Company: EME
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000105634-25-000078
Chunk: 45

Company: EMCOR Group, Inc.
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 1
Chunk 45
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 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.  Although there were no outstanding borrowings under our 2023 Credit Agreement as of September 30, 2025 and December 31, 2024, the carrying value of any debt associated with this agreement would approximate its fair value due to the variable rate on such debt.

NOTE 9 - Income Taxes 

The following table presents our income tax provision and our income tax rate for the three and nine months ended September 30, 2025 and 2024 (in thousands, except percentages):  For the three months endedSeptember 30,For the nine months endedSeptember 30, 2025202420252024Income tax provision$112,217 $101,814 $305,604 $263,944 Income tax rate27.5 %27.4 %26.7 %27.0 %The difference between the U.S. statutory tax rate of 21% and our effective income tax rate for both the three and nine months ended September 30, 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 and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, was primarily due to greater income before income taxes. The 30 basis point decrease in our effective income