Company: MTZ
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000015615-25-000052
Chunk: 203

Company: MASTEC INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 4
Chunk 203
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 market interest rates, which increases 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 interest rate increases could adversely affect our business operations in the future.  For additional information regarding the effects of inflation on our business, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2024 Form 10-K.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

As of March 31, 2025, our variable interest rate debt was primarily related to our Credit Facility and our term loans.  As of March 31, 2025, we had approximately $40 million of revolving loans outstanding under our Credit Facility with a weighted average interest rate of 4.30%, a $328 million Term Loan under our Credit Facility with a weighted average interest rate of 5.68%, and a $281 million Five-Year Term Loan with a weighted average interest rate of 5.797%.  

Our interest expense is affected by the overall interest rate environment.  Although the Federal Reserve has periodically lowered short-term interest rates since September 2024, longer-term rates remain elevated and the timing, direction and extent of any future interest rate changes remain uncertain.  The interest we are charged on our variable-rate debt will fluctuate as a result of changes in market interest.  Interest on our fixed-rate debt would not change.  We manage interest rate risk by maintaining a mix of fixed and variable rate debt obligations.  Our variable rate debt subjects us to risk from increases in prevailing interest rates.  An additional 100 basis point increase in the applicable interest rates under our Credit Facility and Five-Year Term Loan would have increased our interest expense by approximately $2 million for the three month period ended March 31, 2025.

As of March 31, 2025, our fixed interest rate debt primarily included $600 million aggregate principal amount of 4.500% Senior Notes, $550 million aggregate principal amount of 5.900% Senior Notes