What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-07-25 · 136 added, 112 removed, 771 unchanged (24% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

September 30,

2024 December 31,

8 unchanged sentences

Property, plant, and equipment, net 204,547 179,378

201,168 179,378

Operating lease right-of-use assets 322,912 310,498

34 unchanged sentences

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

2024 2023 2024 2023

3 unchanged sentences

Selling, general and administrative expenses 371,188 308,139 1,051,737 882,684

Impairment loss on long-lived assets — 2,350 — 2,350

Operating income 363,538 234,983 956,299 586,560

Net periodic pension income (cost) 227 ( 284 ) 670 ( 840 )

221 ( 282 ) 443 ( 556 )

Interest income (expense), net 8,312 ( 90 ) 21,959 ( 4,614 )

6,106 ( 2,692 ) 13,647 ( 4,524 )

Income before income taxes 372,077 234,609 978,928 581,106

Income tax provision 101,814 64,863 263,944 159,292

Net income including noncontrolling interests 270,263 169,746 714,984 421,814

Net income attributable to noncontrolling interests — 337 — 337

Net income attributable to EMCOR Group, Inc.

$ 270,263 $ 169,409 $ 714,984 $ 421,477

8 unchanged sentences

Three months ended

June 30, Six months ended

2024 2023 2024 2023

September 30, Nine months ended

September 30,

2024 2023 2024 2023

Net income including noncontrolling interests $ 270,263 $ 169,746 $ 714,984 $ 421,814

Other comprehensive income (loss), net of tax:

4 unchanged sentences

Other comprehensive income (loss) 9,430 ( 4,830 ) 9,425 2,094

727 4,148 ( 5 ) 6,924

Comprehensive income 279,693 164,916 724,409 423,908

Comprehensive income attributable to noncontrolling interests — 337 — 337

Comprehensive income attributable to EMCOR Group, Inc.

$ 279,693 $ 164,579 $ 724,409 $ 423,571

(1) Net of tax of $ 0.2 million for each of the three months ended June 30, 2024 and 2023, and net of tax of $ 0.3 million and $ 0.4 million for the six months ended June 30, 2024 and 2023, respectively.

(1) Net of tax of $ 0.2 million for each of the three months ended September 30, 2024 and 2023, and net of tax of $ 0.5 million for each of the nine months ended September 30, 2024 and 2023.

See Notes to Consolidated Financial Statements.

3 unchanged sentences

(In thousands)(Unaudited)

Six months ended

Nine months ended

September 30,

Cash flows - operating activities:

$ 444,721 $ 252,068

Net income including noncontrolling interests $ 714,984 $ 421,814

Adjustments to reconcile net income to net cash provided by operating activities:

2 unchanged sentences

Provision for credit losses 12,585 5,256

Non-cash expense for impairment of long-lived assets — 2,350

Non-cash share-based compensation expense 16,170 10,703

2 unchanged sentences

Net cash provided by operating activities 938,402 475,897

411,958 214,932

Cash flows - investing activities:

2 unchanged sentences

Purchases of property, plant, and equipment ( 57,244 ) ( 56,306 )

( 39,529 ) ( 36,564 )

Net cash used in investing activities ( 243,687 ) ( 134,032 )

2 unchanged sentences

Repayments of revolving credit facility — ( 100,000 )

— ( 100,000 )

Repayments of long-term debt — ( 142,813 )

Repayments of finance lease liabilities ( 2,144 ) ( 2,138 )

5 unchanged sentences

Net cash used in financing activities ( 455,032 ) ( 276,157 )

( 181,444 ) ( 126,370 )

Effect of exchange rate changes on cash, cash equivalents, and restricted cash 7,377 856

Increase in cash, cash equivalents, and restricted cash 247,060 66,564

18,448 45,984

Cash, cash equivalents, and restricted cash at beginning of year (1)

2 unchanged sentences

$ 1,036,810 $ 523,632

(1) Includes $ 0.6 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of December 31, 2022.

(2) Includes $ 0.9 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of June 30, 2024.

(1) Includes $ 0.6 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheet as of December 31, 2022.

(2) Includes $ 1.3 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheet as of September 30, 2024.

See Notes to Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the three months ended June 30, 2023 and 2024

For the three months ended September 30, 2023 and 2024

(In thousands)(Unaudited)

4 unchanged sentences

stock Noncontrolling

Balance, March 31, 2023

$ 2,066,325 $ 610 $ 75,850 $ ( 90,675 ) $ 3,318,560 $ ( 1,238,722 ) $ 702

140,595 — — — 140,595 — —

Other comprehensive income

Balance, June 30, 2023 $ 2,118,087 $ 611 $ 81,556 $ ( 86,527 ) $ 3,450,553 $ ( 1,328,808 ) $ 702

Net income including noncontrolling interests

169,746 — — — 169,409 — 337

Common stock issued under share-based compensation plans — 1 ( 1 ) — — — —

Other comprehensive loss ( 4,830 ) — — ( 4,830 ) — — —

Tax withholding for common stock issued under share-based compensation plans ( 70 ) — ( 70 ) — — — —

2 unchanged sentences

Repurchases of common stock (2)

24 — — — — 24 —

Share-based compensation expense 3,168 — 3,168 — — — —

Balance, September 30, 2023 $ 2,279,969 $ 611 $ 87,018 $ ( 91,357 ) $ 3,611,442 $ ( 1,328,784 ) $ 1,039

Balance, June 30, 2024 $ 2,745,597 $ 612 $ 92,434 $ ( 85,709 ) $ 4,238,867 $ ( 1,501,644 ) $ 1,037

$ 2,118,087 $ 611 $ 81,556 $ ( 86,527 ) $ 3,450,553 $ ( 1,328,808 ) $ 702

Balance, March 31, 2024

$ 2,615,382 $ 612 $ 87,673 $ ( 86,436 ) $ 4,003,079 $ ( 1,390,583 ) $ 1,037

Net income including noncontrolling interests

270,263 — — — 270,263 — —

Other comprehensive income 9,430 — — 9,430 — — —

727 — — 727 — — —

Tax withholding for common stock issued under share-based compensation plans ( 329 ) — ( 329 ) — — — —

2 unchanged sentences

Share-based compensation expense 4,799 — 4,799 — — — —

Balance, June 30, 2024

$ 2,745,597 $ 612 $ 92,434 $ ( 85,709 ) $ 4,238,867 $ ( 1,501,644 ) $ 1,037

Balance, September 30, 2024 $ 2,759,119 $ 612 $ 96,939 $ ( 76,279 ) $ 4,497,430 $ ( 1,760,620 ) $ 1,037

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

(2) Represents adjustment to estimate of excise tax on net share repurchases.

Estimates of excise tax are subject to change in subsequent quarters, particularly if the amount of our share issuances exceed our share repurchases, thereby reducing the estimated excise tax due for the annual period.

See Notes to Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the six months ended June 30, 2023 and 2024

For the nine months ended September 30, 2023 and 2024

(In thousands)(Unaudited)

5 unchanged sentences

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

$ 1,974,291 $ 609 $ 74,795 $ ( 93,451 ) $ 3,214,281 $ ( 1,222,645 ) $ 702

Net income including noncontrolling interests

421,814 — — — 421,477 — 337

Other comprehensive income 2,094 — — 2,094 — — —

6,924 — — 6,924 — — —

Common stock issued under share-based compensation plans — 2 ( 2 ) — — — —

4 unchanged sentences

Share-based compensation expense 10,703 — 10,703 — — — —

Balance, June 30, 2023

$ 2,118,087 $ 611 $ 81,556 $ ( 86,527 ) $ 3,450,553 $ ( 1,328,808 ) $ 702

Balance, September 30, 2023 $ 2,279,969 $ 611 $ 87,018 $ ( 91,357 ) $ 3,611,442 $ ( 1,328,784 ) $ 1,039

Balance, December 31, 2023 $ 2,470,815 $ 611 $ 91,813 $ ( 85,704 ) $ 3,814,439 $ ( 1,351,381 ) $ 1,037

$ 2,470,815 $ 611 $ 91,813 $ ( 85,704 ) $ 3,814,439 $ ( 1,351,381 ) $ 1,037

Net income including noncontrolling interests

714,984 — — — 714,984 — —

Other comprehensive loss

Other comprehensive income

9,425 — — 9,425 — — —

5 unchanged sentences

Share-based compensation expense 16,170 — 16,170 — — — —

Balance, June 30, 2024

$ 2,745,597 $ 612 $ 92,434 $ ( 85,709 ) $ 4,238,867 $ ( 1,501,644 ) $ 1,037

Balance, September 30, 2024 $ 2,759,119 $ 612 $ 96,939 $ ( 76,279 ) $ 4,497,430 $ ( 1,760,620 ) $ 1,037

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

11 unchanged sentences

In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of those of a normal recurring nature) necessary to present fairly our financial position and the results of our operations.

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024.

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024.

NOTE 2 - New Accounting Pronouncements

97 unchanged sentences

When the current estimate of total costs for a performance obligation indicates 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.

Based on an evaluation of individual projects that were substantially complete in prior periods but had revisions to total estimated cost or anticipated contract value that resulted in an increase to profitability in excess of $ 1.0 million, we recognized revenue during the three and six months ended June 30, 2024 and 2023, as summarized in the following table (in thousands):

Based on an evaluation of individual projects that were substantially complete in prior periods but had revisions to total estimated cost or anticipated contract value that resulted in an increase to profitability in excess of $ 1.0 million, we recognized revenue during the three and nine months ended September 30, 2024 and 2023, as summarized in the following table (in thousands):

For the three months ended

For the six months ended

September 30,

For the nine months ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

NOTE 3 - Revenue from Contracts with Customers (Continued)

During the three months ended June 30, 2024, we recognized $ 12.3 million of gross profit on two contracts, which are currently in process, as a result of favorable developments on certain outstanding claims.

Included in our results for the nine months ended September 30, 2024 was $ 12.3 million of gross profit, recognized in the second quarter of the year, on two contracts, which are currently in process, as a result of favorable developments on certain claims.

Of this amount, $ 8.4 million was reported within our United States electrical construction and facilities services segment and $ 3.9 million was reported within our United States mechanical construction and facilities services segment.

Based on an evaluation of individual projects that had revisions to total estimated costs or anticipated contract value that resulted in a reduction of profitability in excess of $ 1.0 million, our operating results were negatively impacted during the three and six months ended June 30, 2024 and 2023, as summarized in the following table (in thousands):

Based on an evaluation of individual projects that had revisions to total estimated costs or anticipated contract value that resulted in a reduction of profitability in excess of $ 1.0 million, our operating results were negatively impacted during the three and nine months ended September 30, 2024 and 2023, as summarized in the following table (in thousands):

For the three months ended

For the six months ended

September 30,

For the nine months ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

United States building services — — — 2,977

— 1,084 — 1,544

Total impact $ 10,066 $ 10,568 $ 40,621 $ 28,612

2 unchanged sentences

Our contracts are with many different customers in numerous industries.

The following tables provide further disaggregation of our revenues, by categories we use to evaluate our financial performance within each of our reportable segments, for the three and six months ended June 30, 2024 and 2023 (in thousands, except for percentages).

The following tables provide further disaggregation of our revenues, by categories we use to evaluate our financial performance within each of our reportable segments, for the three and nine months ended September 30, 2024 and 2023 (in thousands, except for percentages).

Refer to Note 14 - Segment Information of the notes to consolidated financial statements for additional information on how we disaggregate our revenues by reportable segment.

For the three months ended June 30,

For the three months ended September 30,

Total 2023 % of

20 unchanged sentences

NOTE 3 - Revenue from Contracts with Customers (Continued)

For the three months ended June 30,

For the three months ended September 30,

Total 2023 % of

16 unchanged sentences

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

For the three months ended June 30,

For the three months ended September 30,

Total 2023 % of

4 unchanged sentences

Total segment revenues $ 796,923 $ 817,718

For the three months ended June 30,

For the three months ended September 30,

Total 2023 % of

4 unchanged sentences

Total United States operations $ 3,590,574 $ 3,096,872

For the three months ended June 30,

For the three months ended September 30,

Total 2023 % of

8 unchanged sentences

NOTE 3 - Revenue from Contracts with Customers (Continued)

For the six months ended June 30,

For the nine months ended September 30,

Total 2023 % of

16 unchanged sentences

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

For the six months ended June 30,

For the nine months ended September 30,

Total 2023 % of

20 unchanged sentences

NOTE 3 - Revenue from Contracts with Customers (Continued)

For the six months ended June 30,

For the nine months ended September 30,

Total 2023 % of

4 unchanged sentences

Total segment revenues $ 2,359,191 $ 2,318,105

For the six months ended June 30,

For the nine months ended September 30,

Total 2023 % of

4 unchanged sentences

Total United States operations $ 10,478,493 $ 8,816,009

For the six months ended June 30,

For the nine months ended September 30,

Total 2023 % of

11 unchanged sentences

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.

At June 30, 2024 and December 31, 2023, our allowance for credit losses was $ 33.3 million and $ 22.5 million, respectively.

At September 30, 2024 and December 31, 2023, our allowance for credit losses was $ 32.7 million and $ 22.5 million, respectively.

The increase in our allowance for credit losses was primarily due to a reserve taken in the first quarter of 2024 for a specific customer bankruptcy within the commercial site-based services division of our United States building services segment.

5 unchanged sentences

NOTE 3 - Revenue from Contracts with Customers (Continued)

The change in the allowance for credit losses for the six months ended June 30, 2024 was as follows (in thousands):

The change in the allowance for credit losses for the nine months ended September 30, 2024 was as follows (in thousands):

Balance at December 31, 2023 $ 22,502

1 unchanged sentence

Amounts written off against the allowance, net of recoveries ( 2,385 )

Balance at June 30, 2024

Balance at September 30, 2024 $ 32,702

Contract Assets and Contract Liabilities

10 unchanged sentences

The long-term portion of contract liabilities is included in “Other long-term obligations” in the Consolidated Balance Sheets.

Net contract liabilities in the accompanying Consolidated Balance Sheets consisted of the following amounts as of June 30, 2024 and December 31, 2023 (in thousands):

Net contract liabilities in the accompanying Consolidated Balance Sheets consisted of the following amounts as of September 30, 2024 and December 31, 2023 (in thousands):

September 30,

2024 December 31, 2023

5 unchanged sentences

Contract assets and contract liabilities increased by approximately $ 3.3 million and $ 29.5 million, respectively, as a result of acquisitions made by us in 2024.

Excluding the impact of acquisitions, net contract liabilities increased by approximately $ 136.3 million during the six months ended June 30, 2024, primarily due to an increase in net contract liabilities on our uncompleted construction projects, partially as a result of the timing of invoicing to our customers as we continue to effectively manage our working capital.

Excluding the impact of acquisitions, net contract liabilities increased by approximately $ 233.6 million during the nine months ended September 30, 2024, primarily due to an increase in net contract liabilities on our uncompleted construction projects, partially as a result of the timing of invoicing to our customers as we continue to effectively manage our working capital.

There was no significant impairment of contract assets recognized during the periods presented.

4 unchanged sentences

Transaction Price Allocated to Remaining Unsatisfied Performance Obligations

The following table presents the transaction price allocated to remaining unsatisfied performance obligations (“remaining performance obligations”) for each of our reportable segments and their respective percentages of total remaining performance obligations as of June 30, 2024 (in thousands, except for percentages):

The following table presents the transaction price allocated to remaining unsatisfied performance obligations (“remaining performance obligations”) for each of our reportable segments and their respective percentages of total remaining performance obligations as of September 30, 2024 (in thousands, except for percentages):

September 30,

2024 % of Total

7 unchanged sentences

Total operations $ 9,789,452 100 %

Our remaining performance obligations at June 30, 2024 were approximately $ 9.0 billion.

Our remaining performance obligations at September 30, 2024 were approximately $ 9.79 billion.

Remaining performance obligations increase with awards of new contracts and decrease as we perform work and recognize revenue on existing contracts.

25 unchanged sentences

Acquisitions are accounted for utilizing the acquisition method of accounting and the prices paid for them are allocated to their respective assets and liabilities based upon the estimated fair value of such assets and liabilities at the dates of their respective acquisition by us.

During the first half of 2024, we acquired four companies for upfront consideration of $ 181.8 million, inclusive of our estimates of customary working capital adjustments.

During the first nine months of 2024, we acquired five companies for upfront consideration of $ 192.3 million, inclusive of customary working capital adjustments.

These acquisitions are comprised of:

(a) two companies that have been included within our United States mechanical construction and facilities services segment, including:

(i) a leading plumbing services provider in the Southeast region of the United States and (ii) a full service provider of mechanical construction and maintenance services in Central Texas, (b) a company, that has been included in our United States building services segment, which provides building automation and controls solutions in the Northeast region of the United States, and (c) an instrumentation and electrical contractor, that has been included in our United States industrial services segment, which provides electrical, automation, digital integration, and fabrication services to various energy sector and process equipment customers.

(i) a provider of building automation and controls solutions in the Northeast region of the United States and (ii) a mechanical services contractor in the Western region of the United States, and (c) an instrumentation and electrical contractor, that has been included in our United States industrial services segment, which provides electrical, automation, digital integration, and fabrication services to various energy sector and process equipment customers.

In connection with these acquisitions, we acquired working capital of $ 26.8 million and other net assets of $ 1.2 million, and have preliminarily ascribed $ 45.7 million to goodwill and $ 118.6 million to identifiable intangible assets.

We expect that all of the goodwill and identifiable intangible assets acquired in connection with these 2024 acquisitions will be deductible for tax purposes.

Subsequent to September 30, 2024, we entered into a definitive agreement to acquire an electrical contractor in the Southeast region of the United States for upfront consideration of approximately $ 33.6 million.

This transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.

During calendar year 2023, we acquired eight companies for total consideration of $ 99.6 million.

2 unchanged sentences

(i) three companies that have been included within our United States mechanical construction and facilities services segment, one of which provides mechanical and pipe fabrication services in the Midwestern region of the United States, and two of which add capabilities to our national fire protection services, and (ii) four mechanical services companies in the Western and Midwestern regions of the United States that have been included within our United States building services segment and enhance our presence in geographies where we have existing operations.

In connection with these acquisitions, we acquired working capital of $ 9.1 million and other net liabilities of $ 6.1 million, including certain deferred tax liabilities, and have preliminarily ascribed $ 37.4 million to goodwill and $ 59.2 million to identifiable intangible assets.

In connection with these acquisitions, we acquired working capital of $ 9.1 million and other net liabilities of $ 6.1 million, including certain deferred tax liabilities, and have ascribed $ 37.4 million to goodwill and $ 59.2 million to identifiable intangible assets.

We expect that $ 29.6 million of the goodwill and identifiable intangible assets acquired in connection with these 2023 acquisitions will be deductible for tax purposes.

8 unchanged sentences

Calculation of Basic and Diluted Earnings per Common Share

The following tables summarize our calculation of Basic and Diluted Earnings per Common Share (“EPS”) for the three and six months ended June 30, 2024 and 2023 (in thousands, except share and per share data):

The following tables summarize our calculation of Basic and Diluted Earnings per Common Share (“EPS”) for the three and nine months ended September 30, 2024 and 2023 (in thousands, except share and per share data):

For the three months ended

September 30,

Net income attributable to EMCOR Group, Inc.

$ 270,263 $ 169,409

4 unchanged sentences

Diluted earnings per common share $ 5.80 $ 3.57

For the six months ended

For the nine months ended

September 30,

Net income attributable to EMCOR Group, Inc.

$ 714,984 $ 421,477

4 unchanged sentences

Diluted earnings per common share $ 15.21 $ 8.85

The number of share-based awards excluded from the computation of diluted EPS for the three and six months ended June 30, 2024 because they would be anti-dilutive were 5,200 and 9,399 , respectively.

The number of share-based awards excluded from the computation of diluted EPS for the three and six months ended June 30, 2023 because they would be anti-dilutive were 8,726 and 9,026 , respectively.

There were no anti-dilutive share-based awards for the three months ended September 30, 2024.

The number of share-based awards excluded from the computation of diluted EPS for the nine months ended September 30, 2024 because they would be anti-dilutive were 8,950 .

The number of share-based awards excluded from the computation of diluted EPS for the three and nine months ended September 30, 2023 because they would be anti-dilutive were 400 and 800 , respectively.

NOTE 6 - Inventories

Inventories in the accompanying Consolidated Balance Sheets consisted of the following amounts as of June 30, 2024 and December 31, 2023 (in thousands):

Inventories in the accompanying Consolidated Balance Sheets consisted of the following amounts as of September 30, 2024 and December 31, 2023 (in thousands):

September 30,

2024 December 31,

6 unchanged sentences

NOTE 7 - Debt

Excluding finance lease liabilities of $ 6.7 million at June 30, 2024 and $ 5.3 million at December 31, 2023, we had no outstanding debt as of June 30, 2024 and December 31, 2023.

The current portion of our finance lease liabilities of $ 2.5 million at June 30, 2024 and December 31, 2023 was included in “Other accrued expenses and liabilities” and the non-current portion of our finance lease liabilities of $ 4.2 million and $ 2.8 million at June 30, 2024 and December 31, 2023, respectively, were included in “Other long-term obligations” in the accompanying Consolidated Balance Sheets.

Excluding finance lease liabilities of $ 6.3 million at September 30, 2024 and $ 5.3 million at December 31, 2023, we had no outstanding debt as of September 30, 2024 and December 31, 2023.

The current portion of our finance lease liabilities of $ 2.3 million and $ 2.5 million at September 30, 2024 and December 31, 2023, respectively, was included in “Other accrued expenses and liabilities” and the non-current portion of our finance lease liabilities of $ 4.0 million and $ 2.8 million at September 30, 2024 and December 31, 2023, respectively, were included in “Other long-term obligations” in the accompanying Consolidated Balance Sheets.

Credit Agreement

3 unchanged sentences

We may allocate up to $ 600.0 million of available capacity under the 2023 Revolving Credit Facility to letters of credit for our account or for the account of any of our subsidiaries.

There were no direct borrowings outstanding under the 2023 Revolving Credit Facility as of June 30, 2024 and December 31, 2023.

However, outstanding letters of credit reduce the available capacity under this facility, and as of June 30, 2024 and December 31, 2023, we had $ 75.0 million and $ 116.7 million of letters of credit outstanding, respectively.

There were no direct borrowings outstanding under the 2023 Revolving Credit Facility as of September 30, 2024 and December 31, 2023.

However, outstanding letters of credit reduce the available capacity under this facility, and as of September 30, 2024 and December 31, 2023, we had $ 74.9 million and $ 116.7 million of letters of credit outstanding, respectively.

At the Company’s election, borrowings under the 2023 Revolving Credit Facility bear interest at either:

3 unchanged sentences

A commitment fee is payable on the average daily unused amount of the 2023 Revolving Credit Facility, which ranges from 0.125 % to 0.25 %, depending on the Company’s Leverage Ratio.

The fee was 0.125 % of the unused amount as of June 30, 2024 and December 31, 2023.

The fee was 0.125 % of the unused amount as of September 30, 2024 and December 31, 2023.

Fees for letters of credit issued under the 2023 Revolving Credit Facility range from 0.85 % to 1.875 % of the respective face amounts of outstanding letters of credit, depending on the nature of the letter of credit, and are computed depending on the Company’s Leverage Ratio.

1 unchanged sentence

The 2023 Credit Agreement contains customary 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 June 30, 2024 and December 31, 2023.

We were in compliance with all such covenants as of September 30, 2024 and December 31, 2023.

NOTE 8 - Fair Value Measurements

11 unchanged sentences

Recurring Fair Value Measurements

The following tables summarize the assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2024 and December 31, 2023 (in thousands):

Assets at Fair Value as of June 30, 2024

The following tables summarize the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2024 and December 31, 2023 (in thousands):

Assets at Fair Value as of September 30, 2024

Asset Category Level 1 Level 2 Level 3 Total

4 unchanged sentences

Restricted cash (3)

1,276 — — 1,276

Total $ 1,096,312 $ — $ — $ 1,096,312

1 unchanged sentence

(1) Cash and cash equivalents consist of deposit accounts and money market funds with original maturity dates of three months or less, which are Level 1 assets.

At June 30, 2024, we had $ 564.9 million in money market funds.

At September 30, 2024, we had $ 779.5 million in money market funds.

From time to time, we have cash balances in certain of our domestic bank accounts that exceed federally insured limits.

22 unchanged sentences

We believe that the carrying values of our financial instruments, which include accounts receivable and other financing commitments, approximate their fair values due primarily to their short-term maturities and low risk of counterparty default.

Although there were no outstanding borrowings under our 2023 Credit Agreement as of June 30, 2024 and December 31, 2023, the carrying value of any debt associated with this agreement would approximate its fair value due to the variable rate on such debt.

Although there were no outstanding borrowings under our 2023 Credit Agreement as of September 30, 2024 and December 31, 2023, the carrying value of any debt associated with this agreement would approximate its fair value due to the variable rate on such debt.

EMCOR Group, Inc.

2 unchanged sentences

NOTE 9 - Income Taxes

The following table presents our income tax provision and our income tax rate for the three and six months ended June 30, 2024 and 2023 (in thousands, except percentages):

The following table presents our income tax provision and our income tax rate for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

For the three months ended

For the six months ended

September 30,

For the nine months ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

The difference between the U.S.

statutory tax rate of 21 % and our effective income tax rate for both the three and six months ended June 30, 2024 and 2023 was primarily a result of state and local income taxes and other permanent book-to-tax differences.

The increase in our income tax provision for the three and six months ended June 30, 2024, when compared to the three and six months ended June 30, 2023, was predominantly due to greater income before income taxes.

The decrease in our effective income tax rate for the three and six months ended June 30, 2024, when compared to the three and six months ended June 30, 2023, was attributable to the impact of favorable discrete tax items during the first half of 2024.

As of June 30, 2024 and December 31, 2023, we had no unrecognized income tax benefits.

statutory tax rate of 21 % and our effective income tax rate for both the three and nine months ended September 30, 2024 and 2023 was primarily a result of state and local income taxes and other permanent book-to-tax differences.

The increase in our income tax provision for the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, was predominantly due to greater income before income taxes.

As of September 30, 2024 and December 31, 2023, we had no unrecognized income tax benefits.

We file a consolidated federal income tax return including all of our U.S.

1 unchanged sentence

We additionally file income tax returns with various state, local, and foreign tax agencies.

Our income tax returns are subject to audit by various taxing authorities and are currently under examination for the years 2019 through 2021.

Our income tax returns are subject to audit by various taxing authorities and are currently under examination for the years 2021 and 2022.

NOTE 10 - Common Stock

As of June 30, 2024 and December 31, 2023, there were 46,712,350 and 47,047,265 shares of our common stock outstanding, respectively.

During the three months ended June 30, 2024 and 2023, we issued 12,506 and 42,578 shares of common stock, respectively.

During the six months ended June 30, 2024 and 2023, we issued 80,579 and 114,654 shares of common stock, respectively.

As of September 30, 2024 and December 31, 2023, there were 45,997,428 and 47,047,265 shares of our common stock outstanding, respectively.

During the three months ended September 30, 2024 and 2023, we issued 1,190 and 11,838 shares of common stock, respectively.

During the nine months ended September 30, 2024 and 2023, we issued 81,769 and 126,492 shares of common stock, respectively.

These shares were issued upon either the satisfaction of required conditions under our share-based compensation plans or the purchase of common stock pursuant to our employee stock purchase plan, prior to the discontinuation of such employee stock purchase plan at the end of 2023.

5 unchanged sentences

Since the inception of the repurchase program, the Board has authorized us to repurchase up to $ 2.65 billion of our outstanding common stock.

During the six months ended June 30, 2024, we repurchased approximately 0.4 million shares of our common stock for approximately $ 150.3 million, inclusive of the applicable excise tax.

Since the inception of the repurchase program through June 30, 2024, we have repurchased approximately 26.2 million shares of our common stock for approximately $ 2.04 billion.

As of June 30, 2024, there remained authorization for us to repurchase approximately $ 610.8 million of our shares.

During the nine months ended September 30, 2024, we repurchased approximately 1.1 million shares of our common stock for approximately $ 409.2 million, inclusive of the applicable excise tax.

Since the inception of the repurchase program through September 30, 2024, we have repurchased approximately 26.9 million shares of our common stock for approximately $ 2.30 billion.

As of September 30, 2024, there remained authorization for us to repurchase approximately $ 351.8 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.

14 unchanged sentences

Components of Net Periodic Pension Cost

The components of net periodic pension (income) cost of the UK Plan for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

The components of net periodic pension (income) cost of the UK Plan for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

For the three months ended

For the six months ended

September 30,

For the nine months ended

September 30,

2024 2023 2024 2023

3 unchanged sentences

Net periodic pension (income) cost $ ( 208 ) $ 233 $ ( 614 ) $ 688

$ ( 203 ) $ 231 $ ( 406 ) $ 455

NOTE 12 - Commitments and Contingencies

7 unchanged sentences

We have agreed to indemnify the surety companies for amounts, if any, paid by them in respect of surety bonds issued on our behalf.

As of June 30, 2024, 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 $ 2.1 billion, which represents approximately 23 % of our total remaining performance obligations.

As of September 30, 2024, 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 $ 2.4 billion, which represents approximately 25 % of our total remaining performance obligations.

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.

In addition, surety bonds may be issued as collateral for certain insurance obligations.

As of June 30, 2024, we satisfied approximately $ 48.1 million of the collateral requirements of our insurance programs by utilizing surety bonds.

As of September 30, 2024, we satisfied approximately $ 48.1 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 that have been posted on our behalf, and we do not expect to incur significant losses in the foreseeable future.

14 unchanged sentences

We believe that we have a number of valid defenses to such proceedings and claims and intend to vigorously defend ourselves.

We additionally maintain insurance coverage for certain of these matters, although these policies do not cover all possible claims and certain of the policies are subject to large deductibles and retentions.

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.

We record a loss contingency if we consider the potential loss from a proceeding or claim probable and we are able to reasonably estimate the amount or can reasonably determine a range of loss.

We provide disclosure when we believe a loss in excess of any recorded provision is reasonably possible.

Significant judgment is required in these determinations.

2 unchanged sentences

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.

A litigation matter for which liabilities have not been recorded could be decided unfavorably to us, and any such unfavorable decision could have a material adverse effect on our financial position, results of operations, or liquidity.

Insurance Liabilities

3 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, the estimated current portion of such undiscounted insurance liabilities, included in “Other accrued expenses and liabilities” in the accompanying Consolidated Balance Sheets, were $ 53.6 million and $ 51.0 million, respectively.

The estimated non-current portion of such undiscounted insurance liabilities included in “Other long-term obligations” as of June 30, 2024 and December 31, 2023 were $ 233.5 million and $ 229.8 million, respectively.

The current portion of anticipated insurance recoveries of $ 12.2 million and $ 11.9 million as of June 30, 2024 and December 31, 2023, respectively, were included in “Prepaid expenses and other” and the non-current portion of anticipated insurance recoveries of $ 47.5 million and $ 48.8 million as of June 30, 2024 and December 31, 2023, respectively, were included in “Other assets” in the accompanying Consolidated Balance Sheets.

To the extent that the amount required to settle claims covered by insurance continues to increase, the cost of our insurance coverage, including premiums and deductibles, is likely to increase.

As of September 30, 2024 and December 31, 2023, the estimated current portion of such undiscounted insurance liabilities, included in “Other accrued expenses and liabilities” in the accompanying Consolidated Balance Sheets, were $ 52.1 million and $ 51.0 million, respectively.

The estimated non-current portion of such undiscounted insurance liabilities included in “Other long-term obligations” as of September 30, 2024 and December 31, 2023 were $ 232.3 million and $ 229.8 million, respectively.

The current portion of anticipated insurance recoveries of $ 10.8 million and $ 11.9 million as of September 30, 2024 and December 31, 2023, respectively, were included in “Prepaid expenses and other” and the non-current portion of anticipated insurance recoveries of $ 41.9 million and $ 48.8 million as of September 30, 2024 and December 31, 2023, respectively, were included in “Other assets” in the accompanying Consolidated Balance Sheets.

NOTE 13 - Additional Cash Flow Information

The following table presents additional cash flow information for the six months ended June 30, 2024 and 2023 (in thousands):

For the six months ended

The following table presents additional cash flow information for the nine months ended September 30, 2024 and 2023 (in thousands):

For the nine months ended

September 30,

Cash paid for:

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• United Kingdom building services.

The following tables present financial information for each of our reportable segments for the three and six months ended June 30, 2024 and 2023 (in thousands):

The following tables present financial information for each of our reportable segments for the three and nine months ended September 30, 2024 and 2023 (in thousands):

For the three months ended

September 30,

Revenues from unrelated entities:

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NOTE 14 - Segment Information (Continued)

For the six months ended

For the nine months ended

September 30,

Revenues from unrelated entities:

16 unchanged sentences

For the three months ended

September 30,

Operating income (loss):

6 unchanged sentences

Corporate administration ( 34,762 ) ( 30,121 )

Impairment loss on long-lived assets — ( 2,350 )

Total operations 363,538 234,983

1 unchanged sentence

Interest income (expense), net 8,312 ( 90 )

6,106 ( 2,692 )

Income before income taxes $ 372,077 $ 234,609

3 unchanged sentences

NOTE 14 - Segment Information (Continued)

For the six months ended

For the nine months ended

September 30,

Operating income (loss):

6 unchanged sentences

Corporate administration ( 108,491 ) ( 93,901 )

Impairment loss on long-lived assets — ( 2,350 )

Total operations 956,299 586,560

1 unchanged sentence

Interest income (expense), net 21,959 ( 4,614 )

13,647 ( 4,524 )

Income before income taxes $ 978,928 $ 581,106

September 30,

2024 December 31,

9 unchanged sentences

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-Q

Item 1. Financial Statements