15615--2/28/2008--MASTEC

related topics

{cost, regulation, environmental}

{cost, contract, operation}

{customer, product, revenue}

{tax, income, asset}

{stock, price, operating}

{loss, insurance, financial}

{capital, credit, financial}

{interest, director, officer}

{financial, litigation, operation}

{provision, law, control}

{condition, economic, financial}

{regulation, government, change}

{debt, indebtedness, cash}

{competitive, industry, competition}

{personnel, key, retain}

{product, liability, claim}

{cost, operation, labor}

Our industry is highly competitive which may reduce our market share and harm our financial performance. Risks Related to Our Business We derive a significant portion of our revenue from a few customers, and the loss of one of these customers or a reduction in their demand for our services could impair our financial performance. Our profitability and liquidity could decline if certain customers reduce the amounts they pay for our services or if our customers are unable to pay for our services. Most of our contracts do not obligate our customers to undertake any infrastructure projects or other work with us. We recorded an unrealized loss in 2007 to reduce the carrying value of certain auction rate securities we hold, and we may incur additional impairment charges with respect to auction rate securities in future periods. Most of our contracts may be canceled on short notice, so our revenue is not guaranteed. We may not accurately estimate the costs associated with our services provided under fixed-price contracts which could impair our financial performance. We recognize revenue for our installation/construction fixed price contracts using the percentage-of-completion method, therefore, variations of actual results from our assumptions may reduce our profitability. Amounts included in our backlog may not result in actual revenue or translate into profits. Our business is seasonal and is affected by adverse weather conditions and the spending patterns of our customers, exposing us to variable quarterly results. We are self-insured against many potential liabilities. Increases in our insurance premiums or collateral requirements could significantly reduce our profitability, liquidity and availability under our credit facility. We may be unable to obtain sufficient bonding capacity to support certain service offerings and the need for performance and surety bonds may reduce our availability under our credit facility. We have agreed to keep certain liabilities related to the state Department of Transportation related projects and assets that were sold in February 2007. We may incur goodwill impairment charges in our reporting entities which could harm our profitability. We may incur restructuring charges which could reduce our profitability. Our revolving credit facility and senior notes impose restrictions on us which may prevent us from engaging in transactions that might benefit us, including responding to changing business and economic conditions or securing additional financing, if needed. If we are unable to attract and retain qualified managers and skilled employees, we will be unable to operate efficiently which could reduce our revenue, profitability and liquidity. Increases in the costs of fuel could reduce our operating margins. We may choose, or be required, to pay our subcontractors even if our customers do not pay, or delay paying, us for the related services. Our failure to comply with environmental laws could result in significant liabilities. Our failure to comply with the regulations of the U.S. Occupational Safety and Health Administration the U.S. Department of Transportation and other state and local agencies that oversee transportation and safety compliance could reduce our revenue, profitability and liquidity. Our financial results are based, in part, upon estimates and assumptions that may differ from actual results. Our business is subject to hazards that could result in substantial liabilities and weaken our financial condition. Many of our communications customers are highly regulated and the addition of new regulations or changes to existing regulations may adversely impact their demand for our specialty contracting services and the profitability of those services. Claims, lawsuits and proceedings could reduce our profitability and liquidity and weaken our financial condition. Acquisitions involve risks that could result in a reduction of our profitability and liquidity. We may incur significant costs as a result of our lawsuit with our excess insurance carrier. Risks Related to Our Company and Our Common Stock The market price of our common stock has been, and may continue to be, highly volatile. A small number of our existing shareholders have the ability to influence major corporate decisions. Our articles of incorporation and certain provisions of Florida law contain anti-takeover provisions that may make it more difficult to effect a change in our control.

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15615--2/28/2008--MASTEC_INC