EMCOR Group (EME) 10-K risk factor changes: FY2022 vs FY2021

Negative conditions in the credit markets, including rising interest rates, may adversely impact our [added: results of operations and our] ability to operate our business.* The level of demand from our clients for our services has been, in the past, adversely impacted by slowdowns in the industries we service, as well as in the economy in general.

A prolonged stagnation or weakening in financial and macroeconomic conditions, including [removed: as a result] [added: rising interest rates, supply chain challenges, inflation, and any continuing impacts] of the COVID-19 pandemic, could therefore have a significant adverse effect on our revenues and profitability.

[removed: Specifically,] [added: In addition, macroeconomic conditions, influenced by a variety of events and circumstances, can also affect customer demand for our services within these businesses and] lower prices and production volumes, or perceived risk thereof, typically results in the curtailment or deferral of spending by our customers.

Continued [removed: unfavorable] [added: uncertain] conditions within these markets, including the impact of [removed: sustained lower demand for refined products as a result] [added: geopolitical instability and the lingering impacts] of the COVID-19 pandemic, could [removed: further] negatively impact our financial position, results of operations, and cash flows.

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Significant reductions in spending aimed at reducing federal, state, or local budget deficits, the absence of a bipartisan agreement on the federal government's [removed: budget,] [added: budget or raising the debt ceiling,] renewed focus on budget deficits following recent increases in government spending in response to the COVID-19 pandemic, personnel reductions, the closure of government facilities and offices, or other changes in budget priorities could result in the deferral, delay, disruption, or cancellation of projects or contracts that we might otherwise have sought to perform.

[removed: *An increase] [added: *Volatility] in the prices or availability of certain materials [added: and equipment] used in our [removed: businesses,] [added: businesses and those of our customers,] including as a result of inflation, [added: geopolitical instability,] and protectionist trade [removed: measures] [added: measures,] could adversely affect our businesses.* We are exposed to market risk of increases in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in our operations.

We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of approximately [removed: 12,000] [added: 13,200] vehicles.

For example, [removed: during 2021, certain of our operations] [added: we] experienced [removed: declines in gross profit and gross profit margin as a result of] supply chain [removed: disruptions,] [added: delays,] including long lead times for certain materials and equipment, as well as an escalation in material and fuel prices, [removed: and such supply chain disruptions] [added: to varying degrees throughout 2021] and [removed: price escalations have continued into] 2022.

Fluctuations in energy prices as well as in commodity prices of materials, whether resulting from fluctuations in market supply or demand, or geopolitical conditions, including [added: Russia’s invasion of Ukraine and the resulting supply chain disruptions and sanctions on Russian exports,] an increase in trade protection measures such as [removed: tariffs and] [added: tariffs, or] the disruption, modification, or cancellation of multilateral trade agreements, may adversely affect our customers and as a result cause them to curtail the use of our services.

*The loss of one or a few customers could have an adverse effect on us.* Although we [added: provide services to a diverse portfolio of end markets and] have long-standing relationships with many of our significant customers, our customers may unilaterally reduce, fail to renew, or terminate their contracts with us at any time.

Similarly, we cannot be certain that we will be able to maintain or enhance our competitive position within our [removed: industries,] [added: industries] or maintain a customer base at current levels.

*Our business may be affected by weather conditions.* Adverse weather conditions, particularly during the winter season, could impact our construction services operations as those conditions affect our ability to [added: safely and efficiently] perform [removed: efficient] work outdoors in certain regions of the United States, adversely affecting the revenues and profitability of those operations.

*Our business may be affected by the work environment.* We perform our work under a variety of conditions, including but not limited to, difficult terrain, [removed: difficult] [added: challenging] site conditions, [removed: and] busy urban centers where delivery of materials and availability of labor may be impacted, clean-room environments where strict procedures must be followed, and sites which contain harsh or hazardous conditions, especially at chemical plants, [removed: refineries] [added: refineries,] and other process facilities.

The actual cost of labor and materials, however, may vary from the costs we originally [removed: estimated.][added: estimated, something which we have experienced and may continue to experience due to inflationary pressures, supply chain challenges, and rising interest rates.]

*Fluctuating foreign currency exchange rates impact our financial results.* We have operations in the United Kingdom, which in [removed: 2021] [added: 2022] accounted for approximately [removed: 5%] [added: 4%] of our revenues.

Our reported financial position and results of operations are exposed to the effects (both positive and negative) that fluctuating exchange rates have on the process of translating the financial statements of our United Kingdom operations, which are denominated in [removed: local currencies,] [added: the British pound,] into the U.S. dollar.

[removed: However, these liabilities are difficult to assess and estimate due to many relevant] factors, the effects of which are often unknown, including the severity of an injury or damage, the determination of liability in proportion to other parties, the timeliness of reported claims, the effectiveness of our risk management and safety programs, and the terms and conditions of our insurance policies.

If these market conditions persist, [added: or if we experience an increase in the number or severity of claims incurred,] insurance carriers may be unwilling, in the future, to provide our current levels of coverage without a significant increase in insurance premiums, self-insured retention limits, or collateral requirements to cover our obligations to them.

In addition, customers or subcontractors who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to uphold their obligations to [removed: us.][added: us, or we may be liable to our customers based on the terms of our contracts, which may require us to provide indemnification to them.]

Additionally, circumstances beyond our control, such as [added: rising interest rates, inflation and] the [added: ongoing impacts of the] COVID-19 pandemic, [removed: has and] may [removed: continue to] hinder our ability to pursue and complete acquisitions.

Further, realization of the anticipated benefits of an acquisition, and avoiding or mitigating the potential risks associated with an acquisition, will depend, among other things, upon our ability to: (a) effectively conduct due diligence to identify [added: and mitigate] potential problems at companies we propose to acquire, (b) recognize incompatibilities or other obstacles to the successful integration of the acquired business with our other operations, and (c) gain greater efficiencies and scale that will translate into reduced costs or anticipated synergies in a timely manner.

However, our information technology systems and [removed: those] [added: data, and that] of our customers and third-party [removed: providers] [added: providers,] are subject to cyber-attacks, hacking, [added: nation state threats, and] other intrusions, [added: encryption, erasure,] failure, and damage, which [added: could] result in operational disruption and [removed: could result in] information misappropriation, such as theft of intellectual property or inappropriate disclosure of customer data or confidential or personal information.

If any of these events were to occur, we could be required to expend additional capital and other [added: resources, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants.]

In addition, new or evolving laws and regulations governing data privacy and the unauthorized disclosure of confidential information, including the European Union General Data Protection Regulation ("GDPR"), the California Consumer Privacy Act, [added: the California Privacy Rights Act, state biometric laws,] and other emerging U.S. state privacy laws pose increasingly complex compliance challenges and could potentially elevate our compliance costs.

[removed: We] [added: However, we] may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all.

While no impairment was recognized during [added: 2022 or] 2021, we recorded $232.8 million of impairment charges during 2020 as a result of certain of these conditions.

Failure to maintain effective internal control over financial reporting could adversely affect our ability to accurately and timely report financial results, to prevent or detect fraud, or to comply with the requirements of the SEC or the Sarbanes-Oxley Act of 2002, which could necessitate a restatement of our financial statements, and/or result in an investigation, or the imposition of sanctions, by [added: regulators.]

Our efforts to comply with evolving laws, regulations, and reporting standards may increase our general and administrative expenses, divert management time and attention, or limit our operational [removed: flexibility, all of which could have a material adverse effect on our business, financial position, and results of operations.]

*Our failure to comply with environmental laws could result in significant liabilities.* Our operations are subject to various laws, including environmental laws and regulations, among which many deal with the handling and disposal of [removed: asbestos and other] hazardous or universal waste products, polychlorinated biphenyls (PCBs), per- and polyfluoroalkyl substances [removed: (PFAS)] [added: (PFAS),] and fuel storage.

A violation of such laws and regulations, or a release of [added: or exposure to] such substances, [added: including mold, lead paint, and asbestos,] has and may in the future, expose us to various claims, including claims by third parties, as well as remediation costs and fines.

Some of these facilities contain hazardous materials, such as [removed: lead and] asbestos, and fuel storage tanks, which may be above or below ground.

If [added: there is a release of such hazardous materials, or] these tanks were to leak, we could be responsible for the cost of remediation as well as potential fines.

*Our failure to comply with anti-bribery [removed: statutes] [added: statutes,] such as the Foreign Corrupt Practices Act and the U.K. Bribery Act of [removed: 2010] [added: 2010, or sanction regulations,] could result in fines, criminal penalties, and other sanctions that could have an adverse effect on our business.* The U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act of 2010 (the “Bribery Act”), and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business or securing an improper advantage.

Our policies require that all of our employees, subcontractors, vendors, and agents worldwide must comply with applicable anti-bribery [added: and sanction] laws.

However, there is no assurance that our policies and procedures to ensure compliance with the FCPA, the Bribery Act, and similar anti-bribery [added: and sanction] laws, will eliminate the possibility of liability under such laws for actions taken by our employees, agents, and intermediaries.

If we were found to be liable for violations under the FCPA, the Bribery Act, or similar anti-bribery [added: or sanction] laws, either due to our own acts or omissions or due to the acts or omissions of others, we could incur substantial legal expenses and suffer civil and criminal [removed: penalties or other sanctions,] [added: penalties,] which could have a material adverse effect on our business, financial condition, and results of operations, as well as our reputation.

In addition, whether or not such expenses, penalties, or sanctions are actually incurred, the actual or alleged violation of the FCPA, the Bribery Act, or any similar anti-bribery [added: or sanction] laws could have a negative impact on our reputation.

We are dependent upon a workforce of approximately [removed: 34,000] [added: 35,500] employees, including our project managers and field supervisors who are responsible for managing our projects, and there can be no assurance that any individual will continue in his or her capacity for any particular period of time.

The availability and costs to adequately train and maintain a skilled labor force could be impacted by factors we cannot control, including changes in the unemployment rate, prevailing wage rates, benefit costs, the [added: ongoing impacts of the] COVID-19 pandemic, and competition for labor from our competitors in the markets we serve.

We are exposed to market risk for changes in interest rates for borrowings under our credit facilities, which bear interest at variable rates.

Throughout 2022, the Federal Reserve Board significantly increased the federal funds rate, further raised it in February 2023, and has indicated that rate increases are likely to continue through the remainder of 2023.

Increases in benchmark interest rates impact our interest expense and cost of capital, which may adversely impact our ability to make payments on outstanding debt, raise additional funds through the issuance of debt, fund capital expenditures or other liquidity needs.

Any of these impacts may adversely affect our liquidity, results of operations, and financial position.

For further information on our outstanding debt and borrowing rates, refer to Note 9 - Debt of the notes to consolidated financial statements included in Item 8.

On the other hand, the Russian invasion of Ukraine in February 2022 and the resulting supply chain disruptions and sanctions

imposed on Russian oil and gas exports caused the prices of crude oil and natural gas to increase significantly for several months.

While higher prices for our customers’ products may increase demand for our services, significant increases in the price or demand for crude oil may also result in the short-term curtailment or deferral of spending by our customers, as facility downtime to perform certain of the services we provide comes at a higher opportunity cost.

Our business may be adversely affected by significant reductions in government spending, delays or disruptions in the government appropriations process or the failure to fund or implement recent legislation, including the CHIPS and Science Act of 2022 and the Inflation Reduction Act, both of which could benefit our business.

Further, the timing of our price increases may lag the timing of the underlying increases in commodity or material prices.

These disruptions, which are anticipated to persist throughout 2023, resulted in declines in gross profit and gross profit margin for certain of our operations.

On the other hand, because certain of our construction and service offerings are designed to improve energy efficiency in our clients’ operations, or to assist in the generation of new sources of renewable energy, such as wind, solar, and geothermal generation, decreases in the costs of traditional energy sources such as oil and natural gas, including as a result of recessionary pressure and reduced demand, may lower our customers’ demand for efficiency improvements and alternative energy sources, which could have an adverse effect on our financial position, results of operations, and cash flows.

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For example, for the year ended December 31, 2022, revenues and operating income of our United Kingdom building services segment were negatively impacted by $53.5 million and $3.1 million, respectively, when compared to the results for the year ended December 31, 2021, as a result of unfavorable exchange rate movements.

However, these liabilities are difficult to assess and estimate due to many relevant

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Financial Statements and Supplementary Data.

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flexibility, all of which could have a material adverse effect on our business, financial position, and results of operations.

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In addition, sanctions against foreign persons and entities have increased in recent years, especially as a result of the war in the Ukraine.

Proposed rules by the Federal Trade Commission to eliminate almost all non-competition agreements with employees, if implemented, may also impact retention of key employees by reducing barriers to individuals with such agreements leaving to work for our competitors.

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In addition, in March 2022, the SEC proposed new rules that would require significant climate-related disclosures by public companies, including evaluation and disclosure of material climate-related risks and opportunities, GHG emissions inventory, climate-related targets and goals, and financial impacts of physical and transition risks (the “SEC Climate Rules”).

If the SEC Climate Rules take effect, in whole or in part, our legal, accounting, and other compliance expenses may increase significantly, and compliance efforts may divert management time and attention.

We may also be exposed to legal or regulatory action or claims as a result of these new regulations.

All of these risks could have a material adverse effect on our business, financial position, and/or stock price.

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In addition, macroeconomic conditions, influenced by a variety of events and circumstances, can also affect customer demand for our services within these businesses.

Our business may be adversely affected by significant reductions in government spending or delays or disruptions in the government appropriations process.

resources, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants.

regulators.

From time to time, we conduct a limited amount of business in a few countries that have experienced corruption to some degree.

clients, including those who are involved in the exploration, production, or refining of fossil fuels, or who emit greenhouse gases through the combustion of fossil fuels, or through the mining, manufacture, utilization, or production of materials or goods.

Customers may also continue to delay decision-making, delay planned work, or seek to terminate existing agreements.

While the emergency temporary standard requiring employers with 100 or more employees to ensure their workforce is fully vaccinated or to require unvaccinated workers to produce a negative test result on at least a weekly basis (the “ETS”) has been withdrawn by the Occupational Safety and Health Administration (“OSHA”), and Executive Order 14042 mandating vaccination for all federal contractors and subcontractors is currently stayed by the courts, it is unclear whether OSHA or another federal agency will mandate vaccination and/or testing.

Costs related to any mandatory testing, including both the costs of tests and the costs to compensate employees for the time to undergo such testing, will likely represent a substantial expense to the Company, which could have a material adverse effect on our business, financial condition, and/or results of operations to the extent that a significant portion of our workforce does not choose to become vaccinated.

On January 10, 2022, the Biden Administration announced that it would require insurance companies and group health plans to cover the cost of at-home COVID-19 tests.

As we are self-insured for employee-related healthcare claims, this new requirement could result in an additional expense for the Company.

It is not possible at this time to determine the impact of this new requirement or whether it could have a material adverse effect on our financial condition and/or results of operations.

Our business, financial condition, results of operations, and/or stock price could also be adversely affected in the future by the effects of another epidemic or pandemic, or otherwise by the spread of contagious diseases other than COVID-19.

Such effects could be similar to those of the COVID-19 pandemic or could impact our business in different ways, including supply-chain disruptions, restrictions on our ability to provide services in the regions affected, adverse impacts on our workforce, and impacts to the U.S. or global economy or financial markets generally.

Our services are provided to a broad range of commercial, industrial, [added: healthcare,] utility, and institutional customers through approximately [removed: 90] [added: 100] operating subsidiaries.

Our reportable segments [added: and related disclosures] reflect certain reclassifications of prior year amounts from our United States [removed: electrical] [added: mechanical] construction and facilities services segment to our United States [removed: industrial] [added: building] services [added: segment,] and [added: from] our United States building services [removed: segments] [added: segment to our United States construction segments,] due to changes in our internal reporting structure aimed at realigning our service offerings.

[removed: Consequently, we have included and updated the year-over-year] [added: For] discussion and analysis of results of operations for [removed: 2020] [added: the year ended December 31, 2021] compared to [removed: 2019] [added: the year ended December 31, 2020, refer] to [removed: reflect these changes.][added: Item 7.]

[removed: COVID-19 and Market] [added: Market] Update

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[removed: For example,] [added: During 2022,] we [removed: have] [added: also] experienced [removed: lead times significantly in excess of normal levels and have seen] the effects of inflation through increases in [removed: commodity] [added: fuel, material,] and [removed: material] [added: other commodity] prices.

[removed: Despite] [added: In response to] these challenges, [removed: to date,] we [removed: have been able] [added: continue] to [added: strive to] manage our business [added: more effectively] through enhanced labor planning and project scheduling, increased pricing to the extent contractually permitted, and by leveraging our relationships with our suppliers and [removed: customers, resulting in only modest disruptions to our project and service work within the majority of our reportable segments.][added: customers.]

The following table presents selected financial data for the fiscal years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] (in thousands, except percentages and per share data):

| Revenues | | | $ | [removed: 9,903,580] [added: 11,076,120] | | | | | $ | [removed: 8,797,061] [added: 9,903,580] | |

| Revenues increase [removed: (decrease)] from prior year | | | [removed: 12.6] [added: 11.8] | | % | | | | [removed: (4.1)] [added: 12.6] | | % |

| Gross profit | | | $ | [removed: 1,501,737] [added: 1,603,594] | | | | | $ | [removed: 1,395,382] [added: 1,501,737] | |

| Gross profit as a percentage of revenues | | | [removed: 15.2] [added: 14.5] | | % | | | | [removed: 15.9] [added: 15.2] | | % |

| Operating income | | | $ | [removed: 530,800] [added: 564,877] | | | | | $ | [removed: 256,834] [added: 530,800] | |

| Operating income as a percentage of revenues | | | [removed: 5.4] [added: 5.1] | | % | | | | [removed: 2.9] [added: 5.4] | | % |

| Net income attributable to EMCOR Group, Inc. | | | $ | [removed: 383,532] [added: 406,122] | | | | | $ | [removed: 132,943] [added: 383,532] | |

| Diluted earnings per common share | | | $ | [removed: 7.06] [added: 8.10] | | | | | $ | [removed: 2.40] [added: 7.06] | |

Revenues of [removed: $9.90] [added: $11.08] billion for the year ended December 31, [removed: 2021] [added: 2022] set a new annual record for the Company and represent an increase of [removed: 12.6%] [added: 11.8%] from revenues of [removed: $8.80] [added: $9.90] billion for the year ended December 31, [removed: 2020.][added: 2021.]

Operating income for [removed: 2021] [added: 2022] was [removed: $530.8] [added: $564.9] million, or [removed: 5.4%] [added: 5.1%] of revenues, compared to operating income of [removed: $256.8] [added: $530.8] million, or [removed: 2.9%] [added: 5.4%] of revenues, in [removed: 2020.][added: 2021.]

Net income of [removed: $383.5] [added: $406.1] million, or [removed: $7.06] [added: $8.10] per diluted share, for the year ended December 31, [removed: 2021,] [added: 2022,] compares favorably to net income of [removed: $132.9] [added: $383.5] million, or [removed: $2.40] [added: $7.06] per diluted share, for the year ended December 31, [removed: 2020.][added: 2021.]

[removed: Our] [added: In addition to the increase in operating income referenced above, our] diluted earnings per share for [removed: 2021 additionally] [added: 2022] benefited from a reduced weighted average share count given the impact of common stock repurchases made by us throughout [removed: 2020] [added: 2021] and [removed: 2021.][added: 2022.]

In order to provide a more meaningful period-over-period discussion of our operating results, we may discuss amounts generated or incurred (revenues, gross profit, selling, general and administrative [removed: expenses] [added: expenses,] and operating income) from companies acquired.

We acquired eight companies [removed: in] [added: during] 2021 for total consideration of $131.2 million.

Such acquisitions include: (a) two companies, the results of operations of which were de minimis, included within our United States mechanical construction and facilities services segment, consisting of: (i) a company that provides mechanical services within the Southern region of the United States and (ii) a company that provides fire protection services in the Midwestern region of the United States, (b) two companies that provide electrical construction services for a broad array of customers in the Midwestern region of the United States, the results of operations of which have been included in our United States electrical construction and facilities services segment, and (c) four companies included within our United States building services segment, consisting of: (i) a company that provides mobile mechanical services across North Texas and (ii) three companies, the results of operations of which were de minimis, that [removed: bolster] [added: enhance] our presence in geographies where we have existing operations and provide either mobile mechanical services or building automation and controls solutions.

[removed: We] [added: During 2022, we] acquired [removed: three] [added: six] companies [removed: in 2020] for total consideration of [removed: $50.3] [added: $100.8] million.

Companies acquired in [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] generated incremental revenues of [removed: $196.3] [added: $149.7] million and incremental operating income of [removed: $4.0] [added: $3.9] million, inclusive of [removed: $11.5] [added: $7.3] million of amortization expense associated with identifiable intangible assets, for the year ended December 31, [removed: 2021.][added: 2022.]

The following table presents our revenues for each of our operating segments and the approximate percentages that each segment’s revenues were of total revenues for the years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] (in thousands, except for percentages):

| | | | [removed: 2021] [added: 2022] | | | | | | % of Total | | | | | | [removed: 2020] [added: 2021] | | | | | | % of Total | | |

| United States electrical construction and facilities services | | | $ | [removed: 2,015,466] [added: 2,433,114] | | | | | [removed: 20] [added: 22] | | % | | | | $ | [removed: 1,806,092] [added: 2,029,893] | | | | | [removed: 20] [added: 21] | | % |

| United States mechanical construction and facilities services | | | [removed: 3,922,864] [added: 4,326,674] | | | | | | [removed: 40] [added: 39] | | % | | | | [removed: 3,485,495] [added: 3,952,586] | | | | | | 40 | | % |

| United States industrial services | | | [removed: 986,407] [added: 1,118,767] | | | | | | 10 | | % | | | | [removed: 940,895] [added: 986,407] | | | | | | [removed: 11] [added: 10] | | % |

| Total United States operations | | | [removed: 9,393,629] [added: 10,599,042] | | | | | | [removed: 95] [added: 96] | | % | | | | [removed: 8,366,498] [added: 9,393,629] | | | | | | 95 | | % |

| United Kingdom building services | | | [removed: 509,951] [added: 477,078] | | | | | | [removed: 5] [added: 4] | | % | | | | [removed: 430,563] [added: 509,951] | | | | | | 5 | | % |

| Total operations | | | $ | [removed: 9,903,580] [added: 11,076,120] | | | | | 100 | | % | | | | $ | [removed: 8,797,061] [added: 9,903,580] | | | | | 100 | | % |

As described in more detail below, revenues for the year ended December 31, [removed: 2021] [added: 2022] increased to [removed: $9.90] [added: $11.08] billion compared to [removed: $8.80] [added: revenues of $9.90] billion for the year ended December 31, [removed: 2020.][added: 2021.]

The increase in [removed: revenues for the year ended December 31, 2021] [added: remaining performance obligations year-over-year] was attributable to [removed: revenue growth] [added: an increase in remaining performance obligations] within all of our reportable segments.

Companies acquired in [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] generated incremental revenues of [removed: $196.3] [added: $149.7] million in [removed: 2021.][added: 2022.]

Revenues of our United States electrical construction and facilities services segment were [removed: $2,015.5] [added: $2,433.1] million for the year ended December 31, [removed: 2021] [added: 2022] compared to revenues of [removed: $1,806.1] [added: $2,029.9] million for the year ended December 31, [removed: 2020.][added: 2021.]

[removed: The] [added: This segment’s] results [removed: of this segment] for the year ended December 31, [removed: 2021] [added: 2022] included [removed: $93.1] [added: $135.1] million of incremental revenues [removed: generated by companies] [added: from] acquired [removed: in 2021.][added: companies.]

[removed: The] [added: These] revenue increases [removed: referenced above] were partially offset by a reduction in [removed: revenues within the manufacturing and] transportation [added: and institutional] market [removed: sectors] [added: sector activity] due to the completion or substantial completion of [removed: certain projects in the Northeastern and Western regions of the United States.][added: various projects.]

Our United States mechanical construction and facilities services segment revenues for the year ended December 31, [removed: 2021] [added: 2022] were [removed: $3,922.9] [added: $4,326.7] million, a [removed: $437.4] [added: $374.1] million increase compared to revenues of [removed: $3,485.5] [added: $3,952.6] million for the year ended December 31, [removed: 2020.][added: 2021.]

Throughout 2022, our business and end markets remained resilient despite the impact of uncertain global economic conditions, including supply chain, production, and other logistical issues, an inflationary cost environment, rising interest rates, skilled labor shortages in certain regions, and the lingering effects of the COVID-19 pandemic.

For example, we experienced pressures in our supply chain, which resulted in material and equipment lead times significantly in excess of normal levels.

These disruptions, which are expected to persist to varying degrees in 2023, have manifested themselves through project delays or scheduling impacts and reduced labor productivity and efficiency, particularly within our United States construction segments and our United States building services segment.

Delays in critical material and equipment deliveries have additionally resulted in us funding purchases at earlier stages of project progression, or in advance of project commencement, which has and will continue to apply pressure on working capital requirements.

While current economic indicators suggest that inflation will slow, we anticipate that our business will continue to be impacted by wage and general inflation to some extent throughout 2023.

Further, in an effort to mitigate inflation, the Federal Reserve Board has increased the federal funds rate throughout 2022, raised it further in February 2023, and it is anticipated that rate increases will continue through the remainder of 2023.

These actions have resulted, and may continue to result, in an increase in our interest expense.

Beyond these impacts, the Russian invasion of Ukraine in February 2022 has created another layer of uncertainty, especially with respect to energy costs as the resulting sanctions imposed on Russian oil and gas exports caused the prices of crude oil and natural gas to increase significantly for several months.

While higher energy prices have historically led to an increase in demand for certain of our services, such as those performed by our United States industrial services segment, significant increases in the price or demand for crude oil may also result in the short-term curtailment or deferral of spending by our customers, as facility downtime to perform certain of the services we provide comes at a higher opportunity cost.

While we believe the actions we have taken continue to be effective, as evidenced in part by the sequential improvement in our operating performance throughout each quarter of 2022, the impact of these disruptions continues to evolve and there can be no assurance that our actions will serve to mitigate such impacts in future periods.

Further, while we believe our remaining performance obligations are firm, and we have not experienced any material project cancellations to date, prolonged delays in the receipt of critical equipment could impact our ability to convert such remaining performance obligations to revenues in the near term, or result in our customers seeking to delay or terminate existing or pending agreements.

Lastly, rising interest rates may cause a decline in capital or maintenance spending of our customers or prospective customers and, therefore, the demand for our services.

2022 versus 2021

| | | | 2022 | | | | | | 2021 | | |

Demand for our services continues to be strong and, as described in further detail below, we experienced revenue growth within all of our reportable segments except for our United Kingdom building services segment, the reduction in revenues of which was entirely due to unfavorable exchange rate movements during 2022, which more than offset revenue growth that was experienced on a local currency basis.

This increase resulted from greater operating income contribution, largely as a result of the aforementioned increase in revenues, from each of our reportable segments, other than our United States electrical construction and facilities services segment.

The decrease in operating margin period over period was driven by a 70 basis point reduction in consolidated gross profit margin, due to reduced gross profit margins within each of our United States construction segments.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

| United States building services | | | 2,720,487 | | | | | | 25 | | % | | | | 2,424,743 | | | | | | 24 | | % |

During 2022, we experienced increases in revenues from all of our reportable segments, except for our United Kingdom building services segment, the reduction in revenues of which was entirely due to unfavorable exchange rate movements, which more than offset revenue growth that was experienced on a local currency basis.

Excluding the impact of acquisitions, revenues of this segment increased by $268.1 million primarily as a result of an increase in revenues from: (a) the commercial market sector, predominantly within the telecommunications sub-market sector, inclusive of our data center projects, and the technology sub-market sector, (b) the healthcare market sector due to large project activity, and (c) certain transmission and distribution projects, including those to support sustainable energy solutions such as solar and wind.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

Excluding incremental acquisition revenues within this segment’s mobile mechanical services division of $14.6 million during 2022, this segment’s revenue growth was primarily attributable to: (a) its mobile mechanical services division, due to: (i) increased project work, including incremental demand for HVAC system retrofits and building automation and controls services, partially as our customers continue to seek ways to improve the energy efficiency or indoor air quality of their facilities, and (ii) greater service repair and maintenance volumes, partially as a result of incremental repair opportunities driven by supply chain delays, which have created a need to extend the life of existing equipment in instances when replacement equipment is not readily available, and (b) its commercial site-based services division, due to the award of facilities maintenance contracts with new customers, as well as scope or site expansion and increased project work with existing customers.

While there remains significant disruption and uncertainty within the broader oil and gas industry, most notably within the upstream and midstream energy sectors, we began to experience a resumption in downstream energy demand within this segment during the second half of 2021.

Such increased demand continued into 2022, resulting in revenue growth within this segment.

Specifically, more normalized turnaround project demand and an increase in maintenance and capital project activity, when compared to the prior year, has resulted in increased revenues from this segment’s field services operations.

In addition, revenues of this segment’s shop services operations have increased as a result of greater maintenance, repair, and hydro blast cleaning services and a slight increase in new build heat exchanger sales.

The year-over-year decrease in this segment’s revenues was entirely a result of unfavorable exchange rate movements for the British pound versus the United States dollar, which negatively impacted this segment’s revenues by $53.5 million for the year ended December 31, 2022.

Excluding the impact of foreign exchange rate movements, this segment’s revenues for 2022 increased as a result of growth in project activities with existing customers, primarily within the commercial market sector, including certain telecommunication projects, and the transportation market sector.

| | | | 2022 | | | | | | 2021 | | |

| Gross profit | | | $ | 1,603,594 | | | | | $ | 1,501,737 | |

Companies acquired in 2022 and 2021 generated incremental gross profit of approximately $21.1 million in 2022.

Excluding the impact of acquisitions, the increase in gross profit for 2022 was largely a result of increased revenue volume, which despite the decrease in gross profit margin discussed below, resulted in an increase in consolidated gross profit.

For the year ended December 31, 2022, certain discrete project losses within both our United States electrical construction and facilities services segment and our United States mechanical construction and facilities services segment negatively impacted our consolidated gross profit margin by 40 basis points.

Refer to the operating income section below for further discussion regarding the operating performance of each of our reportable segments, including the above referenced losses.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

| | | | 2022 | | | | | | 2021 | | |

The organic increase in selling, general and administrative expenses was primarily attributable to an increase in: (a) salaries and related employment expenses, largely as a result of an increase in headcount to support our organic revenue growth, (b) incentive compensation expense within those of our reportable segments which had higher operating results than in the prior year, (c) travel and entertainment expenses, given a resumption in travel and business meals as COVID-19 related restrictions have eased, (d) rent and other occupancy costs driven by: (i) the expansion or addition of certain fabrication facilities, which support our operations, and (ii) the impact of inflation on the real estate market, and (e) computer hardware and software costs, as a result of various information technology and cybersecurity initiatives currently in process.

| United States building services | | | 144,670 | | | | | | 5.3 | | % | | | | 122,724 | | | | | | 5.1 | | % |

Largely as a result of increases in revenues, we experienced greater operating income contribution from each of our reportable segments other than our United States electrical construction and facilities services segment.

As a result of the COVID-19 pandemic, we experienced significant disruptions throughout calendar year 2020, which impacted our ability to execute on our remaining performance obligations in many of the markets in which we operate.

The economic and operational impact of the pandemic, which were most acute during the second quarter of 2020, negatively affected our results of operations during such period and continued to impact portions of our business in 2021.

However, our strong balance sheet and operational flexibility have allowed us to manage through the ongoing impacts of the pandemic while protecting our cash flow and liquidity.

Although the majority of our businesses have largely recovered from the financial impacts of the COVID-19 pandemic experienced in 2020, as evidenced by our consolidated performance and the growth in our remaining performance obligations, our United States industrial services segment continues to be negatively impacted by the lingering effects of the pandemic.

The prolonged impacts of lower demand and the overall lagging recovery of the oil and gas market have resulted in customers of this segment canceling or deferring regularly scheduled maintenance projects, reducing capital spending, implementing various cost cutting measures, and closing certain of their facilities.

Such customer actions continue to impact the demand for our service offerings within this segment.

We continue to monitor the short- and long-term impacts of the pandemic.

While our employees and customers have adapted to a new work environment and there continues to be scientific, societal, and economic progress to address the effects of COVID-19, including the widespread availability of effective vaccines in the markets we serve, there remains significant uncertainty about the future impacts of the pandemic, or any resulting market disruption or volatility, including the potential effects on our operations.

We continue to be cautiously optimistic about the markets in which we operate and the customers we serve; however, should there be a slowdown in economic activity due to surges in the number of cases, or an increase in variants of the virus that are more virulent, contagious, or against which current vaccines are less effective, it is possible that projects could be delayed or canceled or that we could experience access restrictions to our customers’ facilities, preventing us from performing maintenance and service projects.

The extent to which our business and results of operations are impacted in future periods will also depend upon a number of other factors.

These include the duration and extent of the pandemic; limitations on the ability of our employees to perform their work due to illness caused by the pandemic or local, state, or federal orders requiring employees to quarantine; the cost and/or disruption of testing that may be required of our employees either by customer requirements or government mandates; the extent, duration, and effective execution of government stabilization and recovery efforts; the widespread adoption and long-term efficacy of vaccines and the availability and efficacy of other treatments; our customers’ demand for our services; our ability to continue to safely and effectively operate in this environment; and the ability of our customers to pay us for services rendered.

While the emergency temporary standard requiring employers with 100 or more employees to ensure their workforce is fully vaccinated or to require unvaccinated workers to produce a negative test result on at least a weekly basis (the “ETS”) has been withdrawn by the Occupational Safety and Health Administration (“OSHA”), and Executive Order 14042 mandating vaccination for all federal contractors and subcontractors is currently stayed by the courts, it is unclear whether OSHA or another federal agency will mandate vaccination and/or testing.

Costs related to any mandatory testing, including both the costs of tests and the costs to compensate employees for the time to undergo such testing, will likely represent a substantial expense to the Company, which could have a material adverse effect on our business, financial condition, and/or results of operations to the extent that a significant portion of our workforce does not choose to become vaccinated.

On January 10, 2022, the Biden Administration announced that it would require insurance companies and group health plans to cover the cost of at-home COVID-19 tests.

As we are self-insured for employee-related healthcare claims, this new requirement could result in an additional expense for the Company.

It is not possible at this time to determine the impact of this new requirement or whether it could have a material adverse effect on our financial condition and/or results of operations.

Supply chain disruptions, material shortages, or escalating commodity prices have and may continue to negatively impact our business.

However, the impact of the COVID-19 pandemic on our vendors and the pricing and availability of materials or supplies utilized in our operations continues to evolve and may have an adverse impact on our operations in future periods.

While we believe our remaining performance obligations are firm, customers may also slow decision-making, delay planned work, or seek to terminate existing agreements.

Overview

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2021 | | | | | | 2020 | | |

| Impairment loss on goodwill, identifiable intangible assets, and other long-lived assets | | | $ | — | | | | | $ | 232,750 | |

As described in further detail below, we experienced revenue growth within all of our reportable segments.

Our operating results for the year ended December 31, 2020 included $232.8 million of non-cash impairment charges, which negatively impacted the Company’s operating margin for 2020 by approximately 270 basis points.

Excluding the impact of such impairment charges on our 2020 results, operating income increased by $41.2 million for the year ended December 31, 2021, as a result of increased operating income contribution from all of our reportable segments, except for our United States industrial services segment, which continues to be impacted by the effect of adverse market conditions on the demand for its service offerings, as described in further detail below.

While such increases were largely attributable to the growth in operating income referenced above, net income and diluted earnings per common share for the year ended December 31, 2021 also benefited from a more normalized income tax rate, as our tax rate in the prior year was negatively impacted by the non-cash impairment charges recorded in 2020, the majority of which were non-deductible for tax purposes.

Impact of Acquisitions

Such acquisitions include: (a) a company that provides building automation and controls solutions within the Northeastern region of the United States, (b) a full service provider of mechanical services within the Washington, D.C. metro area, and (c) a company, the results of operations of which were de minimis, that provides mobile mechanical services in the Southern region of the United States.

The results of operations for all three companies have been included within our United States building services segment.

Discussion and Analysis of Results of Operations

*Revenues*

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Revenues from unrelated entities: | | | | | | | | | | | | | | | | | | | | | | | |

| United States building services | | | 2,468,892 | | | | | | 25 | | % | | | | 2,134,016 | | | | | | 24 | | % |

Excluding the impact of acquisitions, the increase in revenues of this segment for the year ended December 31, 2021 was primarily attributable to: (a) a resumption of project activity within certain major metropolitan areas, where work was previously postponed due to access restrictions caused by the various containment and mitigation measures mandated in the prior year by certain of our customers and/or governmental authorities in response to the COVID-19 pandemic, leading to: (i) an increase in commercial market sector revenues and (ii) greater short-duration project volumes in the current year, (b) an increase in public works projects in the Western region of the United States, resulting in greater revenue contribution from the institutional market sector, (c) revenue growth within the healthcare market sector, due to greater construction project activity in the Northeastern region of the United

States, and (d) an increase in telecommunication project activity within the commercial market sector.

These increases were partially offset by the completion or substantial completion of certain projects within the institutional market sector, which resulted in a reduction of revenues within such sector during 2021.

We have not used any derivative financial instruments during the years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] including trading or speculating on changes in interest rates or commodity prices of materials used in our business.

Borrowings under the 2020 Credit Agreement bear interest at variable [removed: rates.][added: rates and, as a result of the actions referenced above, such rates have increased throughout 2022.]

As of December 31, [removed: 2021,] [added: 2022,] there were no direct borrowings outstanding under the 2020 Revolving Credit Facility; however, the balance of the 2020 Term Loan was [removed: $256.7] [added: $242.8] million.

Based on the [removed: $256.7] [added: $242.8] million [added: of] borrowings outstanding under the 2020 Credit Agreement, if overall interest rates were to increase by [removed: 100] [added: 200] basis points, interest expense, net of income taxes, would increase by approximately [removed: $1.9] [added: $3.6] million in the next twelve months.

Conversely, if overall interest rates were to decrease by [removed: 100] [added: 200] basis points, interest expense, net of income taxes, would decrease by approximately [removed: $1.9] [added: $3.6] million in the next twelve months.

We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of approximately [removed: 12,000] [added: 13,200] vehicles.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion regarding the impact of fluctuations in commodity and material prices on our results of operations for the year ended December 31, [removed: 2021.][added: 2022.]

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

As noted previously, the Federal Reserve Board has been increasing interest rates, and it is anticipated that rate increases will continue throughout 2023.

In [removed: 2021,] [added: 2022,] we had revenues of approximately [removed: $9.9] [added: $11.1] billion.

Our services are provided to a broad range of commercial, industrial, [added: healthcare,] utility, and institutional customers through approximately [removed: 90] [added: 100] operating subsidiaries, which specialize principally in providing construction services relating to electrical and mechanical systems in all types of facilities and in providing various services relating to the operation, maintenance, and management of those facilities.

Our operating subsidiaries offer comprehensive and diverse solutions on a broad scale and have [removed: a solid base of customers, including] many long-standing [added: customer] relationships.

Of our [removed: 2021] [added: 2022] revenues, approximately [removed: 95%] [added: 96%] were generated in the United States and approximately [removed: 5%] [added: 4%] were generated in foreign countries, substantially all in the United Kingdom.

In [removed: 2021,] [added: 2022,] approximately [removed: 60%] [added: 61%] of our revenues were derived from our construction operations, approximately [removed: 30%] [added: 29%] of our revenues were derived from our building services operations and approximately 10% of our revenues were derived from our industrial services operations.

We believe that our range of service offerings, technical capability, [added: skilled workforce,] and strong project execution, along with our safety culture and financial resources, differentiate us from our competition and position us to benefit from future capital [added: and maintenance] spending by our customers.

Our strategies of expanding our portfolio of service offerings for existing and potential customers and increasing or enhancing our presence in core end [removed: markets,] [added: markets and geographies,] along with our commitment to industry-leading best practices and technological and training capabilities, place us in the position to capitalize on opportunities and trends in the industries we serve and [removed: expand our operations] [added: continue] to [removed: select new markets.][added: grow our business.]

Increasingly, our services are focused on delivering sustainable energy solutions, enhancements in energy efficiency, reductions in waste and emissions, and improvements in the safety and comfort of our customers’ [removed: facilities.][added: facilities, as discussed in further detail below.]

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

- Central plant heating and cooling [added: systems, including manufacturing and installing sheet metal air handling] systems;

Our electrical and mechanical construction services generally fall into one of three categories: (a) large installation projects, with contracts often in the multi-million dollar range, that involve: (i) the construction of manufacturing facilities, data centers, warehousing and distribution facilities, and commercial buildings, (ii) institutional and public works projects, or (iii) the fit-out of large blocks of space within commercial [added: or mixed-use] buildings, (b) large and medium sized capital and maintenance projects for commercial, manufacturing, pharmaceutical, healthcare, oil and gas, [removed: industrial,] and [removed: petrochemical clients] [added: industrial clients,] and (c) smaller installation projects, of a short duration, typically involving fit-out, renovation, and retrofit work.

[removed: We also install and maintain lighting for streets, highways, bridges and tunnels, traffic signals, computerized] [added: - Computerized] traffic control systems, and signal and communication [removed: systems] [added: equipment] for mass transit [removed: systems in several metropolitan areas.][added: systems;]

Our United States electrical and mechanical construction operations accounted for [removed: about 60%] [added: approximately 61%] of our [removed: 2021] [added: 2022] total revenues.

Of such revenues, approximately [removed: 34%] [added: 36%] were generated by our electrical construction operations and approximately [removed: 66%] [added: 64%] were generated by our mechanical construction operations.

Our largest projects [removed: have included] [added: typically include] those: (a) for commercial purposes (such as office buildings, data centers, convention centers, sports stadiums, and shopping malls); (b) for [added: high-tech] manufacturing [added: purposes (such as semiconductor, biotech, life-sciences,] and [added: pharmaceutical facilities); (c) for traditional manufacturing and] industrial purposes (such as [removed: pharmaceutical plants,] steel, pulp and paper mills, food [removed: processing, automotive] [added: processing] and [removed: semiconductor] [added: automotive] manufacturing facilities, power generation (including sustainable energy solutions such as solar and wind), oil and gas refineries, and chemical processing plants); [removed: (c)] [added: (d)] for transportation purposes (such as highways, bridges, airports, and transit systems); [removed: (d)] [added: (e)] for institutional purposes (such as educational and correctional facilities and research laboratories); [removed: (e)] [added: (f)] for healthcare [removed: purposes; (f)] [added: purposes (such as hospitals, surgical centers, rehabilitation and nursing facilities, and medical offices); (g)] for water and wastewater purposes; and [removed: (g)] [added: (h)] for hospitality purposes (such as resorts, hotels, and gaming facilities).

Our largest projects, which typically range in size from $10 million up to and occasionally exceeding $200 million, represented approximately [removed: 38%] [added: 40%] of our electrical and mechanical construction services revenues in [removed: 2021.][added: 2022.]

Our projects of less than $10 million accounted for approximately [removed: 62%] [added: 60%] of our electrical and mechanical construction services revenues in [removed: 2021.][added: 2022.]

- [removed: Small modification] [added: Modification] and retrofit projects;

- Program development, management, and maintenance for energy systems, including LEED [removed: Certified] [added: and other sustainable] solutions to assist our customers in reducing energy consumption;

- Military base operations support services; [added: and]

- Infrastructure and building projects for federal, state, and local governmental [removed: agencies; and][added: agencies.]

Our building services operations, which generated approximately [removed: 30%] [added: 29%] of our [removed: 2021] [added: 2022] total revenues, provide services to owners, operators, tenants, and managers of all types of facilities both on a contractual basis for a specified period of time and on an individual task order basis.

Of our building services revenues for [removed: 2021,] [added: 2022,] approximately [removed: 83%] [added: 85%] were generated in the United States and approximately [removed: 17%] [added: 15%] were generated in the United Kingdom.

Demand for our building services is often driven by customers’ decisions to focus on their core competencies, customers’ programs to reduce costs, the increasing technical complexity of [removed: their] [added: customers’] facilities, including their mechanical, electrical, building automation, voice and data, and other systems, and the need for increased reliability, energy efficiency, and air filtration and sanitization.

Clients of our building services business include federal and state governments, institutional organizations, utilities, [removed: independent power producers,] healthcare providers, and major corporations engaged in information technology, telecommunications, pharmaceuticals, financial services, and manufacturing, as well as large retailers and other businesses with geographically dispersed locations.

We provide building services at a number of prominent [removed: buildings,] [added: buildings in the United States,] including those that house the [removed: Secret Service,] [added: National Archives and Records Administration,] the Federal Deposit Insurance Corporation, the Government Accountability Office, and the Department of Health and Human Services, as well as other government facilities, including the NASA Jet Propulsion Laboratory.

Our industrial services business, which generated approximately 10% of our [removed: 2021] [added: 2022] total revenues, is a recognized leader in the refinery turnaround market and has a presence in the petrochemical market.

In addition, there are a number of larger public companies focused on providing [removed: either] electrical and/or mechanical construction services, such as APi Group Corporation, Comfort Systems USA, Inc., Dycom Industries, Inc., IES Holdings, Inc., MasTec, Inc., MYR Group, Inc., and Tutor Perini Corporation.

In addition, we compete with several regional firms serving all or portions of the markets we target, such as BrightView Holdings, Inc., Kellermeyer Bergensons Services, LLC, SMS Assist, [removed: LLC,] [added: L.L.C.,] and [removed: Ferandino] [added: Ferrandino] & Son, Inc. Our principal competitors in the United Kingdom include CBRE Group, Inc., Bouygues UK Ltd., ISS UK Ltd., and Mitie Group [removed: plc.][added: PLC.]

At December 31, [removed: 2021,] [added: 2022,] we employed approximately [removed: 34,000] [added: 35,500] people, approximately [removed: 30,000] [added: 32,000] of whom were located within the United States and approximately [removed: 4,000] [added: 3,500] of whom were located in the United Kingdom.

| White | | | [removed: 70] [added: 69] | | % |

| Hispanic / Latinx | | | [removed: 17] [added: 18] | | % |

Approximately 60% of our employees are represented by various unions pursuant to [removed: nearly] [added: approximately] 450 collective bargaining agreements between our individual subsidiaries or trade associations and local unions, as well as two collective bargaining agreements that are national or regional in scope.

In a year in which our employees worked [removed: a total of] approximately [removed: 76] [added: 77.5] million hours, the [removed: second highest in our history, the] Company’s Total Recordable Incident Rate in [removed: 2021] [added: 2022] was approximately [removed: 1.06,] [added: 1.2,] which was [removed: more than 60%] [added: approximately 55%] lower than the most recently available industry average of 2.70.

This represents our [removed: thirteenth] [added: fourteenth] consecutive year with a Total Recordable Incident Rate which was less than half the industry average.

This extends to our senior leadership and Board of Directors, where we require that any slate of [added: recruited] candidates for a named executive officer or other corporate officer position, and new management-supported director nominees, include individuals from underrepresented demographics.

In furtherance of our EMCOR Values, all EMCOR employees are required to complete diversity [removed: &] [added: and] inclusion training, and our current and future leaders undergo implicit association and unconscious bias training.

Copies of these charters, guidelines and codes, and any waivers or amendments to such codes which are applicable to our executive officers, senior financial officers, or directors, can be obtained [removed: free of charge] on our website, www.emcorgroup.com.

The demand for these services is typically driven by non-residential construction and renovation activity and, in recent years, has benefited from the re-shoring of the supply chain, the need for additional high-tech manufacturing facilities, and the energy transition/expansion throughout the United States.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

These projects often involve new construction and a combination of design, installation, and start-up services.

Our building services include:

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

Most recently, we started offering college counseling services for the children of our employees.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

The demand for these services is typically driven by non-residential construction and renovation activity.

In addition, we manufacture and install sheet metal air handling systems for both our own mechanical construction operations and for unrelated mechanical contractors.

We also maintain welding and pipe fabrication shops in support of some of our mechanical operations.

We provide electrical and mechanical construction services for both large and small installation and renovation projects.

Our building services, which are provided to a wide range of facilities, including commercial, utility, institutional, and governmental facilities, include:

- Outage services to utilities and industrial plants.

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

For the fiscal year ended December 31, [removed: 2021][added: 2022]

The aggregate market value of the common stock held by non-affiliates of the registrant was approximately [removed: $4,566,000,000] [added: $3,258,000,000] as of the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price on the New York Stock Exchange reported for such date.

Number of shares of the registrant’s common stock outstanding as of the close of business on February [removed: 18, 2022: 52,666,149] [added: 17, 2023: 47,687,820] shares.

Portions of the definitive proxy statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders, which document will be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year to which this Form 10-K relates, are incorporated by reference into Items 10 through 14 of Part III of this Form 10-K.

| Item 1. | | | [removed: [Business](#iacee5757810645518695aadd232b66c3_22)] [added: [Business](#i7be34ba6258a4e7796645486ba3e7527_22)] | | | [removed: [1](#iacee5757810645518695aadd232b66c3_22)] [added: [1](#i7be34ba6258a4e7796645486ba3e7527_22)] | | |

| | | | [Human [removed: Capital](#iacee5757810645518695aadd232b66c3_34)] [added: Capital](#i7be34ba6258a4e7796645486ba3e7527_34)] | | | [removed: [5](#iacee5757810645518695aadd232b66c3_34)] [added: [5](#i7be34ba6258a4e7796645486ba3e7527_34)] | | |

| | | | [Available [removed: Information](#iacee5757810645518695aadd232b66c3_40)] [added: Information](#i7be34ba6258a4e7796645486ba3e7527_37)] | | | [removed: [7](#iacee5757810645518695aadd232b66c3_40)] [added: [7](#i7be34ba6258a4e7796645486ba3e7527_37)] | | |

| Item 1A. | | | [Risk [removed: Factors](#iacee5757810645518695aadd232b66c3_43)] [added: Factors](#i7be34ba6258a4e7796645486ba3e7527_40)] | | | [removed: [8](#iacee5757810645518695aadd232b66c3_43)] [added: [8](#i7be34ba6258a4e7796645486ba3e7527_40)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#iacee5757810645518695aadd232b66c3_46)] [added: Comments](#i7be34ba6258a4e7796645486ba3e7527_43)] | | | [removed: [18](#iacee5757810645518695aadd232b66c3_46)] [added: [19](#i7be34ba6258a4e7796645486ba3e7527_43)] | | |

| Item 2. | | | [removed: [Properties](#iacee5757810645518695aadd232b66c3_49)] [added: [Properties](#i7be34ba6258a4e7796645486ba3e7527_46)] | | | [removed: [19](#iacee5757810645518695aadd232b66c3_49)] [added: [19](#i7be34ba6258a4e7796645486ba3e7527_46)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#iacee5757810645518695aadd232b66c3_52)] [added: Proceedings](#i7be34ba6258a4e7796645486ba3e7527_49)] | | | [removed: [19](#iacee5757810645518695aadd232b66c3_52)] [added: [19](#i7be34ba6258a4e7796645486ba3e7527_49)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#iacee5757810645518695aadd232b66c3_55)] [added: Disclosures](#i7be34ba6258a4e7796645486ba3e7527_52)] | | | [removed: [19](#iacee5757810645518695aadd232b66c3_55)] [added: [19](#i7be34ba6258a4e7796645486ba3e7527_52)] | | |

| | | | [Executive Officers of the [removed: Registrant](#iacee5757810645518695aadd232b66c3_58)] [added: Registrant](#i7be34ba6258a4e7796645486ba3e7527_55)] | | | [removed: [20](#iacee5757810645518695aadd232b66c3_58)] [added: [20](#i7be34ba6258a4e7796645486ba3e7527_55)] | | |

| Item 5. | | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#iacee5757810645518695aadd232b66c3_64)] [added: Securities](#i7be34ba6258a4e7796645486ba3e7527_61)] | | | [removed: [21](#iacee5757810645518695aadd232b66c3_64)] [added: [21](#i7be34ba6258a4e7796645486ba3e7527_61)] | | |

| Item 6. | | | [removed: [\[Reserved\]](#iacee5757810645518695aadd232b66c3_67)] [added: [\[Reserved\]](#i7be34ba6258a4e7796645486ba3e7527_64)] | | | [removed: [21](#iacee5757810645518695aadd232b66c3_67)] [added: [21](#i7be34ba6258a4e7796645486ba3e7527_64)] | | |

| Item 7. | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#iacee5757810645518695aadd232b66c3_70)] [added: Operations](#i7be34ba6258a4e7796645486ba3e7527_67)] | | | [removed: [22](#iacee5757810645518695aadd232b66c3_70)] [added: [22](#i7be34ba6258a4e7796645486ba3e7527_67)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#iacee5757810645518695aadd232b66c3_94)] [added: Risk](#i7be34ba6258a4e7796645486ba3e7527_88)] | | | [removed: [44](#iacee5757810645518695aadd232b66c3_94)] [added: [38](#i7be34ba6258a4e7796645486ba3e7527_88)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#iacee5757810645518695aadd232b66c3_97)] [added: Data](#i7be34ba6258a4e7796645486ba3e7527_91)] | | | [removed: [45](#iacee5757810645518695aadd232b66c3_97)] [added: [39](#i7be34ba6258a4e7796645486ba3e7527_91)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#iacee5757810645518695aadd232b66c3_220)] [added: Disclosure](#i7be34ba6258a4e7796645486ba3e7527_178)] | | | [removed: [91](#iacee5757810645518695aadd232b66c3_220)] [added: [85](#i7be34ba6258a4e7796645486ba3e7527_178)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#iacee5757810645518695aadd232b66c3_223)] [added: Procedures](#i7be34ba6258a4e7796645486ba3e7527_181)] | | | [removed: [91](#iacee5757810645518695aadd232b66c3_223)] [added: [85](#i7be34ba6258a4e7796645486ba3e7527_181)] | | |

| Item 9B. | | | [Other [removed: Information](#iacee5757810645518695aadd232b66c3_226)] [added: Information](#i7be34ba6258a4e7796645486ba3e7527_184)] | | | [removed: [91](#iacee5757810645518695aadd232b66c3_226)] [added: [85](#i7be34ba6258a4e7796645486ba3e7527_184)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#iacee5757810645518695aadd232b66c3_232)] [added: Governance](#i7be34ba6258a4e7796645486ba3e7527_190)] | | | [removed: [92](#iacee5757810645518695aadd232b66c3_232)] [added: [86](#i7be34ba6258a4e7796645486ba3e7527_190)] | | |

| Item 11. | | | [Executive [removed: Compensation](#iacee5757810645518695aadd232b66c3_235)] [added: Compensation](#i7be34ba6258a4e7796645486ba3e7527_193)] | | | [removed: [92](#iacee5757810645518695aadd232b66c3_235)] [added: [86](#i7be34ba6258a4e7796645486ba3e7527_193)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#iacee5757810645518695aadd232b66c3_238)] [added: Matters](#i7be34ba6258a4e7796645486ba3e7527_196)] | | | [removed: [92](#iacee5757810645518695aadd232b66c3_238)] [added: [86](#i7be34ba6258a4e7796645486ba3e7527_196)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#iacee5757810645518695aadd232b66c3_241)] [added: Independence](#i7be34ba6258a4e7796645486ba3e7527_199)] | | | [removed: [92](#iacee5757810645518695aadd232b66c3_241)] [added: [86](#i7be34ba6258a4e7796645486ba3e7527_199)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#iacee5757810645518695aadd232b66c3_244)] [added: Services](#i7be34ba6258a4e7796645486ba3e7527_202)] | | | [removed: [92](#iacee5757810645518695aadd232b66c3_244)] [added: [86](#i7be34ba6258a4e7796645486ba3e7527_202)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#iacee5757810645518695aadd232b66c3_250)] [added: Schedules](#i7be34ba6258a4e7796645486ba3e7527_208)] | | | [removed: [93](#iacee5757810645518695aadd232b66c3_250)] [added: [87](#i7be34ba6258a4e7796645486ba3e7527_208)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#iacee5757810645518695aadd232b66c3_256)] [added: Summary](#i7be34ba6258a4e7796645486ba3e7527_214)] | | | [removed: [97](#iacee5757810645518695aadd232b66c3_256)] [added: [91](#i7be34ba6258a4e7796645486ba3e7527_214)] | | |

Forward-looking statements in this report include discussions of our future operating or financial performance and other forward-looking commentary regarding aspects of our business, including market share growth, gross profit, remaining performance obligations, project mix, projects with varying profit margins, selling, general and administrative expenses, [added: our ability to maintain a strong safety record,] and trends in our business, and other characterizations of future events or circumstances, such as the effects of the COVID-19 [removed: pandemic.][added: pandemic and supply chain disruptions and delays.]

Each forward-looking statement included in this report is subject to risks and uncertainties, including those identified [removed: below] in the “Risk Factors” section, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, and other sections of this report.

We undertake no obligation to update any forward-looking [removed: statements.][added: statements unless required by law.]

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

☐

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

| [PART I](#i7be34ba6258a4e7796645486ba3e7527_19) | | | | | | | | |

| | | | [General](#i7be34ba6258a4e7796645486ba3e7527_25) | | | [1](#i7be34ba6258a4e7796645486ba3e7527_25) | | |

| | | | [Operations](#i7be34ba6258a4e7796645486ba3e7527_28) | | | [2](#i7be34ba6258a4e7796645486ba3e7527_28) | | |

| | | | [Competition](#i7be34ba6258a4e7796645486ba3e7527_31) | | | [5](#i7be34ba6258a4e7796645486ba3e7527_31) | | |

| [PART II](#i7be34ba6258a4e7796645486ba3e7527_58) | | | | | | | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i7be34ba6258a4e7796645486ba3e7527_1922) | | | [85](#i7be34ba6258a4e7796645486ba3e7527_1922) | | |

| [PART III](#i7be34ba6258a4e7796645486ba3e7527_187) | | | | | | | | |

| [PART IV](#i7be34ba6258a4e7796645486ba3e7527_205) | | | | | | | | |

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

Applicable risks and uncertainties include, but are not limited to:

- adverse effects of general economic conditions;

- changes in interest rates;

- domestic and international political developments;

- changes in the specific markets for EMCOR’s services;

- adverse business conditions, including scarcity of skilled labor, productivity challenges, the nature and extent of supply chain disruptions impacting availability and pricing of materials, and inflationary trends more generally, including fluctuations in energy costs;

- the impact of legislation and/or government regulations;

- the availability of adequate levels of surety bonding;

- increased competition;

- unfavorable developments in the mix of our business;

- the continuing impact of the COVID-19 pandemic, including the nature, extent, and impact of future variant surges, as well as other health emergencies, and government orders and mandates related thereto, on our revenue and operations; and

- other factors discussed elsewhere in this report.

Accordingly, these statements do not guarantee future performance or events.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

| [PART I](#iacee5757810645518695aadd232b66c3_19) | | | | | | | | |

| | | | [General](#iacee5757810645518695aadd232b66c3_25) | | | [1](#iacee5757810645518695aadd232b66c3_25) | | |

| | | | [Operations](#iacee5757810645518695aadd232b66c3_28) | | | [2](#iacee5757810645518695aadd232b66c3_28) | | |

| | | | [Competition](#iacee5757810645518695aadd232b66c3_31) | | | [5](#iacee5757810645518695aadd232b66c3_31) | | |

| [PART II](#iacee5757810645518695aadd232b66c3_61) | | | | | | | | |

| [PART III](#iacee5757810645518695aadd232b66c3_229) | | | | | | | | |

| [PART IV](#iacee5757810645518695aadd232b66c3_247) | | | | | | | | |

[Table of Contents](#iacee5757810645518695aadd232b66c3_7)

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

Guzzi, Age [removed: 57;] [added: 58;] President since October 2004, Chief Executive Officer since January 2011 and Chairman of the Board since June 2018.

Pompa, Age [removed: 57;] [added: 58;] Executive Vice President and Chief Financial Officer of the Company since April 2006 and Treasurer of the Company from October 2019 to June 2020.

Kevin Matz, Age [removed: 63;] [added: 64;] Executive Vice President-Shared Services of the Company since December 2007 and Senior Vice President-Shared Services from June 2003 to December 2007.

Mauricio, Age [removed: 50;] [added: 51;] General Counsel and Secretary of the Company since January 2016 and Executive Vice President since February 2021.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

*Holders.* As of February [removed: 18, 2022,] [added: 17, 2023,] there were approximately [removed: 480] [added: 470] stockholders of record.

We currently pay a regular quarterly dividend of [removed: $0.13] [added: $0.15] per share.

However, we do not believe that the terms of such agreement currently materially limit our ability to pay [removed: a] [added: such] quarterly [removed: dividend of $0.13 per share] [added: dividends] for the foreseeable future.

The following table summarizes repurchases of our common stock made by us during the quarter ended December 31, [removed: 2021:][added: 2022:]

Since the inception of the repurchase program, the Board has authorized us to repurchase up to [removed: $1.45] [added: $2.15] billion of our outstanding common stock.

As of December 31, [removed: 2021,] [added: 2022,] there remained authorization for us to repurchase approximately [removed: $350.4] [added: $389.8] million of our shares.

(2) Excludes [removed: 1,518] [added: 1,751] shares surrendered to the Company by participants in our share-based compensation plans to satisfy minimum tax withholdings for common stock issued under such plans.

Subsequent to December 31, 2022, our Board of Directors announced its intention to increase the regular quarterly dividend to $0.18 per share commencing with the dividend to be paid in April 2023.

| October 1, 2022 to October 31, 2022 | | | — | | | — | | | — | | | $389,799,870 | | |

| November 1, 2022 to November 30, 2022 | | | — | | | — | | | — | | | $389,799,870 | | |

| December 1, 2022 to December 31, 2022 | | | — | | | — | | | — | | | $389,799,870 | | |

| Total | | | — | | | — | | | — | | | | | |

| October 1, 2021 to October 31, 2021 | | | 13,800 | | | $114.95 | | | 13,800 | | | $361,120,633 | | |

| November 1, 2021 to November 30, 2021 | | | 47,466 | | | $120.06 | | | 47,466 | | | $355,421,942 | | |

| December 1, 2021 to December 31, 2021 | | | 41,607 | | | $120.49 | | | 41,607 | | | $350,408,840 | | |

| Total | | | 102,873 | | | $119.55 | | | 102,873 | | | | | |

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

| | | | December 31, [removed: 2021] [added: 2022] | | | | | | December 31, [removed: 2020] [added: 2021] | | |

| Cash and cash equivalents | | | $ | [removed: 821,345] [added: 456,439] | | | | | $ | [removed: 902,867] [added: 821,345] | |

| Accounts receivable, less allowance for credit losses of [removed: $23,534] [added: $22,382] and [removed: $18,031,] [added: $23,534,] respectively | | | [removed: 2,204,519] [added: 2,567,371] | | | | | | [removed: 1,922,096] [added: 2,204,519] | | |

| Contract assets | | | [removed: 230,143] [added: 273,176] | | | | | | [removed: 171,956] [added: 230,143] | | |

| Inventories | | | [removed: 54,098] [added: 85,641] | | | | | | [removed: 53,338] [added: 54,098] | | |

| Prepaid expenses and other | | | [removed: 80,889] [added: 79,346] | | | | | | [removed: 70,679] [added: 80,889] | | |

| Total current assets | | | [removed: 3,390,994] [added: 3,461,973] | | | | | | [removed: 3,120,936] [added: 3,390,994] | | |

| Property, plant and equipment, net | | | [removed: 152,066] [added: 157,819] | | | | | | [removed: 158,427] [added: 152,066] | | |

| Operating lease right-of-use assets | | | [removed: 260,778] [added: 268,063] | | | | | | [removed: 242,155] [added: 260,778] | | |

| Goodwill | | | [removed: 890,268] [added: 919,151] | | | | | | [removed: 851,783] [added: 890,268] | | |

| Identifiable intangible assets, net | | | [removed: 589,365] [added: 593,975] | | | | | | [removed: 582,893] [added: 589,365] | | |

| Other assets | | | [removed: 157,975] [added: 123,626] | | | | | | [removed: 107,646] [added: 157,975] | | |

| [removed: Total assets] [added: Total operations] | | | $ | [added: 5,524,607 | | | | | $ |] 5,441,446 | | | | | $ | 5,063,840 | |

| Current maturities of long-term debt and finance lease liabilities | | | $ | [removed: 16,235] [added: 15,567] | | | | | $ | [removed: 16,910] [added: 16,235] | |

| Accounts payable | | | [removed: 734,275] [added: 849,284] | | | | | | [removed: 671,886] [added: 734,275] | | |

| Contract liabilities | | | [removed: 788,134] [added: 1,098,263] | | | | | | [removed: 722,252] [added: 788,134] | | |

| Accrued payroll and benefits | | | [removed: 490,867] [added: 465,000] | | | | | | [removed: 450,955] [added: 490,867] | | |

| Other accrued expenses and liabilities | | | [removed: 274,406] [added: 258,190] | | | | | | [removed: 247,597] [added: 274,406] | | |

| Operating lease liabilities, current | | | [removed: 57,814] [added: 67,218] | | | | | | [removed: 53,632] [added: 57,814] | | |

| Total current liabilities | | | [removed: 2,361,731] [added: 2,753,522] | | | | | | [removed: 2,163,232] [added: 2,361,731] | | |

| Long-term debt and finance lease liabilities | | | [removed: 245,450] [added: 231,625] | | | | | | [removed: 259,619] [added: 245,450] | | |

| Operating lease liabilities, long-term | | | [removed: 220,836] [added: 220,764] | | | | | | [removed: 205,362] [added: 220,836] | | |

| Other long-term obligations | | | [removed: 360,340] [added: 344,405] | | | | | | [removed: 382,383] [added: 360,340] | | |

| Total liabilities | | | [removed: 3,188,357] [added: 3,550,316] | | | | | | [removed: 3,010,596] [added: 3,188,357] | | |

| Common stock, $0.01 par value, 200,000,000 shares authorized, [removed: 60,737,006] [added: 60,947,947] and [removed: 60,571,140] [added: 60,737,006] shares issued, respectively | | | [removed: 607] [added: 609] | | | | | | [removed: 606] [added: 607] | | |

| Capital surplus | | | [removed: 61,874] [added: 74,795] | | | | | | [removed: 47,464] [added: 61,874] | | |

| Accumulated other comprehensive loss | | | [removed: (83,562)] [added: (93,451)] | | | | | | [removed: (109,233)] [added: (83,562)] | | |

| Retained earnings | | | [removed: 2,835,504] [added: 3,214,281] | | | | | | [removed: 2,480,321] [added: 2,835,504] | | |

| Treasury stock, at cost [removed: 7,437,268] [added: 13,281,222] and [removed: 5,815,240] [added: 7,437,268] shares, respectively | | | [removed: (562,036)] [added: (1,222,645)] | | | | | | [removed: (366,490)] [added: (562,036)] | | |

| Total EMCOR Group, Inc. stockholders’ equity | | | [removed: 2,252,387] [added: 1,973,589] | | | | | | [removed: 2,052,668] [added: 2,252,387] | | |

| Noncontrolling interests | | | 702 | | | | | | [removed: 576] [added: 702] | | |

| Total equity | | | [removed: 2,253,089] [added: 1,974,291] | | | | | | [removed: 2,053,244] [added: 2,253,089] | | |

| Total liabilities and equity | | | $ | [removed: 5,441,446] [added: 5,524,607] | | | | | $ | [removed: 5,063,840] [added: 5,441,446] | |

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Revenues | | | $ | [removed: 9,903,580] [added: 11,076,120] | | | | | $ | [removed: 8,797,061] [added: 9,903,580] | | | | | $ | [removed: 9,174,611] [added: 8,797,061] | |

| Cost of sales | | | [removed: 8,401,843] [added: 9,472,526] | | | | | | [removed: 7,401,679] [added: 8,401,843] | | | | | | [removed: 7,818,743] [added: 7,401,679] | | |

| Gross profit | | | [removed: 1,501,737] [added: 1,603,594] | | | | | | [removed: 1,395,382] [added: 1,501,737] | | | | | | [removed: 1,355,868] [added: 1,395,382] | | |

| Selling, general and administrative expenses | | | [removed: 970,937] [added: 1,038,717] | | | | | | [removed: 903,584] [added: 970,937] | | | | | | [removed: 893,453] [added: 903,584] | | |

| Restructuring expenses | | | — | | | | | | [removed: 2,214] [added: —] | | | | | | [removed: 1,523] [added: 2,214] | | |

| Total assets | | | $ | 5,524,607 | | | | | $ | 5,441,446 | |

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

| Common stock dividends | | | (27,187) | | | | | | — | | | | | | 158 | | | | | | — | | | | | | (27,345) | | | | | | — | | | | | | — | | |

| Repurchases of common stock | | | (660,609) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (660,609) | | | | | | — | | |

| Balance, December 31, 2022 | | | $ | 1,974,291 | | | | | $ | 609 | | | | | $ | 74,795 | | | | | $ | (93,451) | | | | | $ | 3,214,281 | | | | | $ | (1,222,645) | | | | | $ | 702 | |

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

The decrease in our allowance for credit losses was attributable to the write-off of specific amounts deemed uncollectible, partially offset by the provision for credit losses recorded during 2022.

We have adjusted our allowance for credit losses during 2022 to account for the impact of changing economic conditions, including rising interest rates.

| Balance at December 31, 2022 | | | $ | 22,382 | |

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

These balances decreased from December 31, 2021 primarily as a result of the payment, by our insurers, of certain claims for which we previously maintained a reserve and corresponding insurance receivable.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

*Changes in Estimates*

Based on an evaluation of individual projects that had revisions to total estimated costs, or anticipated contract value, which resulted in a reduction of profitability in excess of $1.0 million, our operating results were negatively impacted by approximately $48.5 million during the year ended December 31, 2022.

Of this amount, approximately $33.5 million was reported within our United States electrical construction and facilities services segment, approximately $13.7 million was reported within our United States mechanical construction and facilities services segment, and approximately $1.3 million was reported within our United States building services segment.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

| Commercial market sector | | | $ | 1,320,392 | | | | | 54 | | % | | | | $ | 1,063,242 | | | | | 52 | | % | | | | $ | 970,576 | | | | | 53 | | % |

| Manufacturing market sector | | | 301,606 | | | | | | 12 | | % | | | | 230,894 | | | | | | 11 | | % | | | | 241,415 | | | | | | 13 | | % |

| Healthcare market sector | | | 178,348 | | | | | | 7 | | % | | | | 107,442 | | | | | | 5 | | % | | | | 79,275 | | | | | | 4 | | % |

| Institutional market sector | | | 154,077 | | | | | | 6 | | % | | | | 178,729 | | | | | | 9 | | % | | | | 146,759 | | | | | | 8 | | % |

| Short duration projects (1) | | | 211,795 | | | | | | 9 | | % | | | | 185,277 | | | | | | 9 | | % | | | | 145,370 | | | | | | 8 | | % |

| Service work | | | 65,709 | | | | | | 3 | | % | | | | 40,963 | | | | | | 2 | | % | | | | 28,287 | | | | | | 2 | | % |

| | | | 2,437,304 | | | | | | | | | | | | 2,033,168 | | | | | | | | | | | | 1,835,017 | | | | | | | | |

| Less intersegment revenues | | | (4,190) | | | | | | | | | | | | (3,275) | | | | | | | | | | | | (5,038) | | | | | | | | |

| Total segment revenues | | | $ | 2,433,114 | | | | | | | | | | | $ | 2,029,893 | | | | | | | | | | | $ | 1,829,979 | | | | | | | |

| | | | 2022 | | | | | | % of Total | | | | | | 2021 | | | | | | % of Total | | | | | | 2020 | | | | | | % of Total | | |

| Commercial market sector | | | $ | 1,711,772 | | | | | 39 | | % | | | | $ | 1,524,685 | | | | | 39 | | % | | | | $ | 1,315,973 | | | | | 37 | | % |

| Manufacturing market sector | | | 632,332 | | | | | | 15 | | % | | | | 579,176 | | | | | | 15 | | % | | | | 486,753 | | | | | | 14 | | % |

| Healthcare market sector | | | 480,954 | | | | | | 11 | | % | | | | 488,910 | | | | | | 12 | | % | | | | 346,315 | | | | | | 10 | | % |

| Short duration projects (1) | | | 337,522 | | | | | | 8 | | % | | | | 297,673 | | | | | | 8 | | % | | | | 335,262 | | | | | | 10 | | % |

| Service work | | | 473,328 | | | | | | 11 | | % | | | | 452,291 | | | | | | 11 | | % | | | | 365,067 | | | | | | 10 | | % |

| | | | 4,337,556 | | | | | | | | | | | | 3,959,421 | | | | | | | | | | | | 3,523,875 | | | | | | | | |

| Less intersegment revenues | | | (10,882) | | | | | | | | | | | | (6,835) | | | | | | | | | | | | (7,086) | | | | | | | | |

| Total segment revenues | | | $ | 4,326,674 | | | | | | | | | | | $ | 3,952,586 | | | | | | | | | | | $ | 3,516,789 | | | | | | | |

| Balance, December 31, 2018 | | | $ | 1,741,441 | | | | | $ | 601 | | | | | $ | 21,103 | | | | | $ | (87,662) | | | | | $ | 2,060,440 | | | | | $ | (253,937) | | | | | $ | 896 | |

| Common stock dividends | | | (17,950) | | | | | | — | | | | | | 149 | | | | | | — | | | | | | (18,099) | | | | | | — | | | | | | — | | |

| Distributions to noncontrolling interests | | | (250) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (250) | | |

The increase in our allowance for credit losses was predominantly attributable to our evaluation of specific outstanding receivables within our United States industrial services segment.

These balances increased from December 31, 2020 as a result of revised estimates for claims on which we expect substantial coverage by insurance.

On January 1, 2021, we adopted the accounting pronouncement issued by the Financial Accounting Standards Board (“FASB”) that simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification (“ASC”) 740 related to intraperiod tax allocations and the methodology for calculating income taxes in an interim period.

The guidance also simplifies aspects of the accounting for franchise taxes as well as enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

We are currently evaluating the potential impact of this accounting pronouncement; however, we do not believe that its adoption will have a material impact on our financial position and/or results of operations.

For each of the years ended December 31, 2021, 2020, and 2019, there were no significant reversals of revenue recognized associated with the revision of transaction prices.

In addition, there were no significant losses recognized during each of the years ended December 31, 2021, 2020, and 2019.

| Commercial market sector | | | $ | 1,059,908 | | | | | 52 | | % | | | | $ | 963,452 | | | | | 53 | | % | | | | $ | 1,078,200 | | | | | 55 | | % |

| Manufacturing market sector | | | 226,644 | | | | | | 11 | | % | | | | 241,415 | | | | | | 13 | | % | | | | 224,913 | | | | | | 11 | | % |

| Healthcare market sector | | | 106,412 | | | | | | 5 | | % | | | | 72,778 | | | | | | 4 | | % | | | | 85,088 | | | | | | 4 | | % |

| Institutional market sector | | | 177,312 | | | | | | 9 | | % | | | | 140,837 | | | | | | 8 | | % | | | | 120,991 | | | | | | 6 | | % |

| Short duration projects (1) | | | 182,614 | | | | | | 9 | | % | | | | 142,542 | | | | | | 8 | | % | | | | 170,631 | | | | | | 9 | | % |

| Service work | | | 39,199 | | | | | | 2 | | % | | | | 26,858 | | | | | | 1 | | % | | | | 38,500 | | | | | | 2 | | % |

| | | | 2,018,706 | | | | | | | | | | | | 1,811,217 | | | | | | | | | | | | 1,965,026 | | | | | | | | |

| Less intersegment revenues | | | (3,240) | | | | | | | | | | | | (5,125) | | | | | | | | | | | | (3,228) | | | | | | | | |

| Total segment revenues | | | $ | 2,015,466 | | | | | | | | | | | $ | 1,806,092 | | | | | | | | | | | $ | 1,961,798 | | | | | | | |

| Commercial market sector | | | $ | 1,525,816 | | | | | 39 | | % | | | | $ | 1,316,013 | | | | | 38 | | % | | | | $ | 1,185,129 | | | | | 36 | | % |

| Manufacturing market sector | | | 523,896 | | | | | | 13 | | % | | | | 430,365 | | | | | | 12 | | % | | | | 533,699 | | | | | | 16 | | % |

| Healthcare market sector | | | 489,028 | | | | | | 12 | | % | | | | 349,235 | | | | | | 10 | | % | | | | 304,622 | | | | | | 9 | | % |

| Short duration projects (1) | | | 308,467 | | | | | | 8 | | % | | | | 343,799 | | | | | | 10 | | % | | | | 365,721 | | | | | | 11 | | % |

| Service work | | | 466,860 | | | | | | 12 | | % | | | | 378,054 | | | | | | 11 | | % | | | | 378,839 | | | | | | 11 | | % |

| | | | 3,930,753 | | | | | | | | | | | | 3,492,013 | | | | | | | | | | | | 3,351,918 | | | | | | | | |

| Less intersegment revenues | | | (7,889) | | | | | | | | | | | | (6,518) | | | | | | | | | | | | (11,581) | | | | | | | | |

| Total segment revenues | | | $ | 3,922,864 | | | | | | | | | | | $ | 3,485,495 | | | | | | | | | | | $ | 3,340,337 | | | | | | | |

| Mobile mechanical services | | | $ | 1,501,919 | | | | | 61 | | % | | | | $ | 1,282,803 | | | | | 60 | | % | | | | $ | 1,253,209 | | | | | 59 | | % |

| Energy services | | | 102,350 | | | | | | 4 | | % | | | | 95,878 | | | | | | 4 | | % | | | | 120,825 | | | | | | 6 | | % |

| Total segment revenues | | | $ | 2,468,892 | | | | | | | | | | | $ | 2,134,016 | | | | | | | | | | | $ | 2,121,661 | | | | | | | |

| | | | 12,765,517 | | | | | | 12,367,608 | | |

| | | | $ | (500,348) | | | | | $ | (496,796) | |

| Total United States operations | | | 4,577,481 | | | | | | 903,608 | | |

| Total operations | | | $ | 4,669,852 | | | | | $ | 929,445 | |

On November 1, 2019, we completed the acquisition of Batchelor & Kimball, Inc. (“BKI”), a leading full service provider of mechanical construction and maintenance services.

This acquisition strengthens our position and broadens our capabilities in the Southern and Southeastern regions of the United States, and the results of its operations have been included within our United States mechanical construction and facilities services segment.

Under the terms of the transaction, we acquired 100% of BKI’s outstanding capital stock for total consideration of approximately $220.3 million.

Goodwill is calculated as the excess of the consideration transferred over the fair value of the net assets acquired and represents the future economic benefits expected from this strategic acquisition.

The weighted average amortization period for the identifiable intangible assets, which consist of a trade name, customer relationships, and contract backlog, is approximately 10.5 years.

In addition to BKI, during 2019, we completed six other acquisitions for total consideration of $85.4 million.

As of December 31, [removed: 2021,] [added: 2022,] our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established in *Internal Control*\-*Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, management has determined that EMCOR’s internal control over financial reporting was effective as of December 31, [removed: 2021.][added: 2022.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2021] [added: 2022] has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report appearing in Item 8 of this Form 10-K, which such report expressed an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

In addition, our management with the participation of our principal executive officer and principal financial officer or persons performing similar functions has determined that no change in our internal control over financial reporting (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) occurred during the fourth quarter of our fiscal year ended December 31, [removed: 2021] [added: 2022] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

[Table of Contents](#iacee5757810645518695aadd232b66c3_7)

PART III

Not applicable.

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

PART III

The information required by this Item 10 with respect to directors is incorporated herein by reference to the section of our definitive Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders entitled “Election of Directors,” which Proxy Statement is to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year to which this Form 10-K relates (the “Proxy Statement”).

*Securities Authorized for Issuance Under Equity Compensation Plans.* The following table summarizes, as of December 31, [removed: 2021,] [added: 2022,] certain information regarding equity compensation plans that were approved by stockholders and equity compensation plans that were not approved by stockholders.

| Equity Compensation Plans Approved by Security Holders | | | | | | [removed: 472,410] [added: 366,954] | | | | | | $ | — | | | | | [removed: 895,682] [added: 792,726] (1) | | |

| Total | | | | | | 366,954 | | | | | | $ | — | | | | | 792,726 (1) | | |

| Total | | | | | | 472,410 | | | | | | $ | — | | | | | 895,682 (1) | | |

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

| | | | Consolidated Balance Sheets - December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | |

| | | | Consolidated Statements of Operations - Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] | | |

| | | | Consolidated Statements Comprehensive Income - Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] | | |

| | | | Consolidated Statements of Cash Flows - Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] | | |

| | | | Consolidated Statements of Equity - Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020] | | |

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

| [removed: 3(b)] [added: 4(f)] | | | | | | [removed: Amended and Restated By-Laws and Amendments thereto] [added: LIBOR Cessation Letter Agreement] | | | | | | [Exhibit [removed: 3(b)] [added: 4(f)] to EMCOR’s Annual Report on Form 10-K for the year ended December 31, [removed: 2016 (“2016] [added: 2021 (“2021] Form [removed: 10-K”)](http://www.sec.gov/Archives/edgar/data/105634/000010563417000043/eme-ex3b_20161231xq4.htm)] [added: 10-K”)](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex4f_20211231xq4.htm)] | | |

| [removed: 4(f)] [added: 21] | | | | | | [removed: LIBOR Cessation Letter Agreement] [added: List of Significant Subsidiaries] | | | | | | [Filed [removed: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex4f_20211231xq4.htm)] [added: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563423000005/eme-ex21_20221231xq4.htm)] | | |

| 10(l-2) | | | | | | First Amendment to LTIP and updated Schedule A to LTIP | | | | | | [Exhibit 10(S-2) [removed: to](http://www.sec.gov/Archives/edgar/data/105634/000093041309001016/c56715_ex10-s2.txt) [2008] [added: to 2008] Form 10-K](http://www.sec.gov/Archives/edgar/data/105634/000093041309001016/c56715_ex10-s2.txt) | | |

| 10(l-9) | | | | | | Seventh Amendment to LTIP | | | | | | [removed: [Filed herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex10lx9_20211231xq4.htm)] [added: [Exhibit 10(l-9) to 2021 Form 10-K](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex10lx9_20211231xq4.htm)] | | |

| 23.1 | | | | | | Consent of Ernst & Young LLP | | | | | | [Filed [removed: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex231_20211231xq4.htm)] [added: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563423000005/eme-ex231_20221231xq4.htm)] | | |

| 31.1 | | | | | | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Anthony J. Guzzi, the Chairman, President and Chief Executive Officer | | | | | | [Filed [removed: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex311_20211231xq4.htm)] [added: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563423000005/eme-ex311_20221231xq4.htm)] | | |

| 31.2 | | | | | | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Mark A. Pompa, the Executive Vice President and Chief Financial Officer | | | | | | [Filed [removed: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex312_20211231xq4.htm)] [added: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563423000005/eme-ex312_20221231xq4.htm)] | | |

| 32.1 | | | | | | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chairman, President and Chief Executive Officer | | | | | | [removed: [Furnished](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex321_20211231xq4.htm)] [added: [Furnished](https://www.sec.gov/Archives/edgar/data/105634/000010563423000005/eme-ex321_20221231xq4.htm)] | | |

| 32.2 | | | | | | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Executive Vice President and Chief Financial Officer | | | | | | [removed: [Furnished](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex322_20211231xq4.htm)] [added: [Furnished](https://www.sec.gov/Archives/edgar/data/105634/000010563423000005/eme-ex322_20221231xq4.htm)] | | |

| 95.1 | | | | | | Information concerning mine safety violations or other regulatory matters | | | | | | [Filed [removed: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex951_20211231xq4.htm)] [added: herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563423000005/eme-ex951_20221231xq4.htm)] | | |

| 101 | | | | | | The following materials from EMCOR Group, Inc.’s Annual Report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity and (vi) the Notes to Consolidated Financial Statements. | | | | | | Filed | | |

| 3(b) | | | | | | Second Amended and Restated By-Laws of EMCOR | | | | | | [Exhibit 3.1 to EMCOR’s Report on Form 8-K (Date of Report October 25, 2022)](https://www.sec.gov/Archives/edgar/data/105634/000010563422000036/eme-ex31_20221025x8k.htm) | | |

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

| 10(x) | | | | | | Restricted Stock Unit Award Agreement dated June 30, 2017 between EMCOR and Mark A. Pompa | | | | | | [Exhibit 10(f)(f) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017](http://www.sec.gov/Archives/edgar/data/105634/000010563417000128/eme-ex10ff_2017630xq2.htm) | | |

| 21 | | | | | | List of Significant Subsidiaries | | | | | | [Filed herewith](https://www.sec.gov/Archives/edgar/data/105634/000010563422000006/eme-ex21_20211231xq4.htm) | | |

[Table of [removed: Contents](#iacee5757810645518695aadd232b66c3_7)][added: Contents](#i7be34ba6258a4e7796645486ba3e7527_7)]

Date: February [removed: 24, 2022][added: 23, 2023]

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February [removed: 24, 2022.][added: 23, 2023.]

| /S/ JASON R. NALBANDIAN | | | [added: Senior] Vice President and Chief Accounting Officer | | |

| | | | | | |

| /s/ REBECCA A. WEYENBERG | | | Director | | |

| Rebecca A. Weyenberg | | | | | |

[Table of Contents](#i7be34ba6258a4e7796645486ba3e7527_7)

| Year Ended December 31, 2022 | | | | | | $ | 23,534 | | | | | 5,166 | | | | | | — | | | | | | (6,318) | | | | | | $ | 22,382 | |

| Year Ended December 31, 2019 | | | | | | $ | 15,361 | | | | | 2,628 | | | | | | — | | | | | | (3,523) | | | | | | $ | 14,466 | |