Company: MTZ
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000015615-25-000079
Chunk: 420

Company: MASTEC INC
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 7
Chunk 420
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 “General Economic, Market and Regulatory Conditions,” for the foreseeable future.  Elevated levels of labor, material and fuel costs have negatively affected our project margins to the extent that we have been unable to pass such cost increases along to our customers.  If inflationary pressures persist, our profitability could continue to be affected in the future.  Market and economic volatility and/or uncertainty can also affect our customers’ investment decisions and subject us to project cancellations, deferrals or unexpected changes in the timing of project work.  

We closely monitor inflationary factors and any potential effects they may have on our business operations, operating results and/or financial condition.  While the impact of these factors cannot be fully eliminated, we proactively work to mitigate their effects; however, inflationary pressures and interest rate increases could adversely affect our business operations in the future.  For additional information regarding the effects of inflation on our business, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2024 Form 10-K.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our interest expense is affected by the prevailing interest rate environment.  While the cost of our variable debt fluctuates with changes in market interest rates, the interest on our fixed rate debt is unaffected by such changes.  We manage interest rate risk by maintaining a mix of fixed and variable rate debt obligations.  As of June 30, 2025, our variable interest rate debt was primarily related to our Credit Facility and 2025 Term Loan Facility.  As of June 30, 2025, we had approximately $47 million of revolving loans outstanding under our Credit Facility with a weighted average interest rate of 4.00% and a $600 million 2025 Term Loan Facility with a weighted average interest rate of 5.446%.

An additional 100 basis point increase in the applicable interest rates under our Credit Facility and 2025 Term Loan Facility would have increased our interest expense by approximately $4 million for the six months ended June 30, 2025.

As of June 30, 2025, our fixed interest rate debt primarily included $600 million aggregate principal amount of 4.500% Senior Notes, $550 million aggregate principal amount of 5.900% Senior Notes, $75 million aggregate principal amount of 6.625% Senior Notes and $333 million of finance lease obligations, which accrued interest at a weighted average interest rate of approximately