UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q


(Mark One)
☑     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 20172022
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __ to __
Commission File Number 001-08106


mtz-20220930_g1.jpg
MasTec, Inc.
(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)
its charter)
Florida65-0829355
(State or Otherother jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
Incorporation or Organization)Identification No.)
800 S. Douglas Road, 12th Floor
Coral Gables, FLFlorida33134
(Address of Principal Executive Offices)principal executive offices)(Zip Code)
(305) 599-1800
(Registrant’s Telephone Number, Including Area Code)telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.10 Par ValueMTZNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ☑  No ¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes þ☑  No ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerþ☑Accelerated filer¨☐
Non-accelerated filer¨☐(Do not check if a smaller reporting company)
Smaller reporting company¨☐
Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.)    Yes ¨☐   No þ☑
As of October 30, 2017,31, 2022, MasTec, Inc. had 82,760,62478,234,262 shares of common stock $0.10 par value, outstanding.





MASTEC, INC.
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 20172022


TABLE OF CONTENTS
 
Page
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Item 1
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Item 2
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Item 3
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Item 4
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Item 1
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Item 1A
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Item 2
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Item 4
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Item 65
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SIGNATURESItem 6
47
48
 

2


PART I.     FINANCIAL INFORMATION

ITEM 1.
ITEM 1.     FINANCIAL STATEMENTS



MASTEC, INC.
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited - in thousands, except per share amounts)

For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Revenue$2,513,484 $2,404,332 $6,769,677 $6,142,414 
Costs of revenue, excluding depreciation and amortization2,187,835 2,057,336 5,949,262 5,246,427 
Depreciation91,291 95,366 263,487 262,132 
Amortization of intangible assets27,979 23,352 81,242 54,522 
General and administrative expenses125,068 86,902 404,243 238,995 
Interest expense, net26,885 13,091 62,313 39,379 
Equity in earnings of unconsolidated affiliates, net(6,059)(8,714)(19,423)(23,585)
Other expense (income), net174 (3,036)(1,897)(13,746)
Income before income taxes$60,311 $140,035 $30,450 $338,290 
(Provision for) benefit from income taxes(11,089)(27,578)68 (83,956)
Net income$49,222 $112,457 $30,518 $254,334 
Net income attributable to non-controlling interests326 1,370 388 2,147 
Net income attributable to MasTec, Inc.$48,896 $111,087 $30,130 $252,187 
Earnings per share (Note 2):
Basic earnings per share$0.66 $1.53 $0.41 $3.48 
Basic weighted average common shares outstanding73,936 72,503 74,386 72,481 
Diluted earnings per share$0.65 $1.50 $0.38 $3.41 
Diluted weighted average common shares outstanding75,073 73,977 75,576 73,921 

 For the Three Months Ended September 30 For the Nine Months Ended September 30
 2017 2016 2017 2016
Revenue$1,955,752
 $1,586,181
 $5,004,116
 $3,792,811
Costs of revenue, excluding depreciation and amortization1,726,173
 1,368,988
 4,323,642
 3,321,571
Depreciation and amortization50,101
 42,584
 138,384
 122,249
General and administrative expenses66,397
 67,131
 202,001
 195,031
Interest expense, net17,578
 13,097
 44,966
 37,895
Equity in (earnings) losses of unconsolidated affiliates(7,399) 6
 (15,105) (3,549)
Other income, net(4,677) (971) (4,102) (12,803)
Income before income taxes$107,579
 $95,346
 $314,330
 $132,417
Provision for income taxes(43,378) (38,816) (126,170) (54,331)
Net income$64,201
 $56,530
 $188,160
 $78,086
Net income attributable to non-controlling interests449
 253
 1,770
 414
Net income attributable to MasTec, Inc.$63,752

$56,277
 $186,390
 $77,672
        
Earnings per share (Note 2):       
Basic earnings per share$0.79
 $0.70
 $2.31
 $0.97
Basic weighted average common shares outstanding80,953
 80,462
 80,859
 80,323
        
Diluted earnings per share$0.77
 $0.69
 $2.27
 $0.96
Diluted weighted average common shares outstanding82,386
 81,545
 82,281
 81,241


The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.

3




MASTEC, INC.
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited - in thousands)

For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Net income$49,222 $112,457 $30,518 $254,334 
Other comprehensive income (loss):
Foreign currency translation losses, net of tax(3,382)(1,278)(4,212)(64)
Unrealized gains (losses) on investment activity, net of tax10,070 (1,041)31,667 9,333 
Comprehensive income$55,910 $110,138 $57,973 $263,603 
Comprehensive income attributable to non-controlling interests326 1,370 388 2,147 
Comprehensive income attributable to MasTec, Inc.$55,584 $108,768 $57,585 $261,456 
 For the Three Months Ended September 30 For the Nine Months Ended September 30
 2017 2016 2017 2016
Net income$64,201
 $56,530
 $188,160
 $78,086
Other comprehensive income:       
Foreign currency translation gains (losses), net of tax641
 (1,454) 2,415
 4,417
Unrealized gains (losses) on equity investee activity, net of tax808
 (345) (1,287) (12,932)
Comprehensive income$65,650
 $54,731
 $189,288
 $69,571
Comprehensive income attributable to non-controlling interests449
 253
 1,770
 414
Comprehensive income attributable to MasTec, Inc.$65,201
 $54,478
 $187,518
 $69,157


The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.

4





MASTEC, INC.
CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS
(unaudited - in thousands, except shares and per share amounts)information)

September 30,
2022		December 31,
2021
Assets
Current assets:
Cash and cash equivalents$95,676 $360,736 
Accounts receivable, net of allowance1,057,450 1,019,324 
Contract assets1,617,384 1,227,927 
Inventories, net127,546 92,595 
Prepaid expenses86,957 91,488 
Other current assets129,262 81,884 
Total current assets$3,114,275 $2,873,954 
Property and equipment, net1,588,059 1,436,087 
Operating lease right-of-use assets244,087 260,410 
Goodwill, net1,493,843 1,520,575 
Other intangible assets, net638,318 670,280 
Other long-term assets397,081 360,087 
Total assets$7,475,663 $7,121,393 
Liabilities and equity
Current liabilities:
Current portion of long-term debt, including finance leases$156,756 $137,912 
Current portion of operating lease liabilities85,081 95,426 
Accounts payable934,542 663,063 
Accrued salaries and wages225,405 203,141 
Other accrued expenses226,879 229,936 
Contract liabilities249,702 313,965 
Other current liabilities108,118 141,155 
Total current liabilities$1,986,483 $1,784,598 
Long-term debt, including finance leases2,067,548 1,876,233 
Long-term operating lease liabilities168,511 176,378 
Deferred income taxes471,020 450,361 
Other long-term liabilities235,588 289,962 
Total liabilities$4,929,150 $4,577,532 
Commitments and contingencies (Note 14)
Equity
Preferred stock, $1.00 par value: authorized shares - 5,000,000; issued and outstanding shares – none$— $— 
Common stock, $0.10 par value: authorized shares - 145,000,000; issued shares - 95,467,645 and 95,371,211 (including 1,660,427 and 1,747,385 of unvested stock awards) as of September 30, 2022 and December 31, 2021, respectively9,547 9,537 
Capital surplus1,055,239 1,033,615 
Retained earnings2,192,518 2,162,388 
Accumulated other comprehensive loss(51,321)(78,776)
Treasury stock, at cost: 19,933,055 and 18,941,926 shares as of September 30, 2022 and December 31, 2021, respectively(663,910)(586,955)
Total MasTec, Inc. shareholders’ equity$2,542,073 $2,539,809 
Non-controlling interests$4,440 $4,052 
Total equity$2,546,513 $2,543,861 
Total liabilities and equity$7,475,663 $7,121,393 
 September 30,
2017		 December 31,
2016
Assets   
Current assets:   
Cash and cash equivalents$43,822
 $38,767
Accounts receivable, net1,534,790
 1,156,031
Inventories, net84,460
 111,031
Prepaid expenses53,832
 41,548
Other current assets30,843
 55,109
Total current assets$1,747,747
 $1,402,486
Property and equipment, net691,430
 549,084
Goodwill, net1,135,450
 995,874
Other intangible assets, net195,454
 179,711
Other long-term assets172,094
 55,977
Total assets$3,942,175
 $3,183,132
Liabilities and equity   
Current liabilities:   
Current portion of long-term debt$86,547
 $64,600
Accounts payable457,213
 363,668
Accrued salaries and wages119,553
 67,126
Other accrued expenses128,769
 112,291
Billings in excess of costs and earnings111,898
 161,459
Other current liabilities98,171
 70,846
Total current liabilities$1,002,151
 $839,990
Long-term debt1,192,311
 961,379
Deferred income taxes274,465
 178,355
Other long-term liabilities170,203
 99,774
Total liabilities$2,639,130
 $2,079,498
Commitments and contingencies (Note 14)


 

Equity   
Preferred stock, $1.00 par value: authorized shares - 5,000,000; issued and outstanding shares – none$—
 $—
Common stock, $0.10 par value: authorized shares - 145,000,000; issued shares - 90,843,339 and 90,634,771 (including 1,790,632 and 1,927,286 of unvested restricted shares) as of September 30, 2017 and December 31, 2016, respectively9,084
 9,063
Capital surplus800,297
 788,914
Retained earnings696,331
 509,941
Accumulated other comprehensive loss(64,686) (65,814)
Treasury stock, at cost: 8,094,004 shares as of both September 30, 2017 and December 31, 2016(145,573) (145,573)
Total MasTec, Inc. shareholders’ equity$1,295,453
 $1,096,531
Non-controlling interests$7,592
 $7,103
Total equity$1,303,045
 $1,103,634
Total liabilities and equity$3,942,175
 $3,183,132


The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.

5



MASTEC, INC.
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWSEQUITY
(unaudited - in thousands)thousands, except shares)

Common StockTreasury StockCapital SurplusRetained EarningsAccumulated Other Comprehensive Loss
Total
MasTec, Inc. Shareholders’ Equity
Non-Controlling InterestsTotal Equity
SharesAmountSharesAmount
For the Three Months Ended September 30, 2022
Balance as of June 30, 202295,491,405 $9,549 (19,933,055)$(663,910)$1,049,576 $2,143,622 $(58,009)$2,480,828 $4,114 $2,484,942 
Net income48,896 48,896 326 49,222 
Other comprehensive income6,688 6,688 6,688 
Non-cash stock-based compensation5,698 5,698 5,698 
Forfeiture of restricted shares, net(23,312)(2)2 — — 
Shares withheld for taxes, net of other stock issuances(448)— (37)(37)(37)
Balance as of September 30, 202295,467,645 $9,547 (19,933,055)$(663,910)$1,055,239 $2,192,518 $(51,321)$2,542,073 $4,440 $2,546,513 
For the Three Months Ended September 30, 2021
Balance as of June 30, 202193,256,202 $9,326 (18,941,926)$(586,955)$841,190 $1,974,657 $(79,856)$2,158,362 $3,007 $2,161,369 
Net income111,087 111,087 1,370 112,457 
Other comprehensive loss(2,319)(2,319)(2,319)
Non-cash stock-based compensation6,073 6,073 6,073 
Forfeiture of restricted shares, net(9,174)(1)1 — — 
Shares withheld for taxes, net of other stock issuances(228)— (22)(22)(22)
Distributions to non-controlling interests— (76)(76)
Balance as of September 30, 202193,246,800 $9,325 (18,941,926)$(586,955)$847,242 $2,085,744 $(82,175)$2,273,181 $4,301 $2,277,482 
 For the Nine Months Ended September 30
 2017 2016
Cash flows from operating activities:   
Net income$188,160
 $78,086
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization138,384
 122,249
Non-cash interest expense, net2,375
 2,209
Non-cash stock-based compensation expense10,551
 11,291
Provision for (benefit from) deferred income taxes92,188
 (1,339)
Equity in earnings of unconsolidated affiliates(15,105) (3,549)
(Gains) losses on sales of assets, net, including fixed assets held-for-sale(3,335) 378
Other non-cash items, net14,920
 1,951
Changes in assets and liabilities, net of acquisitions:   
Accounts receivable(334,383) (302,590)
Inventories33,579
 (18,900)
Other assets, current and long-term portion(61,900) 48,032
Accounts payable and accrued expenses132,963
 172,731
Billings in excess of costs and earnings(54,199) 16,581
Book overdrafts(4,603) 8,883
Other liabilities, current and long-term portion39,030
 (8,872)
Net cash provided by operating activities$178,625
 $127,141
Cash flows from investing activities:   
Cash paid for acquisitions, net of cash acquired(115,995) (4,102)
Capital expenditures(83,330) (89,050)
Proceeds from sale of property and equipment13,585
 6,824
Payments for other investments(77,105) (8,858)
Proceeds from other investments13,416
 1,125
Net cash used in investing activities$(249,429) $(94,061)
Cash flows from financing activities:   
Proceeds from credit facilities2,002,430
 1,186,816
Repayments of credit facilities(1,840,409) (1,149,930)
Repayments of other borrowings(12,080) (8,188)
Payments of capital lease obligations(48,748) (41,828)
Payments of acquisition-related contingent consideration(18,843) (19,822)
Distributions to non-controlling interests(1,280) —
Proceeds from stock-based awards, net853
 3,938
Other financing activities, net(6,301) 1,385
Net cash provided by (used in) financing activities$75,622
 $(27,629)
Effect of currency translation on cash237
 (1,008)
Net increase in cash and cash equivalents$5,055
 $4,443
Cash and cash equivalents - beginning of period$38,767
 $4,984
Cash and cash equivalents - end of period$43,822
 $9,427
Supplemental cash flow information:   
Interest paid$47,163
 $40,433
Income taxes paid, net of refunds$77,533
 $15,141
Supplemental disclosure of non-cash information:   
Acquisition-related contingent consideration, new business combinations

$89,614
 $—
Equipment acquired under capital lease and financing arrangements$129,567
 $13,015
Accrued capital expenditures$1,345
 $4,119


The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.



6



MASTEC, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited - in thousands, except shares)
Common StockTreasury StockCapital SurplusRetained EarningsAccumulated Other Comprehensive Loss
Total
MasTec, Inc. Shareholders’ Equity
Non-Controlling InterestsTotal Equity
SharesAmountSharesAmount
For the Nine Months Ended September 30, 2022
Balance as of December 31, 202195,371,211 $9,537 (18,941,926)$(586,955)$1,033,615 $2,162,388 $(78,776)$2,539,809 $4,052 $2,543,861 
Net income30,130 30,130 388 30,518 
Other comprehensive income27,455 27,455 27,455 
Non-cash stock-based compensation18,870 18,870 18,870 
Issuance of restricted shares, net145,450 15 (15)— — 
Shares withheld for taxes, net of other stock issuances(49,016)(5)(4,117)(4,122)(4,122)
Acquisition of treasury stock, at cost(1,124,286)(81,291)(81,291)(81,291)
Issuance of shares in connection with acquisition133,157 4,336 6,886 11,222 11,222 
Balance as of September 30, 202295,467,645 $9,547 (19,933,055)$(663,910)$1,055,239 $2,192,518 $(51,321)$2,542,073 $4,440 $2,546,513 
For the Nine Months Ended September 30, 2021
Balance as of December 31, 202093,107,440 $9,311 (18,941,926)$(586,955)$837,453 $1,833,557 $(91,444)$2,001,922 $3,603 $2,005,525 
Net income252,187 252,187 2,147 254,334 
Other comprehensive income9,269 9,269 9,269 
Non-cash stock-based compensation17,673 17,673 17,673 
Issuance of restricted shares, net132,021 13 (13)— — 
Other stock issuances, net of shares withheld for taxes7,339 1 (2,442)(2,441)(2,441)
Distributions to non-controlling interests— (76)(76)
Purchase of non-controlling interests(5,429)(5,429)(1,373)(6,802)
Balance as of September 30, 202193,246,800 $9,325 (18,941,926)$(586,955)$847,242 $2,085,744 $(82,175)$2,273,181 $4,301 $2,277,482 

The accompanying notes are an integral part of these consolidated financial statements.
7

MASTEC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited - in thousands)
For the Nine Months Ended September 30,
20222021
Cash flows from operating activities:
Net income$30,518 $254,334 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation263,487 262,132 
Amortization of intangible assets81,242 54,522 
Non-cash stock-based compensation expense18,870 17,673 
(Benefit from) provision for deferred income taxes(9,293)439 
Equity in earnings of unconsolidated affiliates, net(19,423)(23,585)
Gains on sales of assets, net(21,914)(10,704)
Non-cash interest expense, net2,574 2,342 
Other non-cash items, net1,601 (8,218)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable(22,065)(59,665)
Contract assets(383,053)(109,399)
Inventories(36,130)11,968 
Other assets, current and long-term portion34,060 (8,998)
Accounts payable and accrued expenses293,899 134,487 
Contract liabilities(66,027)(7,478)
Other liabilities, current and long-term portion(49,675)(10,753)
Net cash provided by operating activities$118,671 $499,097 
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired(71,841)(604,907)
Capital expenditures(213,325)(132,348)
Proceeds from sale of property and equipment47,195 25,465 
Payments for other investments(3,723)(7,111)
Proceeds from other investments— 557 
Other investing activities, net— 1,650 
Net cash used in investing activities$(241,694)$(716,694)
Cash flows from financing activities:
Proceeds from credit facilities2,578,000 795,414 
Repayments of credit facilities(2,429,583)(606,575)
Payments of finance lease obligations(131,259)(117,437)
Repurchases of common stock(81,291)— 
Payments of acquisition-related contingent consideration(35,149)(21,675)
Payments for acquisition-related contingent assets(17,636)— 
Payments to non-controlling interests, including acquisition of interests— (8,965)
Payments for stock-based awards(4,061)(3,795)
Other financing activities, net(18,499)(2,503)
Net cash (used in) provided by financing activities$(139,478)$34,464 
Effect of currency translation on cash(2,559)(61)
Net decrease in cash and cash equivalents$(265,060)$(183,194)
Cash and cash equivalents - beginning of period$360,736 $423,118 
Cash and cash equivalents - end of period$95,676 $239,924 
Supplemental cash flow information:
Interest paid$69,327 $49,133 
Income taxes paid, net of refunds$1,827 $62,720 
Supplemental disclosure of non-cash information:
Additions to property and equipment from finance leases$184,700 $128,337 

The accompanying notes are an integral part of these consolidated financial statements.
8

MASTEC, INC.
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 – Business, Basis of Presentation and Significant Accounting Policies
Nature of the Business
MasTec, Inc. (collectively with its subsidiaries, “MasTec” or the “Company”) is a leading infrastructure construction company operating mainly throughout North America across a range of industries. The Company’s primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and utilityother infrastructure, such as: power delivery services, including transmission and distribution; wireless, wireline/fiber install-to-the-home and customer fulfillment activities; petroleumpower generation, primarily from clean energy and renewable sources; pipeline infrastructure, including natural gas pipeline infrastructure; electrical utility transmission and distribution; power generation;distribution infrastructure; heavy civil; and industrial infrastructure. MasTec’sMasTec���s customers are primarily in these industries. MasTec reports its results under five reportable segments: (1) Communications; (2) Clean Energy and Infrastructure; (3) Oil and Gas; (3) Electrical Transmission; (4) Power Generation and Industrial;Delivery; and (5) Other. In the first quarter of 2022, the Company began integrating the acquisition of Henkels & McCoy Holdings, Inc., formerly known as Henkels & McCoy Group, Inc. (“HMG”), into its operations. The HMG acquisition was completed on December 30, 2021, with its initial balance sheet reported within the Company’s Power Delivery segment. During the first quarter of 2022, the Company reported portions of HMG’s operations within its Power Delivery, Communications and Oil and Gas segments, as appropriate, and HMG’s corporate functions within its Corporate results. Accordingly, HMG’s December 31, 2021 balance sheet information was recast to conform with the new reporting structure. See Note 13 - Segments and Related Information.
In October 2022, MasTec completed the acquisition of Infrastructure Energy Alternatives, Inc. (“IEA”), a leading utility-scale renewable energy infrastructure solutions providers in North America. IEA has expertise in engineering, procurement, construction and other service capabilities, with long-standing relationships across a diverse customer base. The Company expects to include IEA within its Clean Energy and Infrastructure segment. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets, Net, for additional information.
Basis of Presentation
The accompanying condensed unaudited consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated balance sheet as of December 31, 20162021 is derived from the Company’s audited financial statements as of that date. Because certain information and footnote disclosures have been condensed or omitted, these condensed unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 20162021 contained in the Company’s 20162021 Annual Report on Form 10-K (the “2016“2021 Form 10-K”). In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been included. CertainWhen necessary, certain prior year amounts have been reclassified to conform towith the current period presentation.presentation, including for the first quarter 2022 change in segment balance sheet information for HMG, as discussed above. In addition, in the fourth quarter of 2021, the Company updated its presentation of gains or losses, net, from the sale of property and equipment to include such amounts within general and administrative expenses. Previously, such gains or losses were included within other income or expense. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The Company believes that the disclosures made in these condensed unaudited consolidated financial statements are adequate to make the information not misleading.
Principles of Consolidation
The accompanying condensed unaudited consolidated financial statements include MasTec, Inc. and its subsidiaries and include the accounts of all majority owned subsidiaries over which the Company exercises control and, when applicable, entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Other parties’ interests in entities that MasTec consolidates are reported as non-controlling interests within equity.equity, except for mandatorily redeemable non-controlling interests, which are recorded within other liabilities. Net income or loss attributable to non-controlling interests is reported as a separate line item below net income or loss. The Company’sCompany applies the equity method of accounting for its investments in entities for which the Companyit does not have a controlling financial interest, but forover which it has the ability to exert significant influence, are accounted for using the equity method of accounting. Equity method investments are recorded as other long-term assets, or, for investments in a net liability position, within other long-term liabilities. Income or loss from these investments is recorded as a separate line item in the statements of operations. Intercompany profits or losses associated with the Company’s equity method investments are eliminated until realized by the investee in transactions with third parties.influence. For equity investees in which the Company has an undivided interest in the assets, liabilities and profits or losses of an unincorporated entity, but the Company does not exercise control over the entity, the Company consolidates its proportional interest in the accounts of the entity. The cost method is used for investments in entities for which the Company does not have the ability to exert significant influence.
Management determines whether each business entity in which it has equity interests, debt, or other investments constitutes a variable interest entity (“VIE”) based on the nature and characteristics of such arrangements. If an investment arrangement is determined to be a VIE, then management determines if the Company is the VIE’s primary beneficiary by evaluating several factors, including the Company’s: (i) risks and responsibilities; (ii) ownership interests; (iii) decision making powers; and (iv) financial interests, among other factors. If management determines the Company is the primary beneficiary of a VIE, then it would be consolidated, and other parties’ interests in the VIE would be accounted for as non-controlling interests. The primary beneficiary consolidating the VIE must normally have both (i) the power to direct the primary activities of the VIE and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE, which, in either case, could be significant to the VIE. As of September 30, 2017, the Company determined that certain of its investment arrangements were VIEs; however, because it does not have the power to direct the primary activities that most significantly impact the economic performance of these VIEs, the Company is not the primary beneficiary, and accordingly, has not consolidated these VIEs.
Translation of Foreign Currencies
The assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. dollars at period-end exchange rates, with resulting translation gains or losses accumulatedincluded within other comprehensive income or loss. Revenue and expenses are translated into U.S. dollars at average rates of exchange during the applicable period. Substantially all of the Company’s foreign operations use their local currency as their functional currency. For foreign operations for which the local currency is not the functional currency, the operation’s non-monetary assets are remeasured into U.S. dollars at historical exchange rates. All other accounts are remeasured at current exchange rates. Gains or losses from remeasurement are included in other income or expense, net. Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in other income or expense, net.
In these condensed unaudited consolidated financial statements, “$” means U.S. dollars unless otherwise noted.
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Management Estimates
The preparation of consolidated financial statements in conformityaccordance with U.S. GAAP requires the use of estimates and assumptions that affect


the amounts reported in the consolidated financial statements and accompanying notes. KeyThese estimates include: the recognition of revenueare based on historical experience and project profit or loss (which the Company defines as project revenue, less project costs of revenue, including project-related depreciation), in particular, on construction contracts accounted forvarious other assumptions that management believes to be reasonable under the percentage-of-completion method,circumstances, including the potential future effects of macroeconomic trends and events, such as rising inflation and interest rate levels; recessionary issues; climate-related matters; market, regulatory and industry factors; global events, such as the ongoing military conflict in Ukraine; and public health matters. These estimates form the basis for whichmaking judgments about the recorded amounts require estimates of costs to completeCompany’s operating results and the amount of probable contract price adjustments; allowances for doubtful accounts; estimated faircarrying values of goodwillassets and intangible assets; acquisition-related contingent consideration and investments in equity investees; asset lives used in computing depreciation and amortization; fair values of financial instruments; accrued self-insured claims; share-based compensation;liabilities that are not readily apparent from other accruals and allowances; accounting for income taxes; and the estimated impact of litigation and other contingencies.sources. While management believes that such estimates are reasonable when considered in conjunction with the Company’s consolidated financial position and results of operations taken as a whole, actual results could differ materially from thosethese estimates.
Key estimates include: the recognition of revenue and project profit or loss, which the Company defines 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 and other assets, acquisition-related contingent consideration and other liabilities, equity investments and long-lived assets; allowances for credit losses; asset lives used in computing depreciation and amortization; fair values of financial instruments; self-insurance liabilities; certain other accruals and allowances; income taxes; and the estimated effects of litigation and other contingencies.
General Economic, Regulatory and Market Conditions
The Company has experienced, and may continue to experience, direct and indirect negative effects on its business and operations from negative economic, regulatory and market conditions, including recent inflationary effects on fuel prices, labor and materials costs, rising interest rates, potential recessionary impacts and supply chain disruptions that could negatively affect demand for new projects and/or delay existing project timing or cause increased project costs. The Company may also experience negative effects from possible longer-term changes in consumer and customer behavior resulting from the effects of the COVID-19 pandemic. While the adverse effects of the COVID-19 pandemic began to subside in 2022, its effects vary, and economic conditions and business activities could be disrupted in the future. The extent to which general economic, regulatory and market conditions could affect the Company’s business, operations and financial results is uncertain as it will depend upon numerous evolving factors that management may not be able to accurately predict, and, therefore, any future impacts on the Company’s business, financial condition and/or results of operations cannot be quantified or predicted with specificity.
Significant Accounting Policies
Revenue Recognition
RevenueThe Company recognizes revenue from contracts with customers when, or as, control of promised services and goods is derivedtransferred to customers. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for the services and goods transferred. The Company primarily recognizes 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. The Company derives revenue primarily from construction projects performed underunder: (i) master and other service agreements, as well as fromwhich 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 or jobs requiring the construction and installation of an entire infrastructure system, or specified units within an entire infrastructure system. The Company frequently provides services undersystem, which are subject to multiple pricing options, including fixed price, unit price, or fixed price master service or other service agreements. Revenue and related costs for master and other service agreements billed on a time and materials, basis are recognized as the services are rendered.or cost plus a markup. Revenue derived from projects performed under master service and other service agreements totaled 32%52% and 38%37% of consolidated revenue for the three month periods ended September 30, 20172022 and 2016,2021, respectively, and totaled 35%54% and 43%35% for the nine month periods ended September 30, 20172022 and 2016,2021, respectively. The Company also performs services under
For certain master service and other service agreements, on a fixed fee basis, under which MasTec furnishes specified units of service for a fixed price per unit of service and revenue is recognized asat a point in time, primarily for install-to-the-home and certain other wireless services in the services are rendered. Revenue from fixed price contracts providesCompany’s Communications segment. This is generally when the work order has been fulfilled, which is typically the same day the work is initiated. Point in time revenue accounted for a fixed amountapproximately 4% of consolidated revenue forin each of the entire project, subject to certain additions for changed scope or specifications. Revenue from these contracts, as well as for certain projects pursuant to masterthree and nine month periods ended September 30, 2022 and 2021. Substantially all of the Company’s other service agreements,revenue is recognized using the percentage-of-completion method, under which the percentage ofover time.

The total contract transaction price and cost estimation processes used for recognizing revenue to be recognized for a given project is measured by the percentage of costs incurred to date on the contract to the total estimated costs for the contract. Such contracts provide that the customer accept completion of progress to date and compensate the Company for services rendered, which may be measured in terms of costs incurred, units installed, hours expended or some other measure of progress. Contract costs include all direct materials, labor and subcontracted costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and the operational costs of capital equipment. Much of the materials associated with the Company’s work are customer-furnished and are therefore not included in contract revenue and costs.
The estimation process for revenue recognizedover time under the percentage-of-completioncost-to-cost method is based on the professional knowledge and experience of the Company’s project managers, engineers, operational and financial professionals. Management reviews estimates of total contract revenuetransaction price and total project costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected contract settlementsvariable consideration are factors that influence estimates of the total contract value andtransaction price, total costs to complete those contracts and therefore, the Company’s profit recognition. Changes in these factors maycould result in revisions to costs and income and their effects are recognizedrevenue in the period in which the revisions are determined, which could materially affect the Company’s consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such changeslosses are recognized.determined. For both the nine month periods ended September 30, 20172022 and 2016,2021, 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, 20162021 and 2015. Provisions2020. Changes in recognized revenue, net, as a result of changes in total contract transaction price estimates, including from variable consideration, from performance obligations satisfied or partially satisfied in prior periods, for losses on uncompleted contracts are made in the period in whichthree month periods ended September 30, 2022 and 2021 totaled net increases of approximately $3.8 million and $5.2 million, respectively. For the nine month periods ended September 30, 2022 and 2021, such losses are determinedchanges totaled net increases of approximately $10.7 million and $36.9 million, respectively.
Performance Obligations.A performance obligation is a contractual promise to be probabletransfer 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 amount can be reasonably estimated.performance obligation is satisfied. The majority of fixed price contractsthe Company’s performance obligations are completed within one year.
The
10

Remaining performance obligations represent the amount of unearned transaction prices under contracts for which work is wholly or partially unperformed, including the Company’s share of unearned transaction prices from its proportionately consolidated non-controlled joint ventures. As of September 30, 2022, the amount of the Company’s remaining performance obligations was $5.3 billion. Based on current expectations, the Company anticipates it will recognize approximately $1.6 billion of its remaining performance obligations as revenue during 2022, with the vast majority of the remaining balance expected to be recognized in 2023.
Variable Consideration. Transaction prices for the Company’s contracts may incur costs subject toinclude variable consideration, which comprises items such as change orders, whether approved or unapproved byclaims and incentives. Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the customer, and/or claims relatedamount of consideration to certain contracts. Management determineswhich the probability that such costsCompany will be recoveredentitled. Management’s estimates of variable consideration and the determination of whether to include estimated amounts in transaction prices are based uponlargely on engineering studies and legal opinions, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer. The Company treats such costs as a costcustomer and all other relevant information that is reasonably available at the time of contract performancethe estimate. To the extent unapproved change orders, claims and other variable consideration reflected in transaction prices are not resolved in the period incurred if it is not probable that the costs will be recovered, and defers costsCompany’s favor, or recognizes revenue up to the amountextent incentives reflected in transaction prices are not earned, there could be reductions in, or reversals of, the related cost if it is probable that the contract price will be adjusted and can be reliably estimated. previously recognized revenue.
As of September 30, 20172022 and December 31, 2016,2021, the Company hadincluded approximately $77$141 million and $17$104 million, respectively, of change orders and/or claims that had been included as contract price adjustments onin transaction prices for certain contracts that were in the process of being resolved in the normalordinary course of business, including through negotiation, arbitration and other proceedings. These contracttransaction price adjustments, whichwhen earned, are included within costs and earnings in excess of billingscontract assets or billed accounts receivable, net of allowance, as appropriate, represent management’s best estimate of contract revenue that has been earned and that management believes is probable of collection.appropriate. As of both September 30, 20172022 and December 31, 2016,2021, these change orders wereand/or claims primarily related to contractscertain projects in the OilCompany’s Clean Energy and Gas segment.Infrastructure and Power Delivery segments. The Company actively engages in substantive meetings with its customers to complete the final approval process and generally expects these processes to be completed within one year. The amountsAmounts ultimately realized upon final acceptanceagreement by its customers could be higher or lower than such estimated amounts.
Billings In Excess of Costs and Earnings (“BIEC”) on uncompleted contracts is classified within current liabilities. Costs and Earnings In Excess of Billings (“CIEB”), which is also referred to as work in process, is classified within current assets. Work in process on contracts is based on work performed but not yet billed to customers as per individual contract terms.
Recently Issued Accounting Pronouncements
There have been no changes inThe discussion below describes the expected dateseffects of adoption or estimated effects on the Company’s consolidated financial statements of recently issuedrecent accounting pronouncements, as updated from those disclosedthe discussion in the Company’s 20162021 Form 10-K. See below for additional discussion of recently issued accounting pronouncements.


Recent Accounting Pronouncements Not Yet Adopted
In August 2017,October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2017-12, Derivatives and Hedging 2021-08, Business Combinations (Topic 815)805): Targeted Improvements to Accounting for Hedging ActivitiesContract Assets and Contract Liabilities from Contracts with Customers (“ASU 2017-12”2021-08”). ASU 2017-12 amends the hedge accounting model in Topic 815 to enable entities to better portray the economics of their risk management activitiesimprove consistency for revenue recognition in the financial statementspost-acquisition period for acquired contracts as compared to contracts entered into subsequent to acquisition. ASU 2021-08 requires an acquirer to recognize and enhance the transparencymeasure contract assets and understandability of hedge results. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire changecontract liabilities acquired in thea business combination in accordance with Topic 606, Revenue from Contracts with Customers, rather than at fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also simplifies certain documentation and assessment requirements.value. ASU 2017-122021-08 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. All transition requirements and elections should be applied to hedging relationships existing on the date of adoption and their effects should be reflected as of the beginning of the fiscal year of adoption. The presentation and disclosure requirements are effective on a prospective basis. The Company is currently evaluating the potential effect of this ASU on its consolidated financial statements.

In May 2017, FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 clarifies when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. Limited and administrative modifications that do not change the value, vesting conditions, or classification of the award are exempt from following the modification guidance in Topic 718. ASU 2017-09 is effective on a prospective basis for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017,2022, with early adoption permitted. The Company does not expect the adoption ofthat this ASU towill have a material effect on its consolidated financial statements.
In February 2017, the FASB issued ASU 2017-05, Other Income- Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets(“ASU 2017-05”). ASU 2017-05 clarifies certain guidance under Subtopic 610-20 that was issued as part of the new revenue standard, including the recognition of gains and losses on the sale or transfer of nonfinancial assets to noncustomers, and clarifies accounting for contributions of nonfinancial assets to joint ventures, among other requirements. ASU 2017-05 is effective on a retrospective basis for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the potential effect of this ASU on its consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The core principle of this ASU is that a company will recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. In doing so, companies will need to use judgment and make estimates when evaluating contract terms and other relevant facts and circumstances. Additionally, ASU 2014-09 requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of ASU 2014-09 by one year. ASU 2014-09, as amended, is effective using either the full retrospective or modified retrospective transition approach for fiscal years, and for interim periods within those years, beginning after December 15, 2017. In 2016, the FASB issued several accounting standards updates to clarify certain topics within ASU 2014-09. The Company will adopt ASU 2014-09, and its related clarifying ASUs, as of January 1, 2018.
The Company has substantially completed its assessment of the potential effects of these ASUs on its consolidated financial statements, business processes, systems and controls.  The Company’s assessment included a detailed review of representative contracts at each of the Company’s business units and a comparison of its historical accounting policies and practices to the new standard. Based on the Company’s review of various types of revenue arrangements, the Company expects to recognize revenue and earnings over time utilizing the cost-to-cost measure of progress for its fixed price contracts and certain master service and other service agreements, consistent with current practice.  For these contracts, the cost-to-cost measure of progress best depicts the transfer of control of goods or services to the customer under the new standard. The Company has substantially completed its analysis of the information necessary to enable the preparation of the financial statements and related disclosures under the new standard. As part of this analysis, the Company evaluated its information technology capabilities and systems, and does not expect to incur significant information technology costs to modify systems currently in place. The Company will implement targeted changes to its internal reporting processes to facilitate gathering the data needed for reporting and disclosure under the new standard. The Company will also implement updates to its control processes and procedures, as necessary, based on changes resulting from the new standard. The Company does not expect any such updates to materially affect the Company’s internal controls over financial reporting.
The Company anticipates adopting the standard using the modified retrospective transition approach.  Under this approach, the new standard would apply to all new contracts initiated on or after January 1, 2018.  For existing contracts that have remaining obligations as of January 1, 2018, any difference between the recognition criteria in these ASUs and the Company’s current revenue recognition practices would be recognized using a cumulative effect adjustment to the opening balance of retained earnings.  Any potential effect of adoption of these ASUs has not yet been quantified; however, based on the review of contracts across all of the Company’s business units to date, the adoption of these ASUs is not expected to have a material effect on the timing or amount of revenue recognized as compared to current practices.  The Company is training its business units for the implementation of the new standard, and continues developing the disclosures required by the new standard. The Company is also reviewing certain contracts entered into by its business units subsequent to its initial assessment that are expected to have performance obligations remaining as of January 1, 2018 for any cumulative effect adjustments that may be required upon adoption.
Accounting Pronouncements Adopted as of January 1, 2017
The Company adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) effective January 1, 2017. Under ASU 2016-09, excess tax benefits (“windfalls”) or tax deficiencies (“shortfalls”) are recognized in the income statement, rather than as additional paid-in-capital as under the previous guidance, and are presented as operating cash flows,


rather than as a financing activity. This ASU also increased the amount of tax that can be withheld by an employer for employee tax withholdings without resulting in liability classification of an award. Payments to taxing authorities for such employee withholdings are presented as financing activities. ASU 2016-09 also allows companies to account for forfeitures of share-based payments as they occur or to estimate such amounts. The provisions of ASU 2016-09 that were applicable to the Company were adopted on a prospective basis; the retrospective requirement to classify payments to taxing authorities for employee withholdings as a financing activity was consistent with the Company’s existing methodology, therefore did not result in a change. The adoption of ASU 2016-09 is expected to result in volatility in income tax expense given that windfalls or shortfalls are recognized in income tax expense in the periods in which they occur. The other components of this ASU did not have a material effect on the consolidated financial statements. See Note 2 - Earnings Per Share, Note 9 - Stock-Based Compensation and Other Employee Benefit Plans and Note 12 - Income Taxes for additional information.
Note 2 – Earnings Per Share
Basic earnings or loss per share is computed by dividing net income or loss attributable to MasTec by the weighted average number of common shares outstanding for the period, which excludes non-participating unvested restricted share awards. Diluted earnings per share is computed by dividing net income attributable to MasTec by the weighted average number of fully diluted shares, as calculated primarily under the treasury stock method, which includes the potential effect of dilutive common stock equivalents, such as issued but unvested restricted shares and/or outstanding but unexercised stock options. The Company has no remaining outstanding stock options; all options under the Company’s stock option grants were exercised in 2016.shares. If the Company reports a loss, rather than income, the computation of diluted loss per share excludes the effect of dilutive common stock equivalents, as their effect would be anti-dilutive.
As discussed in Note 1 - Business, Basis of Presentation and Significant Accounting Policies, the Company adopted ASU 2016-09 effective January 1, 2017 on a prospective basis. ASU 2016-09 changed the recognition of excess tax benefits or tax deficiencies upon the vesting of share-based payment awards from additional paid-in capital, within equity, to income tax benefit or expense, within the statement of operations. As a result, excess tax benefits or deficiencies under ASU 2016-09 are excluded from assumed proceeds under the treasury stock method. Previously, excess tax benefits or tax deficiencies were included within assumed proceeds. For both the three and nine month periods ended September 30, 2017, this resulted in the inclusion of approximately 0.3 million incremental shares in the Company’s total weighted average diluted shares outstanding.
The following table provides details underlying the Company’s earnings per share calculations for the periods indicated (in thousands):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Net income attributable to MasTec:
Net income - basic (a)
$48,896 $111,087 $30,130 $252,187 
Fair value gain (loss) related to resolved contingent payments (b)
$143 $— $1,459 $— 
Net income - diluted (a)
$48,753 $111,087 $28,671 $252,187 
Weighted average shares outstanding:
Weighted average shares outstanding - basic(c)
73,936 72,503 74,386 72,481 
Dilutive common stock equivalents (d)(e)
1,137 1,474 1,190 1,440 
Weighted average shares outstanding - diluted75,073 73,977 75,576 73,921 
 For the Three Months Ended September 30 For the Nine Months Ended September 30
 2017 2016 2017 2016
Net income attributable to MasTec:       
Net income - basic and diluted (a)
$63,752
 $56,277
 $186,390
 $77,672
Weighted average shares outstanding:       
Weighted average shares outstanding - basic80,953
 80,462
 80,859
 80,323
Dilutive common stock equivalents1,433
 1,083
 1,422
 918
Weighted average shares outstanding - diluted82,386
 81,545
 82,281
 81,241
        
Additional information:       
Weighted average anti-dilutive common stock equivalents (b)
—
 1
 12
 —
(a)Calculated as total net income less amounts attributable to non-controlling interests.
(b)Represents anti-dilutive common stock equivalents as calculated under the treasury stock method.
(a)For basic net income, calculated as total net income or loss less amounts attributable to non-controlling interests. For diluted net income, calculated as total net income or loss, less amounts attributable to non-controlling interests, adjusted for the fair value gain or loss, if any, related to additional contingent payments to the former owners of an acquired business for which the contingency has been resolved as of the respective period. See discussion above and in Note 3 -– Acquisitions, Goodwill and Other Intangible Assets, Net.
The following table provides details of goodwill by reportable segment(b)For the three and nine month periods ended September 30, 2022, represents the fair value gain or loss related to additional contingent payments for which the contingency has been resolved as of September 30, 2017 (in millions):2022. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets, Net for additional information.
11

 Communications Oil and Gas 
Electrical
Transmission
 Power Generation and Industrial Total Goodwill
Goodwill, gross$462.4
 $461.6
 $149.9
 $137.0
 $1,210.9
Accumulated impairment losses—
 (75.4) —
 —
 (75.4)
Goodwill, net$462.4
 $386.2
 $149.9
 $137.0
 $1,135.5
(c)For the three and nine month periods ended September 30, 2022, basic shares include approximately 140,000 and 114,000 weighted average shares, respectively, related to additional contingent payments.
(d)For the three and nine month periods ended September 30, 2022, weighted average anti-dilutive common stock equivalents totaled approximately 8,000 and 135,000 respectively, and for the three and nine month periods ended September 30, 2021, totaled approximately 10,000 and 109,000, respectively.
(e)For the three and nine month periods ended September 30, 2022, common stock equivalents included approximately11,000 and 37,000 weighted average shares, respectively, related to additional contingent payments to the former owners of an acquired business.
For the nine month period ended September 30, 2017, additions to2022, the Company repurchased approximately 1,124,000 shares of its common stock, the effect of which on the Company’s weighted average shares outstanding for the period was a reduction of approximately 598,000 shares. See Note 11 – Equity for details of the Company’s share repurchase transactions. Additionally, in May 2022 and December 2021, the Company issued approximately 133,000 and 1,975,000 shares, respectively, of its common stock in conjunction with the HMG acquisition. In addition, in October 2022, the Company issued approximately 2,652,000 shares of its common stock in connection with the recently completed acquisition of IEA. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets, Net for additional information.
Note 3 – Acquisitions, Goodwill and Other Intangible Assets, Net
The following table provides a reconciliation of changes in goodwill from new business combinations totaled $135.3 million. Currency translation effects related to goodwill and accumulated impairment losses totaled approximately $9.8 million of gains and $5.4 million of losses, respectively,by reportable segment for the nine month period ended September 30, 2017. For2022 (in millions). Goodwill balances as of December 31, 2021 were recast in the nine month period ended September 30, 2016first quarter of 2022 to reflect the change in segment reporting for the HMG acquisition, as discussed in Note 1 – Business, Basis of Presentation and Significant Accounting Policies. Goodwill was reallocated based on the estimated relative fair value of the respective HMG reporting units. See Note 13 – Segments and Related Information for additional information.
CommunicationsClean Energy and InfrastructureOil and GasPower DeliveryTotal Goodwill
Goodwill, gross, as of December 31, 2021 (a)
$614.5 $166.1 $561.3 $303.4 $1,645.3 
Accumulated impairment loss (b)
— (124.7)— (124.7)
Goodwill, net, as of December 31, 2021$614.5 $166.1 $436.6 $303.4 $1,520.6 
Additions from new business combinations2.9 5.9 4.1 1.6 14.5 
Measurement period adjustments (c)
(11.4)2.1 6.2 (36.8)(39.9)
Currency translation adjustments— — (1.4)— (1.4)
Goodwill, net as of September 30, 2022$606.0 $174.1 $445.5 $268.2 $1,493.8 
(a)    The above described change in segment reporting for the HMG acquisition resulted in a decrease in goodwill for the Power Delivery segment of $23.4 million and increases in goodwill for the Communications and Oil and Gas segments of $13.0 million and $10.4 million, additions to goodwill from accrualsrespectively, as of acquisition-related contingent consideration totaled $5.8 million, andDecember 31, 2021.
(b)    Accumulated impairment losses include the effects of currency translation effects relatedgains and/or losses.
(c)    Represents adjustments to goodwill and accumulated impairment losses totaled $6.0 millionpreliminary estimates of gains and $3.1 millionfair value within the measurement period of losses, respectively.


up to one year from the date of acquisition.
The following table provides a reconciliation of changes in other intangible assets, net, for the period indicated (in millions):
Other Intangible Assets
Non-AmortizingAmortizing
Trade NamesCustomer Relationships and BacklogPre-Qualifications
Other (a)
Total
Other intangible assets, gross, as of December 31, 2021$34.5 $763.1 $73.9 $124.6 $996.1 
Accumulated amortization(278.0)(21.4)(26.4)(325.8)
Other intangible assets, net, as of December 31, 2021$34.5 $485.1 $52.5 $98.2 $670.3 
Additions from new business combinations— 5.2 — 0.7 5.9 
Measurement period adjustments (b)
— 56.0 — (10.6)45.4 
Currency translation adjustments— — (2.1)— (2.1)
Amortization expense(65.5)(6.6)(9.1)(81.2)
Other intangible assets, net, as of September 30, 2022$34.5 $480.8 $43.8 $79.2 $638.3 
 Other Intangible Assets
 Non-Amortizing Amortizing  
 Trade Names Pre-Qualifications Customer Relationships and Backlog 
Other (a)
 Total
Other intangible assets, gross, as of December 31, 2016$34.5
 $74.6
 $195.1
 $19.1
 $323.3
Accumulated amortization    (131.9) (11.7) (143.6)
Other intangible assets, net, as of December 31, 2016$34.5
 $74.6
 $63.2
 $7.4
 $179.7
Additions from new business combinations—
 —
 24.4
 2.4
 26.8
Amortization expense    (13.9) (1.1) (15.0)
Currency translation adjustments—
 3.4
 0.5
 0.1
 4.0
Other intangible assets, net, as of September 30, 2017$34.5
 $78.0
 $74.2
 $8.8
 $195.5
(a)Consists principally of trade names and non-compete agreements.

(a)Consists principally of trade names and non-compete agreements.
Amortization expense associated with intangible assets(b)Represents adjustments to preliminary estimates of fair value within the measurement period of up to one year from the date of acquisition.
Quarterly Assessment for Indicators of Impairment. During the three month periods ended September 30, 2017 and 2016 totaled $6.0 million and $5.2 million, respectively, andthird quarter of 2022, the Company performed a quarterly review for the nine month periods ended September 30, 2017 and 2016, totaled $15.0 million and $15.7 million, respectively.
2017 Acquisitions.Duringindicators of impairment, which considered its results for the nine month period ended September 30, 2017,2022, together with its expectations of future results, including consideration of the potential effects of shifts in timing for certain projects. In conjunction with this quarterly review, management performed a quantitative assessment of the goodwill associated with two reporting units within its Oil and Gas segment and one reporting unit within its Power Delivery segment. Based on the results of these assessments, management determined that the estimated fair values of these reporting units substantially exceeded their carrying values as of September 30, 2022. Significant changes in the assumptions or estimates used in management’s assessment, such as a reduction in profitability and/or cash flows, changes in market conditions, including decreases in market activity levels and/or
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the effects of rising inflation, including on interest rates, could result in non-cash impairment charges to goodwill and indefinite-lived intangible assets in the future.
Recent Acquisitions
The Company seeks to grow and diversify its business both organically and through acquisitions and/or strategic arrangements in order to deepen its market presence, broaden its geographic reach and expand its service offerings.
2022 Acquisitions. For the nine month period ended September 30, 2022, MasTec completed threefour acquisitions, includingwhich included all of the equity interests of (i) a wireline/fiber deploymentan infrastructure construction contractor,company focusing on water, sewer and utility projects and with expertise in excavation and site work, which acquisition is included in the Company’s Communications segment; (ii) a heavy civil construction services company, which is included in the Company’s Power Generation and Industrial segment, and (iii) an oil and gas pipeline equipment company, which is included inwithin the Company’s Oil and Gas segment. segment and was effective in January; (ii) a telecommunications company specializing in wireline services, which acquisition is included within the Company’s Communications segment and was effective as of the end of May; (iii) a company specializing in the construction of overhead high voltage transmission lines, which acquisition is included within the Company’s Power Delivery segment and was effective in July; and (iv) a company that specializes in the production of concrete and aggregate products, which acquisition is included within the Company’s Clean Energy and Infrastructure segment and was effective in August. The aggregate purchase price for these acquisitions was composed of approximately $50.2 million in cash, net of cash acquired and earn-out liabilities valued at approximately $3.9 million. Determination of the estimated fair values of net assets acquired and the estimated earn-out liabilities and consideration transferred for these acquisitions was preliminary as of September 30, 2022; as a result, further adjustments to these estimates may occur.
2021 Acquisitions.During 2021, MasTec completed fourteen acquisitions, including all of the equity interests of the following:
(i) Within the Company’s Power Delivery segment: 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, which acquisition was effective in December. In the first quarter of 2022, MasTec integrated and began reporting the results of HMG within its Power Delivery, Communications and Oil and Gas segments, as appropriate, and began reporting HMG’s corporate functions within its corporate results. See Note 13 – Segments and Related Information. During 2021, the Company also acquired an electric utility distribution contractor and a company specializing in vegetation management services for the electric and telecommunications industries, which acquisitions were effective in December; and Intren, LLC (“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, which acquisition was effective in May;
(ii) within the Company’s 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, which acquisitions were effective in February and April, respectively;
(iii) within the Company’s Communications segment: a telecommunications company specializing in cabling, plant and other network services, which acquisition was effective in November; a telecommunications and utility technical services company focusing on outside plant telecommunications engineering; a telecommunications and cable services provider; and a utilities infrastructure company, providing power line construction and repair services, all of which acquisitions were effective in May; and business operations specializing in install-to-the-home services, which acquisition was effective in August; and
(iv) within the Company’s Oil and Gas segment: an infrastructure construction company focusing on water, sewer and utility projects, along with expertise in site work; and a company specializing in environmental services for energy infrastructure and heavy civil projects, both of which acquisitions were effective in December; and a pipeline contractor focusing on integrity and maintenance work related to gas distribution infrastructure, which acquisition was effective in February.
These acquisitions were funded with cash on hand, borrowings under the Company’s credit facility and with shares of the Company’s common stock and are subject to customary purchase price adjustments.
Determination of the estimated fair values of the net assets acquired and the estimated earn-out liabilities and consideration transferred for thesecertain of the Company’s fourth quarter 2021 acquisitions iswas preliminary as of September 30, 2017, and2022; as a result, further adjustments to management’s preliminarysuch estimates may occur.

The following table summarizes the estimated fair values of consideration paid and identifiablenet assets acquired and liabilities assumedfor the 2021 acquisitions, as adjusted, as of the respective dates of acquisitionSeptember 30, 2022 (in millions).:
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Acquisition consideration:2017
Cash$118.8
Fair value of contingent consideration (earn-out liability)89.6
Total consideration transferred$208.4
Identifiable assets acquired and liabilities assumed: 
Current assets, primarily composed of accounts receivable and $2.8 million of cash acquired$42.7
Property and equipment56.9
Amortizing intangible assets26.8
Other long-term assets0.5
Current liabilities, including current portion of capital lease obligations and long-term debt(28.4)
Long-term debt, including capital lease obligations(9.9)
Deferred income taxes(15.5)
Total identifiable net assets$73.1
Goodwill$135.3
Total net assets acquired, including goodwill$208.4
Acquisition consideration(a):
HMGAll otherTotal
Cash, net of cash acquired$402.4 $866.6 $1,269.0 
Shares transferred181.7 — 181.7 
Estimated fair value of contingent consideration— 102.9 102.9 
Total consideration$584.1 $969.5 $1,553.6 
Identifiable assets acquired and liabilities assumed:
Accounts receivable and contract assets$409.5 $271.1 $680.6 
Current assets14.6 26.8 41.4 
Property and equipment252.1 250.6 502.7 
Long-term assets, primarily operating lease right-of-use assets84.9 81.9 166.8 
Amortizing intangible assets164.4 444.2 608.6 
Accounts payable(108.0)(49.3)(157.3)
Current liabilities, including current portion of operating lease liabilities(154.3)(137.1)(291.4)
Long-term debt, including finance lease obligations(0.2)(4.4)(4.6)
Long-term liabilities, primarily operating lease liabilities and deferred income taxes(150.3)(76.6)(226.9)
Total identifiable net assets$512.7 $807.2 $1,319.9 
Goodwill71.4 165.9 237.3 
Total net assets acquired, including goodwill$584.1 $973.1 $1,557.2 
Bargain purchase gain— (3.6)(3.6)
Total consideration$584.1 $969.5 $1,553.6 

(a)    Acquisition consideration in the table above excludes approximately $65 million of measurement period adjustments for estimated payments that will be made to the sellers of HMG if certain acquired receivables are collected. Given the pass-through nature of these contingent payments, they have been excluded from total consideration and current assets in the table above. See below for related discussion.
Amortizing intangible assets related to the 2017HMG acquisition are primarily composed of customer relationships, and to a lesser extent, trade names and backlog. Customer relationship intangible assets totaled approximately $132 million, and had a weighted average life of approximately 12 years, based on HMG’s operational history and established relationships with, and the nature of, its customers, which are primarily in the utilities industry. The weighted average life of amortizing intangible assets in the aggregate for the HMG acquisition was 11 years. Amortizing intangible assets related to “All other” acquisitions are primarily composed of customer relationships backlog and othertrade names, which each had a weighted average life of approximately 17 years. The aggregate weighted average life related to “All other” amortizing intangible assets was 17 years. INTREN’s acquired intangible assets, which had weighted averageare included within “All other” acquisitions in the table above, included a customer relationship and a trade name intangible asset representing $281 million in the aggregate, having asset lives of approximately 1120 years 4 yearseach based on INTREN’s operational history and 7 years, respectively,established relationships with, and 10 yearsthe nature of, its customers, which are primarily in total, and will bethe utilities industry. Amortizing intangible assets are amortized in a manner consistent with the pattern in which the related benefits are expected to be consumed.
The goodwill balances for each of the respective acquisitions, including approximately $49 million for INTREN, represent the estimated valuevalues of each acquired company’s geographic presence in key markets, their assembled workforce, and management teamteam’s industry-specific project management expertise as well asand synergies expected to be achieved from the combined operations of each of the acquired companies and MasTec. Approximately $75$155 million of the acquired goodwill balance as of September 30, 2017related to the 2021 acquisitions is expected to be tax deductible.deductible as of September 30, 2022. One of the Company’s fourth quarter 2021 acquisitions within its Power Delivery segment resulted in the recognition of a bargain purchase gain of $3.6 million, of which $0.2 million was recognized during the nine month period ended September 30, 2022.

The HMG purchase agreement provides for certain additional payments to be made to the sellers if certain acquired receivables are collected by the Company (the “Additional Payments”). Pursuant to the terms of the purchase agreement, a portion of the Additional Payments will be made in cash, with the remainder due in shares of MasTec common stock. The estimated number of potential shares that could be issued related to such Additional Payments will be based on the amounts ultimately collected and the share price as defined within the purchase agreement. Changes in the estimated fair value of potential shares that could be issued, which result from changes in MasTec’s share price as compared with the share price as defined within the purchase agreement, are reflected within other income or expense, as appropriate. An Additional Payment of approximately $29.4 million was made in May 2022, which payment was composed of approximately $18 million in cash and is reflected within financing activities in the consolidated statement of cash flows, and 133,157 shares of MasTec common stock. For the nine month period ended September 30, 2022, a realized gain of approximately $1 million was recognized within other income, net, in connection with this payment. In addition, the HMG purchase agreement provides for a customary net working capital adjustment. In the second quarter of 2022, this working capital adjustment was resolved, resulting in a reduction in purchase consideration for the HMG acquisition of approximately $15 million, which reduction is reflected in the table above. This working capital adjustment had no impact on the number of shares issued in connection with the acquisition.
As of September 30, 2022, the estimated fair value of remaining Additional Payments was approximately $31 million, which amount is included within other current liabilities in the consolidated balance sheet and includes the effect of unrealized fair value gains related to the contingent shares. For the three and nine month periods ended September 30, 2022, unrealized fair value measurement activity related to the contingent shares totaled gains of approximately $1.3 million and $4.5 million, respectively, which amounts are reflected within other income, net. The estimated number of shares that would be paid in connection with the remaining Additional Payment liability is approximately 160,000 shares as
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of September 30, 2022. The amount of Additional Payments due to the sellers as of September 30, 2022 from collections of acquired receivables totaled approximately $3.9 million, of which the amount due in shares totaled approximately $1.6 million, or 17,500 shares. See Note 2 – Earnings Per Share for the effect of the above referenced shares on the Company’s earnings per share calculations.
Included within “All other” acquisition consideration is approximately $455 million of consideration, including estimated earn-out liabilities, for INTREN. Total cash paid for acquisitions, net, includes approximately $78 million of cash acquired. The shares of MasTec common stock transferred in connection with the HMG acquisition in the table above consisted of approximately 2.0 million shares, as determined based on the terms of the purchase agreement, valued at approximately $182 million, based on the market price of the Company’s common stock on the date of closing.
The contingent consideration included in the table above equalsis composed of earn-out liabilities, which equal a portion of the acquired companies’ earnings before interest, taxes, depreciation and amortization (“EBITDA”) above certainin excess of thresholds agreed upon with the sellers, if applicable,applicable. The earn-out arrangements for a period of five years,the 2021 acquisitions generally range from one to five-year terms, as set forth in the respective purchase agreements, which amountsand are valued at approximately $103 million in the aggregate. The earn-out arrangement for the INTREN acquisition included within “All other” acquisitions had a term of less than one year. Earn-outs are generally payable annually. Theannually and are recorded within other current and other long-term liabilities, as appropriate, in the consolidated balance sheets. See Note 4 - Fair Value of Financial Instruments for details pertaining to fair valuesvalue estimates for the Company’s earn-out arrangements. As of September 30, 2022, the range of remaining potential undiscounted earn-out liabilities werefor the 2021 acquisitions was estimated usingto be between $9 million and $120 million; however, there is no maximum payment amount.
Pro forma results. For the three month periods ended September 30, 2022 and 2021, unaudited supplemental pro forma revenue totaled approximately $2.5 billion and $3.0 billion, respectively, and unaudited supplemental pro forma net income approaches such as discounted cash flows totaled approximately $54.0 million and $145.4 million, respectively. For the nine month periods ended September 30, 2022 and 2021, unaudited supplemental pro forma revenue totaled approximately $6.8 billion and $7.9 billion, respectively. For the nine month periods ended September 30, 2022 and 2021, unaudited supplemental pro forma net income totaled approximately $37.3 million and $271.0 million, respectively.
Acquisition-related results. The Company’s consolidated results of operations included acquisition-related revenue of approximately $569.7 million for option pricing modelsthe three month period ended September 30, 2022, including approximately $429.3 million for HMG, and incorporate significant inputs not observabletotaled $1,876.6 million for the nine month period ended September 30, 2022, including approximately $1,457.7 million for HMG and INTREN in the market. Key assumptions in the estimated valuations include the discount rate and probability-weighted EBITDA projections. Significant changes in any of these assumptions could result in a significantly higher or lower potential earn-out liability.


aggregate. For the three and nine month periods ended September 30, 2017, pro forma revenue totaled2022, the Company’s consolidated results of operations included acquisition-related net income of approximately $1,955.8$18.4 million and $5,077.4$37.7 million, respectively, and pro forma net income totaled approximately $64.4based on the Company’s consolidated effective tax rates. The Company’s consolidated results of operations included acquisition-related revenue of approximately $344.4 million and $192.0$702.7 million respectively. Forfor the three and nine month periods ended September 30, 2016, pro forma revenue totaled approximately $1,634.52021, respectively, including $172.8 million and $3,934.6$275.4 million respectively, and pro forma net income totaled approximately $59.0 million and $81.5 million, respectively.
The above indicated unaudited pro forma financial results, which represent the results of operations of the companies acquired as if the acquired companies had been consolidated as of January 1, 2016, are provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined companiesINTREN for the periods indicated, or of the results that may be achieved by the combined companies in the future. The unaudited supplemental pro forma financial results have been prepared by adjusting the historical results of MasTec to include the historical results of the acquired businesses described above, and then adjusted (i) to remove acquisition costs; (ii) to increase amortization expense resulting from the acquired intangible assets; (iii) to increase interest expense as a result of the cash consideration paid; (iv) to reduce interest expense from debt repaid upon acquisition; and (iv) to eliminate the effect of intercompany transactions. Additionally, the unaudited supplemental pro forma financial results do not include adjustments to reflect other cost savings or synergies that may have resulted from these acquisitions. Future results may vary significantly due to future events and transactions, as well as other factors, many of which are beyond MasTec’s control.
respective periods. For the three and nine month periods ended September 30, 2017, acquisition-related results included in2021, the Company’s consolidated results of operations included revenueacquisition-related net losses of approximately $62.2$6.6 million and $96.1$1.3 million, respectively, based on the Company’s consolidated effective tax rates. These acquisition-related results include amortization of acquired intangible assets and acquisition integration costs, and exclude the effects of interest expense associated with consideration paid for the related acquisitions.
Acquisition and integration costs. The Company has incurred certain acquisition and integration costs in connection with certain 2021 and 2022 acquisitions, including acquisition-related costs for the recently completed acquisition of IEA, which costs are included within general and administrative expenses, costs of revenue, excluding depreciation and amortization, and other expense. Acquisition and integration costs include i) the costs of integrating acquired entities, such as: employee termination expenses, including employee compensation relating to the elimination of certain positions that were determined to be redundant, and other integration-type costs, including operating cost redundancies, facility consolidation expenses, lease termination expenses, system migration expenses, training and other integration costs, as well as ii) legal, professional and other fees associated with the consummation of these acquisitions, including fees paid in connection with certain transaction-related financing commitments, including bridge financing related to the IEA acquisition. The Company is currently in the process of integrating these acquisitions and expects to incur additional acquisition and integration expenses. Acquisition and integration costs for the three and nine months period ended September 30, 2022 totaled approximately $33.3 million and $59.4 million, respectively, and net income of approximately $3.2which $9.2 million and $4.7$35.3 million, respectively.respectively, was included within general and administrative expenses, and $21.4 million and $2.7 million were included within costs of revenue, excluding depreciation and amortization, and other expense, respectively, for both periods. As of September 30, 2022, approximately $5.6 million was included within current liabilities within the consolidated balance sheets related to such costs.
Q4 2022 Acquisition
IEA Acquisition.On October 7, 2022 (the “Closing Date”), MasTec completed the acquisition of IEA, a leading clean energy and infrastructure services provider with expertise in renewable energy and heavy civil projects, as well as rail and environmental remediation services. The Company expects to include IEA within its Clean Energy and Infrastructure segment. MasTec acquired IEA for an estimated $610 million in cash and approximately 2.8 million shares of MasTec common stock. The 2.8 million shares include an estimated 128,000 shares to be issued upon the exercise of certain IEA warrants, which warrants remained outstanding following the acquisition. If and when the outstanding warrants are exercised, they will be settled with a combination of such shares of the Company’s common stock and cash. The fair value of the 2.7 million shares issued on the Closing Date, based on the market price of MasTec common stock on such date, was approximately $173 million. The $610 million in cash includes an estimate of $2 million related to the exercise of these warrants. The cash portion of the IEA acquisition was funded with borrowings under a new term loan facility. Additionally, the Company also assumed $300 million of IEA’s 6.625% senior unsecured notes in connection with the acquisition of IEA. See Note 7 - Debt for additional information regarding the new term loan facility, debt assumed and a discussion of the related debt exchange transaction. Due to the limited amount of time since this acquisition, the initial purchase accounting is incomplete; therefore, the Company will complete its initial allocation of purchase price to total net assets acquired for the IEA acquisition in the fourth quarter of 2022. Approximately $11 million of acquisition costs associated with the IEA acquisition has been incurred to date, of which $6 million was incurred in the third quarter of 2022.
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Note 4 – Fair Value of Financial Instruments
The Company’s financial instruments includeare primarily composed of cash and cash equivalents, accounts and notes receivable, cash collateral deposited with insurance carriers, life insurance assets, cost and equity method investments, stock warrants,certain other investments, deferred compensation plan assets and liabilities, accounts payable and other current liabilities, acquisition-related contingent consideration certain intangible assets and liabilities, including off-market contracts,additional contingent payments, mandatorily redeemable non-controlling interests and debt obligations.
Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value guidance establishes a valuation hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs that may be used are: (i) Level 1 - quoted market prices in active markets for identical assets or liabilities; (ii) Level 2 - observable market-based inputs or other observable inputs; and (iii) Level 3 - significant unobservable inputs that cannot be corroborated by observable market data, which are generally determined using valuation models incorporating management estimates of market participant assumptions. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the
Acquisition-Related Contingent Consideration and Other Liabilities
Acquisition-related contingent consideration of inputs specific to the asset or liability.
Fair values of financial instruments are estimated using public market prices, quotes from financial institutions and other available information. Due to their short-term maturity, the carrying amountsliabilities is composed of cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate their fair values. Management believes the carrying values of notes and other receivables, cash collateral deposited with insurance carriers, deferred compensation plan assets and liabilities and outstanding balances on its credit facilities approximate their fair values.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of September 30, 2017 and December 31, 2016, financial instruments required to be measured at fair value on a recurring basis consisted primarily of acquisition-related contingent consideration,earn-outs, which representsrepresent the estimated fair value of future earn-outsamounts payable for acquisitionsbusinesses, including for mandatorily redeemable non-controlling interests (together, “Earn-outs”), that are contingent upon the acquired business achieving certain levels of businesses (“ASC 805 contingent consideration”). ASC 805 contingent consideration is based on management estimates and entity-specific assumptions and is evaluated on an ongoing basis.earnings in the future. As of September 30, 20172022 and December 31, 2016,2021, the estimated fair value of the Company’s ASC 805 contingent considerationEarn-out liabilities totaled $104.9$126.6 million and $45.8$160.2 million, respectively, of which $18.9$13.9 million and $21.8 million, respectively, wasrelated to mandatorily redeemable non-controlling interests as of both periods. Earn-out liabilities included within other current liabilities.liabilities totaled approximately $29.0 million and $38.8 million as of September 30, 2022 and December 31, 2021, respectively. The fair valuevalues of the Company’s ASC 805 contingent consideration isEarn-out liabilities are estimated using income approaches such as discounted cash flows or option pricing models, and incorporatesboth of which incorporate significant inputs not observable in the market.market (Level 3 inputs), including management’s estimates and entity-specific assumptions, and are evaluated on an ongoing basis. Key assumptions include the discount rate, which, as of September 30, 2022, ranged from 12.0% to 16.3%, with a weighted average rate of 12.1% based on the relative fair value of the respective Earn-out liabilities, and probability-weighted EBITDA projections.projections of earnings before interest, taxes, depreciation and amortization (“EBITDA”). Significant changes in any of these assumptions could result in a significantly higher or lower potential earn-out liability.Earn-out liabilities. The ultimate payment amounts for the Company’s Earn-out liabilities will be determined based on the actual results achieved by the acquired businesses. As of September 30, 2017,2022, the range of potential undiscounted earn-outEarn-out liabilities was estimated to be between $15$11 million and $170$165 million; however, there is no maximum payment amount.
ASC 805 contingent considerationEarn-out activity consists primarily of additions from new business combinations, payments of earn-out liabilities,combinations; changes in the expected fair value of future earn-out obligations,payment obligations; and payments. Additions from new business combinations for the three and nine month periods ended September 30, 2022 totaled approximately $2.1 million and $3.8 million, respectively. There were no additions from new business combinations for the three month period ended September 30, 2021, and for earn-out liabilities denominatedthe nine month period ended September 30, 2021, additions totaled $40.1 million. There were no measurement period adjustments for the three month period ended September 30, 2022, and for the nine month period ended September 30, 2022, measurement period adjustments totaled an increase, net, of approximately $1.5 million and related to a net increase in foreign currencies, translation gainsthe Company’s Oil and Gas segment, partially offset by a decrease in its Communications segment. There were no measurement period adjustments in either of the three or losses. Fair value adjustments are recorded within other income or expense, and foreign currency translation activity is recorded within other comprehensive income or loss, as appropriate.nine month periods ended September 30, 2021. For the three and nine month periods ended September 30, 2017, additions from new business combinations2022, fair value adjustments totaled $64.6an increase of approximately $0.1 million and $89.6a net decrease of approximately $1.2 million, respectively. There were no payments of ASC 805 contingent considerationrespectively, and related primarily to the Company’s Communications segment. Fair value adjustments for the three month period ended September 30, 2017, and payments totaled $18.8 million for the nine month period ended September 30, 2017. For the three and nine month periods ended September 30, 2016, payments2021 totaled $5.3net decreases of $4.8 million and $15.8$14.1 million, respectively. Foreign currency translation activity was de minimisrespectively, including a $1.0 million decrease related to mandatorily redeemable non-controlling interests for both the three and nine month periods ended September 30, 2017 and September 30, 2016. The Company recognized reductions2021. These fair value adjustments related to decreases in the expected fair value of future earn-out obligations totaling $3.0Company’s Oil and Gas and Clean Energy and Infrastructure segments, partially offset by increases in the Company’s Communications segment. Earn-out payments totaled $11.0 million and $11.6$37.8 million for certain acquired businesses in the Communications and Electrical Transmission segments for the three and nine month periods ended September 30, 2017, respectively,2022, respectively. For the three and during the first quarter of 2016, the Company recognized a net reduction in the expected fair value of future earn-out obligations of $2.3 million for certain of the Company’s western Canadian oil and gas businesses.


Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Assets and liabilities recognized or disclosed at fair value on a non-recurring basis, for which remeasurement occurs in the event of an impairment or other measurement event, if applicable, include items such as cost and equity method investments, life insurance assets, long-lived assets, goodwill, other intangible assets and liabilities and debt.
As of bothnine month periods ended September 30, 20172021, Earn-out payments totaled $0.8 million and December 31, 2016,$47.0 million, respectively, including approximately $2.1 million related to mandatorily redeemable non-controlling interests for the gross carrying amount of the Company’s 4.875% senior notes due 2023 (the “4.875% Senior Notes”) totaled $400 million. As ofnine month period ended September 30, 2017 and December 31, 2016, the estimated fair value of the Company’s 4.875% Senior Notes, based on quoted market prices in active markets, a Level 1 input, totaled $407.0 million and $388.0 million, respectively.2021.
Cost and Equity Investees.Investments
The Company’s cost and equity investeesinvestments as of September 30, 2017 are primarily composed of:2022 include: (i) the Company’s 33% equity interests in Trans-Pecos Pipeline, LLC (“TPP”) and Comanche Trail Pipeline, LLC (“CTP,”�� and together with TPP, the “Waha JVs”); (ii) the Company’s interests in a pre-acquisition15% equity method investment of Pacer Construction Holdings Corporation and its affiliated operating companies (collectively, “Pacer”); (iii) a $15 million cost investmentinterest in Cross Country Infrastructure Services, Inc. (“CCI,” previously, Cross Country Pipeline Supply, Inc.CCI”); (iii) the Company’s 50% equity interests in each of FM Technology Holdings, LLC, FM USA Holdings, LLC and All Communications Solutions Holdings, LLC, collectively “FM Tech”; (iv) the Company’s interests in itscertain proportionately consolidated non-controlled contractual joint ventures; and (v) certain other equity investments.
Investment Arrangements. From time to time, the Company may participate in selected investment or strategic arrangements, including equity interests in various business entities and participation in contractual joint ventures, some of which may involve the extension of loans or other types of financing arrangements. The Company has determined that certain of its investment arrangements are variable interest entities (“VIEs”). As of September 30, 2022, except for one individually insignificant VIE, the Company does not have the power to direct the primary activities that most significantly impact the economic performance of its VIEs, nor is it the primary beneficiary. Accordingly, except for the previously mentioned VIE, the Company’s VIEs are not consolidated.
Equity investments, other than those accounted for as equity method investments or those that are proportionately consolidated, are measured at fair value if their fair values are readily determinable. Equity investments that do not have readily determinable fair values are measured at cost, adjusted for changes from observable market transactions, if any, less impairment (“adjusted cost basis”). As of September 30, 2022 and December 31, 2021, the aggregate carrying value of the Company’s equity interestsinvestments, including equity investments measured on an adjusted cost basis, totaled approximately $300 million and $267 million, respectively. As of both September 30, 2022 and December 31, 2021, equity
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investments measured on an adjusted cost basis, including the Company’s $15 million investment in Pensare Acquisition Corp. (“Pensare”); and (vi) certain other cost and equity method investments. See Note 15 - Related Party Transactions.
The fair valuesCCI, totaled approximately $20 million. There were no impairments related to these investments in any of the Company’s cost and equity method investments are not readily observable. The Company is not aware of eventsthree or changes in circumstances that would have a significant adverse effect on the carrying values of its cost and/or equity investments as ofnine month periods ended September 30, 20172022 or December 31, 2016. Cumulative undistributed earnings from equity method investees totaled $10.6 million as of September 30, 2017.2021.
The Waha JVs.JVs. The Waha JVs own and operate two pipelines and a header systemcertain pipeline infrastructure that transporttransports natural gas to the Mexican border for export. These pipelines commenced operations in the first half of 2017. There were no equity or other contributions to these joint ventures for the three month period ended September 30, 2017, and for the nine month period ended September 30, 2017, equity and other contributions totaled $73.3 million. As collateral for its equity commitmentsThe Company’s investments in the Waha JVs the Company has issued letters of credit (the “Equity LC Amount”), of which $19 million and $91 million, respectively, were outstandingare accounted for as of September 30, 2017 and December 31, 2016.equity method investments. Equity in earnings related to the Company’s proportionate share of income from the Waha JVs, which is included within the Company’s Other segment, totaled approximately $7.4$5.8 million and $15.1$20.8 million for the three and nine month periods ended September 30, 2017,2022, respectively, and totaled $8.3 million and $24.6 million for the three and nine month periods ended September 30, 2021, respectively. Equity inDistributions of earnings from the Waha JVs, which are included within operating cash flows, totaled $4.4 million and $12.1 million for the three and nine month periodperiods ended September 30, 2016 was de minimis.2022, respectively, and totaled $4.4 million for both the three and nine month periods ended September 30, 2021. Cumulative undistributed earnings from the Waha JVs, which represents cumulative equity in earnings for the Waha JVs less distributions of earnings, totaled $103.6 million as of September 30, 2022. The Company’s net investment in the Waha JVs, which differs from its proportionate share of the net assets of the Waha JVs due primarily to equity method goodwill associated with capitalized investment costs, totaled approximately $257 million and $216 million as of September 30, 2022 and December 31, 2021, respectively.

The Waha JVs are party to separate non-recourse financing facilities, each of which are secured by pledges of the equity interests in the respective entities, as well as a first lien security interest over virtually all of their assets. The Waha JVs are also party to certain interest rate swaps.swaps (the “Waha JV swaps”), which are accounted for as qualifying cash flow hedges. The Company reflects its proportionate share of any unrealized fair market value gains or losses from fluctuations in interest rates associated with these swaps within other comprehensive income or loss, as appropriate. For the three and nine month periodperiods ended September 30, 2017,2022, the Company’s proportionate share of unrecognized unrealized activity on these interest ratethe Waha JV swaps was a gaintotaled gains of approximately $1.3$13.4 million and $42.0 million, respectively, or $0.8$10.1 million and $31.7 million, net of tax, and for the nine month period, this activity was a loss of approximately $2.1 million, or $1.3 million, net of tax.respectively. For the three and nine month periods ended September 30, 2016,2021, the Company’s proportionate share of unrecognized unrealized activity on these interest ratethe Waha JV swaps was a losstotaled gains of approximately $0.6$1.8 million and $21.1$14.1 million, respectively, or $0.3$1.3 million and $12.9$10.7 million, net of tax, respectively.
Other Investments. The Company has equity interests in certain telecommunications entities that are accounted for as equity method investments. As of September 30, 2022 and December 31, 2021, the Company had an aggregate investment of approximately $21 million and $20 million, respectively, in these entities, including $18 million and $17 million for FM Tech, respectively, as of September 30, 2022 and December 31, 2021. For the three month period ended September 30, 2022 the Company made no equity contributions related to its investments in telecommunications entities, and for the nine month period ended September 30, 2022, equity contributions related to these entities totaled approximately $1.1 million. For the three month period ended September 30, 2021, the Company made no equity contributions related to its investments in these entities, and for the nine month period ended September 30, 2021, equity contributions totaled approximately $2.0 million. For the three month period ended September 30, 2022, equity in earnings, net, related to the Company’s proportionate share of income from these telecommunications entities totaled approximately $0.4 million, and for the nine month period ended September 30, 2022 equity in losses, net totaled approximately $0.5 million. For the three month period ended September 30, 2021, equity in earnings, net, from these telecommunications entities totaled approximately $0.6 million, and for the nine month period ended September 30, 2021, equity in losses was de minimis. The difference between the carrying amount of these investments and the Company’s underlying equity in the net assets of the respective entities relates primarily to equity method goodwill associated with assembled workforce for each of these entities.
Certain subsidiaries of MasTec have provided pipeline constructionthese telecommunications entities provide services to MasTec. Expense recognized in connection with services provided by these entities totaled approximately $2.6 million and $5.1 million for the Waha JVs.three and nine month periods ended September 30, 2022, respectively, and totaled $3.2 million and $7.3 million for the three and nine month periods ended September 30, 2021, respectively. As of September 30, 2022 and December 31, 2021, related amounts payable to these entities totaled approximately $0.4 million and $0.3 million, respectively. In addition, the Company had an employee leasing arrangement with one of these entities and has advanced certain amounts to these entities. For both the three and nine month periods ended September 30, 2022, advances to these entities totaled approximately $2.0 million. Employee lease expenses and advances to these entities for the three month period ended September 30, 2021 were de minimis, and for the nine month period ended September 30, 2021, amounts advanced totaled $0.2 million. As of September 30, 2022 and December 31, 2021, employee lease and advances receivable totaled approximately $2.5 million and $0.9 million, respectively.

The Company has 49% equity interests in certain entities included within its Communications and Power Delivery segments that are accounted for as equity method investments, for which its aggregate investment as of September 30, 2022 and December 31, 2021 totaled approximately $3 million and $4 million, respectively. For the three and nine month periods ended September 30, 2017, revenue2022, equity in losses, related to these entities totaled approximately $0.1 million and $0.4 million, respectively. Certain of these entities provide construction services to MasTec. Expense recognized in connection with work performed for the Waha JVs, including intercompany eliminations,construction services provided by these entities totaled $3.6approximately $0.8 million and $255.2$5.8 million respectively, and for the three and nine month periods ended September 30, 2016, totaled $80.9 million and $142.8 million,2022, respectively. As of September 30, 2017 and December 31, 2016,2022, related receivables, including retainage, net of BIEC,amounts payable totaled $52.2 million and $71.2 million, respectively. As of September 30, 2017 and December 31, 2016, the Company’s net investment in the Waha JVs represented an asset totaling approximately $115 million and $6 million, respectively. The Company’s net investment in the Waha JVs differs from its proportionate share of the net assets of the Waha JVs due to capitalized investment costs as well as the effect of intercompany eliminations.
Other investments.$0.1 million. In connection with the 2014 acquisition of Pacer,addition, the Company acquired equity interests in two joint ventures. There are no remaining amounts expected to be advanced in connectionhas line of credit arrangements with these investments, and as of March 2016, all related project work had been completed. In the first quarter of 2016, revenue recognized by Pacer on behalf of these entities, totaled $0.6 million. One of these entities was liquidated in 2016, and the second, which, is in the final stages of liquidation, is being managed by a receiver to assist with the orderly wind-down of its operations. In the first quarter of 2016, $3.6 million of income was recognized related to changes in expected recoveries from these investments. The Company received $12.1 million of proceeds from the receiver in the first quarter of 2017. The remaining investment, for which the Company now has minimal involvement, is reviewed regularly by corporate management for potential changes in expected recovery estimates, and, during the second quarter of 2017, the Company recorded $5.8 million of expense related to changes in expected recovery amounts from this investment. The aggregate net carrying value of this investment, which represents expected recoveries under the receivership arrangement, totaled $14.8 million and $31.4 million as of September 30, 20172022 and December 31, 2016,2021, provide for up to $4.5 million and $8.5 million, respectively, of borrowing availability, of which $0.5 million and $0.4 million, respectively, was drawn, which amounts are included within other current assets.

assets in the consolidated balance sheets.
During the first quarter of 2021, MasTec committed to fund up to $2.5 million for a 75% equity interest in Confluence Networks, LLC (“Confluence”), an undersea fiber-optic communications systems developer and VIE. As of September 30, 2022, a total of $1.9 million had been funded, of which $0.2 million was funded during the nine month period ended September 30, 2022. For the three and nine month periods ended September 30, 2021, $0.3 million and $1.3 million, respectively, of funding was provided. Equity in losses related to the Company’s proportionate share of this investment was de minimis for the three month period ended September 30, 2022, and totaled $0.3 million for the nine month period ended September 30, 2022. For the three and nine month periods ended September 30, 2021, equity in losses totaled $0.2 million and $0.6 million, respectively. As of September 30, 2022, MasTec had less than a majority of the members on the board of Confluence and determined that it did not have a controlling financial interest, and therefore does not have the power to direct the primary activities that most significantly impact its economic
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performance, nor is it the primary beneficiary. The Company has the ability to exert significant influence over Confluence, and as a result, accounts for its investment in Confluence as an equity method investment as of September 30, 2022.
The Company has certain equity investments in American Virtual Cloud Technologies, Inc. (“AVCT”), a publicly-traded company in which the Company currently has no active involvement. The Company’s investments in AVCT are included within other current assets in its consolidated financial statements, and include shares of AVCT common stock, which are equity securities, and warrants for the purchase of AVCT common stock, which are derivative financial instruments. Previously, the Company’s investment in AVCT included debentures that were convertible into shares of AVCT common stock, which were available-for-sale securities. In the third quarter of 2017,2021, the Company paid approximately $2.0 million for approximately 4% of the common stock of Pensare and warrants to purchase 2.0 millionCompany’s investment in AVCT convertible debentures was automatically converted into shares of PensareAVCT common stock, which is a special purpose acquisition company focusing on transactions in the telecommunications industry. The shares of common stock purchased by MasTec are not transferable or salable until one year after Pensare successfully completes a business combination transaction, with limited exceptions, as specified in the agreement. The warrants purchased by MasTec are exercisable at a purchase price of $11.50 per share after Pensare successfully completes a business combination. Both the warrants and shares expire and/or are effectively forfeitable if Pensare does not successfully complete a business combination by February 1, 2019. The warrants, which are derivative financial instruments, and the shares, which are a cost method investment, are included within other long-term assets in the Company’s consolidated financial statements asstock. As of September 30, 2017. The2022 and December 31, 2021, the Company’s ownership interest in AVCT’s common stock totaled approximately 1% and 3%, respectively, and its aggregate ownership interest, assuming the exercise of all legally exercisable warrants into AVCT common stock, totaled approximately 1% and 6%, respectively.
As of September 30, 2022 and December 31, 2021, the aggregate fair value of the warrants,Company’s investments in AVCT approximated $1 million and $8 million, respectively, with an aggregate cost approximating $6 million as determinedof both periods. Unrealized fair value measurement activity related to the AVCT securities, which is based on the market price of its securities, a Level 3 inputs, approximated their cost basis as1 input, and is recorded within other income or expense, net, totaled losses of approximately $0.1 million and $7.2 million, respectively, for the three and nine month periods ended September 30, 2017. The2022. For both the three and nine month periods ended September 30, 2021, unrealized fair value measurement losses, net, totaled approximately $7.6 million, primarily related to the AVCT shares. In the third quarter of 2021, in conjunction with the automatic conversion of the AVCT convertible debentures into shares is not readily determinable dueof AVCT common stock, the Company reclassified a gain of $0.7 million from other comprehensive income to other income, net. For the three and nine month periods ended September 30, 2021, unrealized fair value measurement activity related to the natureAVCT convertible debentures, which were recognized within other comprehensive income, totaled losses of approximately $2.4 million and $1.1 million, respectively, or $1.8 million and $0.8 million, net of tax, respectively.
Senior Notes
As of both September 30, 2022 and December 31, 2021, the gross carrying amount of the restrictions. José R. Mas, MasTec’s Chief Executive Officer, is a director of Pensare.

Company’s 4.50% senior notes due August 15, 2028 (the “4.50% Senior Notes”) totaled $600 million, and their estimated fair value, based on an exit price approach using Level 1 inputs, totaled $522.0 million and $619.5 million, respectively.


Note 5 -– Accounts Receivable, Net of Allowance, and Contract Assets and Liabilities
The following table provides details of accounts receivable, net of allowance, and contract assets (together, “accounts receivable, net”) as of the dates indicated (in millions):
September 30,
2022		December 31,
2021
Contract billings$1,065.6 $1,027.1 
Less allowance(8.1)(7.8)
Accounts receivable, net of allowance$1,057.5 $1,019.3 
Retainage277.1 296.8 
Unbilled receivables1,340.3 931.1 
Contract assets$1,617.4 $1,227.9 
 September 30,
2017		 December 31,
2016
Contract billings$626.7
 $564.2
Retainage287.6
 268.6
Costs and earnings in excess of billings629.5
 331.6
Accounts receivable, gross$1,543.8
 $1,164.4
Less allowance for doubtful accounts(9.0) (8.4)
Accounts receivable, net$1,534.8
 $1,156.0

Contract billings represent the amount of performance obligations that have been billed but not yet collected, whereas contract assets consist of unbilled receivables and retainage. Unbilled receivables represent the estimated value of unbilled work for projects with performance obligations recognized over time. Retainage whichrepresents a portion of the contract amount that has been billed, but is not due until completion of performance and acceptance by customers, is expectedfor which the contract allows the customer to be collected within one year. Receivables expected to be collected beyond one year are recorded within other long-term assets. Provisions for doubtful accounts for eachretain a portion of the threebilled amount until final contract settlement (generally, from 5% to 10% of contract billings). The increase in unbilled receivables as of September 30, 2022 was driven primarily by ordinary course project activity associated with higher levels of revenue in our Power Delivery and Communications segments. For the nine month periodsperiod ended September 30, 2017 and 20162022, provisions for credit losses totaled $0.4$0.7 million, and for the nine month period ended September 30, 2021, provisions for credit losses totaled a recovery of $11.0 million resulting from successful collection of previously reserved amounts. Impairment losses on contract assets were not material in either period.
Contract liabilities consist primarily of deferred revenue. Under certain contracts, the Company may be entitled to invoice the customer and receive payments in advance of performing the related contract work. In those instances, the Company recognizes a liability for advance billings in excess of revenue recognized, which is referred to as deferred revenue. Contract liabilities also include the amount of any accrued project losses. Total contract liabilities, including accrued project losses, totaled approximately $249.7 million and $314.0 million as of September 30, 2022 and December 31, 2021, respectively, of which deferred revenue comprised approximately $240.8 million and $296.1 million, respectively. The decrease in contract liabilities as of September 30, 2022 was driven primarily by timing of billings for projects in our Clean Energy and Infrastructure, Power Delivery and Communications segments. For the three and nine month periods ended September 30, 2017 and 2016, totaled $1.12022, the Company recognized revenue of approximately $22.2 million and $2.0$268.0 million, respectively.

respectively, related to amounts that were included in deferred revenue as of December 31, 2021, resulting primarily from the advancement of physical progress on the related projects during the respective periods.
The Company is party to non-recourse financing arrangements in the ordinary course of business, under which certain receivables are purchased bysettled with the customer’s bank in return for a nominal fee. TheseDiscount charges related to these arrangements, under which amounts can vary based on levels of activity and changes in customer payment terms, improve the collection cycle time of the related receivables. The discount charge, which isare included within interest expense, net, totaled approximately $2.1$2.4 million and $0.8 million respectively, for the three month periods ended September 30, 20172022 and 2016,2021, respectively, and
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totaled approximately $4.7$4.9 million and $1.7$2.3 million, respectively, for the nine month periods ended September 30, 20172022 and 2016.2021.
Note 6 -– Property and Equipment, Net
The following table provides details of property and equipment, net, including property and equipment held under capitalfinance leases as of the dates indicated (in millions):
September 30,
2022		December 31,
2021
Land$55.8 $40.0 
Buildings and leasehold improvements86.1 94.1 
Machinery and equipment2,677.9 2,411.0 
Office furniture and equipment281.4 262.6 
Construction in progress79.9 32.7 
Total property and equipment$3,181.1 $2,840.4 
Less accumulated depreciation and amortization(1,593.0)(1,404.3)
Property and equipment, net$1,588.1 $1,436.1 
 September 30,
2017		 December 31,
2016
Land$4.6
 $4.6
Buildings and leasehold improvements25.7
 24.2
Machinery and equipment1,237.3
 997.8
Office furniture and equipment149.6
 146.1
Construction in progress8.9
 9.5
Total property and equipment$1,426.1
 $1,182.2
Less accumulated depreciation and amortization(734.7) (633.1)
Property and equipment, net$691.4
 $549.1
The gross amount of capitalized internal-use software, which is included within office furniture and equipment, totaled $108.7$183.6 million and $107.8$176.4 million as of September 30, 20172022 and December 31, 2016,2021, respectively. Capitalized internal-use software, net of accumulated amortization, totaled $24.8$40.4 million and $30.9$43.9 million as of September 30, 20172022 and December 31, 2016,2021, respectively. Depreciation and amortization expense associated with property and equipment for the three month periods ended September 30, 2017 and 2016 totaled $44.1 million and $37.4 million, respectively, and totaled $123.4 million and $106.5 million for the nine month periods ended September 30, 2017 and 2016, respectively.



Note 7 -– Debt
The following table provides details of the carrying values of debt as of the dates indicated (in millions):
Description Maturity Date September 30,
2017		 December 31,
2016		DescriptionMaturity DateSeptember 30,
2022		December 31,
2021
Senior secured credit facility: February 22, 2022    
Senior credit facility:Senior credit facility:November 1, 2026
Revolving loansRevolving loans $300.6
 $279.9
Revolving loans$920.5 $772.3 
Term loanTerm loan 400.0
 237.5
Term loan350.0 350.0 
4.875% Senior Notes March 15, 2023 400.0
 400.0
Capital lease obligations, weighted average interest rate of 3.5% In installments through September 1, 2022 179.9
 98.6
Notes payable and other debt obligations Varies 12.1
 19.8
Total long-term debt obligations $1,292.6
 $1,035.8
4.50% Senior Notes4.50% Senior NotesAugust 15, 2028600.0 600.0 
Finance lease and other obligationsFinance lease and other obligations370.3 310.3 
Total debt obligationsTotal debt obligations$2,240.8 $2,032.6 
Less unamortized deferred financing costsLess unamortized deferred financing costs (13.8) (9.8)Less unamortized deferred financing costs(16.5)(18.5)
Total debt, net of deferred financing costsTotal debt, net of deferred financing costs $1,278.8
 $1,026.0
Total debt, net of deferred financing costs$2,224.3 $2,014.1 
Current portion of long-term debtCurrent portion of long-term debt 86.5
 64.6
Current portion of long-term debt156.8 137.9 
Long-term debtLong-term debt $1,192.3
 $961.4
Long-term debt$2,067.5 $1,876.2 
Senior Secured Credit Facility
The Company has a senior securedunsecured credit facility (the “Credit Facility”), which was amended and restated on February 22, 2017.September 1, 2022. The Company refers to its amended and restated credit facility as the “2017 Credit Facility,” and to its previous credit facility as the “2016 Credit Facility.” The 2017 Credit Facilityamendment, among other changes, increased the Company’s aggregate borrowing commitments under the Credit Facility from approximately $1.2$2.0 billion to $1.5$2.25 billion, which amount is composed of $1.1$1.9 billion of revolving commitments, an increase of $250 million from the previous Credit Facility, and a term loan in the aggregatewith an original principal amount of $400 million.$350 million (the “Term Loan”). The amended and restated credit facilityamendment also extendedreleased the Credit Facility’s maturity date to February 22, 2022. As of September 30, 2017, term loans in the aggregate principal amount of $400 million were drawnguarantees that existed under the 2017 Credit Facility. The term loan is subject to amortization in quarterly principal installments that commence in December 2017, which as of September 30, 2017, amounted to $3.1 million, which amount is subject to adjustment for additional term loans and, if applicable, for certain prepayments. As of December 31, 2016, term loans in the aggregate principal amount of $238 million were outstanding.
The 2017previous Credit Facility also increasedand removed the amountrequirement that certain subsidiaries of the Company can borrow either in Canadian dollars and/or Mexican pesos up to an aggregate equivalent amount of $300 million.guarantee the obligations thereunder. The maximum amount available for letters of credit under the 2017 Credit Facility is $650 million, of which up to $200 million can be denominated in either Canadian dollars and/or Mexican pesos. The Credit Facility also provides for swing line loans of up to $75 million, and, subject to certain conditions, the Company has the option to increase revolving commitments and/or establish additional term loan tranches up to an aggregate amount of $250 million. Subject to theother terms and conditions described inof the Credit Facility these additional term loan tranches may rank equal or junior in respectremain substantially the same. Additionally, the amendment eliminated the use of right of payment and/or collateralLondon Interbank Offered Rate (“LIBOR”) as a basis to determine certain interest rates and transitioned to the Credit Facility, and may have terms and pricing that differ from the 2017 Credit Facility. BorrowingsSecured Overnight Financing Rate (“SOFR”) for such purposes. Obligations under the Credit Facility are not secured. Borrowings under the amended Credit Facility will be used for working capital requirements, capital expenditures and other corporate purposes, including investments inacquisitions, equity or other investees, potential acquisitionsinvestments or other strategic arrangements, andand/or the repurchase or prepayment of indebtedness.indebtedness, among other corporate borrowing requirements.
Outstanding revolving loans and the term loanTerm Loan under the amended Credit Facility bear interest, at the Company’s option, at a rate equal to either (a) a Eurocurrency Rate,Term SOFR, as defined in the 2017amended Credit Facility, plus a margin of 1.25%1.125% to 2.00% (under the 2016 Credit Facility, the margin was from 1.00% to 2.00%)1.625%, or (b) a Base Rate, as defined in the 2017amended Credit Facility, plus a margin of 0.25%0.125% to 1.00% (under the 2016 Credit Facility, the margin was from 0.00% to 1.00%)0.625%. The Base Rate equals the highest of (i) the Federal Funds Rate, as defined in the amended Credit Facility, plus 0.50%, (ii) Bank of America’s prime rate, and (iii) the Eurocurrency RateTerm SOFR plus 1.00%. Financial standby letters
The Term Loan is subject to amortization in quarterly principal installments of credit and commercial letters of credit issued underapproximately $2.2 million commencing in March 2023, which quarterly installments increase to approximately $4.4 million in March 2025 until maturity. Quarterly principal installments on the 2017 Credit FacilityTerm Loan are subject to a letter of credit fee of 1.25% to 2.00% (under the 2016 Credit Facility, the letter of credit fee was from 1.00% to 2.00%), and performance standby letters of credit are subject to a letter of credit fee of 0.50% to 1.00% under the Credit Facility. The Company must also pay a commitment fee to the lenders of 0.20% to 0.40% on any unused availability under the Credit Facility. In each of the foregoing cases, theadjustment, if applicable, margin or fee is based on the Company’s Consolidated Leverage Ratio, as defined in the Credit Facility, as of the then most recent fiscal quarter.for certain prepayments.
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As of September 30, 20172022 and December 31, 2016,2021, outstanding revolving loans, which included $171included $0.5 million and $119$32.3 million, respectively, of borrowings denominated in foreign currencies, accrued interest at weighted average rates of approximately 2.96%4.30% and 3.71%2.32% per annum, respectively. The term loanTerm Loan accrued interest at a raterates of 2.86%4.51% and 2.77%1.35% as of September 30, 20172022 and December 31, 2016,2021, respectively. Letters of credit of approximately $189.1$145.0 million and $314.3$166.3 million were issued as of September 30, 20172022 and December 31, 2016,2021, respectively. As of September 30, 20172022 and December 31, 2016, letters2021, letter of credit fees accrued at 0.750%0.5625% and 1.00%0.4375%, respectively, per annum respectively, for performance standby letters of credit, and accrued at 1.625%1.375% and 2.00%1.250%, respectively, per annum respectively, for financial standby letters of credit. Outstanding letters of credit mature at various dates and most have automatic renewal provisions, subject to prior notice of cancellation. As of September 30, 20172022 and December 31, 2016,2021, availability for revolving loans totaled $610.3$834.5 million and $405.9$711.5 million, respectively, or up to $460.9$505.0 million and $335.7$483.7 million, respectively, for new letters of credit. Revolving loan borrowing capacity included $129.4$149.5 million and $80.9$267.7 million of availability in either Canadian dollars or Mexican pesos as of September 30, 20172022 and December 31, 2016,2021, respectively. The unused facility fee as of September 30, 20172022 and December 31, 20162021 accrued at a rate of 0.30%0.200% and 0.40%0.175%, respectively.respectively, per annum.

Other Credit Facilities

The Company has other credit facilities that support: (i) the working capital requirements of its foreign operations and (ii) certain letter of credit issuances. There were no outstanding borrowings under the Company’s other credit facilities as of September 30, 2022 or December 31, 2021. Additionally, the Company has a separate credit facility, under which it may issue performance standby letters of credit.  As of September 30, 2022 and December 31, 2021, letters of credit issued under this facility totaled $17.4 million and $22.2 million, respectively, which accrued fees at 0.75% and 0.40% per annum, respectively. The Company’s other credit facilities are subject to customary provisions and covenants.
4.50% Senior Notes
The Company has $600.0 million aggregate principal amount of 4.50% senior unsecured notes due August 15, 2028 (the “4.50% Senior Notes”). Pursuant to the terms of the indenture governing the Company’s 4.50% Senior Notes, the existing guarantees on the 4.50% Senior Notes were released substantially concurrent with the September 1, 2022 amendment to the Credit Facility, iswhich, as discussed above, released the guarantors under the previous Credit Facility. Prior to the amendment, the 4.50% Senior Notes were fully and unconditionally guaranteed on a senior unsecured, joint and several basis by certain subsidiariesof the Company’s wholly-owned domestic restricted subsidiaries. Additionally, the indenture that governs the Company’s 4.50% Senior Notes contains a provision whereby certain restrictions that generally limit the ability of the Company and certain of its subsidiaries to (i) pay dividends, (ii) acquire shares of capital stock and (iii) make certain investments, are permanently terminated upon the Company’s 4.50% Senior Notes receiving “investment grade” ratings by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Group. In the first quarter of 2022, the Company’s 4.50% Senior Notes received such investment grade ratings, and, as a result, the aforementioned restrictions were permanently terminated. The other terms and conditions of the 4.50% Senior Notes remain unchanged.
Additional Information
MasTec was in compliance with the provisions and covenants of its outstanding debt instruments as of both September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, accrued interest payable, which is recorded within other accrued expenses in the consolidated balance sheets, totaled $7.0 million and $11.7 million, respectively. For additional information pertaining to the Company’s debt instruments, see Note 7 - Debt in the Company’s 2021 Form 10-K.
IEA Acquisition Financing and Acquired Debt
New Term Loan Facility. The IEA acquisition, which was completed in October 2022, was funded with the New Term Loan Facility (as defined below). On September 1, 2022, the Company entered into a new unsecured delayed draw term loan agreement (the “Guarantor Subsidiaries”“New Term Loan Facility”), which provided for $700.0 million in delayed draw term loan commitments (the “Term Loan Commitments”), composed of $400.0 million in principal amount of three-year commitments (the “Three-Year Tranche”) and $300.0 million in principal amount of five-year commitments (the “Five-Year Tranche”). The Term Loan Commitments were drawn on October 7, 2022, the Closing Date of the IEA acquisition. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets, Net for additional information related to the IEA acquisition. The Company incurred approximately $2.0 million of debt issuance costs in connection with the New Term Loan Facility as of November 1, 2022, which costs will be amortized over the respective terms of the Three- and Five-Year Tranches.
The Three-Year Tranche will mature on October 7, 2025, the three-year anniversary of the Closing Date, and the Five-Year Tranche will mature on October 7, 2027, the five-year anniversary of the Closing Date. Loans under the Three-Year Tranche are not subject to amortization. Loans under the Five-Year Tranche will be amortized in quarterly principal installments, subject to the application of certain prepayments in accordance with the terms of the New Term Loan Facility. Quarterly installments under the Five-Year Tranche of $3.75 million will commence on March 31, 2024 and will increase to $7.5 million on March 31, 2026, until maturity.
Outstanding loans under the Three-Year Tranche bear interest, at the Company’s option, at a rate equal to either (a) Term Secured Overnight Financing Rate (“SOFR”), as defined in the New Term Loan Facility, plus a margin of 1.125% to 1.500%, or (b) a Base Rate, as defined below, plus a margin of 0.125% to 0.500%. Outstanding loans under the Five-Year Tranche bear interest, at the Company’s 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%. The Base Rate equals the highest of (i) the Federal Funds Rate, as defined in the New Term Loan Facility, plus 0.50%, (ii) Bank of America’s prime rate and (iii) Term SOFR plus 1.00%. In each of the foregoing cases, the applicable margin is based on the Company’s Consolidated Leverage Ratio and Debt Rating, each as defined in the New Term Loan Facility, as of the then most recent fiscal quarter.
The obligations under the CreditNew Term Loan Facility are not guaranteed and are not secured by substantially allany assets of the Company’s and the Guarantor Subsidiaries’ respective assets, subject to certain exceptions.Company or any of its subsidiaries. The CreditNew Term Loan Facility requires that the Company to maintain a Maximum Consolidated Leverage Ratio, as defined in the CreditNew Term Loan Facility, of not more than 3.50 as of the end of any fiscal quarter (subject to the Acquisition Adjustment described below). The CreditNew Term Loan Facility also requires that the Company to maintain a Minimum Consolidated Interest Coverage Ratio, as defined in the Amended Credit Facility, of at least 3.00. The CreditNew Term Loan Facility provides that, for purposes of calculating the Consolidated Leverage Ratio, certain cash charges may be added back tofunded indebtedness excludes undrawn
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standby performance letters of credit included in the calculation of Consolidated EBITDA, asFunded Indebtedness (as defined in the Credit Facility, and funded indebtedness excludes undrawn standby performance letters of credit.New Term Loan Facility). Additionally, notwithstanding the terms discussed above, subject to certain conditions, if a permitted acquisition or series of permitted acquisitions having consideration exceeding $50$100 million occurs during a fiscal quarter, the Consolidated Leverage Ratio may be temporarily increased to up to 3.754.00 during such fiscal quarter and the subsequent twofour fiscal quarters.quarters (the “Acquisition Adjustment”). Such right may be exercised no more than two times during the term of the CreditNew Term Loan Facility. Subject to customary exceptions, the CreditNew Term Loan Facility limits the borrowers’ and the Guarantor Subsidiaries’ ability to engage in certain activities, including but not limited to acquisitions, mergers and consolidations, debt incurrence, investments, capital expenditures, asset sales, debt prepayments, lien incurrence and the making of distributions on or repurchases of capital stock. However, distributions payable solely in capital stock are permitted. The CreditNew Term Loan Facility provides for customary events of default and carries cross-default provisions with the Company’s other significant debt instruments, including the Company’s indemnity agreement with its surety provider, as well as customary remedies, including the acceleration of repayment of outstanding amountsamounts.
Bridge Term Loan Facility. The Company incurred approximately $2.7 million of fees and expenses in the third quarter of 2022 in connection with commitments for a bridge term loan facility, which commitments were subsequently terminated in connection with the New Term Loan Facility, which costs are reflected as acquisition and integration costs within other expense.
IEA 6.625% Senior Notes. Upon consummation of the October 2022 acquisition of IEA, the Company assumed $300 million of 6.625% senior unsecured notes that mature on August 15, 2029 (the “6.625% IEA Senior Notes”) and that were issued by IEA Energy Services LLC (the “IEA Issuer”), a wholly-owned subsidiary of IEA, in a private placement pursuant to an indenture, dated as of August 17, 2021 (the “IEA Senior Notes Indenture”), by and among the IEA Issuer, the IEA Guarantors (as defined therein) and Wilmington Trust, National Association, as trustee. Prior to the acquisition of IEA by MasTec, the 6.625% IEA Senior Notes were guaranteed by the IEA Guarantors. Effective October 7, 2022, concurrent with the acquisition of IEA and the repayment in full and termination of IEA’s credit facility, which resulted in the release of such guarantors under the prior credit facility, the IEA Guarantors of the 6.625% IEA Senior Notes were automatically and unconditionally released and discharged from their obligations under the IEA Senior Notes Indenture. The 6.625% IEA Senior Notes will be structurally subordinated to all indebtedness and other remedies with respectliabilities, including trade payables, of the Company’s subsidiaries and will be effectively subordinated to any secured indebtedness of the IEA Issuer, to the extent of the value of the collateral securing such indebtedness. Interest on the Credit Facility obligations.6.625% IEA Senior Notes is payable semiannually in arrears on February 15 and August 15 of each year. On October 26, 2022, approximately $74.9 million in principal amount of the 6.625% IEA Senior Notes were exchanged for the same principal amount of MasTec’s 6.625% senior unsecured notes that mature on August 15, 2029 (the “6.625% MasTec Senior Notes”) in a private exchange offer and consent solicitation to certain holders of 6.625% IEA Senior Notes. See discussion of exchange offer and 6.625% MasTec Senior Notes below.
Other Credit Facilities. The Company has other credit facilities that supportAt any time prior to August 15, 2024, the working capital requirementsIEA Issuer may redeem some or all of its foreign operations. Borrowings under these credit facilities, which have varying dates of maturity and are generally renewed on an annual basis, are denominated in Canadian dollars. As September 30, 2017 and December 31, 2016, maximum borrowing capacity totaled Canadian $20.0 million and $40.0 million, respectively, or approximately $16.0 million and $29.8 million, respectively. As of September 30, 2017 and December 31, 2016, outstanding borrowings totaled approximately $5.4 million and $13.4 million, respectively, and accrued interestthe 6.625% IEA Senior Notes at a weighted average rate of approximately 4.0% and 3.6%, respectively. Outstanding borrowings that are not renewed are repaid with borrowings under the Company’s senior secured credit facility. Accordingly, the carrying amountsprice equal to 100% of the Company’s borrowings under its other credit facilities, which are included withinprincipal amount of the 6.625% IEA Senior Notes, plus a “make-whole premium,” together with accrued and unpaid interest, if any, to, but not including, the date of redemption. In addition, at any time prior to August 15, 2024, the IEA Issuer may redeem up to 40% of the original principal amount of the 6.625% IEA Senior Notes with the proceeds of certain equity offerings at a redemption price of 106.625% of the principal amount of the 6.625% IEA Senior Notes, together with accrued and unpaid interest, if any, to, but not including, the date of redemption, subject to the right of holders of notes payable and other debt obligations inon the table above, are classified within long-term debt inrelevant record date to receive interest due on the Company’s consolidated balance sheets. The Company’s other credit facilitiesrelevant interest payment date. On or after August 15, 2024, the 6.625% IEA Senior Notes are subject to customary provisionsredemption at any time and covenants.
Debt Guarantees and Covenantsfrom time to time at the option of the IEA Issuer, in whole or in part, at specified redemption prices, expressed as percentages of principal amount, of 103.3% declining over a two-year period to 100.0%, subject to the right of holders of notes on the relevant record date to receive interest due on the relevant interest payment date.
The 4.875%terms of the 6.625% IEA Senior Notes Indenture, among other things, limit the IEA Issuer’s ability to incur additional indebtedness; pay dividends or make other restricted payments; make loans and investments; incur liens; sell assets; enter into affiliate transactions; enter into certain sale and leaseback transactions; enter into agreements restricting the IEA Issuer’s subsidiaries’ ability to pay dividends; and merge, consolidate or amalgamate or sell all or substantially all of its property, subject to certain thresholds and exceptions. Certain of such limitations are suspended for so long as the 6.625% IEA Senior Notes are rated “investment grade” by at least two nationally recognized statistical rating agencies, subject to certain conditions. In October 2022, following the acquisition of IEA by MasTec, the 6.625% IEA Senior Notes were rated as investment grade by at least two nationally recognized ratings agencies and, as a result, the aforementioned covenants were suspended.
The 6.625% IEA Senior Notes Indenture provides for customary events of default which include, subject in certain cases to customary grace and cure periods, among others, nonpayment of principal or interest; breach of other covenants or agreements in the 6.625% IEA Senior Notes Indenture; failure to pay certain other indebtedness; failure to pay certain final judgments; failure of certain guarantees to be enforceable; and certain events of bankruptcy or insolvency.
Exchange Offer and 6.625% MasTec Senior Notes. In August 2022, in connection with the Company’s previously announced agreement to acquire IEA, MasTec commenced a private exchange offer and consent solicitation to certain holders of the 6.625% IEA Senior Notes for up to an aggregate principal amount of $300.0 million of 6.625% MasTec Senior Notes, conditioned upon completion of the IEA acquisition. On October 26, 2022, approximately $74.9 million in principal amount of 6.625% IEA Senior Notes were exchanged for the same principal amount of 6.625% MasTec Senior Notes. The 6.625% MasTec Senior Notes are senior unsecured unsubordinatednotes that mature on August 15, 2029. Interest on the 6.625% MasTec Senior Notes is payable semiannually on February 15 and August 15 of each year, commencing on February 15, 2023. The 6.625% MasTec Senior Notes will accrue interest from and including August 15, 2022, such that a tendering holder will receive the same interest payment it would have received had its 6.625% IEA Senior Notes not been tendered in the exchange offer. In connection with the consent solicitation, the Company paid a consent payment to holders of the 6.625% IEA Senior Notes that consented to the changes to the IEA Senior Notes Indenture proposed in such consent solicitation in the amount of $2.50 in cash for each $1,000 principal amount tendered.
The 6.625% MasTec Senior Notes are general senior unsecured obligations of the Company, and rank equal in right of payment with all of the Company’s existing and future unsubordinated debt,senior unsecured indebtedness and rank senior in right of payment to existing and future subordinated debt and are fully and unconditionally guaranteed on an unsecured, unsubordinated, joint and several basis by certainany of the Company’s existingfuture subordinated indebtedness. The 6.625% MasTec Senior Notes are effectively subordinated to all secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness and futureare structurally subordinated to all obligations of the subsidiaries of the Company, including trade
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payables and the 6.625% IEA Senior Notes.
On or after August 15, 2024, the Company has the option, at any time and from time to time, to redeem all or a portion of the 6.625% MasTec Senior Notes at the redemption prices specified in the indenture that governs the 6.625% MasTec Senior Notes (the “6.625% MasTec Senior Notes Indenture”), plus accrued and unpaid interest, if any, to, but not including, the redemption date, subject to the right of holders of notes on the relevant record date to receive interest due on the relevant interest payment date. In addition, at any time prior to August 15, 2024, the Company may redeem all or a part of the 6.625% MasTec Senior Notes at a redemption price equal to 100%-owned direct of the principal amount of the 6.625% MasTec Senior Notes redeemed, plus accrued and indirect domesticunpaid interest, if any, to, but not including, the redemption date, subject to the right of holders of notes on the relevant record date to receive interest due on the relevant interest payment date, plus a “make-whole” premium. Further, prior to August 15, 2024, the Company may redeem up to 40% of the aggregate principal amount of the 6.625% MasTec Senior Notes using the net cash proceeds of certain equity offerings, at a redemption price equal to 106.625% of the principal amount of the 6.625% MasTec Senior Notes redeemed, plus accrued and unpaid interest, if any, to, but not including the date of redemption, subject to the right of holders of notes on the relevant record date to receive interest due on the relevant interest payment date, subject to certain conditions.
If the Company undergoes a Change of Control, as defined in the 6.625% MasTec Senior Notes Indenture, the Company must make an offer to repurchase all of the 6.625% MasTec Senior Notes then outstanding at a price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.
The 6.625% MasTec Senior Notes Indenture, among other things, generally limits the ability of the Company and certain of its subsidiaries, that are each guarantorssubject to certain exceptions, to (i) create certain liens and (ii) effect mergers, consolidate or transfer all or substantially all of the Company’s Credit Facilityassets, subject to certain thresholds and exceptions. The 6.625% MasTec Senior Notes Indenture provides for customary events of default, which include, subject, in certain cases, to customary grace and cure periods, among others, nonpayment of principal or interest; breach of other covenants or agreements in the 6.625% MasTec Senior Notes Indenture; failure to pay certain other indebtedness; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and is continuing, the trustee or holders of at least 30% of the 6.625% MasTec Senior Notes then outstanding indebtedness. See Note 16 - Supplemental Guarantor Condensed Unaudited Consolidating Financial Information.
MasTec was in compliance withmay declare the provisionsprincipal of, premium, if any, and covenants of its outstanding debt instruments as of September 30, 2017 and December 31, 2016.
Additional Information
As of September 30, 2017 and December 31, 2016, accrued interest payable, which is recorded within other accruedon all of the 6.625% MasTec Senior Notes immediately due and payable. The Company incurred approximately $2 million of fees and expenses in the consolidated balance sheets, totaled $4.1 million and $8.5 million, respectively. Additionally, in connection with the 2017 Credit Facility amendment, the Company paid approximately $6 million in financing costs for the nine month period ended September 30, 2017. For additional information pertaining to the Company’s debt instruments, including its 4.875% Senior Notes, see Note 7 - Debtexchange, which amount will be reflected as expense, primarily in the Company’s 2016 Form 10-K.fourth quarter of 2022.
Note 8 -– Lease Obligations
Capital Leases
MasTec enters into agreements that provide lease financing for machinery and equipment. The gross amount of assets held under capital leases as of September 30, 2017 and December 31, 2016, which are included within property and equipment, net, totaled $404.1 million and $294.9 million, respectively. Assets held under capital leases, net of accumulated depreciation, totaled $269.6 million and $177.5 million as of September 30, 2017 and December 31, 2016, respectively.
Operating Leases
In the ordinary course of business, the Company enters into non-cancelable operating leasesagreements that provide financing for certainmachinery and equipment and for other of its facility, vehicle and equipment needs, including related party leases. See Note 15 - Related Party Transactions. RentAs of September 30, 2022, the Company’s leases have remaining lease terms of up to ten years. Lease agreements may contain renewal clauses, which, if elected, generally extend the term of the lease for one to five years for both equipment and related expensefacility leases. Certain lease agreements may also contain options to purchase the leased property and/or options to terminate the lease. In addition, lease agreements may include periodic adjustments to payment amounts for operatinginflation or other variables, or may require payments for taxes, insurance, maintenance or other expenses, which are generally referred to as non-lease components. The Company’s lease agreements do not contain significant residual value guarantees or material restrictive covenants.
Finance Leases
The gross amount of assets held under finance leases that have non-cancelable terms in excessas of one yearSeptember 30, 2022 and December 31, 2021 totaled approximately $25.4$624.6 million and $25.9$653.5 million, respectively. Assets held under finance leases, net of accumulated depreciation, totaled $458.5 million and $468.5 million as of September 30, 2022 and December 31, 2021, respectively. Depreciation expense associated with finance leases totaled $22.8 million and $21.1 million for the three month periods ended September 30, 20172022 and 2016,2021, respectively, and totaled $77.6$63.2 million and $74.8$58.8 million for the nine month periods ended September 30, 20172022 and 2016,2021, respectively.
Operating Leases
Operating lease additions for the three month periods ended September 30, 2022 and 2021 totaled $12.7 million and $3.9 million, respectively, and for the nine month periods ended September 30, 2022 and 2021, totaled $58.1 million and $89.2 million, respectively. Acquisition-related lease additions totaled $74.6 million for the nine month period ended September 30, 2021.
For the three month periods ended September 30, 2022 and 2021, rent expense for leases that have terms in excess of one year totaled approximately $30.6 million and $26.1 million, respectively, of which $2.3 million and $2.4 million, respectively, represented variable lease costs. For the nine month periods ended September 30, 2022 and 2021, rent expense for such leases totaled approximately $98.5 million and $81.6 million, respectively, of which $7.8 million and $7.5 million, respectively, represented variable lease costs. The Company also incurred rent and related expense for facilities, vehicles and equipment having originalleases with terms of one year or less totaling approximately $159.4$98.8 million and $96.7$158.3 million for the three month periods ended September 30, 20172022 and 2016,2021, respectively, and totaling $347.8approximately $258.1 million and $213.9$399.2 million for the nine month periods ended September 30, 20172022 and 2016,2021, respectively. Rent expense for operating leases is generally consistent with the amount of the related payments, which payments are included within operating activities in the consolidated statements of cash flows.
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Additional Lease Information
Future minimum lease commitments as of September 30, 2022 were as follows (in millions):
 Finance
Leases
Operating
Leases
2022, remaining three months$43.8 $22.9 
2023141.6 83.2 
202497.1 65.8 
202563.9 42.6 
202616.9 27.0 
Thereafter0.6 28.0 
Total minimum lease payments$363.9 $269.5 
Less amounts representing interest(18.5)(15.9)
Total lease obligations, net of interest$345.4 $253.6 
Less current portion
146.2 85.1 
Long-term portion of lease obligations, net of interest
$199.2 $168.5 
As of September 30, 2022, finance leases had a weighted average remaining lease term of 2.8 years with a weighted average discount rate of 3.6%, and non-cancelable operating leases had a weighted average remaining lease term of 4.2 years with a weighted average discount rate of 2.9%. As of September 30, 2022, future lease obligations for leases that had not yet commenced totaled approximately $23.1 million. These leases commence in 2022 with lease terms ranging from 4 years to 11 years.
Note 9 – Stock-Based Compensation and Other Employee Benefit Plans
The Company has stock-based compensation plans, under which shares of the Company’s common stock are reserved for issuance. Under all stock-based compensation plans in effect as of September 30, 2017, including employee stock purchase plans,2022, there were approximately 4.9 million


3,428,000 shares available for future grant. In March 2017,Non-cash stock-based compensation expense under all plans totaled $5.7 million and $6.1 million for the Company’s boardthree month periods ended September 30, 2022 and 2021, respectively, and totaled $18.9 million and $17.7 million for the nine month periods ended September 30, 2022 and 2021, respectively. Income tax benefits associated with stock-based compensation arrangements totaled $0.9 million and $1.2 million for the three month periods ended September 30, 2022 and 2021, respectively. For the nine month periods ended September 30, 2022 and 2021, such income tax benefits totaled $4.3 million and $3.4 million, respectively, including tax benefits related to the vesting of directors adopted the Amendedshare-based payment awards totaling $0.9 million and Restated 2013 Incentive Compensation Plan (the “Amended 2013 ICP”), which was effective as of January 1, 2017 and changed the amount of tax the Company can withhold for employee tax withholdings on share-based awards, as provided under ASU 2016-09. The Company adopted ASU 2016-09 as of January 1, 2017, as discussed in Note 1 - Business, Basis of Presentation and Significant Accounting Policies.$0.2 million, respectively.
Restricted Shares
MasTec grants restricted stock awards and restricted stock units (together, “restricted shares”), to eligible participants, which are valued based on the closing market share price of MasTec common stock (the “market price”) on the date of grant. During the restriction period, holders of restricted stock awards are entitled to vote the shares. TotalAs of September 30, 2022, total unearned compensation related to restricted shares as ofSeptember 30, 2017was approximately $15.8$38.9 million,, which amount is expected to be recognized over a weighted average period of approximately 1.11.9 years. The intrinsicThe fair value of restricted shares that vested, which is based on the market price on the date of vesting, totaled $0.1$0.3 million for both the three month periods ended September 30, 20172022 and 2016,2021, and totaled $11.9$19.5 million and $1.5$11.6 million for the nine month periods ended September 30, 20172022 and 2016,2021, respectively.
Activity, restricted shares: (a)
Restricted
Shares		Per Share Weighted Average Grant Date Fair Value
Non-vested restricted shares, as of December 31, 20211,748,685 $43.73 
Granted221,525 84.36 
Vested(232,408)47.81 
Canceled/forfeited(75,225)43.84 
Non-vested restricted shares, as of September 30, 20221,662,577 $48.57 
Activity, restricted shares: (a)
Restricted
Shares		 Per Share Weighted Average Grant Date Fair Value
Non-vested restricted shares, as of December 31, 20161,970,586
 $21.61
Granted193,348
 39.47
Vested(304,211) 40.72
Canceled/forfeited(30,041) 20.24
Non-vested restricted shares, as of September 30, 20171,829,682
 $20.34
(a)
Includes 39,050 and 43,300(a)    Includes 2,150 and 1,300 restricted stock units as of September 30, 2017 and December 31, 2016, respectively.
Stock Options
The Company previously granted options to purchase its common stock to employees and members of the Board of Directors and affiliates under various stock option plans. During 2016, all stock options that were outstanding under previous stock option grants were exercised. The intrinsic value of options exercised, which is based on the difference between the exercise price and the market share price of the Company’s common stock on the date of exercise, totaled $0.5 million and $1.8 million for the three and nine month periods ended September 30, 2016,2022 and December 31, 2021, respectively. Net of shares withheld in cashless option exercises, there were no proceeds from option exercises for the three month period ended September 30, 2016, and for the nine month period ended September 30, 2016, proceeds totaled $1.9 million.

Employee Stock Purchase Plans
The Company has certain employee stock purchase plans (collectively, “ESPPs”), under which shares of the Company'sCompany’s common stock are available for purchase by eligible employees. The following table provides details pertainingparticipants. Under the ESPPs, eligible participants are permitted to purchase MasTec, Inc. common stock at 85% of the fair market value of the shares on the date of purchase, which occurs on the last trading day of each two week offering period. At the Company’s discretion, share purchases may be satisfied by delivering either newly issued common shares, or common shares reacquired on the open market or in privately negotiated transactions.
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For the three month periods ended September 30, 2022 and 2021, 25,495 shares and 21,636 shares, respectively, were purchased by participants under the Company’s ESPPs for $1.7 million and $1.8 million, respectively, and for the nine month periods ended September 30, 2022 and 2021, 82,121 shares and 60,669 shares, respectively, were purchased for $5.3 million and $5.0 million, respectively. All shares purchased by participants under the Company’s ESPPs for the three and nine month periods indicated:
 For the Nine Months Ended September 30
 2017 2016
Cash proceeds (in millions)
$2.4
 $2.0
Common shares issued68,789
 115,556
Weighted average price per share$34.72
 $16.88
Weighted average per share grant date fair value$9.00
 $4.58
Non-CashStock-Basedended September 30, 2022 and 2021 were reacquired by the Company on the open market. Compensation Expense
Details of non-cash stock-based compensation expense associated with the Company’s ESPPs totaled approximately $0.3 million for both the three month periods ended September 30, 2022 and related tax effects2021, and totaled approximately $1.0 million and $0.9 million for the nine month periods indicated were as follows (in millions):ended September 30, 2022 and 2021, respectively.
 For the Three Months Ended September 30 For the Nine Months Ended September 30
 2017 2016 2017 2016
Non-cash stock-based compensation expense$3.4
 $3.9
 $10.5
 $11.3
Income Tax Effects:       
Income tax effect of non-cash stock-based compensation$1.3
 $1.7
 $3.8
 $5.6
Excess tax benefit from non-cash stock-based compensation (a)
$0.0
 $0.3
 $0.1
 $1.4
(a)
Excess tax benefits represent cash flows from tax deductions in excess of the tax effect of compensation expense associated with share-based payment arrangements. For the ninemonth period ended September 30, 2017, the Company incurred a net tax deficiency of $0.1 million related to the vesting of share-based payment awards and excess tax benefits were de minimis. As discussed in Note 1 - Business, Basis of Presentation and Significant Accounting Policies, the Company adopted


ASU 2016-09 effective January 1, 2017 on a prospective basis. ASU 2016-09 changed the required presentation of excess tax benefits in the consolidated statement of cash flows from financing activities to operating activities. Excess tax benefits for the comparative prior year period are classified as cash flows from financing activities.
Note 10 – Other Retirement Plans
Multiemployer Plans. Certain of MasTec’s subsidiaries including certain subsidiaries in Canada, contribute amounts to multiemployer pension and other multiemployer benefit plans and trusts which are recorded as a component of employee wages and salaries within costs of revenue, excluding depreciation and amortization.(“MEPPs”). Contributions are generally based on fixed amounts per hour per employee for employees covered under these plans. Multiemployer plan contribution rates are determined annually and are assessed on a “pay-as-you-go” basis based on union employee payrolls. Union payrolls cannot be determined for future periods because the number of union employees employed at a given time, and the plans in which they may participate, vary depending upon the location and number of ongoing projects at a given time and the need for union resources in connection with those projects. Total contributions to multiemployer plans and the related number of employees covered by these plans including with respect to the Company’s Canadian operations, for the periods indicated were as follows:
 Multiemployer Plans
 Covered Employees 
Contributions (in millions)
 Low High Pension Other Multiemployer Total
For the Three Months Ended September 30:         
20173,669
 7,057
 $36.7
 $2.7
 $39.4
20164,170
 4,910
 $26.4
 $2.9
 $29.3
For the Nine Months Ended September 30:         
2017550
 7,057
 $68.1
 $8.0
 $76.1
20161,112
 4,910
 $43.4
 $7.6
 $51.0
Multiemployer Plans
Covered Employees
Contributions (in millions)
LowHighPensionOther MultiemployerTotal
For the Three Months Ended September 30:
20226,774 7,136 $23.0 $14.5 $37.5 
20215,116 6,979 $36.9 $11.7 $48.6 
For the Nine Months Ended September 30:
20226,601 7,136 $62.3 $41.6 $103.9 
20212,412 6,979 $81.1 $21.9 $103.0 
The fluctuations in the average number of employees covered under multiemployer plans and relatedassociated contributions in the table above arerelated primarily related to higher levelsthe timing of activity for the Company’s union resource-based project activity within the Company’s oil and gas operations.
Note 11 – Equity
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss is composed of unrealized foreign currency translation gains and losses, which relate primarily to fluctuations in foreign currency exchange rates of the Company’s foreign subsidiaries with a functional currency other than the U.S. dollar, and unrealized gains and losses from certain investment activities.projects. For both the three and nine month periods ended September 30, 20172022, multiemployer plan activity was driven primarily by acquisition-related project work within the Company’s Power Delivery operations, and, 2016, unrealizedto a lesser extent, its Oil and Gas operations, whereas for the three and nine month periods ended September 30, 2021, activity was driven primarily by project work within the Company’s Oil and Gas operations, and to a lesser extent, its Power Delivery operations.
Note 11 – Equity
Share Activity
The Company’s share repurchase programs provide for the repurchase, from time to time, of MasTec common shares in open market transactions or in privately negotiated transactions in accordance with applicable securities laws. The Company’s share repurchase programs do not have an expiration date and may be modified or suspended at any time at the Company’s discretion. There were no share repurchases under the Company’s share repurchase programs for the three month period ended September 30, 2022, and for the nine month period ended September 30, 2022, the Company repurchased 1.1 million shares of its common stock for an aggregate purchase price of approximately $81.3 million. Of the total repurchased shares, 0.1 million were repurchased in the first quarter of 2022 for $8.6 million under the Company’s December 2018 $100 million share repurchase program, which completed the program. The remaining 1.0 million shares were repurchased for $72.7 million under the Company’s March 2020 $150 million share repurchase program. There were no share repurchases under the Company’s share repurchase programs in either of the three or nine month periods ended September 30, 2021. As of September 30, 2022, $77.3 million was available for future share repurchases under the Company’s March 2020 share repurchase program.
The Company may use either authorized or unissued shares or treasury shares to meet its share issuance requirements. During the second quarter of 2022, the Company reissued 0.1 million shares of its treasury stock with a cost basis of $4.3 million in settlement of certain Additional Payments in connection with an acquisition. See Note 3 – Acquisitions, Goodwill and Other Intangible Assets, Net, for additional information.
Accumulated Other Comprehensive Loss
Unrealized foreign currency translation activity, related primarilynet, for the three and nine month periods ended September 30, 2022 and 2021 relates to the Company’s Canadian operations in Canada and unrealizedMexico. Unrealized investment activity, relatedfor the three and nine month periods ended September 30, 2022 relates to interest rate swapsunrealized gains associated with the Waha JVs.
Share Activity
NoJV interest rate swaps. For the three and nine month periods ended September 30, 2021, unrealized investment activity, net, includes unrealized gains on the Waha JV swaps and unrealized losses on the AVCT convertible debentures prior to their conversion in the third quarter of 2021. The net unrealized gain on the AVCT convertible debentures was reclassified into other income, net, in the third quarter of 2021 in conjunction with the conversion into shares of AVCT common stock. See Note 4 - Fair Value of Financial Instruments for additional information related to the Company’s common stock have been repurchased underWaha JV swaps and the Company’s 2016 share repurchase program.AVCT convertible debentures.
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Note 12 -– Income Taxes
In determining the quarterly provision for income taxes, management uses an estimated annual effective tax rate based on forecasted annual pre-tax income, permanent tax differences, statutory tax rates and tax planning opportunities in the various jurisdictions in which the Company operates. The effect of significant discrete items is separately recognized in the quarter(s) in which they occur. For the three month periods ended September 30, 2022 and 2021, the Company’s consolidated effective tax rates were 18.4% and 19.7%, respectively, and for the nine month periods ended September 30, 2022 and 2021, were a benefit of 0.2% and an expense of 24.8%, respectively. The Company’s effective tax rate for the nine month period ended September 30, 2017, the Company recognized certain tax credits based upon the results of2022 included a study that is currently underway, which amount was determined based on management’s estimates and currently available information. Furtherbenefit related to adjustments to the amount recognized may occur as the resultsresulting from finalization of the study are finalized, which is expected to occur in the fourth quarter of 2017.

As discussed in Note 1 - Business, Basis of Presentation and Significant Accounting Policies, effective January 1, 2017, the Company adopted ASU 2016-09, which changed the recognition requirements for excessCompany’s 2021 tax benefits (“windfalls”) orreturns, a tax deficiencies (“shortfalls”) from share-based payment awards. ASU 2016-09 requires windfalls or shortfalls to be recognized within income tax expense in the interim periods in which they occur, rather than as additional paid-in capital. Given that windfalls or shortfalls are recognized in income tax expense in the periods in which they occur, they are not included when estimating annual effective tax rates. The tax effectbenefit related to the vesting of share-based payment awards, did not haveand a significant effect onbenefit from the true-up of certain prior year non-deductible expenses. For the nine month period ended September 30, 2021, the Company’s consolidated effective tax rate forincluded a benefit related to adjustments resulting from finalization of the three and nine month periods ended September 30, 2017.Company’s 2020 tax returns, offset, in part, by the tax effect of certain non-deductible share-based compensation.

As of September 30, 2017, the Company had $274.5 million of long-term deferred tax liabilities. As of December 31, 2016, current deferred tax assets, net, totaled $11.8 million and long-term deferred tax liabilities, net, totaled $178.4 million. In addition, as of September 30, 2017 and December 31, 2016, accrued income and other taxes payable, which are included within other accrued expenses, totaled $19.8 million and $40.3 million, respectively. The Company adopted Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which changed the classification requirements for deferred tax assets and liabilities, effective January 1, 2017. ASU 2015-17 requires long-term classification of all deferred


tax assets and liabilities, rather than separately classifying deferred tax assets and liabilities based on their net current and non-current amounts, as was required under the previous guidance. The Company adopted ASU 2015-17 on a prospective basis, therefore prior periods were not adjusted to conform to the current period presentation. The adoption of ASU 2015-17 did not have had a material effect on the consolidated financial statements.
Note 13 -– Segments and Related Information
Segment Discussion
MasTecThe Company manages its operations under five operating segments, which represent MasTec’sits five reportable segments: (1) Communications; (2) Clean Energy and Infrastructure; (3) Oil and Gas; (3) Electrical Transmission; (4) Power Generation and IndustrialDelivery and (5) Other. This structure is generally focused on broad end-user markets for MasTec’sthe Company’s labor-based construction services. All five reportable segments derive their revenue from the engineering, installation and maintenance of infrastructure, primarily in North America. In the first quarter of 2022, the Company began integrating the acquisition of HMG into its operations. The HMG acquisition was completed on December 30, 2021, with its initial balance sheet reported within the Company’s Power Delivery segment. During the first quarter of 2022, the Company reported portions of HMG’s operations within its Power Delivery, Communications and Oil and Gas segments, as appropriate, and HMG’s corporate functions within its Corporate results. Accordingly, HMG’s December 31, 2021 balance sheet information was recast to conform with the new reporting structure.
The Communications segment performs engineering, construction, maintenance and customer fulfillment activities related to communications infrastructure, primarily for wireless and wireline/fiber communications and install-to-the-home customers, and, to a lesser extent,as well as infrastructure for utilities, among others. MasTecThe 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 for renewable energy and various types of heavy civil and industrial infrastructure. The Company performs engineering, construction and maintenance services on oil and natural gasfor pipelines and processing facilities for the energy and utilities industries through its Oil and Gas segment. The Electrical TransmissionPower 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. The Power Generation and Industrial segment primarily serves energy, utility and other end-markets through the installation and construction of conventional and renewable power facilities, related electrical transmission infrastructure, ethanol/biofuel facilities and various types of heavy civil and industrial infrastructure. The Other segment includes certain equity investees, the services of which vary from those provided by the Company’s four primary segments, as well as other small business units that perform construction and other services for a variety ofcertain international end-markets.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is the measure of profitability used by management to manage its segments and, accordingly, in its segment reporting. As appropriate, the Company supplements the reporting of its consolidated financial information determined in accordance with U.S. GAAP with certain non-U.S. GAAP financial measures, including EBITDA. The Company believes these non-U.S. GAAP measures provide meaningful information and help investors understand the Company’s financial results and assess its prospects for future performance. The Company uses EBITDA to evaluate its performance, both internally and as compared with its peers, because it excludes certain items that may not be indicative of the Company’s core operating results for its reportable segments, as well as items that can vary widely across different industries or among companies within the same industry, and for non-cash stock-based compensation expense, can also be subject to volatility from changes in the market price per share of our common stock or variations in the value of shares granted.industry. Segment EBITDA is calculated in a manner consistent with consolidated EBITDA.
For the three and nine month periods ended September 30, 2017, Other segment EBITDA included project losses of $0.4 million and $7.4 million, respectively, from a proportionately consolidated non-controlled Canadian joint venture, which is managed by a third party, and for which we have minimal direct construction involvement. For both the three and nine month periods ended September 30, 2016, Other segment EBITDA included $5.1 million of project losses on this proportionately consolidated non-controlled Canadian joint venture. For the nine month period ended September 30, 2016, EBITDA for the Oil and Gas and Electrical Transmission segments included first quarter project losses of $13.5 million and $15.1 million, respectively.
Summarized financial information for MasTec’s reportable segments is presented and reconciled to consolidated financial information for total MasTec in the following tables, (in millions):
 For the Three Months Ended September 30 For the Nine Months Ended September 30
Revenue:2017 2016 2017 2016
Communications (a)
$610.5
 $624.3
 $1,762.2
 $1,728.0
Oil and Gas1,161.0
 736.0
 2,757.2
 1,454.3
Electrical Transmission81.8
 101.7
 277.3
 283.6
Power Generation and Industrial96.9
 123.6
 204.1
 324.7
Other10.6
 7.6
 14.2
 14.9
Eliminations(5.0) (7.0) (10.9) (12.7)
Consolidated revenue$1,955.8
 $1,586.2
 $5,004.1
 $3,792.8
(a)Revenue generated primarily by utilities customers represented 13.0% and 11.1% of Communications segment revenue for the three month periods ended September 30, 2017 and 2016, respectively, and represented 12.6% and 10.9% for the nine month periods ended September 30, 2017 and 2016, respectively.


 For the Three Months Ended September 30 For the Nine Months Ended September 30
EBITDA:2017 2016 2017 2016
Communications$65.3
 $62.8
 $173.2
 $190.9
Oil and Gas108.1
 117.8
 356.1
 187.6
Electrical Transmission4.5
 (8.3) 11.2
 (42.0)
Power Generation and Industrial9.3
 6.1
 14.8
 13.8
Other10.1
 (3.1) 11.6
 (2.6)
Corporate(22.0) (24.3) (69.2) (55.1)
Consolidated EBITDA$175.3
 $151.0
 $497.7
 $292.6

 For the Three Months Ended September 30 For the Nine Months Ended September 30
Depreciation and Amortization:2017 2016 2017 2016
Communications$13.8
 $12.5
 $39.4
 $37.2
Oil and Gas26.0
 20.7
 71.1
 58.2
Electrical Transmission5.8
 6.1
 17.3
 17.1
Power Generation and Industrial2.9
 1.6
 5.8
 4.6
Other0.0
 0.0
 0.1
 0.0
Corporate1.6
 1.7
 4.7
 5.1
Consolidated depreciation and amortization$50.1
 $42.6
 $138.4
 $122.2

The following table, which may contain slight summation differences due to rounding, presentsincluding a reconciliation of consolidated income before income taxes to EBITDA, (in millions):all of which are presented in millions. The tables below may contain slight summation differences due to rounding.
For the Three Months Ended September 30,For the Nine Months Ended September 30,
Revenue:2022202120222021
Communications (a)
$888.9 $670.3 $2,375.1 $1,869.3 
Clean Energy and Infrastructure563.2 518.4 1,493.5 1,350.3 
Oil and Gas375.8 858.4 927.9 2,205.3 
Power Delivery688.4 365.3 1,985.4 731.4 
Other— 0.0 — 0.0 
Eliminations(2.8)(8.1)(12.2)(13.9)
Consolidated revenue$2,513.5 $2,404.3 $6,769.7 $6,142.4 
(a)    Revenue generated primarily by utilities customers represented 21.8% and 22.2% of Communications segment revenue for the three month periods ended September 30, 2022 and 2021, respectively, and represented 23.7% and 21.0% for the nine month periods ended September 30, 2022 and 2021, respectively.

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 For the Three Months Ended September 30 For the Nine Months Ended September 30
EBITDA Reconciliation:2017 2016 2017 2016
Income before income taxes$107.6
 $95.3
 $314.3
 $132.4
Plus:       
Interest expense, net17.6
 13.1
 45.0
 37.9
Depreciation and amortization50.1
 42.6
 138.4
 122.2
Consolidated EBITDA$175.3
 $151.0
 $497.7
 $292.6
For the Three Months Ended September 30,For the Nine Months Ended September 30,
EBITDA:2022202120222021
Communications$109.9 $71.6 $234.5 $193.1 
Clean Energy and Infrastructure24.6 13.8 30.2 40.2 
Oil and Gas49.2 170.6 133.4 476.2 
Power Delivery63.1 34.9 150.6 47.8 
Other5.6 7.5 20.0 23.3 
Corporate(45.9)(26.6)(131.2)(86.3)
Consolidated EBITDA$206.5 $271.8 $437.5 $694.3 
For the three month period ended September 30, 2022, Communications, Oil and Gas, Power Delivery and Corporate EBITDA included $0.5 million, $1.1 million, $20.4 million and $11.2 million, respectively, of acquisition and integration costs related to the Company’s recent acquisitions, and for the nine month period ended September 30, 2022, included $2.4 million, $4.5 million, $34.5 million and $18.0 million, respectively, of such costs. For the three and nine month periods ended September 30, 2022, Corporate EBITDA included fair value losses related to an investment of $0.1 million and $7.2 million, respectively. For both the three and nine month periods ended September 30, 2021, Corporate EBITDA included fair value losses of $6.9 million related to this investment.
For the Three Months Ended September 30,For the Nine Months Ended September 30,
Depreciation and Amortization:2022202120222021
Communications$32.5 $26.4 $92.1 $72.0 
Clean Energy and Infrastructure12.4 13.0 35.5 31.1 
Oil and Gas34.1 55.5 97.9 163.8 
Power Delivery37.7 21.1 110.1 41.3 
Other— 0.0 — 0.0 
Corporate2.6 2.7 9.1 8.5 
Consolidated depreciation and amortization$119.3 $118.7 $344.7 $316.7 
Assets:September 30,
2022
December 31, 2021 (a)
Communications$2,436.6 $2,100.9 
Clean Energy and Infrastructure1,047.6 1,067.0 
Oil and Gas1,575.8 1,527.6 
Power Delivery2,033.4 2,017.2 
Other287.4 238.1 
Corporate94.9 170.6 
Consolidated segment assets$7,475.7 $7,121.4 
(a)     Segment assets as of December 31, 2021 were recast during the first quarter of 2022 to conform with the change in segment reporting for the HMG acquisition, the effect of which was a decrease in Power Delivery segment assets of $192.2 million, an increase in Communications and Oil and Gas segment assets of $69.4 million and $77.0 million, respectively, and an increase in Corporate assets of $45.8 million.
For the Three Months Ended September 30,For the Nine Months Ended September 30,
EBITDA Reconciliation:2022202120222021
Income before income taxes$60.3 $140.0 $30.5 $338.3 
Plus:
Interest expense, net26.9 13.1 62.3 39.4 
Depreciation91.3 95.4 263.5 262.1 
Amortization of intangible assets28.0 23.4 81.2 54.5 
Consolidated EBITDA$206.5 $271.8 $437.5 $694.3 
Foreign Operations. Operations and Other. MasTec operates in North America, primarily in the United States and Canada, and, to a far lesser extent, in Mexico. ForMexico, the Caribbean and India. Revenue derived from U.S. operations totaled $2.5 billion and $2.4 billion for the three month periods ended September 30, 20172022 and 2016, revenue of $1.92021, respectively, and totaled $6.6 billion and $1.5$6.0 billion respectively, was derived from U.S. operations, and revenue of $61.0 million and $73.8 million, respectively, was derived from foreign operations, the majority of which was from the Company’s Canadian operations. Forfor the nine month periods ended September 30, 20172022 and 2016, revenue of $4.8 billion and $3.6 billion, respectively, was derived from U.S. operations, and revenue of $160.7 million and $222.8 million, respectively, was2021, respectively.
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Revenue derived from foreign operations the majority of which was from the Company’s Canadian operations. The majority of the Company’s foreign operations duringtotaled $49.4 million and $40.8 million for the three month periods ended September 30, 2022 and 2021, respectively, and totaled $125.2 million and $120.7 million for the nine month periods ended September 30, 20172022 and 2016 were2021, respectively. Revenue from foreign operations was derived primarily from the Company’s Canadian operations in the Company’sits Oil and Gas segment.segment, and, to a lesser extent, from the Company’s operations in Mexico. Long-lived assets held in the U.S. included property and equipment, net, of $629.2 million$1.6 billion and $475.3 million$1.4 billion as of September 30, 20172022 and December 31, 2016,2021, respectively, and for the Company’s businesses in foreign countries, the majority of which are in Canada, totaled $62.2$22.1 million and $73.8$24.5 million, respectively. Intangible assets and goodwill, net, related to the Company’s U.S. operations totaled approximately $1.2 billion and $1.1$2.1 billion as of both September 30, 20172022 and December 31, 2016, respectively,2021, and for the Company’s businesses in foreign countries, the majority of which are in Canada, totaled approximately $114.3$36.7 million and $107.8$43.8 million as of September 30, 20172022 and December 31, 2016,2021, respectively. AmountsSubstantially all of the Company’s long-lived and intangible assets and goodwill in foreign countries relate to its Canadian operations. As of September 30, 2022 and December 31, 2021, amounts due from customers from which foreign revenue was derived accounted for approximately 6%1% and 8%2%, respectively, of the Company’s consolidated net accounts receivable position, as of September 30, 2017 and December 31, 2016, which represents accounts receivable, net, less BIEC.


deferred revenue. Revenue from governmental entities for the three and nine month periods ended September 30, 2022 totaled approximately 6% and 7%, respectively, of total revenue, and for both the three and nine month periods ended September 30, 2021, totaled approximately 5% of total revenue, substantially all of which was derived from the Company’s U.S. operations.
Significant Customers
Revenue concentration information for significant customers as a percentageFor the three and nine month periods ended September 30, 2022, no customer represented greater than 10% of the Company’s total consolidated revenue. For the three and nine month periods ended September 30, 2021, revenue was as follows:from Enbridge, Inc. represented 21% and 19%, respectively, of the Company’s total consolidated revenue. The Company’s relationship with Enbridge, Inc. is based upon various construction contracts for pipeline activities, for which the related revenue is included within the Oil and Gas segment.
 For the Three Months Ended September 30 For the Nine Months Ended September 30
Customer:2017 2016 2017 2016
Energy Transfer affiliates (a)
49% 35% 40% 26%
AT&T (including DIRECTV®) (b)
21% 30% 25% 34%
(a)The Company's relationship with Energy Transfer affiliates is based upon various construction contracts for pipeline activities with Energy Transfer Partners L.P., and their subsidiaries and affiliates, all of which are consolidated by Energy Transfer Equity, L.P. Revenue from Energy Transfer affiliates is included in the Oil and Gas segment.
(b)The Company’s relationship with AT&T is based upon multiple separate master service and other service agreements, including for installation and maintenance services, as well as construction/installation contracts for AT&T’s: (i) wireless business; (ii) wireline/fiber businesses; and (iii) various install-to-the-home businesses, including DIRECTV®. Revenue from AT&T is included in the Communications segment.
Note 14 -– Commitments and Contingencies
MasTec is subject to a variety of legal cases, claims and other disputes that arise from time to time in the ordinary course of its business. See Note 14 - Commitmentsbusiness, including project contract price disputes, other project-related liabilities and Contingencies in the Company’s 2016 Form 10-K for additional information.acquisition purchase price disputes. MasTec cannot provide assurance that it will be successful in recovering all or any of the potential damages it has claimed or in defending claims against the Company. The outcome of such cases, claims and disputes cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. In the third quarter of 2021, a settlement was finalized in favor of MasTec for approximately $25 million, of which $6 million, net of related settlement costs, is reflected within other current assets as of September 30, 2022. Net of legal and other costs incurred, the Company recorded $5 million of other income related to this settlement in the third quarter of 2021.
Other Commitments and Contingencies
Leases. Leases. In the ordinary course of business, the Company enters into non-cancelable operating leases for certain of its facility, vehicle and equipment needs, including related party leases. See Note 8 - Lease Obligations and Note 15 - Related Party Transactions.
Letters of Credit. In the ordinary course of business, the Company is required to post letters of credit for its insurance carriers and surety bond providers and in support of performance under certain contracts as well as certain obligations associated with the Company’s costequity investment and equity investees,other strategic arrangements, including its variable interest entities. Such letters of credit are generally issued by a bank or similar financial institution. The letter of credit commits the issuer to pay specified amounts to the holder of the letter of credit under certain conditions. If this were to occur, the Company would be required to reimburse the issuer of the letter of credit, which, depending upon the circumstances, could result in a charge to earnings. As of September 30, 20172022 and December 31, 2016,2021, there were $189.1$162.4 million and $314.3$188.5 million, respectively, of letters of credit issued under the Company’s Credit Facility.credit facilities. The Company is not aware of any material claims relating to its outstanding letters of credit as of September 30, 2017 or December 31, 2016.2022.
Performance and Payment Bonds. In the ordinary course of business, MasTec is required by certain customers to provide performance and payment bonds for contractual commitments related to projects in process.its projects. These bonds provide a guarantee to the customer that the Company will perform under the terms of a contract and that the Company will pay its subcontractors and vendors. If the Company fails to perform under a contract or to pay its subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. The Company must reimburse the surety for expenses or outlays it incurs. As of September 30, 20172022 and December 31, 2016,2021, outstanding performance and payment bonds totaled $119.2approximated $2,351.7 million and $72.9$2,155.2 million, respectively, and estimated costs to complete projects secured by these bonds totaled $51.3$775.0 million and $9.5$768.8 million, respectively. Included in these balances as of both September 30, 20172022 and December 31, 2016, respectively. These amounts do not include2021 are $115.0 million of outstanding performance and payment bonds associated withissued on behalf of the Company’s equity investees.
Cost and Equity Investees and Other Entities. The Company holds a 35% undivided interest in a proportionately consolidated non-controlled Canadian contractual joint venture that was underway whenventures, representing the Company acquired Pacer in 2014, whose sole activity involves the construction of a bridge, a business in which the Company does not otherwise engage. This joint venture, which is managed by a third party, and for which the Company has minimal direct construction involvement, automatically terminates upon completionCompany’s proportionate share of the project. total bond obligation for the related projects.
Investment and Strategic Arrangements.The Company also holds undivided interests, ranging from 85% to 90%, in sevenmultiple proportionately consolidated non-controlled contractual joint ventures that provide infrastructure construction services for electrical transmission projects, as well as undivided interests ranging from 30% to 50% in three civil construction projects. Income and/or losses incurred by these joint ventures are generally shared proportionally by the respective joint venture members, with the members of the joint ventures jointly and severally liable for all of the obligations of the joint venture. The respective joint venture agreements provide that each joint venture partner indemnify the other party for any liabilities incurred by such joint venture in excess of its ratable portion of such liabilities. Thus, it is possible that the Company could be required to pay or perform obligations in excess of its share if the other joint venture partners fail or refuse to pay or perform their respective share of the obligations. As of September 30, 2017,2022, the Company was not aware of circumstances that would reasonably lead to material future claims against it in connection with these arrangements. Included in the Company’s cash balances as of September 30, 2022 and December 31, 2021 are amounts held by entities that are proportionately consolidated totaling $15.1 million and $14.6 million, respectively. These amounts are available to support the operations of those entities, but are not available for the Company’s other operations.
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The Company has other investment and strategic arrangements, as discussed inunder which it may incur costs or provide financing, performance, financial and/or other guarantees. See Note 4 - Fair Value of Financial Instruments and Note 15 - Related Party Transactions. From timeTransactions for additional information pertaining to time, the Company may incur costs or provide financing, performance, financial and/or other guarantees to or in connection with its investees.Company’s investment and strategic arrangements.
Self-Insurance.Self-Insurance. MasTec maintains insurance policies for workers’ compensation, general liability and automobile liability, which are subject to per claim deductibles. The Company is self-insured up to the amount of the deductible. The Company also maintains excess umbrella coverage. The Company manages certain of its insurance liabilities indirectly through its wholly-owned captive insurance companies, which reimburse claims up to the applicable insurance limits. Cash balances held by the Company’s captive insurance companies, which totaled approximately $0.3 million as of both September 30, 2022 and December 31, 2021, are generally not available for use in the Company’s other operations.
As of September 30, 20172022 and December 31, 2016,2021, MasTec’s estimated liability for unpaid claims and associated expenses, including incurred but not reported losses related to theseits insurance policies, totaled $98.5$178.8 million and $85.8$189.8 million, respectively, of which $67.5$107.4 million and $55.2$126.5 million, respectively, were reflected within other long-term liabilities in the consolidated balance sheets.


MasTec also maintains an insurance policy with respect to employee group medical claims, which is subject to annual per employee maximum losses. MasTec’s estimated liability for employee group medical claims totaled $2.6$4.2 million as of both September 30, 20172022 and December 31, 2016.2021.
The Company is required to post collateral, generally in the form of letters of credit, surety bonds and provide cash collateral to certain of its insurance carriers and to provide surety bonds in certain states.carriers. Insurance-related letters of credit for the Company’s workers’ compensation, general liability and automobile liability policies amounted to $84.6$103.0 million and $85.1$125.7 million as of September 30, 20172022 and December 31, 2016,2021, respectively. In addition, cash collateral deposited with insurance carriers, which is included within other long-term assets, amounted to $1.5 million for these policies asAs of both September 30, 20172022 and December 31, 2016. Outstanding2021, outstanding surety bonds related to workers’ compensation self-insurance programs amounted to $13.7$110.9 million and $13.5$52.9 million, as of September 30, 2017 and December 31, 2016, respectively.
Employment Agreements. The Company has employment agreements with certain executives and other employees, which provide for compensation and certain other benefits and for severance payments under certain circumstances. Certain employment agreements also contain clauses that become effective upon a change in control of the Company. Upon the occurrence of any of the defined events in the various employment agreements, the Company would be obligated to pay certain amounts to the relevant employees, which vary with the level of the employees’ respective responsibility.
Collective Bargaining Agreements and Multiemployer Plans. As discussed in Note 10 - Other Retirement Plans, certain of MasTec’s subsidiaries are party to various collective bargaining agreements with unions representing certain of their employees, which require the Company to pay specified wages, provide certain benefits to their union employees and contribute certain amounts to multiemployer pension and other multiemployer benefits plans and trusts.MEPPs. The Employee Retirement Income Security Act of 1974, as amended by the Multiemployer Pension Plan Amendments Act of 1980 (collectively, “ERISA”), which governs U.S.-registered multiemployer pension plans,MEPPs, subjects employers to substantial liabilities in the event of thean employer’s complete or partial withdrawal from, or upon termination of, such plans.
The Company currently contributes, and in the past, has contributed to, plans that are underfunded, and, therefore, could have potential liability associated with a voluntary or involuntary withdrawal from, or termination of, these plans. As described in the Company’s 2016 Form 10-K, the Company, along with other members of the Pipe Line Contractors Association (the “PLCA”), voluntarily withdrew from the Central States Southeast and Southwest Areas Pension Fund (“Central States”) in November 2011, for which the Company established and paid a $6.4 million withdrawal liability. The Company is in arbitration to determine if there is any remaining amount owed on this withdrawal liability, and during the third quarter of 2017, the Company recognized $0.6 million of expense in connection with the expected settlement of this matter.
Other than the Company’s 2011 withdrawal from Central States and certain other underfunded plans, as described in the Company’s 2016 Form 10-K,September 30, 2022, the Company does not have plans to withdraw from, and is not aware of circumstances that would reasonably lead to material claims against it, in connection with these plans. However, therethe MEPPs in which it participates. There can be no assurance, however, that the Company will not be assessed liabilities in the future.
Based upon the information available to the Company from plan administrators as of September 30, 2017, several of the multiemployer pension plans in which it participates are underfunded and, as a result, the Company could be required to increase its contributions,future, including in the form of a surcharge on future benefit contributions.contributions or increased contributions on underfunded plans. The amount of additional funds the Company maycould be obligated to pay or contribute in the future cannot be estimated, as these amounts are based on future levels of work of the union employees covered by these plans, investment returns, which could be negatively affected by economic and market conditions, and the level of underfunding of such plans. In connection with the HMG acquisition, the Company assumed an obligation related to HMG’s 2016 withdrawal from a multiemployer pension plan, under which HMG was obligated to make quarterly payments of approximately $74,000 through 2036. As of September 30, 2022 and December 31, 2021, a withdrawal liability of approximately $3.3 million and $3.4 million, respectively, was recorded within other current and other long-term liabilities, as appropriate, within the consolidated balance sheets related to this obligation. In October 2022, the Company reached an agreement with the related pension fund, and paid $2.8 million in full settlement of this liability.
Indemnities. The Company generally indemnifies its customers for the services it provides under its contracts, as well as other specified liabilities, which may subject the Company to indemnity claims, liabilities and related litigation. As of both September 30, 20172022 and December 31, 2016,2021, the Company washad accrued project close-out liabilities of approximately $40 million. The Company is not aware of any other material asserted or unasserted claims in connection with theseits potential indemnity obligations.
Other Guarantees. In From time to time in the ordinary course of its business, from time to time, MasTec guarantees the obligations of its subsidiaries, including obligations under certain contracts with customers, certain lease obligations, and in some states, obligations in connection with obtaining contractors’ licenses. MasTec has also issued performance and other guarantees in connection with certain of its equity investees.investments. MasTec also generally warrants the work it performs for a one to two year period following substantial completion of a project. Much of the work performed by the Company is evaluated for defects shortly after the work is completed. Accrued warranty claims are, and historically have been, de minimis. However, ifIf warranty claims occur, the Company could be required to repair or replace warrantied items, or, if customers elect to repair or replace the warrantied item using the services of another provider, the Company could be required to pay for the cost of the repair or replacement. Warranty claims have historically not been material.
Concentrations of Risk.The Company had approximately 455 customers for For the nine month period ended September 30, 2017.2022, the Company had approximately 1290 customers. As of September 30, 20172022 and December 31, 2016, one customer accounted for approximately 44% and 24%, respectively,2021, there were no customers that represented greater than 10% of the Company’s consolidated net accounts receivable position, which representsis calculated as accounts receivable, net, less BIEC. As ofdeferred revenue. For the three month periods ended September 30, 20172022 and December 31, 2016,2021, the Company derived approximately 41% a separate customer accounted for approximately 13% and 17%nd 58%, respectively, of the Company’s consolidated net accounts receivable position. In addition, the Company derived 83% and 80%, respectively, of its revenue from its top ten customers, for the three month periods ended September 30, 2017 and 2016, and derived 80%42% and 76% of its revenues, respectively, from its top ten customers 56%for the nine month periods ended September 30, 20172022 and 2016.2021, respectively.
Note 15 -– Related Party Transactions
MasTec purchases, rents and leases equipment and purchases various types of supplies and services used in its business, including ancillary construction services, project-related site restoration and marketing, business development and administrative activities, from a number of different vendors on a non-exclusive basis, and from time to time, rents equipment to, sells certain supplies, or performs construction services on behalf of, entities in which members of subsidiary management have ownership or commercial interests. For the three month periods ended September 30, 20172022 and 2016, revenue recognized by the Company’s Pacer subsidiary for work performed for a contractual joint venture in which it holds a 35% undivided interest2021, such payments to related party entities totaled $0.6approximately $8.0 million and $0.2$20.7 million, respectively, and for the nine month periods ended September 30, 20172022 and 2016,2021, totaled $0.9approximately $22.7 million and $71.8 million, respectively. Payables associated with such arrangements totaled approximately $2.5 million and $0.6 million as of September 30, 2022 and December 31, 2021, respectively. Revenue from
28

such related party arrangements totaled approximately $2.4 million and $0.8 million respectively. As of September 30, 2017 and December 31, 2016, receivables from this contractual joint venture totaled $0.9 million and $0.7 million, respectively. Related performance guarantees, which are based on the original full contract value, as of both September 30, 2017 and December 31, 2016, totaled Canadian $132.1 million (or approximately $105.9 million and $98.3 million, respectively). In connection with this contractual joint venture, the Company provided project-related financing of $2.7 million and $5.9 million, respectively, for the three month periods ended September 30, 2022 and 2021, respectively, and totaled approximately $7.4 million and $2.9 million for the nine month periods ended September 30, 2017,2022 and $0.82021, respectively. Related amounts receivable, net, totaled approximately $2.2 million and $5.6 million, respectively, for the three and nine month periods ended September 30, 2016. As of September 30, 2017, there were no additional amounts committed to this entity.


In connection with an April 2017 acquisition, the Company acquired a 40% interest in an entity, valued at $0.4 million which is accounted for as an equity method investment. The Company has a subcontracting arrangement with this entity. For the nine month period ended September 30, 2017, the Company incurred $0.2 million of expenses under this subcontracting arrangement, and there were no amounts outstanding as of September 30, 2017. During the nine month period ended September 30, 2017, the2022 and December 31, 2021, respectively.
The Company advanced $0.3 million to this entity, net, of which $0.3 million was outstanding as of September 30, 2017. The acquired company had a vendor financing arrangement with an entity that was owned by a member of subsidiary management, which arrangement was completed in the third quarter of 2017. The payments made under this arrangement for the three and nine month periods ended September 30, 2017 totaled $1.4 million and $5.3 million, respectively, and no amounts were outstanding as of September 30, 2017.
MasTec purchases, rents and leases equipment used in its businessand purchases certain supplies and servicing from a number of different vendors on a non-exclusive basis, including CCI, in which the Company has a cost method investment.CCI. Juan Carlos Mas, who is the brother of Jorge Mas, Chairman of MasTec’s Board of Directors, and José R. Mas, MasTec’s Chief Executive Officer, serves as the chairman of CCI.CCI, and a member of management of a MasTec subsidiary and an entity that is owned by the Mas family are minority owners. For the three month periods ended September 30, 2017 and 2016, MasTec paid CCI approximately $22.9 million and $10.0 million, respectively, for equipment supplies, rentals, leases and servicing. For the nine month periods ended September 30, 2017 and 2016,2022, MasTec paid CCI approximately $34.9$1.1 million and $13.7$2.9 million, respectively, related to this activity, and for the three and nine month periods ended September 30, 2021, paid approximately $8.0 million and $18.6 million, net of rebates.rebates, respectively. Amounts payable to CCI totaled approximately $1.1 million and $0.8 million as of September 30, 2022 and December 31, 2021, respectively. The Company has also rented equipment to CCI. Revenue from equipment rentals to CCI totaled approximately $0.2 million for both the three and nine month periods ended September 30, 2022, and such revenue was de minimis for the three and nine month periods ended September 30, 2021. As of September 30, 20172022, related amounts receivable totaled $0.1 million, and as of December 31, 2016, related payables totaled approximately $6.1 million and $1.5 million, respectively.2021, there were no amounts receivable.
MasTec has a subcontracting arrangement with an entity for the performance of construction services, the minority owners of which include an entity controlled by Jorge Mas and José R. Mas, along with two members of management of a MasTec subsidiary. For the three month periods ended September 30, 20172022 and 2016,2021, MasTec incurred $39.2subcontracting expenses in connection with this arrangement of approximately $0.1 million and $5.6$41.1 million, respectively, of expenses under this subcontracting arrangement, and for the nine month periods ended September 30, 20172022 and 2016, MasTec2021, incurred $54.8subcontracting expenses of approximately $0.2 million and $8.8$86.9 million, respectively. During the third quarter of 2016, the Company sold equipment totaling $0.3 million to this entity. As of September 30, 20172022 and December 31, 2016,2021, related amounts payable totaled $20.1approximately $0.1 million and $0.1$0.5 million, respectively.
MasTec has a leasing arrangement for an aircraft that is owned by an entity that Jorge Mas owns. For the three month periods ended September 30, 2022 and 2021, MasTec paid approximately $0.7 million and $0.6 million, respectively, related to this leasing arrangement, and paid approximately $1.9 million for both the nine month periods ended September 30, 2022 and 2021.
MasTec has performed construction services on behalf of a professional Miami soccer franchise (the “Franchise”) in which Jorge Mas and José R. Mas are majority owners. Services provided by MasTec have included the construction of a soccer facility and stadium as well as wireless infrastructure services. MasTec may perform additional construction services for the Franchise in the future. Payments for other expenses related to the Franchise for both the three month periods ended September 30, 2022 and 2021 totaled approximately $0.1 million, and totaled approximately $0.4 million and $0.3 million for the nine month periods ended September 30, 2022 and 2021, respectively.
Beginning in the fourth quarter of 2021, MasTec has a subcontracting arrangement to perform construction services for an entity, of which José R. Mas acquired a minority interest, and of which a member of management of a MasTec subsidiary owns the remaining interest. For the three and nine month periods ended September 30, 2022, revenue recognized by MasTec under this arrangement totaled approximately $38.0 million and $98.7 million, respectively, and as of September 30, 2022, related amounts receivable totaled approximately $36.6 million. There were no amounts receivable as of December 31, 2021. MasTec pays a management fee to this entity in connection with the subcontracting arrangement, under which MasTec incurred approximately $0.4 million and $0.9 million for the three and nine month periods ended September 30, 2022, of which $0.4 million was payable as of September 30, 2022.
MasTec leases employees and provides satellite communication services to a customer in which Jorge Mas and José R. Mas own a majority interest. ForCharges to this customer under these arrangements totaled approximately $0.3 million for both the three month periods ended September 30, 20172022 and 2016, MasTec charged2021, and totaled approximately $0.2$0.9 million to this customer, and for both the nine month periods ended September 30, 20172022 and 2016, charged $0.6 million.2021. As of both September 30, 20172022 and December 31, 2016,2021, related amounts receivable totaled approximately $0.8 million.
The Company has advanced amounts on behalf of an entity that was acquired in 2021. Amounts outstanding receivables from employee leasingfor such advances, which are expected to be settled under customary terms associated with the related purchase agreement, totaled approximately $2.0 million and $0.5 million as of September 30, 2022 and December 31, 2021, respectively. Additionally, in 2021, the Company advanced amounts to the former owner of an acquired business. There were no remaining amounts outstanding as of September 30, 2022, and as of December 31, 2021, approximately $1.0 million of such advances was outstanding. In addition, the Company has a subcontracting arrangement with an entity in which it has a 25% interest. The Company’s interest in this entity is accounted for as an equity method investment. For the three and nine month periods ended September 30, 2022, the Company made equity contributions to this entity of approximately $0.1 million and $0.6 million, respectively. As of September 30, 2022 and December 31, 2021, the Company’s net investment in this entity was a liability of approximately $1.2 million and $1.6 million, respectively, which net amounts each included approximately $2.3 million of accounts receivable, net, less deferred revenue, related to the subcontracting arrangement. Additionally, the Company has certain arrangements with an entity in which members of management have an ownership interest, including a fee arrangement in conjunction with a $15.0 million letter of credit issued by the Company on behalf of this customerentity. Income recognized in connection with these arrangements totaled approximately $0.2 million. The Company also provides satellite communication services to this customer. Formillion for both the three month periods ended September 30, 20172022 and 2016, revenue from satellite communication services provided to this customer2021, and totaled approximately $0.2 $0.6 million and for both the nine month periods ended September 30, 20172022 and 2016, satellite communication revenues2021. As of September 30, 2022 and December 31, 2021, related amounts receivable totaled $0.6 million and $0.7 million, respectively. As of September 30, 2017 and December 31, 2016, receivables from this arrangement totaled approximately $0.3 million and $0.4 million, respectively.
MasTec has a leasing arrangement with an independent third party that leases an aircraft from a Company owned by Jorge Mas. For the three month periods ended September 30, 2017 and 2016, MasTec paid $0.5 million and $0.7 million, respectively, under this leasing arrangement, and for the nine month periods ended September 30, 2017 and 2016, MasTec paid $1.5 million and $2.0 million, respectively. As of both September 30, 2017 and December 31, 2016, related amounts payable were de minimis.
For the three month periods ended September 30, 2017 and 2016, related party lease payments for operational facilities and equipment, which are primarily associated with members of subsidiary management, totaled approximately $11.3 million and $12.5 million, respectively, and for the nine month periods ended September 30, 2017 and 2016, related party lease payments totaled approximately $38.4 million and $31.6 million, respectively. Payables associated with related party leases totaled approximately $0.6 million and $0.3 million as of September 30, 2017 and December 31, 2016, respectively. Additionally, payments for various types of supplies and services, including ancillary construction services, project-related site restoration and marketing and business development activities associated with members of subsidiary management totaled approximately $26.4 million and $7.4 million for the three month periods ended September 30, 2017 and 2016, respectively, and totaled $41.0 million and $14.2 million for the nine month periods ended September 30, 2017 and 2016, respectively. As of September 30, 2017 and December 31, 2016, associated amounts payable totaled approximately $0.8 million and $3.7 million, respectively. In addition, MasTec performs construction services for an entity associated with a member of subsidiary management. Revenue from this arrangement totaled $1.0 million for the three month period ended September 30, 2017, and related receivables totaled $0.5 million as of September 30, 2017. The oil and gas pipeline equipment company that was acquired by MasTec in the third quarter of 2017 was formerly owned by a member of subsidiary management. MasTec previously leased equipment from this company. The Company paid $40.6 million in cash and $57.3 million of contingent consideration in connection with this acquisition.
Non-controlling interests in entities consolidated by the Company represent ownership interests held by certain members of management of severalcertain of the Company’s subsidiaries, primarily in ourthe Company’s Oil and Gas segment, andsegment. In June 2021, the Company has a subcontracting arrangement withacquired an additional 15% of the non-controlling interests in one of these entities from two members of subsidiary management for the performance of ancillary oil and gas construction services, which transactions are eliminated in consolidation. The Company made distributions of earnings of $1.3$6.8 million in the first quarter of 2017 to holders of its non-controlling interests.cash.
Split Dollar Agreements
MasTec has split dollar life insurance agreements with eachtrusts, for one of which Jorge Mas is a trustee, and for the other of which José R. Mas and Jorge Mas. In connection with the split dollar agreement for José R. Mas, the Company made no payments in either of the three month periods ended September 30, 2017 and 2016, and paid $0.7 million in each of the nine month periods ended September 30, 2017 and 2016. In connection with the split dollar agreement for Jorge Mas, the Company paid $0.6 million foris a trustee. For both the three month periods ended September 30, 20172022 and 2016,2021, the Company paid $0.6 million in connection with the agreements for Jorge Mas, and paid $1.1 millionno payments were made for José R. Mas. For both the nine month periods ended September 30, 20172022 and 2016.2021, the Company paid $1.1 million in connection with the agreements for Jorge Mas, and paid $0.7 million for José R. Mas. As of September 30, 20172022 and December 31, 2016,2021, life insurance assets associated with these agreements totaled $16.6approximately $25.8 million and $14.8$24.0 million, respectively, which amount is included within other long-term assets.


Note 16 – Supplemental Guarantor Condensed Unaudited Consolidating Financial Information
The 4.875% Senior Notes are fully and unconditionally guaranteed on an unsecured, unsubordinated, joint and several basis by certain of the Company’s existing and future 100%-owned direct and indirect domestic subsidiaries that are each guarantors of the Credit Facility or other outstanding indebtedness (the “Guarantor Subsidiaries”). The Company’s subsidiaries organized outside of the United States and certain domestic subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) do not guarantee these notes. A Guarantor Subsidiary’s guarantee is subject to release in certain customary circumstances, including upon the sale of a majority of the capital stock or substantially all of the assets of such Guarantor Subsidiary; if the Guarantor Subsidiary’s guarantee under the Company’s Credit Facility and other indebtedness is released or discharged (other than due to payment under such guarantee); or when the requirements for legal defeasance are satisfied or the obligations are discharged in accordance with the related indentures.
The following supplemental financial information sets forth the condensed unaudited consolidating balance sheets and the condensed unaudited consolidating statements of operations and comprehensive income (loss) and cash flows for MasTec, Inc., the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis and the eliminations necessary to arrive at the information for the Company as reported on a consolidated basis. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among MasTec, Inc., the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries.  Investments in subsidiaries are accounted for using the equity method for this presentation.


CONDENSED UNAUDITED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in millions)respectively.
29
For the Three Months Ended September 30, 2017MasTec, Inc. 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations 
Consolidated
MasTec, Inc.
Revenue$—
 $1,860.3
 $130.3
 $(34.8) $1,955.8
Costs of revenue, excluding depreciation and amortization—
 1,640.3
 120.7
 (34.8) 1,726.2
Depreciation and amortization—
 41.1
 9.0
 —
 50.1
General and administrative expenses0.5
 61.7
 4.2
 —
 66.4
Interest expense (income), net—
 33.2
 (15.6) —
 17.6
Equity in earnings of unconsolidated affiliates—
 —
 (7.4) —
 (7.4)
Other income, net—
 (4.6) (0.1) —
 (4.7)
(Loss) income before income taxes$(0.5) $88.6
 $19.5
 $—
 $107.6
Benefit from (provision for) income taxes0.2
 (33.8) (9.9)
—
 (43.4)
Net (loss) income before equity in income from subsidiaries$(0.3) $54.8
 $9.6
 $—
 $64.2
Equity in income from subsidiaries, net of tax64.1
 —
 —
 (64.1) —
Net income (loss)$63.8
 $54.8
 $9.6
 $(64.1) $64.2
Net income attributable to non-controlling interests—
 —
 0.4
 —
 0.4
Net income (loss) attributable to MasTec, Inc.$63.8
 $54.8
 $9.2
 $(64.1) $63.8
Comprehensive income (loss)$65.2
 $54.9
 $11.1
 $(65.5) $65.7


For the Three Months Ended September 30, 2016MasTec, Inc. 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations 
Consolidated
MasTec, Inc.
Revenue$—
 $1,493.9
 $112.7
 $(20.4) $1,586.2
Costs of revenue, excluding depreciation and amortization—
 1,282.3
 107.2
 (20.4) 1,369.0
Depreciation and amortization—
 33.7
 8.9
 —
 42.6
General and administrative expenses0.6
 60.6
 5.9
 —
 67.1
Interest expense (income), net—
 28.6
 (15.5) —
 13.1
Equity in losses of unconsolidated affiliates—
 —
 —
 —
 —
Other (income) expense, net—
 (3.4) 2.3
 —
 (1.0)
(Loss) income before income taxes$(0.6) $92.1
 $3.9
 $—
 $95.3
Benefit from (provision for) income taxes0.2
 (33.4) (5.6) —
 (38.8)
Net (loss) income before equity in income from subsidiaries$(0.4) $58.7
 $(1.7) $—
 $56.5
Equity in income from subsidiaries, net of tax56.7
 —
 —
 (56.7) —
Net income (loss)$56.3
 $58.7
 $(1.7) $(56.7) $56.5
Net income attributable to non-controlling interests—
 —
 0.3
 —
 0.3
Net income (loss) attributable to MasTec, Inc.$56.3
 $58.7
 $(2.0) $(56.7) $56.3
Comprehensive income (loss)$54.5
 $58.7
 $(3.6) $(54.9) $54.7


CONDENSED UNAUDITED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in millions)
For the Nine Months Ended September 30, 2017MasTec, Inc. 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations 
Consolidated
MasTec, Inc.
Revenue$—
 $4,763.4
 $347.4
 $(106.7) $5,004.1
Costs of revenue, excluding depreciation and amortization—
 4,097.7
 332.6
 (106.7) 4,323.6
Depreciation and amortization—
 112.2
 26.2
 —
 138.4
General and administrative expenses1.7
 187.7
 12.6
 —
 202.0
Interest expense (income), net—
 91.5
 (46.5) —
 45.0
Equity in earnings of unconsolidated affiliates—
 —
 (15.1) —
 (15.1)
Other (income) expense, net—
 (9.9) 5.8
 —
 (4.1)
(Loss) income before income taxes$(1.7) $284.2
 $31.8
 $—
 $314.3
Benefit from (provision for) income taxes0.6
 (104.9) (21.9) —
 (126.2)
Net (loss) income before equity in income from subsidiaries$(1.1) $179.3
 $9.9
 $—
 $188.2
Equity in income from subsidiaries, net of tax187.5
 —
 —
 (187.5) —
Net income (loss)$186.4
 $179.3
 $9.9
 $(187.5) $188.2
Net income attributable to non-controlling interests—
 —
 1.8
 —
 1.8
Net income (loss) attributable to MasTec, Inc.$186.4
 $179.3
 $8.1
 $(187.5) $186.4
Comprehensive income (loss)$187.5
 $179.3
 $11.1
 $(188.6) $189.3

For the Nine Months Ended September 30, 2016MasTec, Inc. 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations 
Consolidated
MasTec, Inc.
Revenue$—
 $3,521.5
 $302.2
 $(30.9) $3,792.8
Costs of revenue, excluding depreciation and amortization—
 3,054.5
 298.0
 (30.9) 3,321.6
Depreciation and amortization—
 96.6
 25.6
 —
 122.2
General and administrative expenses1.7
 172.1
 21.2
 —
 195.0
Interest expense (income), net—
 83.8
 (45.9) —
 37.9
Equity in earnings of unconsolidated affiliates—
 —
 (3.5) —
 (3.5)
Other income, net—
 (12.7) (0.1) —
 (12.8)
(Loss) income before income taxes$(1.7) $127.2
 $6.9
 $—
 $132.4
Benefit from (provision for) income taxes0.6
 (47.3) (7.6) —
 (54.3)
Net (loss) income before equity in income from subsidiaries$(1.1) $79.9
 $(0.7) $—
 $78.1
Equity in income from subsidiaries, net of tax78.8
 —
 —
 (78.8) —
Net income (loss)$77.7
 $79.9
 $(0.7) $(78.8) $78.1
Net income attributable to non-controlling interests—
 —
 0.4
 —
 0.4
Net income (loss) attributable to MasTec, Inc.$77.7
 $79.9
 $(1.1) $(78.8) $77.7
Comprehensive income (loss)$69.2
 $79.9
 $(9.2) $(70.3) $69.6





CONDENSED UNAUDITED CONSOLIDATING BALANCE SHEETS (in millions)
As of September 30 2017MasTec, Inc. 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations 
Consolidated
MasTec, Inc.
Assets         
Total current assets$—
 $1,576.0
 $259.8
 $(88.1) $1,747.7
Property and equipment, net—
 600.8
 90.6
 —
 691.4
Goodwill and other intangible assets, net—
 1,187.9
 143.0
 —
 1,330.9
Investments in and advances to consolidated affiliates, net1,279.7
 848.0
 710.2
 (2,837.9) —
Other long-term assets15.8
 25.7
 130.6
 —
 172.1
Total assets$1,295.5
 $4,238.4
 $1,334.2
 $(2,926.0) $3,942.2
Liabilities and equity         
Total current liabilities$—
 $982.5
 $107.7
 $(88.1) $1,002.2
Long-term debt—
 1,181.1
 11.2
 —
 1,192.3
Other long-term liabilities—
 432.0
 12.7
 —
 444.7
Total liabilities$—
 $2,595.6
 $131.6
 $(88.1) $2,639.1
Total equity$1,295.5
 $1,642.8
 $1,202.6
 $(2,837.9) $1,303.0
Total liabilities and equity$1,295.5
 $4,238.4
 $1,334.2
 $(2,926.0) $3,942.2

As of December 31, 2016MasTec, Inc. 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations 
Consolidated
MasTec, Inc.
Assets         
Total current assets$—
 $1,256.3
 $175.8
 $(29.6) $1,402.5
Property and equipment, net—
 456.6
 92.5
 —
 549.1
Goodwill and other intangible assets, net—
 1,037.4
 138.2
 —
 1,175.6
Investments in and advances to consolidated affiliates, net1,083.9
 625.9
 861.2
 (2,571.0) —
Other long-term assets12.6
 25.3
 18.0
 —
 55.9
Total assets$1,096.5
 $3,401.5
 $1,285.7
 $(2,600.6) $3,183.1
Liabilities and equity         
Total current liabilities$—
 $759.7
 $109.9
 $(29.6) $840.0
Long-term debt—
 938.7
 22.7
 —
 961.4
Other long-term liabilities—
 256.2
 21.9
 —
 278.1
Total liabilities$—
 $1,954.6
 $154.5
 $(29.6) $2,079.5
Total equity$1,096.5
 $1,446.9
 $1,131.2
 $(2,571.0) $1,103.6
Total liabilities and equity$1,096.5
 $3,401.5
 $1,285.7
 $(2,600.6) $3,183.1



CONDENSED UNAUDITED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions)
For the Nine Months Ended September 30, 2017MasTec, Inc. 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations 
Consolidated
MasTec, Inc.
Net cash provided by (used in) operating activities$—
 $222.0
 $(43.4) $—
 $178.6
Cash flows from investing activities:         
Cash paid for acquisitions, net of cash acquired—
 (116.0) —
 —
 (116.0)
Capital expenditures—
 (70.0) (13.3) —
 (83.3)
Proceeds from sale of property and equipment—
 12.5
 1.1
 —
 13.6
Payments for other investments—
 (3.8) (73.3) —
 (77.1)
Proceeds from other investments—
 1.2
 12.2
 —
 13.4
Net cash used in investing activities$—
 $(176.1) $(73.3) $—
 $(249.4)
Cash flows from financing activities:         
Proceeds from credit facilities—
 1,988.1
 14.3
 —
 2,002.4
Repayments of credit facilities—
 (1,817.4) (23.0) —
 (1,840.4)
Repayments of other borrowings and capital lease obligations—
 (52.6) (8.3) —
 (60.8)
Payments of acquisition-related contingent consideration—
 (18.8) —
 —
 (18.8)
Distributions to non-controlling interests—
 —
 (1.3) —
 (1.3)
Proceeds from stock-based awards, net0.9
 —
 —
 —
 0.9
Other financing activities, net—
 (6.3) —
 —
 (6.3)
Net financing activities and advances (to) from consolidated affiliates(0.9) (131.9) 132.8
 —
 —
Net cash (used in) provided by financing activities$—
 $(38.9) $114.5
 $—
 $75.6
Effect of currency translation on cash—
 —
 0.2
 —
 0.2
Net increase (decrease) in cash and cash equivalents$—
 $7.0
 $(2.0) $—
 $5.1
Cash and cash equivalents - beginning of period$—
 $28.3
 $10.5
 $—
 $38.8
Cash and cash equivalents - end of period$—
 $35.3
 $8.5
 $—
 $43.8
For the Nine Months Ended September 30, 2016MasTec, Inc. 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations 
Consolidated
MasTec, Inc.
Net cash provided by operating activities$—
 $87.2
 $39.9
 $—
 $127.1
Cash flows from investing activities:         
Cash paid for acquisitions, net of cash acquired—
 (4.1) —
 —
 (4.1)
Capital expenditures—
 (84.0) (5.1) —
 (89.1)
Proceeds from sale of property and equipment—
 3.1
 3.7
 —
 6.8
Payments for other investments—
 (3.8) (5.0) —
 (8.9)
Proceeds from other investments—
 —
 1.1
 —
 1.1
Net cash used in investing activities$—
 $(88.8) $(5.3)
$—

$(94.1)
Cash flows from financing activities:         
Proceeds from credit facilities—
 1,093.8
 93.0
 —
 1,186.8
Repayments of credit facilities—
 (1,056.1) (93.8) —
 (1,149.9)
Repayments of other borrowings and capital lease obligations—
 (37.6) (12.4) —
 (50.0)
Payments of acquisition-related contingent consideration—
 (16.5) (3.3) —
 (19.8)
Proceeds from stock-based awards, net3.4
 —
 0.5
 —
 3.9
Other financing activities, net1.4
 —
 —
 —
 1.4
Net financing activities and advances (to) from consolidated affiliates(4.8) 15.1
 (10.3) —
 —
Net cash used in financing activities$—
 $(1.3) $(26.3) $—
 $(27.6)
Effect of currency translation on cash—
 —
 (1.0) —
 (1.0)
Net (decrease) increase in cash and cash equivalents$—
 $(2.9) $7.3
 $—
 $4.4
Cash and cash equivalents - beginning of period$—
 $4.7
 $0.3
 $—
 $5.0
Cash and cash equivalents - end of period$—
 $1.8
 $7.6
 $—
 $9.4



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts but are the intent, belief, or current expectations of our business and industry and the assumptions upon which these statements are based. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenuesrevenue and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions, dispositions or dispositions.other strategic arrangements. Words such as “anticipates,” “expects,” “intends,” “will,” “could,” “would,” “should,” “may,” “plans,” “believes,” “seeks,” “estimates,” “forecasts,” “targets” and variations of these words and negatives thereof and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Additionally, many of these risks and uncertainties could be amplified by the ongoing COVID-19 pandemic.
These risks and uncertainties include those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report and in our 20162021 Form 10-K, including those described under “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors,” as updated by Item 1A, “Risk Factors” in this report and other filings we make with the SEC. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. Readers are cautioned to not place undue reliance on forward-looking statements, which reflect management’s view only as of the date of this report. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis of our business, financial positioncondition and results of operations as of and for the three and nine month periods ended September 30, 20172022 and 2016.2021. This discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto in Item 1 of this Quarterly Report on Form 10-Q (this “Form 10-Q”), and the audited consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contained in our 20162021 Form 10-K. In this MD&A, “$” means U.S. dollars unless specified otherwise.
Recent Transactions
IEA Acquisition.On October 7, 2022, we completed the acquisition of Infrastructure and Energy Alternatives, Inc. (“IEA”), a premier clean energy and infrastructure services provider with expertise in renewable energy and heavy civil projects, as well as rail and environmental remediation services. We expect to include IEA within our Clean Energy and Infrastructure segment. We acquired IEA in a cash and stock transaction for an estimated $610 million in cash and approximately 2.8 million MasTec shares, including an estimated 128,000 shares to be issued upon the exercise of certain IEA warrants, which warrants remained outstanding following the acquisition. If and when the outstanding warrants are exercised, they will be settled with a combination of such shares of MasTec common stock and cash. The fair value of the 2.7 million shares issued on the Closing Date, based on the market price of MasTec common stock on such date, was approximately $173 million. The $610 million in cash includes an estimate of $2 million related to the exercise of these warrants. The cash portion of the IEA acquisition was funded with the New Term Loan Facility, described more fully herein, that provided for $700 million in term loans. Additionally, in connection with the IEA acquisition, we assumed $300 million of 6.625% IEA Senior Notes. On October 26, 2022, approximately $74.9 million in principal amount of 6.625% IEA Senior Notes were exchanged for the same principal amount of 6.625% MasTec Senior Notes in a private exchange offer and consent solicitation to certain holders 6.625% IEA Senior Notes. See Note 7 - Debt in the notes to the consolidated financial statements, which is incorporated by reference, for additional information regarding the New Term Loan Facility, 6.625% IEA Senior Notes and the 6.625% MasTec Senior Notes. We have incurred, and expect to continue to incur, certain acquisition and integration-related costs in connection with the IEA acquisition.
General Economic, Regulatory and Market Conditions
We have experienced, and may continue to experience, direct and indirect negative effects on our business and operations from negative economic, regulatory and market conditions, including recent inflationary effects on fuel prices, labor and materials costs, rising interest rates, potential recessionary impacts and supply chain disruptions that could negatively affect demand for future projects and/or delay existing project timing or cause increased project costs. We expect the remainder of 2022 to continue to be a dynamic macroeconomic environment, with elevated levels of cost inflation, as well as higher rates of interest. Rising interest rates and concerns regarding a possible economic recession could affect both our cost of capital and that of our customers, as well as our customers’ plans for capital investments and ongoing maintenance expenditures, which could negatively affect demand for our services. We may also experience negative effects from possible longer-term changes in consumer and customer behavior resulting from the effects of the COVID-19 pandemic. While the adverse effects of the COVID-19 pandemic began to subside in 2022, its effects vary, and economic conditions and business activities could be disrupted in the future, particularly as new variants arise. The extent to which general economic, regulatory and market 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.
We believe that our financial position, cash flows and operational strengths will enable us to manage the current uncertainties resulting from general economic, regulatory and market conditions, as well as afford us the flexibility to invest strategically in our efforts to maximize shareholder value. We carefully manage our liquidity and will continue to monitor any potential effects from changing economic, regulatory and market conditions on our financial results, cash flows and/or working capital and will take appropriate actions in efforts to mitigate any impacts.
30

Business Overview
We are a leading infrastructure construction company operating mainly throughout North America across a range of industries. Our primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy, utility and utilityother infrastructure, such as: power delivery services, including transmission and distribution, wireless, wireline/fiber install-to-the-home and customer fulfillment activities; petroleumpower generation, primarily from clean energy and renewable sources; pipeline infrastructure, including natural gas pipeline and distribution infrastructure; electrical utility transmission and distribution; conventional and renewable power generation; heavy civilcivil; and industrial infrastructure. Our customers are primarily in these industries. Including our predecessor companies, we have been in business for almostover 90 years. We offer our services primarily underLocations averaged approximately 730 for the MasTec service marktwelve month period ended September 30, 2022, and as of September 30, 2017,2022, we had approximately 21,500 employees760 locations. Employees averaged approximately 29,000 for the twelve month period ended September 30, 2022 and 415 locations.as of September 30, 2022. We offer our services under the MasTec® and other service marks. We have been consistently ranked among the top specialty contractors by Engineering News-Record for the past several years.
We provide our services to a diversified base of customers. We often providecustomers and a significant portion of our services are provided under master service and other service agreements, which are generally multi-year agreements. 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. Revenue from non-recurring, project specific work may experience greater variability than master service and other service agreement work due to the need to replace the revenue as projects are completed. If we are not able to replace work from completed projects with new project work, we may not be able to maintain our current revenue levels or our current level of capacity and resource utilization. We actively review our backlog of project work and take appropriate action to minimize such exposure.
We manage our operations under five operating segments, which represent our five reportable segments: (1) Communications; (2) Clean Energy and Infrastructure; (3) Oil and Gas; (3) Electrical Transmission; (4) Power Generation and IndustrialDelivery; and (5) Other. This structure is generally focused on broad end-user markets for our labor-based construction services. In the first quarter of 2022, we began integrating the acquisition of HMG. The HMG acquisition was completed on December 30, 2021, with its initial balance sheet reported within our Power Delivery segment. During the first quarter of 2022, we reported portions of HMG’s operations within our Power Delivery, Communications and Oil and Gas segments, as appropriate, and HMG’s corporate functions within our Corporate results. Accordingly, HMG’s December 31, 2021 balance sheet information was recast to conform with the new reporting structure. See Note 13 - Segments and Related Information and Note 14 - Commitments and Contingencies in the notes to the condensed unaudited consolidated financial statements, which are incorporated by reference, for additional information regarding our segment related information as well as operating results by segmentreporting and significant customer concentrations.
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. Our estimated backlog also includes amounts under master service and other service agreements and includes our proportionate share of estimated revenue from proportionately consolidated non-controlled contractual joint ventures. 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. We expect toBased on current expectations of our customers’ requirements, we anticipate that we will realize approximately 25%22% of our estimated September 30, 2017 estimated2022 backlog in 2017.2022. The following table presents 18-month estimated backlog by reportable segment as of the dates indicated:

Reportable Segment (in millions):September 30,
2022		June 30,
2022		September 30,
2021
Communications$5,024 $5,031 $4,469 
Clean Energy and Infrastructure1,933 1,896 1,570 
Oil and Gas1,513 1,456 1,166 
Power Delivery2,757 2,622 1,318 
Other— — — 
Estimated 18-month backlog$11,227 $11,005 $8,523 

Reportable Segment (in millions):September 30,
2017		 June 30,
2017		 September 30,
2016
Communications$3,505
 $3,375
 $3,125
Oil and Gas907
 1,506
 1,134
Electrical Transmission268
 295
 269
Power Generation and Industrial331
 85
 116
Other3
 4
 7
Estimated 18-month backlog$5,014
 $5,265
 $4,651
Approximately 65%As of September 30, 2022, 60% of our backlog as of September 30, 2017 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. Most of these agreements can be 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 regulatory factorsor cancellations, including from economic or other conditions, including supply chain disruptions, inflationary effects, climate-related matters, political unrest, such as the ongoing military conflict in Ukraine, effects of public health matters and/or other project-related factors. These changeseffects, among others, could cause estimated revenue to be realized in periods later than originally expected, or not at all. In the past, we haveWe occasionally experiencedexperience postponements, cancellations and reductions in expected future work from master service agreements and/or construction projects due to changes in our customers’ spending plans, as well as on construction projects due to market volatility, andchanges in governmental permitting, regulatory delays and/or other factors. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the accuracy ofestimates included in our estimates.forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.
Subsequent to September 30, 2017, we were granted a large pipeline construction project award with an expected contract value of over $1.5 billion, which is expected to be reflected in backlog at year-end 2017.
Backlog is not a term recognized under U.S. GAAP; however, it is a common measurement used in our industry. 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 consolidated financial statements, which is incorporated by reference. As of September 30, 2022, total 18-month backlog differed from the amount of our remaining performance obligations due primarily to the inclusion of $6.9 billion of estimated future revenue under master service and other service agreements within our backlog estimates, as described above, and the exclusion of approximately $1.0 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. Backlog expected to be realized in 2022 differs from the amount of our remaining performance obligations expected to be recognized for the same period due primarily to the inclusion
31

of approximately $0.9 billion of estimated future revenue under master service and other service agreements that is included within the related backlog estimate.
Economic, Industry and Market Factors
We closely monitor the effects thatof changes in economic and market conditions may have on our customers. Generalcustomers, including the potential effects of inflation, recessionary impacts, regulatory and climate-related matters, the ongoing military conflict in Ukraine and the effects of public health matters. Changes in general economic and market conditions can negatively affect demand for our customers’ products and services, which can lead to rationalization ofincrease or decrease our customers’ planned capital and maintenance budgets in certain end-markets. FluctuationsMarket, regulatory and industry factors could affect demand for our services, or the cost to provide such services, including (i) changes to our customers’ capital spending plans, including any potential effects from inflationary, recessionary impacts or supply chain issues, rising interest rates or public health matters; (ii) new or changing regulatory requirements, governmental policy changes, and customer or industry initiatives, including with respect to climate change, sustainability and related environmental concerns, and changes in governmental permitting; (iii) economic, political or other market developments or uncertainty, such as the ongoing military conflict in Ukraine and/or access to capital for customers in the industries we serve; (iv) changes in technology, tax and other incentives; and (v) mergers, acquisitions or other business transactions among the customers we serve.
Changes in demand for, and fluctuations in market prices for, oil, gas and other fuelenergy sources 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. The availability of transportation and transmission capacity can also affect demand for our services, in particular, onincluding energy generation, electric grid and pipeline and power generation construction services.projects. These fluctuations, as well as the highly competitive nature of our industry, can result andin changes in the past, have resulted, in lower bids and lower profit onlevels of activity, the project mix, and/or the profitability of the services we provide. In the face of increased pricing pressure or other market developments that have had, and could continue to have, a negative effect on our profitability, such as rising fuel, labor and materials costs, to the extent that we are unable to pass these costs through to our customers, we strive to maintain our profit margins through productivity improvements, and cost reduction programs. Other market, regulatory and industry factors, such as (i) changes to our customers’ capital spending plans; (ii) mergers and acquisitions among the customers we serve; (iii) access to capital for customers in the industries we serve; (iv) new programs and/or changing regulatory requirements or other governmental policy uncertainty; (v) economic, market or political developments; and (vi) changes in technology, tax and other incentives could also increase or reduce demand for our services.business streamlining efforts. While we actively monitor economic, industry and market factors that could affect our business, we cannot predict the effect that changes in such factors maycould have on our future results of operations, liquidity and cash flows, and we may be unable to fully mitigate, or benefit from, such changes.
ImpactEffect of Seasonality and Cyclical Nature of Business
Our revenue and results of operations can be subject to seasonal and other variations. These variations are influenced by weather, customer spending patterns, bidding seasons, project schedules, andholidays, regulatory matters and/or timing, in particular, for large non-recurring projects, and holidays.the effects of market uncertainty or disruptions, as described within “Economic, Industry and Market Factors,” above. Typically, our revenue is lowest inat the first quarterbeginning of the year and during the winter months because cold, snowy or wet conditions cause project delays.can delay projects. 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 second quarter is typically higher thanregions in the first quarter, as some projects begin,which we operate, but continued cold and wet weather can often impactaffect second quarter productivity. The third and fourth quarters are typically the most productive quarters of the year, as a greater number of projects are underway and weather is normally more accommodating to construction projects. 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 generally has a positive impacteffect on our revenue. However, the holiday season and inclement weather can cause delays, which can reduce revenue and increase costs on affected projects. Any quarter may be positively or negatively affected by adverse or unusual weather patterns and/or the effects of climate-related matters, including warm winter weather, excessive rainfall, flooding or natural catastrophes such as wildfires, hurricanes or other severe weather, making it difficult to predict quarterly revenue and margin variations.
Additionally, our industry can be highly cyclical. Fluctuations in end-user demand within the industries we serve, or in the supply of services within those industries, can impactaffect demand for our services. As a result, our business may be adversely affected by industry declines or by delays in new projects. 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 period,quarter, even if not in total.for the full year. In addition, revenue from master service and other service agreements, while generally predictable, can be subject to volatility. 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;influences, including climate-related matters; and acquisitions, dispositions or strategic investments/other arrangements can also materially affect quarterly results in a given period. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.
Critical Accounting Estimates
This discussion and analysis of our financial condition and results of operations is based upon our condensed unaudited 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 condensed unaudited consolidated financial statements and the accompanying notes.


We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, including the resultspotential future effects of whichmacroeconomic trends and events, such as rising inflation and interest rate levels; recessionary impacts; climate-related matters; market, regulatory and industry factors; global events, such as the ongoing military conflict in Ukraine; and public health matters. These estimates form the basis offor making judgments about our operating results including the results of percentage-of-completion projects, and the carrying values of assets and liabilities, that are not readily apparent from other sources. Given that management estimates, by their nature, involve judgments regarding future uncertainties, actual results maycould 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. Refer to Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to our condensed unaudited consolidated financial statements, which is incorporated by reference, and to our 2016 Form 10-K for discussion of our significant accounting policies. During the third quarter of 2017, we performed a quantitative assessment of the goodwill and an indefinite-lived pre-qualification intangible asset associated with certain of our operating segments in conjunction with our quarterly review of reporting units for indicators of impairment. Based on the results of these assessments, we determined that the estimated fair value of our Electrical Transmission operating segment exceeded its carrying value by approximately 10%, and that the fair values of two of our reporting units and the indefinite-lived pre-qualification intangible asset in our Oil and Gas segment, for which the carrying values totaled approximately $130 million, exceeded their carrying values by approximately 10% for each. Significant changes in assumptions or estimates, such as a reduction in profitability and/or cash flows, could result in non-cash goodwill and indefinite-lived intangible asset impairment charges in the future.
We believe that our accounting estimates pertaining to: the recognition of revenue recognition for percentage-of-completion projects, includingand project profit or loss, which we define as project revenue, less project costs of revenue, including project-related depreciation; allowancesdepreciation, in particular, on construction contracts accounted for doubtful accounts;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 business acquisitions, valuations of goodwill, intangible assets and indefinite-lived intangible assets; estimated liabilities for future earn-out obligations; fair values of financial instruments;acquisition-related contingent consideration; equity investments; income taxes; self-insurance liabilities; and litigation and other contingencies, are
32

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. 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 consolidated financial statements, which is incorporated by reference, and to our 2021 Form 10-K for a more detailed discussion of our significant accounting policies and critical accounting estimates. As described in more detail in Note 1 - Business, Basis of Presentation and Significant Accounting Policies, our consolidated financial statements include certain reclassifications of prior period amounts to conform with the current period presentation. For details of our third quarter 2022 quarterly review for indicators of impairment, refer to Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net, in the notes to the consolidated financial statements, which is incorporated by reference.
Results of Operations
Comparison of Quarterly 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). Our consolidated results of operations are not necessarily comparable from period to period due to the impacteffect of recent acquisitions and certain other items, which are described in the comparison of results section below. 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.
For the Three Months Ended
September 30
 
For the Nine Months Ended
September 30
For the Three Months Ended September 30,
For the Nine Months Ended
September 30,
2017 2016 2017 20162022202120222021
Revenue$1,955.8
 100.0 % $1,586.2
 100.0 % $5,004.1
 100.0 % $3,792.8
 100.0 %Revenue$2,513.5 100.0 %$2,404.3 100.0 %$6,769.7 100.0 %$6,142.4 100.0 %
Costs of revenue, excluding depreciation and amortization1,726.2
 88.3 % 1,369.0
 86.3 % 4,323.6
 86.4 % 3,321.6
 87.6 %Costs of revenue, excluding depreciation and amortization2,187.8 87.0 %2,057.3 85.6 %5,949.3 87.9 %5,246.4 85.4 %
Depreciation and amortization50.1
 2.6 % 42.6
 2.7 % 138.4
 2.8 % 122.2
 3.2 %
DepreciationDepreciation91.3 3.6 %95.4 4.0 %263.5 3.9 %262.1 4.3 %
Amortization of intangible assetsAmortization of intangible assets28.0 1.1 %23.4 1.0 %81.2 1.2 %54.5 0.9 %
General and administrative expenses66.4
 3.4 % 67.1
 4.2 % 202.0
 4.0 % 195.0
 5.1 %General and administrative expenses125.1 5.0 %86.9 3.6 %404.2 6.0 %239.0 3.9 %
Interest expense, net17.6
 0.9 % 13.1
 0.8 % 45.0
 0.9 % 37.9
 1.0 %Interest expense, net26.9 1.1 %13.1 0.5 %62.3 0.9 %39.4 0.6 %
Equity in earnings of unconsolidated affiliates(7.4) (0.4)% —
 — % (15.1) (0.3)% (3.5) (0.1)%Equity in earnings of unconsolidated affiliates(6.1)(0.2)%(8.7)(0.4)%(19.4)(0.3)%(23.6)(0.4)%
Other income, net(4.7) (0.2)% (1.0) (0.1)% (4.1) (0.1)% (12.8) (0.3)%
Other expense (income), netOther expense (income), net0.2 0.0 %(3.0)(0.1)%(1.9)(0.0)%(13.7)(0.2)%
Income before income taxes$107.6
 5.5 % $95.3
 6.0 % $314.3
��6.3 % $132.4
 3.5 %Income before income taxes$60.3 2.4 %$140.0 5.8 %$30.5 0.4 %$338.3 5.5 %
Provision for income taxes(43.4) (2.2)% (38.8) (2.4)% (126.2) (2.5)% (54.3) (1.4)%
(Provision for) benefit from income taxes(Provision for) benefit from income taxes(11.1)(0.4)%(27.6)(1.1)%0.1 0.0 %(84.0)(1.4)%
Net income$64.2
 3.3 % $56.5
 3.6 % $188.2
 3.8 % $78.1
 2.1 %Net income$49.2 2.0 %$112.5 4.7 %$30.5 0.5 %$254.3 4.1 %
Net income attributable to non-controlling interests0.4
 0.0 % 0.3
 0.0 % 1.8
 0.0 % 0.4
 0.0 %Net income attributable to non-controlling interests0.3 0.0 %1.4 0.1 %0.4 0.0 %2.1 0.0 %
Net income attributable to MasTec, Inc.$63.8
 3.3 % $56.3
 3.5 % $186.4
 3.7 % $77.7
 2.0 %Net income attributable to MasTec, Inc.$48.9 1.9 %$111.1 4.6 %$30.1 0.4 %$252.2 4.1 %
We review our operating results by reportable segment. See Note 13 - Segments and Related Information in the notes to the condensed unaudited consolidated financial statements, which is incorporated by reference. Our reportable segments are: (1) Communications; (2) Clean Energy and Infrastructure; (3) Oil and Gas; (3) Electrical Transmission; (4) Power Generation and IndustrialDelivery; and (5) Other. Management’s review of reportable segment results includes analyses of trends in revenue, EBITDA and EBITDA margin. We calculate EBITDA for segment reporting purposes consistentis calculated consistently with our consolidated EBITDA calculation. 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 below. The following table presents revenue, EBITDA and EBITDA margin by reportable segment for the periods indicated (dollar amounts in millions):

33

Revenue EBITDA and EBITDA MarginRevenueEBITDA and EBITDA Margin
For the Three Months Ended September 30 For the Nine Months Ended September 30 For the Three Months Ended September 30 For the Nine Months Ended September 30For the Three Months Ended September 30,
For the Nine
Months Ended September 30,
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
Reportable Segment:2017 2016 2017 2016 2017 2016 2017 2016Reportable Segment:2022202120222021
2022 (a)
202120222021
Communications$610.5
 $624.3
 $1,762.2
 $1,728.0
 $65.3
 10.7% $62.8
 10.1 % $173.2
 9.8% $190.9
 11.0 %Communications$888.9 $670.3 $2,375.1 $1,869.3 $109.9 12.4 %$71.6 10.7 %$234.5 9.9 %$193.1 10.3 %
Clean Energy and InfrastructureClean Energy and Infrastructure563.2 518.4 1,493.5 1,350.3 24.6 4.4 %13.8 2.7 %30.2 2.0 %40.2 3.0 %
Oil and Gas1,161.0
 736.0
 2,757.2
 1,454.3
 108.1
 9.3% 117.8
 16.0 % 356.1
 12.9% 187.6
 12.9 %Oil and Gas375.8 858.4 927.9 2,205.3 49.2 13.1 %170.6 19.9 %133.4 14.4 %476.2 21.6 %
Electrical Transmission81.8
 101.7
 277.3
 283.6
 4.5
 5.5% (8.3) (8.1)% 11.2
 4.0% (42.0) (14.8)%
Power Generation and Industrial96.9
 123.6
 204.1
 324.7
 9.3
 9.6% 6.1
 4.9 % 14.8
 7.3% 13.8
 4.3 %
Power DeliveryPower Delivery688.4 365.3 1,985.4 731.4 63.1 9.2 %34.9 9.5 %150.6 7.6 %47.8 6.5 %
Other10.6
 7.6
 14.2
 14.9
 10.1
 95.2% (3.1) (40.6)% 11.6
 81.7% (2.6) (17.4)%Other— — — — 5.6 NM7.5 NM20.0 NM23.3 NM
Eliminations(5.0) (7.0) (10.9) (12.7) —
 —
 —
 —
 —
 —
 —
 —
Eliminations(2.8)(8.1)(12.2)(13.9)— — — — — — — — 
Corporate—
 —
 —
 —
 (22.0) NA (24.3) NA (69.2) NA (55.1) NACorporate— — — — (45.9)— (26.6)— (131.2)— (86.3)— 
Consolidated Results$1,955.8
 $1,586.2
 $5,004.1
 $3,792.8
 $175.3
 9.0% $151.0
 9.5 % $497.7
 9.9% $292.6
 7.7 %Consolidated Results$2,513.5 $2,404.3 $6,769.7 $6,142.4 $206.5 8.2 %$271.8 11.3 %$437.5 6.5 %$694.3 11.3 %
The following discussion and analysis of our results of operations should be read in conjunction with our condensed unaudited consolidated financial statements and notes thereto in Item 1 of this Quarterly Report on Form 10-Q (this “Form 10-Q”).NM - Percentage is not meaningful
Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016
Revenue.(a)     For the three month period ended September 30, 2017,2022, Communications, Oil and Gas, Power Delivery and Corporate EBITDA included $0.5 million, $1.1 million, $20.4 million and $11.2 million, respectively, of acquisition and integration costs related to our recent acquisitions, and for the nine month period ended September 30, 2022, included $2.4 million, $4.5 million, $34.5 million and $18.0 million, respectively, of such costs.
Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021
Revenue. For the three month period ended September 30, 2022, consolidated revenue increased to $1,956totaled $2,514 million from $1,586as compared with $2,404 million for the same period in 2021, an increase of $370$109 million, or 23%5%. Revenue increased in our Power Delivery segment by $323 million, or 88%, in our Communications segment by $219 million, or 33%, and in our Clean Energy and Infrastructure segment by $45 million, or 9%, whereas revenue decreased in our Oil and Gas segment by $483 million, or 56%. Acquisitions contributed $570 million of increased revenue for the three month period ended September 30, 2022, whereas organic revenue decreased by approximately $461 million, or 19%, as compared with the same period in 2016, driven largely by our Oil and Gas segment, for which revenue increased by $425 million, or 58%, offset, in part by lower revenue in our Power Generation and Industrial, Electrical Transmission and Communications segments, of $61 million in total, or 7%. Organic revenue increased by approximately $308 million, or 19%, and acquisitions contributed $62 million in revenue.2021.
Communications Segment. Communications revenue was $610$889 million for the three month period ended September 30, 2017,2022, as compared with $624$670 million for the same period in 2016, a decrease2021, an increase of $14$219 million, or 2%33%. Acquisitions contributed $38$26 million of revenue which was offset by a decrease in organic revenue of $51 million, or 8%. The decrease in organic revenue was primarily driven by lower levels of install-to-the-home and customer fulfillment revenue in 2017, as previously disclosed.
Oil and Gas Segment. Oil and Gas revenue was $1,161 million for the three month period ended September 30, 2017,2022, and organic revenue increased by approximately $193 million, or 29%, as compared with $736 million for the same period in 2016, an increase of $425 million, or 58%.2021. The increase in Oil and Gasorganic revenue was driven primarily by an increase in multiple large long-haul pipeline construction projects.higher levels of wireless and wireline project activity.
Electrical TransmissionClean Energy and Infrastructure Segment. Electrical TransmissionClean Energy and Infrastructure revenue was $82$563 million for the three month period ended September 30, 2017,2022 as compared with $102$518 million for the same period in 2016, a decrease2021, an increase of $20$45 million, or 20%9%. Acquisitions contributed $2 million of revenue for the three month period ended September 30, 2022, and organic revenue increased by approximately $42 million, or 8%, drivenas compared with the same period in 2021, due primarily byto higher levels of project activity and timing.mix.
Power GenerationOil and IndustrialGas Segment.Power Generation Oil and IndustrialGas revenue was $97$376 million for the three month period ended September 30, 2017,2022, as compared with $124$858 million for the same period in 2016,2021, a decrease of $27$483 million, or 22%56%. AcquisitionsFor the three month period ended September 30, 2022, acquisitions contributed $25$143 million of revenue, which was offsetwhereas organic revenue decreased by $626 million, or 73%, as compared with the same period in 2021, primarily due to a decrease in organic revenue of $51 million, or 42%. The decrease in organic revenue was driven primarily bylarge diameter project activity, as well as lower levels of renewable power project activity and timing.for other projects.
OtherPower Delivery Segment. Other segmentPower Delivery revenue totaled $11was $688 million for the three month period ended September 30, 2017,2022, as compared with $8$365 million for the same period in 2016,2021, an increase of approximately $3$323 million, or 40%88%. For the three month period ended September 30, 2022, acquisitions contributed $398 million of revenue, whereas organic revenue decreased by approximately $75 million, or 21%, drivenas compared with the same period in 2021, primarily by increased levelsdue to timing and mix of activity from our oil and gas operations in Mexico, offset by a decrease in revenue from a proportionately consolidated non-controlled Canadian joint venture.project activity.
Costs of revenue, excluding depreciation and amortization. Costs of revenue, excluding depreciation and amortization, increased by $357approximately $130 million, or 26%6%, to $1,726$2,188 million for the three month period ended September 30, 2017, as compared with $1,3692022 from $2,057 million for the same period in 2016.2021. Higher levels of revenue contributed $319 million of an increase of $93 million in costs of revenue, excluding depreciation and amortization, whereas decreasedand reduced productivity resulted incontributed an increase of approximately $38$37 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue increased by approximately 200150 basis points, from 86.3%85.6% of revenue for the three month period ended September 30, 20162021 to 88.3%87.0% of revenue for the same period in 2017.2022. The basis point increase was drivendue primarily to segment revenue mix, including lower levels of revenue for our oil and gas operations, partially offset by reducedcertain project efficiencies and mix in our Oilother operations, notwithstanding the effects of inflation on labor, fuel and Gas segment, offset, in part, by improved project efficiencies and mix in our Communications, Electrical Transmission and Power Generation and Industrial segments. Additionally, costs of revenue, excluding depreciation and amortization, improved in our Other segment for the three month period ended September 30, 2017 as compared with the same period in 2016 due to a reduction in project losses on a proportionately consolidated non-controlled Canadian joint venture, which totaled $0.4 million for the three month period ended September 30, 2017 as compared with $5 million in the prior year period. This project, which is managed by a third party and for which we have minimal direct construction involvement, has experienced delays, which has extended the timeline and resulted in project losses.materials costs.
Depreciation.Depreciation and amortization. Depreciation and amortization was $50$91 million, or 2.6%3.6% of revenue, for the three month period ended September 30, 20172022, as compared with $43$95 million, or 2.7%4.0% of revenue, for the same period in 2016, an increase2021, a decrease of $8approximately $4.1 million, or 18%4%. Acquisitions contributed $4$24 million of incremental depreciation and amortization for the three month period ended September 30, 2017 as compared with the same period in 2016.2022, whereas organic depreciation decreased by $28 million, or 29%, due primarily to lower levels of capital investments related to pipeline project activity. As a percentage of revenue, depreciation and amortization decreased slightly due primarily to higher levelsby approximately 30 basis points.
Amortization of revenue.

General and administrative expenses. General and administrative expenses were $66intangible assets. Amortization of intangible assets was $28 million, or 3.4%1.1% of revenue, for the three month period ended September 30, 2017,2022, as compared with $67$23 million, or 4.2%1.0% of revenue, for the same period in 2016, a decrease2021, an increase of $1$5 million, or 1%20%. Acquisitions
34

contributed $10 million of amortization for the three month period ended September 30, 2022 whereas organic amortization decreased by approximately $5 million, or 21%, due primarily to the effects of timing of amortization for certain intangible assets. As a percentage of revenue, amortization of intangible assets increased by approximately 10 basis points.
General and administrative expenses. General and administrative expenses totaled $125 million, or 5.0% of revenue, for the three month period ended September 30, 2022 as compared with $87 million, or 3.6% of revenue, for the same period in 2021, for an increase of $38 million, or 44%. Acquisitions contributed $6$35 million of incremental general and administrative expenses for the three month period ended September 30, 2017, whereas2022, and organic general and administrative expenses in the prior year period included certain restructuring charges ofincreased by approximately $5$3 million, related to our efforts to streamline our western Canadian oil and gas and our electrical transmission operations, which efforts were substantially completed in 2016. Excluding the effects of the above mentioned items, administrative expenses decreased by $2 millionor 4%, as compared with the same period in the prior year, primarily due primarily to the timing ofincreases in legal matterscosts, professional fees, information technology and other settlements.administrative expenses, including certain acquisition and integration costs, partially offset by an increase in gains on sales of assets, net. Overall, general and administrative expenses, including approximately $9 million of acquisition and integration costs, increased by approximately 140 basis points as a percentage of revenue decreased by 80 basis points for the three month period ended September 30, 2017 as compared with the same period in the prior year, due primarily to improvements in overhead cost utilization from higher levels of revenue.
Interest expense, net. Interest expense, net of interest income, was $18 million, or 0.9% of revenue for the three month period ended September 30, 20172022 as compared with the same period in 2021.
Interest expense, net. Interest expense, net of interest income, was approximately $27 million, or approximately 1.1% of revenue, for the three month period ended September 30, 2022, as compared with approximately $13 million, or 0.8%0.5% of revenue, for the same period in 2016.2021, an increase of $14 million, or approximately 105%. The increase in interest expense, wasnet, resulted primarily from credit facility activity, which increased by approximately $11 million due to higher levels of financing costs,average balances, including discount charges on financing arrangements,from indebtedness incurred in connection with acquisition and share repurchase activity, and higher average interest rates as well ascompared with the same period in 2021, due primarily to an increase in market interest rates. In addition, interest expense on our Credit Facility in the third quarterfrom accounts receivable financing arrangements increased by approximately $2 million due to a combination of 2017 as compared with 2016.higher average balances from increased levels of activity and higher average interest rates.
Equity in earnings of unconsolidated affiliates. affiliates, net. Equity in earnings or losses of unconsolidated affiliates includes our share of income or losses from equity investees. For the three month periodperiods ended September 30, 2017,2022 and 2021, equity in earnings from unconsolidated affiliates, was $7net, totaled approximately $6 million and $9 million, respectively. Equity in earnings from unconsolidated affiliates, net, related primarily to our investments in the Waha JVs, which commenced operationsand, to a lesser extent, to our investments in 2017.certain telecommunications and other entities.
Other income,expense, net. Other income,expense, net, consists primarily of gains or losses from saleschanges to estimated Earn-out accruals and certain contingent payments to the former owners of an acquired business; certain legal/other settlements; gains or losses, or changes in estimated recoveries from certain assets and investments, certain legal/investments; and other settlements, gainsmiscellaneous income or losses from changes to estimated earn-out accruals, and certain restructuring charges related to losses on disposalexpense. Other expense, net, was $0.2 million for the three month period ended September 30, 2022, as compared with other income, net of excess fixed assets.$3 million for the same period in 2021. For the three month period ended September 30, 2017,2022, other expense, net, included approximately $3 million of acquisition and integration-related financing costs, offset, in part, by approximately $1 million of income from changes in the fair value of additional contingent payments to the former owners of an acquired business and approximately $1 million of other miscellaneous income. For the three month period ended September 30, 2021, other income, net, wasincluded approximately $4 million of income, net, from changes to estimated Earn-out accruals, $7 million of expense, net, from changes in the fair value of certain investments and income from strategic arrangements and $5 million of income from a third quarter 2021 legal settlement.
Provision for income taxes. Income tax expense was $11 million for the three month period ended September 30, 2022 as compared with $1$28 million for the same period in the prior year. OtherPre-tax income net, for the three month period ended September 30, 2017 included approximately $3 million of income from changesdecreased to estimated earn-out accruals. Gains on sales of equipment, net, totaled $2 million and $1 million for the three month periods ended September 30, 2017 and 2016, respectively.
Provision for income taxes. Income tax expense was $43$60 million for the three month period ended September 30, 2017 as compared with $392022 from $140 million for the same period in the prior year. In the third quarter of 2017, we had pre-tax income of $108 million as compared with $95 million for the same period in the prior year. Our effective tax rate for2021. For the three month period ended September 30, 20172022, our effective tax rate decreased versusto 18.4% from 19.7% for the same period in 2016,2021, due primarily due to a benefit related to adjustments resulting from finalization of the Company’s 2021 tax credits that were recognized duringreturns in the third quarter of 2017, offset by2022 that was larger than the effectbenefit related to adjustments resulting from finalization of lossesthe Company’s 2020 tax returns in foreign jurisdictions.the third quarter of 2021.
Analysis of EBITDA by Segment
Communications Segment. EBITDA for our Communications segment was $65$110 million, or 10.7%12.4% of revenue, for the three month period ended September 30, 2017,2022, as compared with $63$72 million, or 10.1%10.7% of revenue, for the same period in 2016,2021, an increase of approximately $3$38 million, or 4%53%. TheHigher levels of revenue contributed an increase wasin EBITDA of $23 million. As a percentage of revenue, EBITDA increased by 170 basis points, or approximately $15 million, due primarily due to production efficiencies.project efficiencies, notwithstanding the effects of inflation on labor, fuel and materials costs, offset, in part, by the effects of acquisition and integration costs.
OilClean Energy and GasInfrastructure Segment. EBITDA for our OilClean Energy and GasInfrastructure segment was $108$25 million, or 9.3%4.4% of revenue, for the three month period ended September 30, 2017,2022, as compared with $118EBITDA of $14 million, or 16.0%2.7% of revenue, for the same period in 2016, a decrease in EBITDA2021, an increase of $10approximately $11 million, or approximately 8%78%. Higher levels of revenue contributed an increase in EBITDA of $68$1 million. As a percentage of revenue, EBITDA increased by approximately 170 basis points, or approximately $10 million, which was offset by a decrease in EBITDA from lower EBITDA margins due primarily to reduced project efficiencies, notwithstanding the effects of inflation on labor, fuel and mix.materials costs.
Electrical TransmissionOil and Gas Segment. EBITDA for our Electrical TransmissionOil and Gas segment was $5$49 million, or 5.5%13.1% of revenue, for the three month period ended September 30, 2017,2022, as compared with EBITDA of negative $8$171 million, or negative 8.1%19.9% of revenue, for the same period in 2016, for an improvement2021, a decrease of approximately $121 million, or 71%. Lower levels of revenue contributed a decrease in EBITDA of $13$96 million, and reduced productivity contributed a decrease in EBITDA of approximately $25 million. The improvement in Electrical Transmission EBITDA wasmargins decreased by approximately 680 basis points due primarily to a combinationinefficiencies resulting from lower levels of revenue and project efficienciesmix, as well as the effects of inflation on labor, fuel and mix, the non-recurrence of approximately $4 million of restructuring charges for the three month period ended September 30, 2016,materials costs and improved costacquisition and overhead utilization.integration costs.
Power Generation and IndustrialDelivery Segment. EBITDA for our Power Generation and IndustrialDelivery segment was $9$63 million, or 9.6%9.2% of revenue, for the three month period ended September 30, 2017,2022, as compared with EBITDA of $6$35 million, or 4.9%9.5% of revenue, for the same period in 2016,2021, an improvementincrease in EBITDA of $3approximately $28 million, or 52%81%. Higher levels of revenue contributed an increase in EBITDA of $31 million. As a percentage of revenue, segment EBITDA improveddecreased by approximately 47040 basis points, or $3 million primarily due to project inefficiencies, acquisition and integration costs and the effect of inflation on labor, fuel and materials costs.
35

Other Segment. EBITDA from Other businesses was $6 million for the three month period ended September 30, 2022 as compared with $8 million for the same period in 2021. EBITDA from Other businesses relates primarily to equity in earnings from our investments in the Waha JVs, and to a lesser extent, equity in losses from other investments.
Corporate. Corporate EBITDA was negative $46 million for the three month period ended September 30, 2022, as compared with EBITDA of negative $27 million for the same period in 2021, for a decrease in EBITDA of approximately $19 million. Acquisitions, including certain acquisition and integration costs, contributed $8 million of Corporate expenses for the three month period ended September 30, 2022. For the three month period ended September 30, 2022, Corporate EBITDA also included approximately $1 million of income from changes in the fair value of additional contingent payments to the former owners of an acquired business. For the three month period ended September 30, 2021, Corporate EBITDA included approximately $7 million of expense, net, from changes in the fair value of certain investments and income from strategic arrangements, $4 million of income, net, from changes to estimated Earn-out accruals and $5 million of income from a third quarter 2021 legal settlement. For the three month period ended September 30, 2022, Corporate expenses not related to the above-described items increased by approximately $10 million as compared with the same period in the prior year, due primarily to improved project efficienciesincreases in compensation expense, legal and mix, offset, in part, by reduced cost and overhead utilization due to lower revenue.
Other Segment. EBITDA from Other businesses was $10 million for the three month period ended September 30, 2017, as compared with EBITDA of negative $3 million for the same period in 2016, an improvement of $13 million. Other segment EBITDA for the three month period ended September 30, 2017 included $7 million of equity in earnings from unconsolidated affiliates related to our investments in the Waha JVs, which commenced operations in the first half of 2017, and, for the three month periods ended September 30, 2017 and 2016, included losses of $0.4 million and $5 million, respectively, on a proportionately consolidated non-controlled Canadian joint venture. The remaining improvement in Other segment EBITDA was driven by an increase in EBITDA from our oil and gas operations in Mexico.
Corporate. Corporate EBITDA was negative $22 million for the three month period ended September 30, 2017, as compared with EBITDA of negative $24 million for the same period in 2016, for an increase in EBITDA of $2 million. Corporate EBITDA for the three month period ended September 30, 2017 included approximately $3 million of income from changes to estimated earn-out accruals. For the three month period ended September 30, 2017, other corporate expenses increased as compared with the prior year period primarily as a result of costs related to the timing of legal mattersprofessional fees and other settlements.

administrative expenses, including certain acquisition and integration costs.
Nine Months Ended September 30, 20172022 Compared to Nine Months Ended September 30, 20162021
Revenue. For the nine month period ended September 30, 2017,2022, consolidated revenue increased to $5,004totaled $6,770 million from $3,793as compared with $6,142 million for the same period in 2021, an increase of $1,211$627 million, or 32%10%. Revenue increased in our Power Delivery segment by $1,254 million, or 171%, in our Communications segment by $506 million, or 27%, and in our Clean Energy and Infrastructure segment by $143 million, or 11%, whereas revenue in our Oil and Gas segment decreased by $1,277 million, or 58%. Acquisitions contributed $1,877 million of increased revenue for the nine month period ended September 30, 2022, whereas organic revenue decreased by approximately $1,249 million, or 20%, as compared with the same period in 2016. Oil and Gas revenue increased by $1,303 million, or 90%, Communications revenue increased by $34 million, or 2%, whereas Power Generation and Industrial revenue decreased by $121 million, or 37%, Electrical Transmission revenue decreased by $6 million, or 2%, and Other segment revenue decreased by $1 million, or 4%. Organic revenue increased by approximately $1,115 million, or 29%, and acquisitions contributed $96 million in revenue.2021.
Communications Segment. Communications revenue was $1,762$2,375 million for the nine month period ended September 30, 2017,2022, as compared with $1,728$1,869 million for the same period in 2016,2021, an increase of $34$506 million, or 2%27%. Acquisitions contributed $71$125 million of revenue which was offset by a decrease in organic revenue of $37 million. The decrease in organic revenue was primarily driven by lower levels of install-to-the-home and customer fulfillment revenue in 2017, as previously disclosed.
Oil and Gas Segment. Oil and Gas revenue was $2,757 million for the nine month period ended September 30, 2017,2022, and organic revenue increased by approximately $380 million, or 20%, as compared with $1,454 million for the same period in 2016, an increase of $1,303 million, or 90%.2021. The increase in Oil and Gasorganic revenue was driven primarily by an increase in multiple large long-haul pipeline construction projects.higher levels of wireless and wireline project activity.
Electrical TransmissionClean Energy and Infrastructure Segment. Electrical TransmissionClean Energy and Infrastructure revenue was $277$1,494 million for the nine month period ended September 30, 2017,2022 as compared with $284$1,350 million for the same period in 2016, a decrease2021, an increase of $6$143 million, or 2%11%. Acquisitions contributed $49 million of revenue for the nine month period ended September 30, 2022, and organic revenue increased by $94 million, or 7%, as compared with the same period in 2021, due primarily to higher levels of project activity and timing.mix.
Power GenerationOil and IndustrialGas Segment.Power Generation Oil and IndustrialGas revenue was $204$928 million for the nine month period ended September 30, 2017,2022, as compared with $325$2,205 million for the same period in 2016,2021, a decrease of $121$1,277 million, or 37%58%. AcquisitionsFor the nine month period ended September 30, 2022, acquisitions contributed $25approximately $312 million of revenue, which was offsetwhereas organic revenue decreased by approximately $1,589 million, or 72%, as compared with the same period in 2021, primarily due to a decrease in organic revenue of $145 million. The decrease in organic revenue was driven primarily bylarge diameter project activity, as well as lower levels of renewable power project activity and timing.for other projects.
OtherPower Delivery Segment. Other segmentPower Delivery revenue totaled $14was $1,985 million for the nine month period ended September 30, 2017,2022 as compared with $15$731 million for the same period in 2016, a decrease2021, an increase of approximately $1$1,254 million, or 4%171%. For the nine month period ended September 30, 2022, acquisitions contributed $1,390 million of revenue, whereas organic revenue decreased by approximately $136 million, or 19%, driven by a reductionas compared with the same period in revenue from a proportionately consolidated non-controlled Canadian joint venture, offset, in part, by increased levels2021, primarily due to timing and mix of activity from our oil and gas operations in Mexico.project activity.
Costs of revenue, excluding depreciation and amortization. Costs of revenue, excluding depreciation and amortization, increased by approximately $1,002$703 million, or 30%13%, to $4,324$5,949 million for the nine month period ended September 30, 2017, as compared with $3,3222022 from $5,246 million for the same period in 2016.2021. Higher levels of revenue contributed $1,061 million of an increase of $536 million in costs of revenue, excluding depreciation and amortization, whereas improvedand reduced productivity resulted in a decreasecontributed an increase of approximately $59$167 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue decreasedincreased by approximately 120250 basis points, from 87.6%85.4% of revenue for the nine month period ended September 30, 20162021 to 86.4%87.9% of revenue for the same period in 2017. This2022. The basis point improvementincrease was drivendue primarily byto segment revenue mix, including lower levels of revenue for our Electrical Transmissionoil and Power Generationgas operations, and Industrial segments, which benefited from improvedalso includes the effects of inflation on labor, fuel and materials costs for our projects, other project efficiencies, close-outsinefficiencies and mix, as well as the non-recurrence of certain first quarter 2016 project losses. These improvements werestart-up costs, offset, in part, by reduced project efficiencies and mix in our Oil and Gas and Communications segments. Additionally, project losses on a proportionately consolidated non-controlled Canadian joint venture in our Other segment totaled $7 million for the nine month period ended September 30, 2017 as compared with $5 million for the same period in the prior year.power delivery operations.
Depreciation.Depreciation and amortization. Depreciation and amortization was $138$263 million, or 2.8%3.9% of revenue, for the nine month period ended September 30, 20172022, as compared with $122$262 million, or 3.2%4.3% of revenue, for the same period in 2016,2021, an increase of $16approximately $1 million, or 13%1%. Acquisitions contributed $6$77 million of incremental depreciation and amortization for the nine month period ended September 30, 2017 as compared with the same period in 2016.2022, whereas organic depreciation decreased by $75 million, or approximately 29%, due primarily to lower levels of capital investments related to pipeline project activity. As a percentage of revenue, depreciation and amortization decreased by approximately 5040 basis points, due primarily to higher levelspoints.
Amortization of revenue.
General and administrative expenses. General and administrative expenses were $202intangible assets. Amortization of intangible assets was $81 million, or 4.0%1.2% of revenue, for the nine month period ended September 30, 2017,2022, as compared with $195$55 million, or 5.1%0.9% of revenue, for the same period in 2016,2021, an increase of $7approximately $27 million, or 4%49%. Acquisitions contributed $10$40 million of incrementalamortization for the nine month period ended September 30, 2022, whereas organic amortization decreased by approximately $13 million, or 24%, due primarily to the effects of timing of amortization for certain intangible assets. As a percentage of revenue, amortization of intangible assets increased by approximately 30 basis points.
General and administrative expenses. General and administrative expenses were $404 million, or 6.0% of revenue, for the nine month period ended September 30, 2022, as compared with $239 million, or 3.9% of revenue, for the same period in 2021, an increase of $165 million, or 69%. Acquisitions contributed $129 million of general and administrative expenses for the nine month period ended September 30, 2017, whereas2022, and organic general and administrative expenses forincreased by approximately $36 million, or approximately 15%, as compared with the same period in the prior year, includedprimarily due to the effect of prior year recoveries of provisions for credit losses and increases in travel expense, professional fees, information
36

technology and other administrative expenses, including certain restructuring charges of approximately $11 million related to our efforts to streamline our western Canadian oilacquisition and gas and our electrical transmission operations, which efforts were substantially completed in 2016. Excludingintegration costs, as well as the effects of the above mentioned items, varioustiming of legal and settlement matters, offset, in part, by an increase in gains on sales of assets, net. Overall, general and administrative expenses, including approximately $35 million of acquisition and integration costs, increased by approximately $8210 basis points as a percentage of revenue for the nine month period ended September 30, 2022 as compared with the same period in 2021.
Interest expense, net. Interest expense, net of interest income, was $62 million, or 0.9% of revenue, for the nine month period ended September 30, 2022, as compared with $39 million, or 0.6% of revenue, for the same period in 2021, an increase of approximately $23 million, or 58%. The increase in interest expense, net, resulted primarily from credit facility activity, which increased by $18 million due to higher average balances, including from indebtedness incurred in connection with acquisition and share repurchase activity, and higher average interest rates as compared with the same period in 2021, due primarily to an increase in market interest rates. In addition, interest expense from accounts receivable financing arrangements increased by approximately $3 million due to a combination of higher average balances from increased levels of activity and higher average interest rates.
Equity in earnings of unconsolidated affiliates, net. For the nine month periods ended September 30, 2022 and 2021, equity in earnings from unconsolidated affiliates, net, totaled approximately $19 million and $24 million, respectively, and related primarily to our investments in the Waha JVs, partially offset by equity in losses, net, from our investments in certain telecommunications and other entities.
Other income, net. Other income, net, was $2 million for the nine month period ended September 30, 2017, driven primarily by costs related2022, as compared with $14 million for the same period in 2021. For the nine month period ended September 30, 2022, other income, net, included approximately $1 million of income, net, from changes to estimated Earn-out accruals, approximately $6 million of income from changes in the fair value of additional contingent payments to the timingformer owners of an acquired business and approximately $5 million of other miscellaneous income, offset, in part, by approximately $7 million of expense from changes in the fair value of our investment in AVCT, net of income from strategic arrangements and approximately $3 million of acquisition and integration-related financing costs. For the nine month period ended September 30, 2021, other income, net, included approximately $13 million of income, net, from changes to estimated Earn-out accruals, $7 million, of expense, net, from changes in the fair value of our investment in AVCT, net of income from strategic arrangements and $5 million of income from a third quarter 2021 legal matters and other settlementssettlement.
Benefit from (provision for) income taxes. For the nine month period ended September 30, 2022, we had a slight income tax benefit, as well as costs associatedcompared with growth initiatives. Overall,$84 million of income tax expense for the same period in 2021. Pre-tax income totaled $30 million for the nine month period ended September 30, 2017, general2022, whereas pre-tax income totaled $338 million for the same period in 2021. For the nine month period ended September 30, 2022, our effective tax rate was a benefit of 0.2% as compared with an expense of 24.8% for the same period in 2021. Our effective tax rate for the nine month period ended September 30, 2022 included a benefit from adjustments related to the finalization of our 2021 tax returns, a tax benefit related to the vesting of share-based payment awards, and administrative expensesa benefit from the true-up of certain prior year non-deductible expenses. For the nine month period ended September 30, 2021, our effective tax rate included a benefit from adjustments related to the finalization of our 2020 tax returns, offset, in part, by the tax effect of certain non-deductible share-based compensation.
Analysis of EBITDA by Segment
Communications Segment. EBITDA for our Communications segment was $235 million, or 9.9% of revenue, for the nine month period ended September 30, 2022, as compared with EBITDA of $193 million, or 10.3% of revenue, for the same period in 2021, an increase of approximately $41 million, or approximately 21%. Higher levels of revenue contributed an increase in EBITDA of $52 million. As a percentage of revenue, EBITDA decreased by approximately 50 basis points, or approximately $11 million, due primarily to project timing delays and inefficiencies, including the effects of inflation on labor, fuel and materials costs, as well as the effects of project start-up and acquisition and integration costs.
Clean Energy and Infrastructure Segment. EBITDA for our Clean Energy and Infrastructure segment was $30 million, or 2.0% of revenue, for the nine month period ended September 30, 2022, as compared with EBITDA of $40 million, or 3.0% of revenue, for the same period in 2021, a decrease in EBITDA of approximately $10 million, or 25%. Higher levels of revenue contributed an increase in EBITDA of approximately $4 million, whereas as a percentage of revenue, improvedEBITDA decreased by approximately 100 basis points, or $14 million, due to project inefficiencies, including the effects of inflation on labor, fuel and materials costs, as well as project timing delays.
Oil and Gas Segment. EBITDA for our Oil and Gas segment was $133 million, or 14.4% of revenue, for the nine month period ended September 30, 2022, as compared with EBITDA of $476 million, or 21.6% of revenue, for the same period in 2021, a decrease of $343 million, or 72%. Lower levels of revenue contributed a decrease in EBITDA of $276 million. EBITDA margins decreased by approximately 720 basis points, or $67 million, due primarily to inefficiencies resulting from lower levels of revenue, including the effects of inflation on labor, fuel and materials costs, and acquisition and integration costs.
Power Delivery Segment. EBITDA for our Power Delivery segment was $151 million, or 7.6% of revenue, for the nine month period ended September 30, 2022, as compared with EBITDA of $48 million, or 6.5% of revenue, for the same period in 2021, an increase in EBITDA of approximately $103 million, or 215%. As a percentage of revenue, EBITDA increased by approximately 110 basis points, or $21 million, primarily due to project efficiencies resulting from higher levels of revenue and project mix, notwithstanding the effects of inflation on labor, fuel and materials costs, partially offset by the effects of acquisition and integration costs. Higher levels of revenue contributed an increase in EBITDA of $82 million.
Other Segment. EBITDA from Other businesses totaled approximately $20 million for the nine month period ended September 30, 2022 as compared with $23 million for the same period in 2021, and related primarily to equity in earnings from our investments in the Waha JVs, partially offset by equity in losses from other investments.
Corporate. Corporate EBITDA was negative $131 million for the nine month period ended September 30, 2022, as compared with EBITDA of negative $86 million for the same period in 2021, for a decrease in EBITDA of approximately $45 million. Acquisitions, including certain acquisition and integration costs, contributed $25 million of Corporate expenses for the nine month period ended September 30, 2022. For the nine month period ended September 30, 2022, Corporate EBITDA also included approximately $1 million of income, net, from changes to estimated
37

Earn-out accruals and $6 million of income from changes in the fair value of additional contingent payments to the former owners of an acquired business, offset by approximately $7 million, of expense from changes in the fair value of certain investments, net of income from strategic arrangements. For the nine month period ended September 30, 2021, Corporate EBITDA included $13 million of income, net, from changes to estimated Earn-out accruals, $7 million of expense, net, from changes in the fair value of certain investments, net of income from strategic arrangements and $5 million of income from a third quarter 2021 legal settlement. For the nine month period ended September 30, 2022, Corporate expenses not related to the above-described items increased by approximately $9 million as compared with the same period in the prior year, due primarily to improvementsincreases in overhead cost utilization from higher levels of revenue.
Interestcompensation expense, net. Interest expense, net of interest income, was $45 million, or 0.9% of revenue, for the nine month period ended September 30, 2017 as compared with $38 million, or 1.0% of revenue, in 2016. The increase was primarily due to higher levels of financing costs, including discount charges on financing arrangements, as well as an increase in interest expense on our Credit Facility for the nine month period ended September 30, 2017 as compared with the same period in 2016.
Equity in earnings of unconsolidated affiliates. Equity in earnings or losses of unconsolidated affiliates includes our share of income or losses from equity investees. For the nine month period ended September 30, 2017, equity in earnings from unconsolidated affiliates was $15 million,professional and related primarily to our investments in the Waha JVs, which commenced operations in 2017. Equity in earnings from unconsolidated affiliates for the nine month period ended September 30, 2016 was approximately $4 million and related to expected recoveries from our interests in certain pre-acquisition equity method investments of Pacer, of which the remaining investment as of September 30, 2017 is in the final stages of liquidation and is being managed by a receiver.

Other income, net. Other income, net, consists primarily of gains or losses from sales of, or changes in estimated recoveries from, assets and investments, certain legal/other settlements, gains or losses from changes to estimated earn-out accruals, and certain restructuring charges related to losses on disposal of excess fixed assets. For the nine month period ended September 30, 2017, other income, net, was $4 million. Other income, net, for the nine month period ended September 30, 2017 included $12 million of expenses related to changes in expected recovery amounts for an investment that is in the final stages of liquidation, as well as reduced recovery expectations on a long-term note receivable due to recent bankruptcy proceedings for a former customer, offset by $12 million of income from changes to estimated earn-out accruals. Other income, net, for the nine month period ended September 30, 2016 totaled $13 million, and included approximately $10 million related to a settlement in connection with a previously acquired business, $3 million of restructuring charges related to estimated losses on the planned disposal of fixed assets held-for-sale and $3 million of income from changes to estimated earn-out accruals. Gains on sales of equipment, net, totaled approximately $4 million and $3 million for the nine month periods ended September 30, 2017 and 2016, respectively.
Provision for income taxes. Income tax expense was $126 million for the nine month period ended September 30, 2017 as compared with $54 million for the same period in the prior year. For the nine month period ended September 30, 2017, we had pre-tax income of $314 million as compared with $132 million for the same period in the prior year. Our effective tax rate for the nine month period ended September 30, 2017 decreased versus the same period in 2016, primarily due to tax credits that were recognized during the third quarter of 2017, offset by the effect of losses in foreign jurisdictions.
Analysis of EBITDA by Segment
Communications Segment. EBITDA for our Communications segment was $173 million, or 9.8% of revenue, for the nine month period ended September 30, 2017, as compared with $191 million, or 11.0% of revenue, for the same period in 2016, a decrease of approximately $18 million, or 9%. This decrease was primarily due to: (i) the non-recurrence of a first quarter 2016 gain from a settlement in connection with a previously acquired business; (ii) production inefficiencies; (iii) certain other expense reduction efforts, as well as timing of legal mattersfees, information technology, travel and other settlements; (iv)administrative expenses, including certain acquisition and integration costs, offset, in part, by a benefit from higher revenue.
Oil and Gas Segment. EBITDA for our Oil and Gas segment was $356 million, or 12.9%the effects of revenue, for the nine month period ended September 30, 2017, as compared with $188 million, or 12.9% of revenue, for the same period in 2016, an increase of $168 million, or approximately 90%, driven primarily by higher revenue. As a percentage of revenue, segment EBITDA was flat for the nine month periods ended September 30, 2017 as compared with the same period in 2016. The effect of reduced project efficiencies and mix for the nine month period ended September 30, 2017 was partially offset by the non-recurrence of a first quarter 2016 project loss of approximately $13 million on a western Canadian oil and gas project and the non-recurrence of approximately $7 million of 2016 restructuring charges related to efforts to streamline our western Canadian oil and gas operations.
Electrical Transmission Segment. EBITDA for our Electrical Transmission segment was $11 million, or 4.0% of revenue, for the nine month period ended September 30, 2017, as compared with EBITDA of negative $42 million, or negative 14.8% of revenue, for the same period in 2016, an increase in EBITDA of $53 million. The improvement in Electrical Transmission EBITDA was due to a combination of project efficiencies and mix, improved cost and overhead utilization due to higher levels of revenue, the non-recurrence of a first quarter 2016 project loss of approximately $15 million on a large transmission project, and the non-recurrence of approximately $7 million of 2016 restructuring charges related to efforts to streamline our operations.
Power Generation and Industrial Segment. EBITDA for our Power Generation and Industrial segment was $15 million, or 7.3% of revenue, for the nine month period ended September 30, 2017, as compared with EBITDA of $14 million, or 4.3% of revenue, for the same period in 2016, an increase in EBITDA of $1 million, or 7% As a percentage of revenue, segment EBITDA improved by approximately 300 basis points for the nine month period ended September 30, 2017 as compared with the same period in the prior year due to improved project efficiencies and mix, offset, in part, by reduced cost and overhead utilization due to lower revenue.
Other Segment. EBITDA from Other businesses was approximately $12 million for the nine month period ended September 30, 2017, as compared with EBITDA of negative $3 million for the same period in 2016, an increase in EBITDA of $14 million. Other segment EBITDA for the nine month period ended September 30, 2017 included $15 million of equity in earnings from unconsolidated affiliates related to our investments in the Waha JVs, which commenced operations in the first half of 2017. For the nine month periods ended September 30, 2017 and 2016, Other segment EBITDA included losses of $7 million and $5 million, respectively, on a proportionately consolidated non-controlled Canadian joint venture. The remaining improvement in Other segment EBITDA was driven by an increase in EBITDA from our oil and gas operations in Mexico.
Corporate. Corporate EBITDA was negative $69 million for the nine month period ended September 30, 2017, as compared with EBITDA of negative $55 million for the same period in 2016, for a decrease in EBITDA of $14 million. Corporate EBITDA for the nine month period ended September 30, 2017 included approximately $12 million of expenses related to changes in expected recovery amounts for an investment that is in the final stages of liquidation, as well as reduced recovery expectations on a long-term note receivable due to recent bankruptcy proceedings for a former customer, offset by approximately $12 million of income from changes to estimated earn-out accruals. For the nine month period ended September 30, 2017, other corporate expenses increased as compared with the same period in the prior year, due primarily to costs related to the timing of legal matters and other settlements, as well as costs associated with growth initiatives, including incentive and compensation expense.settlement matters.
Foreign Operations
Our foreign operations are primarily in Canada.Canada and, to a far lesser extent, in Mexico, the Caribbean and India. See Note 13 - Segments and Related Information in the notes to the condensed unaudited 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. GAAP financial measures, including earnings before interest, income taxes, depreciation and amortization (“EBITDA”). In addition, we have presented “Adjusted, adjusted EBITDA” as well as (“Adjusted EBITDA”), adjusted net income (“Adjusted Net Income”) and adjusted diluted earnings per share (“Adjusted Diluted Earnings Per Share”). TheThese “adjusted” non-U.S. GAAP measures exclude, as applicable to the particular periods, non-cash stock-based compensation expense, certain restructuring charges, project results, which forexpense; acquisition and integration costs related to our 2021 acquisitions; the periods presented, were losses,bargain purchase gain from a proportionately consolidated non-controlled Canadian joint venture that was underway when we acquired Pacer in 2014, and whose sole activity involves the construction of a bridge, a business in which we do not otherwise engage, is managed by a third party, and for which we have minimal direct construction involvement and automatically terminates upon completion of the project, and charges2021 acquisition; fair value gains or recoveries from multi-employer pension plan withdrawals,losses, net, on an investment; and, for Adjusted Net Income and Adjusted Diluted Earnings Per Share, amortization of intangible assets, the effects of changes in statutory tax rates and the tax effects of the adjusted items, including non-cash stock based compensation. Theitems. These definitions of EBITDA and Adjusted EBITDA above 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.
We use EBITDA and Adjusted EBITDA, as well as Adjusted Net Income 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 operating results, as well as items that can vary widely across different industries or among companies within the same industry, and,industry. We believe that these adjusted measures provide a baseline for non-cashanalyzing trends in our underlying business. Non-cash stock-based compensation expense can also 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. Additionally,granted, and amortization of intangible assets is subject to acquisition activity, which varies from period to period. Beginning with the fourth quarter of 2021, due to the extent of the acquisition costs related to our fourth quarter 2021 acquisitions, and the costs of the integration efforts that have been, and will continue to be, required in connection with such acquisitions, we are excluding acquisition and integration costs in calculating Adjusted EBITDA and Adjusted Net Income for these acquisitions, and we intend to exclude such costs for future acquisitions requiring substantial integration efforts, including for our recent acquisition of IEA. In addition, beginning in the second quarter of 2022, we are excluding fair value gains or losses, net, for our investment in AVCT, a publicly-traded company in which we currently have no active involvement, in calculating our adjusted results, and prior periods have been updated to conform with this presentation. We believe that fair value gains or losses for this investment, which vary 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. We exclude intangible asset amortization, acquisition costs and selected purchase accounting adjustments, including the bargain purchase gain from a 2021 acquisition, from our adjusted measures provide a baseline for analyzing trendsdue to their non-operational nature and inherent volatility, as acquisition activity varies from period to period. We also believe that this presentation is common practice in our underlying business.industry and improves comparability of our results with those of our peers. Each company’s definitions of these adjusted measures may vary as they are not standardized and should be used in light of the provided reconciliations.
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. 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. 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.
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The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA in dollar and percentage of revenue terms, for the periods indicatedindicated. The tables below (dollar amounts in millions). The tables below may contain slight summation differences due to rounding.
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Net income$49.2 2.0 %$112.5 4.7 %$30.5 0.5 %$254.3 4.1 %
Interest expense, net26.9 1.1 %13.1 0.5 %62.3 0.9 %39.4 0.6 %
Provision for (benefit from) income taxes11.1 0.4 %27.6 1.1 %(0.1)(0.0)%84.0 1.4 %
Depreciation91.3 3.6 %95.4 4.0 %263.5 3.9 %262.1 4.3 %
Amortization of intangible assets28.0 1.1 %23.4 1.0 %81.2 1.2 %54.5 0.9 %
EBITDA$206.5 8.2 %$271.8 11.3 %$437.5 6.5 %$694.3 11.3 %
Non-cash stock-based compensation expense5.7 0.2 %6.1 0.3 %18.9 0.3 %17.7 0.3 %
Acquisition and integration costs33.3 1.3 %— — %59.4 0.9 %— — %
Bargain purchase gain— — %— — %(0.2)(0.0)%— — %
(Gains) losses, net, on fair value of investment0.1 0.0 %6.9 0.3 %7.2 0.1 %6.9 0.1 %
Adjusted EBITDA$245.6 9.8 %$284.8 11.8 %$522.8 7.7 %$718.9 11.7 %
 For the Three Months Ended September 30 For the Nine Months Ended September 30
 2017 2016 2017 2016
Net income$64.2
 3.3% $56.5
 3.6% $188.2
 3.8% $78.1
 2.1%
Interest expense, net17.6
 0.9% 13.1
 0.8% 45.0
 0.9% 37.9
 1.0%
Provision for income taxes43.4
 2.2% 38.8
 2.4% 126.2
 2.5% 54.3
 1.4%
Depreciation and amortization50.1
 2.6% 42.6
 2.7% 138.4
 2.8% 122.2
 3.2%
EBITDA$175.3
 9.0% $151.0
 9.5% $497.7
 9.9% $292.6
 7.7%
Non-cash stock-based compensation expense3.4
 0.2% 3.9
 0.2% 10.5
 0.2% 11.3
 0.3%
Restructuring charges—
 —% 4.7
 0.3% 0.6
 0.0% 13.8
 0.4%
Project results from non-controlled joint venture0.4
 0.0% 5.1
 0.3% 7.4
 0.1% 5.1
 0.1%
Charges (recoveries) from multi-employer pension plan withdrawals0.6
 0.0% —
 —% 0.6
 0.0% —
 —%
Adjusted EBITDA$179.6
 9.2%
$164.8

10.4% $516.7
 10.3% $322.8
 8.5%

A reconciliation of EBITDA and EBITDA margin to Adjusted EBITDA and Adjusted EBITDA margin by reportable segment for the periods indicated is as follows:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
EBITDA$206.5 8.2 %$271.8 11.3 %$437.5 6.5 %$694.3 11.3 %
Non-cash stock-based compensation expense (a)
5.7 0.2 %6.1 0.3 %18.9 0.3 %17.7 0.3 %
Acquisition and integration costs (b)
33.3 1.3 %— — %59.4 0.9 %— — %
Bargain purchase gain (a)
— — %— — %(0.2)(0.0)%— — %
(Gains) losses, net, on fair value of investment (a)
0.1 0.0 %6.9 0.3 %7.2 0.1 %6.9 0.1 %
Adjusted EBITDA$245.6 9.8 %$284.8 11.8 %$522.8 7.7 %$718.9 11.7 %
Reportable Segment:
Communications$110.4 12.4 %$71.6 10.7 %$236.9 10.0 %$193.1 10.3 %
Clean Energy and Infrastructure24.6 4.4 %13.8 2.7 %30.2 2.0 %40.2 3.0 %
Oil and Gas50.3 13.4 %170.6 19.9 %137.9 14.9 %476.2 21.6 %
Power Delivery83.5 12.1 %34.9 9.5 %185.1 9.3 %47.8 6.5 %
Other5.6 NM7.5 NM20.0 NM23.3 NM
Corporate(28.8)— (13.6)— (87.3)— (61.7)— 
Adjusted EBITDA$245.6 9.8 %$284.8 11.8 %$522.8 7.7 %$718.9 11.7 %

NM - Percentage is not meaningful

(a)    Non-cash stock-based compensation expense, bargain purchase gain from a fourth quarter 2021 acquisition, and (gains) losses, net, on the fair value of our investment in AVCT are included within Corporate results.
 For the Three Months Ended September 30 For the Nine Months Ended September 30
 2017 2016 2017 2016
EBITDA$175.3
 9.0% $151.0
 9.5 % $497.7
 9.9% $292.6
 7.7 %
Non-cash stock-based compensation expense3.4
 0.2% 3.9
 0.2 % 10.5
 0.2% 11.3
 0.3 %
Restructuring charges—
 —% 4.7
 0.3 % 0.6
 0.0% 13.8
 0.4 %
Project results from non-controlled joint venture0.4
 0.0% 5.1
 0.3 % 7.4
 0.1% 5.1
 0.1 %
Charges (recoveries) from multi-employer pension plan withdrawals0.6
 0.0% —
 — % 0.6
 0.0% —
 — %
Adjusted EBITDA$179.6
 9.2% $164.8
 10.4 % $516.7
 10.3% $322.8
 8.5 %
Reportable Segment:       
Communications$65.5
 10.7% $63.0
 10.1 % $173.6
 9.9% $191.4
 11.1 %
Oil and Gas108.1
 9.3% 118.0
 16.0 % 356.1
 12.9% 194.1
 13.3 %
Electrical Transmission4.5
 5.5% (3.8) (3.7)% 11.8
 4.3% (34.7) (12.2)%
Power Generation and Industrial9.3
 9.6% 6.1
 4.9 % 14.8
 7.3% 13.9
 4.3 %
Other10.5
 98.9% 2.1
 27.2 % 19.0
 133.3% 2.6
 17.2 %
Corporate(18.3) NA (20.6) NA (58.6) NA (44.4) NA
Adjusted EBITDA$179.6
 9.2% $164.8
 10.4 % $516.7
 10.3% $322.8
 8.5 %

Adjusted Net Income(b)    Communications, Oil and Adjusted Diluted Earnings Per ShareGas, Power Delivery and Corporate results include acquisition and integration costs of $0.5 million, $1.1 million, $20.4 million and $11.2 million, respectively, for the three month period ended September 30, 2022, and include $2.4 million, $4.5 million, $34.5 million and $18.0 million, respectively, for the nine month period ended September 30, 2022.
The tablestable below, which may contain slight summation differences due to rounding, reconcilereconciles reported net income and reported diluted earnings per share, the most directly comparable U.S. GAAP financial measures, to Adjusted Net Income and Adjusted Diluted Earnings Per Share.


39

For the Three Months Ended September 30For the Three Months Ended September 30,
2017 201620222021
Net Income
(in millions)		 Diluted Earnings Per Share Net Income
(in millions)		 Diluted Earnings Per ShareNet Income (in millions)Diluted Earnings Per ShareNet Income (in millions)Diluted Earnings Per Share
Reported U.S. GAAP measure$64.2
 $0.77
 $56.5
 $0.69
Reported U.S. GAAP measure$49.2 $0.65 $112.5 $1.50 
Adjustments:       Adjustments:
Non-cash stock-based compensation expense3.4
 0.04
 3.9
 0.05
Non-cash stock-based compensation expense5.7 0.08 6.1 0.08 
Restructuring charges—
 —
 4.7
 0.06
Project results from non-controlled joint venture0.4
 0.00
 5.1
 0.06
Charges (recoveries) from multi-employer pension plan withdrawals0.6
 0.01
 —
 —
Amortization of intangible assetsAmortization of intangible assets28.0 0.37 23.4 0.32 
Acquisition and integration costsAcquisition and integration costs33.3 0.44 — — 
Bargain purchase gainBargain purchase gain— — — — 
(Gains) losses, net, on fair value of investment(Gains) losses, net, on fair value of investment0.1 — 6.9 0.09 
Total adjustments, pre-tax$4.4
 $0.05
 $13.7
 $0.17
Total adjustments, pre-tax$67.1 $0.89 $36.3 $0.49 
Income tax effect of adjustments (a)
(0.6) (0.01) (4.0) (0.05)
Income tax effect of adjustments (a)
(15.5)(0.21)(7.7)(0.10)
Statutory tax rate effects (b)
Statutory tax rate effects (b)
— — — — 
Adjusted non-U.S. GAAP measure$68.0
 $0.82
 $66.3
 $0.81
Adjusted non-U.S. GAAP measure$100.8 $1.34 $141.0 $1.89 

For the Nine Months Ended September 30For the Nine Months Ended September 30,
2017 201620222021
Net Income
(in millions)		 Diluted Earnings Per Share Net Income
(in millions)		 Diluted Earnings Per ShareNet Income (in millions)Diluted Earnings Per ShareNet Income (in millions)Diluted Earnings Per Share
Reported U.S. GAAP measure$188.2
 $2.27
 $78.1
 $0.96
Reported U.S. GAAP measure$30.5 $0.38 $254.3 $3.41 
Adjustments:       Adjustments:
Non-cash stock-based compensation expense10.5
 0.13
 11.3
 0.14
Non-cash stock-based compensation expense18.9 0.25 17.7 0.24 
Restructuring charges0.6
 0.01
 13.8
 0.17
Project results from non-controlled joint venture7.4
 0.09
 5.1
 0.06
Charges (recoveries) from multi-employer pension plan withdrawals0.6
 0.01
 —
 —
Amortization of intangible assetsAmortization of intangible assets81.2 1.07 54.5 0.74 
Acquisition and integration costsAcquisition and integration costs59.4 0.79 — — 
Bargain purchase gainBargain purchase gain(0.2)(0.00)— — 
(Gains) losses, net, on fair value of investment(Gains) losses, net, on fair value of investment7.2 0.10 6.9 0.09 
Total adjustments, pre-tax$19.1
 $0.23
 $30.3
 $0.37
Total adjustments, pre-tax$166.5 $2.20 $79.1 $1.07 
Income tax effect of adjustments (a)
(4.1) (0.05) (10.6) (0.13)
Income tax effect of adjustments (a)
(42.2)(0.56)(14.8)(0.20)
Statutory tax rate effects (b)
Statutory tax rate effects (b)
— — 1.2 0.02 
Adjusted non-U.S. GAAP measure$203.1
 $2.45
 $97.7
 $1.20
Adjusted non-U.S. GAAP measure$154.8 $2.02 $319.8 $4.30 
(a)
(a)    Represents the tax effect of the adjusted items that are subject to tax, including the tax effects of non-cash stock-based compensation expense, including from the vesting of share-based payment awards. 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. For the three and nine month periods ended September 30, 2022, our consolidated effective tax rates, as reported, were an expense of 18.4% and a benefit of 0.2%, respectively, and as adjusted, were 20.9% and 21.4%, respectively. For the three and nine month periods ended September 30, 2021, our consolidated effective tax rates, as reported, were 19.7% and 24.8%, respectively, and as adjusted, were 20.0% and 23.4%, respectively.
(b)    For the nine month period ended September 30, 2021, includes the effect of changes in certain state tax rates.
Represents the tax effect of the adjusted items that are subject to tax, including the tax effects of share-based compensation expense. Tax effects are determined based on the tax treatment of the related items, the incremental statutory tax rate of the jurisdictions pertaining to each adjustment, and taking into consideration their effect on pre-tax income. For both the three and nine month periods ended September 30, 2017, our consolidated effective tax rate, as reported, was 40%, and as adjusted, was 39%. For the three and ninemonth periods ended September 30, 2016, our consolidated effective tax rate, as reported, was 41% for both, and as adjusted, was 39% and 40%, respectively.
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. Our primary liquidity needs are for working capital, capital expenditures, insurance and performance collateral in the form of cash and letters of credit, earn-out obligations, cost and equity investeeinvestment funding requirements, debt service and income taxes and share repurchase programs.taxes. We also evaluate opportunities for strategic acquisitions, investments and investmentsother arrangements from time to time, and we may consider opportunities to borrow additional funds, which may include borrowings under our Credit Facility or debt issuances, or to repurchase, refinance, extend the terms of our existing indebtedness or retire outstanding debt, or to repurchase additional shares of our outstanding common stock in the future,under share repurchase authorizations, any of which may require our use of cash.
Capital Expenditures. For the nine month period ended September 30, 2017,2022, we spent $83approximately $213 million on capital expenditures, or $70$166 million, net of asset disposals, and incurred approximately $131$185 million of equipment purchases under capital lease and other financing arrangements.finance leases. We estimate that wefourth quarter 2022 capital expenditure levels will spend approximately $105 million ondecrease, with estimated full year capital expenditures approximating $240 million, or approximately $90$180 million, net of asset disposals, in 2017, and we expect to incur approximately $155$220 million to $240 million of equipment purchases under capital lease or other financing arrangements.finance leases. Actual capital expenditures may increase or decrease in the future depending upon business activity levels, as well as ongoing assessments of equipment lease versus buypurchase decisions based on short and long-term equipment requirements.
Acquisitions and Acquisition-Related Contingent Consideration.Earn-Out Liabilities. We typically utilize cash for ourbusiness acquisitions and other strategic acquisitions of other businesses,arrangements, and for the nine month period ended September 30, 2017,2022, we used $116$72 million of cash for this purpose. In addition, in most of our acquisitions, we have agreed
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to make future earn-out payments to the sellers whichthat are contingent upon the future earnings performance of the acquired businesses. Certain earn-outbusinesses, which we also refer to as “Earn-out” payments. Earn-out payments may be paid in either cash or, under specific circumstances, MasTec common stock, or a combination thereof, at our option. Potential future earn-out obligations are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in earnings as a component of other income or expense. The estimated total value of earn-out obligations recorded asfuture Earn-out liabilities as of September 30,


2017 2022 was approximately $105$127 million. Of this amount, $15approximately $11 million represents the liability for earn-out obligations that have been earned.earned amounts. The remainder approximately $90 million, is management’s estimate of potential earn-out obligationsEarn-out liabilities that are contingent upon future performance. There were noFor the nine month periods ended September 30, 2022 and 2021, we made $38 million and $47 million, respectively, of Earn-out payments.
Our acquisition of HMG provides for certain additional payments to be made to the sellers if certain acquired receivables are collected, which we refer to as the “Additional Payments.” Pursuant to the terms of the HMG purchase agreement, a portion of the Additional Payments will be made in cash, with the remainder due in shares of MasTec common stock. An Additional Payment of approximately $29.4 million was made in May 2022, which payment was composed of approximately $18 million in cash and 133,157 shares of MasTec common stock. As of September 30, 2022, the estimated fair value of remaining Additional Payments was approximately $31 million and includes the effect of an unrealized fair value gain of approximately $5 million related to earn-out obligationsthe contingent shares. The number of shares that would be paid in connection with the remaining Additional Payment as of September 30, 2022 is approximately 160,000 shares. In addition, the HMG purchase agreement provided for a customary net working capital adjustment, which adjustment was resolved in the threesecond quarter of 2022 for a reduction of approximately $15 million in acquisition consideration.
Income Taxes.For the nine month period ended September 30, 2017,2022, tax payments, net of tax refunds, totaled approximately $2 million, and for the nine month period ended September 30, 2017, we made2021, totaled $63 million. Our tax payments of $19 million. For the three and nine month periods ended September 30, 2016, we made payments of $5 million and $20 million, respectively, related to earn-out obligations.
Income Taxes. Tax payments, net of tax refunds, were approximately $78 million and $15 million, respectively, for the nine month periods ended September 30, 2017 and 2016. Tax payments, which are made quarterly, vary with changes in taxable income and earnings based on estimates of full year taxable income activity and estimated tax rates.
Working Capital. We need working capital to support seasonal variations in our business, primarily due to the effect of weather conditions on external construction and maintenance work and the spending patterns of our customers, both of which influence the timing of associated spending to support related customer demand. Working capital needs are 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. Conversely, working capital needs are typically converted to cash during the winter months. These seasonal trends, however, can be offset by changes in the timing of projects, which can be affected by project delays or accelerations and/or other factors that may affect customer spending.
Working capital requirements also tend to increase when we commence multiple projects or particularly large projects because labor, including subcontractor costs, and certain other costs, including inventory, typically become payable before the receivables resulting from work performed are collected. The timing of billing milestonesbillings and project close-outs can contribute to changes in unbilled revenue. As of September 30, 2017,2022, we expect that substantially all of our CIEBunbilled receivables will be billed to customers in the normal course of business within the next 12twelve months. AccountsTotal accounts receivable, balances, which consistconsists of contract billings, as well as CIEBunbilled receivables and retainage, net of allowance, increased to $1.5approximately $2.7 billion as of September 30, 20172022 from $1.2$2.2 billion as of December 31, 20162021 due primarily to higher levels of quarterly revenue, including from our fourth quarter 2021 acquisitions, as well as the ramp-up of various projects, primarilyan increase in our oil and gas business.DSOs. See below for discussion of our days sales outstanding, net of contract liabilities, which we refer to as days sales outstanding, or “DSO.”
Our payment billing terms are generally net 30 days, and some of our contracts allow our customers to retain a portion of the contract amount (generally, from 5% to 10% of billings) until the job is completed. As part of our ongoing working capital management practices, we evaluate opportunities to improve our working capital cycle time through contractual provisions and certain financing arrangements. For certain customers, we maintain inventory to meet the materials requirements of the contracts. Occasionally, certain of our customers pay us in advance for a portion of the materials we purchase for their projects or allow us to pre-bill them for materials purchases up to specified amounts. Vendor terms are generally 30 days. Our agreements with subcontractors often contain a “pay-if-paid” provision, whereby our payments to subcontractors are made only after we are paid by our customers.
Summary of Financial Condition, Liquidity and Capital Resources
WeIncluding our current assessment of general economic conditions on our results of operations and capital resource requirements, we anticipate that funds generated from operations, borrowings under our Credit Facilityexisting credit facilities, as well as those facilities discussed under “Recent Transactions,” above, and our cash balances will be sufficient to meet our working capital requirements, anticipated capital expenditures, debt service obligations, insurance and performance collateral requirements, letter of credit needs, earn-out obligations, required income tax payments, share repurchase activity and acquisition, strategic arrangement and other investment funding requirements, including the recent acquisition of IEA, and other liquidity needs for at least the next 12 months.twelve months and the foreseeable future. For additional information regarding financing for the IEA transaction, see “Recent Transactions,” above.
Sources and Uses of Cash
As of September 30, 2017,2022, we had $746approximately $1,128 million in working capital, defined as current assets less current liabilities, as compared with $562$1,089 million as of December 31, 2016,2021, an increase of approximately $183$38 million. Total cashCash and cash equivalents of $44totaled approximately $96 million and $361 million as of September 30, 2017 increased by $5 million from total cash2022 and cash equivalents of $39 million as of December 31, 2016.2021, respectively, for a decrease of $265 million, due, in part, to a decrease in net income and an increase in cash used in financing activities, including from share repurchases.
Sources and uses of cash are summarized below (in millions):
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For the Nine Months Ended September 30For the Nine Months Ended September 30,
2017 201620222021
Net cash provided by operating activities$178.6
 $127.1
Net cash provided by operating activities$118.7 $499.1 
Net cash used in investing activities$(249.4) $(94.1)Net cash used in investing activities$(241.7)$(716.7)
Net cash provided by (used in) financing activities$75.6
 $(27.6)
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities$(139.5)$34.5 

Operating Activities.Cash flow from operations is primarily influenced by changes in the timing of demand for our services and operating margins, but can also be affected by working capital needs associated with the various types of services we provide. Working capital is affected by changes in total accounts receivable, CIEB,prepaid expenses and other current assets, accounts payable and payroll tax payments, accrued expenses and BIEC,contract liabilities, all of which tend to be related. These working capital items are affected by changes in revenue resulting from both the timing and the volume of work performed, by variability in the timing of customer billings and collections of receivables, as well as settlement of payables and other obligations. Net cash provided by operating activities for the nine month period ended September 30, 20172022 was $179$119 million, as compared with approximately $127$499 million offor the same period in 2021, for a decrease in net cash provided by operating activities for the same period in 2016. The increase in cash flow from operating activities was driven by an increaseof approximately $380 million, due primarily to a decrease in net income of $110 million due to growth in revenue and an increase inas well as the effect of non-cash adjustments of $107 million, partially offset by a decrease in the effect of networking capital changes in assets and liabilities, net, including from our recent acquisitions and from higher levels of $165 million.purchasing activity to secure inventory and materials components to address concerns resulting from inflation and supply chain disruptions for the nine month period ended September 30, 2022. The above described items, which resulted in a reduction in our operating cash flows, were offset, in part, by increases in certain expenses that reconcile net income to operating cash flows, including amortization of intangible assets.


Our days sales outstanding, (“DSO”), net of BIEC,contract liabilities (“DSO”) was 6789 as of September 30, 2017, as compared with 68 as2022. As of December 31, 20162021, our DSO was 98, and 61 as of September 30, 2016.adjusted for December 2021 acquisitions, was 77. DSO net of BIEC, is calculated as total accounts receivable, net of allowance, less BIEC,contract liabilities, divided by average daily revenue for the most recently completed quarter as of the balance sheet date. Our DSOs can fluctuate from period to period due to the timing of billings, billing terms, collections and settlements, timing of project close-outs and retainage collections, changes in project and customer mix and the effect of working capital initiatives. To provide a representative comparison of our DSOs across periods, for December 31, 2021, we calculated DSO as adjusted for our December 2021 acquisitions. This calculation for December 31, 2021 excludes revenue and accounts receivable, net of allowance, less contract liabilities for our December 2021 acquisitions, given that our consolidated results for the related period do not reflect the full quarter’s revenue for these acquisitions, but our consolidated balance sheet as of December 31, 2021 includes the full amount of related accounts receivable, net of allowance, less contract liabilities. The increase in DSO as of September 30, 2022 as compared with December 31, 2021, as adjusted for our December 2021 acquisitions, was due to timing of ordinary course billing and collection activities and the effect of our recent acquisitions, some of which have a higher DSO than the DSO of our organic operations. Other than matters subject to litigation, we do not anticipate material collection issues related to our outstanding accounts receivable balances, nor do we believe that we have material amounts due from customers experiencing financial difficulties. WeBased on current information, we expect to collect substantially all of our outstanding accounts receivable net,balances within the next twelve months.
Investing Activities.Net cash used in investing activities increaseddecreased by $155approximately $475 million to $249$242 million for the nine month period ended September 30, 20172022 from $94$717 million for the nine month period ended September 30, 2016. For2021. We paid $72 million related to acquisitions for the nine month period ended September 30, 2017, payments for2022, in which period we completed four acquisitions, net of cash acquired, totaled $116 million due to our 2017 acquisitions, an increase of $112 million as compared with$605 million for the same period in 2016. Payments2021, in which period we completed eight acquisitions, for other investments, net, which relates primarily to activity associated with cost and equity investees, was $64 millionan increase of approximately $533 million. Capital expenditures for the nine month period ended September 30, 2017,2022 totaled $213 million, or $166 million, net of asset disposals, as compared with $8$132 million, or $107 million, net of asset disposals, for the same period in 2016, representing2021, for an increase in cash used in investing activities of approximately $56 million. Payments for other investments$59 million, due to acceleration of capital expenditures for the nine month period ended September 30, 2017 related2022 to ouraddress supply chain disruption concerns. Payments for other investments, which relate primarily to investments in certain equity investment in the Waha JVs,investees as well as payments for which we have $19split dollar life insurance agreements, decreased from $7 million in letters of credit issued as collateral as of September 30, 2017, as described in Note 4 - Fair Value of Financial Instruments in the notes to the condensed unaudited consolidated financial statements, which is incorporated by reference. Proceeds from other investments for the nine month period ended September 30, 2017 related2021 to recoveries from an equity method investment that is in the final stages of liquidation and is being managed by a receiver. Additionally, for the nine month period ended September 30, 2017, we spent $83 million on capital expenditures, or $70 million, net of asset disposals, as compared with capital expenditures, net of asset disposals, of $82$4 million for the same period in 2022. On October 7, 2022, we completed the prior year, foracquisition of IEA in a decrease in cash used in investing activities of $12 million.and stock transaction. See “Recent Transactions,” above.
Financing Activities. Net cash provided by financing activities for the nine month period ended September 30, 2017 was $76 million, as compared with $28 million of net cash used in financing activities for the nine month period ended September 30, 2016,2022 was $139 million, as compared with $34 million of net cash provided by financing activities for the same period in 2021, for an increase in cash provided byused in financing activities of $103$174 million. Credit facility related activity, net, for the nine month period ended September 30, 2017,The increase in cash used in financing activities was driven primarily by share repurchase, acquisition-related and other financing activities. Share repurchases totaled $162 million of borrowings, net of repayments, as compared to $37$81 million for the nine month period ended September 30, 2016,2022, whereas there were no share repurchases for the same period in 2021. Payments of acquisition-related contingent consideration included within financing activities totaled $35 million for the nine month period ended September 30, 2022 as compared with $22 million for the same period in 2021, for an increase in cash provided by credit facility-relatedused in financing activities net, of $125 million, which increase was partially offset by$13 million. Total payments of $6 million for Credit Facility-related financing costs. Payments of acquisition-related contingent consideration, including payments in excess of acquisition-date liabilities, which are classified within operating activities, totaled $38 million for the nine month periodsperiod ended September 30, 2017 and 2016 were generally flat, totaling $19 million in 20172022 as compared with $20$45 million for the same period in 2016.2021. Additionally, payments for acquisition-related contingent assets related to the December 2021 acquisition of HMG totaled approximately $18 million for the nine month period ended September 30, 2022.
Credit Facility activity, net, totaled $148 million of borrowings, net of repayments for the nine month period ended September 30, 2022, as compared with $189 million for the same period in 2021, for a reduction in cash provided by financing activities of approximately $40 million. Payments of finance lease obligations increased by approximately $14 million for the nine month period ended September 30, 2022 as compared with the same period in 2021. Payments for other financing activities, net, which includes amounts paid for other borrowing and transaction-related financing activities, totaled $18 million for the nine month period ended September 30, 2022, as compared with $3 million for the same period in the prior year, for an increase in cash used in financing activities of approximately $16 million. Offsetting the above noted effects of Credit Facility and other financing activities, in the prior year period, we paid approximately $9 million to holders of our non-controlling interests, including $7 million as consideration to acquire 15% of the remaining interests of one of these entities, whereas for the nine month period ended September 30, 2022, we
42

made no payments.
Senior Secured Credit Facility
We have a senior securedunsecured credit facility (the “Credit Facility”) that we refer to as our “Creditmatures on November 1, 2026. The Credit Facility” which was amended and restated in February 2017. As ofon September 30, 2017,1, 2022 to, among other changes, increase the Credit Facility has aggregate borrowing commitments offrom approximately $1.5$2.0 billion to $2.3 billion, which amount is composed of $1.1$1.9 billion of revolving commitments, an increase of $250 million from the previous Credit Facility, and a Term Loan with an outstanding term loan in the aggregateoriginal principal amount of $400$350 million. The amendment also released the guarantees that existed under the previous Credit Facility and removed the requirement that certain of our subsidiaries guarantee the obligations thereunder. The other terms and conditions of the Credit Facility remain substantially the same. Additionally, the amendment eliminated the use of LIBOR as a basis to determine certain interest rates and transitioned to SOFR for such purposes. Aggregate outstanding borrowings under the Credit Facility as of September 30, 2022 totaled approximately $1.3 billion. Borrowings under the amended Credit Facility are used for working capital requirements, capital expenditures and other corporate purposes, including investments in for acquisitions, equity or other investees, potential acquisitionsinvestments or other strategic arrangements, andshare repurchases and/or the repurchase or prepayment of indebtedness.indebtedness, including repayment of term loans.
We are dependent upon borrowings and letters of credit under theour Credit Facility to fund our operations. Should we be unable to comply with the terms and conditions of theour Credit Facility, we would be required to obtain modifications to the Credit Facility or obtain an alternative source of financing to continue to operate, neither of which may be available to us on commercially reasonable terms, or at all. The Credit Facility is subject to certain provisions and covenants, as more fully described in Note 7 - Debt in the notes to the condensed unauditedaudited consolidated financial statements which is incorporated by reference.included in our 2021 Form 10-K.
4.875%4.50% Senior Notes
We have outstanding $400$600 million of 4.875% senior notes4.50% Senior Notes due MarchAugust 15, 2023 (our “4.875%2028 (the “4.50% Senior Notes”), which were issued in 2013 in a registered public offering. The 4.875%. Pursuant to the terms of the indenture governing the 4.50% Senior Notes, arethe existing guarantees on the 4.50% Senior Notes were released substantially concurrent with the September 1, 2022 amendment to the Credit Facility, which, as discussed above, released the guarantors under the previous Credit Facility. Prior to the amendment, the 4.50% Senior Notes were fully and unconditionally guaranteed on a senior unsecured, joint and several basis by certain of ourthe Company’s wholly-owned domestic restricted subsidiaries. Additionally, the indenture that governs the 4.50% Senior Notes contains a provision whereby certain restrictions that generally limit the ability of the Company and certain of its subsidiaries to (i) pay dividends, (ii) acquire shares of capital stock and (iii) make certain investments, are permanently terminated upon the 4.50% Senior Notes receiving “investment grade” ratings by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Group. In the first quarter of 2022, the 4.50% Senior Notes received such investment grade ratings, and, as a result, the aforementioned restrictions were permanently terminated. The other terms and conditions of the 4.50% Senior Notes remain unchanged. The 4.50% Senior Notes are subject to certain provisions and covenants, as more fully described in Note 7 - Debt and Note 17 - Supplemental Guarantor Condensed Consolidating Financial Information in the notes to the audited consolidated financial statements included in our 20162021 Form 10-K. Also see Note 16 - Supplemental Guarantor Condensed Unaudited Consolidating Financial Information in the notes to the condensed unaudited consolidated financial statements in this Form 10-Q, which are incorporated by reference.
Debt Covenants
We were in compliance with the provisions and covenants contained in our outstanding debt instruments as of September 30, 2017.2022.
IEA Acquisition Financing Activities
New Term Loan Facility     
On September 1, 2022, we entered into the New Term Loan Facility, which provided for $700.0 million in term loans, composed of $400.0 million in principal amount of three-year loans and $300.0 million in principal amount of five-year loans, which were drawn on October 7, 2022, the Closing Date of the IEA acquisition.
6.625% IEA Senior Notes
Upon consummation of the October 2022 acquisition of IEA, we assumed $300 million of IEA’s 6.625% senior unsecured notes that mature on August 15, 2029 (the “6.625% IEA Senior Notes”), of which approximately $74.9 million in principal amount of 6.625% IEA Senior Notes were exchanged for the same principal amount of 6.625% MasTec Senior Notes in a private exchange offer and consent solicitation to certain holders of 6.625% IEA Senior Notes, as described below. Interest on the 6.625% IEA Senior Notes is payable semiannually in arrears on February 15 and August 15 of each year. Prior to the acquisition of IEA by MasTec, the 6.625% IEA Senior Notes were guaranteed by the IEA Guarantors. Effective October 7, 2022, concurrent with the acquisition of IEA and the repayment in full and termination of IEA’s credit facility, which resulted in the release of such guarantors under the prior credit facility, the IEA Guarantors of the 6.625% IEA Senior Notes were automatically and unconditionally released and discharged from their obligations under the IEA Senior Notes Indenture. The 6.625% IEA Senior Notes will be structurally subordinated to all indebtedness and other liabilities, including trade payables, of the Company’s subsidiaries and will be effectively subordinated to any secured indebtedness of the IEA Issuer, to the extent of the value of the collateral securing such indebtedness. Certain restrictions set forth in the indenture governing the 6.625% IEA Senior Notes were suspended in October 2022 following the acquisition of IEA by MasTec because such notes were rated “investment grade” by at least two nationally recognized ratings agencies. These covenants will remain suspended for so long as such investment grade ratings are maintained.
Exchange Offer and 6.625% MasTec Senior Notes
In August 2022, we commenced a private exchange offer and consent solicitation to certain holders of the 6.625% IEA Senior Notes for up to an aggregate principal amount of $300.0 million of 6.625% MasTec Senior Notes, conditioned upon completion of the IEA acquisition. On October 26, 2022, approximately $74.9 million in principal amount of 6.625% IEA Senior Notes were exchanged for the same principal amount of 6.625% MasTec Senior Notes. Interest on the 6.625% MasTec Senior Notes is payable semiannually on February 15 and August 15 of each year, commencing on February 15, 2023. The 6.625% MasTec Senior Notes are general senior unsecured obligations of the Company, and rank equal in right of payment with all of the Company’s existing and future senior unsecured indebtedness and senior in right of payment to any of the Company’s
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future subordinated indebtedness. The 6.625% MasTec Senior Notes are effectively subordinated to all secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all obligations of the subsidiaries of the Company, including trade payables and the 6.625% IEA Senior Notes.
Additional Information
See “Recent Transactions,” above, regarding our recent acquisition of IEA and related debt transactions. For detailed discussion and additional information pertaining to our debt instruments and IEA-related financing activities, see Note 7 - Debt in the notes to the consolidated financial statements in this Form 10-Q, which is incorporated by reference, for current period balances and discussion and see Note 7 - Debt in the notes to the audited consolidated financial statements included in our 20162021 Form 10-K. Also see Note 7 - Debt in the notes to the condensed unaudited consolidated financial statements in this Form 10-Q for current period balances and discussion, which is incorporated by reference.
Off-Balance Sheet Arrangements
As is common in our industry, we have entered into certain off-balance sheet arrangements in the ordinary course of business. Our significant off-balance sheet transactions include liabilities associated with non-cancelable operating leases with durations of less than twelve months, letter of credit obligations, surety and performance and payment bonds entered into in the normal course of business, self-insurance liabilities, liabilities associated with multiemployer pension plans, liabilities associated with certainpotential funding obligations and indemnification andand/or guarantee arrangements and obligations relating to our costequity and equity investees,other investment arrangements, including our


variable interest entities. These off-balance sheet arrangements have not had, and are not reasonably likely to have, a material impact on our financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources in the next twelve months or in the foreseeable future. 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 condensed unaudited consolidated financial statements, which are incorporated by reference.
Impact of Inflation
Over the last year, inflation, supply chain and labor constraints have had a significant impact on the global economy, including on the construction industry in the United States. The primary inflationary factors directly affecting our operations are labor, and fuel costs, and to a lesser extent, material costs. Inflation has caused an increase in consumer prices, thereby elevating the risk of a recession. At the same time, the labor market remains at historically low levels of unemployment and companies are continuing to look to expand their employee workforces, creating further pressure on the supply of skilled labor. In times of low unemployment and/or high inflation, our labor costs may increase due to shortages in the supply of skilled labor. Additionally,labor and increases in compensation rates generally. Although most project materials are provided by our customers, increases in the pricescost of oilmaterials could negatively affect the economic viability of our customers’ projects, and gasaccordingly, demand for our services. Material and commodity prices are subject to unexpected fluctuations due to events outside of our control, including geopolitical events and fluctuations in global supply and demand, climate-related effects, and geopolitical events, such as the ongoing conflict in Ukraine, which events have recently caused market volatility, particularly in the oil markets.and gas markets, among others. Recent increases in labor, fuel and materials costs, to the extent that we have been unable to pass such increases along to our customers, have negatively affected our project margins, and could continue to affect our profitability in the future if we are unable to pass these costs along to our customers. Such market volatility can also affect our customers’ investment decisions and subject us to project cancellations, deferrals or unexpected changes in the timing of project work. Market prices for goods can also be affected by supply chain disruptions, such as those arising from the effects of the COVID-19 pandemic. Additionally, as discussed within “Interest Rate Risk” below, the current inflationary environment has also resulted in an increase in market interest rates, which has increased the rates of interest on our variable rate debt. We closely monitor inflationary factors, including the current rise in the rate of inflation, and any impactpotential effects they may have on our business operations, operating results and/or financial condition. While the impact of these factors cannot be fully eliminated, we proactively work to mitigate the effects of inflation; however, continued inflationary pressures and related interest rate increases could adversely affect our business operations in the future.
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
As of September 30, 2017,2022, our variable interest rate debt was primarily related to our Credit Facility. Interest on outstanding revolving loans and our Term Loan under our Credit Facility accrues at variable rates based, at our option, on a Eurocurrency rate, as defined in the Credit Facility, plus a margin, or a base rate, as defined in the Credit Facility, plus a margin. As of September 30, 2017,2022, we had $301$921 million aggregate principal amount of outstanding revolving loans under our Credit Facility with a weighted average interest rate of 2.96%4.30% and a term loanTerm Loan with a balance of $400$350 million withand an interest rate of 2.86%4.51%. The current year interest rates for our Credit Facility and Term Loan reflect basis point increases of approximately 290 and 320, respectively, over the comparable period in 2021. In addition, as of the October 2022 closing date of the IEA acquisition, the outstanding principal balance of revolving loans under our Credit Facility has increased and we have $700 million of variable rate loans outstanding under the New Term Loan Facility.
Our interest expense is affected by the overall interest rate environment. Our variable rate interest debt subjects us to risk from increases in prevailing interest rates. This risk increases in the current inflationary 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. A 100 basis point increase in the applicable interest rates under our credit facilitiesCredit Facility and Term Loan would have increased our interest expense by approximately $5$10 million for the nine month period ended September 30, 2017.2022.
As of September 30, 2017,2022, our fixed interest rate debt primarily included $400$600 million aggregate principal amount of 4.875%4.50% Senior Notes and an aggregate $187$345 million of capitalfinance lease obligations, and notes payable, which accrued interest at a weighted average interest rate of approximately 3.4%3.6%. In addition, in connection with the IEA acquisition, as of September 30, 2017.October 2022, we have an additional $300 million in aggregate principal amount of fixed notes bearing interest at 6.625%. 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. See “Recent Transactions” and “IEA Acquisition Financing Activities,” above, for discussion of the October 2022
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acquisition of IEA and related New Term Loan Facility, 6.625% IEA Senior Notes and 6.625% MasTec Senior Notes.
Foreign Currency Risk
Certain of our consolidated revenue and operating expenses are in foreign currencies. Our foreign operations are primarily in Canada. Revenue generated from foreign operations represented 3%2% of our total revenue for the nine month period ended September 30, 2017.2022. 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 are, however, subject to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than the functional currencies.currencies and for our foreign operations with a functional currency other than the local currency. Such transactions wereactivity was not material to our operations for the three or nine month periodsperiod ended September 30, 2017.2022. 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 three and nine month periodsperiod ended September 30, 2017,2022, foreign currency translation effectslosses, net, totaled approximately $0.6$4 million and $2.4 million of gains, respectively, and related primarily to our Canadian operations.operations in Canada and Mexico.
Our exposure to fluctuations in foreign currency exchange rates could increase in the future if we continue to expand our operations outside of the United States. 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 September 30, 2017.2022. 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 condensed unaudited 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.
ITEM 4.CONTROLS AND PROCEDURES
ITEM 4.         CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2017.2022.
Changes in Internal Control overOver Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 20172022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II.     OTHER INFORMATION
ITEM 1.
ITEM 1.    LEGAL PROCEEDINGS
Legacy Litigation
Refer to Note 14 –- Commitments and Contingencies in the notes to our condensed unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q, which is incorporated by reference in this Item 1, for a discussion of any recent material developments related to our legal proceedings since the filing of our 20162021 Form 10-K.
ITEM 1A.    RISK FACTORS
ThereSubject to the potential effects of general economic conditions, including inflation and rising interest rates, and MasTec’s recent acquisition of IEA and the financing thereof, on certain of the risks we normally face in operating our business, including those disclosed in our 2021 Form 10-K, there have been no material changes to either the cautionary statement regarding forward-looking statements or to any of the risk factors disclosed in our 20162021 Form 10-K, as updated by our Quarterly Report on Form 10-Q.10-Q and other filings we make with the SEC.
We are experiencing impacts from inflationary pressures, including with respect to fuel, labor and materials costs, which could adversely impact our profitability and cash flow.
The U.S. economy has entered a period of increasing inflation. We are experiencing, and may continue to experience, the general impact of inflationary market pressures on our business, particularly with respect to fuel, labor and materials costs. The inflationary environment and current general labor shortage has resulted in wage inflation as well as increased competition for skilled labor. It is possible that our labor, fuel and materials costs could continue to increase as we expand our operations and volume of work. We have not been, and may not be able to, fully adjust our contract pricing to compensate for these cost increases, which has affected, and may continue to affect, our profitability and cash flows. Inflationary pressures and related recessionary concerns in light of governmental and central bank efforts to mitigate inflation could also cause uncertainties for our customers and negatively affect their capital expenditure and maintenance budgets. Should inflation persist or increase, interest rates may continue to rise, and inflation overall could have a significant effect on the economy in general, and the construction industry in particular, as well as create volatility in the capital markets, which could adversely affect demand for our services, as well as our profitability and cash flows and/or our ability to obtain financing.
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
The following table provides information about repurchases of our common stock during the quarter ended September 30, 2017:2022:



Period
Total Number of Shares Purchased (a)
Average Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Program
Approximate Dollar Value of Shares that May Yet be Purchased under the Program (b)
July 1 through July 318,727 $72.74 — $77,326,434 
August 1 through August 318,622 $82.49 — $77,326,434 
September 1 through September 308,595 $79.26 — $77,326,434 
Total25,944 — 
(a)Includes 8,727, 8,174 and 8,595 shares reacquired by the Company on the open market pursuant to the Amended ESPPs in July, August and September of 2022, respectively, 448 shares withheld for income tax purposes in connection with shares issued under compensation and benefit programs in August of 2022.
(b)As of September 30, 2022, 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.



Period
 
Total Number of Shares Purchased (a)
 

Average Price Paid per Share
 
Total Number of Shares Purchased as Part of Publicly Announced Program (b)
 Approximate Dollar Value of Shares that May Yet be Purchased under the Program
July 1 through July 31 —
 $—
 —
 $100,000,000
August 1 through August 31 462
 $40.00
 —
 $100,000,000
September 1 through September 30 —
 $—
 —
 $100,000,000
Total 462
   —
  
(a)Reflects share repurchases associated with certain employee elections under compensation and benefit programs.
(b)No shares were purchased for the three months ended September 30, 2017 under the Company’s $100 million 2016 share repurchase program, which was publicly announced on February 26, 2016 and does not have an expiration date.
ITEM 4.MINE SAFETY DISCLOSURES
ITEM 4.    MINE SAFETY DISCLOSURES
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q.
ITEM 5.    OTHER INFORMATION
Not applicable.
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ITEM 6.    EXHIBITS
See theThe Exhibit Index following the signatures page to this Form 10-Q forbelow contains a list of exhibits filed or furnished with this Form 10-Q, which Exhibit Index is incorporated herein by reference.10-Q.


Exhibit No.Description
2.1
Agreement and Plan of Merger, dated as of July 24, 2022, by and among Infrastructure and Energy Alternatives, Inc., MasTec, Inc. and Indigo Acquisition I Corp., filed as Exhibit 2.1 to Infrastructure and Energy Alternatives, Inc.’s Current Report on Form 8-K filed with the SEC on July 25, 2022 and incorporated by reference herein.
10.1
10.2
Term Loan Agreement, dated as of September 1, 2022, by and among MasTec, Inc. and MasTec North America, Inc. as Borrowers, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto, filed as Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on September 1, 2022 and incorporated by reference herein.
10.3
Indenture, dated as of August 17, 2021, by and among IEA Energy Services LLC, the guarantors party thereto from time to time and Wilmington Trust National Association, as trustee, governing the 6.625% Senior Notes due 2029, filed as Exhibit 4.1 to Infrastructure and Energy Alternatives, Inc.’s Current Report on Form 8-K filed with the SEC on August 17, 2021 and incorporated by reference herein.
31.1*
Certifications required by Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2*
Certifications required by Section 302(a) of the Sarbanes-Oxley Act of 2002.
32.1**
Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002.
95.1*
101.INSInline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema
101.CALInline XBRL Taxonomy Extension Calculation Linkbase
101.DEFInline XBRL Taxonomy Extension Definition Linkbase
101.LABInline XBRL Taxonomy Extension Label Linkbase
101.PREInline XBRL Taxonomy Extension Presentation Linkbase
104The cover page of MasTec, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in Inline XBRL (included with the Exhibit 101 attachments).

______________

*    Filed herewith.
**    Furnished herewith.
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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
MASTEC, INC.
Date:November 3, 2022
/s/  JOSÉ R. MAS
José R. Mas
Chief Executive Officer
(Principal Executive Officer)
MASTEC, INC.
Date:November 2, 2017
/s/  JOSÉ R. MASGEORGE L. PITA
José R. Mas
Chief Executive Officer
(Principal Executive Officer)
/s/  GEORGE L. PITA
George L. Pita
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)



Exhibit Index

48
Exhibit No.Description
4.1*
Eighteenth Supplemental Indenture, dated as of November 1, 2017, by and among MasTec Inc., MasTec, Inc.’s subsidiary parties thereto, as guarantors, and U.S. Bank National Association, as trustee.
12.1*
Computation of Ratio of Earnings to Fixed Charges
31.1*
Certifications required by Section 302(a) of the Sarbanes-Oxley Act of 2002
31.2*
Certifications required by Section 302(a) of the Sarbanes-Oxley Act of 2002
32.1**
Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002
32.2**
Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*XBRL Instance Document
101.SCH*XBRL Taxonomy Extension Schema
101.CAL*XBRL Taxonomy Extension Calculation Linkbase
101.DEF*XBRL Taxonomy Extension Definition Linkbase
101.LAB*XBRL Taxonomy Extension Label Linkbase
101.PRE*XBRL Taxonomy Extension Presentation Linkbase
______________
*Filed herewith.
**Furnished herewith.


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