Good morning. My name is Christine and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group fourth quarter '07 conference call. (Operator Instructions) I would now like to turn the call over to Mr. Eric Boyriven of FD. Sir, you may begin.

Thank you and good morning everyone. I would like to welcome you to the EMCOR Group conference call. We are here to discuss the company's 2007 fourth quarter results, which were reported this morning. I'd now like to turn the call over to Kevin Matz, Executive Vice President, Shared Services, who will introduce management. Please go ahead, Kevin.

Thank you, Eric, and good morning, everyone. Welcome to EMCOR Group's fourth quarter Earnings Call. Those of you accessing the call via the Internet at our website, welcome and we hope you have arrived at the beginning of the slide presentation that will accompany our remarks today. Currently we are on slide one, the EMCOR title slide. During the call, instructions will be given for you to advance to the next slide. This is one of those times, so please advance to slide two. Slide two depicts the executives who are with me to discuss the quarter and 12 months results. They are Frank MacInnis, Chairman and Chief Executive Officer; Tony Guzzi, President and Chief Operating Officer; Mark Pompa, our Executive Vice President and Chief Financial Officer; Mava Heffler, Vice President, Marketing and Communications; and our Executive Vice President and General Counsel, Sheldon Cammaker. For call participants who are not accessing the conference call via the Internet, this presentation, including the slides, will be archived in the Investor Relations section of our website under Presentations. You can find us at EMCORGroup.com Before we begin, I want to remind you that this discussion may contain certain forward-looking statements. Any such statements are based upon information available to EMCOR management's perception as of this date, and EMCOR assumes no obligation to update any such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. Such risks and uncertainties include, but are not limited to, adverse effects of general economic conditions, changes in the political environment, changes in the specific markets for EMCOR services, adverse business conditions, increased competition, mix of business and risks associated with foreign operations. Certain of the risks and factors associated with EMCOR's business are also discussed in the company's 2007 Form 10-K filed this morning and other reports filed from time to time with the Securities and Exchange Commission. With that said, please let me turn the call over to Frank. Frank?

Thank you, Kevin. Do you have a good singing voice? We might try that in the future.

I tried out for American Idol but I didn't make it through the first round.

I see. Good morning, everyone, and welcome to our 52nd regular quarterly conference call for investors, analysts and other friends of EMCOR Group. This is also the 13th Annual Year-End Earnings Call over which may of our senior management team members have presided, an important aspect of EMCOR's long-term strategic continuity that has led to remarkably consistent profitability. More on that in a moment. Toady's call is being conducted as usual by telephone and by simultaneous webcast, and I'll be referring from time to time to a slide number to identify the relevant slide for webcast participants. Right now we are still on slide two. The focus of today's call will be the EMCOR Group fourth quarter and full-year 2007 earnings press release and 2007 Form 10-K that were issued and filed earlier this morning. We'll conduct this call in our customary way. First, a presentation and discussion of those operating results and our year-end balance sheet and my comments on the major factors that contributed to our excellent 2007 financial performance. Then we'll discuss the evolution and current status of our contract backlog portfolio and what we think it means with respect to our future performance. At that point our President and COO, Tony Guzzi will take over to present and discuss some noteworthy, recent contract awards that illustrate the strength and diversity of EMCOR companies and continued demand for our services across a wide range of markets. Then I'll be back to present and discuss the answers to two important questions. The first which I have been asked numerous times in the last few months by analysts and investors familiar with our history is in light of economic uncertainties and the possibility of a recession similar to that experienced in 2003, how is EMCOR equipped today to cope…

Thanks, Frank. The awards in the fourth quarter continue to represent the project service and geographic diversity which is present throughout all 2007 and more importantly, present across EMCOR's long history. We had record levels of revenue, especially in the fourth quarter but we grew backlog year-over-year which is testament to the continued demand for the portfolio of our services. I'll walk you through a couple of projects now that we won here in the fourth quarter. Every quarter we see demand from healthcare, and healthcare is a good long-term core market for EMCOR and it represents 15% of our total backlog. Why is healthcare good for EMCOR? It's a system rich environment, that only the best contractors can do, that have the requisite design, design fabrication and pre-fabrication capabilities that EMCOR possesses. An example is the John Muir Medical Center. Contra Costa, the electrical company that we own in Northern California will provide the full electrical package for the renovation and expansion of John Muir Medical Center in Walnut Creek, California. Contra's responsibility will include the expansion of the hospital's space for 347,000-square-foot-patient-care tower that will feature expanded areas for the critical care unit, neonatal nursery, emergency rooms, trauma and surgery departments. We will also relocate the helicopter landing pad and power a new central utility plant and install electrical service for 800-stall parking garage. Across the country Tucker Mechanical will be providing the plumbing, HVAC and fire protection for our 120,000 square foot two-story casino addition to the East Side of the Mohegan Sun Casino in Connecticut. This is a fast track job which fits perfect within Emory's well house. This is scheduled to open in the fall of 2008 and will feature 45,000 square feet of new gaming space, approximately 900 slots machines, retail outlets and 16,000…

Thank you, Tony. I hope we continue to make big wampum at the Mohegan Casino in particular. As I mentioned at the beginning of this call, I've had a number of investors and analysts, sensitive of course to current market uncertainties, want to know how EMCOR might perform if a recession materializes in 2008 as it last did for EMCOR in 2003. Recall that in 2003, EMCOR remained profitable in all four quarters, part of our 50-quarter run, but net margins declined significantly. The next two slides contrast the EMCOR of early 2003, with EMCOR as it enters 2008. Please go to slide eleven. In response to performance issues during 2003, notably in our U.S Mechanical segment, we changed our senior management structure and formed EMCOR Construction Services in 2004. Since then, we've dramatically reformed our corporate subsidiary senior management group. Today, we are better managed than ever before. At the same time, as discussed on the backlog slide, we've made major changes in the size, scope, diversity and risk component of our business sector backlog breakdown. Overall, backlog value is 80% higher today than in 2003. While commercial and office work has remained at a constant level of 25% of backlog for both periods, we've eliminated a major 2003 backlog problem in K-12 Education and we've transformed our institutional sector into a profitable and promising government services organization. Healthcare and hospitality have grown dramatically, both in size and in significance in terms of market reliability and margin availability. On slide 12, we continue to contrast 2003 and 2008. Since 2003 we've fulfilled a long-time strategic goal to increase the proportion of our revenues that is derived from service work. Despite strong growth in our construction revenues during the same period, we expect service work to be about 35% of…

(Operator Instructions) Your first question is from Rich Wesolowski with Sidoti.

Good morning, Rich. Rich Wesolowski - Sidoti & Company: Thanks. Good morning. Frank, the big margins on the work that you are putting in backlog, do you think those match what you recognized in the income statement?

The backlog for the most part was booked during 2007, a year that saw a dramatic improvement in our overall margins, both for the quarter and for the year. And my answer is, yes, I believe that the project in backlog by and large represent the same kind of enhanced margin opportunities that we reported from our completed operations in '07. Rich Wesolowski - Sidoti & Company: Okay. I'd like to try and reconcile that confirmation with the backlog mix. The share of your backlog in what is normally considered the higher margin, and the more cyclical categories, commercial, hospitality and gaming are going down from '06. Are the backlog margins are holding up? Does that translate to a higher margin on the stable institutional, healthcare, etcetera that you haven't seen in the past?

Rich, this is Tony. There are couple things that underlie our view on that. Correct commercial is down as a percentage of backlog '07 to '08 versus to '06 to '07. But there is a couple of important factors when we think about mix. First of all, in our industrial sector, Ohmstede is now part of the mix in our backlog in the industrial sector that was non-existent for the most part, that part of it was non-existent in '06 to '07 and today it's a substantial part, and if you remember in December 3rd we released the 8-K that talked about Ohmstede and the mix of business from Ohmstede and what the profitability looks likes. So we think that's a major contributor. We do think that the healthcare work that we're booking today versus the work we are booking two years ago, though a very difficult jobs, that contractual terms and the mix of that business tend to be a little better than they were a couple of years ago when the work would have been booked the effect of 2007 results. And the final thing is, we're seeing continued demand for our small project and task work especially driven by energy retrofit projects, work that never makes it into the backlog that has nice margins because of the savings opportunities that are available to our customers. Rich Wesolowski - Sidoti & Company: Okay, thank you. And secondly, we just saw a slight unwinding of the net over-billed position from the third quarter. Is that blip? Or is that the start of a longer trend?

No, it's customary that our net over-billed position actually does move downward as we get later in the year, but if you have got the relative comparison to look at 12/31 versus 12/31 which was significant increase.

Yes, we see this varying seasonably and fairly predictable pattern, Rich. This is Frank again by the way. But the number overall is a huge one, and I think the best fourth quarter ending number in our history by a wide margin and I challenge you to find another company that has this kind of balance sheet strength and contract administration results. This is purely a dramatic part of the benefit that we bring to our stockholders. Rich Wesolowski - Sidoti & Company: Great, thank you

Thank you, Rich.

Your next question is from Alex Rygiel with FBR.

Good Morning, Alex.

Everybody else great quarter and congratulations.

Thank you

One of the concerns that popped up a couple months ago was a project that was canceled. Could you comment on, but then sort of restarted or never really canceled but never really restarted, long story short. If you could comment on the risk in backlog of project cancellations and maybe even highlight the one in Las Vegas that was one of the projects in question few months?

Sure, I've commented periodically, that EMCOR tends to have a very, very low rate of project cancellation, once they appeared in backlog. That is because of a number of factors. First of all, talking about a typical construction contract, the value added EMCOR services is so great that the progress of construction up until EMCOR arrives to begin the system installation has really resulted in a hulk of facility that is useless for any purpose whatever until the systems begin to be installed. If you think about building performance including the facility in which you're sitting, listening to this call this morning without the system, it would be useless. So we find that the value added of the work that we do is so important and critical to the ultimate value of the facility that it's very rarely canceled, once the momentum associated with project construction has started. In addition, the sunk costs in a typical project associated with to be trite the digging of the hole, the filling of the hole with concrete, the erection of the steel, application of the glass and all the other things necessary to create the building shell is expensive, but ultimately useless, unless and until our systems are installed. So, the result, and this is over many years, is that there is a minuscule percentage of EMCOR projects that are canceled, or even significantly deferred, because of that very large value-added component that we bring to the performance of a new building or even to a retrofitted building. The project that Alex was talking about is a major Las Vegas project in which there were some financing problems being encountered by the initial developer of the project and some rumors circulating concerning his inability to obtain financing to complete the project. This was a perfect example of one of those projects in which the sunk costs were so dramatically high, that it was clear that the project had to be taken to completion, because we hadn't even significantly begun to install the systems that we provide that are so important to the performance of a modern building. As Alex mentioned in his question, a solution was found between the initial developer, some possible replacements for that developer as owners of the project and the financing entities that are supporting the construction. And we believe to-date that that project will proceed to a successful completion.

Frank and I appreciate all these extra slides that you had in your presentations, outstanding, especially the comparison of '08 versus '03, but I still think you are doing yourself somewhat a disservice. And I would ask you then in your next call, you include a bullet that identifies that service work is expected to be what percent of total EBIT in '08 versus what percent in '03, because I think your profitability of your facility services business today, number 1 is two X what it was four years ago, and number 2, now also includes the Ohmstede acquisition, which is either much higher margin. So I would love to see those two data points on your next call.

. :

Thank you. Great quarter.

Thank you.

Your next question is from Richard Paget with Morgan Joseph.

Good morning, Rich.

I wondered if you could comment about current bid activity, I know everyone sees the headlines out there and the chance of a slowdown, I think it's greater than it was a couple of months ago and ABI recently came out and that took a big dip. What are you guys seeing on the street level these days?

Thanks for the question. Just to acquaint other listeners with ABI, what Rich is referring to is the architects billing index, which is a monthly publication of the American Institute of Architects, said to provide a 9 to 12 months advance look at various categories of construction. My interpretation of the index is that it pertains primarily to Greenfield nonresidential construction. It certainly doesn't affect or purport to analyze, at least for the most part, any of the kind of retrofit of reconstruction or service work that we do, and because, they say polls conducted among a group of architectural firms, in my mind there is some question about its statistical reliability at least in a specific monthly period. However, it's interesting and useful and one of the things that we look at in connection with long-term trend analysis and Rich is right, that in the most recent report issued the day before yesterday that it showed a downturn in architectural billings pertaining to future work from a index of about 55 to an index of 50.4, with anything over 50 reflecting growth. So you could say that the ABI declined in the month over month period from a indicator of strong growth for the next 9 to 12 months to a period of or an expectation of slow growth. That may be so. We look at the ABI as one of our criteria for future planning, but we also look at the reports and the financial results of large companies, publicly-traded companies in what I would call the front end of our business, the design and project engineering and project of management and development areas, companies like Floor and Jacobs. and companies that are closer to the front end of the business. and we see them continuing to perform well. So it's just one of many criteria that we look at for an assessment of what our opportunities will be like, 9 months to 12 months down the line. and frankly my conclusion and one of the assumptions on which we based our guidance for the year was. that our diversity and our backlog presence in a number of sectors that nobody expects to cyclically decline. Water and waste water, transportation, and healthcare will be sufficient to support our assumptions even if there's a further downturn in Greenfield office and commercial work which is of relatively small percentage of our overall backlog. Tony?

Yeah, the bidding activity is pretty decent yet, and one of the things we are seeing is what Frank said, we take advantage of the diversity and because we have the ability to work on the most sophisticated, and the most complicated projects, what we are seeing is a move towards projects $10 million and above and we are still seeing healthy activity in the $2 million and below project. And it's going pretty well. We do keep an eye on what's happening with our customers and on our commercial side, but luckily that's not the only place we are anchored. We have great diversity across us. So I guess what I would say, we see good opportunity on the larger projects. We see good opportunity on the more complicated projects like healthcare and water and wastewater and we still see relatively healthy activity even in the commercial sector. But it's something we watch closely, and luckily we are expanded into industrial and other sectors, and so we can take advantage of helpful markets.

There is one other competitive factor that I'd like to mention and that is that our surety bonding capacity, which is I believe the strongest in the industry, is a significant competitive advantage, especially on project in the public sector, where the law requires the issuance of a surety bond in support of a contractors or a service providers obligations. The strength of our balance sheet at its all-time high in this period is additional reinforcement to that competitive strength in our ability to obtain the award of contracts in preference to other service providers.

Okay, great. And then how are guys seeing the acquisition market. I know a lot of owners out there had some pretty high expectations, but with things potentially slowing down, have you seen that standpoint change at all?

I am not sure that we see, whether we're seeing more books today than we saw last year, there was a huge flurry of activity associated with the private equity predations of the last two years of so. We were fortunate to be able to bid effectively against private equity purchasers when we acquired Ohmstede and we're pleased and proud about that. I think it's going to be a really interesting year. We're hearing about the possibility that private equity may need to divest of some previously acquired assets, and we'll be interested in looking at those. There are also a category of service companies in our business who don't want to be on by private equity, who think that the best place for them is with the true operating company like us, run by people who understand and appreciate operations and place the appropriate value on their personnel. So I think they that there maybe some divestitures and/or some privately-owned companies who will come to us this year looking for a place to build their careers and their companies within the EMCOR Group and we're going to be ready to do that both in cash and in credit terms.

If you look at our history Frank, those private companies are something they are going to foster over a long period of time, and they look at EMCOR as a great place to continue to build their business, have a capital to do it. I mean you look at acquisitions like Comunale, (inaudible), even Air Systems, there was no public market for those companies, that was the place where we wanted them to be part of our team, and they wanted to be part of our team, and the same people are managing it then, are managing it now and we bring significant advantage to those companies, and we allow them the capital and the bonding, and the things they need to grow, coupled with they can now focus on the business. But we worry about things like insurance, bonding, healthcare and banking relationships and then take advantage of our national account opportunities and our purchasing synergies that we bring real value when we can execute that kind of transaction and we like them.

Hi, this is Kevin. I think that leverage deals are very much declined and there are not a lot of leverage deals around at all. Company, so I think that for us a strategic buyer, there'll be better opportunities with less competition, so we'll be able to stay strategic and discerning with regard to the opportunities that come to us and I think they will be this year.

I think the reality is for people that bought high and expect to sell high to people like us, they're going to be disappointed like they've always been.

I think that's right. I think the EMCOR is well known as disciplined purchaser and willing to slavishly follow trends. I'd also like to reiterate the three areas of our primary strategic interests in investments and acquisitions. We're determined to continue building our government services division, particularly with respect to military and related work in anticipation of the continued civilianization of the military and the increasing role that service experts like EMCOR, will provide in that area of government services. We really like the fire protection business. We think we perform it well. We've assumed a very prominent role in the national market for fire protection which is an essential service and with strong follow-up characteristic and we really like it. And lastly, we're delighted with the performance of our Ohmstede acquisition. Tony has gotten the disease. He now thinks that everything associated with oil and gas is wonderful and I have to hold him down from throwing money at it, but seriously we do think that it's a great sector, it's one that I'm very comfortable with personally and that we want to support its continued growth.

And of course services.

All right, thanks. I'll get back in queue.

Thank you.

Your next question is from John Rogers of D.A. Davidson.

Hi. John

A couple of things. First of all, the amortization schedule for Ohmstede, what's that look like into 2008 and then '09?

I'm going to give you a rough overview, I'm not sure if Mark will go pale when he hears me start talking about amortization or not, so he can chip at the conclusion. Listeners will probably know that the acquisition of a major asset like Ohmstede necessitates the allocation of the purchase price between various categories of assets, and the allocation of estimated useful lives to each of those asset categories followed by the amortization of the asset value of each of those categories over varying periods of times reflecting their useful lives. One of the categories of assets acquired in the Ohmstede acquisition was contract backlog. And that is one of the fastest amortized segments of the assets acquired. When we acquired Ohmstede back in September of last year, I told the market that we expected Ohmstede's net contributions to earnings for 2007 and at least the first part of 2008 to be relatively modest because of the very significant non-cash amortization charges associated with our ownership. But once some of these faster burning, if you will, asset categories were fully or nearly completely amortized, that Ohmstede's contributions to EMCOR earnings would be accelerated, not only in the latter part of 2008, but certainly in 2009, and I continue to feel that way, we were substantially correct in our expectations for Ohmstede earnings and for amortization. You can get detailed information about this from the 8-KA filing that we made in December and from a footnote to the financial information in the Form 10-K just filed. Mark?

That's correct, Frank. John when you get the opportunity to go through 10-K we filed this morning in detail, EMCOR is scheduled to have total amortization of intangibles in 2008 of just under $21 million, the piece of that that’s attributable to Ohmstede is roughly 60%.

Okay, and that must be running $9 million a quarter right now?

$9 million a quarter?

Yes, is that high?

No, well, it was high in the fourth quarter, Frank had indicated that the backlog component that needs to be amortized which is reflected as a increase in cost to sales substantially will be burn through by the third quarter of next year.

Okay.

And then the remaining in tangible assets which traditionally you would see going through SG&A expense. But we'll all continue to amortize over an extended period of time and those are disclosed in the filing.

Okay.

And John I would supplement Mark's comments by saying that the anticipated growth in the net contribution of Ohmstede and related companies, you saw for example our recently announced acquisition of California company actually, two California companies that will supplement Ohmstede's well established position in the oil and gas market along the Gulf Coast. One of the reasons why we're guardedly optimistic going into 2009 with our operational growth and improving results, is because of the enhanced contribution available from Ohmstede once that fast burning part of its amortization charges has been exhausted in mid to late 2008.

Okay. And then, second question, if I could, and I did this fairly quickly looking at the K, but it looks like margins especially in the mechanical and electrical segments, both jumped quite a bit in the fourth quarter. And could you talk about specifically, is it pricing, or is there something else happening there?

Well, I allude to Tony's earlier comments about some sectors in which we saw an erosion of competition at the bidding stage in 2007, I guess it actually in late 2006 and into 2007, arising from some of the factors that we mentioned earlier that is to say, the increasing complexity, the sophistication of some large projects in which frankly EMCOR was considered by the owners to be the only company capable of delivering a project at the quality levels, on the timeliness and with the value required. And a very good example of that would be some of the very large healthcare projects in which we're currently involved, in sophisticated, complicated, difficult project that are on a strict time schedule, same comment with respect to the casinos. The utmost in quality required at all times, timeliness is key and the customers in those cases are willing and able to pay a premium for the kind of quality delivery on a timely basis that EMCOR is renowned for.

And is there anything as you look into 2008 that would cause those margins to fluctuate substantially quarter-to-quarter, or should these stay at these levels, I know you tend to have better margins in the latter half of the year?

Yeah, if you look at our operating income percentages for the year as a whole in 2007, it was 3.4%. This is very good relative to EMCOR's performance in the past, but it's significantly less than the 4.9% in the fourth quarter, and that is typical of EMCOR's seasonal fluctuation in operating margins. There is no question that we take substantial momentum into the New Year from the performance in the fourth quarter, that are just typical of our project accounting criteria and the nature of the beast in this business, that we will see a seasonal fluctuation in operating income percentages that will be more like for the entire year, the 2007 full year percentage that we reported rather than the very high fourth quarter number.

Okay, great. Thank you.

Thanks. John.

(Operator Instructions) Your next question is from the line of Rich Wesolowski with Sidoti.

Hi, Rich. Rich Wesolowski - Sidoti & Company: Hi. Can you discuss the plans for the UK division a little further, specifically why you would sell the division after disbanding UK Rail which I gather has been the main culprit in losses so far in '07 or sustained in '07?

Well, it's a good question Rich, and certainly I'm not going to presuppose any particular reaction from the EMCOR Board. But I think it's important to them that management express, first of all our disappointment with the UK results which as I mentioned is particularly disappointing in light of what we thought was good progress, three years of annual profits from the UK not huge profits by any means, but an indication of improving management and perhaps improving management, and perhaps improving markets and then this. And our UK operation has not been a solid performer for us over time. It has not a delivered a substantial value for us, and the Board asks management fairly so to make difficult calls and estimates with respect to all assets at any given time. I don't know what the Board is going to decide, it is possible that they want us to continue to manage the UK with appropriate cost reduction associated with the simplification of its operations that is the disbanding of the Rail Division in order to maximize profits for a while longer and see if it can be brought into full EMCOR performance in a non-dilutive kind of way. But they may also decide that given this investment enough time that it is unlikely to perform for us in the near future, and that we should seek avenues for obtaining value for it. So I can't speak for the Board but we're going to give them a fair evaluation of what we see as the various strategic alternatives associated with the UK and will see what they say. Rich Wesolowski - Sidoti & Company: And secondly, how much revenue would you just ballpark estimate came from UK Rail?

In 2007? Rich Wesolowski - Sidoti & Company: [Does that mean half quarter]

$140 million for the year. Rich Wesolowski - Sidoti & Company: Great, thanks.

Okay. You are welcome, Rich.

There are no further questions at this time. I would like to turn the call back to management for closing remarks.

Okay, thank you, Christine. Thank you all for your interest in and support of EMCOR Group. Watch this space for interesting future developments. Thanks again.

This concludes today's conference. You may now disconnect.