UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM			10-Q



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2020~~2021



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-8267



EMCOR Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)



Delaware		11-2125338
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
301 Merritt Seven
Norwalk,	Connecticut	06851-1092
(Address of Principal Executive Offices)		(Zip Code)



(203)			849-7800
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock

EME

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Applicable Only To Corporate Issuers

Number of shares of Common Stock outstanding as of the close of business on April 27, ~~2020: 54,846,251~~2021: 54,556,403 shares.

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Table of Contents

EMCOR Group, Inc.

TABLE OF CONTENTS



				Page No.
PART I. - Financial Information.
Item 1.			Financial Statements.
			Consolidated Balance Sheets - as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020	1
			Condensed Consolidated Statements of Operations - three months ended March 31, ~~2020~~2021 and ~~2019~~2020	2
			Condensed Consolidated Statements of Comprehensive Income - three months ended March 31, ~~2020~~2021 and ~~2019~~2020	3
			Condensed Consolidated Statements of Cash Flows - three months ended March 31, ~~2020~~2021 and ~~2019~~2020	4
			Condensed Consolidated Statements of Equity - three months ended March 31, ~~2020~~2021 and ~~2019~~2020	5
			Notes to Consolidated Financial Statements	6
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations.	2122
Item 3.			Quantitative and Qualitative Disclosures about Market Risk.	3537
Item 4.			Controls and Procedures.	3638
PART II. - Other Information.
Item 1.			Legal Proceedings.	3739
Item ~~1A.~~2.			~~Risk Factors.~~	37
~~Item 2.~~	Unregistered Sales of Equity Securities and Use of Proceeds.	3839
Item 6.4.			~~Exhibits.~~Mine Safety Disclosures.	3839
Item 6.			Exhibits.	40

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FORWARD-LOOKING STATEMENTS

~~Certain information included in this~~This report or in other materials we have filed or will file with the Securities and Exchange Commission (the “SEC”) (as well as information included in oral statements or other written statements made or to be made by us) contains ~~or may contain~~ forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Act”). Such statements are being made pursuant to the 1995 Act and with the intention of obtaining the benefit of the “Safe Harbor” provisions of the 1995 Act. Forward-looking statements are based on information available to us and our perception of such information as of the date of this report and our current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management.statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They generally contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” variations of such wording and other words or phrases of similar ~~meaning~~meaning. Forward-looking statements in ~~connection with a discussion~~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, and trends in our business and other characterizations of future events or ~~circumstances. Any or all~~circumstances, such as the effects of the COVID-19 pandemic. Each forward-looking ~~statements~~statement included in this report ~~and in any other reports or public statements made by us are only predictions and are~~is subject to risks uncertainties, and assumptions, including, but not limited to adverse effects of general economic conditions, changes in the political environment, changes in the specific markets for our services, adverse business conditions, availability of adequate levels of surety bonding, increased competition, unfavorable labor productivity, mix of business, the impact of the 2020 ransomware attack, and the impact of the COVID-19 pandemic on our revenue and operations. These risks and uncertainties, ~~are discussed~~including those identified 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, ~~and/or~~and in our Form 10-K for the year ended December 31, ~~2019 filed with~~2020, including, without limitation, the ~~SEC and available at~~ ~~www.sec.gov~~ ~~and~~ ~~www.emcorgroup.com~~.“Risk Factors” section of such Form 10-K. Such risks and uncertainties ~~and assumptions are difficult to predict, beyond our control and may turn out to be inaccurate, causing~~could cause actual results to differ materially from those that might be anticipated ~~(whether expressly~~from, or ~~implied) from~~projected or implied by, our forward-looking statements. The forward-looking statements contained in this report speak only as of the filing date of this report. We undertake no obligation to ~~publicly~~ update any forward-looking ~~statements, whether as a result of new information, future events or otherwise.~~statements. However, any further disclosures made on related subjects in our subsequent reports on Forms 10-K, 10-Q, and 8-K should be consulted. We caution investors not to place undue reliance on forward-looking statements, due to their inherent uncertainty.

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PART I. – FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS.

EMCOR Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	March 31, 2020 (Unaudited)			December 31, 2019				March 31, 2021 (Unaudited)		December 31, 2020
ASSETS							ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	347,092		$	358,818		Cash and cash equivalents	$	758,833	$	902,867
Accounts receivable, less allowance for credit losses of $19,993 and $14,466, respectively	2,055,483			2,030,813
Accounts receivable, less allowance for credit losses of $18,063 and $18,031, respectively							Accounts receivable, less allowance for credit losses of $18,063 and $18,031, respectively	2,037,525		1,922,096
Contract assets	195,265			177,830			Contract assets	192,369		171,956
Inventories	35,387			40,446			Inventories	48,212		53,338
Prepaid expenses and other	52,161			51,976			Prepaid expenses and other	68,692		70,679
Total current assets	2,685,388			2,659,883			Total current assets	3,105,631		3,120,936
Property, plant and equipment, net	157,848			156,187			Property, plant and equipment, net	157,202		158,427
Operating lease right-of-use assets	237,796			245,471			Operating lease right-of-use assets	239,457		242,155
Goodwill	1,064,853			1,063,911			Goodwill	862,323		851,783
Identifiable intangible assets, net	597,897			611,444			Identifiable intangible assets, net	580,555		582,893
Other assets	91,765			93,462			Other assets	116,021		107,646
Total assets	$	4,835,547		$	4,830,358		Total assets	$	5,061,189	$	5,063,840
LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current liabilities:							Current liabilities:
Current maturities of long-term debt and finance lease liabilities	$	10,360		$	18,092		Current maturities of long-term debt and finance lease liabilities	$	16,713	$	16,910
Accounts payable	592,576			665,402			Accounts payable	624,884		671,886
Contract liabilities	590,873			623,642			Contract liabilities	739,572		722,252
Accrued payroll and benefits	301,878			382,573			Accrued payroll and benefits	384,942		450,955
Other accrued expenses and liabilities	237,973			195,757			Other accrued expenses and liabilities	272,942		247,597
Operating lease liabilities, current	52,722			53,144			Operating lease liabilities, current	54,354		53,632
Total current liabilities	1,786,382			1,938,610			Total current liabilities	2,093,407		2,163,232
Borrowings under revolving credit facility	200,000			50,000
Long-term debt and finance lease liabilities	294,181			244,139			Long-term debt and finance lease liabilities	259,714		259,619
Operating lease liabilities, long-term	198,492			204,950			Operating lease liabilities, long-term	201,894		205,362
Other long-term obligations	328,898			334,879			Other long-term obligations	385,502		382,383
Total liabilities	2,807,953			2,772,578			Total liabilities	2,940,517		3,010,596
Equity:							Equity:
EMCOR Group, Inc. stockholders’ equity:							EMCOR Group, Inc. stockholders’ equity:
Preferred stock, $0.10 par value, 1,000,000 shares authorized, zero issued and outstanding	—			—			Preferred stock, $0.10 par value, 1,000,000 shares authorized, zero issued and outstanding	0		0
Common stock, $0.01 par value, 200,000,000 shares authorized, 60,460,947 and 60,359,252 shares issued, respectively	605			604
Common stock, $0.01 par value, 200,000,000 shares authorized, 60,662,383 and 60,571,140 shares issued, respectively							Common stock, $0.01 par value, 200,000,000 shares authorized, 60,662,383 and 60,571,140 shares issued, respectively	607		606
Capital surplus	34,745			32,274			Capital surplus	48,693		47,464
Accumulated other comprehensive loss	(91,722		)	(89,288		)	Accumulated other comprehensive loss	(107,844)		(109,233)
Retained earnings	2,436,305			2,367,481			Retained earnings	2,557,919		2,480,321
Treasury stock, at cost 5,623,176 and 4,139,421 shares, respectively	(352,985		)	(253,937		)
Treasury stock, at cost 5,932,704 and 5,815,240 shares, respectively							Treasury stock, at cost 5,932,704 and 5,815,240 shares, respectively	(379,407)		(366,490)
Total EMCOR Group, Inc. stockholders’ equity	2,026,948			2,057,134			Total EMCOR Group, Inc. stockholders’ equity	2,119,968		2,052,668
Noncontrolling interests	646			646			Noncontrolling interests	704		576
Total equity	2,027,594			2,057,780			Total equity	2,120,672		2,053,244
Total liabilities and equity	$	4,835,547		$	4,830,358		Total liabilities and equity	$	5,061,189	$	5,063,840

See Notes to Consolidated Financial Statements.

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EMCOR Group, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)(Unaudited)


	Three months ended March 31,							Three months ended March 31,
	2020			2019				2021		2020
Revenues	$	2,299,832		$	2,158,728		Revenues	$	2,304,049	$	2,299,832
Cost of sales	1,966,771			1,849,974			Cost of sales	1,962,976		1,966,771
Gross profit	333,061			308,754			Gross profit	341,073		333,061
Selling, general and administrative expenses	226,997			206,169			Selling, general and administrative expenses	224,069		226,997
Restructuring expenses	69			275			Restructuring expenses	0		69
Operating income	105,995			102,310			Operating income	117,004		105,995
Net periodic pension (cost) income	742			406			Net periodic pension (cost) income	908		742
Interest expense, net	(2,488		)	(2,823		)	Interest expense, net	(1,363)		(2,488)
Income before income taxes	104,249			99,893			Income before income taxes	116,549		104,249
Income tax provision	28,584			27,483			Income tax provision	31,604		28,584
Net income	$	75,665		$	72,410
Net income including noncontrolling interests							Net income including noncontrolling interests	84,945		75,665
Less: Net income attributable to noncontrolling interests							Less: Net income attributable to noncontrolling interests	(171)		0
Net income attributable to EMCOR Group, Inc.							Net income attributable to EMCOR Group, Inc.	$	84,774	$	75,665

Basic earnings per common share	$	1.35		$	1.29		Basic earnings per common share	$	1.54	$	1.35

Diluted earnings per common share	$	1.35		$	1.28		Diluted earnings per common share	$	1.54	$	1.35

Dividends declared per common share	$	0.08		$	0.08		Dividends declared per common share	$	0.13	$	0.08

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EMCOR Group, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 7 - Debt

Debt in the accompanying Consolidated Balance Sheets consisted of the following amounts as of March 31, 2021 and December 31, 2020 (in thousands):

March 31,
2020 December 31,
2019
Revolving credit facility $ 200,000
$ 50,000
Term loan 300,000
254,431
Unamortized debt issuance costs (4,720 ) (1,879 )
Finance lease obligations 9,261
9,679
Total debt 504,541
312,231
Less: current maturities 10,360
18,092
Total long-term debt $ 494,181
$ 294,139


	March 31, 2021		December 31, 2020
Term loan	$	270,563	$	270,563
Unamortized debt issuance costs	(3,761)		(4,000)
Finance lease liabilities	9,625		9,966
Total debt	276,427		276,529
Less: current maturities	16,713		16,910
Total long-term debt	$	259,714	$	259,619

Credit Agreement

Until March 2, 2020, we had a credit agreement dated as of August 3, 2016,, which provided for a ~~$900.0~~$900.0 million revolving credit facility (the “2016 Revolving Credit Facility”) and a $400.0 million term loan (the “2016 Term Loan”) (collectively referred to as the “2016 Credit Agreement”). On March 2, 2020, we amended and restated the 2016 Credit Agreement to provide for a $1.3 billion revolving credit facility (the “2020 Revolving Credit Facility”) and a $300.0 million term loan (the “2020 Term Loan”) (collectively referred to as the “2020 Credit Agreement”) expiring March 2, ~~2025~~.2025. We may increase the 2020 Revolving Credit Facility to ~~$1.9~~$1.9 billion if additional lenders are identified and/or existing lenders are willing to increase their current commitments. We may allocate up to ~~$400.0~~$400.0 million of available capacity under the 2020 Revolving Credit Facility to letters of credit for our account or for the account of any of our subsidiaries.

At the Company’s election, borrowings under the 2020 Credit Agreement bear interest at either: (1) a base rate plus a margin of 0.00% to 0.75%, based on certain financial tests, or (2) United States dollar LIBOR (0.11% at March 31, 2021) plus 1.00% to 1.75%, based on certain financial tests. The base rate is determined by the greater of: (a) the prime commercial lending rate announced by Bank of Montreal from time to time (3.25% at March 31, 2021), (b) the federal funds effective rate, plus ½ of 1.00%, (c) the daily one month LIBOR rate, plus 1.00%, or (d) 0.00%. The interest rate in effect at March 31, 2021 was 1.11%. A commitment fee is payable on the average daily unused amount of the 2020 Revolving Credit Facility, which ranges from 0.10% to 0.25%, based on certain financial tests. The fee was 0.10% of the unused amount as of March 31, 2021. Fees for letters of credit issued under the 2020 Revolving Credit Facility range from 0.75% to 1.75% of the respective face amounts of outstanding letters of credit, depending on the nature of the letter of credit, and are computed based on certain financial tests.

As of March 31, 2021 and December 31, 2020, the balance of the 2020 Term Loan was $270.6 million. As of March 31, 2021 and December 31, 2020, there were 0 direct borrowings outstanding under the 2020 Revolving Credit Facility; however, we had $71.3 million of letters of credit outstanding, which reduce the available capacity under such facility. We capitalized an additional $3.1 million of debt issuance costs associated with the 2020 Credit Agreement. Debt issuance costs are amortized over the life of the agreement as part of interest expense.

Obligations under the 2020 Credit Agreement are guaranteed by most of our direct and indirect subsidiaries and are secured by substantially all of our assets. The 2020 Credit Agreement contains various covenants providing for, among other things, the maintenance of certain financial ratios and certain limitations on the payment of dividends, common stock repurchases, investments, acquisitions, indebtedness, and capital expenditures. We were in compliance with all such covenants as of March 31, ~~2020 with respect to the 2020 Credit Agreement~~2021 and ~~as of~~ December 31, ~~2019, with respect to the 2016 Credit Agreement. A commitment fee is payable on the average daily unused amount of the 2020 Revolving Credit Facility, which ranges from~~ ~~0.10%~~ to ~~0.25%, based on certain financial tests. The fee was~~ ~~0.10%~~ ~~of the unused amount as of March 31,~~ 2020. ~~Borrowings under the 2020 Credit Agreement bear interest at (1) a base rate plus a margin of~~ ~~0.00%~~ to ~~0.75%, based on certain financial tests, or (2) United States dollar LIBOR (0.87% and~~ ~~0.99%~~ at ~~March 31, 2020~~ ~~for our 2020 Revolving Credit Facility and our 2020 Term Loan, respectively) plus~~ ~~1.00%~~ to ~~1.75%~~, based on certain financial tests. The base rate is determined by the greater of (a) the prime commercial lending rate announced by Bank of Montreal from time to time (3.25% at March 31, 2020), (b) the federal funds effective rate, plus ½ of 1.00%, (c) the daily one month LIBOR rate, plus 1.00%, or (d) 0.00%. The interest rates in effect at March 31, 2020 were 1.87% and 1.99% for our 2020 Revolving Credit Facility and our 2020 Term Loan, respectively. Fees for letters of credit issued under the 2020 Revolving Credit Facility range from ~~0.75%~~ to ~~1.75%~~ of the respective face amounts of outstanding letters of credit, depending on the nature of the letter of credit, and are computed based on certain financial tests. We capitalized an additional $3.1 million of debt issuance costs associated with the 2020 Credit Agreement. Debt issuance costs are amortized over the life of the agreement and are included as part of interest expense.

We are required to make annual ~~installment~~principal payments on the 2020 Term ~~Loan, with~~Loan. Any voluntary prepayments are applied against the outstanding balance of the loan and reduce our future scheduled payments on a ~~principal payment of $7.5 million~~ratable basis. Based on ~~December 31, 2020 and~~our outstanding balance, principal payments of $13.9 million are due on December 31 of each ~~subsequent~~ year ~~in the amount of $15.0 million. All~~until maturity, with any remaining unpaid principal and interest is due on March 2, 2025. As

Table of ~~March 31, 2020~~Contents

EMCOR Group, Inc. and ~~December 31, 2019, the balance of the 2020 Term Loan and the 2016 Term Loan was $300.0 million and $254.4 million, respectively. As of~~ ~~March 31, 2020~~ ~~and~~ ~~December 31, 2019, we had approximately~~ ~~$79.0 million~~ and $109.0 million of letters of credit outstanding, respectively. There were $200.0 million in borrowings outstanding under the 2020 Revolving Credit Facility as of March 31, 2020, and there were $50.0 million in borrowings outstanding under the 2016 Revolving Credit Facility as of December 31, 2019.Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 8 - Fair Value Measurements

~~We use~~For disclosure purposes, we utilize a fair value hierarchy ~~that prioritizes~~to categorize qualifying assets and liabilities into three broad levels based on the priority of the inputs ~~to valuation techniques~~ used to ~~measure~~determine their fair ~~value.~~values. The hierarchy, which gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs, is comprised of the following three levels:

Level 1 – Unadjusted quoted ~~market~~ prices in active markets for identical assets and liabilities.

Level 2 – Observable inputs, other than Level 1 ~~inputs. Level 2~~ inputs, ~~would typically include~~that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not ~~active or financial instruments for which all significant~~active; and model-derived valuations whose inputs are observable ~~either directly~~ or ~~indirectly.~~

~~Table of Contents~~

~~EMCOR Group, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~NOTE 8 Fair Value Measurements - (Continued)~~

whose significant value drivers are observable.

Level 3 – ~~Prices or valuations that require~~Unobservable inputs that ~~are both significant to~~reflect the ~~measurement and unobservable.~~reporting entity’s own assumptions.

Recurring Fair Value Measurements

The following tables ~~provide~~summarize the assets and liabilities carried at fair value measured on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 (in thousands):


	Assets at Fair Value as of March 31, 2021
Asset Category	Level 1		Level 2		Level 3		Total
Cash and cash equivalents (1)	$	758,833	$	0	$	0	$	758,833
Restricted cash (2)	924		0		0		924
Deferred compensation plan assets (3)	42,424		0		0		42,424
Total	$	802,181	$	0	$	0	$	802,181


	Assets at Fair Value as of March 31, 2020									Assets at Fair Value as of December 31, 2020
Asset Category	Level 1		Level 2		Level 3		Total		Asset Category	Level 1		Level 2		Level 3		Total
Cash and cash equivalents ⁽¹⁾	$	347,092	$	—	$	—	$	347,092	Cash and cash equivalents (1)	$	902,867	$	0	$	0	$	902,867
Restricted cash ⁽²⁾	1,035		—		—		1,035		Restricted cash (2)	695		0		0		695
Deferred compensation plan assets ⁽³⁾	29,626		—		—		29,626		Deferred compensation plan assets (3)	36,491		0		0		36,491
Total	$	377,753	$	—	$	—	$	377,753	Total	$	940,053	$	0	$	0	$	940,053

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EMCOR Group, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 14 - Segment Information (Continued)

The following tables present financial information for each of our reportable segments for the three months ended March 31, 2021 and 2020 (in thousands):


	For the three months ended March 31,
	2021		2020
Revenues from unrelated entities:
United States electrical construction and facilities services	$	456,168	$	461,803
United States mechanical construction and facilities services	903,925		834,112
United States building services	581,839		527,611
United States industrial services	235,382		363,929
Total United States operations	2,177,314		2,187,455
United Kingdom building services	126,735		112,377
Total operations	$	2,304,049	$	2,299,832

Total revenues:
United States electrical construction and facilities services	$	457,533	$	462,791
United States mechanical construction and facilities services	907,674		838,804
United States building services	602,735		542,018
United States industrial services	245,928		370,143
Less intersegment revenues	(36,556)		(26,301)
Total United States operations	2,177,314		2,187,455
United Kingdom building services	126,735		112,377
Total operations	$	2,304,049	$	2,299,832


	For the three months ended March 31,
	2021		2020
Operating income (loss):
United States electrical construction and facilities services	$	40,264	$	40,312
United States mechanical construction and facilities services	64,950		45,171
United States building services	29,334		21,261
United States industrial services	(2,443)		15,425
Total United States operations	132,105		122,169
United Kingdom building services	9,411		5,764
Corporate administration	(24,512)		(21,869)
Restructuring expenses	0		(69)
Total operations	117,004		105,995
Other corporate items:
Net periodic pension (cost) income	908		742
Interest expense, net	(1,363)		(2,488)
Income before income taxes	$	116,549	$	104,249

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EMCOR Group, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 14 - Segment Information (Continued)


	March 31, 2021		December 31, 2020
Total assets:
United States electrical construction and facilities services	$	720,703	$	672,226
United States mechanical construction and facilities services	1,568,914		1,542,531
United States building services	1,069,085		1,040,160
United States industrial services	620,295		550,513
Total United States operations	3,978,997		3,805,430
United Kingdom building services	242,050		227,894
Corporate administration	840,142		1,030,516
Total operations	$	5,061,189	$	5,063,840

NOTE 15 - Subsequent Events

In April 2021, we acquired a company for an immaterial amount. This company provides mobile mechanical services across North Texas, and the results of its operations will be included in our United States building services segment. The acquisition of this business will be accounted for by the acquisition method, and the amount paid will be allocated to its respective assets and liabilities, based upon the estimated fair value of such assets and liabilities on the date of acquisition by us.

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~~NOTE 14 Segment Information~~

We have the following reportable segments: (a) United States electrical construction and facilities services (involving systems for electrical power transmission and distribution; premises electrical and lighting systems; process instrumentation in the refining, chemical processing, food processing, and mining industries; low-voltage systems, such as fire alarm, security, and process control; voice and data communication; roadway and transit lighting; and fiber optic lines); (b) United States mechanical construction and facilities services (involving systems for heating, ventilation, air conditioning, refrigeration, and clean-room process ventilation; fire protection; plumbing, process, and high-purity piping; controls and filtration; water and wastewater treatment; central plant heating and cooling; cranes and rigging; millwrighting; and steel fabrication, erection and welding); (c) United States building services; (d) United States industrial services; and (e) United Kingdom building services. The “United States building services” and “United Kingdom building services” segments principally consist of those operations which provide a portfolio of services needed to support the operation and maintenance of customers’ facilities, including commercial and government site-based operations and maintenance; facility maintenance and services, including reception, security, and catering services; outage services to utilities and industrial plants; military base operations support services; mobile mechanical maintenance and services, including maintenance and service of mechanical, electrical, plumbing, and building automation systems; floor care and janitorial services; landscaping, lot sweeping, and snow removal; facilities management; vendor management; call center services; installation and support for building systems; program development, management and maintenance for energy systems; technical consulting and diagnostic services; infrastructure and building projects for federal, state and local governmental agencies and bodies; and small modification and retrofit projects, which services are not generally related to customers’ construction programs. The “United States industrial services” segment principally consists of those operations which provide industrial maintenance and services for refineries, petrochemical plants, and other customers within the oil and gas industry. Services of this segment include refinery turnaround planning and engineering; specialty welding; overhaul and maintenance of critical process units; specialty technical services; on-site repairs, maintenance and service of heat exchangers, towers, vessels, and piping; design, manufacturing, repair, and hydro blast cleaning of shell and tube heat exchangers and related equipment; and other support services for customers within the upstream and midstream sectors.

~~The following tables present information about industry segments and geographic areas for the three months ended~~ ~~March 31, 2020~~ ~~and~~ ~~2019~~ ~~(in thousands):~~

For the three months ended March 31,
2020 2019
Revenues from unrelated entities:
United States electrical construction and facilities services $ 525,229
$ 528,070
United States mechanical construction and facilities services 834,112
752,409
United States building services 518,083
512,079
United States industrial services 310,031
258,645
Total United States operations 2,187,455
2,051,203
United Kingdom building services 112,377
107,525
Total worldwide operations $ 2,299,832
$ 2,158,728

Total revenues:
United States electrical construction and facilities services $ 526,245
$ 528,982
United States mechanical construction and facilities services 838,804
759,764
United States building services 532,477
530,596
United States industrial services 316,230
259,275
Less intersegment revenues (26,301 ) (27,414 )
Total United States operations 2,187,455
2,051,203
United Kingdom building services 112,377
107,525
Total worldwide operations $ 2,299,832
$ 2,158,728

~~Table of Contents~~

~~EMCOR Group, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~NOTE 14 Segment Information - (Continued)~~

For the three months ended March 31,
2020 2019
Operating income (loss):
United States electrical construction and facilities services $ 43,903
$ 42,951
United States mechanical construction and facilities services 45,171
40,985
United States building services 20,838
27,483
United States industrial services 12,257
9,636
Total United States operations 122,169
121,055
United Kingdom building services 5,764
4,141
Corporate administration (21,869 ) (22,611 )
Restructuring expenses (69 ) (275 )
Total worldwide operations 105,995
102,310
Other corporate items:
Net periodic pension (cost) income 742
406
Interest expense, net (2,488 ) (2,823 )
Income before income taxes $ 104,249
$ 99,893

March 31,
2020 December 31,
2019
Total assets:
United States electrical construction and facilities services $ 783,887
$ 834,802
United States mechanical construction and facilities services 1,506,313
1,536,325
United States building services 1,022,266
996,664
United States industrial services 902,791
829,793
Total United States operations 4,215,257
4,197,584
United Kingdom building services 190,143
181,147
Corporate administration 430,147
451,627
Total worldwide operations $ 4,835,547
$ 4,830,358



ITEM 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Business Description

We are one of the largest electrical and mechanical construction and facilities services firms in the United States. In addition, we provide a number of building services and industrial services. Our services are provided to a broad range of commercial, industrial, utility, and institutional customers through approximately 8085 operating ~~subsidiaries and joint venture entities.~~subsidiaries. Our offices are located in the United States and the United Kingdom.

~~Operating Segments~~

We have the following reportable segments: (a) United States electrical construction and facilities services (involving systems for electrical power transmission, distribution, and ~~distribution;~~generation, including sustainable energy solutions such as solar, photovoltaic, and wind; premises electrical and lighting systems; process instrumentation in the refining, chemical processing, and food processing ~~and mining~~ industries; low-voltage systems, such as fire alarm, security, and process control; voice and data ~~communication;~~communication, including fiber-optic and low-voltage cabling, distributed antenna systems, and audiovisual systems; roadway and transit ~~lighting;~~lighting and signaling; and fiber optic lines); (b) United States mechanical construction and facilities services (involving systems for heating, ventilation, air conditioning, refrigeration, and clean-room process ventilation; fire protection; plumbing, process, and high-purity piping; controls and filtration; water and wastewater treatment; central plant heating and cooling; cranes and rigging; millwrighting; and steel fabrication, erection, and welding); (c) United States building services; (d) United States industrial services; and (e) United Kingdom building services. The “United States building services” and “United Kingdom building services” segments principally consist of those operations which provide a portfolio of services needed to support the operation and maintenance of customers’ facilities, including commercial and government site-based operations and maintenance; facility management, maintenance, and ~~services, including reception, security, and catering~~ services; outage services to utilities and industrial plants; military base operations support services; mobile mechanical maintenance and services, including maintenance and service of mechanical, electrical, plumbing, and building automation systems; indoor air quality improvement services; floor care and janitorial services; landscaping, lot sweeping, and snow removal; ~~facilities management;~~other building services, including reception, security, and catering; vendor management; call center services; installation and support for building systems; program development, management, and maintenance for energy ~~systems;~~systems, including services aimed at assisting our customers in reducing energy consumption; technical consulting and diagnostic services; infrastructure and building projects for federal, state, and local governmental agencies and bodies; and small modification and retrofit projects, which services are not generally related to customers’ construction programs. The “United States industrial services” segment principally consists of those operations which provide industrial maintenance and services for refineries, petrochemical plants, and other customers within the oil and gas industry. Services of this segment include refinery turnaround planning and engineering; specialty welding; overhaul and maintenance of critical process units; specialty technical services; instrumentation and electrical services for energy infrastructure; on-site repairs, maintenance, and service of heat exchangers, towers, vessels, and piping; and design, manufacturing, repair, and ~~hydro blast~~hydroblast cleaning of shell and tube heat exchangers and related ~~equipment;~~equipment.

Our reportable segments reflect certain reclassifications of prior year amounts from our United States electrical construction and facilities services segment to our United States industrial services and our United States building services segments due to changes in our internal reporting structure aimed at realigning our service offerings.

COVID-19 and Market Update

We continue to monitor the short- and long-term impacts of COVID-19, a global pandemic that has caused a significant slowdown in the global economy and began to impact our operations in late March 2020. Although the pandemic has not had the level of financial impact on our United States construction segments and our United States and United Kingdom building services segments that we initially expected, it continues to result in various disruptions to our operations. Such impacts include, but are not limited to, reduced labor efficiency resulting from the adherence to physical distancing and other ~~support~~enhanced safety protocols demanded by the current environment, the curtailment or deferral of maintenance and service projects by some of our customers, and temporary shutdowns of active projects as customers work through COVID-19 related matters. As a result, we continue to experience delays in certain projects and disruptions to the flow of our work in order to comply with these new safety protocols.

Our United States industrial services segment continues to be the most significantly impacted by the COVID-19 pandemic, as a result of the deterioration in the demand for oil and other refined products. The prolonged impacts of lower demand and overall market uncertainty has resulted in our customers canceling or deferring projects, reducing capital spending, implementing various cost cutting measures, and closing certain of their facilities. Such customer actions have resulted in a significant decrease in the demand for our service offerings within this segment.

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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, there remains significant uncertainty about the future impacts of the pandemic, including the potential effects on our operations. Although we continue to quote new work for customers ~~within~~and are cautiously optimistic about the ~~upstream~~markets in which we operate, should the broader economy worsen due to an increase in more contagious variants of the virus or surges in the number of cases, 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 ~~midstream sectors.~~service projects. The extent to which the COVID-19 pandemic will impact our business and results of operations 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 extent, duration, and effective execution of ongoing government stabilization and recovery efforts; the timing, availability, efficacy, adoption, and distribution of vaccines or other preventative treatments; our customers’ demand for our services; our ability to continue to effectively operate in this environment; and the ability of our customers to pay us for services rendered. To date, we have been able to source the supplies and materials needed to operate our business with minimal disruptions and recent volatility in commodity prices has not had a significant impact on us. However, the impact of the COVID-19 pandemic on our vendors and the materials 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 down decision-making, delay planned work, or seek to terminate existing agreements. Any of these events could have a material adverse effect on our business, financial condition, and/or results of operations.

Overview

The following table presents selected financial data for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in thousands, except percentages and per share data):


	For the three months ended March 31,							For the three months ended March 31,
	2020			2019				2021			2020
Revenues	$	2,299,832		$	2,158,728		Revenues	$	2,304,049		$	2,299,832
Revenues increase from prior year	6.5		%	13.6		%	Revenues increase from prior year	0.2		%	6.5		%
Gross profit							Gross profit	$	341,073		$	333,061
Gross profit as a percentage of revenues							Gross profit as a percentage of revenues	14.8		%	14.5		%
Operating income	$	105,995		$	102,310		Operating income	$	117,004		$	105,995
Operating income as a percentage of revenues	4.6		%	4.7		%	Operating income as a percentage of revenues	5.1		%	4.6		%
Net income	$	75,665		$	72,410
Net income attributable to EMCOR Group, Inc.							Net income attributable to EMCOR Group, Inc.	$	84,774		$	75,665
Diluted earnings per common share	$	1.35		$	1.28		Diluted earnings per common share	$	1.54		$	1.35

The results for the three months ended March 31, ~~2020~~2021 set new company records for a first quarter in terms of revenues, operating income, operating margin, net income, and diluted earnings per common share.

Revenues of $2.30 billion for the first quarter of ~~2020 increased by 6.5% from $2.16 billion~~2021 remained relatively consistent with revenues for the ~~three months ended March 31, 2019 to $2.30 billion for the three months ended March 31,~~first quarter of 2020. ~~Such increase~~As described in ~~revenues was attributable to~~further detail below, revenue growth within ~~all of our reportable segments, except for~~ our United States ~~electrical~~mechanical construction and facilities services segment, ~~which experienced~~our United States building services segment, and our United Kingdom building services segment was largely offset by a ~~slight decrease in revenues period over period.~~

revenue decline within our United States industrial services segment.

Operating income for the three months ended March 31, ~~2020~~2021 was $117.0 million, or 5.1% of ~~$106.0 million increased by $3.7 million~~revenues, compared to operating income of ~~$102.3~~$106.0 million, or 4.6% of revenues, for the three months ended March 31, ~~2019. Operating margin (operating income as a percentage of revenues) for~~2020. As described in further detail below, the ~~first quarter of 2020 was 4.6% compared to 4.7% for the first quarter of 2019. The overall~~ increase in both operating income and operating margin was ~~a result of~~primarily attributable to improved operating performance ~~from all of~~within our ~~reportable segments, except for~~United States mechanical construction and facilities services segment, our United States building services segment, and our United Kingdom building services segment. Such improved performance was partially offset by reduced profitability within our United States industrial services segment, which ~~experienced both~~incurred an operating loss during the current year period, as a ~~decline in operating income~~result of continued adverse market conditions impacting the oil and ~~operating margin when compared to~~gas industry and the ~~prior year.~~demand for the service offerings of that segment.

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Impact of Acquisitions

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 expenses, and operating income) from companies acquired. The amounts discussed reflect the acquired companies’ operating results in the current reported period only for the time period these entities were not owned by EMCOR in the comparable prior reported period.

~~In January~~During the first quarter of 2021, we acquired two companies. One company, the results of operations of which were de minimis, provides mechanical services within the Southern region of the United States and has been included in our United States mechanical construction and facilities services segment. The other company provides electrical construction services for a broad array of customers in the Midwestern region of the United States, and the results of its operations have been included in our United States electrical construction and facilities services segment.

During calendar year 2020, we acquired three companies, including: (a) a company ~~for an immaterial amount. This 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 ~~its~~(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.

~~During calendar year 2019, we completed~~For 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. In addition to BKI, during 2019, we acquired: (a) a company which provides electrical contracting services in central Iowa, the results of operations of which have been included within our United States electrical construction and facilities services segment, (b) a company which provides mechanical contracting services in south-central and eastern Texas, the results of operations of which have been included within our United States mechanical construction and facilities services segment, and (c) fourthree months ended March 31, 2021, companies included within our United States building services segment, consisting of: (i) a company which provides mobile mechanical services in the Southern region of the United States and (ii) three companies, the results of operations of which were de minimis, which bolster our presence in geographies where we have existing operations and provide either mobile mechanical services or building automation and controls solutions.

~~Companies~~ acquired in ~~2020~~2021 and ~~2019~~2020 generated incremental revenues of ~~$82.5~~approximately $29.1 million and incremental operating income of ~~$3.6~~approximately $0.9 million, inclusive of ~~$4.1~~approximately $2.1 million of amortization expense associated with identifiable intangible ~~assets, for the three months ended March 31, 2020.~~assets.

Results of Operations

Revenues

The following table presents our operating segment revenues from unrelated entities and their respective percentages of total revenues (in thousands, except for percentages):


	For the three months ended March 31,									For the three months ended March 31,
	2020		% of Total		2019		% of Total			2021		% of Total		2020		% of Total
Revenues:									Revenues:
United States electrical construction and facilities services	$	525,229	23	%	$	528,070	24	%	United States electrical construction and facilities services	$	456,168	20	%	$	461,803	20	%
United States mechanical construction and facilities services	834,112		36	%	752,409		35	%	United States mechanical construction and facilities services	903,925		39	%	834,112		36	%
United States building services	518,083		23	%	512,079		24	%	United States building services	581,839		25	%	527,611		23	%
United States industrial services	310,031		13	%	258,645		12	%	United States industrial services	235,382		10	%	363,929		16	%
Total United States operations	2,187,455		95	%	2,051,203		95	%	Total United States operations	2,177,314		94	%	2,187,455		95	%
United Kingdom building services	112,377		5	%	107,525		5	%	United Kingdom building services	126,735		6	%	112,377		5	%
Total worldwide operations	$	2,299,832	100	%	$	2,158,728	100	%
Total operations									Total operations	$	2,304,049	100	%	$	2,299,832	100	%

Table of March 31, 2020 and December 31, 2019, the balance of the 2020 Term Loan and the 2016 Term Loan was $300.0 million and $254.4 million, respectively. As of March 31, 2020 and December 31, 2019, we had approximately $79.0 million and $109.0 million of letters of credit outstanding, respectively. There were $200.0 million in borrowings outstanding under the 2020 Revolving Credit Facility as of March 31, 2020, and there were $50.0 million in borrowings outstanding under the 2016 Revolving Credit Facility as of December 31, 2019.Contents

Share Repurchase Program and Dividends

In September 2011, our Board of Directors (the “Board”) authorized a share repurchase program allowing us to begin repurchasing shares of our outstanding common stock. Subsequently, the Board has from time to time increased the amount of our common stock that we may repurchase under such program. Since the inception of the repurchase program, the Board has authorized us to repurchase up to $1.15 billion of our outstanding common stock. During the ~~first quarter of 2020,~~three months ended March 31, 2021, we repurchased approximately ~~1.5~~0.1 million shares of our common stock for approximately ~~$99.0~~$12.9 million. Since the inception of the repurchase program through March 31, ~~2020,~~2021, we have repurchased approximately ~~17.4~~17.7 million shares of our common stock for approximately ~~$890.5~~$917.0 million. As of March 31, ~~2020,~~2021, there remained authorization for us to repurchase approximately ~~$259.5~~$233.0 million of our shares. The repurchase program has no expiration date, does not obligate the Company to acquire any particular amount of common stock, and may be suspended, recommenced, or discontinued at any time or from time to time without prior notice. We may repurchase our shares from time to time to the extent permitted by securities laws and other legal requirements, including provisions in our 2020 Credit Agreement placing limitations on such repurchases. The repurchase program has been and will be funded from our operations.

We have paid quarterly dividends since October 25, 2011. We currently pay a regular quarterly dividend of ~~$0.08~~$0.13 per share. Our 2020 Credit Agreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of such agreement currently materially limit our ability to pay a quarterly dividend of ~~$0.08~~$0.13 per share for the foreseeable future. The payment of dividends has been and will be funded from our operations.

Off-Balance Sheet Arrangements and Other Commitments

The terms of our construction contracts frequently require that we obtain from surety companies (“Surety Companies”), and provide to our customers, payment and performance bonds (“Surety Bonds”) as a condition to the award of such contracts. Surety Bonds are issued in return for premiums, which vary depending on the size and type of the bond, and secure our payment and performance obligations under such contracts. We have agreed to indemnify the Surety Companies for amounts, if any, paid by them in respect of Surety Bonds issued on our behalf. Public sector contracts require Surety Bonds more frequently than private sector contracts and, accordingly, our bonding requirements typically increase as the amount of our public sector work increases. ~~In addition, at the request of labor unions representing certain of our employees, Surety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for such employees.~~ As of March 31, ~~2020,~~2021, based on the percentage-of-completion of our projects covered by Surety Bonds, our aggregate estimated exposure, assuming defaults on all our then existing contractual obligations, was approximately $1.3 billion, which represents approximately ~~30%~~28% of our total remaining performance obligations. In addition, Surety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for certain of our employees, at the request of labor unions representing such employees, or as collateral for certain insurance obligations. As of March 31, 2021, we satisfied approximately $37.5 million of the collateral requirements of our insurance programs by utilizing Surety Bonds. We are not aware of any losses in connection with Surety Bonds ~~which~~that have been posted on our behalf, and we do not expect to incur significant losses in the foreseeable future.

From time to time, we discuss with our current and other Surety Bond providers the amounts of Surety Bonds that may be available to us based on our financial strength and the absence of any default by us on any Surety Bond issued on our behalf and believe those amounts are currently adequate for our needs. However, if we experience changes in our bonding relationships or if there are adverse changes in the surety industry, we may (a) seek to satisfy certain customer requests for Surety Bonds by posting other forms of collateral in lieu of Surety Bonds, such as letters of credit, parent company guarantees, or cash, in order to convince customers to forego the requirement for Surety Bonds, (b) increase our activities in our business segments that rarely require Surety Bonds, such as our building and industrial services segments, and/or (c) refrain from bidding for certain projects that require Surety Bonds. There can be no assurance that we would be able to effectuate alternatives to providing Surety Bonds to our customers or to obtain, on favorable terms, sufficient additional work that does not require Surety Bonds. Accordingly, ~~if we were to experience~~ a reduction in the availability of Surety Bonds we could ~~experience~~have a material adverse effect on our financial position, results of operations, and/or cash flows.

In the ordinary course of business, we, at times, guarantee obligations of our subsidiaries under certain contracts. Generally, we are liable under such an arrangement only if our subsidiary fails to perform its obligations under the contract. Historically, we have not incurred any substantial liabilities as a consequence of these guarantees.

We do not have any other material financial guarantees or off-balance sheet arrangements other than those disclosed herein.

~~Contractual Obligations~~

~~The following is a summary of material contractual obligations and other commercial commitments (in millions):~~

Payments Due by Period
Contractual Obligations Total
Less
than
1 year

1-3
years

3-5
years

More than
5 years
Revolving credit facility (including interest at 1.87%) ⁽¹⁾
$ 218.7
$ 3.8
$ 7.6
$ 207.3
$ —
Term loan (including interest at 1.99%) ⁽¹⁾
327.1
13.5
41.3
272.3
—
Finance leases 9.9
4.1
4.6
1.1
0.1
Operating leases 288.0
61.9
90.9
58.8
76.4
Open purchase obligations ⁽²⁾
1,250.8
1,094.0
156.1
0.7
—
Other long-term obligations, including current portion ⁽³⁾
396.5
66.9
320.4
9.2
—
Total Contractual Obligations $ 2,491.0
$ 1,244.2
$ 620.9
$ 549.4
$ 76.5

Amount of Commitment Expiration by Period
Other Commercial Commitments
Total
Committed

Less
than 1
year

1-3
years

3-5
years

More than
5 years
Letters of credit $ 79.0
$ 79.0
$ —
$ —
$ —

~~_________~~

~~(1)~~

On March 2, 2020, we entered into a $1.3 billion revolving credit facility (the “2020 Revolving Credit Facility”) and a $300.0 million term loan (the “2020 Term Loan”) (collectively referred to as the “2020 Credit Agreement”). As of March 31, 2020, the amount outstanding under the 2020 Term Loan was $300.0 million, and there were borrowings outstanding of $200.0 million under the 2020 Revolving Credit Facility.


~~(2)~~	Represents open purchase orders for material and subcontracting costs related to construction and services contracts. These purchase orders are not reflected in EMCOR’s Consolidated Balance Sheets and should not impact future cash flows as amounts should be recovered through customer billings.

~~(3)~~

Primarily represents insurance related liabilities, and liabilities for deferred income taxes, incentive compensation and deferred compensation, classified as other long-term liabilities in the Consolidated Balance Sheets. Cash payments for insurance and deferred compensation related liabilities may be payable beyond three years, however, it is not practical to estimate these payments; therefore, these liabilities are reflected in the 1-3 years payment period. We provide funding to our post retirement plans based on at least the minimum funding required by applicable regulations. In determining the minimum required funding, we utilize current actuarial assumptions and exchange rates to forecast amounts that may be payable for up to five years in the future. In our judgment, minimum funding estimates beyond a five year time horizon cannot be reliably estimated and, therefore, have not been included in the table.

Legal Proceedings

We are involved in several legal proceedings in which damages and claims have been asserted against us. While litigation is subject to many uncertainties and the outcome of litigation is not predictable with assurance, we do not believe that any such matters will have a material adverse effect on our financial position, results of operations, or liquidity.

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Certain Insurance Matters

As of March 31, ~~2020~~2021 and December 31, ~~2019~~,2020, we utilized approximately ~~$78.9~~$71.2 million of letters of credit obtained under our 2020 Revolving Credit Facility ~~and $108.9 million of letters of credit obtained under our 2016 Revolving Credit Facility, respectively,~~ as collateral for ~~our~~ insurance obligations. As of March 31, 2021 and December 31, 2020, we satisfied an additional $37.5 million of these collateral requirements by utilizing Surety Bonds.

New Accounting Pronouncements

We review new accounting standards to determine the expected ~~financial~~ impact, if any, that the adoption of such standards will ~~have.~~have on our financial position and/or results of operations. See Note 2 - New Accounting Pronouncements of the notes to consolidated financial statements included in Item 1. Financial Statements for further information regarding new accounting standards, including the anticipated dates of adoption and the effects on our consolidated financial position, results of operations, or liquidity.

Application of Critical Accounting Policies

Our consolidated financial statements are based on the application of significant accounting policies, which require management to make ~~significant~~ estimates and assumptions. Our significant accounting policies are described in Note 2 –- Summary of Significant Accounting Policies of the notes to consolidated financial statements included in Item 8 of our annual report on Form 10-K for the year ended December 31, ~~2019.~~2020. We believe that some of the more ~~critical judgment~~subjective areas in the application of accounting policies that affect our financial condition and results of operations are the impact of changes in the estimates and judgments pertaining to: (a) revenue recognition from contracts with customers; (b) ~~collectibility~~collectability or valuation of accounts ~~receivable;~~receivable and the associated allowance for credit losses; (c) insurance liabilities; (d) income taxes; and (e) goodwill, ~~and~~ identifiable intangible assets, and other long-lived assets.

Revenue Recognition from Contracts with Customers

We believe our most critical accounting policy is revenue ~~recognition in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). In accordance with ASC 606, the~~recognition. The Company recognizes revenue by applying the following five step model: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to performance obligations in the contract, and (5) recognize revenue as performance obligations are satisfied.

The Company recognizes revenue at the time the related performance obligation is satisfied by transferring a promised good or service to its customers. A good or service is considered to be transferred when the customer obtains control. The Company can transfer control of a good or service and satisfy its performance obligations either over time or at a point in time. The Company transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over time if one of the following three criteria are met: (a) the customer simultaneously receives and consumes the benefits provided by the Company’s performance as we perform, (b) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (c) the Company’s performance does not create an asset with an alternative use to us, and we have an enforceable right to payment for performance completed to date.

For our performance obligations satisfied over time, we recognize revenue by measuring the progress toward complete satisfaction of that performance obligation. The selection of the method to measure progress towards completion can be either an input method or an output method and requires judgment based on the nature of the goods or services to be provided.

For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For our unit price construction contracts, progress towards complete satisfaction is measured through an output method, such as the amount of units produced or delivered, when our performance does not produce significant amounts of work in process or finished goods prior to complete satisfaction of such performance obligations.

For our services contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly, and the customer receives and consumes the benefits of our performance throughout the contract term.

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The timing of revenue recognition for the manufacturing of new build heat exchangers within our United States industrial services segment depends on the payment terms of the contract, as our performance does not create an asset with an alternative use to us. For those contracts for which we have a right to payment for performance completed to date at all times throughout our performance, inclusive of a cancellation, we recognize revenue over time. For these performance obligations, we use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. However, for those contracts for which we do not have a right, at all times, to payment for performance completed to date, we recognize revenue at the point in time when control is transferred to the customer. For bill-and-hold arrangements, revenue is recognized when the customer obtains control of the heat exchanger, which may be prior to shipping if certain recognition criteria are met.

For certain of our revenue streams, such as call-out repair and service work, outage services, refinery turnarounds, and specialty welding services that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date.

Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, there were no changes in total estimated costs that had a significant impact on our operating results. In addition, there were no significant losses recognized during the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our ~~long-term~~ construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. In addition, many of our time and materials arrangements, as well as our contracts to perform turnaround services within the United States industrial services segment, are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded as revenue is recognized in advance of billings. Also included in contract assets are amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders or modifications in dispute or unapproved as to scope and/or price, or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the Consolidated Balance Sheets.

Contract liabilities from our ~~long-term~~ construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and are recorded as either current or long-term, depending upon when we expect to recognize such revenue. The long-term portion of contract liabilities is included in “Other long-term obligations” in the Consolidated Balance Sheets.

See Note 3 - Revenue from Contracts with Customers of the notes to consolidated financial statements included in Item 1. Financial Statements for further disclosure regarding revenue recognition.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recognized in the period we deliver goods or provide services to our customers or when our right to consideration is unconditional. WeThe Company maintains an allowance for credit losses to reduce outstanding receivables to their net realizable value. A considerable amount of judgment is required when determining expected credit losses. Estimates of such losses are ~~required to estimate the collectibility of accounts receivable. Specific accounts receivable are evaluated~~recorded when we believe a customer, or group of customers, may not be able to meet ~~its~~their financial obligations due to ~~the~~ deterioration ~~of its~~in financial condition or ~~its~~ credit ~~ratings. In addition, a considerable amount of judgment is required in assessing the likelihood of realization of receivables.~~rating. Relevant ~~assessment~~ factors include ~~the creditworthiness of the customer,~~ our prior collection history with ~~the customer,~~our customers, the related aging of past due balances, projections of credit losses based on historical trends in credit quality indicators or past events, and forecasts of future economic conditions. In addition to monitoring delinquent accounts, management reviews the credit quality of its receivables by, among other things, obtaining credit ratings of significant customers, assessing economic and market conditions, and evaluating material changes to a customer’s business, cash flows, and financial condition.

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At March 31, ~~2020~~2021 and December 31, ~~2019~~,2020, our accounts receivable of ~~$2,055.5~~$2,037.5 million and ~~$2,030.8~~$1,922.1 million,, respectively, were recorded net of allowances for credit losses of ~~$20.0~~$18.1 million and ~~$14.5~~$18.0 million,, respectively. Our allowance for credit losses increased based on our evaluation of forecasts of future economic conditions and the expected impact on customer collections, in accordance with Accounting Standards Codification Topic 326, “Financial Instruments - Credit Losses,” as described in Note 2 - New Accounting Pronouncements of the notes to consolidated financial statements included in Item 1. Financial Statements. Allowances for credit losses are based on the best facts available and are ~~re-evaluated~~reassessed and adjusted on a regular basis as additional information is received. ~~Negative macroeconomic trends, including the impact of COVID-19, could result in an increase in our credit losses if we experience delays in the payment of outstanding receivables~~Should anticipated collections fail to materialize, or if future economic conditions ~~differ from~~compare unfavorably to our ~~forecasts.~~forecasts, we could experience an increase in our allowances for credit losses. The provision for credit losses amounted to approximately $0.5 million and $2.6 million for the three months ended March 31, 2021 and 2020, respectively.

Insurance Liabilities

We have loss payment deductibles for certain workers’ compensation, automobile liability, general liability, and property claims, have self-insured retentions for certain other casualty claims, and are self-insured for employee-related healthcare claims. In addition, we maintain a wholly-owned captive insurance subsidiary to manage certain of our insurance liabilities. Losses are recorded based upon estimates of our liability for claims incurred and for claims incurred but not reported. The liabilities are derived from known facts, historical trends, and industry averages utilizing the assistance of an independent third-party actuary to determine the best estimate for the majority of these obligations. We believe the liabilities recognized on the Consolidated Balance Sheets for these obligations are adequate. However, such obligations are difficult to assess and estimate due to numerous factors, including severity of injury, determination of liability in proportion to other parties, timely reporting of occurrences, and effectiveness of safety and risk management programs. Therefore, if our actual experience differs from the assumptions and estimates used for recording the

liabilities, adjustments may be required and will be recorded in the period that the experience becomes known. Our estimated net insurance liabilities for workers’ compensation, automobile liability, general liability, and property claims increased by ~~$2.7~~$0.7 million at March 31, ~~2020~~2021 compared to December 31, ~~2019, partially as a result of greater potential exposures, including the impact of acquired companies.~~2020. If our estimated insurance liabilities for workers’ compensation, automobile liability, general liability, and property claims were to increase by 10%, it would have resulted in ~~$17.2~~$17.3 million of additional expense for the three months ended March 31, ~~2020.~~2021.

Income Taxes

~~We had net deferred~~Deferred income tax assets and liabilities at ~~March 31, 2020~~ ~~and~~ ~~December 31, 2019~~are recognized for the expected future tax consequences of ~~$75.8 million and $71.7 million, respectively, primarily resulting from~~temporary differences between the ~~carrying value~~financial statement and income tax ~~basis~~bases of ~~certain identifiable intangible~~ assets ~~goodwill,~~ and ~~depreciable fixed assets, which will impact our taxable income in future periods. Included within these net deferred income tax~~ liabilities ~~are $169.9 million and $176.2 million of deferred income tax assets~~ as of March 31, 2020 and December 31, 2019, respectively. A valuation allowance is required when it is more likely than not that all or a portion of a deferred income tax asset will not be realized. As of ~~March 31, 2020~~ ~~and~~ ~~December 31, 2019, the total valuation allowance on deferred income tax assets, primarily related to state~~well as for net operating loss ~~carryforwards, was approximately $3.5 million.~~and tax credit carryforwards. Deferred income taxes are valued using enacted tax rates expected to be in effect when income taxes are paid or recovered, with the effect of a change in tax laws or rates recognized in the statement of operations in the period in which such change is enacted. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Deferred income taxes are recorded net of a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset will not be realized. In making such determination, we consider all available evidence, including projections of future taxable income, tax-planning strategies, and recent results of operations.

At March 31, 2021 and December 31, 2020, we had net deferred income tax liabilities of $32.7 million and $29.4 million, respectively, primarily resulting from differences between the carrying value and income tax bases of certain identifiable intangible assets, goodwill, and depreciable fixed assets. Included within these net deferred income tax liabilities are $216.8 million and $217.1 million of deferred income tax assets as of March 31, 2021 and December 31, 2020, respectively. The total valuation allowance on deferred income tax assets, primarily related to state net operating loss carryforwards, was approximately $3.9 million as of both March 31, 2021 and December 31, 2020. Based on our taxable income, which has generally exceeded the amount of our net deferred income tax asset balance, as well as current projections of future taxable income, we have determined that it is more likely than not that ~~the~~our net deferred income tax assets will be realized. However, revisions to our forecasts or declining macroeconomic conditions could result in changes to our assessment of the realization of these deferred income tax assets.

Goodwill, ~~and~~ Identifiable Intangible Assets, and Other Long-Lived Assets

Goodwill

As of March 31, 2021 and December 31, 2020,, we had ~~$1,064.9~~goodwill of $862.3 million and ~~$597.9~~$851.8 million,, respectively, ~~of goodwill and net identifiable intangible assets (primarily consisting of our contract backlog, developed technology/vendor network, customer relationships, and trade names)~~ arising out of the acquisition of ~~companies. As~~businesses. Goodwill is not amortized but instead allocated to its respective reporting unit and evaluated for impairment annually, or more frequently if events or circumstances indicate that the carrying amount of ~~December 31, 2019~~, goodwill ~~and net identifiable intangible assets were~~ ~~$1,063.9 million~~ ~~and~~ ~~$611.4 million, respectively.~~may be impaired. We have determined that our reporting units are consistent with the reportable segments identified in Note 14 - Segment Information of the notes to consolidated financial statements. As of March 31, ~~2020,~~2021, approximately ~~13.4%~~16.5% of our goodwill related to our United States electrical construction and facilities services segment, approximately ~~28.1%~~35.1% related to our United States mechanical construction and facilities services segment, approximately ~~27.2%~~35.2% related to our United States building services segment, and approximately ~~31.3%~~13.2% related to our United States industrial services segment. ~~The change to goodwill since December 31, 2019 was the result~~

Table of an acquisition completed in 2020. Accounting Standards Codification Topic 350, “Intangibles – Goodwill and Other” (“ASC 350”) requires that goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, but instead be tested at least annually for impairment (which we test each October 1, absentContents

Absent any earlier identified impairment ~~indicators), and~~indicators, we perform our annual goodwill impairment assessment on October 1 each fiscal year. Qualitative indicators that may trigger the need for interim quantitative impairment testing include, among others, a deterioration in macroeconomic conditions, declining financial performance, deterioration in the operational environment, or an expectation of selling or disposing of a portion of a reporting unit. Additionally, an interim impairment test may be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives. The determinationtriggered by a significant change in business climate, a loss of ~~related estimated useful lives for identifiable intangible assets and whether those assets are impaired involves~~a significant judgments based upon short and long-term projections of future performance. These forecasts reflect assumptions regarding the ability to successfully integrate acquired companies, as well as macroeconomic conditions.

~~We test for impairment of our goodwill at the reporting unit level. Our reporting units are consistent with the reportable segments identified~~customer, increased competition, or a sustained decrease in ~~Note 14, “Segment Information,” of the notes to consolidated financial statements.~~share price. In assessing whether our goodwill is impaired, we compare the fair value of the reporting unit to its carrying amount, including goodwill. If the fair value exceeds the carrying amount, no impairment ~~loss~~ is recognized. However, if the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is impaired and an impairment loss in the amount of the excess is recognized and charged to operations. The fair value of each of our reporting units is generally determined using discounted estimated future cash flows; however, in certain circumstances, consideration is given to a market approach whereby fair value is measured based on a multiple of earnings.

As of the date of our ~~latest~~most recent impairment test (October 1, ~~2019)~~2020), the carrying values of our United States electrical construction and facilities services segment, our United States mechanical construction and facilities services segment, our United States building services segment and our United States industrial services segment were approximately $331.0 million, $369.5 million, $546.8 million, and $705.2 million, respectively. The fair values of our United States electrical construction and facilities services segment, our United States mechanical construction and facilities services segment, our United States building services segment, and our United States industrial services segment exceeded their carrying values by approximately ~~$1,321.8~~$946.5 million, ~~$2,011.5~~$1,682.2 million, ~~$922.3~~$715.8 million, and ~~$40.5~~$18.9 million, respectively. No

In completing our annual impairment assessment, we determined the fair value of each of our ~~goodwill~~reporting units using an income approach whereby fair value was ~~recognized during the three months ended March 31, 2020 and 2019.~~

calculated utilizing discounted estimated future cash flows, assuming a risk-adjusted industry weighted average cost of capital. The weighted average cost of capital used in our annual impairment testing ~~for impairment as of October 1, 2019~~ was ~~9.5%~~10.6%, ~~9.1%~~10.4%, and ~~10.5%~~11.6% for our ~~domestic~~United States construction segments, our United States building services segment, and our United States industrial services segment, respectively. These weighted average cost of capital estimates were developed with the assistance of an independent third-party valuation specialist and reflect the overall level of inherent risk within the respective reporting unit and the rate of return a market participant would expect to earn.

Our cash flow projections were derived from our most recent internal forecasts of anticipated revenue growth rates and operating margins, with cash flows beyond the discrete forecast period estimated using a terminal value calculation which incorporated historical and forecasted trends, an estimate of long-term growth rates, and assumptions about the future demand for our services. The perpetual growth rate used for our annual testing was ~~2.7%~~2.0% for all of our ~~domestic segments.~~reporting units.

Due to the inherent uncertainties involved in making estimates, our assumptions may change in future periods. Estimates and assumptions made for purposes of our goodwill impairment testing may prove to be inaccurate predictions of the future, and other factors used in assessing fair value, such as the weighted average cost of capital, are outside the control of management. Unfavorable changes in certain of these key assumptions may affect future testing results. For example, keeping all other assumptions constant, a 50 basis point increase in the weighted average ~~costs~~cost of capital would cause the estimated fair values of our United States electrical construction and facilities services segment, our United States mechanical construction and facilities services segment, our United States building services segment, and our United States industrial services segment to decrease by approximately ~~$108.8~~$63.3 million, ~~$156.7~~$115.9 million, ~~$98.0~~$69.9 million, and ~~$40.3~~$23.2 million, respectively. In addition, keeping all other assumptions constant, a 50 basis point reduction in the perpetual growth rate would cause the estimated fair values of our United States electrical construction and facilities services segment, our United States mechanical construction and facilities services segment, our United States building services segment, and our United States industrial services segment to decrease by approximately ~~$61.4~~$31.0 million, ~~$90.5~~$58.9 million, ~~$55.7~~$33.5 million, and ~~$20.5~~$9.7 million, respectively. Given the amounts by which the fair value exceeds the carrying value for each of our reporting units, other than our United States industrial services segment, the decreases in estimated fair values described above would not have significantly impacted the results of our ~~2019~~ impairment ~~test.~~tests. In the case of our United States industrial services segment, however, such decreases would cause the estimated fair value of such reporting unit to ~~approach~~approximate its carrying value.

~~We also~~No impairment of our goodwill was recognized during the three months ended March 31, 2021 and 2020.

Identifiable Intangible Assets and Other Long-Lived Assets

As of March 31, 2021 and December 31, 2020, net identifiable intangible assets (primarily consisting of our contract backlog, developed technology/vendor network, customer relationships, and subsidiary trade names) arising out of the acquisition of businesses were $580.6 million and $582.9 million, respectively. The determination of related estimated useful lives for identifiable intangible assets and whether those assets are impaired involves significant judgments based upon short- and long-term projections of future performance. These forecasts reflect assumptions regarding anticipated macroeconomic conditions as well as our ability to successfully integrate acquired businesses.

Absent earlier indicators of impairment, we test for ~~the~~ impairment of subsidiary trade names that are not subject to amortization ~~by calculating~~on an annual basis (October 1). In performing this test, we calculate the fair value of each trade name using the “relief from royalty payments” methodology. This approach involves two steps: (a) estimating reasonable royalty rates for each trade name and (b) applying these royalty rates to a net revenue stream and discounting the resulting cash flows to determine fair value. This fair value is then compared with the carrying value of each trade name. If the carrying amount of the trade name

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is greater than the implied fair value of the trade name, an impairment in the amount of the excess is recognized and charged to operations. No impairment of our indefinite-lived trade names was recognized during the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

In addition, we review for ~~the~~ impairment of ~~other~~ identifiable intangible assets that are being amortized as well as other long-lived assets whenever facts and circumstances indicate that their carrying values may not be fully recoverable. This test compares their carrying values to the undiscounted pre-tax cash flows expected to result from the use of the assets. If the assets are impaired, the assets are written down to their fair values, generally determined based on their discounted estimated future cash flows. No impairment of our finite-lived intangible assets or other ~~identifiable intangible~~long-lived assets was recognized during the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

We have certain businesses, particularly within our United States industrial services segment, whose results are highly impacted by the demand for some of our offerings within the industrial and oil and gas markets. Volatility in the price of oil has historically caused some of our refinery customers to curtail or delay maintenance or capital projects. Prolonged volatility in the price of oil may adversely affect some of our refinery customers causing them to defer maintenance and/or capital projects performed by our companies or delay purchases or repairs of heat exchangers that are manufactured and repaired by some of our companies. Future performance of this segment, along with a continued evaluation of the conditions of its end user markets, will be important to ongoing impairment assessments. Should this segment’s actual results suffer a decline or expected future results be revised downward, the risk of goodwill impairment or impairment of other identifiable intangible assets would increase.Other Considerations

~~Our development of the discounted future cash flow projections used in~~As referenced above, impairment testing is based upon assumptions and estimates determined by management from a review of our operating results and business plans as well as forecasts of anticipated growth rates and margins, among other considerations. In addition, estimates of ~~the~~ weighted average ~~cost~~costs of capital ~~for each reporting unit~~ are developed with the assistance of aan independent third-party valuation ~~specialist and certain other factors used in assessing fair value, such as interest rates, are outside the control of management.~~specialist. These assumptions and estimates ~~can~~may change in future periods, especially in consideration of the uncertainty created by the COVID-19 pandemic and ~~how it will~~its continued impact on the broader economy and our results of ~~operations. There can be no assurance that estimates and assumptions made for purposes of~~operations, particularly with respect to our ~~goodwill and identifiable intangible asset impairment testing will prove~~United States industrial services segment. Significant adverse changes to ~~be accurate predictions of the future. If~~external market conditions or our assumptions regarding future business performance including anticipated growth rates and margins are not achieved, or there is a rise in interest rates, we may be required to record goodwill and/or identifiable intangible asset impairment chargesinternal forecasts, if any, could result in future ~~periods.~~

impairment charges. It is not possible at this time to determine if any future impairment charge will result or, if it does, whether such a charge would be ~~material.~~material to our results of operations.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We have not used any derivative financial instruments during the three months ended March 31, ~~2020~~,2021, including trading or speculating on changes in interest rates or commodity prices of materials used in our business.

We are exposed to market risk for changes in interest rates for borrowings under the 2020 Credit Agreement, which provides for a revolving credit facility and a term loan. Borrowings under the 2020 Credit Agreement bear interest at variable rates. As of March 31, ~~2020~~,2021, there were ~~$200.0 million in~~no direct borrowings outstanding under the 2020 Revolving Credit ~~Facility and~~Facility; however, the balance of the 2020 Term Loan was ~~$300.0~~$270.6 million. ~~This~~At the Company’s election, this instrument bears interest at either: (1) a base rate plus a margin of 0.00% to 0.75%, based on certain financial tests, or (2) United States dollar LIBOR ~~(0.87% and 0.99%~~(0.11% at March 31, ~~2020 for our 2020 Revolving Credit Facility and our 2020 Term Loan, respectively)~~2021) plus 1.00% to 1.75%, based on certain financial tests. The base rate is determined by the greater ofof: (a) the prime commercial lending rate announced by Bank of Montreal from time to time (3.25% at March 31, ~~2020)~~2021), (b) the federal funds effective rate, plus ½ of 1.00%, (c) the daily one month LIBOR rate, plus 1.00%, or (d) 0.00%. The interest ~~rates~~rate in effect at March 31, ~~2020~~ ~~were 1.87% and 1.99% for our 2020 Revolving Credit Facility and our 2020 Term Loan, respectively.~~2021 was 1.11%. Fees for letters of credit issued under the 2020 Revolving Credit Facility range from 0.75% to 1.75% of the respective face amounts of outstanding letters of credit, depending on the nature of the letter of credit, and are computed based on certain financial tests. Based on the ~~$500.0~~$270.6 million of borrowings outstanding under the 2020 Credit Agreement, if overall interest rates were to increase by 100 basis points, interest expense, net of income taxes, would increase by approximately ~~$3.7~~$2.0 million in the next twelve months. Conversely, if overall interest rates were to decrease by 100 basis points, interest expense, net of income taxes, would decrease by approximately ~~$3.7~~$2.0 million in the next twelve months. The 2020 Credit Agreement expires on March 2, 2025.

It is expected that a number of banks currently reporting information used to set LIBOR will stop doing so after 2021, which could either cause LIBOR to stop publication or cause LIBOR to no longer be representative of the underlying market. We believe our exposure to market risk associated with the discontinuation of LIBOR is limited as our 2020 Credit Agreement contains provisions which allow for the use of alternate benchmark rates. We are not exposed to any other material contracts that reference LIBOR.

We are exposed to construction market risk and its potential related impact on accounts receivable or contract assets on uncompleted contracts. The amounts recorded may be at risk if our customers’ ability to pay these obligations is negatively impacted by economic conditions. We continually monitor the creditworthiness of our customers and maintain on-going discussions with customers regarding contract status with respect to change orders and billing terms. Therefore, we believe we take appropriate action to manage market and other risks, but there is no assurance that we will be able to reasonably identify all risks with respect to the ~~collectibility~~collectability of these assets. See also the previous discussions of Revenue Recognition from Contracts with Customers and Accounts Receivable and Allowance for Credit Losses under the heading, “Application of Critical Accounting Policies” in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Amounts invested in our foreign operations are translated into U.S. dollars at the exchange rates in effect at the end of the period. The resulting translation adjustments are recorded as accumulated other comprehensive (loss) income, a component of equity, in the Consolidated Balance Sheets. We believe our exposure to the effects that fluctuating foreign currencies may have on our consolidated results of operations is limited because our foreign operations primarily invoice customers and collect obligations in their respective local currencies. Additionally, expenses associated with these transactions are generally contracted and paid for in their same local currencies.

In addition, we are exposed to market risk of fluctuations in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in our construction, building services, and industrial services operations. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of approximately 11,500 vehicles. While we believe we can increase our contract prices to adjust for some price increases in commodities, there can be no assurance that such price increases, if they were to occur, would be recoverable. Additionally, our fixed price contracts do not allow us to adjust our prices and, as a result, increases in material costs could reduce our profitability with respect to projects in progress.

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ITEM 4. CONTROLS AND PROCEDURES.

Based on an evaluation of our disclosure controls and procedures (as required by Rule 13a-15(b) of the Securities Exchange Act of 1934), our Chairman, President, and Chief Executive Officer, Anthony J. Guzzi, and our Executive Vice President and Chief Financial Officer, ~~and Treasurer,~~ Mark A. Pompa, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities ~~Exchanges~~Exchange Act of 1934) are effective as of the end of the period covered by this report.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended March 31, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. – OTHER INFORMATION.

ITEM 1. LEGAL PROCEEDINGS.

We are involved in several legal proceedings in which damages and claims have been asserted against us. We believe that we have a number of valid defenses to such proceedings and claims and intend to vigorously defend ourselves. We do not believe that any such matters will have a material adverse effect on our financial position, results of operations, or liquidity. We record a loss contingency if the potential loss from a proceeding or claim is considered probable and the amount can be reasonably estimated or a range of loss can be determined. We provide disclosure when it is reasonably possible that a loss will be incurred in excess of any recorded provision. Significant judgment is required in these determinations. As additional information becomes available, we reassess prior determinations and may change our estimates. Additional claims may be asserted against us in the future. Litigation is subject to many uncertainties, and the outcome of litigation is not predictable with assurance. It is possible that a litigation matter for which liabilities have not been recorded could be decided unfavorably to us, and that any such unfavorable decision could have a material adverse effect on our financial position, results of operations, or liquidity.

~~ITEM 1A. RISK FACTORS.~~

~~There were no material changes during the first quarter of 2020 to the risk factors identified in the Company’s annual report for 2019 on Form 10-K, except as noted below.~~

~~Public health emergencies, epidemics, or pandemics, including the novel coronavirus, impact our business.~~ The impact of the global spread of COVID-19, and of the responses of governments, businesses, and individuals to combat it, have caused significant volatility, uncertainty, and economic disruption, which has adversely impacted our operations and those of our customers and clients. On March 11, 2020, the World Health Organization declared COVID-19 to be a global pandemic and recommended containment and mitigation measures worldwide. On March 13, 2020, U.S. President Trump announced a National Emergency relating to the pandemic. Government authorities in the U.S. and U.K. have recommended or imposed various social distancing, quarantine, and isolation measures on large portions of the population, which include limitations on travel and mandatory cessation of certain business activities. Both the outbreak and the containment and mitigation measures have a serious adverse impact on the economy, the severity and duration of which are uncertain. It is likely that government stabilization efforts will only partially mitigate the consequences to the economy.

The extent to which the COVID-19 pandemic will impact our business and results of operations is highly uncertain and will be affected by a number of factors. These include the duration and extent of the pandemic; the duration and extent of imposed or recommended containment and mitigation measures; the extent, duration and effective execution of government stabilization and recovery efforts; the impact of the pandemic on economic activity, including on construction projects, our customers’ demand for our services and our vendors’ ability to supply us with raw materials; our ability to effectively operate, including as a result of travel restrictions and mandatory business and facility closures; the ability of our customers to pay us for services rendered; any further closures of our and our customers’ offices and facilities; and any additional project delays or shutdowns. Customers may also slow down decision-making, delay planned work or seek to terminate existing agreements. Any of these events could have a material adverse effect on our business, financial condition, results of operations, and/or stock price.

Additionally, as our employees access our systems remotely, as a result of the COVID-19 pandemic and the associated business or facility closures, the Company may be subject to heightened security risks, including the risks of cyber-attacks. Further, if any of the Company’s key personnel are unable to perform their duties for a period of time, including as a result of illness, the Company’s results of operations could be adversely affected.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table summarizes repurchases of our common stock made by us during the quarter ended March 31, ~~2020~~:2021:


Period	Total Number of Shares Purchased (1) (2)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
January 1, 2021 to January 31, 2021	—	—	—	$245,954,397
February 1, 2021 to February 28, 2021	—	—	—	$245,954,397
March 1, 2021 to March 31, 2021	117,464	109.96	117,464	$233,037,828
Total	117,464	109.96	117,464

Period
Total Number of
Shares Purchased (1)(2)

Average Price
Paid Per Share

Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs

Approximate Dollar Value
of Shares That May Yet be
Purchased Under
the Plans or Programs
January 1, 2020 to
January 31, 2020
— — — $158,506,898
February 1, 2020 to
February 29, 2020
214,500 $78.41 214,500 $141,687,752
March 1, 2020 to
March 31, 2020
1,269,255 $64.79 1,269,255 $259,458,907
Total 1,483,755 $66.75 1,483,755

(1)In September 2011, our Board of Directors (the “Board”) authorized a share repurchase program allowing us to begin repurchasing shares of our outstanding common stock. Subsequently, the Board has from time to time increased the amount of our common stock that we may repurchase under such program. Since the inception of the repurchase program, the Board has authorized us to repurchase up to $1.15 billion of our outstanding common stock. As of March 31, 2021, there remained authorization for us to repurchase approximately $233.0 million of our shares. No shares have been repurchased by us since the program was announced other than pursuant to such program. The repurchase program has no expiration date, does not obligate the Company to acquire any particular amount of common stock, and may be suspended, recommenced, or discontinued at any time or from time to time without prior notice. We may repurchase our shares from time to time to the extent permitted by securities laws and other legal requirements, including provisions in our credit agreement placing limitations on such repurchases.

~~(1)~~

In September 2011, our Board of Directors (the “Board”) authorized a share repurchase program allowing us to begin repurchasing shares of our outstanding common stock. Subsequently, the Board has from time to time increased the amount of our common stock that we may repurchase under such program. Since the inception of the repurchase program, the Board has authorized us to repurchase up to $1.15 billion of our outstanding common stock. As of March 31, 2020, there remained authorization for us to repurchase approximately $259.5 million of our shares. No shares have been repurchased by us since the program was announced other than pursuant to such program. The repurchase program has no expiration date, does not obligate the Company to acquire any particular amount of common stock, and may be suspended, recommenced or discontinued at any time or from time to time without prior notice. We may repurchase our shares from time to time to the extent permitted by securities laws and other legal requirements, including provisions in our credit agreement, placing limitations on such repurchases.


~~(2)~~	~~Excludes 31,748 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.~~

(2)Excludes 38,320 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.

ITEM 4. MINE SAFETY DISCLOSURES.

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank

Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this quarterly report.

Table of Contents

ITEM 6. EXHIBITS.

~~For the list of exhibits, see the Exhibit Index immediately following the signature page hereof, which Exhibit Index is incorporated herein by reference.~~

~~SIGNATURES~~

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~EXHIBIT INDEX

~~Date:~~ ~~April 30, 2020~~

Exhibit
No.

~~EMCOR GROUP, INC.~~

~~(Registrant)~~

Description

BY:

~~/s/ ANTHONY J. GUZZI~~

~~Anthony J. Guzzi~~

~~Chairman, President and Chief Executive Officer~~

~~(Principal Executive Officer)~~

BIncorporated By Reference to or
Filed Herewith, as Indicated BelowY:

~~/s/ MARK A. POMPA~~

~~Mark A. Pompa~~

~~Executive Vice President,~~

~~Chief Financial Officer and Treasurer~~

~~(Principal Financial and Accounting Officer)~~

~~EXHIBIT INDEX~~

~~Exhibit~~

~~No.~~

3(a-1)

~~Description~~

~~Incorporated By Reference to or~~

~~Filed Herewith, as Indicated Below~~

~~2(a)~~

Purchase and Sale Agreement, dated as of June 17, 2013 by and among Texas Turnaround LLC, a Delaware limited liability company, Altair Strickland Group, Inc., a Texas corporation, Rep Holdings LLC, a Texas limited liability company, ASG Key Employee LLC, a Texas limited liability company, Repcon Key Employee LLC, a Texas limited liability company, Gulfstar MBII, Ltd., a Texas limited partnership, The Trustee of the James T. Robinson and Diana J. Robinson 2010 Irrevocable Trust, The Trustee of the Steven Rothbauer 2012 Descendant’s Trust, The Co-Trustees of the Patia Strickland 2012 Descendant’s Trust, The Co-Trustees of the Carter Strickland 2012 Descendant’s Trust, and The Co-Trustees of the Walton 2012 Grandchildren’s Trust (collectively, “Sellers”) and EMCOR Group, Inc.

~~Exhibit 2.1 to EMCOR’s Report on Form 8-K (Date of Report June 17, 2013)~~

~~3(a-1)~~

Restated Certificate of Incorporation of EMCOR filed December 15, 1994

Exhibit 3(a-5) to EMCOR’s Registration Statement on Form 10 as originally filed March 17, 1995 (“Form 10”)

3(a-2)

Amendment dated November 28, 1995 to the Restated Certificate of Incorporation of EMCOR

Exhibit 3(a-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1995 (“1995 Form10-K”)

3(a-3)

Amendment dated February 12, 1998 to the Restated Certificate of Incorporation of EMCOR

Exhibit 3(a-3) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1997 (“1997 Form 10-K”)

3(a-4)

Amendment dated January 27, 2006 to the Restated Certificate of Incorporation of EMCOR

Exhibit 3(a-4) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2005 (“2005 Form 10-K”)

3(a-5)

Amendment dated September 18, 2007 to the Restated Certificate of Incorporation of EMCOR

Exhibit A to EMCOR’s Proxy Statement dated August 17, 2007 for Special Meeting of Stockholders held September 18, 2007

3(b)

Amended and Restated By-Laws and Amendments thereto

Exhibit 3(b) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2016 (“2016 Form 10-K”)

~~4(a)~~

~~Sixth Amended and Restated Credit Agreement dated as of March 2, 2020 by and among EMCOR and a subsidiary and Bank of Montreal, as Agent and the lenders listed on the signature pages thereof~~

~~Filed herewith~~31.1

~~4(b)~~

~~Sixth Amended and Restated Security Agreement dated as of March 2, 2020 among EMCOR, certain of its U.S. subsidiaries, and Bank of Montreal, as Agent~~

~~Filed herewith~~

~~4(c)~~

~~Sixth Amended and Restated Pledge Agreement dated as of March 2, 2020 among EMCOR, certain of its U.S. subsidiaries, and Bank of Montreal, as Agent~~

~~Filed herewith~~

~~4(d)~~

~~Fifth Amended and Restated Guaranty Agreement dated as of March 2, 2020 by certain of EMCOR’s U.S. subsidiaries in favor of Bank of Montreal, as Agent~~

~~Filed herewith~~

~~EXHIBIT INDEX~~


							Three months ended March 31,
	Three months ended March 31,						2021		2020
	2020			2019
Net income	$	75,665		$	72,410
Other comprehensive (loss) income, net of tax:
Net income including noncontrolling interests						Net income including noncontrolling interests	$	84,945	$	75,665
Other comprehensive income (loss), net of tax:						Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(2,984		)	611		Foreign currency translation adjustments	585		(2,984)
Post retirement plans, amortization of actuarial loss included in net income ⁽¹⁾	550			535		Post retirement plans, amortization of actuarial loss included in net income (1)	804		550
Other comprehensive (loss) income	(2,434		)	1,146
Other comprehensive income (loss)						Other comprehensive income (loss)	1,389		(2,434)
Comprehensive income	$	73,231		$	73,556	Comprehensive income	86,334		73,231
Less: Comprehensive income attributable to noncontrolling interests						Less: Comprehensive income attributable to noncontrolling interests	(171)		0
Comprehensive income attributable to EMCOR Group, Inc.						Comprehensive income attributable to EMCOR Group, Inc.	$	86,163	$	73,231


	Three months ended March 31,							Three months ended March 31,
	2020			2019				2021		2020
Cash flows - operating activities:							Cash flows - operating activities:
Net income	$	75,665		$	72,410
Net income including noncontrolling interests							Net income including noncontrolling interests	$	84,945	$	75,665
Adjustments to reconcile net income to net cash used in operating activities:							Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	11,767			10,585			Depreciation and amortization	12,001		11,767
Amortization of identifiable intangible assets	14,747			11,610			Amortization of identifiable intangible assets	14,989		14,747
Provision for (recovery of) credit losses	2,614			(673		)
Provision for credit losses							Provision for credit losses	507		2,614
Deferred income taxes	4,375			2,496			Deferred income taxes	14		4,375
Excess tax benefits from share-based compensation	(157		)	(499		)
Non-cash share-based compensation expense	3,291			3,557			Non-cash share-based compensation expense	3,193		3,291
Other reconciling items	199			467			Other reconciling items	(739)		42
Changes in operating assets and liabilities, excluding the effect of businesses acquired	(191,314		)	(157,388		)	Changes in operating assets and liabilities, excluding the effect of businesses acquired	(203,899)		(191,314)
Net cash used in operating activities	(78,813		)	(57,435		)	Net cash used in operating activities	(88,989)		(78,813)
Cash flows - investing activities:							Cash flows - investing activities:
Payments for acquisitions of businesses, net of cash acquired	(2,582		)	(31,124		)	Payments for acquisitions of businesses, net of cash acquired	(24,326)		(2,582)
Proceeds from sale or disposal of property, plant and equipment	196			1,023			Proceeds from sale or disposal of property, plant and equipment	766		196
Purchase of property, plant and equipment	(12,035		)	(13,113		)
Investments in and advances to unconsolidated entities	—			(794		)
Purchases of property, plant and equipment							Purchases of property, plant and equipment	(8,204)		(12,035)
Net cash used in investing activities	(14,421		)	(44,008		)	Net cash used in investing activities	(31,764)		(14,421)
Cash flows - financing activities:							Cash flows - financing activities:
Proceeds from revolving credit facility	200,000			—			Proceeds from revolving credit facility	0		200,000
Repayments of revolving credit facility	(50,000		)	—			Repayments of revolving credit facility	0		(50,000)
Proceeds from long-term debt	300,000			—			Proceeds from long-term debt	0		300,000
Repayments of long-term debt and debt issuance costs	(257,549		)	(3,800		)	Repayments of long-term debt and debt issuance costs	0		(257,549)
Repayments of finance lease liabilities	(1,277		)	(1,053		)	Repayments of finance lease liabilities	(1,145)		(1,277)
Dividends paid to stockholders	(4,500		)	(4,480		)	Dividends paid to stockholders	(7,121)		(4,500)
Repurchase of common stock	(99,048		)	—
Repurchases of common stock							Repurchases of common stock	(12,917)		(99,048)
Taxes paid related to net share settlements of equity awards	(2,492		)	(3,735		)	Taxes paid related to net share settlements of equity awards	(3,750)		(2,492)
Issuance of common stock under employee stock purchase plan	1,638			1,323
Issuances of common stock under employee stock purchase plan							Issuances of common stock under employee stock purchase plan	1,731		1,638
Payments for contingent consideration arrangements	(653		)	(23		)	Payments for contingent consideration arrangements	(693)		(653)
Distributions to noncontrolling interests	—			(40		)	Distributions to noncontrolling interests	(43)		0
Net cash provided by (used in) financing activities	86,119			(11,808		)
Net cash (used in) provided by financing activities							Net cash (used in) provided by financing activities	(23,938)		86,119
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(4,678		)	1,298			Effect of exchange rate changes on cash, cash equivalents, and restricted cash	886		(4,678)
Decrease in cash, cash equivalents, and restricted cash	(11,793		)	(111,953		)	Decrease in cash, cash equivalents, and restricted cash	(143,805)		(11,793)
Cash, cash equivalents, and restricted cash at beginning of year ⁽¹⁾	359,920			366,214			Cash, cash equivalents, and restricted cash at beginning of year (1)	903,562		359,920
Cash, cash equivalents, and restricted cash at end of period ⁽²⁾	$	348,127		$	254,261		Cash, cash equivalents, and restricted cash at end of period (2)	$	759,757	$	348,127



Balance at December 31, 2019	$	14,466
Cumulative-effect adjustment	3,150
Provision for credit losses	2,614
Amounts written off against the allowance	(237		)
Balance at March 31, 2020	$	19,993


	For the three months ended March 31,											For the three months ended March 31,
	2020			% of Total		2019			% of Total			2021		% of Total		2020		% of Total
United States electrical construction and facilities services:											United States electrical construction and facilities services:
Commercial market sector	$	242,841		46	%	$	269,441		51	%	Commercial market sector	$	244,983	53	%	$	239,846	52	%
Institutional market sector	41,518			8	%	22,345			4	%	Institutional market sector	43,129		9	%	37,393		8	%
Hospitality market sector	5,082			1	%	6,841			1	%	Hospitality market sector	4,664		1	%	5,082		1	%
Manufacturing market sector	120,372			23	%	98,803			19	%	Manufacturing market sector	48,423		11	%	66,843		14	%
Healthcare market sector	20,646			4	%	17,615			3	%	Healthcare market sector	19,414		4	%	19,225		4	%
Transportation market sector	44,180			8	%	58,139			11	%	Transportation market sector	42,031		9	%	44,180		9	%
Water and wastewater market sector	2,329			1	%	6,015			1	%	Water and wastewater market sector	3,651		1	%	2,329		1	%
Short duration projects ⁽¹⁾	32,721			6	%	40,409			8	%	Short duration projects (1)	43,800		10	%	40,270		9	%
Service work	16,296			3	%	9,262			2	%	Service work	7,268		2	%	7,447		2	%
	525,985					528,870						457,363				462,615
Less intersegment revenues	(756		)			(800		)			Less intersegment revenues	(1,195)				(812)
Total segment revenues	$	525,229				$	528,070				Total segment revenues	$	456,168			$	461,803



	For the three months ended March 31,
	2020			% of Total		2019			% of Total
United States mechanical construction and facilities services:
Commercial market sector	$	304,690		36	%	$	281,862		37	%
Institutional market sector	76,997			9	%	61,283			8	%
Hospitality market sector	7,714			1	%	13,648			2	%
Manufacturing market sector	115,582			14	%	98,763			13	%
Healthcare market sector	88,059			10	%	61,374			8	%
Transportation market sector	14,346			2	%	5,734			1	%
Water and wastewater market sector	40,513			5	%	43,211			6	%
Short duration projects ⁽¹⁾	97,202			12	%	99,936			13	%
Service work	90,893			11	%	89,466			12	%
	835,996					755,277
Less intersegment revenues	(1,884		)			(2,868		)
Total segment revenues	$	834,112				$	752,409


~~(1)~~	~~Net of tax of~~ ~~$0.1 million~~ ~~for each of the three months ended~~ ~~March 31, 2020~~ ~~and~~ ~~2019~~. (1)Net of tax of $0.2 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively.


~~(1)~~	~~Includes $1.1 million and $2.3 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of December 31, 2019 and 2018, respectively.~~


~~(2)~~	~~Includes $1.0 million and $2.2 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of March 31, 2020 and 2019, respectively.~~


																								EMCOR Group, Inc. Stockholders
				EMCOR Group, Inc. Stockholders																		Total		Common stock		Capital surplus		Accumulated other comprehensive loss (1)		Retained earnings		Treasury stock		Noncontrolling interests
	Total			Common stock		Capital surplus			Accumulated other comprehensive loss ⁽¹⁾			Retained earnings			Treasury stock			Noncontrolling interests
Balance, December 31, 2018	$	1,741,441		$	601	$	21,103		$	(87,662	)	$	2,060,440		$	(253,937	)	$	896
Net income	72,410			—		—			—			72,410			—			—
Other comprehensive income	1,146			—		—			1,146			—			—			—
Common stock issued under share-based compensation plans	—			1		(1		)	—			—			—			—
Tax withholding for common stock issued under share-based compensation plans	(3,735		)	—		(3,735		)	—			—			—			—
Common stock issued under employee stock purchase plan	1,323			—		1,323			—			—			—			—
Common stock dividends	(4,480		)	—		44			—			(4,524		)	—			—
Distributions to noncontrolling interests	(40		)	—		—			—			—			—			(40		)
Share-based compensation expense	3,557			—		3,557			—			—			—			—
Balance, March 31, 2019	$	1,811,622		$	602	$	22,291		$	(86,516	)	$	2,128,326		$	(253,937	)	$	856
Balance, December 31, 2019	$	2,057,780		$	604	$	32,274		$	(89,288	)	$	2,367,481		$	(253,937	)	$	646		Balance, December 31, 2019	$	2,057,780	$	604	$	32,274	$	(89,288)	$	2,367,481	$	(253,937)	$	646
Net income	75,665			—		—			—			75,665			—			—
Net income including noncontrolling interests																					Net income including noncontrolling interests	75,665		—		—		—		75,665		—		—
Other comprehensive loss	(2,434		)	—		—			(2,434		)	—			—			—			Other comprehensive loss	(2,434)		—		—		(2,434)		—		—		—
Cumulative-effect adjustment ⁽²⁾	(2,307		)	—		—			—			(2,307		)	—			—			Cumulative-effect adjustment (2)	(2,307)		—		—		—		(2,307)		—		—
Common stock issued under share-based compensation plans	1			1		—			—			—			—			—			Common stock issued under share-based compensation plans	1		1		—		—		—		—		—
Tax withholding for common stock issued under share-based compensation plans	(2,492		)	—		(2,492		)	—			—			—			—			Tax withholding for common stock issued under share-based compensation plans	(2,492)		—		(2,492)		—		—		—		—
Common stock issued under employee stock purchase plan	1,638			—		1,638			—			—			—			—			Common stock issued under employee stock purchase plan	1,638		—		1,638		—		—		—		—
Common stock dividends	(4,500		)	—		34			—			(4,534		)	—			—			Common stock dividends	(4,500)		—		34		—		(4,534)		—		—
Repurchase of common stock	(99,048		)	—		—			—			—			(99,048		)	—
Repurchases of common stock																					Repurchases of common stock	(99,048)		—		—		—		—		(99,048)		—
Share-based compensation expense	3,291			—		3,291			—			—			—			—			Share-based compensation expense	3,291		—		3,291		—		—		—		—
Balance, March 31, 2020	$	2,027,594		$	605	$	34,745		$	(91,722	)	$	2,436,305		$	(352,985	)	$	646		Balance, March 31, 2020	$	2,027,594	$	605	$	34,745	$	(91,722)	$	2,436,305	$	(352,985)	$	646

Balance, December 31, 2020																					Balance, December 31, 2020	$	2,053,244	$	606	$	47,464	$	(109,233)	$	2,480,321	$	(366,490)	$	576
Net income including noncontrolling interests																					Net income including noncontrolling interests	84,945		—		—		—		84,774		—		171
Other comprehensive income																					Other comprehensive income	1,389		—		—		1,389		—		—		—
Common stock issued under share-based compensation plans																					Common stock issued under share-based compensation plans	1		1		—		—		—		—		—
Tax withholding for common stock issued under share-based compensation plans																					Tax withholding for common stock issued under share-based compensation plans	(3,750)		—		(3,750)		—		—		—		—
Common stock issued under employee stock purchase plan																					Common stock issued under employee stock purchase plan	1,731		—		1,731		—		—		—		—
Common stock dividends																					Common stock dividends	(7,121)		—		55		—		(7,176)		—		—
Repurchases of common stock																					Repurchases of common stock	(12,917)		—		—		—		—		(12,917)		—
Distributions to noncontrolling interests																					Distributions to noncontrolling interests	(43)		—		—		—		—		—		(43)
Share-based compensation expense																					Share-based compensation expense	3,193		—		3,193		—		—		—		—
Balance, March 31, 2021																					Balance, March 31, 2021	$	2,120,672	$	607	$	48,693	$	(107,844)	$	2,557,919	$	(379,407)	$	704


~~(1)~~	~~Represents cumulative foreign currency translation adjustments and post retirement liability adjustments.~~


~~(2)~~	~~Represents adjustment to retained earnings upon the adoption of Accounting Standards Codification Topic 326.~~


~~(1)~~	~~Represents those projects which generally are completed within three months or less.~~


Balance at December 31, 2020	$	18,031
Provision for credit losses	507
Amounts written off against the allowance, net of recoveries	(475)
Balance at March 31, 2021	$	18,063



	March 31, 2020			December 31, 2019
Contract assets, current	$	195,265		$	177,830
Contract assets, non-current	—			—
Contract liabilities, current	(590,873		)	(623,642		)
Contract liabilities, non-current	(2,051		)	(2,142		)
Net contract liabilities	$	(397,659	)	$	(447,954	)


	March 31, 2021		December 31, 2020
Contract assets, current	$	192,369	$	171,956
Contract assets, non-current	0		0
Contract liabilities, current	(739,572)		(722,252)
Contract liabilities, non-current	(2,314)		(2,283)
Net contract liabilities	$	(549,517)	$	(552,579)



	March 31, 2020		% of Total
Remaining performance obligations:
United States electrical construction and facilities services	$	1,032,611	23	%
United States mechanical construction and facilities services	2,601,659		59	%
United States building services	545,803		12	%
United States industrial services	109,192		3	%
Total United States operations	4,289,265		97	%
United Kingdom building services	134,634		3	%
Total worldwide operations	$	4,423,899	100	%



	Within one year		Greater than one year
Remaining performance obligations:
United States electrical construction and facilities services	$	842,643	$	189,968
United States mechanical construction and facilities services	1,996,744		604,915
United States building services	525,161		20,642
United States industrial services	109,192		—
Total United States operations	3,473,740		815,525
United Kingdom building services	99,059		35,575
Total worldwide operations	$	3,572,799	$	851,100


	March 31, 2021		December 31, 2020
Raw materials and construction materials	$	37,088	$	42,240
Work in process	11,124		11,098
Inventories	$	48,212	$	53,338



	March 31, 2020		December 31, 2019
Raw materials and construction materials	$	25,749	$	31,365
Work in process	9,638		9,081
Inventories	$	35,387	$	40,446



	March 31, 2020			December 31, 2019
Revolving credit facility	$	200,000		$	50,000
Term loan	300,000			254,431
Unamortized debt issuance costs	(4,720		)	(1,879		)
Finance lease obligations	9,261			9,679
Total debt	504,541			312,231
Less: current maturities	10,360			18,092
Total long-term debt	$	494,181		$	294,139


~~(2)~~	~~Restricted cash is classified as “Prepaid expenses and other” in the Consolidated Balance Sheets. Restricted cash primarily represents cash held in account for use on customer contracts.~~


~~(3)~~	~~Deferred compensation plan assets are classified as “Other assets” in the Consolidated Balance Sheets.~~



	United States electrical construction and facilities services segment			United States building services segment			Corporate administration			Total
Balance at December 31, 2018	$	30		$	176		$	1,424		$	1,630
Charges	—			275			—			275
Payments	(30		)	(381		)	(30		)	(441		)
Balance at March 31, 2019	$	—		$	70		$	1,394		$	1,464
Balance at December 31, 2019	$	445		$	412		$	701		$	1,558
Charges	—			69			—			69
Payments	(89		)	(481		)	—			(570		)
Balance at March 31, 2020	$	356		$	—		$	701		$	1,057



			Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Revolving credit facility (including interest at 1.87%) ⁽¹⁾	$	218.7	$	3.8	$	7.6	$	207.3	$	—
Term loan (including interest at 1.99%) ⁽¹⁾	327.1		13.5		41.3		272.3		—
Finance leases	9.9		4.1		4.6		1.1		0.1
Operating leases	288.0		61.9		90.9		58.8		76.4
Open purchase obligations ⁽²⁾	1,250.8		1,094.0		156.1		0.7		—
Other long-term obligations, including current portion ⁽³⁾	396.5		66.9		320.4		9.2		—
Total Contractual Obligations	$	2,491.0	$	1,244.2	$	620.9	$	549.4	$	76.5



			Amount of Commitment Expiration by Period
Other Commercial Commitments	Total Committed		Less than 1 year		1-3 years		3-5 years		More than 5 years
Letters of credit	$	79.0	$	79.0	$	—	$	—	$	—



Period	Total Number of Shares Purchased (1)(2)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
January 1, 2020 to January 31, 2020	—	—	—	$158,506,898
February 1, 2020 to February 29, 2020	214,500	$78.41	214,500	$141,687,752
March 1, 2020 to March 31, 2020	1,269,255	$64.79	1,269,255	$259,458,907
Total	1,483,755	$66.75	1,483,755



~~Exhibit~~ ~~No.~~	~~Description~~	~~Incorporated By Reference to or~~ ~~Filed Herewith, as Indicated Below~~

~~10(a)~~	~~Form of Severance Agreement (“Severance Agreement”) between EMCOR and each of R. Kevin Matz and Mark A. Pompa~~	~~Exhibit 10.1 to the April 2005 Form 8-K~~
~~10(b)~~	~~Form of Amendment to Severance Agreement between EMCOR and each of R. Kevin Matz and Mark A. Pompa~~	~~Exhibit 10(c) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (“March 2007 Form 10-Q”)~~
~~10(c)~~	~~Letter Agreement dated October 12, 2004 between Anthony Guzzi and EMCOR (the “Guzzi Letter Agreement”)~~	~~Exhibit 10.1 to EMCOR’s Report on Form 8-K (Date of Report October 12, 2004)~~
~~10(d)~~	~~Form of Confidentiality Agreement between Anthony Guzzi and EMCOR~~	~~Exhibit C to the Guzzi Letter Agreement~~
~~10(e)~~	~~Form of Indemnification Agreement between EMCOR and each of its officers and directors~~	~~Exhibit F to the Guzzi Letter Agreement~~
~~10(f-1)~~	~~Severance Agreement (“Guzzi Severance Agreement”) dated October 25, 2004 between Anthony Guzzi and EMCOR~~	~~Exhibit D to the Guzzi Letter Agreement~~
~~10(f-2)~~	~~Amendment to Guzzi Severance Agreement~~	~~Exhibit 10(g-2) to the March 2007 Form 10-Q~~
~~10(g-1)~~	~~Continuity Agreement dated as of June 22, 1998 between R. Kevin Matz and EMCOR (“Matz Continuity Agreement”)~~	~~Exhibit 10(f) to the June 1998 Form 10-Q~~
~~10(g-2)~~	~~Amendment dated as of May 4, 1999 to Matz Continuity Agreement~~	~~Exhibit 10(m) to the June 1999 Form 10-Q~~
~~10(g-3)~~	~~Amendment dated as of January 1, 2002 to Matz Continuity Agreement~~	~~Exhibit 10(o-3) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 (“March 2002 Form 10-Q”)~~
~~10(g-4)~~	~~Amendment dated as of March 1, 2007 to Matz Continuity Agreement~~	~~Exhibit 10(n-4) to the March 2007 Form 10-Q~~
~~10(h-1)~~	~~Continuity Agreement dated as of June 22, 1998 between Mark A. Pompa and EMCOR (“Pompa Continuity Agreement”)~~	~~Exhibit 10(g) to the June 1998 Form 10-Q~~
~~10(h-2)~~	~~Amendment dated as of May 4, 1999 to Pompa Continuity Agreement~~	~~Exhibit 10(n) to the June 1999 Form 10-Q~~
~~10(h-3)~~	~~Amendment dated as of January 1, 2002 to Pompa Continuity Agreement~~	~~Exhibit 10(p-3) to the March 2002 Form 10-Q~~
~~10(h-4)~~	~~Amendment dated as of March 1, 2007 to Pompa Continuity Agreement~~	~~Exhibit 10(o-4) to the March 2007 Form 10-Q~~
~~10(i-1)~~	~~Change of Control Agreement dated as of October 25, 2004 between Anthony Guzzi (“Guzzi”) and EMCOR (“Guzzi Continuity Agreement”)~~	~~Exhibit E to the Guzzi Letter Agreement~~
~~10(i-2)~~	~~Amendment dated as of March 1, 2007 to Guzzi Continuity Agreement~~	~~Exhibit 10(p-2) to the March 2007 Form 10-Q~~
~~10(i-3)~~	~~Amendment to Continuity Agreements and Severance Agreements with Anthony J. Guzzi, R. Kevin Matz and Mark A. Pompa~~	~~Exhibit 10(q) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2008 (“2008 Form 10-K”)~~


			EMCOR GROUP, INC.
			(Registrant)

BY:			/s/ ANTHONY J. GUZZI
			Anthony J. Guzzi
			Chairman, President and Chief Executive Officer (Principal Executive Officer)

BY:			/s/ MARK A. POMPA
			Mark A. Pompa
			Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)