Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 301

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 6
Chunk 301
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, operational and financial professionals, and other professional expertise, as warranted.  Management reviews estimates of total contract transaction price and costs on an ongoing basis.  Changes in job performance, job conditions and management’s assessment of the estimated amount and probability of variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and our profit recognition.  Changes in these factors could result in revisions to the amount of revenue recognized in the period in which the revisions are determined, which revisions could materially affect our consolidated results of operations for that period.  Provisions for losses on uncompleted contracts are recorded in the period in which such losses are estimated based on management’s experience and judgment.  For the year ended December 31, 2024, project profit was affected by less than 5% as a result of changes in contract estimates included in projects that were in process as of December 31, 2023.  Changes in recognized revenue, net, as a result of changes in total contract transaction price estimates, including from variable consideration, and/or changes in cost estimates, related to performance obligations satisfied or partially satisfied in prior periods, for the year ended December 31, 2024, positively affected revenue by approximately 0.1%.

Performance Obligations.  A performance obligation is a contractual promise to transfer a distinct good or service to a customer.  The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied.  Our contracts often require significant services to integrate complex activities and equipment into a single deliverable, and are therefore generally accounted for as a single performance obligation, even when delivering multiple distinct services.  Contract amendments and change orders, which are generally not distinct from the existing contract, are typically accounted for as a modification of the existing contract and performance obligation.  The majority of our performance obligations are completed within one year.

When more than one contract is entered into with a customer on or close to the same date, management evaluates whether those contracts should be combined and accounted for as a single contract, as well as whether those contracts should be accounted for as one, or more than one, performance obligation.  This evaluation requires significant judgment and is based on the facts and circumstances of the specific contracts.

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Variable Consideration.  Transaction prices for our contracts may include variable consideration, which comprises items such as change orders, claims and incentives.  Management estimates variable consideration for a performance obligation utilizing estimation methods that we believe best predict the amount