Segments and Operations by Geographic Area

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Segments and Operations by Geographic Area

Segments and Operations by Geographic Area     

Segment Discussion

MasTec presents its continuing operations under five reportable segments: (1) Communications; (2) Electrical Transmission; (3) Oil and Gas; (4) Power Generation and Industrial and (5) Other. This structure is generally focused on broad end-user markets for MasTec's labor-based construction services and has been determined in accordance with the criteria in ASC 280, Segment Reporting.All five reportable segments derive their revenues from the engineering, installation and maintenance of infrastructure, primarily in North America.

The Communications segment performs engineering, construction and maintenance of communications infrastructure primarily related to wireless and wireline communications and install-to-the-home, and to a lesser extent, infrastructure for electrical utilities. The Electrical Transmission segment primarily serves the energy and utility industries through the engineering, construction and maintenance of electrical transmission lines and substations.MasTec also performs engineering, construction and maintenance services on oil and natural gas pipelines and processing facilities for the energy and utilities industries through the Oil and Gas segment.The Power Generation and Industrial segment primarily serves the energy and utility end markets and other end markets through the installation and construction of power plants, wind farms, solar farms, related electrical transmission infrastructure, ethanol facilities and various types of industrial infrastructure.The Other category primarily includes small business units that perform construction services for a variety of end markets in Mexico and elsewhere internationally.

The accounting policies of the reportable segments are the same as those described in Note 1 - Business, Basis of Presentation and Significant Accounting Policies. Intersegment revenues and costs are accounted for as if the revenues were to third parties because these items are based on negotiated fees between the segments involved. All intercompany transactions and balances are eliminated in consolidation; eliminations between segments are included in the Eliminations reconciling column in the tables below. Intrasegment revenues and costs between entities are eliminated to arrive at the segment totals. The Corporate column includes amounts related to Corporate functions such as administrative costs, professional fees, and acquisition costs. Segment results include certain allocations of centralized costs such as general liability, medical and workers' compensation insurance and information technology costs. Income tax expense is managed by Corporate on a consolidated basis and is not allocated to the reportable segments.

Income from continuing operations before non-controlling interests before interest, taxes, depreciation and amortization (“EBITDA”) is the measure of profitability used by management to manage its segments and, accordingly, in its segment reporting. As appropriate, the Company supplements the reporting of consolidated financial information determined in accordance with U.S. GAAP with certain non-U.S. GAAP financial measures, including EBITDA. The Company believes these non-U.S. GAAP measures provide meaningful information that helps investors understand the Company's financial results and assess its prospects for future performance. The Company uses EBITDA to evaluate its performance, both internally and versus its peers, because it excludes certain items that may not be indicative of the Company's reportable segment results, as well as items that can vary widely across different industries or among companies within the same industry. Segment EBITDA is calculated in a manner consistent with consolidated EBITDA.

Corporate EBITDA in 2013 includes a loss on debt extinguishment of $5.6 million related to the repurchase and redemption of the Company's 7.625% Senior Notes in March 2013. See Note 10 - Debt for further discussion.

Summarized financial information for MasTec’s reportable segments is presented and reconciled to consolidated continuing operations financial information for total MasTec in the following tables (in millions), which may contain summation differences due to rounding:

As of and for the three months ended March 31, 2013:

	Communications		Oil and Gas		Electrical Transmission		Power Generation and Industrial			Other		Corporate			Eliminations			Continuing Operations for Consolidated MasTec
Revenue	$	424.9	$	318.8	$	84.6	$	88.9		$	2.3	$	—		$	(0.8	)	$	918.6
EBITDA	$	46.4	$	42.4	$	3.4	$	(0.2	)	$	0.1	$	(18.6	)	$	—		$	73.5
Depreciation	$	7.1	$	16.4	$	2.0	$	1.2		$	—	$	0.9		$	—		$	27.6
Amortization	$	1.1	$	2.2	$	0.3	$	0.5		$	—	$	—		$	—		$	4.2

As of and for the three months ended March 31, 2012:

	Communications		Oil and Gas		Electrical Transmission		Power Generation and Industrial		Other			Corporate			Eliminations			Continuing Operations for Consolidated MasTec
Revenue	$	389.1	$	167.7	$	64.4	$	117.4	$	0.4		$	—		$	(0.7	)	$	738.3
EBITDA	$	32.8	$	12.6	$	8.4	$	5.0	$	(0.2	)	$	(9.3	)	$	(0.1	)	$	49.2
Depreciation	$	6.2	$	8.7	$	1.4	$	1.0	$	—		$	0.7		$	—		$	17.9
Amortization	$	0.4	$	0.5	$	1.2	$	0.7	$	—		$	—		$	—		$	2.8

Revenue generated from utilities customers represented 10.7% and 9.1% of Communications segment revenues for the three month periods ended March 31, 2013 and 2012, respectively.

The following table, which may contain summation differences due to rounding, presents a reconciliation of EBITDA to consolidated income from continuing operations before provision for income taxes (in millions):

	For the Three Months Ended March 31,
	2013			2012
EBITDA	$	73.5		$	49.2
Less:
Interest expense, net	(10.0		)	(9.0		)
Depreciation	(27.6		)	(17.9		)
Amortization	(4.2		)	(2.8		)
Income from continuing operations before provision for income taxes	$	31.7		$	19.5

Foreign Operations. The Company has operations in Canada as well as in parts of Latin America and the Caribbean. The following table presents revenue by geographic area for the periods indicated (dollar amounts in millions):

	For the Three Months Ended March 31,
	2013		2012
Continuing operations:
Derived from foreign operations	$	39.7	$	62.3
Derived in the United States	878.9		676.0
Revenue from continuing operations	$	918.6	$	738.3
Discontinued operations:
Derived from foreign operations	$	2.3	$	1.7
Derived in the United States	4.0		38.5
Revenue from discontinued operations	$	6.3	$	40.2

The following table presents long-lived assets held in foreign countries, including property and equipment, net, and goodwill and intangible assets, net, as of the dates indicated (in millions):

	March 31, 2013		December 31, 2012
Property and equipment, net, held in foreign countries:
Classified within continuing operations	$	10.7	$	11.5
Classified within long-term assets of discontinued operations	1.6		1.5
Total property and equipment, net, held in foreign countries	$	12.3	$	13.0
Goodwill and other intangible assets, net, held in foreign countries:
Classified within continuing operations	$	29.6	$	31.3
Classified within long-term assets of discontinued operations	—		—
Total goodwill and other intangible assets, net, held in foreign countries	$	29.6	$	31.3

Significant Customers

Revenue concentration information for significant customers, as a percent of total consolidated revenue from continuing operations, is as follows:

	For the Three Months Ended March 31,
	2013	2012
Customer:
AT&T	18%	19%
DIRECTV®	16%	20%
Enbridge, Inc.	12%	—%

The Company's relationship with AT&T is based upon master service agreements, other service agreements and construction/installation contracts for both AT&T's wireless and wireline infrastructure businesses. Revenue from AT&T is included in the Communications segment.

The Company's relationship with DIRECTV® is based upon an agreement to provide installation and maintenance services for DIRECTV®. Revenue from DIRECTV® is included in the Communications segment.

The Company's relationship with Enbridge, Inc. is based upon a construction contract for natural gas pipelines. Revenue from Enbridge, Inc. is included in the Oil and Gas segment.