Related Party Transactions

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

MasTec leases employees to a customer, in which Jorge Mas and Jose Mas own a majority interest. For the three month periods ended September 30, 2013 and 2012, MasTec charged to the customer approximately $135,000 and $123,000, respectively, and charged $422,000 and $382,000, respectively, for the nine month periods ended September 30, 2013 and 2012. As of September 30, 2013 and December 31, 2012, receivables of $45,000 and $907,000, respectively, attributable to this arrangement were outstanding. The Company also provides satellite communication services to this customer. For the three month periods ended September 30, 2013 and 2012, revenues relating to this customer were approximately $350,000 and $318,000, respectively, and for the nine month periods ended September 30, 2013 and 2012, revenues relating to this customer were approximately $951,000 and $924,000, respectively. As of September 30, 2013 and December 31, 2012, outstanding receivables from this arrangement were approximately $414,000 and $1,232,000, respectively.        

Split Dollar and Deferred Bonus Agreements

On October 16, 2013, Jorge Mas, the Company and Jose Ramon Mas and Juan Carlos Mas, as trustees of the Jorge Mas Irrevocable Trust, dated June 1, 2012 (the “trust”) entered into a split dollar life insurance agreement that replaces a prior split dollar agreement with Jorge Mas. Under the split dollar agreement, MasTec is the sole owner of each of the policies subject to the agreement. The Company will make the premium payments under each of such policies. Upon the death of Jorge Mas or the survivor of Jorge Mas and his wife (collectively, the “insureds”) under the applicable policy, MasTec is entitled to receive a portion of the death benefit under such policy equal to the greater of (i) all premiums paid by the Company on such policy and (ii) the then cash value of such policy (excluding surrender charges or other similar charges or reductions) immediately before the triggering death. The balance of the death benefit is payable to the trust or other beneficiary designated by the trustees. In the event of the Company’s bankruptcy or dissolution, the trust shall have the assignable option to purchase any or all of the policies subject to the split dollar agreement from the Company. The purchase price for each policy shall be the greater of (x) all premiums paid by the Company on such policy or (y) the then cash value of such policy (excluding surrender charges or other similar charges or reductions). The total maximum face amount of the insurance for all policies subject to the split dollar agreement was capped at $200 million. The Company is designated as the named fiduciary under the split dollar agreement. The foregoing description of the split dollar agreement for Jorge Mas is only a summary and is qualified in its entirety by reference to the full text of such agreement, which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q, which agreement is herein incorporated by reference.

The Company paid approximately $1.1 million in connection with the split dollar agreements for Jorge Mas for the three month period ended September 30, 2013. The Company made no payments in connection with the agreements for the three month period ended September 30, 2012. The Company paid approximately $1.2 million and $0.3 million in connection with the agreements for the nine month periods ended September 30, 2013 and 2012, respectively. MasTec also has a split dollar agreement and a deferred bonus agreement with Jose Mas. For the three and nine month periods ended September 30, 2013 and 2012, no payments were made in connection with the agreements for Jose Mas. As of September 30, 2013 and December 31, 2012, life insurance assets of $10.1 million and $8.7 million respectively, are included within other long-term assets in the condensed unaudited consolidated balance sheets.