Company: MTZ
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000015615-25-000052
Chunk: 147

Company: MASTEC INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 2
Chunk 147
---
 discussion.

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.  These off-balance sheet arrangements have not had, and are not reasonably likely to have, a material impact on our financial condition, revenue or expenses, results of operations, liquidity, cash requirements or capital resources in the next twelve months or in the foreseeable future.  Refer to Note 4 – Fair Value of Financial Instruments, Note 12 – Commitments and Contingencies and Note 13 – Related Party Transactions in the notes to the consolidated financial statements in this Form 10-Q, which are incorporated by reference, and see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2024 Form 10-K for additional information related to our off-balance sheet arrangements.

33

Impact of Inflation

Over the past years, inflation, supply chain and labor 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