EME 10-K & 10-Q changes, risk factors and insider trading

Economic downturns, recessions, or periods of slow growth have historically led to reductions in demand for our services. Negative conditions in the credit markets, including elevated interest rates, may adversely impact our results of operations and our ability to operate our business. The level of demand from our clients for our services has been, in the past, adversely impacted by slowdowns in the industries we service, as well as in the economy in general. When the general level of economic activity has declined from historical levels, certain of our ultimate customers have delayed or canceled projects or capital spending, especially with respect to more profitable private sector work, and such slowdowns adversely affect our ability to grow, reducing our revenues and profitability. A number of economic factors, including financing conditions, the prices of commodities, and energy prices,prices have, in the past, adversely affected the industries we serve and our ultimate customers’ ability or willingness to fund expenditures. General concerns about the fundamental soundness of domestic and foreign economies may also cause ultimate customers to defer projects even if they have credit available to them. A prolonged stagnation or weakening in financial and macroeconomic conditions, potentially including higher interest rates, supply chain challenges, inflation, or geopolitical impacts, could therefore have a significant adverse effect on our revenues and profitability.

We are exposed to market risk for changes in interest rates for any borrowings under our revolving credit facility, which bear interest at variable rates. Although the Federal Reserve Board began to decreaselowered the federal funds rate in 2024 after increases in 2022 and much of 2023,2025, the pace and extent of additional decreases are uncertain. Increases in benchmark interest rates impact our interest expense and cost of capital, which may adversely impact our ability to make payments on future outstanding debt, raise funds through the issuance of debt, fund capital expenditures or meet other liquidity needs. Any of these impacts may adversely affect our liquidity, results of operations, and financial position. For further information on our credit facility and associated borrowing rates, refer to Note 9 - Debt of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data.

Certain of our businesses, including those within our United States industrial services segment, are exposed to risks associated with the oil and gas industry. These risks, which are not subject to our control, include volatility in the price and production of crude oil, the development of and consumer demand for alternative energy sources, including as a result of a change in consumer preference, or in an effort to reduce greenhouse gas emissions or combat climate change, and legislative and regulatory actions. In addition, macroeconomic conditions, influenced by a variety of events and circumstances, can also affect customer demand for our services within these businesses and lower prices and production volumes, or perceived risk thereof, typically results in the curtailment or deferral of spending by our customers. While higher prices for our customers’ products may increase demand for our services, significant increases in the price or demand for crude oil may also result in the short-term curtailment or deferral of spending by our customers, as facility downtime to perform certain of the services we provide comes at a higher opportunity cost. Volatility within these markets, including the impact of geopolitical instability (such as disruption of shipping lanes or armed conflict or instability in oil-producing nations, including Iran and Venezuela), could negatively impact our financial position, results of operations, and cash flows.

Our business is vulnerable to the cyclical nature of the marketssectors in which our clients operate and is dependent upon the timing and funding of new awards. We provide construction and maintenance services to ultimate customers operating in a number of marketssectors which have been, and we expect will continue to be, cyclical and subject to significant fluctuations due to a variety of factors beyond our control, including economic conditionsconditions, consumer demand, technology advancements, and changes in client spending. For example, capital spending on data center infrastructure to support cloud storage and artificial intelligence (“AI”) is rapidly expanding, which has increased demand for our services in recent years. If such spending were to decrease, demand for our services could decline as we transition our resources to other sectors. Regardless of economic or market conditions, investment decisions by our ultimate customers may vary by location or as a result of other factors like the availability of labor, relative construction costs, or competitive conditions in their industries. Because we are dependent on the timing and funding of new awards, we are therefore vulnerable to changes in our clients’ markets and investment decisions.

Our business may be adversely affected by significant reductions in government spending, delays or disruptions in the government appropriations process or the failure to fully fund or implement legislation such as the CHIPS and Science Act of 2022 and the Inflation Reduction Act. Some of our businesses derive a significant portion of their revenues from federal, state, and local governmental agencies. As a result, reduced or delayed spending by the federal government and/or state and local governments, potentially including the reduction or elimination of funding for projects or other benefits under relevant legislation, may have a material and adverse impact on our business, financial condition, results of operations, and cash flows. Significant reductions in spending aimed at reducing federal, state, or local budget deficits, the absence of a bipartisan agreement on the federal government's budget or raising the debt ceiling (and any disruption caused by a federal government shutdown as a result thereof), personnel reductions, elimination of government agencies or programs, the closure of government facilities and offices, the freezing or sequestration by the executive branch of congressionally-appropriated funds, or other changes in budget priorities could result in the deferral, delay, disruption, or cancellation of projects or contracts that we might otherwise have sought to perform. These potential events could impact the level of demand for our services and our ability to execute, complete, and receive compensation for our current contracts, or bid for and enter into new contracts with governmental agencies.

Volatility in the prices or availability of certain materialsmaterials, equipment, and equipmentcommodities used in our businesses and those of our customers, including as a result of inflation, supply chain disruptions, geopolitical instability, and protectionist trade measures, could adversely affect our businesses. We are exposed to market risk of increases in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in our operations. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of approximately 14,00014,400 vehicles. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable. Further, the timing of our price increases may lag the timing of the underlying increases in commodity or material prices and certain of our fixed price contracts generally do not allow us to adjust our prices. As a result, increases in material or fuel costs could reduce our profitability with respect to projects in progress. Additionally, we rely on third-party vendors and manufacturers to supply much of the materials and equipment necessary for our operations. Disruptions, shortages, or delays in the availability of such materials and equipment have had and may continuehave toadverse adverselyimpacts impacton our resultresults of operations, cash flows, and reputation with our customers. For example, in recent years, we experienced supply chain delays, including long lead times for certain materials and equipment, as well as an escalation in material and fuel prices, to varying degrees. These disruptions resulted in declines in gross profit and gross profit margin for certain of our operations. Fluctuations in the price of energy and commodity materials, whether resulting from fluctuations in market supply or demand, geopolitical conditions (including supply chain disruptions, sanctions on Russian exports as a result of Russia’s invasion of Ukraine, armed conflict between Israel and Iran,Iran or between the United States and Iran or Venezuela, and shipping lane disruptions following maritime attacks in the Gulf of Aden and the Red Sea), an increase in trade protection measures such as tariffs, or the disruption, modification, or cancellation of multilateral trade agreements, may adversely affect our customers and as a result cause them to curtail the use of our services.

On the other hand, because certain of our construction and service offerings are designed to improve energy efficiency in our clients’ operations, or to assist in the generation of new sources of renewable energy, such as wind, solar, and geothermal generation, decreases in the costs of traditional energy sources such as oilelectricity, oil, and natural gas, including as a result of recessionary pressure and reduced demand, may lower our customers’ demand for efficiency improvements and alternative energy sources, which could have an adverse effect on our financial position, results of operations, and cash flows. At the same time, the availability or price of electricity may adversely impact the buildout of certain of our customers’ projects, including data centers, which could adversely impact our business, financial position, and results of operations.

Changes in U.S. foreign trade policies, including as a result of the new presidential administration,policies could lead to the imposition of additional trade barriers and tariffs. We cannot predict the full extent of new, extended, or changed trade policies, including tariffs, that may be made by the current or a future presidential administration or Congress, including whether existing tariff policies will be maintained or modified or if changes in the U.S. trade policy could result in reactions from U.S. trading partners, such as adopting responsive trade policies making it more difficult or costly for us to purchase materials or supplies. TheseJudicial review of certain trade policies and the potential consequences of court decisions on challenges to such policies, including tariffs imposed by executive order, could result in additional changes to, or reversal of, such trade policies and practices. Changes in U.S. trade policy or in laws and policies governing foreign trade, and any resulting negative sentiments towards the United States as a result of such changes, could have an adverse impact on our business, financial position, results of operations, and liquidity.

We are a decentralized company,company which presents certain risks. While we believe decentralization has enhanced our growth and enabled us to remain responsive to opportunities and to our customers’ needs, it necessarily places significant control and decision-making powers in the hands of local management. This presents various risks, including the risk that we may be slower or less able to identify or react to external market conditions or problems affecting a key business than we would in a more centralized environment.

Our dependence upon fixed price and similar contracts could adversely affect our business. We currently generate, and expect to continue to generate, a significant portion of our revenues from fixed price and similar contracts. We must estimate the total costs of a particular project to bid for fixed priceprice, guaranteed maximum price, and similar contracts. Cost and scheduling estimates are based on a number of assumptions, including those about future economic conditions, commodity and other materials pricing, job-site productivity, cost and availability of labor, equipment, and materials, and supply chain efficiency, among other factors. The actual cost of labor and materials, however, may vary from the costs we originally estimated, something which we have experienced and may continue to experience due to inflationary pressures, supply chain challenges, and elevated interest rates. These variations, along with other risks, inherent in the execution of projects subject to fixed price contracts, may cause actual gross profits from projects to differ from those we originally estimated and could result in reduced profitability or losses on projects. Depending upon the size of a particular project, variations from the estimated contract costs can have a significant impact on our operating results for any fiscal quarter or year.

We could incur additional costs to cover certain guarantees or other contractual requirements. In some instances, we guarantee completion of a project by a specific date or price,for a maximum price. In addition, certain of our contractual arrangements guarantee the achievement of agreed upon cost savings, achievement of certain performance standards, or performance of our services at a certain standard of quality. For other arrangements, including those within our government services operations, the terms of our contracts may include provisions which require us to achieve certain minority participation or small or disadvantaged business “set-aside” goals. If we subsequently fail to meet such guarantees, or comply with such provisions, we may be held responsible for costs resulting from such failures, including payment of penalties or liquidated or other damages. To the extent that any of these events occur, the total costs of a project could exceed the original estimated costs, and we would experience reduced profits or, in some cases, a loss.

Many of our contracts, especially our building and industrial services contracts, may be canceled or delayed on short notice, and we may be unsuccessful in replacing such contracts if they are canceled or as they are completed or expire. For example, in 2024recent and 2023,years, our United States building services segment and our United Kingdom building services segmentoperations were unsuccessful in retaining certain contracts upon rebid.rebid and our industrial services operations were adversely impacted by the deferral or delay of several projects. We could experience a decrease in revenues, net income, and liquidity if any of the following occur:

Fluctuating foreign currency exchange rates could impact our financial results. WeUntil havethe sale of our United Kingdom operations inon theDecember United1, Kingdom,2025, which in 20242025 accounted for approximately 3% of our revenues.revenues, Ourour reported financial position and results of operations arewere exposed to the effects (both positive and negative) that fluctuating exchange rates havehad on the process of translating the financial statements of our United Kingdom operations, which arewere denominated in the British pound, into the U.S. dollar. The factors that impact exchange rate fluctuation, including macroeconomic and geopolitical conditions, are outside of our control.

As part of our risk management strategy, we are effectively self-insured against certain potential liabilities. Although we maintain insurance policies with respect to a broad range of risks, including automobile liability, general liability, workers’ compensation, and property damage, these policies do not cover all possible claims and certain of the policies are subject to large deductibles and retentions. In addition, we maintain a wholly-owned captive insurance subsidiary to manage certain of our insurance liabilities. Accordingly, we are effectively self-insured for a substantial number of actual and potential claims. Further, if any of our insurance carriers defaulted on its obligations to provide insurance coverage by reason of its insolvency or for other reasons, our exposure to claims would increase and our profits would be adversely affected. Our estimates for unpaid claims and expenses are based on known facts, historical trends, and industry averages, utilizing the assistance of an independent third-party actuary. The determination of such estimated liabilities and their appropriateness are reviewed and updated at least quarterly. However, these liabilities are difficult to assess and estimate due to many relevant factors, the effects of which are often unknown, including the severity of an injury or damage, the determination of liability in proportion to other parties, the timeliness of reported claims, the effectiveness of our risk management and safety programs, denial of coverage by our insurance carriers, and the terms and conditions of our insurance policies and/or customer contracts. Our accruals are based upon known facts, historical trends and our reasonable estimate of future expenses, and we believe such accruals are adequate.

Failure to provide our services in accordance with professional standards or contractual requirements could expose us to significant monetary damages. Our services often involve professional judgments regarding the planning, design, development, construction, or operations and management of complex facilities. Although we have adopted a range of insurance, risk management, and risk avoidance programs designed to reduce potential liabilities, a catastrophic event at one of our project sites or a completed project, resulting from the services we have performed, could result in significant professionalprofessional, product, and/or productpersonal liabilityinjury andliability, as well as warranty or other claims against us,us as well asand reputational harm. These liabilities could exceed our insurance limits or impact our ability to obtain insurance in the future. Further, even where insurance coverage applies, such policies have limits and deductibles or retentions, which could result in our assumption of exposure for certain amounts with respect to any claim filed against us. In addition, customers or subcontractors who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to uphold their obligations to us, or we may be liable to our customers based on the terms of our contracts, which may require us to provide indemnification to them. An uninsured claim, either in part or in whole, as well as any claim covered by insurance but subject to a policy limit, high deductible/retention, or the denial of coverage by an insurance carrier, could have a material adverse effect on our business, financial condition, and results of operations.

Our business strategy relies, in part, on acquisitions to sustain our growth, and these transactions present certain riskrisks and uncertainties. As part of our growth strategy, we acquire companies that expand, complement, and/or diversify our businesses. However, there is no guarantee that we will be successful in identifying targets that meet our requirements for acquisition. We may also face increased competition from other potential acquirersacquirers, including those who may have greater financial resources available to them or who may be in a position to offer more favorable terms to the target company. This competition may limit our ability to pursue acquisition opportunities. Additionally, circumstances beyond our control, such as elevated interest rates, inflation and potential macroeconomic disruptions, may hinder our ability to pursue and complete acquisitions. Further, realization of the anticipated benefits of an acquisitionacquisition, such as our acquisition of Miller Electric Company, and avoiding or mitigating the potential risks associated with an acquisition, will depend, among other things, upon our ability to: (a) effectively conduct due diligence to identify and mitigate potential problemsissues at companies we propose to acquire, (b) recognize incompatibilities or other obstacles to the successful integration of the acquired business with our other operations, and (c) gain greater efficiencies and scale that will translate into reduced costs or anticipated synergies in a timely manner. However, there can be no assurance that an acquisition we may make in the future will provide the benefits anticipated when entering into the transaction. Acquisitions we have completed, and future acquisitions we may make, could expose us to operational challenges and risks, including the diversion of management’s attention from our existing businesses, the failure to retain key personnel or customers of the acquired business, and the assumption of unknown liabilities of the acquired business for which there are inadequate reserves. While the former owners of an acquired company may agree as part of our purchase agreements to indemnify us against certain historical liabilities of the target company, such indemnification may be subject to time limits, deductibles, caps and exclusions, and such former owners might be unable or unwilling to uphold those obligations to us. Our ability to sustain our growth and maintain our competitive position may be affected by our ability to identify and acquire desirable businesses and successfully integrate any acquired business.

Amounts included in our remaining performance obligations may not result in actual revenues or translate into profits. Many contracts are subject to cancellation or suspension on short notice at the discretion of the client, and the contracts in our remaining performance obligations are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to the contract. The risk of contracts included in our remaining performance obligations being delayed or canceled generally increases during economic slowdowns, periods of restrictive credit markets, or in response to significant fluctuations in commodity prices. Accordingly, there is no assurance that revenue from remaining performance obligations willmay actuallynot be realized. If our remaining performance obligations fail to materialize, we could experience a decline in profitability, which could result in a deterioration of our financial position and liquidity.

We are increasingly dependent on sophisticated information technology systems; our business and results of operations are subject to adverse impacts due to the disruption, failure, or breaches of these systems. We and our customers and third-party providers rely on information technology systems, hardware, and software, including third-party “cloud based” systems, to run critical accounting, project management, and financial information systems. We rely upon security measures, systems redundancy, and third-party products and services to attempt to secure our information technology systems and the confidential, proprietary, and sensitive information they contain. However, our information technology systems and data, and that of our customers and third-party providers, are subject to cybersecurity incidents, such as hacking, computer viruses or other malicious or destructive software, ransomware, denial of service attacks, malicious social engineering and other intrusions, encryption, erasure, failure, and damage by individuals (which may include our and our third-party providers’ employees), groups or nation states or state-sponsored threats. Such cybersecurity incidents could result in operational disruption and information misappropriation, such as theft of intellectual property or inappropriate disclosure of customer data or confidential, sensitive, or personal information, or in reputational harm with customers. While we maintain insurance coverage for these types of cybersecurity incidents, such policies may not completely provide coverage for, or completely offset, the costs associated with such incidents, including losses from delays in our ability to provide services to our customers, reputational harm, or the costs to improve security against future similar threats. We are continuously developing and enhancing our controls, processes, and practices designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized access. This continued development and enhancement requires us to expend additional resources. However, we may not anticipate or combat all types of potential disruptions or breaches. Threats are continually evolving and threat actors may adopt new or different means of breaching our information technology systems and data, including the potential use of artificial intelligence (“AI”) tools to engage in automated, targeted, and coordinated attacks. As cybersecurity threats become more sophisticated and difficult to detect, our ability to promptly prevent, detect and mitigate the effects of cybersecurity incidents may be impacted, potentially resulting in more material adverse effects. As such threats increase in frequency and sophistication, we could be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants. Additionally, as many of our employees use our information technology systems to collaborate with colleagues in different geographic locations and access our systems and those of our customers remotely, we and our customers may be subject to heightened security risks, including the risks of cyber-attacks. For additional information on our strategy and processes for assessing, identifying, and managing the risks posed by cybersecurity threats, and the management and oversight of such efforts, refer to Part I, Item 1C. Cybersecurity.

In addition, laws and regulations governing data privacy and the unauthorized disclosure of confidential information, including the European Union General Data Protection Regulation ("GDPR"), the California Consumer Privacy Act, the California Privacy Rights Act, state biometric laws, and other emerging U.S. state privacy laws pose increasingly complex compliance challenges and could potentially elevate our compliance costs. Any failure to comply with these laws and regulations, or an exposure or exfiltration of information covered by such laws and regulations, including, without limitation, in connection with a cybersecurity incident, could have a negative impact on our reputation or result in significant penalties and legal liability. Increased costs in this area could adversely impact our financial condition, results of operations, and cash flow.

Our results of operations could be adversely affected as a result of goodwill and identifiable intangible asset impairments. When we acquire a business, we record an asset called “goodwill” equal to the excess of the consideration transferred over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill and indefinite-lived intangible assets are not amortized but instead evaluated for impairment annually, or more frequently if events or circumstances indicate that the carrying amount of the asset may be impaired. Impairment may result from a deterioration in macroeconomic conditions, declining financial performance, deterioration in the operational environment, or changes in the manner in which acquired assets are used. Significant judgment is required in determining whether goodwill and indefinite-lived intangible assets are impaired and assumptions utilized for purposes of our impairment testing may change in future periods. There can be no assurance that ourOur estimates and assumptions willcould prove to be accurateinaccurate predictions of the future. Significant adverse changes to external market conditions or our internal forecasts, if any, could result in future impairment charges. It is not possible at this time to determine if any future impairment charge will result or, if it does, whether such a charge would be material to our results of operations. For further discussion of our impairment testing, see Note 8 - Goodwill, Identifiable Intangible Assets, and Other Long-Lived Assets of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data.

Failure to maintain effective internal controls over financial reporting could adversely impact our ability to timely and accurately report financial results and comply with our reporting obligations, which could materially affect our business. Regardless of how internal financial reporting control systems are designed, implemented, and enforced, they cannot ensure with absolute certainty that our policy objectives will be met in every instance. Because of the inherent limitations of all such systems, our internal controls over financial reporting may not always prevent or detect misstatements. Failure to maintain effective internal control over financial reporting could adversely affect our ability to accurately and timely report financial results, to prevent or detect fraud, or to comply with the requirements of the SEC or the Sarbanes-Oxley Act of 2002, which could necessitate a restatement of our financial statements, and/or result in an investigation, or the imposition of sanctions, by regulators. Such failure could additionally expose us to litigation and/or reputational harm, impair our ability to obtain financing, or increase the cost of any financing we obtain. All of these impacts could adversely affect the price of our common stock and our business overall.

We are subject to many laws and regulations in the jurisdictions in which we operate; changes to such laws and regulations may result in additional costs and impact our operations. We are committed to upholding the highest standards of corporate governance and legal and ethical compliance. We are subject to many laws and regulations, including various laws and regulations that apply specifically to U.S. public companies. These include the rules and regulations of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the various regulations, standards, and guidance put forth by the SEC and other federal and state governmental agencies to implement and enforce those laws. New laws, rules, and regulations, or changes to existing laws or their interpretations, could create added legal and compliance costs and uncertainty for us. In addition, our United Kingdom operations are subject to laws and regulations that are in some cases different from those of the United States, including labor laws such as the U.K. Modern Slavery Act and laws and regulations governing information collected from employees, customers and others, specifically the GDPR. These laws and regulations could increase the cost and complexity of doing business in the U.K. and negatively impact our financial position and results of operations. Our efforts to comply with evolving laws, regulations, and reporting standards may increase our general and administrative expenses, divert management time and attention, or limit our operational flexibility, all of which could have a material adverse effect on our business, financial position, and results of operations. Many of our non-public competitors and competitors operating solely in the U.S. are not subject to these laws and regulations and the related costs and expenses of compliance.

Adverse resolution of litigation and other legal and regulatory proceedings may harm our operating results or financial position. From time to time, we are a party to lawsuits and other legal proceedings, most of which occur in the normal course of our business. These actions and proceedings may involve actual or threatened claims by customers, employees, or other third parties for, among other things, compensation or indemnification for alleged personal injury, workers’ compensation, employment discrimination, breach of contract, property damage, or other general commercial disputes. In addition, we have been, and may in the future be, subject to class action claims alleging violations of the Fair Labor Standards Act and state wage and hour laws. Litigation and other legal proceedings can be expensive, lengthy, and disruptive to normal business operations, and their outcome is inherently uncertain and difficult to accurately predict or quantify. In addition, plaintiffs in many types of actions may seek punitive damages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief.

In addition, we have been, and may in the future be, subject to class action claims alleging violations of the Fair Labor Standards Act and state wage and hour laws. Litigation and other legal proceedings can be expensive, lengthy, and disruptive to normal business operations, and their outcome is inherently uncertain and difficult to accurately predict or quantify. In addition, plaintiffs in many types of actions may seek punitive damages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief. An unfavorable resolution of a particular legal proceeding or claim, whether through a settlement, mediation, court judgment, or otherwise, could have a material adverse effect on our business, operating results, financial position, and cash flows, and in some cases, on our reputation or our ability to obtain projects from customers, including governmental entities. See Note 15 - Commitments and Contingencies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, for more information regarding any significant legal proceedings in which we are involved.

Our failure to comply with anti-bribery statutes, such as the Foreign Corrupt Practices Act and the U.K. Bribery Act of 2010,Act, or sanction regulations, could result in fines, criminal penalties, and other sanctions that could have an adverse effect on our business. The U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act of 2010 (the “Bribery Act”), and similar anti-bribery laws in other jurisdictionsjurisdictions, generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business or securing an improper advantage. In addition, sanctions against foreign persons and entities have increased in recent years, especially in connection with the war in Ukraine and ongoing trade and diplomatic disputes between the U.S. and China. Our policies require that all of our employees, subcontractors, vendors, and agents worldwide must comply with applicable anti-bribery and sanction laws. However, there is no assurance that our policies and procedures to ensure compliance with the FCPA, the Bribery Act,FCPA and similar anti-bribery and sanction laws,laws will eliminate the possibility of liability under such laws for actions taken by our employees, agents, and intermediaries. If we were found to be liable for violations under the FCPA, the Bribery Act, or similar anti-bribery or sanction laws, either due to our own acts or omissions or due to the acts or omissions of others, we could incur substantial legal expenses and suffer civil and criminal penalties, which could have a material adverse effect on our business, financial condition, and results of operations, as well as our reputation. In addition, whether or not such expenses, penalties, or sanctions are actually incurred, the actual or alleged violation of the FCPA, the Bribery Act, or any similar anti-bribery or sanction lawslaws, could have a negative impact on our reputation.

Opportunities within the government sector could lead to increased governmental rules and regulations applicable to us. When we perform work as a federal government contractor/subcontractor, or if we perform work on a project that has received federal government funding, we are subject to a number of procurement rules and other regulations, any deemed violation of which could lead to fines or penalties or a loss of business. Government agencies routinely audit and investigate government contractors. Government agencies may review a contractor’s performance under its contracts, cost structure, and compliance with applicable laws, regulations, and standards. If government agencies determine through these audits or reviews that costs are improperly allocated to specific contracts, they will not reimburse the contractor for those costs or may require the contractor to refund previously reimbursed costs. If government agencies determine that we are engaged in improper activity, or if we are found to have violated laws or regulations, we may be subject to civil and criminal penalties and debarment or suspension from doing business with the government. Government contracts are also subject to renegotiation of terms by the government, termination by the government prior to the expiration of the term, and non-renewal by the government.

The availability and costs to adequately train and maintain a skilled labor force could be impacted by factors we cannot control, including changes in the unemployment rate, prevailing wage rates, benefit costs, potential labor force disruptions, and competition for labor from our competitors in the markets we serve. Labor shortages or increased labor costs, such as those experienced in recent years throughout the United States and United Kingdom,years, could impair our ability to provide services to our customers (or the ability of third-party subcontractors to provide services to us), maintain our business, or grow our revenues. Recent rules by the Federal Tradeor Commissionstate regulations, which seek to eliminate almost allprohibit non-competition agreements with employees, or similar regulations, if found to be enforceable and implemented,employees may also impact retentionour ofability to retain key employees by reducing barriers to individuals with such agreements leaving to work for our competitors.

Climate change and related environmental issues could have a material adverse impact on our business, financial condition, and results of operations. Climate change related events, such as increased frequency and severity of storms, floods, wildfires, droughts, hurricanes, freezing conditions, and other natural disasters, may have an adverse impact on our business, financial condition, and results of operation. While we have invested in programs to mitigate the risk that these events disrupt our ability to serve our customers, and also maintain insurance coverage to offset the costs which could result, these events pose inherent risks regardless of where or how we conduct our business. For example, severe weather or a catastrophic natural disaster could negatively impact our and our customers’ offices, facilities, or job sites. Access to clean water and reliable energy where we conduct our business is also critical to our operations. Accordingly, severe weather events or natural disasters have the potential to disrupt our and our customers’ businesses and may cause us to experience work stoppages, project delays or cancellations, financial losses, and additional costs to resume operations, in addition to potential adverse impacts on the health and safety of our workforce and their ability to work or travel. Further, climate change poses direct physical risks to infrastructure across the market sectors we serve, both as a result of chronic environmental changes, such as rising sea levels and temperatures, as well as acute events, such as hurricanes, droughts, and wildfires. These impacts, and the costs to address them, could result in fewer resources for strategic investment by our customers, which could result in a decrease in demand for certain of our services. Any of these events could have a material adverse impact on our business, financial condition, and results of operations.

We may be affected by market or regulatory responses to climate change. Growing publicPublic concern about climate change hashas, at times, resulted in the increased focus of local, state, regional, national, and international regulatory bodies on greenhouse gas (“GHG”) emissions and climate change issues. Legislation to regulate GHG emissions has periodically been introduced in the U.S. Congress, and there has been a wide-ranging policy debate, both in the United States and internationally, regarding the impact of these gases and possible means for their regulation. Several states in the United States have proposed or adopted laws that require reporting of GHG emissions, or that a percentage of our fleet be comprised of electric vehicles. Such laws or regulations enacted by the federal government or state and local governments or agencies, and/or any international agreements to which the United States may become a party that control or limit GHG emissions or otherwise seek to address climate change, could result in increased compliance costs for us and our clients or have other impacts on our clients, including those who are involved in the exploration, production, or refining of fossil fuels, or who emit greenhouse gases through the combustion of fossil fuels or through the mining, manufacture, utilization, or production of materials or goods. Such policy changes could increase the costs of projects for our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the need for certain of our services, which could in turn have a material adverse effect on our business, financial condition, and results of operations. In addition, compliance with legislation requiring us to increase the mix of electric vehicles within our fleet will be difficult as the electric vehicles currently available do not meet our fleet requirements. However, policy changes and climate legislation could also increase the overall demand for our services as our clients and partners work to comply with these policies, such as by decarbonizing their industries, transitioning from fossil fuels to renewable energy sources, reducing their energy consumption, and developing integrated and sustainable solutions, all of which could have a positive impact on our business. We cannot predict with certainty what the effect of such regulation may be on us or our customers.

In addition, in March 2024, the SEC finalized new rules that would require significant climate-related disclosures by public companies, including evaluation and disclosure of material climate-related risks and opportunities, GHG emissions inventory, climate-related targets and goals, and financial impacts of physical and transition risks. While these rules are currently stayed pending legal challenges, and mayare facenot additional challengessupported under the current administration, it is not certain whether they, or similar future rules, will go into effect. Other legislation, including certain state laws, have been passed that would require similar climate-related disclosure. To the extent that such new rules become effective, our legal, accounting, and other compliance expenses may increase and may divert management time and attention. We may also be exposed to legal or regulatory action or claims as a result of these new regulations. All of these risks could have a material adverse effect on our business, financial position, and/or stock price.

We may be unable to achieve our current or future climate commitments and targets, or we may incur substantial costs in meeting such targets. To help mitigate the impacts of GHG emissions on climate change, EMCOR has established initial carbon-based fuel consumption and GHG emission reduction targets. However, achievement of such targets, or similar targets that may be established in the future, is subject to risks and uncertainties, many of which are outside of our control. These risks and uncertainties include, but are not limited to: (a) our ability to execute our operational strategies and achieve our goals within the currently projected costs and the expected timeframes; (b) the availability and cost of alternative fuels, electrical charging infrastructure, off-site renewable energy, and other materials and components; (c) unforeseen design, operational, and technological difficulties; (d) the outcome of research efforts and future technology developments, including alternate or more fuel efficient vehicles for our fleet, such as hybrid or electric vehicles, the availability and prices of which hashave been and may in the future be impacted by the rescission of electric vehicle tax credits, tariffs imposed on the import of vehicles to the United States, and other disruptions to the global shortage in supply of vehicles generally; (e) regulations and requirements that restrict or prohibit our ability to impose requirements on third-party contractors; (f) an acquisition of or merger with another company that has not adopted similar targets and goals or whose progress towards reaching its goals is not as advanced as ours; and (g) exogenous macroeconomic or supply chain shocks, which could result in fluctuations in our fuel consumption and GHG emissions in a given period. In addition, we could be required to expend amounts in future periods as we continue to work towards achieving our targets, which may have a material effect on our business, financial condition, results of operations, or liquidity.

Public health emergencies, epidemics, or pandemics impact our business. The global spread of COVID-19, and the responses of governments, businesses, and individuals to combat it, caused significant volatility, uncertainty, and economic disruption, which adversely impacted our operations and those of our customers. A new public health emergency, such as an epidemic or pandemic, could lead to similar impacts. Government authorities in the United States and United Kingdom have at various times recommended or imposed certain social distancing, quarantine, and isolation measures to varying degrees, with many such measures impacting large portions of the population, including limitations on travel and mandatory cessation of certain business activities. Both the outbreak and the containment and mitigation measures resulted in serious adverse impacts on the economy, and it is possible that such measures could return for future public health emergencies. The impact to our business and operations in another public health emergency will depend in part on the severity and duration of those measures and the extent and pace of economic recovery, which are difficult to predict.

•United States building services; and

•United States industrial services; andservices.

Revenues of $14.57$16.99 billion for the year ended December 31, 20242025 set a new annual record for the Company and represent an increase of 15.8%16.6% from revenues of $12.58$14.57 billion for the year ended December 31, 2023.2024. Demand for our services continues to be strongbroad-based with strength across most of the market sectors we serveserve. and, asAs described in further detail below, we experienced revenue growth within the majorityall of our reportable segments.segments, except for our United States industrial services segment, which saw a modest reduction in revenues year-over-year. Revenues for the year ended December 31, 20242025 included incremental acquisition contribution of approximately $251.5$1.27 million.billion.

Operating income for 20242025 was $1,344.9$1.71 million,billion, or 10.1% of revenues, compared to operating income of $1.34 billion, or 9.2% of revenues, establishingin 2024. Our operating results for the year ended December 31, 2025 included a $144.9 million gain on the sale of our United Kingdom operations, which positively impacted operating margin by 85 basis points. Excluding the impact of such gain, operating income increased by $223.7 million and established a new annual recordsrecord for the CompanyCompany. withAs respect to both operating income and operating margin. This compares to operating income of $875.8 million, or 7.0% of revenues,described in 2023.further Thedetail $469.1below, millionsuch increase in operating income,income and corresponding 220 basis point expansion in operating margin, werewas predominantly adriven resultby ofgreater improvedcontribution operating performance withinfrom our United States construction segments, as described in further detail below.segments. Operating income for the year ended December 31, 20242025 included incremental acquisition contribution of $13.4$24.4 million, net of amortization expense attributable to identifiable intangible assets of $15.3$50.6 million.

Net income of $1,007.1$1.27 million,billion, or $28.19 per diluted share, for the year ended December 31, 2025, compares favorably to net income of $1.01 billion, or $21.52 per diluted share, for the year ended December 31, 2024, compares favorably to net income of $633.0 million, or $13.31 per diluted share, for the year ended December 31, 2023.2024. While the majority of the increase in our net income and diluted earnings per share was a result of the increased operating income referenced above, these amounts additionally benefited from greater interest income and a reduction in interest expense in 2024. Further, our diluted earnings per share for the year ended December 31, 20242025 wasadditionally positivelybenefited impacted byfrom a reduced weighted average share count duegiven tothe impact of common stock repurchases made by us throughout 20232024 and 2024.2025.

In order to provide a more meaningful period-over-period discussion of our operating results, we may discuss amounts generated or incurred (revenues, gross profit, selling, general and administrative expenses, and operating income) from companies acquired. The amounts discussed reflect the acquired companies’ operating results in the current reported period only for the time period these entities were not owned by EMCOR in the comparable prior reported period. For further discussion regarding our acquisitions, refer to Note 4 - Acquisitions of Businesses of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data.

As described in more detail below, as a result of strong demand for our services across most of the market sectors we serve, consolidated revenues for the year ended December 31, 20242025 increased to $14.57$16.99 billion compared to consolidated revenues of $12.58$14.57 billion for the year ended December 31, 2023.2024. As described in more detail below, we experienced increases in revenues from the majority of our reportable segments. Additionally, revenuesRevenues for 20242025 included incremental acquisition contribution of approximately $251.5$1.27 million.billion.

Revenues of our United States electrical construction and facilities services segment were $3,342.9$5.07 millionbillion for the year ended December 31, 2024,2025, a $559.2$1.73 millionbillion increase compared to revenues of $2,783.7$3.34 millionbillion for the year ended December 31, 2023.2024. This segment’s results for 20242025 included $2.7$1.11 millionbillion of incremental acquisition revenues.revenues, Excludingalmost entirely from Miller Electric. From a market sector perspective, increased revenues were generated from nearly all of the impactsectors ofwe acquisitions,serve. While the largest increase in this segment’s revenues was primarily a result of growthseen within the network and communications market sector, predominantly duedriven toby greater demand for data center construction projects.projects, Increasedthis demandsegment foralso cloudexperienced computingnotable andrevenue datagrowth storage,within: driven in part by(a) the emergencehealthcare market sector, as a result of artificial intelligence, has resulted in a greater number of project opportunitiesactivity for us inacross several of the geographies in which we operate. In addition, this segment benefited from revenue growth within a number of the other market sectors we serve, such as:operate, (ab) the high-tech manufacturingcommercial market sector, inclusive of constructioncertain projectstenant for customers engaged in the designfit-out and manufacturingwarehousing ofand semiconductors,distribution projects, (bc) the manufacturing and industrialinstitutional market sector, drivenprimarily bygiven increasedan activityincrease within variousrevenues energyfrom public sector customers,projects, (cd) the hospitality and entertainment market sector, due to select project opportunities, and (e) the transportation market sector, duestemming tofrom certain infrastructure projects currently underway,underway. Revenues of this segment for the year ended December 31, 2025 additionally benefited from greater levels of short-duration projects and (d)service thework. institutionalPartially marketoffsetting sector, given increased project revenues from certain schools and universities. Thesethese increases were partially offset bywas a reduction in high-tech manufacturing revenues withinas thewe commercialcompleted marketor sectorreached duesubstantial incompletion parton tovarious reducedsemiconductor, demandbio-tech, acrossand thelife commercialsciences realconstruction estate industry.projects.

Revenues of our United States building services segment were $3,114.8$3.12 millionbillion for the year ended December 31, 20242025 compared to $3,120.1$3.11 millionbillion for the year ended December 31, 2023.2024. ExcludingRevenues of this segment for 2025 included incremental acquisition contribution of $31.0$2.6 million,million. thisThis segment’s revenues decreased by $36.3 million as the strength of its mechanical services division was more than offset by revenue declines within its commercial site-based services and government site-based services divisions due to the loss of certain facilities maintenance contracts not renewed pursuant to rebid. With respect to this segment’s mechanical services division,experienced revenue growth was experienced from: (a) HVAC project and retrofit work, as a result of greater: (i) project execution stemming from the increased availability of materials and equipment when compared to the prior year, which experienced greater supply chain disruptions and delays, and (ii) demand for systemthese upgradesservices andremained replacements,strong, partially as our customers continue to seek ways to improve the energy efficiency or indoor air quality of their facilities, (b) service repair and maintenance volumes, given growth in our service contract base, and (c) building automation and controls projects, as we continue to expand our service offerings in this area. Offsetting the strength of the mechanical services division were revenue declines within this segment’s commercial site-based and government site-based services divisions due to the loss of certain facilities maintenance contracts that were not renewed upon rebid in a prior period.

OurOn December 1, 2025, we sold our United Kingdom operations, the results of which are reported within our United Kingdom building services segment revenuesthrough the date of sale. Revenues of this segment for the applicable 2025 period were $471.3 million compared to $425.5 million for the year ended December 31, 2024 compared to $436.4 million for the year ended December 31, 2023.2024. The decreaseperiod-over-period in this segment’s revenues for 2024increase was primarilydue to: (a) greater service revenues, as a result of: (i) the lossaward of certainnew facilities maintenance contracts notand renewed(ii) pursuantscope toexpansion rebid.on previously existing contracts, and (b) an increase in project work, largely within the manufacturing and industrial and network and communications market sectors. Revenues of this segment for 20242025 were positively impacted by $11.4$14.1 million as a result ofgiven favorable exchange rate movements for the British pound versus the United States dollar.

OurConsolidated gross profit for the year ended December 31, 20242025 was $2,765.1$3.28 million,billion, or 19.0%19.3% of revenues, compared to consolidated gross profit of $2,089.3$2.77 million,billion, or 16.6%19.0% of revenues, for the year ended December 31, 2023.2024. The increase in gross profit and the expansion in gross profit margin were driven by each of our domestic reportable segments due to an improved revenue mix, excellent project execution, and/or favorable pricing. Our grossGross profit for 20242025 included incremental acquisition contribution of $46.2$165.6 millionmillion, net of amortization expense attributable to identifiable intangible assets of $8.6$28.1 million. Refer toExcluding the operatingimpact incomeof section below for further discussion regardingacquisitions, the operatingyear-over-year performanceincreases ofin eachgross profit and gross profit margin were driven by both of our reportableUnited segments.States construction segments, as well as our United States building services segment, in each case due to improved revenue mix and excellent project execution.

Our selling, general and administrative expenses for the year ended December 31, 20242025 were $1,420.2$1.71 million,billion, or 9.7%10.1% of revenues, compared to selling, general and administrative expenses of $1,211.2$1.42 million,billion, or 9.6%9.7% of revenues, for the year ended December 31, 2023.2024. Selling, general and administrative expenses for 20242025 included $32.8$141.3 million of incremental expenses directly related to companies acquired in 2024 and 2023,acquired, including amortization expense attributable to identifiable intangible assets of $6.7$22.5 million. ExcludingAdditionally incremental expenses from businesses acquired, the increaseincluded in selling, general and administrative expenses wasfor predominantly2025 attributablewere to$9.4 greater:million (a)of salariestransaction related costs incurred in connection with the acquisition of Miller Electric and related$10.7 employment expenses, largely as a resultmillion of additionaltransaction headcountrelated tocosts supportincurred ourin organicconnection revenuewith growththe as well as annual cost of living adjustments, and (b) incentive compensation expense at certainsale of our operatingUnited subsidiaries,Kingdom due to higher operating results than in the prior year.operations.

Operating income for the year ended December 31, 20242025 was $1,344.9$1.71 million,billion, an increase of $469.1$368.6 million compared to operating income of $875.8$1.34 millionbillion for the year ended December 31, 2023.2024. Operating margin was 9.2%10.1% and 7.0%9.2% in 20242025 and 2023,2024, respectively. AsOur describedoperating inresults morefor detailthe below,year theseended increasesDecember in31, profitability2025 wereincluded a $144.9 million gain on the sale of our United Kingdom operations, which positively impacted operating margin by 85 basis points. Excluding the impact of such gain, operating income increased by $223.7 million, predominantly as a result of improvedgreater operatingcontribution performance withinfrom our United States construction segments, dueas to a more favorable mix of work and better project execution, including enhanced productivity, duedescribed in partfurther todetail investments in virtual design and construction, prefabrication, and automation.below. Operating income for 2024the year ended December 31, 2025 included incremental acquisition contribution of $13.4$24.4 million net of amortization expense attributable to identifiable intangible assets of $15.3$50.6 million.

Operating income of our United States building services segment for the year ended December 31, 20242025 was $176.7$187.2 million, or 5.7%6.0% of revenues, compared to operating income of $183.0$176.7 million, or 5.9%5.7% of revenues, for the year ended December 31, 2023.2024. IncreasedFor gross profit from2025, this segment’s mechanical services division,division due primarilycontinued to greaterproduce profitabilitystrong margins across its portfolio of HVAC andretrofits, building automation and controls projectsprojects, and retrofits,repair wasservice partiallywork offsetorders. byHeadwinds reductionsfaced in grossthis profit from itssegment’s commercial site-based services and government site-based services divisions, given the loss of certainthe previously referenced facilities maintenance contractscontracts, notpartially renewedoffset pursuantsuch toprofitability rebid.during Inthe addition,year. operatingThe incomeresults andof operatingthis marginsegment for the year ended December 31, 2024 were negatively impacted byincluded an $11.0 million reserve recorded during the first quarter for a specific customer bankruptcy within this segment’sits commercial site-based services division.division, Such reservewhich negatively impacted the segment’s operating margin of this segment for 2024 by approximately 30 basis points.points in such prior year period.

Operating income of ourOur United KingdomStates buildingindustrial services segmentsegment’s operating income for the year ended December 31, 20242025 was $21.5$25.0 million, or 5.0%2.0% of revenues, compared to operating income of $25.7$44.2 million, or 5.9%3.5% of revenues, for the year ended December 31, 2023.2024. The year-over-year decrease in operating income and operating margin of this segment was due toprimarily a decline in gross profit and gross profit margin. In addition to the impactresult of lower facilities maintenance revenues, gross profit and gross profit margin were negatively affected by a less favorable revenue mix of work when compared to the prior year,year period, which includedbenefited from: (a) turnaround projects of a greater numbersize, (b) a large renewable fuel project, and (c) a greater amount of higherindirect marginlabor projects. Operating income of this segment for 2024 was positively impacted by $0.5 million as a result of favorable exchange rate movements for the British pound versus the United States dollar.absorption.

We are focused on the efficient conversion of operating income into cash to provide for the Company’s material cash requirements, including working capital needs, investment in our growth strategies through business acquisitions and capital expenditures, satisfaction of contractual commitments, including principal and interest payments on any outstanding indebtedness, and shareholder return through dividendshare paymentsrepurchases and sharedividend repurchases.payments. We strive to maintain a balanced approach to capital allocation in order to achieve growth, deliver value, and minimize risk.

Management monitors financial markets and overall economic conditions for factors that may affect our liquidity and capital resources and adjusts our capital allocation strategy as necessary. Negative macroeconomic trends could have an adverse effect on future liquidity if we experience delays in the payment of outstanding receivables beyond normal payment terms, an increase in credit losses, or significant increases in the price of commodities or the materials and equipment utilized for our project and service work, beyond those experienced toin date.recent years. In addition, during economic downturns, there have typically been fewer small discretionary projects from the private sector and our competitors have aggressively bid larger long-term infrastructure and public sector contracts. Our liquidity is also impacted by: (a) the type and length of construction contracts in place, as performance of long duration contracts typically requires greater amounts of working capital, (b) the level of turnaround activities within our United States industrial services segment, as such projects are billed in arrears pursuant to contractual terms that are standard within the industry, and (c) the billing terms of our maintenance contracts, including those within our United States and United Kingdom building services segments.segment. While we strive to negotiate favorable billing terms, which allow us to invoice in advance of costs incurred on certain of our contracts, there can be no assurance that such terms will be agreed to by our customers.

As of December 31, 2024,2025, we had cash and cash equivalents, excluding restricted cash,equivalents of $1,339.6$1.11 million,billion, which are maintained in depository accounts and highly liquid investments with original maturity dates of three months or less. Both our short-term and long-term liquidity requirements are expected to be met through our cash and cash equivalent balances, cash generated from our operations, and, as necessary, the borrowing capacity under our revolving credit facility. Our credit agreement provides for a $1.30 billion revolving credit facility, for which there was $1.23 billion of available capacity as of December 31, 2024.2025.

During the year ended December 31, 2024,2025, our cash balance, including cash equivalents and restricted cash, increaseddecreased by $550.6$228.4 million from $789.8$1.34 millionbillion at December 31, 20232024 to $1,340.4$1.11 millionbillion at December 31, 2024.2025. Changes in our cash position from December 31, 20232024 to December 31, 20242025 are described in further detail below. For a discussion of the changes in our cash position from December 31, 20222023 to December 31, 2023,2024, refer to the Liquidity and Capital Resources section included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Form 10-K for the year ended December 31, 2023.2024.

Operating Activities – Operating cash flows generally represent our net income as adjusted for certain non-cash items and changes in assets and liabilities. For 2024,2025, net cash provided by operating activities was approximately $1,407.9$1.30 millionbillion compared to approximately $899.7$1.41 billion in 2024. The $105.8 million decrease in 2023.our Theoperating $508.2cash millionflow year-over-yearwas a result of an increase in working capital, primarily on our construction projects, given the progression on a number of contracts for which we were previously billed ahead. As we worked through these upfront payments, we saw the expected decrease in operating cash flowsas our cash outflows exceeded our inflows on these projects. Such decrease was primarilypartially offset by a result of: (a) our improved operating performance and the correspondingyear-over-year increase in our net income and (b) the timing of cash receipts from our customers.income.

Investing Activities – Investing cash flows consist primarily of payments for acquisition of businesses, capital expenditures, and proceeds from the sale or disposal of property, plant, and equipment.equipment or other long-term assets. Net cash used in investing activities for 20242025 increased by approximately $138.0$574.3 million compared to 2023,2024, primarily due to an increase in payments for acquisitions.acquisitions, including Miller Electric, partially offset by the proceeds from the sale of our United Kingdom operations.

Financing Activities – Financing cash flows consist primarily of the issuance and repayment of short-term and long-term debt, repurchases of common stock, payments of dividends to stockholders, and the issuance of common stock through certain equity plans. Net cash used in financing activities during 20242025 was $555.4$663.8 million compared to $412.1$555.4 million during 2023.2024. The $143.3$108.4 million variance was primarily due to an increase in common stock repurchases made by us during 2024, partially offset by the impact of repayments on our outstanding debt in the prior year period.us. The timing of common stock repurchases is at management’s discretion subject to securities laws and other legal requirements and depends upon several factors, including market and business conditions, current and anticipated future liquidity, share price, and share availability, among others. For additional detail regarding our share repurchase program, refer to Note 12 - Common Stock of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data.

WeDuring currently2025, paywe paid a regular quarterly dividend of $0.25 per share. For the years ended December 31, 20242025 and 2023,2024, cash payments related to dividends were $43.4$45.0 million and $32.7$43.4 million, respectively. In December 2025, our Board of Directors announced its intention to increase the regular quarterly dividend to $0.40 per share commencing with the dividend to be paid in January 2026. Our credit agreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of such agreement currently materially limit our ability to pay such quarterly dividends for the foreseeable future.

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash – WePrior areto the sale of our United Kingdom operations in December of 2025, we were exposed to fluctuations in foreign currency exchange rates, almost entirelyrates with respect to the British pound. Therefore, the $9.0$9.5 million variance between the years ended December 31, 20242025 and 20232024 was a direct result of exchange rate movements for the British pound versus the United States dollar.

Contingent Consideration Liabilities – We have incurred liabilities related to contingent consideration arrangements associated with certain acquisitions, payable in the event discrete performance objectives are achieved by the acquired businesses during designated post-acquisition periods. The aggregate amount of these liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, changes in the fair value of amounts owed based on performance during such post-acquisition periods, and accretion in present value. As of December 31, 2024,2025, the present value of expected future payments relating to these contingent consideration arrangements was $29.7$8.8 million. Of this amount, $20.4$7.3 million is estimated as being payable during 2025, with the remainder due pursuant to the terms of our contractual agreements, some of which extend into 2027.2026.

Based on an evaluation of individual projects that were substantially complete in prior periods but had revisions to total estimated costs or anticipated contract value (inclusive of the settlement of previously outstanding change orders and claims) that resulted in an increase to profitability in excess of $1.0 million, we recognized revenue during the years ended December 31, 20242025, 2024, and 2023,2023 as summarized in the following table (in thousands):

IncludedIn addition, included in our results for the year ended December 31, 2024 was $12.3 million of gross profit recognized on two contracts, which are currently in process,contracts as a result of favorable developments on certain claims. Of this amount, $8.4 million was reported within our United States electrical construction and facilities services segment and $3.9 million was reported within our United States mechanical construction and facilities services segment.

We have loss payment deductibles for certain workers’ compensation, automobile liability, general liability, and property claims, have self-insured retentions for certain other casualty claims, and are self-insured for employee-related healthcare claims. In addition, we maintain a wholly-owned captive insurance subsidiary to manage certain of our insurance liabilities. Losses are recorded based upon estimates of our liability for claims incurred and for claims incurred but not reported. The liabilities are derived from known facts, historical trends, and industry averages, utilizing the assistance of an independent third-party actuary to determine the best estimate for the majority of these obligations. We believe the liabilities recognized on the Consolidated Balance Sheets for these obligations are adequate. However, such obligations are difficult to assess and estimate due to numerous factors, including severity of injury, determination of liability in proportion to other parties, timely reporting of occurrences, and effectiveness of safety and risk management programs. Therefore, if our actual experience differs from the assumptions and estimates used for recording the liabilities, adjustments may be required and will be recorded in the period that the experience becomes known. In addition, an increase in the cost to settle insurance claims could result in higher insurance costs and deductibles. OurAs of December 31, 2025, our estimated net insurance liabilities for workers’ compensation, automobile liability, general liability, and property claims increased by $20.0$50.8 million forwhen thecompared year endedto December 31, 20242024. comparedSuch toincrease the year ended December 31, 2023, partially aswas a result of greater potential exposuresexposures, including the impact of acquired companies, and an increase in certain of our deductibles or self-insured retentions. If our estimated insurance liabilities for workers’ compensation, automobile liability, general liability, and property claims were to increase by 10%, it would have resulted in $24.0$29.1 million of additional expense for the year ended December 31, 2024.2025.

As of December 31, 20242025 and 2023,2024, we had goodwill of $1,018.4$1.41 millionbillion and $956.5$1.02 million,billion, respectively, arising out of the acquisition of businesses. Goodwill is not amortized but instead allocated to its respective reporting unit and evaluated for impairment annually, or more frequently if events or circumstances indicate that the carrying amount of goodwill may be impaired. We have determined that our reporting units are consistent with the reportable segments identified in Note 18 - Segment Information of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data. As of December 31, 2024,2025, approximately 18.8%36.7% of our goodwill related to our United States electrical construction and facilities services segment, approximately 33.8%28.5% related to our United States mechanical construction and facilities services segment, approximately 35.2%26.0% related to our United States building services segment, and approximately 12.2%8.8% related to our United States industrial services segment.

We performed our annual impairment assessment of all reporting units as of October 1, 20242025 and determined there was no impairment of goodwill. Based on these impairment assessments, the fair values of our United States electrical construction and facilities services segment, our United States mechanical construction and facilities services segment, our United States building services segment, and our United States industrial services segment exceeded their carrying values by approximately $3,940.5$6.43 million,billion, $6,852.3$10.11 million,billion, $1,143.8$1.27 million,billion, and $163.1$120.3 million, respectively. As part of such annual testing, we compared the aggregate fair value of our reporting units to our market capitalization, noting that such comparison supported the reasonableness of the key assumptions utilized in determining the fair value of each of our reporting units.

As of December 31, 20242025 and 2023,2024, net identifiable intangible assets (primarily consisting of our customer relationships, subsidiary trade names, contract backlog, and developed technology/vendor network, and contract backlognetwork) arising out of the acquisition of businesses were $648.2$1.11 millionbillion and $586.0$648.2 million, respectively. The determination of identifiable intangible asset values, related estimated useful lives for identifiable intangible assetslives, and whether those assets are impaired involves significant judgments based upon short- and long-term projections of future performance. These forecasts reflect assumptions regarding anticipated macroeconomic conditions as well as our ability to successfully integrate acquired businesses.

The following table presents selected financial data for the quarters ended MarchJune 31,30, 2026 and 2025 (in thousands, except for percentages and per share data):

Revenues of $4.63$5.15 billion for the quarter ended MarchJune 31,30, 2026 set a quarterly record for the Company and represent an increase of 19.7%19.8% from revenues of $3.87$4.30 billion for the quarter ended MarchJune 31,30, 2025. Demand for our services continues to be broad-based with strength across most of the market sectors we serve. As described in further detail below, we experienced revenue growth within all of our reportable segments. Revenues for the firstsecond quarter of 2026 included incremental acquisition contribution of $234.1$169.2 million.

For the quarter ended MarchJune 31,30, 2026, operating income was $403.8$547.3 million, or 8.7%10.6% of revenues, establishing new records for the Company with respect to a firstsecond quarter. This compares to operating income of $318.8$415.2 million, or 8.2%9.6% of revenues, for the quarter ended MarchJune 31,30, 2025. As described in further detail below, in addition to the increasesimpact in both operating income and operating margin were due toof the revenue growth we experienced in the quarter, whichour ledoperating toperformance greaterbenefited from an increase in consolidated gross profit andmargin as well as a reduction in the ratio of selling, general and administrative expenses to revenues. Operating income for the quarter ended MarchJune 31,30, 2026 included incremental acquisition contribution of $20.6$13.9 million, net of amortization expense attributable to identifiable intangible assets of $8.8$5.6 million.

Net income of $305.5$403.7 million, or $6.84$9.06 per diluted share, for the quarter ended MarchJune 31,30, 2026 compares favorably to net income of $240.7$302.2 million, or $5.26$6.72 per diluted share, for the quarter ended MarchJune 31,30, 2025. While the majority of the increase in our net income and diluted earnings per share was a result of the increased operating income referenced above, diluted earnings per share for the quarter ended MarchJune 31,30, 2026 additionally benefited from a reduced weighted average share count given the impact of common stock repurchases made by us throughout 2025 and the first quarterhalf of 2026.

During the first quarterhalf of 2026, we acquired afour companycompanies for anupfront immaterialconsideration amount.of $99.8 million.

The following tabletables presentspresent our operating segment revenues from unrelated entities and their respective percentages of total revenues (in thousands, except for percentages):

As described in more detail below, as a result of strong demand for our services across most of the market sectors we serve, our consolidated revenues for the firstthree quartermonths ofended June 30, 2026 increased to $4.63$5.15 billion compared to consolidated revenues of $3.87$4.30 billion for the firstthree quartermonths ended June 30, 2025, and our consolidated revenues for the six months ended June 30, 2026 increased to $9.78 billion compared to consolidated revenues of $8.17 billion for the six months ended June 30, 2025. Revenues for the firstthree quarterand ofsix months ended June 30, 2026 included incremental acquisition contribution of $234.1$169.2 million.million and $403.3 million, respectively.

Revenues of our United States electrical construction and facilities services segment were $1.45$1.66 billion for the three months ended MarchJune 31,30, 2026, a $359.6$322.3 million increase compared to revenues of $1.09$1.34 billion for the three months ended MarchJune 31,30, 2025. Revenues of this segment for the six months ended June 30, 2026 were $3.11 billion, a $681.8 million increase compared to revenues of $2.43 billion for the six months ended June 30, 2025. This segment’s results includedfor $110.4the millionthree ofand incrementalsix acquisitionmonths revenues.ended SuchJune 30, 2026 benefited from increased revenuesactivity wereacross generateda from the majoritynumber of the market sectors we serve.serve as well as incremental acquisition revenues of $20.5 million and $130.9 million, respectively. While the largest increase was seen within the network and communications market sector, predominantly driven by greater demand for data center construction projects, this segment also experienced notable revenue growth within: (a) the institutional market sector, primarily as a result of increased revenues from public sector work, and (b) the hospitality and entertainment market sector, due to select project opportunities, and (b) the institutional market sector, primarily as a result of an increase in revenues from public sector projects.opportunities. Revenues of this segment for the three months ended March 31,both 2026 periods additionally benefited fromincluded greater levels of short-duration projects and service work. Partially offsetting these increases were decreased revenues resulting from: (a) the completion or substantial completion of several construction contracts within: (i) the healthcare market sector and (ii) the high-tech manufacturing market sector, including certain bio-tech and semiconductor projects, and (b) the transportation market sector, reflecting significant progress made on an airport construction project as well as our intentional reduction of roadway lighting and traffic signal project exposure.

Our United States mechanical construction and facilities services segment’s revenues for the three months ended MarchJune 31,30, 2026 were $2.03$2.30 billion, a $453.7$545.6 million increase compared to revenues of $1.57$1.76 billion for the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, revenues of this segment were $4.33 billion, a $1.0 billion increase compared to revenues of $3.33 billion for the six months ended June 30, 2025. This segment’s results for the three and six months ended June 30, 2026 included $123.7$148.7 million and $272.4 million, respectively, of incremental acquisition revenues. Similar to our United States electrical construction and facilities services segment, thisThis segment experienced increased revenues within the majority of the market sectors in which we operate, with the most significant increase coming from the network and communications market sector due to greater demand for data center construction projects. Notable growth was additionally generated from: (a) the institutional market sector, includingreflecting increased education and public sector projects, partially as a result of the incremental acquisition contribution, (b) the manufacturing and industrialcommercial market sector, primarily driven by certain food processing projects, (c) the commercial market sector, given an increase in warehousing and distribution project revenues, and (dc) the watermanufacturing and wastewaterindustrial market sectorsector, dueincluding tocertain greaterfood opportunitiesprocessing in the Southeast region of the United States.projects. Further contributing to the year-over-year revenue increaseincreases within this segment were greater levels of service work, including fire life safety inspection and maintenance. These increases were partially offset by revenue declines from the high-tech manufacturing market sector, largely as we completed certain semiconductor manufacturing construction projects in the prior year.

Revenues of our United States building services segment were $772.6$837.7 million for the three months ended MarchJune 31,30, 2026 compared to revenues of $742.6$793.3 million for the three months ended MarchJune 31,30, 2025. Revenues of this segment for the six months ended June 30, 2026 were $1.61 billion compared to revenues of $1.54 billion for the six months ended June 30, 2025. Growth in this segment for both 2026 periods was generated by: (a) its mechanical services division, which experienced increased: (ai) greater service repair and maintenance volumes, given growth in our service contract base, (ii) HVAC project and retrofit work, as demand for these services remained strong, and (biii) an increase in building automation and controls projects, as we continue to expand our service offerings in this area.area, and (b) its commercial site-based services division due to the award of facilities maintenance contracts with new customers as well as scope or site expansion and greater project work with existing customers.

Revenues of our United States industrial services segment for the three months ended MarchJune 31,30, 2026 were $381.8$353.8 million compared to revenues of $359.0$281.1 million for the three months ended MarchJune 31,30, 2025. Revenues of this segment for the six months ended June 30, 2026 were $735.6 million compared to revenues of $640.1 million for the six months ended June 30, 2025. The increase in this segment’s revenues for both 2026 periods was driven by its field services division as a result of: (a) greater turnaround activity, (b) higher petrochemical project volume, and (c) progress made on a large solar project during the first quarterhalf of 2026. Partially offsetting this growth was a decrease in revenues of this segment’s shop services division due to lower heat exchanger sales and related services.

For the three and six months ended MarchJune 31,30, 2025, our United Kingdom building services segment generated revenues of $105.3$134.6 million.million and $239.9 million, respectively.

Consolidated grossGross profit for the three months ended MarchJune 31,30, 2026 was $864.0$1.02 million,billion, or 18.7%19.8% of revenues, compared to consolidated gross profit of $722.7$833.8 million, or 18.7%19.4% of revenues, for the three months ended MarchJune 31,30, 2025. Gross profit for the six months ended June 30, 2026 was $1.89 billion, or 19.3% of revenues, compared to gross profit of $1.56 billion, or 19.0% of revenues, for the six months ended June 30, 2025. Gross profit for the three and six months ended MarchJune 31,30, 2026 included incremental acquisition contribution of $48.3$34.1 million and $82.4 million, respectively, net of amortization expense attributable to identifiable intangible assets of $4.9$3.2 million.million and $8.1 million, respectively. Excluding the impact of acquisitions, thethese year-over-year increaseincreases inresulted gross profit was driven byfrom the revenue growth generated by each of our reportable segments.segments as well as an increase in gross profit margin, notably within our United States electrical construction and facilities services segment and our United States building services segment, as described in further detail below.

Our selling, general and administrative expenses for the three months ended MarchJune 31,30, 2026 were $460.1$475.0 million, or 9.9%9.2% of revenues, compared to selling, general and administrative expenses of $404.0$418.6 million, or 10.4%9.7% of revenues, for the three months ended MarchJune 31,30, 2025. Selling, general and administrative expenses for the six months ended June 30, 2026 were $935.1 million, or 9.6% of revenues, compared to selling, general and administrative expenses of $822.5 million, or 10.1% of revenues, for the six months ended June 30, 2025. Selling, general and administrative expenses for the three and six months ended MarchJune 31,30, 2026 included $27.7$20.2 million and $47.8 million, respectively, of incremental expenses directly related to companies acquired, including amortization expense attributable to identifiable intangible assets of $3.9$2.4 million.million and $6.3 million, respectively.

Excluding incremental expenses resulting from acquisitions, the increase in our selling, general and administrative expenses for both 2026 periods was primarily as a result of greater: (a) incentive compensation expense, predominantly within our United States construction segments and our United States building services segment,segments, given higher projected annual operating results, (b) salaries and related employment expenses,expense, due to additional headcount to support our organic revenue growth as well as annual cost of living adjustments, and (c) rent and other occupancy costs, partially as a result of the continued build-out or expansion of our fabrication facilities.facilities, and (d) computer hardware and software costs, driven by various information technology and cybersecurity initiatives currently in process.

Partially offsetting thesethe increasesincrease in selling, general and administrative expenses for the six months ended June 30, 2026 were reductions in: (a) professional fees, as the results for the prior year included $9.4 million of transaction related costs incurred in connection with the acquisition of Miller Electric, and (b) the provision for credit losses, given a reserve taken within our United States industrial services segment in the prior year. Selling, general and administrative expenses for the three and six months ended June 30, 2026 additionally decreased by $7.2$8.2 million and $15.4 million, respectively, as a result of the sale of EMCOR UK.

The 50 basis point decrease in our SG&A margin year-over-yearfor both 2026 periods was primarily due to an increase in revenues without a commensurate increase in certain costs as we successfully leveraged our overhead structure during this period of growth.

The following tabletables presentspresent our operating income (loss) and operating income (loss) as a percentage of segment revenues (“operating margin”) (in thousands, except for percentages):

Our United States mechanical construction and facilities services segment’s operating income for the three months ended MarchJune 31,30, 2026 was $221.6$286.6 million, an increase of $34.9$47.9 million compared to operating income of $186.7$238.7 million for the three months ended MarchJune 31,30, 2025. Operating income of this segment for the six months ended June 30, 2026 was $508.3 million, an increase of $82.8 million compared to operating income of $425.5 million for the six months ended June 30, 2025. The increase in operating income of this segment for both 2026 periods resulted from greater gross profit within the majority of the market sectors in which we operate, generally in line with the increases in revenue described above and with the most significant increase coming from network and communications. This segment’s operating income for the firstthree quarterand ofsix months ended June 30, 2026 included incremental acquisition contribution of $12.3$14.1 million and $26.4 million, respectively, net of amortization expense attributable to identifiable intangible assets of $4.9$4.6 million.million Excludingand incremental$9.4 acquisitionmillion, contribution,respectively. For the increasethree inand six months ended June 30, 2026, operating incomemargin of this segment resulted from greater gross profit given the growth in its revenues. Greater profitability was experienced across the majority of the market sectors in which we operate, in line with the fluctuations in revenue described above12.5% and with11.7%, the most significant increase in gross profit coming from network and communications. Operating margin of our United States mechanical construction and facilities services segment was 10.9% for the three months ended March 31, 2026,respectively, compared to an operating margin of 11.9%13.6% and 12.8% for the three and six months ended MarchJune 31,30, 2025.2025, respectively. The 100110 basis point decrease in this segment’s operating margin for both 2026 periods was primarily a result of a change in project mix, which included: (a) a greater percentage of revenues generated from projects for which we are acting as either the construction manager or prime contractor and that carry lower than average gross profit margins, and (b) an increase in the number of guaranteed maximum price and cost plus contracts, particularly in newer geographies or on projects where design or scope is still evolving.

Our United States industrial services segment reported operating income of $12.8$9.6 million, or 3.3%2.7% of revenues, for the three months ended MarchJune 31,30, 2026, compared to an operating incomeloss of $6.8$0.4 million, or 1.9%(0.1)% of revenues, for the three months ended MarchJune 31,30, 2025. ContributingFor the six months ended June 30, 2026, this segment reported operating income of $22.4 million, or 3.0% of revenues, compared to theoperating favorable year-over-year comparison was the impactincome of a$6.3 $4.0million, millionor increase1.0% inof the allowance for credit losses in the prior year period, which negatively impacted this segment’s operating margin by 110 basis pointsrevenues, for the threesix months ended MarchJune 31,30, 2025. Excluding this impact, theThe increase in operating income and operating margin of this segment for both 2026 periods was primarily a result of an increase in gross profit and gross profit margin within its field services division due to the revenue growth referenced above, coupledwhile withthe increase in operating margin was attributable to a morereduction in SG&A margin given an increase in revenues without a commensurate increase in certain overhead costs. Additionally contributing to the favorable mixcomparison for the six month period was the impact of work.a $5.0 million increase in the allowance for credit losses in 2025, which negatively impacted this segment’s operating margin by 80 basis points.

Our corporate administration expenses for the three and six months ended MarchJune 31,30, 2026 were $45.5$43.7 million and $89.2 million, respectively, compared to $52.2$39.2 million and $91.4 million for the three and six months ended MarchJune 31,30, 2025.2025, Therespectively. reductionFor inboth 2026 periods, our corporate expenses included greater employment and information technology costs. Offsetting the impact of these increases for the six months ended June 30, 2026 was primarily due to a decrease in professional fees, as the prior year period included $9.4 million of transaction related costs incurred in connection with the acquisition of Miller Electric. This decrease was partially offset by an increase in certain employment expenses.

For the three and six months ended MarchJune 31,30, 2026, our income tax provision was $104.6$148.0 million and $252.6 million, respectively, compared to an income tax provision of $83.5$109.9 million and $193.4 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively. Our effective income tax rate for the three and six months ended MarchJune 31,30, 2026 was 25.5%26.8% and 26.3%, respectively, compared to an effective income tax rate for the three and six months ended MarchJune 31,30, 2025 of 25.8%.26.7% and 26.3%, respectively. Refer to Note 9 - Income Taxes of the notes to consolidated financial statements for further discussion regarding our income tax provision and effective income tax rate.

Our remaining performance obligations at MarchJune 31,30, 2026 were a record $15.62$17.14 billion compared to $13.25 billion at December 31, 2025 and $11.75$11.91 billion at MarchJune 31,30, 2025. When compared to December 31, 2025, remaining performance obligations increased by $2.37$3.89 billion due to new contract awards within our United States construction segments and our United States building services segment. We experienced growth in remaining performance obligations from the majority of the market sectors we serve, with the most significant increases within: (a) network and communications, predominantly as a result of several data center construction contracts, (b) healthcare, primarily resulting from certain contract awards in the Northeast region of the United States, (c) water and wastewater, given recent project awards in the Southeast region of the United States, and (cd) institutional, largely as we continue to see demand for our services from education customers, including a number of colleges and universities, and (d) healthcare, resulting from certain contract awards in the Northeast region of the United States.universities. Partially offsetting these increases were reductions from the manufacturing and industrial and hospitality and entertainment market sectors, due to progress made on certain projects during the first quarterhalf of 2026. See Note 3 - Revenue from Contracts with Customers of the notes to consolidated financial statements for further disclosure regarding our remaining performance obligations.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $916.4$924.4 million, which are maintained in depository accounts and highly liquid investments with original maturity dates of three months or less. Both our short-term and long-term liquidity requirements are expected to be met through our cash and cash equivalent balances, cash generated from our operations, and, as necessary, the borrowing capacity under our revolving credit facility. Our credit agreement provides for a $1.30 billion revolving credit facility, for which there was $1.23 billion of available capacity as of MarchJune 31,30, 2026.

During the threesix months ended MarchJune 31,30, 2026, our cash balance decreased by $195.5$187.6 million from $1.11 billion at December 31, 2025 to $916.4$924.4 million at MarchJune 31,30, 2026. Changes in our cash position from December 31, 2025 to MarchJune 31,30, 2026 are described in further detail below.

Operating Activities – Operating cash flows generally represent our net income as adjusted for certain non-cash items and changes in assets and liabilities. Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $0.6$289.9 million compared to $108.5$302.2 million for the threesix months ended MarchJune 31,30, 2025. TheDespite the increase in our net income, the decrease in our operating cash flow was primarily a result of an increase in accountsworking receivablecapital given our strong organic revenue growth during the first quarterhalf of 2026. These amounts will be converted to cash as the year progresses and payments are received by our customers in the ordinary course of business.

Investing Activities – Investing cash flows consist primarily of payments for acquisition of businesses, capital expenditures, and proceeds from the sale or disposal of property, plant, and equipment or other long-term assets. Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 decreased by $803.7$786.1 million compared to the threesix months ended MarchJune 31,30, 2025, primarily due to a decrease in payments for acquisitions given the acquisition of Miller Electric in the prior year period.

Financing Activities – Financing cash flows consist primarily of the issuance and repayment of short-term and long-term debt, repurchases of common stock, payments of dividends to stockholders, and the issuance of common stock through certain equity plans. Net cash used in financing activities was $124.4$324.7 million for the threesix months ended MarchJune 31,30, 2026 compared to $0.8$231.1 million for the threesix months ended MarchJune 31,30, 2025. The $123.5$93.6 million increase in cash used in financing activities was primarily due to the impact in the first quarter of 2025 of $250.0 million ofin proceedsnet fromborrowings made under our revolving credit facility,facility during the first half of 2025, partially offset by a $137.7$163.6 million decrease in common stock repurchases made by us year-over-year. The timing of common stock repurchases is at management’s discretion subject to securities laws and other legal requirements and depends upon several factors, including market and business conditions, current and anticipated future liquidity, share price, and share availability, among others. For additional detail regarding our share repurchase program, refer to Note 10 - Common Stock of the notes to consolidated financial statements.

We currently pay a regular quarterly dividend of $0.40 per share. For the threesix months ended MarchJune 31,30, 2026 and 2025, cash payments related to dividends were $17.8$35.6 million and $11.5$22.6 million, respectively. Our credit agreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of such agreement currently materially limit our ability to pay such quarterly dividends for the foreseeable future.

As of MarchJune 31,30, 2026, our short-term and long-term material cash requirements for known contractual and other obligations were as follows:

Outstanding Debt and Interest Payments – As of MarchJune 31,30, 2026, there were no direct borrowings outstanding under our revolving credit facility. Interest payments on any future borrowings will be determined based on prevailing interest rates at that time. Refer to Note 7 - Debt of the notes to consolidated financial statements for further detail of our debt obligations, including our revolving credit facility.

Operating and Finance Leases – In the normal course of business, we lease real estate, vehicles, and equipment under various arrangements which are classified as either operating or finance leases. Future payments for such leases, excluding leases with initial terms of one year or less, were $622.4$661.7 million at MarchJune 31,30, 2026, with $127.5$132.8 million payable within the next 12 months.

Open Purchase Obligations – As of MarchJune 31,30, 2026, we had $3.41$3.93 billion of open purchase obligations, of which payments totaling $2.82$3.07 billion are expected to become due within the next 12 months. These obligations represent open purchase orders to suppliers and subcontractors related to our construction and services contracts. These purchase orders are not reflected in the Consolidated Balance Sheets and are not expected to impact future liquidity as amounts should be recovered through customer billings.

Insurance Obligations – As described in further detail in Note 11 - Commitments and Contingencies of the notes to consolidated financial statements, we have loss payment deductibles and/or self-insured retentions for certain insurance matters. As of MarchJune 31,30, 2026, our insurance liabilities, net of estimated recoveries, were $315.8$330.4 million. Of this net amount, $73.5$80.1 million is estimated to be payable within the next 12 months. Due to many uncertainties inherent in resolving these matters, it is not practical to estimate these payments beyond such period. To the extent that the amount required to settle claims covered by insurance continues to increase, the cost of our insurance coverage, including premiums and deductibles, is likely to increase.

Contingent Consideration Liabilities – We have incurred liabilities related to contingent consideration arrangements associated with certain acquisitions, payable in the event discrete performance objectives are achieved by the acquired businesses during designated post-acquisition periods. The aggregate amount of these liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, changes in the fair value of amounts owed based on performance during such post-acquisition periods, and accretion in present value. As of MarchJune 31,30, 2026, the present value of expected future payments relating to these contingent consideration arrangements was $2.5$5.7 million. Of this amount, $2.3$4.3 million is estimated as being payable within the next 12 months.

The terms of our construction contracts frequently require that we obtain from surety companies, and provide to our customers, surety bonds as a condition to the award of such contracts. These surety bonds are issued in return for premiums, which vary depending on the size and type of the bond, and secure our payment and performance obligations under such contracts. We have agreed to indemnify the surety companies for amounts, if any, paid by them in respect of surety bonds issued on our behalf. As of MarchJune 31,30, 2026, based on the percentage-of-completion of our projects covered by surety bonds, our aggregate estimated exposure, assuming defaults on all our then existing contractual obligations, was $4.19$4.30 billion, which represents approximately 27%25% of our total remaining performance obligations.

Surety bonds are sometimes provided to secure obligations for wages and benefits payable to or for certain of our employees, at the request of labor unions representing such employees. In addition, surety bonds or letters of credit may be issued as collateral for certain insurance obligations. As of MarchJune 31,30, 2026, we satisfied $105.5 million and $72.8$73.1 million of the collateral requirements of our insurance programs by utilizing surety bonds and letters of credit, respectively. All such letters of credit were issued under our revolving credit facility, therefore reducing the available capacity of such facility.

The preparation of our consolidated financial statements is based on the application of significant accounting policies, which require management to make estimates and assumptions. Our significant accounting policies are described further in Note 2 - Summary of Significant Accounting Policies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of our Form 10-K for the year ended December 31, 2025. We base our estimates on historical experience, known or expected trends, third-party valuations, and various other assumptions that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. There have been no significant changes to our critical accounting policies or methods during the threesix months ended MarchJune 31,30, 2026.