-U.S. GAAP financial measures, unless otherwise stated.

Current wording

Non-cash stock-based compensation expense can be subject to volatility from changes in the market price per share of our common stock or variations in the value and number of shares granted. We also exclude intangible asset amortization and the effects of changes in fair value of acquisition-related contingent items from our non-U.S. GAAP financial measures due to their non-operational nature and inherent volatility, as activity, including from acquisitions, varies from period to period. Note that while intangible asset amortization related to the assets of acquired entities is excluded from our non-U.S. GAAP financial measures, the revenue and all other expenses of the acquired entities are included within our non-U.S. GAAP financial measures, unless otherwise stated. Acquisition-related contingent items consist of (i) changes in fair value of acquisition-related contingent consideration, which is composed of earn-outs, that are contingent upon the achievement of reaching certain post-acquisition levels of earnings and (ii) changes in fair value of additional payments in connection with the 2021 acquisition of Henkels & McCoy Holdings, Inc. based on the fluctuation of our share price and are contingent upon the post-acquisition collections of certain receivables. We believe that this presentation is common practice within our industry and improves comparability of our results with those of our peers.

Previous wording

We believe that these non-U.S. GAAP financial measures provide meaningful information and help investors understand our financial results and assess our prospects for future performance. Because non-U.S. GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-U.S. GAAP financial measures having the same or similar names. Each company’s definitions of these adjusted measures may vary as they are not standardized and should be used together with the provided reconciliations. These financial measures should not be considered in isolation from, as substitutes for, or alternative measures of, reported net income or diluted earnings per share, and should be viewed in conjunction with the most comparable U.S. GAAP financial measures and the provided reconciliations thereto. We believe these non-U.S. GAAP financial measures, when viewed together with our U.S. GAAP results and related reconciliations, provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.

Current wording

We believe that these non-U.S. GAAP financial measures provide meaningful information and help investors understand our financial results and assess our prospects for future performance. Because non-U.S. GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-U.S. GAAP financial measures having the same or similar names. Each company’s definitions of these adjusted measures may vary as they are not standardized and should be used together with the provided reconciliations. These financial measures should not be considered in isolation from, as substitutes for, or alternative measures of, reported net income (loss) or diluted earnings (loss) per share, and should be viewed in conjunction with the most comparable U.S. GAAP financial measures and the provided reconciliations thereto. We believe these non-U.S. GAAP financial measures, when viewed together with our U.S. GAAP results and related reconciliations, provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.

Previous wording

The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA in dollar and percentage of revenue terms for the periods indicated. The tables below (dollar amounts in millions) may contain slight summation differences due to rounding.

Current wording

The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA in dollar and percentage of revenue terms for the periods indicated. The tables below (dollar amounts in millions) may contain slight summation differences due to rounding.

Previous wording

(a) Non-cash stock-based compensation expense, loss on extinguishment of debt and losses on the fair value of an investment are included within Corporate EBITDA.

Current wording

(b) Non-cash stock-based compensation expense and changes in fair value of acquisition-related contingent items are included within Corporate EBITDA.

Previous wording

The tables below, which may contain slight summation differences due to rounding, reconcile reported net income and reported diluted earnings per share, the most directly comparable U.S. GAAP financial measures, to Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share.

Current wording

The tables below, which may contain slight summation differences due to rounding, reconcile reported net income (loss) and reported diluted earnings (loss) per share, the most directly comparable U.S. GAAP financial measures, to Adjusted Net Income (Loss), Adjusted Net Income (Loss) Attributable to MasTec, Inc. and Adjusted Diluted Earnings (Loss) Per Share.

Previous wording

(a) Represents the tax effects of the adjusted items that are subject to tax, including the tax effects of non-cash stock-based compensation expense, including from share-based payment awards. Tax effects are determined based on the tax treatment of the related item, the incremental statutory tax rate of the jurisdictions pertaining to the adjustment, and their effects on pre-tax income. For the three and nine month periods ended September 30, 2024, our consolidated tax amounts were expenses, with effective tax rates, as reported, of 23.0% and 25.8%, respectively, and as adjusted, were expenses with effective tax rates of 22.4% and 24.2%, respectively. For the three and nine month periods ended September 30, 2023, our consolidated effective tax amounts were an expense and a benefit, with effective tax rates, as reported, of 33.1% and 41.4%, respectively, and as adjusted, were expenses with effective tax rates of 18.8% and 18.9%, respectively.

Current wording

(a) Represents the tax effects of the adjusted items that are subject to tax, including the tax effects of non-cash stock-based compensation expense, including from share-based payment awards. Tax effects are determined based on the tax treatment of the related item, the incremental statutory tax rate of the jurisdictions pertaining to the adjustment, and their effects on pre-tax income (loss). For the three month periods ended March 31, 2025 and 2024, our consolidated tax amounts were benefits, with effective tax rates, as reported, of (37.8)% and 24.3%, respectively, and as adjusted, were an expense and a benefit, for the respective periods, with effective tax rates of 12.4% and 0.4%, respectively. See Note 10 – Income Taxes in the notes to the consolidated financial statements, which is incorporated by reference, for additional information regarding our consolidated tax amounts and effective tax rates for the respective periods.

Previous wording

Our primary sources of liquidity are cash flows from operations, availability under our Credit Facility and our cash balances. Our primary liquidity needs are for working capital, capital expenditures, insurance and performance collateral in the form of cash and letters of credit, debt service, income taxes, earn-out obligations and equity and other investment funding requirements. We also evaluate opportunities for strategic acquisitions, investments and other arrangements from time to time, and we may consider opportunities to refinance, extend the terms of our existing indebtedness, retire outstanding debt, borrow additional funds, which may include borrowings under our Credit Facility or debt issuances, or repurchase additional shares of our outstanding common stock under share repurchase authorizations, any of which may require our use of cash. See Note 6 – Debt in the notes to the consolidated financial statements in this Form 10-Q, which is incorporated by reference, for details of our $550 million offering of 5.900% Senior Notes and the repayments of our Three-Year Term Loan during the second quarter of 2024 and our 6.625% IEA Senior Notes in the second and third quarters of 2024.

Current wording

Our primary sources of liquidity are cash flows from operations, availability under our Credit Facility and our cash balances. Our primary liquidity needs are for working capital, capital expenditures, insurance and performance collateral in the form of cash and letters of credit, debt service, income taxes, earn-out obligations and equity and other investment funding requirements. We also evaluate opportunities for strategic acquisitions, investments and other arrangements from time to time, and we may consider opportunities to refinance, extend the terms of our existing indebtedness, retire outstanding debt, borrow additional funds, which may include borrowings under our Credit Facility or debt issuances, or repurchase additional shares of our outstanding common stock under share repurchase authorizations, any of which may require our use of cash.

Previous wording

Capital Expenditures. For the nine month period ended September 30, 2024, we spent approximately $101 million on capital expenditures, or $52 million, net of asset disposals, and incurred approximately $100 million of equipment purchases under finance leases and other financing arrangements. We estimate that we will spend approximately $140 million to $165 million on capital expenditures, or approximately $80 million to $105 million, net of asset disposals, in 2024, and we expect to incur approximately $135 million to $160 million of equipment purchases under finance leases and other financing arrangements. Actual capital expenditures may increase or decrease in the future depending upon business activity levels, as well as ongoing assessments of equipment lease and other financing arrangements versus purchase decisions based on management’s evaluation of short and long-term equipment requirements.

Current wording

Capital Expenditures. For the three month period ended March 31, 2025, we spent approximately $47 million on capital expenditures, or $33 million, net of asset disposals, and incurred approximately $64 million of equipment purchases under finance leases and other financing arrangements. We estimate that we will spend approximately $170 million on capital expenditures, or approximately $120 million, net of asset disposals, in 2025, and we expect to incur approximately $180 million of equipment purchases under finance leases and other financing arrangements. Actual capital expenditures may increase or decrease in the future depending upon business activity levels, as well as ongoing assessments of equipment lease and other financing arrangements versus purchase decisions based on management’s evaluation of short and long-term equipment requirements.

Previous wording

Acquisitions and Earn-Out Liabilities. We typically utilize cash for business acquisitions and other strategic arrangements. In addition, in most of our acquisitions, we have agreed to make future payments to the sellers that are contingent upon the future earnings performance of the acquired businesses, which we also refer to as “Earn-out” payments. Additionally, from time to time, our acquisitions may contain certain additional payments based upon specified conditions. Earn-out payments may be paid in cash or, under specific circumstances, MasTec common stock, or a combination thereof, generally at our option. The estimated total value of future Earn-out liabilities as of September 30, 2024 was approximately $82 million. Of this amount, approximately $12 million represents the liability for earned amounts. The remainder is management’s estimate of Earn-out liabilities that are contingent upon future performance. For the nine month periods ended September 30, 2024 and 2023, we made $26 million and $39 million, respectively, of payments related to our Earn-out liabilities.

Current wording

Acquisitions and Earn-Out Liabilities. We typically utilize cash for business acquisitions and other strategic arrangements. In addition, in most of our acquisitions, we have agreed to make future payments to the sellers that are contingent upon the future earnings performance of the acquired businesses, which we also refer to as “Earn-out” payments. From time to time, our acquisitions may contain certain additional payments if specified conditions are met. Earn-out payments may be paid in cash or, under specific circumstances, MasTec common stock, or a combination thereof, generally at our option. The estimated total value of future Earn-out liabilities as of March 31, 2025 was approximately $113 million. Of this amount, approximately $35 million represents the liability for earned amounts. The remainder is management’s estimate of Earn-out liabilities that are contingent upon future performance. For the three month period ended March 31, 2025, payments related to our Earn-out liabilities totaled $0.5 million, and for the three month period ended March 31, 2024, we made no payments.

Previous wording

Income Taxes. For the nine month periods ended September 30, 2024 and 2023, tax payments, net of tax refunds totaled approximately $45 million and $15 million, respectively. Our tax payments vary with changes in taxable income and earnings based on estimates of full year taxable income activity and estimated tax rates.

Current wording

Income Taxes. For the three month periods ended March 31, 2025 and 2024, tax refunds, net of tax payments totaled approximately $2 million and $4 million, respectively. Our tax payments vary with changes in taxable income and earnings based on estimates of full year taxable income activity and estimated tax rates.

Previous wording

Working capital requirements also tend to increase when we commence multiple projects or particularly large projects because labor, including subcontractor costs, and certain other costs, including inventory and materials requirements, typically become payable before the receivables resulting from work performed are collected. The timing of billings and project close-outs can also contribute to changes in billed and unbilled revenue. As of September 30, 2024, we expect that substantially all of our unbilled receivables will be billed to customers in the normal course of business within the next twelve months. Total accounts receivable, which consists of contract billings, unbilled receivables and retainage, net of allowance, were generally flat at approximately $3.1 billion as of both September 30, 2024 and December 31, 2023.

Current wording

Working capital requirements also tend to increase when we commence multiple projects or particularly large projects because labor, including subcontractor costs, and certain other costs, including inventory and materials requirements, typically become payable before the receivables resulting from work performed are collected. The timing of billings and project close-outs can also contribute to changes in billed and unbilled revenue. As of March 31, 2025, we expect that substantially all of our unbilled receivables will be billed to customers in the normal course of business within the next twelve months. Total accounts receivable, which consists of contract billings, unbilled receivables and retainage, net of allowance, were generally flat at approximately $2.9 billion as of both March 31, 2025 and December 31, 2024.

Previous wording

Our payment billing terms are generally net 30 days, and some of our contracts allow our customers to retain a portion of the contract amount until the job is completed, which amounts are referred to as “retainage.” As part of our ongoing working capital management practices, we evaluate opportunities to improve our working capital cycle time through contractual provisions and certain financing arrangements. For certain customers, we maintain inventory to meet the materials requirements of the contracts. Occasionally, certain of our customers pay us in advance for a portion of the materials we purchase for their projects or allow us to pre-bill them for materials purchases up to specified amounts. Vendor terms are generally 30 days. Our agreements with subcontractors often contain a “pay-if-paid” provision, whereby our payments are contractually due to subcontractors only after we are paid by our customers.

Current wording

Our payment billing terms are generally net 30 days, and some of our contracts allow our customers to retain a portion of the contract amount, generally from 5% to 10% of billings, until the job is completed, which amounts are referred to as “retainage.” As part of our ongoing working capital management practices, we evaluate opportunities to improve our working capital cycle time through contractual provisions and certain financing arrangements. For certain customers, we maintain inventory to meet the materials requirements of the contracts. Occasionally, certain of our customers pay us in advance for a portion of the materials we purchase for their projects or allow us to pre-bill them for the mobilization of assets and/or crew to project sites and/or for materials purchases up to specified amounts. Vendor terms are generally 30 to 45 days. Our agreements with subcontractors often contain a “pay-if-paid” provision, whereby our payments are contractually due to subcontractors only after we are paid by our customers.

Previous wording

As of September 30, 2024, we had approximately $685 million in working capital, defined as current assets less current liabilities, as compared with $1,137 million as of December 31, 2023, a decrease of approximately $452 million. Cash and cash equivalents totaled approximately $181 million and $530 million as of September 30, 2024 and December 31, 2023, respectively, for a decrease of approximately $348 million. See discussion below for further detail regarding our cash flows and related activity.

Current wording

As of March 31, 2025, we had approximately $636 million in working capital, defined as current assets less current liabilities, as compared with $653 million as of December 31, 2024, a decrease of approximately $17 million. Cash and cash equivalents totaled approximately $346 million and $400 million as of March 31, 2025 and December 31, 2024, respectively, for a decrease of $54 million. See discussion below for further detail regarding our cash flows and related activity.