Company: MTZ
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000015615-25-000021
Chunk: 2347

Company: MASTEC INC
Filing Date: 2025-02-28
Form: 10-K
Item: Item 6
Chunk 2347
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 at a given time, as well as the location and type of equipment required in connection with those projects.  Lease payments for short-term leases are recognized on a straight-line basis over the lease term, and primarily relate to equipment used on construction projects, for which the rentals are based on daily, weekly or monthly rental rates, and typically contain termination for convenience provisions.  Lease determinations are reassessed in the event of a change in lease terms.  The Company has a limited number of sublease, equipment and other leasing arrangements, which are not considered material to the consolidated financial statements.As of December 31, 2024, the Company’s leases have remaining lease terms of up to 14 years.  Lease agreements may contain renewal clauses, which, if elected, generally extend the term of the lease for 1 to 5 years for both equipment and facility leases.  Certain lease agreements may also contain options to purchase the leased property and/or options to terminate the lease.  In addition, lease agreements may include periodic adjustments to payment amounts for inflation or other variables, or may require payments for taxes, insurance, maintenance or other expenses, which are generally referred to as non-lease components.  The Company accounts for non-lease components together with the related lease components for all classes of leased assets.  The Company’s lease agreements do not contain significant residual value guarantees or material restrictive covenants.Lease term, discount rate, variable lease costs and future minimum lease payment determinations require the use of judgment, and are based on the facts and circumstances of each lease.  Economic incentives, intent, past history and business needs are among the factors considered to determine if renewal and/or purchase options are reasonably certain to be exercised.  The majority of the Company’s lease agreements do not explicitly state the discount rate implicit in the lease, therefore, the Company generally uses an incremental borrowing rate to determine the value of its lease obligations.  The incremental borrowing rate represents the rate of interest that would be paid to borrow on a collateralized basis over a similar term.  The Company determines its incremental borrowing rate using a portfolio approach based on information available as of the lease commencement date, including applicable lease terms and the current economic environment.Finance Leases Finance lease assets are recorded within property and equipment, with a corresponding amount recorded within the Company’s debt obligations.  Finance lease expense is composed of depreciation expense on the leased asset and interest on the lease liability.  Additions to finance leases are included within the supplemental disclosures of non-cash information in the consolidated