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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
xFORM10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2022
OR
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number 1-8267
EMCOR GROUP, INC.Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware11-2125338
(State or Other Jurisdiction of

Incorporation or Organization)
(I.R.S. Employer

Identification Number)
301 Merritt Seven
Norwalk, Connecticut
06851-1092
Norwalk,Connecticut06851-1092
(Address of Principal Executive Offices)(Zip Code)
(203)849-7800
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
N/ATitle of each classTrading SymbolName of each exchange on which registered
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Common StockEMENew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x☒    No  o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x☒    No o ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerx
☒
Accelerated filero☐
Non-accelerated filer
o (Do not check if a smaller reporting company)
☐		Smaller reporting companyo☐
Emerging growth companyo☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).  Yes  o☐    No  x☒
Applicable Only To Corporate Issuers
Number of shares of Common Stock outstanding as of the close of business on October 23, 2017: 58,813,795April 22, 2022: 51,141,944 shares.


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EMCOR Group, Inc.
INDEXTABLE OF CONTENTS
 
Page No.
Item 1.
1
2
3
4
5
6
Item 2.
1823
Item 3.
3137
Item 4.
3238
Item 1.
39
Item 2.
3239
Item 4.
3239
Item 6.
3240


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FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They generally contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” variations of such wording and other words or phrases of similar meaning. Forward-looking statements in this report include discussions of our future operating or financial performance and other forward-looking commentary regarding aspects of our business, including market share growth, gross profit, remaining performance obligations, project mix, projects with varying profit margins, selling, general and administrative expenses, and trends in our business, and other characterizations of future events or circumstances, such as the effects of the COVID-19 pandemic and supply chain disruptions and delays. Each forward-looking statement included in this report is subject to risks and uncertainties, including those identified in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, and other sections of this report, and in our Form 10-K for the year ended December 31, 2021, including, without limitation, the “Risk Factors” section of such Form 10-K. Such risks and uncertainties could cause actual results to differ materially from those that might be anticipated from, or projected or implied by, our forward-looking statements. The forward-looking statements contained in this report speak only as of the filing date of this report. We undertake no obligation to update any forward-looking statements. However, any further disclosures made on related subjects in our subsequent reports filed with the Securities and Exchange Commission (the “SEC”) should be consulted. We caution investors not to place undue reliance on forward-looking statements, due to their inherent uncertainty.

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PART I. – FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
September 30,
2017
(Unaudited)		 December 31,
2016		March 31,
2022
(Unaudited)		December 31,
2021
ASSETS   ASSETS
Current assets:   Current assets:
Cash and cash equivalents$480,496
 $464,617
Cash and cash equivalents$514,513 $821,345 
Accounts receivable, less allowance for doubtful accounts of $16,948 and $12,252, respectively1,537,819
 1,495,431
Costs and estimated earnings in excess of billings on uncompleted contracts135,602
 130,697
Accounts receivable, less allowance for credit losses of $22,956 and $23,534, respectivelyAccounts receivable, less allowance for credit losses of $22,956 and $23,534, respectively2,303,449 2,204,519 
Contract assetsContract assets262,119 230,143 
Inventories43,653
 37,426
Inventories71,463 54,098 
Prepaid expenses and other34,402
 40,944
Prepaid expenses and other64,861 80,889 
Total current assets2,231,972
 2,169,115
Total current assets3,216,405 3,390,994 
Investments, notes and other long-term receivables7,604
 8,792
Property, plant and equipment, net126,563
 127,951
Property, plant and equipment, net151,346 152,066 
Operating lease right-of-use assetsOperating lease right-of-use assets266,379 260,778 
Goodwill1,010,399
 979,628
Goodwill891,536 890,268 
Identifiable intangible assets, net497,278
 487,398
Identifiable intangible assets, net574,614 589,365 
Other assets92,505
 79,554
Other assets130,874 157,975 
Total assets$3,966,321
 $3,852,438
Total assets$5,231,154 $5,441,446 
LIABILITIES AND EQUITY   LIABILITIES AND EQUITY
Current liabilities:   Current liabilities:
Current maturities of long-term debt and capital lease obligations$15,364
 $15,030
Current maturities of long-term debt and finance lease liabilitiesCurrent maturities of long-term debt and finance lease liabilities$16,017 $16,235 
Accounts payable485,701
 501,213
Accounts payable719,792 734,275 
Billings in excess of costs and estimated earnings on uncompleted contracts532,386
 489,242
Contract liabilitiesContract liabilities827,708 788,134 
Accrued payroll and benefits309,237
 310,514
Accrued payroll and benefits411,668 490,867 
Other accrued expenses and liabilities209,591
 195,775
Other accrued expenses and liabilities261,118 274,406 
Operating lease liabilities, currentOperating lease liabilities, current60,267 57,814 
Total current liabilities1,552,279
 1,511,774
Total current liabilities2,296,570 2,361,731 
Borrowings under revolving credit facility125,000
 125,000
Long-term debt and capital lease obligations273,506
 283,296
Long-term debt and finance lease liabilitiesLong-term debt and finance lease liabilities245,416 245,450 
Operating lease liabilities, long-termOperating lease liabilities, long-term224,231 220,836 
Other long-term obligations397,671
 394,426
Other long-term obligations329,139 360,340 
Total liabilities2,348,456
 2,314,496
Total liabilities3,095,356 3,188,357 
Equity:   Equity:
EMCOR Group, Inc. stockholders’ equity:   EMCOR Group, Inc. stockholders’ equity:
Preferred stock, $0.10 par value, 1,000,000 shares authorized, zero issued and outstanding—
 —
Preferred stock, $0.10 par value, 1,000,000 shares authorized, zero issued and outstanding— — 
Common stock, $0.01 par value, 200,000,000 shares authorized, 59,850,983 and 60,606,825 shares issued, respectively599
 606
Common stock, $0.01 par value, 200,000,000 shares authorized, 60,832,337 and 60,737,006 shares issued, respectivelyCommon stock, $0.01 par value, 200,000,000 shares authorized, 60,832,337 and 60,737,006 shares issued, respectively608 607 
Capital surplus4,343
 52,219
Capital surplus62,374 61,874 
Accumulated other comprehensive loss(100,559) (101,703)Accumulated other comprehensive loss(85,949)(83,562)
Retained earnings1,748,100
 1,596,269
Retained earnings2,901,909 2,835,504 
Treasury stock, at cost 1,044,474 and 659,841 shares, respectively(35,471) (10,302)
Treasury stock, at cost 9,002,414 and 7,437,268 shares, respectivelyTreasury stock, at cost 9,002,414 and 7,437,268 shares, respectively(743,846)(562,036)
Total EMCOR Group, Inc. stockholders’ equity1,617,012
 1,537,089
Total EMCOR Group, Inc. stockholders’ equity2,135,096 2,252,387 
Noncontrolling interests853
 853
Noncontrolling interests702 702 
Total equity1,617,865
 1,537,942
Total equity2,135,798 2,253,089 
Total liabilities and equity$3,966,321
 $3,852,438
Total liabilities and equity$5,231,154 $5,441,446 
See Notes to Condensed Consolidated Financial Statements.

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EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)(Unaudited)

 Three months ended September 30, Nine months ended September 30,
 2017 2016 2017 2016
Revenues$1,886,691
 $1,923,174
 $5,674,360
 $5,601,560
Cost of sales1,591,621
 1,655,130
 4,838,449
 4,835,667
Gross profit295,070
 268,044
 835,911
 765,893
Selling, general and administrative expenses188,565
 181,441
 552,903
 530,654
Restructuring expenses46
 539
 954
 1,271
Operating income106,459
 86,064
 282,054
 233,968
Interest expense(3,324) (3,479) (9,464) (8,973)
Interest income277
 161
 607
 518
Income from continuing operations before income taxes103,412
 82,746
 273,197
 225,513
Income tax provision38,608
 30,783
 98,473
 82,663
Income from continuing operations64,804
 51,963
 174,724
 142,850
Loss from discontinued operation, net of income taxes(207) (406) (729) (1,584)
Net income including noncontrolling interests64,597
 51,557
 173,995
 141,266
Less: Net income attributable to noncontrolling interests—
 (26) —
 (7)
Net income attributable to EMCOR Group, Inc.$64,597
 $51,531
 $173,995
 $141,259
Basic earnings (loss) per common share:       
From continuing operations attributable to EMCOR Group, Inc. common stockholders$1.10
 $0.85
 $2.94
 $2.35
From discontinued operation(0.00) (0.01) (0.01) (0.03)
Net income attributable to EMCOR Group, Inc. common stockholders$1.10
 $0.84
 $2.93
 $2.32
Diluted earnings (loss) per common share:       
From continuing operations attributable to EMCOR Group, Inc. common stockholders$1.09
 $0.85
 $2.93
 $2.33
From discontinued operation(0.00) (0.01) (0.01) (0.03)
Net income attributable to EMCOR Group, Inc. common stockholders$1.09
 $0.84
 $2.92
 $2.30
        
Dividends declared per common share$0.08
 $0.08
 $0.24
 $0.24
Three months ended
 March 31,
20222021
Revenues$2,592,549 $2,304,049 
Cost of sales2,239,994 1,962,976 
Gross profit352,555 341,073 
Selling, general and administrative expenses252,598 224,069 
Operating income99,957 117,004 
Net periodic pension (cost) income1,169 908 
Interest expense, net(1,289)(1,363)
Income before income taxes99,837 116,549 
Income tax provision26,451 31,604 
Net income including noncontrolling interests73,386 84,945 
Net income attributable to noncontrolling interests— 171 
Net income attributable to EMCOR Group, Inc.$73,386 $84,774 
Basic earnings per common share$1.39 $1.54 
Diluted earnings per common share$1.39 $1.54 
Dividends declared per common share$0.13 $0.13 
See Notes to Condensed Consolidated Financial Statements.





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EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)(Unaudited)        
Three months ended September 30, Nine months ended September 30,Three months ended
 March 31,
2017 2016 2017 201620222021
Net income including noncontrolling interests$64,597
 $51,557
 $173,995
 $141,266
Net income including noncontrolling interests$73,386 $84,945 
Other comprehensive income, net of tax:       
Other comprehensive (loss) income, net of tax:Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments(39) (255) (730) (1,056)Foreign currency translation adjustments(2,842)585 
Post retirement plans, amortization of actuarial loss included in net income (1)
640
 440
 1,874
 1,393
Post retirement plans, amortization of actuarial
loss included in net income (1)
455 804 
Other comprehensive income601
 185
 1,144
 337
Other comprehensive (loss) incomeOther comprehensive (loss) income(2,387)1,389 
Comprehensive income65,198
 51,742
 175,139
 141,603
Comprehensive income70,999 86,334 
Less: Comprehensive income attributable to noncontrolling interests—
 (26) —
 (7)
Comprehensive income attributable to noncontrolling interestsComprehensive income attributable to noncontrolling interests— 171 
Comprehensive income attributable to EMCOR Group, Inc.$65,198
 $51,716
 $175,139
 $141,596
Comprehensive income attributable to EMCOR Group, Inc.$70,999 $86,163 
_________
(1)
Net of tax of $0.2 million and $0.1 million for the three months ended September 30, 2017 and 2016, respectively, and net of tax of $0.5 million and $0.4 million for the nine months ended September 30, 2017 and 2016, respectively.
(1)Net of tax of $0.2 million for each of the three months ended March 31, 2022 and 2021.
See Notes to Condensed Consolidated Financial Statements.



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EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)(Unaudited)
Three months ended March 31,
20222021
Cash flows - operating activities:
Net income including noncontrolling interests$73,386 $84,945 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization11,578 12,001 
Amortization of identifiable intangible assets15,551 14,989 
Non-cash share-based compensation expense3,438 3,193 
Other reconciling items(226)(218)
Changes in operating assets and liabilities, excluding the effect of businesses acquired(199,541)(203,899)
Net cash used in operating activities(95,814)(88,989)
Cash flows - investing activities:
Payments for acquisitions of businesses, net of cash acquired(2,914)(24,326)
Proceeds from sale or disposal of property, plant and equipment462 766 
Purchases of property, plant and equipment(11,501)(8,204)
Net cash used in investing activities(13,953)(31,764)
Cash flows - financing activities:
Repayments of finance lease liabilities(979)(1,145)
Dividends paid to stockholders(6,930)(7,121)
Repurchases of common stock(181,810)(12,917)
Taxes paid related to net share settlements of equity awards(4,944)(3,750)
Issuances of common stock under employee stock purchase plan1,955 1,731 
Payments for contingent consideration arrangements(805)(693)
Distributions to noncontrolling interests— (43)
Net cash used in financing activities(193,513)(23,938)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(3,419)886 
Decrease in cash, cash equivalents, and restricted cash(306,699)(143,805)
Cash, cash equivalents, and restricted cash at beginning of year (1)
822,568 903,562 
Cash, cash equivalents, and restricted cash at end of period (2)
$515,869 $759,757 
 Nine months ended September 30,
 2017 2016
Cash flows - operating activities:   
Net income including noncontrolling interests$173,995
 $141,266
Depreciation and amortization30,235
 29,117
Amortization of identifiable intangible assets36,320
 30,678
Provision for doubtful accounts6,027
 3,962
Deferred income taxes(5,991) (830)
Excess tax benefits from share-based compensation(1,565) (2,062)
Equity income from unconsolidated entities(1,132) (719)
Other non-cash items4,735
 6,844
Distributions from unconsolidated entities2,308
 863
Changes in operating assets and liabilities, excluding the effect of businesses acquired(6,648) (80,195)
Net cash provided by operating activities238,284
 128,924
Cash flows - investing activities:   
Payments for acquisitions of businesses, net of cash acquired(82,724) (232,883)
Proceeds from sale of property, plant and equipment2,125
 1,850
Purchase of property, plant and equipment(26,113) (29,306)
Net cash used in investing activities(106,712) (260,339)
Cash flows - financing activities:   
Proceeds from revolving credit facility—
 220,000
Repayments of revolving credit facility—
 (95,000)
Borrowings from long-term debt—
 400,000
Repayments of long-term debt and debt issuance costs(11,401) (317,987)
Repayments of capital lease obligations(1,079) (1,144)
Dividends paid to stockholders(14,266) (14,598)
Repurchase of common stock(90,944) (34,805)
Proceeds from exercise of stock options—
 508
Payments to satisfy minimum tax withholding(3,376) (4,166)
Issuance of common stock under employee stock purchase plan3,459
 3,583
Payments for contingent consideration arrangements(1,017) —
Distributions to noncontrolling interests—
 (2,050)
Net cash (used in) provided by financing activities(118,624) 154,341
Effect of exchange rate changes on cash and cash equivalents2,931
 (5,199)
Increase in cash and cash equivalents15,879
 17,727
Cash and cash equivalents at beginning of year464,617
 486,831
Cash and cash equivalents at end of period$480,496
 $504,558
Supplemental cash flow information:   
Cash paid for:   
Interest$8,507
 $7,920
Income taxes$95,584
 $98,176
Non-cash financing activities:   
Assets acquired under capital lease obligations$1,133
 $1,738
_________

(1)Includes $1.2 million and $0.7 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of December 31, 2021 and 2020, respectively.
(2)Includes $1.4 million and $0.9 million of restricted cash classified as “Prepaid expenses and other” in the Consolidated Balance Sheets as of March 31, 2022 and 2021, respectively.

See Notes to Condensed Consolidated Financial Statements.

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EMCOR Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the three months ended March 31, 2021 and 2022
(In thousands)(Unaudited)        
  EMCOR Group, Inc. Stockholders 
 TotalCommon
stock		Capital
surplus
Accumulated other comprehensive loss (1)
Retained
earnings		Treasury
stock		Noncontrolling
interests
Balance, December 31, 2020$2,053,244 $606 $47,464 $(109,233)$2,480,321 $(366,490)$576 
Net income including noncontrolling interests84,945 — — — 84,774 — 171 
Other comprehensive income1,389 — — 1,389 — — — 
Common stock issued under share-based compensation plans1 1 — — — — — 
Tax withholding for common stock issued under share-based compensation plans(3,750)— (3,750)— — — — 
Common stock issued under employee stock purchase plan1,731 — 1,731 — — — — 
Common stock dividends(7,121)— 55 — (7,176)— — 
Repurchases of common stock(12,917)— — — — (12,917)— 
Distributions to
noncontrolling interests		(43)— — — — — (43)
Share-based compensation expense3,193 — 3,193 — — — — 
Balance, March 31, 2021$2,120,672 $607 $48,693 $(107,844)$2,557,919 $(379,407)$704 
Balance, December 31, 2021$2,253,089 $607 $61,874 $(83,562)$2,835,504 $(562,036)$702 
Net income including noncontrolling interests73,386 — — — 73,386 — — 
Other comprehensive loss(2,387)— — (2,387)— — — 
Common stock issued under share-based compensation plans1 1 — — — — — 
Tax withholding for common stock issued under share-based compensation plans(4,944)— (4,944)— — — — 
Common stock issued under employee stock purchase plan1,955 — 1,955 — — — — 
Common stock dividends(6,930)— 51 — (6,981)— — 
Repurchases of common stock(181,810)— — — — (181,810)— 
Share-based compensation expense3,438 — 3,438 — — — — 
Balance, March 31, 2022$2,135,798 $608 $62,374 $(85,949)$2,901,909 $(743,846)$702 
   EMCOR Group, Inc. Stockholders  
 Total 
Common
stock
 
Capital
surplus
 
Accumulated other comprehensive (loss) income (1)
 
Retained
earnings
 
Treasury
stock
 
Noncontrolling
interests
Balance, December 31, 2015$1,480,056
 $617
 $130,369
 $(76,953) $1,432,980
 $(10,302) $3,345
Net income including noncontrolling interests141,266
 —
 —
 —
 141,259
 —
 7
Other comprehensive income337
 —
 —
 337
 —
 —
 —
Common stock issued under share-based compensation plans (2)
1,492
 3
 498
 —
 991
 —
 —
Tax withholding for common stock issued under share-based compensation plans(4,166) —
 (4,166) —
 —
 —
 —
Common stock issued under employee stock purchase plan3,583
 —
 3,583
 —
 —
 —
 —
Common stock dividends(14,598) —
 143
 —
 (14,741) —
 —
Repurchase of common stock(29,028) (6) (29,022) —
 —
 —
 —
Distributions to noncontrolling interests(2,050) —
 —
 —
 —
 —
 (2,050)
Share-based compensation expense7,000
 —
 7,000
 —
 —
 —
 —
Balance, September 30, 2016$1,583,892
 $614
 $108,405
 $(76,616) $1,560,489
 $(10,302) $1,302
Balance, December 31, 2016$1,537,942
 $606
 $52,219
 $(101,703) $1,596,269
 $(10,302) $853
Net income including noncontrolling interests173,995
 —
 —
 —
 173,995
 —
 —
Other comprehensive income1,144
 —
 —
 1,144
 —
 —
 —
Common stock issued under share-based compensation plans1
 2
 (1) —
 —
 —
 —
Tax withholding for common stock issued under share-based compensation plans(3,376) —
 (3,376) —
 —
 —
 —
Common stock issued under employee stock purchase plan3,459
 1
 3,458
 —
 —
 —
 —
Common stock dividends(14,266) —
 124
 —
 (14,390) —
 —
Repurchase of common stock(88,599) (10) (55,646) —
 (7,774) (25,169) —
Distributions to noncontrolling interests—
 —
 —
 —
 —
 —
 —
Share-based compensation expense7,565
 —
 7,565
 —
 —
 —
 —
Balance, September 30, 2017$1,617,865
 $599
 $4,343
 $(100,559) $1,748,100
 $(35,471) $853
_________
(1)Represents cumulative foreign currency translation adjustments and post retirement liability adjustments.
(1)Represents cumulative foreign currency translation adjustments and post retirement liability adjustments.
(2)
Includes a $1.0 million adjustment to retained earnings to recognize net operating loss carryforwards attributable to excess tax benefits on stock compensation upon the adoption of Accounting Standards Update No. 2016-09.
See Notes to Condensed Consolidated Financial Statements.

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EMCOR Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Consequently, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. References to the “Company,” “EMCOR,” “we,” “us,” “our”“our,” and similar words refer to EMCOR Group, Inc. and its consolidated subsidiaries unless the context indicates otherwise. Readers of this report should refer to the consolidated financial statements and the notes thereto included in our latest Annual Report on Form 10-K filed with the Securities and Exchange Commission.
In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of those of a normal recurring nature) necessary to present fairly our financial position and the results of our operations.
Our reportable segments and related disclosures reflect certain reclassifications of prior year amounts from our United States mechanical construction and facilities services segment to our United States building services segment, and from our United States building services segment to our United States construction segments, due to changes in our internal reporting structure aimed at realigning our service offerings.
The results of operations for the three and nine months ended September 30, 2017March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2017.2022.
NOTE 2 - New Accounting Pronouncements
On January 1, 2017, we adoptedThe Company is currently evaluating the impact of an accounting pronouncementstandards update issued by the Financial Accounting Standards Board (“FASB”), which provides temporary optional expedients and exceptions to simplifyexisting U.S. GAAP. This guidance is aimed at easing the presentationfinancial reporting burdens related to reference rate reform, including the expected market transition from LIBOR, or other interbank offered rates, to alternative reference rates. Such accounting pronouncement allows entities to account for and present certain contract modifications, which occur before December 31, 2022 and result from the transition to an alternative reference rate, as an event that does not require remeasurement at the modification date or reassessment of deferred income taxes withina previous accounting determination. While we are still evaluating the balance sheet. Thisimpact of this pronouncement, eliminateswe do not anticipate that it will have a material impact on our financial position and/or results of operations, as we are not exposed to any contracts that reference LIBOR, other than our credit agreement dated as of March 2, 2020, which contains provisions that allow for the requirement that deferred tax assets and liabilities are presented as current or noncurrent based onamendment of such agreement to use alternative reference rates in the natureevent of the underlying assets and liabilities. Instead, thediscontinuation of LIBOR.
In October 2021, an accounting pronouncement requires that all deferred tax assets and liabilities, including valuation allowances, be classified as noncurrent. We adopted this pronouncement on a retrospective basis. As a result of such adoption, approximately $41.7 million of net deferred tax assets, which were previously presented as “Prepaid expenses and other” in the Condensed Consolidated Balance Sheet as of December 31, 2016, were reclassified as a reduction to “Other long-term obligations.”
On January 1, 2017, we adopted the accounting pronouncementwas issued by the FASB, that changes how an entity accounts for revenue contracts it acquires in a business combination. The pronouncement requires entities to simplifyapply the accounting for goodwill impairment.revenue recognition guidance within Accounting Standards Codification Topic 606 to recognize and measure contract assets and liabilities from contracts with customers in a business combination, creating an exception to the fair value recognition and measurement principle typically utilized when valuing acquired assets. The guidance is aimed at improving comparability by addressing when an acquirer should recognize a contract asset or contract liability, as well as how such assets and liabilities should be measured, and will generally result in companies recognizing contract assets and contract liabilities at amounts consistent with those recorded by the target entity prior to acquisition. This guidance eliminatesis effective for public business entities for fiscal years beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the requirement that an entity calculate the implied fair value of goodwill when measuring an impairment charge. Instead, an entity would record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. We adopted this pronouncement on a prospective basis. The adoptionpotential impact of this guidance didaccounting pronouncement; however, we do not believe that its adoption will have a material impact on our financial position and/or results of operations.
In February 2016, an accounting pronouncement was issued by the FASB
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Notes to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associatedConsolidated Financial Statements (Unaudited)
NOTE 3 - Revenue from Contracts with leases will continue to be recognized in a manner similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Customers
The adoption is required to be applied on a modified retrospective basis for each prior reporting period presented. We have not yet determined the effect that the adoption of this pronouncement may have on our financial position and/or results of operations.
In May 2014, an accounting pronouncement was issued by the FASB to clarify existing guidance on revenue recognition. This guidance includes the required steps to achieve the core principle that a company should recognizeCompany recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expectswe expect to be entitled in exchange for those goods or services. This pronouncementservices by applying the following five step model:
(1) Identify the contract with a customer
A contract with a customer exists when: (a) the parties have approved the contract and are committed to perform their respective obligations, (b) the rights of the parties can be identified, (c) payment terms can be identified, (d) the arrangement has commercial substance, and (e) collectability of consideration is effectiveprobable. Judgment is required when determining if the contractual criteria are met, specifically in the earlier stages of a project when a formally executed contract may not yet exist. In these situations, the Company evaluates all relevant facts and circumstances, including the existence of other forms of documentation or historical experience with our customers that may indicate a contractual agreement is in place and revenue should be recognized. In determining if the collectability of consideration is probable, the Company considers the customer’s ability and intention to pay such consideration through an evaluation of several factors, including an assessment of the creditworthiness of the customer and our prior collection history with such customer.
(2) Identify the performance obligations in the contract
At contract inception, the Company assesses the goods or services promised in a contract and identifies, as a separate performance obligation, each distinct promise to transfer goods or services to the customer. The identified performance obligations represent the “unit of account” for fiscal yearspurposes of determining revenue recognition. In order to properly identify separate performance obligations, the Company applies judgment in determining whether each good or service provided is: (a) capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and interim periods beginning after December 15, 2017,(b) distinct within the context of the contract, whereby the transfer of the good or service to the customer is separately identifiable from other promises in the contract.
In addition, when assessing performance obligations within a contract, the Company considers the warranty provisions included within such contract. To the extent the warranty terms provide the customer with early adoption permitted. an additional service, other than assurance that the promised good or service complies with agreed upon specifications, such warranty is accounted for as a separate performance obligation. In determining whether a warranty provides an additional service, the Company considers each warranty provision in comparison to warranty terms which are standard in the industry.
Our contracts are often modified through change orders to account for changes in the scope and price of the goods or services we are providing. Although the Company evaluates each change order to determine whether such modification creates a separate performance obligation, the majority of our change orders are for goods or services that are not distinct within the context of our original contract and, therefore, are not treated as separate performance obligations.
(3) Determine the transaction price
The guidance permitstransaction price represents the useamount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to our customers. The consideration promised within a contract may include fixed amounts, variable amounts, or both. To the extent the performance obligation includes variable consideration, including contract bonuses and penalties that can either increase or decrease the transaction price, the Company estimates the amount of variable consideration to be included in the transaction price utilizing one of two retrospective transition methods. We anticipate adoptingprescribed methods, depending on which method better predicts the standard on January 1, 2018 usingamount of consideration to which the modified retrospective method. We have substantially completedentity will be entitled. Such methods include: (a) the processexpected value method, whereby the amount of variable consideration to evaluatebe recognized represents the impactsum of probability-weighted amounts in a range of possible consideration amounts, and (b) the new pronouncement on our contracts,most likely amount method, whereby the amount of variable consideration to be recognized represents the single most likely amount in a range of possible consideration amounts. When applying these methods, the Company considers all information that is reasonably available, including identifying potential differences that will result from applyinghistorical, current, and estimates of future performance. The expected value method is typically utilized in situations where a contract contains a large number of possible outcomes while the requirements of the new guidance. Asmost likely amount method is typically utilized in situations where a result of the review of our various types of revenue arrangements, we do not anticipate that the adoption will have a material impact on our financial position and/or results of operations, particularly as it relates to revenues generated from long-term construction, service maintenance, and time and materials contracts. With respect to our shop services operations within our United States industrial services segment, which currently recognize revenue related to the engineering, manufacturing and repair of shell and tube heat exchangers when the product is shipped and all other revenue recognition criteria have been met, the adoption of the new standard will accelerate the timing of revenue recognition for certain contracts for which control is transferred to our customers over time instead of at a point in time. We have also drafted revised accounting policies and have evaluated the enhanced disclosure requirements on our business processes, controls and systems.contract has only two possible outcomes.




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Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 3 - Revenue from Contracts with Customers (Continued)
Variable consideration is included in the transaction price only to the extent it is probable, in the Company’s judgment, that a significant future reversal in the amount of cumulative revenue recognized under the contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. This threshold is referred to as the variable consideration constraint. In assessing whether to apply the variable consideration constraint, the Company considers if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue, including, but not limited to, whether: (a) the amount of consideration is highly susceptible to factors outside of the Company’s influence, such as the actions of third parties, (b) the uncertainty surrounding the amount of consideration is not expected to be resolved for a long period of time, (c) the Company’s experience with similar types of contracts is limited or that experience has limited predictive value, (d) the Company has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances, and (e) the contract has a large number and broad range of possible consideration amounts.
Pending change orders represent one of the most common forms of variable consideration included within contract value and typically represent contract modifications for which a change in scope has been authorized or acknowledged by our customer but the final adjustment to contract price is yet to be negotiated. In estimating the transaction price for pending change orders, the Company considers all relevant facts, including documented correspondence with the customer regarding acknowledgment of and/or agreement with the modification, as well as historical experience with the customer or similar contractual circumstances. Based upon this assessment, the Company estimates the transaction price, including whether the variable consideration constraint should be applied.
Contract claims are another form of variable consideration which is common within our industry. Claim amounts represent revenue that has been recognized for contract modifications that are not submitted or are in dispute as to both scope and price. In estimating the transaction price for claims, the Company considers all relevant facts available. However, given the uncertainty surrounding claims, including the potential long-term nature of dispute resolution and the broad range of possible consideration amounts, there is an increased likelihood that any additional contract revenue associated with contract claims is constrained. The resolution of claims involves negotiations and, in certain cases, litigation. In the event litigation costs are incurred by us in connection with claims, such litigation costs are expensed as incurred, although we may seek to recover these costs.
For some transactions, the receipt of consideration does not match the timing of the transfer of goods or services to the customer. For such contracts, the Company evaluates whether this timing difference represents a financing arrangement within the contract. Although rare, if a contract is determined to contain a significant financing component, the Company adjusts the promised amount of consideration for the effects of the time value of money when determining the transaction price of such contract. Although our customers may retain a portion of the contract price until completion of the project and final contract settlement, these retainage amounts are not considered a significant financing component as the intent of the withheld amounts is to provide the customer with assurance that we will complete our obligations under the contract rather than to provide financing to the customer. In addition, although we may be entitled to advanced payments from our customers on certain contracts, these advanced payments generally do not represent a significant financing component as the payments are used to meet working capital demands that can be higher in the early stages of a contract, as well as to protect us from our customer failing to meet its obligations under the contract.
Changes in the estimates of transaction prices are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. Such changes in estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in prior periods. Such changes in estimates may also result in the reversal of previously recognized revenue if the ultimate outcome differs from the Company’s previous estimate. For the three months ended March 31, 2022 and 2021, there were no significant amounts of revenue recognized during the period related to performance obligations satisfied in prior periods. In addition, for the three months ended March 31, 2022 and 2021, there were no significant reversals of revenue recognized associated with the revision of transaction prices.




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Notes to Consolidated Financial Statements (Unaudited)
NOTE 3 Acquisitions- Revenue from Contracts with Customers (Continued)
(4) Allocate the transaction price to performance obligations in the contract
For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on a relative standalone selling price. The Company determines the standalone selling price based on the price at which the performance obligation would have been sold separately in similar circumstances to similar customers. If the standalone selling price is not observable, the Company estimates the standalone selling price taking into account all available information such as market conditions and internal pricing guidelines. In certain circumstances, the standalone selling price is determined using an expected profit margin on anticipated costs related to the performance obligation.
(5) Recognize revenue as performance obligations are satisfied
The Company recognizes revenue at the time the related performance obligation is satisfied by transferring a promised good or service to its customers. A good or service is considered to be transferred when the customer obtains control. The Company can transfer control of Businesses     a good or service and satisfy its performance obligations either over time or at a point in time. The Company transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over time if one of the following three criteria are met: (a) the customer simultaneously receives and consumes the benefits provided by the Company’s performance as we perform, (b) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (c) the Company’s performance does not create an asset with an alternative use to us, and we have an enforceable right to payment for performance completed to date.
On January 4, 2017For our performance obligations satisfied over time, we recognize revenue by measuring the progress toward complete satisfaction of that performance obligation. The selection of the method to measure progress towards completion can be either an input method or an output method and March 1, 2017,requires judgment based on the nature of the goods or services to be provided.
For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we acquired two companiesbelieve it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For our unit price construction contracts, progress towards complete satisfaction is measured through an output method, such as the number of units produced or delivered, when our performance does not produce significant amounts of work in process or finished goods prior to complete satisfaction of such performance obligations.
For our services contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly and the customer receives and consumes the benefits of our performance throughout the contract term.
The timing of revenue recognition for the manufacturing of new build heat exchangers within our United States industrial services segment depends on the payment terms of the contract, as our performance does not create an asset with an alternative use to us. For those contracts for which we have a right to payment for performance completed to date at all times throughout our performance, inclusive of a cancellation, we recognize revenue over time. For these performance obligations, we use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. However, for those contracts for which we do not have a right, at all times, to payment for performance completed to date, we recognize revenue at the point in time when control is transferred to the customer. For bill-and-hold arrangements, revenue is recognized when the customer obtains control of the heat exchanger, which may be prior to shipping if certain recognition criteria are met.
For certain of our revenue streams, such as call-out repair and service work, outage services, refinery turnarounds, and specialty welding services that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date.


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Notes to Consolidated Financial Statements (Unaudited)
NOTE 3 - Revenue from Contracts with Customers (Continued)
Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a total consideration of $84.8 million. One company provides fire protection and alarm services primarilyperformance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the Southern regionperiod in which the loss becomes evident. Based on an evaluation of individual projects that had revisions to total estimated costs, which resulted in a reduction of profitability in excess of $1.0 million, our operating results were negatively impacted by approximately $10.0 million, during the three months ended March 31, 2022. Of this amount, approximately $4.6 million was recorded within our United States electrical construction and its results have been included infacilities services segment and approximately $5.4 million was recorded within our United States mechanical construction and facilities services segment. There were no changes in total estimated costs that had a significant impact on our operating results during the three months ended March 31, 2021.
Disaggregation of Revenues
Our revenues are principally derived from contracts to provide construction services relating to electrical and mechanical systems, as well as to provide a number of building services and industrial services to our customers. Our contracts are with many different customers in numerous industries. Refer to Note 14 - Segment Information of the notes to consolidated financial statements for additional information on how we disaggregate our revenues by reportable segment.
The following tables provide further disaggregation of our revenues, by categories we use to evaluate our financial performance within each of our reportable segments, for the three months ended March 31, 2022 and 2021 (in thousands):
For the three months ended March 31,
2022% of
Total		2021% of
Total
United States electrical construction and facilities services:
Commercial market sector$270,315 52 %$245,841 53 %
Manufacturing market sector66,465 13 %48,454 11 %
Healthcare market sector32,070 6 %20,151 4 %
Institutional market sector31,766 6 %43,639 9 %
Transportation market sector45,082 8 %42,031 9 %
Water and wastewater market sector5,312 1 %3,651 1 %
Hospitality market sector2,623 1 %4,664 1 %
Short duration projects (1)
56,048 11 %44,409 10 %
Service work13,329 2 %7,765 2 %
523,010 460,605 
Less intersegment revenues(980)(1,210)
Total segment revenues$522,030 $459,395 
________
(1)Represents those projects which generally are completed within three months or less.














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Notes to Consolidated Financial Statements (Unaudited)
NOTE 3 - Revenue from Contracts with Customers (Continued)
For the three months ended March 31,
2022% of
Total		2021% of
Total
United States mechanical construction and facilities services:
Commercial market sector$379,604 38 %$366,477 40 %
Manufacturing market sector149,571 15 %121,686 13 %
Healthcare market sector120,051 12 %112,656 12 %
Institutional market sector70,627 7 %69,304 8 %
Transportation market sector16,053 2 %18,417 2 %
Water and wastewater market sector61,744 6 %43,848 5 %
Hospitality market sector8,079 1 %8,529 1 %
Short duration projects (1)
62,294 6 %86,765 9 %
Service work134,715 13 %88,490 10 %
1,002,738 916,172 
Less intersegment revenues(2,268)(1,671)
Total segment revenues$1,000,470 $914,501 
________
(1)Represents those projects which generally are completed within three months or less.
For the three months ended March 31,
2022% of
Total		2021% of
Total
United States building services:
Mobile mechanical services$373,571 60 %$351,317 62 %
Commercial site-based services203,550 32 %175,647 31 %
Government site-based services50,680 8 %41,072 7 %
Total segment revenues$627,801 $568,036 
For the three months ended March 31,
2022% of
Total		2021% of
Total
United States industrial services:
Field services$271,418 87 %$207,554 88 %
Shop services39,333 13 %27,828 12 %
Total segment revenues$310,751 $235,382 
Total United States operations$2,461,052 $2,177,314 
For the three months ended March 31,
2022% of
Total		2021% of
Total
United Kingdom building services:
Service work$64,817 49 %$61,991 49 %
Project work66,680 51 %64,744 51 %
Total segment revenues$131,497 $126,735 
Total operations$2,592,549 $2,304,049 

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Notes to Consolidated Financial Statements (Unaudited)
NOTE 3 - Revenue from Contracts with Customers (Continued)

Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recognized in the period we deliver goods and services to our customers or when our right to consideration is unconditional. The Company maintains an allowance for credit losses to reduce outstanding receivables to their net realizable value. A considerable amount of judgment is required when determining expected credit losses. Estimates of such losses are recorded when we believe a customer, or group of customers, may not be able to meet their financial obligations due to deterioration in financial condition or credit rating. Factors relevant to our assessment include our prior collection history with our customers, the related aging of past due balances, projections of credit losses based on historical trends in credit quality indicators or past events, and forecasts of future economic conditions. In addition to monitoring delinquent accounts, management reviews the credit quality of its receivables by, among other company provides mobile mechanicalthings, obtaining credit ratings of significant customers, assessing economic and market conditions, and evaluating material changes to a customer’s business, cash flows, and financial condition.
At March 31, 2022 and December 31, 2021, our allowance for credit losses was $23.0 million and $23.5 million, respectively. The decrease in our allowance for credit losses was predominantly attributable to the write-off of specific amounts deemed unrecoverable. Allowances for credit losses are based on the best facts available and are reassessed and adjusted on a regular basis as additional information is received. Should anticipated collections fail to materialize, or if future economic conditions compare unfavorably to our forecasts, we could experience an increase in our credit losses.
The change in the allowance for credit losses for the three months ended March 31, 2022 was as follows (in thousands):
Balance at December 31, 2021$23,534 
Provision for credit losses15 
Amounts written off against the allowance, net of recoveries(593)
Balance at March 31, 2022$22,956 
Contract Assets and Contract Liabilities
The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts are not yet billable under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. In addition, many of our time and materials arrangements, as well as our contracts to perform turnaround services within the Western regionUnited States industrial services segment, are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded as revenue is recognized in advance of billings.
Also included in contract assets are amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders or modifications in dispute or unapproved as to scope and/or price, or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the Consolidated Balance Sheets.
Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the United States,related performance obligation and its resultsare recorded as either current or long-term, depending upon when we expect to recognize such revenue. The long-term portion of contract liabilities is included in “Other long-term obligations” in the Consolidated Balance Sheets.




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Notes to Consolidated Financial Statements (Unaudited)
NOTE 3 - Revenue from Contracts with Customers (Continued)
Net contract liabilities in the accompanying Consolidated Balance Sheets consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):
March 31,
2022		December 31, 2021
Contract assets, current$262,119 $230,143 
Contract assets, non-current— — 
Contract liabilities, current(827,708)(788,134)
Contract liabilities, non-current(1,663)(2,505)
Net contract liabilities$(567,252)$(560,496)
The $6.8 million increase in net contract liabilities for the three months ended March 31, 2022 was primarily attributable to an increase in net contract liabilities on our uncompleted construction projects, partially as a result of the timing of invoicing to our customers. There was no significant impairment of contract assets recognized during the periods presented.
Transaction Price Allocated to Remaining Unsatisfied Performance Obligations
The following table presents the transaction price allocated to remaining unsatisfied performance obligations (“remaining performance obligations”) for each of our reportable segments and their respective percentages of total remaining performance obligations as of March 31, 2022 (in thousands, except for percentages):
March 31,
2022		% of Total
Remaining performance obligations:
United States electrical construction and facilities services$1,297,086 22 %
United States mechanical construction and facilities services3,384,089 57 %
United States building services995,003 16 %
United States industrial services116,496 2 %
Total United States operations5,792,674 97 %
United Kingdom building services160,207 3 %
Total operations$5,952,881 100 %
Our remaining performance obligations at March 31, 2022 were $5.95 billion. Remaining performance obligations increase with awards of new contracts and decrease as we perform work and recognize revenue on existing contracts. We include a project within our remaining performance obligations at such time the project is awarded and agreement on contract terms has been reached. Our remaining performance obligations include amounts related to contracts for which a fixed price contract value is not assigned when a reasonable estimate of the total transaction price can be made.
Remaining performance obligations include unrecognized revenues to be realized from uncompleted construction contracts. Although many of our construction contracts are subject to cancellation at the election of our customers, in accordance with industry practice, we do not limit the amount of unrecognized revenue included within remaining performance obligations for these contracts as the risk of cancellation is very low due to the inherent substantial economic penalty that our customers would incur upon cancellation or termination. We believe our reported remaining performance obligations for our construction contracts are firm and contract cancellations have not had a material adverse effect on us.
Remaining performance obligations also include unrecognized revenues expected to be realized over the remaining term of service contracts. However, to the extent a service contract includes a cancellation clause which allows for the termination of such contract by either party without a substantive penalty, the remaining contract term, and therefore, the amount of unrecognized revenues included within remaining performance obligations, is limited to the notice period required for the termination.

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Notes to Consolidated Financial Statements (Unaudited)
NOTE 3 - Revenue from Contracts with Customers (Continued)
Our remaining performance obligations are 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, (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 the variable consideration constraint does not apply, and (e) other forms of variable consideration to the extent that such variable consideration has been included inwithin the transaction price of our United States building services segment. In connection with these acquisitions, we acquired working capital of $9.6 millioncontracts. Such claim and other net assetsvariable consideration amounts were immaterial for all periods presented.
Refer to the table below for additional information regarding our remaining performance obligations, including an estimate of $0.3 million and have preliminarily ascribed $28.7 millionwhen we expect to goodwill and $46.2 million to identifiable intangible assets. We expect that allrecognize such remaining performance obligations as revenue (in thousands):
Within one yearGreater than one year
Remaining performance obligations:
United States electrical construction and facilities services$1,150,600 $146,486 
United States mechanical construction and facilities services2,737,236 646,853 
United States building services892,868 102,135 
United States industrial services116,496 — 
Total United States operations4,897,200 895,474 
United Kingdom building services135,870 24,337 
Total operations$5,033,070 $919,811 
NOTE 4 - Acquisitions of the acquired goodwill will be deductible for tax purposes.Businesses
The purchase price allocations for the businesses acquired in 2017Acquisitions are still preliminary and subject to change during their respective measurement periods. The acquisition of these businesses was accounted for byutilizing the acquisition method of accounting and the prices paid for them have beenare allocated to their respective assets and liabilities based upon the estimated fair value of theirsuch assets and liabilities at the dates of their respective acquisitionsacquisition by us.
On April 15, 2016,During the first quarter of 2022, we completedacquired a company for an immaterial amount. This company provides fire protection services in the acquisitionNortheastern region of Ardent Services, L.L.C.the United States.
During calendar year 2021, we acquired 8 companies for total consideration of $131.2 million. Such acquisitions include: (a) two companies, the results of operations of which have been included within our United States mechanical construction and Rabalais Constructors, LLC (collectively, “Ardent”). This acquisition hasfacilities services segment, consisting of: (i) a company that provides mechanical services within the Southern region of the United States and (ii) a company that provides fire protection services in the Midwestern region of the United States, (b) two companies that provide electrical construction services for a broad array of customers in the Midwestern region of the United States, the results of operations of which have been included in our United States electrical construction and facilities services segment. Ardentsegment, and (c) four companies, the results of operations of which have been included within our United States building services segment, consisting of: (i) a company that provides electricalmobile mechanical services across North Texas and instrumentation(ii) three companies that bolster our presence in geographies where we have existing operations and provide either mobile mechanical services to the energy infrastructure market in North America,or building automation and this acquisition further strengthens our position in electrical construction and services and broadens our capabilities across the industrial and energy sectors, especially in the Gulf Coast, Midwest and Western regions of the United States. Under the terms of the transaction, we acquired 100% of Ardent’s equity interests for total consideration of $201.4 million.controls solutions. In connection with the acquisition of Ardent,these acquisitions, we acquired working capital of $34.1$22.9 million and other net assetsliabilities of $3.9$0.6 million, including certain deferred tax liabilities, and have preliminarily ascribed $121.9$38.3 million to goodwill and $41.5$70.6 million to identifiable intangible assets.
We expect that $99.7 millionthe majority of the goodwill acquired goodwillin connection with these acquisitions will be deductible for tax purposes. The weighted average amortization periodpurchase price allocations for the identifiable intangible assets is approximately 13.5 years. We completedbusiness acquired in 2022 and one of the final allocation of Ardent’sbusinesses acquired in 2021 are preliminary and subject to change during their respective measurement periods. As we finalize such purchase price allocations, adjustments may be recorded relating to finalization of intangible asset valuations, tax matters, or other items. Although not expected to be significant, such adjustments may result in changes in the valuation of assets and liabilities acquired. The purchase price allocations for the other businesses acquired in 2021 have been finalized during the first quarter of 2017their respective measurement periods with an insignificant impact.
On April 1, 2016, we acquired a company for an immaterial amount. This company provides mobile mechanical services within the Southeastern region of the United States, and its results have been included in our United States building services segment. The purchase price for this acquisition was finalized in 2016.
NOTE 4 Disposition of Assets    
Due to a historical pattern of losses in the construction operations of our United Kingdom segment and our negative assessment of construction market conditions in the United Kingdom for the foreseeable future, we ceased construction operations in the United Kingdom during the third quarter of 2014. The results of the construction operations of our United Kingdom segment for all periods are presented in the Condensed Consolidated Financial Statements as discontinued operations.
The results of discontinued operations are as follows (in thousands):
14
 For the three months ended September 30, For the nine months ended September 30,
 2017 2016 2017 2016
Revenues$(81) $40
 $863
 $108
Loss from discontinued operation, net of income taxes$(207) $(406) $(729) $(1,584)
Diluted loss per share from discontinued operation$(0.00) $(0.01) $(0.01) $(0.03)
The loss from discontinued operations for the three and nine months ended September 30, 2017 was primarily due to legal costs related to the settlement of final contract balances on certain construction projects completed in prior years, partially offset by revenues recognized in the second quarter of 2017 upon the settlement of a previously outstanding contract claim.







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Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 4 Disposition of Assets - (Continued)


Included in the Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016 are the following major classes of assets and liabilities associated with the discontinued operation (in thousands):
 September 30,
2017		 December 31,
2016
Assets of discontinued operation:   
Current assets$360
 $1,233
    
Liabilities of discontinued operation:   
Current liabilities$3,511
 $4,036
At September 30, 2017, the assets and liabilities of the discontinued operation consisted of accounts receivable, contract retentions and contract warranty obligations that are expected to be collected or fulfilled in the ordinary course of business. Additionally at September 30, 2017, there remained less than $0.1 million of obligations related to employee severance, which are expected to be paid in 2018. The settlement of the remaining assets and liabilities may result in additional income and/or expenses. Such income and/or expenses are expected to be immaterial and will be reflected as discontinued operations as incurred.
NOTE 5 - Earnings Per Share
Calculation of Basic and Diluted Earnings (Loss) per Common Share
The following tables summarizetable summarizes our calculation of Basic and Diluted Earnings (Loss) per Common Share (“EPS”) for the three and nine months ended September 30, 2017March 31, 2022 and 20162021 (in thousands, except share and per share data):
 For the three months ended September 30,
 2017 2016
Numerator:   
Income from continuing operations attributable to EMCOR Group, Inc. common stockholders$64,804
 $51,937
Loss from discontinued operation, net of income taxes(207) (406)
Net income attributable to EMCOR Group, Inc. common stockholders$64,597
 $51,531
Denominator:   
Weighted average shares outstanding used to compute basic earnings (loss) per common share59,061,768
 60,889,484
Effect of dilutive securities—Share-based awards357,432
 428,573
Shares used to compute diluted earnings (loss) per common share59,419,200
 61,318,057
Basic earnings (loss) per common share:   
From continuing operations attributable to EMCOR Group, Inc. common stockholders$1.10
 $0.85
From discontinued operation(0.00) (0.01)
Net income attributable to EMCOR Group, Inc. common stockholders$1.10
 $0.84
Diluted earnings (loss) per common share:   
From continuing operations attributable to EMCOR Group, Inc. common stockholders$1.09
 $0.85
From discontinued operation(0.00) (0.01)
Net income attributable to EMCOR Group, Inc. common stockholders$1.09
 $0.84
For the three months ended
March 31,
 20222021
Numerator:
Net income attributable to EMCOR Group, Inc. common stockholders$73,386 $84,774 
Denominator:
Weighted average shares outstanding used to compute basic earnings per common share52,713,005 54,896,548 
Effect of dilutive securities—Share-based awards203,554 238,756 
Shares used to compute diluted earnings per common share52,916,559 55,135,304 
Basic earnings per common share$1.39 $1.54 
Diluted earnings per common share$1.39 $1.54 



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Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 5 Earnings Per Share - (Continued)


 For the nine months ended September 30,
 2017 2016
Numerator:   
Income from continuing operations attributable to EMCOR Group, Inc. common stockholders$174,724
 $142,843
Loss from discontinued operation, net of income taxes(729) (1,584)
Net income attributable to EMCOR Group, Inc. common stockholders$173,995
 $141,259
Denominator:   
Weighted average shares outstanding used to compute basic earnings (loss) per common share59,371,672
 60,866,532
Effect of dilutive securities—Share-based awards349,513
 423,856
Shares used to compute diluted earnings (loss) per common share59,721,185
 61,290,388
Basic earnings (loss) per common share:   
From continuing operations attributable to EMCOR Group, Inc. common stockholders$2.94
 $2.35
From discontinued operation(0.01) (0.03)
Net income attributable to EMCOR Group, Inc. common stockholders$2.93
 $2.32
Diluted earnings (loss) per common share:   
From continuing operations attributable to EMCOR Group, Inc. common stockholders$2.93
 $2.33
From discontinued operation(0.01) (0.03)
Net income attributable to EMCOR Group, Inc. common stockholders$2.92
 $2.30

There were 500 anti-dilutive share-based awards excluded from the computation of diluted EPS for the three and nine months ended September 30, 2017.March 31, 2022 because they would be anti-dilutive were 62,481. There were no anti-dilutive share-based awards outstanding for the three and nine months ended September 30, 2016.March 31, 2021.
NOTE 6 - Inventories
Inventories in the accompanying Condensed Consolidated Balance Sheets consisted of the following amounts as of March 31, 2022 and December 31, 2021 (in thousands):
March 31,
2022		December 31,
2021
Raw materials and construction materials$60,339 $46,186 
Work in process11,124 7,912 
Inventories$71,463 $54,098 
15
 September 30,
2017		 December 31,
2016
Raw materials and construction materials$25,709
 $21,997
Work in process17,944
 15,429
Inventories$43,653
 $37,426


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EMCOR Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 7 - Debt            
Debt in the accompanying Condensed Consolidated Balance Sheets consisted of the following amounts as of March 31, 2022 and December 31, 2021 (in thousands):
March 31,
2022		December 31,
2021
Term loan$256,688 $256,688 
Unamortized debt issuance costs(2,800)(3,040)
Finance lease liabilities7,545 8,037 
Total debt261,433 261,685 
Less: current maturities16,017 16,235 
Total long-term debt$245,416 $245,450 
 September 30,
2017		 December 31,
2016
Revolving credit facility$125,000
 $125,000
Term loan288,608
 300,000
Unamortized debt issuance costs(4,548) (5,437)
Capitalized lease obligations4,788
 3,732
Other22
 31
Total debt413,870
 423,326
Less: current maturities15,364
 15,030
Total long-term debt$398,506
 $408,296
Credit Agreement
Until August 3, 2016, we hadWe have a credit agreement dated as of November 25, 2013 (as amended, the “2013 Credit Agreement”),March 2, 2020, which providedprovides for a $1.3 billion revolving credit facility of $750.0 million (the “2013“2020 Revolving Credit Facility”) and a term loan of $350.0 million (the “2013 Term Loan”). On August 3, 2016, we amended and restated the 2013 Credit Agreement to provide for a $900.0 million revolving credit facility (the “2016 Revolving Credit Facility”) and a $400.0$300.0 million term loan (the “2016“2020 Term Loan”) (collectively referred to as the “2016“2020 Credit Agreement”) expiring August 3, 2021. The proceeds of the 2016 Term Loan were used to repay amounts drawn under the 2013 Term Loan, as well as a portion of the outstanding balance under the 2013 Revolving Credit Facility.March 2, 2025. We may increase the 20162020 Revolving Credit Facility to $1.3$1.9 billion if additional lenders are identified and/or existing lenders are willing to increase their current commitments. We may allocate up to $300.0$400.0 million of available capacity under the 20162020 Revolving Credit Facility to letters of credit for our account or for the account of any of our subsidiaries. Obligations
At the Company’s election, borrowings under the 2016 Credit Agreement are guaranteed by most of our direct and indirect subsidiaries and are secured by substantially all of our assets. The 2016 Credit Agreement contains 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. We were in compliance with all such covenants as of September 30, 2017 and December 31, 2016. A commitment fee is payable on the average daily unused amount of the 2016 Revolving Credit Facility, which ranges from 0.15% to 0.30%, based on certain financial tests. The fee was 0.15% of the unused amount as of September 30, 2017. Borrowings under the 20162020 Credit Agreement bear interest at either: (1) a base rate plus a margin of 0.00% to 0.75%, based on certain financial tests, or (2) United States dollar LIBOR (1.24%(0.46% at September 30, 2017)March 31, 2022) plus 1.00% to 1.75%, based on certain financial tests. The base rate is determined by the greater ofof: (a) the prime commercial lending rate announced by Bank of Montreal from time to time (4.25%(3.50% at September 30, 2017)March 31, 2022), (b) the federal funds effective rate, plus ½ of 1.00%, (c) the daily one month LIBOR rate, plus 1.00%, or (d) 0.00%. In the event of the discontinuation of LIBOR, our 2020 Credit Agreement contains provisions which allow for the use of alternate benchmark rates. The interest rate in effect at September 30, 2017March 31, 2022 was 2.24%1.46%. A commitment fee is payable on the average daily unused amount of the 2020 Revolving Credit Facility, which ranges from 0.10% to 0.25%, based on certain financial tests. The fee was 0.10% of the unused amount as of March 31, 2022. Fees for letters of credit issued under the 20162020 Revolving Credit Facility range from 1.00%0.75% to 1.75% of the respective face amounts of outstanding letters of credit, depending on the nature of the letter of credit, and are computed based on certain financial tests.
As of March 31, 2022 and December 31, 2021, the balance of the 2020 Term Loan was $256.7 million. As of March 31, 2022 and December 31, 2021, there were no direct borrowings outstanding under the 2020 Revolving Credit Facility; however, we had $71.3 million of letters of credit outstanding, which reduce the available capacity under such facility. We capitalized an additional $3.0$3.1 million of debt issuance costs associated with the 20162020 Credit Agreement. Debt issuance costs are amortized over the life of the agreement and are included as part of interest expense.
Obligations under the 2020 Credit Agreement are guaranteed by most of our direct and indirect subsidiaries and are secured by substantially all of our assets. The 2016 Term Loan2020 Credit Agreement contains various covenants providing for, among other things, the maintenance of certain financial ratios and certain limitations on the payment of dividends, common stock repurchases, investments, acquisitions, indebtedness, and capital expenditures. We were in compliance with all such covenants as of March 31, 2022 and December 31, 2021.
We are required us to make annual principal payments of $5.0 million on the last day of March, June, September and December of each year, which commenced with the calendar quarter ended December 31, 2016. On December 30, 2016, we made a payment of $100.0 million, of which $5.0 million represented our required quarterly payment and $95.0 million represented a prepayment of outstanding principal. Such prepayment was2020 Term Loan. Any voluntary prepayments are applied against the remaining mandatory quarterlyoutstanding balance of the loan and reduce our future scheduled payments on a ratable basis. As a result, commencingBased on our outstanding balance, principal payments of $13.9 million are due on December 31 of each year until maturity, with the calendar quarter ended March 31, 2017, our required quarterly payment has been reduced to $3.8 million. Allany remaining unpaid principal and interest is due on August 3, 2021. As of September 30, 2017 and December 31, 2016, the balance of the 2016 Term Loan was $288.6 million and $300.0 million, respectively. As of September 30, 2017 and December 31, 2016, we had approximately $111.8 million and $91.9 million of letters of credit outstanding, respectively. There were $125.0 million in borrowings outstanding under the 2016 Revolving Credit Facility as of September 30, 2017 and December 31, 2016.March 2, 2025.






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Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 8 - Fair Value Measurements        
We useFor disclosure purposes, we utilize a fair value hierarchy that prioritizesto categorize qualifying assets and liabilities into three broad levels based on the priority of the inputs to valuation techniques used to measuredetermine their fair value.values. The hierarchy, which gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs, is comprised of the following three levels:
Level 1 – Unadjusted quoted market prices in active markets for identical assets and liabilities.
Level 2 – Observable inputs, other than Level 1 inputs. Level 2 inputs, would typically includethat are directly or indirectly observable for the asset or liability, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active or financial instruments for which all significantactive; and model-derived valuations whose inputs are observable either directly or indirectly.whose significant value drivers are observable.
Level 3 – Prices or valuations that requireUnobservable inputs that are both significant toreflect the measurement and unobservable.reporting entity’s own assumptions.
Recurring Fair Value Measurements
The following tables providesummarize the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2017March 31, 2022 and December 31, 20162021 (in thousands):
 Assets at Fair Value as of March 31, 2022
Asset CategoryLevel 1Level 2Level 3Total
Cash and cash equivalents (1)
$514,513 $— $— $514,513 
Restricted cash (2)
1,356 — — 1,356 
Deferred compensation plan assets (3)
44,257 — — 44,257 
Total$560,126 $— $— $560,126 
Assets at Fair Value as of September 30, 2017 Assets at Fair Value as of December 31, 2021
Asset CategoryLevel 1 Level 2 Level 3 TotalAsset CategoryLevel 1Level 2Level 3Total
Cash and cash equivalents (1)
$480,496
 $—
 $—
 $480,496
Cash and cash equivalents (1)
$821,345 $— $— $821,345 
Restricted cash (2)
2,082
 —
 —
 2,082
Restricted cash (2)
1,223 — — 1,223 
Deferred compensation plan assets (3)
20,372
 —
 —
 20,372
Deferred compensation plan assets (3)
42,344 — — 42,344 
Total$502,950
 $—
 $—
 $502,950
Total$864,912 $— $— $864,912 
________
 Assets at Fair Value as of December 31, 2016
Asset CategoryLevel 1 Level 2 Level 3 Total
Cash and cash equivalents (1)
$464,617
 $—
 $—
 $464,617
Restricted cash (2)
2,043
 —
 —
 2,043
Deferred compensation plan assets (3)
12,153
 —
 —
 12,153
Total$478,813
 $—
 $—
 $478,813
(1)Cash and cash equivalents consist of deposit accounts and money market funds with original maturity dates of three months or less, which are Level 1 assets. At March 31, 2022 and December 31, 2021, we had $194.6 million and $336.0 million, respectively, in money market funds.
________(2)Restricted cash is classified as “Prepaid expenses and other” in the Consolidated Balance Sheets. Restricted cash primarily represents cash held in account for use on customer contracts.
(1)
Cash and cash equivalents include money market funds with original maturity dates of three months or less, which are Level 1 assets. At September 30, 2017 and December 31, 2016, we had $187.0 million and $154.6 million, respectively, in money market funds.
(2)Restricted cash is classified as “Prepaid expenses and other” in the Condensed Consolidated Balance Sheets.
(3)Deferred compensation plan assets are classified as “Other assets” in the Condensed Consolidated Balance Sheets.
(3)Deferred compensation plan assets are classified as “Other assets” in the Consolidated Balance Sheets.
Nonrecurring Fair Value Measurements
We have recorded goodwill and identifiable intangible assets in connection with our business acquisitions. Such assets are measured at fair value at the time of acquisition based on valuation techniques that appropriately represent the methods which would be used by other market participants in determining fair value. In addition, goodwill and intangible assets are tested for impairment using similar valuation methodologies to determine the fair value of such assets. Periodically, we engage an independent third-party valuation specialist to assist with the valuation process, including the selection of appropriate methodologies and the development of market-based assumptions. The inputs used for these nonrecurring fair value measurements represent Level 3 inputs.
Fair Value of Financial Instruments
We believe that the carrying values of our financial instruments, which include accounts receivable and other financing commitments, approximate their fair values due primarily to their short-term maturities and low risk of counterparty default. The carrying value of our debt associated with the 20162020 Credit Agreement approximates its fair value due to the variable rate on such debt.
NOTE 9 Income Taxes    
For the three months ended September 30, 2017 and 2016, our income tax provision from continuing operations was $38.6 million and $30.8 million, respectively, based on an effective income tax rate, before discrete items and less amounts attributable to noncontrolling interests, of 37.1% and 38.1%, respectively. The actual income tax rate on income from continuing operations, less amounts attributable to noncontrolling interests, for the three months ended September 30, 2017 and 2016, inclusive of discrete items, was 37.3% and 37.2%, respectively. For the nine months ended September 30, 2017 and 2016, our income tax provision from continuing operations was $98.5 million and $82.7 million, respectively, based on effective income tax rates, before discrete items and less amounts attributable to noncontrolling interests, of 37.4% and 37.8%, respectively. The actual income tax rates on income from continuing operations, less amounts attributable to noncontrolling interests, for the nine months ended September 30, 2017 and 2016, inclusive of discrete items, were 36.0% and 36.7%, respectively. The increase in the 2017 income tax provision was primarily due to increased income from continuing operations. The decrease in the 2017 actual income tax rate on income from continuing operations was due to the net impact of discrete items, inclusive of the reversal of reserves for previously unrecognized income tax benefits in the first quarter of 2017.



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Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 9 - Income Taxes - (Continued)

As of September 30, 2017 and December 31, 2016, the amount of unrecognizedThe following table presents our income tax benefits was $1.9 millionprovision and $4.0 million (of which $0.7 million and $2.2 million, if recognized, would favorably affect our effective income tax rate), respectively.rate for the three months ended March 31, 2022 and 2021 (in thousands, except percentages):
We report interest expense and/or income related to unrecognized
 For the three months ended
March 31,
 20222021
Income tax provision$26,451 $31,604 
Income tax rate26.5 %27.2 %
The difference between the U.S. statutory tax rate of 21% and our income tax benefitsrate for both the three months ended March 31, 2022 and 2021 was primarily a result of state and local income taxes and other permanent book to tax differences. The decrease in our income tax provision for the three months ended March 31, 2022 was a result of a reduction in taxable income as well as a decrease in our income tax rate during the period. The decrease in our income tax rate for the three months ended March 31, 2022 was attributable to: (a) a reduction in certain permanent book to tax differences, (b) the favorable impact of certain discrete tax items during the first quarter of 2022, including an increase in the income tax provision. benefit recognized upon the issuance of common stock under our share-based compensation programs, and (c) a reduction in our state income tax rate due to a change in the allocation of earnings among the jurisdictions in which our income is taxed.
As of September 30, 2017March 31, 2022 and December 31, 2016,2021, we had approximately $0.2 million and $0.5 million, respectively, of accrued interest expense related tono unrecognized income tax benefits included asbenefits.
We file a liability in the Condensed Consolidated Balance Sheets. For the three months ended September 30, 2017 and 2016, less than $0.1 million of interest expense and less than $0.1 million of interest income, respectively, was recognized in theconsolidated federal income tax provision. Forreturn including all of our U.S. subsidiaries with the nine months ended September 30, 2017 and 2016, $0.3 million and less than $0.1 million of interest income, respectively, was recognized in the income tax provision.
Internal Revenue Service. We do not anticipate any significant changes to our reserves for uncertain tax positions in the next twelve months.
Weadditionally file income tax returns with the Internal Revenue Service and various state, local, and foreign tax agencies. The Company is currently under examinationOur income tax returns are subject to audit by various taxing authorities and are currently under examination for the years 20122017 through 2015. During the first quarter of 2017, the Company settled an examination with a taxing authority which resulted in the recognition of $3.3 million of income tax benefits upon the reversal of reserves for previously uncertain tax positions.2018.
NOTE 10 - Common Stock        
As of September 30, 2017March 31, 2022 and December 31, 2016,2021, there were 58,806,50951,829,923 and 59,946,98453,299,738 shares of our common stock outstanding, respectively.
During the three months ended September 30, 2017March 31, 2022 and 2016,2021, we issued 19,67995,331 and 47,05091,243 shares of common stock, respectively, primarily upon: (a)respectively. These shares were issued upon either the satisfaction of required conditions under our share-based compensation plans or the purchase of common stock pursuant to our employee stock purchase plan and (b) the satisfactionplan.
We have paid quarterly dividends since October 25, 2011. We currently pay a regular quarterly dividend of required conditions under certain of our share-based compensation plans. During the nine months ended$0.13 per share.
In September 30, 2017 and 2016, we issued 213,060 and 353,116 shares of common stock, respectively, primarily upon: (a) the satisfaction of required conditions under certain of our share-based compensation plans, (b) the purchase of common stock pursuant to our employee stock purchase plan and (c) the exercise of stock options.
On September 26, 2011, our Board of Directors (the “Board”) authorized a share repurchase program allowing us to begin repurchasing shares of our outstanding common stock. Subsequently, the Board has from time to time increased the amount authorized for repurchases under such program. Since the inception of the repurchase program, the Board has authorized us to repurchase up to $100.0 million$1.45 billion of our outstanding common stock. On December 5, 2013, October 23, 2014 and October 28, 2015,During the three months ended March 31, 2022, we repurchased approximately 1.6 million shares of our Boardcommon stock for approximately $181.8 million. Since the inception of Directorsthe repurchase program through March 31, 2022, we have repurchased approximately 20.7 million shares of our common stock for approximately $1.28 billion. As of March 31, 2022, there remained authorization for us to repurchase approximately $168.6 million of our shares. Subsequent to March 31, 2022, the Board authorized us to repurchase up to an additional $100.0 million, $250.0 million and $200.0 million of our outstanding common stock, respectively. During 2017, we have repurchased approximately 1.4 million shares of our common stock for approximately $88.6 million. Since the inception of the repurchase programs through September 30, 2017, we have repurchased approximately 12.8 million shares of our common stock for approximately $573.0 million. As of September 30, 2017, there remained authorization for us to repurchase approximately $77.0 million of our shares. Subsequent to September 30, 2017, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our outstanding common stock. The repurchase programs haveprogram has no expiration date, and dodoes not obligate the Company to acquire any particular amount of common stock, and may be suspended, recommenced, or discontinued at any time or from time to time without prior notice. We may repurchase our shares from time to time to the extent permitted by securities laws and other legal requirements, including provisions in our 20162020 Credit Agreement placing limitations on such repurchases. The repurchase programs haveprogram has been and will be funded from our operations.
NOTE 11 - Retirement Plans
The funded status of our defined benefit plans, which represents the difference between the fair value of plan assets and the projected benefit obligations, is recognized in the Consolidated Balance Sheets with a corresponding adjustment to accumulated other comprehensive income (loss). Gains and losses for the differences between actuarial assumptions and actual results are recognized through accumulated other comprehensive income (loss). These amounts will be subsequently recognized as net periodic pension cost (income) within the Consolidated Statements of Operations.


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Notes to Consolidated Financial Statements (Unaudited)
NOTE 11 - Retirement Plans (Continued)
Our United Kingdom subsidiary has a defined benefit pension plan covering all eligible employees (the “UK Plan”); however, no individual joining the company after October 31, 2001 may participate in the UK Plan. On May 31, 2010, we curtailed the future accrual of benefits for active employees under such plan.






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NotesWe also sponsor 3 domestic retirement plans in which participation by new individuals is frozen. Amounts related to Condensed Consolidated Financial Statements (Unaudited)

NOTE 11 Retirement Plans - (Continued)

these domestic retirement plans were immaterial for all periods presented.
Components of Net Periodic Pension Cost
The components of net periodic pension cost (income) of the UK Plan for the three and nine months ended September 30, 2017March 31, 2022 and 20162021 were as follows (in thousands):
For the three months ended September 30, For the nine months ended September 30, For the three months ended
March 31,
2017 2016 2017 2016 20222021
Interest cost$2,162
 $2,465
 $6,331
 $7,846
Interest cost$1,529 $1,336 
Expected return on plan assets(3,388) (3,398) (9,919) (10,816)Expected return on plan assets(3,244)(3,192)
Amortization of unrecognized loss738
 489
 2,160
 1,556
Amortization of unrecognized loss556 913 
Net periodic pension cost (income)$(488) $(444) $(1,428) $(1,414)Net periodic pension cost (income)$(1,159)$(943)
Employer Contributions
For the ninethree months ended September 30, 2017,March 31, 2022, our United Kingdom subsidiary contributed approximately $3.5$1.2 million to the UK Plan and anticipates contributing an additional $1.3$3.2 million during the remainder of 2017.2022.
NOTE 12 - Commitments and Contingencies
Severance Agreements
We have agreements with our executive officers and certain other key management personnel providing for severance benefits for such employees upon termination of their employment under certain circumstances.
Guarantees
In the ordinary course of business, we, at times, guarantee obligations of our subsidiaries under certain contracts. Generally, we are liable under such an arrangement only if our subsidiary fails to perform its obligations under the contract. Historically, we have not incurred any substantial liabilities as a consequence of these guarantees.
Surety Bonds
The terms of our construction contracts frequently require that we obtain from surety companies, and provide to our customers, surety bonds as a condition to the award of such contracts. These surety bonds are issued in return for premiums, which vary depending on the size and type of the bond, and secure our payment and performance obligations under such contracts. We have agreed to indemnify the surety companies for amounts, if any, paid by them in respect of surety bonds issued on our behalf. As of March 31, 2022, based on the percentage-of-completion of our projects covered by surety bonds, our aggregate estimated exposure, assuming defaults on all our then existing contractual obligations, was approximately $1.5 billion, which represents approximately 25% of our total remaining performance obligations.
Surety bonds are sometimes provided to secure obligations for wages and benefits payable to or for certain of our employees, at the request of labor unions representing such employees. In addition, surety bonds may be issued as collateral for certain insurance obligations. As of March 31, 2022, we satisfied approximately $48.1 million of the collateral requirements of our insurance programs by utilizing surety bonds.
We are not aware of any losses in connection with surety bonds that have been posted on our behalf, and we do not expect to incur significant losses in the foreseeable future.
Hazardous Materials
We are subject to regulation with respect to the handling of certain materials used in construction, which are classified as hazardous or toxic by federal, state, and local agencies. Our practice is to avoid participation in projects principally involving the remediation or removal of such materials. However, when remediation is required as part of our contract performance, we believe we comply with all applicable regulations governing the discharge of hazardous materials into the environment or otherwise relating to the protection of the environment.

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EMCOR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
NOTE 12 - Commitments and Contingencies (continued)
Government Contracts
As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims forwhich such audits may result in fines, penalties and compensatory and treble damages, and possible suspension or debarment from doing business with the government. Based on currently available information, we believe the outcome of ongoing government disputes and investigations will not have a material impact on our financial position, results of operations, or liquidity.
Legal MattersProceedings
One of our subsidiaries was a subcontractor to a mechanical contractor (“Mechanical Contractor”) on a construction project where an explosion occurred in 2010. The Mechanical Contractor has asserted claims, in the context of an arbitration proceeding against our subsidiary, alleging that our subsidiary is responsible for a portion of the damages for which the Mechanical Contractor may be liable as a result of: (a) personal injury suffered by individuals as a result of the explosion and (b) the Mechanical Contractor’s legal fees and associated management costs in defending against any and all such claims. The Mechanical Contractor previously asserted claims under the Connecticut and Massachusetts Unfair and Deceptive Trade Practices Acts, but such claims were recently withdrawn. The general contractor (as assignee of the Mechanical Contractor) on the construction project, and for whom the Mechanical Contractor worked, has alleged that our subsidiary is responsible for losses asserted by the owner of the project and/or the general contractor because of delays in completion of the project and for damages to the owner’s property. We believe, and have been advised by counsel, that we have a number of meritorious defenses to all such matters. We believe that the ultimate outcome of such matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. Notwithstanding our assessment of the final impact of this matter, we are not able to estimate with any certainty the amount of loss, if any, which would be associated with an adverse resolution.
We are involved in several otherlegal proceedings in which damages and claims have been asserted against us. We believe that we have a number of valid defenses to such proceedings and claims and intend to vigorously defend ourselves. Other potential claims may exist that have not yet been asserted against us. We do not believe that any such matters will have a material adverse effect on our financial position, results of operations, or liquidity. We record a loss contingency if the potential loss from a proceeding or claim is considered probable and the amount can be reasonably estimated or a range of loss can be determined. We provide disclosure when it is reasonably possible that a loss will be incurred in excess of any recorded provision. Significant judgment is required in these determinations. As additional information becomes available, we reassess prior determinations and may change our estimates. Additional claims may be asserted against us in the future. Litigation is subject to many uncertainties, and the outcome of litigation is not predictable with assurance. It is possible that somea litigation mattersmatter for which liabilities have not been recorded could be decided unfavorably to us, and that any such unfavorable decisionsdecision could have a material adverse effect on our financial position, results of operations, or liquidity.
RestructuringInsurance Liabilities
We have loss payment deductibles for certain workers’ compensation, automobile liability, general liability, and property claims, have self-insured retentions for certain other casualty claims, and are self-insured for employee-related healthcare claims. In addition, we maintain a wholly-owned captive insurance subsidiary to manage certain of our insurance liabilities. Losses are recorded based upon estimates of our liability for claims incurred and for claims incurred but not reported. The liabilities are derived from known facts, historical trends, and industry averages, utilizing the assistance of an independent third-party actuary to determine the best estimate for the majority of these obligations. As of March 31, 2022 and December 31, 2021, the estimated current portion of such undiscounted insurance liabilities, included in “Other accrued expenses
Restructuring expenses, primarily relating to employee severance obligations,and liabilities” in the accompanying Consolidated Balance Sheets, were less than $0.1$55.6 million and $1.0$61.5 million, respectively. The estimated non-current portion of such undiscounted insurance liabilities included in “Other long-term obligations” as of March 31, 2022 and December 31, 2021 were $216.2 million and $242.4 million, respectively. The current portion of anticipated insurance recoveries of $18.4 million and $26.4 million as of March 31, 2022 and December 31, 2021, respectively, were included in “Prepaid expenses and other” and the non-current portion of anticipated insurance recoveries of $66.6 million and $99.0 million as of March 31, 2022 and December 31, 2021, respectively, were included in “Other assets” in the accompanying Consolidated Balance Sheets. These balances decreased from December 31, 2021 as a result of the payment, by our insurers, of certain claims for which we previously maintained a reserve and corresponding insurance receivable.
NOTE 13 - Additional Cash Flow Information
The following table presents additional cash flow information for the three and nine months ended September 30, 2017, respectively,March 31, 2022 and $0.5 million and $1.3 million for the three and nine months ended September 30, 2016, respectively. As of September 30, 2017, the balance of these restructuring obligations yet to be paid was less than $0.1 million and is expected to be paid during the remainder of 2017. No material expenses in connection with restructuring from continuing operations are expected to be incurred during the remainder of 2017.2021 (in thousands):

For the three months ended
March 31,
 20222021
Cash paid for:  
Interest$1,264 $1,323 
Income taxes$33,489 $4,385 
Right-of-use assets obtained in exchange for new operating lease liabilities$21,286 $9,868 
Right-of-use assets obtained in exchange for new finance lease liabilities$552 $676 






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EMCOR Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 12 Commitments14 - Segment Information
We are one of the largest specialty contractors in the United States and Contingencies - (Continued)
a leading provider of electrical and mechanical construction and facilities services, building services, and industrial services. Our services are provided to a broad range of commercial, industrial, utility, and institutional customers through approximately 90 operating subsidiaries, which specialize principally in providing construction services relating to electrical and mechanical systems in all types of facilities and in providing various services relating to the operating, maintenance, and management of those facilities. Such operating subsidiaries are organized into the following reportable segments:

•United States electrical construction and facilities services;
The changes in restructuring activity by reportable segments during•United States mechanical construction and facilities services;
•United States building services;
•United States industrial services; and
•United Kingdom building services.
For a more complete description of our operations, refer to Item 1. Business of our Form 10-K for the nine monthsyear ended September 30, 2017 and 2016 were as follows (in thousands):    
  United States
mechanical
construction
and facilities
services segment		 United States building services segment Total
Balance at December 31, 2015 $—
 $81
 $81
Charges 401
 870
 1,271
Payments (108) (770) (878)
Balance at September 30, 2016 $293
 $181
 $474
Balance at December 31, 2016 $188
 $13
 $201
Charges 181
 773
 954
Payments (369) (737) (1,106)
Balance at September 30, 2017 $—
 $49
 $49
NOTE 13 Segment InformationDecember 31, 2021.
Our reportable segments and related disclosures reflect certain reclassifications of prior year amounts from our United States mechanical construction and facilities services segment to our United States building services segment, and from our United States building services segment to our United States construction segments, due to changes in our internal reporting structure.structure aimed at realigning our service offerings.
We have theThe following tables present financial information for each of our reportable segments which provide services associated withfor the design, integration, installation, start-up, operationthree months ended March 31, 2022 and maintenance of various systems: (a) United States electrical construction and facilities services (involving systems for electrical power transmission and distribution; premises electrical and lighting systems; process instrumentation in the refining, chemical process, food process and mining industries; low-voltage systems, such as fire alarm, security and process control; voice and data communication; roadway and transit lighting; and fiber optic lines); (b) United States mechanical construction and facilities services (involving systems for heating, ventilation, air conditioning, refrigeration and clean-room process ventilation; fire protection; plumbing, process and high-purity piping; controls and filtration; water and wastewater treatment; central plant heating and cooling; cranes and rigging; millwrighting; and steel fabrication, erection and welding); (c) United States building services; (d) United States industrial services; and (e) United Kingdom building services. The “United States building services” and “United Kingdom building services” segments principally consist of those operations which provide a portfolio of services needed to support the operation and maintenance of our customers’ facilities, including commercial and government site-based operations and maintenance; facility maintenance and services, including reception, security and catering services; outage services to utilities and industrial plants; military base operations support services; mobile 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; and small modification and retrofit projects, which services are not generally related to customers’ construction programs. The “United States industrial services” segment principally consists of those operations which provide industrial maintenance and services, including those 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.2021 (in thousands):

 For the three months ended
March 31,
 20222021
Revenues from unrelated entities:
United States electrical construction and facilities services$522,030 $459,395 
United States mechanical construction and facilities services1,000,470 914,501 
United States building services627,801 568,036 
United States industrial services310,751 235,382 
Total United States operations2,461,052 2,177,314 
United Kingdom building services131,497 126,735 
Total operations$2,592,549 $2,304,049 
Total revenues:
United States electrical construction and facilities services$523,414 $460,775 
United States mechanical construction and facilities services1,004,856 916,722 
United States building services652,231 590,445 
United States industrial services324,501 245,928 
Less intersegment revenues(43,950)(36,556)
Total United States operations2,461,052 2,177,314 
United Kingdom building services131,497 126,735 
Total operations$2,592,549 $2,304,049 








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EMCOR Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 1314 - Segment Information (continued)
For the three months ended
March 31,
20222021
Operating income (loss):
United States electrical construction and facilities services$19,993 $40,252 
United States mechanical construction and facilities services58,674 63,176 
United States building services23,922 31,120 
United States industrial services13,258 (2,443)
Total United States operations115,847 132,105 
United Kingdom building services10,588 9,411 
Corporate administration(26,478)(24,512)
Total operations99,957 117,004 
Other items:
Net periodic pension (cost) income1,169 908 
Interest expense, net(1,289)(1,363)
Income before income taxes$99,837 $116,549 
March 31,
2022		December 31,
2021
Total assets:
United States electrical construction and facilities services$847,786 $855,417 
United States mechanical construction and facilities services1,698,791 1,672,546 
United States building services1,132,080 1,089,844 
United States industrial services659,795 589,017 
Total United States operations4,338,452 4,206,824 
United Kingdom building services259,522 241,740 
Corporate administration633,180 992,882 
Total operations$5,231,154 $5,441,446 
NOTE 15 - (Continued)Subsequent Events
In April 2022, we acquired a company for an immaterial amount. This company provides fire protection services in the Southern region of the United States, and the results of its operations will be included in our United States mechanical construction and facilities services segment. The acquisition of this business will be accounted for by the acquisition method, and the amount paid will be allocated to its respective assets and liabilities, based upon the estimated fair value of such assets and liabilities on the date of acquisition by us.
22

The following tables present information about industry segments and geographic areas for the three and nine months ended September 30, 2017 and 2016 (in thousands):
 For the three months ended September 30,
 2017 2016
Revenues from unrelated entities:   
United States electrical construction and facilities services$457,919
 $458,553
United States mechanical construction and facilities services760,084
 691,818
United States building services437,107
 460,715
United States industrial services145,679
 239,052
Total United States operations1,800,789
 1,850,138
United Kingdom building services85,902
 73,036
Total worldwide operations$1,886,691
 $1,923,174
    
Total revenues:   
United States electrical construction and facilities services$460,066
 $465,476
United States mechanical construction and facilities services767,398
 696,549
United States building services451,396
 475,106
United States industrial services147,133
 239,489
Less intersegment revenues(25,204) (26,482)
Total United States operations1,800,789
 1,850,138
United Kingdom building services85,902
 73,036
Total worldwide operations$1,886,691
 $1,923,174
 For the nine months ended September 30,
 2017 2016
Revenues from unrelated entities:   
United States electrical construction and facilities services$1,350,157
 $1,227,474
United States mechanical construction and facilities services2,173,030
 1,925,793
United States building services1,315,401
 1,366,973
United States industrial services591,694
 830,064
Total United States operations5,430,282
 5,350,304
United Kingdom building services244,078
 251,256
Total worldwide operations$5,674,360
 $5,601,560
    
Total revenues:   
United States electrical construction and facilities services$1,355,206
 $1,249,681
United States mechanical construction and facilities services2,197,231
 1,937,089
United States building services1,360,189
 1,407,361
United States industrial services593,648
 831,111
Less intersegment revenues(75,992) (74,938)
Total United States operations5,430,282
 5,350,304
United Kingdom building services244,078
 251,256
Total worldwide operations$5,674,360
 $5,601,560

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EMCOR Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 13 Segment Information - (Continued)

 For the three months ended September 30,
 2017 2016
Operating income (loss):   
United States electrical construction and facilities services$46,583
 $30,927
United States mechanical construction and facilities services57,484
 38,890
United States building services25,981
 23,125
United States industrial services(4,844) 14,586
Total United States operations125,204
 107,528
United Kingdom building services3,933
 2,591
Corporate administration(22,632) (23,516)
Restructuring expenses(46) (539)
Total worldwide operations106,459
 86,064
Other corporate items:   
Interest expense(3,324) (3,479)
Interest income277
 161
Income from continuing operations before income taxes$103,412
 $82,746
 For the nine months ended September 30,
 2017 2016
Operating income (loss):   
United States electrical construction and facilities services$109,735
 $70,645
United States mechanical construction and facilities services150,971
 100,607
United States building services60,375
 55,658
United States industrial services16,573
 66,600
Total United States operations337,654
 293,510
United Kingdom building services9,109
 9,160
Corporate administration(63,755) (67,431)
Restructuring expenses(954) (1,271)
Total worldwide operations282,054
 233,968
Other corporate items:   
Interest expense(9,464) (8,973)
Interest income607
 518
Income from continuing operations before income taxes$273,197
 $225,513











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EMCOR Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 13 Segment Information - (Continued)

 September 30,
2017		 December 31,
2016
Total assets:   
United States electrical construction and facilities services$595,680
 $631,581
United States mechanical construction and facilities services1,055,857
 954,633
United States building services774,449
 753,434
United States industrial services840,757
 850,434
Total United States operations3,266,743
 3,190,082
United Kingdom building services121,659
 105,081
Corporate administration577,919
 557,275
Total worldwide operations$3,966,321
 $3,852,438

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Business Description
We are one of the largest specialty contractors in the United States and a leading provider of electrical and mechanical construction and facilities services, firms in the United States. In addition, we provide a number of building services, and industrial services. Our services are provided to a broad range of commercial, industrial, utility, and institutional customers through approximately 7590 operating subsidiaries, which specialize principally in providing construction services relating to electrical and joint venture entities. mechanical systems in all types of facilities and in providing various services relating to the operation, maintenance, and management of those facilities. Such operating subsidiaries are organized into the following reportable segments:
•United States electrical construction and facilities services;
•United States mechanical construction and facilities services;
•United States building services;
•United States industrial services; and
•United Kingdom building services.
For a more complete description of our operations, refer to Item 1. Business of our Form 10-K for the year ended December 31, 2021.
Our officesreportable segments and related disclosures reflect certain reclassifications of prior year amounts from our United States mechanical construction and facilities services segment to our United States building services segment, and from our United States building services segment to our United States construction segments, due to changes in our internal reporting structure aimed at realigning our service offerings.
Market Update
Although our business continues to recover from the financial impacts of the COVID-19 pandemic and related government orders implemented to mitigate it, the broader and longer-term implications the pandemic has on the global economy continue to develop. Economic disruptions, including supply chain, production, and other logistical issues, as well as escalating commodity prices, have and may continue to negatively impact our business. For example, we are locatedexperiencing lead times significantly in excess of normal levels while also experiencing the effects of inflation through increases in fuel, material, and other commodity prices. These disruptions worsened in the first quarter of 2022 and have manifested themselves most notably through project delays and reduced labor productivity and efficiency, particularly within our United States construction segments and our United States building services segment, as described in further detail below. In response to these challenges, we continue to strive to more effectively manage our business through enhanced labor planning and project scheduling, increased pricing to the extent contractually permitted, and by leveraging our relationships with our suppliers and customers. However, the impact of these disruptions continues to evolve and the conflict in Ukraine has added another layer of uncertainty, especially with respect to energy costs. There can be no assurance that our actions will serve to mitigate such impacts in future periods. Further, while we believe our remaining performance obligations are firm, and our customers have not provided us with any indications that they no longer wish to proceed with planned projects, prolonged delays in the receipt of critical equipment could result in our customers seeking to terminate existing or pending agreements. Any of these events could have a material adverse effect on our business, financial condition, and/or results of operations.
Overview
The following table presents selected financial data for the three months ended March 31, 2022 and 2021 (in thousands, except percentages and per share data):
 For the three months ended
March 31,
 20222021
Revenues$2,592,549 $2,304,049 
Revenues increase from prior year12.5 %0.2 %
Gross profit$352,555 $341,073 
Gross profit as a percentage of revenues13.6 %14.8 %
Operating income$99,957 $117,004 
Operating income as a percentage of revenues3.9 %5.1 %
Net income attributable to EMCOR Group, Inc.$73,386 $84,774 
Diluted earnings per common share$1.39 $1.54 
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Revenues of $2.59 billion for the quarter ended March 31, 2022 represent an increase of 12.5% from revenues of $2.30 billion for the quarter ended March 31, 2021. As described in further detail below, we experienced revenue growth within all of our reportable segments. In addition, during the first quarter of 2022, companies acquired in 2021 generated incremental revenues of approximately $49.5 million.
Despite the increase in revenues referenced above, operating income for the quarter ended March 31, 2022 of $100.0 million, or 3.9% of revenues, represents a decrease compared to operating income of $117.0 million, or 5.1% of revenues, for the quarter ended March 31, 2021. A decline in our consolidated gross profit margin negatively impacted our ability to convert such revenue growth into incremental operating profitability. Notably, we experienced a decline in gross profit margin within our United Kingdom.States electrical construction and facilities services segment, largely as a result of a change in project mix, including a reduction in revenues from telecommunication construction projects. Similarly, we experienced a decline in gross profit margin within our United States mechanical construction and facilities services segment, due to a greater number of projects within the manufacturing and water and wastewater market sectors for which we are acting as either the construction manager or general contractor and therefore carry lower than average gross profit margins. In addition to the change in project mix referenced above, our United States construction segments, as well as our United States building services segment, were negatively impacted by supply chain disruptions and delays, which, in certain instances, led to either: (a) reduced labor productivity and efficiency, (b) the under-absorption of labor costs in instances where projects were delayed pending the receipt of materials, or (c) material and commodity price escalations. These decreases in gross profit margin were partially offset by improved gross profit margins within our United States industrial services segment, which experienced a more normalized spring turnaround season compared to the prior year, and our United Kingdom building services segment.
Impact of Acquisitions
In order to provide a more meaningful period-over-period discussion of our operating results, we may discuss amounts generated or incurred (revenues, gross profit, selling, general and administrative expenses, and operating income) from companies acquired. The amounts discussed reflect the acquired companies’ operating results in the current reported period only for the time period these entities were not owned by EMCOR in the comparable prior reported period.
Overview
The following table presents selected financial data forDuring the three months ended September 30, 2017 and 2016 (in thousands, except percentages and per share data):
 For the three months ended
September 30,
 2017 2016
Revenues$1,886,691
 $1,923,174
Revenues (decrease) increase from prior year(1.9)% 13.2%
Operating income$106,459
 $86,064
Operating income as a percentage of revenues5.6 % 4.5%
Net income attributable to EMCOR Group, Inc.$64,597
 $51,531
Diluted earnings per common share from continuing operations$1.09
 $0.85
The results for the 2017 third quarter set new company records in terms of quarterly operating income, net income attributable to EMCOR Group, Inc. and diluted earnings per common share from continuing operations, despite the challenges faced by our United States industrial services segment during the quarter. In addition, our operating margin (operating income as a percentage of revenues) was a new company record for a third quarter. The decrease in revenues for the 2017 third quarter was primarily attributable to our field services operations within our United States industrial services segment due to: (a) decreased demand for our specialty services offerings, including large project activity, and (b) a decrease in turnaround activities, as the thirdfirst quarter of 2017 was negatively impacted by Hurricane Harvey, which resulted2022, we acquired a company for an immaterial amount. This company provides fire protection services in the deferralNortheastern region of and may lead to the potential cancellationUnited States.
We acquired eight companies during calendar year 2021 for total consideration of previously scheduled turnaround projects. In addition, revenues decreased$131.2 million. Such acquisitions include: (a) two companies, the results of operations of which were de minimis, included within our United States building services segment, primarily attributable to: (a) the loss of certain contracts not renewed pursuant to rebid within our commercial and government site-based services operations and (b) a reduction in large project activity within our energy services operations. These decreases were partially offset by an increase in revenues from our United States mechanical construction and facilities services segment, due to increased activityconsisting of: (i) a company that provides mechanical services within the healthcare, hospitality and commercial market sectors. In addition, companies acquired in 2017, which are reported in ourSouthern region of the United States mechanical construction and facilities(ii) a company that provides fire protection services segment and ourin the Midwestern region of the United States, building(b) two companies that provide electrical construction services segment, generated incremental revenuesfor a broad array of $34.7 million.
Operating income and operating margin increased within allcustomers in the Midwestern region of our reportable segments, except for ourthe United States, industrial services segment. The overall increase in operating income and operating margin was mainly attributable to the results of our domestic construction segments,operations of which were favorably impacted by an increasehave been included in gross profit within the majority of the market sectors in which we operate. In addition, the results of our United States electrical construction and facilities services segment, for the 2016 third quarter were negatively impacted by $6.9 million of losses incurred on a transportation construction project. Companies acquired in 2017 contributed incremental operating income of $1.3 million, inclusive of $2.3 million of amortization expense associated with identifiable intangible assets.





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Operating Segments
Our reportable segments reflect certain reclassifications of prior year amounts from our United States mechanical construction and facilities services segment to(c) four companies included within our United States building services segment, due to changesconsisting of: (i) a company that provides mobile mechanical services across North Texas and (ii) three companies, the results of operations of which were de minimis, that bolster our presence in our internal reporting structure.
Wegeographies where we have the following reportable segments, which provide services associated with the design, integration, installation, start-up, operation and maintenance of various systems: (a) United States electrical construction and facilities services (involving systems for electrical power transmission and distribution; premises electrical and lighting systems; process instrumentation in the refining, chemical process, food process and mining industries; low-voltage systems, such as fire alarm, security and process control; voice and data communication; roadway and transit lighting; and fiber optic lines); (b) United States mechanical construction and facilities services (involving systems for heating, ventilation, air conditioning, refrigeration and clean-room process ventilation; fire protection; plumbing, process and high-purity piping; controls and filtration; water and wastewater treatment; central plant heating and cooling; cranes and rigging; millwrighting; and steel fabrication, erection and welding); (c) United States building services; (d) United States industrial services; and (e) United Kingdom building services. The “United States building services” and “United Kingdom building services” segments principally consist of those operations which provide a portfolio of services needed to support the operation and maintenance of our customers’ facilities, including commercial and government site-basedexisting operations and maintenance; facility maintenanceprovide either mobile mechanical services or building automation and services, including reception, security and catering services; outage services to utilities and industrial plants; 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; and small modification and retrofit projects, which services are not generally related to customers’ construction programs. The “United States industrial services” segment principally consists of those operations which provide industrial maintenance and services, including those 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.controls solutions.
Results of Operations
Revenues
The following tables presenttable presents our operating segment revenues from unrelated entities and their respective percentages of total revenues (in thousands, except for percentages):
 For the three months ended March 31,
 2022% of
Total		2021% of
Total
Revenues:
United States electrical construction and facilities services$522,030 20 %$459,395 20 %
United States mechanical construction and facilities services1,000,470 39 %914,501 40 %
United States building services627,801 24 %568,036 25 %
United States industrial services310,751 12 %235,382 10 %
Total United States operations2,461,052 95 %2,177,314 95 %
United Kingdom building services131,497 5 %126,735 5 %
Total operations$2,592,549 100 %$2,304,049 100 %
24
 For the three months ended September 30,
 2017 
% of
Total
 2016 
% of
Total
Revenues:       
United States electrical construction and facilities services$457,919
 24% $458,553
 24%
United States mechanical construction and facilities services760,084
 40% 691,818
 36%
United States building services437,107
 23% 460,715
 24%
United States industrial services145,679
 8% 239,052
 12%
Total United States operations1,800,789
 95% 1,850,138
 96%
United Kingdom building services85,902
 5% 73,036
 4%
Total worldwide operations$1,886,691
 100% $1,923,174
 100%

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 For the nine months ended September 30,
 2017 
% of
Total
 2016 
% of
Total
Revenues:       
United States electrical construction and facilities services$1,350,157
 24% $1,227,474
 22%
United States mechanical construction and facilities services2,173,030
 38% 1,925,793
 34%
United States building services1,315,401
 23% 1,366,973
 24%
United States industrial services591,694
 10% 830,064
 15%
Total United States operations5,430,282
 96% 5,350,304
 96%
United Kingdom building services244,078
 4% 251,256
 4%
Total worldwide operations$5,674,360
 100% $5,601,560
 100%

As described below in more detail, as a result of revenue growth within all of our reportable segments, our revenues for the three months ended September 30, 2017 decreasedfirst quarter of 2022 increased to $1.89$2.59 billion compared to $1.92$2.30 billion for the three months ended September 30, 2016, and our revenues for the nine months ended September 30, 2017 increased to $5.67 billion compared to $5.60 billion for the nine months ended September 30, 2016. The decrease in revenues for the three months ended September 30, 2017 was primarily attributable to a decrease in revenues from our United States industrial services segment and our United States building services segment, partially offset by an increase in revenues from our United States mechanical construction and facilities services segment. The increase in revenues for the nine months ended September 30, 2017 was primarily attributable to increased revenues from bothfirst quarter of our domestic construction segments. Companies acquired in 2017 and 2016, which are reported in our United States electrical construction and facilities services segment, our United States mechanical construction and facilities services segment and our United States building services segment, generated incremental revenues of $34.7 million and $156.5 million for the three and nine months ended September 30, 2017, respectively.2021.
Revenues of our United States electrical construction and facilities services segment were $457.9$522.0 million and $1,350.2 million for the three and nine months ended September 30, 2017, respectively, compared to revenues of $458.6 million and $1,227.5 million for the three and nine months ended September 30, 2016, respectively. The decrease in revenues for the three months ended September 30, 2017 was primarily attributableMarch 31, 2022 compared to a decrease in revenues from electrical construction projects with customers in the industrial and power generation industries, partially offset by an increase in revenues from institutional and commercial construction projects. The increase in revenuesof $459.4 million for the ninethree months ended September 30, 2017 was primarily attributable to an increase in revenues from commercial and transportation construction projects. The increase in revenues within the commercial market sector for both periods was primarily as a result of work performed on numerous telecommunication construction projects. TheMarch 31, 2021. This segment’s results for the nine months ended September 30, 20172022 period included $50.4$34.9 million of incremental revenues generated by companies acquired in 2021. Excluding the acquisitionimpact of Ardent Services, L.L.C.acquisitions, revenues of this segment increased by $27.7 million, primarily as a result of an increase in revenues from: (a) the commercial market sector, (b) transmission and Rabalais Constructors, LLC (collectively, “Ardent”).distribution projects, including those to support sustainable energy solutions such as solar and wind, (c) the transportation market sector, driven by large project activity within the Midwestern region of the United States, and (d) healthcare project activity throughout several of the regions in which we operate. Despite the increase in commercial market sector revenues, this segment experienced a reduction in telecommunication construction project revenues when compared to the prior year period, partially as a result of supply chain disruptions, which have resulted in a delay in the start-up of recently awarded projects as our customers await delivery of critical equipment. In addition, this segment’s results for the three months ended March 31, 2022 reflect a decrease in revenues from the institutional market sector, due to the completion or substantial completion of certain projects which were performed in the prior year.
Our United States mechanical construction and facilities services segment revenues for the three months ended September 30, 2017March 31, 2022 were $760.1 million, a $68.3$1.0 billion, an $86.0 million increase compared to revenues of $691.8$914.5 million for the three months ended September 30, 2016. Revenues of this segment for the nine months ended September 30, 2017 were $2,173.0 million, a $247.2 million increase compared to revenues of $1,925.8 million for the nine months ended September 30, 2016.March 31, 2021. The increase in this segment’s revenues for both periods was primarily attributable to an increaserevenue growth within the majority of the market sectors in revenues from healthcare, commercial and hospitality construction projects. In addition, revenues forwhich we operate, including: (a) the nine months ended September 30, 2017 benefited from an increase in revenues from water and wastewater market sector, given increased project activity within the Southern region of the United States, (b) the manufacturing market sector, driven by certain large food processing projects, (c) the commercial market sector, given: (i) increased demand for our mechanical construction projects, partially offsetservices by a decreasecertain customers engaged in revenues from institutional construction projects. The resultsthe design and manufacturing of semiconductors as well as customers within the biotech, life-sciences, and pharmaceutical industries, and (ii) the continued build-out of our customers’ e-commerce supply chains, which has resulted in increased demand for our fire protection services within their warehousing and distribution facilities, and (d) the threehealthcare market sector, due to increased mechanical system retrofits and nine months ended September 30, 2017 included $17.9 million and $55.7 million, respectively, of incremental revenues generated by a company acquired in 2017.installations as our healthcare customers seek to upgrade their existing facilities or build new facilities.
Revenues of our United States building services segment were $627.8 million for the three months ended September 30, 2017 decreased by $23.6March 31, 2022 compared to revenues of $568.0 million compared tofor the three months ended September 30, 2016, andMarch 31, 2021. Excluding incremental acquisition revenues forwithin this segment’s mobile mechanical services division of $14.6 million, this segment’s revenue growth during the nine months ended September 30, 2017 decreased by $51.6 million compared to the nine months ended September 30, 2016. The decrease in revenues for both periods2022 period was primarily attributable to: (a) the loss of certain contracts not renewed pursuant to rebid within our commercial and government site-based services operations and (b) a reduction in large project activity within our energy services operations. In addition, the decrease in revenues for the nine months ended September 30, 2017 was partially due to a reduction in snow removal activities within ourits commercial site-based services operations. These decreases were partially offset by an increase in revenues from ourand government services divisions, due to the award of facilities maintenance contracts with new customers, as well as scope expansion with existing customers, and (b) its mobile mechanical services operationsdivision, due to: (i) greater service repair and maintenance volumes, partially as a result of greater project, serviceincremental repair opportunities driven by supply chain delays, which have created a need to extend the life of existing equipment in instances when replacement equipment is not readily available, and (ii) an increase in demand for building automation and controls activities. The results forservices, partially as our customers continue to seek ways to improve the three and nine months ended September 30, 2017 included $16.8 million and $50.4 million, respectively,energy efficiency of incremental revenues generated by companies acquired in 2017 and 2016.

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their facilities.
Revenues of our United States industrial services segment for the three months ended September 30, 2017 decreased by $93.4March 31, 2022 were $310.8 million, a $75.4 million increase compared to the three months ended September 30, 2016, and revenues for the nine months ended September 30, 2017 decreased by $238.4of $235.4 million compared to the nine months ended September 30, 2016. This segment’s results for the three months ended September 30, 2017 were negatively impacted by Hurricane Harvey, whichMarch 31, 2021. While there remains significant disruption and uncertainty within the broader oil and gas industry, most notably within the upstream and midstream energy sectors, we began to experience a resumption in demand within this segment during the second half of 2021. Such increased demand continued into the first quarter of 2022 and resulted in the deferral of, and may leadgrowth in revenues from: (a) this segment’s field services operations, due to a more normalized spring turnaround season when compared to the potential cancellationprior year, and (b) this segment’s shop services operations, as a result of previously scheduled turnaround projects. In addition, the decreasegreater new build heat exchanger sales and an increase in revenues for both periods was attributable to decreased large project activity from our specialty services offerings within our field services operations.maintenance, repair, and hydro blast cleaning services.
Our United Kingdom building services segment revenues were $85.9$131.5 million for the three months ended September 30, 2017March 31, 2022 compared to revenues of $73.0$126.7 million for the three months ended September 30, 2016. ForMarch 31, 2021. The increase in this segment’s revenues was predominantly a result of growth in project activities with existing customers, primarily within the nine months ended September 30, 2017, revenues for this segment were $244.1 million compared to revenues of $251.3 millioncommercial market sector, including certain telecommunication projects. Unfavorable exchange rates for the nine months ended September 30, 2016. ThisBritish pound versus the United States dollar negatively impacted this segment’s revenues for the threefirst quarter of 2022 by $3.9 million.





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Cost of sales and ninegross profit
The following table presents our cost of sales, gross profit (revenues less cost of sales), and gross profit margin (gross profit as a percentage of revenues) (in thousands, except for percentages):
 For the three months ended
March 31,
 20222021
Cost of sales$2,239,994 $1,962,976 
Gross profit$352,555 $341,073 
Gross profit margin13.6 %14.8 %
Our gross profit for the three months ended September 30, 2017March 31, 2022 was $352.6 million, or 13.6% of revenues, compared to gross profit of $341.1 million, or 14.8% of revenues, for the three months ended March 31, 2021. The increase in gross profit was a result of increased revenue volume, which despite the decrease in gross profit margin discussed below, resulted in an increase in consolidated gross profit.
The decrease in gross profit margin for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily attributable to a reduction in gross profit margin within each of our United States construction segments, as well as our United States building services segment, both as a result of a less favorable project mix, as well as certain discrete impacts in the period, due in part to supply chain delays and disruptions. Refer to the operating income section below for further discussion regarding the operating performance of each of our reportable segments.
Selling, general and administrative expenses
The following table presents our selling, general and administrative expenses and SG&A margin (selling, general and administrative expenses as a percentage of revenues) (in thousands, except for percentages):
 For the three months ended
March 31,
 20222021
Selling, general and administrative expenses$252,598 $224,069 
SG&A margin9.7 %9.7 %
Our selling, general and administrative expenses for the three months ended March 31, 2022 were $252.6 million compared to selling, general and administrative expenses of $224.1 million for the three months ended March 31, 2021. Selling, general and administrative expenses for the 2022 period included $5.2 million of incremental expenses directly related to companies acquired in 2022 and 2021, including amortization expense attributable to identifiable intangible assets of $1.0 million. Excluding incremental expenses from businesses acquired, our selling, general and administrative expenses increased by $23.3 million for the three months ended March 31, 2022. The organic increase in selling, general and administrative expenses for the three months ended March 31, 2022 was primarily attributable to an increase in: (a) salaries and incentive compensation expense, as a result of an increase in headcount to support our organic revenue growth in the current period, (b) employee benefit costs, driven by greater medical claim activity, (c) computer hardware and software costs, partially as a result of various information technology and cybersecurity initiatives currently in process, and (d) travel and entertainment expenses, given a resumption in travel and business meals as COVID-19 related restrictions continue to ease.
Selling, general and administrative expenses as a percentage of revenues was 9.7% for each of the three months ended March 31, 2022 and 2021.








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Operating income (loss)
The following table presents our operating income (loss) and operating margin (operating income (loss) as a percentage of segment revenues) (in thousands, except for percentages):
 For the three months ended March 31,
2022% of
Segment
Revenues		2021% of
Segment
Revenues
Operating income (loss):
United States electrical construction and facilities services$19,993 3.8 %$40,252 8.8 %
United States mechanical construction and facilities services58,674 5.9 %63,176 6.9 %
United States building services23,922 3.8 %31,120 5.5 %
United States industrial services13,258 4.3 %(2,443)(1.0)%
Total United States operations115,847 4.7 %132,105 6.1 %
United Kingdom building services10,588 8.1 %9,411 7.4 %
Corporate administration(26,478)— (24,512)— 
Total operations99,957 3.9 %117,004 5.1 %
Other items:
Net periodic pension (cost) income1,169 908 
Interest expense, net(1,289)(1,363)
Income before income taxes$99,837 $116,549 
Operating income was $100.0 million, or 3.9% of revenues, for the three months ended March 31, 2022 compared to operating income of $117.0 million, or 5.1% of revenues, for the three months ended March 31, 2021. As described in further detail below, operating income and operating margin of each of our United States construction segments as well as our United States building services segment decreased when compared to the prior year period. These declines were only partially offset by increases in operating income and operating margin within our United States industrial services segment and our United Kingdom building services segment.
Operating income of our United States electrical construction and facilities services segment was $20.0 million, or 3.8% of revenues, for the three months ended March 31, 2022, compared to $40.3 million, or 8.8% of revenues, for the three months ended March 31, 2021. Companies acquired in 2021 contributed incremental operating income of $1.2 million, inclusive of $1.8 million of amortization expense associated with identifiable intangible assets, for the quarter ended March 31, 2022. Excluding such acquisition contribution, operating income of this segment decreased by $21.5 million during the 2022 period. The decrease in both operating income and operating margin was largely attributable to a decrease in gross profit and gross profit margin from: (a) the commercial market sector, primarily as a result of a change in project mix, including a reduction in revenues from telecommunication construction projects given the temporary project delays previously referenced, and (b) the institutional market sector, given the favorable progression or close-out of certain projects in the prior year period. In addition, labor productivity and efficiency within this segment was adversely impacted during the quarter as a result of supply chain disruptions and delays, which led to issues with respect to the sequencing of work on certain projects.
Our United States mechanical construction and facilities services segment’s operating income for the three months ended March 31, 2022 was $58.7 million, compared to operating income of $63.2 million for the three months ended March 31, 2021. Despite the aforementioned increase in this segment’s revenues, operating income decreased due to a 100 basis point contraction in operating margin, largely as a result of a decline in gross profit margin given a greater number of projects within the manufacturing and water and wastewater market sectors for which we are acting as either the construction manager or general contractor and therefore carry lower than average gross profit margins. In addition, the results of this segment for the first quarter of 2022 were negatively impacted by certain project write-downs resulting, in part, from supply chain disruptions and/or material price escalations, a portion for which we will seek recovery from our customers.
Based on an evaluation of individual projects that had revisions to total estimated costs, which resulted in a reduction of profitability in excess of $1.0 million, the operating results of our United States construction segments were negatively impacted by approximately $10.0 million during the three months ended March 31, 2022. Of this amount, approximately $4.6 million was recorded within our United States electrical construction and facilities services segment and approximately $5.4 million was recorded withing our United States mechanical construction and facilities services segment. These reductions in estimated project profitability negatively affected the operating margin of these segments for the first quarter of 2022 by 0.9% and 0.5%, respectively. There were no changes in total estimated costs that had a significant impact on the operating results of these segments during the three months ended March 31, 2021.
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Operating income of our United States building services segment was $23.9 million, or 3.8% of revenues, for the three months ended March 31, 2022 compared to $31.1 million, or 5.5% of revenues, for the three months ended March 31, 2021. Given a reduction in gross profit margin within this segment, increased gross profit, resulting from the previously referenced period over period revenue growth, was more than offset by an increase in selling, general and administrative expenses, resulting in the decrease in operating income and operating margin for the first quarter of 2022. Gross profit margin of this segment for the 2022 period was negatively impacted by: (a) a less favorable mix of work within this segment’s mobile mechanical services division, including a greater number of fixed price capital projects, which traditionally have lower gross profit margins than the other service and repair offerings of this segment, (b) a shift from add-on project work within this segment’s commercial site-based services division, to more traditional facilities maintenance type projects, which carry lower gross profit margins, (c) supply chain disruptions, including longer lead times for certain materials and equipment, which resulted in a greater amount of unabsorbed labor costs in instances where projects were delayed pending the receipt of materials, and (d) an escalation in fuel prices for its fleet of approximately 4,000 service vehicles, a portion of which we were unable to pass along to our customers.
Our United States industrial services segment reported operating income of $13.3 million, or 4.3% of revenues, for the three months ended March 31, 2022, compared to an operating loss of $2.4 million, or (1.0)% of revenues, for the three months ended March 31, 2021. The increase in both operating income and operating margin was due to an increase in gross profit and gross profit margin during the first quarter of 2022 from both our field services and shop services operations, given: (a) a more normalized demand pattern, which led to increased revenue and resulted in greater gross profit contribution, and (b) improved project mix, as pricing began to recover. In addition, operating margin of this segment benefited from a reduction in the ratio of selling, general administrative expenses to revenues as this segment was able to leverage its overhead cost structure during a period of revenue growth.
Operating income of our United Kingdom building services segment was $10.6 million, or 8.1% of revenues, for the three months ended March 31, 2022 compared to $9.4 million, or 7.4% of revenues, for the three months ended March 31, 2021. The increase in this segment’s operating income and operating margin for the 2022 period was primarily a result of: (a) the favorable close-out of a project within the institutional market sector and (b) an increase in gross profit and gross profit margin from projects within the commercial market sector, including the telecommunication projects referenced in the revenue commentary for this segment. This segment’s operating income for the first quarter of 2022 was negatively impacted by $0.3 million and $22.1 million, respectively, related to the effect of unfavorable exchange rates for the British pound versus the United States dollar. The unfavorable exchange rates
Our corporate administration expenses for the ninethree months ended September 30, 2017 resulted, in part, fromMarch 31, 2022 were $26.5 million compared to $24.5 million for the decision by the United Kingdom to exit the European Union. Excluding the impact of unfavorable exchange rates, thethree months ended March 31, 2021. The increase in revenuescorporate administration expenses was primarily due to an increase in employment costs, given an increase in headcount to support the revenue growth within our business as well as certain information technology and cybersecurity initiatives currently in process.
Other items
Net interest expense for both periodsthe three months ended March 31, 2022 and 2021 was $1.3 million and $1.4 million, respectively.
For the three months ended March 31, 2022, our income tax provision was $26.5 million compared to an income tax provision of $31.6 million for the three months ended March 31, 2021. Our income tax rate for the three months ended March 31, 2022 was 26.5% compared to an income tax rate for the three months ended March 31, 2021 of 27.2%. The decrease in our income tax provision for the three months ended March 31, 2022 was a result of increased revenues from new contract awards within the commercial and institutional market sectors, partially offset bya reduction in taxable income as well as a decrease in project activity with existing customers.our income tax rate during the period. The decrease in our income tax rate for the three months ended March 31, 2022 was attributable to: (a) a reduction in certain permanent book to tax differences, (b) the favorable impact of certain discrete tax items during the first quarter of 2022, including an increase in the income tax benefit recognized upon the issuance of common stock under our share-based compensation programs, and (c) a reduction in our state income tax rate due to a change in the allocation of earnings among the jurisdictions in which our income is taxed.
Backlog







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Remaining Unsatisfied Performance Obligations    
The following table presents the transaction price allocated to remaining unsatisfied performance obligations (“remaining performance obligations”) for each of our operating segment backlog from unrelated entitiesreportable segments and their respective percentagespercentage of total backlogremaining performance obligations (in thousands, except for percentages):
March 31,
 2022		% of TotalDecember 31, 2021% of TotalMarch 31,
2021		% of Total
Remaining performance obligations:
United States electrical construction and facilities services$1,297,086 22 %$1,224,577 22 %$1,176,825 25 %
United States mechanical construction and facilities services3,384,089 57 %3,272,124 58 %2,639,426 55 %
United States building services995,003 16 %872,550 16 %688,636 14 %
United States industrial services116,496 2 %111,838 2 %120,964 3 %
Total United States operations5,792,674 97 %5,481,089 98 %4,625,851 97 %
United Kingdom building services160,207 3 %118,208 2 %149,306 3 %
Total operations$5,952,881 100 %$5,599,297 100 %$4,775,157 100 %
 September 30, 2017 
% of
Total
 December 31, 2016 
% of
Total
 September 30, 2016 
% of
Total
Backlog:           
United States electrical construction and facilities services$1,219,755
 31% $1,221,237
 31% $1,154,939
 30%
United States mechanical construction and facilities services1,816,413
 46% 1,818,536
 47% 1,834,335
 47%
United States building services701,569
 18% 663,340
 17% 706,188
 18%
United States industrial services57,476
 1% 50,279
 1% 51,200
 1%
Total United States operations3,795,213
 96% 3,753,392
 96% 3,746,662
 96%
United Kingdom building services167,955
 4% 149,530
 4% 156,032
 4%
Total worldwide operations$3,963,168
 100% $3,902,922
 100% $3,902,694
 100%
Our backlog at September 30, 2017 was $3.96 billion compared to $3.90 billion at both December 31, 2016 and September 30, 2016. TheRemaining performance obligations increase in backlog at September 30, 2017 compared to backlog at December 31, 2016 was attributable to an increase in backlog from our United States building services segment, our United Kingdom building services segment and our United States industrial services segment, inclusive of acquisitions. Backlog increases with awards of new contracts and decreasesdecrease as we perform work and recognize revenue 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 backlogremaining performance obligations at such time as a contractthe project is awarded and agreement on contract terms has been reached. Backlog includes unrecognized revenues to be realized from uncompleted construction contracts plus unrecognized revenues expected to be realized over theOur remaining term of services contracts. However, we do notperformance obligations include in backlog contracts for which we are paid on a time and material basis and a fixed amount cannot be determined, and if the remaining term of a 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 provided for in the contract award. Our backlog also includes amounts related to services contracts for which a fixed price contract value is not assigned when a reasonable estimate of the total revenuestransaction price can be mademade.
Remaining performance obligations include unrecognized revenues to be realized from budgeted amounts agreeduncompleted construction contracts. Although many of our construction contracts are subject to cancellation at the election of our customers, in accordance with industry practice, we do not limit the amount of unrecognized revenue included within remaining performance obligations for these contracts as the risk of cancellation is very low due to the inherent substantial economic penalty that our customer. customers would incur upon cancellation or termination. We believe our reported remaining performance obligations for our construction contracts are firm and contract cancellations have not had a material adverse effect on us.
Remaining performance obligations also include unrecognized revenues expected to be realized over the remaining term of service contracts. However, to the extent a service contract includes a cancellation clause which allows for the termination of such contract by either party without a substantive penalty, the remaining contract term, and therefore, the amount of unrecognized revenues included within remaining performance obligations, is limited to the notice period required for the termination.
Our backlog isremaining performance obligations are 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 recoverythe variable consideration constraint does not apply, and (e) other forms of variable consideration to be probable.the extent that such variable consideration has been included within the transaction price of our contracts. Such claim and other variable consideration amounts were immaterial for all periods presented. Our backlog does not include anticipated revenues from unconsolidated joint ventures or variable interest entities nor 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.



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Cost of sales and Gross profit
The following table presents our cost of sales, gross profit (revenues less cost of sales) and gross profit margin (gross profit as a percentage of revenues) (in thousands, except for percentages):
 For the three months ended
September 30,		 For the nine months ended
September 30,
 2017 2016 2017 2016
Cost of sales$1,591,621
 $1,655,130
 $4,838,449
 $4,835,667
Gross profit$295,070
 $268,044
 $835,911
 $765,893
Gross profit, as a percentage of revenues15.6% 13.9% 14.7% 13.7%
Our gross profit increased by $27.0 million for three months ended September 30, 2017remaining performance obligations at March 31, 2022 were $5.95 billion compared to the three months ended September 30, 2016. Gross profit increased by $70.0 million for the nine months ended September 30, 2017$5.60 billion at December 31, 2021 and $4.78 billion at March 31, 2021. The increase in remaining performance obligations at March 31, 2022, when compared to the nine months ended September 30, 2016. Our gross profit marginDecember 31, 2021, was 15.6% and 13.9% for the three months ended September 30, 2017 and 2016, respectively. Gross profit margin was 14.7% and 13.7% for the nine months ended September 30, 2017 and 2016, respectively. Gross profit and gross profit margin for both periods were favorably impacted by improved operatingprimarily attributable to an increase in remaining performance obligations within all of our domestic segments, except forreportable segments. Most notably, we experienced an increase in remaining performance obligations within: (a) our United States industrial services segment. The Company’s gross profit and gross profit margin for the three and nine months ended September 30, 2016 were negatively impacted by $6.9 million and $17.4 million, respectively, of losses incurred on a transportation construction project within our United States electrical construction and facilities services segment, which resulted in a 0.3% negative impact on the Company’s gross profit margin for both prior year periods. In addition, gross profit and gross profit margin within our United States mechanical construction and facilities services segment for the nine months ended September 30, 2017 were favorably impactedsegments, driven by the recoveryaward of various construction projects within: (i) the commercial market sector, inclusive of certain contract costs previously disputed on a project that was completed in 2016, resulting in $18.1 million of gross profittelecommunications and a 0.2% favorable impact onsemiconductor projects, and (ii) the Company’s gross profit margin.
Selling, generalinstitutional market sector, and administrative expenses
The following table presents our selling, general and administrative expenses and SG&A margin (selling, general and administrative expenses as a percentage of revenues) (in thousands, except for percentages):
 For the three months ended
September 30,		 For the nine months ended
September 30,
 2017 2016 2017 2016
Selling, general and administrative expenses$188,565
 $181,441
 $552,903
 $530,654
Selling, general and administrative expenses, as a percentage of revenues10.0% 9.4% 9.7% 9.5%
Our selling, general and administrative expenses for the three months ended September 30, 2017 increased by $7.1 million to $188.6 million compared to $181.4 million for the three months ended September 30, 2016. Selling, general and administrative expenses for the nine months ended September 30, 2017 increased by $22.2 million to $552.9 million compared to $530.7 million for the nine months ended September 30, 2016. The increase in selling, general and administrative expenses for the three and nine months ended September 30, 2017 included $3.8 million and $20.0 million, respectively, of incremental expenses directly related to companies acquired in 2017 and 2016, including amortization expense attributable to identifiable intangible assets of $0.7 million and $3.1 million, respectively. In addition to the impact of acquisitions, selling, general and administrative expenses increased in both periods due to: (a) an increase in salaries, primarily within our United States mechanical construction and facilities segment, partially as a result of an increase in headcount due to higher revenues than in the same prior year periods, (b) an increase in the provision for doubtful accounts, primarily within our United States building services segment given increased project opportunities within its mobile mechanical services division and (c) an increase in medical insurance costs. Thesethe award of several facilities maintenance contracts within its commercial site-based services division. The increases within our United States construction segments were partially offset by lower incentive compensation expense for both periods partiallya reduction in remaining performance obligations from the manufacturing and water and wastewater market sectors due to the lower projected annualprogression on several projects within such market sectors during the first quarter of 2022.


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Liquidity and Capital Resources    
The following section discusses our principal liquidity and capital resources, as well as our primary liquidity requirements and sources and uses of cash.
We are focused on the efficient conversion of operating resultsincome into cash to provide for the Company’s material cash requirements, including working capital needs, investment in our growth strategies through business acquisitions and capital expenditures, satisfaction of contractual commitments, including principal and interest payments on our outstanding indebtedness, and shareholder return through dividend payments and share repurchases. We strive to maintain a balanced approach to capital allocation in order to achieve growth, deliver value, and minimize risk.
Management monitors financial markets and overall economic conditions for factors that may affect our liquidity and capital resources and adjusts our capital allocation strategy as necessary. Negative macroeconomic trends could have an adverse effect on future liquidity if we experience delays in the payment of outstanding receivables beyond normal payment terms, an increase in credit losses, or significant increases in the price of commodities or the materials and equipment utilized for our United States industrial services segment than in the same prior year period, which resulted in decreased accruals for this segment’s incentive compensation plans.project and service work, beyond those experienced to date. In addition, selling, generalduring economic downturns, there have typically been fewer small discretionary projects from the private sector and administrative expenses forour competitors have aggressively bid larger long-term infrastructure and public sector contracts. Our liquidity is also impacted by: (a) the nine months ended September 30, 2016 included $3.8 milliontype and length of transaction costs associated withconstruction contracts in place, as performance of long duration contracts typically requires greater amounts of working capital, (b) the acquisitionlevel of Ardent. Selling, general and administrative expenses as a percentage of revenues were 10.0% and 9.7% for the three and nine months ended September 30, 2017, respectively, compared to 9.4% and 9.5% for the three and nine months ended September 30, 2016, respectively. The increase in SG&A margin for the three months ended September 30, 2017 was due to: (a) unabsorbed overhead coststurnaround activities within our United States industrial services segment, dueas such projects are billed in arrears pursuant to contractual terms that are standard within the deferralindustry, and (c) the billing terms of our maintenance contracts, including those within our United States and United Kingdom building services segments. While we strive to negotiate favorable billing terms, which allow us to invoice in advance of costs incurred on certain turnaround activity as a result of Hurricane Harvey and (b) an increase in both the provision for doubtful accounts and medical insurance costs as discussed above.our contracts, there can be no assurance that such terms will be agreed to by our customers.



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Restructuring expenses    
Restructuring expenses, primarily relating to employee severance obligations, were less than $0.1 million and $1.0 million for the three and nine months ended September 30, 2017, respectively, and $0.5 million and $1.3 million for the three and nine months ended September 30, 2016, respectively. As of September 30, 2017, the balanceMarch 31, 2022, we had cash and cash equivalents, excluding restricted cash, of these restructuring obligations yet to be paid was less than $0.1$514.5 million, which are maintained in highly liquid investments with original maturity dates of three months or less. Both our short-term and is expected to be paid during the remainder of 2017. No material expenses in connection with restructuring from continuing operationslong-term liquidity requirements are expected to be incurred duringmet through our cash and cash equivalent balances, cash generated from our operations, and, if necessary, the remainderborrowing capacity under our revolving credit facility. Our credit agreement provides for a $1.30 billion revolving credit facility, for which there is $1.23 billion of 2017.available capacity as of March 31, 2022. Refer to Note 7 - Debt of the notes to consolidated financial statements for further information regarding our credit agreement. Based upon our current credit rating and financial position, we can also reasonably expect to be able to secure long-term debt financing if required to achieve our strategic objectives; however, no assurances can be made that such debt financing will be available on favorable terms. We believe that we have sufficient financial resources available to meet our short-term and foreseeable long-term liquidity requirements.
Operating incomeCash Flows
The following tables presenttable presents a summary of our operating, income (loss)investing, and operating income (loss) as a percentage of segment revenues from unrelated entitiesfinancing cash flows (in thousands, except for percentages)thousands):
 For the three months ended
March 31,
 20222021
Net cash used in operating activities$(95,814)$(88,989)
Net cash used in investing activities$(13,953)$(31,764)
Net cash used in financing activities$(193,513)$(23,938)
Decrease in cash, cash equivalents, and restricted cash$(306,699)$(143,805)
 For the three months ended September 30,
 2017 
% of
Segment
Revenues
 2016 
% of
Segment
Revenues
Operating income (loss):       
United States electrical construction and facilities services$46,583
 10.2 % $30,927
 6.7%
United States mechanical construction and facilities services57,484
 7.6 % 38,890
 5.6%
United States building services25,981
 5.9 % 23,125
 5.0%
United States industrial services(4,844) (3.3)% 14,586
 6.1%
Total United States operations125,204
 7.0 % 107,528
 5.8%
United Kingdom building services3,933
 4.6 % 2,591
 3.5%
Corporate administration(22,632) —
 (23,516) —
Restructuring expenses(46) —
 (539) —
Total worldwide operations106,459
 5.6 % 86,064
 4.5%
Other corporate items:       
Interest expense(3,324)   (3,479)  
Interest income277
   161
  
Income from continuing operations before income taxes$103,412
   $82,746
  
 For the nine months ended September 30,
 2017 
% of
Segment
Revenues
 2016 
% of
Segment
Revenues
Operating income (loss):       
United States electrical construction and facilities services$109,735
 8.1% $70,645
 5.8%
United States mechanical construction and facilities services150,971
 6.9% 100,607
 5.2%
United States building services60,375
 4.6% 55,658
 4.1%
United States industrial services16,573
 2.8% 66,600
 8.0%
Total United States operations337,654
 6.2% 293,510
 5.5%
United Kingdom building services9,109
 3.7% 9,160
 3.6%
Corporate administration(63,755) —
 (67,431) —
Restructuring expenses(954) —
 (1,271) —
Total worldwide operations282,054
 5.0% 233,968
 4.2%
Other corporate items:       
Interest expense(9,464)   (8,973)  
Interest income607
   518
  
Income from continuing operations before income taxes$273,197
   $225,513
  
As described below in more detail, operating income was $106.5 million and $282.1 million forDuring the three and nine months ended September 30, 2017, respectively, comparedMarch 31, 2022, our cash balance, including cash equivalents and restricted cash, decreased by approximately $306.7 million from $822.6 million at December 31, 2021 to $86.1$515.9 million at March 31, 2022. Changes in our cash position from December 31, 2021 to March 31, 2022 are described in further detail below.
Operating Activities – Operating cash flows generally represent our net income as adjusted for certain non-cash items and $234.0 million for the threechanges in assets and nine months ended September 30, 2016, respectively. Operating margin was 5.6% and 5.0% for the three and nine months ended September 30, 2017, respectively, compared to 4.5% and 4.2% for the three and nine months ended September 30, 2016, respectively. Operating income and operating margin for the nine months ended September 30, 2017 benefited from the recovery of certain contract costs previously

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disputed on a project completed in 2016 within our United States mechanical construction and facilities services segment, which resulted in a 0.3% favorable impact on the Company’s operating margin.
Operating income of our United States electrical construction and facilities services segment for the three and nine months ended September 30, 2017 was $46.6 million and $109.7 million, respectively, compared to operating income of $30.9 million and $70.6 million for the three and nine months ended September 30, 2016, respectively. The increaseliabilities. Net cash used in operating income for both periods was attributable to an increase in gross profit from: (a) the transportation market sector, due to large project activity, (b) the commercial market sector, primarily as a result of work performed on numerous telecommunication construction projects, and (c) construction projects within the institutional market sector. In addition, the results for the three and nine months ended September 30, 2016 included losses of $6.9 million and $17.4 million, respectively, incurred on a construction project in the Northeastern United States. The increase in operating margin for both 2017 periods was attributable to improved operating performance, partially as a result of increased gross profit margin from numerous construction projects within the commercial and transportation market sectors. Operating margin for the prior year periods was negatively impacted by 1.4% and 1.3% for the three and nine months ended September 30, 2016, respectively, as a result of the losses incurred on the construction project discussed above.
Our United States mechanical construction and facilities services segment operating incomeactivities for the three months ended September 30, 2017March 31, 2022 was $57.5approximately $95.8 million an $18.6 million increase compared to approximately $89.0 million of net cash used in operating income of $38.9 millionactivities for the three months ended September 30, 2016. Operating income for the nine months ended September 30, 2017 was $151.0 million, a $50.4 million increase compared to operating income of $100.6 million for the nine months ended September 30, 2016. The increase in operating income for both periods was attributable to an increase in gross profit from the majority of the market sectors in which we operate. Additionally, this segment’s operating income for the nine months ended September 30, 2017 benefited from the recovery of certain contract costs previously disputed on a project completed in 2016, which resulted in $18.1 million of gross profit. A company acquired in 2017 contributed incremental operating income of $0.1 million and $1.3 million, net of $2.0 million and $6.1 million of amortization expense associated with identifiable intangible assets, for the three and nine months ended September 30, 2017, respectively. The increase in operating margin for both periods was attributable to an increase in gross profit margin. The recovery of the disputed contract costs discussed above favorably impacted this segment’s operating margin by 0.7% for the nine months ended September 30, 2017.
Operating income ofMarch 31, 2021. Historically, our United States building services segment for the three months ended September 30, 2017 increased by $2.9 million compared to operating income for the three months ended September 30, 2016, and its operating income for the nine months ended September 30, 2017 increased by $4.7 million compared to the nine months ended September 30, 2016. The increase in operating income for the three months ended September 30, 2017 was primarily attributable to increases in operating income from: (a) our energy services operations and (b) our commercial site-based services operations, partially as a result of decreased selling, general and administrative expenses due to restructuring activities. The increase in operating income for the nine months ended September 30, 2017 was due to increases in operating income from: (a) our mobile mechanical services operations, as a result of increases in gross profit from project, service and control activities, and (b) our energy services operations. The increase in operating income for our energy services operations for both periods primarily resulted from improved operating performance, as the results for the three months ended September 30, 2016 included a loss incurred on a large project. Additionally, companies acquired in 2017 and 2016 within our mobile mechanical services operations, contributed incremental operating income of $1.2 million and $2.6 million, net of $0.3 million and $1.2 million of amortization expense associated with identifiable intangible assets, for the three and nine months ended September 30, 2017, respectively. The increase in operating income for the nine months ended September 30, 2017 was partially offset by a decrease in gross profit from our commercial site-based services operations partially due to a reduction in snow removal activities. The increase in operating margin for both periods was attributable to an increase in gross profit margin.
Our United States industrial services segment operating loss for the three months ended September 30, 2017 was $4.8 million compared to operating income of $14.6 million for the three months ended September 30, 2016. Operating income for the nine months ended September 30, 2017 was $16.6 million, a $50.0 million decrease compared to operating income of $66.6 million for the nine months ended September 30, 2016. This segment’s results for the three months ended September 30, 2017 were negatively impacted by Hurricane Harvey, which resulted in the deferral of, and may lead to the potential cancellation of, previously scheduled turnaround projects. In addition, the decrease in operating income for both periods was attributable to a decrease in gross profit from specialty services offerings within our field services operations as a result of reduced large project activity. The decrease in operating margin for both periods was attributable to a decrease in gross profit margin and an increase in the ratio of selling, general and administrative expenses to revenues. The increase in SG&A margin for the three months ended September 30, 2017 was primarily the result of unabsorbed overhead costs as a result of the project deferrals due to Hurricane Harvey and lower specialty services revenues.
Our United Kingdom building services segment operating income was $3.9 million and $9.1 million for the three and nine months ended September 30, 2017, respectively, compared to operating income of $2.6 million and $9.2 million for the three and

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nine months ended September 30, 2016, respectively. This segment’s results included a decrease in operating income of $0.7 million for the nine months ended September 30, 2017 relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar. Excluding the impact of exchange rates, operating income increased in both periods, primarily due to an increase in gross profit from new contract awards, partially offset by a decrease in gross profit from project activity. The increase in operating margin for the three months ended September 30, 2017 was attributable to an increase in gross profit margin and a decrease in SG&A margin.
Our corporate administration operating loss for the three months ended September 30, 2017 was $22.6 million compared to $23.5 million for the three months ended September 30, 2016. Our corporate administration operating loss for the nine months ended September 30, 2017 was $63.8 million compared to $67.4 million for the nine months ended September 30, 2016. The decrease in corporate administration expenses for the nine months ended September 30, 2017 was primarily due to a decrease in other professional fees, as the same prior year period included $3.8 million of transaction costs associated with the acquisition of Ardent.
Interest expense for the three months ended September 30, 2017 and 2016 was $3.3 million and $3.5 million, respectively. Interest expense for the nine months ended September 30, 2017 and 2016 was $9.5 million and $9.0 million, respectively.The increase in interest expense for the nine months ended September 30, 2017 was primarily due to increased outstanding borrowingsworking capital needs are greater in the first quarter of 2017 andeach year, resulting in a higher United States dollar LIBOR rate. Interest income foruse of cash to fund our operations during such period, as evidenced by the fairly consistent use of cash during each of the three months ended September 30, 2017March 31, 2022 and 2016 was $0.3 million and $0.2 million, respectively. Interest income2021. As the year progresses, we anticipate the generation of positive operating cash flow.
Investing Activities – Investing cash flows consist primarily of payments for the nine months ended September 30, 2017acquisition of businesses, capital expenditures, and 2016 was $0.6 millionproceeds from the sale or disposal of property, plant, and $0.5 million, respectively.
For the three months ended September 30, 2017 and 2016, our income tax provision from continuing operations was $38.6 million and $30.8 million, respectively, based on an effective income tax rate, before discrete items and less amounts attributable to noncontrolling interests, of 37.1% and 38.1%, respectively. The actual income tax rate on income from continuing operations, less amounts attributable to noncontrolling interests, for the three months ended September 30, 2017 and 2016, inclusive of discrete items, was 37.3% and 37.2%, respectively. For the nine months ended September 30, 2017 and 2016, our income tax provision from continuing operations was $98.5 million and $82.7 million, respectively, based on effective income tax rates, before discrete items and less amounts attributable to noncontrolling interests, of 37.4% and 37.8%, respectively. The actual income tax rates on income from continuing operations, less amounts attributable to noncontrolling interests, for the nine months ended September 30, 2017 and 2016, inclusive of discrete items, were 36.0% and 36.7%, respectively. The increase in the 2017 income tax provision was primarily due to increased income from continuing operations. The decrease in the 2017 actual income tax rate on income from continuing operations was due to the net impact of discrete items, inclusive of the reversal of reserves for previously unrecognized income tax benefits in the first quarter of 2017.
Discontinued operations
Due to a historical pattern of losses in the construction operations of our United Kingdom segment and our negative assessment of construction market conditions in the United Kingdom for the foreseeable future, we ceased construction operations in the United Kingdom during the third quarter of 2014. The results of the construction operations of our United Kingdom segment for all periods are presented in the Condensed Consolidated Financial Statements as discontinued operations.
Liquidity and Capital Resources        
The following table presents our net cash provided by (used in) operating activities, investing activities and financing activities (in thousands):
 For the nine months ended
September 30,
 2017 2016
Net cash provided by operating activities$238,284
 $128,924
Net cash used in investing activities$(106,712) $(260,339)
Net cash (used in) provided by financing activities$(118,624) $154,341
Effect of exchange rate changes on cash and cash equivalents$2,931
 $(5,199)
Our consolidated cash balance increased by approximately $15.9 million from $464.6 million at December 31, 2016 to $480.5 million at September 30, 2017. Net cash provided by operating activities for the nine months ended September 30, 2017 was $238.3 million compared to net cash provided by operating activities of $128.9 million for the nine months ended September 30, 2016. The increase in cash provided by operating activities was primarily due to a $32.7 million increase in net income and improved cash flows from accounts receivable.equipment. Net cash used in investing activities was $106.7 million for the ninethree months ended September 30, 2017 compared to net cash used in investing activities of $260.3 million for the nine months ended September 30, 2016. The decrease in net cash used in investing activities was primarily due to a reduction in payments for acquisitions of

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businesses. Net cash flows from financing activities for the nine months ended September 30, 2017March 31, 2022 decreased by approximately $273.0$17.8 million compared to the ninethree months ended September March 31, 2021 due to a decrease in payments for business acquisitions, partially offset by higher capital expenditures.
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Financing Activities – Financing cash flows consist primarily as a result of borrowingsthe issuance and repayment of $220.0 million under our revolving credit facility inshort-term and long-term debt, repurchases of common stock, payment of dividends to stockholders, and the prior year.issuance of common stock through certain equity plans. Net cash used in financing activities for the ninethree months ended September 30, 2017March 31, 2022 was primarily$193.5 million compared to net cash used in financing activities for the three months ended March 31, 2021 of $23.9 million. The $169.6 million increase in cash used in financing activities was almost entirely due to an increase in funds used for the repurchase of our common stock. The timing of repurchases is at management’s discretion subject to securities laws and other legal requirements and will depend upon several factors, including market and business conditions, future liquidity, share price, and share availability, among others. The repurchase program has been and will be funded from our operations. For additional detail regarding our share repurchase program, refer to Note 10 - Common Stock of the notes to consolidated financial statements.
We currently pay a regular quarterly dividend of $0.13 per share. For the three months ended March 31, 2022 and 2021, cash payments related to dividends were $6.9 million and $7.1 million, respectively. Our credit agreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of such agreement currently materially limit our ability to pay a quarterly dividend of $0.13 per share for the foreseeable future.
Material Cash flowsRequirements from discontinued operationsContractual and Other Obligations
As of March 31, 2022, our short-term and long-term material cash requirements for known contractual and other obligations were immaterialas follows:
Outstanding Debt and Interest Payments – As of March 31, 2022, the amount outstanding under our term loan was $256.7 million. Based on our outstanding balance, we are required to make annual principal payments of $13.9 million on December 31 of each year until maturity. Any remaining unpaid principal is due on March 2, 2025, when the credit agreement governing our term loan expires. We have no direct borrowings outstanding under our revolving credit facility. In addition to annual principal payments, we are required to make quarterly interest payments on our outstanding indebtedness. Future interest payments will be determined based on prevailing interest rates during that time. Refer to Note 7 - Debt of the notes to consolidated financial statements for further detail of our debt obligations, including our term loan and revolving credit facility.
Operating and Finance Leases – In the normal course of business, we lease real estate, vehicles, and equipment under various arrangements which are classified as either operating or finance leases. Future payments for such leases, excluding leases with initial terms of one year or less, were $322.6 million at March 31, 2022, with $71.3 million payable within the next 12 months.
Open Purchase Obligations – As of March 31, 2022, we had $1.92 billion of open purchase obligations, of which payments totaling approximately $1.67 billion are expected to become due within the next 12 months. These obligations represent open purchase orders to suppliers and subcontractors related to our construction and services contracts. These purchase orders are not reflected in the Consolidated Balance Sheets and are not expected to significantly affectimpact future liquidity.liquidity as amounts should be recovered through customer billings.
The following is a summary of material contractual obligationsInsurance Obligations – As described in further detail in Note 12 - Commitments and other commercial commitments (in millions):
    Payments Due by Period
Contractual Obligations Total 
Less
than
1 year
 
1-3
years
 
3-5
years
 
After
5 years
Revolving credit facility (including interest at 2.24%) (1)
 $135.9
 $2.8
 $5.7
 $127.4
 $—
Term loan (including interest at 2.24%) (1)
 311.4
 21.6
 42.2
 247.6
 —
Capital lease obligations 5.1
 1.5
 3.0
 0.6
 —
Operating leases 293.6
 67.0
 111.0
 67.1
 48.5
Open purchase obligations (2)
 1,059.7
 892.8
 166.2
 0.7
 —
Other long-term obligations, including current portion (3)
 416.9
 64.5
 342.5
 9.9
 —
Liabilities related to uncertain income tax positions (4)
 2.1
 —
 —
 —
 2.1
Total Contractual Obligations $2,224.7
 $1,050.2
 $670.6
 $453.3
 $50.6
           
    Amount of Commitment Expiration by Period
Other Commercial Commitments 
Total
Committed
 
Less
than 1
year
 
1-3
years
 
3-5
years
 
After
5 years
Letters of credit $112.1
 $112.1
 $—
 $—
 $—
_________
(1)On August 3, 2016, we entered into a $900.0 million revolving credit facility (the “2016 Revolving Credit Facility”) and a $400.0 million term loan (the “2016 Term Loan”) (collectively referred to as the “2016 Credit Agreement”). The proceeds of the 2016 Term Loan were used to repay amounts drawn under our prior credit agreement. As of September 30, 2017, the amount outstanding under the 2016 Term Loan was $288.6 million. As of September 30, 2017, there were borrowings outstanding of $125.0 million under the 2016 Revolving Credit Facility.
(2)Represents open purchase orders for material and subcontracting costs related to construction and services contracts. These purchase orders are not reflected in EMCOR’s Condensed Consolidated Balance Sheets and should not impact future cash flows, as amounts should be recovered through customer billings.
(3)Represents primarily insurance related liabilities and liabilities for deferred income taxes, incentive compensation and deferred compensation, classified as other long-term liabilities in the Condensed Consolidated Balance Sheets. Cash payments for insurance and deferred compensation related liabilities may be payable beyond three years, but it is not practical to estimate these payments; therefore, these liabilities are reflected in the 1-3 years payment period. We provide funding to our post retirement plans based on at least the minimum funding required by applicable regulations. In determining the minimum required funding, we utilize current actuarial assumptions and exchange rates to forecast 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.
(4)Includes $0.2 million of accrued interest.

Until August 3, 2016, we had a credit agreement dated as of November 25, 2013 (as amended, the “2013 Credit Agreement”), which provided for a revolving credit facility of $750.0 million (the “2013 Revolving Credit Facility”) and a term loan of $350.0 million (the “2013 Term Loan”). On August 3, 2016, we amended and restated the 2013 Credit Agreement to provide for a $900.0 million revolving credit facility (the “2016 Revolving Credit Facility”) and a $400.0 million term loan (the “2016 Term Loan”) (collectively referred to as the “2016 Credit Agreement”) expiring August 3, 2021. The proceedsContingencies of the 2016 Term Loannotes to consolidated financial statements, we have loss payment deductibles and/or self-insured retentions for certain insurance matters. As of March 31, 2022, our insurance liabilities, net of estimated recoveries, were used$186.9 million. Of this net amount, approximately $37.2 million is estimated to repaybe payable within the next 12 months. Due to many uncertainties inherent in resolving these matters, it is not practical to estimate these payments beyond such period.
Retirement Plan Obligations – As of March 31, 2022, expected future payments relating to our defined benefit post retirement plans were approximately $4.5 million per year. We provide funding to our post retirement plans based on at least the minimum funding required by applicable regulations. In determining the minimum funding required, we utilize current actuarial assumptions and exchange rates to forecast amounts drawn underthat may be payable. In our judgment, minimum funding estimates cannot be reliably estimated beyond a five-year time horizon. Refer to Note 11 - Retirement Plans of the 2013 Term Loan, as well as anotes to consolidated financial statements for further information about our post retirement plans.
Deferred Payroll Taxes – The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) allowed U.S. companies to defer the employer’s portion of the outstanding balance under the 2013 Revolving Credit Facility. We may increase the 2016 Revolving Credit Facility to $1.3 billion if additional lenders are identified and/or existing lenders are willing to increase their current commitments. We may allocate up to $300.0 million of available capacity under the 2016 Revolving Credit Facility to letters of credit for our account or for the account of any of our subsidiaries. Obligations under the 2016 Credit Agreement are guaranteed by most of our direct and indirect subsidiaries and are secured by substantially all of our assets. The 2016 Credit Agreement contains 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. We were in compliance with all such covenants as of September 30, 2017social security taxes between March 27, 2020 and December 31, 2016. A commitment fee2020. Our first installment of these deferred social security taxes, totaling approximately $51 million, was paid in the fourth quarter of 2021 and our second installment of approximately $51 million is expected to be paid in the fourth quarter of 2022.
Contingent Consideration Liabilities – We have incurred liabilities related to contingent consideration arrangements associated with certain acquisitions, payable onin the average daily unusedevent discrete performance objectives are achieved by the acquired businesses during designated post-acquisition periods. The aggregate amount of these liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, changes in the 2016 Revolving Credit Facility, which ranges from 0.15% to 0.30%,fair value of amounts owed based on certain financial tests. The feeperformance during such post-acquisition periods, and accretion in present value. As of March 31, 2022, the present value of expected future payments relating to these contingent consideration arrangements was 0.15% of$11.2 million. Of this amount, $5.1 million is estimated as being payable within the unused amount as of September 30, 2017. Borrowings under

next 12 months, with the remainder due substantially during the following 12 months.
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In addition, material cash requirements for other potential obligations, for which we cannot reasonably estimate future payments, include the following:
Legal Proceedings – We are involved in several legal proceedings in which damages and claims have been asserted against us. While litigation is subject to many uncertainties and the 2016 Credit Agreement bear interest at (1)outcome of litigation is not predictable with assurance, we do not believe that any such matters will have a base rate plus a marginmaterial adverse effect on our financial position, results of 0.00%operations, or liquidity. Refer to 0.75%, based on certain financial tests, or (2) United States dollar LIBOR (1.24% at September 30, 2017) plus 1.00% to 1.75%, based on certain financial tests. The base rate is determined by the greater of (a) the prime commercial lending rate announced by Bank of Montreal from time to time (4.25% at September 30, 2017), (b) the federal funds effective rate, plus ½ of 1.00%, (c) the daily one month LIBOR rate, plus 1.00%, or (d) 0.00%. The interest rate in effect at September 30, 2017 was 2.24%. Fees for letters of credit issued under the 2016 Revolving Credit Facility range from 1.00% to 1.75%Note 12 - Commitments and Contingencies of the respective face amountsnotes to consolidated financial statements for more information regarding legal proceedings.
Multiemployer Benefit Plans – In addition to our Company sponsored benefit plans, we participate in certain multiemployer pension and other post retirement plans. The cost of outstanding letters of credit and are computed based on certain financial tests. We capitalized an additional $3.0 million of debt issuance costs associatedthese plans is equal to the annual required contributions determined in accordance with the 2016 Credit Agreement. Debt issuance costsprovisions of negotiated collective bargaining agreements. Our future contributions to the multiemployer plans are amortized over the lifedependent upon a number of the agreement and are included as partfactors. Amounts of interest expense. The 2016 Term Loan required usfuture contributions that we would be contractually obligated to make principal payments of $5.0 million on the last day of March, June, Septemberpursuant to these plans cannot be reasonably estimated.
Off-Balance Sheet Arrangements and December of each year, which commenced with the calendar quarter ended December 31, 2016. On December 30, 2016, we made a payment of $100.0 million, of which $5.0 million represented our required quarterly payment and $95.0 million represented a prepayment of outstanding principal. Such prepayment was applied against the remaining mandatory quarterly payments on a ratable basis. As a result, commencing with the calendar quarter ended March 31, 2017, our required quarterly payment has been reduced to $3.8 million. All unpaid principal and interest is due on August 3, 2021. As of September 30, 2017 and December 31, 2016, the balance of the 2016 Term Loan was $288.6 million and $300.0 million, respectively. As of September 30, 2017 and December 31, 2016, we had approximately $111.8 million and $91.9 million of letters of credit outstanding, respectively. There were $125.0 million in borrowings outstanding under the 2016 Revolving Credit Facility as of September 30, 2017 and December 31, 2016.Other Commercial Commitments
The terms of our construction contracts frequently require that we obtain from surety companies, (“Surety Companies”) and provide to our customers, payment and performancesurety bonds (“Surety Bonds”) as a condition to the award of such contracts. The Surety BondsThese surety bonds are issued in return for premiums, which vary depending on the size and type of the bond, and secure our payment and performance obligations under such contracts, and wecontracts. We have agreed to indemnify the Surety Companiessurety companies for amounts, if any, paid by them in respect of Surety Bondssurety bonds issued on our behalf. In addition, atAs of March 31, 2022, based on the request of labor unions representing certainpercentage-of-completion of our employees, projects covered by surety bonds, our aggregate estimated exposure, assuming defaults on all our then existing contractual obligations, was approximately $1.5 billion, which represents approximately 25% of our total remaining performance obligations.
Surety Bonds are sometimes providedbonds expire at various times ranging from final completion of a project to secure obligations for wagesa period extending beyond contract completion in certain circumstances. Such amounts can also fluctuate from period to period based upon the mix and benefits payable to or for such employees. Publiclevel of our bonded operating activity. For example, public sector contracts require Surety Bondssurety bonds more frequently than private sector contracts and, accordingly, our bonding requirements typically increase as the amount of our public sector work increases. Our estimated maximum exposure as it relates to the value of the surety bonds outstanding is lowered on each bonded project as the cost to complete is reduced, and each commitment under a surety bond generally extinguishes concurrently with the expiration of its related contractual obligation.
Surety bonds are sometimes provided to secure obligations for wages and benefits payable to or for certain of our employees, at the request of labor unions representing such employees. In addition, surety bonds or letters of credit may be issued as collateral for certain insurance obligations. As of September 30, 2017, based onMarch 31, 2022, we satisfied approximately $48.1 million and $71.2 million of the percentage-of-completioncollateral requirements of our projects coveredinsurance programs by Surety Bonds,utilizing surety bonds and letters of credit, respectively. All such letters of credit were issued under our aggregate estimated exposure, assuming defaultsrevolving credit facility, therefore reducing the available capacity of such facility.
We are not aware of any losses in connection with surety bonds that have been posted on all our then existing contractual obligations, was approximately $1.1 billion. Surety Bonds are issued by Surety Companiesbehalf, and we do not expect to incur significant losses in return for premiums, which vary depending on the size and type of bond.foreseeable future.
From time to time, we discuss with our current and other Surety Bondsurety bond providers the amounts of Surety Bondssurety bonds that may be available to us based on our financial strength and the absence of any default by us on any Surety Bondsurety bond issued on our behalf and believe those amounts are currently adequate for our needs. However, if we experience changes in our bonding relationships or if there are adverse changes in the surety industry, we may (i)may: (a) seek to satisfy certain customer requests for Surety Bondssurety bonds by posting other forms of collateral in lieu of Surety Bonds,surety bonds, such as letters of credit, parent company guarantees, or cash, in order to convince customers to forego the requirement for Surety Bonds, (ii)surety bonds, (b) increase our activities in our business segmentsbusinesses that rarely require Surety Bonds, such as our building and industrial services segments,surety bonds, and/or (iii)(c) refrain from bidding for certain projects that require Surety Bonds. surety bonds.
There can be no assurance that we would be able to effectuate alternatives to providing Surety Bondssurety bonds to our customers or to obtain, on favorable terms, sufficient additional work that does not require Surety Bonds.surety bonds. Accordingly, if we were to experience a reduction in the availability of Surety Bonds, wesurety bonds could experiencehave a material adverse effect on our financial position, results of operations, and/or cash flows.
In the ordinary course of business, we, at times, guarantee obligations of our subsidiaries under certain contracts. Generally, we are liable under such an arrangement only if our subsidiary fails to perform its obligations under the contract. Historically, we have not incurred any substantial liabilities as a consequence of these guarantees.
We do not have any other material financial guarantees or off-balance sheet arrangements other than those disclosed herein.
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 material adverse effect on our financial position, results of operations or liquidity.
On September 26, 2011, our Board of Directors authorized us to repurchase up to $100.0 million of our outstanding common stock. On December 5, 2013, October 23, 2014 and October 28, 2015, our Board of Directors authorized us to repurchase up to an additional $100.0 million, $250.0 million and $200.0 million of our outstanding common stock, respectively. During 2017, we have repurchased approximately 1.4 million shares of our common stock for approximately $88.6 million. Since the inception of the repurchase programs through September 30, 2017, we have repurchased approximately 12.8 million shares of our common stock for approximately $573.0 million. As of September 30, 2017, there remained authorization for us to repurchase approximately $77.0 million of our shares. Subsequent to September 30, 2017, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our outstanding common stock. The repurchase programs have no expiration date and do not obligate


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the Company to acquire any particular amount of common stock and may be suspended, recommenced or discontinued at any time or from time to time without prior notice. We may repurchase our shares from time to time to the extent permitted by securities laws and other legal requirements, including provisions in our 2016 Credit Agreement placing limitations on such repurchases. The repurchase programs have been and will be funded from our operations.
We have paid quarterly dividends since October 25, 2011. We currently pay a regular quarterly dividend of $0.08 per share. Our 2016 Credit Agreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of such agreement currently materially limit our ability to pay a quarterly dividend of $0.08 per share for the foreseeable future. The payment of dividends has been and will be funded from our operations.
Our primary source of liquidity has been, and is expected to continue to be, cash generated by operating activities. We also maintain our 2016 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. Negative macroeconomic trends may have an adverse effect on liquidity. During economic downturns, there have typically been fewer small discretionary projects from the private sector, and our competitors have aggressively bid larger long-term infrastructure and public sector contracts. Short-term liquidity is also impacted by the type and length of construction contracts in place and large turnaround activities in our United States industrial services segment that are billed in arrears pursuant to contractual terms that are standard within the industry. 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, there can be no assurance that a net over-billed position can be maintained. Our net over-billings, defined as the balance sheet accounts “Billings in excess of costs and estimated earnings on uncompleted contracts” less “Cost and estimated earnings in excess of billings on uncompleted contracts”, were $396.8 million and $358.5 million as of September 30, 2017 and December 31, 2016, respectively.
Long-term liquidity requirements can be expected to be met initially through cash generated from operating activities and our 2016 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-residential construction services and for 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.
We believe that our current cash balances and our borrowing capacity available under our 2016 Revolving Credit Facility or other forms of financing available to us through borrowings, combined with cash expected to be generated from operations, will be sufficient to provide short-term and foreseeable long-term liquidity and meet our expected capital expenditure requirements.
Certain Insurance Matters
As of September 30, 2017 and December 31, 2016, we utilized approximately $111.4 million and $91.5 million, respectively, of letters of credit obtained under our 2016 Revolving Credit Facility as collateral for our insurance obligations.
New Accounting Pronouncements
We review new accounting standards to determine the expected financial impact, if any, that the adoption of such standards will have.have on our financial position and/or results of operations. See Part I. Item 1, “Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 2 - New Accounting Pronouncements”,Pronouncements of the notes to consolidated financial statements for further information regarding new accounting standards, including the anticipated dates of adoption and the effects on our consolidated financial position, results of operations, or liquidity.
Application of Critical Accounting Policies and Estimates
Our condensedThe preparation of our consolidated financial statements areis based on the application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are described further in Note 2 –- Summary of Significant Accounting Policies of the notes to consolidated financial statements included in Item 8 of our annual report on Form 10-K for the year ended December 31, 2016.2021. We base our estimates on historical experience, known or expected trends, third-party valuations, and various other assumptions that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. There have been no significant changes to our critical accounting policies or methods for the three months ended March 31, 2022. We believe that some ofthe following critical accounting policies govern the more critical judgment areassignificant judgments and estimates used in the applicationpreparation 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.


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statements.
Revenue Recognition for Long-term Constructionfrom Contracts and Services Contractswith Customers
We believeFor our most critical accounting policy is revenue recognition from long-term construction contracts, forrevenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we useincur costs on our contracts. Under the percentage-of-completion methodcost-to-cost measure of accounting. Percentage-of-completion accounting isprogress, the prescribed methodextent of accounting for long-term contracts in accordance with Accounting Standard Codification (“ASC”) Topic 605-35, “Revenue Recognition – Construction-Type and Production-Type Contracts”, and, accordingly, is the method used for revenue recognition within our industry. Percentage-of-completionprogress towards completion is measured principally bybased on the percentageratio of costs incurred to date for each contract to the total estimated total costs at completion of the performance obligation. For our unit price construction contracts, progress towards complete satisfaction is measured through an output method, such as the number of units produced or delivered, when our performance does not produce significant amounts of work in process or finished goods prior to complete satisfaction of such performance obligations.
For our services contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly and the customer receives and consumes the benefits of our performance throughout the contract term.
The timing of revenue recognition for the manufacturing of new build heat exchangers within our United States industrial services segment depends on the payment terms of the contract, as our performance does not create an asset with an alternative use to us. For those contracts for which we have a right to payment for performance completed to date at all times throughout our performance, inclusive of a cancellation, we recognize revenue over time. For these performance obligations, we use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. However, for those contracts for which we do not have a right, at all times, to payment for performance completed to date, we recognize revenue at the point in time when control is transferred to the customer. For bill-and-hold arrangements, revenue is recognized when the customer obtains control of the heat exchanger, which may be prior to shipping if certain recognition criteria are met.
For certain of our revenue streams, such as call-out repair and service work, outage services, refinery turnarounds, and specialty welding services that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date.
The nature of our contracts gives rise to several types of variable consideration, including pending change orders and claims; contract bonuses and incentive fees; and liquidated damages and penalties. We recognize revenue for such contract at completion. Certain ofvariable consideration when it is probable, in 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. Application of percentage-of-completion accounting resultsjudgment, that a significant future reversal in the recognitionamount of costs and estimated earnings in excess of billings on uncompleted contracts in the Condensed Consolidated Balance Sheets. Costs and estimated earnings in excess of billings on uncompleted contracts reflected in the Condensed Consolidated Balance Sheets arise when revenues have beencumulative revenue recognized but the amounts cannot be billed under the terms of contracts. Such amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract.
Costs and estimated earnings in excess of billings on uncompleted contracts also include amounts we seek orcontract will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders in dispute or unapproved as to both scope and price or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Such amounts are recorded at estimated net realizable value and take into account factors that may affect our ability to bill and ultimately collect unbilled revenues. The profit associated with claim amounts is not recognized untiloccur when the claim has been settled and payment has been received. During 2017, we recognized $18.1 million of gross profituncertainty associated with the recoveryvariable consideration is subsequently resolved. The Company estimates the amount of certain contract costs previously disputed on a project completedvariable consideration to be included in the prior year. There were no other material amounts recognized associated with claim settlements duringtransaction price utilizing one of two prescribed methods, depending on which method better predicts the periods presented. amount of consideration to which the entity will be entitled.


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Due to uncertainties inherent in the estimation process, as well as the significant judgment involved in determining variable consideration, it is possible that estimates employed in applying percentage-of-completion accounting,of costs to complete a performance obligation, and/or our estimates mayof transaction prices, will be revised as project work progresses. Application of percentage-of-completion accounting requires that the impact of revised estimates be reported prospectively in the condensed consolidated financial statements. In addition tonear-term. For those performance obligations for which revenue recognition for long-term construction contracts, we recognize revenues fromis recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, or changes in the estimate of services for maintenance, repair and retrofit work consistent with the performance of services, whichtransaction prices, are generallyrecognized on a pro-ratacumulative catch-up 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 uncompleted contracts are made in the period in which such lossesthe revisions to the estimates are determined. Duringmade.
Based on an evaluation of individual projects that had revisions to total estimated costs, which resulted in a reduction of profitability in excess of $1.0 million, our operating results were negatively impacted by approximately $10.0 million, during the three and nine months ended September 30, 2016, we incurred $6.9March 31, 2022. Of this amount, approximately $4.6 million and $17.4 million, respectively, of losses on a transportation projectwas recorded within our United States electrical construction and facilities services segment and approximately $5.4 million was recorded within our United States mechanical construction and facilities services segment. There were no changes in total estimated costs that had a significant impact on our operating results during the three months ended March 31, 2021.
Due to the significant judgments utilized in the estimation process described above, if subsequent actual results and/or updated assumptions, estimates, or projections related to our underlying project positions were to change from those utilized at March 31, 2022, it could result in a material impact to our results of operations. For example, a 50 basis point increase or decrease in the estimated gross profit margin on our uncompleted construction projects, in the aggregate, as a result of productivity issues attributablea revision in estimated costs to unfavorable job-site conditions. There were no other significant losses recognized duringcomplete a performance obligation or a revision in estimated transaction price, would have resulted in an increase or decrease to operating income of approximately $70 million for the three and nine months ended September 30, 2017 and 2016.March 31, 2022.
See Note 3 - Revenue from Contracts with Customers of the notes to consolidated financial statements for further disclosure regarding revenue recognition.
Accounts Receivable and Allowance for Credit Losses
WeAccounts receivable are requiredrecognized in the period we deliver goods or provide services to estimate the collectibility of accounts receivable.our customers or when our right to consideration is unconditional. The Company maintains an allowance for credit losses to reduce outstanding receivables to their net realizable value. A considerable amount of judgment is required in assessing the likelihoodwhen determining expected credit losses. Estimates of realization of receivables. Relevant assessment factors include the creditworthiness of the customer, our prior collection history with the customer and related aging of the past due balances. At September 30, 2017 and December 31, 2016, our accounts receivable of $1,537.8 million and $1,495.4 million, respectively, included allowances for doubtful accounts of $16.9 million and $12.3 million, respectively. The increase in our allowance for doubtful accounts was due to an increase in our provision for doubtful accounts, partially offset by the write-off of previously reserved for accounts receivable. Specific accounts receivablesuch losses are evaluatedrecorded when we believe a customer, or group of customers, may not be able to meet itstheir financial obligations due to deterioration of itsin financial condition or credit rating. Factors relevant to our assessment include our prior collection history with our customers, the related aging of past due balances, projections of credit losses based on historical trends in credit quality indicators or past events, and forecasts of future economic conditions. In addition to monitoring delinquent accounts, management reviews the credit quality of its receivables by, among other things, obtaining credit ratings.ratings of significant customers, assessing economic and market conditions, and evaluating material changes to a customer’s business, cash flows, and financial condition.
At March 31, 2022 and December 31, 2021, our accounts receivable of $2,303.4 million and $2,204.5 million, respectively, were recorded net of allowances for credit losses of $23.0 million and $23.5 million, respectively. The decrease in our allowance for doubtful accounts requirementscredit losses was predominantly attributable to the write-off of specific amounts deemed unrecoverable. Allowances for credit losses are based on the best facts available and are re-evaluatedreassessed and adjusted on a regular basis as additional information is received.
Should anticipated collections fail to materialize, or if future economic conditions compare unfavorably to our forecasts, we could experience an increase in our allowances for credit losses. For example, if economic conditions were to significantly deteriorate, such as to those experienced during the last global financial crisis, the portion of our allowance for credit losses, which is estimated based on our historical credit loss experience, could increase by up to approximately $13.5 million.
Insurance Liabilities
We have loss payment deductibles for certain workers’ compensation, automobile liability, general liability, and property claims, have self-insured retentions for certain other casualty claims, and are self-insured for employee-related healthcare claims. In addition, we maintain a wholly-owned captive insurance subsidiary to manage certain of our insurance liabilities. Losses are recorded based upon estimates of our liability for claims incurred and for claims incurred but not reported. The liabilities are derived from known facts, historical trends, and industry averages, utilizing the assistance of an independent third-party actuary to determine the best estimate for the majority of these obligations. We believe the liabilities recognized on our balance sheetsthe Consolidated Balance Sheets for these obligations are adequate. However, such obligations are difficult to assess and estimate due to numerous factors, including severity of injury, determination of liability in proportion to other parties, timely reporting of occurrences, and effectiveness of safety and risk management programs. Therefore, if our actual experience differs from the assumptions and estimates used for recording the liabilities, adjustments may be required and will be recorded in the period that the experience becomes known. Our estimated net

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insurance liabilities for workers’ compensation, automobile liability, general
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liability, and property claims increased by $2.8$8.3 million for the nine months ended September 30, 2017at March 31, 2022 compared to the year ended December 31, 2016, primarily due to higher revenues, including the impact2021, partially as a result of acquired companies.greater potential exposures. If our estimated insurance liabilities for workers’ compensation, automobile liability, general liability, and property claims had increasedwere to increase by 10%, it would have resulted in $15.9$18.7 million of additional expense for the ninethree months ended September 30, 2017.March 31, 2022.
Income Taxes
WeAs of March 31, 2022 and December 31, 2021, we had net deferred income tax liabilities at September 30, 2017 and December 31, 2016of $110.9$51.1 million and $117.4$51.0 million, respectively, primarily resulting from differences between the carrying value and income tax basisbases of certain identifiable intangible assets, goodwill, and depreciable fixed assets, which will impact our taxable income in future periods.assets. Included within these net deferred income tax liabilities are $214.6 million and $212.3 million of deferred income tax assets. A valuation allowance is required when it is more likely than not that all or a portionassets as of a deferred income tax asset will not be realized. As of September 30, 2017March 31, 2022 and December 31, 2016, the2021, respectively. The total valuation allowance on deferred income tax assets related to state net operating carryforwards, was approximately $3.5 million.$2.5 million as of both March 31, 2022 and December 31, 2021. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on our taxable income, which has generally exceeded the amount of our net deferred income tax asset balance, as well as current projections of future taxable income, we have determined that it is more likely than not that our net deferred income tax assets will be realized. However, revisions to our forecasts or declining macroeconomic conditions could result in changes to our assessment of the realization of these deferred income tax assets.
Goodwill, and Identifiable Intangible Assets, and Other Long-Lived Assets
Goodwill
As of September 30, 2017,March 31, 2022 and December 31, 2021, we had $1,010.4goodwill of $891.5 million and $497.3$890.3 million,, respectively, of goodwill and net identifiable intangible assets (primarily consisting of our contract backlog, developed technology/vendor network, customer relationships, non-competition agreements and trade names), primarily arising out of the acquisition of companies. As of December 31, 2016, goodwill and net identifiable intangible assets were $979.6 million and $487.4 million, respectively. The changes to goodwill since December 31, 2016 were related to the acquisition of two companies in 2017 and a purchase price adjustment related to the Ardent acquisition. 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 –businesses. Goodwill and Other” (“ASC 350”) requires that goodwill and other identifiable intangible assets with indefinite useful livesis not be amortized but instead 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.
We testevaluated for impairment annually, or more frequently if events or circumstances indicate that the carrying amount of our goodwill at the reporting unit level. Ourmay be impaired. We have determined that our reporting units are consistent with the reportable segments identified in Note 13, “Segment Information”,14 - Segment Information of the notes to condensed consolidated financial statements. As of March 31, 2022, approximately 18.0% of our goodwill related to our United States electrical construction and facilities services segment, approximately 34.7% related to our United States mechanical construction and facilities services segment, approximately 34.5% related to our United States building services segment, and approximately 12.8% related to our United States industrial services segment.
Absent any earlier identified impairment indicators, we perform our annual goodwill impairment assessment on October 1 each fiscal year. Qualitative indicators that may trigger the need for interim quantitative impairment testing include, among others, a deterioration in macroeconomic conditions, declining financial performance, deterioration in the operational environment, or an expectation of selling or disposing of a portion of a reporting unit. Additionally, an interim impairment test may be triggered by a significant change in business climate, a loss of a significant customer, increased competition, or a sustained decrease in share price. In assessing whether our goodwill is impaired, we compare the fair value of the reporting unit determined based upon discounted estimated future cash flows, to theits carrying amount, including goodwill. If the fair value exceeds the carrying amount, no impairment loss is recognized. However, if the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is impaired and an impairment loss in the amount of the excess is recognized and charged to operations. No impairment
As of the date of our goodwill was recognized duringmost recent impairment test (October 1, 2021), the three and nine months ended September 30, 2017 and 2016.
Asfair values ofSeptember 30, 2017, we had $1,010.4 million of goodwill on our balance sheet and, of this amount, 38.1% relates to our United States industrial services segment, 25.3% relates to our United States building services segment, 24.2% relates to our United States mechanical construction and facilities services segment and 12.4% relates to our United States electrical construction and facilities services segment. As of the date of our latest impairment test, October 1, 2016, the carrying values of our United States industrial services segment, our United States building services segment, our United States mechanical construction and facilities services segment, and our United States electrical construction and facilities services segment were approximately $695.1 million, $462.4 million, $277.3 million and $268.8 million, respectively. The fair values of our United States industrial services segment, our United States building services segment, our United States mechanical construction and facilities services segment and our United States electrical construction and facilities services segment exceeded their carrying values by approximately $69.2 million, $268.6 million, $791.4 million, and $526.3 million, respectively. The weighted average cost of capital used in testing goodwill for impairment was 11.4%, 11.0% and 11.5% for our domestic construction segments, our United States building services segment, and our United States industrial services segment exceeded their carrying values by approximately $1,516.1 million, $2,772.7 million, $784.2 million, and $40.6 million, respectively.
In completing our annual impairment assessment, we determined the fair value of each of our reporting units using an income approach whereby fair value was calculated utilizing discounted estimated future cash flows, assuming a risk-adjusted industry weighted average cost of capital. The weighted average cost of capital used in our annual impairment testing was 10.4% for our United States construction segments and our United States building services segment, and 11.3% for our United States industrial services segment. These weighted average cost of capital estimates were developed with the assistance of an independent third-party valuation specialist and reflect the overall level of inherent risk within the respective reporting unit and the rate of return a market participant would expect to earn.
Our cash flow projections were derived from our most recent internal forecasts of anticipated revenue growth rates and operating margins, with cash flows beyond the discrete forecast period estimated using a terminal value calculation which incorporated historical and forecasted trends, an estimate of long-term growth rates, and assumptions about the future demand for our services. The perpetual growth rate used for our annual testing was 2.7%2.0% for all of our domestic segments.reporting units.
We also
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Due to the inherent uncertainties involved in making estimates, our assumptions may change in future periods. Estimates and assumptions made for purposes of our goodwill impairment testing may prove to be inaccurate predictions of the future, and other factors used in assessing fair value, such as the weighted average cost of capital, are outside the control of management. Unfavorable changes in certain of these key assumptions may affect future testing results. For example, keeping all other assumptions constant, a 50 basis point increase in the weighted average cost of capital would cause the estimated fair values of our United States electrical construction and facilities services segment, our United States mechanical construction and facilities services segment, our United States building services segment, and our United States industrial services segment to decrease by approximately $103.6 million, $185.5 million, $74.5 million, and $25.9 million, respectively. In addition, keeping all other assumptions constant, a 50 basis point reduction in the perpetual growth rate would cause the estimated fair values of our United States electrical construction and facilities services segment, our United States mechanical construction and facilities services segment, our United States building services segment, and our United States industrial services segment to decrease by approximately $52.4 million, $95.9 million, $35.8 million, and $9.5 million, respectively. Given the amounts by which the fair value exceeds the carrying value for each of our reporting units, the decreases in estimated fair values described above would not have significantly impacted the results of our impairment tests. Further, for each of our reporting units, other than our United States industrial services segment, a 10% decline in the estimated fair value of such reporting unit, due to other changes in our assumptions, including forecasted future cash flows, would not have significantly impacted the results of our impairment tests. In the case of our United States industrial services segment, however, a 10% decrease would cause the estimated fair value of this reporting unit to approximate its carrying value.
No impairment of our goodwill was recognized during the three months ended March 31, 2022 and 2021.
Identifiable Intangible Assets and Other Long-Lived Assets
As of March 31, 2022 and December 31, 2021, net identifiable intangible assets (primarily consisting of our customer relationships, subsidiary trade names, developed technology/vendor network, and contract backlog) arising out of the acquisition of businesses were $574.6 million and $589.4 million, respectively. The determination of related estimated useful lives for identifiable intangible assets and whether those assets are impaired involves significant judgments based upon short- and long-term projections of future performance. These forecasts reflect assumptions regarding anticipated macroeconomic conditions as well as our ability to successfully integrate acquired businesses.
Absent earlier indicators of impairment, we test for the impairment of subsidiary trade names that are not subject to amortization by calculatingon an annual basis (October 1). In performing this test, we calculate the fair value of each trade name using the “relief from royalty payments” methodology. This approach involves two steps: (a) estimating reasonable royalty rates for each trade name and (b) applying these royalty rates to a net revenue stream and discounting the resulting cash flows to determine fair value. This fair value is then compared with the carrying value of each trade name. If the carrying amount of the trade name is greater than the implied fair value of the trade name, an impairment in the amount of the excess is recognized and charged to operations. No
As of October 1, 2021, we performed our annual impairment testing of all subsidiary trade names that are not subject to amortization and determined that there was no impairment of these assets. In performing this impairment assessment, we considered the sensitivity of the reported amounts to the methods, assumptions, and estimates underlying our testing. For example, we performed sensitivity analyses and concluded that, individually, none of the following changes in estimates or assumptions would have significantly impacted the results of our testing or resulted in an impairment of our subsidiary trade names was recognized duringnames: (a) a 50 basis point increase in the three and nine months ended September 30, 2017 and 2016.

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each trade name.
In addition, we review for the impairment of other identifiable intangible assets that are being amortized as well as other long-lived assets whenever facts and circumstances indicate that their carrying values may not be fully recoverable. This test compares their carrying values to the undiscounted pre-tax cash flows expected to result from the use of the assets. If the assets are impaired, the assets are written down to their fair values, generally determined based on their discounted estimated future discounted cash flows.
No impairment of our other identifiable intangible assets or other long-lived assets was recognized during the three and nine months ended September 30, 2017March 31, 2022 and 2016.2021.
We have certain businesses, particularly within our United States industrial services segment, whose results are highly impacted by the demand for some of our offerings within the industrial and oil and gas markets. Future performance of this segment, along with a continued evaluation of the conditions of its end user markets, will be important to ongoing impairment assessments. Should this segment’s actual results suffer a decline or expected future results be revised downward, the risk of goodwill impairment or impairment of other identifiable intangible assets would increase.Other Considerations
Our development of the present value of future cash flow projections used inAs referenced above, impairment testing is based upon assumptions and estimates determined by management from reviews, among other things,a review of our operating results and business plans as well as forecasts of anticipated growth rates and margins, andamong other considerations. In addition, estimates of weighted average costcosts of capital. Thosecapital are developed with the assistance of an independent third-party valuation specialist. These assumptions and estimates canmay change in future periods, and other factors usedperiods. Significant adverse changes to external market conditions or our internal forecasts, if any, could result in assessingfuture impairment charges, particularly with respect to our United States industrial services segment given that the fair value are outside the control of management, such as interest rates. There can be no assurance that estimates and assumptions made for purposes of our goodwill and identifiable asset impairment testing will prove to be accurate predictions of the future. If our assumptions regarding future business performance 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 asset impairment charges in future periods.
Although we have not yet conducted our October 1, 2017 goodwill and other impairment tests, there have been no impairments recognized through the first nine months of 2017.this reporting unit more closely approximates its carrying value. It is not possible at this time to determine if any such future impairment charge wouldwill result or, if it does, whether such a charge would be material.material to our results of operations.
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ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We have not used any derivative financial instruments during the ninethree months ended September 30, 2017,March 31, 2022, including trading or speculating on changes in interest rates or commodity prices of materials used in our business.
We are exposed to market risk for changes in interest rates for borrowings under the 20162020 Credit Agreement, which provides for a revolving credit facility and a term loan. Borrowings under the 20162020 Credit Agreement bear interest at variable rates. For further information on our outstanding debt and borrowing rates, refer to Note 7 - Debt of the notes to consolidated financial statements. As of September 30, 2017,March 31, 2022, there were no direct borrowings of $125.0 million outstanding under the 20162020 Revolving Credit Facility andFacility; however, the balance of the 20162020 Term Loan was $288.6$256.7 million. This instrument bears interest at (1) a base rate plus a margin of 0.00% to 0.75%, based on certain financial tests, or (2) United States dollar LIBOR (1.24% at September 30, 2017) plus 1.00% to 1.75%, based on certain financial tests. The base rate is determined by the greater of (a) the prime commercial lending rate announced by Bank of Montreal from time to time (4.25% at September 30, 2017), (b) the federal funds effective rate, plus ½ of 1.00%, (c) the daily one month LIBOR rate, plus 1.00%, or (d) 0.00%. The interest rate in effect at September 30, 2017 was 2.24%. Based on the $413.6$256.7 million of borrowings outstanding under the 20162020 Credit Agreement, if overall interest rates were to increase by 100 basis points, interest expense, net of income taxes, would increase by approximately $2.5$1.9 million in the next twelve months. Conversely, if overall interest rates were to decrease by 100 basis points, interest expense, net of income taxes, would decrease by approximately $2.5$1.9 million in the next twelve months. Fees for letters of credit issued under the 2016 Revolving Credit Facility range from 1.00% to 1.75% of the respective face amounts of outstanding letters of credit and are computed based on certain financial tests. The 20162020 Credit Agreement expires on August 3, 2021. ThereMarch 2, 2025.
At the end of 2021, one-week and two-month LIBOR were discontinued. It is no guaranteeexpected that wethe remaining maturities of LIBOR will continue to be ablepublished through June 2023. We believe our exposure to renewmarket risk associated with the 2016discontinuation of LIBOR is limited as: (a) our 2020 Credit Agreement at its expiration.contains provisions which allow for the use of alternate benchmark rates, (b) we have not historically utilized the maturities that were discontinued in 2021 for any transaction, including borrowings under our 2020 Credit Agreement, and (c) we are not exposed to any other material contracts that reference LIBOR.
We are also exposed to construction market risk and its potential related impact on accounts receivable or costs and estimated earnings in excess of billingscontract assets on uncompleted contracts. The amounts recorded may be at risk if our customers’ ability to pay these obligations is negatively impacted by economic conditions. We continually monitor the creditworthiness of our customers and maintain on-going discussions with customers regarding contract status with respect to change orders and billing terms. Therefore, we believe we take appropriate action to manage market and other risks, but there is no assurance that we will be able to reasonably identify all risks with respect to collectibilitythe collectability of these assets. See also the previous discussionsdiscussion of Revenue Recognition from Long-term Construction ContractsAccounts Receivable and Services Contracts and Accounts ReceivableAllowance for Credit Losses under the heading “Application of Critical“Critical Accounting Policies”Policies and Estimates” in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Amounts invested in our foreign operations are translated into U.S. dollars at the exchange rates in effect at the end of the period. The resulting translation adjustments are recorded as accumulated other comprehensive (loss) income, a component of equity, in the Condensed Consolidated Balance Sheets. We believe theour exposure to the effects that fluctuating foreign currencies may have on our consolidated results of operations is limited because theour foreign operations primarily invoice customers and

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collect obligations in their respective local currencies. Additionally, expenses associated with these transactions are generally contracted and paid for in their same local currencies.
In addition, we are exposed to market risk of fluctuations in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in our construction, building services, and industrial services operations. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of over 10,00012,000 vehicles. While we believe we can increase our contract prices to adjust for some price increases in commodities, there can be no assurance that such price increases, if they were to occur, would be recoverable. Additionally, our fixed price contracts generally 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. Refer to Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion regarding the impact of fluctuations in commodity and material prices on our results of operations for the three months ended March 31, 2022.
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ITEM 4.   CONTROLS AND PROCEDURES.
Based on an evaluation of our disclosure controls and procedures (as required by Rule 13a-15(b) of the Securities Exchange Act of 1934), our Chairman, President, and Chief Executive Officer, Anthony J. Guzzi, and our Executive Vice President and Chief Financial Officer, Mark A. Pompa, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities ExchangesExchange Act of 1934) are effective as of the end of the period covered by this report.
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended September 30, 2017March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. – OTHER INFORMATION.
ITEM 1.   LEGAL PROCEEDINGS.
We are involved in several legal proceedings in which damages and claims have been asserted against us. We believe that we have a number of valid defenses to such proceedings and claims and intend to vigorously defend ourselves. We do not believe that any such matters will have a material adverse effect on our financial position, results of operations, or liquidity. We record a loss contingency if the potential loss from a proceeding or claim is considered probable and the amount can be reasonably estimated or a range of loss can be determined. We provide disclosure when it is reasonably possible that a loss will be incurred in excess of any recorded provision. Significant judgment is required in these determinations. As additional information becomes available, we reassess prior determinations and may change our estimates. Additional claims may be asserted against us in the future. Litigation is subject to many uncertainties, and the outcome of litigation is not predictable with assurance. It is possible that a litigation matter for which liabilities have not been recorded could be decided unfavorably to us, and that any such unfavorable decision could have a material adverse effect on our financial position, results of operations, or liquidity.
ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
The following table summarizes repurchases of our common stock made by us during the quarter ended September 30, 2017:                March 31, 2022:    
Period
Total Number of
Shares Purchased (1) (2)
Average Price
Paid Per Share		Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs		Approximate Dollar Value
of Shares That May Yet Be
Purchased  Under
the Plans or Programs
January 1, 2022 to
January 31, 2022		532,327118.47532,327$287,345,976
February 1, 2022 to
February 28, 2022		307,918113.92307,918$252,268,157
March 1, 2022 to
March 31, 2022		724,901115.42724,901$168,599,335
Total1,565,146116.161,565,146
 
(1)In September 2011, our Board of Directors (the “Board”) authorized a share repurchase program allowing us to begin repurchasing shares of our outstanding common stock. Subsequently, the Board has from time to time increased the amount authorized for repurchases under such program. Since the inception of the repurchase program, the Board has authorized us to repurchase up to $1.45 billion of our outstanding common stock. As of March 31, 2022, there remained authorization for us to repurchase approximately $168.6 million of our shares. No shares have been repurchased by us since the program was announced other than pursuant to such program. Subsequent to March 31, 2022, the Board authorized us to repurchase up to an additional $200.0 million of our outstanding common stock. Refer to Note 10 - Common Stock of the notes to consolidated financial statements for further information regarding our share repurchase program.
Period 
Total Number of
Shares Purchased(1)
 
Average Price
Paid Per Share
 
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
 
Approximate Dollar Value
of Shares That May Yet be
Purchased  Under
the Plan or Programs
July 1, 2017 to
July 31, 2017
 None None None $102,141,865
August 1, 2017 to
August 31, 2017
 384,633 $65.44 384,633 $76,972,856
September 1, 2017 to
September 30, 2017
 None None None $76,972,856
(2)Excludes 42,265 shares surrendered to the Company by participants in our share-based compensation plans to satisfy minimum tax withholdings for common stock issued under such plans.
(1)On September 26, 2011, our Board of Directors authorized us to repurchase up to $100.0 million of our outstanding common stock. On December 5, 2013, October 23, 2014 and October 28, 2015, our Board of Directors authorized us to repurchase up to an additional $100.0 million, $250.0 million and $200.0 million of our outstanding common stock, respectively. As of September 30, 2017, there remained authorization for us to repurchase approximately $77.0 million of our shares. Subsequent to September 30, 2017, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our outstanding common stock. No shares have been repurchased by us since the programs have been announced other than pursuant to these publicly announced programs. The repurchase programs have no expiration date and do not obligate the Company to acquire any particular amount of common stock and may be suspended, recommenced or discontinued at any time or from time to time without prior notice. We may repurchase our shares from time to time as permitted by securities laws and other legal requirements.
ITEM 4.   MINE SAFETY DISCLOSURES.
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 9595.1 to this quarterly report.
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ITEM 6.   EXHIBITS.
For the list of exhibits, see the Exhibit Index immediately following the signature page hereof, which Exhibit Index is incorporated herein by reference.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: October 26, 2017

Exhibit
No.		EMCOR GROUP, INC.
(Registrant)
Description
BY:
/s/ ANTHONY J. GUZZI
Anthony J. Guzzi
President and
Chief Executive Officer
(Principal Executive Officer)
BY:
/s/ MARK A. POMPA
Mark A. Pompa
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)


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EXHIBIT INDEX

Incorporated By Reference to or
Filed Herewith, as Indicated Below
Exhibit
No.
3(a-1)		Description
Incorporated By Reference to or
Filed Herewith, as Indicated Below
2(a-1)Purchase Agreement dated as of February 11, 2002 by and among Comfort Systems USA, Inc. and EMCOR-CSI Holding Co.
Exhibit 2.1 to EMCOR Group, Inc.’s (“EMCOR”) Report on Form 8-K dated February 14, 2002
2(a-2)Purchase and Sale Agreement dated as of August 20, 2007 between FR X Ohmstede Holdings LLC and EMCOR Group, Inc.
Exhibit 2.1 to EMCOR’s Report on Form 8-K (Date of Report August 20, 2007)
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)
3(a-1)Restated Certificate of Incorporation of EMCOR filed December 15, 1994
Exhibit 3(a-5) to EMCOR’s Registration Statement on Form 10 as originally filed March 17, 1995 (“Form 10”)
3(a-2)Amendment dated November 28, 1995 to the Restated Certificate of Incorporation of EMCOR
Exhibit 3(a-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1995 (“1995 Form10-K”Form10-K”)
3(a-3)Amendment dated February 12, 1998 to the Restated Certificate of Incorporation of EMCOR
Exhibit 3(a-3) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1997 (“1997 Form 10-K”)
3(a-4)Amendment dated January 27, 2006 to the Restated Certificate of Incorporation of EMCOR
Exhibit 3(a-4) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2005 (“2005 Form 10-K”)
3(a-5)Amendment dated September 18, 2007 to the Restated Certificate of Incorporation of EMCOR
Exhibit A to EMCOR’s Proxy Statement dated August 17, 2007 for Special Meeting of Stockholders held September 18, 2007
3(b)Amended and Restated By-Laws and Amendments thereto
Exhibit 3(b) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2016 (“2016 Form 10-K”)
4(a)Fifth Amended and Restated Credit Agreement dated as of August 3, 2016 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(a) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (“September 2016 Form 10-Q”)
4(b)Fifth Amended and Restated Security Agreement dated as of August 3, 2016 among EMCOR, certain of its U.S. subsidiaries, and Bank of Montreal, as Agent
Exhibit 4(b) to the September 2016 Form 10-Q
4(c)Fifth Amended and Restated Pledge Agreement dated as of August 3, 2016 among EMCOR, certain of its U.S. subsidiaries, and Bank of Montreal, as Agent
Exhibit 4(c) to the September 2016 Form 10-Q

4(d)Fourth Amended and Restated Guaranty Agreement dated as of August 3, 2016 by certain of EMCOR’s U.S. subsidiaries in favor of Bank of Montreal, as Agent
Exhibit 4(d) to the September 2016 Form 10-Q


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EXHIBIT INDEX

31.1
Exhibit
No.
Description
Incorporated By Reference to or
Filed Herewith, as Indicated Below
10(a)Form of Severance Agreement (“Severance Agreement”) between EMCOR and each of Sheldon I. Cammaker, R. Kevin Matz and Mark A. Pompa
Exhibit 10.1 to the April 2005 Form 8-K
10(b)Form of Amendment to Severance Agreement between EMCOR and each of Sheldon I. Cammaker, R. Kevin Matz and Mark A. Pompa
Exhibit 10(c) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (“March 2007 Form 10-Q”)
10(c)Letter Agreement dated October 12, 2004 between Anthony Guzzi and EMCOR (the “Guzzi Letter Agreement”)
Exhibit 10.1 to EMCOR’s Report on Form 8-K (Date of Report October 12, 2004)
10(d)Form of Confidentiality Agreement between Anthony Guzzi and EMCOR
Exhibit C to the Guzzi Letter Agreement
10(e)Form of Indemnification Agreement between EMCOR and each of its officers and directors
Exhibit F to the Guzzi Letter Agreement
10(f-1)Severance Agreement (“Guzzi Severance Agreement”) dated October 25, 2004 between Anthony Guzzi and EMCOR
Exhibit D to the Guzzi Letter Agreement
10(f-2)Amendment to Guzzi Severance Agreement
Exhibit 10(g-2) to the March 2007 Form 10-Q
10(g-1)Continuity Agreement dated as of June 22, 1998 between Sheldon I. Cammaker and EMCOR (“Cammaker Continuity Agreement”)
Exhibit 10(c) to the June 1998 Form 10-Q
10(g-2)Amendment dated as of May 4, 1999 to Cammaker Continuity Agreement
Exhibit 10(i) to the June 1999 Form 10-Q
10(g-3)Amendment dated as of March 1, 2007 to Cammaker Continuity Agreement
Exhibit 10(m-3) to the March 2007 Form 10-Q
10(h-1)Continuity Agreement dated as of June 22, 1998 between R. Kevin Matz and EMCOR (“Matz Continuity Agreement”)
Exhibit 10(f) to the June 1998 Form 10-Q
10(h-2)Amendment dated as of May 4, 1999 to Matz Continuity Agreement
Exhibit 10(m) to the June 1999 Form 10-Q
10(h-3)Amendment dated as of January 1, 2002 to Matz Continuity Agreement
Exhibit 10(o-3) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 (“March 2002 Form 10-Q”)
10(h-4)Amendment dated as of March 1, 2007 to Matz Continuity Agreement
Exhibit 10(n-4) to the March 2007 Form 10-Q
10(i-1)Continuity Agreement dated as of June 22, 1998 between Mark A. Pompa and EMCOR (“Pompa Continuity Agreement”)
Exhibit 10(g) to the June 1998 Form 10-Q
10(i-2)Amendment dated as of May 4, 1999 to Pompa Continuity Agreement
Exhibit 10(n) to the June 1999 Form 10-Q
10(i-3)Amendment dated as of January 1, 2002 to Pompa Continuity Agreement
Exhibit 10(p-3) to the March 2002 Form 10-Q
10(i-4)Amendment dated as of March 1, 2007 to Pompa Continuity Agreement
Exhibit 10(o-4) to the March 2007 Form 10-Q
10(j-1)Change of Control Agreement dated as of October 25, 2004 between Anthony Guzzi (“Guzzi”) and EMCOR (“Guzzi Continuity Agreement”)
Exhibit E to the Guzzi Letter Agreement
10(j-2)Amendment dated as of March 1, 2007 to Guzzi Continuity Agreement
Exhibit 10(p-2) to the March 2007 Form 10-Q
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”)




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EXHIBIT INDEX

Exhibit
No.
Description
Incorporated By Reference to or
Filed Herewith, as Indicated Below
10(k-1)Amendment dated as of March 29, 2010 to Severance Agreement with Sheldon I. Cammaker, Anthony J. Guzzi, R. Kevin Matz and Mark A. Pompa
Exhibit 10.1 to Form 8-K (Date of Report March 29, 2010) (“March 2010 Form 8-K”)
10(k-2)Third Amendment to Severance Agreement dated June 4, 2015 between EMCOR and Sheldon I. Cammaker
Exhibit 10(k-2) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (“June 2015 Form 10-Q”)
10(l-1)Severance Agreement dated as of October 26, 2016 between EMCOR and Maxine L. Mauricio
Exhibit 10(l-1) to the September 2016 Form 10-Q
10(l-2)Continuity Agreement dated as of October 26, 2016 between EMCOR and Maxine L. Mauricio (“Mauricio Continuity Agreement”)
Exhibit 10(l-2) to the September 2016 Form 10-Q

10(l-3)Amendment dated April 10, 2017 to Mauricio Continuity Agreement
Exhibit 10(l-3) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017
10(m-1)EMCOR Group, Inc. Long-Term Incentive Plan (“LTIP”)
Exhibit 10 to Form 8-K (Date of Report December 15, 2005)
10(m-2)First Amendment to LTIP and updated Schedule A to LTIP
Exhibit 10(s-2) to 2008 Form 10-K
10(m-3)Second Amendment to LTIP
Exhibit 10.2 to March 2010 Form 8-K
10(m-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(m-5)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(m-6)Form of Certificate Representing Stock Units issued under LTIP
Exhibit 10(t-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2007 (“2007 Form 10-K”)
10(m-7)Fifth Amendment to LTIP
Exhibit 10(l-7) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Form 10-K”)
10(m-8)Sixth Amendment to LTIP
Exhibit 10(l-8) to 2015 Form 10-K
10(n)Key Executive Incentive Bonus Plan, as amended and restated
Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held June 13, 2013
10(o-1)2007 Incentive Plan
Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held June 20, 2007
10(o-2)Form of Option Agreement under 2007 Incentive Plan between EMCOR and each non-employee director electing to receive options as part of annual retainer
Exhibit 10(h)(h-3) to 2007 Form 10-K
10(p-1)Amended and Restated 2010 Incentive Plan
Exhibit 10(q-1) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015
10(p-2)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
Exhibit 10(i)(i-2) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010
10(p-3)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 retainer
Exhibit 10(q)(q) to 2011 Form 10-K
10(q)EMCOR Group, Inc. Employee Stock Purchase Plan
Exhibit C to EMCOR’s Proxy Statement for its Annual Meeting held June 18, 2008
10(r)Director Award Program Adopted May 13, 2011, as amended and restated December 14, 2011
Exhibit 10(n)(n) to 2011 Form 10-K
10(s)Amendment to Option Agreements
Exhibit 10(r)(r) to 2011 Form 10-K



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EXHIBIT INDEX

Exhibit
No.
Description
Incorporated By Reference to or
Filed Herewith, as Indicated Below
10(t)Form of Non-LTIP Stock Unit Certificate
Exhibit 10(p)(p) to the March 31, 2012 Form 10-Q
10(u)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(v)Director Award Program, as Amended and Restated December 16, 2014
Exhibit 10(z) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2014
10(w)EMCOR Group, Inc. Voluntary Deferral Plan
Exhibit 10(e)(e) to 2012 Form 10-K
10(x)First Amendment to EMCOR Group, Inc. Voluntary Deferral Plan
Exhibit 10(e)(e) to 2013 Form 10-K
10(y)Form of Executive Restricted Stock Unit Agreement
Exhibit 10(f)(f) to 2012 Form 10-K
10(z)Restricted Stock Unit Award Agreement dated October 23, 2013 between EMCOR and Stephen W. Bershad
Exhibit 10(g)(g) to 2013 Form 10-K
10(a)(a)Restricted Stock Unit Award Agreement dated June 11, 2014 between EMCOR and Stephen W. Bershad
Exhibit 10(g)(g) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014
10(b)(b)Restricted Stock Unit Award Agreement dated June 11, 2015 between EMCOR and Stephen W. Bershad
Exhibit 10(f)(f) to the June 30, 2015 Form 10-Q
10(c)(c)Restricted Stock Unit Award Agreement dated October 29, 2015 between EMCOR and Steven B. Schwarzwaelder
Exhibit 10.1 to Form 8-K (Date of Report October 30, 2015)
10(d)(d)Restricted Stock Unit Award Agreement dated June 2, 2016 between EMCOR and Stephen W. Bershad
Exhibit 10(c)(c) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016
10(e)(e)Executive Compensation Recoupment Policy
Exhibit 10(h)(h) to 2015 Form 10-K
10(f)(f)Restricted Stock Unit Award Agreement dated June 30, 2017 between EMCOR and Mark A. Pompa
Exhibit 10(f)(f) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017
11Computation of Basic EPS and Diluted EPS for the three and nine months ended September 30, 2017 and 2016
Note 5 of the Notes to the Condensed Consolidated Financial Statements
31.1Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Anthony J. Guzzi, the Chairman, President and Chief Executive Officer
Filed herewith
31.2Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Mark A. Pompa, the Executive Vice President and Chief Financial Officer
Filed herewith
32.1Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chairman, President and Chief Executive Officer
Furnished
32.2Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Executive Vice President and Chief Financial Officer
Furnished
9595.1Information concerning mine safety violations or other regulatory matters
Filed herewith
101The following materials from EMCOR Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017,March 31, 2022, formatted in XBRL (ExtensibleiXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity and (vi) the Notes to Condensed Consolidated Financial Statements.Filed
104Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)Filed



 

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 28, 2022
EMCOR GROUP, INC.
(Registrant)
BY:
/s/ ANTHONY J. GUZZI
Anthony J. Guzzi
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
BY:
/s/ MARK A. POMPA
Mark A. Pompa
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
BY:
/s/ JASON R. NALBANDIAN
Jason R. Nalbandian
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

37
41