Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 157

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 4
Chunk 157
---
 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 unapproved change orders, claims and other variable consideration reflected in transaction prices are not resolved in the Company’s favor, or to the extent incentives reflected in transaction prices are not earned, there could be reductions in, or reversals of, previously recognized revenue.As of December 31, 2024 and 2023, the Company’s contract transaction prices included approximately $139 million and $194 million, respectively, of change orders and/or claims for certain contracts that were in the process of being resolved in the ordinary course of its business, including through negotiation, arbitration and other proceedings.  These transaction price adjustments, when earned, are included within contract assets or accounts receivable, net of allowance, as appropriate.  As of both December 31, 2024 and 2023, these change orders and/or claims primarily related to certain projects in the Company’s Clean Energy and Infrastructure and Power Delivery segments.  The Company actively engages with its customers to complete the final approval process for such amounts and generally expects these processes to be completed within one year.  Amounts ultimately realized upon final agreement by customers could be higher or lower than such estimated amounts.Allowance for Credit LossesThe Company maintains an allowance for credit losses for its financial instruments, which are primarily composed of accounts receivable and contract assets.  The measurement and recognition of credit losses involves the use of judgment and incorporates management’s estimate of expected lifetime credit losses based on historical experience and trends, current conditions and reasonable and supportable forecasts.  Management’s assessment of expected credit losses includes consideration of current and expected economic, market and industry factors affecting the Company’s customers, including their financial condition; the aging of account balances; historical credit loss experience; customer concentrations; customer credit-worthiness; availability of mechanics’ and other liens; and the existence of payment bonds and other sources of payment, among other factors.  Management evaluates its experience with historical losses and then applies this historical loss ratio to financial assets with similar characteristics.  The Company’s historical loss ratio or its determination of risk pools may be adjusted for changes in customer, economic, market or other circumstances.  The Company may also establish an allowance for credit losses for