Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Related Party TransactionsMasTec purchases, rents and leases equipment and purchases various types of supplies and services used in its business, including ancillary construction services, project-related site restoration and marketing, business development and administrative activities, from a number of different vendors on a non-exclusive basis, and from time to time, rents equipment to, sells certain supplies, or performs construction services on behalf of, entities in which members of subsidiary management have ownership or commercial interests. For the three month periods ended September 30, 2023 and 2022, such payments to related party entities totaled approximately $7.1 million and $8.0 million, respectively, and for the nine month periods ended September 30, 2023 and 2022, such payments totaled approximately $33.9 million and $22.7 million, respectively. Payables associated with such arrangements totaled approximately $2.6 million as of both September 30, 2023 and December 31, 2022. Revenue from such related party arrangements totaled approximately $3.5 million and $2.4 million for the three month periods ended September 30, 2023 and 2022,

respectively, and for the nine month periods ended September 30, 2023 and 2022, totaled approximately $10.9 million and $7.4 million, respectively. Related amounts receivable totaled approximately $1.0 million and $3.2 million as of September 30, 2023 and December 31, 2022, respectively.

The Company rents and leases equipment and purchases certain supplies and servicing from CCI. 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, serves as the chairman of CCI, and a member of management of a MasTec subsidiary and an entity that is owned by the Mas family are minority owners. For the three month periods ended September 30, 2023 and 2022, MasTec paid CCI approximately $1.2 million and $1.1 million, respectively, related to this activity, and for the nine month periods ended September 30, 2023 and 2022, MasTec paid approximately $2.5 million and $2.9 million, respectively. Amounts payable to CCI totaled approximately $4.6 million and $0.6 million as of September 30, 2023 and December 31, 2022, respectively. The Company has also rented equipment to CCI. Revenue from equipment rentals to CCI totaled approximately $0.2 million for both the three and nine month periods ended September 30, 2022. As of December 31, 2022, related amounts receivable were de minimis.

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 September 30, 2023 and 2022, MasTec incurred subcontracting expenses in connection with this arrangement of approximately $2.7 million and $0.1 million, respectively, and for the nine month periods ended September 30, 2023 and 2022, MasTec incurred approximately $3.1 million and $0.2 million, respectively, of such subcontracting expenses. Related amounts payable totaled approximately $2.5 million as of September 30, 2023, and as of December 31, 2022, such payables were de minimis.

MasTec has a leasing arrangement for an aircraft that is owned by an entity that Jorge Mas owns. For both the three month periods ended September 30, 2023 and 2022, MasTec paid approximately $0.7 million related to this leasing arrangement, and for the nine month periods ended September 30, 2023 and 2022, such payments totaled approximately $2.0 million and $1.9 million, respectively.

MasTec has performed construction services on behalf of a professional Miami soccer franchise (the “Franchise”) in which Jorge Mas and José R. Mas are majority owners. Services provided by MasTec have included the construction of a soccer facility and stadium as well as wireless infrastructure services. Construction services related to site preparation for a new soccer complex began in the third quarter of 2023. For the three and nine month periods ended September 30, 2023, MasTec charged approximately $4.6 million and $4.8 million, respectively, under these arrangements, and related amounts receivable totaled approximately $4.8 million as of September 30, 2023. Payments for other expenses related to the Franchise for the three month periods ended September 30, 2023 and 2022 totaled approximately $0.3 million and $0.1 million, respectively, and for the nine month periods ended September 30, 2023 and 2022, totaled approximately $0.9 million and $0.4 million, respectively.

MasTec has a subcontracting arrangement to perform construction services for an entity, in which José R. Mas has a minority interest, and of which a member of management of a MasTec subsidiary owns the remaining interest. For the three month periods ended September 30, 2023 and 2022, revenue recognized by MasTec under this arrangement totaled approximately $42.7 million and $38.0 million, respectively, and totaled approximately $120.6 million and $98.7 million, respectively, for the nine month periods ended September 30, 2023 and 2022. As of September 30, 2023 and December 31, 2022, related amounts receivable totaled approximately $59.1 million and $42.0 million, respectively. MasTec also pays a management fee to this entity in connection with this subcontracting arrangement. Under a separate arrangement, this entity performs certain construction services for MasTec. For the three month periods ended September 30, 2023 and 2022, MasTec incurred approximately $1.7 million and $0.4 million, respectively, for management fees and subcontracting expenses under these arrangements, and incurred approximately $2.9 million and $0.9 million, respectively, under these arrangements for the nine month periods ended September 30, 2023 and 2022. As of September 30, 2023 and December 31, 2022, related amounts payable totaled approximately $0.6 million and $0.3 million, respectively.

From time to time, the Company pays amounts on behalf of or to the former owners of acquired businesses, which, under the provisions of the related purchase agreements, the former owners are obligated to repay. The Company paid $0.1 million of such amounts during both the three month periods ended September 30, 2023 and 2022. For the nine month periods ended September 30, 2023 and 2022, such payments totaled approximately $0.2 million and $1.5 million, respectively. Amounts receivable for such payments, which are expected to be settled under customary terms associated with the related purchase agreement, totaled approximately $2.2 million and $2.0 million as of September 30, 2023 and December 31, 2022, respectively.

In addition, the Company has a subcontracting arrangement with an entity in which it has a 25% interest. The Company’s interest in this entity is accounted for as an equity method investment. For the three and nine month periods ended September 30, 2023, the Company made equity contributions of approximately $0.1 million and $3.7 million, respectively, to this entity, of which $0.1 million and $0.3 million, respectively, were paid in cash. For the three and nine month periods ended September 30, 2022, the Company made equity contributions to this entity of approximately $0.1 million and $0.6 million, respectively. As of September 30, 2023 and December 31, 2022, the Company’s net investment in this entity was a liability of approximately $1.1 million and $0.2 million, respectively, which net amount included approximately $1.1 million of deferred revenue as of September 30, 2023, and $2.3 million of accounts receivable, net, less deferred revenue, as of December 31, 2022, related to the subcontracting arrangement as of the respective periods. Additionally, the Company has certain arrangements with an entity in which members of management have an ownership interest, including a fee arrangement in conjunction with a $15.0 million letter of credit issued by the Company on behalf of this entity. Income recognized in connection with these arrangements totaled approximately $0.2 million for both the three month periods ended September 30, 2023 and 2022, and totaled approximately $0.6 million for both the nine month periods ended September 30, 2023 and 2022. As of September 30, 2023 and December 31, 2022, related amounts receivable totaled $0.2 million and $0.4 million, respectively.

In 2018, the Company acquired a construction management firm specializing in steel building systems, of which Juan Carlos Mas was a minority owner at the time of acquisition. In the second quarter of 2023, the Company paid $16.1 million of contingent consideration in connection with the finalization of the earn-out arrangement related to this acquisition, as calculated under the terms of the purchase agreement. Approximately 25% of this earn-out payment was paid to Juan Carlos Mas, consistent with the terms of the purchase agreement.

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, including the ownership interests in two entities that the Company

acquired in the second quarter of 2023. See Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net for additional information. In the first quarter of 2023, the Company acquired the remaining 15% equity interests in one of its subsidiaries, which interests were previously accounted for as non-controlling interests, from two members of subsidiary management for $10.0 million in cash, plus 120,000 shares of MasTec common stock, valued at approximately $11.6 million.

Split Dollar Agreements

MasTec has split dollar life insurance agreements with trusts, for one of which Jorge Mas is a trustee, and for the other of which José R. Mas is a trustee. For the three month periods ended September 30, 2023 and 2022, the Company paid $0.2 million and $0.6 million, respectively, in connection with the agreements for Jorge Mas, and no payments were made in connection with such agreements for José R. Mas in either of the three month periods ended September 30, 2023 or 2022. For the nine month periods ended September 30, 2023 and 2022, the Company paid $0.7 million and $1.1 million, respectively, in connection with the agreements for Jorge Mas, and for both the nine month periods ended September 30, 2023 and 2022, paid $0.7 million in connection with such agreements for José R. Mas. As of September 30, 2023 and December 31, 2022, life insurance assets associated with these agreements totaled approximately $27.2 million and $25.8 million, respectively.