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MASTEC INC

MASTEC INCMTZEarnings & Financial Report

NYSE · Industrials · Water, Sewer, Pipeline, Comm & Power Line Construction

Mastec, Inc. is an American infrastructure engineering and construction company based in Coral Gables, Florida. The company provides engineering, building, installation, maintenance and upgrade of energy, utility and communications infrastructure. Its customers are primarily in the utility, communications and government industries.

What changed in MASTEC INC's 10-K — 2023 vs 2024

Top changes in MASTEC INC's 2024 10-K

613 paragraphs added · 783 removed · 78 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Backlog differs from the amount of our remaining performance obligations, which are described in Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is incorporated by reference.
Actual results could, however, vary materially from these accounting estimates. Refer to Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is incorporated by reference, for a more detailed discussion of our significant accounting policies and critical accounting estimates.
See Note 13 - Segments and Related Information and Note 14 - Commitments and Contingencies in the notes to the audited consolidated financial statements, which are incorporated by reference, for customer concentration information.
See Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net in the notes to the audited consolidated financial statements, which is incorporated by reference, for information pertaining to acquisition-related fair value adjustments.
We also manage certain of our insurance liabilities indirectly through our wholly-owned captive insurance company, which reimburses claims up to the applicable insurance limits. We are required to post collateral to certain of our insurance carriers, generally in the form of letters of credit, surety bonds and cash.
We also manage certain of our insurance liabilities indirectly through our wholly-owned captive insurance company, which reimburses claims up to the applicable insurance limits. Liabilities under our insurance programs are accrued based upon our estimate of the ultimate liability for claims, with assistance from third-party actuaries.
For the years 12 ended December 31, 2023, 2022 and 2021, revenue derived from projects performed under master service and other service agreements totaled 40%, 51% and 38%, respectively, of consolidated revenue.
Revenue derived from projects performed under master service and other service agreements totaled 41% of consolidated revenue for the year ended December 31, 2024. Cost estimation processes used for recognizing revenue over time under the cost-to-cost method require management to make significant assumptions and judgments.
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ITEM 1. BUSINESS We are a leading infrastructure construction company operating mainly throughout North America across a range of industries.
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Item 1. “Business” for discussion of our business and revenue-generating activities and “Comparison of Fiscal Year Results” below for revenue results by reportable segment. Costs of Revenue, Excluding Depreciation and Amortization.
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Our primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and other infrastructure, such as: wireless, wireline/fiber and customer fulfillment activities; power delivery infrastructure, including transmission, distribution, environmental planning and compliance; power generation infrastructure, primarily from clean energy and renewable sources; pipeline infrastructure, including for natural gas, water and carbon capture sequestration pipelines and pipeline integrity services; heavy civil and industrial infrastructure, including roads, bridges and rail; and environmental remediation services.
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Costs of revenue, excluding depreciation and amortization, consists principally of employee compensation, including salaries, employee benefits and incentive compensation; certain other employee expenses, including travel and training; subcontracted services; equipment and facility rentals; fuel and other equipment expenses; repairs and maintenance; materials and supplies; insurance expenses; certain legal and settlement matters; and certain other operating expenses.
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Our customers are primarily in these industries. Including our predecessor companies, we have been in business for almost 95 years. For the twelve month period ended December 31, 2023 we had an average of, and as of December 31, 2023, we had, approximately 34,000 employees.
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Project profit is calculated by subtracting a project’s costs of revenue, including project-related depreciation, from project revenue. Project profit and corresponding project margins will generally be reduced if actual costs to complete a project exceed our project cost estimates and we are unable to pass the increased costs to our customers.
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For the twelve month period ended December 31, 2023, we had an average of approximately 840 locations, and as of December 31, 2023, we had approximately 850 locations. We offer our services under the MasTec ® and other service marks and we are ranked among the Top 400 Contractors by Engineering News-Record.
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Estimated losses on contracts, or the excess of the total estimated costs to complete a contract over the contract’s total estimated contract 34 transaction price, are recognized in the period in which such losses are determined. Factors impacting our costs of revenue, excluding depreciation and amortization, and project profit, include: Project Mix.
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We provide our services to a diversified base of customers and a significant portion of our services are provided under master service and other service agreements, which are generally multi-year agreements.
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Revenue mix impacts our overall project margins, as margin opportunities and/or risks can vary by project type, industry, and by segment over time.
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The remainder of our work is generated pursuant to contracts for specific projects or jobs that require the construction or installation of an entire infrastructure system or specified units within an infrastructure system.
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For example, installation work that is performed on a fixed price basis has a higher level of margin opportunity or risk than maintenance or upgrade work, which is often performed under pre-established fixed price per unit or time and materials pricing arrangements.
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We seek to grow and diversify our business both organically and through acquisitions and/or strategic arrangements in order to deepen our market presence and customer base, broaden our geographic reach and expand our service offerings.
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As a result, changes in project mix between installation work performed on a fixed price basis, and maintenance or upgrade services that are performed under pre-established fixed price per unit or time and materials pricing arrangements, can affect our project margins in a given period. Seasonality, Weather and Geographic Mix.
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In 2021, we initiated a significant transformation of our end-market business operations to focus on the nation’s transition to low-carbon energy sources and position the Company for expected future opportunities. This transformation included significant business combination activity, including expansion of our scale and capacity in renewable energy, power delivery, heavy civil and telecommunications services.
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Seasonal patterns, which can be affected by weather conditions, can have a significant effect on project margins. Adverse or favorable weather conditions can affect project margins in a given period. For example, extended periods of rain or snowfall can negatively affect revenue and project margins due to reduced productivity from projects being delayed or temporarily halted.
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For discussion of our recent acquisitions, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Business,” which is incorporated by reference. We manage our operations under five operating segments, which represent our five reportable segments: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Oil and Gas and (5) Other.
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Conversely, when weather remains dry and temperatures are accommodating, more work can be done, sometimes with less cost, which can favorably affect project margins. The level of demand for restoration and storm work, which, by its nature, is unpredictable, can also favorably or negatively affect our revenue composition and project margins in a given period.
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This structure is generally focused on broad end-user markets for our labor-based construction services. Our 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, as well as infrastructure for utilities, among others.
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In addition, the mix of business conducted in different geographic areas can affect project margins due to the particular characteristics of the physical locations where work is being performed, such as mountainous or rocky terrain versus open terrain. Site conditions, including unforeseen underground conditions, can also affect project margins. Price and Performance Risk .
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Our Clean Energy and Infrastructure segment primarily serves energy, utility, government and other end-markets through the installation and construction of power generation facilities, primarily from clean energy and renewable sources, such as wind, solar, biomass, natural gas and hydrogen, as well as battery storage systems for renewable energy; various types of heavy civil and industrial infrastructure, including roads, bridges and rail; and environmental remediation services.
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Overall project margins may fluctuate due to project pricing and job conditions, changes in the cost of labor and materials, crew availability, job productivity and work volume.
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Our Power Delivery segment primarily serves the energy and utility industries through the engineering, construction and maintenance of power transmission and distribution infrastructure, including electrical and gas transmission lines, distribution network systems and substations; and environmental planning and compliance services.
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Job productivity can be affected by factors such as quality of the work crew and equipment, the quality of engineering specifications and designs, availability of skilled labor, environmental or regulatory factors and customer decisions or delays.
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Our Oil and Gas segment performs engineering, construction, maintenance and other services for pipeline infrastructure, including natural gas, water and carbon capture sequestration pipelines, as well as pipeline integrity and other services for the energy and utilities industries.
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Job productivity can also be influenced by weather conditions, job conditions and job terrain, such as whether project work is in a right of way that is open or one that has physical obstructions or environmental or legal encumbrances. Subcontracted Resources .
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The Other segment includes certain equity investees, the services of which may vary from those provided by our primary segments, as well as other small business units with activities in certain international end-markets.
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Our use of subcontracted resources in a given period is dependent upon activity levels and the amount and location of existing in-house resources and capacity. Project margins on subcontracted work can vary from those on self-perform work. As a result, changes in the availability and mix of subcontracted resources versus self-perform work can affect our overall project margins.
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See Note 13 - Segments and Related Information and Note 14 - Commitments and Contingencies in the notes to the audited consolidated financial statements, which are incorporated by reference, for additional information regarding our segment reporting and significant customer concentrations. In this Form 10-K, “$” means U.S. dollars unless otherwise indicated.
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Material versus Labor Costs. In most cases, our customers are responsible for supplying their own materials on projects; however, under certain contracts, we may agree to provide all or part of the required materials.
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Industry Trends Our industry is composed of national, regional and local companies that provide services to customers in a range of industries.
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Project margins are typically lower on projects where we furnish a significant amount of materials due to the fact that margins on materials are generally lower than margins on labor costs. Therefore, changes in the mix of projects with significant materials requirements could affect our overall project margins. General and Administrative Expense.
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We believe the following industry trends affect demand for our services: Opportunities in our Communications Segment Rapid proliferation in service offerings to data consumers continues to spur demand for fast and more reliable wireless and wireline/fiber communications network services.
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General and administrative expenses consist principally of employee compensation and benefits, travel expenses and related costs for our finance, treasury, benefits, insurance and risk management, legal, facilities, information technology and executive functions.
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Increased use of mobile devices, mobile and remote technologies and advancements in the “Internet of Things (IoT)” is expected to require new and upgraded networks to meet the data traffic and reliability demands of these technologies, including video and streaming services, connected devices, smartphone security authentication applications, ‘smart’ technologies, artificial intelligence and advanced data services, such as video surveillance, robotics, drones, digital health and farming applications, among others.
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General and administrative expenses also include non-cash stock-based compensation expense, external professional and accounting fees, certain legal and settlement matters, facilities costs, expenses associated with information technology used in administration of the business, gains or losses from the disposal of property and equipment, acquisition costs, including certain costs related to acquisition integration, business streamlining, and, from time to time, certain restructuring charges.
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According to IBISWorld’s November 2023 publication, “Wireless Tower Construction in the U.S.” (the “IBISWorld November 2023 publication”), demand for telecommunications infrastructure is expected to grow to $12.4 billion over the five year period through 2028.
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Interest Expense, Net. Interest expense, net, consists of contractual interest expense on outstanding debt obligations, amortization of deferred financing costs and other interest expense, including interest expense related to financing arrangements and mandatorily redeemable non-controlling interests. Interest expense is offset, in part, by interest earned on cash and other investments. Other Income or Expense.
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The IBISWorld November 2023 publication also predicts that telecommunications service providers will invest substantially to improve network infrastructure and increase bandwidth to support video, Voice over Internet Protocol (VoIP) and other high-speed data services.
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Other income or expense consists primarily of gains or losses from changes to estimated Earn-out accruals, certain legal and other settlements, certain acquisition-related adjustments, gains or losses from, or changes in estimated recoveries from, certain assets, including financial instruments, and certain liabilities, and certain acquisition and integration costs.
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Telecommunications companies are projected to play a significant role in shaping the future as next generation 5G wireless technology continues to gain traction among both businesses and consumers. 5G, the next generation of wireless and fixed wireless network capacity, is expected to provide a platform for the IoT, which can be harnessed to drive innovation and improvements in commerce, transportation, supply chain, research, healthcare, education, public safety, the development of “Smart Cities,” “Smart Homes” and “Smart Farming,” among many other applications. 5G is expected to provide businesses with significant real-time visibility, insight and control over assets, products and services, with the potential to transform how businesses operate and deliver new products and services. 5 In response to these growing opportunities, communications service providers (“CSPs”) are expanding, densifying and optimizing current 5G wireless and wireline/fiber communications network capacity.
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Financial Performance Metrics Our senior management team regularly reviews certain key financial performance metrics within our business, including: • revenue and profitability on an overall basis, by reportable segment and for selected projects; • revenue by customer and by contract type; • costs of revenue, excluding depreciation and amortization; general and administrative expenses; depreciation; amortization; interest expense, net; other income or expense; and provision for income taxes; • earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA, as defined in our non-U.S.
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To achieve nationwide coverage levels, changes to the structure of the network architecture for 5G wireless communications will require a longer period of installation when compared to past generation wireless infrastructure changes.
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GAAP financial measures discussion following the “Comparison of Fiscal Year Results” section below; • earnings per share and adjusted earnings per share, as defined in our non-U.S.
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Large scale 5G deployments, which are ongoing and expected to continue over the next several years, will include additional and improved tower capacity, as well as deployment of numerous higher bandwidth small/micro cells, distributed antenna systems and fiber network expansion to densify network performance.
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GAAP financial measures discussion; • days sales outstanding, net of contract liabilities (“DSO”), and days payable outstanding; • capital expenditures, net of asset disposals, and investment activities; • interest and debt service coverage ratios; and • liquidity and cash flows. 35 Management’s analysis includes detailed discussions and review of its key performance indicators; proposed investments in property and equipment and new business opportunities; acquisition integration and productivity improvement efforts; strategic arrangement opportunities; and working capital and other capital management efforts, among others.
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We believe that continued nationwide 5G tower deployments, deployment of small/micro cells, fiber network expansion by major carriers in support of 5G and, according to IBIS World’s November 2023 publication, retrofits and upgrades of current generation towers to transition towers to 5G, will lead to growing demand for 5G telecommunications infrastructure over multiple years.
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Measuring its key performance indicators and other business metrics is an important tool used by management to make informed and timely operational decisions, which we believe can help us improve our performance.
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In addition, recently announced proposed reforms under the White House Council on Environmental Quality (the “CEQ”) would modernize and accelerate environmental reviews to facilitate the deployment of clean energy, transmission, broadband, clean water and other infrastructure. Additionally, there are several recent initiatives designed to drive development of telecommunications and 5G infrastructure in rural areas.
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Critical Accounting Estimates This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires the use of estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
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Concurrent with the expected build-out of 5G infrastructure, IBISWorld’s November 2023 publication expects that CSPs will need to strategically upgrade legacy 4G networks to support these networks until nationwide 5G coverage has been achieved.
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We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, including the potential future effects of macroeconomic trends and events, such as inflation and interest rate levels; uncertainty from potential market volatility; other market, industry and regulatory factors, including uncertainty related to the implementation and pace of spending under governmental programs and initiatives and project permitting issues, and other regulatory matters or uncertainty; supply chain disruptions; climate-related matters; global events, such as military conflicts; and public health matters.
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We believe that there will be significant fiber network expansion resulting from the combination of carrier spend and government programs that are expected to incentivize private investment in telecommunications infrastructure.
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These estimates form the basis for making judgments about our operating results and the carrying values of assets and liabilities that are not readily apparent from other sources.
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According to KeyBanc’s January 2024 Capital Markets report, fiber is believed to be the most cost-effective broadband technology and the best way to meet consumers’ increase in data and bandwidth usage, with major carriers planning and embarking on substantial multi-year fiber to the home build programs in recent years.
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Given that management estimates, by their nature, involve judgments regarding future uncertainties, actual results could differ materially from these estimates if conditions change or if certain key assumptions used in making these estimates ultimately prove to be inaccurate. Our accounting policies and critical accounting estimates are reviewed periodically by the Audit Committee of the Board of Directors.
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The Infrastructure Investment and Jobs Act (the “IIJA”), which was signed into law in November 2021, provides approximately $65 billion of funding to improve and expand the nation’s broadband infrastructure and to make broadband more affordable for low-income Americans, including the Broadband Equity, Access and Deployment (“BEAD”) Program.
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We believe that our accounting estimates pertaining to: the recognition of revenue and project profit or loss, which we define as project revenue, less project costs of revenue, including project-related depreciation, in particular, on construction contracts accounted for under the cost-to-cost method, for which the recorded amounts require estimates of costs to complete and the amount and probability of variable consideration included in the contract transaction price; fair value estimates, including those related to acquisitions, valuations of goodwill, intangible assets and acquisition-related contingent consideration; self-insurance liabilities; income taxes; and litigation and other contingencies, are the most critical in the preparation of our consolidated financial statements as they are important to the portrayal of our financial condition and require significant or complex judgment and estimates on the part of management.
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BEAD will provide over $42 billion to expand high-speed internet access by funding planning, infrastructure deployment and adoption programs, with priority for unserved and underserved areas. KeyBanc’s January 2024 Capital Markets report predicts that construction activity under the BEAD program will largely commence late in 2024 or in 2025.
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Revenue Recognition We recognize revenue from contracts with customers when, or as, control of promised services and goods is transferred to customers. The amount of revenue recognized reflects the consideration to which we expect to be entitled in exchange for the services and goods transferred.
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Other government programs that have committed to provide funding through 2030 include the Rural Digital Opportunity Fund (“RDOF”), which has committed to provide over $20 billion in funding to build and connect gigabit broadband speeds in unserved rural areas, of which approximately $10 billion remains available as of the end of 2023, according to KeyBanc’s January 2024 Capital Markets report.
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We primarily recognize revenue over time utilizing the cost-to-cost measure of progress, which best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied for the related contracts. Contracts.
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Carriers are also investing in telecommunications infrastructure to expand their fiber footprint across the nation. One such example is the AT&T and BlackRock Alternatives private equity fiber partnership, Gigapower LLC (“Gigapower”), which will operate a commercial fiber-optic platform in the Unites States.
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We derive revenue primarily from construction projects performed under: (i) master service and other service agreements, which generally provide a menu of available services in a specific geographic territory that are utilized on an as-needed basis, and are typically priced using either a time and materials or a fixed price per unit basis; and (ii) contracts for specific projects requiring the construction and installation of an entire infrastructure system or specified units within an infrastructure system, which may be subject to one or multiple pricing models, including fixed price, unit price, time and materials, or cost plus a markup.
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Gigapower plans to deploy its network to an initial 1.5 million customer locations outside of AT&T’s traditional wireline service presence. According to KeyBanc’s January 2024 Capital Markets report, the recent higher cost of capital has resulted in project timing fluctuations for certain fiber projects, though carriers continue to stress the importance of these builds.
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Total transaction price and cost estimation processes are based primarily on the professional knowledge and experience of our project managers, operational and financial professionals, and other professional expertise, as warranted. Management reviews estimates of total contract transaction price and costs on an ongoing basis.
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The market for Smart City initiatives, in which cities use IoT technologies, artificial intelligence and cloud storage to collect and use insights gained from data to manage city assets, resources and services more efficiently, is a developing trend that is expected to accelerate due to the combination of increased data speeds and data capacity capabilities of wireless and wireline networks, developing IoT applications, cloud computing and artificial intelligence.
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Changes in job performance, job conditions and management’s assessment of the estimated amount and probability of variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and our profit recognition.
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Smart City initiatives include such technologies as Wi-Fi kiosks, smart lighting solutions, utility meters, smart traffic management systems, video sensors, weather sensors, drone sensors for public safety efforts and radio frequency identification sensors in the pavement.
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Changes in these factors could result in revisions to the amount of revenue recognized in the period in which the revisions are determined, which revisions could materially affect our consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are estimated based on management’s experience and judgment.
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Grand View Research, in their 2024-2030 Smart Cities Market Size, Share & Trends Analysis report, estimated that the global Smart Cities market size was valued at approximately $750 billion in 2023, and is expected to grow at an estimated compound annual growth rate of approximately 26% from 2023 to 2030.
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For the year ended December 31, 2024, project profit was affected by less than 5% as a result of changes in contract estimates included in projects that were in process as of December 31, 2023.
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Smart Home technologies represent a wide range of solutions for monitoring, controlling and automating functions in a home, including home intelligence and connected home technologies. The Smart Home market is undergoing significant transformation due to rising demand for innovative wireless and digital solutions, including HVAC controllers, connected cameras, video doorbells, connected light bulbs, smart locks and entertainment controls, among others.
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Changes in recognized revenue, net, as a result of changes in total contract transaction price estimates, including from variable consideration, and/or changes in cost estimates, related to performance obligations satisfied or partially satisfied in prior periods, for the year ended December 31, 2024, positively affected revenue by approximately 0.1%. Performance Obligations.
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These technologies are expected to benefit from the global rollout of 5G and improvements in Wi-Fi technologies, which are revolutionizing the delivery of IoT services. Mordor Intelligence, in their Smart Homes Market 2024-2029 report, predicts that the U.S.
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A performance obligation is a contractual promise to transfer a distinct good or service to a customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

54 edited+16 added−112 removed136 unchanged
Natural catastrophes or other climate events such as hurricanes or other severe weather, wildfires or flooding could affect our ability to perform outdoor services or utilize equipment and crews in affected regions. Timing of governmental permitting could also result in greater seasonal and cyclical volatility than would otherwise exist under normal conditions.
Natural catastrophes or other climate events such as hurricanes or other severe weather, wildfires or flooding could also affect our ability to perform outdoor services or utilize equipment and crews in affected regions. Timing of governmental permitting could also result in greater seasonal and cyclical volatility than would otherwise exist under normal conditions.
We may also encounter delays related to permitting and environmental approval processes; schedule changes; delays from failure of our customers to obtain rights-of-way in a timely manner; weather-related delays; delays by subcontractors in completing their portion of projects; and delays due to governmental, regulatory, market, political or other factors, some of which are beyond our control and could affect our ability to complete a project as originally scheduled.
We may also encounter delays related to permitting and environmental approval processes; schedule changes; delays from failure of our customers to obtain rights-of-way in a timely manner; weather-related delays; delays by 19 subcontractors in completing their portion of projects; and delays due to governmental, regulatory, market, political or other factors, some of which are beyond our control and could affect our ability to complete a project as originally scheduled.
These risks include natural disasters, power loss, telecommunications failures, intentional or inadvertent user misuse or error, failures of information technology solutions, computer viruses, phishing attacks, social engineering schemes, malicious code, ransomware attacks, acts of terrorism and physical or electronic security breaches, including breaches by computer hackers, cyber-terrorists and/or unauthorized access to or disclosure of our and/or our employees’ or customers’ data.
These risks include natural disasters, power loss, telecommunications failures, intentional or inadvertent user misuse or error, failures of information technology solutions, computer viruses, phishing attacks, social engineering schemes, malicious code, ransomware attacks, data extortion, acts of terrorism and physical or electronic security breaches, including breaches by computer hackers, cyber-terrorists and/or unauthorized access to or disclosure of our and/or our employees’ or customers’ data.
These estimates and assumptions must be made because certain information used in the preparation of our consolidated financial statements is either dependent on future events or cannot be calculated with a high degree of precision from data available. In some cases, these estimates are particularly uncertain and we must exercise significant judgment.
These estimates and assumptions must be made because certain information used in the preparation of our consolidated 21 financial statements is either dependent on future events or cannot be calculated with a high degree of precision from data available. In some cases, these estimates are particularly uncertain and we must exercise significant judgment.
New cyber-related regulations or other requirements, including recently adopted regulations by the SEC, could require significant additional resources and/or cause us to incur significant costs. In addition, these regulations could require us to disclose information about a cybersecurity incident before it has been completely investigated or remediated in full or even in part.
New cyber-related regulations or other requirements, including regulations adopted by the SEC, could require significant additional resources and/or cause us to incur significant costs. In addition, these regulations could require us to disclose information about a cybersecurity incident before it has been completely investigated or remediated in full or even in part.
For example, in recent years, due to the increased occurrence and potential future risk of wildfires in certain areas, insurers have reduced coverage availability and have increased 21 the cost of insurance coverage for such events, which has resulted in a reduction of our level of coverage for wildfire events and has increased our reliance upon self-insurance.
For example, in recent years, due to the increased occurrence and potential future risk of wildfires in certain areas, insurers have reduced coverage availability and have increased the cost of insurance coverage for such events, which has resulted in a reduction of our level of coverage for wildfire events and has increased our reliance upon self-insurance.
Our customers, particularly in the oil and gas industry, could be adversely affected by regulatory initiatives or additional requirements, restrictions or legislation imposed by federal, state, local, or foreign governments, including from climate-related matters and/or any related changes in end-customer demand.
Our customers, particularly in the oil and gas industry, could be adversely affected by regulatory initiatives or additional requirements, 17 restrictions or legislation imposed by federal, state, local, or foreign governments, including from climate-related matters and/or any related changes in end-customer demand.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “General Economic, Market and Regulatory Conditions.” These effects, among others, could cause estimated revenue to be realized in periods later than originally expected, or not at all.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “General Economic, Market and Regulatory Conditions.” These effects, among others, could cause estimated revenue to be realized in periods 20 later than originally expected, or not at all.
Additionally, as current agreements expire, the labor unions may not be able to negotiate extensions or replacements on terms favorable to their members, or at all, or avoid strikes, lockouts or other labor actions that could affect their members.
Additionally, as current agreements expire, the labor unions may not be able to negotiate extensions or replacements on terms favorable to their members, or at all, or 24 avoid strikes, lockouts or other labor actions that could affect their members.
We continually monitor general economic conditions and the market conditions of the industries our customers serve and their relative health compared to the 17 economy as a whole.
We continually monitor general economic conditions and the market conditions of the industries our customers serve and their relative health compared to the economy as a whole.
Based upon the information available to us from plan administrators as of December 31, 2023, several of the multiemployer pension plans in which we participate are underfunded and, as a result, we could have potential liability associated with a voluntary or involuntary withdrawal from, or termination of, these plans, or we could be required to increase our contributions.
Based upon the information available to us from plan administrators as of December 31, 2024, several of the multiemployer pension plans in which we participate are underfunded and, as a result, we could have potential liability associated with a voluntary or involuntary withdrawal from, or termination of, these plans, or we could be required to increase our contributions.
We are self-insured against many potential liabilities. We maintain insurance policies with respect to automobile liability, general liability, employer’s liability, worker’s compensation and other type of coverages. We also manage certain of our insurance liabilities indirectly through our wholly-owned captive insurance company, which reimburses claims up to the applicable insurance limits.
We are self-insured against several potential liabilities. We maintain insurance policies with respect to automobile liability, general liability, employer’s liability, worker’s compensation and other type of coverages. We also manage certain of our insurance liabilities indirectly through our wholly-owned captive insurance company, which reimburses claims up to the applicable insurance limits.
In addition, most of our contracts are cancelable on short or no advance notice, ranging from immediate cancellation to cancellation upon 180 days notice, even if we are not in default under the contract. This makes it difficult to estimate our customers’ demand for our services.
In addition, most of our contracts are cancelable on short or no advance notice, ranging from immediate cancellation to cancellation upon 180 days’ notice, even if we are not in default under the contract. This makes it difficult to estimate our customers’ demand for our services.
A public health epidemic or pandemic poses the risk that we or our employees, customers and/or business partners may be prevented from conducting ordinary course business activities for an indefinite period of time, or that the pandemic may otherwise interrupt or affect business activities, or cause us to incur incremental operational costs or experience lower levels of overhead absorption from a reduction in revenue, which could negatively affect our margins and profitability.
A public health epidemic or pandemic poses the risk that we or our employees, customers and/or business partners may be prevented from conducting ordinary course business activities for an indefinite period of time, or that the health crises and their related impacts may otherwise interrupt or affect business activities, or cause us to incur incremental operational costs or experience lower levels of overhead absorption from a reduction in revenue, which could negatively affect our margins and profitability.
As cyber attacks continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures to protect against the threat of system disruptions and security breaches, and to investigate and remediate any information security vulnerabilities and mitigate problems caused by any such disruptions and breaches.
As cyberattacks continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures to protect against the threat of system disruptions and security breaches, and to investigate and remediate any information security vulnerabilities and mitigate problems caused by any such disruptions and breaches.
Certain of our operations involve large-scale, complex projects, which can occur over extended time periods. The quality of our performance on such projects depends in large part upon our ability to manage our client relationship and the project itself, such as the timely deployment of appropriate resources, including third-party contractors and our own personnel.
Certain of our operations involve and are increasing their mix of large-scale, complex projects, which can occur over extended time periods. The quality of our performance on such projects depends in large part upon our ability to manage our client relationship and the project itself, such as the timely deployment of appropriate resources, including third-party contractors and our own personnel.
Typically, our revenue is lowest at the beginning of the calendar year and during the winter months because cold, snowy or wet conditions can affect our ability to perform outdoor services in certain regions and delay projects.
Typically, our revenue is lowest at the beginning of the calendar year and during the winter months because harsher weather such as cold, snowy or wet conditions can affect our ability to perform outdoor services in certain regions and delay projects.
Any substantial limitation on the availability of suppliers or equipment, including from economic, regulatory or market conditions, including from supply chain disruptions or other factors, which in the past have negatively affected, and in the future could continue to negatively affect, our operations and financial results.
Any substantial limitation on the availability of suppliers or equipment, including from economic, regulatory or market conditions, including from supply chain disruptions or other factors, could negatively affect, and in the past have negatively affected, our operations and financial results.
We also rely, in part, on third-party software and information technology to run certain of our critical accounting, project management and financial information systems. We maintain certain information about our customers, vendors, subcontractors, employees and other parties, all of which expect that we will adequately protect such information. From time to time, we experience system interruptions and delays.
We also rely, in part, on third-party software and information technology to run certain of our critical accounting, project management and financial information systems. We maintain certain information about our customers, vendors, subcontractors, employees and other parties, all of which expect that we will adequately protect such information.
Any such adjustments could result in reduced profitability and negatively affect our results of operations. 19 Amounts included in our backlog may not result in actual revenue or translate into profits. Our backlog is subject to cancellation and unexpected adjustments and, therefore, is an uncertain indicator of future operating results.
Any such adjustments could result in reduced profitability and negatively affect our results of operations. Amounts included in our backlog may not result in actual revenue or translate into profits. Our backlog is subject to cancellation and unexpected adjustments and, therefore, is not necessarily an accurate representation of future operating results.
While we have security, internal control and technology measures in place to protect our systems and network, if these measures fail as a result of a cyber-attack, other third-party action, employee error, malfeasance or other security failure, and someone obtains unauthorized access to our or our employees’ or customers’ information, our reputation could be damaged, our business may suffer and we could incur significant liability, or, in some cases, we may lose access to our business data, all of which could have a material adverse effect on our business, results of operations and financial condition and/or result in significant costs, fines or litigation. 22 In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks.
While we have security, internal control and technology measures in place to protect our systems and network, if these measures fail as a result of a cyber-attack, other third-party action, employee error, malfeasance or other security failure, and someone obtains unauthorized access to our or our employees’ or customers’ information, our reputation could be damaged, our business may suffer and we could incur significant liability, or, in some cases, we may lose access to our business data, all of which could have a material adverse effect on our business, results of operations and financial condition and/or result in significant costs, fines or litigation.
We periodically review the carrying values of goodwill and intangible assets to determine whether such carrying values exceed their fair values by examining relevant events and circumstances, such as: macroeconomic conditions, including levels of inflation, market interest rates and supply chain disruptions; any adverse effects of industry and/or market conditions, including the potential effects of regulatory and other uncertainty; uncertainty related to the implementation and pace of spending under governmental infrastructure programs and initiatives; project permitting uncertainty; financial, competitive and other conditions, including declines in the operating performance of our reporting units; entity-specific events; the rates of success on new project awards; the potential effects of longer-term changes in consumer behavior from regulatory, climate-related or other factors; and other adverse changes in the key valuation assumptions contributing to the estimated fair value of our reporting units.
We examine relevant events and circumstances, such as: macroeconomic conditions, including levels of inflation, market interest rates and supply chain disruptions; any adverse effects of industry and/or market conditions, including the potential effects of regulatory and other uncertainty; uncertainty related to the implementation and pace of spending under governmental infrastructure programs and initiatives; project permitting uncertainty; financial, competitive and other conditions, including declines in the operating performance of our reporting units; entity-specific events; the rates of success on new project awards; the potential effects of longer-term changes in consumer behavior from regulatory, climate-related or other factors; and other adverse changes in the key valuation assumptions contributing to the estimated fair value of our reporting units.
The final outcome of income tax examinations could be materially different from our expectations and the estimates that are reflected in our consolidated financial statements, which could have a material adverse effect on our results of operations, cash flows and liquidity.
The final outcome of income tax examinations could be materially different from our expectations and the estimates that are reflected in our consolidated financial statements, which could have a material adverse effect on our results of operations, cash flows and liquidity. A failure of our internal control over financial reporting could materially affect our business.
Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and timely or to detect and prevent fraud, and could expose us to litigation, harm our reputation, and/or adversely affect the market price of our common stock. See Item 9A. “Controls and Procedures,” for related discussion.
Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and timely or to detect and prevent fraud, and could expose us to litigation, harm our reputation, and/or adversely affect the market price of our common stock. See
Additionally, in an environment of elevated levels of inflation, such as the current market environment, it can be difficult to find appropriately skilled and qualified subcontractors and suppliers at affordable rates, which has recently caused our costs to increase.
Additionally, in an environment of elevated levels of inflation, it can be difficult to find appropriately skilled and qualified subcontractors and suppliers at affordable rates, which has caused our costs to increase.
Risks Related to the Industries We Serve Changes to laws, governmental regulations and policies, including those pertaining to governmental permitting and tax incentives, could affect demand for our services or cause delays in the timing of projects or cancellations of current or planned future projects.
Risks Related to the Industries We Serve Changes to laws, governmental regulations and policies, including those pertaining to governmental permitting, tax incentives and government funding programs and spending policies, as well as advances in artificial intelligence and government policies, including spending policies, related to artificial intelligence, could affect demand for our services or cause delays in the timing of projects or cancellations of current or planned future projects.
Our financial results are based, in part, upon estimates and assumptions that may differ from actual results. In preparing our consolidated financial statements in conformity with U.S. GAAP, management makes a number of estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
Our financial results are based, in part, upon estimates and assumptions that may differ from actual results. In preparing our consolidated financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”), management makes a number of estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
See Note 1 - Business, Basis of Presentation and Significant Accounting Policies and Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net in the notes to the audited consolidated financial statements, which are incorporated by reference. A failure of our internal control over financial reporting could materially affect our business.
See Note 1 - Business, Basis of Presentation and Significant Accounting Policies and Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net in the notes to the audited consolidated financial statements, which are incorporated by reference.
Uncertain or adverse economic or political conditions, the lack of availability of debt or equity financing and/or higher interest rates could cause our customers to reduce their capital spending or, seek more favorable pricing and other contract terms and/or cause project cancellations or deferrals. Our operations and financial results were negatively affected in 2022 by market-related supply chain disruptions.
Uncertain or adverse economic or political conditions, the lack of availability of debt or equity financing and/or higher interest rates could cause our customers to reduce their capital spending or seek more favorable pricing and other contract terms and/or cause project cancellations or deferrals.
The foregoing items, as well as any other future changes in tax laws, could have a material adverse effect on our business, results of operations, cash flows and liquidity.
Other future changes in tax laws, including as a result of the change in administration in the United States, could have a material adverse effect on our business, results of operations, cash flows and liquidity.
Unfavorable market conditions, including from rising or elevated levels of inflation and/or interest rates, supply chain disruptions, political, regulatory or market uncertainty or public health matters could have a negative effect on demand for, or the profitability of, our customers’ services, which could have a material adverse effect on our business, financial condition and results of operations.
Unfavorable market conditions, including rising or elevated levels of inflation and/or interest rates, supply chain disruptions, changes to tariffs or trade policies, affecting macroeconomic conditions, including inflation, as well as the industries we serve and related projects and expenditures, access to capital, material and costs, political, regulatory or market uncertainty or public health matters could have a negative effect on demand for, or the profitability of, our customers’ services, which could have a material adverse effect on our business, financial condition and results of operations.
We could experience a material decrease in profitability and liquidity if we pay our subcontractors for work performed for customers that fail to or delay paying us for the related work.
We could experience a material decrease in profitability and liquidity if we pay our subcontractors for work performed for customers that fail to or delay paying us for the related work. Any of these factors could have a material adverse effect on our results of operations, cash flows and liquidity.
In the ordinary course of our business, we may become subject to lawsuits, indemnity or other claims, which could materially and adversely affect our business, results of operations and cash flows. From time to time, we are subject to various claims, lawsuits and other legal proceedings brought or threatened against us in the ordinary course of our business.
From time to time, we are subject to various claims, lawsuits and other legal proceedings brought or threatened against us in the ordinary course of our business.
Unfavorable market conditions, including from rising or elevated levels of inflation or interest rates, supply chain disruptions or political, regulatory or market uncertainty, including economic downturns, could reduce capital expenditures in the industries we serve or could adversely affect our customers and result in decreased demand for our services.
Unfavorable market conditions, including rising or elevated levels of inflation or interest rates, changes to tariffs and/or trade policies affecting macroeconomic conditions, including inflation, as well as the industries we serve and related projects and expenditures, access to capital, material and costs, supply chain disruptions or political, regulatory or market uncertainty, including economic downturns and heightened geopolitical tensions and conflicts, could reduce capital expenditures in the industries we serve or could adversely affect our customers and result in decreased demand for our services.
Oil and gas prices are subject to large fluctuations in response to changes in supply and demand, including from: climate change initiatives and demand for alternative energy sources; disruptions in global economic activity; legislative and regulatory changes; market and political uncertainty, including from unrest and/or military actions involving oil-producing nations, such as the ongoing military conflicts in the Middle East and Ukraine; and a variety of other factors that are beyond our control.
Oil and gas prices are subject to large fluctuations in response to changes in supply and demand, including from: climate change initiatives and demand for alternative energy sources; disruptions in global economic activity; legislative and regulatory changes; and a variety of other factors that are beyond 18 our control.
Such market volatility can affect our customers’ investment decisions and subject us to project cancellations, deferrals or unexpected changes in the timing of project work. We may face risks related to health epidemics and pandemics or other outbreaks of communicable diseases.
Such market volatility can affect our customers’ investment decisions and subject us to project cancellations, deferrals or unexpected changes in the timing of project work.
If our insurance costs exceed our estimates of insurance liabilities or if our insurance claims or our cost of coverage increase, or if our insurance coverage proves to be inadequate or becomes unavailable, we could experience increased exposure to risk and/or a decline in profitability, liquidity and cash flows.
If our insurance costs exceed our estimates of insurance liabilities or if our insurance claims or our cost of coverage increase, or if our insurance coverage proves to be inadequate or becomes unavailable, we could experience increased exposure to risk and/or a decline in profitability, liquidity and cash flows. 22 In the ordinary course of our business, we may become subject to lawsuits, indemnity or other claims, which could materially and adversely affect our business, results of operations and cash flows.
Some of our projects involve challenging engineering, procurement and construction phases, which may occur over extended time periods. We may encounter difficulties in engineering or delays in designs or in the availability or receipt of materials or equipment provided by the customer or a third-party, certain of which have long lead-times.
We may encounter difficulties in engineering or delays in designs or in the availability or receipt of materials or equipment provided by the customer or a third-party, certain of which have long lead-times.
The COVID-19 pandemic created significant volatility, uncertainty and economic disruption, including significant volatility in the U.S. economy and financial markets for several years, and negatively affected our operations during the same period.
We may face risks related to health epidemics and pandemics or other outbreaks of communicable diseases. The COVID-19 pandemic created significant volatility, uncertainty and economic disruption, including significant volatility in the U.S. economy and financial markets for several years, and negatively affected our operations during the same period.
Tax laws are dynamic and subject to change as new laws are passed and new interpretations of laws are issued or applied, and such changes could materially affect our tax provisions. The federal government signed various relief measures into law in response to the COVID-19 pandemic.
Tax laws are dynamic and subject to change as new laws are passed and new interpretations of laws are issued or applied, and such changes could materially affect our tax provisions.
The U.S. economy has been experiencing a period of elevated levels of inflation and interest rates, and we have been subject to, and may continue to be subject to, the general effect of such inflationary market pressures on our business, particularly with respect to interest expense and labor, materials and fuel costs.
In addition, although the Federal Reserve has periodically lowered short-term interest rates since September 2024, interest rates, particularly long-term rates, remain elevated along with levels of inflation, and we have been subject to, and may continue to be subject to, the general effect of such inflationary market pressures on our business, particularly with respect to interest expense and labor, materials and fuel costs.
Our results of operations, cash flows and liquidity could be adversely affected if we miscalculate the resources or time needed to complete a project, in particular for projects with capped or fixed fees, or the resources or time needed to meet contractual milestones. 18 We perform work under a variety of conditions, including, but not limited to, challenging and hard to reach terrain and difficult site conditions.
Our results of operations, cash flows and liquidity could be adversely affected on a larger scale if we miscalculate the resources or time needed to complete large-scale projects, in particular for projects with capped or fixed fees, or the resources or time needed to meet contractual milestones.
Additionally, we could experience negative effects on our business and operations from possible longer-term changes in consumer and customer behavior. An impairment of the financial condition of one or more of our customers due to adverse market or other conditions could hinder their ability to pay us on a timely basis.
An impairment of the financial condition of one or more of our customers due to adverse market or other conditions could hinder their ability to pay us on a timely basis.
We may be unable to hire and retain a sufficiently skilled labor force to support our operating requirements and growth strategy. Our labor and training expenses could increase as a result of a shortage in the supply of skilled personnel, which could adversely affect our profitability.
Our labor and training expenses could increase as a result of a shortage in the supply of skilled personnel, which could adversely affect our profitability.
In times of low unemployment, such as the current market environment, it can be difficult for us to find appropriately skilled and qualified personnel at affordable rates and our labor costs may increase due to shortages in 20 the supply of skilled labor and increases in compensation rates generally.
In times of low unemployment, such as the recent market environment, it can be difficult for us to find appropriately skilled and qualified personnel at affordable rates. An increase in immigration actions as a result of changes to immigration policies may also affect the availability of labor.
There continue to be delays for certain materials, which could affect our ability to perform these projects in the near-term. The oil and gas markets have historically been and are likely to continue to be volatile.
Delays for certain materials, most notably for certain of our clean energy customers, have eased primarily starting in 2023; however, if such delays were to recur it could affect our ability to perform these projects. The oil and gas markets have historically been and are likely to continue to be volatile.
Any of these factors could have a material adverse effect on our results of operations, cash flows and liquidity. 23 We also rely on suppliers, equipment manufacturers and lessors to obtain or provide the materials and equipment we require to conduct our operations.
We also rely on suppliers, equipment manufacturers and lessors to obtain or provide the materials and equipment we require to conduct our operations.
Additionally, if our customers are not able to realize the expected benefits of the IIJA or IRA, it could reduce demand for our services. Elimination of, or changes to the IIJA, IRA, existing renewable portfolio standards, environmental policies, tax incentives and/or similar programs could negatively affect demand for our services.
Elimination of, reduction of, or changes to the IIJA, IRA, existing renewable portfolio standards, environmental policies, tax incentives and/or similar programs, including as a result of the change in administration in the United States, could negatively affect demand for our services.
Performing work under such conditions can result in project delays or cancellations, potentially causing us to incur unanticipated costs, reductions in revenue or the payment of liquidated damages. In addition, some of our contracts require that we assume the risk should actual site conditions vary from those expected.
We perform work under a variety of conditions, including, but not limited to, challenging and hard to reach terrain and difficult site conditions. Performing work under such conditions can result in project delays or cancellations, potentially causing us to incur unanticipated costs, reductions in revenue or the payment of liquidated damages.
In the ordinary course of business, we and third-parties on whose systems we rely have been targeted by malicious cyber-attacks, although our systems have been sufficiently resilient to prevent disruption of our operations; however, because the techniques used to obtain unauthorized access or sabotage systems change frequently and are generally not identified until they are launched against a target, our current or future defenses may not be adequate to protect against new or revised techniques.
In the ordinary course of business, we and third-parties on whose systems we rely have been targeted by malicious cyber-attacks, although our systems have been sufficiently resilient to prevent disruption of our operations.
Our operations could be negatively affected in the future if such disruptions were to recur. In addition, certain of our clean energy customers began experiencing regulatory-related supply chain issues in 2022 that resulted in delays, shortages of, and increased costs for, the materials necessary to construct certain solar renewable projects, which affected our ability to perform these projects.
Our operations and/or our customers could be negatively affected by market-related supply chain disruptions caused by delays, shortages of, and increased costs for, the materials necessary to perform projects.
These agencies or governments could change their interpretation of current regulations and/or may impose additional regulations, which could have an adverse effect on our customers, reduce demand for our services and adversely affect our results of operations, cash flows and liquidity.
These factors, as well as advances in artificial intelligence and government policies, including spending policies, related to artificial intelligence, could have an adverse effect on our customers, reduce demand for our services and adversely affect our results of operations, cash flows and liquidity.
We expect the current elevated levels of inflation to persist for the foreseeable future and result in continued inflationary pressure on our labor, materials and fuel costs, in particular, if we continue to expand our operations and volume of work.
Recent inflationary conditions and general labor shortages have resulted in wage inflation as well as increased competition for skilled labor. Even if inflationary pressures moderate, we expect our labor, materials and fuel costs, in particular, to remain elevated if we continue to expand our operations and volume of work.
Similar risks could affect our customers, subcontractors or suppliers, indirectly affecting us.
In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks. Similar risks could affect our customers, subcontractors or suppliers, indirectly affecting us.
Removed
The inflationary environment and continued general labor shortage has resulted in wage inflation as well as increased competition for skilled labor.
Added
These agencies or governments could change their interpretation of current regulations and/or may impose additional regulations, or change government funding programs or spending policies, including the potential for reduced support for renewable energy projects.
Removed
For example, in 2022, certain of our clean energy customers began experiencing regulatory-related supply chain issues that resulted in delays in receiving the materials necessary to construct certain solar renewable projects, which affected our ability to perform these projects.
Added
In January 2025, President Trump announced a temporary pause on new and renewed federal permits and leasing for wind turbine projects, with no end date to such pause specified.
Removed
We have a significant amount of goodwill and intangible assets.
Added
Additionally, if our customers are not able to realize the expected benefits of the IIJA or IRA, it could reduce demand for our services. The new presidential administration has included as part of its agenda potential changes to U.S. tax laws.
Removed
We pursued certain of these relief provisions, which required significant judgments and estimates to be made. Our interpretations of these provisions could differ from those of the U.S. Treasury Department or the Internal Revenue Service (the “IRS”).
Added
The details of these changes have not yet emerged, but may include reducing the corporate tax rate for domestic oil and gas production, repealing green energy tax credits and extending certain provisions of the Tax Cuts and Jobs Act of 2017 (“TCJA”).
Removed
Risks Related to Strategic Transactions and Foreign Operations Acquisitions and strategic investments involve risks, including from integration of acquired businesses into our operations, which, if unsuccessful, could negatively affect our operating results, cash flows and liquidity and may not enhance shareholder value.
Added
In early February 2025, President Trump announced 25% tariffs on imports from Canada (10% tariff in the case of oil) and Mexico, which tariffs were subsequently delayed until early March 2025, a 10% tariff on imports from China (which President Trump subsequently doubled), and a 25% tariff on all steel and aluminum imports into the United States.
Removed
We have made, and may continue to make, strategic acquisitions and investments, including our acquisitions of IEA and HMG, that may expose us to operational challenges and risks, including: (i) the ability to profitably manage the acquired business or successfully integrate the operations, internal controls, procedures, financial reporting and accounting systems of the businesses we acquire into our business operations; (ii) the ability to realize the anticipated benefits from successful integration of the acquired businesses; (iii) increased indebtedness, contingent earn-out obligations and/or other liabilities; (iv) the ability to fund cash flow shortages that may occur if anticipated revenue, profits and/or cash flows are not realized or are delayed, whether by general economic or market conditions, or other unforeseen difficulties; (v) the expense of integrating acquired businesses; (vi) the ability to retain or hire the personnel required for the successful operation of the acquired business and expanded business 24 operations, in general; (vii) the ability to retain the business relationships of the acquired businesses; (viii) diversion of management’s attention; and (ix) the availability of funding sufficient to meet increased capital needs, among others.
Added
Many political and economic commentators believe that the impacts of extending certain tax benefits pursuant to the TCJA and new tariffs could potentially cause inflationary pressure that could, in turn, contribute to increases in market interest rates and a decrease in U.S. economic growth.
Removed
Acquired companies may have liabilities that we failed, or were unable to discover in the course of performing due diligence investigations. We cannot assure you that the indemnifications granted to us by sellers of acquired companies will be sufficient in amount, scope or duration to fully offset potential liabilities associated with acquired businesses.
Added
We cannot predict, however, whether, when, or to what extent these potential changes in law or policy will become effective, nor can we predict the long-term impact of these potential changes on the industries in which we operate.
Removed
Additionally, purchase agreements for certain acquisitions may not contain indemnification provisions, which would fully expose us to legacy liabilities of the related acquired business. We may learn additional information about the businesses we have acquired that could materially adversely affect us, such as unknown or contingent liabilities, unprofitable projects, litigation-related liabilities and liabilities related to compliance with applicable laws.
Added
During past administrations, increased tariffs were implemented on goods imported into the United States, particularly from China, Canada, and Mexico. As China is a major global exporter of steel, solar panels, and aluminum, the tariffs on these specific imports led to price increases and supply chain issues for materials used in the construction of many of our customers projects.
Removed
Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business. We generally require that key management and former principals of the businesses we acquire enter into non-competition agreements in our favor.
Added
In early February 2025, the Trump administration announced 25% tariffs on imports from Canada (10% tariff in the case of energy exports) and Mexico, which tariffs were subsequently delayed until early March 2025, a 10% tariff on imports from China (which President Trump subsequently doubled), and a 25% tariff on all steel and aluminum imports into the United States.
Removed
If we are unable, and the courts refuse to enforce the non-competition agreement entered into by such person or persons, we might be subject to increased competition. Failure to successfully manage the operational challenges and risks associated with, or resulting from, our acquisitions could adversely affect our results of operations, cash flows and liquidity.
Added
These and similar types of trade policies could lead to issues with global supply chains on a macroeconomic scale, including steel, solar panels and construction equipment, and also affect oil and gas production activity in Canada, which could have a material adverse effect on our business, financial condition and results of operations.
Removed
As with our acquisitions of IEA and HMG, we may pay for acquisitions or strategic investments with increased borrowings under our credit facility or through the issuance of debt instruments, which could result in higher levels of indebtedness and negatively affect our ability to service our debt within the scheduled repayment terms, or our ability to remain in compliance with our debt covenants and to maintain our investment grade credit rating.
Added
In addition, our operations and/or our customers, particularly in the Pipeline Infrastructure segment, could be negatively affected by market and political uncertainty, including from unrest and/or military actions, such as heightened geopolitical tensions and conflicts, including the Russia-Ukraine conflicts and the escalated tensions in the Middle East, among others.
Removed
Additionally, from time to time, we may pay for acquisitions with shares of our common stock, which could dilute the ownership interests of our common shareholders. In addition, in connection with most of our acquisitions, we agree to substantial future earn-out arrangements.
Added
Additionally, we could experience negative effects on our business and operations from possible longer-term changes in consumer and customer behavior.
Removed
To the extent we defer payment of an acquisition’s purchase price through a cash earn-out arrangement, it will reduce our cash flows in subsequent periods. We may decide to pursue acquisitions with which our investors may not agree.
Added
In addition, some of our contracts require that we assume the risk should actual site conditions vary from those expected. Some of our projects involve challenging engineering, procurement and construction phases, which may occur over extended time periods.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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ITEM 1C. CYBERSECURITY Cybersecurity risk management is an important part of MasTec's overall risk management efforts. We maintain a comprehensive enterprise-wide information security program that comprises policies and controls designed to identify, safeguard against, detect, respond to, mitigate and manage reasonably foreseeable cybersecurity risks and threats.
Added
Item 1C. “Cybersecurity,” for additional details. Sustainability and Climate-Related Governance . The Nominating, Sustainability and Corporate Governance Committee of the Board of Directors has oversight of sustainability-oriented matters for MasTec, including overseeing MasTec’s approach to considering, evaluating and integrating climate-related risks and opportunities into MasTec’s business strategy and decision-making processes.
Removed
Our approach utilizes diverse security tools to prevent, identify, investigate, resolve and recover from vulnerabilities and security incidents. These include, but are not limited to, internal reporting, monitoring and detection tools.
Added
This Committee is also responsible for considering MasTec’s material sustainability issues, discussing associated risks with the full Board and management and reviewing and considering whether MasTec has appropriate policies, processes, strategies and initiatives in place to address such matters, including climate-related risks and opportunities.
Removed
We use a collaborative, enterprise-wide strategy to address cybersecurity risks and allocate significant resources to our cybersecurity and risk management processes, which efforts are intended to adapt to the evolving cybersecurity landscape and promptly address emerging threats.
Added
The potential implications and financial impact of climate-related risks and opportunities remains uncertain, but we recognize that these risks and opportunities could be significant to our business.
Removed
Our cybersecurity risk management program aligns with the National Institute of Standards and Technology (NIST) framework and is organized into five key functions: identification, protection, detection, response and recovery. We regularly assess the threat landscape and employ a layered cybersecurity strategy to prevent, detect and mitigate threats.
Added
We regularly assess our business risks and opportunities, and we are working to develop our processes to assess the potential effects and magnitude of climate-related risks and opportunities on our operations, financial results and key business strategies, as guided by the recommendations of the TCFD. Strategy The key elements of our business strategy are as follows: Operational Excellence .
Removed
Our Chief Information Officer (“CIO”) and our Chief Information Security Officer (“CISO”), who report to our executive management team, are responsible for identifying, assessing and managing material cybersecurity risks, establishing processes to monitor such risks, putting appropriate mitigation measures in place, maintaining appropriate policies and procedures for our cybersecurity program and providing periodic updates to the Audit Committee of our Board of Directors.
Added
We seek to effectively manage our projects and services to maintain appropriate profit margins and cash flows. We also strive to identify opportunities for leverage within our business, such as deploying resources across multiple customers and projects in order to enhance our operating effectiveness and utilization rates. We also seek to maintain strong working capital management practices.
Removed
To this end, our cybersecurity team conducts annual reviews of enterprise-level cybersecurity risks. Additionally, we maintain company-wide policies and procedures concerning cybersecurity matters, which are subject to annual internal review, or more frequent, as warranted. MasTec's CISO oversees the development and implementation of our information security program and reports on cybersecurity matters to the Audit Committee.
Added
Our management team pursues actions and programs designed to achieve these goals, such as increasing accountability throughout our organization, effectively managing customer contract bidding procedures, prioritizing acquisition and operational integration, evaluating opportunities to improve our working capital cycle time, hiring and retaining experienced operating and financial professionals, and developing, expanding and integrating the use of financial systems and information technology capabilities, as well as implementing strong cybersecurity policies and practices, within our business.
Removed
Our CIO and CISO each has over 15 years of experience in cybersecurity oversight, and our cybersecurity team is composed of personnel with a broad range of professional cybersecurity experience and expertise, and includes members with cybersecurity certifications, such as the Certified Information Systems Security Professional (CISSP) certification.
Added
Focus on Growth Opportunities . We believe that our end-markets offer diverse and numerous growth opportunities, and we expect continued spending by key customers in many of the industries we serve.
Removed
Our cybersecurity risk management program encompasses such items as simulations and tabletop exercises with management's participation and incorporates external resources and advisors as necessary. All employees undergo security awareness training, with regular testing through simulated phishing emails. Certain employee positions require additional role-based, specialized security awareness or other cybersecurity training, as applicable.
Added
We expect development of wireless and wireline/fiber infrastructure; development of data center infrastructure, including the installation and connectivity of electrical systems; development of clean energy infrastructure; expansion, maintenance and upgrades of power delivery infrastructure, including electrical and gas transmission lines and distribution networks; development of pipeline infrastructure, including for water and carbon capture sequestration, and pipeline integrity work; and heavy civil and industrial infrastructure construction projects to be areas of investment and opportunity in the coming years.
Removed
We maintain a security operations center, which is staffed 24/7, to strengthen our monitoring and alerting efforts. Regular simulations, drills and assessments are conducted to test our defenses from both a technical and an operational perspective.
Added
We intend to use our broad geographic presence, technical expertise, financial and operational resources, customer relationships and full range of services to capitalize on these trends and grow our business. Effective Capital Structure Management .
Removed
Our CIO and CISO routinely inform our Chief Financial Officer and other members of management, as appropriate, about threats, including assessments of threat levels, trends, incidents and related remediation plans, including matters related to the prevention, detection and remediation of any incidents in accordance with our cybersecurity program.
Added
We have made significant investments in transformational acquisition activities over the past few years and have maintained investment grade rating since 2021 despite a post-acquisition increase in our leverage, primarily to finance the acquisition of Infrastructure and Energy Alternatives, Inc. (“IEA”) in 2022.
Removed
We regularly collect data on cybersecurity threats and risk areas and conduct periodic external penetration and other tests to assess the effectiveness of our processes and procedures. We assess risks associated with third-party providers as part of our overall cybersecurity risk management framework by reviewing system and organization controls reports, when available, and other independent reports.
Added
We expect to manage our capital structure in the future to maintain this credit rating and we believe that we have sufficient capital resources to fund our planned operations. We have a $2.25 billion senior unsecured credit facility, under which we had approximately $1,792.6 million of revolving loan borrowing availability as of December 31, 2024.
Removed
We also generally require third parties to, among other things, maintain security controls to protect our confidential information and to promptly notify us of material breaches that may impact our data. Our Board of Directors has oversight of our enterprise risk assessment and risk management processes, as well as the steps taken to mitigate these risks, including for cybersecurity matters.
Added
We may consider opportunities to borrow additional funds, refinance, repurchase or retire outstanding debt, or repurchase shares of our common stock as part of our ongoing capital structure evaluation. See Item 7.
Removed
The Audit Committee of our Board of Directors has oversight of cybersecurity risk assessment and risk management policies as part of its risk management oversight responsibilities, and is responsible for ensuring that the Company has processes in place to identify, evaluate and manage cybersecurity risks, as well as appropriate processes and programs to mitigate cybersecurity incidents if they occur.
Added
“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Summary of Financial Condition, Liquidity and Capital Resources,” for discussion of our capital resources and recent activities. Leverage Core Performance and Expertise through Strategic Acquisitions . We pursue selected acquisitions, investments and strategic arrangements that allow us to expand our operations, service offerings, customer base or geographic reach.
Removed
The Audit Committee actively engages in cybersecurity risk discussions and receives periodic updates on the Company's cybersecurity program from our CISO, including updates on various cybersecurity matters such as risk assessments, threats, incidents, prevention, 29 detection and remediation of incidents, mitigation strategies, areas of emerging risk and industry trends, among other topics.
Added
We have diversified our business and expanded our service offerings and geographic footprint in recent years, both organically and through acquisitions. For discussion of our recent acquisitions, see Item 7.
Removed
Significant cybersecurity matters, including those related to incidents, are escalated to the Board of Directors. We face cybersecurity threats in the ordinary course of our business and have faced cybersecurity threats and breach attempts in the past. Such threats and breach attempts have not materially affected our business, strategy, results of operations or financial condition.
Added
“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Business.” In our efforts to maximize the potential of the businesses we acquire, we work to integrate them into our operations and internal control environment in a timely and efficient manner.
Removed
At any given time, however, we may face known or unknown cybersecurity risks and threats that cannot be fully prevented or mitigated, and we may discover vulnerabilities in our cybersecurity programs. Therefore, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
Added
We evaluate our business and operations on a regular basis, and from time to time, we may divest certain businesses or assets or curtail selected business activities or operations that do not produce adequate revenue or margin or those that no longer fit within our long-term business strategy. 12 Services Our core services are the engineering, building, installation, maintenance and upgrade of infrastructure, primarily for providers of communications, utility, power (including renewable and other energy generation sources), civil and transportation infrastructure.
Removed
For more information on the cybersecurity risks we face, please refer to “We rely on information, communications and data systems in our operations. Systems and information technology interruptions and/or data security breaches could adversely affect our ability to operate, our operating results, our data security or our reputation.” in Item 1A. “Risk Factors.”
Added
We also provide certain other services. The services we provide to our customers primarily encompass the following: Build . We build infrastructure for customers across a range of industries.
Added
We specialize in building infrastructure for wireless and wireline/fiber communications; clean energy infrastructure, including for renewable energy power generation; pipeline infrastructure, including for natural gas, water, carbon capture sequestration and other product transport; power delivery services, including electrical and gas transmission and distribution systems; industrial and heavy civil infrastructure, including roads, bridges and rail; and water infrastructure. Install .
Added
We install electrical and gas distribution and transmission systems, power generation, civil and industrial facilities, pipelines, fiber optic and other cables, and provide various install-to-the-home services in a variety of environments for our customers. Maintain, Upgrade and Other Services . We offer 24 hour/365 days-a-year maintenance and upgrade support to our customers.
Added
Our comprehensive service offerings include the regular maintenance of our customers’ distribution facilities, networks and infrastructure, including communications, power generation, pipeline, electrical distribution and transmission and civil and industrial infrastructure. We also provide emergency services for service restoration following natural disasters and accidents, and we perform environmental planning, compliance and remediation.
Added
Our upgrade work ranges from routine replacements and upgrades to major overhauls. Customers We have longstanding relationships with many customers, and often provide services under master service and other service agreements, which are generally multi-year agreements.
Added
Our master service agreements are typically exclusive up to a specified dollar amount per work order for each defined geographic area, but do not obligate our customers to undertake any infrastructure projects or other work with us.
Added
Work performed under master service and other service agreements is usually generated through work orders, each of which is performed for a fixed fee. Services provided under these agreements range from construction, installation, maintenance and upgrade services to project management and engineering services.
Added
Master service and other service agreements are frequently awarded on a competitive bidding basis, although customers are sometimes willing to negotiate contract extensions beyond their original terms without re-bidding. Our master service and other service agreements have various terms, depending upon the nature of the services provided, and typically provide for termination on short or no advance notice.
Added
For the years ended December 31, 2024, 2023 and 2022, revenue derived from projects performed under master service and other service agreements totaled 41%, 40% and 51%, respectively, of consolidated revenue.
Added
The remainder of our work is generated pursuant to contracts for specific projects or jobs requiring the construction and installation of an entire infrastructure system or specified units within an entire infrastructure system.
Added
Customers are billed with varying frequency, the timing of which is generally dependent upon advance billing terms, milestone billings based on completion of certain phases of the work, or when services are provided.
Added
Under the typical payment terms of master and other service agreements and contracts for specific projects, the customer makes progress payments based on quantifiable measures of performance as defined in the agreements.
Added
Some of our contracts include retainage provisions, under which a portion of the contract amount (generally, from 5% to 10% of billings) can be retained by the customer until final contract settlement.
Added
We believe that our industry experience, technical expertise, broad service capabilities, operational scalability, geographic reach, financial stability and reputation for reliability, efficiency and customer service, as well as the relationships developed between our customers and our senior management and project management teams are important to our being selected and retained by our customers.
Added
See Note 13 - Segments and Related Information and Note 14 - Commitments and Contingencies in the notes to the audited consolidated financial statements, which are incorporated by reference, for customer concentration information.
Added
Backlog Estimated backlog represents the amount of revenue we expect to realize over the next 18 months from future work on uncompleted construction contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options.
Added
Our estimated backlog also includes amounts under master service and other service agreements and our proportionate share of estimated revenue from proportionately consolidated non-controlled contractual joint ventures.
Added
Estimated backlog for work under master service and other service agreements is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. Based on current expectations of our customers’ requirements, we anticipate that we will realize approximately 75% of our estimated year-end 2024 backlog in 2025.
Added
The following table presents 18-month estimated backlog by reportable segment as of the dates indicated: Reportable Segment (in millions) : December 31, 2024 September 30, 2024 December 31, 2023 Communications $ 6,010 $ 5,855 $ 5,627 Clean Energy and Infrastructure 4,244 4,141 3,115 Power Delivery 3,309 3,160 2,440 Pipeline Infrastructure 735 702 1,225 Other — — — Estimated 18-month backlog $ 14,298 $ 13,858 $ 12,407 As of December 31, 2024, 54% of our backlog is estimated to be attributable to amounts under master service or other service agreements, pursuant to which our customers are not contractually committed to purchase a minimum amount of services.
Added
Most of these agreements can be 13 canceled on short or no advance notice. Timing of revenue for construction and installation projects included in our backlog can be subject to change as a result of customer, regulatory or other delays or cancellations, including from factors discussed in Item 7.
Added
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “General Economic, Market and Regulatory Conditions.” These effects, among others, could cause estimated revenue to be realized in periods later than originally expected, or not at all. We occasionally experience postponements, cancellations and reductions in expected future work due to these effects and/or other factors.
Added
There can be no assurance as to our customers’ requirements or that actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings. Backlog is a common measurement used in our industry.
Added
Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Backlog differs from the amount of our remaining performance obligations, which are described in Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is incorporated by reference.
Added
As of December 31, 2024, total 18-month backlog differed from the amount of our remaining performance obligations due primarily to the inclusion of $7.2 billion of estimated future revenue under master service and other service agreements within our backlog estimates, as described above, and the exclusion of approximately $3.0 billion of remaining performance obligations and estimated future revenue under master service and other service agreements in excess of 18 months, which amount is not included in the backlog estimates above.
Added
Backlog expected to be realized in 2025 differs from the amount of remaining performance obligations expected to be recognized for the same period due primarily to the inclusion of approximately $4.2 billion of estimated future revenue under master service and other service agreements included within our backlog estimate, which is not included within our remaining performance obligations for the same period.
Added
Sales and Marketing Our customers increasingly require resources from multiple disciplines. Therefore, our subsidiary services companies market their services not only individually, but also in combination with other companies, including other MasTec companies and independent companies, to provide what we believe are the most efficient and effective solutions to meet our customers’ demands.
Added
Through our unified MasTec ® brand and an integrated organizational structure designed to permit rapid deployment of our services, we are able to quickly and efficiently allocate resources to meet customer needs. We offer services that are branded under the MasTec ® service mark and other service marks.
Added
We have a business development and marketing plan emphasizing the MasTec ® registered service mark and trade names of certain acquired companies, as well as an integrated service offering to position ourselves as a provider of a full range of service solutions, providing services including installation as well as sophisticated engineering, design and integration.
Added
We believe that our longstanding relationships with our customers, industry expertise and our reputation for reliability, efficiency and customer service facilitate our potential and recurring business relationships. Our marketing efforts are principally carried out by the management of our business units and project groups in coordination with our corporate business development organization.
Added
Our management team has many years of industry experience, both at the service provider level, and in some cases, with the customers we serve. Our business unit and project group managers market directly to existing and potential customers for new contracts and also seek our inclusion on lists of vendors invited to submit proposals for service agreements and individual projects.
Added
We also market our services in conjunction with certain business partners, strategic investments and other arrangements. Our executive management team supplements these efforts at the national level. Safety and Insurance/Risk Management We have a proactive safety culture and we strive to instill and enforce safe work habits in our employees.
Added
Our employees are required to participate in training programs relevant to their employment, including all those required by law. We actively train our workforce in everyday safety practices and provide detailed guidelines that are required to be followed as work tasks are contemplated and completed.
Added
Training programs are tailored to an employee’s job function, responsibilities and level of experience and are designed in accordance with industry best practices and standards. We evaluate employees in part based upon their safety records and the safety records of the employees they supervise.
Added
Team members are responsible for preventing incidents, injuries and occupational illnesses, and our project leadership team is tasked with ensuring that projects are accomplished in a safe, productive, environmentally and quality-focused manner.
Added
Our business units have established robust safety programs to monitor and improve compliance with safety procedures and regulations, and through our risk management programs, we educate our staff, subcontractors and suppliers on safety matters. We strive continuously to assess and improve our safety programs and performance.
Added
We also provide training for other workplace and risk management programs, including for cybersecurity, discrimination and harassment, human trafficking awareness, emergency preparedness and other workplace hazards, among others. Our business involves the use of heavy equipment and exposure to potentially dangerous workplace conditions.
Added
While we are committed to operating safely and prudently, we are subject to claims by employees, customers and third parties for property damage and personal injuries that occur in connection with our work. Our insurance policies are subject to high deductibles and we are self-insured up to the amount of the deductible.
Added
We maintain insurance policies for workers’ compensation, general liability and automobile liability that are subject to per claim deductibles. In addition, we maintain excess umbrella coverage and an insurance policy with respect to employee group medical claims, which is subject to annual per employee maximum losses.
Added
We also manage certain of our insurance liabilities indirectly through our wholly-owned captive insurance company, which reimburses claims up to the applicable insurance limits. We are required to post collateral to certain of our insurance carriers, generally in the form of letters of credit, surety bonds and cash.
Added
See Note 14 - Commitments and Contingencies in the notes to the audited consolidated financial statements, which is incorporated by reference. Adverse climate and weather events, including drought conditions and high winds, have increased operational and legal risks in certain locations for us and other contractors.
Added
In particular, wildfire risks associated with electrical power and other infrastructure have increased the potential for liabilities and related costs (particularly as these events can be started by electrical power and other infrastructure on which we have performed services), which could adversely affect our financial results and position.
Added
We procure insurance from the commercial insurance market to cover a portion of such risks; however, limited capacity and high costs in insurance markets have increased our reliance on self-insurance for these exposures with respect to certain geographic areas. 14 Suppliers, Materials and Working Capital Under many of our contracts, our customers provide the necessary materials and supplies for projects and we are responsible for the installation of, but not the cost or warranty of, those materials.
Added
Under certain other projects, we purchase the necessary materials and supplies on behalf of our customers from third-party providers. We are not dependent on any one vendor for project-related materials or supplies required for the projects we manage. We also depend on the availability of certain equipment to perform our services.
Added
We operate a diverse fleet of on-road and off-road equipment. Substantially all of our equipment is obtained from third-party vendors, and we are not dependent upon any single vendor for our equipment requirements. We also utilize independent contractors to assist on projects and to help us manage our work flow.
Added
Our independent contractors typically provide their own vehicles, tools and insurance coverage. We are not dependent on any single independent contractor. A number of factors that we may not be able to accurately predict or control could result in increased costs for, or delays in delivery of, materials and equipment, including supply chain disruptions.
Added
In 2022, certain market-related supply chain disruptions affected our industry, and as a result, we increased our level of purchasing activity to secure the necessary materials and equipment to meet our project requirements. While these supply chain disruptions moderated primarily in 2023, our operations could be negatively affected in the future if such disruptions were to recur.
Added
In addition, certain of our clean energy customers began experiencing regulatory-related supply chain issues in 2022 that resulted in delays, shortages of, and increased costs for, the materials necessary to construct certain solar renewable projects, which affected our ability to perform these projects.

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Item 2. Properties

Properties — owned and leased real estate

0 edited+2 added−1 removed1 unchanged
Removed
We believe that our existing facilities are adequate for our current and planned levels of operation.
Added
We believe that our existing facilities are adequate for our current and planned levels of operation. ITEM 3. LEGAL PROCEEDINGS The information set forth in Note 14 - Commitments and Contingencies in the notes to the audited consolidated financial statements in Item 8 of this Form 10-K is incorporated by reference.
Added
MasTec has elected to use a $1 million threshold for disclosing proceedings arising under federal, state or local environmental laws, which proceedings involve potential monetary sanctions, and in which a governmental authority is a party. MasTec believes proceedings under this threshold are not material to its business and financial condition.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+153 added−1 removed0 unchanged
ITEM 3. LEGAL PROCEEDINGS The information set forth in Note 14 - Commitments and Contingencies in the notes to the audited consolidated financial statements in Item 8 of this Form 10-K is incorporated by reference.
Refer to Note 4 - Fair Value of Financial Instruments, Note 14 - Commitments and Contingencies and Note 15 - Related Party Transactions in the notes to the audited consolidated financial statements, which are incorporated by reference, for additional information related to our off-balance sheet arrangements.
Removed
MasTec has elected to use a $1 million threshold for disclosing proceedings arising under federal, state or local environmental laws, which proceedings involve potential monetary sanctions, and in which a governmental authority is a party. MasTec believes proceedings under this threshold are not material to its business and financial condition.
Added
Item 3. “Legal Proceedings” of this Form 10-K. Comparison of Fiscal Year Results The following table, which may contain slight summation differences due to rounding, reflects our consolidated results of operations in dollar and percentage of revenue terms for the periods indicated (dollar amounts in millions).
Added
Our consolidated results of operations are not necessarily comparable from period to period due to the effect of recent acquisitions and certain other items, which are described in the comparison of results section below.
Added
In this discussion, “acquisition” results are defined as results from acquired businesses for the first twelve months following the dates of the respective acquisitions, with the balance of results for a particular item attributed to “organic” activity. Unless otherwise stated, comparisons are for the years ended December 31, 2024 and 2023.
Added
For the Years Ended December 31, Change 2024 2023 $ % Revenue $ 12,303.5 100.0 % $ 11,995.9 100.0 % $ 307.5 2.6 % Costs of revenue, excluding depreciation and amortization 10,676.0 86.8 % 10,613.8 88.5 % 62.2 0.6 % Depreciation 366.8 3.0 % 433.9 3.6 % (67.2) (15.5) % Amortization of intangible assets 139.9 1.1 % 169.2 1.4 % (29.4) (17.4) % General and administrative expenses 684.5 5.6 % 698.9 5.8 % (14.4) (2.1) % Interest expense, net 193.3 1.6 % 234.4 2.0 % (41.1) (17.6) % Equity in earnings of unconsolidated affiliates, net (30.2) (0.2) % (30.7) (0.3) % 0.5 (1.5) % Loss on extinguishment of debt 11.3 0.1 % — — % 11.3 100.0 % Other expense (income), net 11.0 0.1 % (40.9) (0.3) % 51.9 (126.9) % Income (loss) before income taxes $ 251.0 2.0 % $ (82.7) (0.7) % $ 333.7 (403.4) % (Provision for) benefit from income taxes (51.5) (0.4) % 35.4 0.3 % (87.0) (245.6) % Net income (loss) $ 199.4 1.6 % $ (47.3) (0.4) % $ 246.7 NM Net income attributable to non-controlling interests 36.6 0.3 % 2.7 0.0 % 34.0 NM Net income (loss) attributable to MasTec, Inc. $ 162.8 1.3 % $ (49.9) (0.4) % $ 212.7 (425.9) % NM - Percentage is not meaningful 39 Comparison of Years Ended December 31, 2024 and 2023 Revenue .
Added
On a consolidated basis, revenue increased by $308 million driven by our segment results as follows: revenue increased in our Communications segment by approximately $201 million, or 6%, in our Clean Energy and Infrastructure segment by approximately $130 million, or 3%, in our Pipeline Infrastructure segment by approximately $61 million, or 3%, and decreased in our Power Delivery segment by approximately $53 million or 2%.
Added
Acquisitions contributed $43 million of increased revenue for the year ended December 31, 2024 and organic revenue increased by approximately $265 million, or 2% as compared with 2023. See “Analysis of Revenue and EBITDA by Segment” below for additional information and discussion related to segment revenues. Costs of revenue, excluding depreciation and amortization.
Added
Higher levels of revenue contributed an increase of $272 million in costs of revenue, excluding depreciation and amortization, and improved productivity contributed a decrease of approximately $210 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue decreased by approximately 170 basis points to 86.8% of revenue in 2024 from 88.5% of revenue in 2023.
Added
The basis point decrease was due to a combination of improved project efficiencies and project mix, primarily within our Clean Energy and Infrastructure and Pipeline Infrastructure segments, as well as an $8 million decrease in certain acquisition and integration costs offset, in part, by reduced productivity from the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work.
Added
See “Analysis of Revenue and EBITDA by Segment” below for discussion of operating capacity effects by segment. Depreciation.
Added
As a percentage of revenue, depreciation decreased by approximately 60 basis points, due primarily to a net reduction of approximately $34 million related to a change in the depreciable lives of certain machinery and equipment to better align the respective assets’ lives with their expected useful lives, and, in part, from lower levels of property and equipment, net.
Added
Amortization of intangible assets. The decrease in amortization of intangible assets was due to a combination of the effects of timing of amortization for certain assets and the completion of amortization for certain intangible assets associated with prior years’ acquisitions.
Added
As a percentage of revenue, amortization of intangible assets decreased by approximately 30 basis points as compared with the same period in 2023. General and administrative expenses .
Added
The decrease in general and administrative expenses was primarily due to a $64 million reduction in acquisition and integration costs, a decrease in information technology expenses and an increase in gains on sales of assets, net, offset, in part, by an increase in compensation expense and the effects of timing of ordinary course legal and other settlement matters.
Added
Overall, general and administrative expenses decreased by approximately 30 basis points as a percentage of revenue for the year ended December 31, 2024 as compared with the same period in 2023. Interest expense, net.
Added
The decrease in interest expense, net, was primarily due to lower average outstanding balances under our credit facility and term loans, which accounted for a reduction in interest expense of $54 million.
Added
The decrease in interest expense, net, was offset, in part, by an increase in interest expense from senior notes of approximately $11 million, primarily driven by the second quarter 2024 issuance of our 5.900% Senior Notes. See “Financial Condition, Liquidity and Capital Resources” discussion below for details of our debt instruments. Equity in earnings of unconsolidated affiliates.
Added
For the years ended December 31, 2024 and 2023, equity in earnings from unconsolidated affiliates, net, totaled approximately $30 million and $31 million, respectively, and related primarily to our investments in the Waha JVs. Loss on extinguishment of debt.
Added
We incurred a loss on debt extinguishment of approximately $11 million for the year ended December 31, 2024 in connection with the second quarter 2024 repayment of our 6.625% IEA Senior Notes and Three-Year Term Loan Facility. Other expense (income), net.
Added
For the year ended December 31, 2024, other expense, net, included approximately $5 million of expense, net, from changes to estimated Earn-out accruals, approximately $5 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business and approximately $6 million of asset impairments related to certain fixed assets, offset, in part, by approximately $3 million of other miscellaneous income, net, including from legal and other settlements.
Added
For the year ended December 31, 2023, other income, net, included approximately $13 million of income, net, from changes to estimated Earn-out accruals, approximately $3 million of income from the final settlement and expiration of certain warrants related to the acquisition of IEA, approximately $29 million of other miscellaneous income, including from insurance and other settlements, and approximately $1 million of income from changes in the fair value of additional contingent payments to former owners of an acquired business, offset, in part, by approximately $3 million of impairment losses on an investment.
Added
(Provision for) benefit from income taxes. For the year ended December 31, 2024, our effective tax rate was an expense of 20.5% as compared with a benefit of 42.8% for the same period in 2023. Our effective tax rate for the year ended December 31, 2024 included the effects of a lower state income tax rate and tax credits.
Added
For the year ended December 31, 2023, our effective tax rate included a benefit of approximately $8 million related to adjustments resulting from the finalization of our 2022 tax returns and the effects of a net tax benefit of approximately $11 million from share-based payment awards, offset, in part, by an increase in non-deductible expenses.
Added
Net income attributable to non-controlling interests. Net income attributable to non-controlling interests was $37 million for the year ended December 31, 2024, as compared with $3 million for the same period in 2023.
Added
The increase was primarily attributable to increased operating activity, including a full year of results from certain subsidiaries the Company acquired in 2023 which have minority interest holders. 40 Analysis of Revenue and EBITDA by Segment We review our operating results by reportable segment.
Added
See Note 13 - Segments and Related Information in the notes to the audited consolidated financial statements, which is incorporated by reference. Our reportable segments are: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Pipeline Infrastructure and (5) Other. Management’s review of segment results includes analyses of trends in revenue, EBITDA and EBITDA margin.
Added
EBITDA for segment reporting purposes is calculated consistently with our consolidated EBITDA calculation. EBITDA margin is calculated by dividing EBITDA by revenue for the same period. See the discussion of our non-U.S. GAAP financial measures, including certain adjusted non-U.S. GAAP measures, as described below, following the comparison of results discussion.
Added
The following table, which may contain slight summation differences due to rounding, presents revenue, EBITDA and EBITDA margin by segment for the periods indicated (dollar amounts in millions): For the Years Ended December 31, For the Years Ended December 31, Revenue Change EBITDA and EBITDA Margin Change Segment: 2024 2023 $ % 2024 2023 (a) $ % Communications $ 3,460.0 $ 3,259.5 $ 200.6 6.2 % $ 333.7 9.6 % $ 269.2 8.3 % $ 64.6 24.0 % Clean Energy and Infrastructure 4,092.1 3,962.0 130.1 3.3 % 257.0 6.3 % 132.4 3.3 % 124.6 94.1 % Power Delivery 2,682.1 2,735.1 (52.9) (1.9) % 187.7 7.0 % 207.8 7.6 % (20.1) (9.7) % Pipeline Infrastructure 2,133.6 2,072.8 60.7 2.9 % 389.4 18.3 % 284.4 13.7 % 105.1 36.9 % Other — — — — % 26.2 NM 25.0 NM 1.2 4.8 % Eliminations (64.3) (33.5) (31.0) 92.8 % — — — — — — Segment Total $ 12,303.5 $ 11,995.9 $ 307.6 2.6 % $ 1,194.1 9.7 % $ 918.8 7.7 % $ 275.3 30.0 % Corporate — — — — (243.3) — (163.9) — (79.3) 48.4 % Consolidated Total $ 12,303.5 $ 11,995.9 $ 307.5 2.6 % $ 950.8 7.7 % $ 754.9 6.3 % $ 196.0 26.0 % NM - Percentage is not meaningful (a) For the year ended December 31, 2023, Communications, Clean Energy and Infrastructure and Power Delivery EBITDA included $22.5 million, $37.1 million and $8.5 million, respectively, of acquisition and integration costs related to our recent acquisitions, and Corporate EBITDA included $3.8 million of such costs.
Added
Communications Segment Results Revenue. The increase in revenue was driven primarily by higher levels of wireless, wireline and utility project activity due, in part, to customer project timing in our wireless and wireline businesses. These increases were offset, in part, by a decrease in our install-to-the-home project activity due, in part, to changes in consumer behavior resulting in lower demand.
Added
EBITDA. As a percentage of revenue, EBITDA increased by approximately 140 basis points, or $48 million, due to improved project efficiencies, including from our wireless and wireline businesses, and as a result of a reduction of approximately $23 million in certain acquisition and integration costs. Higher levels of revenue resulted in an increase in EBITDA of approximately $17 million.
Added
Clean Energy and Infrastructure Segment Results Revenue . The increase was primarily due to higher levels of heavy civil project activity, offset, in part, by lower levels of renewable and certain industrial and other infrastructure project work, due to various factors affecting timing of project work. EBITDA.
Added
As a percentage of revenue, EBITDA increased by approximately 290 basis points, or $120 million, due to a combination of improved productivity, and efficiencies, including from certain renewable, industrial and infrastructure project work, and a reduction of approximately $37 million in certain acquisition and integration costs, offset, in part, by the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work.
Added
Higher levels of revenue resulted in an increase in EBITDA of approximately $4 million. Power Delivery Segment Results Revenue .
Added
For the year ended December 31, 2024, acquisitions contributed $19 million of revenue, whereas organic revenue decreased by approximately $72 million as compared with 2023, due primarily to lower levels of project activity, including timing-related decreases in transmission and distribution-related project work, including due to regulatory effects, as well as lower levels of certain facilities and infrastructure-related project work.
Added
These decreases were offset, in part, by an increase in substation-related project activity, as well as emergency storm restoration services. EBITDA.
Added
As a percentage of revenue, EBITDA decreased by approximately 60 basis points, or $16 million, due to a combination of reduced project efficiencies and mix, including from the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work, including due to regulatory effects, offset, in part, by a reduction of approximately $9 million in certain acquisition and integration costs.
Added
Lower levels of revenue contributed a decrease in EBITDA of approximately $4 million. 41 Pipeline Infrastructure Segment Results Revenue.
Added
The increase was due primarily to higher levels of project activity, including from project timing-related increases in midstream project activity due to improved market and regulatory conditions, and increases in other pipeline project activity, offset, in part, by a reduction in large-diameter project activity, pipeline integrity services and other infrastructure-related work. EBITDA.
Added
As a percentage of revenue, EBITDA increased by approximately 450 basis points, or $97 million, due primarily to project efficiencies and improved productivity, including as a result of improved operating leverage from higher levels of revenue, as well as the effects of project mix. Higher levels of revenue contributed an increase in EBITDA of approximately $8 million.
Added
Other Segment Results EBITDA. EBITDA from Other businesses relates primarily to equity in earnings from our investments in the Waha JVs, offset, in part, by losses from other businesses and investments. Corporate Results EBITDA.
Added
For the year ended December 31, 2024, Corporate EBITDA included approximately $11 million of a loss on debt extinguishment, $5 million of expense from changes to estimated Earn-out accruals, and $5 million of expense from the changes in the fair value of additional contingent payments to former owners of an acquired business.
Added
For the year ended December 31, 2023, Corporate EBITDA included approximately $13 million of income, net, from changes to estimated Earn-out accruals, $3 million of income from the final settlement and expiration of certain warrants related to the acquisition of IEA, and $1 million of income from the changes in the fair value of additional contingent payments to former owners of an acquired business.
Added
Corporate expenses for the year ended December 31, 2024 not related to the above-described items increased by approximately $41 million as compared with the same period in 2023, due primarily to the effects of timing of ordinary course legal and other settlement matters, increases in compensation expense, information technology, travel, and other administrative expenses, offset, in part, by a reduction in professional fees and certain acquisition and integration costs.
Added
Comparison of Years Ended December 31, 2023 and 2022 Refer to Item 7.
Added
“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Years Ended December 31, 2023 and 2022” of the Company’s 2023 Annual Report on Form 10-K (“the 2023 Form 10-K”) for a comparison of results for the years ended December 31, 2023 and 2022, which discussion is incorporated herein by reference.
Added
Foreign Operations Our foreign operations are primarily in Canada. See Note 13 - Segments and Related Information in the notes to the audited consolidated financial statements, which is incorporated by reference. Non-U.S. GAAP Financial Measures As appropriate, we supplement our reported U.S. GAAP financial information with certain non-U.S.
Added
GAAP financial measures, including earnings before interest, income taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA (“Adjusted EBITDA”), adjusted net income (“Adjusted Net Income”), adjusted net income attributable to MasTec, Inc. (“Adjusted Net Income Attributable to MasTec, Inc.”) and adjusted diluted earnings per share (“Adjusted Diluted Earnings Per Share”). These “adjusted” non-U.S.
Added
GAAP measures exclude, as applicable to the respective periods, non-cash stock-based compensation expense; loss on extinguishment of debt; changes in fair value of acquisition-related contingent items; acquisition and integration costs related to certain acquisition activity, as more fully described below; fair value gains or losses, net, on an investment; project results from an acquisition-related proportionately consolidated non-controlled Canadian joint venture that was underway at the time of the related acquisition, which joint venture was managed by a third party and automatically terminated upon completion of the project; the bargain purchase gain from a prior year acquisition; and, for Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share, amortization of intangible assets, the effects of statutory and other tax rate changes, and the tax effects of the adjusted items.
Added
These definitions of EBITDA and Adjusted EBITDA are not the same as in our Credit Facility or in the indenture governing our senior notes; therefore, EBITDA and Adjusted EBITDA as presented in this discussion should not be used for purposes of determining our compliance with the covenants contained in our debt instruments.
Added
We use EBITDA and Adjusted EBITDA, as well as Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share, to evaluate our performance, both internally and as compared with our peers, because these measures exclude certain items that may not be indicative of our core, or underlying, operating results, as well as items that can vary widely across different industries or among companies within the same industry.
Added
We believe that these adjusted measures provide a baseline for analyzing trends in our underlying business. We also use these adjusted measures to allocate resources.
Added
Non-cash stock-based compensation expense can be subject to volatility from changes in the market price per share of our common stock or variations in the value and number of shares granted, and amortization of intangible assets is subject to acquisition activity, which varies from period to period. Our computation of non-U.S.
Added
GAAP financial measures now excludes the effects of changes in fair value of acquisition-related contingent items due to their non-operational nature and inherent volatility, as activity varies from period to period.
Added
Acquisition-related contingent items consist of (i) changes in fair value of acquisition-related contingent consideration, which is composed of earn-outs, that are contingent upon the achievement of reaching certain post-acquisition levels of earnings and (ii) changes in fair value of additional payments in connection with the 2021 acquisition of Henkels & McCoy Holdings, Inc. based on the fluctuation of our share price and are contingent upon the post-acquisition collections of certain receivables.
Added
We believe that this presentation is common practice within our industry and improves comparability of our results with those of our peers. Accordingly, all prior year periods have been updated to conform with this revised presentation.
Added
See Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net and Note 4 - Fair Value of Financial Instruments in the notes to the audited consolidated financial statements, which is incorporated by reference, for additional details regarding these acquisition-related contingent items. 42 In 2021, we initiated a significant transformation of our end-market business operations to focus on the nation’s transition to low-carbon energy sources and position the Company for expected future opportunities.
Added
This transformation included significant acquisition activity to expand our scale and capacity in renewable energy, power delivery, heavy civil and telecommunications services, and resulted in significant acquisition and integration costs.
Added
Due to the extent of the acquisition costs related to this acquisition activity and the extent of the efforts that were required to integrate these acquisitions, we have excluded acquisition and integration costs related to this acquisition activity in our computation of non-U.S. GAAP financial measures. These acquisition and integration activities were completed in the fourth quarter of 2023.
Added
Our adjusted results also exclude fair value gains or losses, net, for our investment in American Virtual Cloud Technologies, Inc. (“AVCT”).
Added
We believe that fair value gains or losses for our investment in AVCT, a company in which we had no active involvement and for which fair value activity varied from period to period based on fluctuations in the market price of the investment, are not indicative of our core operations, and that this presentation improves comparability of our results with those of our peers.
Added
AVCT filed for bankruptcy in the first quarter of 2023, and our investment was fully written off. We exclude intangible asset amortization and selected purchase accounting adjustments, including the bargain purchase gain from a prior year acquisition, from our non-U.S. GAAP financial measures due to their non-operational nature and inherent volatility, as acquisition activity varies from period to period.
Added
We believe that this presentation is common practice within our industry and improves comparability of our results with those of our peers. Note that while intangible asset amortization related to the assets of acquired entities is excluded from our non-U.S. GAAP financial measures, the revenue and all other expenses of the acquired entities are included within our non-U.S.
Added
We have also excluded the effects of statutory and other tax rate changes from Adjusted Net Income and Adjusted Diluted Earnings Per Share given their inherent volatility due to uncertainty with regard to our future geographic footprint and the associated tax rates, which may vary significantly from period to period, and, for statutory tax rate changes, due to their non-operational nature.
Added
We believe that these non-U.S. GAAP financial measures provide meaningful information and help investors understand our financial results and assess our prospects for future performance. Because non-U.S. GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-U.S. GAAP financial measures having the same or similar names.
Added
Each company’s definitions of these adjusted measures may vary as they are not standardized and should be used together with the provided reconciliations. These financial measures should not be considered in isolation from, as substitutes for, or alternative measures of, reported net income or diluted earnings per share, and should be viewed in conjunction with the most comparable U.S.
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GAAP financial measures and the provided reconciliations thereto. We believe these non-U.S. GAAP financial measures, when viewed together with our U.S. GAAP results and related reconciliations, provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Added
The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA in dollar and percentage of revenue terms, for the periods indicated. The tables below (dollar amounts in millions) may contain slight summation differences due to rounding.
Added
For the Years Ended December 31, EBITDA Reconciliation: 2024 2023 2022 Net income (loss) $ 199.4 1.6 % $ (47.3) (0.4) % $ 33.9 0.3 % Interest expense, net 193.3 1.6 % 234.4 2.0 % 112.3 1.1 % Provision for (benefit from) income taxes 51.5 0.4 % (35.4) (0.3) % 9.2 0.1 % Depreciation 366.8 3.0 % 433.9 3.6 % 371.2 3.8 % Amortization of intangible assets 139.9 1.1 % 169.2 1.4 % 135.9 1.4 % EBITDA $ 950.8 7.7 % $ 754.9 6.3 % $ 662.5 6.8 % Non-cash stock-based compensation expense 32.7 0.3 % 33.3 0.3 % 27.4 0.3 % Loss on extinguishment of debt 11.3 0.1 % — — % — — % Changes in fair value of acquisition-related contingent items 10.7 0.1 % (13.9) (0.1) % (3.4) (0.0) % Acquisition and integration costs — — % 71.9 0.6 % 86.0 0.9 % Losses, net, on fair value of investment — — % 0.2 0.0 % 7.7 0.1 % Project results from non-controlled joint venture — — % — — % (2.8) (0.0) % Bargain purchase gain — — % — — % (0.2) (0.0) % Adjusted EBITDA $ 1,005.6 8.2 % $ 846.4 7.1 % $ 777.2 7.9 % 43 A reconciliation of EBITDA and EBITDA margin to Adjusted EBITDA and Adjusted EBITDA margin by segment for the periods indicated is as follows: For the Years Ended December 31, 2024 2023 2022 EBITDA $ 950.8 7.7 % $ 754.9 6.3 % $ 662.5 6.8 % Non-cash stock-based compensation expense (a) 32.7 0.3 % 33.3 0.3 % 27.4 0.3 % Loss on extinguishment of debt (a) 11.3 0.1 % — — % — — % Changes in fair value of acquisition-related contingent items (a) 10.7 0.1 % (13.9) (0.1) % (3.4) (0.0) % Acquisition and integration costs (b) — — % 71.9 0.6 % 86.0 0.9 % Losses, net, on fair value of investment (a) — — % 0.2 0.0 % 7.7 0.1 % Project results from non-controlled joint venture (c) — — % — — % (2.8) (0.0) % Bargain purchase gain (a) — — % — — % (0.2) (0.0) % Adjusted EBITDA $ 1,005.6 8.2 % $ 846.4 7.1 % $ 777.2 7.9 % Segment: Communications $ 333.7 9.6 % $ 291.7 8.9 % $ 331.8 10.3 % Clean Energy and Infrastructure 257.0 6.3 % 169.5 4.3 % 109.2 4.2 % Power Delivery 187.7 7.0 % 216.3 7.9 % 241.9 8.9 % Pipeline Infrastructure 389.4 18.3 % 284.4 13.7 % 171.5 14.1 % Other 26.2 NM 25.0 NM 29.0 NM Segment Total $ 1,194.1 9.7 % $ 986.9 8.2 % $ 883.4 9.0 % Corporate (188.5) — (140.5) — (106.2) — Adjusted EBITDA $ 1,005.6 8.2 % $ 846.4 7.1 % $ 777.2 7.9 % NM - Percentage is not meaningful (a) Non-cash stock-based compensation expense, loss on extinguishment of debt, changes in fair value of acquisition-related contingent items, losses, net, on the fair value of an investment and the bargain purchase gain from a prior year acquisition are included within Corporate EBITDA.
Added
(b) For the year ended December 31, 2023, Communications, Clean Energy and Infrastructure and Power Delivery EBITDA included $22.5 million, $37.1 million and $8.5 million, respectively, of acquisition and integration costs, and Corporate EBITDA included $3.8 million of such costs.
Added
For the year ended December 31, 2022, $4.7 million, $6.4 million, $39.0 million and $8.0 million of such costs were included within Communications, Clean Energy and Infrastructure, Power Delivery and Pipeline Infrastructure EBITDA, respectively, and Corporate EBITDA included $27.9 million of such costs.
Added
(c) Project results from a non-controlled joint venture are included within Other segment EBITDA. 44 The tables below, which may contain slight summation differences due to rounding, reconcile reported net income and reported diluted earnings per share, the most directly comparable U.S.
Added
GAAP financial measures, to Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share.
Added
For the Years Ended December 31, 2024 2023 2022 Net income (loss) $ 199.4 $ (47.3) $ 33.9 Adjustments: Non-cash stock-based compensation expense 32.7 33.3 27.4 Amortization of intangible assets 139.9 169.2 135.9 Loss on extinguishment of debt 11.3 — — Changes in fair value of acquisition-related contingent items 10.7 (13.9) (3.4) Acquisition and integration costs — 71.9 86.0 Losses, net, on fair value of investment — 0.2 7.7 Project results from non-controlled joint venture — — (2.8) Bargain purchase gain — — (0.2) Total adjustments, pre-tax $ 194.6 $ 260.8 $ 250.7 Income tax effect of adjustments (a) (44.8) (74.0) (58.6) Statutory and other tax rate effects (b) (0.9) 4.6 5.5 Adjusted net income $ 348.3 $ 144.1 $ 231.4 Net income attributable to non-controlling interests 36.6 2.7 0.5 Adjusted net income attributable to MasTec, Inc. $ 311.7 $ 141.4 $ 230.9 For the Years Ended December 31, 2024 2023 2022 Diluted earnings (loss) per share $ 2.06 $ (0.64) $ 0.42 Adjustments: Non-cash stock-based compensation expense 0.41 0.43 0.36 Amortization of intangible assets 1.77 2.16 1.78 Loss on extinguishment of debt 0.14 — — Changes in fair value of acquisition-related contingent items 0.14 (0.18) (0.04) Acquisition and integration costs — 0.92 1.13 Losses, net, on fair value of investment — 0.00 0.10 Project results from non-controlled joint venture — — (0.04) Bargain purchase gain — — (0.00) Total adjustments, pre-tax $ 2.47 $ 3.33 $ 3.29 Income tax effect of adjustments (a) (0.57) (0.94) (0.77) Statutory and other tax rate effects (b) (0.01) 0.06 0.07 Adjusted diluted earnings per share $ 3.95 $ 1.81 $ 3.01 (a) Represents the tax effects of the adjusted items that are subject to tax, including the tax effects of non-cash stock-based compensation expense, including from share-based payment awards.
Added
Tax effects are determined based on the tax treatment of the related item, the incremental statutory tax rate of the jurisdictions pertaining to the adjustment, and their effects on pre-tax income.
Added
For the years ended December 31, 2024 and 2022, our consolidated tax amounts were expenses, with effective tax rates, as reported, of 20.5% and 21.3%, respectively, and for the year ended December 31, 2023, such amount was a benefit, with effective tax rates, as reported, of 42.8%.
Added
For the years ended December 31, 2024, 2023 and 2022, our consolidated tax amounts, as adjusted, were expenses with effective tax rates of 21.8%, 19.1% and 21.2%, respectively. (b) Represents the effects of statutory and other tax rate changes for the years ended December 31, 2024, 2023 and 2022.
Added
Financial Condition, Liquidity and Capital Resources Our primary sources of liquidity are cash flows from operations, availability under our Credit Facility and our cash balances.
Added
Our primary liquidity needs are for working capital, capital expenditures, insurance and performance collateral in the form of cash and letters of credit, debt service, income taxes, earn-out obligations and equity and other investment funding requirements.
Added
We also evaluate opportunities for strategic acquisitions, investments and other arrangements from time to time, and we may consider opportunities to refinance, extend the terms of our existing indebtedness, retire outstanding debt, borrow additional funds, which may include borrowings under our Credit Facility or debt issuances, or repurchase additional shares of our outstanding common stock under share repurchase authorizations, any of which may require our use of cash.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−1 removed7 unchanged
(b) As of December 31, 2023, the remaining amount available for share repurchases under our March 2020 $150 million share repurchase program, which was publicly announced on March 19, 2020, totaled $77.3 million.
(b) As of December 31, 2024, the remaining amount available for share repurchases under our March 2020 $150 million share repurchase program, which was publicly announced on March 19, 2020, totaled $77.3 million.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among MasTec, Inc., the S&P 500 Index, and a Peer Group *$100 invested on 12/31/18 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2024 Standard & Poor’s, a division of S&P Global. All rights reserved.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among MasTec, Inc., the S&P 500 Index, and a Peer Group *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2025 Standard & Poor’s, a division of S&P Global. All rights reserved.
The graph assumes that the value of the investment in our common stock, as well as that of the S&P 500 and our peer group, was $100 on December 31, 2018 and tracks it through December 31, 2023.
The graph assumes that the value of the investment in our common stock, as well as that of the S&P 500 and our peer group, was $100 on December 31, 2019 and tracks it through December 31, 2024.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “MTZ.” Holders. As of February 27, 2024, there were 1,730 holders of record of our common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “MTZ.” Holders. As of February 24, 2025, there were 1,640 holders of record of our common stock.
We did not have any share repurchases under our share repurchase programs for the year ended December 31, 2023. 30 The following table provides information about repurchases of our common stock during the three month period ended December 31, 2023: Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet be Purchased under the Programs (b) October 1 through October 31 12,431 $ 73.51 — $ 77,326,434 November 1 through November 30 26,260 $ 56.15 — $ 77,326,434 December 1 through December 31 11,969 $ 69.16 — $ 77,326,434 Total 50,660 — (a) Includes 12,431, 25,574, and 11,969 shares reacquired by the Company on the open market pursuant to the Amended ESPPs in October, November and December of 2023, respectively, and 686 shares withheld for income tax purposes in connection with shares issued under compensation and benefit programs in November of 2023.
We did not have any share repurchases under our share repurchase programs for the year ended December 31, 2024. 31 The following table provides information about repurchases of our common stock during the three month period ended December 31, 2024: Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet be Purchased under the Program (b) October 1 through October 31 8,580 $ 125.82 — $ 77,326,434 November 1 through November 30 4,865 $ 130.35 — $ 77,326,434 December 1 through December 31 6,631 $ 140.56 — $ 77,326,434 Total 20,076 — (a) Includes 8,580, 4,569, and 6,631 shares reacquired by the Company on the open market pursuant to the Amended ESPPs in October, November and December of 2024, respectively, and 296 shares withheld for income tax purposes in connection with shares issued under compensation and benefit programs in November of 2024.
Removed
As of December 31, 2018 2019 2020 2021 2022 2023 MasTec, Inc. $ 100.00 $ 158.19 $ 168.10 $ 227.51 $ 210.38 $ 186.69 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 Peer Group $ 100.00 $ 138.99 $ 197.64 $ 274.65 $ 283.18 $ 379.96 31
Added
As of December 31, 2019 2020 2021 2022 2023 2024 MasTec, Inc. $ 100.00 $ 106.27 $ 143.83 $ 133.00 $ 118.02 $ 212.19 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Peer Group $ 100.00 $ 144.38 $ 202.05 $ 211.04 $ 286.75 $ 407.11 32

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Refer to Note 14 - Commitments and Contingencies, Note 4 - Fair Value of Financial Instruments and Note 15 - Related Party Transactions in the notes to the audited consolidated financial statements, which are incorporated by reference, for additional information related to our off-balance sheet arrangements.
See Note 13 - Segments and Related Information and Note 14 - Commitments and Contingencies in the notes to the audited consolidated financial statements, which are incorporated by reference, for additional information regarding our segment reporting and significant customer concentrations. In this Form 10-K, “$” means U.S. dollars unless otherwise indicated.
See Note 13 - Segments and Related Information in the notes to the audited consolidated financial statements, which is incorporated by reference. Our reportable segments are: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Oil and Gas and (5) Other. Management’s review of segment results includes analyses of trends in revenue, EBITDA and EBITDA margin.
Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Business,” which is incorporated by reference. We manage our operations under five operating segments, which represent our five reportable segments: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Pipeline Infrastructure and (5) Other.
Removed
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our business, financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and notes thereto in Item 8 of this Form 10-K.
Added
This structure is generally focused on broad end-user markets for our labor-based construction services. During the fourth quarter of 2024, we renamed our Oil and Gas segment as the Pipeline Infrastructure segment to better represent the nature of the segment’s operations, end markets and customer characteristics. There was no change to the composition of the segment or its historical results.
Removed
The discussion below contains forward-looking statements that are based upon our current expectations and is subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in “Cautionary Statement Regarding Forward-Looking Statements” and Item 1A.
Added
Our Communications segment performs engineering, construction, maintenance and customer fulfillment activities related to communications infrastructure, primarily for wireless and wireline/fiber communications, wireless integration and optimization and install-to-the-home services, as well as infrastructure for utilities, among others.
Removed
“Risk Factors.” General Economic, Market and Regulatory Conditions We have experienced, and may continue to experience, direct and indirect negative effects on our business and operations from economic, market and regulatory conditions, including the current level of interest rates; inflationary effects on the costs of labor, materials and fuel; supply chain disruptions; uncertainty related to the implementation and pace of spending under governmental programs and initiatives related to infrastructure and other industrial investment, delays and uncertainty related to project permitting and/or other regulatory matters or uncertainty; climate, environmental and sustainability-related matters; changes in technology, tax and other incentives; potential market volatility that could negatively affect demand for future projects, and/or delay existing project timing or cause increased project costs; and public health matters.
Added
Our Clean Energy and Infrastructure segment primarily serves energy, utility, government and other end-markets through the installation and construction of power generation facilities, primarily from clean energy and renewable sources, such as wind, solar, biomass, natural gas and hydrogen, as well as battery storage systems for renewable energy; various types of heavy civil and industrial infrastructure services, including roads, bridges and rail; and environmental remediation services.
Removed
Additionally, the effects of ongoing and recent geopolitical events, such as the political unrest and military conflicts in the Middle East and Ukraine, could potentially increase volatility and uncertainty in the energy and capital markets, which could delay projects and/or negatively affect demand for future projects.
Added
Our Power Delivery segment primarily serves the energy, utility and data center infrastructure industries through the engineering, construction and maintenance of power transmission and distribution infrastructure, including electrical and gas lines, power reserve and battery infrastructure, and distribution network systems, substations and grid modernization; emergency restoration services following natural disasters and accidents; and environmental planning and compliance services.
Removed
We expect 2024 to continue to be a dynamic macroeconomic environment, with elevated market interest rates and continuing, but moderating levels of cost inflation and potential market volatility, any or all of which could adversely affect our costs and customer demand.
Added
Our Pipeline Infrastructure segment performs engineering, construction, maintenance and other services for pipeline infrastructure, including natural gas, water and carbon capture sequestration pipelines, as well as pipeline integrity, including the repair of pipeline infrastructure and facilitating their safe use throughout their lifecycle, and other services for the energy and utilities industries.
Removed
These conditions could also affect the cost of capital of both us and our customers, as well as our customers’ plans for capital investments and ongoing maintenance expenditures, which could negatively affect demand for our services. We could also experience negative effects from possible longer-term changes in consumer and customer behavior due to regulatory, climate-related or other factors.
Added
The Other segment includes certain equity investees, the services of which may vary from those provided by our primary segments, as well as other small business units with activities in certain international end-markets.
Removed
The extent to which general economic, market and regulatory conditions could affect our business, operations and financial results is uncertain as it will depend upon numerous evolving factors that we may not be able to accurately predict, and, therefore, any future impacts on our business, financial condition and/or results of operations cannot be quantified or predicted with specificity.
Added
Industry Trends Our industry is composed of national, regional and local companies that provide services to customers in a range of industries.
Removed
We believe that our financial position, cash flows and operational strengths will enable us to manage the current uncertainties resulting from general economic, market and regulatory conditions.
Added
We believe the following industry trends affect demand for our services: Opportunities in our Communications Segment Demand for seamless access across wireless and wired devices, high-speed internet connectivity, broadband and data transmission continues to spur demand for fast and more reliable wireless and wireline/fiber communications network services.
Removed
We carefully manage our liquidity and monitor any potential effects from changing economic, market and regulatory conditions on our financial results, cash flows and/or working capital and will take appropriate actions in efforts to mitigate any impacts. Business See Item 1. “Business” for discussion pertaining to our business and reportable segments.
Added
The use of mobile devices, mobile and remote technologies, video streaming usage, acceleration of business transacted online, increased demand of artificial intelligence driving data center growth and advancements in the “Internet of Things (IoT)” is expected to require new and upgraded networks to meet the data traffic and reliability demands of these technologies.
Removed
In 2021, we initiated a significant transformation of our end-market business operations to focus on the nation’s transition to low-carbon energy sources and position the Company for expected future opportunities associated with this transition.
Added
According to IBISWorld’s October 2024 publication, “Wireless Tower Construction in the US” (the “IBISWorld October 2024 publication”), revenue for telecommunications infrastructure is expected to grow to $11.8 billion over the five year period through 2029.
Removed
This transformation included significant business combination activity, including expansion of our scale and capacity in renewable energy, power delivery, heavy civil and telecommunications services, which activity resulted in significant acquisition and integration costs, both in our existing and recently acquired operations.
Added
The IBISWorld October 2024 publication also predicts that telecommunications service providers will invest substantially to improve network infrastructure and increase bandwidth to support video, Voice over Internet Protocol (VoIP) and other high-speed data services. 5 Telecommunications providers have spent, and plan to continue spending, significant capital and other resources to deliver advanced telecommunications by deploying the latest infrastructure and are projected to play a significant role in shaping the future as next generation 5G wireless technology continues to gain traction among both industrial and consumer markets. 5G mobile networks are still in the early stages, but improvements to existing long term evolution and high-speed data networks are expected to continue over the coming years and are expected to provide a platform for the IoT, which can be harnessed to drive innovation and improvements in commerce, transportation, supply chain, research, healthcare, education, public safety, the development of “Smart Cities,” “Smart Homes” and “Smart Farming,” among many other applications. 5G is expected to provide businesses with significant real-time visibility, insight and control over assets, products and services, with the potential to transform how businesses operate and deliver new products and services.
Removed
As of December 31, 2023, acquisition and integration efforts related to this acquisition activity were substantially complete, and any such costs in the future are not expected to be material. Recent acquisitions .
Added
In response to these growing opportunities, communications service providers are expanding, densifying and optimizing current 5G wireless and wireline/fiber communications network capacity. To achieve nationwide coverage levels, changes to the structure of the network architecture for 5G wireless communications will require a longer period of installation when compared to past generation wireless infrastructure changes.
Removed
During 2023, we completed four acquisitions, including, within our Communications segment, certain of the assets of a telecommunications company specializing in wireless services; and a telecommunications construction company specializing in broadband and fiber-to-the-home initiatives in the New England area.
Added
Large scale multi-year 5G deployments will include additional and improved tower capacity, as well as deployment of numerous higher bandwidth small/micro cells, distributed antenna systems and fiber network expansion to densify network performance.
Removed
Additionally, we acquired certain of the equity interests of two equipment companies, both of which are included within our Oil and Gas segment.
Added
We believe that continued nationwide 5G tower deployments, deployment of small/micro cells, fiber network expansion by major carriers in support of 5G and, according to IBIS World’s October 2024 publication, higher demand for retrofits and upgrades of current generation towers to transition towers to 5G, will lead to growing demand for 5G telecommunications infrastructure over multiple years.
Removed
During 2022, we completed five acquisitions including: (i) within our Clean Energy and Infrastructure segment: IEA, a leading utility-scale infrastructure solutions provider in North America, with expertise in renewable energy and heavy civil projects, as well as rail and environmental remediation services; and a company specializing in the production of concrete and aggregate products; (ii) within our Oil and Gas segment: an infrastructure construction company focusing on water, sewer and utility projects and with expertise in excavation and site work; (iii) within our Communications segment: a telecommunications company specializing in wireline services; and (iv) within our Power Delivery segment: a company specializing in the construction of overhead high voltage transmission lines.
Added
Additionally, there are several initiatives designed to drive development of telecommunications and 5G infrastructure in rural areas. We believe that there will be significant fiber network expansion resulting from the combination of carrier spend and government programs that are expected to incentivize private investment in telecommunications infrastructure.
Removed
During 2021, we completed fourteen acquisitions including: (i) HMG, an industry-leading utility services firm providing critical infrastructure design, construction and maintenance services to the power and renewables, telecommunications, gas distribution and pipeline services end-markets. HMG’s results are reported within our Power Delivery, Communications and Oil and Gas segments, as appropriate, and HMG’s corporate functions are reported within our corporate results.
Added
Additionally, recently there have been announcements of significant investments being made by companies in data centers for artificial intelligence which, in turn, leads to opportunities to support data center connectivity with new facilities moving farther from traditional locations. According to UBS’s June 2024 U.S.
Removed
Additionally, the Company’s 2021 acquisitions included: (ii) within our Power Delivery segment: an electric utility distribution contractor; a company specializing in vegetation management services for the electric and telecommunications industries; and INTREN, a premier specialty utility contractor primarily providing electrical distribution network services under various multi-year master service agreements to some of the nation’s largest utilities, municipalities and cooperatives; (iii) within our Clean Energy and Infrastructure segment: a heavy civil infrastructure construction company focusing on transportation projects; and a heavy industrial general contractor with concrete, piping and electrical capabilities; (iv) within our Communications segment: a telecommunications company specializing in cabling, plant and other network services; a telecommunications and utility technical services company focusing on outside plant telecommunications 32 engineering; a telecommunications and cable services provider; a utilities infrastructure company, providing power line construction and repair services; and the business operations of an entity specializing in install-to-the-home services; and (v) within our Oil and Gas segment: an infrastructure construction company focusing on water, sewer and utility projects, along with expertise in site work; a company specializing in environmental services for energy infrastructure and heavy civil projects; and a pipeline contractor focusing on integrity and maintenance work related to gas distribution infrastructure.
Added
Cable and Telecom Services report, it is believed that the United States will see record levels of fiber-to-the home deployment in 2025 and 2026. The IIJA provides approximately $65 billion of funding to improve and expand the nation’s broadband infrastructure and to make broadband more affordable for low-income Americans, including the Broadband Equity, Access and Deployment (“BEAD”) Program.
Removed
For additional information, see Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net in the notes to the audited consolidated financial statements, which is incorporated by reference.
Added
BEAD will provide over $42 billion to expand high-speed internet access by funding planning, infrastructure deployment and adoption programs, with priority for unserved and underserved areas.
Removed
Economic, Industry and Market Factors We closely monitor the effects of changes in economic, industry and market conditions on our customers, including the potential effects of the factors discussed above in “General Economic, Market and Regulatory Conditions,” which can affect demand for our customers’ products and services and can increase or decrease our customers’ planned capital and maintenance budgets in certain end-markets.
Added
Other government initiatives include the Rural Digital Opportunity Fund, which has committed to provide up to $20 billion in funding over ten years to build and connect high-speed broadband in rural homes and small businesses. Carriers are also investing in telecommunications infrastructure to expand their fiber footprint across the nation.
Removed
Any of these factors and effects, as well as mergers and acquisitions or other business transactions among the customers we serve, could affect demand for our services, or the cost to provide such services and our profitability.
Added
One such example is the AT&T and BlackRock Alternatives private equity fiber partnership, Gigapower LLC (“Gigapower”), which will operate a commercial fiber-optic platform in the Unites States. While still in the early process of scaling, carriers continue to stress the importance of these builds and are experiencing momentum in fiber performance in Gigapower geographies.
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Changes in demand in our customers’ businesses and fluctuations in market prices for energy sources, including oil and gas products, can affect demand for our services. In particular, such changes can affect the level of activity in energy generation projects, including from renewable energy sources, as well as pipeline construction and carbon capture projects.
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Based on this performance, AT&T and BlackRock plan to grow and are looking for opportunities to expand Gigapower’s network beyond the initial 1.5 million customer locations announced in 2022, including growth in both existing and new geographies.
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The availability of transportation and transmission capacity can also affect demand for our services, including energy generation, electric grid and pipeline construction projects. These factors, as well as the highly competitive nature of our industry, can result in changes in levels of activity, project mix, and/or the profitability of the services we provide.
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The U.S. market for Smart City initiatives, in which cities use IoT technologies, artificial intelligence and cloud storage to collect and use insights gained from data to manage city assets, resources and services more efficiently, is a developing trend that is expected to accelerate due to the combination of increased data speeds and data capacity capabilities of wireless and wireline networks, developing IoT applications, cloud computing and artificial intelligence.
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In the face of increased pricing pressure or other market developments, we strive to maintain our profit margins through productivity improvements, cost reduction programs and/or business streamlining efforts.
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Smart City initiatives include such technologies as Wi-Fi kiosks, smart lighting solutions, utility meters, smart traffic management systems, video sensors, weather sensors, drone sensors for public safety efforts and radio frequency identification sensors in the pavement. Grand View Research, in their 2024-2030 U.S.
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Market factors, including the continuing elevated rates of interest and inflation and the related effects on labor, materials and fuel costs, have had, and could continue to have, a negative effect on our profitability, to the extent that we are not able to pass these costs through to our customers.
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Smart Cities Market Size, Share & Trends Analysis report, estimated that the Smart Cities market size was valued at approximately $179 billion in 2023, and is expected to grow at an estimated compound annual growth rate of approximately 23.1% from 2024 to 2030.
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While we actively monitor economic, industry and market factors that could affect our business, we cannot predict the effect that changes in such factors could have on our future results of operations, liquidity and cash flows, and we may be unable to fully mitigate, or benefit from, such changes.
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Smart Home technologies represent a wide range of solutions for monitoring, controlling and automating functions in a home, including home intelligence and connected home technologies. These technologies are expected to benefit from the global rollout of 5G, which are revolutionizing the delivery of IoT services, and improvements in Wi-Fi technologies.
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Effect of Seasonality and Cyclical Nature of Business Our revenue and results of operations can be subject to seasonal and other variations.
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Mordor Intelligence, in their Smart Homes Market in the US 2024-2029 report, predicts that the U.S. Smart Home market, which was estimated at approximately $40 billion in 2024, will grow at an estimated compound annual growth rate of approximately 9% from 2024 to 2029.
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These variations are influenced by customer spending patterns, bidding seasons, project schedules, weather and/or climate-related effects, holidays, regulatory matters and/or timing, in particular, for large non-recurring projects, and the effects of market uncertainty or disruptions, as described within “Economic, Industry and Market Factors,” above.
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We believe that opportunities for installation and maintenance of both Smart City and Smart Home technologies will provide future growth opportunities, including for our install-to-the-home services business. As one of the largest providers of communications infrastructure services, we believe that we are well-positioned to benefit from the expected multi-year significant and broad opportunities in the telecommunications market as previously described.
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Typically, our revenue is lowest at the beginning of the year and during the winter months because cold, snowy or wet conditions can delay projects.
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Opportunities in our Clean Energy and Infrastructure Segment The need for expanded energy generation, together with climate change and carbon emission reduction initiatives, continue to drive trends in the mix of fuel sources used in energy generation toward cleaner and more sustainable energy sources.
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Revenue is generally higher during the summer and fall months due to increased demand for our services when favorable weather conditions exist in many of the regions in which we operate, but continued cold and wet weather can often affect second quarter project activity and/or productivity.
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According to Deloitte’s 2025 Renewable Energy Industry Outlook, continued growth is expected in clean energy and renewables deployment, in part by, record public and private investment and the cleantech manufacturing, artificial intelligence and carbon industries.
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In the fourth quarter, many projects tend to be completed by customers seeking to spend their capital budgets before the end of the year, which can have a positive effect on our revenue. Customers, however, could also curtail certain of their project activities toward the end of the year as they await capital budget allocations for the next year.
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According to its 2024 Renewable Energy Industry Outlook, many businesses, states, cities and utilities have either mandatory or announced decarbonization plans, with many utilities having decarbonization targets, and an increasing number of major corporations that have joined the RE100, a global corporate initiative to procure electricity entirely from renewable sources.
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The holiday season and inclement weather can cause delays, which can reduce revenue and increase costs on affected projects during the related period.
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Additionally, according to the latest Department of Energy’s (“DOE”) Annual Energy Outlook 2023 (the “DOE’s 2023 Annual Energy Outlook”), the percentage of U.S. electricity generated by renewable sources is expected to triple to almost 60% by 2050.
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Any quarter may be positively or negatively affected by adverse or unusual weather patterns and/or climate-related effects, including warm winter weather, excessive rainfall, flooding or natural catastrophes such as wildfires, hurricanes, excessive winds or other severe weather, making it difficult to predict quarterly revenue and margin variations. Additionally, our industry can be highly cyclical.
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Growing corporate initiatives for smaller, standalone distributed generation facilities, together with regulatory and other policy initiatives at the federal, state and municipal levels, have spurred demand for clean energy production from sustainable power sources, including wind, solar, biomass and other sources.
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Fluctuations in end-user demand within the industries we serve, or in the supply of services within those industries, can affect demand for our services. As a result, our business may be adversely affected by industry declines, delays in new projects and/or changes in consumer or customer demand.
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Many states have adopted renewable portfolio standards or renewable energy goals to diversify their energy resources, promote domestic energy production and encourage economic development. Rising state renewable portfolio standards, increasing levels of 6 corporate and residential demand, and improving economic competitiveness of renewable sources continue to be key drivers for their growth.
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Variations in project schedules or unanticipated changes in project schedules, in particular, in connection with large construction and installation projects, can create fluctuations in revenue, which may adversely affect us in a given quarter, even if not for the full year.
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In addition, growing efforts to address electric grid resiliency are expected to drive growth in renewables, as utilities and their customers are expected to increasingly consider renewable microgrids, including energy storage solutions, to support critical facilities. The transition toward cleaner and more sustainable energy sources is expected to require rapid transformation of, and significant investment in, the power sector.
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In addition, revenue from master service and other service agreements, while generally predictable, can be subject to volatility, including from changes in customer demand, customer revenue mix, or project timing.
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A November 2024 S&P Global Community Insights article indicates that energy utilities are expected to invest in renewables at increasing levels over the next couple of years.
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The financial condition of our customers and their access to capital; variations in project margins; regional, national and global economic, political and market conditions; regulatory or environmental influences, including climate-related matters; and acquisitions, dispositions or strategic arrangements can also materially affect quarterly results in a given period.
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According to a KPMG Energy Transition Investment Outlook of 2025 and Beyond report (the “2025 KPMG Energy Transition Investment Outlook”), investment in energy transition assets has accelerated significantly since 2020, rising from about $1.2 trillion in 2020 to over $2 trillion in 2024.
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Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period. Understanding Our Results of Operations Revenue. We primarily provide engineering, building, installation, maintenance and upgrade services to our customers.
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Certain governmental and policy initiatives are expected to drive growth in renewable energy infrastructure, including the IIJA, which includes funding for renewable energy innovation and deployment.
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We derive revenue from projects performed under master and other service agreements as well as from contracts for specific projects requiring the construction and installation of an entire infrastructure system or specified units within an infrastructure system. See Item 1.
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The IIJA allocates $65 billion to power infrastructure and energy programs, which includes funding for fuels and technology investment, including carbon initiatives, clean energy technology supply chains, including battery power initiatives, solar energy research and development, and the development and deployment of hydrogen from clean energy sources, among others.
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“Business” for discussion of our business and revenue-generating activities and “Comparison of Fiscal Year Results” below for revenue results by reportable segment. Costs of Revenue, Excluding Depreciation and Amortization.
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In addition, the IRA contains provisions that are designed to accelerate the deployment of clean energy technologies, reduce carbon emissions, lower energy prices and support the development of a reliable and affordable energy sector.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Revenue generated from foreign operations represented approximately 1% of our total revenue for the year ended December 31, 2023. Revenue and expense related to our foreign operations are, for the most part, denominated in the functional currency of the foreign operation, which minimizes the impact that fluctuations in exchange rates would have on net income or loss.
Revenue generated from foreign operations represented approximately 1% of our total revenue for the year ended December 31, 2024. Revenue and expense related to our foreign operations are, for the most part, denominated in the functional currency of the foreign operation, which minimizes the impact that fluctuations in exchange rates would have on net income or loss.
We seek to manage foreign currency exposure by minimizing our consolidated net asset and liability positions in currencies other than the functional currency, which exposure was not significant to our consolidated financial position as of December 31, 2023. We may enter into foreign currency derivative contracts in the future to manage such exposure.
We seek to manage foreign currency exposure by minimizing our consolidated net asset and liability positions in currencies other than the functional currency, which exposure was not significant to our consolidated financial position as of December 31, 2024. We may enter into foreign currency derivative contracts in the future to manage such exposure.
Other Market Risk As discussed in Note 4 - Fair Value of Financial Instruments in the notes to the audited consolidated financial statements, which is incorporated by reference, we have certain investments that may be subject to market risk and could be subject to volatility based on market conditions. 49
Other Market Risk As discussed in Note 4 - Fair Value of Financial Instruments in the notes to the audited consolidated financial statements, which is incorporated by reference, we have certain investments that may be subject to market risk and could be subject to volatility based on market conditions. 50
We are, however, subject to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than the functional currencies and for our foreign operations with a functional currency other than the local currency. Such activity was not material to our operations in 2023.
We are, however, subject to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than the functional currencies and for our foreign operations with a functional currency other than the local currency. Such activity was not material to our operations in 2024.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk As of December 31, 2023, our variable interest rate debt was primarily related to our Credit Facility and our term loans.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk As of December 31, 2024, our variable interest rate debt was primarily related to our Credit Facility and our term loans.
None of this debt subjects us to interest rate risk, but we may be subject to changes in interest rates if and when we refinance this debt at maturity or otherwise. Foreign Currency Risk Certain of our consolidated revenue and operating expenses are in foreign currencies. Our foreign operations are primarily in Canada.
None of this debt 49 subjects us to financial statement risk associated with changes in interest rates, but we may be subject to changes in interest rates if and when we refinance this debt at maturity or otherwise. Foreign Currency Risk Certain of our consolidated revenue and operating expenses are in foreign currencies. Our foreign operations are primarily in Canada.
Translation gains or losses, which are recorded in other comprehensive income or loss, result from translation of the assets and liabilities of our foreign subsidiaries into U.S. dollars. For the year ended December 31, 2023, foreign currency translation gains, net, totaled approximately $1.7 million and related to our activities in Canada and Mexico.
Translation gains or losses, which are recorded in other comprehensive income or loss, result from translation of the assets and liabilities of our foreign subsidiaries into U.S. dollars. For the year ended December 31, 2024, foreign currency translation losses, net, totaled approximately $2.9 million and related primarily to our activities in Canada and Mexico.
The current year interest rates for outstanding revolving loans under our Credit Facility and Term Loan reflect b asis point increases of approximately 190 and 130, respectively, over the comparable period in 2022.
The current year interest rates for outstanding revolving loans under our Credit Facility and Term Loan reflect b asis point decreases of approximately 270 and 90 , respectively, over the comparable period in 2023 .
As of December 31, 2023, we had approximately $773 million aggregate principal amount of outstanding revolving loans under our Credit Facility with a weighted average interest rate of 7.71% and a Term Loan with a balance of $341 million and an interest rate of 7.08%.
As of December 31, 2024, we had approximately $43 million aggregate principal amount of outstanding revolving loans under our Credit Facility with a weighted average interest rate of 4.970% and a Term Loan with a balance of $333 million and an interest rate of 6.220%.
Outstanding loans under the $300 million Five-Year Tranche of our 2022 Term Loan Facility bear interest, at our option, at a rate equal to either (a) Term SOFR plus a margin of 1.250% to 1.625%, or (b) a Base Rate, plus a margin of 0.250% to 0.625%.
Outstanding debt under the $285.0 million Five-Year Term Loan bears interest, at our option, at a rate equal to either (a) Term SOFR plus a margin of 1.250% to 1.625%, or (b) a Base Rate, plus a margin of 0.250% to 0.625%. As of December 31, 2024, the Five-Year Term Loan accrued interest at a weighted average rate of 6.253%.
An additional 100 basis point increase in the applicable interest rates under our Credit Facility and term loans would have increased our interest expense by approximately $21 million for the year ended December 31, 2023. 48 As of December 31, 2023, our fixed interest rate debt primarily included $600 million aggregate principal amount of 4.50% Senior Notes, $300 million aggregate principal amount of 6.625% Senior Notes and $342 million of finance lease obligations, which accrued interest at a weighted average interest rate of approximately 4.7%.
As of December 31, 2024, our fixed interest rate debt primarily included $600.0 million aggregate principal amount of 4.500% Senior Notes, $550.0 million aggregate principal amount of 5.900% Senior Notes, $74.9 million aggregate principal amount of 6.625% Senior Notes and $297.9 million of finance lease obligations, which accrued interest at a weighted average interest rate of approximately 4.8%.
This risk has increased in the current market environment, in which the Federal Reserve has increased interest rates, resulting in an increase in our variable interest rates and related interest expense. We manage interest rate risk by maintaining a mix of fixed and variable rate debt obligations.
The interest we are charged on our variable-rate debt will fluctuate as a result of changes in market interest. Interest on our fixed-rate debt would not change. We manage interest rate risk by maintaining a mix of fixed and variable rate debt obligations. Our variable rate debt subjects us to risk from increases in prevailing interest rates.
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Outstanding loans under the $400 million Three-Year Tranche of our 2022 Term Loan Facility bear interest, at our option, at a rate equal to either (a) Term SOFR, as defined in the 2022 Term Loan Facility, plus a margin of 1.125% to 1.500%, or (b) a Base Rate, as defined in the 2022 Term Loan Facility, plus a margin of 0.125% to 0.500%.
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Our interest expense is affected by the overall interest rate environment. Although the Federal Reserve has periodically lowered short-term interest rates since September 2024, longer-term rates remain elevated and the timing, direction and extent of any future interest rate changes remain uncertain.
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As of December 31, 2023, the Three-Year Tranche and Five-Year Tranche accrued interest at weighted average rates of 6.833% and 6.958%, respectively. Our interest expense is affected by the overall interest rate environment. Our variable rate interest debt subjects us to r isk from increases in prevailing interest rates.
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An additional 100 basis point increase in the applicable interest rates under our Credit Facility and Five-Year Term Loan would have increased our interest expense by approximately $11 million for the year ended December 31, 2024.

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