Company: MTZ
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000015615-25-000052
Chunk: 297

Company: MASTEC INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 6
Chunk 297
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 constraints have had a significant impact on the global economy, including on the construction industry in the United States.  As described above under “General Economic, Market and Regulatory Conditions,” although the Federal Reserve decreased the Federal Funds rate periodically since September, there continues to be uncertainty as to the Federal Reserve’s future actions caused by dynamic market and trade conditions, as well as continuing concerns regarding the rate of inflation and employment levels.  In light of these conditions, we expect elevated market interest rates and continuing levels of cost inflation due, in part, to trade actions described above under “General Economic, Market and Regulatory Conditions,” for the foreseeable future.  Elevated levels of labor, material and fuel costs have negatively affected our project margins to the extent that we have been unable to pass such cost increases along to our customers.  If current inflationary conditions persist, our profitability could continue to be affected in the future.  Market and economic volatility and/or uncertainty can also affect our customers’ investment decisions and subject us to project cancellations, deferrals or unexpected changes in the timing of project work.  Additionally, as discussed within “Interest Rate Risk” below, the inflationary environment has resulted in elevated market interest rates, which increases the rates of interest on our variable rate debt and, correspondingly, our interest expense.  Increased market interest rates could also have an adverse effect on the capital expenditure budgets of our customers, which could result in reduced or deferred demand for our services.

We closely monitor inflationary factors, including current rates of inflation and any potential 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 their effects; however, inflationary pressures and interest rate increases could adversely affect our business operations in the future.  For additional information regarding the effects of inflation on our business, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2024 Form 10-K.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

As of March 31, 2025, our variable interest rate debt was primarily related to our Credit Facility and our term loans.  As of March 31, 2025, we had approximately $40 million of revolving loans outstanding under our Credit Facility with a weighted average interest rate of 4.30%, a $328 million Term Loan under our Credit Facility with a weighted average interest rate of 5