(Address of Title of Name of Item 1A. Item 1B. Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 10. Item 11. Item 12. Item 13. Item 14. Item 15. above. The segment formally named the United Kingdom construction and facilities services segment has been renamed the United Kingdom construction and building services segment. In addition, the results of operations for all periods presented reflect: (a) discontinued operations accounting due to the disposition in August 2011 of our Canadian subsidiary and (b) certain reclassifications of prior period amounts from our United States building services segment to our United States mechanical construction and facilities services segment due to changes in our internal reporting structure. Electric power transmission and distribution systems; Premises electrical and lighting systems; Low-voltage systems, such as fire alarm, security and process control systems; Voice and data communications systems; Roadway and transit lighting and fiber optic lines; Heating, ventilation, air conditioning, refrigeration and clean-room process ventilation systems; Fire protection systems; Plumbing, process and high-purity piping systems; Controls and filtration systems; Water and wastewater treatment systems; Central plant heating and cooling systems; Crane and rigging services; Millwright services; and Steel fabrication, erection, and welding services. Outage services to utilities and industrial plants; Military base operations support services; Mobile mechanical maintenance and services; Floor care and janitorial services; Landscaping, lot sweeping and snow removal; Facilities management; Vendor management; Program development, management and maintenance for energy systems; Technical consulting and diagnostic services; Infrastructure and building projects for federal, state and local governmental agencies and bodies; Retrofit projects to comply with clean air laws. piping; electrical and lighting systems, including fixtures and controls; (c) low-voltage systems, such as fire alarm, security and process control systems; (d) voice and data communications systems, including fiber-optic and low-voltage cabling; (e) roadway and transit lighting and fiber-optic lines; (f) heating, ventilation, air conditioning, refrigeration and clean-room process ventilation systems; (g) fire protection systems; (h) plumbing, process and high-purity piping systems; (i) controls and filtration systems; (j) water and wastewater treatment systems; (k) central plant heating and cooling systems; (l) cranes and rigging; (m) millwrighting; and (n) steel fabrication, erection and welding. 2013. States. producers. term. competitive bids; however, an invitation to bid is often conditioned upon prior experience, technical capability and financial strength. Because we have total assets, annual revenues, net worth, access to bank credit and surety bonding and expertise significantly greater than most of our competitors, we believe we have a significant competitive advantage over our competitors in providing electrical and mechanical construction services. Competitive factors in the electrical and mechanical 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; (k) access to bank credit; and (l) price. However, there are relatively few significant barriers to entry to several types of our construction services business. However, there are relatively few barriers to entry to most of our building services businesses. revenues provided for in the initial contract award. Our backlog also includes amounts related to services contracts for which a fixed price contract value is not assigned; however, a reasonable estimate of total revenues can be made from budgeted amounts agreed to with our customer. Our backlog is comprised of: (a) original contract amounts, (b) change orders for which we have received written confirmations from our customers, (c) pending change orders for which we expect to receive confirmations in the ordinary course of business and (d) claim amounts that we have made against customers for which we have determined we have a legal basis under existing contractual arrangements and as to which we consider collection to be probable. Claim amounts recorded were immaterial for all periods presented. Our backlog does not include anticipated revenues from unconsolidated joint ventures or variable interest entities and anticipated revenues from pass-through costs on contracts for which we are acting in the capacity of an agent and which are reported on the net basis. We believe our backlog is firm, although many contracts are subject to cancellation at the election of our customers. Historically, cancellations have not had a material adverse effect on us. We estimate that 84% of our backlog as of December 31, 2013 will be recognized as revenues during 2014. Public Reference Room. position. their government infrastructure projects and/or bodies. customers cancel a significant number of contracts; we fail to win a significant number of our existing contracts upon re-bid; we complete a significant number of non-recurring projects and cannot replace them with similar projects; or we fail to reduce operating and overhead expenses consistent with any decrease in our revenues. expand the range of services offered to customers to address their evolving needs; attract new customers; and increase the number of projects performed for existing customers. Current or future market conditions, as well as changes in our including liabilities assumed, over the fair value of the tangible and identifiable intangible assets of the business acquired. The Financial Accounting Standards Board (“FASB”) requires that all business combinations be accounted for using the acquisition method of accounting and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. FASB Accounting Standard Codification (“ASC”) Topic 350, 2013. long-standing relationships with many of our significant clients, our clients may unilaterally reduce, fail to renew or our certificate of incorporation permits our board of directors to issue “blank check” preferred stock and to adopt amendments to our bylaws; our bylaws contain restrictions regarding the right of our stockholders to nominate directors and to submit proposals to be considered at stockholder meetings; our certificate of incorporation and bylaws we are subject to provisions of Delaware law, which prohibit us from engaging in any of a broad range of business transactions with an “interested stockholder” for a period of three years following the date such stockholder becomes classified as an interested stockholder. 5550 Airline Drive and 25 Tidwell Road Principally used by a company engaged in the “United States electrical construction and facilities services” segment. Principally used by a company engaged in the “United States mechanical construction and facilities services” segment. Principally used by a company engaged in the “United States 2011 First Quarter Second Quarter Third Quarter Fourth Quarter 2010 First Quarter Second Quarter Third Quarter Fourth Quarter Plan Category Equity Compensation Plans Approved by Security Holders Equity Compensation Plans Not Approved by Security Holders Total Included within this amount are Represents shares of our common stock available for future issuance under our 2010 Incentive Plan (the "2010 Plan"), which may be issuable in respect of options and/or stock appreciation rights granted under the 2010 Plan and/or may also be issued pursuant to the award of restricted stock, unrestricted stock and/or awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, our common stock. Total Number of Shares Purchased as Part Maximum Number (or Approximate Dollar Value) of Shares That May Yet be Purchased Under the Plan or Programs October 1, 2011 to October 31, 2011 November 1, 2011 to November 30, 2011 December 1, 2011 to December 31, 2011 On September 26, 2011, we announced that our Board of Directors had authorized 10-K. Canadian subsidiary. Revenues Gross profit Impairment loss on goodwill and identifiable intangible assets Operating income (loss) Net income (loss) attributable to EMCOR Group, Inc. Basic earnings (loss) per common share: From continuing operations From discontinued operations Diluted (loss) earnings per common share: From continuing operations From discontinued operations Balance Sheet Data (In thousands) Equity(1) Total assets Goodwill Borrowings under revolving credit facility Term loan, including current maturities Other long-term debt, including current maturities Capital lease obligations, including current maturities changes in our internal reporting structure. Revenues Revenues increase (decrease) from prior year Impairment loss on goodwill and identifiable intangible assets Operating income (loss) Operating income (loss) as a percentage of revenues Net income (loss) attributable to EMCOR Group, Inc. Diluted earnings (loss) per common share from continuing operations Net cash provided by operating activities total backlog (in thousands, except for percentages): Revenues from unrelated entities: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations United Kingdom construction and facilities services Other international construction and facilities services Total worldwide operations us. Cost of sales Gross profit Gross profit margin gross profit. Selling, general and administrative expenses Selling, general and administrative expenses as a percentage of revenues acquisitions made prior to 2013. connection with the restructuring of our United Kingdom operations in 2014. 2012, respectively. Operating income (loss): United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations United Kingdom construction and facilities services Other international construction and facilities services Corporate administration Restructuring expenses Impairment loss on goodwill and identifiable intangible assets Total worldwide operations Other corporate items: Interest expense Interest income Gain on sale of equity investment Income (loss) from continuing operations before income taxes 2012. operations. Operations. 2011 Credit Agreement. balances. operation Loss from discontinued operation included income tax benefits of $0.4 million for the year ended December 31, 2011. Net cash provided by operating activities Net cash used in investing activities Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Contractual Obligations Revolving Credit Facility (including interest at 1.80%)(1) Capital lease obligations Operating leases Open purchase obligations(2) Other long-term obligations, including current portion(3) Liabilities related to uncertain income tax positions Total Contractual Obligations Other Commercial Commitments Letters of credit Represents open purchase orders for material and subcontracting costs related to construction and service contracts. These purchase orders are not reflected in Represents primarily insurance related liabilities and liabilities for deferred income taxes, incentive compensation and earn-out arrangements, classified as other long-term liabilities in the consolidated balance sheets. Cash payments for insurance related liabilities may be payable beyond three years, but it is not practical to estimate these payments. We provide funding to our post retirement plans based on at least the minimum funding required by applicable regulations. In determining the minimum required funding, we utilize current actuarial assumptions and exchange rates to forecast estimates of amounts that may be payable for up to five years in the future. In our judgment, minimum funding estimates beyond a five year time horizon cannot be reliably estimated, and therefore, have not been included in the table. indirect subsidiaries and 2013. our operations. Surety Bonds secure our payment and performance obligations under such contracts, and we have agreed to indemnify the Surety Companies for amounts, if any, paid by them in respect of Surety Bonds issued on our behalf. In addition, at the request of labor unions representing certain of our employees, Surety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for such employees. Public sector contracts require Surety Bonds more frequently than private sector contracts, and accordingly, our bonding requirements typically increase as the amount of public sector work increases. As of December 31, unapproved change orders). Such amounts are recorded at estimated net realizable value and take into account factors that may affect our ability to bill unbilled revenues and collect amounts after billing. The profit associated with claim amounts is not recognized until the claim has been settled and payment has been received. During 2012, we recognized approximately $9.5 million of profit from the settlement and payment of two claims within the United States electrical construction and facilities services segment. There was no significant profit recognized from settlements or payment of claims in 2013. As of December 31, During 2013, we recognized aggregate losses of approximately $24.5 million associated with two contracts within the United States mechanical construction and facilities services segment as a result of a change in contract estimates. Our estimated We have determined that as of December 31, 2013, a valuation allowance was not required on any of the remaining deferred tax assets because of significant deferred tax liabilities after consideration of the above mentioned deferred tax liabilities related to indefinite-lived intangible assets and projected future income. non-competition agreements and trade names), primarily arising out of the acquisition of companies. As of December 31, segment. As of the date of our latest impairment test, the carrying values of our United States industrial services, United States building services, United States mechanical construction and facilities services and United States electrical construction and facilities services segments were approximately $744.9 million, $487.7 million, $237.7 million and $58.7 million, respectively. The fair values of our United States For the years ended December 31, 2013 and 2012, no impairment of our trade names was recognized. points, interest expense, net of income taxes, would increase by approximately and Subsidiaries Current assets: Cash and cash equivalents Accounts receivable, less allowance for doubtful accounts of $16,685 and $17,287, respectively Costs and estimated earnings in excess of billings on uncompleted contracts Inventories Prepaid expenses and other Total current assets Investments, notes and other long-term receivables Property, plant and equipment, net Goodwill Identifiable intangible assets, net Other assets Total assets Current liabilities: Borrowings under revolving credit facility Current maturities of long-term debt and capital lease obligations Accounts payable Billings in excess of costs and estimated earnings on uncompleted contracts Accrued payroll and benefits Other accrued expenses and liabilities Total current liabilities Borrowings under revolving credit facility Long-term debt and capital lease obligations Other long-term obligations Total liabilities Equity: EMCOR Group, Inc. stockholders’ equity: Preferred stock, $0.01 par value, 1,000,000 shares authorized, zero issued and outstanding Common stock, $0.01 par value, 200,000,000 shares authorized, 68,125,437 and 68,954,426 shares issued, respectively Capital surplus Accumulated other comprehensive loss Retained earnings Treasury stock, at cost 1,681,037 and 2,293,875 shares, respectively Total EMCOR Group, Inc. stockholders’ equity Noncontrolling interests Total equity Total liabilities and equity and Subsidiaries Revenues Cost of sales Gross profit Selling, general and administrative expenses Restructuring expenses Impairment loss on goodwill and identifiable intangible assets Operating income (loss) Interest expense Interest income Gain on sale of equity investment Income (loss) from continuing operations before income taxes Income tax provision Income (loss) from continuing operations Income (loss) from discontinued operation, net of income taxes Net income (loss) including noncontrolling interests Less: Net income attributable to noncontrolling interests Net income (loss) attributable to EMCOR Group, Inc. Basic earnings (loss) per common share: From continuing operations attributable to EMCOR Group, Inc. common stockholders From discontinued operation Net income (loss) attributable to EMCOR Group, Inc. common stockholders Diluted earnings (loss) per common share: From continuing operations attributable to EMCOR Group, Inc. common stockholders From discontinued operation Net income (loss) attributable to EMCOR Group, Inc. common stockholders Dividends declared per common share and Subsidiaries COMPREHENSIVE INCOME Cash flows from operating activities: Net income (loss) including noncontrolling interests Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization Amortization of identifiable intangible assets Provision for (recovery of) doubtful accounts Deferred income taxes Gain on sale of discontinued operation, net of income taxes Gain on sale of equity investments Loss on sale of property, plant and equipment Excess tax benefits from share-based compensation Equity income from unconsolidated entities Non-cash expense for amortization of debt issuance costs Non-cash income from contingent consideration arrangements Non-cash expense for impairment of goodwill and identifiable intangible assets Non-cash compensation expense Supplemental defined benefit plan contribution Distributions from unconsolidated entities Changes in operating assets and liabilities, excluding effect of businesses acquired: (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in costs and estimated earnings in excess of billings on uncompleted contracts Increase (decrease) in accounts payable Decrease in billings in excess of costs and estimated earnings on uncompleted contracts Increase (decrease) in accrued payroll and benefits and other accrued expenses and liabilities Changes in other assets and liabilities, net Net cash provided by operating activities Cash flows from investing activities: Payments for acquisitions of businesses, net of cash acquired, and related earn-out agreements Proceeds from sale of discontinued operation, net of cash sold Proceeds from sale of equity investments Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Purchases of short-term investments with original maturities greater than 90 days Investment in and advances to unconsolidated entities and joint ventures Net cash used in investing activities Cash flows from financing activities: Proceeds from revolving credit facility Repayments of revolving credit facility Repayments of long-term debt and debt issuance costs Repayments of capital lease obligations Dividends paid to stockholders Repurchase of common stock Proceeds from exercise of stock options Shares tendered to satisfy minimum tax withholding Issuance of common stock under employee stock purchase plan Payment for contingent consideration arrangement Distributions to noncontrolling interests Excess tax benefits from share-based compensation Net cash (used in) provided by financing activities Effect of exchange rate changes on cash and cash equivalents (Decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year and Subsidiaries Balance, December 31, 2008 Net income including noncontrolling interests Foreign currency translation adjustments Post retirement adjustment, net of tax of $3.2 million Deferred loss on cash flow hedge, net of tax of $0.5 million Loss on partial de-designation of cash flow hedge, net of tax of $0.1 million Comprehensive income Less: Net income attributable to noncontrolling interests Comprehensive income attributable to EMCOR Treasury stock, at cost (2) Common stock issued under share-based compensation plans (3) Common stock issued under employee stock purchase plan Distributions to noncontrolling interests Share-based compensation expense Capital contributed by selling shareholders of an acquired business (4) Balance, December 31, 2009 Net (loss) income including noncontrolling interests Foreign currency translation adjustments Post retirement adjustment, net of tax of $2.5 million Deferred gain on cash flow hedge, net of tax of $0.4 million Comprehensive loss Less: Net income attributable to noncontrolling interests Comprehensive loss attributable to EMCOR Treasury stock, at cost (2) Common stock issued under share-based compensation plans (3) Common stock issued under employee stock purchase plan Distributions to noncontrolling interests Share-based compensation expense Balance, December 31, 2010 Net income including noncontrolling interests Foreign currency translation adjustments (5) Post retirement adjustment, net of tax of $7.6 million Comprehensive income Less: Net income attributable to noncontrolling interests Comprehensive income attributable to EMCOR Treasury stock, at cost (2) Common stock issued under share-based compensation plans (3) Common stock issued under employee stock purchase plan Common stock dividends Repurchase of common stock Distributions to noncontrolling interests Share-based compensation expense Balance, December 31, 2011 Represents value of shares of common stock withheld by EMCOR for minimum statutory income tax withholding requirements upon the issuance of shares in respect of restricted stock units. and Subsidiaries including refineries and petrochemical plants. generally on a pro-rata basis over the life of the contractual arrangement. Expenses related to all services arrangements are recognized as incurred. Revenues related to the engineering, During 2013, we recognized aggregate losses of approximately $24.5 million associated with two contracts within the United States mechanical construction and facilities services segment as a result of a change in contract estimates. Costs incurred on uncompleted contracts Estimated earnings, thereon Less: billings to date Costs and estimated earnings in excess of billings on uncompleted contracts Billings in excess of costs and estimated earnings on uncompleted contracts As of December 31, 2014. is assessed for possible impairment by comparing their carrying values to their undiscounted net pre-tax cash flows expected to result from the use of the asset. Impaired assets are written down to their fair values, generally determined based on their estimated future discounted cash flows. Based on the results of our testing for the years ended generally the vesting period. For shares subject to graded vesting, our policy is to apply the straight-line method in recognizing compensation expense. ASC 718 requires the benefits of tax deductions in excess of recognized compensation expense to be reported as a financing cash inflow, rather than as an operating cash inflow on the Consolidated Statements of Cash Flows. This requirement reduces net operating cash flows and increases net financing cash flows. position or results of operations. United States mechanical construction and facilities services segment. We believe these businesses further expand our service capabilities into new geographical and/or technical areas. acquisitions. Loss from discontinued operation included income tax benefits of Revenues (Loss) income from discontinued operation (net of income taxes) Gain on sale of discontinued operation (net of income taxes) Net income (loss) from discontinued operation Diluted earnings (loss) per share from discontinued operation Assets of discontinued operation: Current assets Non-current assets Liabilities of discontinued operation: Current liabilities Non-current liabilities Numerator: Income (loss) from continuing operations attributable to EMCOR Group, Inc. common stockholders Income (loss) from discontinued operation Net income (loss) attributable to EMCOR Group, Inc. available to common stockholders Denominator: Weighted average shares outstanding used to compute basic earnings (loss) per common share Effect of diluted securities—Share-based awards Shares used to compute diluted earnings (loss) per common share Basic earnings (loss) per common share: From continuing operations attributable to EMCOR Group, Inc. common stockholders From discontinued operation Net income (loss) attributable to EMCOR Group, Inc. common stockholders Diluted earnings (loss) per common share: From continuing operations attributable to EMCOR Group, Inc. common stockholders From discontinued operation Net income (loss) attributable to EMCOR Group, Inc. common stockholders Subsidiaries Raw materials and construction materials Work in process Machinery and equipment Vehicles Furniture and fixtures Computer hardware/software Land, buildings and leasehold improvements Accumulated depreciation and amortization unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting For the years ended December 31, 2013 and Gross balance at December 31, 2010 Accumulated impairment charge Balance at December 31, 2010 Acquisitions, earn-out and purchase price adjustments Balance at December 31, 2011 this acquisition. Identifiable intangible assets as of December 31, Contract backlog Developed technology/Vendor network Customer relationships Non-competition agreements Trade names (amortized) Trade names (unamortized) Total Contract backlog Developed technology Customer relationships Non-competition agreements Trade names (amortized) Trade names (unamortized) Total 2012 2013 2014 2015 2016 Thereafter and Subsidiaries 2011 Revolving Credit Facility 2010 Revolving Credit Facility Capitalized Lease Obligations, at weighted average interest rates from 0.8% to 13.8% payable in varying amounts through 2015 Other Less: current maturities Asset Category Cash and cash equivalents(1) Restricted cash(2) Short-term investments(2) Total Asset Category Cash and cash equivalents(1) Restricted cash(2) Short-term investments(2) Total Restricted cash and short-term investments with original maturities greater than Balance at beginning of year Additions based on tax positions related to the current year Additions based on tax positions related to prior years Reductions for tax positions of prior years Reductions for expired statute of limitations Balance at end of year Current: Federal provision State and local provisions Foreign (benefit) provision Deferred Factors accounting for the variation from U.S. statutory income tax rates from continuing operations for the years ended December 31, Federal income taxes at the statutory rate Noncontrolling interests State and local income taxes, net of federal tax benefits Permanent differences Goodwill impairment Foreign income taxes (including UK statutory rate changes) Adjustments to valuation allowance for deferred tax assets Federal tax reserves Other Deferred income tax assets: Excess of amounts expensed for financial statement purposes over amounts deducted for income tax purposes: Insurance liabilities Pension liability Other liabilities and reserves Total deferred income tax assets Valuation allowance for deferred tax assets Net deferred income tax assets Deferred income tax liabilities: Costs capitalized for financial statement purposes and deducted for income tax purposes: Amortization of identifiable intangible assets Other, primarily depreciation of property, plant and equipment Total deferred income tax liabilities Net deferred income tax (liabilities) assets differences and projected future income. Although realization is not assured, we believe it is more likely than not that the deferred income tax asset, net of the valuation allowance discussed above, will be realized. The amount of the deferred income tax asset considered realizable, however, could be reduced if estimates of future income are reduced. United States Foreign our operations. Stock Options Restricted Stock Units Balance, December 31, 2008 Balance, December 31, 2008 Granted Granted Forfeited Forfeited Exercised Vested/Issued Balance, December 31, 2009 Balance, December 31, 2009 Granted Granted Forfeited Forfeited Exercised Vested/Issued Balance, December 31, 2010 Balance, December 31, 2010 Granted Granted Forfeited Forfeited Exercised Vested/Issued Balance, December 31, 2011 Balance, December 31, 2011 2010: The following table summarizes information about our stock options as of December 31, Stock Options Outstanding and Exercisable Range of Exercise Prices Weighted Average Remaining Life $ 9.67 - $10.58 $10.96 - $13.20 $13.68 - $22.90 $23.17 - $29.26 $36.03 2013: Dividend yield Expected volatility Risk-free interest rate Expected life of options in years Weighted average grant date fair value plan assets and the projected benefit obligations, be recorded in our balance sheet with a corresponding adjustment to accumulated other comprehensive income (loss) and (b) gains and losses for the differences between actuarial assumptions and actual results, and unrecognized service costs, be recognized through accumulated other comprehensive income (loss). These amounts will be subsequently recognized as net periodic pension cost. Change in pension benefit obligation Benefit obligation at beginning of year Service cost Interest cost Plan participants’ contributions Actuarial loss Curtailment gain Benefits paid Foreign currency exchange rate changes Benefit obligation at end of year Change in pension plan assets Fair value of plan assets at beginning of year Actual return on plan assets Employer contributions Plan participants’ contributions Benefits paid Foreign currency exchange rate changes Fair value of plan assets at end of year Funded status at end of year Unrecognized losses 2014. Discount rate The weighted average assumptions used to determine net periodic pension cost for the years ended December 31, Discount rate Annual rate of salary provision Annual rate of return on plan assets Service cost Interest cost Expected return on plan assets Amortization of unrecognized loss Net periodic pension cost a component of "Cost of sales" and "Selling, general and administrative expenses" on the Consolidated Statements of Operations. The estimated unrecognized loss for the UK Plan that will be amortized from Accumulated other comprehensive loss into net periodic pension cost over the next year is approximately Asset Category Equity securities Debt securities Cash Total and Subsidiaries Asset Category Equity and equity like investments Corporate bonds Government bonds Cash Total Asset Category Equity and equity like investments Corporate bonds Government bonds Cash Total Assets that are not exchange traded but have a unit price that is based on the net asset value of the fund. The unit prices are not quoted but the underlying assets held by the fund are either: held in a variety of listed investments held in UK treasury bonds or corporate bonds with the asset value being based on fixed income streams. Some of the underlying bonds are also listed on regulated markets. Assets that are not exchange traded but have a unit price that is based on the net asset value of the fund. The unit prices are quoted. The underlying assets within these funds comprise cash or assets that are listed on a regulated market (i.e., the values are based on observable market data) and it is these values that are used to calculate the unit price of the fund. The table below sets forth a summary of changes in the fair value of the UK Equity and Equity Like Investments Start of year balance Actual return on plan assets, relating to assets still held at reporting date Purchases, sales and settlements, net Change due to exchange rate changes End of year balance Our United Kingdom subsidiary expects to contribute approximately 2014. 2012 2013 2014 2015 2016 Succeeding five years Projected benefit obligation Accumulated benefit obligation Fair value of plan assets long-term obligations” on the accompanying Consolidated Balance Sheets. The measurement date for these The following table lists all domestic MEPPs to which our contributions exceeded Pension Fund and Subsidiaries Pension Fund June 2016 May 2014 Total Contributions The zone status represents the most recent available information for the respective MEPP, which may be 2012 or earlier for the 2013 year and 2011 or earlier for the 2012 year. 2012, as a result of acquisitions made in each respective year since the acquired companies were not parties to any MEPPs. as readily available and/or as comparable as the information that has been ascertained in the United States. Based upon the most recently available information, 2012 2013 2014 2015 2016 Thereafter Total minimum lease payments Amounts representing interest Present value of net minimum lease payments Rent expense for operating leases and other rental items, including short-term equipment rentals charged to cost of sales for our construction contracts, for the years ended December 31, connection with the restructuring of our United Kingdom operations in 2014. Litigation is subject to many uncertainties and the outcome of litigation is not predictable with assurance. It is possible that some litigation matters for which reserves have not been established could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial position, results of operations or liquidity. Cash paid during the year for: Interest Income taxes Non-cash financing activities: Assets acquired under capital lease obligations Contingent purchase price accrued Revenues from unrelated entities: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations United Kingdom construction and facilities services Other international construction and facilities services Total worldwide operations Total revenues: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Less intersegment revenues Total United States operations United Kingdom construction and facilities services Other international construction and facilities services Total worldwide operations and Subsidiaries Operating income (loss): United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations United Kingdom construction and facilities services Other international construction and facilities services Corporate administration Restructuring expenses Impairment loss on goodwill and identifiable intangible assets Total worldwide operations Other corporate items: Interest expense Interest income Gain on sale of equity investment Income (loss) from continuing operations before income taxes Capital expenditures: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations Canada construction United Kingdom construction and facilities services Other international construction and facilities services Corporate administration Total worldwide operations Depreciation and amortization of Property, plant and equipment: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations Canada construction United Kingdom construction and facilities services Other international construction and facilities services Corporate administration Total worldwide operations and Subsidiaries Costs and estimated earnings in excess of billings on uncompleted contracts: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations Canada construction United Kingdom construction and facilities services Other international construction and facilities services Total worldwide operations Billings in excess of costs and estimated earnings on uncompleted contracts: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations Canada construction United Kingdom construction and facilities services Other international construction and facilities services Total worldwide operations Long-lived assets: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations Canada construction United Kingdom construction and facilities services Other international construction and facilities services Corporate administration Total worldwide operations Goodwill: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations Canada construction United Kingdom construction and facilities services Other international construction and facilities services Corporate administration Total worldwide operations Total assets: United States electrical construction and facilities services United States mechanical construction and facilities services United States facilities services Total United States operations Canada construction United Kingdom construction and facilities services Other international construction and facilities services Corporate administration Total worldwide operations Stamford, Connecticut February Stamford, Connecticut February 2013. (a)(1) The following consolidated financial statements of EMCOR Group, Inc. and Subsidiaries are filed as part of this report under Part II, Item 8. Financial Statements and Supplementary Data: Consolidated Statements of Consolidated Statements of Equity Notes to Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm (a)(2) The following financial statement schedule is included in this Form 10-K report: Schedule All other schedules are omitted because they are not required, are inapplicable, or the information is otherwise shown in the consolidated financial statements or notes thereto. (a)(3) For the list of exhibits, see the Exhibit Index immediately following the signature page hereof, which Exhibit Index is incorporated herein by reference. Anthony J. Guzzi President, Chief Executive Officer and Director Executive Vice President and Chief Financial Officer Stephen W. Bershad Description Allowance for doubtful accounts Year Ended December 31, 2011 Year Ended December 31, 2010 Year Ended December 31, 2009 Amount principally relates to business acquisitions and divestitures, and the effect of exchange rate changes. Deductions primarily represent uncollectible balances of accounts receivable written off, net of recoveries. Description Exhibit 2.1 to EMCOR Group, Inc.’s (“EMCOR”) Report on Form 8-K dated February 14, 2002 2(a-2) Exhibit 2.1 to EMCOR’s Report on Form 8-K (Date of Report August 20, 2007) 3(a-1) Exhibit 3(a-5) to EMCOR’s Registration Statement on Form 10 as originally filed March 17, 1995 (“Form 10”) 3(a-2) 3(a-3) Exhibit 3(a-3) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1997 (“1997 Form 10-K”) 3(a-4) 3(a-5) Exhibit A to EMCOR’s Proxy Statement dated August 17, 2007 for Special Meeting of Stockholders held September 18, 2007 3(b) Exhibit 3(b) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1998 (“1998 Form 10-K”) 4(b) 4(c) Exhibit 10.1 to the April 2005 Form 8-K 10(b) Exhibit 10(c) 10(c) Exhibit 10.1 to EMCOR’s Report on Form 8-K (Date of Report October 12, 2004) 10(d) Exhibit C to the Guzzi Letter Agreement 10(e) Exhibit F to the Guzzi Letter Agreement 10(f-1) Exhibit D to the Guzzi Letter Agreement 10(f-2) Exhibit 10(g-2) to the March 2007 Form 10-Q 10(g-1) Exhibit 10(c) to the June 1998 Form 10-Q Exhibit 10(i) to the June 1999 Form 10-Q Exhibit 10(m-3) to the March 2007 Form 10-Q Exhibit 10(f) to the June 1998 Form 10-Q Exhibit 10(m) to the June 1999 Form 10-Q Exhibit 10(o-3) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 (“March 2002 Form 10-Q”) Exhibit 10(n-4) to the March 2007 Form 10-Q Exhibit 10(g) to the June 1998 Form 10-Q Exhibit 10(n) to the June 1999 Form 10-Q Exhibit 10(p-3) to the March 2002 Form 10-Q Exhibit 10(o-4) to the March 2007 Form 10-Q Exhibit E to the Guzzi Letter Agreement Exhibit 10(p-2) to the March 2007 Form 10-Q Exhibit 10.1 to Form 8-K (Date of Report March 29, 2010) (“March 2010 Form 8-K”) Exhibit 10 to Form 8-K (Date of Report December 15, Exhibit 10(s-2) to 2008 Form 10-K Exhibit 10.2 to March 2010 Form 8-K Exhibit 10(t-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2007 (“2007 Form 10-K”) Exhibit A to EMCOR’s Proxy Statement for its Annual Meeting held on June 12, 2003 (“2003 Proxy Statement”) Exhibit 10(u-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2006 (“2006 Form 10-K”) Exhibit B to EMCOR’s 2003 Proxy Statement Exhibit 10(t-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2003 (“2003 Form 10-K”) Exhibit 10(v-3) to 2006 Form 10-K Exhibit 10.1 to Form 8-K (Date of Report January 3, 2005) Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held June Exhibit 10(z) to 2009 Form 10-K Exhibit A to Guzzi Letter Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held June 20, 2007 Exhibit 10(h)(h-2) to 2007 Form 10-K Exhibit 10.1 to Form 8-K (Date of Report December 15, 2008) Exhibit 10(h)(h-3) to 2007 Form 10-K Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held on June 11, 2010 Exhibit 10(i)(i-2) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 Exhibit Exhibit C to EMCOR’s Proxy Statement for its Annual Meeting held June 18, 2008 Exhibit 10(o)(o) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 10(a)(a) Note 5 of the Notes to the Consolidated Financial Statements 14 Exhibit 14 to 2003 Form 10-K 31.2 32.1 32.2 WASHINGTON,FORM 10-KANNUAL REPORT PURSUANT TO SECTIONS 13 or 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934(Mark One)FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 20112013¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Transition Periodtransition period fromto Number number 1-8267EMCOR GROUP, INC.(Exact Name of Registrant as Specified in Its Charter)EMCOR Group, Inc. (Exact name of registrant as specified in its charter) Delaware 11-2125338 Other Jurisdictionother jurisdiction ofIncorporationOrganization)organization) No.)Number) 06851-1092 Norwalk, ConnecticutPrincipal Executive Offices) (Zip Code) Each Class Each Exchangeeach exchange on Which RegisteredCommon Stock New York Stock Exchange well–knownwell-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yesx No¨registrant:registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx No¨registrant’sregistrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.¨Large accelerated filerx Accelerated filer¨ Non-accelerated filer¨ (Do not check if a smaller reporting company) Smaller reporting company¨Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨ inby Rule 12b-2 of the Exchange Act). Yes¨ Nox$1,576,000,000$1,990,000,000 as of the last business day of the registrant’sregistrant's most recently completed second fiscal quarter, based upon the closing sale price on the New York Stock Exchange reported for such date. Shares of common stock held by each officer and director and by each person who owns 5% or more of the outstanding common stock (based solely on filings of such 5% holders) have been excluded from such calculation as such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.registrant’sregistrant's common stock outstanding as of the close of business on February 21, 2012: 66,575,88220, 2014: 66,924,741 shares.20122014 Annual Meeting of Stockholders, which document will be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year to which this Form 10-K relates, are incorporated by reference into Items 10 through 14 of Part III of this Form 10-K. PAGE PART IItem 1. PAGE 1 Item 1. 1 24555 1415 PART II1618193537Item 9A. Item 9B. Item 9A.Controls and Procedures76Item 9B.Other Information76PART III77 PART IV“Management’s“Management's Discussion and Analysis of Financial Condition and Results of Operations” section, and other sections of this report, and in our Forms 10-Q for the three months ended March 31, 2011,2013, June 30, 20112013 and September 30, 20112013 and in other reports filed by us from time to time with the SEC as well as in press releases, in our presentations, on our web site and in other material released to the public. Such risks, uncertainties and assumptions are difficult to predict, beyond our control and may turn out to be inaccurate causing actual results to differ materially from those that might be anticipated from our forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent reports on Forms 10-K, 10-Q and 8-K should be consulted.States, the United KingdomStates. In addition, we provide a number of building services and in the world.industrial services. In 2011,2013, we had revenues of approximately $5.6$6.4 billion. We provideOur services are provided to a broad range of commercial, industrial, utility and institutional customers through approximately 70 operating subsidiaries and joint venture entities. Our offices are located in the United States and the United Kingdom. Our executive offices are located at 301 Merritt Seven, Norwalk, Connecticut 06851-1092, and our telephone number at those offices is (203) 849-7800.facilitiesall types of all typesnon-residential facilities and in providing comprehensivevarious services forrelating to the operation, maintenance and management of substantiallyfacilities, including refineries and petrochemical plants.aspects of such facilities, commonlyperiods presented to reflect the changes in our segments referred to as “facilities services.”facilitiesbuilding services operations, manywhich are provided to a wide range of which support the operation of a customer’sfacilities, including commercial, utility, institutional and governmental facilities, include:IndustrialCommercial and government site-based operations and maintenance;services, including those for refineries and petrochemical plants;services;Commercial and government site-based operations and maintenance;Facilitiesa wide rangerefineries and petrochemical plants and include:commercial, industrial, utility, institutionalheat exchangers, towers, vessels and governmental facilities.facilitiesbuilding services directly to corporations, municipalities and federal and state governmental entities, owners/developers, and tenants of buildings. We also provide theseour construction services indirectly by acting as a subcontractor to general contractors, systems suppliers, property managers and other subcontractors. Our industrial services generally are provided directly to refineries and petrochemical plants. Worldwide, as of December 31, 2011,2013, we had over 25,00027,000 employees.20112013 revenues, approximately 91%93% were generated in the United States and approximately 9%7% were generated in foreign countries, substantially all in the United Kingdom. In 2011,2013, approximately 36% of revenues were derived from new construction projects, 20%19% were derived from renovation and retrofit of customer’scustomer's existing facilities, and 44%37% were derived from facilitiesbuilding services operations, and 8% were derived from industrial services operations.and operating income and total assets of each of our segments with respect to each of the last three years, total assets of each of our segments with respect to each of the last two years, and our revenues and assets attributable to the United States and the United Kingdom and all other foreign countries,for the last three years, see Note 19—17 - Segment Information of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data.technology in all types of projects.technology. For these reasons, buildings need 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 substantial environmental controls within a building, due to the heightened need for climate control to maintain extensive computer systems at optimal temperatures, and the demand for energy savings and environmental control in individual spaces have over the years expanded opportunities for our electrical and mechanical services businesses. The demand for these services is typically driven by non-residential construction and renovation activity.industrialmanufacturing and commercial buildings and institutional and public works projects 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.52%53% of our 20112013 revenues, approximately 67% of which revenues of approximately 65% were related to new construction and approximately 35%33% of which were related to renovation and retrofit projects. Our United Kingdom electrical and mechanical construction services operations accounted for approximately 4%2% of our 20112013 revenues, approximately 46% of which revenues of approximately 54% were related to new construction and approximately 46%54% of which were related to renovation and retrofit projects. However, in mid-2013, we announced our decision to end our construction operations in the United Kingdom due to recurring losses over the last several years and our negative assessment of construction market conditions in the United Kingdom. We plan to focus in the United Kingdom solely on building services.usepurposes (such as watereducational and wastewater treatment facilities, hospitals, correctional facilities and research laboratories); (b) for industrial usemanufacturing purposes (such as pharmaceutical plants, steel, pulp and paper mills, chemical, food, automotive and semiconductor manufacturing facilities and oil refineries)power generation); (c) for transportation projectspurposes (such as highways, airports and transit systems); (d) for commercial usepurposes (such as office buildings, data centers, hotels, casinos, convention centers, sports stadiums, shopping malls and resorts); and (e) for power generationhospitality purposes (such as hotels and energy management projects.casinos); (f) for water and wastewater purposes; and (g) for healthcare purposes. Our largest projects, which typically range in size from $10.0 million up to and occasionally exceeding $150.0 million and are frequently multi-year projects, represented approximately 31%33% of our worldwide construction services revenues in 2011.69%67% of our 2011 electrical and mechanicalworldwide construction services revenues.revenues in 2013. These projects are typically completed in less than one year. They usually involve electrical and mechanical construction services when an end-user or owner undertakes construction or modification of a facility to accommodate a specific use. These projects frequently require electrical and mechanical systems to meet special needs such as critical systems power supply, fire protection systems, special environmental controls and high-purity air systems, sophisticated electrical and mechanical systems for data centers, 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’scustomer's plant or office layout in the normal course of a customer’scustomer's business.facilities services operations provide facilities services to a wide range of commercial, industrial, utility, institutional and governmental facilities.These facilities services, which generated approximately 44% of our 2011 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. Of our 2011 facilities services revenues, approximately 88% were generated in the United States and approximately 12% were generated in the United Kingdom.Our facilities services operations have built on our traditional electrical and mechanical services operations, facilities services activities of our electrical and mechanical contracting subsidiaries, and our client relationships, as well as acquisitions, to expand the scope of services being offered and to develop packages of services for customers on a regional and national basis.Our United States facilitiesbuilding services segment offers a broad range of facilities services, including operation, maintenance and service of electrical and mechanical systems; industrialcommercial and government site-based operations and maintenance; facility maintenance and services, including outage services to utilities and industrial plants; commercial and government site-based operations and maintenance;manufacturing facilities; military base operations support services; mobile mechanical maintenance and services; floor care and janitorial services; landscaping, lot sweeping and snow removal; facilities management; vendor management; call center services; installation and support for building systems; program development, management and maintenance with respect to energy systems; technical consulting and diagnostic services; infrastructure and building projects for federal, state and local governmental agencies and bodies; small modification and retrofit projects; and retrofit projects to comply with clean air laws.facilitiesbuilding services is often driven by customers’customers' decisions to focus on their own core competencies, customers’customers' programs to reduce costs, 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 electrical and mechanical 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’scustomer's core business. Clients of our facilitiesbuilding services business include the federal government,and state governments, utilities, independent power producers, refineries, pulp and paper producers and major corporations engaged in information technology, telecommunications, pharmaceuticals, petrochemicals, financial services, publishing and other manufacturing, and large retailers and other businesses with multiple locations throughout the United States or regions of the country.facilitiesbuilding services in a majority of the states in the United States to commercial, industrial, institutional and governmental customers and as part of our operations are responsible for: (a) the oversight of all or most of the facilities operations of a business, including operation and maintenance; (b) the oversight of logistical processes; (c) servicing, upgrade and retrofit of HVAC, electrical, plumbing and industrial piping and sheet metal systems in existing facilities; (d)(c) interior and exterior services, including floor care and janitorial services, landscaping, lot sweeping and snow removal; (e)(d) diagnostic and solution engineering for building systems and their components; (f)and (e) maintenance and support services to manufacturers and power producers; and (g) services for refineries and petrochemical plants.facilitiesbuilding services at a number of preeminent buildings, including those that house the Secret Service, theThe Federal Deposit Insurance Corporation, the World Bank, the National Foreign Affairs Training Center, and the Department of Health and Human Services.Services, as well as other government facilities including the NASA Jet Propulsion Laboratory in Pasadena, California. We also provide facilitiesbuilding services to a number of military bases, including base operations support services to the Navy National Capital Region and the Army's Fort Huachuca, Arizona, and are also involved in joint ventures providing facilitiesbuilding services to the Naval Base Kitsap in the State of Washington. The agreements pursuant to which this division provides services to the federal government are frequently for a term of five years, are subject to renegotiation of terms and prices by the government, and are subject to termination by the government prior to the expiration of the term, and non-renewal.As part of our facilities services operations, we also provide aftermarket maintenance and repair services for highly engineered shell and tube heat exchangers for refineries and the petrochemical industry both at facilities and in the field. These services are tailored to meet customer needs for scheduled turnarounds or specialty callout service.also has a division thatprimarily focuses on facilities services. This divisionbuilding services and currently provides a broad range of facilities services under multi-year agreements to public and private sector customers, including airlines, airports, real estate property managers, manufacturers and governmental agencies. both our construction services, building services and facilitiesindustrial services businesses, we compete with national, regional and local companies, many of which are small, owner-operated entities that carry on their businesses in a limited geographic area.business isbusinesses are highly fragmented and our competition includes thousands of small companies across the United States and aroundStates. In the world. However,United States, there are a few United States based public companies focused on providing either electrical and/or mechanical construction services, such as Integrated Electrical Services, Inc., Comfort Systems USA, Inc. and Tutor Perini Corporation. A majority of our revenues are derived from projects requiringfacilitiesbuilding services business is also highly fragmented with most competitors operating in a specific geographic region, a number of large United States based corporations such as AECOM Technology Corporation, Johnson Controls, Inc., Fluor Corp., UNICCO Service Company,J&J Worldwide Services, DTZ, the Washington Division of URS Corporation, CB Richard Ellis, Inc., Jones Lang LaSalle and ABM Facility Services are engaged in this field, as are large original equipment manufacturers such as Carrier Corp. and Trane Air Conditioning. In addition, we compete with several regional firms serving all or portions of the markets we target, such as FM Facility Maintenance, Bergensons Property Services, Inc., SMS Assist, LLC and Ferandino & Sons, Inc. With respect to our industrialOur principal services operations, we are a leading North American provider of aftermarket maintenancecompetitors in the United Kingdom include ISS UK Ltd. and repair services for highly engineered shell and tube heat exchangers.MITIE Group plc. The key competitive factors in the facilitiesbuilding services business include price, service, quality, technical expertise, geographic scope and the availability of qualified personnel and managers. Due to our size, both financial and geographic, and our technical capability and management experience, we believe we are in a strong competitive position in the facilitiesbuilding services business.2011,2013, we employed over 25,00027,000 people, approximately 61%57% of whom are represented by various unions pursuant to more than 400375 collective bargaining agreements between our individual subsidiaries and local unions. We believe that our employee relations are generally good. Only two of these collective bargaining agreements are national or regional in scope.We hadas ofat December 31, 2011 of approximately $3.32013 was $3.36 billion compared withto $3.37 billion of backlog of approximately $3.1 billion as ofat December 31, 2010, excluding backlog from our Canadian subsidiary, which we sold in August 2011.2012. Backlog increases with awards of new contracts and decreases as we perform work on existing contracts. Backlog is not a term recognized under United States generally accepted accounting principles; however, it is a common measurement used in our industry. We include a project within our backlog at such time as a contract is awarded. 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. However, we do not include in backlog contracts for which we are paid on a time and material basis, and 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 the next 12 months of revenues.SEC’sSEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC’s public reference roomSEC's Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.and a nominating and corporate governance committee and a risk oversight committee. Each of these committees has a formal charter. 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 from our web site, www.emcorgroup.com.“Management’s“Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk” sections. If any of the following risks actually occur, our business, financial condition andposition, results of operations and/or cash flows could be adversely affected, and we may not be able to achieve our goals. Such events may cause actual results to differ materially from expected and historical results, and the trading price of our common stock could decline.The economic downturn has leadEconomic downturns have led to a reductionreductions in demand for our services. Negative conditions in the credit markets may continue to adversely impact our ability to operate our business.The level of demand from our clients for our services has been, and will likely continue to be,in the past, adversely impacted by the downturnslowdowns in the industries we service, as well as in the economy in general. AsWhen the general level of economicslowed,been reduced from historical levels, certain of our ultimate customers have delayed or cancelled and may continue to delay or cancel, projects or capital spending, especially with respect to more profitable private sector work, and this downturn hassuch slowdowns adversely affectedaffect our ability to continue to grow, and has resulted in a reduction in our revenues and profitability, and is likely to continue to adversely affectreducing our revenues and profitability. A number of economic factors, including financing conditions for the industries we serve, have, in the past, adversely affected and may continue to adversely affect, our ultimate customers and their ability or willingness to fund expenditures in the future or pay for past services.expenditures. General concerns about the fundamental soundness of domestic and foreign economies have caused and may continue to cause ultimate customers to defer projects even if they have credit available to them. Continuation or further worseningWorsening of financial and macroeconomic conditions could have a significant adverse effect on our revenues and profitability.TheAt times, tightened availability of credit has negatively impacted the ability of existing and prospective ultimate customers to fund projects we might otherwise perform, particularly those in the more profitable private sector. As a result, certainour ultimate customers have deferred and others may defer such projects for an unknown, and perhaps lengthy, period. SuchAny such deferrals have inhibitedwould inhibit our growth and would adversely affectedaffect our results of operations and are likely to continue to have an adverse impact on our results of operations.customers’customers' access to the credit markets. If clients delay in paying or fail to pay a significant amount of our outstanding receivables, or we fail to successfully negotiate a significant portion of our change orders and/or claims with clients, it could have an adverse effect on our liquidity, results of operations and financial condition.clients’clients' markets and investment decisions. Our business has traditionally lagged recoveries in the general economy and, therefore, may not recover as quickly as the economy at large.currentsignificant delays and reductions in government appropriations. Federal legislation adopted in 2013 aimed at curtailing spending by federal agencies and departments and reducing the federal budget deficits.Significantdeficit has resulted in federal governmental agencies or departments deferring or canceling projects that we might otherwise have sought to perform. We expect that budgetary constraints and ongoing concerns regarding the U.S. national debt will continue to place downward pressure on spending levels of the U.S. government. In addition, significant budget deficits faced by the federal, state and local governments as a result of declining tax and other revenues may result in their curtailment of future spending onexpenditures, from which expenditures someexpenditures. Some of our businesses derive a significant portion of revenue. In addition, recenttheir revenues from federal, legislation aimed at curtailing spending by federal agenciesstate and departments may result in thoselocal governmental bodies deferring or canceling projects that we might otherwise seek to perform.bothall of our construction and facilities services operations. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of over 8,0008,500 vehicles. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable. Additionally, our fixed price contracts do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to projects in progress.such projects.facilitiesbuilding services. Many of our customers employ personnel who perform some of the same types of facilitiesbuilding services that we do. We cannot be certain that our existing or prospective customers will continue to outsource facilitiesbuilding services in the future.customers’customers' needs, it necessarily places significant control and decision-making powers in the hands of local management. This presents various risks, including the risk that we may be slower or less able to identify or react to problems affecting a key business than we would in a more centralized environment.As a result, weHowever, the absence of snow in the United States during the winter could cause us to experience reduced revenues.revenues in our United States building services segment, which has meaningful snow removal operations. In addition, cooler than normal temperatures during the summer months could reduce the need for our services, particularly in our businesses that provide or service air conditioning units, and warmer than normal temperatures during the winter months would also reduce the need for our services, and we may experienceresult in reduced revenues and profitability during the period such unseasonal weather conditions persist.facilitiesbuilding services contracts for governmental and non-governmental entities, may be canceled on short notice, and we may be unsuccessful in replacing such contracts if they are canceled or as they are completed or expire.We could experience a decrease in revenues, net income and liquidity if any of the following occur:2011,2013, approximately 61%57% of our employees were covered by collective bargaining agreements. Although the majority of these agreements prohibit strikes and work stoppages, we cannot be certain that strikes or work stoppages will not occur in the future. However, only two of our collective bargaining agreements are national or regional in scope, and not all of our collective bargaining agreements expire at the same time. Strikes or work stoppages would adversely impact our relationships with our customers and could have a material adverse effect on our financial condition,position, results of operations and cash flows. We contribute to over 175200 multiemployer union pension plans based upon wages paid to our union employees that could result in our being responsible for a portion of the unfunded liabilities under such plans. Our potential liability for unfunded liabilities could be material. Under the Employee Retirement Income Security Act, we may become liable for our proportionate share of a multiemployer pension plan’splan's underfunding, if we cease to contribute to that pension plan or significantly reduce the employees in respect of which we make contributions to that pension plan. See Note 16—14 - Retirement Plans of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data for additional information regarding multiemployer plans.20112013 accounted for 9%7% of our revenues. Our reported financial conditionposition and results of operations are exposed to the effects (both positive and negative) that fluctuating exchange rates have on the process of translating the financial statements of our United Kingdom operations, which are denominated in local currencies, into the U.S. dollar.conditionposition and results of operations, although certain of these costs might be covered by insurance. In some instances, we have obtained indemnification or covenants from third parties (including predecessors or lessors) for such clean-up and other obligations and liabilities that we believe are adequate to cover such obligations and liabilities. However, such third-party indemnities or covenants may not cover all of such costs or third-party indemnitors may default on their obligations. In addition, unanticipated obligations or liabilities, or future obligations and liabilities, may have a material adverse effect on our business operations. Further, we cannot be certain that we will be able to identify, or be indemnified for, all potential environmental liabilities relating to any acquired business.condition.position. We are a party to lawsuits and other legal proceedings, most of which areoccur in the normal course of our business. Litigation and other legal proceedings can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of a particular legal proceeding could have a material adverse effect on our business, operating results, financial condition,position, and in some cases, on our reputation or our ability to obtain projects from customers, including governmental entities. See Item 3. Legal Proceedings and Note 15 - Commitments and Contingencies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, for more information regarding legal proceedings in which we are involved.facilitiesbuilding services segment, management’smanagement's focus associated with the start-up and bidding process may be diverted away from other opportunities. If we are to be successful in being awarded additional government contracts, a significant amount of costs could be required before any revenues are realized from these contracts. In addition, as a government contractor we are subject to a number of procurement rules and other regulations, any deemed violation of which could lead to fines or penalties or a loss of business. Government agencies routinely audit and investigate governmentcontractor’scontractor's performance under its contracts, cost structure and compliance with applicable laws, regulations and standards. If government agencies determine through these audits or reviews that costs are improperly allocated to specific contracts, they will not reimburse the contractor for those costs or may require the contractor to refund previously reimbursed costs. If government agencies determine that we are engaged in improper activity, we may be subject to civil and criminal penalties and debarment or suspension from doing business with the government. Government contracts are also subject to renegotiation of profit by the government, termination by the government prior to the expiration of the term and non-renewal by the government.Surety market conditions have in recent years become more difficult due to the economy and the regulatory environment. Consequently, less overall bonding capacity is available in the market than in the past, and surety bonds have become more expensive and restrictive. Further, under Under standard terms in the surety market, surety companies issue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as a condition to issuing any bonds.sureties’sureties' assessment of our or their own operating and financial risk, could cause our surety companies to decline to issue, or substantially reduce the amount of, bonds for our work and could increase our bonding costs. These actions can be taken on short notice. If our surety companies were to limit or eliminate our access to bonding, our alternatives would include seeking bonding capacity from other surety companies, increasing business with clients that do not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash. We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all. Accordingly, if we were to experience an interruption or reduction in the availability of bonding, capacity, we may be unable to compete for or work on certain projects.workers’workers' compensation and employee group health, these policies do not cover all possible claims and certain of the policies are subject to large deductibles. Accordingly, we are effectively self-insured for a substantial number of actual and potential claims. In addition, if any of our insurance carriers defaulted on its obligations to provide insurance coverage by reason of its insolvency or for other reasons, our exposure to claims would increase and our profits would be adversely affected. Our estimates for unpaid claims and expenses are based on known facts, historical trends and industry averages, utilizing the assistance of an actuary. We reflect these liabilities in our balance sheet as “Other accrued expenses and liabilities” and “Other long-term obligations.” The determination of such estimated liabilities and their appropriateness are reviewed and updated at least quarterly. However, these liabilities are difficult to assess and estimate due to many relevant factors, the effects of which are often unknown, including the severity of an injury or damage, the determination of liability in proportion to other parties, the timeliness of reported claims, the effectiveness of our risk management and safety programs and the terms and conditions of our insurance policies. Our accruals are based upon known facts, historical trends and our reasonable estimate of future expenses, and we believe such accruals are adequate. However, unknown or changing trends, risks or circumstances, such as increases in claims, a weakening economy, increases in medical costs, changes in case law or legislation or changes in the nature of the work we perform, could render our current estimates and accruals inadequate. In such case, adjustments to our balance sheet may be required and these increased liabilities would be recorded in the period that the experience becomes known. Insurance carriers may be unwilling, in the future, to provide our current levels of coverage without a significant increase in insurance premiums and/or collateral requirements to cover our obligations to them. Increased collateral requirements may be in the form of additional letters of credit, and an increase in collateral requirements could significantly reduce our liquidity. If insurance premiums increase, and/or if insurance claims are higher than our estimates, our profitability could be adversely affected.andand/or not award us future business.management’smanagement's attention from our existing business, the failure to retain key personnel or customers of anthe acquired business, the assumption of unknown liabilities of the acquired business for which there are inadequate reserves and the potential impairment of acquired identifiable intangible assets, including goodwill. Our ability to sustain our growth and maintain our competitive position may be affected by our ability to identify and acquire desirable businesses and successfully integrate any businessesbusiness acquired.“Intangibles—Goodwill“Intangibles-Goodwill and Other” (“ASC 350”) provides that goodwill and other identifiable intangible assets that have indefinite useful lives not be amortized, but instead must be tested at least annually for impairment, and identifiable intangible assets that have finite useful lives should continue to be amortized over their useful lives and be tested for impairment whenever facts and circumstances indicate that the carrying values may not be fully recoverable. ASC 350 also provides specific guidance for testing goodwill and other non-amortized identifiable intangible assets for impairment, which we test annually each October 1. ASC 350 requires management to make certain estimates and assumptions to allocate goodwill to reporting units and to determine the fair value of reporting unit net assets and liabilities. Such fair value is determined using discounted estimated future cash flows. Our development of the present value of future cash flow projections is based upon assumptions and estimates by management from a review of our operating results, business plans, anticipated growth rates and margins and the weighted average cost of capital, among others. Much of the information used in assessing fair value is outside the control of management, such as interest rates, and these assumptions and estimates can change in future periods. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset impairment testing will prove to be accurate predictions of the future. If our assumptions regarding business plans or anticipated growth rates and/or margins are not achieved, or there is a rise in interest rates, we may be required to record goodwill and/or identifiable intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing on October 1, 20122014 or earlier, if an indicator of an impairment is present prior to the quarter in which the annual goodwill impairment test is to be performed. It is not possible at this time to determine if any such additional impairment charge would result or, if it does, whether such a charge would be material to our results of operations.The annual impairment review of our indefinite lived intangible assets for the year ended December 31, 2011 resulted in a $3.8 million non-cash impairment charge as a result of a change in the fair value of various trade names and customer relationships associated with certain prior acquisitions reported within our United States facilities services segment. 2011. of the contracts in our backlog do not require the purchase of a minimum amount of services. In addition, many contracts are subject to cancellation or suspension on short notice at the discretion of the client, and the contracts in our backlog are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to the contract. We have historically experienced variances in the components of backlog related to project delays or cancellations resulting from weather conditions, external market factors and economic factors beyond our control, and we may experience more delays or cancellations in the future than in the past due to the current economic slowdown.future. The risk of contracts in backlog being cancelled or suspended generally increases during periods of widespread slowdowns. Accordingly, there is no assurance that backlog will actually be realized. If our backlog fails to materialize, we could experience a reduction in revenues and a decline in profitability, which could result in a deterioration of our financial conditionposition and liquidity.Recognition—Construction-TypeRecognition-Construction-Type and Production-Type Contracts”. See Application of Critical Accounting Policies in Item 7. Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations. Under the percentage-of-completion method of accounting, we record revenue as work on the contract progresses. The cumulative amount of revenues recorded on a contract at a specified point in time is that percentage of total estimated revenues that costs incurred to date bear to estimated total costs. Accordingly, contract revenues and total cost estimates are reviewed and revised as the work progresses. Adjustments are reflected in contract revenues in the period when such estimates are revised. Estimates are based on management’smanagement's reasonable assumptions and experience, but are only estimates. Variations of actual results from assumptions on an unusually large project or on a number of average size projects could be material. We are also required to immediately recognize the full amount of the estimated loss on a contract when estimates indicate such a loss. Such adjustments and accrued losses could result in reduced profitability, which could negatively impact our cash flow from operations.discontinueterminate their contracts with us at any time. A loss of business from a significant client could have a material adverse effect on our business, financial condition,position, and results of operations.restrictlimit the right of our stockholders to call a special meeting of stockholders and to act by written consent; and Approximate
Square Feet Lease
Expiration Date,
Unless Owned 67,560 8/31/ 202020 105,000 7/31/ 162016 (c)(a) 57,863 9/30/14825 Howe RoadMartinez, California (c)109,795 12/31/ 122019 (a)(d) 66,246 12/31/ 162016 (a)(c) 119,560 7/31/ 192017 77,553 2/28/ 142015 (c)(a) 63,000 Owned (c)(a) 56,551 7/31/ 172017 175,000 1406 West Cardinal CourtUrbana, Illinois (b) 161,9569/30/127/31/2023 144,695 136,695 10/31/ 182018 (c)(a) 57,765 6/30/ 142019 (a)(d) 90,000 Owned (a)(d) 112,000 Owned (c)(a)72,813 253,291 2/28/ 212021 76,380 7/31/ 212026 (c)(a) 55,891 1/31/ 16201655,944 9/30/2015 91,831 11/1/ 172017 (a)(c)93,000 103,000 9/ 12/2130/2021 66,000 9/30/ 122016 (a)(c) 53,618 4/30/ 182018 (a)(d) 78,962 Owned (a)(d) 75,000 Owned (a)(d) 57,000 Owned Approximate
Square Feet Lease
Expiration Date,
Unless Owned
Houston, Texas (b)97,936 157,544 12/31/ 142014 (a)(d) 78,000 Owned 1574 West Temple(c)(a)58,339 120,904Month-To-Month2455 West 1500 SouthSalt Lake City, Utah (c)58,3394/30/18670 and 686 Truman AvenueRichland, Washington (b)56,5678/3/31/162018 17—15 - Commitments and Contingencies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data for additional information regarding lease costs. We utilize substantially all of our leased or owned facilities and believe there will be no difficulty either in negotiating the renewal of our real property leases as they expire or in finding alternative space, if necessary.(a) (b) (c) electrical construction and facilitiesbuilding services” segment.(d) Principally used by a company engaged in the “United States industrial services” segment. materiallymaterial adverse effect on our financial position, results of operations or liquidity. Litigation is subject to many uncertainties and the outcome of litigation is not predictable with assurance. It is possible that some litigation matters for which reserves have not been established could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial position, results of operations or liquidity.As previously disclosed in our Form 10-Q for the quarterly period ended September 30, 2011, a subsidiaryCompany occasionally performs maintenance work at mines covered by the Federal Mine SafetyDodd-Frank Wall Street Reform and HealthConsumer Protection Act and Item 104 of 1977 (“MSHA”). On August 9, 2010, the subsidiary received three citations claiming the occurrenceRegulation S-K (17 CFR 229.104) is included in Exhibit 95 to this Form 10-K.47;49; President since October 25, 2004 and Chief Executive Officer since January 3, 2011. From October 25, 2004 to January 2, 2011, Mr. Guzzi served as Chief Operating Officer of the Company. 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 after-market services and components of its own products and those of other manufacturers in both the HVAC and refrigeration industries. Mr. Guzzi is also a member of our Board of Directors.72;74; 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.53;55; Executive Vice President—SharedPresident-Shared Services of the Company since December 2007 and Senior Vice President—SharedPresident-Shared Services from June 2003 to December 2007. From April 1996 to June 2003, Mr. Matz served as Vice President and Treasurer of the Company and Staff Vice President—FinancialPresident-Financial Services of the Company from March 1993 to April 1996.47;49; Executive Vice President and Chief Financial Officer of the Company since April 3, 2006. From June 2003 to April 2, 2006, Mr. Pompa was Senior Vice President—ChiefPresident-Chief Accounting Officer of the Company, and from June 2003 to January 2007, Mr. Pompa was also Treasurer of the Company. From September 1994 to June 2003, Mr. Pompa was Vice President and Controller of the Company.REGISTRANT’SREGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES High Low $ 32.75 $ 28.23 $ 31.92 $ 28.03 $ 30.86 $ 18.25 $ 27.12 $ 18.91 High Low $ 27.95 $ 22.06 $ 29.80 $ 22.93 $ 27.69 $ 22.29 $ 29.92 $ 24.15 2013 High Low First Quarter $ 42.69 $ 34.42 Second Quarter $ 42.34 $ 35.58 Third Quarter $ 43.98 $ 37.19 Fourth Quarter $ 42.61 $ 36.26 2012 High Low First Quarter $ 30.91 $ 26.32 Second Quarter $ 30.52 $ 25.68 Third Quarter $ 30.52 $ 25.32 Fourth Quarter $ 34.95 $ 27.91 21, 2012,20, 2014, there were approximately 122151 stockholders of record and, as of that date, we estimate there were approximately 40,65030,769 beneficial owners holding our common stock in nominee or “street” name.On September 26, 2011,We have paid quarterly dividends since October 25, 2011. During 2012, we announced our plans to paypaid a regular quarterly dividend of $.05$0.05 per common share, and on December 7, 2012, our Board of Directors declared a special dividend of $0.25 per share, payable in December 2012, and announced its intention to increase the regular quarterly dividend to $0.06 per share. WeIn addition, at the December 7, 2012 meeting of our Board of Directors, the regular quarterly dividend that would have been paid in January 2013 was declared, its amount increased to $0.06 per share and its payment date accelerated to December 28, 2012. During 2013, we paid a regular quarterly dividend of $.05$0.06 per common share on October 25, 2011in the second, third and on January 31, 2012. Priorfourth quarters of 2013. In December 2013, our Board of Directors announced its intention to October 25, 2011, no cashincrease the regular quarterly dividend to $0.08 per share commencing with the dividend to be paid in the first quarter of 2014. We expect that such quarterly dividends had beenwill be paid onin the Company’s common stock.foreseeable future. Our revolving credit facility limitsagreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of the credit facility currentlyagreement materially limit our ability to pay a quarterly dividend of $.05$0.08 per share for the foreseeable future.2011,2013, certain information regarding equity compensation plans that were approved by stockholders and equity compensation plans that were not approved by stockholders. The information in the table and in the Notes thereto has been adjusted for 2-for-1 stock splits effected on July 9, 2007 and February 10, 2006.splits. Equity Compensation Plan Information A B C Number of Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants and Rights Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column A) 2,555,224 $ 14.22 (1) 2,805,494 (2) 1,331,136 (3) $ 11.78 — 3,886,360 $ 13.39 2,805,494 Equity Compensation Plan Information A B C Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A) Equity Compensation Plans Approved by Security Holders 1,917,081 $ 12.03 2,247,362 Equity Compensation Plans Not Approved by Security Holders 71,000 $ 9.67 — Total 1,988,081 $ 11.94 2,247,362 (1) 328,051677,384 restricted stock units issued pursuant to our Long-Term Incentive Plan, 80,000 restricted stock units issued to Mr. Guzzi and 77,768 restricted stock units issuedawarded to our non-employee directors.directors and employees. The weighted average exercise price would have been $17.56$18.60 had the weighted average exercise price calculation excluded such restricted stock units.(2) (3) 1,315,136 shares relate to outstanding options to purchaseRepresents shares of our common stock which were granted to our executive officers (the “Executive Options”) and 16,000 shares relate to outstandingthat may be issued upon the exercise of options to purchase shares of our common stock, which were granted to our Directors (the “Director Options”). The following Certain stock options, which have been adjusted for two 2-for-1 stock splits, one effected on July 9, 2007 and the other on February 10, 2006, were awarded pursuant to equityan individual compensation programs that were not approved by stockholders.Executive Options1,209,136 of the Executive Options referred to in note (3) to the Table were granted to six of our then executive officers in connectionarrangement with employment agreements with us, which employment agreements were dated January 1, 2002 (the “2002 Employment Agreements”) and have since expired, and 106,000 of the Executive Options were granted to Mr. Anthony Guzzi, our President and Chief Executive Officer, when he first joined us in October 2004. Of these Executive Options, (i) an aggregate of 439,544 of such Executive Optionsthe Company, that were granted on January 2, 2003 with an exercise price of $13.69 per share, (ii) an aggregate of 769,592 of such Executive Options were granted on January 2, 2004 with an exercise price of $10.96 per share and (iii) 106,000 of such Executive Optionsnot approved by stockholders. These options were granted to Mr. Anthony Guzzi on October 25, 2004 withand have an exercise price of $9.67 per share.Each of the Executive Options granted The options have a term of ten years from their respective grant dates,date, an exercise price per share equal to the fair market value of a share of common stock on their respective grant dates,date, and are currently exercisable.Director OptionsDuring 2002, each of our non-employee directors who then served as a director received 8,000 Director Options. These options were in addition to the 12,000 options to purchase our common stock that were granted on June 19, 2002 to each such non-employee director under our 1995 Non-Employee Directors’ Non-Qualified Stock Option Plan, which plan had been approved by our stockholders. The price at which such Director Options are exercisable is equal to the fair market value per share of common stock on the grant date. The exercise price per share of the Director Options is $13.88 per share, except those granted to Mr. Michael T. Yonker, upon his election to the Board on October 25, 2002, which have an exercise price of $12.94 per share. All of these options became exercisable commencing with the grant date and have a term of ten years from the grant date.as of December 31, 2011, certain information regarding purchasesrepurchases of our common stock made during the quarter ended December 31, 2013 by us or any affiliated purchaser:Period Total Number of
Shares Purchased(1) Average Price
Paid Per Share
of Publicly Announced
Plans or Programs 293,556 $ 19.70 293,556 $94,208,512 905,844 $ 23.96 905,844 $72,476,506 None None None $72,476,506 Period 82,486 $37.24 82,486 $40,492,572 484,042 $37.15 484,042 $22,495,025 None None None $122,495,025 (1) the Companyus to repurchase up to $100.0 million of itsour outstanding common stock, and on December 31, 2013, there remained authorization for us to repurchase approximately $22.5 million of our shares under that authorization. On December 5, 2013, we announced that our Board of Directors had authorized us to repurchase up to an additional $100.0 million of our outstanding common stock. TheAs a result, $122.5 million was available for repurchase program remains in effect.as of December 31, 2013. No other shares have been repurchased since the program hasprograms have been announced other than pursuant to thisthese publicly announced program.programs. Acquisitions under our repurchase programprograms may be made from time to time as permitted by securities laws and other legal requirements.inour previously filed annual reports on Form 10-K of EMCOR.3—3 - Acquisitions of Businesses and Note 4—4 - Disposition of Assets of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data for a discussion regarding acquisitions and dispositions. The results of operations for all periods presented reflect discontinued operations accounting due to the disposition of our interest in our Canadian subsidiary in August 2011 and the disposition of our interest in a consolidated joint venture in 2007. Years Ended December 31, 2011 2010 2009 2008 2007 $ 5,613,459 $ 4,851,953 $ 5,227,699 $ 6,360,695 $ 5,545,159 733,949 693,523 784,225 845,707 667,515 3,795 246,081 13,526 — — 210,793 (26,528 ) 250,122 291,693 193,033 $ 130,826 $ (86,691 ) $ 160,756 $ 182,204 $ 126,808 $ 1.82 $ (1.30 ) $ 2.31 $ 2.64 $ 1.81 0.14 (0.01 ) 0.13 0.15 0.16 $ 1.96 $ (1.31 ) $ 2.44 $ 2.79 $ 1.97 $ 1.78 $ (1.30 ) $ 2.25 $ 2.57 $ 1.75 0.13 (0.01 ) 0.13 0.14 0.15 $ 1.91 $ (1.31 ) $ 2.38 $ 2.71 $ 1.90 As of December 31, 2011 2010 2009 2008 2007 $ 1,245,131 $ 1,162,845 $ 1,226,466 $ 1,050,769 $ 891,734 3,014,076 2,755,542 2,981,894 3,030,443 2,887,000 566,805 406,804 593,628 582,714 563,918 150,000 150,000 — — — — — 194,750 197,750 225,000 — 24 — 41 93 $ 4,857 $ 1,649 $ 601 $ 2,313 $ 2,151 Years Ended December 31, 2013 2012 2011 2010 2009 Revenues $ 6,417,158 $ 6,346,679 $ 5,613,459 $ 4,851,953 $ 5,227,699 Gross profit 813,058 806,354 733,949 693,523 784,225 Impairment loss on goodwill and identifiable intangible assets — — 3,795 246,081 13,526 Operating income (loss) 210,292 249,967 210,793 (26,528 ) 250,122 Net income (loss) attributable to EMCOR Group, Inc. $ 123,792 $ 146,584 $ 130,826 $ (86,691 ) $ 160,756 Basic earnings (loss) per common share: From continuing operations $ 1.85 $ 2.20 $ 1.82 $ (1.30 ) $ 2.31 From discontinued operations — — 0.14 (0.01 ) 0.13 $ 1.85 $ 2.20 $ 1.96 $ (1.31 ) $ 2.44 Diluted earnings (loss) per common share: From continuing operations $ 1.82 $ 2.16 $ 1.78 $ (1.30 ) $ 2.25 From discontinued operations — — 0.13 (0.01 ) 0.13 $ 1.82 $ 2.16 $ 1.91 $ (1.31 ) $ 2.38 2013 2012 2011 2010 2009 $ 1,479,626 $ 1,357,179 $ 1,245,131 $ 1,162,845 $ 1,226,466 Total assets 3,465,915 3,107,070 3,014,076 2,755,542 2,981,894 Goodwill 834,825 566,588 566,805 406,804 593,628 Borrowings under revolving credit facility — 150,000 150,000 150,000 — Term loan, including current maturities 350,000 — — — 194,750 Other long-term debt, including current maturities 11 18 — 24 — Capital lease obligations, including current maturities $ 4,652 $ 5,881 $ 4,857 $ 1,649 $ 601 (1) On September 26, 2011,We have paid quarterly dividends since October 25, 2011. During 2012, we announced our plans to paypaid a regular quarterly dividend of $.05$0.05 per common share, and on December 7, 2012, our Board of Directors declared a special dividend of $0.25 per share, payable in December 2012, and announced its intention to increase the regular quarterly dividend to $0.06 per share. WeIn addition, at the December 7, 2012 meeting of our Board of Directors, the regular quarterly dividend that would have been paid in January 2013 was declared, its amount increased to $0.06 per share and its payment date accelerated to December 28, 2012. During 2013, we paid a regular quarterly dividend of $.05$0.06 per common share on October 25, 2011in the second, third and on January 31, 2012.fourth quarters of 2013. In December 2013, our Board of Directors announced its intention to increase the regular quarterly dividend to $0.08 per share commencing with the dividend to be paid in the first quarter of 2014. Prior to October 25, 2011, no cash dividends had been paid on the Company’sCompany's common stock.MANAGEMENT’SMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSStates, the United KingdomStates. In addition, we provide a number of building services and in the world. We provideindustrial services. Our services are provided to a broad range of commercial, industrial, utility and institutional customers through approximately 70 operating subsidiaries and joint venture entities. Our offices are located in the United States and the United Kingdom. We had conducted business in Canada through an indirect wholly owned subsidiary and in the Middle East through a joint venture.subsidiary. We sold our interestCanadian subsidiary in August 2011.Canadian operationsinternal reporting structure and the information used by management to make operating decisions and assess performance, we created a new segment that includes RSI and certain businesses that had been part of our United States facilities services segment. The new segment is called the United States industrial services segment and the segment formerly named the United States facilities services segment has been renamed the United States building services segment.August 2011all periods presented to reflect the changes in our segments referred to above. The segment formally named the United Kingdom construction and our interest infacilities services segment has been renamed the Middle East joint venture in June 2010.TheUnited Kingdom construction and building services segment. In addition, the results of operations for all periods presented reflect: (a) discontinued operations accounting due to the disposition in August 2011 of our interest in our Canadian subsidiary in August 2011 and (b) certain reclassifications of prior period amounts from our United States building services segment to conformour United States mechanical construction and facilities services segment due to current year presentation.2011, 20102013 and 20092012 (in millions,thousands, except percentages and per share data): 2011 2010 2009 $ 5,613.5 $ 4,852.0 $ 5,227.7 15.7 % (7.2 )% (17.8 )% $ 3.8 $ 246.1 $ 13.5 $ 210.8 $ (26.5 ) $ 250.1 3.8 % (0.5 )% 4.8 % $ 130.8 $ (86.7 ) $ 160.8 $ 1.78 $ (1.30 ) $ 2.25 $ 149.4 $ 69.5 $ 360.8 2011 was a year in which 2013 2012 Revenues $ 6,417,158 $ 6,346,679 Revenues increase from prior year 1.1 % 13.1 % Operating income $ 210,292 $ 249,967 Operating income as a percentage of revenues 3.3 % 3.9 % Income from continuing operations $ 127,354 $ 148,886 Net income attributable to EMCOR Group, Inc. $ 123,792 $ 146,584 Diluted earnings per common share from continuing operations $ 1.82 $ 2.16 continuedmade two strategic decisions to reposition EMCOR by adding three companies to our portfolio, which extendedposition ourselves for long-term growth and improved profitability. We completed the acquisition of RSI during the third quarter of 2013. This acquisition will expand and further strengthenedstrengthen our service offerings to new and existing customers. Additionally duringcustomers and enhance our position within the year, we sold our operations in Canada, as it was determined that it was no longer a strategic fit. Our results for 2011 demonstrate that we continue to successfully execute our work, taken as whole, on all fronts, despite the pricing challenges posed by the current economic environment and integrating our new acquisitions. We continue to see a very competitive marketplace in which there are a significant number of bidders willing to work at extremely low margins on any given project across all of our businesses. Despite this, we continue to replace our backlog with profitable work that delivers cost effective solutions and value to our customers throughout the United States and United Kingdom.The increase in revenues for 2011 compared to 2010 was primarily attributable to: (a) revenues of approximately $407.1 million generated by companies acquired in 2011 and 2010, which are reported within our United States facilitiesindustrial services and our United States mechanicalenergy market sectors. In addition, due to recurring losses over the last several years from the construction and facilities services segments, (b) an increase in revenues in our United States facilities services segment, excluding revenues attributable to acquisitions in 2011 and 2010, particularly within our industrial services operations as a result of an increase in demand for our services in the refinery and petrochemical markets, and also within our mobile mechanical and government services markets and (c) an increase in revenues from our United Kingdom operations. The results of our United Kingdom operations were also impacted byconstruction and building services segment and our negative assessment of construction market conditions in the effect of favorable exchange ratesUnited Kingdom for the British pound versusforeseeable future, we announced our decision to withdraw from the construction market in the United States dollar.The increase inKingdom.for 2011, whendecreased in 2013 compared to 2010,2012. The increase in 2013 revenues compared to 2012 was primarily a result of: (a)attributable to $133.3 million in revenues from companies acquired in 2013, which are reported in our United States industrial services segment and our United States mechanical construction and facilities services segment. Excluding the impact of these acquisitions, most of our segments reported lower revenues in 2013, with the largest decline in revenues from our United Kingdom construction and building services segment. The decrease in 2013 revenues within the United Kingdom construction and building services segment is due to our decision earlier this year to withdraw from the United Kingdom construction market. These decreases were partially offset by higher operating incomerevenues from our United States electrical construction and facilities services segment and (b) excludingsegment. income from acquisitions in 2011 and 2010, higher operating income from our United States facilities services segment. Acquisitions that are within our United States mechanical construction and facilities services and our United States facilities services segments contributed $3.3 million to operating income, including $12.5 million of amortization expense attributable to identifiable intangible assets included in cost of sales and selling, general and administrative expenses. Operating income and operating margin for 2010in 2013 were adversely impacted by a significant non-cash impairment charge related to goodwill and identifiable intangible assets. The 2011 increasebelow that of 2012 due to: (a) declines in operating income was partiallyoffset by: (a) lowerand operating incomemargin from our United States mechanical construction and facilities services segment, excluding operating income from the 2011 acquisition in this segment, (b) lower operating income from our United Kingdom operations and (c) lower operating income, primarily as a result of $4.7poor performance by one of our subsidiaries at two projects located in the southeastern United States (resulting in aggregate losses of approximately $24.5 million) and (b) operating losses and restructuring expenses of $30.1 million of transaction costs associated with a 2011 acquisitionrelated to the construction operations reported in our United Kingdom construction and higher employment costs withinbuilding services segment. Offsetting this unfavorable performance in 2013 were improved operating results in our United States building services segment. Companies acquired in 2013, which are reported in our United States industrial segment and our United States mechanical construction and facilities services segment. Net cash provided bysegment,activitiesincome, net of $149.4$5.8 million in 2011 increased, when compared to 2010, primarily due to improved operating resultsof amortization expense associated with identifiable intangible assets.changes in our working capital.We acquired three companies during 2011. In June 2011, we acquired USM Services Holdings, Inc. (“USM”), which is a leading provider of facilities maintenance services, and in November 2011, we acquired another company, which provides mobile mechanical services. Both of these companies’its results have been included in our United States facilitiesindustrial services segment since the dates ofits acquisition. In addition, we completed two other acquisitions during 2013, and their respective acquisition. The third company was acquired in January 2011, which primarily provides mechanical construction services, and its results have been included in our United States mechanical construction and facilities services segment since the date of its acquisition.segment. All of these acquisitionsbusinesses expand our service capabilities into new geographic and/or technical areasareas.are not material to ourfacilities services segment has been renamed the United Kingdom construction and building services segment. In addition, the results of operations for all periods presented reflect: (a) discontinued operations accounting due to the periods presented.Indisposition in August 2011 we disposed of our entire interest in our Canadian subsidiary which represented our Canada construction segment, to a group of investors, including members of the former subsidiary’s management team. We received approximately $17.3 million in payment for the shares. In addition, we also received approximately $26.4 million in repayment of indebtedness owed by our Canadian subsidiary to us. Net income from discontinued operation for the year ended December 31, 2011 was $9.1 million, net of income taxes. Included in the net income from discontinued operation for the year ended December 31, 2011 was a gain on sale of $9.1 million (net of income tax provision of $2.8 million) resulting from the sale of the subsidiary.On September 26, 2011, our Board of Directors authorized the Company to repurchase up to $100.0 million of its outstanding common stock. During 2011, we repurchased approximately 1.2 million shares of our common stock for approximately $27.5 million. As of December 31, 2011, there remained authorization for us to repurchase approximately $72.5 million of our shares. The repurchase program 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. Acquisitions under our repurchase program may be made from time to time as permitted by securities laws and other legal requirements. The repurchase program has been and will be funded from the Company’s internal funds.Operating SegmentsOur reportable segments reflect(b) certain reclassifications of prior yearperiod amounts from our United States mechanical construction and facilitiesbuilding services segment to our United States mechanical construction and facilities services segment due to changes in our internal reporting structure.facilitiesbuilding services; (d) United States industrial services; and (e) United Kingdom construction and facilities services; and (e) Other international construction and facilitiesbuilding services. The segment “United States facilitiesbuilding services” principally consists of those operations which provide a portfolio of services needed to support the operation and maintenance of customers’customers' facilities (industrial(commercial and government site-based operations and maintenance; facility maintenance and services; outage services to utilities and industrial plants; commercial and government site-based operations and maintenance; military base operations support services; mobile maintenance and services; floor care and janitorial services; landscaping, lot sweeping and snow removal; facilities management; vendor management; call center services; installation and support for building systems; program development, management and maintenance for energy systems; technical consulting and diagnostic services; infrastructure and building projects for federal, state and local governmental agencies and bodies; small modification and retrofit projects; and retrofit projects to comply with clean air laws), which services are not generally related to customers’customers' construction programs. The segment "United States industrial services" principally consists of those operations which provide industrial maintenance and services, mainly for refineries and petrochemical plants, including on-site repairs, maintenance and service of heat exchangers, towers, vessels and piping; design, manufacturing, repair and hydro blast cleaning of shell and tube heat exchangers and related equipment; refinery turnaround planning and engineering services; specialty welding services; overhaul and maintenance of critical process units in refineries and petrochemical plants; and specialty technical services for refineries and petrochemical plants. The United Kingdom and Other international construction and facilitiesbuilding services segments performsegment performs electrical construction, mechanical construction and facilitiesbuilding services. In August 2011, we sold our Canadian subsidiary, which represented our Canada construction segment and which performed electrical construction and mechanical construction. Our “Other international construction and facilities services” segment consisted20112013 were $5.6$6.4 billion compared to $4.9$6.3 billion for 2010 and $5.2 billion for 2009.2012. The increase in revenues for 2011 compared to 20102013 was primarily attributable to: (a) incremental revenues of approximately $407.1$133.3 million generated by companies acquired in 2011 and 2010,2013, which are reported within our United States facilities services and our United States mechanical construction and facilities services segments, (b) increased revenues in our United States facilities services segment, excluding revenues attributable to acquisitions in 2011 and 2010, particularly within our industrial services, mobile mechanical and government services markets and (c) an increase in revenues from our United Kingdom operations. The results of our United Kingdom operations were also impacted by the effect of favorable exchange rates for the British pound versus the United States dollar.The decrease in revenues for 2010 compared to 2009, excluding revenues attributable to acquisitions in 2010 and 2009, extended across all of our business segments and was primarily attributable to: (a) lower revenues in both our United States electrical construction and facilities services segment and our United States mechanical construction and facilities services segment and (b) higher revenues from our United States electrical construction and facilities services segment, partially offset by lower revenues from our United Kingdom operations, (c) lowerconstruction and building services segment and our United States mechanical construction and facilities services segment, excluding the effect of acquisitions in 2013. We continue to be disciplined by only accepting work in a very competitive marketplace that we believe can be performed at reasonable margins. 2013 2012 Revenues from unrelated entities: United States electrical construction and facilities services $ 1,345,750 21 % $ 1,211,692 19 % United States mechanical construction and facilities services 2,329,834 36 % 2,386,498 38 % United States building services 1,794,978 28 % 1,807,917 28 % United States industrial services 519,413 8 % 401,793 6 % Total United States operations 5,989,975 93 % 5,807,900 92 % United Kingdom construction and building services 427,183 7 % 538,779 8 % Total worldwide operations $ 6,417,158 100 % $ 6,346,679 100 % facilitiesindustrial services segment for the year ended December 31, 2013 increased by $117.6 million compared to the year ended December 31, 2012. This increase in revenues was primarily due to the $123.6 million of incremental revenues generated by RSI. Excluding the results of this acquisition, revenues decreased from turnaround and (d)maintenance services work performed compared to revenues in 2012. The results in 2012 benefited from the favorable impact of three large non-recurring turnaround and repair projects. This decrease in revenues was partially offset by revenues$66.3 million generated by companies acquired in 2010 and 2009, which are reported in our United States facilities services segment. December 31, 2013 December 31, 2012 Backlog: United States electrical construction and facilities services $ 993,919 30 % $ 831,910 25 % United States mechanical construction and facilities services 1,325,941 39 % 1,357,892 40 % United States building services 761,855 23 % 841,882 25 % United States industrial services 94,187 3 % 99,532 3 % Total United States operations 3,175,902 94 % 3,131,216 93 % United Kingdom construction and building services 185,220 6 % 243,169 7 % Total worldwide operations $ 3,361,122 100 % $ 3,374,385 100 % 20112013 was $3.3$3.36 billion compared to $3.1$3.37 billion of backlog at December 31, 2010, excluding2012. This slight decrease in backlog was primarily attributable to lower backlog within most of our Canadian subsidiary which we soldsegments, partially offset by an increase in August 2011.backlog from our United States electrical construction and facilities services segment. Backlog increases with awards of new contracts and decreases as we perform work on existing contracts. The increase in backlog as of December 31, 2011, compared to such backlog at December 31, 2010, was attributable to $414.7 million of backlog associated with the acquisition of three companies in 2011. Two of these companies are included in our United States facilities services segment, and the third is included in our United States mechanical construction and facilities services segment. Excluding backlog attributable to companies acquired in 2011, backlog decreased year over year, primarily within our United States electrical construction and facilities services, our United Kingdom and our United States facilities services segments. Backlog is not a term recognized under United States generally accepted accounting principles; however, it is a common measurement used in our industry. We include a project within our backlog at such time as a contract is awarded. Backlog includes unrecognized revenues to be realized from uncompleted construction contracts plus unrecognized revenues expected to be realized over the remaining term of facilities services contracts. However, we do not include in backlog contracts for which we are paid on a time and material basis, and 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 the next 12 months of revenues.The following table presents our revenues by each of our operating segments andprovided for in the approximate percentages that each segment’s revenues wereinitial contract award. Our backlog also includes amounts related to services contracts for which a fixed price contract value is not assigned; however, a reasonable estimate of total revenues can be made from budgeted amounts agreed to with our customer. Our backlog is comprised of: (a) original contract amounts, (b) change orders for which we have received written confirmations from our customers, (c) pending change orders for which we expect to receive confirmations in the years ended December 31, 2011, 2010ordinary course of business and 2009 (in millions, except(d) claim amounts that we have made against customers for percentages): 2011 % of
Total 2010 % of
Total 2009 % of
Total $ 1,155.1 21 % $ 1,158.9 24 % $ 1,273.7 24 % 1,904.5 34 % 1,708.4 35 % 1,959.9 37 % 2,024.9 36 % 1,522.3 31 % 1,493.6 29 % 5,084.5 91 % 4,389.6 90 % 4,727.2 90 % 529.0 9 % 462.4 10 % 500.5 10 % — — — — — — $ 5,613.5 100 % $ 4,852.0 100 % $ 5,227.7 100 % Revenueswhich we have determined we have a legal basis under existing contractual arrangements and as to which we consider collection to be probable. Claim amounts recorded were immaterial for all periods presented. Our backlog does not include anticipated revenues from unconsolidated joint ventures or variable interest entities and anticipated revenues from pass-through costs on contracts for which we are acting in the capacity of an agent and which are reported on the net basis. We believe our backlog is firm, although many contracts are subject to cancellation at the election of our United States electrical construction and facilities services segment were $1,155.1 million for the year ended December 31, 2011 compared to revenues of $1,158.9 million for the year ended December 31, 2010. The slight decrease in revenues for the year ended December 31, 2011 was primarily attributable tocustomers. Historically, cancellations have not had a continued decline in revenues from hospitality construction projects, principally in the Las Vegas market as we substantially completed workmaterial adverse effect on our last major project within that market, and lower revenues from transportation construction projects. This decrease was mostly offset by increased revenuesfrom industrial, commercial, and water and wastewater construction projects. We continue to exercise discipline in taking on projects in the current economic environment, and we accept work only when we believe it can be performed at a reasonable margin.Revenues of our United States electrical construction and facilities services segment for 2010 decreased by $114.8 million compared to 2009. The decrease in revenues for 2010 compared to 2009 was primarily attributable to lower levels of work on industrial construction projects, most notably in the Northern California and Pacific Northwest markets, and on commercial and transportation construction projects. Additionally, the decrease in revenues was partially attributable to a decline in work on hospitality construction projects, principally in the Las Vegas market. This 2010 decrease in revenues was partially offset by an increase in revenues from water/wastewater, healthcare and institutional construction projects.Our United States mechanical construction and facilities services segment revenues for the year ended December 31, 2011 were $1,904.5 million, a $196.1 million increase compared to revenues of $1,708.4 million for the year ended December 31, 2010. The increase in revenues for the year ended December 31, 2011 was primarily attributable to revenues of approximately $186.4 million generated by a company acquired in 2011. Revenues from this segment for the year ended December 31, 2011, excluding revenues attributable to the 2011 acquisition in this segment, also increased compared to the same period in 2010. This slight increase in revenues was primarily attributable to increased work on commercial and industrial construction projects, offset in part by a continued decline in revenues from hospitality construction projects, primarily in the Las Vegas market, as we substantially completed work on our last major project in that market, and water and wastewater construction projects primarily in the South Florida market.Our United States mechanical construction and facilities services segment revenues for 2010 decreased by $251.5 million compared to 2009. The decrease in revenues for 2010 compared to 2009 was primarily attributable to reduced work on industrial, commercial and healthcare construction projects as a result of the economic downturn and our decision to only accept work that we believe can be performed at reasonable margins. Additionally, the decrease in revenues was attributable to a decline in work on water/wastewater construction projects in the South Florida market and a decline in work on hospitality construction projects in the Las Vegas market.Revenues of our United States facilities services segment were $2,024.9 million and $1,522.3 million in 2011 and 2010, respectively. The increase in revenues for 2011 compared to 2010 was primarily attributable to revenues of $220.7 million generated by companies acquired in 2011 and 2010, which perform facilities maintenance services, government infrastructure contracting services and mobile mechanical services, and from an increase in revenues at: (a) our industrial services operations, which have seen an increase in demand for our services in the refinery and petrochemical markets, (b) our mobile mechanical services operations, excluding revenues attributable to acquisitions in 2011 and 2010, reflecting an increase in demand for our repair services, controls installation and small project work and (c) our government services operations, due to new project awards. Additionally, a contract amendment with a client resulted in an increase in revenues based on the new terms and conditions. The amended contract provides that we are to act as a principal, whereas prior to the amendment, we acted as an agent.Revenues of our United States facilities services segment increased by $28.7 million in 2010 compared to 2009. This increase was primarily attributable to revenues of $66.3 million generated by companies acquired in 2010 and 2009, which perform mobile mechanical services and government infrastructure contracting services, and from an increase in revenues at our government and commercial site-based facilities services operations. This increase in revenues in 2010 was offset by a decline in revenues from: (a) our industrial services operations, which had been adversely affected by a lower demand for our refinery and petrochemical services as a result of capital project curtailments and deferred maintenance, and (b) fewer discretionary projects attributable to economic conditions.Our United Kingdom construction and facilities services segment revenues were $529.0 million in 2011 compared to $462.4 million in 2010. This increase in revenues was primarily attributable to growth in revenues from our facilities services business as a result of an expansion in scope of contracts with our existing customers in the commercial market. The increase in revenues for 2011 was also partly attributable to an increase of $18.3 million relating to the effect of favorable exchange rates for the British pound versus the United States dollar.Our United Kingdom construction and facilities services segment revenues decreased by $38.1 million in 2010 compared to 2009. This decline in revenues was attributable to a decrease in revenues from institutional construction projects, partially offset by an increase in revenues from commercial construction projects. The decrease in revenues for 2010 was also attributable to a decrease of $6.7 million relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar.Other international construction and facilities services activities consisted of a venture in the Middle East. The results of the venture were accounted for under the equity method of accounting. In June 2010, we sold our equity interest in a Middle East venture to our partner in the venture. As a result of this sale, we received $7.9 million and recognized a pretax gain in this amount, which is classified as a “Gain on sale of equity investment” on the Consolidated Statement of Operations.2011, 20102013 and 20092012 (in millions,thousands, except for percentages): 2011 2010 2009 $ 4,879.5 $ 4,158.4 $ 4,443.5 $ 733.9 $ 693.5 $ 784.2 13.1 % 14.3 % 15.0 % 2013 2012 Cost of sales $ 5,604,100 $ 5,540,325 Gross profit $ 813,058 $ 806,354 Gross profit margin 12.7 % 12.7 % 20112013 was $733.9$813.1 million, ana $6.7 million increase of $40.4 million compared to the gross profit of $806.4 million for the year ended December 31, 2010 of $693.5 million.2012. The increase in gross profit was primarily attributable to: (a) increases in gross profit from our United States building services segment and our United States industrial services segment, excluding the20112013 reported within our United States industrial services segment and 2010 within our United States mechanical construction and facilities services and our United States facilities services segments,segment, which contributed $38.5approximately $23.0 million to gross profit, net of amortization expense of $4.6 million attributable to identifiable intangible assets, (b) our United States facilities services segment, excluding gross profit from acquisitions in 2011 and 2010, primarily due to our industrial services operations and (c) our United States electrical construction and facilities services segment. The increasethe receipt of an insurance recovery of approximately $2.6 million during the first quarter of 2013 associated with a previously disposed of operation, which is classified as a component of "Cost of sales" on the Consolidated Statements of Operations. Gross profit was negatively impacted by a decrease in gross profit was also attributable to an increase of $1.9 million relating to the effect of favorable exchange rates for the British pound versus the United States dollar. These increases were partially offset by lower gross profit and gross profit margin from: (a) our United States mechanical construction and facilities services segment, excluding gross profit from the 2011 acquisition in this segment, primarily as a resultconsequence of lower margin work acquired duringaggregate losses of approximately $24.5 million from one of our subsidiaries at two projects located in the current economic environmentsoutheastern United States and (b) our United Kingdom operations, whose construction business experienced project write-downs. Gross profit and building services segment.2010 were favorably impacted byboth 2013 and 2012. Gross profit margin for the resolutionyear ended December 31, 2013 increased in our United States building services segment and our United States industrial services segment primarily due to improved project execution and the termination of an historical legal claim on a healthcare construction projectcertain unprofitable contracts. Gross profit margin decreased in all our other reportable segments. Gross profit margin declined in our United States mechanical construction and facilities services segment and the receipt of a contract termination fee pursuant to the terms of a contract in our United Kingdom operations. Additionally in 2010, we recognized a pretax gain of $4.5 million by our energy services operations within our United States facilities services segment from the sale of our interest in a venture, which gain is classified as a component of “Cost of sales” on the Consolidated Statements of Operations.Our gross profit margin was 13.1% for 2011 compared to 14.3% for 2010. The decrease in gross profit margin was primarily the result of lower gross profit margin at: (a) our United States mechanical construction and facilities services segment, excluding gross profit margin attributable to the 2011 acquisition in this segment, for reasons discussed in the preceding paragraph, (b) our United States facilities services segment, partially attributable to our acquisitions in 2011 and 2010, and the contract amendment mentioned above and (c) our United Kingdom operations. Additionally in 2010, we recognized a pretax gain of $4.5 million by our energy services operations within our United States facilities services segment as discussed in the preceding paragraph. The decrease in gross profit margin in 2011 was partially offset by higher gross profit margin at our United States electrical construction and facilities services segment, primarily as a result of: (a) the favorable resolution of uncertainties upon the substantial completion of a hospitality construction project and (b) higher margins from certain transportation construction projects, as a result of claim settlements and better than anticipated project execution on other contracts.Our gross profit decreased by $90.7 million for 2010 compared to 2009. The decrease in gross profit was primarily attributable to reduced volume across all of our business segments, excluding gross profit from acquisitions in 2010 and 2009, and lower gross profit margins at: (a) our United States electrical construction and facilities services segment and (b) our industrial services and mobile mechanical services operations, excluding gross profit from acquisitions in 2010 and 2009, within our United States facilities services segment. The decrease in gross profit was also attributable to a decrease of $1.0 million relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar. The overall decrease in gross profit was partially offset by: (a) the favorable resolution of uncertainties on certain construction projects at or nearing completion in the United States mechanical construction and facilities services segment, (b) the favorable resolution of an historical legal claim on a healthcare construction project within our United States mechanical construction and facilities services segment, (c) improved gross profit from our commercial and government site-based operations within our United States facilities services segment and (d) companies acquired in 2010 and 2009 within our United States facilities services segment, which contributed $5.6 million to gross profit, net of amortization expense of $1.6 million attributable to identifiable intangible assets. In addition, the decrease ingross profit was partially offset by: (a) an increase in gross profit contributed by our energy services operations within our United States facilities services segment, primarily as a result of the recognition of a pretax gain of $4.5 million from the sale of our interest in a venture and (b) favorable gross profit associated with the receipt of a contract termination fee pursuant to the terms of a contract within our United Kingdom construction and facilitiesbuilding services segment.Oursegment due to construction contract losses, resulting in a 0.8% impact on consolidated gross profit margin was 14.3% for 2010 compared to 15.0% for 2009. The decrease in grossmargin. Gross profit margin was primarily the result of: (a) lower gross profit margins at our United States electrical construction and facilities services segment as a result of lower margins on new work performed in 2010, (b) lower gross profit margins at our industrial services and mobile mechanical services operations, excluding gross profit margin attributable to acquisitions in 2010 and 2009, within our United States facilities services segment and (c) an increase in institutional work which generally has lower margins than private sector work. In addition, 2009 was more positively affected by the favorable resolution of uncertainties on certain construction projects at or nearing completion2013 in our United States electrical construction and facilities services segment compared to 2010. The decrease indeclined as 2012 gross profit margin in 2010 was partially offset by higher gross profit margins at our United States mechanical construction and facilities services segment, primarily as a result of: (a)had benefited from the favorable resolution of uncertainties on certain construction projects at or nearing completion and (b) the favorable resolutionclaims, resulting in approximately $9.5 million of an historical legal claim on a healthcare construction project.2011, 20102013 and 20092012 (in millions,thousands, except for percentages): 2011 2010 2009 $ 518.1 $ 472.1 $ 517.3 9.2 % 9.7 % 9.9 % 2013 2012 Selling, general and administrative expenses $ 591,063 $ 556,242 Selling, general and administrative expenses as a percentage of revenues 9.2 % 8.8 % 20112013 were $518.1$591.1 million, a $46.0$34.8 million increase compared to selling, general and administrative expenses of $472.1$556.2 million for the year ended December 31, 2010. This increase was primarily attributable to: (a) $35.2 million of expenses directly related to companies acquired in 2011 and 2010, including amortization expense of $7.9 million attributable to identifiable intangible assets and (b) transaction costs of $4.7 million associated with the acquisition of USM during 2011. Selling, general and administrative expenses in 2010 benefited from a reduction in our provision for doubtful accounts due to the favorable settlements of amounts previously determined to be uncollectible.2012. Selling, general and administrative expenses as a percentage of revenues decreasedwere 9.2% and 8.8% for 2011 compared to 2010, primarily due to higher overall revenuesthe years ended December 31, 2013 and reduced discretionary spending.Selling,2012, respectively. This increase in selling, general and administrative expenses decreased by $45.2 million for 2010 compared to 2009 primarily due to:resulted from: (a) reduced employee costs, such as salaries, commissions and incentive compensation, primarily as a result of the downsizing of staff at numerous locations in 2009 and lower operating results and (b) a reduction in our provision for doubtful accounts due to favorable settlements of amounts previously determined to be uncollectible. These decreases were partially offset by $4.3$21.0 million of expenses directly related to companies acquired in 2010 and 2009,2013, including amortization expense of $0.7 million attributable to identifiable intangible assets. Selling, generalassets of $5.8 million, (b) $6.1 million of transaction costs associated with the acquisition of RSI and administrative expenses as a percentage(c) higher legal and other professional fees. In addition, we recognized for the years ended December 31, 2013 and 2012, respectively, $6.8 million and $6.4 million of revenues decreased for 2010 comparedincome attributable to 2009, primarily duethe reversal of contingent consideration accruals relating to lower selling, general and administrative expenses.$1.2 million, $1.8$11.7 million and $3.3$0.1 million for 2011, 20102013 and 2009,2012, respectively. The 20112013 restructuring expenses were primarily related to employee severance obligations atand the termination of leased facilities in the construction operations of our corporate headquarters.United Kingdom construction and building services segment. The 20102012 restructuring expenses were primarily attributable to employee severance obligations and the termination of leased facilities incurred in our United States electrical construction and facilitiesbuilding services segment, while the 2009 restructuring expenses were primarily related to our UK operations.segment. As of December 31, 2011, 20102013 and 2009,2012, the balance of our severancerestructuring related obligations yet to be paid was $0.2 million, $0.3$4.9 million and $0.7$0.1 million, respectively. The severancemajority of obligations outstanding as of December 31, 2010 and 20092012 were paid during 2011 and 2010.2013. The majority of severance obligations outstanding as of December 31, 20112013 will be paid during 2014. We expect to incur an additional $1.4 million of expenses in 2012.In conjunction with our 2011 annual impairment test on October 1, we recognized a $3.8 million non-cash impairment charge related to customer relationships and trade names within the United States facilities services segment. The 2011 impairment primarily results from both lower forecasted revenues from and operating margins at specific companies within this segment.During the third quarter of 2010 and prior to our October 1 annual impairment test, we recognized a $226.2 million non-cash impairment charge. Of this amount, $210.6 million related to goodwill and $15.6 million related to trade names. Additionally, during the second quarter of 2010, we recorded a $19.9 million non-cash impairment charge related to trade names. All of these impairments were within our United States facilities services segment.During 2009, we recognized a $13.5 million non-cash impairment charge related to trade names and customer relationships in conjunction withtest. Of this amount, $11.2 million related to trade names withintesting as of October 1, 2013 and 2012, no impairment of our goodwill or our identifiable intangible assets was recognized for the United States facilities services segmentyears ended December 31, 2013 and $2.3 million related to trade names and customer relationships within the United States mechanical construction and facilities services segment.expenses, and impairment loss on goodwill and identifiable intangible assets) by segment,expenses), and each segment’ssegment's operating income (loss) as a percentage of such segment’ssegment's revenues from unrelated entities, for the years ended December 31, 2011, 20102013 and 20092012 (in millions,thousands, except for percentages): 2011 % of
Segment
Revenues 2010 % of
Segment
Revenues 2009 % of
Segment
Revenues $ 84.6 7.3 % $ 70.4 6.1 % $ 114.5 9.0 % 117.0 6.1 % 131.3 7.7 % 129.7 6.6 % 68.1 3.4 % 60.0 3.9 % 73.7 4.9 % 269.7 5.3 % 261.7 6.0 % 317.9 6.7 % 9.2 1.7 % 15.7 3.4 % 12.0 2.4 % — — (0.1 ) — (0.1 ) — (63.1 ) — (55.9 ) — (62.9 ) — (1.2 ) — (1.8 ) — (3.3 ) — (3.8 ) — (246.1 ) — (13.5 ) — 210.8 3.8 % (26.5 ) (0.5 )% 250.1 4.8 % (11.3 ) (12.2 ) (7.9 ) 1.8 2.7 4.7 — 7.9 — $ 201.4 $ (28.1 ) $ 247.0 2013 2012 Operating income (loss): United States electrical construction and facilities services $ 98,114 7.3 % $ 100,736 8.3 % United States mechanical construction and facilities services 93,765 4.0 % 125,261 5.2 % United States building services 67,225 3.7 % 43,290 2.4 % United States industrial services 38,763 7.5 % 37,241 9.3 % Total United States operations 297,867 5.0 % 306,528 5.3 % United Kingdom construction and building services (5,981 ) (1.4 )% 7,052 1.3 % Corporate administration (69,891 ) — (63,468 ) — Restructuring expenses (11,703 ) — (145 ) — Total worldwide operations 210,292 3.3 % 249,967 3.9 % Other corporate items: Interest expense (8,769 ) (7,275 ) Interest income 1,128 1,556 Income from continuing operations before income taxes $ 202,651 $ 244,248 $210.8$210.3 million for 2011, compared to an operating loss of $26.5 million for 2010 and operating income of $250.1 million for 2009. The 2010 operating loss was due to the impairment loss on goodwill and identifiable intangible assets of $246.1 million.Operating income of our United States electrical construction and facilities services segment was $84.6 million for the year ended December 31, 20112013 compared to operating income of $70.4$250.0 million for the year ended December 31, 2010. The increase in operating income for 2011 compared to 2010 primarily resulted from an increase in gross profit from: (a) water and wastewater construction projects, primarily in the New York market, (b) commercial, transportation and healthcare construction projects and (c) smaller quick turn project work. In addition, operating income in 2011 benefited from the favorable resolution of uncertainties on a substantially complete hospitality construction project. These increases were partially offset by a decrease in gross profit attributable to institutional construction projects and lower operating income from certain of our Southern California operations. Selling, general and administrative expenses decreased for the year ended December 31, 2011, principally due to lower employment costs, such as salaries and employee benefits. The increase in operating margin for the year ended December 31, 2011 was primarily the result of an increase in gross profit margin and a decrease in the ratio of selling, general and administrative expense to revenues.2010 decreased by $44.1the year ended December 31, 2013 was $98.1 million compared to 2009. The decrease in operating income in 2010 compared to 2009 was primarilyof $100.7 million for the result of lower gross profit from commercial and industrial construction projects, as a result of the economic slowdown and our selectivity in bidding on contracts.year ended December 31, 2012. The decrease in operating income for 2010 was partially offset by an increase in the gross profit from water/wastewater construction projects. Selling, general and administrative expenses also decreased for 2010 compared to 2009, principally due to reduced employee costs, such as salaries, incentive compensation and employee benefits, primarily as a result of the downsizing of staff at numerous locations in 2009 and lower operating results. The decrease in operating margin for 2010year ended December 31, 2013 was primarily the result of a reduction in gross profit from water and wastewater construction projects, partially offset by an increase in gross profit attributable to commercial, institutional and manufacturing construction projects. Operating income in 2012 also benefited from the resolution of construction claims on a water and wastewater project and a healthcare project, resulting in approximately $9.5 million of gross profit. Selling, general and administrative expenses slightly increased for the year ended December 31, 2013 compared to 2012. The decrease in operating margin for the year ended December 31, 2013 was primarily the result of a decrease in gross profit margin.20112013 was $117.0$93.8 million, a $14.3$31.5 million decrease compared to operating income of $131.3$125.3 million for the year ended December 31, 2010.2012. The results included aggregate losses of approximately $24.5 million from one of our subsidiaries at two projects located in the southeastern United States, resulting in a 1.1% impact on this segment's operating margin. One of these projects was in progress at the time of acquisition of the subsidiary and will be completed in 2014. The other project, which was contracted for post-acquisition, has incurred losses principally due to poor performance by one of our subcontractors on the project which we have replaced and is substantially complete. In addition to the effect of these two projects, operating income in 2012 was favorably impacted by gross profit of $24.1 million recognized on a large manufacturing project. Companies acquired in 2013 generated operating losses of approximately $1.0 million, including amortization expense of $0.1 million attributable to identifiable intangible assets for the year ended December 31, 2013. The decrease in operating income for 2011 compared to 2010, excluding operating incomethe year ended December 31, 2013 was partially offset by higher gross profit from the 2011 acquisitioncommercial construction projects and a decrease in this segment, wasselling, general and administrative expenses primarily due to lower incentive compensation expense. In addition, we recognized for the years ended December 31, 2013 and 2012, respectively, $6.7 million and $5.4 million of income attributable to the reversal of contingent consideration accruals relating to acquisitions made prior to 2013. The decrease in operating margin was primarily attributable to a reduction in gross profit margin.industrial,this segment's: (a) commercial site-based services, partially attributable to an increase in revenues from snow removal and institutional construction projects,the termination of certain unprofitable contracts, (b) mobile mechanical services, partially as a result of the current economic environmentgreater project and our selectivityservices revenues and improved job execution, and (c) energy services, as a result of increased gross profits on large project work. The increase in bidding on contracts. Additionally, 2010 benefited from the resolutionoperating incomefrom: (a) a company acquired in 2011, whichfor the year ended December 31, 2012. RSI contributed approximately $7.1$3.0 million ofto operating income, net of amortization expense of $3.2 million, (b) gross profit associated with hospitality construction projects, as a result of, among other things, the favorable resolution of uncertainties on current projects and the settlement of a long outstanding construction claim and (c) gross profit from healthcare construction projects. Selling, general and administrative expenses were flat in 2011 compared to 2010, excluding expenses directly related to the 2011 acquisition in this segment, which added $18.5 million of selling, general administrative costs, including $1.8$5.7 million of amortization expense attributable to identifiable intangible assets. This increase in operating income was offset by reduced operating income due to a decrease in demand for our turnaround and maintenance services in the refinery market compared to 2012 due to customer scheduling changes. The results of 2012 benefited from the favorable impact of three large non-recurring turnaround and repair projects. The decrease in operating margin was a result of an increase in the ratio of selling, general and administrative expenses to revenues.20112013 was primarily the result of a reduction in gross profit margin.Our United States mechanical construction and facilities services segment operating income for 2010 increased by $1.6$6.0 million compared to 2009. The increase in operating income in 2010 compared to 2009of $7.1 million for the year ended December 31, 2012. This unfavorable result was primarilydue to: (a) an operating loss of $19.0 million for the year ended December 31, 2013 from its construction operations due to lower volume and project write-downs attributable to both weak market conditions and our decision earlier this year to withdraw from the decreaseconstruction market in the United Kingdom and (b) lower volume from its building services operations as a result of reduced project activity, partially offset by lower selling general and administrative expenses principally due to reduced employee costs, such as salaries and incentive compensation, primarily as a result of the downsizing of staff at numerous locations in 2009, as well as a reduction in the provision for doubtful accounts due to favorable settlements of amounts previously determined to be uncollectible. The increase in operating income was also due to: (a) the favorable resolution of uncertainties on certain construction projects at or nearing completion, particularly in the hospitality markets, and (b) the favorable resolution of an historical legal claim on a healthcare construction project. The increase in operating income for 2010 compared to 2009 was partially offset by lower gross profit from commercial, industrial and water/wastewater construction projects, as a result of the economic slowdown and our selectivity in bidding on contracts. The increase in operating margin for 2010 was primarily the result of increased gross profit margin due to the favorable resolution of matters discussed above.Operating income of our United States facilities services segment was $68.1 million and $60.0 million in 2011 and 2010, respectively. The increase in operating income for 2011 compared to 2010 was primarily due to higher operating income from our industrial services operations, which have seen an increase in demand for our services in the refinery and petrochemical markets. The increase in operating income for 2011 was partially offset by lower operating income from lower margins on project work attributable to several project write-downs, the largest of which is due to difficult job site conditions, and lower margins on projects as a result of the competitive market in the current economic environment. Additionally in 2010, our energy services operations benefited from the recognition of a pretax gain of $4.5 million from the sale of our interest in a venture, which gain is classified as a component of “Cost of sales” on the Consolidated Statements of Operations. Companies acquired in 2011 and 2010 negatively impacted operating income by $3.8 million, including $9.2 million of amortization expense attributable to identifiable intangible assets. Selling, general and administrative expenses increased by $6.4 million for 2011 compared to 2010, excluding the increase of $16.7 million of selling, general and administrative expenses associated with companies acquired in 2011 and 2010, including amortization expense of $6.0 million. This increase was primarily attributable to an increase in employment costs such as salaries, bonuses and commissions due to higher volume. The decrease in operating margin for 2011 was primarily the result of a reduction in the gross profit margin.Operating income of our United States facilities services segment decreased by $13.7 million in 2010 compared to 2009. The decrease in operating income for 2010 compared to 2009 was primarily due to lower operating income from: (a) our industrial services operation which had been adversely affected by lower demand for our refinery and petrochemical services as a result of capital project curtailments and deferred maintenance and lower gross profit margins and (b) fewer discretionary projects due to the effects of the economic slowdown and lower gross profit margins, primarilypredominantly as a result of lower margins on recently acquiredprojects. The decreaseemployee related costs. Operating margin in operating incomethis segment decreased for 2010 was partially offset by improved results from our commercial and government site-based operations and operating income from companies acquired in 2010 and 2009, which perform mobile mechanical services and government infrastructure contracting services and contributed $1.3 million of operating income, net of amortization expense of $2.3 million attributable to identifiable intangible assets. In addition, these decreases were partially offset by an increase in operating income for 2010 from our energy services operation, primarily as a result of the recognition of a pretax gain of $4.5 million from the sale of our interest in a venture. Selling, general and administrative expenses decreased by $8.0 million for 20102013 compared to 2009, excluding the increase of $4.3 million of selling, general and administrative expenses associated with companies acquired in 2010 and 2009, including amortization expense of $0.7 million,2012 due to reduced employee costs, such as salaries and commissions, primarily as a result of the downsizing of staff at numerous locations in 2009 and due to lower revenues. In addition, the decrease was due to a reduction in our provision for doubtful accounts. These decreases were partially offset by increased professional fees. The decrease in operating margin for 2010 was primarily the result of a reduction in gross profit margin.Our United Kingdom construction and facilities services segment operating income was $9.2 million in 2011 compared to $15.7 million in 2010. The decrease in operating income for 2011 compared to 2010 was primarily attributable to an operating loss within our United Kingdom construction business as a result of losses recognized on various institutional and commercial construction projects and a decrease in the gross margin from its facilities services business, which benefited in 2010 from favorable gross profit associated with the receipt of a contract termination fee pursuant to the terms of a contract. The decrease in operating income was partially offset by a continued decrease in the actuarially determined pension costs associated with our United Kingdom defined pension plan and an increase of $0.6 million relating to the effect of favorable exchange rates for the British pound versus the United States dollar. The decrease in operating margin for 2011 was brought about by a combination of lower gross profit margins, partially offset by a decrease in selling, general and administrative expenses as a percentage of revenues.Our United Kingdom construction and facilities services segment operating income increased by $3.7 million in 2010 compared to 2009. The increase in operating income for 2010 compared to 2009 was primarily attributable to the decrease in the actuarially determined pension costs associated with the curtailment of our United Kingdom defined pension plan and the favorable gross profit associated with the receipt of a contract termination fee pursuant to the terms of a contract. These increases were partially offset by a decrease of $0.6 million relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar. The increase in operating margin for 2010 was brought about by a combination of increased gross profit margins and a decrease in selling, general and administrative expenses as a percentage of revenues.In June 2010, we sold our equity interest in a Middle East venture to our partner in the venture. As a result of this sale, we received $7.9 million and recognized a pretax gain in this amount, which is classified as a “Gain on sale of equity investment” on the Consolidated Statements of Operations. The Other international construction and facilities services segment operating loss was approximately $0.1 million and $0.1 million for 2010 and 2009, respectively.$63.1$69.9 million for 20112013 compared to $55.9$63.5 million in 2010.2012. The increase in expenses for 2011 as comparedwas primarily due to 2010 is primarily attributable to $4.7$6.1 million of transaction costs associated with the acquisitionRSI acquisition. Also, included in our corporate administration expenses for 2013 was the receipt of USMan insurance recovery during 2011 and higher incentive compensation costs. This increase was partially offset by reduced employee costs, such as salaries,our first quarter of approximately $2.6 million associated with a previously disposed of operation, which is classified as a resultcomponent of "Cost of sales" on the restructuring at our corporate headquarters earlier in 2011. The decreaseConsolidated Statements of $7.0 million in expenses comparing 2010 to 2009 was primarily attributable to a decline in incentive compensation, marketing and advertising expenses, as well as lower professional fees.$11.3 million, $12.2$8.8 million and $7.9$7.3 million for 2011, 20102013 and 2009,2012, respectively. The $0.9 million decrease in interest expense for 2011 compared to 2010 was primarily due to lower interest rates. This decrease was partially offset by an increase in the amortization of debt issuance costs of $0.4 million associated with the acceleration of some of these costs in conjunction with the amendment and restatement of our credit facility in 2011. The $4.3$1.5 million increase in interest expense for 20102013 compared to 20092012 was primarily due to higher costincreased borrowings as a result of borrowingour acquisition of RSI and the acceleration of expense for debt issuance costs associated with the termination of a term loan and the amendment and restatement of our credit facility in 2010.$1.8 million, $2.7$1.1 million and $4.7$1.6 million for 2011, 20102013 and 2009,2012, respectively. The decreasesdecrease in interest income werewas primarily related to lower interest rates earned on our invested cash balances, as well as lower cash available to invest in 2011.The $7.9 million “Gain on sale of equity investment” in 2010 was attributable to the June 2010 sale of our equity interest in a Middle East venture to our partner in the venture, the operating results of which have been reported in our Other international construction and facilities services segment.20112013 income tax provision from continuing operations was $76.8$75.3 million compared to $53.7$95.4 million for 2010 and $92.6 million for 2009 based on effective income tax rates, before the tax effect of non-cash impairment charges, of approximately 38.7%, 37.2% and 37.8%, respectively.2012. The actual income tax rates on income from continuing operations before income taxes, less amounts attributable to non-controllingnoncontrolling interests, for the years ended December 31, 2013 and 2012, were 37.8% and 39.4%, respectively. The decrease in the 2013 income tax provision compared to 2012 was primarily due to the effect of reduced income before income taxes, a change in the mix of earnings among various jurisdictions and the reversal of previously unrecognized income tax benefits.2010was primarily attributable to: (a) increased revenues from all of our operating segments, excluding incremental revenues attributable to acquisitions in 2012 and 2009, inclusive2011, and (b) incremental revenues of approximately $303.9 million generated by companies acquired in 2012 and 2011, which are reported within our United States mechanical construction and facilities services segment and our United States building services segment. An increase in revenues at our United Kingdom operations was offset by a decrease of $6.5 million relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar. 2012 2011 Revenues from unrelated entities: United States electrical construction and facilities services $ 1,211,692 19 % $ 1,155,079 21 % United States mechanical construction and facilities services 2,386,498 38 % 2,009,073 36 % United States building services 1,807,917 28 % 1,602,964 29 % United States industrial services 401,793 6 % 317,377 6 % Total United States operations 5,807,900 92 % 5,084,493 91 % United Kingdom construction and building services 538,779 8 % 528,966 9 % Total worldwide operations $ 6,346,679 100 % $ 5,613,459 100 % December 31, 2012 December 31, 2011 Backlog: United States electrical construction and facilities services $ 831,910 25 % $ 809,952 24 % United States mechanical construction and facilities services 1,357,892 40 % 1,361,789 41 % United States building services 841,882 25 % 769,374 23 % United States industrial services 99,532 3 % 91,632 3 % Total United States operations 3,131,216 93 % 3,032,747 91 % United Kingdom construction and building services 243,169 7 % 294,899 9 % Total worldwide operations $ 3,374,385 100 % $ 3,327,646 100 % 2012 2011 Cost of sales $ 5,540,325 $ 4,879,510 Gross profit $ 806,354 $ 733,949 Gross profit margin 12.7 % 13.1 % 2012 2011 Selling, general and administrative expenses $ 556,242 $ 518,121 Selling, general and administrative expenses as a percentage of revenues 8.8 % 9.2 % charges,charge related to customer relationships and trade names within the United States building services segment during the fourth quarter of 2011. This impairment primarily resulted from both lower forecasted revenues from, and lower operating margins at, specific companies within this segment. 2012 2011 Operating income (loss): United States electrical construction and facilities services $ 100,736 8.3 % $ 84,601 7.3 % United States mechanical construction and facilities services 125,261 5.2 % 118,529 5.9 % United States building services 43,290 2.4 % 47,087 2.9 % United States industrial services 37,241 9.3 % 19,510 6.1 % Total United States operations 306,528 5.3 % 269,727 5.3 % United Kingdom construction and building services 7,052 1.3 % 9,225 1.7 % Corporate administration (63,468 ) — (63,124 ) — Restructuring expenses (145 ) — (1,240 ) — Impairment loss on identifiable intangible assets — — (3,795 ) — Total worldwide operations 249,967 3.9 % 210,793 3.8 % Other corporate items: Interest expense (7,275 ) (11,261 ) Interest income 1,556 1,820 Income from continuing operations before income taxes $ 244,248 $ 201,352 38.7%, (167.2)%due to difficult job site conditions. Additionally, companies acquired in 2011 negatively impacted operating income by approximately $1.9 million, including $4.8 million of amortization expense attributable to identifiable intangible assets. The decrease in operating income was partially offset by: (a) higher operating income from our mobile mechanical services as a result of improved project performance compared to 2011 and 37.8%(b) income attributable to the reversal of contingent consideration accruals relating to acquisitions made prior to 2012. Selling, general and administrative expenses increased by $5.5 million for 2012 compared to 2011, excluding the increase of $15.0 million of selling, general and administrative expenses associated with companies acquired in 2011, including amortization expense of $4.7 million. This increase was primarily attributable to an increase in employee related costs such as salaries, incentive compensation and employee benefits, due to higher volume and profitability, and higher depreciation and amortization costs. The increases in selling, general and administrative expenses were partially offset by a reduction in the provision for doubtful accounts due to favorable settlements of amounts previously determined to be uncollectible. The increase in operating margin for 2012 was the result of a decrease in the ratio of selling, general and administrative expenses to revenues, which is related to our ability to increase revenues at a greater rate than the increase in overhead costs, partially offset by a reduction in gross profit margin.20112012 income tax provision compared to 2011 was primarily due to increased income before income taxes, the effect of a change in the United Kingdom statutory tax rate and a change in the allocationmix of earnings among various jurisdictions. The Company recognized a non-cash goodwill impairment charge of approximately $210.6 million during 2010. Approximately $34.0 million of this impairment is deductible for income tax purposes. The remaining $176.6 million of this impairment is not deductible for income tax purposes. This non-deductible portion had a significant impact on the effective income tax rate for 2010.operations our entire interest in our Canadian subsidiary, which represented our Canada construction segment, to a group of investors, including members of the former subsidiary’ssubsidiary's management team. We received approximately $17.3 million in payment for the shares. In addition, we also received approximately $26.4 million in repayment of indebtedness owed by our Canadian subsidiary to us. Proceeds from the sale of discontinued operation, net of cash sold, totaled $26.6 million. Net income from discontinued operation for the year ended December 31, 2011 was $9.1 million, net of income taxes. Included in the net income from discontinued operation for the year ended December 31, 2011 was a gain on sale of $9.1 million (net of income tax provision of $2.8 million) resulting from the sale of the subsidiary. The gain on sale of discontinued operation includes $15.5 million related to amounts previously reported in the foreign translation adjustment component of accumulated other comprehensive income.and 2010 (in millions)thousands): 2011 2010 $ 149.4 $ 69.5 $ (320.5 ) $ (32.7 ) $ (29.3 ) $ (48.0 ) $ 0.9 $ (4.9 ) 2013 2012 2011 Net cash provided by operating activities $ 150,069 $ 184,408 $ 149,425 Net cash used in investing activities $ (483,422 ) $ (42,546 ) $ (320,518 ) Net cash provided by (used in) financing activities $ 167,031 $ (50,587 ) $ (29,288 ) Effect of exchange rate changes on cash and cash equivalents $ 832 $ 2,706 $ 867 $199.5$165.5 million from $710.8$605.3 million at December 31, 20102012 to $511.3$439.8 million at December 31, 2011.2013. Net cash provided by operating activities for 2011 of $149.42013 was $150.1 million compared to $69.5$184.4 million in net cash provided by operating activities for 2010,2012. The decrease in net cash provided by operating activities, excluding the effect of businesses acquired, was primarily due to: (a) a $32.2 million reduction in other accrued expenses, primarily due to a reduction in federal taxes payable, (b) a $21.5 million reduction in net income and (c) an $18.3 million reduction in accounts payable, partially offset by a $38.4 million increase in net over-billings, related to the timing of customer billings and payments. Net cash used in investing activities was $483.4 million for 2013 compared to net cash used in investing activities of $42.5 million for 2012. The increase in net cash used in investing activities was primarily due to a $435.9 million increase in payments for acquisitions of businesses. Net cash provided by financing activities for 2013 increased by approximately $217.6 million compared to 2012. The increase in net cash provided by financing activities was primarily due to $350.0 million of long-term debt incurred and a $22.0 million decrease in dividends paid to stockholders, partially offset by a $150.0 million net repayment of our revolving credit facility.Additionally in 2010, we made a $25.9 million one-time supplemental contribution to the United Kingdom defined benefit pension plan. Net cash used in investing activities was $320.5$42.5 million for 20112012 compared to $32.7$320.5 million used in 2010. This increase2011. The decrease was primarily due to a $262.5$281.1 million increasedecrease in payments for acquisitions of businesses a $10.2acquired, partially offset by an $8.3 million increase in amounts paid for the purchase of property, plant and equipment and a $17.6 million increase in short-term investments.equipment. Net cash used in financing activities for 20112012 was $29.3$50.6 million compared to $48.0$29.3 million used in 2010. This decrease2011. The increase was primarily attributable to the repaymentpayment of our term loan and debt issuance costs in 2010, partially offset by the $27.5 million used to repurchase our common stock in 2011. The non-cash impairment charges did not have any impact on our compliance with our debt covenants or on our cash flows.Our consolidated cash balance decreased by approximately $16.1 million from $727.0 million at December dividends. 2009 to $710.8 million at December 31, 2010. Net cash provided by operating activities for 2010 Payments Due by Period Total Less
than
1 year 1-3
years 4-5
years After
5 years $ 163.4 $ 2.7 $ 5.5 $ 155.2 $ — 5.3 1.8 2.7 0.8 — 212.9 54.3 78.8 46.8 33.0 845.2 697.2 129.6 18.4 — 266.5 41.2 214.3 11.0 — 8.0 0.3 7.3 0.4 — $ 1,501.3 $ 797.5 $ 438.2 $ 232.6 $ 33.0 Amount of Commitment Expirations by Period Total
Amounts
Committed Less
than
1 year 1-3
years 4-5
years After
5 years $ 83.1 $ 83.1 $ — $ — $ — Payments Due by Period Total $ 371.8 $ 22.4 $ 44.1 $ 305.3 $ — Capital lease obligations 4.9 2.0 2.5 0.4 — Operating leases 189.6 55.6 80.5 36.0 17.5 783.0 690.2 86.0 6.8 — 360.4 37.9 310.5 12.0 — Liabilities related to uncertain income tax positions 3.4 1.0 2.2 0.2 — Total Contractual Obligations $ 1,713.1 $ 809.1 $ 525.8 $ 360.7 $ 17.5 Other Commercial Commitments Letters of credit $ 83.6 $ 82.1 $ 1.5 $ — $ — (1) We classify these borrowings as long-term on our consolidated balance sheets becauseOn November 25, 2013, we entered into a $1.1 billion credit agreement (the "2013 Credit Agreement"), which is comprised of our intenta $750.0 million revolving credit facility (the “2013 Revolving Credit Facility”) and a $350.0 million term loan (the "Term Loan"). The proceeds of the Term Loan were used to repay the amounts on a long-term basis. These amounts are outstanding atdrawn under our discretion and are not payable until the 2011 Revolving Credit Facility expires in November 2016.previous credit agreement. As of December 31, 2011, there were borrowings of $150.0 million2013, the amount outstanding under the 2011 Revolving Credit Facility.(2) EMCOR’sour consolidated balance sheets and should not impact future cash flows, as amounts should be recovered through customer billings.(3) 21, 2011,25, 2013, we had a revolving credit agreement (the “2010 Revolving“2011 Credit Facility”Agreement”) as amended, which provided for a revolving credit facility of $550.0$750.0 million. The 2010 Revolving2011 Credit FacilityAgreement was effective February 4, 2010 and replaced an earlier revolving credit facility (the “2005 Revolving Credit Facility”) of $375.0 million.November 21, 2011. Effective November 21, 2011,25, 2013, we replaced the 2010 Revolving Credit Facility that was due to expire February 4, 2013 with an amended and restated the 2011 Credit Agreement with a $1.1 billion credit agreement (the "2013 Credit Agreement"), which is comprised of a $750.0 million revolving credit facility (the “2011“2013 Revolving Credit Facility”) and a $350.0 million term loan (the "Term Loan"). The proceeds of the Term Loan were used to repay amounts drawn under the 2011 Credit Agreement. Both facilities expire on November 25, 2018. We may increase the 2013 Revolving Credit Facility expires in November 2016 and permits us to increase our borrowing to $900.0 million$1.05 billion if additional lenders are identified and/or existing lenders are willing to increase their current commitments. Wecommitments; and we may allocate up to $250.0 million of the borrowing capacityavailable borrowings under the 20112013 Revolving Credit Facility to letters of credit which amount compares to $175.0 million underfor our account of for the 2010account of any of our subsidiaries. The 2013 Revolving Credit Facility and $125.0 million under the 2005 Revolving Credit Facility. The 2011 Revolving Credit Facility isTerm Loan are both guaranteed by certainmost of our direct andisare secured by substantially all of our assets and most of the assets of most of our subsidiaries. The 20112013 Revolving Credit Facility containsand the Term Loan contain various covenants providing for, among other things, maintenance of certain financial ratios and certain limitations on payment of dividends, common stock repurchases, investments, acquisitions, indebtedness and capital expenditures. A commitment fee is payable on the average daily unused amount ofunder the 20112013 Revolving Credit Facility, which ranges from 0.25%0.20% to 0.35%0.30%, based on certain financial tests. The fee is 0.25%0.20% of the unused amount as of December 31, 2011.2013. Borrowings under the 20112013 Revolving Credit Facility and the Term Loan bear interest at (1) a rate which is the prime commercial lending rate announced by Bank of Montreal from time to time (3.25%(2011)2013) plus 0.50%0.25% to 1.00%0.75%, based on certain financial tests or (2) United States dollar LIBOR (0.30%(0.17% at December 31, 2011)2013) plus 1.50%1.25% to 2.00%1.75%, based on certain financial tests. The interest rate in effect at December 31, 20112013 was 1.80%1.42%. Letter of credit fees issued under this facilitythe1.50%1.25% to 2.00%1.75% of the respective face amounts of theoutstanding letters of credit issued and are charged based on certain financial tests. We capitalized approximately $4.1$3.0 million of debt issuance costs associated with the 2011 Revolving2013 Credit Facility.Agreement. This amount is being amortized over the life of the facilityagreement and is included as part of interest expense. In connection with the terminationamendment and restatement of the 2010 Revolving2011 Credit Facility, $0.4Agreement, $0.3 million attributable to the acceleration of expense for debt issuance costs in connection with the 2010 Revolving2011 Credit FacilityAgreement was recorded as part of interest expense. We are required to make principal payments on the Term Loan in installments on the last day of March, June, September and December of each year, commencing with the calendar quarter ending March 31, 2014, in the amount of $4.4 million, with a final payment of all principal and interest not yet paid due and payable on November 25, 2018. As of December 31, 20112013, the balance on the Term Loan was $350.0 million. As of December 31, 2013 and December 31, 2010,2012, we had approximately $83.1$83.3 million and $82.4$84.0 million of letters of credit outstanding, respectively. We had borrowings of $150.0 million outstanding under the 20102011 Credit Agreement at December 31, 2012. There were no borrowings outstanding under the 2013 Revolving Credit Facility atas of December 31, 2010, and we have borrowings of $150.0 million outstanding under the 2011 Revolving Credit Facility at December 31, 2011, which may remain outstanding at our discretion until the 2011 Revolving Credit Facility expires. Based on the $150.0 million borrowings outstanding on the 2011 Revolving Credit Facility, if overall interest rates were to increase by 25 basis points, interest expense, net of income taxes, would increase by approximately $0.2 million in the next twelve months. Conversely, if overall interest rates were to decrease by 25 basis points, interest expense, net of income taxes, would decrease by approximately $0.2 million in the next twelve months.On September 19, 2007, we entered into an agreement providing for a $300.0 million term loan (“Term Loan”). The proceeds of the Term Loan were used to pay a portion of the consideration for an acquisition and costs and expenses incident thereto. In connection with the closing of the 2010 Revolving Credit Facility, we borrowed $150.0 million under that facility and used the proceeds along with cash on hand to prepay on February 4, 2010 all indebtedness outstanding under the Term Loan, which then terminated. In connection with this prepayment, $0.6 million attributable to the acceleration of expense for debt issuance costs associated with the Term Loan was recorded as part of interest expense.On January 27, 2009, we entered into an interest rate swap, which hedged our interest rate risk associated with the Term Loan. We de-designated $45.5 million of the interest rate swap on December 31, 2009 as it was determined that it was no longer probable that the future estimated cash flows were going to occur as originally estimated. Accordingly, we discontinued the application of hedge accounting associated for this portion of the interest rate swap, and $0.2 million and $0.3 million was expensed as part of interest expense, and removed from Accumulated other comprehensive loss, for the years ended December 31, 2010 and 2009, respectively. The interest rate swap matured in October 2010.One of our subsidiaries had a 40% interest in a venture that designs, constructs, owns, operates, leases and maintains facilities to produce chilled water for sale to customers for use in air conditioning commercial properties. The other venture partner, Baltimore Gas and Electric (a subsidiary of Constellation Energy), had a 60% interest in the venture. In 2009, the venture, using its own cash and cash from additional capital contributions, acquired its outstanding bonds in the principal amount of $25.0 million. As a result of this, we were required to make an additional capital contribution of $8.0 million to the venture. In January 2010, this venture, including our investment, was sold to a third party. As a result of this sale, we received an aggregate amount of $17.7 million for our 40% interest and recognized a pretax gain of $4.5 million, which gain is included in our United States facilities services segment and classified as a component of “Cost of Sales” on the Consolidated Statements of Operations.the Companyus to repurchase up to $100.0 million of itsour outstanding common stock. During 2011,2013, we repurchased approximately 1.20.7 million shares of our common stock for approximately $27.5$26.1 million. AsSince the inception of December 31, 2011,this repurchase program, we have repurchased 2.8 million shares of our common stock for approximately $77.5 million, and there remainedremains authorization for us to repurchase approximately $72.5$22.5 million of our shares.shares under that authorization. On December 5, 2013, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our outstanding common stock. As a result, $122.5 million was available for repurchase as of December 31, 2013. The repurchase program does not obligate the Companyus 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. Acquisitions under our repurchase program may be made from time to time asto the extent permitted by securities laws and other legal requirements.requirements, including provisions in our credit agreement placing limitations on such repurchases. The repurchase program has been and will be funded from the Company’s internal funds.2011,2013, based on our percentage-of-completion of our projects covered by Surety Bonds, our aggregate estimated exposure, assuming defaults on all our then existing contractual obligations, was approximately $1.2$0.8 billion. The Surety Bonds are issued by Surety Companies in return for premiums, which vary depending on the size and type of bond.In recent years, there has been a reduction in the aggregate Surety Bond issuance capacity of Surety Companies due to the economy and the regulatory environment. Consequently, the availability of Surety Bonds has become more limited and the terms upon which Surety Bonds are available have become more restrictive. furtheradverse changes in the surety industry, we may seek to satisfy certain customer requests for Surety Bonds by posting other forms of collateral in lieu of Surety Bonds such as letters of credit or parent company guarantees, by EMCOR Group, Inc., by seeking to convince customers to forego the requirement for Surety Bonds, by increasing our activities in business segments that rarely require Surety Bonds such as the facilitiesbuilding and industrial services segment,segments, and/or by refraining from bidding for certain projects that require Surety Bonds. There can be no assurance that we will be able to effectuate alternatives to providing Surety Bonds to our customers or to obtain, on favorable terms, sufficient additional work that does not require Surety Bonds to replace projects requiring Surety Bonds that we may decide not to pursue. Accordingly, if we were to experience a reduction in the availability of Surety Bonds, we could experience a material adverse effect on our financial position, results of operations and/or cash flows.20112013 Revolving Credit Facility that may be utilized, among other things, to meet short-term liquidity needs in the event cash generated by operating activities is insufficient or to enable us to seize opportunities to participate in joint ventures or to make acquisitions that may require access to cash on short notice or for any other reason. However, negative macroeconomic trends may have an adverse effect on liquidity. In addition to managing borrowings, our focus on the facilities services market is intended to provide an additional buffer against economic downturns inasmuch as a part of our facilities services business is characterized by annual and multi-year contracts that provide a more predictable stream of cash flow than the construction business. Short-term liquidity is also impacted by the type and length of construction contracts in place. During past economic downturns, there were typically fewer small discretionary projects from the private sector, and companies like usour competitors aggressively bid larger long-term infrastructure and public sector contracts. Performance of long duration contracts typically requires greater amounts of working capital. While we strive to maintain a net over-billed position with our customers,$326.9$290.6 million and $368.4$290.5 million as of December 31, 20112013 and 2010,2012, respectively.20112013 Revolving Credit Facility. Based upon our current credit ratings and financial position, we can reasonably expect to be able to incur long-term debt to fund acquisitions. Over the long term, our primary revenue risk factor continues to be the level of demand for non- residentialnon-residential construction services and building and industrial services, which is influenced by macroeconomic trends including interest rates and governmental economic policy. In addition, our ability to perform work is critical to meeting long-term liquidity requirements. do not expect the disposition of our Canadian subsidiary to have a material impact on our future liquidity.We believe that current cash balances and our borrowing capacity available under the 2011 Revolving Credit Facility or other forms of financing available to us through borrowings, combined with cash expected to be generated from operations, will besufficient to provide our short-term and foreseeable long-term liquidity needs and meet our expected capital expenditure requirements. However, we are a party to lawsuits and other proceedings in which other parties seek to recover from us amounts ranging from a few thousand dollars to over $10.0 million. We do not believe that any such matters will have a materially adverse effect on our financial position, results of operations or liquidity. our plans to pay a regular quarterly dividend of $.05$0.05 per common share. We have paid quarterly dividends since October 25, 2011. On December 7, 2012, our Board of Directors declared a special dividend of $0.25 per share, payable in December 2012, and announced its intention to increase the regular quarterly dividend to $0.06 per share. In addition, at the December 7, 2012 meeting of $.05our Board of Directors, the regular quarterly dividend that would have been paid in January 2013 was declared, its amount increased to $0.06 per common share on October 25, 2011 and on January 31,its payment date accelerated to December 28, 2012. In December 2013, our Board of Directors announced its intention to increase the regular quarterly dividend to $0.08 per share commencing with the dividend to be paid in the first quarter of 2014. We expect that such quarterly dividends will be paid in the foreseeable future. Prior to October 25, 2011, no cash dividends had been paid on the Company’sCompany's common stock. Our revolving credit facility limitsagreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of the credit facilityagreement currently materially limit our ability to pay a quarterly dividend of $.05$0.08 per share for the foreseeable future. The payment of dividends has been and will be funded from our operations.20112013 and 2010,2012, we utilized approximately $82.9$83.3 million and $82.2$84.0 million, respectively, of letters of credit obtained under our 20112013 Revolving Credit Facility and our 2010 Revolving2011 Credit Facility,Agreement, respectively, as collateral for insurance obligations.2—2 - Summary of Significant Accounting Policies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data for further information regarding new accounting standards recently issued and/or adopted by us.2—2 - Summary of Significant Accounting Policies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Form 10-K. We believe that some of the more critical judgment areas in the application of accounting policies that affect our financial condition and results of operations are the impact of changes in the estimates and judgments pertaining to: (a) revenue recognition from (i) long-term construction contracts for which the percentage-of-completion method of accounting is used and (ii) services contracts; (b) collectibility or valuation of accounts receivable; (c) insurance liabilities; (d) income taxes; and (e) goodwill and identifiable intangible assets.Recognition—Construction-TypeRecognition-Construction-Type and Production-Type Contracts”, and, accordingly, is the method used for revenue recognition within our20112013 and 2010,2012, costs and estimated earnings in excess of billings on uncompleted contracts included unbilled revenues for unapproved change orders of approximately $14.5$9.3$13.8 million, respectively, and claims of approximately $1.6$0.4 million and $6.3$0.7 million, respectively. In addition, accounts receivable as of December 31, 20112013 and 20102012 included claims of approximately $0.2$2.9 million and $1.8$0.8 million respectively, plus unapproved change orders and, respectively. In addition, there are contractually billed amounts and retention related to such contracts of approximately $40.4$56.1 million and $42.7$41.0 million as of December 31, 2013 and 2012, respectively. Generally, contractually billed amounts will not be paid by the customer to us until final resolution of related claims. Due to uncertainties inherent in estimates employed in applying percentage-of-completion accounting, estimates may be revised as project work progresses. Application of percentage-of-completion accounting requires that the impact of revised estimates be reported prospectively in the consolidated financial statements. In addition to revenue recognition for long-term construction contracts, we recognize revenues from the performance of facilities services for maintenance, repair and retrofit work consistent with the performance of the services, which are generally on a pro-rata basis over the life of the contractual arrangement. Expenses related to all services arrangements are recognized as incurred. Revenues related to the engineering, manufacturing and repairing of shell and tube heat exchangers are recognized when the product is shipped and all other revenue recognition criteria have been met. Costs related to this work are included in inventory until the product is shipped. Provisions for the entirety of estimated losses on contracts are made in the period in which such losses are determined.(recovery of) doubtful accounts during 2011, 20102013, 2012 and 20092011 amounted to approximately $2.2$3.5 million $(5.1), $1.2 million and $7.2$2.2 million, respectively. At December 31, 20112013 and 2010,2012, our accounts receivable of $1,187.8$1,268.2 million and $1,090.9$1,222.0 million, respectively, included allowances for doubtful accounts of $16.7$11.9 million and $17.3$11.5 million, respectively. The decreaseincrease in our allowance for doubtful accounts was primarily due to the recovery of amounts previously determined to be uncollectible and the write-off of accounts receivable against the allowanceincrease in our provision for doubtful accounts.accounts, primarily within our United States building services segment. Specific accounts receivable are evaluated when we believe a customer may not be able to meet its financial obligations due to deterioration of its financial condition or its credit ratings. The allowance for doubtful accounts requirements are based on the best facts available and are re-evaluated and adjusted on a regular basis as additional information is received.workers’workers' compensation, automobile liability, general liability and property claims, have self-insured retentions for certain other casualty claims and are self-insured for employee-related health care claims. Losses are recorded based upon estimates of our liability for claims incurred and for claims incurred but not reported. The liabilities are derived from known facts, historical trends and industry averages utilizing the assistance of an actuary to determine the best estimate for the majority of these obligations. We believe the liabilities recognized on our balance sheets for these obligations are adequate. However, such obligations are difficult to assess and estimate due to numerous factors, including severity of injury, determination of liability in proportion to other parties, timely reporting of occurrences and effectiveness of safety and risk management programs. Therefore, if our actual experience differs from the assumptions and estimates used for recording the liabilities, adjustments may be required and will be recorded in the period that the experience becomes known.20112013 and 2012 of $29.0$126.8 million and net deferred income tax assets of $5.2$35.6 million, at December 31, 2010,respectively, primarily resulting from differences between the carrying value and income tax basis of certain identifiable intangible assets and depreciable fixed assets, which will impact our taxable income in future periods. A valuation allowance is required when it is more likely than not that all or a portion of a deferred income tax asset will not be realized. As of December 31, 20112013 and 2010,2012, the total valuation allowance on gross deferred income tax assets, related solely to state net operating carryforwards, was approximately $3.4$2.2 million and $0.8$2.5 million, respectively.2011,2013, we had $566.8$834.8 million and $370.4$541.5 million, respectively, of goodwill and net identifiable intangible assets (primarily consisting of our contract backlog, developed technology/vendor network, customer relationships,2010,2012, goodwill and net identifiable intangible assets were $406.8$245.1$343.7 million, respectively. The changes to goodwill and net identifiable intangible assets (net of accumulated amortization) since December 31, 2010 were related to: (a) the acquisition of three companies during 2011, (b) the finalization of the purchase price accounting for the acquisition of a company during the fourth quarter of 2010 and (c) earn-outs paid and/or accrued related to previous acquisitions. During 2011, the purchase price accounting for acquisitions made during the first quarter of 2011 and the fourth quarter of 2010 was finalized. As a result, identifiable intangible assets ascribed to its goodwill, contract backlog, customer relationships, trade name and related non-competition agreements were adjusted with an insignificant impact. The determination of related estimated useful lives for identifiable intangible assets and whether those assets are impaired involves significant judgments based upon short and long-term projections of future performance. These forecasts reflect assumptions regarding the ability to successfully integrate acquired companies, as well as macroeconomic conditions. ASC Topic 350, “Intangibles—Goodwill“Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, but instead must be tested at least annually for impairment (which we test each October 1, absent any impairment indicators), and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives.level utilizinglevel. Our reporting units are consistent with the reportable segments identified in Note 17, "Segment Information", of the notes to consolidated financial statements. In assessing whether our goodwill is impaired, we first qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount using various factors. If after this assessment we are unable to determine that the fair value of a reporting unit exceeds the carrying amount, we proceed to the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting unit’sunit's goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit’sunit's goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to operations. The weighted average cost of capital used in our annual testing for impairment as of October 1, 20112013 was 13.6%12.1%, 12.6% and 12.3%11.1% for our domestic construction segments, our United States building services segment and our United States facilitiesindustrial services segment, respectively. The perpetual growth rate used for our annual testing was 2.7% for our domestic segments. Unfavorable changes in these key assumptions may affect future testing results and cause us to fail step one of the goodwill impairment testing process. For example, keeping all other assumptions constant, a 50 basis point increase in the weighted average costs of capital would cause the estimated fair value of our United Stated industrial services segment to approach its carrying value. A 50 basis point increase in the weighted average costs of capital would not significantly reduce the excess of the estimated fair value compared to the carrying value for any of our other domestic segments. In addition, keeping all other assumptions constant, a 50 basis point reduction in the perpetual growth rate would not significantly reduce the excess of the estimated fair value compared to the carrying value for any of our domestic segments. For the years ended December 31, 20112013, 2012 and 2009,2011, no impairment of our goodwill was recognized.During the third quarter of 2010 and prior to our October 1 annual impairment test, we concluded that impairment indicators may have existed within the United States facilities services segment based upon the year to date results and recent forecasts. As a result of that conclusion, we performed a step one test as prescribed under ASC 350 for that particular reporting unit which concluded that impairment indicators existed within that reporting unit due to significant declines in year to date revenues and operating margins which caused us to revise our expectations for the strength of a near term recovery in our financial models for businesses within that reporting unit. Specifically, we reduced our net sales growth rates and operating margins within our discounted cash flow model, as well as our terminal value growth rates. In addition, we estimated a higher participant risk adjusted weighted average cost of capital. Therefore, the required second step of the assessment for the reporting unit was performed in which the implied fair value of that reporting unit’s goodwill was compared to the book value of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, that is, the estimated fair value of the reporting unit is allocated to all of those assets and liabilities of that unit (including both recognized and unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the estimated fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting unit’s goodwill is greater than the implied fair value of that reporting unit’s goodwill, an impairment loss is recognized in the amount of the excess and is charged to operations. We determined the fair value of the reporting unit using discounted estimated future cash flows. The weighted average cost of capital used in testing for impairment at the interim date was 12.5% with a perpetual growth rate of 2.8% for our United States facilities services segment. As a result of our interim impairment assessment, we recognized a $210.6 million non-cash goodwill impairment charge in the third quarter of 2010. Additionally, we performed our annual impairment test as of October 1, and no additional impairment of our goodwill was recognized in the fourth quarter of 2010. The weighted average cost of capital used in our annual testing for impairment was 13.2% and 12.2% for our domestic construction segments and our United States facilities services segment, respectively. The perpetual growth rate used for our annual testing was 3.0% for our domestic construction segments and 2.8% for our United States facilities services segment, respectively.2011,2013, we had $566.8$834.8 million of goodwill on our balance sheet and, of this amount, approximately 64.3%46.1% relates to our United States facilitiesindustrial services segment, approximately 35.0%27.4% relates to our United States building services segment, approximately 26.0% relates to our United States mechanical construction and facilities services segment and approximately 0.7%0.5% relates to our United States electrical construction and facilities servicesfacilitiesindustrial services, United$88.3$45.0 million, $346.9$126.0 million, $519.9 million and $285.6$366.8 million, respectively.facilitiesbuilding services segment. During the second and third quarters of 2010, we recorded non-cash impairment charges of $35.5 million associated with the fair value of trade names from prior acquisitions reported within our United States facilities services segment. The annual impairment review of our trade names for the year ended December 31, 2009 resulted in an $11.5 million non-cash impairment charge as a result of a change in the fair value of trade names associated with certain prior acquisitions reported within our United States facilities services and United States mechanical construction and facilities services segments. The current yearThis impairment primarily resultsresulted from both lower forecasted revenues from, and operating margins at, specific companies within our United States facilitiesbuilding services segment.yearsyear ended December 31, 2011 and 2009.2011. As a result of these reviews,this review, we recognized a $2.8 million non-cash impairment charge as a result of a change in the fair value of customer relationships associated with certain prior acquisitions reported within our United States facilitiesbuilding services segment for the year ended December 31, 2011 and a $2.0 million non-cash impairment charge as a result of a change in2011. For the fair value of customer relationships associated with certain prior acquisitions reported within our United States mechanical construction and facilities services segment for the yearyears ended December 31, 2009. For the year ended December 31, 20102013 and 2012, no impairment of our other identifiable intangible assets was recognized.Much of the informationThose assumptions and estimates can change in future periods, and other factors used in assessing fair value isare outside the control of management, such as interest rates, and these assumptions and estimates can change in future periods.rates. There can be no assurances that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset impairment testing will prove to be accurate predictions of the future. If our assumptions regarding future business plansperformance or anticipated growth rates and/or margins are not achieved, or there is a rise in interest rates, we may be required, as we did in 2011, 2010 and 2009 to record further goodwill and/or identifiable intangible asset impairment charges in future periods.relatesrelated to customer relationships and $1.0 million relatesrelated to trade names. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such a charge would be material.except as discussed below, during the years ended December 31, 20112013 and 2010,2012, including trading or speculating on changes in interest rates or commodity prices of materials used in our business.2011 Revolving2013 Credit Facility and were exposed to market risk as it related to the interest rate swap.Agreement. Borrowings under the 2011 Revolving2013 Credit FacilityAgreement bear interest at variable rates. For further information on borrowing rates and interest rate sensitivity, refer to the Liquidity and Capital Resources discussion in Item 7. Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations. As of December 31, 2011,2013, there were no borrowings of $150.0 million outstanding under the 20112013 Revolving Credit Facility.Facility and the balance on the Term Loan was $350.0 million. Based on the $150.0$350.0 million borrowings outstanding on the 2011 Revolving2013 Credit Facility,Agreement, if overall interest rates were to increase by 25 basis$0.2$0.4 million in the next twelve months. Conversely, if overall interest rates were to decrease by 25 basis points, interest expense, net of income taxes, would decrease by approximately $0.2$0.4 million in the next twelve months. As of December 31, 2009, the fair value of our interest rate swap was a net liability of $1.2 million. Under the terms of the interest rate swap, which matured in October 2010, we paid the counterparty a fixed rate of interest of 2.225% and received a variable rate of interest from the same counterparty.customers’customers' ability to pay these obligations is negatively impacted by economic conditions. We continually monitor the creditworthiness of our customers andManagement’sManagement's Discussion and Analysis of Financial Condition and Results of Operations.both our construction and facilitiesbuilding and industrial services operations. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of over 8,0008,500 vehicles. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable. Additionally, our fixed price contracts do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to projects in progress. December 31, 2011 2010 ASSETS $ 511,322 $ 710,836 1,187,832 1,090,927 114,836 88,253 44,914 32,778 77,749 57,373 1,936,653 1,980,167 5,618 6,211 101,663 88,615 566,805 406,804 370,373 245,089 32,964 28,656 $ 3,014,076 $ 2,755,542 LIABILITIES AND EQUITY $ — $ — 1,522 489 477,801 416,715 441,695 456,690 204,785 192,407 205,110 166,398 1,330,913 1,232,699 150,000 150,000 3,335 1,184 284,697 208,814 1,768,945 1,592,697 — — 681 690 417,136 427,613 (78,649 ) (42,411 ) 910,042 782,576 (14,476 ) (15,525 ) 1,234,734 1,152,943 10,397 9,902 1,245,131 1,162,845 $ 3,014,076 $ 2,755,542 December 31,
2013 December 31,
2012ASSETS Current assets: Cash and cash equivalents $ 439,813 $ 605,303 Accounts receivable, less allowance for doubtful accounts of $11,890 and $11,472, respectively 1,268,226 1,221,956 Costs and estimated earnings in excess of billings on uncompleted contracts 90,727 93,061 Inventories 52,123 50,512 Prepaid expenses and other 79,216 73,621 Total current assets 1,930,105 2,044,453 Investments, notes and other long-term receivables 6,799 4,959 Property, plant and equipment, net 123,414 116,631 Goodwill 834,825 566,588 Identifiable intangible assets, net 541,497 343,748 Other assets 29,275 30,691 Total assets $ 3,465,915 $ 3,107,070 LIABILITIES AND EQUITY Current liabilities: Borrowings under revolving credit facility $ — $ — Current maturities of long-term debt and capital lease obligations 19,332 1,787 Accounts payable 487,738 490,621 Billings in excess of costs and estimated earnings on uncompleted contracts 381,295 383,527 Accrued payroll and benefits 237,779 224,555 Other accrued expenses and liabilities 172,599 194,029 Total current liabilities 1,298,743 1,294,519 Borrowings under revolving credit facility — 150,000 Long-term debt and capital lease obligations 335,331 4,112 Other long-term obligations 352,215 301,260 Total liabilities 1,986,289 1,749,891 Equity: EMCOR Group, Inc. stockholders' equity: Preferred stock, $0.01 par value, 1,000,000 shares authorized, zero issued and outstanding — — Common stock, $0.01 par value, 200,000,000 shares authorized, 67,627,359 and 68,010,419 shares issued, respectively 676 680 Capital surplus 408,083 416,104 Accumulated other comprehensive loss (65,777 ) (81,040 ) Retained earnings 1,133,873 1,022,239 Treasury stock, at cost 730,841 and 1,046,257 shares, respectively (10,590 ) (11,903 ) Total EMCOR Group, Inc. stockholders’ equity 1,466,265 1,346,080 Noncontrolling interests 13,361 11,099 Total equity 1,479,626 1,357,179 Total liabilities and equity $ 3,465,915 $ 3,107,070 2011 2010 2009 $ 5,613,459 $ 4,851,953 $ 5,227,699 4,879,510 4,158,430 4,443,474 733,949 693,523 784,225 518,121 472,135 517,302 1,240 1,835 3,275 3,795 246,081 13,526 210,793 (26,528 ) 250,122 (11,261 ) (12,153 ) (7,872 ) 1,820 2,657 4,708 — 7,900 — 201,352 (28,124 ) 246,958 76,764 53,711 92,553 124,588 (81,835 ) 154,405 9,083 (849 ) 8,672 133,671 (82,684 ) 163,077 (2,845 ) (4,007 ) (2,321 ) $ 130,826 $ (86,691 ) $ 160,756 $ 1.82 $ (1.30 ) $ 2.31 0.14 (0.01 ) 0.13 $ 1.96 $ (1.31 ) $ 2.44 $ 1.78 $ (1.30 ) $ 2.25 0.13 (0.01 ) 0.13 $ 1.91 $ (1.31 ) $ 2.38 $ 0.05 $ — $ — 2013 2012 2011 Revenues $ 6,417,158 $ 6,346,679 $ 5,613,459 Cost of sales 5,604,100 5,540,325 4,879,510 Gross profit 813,058 806,354 733,949 Selling, general and administrative expenses 591,063 556,242 518,121 Restructuring expenses 11,703 145 1,240 Impairment loss on identifiable intangible assets — — 3,795 Operating income 210,292 249,967 210,793 Interest expense (8,769 ) (7,275 ) (11,261 ) Interest income 1,128 1,556 1,820 Income from continuing operations before income taxes 202,651 244,248 201,352 Income tax provision 75,297 95,362 76,764 Income from continuing operations 127,354 148,886 124,588 Income from discontinued operation, net of income taxes — — 9,083 Net income including noncontrolling interests 127,354 148,886 133,671 Less: Net income attributable to noncontrolling interests (3,562 ) (2,302 ) (2,845 ) Net income attributable to EMCOR Group, Inc. $ 123,792 $ 146,584 $ 130,826 Basic earnings per common share: From continuing operations attributable to EMCOR Group, Inc. common stockholders $ 1.85 $ 2.20 $ 1.82 From discontinued operation — — 0.14 Net income attributable to EMCOR Group, Inc. common stockholders $ 1.85 $ 2.20 $ 1.96 Diluted earnings per common share: From continuing operations attributable to EMCOR Group, Inc. common stockholders $ 1.82 $ 2.16 $ 1.78 From discontinued operation — — 0.13 Net income attributable to EMCOR Group, Inc. common stockholders $ 1.82 $ 2.16 $ 1.91 Dividends declared per common share $ 0.18 $ 0.51 $ 0.05 CASH FLOWS 2011 2010 2009 $ 133,671 $ (82,684 ) $ 163,077 27,426 25,498 26,768 26,350 16,417 18,977 2,238 (5,126 ) 7,178 8,826 (15,390 ) 2,922 (9,127 ) — — — (12,409 ) — 592 127 387 (3,619 ) (1,474 ) (2,203 ) (1,301 ) (843 ) (2,706 ) 2,438 2,703 1,530 (2,772 ) (394 ) (304 ) 3,795 246,081 13,526 5,447 5,742 7,454 — (25,916 ) — 606 958 6,177 (75,529 ) (8,342 ) 354,206 (10,549 ) 2,118 20,135 (33,816 ) 8,757 18,472 34,727 16,992 (135,107 ) (16,278 ) (73,714 ) (87,645 ) 49,608 (42,639 ) (19,014 ) 6,692 13,065 (33,058 ) 149,425 69,527 360,772 (301,306 ) (39,902 ) (21,686 ) 26,627 — — — 25,570 — 1,409 1,032 1,215 (29,581 ) (19,359 ) (24,100 ) (17,639 ) — — (28 ) (65 ) (8,000 ) (320,518 ) (32,724 ) (52,571 ) — 153,000 — — (3,000 ) — (4,147 ) (200,828 ) (3,041 ) (1,095 ) (430 ) (1,085 ) (3,336 ) — — (27,523 ) — — 5,608 2,818 2,801 (1,256 ) (875 ) (1,660 ) 2,310 2,305 2,165 (1,118 ) — — (2,350 ) (2,500 ) (1,350 ) 3,619 1,474 2,203 (29,288 ) (48,036 ) 33 867 (4,906 ) 12,872 (199,514 ) (16,139 ) 321,106 710,836 726,975 405,869 $ 511,322 $ 710,836 $ 726,975 2013 2012 2011 Net income including noncontrolling interests $ 127,354 $ 148,886 $ 133,671 Other comprehensive income (loss), net of tax: (614 ) 120 (14,182 ) 15,877 (2,511 ) (22,056 ) Other comprehensive income (loss) 15,263 (2,391 ) (36,238 ) Comprehensive income 142,617 146,495 97,433 Less: Comprehensive income attributable to the noncontrolling interests (3,562 ) (2,302 ) (2,845 ) Comprehensive income attributable to EMCOR Group, Inc. $ 139,055 $ 144,193 $ 94,588 (1) (2) 2013 2012 2011 Cash flows - operating activities: Net income including noncontrolling interests $ 127,354 $ 148,886 $ 133,671 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 36,310 31,204 27,426 Amortization of identifiable intangible assets 31,028 29,762 26,350 Provision for doubtful accounts 3,533 1,163 2,238 Deferred income taxes 11,857 6,626 8,826 Gain on sale of discontinued operation, net of income taxes — — (9,127 ) (Gain) loss on sale of property, plant and equipment (903 ) 272 592 Excess tax benefits from share-based compensation (4,624 ) (7,083 ) (3,619 ) Equity income from unconsolidated entities (1,048 ) (930 ) (1,301 ) Non-cash expense for amortization of debt issuance costs 1,497 1,212 2,438 Non-cash income from contingent consideration arrangements (6,793 ) (6,381 ) (2,798 ) Non-cash expense for impairment of identifiable intangible assets — — 3,795 Non-cash share-based compensation expense 6,943 6,766 5,447 Non-cash (income) expense from changes in unrecognized income tax benefits (10,539 ) 5,946 (870 ) Distributions from unconsolidated entities 679 887 606 Changes in operating assets and liabilities, excluding the effect of businesses acquired: Increase in accounts receivable (3,221 ) (12,852 ) (75,529 ) Increase in inventories (865 ) (5,597 ) (10,549 ) Decrease (increase) in costs and estimated earnings in excess of billings on uncompleted contracts 2,807 24,126 (33,816 ) (Decrease) increase in accounts payable (12,904 ) 5,425 34,727 Decrease in billings in excess of costs and estimated earnings on uncompleted contracts (2,793 ) (62,533 ) (16,278 ) (Decrease) increase in accrued payroll and benefits and other accrued expenses and liabilities (14,761 ) 24,345 49,634 Changes in other assets and liabilities, net (13,488 ) (6,836 ) 7,562 Net cash provided by operating activities 150,069 184,408 149,425 Cash flows - investing activities: Payments for acquisitions of businesses, net of cash acquired, and related contingent consideration arrangement (454,671 ) (20,613 ) (301,306 ) Proceeds from sale of discontinued operation, net of cash sold — — 26,627 Proceeds from sale of property, plant and equipment 2,930 3,070 1,409 Purchase of property, plant and equipment (35,497 ) (37,875 ) (29,581 ) Investments in and advances to unconsolidated entities and joint ventures (800 ) — (28 ) Purchase of short-term investments — (22,433 ) (17,639 ) Maturity of short-term investments 4,616 35,305 — Net cash used in investing activities (483,422 ) (42,546 ) (320,518 ) Cash flows - financing activities: Proceeds from revolving credit facility 250,000 — — Repayments of revolving credit facility (400,000 ) — — Borrowings from long-term debt 350,000 — — Repayments of long-term debt and debt issuance costs (3,013 ) (40 ) (4,147 ) Repayments of capital lease obligations (1,692 ) (1,978 ) (1,095 ) Dividends paid to stockholders (12,080 ) (34,073 ) (3,336 ) Repurchase of common stock (26,070 ) (23,912 ) (27,523 ) Proceeds from exercise of stock options 5,172 8,786 5,608 Payments to satisfy minimum tax withholding (927 ) (1,654 ) (1,256 ) Issuance of common stock under employee stock purchase plan 2,854 2,549 2,310 Payments for contingent consideration arrangements (537 ) (5,748 ) (1,118 ) Distributions to noncontrolling interests (1,300 ) (1,600 ) (2,350 ) Excess tax benefits from share-based compensation 4,624 7,083 3,619 Net cash provided by (used in) financing activities 167,031 (50,587 ) (29,288 ) Effect of exchange rate changes on cash and cash equivalents 832 2,706 867 (Decrease) increase in cash and cash equivalents (165,490 ) 93,981 (199,514 ) Cash and cash equivalents at beginning of year 605,303 511,322 710,836 Cash and cash equivalents at end of period $ 439,813 $ 605,303 $ 511,322 ANDCOMPREHENSIVE INCOME (LOSS) EMCOR Group, Inc. Stockholders Total Comprehensive
income (loss) Common
stock Capital
surplus Accumulated
other
comprehensive
(loss) income (1) Retained
earnings Treasury
stock Noncontrolling
interests $ 1,050,769 $ 681 $ 397,895 $ (49,318 ) $ 708,511 $ (14,424 ) $ 7,424 163,077 $ 163,077 — — — 160,756 — 2,321 5,830 5,830 — 8 5,822 — — — (8,612 ) (8,612 ) — — (8,612 ) — — — (746 ) (746 ) — — (746 ) — — — 155 155 — — 155 — — — 159,704 (2,321 ) $ 157,383 (1,660 ) — — — — (1,660 ) — 9,384 6 8,745 — — 633 — 2,165 — 2,165 — — — — (1,350 ) — — — — — (1,350 ) 5,492 — 5,492 — — — — 1,962 — 1,962 — — — — 1,226,466 687 416,267 (52,699 ) 869,267 (15,451 ) 8,395 (82,684 ) $ (82,684 ) — — — (86,691 ) — 4,007 3,196 3,196 — — 3,196 — — — 6,501 6,501 — — 6,501 — — — 591 591 — — 591 — — — (72,396 ) (4,007 ) $ (76,403 ) (875 ) — — — — (875 ) — 4,103 3 3,299 — — 801 — 2,305 — 2,305 — — — — (2,500 ) — — — — — (2,500 ) 5,742 — 5,742 — — — — 1,162,845 690 427,613 (42,411 ) 782,576 (15,525 ) 9,902 133,671 $ 133,671 — — — 130,826 — 2,845 (14,182 ) (14,182 ) — — (14,182 ) — — — (22,056 ) (22,056 ) — — (22,056 ) — — — 97,433 (2,845 ) $ 94,588 (1,256 ) — — — — (1,256 ) — 11,561 3 9,253 — — 2,305 — 2,310 — 2,310 — — — — (3,336 ) — 24 — (3,360 ) — — (27,523 ) (12 ) (27,511 ) — — — — (2,350 ) — — — — — (2,350 ) 5,447 — 5,447 — — — — $ 1,245,131 $ 681 $ 417,136 $ (78,649 ) $ 910,042 $ (14,476 ) $ 10,397 EMCOR Group, Inc. Stockholders Total Balance, December 31, 2010 $ 1,162,845 $ 690 $ 427,613 $ (42,411 ) $ 782,576 $ (15,525 ) $ 9,902 Net income including noncontrolling interests 133,671 — — — 130,826 — 2,845 Other comprehensive loss (36,238 ) — — (36,238 ) — — — (1,256 ) — — — — (1,256 ) — 11,561 3 9,253 — — 2,305 — Common stock issued under employee stock purchase plan 2,310 — 2,310 — — — — Common stock dividends (3,336 ) — 24 — (3,360 ) — — Repurchase of common stock (27,523 ) (12 ) (27,511 ) — — — — Distributions to noncontrolling interests (2,350 ) — — — — — (2,350 ) Share-based compensation expense 5,447 — 5,447 — — — — Balance, December 31, 2011 $ 1,245,131 $ 681 $ 417,136 $ (78,649 ) $ 910,042 $ (14,476 ) $ 10,397 Net income including noncontrolling interests 148,886 — — — 146,584 — 2,302 Other comprehensive loss (2,391 ) — — (2,391 ) — — — 15,823 8 13,242 — — 2,573 — Common stock issued under employee stock purchase plan 2,549 — 2,549 — — — — Common stock dividends (34,073 ) 314 (34,387 ) Repurchase of common stock (23,912 ) (9 ) (23,903 ) — — — — Distributions to noncontrolling interests (1,600 ) — — — — — (1,600 ) Share-based compensation expense 6,766 — 6,766 — — — — Balance, December 31, 2012 $ 1,357,179 $ 680 $ 416,104 $ (81,040 ) $ 1,022,239 $ (11,903 ) $ 11,099 Net income including noncontrolling interests 127,354 — — — 123,792 — 3,562 Other comprehensive income 15,263 — — 15,263 — — — 9,483 3 8,167 — — 1,313 — Common stock issued under employee stock purchase plan 2,854 — 2,854 — — — — Common stock dividends (12,080 ) — 78 — (12,158 ) — — Repurchase of common stock (26,070 ) (7 ) (26,063 ) — — — — Distributions to noncontrolling interests (1,300 ) — — — — — (1,300 ) Share-based compensation expense 6,943 — 6,943 — — — — Balance, December 31, 2013 $ 1,479,626 $ 676 $ 408,083 $ (65,777 ) $ 1,133,873 $ (10,590 ) $ 13,361 (1) $5.6$5.6 million and $(84.2), $(84.2) million, respectively. As of December 31, 2010, represents cumulative foreign currency translation and post retirement liability adjustments of $19.8 million, $(62.2) million, respectively. As of December 31, 2009, represents cumulative foreign currency translation, post retirement liability adjustments and deferred loss on interest rate swap of $16.6 million, $(68.7) million and $(0.6) million, respectively.(2) (3) $6.2$5.2 million in 2011, $2.02013, $8.7 million in 20102012 and $2.2$6.2 million in 2009.2011.(4)Represents redistributed portion of acquisition-related payments to certain employees of a company, the outstanding stock of which we acquired. These employees were not shareholders of that company. Such payments were dependent on continuing employment with us and were recorded as non-cash compensation expense.(5)Includes a $15.5 million foreign currency translation reversal relating to the disposition of our Canadian subsidiary, which was included as part of the gain on sale of discontinued operation.1—1- NATURE OF OPERATIONSStates, the United KingdomStates. In addition, we provide a number of building services and in the world.industrial services. We specialize principally in providing construction services relating to electrical and mechanical systems in facilitiesall types of all typesnon-residential facilities and in providing comprehensivevarious services forrelating to the operation, maintenance and management of substantially all aspects of such facilities, commonly referred to as “facilities services.”2—2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES our interest in our Canadian subsidiary in August 2011 and (b) certain reclassifications of prior period amounts from our United States building services segment to conform to current year presentation.Our reportable segments reflect certain reclassifications of prior year amounts from our United States mechanical construction and facilities services segment to our United States facilities services segment due to changes in our internal reporting structure.Recognition—Construction-TypeRecognition-Construction-Type and Production-Type Contracts”. Percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion. Certain of our electrical contracting business units measure percentage-of-completion by the percentage of labor costs incurred to date for each contract to the estimated total labor costs for such contract. Pre-contract costs from our construction projects are generally expensed as incurred. Revenues from the performance of facilities services for maintenance, repair and retrofit work are recognized consistent with the performance of the services, which areEMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued)management’smanagement's intention to pursue and litigate such claims, if necessary, until a decisiondetermination or settlement is reached. Unapproved change orders and claims also involve the use of estimates, and it is reasonably possible that revisions to the estimated recoverable amounts of recorded claims and unapproved change orders may be made in the near term. If we do not successfully resolve these matters, a net expense (recorded as a reduction in revenues) may be required, in addition to amounts that may have been previously provided for. We record the profit associated with the settlement of claims upon receipt of final payment. During 2012, we recognized approximately $9.5 million of profit from the settlement and payment of two claims within the United States electrical construction and facilities services segment. There was no significant profit recognized from settlements or payment of claims in 2013. Claims against us are recognized when a loss is considered probable and amounts are reasonably determinable.20112013 and 20102012 were as follows (in thousands): 2011 2010 $ 7,598,325 $ 7,274,211 830,622 811,651 8,428,947 8,085,862 8,755,806 8,454,299 $ (326,859 ) $ (368,437 ) 2013 2012 Costs incurred on uncompleted contracts $ 7,794,620 $ 7,675,049 Estimated earnings, thereon 835,820 876,496 8,630,440 8,551,545 Less: billings to date 8,921,008 8,842,011 $ (290,568 ) $ (290,466 ) 20112013 and 20102012 under the following captions (in thousands): 2011 2010 $ 114,836 $ 88,253 (441,695 ) (456,690 ) $ (326,859 ) $ (368,437 ) 2013 2012 Costs and estimated earnings in excess of billings on uncompleted contracts $ 90,727 $ 93,061 Billings in excess of costs and estimated earnings on uncompleted contracts (381,295 ) (383,527 ) $ (290,568 ) $ (290,466 ) EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued)20112013 and 2010,2012, costs and estimated earnings in excess of billings on uncompleted contracts included unbilled revenues for unapproved change orders of approximately $14.5$19.2 million and $9.3$13.8 million, respectively, and claims of approximately $1.6$0.4 million and $6.3$0.7 million, respectively. In addition, accounts receivable as of December 31, 20112013 and 20102012 included claims$0.2$2.9 million and $1.8$0.8 million respectively, plus, respectively. Additionally, there are contractually billed amounts and retention related to such contracts of $40.4$56.1 million and $42.7$41.0 million as of December 31, 2013 and 2012, respectively. Generally, contractually billed amounts will not be paid by the customer to us until final resolution of related claims.relatedrelating to the performance of long-term contracts. The contracting cycle for certain long-termterm of our contracts may extend beyondranges from one year,month to four years and, accordingly, collection or payment of amounts relatedrelating to these contracts may extend beyond one year. Accounts receivable at December 31, 20112013 and 20102012 included $188.1$189.7 million and $213.8$178.6 million, respectively, of retainage billed under terms of theseour contracts. We estimate that approximately 77%85% of retainage recorded at December 31, 20112013 will be collected during 2012.2014. Accounts payable at December 31, 20112013 and 20102012 included $39.5$47.0 million and $42.8$39.7 million, respectively, of retainage withheld under terms of the contracts. We estimate that approximately 85%95% of retainage withheld at December 31, 20112013 will be paid during 2012.thetheir financial obligation,obligations, as well as historical collection and write-off experience. These amounts are re-evaluated and adjusted on a regular basis as additional information is received. Actual write-offs are charged against the allowance when collection efforts have been unsuccessful. At December 31, 20112013 and 2010,2012, our accounts receivable of $1,187.8$1,268.2 million and $1,090.9$1,222.0 million, respectively, included allowances for doubtful accounts of $16.7$11.9 million and $17.3$11.5 million, respectively. The provision for (recovery of) doubtful accounts during 2011, 20102013, 2012 and 20092011 amounted to approximately $2.2$3.5 million $(5.1), $1.2 million and $7.2$2.2 million, respectively.EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued)2011, 20102013, 2012 and 2009,2011, no impairment of property, plant and equipment was recognized.9—8 - Goodwill and Identifiable Intangible Assets of the notes to consolidated financial statements for additional information.20112013 and 2010,2012, the estimated current portion of undiscounted insurance liabilities of $23.7$29.2 million and $21.8$25.5 million, respectively, were included in “Other accrued expenses and liabilities” in the accompanying Consolidated Balance Sheets. The estimated non-current portion of the undiscounted insurance liabilities included in “Other long-term obligations” at December 31, 20112013 and 20102012 were $104.9$112.8 million and $98.5$108.1 million, respectively.15—13 - Share-Based Compensation Plans of the notes to consolidated financial statements for additional information regarding the share-based compensation plans and programs.“Compensation—Stock“Compensation-Stock Compensation” (“ASC 718”). ASC 718 requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which isEMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued)2011,2013, we adopted the accounting pronouncement issued by the FASB updating existing guidance on revenue recognition for arrangements with multiple deliverables. This guidance eliminates the requirement that all undelivered elements must have objective and reliable evidence of fair value before a company can recognize the portion of the consideration attributed to the delivered item. This may allow some companies to recognize revenue on transactions that involve multiple deliverables earlier than under previous requirements. We have determined that the adoption of the pronouncement did not have any effect on our financial position and/or results of operations, and we will review new and/or modified revenue arrangements after the adoption date to ensure compliance with this update.On January 1, 2011, we adopted the accounting pronouncement issued by the FASB updating existing guidance on business combinations, which clarifies that if comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. We have considered the guidance in conjunction with acquisitions since its adoption.On January 1, 2011, we adopted the accounting pronouncement issued by the FASB updating existing guidance, which modifies the goodwill impairment test for reporting units with zero or negative carrying amounts. For reporting units with zero or negative carrying amounts, the second step of the goodwill impairment test must be performed if it appears more likely than not that a goodwill impairment exists. To make that determination, an entity should consider whether there are adverse qualitative factors indicating that an impairment may exist. We have considered the guidance in conjunction with our goodwill impairment testing since its adoption.In June 2011, an accounting pronouncement was issued by the FASB to update existing guidance on comprehensive income. This guidance eliminatesgiving companies the option to presentperform a qualitative impairment assessment for their indefinite-lived intangible assets that may allow them to skip the components of other comprehensive income as part of our Condensed Consolidated Statements of Equityannual fair value calculation. To perform a qualitative assessment, a company must identify and Comprehensive Income, which is our current presentation. It requires companiesevaluate changes in economic, industry and company-specific events and circumstances that could affect the significant inputs used to presentdetermine the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income and the total of comprehensive income. This pronouncement is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011, but early adoption is permitted. The adoption of this pronouncement will not have any effect on our financial condition or results of operations, though it will change our financial statement presentation.In September 2011, an accounting pronouncement was issued by the FASB to update the disclosure requirementsfair value of an employer who participates in multiemployer pension plans. This new pronouncement requires the disclosure of: (a) the amount of employer contributions made to each significant plan and to all plans in the aggregate; (b) an indication of whether the employer’s contributions represent more than five percent of the total contributions to the plan; (c) an indication of which plans, if any, are subject to a funding improvement plan; (d) the expiration date(s) of collective bargaining agreement(s) and any minimum funding arrangements; (e) the most recent funded status of the plan; and (f) a description of the nature and effect of any changes affecting comparability for each period in which a statement of operations is presented. The enhanced disclosures are required for fiscal years ending after December 15, 2011.indefinite-lived intangible asset. The adoption of this pronouncement did not have any effect on our financial conditionposition or results of operations, though it will require enhanced disclosuresmay impact the manner in which we perform future or prospective testing for indefinite-lived intangible asset impairment.notes to consolidated financial statements. See Note 16—Retirement Plans for additional information regarding multiemployer pension plans.2— SUMMARY3 - ACQUISITIONS OF SIGNIFICANT ACCOUNTING POLICIES — (Continued)In September 2011, an accounting pronouncementBUSINESSESissued byfunded with cash on hand and $250.0 million from borrowings under our revolving credit facility. This acquisition was accounted for using the FASBacquisition method of accounting. We acquired working capital of $36.3 million and other net liabilities of $67.1 million, and have preliminarily ascribed $267.7 million to simplify how a company is requiredgoodwill and $227.4 million to testidentifiable intangible assets in connection with the acquisition of RSI, which has been included in our United States industrial services segment. We expect that $49.0 million of acquired goodwill will be deductible for impairment. Companies will now have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. This pronouncement is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted.tax purposes. We have not determined whethercompleted the final allocation of the purchase price related to the RSI acquisition, except for certain tax and contingency matters.will apply this guidanceacquired three companies, each for an immaterial amount. These companies primarily provide mechanical construction services and have been included in our future impairment testing.NOTE 3— ACQUISITIONS OF BUSINESSESOn In June 30, 2011, we completed the acquisition of USM Services Holdings, Inc. (“USM”) from Transfield Services Limited. USM is a leading provider of facilities maintenance solutions in North America and is based in Norristown, Pennsylvania.(Delaware), General Partnership. Under the terms of the transaction, we acquired 100% of USM’s stock for total consideration of $251.1$251.0 million and utilized cash on hand to fund the purchase. This acquisition has been accounted for using the acquisition method of accounting. We acquired working capital of $5.0$5.0 million and other net liabilities of $20.9$21.3 million, and have preliminarily ascribed $132.6$130.3 million to goodwill and $134.4$137.0 million to identifiable intangible assets in connection with thisthe acquisition of USM, which has been included in our United States facilitiesbuilding services segment. According to certain provisions of the stock purchase agreement, we are to be indemnified for certain costs. We have not yet completed the final allocation of the purchase price related to the USM acquisition. As we finalize the purchase price allocation, it is anticipated that additional purchase price adjustments will be recorded relating to finalization of intangible asset valuations, tax matters and other items. Such adjustments will be recorded during the measurement period. The finalization of the purchase price accounting assessment may result in changes in the valuation of assets and liabilities acquired, which are not expected to be significant.In connection with this acquisition, we incurred approximately $4.7 million of transaction related expenses during 2011, which have been classified as a component of “Selling, general and administrative expenses” on the Consolidated Statements of Operations. USM is a leading provider of essential facilities maintenance services, including interior and exterior services and electrical, mechanical and plumbing services, to national and regional commercial customers that typically maintain over 100 sites across wide geographic areas. USM services these customers through its highly-developed proprietary network of over 11,000 service partners. USM because we believe that it further strengthens our market position in facilities and maintenance services and provides access to new customers for a range of services that we provide. Additionally, we believe that over the next two years we will be able to generate certain operating synergies with our existing facilities services operations.We acquired two two companies during 2010 and one company in 2009, each for an immaterial amount. One of the 2011 acquisitionsacquired companies primarily provides mechanical construction services and has been included in our United States mechanical construction and facilities services reporting segment, and the other one primarily provides mobile mechanical services and has been included in our United States facilities services segment. One of the companies acquired in 2010 and the company acquired in 2009 provide mobile mechanical services, and the other company acquired in 2010 primarily performs government infrastructure contracting services. The aforementioned companies have been included in our United States facilitiesbuilding services reporting segment. We believe these acquisitions further expand our service capabilities into new geographical and/or technical areas.allocation for twothe acquisition of the companies acquired in 2011 is subject to the finalization of valuation of acquired identifiable intangible assets. During 2011, the purchase price accounting for one of the 2011 and one of the 2010 acquisitionsother businesses referred to above was finalized. As a result, identifiable intangible assets ascribed to goodwill, contract backlog, customer relationships, trade names and related non-competition agreements were adjustedfinalized with an insignificant impact. These acquisitions wereThe acquisition of these businesses was accounted for by the acquisition method, and the purchase prices paid for them have been allocated to their respective assets and liabilities, based upon the estimated fair values of thetheir respective assets and liabilities at the dates of thetheir respective acquisitions.EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 3— ACQUISITIONS OF BUSINESSES — (Continued)ForDuring the yearyears ended December 31, 2009,2013, 2012 and 2011, respectively, we recorded approximately $2.0a net reversal of $6.8 million, $6.4 million and $2.8 million of non-cash compensation expense relatedincome attributable to acontingent consideration arrangements relating to prior acquisition, with an offsetting amount recorded as a capital contribution from the selling shareholders of the acquired company. This non-cash expense was a result of a redistributed portion of acquisition-related payments made by the former owners of the acquired company to certain employees. These employees were not shareholders of the acquired company, and such payments were dependent on continuing employment with us.4—4 - DISPOSITION OF ASSETSyearsyear ended December 31, 2011 2010 and 2009 are presented in our Consolidated Financial Statements as discontinued operations. our entire interest in our Canadian subsidiary, which represented our Canada construction segment, to a group of investors, including members of the former subsidiary’s management team. We received approximately $17.3$17.3 million in payment for the shares. In addition, we also received approximately $26.4$26.4 million in repayment of indebtedness owed by our Canadian subsidiary to us. Proceeds from the sale of discontinued operation, net of cash sold, totaled $26.6 million.approximately $26.6 million. Included in the net income (loss) from discontinued operation for the year ended December 31, 2011 was a gain on sale of $9.1$9.1 million (net of income tax provision of $2.8 million)$2.8 million) resulting from the sale of the subsidiary. (Loss) income from discontinued operation includes income tax (benefits) provision of $(0.4) million, $(1.3) million and $3.6 million for the years ended December 31, 2011, 2010 and 2009, respectively. The gain on sale of discontinued operation includes $15.5included $15.5 million related to amounts previously reported in the foreign translation adjustment component of accumulated other comprehensive income. For the years ended December 31, 2011 (1) 2010 2009 $ 118,214 $ 269,332 $ 320,243 $ (44 ) $ (849 ) $ 8,672 $ 9,127 $ — $ — $ 9,083 $ (849 ) $ 8,672 $ 0.13 $ (0.01 ) $ 0.13 Revenues $ 118,214 Loss from discontinued operation (net of income taxes) $ (44 ) Gain on sale of discontinued operation (net of income taxes) $ 9,127 Net income from discontinued operation $ 9,083 Diluted earnings per share from discontinued operation $ 0.13 Included in the Consolidated Balance Sheets at December 31, 2010 are the following major classes of assets and liabilities associated with the discontinued operation (in thousands): $ 99,173 $ 3,827 $ 53,853 $ 4,108 EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS5—5 - EARNINGS PER SHARE(Loss) per Common Share (“EPS”) for the years ended December 31, 2011, 20102013, 2012 and 20092011 (in thousands, except share and per share data): 2011 2010 2009 $ 121,743 $ (85,842 ) $ 152,084 9,083 (849 ) 8,672 $ 130,826 $ (86,691 ) $ 160,756 66,780,093 66,393,782 65,910,793 1,595,409 — 1,534,492 68,375,502 66,393,782 67,445,285 $ 1.82 $ (1.30 ) $ 2.31 0.14 (0.01 ) 0.13 $ 1.96 $ (1.31 ) $ 2.44 $ 1.78 $ (1.30 ) $ 2.25 0.13 (0.01 ) 0.13 $ 1.91 $ (1.31 ) $ 2.38 2013 2012 2011 Numerator: Income from continuing operations attributable to EMCOR Group, Inc. common stockholders $ 123,792 $ 146,584 $ 121,743 Income from discontinued operation — — 9,083 Net income attributable to EMCOR Group, Inc. common stockholders $ 123,792 $ 146,584 $ 130,826 Denominator: Weighted average shares outstanding used to compute basic earnings per common share 67,086,299 66,701,869 66,780,093 Effect of dilutive securities—Share-based awards 990,542 1,036,549 1,595,409 Shares used to compute diluted earnings per common share 68,076,841 67,738,418 68,375,502 Basic earnings per common share: From continuing operations attributable to EMCOR Group, Inc. common stockholders $ 1.85 $ 2.20 $ 1.82 From discontinued operation — — 0.14 Net income attributable to EMCOR Group, Inc. common stockholders $ 1.85 $ 2.20 $ 1.96 Diluted earnings per common share: From continuing operations attributable to EMCOR Group, Inc. common stockholders $ 1.82 $ 2.16 $ 1.78 From discontinued operation — — 0.13 Net income attributable to EMCOR Group, Inc. common stockholders $ 1.82 $ 2.16 $ 1.91 20112013, 2012 and 20092011 because they would be anti-dilutive were zero, 140,096 and 321,443, respectively.516,386, respectively. The effect of 1,645,098 of common stock equivalents have been excluded from the calculation of diluted EPS for the year ended December 31, 2010 due to our net loss position in this period. Assuming dilution, there were 301,347 anti-dilutive stock options excluded from the calculation of diluted EPS for the year ended December 31, 2010.6—6 - INVENTORIES20112013 and 20102012 consist of the following amounts (in thousands): 2011 2010 $ 21,452 $ 17,749 23,462 15,029 $ 44,914 $ 32,778 EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2013 2012 Raw materials and construction materials $ 32,795 $ 20,994 Work in process 19,328 29,518 $ 52,123 $ 50,512 7— INVESTMENTS, NOTES AND OTHER LONG-TERM RECEIVABLESIn January 2010, a venture in which one of our subsidiaries had a 40% interest and which designs, constructs, owns, operates, leases and maintains facilities to produce chilled water for sale to customers for use in air conditioning commercial properties was sold to a third party. As a result of this sale, we received $17.7 million for our 40% interest and recognized a pretax gain of $4.5 million, which gain is included in our United States facilities services segment and classified as a component of “Cost of sales” on the Consolidated Statements of Operations.Additionally in June 2010, we sold our equity interest in a Middle East venture, which performed facilities services, to our partner in the venture. As a result of this sale, we received $7.9 million and recognized a pretax gain in this amount, which is classified as a “Gain on sale of equity investment” on the Consolidated Statements of Operations.NOTE 8—7 - PROPERTY, PLANT AND EQUIPMENT20112013 and 20102012 (in thousands): 2011 2010 $ 86,874 $ 83,498 40,729 35,029 22,159 18,344 84,473 77,016 66,028 68,691 300,263 282,578 (198,600 ) (193,963 ) $ 101,663 $ 88,615 2013 2012 Machinery and equipment $ 116,945 $ 105,559 Vehicles 49,296 45,340 Furniture and fixtures 22,036 21,353 Computer hardware/software 88,956 82,205 Land, buildings and leasehold improvements 78,796 69,564 356,029 324,021 Accumulated depreciation and amortization (232,615 ) (207,390 ) $ 123,414 $ 116,631 $27.4$36.3 million $25.5, $31.2 million and $26.8$27.4 million for the years ended December 31, 2011, 20102013, 2012 and 2009,2011, respectively.9—8 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS20112013 and 20102012 was approximately $566.8$834.8 million and $406.8$566.6 million, respectively, and reflects the excess of cost over fair market value of net identifiable assets of companies acquired. Goodwill attributable to companies acquired in 20112013 has been valued at $156.6 million.$268.2 million. ASC Topic 805, “Business Combinations” (“ASC 805”) requires that all business combinations be accounted for using the acquisition method and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. ASC Topic 350, “Intangibles—Goodwill“Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, such as trade names, but instead must be tested at least annually for impairment (which we test each October 1, absent any impairment indicators) and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives. As of December 31, 2011,2013, approximately 64.3%46.1% of our goodwill related to our United States facilitiesindustrial services segment, approximately 35.0%27.4% of our goodwill related to our United States building services segment, approximately 26.0% related to our United States mechanical construction and facilities services segment and approximately 0.7%0.5% related to our United States electrical construction and facilities services segment.level utilizinglevel. Our reporting units are consistent with the reportable segments identified in Note 17, "Segment Information", of the notes to consolidated financial statements. In assessing whether our goodwill is impaired, we first qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount using various factors. If after this assessment we are unable to determine that the fair value of a reporting unit exceeds the carrying amount, we proceed to the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reportingEMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 9— GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS — (Continued)unit’sunit's goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit’sunit's goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to operations. The weighted average cost of capital used20112013 was 13.6%12.1%, 12.6% and 12.3%11.1% for our domestic construction segments, our United States building services segment and our United States facilitiesindustrial services segment, respectively. The perpetual growth rate used for our annual testing was 2.7% for our domestic segments. Unfavorable changes in these key assumptions may affect future testing results and cause us to fail step one of the goodwill impairment testing process. For example, keeping all other assumptions constant, a 50 basis point increase in the weighted average costs of capital would cause the estimated fair value of our United Stated industrial services segment to approach its carrying value. A 50 basis point increase in the weighted average costs of capital would not significantly reduce the excess of the estimated fair value compared to the carrying value for any of our other domestic segments. In addition, keeping all other assumptions constant, a 50 basis point reduction in the perpetual growth rate would not significantly reduce the excess of the estimated fair value compared to the carrying value for any of our domestic segments. For the years ended December 31, 2013, 2012 and 2011, and 2009, no impairment of our goodwill was recognized.During the third quarter of 2010 and prior to our October 1 annual impairment test, we concluded that impairment indicators may have existed within the United States facilities services segment based upon the year to date results and recent forecasts. As a result of that conclusion, we performed a step one test as prescribed under ASC 350 for that particular reporting unit which concluded that impairment indicators existed within that reporting unit due to significant declines in year to date revenues and operating margins which caused us to revise our expectations for the strength of a near term recovery in our financial models for businesses within that reporting unit. Specifically, we reduced our net sales growth rates and operating margins within our discounted cash flow model, as well as our terminal value growth rates. In addition, we estimated a higher participant risk adjusted weighted average cost of capital. Therefore, the required second step of the assessment for the reporting unit was performed in which the implied fair value of that reporting unit’s goodwill was compared to the book value of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, that is, the estimated fair value of the reporting unit is allocated to all of those assets and liabilities of that unit (including both recognized and unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the estimated fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting unit’s goodwill is greater than the implied fair value of that reporting unit’s goodwill, an impairment loss is recognized in the amount of the excess and is charged to operations. We determined the fair value of the reporting unit using discounted estimated future cash flows. The weighted average cost of capital used in testing for impairment at the interim date was 12.5% with a perpetual growth rate of 2.8% for our United States facilities services segment. As a result of our interim impairment assessment, we recognized a $210.6 million non-cash goodwill impairment charge in the third quarter of 2010. Additionally, we performed our annual impairment test as of October 1, and no additional impairment of our goodwill was recognized for any of our reporting segments in the fourth quarter of 2010. The weighted average cost of capital used in our annual testing for impairment was 13.2% and 12.2% for our domestic construction segments and our United States facilities services segment, respectively. The perpetual growth rate used for our annual testing was 3.0% for our domestic construction segments and 2.8% for our United States facilities services segment, respectively.$1.0$1.0 million non-cash impairment charge as a result of a change in the fair value of trade names associated with certain prior acquisitions reported within our United States facilitiesbuilding services segment. During the second and third quarters of 2010, we recorded non-cash impairment charges of $35.5 million associated with the fair value of trade names from prior acquisitions reported within our United States facilities services segment. The annual impairment review of our trade names for the year ended December 31, 2009 resulted in an $11.5 million non-cash impairment charge as a result of a change in the fair value of trade names associated with certain prior acquisitions reported within our United States facilities services and United States mechanical construction and facilities services segments. The current yearThis impairment primarily resultsresulted from both lower forecasted revenues from, and lower operating margins at, specific companies within our United States facilitiesbuilding services segment.EMCOR Group, Inc.Subsidiaries2012, NOTES TO CONSOLIDATED FINANCIAL STATEMENTSnoNOTE 9— GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS — (Continued) impairment of our trade names was recognized.yearsyear ended December 31, 2011 and 2009.2011. As a result of these reviews,this review, we recognized a $2.8$2.8 million non-cash impairment charge as a result of a change in the fair value of customer relationships associated with certain prior acquisitions reported within our United States facilitiesbuilding services segment for the year ended December 31, 2011 and a $2.0 million non-cash impairment charge as a result of a change in2011. For the fair value of customer relationships associated with certain prior acquisitions reported within our United States mechanical construction and facilities services segment for the yearyears ended December 31, 2009. For the year ended December 31, 2010 2013 and 2012, no impairment of our other identifiable intangible assets was recognized.Much of the informationThose assumptions and estimates can change in future periods, and other factors used in assessing fair value isare outside the control of management, such as interest rates, and these assumptions and estimates can change in future periods.rates. There can be no assurances that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset impairment testing will prove to be accurate predictions of the future. If our assumptions regarding future business performance plans or anticipated growth rates and/or margins are not achieved, or there is a rise in interest rates, we may be required, as we did in 2011 2010 and 2009,, to record goodwill and/or identifiable intangible asset impairment charges in future periods.$3.8$3.8 million non-cash impairment charge as discussed above. Of this amount, $2.8$2.8 million relates related to customer relationships and $1.0$1.0 million relates related to trade names. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such a charge would be material.20112013 and 20102012 were as follows (in thousands): United States
electrical
construction
and facilities
services segment United States
mechanical
construction
and facilities
services segment United States
facilities
services segment Total $ 3,823 $ 175,175 $ 438,408 $ 617,406 — — (210,602 ) (210,602 ) 3,823 175,175 227,806 406,804 — 23,271 136,730 160,001 $ 3,823 $ 198,446 $ 364,536 $ 566,805 United States
industrial services segment Total Gross balance at December 31, 2011 $ 3,823 $ 198,446 $ 387,206 $ 187,932 $ 777,407 Accumulated impairment charge — — (139,498 ) (71,104 ) (210,602 ) Balance at December 31, 2011 3,823 198,446 247,708 116,828 566,805 Acquisitions and purchase price adjustments — 2,014 (2,231 ) — (217 ) Transfers — 690 (690 ) — — Balance at December 31, 2012 3,823 201,150 244,787 116,828 566,588 Acquisitions and purchase price adjustments — 522 — 267,715 268,237 Transfers — 15,583 (15,583 ) — — Balance at December 31, 2013 $ 3,823 $ 217,255 $ 229,204 $ 384,543 $ 834,825 and 2010, pursuant to the purchase method of accounting, we recorded an aggregate of $1.9$1.9 million and $1.4 million, respectively, by reason of earn-out obligations in respect of a prior acquisitions,acquisition, which increased goodwill associated with these acquisitions.EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 9— GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS — (Continued)20112013 and 20102012 consist of the following (in thousands): December 31, 2011 Gross
Carrying
Amount Accumulated
Amortization Accumulated
Impairment
Charge Total $ 47,580 $ (41,505 ) $ — $ 6,075 95,661 (19,943 ) — 75,718 257,054 (45,213 ) (4,834 ) 207,007 8,269 (7,386 ) — 883 17,521 (1,466 ) — 16,055 112,601 — (47,966 ) 64,635 $ 538,686 $ (115,513 ) $ (52,800 ) $ 370,373 December 31, 2010 Gross
Carrying
Amount Accumulated
Amortization Accumulated
Impairment
Charge Total $ 42,813 $ (35,835 ) $ — $ 6,978 91,000 (14,977 ) — 76,023 133,611 (31,681 ) (2,029 ) 99,901 8,807 (6,670 ) — 2,137 — — — — 107,026 — (46,976 ) 60,050 $ 383,257 $ (89,163 ) $ (49,005 ) $ 245,089 December 31, 2013 Total Contract backlog $ 47,620 $ (47,583 ) $ — $ 37 Developed technology/Vendor network 95,661 (30,212 ) — 65,449 Customer relationships 425,873 (83,391 ) (4,834 ) 337,648 Non-competition agreements 9,980 (8,498 ) — 1,482 Trade names (amortized) 21,248 (6,619 ) — 14,629 Trade names (unamortized) 170,218 — (47,966 ) 122,252 Total $ 770,600 $ (176,303 ) $ (52,800 ) $ 541,497 December 31, 2012 Total Contract backlog $ 47,580 $ (46,630 ) $ — $ 950 Developed technology/Vendor network 95,661 (25,078 ) — 70,583 Customer relationships 259,683 (61,718 ) (4,834 ) 193,131 Non-competition agreements 8,269 (7,898 ) — 371 Trade names (amortized) 17,521 (3,951 ) — 13,570 Trade names (unamortized) 113,109 — (47,966 ) 65,143 Total $ 541,823 $ (145,275 ) $ (52,800 ) $ 343,748 20112013 have been valued at $158.1 million.$228.8 million. Identifiable intangible assets attributable to companies acquired in 20102012 have been valued at $29.4 million.$0.5 million. See Note 3—3 - Acquisitions of Businesses of the notes to consolidated financial statements for additional information. The identifiable intangible amounts are amortized on a straight-line basis. The weighted average amortization periods for the unamortized balances remaining are approximately 1511 months for contract backlog, 1513 years for developed technology/vendor network, 1513 years for customer relationships, 2 years for non-competition agreements and 6.55.5 years for trade names.$26.4$31.0 million $16.4, $29.8 million and $19.0$26.4 million for the years ended December 31, 2011, 20102013, 2012 and 2009,2011, respectively. The following table presents the estimated future amortization expense of identifiable intangible assets in the following years (in thousands): $ 29,544 25,029 23,738 23,652 22,985 180,790 $ 305,738 EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS2014 $ 37,966 2015 37,565 2016 36,502 2017 34,196 2018 32,070 Thereafter 240,946 $ 419,245 10—9 - DEBT21, 2011,25, 2013, we had a revolving credit agreement (the “2010 Revolving"2011 Credit Facility”Agreement") as amended, which provided for a revolving credit facility of $550.0 million.$750.0 million. The 2010 Revolving2011 Credit FacilityAgreement was effective February 4, 2010 and replaced an earlier revolving credit facility (the “2005 Revolving Credit Facility”) of $375.0 million.November 21, 2011. Effective November 21, 2011,25, 2013, we replaced the 2010 Revolving Credit Facility that was due to expire February 4, 2013 with an amended and restated the 2011 Credit Agreement with a $1.1 billion credit agreement (the "2013 Credit Agreement"), which is comprised of a $750.0 million revolving credit facility (the “2011"2013 Revolving Credit Facility”Facility") and a $350.0 million term loan (the "Term Loan"). The proceeds of the Term Loan were used to repay amounts drawn under the 2011 Credit Agreement. Both facilities expire on November 25, 2018. We may increase the 2013 Revolving Credit Facility expires in November 2016 and permits us to increase our borrowing to $900.0 million$1.05 billion if additional lenders are identified and/or existing lenders are willing to increase their current commitments. Wecommitments; and we may allocate up to $250.0$250.0 million of the borrowing capacityavailable borrowings under the 20112013 Revolving Credit Facility to letters of credit which amount compares to $175.0 million underfor our account or for the 2010account of any of our subsidiaries. The 2013 Revolving Credit Facility and $125.0 million under the 2005 Revolving Credit Facility. The 2011 Revolving Credit Facility isTerm Loan are both guaranteed by certainmost of our direct and indirect subsidiaries and isare secured by substantially all of our assets and most of the assets of most of our subsidiaries. The 20112013 Revolving Credit Facility containsand the Term Loan contain various covenants providing for, among other things, maintenance of certain financial ratios and certain limitations on payment of dividends, common stock repurchases, investments, acquisitions, indebtedness and capital expenditures. A commitment fee is payable on the average daily unused amount ofunder the 20112013 Revolving Credit Facility, which ranges from 0.25%0.20% to 0.35%0.30%, based on certain financial tests. The fee is 0.25%0.20% of the unused amount as of December 31, 2011.2013. Borrowings under the 20112013 Revolving Credit Facility and the Term Loan bear interest at (1) a rate which is the prime commercial lending rate announced by Bank of Montreal from time to time (3.25%(3.25% at December 31, 2011)2013) plus 0.50%0.25% to 1.00%0.75%, based on certain financial tests or (2) United States dollar LIBOR (0.30%(0.17% at December 31, 2011)2013) plus 1.50%1.25% to 2.00%1.75%, based on certain financial tests. The interest rate in effect at December 31, 20112013 was 1.80%1.42%. Letter of credit fees issued under this facilitythe 2013 Revolving Credit Facility range from 1.50%1.25% to 2.00%1.75% of the respective face amounts of theoutstanding letters of credit issued and are chargedcomputed based on certain financial tests. We capitalized approximately $4.1$3.0 million of debt issuance costs associated with the 2011 Revolving2013 Credit Facility.Agreement. This amount is being amortized over the life of the facilityagreement and is included as part of interest expense. In connection with the terminationamendment and restatement of the 2010 Revolving2011 Credit Facility, $0.4Agreement, $0.3 million attributable to the acceleration of expense for debt issuance costs in connection with the 2010 Revolving2011 Credit FacilityAgreement was recorded as part of interest expense. We are required to make principal payments on the Term Loan in installments on the last day of March, June, September and December of each year, commencing with the calendar quarter ending March 31, 2014, in the amount of $4.4 million, with a final payment of all principal and interest not yet paid due and payable on November 25, 2018. As of December 31, 2011 and 2013, the balance on the Term Loan was $350.0 million. As of December 31, 2010,2013 and December 31, 2012, we had approximately $83.1$83.3 million and $82.4$84.0 million of letters of credit outstanding, respectively. We had borrowings of $150.0 million outstanding under the 20102011 Credit Agreement at December 31, 2012. There were no borrowings outstanding under the 2013 Revolving Credit Facility atas of December 31, 2010, and we have borrowings2013.10—9 - DEBT —- (Continued)20112013 and 20102012 (in thousands): 2011 2010 $ 150,000 $ — — 150,000 4,857 1,649 — 24 154,857 151,673 1,522 489 $ 153,335 $ 151,184 2013 2012 2011 Credit Agreement $ — $ 150,000 Term Loan, interest payable at varying amounts through 2018 350,000 — Capitalized Lease Obligations, at weighted average interest rates from 0.8% to 8.3% payable in varying amounts through 2018 4,652 5,881 Other, payable through 2015 11 18 354,663 155,899 Less: current maturities 19,332 1,787 $ 335,331 $ 154,112 17—15 - Commitments and Contingencies of the notes to consolidated financial statements for additional information.Other Long-Term DebtAs of December 31, 2010, other long-term debt consisted primarily of loans for various field equipment.11— DERIVATIVE INSTRUMENT AND HEDGING ACTIVITYOn January 27, 2009, we entered into an interest rate swap agreement (the “Swap Agreement”), which hedged the interest rate risk on our variable rate debt. The Swap Agreement matured in October 2010 and was used to manage the variable interest rate of our borrowings and related overall cost of borrowing.We paid a fixed rate on the Swap Agreement of 2.225% and received a floating rate of 30 day LIBOR on the notional amount. A portion of the interest rate swap had been designated as an effective cash flow hedge, whereby changes in the cash flows from the swap perfectly offset the changes in the cash flows associated with the floating rate of interest. See Note 10—Debt of the notes to consolidated financial statements for additional information. The fair value of the interest rate swap at December 31, 2009 was a net liability of $1.2 million. This liability reflected the interest rate swap’s termination value as the credit value adjustment for counterparty nonperformance was immaterial. We had no obligation to post any collateral related to this derivative. The fair value of the interest swap was based upon the valuation technique known as the market standard methodology of netting the discounted future fixed cash flows and the discounted expected variable cash flows. The variable cash flows were based on an expectation of future interest rates (forward curves) derived from observable interest rate curves. In addition, we had incorporated a credit valuation adjustment into our calculation of fair value of the interest rate swap. This adjustment recognized both our nonperformance risk and the counterparty’s nonperformance risk. The net liability was included in “Other accrued expenses and liabilities” on our Consolidated Balance Sheet. Accumulated other comprehensive loss at December 31, 2009 included the accumulated loss, net of income taxes, on the cash flow hedge, of $0.6 million.On December 1, 2009, we de-designated $45.5 million of the interest rate swap as it was determined that it was no longer probable that the future estimated cash flows were going to occur as originally estimated. We discontinued the application of hedge accounting associated with this portion of the interest rate swap, and recognized $0.2 million of income and $0.3 million of expense as part of interest expense, and removed from Accumulated other comprehensive loss, for the years ended December 31, 2010 and 2009, respectively.EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 11— DERIVATIVE INSTRUMENT AND HEDGING ACTIVITY — (Continued)As of December 31, 2009, the fair value of our derivative was $1.2 million and was in a net liability position reflecting the interest rate swap’s termination value as the credit value adjustment for counterparty nonperformance was immaterial. As of December 31, 2011 and 2010, we have no derivatives and/or hedging instruments outstanding.NOTE 12—10 - FAIR VALUE MEASUREMENTS1—1 – Unadjusted quoted market prices in active markets for identical assets and liabilities.2—2 – Observable inputs, other than Level 1 inputs. Level 2 inputs would typically include quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.3—3 – Prices or valuations that require inputs that are both significant to the measurement and unobservable.20112013 and 2010December 31, 2012 (in thousands):00000000 00000000 00000000 00000000 Assets at Fair Value as of December 31, 2011 Level 1 Level 2 Level 3 Total $ 511,322 $ — $ — $ 511,322 5,928 — — 5,928 17,096 — — 17,096 $ 534,346 $ — $ — $ 534,346 00000000 00000000 00000000 00000000 Assets at Fair Value as of December 31, 2010 Level 1 Level 2 Level 3 Total $ 710,836 $ — $ — $ 710,836 1,326 — — 1,326 — — — — $ 712,162 $ — $ — $ 712,162 Assets at Fair Value as of December 31, 2013 Asset Category Level 1 Level 2 Level 3 Total $ 439,813 — — $ 439,813 6,934 — — 6,934 — — — — Total $ 446,747 — — $ 446,747 Assets at Fair Value as of December 31, 2012 Asset Category Level 1 Level 2 Level 3 Total $ 605,303 — — $ 605,303 6,281 — — 6,281 4,879 — — 4,879 Total $ 616,463 — — $ 616,463 (1) 20112013 and 2010,2012, we had $373.1$147.7 million and $623.4$407.4 million, respectively, in money market funds.(2) 90 daysthree months are classified as “Prepaid expenses and other” on our consolidated balance sheets.2011 Revolving2013 Credit FacilityAgreement approximates the fair value due to the variable rate on such debt.At December 31, 2011 and 2010, we had certain assets, specifically $0.9 million of indefinite lived intangible assets and $256.1 million of indefinite lived intangible assets and goodwill, which were accounted for at fair market value on a non-recurring basis. We have determined that the fair value measurements of these non-financial assets are Level 3 in the fair value hierarchy. See Note 9—Goodwill and Identifiable Intangible Assets for a further discussion.EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS13—11 - INCOME TAXES20112013 income tax provision from continuing operations was $76.8$75.3 million compared to $53.7$95.4 million for 20102012 and $92.6$76.8 million for 2009 based on effective income tax rates, before the tax effect of non-cash impairment charges, of approximately 38.7%, 37.2% and 37.8%, respectively.2011. The actual income tax rates on income from continuing operations before income taxes, less amounts attributable to non-controllingnoncontrolling interests, for the years ended December 31, 2011, 20102013, 2012 and 2009, inclusive2011, were 37.8%, 39.4% and 38.7%, respectively. The decrease in the 2013 income tax provision compared to 2012 was primarily due to the effect of non-cash impairment charges, were 38.7%, (167.2)%reduced income before income taxes, a change in the mix of earnings among various jurisdictions and 37.8%, respectively.reversal of reserves for previously unrecognized income tax benefits. The increase in the 20112012 income tax provision compared to 2011 was primarily due to increased income before income taxes, the effect of a change in the United Kingdom statutory tax rate and a change in the allocationmix of earnings among various jurisdictions. The Company recognized a non-cash goodwill impairment charge of approximately $210.6 million during 2010. Approximately $34.0 million of this impairment is deductible for income tax purposes. The remaining $176.6 million of this impairment is not deductible for income tax purposes. This non-deductible portion had a significant impact on the effective tax rate for 2010.We file income tax returns with the Internal Revenue Service and various state, local and foreign jurisdictions. The Company is currently under examination by various taxing authorities for the years 2007 through 2011. We are still subject to audit of our federal income tax returns by the Internal Revenue Service for the years 2008 through 2010.20112013 and 2010,2012, the amount of unrecognized income tax benefits was $5.7$3.1 million and $6.5$11.3 million (of which $3.1$1.7 million and $4.2$6.6 million, if recognized, would favorably affect our effective income tax rate), respectively. At both As of December 31, 20112013 and 2010,2012, we had an accrual of $2.3$0.2 million and $2.6 million for the payment of interest related to unrecognized income tax benefits included on the Consolidated Balance Sheets.Sheets, respectively. During the years ended December 31, 20112013 and 2010,2012, we recognized approximately $0.02$0.2 million in interest income and $0.1$0.3 million, respectively, in interest expense related to our unrecognized income tax benefits. In addition, we reversed $2.6 million and less than $0.1 million of accrued interest expense related to our unrecognized income tax benefits for the years ended December 31, 2013 and 2012, respectively. As of December 31, 20112013 and 2010,2012, we had total income tax reserves included in “Other long-term liabilities” of $8.0$3.4 million and $8.8$13.9 million, respectively.0000000 0000000 2011 2010 $ 6,513 $ 7,534 1,298 865 395 328 (1,074 ) (915 ) (1,471 ) (1,299 ) $ 5,661 $ 6,513 2013 2012 Balance at beginning of year $ 11,281 $ 5,661 Additions based on tax positions related to the current year 895 5,863 Additions based on tax positions related to prior years 251 1,348 Reductions for tax positions of prior years (6,273 ) (1,298 ) Reductions for expired statute of limitations (3,038 ) (293 ) Balance at end of year $ 3,116 $ 11,281 $0.3$0.6 million of unrecognized income tax benefits at December 31, 2011,2013, primarily relating to uncertain tax positions attributable to certain intercompany transactions and compensation related accruals, will become recognized income tax benefits in the next twelve months due to the expiration of applicable statutes of limitations. (benefit) in the accompanying Consolidated Statements of Operations for the years ended December 31, 2011, 20102013, 2012 and 20092011 consisted of the following (in thousands):0000000 0000000 0000000 2011 2010 2009 $ 54,033 $ 55,878 $ 73,262 14,735 14,079 17,526 (350 ) 1,771 3,757 68,418 71,728 94,545 8,346 (18,017 ) (1,992 ) $ 76,764 $ 53,711 $ 92,553 2013 2012 2011 Current: Federal provision $ 60,449 $ 70,019 $ 54,033 State and local provisions 2,897 18,174 14,735 Foreign provision (benefit) 94 543 (350 ) 63,440 88,736 68,418 Deferred 11,857 6,626 8,346 $ 75,297 $ 95,362 $ 76,764 EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 13— INCOME TAXES — (Continued)2011, 20102013, 2012 and 20092011 were as follows (in thousands):0000000 0000000 0000000 2011 2010 2009 $ 70,471 $ (9,843 ) $ 86,435 (996 ) (1,403 ) (812 ) 9,600 6,374 10,279 (1,580 ) (1,401 ) (1,201 ) — 61,827 — 56 (507 ) (253 ) 172 (2,812 ) (151 ) (1,056 ) (1,153 ) (1,600 ) 97 2,629 (144 ) $ 76,764 $ 53,711 $ 92,553 2013 2012 2011 Federal income taxes at the statutory rate $ 70,928 $ 85,487 $ 70,471 Noncontrolling interests (1,247 ) (806 ) (996 ) State and local income taxes, net of federal tax benefits 9,369 8,512 9,673 State tax reserves (6,529 ) 3,927 (73 ) Permanent differences 3,226 2,605 2,468 Domestic manufacturing deduction (4,778 ) (5,559 ) (4,048 ) Foreign income taxes (including UK statutory rate changes) 4,831 703 56 Adjustments to valuation allowance for deferred tax assets — — 172 Federal tax reserves 263 (258 ) (1,056 ) Other (766 ) 751 97 $ 75,297 $ 95,362 $ 76,764 $29.9$32.5 million, “Other assets” of $19.6$15.0 million, and “Other long-term obligations” of $78.5$174.3 million at December 31, 2011,2013, and the components of net deferred income tax asset are included in “Prepaid expenses and other” of $25.0$35.0 million, “Other assets” of $17.0$17.5 million “Other accrued expenses, and liabilities”"Other long-term obligations" of $3.9$88.1 million and “Other long-term obligations” of $32.9 million at December 31, 20102012 in the accompanying Consolidated Balance Sheets.20112013 and 20102012 were as follows (in thousands):00000000 00000000 2011 2010 $ 49,551 $ 46,711 18,531 15,310 85,852 80,308 153,934 142,329 (3,370 ) (783 ) 150,564 141,546 (160,546 ) (118,886 ) (19,027 ) (17,488 ) (179,573 ) (136,374 ) $ (29,009 ) $ 5,172 2013 2012 Deferred income tax assets: Excess of amounts expensed for financial statement purposes over amounts deducted for income tax purposes: Insurance liabilities $ 57,310 $ 51,348 Pension liability 7,813 15,990 Deferred compensation 16,358 15,704 Other (including liabilities and reserves) 35,625 33,875 Total deferred income tax assets 117,106 116,917 Valuation allowance for deferred tax assets (2,244 ) (2,494 ) Net deferred income tax assets 114,862 114,423 Deferred income tax liabilities: Costs capitalized for financial statement purposes and deducted for income tax purposes: Goodwill and identifiable intangible assets (214,865 ) (133,185 ) Other, primarily depreciation of property, plant and equipment (26,840 ) (16,883 ) Total deferred income tax liabilities (241,705 ) (150,068 ) Net deferred income tax liabilities $ (126,843 ) $ (35,645 ) 20112013 and 2010,2012, the total valuation allowance on net deferred income tax assets was approximately $3.4$2.2 million and $0.8$2.5 million respectively., respectively, primarily related to state and local net operating losses. The reason for the net increasedecrease in the valuation allowance for 20112012 was related to 2011 acquisitions, partially offset by the expiration of net capital loss carryforwards, partially offset by state and local net operating loss carryforwards. At December 31, 2013, we had trading and capital losses for United Kingdom income tax purposes of approximately $34.7 million, which have no expiration date. Such losses are subject to review by the United Kingdom taxing authority. Realization of the deferred income tax assets is dependent on our generating sufficient taxable income. We believe that the deferred income tax assets will be realized through the future reversal of existing taxable temporaryEMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 13— INCOME TAXES — (Continued) (loss) before income taxes from continuing operations for the years ended December 31, 2011, 20102013, 2012 and 20092011 consisted of the following (in thousands):0000000 0000000 0000000 2011 2010 2009 $ 191,154 $ (46,114 ) $ 235,381 10,198 17,990 11,577 $ 201,352 $ (28,124 ) $ 246,958 We have not recorded deferred income taxes on the undistributed earnings of our foreign subsidiaries because of our intent to indefinitely reinvest such earnings. Upon distribution of these earnings in the form of dividends or otherwise, we may be subject to U.S. income taxes and foreign withholding taxes. It is not practical, however, to estimate the amount of taxes that may be payable if such earnings or invested capital was repatriated to the United States.NOTE 14— COMMON STOCK 2013 2012 2011 United States $ 219,300 $ 236,774 $ 191,154 Foreign (16,649 ) 7,474 10,198 $ 202,651 $ 244,248 $ 201,352 20112013, we had undistributed foreign earnings from our United Kingdom subsidiary of approximately $5.7 million for which we have not recorded a deferred tax liability, as we have provided taxes on such earnings in prior periods. As of December 31, 2013, the amount of cash held in the United Kingdom was approximately $60.9 million which, if repatriated, should not result in material federal or state income taxes. As of December 31, 2013, we had undistributed foreign earnings from our Puerto Rico subsidiary of approximately $1.4 million for which we have not recorded a deferred tax liability as such earnings are indefinitely reinvested. As of December 31, 2013, the amount of cash held in Puerto Rico was approximately $3.0 million which, if repatriated, may result in federal and 2010, 66,444,400state income taxes of approximately $0.5 million.66,660,551Subsidiariesthe Companyus to repurchase up to $100.0$100.0 million of itsour outstanding common stock. During 2011,2013, we repurchased approximately 1.20.7 million shares of our common stock for approximately $27.5 million. As$26.1 million. Since the inception of this repurchase program, we have repurchased 2.8 million shares of our common stock for approximately $77.5 million through December 31, 2011,2013, and there remains authorization for us to repurchase approximately $72.5$22.5 million of our shares under that authorization. On December 5, 2013, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our shares.outstanding common stock. As a result, $122.5 million was available for repurchase as of December 31, 2013. The repurchase program does not obligate the Companyus 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. Acquisitions under our repurchase program may be made from time to time asto the extent permitted by securities laws and other legal requirements.requirements, including provisions in our credit agreement placing limitations on such repurchases. The repurchase program has been and will be funded from the Company’s internal funds.15—13 - SHARE-BASED COMPENSATION PLANS2,805,4942,247,362 shares are available for grant or issuance as of December 31, 2011.2013. Any issuances under this plan are valued at the fair market value of the common stock on the grant date. The vesting and expiration of any stock option grants and the vesting schedule of any stock awards or stock units are determined by the Compensation and Personnel Committee of our Board of Directors at the time of the grant. Additionally, we have outstanding stock options and stock units that were issued under other plans, and no further grants may be made under those plans.EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 15— SHARE-BASED COMPENSATION PLANS — (Continued)2008: Shares Weighted
Average
Price Shares Weighted
Average
Price 4,738,348 $ 12.66 504,428 $ 21.81 210,764 $ 21.08 128,563 $ 23.17 — — — — (413,938 ) $ 6.77 (258,102 ) $ 18.27 4,535,174 $ 13.59 374,889 $ 24.71 175,723 $ 24.78 110,335 $ 27.88 — — — — (294,124 ) $ 9.58 (120,036 ) $ 28.13 4,416,773 $ 14.31 365,188 $ 24.54 20,096 $ 29.26 257,850 $ 29.95 — — — — (1,036,328 ) $ 11.32 (137,219 ) $ 23.31 3,400,541 $ 15.30 485,819 $ 27.76 Stock Options Restricted Stock Units Shares Shares Balance, December 31, 2010 4,416,773 $ 14.31 Balance, December 31, 2010 365,188 $ 24.54 Granted 20,096 $ 29.26 Granted 258,881 $ 29.92 Expired — — Forfeited — — Exercised (1,036,328 ) $ 11.32 Vested (137,219 ) $ 23.31 Balance, December 31, 2011 3,400,541 $ 15.30 Balance, December 31, 2011 486,850 $ 27.75 Granted 11,702 $ 27.39 Granted 340,518 $ 27.90 Expired (25,624 ) 28.13 Forfeited — — Exercised (1,590,242 ) $ 13.09 Vested (238,461 ) $ 25.96 Balance, December 31, 2012 1,796,377 $ 17.15 Balance, December 31, 2012 588,907 $ 28.56 Granted — $ — Granted 192,617 $ 36.26 Expired — $ — Forfeited (15,298 ) 29.38 Exercised (485,680 ) $ 14.55 Vested (155,423 ) $ 27.77 Balance, December 31, 2013 1,310,697 $ 18.12 Balance, December 31, 2013 610,803 $ 31.17 6,560, 8,61012,264 and 2,0716,560 shares were granted to certain non-employee directors pursuant toas part of their annual retainer arrangements during the years ended December 31, 2011, 20102012 and 2009,2011, respectively. No shares were granted to non-employee directors as part of their annual retainer during the year ended December 31, 2013. The shares awarded to non-employee directors and stock units awarded to employees were pursuant to incentive plans for which $5.2$6.9 million, $3.6$6.7 million and $3.5$5.2 million of compensation expense was recognized for the years ended December 31, 2011, 20102013, 2012 and 2009,2011, respectively. We have $3.9$5.1 million of compensation expense, net of income taxes, which will be recognized over the remaining vesting periodperiods of up to approximately three years related to the stock units awarded to employees and non-employee directors. We hadphantom equity units, whichstock options were settled in cash based uponfully vested as of December 31, 2012; therefore, no compensation expense was recognized for the valueyear ended December 31, 2013. Compensation expense of our stock price, for which $1.4$0.1 million and $0.1$0.2 million of income was recognized for the years ended December 31, 20102012 and 2009, respectively. These variations were due to changes in the market price of our common stock from the award date. There were no phantom equity units outstanding during or as of December 31, 2011.Compensation expense of $0.2 million, $2.1 million and $2.0 million for the years ended December 31, 2010 and 2009,, respectively, was recognized due to the vesting of stock option grants. All outstandingIn addition, 66,581 restricted stock options were fullyunits granted to our non-employee directors vested as of December 31, 2011.2013, but issuance has been deferred for up to five years. As a result of stock option exercises, $5.6$5.2 million $2.8, $8.8 million and $2.8$5.6 million of proceeds were received during the years ended December 31, 2011, 20102013, 2012 and 2009,2011, respectively. The income tax benefit derived in 2011, 20102013, 2012 and 20092011 as a result of such exercises and share-based compensation was $6.2$5.2 million $2.0, $8.7 million and $2.2$6.2 million, respectively, of which $3.6$4.6 million $1.5, $7.1 million and $2.2$3.6 million, respectively, represented excess tax benefits.2011, 20102013, 2012 and 20092011 was $15.1$12.5 million $5.2, $25.9 million and $7.3$15.1 million, respectively.2011, 20102013, 2012 and 2009, 3,400,541, 4,416,7732011, 1,310,697 options, 1,796,377 options and 4,535,1743,400,541 options were exercisable, respectively. The weighted average exercise price of exercisable options at December 31, 2011, 20102013, 2012 and 20092011 was approximately $15.30, $14.31$18.12, $17.15 and $13.59,$15.30, respectively.EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 15— SHARE-BASED COMPENSATION PLANS — (Continued)2011: Number Weighted Average
Exercise Price 106,000 2.82 Years $ 9.67 1,952,792 2.56 Years $ 11.30 799,542 2.45 Years $ 17.03 422,207 5.32 Years $ 26.08 120,000 3.47 Years $ 36.03 Stock Options Outstanding and Exercisable Number $9.67 - $11.02 91,000 0.73 Years $9.97 $11.27 - $12.49 617,200 1.04 Years $11.39 $20.42 - $22.53 210,000 3.05 Years $21.23 $24.48 - $29.26 292,497 4.00 Years $26.49 $36.03 100,000 1.47 Years $36.03 2011, 20102013, 2012 and 20092011 were approximately $39.1$31.9 million $64.8, $31.4 million and $60.4$39.1 million, respectively. For the Years Ended December 31, 2011 2010 2009 0 % 0 % 0 % 56.1 % 45.7 % 46.9 % 1.3 % 2.6 % 2.5 % 3.6 6.7 5.1 $ 12.23 $ 12.18 $ 9.18 In 2011, there For the Years Ended December 31, 2012 2011 Dividend yield 0.73 % 0 % Expected volatility 52.6 % 56.1 % Risk-free interest rate 0.5 % 1.3 % Expected life of options in years 3.6 3.6 Weighted average grant date fair value $ 10.18 $ 12.23 of options since the declaration of a dividend on September 25, 2011.during 2013. Forfeitures of stock options have been historically insignificant to the calculation and are estimated to be zero in all periods presented.16—14 - RETIREMENT PLANS. On; however, no individual joining the company after October 31, 2001 the UK Plan was closed to new entrants. As a result, employees joining the subsidiary after this date were not eligible tomay participate in the plan. On May 31, 2010, we curtailed the future accrual of benefits for active employees participating inunder this plan. As a result of this curtailment, we recognized a reduction of the projected benefit obligation and recorded a curtailment gain of $6.4 million, which will be amortized in the future through net periodic pension cost. This defined pension plan was replaced by a defined contribution plan. The benefits under the UK Plan are based on wages and years of service with the subsidiary up to the date of the curtailment. Our policy is to fund at least the minimum amount required by law, but we agreed with the UK Plan Trustees to fund additional amounts and in conjunction with the curtailment, we made a one-time contribution of $25.9 million to the UK Plan in 2010. The measurement date of the UK Plan is December 31 of each year.“Compensation—Retirement“Compensation-Retirement Benefits” (“ASC 715”). ASC 715 requires that (a) the funded status, which is measured as the difference between the fair value ofEMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 16— RETIREMENT PLANS — (Continued)20112013 and 20102012 consisted of the following components (in thousands): 2011 2010 $ 249,848 $ 253,730 — 1,458 13,286 13,399 — 523 12,509 8,445 — (6,374 ) (9,198 ) (12,052 ) (1,384 ) (9,281 ) 265,061 249,848 212,933 174,426 (4,936 ) 20,679 5,824 33,135 — 523 (9,198 ) (12,052 ) (543 ) (3,778 ) 204,080 212,933 $ (60,981 ) $ (36,915 ) 2013 2012 Change in pension benefit obligation Benefit obligation at beginning of year $ 302,306 $ 265,061 Interest cost 12,326 12,460 Actuarial (gain) loss (1,903 ) 21,642 Benefits paid (9,663 ) (9,543 ) Foreign currency exchange rate changes 5,811 12,686 Benefit obligation at end of year 308,877 302,306 Change in pension plan assets Fair value of plan assets at beginning of year 239,650 204,080 Actual return on plan assets 27,969 29,231 Employer contributions 5,906 5,933 Benefits paid (9,663 ) (9,543 ) Foreign currency exchange rate changes 5,949 9,949 Fair value of plan assets at end of year 269,811 239,650 Funded status at end of year $ (39,066 ) $ (62,656 ) 2011 2010 $ 97,093 $ 68,955 2013 2012 Unrecognized losses $ 87,461 $ 104,556 $61.0$39.1 million and $36.9$62.7 million at December 31, 20112013 and 2010,2012, respectively, is included in “Other long-term obligations” in the accompanying Consolidated Balance Sheets. No plan assets are expected to be returned to us during the year ended December 31, 2012.20112013 and 20102012 were as follows: 2011 2010 4.7 % 5.3 % 2013 2012 Discount rate 4.6 % 4.3 % EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 16— RETIREMENT PLANS — (Continued)2011, 20102013, 2012 and 20092011 were as follows: 2011 2010 2009 5.3 % 5.6 % 5.8 % — — 3.8 % 6.7 % 7.0 % 6.8 % 2013 2012 2011 Discount rate 4.3 % 4.7 % 5.3 % Annual rate of return on plan assets 6.7 % 6.7 % 6.7 % isfor 2011 was based on the yield of risk-free bonds, plus an estimated equity-risk premium, at each year’syear's measurement date. This annual rate approximates the historical annual return on plan assets and considers the expected asset allocation between equity and debt securities. For measurement purposes of the liability, the annual rates of inflation of covered pension benefits assumed for 20112013 and 20102012 were 2.2%2.3% and 3.4%2.0%, respectively. 2013 2012 2011 Interest cost $ 12,326 $ 12,460 $ 13,286 Expected return on plan assets (14,369 ) (13,058 ) (13,454 ) Amortization of unrecognized loss 2,560 2,433 1,555 Net periodic pension cost $ 517 $ 1,835 $ 1,387 2010was approximately $2.0 million, $1.9 million and 2009 were$1.2 million, respectively, which was classified as follows (in thousands):00000000 00000000 00000000 2011 2010 2009 $ — $ 1,458 $ 3,152 13,286 13,399 11,982 (13,454 ) (12,245 ) (9,744 ) 1,555 2,914 4,229 $ 1,387 $ 5,526 $ 9,619 $2.5 million.20112013 and 20102012 were as follows: Target
Asset
Allocation December 31,
2011 December 31,
2010 65.0 % 64.1 % 67.4 % 35.0 35.8 32.5 — 0.1 0.1 100.0 % 100.0 % 100.0 % Asset Category Target
Asset
Allocation December 31,
2013 December 31,
2012Equity securities 45.0 % 53.4 % 63.8 % Debt securities 55.0 % 46.4 % 35.8 % Cash — % 0.2 % 0.4 % Total 100.0 % 100.0 % 100.0 % 16—14 - RETIREMENT PLANS —- (Continued)11—10 - Fair Value Measurements, the assets of the UK Plan at fair value as of December 31, 20112013 and 20102012 (in thousands): Assets at Fair Value as of December 31, 2011 Level 1 Level 2 Level 3 Total $ — $ 126,128 $ 4,690 $ 130,818 — 50,140 — 50,140 — 22,990 — 22,990 132 — — 132 $ 132 $ 199,258 $ 4,690 $ 204,080 Assets at Fair Value as of December 31, 2010 Level 1 Level 2 Level 3 Total $ — $ 138,372 $ 5,003 $ 143,375 — 47,469 — 47,469 — 21,800 — 21,800 289 — — 289 $ 289 $ 207,641 $ 5,003 $ 212,933 Assets at Fair Value as of December 31, 2013 Asset Category Level 1 Level 2 Level 3 Total Equity and equity like investments $ — $ 138,908 $ 5,196 $ 144,104 Corporate bonds — 101,337 — 101,337 Government bonds — 23,716 — 23,716 Cash 654 — — 654 Total $ 654 $ 263,961 $ 5,196 $ 269,811 Assets at Fair Value as of December 31, 2012 Asset Category Level 1 Level 2 Level 3 Total Equity and equity like investments $ — $ 147,957 $ 4,996 $ 152,953 Corporate bonds — 62,534 — 62,534 Government bonds — 23,227 — 23,227 Cash 936 — — 936 Total $ 936 $ 233,718 $ 4,996 $ 239,650 1—This1-This asset represents cash.2—These2-These assets are a combination of the following:(a) (i) (ii) (b) 3—Assets3-Assets that are not exchange traded but have a unit price that is based on the net asset value of the fund. The unit prices are not quoted and are not available on any market.EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 16— RETIREMENT PLANS — (Continued)Plan’sPlan's Level 3 assets for the years ended December 31, 20112013 and 20102012 (in thousands): 2011 2010 $ 5,003 $ 3,569 (302 ) 405 — 1,139 (11 ) (110 ) $ 4,690 $ 5,003 Equity and Equity Like Investments 2013 2012 Start of year balance $ 4,996 $ 4,690 Actual return on plan assets, relating to assets still held at reporting date 99 90 Purchases, sales and settlements, net — — Change due to exchange rate changes 101 216 End of year balance $ 5,196 $ 4,996 company)Company) to achieve a reasonable balance between risk, likely return and administration expense, as well as to maintain funds at a level to meet minimum funding requirements. In order to ensure that an appropriate investment strategy is in place, an analysis of the UK Plan’sPlan's assets and liabilities is completed periodically.Contributions$5.4$6.0 million to its UK Plan in 2012. which reflect expected future service, as appropriate, are expected to be paid in the following years (in thousands): Pension
Benefits $ 9,206 9,481 9,765 10,059 10,360 56,655 2014 $ 10,520 2015 10,838 2016 11,166 2017 11,504 2018 11,852 Succeeding five years 64,845 20112013 and 20102012 (in thousands): 2011 2010 $ 265,061 $ 249,848 $ 265,061 $ 249,848 $ 204,080 $ 212,933 2013 2012 Projected benefit obligation $ 308,877 $ 302,306 Accumulated benefit obligation $ 308,877 $ 302,306 Fair value of plan assets $ 269,811 $ 239,650 domestic U.S. defined benefit plans in which participation by new individuals is frozen. The benefit obligation associated with these plans as of December 31, 20112013 and 20102012 was approximately $6.3$6.6 million and $6.1$7.1 million, respectively. The estimated fair value of the plan assets as of December 31, 20112013 and 20102012 was approximately $4.3$4.9 million and $5.0$4.5 million, respectively. The plan assets are considered Level 1 assets within the fair value hierarchy and are predominantly invested in cash, equities, and equity and bond funds. The pension liability balances as of December 31, 20112013 and 20102012 are classified as “OtherEMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 16— RETIREMENT PLANS — (Continued)20112013 and 20102012 included discount rates of 4.50% and 4.25%4.30% for the 20112013 period and 5.25%3.50% and 5.00%3.30% for the 20102012 period. Also, included was an expected rate of return of 7.5%7.00% for the 2013 and 2012 periods, respectively. The reclassification adjustment from Accumulated other comprehensive loss into net periodic pension cost for the years ended December 31, 2013, 2012 and 2011 was approximately $0.3 million, $0.2 million and 2010 periods for both plans.$0.1 million, respectively, which was classified as a component of "Selling, general and administrative expenses" on the Consolidated Statements of Operations. The estimated loss for these plans that will be amortized from Accumulated other comprehensive loss into net periodic pension cost over the next year is approximately $0.4 million.$0.3 million. The future estimated benefit payments expected to be paid from the plans for the next ten years is approximately $0.4$0.4 million per year.175200 multiemployer pension plans (“MEPPs”) that provide retirement benefits to certain union employees in accordance with various collective bargaining agreements (“CBAs”). As one of many participating employers in these MEPPs, we are responsible with the other participating employers for any plan underfunding. Our contributions to a particular MEPP are established by the applicable CBAs; however, our required contributions may increase based on the funded status of an MEPP and legal requirements of the Pension Protection Act of 2006 (the “PPA”), which requires substantially underfunded MEPPs to implement a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) to improve their funded status. Factors that could impact funded status of an MEPP include, without limitation, investment performance, changes in the participant demographics, decline in the number of contributing employers, changes in actuarial assumptions and the utilization of extended amortization provisions.MEPPs’MEPPs' unfunded vested benefits. We believe that certain of the MEPPs in which we participate may have unfunded vested benefits. Due to uncertainty regarding future factors that could trigger withdrawal liability, as well as the absence of specific information regarding the MEPP’sMEPP's current financial situation, we are unable to determine (a) the amount and timing of any future withdrawal liability, if any, and (b) whether our participation in these MEPPs could have a material adverse impact on our financial condition,position, results of operations or liquidity. We recorded a withdrawal liability of approximately $0.1 million for the year ended December 31, 2013. We did not record any withdrawal liability for the years ended December 31, 20112012 and 2010. We recorded approximately $1.0 million for withdrawal liabilities for the year ended December 31, 2009.EMCOR Group, Inc.2011and Subsidiaries.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 16— RETIREMENT PLANS — (Continued)$2.0$2.0 million in 2011.2013. Additionally, this table also lists all domestic MEPPs to which we contributed in 20112013 in excess of $0.5$0.5 million for MEPPs in the critical status, “red“red zone” and $1.0$1.0 million in the endangered status, “orange“orange or yellow zones”, as defined by the PPA (in thousands): EIN/Pension Plan
Number PPA Zone Status FIP/RP
Status Contributions Contributions
greater than 5% of
total plan
contributions (1) Expiration
date of CBA 2011 2010 2011 2010 2009 Plumbers & Pipefitters National Pension Fund 52-6152779 001 Yellow Yellow Implemented $ 12,279 $ 9,392 $ 9,717 No April 2012 to
April 2015Sheet Metal Workers National Pension Fund 52-6112463 001 Red Red Implemented 9,665 7,688 7,474 No May 2012 to
June 2015National Electrical Benefit Fund 53-0181657 001 Green Green N/A 8,541 8,100 7,035 No February
2012 to
September
2015National Automatic Sprinkler Industry Pension Fund 52-6054620 001 Red (3) Red (3) Implemented 5,452 4,825 3,963 No April 2012 to
June 2014Central Pension Fund of the International Union of Operating Engineers and Participating Employers 36-6052390 001 Green Green N/A 5,392 3,847 3,702 No February
2012 to
December
2015Pension, Hospitalization & Benefit Plan of the Electrical Industry- Pension Trust Account 13-6123601 001 Green Green N/A 5,364 5,291 6,118 No January 2012
to May 2013Southern California IBEW-NECA Pension Trust Fund 95-6392774 001 Green Red N/A 3,345 2,541 3,155 No May 2012 to
November
2014Plumbers Pipefitters & Mechanical Equipment Service Local Union #392 Pension Plan 31-0655223 001 Red Red Implemented 3,332 3,174 2,730 Yes June 2014 Electrical Contractors Association of the City of Chicago Local Union 134, IBEW Joint Pension Trust of Chicago Pension Plan 2 51-6030753 002 Green Green N/A 3,019 1,780 1,556 No June 2014 Southern California Pipe Trades Retirement Fund 51-6108443 001 Green (3) Yellow (3) N/A 2,903 2,944 2,186 No June 2012 to
June 2014Arizona Pipe Trades Pension Plan 86-6025734 001 Green Green N/A 2,877 2,874 1,633 Yes June 2012 to
June 2014Sheet Metal Workers Pension Plan of Northern California 51-6115939 001 Red (3) Green (3) Implemented 2,604 1,831 2,309 No June 2013 Northern California Pipe Trades Pension Plan 94-3190386 001 Green (3) Green (3) N/A 2,596 2,464 3,986 No June 2012 to
June 2013Electrical Workers Local No. 26 Pension Trust Fund 52-6117919 001 Green Green N/A 2,244 2,007 1,647 No May 2012 to
July 2012Eighth District Electrical Pension Fund 84-6100393 001 Green Green N/A 2,159 2,267 1,899 No February
2014 to May
2015Heating, Piping & Refrigeration Pension Fund 52-1058013 001 Orange Green Implemented 2,143 1,578 1,460 No July 2013 Pipefitters Union Local 537 Pension Fund 51-6030859 001 Green Green Implemented 2,140 2,576 3,421 Yes July 2012 to
August 2013CT Plumbers and Pipefitters Pension Fund 06-6050353 001 Green Red N/A 1,690 1,695 1,245 Yes May 2012 Boilermaker-Blacksmith National Pension Trust 48-6168020 001 Yellow Yellow Implemented 1,635 1,881 1,170 No August 2012
to September
2014Local No. 697 IBEW and Electrical Industry Pension Fund 51-6133048 001 Yellow (3) Yellow (3) Implemented 1,557 1,383 1,100 Yes May 2012 Pension Fund 2013 2012 2013 2012 2011 Plumbers & Pipefitters National Pension Fund 52-6152779 001 Yellow Yellow Implemented $ 12,509 $ 10,999 $ 12,351 No Sheet Metal Workers National Pension Fund 52-6112463 001 Red Red 9,476 9,837 9,665 No National Electrical Benefit Fund 53-0181657 001 Green Green N/A 7,986 7,679 8,541 No Central Pension Fund of the International Union of Operating Engineers and Participating Employers 36-6052390 001 Green Green N/A 6,296 6,076 5,392 No Pension, Hospitalization & Benefit Plan of the Electrical Industry- Pension Trust Account 13-6123601 001 Green Green N/A 6,189 5,722 5,364 No May 2014 to May 2016 16—14 - RETIREMENT PLANS —- (Continued) EIN/Pension Plan
Number PPA Zone Status FIP/RP
Status Contributions Contributions
greater than 5% of
total plan
contributions (1) Expiration
date of CBA 2011 2010 2011 2010 2009 Sheet Metal Workers Pension Plan of Southern California, Arizona & Nevada 95-6052257 001 Red (3) Red (3) Pending (2) 1,396 1,731 1,906 No June 2014 to IBEW Local 531 & NECA Pension Plan 35-6068417 001 Yellow (3) Yellow (3) Implemented 1,263 581 175 Yes September
2012Pipefitters Retirement Fund, Local 597 62-6105084 001 Yellow Yellow Implemented 1,210 875 810 No May 2012 to IBEW Local 456 Pension Plan 22-6238995 001 Yellow Yellow Implemented 1,175 2,047 764 Yes May 2014 Construction Industry Laborers Pension Fund 43-6060737 001 Red (3) Red (3) Implemented 1,148 1,165 1,290 Yes August 2016 Steamfitters Local Union No. 420 Pension Plan 23-2004424 001 Yellow Red Implemented 1,138 1,234 1,235 No April 2013 to
April 2014Pension Fund of Local Union No. 274 22-1665268 001 Yellow (3) Red (3) Implemented 1,094 583 801 Yes April 2013 Plumbers Local 9 Pension Plan 51-0219541 001 Red Yellow Implemented 944 483 127 No June 2013 Plumbers and Steamfitters Local No. 166 AFL - CIO Pension Plan 51-6132690 001 Red Red Implemented 901 930 354 Yes May 2012 Carpenters Pension Trust Fund For Northern California 94-6050970 001 Red Red Implemented 512 313 344 No July 2015 Other Multiemployer Pension Plans 37,944 40,203 42,682 Various $ 129,662 $ 120,283 $ 117,994 Pension Fund Contributions 2013 2012 2013 2012 2011 Southern California Pipe Trades Retirement Fund 51-6108443 001 Green Green N/A 5,498 3,443 2,903 No June 2014 to
August 2015National Automatic Sprinkler Industry Pension Fund 52-6054620 001 Red Red 4,226 4,952 5,452 No Plumbers Pipefitters & Mechanical Equipment Service Local Union 392 Pension Plan 31-0655223 001 Red Red Implemented 4,128 3,848 3,332 Yes June 2014 Arizona Pipe Trades Pension Plan 86-6025734 001 Green Green N/A 4,108 6,871 2,877 Yes June 2014 Pipefitters Union Local 537 Pension Fund 51-6030859 001 Green Green N/A 3,690 2,747 2,140 Yes February 2014 to
August 2017Sheet Metal Workers Pension Plan of Northern California 51-6115939 001 Red Red Implemented 3,658 3,881 2,604 No June 2014 to June 2016 Southern California IBEW-NECA Pension Trust Fund 95-6392774 001 Yellow Yellow Implemented 3,215 3,266 3,345 No Eighth District Electrical Pension Fund 84-6100393 001 Green Green N/A 3,005 3,890 2,159 Yes February 2014 to July 2016 Electrical Workers Local No. 26 Pension Trust Fund 52-6117919 001 Green Green N/A 2,878 3,049 2,244 Yes U.A. Local 393 Pension Trust Fund Defined Benefit 94-6359772 002 Green Green N/A 2,811 2,181 1,877 Yes June 2014 to June 2015 Electrical Contractors Association of the City of Chicago Local Union 134, IBEW Joint Pension Trust of Chicago Pension Plan 2 51-6030753 002 Green Green N/A 2,412 2,179 3,019 No June 2014 Northern California Pipe Trades Pension Plan 94-3190386 001 Green Green N/A 2,258 3,582 2,596 Yes May 2014 to
June 2015San Diego Electrical Pension Trust 95-6101801 001 Green Green N/A 2,162 1,846 1,629 Yes May 2014 to September 2016 Heating, Piping & Refrigeration Pension Fund 52-1058013 001 Yellow Yellow Implemented 2,139 2,078 2,143 No February 2014 to July 2016 Boilermaker-Blacksmith National Pension Trust 48-6168020 001 Yellow Yellow Implemented 1,828 2,996 1,635 No March 2014
to September
2015U.A. Local 38 Defined Benefit Pension Plan 94-3042549 001 Yellow Yellow Implemented 1,522 927 333 No June 2014 to June 2017 Local No. 697 IBEW and Electrical Industry Pension Fund 51-6133048 001 Yellow Yellow Implemented 1,443 1,757 1,557 Yes May 2014 to August 2014 Sheet Metal Workers Pension Plan of Southern California, Arizona & Nevada 95-6052257 001 Red Red 1,271 1,072 1,396 No June 2014 Plumbing & Pipe Fitting Local 219 Pension Fund 34-6682376 001 Red Red Implemented 1,142 936 863 Yes May 2014 to May 2015 Pension Fund Contributions 2013 2012 2013 2012 2011 Plumbers & Steamfitters Local 150 Pension Fund 58-6116699 001 Yellow Yellow Implemented 1,011 1,036 659 Yes March 2016 Steamfitters Local Union No. 420 Pension Plan 23-2004424 001 Red Red Implemented 831 1,557 1,138 No April 2014 to
May 2014Plumbers & Pipefitters Local 162 Pension Fund 31-6125999 001 Red Red 770 737 433 Yes May 2014 U.A. Local 467 Defined Benefit Plan 94-2353807 005 Red Red Implemented 538 534 396 No June 2014 to June 2015 Other Multiemployer Pension Plans 42,271 39,038 41,619 Various Total Contributions $ 141,271 $ 138,716 $ 129,662 (1) (2) This information was obtained from the respective plans’plans' Form 5500 for the most current available filing. These dates may not correspond with our fiscal year contributions. The above noted percentages of contributions are based upon disclosures contained in the plans’plans' Form 5500 filing (“Forms”). Those Forms, among other things, disclose the names of individual participating employers whose annual contributions account for more than 5% of the aggregate annual amount contributed by all participating employers for a plan year. Accordingly, if the annual contribution of two or more of our subsidiaries each accounted for less than 5% of such contributions, but in the aggregate accounted for in excess of 5% of such contributions, that greater percentage is not available and accordingly is not disclosed.(2)(3) For these respective plans, a funding surcharge iswas currently in effect for 2011.2013.(3)This zone status represents the most recent available information for the respective MEPP, which is 2010 for the 2011 year and 2009 for the 2010 year.ofin the amount of our contributions to a particular MEPP for any given period. That is because, in any given market, we could be working on a significant project and/or projects, which could result in an increase in our direct labor force and a corresponding increase in our contributions to the MEPP(s) dictated by the applicable CBA. When that particular project(s) finishes and is not replaced, the levelnumber of direct laborparticipants in the MEPP(s) who are employed by us would also decrease, as would our level of contributions to the particular MEPP(s). Additionally, the levelamount of contributions to a particular MEPP could also be affected by the terms of the CBA, which could require at a particular time, an increase in the contribution rate and/or surcharges. We have also acquired various companies since 2009,2011, some of which participate in MEPPs, and as a result, our level of contributions have increased as a result of including the acquired companies’ contributions with respect to a particular MEPP in our consolidated information.increased. As a result of these acquisitions made in 2011, our contributions to various MEPPs increased by $10.1$5.4 million $3.4 million and $0.9 million in for the year ended December 31, 2011. No additional contributions were made to MEPPs for the years ended December 31, 2011, 20102013 and 2009, respectively.$0.3$0.3 million for each of the years ended December 31, 2011, 20102013, 2012 and 2009.2011. The information that we have obtained relating to these plans is notEMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 16— RETIREMENT PLANS — (Continued)at least 80%100% funded, and the other plan is betweenless than 65% and 80% funded. A recovery plan has been put in place for the plan that is betweenless than 65% and 80% funded, which requiredrequires higher contribution amounts to be paid by our UK operations.$64.2$93.5 million $54.1, $89.9 million and $52.5$76.5 million for the years ended December 31, 2011, 20102013, 2012 and 2009,2011, respectively. Acquisitions during the period of 2009 tomade in 2011 accountaccounted for an increase in our contributions to these types of plans of $2.9$2.5 million $0.2 million and $0.1 million in for the year ended December 31, 2011. No additional contributions were made to other post retirement benefit plans for the years ended December 31, 2011, 20102013 and 2009, respectively.2012, as a result of acquisitions made in each respective year since the acquired companies were not parties to any of these types of plans. The levelamount of funding forcontributions to these plans is also subject for the most part to the factors discussed above in conjunction with the MEPPs.employee’semployee's base compensation. The expenses recognized for the years ended2011, 20102013, 2012 and 20092011 for these plans were $12.8$22.6 million $11.0, $20.7 million and $9.7$12.8 million, respectively. The increase in 2012 compared to 2011 was primarily attributable to an increase in matching contributions for one of these plans. At our discretion, we may make additional supplemental matching contributions to a defined contribution retirement and savings plan. The expenses recognized related to additional supplemental contributionsmatching for the years ended December 31, 2011, 20102013, 2012 and 20092011 were $4.5$4.0 million $6.2, $3.6 million and $7.6$3.0 million, respectively.2011, 20102013, 2012 and 20092011 was $6.0$5.0 million $5.1, $5.7 million and $3.3$6.0 million, respectively. The increase in the expense recognized for 2010 compared to 2009 was primarily due to the UK Plan being curtailed and replaced by a defined contribution plan.17—15 - COMMITMENTS AND CONTINGENCIES2011,2013, were as follows (in thousands): Capital
Leases Operating
Leases Sublease
Income $ 1,766 $ 54,284 $ 1,006 1,577 43,266 872 1,149 35,546 726 801 27,309 597 — 19,504 74 — 32,942 — 5,293 $ 212,851 $ 3,275 (436 ) $ 4,857 Capital
Leases Operating
Leases Sublease
Income2014 $ 1,995 $ 55,640 $ 1,265 2015 1,653 45,291 1,124 2016 865 35,228 188 2017 393 23,001 63 2018 40 12,997 — Thereafter — 17,442 — Total minimum lease payments 4,946 $ 189,599 $ 2,640 Amounts representing interest (294 ) Present value of net minimum lease payments $ 4,652 EMCOR Group, Inc.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 17— COMMITMENTS AND CONTINGENCIES — (Continued)2011, 20102013, 2012 and 20092011 was $103.3$118.6 million $86.9, $115.6 million and $95.8$103.3 million, respectively. Rent expense for the years ended December 31, 2011, 20102013, 2012 and 20092011 was reported net of sublease rental income of $1.0$1.2 million $0.9, $1.0 million and $0.7$1.0 million, respectively.We are contingently liablesureties in respectour customers payment and performance bonds (“Surety Bonds”) as a condition to the award of performance and payment bonds issued by sureties, usually at the request of customers in connection with construction projects, whichsuch contracts. The Surety Bonds secure our payment and performance obligations under such contracts, and we have agreed to indemnify the Surety Companies for such projects.amounts, if any, paid by them in respect of Surety Bonds issued on our behalf. In addition, at the request of labor unions representing certain of our employees, bondsSurety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for such employees. OurPublic sector contracts require Surety Bonds more frequently than private sector contracts, and accordingly, our bonding requirements typically increase as the amount of public sector work increases. As of December 31, 2011,2013, based on our percentage-of-completion of our projects covered by surety bonds,Surety Bonds, our aggregate estimated exposure, had there been$1.2 billion.$0.8 billion. The surety bondsSurety Bonds are issued by surety companiesSurety Companies in return for premiums, which vary depending on the size and type of bond. We have agreed to indemnify the sureties for amounts, if any, paid by them in respect of bonds issued on our behalf.2011,2013, we employed over 25,00027,000 people, approximately 61%57% of whom are represented by various unions pursuant to more than 400375 collective bargaining agreements between our individual subsidiaries and local unions. We believe that our employee relations are generally good. Only two of these collective bargaining agreements are national or regional in scope.$1.2 million, $1.8 millionprimarily attributable to employee severance obligations and $3.3 million for 2011, 2010 and 2009, respectively. Thethe termination of leased facilities incurred in our United States building services segment. In 2011, restructuring expenses were primarily related to employee severance obligations at our corporate headquarters. The 2010 restructuring expenses were primarily attributable to our United States electrical construction and facilities services segment, while the 2009 restructuring expenses were primarily related to our UK operations. As of December 31, 2011, 20102013, 2012 and 2009,2011, the balance of our severancerestructuring related obligations yet to be paid was $0.2$4.9 million $0.3, $0.1 million and $0.7$0.2 million, respectively. The severancemajority of obligations outstanding as of December 31, 20102012 and 20092011 were paid during 20112013 and 2010.2012. The majority of severance obligations outstanding as of December 31, 20112013 will be paid during 2014. We expect to incur an additional $1.4 million of expenses in 2012. United States
electrical
construction
and facilities
services segment United States
mechanical
construction
and facilities
services segment United Kingdom construction
and building
services segment Total Balance at December 31, 2011 $ 76 $ — $ 140 $ — $ 216 Charges — — 145 — 145 Payments — — (285 ) — (285 ) Non-cash items (23 ) — — — (23 ) Balance at December 31, 2012 53 — — — 53 Charges — 479 168 11,056 11,703 Payments — (302 ) (160 ) (6,174 ) (6,636 ) Non-cash items (23 ) (13 ) (8 ) (197 ) (241 ) Balance at December 31, 2013 $ 30 $ 164 $ — $ 4,685 $ 4,879 United States
electrical
construction
and facilities
services segment United States
mechanical
construction
and facilities
services segment United Kingdom construction
and building
services segment Total Severance $ — $ 370 $ 160 $ 8,794 $ 9,324 Leased facilities — 109 8 2,262 2,379 Total charges $ — $ 479 $ 168 $ 11,056 $ 11,703 materiallymaterial adverse effect on our financial position, results of operations or liquidity.18—16 - ADDITIONAL CASH FLOW INFORMATION2011, 20102013, 2012 and 20092011 (in thousands): 2011 2010 2009 $ 9,450 $ 9,240 $ 6,174 $ 72,572 $ 77,264 $ 97,505 $ 2,744 $ 1,478 $ — $ — $ 1,428 $ 2,197 2013 2012 2011 Cash paid during the year for: Interest $ 10,568 $ 5,633 $ 9,450 Income taxes $ 104,324 $ 62,824 $ 72,572 Non-cash financing activities: Assets acquired under capital lease obligations $ 414 $ 1,590 $ 2,744 19—17 - SEGMENT INFORMATIONfacilitiesbuilding services; (d) United States industrial services; and (e) United Kingdom construction and facilities services; and (e) Other international construction and facilitiesbuilding services. The segment “United States facilitiesbuilding services” principally consists of those operations which provide a portfolio of services needed to support the operation and maintenance of customers’ facilities. The segment "United States industrial services" principally consists of those operations which provide industrial maintenance and services, mainly for refineries and petrochemical plants. The United Kingdom and Other international construction and facilitiesbuilding services segments performsegment performs electrical construction, mechanical construction and facilitiesbuilding services. In August 2011, we sold our Canadian subsidiary, which represented our Canada construction segment and which performed electrical construction and mechanical construction. Our “Other international construction and facilities services” segment consisted of our equity interest in a Middle East venture, which interest we sold in June 2010.2011, 20102013, 2012 and 20092011 (in millions)thousands): 2011 2010 2009 $ 1,155.1 $ 1,158.9 $ 1,273.7 1,904.5 1,708.4 1,959.9 2,024.9 1,522.3 1,493.6 5,084.5 4,389.6 4,727.2 529.0 462.4 500.5 — — — $ 5,613.5 $ 4,852.0 $ 5,227.7 $ 1,161.8 $ 1,167.8 $ 1,281.9 1,912.5 1,715.3 1,975.2 2,052.8 1,544.7 �� 1,511.6 (42.6 ) (38.2 ) (41.5 ) 5,084.5 4,389.6 4,727.2 529.0 462.4 500.5 — — — $ 5,613.5 $ 4,852.0 $ 5,227.7 2013 2012 2011 Revenues from unrelated entities: United States electrical construction and facilities services $ 1,345,750 $ 1,211,692 $ 1,155,079 United States mechanical construction and facilities services 2,329,834 2,386,498 2,009,073 United States building services 1,794,978 1,807,917 1,602,964 United States industrial services 519,413 401,793 317,377 Total United States operations 5,989,975 5,807,900 5,084,493 Canada construction — — — United Kingdom construction and building services 427,183 538,779 528,966 Total worldwide operations $ 6,417,158 $ 6,346,679 $ 5,613,459 Total revenues: United States electrical construction and facilities services $ 1,371,979 $ 1,233,468 $ 1,161,716 United States mechanical construction and facilities services 2,387,072 2,414,296 2,017,056 United States building services 1,839,129 1,837,995 1,629,317 United States industrial services 522,417 405,002 318,966 Less intersegment revenues (130,622 ) (82,861 ) (42,562 ) Total United States operations 5,989,975 5,807,900 5,084,493 Canada construction — — — United Kingdom construction and building services 427,183 538,779 528,966 Total worldwide operations $ 6,417,158 $ 6,346,679 $ 5,613,459 19—17 - SEGMENT INFORMATION —- (Continued) 2011 2010 2009 $ 84.6 $ 70.4 $ 114.5 117.0 131.3 129.7 68.1 60.0 73.7 269.7 261.7 317.9 9.2 15.7 12.0 — (0.1 ) (0.1 ) (63.1 ) (55.9 ) (62.9 ) (1.2 ) (1.8 ) (3.3 ) (3.8 ) (246.1 ) (13.5 ) 210.8 (26.5 ) 250.1 (11.3 ) (12.2 ) (7.9 ) 1.8 2.7 4.7 — 7.9 — $ 201.4 $ (28.1 ) $ 247.0 $ 2.6 $ 3.5 $ 4.0 6.5 2.5 3.3 16.4 11.9 13.0 25.5 17.9 20.3 0.1 0.2 1.5 3.3 1.0 1.6 — — — 0.7 0.3 0.7 �� $ 29.6 $ 19.4 $ 24.1 $ 4.1 $ 4.4 $ 4.5 4.7 4.5 6.5 16.1 14.1 13.0 24.9 23.0 24.0 0.3 0.6 0.8 1.5 1.1 0.9 — — — 0.7 0.8 1.1 $ 27.4 $ 25.5 $ 26.8 2013 2012 2011 Operating income (loss): United States electrical construction and facilities services $ 98,114 $ 100,736 $ 84,601 United States mechanical construction and facilities services 93,765 125,261 118,529 United States building services 67,225 43,290 47,087 United States industrial services 38,763 37,241 19,510 Total United States operations 297,867 306,528 269,727 Canada construction — — — United Kingdom construction and building services (5,981 ) 7,052 9,225 Corporate administration (69,891 ) (63,468 ) (63,124 ) Restructuring expenses (11,703 ) (145 ) (1,240 ) Impairment loss on identifiable intangible assets — — (3,795 ) Total worldwide operations 210,292 249,967 210,793 Other corporate items: Interest expense (8,769 ) (7,275 ) (11,261 ) Interest income 1,128 1,556 1,820 Income from continuing operations before income taxes $ 202,651 $ 244,248 $ 201,352 Capital expenditures: United States electrical construction and facilities services $ 6,164 $ 3,273 $ 2,637 United States mechanical construction and facilities services 8,866 8,119 6,765 United States building services 7,579 11,086 9,616 United States industrial services 10,281 11,124 6,499 Total United States operations 32,890 33,602 25,517 Canada construction — — 100 United Kingdom construction and building services 1,536 3,604 3,291 Corporate administration 1,071 669 673 Total worldwide operations $ 35,497 $ 37,875 $ 29,581 Depreciation and amortization of Property, plant and equipment: United States electrical construction and facilities services $ 3,640 $ 3,926 $ 4,088 United States mechanical construction and facilities services 7,280 6,768 4,904 United States building services 11,288 10,584 10,193 United States industrial services 8,781 6,560 5,685 Total United States operations 30,989 27,838 24,870 Canada construction — — 336 United Kingdom construction and building services 4,477 2,594 1,529 Corporate administration 844 772 691 Total worldwide operations $ 36,310 $ 31,204 $ 27,426 19—17 - SEGMENT INFORMATION —- (Continued) 2011 2010 $ 35.8 $ 25.7 35.8 20.5 28.7 21.7 100.3 67.9 — 12.0 14.5 8.4 — — $ 114.8 $ 88.3 $ 130.7 $ 161.5 241.3 195.7 34.2 32.7 406.2 389.9 — 16.2 35.5 50.6 — — $ 441.7 $ 456.7 $ 15.0 $ 16.5 258.8 213.6 754.9 501.1 1,028.7 731.2 �� — 3.5 8.6 4.3 — — 1.5 1.5 $ 1,038.8 $ 740.5 $ 3.8 $ 3.8 198.5 175.2 364.5 227.8 566.8 406.8 — — — — — — — — $ 566.8 $ 406.8 $ 277.3 $ 295.1 723.2 577.3 1,241.4 866.0 2,241.9 1,738.4 — 103.0 227.0 201.6 — — 545.2 712.5 $ 3,014.1 $ 2,755.5 2013 2012 2011 Costs and estimated earnings in excess of billings on uncompleted contracts: United States electrical construction and facilities services $ 28,988 $ 28,207 $ 35,845 United States mechanical construction and facilities services 38,804 34,084 41,964 United States building services 14,957 15,528 22,574 United States industrial services 5 — — Total United States operations 82,754 77,819 100,383 Canada construction — — — United Kingdom construction and building services 7,973 15,242 14,453 Total worldwide operations $ 90,727 $ 93,061 $ 114,836 Billings in excess of costs and estimated earnings on uncompleted contracts: United States electrical construction and facilities services $ 118,458 $ 89,889 $ 130,738 United States mechanical construction and facilities services 205,974 219,876 247,454 United States building services 30,827 36,319 28,045 United States industrial services 805 — — Total United States operations 356,064 346,084 406,237 Canada construction — — — United Kingdom construction and building services 25,231 37,443 35,458 Total worldwide operations $ 381,295 $ 383,527 $ 441,695 Long-lived assets: United States electrical construction and facilities services $ 16,512 $ 14,146 $ 14,961 United States mechanical construction and facilities services 293,790 269,990 261,357 United States building services 406,498 449,641 469,009 United States industrial services 772,209 280,170 283,403 Total United States operations 1,489,009 1,013,947 1,028,730 Canada construction — — — United Kingdom construction and building services 8,831 11,502 8,609 Corporate administration 1,896 1,519 1,502 Total worldwide operations $ 1,499,736 $ 1,026,968 $ 1,038,841 Total assets: United States electrical construction and facilities services $ 329,742 $ 283,997 $ 277,278 United States mechanical construction and facilities services 795,256 785,286 778,330 United States building services 756,785 800,081 816,695 United States industrial services 940,916 400,207 369,594 Total United States operations 2,822,699 2,269,571 2,241,897 Canada construction — — — United Kingdom construction and building services 160,828 214,455 227,029 Corporate administration 482,388 623,044 545,128 Total worldwide operations $ 3,465,915 $ 3,107,070 $ 3,014,054 20—18 - SELECTED UNAUDITED QUARTERLY INFORMATION The results March 31 June 30 Sept. 30 Dec. 31 2013 Quarterly Results Revenues $ 1,568,401 $ 1,556,753 $ 1,629,067 $ 1,662,937 Gross profit 191,138 181,535 206,310 234,075 Net income attributable to EMCOR Group, Inc. $ 30,167 $ 21,014 $ 26,690 $ 45,921 Basic EPS from continuing operations $ 0.45 $ 0.31 $ 0.40 $ 0.69 Diluted EPS from continuing operations $ 0.44 $ 0.31 $ 0.39 $ 0.68 March 31 June 30 Sept. 30 Dec. 31 2012 Quarterly Results Revenues $ 1,538,521 $ 1,590,035 $ 1,606,242 $ 1,611,881 Gross profit 180,693 193,964 203,248 228,449 Net income attributable to EMCOR Group, Inc. $ 27,145 $ 33,448 $ 39,581 $ 46,410 Basic EPS from continuing operations $ 0.41 $ 0.50 $ 0.59 $ 0.69 Diluted EPS from continuing operations $ 0.40 $ 0.49 $ 0.59 $ 0.68 20112013 and 2010,2012, and the related consolidated statements of operations, cash flows, andcomprehensive income, equity and comprehensive income (loss)cash flows for each of the three years in the period ended December 31, 2011.2013. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.20112013 and 2010,2012, and the consolidated results of theirits operations and theirits cash flows for each of the three years in the period ended December 31, 2011,2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.Company’sCompany's internal control over financial reporting as of December 31, 2011,2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) and our report dated February 27, 201225, 2014 expressed an unqualified opinion thereon.Stamford, Connecticut 27, 2012 subsidiaries’subsidiaries' (the “Company”) internal control over financial reporting as of December 31, 2011,2013, based on criteria established in Internal Control—IntegratedControl-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) (the COSO criteria). The Company’sCompany's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’sManagement's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’sCompany's internal control over financial reporting based on our audit.company’scompany's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’scompany's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’scompany's assets that could have a material effect on the financial statements.2011,2013, based on the COSO criteria.20112013 and 2010,2012, and the related consolidated statements of operations, cash flows, andcomprehensive income, equity and comprehensive income (loss)cash flows for each of the three years in the period ended December 31, 20112013 of the Company and our report dated February 27, 201225, 2014 expressed an unqualified opinion thereon.Stamford, Connecticut 27, 2012 Management’s2011,2013, our management conducted an evaluation of the effectiveness of our internal control over financial reporting, with the exception of the previously mentioned RSI acquisition, based on the framework established inInternal Control—-Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, management has determined that EMCOR’sEMCOR's internal control over financial reporting is effective as of December 31, 2011.2013.20112013 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report appearing in this Annual Report on Form 10-K, which such report expressed an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2011.20112013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.reporting, aside from the previously mentioned acquisition of RSI. As part of its ongoing integration activities, EMCOR is continuing to incorporate its controls and procedures into RSI.20122014 Annual Meeting of Stockholders entitled “Election of Directors”, which Proxy Statement is to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year to which this Form 10-K relates (the “Proxy Statement”). The information required by this Item 10 concerning compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference to the section of the Proxy Statement entitled “Section 16(a) Beneficial Ownership Reporting Compliance”. The information required by this Item 10 concerning the Audit Committee of our Board of Directors and Audit Committee financial experts is incorporated by reference to the section of the Proxy Statement entitled “Meetings and Committees of the Board of Directors” and “Corporate Governance”. Information regarding our executive officers is contained in Part I of this Form 10-K following Item 4 under the heading “Executive Officers of the Registrant”. We have adopted a Code of Ethics that applies to our Chief Executive Officer and our Senior Financial Officers, a copy of which is filed as an Exhibit hereto.Except as set forth below, theFinancial Statements: Financial Statements:Consolidated Balance Sheets - December 31, 2013 and 2012 Consolidated Balance Sheets—December 31, 2011 and 2010Operations—Operations - Years Ended December 31, 2011, 20102013, 2012 and 2009Consolidated Statements Comprehensive Income - Years Ended December 31, 2013, 2012 and 2011 Consolidated Statements of Cash Flows—Flows - Years Ended December 31, 2011, 20102013, 2012 and 20092011and Comprehensive (Loss) Income—- Years Ended December 31, 2011, 20102013, 2012 and 2009II—II - Valuation and Qualifying Accounts and (b) EMCOR GROUP, INC. (Registrant) /s/ ANTHONY J. GUZZI By:/S/ ANTHONY J. GUZZIDate: February 27, 2012President and Chief Executive Officer 27, 2012.25, 2014.Anthony J. GuzziAnthony J. Guzzi (Principal Executive Officer) Mark A. PompaMark A. Pompa (Principal Financial and Accounting Officer) FRANK T. MACINNISSFrank T. MacInnisTEPHEN W. BERSHAD Chairman of the Board of Directors /S/ STEPHEN W. BERSHAD Director David A. B. Brown Director Larry J. Bump Director Albert Fried, Jr. Director Richard F. Hamm, Jr. Director David H. Laidley Director Frank T. MacInnis Director Jerry E. Ryan Director Michael T. Yonker Description Allowance for doubtful accounts Year Ended December 31, 2013 $ 11,472 3,533 12 (3,127 ) $ 11,890 Year Ended December 31, 2012 $ 16,685 1,163 337 (6,713 ) $ 11,472 Year Ended December 31, 2011 $ 17,287 2,238 743 (3,583 ) $ 16,685 /S/ DAVID A. B. BROWNDavid A. B. BrownDirector/S/ LARRY J. BUMPLarry J. BumpDirector/S/ ALBERT FRIED, JR.Albert Fried, Jr.Director/S/ RICHARD F. HAMM, JR.Richard F. Hamm, Jr.Director/S/ DAVID H. LAIDLEYDavid H. LaidleyDirector/S/ JERRY E. RYANJerry E. RyanDirector/S/ MICHAEL T. YONKERMichael T. YonkerDirectorEMCOR Group, Inc.and SubsidiariesSCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS(In thousands) Balance at
Beginning
of Year Costs and
Expenses,
(Recovery of) Additions
Charged To
Other (1) Deductions (2) Balance at
End of Year $ 17,287 2,238 743 (3,583 ) $ 16,685 $ 36,188 (5,126 )(3) 18 (13,793 ) $ 17,287 $ 34,832 7,178 307 (6,129 ) $ 36,188 (1) (2) (3)Primarily relates to recovery of amounts previously determined to be uncollectible.EMCOR Group, Inc.and SubsidiariesEXHIBIT INDEX Page Number2(a-1) Purchase Agreement dated as of February 11, 2002 by and among Comfort Systems USA, Inc. and EMCOR-CSI Holding Co. Purchase and Sale Agreement dated as of August 20, 2007 between FR X Ohmstede Holdings LLC and EMCOR Group, Inc. 2(a-3) Purchase and Sale Agreement, dated as of June 17, 2013 by and among Texas Turnaround LLC, a Delaware limited liability company, Altair Strickland Group, Inc., a Texas corporation, Rep Holdings LLC, a Texas limited liability company, ASG Key Employee LLC, a Texas limited liability company, Repcon Key Employee LLC, a Texas limited liability company, Gulfstar MBII, Ltd., a Texas limited partnership, The Trustee of the James T. Robinson and Diana J. Robinson 2010 Irrevocable Trust, The Trustee of the Steven Rothbauer 2012 Descendant’s Trust, The Co-Trustees of the Patia Strickland 2012 Descendant’s Trust, The Co-Trustees of the Carter Strickland 2012 Descendant’s Trust, and The Co-Trustees of the Walton 2012 Grandchildren’s Trust (collectively, “Sellers”) and EMCOR Group, Inc. Exhibit 2.1 to EMCOR’s Report on Form 8-K (Date of Report June 17, 2013) Restated Certificate of Incorporation of EMCOR filed December 15, 1994 Amendment dated November 28, 1995 to the Restated Certificate of Incorporation of EMCOR Amendment dated February 12, 1998 to the Restated Certificate of Incorporation of EMCOR Amendment dated January 27, 2006 to the Restated Certificate of Incorporation of EMCOR 10-K”10- Amendment dated September 18, 2007 to the Restated Certificate of Incorporation of EMCOR Amended and Restated By-Laws (the "By-Laws") 4(a) ThirdAmendments to Article I, Sections 6(c) and 6(j) of the By-LawsExhibit 3.1 to EMCOR's Report on Form 8-K (Date of Report December 5, 2013) 4(a) Fourth Amended and Restated Credit Agreement dated as of November 21, 201125, 2013 by and among EMCOR Group, Inc. and a subsidiary and Bank of Montreal, as Agent, and the lenders listed on the signature pages thereof (the “Credit Agreement”) Exhibit 4.1(a) to EMCOR’s Report on Form 8-K (Date of Report November 21, 2011) (“November 2011 Form 8-K”) ThirdFourth Amended and Restated Security Agreement dated as of February 4, 2010November 25, 2013 among EMCOR, certain of its U.S. subsidiaries, and Bank of Montreal, as Agent Exhibit 4.1(b) to EMCOR’s Report on Form 8-K (Date of Report February 4, 2010) (“February 2010 Form 8-K”) First Supplement to Third Amended and Restated Security Agreement dated as of November 21, 2011 among the Company, certain of its U.S. subsidiaries, and Bank of Montreal, as AgentExhibit 4.1(b) to the November 2011 Form 8-K4(d)ThirdFourth Amended and Restated Pledge Agreement dated as of February 4, 2010November 25, 2013 among EMCOR, certain of its U.S. subsidiaries, and Bank of Montreal, as Agent Exhibit 4.1(c) to the February 2010 Form 8-K4(e) First Supplement to Third Amended and Restated Pledge Agreement dated as of November 21, 2011 among the Company, certain of its U.S. subsidiaries, and Bank of Montreal, as AgentExhibit 4.1(c) to the November 2011 Form 8-KExhibitNo.DescriptionIncorporated By Reference to orPage Number4(f)Second Amended and Restated Guaranty Agreement dated as of February 4, 2010November 25, 2013 by certain of EMCOR’s U.S. subsidiaries in favor of Bank of Montreal, as Agent Exhibit 4.1(d) to the February 2010 Form 8-K4(g)Reaffirmation and First Supplement to Second Amended and Restated Guaranty Agreement dated as of November 21, 2011 by certain of the Company’s U.S. subsidiaries in favor of Bank of Montreal, as AgentExhibit 4.1(d) to the November 2011 Form 8-KDescription 10(a) Form of Severance Agreement (“Severance Agreement”) between EMCOR and each of Sheldon I. Cammaker, R. Kevin Matz and Mark A. Pompa Form of Amendment to Severance Agreement between EMCOR and each of Sheldon I. Cammaker, R. Kevin Matz and Mark A. Pompa ofto EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (“March 2007 Form 10-Q”) Letter Agreement dated October 12, 2004 between Anthony Guzzi and EMCOR (the “Guzzi Letter Agreement”) Form of Confidentiality Agreement between Anthony Guzzi and EMCOR Form of Indemnification Agreement between EMCOR and each of its officers and directors Severance Agreement (“Guzzi Severance Agreement”) dated October 25, 2004 between Anthony Guzzi and EMCOR Amendment to Guzzi Severance Agreement 1994 Management Stock Option Plan (“1994 Option Plan”)Exhibit 10(o) to Form 1010(g-2)Amendment to Section 12 of the 1994 Option PlanExhibit (g-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2000 (“2000 Form 10-K”)10(g-3)Amendment to Section 13 of the 1994 Option PlanExhibit (g-3) to 2000 Form 10-K10(h-1)1995 Non-Employee Directors’ Non-Qualified Stock Option Plan (“1995 Option Plan”)Exhibit 10(p) to Form 1010(h-2)Amendment to Section 10 of the 1995 Option PlanExhibit (h-2) to 2000 Form 10-K10(i-1)1997 Non-Employee Directors’ Non-Qualified Stock Option Plan (“1997 Option Plan”)Exhibit 10(k) to 1998 Form 10-K10(i-2)Amendment to Section 9 of the 1997 Option PlanExhibit 10(i-2) to 2000 Form 10-K10(j-1) Continuity Agreement dated as of June 22, 1998 between Sheldon I. Cammaker and EMCOR (“Cammaker Continuity Agreement”) 10(j-2) Amendment dated as of May 4, 1999 to Cammaker Continuity Agreement 10(j-3) Amendment dated as of March 1, 2007 to Cammaker Continuity Agreement ExhibitNo.DescriptionIncorporated By Reference to orPage Number10(k-1) Continuity Agreement dated as of June 22, 1998 between R. Kevin Matz and EMCOR (“Matz Continuity Agreement”) 10(k-2) Amendment dated as of May 4, 1999 to Matz Continuity Agreement 10(k-3) Amendment dated as of January 1, 2002 to Matz Continuity Agreement 10(k-4) Amendment dated as of March 1, 2007 to Matz Continuity Agreement 10(l-1) Continuity Agreement dated as of June 22, 1998 between Mark A. Pompa and EMCOR (“Pompa Continuity Agreement”) 10(l-2) Amendment dated as of May 4, 1999 to Pompa Continuity Agreement 10(l-3) Amendment dated as of January 1, 2002 to Pompa Continuity Agreement 10(l-4)10(i-4) Amendment dated as of March 1, 2007 to Pompa Continuity Agreement 10(m-1)10(j-1) Change of Control Agreement dated as of October 25, 2004 between Anthony Guzzi (“Guzzi”) and EMCOR (“Guzzi Continuity Agreement”) 10(m-2)10(j-2) Amendment dated as of March 1, 2007 to Guzzi Continuity Agreement 10(j-3) Amendment to Continuity Agreements and Severance Agreements with Sheldon I. Cammaker, Anthony J. Guzzi, R. Kevin Matz and Mark A. Pompa Exhibit 10(q) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2008 (“2008 Form 10-K”) 10(n-1)Description 10(k) Amendment dated as of March 29, 2010 to Severance Agreement with Sheldon I. Cammaker, Anthony J. Guzzi, R. Kevin Matz and Mark A. Pompa 10(n-2)Amendment to Continuity Agreements and Severance Agreements with Sheldon I. Cammaker, Anthony J. Guzzi, R. Kevin Matz and Mark A. PompaExhibit 10(q) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2008 (“2008 Form 10-K”)10(o)Letter Agreement dated May 25, 2010 between EMCOR and Frank T. MacInnisExhibit 10.1 to EMCOR’s Report on Form 8-K (Date of Report May 25, 2010)10(p-1)Incentive Plan for Senior Executive Officers of EMCOR Group, Inc. (“Incentive Plan for Senior Executives”)Exhibit 10.3 to Form 8-K (Date of Report March 4, 2005)10(p-2)First Amendment to Incentive Plan for Senior ExecutivesExhibit 10(t) to 2005 Form 10-K10(p-3)Amendment made February 27, 2008 to Incentive Plan for Senior Executive OfficersExhibit 10(r-3) to 2008 Form 10-K10(p-4)Amendment made December 22, 2008 to Incentive Plan for Senior Executive OfficersExhibit 10(r-4) to 2008 Form 10-K10(p-5)Amendment made December 15, 2009 to Incentive Plan for Senior Executive OfficersExhibit 10(r-5) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2009 (“2009 Form 10-K”)10(p-6)Suspension of Incentive Plan for Senior Executive OfficersExhibit 10(r-5) to 2008 Form 10-KExhibitNo.DescriptionIncorporated By Reference to orPage Number10(q-1) EMCOR Group, Inc. Long-Term Incentive Plan (“LTIP”) 2005)10(q-2) First Amendment to LTIP and updated Schedule A to LTIP 10(q-3) Second Amendment to LTIP 10(l-4) Third Amendment to LTIP Exhibit 10(q-4) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 ("March 2012 Form 10-Q") 10(q-4)Fourth Amendment to LTIP Exhibit 10(l-5) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 10(l-6) Form of Certificate Representing Stock Units issued under LTIP 10(r-1) 2003 Non-Employee Directors’ Stock Option Plan 10(r-2)10(m-2) First Amendment to 2003 Non-Employee Directors’ Plan 10(s-1)10(n-1) 2003 Management Stock Incentive Plan 10(s-2)10(n-2) Amendments to 2003 Management Stock Incentive Plan 10(s-3)10(n-3) Second Amendment to 2003 Management Stock Incentive Plan 10(t)10(o) Form of Stock Option Agreement evidencing grant of stock options under the 2003 Management Stock Incentive Plan 10(u)10(p) Key Executive Incentive Bonus Plan, as amended and restated 18, 2008 (“2008 Proxy Statement”)10(v)2005 Management Stock Incentive PlanExhibit B to EMCOR’s Proxy Statement for its Annual Meeting held June 16, 2005 (“2005 Proxy Statement”)10(w)First Amendment to 2005 Management Stock Incentive PlanExhibit 10(z) to 2006 Form 10-K10(x-1)2005 Stock Plan for DirectorsExhibit C to 2005 Proxy Statement10(x-2)First Amendment to 2005 Stock Plan for DirectorsExhibit 10(a)(a-2) to 2006 Form 10-K10(x-3) Consents on December 15, 2009 to Transfer Stock Options by Non-Employee Directors 10(b)(b)Form of EMCOR Option Agreement for Executive Officers granted January 2, 2002, January 2, 2003 and January 2, 2004Exhibit 4.7 to 2004 Form S-810(c)(c)Form of EMCOR Option Agreement for Directors granted June 19, 2002, October 25, 2002 and February 27, 2003Exhibit 4.8 to 2004 Form S-810(d)(d) Option Agreement dated October 25, 2004 between Guzzi and EMCOR 10(e)(e-1) 2007 Incentive Plan ExhibitNo.DescriptionIncorporated By Reference to orPage Number10(e)(e-2) Option Agreement dated December 13, 2007 under 2007 Incentive Plan between Jerry E. Ryan and EMCOR 10(e)(e-3) Option Agreement dated December 15, 2008 under 2007 Incentive Plan between David Laidley and EMCOR 10(e)(e-4) Form of Option Agreement under 2007 Incentive Plan between EMCOR and each non-employee director electing to receive options as part of annual retainer 10(f)(f-1)10(t-1) 2010 Incentive Plan 10(f)(f-2)10(t-2) Amendment No. 1 to 2010 Incentive Plan Page10(f)(f-3)Description 10(t-3) Amendment No. 2 to 2010 Incentive Plan Exhibit 10(t-3) to 2012 Form 10-K 10(t-4) Form of Option Agreement under 2010 Incentive Plan between EMCOR and each non-employee director with respect to grant of options upon re-election at June 11, 2010 Annual Meeting of Stockholders 10(g)(g)10(t-5) Form of letter agreementOption Agreement under 2010 Incentive Plan, as amended, between EMCOR and each Executive Officer with respectnon-employee director electing to accelerationreceive options as part of options granted January 2, 2003 and January 2, 2004annual retainer 10(b)(b)10(q)(q) to 20042011 Form 10-K10(h)(h) EMCOR Group, Inc. Employee Stock Purchase Plan 10(j)(j)Certificate dated March 24, 2008 evidencing Stock Unit Award to Frank T. MacInnisExhibit 10(k)(k) to the March 2008 Form 10-Q10(k)(k)Form of Restricted Stock Award Agreement dated January 4, 2010 between EMCOR and each of Albert Fried, Jr., Richard F. Hamm, Jr., David H. Laidley, Jerry E. Ryan and Michael T. YonkerExhibit 10(l)(l) to 2009 Form 10-K10(l)(l)Form of Restricted Stock Award Agreement dated January 3, 2011 between EMCOR and each of Richard F. Hamm, Jr., David H. Laidley, Jerry E. Ryan and Michael T. YonkerExhibit 10(l)(l) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 201010(m)(m) Form of Restricted Stock Award Agreement dated January 3, 2012 between EMCOR and each of Larry J. Bump, Albert Fried, Jr., Richard F. Hamm, Jr., David H. Laidley, Frank T. MacInnis, Jerry E. Ryan and Michael T. Yonker Page10(n)(n) Director Award Program Adopted May 13, 2011, as amended and restated December 14, 2011 Page10(o)(o) Form of Amended and Restated Restricted Stock Award Agreement dated December 14, 2011 amending and restating restricted stock award agreement dated June 1, 2011 under Director Award Program with each of Stephen W. Bershad, David A.B. Brown, Larry J. Bump, Albert Fried, Jr., Richard F. Hamm, Jr., David H. Laidley, Jerry E. Ryan and Michael T. Yonker Page10(p)(p) Restricted Stock Unit Agreement dated May 9, 2011 between EMCOR and Anthony J. Guzzi ExhibitNo.DescriptionIncorporated By Reference to orPage Number10(q)(q)Form of Option Agreement under 2010 Incentive Plan, as amended, between EMCOR and each non-employee director electing to receive options as part of annual retainerPage10(r)(r) Amendment to Option Agreements Page10(z) Form of Restricted Stock Unit Agreement dated March , 2012 between EMCOR and each of Sheldon I. Cammaker, R. Kevin Matz and Mark A. Pompa Exhibit 10(o)(o) to the March 31, 2012 Form 10-Q Form of Non-LTIP Stock Unit Certificate Exhibit 10(p)(p) to the March 31, 2012 Form 10-Q 10(b)(b) Form of Director Restricted Stock Unit Agreement Exhibit 10(k)(k) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 ("June 2012 Form 10-Q") 10(c)(c) Director Award Program, as Amended and Restated December 6, 2012 Exhibit 10(d)(d) to 2012 Form 10-K 10(d)(d) EMCOR Group, Inc. Voluntary Deferral Plan Exhibit 10(e)(e) to 2012 Form 10-K 10(e)(e) First Amendment to EMCOR Group, Inc. Voluntary Deferral Plan Filed herewith 10(f)(f) Form of Executive Restricted Stock Unit Agreement Exhibit 10(f)(f) to 2012 Form 10-K 10(g)(g) Restricted Stock Unit Award Agreement dated October 23, 2013 between EMCOR and Stephen W. Bershad Filed herewith 11 Computation of Basic EPS and Diluted EPS for the years ended December 201131, 2013 and 2010*2012 Code of Ethics of EMCOR for Chief Executive Officer and Senior Financial Officers 21 List of Significant Subsidiaries*Subsidiaries PageFiled herewith 23.1 Consent of Ernst & Young LLP*LLP PageDescription 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Anthony J. Guzzi, the President and Chief Executive Officer*Officer PageFiled herewith Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Mark A. Pompa, the Executive Vice President and Chief Financial Officer*Officer PageFiled herewith Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the President and Chief Executive Officer**Officer PageFurnished Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Executive Vice President and Chief Financial Officer**Officer PageFurnished101 Information concerning mine safety violations or other regulatory matters Filed herewith 101 2011,2013, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (iv)(v) the Consolidated Statements of Equity and Comprehensive Income (Loss) and (v)(vi) the Notes to Consolidated Financial Statements.*** PageFiled*Filed Herewith**Furnished Herewith***Submitted Electronically HerewithRegistrant’sRegistrant's subsidiaries.86