apply when it reviews, approves or ratifies any such related party transaction. These standards provide that: (i) all related party transactions must be fair and reasonable to us at the time
they are authorized by the Audit Committee; and (ii) all related party transactions must be authorized, approved or ratified by the affirmative vote of most of the members of the Audit Committee who have no interest, either directly or
indirectly, in any such related party transaction.
MasTec purchases, rents and leases equipment used in its business from a number of
different vendors on a
non-exclusive
basis, including Cross Country Infrastructure Services, Inc (CCI), in which the Company has a cost method investment. Juan Carlos Mas, who is the brother of Jorge Mas,
Chairman of MasTecs Board of Directors, and José R. Mas, MasTecs Chief Executive Officer, serves as the chairman of CCI, and a member of management of a MasTec subsidiary is a minority owner. For the years ended December 31,
2017 and 2016, MasTec paid CCI approximately $54.9 million and $24.5 million, net of rebates, for equipment supplies, rentals, leases and servicing, and for the year ended December 31, 2015, paid approximately $10.6 million. As
of December 31 ,2017 and 2016, related payables totaled approximately $2.7 million and $1.5 million, respectively.
MasTec
entered into a subcontracting arrangement in 2016 with an entity for the performance of construction services, the minority owners of which include an entity controlled by Jorge Mas and José R. Mas, along with two members of management of a
MasTec subsidiary. For the years ended December 31, 2017 and 2016, MasTec incurred $78.0 million and $12.9 million, respectively, of expenses under this subcontracting arrangement, and during 2016, sold equipment totaling
$0.3 million to this entity. As of December 31, 2017, and 2016, related amounts payable totaled $2.0 million and $0.1 million, respectively.
MasTec leases employees to a customer in which Jorge Mas and José R. Mas own a majority interest. For each of the years ended December 31, 2017, 2016 and 2015, MasTec charged approximately
$0.8 million to this customer. As of both December 31, 2017 and 2016, outstanding receivables from employee leasing arrangements with this customer totaled $0.2 million. MasTec also provides satellite communication services to this
customer. For the year ended December 31, 2017, revenue from satellite communication services provided to this customer totaled approximately $0.8 million and for each of the years ended December 31, 2016 and 2015, totaled
approximately $0.9 million. As of December 31, 2017, and 2016, receivables totaled approximately $0.3 million and $0.4 million, respectively.
MasTec leases a property located in Florida from Irma S. Mas, the mother of Jorge Mas and José R. Mas. For each of the years ended December 31, 2017 and 2016 lease payments associated with
this property totaled approximately $48,000.
In February 2018, MasTec acquired a construction management firm specializing in steel building
systems, of which Juan Carlos Mas was a minority owner, for approximately $5 million in cash plus contingent
earn-out
consideration.
MasTec entered into a leasing arrangement in 2015 with an independent third party that leases an aircraft from a company owned by Jorge Mas. For the years ended December 31, 2017 and 2016, MasTec
paid $2.0 million and $2.6 million, respectively, under this leasing arrangement. As of December 31, 2017, and 2016, related amounts payable were de minimis. Activity in 2015 was de minimis.
During the third quarter of 2017, the Company paid $2.0 million for approximately 4% of the common stock of Pensare Acquisition Corp.
(Pensare) and warrants to purchase 2.0 million shares of Pensare common stock, which is a special purpose acquisition company focusing on transactions in the telecommunications industry. The shares of common stock purchased by
MasTec are not transferable or salable until one year after Pensare successfully completes a business combination transaction, with limited exceptions, as specified in the agreement. The warrants purchased by MasTec are exercisable at a purchase
price of $11.50 per share after Pensare successfully completes a business combination. Both the warrants and shares expire and/or are effectively forfeitable if Pensare does not successfully complete a business combination by February 1, 2019.
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