MASTEC INC

Note 3 –Acquisitions, Goodwill and Other Intangible Assets, Net

The following table provides a reconciliation of changes in goodwill by reportable segment for the period indicated (in millions):

(a) Accumulated impairment loss includes the effects of currency translation gains and/or losses.

(b) Measurement period adjustments represent adjustments, net, to preliminary estimates of fair value within the measurement period of up to one year from the date of acquisition. Measurement period adjustments, net, for the three months ended March 31, 2026 were primarily the result of net working capital and valuation adjustments.

The following table provides a reconciliation of changes in other intangible assets, net, for the period indicated (in millions):

(a)Consists principally of pre-qualifications, intellectual property and non-compete agreements. Additions for the three months ended March 31, 2026 related to the asset acquisition included within the Company’s Pipeline Infrastructure segment.

(b)Represents adjustments, net, to preliminary estimates of fair value within the measurement period of up to one year from the date of acquisition. Measurement period adjustments, net, for the three months ended March 31, 2026 relate primarily to decreases in amortizing intangible assets resulting from valuation adjustments.

During the three months ended March 31, 2026, no events occurred that would indicate it was more likely than not that a goodwill impairment exists.

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 and customer base, broaden its geographic reach and expand its service offerings. Acquisitions are funded with cash on hand, borrowings under the Company’s senior unsecured credit facility and other debt financing and, for certain acquisitions, with shares of the Company’s common stock, and are generally subject to customary purchase price adjustments. The goodwill balances for each of the respective acquisitions represent the estimated values of each acquired company’s geographic presence in key markets, assembled workforce, synergies expected to be achieved from the combined operations of each of the acquired companies and MasTec, as well as the acquired company’s industry-specific project management expertise.

2026 Acquisitions. Effective in January 2026, MasTec acquired 86% of the equity interests of McKee Utility Contractors, LLC, an infrastructure services company that specializes in water and wastewater distribution networks in the south central region of the United States, which is included within the Company’s Clean Energy and Infrastructure segment. MasTec has the option to acquire the remaining noncontrolling interest in the entity following the third anniversary of the consummation date. The aggregate purchase price consisted of $262 million in cash, subject to certain working capital and other contractually agreed-upon adjustments. Determination of the estimated fair values of net assets acquired and consideration transferred for the acquisition, which has been accounted for as a business combination under ASC 805, was preliminary as of March 31, 2026; as a result, further adjustments to these estimates may occur. The Company expects to finalize the valuation and complete the purchase price consideration allocation no later than one year from the acquisition date. Acquisition costs for the three months ended March 31, 2026 were immaterial.

The following table summarizes, as of March 31, 2026, the estimated fair values of the consideration paid, net assets acquired, and non-controlling interest assumed for the Company’s 2026 acquisition (in millions):

Amortizing intangible assets related to the acquisition are primarily composed of customer relationships, and to a lesser extent, backlog and trade names. Customer relationships and backlog intangible assets, in the aggregate, totaled approximately $139 million and each had a weighted average life of approximately 13 years and 2 years, respectively. Customer relationships are based on the operational history and the nature of its customers, which are primarily municipalities and utility customers, and backlog is based on estimated cash flows expected to be derived from future work on acquired contracts with customers. The fair values of the customer relationships and acquired backlog intangible assets were determined using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected operating cash flows generated by the intangible asset after considering the cost to realize revenue, and an appropriate discount rate to reflect the time value and risk associated with the invested capital. The significant assumptions used by the Company in determining the fair value of customer relationships intangible assets include future revenues, margins, discount rates, and customer attrition rates. The weighted average life of amortizing intangible assets in the aggregate for the acquisition was 10 years. Amortizing intangible assets are amortized in a manner consistent with the pattern in which the related benefits are expected to be consumed. The preliminary fair value of the noncontrolling interest is estimated based on the price MasTec paid for its 86% controlling interest. As of March 31, 2026, none of the goodwill balance related to the 2026 acquisition is expected to be tax deductible.

Additionally, effective in March 2026, MasTec acquired certain of the assets of an equipment company for an aggregate purchase price of approximately $20 million, which is accounted for as an asset acquisition under ASC 805 and included within the Company’s Pipeline Infrastructure segment.

2025 Acquisitions. During 2025, MasTec acquired all of the equity interests of the following: (i) within the Company’s Communications segment: a telecommunications construction company, effective in July; (ii) within the Company’s Pipeline Infrastructure segment: a construction company specializing in roadway infrastructure, effective in August; and (iii) within the Company’s Clean Energy and Infrastructure segment: a construction company specializing in construction management and design-build services, effective in December. Additionally, MasTec acquired certain operations and assets of a business specializing in install-to-the-home services included within the Company’s Communications segment, effective in November.

Additionally, effective in July, MasTec acquired certain of the assets of an equipment company, which is accounted for as an asset acquisition under ASC 805 and included within the Company’s Pipeline Infrastructure segment.

The aggregate purchase price of the Company’s 2025 acquisitions was composed of approximately $87 million in cash, net of cash acquired, and afive year earn-out liability valued at approximately $13 million with respect to one of such acquisitions. Determination of the estimated fair values of net assets acquired and consideration transferred for these acquisitions, which have been accounted for as business combinations under ASC 805, was preliminary as of March 31, 2026; as a result, further adjustments to these estimates may occur. The Company expects to finalize the valuation and complete the purchase price consideration allocation no later than one year from the acquisition date. As of March 31, 2026, the remaining potential undiscounted earn-out liabilities for the 2025 acquisitions was estimated to be up to $20 million; however, there is no maximum payment amount. See Note 4 – Fair Value of Financial Instruments for fair value estimates and other details related to the Company’s earn-out arrangements. Approximately $35 million of the goodwill balance related to the 2025 acquisitions is expected to be tax deductible as of March 31, 2026.

HMG Additional Payments. The purchase agreement in connection with the 2021 acquisition of Henkels & McCoy Holdings, Inc. (“HMG”) provides for certain additional payments to be made to the sellers if certain 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 as unrealized gains or losses within general and administrative expenses. As of March 31, 2026 and December 31, 2025, the estimated fair value of remaining Additional Payments totaled approximately $31 million and $18 million, respectively, which amounts are included within other current liabilities in the consolidated balance sheets. For the three months ended March 31, 2026, the Company collected additional receivables of $4 million and recorded fair value adjustments related to the contingent shares totaling losses of approximately $9 million, and for the three months ended March 31, 2025, such adjustments totaled gains of approximately $1 million.

Pro forma results. The Company’s unaudited pro forma financial results include the results of operations of acquired companies as if those companies had been consolidated as of the beginning of the year prior to their acquisition, and are provided for illustrative purposes only. These unaudited pro forma financial results do not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods indicated, or of the results that may be achieved by the combined companies in the future.

The Company’s unaudited pro forma financial results were prepared by adding the unaudited historical results of acquired businesses to the historical results of MasTec, and then adjusting those combined results for (i) acquisition costs; (ii) amortization expense from acquired intangible assets; (iii) interest expense from cash consideration paid; (iv) interest expense from debt repaid upon acquisition; and (iv) other purchase accounting related adjustments. These unaudited pro forma financial results do not include adjustments to reflect other cost savings or synergies that may have resulted from these acquisitions. Future results may vary significantly due to future events and other factors, many of which are beyond the Company’s control.

The following table provides unaudited supplemental pro forma results for the periods indicated (in millions):

Acquisition-related results. The Company defines “acquisition-related” results as results from acquired businesses for the first twelve months following the dates of the respective acquisitions. For the three months ended March 31, 2026, the Company’s consolidated results of operations included acquisition-related revenue of approximately $168.5 million. Acquisition-related net income for the three months ended March 31, 2026 totaled approximately $4.5 million, based on the Company’s consolidated effective tax rate. These acquisition-related results include amortization of acquired intangible assets and certain acquisition integration costs.

Revenue and net income from the Company’s 2026 acquisitions included within the Company’s consolidated results of operations for the three months ended March 31, 2026 were $61.1 million and $2.6 million, respectively.