Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 297

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 6
Chunk 297
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 reduced if actual costs to complete a project exceed our project cost estimates and we are unable to pass the increased costs to our customers.  Estimated losses on contracts, or the excess of the total estimated costs to complete a contract over the contract’s total estimated contract 

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transaction price, are recognized in the period in which such losses are determined.  Factors impacting our costs of revenue, excluding depreciation and amortization, and project profit, include:

Project Mix.  Revenue mix impacts our overall project margins, as margin opportunities and/or risks can vary by project type, industry, and by segment over time.  For example, installation work that is performed on a fixed price basis has a higher level of margin opportunity or risk than maintenance or upgrade work, which is often performed under pre-established fixed price per unit or time and materials pricing arrangements.  As a result, changes in project mix between installation work performed on a fixed price basis, and maintenance or upgrade services that are performed under pre-established fixed price per unit or time and materials pricing arrangements, can affect our project margins in a given period.

Seasonality, Weather and Geographic Mix.  Seasonal patterns, which can be affected by weather conditions, can have a significant effect on project margins.  Adverse or favorable weather conditions can affect project margins in a given period.  For example, extended periods of rain or snowfall can negatively affect revenue and project margins due to reduced productivity from projects being delayed or temporarily halted.  Conversely, when weather remains dry and temperatures are accommodating, more work can be done, sometimes with less cost, which can favorably affect project margins.  The level of demand for restoration and storm work, which, by its nature, is unpredictable, can also favorably or negatively affect our revenue composition and project margins in a given period.  In addition, the mix of business conducted in different geographic areas can affect project margins due to the particular characteristics of the physical locations where work is being performed, such as mountainous or rocky terrain versus open terrain.  Site conditions, including unforeseen underground conditions, can also affect project margins.

Price and Performance Risk.  Overall project margins may fluctuate due to project pricing and job conditions, changes in the cost of labor and materials, crew availability, job productivity and work volume.  Job productivity can be affected by factors such as quality of the work crew and equipment, the quality of engineering specifications and designs, availability of skilled labor, environmental or regulatory factors and customer decisions or delays.  Job productivity can also be influenced by weather conditions