Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 232

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 5
Chunk 232
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 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, but moderating, levels of cost inflation for the foreseeable future.  The primary inflationary factors directly affecting our operations are labor, material and fuel costs.  The labor market remains at historically low levels of unemployment, creating 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 and increases in compensation rates generally.  Immigration actions may also affect the availability of labor.  Although most project materials are provided by our customers, increases in the cost of materials could negatively affect the economic viability of our customers’ projects, and accordingly, demand for our services.  Material and commodity prices are subject to unexpected fluctuations due to events outside of our control, including fluctuations in global supply and demand, climate-related effects, and geopolitical events, such as military conflicts, including the Russia-Ukraine conflicts and the escalating tensions in the Middle East, and trade disputes, which events have caused market volatility and could create heightened global market volatility in the 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.  Market prices for goods can also be affected by supply chain disruptions, which in the past have negatively affected our operations, as discussed in Item 1. “Business,” under “Suppliers, Materials and Working Capital.”  Additionally, as discussed within “Interest Rate Risk” below, the recent inflationary environment has resulted in elevated market interest rates, which has increased 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