XML 34 R22.htm IDEA: XBRL DOCUMENT v3.19.1
Related Party Transactions
3 Months Ended
Mar. 31, 2019
Related Party Transactions [Abstract]  
Related Party Transactions
Note 15Related Party Transactions
MasTec purchases, rents and leases equipment and purchases various types of supplies and services used in its business from a number of different vendors on a non-exclusive basis, and from time to time, rents equipment to certain entities, including entities that are associated with members of subsidiary management. For the three month periods ended March 31, 2019 and 2018, related party lease payments to such entities for operational facilities and equipment totaled approximately $14.7 million and $7.5 million, respectively. Payables associated with these related party lease arrangements were de minimis as of March 31, 2019, and totaled approximately $1.5 million as of December 31, 2018. Additionally, payments to such related party entities for various types of supplies and services, including ancillary construction services, project-related site restoration and marketing and business development activities, totaled approximately $13.8 million and $9.0 million for the three month periods ended March 31, 2019 and 2018, respectively. As of March 31, 2019 and December 31, 2018, related amounts payable totaled approximately $3.7 million and $15.8 million, respectively. As of December 31, 2018, receivables from equipment rentals to such related parties totaled approximately $0.2 million, which amount was collected in the first quarter of 2019.
The Company has an arrangement to perform certain construction services for two entities, of which a member of subsidiary management is a minority owner. Revenue from these arrangements totaled approximately $0.3 million and $2.7 million for the three month periods ended March 31, 2019 and 2018, respectively. Related amounts receivable, net of BIEC, totaled approximately $0.2 million and $0.1 million as of March 31, 2019 and December 31, 2018, respectively. In February 2018, MasTec acquired a construction management firm specializing in steel building systems, of which 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, was a minority owner, for approximately $6.1 million in cash and an estimated earn-out liability of approximately $1.4 million, net, as adjusted. The net assets acquired included notes payable to the former owners totaling approximately $2.6 million and accrued interest of approximately $0.1 million, which amounts were subsequently repaid. Amounts outstanding for advances made by the Company on behalf of this entity totaled approximately $1.0 million as of both March 31, 2019 and December 31, 2018, which amount is expected to be settled under customary terms associated with the related purchase agreement.
The Company rents and leases equipment and purchases equipment supplies and servicing from CCI, in which it has a 15% equity investment. Juan Carlos Mas serves as the chairman of CCI, and a member of management of a MasTec subsidiary is a minority owner. For the three month periods ended March 31, 2019 and 2018, MasTec paid CCI approximately $6.0 million and $5.9 million, net of rebates, respectively, related to these arrangements. Amounts payable to CCI, net of rebates receivable, totaled approximately $6.3 million and $4.9 million as of March 31, 2019 and December 31, 2018, respectively. The Company has also rented equipment to CCI. There was no revenue from equipment rentals to CCI in either of the three month periods ended March 31, 2019 or 2018. As of December 31, 2018, amounts receivable from equipment rentals to CCI totaled approximately $0.3 million, which amount was collected in the first quarter of 2019.
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, 2019 and 2018, MasTec incurred approximately $1.6 million and $5.0 million, respectively, of expenses under this subcontracting arrangement. As of March 31, 2019 and December 31, 2018, related amounts payable totaled approximately $1.6 million and $0.4 million, respectively.
MasTec leases employees to a customer in which Jorge Mas and José R. Mas own a majority interest. For both the three month periods ended March 31, 2019 and 2018, MasTec charged approximately $0.2 million to this customer. As of both March 31, 2019 and December 31, 2018, outstanding receivables related to this employee leasing arrangement totaled approximately $0.3 million. The Company also provides satellite communication services to this customer. For the three month periods ended March 31, 2019 and 2018, revenue from satellite communication services provided to this customer totaled approximately $0.2 million and $0.3 million, respectively. As of both March 31, 2019 and December 31, 2018, amounts receivable from this arrangement totaled approximately $0.3 million.
MasTec has a leasing arrangement for an aircraft that is owned by an entity that Jorge Mas owns. For the three month periods ended March 31, 2019 and 2018, MasTec paid approximately $0.7 million and $0.5 million, respectively, related to this leasing arrangement. As of both March 31, 2019 and December 31, 2018, related amounts payable were de minimis.
The Company’s Pacer subsidiary has a subcontracting arrangement with a contractual joint venture in which it holds a 35% undivided interest. Revenue recognized by the Company in connection with this arrangement totaled approximately $0.3 million for the three month period ended March 31, 2018, and as of December 31, 2018, related accounts receivable, net of BIEC, was de minimis. There was no activity for three month period ended March 31, 2019. Outstanding performance guarantees on behalf of this contractual joint venture, for which the related project was almost fully complete as of March 31, 2019, totaled Canadian $26.4 million as of both March 31, 2019 and December 31, 2018 (or approximately $19.8 million and $19.4 million, respectively). For three month period ended March 31, 2019, there was no project-related financing provided to this contractual joint venture, and for the three month period ended March 31, 2018, project-related financing totaled approximately $0.6 million.
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. The Company made distributions of earnings to holders of its non-controlling interests of $0.6 million in the first quarter of 2018, which related to amounts earned during 2017.
Split Dollar Agreements
The Company has split dollar life insurance agreements with trusts of which Jorge Mas or José R. Mas is a trustee, for which there were no payments made in either of the three month periods ended March 31, 2019 or 2018. As of both March 31, 2019 and December 31, 2018, life insurance assets associated with these agreements totaled approximately $18.5 million.