Segments and Related Information

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segments and Related Information

Note 13 – Segments and Related Information

Segment Discussion

The Company manages its operations under five operating segments, which represent its five reportable segments: (1) Communications; (2) Oil and Gas; (3) Electrical Transmission; (4) Clean Energy and Infrastructure and (5) Other. This structure is generally focused on broad end-user markets for the Company’s labor-based construction services. All five reportable segments derive their revenue from the engineering, installation and maintenance of infrastructure, primarily in North America.

The Communications segment performs engineering, construction, maintenance and customer fulfillment activities related to communications infrastructure, primarily for wireless and wireline/fiber communications and install-to-the-home customers, and, to a lesser extent, infrastructure for utilities, among others. The Company performs engineering, construction and maintenance services for oil and natural gas pipelines and processing facilities for the energy and utilities industries through its Oil and Gas segment. The Electrical Transmission segment primarily serves the energy and utility industries through the engineering, construction and maintenance of electrical transmission lines and substations. The Clean Energy and Infrastructure segment primarily serves energy, utility and other end-markets through the installation and construction of power facilities, including from renewable sources, related electrical transmission infrastructure, ethanol/biofuel facilities and various types of heavy civil and industrial infrastructure. The Other segment includes certain equity investees, the services of which vary from those provided by the Company’s primary segments, as well as other small business units that perform construction and other services for a variety of international end-markets.

Earnings 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 and help 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 as compared with its peers, because it excludes certain items that may not be indicative of the Company’s core operating results for its reportable segments, 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.

Summarized financial information for MasTec’s reportable segments is presented and reconciled to consolidated financial information for total MasTec in the following tables, including a reconciliation of consolidated income before income taxes to EBITDA, all of which are presented in millions. The tables below may contain slight summation differences due to rounding.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
Revenue:	2020			2019			2020			2019
Communications (a)	$	654.3		$	652.6		$	1,298.4		$	1,265.4
Oil and Gas	368.5			936.8			727.6			1,558.1
Electrical Transmission	124.1			100.4			252.2			195.3
Clean Energy and Infrastructure	426.1			250.2			712.4			439.6
Other	0.1			0.0			0.1			0.1
Eliminations	(3.8		)	(1.0		)	(4.8		)	(1.2		)
Consolidated revenue	$	1,569.3		$	1,939.0		$	2,985.9		$	3,457.3

(a) Revenue generated primarily by utilities customers represented 14.9% and 15.4% of Communications segment revenue for the three month periods ended June 30, 2020 and 2019, respectively, and represented 15.0% and 15.5% for the six month periods ended June 30, 2020 and 2019, respectively.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
EBITDA:	2020			2019			2020			2019
Communications	$	76.4		$	52.4		$	127.2		$	97.8
Oil and Gas	80.1			179.3			154.5			286.7
Electrical Transmission	(3.2		)	8.7			5.1			12.4
Clean Energy and Infrastructure	30.1			8.9			35.0			12.1
Other	7.5			6.4			14.9			12.7
Corporate	(31.0		)	(19.2		)	(62.9		)	(48.7		)
Consolidated EBITDA	$	159.9		$	236.5		$	273.8		$	373.0

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
Depreciation and Amortization:	2020		2019		2020		2019
Communications	$	21.4	$	15.3	$	41.0	$	30.0
Oil and Gas	32.1		34.3		60.2		68.9
Electrical Transmission	6.6		5.2		12.4		9.7
Clean Energy and Infrastructure	4.7		3.3		8.7		6.4
Other	0.0		0.0		0.0		0.0
Corporate	2.7		1.8		5.7		4.0
Consolidated depreciation and amortization	$	67.5	$	59.9	$	128.0	$	119.0

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
EBITDA Reconciliation:	2020		2019		2020		2019
Income before income taxes	$	77.6	$	160.0	$	114.1	$	215.1
Plus:
Interest expense, net	14.8		16.6		31.8		38.9
Depreciation	57.7		55.3		110.8		109.5
Amortization of intangible assets	9.8		4.7		17.2		9.5
Consolidated EBITDA	$	159.9	$	236.5	$	273.8	$	373.0

Foreign Operations and Other. MasTec operates in North America, primarily in the United States and Canada, and, to a lesser extent, in Mexico and the Caribbean. Revenue derived from U.S. operations totaled $1.6 billion and $1.9 billion for the three month periods ended June 30, 2020 and 2019, respectively, and totaled $2.9 billion and $3.3 billion for the six month periods ended June 30, 2020 and 2019, respectively. Revenue derived from foreign operations totaled $14.0 million and $47.9 million for the three month periods ended June 30, 2020 and 2019, respectively, and totaled $59.6 million and $126.7 million for the six month periods ended June 30, 2020 and 2019, respectively, the majority of which was derived from the Company’s Canadian operations in its Oil and Gas segment, and, to a lesser extent, from the Company’s wireless operations in Mexico. Long-lived assets held in the U.S. included property and equipment, net, of $949.1 million and $874.7 million as of June 30, 2020 and December 31, 2019, respectively, and, for the Company’s businesses in foreign countries, totaled $23.1 million and $31.1 million, respectively. Intangible assets and goodwill, net, related to the Company’s U.S. operations totaled approximately $1.4 billion as of both June 30, 2020 and December 31, 2019, respectively, and for the Company’s businesses in foreign countries, totaled approximately $51.4 million and $56.4 million as of June 30, 2020 and December 31, 2019, respectively. The majority of the Company’s long-lived and intangible assets and goodwill in foreign countries relate to its Canadian operations. As of June 30, 2020 and December 31, 2019, amounts due from customers from which foreign revenue was derived accounted for approximately 3% and 5%, respectively, of the Company’s consolidated net accounts receivable position, which represents accounts receivable, net, less deferred revenue. Revenue from governmental entities for both the three and six month periods ended June 30, 2020 totaled approximately 2% of total revenue, and for both the three and six month periods ended June 30, 2019 totaled approximately 1%. Substantially all revenue from governmental entities was derived from the Company’s U.S. operations.

Significant Customers

Revenue concentration information for significant customers as a percentage of total consolidated revenue was as follows:

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
Customer:	2020	2019	2020	2019
AT&T (including DIRECTV®) (a)	19%	18%	21%	20%
Permian Highway Pipeline (b)	10%	—%	7%	—%
Equitrans Midstream Corporation (c)	1%	12%	2%	9%

(a) The Company’s relationship with AT&T is based upon multiple separate master service and other service agreements, including for installation and maintenance services, as well as construction/installation contracts for AT&T’s: (i) wireless; (ii) wireline/fiber; and (iii) various install-to-the-home businesses, including DIRECTV^®. Revenue from AT&T is included within the Communications segment.

(b) The Company's relationship with Permian Highway Pipeline is based upon various construction contracts for pipeline activities, for which the related revenue is included in the Oil and Gas segment.

(c)

The Company's relationship with Equitrans Midstream Corporation and its affiliates is based upon various construction contracts for pipeline activities, for which the related revenue is included in the Oil and Gas segment.