Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts but are the intent, belief, or current expectations, of our business and industry, and the assumptions upon which these statements are based. Words such as "anticipates", "expects", "intends", "will", "could", "would", "should", "may", "plans", "believes", "seeks", "estimates" and variations of these words and the negatives thereof and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These risks and uncertainties include those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report and in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, including those described under "Risk Factors" in the Form 10-K as updated by Item 1A "Risk Factors" in this report and other of our SEC filings. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. Readers are cautioned to not place undue reliance on forward-looking statements, which reflect our management's view only as of the date of this report. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

Overview

We are a leading specialty contractor operating mainly throughout the United States and across a range of industries. Our core activities are the building, installation, maintenance and upgrade of utility and communications infrastructure, including but not limited to, electrical utility transmission and distribution, wind farm, solar farm, other renewable energy and natural gas infrastructure, wireless, wireline and satellite communications and water and sewer systems. Our primary customers are in the following industries: utilities (including wind farms and other renewable energy, natural gas gathering systems and pipeline infrastructure), communications (including telephony, satellite television and cable television) and government (including water and sewer, utilities and communications work on military bases).

In June 2009, we completed an underwritten public offering for $115 million of 4% senior convertible notes (the "Senior Convertible Notes"), as well as a public secondary offering of 5.175 million shares of common stock by certain selling shareholders. The new Senior Convertible Notes are convertible, under certain circumstances, into shares of MasTec common stock at a conversion price of approximately $15.76 per share of common stock, subject to customary anti-dilution adjustment terms for these types of notes.

The proceeds from the Senior Convertible Notes were used to repay the $55 million of 8% convertible notes, convertible at $12.00 per share, issued in connection with our 2008 acquisition of Wanzek, and to pay off the outstanding balance on our Credit Facility of approximately $20 million on June 17, 2009. The remaining net proceeds will be used for working capital, possible acquisitions of assets and businesses, and for general corporate purposes.

Concurrent with the issuance of the Senior Convertible Notes, Jon Wanzek, founder and CEO of Wanzek Construction, Inc., and his affiliates sold 5.175 million shares of MasTec common stock in an underwritten registered public offering. Mr. Wanzek and his affiliates received 7.5 million MasTec shares in connection with our 2008 acquisition of Wanzek. Mr. Wanzek continues to serve as President of Wanzek under a long-term employment contract. We did not receive any proceeds from the sale of the shares of common stock by the selling shareholders.

These transactions enhanced our balance sheet and capital structure, with approximately $40 million of increased liquidity at closing, convertible notes with a better conversion premium and an interest rate at 50% of the rate on the redeemed debt. After the convertible note transaction, our debt maturities and interest rates include a $210 million bank credit facility, currently priced at LIBOR plus 225 basis points, due in 2013 (on which there were no outstanding draws as of September 30, 2009), $115 million of 4% convertible notes, due in 2014, and $150 million of 7.625% senior notes due in 2017.

We, or our predecessor companies, have been in business for over 75 years. We offer our services primarily under the MasTec service mark and operate through a network of over 200 locations and approximately 8,100 employees as of September 30, 2009.

Our customers include some of the largest communications and utility companies in the United States, including DIRECTV®, Verizon, AT&T, EMBARQ, Progress Energy, Oneok, M.A. Mortenson Co., Dominion Virginia Power, Duke Energy, Iberdrola Renewables, Florida Power & Light Company and Great River Energy. For the three and nine months ended September 30, 2009, approximately 75% and 72% of our revenues were from our ten largest customers, respectively. For the three and nine months ended September 30, 2008, approximately 74% and 73%, respectively, of our revenues were from our ten largest customers. We have longstanding relationships with many customers and often provide services under multi-year master service agreements and other service agreements.

DIRECTV ® represents 31% and 30% of our total consolidated revenue for the three months ended September 30, 2009 and 2008, respectively, and 32% and 36% for the nine months period ended September 30, 2009 and 2008, respectively. Our relationship with DIRECTV® is based upon two agreements to provide installation and maintenance services for DIRECTV® customers and, in support of the installation business, to provide marketing and sales services on behalf of DIRECTV ®.

AT&T represents 19% and 15% of our total consolidated revenue for the three months ended September 30, 2009 and 2008, respectively, and 15% and 10% for the nine month period ended September 30, 2009 and 2008, respectively. Our relationship with AT&T is primarily based upon master service agreements, other service agreements and construction/installation contracts for both AT&T's wireline and wireless infrastructure.

As discussed in the results of operations, revenues decreased slightly for the three months ended September 30, 2009 as compared with the same period in 2008. Nine month revenues increased sharply versus the prior year, primarily driven by recent acquisitions. Despite the increase in nine month revenues, both our organic as well as our acquired businesses have been negatively impacted by the weak state of the U.S. economy and the resulting delay in expenditures by our customers. As a result, we have not yet seen the full anticipated impact of our diversification strategy. We are uncertain as to when, or if, the governmental stimulus initiatives will begin to have a noticeable impact on the industries we serve, however, we do anticipate increased capital spending on infrastructure in the future, particularly in 2010 and subsequent years.

We recognize that we and our customers are operating in a challenging business environment in light of the economic downturn and weak capital markets. We are closely monitoring our customers and the effect that changes in economic and market conditions may have on them. Certain of our customers have reduced spending in the first nine months of 2009 in part due to the negative economic and market conditions, and we anticipate that these negative conditions will continue to affect demand for some of our services in the near-term. However, we believe that most of our customers remain financially stable in general and will be able to continue with their business plans in the long-term without substantial constraints.

Revenue

We provide services to our customers which are companies in the communications
and utilities industries, as well as government customers.

Revenue for customers in these industries is as follows (in thousands):



                                        Three Months Ended September 30,               Nine Months Ended September 30,
                                            2009                   2008                   2009                   2008
Communications                      $    256,174      64 %    $ 253,074    64 %    $     682,653    61 %    $ 617,835    64 %
Utilities                                125,947      32 %      128,239    32 %          387,935    34 %      300,278    31 %
Government                                15,127       4 %       16,441     4 %           56,633     5 %       46,667     5 %

                                    $    397,248     100 %    $ 397,754   100 %    $   1,127,221   100 %    $ 964,780   100 %

A significant portion of our revenue is derived from projects performed under service agreements. We also provide services under master service agreements which are generally multi-year agreements. Certain of our master service agreements are exclusive up to a specified dollar amount per work order for each defined geographic area, but do not obligate our customers to undertake any infrastructure projects or other work with us. Work performed under master service and other service agreements is typically generated through work orders, each of which is performed for a fixed fee. The majority of these services typically are for either maintenance or upgrade services. These master service agreements and other service agreements are frequently awarded on a competitive bid basis, although customers are sometimes willing to negotiate contract extensions beyond their original terms without re-bidding. Our master service agreements and other service agreements have various terms, depending upon the nature of the services provided and are typically subject to termination on short notice.

The remainder of our work is generated pursuant to contracts for specific installation/construction projects or jobs that may require the construction and installation of an entire infrastructure system or specified units within an infrastructure system. Customers are billed with varying frequency: weekly, monthly or upon attaining specific milestones. Such contracts generally include retainage provisions under which 2% to 15% of the contract price is withheld from us until the work has been completed and accepted by the customer.

Revenue by type of contract is as follows (in thousands):

                                             Three Months Ended September 30,               Nine Months Ended September 30,
                                                 2009                   2008                   2009                   2008
Master service and other service
agreements                               $    239,653      60 %    $ 235,504    59 %    $     671,712    60 %    $ 613,653    64 %
Installation/construction projects
agreements                                    157,595      40 %      162,250    41 %          455,509    40 %      351,127    36 %

                                         $    397,248     100 %    $ 397,754   100 %    $   1,127,221   100 %    $ 964,780   100 %

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in our financial statements and the accompanying notes. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, allowance for doubtful accounts, intangible assets, reserves and accruals, impairment of assets, income taxes, insurance reserves and litigation and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. As management estimates, by their nature, involve judgment regarding future uncertainties, actual results may differ materially from these estimates. Refer to Note 3 - Significant Accounting Policies to our condensed unaudited consolidated financial statements of this Quarterly Report on Form 10-Q and to our most recent Annual Report on Form 10-K for further information regarding our critical accounting policies and estimates.

Litigation and Contingencies

Litigation and contingencies are reflected in our condensed unaudited consolidated financial statements based on our assessments of the expected outcome. If the final outcome of any litigation or contingencies differs significantly from our current expectations, a charge to earnings could result. See Note 10 - Commitments and Contingencies to our condensed unaudited consolidated financial statements in this Form 10-Q for updates to our description of legal proceedings and commitments and contingencies.

Results of Operations

Comparison of Quarterly Results

The following table reflects our consolidated results of operations in dollar (in thousands) and percentage of revenue terms for the periods indicated. Our consolidated results of operations are not necessarily comparable from period to period due to the impact of recent acquisitions.

                                             Three Months Ended September 30,                        Nine Months Ended September 30,
                                              2009                       2008                        2009                        2008
Revenue                               $ 397,248      100.0 %     $ 397,754      100.0 %     $ 1,127,221      100.0 %     $ 964,780      100.0 %
Costs of revenue, excluding
depreciation and amortization           335,241       84.4 %       338,060       85.0 %         954,214       84.7 %       824,465       85.5 %
Depreciation and amortization            10,760        2.7 %         7,839        2.0 %          32,147        2.8 %        19,445        2.0 %
General and administrative expenses      23,710        6.0 %        23,885        6.0 %          71,619        6.4 %        63,096        6.5 %
Interest expense, net of interest
income                                    5,769        1.5 %         3,963        1.0 %          17,312        1.5 %        10,115        1.0 %
Other (income) expense, net                (393 )     (0.1 )%         (391 )     (0.1 )%         (1,636 )     (0.2 )%         (936 )     (0.1 )%

Income from continuing operations
before income taxes                      22,161        5.5 %        24,398        6.1 %          53,565        4.8 %        48,595        5.1 %
Income taxes                                517        0.1 %           102        0.0 %           1,001        0.1 %           542        0.1 %

Income from continuing operations        21,644        5.4 %        24,296        6.1 %          52,564        4.7 %        48,053        5.0 %
Loss from discontinued operations            -         0.0 %          (182 )     (0.0 )%             -         0.0 %          (422 )     (0.1 )%

Net income                            $  21,644        5.4 %     $  24,114        6.1 %     $    52,564        4.7 %     $  47,631        4.9 %

Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008

Revenue. Our revenue was $397.2 million for the three months ended September 30, 2009, compared to $397.7 million for the same period in 2008, representing a decrease of $0.5 million or 0.1%. This decrease resulted from the negative impact on organic revenue from tightened capital expenditures by our customers and slower developing business resulting from the lagging U.S. economy, the slow pace of stimulus bill project funding, tight credit markets and reduced bid awards. This decrease was offset by a revenue increase of $69.4 million as a result of new business activities, primarily acquisition related, for acquisitions since September 30, 2008. Third quarter revenues do not reflect any impact of the federal and state stimulus initiatives, as the marketplace has not generated opportunities due to the slow pace of project funding.

Costs of Revenue. Our costs of revenue were $335.2 million or 84.4% of revenue for the three months ended September 30, 2009, compared to $338 million or 85% of revenue for the corresponding period in 2008, a $2.8 million decrease or 0.8%. The decrease is attributable to a $58.0 million increase in costs of revenue incurred in new business activities, primarily driven by recent acquisitions, for acquisitions since September 30, 2008, offset by an 18% decrease in costs of revenue on organic businesses associated with lower revenues, as discussed above. As a percentage of revenue, costs of revenue improved 60 basis points, reflecting productivity gains in a number of operating expense categories and lower fuel costs, partially offset the net impact of changes in business mix, resulting in higher labor costs as percentage revenue with an offsetting decrease in material costs as a percentage of revenue.

Depreciation and amortization. Depreciation and amortization was $10.7 million for the three months ended September 30, 2009, compared to $7.8 million for the same period in 2008, representing an increase of $2.9 million or 37.3%. The increase was primarily driven by recent acquisitions, which resulted in the addition of $1.2 million in depreciation and $1.3 million in amortization, for acquisitions since September 30, 2008.

General and administrative expenses. General and administrative expenses were $23.7 million or 6% of revenue for the three months ended September 30, 2009, compared to $23.9 million or 6% of revenue for the same period in 2008, representing a decrease of $0.2 million or 0.7%. The decrease was primarily due to a reduction in labor costs associated with reduced revenues, offset by increases in information technology costs in support of new business activities, as well as increases in acquisition costs expensed in the current period pursuant to the new accounting guidance on business combinations, which became effective for the Company on January 1, 2009. Despite the fact that we have not realized our full revenue expectations for the third quarter due to economic conditions, we have maintained our capacity for work anticipating improved market conditions in the coming quarters. There is no certainty, however, that improved market conditions will, in fact, materialize.

Interest expense, net. Interest expense, net of interest income was $5.8 million or 1.5% of revenue for the three months ended September 30, 2009, compared to $4.0 million or 1.0% of revenue for the same period in 2008, representing an increase of approximately $1.8 million. This increase is primarily due higher average debt balances from the $115 million 4% senior convertible notes issued in June 2009 and as a result of reduced interest income due to lower interest rates.

Other income, net. Other income, net, was flat at $0.4 million for both the three months ended September 30, 2009 and September 30, 2008.

Income taxes. Income taxes were $0.5 million for the three months ended September 30, 2009, compared with $0.1 million for the three months ended September 30, 2008. This increase is primarily due to higher effective tax rates as a result of higher state and local income taxes in jurisdictions where we have no net operating losses.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

Revenue. Our revenue was $1.1 billion for the nine months ended September 30, 2009, compared to $964.8 million for the same period in 2008, representing an increase of $162 million or 16.8%. This increase was related to a revenue increase of $284.6 million, primarily driven by recent acquisitions, which was partially offset by the negative impact on organic revenue from tightened capital expenditures by our customers and slower developing business resulting from the U.S. economy, the slow pace of stimulus bill project funding, tight credit markets and reduced bid awards. Nine month revenues do not reflect any impact of the federal and state stimulus initiatives as the marketplace has not generated opportunities due to the slow pace of project funding.

Costs of Revenue. Our costs of revenue were $954.2 million or 84.7% of revenue for the nine months ended September 30, 2009, compared to $824.5 million or 85.5% of revenue for the corresponding period in 2008, a $129.7 million increase or 15.7%. The increase is attributable to a $242.1 million increase in costs of revenue, primarily driven by recent acquisitions, which was partially offset by a 13.6% decrease in costs of revenue on organic businesses associated with lower revenues. As a percentage of revenue, costs of revenue improved 80 basis points, reflecting productivity gains in a number of operating expense categories, plus lower fuel costs, partially offset by the net impact of changes in business mix, resulting in higher labor costs as a percentage of revenue with an offsetting decrease in material costs as a percent of revenue.

Depreciation and amortization. Depreciation and amortization was $32.1 million for the nine months ended September 30, 2009, compared to $19.4 million for the same period in 2008, representing an increase of $12.7 million or 65.3%. The increase was due to new business activities, primarily acquisition related, which resulted in the addition of $6.3 million in depreciation and $4.9 million in amortization.

General and administrative expenses. General and administrative expenses were $71.6 million or 6.4% of revenue for the nine months ended September 30, 2009, compared to $63.1 million or 6.5% of revenue for the same period in 2008, representing an increase of $8.5 million but a decrease as a percentage of revenue of 10 basis points. The increase in total general and administrative expenses was primarily due to increased labor and information technology costs to support new business activities. As a percentage of revenue, general and administrative expenses improved 10 basis points due to scale and productivity gains. Despite the fact that we have not realized our full revenue expectations for the nine months due to economic conditions, we have maintained our capacity for work anticipating improved market conditions in the coming quarters. There is no certainty, however, that improved market conditions will, in fact, materialize.

Interest expense, net. Interest expense, net of interest income was $17.3 million or 1.5% of revenue for the nine months ended September 30, 2009, compared to $10.1 million or 1.0% of revenue for the same period in 2008, representing an increase of approximately $7.2 million. This increase is primarily due to interest expense on the $55 million 8% convertible notes issued in connection with the Wanzek acquisition and on the $115 million 4% senior convertible notes issued in June 2009, as well as interest on the revolving Credit Facility in the first half of 2009 as a result of outstanding draws in connection with the Wanzek acquisition. Interest expense, net, also increased as a result of reduced interest income due to lower interest rates and lower average cash balances during the nine months ended September 30, 2009 as compared with the same period in 2008.

Other income, net. Other income, net was $1.6 million for the nine months ended September 30, 2009, compared to $0.9 million for the nine months ended September 30, 2008, representing an increase of $0.7 million, primarily due to higher gains on the sale of property and equipment.

Income taxes. Income taxes were $1.0 million for the nine months ended September 30, 2009, compared to $0.5 million for the nine months ended September 30, 2008, representing an increase of $0.5 million. This increase is primarily due to higher effective tax rates as a result of higher state and local income taxes in jurisdictions where we have no net operating losses.

Financial Condition, Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from continuing operations, availability under our Credit Facility and our cash balances. Our primary liquidity needs are for working capital, capital expenditures, insurance collateral in the form of cash and letters of credit, earn out obligations and debt service. We estimate that we will spend between $20 million and $29 million this year on capital expenditures. The nature of our business is equipment intensive, and actual capital expenditures can increase or decrease from estimates depending upon business activity levels. We will continue to evaluate lease versus buy decisions to meet our equipment needs and based on this evaluation, our capital expenditures may increase or decrease from this estimate in the future. We expect to

continue to sell older vehicles and equipment as we upgrade to new equipment. Additionally, we have made certain acquisitions and have agreed to pay earn-out payments to certain of the sellers, generally based on the future performance of the acquired business. Certain of these earn-out payments may be made in either cash or, under certain circumstances, MasTec common stock at our option. During the three months ended September 30, 2009 and 2008, we made cash payments of $6.6 million and $5.7 million, respectively, related to such earn-out obligations. During the nine months ended September 30, 2009 and 2008, we made cash payments of $20.6 million and $11.4 million, respectively, related to such earn-out obligations.

We need working capital to support seasonal variations in our business, primarily due to the impact of weather conditions on external construction and maintenance work, including storm restoration work, and the associated spending to support related customer demand. Our business is typically slower in the first quarter of each calendar year. Accordingly, we generally experience seasonal working capital needs from approximately April through December to support growth in unbilled revenue and accounts receivable, and to a lesser extent, inventory. Our billing terms are generally net 30 to 60 days, and some of our contracts allow our customers to retain a portion (from 2% to 15%) of the contract amount until the job is completed. We maintain inventory to meet the material requirements of certain of our contracts. Certain of our customers pay us in advance for a portion of the materials we purchase for their projects, or allow us to pre-bill them for materials purchases up to specified amounts. Our vendors generally offer us terms ranging from 30 to 90 days. Our agreements with subcontractors often contain a "pay-when-paid" provision, whereby our payments to subcontractors are made only after we are paid by our customers.

The slow economy and general lack of credit have not had a significant impact on our overall financial position, results of operations or cash flows as of and for the nine months ended September 30, 2009, although certain of our businesses . . .