EMCOR Group, Inc. - Engineering & Construction - Category Directory

(203) 849-7800

301 Merritt Seven Corporate Park
Norwalk, CT 06851
www.emcorgroup.com

Sales

$4.5 billion

Business Description
EMCOR is one of the largest mechanical and electrical construction and
facilities services firms in the United States, Canada, the United Kingdom and
in the world. In 2003, EMCOR had revenues of approximately $4.53 billion. EMCOR
provides services to a broad range of commercial, industrial, utility, and
institutional customers through approximately 70 principal operating
subsidiaries, joint ventures and a majority-owned interest in a limited
liability company in the United States. EMCOR has offices in 38 states and the
District of Columbia in the United States, eight provinces in Canada and 15
primary locations in the United Kingdom. In the United Arab Emirates and South
Africa, EMCOR carries on business through joint ventures. EMCOR's executive
offices are located at 301 Merritt Seven Corporate Park, Norwalk, Connecticut
06851-1060, and its telephone number at those offices is (203) 849-7800.

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

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

o Systems for generation and distribution of electrical power;

o Lighting systems;

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

o Voice and data communications systems;

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

o Plumbing, process and high-purity piping systems.

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

o Site-based operations and maintenance;

o Mobile maintenance and services;

o Facilities management;

o Remote monitoring;

o Installation and support for building systems;

o Technical consulting and diagnostic services;

o Small modification and retrofit projects; and

o Program development and management for energy systems.

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

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

EMCOR's revenues are derived from many different customers in numerous
industries which have operations in several different geographical areas. Of
EMCOR's 2003 revenues, approximately 80% were generated in the United States and
approximately 20% were generated internationally. In 2003, approximately 50% of
revenues were derived from new construction projects, 28% were derived from
renovation and retrofit of customer's existing facilities and 22% were derived
from facilities services operations.

THE BUSINESS

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

MECHANICAL AND ELECTRICAL CONSTRUCTION SERVICES AND FACILITIES SERVICES

EMCOR believes that the mechanical and electrical construction services and
facilities services business is highly fragmented, consisting of thousands of
small companies across the United States and around the world. Because EMCOR has
total assets, annual revenues, net worth, access to bank credit and surety
bonding, and expertise significantly greater than most of its competitors, EMCOR
believes it has a significant competitive advantage. The mechanical and
electrical construction services industry has a higher growth rate than the
overall non-residential construction industry, due principally to the ever
increasing content and complexity of mechanical and electrical systems in all
types of projects. This increasing content and complexity is, in part, a result
of the expanded use of computers and more technologically advanced voice and
data communications, lighting, and environmental control systems in all types of
facilities. For these reasons, buildings of all types consume more electricity
per square foot than in the past and thus need more extensive electrical
distribution systems. In addition, advanced voice and data communication systems
require more sophisticated power supplies and extensive low voltage and
fiber-optic communications cabling. Moreover, the need for greater environmental
controls within a building, such as the heightened need for climate control to
maintain extensive computer systems at optimal temperatures, and the growing
demand for environmental control in individual spaces, have created expanded
opportunities for the mechanical and electrical construction services and
facilities services business.

Mechanical and electrical construction services primarily involve the design,
integration, installation and start-up of: (1) systems for the generation and
distribution of electrical power, including power cables, conduits, distribution
panels, transformers, generators, uninterruptible power supply systems and
related switch gear and controls; (2) lighting systems, including fixtures and
controls; (3) low-voltage systems, including fire alarm, security, and process
control systems; (4) voice and data communications systems, including
fiber-optic and low-voltage copper cabling; (5) heating, ventilation, air
conditioning, refrigeration and clean-room process ventilation systems; and (6)
plumbing, process and high-purity piping systems.

Mechanical and electrical construction services generally fall into one of
two categories: (1) large installation projects with contracts often in the
multi-million dollar range that involve construction of industrial and
commercial buildings and institutional and public works facilities or the
fit-out of large blocks of space within commercial buildings and (2) smaller
installation projects typically involving fit-out, renovation and retrofit work.

EMCOR's United States mechanical and electrical construction services
operations accounted for about 61% of its 2003 revenues, of which revenues
approximately 67% was related to new construction and approximately 33% was
related to renovation and retrofit projects. EMCOR provides mechanical and
electrical construction services for both large and small installation and
renovation projects. Its largest projects include those (1) for institutional
use (such as water and wastewater treatment facilities, hospitals, correctional
facilities, schools and research laboratories); (2) for industrial use (such as
pharmaceutical plants, steel, pulp and paper mills, chemical, automotive and
semiconductor manufacturing facilities, and oil refineries); (3) for
transportation projects (such as highways, airports and transit systems); (4)
for commercial use (such as office buildings, data centers, hotels, casinos,
convention centers, sports stadiums, shopping malls and resorts); and (5) for
power generation and energy management projects. EMCOR's largest projects, which
typically range in size from $10.0 million up to and occasionally exceeding
$50.0 million and are usually multi-year projects, represented about 30% of
EMCOR's construction services revenues in 2003.

EMCOR's projects of less than $10.0 million accounted for approximately 70%
of 2003 construction services revenues. These projects are typically completed
in less than one year. They usually involve mechanical and electrical
construction services when an end-user or owner undertakes construction or
modification of a facility to accommodate a specific use. These projects
frequently require mechanical and electrical systems to meet special needs such
as critical systems power supply, special environmental controls and high-purity
air systems, sophisticated electrical and mechanical systems for data centers,
including those associated with internet service providers and electronic
commerce, trading floors in financial services businesses, new production lines
in manufacturing plants, and office arrangements in existing office buildings.
They are not usually dependent upon the new construction market. Demand for
these projects and types of services is often prompted by the expiration of
leases, changes in technology or changes in the customer's plant or office
layout in the normal course of a customer's business.

EMCOR performs its services pursuant to contracts with owners, such as
corporations, municipalities and other governmental entities, general
contractors, systems suppliers, construction managers, developers, other
subcontractors and tenants of commercial properties. Institutional and public
works projects are frequently long-term complex projects that require
significant technical and management skills and the financial strength to obtain
bid and performance bonds, which are often a condition to bidding for and
winning these projects.
 
EMCOR also installs and maintains lighting for streets, highways, bridges and
tunnels, traffic signals, computerized traffic control systems, and signal and
communication systems for mass transit systems in several metropolitan areas. In
addition, in the United States, EMCOR manufactures and installs sheet metal air
handling systems for both its own mechanical construction operations and for
unrelated mechanical contractors. EMCOR also maintains welding and pipe
fabrication shops in support of some of its own mechanical operations.
 

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