MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Operating Income The following table presents EMCOR’s operating income, and operating income as a percentage of segment revenues, for the years ended December 31, 2001, 2000 and 1999 (in millions, except for percentages): Operating income increased for the United States electrical construction and facilities services operations for 2001 compared to 2000. The dollar increase in operating income for 2001 of $16.7 million, or 28.5%, as compared to 2000, and increase as a percentage of revenues, was attributable to an increase in activity associated with energy generation and transportation infrastructure construction projects on the west and east coasts, and increased operating income from various activities in the Salt Lake City market. This increase in operating income was partially offset by reduced levels of fast-track data center construction activity in San Francisco, Washington, D.C. and Denver markets and the decrease in construction activity in the Las Vegas market. Operating income for 2000 for the United States electrical construction and facilities services operations increased $20.1 million, or 52.2%, from 1999 levels. The increase in operating income, and operating income, as a percentage of revenues, for 2000 versus 1999 was attributable to the continuing favorable market conditions due to increased renovation and retrofit projects as well as new construction spending, particularly in the Eastern and Western United States. United States mechanical construction and facilities services operating income increased $5.5 million for 2001, a 15.3% increase over 2000 amounts. The increase in dollars, and as a percentage of revenues, was primarily due to (i) energy generation construction activity on the west and east coasts, partially offset by a reduction of construction activity in the Las Vegas market and (ii) Canada construction and facilities services operating income decreased by $2.9 million for 2001 compared to 2000 principally due to project start date delays in Eastern Canada for certain projects in backlog and a reduction of revenues in Western Canada due to the timing of anticipated projects. Operating income as a percentage of revenues decreased to 1.2% in 2001 compared to 2.2% in 2000 also due to the project start delays and the timing of anticipated projects. For 2000 compared to 1999, operating income increased by $1.2 million principally due to an increased level of activities in Eastern Canada. The increase United States other services operating losses increased $1.7 million for 2001 as compared to 2000 primarily due  to costs associated with the continued development of the consulting operations and maintenance services activities of EMCOR. These operating losses for 2000 compared  to 1999 increased by $0.9 million also due to the development costs of the consulting operations and maintenance services. improved results at certain of EMCOR’s Poole & Kent subsidiary operations which had losses in the prior year. Operating income for 2000 compared to 1999 decreased $2.1 million, or 5.5%, and as a percentage of revenues decreased to 2.8% from 3.6%, primarily due to losses on jobs in the South and North Carolina markets undertaken by EMCOR’s Poole & Kent subsidiary prior to its acquisition by EMCOR offsetting the increased operating income for most of the operations in this segment. % of % of % of Segment Segment Segment 2001 Revenues 2000 Revenues 1999 Revenues Operating income (loss): United States electrical construction and facilities services $ 75.3 5.6% $ 58.6 4.3% $ 38.5 3.9% United States mechanical construction and facilities services 41.4 3.4% 35.9 2.8% 38.0 3.6% United States other services (7.2) — (5.5) — (4.6) — Total United States operations 109.5 4.0% 89.0 3.2% 71.9 3.4% Canada construction and facilities services 2.3 1.2% 5.2 2.2% 4.0 2.0% United Kingdom construction and facilities services 7.2 1.6% 6.0 1.3% 3.2 0.6% Other international construction and facilities services (1.2) — 0.5 — (0.3) — Corporate administration (29.1) — (21.8) — (20.7) — Total worldwide operations 88.7 2.6% 78.9 2.3% 58.1 2.0% Other corporate items: Interest expense (4.8) (9.7) (10.5) Interest income 5.6 2.4 2.1 Income before taxes $ 89.5 $ 71.6 $ 49.7