What changed in this filing

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Item 1. Business

2023-02-23 compared with 2022-02-24 · 34 added, 35 removed, 201 unchanged (26% of the section changed)

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In 2022, we had revenues of approximately $11.1 billion.

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

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

Such operating subsidiaries are organized into the following reportable segments:

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• United Kingdom building services

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

Our operating subsidiaries offer comprehensive and diverse solutions on a broad scale and have many long-standing customer relationships.

We provide construction services and building services directly to corporations, municipalities and federal and state governmental entities, owners/developers, and tenants of buildings.

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Financial Statements and Supplementary Data.

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

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

Increasingly, our services are focused on delivering sustainable energy solutions, enhancements in energy efficiency, reductions in waste and emissions, and improvements in the safety and comfort of our customers’ facilities.

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

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

The broad scope of our operations is more particularly described below.

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• Roadway and transit lighting and signaling and fiber optic lines;

• Computerized traffic control systems, and signal and communication equipment for mass transit systems;

• Heating, ventilation, air conditioning, and refrigeration, including both traditional mechanical systems as well as geothermal solutions;

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• Water and wastewater treatment systems;

• Central plant heating and cooling systems;

• Central plant heating and cooling systems, including manufacturing and installing sheet metal air handling systems;

• Crane and rigging services;

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Moreover, the need for substantial environmental controls within a building, due to the heightened need to maintain extensive computer systems at optimal temperatures, and the demand for increased energy efficiency, have continued to expand opportunities for our electrical and mechanical services businesses.

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

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

Our electrical and mechanical construction services generally fall into one of three categories:

(a) large installation projects, with contracts often in the multi-million dollar range, that involve:

(i) the construction of manufacturing facilities, data centers, warehousing and distribution facilities, and commercial buildings, (ii) institutional and public works projects, or (iii) the fit-out of large blocks of space within commercial buildings, (b) large and medium sized capital and maintenance projects for commercial, manufacturing, pharmaceutical, healthcare, oil and gas, industrial, and petrochemical clients and (c) smaller installation projects, of a short duration, typically involving fit-out, renovation, and retrofit work.

We also install and maintain lighting for streets, highways, bridges and tunnels, traffic signals, computerized traffic control systems, and signal and communication systems for mass transit systems in several metropolitan areas.

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

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

Our United States electrical and mechanical construction operations accounted for about 60% of our 2021 total revenues.

(i) the construction of manufacturing facilities, data centers, warehousing and distribution facilities, and commercial buildings, (ii) institutional and public works projects, or (iii) the fit-out of large blocks of space within commercial or mixed-use buildings, (b) large and medium sized capital and maintenance projects for commercial, manufacturing, pharmaceutical, healthcare, oil and gas, and industrial clients, and (c) smaller installation projects, of a short duration, typically involving fit-out, renovation, and retrofit work.

Our United States electrical and mechanical construction operations accounted for approximately 61% of our 2022 total revenues.

Of such revenues, approximately 36% were generated by our electrical construction operations and approximately 64% were generated by our mechanical construction operations.

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

Our largest projects have included those:

Our largest projects typically include those:

(a) for commercial purposes (such as office buildings, data centers, convention centers, sports stadiums, and shopping malls);

(b) for manufacturing and industrial purposes (such as pharmaceutical plants, steel, pulp and paper mills, food processing, automotive and semiconductor manufacturing facilities, power generation (including sustainable energy solutions such as solar and wind), oil and gas refineries, and chemical processing plants);

(d) for institutional purposes (such as educational and correctional facilities and research laboratories);

(e) for healthcare purposes;

(f) for water and wastewater purposes;

and (g) for hospitality purposes (such as resorts, hotels, and gaming facilities).

(b) for high-tech manufacturing purposes (such as semiconductor, biotech, life-sciences, and pharmaceutical facilities);

(c) for traditional manufacturing and industrial purposes (such as steel, pulp and paper mills, food processing and automotive manufacturing facilities, power generation (including sustainable energy solutions such as solar and wind), oil and gas refineries, and chemical processing plants);

(d) for transportation purposes (such as highways, bridges, airports, and transit systems);

(e) for institutional purposes (such as educational and correctional facilities and research laboratories);

(f) for healthcare purposes (such as hospitals, surgical centers, rehabilitation and nursing facilities, and medical offices);

(g) for water and wastewater purposes;

and (h) for hospitality purposes (such as resorts, hotels, and gaming facilities).

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

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

Depending on the size and complexity of these projects, they may span multiple years and typically require significant technical and management skills and the financial strength to obtain performance bonds, which are often a condition to bidding for and winning these projects.

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United States and United Kingdom building services operations:

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

Our building services include:

• Mobile mechanical maintenance and services for mechanical, electrical, plumbing, fire safety, and building automation systems;

• Small modification and retrofit projects;

• Program development, management, and maintenance for energy systems, including LEED Certified solutions to assist our customers in reducing energy consumption;

• Modification and retrofit projects;

• Program development, management, and maintenance for energy systems, including LEED and other sustainable solutions to assist our customers in reducing energy consumption;

• Technical consulting and diagnostic services;

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• Infrastructure and building projects for federal, state, and local governmental agencies.

• Outage services to utilities and industrial plants.

While not all of the above services are performed in both countries, we provide building services throughout the United States and United Kingdom.

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Of our building services revenues for 2022, approximately 85% were generated in the United States and approximately 15% were generated in the United Kingdom.

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

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

These trends have led to outsourcing and privatization programs whereby customers in both the private and public sectors seek to contract out those activities that support, but are not directly associated with, the customer’s core business.

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

We provide building services at a number of prominent buildings, including those that house the Secret Service, the Federal Deposit Insurance Corporation, the Government Accountability Office, and the Department of Health and Human Services, as well as other government facilities, including the NASA Jet Propulsion Laboratory.

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

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

We also provide building services, as a prime contractor or a subcontractor, to U.S.

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The electrical and mechanical construction services industry is highly fragmented and our competition includes thousands of small companies across the United States.

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

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

A majority of our revenues are derived from projects requiring competitive bids;

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While the building services industry is also highly fragmented, with most competitors operating in a specific geographic region, a number of large corporations such as Amentum Services, Inc., IAP Worldwide Services, Inc., Fluor Corporation, J&J Worldwide Services, Cushman & Wakefield plc, CBRE Group, Inc., Jones Lang LaSalle Incorporated, Sodexo, Inc., Aramark, and ABM Industries Incorporated are engaged in this field, as are large original equipment manufacturers such as Carrier Global Corporation and Trane Technologies plc.

In addition, we compete with several regional firms serving all or portions of the markets we target, such as BrightView Holdings, Inc., Kellermeyer Bergensons Services, LLC, SMS Assist, LLC, and Ferandino & Son, Inc.

Our principal competitors in the United Kingdom include CBRE Group, Inc., Bouygues UK Ltd., ISS UK Ltd., and Mitie Group PLC.

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Multiracial, Native American, Native Hawaiian, and Pacific Islander 3 %

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

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

We believe that our relations with our labor unions are generally positive.

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Through our Employee Assistance Program, we offer our employees, and their dependents or household members, access to services and counseling on a variety of personal, professional, legal, and financial matters, at no cost.

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

Key to our attraction and retention of employees is our commitment to our EMCOR Values and our focus on employee safety and diversity, equity, and inclusion.

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We believe that our focus on employee safety and well-being is reflected in our results.

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

This represents our thirteenth consecutive year with a Total Recordable Incident Rate which was less than half the industry average.

In a year in which our employees worked approximately 77.5 million hours, the Company’s Total Recordable Incident Rate in 2022 was approximately 1.2, which was approximately 55% lower than the most recently available industry average of 2.70.

This represents our fourteenth consecutive year with a Total Recordable Incident Rate which was less than half the industry average.

Our position as an industry leader in safety begins with a strong culture of care and vigilance embodied in our EMCOR Values and is supported by a comprehensive suite of training, resources, and analytics.

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We actively seek to increase the diversity of our workforce and to practice our commitment to diversity and inclusion in hiring, development, and training.

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

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

We have also designed and implemented policies and practices to promote a workplace free from discrimination, including our Affirmative Action and Equal Opportunity Policy, the implementation, effectiveness, and reporting requirements of which are overseen by our designated Affirmative Action Officer.

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(a) the EMCOR Manager Certificate Program, which promotes supervisory management skills, (b) our Degree Assistance Program, which provides tuition reimbursement for continuing education, and (c) the resources available to all employees on our online learning platform, the EMCOR Learning Center, which includes thousands of on-demand training courses on a wide range of topics.

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

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

Available Information

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We also have Corporate Governance Guidelines, which include guidelines regarding related party transactions, a Code of Ethics for our Chief Executive Officer and Senior Financial Officers, and a Code of Ethics and Business Conduct for Directors, Officers, and Employees.

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

You may request a copy of the foregoing filings (excluding exhibits), charters, guidelines and codes, and any waivers or amendments to such codes which are applicable to our executive officers, senior financial officers, or directors, at no cost by writing to us at EMCOR Group, Inc., 301 Merritt Seven, Norwalk, CT 06851-1092, Attention:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business