Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 2215

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 5
Chunk 2215
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 interest rate increases could adversely affect our business operations in the future.

Recently Issued Accounting Pronouncements

See Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is incorporated by reference.

ITEM  7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

Interest Rate Risk

As of December 31, 2024, our variable interest rate debt was primarily related to our Credit Facility and our term loans.  Outstanding revolving loans and the Term Loan under our Credit Facility bear interest, at our option, at a rate equal to either (a) Term Secured Overnight Financing Rate (“SOFR”), as defined in the Credit Facility, plus a margin of 1.125% to 1.625%, or (b) a Base Rate, as defined in the Credit Facility, plus a margin of 0.125% to 0.625%.  As of December 31, 2024, we had approximately $43 million aggregate principal amount of outstanding revolving loans under our Credit Facility with a weighted average interest rate of 4.970% and a Term Loan with a balance of $333 million and an interest rate of 6.220%.  The current year interest rates for outstanding revolving loans under our Credit Facility and Term Loan reflect basis point decreases of approximately 270 and 90, respectively, over the comparable period in 2023.  Outstanding debt under the $285.0 million Five-Year Term Loan bears interest, at our option, at a rate equal to either (a) Term SOFR plus a margin of 1.250% to 1.625%, or (b) a Base Rate, plus a margin of 0.250% to 0.625%. As of December 31, 2024, the Five-Year Term Loan accrued interest at a weighted average rate of 6.253%.

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