Company: EME
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000105634-25-000029
Chunk: 40

Company: EMCOR Group, Inc.
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 our intangible assets related to contract backlog and customer relationships is determined using the multi-period excess earnings method. Key assumptions in the valuation of customer relationship intangible assets are revenue growth, operating margin, customer attrition rate, and discount rate. Backlog intangible assets are based on future revenue from contracts already awarded at the time of acquisition. Key assumptions in the valuation of backlog intangible assets include operating margin and discount rate. Other assumptions utilized in these valuation techniques include tax rate and contributory asset charges.In addition, goodwill, intangible assets, and certain other long-lived assets are tested for impairment using similar valuation methodologies to determine the fair value of such assets. Periodically, we engage an independent third-party valuation specialist to assist with the valuation process, including the selection of appropriate methodologies and the development of market-based assumptions. The inputs used for these nonrecurring fair value measurements represent Level 3 inputs.Fair Value of Financial InstrumentsWe believe that the carrying values of our financial instruments, which include accounts receivable and other financing commitments, approximate their fair values due primarily to their short-term maturities and low risk of counterparty default.  The carrying value of the debt associated with our 2023 Credit Agreement approximates its fair value due to the variable rate on such debt.

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Table of ContentsEMCOR Group, Inc. and SubsidiariesNotes to Consolidated Financial Statements (Unaudited)

NOTE 9 - Income Taxes

The following table presents our income tax provision and our income tax rate for the three months ended March 31, 2025 and 2024 (in thousands, except percentages):  For the three months endedMarch 31, 20252024Income tax provision$83,520 $70,567 Income tax rate25.8 %26.4 %The difference between the U.S. statutory tax rate of 21% and our effective income tax rate for both the three months ended March 31, 2025 and 2024 was primarily a result of state and local income taxes and other permanent book-to-tax differences. The increase in our income tax provision for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024, was predominantly due to greater income before income taxes. The decrease in our effective income tax rate for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was attributable to the impact of favorable