EMCOR Group EME · USD

SEGMENT INFORMATIONWe are one of the largest specialty contractors in the United States and 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, technology, manufacturing, industrial, healthcare, utility, and institutional customers through approximately 100 operating subsidiaries. Such operating subsidiaries are organized into the following reportable segments, which additionally reflect the nature of the services offered and their geographical location:•United States electrical construction and facilities services;•United States mechanical construction and facilities services;•United States building services; and•United States industrial services.On December 1, 2025, we sold our United Kingdom operations, the results of which are reported within our United Kingdom building services segment through the date of sale.Our chief operating decision maker (“CODM”) is our Chairman, President, and Chief Executive Officer. Our CODM is responsible for assessing the performance of the Company and each of our reportable segments as well as allocating resources, including personnel and capital resources. The measure of segment profit or loss utilized by our CODM is operating income. Our CODM evaluates segment performance by comparing historical, actual, and forecasted operating income on a regular basis. The accounting policies of our reportable segments are the same as those applied at the consolidated financial statement level as described in Note 2 - Summary of Significant Accounting Policies of the notes to consolidated financial statements.

REVENUE FROM CONTRACTS WITH CUSTOMERSThe Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services by applying the following five step model:(1) Identify the contract with a customerA 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 probable. 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 contractAt 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 purposes 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 (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.

COMMITMENTS AND CONTINGENCIESSeverance 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. GuaranteesIn 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 BondsThe 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 December 31, 2025, 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 $3.03 billion, which represents approximately 23% 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 December 31, 2025, we satisfied approximately $105.5 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 MaterialsWe are subject to regulations with respect to the handling or disposal of certain materials used in the performance of our services, 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.

DEBTExcluding finance lease liabilities, we had no outstanding debt as of December 31, 2025 and 2024. Refer to Note 16 - Leases of the notes to consolidated financial statements for additional information regarding our finance leases, including outstanding balances. Credit AgreementWe have a credit agreement dated December 20, 2023 (the “2023 Credit Agreement”), which provides for a $1.30 billion revolving credit facility (the “2023 Revolving Credit Facility”) expiring December 20, 2028. If additional lenders are identified and/or existing lenders are willing to increase their current commitments, we may increase the 2023 Revolving Credit Facility by an amount equal to the greater of: (a) $900 million or (b) the Company’s Adjusted EBITDA (as such term is defined in the 2023 Credit Agreement) for the twelve-month period ending immediately prior to the increase in commitment. We may allocate up to $600.0 million of available capacity under the 2023 Revolving Credit Facility to letters of credit for our account or for the account of any of our subsidiaries.There were no direct borrowings outstanding under the 2023 Revolving Credit Facility as of December 31, 2025 and 2024. However, outstanding letters of credit reduce the available capacity under this facility and, as of December 31, 2025 and 2024, we had $73.1 million and $71.2 million of letters of credit outstanding, respectively. At the Company’s election, borrowings under the 2023 Revolving Credit Facility bear interest at either: (1) a base rate plus a margin of 0.125% to 0.875%, depending on the Company’s Leverage Ratio (as such term is defined in the 2023 Credit Agreement), or (2) a rate equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable tenor plus 0.10% (“Adjusted Term SOFR”) plus a margin of 1.125% to 1.875%, depending on the Company’s Leverage Ratio. The base rate is determined by the greater of: (a) the prime commercial lending rate announced by Bank of Montreal from time to time, (b) the federal funds effective rate, plus ½ of 1.00%, (c) Adjusted Term SOFR for a one-month tenor, plus 1.00%, or (d) 0.00%.A commitment fee is payable on the average daily unused amount of the 2023 Revolving Credit Facility, which ranges from 0.125% to 0.25%, depending on the Company’s Leverage Ratio. The fee was 0.125% of the unused amount as of December 31, 2025 and 2024.

INCOME TAXESFor the years ended December 31, 2025, 2024, and 2023, our income tax provision was calculated based on income before income taxes as follows (in thousands): 202520242023United States$1,695,149 $1,349,469 $844,002 Foreign26,475 27,913 28,851 $1,721,624 $1,377,382 $872,853 Foreign income for each of the years presented was earned in the United Kingdom.The income tax provision for the years ended December 31, 2025, 2024, and 2023 consisted of the following (in thousands): 202520242023Current provision: Federal$356,795 $299,203 $187,463 State and local102,560 94,647 62,316 Foreign5,507 5,502 6,396 464,862 399,352 256,175 Deferred provision (benefit):Federal$(11,596)$(24,024)$(13,764)State and local(5,604)(6,483)(3,190)Foreign1,145 1,392 303 (16,055)(29,115)(16,651)Income tax provision$448,807 $370,237 $239,524 NOTE 11 - INCOME TAXES (Continued)For the year ended December 31, 2025, our income tax provision was $448.8 million compared to $370.2 million for the year ended December 31, 2024 and $239.5 million for the year ended December 31, 2023. The increase in the income tax provision year-over-year was primarily due to increased income before income taxes, including a $144.9 million pre-tax gain on the sale of our United Kingdom operations, which resulted in $25.1 million of income taxes.The income tax rates on income before income taxes for the years ended December 31, 2025, 2024, and 2023 were 26.1%, 26.9%, and 27.5%, respectively.Items accounting for the differences between income taxes computed at the federal statutory rate and the income tax provision for the years ended December 31, 2025, 2024, and 2023 were as follows (in thousands, except for percentages): 202520242023Amount%Amount%Amount%U.S. federal statutory tax rate$361,541 21.0 %$289,250 21.0 %$183,230 21.0 %State and local income taxes, net of federal income tax effect (1)75,588 4.4 %69,202 5.0 %46,752 5.4 %Foreign tax effects (2)1,092 0.1 %1,032 0.1 %640 0.1 %Effect of cross-border tax laws: Global intangible low-taxed income (3)22,088 1.3 %— — %— — % Subpart F income inclusion3,054 0.2 %— — %— — %Nontaxable or nondeductible items: Reversal of book gain on sale of United Kingdom operations(30,424)(1.8)%— — %— — % Other permanent differences17,122 1.0 %12,221 0.9 %9,513 1.1 %Other adjustments(1,254)(0.1)%(1,468)(0.1)%(611)(0.1)%Effective tax rate$448,807 26.1 %$370,237 26.9 %$239,524 27.

SHARE-BASED COMPENSATION PLANS We have an incentive plan under which stock awards, stock units, and other share-based compensation may be granted to officers, non-employee directors, and key employees of the Company. Under the terms of this plan, 3,250,000 shares were authorized, and 555,142 shares remain available for grant or issuance as of December 31, 2025. Any issuances under this plan are valued at the fair market value of our common stock on the grant date. Forfeitures are recognized as they occur. The following table summarizes activity regarding restricted stock units since December 31, 2022: SharesWeightedAveragePriceBalance, December 31, 2022317,594 $100.83 Granted103,024 $156.06 Forfeited(3,018)$118.59 Vested(122,751)$90.38 Balance, December 31, 2023294,849 $124.30 Granted93,636 $279.05 Forfeited(409)$185.51 Vested(139,262)$105.65 Balance, December 31, 2024248,814 $192.87 Granted48,150 $483.10 Forfeited(3,799)$227.60 Vested(94,564)$148.91 Balance, December 31, 2025198,601 $283.51 An aggregate of 30,566 restricted stock units granted to current and former non-employee directors vested as of December 31, 2025, but, at the election of such directors, issuance has been deferred for up to 10 years from the date of vest. In addition, an aggregate of 5,269 restricted stock units granted to former employees vested as of December 31, 2025 but, in accordance with plan documents, were not issued until January 2026.We recognized approximately $20.6 million, $20.0 million, and $13.7 million of compensation expense for stock units awarded to non-employee directors and employees pursuant to our incentive plan for the years ended December 31, 2025, 2024, and 2023, respectively. We have approximately $16.8 million of compensation expense, net of income taxes, which will be recognized over the remaining vesting periods of up to 3 years. NOTE 13 - SHARE-BASED COMPENSATION PLANS (Continued)The income tax benefit derived in 2025, 2024, and 2023 as a result of share-based compensation was approximately $7.0 million, $5.7 million, and $3.3 million, respectively, of which approximately $5.0 million, $4.0 million, and $1.7 million, respectively, represented excess tax benefits.

The following table summarizes activity regarding restricted stock units since December 31, 2022: SharesWeightedAveragePriceBalance, December 31, 2022317,594 $100.83 Granted103,024 $156.06 Forfeited(3,018)$118.59 Vested(122,751)$90.38 Balance, December 31, 2023294,849 $124.30 Granted93,636 $279.05 Forfeited(409)$185.51 Vested(139,262)$105.65 Balance, December 31, 2024248,814 $192.87 Granted48,150 $483.10 Forfeited(3,799)$227.60 Vested(94,564)$148.91 Balance, December 31, 2025198,601 $283.

LEASES We lease real estate, vehicles, and equipment under various arrangements which are classified as either operating or finance leases. A lease exists when a contract or part of a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining whether a lease exists, we consider whether a contract provides us with both: (a) the right to obtain substantially all of the economic benefits from the use of the identified asset and (b) the right to direct the use of the identified asset. Many of our leases include base rental periods coupled with options to renew or terminate the lease, generally at our discretion. Certain leases additionally include options to purchase the leased asset. In evaluating the lease term, we consider whether we are reasonably certain to exercise such options. To the extent a significant economic incentive exists to exercise an option, that option is included within the lease term. However, based on the nature of our lease arrangements, options generally do not provide us with a significant economic incentive and are therefore excluded from the lease term for the majority of our arrangements.Our leases typically include a combination of fixed and variable payments. Fixed payments are generally included when measuring the right-of-use asset and lease liability. Variable payments, which primarily represent payments based on usage of the underlying asset, are generally excluded from such measurement and expensed as incurred. In addition, certain of our lease arrangements may contain a lease coupled with an arrangement to provide other services, such as maintenance, or may require us to make other payments on behalf of the lessor related to the leased asset, such as payments for taxes or insurance. We account for these non-lease components together with the associated lease component for each of our asset classes.NOTE 16 - LEASES (Continued)The measurement of right-of-use assets and lease liabilities requires us to estimate appropriate discount rates. To the extent the rate implicit in the lease is readily determinable, such rate is utilized. However, based on information available at lease commencement for the majority of our leases, the rate implicit in the lease is not known.