Business Overview General EMCOR Group, Inc. (“EMCOR”) is one of the largest mechanical and electrical construction and facilities services firms in the United States, Canada, the United Kingdom and in the world. In 2000, EMCOR had revenues of more than $3.46 billion. EMCOR provides services to a broad range of commercial, industrial, utility, and institutional customers through approximately 45 principal operating subsidiaries, including its majority interest in a limited liability company that provides facilities services to over 2,500 buildings with more than 70 million square feet of space. These businesses have offices in 32 states and the District of Columbia in the United States, seven provinces in Canada and ten primary locations in the United Kingdom. In the United Arab Emirates, Saudi Arabia and South Africa, EMCOR carries on business through subsidiaries and joint ventures. EMCOR’s  executive offices are located at 101 Merritt Seven Corporate Park, Norwalk, Connecticut 06851-1060, and its telephone number at those offices is (203) 849-7800. EMCOR specializes in the design, integration, installation, start-up, operation and maintenance of: • Systems for generation and distribution of electrical power; • Lighting systems; • Low-voltage systems, such as fire alarm, security, communications and process control systems; • Voice and data communications systems; • Heating, ventilation, air conditioning, refrigeration  and clean-room process ventilation systems; and • Plumbing, process and high-purity piping systems. EMCOR also provides services needed to support the operation of customers’ facilities, which services are not related to customers’ construction programs. These services, frequently referred to as facilities services, include site-based operations and maintenance, mobile maintenance and service, small modification and retrofit projects, consulting, program development and  management for energy systems, and maintenance of facilities. Facilities services are provided to a wide range of commercial, industrial, utility and institutional facilities, including those at which EMCOR provided construction services and others at which construction services were provided by other contractors. EMCOR’s varied facilities services are frequently combined to provide integrated service packages which include mechanical, electrical and other services. EMCOR provides mechanical and electrical construction services and facilities services directly to corporations, municipalities and other governmental entities, owners/developers and tenants of buildings. It also provides these services indirectly by acting as a subcontractor to construction managers, general contractors, systems suppliers and other subcontractors. Worldwide, EMCOR employs approximately 22,000 people. EMCOR’s revenues are derived from many different  customers in numerous industries which have operations in  several different geographical areas. Of EMCOR’s 2000 revenues, approximately 80% were generated in the United States and approximately 20% were generated internationally. In 2000, approximately 43% of revenues were derived from new  construction projects and approximately 57% of revenues were derived from renovation and retrofit of customers’ existing facilities and from EMCOR’s facilities services operations (renovation and retrofit work and facilities services operations are sometimes referred to by stock analysts as maintenance, repair and  replacement or “MRR”). Approximately 84% of 2000 revenues were generated from both new construction and renovation  and retrofit projects, and approximately 16% of 2000 revenues were generated from facilities services operations. For the period 1997 through 2000, revenues and EBITDA grew at compound annual growth rates of 21.1% and 38.7%, respectively. The broad scope of EMCOR’s operations is more particularly described below. EMCOR believes that the mechanical and electrical construction services and facilities services business is highly fragmented, consisting of thousands of small companies across the United States and around the world. Because EMCOR has total assets, annual revenues, net worth, access to bank credit and surety bonding, and expertise significantly greater than most of its competitors, EMCOR believes it has a significant competitive advantage. The mechanical and electrical construction services industry has a higher growth rate than the overall construction industry, due principally to the increase in content and complexity of mechanical and electrical systems in all types of projects. This increased content and complexity is, in part, a result of the expanded use of computers and more technologically advanced voice and data communications, lighting, and environmental  control systems in all types of facilities. For these reasons, buildings of all types consume more electricity per square foot than in  the past and thus need more extensive electrical distribution  systems. In addition, advanced voice and data communication systems require more sophisticated power supplies and extensive low voltage and fiber-optic communications cabling. Moreover, the need for greater environmental controls within a building, such as the heightened need for climate control to maintain extensive computer systems at optimal temperatures, and the growing demand for environmental control in individual spaces, have created expanded opportunities for the mechanical and electrical construction services and facilities services business. Mechanical and electrical construction services primarily involve the design, integration, installation and start-up of: (1) systems for the generation and distribution of electrical power, including power cables, conduits, distribution panels, transformers, generators, uninterruptible power supply systems and related switch gear and controls; (2) lighting systems, including fixtures and controls; (3) low-voltage systems, including fire alarm, security, and process control systems; (4) voice and data communications systems, including fiber- optic and low-voltage copper cabling; (5) heating, ventilation, air conditioning (collectively, “HVAC”), refrigeration and  clean-room process ventilation systems and (6) plumbing, process and high-purity piping systems. 12 EMCOR, 2000 Annual Report The Business Mechanical and Electrical Construction Services and  Facilities Services