15615--3/1/2006--MASTEC

related topics

{cost, regulation, environmental}

{cost, contract, operation}

{tax, income, asset}

{stock, price, operating}

{customer, product, revenue}

{financial, litigation, operation}

{capital, credit, financial}

{provision, law, control}

{loss, insurance, financial}

{regulation, change, law}

{condition, economic, financial}

{debt, indebtedness, cash}

{competitive, industry, competition}

{regulation, government, change}

{product, market, service}

{personnel, key, retain}

{interest, director, officer}

{cost, operation, labor}

Many of the industries we serve are subject to consolidation and rapid technological and regulatory change, and our inability or failure to adjust to our customers changing needs could reduce demand for our services. 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, the amount they pay or their ability to pay, for our services could impair our financial performance. Most of our contracts do not obligate our customers to undertake any infrastructure projects or other work with us. 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 account for a majority of our projects using units-of-delivery methods or percentage-of-completion, 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 credit facility availability. 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. New accounting pronouncements including SFAS 123R may significantly impact our future results of operations and earnings per share. We may incur goodwill impairment charges in our reporting entities which could harm our profitability. We may incur long-lived assets impairment charges which could harm our profitability. We may incur restructuring charges which could reduce our profitability. Our revolving credit facility and senior subordinated 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 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. Risks Related to Our Company and Our Common Stock We may incur significant damages and expenses due to the purported class action complaints that were filed against us and certain of our officers. 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 Florida law contain anti-takeover provisions that may make it more difficult to effect a change in our control.

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15615--3/1/2006--MASTEC_INC