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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Quarterly Report Under Section 13 or
15(d) of the Securities Exchange Act of 1934
- --------------------------------------------------------------------------------

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003


OR

[ ] 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 0-2315

EMCOR Group, Inc.
-------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 11-2125338
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

301 Merritt Seven Corporate Park
Norwalk, Connecticut 06851-1060
- -------------------------------- ----------
(Address of principal executive offices) (Zip Code)

(203) 849-7800
- -------------------------------
(Registrant's telephone number)

N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

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
filing requirements for the past 90 days. Yes X No __


Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X No __


Applicable Only To Corporate Issuers
------------------------------------

Number of shares of Common Stock outstanding as of the close of business on
October 20, 2003: 15,014,199 shares.






EMCOR GROUP, INC.
INDEX


Page No.


PART I - Financial Information

Item 1 Financial Statements

Condensed Consolidated Balance Sheets -
as of September 30, 2003 and December 31, 2002 1

Condensed Consolidated Statements of Operations -
three months ended September 30, 2003 and 2002 3

Condensed Consolidated Statements of Operations -
nine months ended September 30, 2003 and 2002 4

Condensed Consolidated Statements of Cash Flows -
nine months ended September 30, 2003 and 2002 5

Condensed Consolidated Statements of Stockholders'
Equity and Comprehensive Income -
nine months ended September 30, 2003 and 2002 6

Notes to Condensed Consolidated Financial Statements 7


Item 2 Management's Discussion and Analysis of Results of Operations
and Financial Condition 16

Item 3 Quantitative and Qualitative Disclosures about Market Risk 29

Item 4 Controls and Procedures 30

PART II - Other Information

Item 1 Legal Proceedings 30

Item 6 Exhibits and Reports on Form 8-K 31








38

PART I - FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

EMCOR Group, Inc. and Subsidiaries


CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
- --------------------------------------------------------------------------------
September 30, December 31,
2003 2002
(Unaudited)
- --------------------------------------------------------------------------------

ASSETS

Current assets:
Cash and cash equivalents $ 82,162 $ 93,103
Accounts receivable, net 1,012,911 964,968
Costs and estimated earnings in excess
of billings on uncompleted contracts 272,969 235,809
Inventories 11,876 12,271
Prepaid expenses and other 35,423 28,784
---------- ----------

Total current assets 1,415,341 1,334,935

Investments, notes and other long-term
receivables 29,008 24,642

Property, plant and equipment, net 68,363 70,750

Goodwill 293,538 290,412

Identifiable intangible assets, net 11,561 13,845

Other assets 20,824 23,907
---------- ----------

Total assets $1,838,635 $1,758,491
========== ==========



See Notes to Condensed Consolidated Financial Statements.






EMCOR Group, Inc. and Subsidiaries


CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
- --------------------------------------------------------------------------------
September 30, December 31,
2003 2002
(Unaudited)
- --------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Borrowings under working capital credit line $ 194,979 $ 112,000
Current maturities of long-term debt and capital
lease obligations 544 22,276
Accounts payable 389,270 409,562
Billings in excess of costs and estimated
earnings on uncompleted contracts 372,714 363,092
Accrued payroll and benefits 138,266 159,416
Other accrued expenses and liabilities 131,870 113,529
---------- ----------

Total current liabilities 1,227,643 1,179,875

Long-term debt and capital lease obligations 622 905

Other long-term obligations 94,367 87,841
---------- ----------

Total liabilities 1,322,632 1,268,621
---------- ----------

Stockholders' equity:
Preferred stock, $0.10 par value, 1,000,000 shares
authorized, zero issued and outstanding -- --
Common stock, $0.01 par value, 30,000,000 shares
authorized, 16,143,516 and 16,050,862 shares
issued, respectively 161 161
Capital surplus 315,429 312,393
Accumulated other comprehensive loss (87) (5,148)
Retained earnings 217,297 199,300
Treasury stock, at cost 1,129,317 and 1,131,985
shares, respectively (16,797) (16,836)
---------- ----------

Total stockholders' equity 516,003 489,870
---------- ----------

Total liabilities and stockholders' equity $1,838,635 $1,758,491
========== ==========



See Notes to Condensed Consolidated Financial Statements.





EMCOR Group, Inc. and Subsidiaries


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data) (Unaudited)
- --------------------------------------------------------------------------------

Three months ended September 30, 2003 2002
- --------------------------------------------------------------------------------

Revenues $1,157,588 $1,052,285
Cost of sales 1,039,382 923,052
---------- ----------

Gross profit 118,206 129,233
Selling, general and administrative expenses 104,671 93,375
---------- ----------

Operating income 13,535 35,858
Interest expense, net 1,987 1,073
---------- ----------

Income before income taxes 11,548 34,785
Income tax provision 5,080 15,306
---------- ----------

Net income $ 6,468 $ 19,479
========== ==========

Basic earnings per share $ 0.43 $ 1.31
========== ==========

Diluted earnings per share $ 0.42 $ 1.26
========== ==========


See Notes to Condensed Consolidated Financial Statements.
















EMCOR Group, Inc. and Subsidiaries


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data) (Unaudited)
- --------------------------------------------------------------------------------

Nine months ended September 30, 2003 2002
- --------------------------------------------------------------------------------

Revenues $3,362,996 $2,848,983
Cost of sales 3,004,746 2,510,148
---------- ----------

Gross profit 358,250 338,835
Selling, general and administrative expenses 320,484 263,522
---------- ----------

Operating income 37,766 75,313
Interest expense, net 5,631 1,101
---------- ----------

Income before income taxes 32,135 74,212
Income tax provision 14,138 32,654
---------- ----------

Net income $ 17,997 $ 41,558
========== ==========

Basic earnings per share $ 1.20 $ 2.80
========== ==========

Diluted earnings per share $ 1.16 $ 2.69
========== ==========


See Notes to Condensed Consolidated Financial Statements.





EMCOR Group, Inc. and Subsidiaries


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
- --------------------------------------------------------------------------------

Nine months ended September 30, 2003 2002
- --------------------------------------------------------------------------------

Cash flows from operating activities:
Net income $ 17,997 $ 41,558
Depreciation and amortization 15,986 11,477
Amortization of identifiable intangible assets 2,284 --
Other non-cash expenses 5,279 2,421
Changes in operating assets and liabilities,
excluding the effect of business acquired (94,732) 34,657
--------- ---------
Net cash (used in) provided by operating activities (53,186) 90,113
--------- ---------

Cash flows from investing activities:
Payments for acquisitions of businesses, net of
cash acquired, and related earn-out agreements (3,127) (169,787)
Proceeds from sale of assets 521 987
Purchase of property, plant and equipment (13,388) (12,935)
Net disbursements related to other investments (4,366) (9,641)
----------- ---------
Net cash used in investing activities (20,360) (191,376)
----------- ---------

Cash flows from financing activities:
Proceeds from working capital credit lines 1,199,483 50,000
Repayments of working capital credit lines (1,116,504) (50,000)
Net repayments for long-term debt (22,204) (1,150)
Net borrowings for capital lease obligations 189 103
Net proceeds from exercise of stock options 1,641 1,397
----------- ---------
Net cash provided by financing activities 62,605 350
----------- ---------
Decrease in cash and cash equivalents (10,941) (100,913)
Cash and cash equivalents at beginning of year 93,103 189,766
----------- ---------
Cash and cash equivalents at end of period $ 82,162 $ 88,853
=========== =========

Supplemental cash flow information:
Cash paid for:
Interest $ 5,321 $ 5,413
Income taxes $ 13,048 $ 41,059
Non-cash financing activities:
Debt assumed in acquisition $ -- $ 22,115

See Notes to Condensed Consolidated Financial Statements.




EMCOR Group, Inc. and Subsidiaries



CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
(In thousands) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated
other
Common Capital comprehensive Retained Treasury Comprehensive
Total stock surplus loss (1) earnings stock income
- ------------------------------------------------------------------------------------------------------------------------------


Balance, January 1, 2002 $421,933 $159 $307,636 $(5,424) $136,398 $(16,836)
Net income 41,558 -- -- -- 41,558 -- $41,558
Foreign currency translation
adjustments 2,484 -- -- 2,484 -- -- 2,484
-------
Comprehensive income -- -- -- -- -- -- $44,042
=======
Common stock issued under
stock option plans 1,397 0 1,397 -- -- --
Value of Restricted Stock
Units (2) 2,089 -- 2,089 -- -- --
-------- ---- -------- ------- -------- --------
Balance, September 30, 2002 $469,461 $159 $311,122 $(2,940) $177,956 $(16,836)
======== ==== ======== ======= ======== ========

Balance, January 1, 2003 $489,870 $161 $312,393 $(5,148) $199,300 $(16,836)
Net income 17,997 -- -- -- 17,997 -- $17,997
Foreign currency translation
adjustments 5,061 -- -- 5,061 -- -- 5,061
-------
Comprehensive income -- -- -- -- -- -- $23,058
=======
Common stock issued under
stock option plans 1,641 0 1,602 -- -- 39
Value of Restricted Stock
Units (3) 1,434 -- 1,434 -- -- --
-------- ---- -------- ------- -------- --------
Balance, September 30, 2003 $516,003 $161 $315,429 $ (87) $217,297 $(16,797)
======== ==== ======== ======= ======== ========




(1) Represents cumulative foreign currency translation adjustments and minimum
pension liability adjustments.
(2) Shares of common stock will be issued in respect of restricted stock units
granted pursuant to EMCOR's Executive Stock Bonus Plan. This amount
represents the value of restricted stock units at the date of grant plus
the related compensation expense recorded in 2002 due to an increase in
market value of the underlying common stock. As of October 2002, the terms
of the Executive Stock Bonus Plan were changed resulting in prospective
fixed plan accounting for both existing and new grants.
(3) Shares of common stock will be issued in respect of restricted stock units.
This amount represents the value of restricted stock units at the date of
grant.


See Notes to Condensed Consolidated Financial Statements.







EMCOR Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE A Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared
by EMCOR Group, Inc. and Subsidiaries ("EMCOR"), without audit, pursuant to the
interim period reporting requirements of Form 10-Q. Consequently, certain
information and note disclosures normally included in financial statements
prepared in conformity with accounting principles generally accepted in the
United States have been condensed or omitted. Readers of this report should
refer to the consolidated financial statements and the notes thereto included in
EMCOR's latest Annual Report on Form 10-K filed with the Securities and Exchange
Commission.

In the opinion of EMCOR, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting only of a normal
recurring nature) necessary to present fairly the financial position of EMCOR
and the results of its operations. The results of operations for the three and
nine month periods ended September 30, 2003 are not necessarily indicative of
the results to be expected for the year ending December 31, 2003.

On March 1, 2002, EMCOR acquired from Comfort Systems USA, Inc. ("CSU") a group
of companies (the "Acquired Comfort Companies"). On December 19, 2002, EMCOR
acquired all the capital stock of Consolidated Engineering Services, Inc.
("CES") from Archstone-Smith Operating Trust and others. EMCOR acquired two
additional companies during 2002. These acquisitions were accounted for by the
purchase method, and the purchase prices have been allocated to the assets
acquired and liabilities assumed, based upon the estimated fair values of these
assets and liabilities at their respective dates of acquisition. The CES
purchase price allocation is preliminary and subject to finalization, which
could lead to the recognition of additional intangible assets subject to
amortization.

Certain reclassifications of prior year amounts have been made to conform to
current year presentation.

NOTE B New Accounting Pronouncements

In November 2002, the Financial Accounting Standards Board (the "FASB") issued
Financial Accounting Standards Board Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, an Interpretation of FASB Statements No.
5, 57, and 107 and Rescission of FASB Interpretation No. 34" ("FIN 45" or the
"Interpretation"). FIN 45 clarifies the requirements of FASB Statement of
Financial Accounting Standards No. 5, "Accounting for Contingencies," relating
to the guarantor's accounting for, and disclosure of, the issuance of certain
types of guarantees. FIN 45 may require that, upon issuance of a guarantee, the
guarantor recognize a liability for the fair value of the obligation it assumes
under that guarantee. The disclosure provisions of the Interpretation are
effective for financial statements of interim or annual periods that end after
December 15, 2002. The Interpretation's provisions for initial recognition and
measurement should be applied on a prospective basis to guarantees issued or
modified after December 31, 2002, irrespective of the guarantor's fiscal year
end. The guarantor's previous accounting for guarantees that were issued before
the date of FIN 45's initial application may not be revised or restated to
reflect the effect of the recognition and measurement provisions of the
Interpretation. EMCOR has determined that the adoption of FIN 45 only impacted
disclosures and the accounting for guarantees was not impacted as of September
30, 2003.


In January 2003, the FASB issued Statement of Financial Accounting Standards No.
148, "Accounting for Stock-Based Compensation - Transition and Disclosure"
("SFAS 148"). SFAS 148 amends FASB Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123") to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, SFAS
148 amends the disclosure requirements of SFAS 123 to require prominent
disclosures in both annual and interim financial statements of the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. SFAS 148 is effective for fiscal years beginning after
December 15, 2002 and was adopted by EMCOR for all periods presented herein.
EMCOR did not change to the fair value based method of accounting for
stock-based employee compensation; therefore, adoption of SFAS 148 has impacted
disclosures, not the financial results, of EMCOR.


In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 expands upon and strengthens
existing accounting guidance that addresses when a company should include in its
financial statements the assets, liabilities and activities of another entity. A
variable interest entity is a corporation, partnership, trust, or any other
legal structure used for business purposes that either (a) does not have equity
investors with voting rights or (b) has equity investors that do not provide
sufficient financial resources for the entity to support its activities. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or is entitled to receive a majority of the entity's
residual returns or both. FIN 46 is effective for all new variable interest
entities created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions of FIN 46
must be applied for the first interim or annual period ending after December 15,
2003. EMCOR is currently evaluating the effect the adoption of the provisions of
FIN 46 will have on EMCOR's consolidated financial condition or results of
operations.


In April 2003, the FASB issued Statement of Financial Accounting Standards No.
149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" ("SFAS 149"). SFAS 149 amends and clarifies accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under SFAS 133. The new guidance
amends SFAS 133 for decisions made: (a) as part of the Derivatives
Implementation Group process that effectively required amendments to SFAS 133,
(b) in connection with other FASB projects dealing with financial instruments,
and (c) regarding implementation issues raised in relation to the application of
the definition of a derivative. The amendments set forth in SFAS 149 improve
financial reporting by requiring that contracts with comparable characteristics
be accounted for similarly. SFAS 149 is generally effective for contracts
entered into or modified after June 30, 2003 and for hedging relationships
designated after June 30, 2003. EMCOR has determined that the provisions of SFAS
149 will have no effect on EMCOR's consolidated financial position, results of
operations or cash flows.

In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, "Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity" ("SFAS 150"). SFAS 150 requires certain financial
instruments that embody obligations of the issuer and have characteristics of
both liabilities and equity to be classified as liabilities. The provisions of
SFAS 150 are effective for financial instruments entered into or modified after
May 31, 2003 and to all other instruments that exist as of the beginning of the
first interim financial reporting period beginning after June 15, 2003. EMCOR
does not have any financial instruments that meet the provisions of SFAS 150;
therefore, EMCOR has determined that the provisions of SFAS 150 will have no
effect on EMCOR's consolidated financial position, results of operations or cash
flows.






NOTE C Earnings Per Share

Calculation of Basic and Diluted Earnings per share

The following tables summarize EMCOR's calculation of Basic and Diluted Earnings
per Share ("EPS") for the three and nine month periods ended September 30, 2003
and 2002:
Three months ended
September 30, 2003
-------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
-------------------------------------------

Basic EPS
Income available to common
stockholders $6,468,000 15,003,737 $0.43
=====
Effect of Dilutive Securities:
Options -- 457,369
---------- ----------
Diluted EPS $6,468,000 15,461,106 $0.42
========== ========== =====


Nine months ended
September 30, 2003
-------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
-------------------------------------------

Basic EPS
Income available to common
stockholders $17,997,000 14,974,590 $1.20
=====
Effect of Dilutive Securities:
Options -- 497,121
----------- ----------
Diluted EPS $17,997,000 15,471,711 $1.16
=========== ========== =====






NOTE C Earnings Per Share - (Continued)

Three months ended
September 30, 2002
--------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
--------------------------------------------

Basic EPS
Income available to common
stockholders $19,479,000 14,905,849 $1.31
=====
Effect of Dilutive Securities:
Options -- 560,118
----------- ----------
Diluted EPS $19,479,000 15,465,967 $1.26
=========== ========== =====


Nine months ended
September 30, 2002
--------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
--------------------------------------------

Basic EPS
Income available to common
stockholders $41,558,000 14,866,212 $2.80
=====
Effect of Dilutive Securities:
Options -- 590,183
----------- ----------
Diluted EPS $41,558,000 15,456,395 $2.69
=========== ========== =====


There were options to purchase 425,499 shares and 227,730 shares of common stock
outstanding during the three and nine month periods ended September 30, 2003,
respectively, which options were anti-dilutive and required to be excluded from
the calculation of diluted EPS. There were no anti-dilutive stock options that
were required to be excluded from the calculation of diluted EPS for the three
and nine month periods ended September 30, 2002.





NOTE D Valuation of Stock Option Grants

At September 30, 2003, EMCOR had several stock-based compensation plans and
programs. EMCOR applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB 25") and related interpretations in
accounting for its stock options. Accordingly, no compensation cost has been
recognized in the accompanying Condensed Consolidated Statements of Operations
for the three and nine month periods ended September 30, 2003 and 2002 in
respect of stock options granted during those periods inasmuch as EMCOR grants
stock options at fair market value. Had compensation cost for these options been
determined consistent with SFAS 123 and SFAS 148, EMCOR's net income, basic
earnings per share ("Basic EPS") and diluted earnings per share ("Diluted EPS")
would have been reduced from the "as reported amounts" below to the "pro forma
amounts" below for the three and nine months ended September 30, 2003 and 2002
(in thousands, except per share amounts):



For the three months For the nine months
ended Sept. 30, ended Sept. 30,
-------------------- -------------------
2003 2002 2003 2002
---- ---- ---- ----

Net income:
As reported..................................................... $6,468 $19,479 $17,997 $41,558
Less: Total stock-based compensation expense determined
under a fair value based method, net of related tax effects.. 80 280 713 2,548
------ ------- ------- -------
Pro Forma....................................................... $6,388 $19,199 $17,284 $39,010
====== ======= ======= =======

Basic EPS:
As reported..................................................... $ 0.43 $ 1.31 $ 1.20 $ 2.80
Pro Forma....................................................... $ 0.43 $ 1.29 $ 1.15 $ 2.62
Diluted EPS:
As reported..................................................... $ 0.42 $ 1.26 $ 1.16 $ 2.69
Pro Forma....................................................... $ 0.41 $ 1.24 $ 1.12 $ 2.52


Common Stock

As of September 30, 2003 and December 31, 2002, 15,014,199 and 14,918,877 shares
of EMCOR common stock were outstanding, respectively.

NOTE E Long-Term Debt

Long-term debt in the accompanying Condensed Consolidated Balance Sheets
consisted of the following amounts (in thousands):

Sept. 30, Dec. 31,
2003 2002
--------- --------
Notes Payable at 10.0%, due 2003 $ -- $21,815
Capitalized lease obligations 540 351
Other 626 1,015
------ -------
1,166 23,181
Less: current maturities 544 22,276
------ -------
$ 622 $ 905
====== =======

The Notes Payable of $21.8 million at December 31, 2002 were notes made by CSU
to former owners of certain Acquired Comfort Companies, which notes were assumed
by EMCOR in connection with the acquisition of the Acquired Comfort Companies.
The Notes Payable accrued interest at 10.0% per annum and were paid in full in
April 2003.





NOTE F Segment Information

EMCOR has the following reportable segments which provide services associated
with the design, integration, installation, startup, operation and maintenance
of various systems: United States electrical construction and facilities
services (systems for generation and distribution of electrical power; lighting
systems; low voltage systems such as fire alarm, security, communications and
process control systems; and voice and data systems), United States mechanical
construction and facilities services (systems for heating, ventilation, air
conditioning, refrigeration and clean room ventilation systems; and plumbing,
process and high-purity piping systems), United States facilities services,
Canada construction and facilities services, United Kingdom construction and
facilities services, and Other international construction and facilities
services. The segment "United States facilities services" principally consists
of those operations which primarily provide a portfolio of services needed to
support the operation and maintenance of customers' facilities (mobile operation
and maintenance services, site-based operation and maintenance services, call
center services, facility planning and consulting and energy management
programs) which services are not related to customers' construction programs.
The Canada, United Kingdom and Other international segments perform electrical
construction, mechanical construction and facilities services. "Other
international construction and facilities services" represents EMCOR's
operations outside of the United States, Canada, and the United Kingdom
(primarily in South Africa and the Middle East during the periods presented).

The following tables present information about industry segments and geographic
areas. The tables also present pro forma revenues and operating income as if the
2002 acquisitions had occurred at the beginning of fiscal 2002. Certain
reclassifications of prior year amounts have been made to conform to current
year segment presentation. The unaudited pro forma revenues and operating income
are not necessarily indicative of future operating results (in thousands):



For the three months ended September 30,
As Reported Pro Forma
----------------------- ----------
2003 2002 2002
---------- ---------- ----------

Revenues from unrelated entities:
United States electrical construction and facilities services $ 354,341 $ 291,999 $ 292,189
United States mechanical construction and facilities services 422,015 454,123 462,464
United States facilities services 162,474 70,740 169,570
---------- ---------- ----------
Total United States operations 938,830 816,862 924,223
Canada construction and facilities services 83,222 91,329 91,329
United Kingdom construction and facilities services 135,536 144,094 144,094
Other international construction and facilities services -- -- --
---------- ---------- ----------
Total worldwide operations $1,157,588 $1,052,285 $1,159,646
========== ========== ==========


Total revenues:
United States electrical construction and facilities services $ 358,721 $ 307,497 $ 307,687
United States mechanical construction and facilities services 426,111 454,915 463,256
United States facilities services 162,760 71,164 169,994
Less intersegment revenues (8,762) (16,714) (16,714)
---------- ---------- ----------
Total United States operations 938,830 816,862 924,223
Canada construction and facilities services 83,222 91,329 91,329
United Kingdom construction and facilities services 135,536 144,094 144,094
Other international construction and facilities services -- -- --
---------- ---------- ----------
Total worldwide operations $1,157,588 $1,052,285 $1,159,646
========== ========== ==========







NOTE F Segment Information - (Continued)



For the nine months ended September 30,
As Reported Pro Forma
----------------------- ----------
2003 2002 2002
---------- ---------- ----------

Revenues from unrelated entities:
United States electrical construction and facilities services $ 930,250 $ 864,879 $ 867,111
United States mechanical construction and facilities services 1,264,606 1,203,663 1,330,321
United States facilities services 495,663 174,993 457,520
---------- ---------- ----------
Total United States operations 2,690,519 2,243,535 2,654,952
Canada construction and facilities services 267,548 229,980 229,980
United Kingdom construction and facilities services 404,929 375,468 375,468
Other international construction and facilities services -- -- --
---------- ---------- ----------
Total worldwide operations $3,362,996 $2,848,983 $3,260,400
========== ========== ==========


Total revenues:
United States electrical construction and facilities services $ 950,796 $ 889,244 $ 891,476
United States mechanical construction and facilities services 1,271,308 1,206,070 1,332,728
United States facilities services 497,026 176,639 459,166
Less intersegment revenues (28,611) (28,418) (28,418)
---------- ---------- ----------
Total United States operations 2,690,519 2,243,535 2,654,952
Canada construction and facilities services 267,548 229,980 229,980
United Kingdom construction and facilities services 404,929 375,468 375,468
Other international construction and facilities services -- -- --
---------- ---------- ----------
Total worldwide operations $3,362,996 $2,848,983 $3,260,400
========== ========== ==========






For the three months ended September 30,
As Reported Pro Forma
----------------------- ----------
2003 2002 2002
---------- ---------- ----------

Operating income (loss):
United States electrical construction and facilities services $ 14,899 $ 21,855 $ 21,878
United States mechanical construction and facilities services 3,688 15,751 16,344
United States facilities services 5,589 2,897 9,428
---------- ---------- ----------
Total United States operations 24,176 40,503 47,650
Canada construction and facilities services 1,350 1,276 1,276
United Kingdom construction and facilities services (3,174) 435 435
Other international construction and facilities services 131 142 142
Corporate administration (8,948) (6,498) (6,498)
---------- ---------- ----------
Total worldwide operations 13,535 35,858 43,005

Other corporate items:
Interest expense (2,131) (1,411) (3,108)
Interest income 144 338 339
---------- ---------- ----------
Income before income taxes $ 11,548 $ 34,785 $ 40,236
========== ========== ==========









For the nine months ended September 30,
As Reported Pro Forma
----------------------- ----------
2003 2002 2002
---------- ---------- ----------

Operating income (loss):
United States electrical construction and facilities services $ 44,017 $ 52,814 $ 53,139
United States mechanical construction and facilities services 14,267 41,563 43,697
United States facilities services 12,328 2,377 19,559
---------- ---------- ----------
Total United States operations 70,612 96,754 116,395
Canada construction and facilities services 3,116 1,510 1,510
United Kingdom construction and facilities services (10,514) 88 88
Other international construction and facilities services 19 85 85
Corporate administration (25,467) (23,124) (23,124)
---------- ---------- ----------
Total worldwide operations 37,766 75,313 94,954

Other corporate items:
Interest expense (6,159) (2,751) (7,681)
Interest income 528 1,650 1,656
---------- ---------- ----------
Income before income taxes $ 32,135 $ 74,212 $ 88,929
========== ========== ==========







Sept. 30, Dec. 31,
2003 2002
---------- ----------

Total assets:
United States electrical construction and facilities services $ 376,473 $ 308,752
United States mechanical construction and facilities services 807,712 810,498
United States facilities services 276,653 292,218
---------- ----------
Total United States operations 1,460,838 1,411,468
Canada construction and facilities services 100,553 77,727
United Kingdom construction and facilities services 178,573 191,563
Other international construction and facilities services 4,301 5,071
Corporate administration 94,370 72,662
---------- ----------
Total worldwide operations $1,838,635 $1,758,491
========== ==========


NOTE G Pro Forma Results of Operations

The following tables present pro forma results of operations including all
companies acquired during 2002. The results of operations presented assume the
acquisitions had occurred at the beginning of fiscal 2002. The pro forma results
of operations are not necessarily indicative of the results of operations had
the acquisitions actually occurred at the beginning of fiscal 2002, nor is it
necessarily indicative of future operating results (in thousands, except per
share data):





NOTE G Pro Forma Results of Operations - (Continued)




Adjustments to Arrive at Pro Forma Results of Operations
------------------------------------------------------------------------------------

For the three months ended
September 30, 2002
-------------------------------------------------------------------

EMCOR Other
as Reported CES (1) Acquisitions(1) Pro Forma
-------------------------------------------------------------------

Revenues $1,052,285 $105,540 $1,821 $1,159,646
Operating income $ 35,858 $ 7,125 $ 22 $ 43,005
Interest income (expense), net $ (1,073) $ (1,697) $ 1 $ (2,769)
Income before income taxes $ 34,785 $ 5,428 $ 23 $ 40,236
Net income $ 19,479 $ 3,040 $ 14 $ 22,533
Basic earnings per share $ 1.31 $ 0.20 $ 0.00 $ 1.51
Diluted earnings per share $ 1.26 $ 0.20 $ 0.00 $ 1.46





For the nine months ended
September 30, 2002
------------------------------------------------------------------------------------
Acquired
EMCOR Comfort Other
as Reported Companies(2) CES (3) Acquisitions(3) Pro Forma
------------------------------------------------------------------------------------

Revenues $2,848,983 $ 94,084 $302,112 $15,221 $3,260,400
Operating income $ 75,313 $ (40) $ 18,286 $ 1,395 $ 94,954
Interest income (expense), net $ (1,101) $ 162 $ (5,092) $ 6 $ (6,025)
Income before income taxes $ 74,212 $ 122 $ 13,194 $ 1,401 $ 88,929
Net income $ 41,558 $ 68 $ 7,389 $ 784 $ 49,799
Basic earnings per share $ 2.80 $ 0.01 $ 0.50 $ 0.05 $ 3.36
Diluted earnings per share $ 2.69 $ 0.00 $ 0.48 $ 0.05 $ 3.22




The pro forma results of operations, for segment information, is included in
Note F Segment Information.

(1) Adjustments to arrive at pro forma results of operations for the three
months ended September 30, 2002 represent results of operations from July
1, 2002 through September 30, 2002.
(2) Adjustments to arrive at pro forma results of operations for the nine
months ended September 30, 2002 represent results of operations from
January 1, 2002 through the acquisition date of March 1, 2002.
(3) Adjustments to arrive at pro forma results of operations for the nine
months ended September 30, 2002 represent results of operations from
January 1, 2002 through September 30, 2002.

NOTE H Legal Proceedings

See Part II - Other Information, Item 1 - Legal Proceedings.





ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

Highlights

Revenues of EMCOR Group, Inc. ("EMCOR") for the three months ended September 30,
2003 and 2002 were $1,157.6 million and $1,052.3 million, respectively. Net
income for the three months ended September 30, 2003 was $6.5 million compared
to net income of $19.5 million for the three months ended September 30, 2002.
Diluted Earnings Per Share ("Diluted EPS") was $0.42 per share for the three
months ended September 30, 2003 compared to Diluted EPS of $1.26 per share for
the three months ended September 30, 2002.

Revenues for the nine months ended September 30, 2003 and 2002 were $3,363.0
million and $2,849.0 million, respectively. Net income for the nine months ended
September 30, 2003 and 2002 was $18.0 million and $41.6 million, respectively.
Diluted EPS was $1.16 per share for the nine months ended September 30, 2003
compared to $2.69 per share for the same period in the prior year.

On March 1, 2002, EMCOR acquired from Comfort Systems USA, Inc. ("CSU") a group
of companies (the "Acquired Comfort Companies"). On December 19, 2002, EMCOR
acquired all the capital stock of Consolidated Engineering Services, Inc.
("CES") from Archstone-Smith Operating Trust and others. EMCOR acquired two
additional companies during 2002. These acquisitions were accounted for by the
purchase method, and the purchase prices have been allocated to the assets
acquired and liabilities assumed, based upon the estimated fair values of these
assets and liabilities at their respective dates of acquisition. The CES
purchase price allocation is preliminary and subject to finalization, which
could lead to the recognition of additional intangible assets subject to
amortization.

Operating Segments

EMCOR has the following reportable segments which provide services associated
with the design, integration, installation, startup, operation and maintenance
of various systems: United States electrical construction and facilities
services (systems for generation and distribution of electrical power; lighting
systems; low voltage systems such as fire alarm, security, communications and
process control systems; and voice and data systems), United States mechanical
construction and facilities services (systems for heating, ventilation, air
conditioning, refrigeration and clean room ventilation systems; and plumbing,
process and high-purity piping systems), United States facilities services,
Canada construction and facilities services, United Kingdom construction and
facilities services, and Other international construction and facilities
services. The segment "United States facilities services" principally consists
of those operations which primarily provide a portfolio of services needed to
support the operation and maintenance of customers' facilities (mobile operation
and maintenance services, site-based operation and maintenance services, call
center services, facility planning and consulting and energy management
programs) which services are not related to customers' construction programs.
The Canada, United Kingdom and Other international segments perform electrical
construction, mechanical construction and facilities services. "Other
international construction and facilities services" represents EMCOR's
operations outside of the United States, Canada, and the United Kingdom
(primarily in South Africa and the Middle East during the periods presented).

Results of Operations

The results presented reflect certain reclassifications of prior period amounts
to conform to current year presentation.






Revenues

The following table presents EMCOR's operating segment revenues and their
respective percentage of total revenues (in thousands, except for percentages):



For the three months ended September 30,
----------------------------------------
% of % of
2003 Total 2002 Total
---- ----- ---- -----

Revenues:
United States electrical construction and facilities services $ 354,341 31% $ 291,999 28%
United States mechanical construction and facilities services 422,015 36% 454,123 43%
United States facilities services 162,474 14% 70,740 7%
---------- ----------
Total United States operations ........................... 938,830 81% 816,862 78%
Canada construction and facilities services .............. 83,222 7% 91,329 9%
United Kingdom construction and facilities services ...... 135,536 12% 144,094 14%
Other international construction and facilities services.. -- -- -- --
---------- ----------
Total worldwide operations ............................... $1,157,588 100% $1,052,285 100%
========== ==========




For the nine months ended September 30,
---------------------------------------
% of % of
2003 Total 2002 Total
---- ----- ---- -----

Revenues:
United States electrical construction and facilities services $ 930,250 28% $ 864,879 30%
United States mechanical construction and facilities services 1,264,606 38% 1,203,663 42%
United States facilities services ........................ 495,663 15% 174,993 6%
---------- ----------
Total United States operations ........................... 2,690,519 80% 2,243,535 79%
Canada construction and facilities services .............. 267,548 8% 229,980 8%
United Kingdom construction and facilities services ...... 404,929 12% 375,468 13%
Other international construction and facilities services.. -- -- -- --
---------- ----------
Total worldwide operations ............................... $3,362,996 100% $2,848,983 100%
========== ==========


EMCOR's revenues increased $105.3 million for the three months ended September
30, 2003 compared to 2002 third quarter revenues, of which $106.6 million in
revenues was attributable to companies acquired in 2002. Revenues increased
$514.0 million for the nine months ended September 30, 2003 compared to the nine
months ended September 30, 2002, of which $421.6 million in revenues was
attributable to companies acquired in 2002. Revenues from EMCOR companies
(excluding those acquired in 2002) decreased by $1.3 million for the three month
period ended September 30, 2003 compared to the same period in the prior year,
principally due to continued recessionary economic conditions resulting in a
reduction in new commercial and industrial construction projects and
discretionary spending, typically associated with projects of less than six
months duration related to improvements, enhancements and repairs of facilities,
in the commercial office and industrial markets. However, such revenues were
positively affected by an increase in the number of longer-term transportation
infrastructure, power generation and healthcare construction projects and an
increase in the number of site-based facilities services operation and
maintenance contracts. In addition, these positive factors combined to provide a
revenues increase (after excluding revenues from companies acquired in 2002) of
$92.4 million for the nine months ended September 30, 2003 compared to the same
period in the prior year.

Revenues of United States electrical construction and facilities services
business units for the three months ended September 30, 2003 were $354.3 million
compared to $292.0 million for the three months ended September 30, 2002.
Revenues of this segment for the nine months ended September 30, 2003 were
$930.3 million compared to $864.9 million in the same period in 2002. The
revenues for the three and nine month periods ended September 30, 2003, when
compared to the same periods in 2002, reflect an increase in revenues from
transportation infrastructure programs, power generation and healthcare
projects, offset by a reduction in discretionary spending in the commercial
office and industrial markets attributable to continued recessionary economic
conditions.

Revenues of United States mechanical construction and facilities services
business units for the three months ended September 30, 2003 were $422.0 million
compared to $454.1 million for the three months ended September 30, 2002.
Revenues of this segment for the nine months ended September 30, 2003 were
$1,264.6 million compared to $1,203.7 million in the same period in the prior
year. The decrease in revenues for the three months ended September 30, 2003
compared to the same period in the prior year was due to a reduction in
discretionary spending in the commercial office and industrial markets
attributable to continued recessionary economic conditions, increased
competition, as well as a reduction in demand for services as a result of cooler
than normal weather conditions in parts of the United States. The increase in
revenues of $60.9 million for the nine month period was primarily attributable
to revenues from companies acquired in 2002.

United States facilities services revenues for the three months ended September
30, 2003 were $162.5 million compared to $70.7 million for the same three months
in 2002. Revenues for the nine months ended September 30, 2003 were $495.7
million compared to $175.0 million in the same period in 2002. The revenues
increases of $91.8 million and $320.7 million for the three and nine month
periods, respectively, were primarily attributable to revenues of $ 97.6 million
and $309.9 million, respectively, from companies acquired in 2002; the balance
of the increase in revenues for the periods ended September 30, 2003 was
attributable to increased site-based facilities operation and maintenance
services performed by EMCOR's other subsidiaries. However, the increase in
revenues was partially offset by a reduction in demand for mobile services,
which services had been adversely affected by cooler than normal weather
conditions in parts of the United States, curtailment of discretionary spending
due to the economic recession, and increased competition.

Revenues of Canada construction and facilities services for the three months
ended September 30, 2003 were $83.2 million compared to $91.3 million for the
three months ended September 30, 2002. Revenues for the nine months ended
September 30, 2003 were $267.5 million compared to $230.0 million in the same
period in the prior year. The decrease in revenues for the three month period
was primarily attributable to a temporary scale-back in work on certain
long-term power generation construction projects due to project scheduling,
partially offset by increased work on industrial outage construction projects.
The increase in revenues for the nine month period was primarily attributable to
continuing work on long-term power generation and industrial outage construction
projects.

Revenues of United Kingdom construction and facilities services business units
for the three months ended September 30, 2003 were $135.5 million compared to
$144.1 million for the three months ended September 30, 2002. Revenues for the
nine months ended September 30, 2003 were $404.9 million compared to $375.5
million in the same period in the prior year. The decrease in revenues for the
three month period was due to a managed change in bidding criteria for
construction. The increase in revenues for the nine month period was principally
attributable to an increase in contracts in the facilities services and
transportation infrastructure construction markets.

Other international construction and facilities services activities consist of
EMCOR's operations primarily in the Middle East and South Africa. All of the
current projects in these markets are being performed by joint ventures in which
EMCOR has less than majority ownership. Accordingly, the results of these joint
venture operations are accounted for under the equity method of accounting, and
revenues attributable to such joint ventures are not reflected as revenues in
the consolidated financial statements. This segment consists of operations that
represented certain historical strategic opportunities which are not currently
significant to EMCOR's operations. EMCOR continues to selectively pursue new
business in the Middle East markets; however, the availability of opportunities
has been significantly reduced as a result of local economic factors.






Cost of sales and Gross profit

The following table presents EMCOR's cost of sales, gross profit, and gross
profit as a percentage of revenues (in thousands, except for percentages):

For the three months ended
September 30,
--------------------------
2003 2002
---- ----
Cost of sales $1,039,382 $ 923,052
Gross profit $ 118,206 $ 129,233
Gross profit, as a percentage of revenues 10.2% 12.3%

For the nine months ended
September 30,
--------------------------
2003 2002
---- ----
Cost of sales $3,004,746 $2,510,148
Gross profit $ 358,250 $ 338,835
Gross profit, as a percentage of revenues 10.7% 11.9%

Gross profit (revenues less cost of sales) for the three months ended September
30, 2003 decreased $11.0 million to $118.2 million, compared to $129.2 million
of gross profit for the three months ended September 30, 2002. As a percentage
of revenues, gross profit for the three months ended September 30, 2003 and
2002, respectively, decreased to 10.2% from 12.3%. Gross profit of $358.3
million for the nine months ended September 30, 2003 was $19.4 million higher
than the $338.8 million gross profit in the same period last year. As a
percentage of revenues, gross profit decreased to 10.7% from 11.9% for the nine
months ended September 30, 2003 and 2002, respectively. The decrease in gross
profit for the three month period compared to the comparable prior year period
was due to an increase in less profitable public sector construction work and a
reduction in more profitable private sector, discretionary and small project
work in the United States due to the economic recession, unfavorable contract
performance on certain construction projects, increased competition, and market
conditions attributable to the recession not favorable to construction project
closeouts. (The foregoing factors are hereafter referred to collectively as
"Unfavorable Market Conditions.") The increase in gross profit for the nine
month period ended September 30, 2003 compared to the comparable prior year
period was attributable to acquisitions and increased facilities services work
which is generally performed at gross profit, as a percentage of revenues,
higher than construction work; this gross profit was partially offset by the
same factors that adversely affected the three month period gross profit ended
September 30, 2003. The decrease in gross profit, as a percentage of revenues,
for both the three and nine months ended September 30, 2003 was attributable to
Unfavorable Market Conditions. Companies acquired in 2002 contributed $22.1
million and $76.2 million of gross profit in the three and nine month periods
ended September 30, 2003, respectively.


Selling, general and administrative expenses

The following table presents EMCOR's selling, general and administrative
expenses, and selling, general and administrative expenses as a percentage of
revenues (in thousands, except for percentages):

For the three months ended
September 30,
--------------------------
2003 2002
---- ----

Selling, general and administrative expenses $104,671 $ 93,375
Selling, general and administrative expenses,
as a percentage of revenues 9.0% 8.9%


For the nine months ended
September 30
-------------------------
2003 2002
---- ----

Selling, general and administrative expenses $320,484 $263,522
Selling, general and administrative expenses,
as a percentage of revenues 9.5% 9.2%


Selling, general and administrative expenses for the three months ended
September 30, 2003 increased $11.3 million to $104.7 million compared to $93.4
million for the three months ended September 30, 2002. Selling, general and
administrative expenses as a percentage of revenues were 9.0% for the three
months ended September 30, 2003, compared to 8.9% for the three months ended
September 30, 2002. Selling, general and administrative expenses for the nine
months ended September 30, 2003 were $320.5 million, an increase of $57.0
million compared to $263.5 million for the nine months ended September 30, 2002.
Selling, general and administrative expenses as a percentage of revenues were
9.5% for the nine months ended September 30, 2003, compared to 9.2% for the nine
months ended September 30, 2002. For the three and nine month periods ended
September 30, 2003, respectively, selling, general and administrative expenses
included amortization expense of $0.5 million and $2.3 million attributable to
identifiable intangible assets associated with acquisitions. Selling, general
and administrative expenses (excluding companies acquired in 2002) were
approximately $87.4 million (8.3% of revenues) and $254.3 million (8.6% of
revenues) for the three and nine month periods ended September 30, 2003,
respectively, compared to $93.4 million (8.9% of revenues) and $263.5 million
(9.2% of revenues) for the three and nine months ended September 30, 2002, which
decrease in selling, general and administrative expenses was attributable to a
managed reduction of both variable and fixed expenses across EMCOR as a result
of changes in its business activities.



Operating income

The following table presents EMCOR's operating income and operating income as a
percentage of segment revenues (in thousands, except for percentages):



For the three months ended September 30,
-------------------------------------------------
% of % of
Segment Segment
2003 Revenues 2002 Revenues
---- -------- ---- --------

Operating income (loss):
United States electrical construction and facilities services $14,899 4.2% $21,855 7.5%
United States mechanical construction and facilities services 3,688 0.9% 15,751 3.5%
United States facilities services 5,589 3.4% 2,897 4.1%
------- -------
Total United States operations 24,176 2.6% 40,503 5.0%
Canada construction and facilities services 1,350 1.6% 1,276 1.4%
United Kingdom construction and facilities services (3,174) 435 0.3%
Other international construction and facilities services 131 142
Corporate administration (8,948) (6,498)
------- -------
Total worldwide operations 13,535 1.2% 35,858 3.4%

Other corporate items:
Interest expense (2,131) (1,411)
Interest income 144 338
------- -------
Income before income taxes $11,548 $34,785
======= =======








For the nine months ended September 30,
-------------------------------------------------
% of % of
Segment Segment
2003 Revenues 2002 Revenues
---- -------- ---- --------

Operating income (loss):
United States electrical construction and facilities services $44,017 4.7% $52,814 6.1%
United States mechanical construction and facilities services 14,267 1.1% 41,563 3.5%
United States facilities services 12,328 2.5% 2,377 1.4%
------- -------
Total United States operations 70,612 2.6% 96,754 4.3%
Canada construction and facilities services 3,116 1.2% 1,510 0.7%
United Kingdom construction and facilities services (10,514) 88
Other international construction and facilities services 19 85
Corporate administration (25,467) (23,124)
------- -------
Total worldwide operations 37,766 1.1% 75,313 2.6%

Other corporate items:
Interest expense (6,159) (2,751)
Interest income 528 1,650
------- -------
Income before income taxes $32,135 $74,212
======= =======



EMCOR had operating income of $13.5 million for the three months ended September
30, 2003 compared with operating income of $35.9 million for the three months
ended September 30, 2002. Operating income was $37.8 million and $75.3 million
for the nine months ended September 30, 2003 and 2002, respectively. The
decrease of $22.4 million and $37.5 million in operating income for the three
and nine month periods ended September 30, 2003 as compared to the same periods
in 2002 was due to Unfavorable Market Conditions, and a reduction in demand for
services as a result of cooler than normal weather conditions in parts of the
United States. The operating income decreases were partially offset by operating
income attributable to 2002 acquisitions of $4.8 million and $10.0 million for
the three and nine month periods ended September 30, 2003, respectively, and
operating income attributable to increased transportation infrastructure,
healthcare and institutional projects and site-based facilities management
contracts.

United States electrical construction and facilities services operating income
for the three months ended September 30, 2003 was $14.9 million or 4.2% of
revenues, compared to $21.9 million or 7.5% of revenues for the three months
ended September 30, 2002. Operating income for the nine months ended September
30, 2003 was $44.0 million, or 4.7% of revenues, compared to $52.8 million, or
6.1% of revenues, for the nine months ended September 30, 2002. The operating
income decreases of $7.0 million and $8.8 million for the three month and nine
month periods ended September 30, 2003, respectively, compared to the comparable
periods in the prior year were due to Unfavorable Market Conditions. These
operating income decreases were partially offset by significant increased
contributions from transportation infrastructure and power generation projects
in the Western United States.

United States mechanical construction and facilities services operating income
for the three months ended September 30, 2003 was $3.7 million or 0.9% of
revenues, compared to $15.8 million or 3.5% of revenues for the three months
ended September 30, 2002. Operating income for the nine months ended September
30, 2003 was $14.3 million, or 1.1% of revenues, compared to $41.6 million, or
3.5% of revenues, for the nine months ended September 30, 2002. The decrease in
operating income for both the three and nine month periods ended September 30,
2003 compared to the comparable prior year periods was attributable to
Unfavorable Market Conditions.

United States facilities services operating income was $5.6 million for the
three months ended September 30, 2003 compared to operating income of $2.9
million for the three months ended September 30, 2002. For the nine months ended
September 30, 2003 and 2002, operating income was $12.3 million and $2.4
million, respectively. The increase in operating income for the 2003 three and
nine month periods compared to the same periods in 2002 was attributable to
operating income of $4.5 million and $10.6 million, respectively, earned by
companies acquired in 2002 and to increased site-based facilities management
contracts of other EMCOR subsidiaries; however, this increase was partially
offset by a decrease in revenues derived from mobile maintenance services as a
result of the cooler than normal weather conditions in parts of the United
States and a decrease in discretionary spending related to the economic
recession, as well as certain costs related to the integration of CES primarily
incurred during the first six months of the year.

Canada construction and facilities services operating income was $1.4 million
for the three months ended September 30, 2003, compared to $1.3 million for the
three months ended September 30, 2002. For the nine months ended September 30,
2003, operating income was $3.1 million compared to operating income of $1.5
million for the same period in the prior year. The increase in operating income
for both the three and nine month periods was primarily due to operating income
earned on continuing long-term power generation construction projects and
industrial outage work.

United Kingdom construction and facilities services operating losses for the
three months ended September 30, 2003 were $3.2 million compared to operating
income of $0.4 million for the same period in the prior year. For the nine
months ended September 30, 2003, operating losses were $10.5 million compared to
operating income of $0.09 million for the same period in the prior year. The
operating losses for the three and nine months ended September 30, 2003 was
attributable to unfavorable performance of, and settlements and close-outs on,
certain projects, unfavorable market conditions and costs associated with
reorganizing operations, which losses were reduced by operating income earned on
other projects in the construction and facilities services markets.

Other international construction and facilities services operating income was
$0.1 million for the three months ended September 30, 2003 compared to operating
income of $0.1 million for three months ended September 30, 2002. For the nine
months ended September 30, 2003, operating income was $0.02 million compared to
operating income of $0.09 million for the same period in the prior year. This
segment consists of operations that represented certain historical strategic
opportunities which are not currently significant to EMCOR's operations. EMCOR
continues to selectively pursue new business in the Middle East; however, the
availability of opportunities has been significantly reduced as a result of
local economic factors.

General corporate expense for the three months ended September 30, 2003 was $8.9
million compared to $6.5 million for the three months ended September 30, 2002.
For the nine months ended September 30, 2003, general corporate expense was
$25.5 million compared to $23.1 million for the same period in the prior year.
The increase in general corporate expenses was primarily due to increased
operations support activities related to the management and integration of more
than 30 companies acquired during 2002, offset partially by cost reductions
attributable to reduced variable expenditures. Included as a component of
general corporate expense during 2002 were the effects of market value
fluctuations of shares issuable in respect of restricted stock units under the
Executive Stock Bonus Plan ("ESBP"), which plan was subject to variable plan
accounting under its then current terms. For the three months ended September
30, 2002, approximately $0.8 million of income was recorded related to the ESBP,
while for the nine months ended September 30, 2002 approximately $0.4 million of
expense had been recorded. As of October 2002, the terms of the ESBP were
changed resulting in fixed plan accounting for both existing and new grants in
respect of periods subsequent thereto.


Interest expense for the three months ended September 30, 2003 and 2002 was $2.1
million and $1.4 million, respectively. Interest expense for the nine months
ended September 30, 2003 and 2002 was $6.2 million and $2.8 million,
respectively. The increase in interest expense for both the three and nine month
periods was primarily due to $156.0 million of borrowings under the working
capital credit line for the acquisition of CES on December 19, 2002 and to
increased working capital needs related to a shift to long-term public sector
construction projects, which typically require greater working capital than
private sector projects. Interest income decreased $0.2 million and $1.1 million
for the three and nine months ended September 30, 2003, respectively, compared
to the same periods in 2002 due to less cash on hand cash used to pay a portion
of the CES acquisition price in December 2002 and cash used in operating
activities.

The income tax provision decreased to $5.1 million for the three months ended
September 30, 2003 compared to $15.3 million for the same period in 2002. For
the nine months ended September 30, 2003, the income tax provision was $14.1
million versus $32.7 million for the nine months ended September 30, 2002. The
decreases in this provision compared to the prior periods were primarily due to
reduced income before taxes. The effective income tax rate was approximately 44%
for both the three and nine months ended September 30, 2003 and 2002.

EMCOR's contract backlog was $3.1 billion at September 30, 2003 and $2.9 billion
at December 31, 2002. The $0.2 billion increase in backlog was primarily due to
an increase in backlog for the United States and the United Kingdom.

EMCOR's contract backlog at September 30, 2003 was $3.1 billion compared to $2.8
billion at September 30, 2002. The increase was primarily attributable to
backlog of $0.2 billion for CES subsidiaries acquired in 2002 and net growth in
backlog of $0.1 billion from contracts awarded to other subsidiaries in the
United States, the United Kingdom and Canada.

Liquidity and Capital Resources

The following table presents EMCOR's net cash (used in) provided by operating
activities, investing activities and financing activities (in thousands):

For the nine months ended
September 30,
-------------------------
2003 2002
---- ----
Net cash (used in) provided by operating activities $(53,186) $ 90,113
Net cash used in investing activities $(20,360) $(191,376)
Net cash provided by financing activities $ 62,605 $ 350


EMCOR's consolidated cash balance decreased by approximately $10.9 million from
$93.1 million at December 31, 2002 to $82.2 million at September 30, 2003. Net
cash used in operating activities of $53.2 million for the nine months ended
September 30, 2003 reflected a $143.3 million decrease from the $90.1 million of
net cash provided by operating activities in the same period last year. The
increase in net cash used in operating activities was primarily attributable to
a net increase in working capital requirements related to an increase in
accounts receivable and a decrease in accounts payable and contracts in
progress. Net cash used in investing activities of $20.4 million decreased by
$171.0 million compared to $191.4 million in the same period last year. The
decrease in cash used in investing activities was due primarily to payments of
$169.8 million for the acquisition of the Acquired Comfort Companies in the
first half of 2002. Net cash provided by financing activities of $62.6 million
represented a $62.3 million increase from the net cash provided by financing
activities of $0.4 million for the nine months ended September 30, 2002. The
increase in net cash provided by financing activities was primarily attributable
to an increase in borrowings under working capital credit lines, partially
offset by a reduction in net repayments of long-term debt.





The following is a summary of EMCOR's material contractual obligations and other
commercial commitments (in millions):


Payments Due by Period
----------------------
Less
Contractual than 1-3 4-5 After
Obligations Total 1 year years years 5 years
- -------------------------------- ----- ------ ----- ----- -------

Other long-term debt $ 0.6 $ 0.2 $ 0.2 $ 0.2 $ --
Capital lease obligations 0.5 0.1 0.2 0.2 --
Operating leases 128.6 36.5 50.7 24.5 16.9
Open purchase obligations (1) 638.7 431.1 207.0 0.6 --
Other long-term obligations (2) 94.4 -- 94.4 -- --
------ ------ ------ ----- -----
Total Contractual Obligations $862.8 $467.9 $352.5 $25.5 $16.9
====== ====== ====== ===== =====




Amount of Commitment Expiration by Period
-----------------------------------------
Total Less
Other Commercial Amounts than 1-3 4-5 After
Commitments Committed 1 year years years 5 years
- ----------------------------- --------- ------ ----- ----- -------

Revolving credit facility (3) $195.0 $ -- $ -- $195.0 $ --
Letters of credit 41.5 5.8 4.3 5.3 26.1
Guarantees 25.0 -- -- -- 25.0
------ ------ ------ ------ -----
Total Commercial Commitments $261.5 $ 5.8 $ 4.3 $200.3 $51.1
====== ====== ====== ====== =====


(1) Represent open purchase orders for material and subcontracting costs
related to the Company's construction and service contracts. These purchase
orders are not reflected in EMCOR's consolidated balance sheet and should
not impact future cash flows as amounts will be recovered through customer
billings.
(2) Represent primarily insurance related liabilities, the timing for which
payments beyond one year is not practical to estimate.
(3) EMCOR classifies these borrowings as short-term on its consolidated balance
sheet because of EMCOR's intent and ability to repay the amounts on a
short-term basis. The revolving credit facility expires in September 2007.

As of September 30, 2003, EMCOR's total borrowing capacity under its revolving
credit facility was $350.0 million. EMCOR had approximately $41.5 million of
letters of credit outstanding under the revolving credit facility as of that
date. The amount of borrowings outstanding under the revolving credit facility
as of September 30, 2003 and December 31, 2002 was $195.0 million and $112.0
million, respectively.

A subsidiary of EMCOR has guaranteed indebtedness of a venture in which it has a
40% interest; the other venture partner, Baltimore Gas and Electric, has a 60%
interest. The venture designs, constructs, owns, operates, leases and maintains
facilities to produce chilled water for sale to customers for use in air
conditioning of commercial properties. These guarantees are not expected to have
a material effect on EMCOR's financial position or results of operations. Each
of the venturers is jointly and severally liable, in the event of default, for
the venture's $25.0 million borrowing due December 2031. During September 2002,
each venture partner contributed equity to the venture, of which EMCOR's
contribution was $14.0 million.

There are $0.5 million in current maturities of EMCOR's long-term debt and
capital lease obligations outstanding as of September 30, 2003.

EMCOR is contingently liable to sureties in respect of performance and payment
bonds issued by sureties, usually at the request of customers in connection with
construction projects which secure EMCOR payment and performance obligations
under contracts for such projects. In addition, at the request of labor unions
representing certain EMCOR employees, bonds are sometimes provided to secure
obligations for wages and benefits payable to or for such employees. As of
September 30, 2003 sureties had issued bonds for the account of EMCOR in the
aggregate amount of approximately $2.0 billion. The bonds are issued by EMCOR's
sureties in return for a premium which can vary depending on the size and type
of the bonds. The largest individual bond is approximately $170.0 million. EMCOR
has agreed to indemnify the sureties for any payments made by them in respect of
bonds issued on EMCOR's behalf.

EMCOR does not have any other material financial guarantees or off-balance sheet
arrangements other than those disclosed herein.

The primary source of liquidity for EMCOR has been, and is expected to continue
to be, cash generated by operating activities. EMCOR also maintains a 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 EMCOR 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. EMCOR may also increase liquidity through an equity
offering or other debt instruments. Short-term changes in macroeconomic trends
may have an affect, positively or negatively, on liquidity. In addition to
managing borrowings, EMCOR's focus on the facilities services market is intended
to provide an additional buffer against economic downturns as the facilities
services market is characterized by annual and multi-year contracts that provide
a more predictable stream of cash flow than the construction market. The
acquisition in December 2002 of CES, which is primarily focused on the
facilities services market, is part of EMCOR's plan to grow its facilities
services business. Short-term liquidity is also impacted by the type and length
of construction contracts in place. During economic downturns, such as the 2001
through 2003 period, construction contracts trend away from short-cycle
contracts toward larger long-term infrastructure and public sector contracts.
Performance of long duration contracts typically require working capital until
initial billing milestones are achieved. While EMCOR strives to maintain a net
over-billed position with its customers, there can be no assurance that a net
over-billed position can be maintained. EMCOR's 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, was $99.7 million and $127.3 million as of September 30,
2003 and December 31, 2002, respectively.

Long-term liquidity requirements can be expected to be met through cash
generated from operating activities, the revolving credit facility, and the sale
of various secured or unsecured debt and/or equity interests in the public and
private markets. Based upon EMCOR's current credit ratings and financial
position, EMCOR can reasonably expect to be able to issue long-term debt
instruments and/or equity. Over the long term, EMCOR's primary revenue risk
factor continues to be the level of demand for non-residential construction
services, which is in turn influenced by macroeconomic trends including interest
rates and governmental economic policy. In order to provide protection against
negative demand cycles in private sector construction services, EMCOR has
increased its participation, and its backlog of contracts, in the public sector
and in the facilities services market.

EMCOR believes that current cash balances and borrowing capacity available under
its existing line of credit or other forms of financing available through debt
or equity offerings, combined with cash expected to be generated from
operations, will be sufficient to provide short-term and foreseeable long-term
liquidity and meet expected capital expenditure requirements. However, EMCOR is
a party to lawsuits and other proceedings in which other parties seek to recover
from it amounts ranging from a few thousand dollars to over $60.0 million. If
EMCOR was required to pay damages in one or more such proceedings, such payments
could have a material adverse effect on its financial position, results of
operations and/or cash flows.

Certain Insurance Matters

As of September 30, 2003 and December 31, 2002, EMCOR utilized approximately
$33.2 million and $24.5 million, respectively, of letters of credit issued
pursuant to its revolving credit facility as collateral for its insurance
obligations.







Application of Critical Accounting Policies

The condensed consolidated financial statements are based on the application of
significant accounting policies, which require management to make significant
estimates and assumptions. EMCOR's significant accounting policies are described
in Note B - Summary of Significant Accounting Policies of the notes to
consolidated financial statements included in Item 8 of its annual report on
Form 10-K for the year ended December 31, 2002. There was no initial adoption of
any accounting policies during the three and nine months ended September 30,
2003 other than those listed under "New Accounting Pronouncements" below. EMCOR
believes that some of the more critical judgment areas in the application of
accounting policies that affect its financial condition and results of
operations are 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) intangible assets.

Revenue Recognition for Long-term Construction Contracts and Services Contracts

EMCOR believes its most critical accounting policy is revenue recognition from
long-term construction contracts for which EMCOR uses the
percentage-of-completion method of accounting. Percentage-of-completion
accounting is the prescribed method of accounting for long-term contracts in
accordance with accounting principles generally accepted in the United States,
Statement of Position No. 81-1, "Accounting for Performance of Construction -
Type and Certain Production - Type Contracts" and, accordingly, the method used
for revenue recognition within EMCOR's industry. Percentage-of-completion for
each contract is measured principally by the ratio of costs incurred to date for
each contract to the estimated total costs for such contract at completion.
Certain of EMCOR's 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. Provisions
for the entirety of estimated losses on uncompleted contracts are made in the
period in which such losses are determined. Application of
percentage-of-completion accounting results in the recognition of costs and
estimated earnings in excess of billings on uncompleted contracts in EMCOR's
consolidated balance sheets. Costs and estimated earnings in excess of billings
on uncompleted contracts reflected in the consolidated balance sheets arise when
revenues have been 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 EMCOR seeks or
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. Such amounts are recorded at estimated net realizable
value and take into account factors that may affect the ability to bill and
collect amounts billed. Due to uncertainties inherent within estimates employed
to apply percentage-of-completion accounting, estimates may be revised as
project work progresses. Application of percentage-of-completion accounting
requires that the impact of those revised estimates be reported in the
consolidated financial statements prospectively.

In addition to revenue recognition for long-term construction contracts, EMCOR
recognizes revenues from services contracts as these services are performed in
accordance with Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements" ("SAB 101"). There are two basic types of services: (1)
those provided pursuant to fixed price services contracts which are signed in
advance for operation and maintenance services work over periods typically
ranging from one to three years (for which EMCOR employees may be assigned to
the customer's site full time) and (2) services for similar operation and
maintenance services work performed on an as needed basis. Fixed price services
contracts are generally performed evenly over the contract period, and
accordingly, revenue is recognized on a pro-rata basis over the term of the
contract. Revenues derived from other services are recognized when the services
are rendered in accordance with SAB 101. Expenses related to service contracts
are recognized as services are provided.





Accounts Receivable

EMCOR is required to estimate the collectibility of accounts receivable. A
considerable amount of judgment is required in assessing the realization of
receivables, which assessment factors include the creditworthiness of the
customer, EMCOR's prior collection history with the customer and related aging
of past due balances. At September 30, 2003 and December 31, 2002, accounts
receivable of $1,012.9 million and $965.0 million, respectively, included
allowances of $41.9 million and $40.6 million, respectively. Specific accounts
receivable are evaluated when EMCOR believes a customer may not be able to meet
its financial obligations due to a deterioration of its financial condition,
credit ratings or bankruptcy. The allowance requirements are based on the best
facts available and are re-evaluated and adjusted as additional information is
received.

Insurance Liabilities

EMCOR has deductibles for certain workers' compensation, auto liability, general
liability and property claims, has self-insured retentions for certain other
casualty claims, and is self-insured for employee-related health care claims.
Losses are recorded based upon estimates of the liability for claims incurred
and an estimate of claims incurred but not reported. The liabilities are derived
from known facts, historical trends and industry averages utilizing the
assistance of an actuary to determine the best estimate of these obligations.
EMCOR believes its recorded liabilities 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 actual experience differs from the
assumptions and estimates used for recording the liabilities, adjustments may be
required and recorded in the period that the experience becomes known.

Income Taxes

EMCOR has net deferred tax assets primarily resulting from deductible temporary
differences, which will reduce taxable income in future periods. A valuation
allowance is required when it is more likely than not that all or a portion of a
deferred tax asset will not be realized. As of September 30, 2003 and December
31, 2002, the total valuation allowance on net deferred tax assets was
approximately $2.1 million.

Intangible Assets

As of September 30, 2003, EMCOR had goodwill and net identifiable intangible
assets of $293.5 million and $11.6 million, respectively, in connection with the
acquisition of certain companies. 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. Certain of these forecasts reflect assumptions regarding the
ability to successfully integrate acquired companies. Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS
142") requires goodwill to be tested for impairment under certain circumstances,
and written down when impaired, rather than being amortized as previous
standards required. Furthermore, SFAS 142 requires identifiable intangible
assets other than goodwill to be amortized over their useful lives unless their
lives are determined to be indefinite. Changes in strategy and/or market
conditions may result in adjustments to identifiable intangible asset balances.
As of September 30, 2003, no indicators of impairment of EMCOR's goodwill or
identifiable intangible assets existed in accordance with the provisions of SFAS
142.

New Accounting Pronouncements

In November 2002, the Financial Accounting Standards Board (the "FASB") issued
Financial Accounting Standards Board Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, an Interpretation of FASB Statements No.
5, 57, and 107 and Rescission of FASB Interpretation No. 34" ("FIN 45" or the
"Interpretation"). FIN 45 clarifies the requirements of FASB Statement of
Financial Accounting Standards No. 5, "Accounting for Contingencies," relating
to the guarantor's accounting for, and disclosure of, the issuance of certain
types of guarantees. FIN 45 may require that, upon issuance of a guarantee, the
guarantor recognize a liability for the fair value of the obligation it assumes
under the guarantee. The disclosure provisions of the Interpretations are
effective for financial statements of interim or annual periods that end after
December 15, 2002. The Interpretation's provisions for initial recognition and
measurement should be applied on a prospective basis to guarantees issued or
modified after December 31, 2002, irrespective of the guarantor's fiscal year
end. The guarantor's previous accounting for guarantees that were issued before
the date of FIN 45's initial application may not be revised or restated to
reflect the effect of the recognition and measurement provisions of the
Interpretation. EMCOR has determined that the adoption of FIN 45 only impacted
its disclosures and the accounting for guarantees was not impacted as of
September 30, 2003.

In January 2003, the FASB issued Statement of Financial Accounting Standards No.
148, "Accounting for Stock-Based Compensation - Transition and Disclosure"
("SFAS 148"). SFAS 148 amends FASB Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123") to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, SFAS
148 amends the disclosure requirements of SFAS 123 to require prominent
disclosures in both annual and interim financial statements of the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. SFAS 148 was effective for fiscal years beginning
after December 15, 2002 and was adopted by EMCOR for all periods presented.
EMCOR did not change to the fair value based method of accounting for
stock-based employee compensation, and accordingly, adoption of SFAS 148 has
impacted only disclosures, not the financial results, of EMCOR.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 expands upon and strengthens
existing accounting guidance that addresses when a company should include in its
financial statements the assets, liabilities and activities of another entity. A
variable interest entity is a corporation, partnership, trust, or any other
legal structure used for business purposes that either (a) does not have equity
investors with voting rights or (b) has equity investors that do not provide
sufficient financial resources for the entity to support its activities. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or is entitled to receive a majority of the entity's
residual returns or both. FIN 46 is effective for all new variable interest
entities created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions of FIN 46
must be applied for the first interim or annual period ending after December 15,
2003. EMCOR is currently evaluating the effect the adoption of the provisions of
FIN 46 will have on EMCOR's consolidated financial condition or results of
operations.

In April 2003, the FASB issued Statement of Financial Accounting Standards No.
149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" ("SFAS 149"). SFAS 149 amends and clarifies accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under SFAS 133. The new guidance
amends SFAS 133 for decisions made: (a) as part of the Derivatives
Implementation Group process that effectively required amendments to SFAS 133,
(b) in connection with other FASB projects dealing with financial instruments,
and (c) regarding implementation issues raised in relation to the application of
the definition of a derivative. The amendments set forth in SFAS 149 improve
financial reporting by requiring that contracts with comparable characteristics
be accounted for similarly. SFAS 149 is generally effective for contracts
entered into or modified after June 30, 2003 and for hedging relationships
designated after June 30, 2003. EMCOR has determined that the provisions of SFAS
149 will have no affect on EMCOR's consolidated financial position, results of
operations or cash flows.

In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, "Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity" ("SFAS 150"). SFAS 150 requires certain financial
instruments that embody obligations of the issuer and have characteristics of
both liabilities and equity to be classified as liabilities. The provisions of
SFAS 150 are effective for financial instruments entered into or modified after
May 31, 2003 and to all other instruments that exist as of the beginning of the
first interim financial reporting period beginning after June 15, 2003. EMCOR
does not have any financial instruments that meet the provisions of SFAS 150;
therefore, EMCOR has determined that the provisions of SFAS 150 will have no
effect on EMCOR's consolidated financial position, results of operations or cash
flows.

This Quarterly Report on Form 10-Q contains certain forward-looking statements
within the meaning of the Private Securities Reform Act of 1995, particularly
statements regarding market opportunities, market share growth, competitive
growth, gross profit, and selling, general and administrative expenses. These
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those in any such forward-looking
statements. Such risk and uncertainties include, but are not limited to adverse
changes in general economic conditions, including changes in the specific
markets for EMCOR's services, adverse business conditions, decreased or lack of
growth in the mechanical and electrical construction and facilities services
markets, increased competition, pricing pressures, risks associated with foreign
operations and other factors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

EMCOR has not used derivative financial instruments for any purpose during the
three and nine months ended September 30, 2003 and 2002, including trading or
speculating on changes in interest rates or commodity prices of materials used
in its business.

EMCOR is exposed to market risk for changes in interest rates for borrowings
under its revolving credit facility. Borrowings under the credit facility bear
interest at variable rates, and the fair value of this borrowing is not
significantly affected by changes in market interest rates. As of September 30,
2003, there were $195.0 million of borrowings outstanding under the revolving
credit facility, and these borrowings bear interest at (1) a rate which is the
prime commercial lending rate announced by Harris Trust and Savings Bank from
time to time (4.00% at September 30, 2003) plus 0% to 1.0% based on certain
financial tests or (2) at a LIBOR rate (1.15% at September 30, 2003) plus 1.5%
to 2.5% based on certain financial tests. Based on borrowings of $195.0 million,
if interest rates were to increase by 1.0%, the net of tax interest expense
would increase $1.2 million in the next twelve months. Conversely, if interest
rates were to decrease by 1.0%, interest expense would decrease by $1.2 million
in the next 12 months. The revolving credit facility expires in September 2007.
There is no guarantee that EMCOR will be able to renew the facility at its
expiration.

EMCOR is also exposed to market risk and the market's potential related impact
on accounts receivable or costs and estimated earnings in excess of billings on
uncompleted contracts. The amounts recorded may be at risk if customers' ability
to pay these obligations is negatively impacted by economic conditions. EMCOR
continually monitors the creditworthiness of its customers and maintains
on-going discussions with customers regarding contract status with respect to
change orders and billing terms. Therefore, EMCOR believes it takes appropriate
action to manage market and other risks, but there is no assurance that it will
be able to reasonably identify all risks with respect to collectibility of these
assets. See also the previous discussion of Accounts Receivable under the
heading, "Application of Critical Accounting Policies" in the Management's
Discussion and Analysis of Results of Operations and Financial Condition.

Amounts invested in EMCOR's 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 income
(loss), a component of stockholders' equity, in its condensed consolidated
balance sheets. EMCOR believes the exposure to the effects that fluctuating
foreign currencies may have on its consolidated results of operations is limited
because the foreign operations primarily invoice customers and collect
obligations in their respective local currencies. Additionally, expenses
associated with these transactions are generally contracted and paid for in the
same local currencies.






ITEM 4. CONTROLS AND PROCEDURES

Based on an evaluation of EMCOR's disclosure controls and procedures (as defined
in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of
1934) as of the end of the period covered by this Form 10-Q as required by
paragraph (b) of Rules 13a-15 or 15d-15 promulgated under the Securities
Exchange Act of 1934, the Chairman of the Board and Chief Executive Officer of
EMCOR, Frank T. MacInnis, and the Chief Financial Officer of EMCOR, Leicle E.
Chesser, have concluded that EMCOR's disclosure controls and procedures are
effective.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings


Except as set forth below, there have been no new developments during the
quarter ended September 30, 2003 regarding legal proceedings reported in EMCOR's
Annual Report on Form 10-K for the year ended December 31, 2002.

On March 14, 2003, John Mowlem Construction plc ("Mowlem") presented a claim in
arbitration against EMCOR's United Kingdom subsidiary, Drake & Scull Engineering
Limited ("D&S"), in connection with a subcontract D&S entered into with Mowlem
with respect to a project for the United Kingdom Ministry of Defence at Abbey
Wood in Bristol, U.K. Mowlem seeks damages arising out of alleged defects in the
D&S design and construction of the mechanical and electrical engineering
services for the project. Mowlem's claim is for (pound)39.5 million
(approximately $60.9 million), which includes costs allegedly incurred by Mowlem
in connection with rectification of the alleged defects, overhead, legal fees,
delay and disruption costs related to such defects, and interest on such
amounts. The claim also includes amounts allegedly attributable to D&S in
connection with a settlement agreement Mowlem entered into with the Ministry of
Defence. D&S believes it has good and meritorious defenses to the Mowlem claim.
D&S has denied liability and has asserted a counterclaim for approximately
(pound)11.6 million (approximately $18.3 million) for certain design, labor and
delay and disruption costs incurred by D&S in connection with its subcontract
with Mowlem.

In August 2002, the Company's subsidiary Heritage Air Systems, Inc, ("Heritage")
was added as one of twenty-one defendants named in a civil action pending in the
United States District Court for the Eastern District of New York by a
competitor under the Sherman Act, 15 U.S.C. Section 1 & 2, the Clayton Act, 15
U.S.C. Section 15 & 26, The Labor Management Relations Act, 29 U.S.C. Section
187 (a), and New York state law. Plaintiff, Cool Wind Ventilation Corp., alleged
a conspiracy in restraint of trade and a monopoly in the sheet metal duct
industry in New York City and Long Island. Specifically, the plaintiff alleged
that the defendant Sheet Metal Workers International Association Local No. 28
("Local 28"), certain other trade unions, contractors, including Heritage,
building owners and building managers violated federal antitrust and federal
labor laws by entering into agreements whereby Local 28 would engage in, and to
threaten to engage in, localized and widespread picketing and work stoppages at
job sites where plaintiff or other non-Local 28 contractors were working in
order to compel mechanical contractors to stop or change the way they did
business with plaintiff and other non-Local 28 contractors. As a result of the
alleged conspiracy, plaintiff alleged that it and others were prevented from
competing in the most lucrative area of the sheet metal ductwork industry.
Heritage answered the amended complaint, denying all claims of wrongdoing. In
July 2003 the matter was settled and the action was dismissed with prejudice.
The settlement did not require Heritage to pay any damages or desist from
engaging in any of the conduct alleged in the amended complaint.









Item 6 - Exhibits and Reports on Form 8-K


(a)Exhibits
Incorporated by Reference to,
Exhibit No. Description or Page Number
- ----------- ----------- -----------------------------

3(a-1) Restated Certificate of Exhibit 3(a-1) to Form 10-K
Incorporation of EMCOR filed
December 15, 1994

3(a-2) Amendment dated November 28, 1995 Exhibit 3(a-2) to EMCOR's
to the Restated Certificate of Annual Report on Form 10-K for
Incorporation of EMCOR the year ended December 31, 1995


3(a-3) Amendment dated February 12, 1998 Exhibit 3(a-3)to EMCOR's
to the restated Certificate of Annual Report on Form 10-K for
Incorporation the year ended December 31, 1997


3(b) Amended and Restated By-Laws Exhibit 3(b) to EMCOR's
Annual Report on Form 10-K for
the year ended December 31, 1998

4.1(a) U.S. $275,000,000 Credit Agreement Exhibit 4.1(a) to EMCOR's Report
by and among EMCOR Group, Inc. and on Form 8-K dated October 4,
certain of its Subsidiaries and 2002
Harris Trust and Savings Bank
individually and as Agent
("Harris") and the Lenders which
are or become parties thereto
ated as of September 26, 2002 (the
"Credit Agreement")

4.1(b) Amendment and Waiver letter dated Exhibit 4.1(b) to EMCOR's
December 10, 2002 to the Credit Annual Report on Form 10-K for
Agreement the year ended December 31, 2002


4.1(c) First Amendment to Credit Agreement Exhibit 4.1(c) to EMCOR's
dated as of June 2003 Quarterly Report on Form 10-Q
for the quarter ended June 30,
2003


4.1(d) Second Amendment to Credit Exhibit 4.1(d) to EMCOR's
Agreement dated as of June 2003 Quarterly Report on Form 10-Q
for the quarter ended June 30,
2003






ITEM 6 - Exhibits and Reports on Form 8-K - (Continued)

Incorporated by Reference to,
Exhibit No. Description or Page Number
----------- ----------- -----------------------------

4.1(e) Commitment Amount Increase Request Exhibit 4.1(e) to EMCOR's
dated June 26, 2003 among Harris, Quarterly Report on Form 10-Q
National City Bank and EMCOR for the quarter ended June 30,
2003

4.1(f) Commitment Amount Increase Request Exhibit 4.1(f) to EMCOR's
dated June 26, 2003 among Harris, Quarterly Report on Form 10-Q
Webster Bank and EMCOR for the quarter ended June 30,
2003

4.1(g) Commitment Amount Increase Request Exhibit 4.1(g) to EMCOR's
dated June 26, 2003 among Harris, Quarterly Report on Form 10-Q
Union Bank of California, N.A. and for the quarter ended June 30,
EMCOR 2003

4.1(h) Commitment Amount Increase Request Exhibit 4.1(h) to EMCOR's
dated June 26, 2003 among Harris, Quarterly Report on Form 10-Q
Sovereign Bank and EMCOR for the quarter ended June 30,
2003

4.1(i) Commitment Amount Increase Request Exhibit 4.1(i) to EMCOR's
dated July 9, 2003 among Harris, Quarterly Report on Form 10-Q
Bank Hapoalim B.M. and EMCOR for the quarter ended June 30,
2003

4.1(j) Commitment Amount Increase Request Exhibit 4.1(j) to EMCOR's
dated July 9, 2003 among Harris, Quarterly Report on Form 10-Q
The Governor and Company of Bank for the quarter ended June 30,
of Scotland and EMCOR 2003

4.1(k) Commitment Amount Increase Request Exhibit 4.1(k) to EMCOR's
dated July 9, 2003 among Harris, Quarterly Report on Form 10-Q
U.S Bank, National Association and for the quarter ended June 30,
EMCOR 2003

10(a) 2003 Non Employee Directors' Stock Exhibit A to EMCOR's Proxy
Option Plan Statement for its Annual Meeting
of Stockholders held June 12,
2003(the "2003 Proxy Statement")

10(b) 2003 Management Stock Incentive Exhibit B to the 2003 Proxy
Plan Statement

10(c) Key Executive Incentive Bonus Plan Exhibit C to the 2003 Proxy
Statement

11 Computation of Basic Note C of the Notes
EPS and Diluted EPS to the Condensed Consolidated
for the three and nine months Financial Statements.
ended September 30, 2003
and 2002







Item 6 - Exhibits and Reports on Form 8-K - (Continued)

Incorporated by Reference to,
Exhibit No. Description or Page Number
- ----------- ----------- -----------------------------

31.1 Additional Exhibit - Page
Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of
2002 by the Chief Executive Officer

31.2 Additional Exhibit - Page
Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of
2002 by the Chief Financial Officer

32.1 Additional Exhibit Page
Certification Pursuant to Section
906 of the Sarbanes-Oxley Act of
2002 by the Chief Executive Officer

32.2 Additional Exhibit Page
Certification Pursuant to Section
906 of the Sarbanes-Oxley Act of
2002 by the Chief Financial Officer

(b) The following reports on Form 8-K were filed during the quarter ended
September 30, 2003:

(1) Current Report on Form 8-K, dated as of July 24, 2003 - Press release
dated July 24, 2003 with respect to the results of operations for
EMCOR's fiscal 2003 second quarter ended June 30, 2003.







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 23, 2003 EMCOR GROUP, INC.
--------------------------------------
(Registrant)


By: /s/FRANK T. MACINNIS
--------------------------------------
Frank T. MacInnis
Chairman of the Board of
Directors and
Chief Executive Officer


/s/LEICLE E. CHESSER
--------------------------------------
Leicle E. Chesser
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)


/s/ MARK A. POMPA
--------------------------------------
Mark A. Pompa
Senior Vice President,
Chief Accounting Officer
and Treasurer
(Principal Accounting Officer)




Exhibit 31.1


CERTIFICATION

I, Frank T. MacInnis, Chairman of the Board and Chief Executive Officer of
EMCOR Group, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of EMCOR Group,
Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report

4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d -15(e)) for the
registrant and have:

(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures as of the end of the period covered by this report
based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting and


5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):

(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and

(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.



Date: October 23, 2003 /s/ FRANK T. MACINNIS
----------------------------------------
Frank T. MacInnis
Chairman of the Board of
Directors and
Chief Executive Officer



Exhibit 31.2

CERTIFICATION

I, Leicle E. Chesser, Executive Vice President and Chief Financial Officer
of EMCOR Group, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of EMCOR Group,
Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report;

4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d -15(e)) for the
registrant and have:

(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures as of the end of the period covered by this report
based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting and

5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):

(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and

(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.



Date: October 23, 2003 /s/ LEICLE E. CHESSER
-----------------------------------
Leicle E. Chesser
Executive Vice President
and Chief Financial Officer










Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT 0F 2002


In connection with the Quarterly Report of EMCOR Group, Inc. (the
"Company") on Form 10-Q for the period ended September 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Frank T. MacInnis, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities and Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.


Date: October 23, 2003 /s/ FRANK T. MACINNIS
-----------------------------------------
Frank T. MacInnis
Chief Executive Officer


A signed original of this written statement required in Section 906 has been
provided to EMCOR Group, Inc. and will be retained by EMCOR Group, Inc. and
furnished to the Securities and Exchange Commission of its staff upon request.






Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT 0F 2002


In connection with the Quarterly Report of EMCOR Group, Inc. (the
"Company") on Form 10-Q for the period ended September 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Leicle E. Chesser, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities and Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.


Date: October 23, 2003 /s/ LEICLE E. CHESSER
-----------------------------------------
Leicle E. Chesser
Chief Financial Officer


A signed original of this written statement required in Section 906 has been
provided to EMCOR Group, Inc. and will be retained by EMCOR Group, Inc. and
furnished to the Securities and Exchange Commission of its staff upon request.