Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 592

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1
Chunk 592
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 December 31, 2024, 2023 and 2022.Goodwill is required to be tested for impairment at the reporting unit level.  A reporting unit is an operating segment, or one level below the operating segment, which is referred to as a component.  Management identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) have a segment manager that regularly reviews the component’s operating results.  If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment test.  All of the Company’s reporting units are each composed of one component.During each of the three years in the period ended December 31, 2024, management performed a qualitative assessment for its goodwill and indefinite-lived intangible assets by examining relevant events and circumstances that could have an effect on their fair values, such as: macroeconomic trends and events, including: levels of inflation, market interest rates and/or supply chain disruptions; industry and/or market conditions, including the potential effects of regulatory and other uncertainty, including uncertainty related to the implementation and pace of spending under governmental infrastructure programs and initiatives; project permitting uncertainty; financial, competitive and other conditions, including declines in the operating performance of our reporting units; entity-specific events; the potential effects of longer-term changes in consumer behavior due to regulatory, climate-related or other factors, and other relevant factors or events that could affect earnings and cash flows.Quantitative testing was performed for selected reporting units during each of the three years in the period ended December 31, 2024.  Management estimated the fair values of the selected reporting units using a combination of market and income approaches using Level 3 inputs.  

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Under the market approach, fair values were estimated using published market multiples for comparable companies and applying them to revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”).  Under the income approach, a discounted cash flow methodology was used, considering: (i) management estimates, such as projections of revenue, operating costs and cash flows, taking into consideration historical and anticipated financial results; (ii) general economic, market and regulatory conditions; and (iii) the impact of planned business and operational strategies.  Management believes the assumptions used in its quantitative goodwill impairment tests are reflective of the risks inherent in the business models of the applicable reporting units and within the units’ industry.  Estimated discount rates were determined using the weighted average cost of