MasTec, Inc. (MTZ) Confirms Withdrawal from Teamsters Central States Pension Plan
MasTec, Inc. (NYSE: MTZ) today announced that its wholly owned subsidiary, Precision Pipeline, LLC, along with other members of the Pipe Line Contractors Association ( "PLCA"), have fully withdrawn from the Central States Southeast and Southwest Areas Pension Fund multi-employer pension plan (the "Plan"), effective November 15, 2011. In connection with the withdrawal, MasTec will record a one-time expense of $6.4 million in the fourth quarter of 2011 based on an estimate provided by the plan.
This charge was not contemplated at the time the Company issued its earnings guidance for the fourth quarter of 2011. The Company withdrew from the Plan in order to mitigate its liability in connection with the Plan, which is significantly underfunded. The Plan has asserted that the PLCA members did not effect a withdrawal in 2011, although MasTec believes that a legally effective withdrawal occurred in the fourth quarter of 2011 and has recorded the withdrawal liability on this basis. If the Plan, however, were to prevail in its assertion and the withdrawal of MasTec were deemed to occur after 2011, the amount of any withdrawal liability would be expected to increase.
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This charge was not contemplated at the time the Company issued its earnings guidance for the fourth quarter of 2011. The Company withdrew from the Plan in order to mitigate its liability in connection with the Plan, which is significantly underfunded. The Plan has asserted that the PLCA members did not effect a withdrawal in 2011, although MasTec believes that a legally effective withdrawal occurred in the fourth quarter of 2011 and has recorded the withdrawal liability on this basis. If the Plan, however, were to prevail in its assertion and the withdrawal of MasTec were deemed to occur after 2011, the amount of any withdrawal liability would be expected to increase.
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