Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 364

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 6
Chunk 364
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 payments are expected to differ from Earn-out payments estimated as of the date of acquisition, any related fair value adjustments, including those related to finalization of completed earn-out arrangements, are recognized in the period that such expectation is considered probable.  Changes in the fair value of Earn-out liabilities for the Company’s traditional earn-outs, other than those related to measurement period adjustments, as described above, are recorded within other income or expense in the consolidated statements of operations.  For the mandatorily redeemable non-controlling interest, such changes were recorded within interest expense or other income, as appropriate.  Fair values of Earn-out liabilities are estimated using income approaches such as discounted cash flows or option pricing models, which are Level 3 inputs.  Earn-out liabilities are included within other current and other long-term liabilities, as appropriate, within the consolidated balance sheets.  Earn-out payments, to the extent they relate to estimated liabilities as of the date of acquisition, are classified within financing activities in the consolidated statements of cash flows.  Earn-out payments in excess of acquisition date liabilities are classified within operating activities in the consolidated statement of cash flows.LeasesIn the ordinary course of business, the Company enters into agreements that provide financing for machinery and equipment and for other of its facility, vehicle and equipment needs, including certain related party leases.  The Company reviews all agreements to determine if a leasing arrangement exists.  When a leasing arrangement is identified, a determination is made at inception as to whether the lease is an operating or a finance lease.  A lease exists when a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.  In determining whether a lease exists, the Company considers whether a contract provides both the right to obtain substantially all of the economic benefits from the use of an asset and the right to direct the use of the asset.  Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of the minimum future lease payments over the expected term of the lease.  The Company’s lease assets are primarily concentrated in vehicles, machinery and equipment.Leases with an initial term of twelve months or less are classified as short-term leases and are not recognized in the consolidated balance sheets unless the lease contains a purchase option that is reasonably certain to be exercised, or unless it is reasonably certain that the equipment will be leased for greater than twelve months.  The volume of lease activity for leases with an initial term of twelve months or less varies depending upon the number of ongoing projects