Company: MTZ
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000015615-25-000128
Chunk: 123

Company: MASTEC INC
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 2
Chunk 123
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 on pipeline infrastructure and heavy civil projects, which acquisition is included within the Company’s Pipeline Infrastructure segment.  The Company expects these acquisitions will increase its service offerings and further advance its ability to meet increasing demand for data center infrastructure, in addition to expanding its heavy civil and pipeline infrastructure operations.The aggregate purchase price of the Company’s 2024 acquisitions was composed of approximately $88 million in cash, net of cash acquired, and a five year earn-out liability valued at approximately $56 million with respect to one of such acquisitions.  In connection with the acquisition within the Company’s Pipeline Infrastructure segment, MasTec acquired 60% of the equity interest of the company in exchange for consideration transferred of cash and a 40% equity interest in a MasTec Canadian subsidiary.  Determination of the estimated fair values of net assets acquired and consideration transferred for one of these acquisitions, which have all been accounted for as business combinations under ASC 805, was preliminary as of September 30, 2025; as a result, further adjustments to these estimates may occur.  The Company expects to finalize the valuation and complete the purchase price consideration allocation no later than one year from the acquisition date.  As of September 30, 2025, the remaining potential undiscounted earn-out liabilities for the 2024 acquisitions was estimated to be between $25 million and $52 million; however, there is no maximum payment amount.  See Note 4 – Fair Value of Financial Instruments for fair value estimates and other details related to the Company’s earn-out arrangements.  Approximately $45 million of the goodwill balance related to the 2024 acquisitions is expected to be tax deductible as of September 30, 2025.

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Note 4 – Fair Value of Financial Instruments

The Company’s financial instruments are primarily composed of cash and cash equivalents, accounts receivable and contract assets, notes receivable, cash collateral deposited with insurance carriers, life insurance assets, equity investments, certain other assets and investments, deferred compensation plan assets and liabilities, accounts payable and other current liabilities, acquisition-related contingent consideration and other liabilities, and debt obligations.Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability, also referred to as the “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