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The following is an excerpt from a 10-K SEC Filing, filed by EMCOR GROUP INC on 3/9/2005.
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EMCOR GROUP, INC. - 10-K - 20050309 - PART_I

PART I

ITEM 1. BUSINESS

The Internet website address of EMCOR Group, Inc. ("EMCOR" or the "Company") is http://www.emcorgroup.com. The Company's annual report on Form 10-K, quarterly reports on Forms 10-Q and current reports on Forms 8-K (and any amendments to those reports) are available free of charge on or through its Internet website as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.

GENERAL

EMCOR is one of the largest mechanical and electrical construction and facilities services firms in the United States, Canada, the United Kingdom and in the world. In 2004, EMCOR had revenues of approximately $4.75 billion. The Company provides services to a broad range of commercial, industrial, utility, and institutional customers through approximately 70 principal operating subsidiaries and joint venture entities. EMCOR has offices in 42 states and the District of Columbia in the United States, eight provinces in Canada and 12 primary locations in the United Kingdom. In the United Arab Emirates, the Company carries on business through two joint ventures. Its executive offices are located at 301 Merritt Seven Corporate Park, Norwalk, Connecticut 06851-1060, and its telephone number at those offices is (203) 849-7800.

EMCOR specializes in providing construction services relating to mechanical and electrical systems in facilities of all types and in providing comprehensive services for the operation, maintenance and management of substantially all aspects of such facilities, commonly referred to as "facilities services."

EMCOR designs, integrates, installs, starts up, operates and maintains various mechanical and electrical systems, including:

o Heating, ventilation, air conditioning, refrigeration and clean-room process ventilation systems;

o Plumbing, process and high-purity piping systems;

o Systems for generation and distribution of electrical power;

o Lighting systems;

o Low-voltage systems, such as fire alarm, security, communications and process control systems; and

o Voice and data communications systems.

EMCOR's facilities services businesses, which support the operation of a customer's facilities, include:

o Site-based operations and maintenance;

o Mobile maintenance and services;

o Facilities management;

o Remote monitoring;

o Installation and support for building systems;

o Technical consulting and diagnostic services;

o Small modification and retrofit projects; and

o Program development and management for energy systems.

These facilities services are provided to a wide range of commercial, industrial, utility and institutional facilities, including those at which EMCOR provided construction services and others at which services were provided by others. EMCOR's varied facilities services are frequently combined to provide integrated service packages which include operations and maintenance, mobile services and facility improvement programs.

EMCOR provides construction services and facilities services directly to corporations, municipalities and other governmental entities, owners/developers and tenants of buildings. It also provides these services indirectly by acting as a subcontractor to general contractors, systems suppliers and other subcontractors. Worldwide, EMCOR has approximately 26,000 employees.

EMCOR's revenues are derived from many different customers in numerous industries which have operations in several different geographical areas. Of EMCOR's 2004 revenues, approximately 80% were generated in the United States and approximately 20% were generated internationally. In 2004, approximately 49% of revenues were derived from new construction projects, 21% were derived from renovation and retrofit of customer's existing facilities and 30% were derived from facilities services operations.

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The broad scope of EMCOR's operations are more particularly described below. For information regarding the revenues, operating income and total assets of each of EMCOR's segments with respect to each of the last three fiscal years, and EMCOR's revenues and assets attributable to the United States, Canada, the United Kingdom and all other foreign countries, see Note M to EMCOR's financial statements included herein.

OPERATIONS

The mechanical and electrical construction services industry has a higher growth rate than the overall non-residential construction industry, due principally to the ever increasing content and complexity of mechanical and electrical systems in all types of projects. This increasing content and complexity is, in part, a result of the expanded use of computers and more technologically advanced voice and data communications, lighting and environmental control systems in all types of facilities. For these reasons, buildings of all types consume more electricity per square foot than in the past and thus need more extensive electrical distribution systems. In addition, advanced voice and data communication systems require more sophisticated power supplies and extensive low voltage and fiber-optic communications cabling. Moreover, the need for greater environmental controls within a building, such as the heightened need for climate control to maintain extensive computer systems at optimal temperatures, and the growing demand for environmental control in individual spaces have created expanded opportunities for the mechanical and electrical construction services and facilities services businesses.

Mechanical and electrical construction services primarily involve the design, integration, installation and start-up of: (a) heating, ventilation, air conditioning, refrigeration and clean-room process ventilation systems; (b) plumbing, process and high-purity piping systems; (c) systems for the generation and distribution of electrical power, including power cables, conduits, distribution panels, transformers, generators, uninterruptible power supply systems and related switch gear and controls; (d) lighting systems, including fixtures and controls; (e) low-voltage systems, including fire alarm, security and process control systems; and (f) voice and data communications systems, including fiber-optic and low-voltage copper cabling.

Mechanical and electrical construction services generally fall into one of two categories: (a) large installation projects with contracts often in the multi-million dollar range that involve construction of industrial and commercial buildings and institutional and public works facilities or the fit-out of large blocks of space within commercial buildings and (b) smaller installation projects typically involving fit-out, renovation and retrofit work.

EMCOR's United States mechanical and electrical construction services operations accounted for about 60% of its 2004 revenues, of which revenues approximately 72% were related to new construction and approximately 28% were related to renovation and retrofit projects. EMCOR's United Kingdom and Canada mechanical and electrical construction services operations accounted for approximately 10% of its 2004 revenues, of which revenues approximately 56% were related to new construction and approximately 44% were related to renovation and retrofit projects. EMCOR provides mechanical and electrical construction services for both large and small installation and renovation projects. Its largest projects include those (a) for institutional use (such as water and wastewater treatment facilities, hospitals, correctional facilities, schools and research laboratories); (b) for industrial use (such as pharmaceutical plants, steel, pulp and paper mills, chemical, automotive and semiconductor manufacturing facilities and oil refineries); (c) for transportation projects (such as highways, airports and transit systems); (d) for commercial use (such as office buildings, data centers, hotels, casinos, convention centers, sports stadiums, shopping malls and resorts); and (e) for power generation and energy management projects. EMCOR's largest projects, which typically range in size from $10.0 million up to and occasionally exceeding $50.0 million and are usually multi-year projects, represented about 33% of EMCOR's construction services revenues in 2004.

EMCOR's projects of less than $10.0 million accounted for approximately 67% of 2004 mechanical and electrical construction services revenues. These projects are typically completed in less than one year. They usually involve mechanical and electrical construction services when an end-user or owner undertakes construction or modification of a facility to accommodate a specific use. These projects frequently require mechanical and electrical systems to meet special needs such as critical systems power supply, special environmental controls and high-purity air systems, sophisticated mechanical and electrical systems for data centers, including those associated with internet service providers and electronic commerce, trading floors in financial services businesses, new production lines in manufacturing plants and office arrangements in existing office buildings. They are not usually dependent upon the new construction market. Demand for these projects and types of services is often prompted by the expiration of leases, changes in technology or changes in the customer's plant or office layout in the normal course of a customer's business.

EMCOR performs its services pursuant to contracts with owners, such as corporations, municipalities and other governmental entities, general contractors, systems suppliers, construction managers, developers, other subcontractors and tenants of commercial properties. Institutional and public works projects are frequently long-term complex projects that require significant technical and management skills and the financial strength to obtain bid and performance bonds, which are often a condition to bidding for and winning these projects.

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EMCOR also installs and maintains 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, in the United States, EMCOR manufactures and installs sheet metal air handling systems for both its own mechanical construction operations and for unrelated mechanical contractors. EMCOR also maintains welding and pipe fabrication shops in support of some of its own mechanical operations.

Facilities services are provided to a wide range of commercial, industrial and institutional facilities, including both those for which EMCOR provided construction services and those for which construction services were provided by others. Facilities services are frequently bundled to provide integrated service packages and are provided on a mobile basis or by customer site-based EMCOR employees.

These facilities services, which generated approximately 30% of 2004 revenues, are provided to owners, operators, tenants and managers of all types of facilities both on a contract basis for a specified period of time and on an individual task-order basis.

In 1997, EMCOR established a subsidiary to expand its facilities services operations in North America. This division has built on EMCOR's traditional mechanical and electrical construction services operations, facilities services activities at its mechanical and electrical contracting subsidiaries, and EMCOR's client relationships, as well as acquisitions, to expand the scope of services currently offered and to develop packages of services for customers on a regional, national and global basis.

As a consequence, EMCOR's United States facilities services division offers a broad range of facilities services, including maintenance and service of mechanical and electrical systems, which EMCOR has historically provided to customers following completion of construction projects, and site-based operations and maintenance, mobile maintenance and service, facilities management, remote monitoring, installation and support for building systems, technical consulting and diagnostic services, small modification and retrofit projects, and program development and management for energy systems.

EMCOR has experienced an expansion in the demand for its facilities services which it believes is driven by customers' decisions to focus on their own core competencies, the increasing technical complexity of their facilities and their mechanical, electrical, voice and data and other systems, and the need for increased reliability, especially in mechanical and electrical systems. 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. EMCOR clients requiring facilities services include utilities and major corporations engaged in information technology, telecommunications, pharmaceuticals, financial services, publishing and manufacturing.

Illustrative of the outsourcing of companies' facilities services are multi-year agreements with (a) Bank One under which EMCOR provides facilities services for approximately 2,200 Bank One locations encompassing 32.0 million square feet of space in 30 states; (b) LAM Research under which EMCOR provides such services to approximately 1.0 million square feet of production and research and development facilities and office space; (c) Fifth Third Bank under which EMCOR provides facilities services to over 1,200 Fifth Third locations with over 9.5 million square feet in seven states; (d) Exelon Corp. under which EMCOR provides comprehensive facilities services to substations, power generation facilities and offices encompassing over 5.7 million square feet of space in four states; (e) Mattson Technology, Inc. under which EMCOR provides integrated services to approximately 800,000 square feet of production and research and development facilities and office space; (f) Fidelity Investments under which EMCOR provides integrated services to approximately 2.5 million square feet of office and data center space; and (g) Hewlett-Packard Company under which EMCOR provides integrated services to approximately 20.0 million square feet of production, distribution and office space in seven states. Through a limited liability Company owned by EMCOR and CB Richard Ellis Inc., a nationwide real estate management company, operations and maintenance services are provided to over 3,000 commercial facilities comprising approximately 135.0 million square feet of space.

In December 2002, EMCOR acquired Consolidated Engineering Services, Inc. ("CES"), a facilities services business. In Washington D.C., CES is the second largest facilities services provider to the federal government behind the General Services Administration and currently provides services to such preeminent buildings as the Ronald Reagan Building, the second largest federal government facility after the Pentagon. It currently provides its services in 28 states throughout the Northeast, Midwest, Mid-Atlantic and Southeast. As part of its operations, CES is responsible for (a) the oversight of all or most of a business' facilities operations, including operation and maintenance; (b) the oversight of logistical processes; (c) tenant services and management; (d) servicing upgrade and retrofit of HVAC, electrical, plumbing, and industrial piping and sheet metal systems in existing facilities; and (e) diagnostic and solution engineering for building systems and their components. In November 2003, EMCOR acquired the Facility Management Services division of Siemens Building Technologies, Inc., including contracts to provide facilities services to several operating units of Siemens Corporation encompassing 5.0 million square feet of corporate, manufacturing and research space.

EMCOR's United Kingdom subsidiary also has a division dedicated to facilities services. This division currently provides a full range of facilities services to public and private sector customers under multi-year agreements, including the maintenance of British Airways' facilities at Heathrow and Gatwick Airports, GlaxoSmithKline Research Laboratories, and the Tubelines, a maintenance operating company of the London Underground. In the United Kingdom, EMCOR also provides facilities services at several manufacturing facilities, including BAE Systems manufacturing plants. In addition, the United Kingdom operations provide on-call and mobile service support on a task-order or contract basis, small renovation and alteration project work, and installation and maintenance services for data communications and security systems.

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EMCOR's Energy & Technologies business designs and constructs customers' energy-related projects and for certain of these projects also provides plant staffing. This business' recent projects include the design and construction of a $15.6 million 14 megawatt control utility plant and a combined heat and power facility to supply all HVAC and hot water and electrical requirements for the Morongo Native American Hotel/Casino complex in Cabazon, California and the design and construction of a $27.0 million cogeneration facility and chiller plant to provide cooling, heat and power at the University of New Hampshire main campus in Durham, New Hampshire. EMCOR will also provide plant staffing to these projects under long-term contracts. Over the past five years, EMCOR has completed more than 80 energy-related projects ranging from basic life safety standby systems to complete utility grade power plants and cogeneration/central utility plants supplying thermal and power requirements completely separated from utilities' electrical grids. This business is reported within the United States facilities services segment.

EMCOR believes mechanical and electrical construction services and facilities services activities are complementary, permitting it to offer customers a comprehensive package of services. The ability to offer both construction and facilities services enhances EMCOR's competitive position with customers. Furthermore, EMCOR's facilities services operations tend to be less cyclical than its construction operations because facilities services are more responsive to the needs of an industry's operational requirements rather than its construction requirements.

COMPETITION

EMCOR believes that the mechanical and electrical construction services business is highly fragmented and competitive consisting of thousands of small companies across the United States and around the world. EMCOR competes with national, regional and local companies, many of which are small, owner-operated entities that operate in a limited geographic area. However, there are a few public companies focused on providing mechanical and electrical construction services, such as Integrated Electrical Services, Inc. and Comfort Systems USA, Inc. A majority of EMCOR's revenues are derived from projects requiring competitive bids; however, an invitation to bid is often conditioned upon prior experience, technical capability and financial strength. Because EMCOR has total assets, annual revenues, net worth, access to bank credit and surety bonding, and expertise significantly greater than most of its competitors, EMCOR believes it has a significant competitive advantage over its competitors. Competitive factors in the mechanical and electrical construction services business include:
(a) the availability of qualified and/or licensed personnel; (b) reputation for integrity and quality; (c) safety record; (d) cost structure; (e) relationships with customers; (f) geographic diversity; (g) the ability to control project costs; (h) experience in specialized markets; (i) the ability to obtain surety bonding; (j) adequate working capital; and (k) access to bank credit.

While the facilities services business is also highly fragmented, a number of large corporations such as Johnson Controls, Inc., Fluor Corp., Unicco Service Company, Trammel Crow and Jones Lang LaSalle are engaged in this field.

EMPLOYEES

EMCOR presently employs approximately 26,000 people, approximately 71% of whom are represented by various unions pursuant to more than 460 collective bargaining agreements between EMCOR's individual subsidiaries and local unions. EMCOR believes that its employee relations are generally good. None of these collective bargaining agreements are national or regional in scope.

BACKLOG

EMCOR had contract backlog as of December 31, 2004 of approximately $2.8 billion, compared with backlog of approximately $3.0 billion as of December 31, 2003. Backlog is not a term recognized under accounting principles generally accepted in the United States; however, it is a common measurement used in EMCOR's industry. Backlog includes unrecognized revenues to be realized from uncompleted construction contracts plus unrecognized revenues expected to be realized over the remaining term of the facilities services contracts, except if the remaining term of a facilities services contract exceeds 12 months, the unrecognized revenues attributable to such contract included in backlog are limited to only 12 months of revenues. Backlog increased by $0.1 billion as of December 31, 2003 compared to December 31, 2002. For the year ended December 31, 2004, EMCOR had approximately $4.75 billion in revenues compared to approximately $4.53 billion in revenues for the year ended December 31, 2003.

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ITEM 2. PROPERTIES

The operations of EMCOR are conducted primarily in leased properties. The following table lists major facilities, both leased and owned, and identifies the business segment that is the principal user of each such facility.

                                                                                                  LEASE EXPIRATION
                                                                                APPROXIMATE         DATE, UNLESS
                                                                                SQUARE FEET             OWNED
                                                                             -----------------    ----------------
CORPORATE HEADQUARTERS
301 Merritt Seven Corporate Park
Norwalk, Connecticut ...............................................              32,500              10/31/09

OPERATING FACILITIES
4050 Cotton Center Boulevard
Phoenix, Arizona (a) ...............................................              30,603               3/31/08

1200 North Sickles Drive
Tempe, Arizona (b) .................................................              29,000                Owned

1000 N. Kraemer Place
Anaheim, California (b) ............................................              24,384               8/14/12

4540 Easton Drive
Bakersfield, California (c) ........................................              11,368               3/31/09

3208 Landco Drive
Bakersfield, California (c) ........................................              49,875               6/30/07

555 Anton Boulevard
Costa Mesa, California (a) .........................................              17,058               5/31/08

1168 Fesler Street
El Cajun, California (b) ...........................................              48,360               8/31/10

24041 Amador Street
Hayward, California (b) ............................................              40,000              10/31/11

25601 Clawiter Road
Hayward, California (b) ............................................              34,800               6/30/14

5 Vanderbilt
Irvine, California (a) .............................................              18,000               7/31/08

4462 Corporate Center Drive
Los Alamitos, California (c) .......................................              57,863               7/31/06

825 Howe Road
Martinez, California (c) ...........................................             109,800              12/31/07

8670 Younger Creek Drive
Sacramento, California (a) .........................................              54,135               1/13/12

9505 and 9525 Chesapeake Drive
San Diego, California (c) ..........................................              25,124              12/31/06

414 Brannan Street
San Francisco, California (c) ......................................              18,964               3/31/05

4405 and 4420 Race Street
Denver, Colorado (b) ...............................................              17,704               9/30/11

345 Sheridan Boulevard
Lakewood, Colorado (c) .............................................              63,000                Owned

367 and 377 Research Parkway
Meriden, Connecticut (b) ...........................................              23,500               7/31/11

1781 N.W. North River Drive
Miami, Florida (b) .................................................              11,285                Owned

2501 S.W. 160th Street
Miramar, Florida (c) ...............................................              15,877               7/31/08

3145 Northwoods Parkway
Norcross, Georgia (c) ..............................................              25,808               1/31/06

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                                                                                                  LEASE EXPIRATION
                                                                                APPROXIMATE         DATE, UNLESS
                                                                                SQUARE FEET             OWNED
                                                                             -----------------    ----------------
400 Lake Ridge Drive
Smyrna, Georgia (a) ................................................              30,000               9/30/12

2160 North Asland Avenue
Chicago, Illinois (b) ..............................................              67,000               6/30/05

2100 South York Road
Oak Brook, Illinois (c) ............................................              87,700               5/31/08

3090 Colt Road
Springfield, Illinois (b) ..........................................              40,000               6/09/05

1406 Cardinal Court
Urbana, Illinois (b) ...............................................              33,750              10/01/07

7614 and 7720 Opportunity Drive
Fort Wayne, Indiana (b) ............................................             136,695              10/31/08

2655 Garfield Road
Highland, Indiana (c) ..............................................              45,816               6/30/06

5124-5128 W. 79th Street
Indianapolis, Indiana (b) ..........................................              12,600               9/30/06

2600 N. Ninth Street Road
Lafayette, Indiana (b) .............................................              13,798              10/31/08

3100 Brinkerhoff Road
Kansas City, Kansas (b) ............................................              42,836              11/30/05

3125 Brinkerhoff Road
Kansas City, Kansas (b) ............................................              22,676                Owned

631 Pecan Circle
Manhattan, Kansas (b) ..............................................              22,750               8/31/08

2118 W. Harry
Wichita, Kansas (b) ................................................              25,600               8/31/07

300 Walnut Street
Owensboro, Kentucky (c) ............................................              20,600               1/07/09

4530 Hollins Ferry Road
Baltimore, Maryland (b) ............................................              26,792                Owned

643 Lofstrand Lane
Rockville, Maryland (a) ............................................              15,000               2/28/10

306 Northern Avenue
Boston, Massachusetts (a) ..........................................              15,275               6/30/05

200 Old Colony Way
Boston, Massachusetts (b) ..........................................              11,500               3/31/08

70-70D Hawes Way
Stoughton, Massachusetts (b) .......................................              24,400              12/31/05

80 Hawes Way
Stoughton, Massachusetts (a) (b) ...................................              36,000               6/10/13

1743 Maplelawn
Troy, Michigan (c) .................................................              22,000               4/30/06

6060 Hix Road
Westland, Michigan (b) .............................................              23,000           Month to Month

6325 South Valley Boulevard
Las Vegas, Nevada (b) ..............................................              23,190              12/31/08

3555 W. Oquendo Road
Las Vegas, Nevada (c) ..............................................              90,000              11/30/08

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                                                                                                  LEASE EXPIRATION
                                                                                APPROXIMATE         DATE, UNLESS
                                                                                SQUARE FEET             OWNED
                                                                             -----------------    ----------------
6754 W. Washington Avenue
Pleasantville, New Jersey (b) ......................................              25,000               1/14/06

348 New Country Road
Secaucus, New Jersey (b) ...........................................              37,905              12/31/07

26 West Street
Brooklyn, New York (b) .............................................              15,000                Owned

301 and 305 Suburban Avenue
Deer Park, New York (b) ............................................              33,535               3/31/05

24-37 46th Street
Long Island City, New York (a) .....................................              10,000               1/31/07

111-01 and 109-15 14th Avenue
College Point, New York (c) ........................................              82,000               2/28/11

516 West 34th Street
New York, New York (c) .............................................              25,000               6/30/12

253 West 35th Street
New York, New York (c) .............................................               7,000               8/31/09

Two Penn Plaza
New York, New York (c) .............................................              55,891               1/31/16

704 Clinton Avenue South
Rochester, New York (a) ............................................              25,000               7/31/06

8740 Reading Road and
10-15 West Vorhees Street
Cincinnati, Ohio (a) ...............................................              25,600               9/27/06

3976 Southern Avenue
Cincinnati, Ohio (a) ...............................................              44,815              12/31/08

2300-2310 International Street
Columbus, Ohio (c) .................................................              25,500              10/31/07

2904 S.W. 1st Avenue
Portland, Oregon (c) ...............................................              12,500               3/31/05

700 Gracern Road
Columbia, South Carolina (a) .......................................              11,850               2/28/07

7520 Bartlett Corp. Avenue, East
Bartlett, Tennessee (c) ............................................               9,000              12/31/05

4067 New Getwell Road
Memphis, Tennessee (b) .............................................              36,000               8/28/07

6936 Commerce Avenue
El Paso, Texas (c) .................................................              18,028               1/31/07

5550 Airline Drive
Houston, Texas (b) .................................................              78,483              12/31/09

515 Norwood Road
Houston, Texas (b) .................................................              25,780              12/31/09

1574 South West Temple
Salt Lake City, Utah (c) ...........................................             120,904              12/31/06

320 23rd Street
Arlington, Virginia (a) ............................................              43,028               3/05/10

109-D Executive Drive
Dulles, Virginia (c) ...............................................              19,000               8/31/09

22930 Shaw Road
Dulles, Virginia (c) ...............................................              32,616               2/28/15

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                                                                                                  LEASE EXPIRATION
                                                                                APPROXIMATE         DATE, UNLESS
                                                                                SQUARE FEET             OWNED
                                                                             -----------------    ----------------
3280 Formex Road
Richmond, Virginia (b) .............................................              30,640               7/31/08

8657 South 190th Street
Kent, Washington (b) ...............................................              46,125               6/30/08

6950 Gisholt Drive
Madison, Wisconsin (b) .............................................              32,000               5/30/09

1 Thameside Centre
Kew Bridge Road
Kew Bridge, Middlesex, United Kingdom (d) ..........................              14,000              12/22/12

86 Talbot Road
Old Trafford, Manchester, United Kingdom (d) .......................              24,300              12/24/06

2116 Logan Avenue
Winnipeg, Manitoba, Canada (e) .....................................              19,800                Owned

3455 Landmark Boulevard
Burlington, Ontario, Canada (e) ....................................              16,100                Owned

EMCOR believes that all of its property, plant and equipment are well maintained, in good operating condition and suitable for the purposes for which they are used.

See Note K -- Commitments and Contingencies of the notes to consolidated financial statements for additional information regarding lease costs. EMCOR utilizes substantially all of its leased or owned facilities and believes there will be no difficulty either in negotiating the renewal of its real property leases as they expire or in finding alternative space, if necessary.


(a) Principally used by a company engaged in the "United States facilities services" segment.

(b) Principally used by a company engaged in the "United States mechanical construction and facilities services" segment.

(c) Principally used by a company engaged in the "United States electrical construction and facilities services" segment.

(d) Principally used by a company engaged in the "United Kingdom construction and facilities services" segment.

(e) Principally used by a company engaged in the "Canada construction and facilities services" segment.

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ITEM 3. LEGAL PROCEEDINGS

In February 1995, as part of an investigation by the New York County District Attorney's office into the business affairs of a general contractor that did business with EMCOR's subsidiary, Forest Electric Corp. ("Forest"), a search warrant was executed at Forest's executive offices. On July 12, 2000, Forest was served with a Subpoena Duces Tecum to produce certain documents as part of a broader investigation by the New York County District Attorney's office into illegal business practices in the New York City construction industry. Forest has been informed by the New York County District Attorney's office that it and certain of its officers are targets of the investigation. Forest has produced documents in response to the subpoena and intends to cooperate fully with the District Attorney's office investigation as it proceeds.

EMCOR and three of its officers (Chairman of the Board and Chief Executive Officer Frank T. MacInnis, Executive Vice President and Chief Financial Officer Leicle E. Chesser, and Senior Vice President-Chief Accounting Officer and Treasurer Mark A. Pompa) have been named as defendants in a purported consolidated class action filed in the United States District Court of Connecticut entitled IN RE EMCOR GROUP, INC SECURITIES LITIGATION. Plaintiff purports to represent a class composed of all persons who purchased or otherwise acquired EMCOR common stock and/or other securities between April 9, 2003 and October 2, 2003, inclusive. The complaint alleges violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder and of Section 20(A) of the Securities Exchange Act, relating to alleged misstatements and omissions in certain of the Company's filings with the Securities and Exchange Commission, press releases and other public statements between April 9 and October 2, 2003, and seeks damages on behalf of the purported class in unspecified amounts. A motion to dismiss the Complaint filed by EMCOR and the individual defendants is currently under submission. As set forth in the motion, EMCOR and the individual defendants believe that the plaintiff's allegations are without merit and are vigorously defending against them.

In July 2003, EMCOR's subsidiary, Poole & Kent Corporation ("Poole & Kent"), was served with a Subpoena Duces Tecum by a grand jury empaneled by the United States District Court for the District of Maryland which is investigating, among other things, Poole & Kent's use of minority and woman-owned business enterprises. Poole & Kent has produced documents in response to the subpoena and to subsequent subpoenas directed to it requesting certain business records. On April 26, 2004, Poole & Kent was advised that it is a target of the grand jury investigation. Poole & Kent is cooperating with the investigation.

On March 14, 2003, John Mowlem Construction plc ("Mowlem") presented a claim in arbitration against EMCOR's United Kingdom subsidiary, EMCOR Drake & Scull Group plc ("D&S"), in connection with a subcontract D&S entered into with Mowlem with respect to a project for the United Kingdom Ministry of Defence at Abbey Wood in Bristol, U.K. Mowlem seeks damages arising out of alleged defects in the D&S design and construction of the mechanical and electrical engineering services for the project. Mowlem's claim is for 39.5 million British pounds sterling (approximately $75.8 million), which includes costs allegedly incurred by Mowlem in connection with rectification of the alleged defects, overhead, legal fees, delay and disruption costs related to such defects, and interest on such amounts. The claim also includes amounts in respect of liabilities that Mowlem accepted in connection with a settlement agreement it entered into with the Ministry of Defence and which it claims are attributable to D&S. D&S believes it has good and meritorious defenses to the Mowlem claim. D&S has denied liability and has asserted a counterclaim for approximately 11.6 million British pounds sterling (approximately $22.3 million) for certain design, labor and delay and disruption costs incurred by D&S in connection with its subcontract with Mowlem.

EMCOR is involved in other proceedings in which damages and claims have been asserted against it. EMCOR believes it has a number of valid defenses to such proceedings and claims and intends to vigorously defend itself and does not believe that a significant liability will result.

Inasmuch as the various lawsuits and arbitrations in which EMCOR or its subsidiaries are involved range from a few thousand dollars to over $75.0 million, the outcome of which cannot be predicted, adverse results could have a material adverse effect on EMCOR's financial position and/or results of operations. These proceedings include the following: (a) a civil action brought against EMCOR's subsidiary Forest Electric Corp. ("Forest") and seven other defendants in the United States District Court for the Southern District of New York under the Sherman Act and New York common law by competitors whose employees are not members of International Brotherhood of Electrical Workers, Local #3 (the "IBEW"). The action alleges, among other things, that Forest, six other electrical contractors and the IBEW conspired to prevent competition and to monopolize the market for communications wiring services in the New York City area thereby excluding plaintiffs from wiring jobs in that market. Plaintiffs allege they have lost profits as a result of this concerted activity and seek damages in the amount of $50 million after trebling plus attorney's fees. However, plaintiffs' damages expert has stated in his pre-trial deposition that he estimates plaintiffs' damages at $8.7 million before trebling. Forest has denied the allegations of wrongdoing set forth in the complaint and pre-trail discovery has been completed. No trial date has been set by the Court. Forest believes that the suit is without merit. (b) A civil action brought by a joint venture (the "JV") between EMCOR's subsidiary Poole & Kent Corporation ("Poole & Kent") and an unrelated company in the Fairfax, Virginia Circuit Court in which the JV seeks damages from the Upper Occoquan Sewage Authority ("UOSA") resulting from material breaches of a construction contract (the "Contract") entered into between the JV and UOSA for construction of a wastewater treatment facility. Poole & Kent incurred unrecovered costs in completing this project, which are included in the balance sheet account "costs and estimated earnings in excess of billings on uncompleted contracts" in EMCOR's consolidated balance sheets as of December 31, 2004 and 2003. A jury has returned a verdict finding that UOSA committed material

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breaches of the Contract and a jury trial to establish the JV's damages is currently in process. The JV claims total damages, based upon alternative measures of damages, in excess of $75.0 million (exclusive of interest), and in a jury trial to be subsequently held the JV intends to claim damages in excess of $18.0 million (exclusive of interest). In accordance with the joint venture agreement establishing the JV, Poole & Kent would be entitled to approximately one-half of any damage award received by the JV.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

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EXECUTIVE OFFICERS OF THE REGISTRANT

FRANK T. MACINNIS, Age 58; Chairman of the Board and Chief Executive Officer of the Company since April 1994. Mr. MacInnis was elected to the additional position of President on February 26, 2004 and served as such until October 25, 2004. He also served as President of the Company from April 1994 to April 1997. From April 1990 to April 1994, Mr. MacInnis served as President and Chief Executive Officer, and from August 1990 to April 1994 as Chairman of the Board, of Comstock Group, Inc., a nationwide electrical contracting company. From 1986 to April 1990, Mr. MacInnis was Senior Vice President and Chief Financial Officer of Comstock Group, Inc. In addition, from 1986 to April 1994, Mr. MacInnis was also President of Spie Group Inc., which had interests in Comstock Group, Inc., Spie Construction Inc., a Canadian pipeline construction company, and Spie Horizontal Drilling Inc., a U.S. company engaged in underground drilling for the installation of pipelines and communications cable.

ANTHONY J. GUZZI, Age 40; President and Chief Operating Officer since October 25, 2004. From August 2001, until he joined the Company, Mr. Guzzi served as President of the North American Distribution and Aftermarket Division of Carrier Corporation ("Carrier"). Carrier is a manufacturer and distributor of commercial and residential HVAC and refrigeration systems and equipment and a provider of aftermarket services and components of its own products and those of other manufacturers in both the HVAC and refrigeration industries. From January 2001 to August 2001, Mr. Guzzi was President of Carrier's Commercial Systems and Services Division, and from June 1998 to December 2000, he was Vice President and General Manager of Carrier's Commercial Sales and Services Division.

SHELDON I. CAMMAKER, Age 65; Executive Vice President and General Counsel of the Company since September 1987 and Secretary of the Company since May 1997. Prior to September 1987, Mr. Cammaker was a senior partner of the New York City law firm of Botein, Hays & Sklar.

LEICLE E. CHESSER, Age 58; Executive Vice President and Chief Financial Officer of the Company since May 1994. From April 1990 to May 1994, Mr. Chesser served as Executive Vice President and Chief Financial Officer of Comstock Group, Inc., and from 1986 to May 1994, Mr. Chesser was also Executive Vice President and Chief Financial Officer of Spie Group, Inc.

R. KEVIN MATZ, Age 46; Senior Vice President - Shared Services of the Company since June 2003. From April 1996 to June 2003, Mr. Matz served as Vice President and Treasurer of the Company and Staff Vice President - Financial Services of the Company from March 1993 to April 1996. From March 1991 to March 1993, Mr. Matz was Treasurer of Sprague Technologies Inc., a manufacturer of electronic components.

MARK A. POMPA, Age 40; Senior Vice President - Chief Accounting Officer and Treasurer of the Company since June 2003. From September 1994 to June 2003, Mr. Pompa was Vice President and Controller of the Company.

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