Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 1165

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 1165
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 business, financial condition and results of operations.  In addition, although the Federal Reserve has periodically lowered short-term interest rates since September 2024, interest rates, particularly long-term rates, remain elevated along with levels of inflation, and we have been subject to, and may continue to be subject to, the general effect of such inflationary market pressures on our business, particularly with respect to interest expense and labor, materials and fuel costs.

Recent inflationary conditions and general labor shortages have resulted in wage inflation as well as increased competition for skilled labor.  Even if inflationary pressures moderate, we expect our labor, materials and fuel costs, in particular, to remain elevated if we continue to expand our operations and volume of work.  We have not been, and may not be able to, fully adjust our contract pricing to compensate for these cost increases, which has affected, and may continue to affect, our profitability and cash flows.  Inflationary pressures and the related elevated levels of market interest rates have caused, and could continue to cause, uncertainty for our customers, which has negatively affected, and could continue to negatively affect, their capital expenditure and maintenance budgets.

Should inflation persist or increase, interest rates could remain at elevated levels or increase, which, together with inflation, could have a significant negative effect on the economy in general, and on the construction industry in particular, as well as create volatility in the capital markets, which could adversely affect demand for our services, as well as our profitability, liquidity, cash flows and/or financial condition.  We continually monitor general economic conditions and the market conditions of the industries our customers serve and their relative health compared to the economy as a whole.  Uncertain or adverse economic or political conditions, the lack of availability of debt or equity financing and/or higher interest rates could cause our customers to reduce their capital spending or seek more favorable pricing and other contract terms and/or cause project cancellations or deferrals.

Our operations and/or our customers could be negatively affected by market-related supply chain disruptions caused by delays, shortages of, and increased costs for, the materials necessary to perform projects.  Delays for certain materials, most notably for certain of our clean energy customers, have eased primarily starting in 2023; however, if such delays were to recur it could affect our ability to perform these projects.

The oil and gas markets have historically been and are likely to continue to be volatile.  Demand for pipeline construction services is sensitive to levels of activity in the oil and gas industry, as well as industrial and utility