Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 1967

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 3
Chunk 1967
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 reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

52

Revenue Recognition – Determination of Estimated Costs to Complete Certain Contracts Recognized Over Time

The Company recognized revenue of $12.3 billion for the year ended December 31, 2024, of which a majority relates to revenue recognized from contracts for specific projects requiring the construction and installation of an entire infrastructure system, or specified units within an infrastructure system. As described in Note 1 to the consolidated financial statements, revenue related to these contracts is recognized over time using the cost-to-cost measure of progress, which is an input method. Contract costs include all direct materials, equipment, labor and subcontracted costs related to contract performance. The cost estimation processes used for recognizing revenue over time under the cost-to-cost method require management to make significant assumptions and judgments, based primarily on the professional knowledge and experience of the Company’s project managers, operational and financial professionals. Changes in job performance and job conditions are factors that influence estimates of the total costs to complete those contracts. Changes in these factors that result in revisions to the amount of revenue recognized for a given project are recognized in the period in which the revisions are determined. 

The principal considerations for our determination that performing procedures relating to revenue recognition, specifically the determination of estimated costs to complete certain contracts recognized over time, is a critical audit matter are (i) the significant judgment by management in determining the estimated contract costs to complete certain contracts recognized over time; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s estimate of costs to complete certain contracts recognized over time. 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with