Good morning. My name is Sylvia and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group Fourth Quarter and Full Year 2016 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will a question-and-answer session. [Operator Instructions] Thank you. Mr. Bradley [ph] with FTI Consulting, you may begin.

Thank you, Sylvia, and good morning, everyone. Welcome to the EMCOR Group conference call. We are here today to discuss the Company’s 2016 fourth quarter and full year results, which were reported this morning. I would like to turn the call over to Kevin Matz, Executive Vice President of Shared Services, who will introduce the management. Kevin, please go ahead.

Thank you, Brad, and good morning, everyone. Welcome to EMCOR Group’s earnings conference call for the fourth quarter of 2016. For those of you who are accessing the call via the Internet on our website, also welcome and we hope you have arrived at the beginning of our slide presentation that will accompany our remarks today. We are on slide 2. Slide 2 depicts the executives who are with me to discuss the quarter and nine month results. They are Tony Guzzi, our President and Chief Executive Officer; Mark Pompa, Executive Vice President and Chief Financial Officer; Maxine Mauricio, our Senior Vice President and General Counsel; and our Vice President of Marketing & Communications, Mava Heffler. For call participants 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, and I guess, in two weeks we’ll have a change 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 2016 Form 10-K and in other reports filed from time to time with the Securities and Exchange Commission. With that said, please let me turn the call over to Tony. Tony?

Yeah. Thanks Kevin. Good morning and thanks for joining us this morning. I’ll be speaking to pages three through five. I’m going to speak about 2016 and I’m going to leave it to Mark to cover the quarter and year in detail. My comments - we use pro forma results that add back the Ardent-Rabalais transaction cost and the small impairment loss reported this fourth quarter. Taking a step back , we had a record setting 2016 at EMCOR. And I now would share some of the highlights overall for the year and then I’ll provide some highlights by reportable segment. We had record setting revenues of 7.55 billion and earned $3.09 per diluted share from continuing operations. Cash flow from operations were strong at $265 million. Our revenue growth was exceptional in 2016, driven primarily by strong organic growth in our Electrical, Mechanical and Industrial Services segments. Overall, we grew revenues by 12.4%, with almost 70% of that being organic growth. Our Electrical and Mechanical segments grew revenues 18.6% overall and had over 13.1% organic growth. Our Industrial Services segment had 15.8% revenue growth, all of which was organic. Building Services had 3% revenue growth, most of which were very good tuck in acquisitions in Mechanical Services and the UK had negative growth, driven primarily by FX post Brexit. We had decent pro forma operating income margins at almost 4.2%. Overall, we had a lot more go right at EMCORe in 2016 than go wrong. We did well this past year, but we should have done better. As many of you know, we don’t spend a lot of time making excuses. And when bad things happen, we fight hard for our rightful entitlements, when we issues because as a specialty contractor we have already spent the cash. And we…

Thank you, Tony, and my good morning to everyone participating on the call today. For those accessing this presentation via the webcast, we’re now on Slide 6. As Tony indicated in his opening commentary I will begin with a detailed discussion of our fourth quarter 2016 results before moving to our full year 2016 performance, some of which Tony just outlined during his executive summary and is included in our consolidated financial statements within both our earnings release announcement and Form 10-K filed with the Securities and Exchange Commission earlier this morning. So let’s review our fourth quarter performance. Consolidated revenues of $1.95 billion in quarter four are up $172.1 million or 9.7%. All reportable segments are reporting increased revenues quarter-over-quarter other than our UK Building Services segment. Incremental revenues attributable to businesses acquired of 71.1 million pertaining to the trade of time that such businesses were not owned by EMCOR on last year’s fourth quarter, positively impacted our U.S. Electrical Construction, U.S. Building Services and our U.S. Mechanical Construction segments. Excluding such acquisition revenues, our organic revenue growth in the quarter is 5.7%. U.S. Electrical Construction revenues of 476.9 million increased a 119.3 million or 33.4% from quarter four 2015. Excluding acquisition revenues of $54.5 million the segments revenues grew 64.9 million or 18.1% organically. Quarterly revenue growth was primarily driven by project activity within the transportation commercial market sectors, inclusive of certain large scale telecommunication projects, partially offset by quarter-over-quarter revenue declines within the healthcare and water market sectors. U.S. Mechanical Construction fourth quarter revenues of 722.3 million increased 62 million or 9.4%. Excluding acquisition revenues this segment grew organically 9%. Consistent with this segment’s revenue activities during late 2015 and throughout 2016, revenue growth continues to be broad based from a market sector perspective. Specifically during the…

Thanks Mark. You deserve some water. I’m on page 15, which is backlog by market sector. Our strong year is also reflected in our backlog. Total backlog at the end of the fourth quarter is 3.9 billion, up 132 million or 3.5% from December 2015 and flat with backlog at the end of third quarter. Book-to-bill for the quarter was 1 and for the year it was 1.02. Similar to the third quarter project books remained strong in fourth quarter demonstrating strong ongoing construction at mechanical service demand consistent with our generating record revenue levels. When you focus on the market sectors, we have seen strong demand from the commercial sector all year as commercial backlog increased close to 10%, to little over 1.3 billion is pretty much on par of the highest level ever. Healthcare backlog was 10% of total backlog increased every quarter this year and in the fourth quarter we won multiple pharma projects in the New York area as well as large healthcare projects in Cincinnati. We remain long term positive on the healthcare market, mainly driven by changing demographics, ageing facilities, advancing technologies and underlying all that is hit the requirements in privacy. However there is going to continue to be some dislocation in this market as congress administration figure out what changes to the affordable care need to be made or whatever is going to happen with in place. Our institutional workers down a bit with backlog off about 14%. However this is in line with the general trend in the public non-residential market. And as it began, this could for little bit under the new administration. With regard to total private non-residential market generally speaking we believe the market still resonate after pretty good 2016. We remain where were a quarter ago being…

[Operator Instructions] Your first question comes from the line of Tahira Afzal from KeyBanc.

Thank you very much. Hey Tony how are you doing?

I’m doing fine how are you?

I’m doing fine. If I look at this year you have tough comps but at the same time it is based on potentially everything that is being proposed by the new administration. It seems that could be a longer leg, to even private commercial cycles and you have probably anticipating last quarter.

I would agree with that, I think private investment is starting to feel more confident and as anecdote I gave on oil and gas, some of the hi-tech spending we are about to see. Some of the auto investment we are about to see. I think all go well for us. So the question is timing T, these things need to be designed, they need to be bid but clearly they are in markets that perform very well and we think at a minimum it elongates the normal cycle and it could give a boost going into the end of 2017 and 18, I do agree with that.

Got it, I mean 2018 it sounds like, organic growth could be the same potentially when higher, if all of the space through right.

Yeah, it could. If you were the same as it was 16 I think would be satisfied, I think what we are seeing right now we have good backlog growth in our electrical mechanical segments. So we are seeing continued pace of recovery and I don’t think anywhere backed in those numbers yet is positive momentum from all the things we talk about which we foreseen post-election. So we may have a little bit of a wall here and 17 between these two periods but business investment and large complex projects continue to gain legs and things need very highly skilled manpower in the short period of time. They are clearly our sweet spot and we will be there to take advantage of it. One of the reasons we can take advantage of it is not only in the organic investments we made over the last five - eight years but also the acquisition investments have put us in markets today. Five years ago we could be in, whether that be industrial market in South East, oil and gas market upstream and midstream or even more significant investments over the last 10 years we have made downstream. So we feel good about all that and we have to navigate that. We got to pick the right projects and we got to execute fairly almost times.

Got it Tony, I guess second question, how should we be thinking about inflation and labor bottleneck point of business as you had a very strong year. We have seen inflation in that and labor pricing remain fairly decent over the last four years. Does that might change?

Yeah, way the pricing has stabilized and we relate and I don’t see anything in the near term say, 12 to 18 months that we say we have changed much. But if we have seen another surgeon activity overall in the market and if it starts going towards higher mark, you may see some labor inflation. Now realize our folks are pretty well trained now. And they get that and in some way they rather have the work. In reality whether be union or non-union environment, the trade people that we have dealt with over the last five years have been fairly pragmatic about what they are looking for. We have a couple of places not so much, you could probably guess that. Some of the union markets but when you get outside of there, people are pretty pragmatic, they want to work and wages are good right now; demand is good now; they want to work or want the one of the better people to work for. Even when we get in disputes like we got in some of these yards that folks no they are going to get paid. The disputes our problem, not their problem and we are going to be able to get the job done safely and we are going to be able to technically get the job done correctly and really that’s what trades people care about.

Got it. Okay and thank you very much. I’ll hop back in the queue.

Thanks to you.

Your next question comes from Brent Thielman from D.A. Davidson.

Thanks for taking my question. On Industrial Services, kind of look at last couple of quarter. Is it sort of level of probability you would expect for the sharp business going forward and mid-single digit, Guzzi can you tell what going on in that business?

Yeah, I think we had very successful execution on some specialty work. We have mid-single digits of our rate, for us to get back up into the higher single digits, below double digits mark we need to see the shops return.

Okay and then also on that business, do you see other projects like the one you did earlier this year, the sort of field services projects that could potentially play out in 17?

You never know Brent, well these things happen, we know something is going on right now, they could potentially take us there I guess guys if we looked over the last five years, we had three of those events. So better than average we will see something maybe not that big. One thing we have seen is our folks have gotten better and better at large turn around. We become in some ways the go to contractor for that and the other things we have seen is we really got more significantly into the petrochemical business since the acquisition RepconStrickland. So we not might make it up with the specific project or two. But building that footprint out, being more facilities, being known to someone can commercial very skilled people and very short period of time, allows you to be the person when those opportunities come around to be the person that they turn to and that’s all we can hope for and then we got to win the work and go and execute.

Okay, that’s great. And then Tony I am curious kind of how you thinking about the UK business in the contacts to your outlook for 17 and seems like fair amount of uncertainty right now in that area.

What we do in the UK and I’ll ask Mark to help me with this because he has spends a lot of time thinking about the UK driver structuring. We shouldn’t see a lot of variation is because one is the overall impact in our numbers is not that big. It is less than 3% or 4% anyone of our numbers revenue we are operating profit. We also have some very significant long term customers that were in more critical facilities and some of them are government, quasi government or large industrial type customers. So the uncertainties there but I think you know our folks are focused on what they can control and I don’t expect big bumps from that Mark.

When you look at the composition of the business. The core maintenance contracts that we are executing under are all very good contractor where you are able to get little improvement and margin is on the project side and clearly we say everybody hit the pause button post Brexit with regards to any kind of significant small project or even small capital spending. I suspect that will free up at some point, it is a sequential of what is going to be the indicator that our customer are going to need to be able to distort excuse underneath, what their plants are. Ultimately before you run into break or fix. You are not break or fix I don’t think we are out at that point but I think we have another year like we saw this year. They are going to be there pretty soon.

And we really saw that in our mechanical service.

Okay and last one if I could just the project in Mechanical this quarter anything unusual about the project or the work performed I guess in context that you tend to do in that business?

Yeah, something very unusual. Our customer decided not to pay us when they over ran their budget and we will be looking for entitlement on it, that’s so unusual about it.

Okay, thanks for the color guys.

Your next question comes from Noelle Dilts from Stifel.

Hey Noelle, how are you?

Hi, doing wells, thanks good morning. First question I just want to expand a bit on first question on Industrial Services, if you look at some of the I guess industry sources out there, they are indicating pick up in general turn around activity in the spring season. My question is do you think there has or - are you seeing fundamental change how refiners are acting and second can you talk about what the split is how that business at that point between refinery and petrochem and how you are thinking about the outlook for each of those sort of customers possibly into next year.

Let’s go split overall right now, it still probably 85% film, 15% shop. They used to be 70-30, so let’s go there. Dallas go to 85% which is where the most petrochem business is probably 70% refining, 30% petrochemical, that mix, so the revenue is bigger, that mix years ago would have been 90-10. So we have added some nice mix there. One of the larger turn around we did I the fall was actually in petrochemical plant. I think see the very similar rate, a lot of things are set up favorably for both of them. We also believe that the spring turn around season is good; the fall will warm up. Well we have benefited and this makes the comparison so hard is we jump in there and we will do either capital work kind of material, some capital works, small capital work fixed price in that. The segment is very, very little in that. But when you do those larger projects outside of the turnaround activity, it can skew you results, you just only have to look at this like a two year window and if you look at it over three year, we barely gain share because the market has been growing, very low single of digits and we have been way above that, two to four times that in a given quarter. While the things trends we have seen and if we could be selection of services we offer for the capability of our field folks or project managers or superintendents and our CEOs run this companies. We have seen a trend towards larger turn around for us. That could just be more confidence in us to be able to execute the work. So believe maintenance spending will be strong if lumpy. It could be just reflection of our customers either succeed or don’t succeed but we don’t see a real negative market over the next 18 months and with our continued to fill in the chemical we continue to build stability in the market but for us to perform at very high levels, like we did last year, we needed that icing on the cake of the project work.

And then for my second question I just wanted to shift to two construction side, here I know I guess - one thing I wanted to touch on is a when you look at some of the general and again the industry forecast, I think if we look up to ‘17, dodge et cetera are looking for a bit of a shift towards institutional spending. It doesn’t sound like you are necessarily expecting that. Some like you are kind of reflecting more of the commercial side to remain strong. So first said, I’m curious if you have any thoughts on that and then second I am always interested on spot on particular geographies and appears to steady for states either showing some improvement.

So the first question is, we are seeing some institutional opportunities over there and will balance us against the private opportunities. Some of the best work we have ever been done has been institutional. Some of the best work we have ever done were private, some of the orders we have ever done is institution some of how we have ever done is been private. So we look at them opportunity by opportunity. I don’t disagree that institutional should come back but I think it is going to be lot less than people think, just sitting here today because people try as government is basically the people that actually left the contracts are sort of frozen in place right now for the next months as they figure out who is in charge, actually signed the authorization. Shifting gears, will give you little color on geographies and north east is pretty good job [ph] especially in Boston I do expect New York to slow down some, not so much on the infrastructure side but on the commercial and high rise residential. We continue to see strong demand for our industrial services through the South East. We think South border is going to be strong for us for the next three years at least as we have very good position on waterways project and with the consent degree in Miami we think that creates opportunity for us and there is only couple of contractors that can really do the work well and we also get our share. Our tax is more remarkably resilient in the sense that previously if oil prices would adjusted the way we would fell off the face of the earth. The part of Texas continue to be strong and with our acquisition of fire protection company, we actually…

Very helpful, thanks.

Your next question comes from the line of Adam Thalhimer from Thompson Davis.

Hi Adam, welcome back.

Hey, good morning. Congrats on a good ‘16, thanks. Lots of questions on Industrial Services, I just wanted to ask one more. As it relates to your guidance, I guess you’re assuming probably a double digit revenue decline there this year?

Well what we’re saying at the low end of our guidance is we don’t successfully refill that project in any substantial way and that’s really what we’re saying.

Okay. Well, I was going to switch gears to the three jobs where you had a loss this year. Are you assuming any recovery in the guidance?

We never assume any recovery in our guidance. We don’t know when it will happen, how it will happen, what the cost will be. Yeah, we have an idea of that part, but we don’t assume any recovery because one of the benefits of being us, if we can hang in there. And we don’t have to accept substandard settlements and we won’t. So that’s one of the big reasons we don’t even try to project when this will happen. Our general counsel and our CFO could be hard headed as is our segment people to making sure that we get to something that resembles a rightful entitlement.

Okay and then you referenced the telecom project a couple of times in the prepared remarks, not something you normally talk about, just hoping you could provide some color.

We’re seeing great demand right now for data center in multiple geographies and we’re well positioned to continue to do that.

Okay, I just wanted to take one more step at the top line because I think - I guess I’m confused regarding to basically flat risk when -

Let me take that out for you Adam. I’ll save your imaginations. We do expect some weakness industrially, I don’t know if it is severe as what you’re saying, but that’s an issue for us because we did so well last year and so well over the last three years. You can’t keep growing the level we were put up large project in there it can have an outsized impact on your revenue. The second thing is go back to our backlog discussion. We talk about $100 million coming out of our building services backlog year-over-year and that is really driven by a couple large site based contracts where one of them we had for 15 plus years and it’s more than half of hat backlog decline. And what happened there was outstanding performance by us, I think the cluster more [ph] acknowledged that we had outstanding performance. The shape and size of their portfolio is going to change, generationally they had a change in leadership. They decided to in source a bunch of things that were out sourced. They’ve decided to our task in certain generally facility managed. We did that contract to make money and we had seen declining margins a lot which is not uncommon in something that you’ve had that long, it’s quite large. So we are probably on our way out of there in a year or a year and a half based on just margins alone from us. The HR ended it, we’ll leave friends and we’ll probably do some great mechanical service work for them over the next three years. That could be - two other ones like that that have gone from very profitable to rebid not profitable takes 100 million out and they’re winning other things but the ramp up on those once you win something can take a year and a half to get to full ramp, much like it did with this one 13 years ago when we finally won the whole thing. So that’s part of it, that’s not the most profitable part and hence why we have an upper range. And then we have industrial services, we do expect growth in mechanical services and we expect growth in our electrical and mechanical segments construction. Yeah, healthy growth.

Okay, that’s good color. Thanks Tony.

Your next question comes from John D'Angelo from Macquarie

Good morning John and welcome to the call.

Good morning, thanks for taking my questions. So, most of my questions have already been answered, so just two short questions from me. Which states performed best for the Electrical and Mechanical segments in ‘16 and then which states do you see performing better in ‘17 than 2016? Thank you.

Did you say states?

Yes.

We don’t really think about that way. I guess I could give you regions to ones that performed very well electrically. Really other than our large Northeast infrastructure project, we performed well everywhere electrically last year. So, one project, take that out, it was broad based strong performance mechanically. I’d offer the same thing, we had one project out west that we discussed here in the fourth quarter that will seek our right for retirement for. We had an institutional project that really wasn’t - it all came to add at the end, but it really wasn’t in 2015, but if you look at our portfolio across the country, our guys are not getting out of the park. These are two isolated incidents, so we had a maybe a little bit outside performance in a couple of places, but we didn’t have really any bad performance outside of that across the company.

Okay, thank you very much.

Your next question comes from Tate Sullivan from Sidoti.

Hey, thanks for getting me in. I haven’t heard you mention any sources of potential pent up demand if you do get everything that might happen in terms of taxes and less regulation, I mean is there any pent up demand related to ongoing energy efficiency effort in our country?

I’m not a big pent up demand kind of guy. I think we see - I think you practically go back to our transcripts, over the long period of time I’ve talked about it a lot. I think I did mention it last year in mechanical services and retrofit business. Mark used it today a little bit to talk about why some of the trends are happening in industrial services. I think in general. I think there’s something there Tate, as more money becomes available you go to - you asked something very specifically about energy savings projects. I happen to believe this would be an easy win. There were some legislation they tried to get through, it got so water down, I’m not sure if it was particularly effective and I’m not sure of past [indiscernible], we were a little bit involved in that year’s ago on the front end, we certainly did recognize what came back out of the other side. But if you have more cash, most energy savings projects are sort of 15% to 20% return projects, they are air conditioning lighting focused, that then controls, that’s how you make the money in them. And so yeah, I think people look to invest there. I think you look at the investor even beyond just the energy savings even here right. The level of comfort you can achieve with some of the technology that is available now is pretty substantial compared to what some of the old systems were. So I think that is a place to reform more cash in owners pockets looking for projects to invest in infrastructure, why not investing your own infrastructure.

Okay, thank you.

Your final question comes from Nicholas Coppola from Thompson Research.

Good morning, this is Steven on for Nick. A quick question on the energy end markets around the country, just the regions exposed to it is non res activity still depressed in those areas or is that coming back at all?

The only non res market that we participate in that’s exposed to those energy markets in a substantial way is Houston. And I guess we’re going to pick it up now with our fire protection. They never had depressed because of the other things going on. In Houston, it was depressed and yeah, it’s not come back in a substantial way. You got remember, take it aside though, a lot of these folks from [indiscernible] they put a lot of money into their facility, part of it is a natural process. We were involved in four major campus expansions for integrated oil and gas, for campus consolidations, for integrated oil and gas companies or petrochemical companies from 2011 to 2016, so even if there no downturn, they likely wouldn’t be spending at the same level they were during that time period because they already build out their infrastructure.

Right, that makes sense. And then last question, has the Brexit impact in the continuing uncertainty they’ve made acquisitions enticing for you guys in the UK?

No. Anything else?

No, that’s it. Thank you.

There are no further questions at this time. I’ll now turn the call back to management for any closing remarks.

We look forward to performing for you in 2017 and we’re off to work. We had a great 2016, could have been stronger, but that’s behind us. Look forward to talking to you in April at the end of first quarter. Thanks a lot. Bye.

Ladies and gentlemen this does conclude today’s conference. Thank you for your participation. You may now disconnect.