The Mastec, Inc. 401(k) Retirement Savings Plan
Financial Statements and
Supplemental Schedule
December 31, 1999 and 1998
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The MasTec, Inc. 401(k) Retirement Savings Plan
Table of Contents
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Pages
Report of Independent Certified Public Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits 2
as of December 31, 1999 and 1998
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 1999 and 1998 3
Notes to Financial Statements 4-9
Supplemental Schedule:
Schedule of Assets Held for Investment Purposes
as of December 31, 1999 10
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Report of Independent Certified Public Accountants
To the Participants and Administrator of
The MasTec, Inc. 401(k) Retirement Savings Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of The MasTec, Inc. 401(k) Retirement Savings Plan (the "Plan") at December 31,
1999 and 1998, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes as of December 31, 1999 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PricewaterhouseCoopers, LLP
June 16, 2000
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The MasTec, Inc. 401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
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<TABLE>
<S> <C> <C>
1999 1998
------------ -----------
Assets:
Investment at fair value $ 26,320,770 $17,931,885
Participant notes receivable 808,426 585,630
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Total investments 27,129,196 18,517,515
Receivables:
Participants'contributions 404,690 369,877
Employers'contributions 73,705 65,278
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Total receivables 478,395 435,155
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Net assets available for benefits $ 27,607,591 $18,952,670
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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The MasTec, Inc. 401(k) Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 1999 and 1998
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<TABLE>
<S> <C> <C>
1999 1998
------------ ------------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair
value of investments $ 5,425,807 $ 1,184,227
Interest 10,228 7,152
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5,436,035 1,191,379
Contributions:
Participants' 6,502,839 10,679,566
Employer's 669,095 502,814
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Total additions 12,607,969 12,373,759
Deductions from net assets attributed to:
Participants' withdrawals 3,953,048 1,657,173
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Total deductions 3,953,048 1,657,173
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Net increase 8,654,921 10,716,586
Net assets available for benefits:
Beginning of year 18,952,670 8,236,084
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End of year $ 27,607,591 $ 18,952,670
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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The MasTec, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statement
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1. Description of Plan
The following description of The MasTec, Inc. (the "Company" or "MasTec")
401(k) Retirement Savings Plan (the "Plan") provides only general
information. The Plan agreement contains a more complete description of the
Plan's provisions.
General
The Plan is a defined contribution plan covering all employees of the
Company who are age twenty-one or older and have six months of service.
Eligible participants may enter the Plan on January 1 or July 1. It is
subject to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA") and is exempt from federal and state income taxes.
The Plan is administered by the Employee Benefits Committee (Plan
Administrator) of MasTec, Inc. Great-West Life & Annuity Insurance Company
is the Recordkeeper of the Plan for all funds except for the MasTec Common
Stock Fund which the Trustee is Norwest Bank, Minnesota, N.A. Plan assets
are held by the Recordkeeper.
Contributions
Participants may contribute from 1% to 15% of their pre-tax annual
compensation, subject to certain dollar amount limits, as defined in the
plan agreement. The maximum contribution allowed during 1999 and 1998 was
$10,000.
Company contributions are 25% of each dollar up to 4% of the participant's
gross salary. The Company match is exclusively in MasTec Common Stock.
Whether and to what extent the Company will match employee contributions
beyond 1999 will be at MasTec's discretion.
Effective January 1, 2000, Company contributions will be 50% of each dollar
up to 4% of the participant's gross salary.
During 1999 and 1998, the defined contribution plans of certain companies
acquired by MasTec, Inc. were converted to the Plan, and the related
employees became participants of the Plan. The net assets of these plans
were converted at a fair value of approximately $1,740,000 and $6,653,000,
respectively and invested in the Plan in accordance with the related
employees investment option elections. Such amounts are included as
participants' contributions for 1999 and 1998.
Participant Accounts
Each participant's account is credited with the participant's contribution,
the Company's contribution, rollovers into the Plan and an allocation of
the participant accounts earnings. Each participant's account is reduced by
any withdrawals or distributions and an allocation of (a) his share of
investment losses and depreciation in value of investments and (b) any
administrative fees paid by the Plan. The benefit to which a participant is
entitled is the participant's vested account balance.
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The MasTec, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements
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Investment Options
Upon enrollment in the Plan, a participant may direct contributions to any
of the following investment options. Participants may elect to invest
contributions in 1% increments, among any of the following:
MasTec Common Stock Fund - Funds are invested solely in shares of the
common stock, par value $0.10 per share of MasTec, Inc. The fund will buy
up to the maximum shares determined under the rules of ERISA and the
Internal Revenue Code (IRC). A participant may not invest more than 50% of
his aggregate contributions in the MasTec, Inc. common stock fund.
Life Insurance Fund - The fund was not offered as an investment option to
participants after July 1, 1994.
Guaranteed Certificate Fund - Funds are invested in certificates of deposit
guaranteed by Great-West Life & Annuity Insurance Company.
Small-Cap Funds - Funds may be invested in the Orchard Index 600 Fund, Lord
Abbett Developing Growth Fund, Maxim Ariel Small-Cap Value Portfolio or
Maxim Loomis Sayles Small-Cap Value Portfolio.
Bond Funds - Funds may be invested in the Maxim Bond Index, Maxim U.S.
Government Mortgage Securities Portfolio, Maxim Loomis Sayles Corporate
Bond Portfolio, Maxim Global Bond Portfolio or Maxim Short-Term Maturity
Bond Portfolio.
Large-Cap Funds - Funds may be invested in the AIM Charter Fund, Orchard
Index 500 Fund, Maximum Founder's Growth & Income, American Century Ultra
Fund, AIM Weingarten Fund, Maxim Growth Index Portfolio, Fidelity Advisor
Equity, Fidelity Advisor Growth Opportunities Fund, Putnam Fund for Growth
or Income or Maxim Value Index Portfolio.
Profile Series Portfolio - Funds may be invested in the Profile Series I -
Aggressive Portfolio, Profile Series II - Moderately Aggressive Portfolio,
Profile Series III- Moderate Portfolio, Profile Series IV - Moderately
Conservative Portfolio or Profile Series V - Conservative Portfolio.
International Funds - Funds may be invested in the Maxim Index European
Portfolio, Fidelity Advisor Overseas Fund, Maxim Invesco ADR, Maxim Index
Pacific Portfolio or Putnam Global Growth Fund.
Mid-Cap Funds - Funds may be invested in the Aim Constellation Fund or
Maxim T. Rowe Price Mid-Cap Growth.
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The MasTec, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements
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Short-Term Fund - Funds are invested in the Maxim Money Market Portfolio.
The following investments represented 5 percent or more of the Plan's net
assets at December 31, 1999:
Maxim Money Market Portfolio $ 4,723,125
American Century Ultra Fund 2,225,358
Fidelity Advisor Growth Opportunities Fund 1,691,331
Profile Series I - Aggressive Portfolio 2,318,948
Profile Series II - Moderately Aggressive Portfolio 1,417,497
MasTec Common Stock Fund 4,702,122
The following investments represented 5 percent or more of the Plan's net
assets at December 31, 1998:
Maxim Money Market Portfolio $ 6,186,843
Fidelity Advisor Growth Opportunities Fund 1,638,762
Profile Series I - Aggressive Portfoio 1,381,605
MasTec Common Stock Fund 1,979,090
Transfers and Rollovers
Participants may rollover balances held in other qualified retirement plans
at the discretion of the Plan Administrator.
Withdrawals
Certain withdrawals from participant accounts are only allowed for
financial hardship (in accordance with IRS regulations).
Participant Notes Receivable
Participants may borrow a maximum of the lesser of (1) $50,000 or (2) fifty
percent (50%) of their individual vested account balance. Loan terms range
from 1-5 years or up to 20 years for the purchase of a primary residence.
The loans bear interest at the published prime rate in the Wall Street
Journal plus 1%.
Payment of Benefits
On termination of service, due to death, disability, or retirement, a
participant receives payment of the vested accrued benefit in a single lump
sum or the payment can be deferred under certain circumstances to normal
retirement age. For termination of service due to other reasons, a
participant is entitled to receive only the vested percentage of his
account balance.
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The MasTec, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements
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Vesting
Participants are immediately vested in their contributions and rollovers
and the earnings thereon. Participants are vested in Company contributions
as follows:
<TABLE>
Years of Service Percentage
---------------- ----------
<S> <C> <C>
1 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
</TABLE>
Participants forfeit the portion of their account balance to the extent not
vested.
Effective January 1, 2000 participants will be vested in Company
contributions as follows:
<TABLE>
Years of Service Percentage
---------------- ----------
<S> <C> <C>
1 33%
2 66%
3 or more 100%
</TABLE>
2. Summary of Significant Accounting Policies
The significant accounting policies followed by the Plan are as follows:
Basis of Accounting
The financial statements of the Plan are prepared in conformity with
generally accepted accounting principles.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions and deductions
during the reporting period. Actual results could differ from those
estimates.
Risk and Uncertainties
The plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Investment securities are exposed to various risks, such as
interest rate, market and credit. Due to the level of risk associated with
certain investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least reasonably
possible that changes in risks in the near term would materially affect
participants' account balances and the amounts reported in the statement of
net assets available for plan benefits and the statement of changes in net
assets available for plan benefits.
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The MasTec, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements
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Valuation of Investments and Income Recognition
The Plan's investments are valued by the recordkeeper (Note 1) and are
stated at fair value using quoted market prices.
Purchase and sales transactions are recorded on a trade date basis. Any
gain or loss resulting from the sale of fund units is determined as the
difference between the sales proceeds and the average cost of the units
sold. Investment income is recorded on the accrual basis.
Investment Income
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation/depreciation in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Participant Withdrawals
Withdrawals made by participants are recorded when paid.
Administrative Costs
All administrative expenses of the Plan, including, without limitation, the
allocable portion of compensation of plan administrative staff and fees of
employee benefits consultants, legal counsel, and auditors' fees are
chargeable to the Plan. The Company may, at its sole discretion, pay any
such expenses, in whole or in part. The Company assumed responsibility for
administrative expenses for the years ended December 31, 1999 and 1998.
3. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their accounts.
4. Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated June 17, 1997, that the Plan is designed in accordance with
applicable sections of the IRC. The Plan has been amended since receiving
the determination letter. However, the Plan Administrator and the Plan's
legal counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
<PAGE>
The MasTec, Inc. 401(k) Retirement Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1999
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<TABLE>
Identity of Party Description of Investment Fair Value
----------------- ------------------------- ----------
<S> <C>
Maximum Bond Index Bond Fund $ 58,920
Maximum Loomis Sayles Corporate Bond Portfolio Bond Fund 170,374
Maximum US Government Mortgage Securities Portfolio Bond Fund 78,096
Maximum Global Bond Portfolio Bond Fund 56,340
Maximum Short-Term Maturity Bond Portfolio Bond Fund 51,611
Maximum Money Market Portfolio Short-Term Fund 4,723,125
Maximum Index European Portfolio International Fund 79,156
Fidelity Advisor Overseas Fund International Fund 160,723
Maxim Invesco ADR International Fund 41,312
Maxim Index Pacific Portfolio International Fund 184,185
Putnam Global Growth Fund International Fund 939,125
AIM Charter Fund Large-Cap Fund 415,879
Orchard Index 500 Fund Large-Cap Fund 566,036
Maximum Founder's Growth & Income Large-Cap Fund 207,411
American Century Ultra Fund Large-Cap Fund 2,225,358
AIM Weingarten Fund Large-Cap Fund 643,665
Maximum Growth Index Portfolio Large-Cap Fund 879,014
Fidelity Advisor Equity Large-Cap Fund 738,144
Fidelity Advisor Growth Opportunities Fund Large-Cap Fund 1,691,331
Putnam Fund for Growth & Income Large-Cap Fund 559,576
Maxim Value Index Portfolio Large-Cap Fund 384,547
AIM Constellation Fund Mid-Cap Fund 890,361
Maxim T.Rowe Price Mid Cap Growth Mid-Cap Fund 301,539
Portfolio Series I - Aggressive Portfolio Profile Series 2,318,948
Portfolio Series II - Moderately Aggressive Portfolio Profile Series 1,417,497
Portfolio Series III - Moderate Portfolio Profile Series 751,131
Portfolio Series IV - Moderately Conservative Portfolio Profile Series 228,552
Portfolio Series V - Conservative Portfolio Profile Series 106,847
Orchard Index 600 Fund Small-Cap Fund 146,940
Lord Abbett Developing Growth Fund Small-Cap Fund 156,298
Maxim Ariel Small-Cap Value Portfolio Small-Cap Fund 32,957
Maxim Loomis Sayles Small-Cap Value Portfolio Small-Cap Fund 176,037
Great-West Life & Annuity Insurance Company Guaranteed Certified Fund 204,546
Mastec Common Stock Fund Common Stock Fund 4,702,122
First Colony Life Insurance Company Life Insurance Fund 33,067
Participant Loans, fully amortized Loans to participants 8%-11% 808,426
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$ 27,129,196
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</TABLE>
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CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-55327) of MasTec, Inc. of our report dated June
16, 2000 relating to the financial statements of The MasTec, Inc. 401 (k)
Retirement Savings Plan, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Miami, Florida
June 29, 2000
