Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 253

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 5
Chunk 253
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.  The Company’s contracts often require significant services to integrate complex activities and equipment into a single deliverable, and are 

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therefore generally accounted for as a single performance obligation, even when delivering multiple services.  Contract amendments and change orders, which are generally not distinct from the existing contract, are typically accounted for as a modification of the existing contract and performance obligation.  The majority of the Company’s performance obligations are completed within one year.When more than one contract is entered into with a customer on or close to the same date, the Company evaluates whether those contracts should be combined and accounted for as a single contract, as well as whether those contracts should be accounted for as one, or more than one, performance obligation.  This evaluation requires significant judgment and is based on the facts and circumstances of the specific contracts.Remaining performance obligations represent the amount of unearned transaction prices under contracts for which work is wholly or partially unperformed, including the Company’s share of unearned transaction prices from its proportionately consolidated non-controlled joint ventures.  As of December 31, 2024, the amount of the Company’s remaining performance obligations was $10.0 billion.  Based on current expectations, the Company anticipates it will recognize approximately $6.4 billion, or 63.4%, of its remaining performance obligations as revenue during 2025, with the majority of the remaining balance expected to be recognized over the subsequent two year period.Variable Consideration.  Transaction prices for the Company’s contracts may include variable consideration, which comprises items such as change orders, claims and incentives.  Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the amount of consideration to which the Company will be entitled.  Variable consideration is included in the estimated transaction price if it is probable that when the uncertainty associated with the variable consideration is resolved, there will not be a significant reversal of the cumulative amount of revenue that has been recognized.  Management’s estimates of variable consideration and the determination of whether to include estimated amounts in transaction prices are based largely on discussions, correspondence or preliminary negotiations and past practices with the customer, engineering studies and legal advice and all other relevant information that is reasonably available at the time of the estimate.  The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue, typically on a cumulative catch-up basis, as such variable consideration, which typically pertains to changed conditions and scope, is generally for services encompassed under the existing contract.  To the extent un