<SUBMISSION>
<ACCESSION-NUMBER>0000890566-00-001614
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20000930
<FILING-DATE>20001114
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>COMFORT SYSTEMS USA INC
<CIK>0001035983
<ASSIGNED-SIC>1731
<IRS-NUMBER>760484996
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
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<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-13011
<FILM-NUMBER>766822
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>777 POST OAK BOULEVARD
<STREET2>SUITE 500
<CITY>HOUSTON
<STATE>TX
<ZIP>77056
<PHONE>7138309600
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>777 POST OAK BOULEVARD
<STREET2>SUITE 500
<CITY>HOUSTON
<STATE>TX
<ZIP>77056
</MAIL-ADDRESS>
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<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<TEXT>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                            ------------------------

                                   FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
    EXCHANGE ACT OF 1934

       FOR THE TRANSITION PERIOD FROM __________________ TO __________________

                           COMMISSION FILE NUMBER: 1-13011

                              COMFORT SYSTEMS USA, INC.
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


              DELAWARE                                   76-0526487
    (STATE OR OTHER JURISDICTION                      (I.R.S. EMPLOYER
  OF INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)


                             777 POST OAK BOULEVARD
                                   SUITE 500
                              HOUSTON, TEXAS 77056
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

       Registrant's telephone number, including area code: (713) 830-9600

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   Yes [X] No  [ ]

     The number of shares outstanding of the issuer's common stock, as of
November 13, 2000, was 37,286,284.
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                               INDEX TO FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2000


                                                                            PAGE
                                                                            ----
Part I -- Financial Information
     Item 1 -- Financial Statements
          COMFORT SYSTEMS USA, INC ........................................
                Consolidated Balance Sheets ...............................    1
                Consolidated Statements of Operations .....................    2
                Consolidated Statements of Stockholders' Equity ...........    3
                Consolidated Statements of Cash Flows .....................    4
                Condensed Notes to Consolidated Financial Statements ......    5
     Item 2 -- Management's Discussion and Analysis of Financial Condition
               and Results of Operations ..................................   12
     Item 3 -- Quantitative and Qualitative Disclosures about Market Risk .   16
Part II -- Other Information
     Item 1 -- Legal Proceedings ..........................................   17
     Item 2 -- Recent Sales of Unregistered Securities ....................   17
     Item 6 -- Exhibits and Reports on Form 8-K ...........................   17
     Item 9 -- Changes and Disagreements with Accountants on Accounting and
               Financial Disclosure .......................................   17
     Signature ............................................................   18
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                          CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                         DECEMBER 31,    SEPTEMBER 30,
                                             1999            2000
                                         ------------    -------------
                                                         (UNAUDITED)
               ASSETS
CURRENT ASSETS:
     Cash and cash equivalents.......      $  3,664        $  7,700
     Accounts receivable, less
      allowance of $5,568 and
      $7,917.........................       309,031         360,517
     Other receivables...............         4,575           5,981
     Inventories.....................        20,907          19,908
     Prepaid expenses and other......        19,891          29,908
     Costs and estimated earnings in
      excess of billings.............        54,575          48,151
                                           --------        --------
               Total current assets..       412,643         472,165
PROPERTY AND EQUIPMENT, net..........        41,964          46,260
GOODWILL, less accumulated
  amortization of $20,665 and
  $30,131............................       474,529         458,064
OTHER NONCURRENT ASSETS..............        14,136           4,842
                                           --------        --------
               Total assets..........      $943,272        $981,331
                                           ========        ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Current maturities of long-term
      debt...........................      $  3,353        $    221
     Current maturities of notes to
      affiliates and former owners...        24,536          15,499
     Accounts payable................        96,032         119,814
     Accrued compensation and
      benefits.......................        36,187          41,602
     Billings in excess of costs and
      estimated earnings.............        52,170          67,768
     Other current liabilities.......        27,799          29,137
                                           --------        --------
               Total current
                liabilities..........       240,077         274,041
DEFERRED INCOME TAXES................         4,547           6,746
LONG-TERM DEBT, NET OF CURRENT
  MATURITIES.........................       225,471         248,069
NOTES TO AFFILIATES AND FORMER
  OWNERS, NET OF CURRENT
  MATURITIES.........................        52,473          35,187
OTHER LONG-TERM LIABILITIES..........         1,739             586
                                           --------        --------
               Total liabilities.....       524,307         564,629
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
     Preferred stock, $.01 par,
      5,000,000 shares authorized,
      none issued and outstanding....        --              --
     Common stock, $.01 par,
      102,969,912 shares authorized,
      39,258,913 shares issued.......           393             393
     Treasury stock, at cost,
      1,695,524 and 1,927,821 shares,
      respectively...................       (11,978)        (12,923)
     Additional paid-in capital......       342,655         341,923
     Retained earnings...............        87,895          87,309
                                           --------        --------
               Total stockholders'
                equity...............       418,965         416,702
                                           --------        --------
               Total liabilities and
                stockholders' equity       $943,272        $981,331
                                           ========        ========


   The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      1
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED               NINE MONTHS ENDED
                                              SEPTEMBER 30,                   SEPTEMBER 30,
                                         -----------------------       ---------------------------
                                           1999           2000            1999             2000
                                         --------       --------       ----------       ----------
<S>                                      <C>            <C>            <C>              <C>
REVENUES.............................    $374,815       $423,922       $1,008,234       $1,191,458
COST OF SERVICES.....................     298,480        352,838          792,482          978,869
                                         --------       --------       ----------       ----------
          Gross profit...............      76,335         71,084          215,752          212,589
SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES...........................      45,793         58,021          133,984          169,182
GOODWILL AMORTIZATION................       2,983          3,151            8,650            9,483
RESTRUCTURING CHARGES................       --             9,959           --               10,313
                                         --------       --------       ----------       ----------
          Operating income (loss)....      27,559            (47)          73,118           23,611
OTHER INCOME (EXPENSE):
     Interest income.................         209            105              598              483
     Interest expense................      (5,265)        (7,122)         (14,078)         (19,900)
     Other...........................          89            588              192              678
                                         --------       --------       ----------       ----------
          Other income (expense).....      (4,967)        (6,429)         (13,288)         (18,739)
                                         --------       --------       ----------       ----------
REDUCTIONS IN NON-OPERATING ASSETS
  AND LIABILITIES, NET...............       --             --              --               (5,190)
                                         --------       --------       ----------       ----------
INCOME (LOSS) BEFORE INCOME TAXES....      22,592         (6,476)          59,830             (318)
INCOME TAX EXPENSE (BENEFIT).........       9,724         (2,787)          25,753              268
                                         --------       --------       ----------       ----------
NET INCOME (LOSS)....................    $ 12,868       $ (3,689)      $   34,077       $     (586)
                                         ========       ========       ==========       ==========
NET INCOME (LOSS) PER SHARE:
     Basic...........................    $   0.33       $  (0.10)      $     0.88       $    (0.02)
                                         ========       ========       ==========       ==========
     Diluted.........................    $   0.33       $  (0.10)      $     0.86       $    (0.02)
                                         ========       ========       ==========       ==========
SHARES USED IN COMPUTING NET INCOME
  (LOSS) PER SHARE:
     Basic...........................      39,060         37,265           38,705           37,429
                                         ========       ========       ==========       ==========
     Diluted.........................      39,531         37,265           40,335           37,429
                                         ========       ========       ==========       ==========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       2
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                            COMMON STOCK          TREASURY STOCK       ADDITIONAL                   TOTAL
                                         -------------------   ---------------------    PAID-IN     RETAINED    STOCKHOLDERS'
                                           SHARES     AMOUNT     SHARES      AMOUNT     CAPITAL     EARNINGS        EQUITY
                                         ----------   ------   ----------   --------   ----------   ---------   --------------
<S>                                      <C>          <C>      <C>          <C>        <C>          <C>         <C>
BALANCE AT DECEMBER 31, 1998.........    38,141,180    $381        --       $  --       $333,978     $45,573       $379,932
  Issuance of Common Stock:
    Acquisition of purchased
      companies......................       958,533      10       125,197        885       6,164       --             7,059
    Issuance of Employee Stock
      Purchase Plan shares...........       142,276       2        --          --          2,036       --             2,038
    Issuance of shares for options
      exercised......................        16,924    --          --          --            477       --               477
  Common Stock repurchases...........        --        --      (1,820,721)   (12,863)     --           --           (12,863)
  Net income.........................        --        --          --          --         --          42,322         42,322
                                         ----------    ----    ----------   --------    --------     -------       --------
BALANCE AT DECEMBER 31, 1999.........    39,258,913     393    (1,695,524)   (11,978)    342,655      87,895        418,965
  Issuance of Common Stock:
    Issuance of Employee Stock
      Purchase Plan shares
      (unaudited)....................        --        --         329,212      2,254        (732)      --             1,522
  Common Stock repurchases
    (unaudited)......................        --        --        (175,513)    (1,224)     --           --            (1,224)
  Shares exchanged in repayment of
    notes receivable (unaudited).....        --        --        (385,996)    (1,975)     --           --            (1,975)
  Net loss (unaudited)...............        --        --          --          --         --            (586)          (586)
                                         ----------    ----    ----------   --------    --------     -------       --------
BALANCE AT SEPTEMBER 30, 2000
  (unaudited)........................    39,258,913    $393    (1,927,821)  $(12,923)   $341,923     $87,309       $416,702
                                         ==========    ====    ==========   ========    ========     =======       ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

                                            NINE MONTHS ENDED
                                              SEPTEMBER 30,
                                         ------------------------
                                           1999           2000
                                         ---------      ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)....................    $  34,077      $    (586)
Adjustments to reconcile net income
  (loss) to net cash provided by
  operating activities --
     Restructuring charges...........       --             10,313
     Reductions in non-operating
      assets and liabilities, net....       --              5,190
     Depreciation and amortization
      expense........................       16,955         18,413
     Bad debt expense................          656          3,864
     Deferred tax expense
      (benefit)......................         (639)           101
     Gain on sale of property and
      equipment......................         (280)          (636)
     Changes in operating assets and
      liabilities, net of effects of
      acquisitions of purchased
      companies --
          (Increase) decrease in --
               Receivables, net......      (46,153)       (54,815)
               Inventories...........       (3,032)           867
               Prepaid expenses and
                   other current
                   assets............          (41)         1,919
               Costs and estimated
                   earnings in excess
                   of billings.......      (17,294)         6,615
               Other noncurrent
                   assets............        1,076          1,533
          Increase (decrease) in --
               Accounts payable and
                   accrued
                   liabilities.......       16,875         16,272
               Billings in excess of
                   costs and
                   estimated
                   earnings..........        1,074         15,446
               Other, net............       (1,001)        (1,192)
                                         ---------      ---------
          Net cash provided by
             operating activities....        2,273         23,304
                                         ---------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and
      equipment......................      (11,360)       (14,687)
     Proceeds from sales of property
      and equipment..................        1,020          1,477
     Cash paid for purchased
      companies, net of cash
      acquired.......................      (27,448)        --
     Other...........................         (500)        --
                                         ---------      ---------
          Net cash used in investing
             activities..............      (38,288)       (13,210)
                                         ---------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments on long-term debt......     (154,486)      (235,772)
     Borrowings of long-term debt....      188,860        229,416
     Proceeds from issuance of common
      stock..........................        2,258          1,522
     Repurchases of common stock.....       --             (1,224)
                                         ---------      ---------
          Net cash provided by (used
             in) financing
             activities..............       36,632         (6,058)
                                         ---------      ---------
NET INCREASE IN CASH AND CASH
  EQUIVALENTS........................          617          4,036
CASH AND CASH EQUIVALENTS, beginning
  of period..........................        6,985          3,664
                                         ---------      ---------
CASH AND CASH EQUIVALENTS, end of
  period.............................    $   7,602      $   7,700
                                         =========      =========

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       4
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000
                                  (UNAUDITED)

1.  BUSINESS AND ORGANIZATION:

     Comfort Systems USA, Inc., a Delaware corporation ("Comfort Systems" and
collectively with its subsidiaries, the "Company"), is a leading national
provider of comprehensive heating, ventilation and air conditioning ("HVAC")
installation, maintenance, repair and replacement services. The Company operates
primarily in the commercial and industrial HVAC markets, and performs most of
its services within manufacturing plants, office buildings, retail centers,
apartment complexes, and healthcare, education and government facilities. In
addition to standard HVAC services, the Company provides specialized
applications such as process cooling, control systems, electronic monitoring and
process piping. Certain locations also perform related services such as
electrical and plumbing.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION

     These interim statements should be read in conjunction with the historical
Consolidated Financial Statements and related notes of Comfort Systems included
in the Annual Report on Form 10-K as filed with the Securities and Exchange
Commission for the year ended December 31, 1999 (the "Form 10-K").

     There were no significant changes in the accounting policies of the Company
during the periods presented. For a description of the significant accounting
policies of the Company, refer to Note 2 of Notes to Consolidated Financial
Statements of Comfort Systems included in the Form 10-K.

     The accompanying unaudited consolidated financial statements were prepared
using generally accepted accounting principles for interim financial information
and the instructions to Form 10-Q and applicable rules of Regulation S-X.
Accordingly, these financial statements do not include all information or
footnotes required by generally accepted accounting principles for complete
financial statements and should be read in conjunction with the Form 10-K. The
Company believes all adjustments necessary for a fair presentation of these
interim statements have been included and are of a normal and recurring nature.
The results of operations for interim periods are not necessarily indicative of
the results for the fiscal year.

     The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions by
management in determining the reported amounts of revenues, expenses, assets,
liabilities and contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.

CASH FLOW INFORMATION

     Cash paid for interest for the nine months ended September 30, 1999 and
2000 was approximately $12.0 million and $18.8 million, respectively. Cash paid
for income taxes for the nine months ended September 30, 1999 and 2000 was
approximately $23.0 million and $12.1 million, respectively.

ACCOUNTING PRONOUNCEMENT

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (SFAS No. 133). This

                                       5
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       SEPTEMBER 30, 2000 -- (CONTINUED)

standard requires entities to recognize all derivative instruments (including
certain derivative instruments embedded in other contracts) as assets or
liabilities in its balance sheet and measure them at fair value. The statement
requires that changes in the derivatives fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. SFAS No. 133, as
amended, is effective for the Company beginning January 1, 2001. The Company is
currently evaluating SFAS No. 133 and the impact on existing accounting policies
and financial reporting disclosures. The Company does not expect the adoption of
SFAS No. 133 to have a significant impact on the Company's results of operations
or financial position.

RECLASSIFICATIONS

     Certain reclassifications have been made in prior period financial
statements to conform to current period presentation.

3.  RESTRUCTURING CHARGES:

     During the three and nine months ended September 30, 2000, the Company
recorded restructuring charges of approximately $10.0 million and
$10.3 million, respectively, associated primarily with restructuring efforts at
certain underperforming operations. As announced by the Company in the second
quarter of 2000, management has been performing an extensive review of its
operations. As part of this ongoing review, management decided to cease
operating at two operating locations, sell two smaller satellite operations, and
merge one small company into a larger operation. These actions are expected to
be substantially complete by the end of 2000. The restructuring charges
associated with these actions are primarily non-cash and include goodwill
impairments of approximately $7.1 million and the writedown of other long-lived
assets of approximately $0.9 million. The remaining restructuring items
primarily include severance and lease termination costs. Severance costs relate
to the departure of the Company's former chief executive officer and to the
termination of approximately 20 employees including certain corporate personnel
and the management of certain underperforming locations. The following table
shows the portions of the restructuring charges that are expected to result in
cash disbursements, and how much of those amounts had been paid by
September 30, 2000 (in thousands):

<TABLE>
<CAPTION>
                                          TOTAL                     BALANCE AT
                                         ACCRUAL    PAYMENTS    SEPTEMBER 30, 2000
                                         -------    --------    ------------------
<S>                                      <C>        <C>         <C>
Severance............................    $1,303      $(487)           $  816
Lease termination costs and other....     1,040        (82)              958
                                         ------      -----            ------
     Total...........................    $2,343      $(569)           $1,774
                                         ======      =====            ======
</TABLE>

     Aggregated financial information related to the operations addressed by
restructuring is as follows (in thousands):


                                           NINE MONTHS ENDED
                                             SEPTEMBER 30,
                                         ---------------------
                                          1999          2000
                                         -------       -------
Revenues.............................    $14,653       $18,381
Operating loss.......................    $   (96)      $(6,304)


     The Company is continuing its extensive review of its operations and
activities which are not strategic. This review includes further core
commercial/industrial HVAC operations as well as the Company's expanded
e-commerce activities, and will likely result in decisions to cease operating at
or sell additional operations. Management expects this effort to be
substantially complete by year-end.

                                       6
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       SEPTEMBER 30, 2000 -- (CONTINUED)

4.  REDUCTIONS IN NON-OPERATING ASSETS AND LIABILITIES, NET:

     During the quarter ended June 30, 2000, the Company recorded a non-cash
charge of approximately $5.2 million primarily related to the impairment of
certain non-operating assets. These assets primarily related to notes receivable
from former business owners. In addition, the Company recorded an impairment of
approximately $0.8 million to its minority investment in two entities associated
with the distribution and implementation of high-end engineering and design
software. The Company also recorded a gain of approximately $0.6 million on the
reduction of its subordinated note payable to a former owner in connection with
the settlement of claims with this former owner.

5.  BUSINESS COMBINATIONS:

     During 1999, the Company acquired 25 businesses which were accounted for as
purchases. These companies provide HVAC and related services. The aggregate
consideration paid in these transactions was $38.0 million in cash, 1,151,907
shares of the Company's common stock ("Common Stock") with a fair value at the
dates of acquisition totaling $8.5 million, $2.2 million in the form of
convertible subordinated notes and $21.3 million in the form of subordinated
notes. In addition, the Company received 68,177 shares from a former owner
related to a prior year acquisition. Subsequent to the issuance of certain of
the convertible subordinated notes, the Company entered into agreements with
certain of the convertible noteholders to modify the terms of $2.1 million of
these notes to eliminate the provisions relating to convertibility into Common
Stock. The remaining convertible subordinated notes are convertible into 5,133
shares of Common Stock.

     There were no acquisitions during the nine months ended September 30, 2000.

     The accompanying balance sheets include allocations of the respective
purchase prices to the assets acquired and liabilities assumed based on
preliminary estimates of fair value and are subject to final adjustment.

     The unaudited pro forma data presented below consists of the income
statement data presented in these consolidated financial statements plus income
statement data for the purchased companies as if the acquisitions were effective
on January 1, 1999 through the respective dates of acquisitions (in thousands,
except per share data):


                                         NINE MONTHS ENDED
                                         SEPTEMBER 30, 1999
                                         ------------------
Revenues.............................        $1,062,327
Net income...........................        $   34,095
Net income per share -- diluted......        $     0.85
Shares used in computing net income
  per share -- diluted...............            40,922


     Pro forma adjustments included in the preceding table regarding the
purchased companies primarily relate to (a) certain reductions in salaries and
benefits to the former owners of the purchased companies which the former owners
agreed would take effect as of the acquisition date, (b) amortization of
goodwill related to the purchased companies, (c) interest expense on borrowings
of $38.0 million used in the acquisition of the purchased companies, and
(d) interest expense related to subordinated notes issued in the acquisition of
certain of the purchased companies. In addition, an incremental tax provision
has been recorded as if all applicable purchased companies had been subject to
federal and state income taxes.

                                       7
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       SEPTEMBER 30, 2000 -- (CONTINUED)

     The pro forma results presented above are not necessarily indicative of
actual results which might have occurred had the operations and management teams
of the Company and the purchased companies been combined at the beginning of the
period presented.

6.  LONG-TERM DEBT OBLIGATIONS:

     Long-term debt obligations consist of the following (in thousands):


                                         DECEMBER 31,       SEPTEMBER 30,
                                             1999               2000
                                         ------------       -------------
                                                            (UNAUDITED)
Revolving credit facility............      $225,215           $247,700
Notes to affiliates and former
owners...............................        77,009             50,686
Other................................         3,609                590
                                           --------           --------
Total debt...........................       305,833            298,976
Less: current maturities.............        27,889             15,720
                                           --------           --------
                                           $277,944           $283,256
                                           ========           ========


REVOLVING CREDIT FACILITY

     The Company has a revolving credit facility (the "Credit Facility" or the
"Facility") provided by Bank One, Texas, N.A. ("Bank One") and other banks (the
"Bank Group"). The Credit Facility provides the Company with a revolving line of
credit of up to the lesser of $280 million or 80% of net accounts receivable.
Borrowings under the Facility are secured by accounts receivable, inventory,
fixed assets other than real estate, and the shares of capital stock of the
Company's subsidiaries. The Credit Facility expires on November 1, 2001, at
which time all amounts outstanding are due. The Company has a choice of two
interest rate options under the Facility. Under one option, the interest rate is
determined based on the higher of the Federal Funds Rate plus 0.5% or Bank One's
prime rate. An additional margin of 1% to 2% is then added to the higher of
these two rates. Under the other interest rate option, borrowings bear interest
based on designated short-term Eurodollar rates (which generally approximate
LIBOR) plus 2.25% to 3.5%. The additional margin for both options depends on the
ratio of the Company's debt to earnings before interest, taxes, depreciation and
amortization, ("EBITDA") as defined. Commitment fees of 0.375% to 0.5% per
annum, also depending on the ratio of debt to EBITDA, are payable on the unused
portion of the Facility.

     The Credit Facility prohibits payment of dividends by the Company, limits
certain non-Bank Group debt, and restricts outlays of cash by the Company
relating to certain investments, capital expenditures, vehicle leases,
acquisitions and principal repayments of subordinate debt. The Credit Facility
also provides for the maintenance of certain levels of shareholder equity and
EBITDA, and for the maintenance of certain ratios of the Company's EBITDA to
interest expense and debt to EBITDA.

     Under the terms of the Credit Facility that were in effect as of June 30,
2000, the Company was in violation of two of the Facility's financial balance
and ratio requirements, in both cases by small amounts. The Bank Group waived
these violations. In connection with these waivers, the Bank Group increased
certain interest charges, introduced a minimum EBITDA requirement and reduced
the requirements of the ratios of EBITDA to interest expense and debt to EBITDA.
As of September 30, 2000, the Company was in violation of several of the
Facility's financial balance and ratio requirements, primarily as a result of
the restructuring charges the Company recorded in the third quarter. The Bank
Group has waived these

                                       8
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       SEPTEMBER 30, 2000 -- (CONTINUED)

violations. In connection with these waivers, the Bank Group increased certain
interest charges and agreed to exclude aggregate restructuring charges recorded
in 2000 of up to $27.5 million before taxes from consideration in determining
the Company's compliance with the financial balance and ratio requirements of
the Facility. In addition, the Bank Group agreed to reduce the requirements of
financial balances and ratios for the Company's 2000 results.

     As of September 30, 2000, the Company had $247.7 million in borrowings
outstanding under the Credit Facility and had incurred interest expense at an
average rate of approximately 8.6% per annum for the first nine months of 2000.
The Credit Facility's interest rate terms as summarized above are effective as
of November 13, 2000 and will result in an increase of approximately 0.30% in
the additional margin and related costs the Company pays in excess of the
indicated market interest rate in either of the interest rate options. As of
September 30, 2000, the Company also had $2.2 million in letters of credit
outstanding under the Facility, and unused borrowing capacity under the Facility
of $50.1 million. As of November 13, 2000, $230.0 million in borrowings and $2.2
million in letters of credit were outstanding under the Facility, and $47.8
million in unused capacity was available.

INTENDED REFINANCINGS

     Earlier this year, the Company intended to refinance a portion of its
variable-rate debt under the Credit Facility with fixed-rate private placement
debt. In anticipation of this transaction, the Company entered into interest
rate lock agreements to hedge against increases in market interest rates. In the
second quarter of 2000, the Company elected not to complete this refinancing and
terminated the interest lock agreements at a nominal gain. In connection with
this refinancing, the Company also had intended to significantly decrease the
size of the Credit Facility. As disclosed by the Company in May 2000, if this
had occurred, the Company would have recognized extraordinary charges of
approximately $0.01 to $0.02 per share for the write-off of a portion of the
deferred issuance costs of the Credit Facility. Because the Company no longer
intends to significantly reduce the Credit Facility as contemplated in the
second quarter, it no longer expects such charges will be necessary.

     The Company is considering steps to extend the maturity of, or otherwise
refinance, its borrowings under the Credit Facility. These amounts currently
mature in November 2001.

NOTES TO AFFILIATES AND FORMER OWNERS

     Subordinated notes were issued to former owners of certain purchased
companies as part of the consideration used to acquire their companies. These
notes had an outstanding balance of $50.7 million as of September 30, 2000. Of
these notes, $50.3 million bear interest, payable quarterly, at a weighted
average interest rate of 5.79% and $0.4 million are non-interest bearing. In
addition, $1.2 million of these notes are convertible by the holders into shares
of the Company's Common Stock at a weighted average price of $25.27 per share.
The scheduled maturities of the subordinated notes are $3.4 million in 2000,
$24.4 million in 2001, $22.0 million in 2002, and $0.9 million in 2003.

     Under the current terms of the Credit Facility, the Company is restricted
from making scheduled repayments of subordinate debt beginning in October 2000.
As a result, the Company did not make principal payments of approximately $3.4
million related to its subordinated debt that were due in October and November
of 2000. The holders of these notes have the right to notify the Company and the
Bank Group of this default and generally must wait for one year from the date of
the notification to pursue payment remedies. Through November 13, 2000, the
Company has received notices from five holders of the Company's subordinate debt
holding indebtedness totaling $5.4 million. The Company intends to negotiate

                                       9
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       SEPTEMBER 30, 2000 -- (CONTINUED)


the disposition of this issue in connection with pursuing an extension of the
maturity of borrowings under the Credit Facility as discussed above.

7.  COMMITMENTS AND CONTINGENCIES:

CLAIMS AND LAWSUITS

     The Company is party to litigation in the ordinary course of business.
There are currently no pending legal proceedings that, in management's opinion,
would have a material adverse effect on the Company's operating results or
financial condition. The Company maintains various insurance coverages in order
to limit financial risk associated with certain claims.

     A wholly-owned insurance company subsidiary reinsures a portion of the risk
associated with surety bonds issued by a third party insurance company. Because
no claims have been made against these financial instruments in the past,
management does not expect these instruments will have a material effect on the
Company's consolidated financial statements.

8.  STOCKHOLDERS' EQUITY:

TREASURY STOCK

     On October 5, 1999, the Company announced that its Board of Directors had
approved a share repurchase program authorizing the Company to buy up to
4.0 million shares of its Common Stock. During 1999, the Company purchased
approximately 1.8 million shares at a cost of approximately $12.9 million.
During the first nine months of 2000, the Company purchased approximately
0.2 million shares at a cost of approximately $1.2 million. The Company does not
expect further share repurchases under this program for the foreseeable future.

RESTRICTED COMMON STOCK

     In March 1997, Notre Capital Ventures II, L.L.C. exchanged 2,742,912 shares
of Common Stock for an equal number of shares of restricted voting common stock
("Restricted Voting Common Stock"). The holders of Restricted Voting Common
Stock are entitled to elect one member of the Company's Board of Directors and
0.55 of one vote for each share on all other matters on which they are entitled
to vote. Holders of Restricted Voting Common Stock are not entitled to vote on
the election of any other directors.

     Each share of Restricted Voting Common Stock will automatically convert to
Common Stock on a share-for-share basis (i) in the event of a disposition of
such share of Restricted Voting Common Stock by the holder thereof (other than a
distribution which is a distribution by a holder to its partners or beneficial
owners, or a transfer to a related party of such holders (as defined in
Sections 267, 707, 318 and/or 4946 of the Internal Revenue Code of 1986, as
amended)), (ii) in the event any person acquires beneficial ownership of 15% or
more of the total number of outstanding shares of Common Stock of the Company,
or (iii) in the event any person offers to acquire 15% or more of the total
number of outstanding shares of Common Stock of the Company. After July 1, 1998,
the Board of Directors may elect to convert any remaining shares of Restricted
Voting Common Stock into shares of Common Stock in the event 80% or more of the
originally outstanding shares of Restricted Voting Common Stock have been
previously converted into shares of Common Stock. As of September 30, 2000,
1,346,828 shares of Restricted Voting Common Stock had been converted to shares
of Common Stock.

                                       10
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       SEPTEMBER 30, 2000 -- (CONTINUED)

EARNINGS PER SHARE

     Basic earnings per share ("EPS") is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the year.
Diluted EPS is computed considering the dilutive effect of stock options and
convertible subordinated notes. Options had an anti-dilutive effect for the
three months and nine months ended September 30, 2000 because the Company
reported a net loss during these periods, and therefore, are not included in the
diluted EPS calculation. The Company has options outstanding to purchase 4.7
million shares of Common Stock at prices ranging from $3.875 to $21.438 per
share. Diluted EPS is also computed by adjusting both net earnings and shares
outstanding as if the conversion of the convertible subordinated notes occurred
on the first day of the year. The after-tax interest expense related to the
assumed conversion of the convertible subordinated notes during the three months
and nine months ended September 30, 1999 was $0.1 million and $0.8 million,
respectively. The convertible subordinated notes had an anti-dilutive effect
during the three months and nine months ended September 30, 2000, and therefore,
are not included in the diluted EPS calculation.

     The following table reconciles the number of shares outstanding with the
number of shares used in computing basic and diluted earnings per share for each
of the periods presented (in thousands):


                                          THREE MONTHS          NINE MONTHS
                                              ENDED                ENDED
                                          SEPTEMBER 30,        SEPTEMBER 30,
                                         ---------------      ---------------
                                          1999     2000        1999     2000
                                         ------   ------      ------   ------
Common shares outstanding, end of
  period.............................    39,252   37,331      39,252   37,331
Effect of using weighted average
  common shares outstanding .........      (192)     (66)       (547)      98
                                         ------   ------      ------   ------
Shares used in computing earnings per
  share -- basic.....................    39,060   37,265      38,705   37,429
Effect of shares issuable under stock
  option plans based on the treasury
  stock method.......................       202     --           228     --
Effect of shares issuable related to
  convertible notes..................       269     --         1,402     --
                                         ------   ------      ------   ------
Shares used in computing earnings per
  share -- diluted...................    39,531   37,265      40,335   37,429
                                         ======   ======      ======   ======


                                       11
<PAGE>
                            COMFORT SYSTEMS USA, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

INTRODUCTION

     The following discussion should be read in conjunction with the historical
consolidated financial statements of Comfort Systems USA, Inc. ("Comfort
Systems" and collectively with its subsidiaries, the "Company") and related
notes thereto included elsewhere in this Form 10-Q and the Annual Report on Form
10-K as filed with the Securities and Exchange Commission for the year ended
December 31, 1999 (the "Form 10-K"). This discussion contains forward-looking
statements regarding the business and industry of Comfort Systems within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on the current plans and expectations of the Company and
involve risks and uncertanties that could cause actual future activities and
results of operations to be materially different from those set forth in the
forward-looking statements. Important factors that could cause actual results to
differ include risks set forth in "Factors Which May Affect Future Results,"
included in the Form 10-K.

     The Company is a leading national provider of comprehensive HVAC
installation, maintenance, repair and replacement services. The Company operates
primarily in the commercial and industrial HVAC markets, and performs most of
its services within manufacturing plants, office buildings, retail centers,
apartment complexes, and healthcare, education and government facilities. In
addition to standard HVAC services, the Company provides specialized
applications such as process cooling, control systems, electronic monitoring and
process piping. Certain locations also perform related services such as
electrical and plumbing.

RESULTS OF OPERATIONS -- (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED                            NINE MONTHS ENDED
                                                     SEPTEMBER 30,                                 SEPTEMBER 30,
                                         --------------------------------------      ------------------------------------------
                                               1999                 2000                    1999                   2000
                                         -----------------    -----------------      -------------------    -------------------
<S>                                      <C>         <C>      <C>         <C>        <C>           <C>      <C>           <C>
Revenues.............................    $374,815    100.0%   $423,922    100.0%     $1,008,234    100.0%   $1,191,458    100.0%
Cost of services.....................     298,480     79.6%    352,838     83.2%        792,482     78.6%      978,869     82.2%
                                         --------             --------               ----------             ----------
Gross profit.........................      76,335     20.4%     71,084     16.8%        215,752     21.4%      212,589     17.8%
Selling, general and administrative
  expenses...........................      45,793     12.2%     58,021     13.7%        133,984     13.3%      169,182     14.2%
Goodwill amortization................       2,983      0.8%      3,151      0.7%          8,650      0.9%        9,483      0.8%
Restructuring charges................       --        --         9,959      2.3%         --         --          10,313      0.9%
                                         --------             --------               ----------             ----------
Operating income (loss)..............      27,559      7.4%        (47)    --            73,118      7.3%       23,611      2.0%
Other income (expense)...............      (4,967)    (1.3)%    (6,429)    (1.5)%       (13,288)    (1.3)%     (18,739)    (1.6)%
Reductions in non-operating assets
  and liabilities, net...............       --        --         --        --            --         --          (5,190)    (0.4)%
                                         --------             --------               ----------             ----------
Income (loss) before income taxes....      22,592      6.0%     (6,476)    (1.5)%        59,830      5.9%         (318)    --
Income tax expense (benefit).........       9,724               (2,787)                  25,753                    268
                                         --------             --------               ----------             ----------
Net income (loss)....................    $ 12,868      3.4%   $ (3,689)    (0.9)%    $   34,077      3.4%   $     (586)    --
                                         ========             ========               ==========             ==========
</TABLE>

     REVENUES -- Revenues increased $49.1 million, or 13.1%, to $423.9 million
for the third quarter of 2000 and increased $183.2 million, or 18.2%, to $1.2
billion for the first nine months of 2000, compared to the same periods in 1999.
For the three months ended September 30, 2000, the 13.1% revenue growth rate was
comprised of approximately 11.0% internal growth and 2.1% for operations that
were acquired in the second half of 1999 that are in the Company's results for
the full third quarter of 2000. For the first nine months of 2000, the 18.2%
revenue growth rate was comprised of approximately 12.8% internal growth and

                                       12
<PAGE>
5.4% for second-half 1999 acquisitions that are in the Company's results for the
first nine months of 2000. Revenue growth of approximately 3% versus both the
comparable three and nine-month periods in 1999 resulted from the Company's
ability to increase volume by subcontracting portions of projects to other
contractors.

     Of the 11.0% and 12.8% internal revenue growth amounts for the quarter and
year-to-date periods in 2000 as compared to last year, 7.2% and 7.1%,
respectively, were attributable to the Company's largest single operation. This
growth represents substantial increases in volume at this operation which did
not result in commensurate increases in profitability due to scarce technical
and skilled labor and customer scheduling and site restrictions related to
strong business conditions. The Company has experienced these kinds of
challenges at numerous other operations as well, and believes they reflect high
levels of activity and capacity constraints for the construction industry in
general. As a result, management is placing less emphasis on revenue growth and
more on efficiency and profit margin improvements in current activities and
planning for 2001 across all operations. It is likely, therefore, that the
Company will experience slower revenue growth in future periods. There can be no
assurance, however, that this strategy will lead to improved profit margins in
the near term.

     GROSS PROFIT -- Gross profit decreased $5.3 million, or 6.9%, to $71.1
million for the third quarter of 2000 and decreased $3.2 million, or 1.5%, to
$212.6 million for the first nine months of 2000, compared to the same periods
in 1999. As a percentage of revenues, gross profit decreased from 20.4% for the
three months ended September 30, 1999 to 16.8% for the three months ended
September 30, 2000 and decreased from 21.4% for the first nine months of 1999 to
17.8% for the first nine months of 2000.

     During the third quarter of 2000, the Company's largest operation and one
other of the Company's larger operations turned in disappointing results due to
execution shortfalls on certain sizable projects with nationally recognized
companies. In addition, the Company has also experienced weak performance at
several locations relating to ongoing turnaround efforts and execution
difficulties. The remaining decrease in gross profit as a percentage of revenues
resulted from increased labor costs, pricing pressures in certain markets and
scheduling and efficiency challenges associated with labor availability and
productivity at the high levels of activity at most of our operations. The
Company has also realized a change in its mix of revenue volume to include more
subcontracting activities which generally carry lower margins.

     During the nine months ended September 30, 2000, the Company reported
negative gross profit of approximately $3.6 million related to one of its
operations in the Midwest. The Company has decided to cease operations at this
location and costs associated with this step are included in restructuring
charges as discussed below. The remaining decrease in gross profit as a
percentage or revenues for the nine months ended September 30, 2000 is
consistent with the factors discussed above.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") -- SG&A increased
$12.2 million, or 26.7%, to $58.0 million for the third quarter of 2000 and
increased $35.2 million, or 26.3%, to $169.2 million for the first nine months
of 2000, compared to the same periods in 1999. As a percentage of revenues,
selling, general and administrative expenses increased from 12.2% for the three
months ended September 30, 1999 to 13.7% for the three months ended
September 30, 2000 and from 13.3% for the first nine months of 1999 to 14.2% for
the first nine months of 2000. This increase in SG&A as a percentage of revenues
resulted primarily from the inclusion in 2000 of results of companies acquired
in 1999 that have higher SG&A as a percentage of sales than the rest of the
Company's operations. These acquisitions include Outbound Services where the
Company has incurred significantly higher SG&A to support expansion of its
e-commerce activities. The Company also increased corporate and regional office
spending to support the requirements of a larger organization, and to increase
its efforts to land more national account and energy project business. In
addition, as discussed above, the Company has experienced weak performance at
several locations relating to turnaround efforts and execution difficulties, and
these companies have realized a disproportionate amount of SG&A as compared to
their revenue volumes.

                                       13
<PAGE>
     RESTRUCTURING CHARGES -- During the three and nine months ended
September 30, 2000, the Company recorded restructuring charges of approximately
$10.0 million and $10.3 million, respectively, associated primarily with
restructuring efforts at certain underperforming operations. As announced by the
Company in the second quarter of 2000, management has been performing an
extensive review of its operations. As part of this ongoing review, management
decided to cease operating at two operating locations, sell two smaller
satellite operations, and merge one small company into a larger operation. These
actions are expected to be substantially complete by the end of 2000. The
aggregate results of these operations for the first nine months of 2000 were
revenues of $18.4 million and operating losses of $6.3 million. The
restructuring charges associated with these actions are primarily non-cash and
include goodwill impairments of approximately $7.1 million and the writedown of
other long-lived assets of approximately $0.9 million. The remaining
restructuring items primarily include severance and lease termination costs.
Severance costs relate to the departure of the Company's former chief executive
officer and to the termination of approximately 20 employees including certain
corporate personnel and the management of certain underperforming locations.

     The Company is continuing its extensive review of its operations and
activities which are not strategic. This review includes further core
commercial/industrial HVAC operations as well as the Company's expanded
e-commerce activities, and will likely result in decisions to cease operating at
or sell additional operations. Management expects this effort to be
substantially complete by year-end.

     OTHER INCOME (EXPENSE) -- Other expense, net, increased $1.5 million, or
29.4%, to $6.4 million for the third quarter of 2000 and increased $5.5 million,
or 41.0%, to $18.7 million for the first nine months of 2000, compared to the
same periods in 1999. This increase was primarily due to the increase in
interest expense related to the cash and subordinate notes portions of
consideration paid for companies acquired in 1999.

     REDUCTIONS IN NON-OPERATING ASSETS AND LIABILITIES, NET -- During the
quarter ended June 30, 2000, the Company recorded a non-cash charge of
approximately $5.2 million primarily related to the impairment of certain
non-operating assets. These assets primarily related to notes receivable from
former business owners. In addition, the Company recorded an impairment of
approximately $0.8 million to its minority investment in two entities associated
with the distribution and implementation of high-end engineering and design
software. The Company also recorded a gain of approximately $0.6 million on the
reduction of its subordinated note payable to a former owner in connection with
the settlement of claims with this former owner.

LIQUIDITY AND CAPITAL RESOURCES

     CASH FLOW -- For the nine months ended September 30, 2000, net cash
provided by operating activities was $23.3 million and represents an increase of
$21.0 million over the comparable period of the prior year. This improvement
primarily results from an increase in accounts payable and accrued liabilities,
and an increase in billings in excess of costs and estimated earnings.

     Cash used in investing activities was $13.2 million for the nine months
ended September 30, 2000, primarily in connection with purchases of property and
equipment for $14.7 million. Cash used in investing activities for the nine
months ended September 30, 1999 was $38.3 million, primarily in connection with
the acquisition of purchased companies and purchases of property and equipment.

     Cash used in financing activities for the nine months ended September 30,
2000 was $6.1 million and was primarily attributable to net payments of
long-term debt of $6.4 million. Net cash provided by financing activities for
the nine months ended September 30, 1999 was $36.6 million and was primarily
attributable to net borrowings of long-term debt used to fund acquisitions.

     REVOLVING CREDIT FACILITY -- The Company has a revolving credit facility
(the "Credit Facility" or the "Facility") provided by Bank One, Texas, N.A.
("Bank One") and other banks (the "Bank Group"). The

                                       14
<PAGE>
Credit Facility provides the Company with a revolving line of credit of up to
the lesser of $280 million or 80% of net accounts receivable. Borrowings under
the Facility are secured by accounts receivable, inventory, fixed assets other
than real estate, and the shares of capital stock of the Company's subsidiaries.
The Credit Facility expires on November 1, 2001, at which time all amounts
outstanding are due. The Company has a choice of two interest rate options under
the Facility. Under one option, the interest rate is determined based on the
higher of the Federal Funds Rate plus 0.5% or Bank One's prime rate. An
additional margin of 1% to 2% is then added to the higher of these two rates.
Under the other interest rate option, borrowings bear interest based on
designated short-term Eurodollar rates (which generally approximate LIBOR) plus
2.25% to 3.5%. The additional margin for both options depends on the ratio of
the Company's debt to earnings before interest, taxes, depreciation and
amortization, ("EBITDA") as defined. Commitment fees of 0.375% to 0.5% per
annum, also depending on the ratio of debt to EBITDA, are payable on the unused
portion of the Facility.

     The Credit Facility prohibits payment of dividends by the Company, limits
certain non-Bank Group debt, and restricts outlays of cash by the Company
relating to certain investments, capital expenditures, vehicle leases,
acquisitions and principal repayments of subordinate debt. The Credit Facility
also provides for the maintenance of certain levels of shareholder equity and
EBITDA, and for the maintenance of certain ratios of the Company's EBITDA to
interest expense and debt to EBITDA.

     Under the terms of the Credit Facility that were in effect as of June 30,
2000, the Company was in violation of two of the Facility's financial balance
and ratio requirements, in both cases by small amounts. The Bank Group waived
these violations. In connection with these waivers, the Bank Group increased
certain interest charges, introduced a minimum EBITDA requirement and reduced
the requirements of the ratios of EBITDA to interest expense and debt to EBITDA.
As of September 30, 2000, the Company was in violation of several of the
Facility's financial balance and ratio requirements, primarily as a result of
the restructuring charges the Company recorded in the third quarter. The Bank
Group has waived these violations. In connection with these waivers, the Bank
Group increased certain interest charges and agreed to exclude aggregate
restructuring charges recorded in 2000 of up to $27.5 million before taxes from
consideration in determining the Company's compliance with the financial balance
and ratio requirements of the Facility. In addition, the Bank Group agreed to
reduce the requirements of financial balances and ratios for the Company's 2000
results.

     As of September 30, 2000, the Company had $247.7 million in borrowings
outstanding under the Credit Facility and had incurred interest expense at an
average rate of approximately 8.6% per annum for the first nine months of 2000.
The Credit Facility's interest rate terms as summarized above are effective as
of November 13, 2000 and will result in an increase of approximately 0.30% in
the additional margin and related costs the Company pays in excess of the
indicated market interest rate in either of the interest rate options. As of
September 30, 2000, the Company also had $2.2 million in letters of credit
outstanding under the Facility, and unused borrowing capacity under the Facility
of $50.1 million. As of November 13, 2000, $230.0 million in borrowings and $2.2
million in letters of credit were outstanding under the Facility, and $47.8
million in unused capacity was available.

     INTENDED REFINANCING -- Earlier this year, the Company intended to
refinance a portion of its variable-rate debt under the Credit Facility with
fixed-rate private placement debt. In anticipation of this transaction, the
Company entered into interest rate lock agreements to hedge against increases in
market interest rates. In the second quarter of 2000, the Company elected not to
complete this refinancing and terminated the interest lock agreements at a
nominal gain. In connection with this refinancing, the Company also had intended
to significantly decrease the size of the Credit Facility. As disclosed by the
Company in May 2000, if this had occurred, the Company would have recognized
extraordinary charges of approximately $0.01 to $0.02 per share for the
write-off of a portion of the deferred issuance costs of the Credit Facility.
Because the Company no longer intends to significantly reduce the Credit
Facility as contemplated in the second quarter, it no longer expects such
charges will be necessary.

                                       15
<PAGE>
     The Company is considering steps to extend the maturity of, or otherwise
refinance, its borrowings under the Credit Facility. These amounts currently
mature in November 2001.

     NOTES TO AFFILIATES AND FORMER OWNERS -- Subordinated notes were issued to
former owners of certain purchased companies as part of the consideration used
to acquire their companies. These notes had an outstanding balance of $50.7
million as of September 30, 2000. Of these notes, $50.3 million bear interest,
payable quarterly, at a weighted average interest rate of 5.79% and $0.4 million
are non-interest bearing. In addition, $1.2 million of these notes are
convertible by the holders into shares of the Company's Common Stock at a
weighted average price of $25.27 per share. The scheduled maturities of the
subordinated notes are $3.4 million in 2000, $24.4 million in 2001, $22.0
million in 2002, and $0.9 million in 2003.

     Under the current terms of the Credit Facility, the Company is restricted
from making scheduled repayments of subordinate debt beginning in October 2000.
As a result, the Company did not make principal payments of approximately $3.4
million related to its subordinated debt that were due in October and November
of 2000. The holders of these notes have the right to notify the Company and the
Bank Group of this default and generally must wait for one year from the date of
the notification to pursue payment remedies. Through November 13, 2000, the
Company has received notices from five holders of the Company's subordinate debt
holding indebtedness totaling $5.4 million. The Company intends to negotiate the
disposition of this issue in connection with pursuing an extension of the
maturity of borrowings under the Credit Facility as discussed above.

     STOCK REPURCHASES -- On October 5, 1999, the Company announced that its
Board of Directors had approved a share repurchase program authorizing the
Company to buy up to 4.0 million shares of its Common Stock. During 1999, the
Company purchased approximately 1.8 million shares at a cost of approximately
$12.9 million. During the first nine months of 2000, the Company purchased
approximately 0.2 million shares at a cost of approximately $1.2 million. The
Company does not expect further share repurchases under this program for the
foreseeable future.

     OUTLOOK -- The Company anticipates that available borrowings under its
Credit Facility and cash flow from operations will be sufficient to meet the
Company's normal working capital and capital expenditure needs. The Company will
need to extend the maturity of its borrowings under the Credit Facility and
certain of its subordinate debt to affiliates and former owners. As discussed
above, the Company is considering alternatives to accomplish these steps. There
can be no assurance that extensions can be obtained, or that if the Company
needs additional financing, that such financing can be secured when needed or on
terms the Company deems acceptable.

SEASONALITY AND CYCLICALITY

     The HVAC industry is subject to seasonal variations. Specifically, the
demand for new installation and replacement is generally lower during the winter
months due to reduced construction activity during inclement weather and less
use of air conditioning during the colder months. Demand for HVAC services is
generally higher in the second and third calendar quarters due to increased
construction activity and increased use of air conditioning during the warmer
months. Accordingly, the Company expects its revenues and operating results
generally will be lower in the first and fourth calendar quarters.

     Historically, the construction industry has been highly cyclical. As a
result, the Company's volume of business may be adversely affected by declines
in new installation projects in various geographic regions of the United States.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to market risk primarily related to potential
adverse changes in interest rates. Management is actively involved in monitoring
exposure to market risk and continues to develop and utilize appropriate risk
management techniques.

                                       16
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company is party to litigation in the ordinary course of business.
There are currently no pending legal proceedings that, in management's opinion,
will have a material adverse effect on the Company's consolidated operating
results or financial condition.

ITEM 2.  RECENT SALES OF UNREGISTERED SECURITIES

     During the three month period ended September 30, 2000, the Company did not
issue any unregistered shares of its common stock.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          10.1 -- Fourth Amendment to Credit Agreement dated as of November 13,
          2000 amending the Third Amended and Restated Credit Agreement dated
          December 14, 1998 among the Company and its subsidiaries, Bank One,
          Texas, N.A., as agent and the banks listed therein. (Filed herewith).

          27.1 -- Financial Data Schedule. (Filed herewith).

     (b)  Reports on Form 8-K

          None.

ITEM 9.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

     None.

                                       17
<PAGE>
                                   SIGNATURE

     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

                                          COMFORT SYSTEMS USA, INC.

                                          By: /s/ J. GORDON BEITTENMILLER
                                                  J. GORDON BEITTENMILLER
                                                 EXECUTIVE VICE PRESIDENT,
                                            CHIEF FINANCIAL OFFICER AND DIRECTOR

Dated:  November 14, 2000

                                       18
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<TEXT>

                                                                    EXHIBIT 10.1

                            COMFORT SYSTEMS USA, INC.

                      FOURTH AMENDMENT TO CREDIT AGREEMENT

      This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is dated as
of November 13, 2000 (the "EFFECTIVE DATE") and entered into by and among
COMFORT SYSTEMS USA, INC., a Delaware corporation (the "COMPANY"), the other
Credit Support Parties (as defined in Section 4 hereof), the Subsidiaries of the
Company listed on the signature pages hereto as Guarantors (together with each
other Person who subsequently becomes a Guarantor, collectively the
"GUARANTORS"), the banks and other financial institutions listed on the
signature pages hereto under the caption "BANKS" (together with each other
Person who becomes a Bank, collectively the "BANKS"), BANK ONE, TEXAS, N.A.,
individually as a bank ("BOT") and as administrative agent for the other Banks
(in such capacity together with any other Person who becomes the administrative
agent, the "ADMINISTRATIVE AGENT"), BANKERS TRUST COMPANY, individually as a
Bank ("BTCO") and as syndication agent for the other Banks (in such capacity
together with any other Person who becomes the syndication agent, the
"SYNDICATION AGENT"), BANK OF AMERICA, N.A. (formerly known as NationsBank,
N.A.), individually as a Bank ("BOFA") and as documentation agent for the other
Banks (in such capacity together with any other Person who becomes the
documentation agent, the "DOCUMENTATION AGENT"; and together with the
Administrative Agent and the Syndication Agent, the "AGENTS"), and CREDIT
LYONNAIS NEW YORK BRANCH, individually as a Bank and Co-Agent, NATIONAL CITY
BANK, individually as a Bank and as Co-Agent, and THE BANK OF NOVA SCOTIA,
individually as a Bank and as Co-Agent (collectively, the "CO-AGENTS"), and is
made with reference to that certain Third Amended and Restated Credit Agreement
dated as of December 14, 1998, by and among the Company, the Guarantors, the
Banks, the Agents and the Co-Agents, as amended by that certain First Amendment
dated as of January 14, 1999, that certain Second Amendment dated as of August
18, 1999, and that certain Third Amendment dated as of August 11, 2000 (as so
amended, the "CREDIT AGREEMENT"), and to other Loan Documents. Capitalized terms
used herein without definition shall have the same meanings herein as set forth
in the Credit Agreement, as amended hereby (the "AMENDED CREDIT AGREEMENT").


                                    RECITALS

      WHEREAS, the Company, the Guarantors and the Banks desire to amend the
Credit Agreement as set forth herein;

      NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
<PAGE>
      SECTION 1.  AMENDMENT TO THE CREDIT AGREEMENT

      1.1   AMENDMENTS TO SECTION 1.1: DEFINITIONS.

            The definition of "Account" is added to Section 1.1 of the Credit
Agreement in proper alphabetical order to read as follows:

            ""ACCOUNT" has the meaning stated in the Texas Uniform Commercial
Code."

            The definition of "ASSET SALES" in Section 1.1 of the Credit
Agreement is hereby amended by deleting the reference to "$500,000" contained
therein and substituting "$1,000,000.00" therefor.

            The definition of "Borrowing Base" is added to Section 1.1 of the
Credit Agreement in proper alphabetical order to read as follows:

            ""BORROWING BASE" means as to the Company and its Guarantors on a
            consolidated basis at any time, an amount equal to the product of
            (a) eighty percent (80%), times (b) the Eligible Accounts
            Receivable; PROVIDED that in the absence of a Borrowing Base
            Certificate, the Administrative Agent shall determine the Borrowing
            Base from time to time in its reasonable discretion, taking into
            account all information reasonably available to it, and the
            Borrowing Base from time to time so determined shall be the
            Borrowing Base for all purposes of this Agreement until a Borrowing
            Base Certificate is furnished to and accepted by the Administrative
            Agent."

            The definition of "Borrowing Base Certificate" is added to Section
1.1 of the Credit Agreement in proper alphabetical order to read as follows:

            ""BORROWING BASE CERTIFICATE" means, as of any date, a certificate
            as to the Borrowing Base as of such date in the form of Exhibit
            7.1(i)."

            The definition of "EBITDA" in Section 1.1 of the Credit Agreement is
hereby deleted in its entirety and the following is substituted therefor:

            ""EBITDA" means, for any period, the consolidated pre-tax income for
            such period, plus the aggregate amount which was deducted for such
            period in determining such consolidated, pre-tax income in respect
            of Interest Expense (including amortization of debt discount,
            imputed interest and capitalized interest), depreciation and
            amortization, provided, the calculations of EBITDA after the
            acquisition of assets or entities permitted under Section 8.5(d)
            shall include pro forma adjustments consistent with the regulations
            and practices of the United States Securities and Exchange
            Commission (whether or not applicable) to account for such acquired
            entity's historical EBITDA for the relevant period or similar
            adjustments in the case of an

                                       2
<PAGE>
            asset acquisition. For fiscal year 2000, (and only for fiscal year
            2000) the actual amount of pre-tax restructuring charges incurred by
            the Company during fiscal year 2000 (but in no event in excess of
            $27,500,000.00 in the aggregate) may be added back in determining
            EBITDA, PROVIDED that such pre-tax restructuring charges may be
            added back to the extent, and only to the extent, that such pre-tax
            restructuring charges were deducted in calculating EBITDA."

            The definition of "Eligible Accounts Receivable" is added to Section
1.1 of the Credit Agreement in proper alphabetical order to read as follows:

            ""ELIGIBLE ACCOUNTS RECEIVABLE" means at any time an amount equal to
            the aggregate net invoice or ledger amount (net of any reserves) due
            on all trade Accounts of the Company and the Guarantors for goods
            sold or leased or services rendered upon which Borrower's and
            Guarantors' rights to receive payment are absolute and not
            contingent upon the fulfillment of any condition whatsoever;
            PROVIDED, however, that Eligible Accounts Receivable shall include
            any retainage due to the Company and the Guarantors with respect to
            jobs in progress."

            The definition of "Margin" in Section 1.1 of the Credit Agreement is
hereby amended by deleting the grid contained in the definition of "Margin" and
substituting the following therefor:

      TOTAL FUNDED              EURODOLLAR RATE           ALTERNATE BASE
    DEBT/EBITDA RATIO               ADVANCE                RATE ADVANCE
-------------------------       ---------------           --------------
$ 4.00                              3.500 %                   2.000 %
$ 3.50 but less than 4.00           3.000 %                   1.750 %
$ 3.00 but less than 3.50           2.750 %                   1.500 %
$ 2.50 but less than 3.00           2.500 %                   1.250 %
less than 2.50                      2.250 %                   1.000 %

            The definition of "Total Commitment" in Section 1.1 of the Credit
Agreement is hereby deleted in its entirety and the following substituted
therefor:

            ""TOTAL COMMITMENT" means the sum of the Commitments for each Bank
            totaling a maximum of $280,000,000.00 for all Banks."

                                       3
<PAGE>
      1.2   AMENDMENT TO SECTION 2.1: THE LOANS.

            Section 2.1 of the Credit Agreement is hereby deleted in its
entirety and the following substituted therefor:

            "THE LOANS" Subject to the terms and conditions hereof, each Bank
severally agrees at any time and from time to time on and after the Effective
Date and prior to the Maturity Date, to make and maintain a loan or loans
(together with any Advances under a Letter of Credit described in Article III, a
"LOAN" and collectively, the "LOANS") to the Company not to exceed at any time
outstanding the maximum amount of its Commitment, which Loans (i) shall, at the
option of the Company, be made and maintained pursuant to one or more Advances
comprised of Alternate Base Rate Advances or Eurodollar Rate Advances; PROVIDED
that, except as otherwise specifically provided herein, all Advances made
simultaneously under the Loan shall be of the same Type, (ii) in the case of
Eurodollar Rate Advances, shall be made in the minimum amount of $1,000,000.00
and integral multiples of $100,000.00 and, in the case of Alternate Base Rate
Advances, in the minimum amount of $100,000.00 and integral multiples thereof,
or, in either case, in the remaining balance of the lesser of (w) the Total
Commitment, and (x) the Borrowing Base, (iii) may be repaid and, so long as no
Default or Event of Default exists hereunder, reborrowed, at the option of the
Company in accordance with the provisions hereof, and (iv) shall not, in the
aggregate at any time outstanding and together with all Letter of Credit
Obligations, exceed the lesser of (y) the Total Commitment, and (z) the
Borrowing Base."

      1.3   AMENDMENT TO SECTION 2.7(B): LOANS AND LETTER OF CREDIT OBLIGATIONS
            IN EXCESS OF TOTAL COMMITMENT.

            Section 2.7(b) of the Credit Agreement is hereby deleted in its
entirety and the following substituted therefor:

            "(b)  LOANS AND LETTER OF CREDIT OBLIGATIONS IN EXCESS OF TOTAL
                  COMMITMENT. The Company shall repay Loans on any day on which
                  the aggregate outstanding principal amount of the Loans
                  together with the outstanding Letter of Credit Obligations
                  exceeds the lesser of (i) the Total Commitment, and (ii) the
                  Borrowing Base, in the amount of such excess."

      1.4   AMENDMENT TO SECTION 3.1(A): LETTERS OF CREDIT.

            Section 3.1(a) of the Credit Agreement is hereby deleted in its
entirety and the following substituted therefor:

            "(a) Subject to and upon the terms and conditions herein set forth,
            the Issuing Bank agrees that it will, at any time and from time to
            time on or after the Effective Date and prior to the Maturity Date,
            following its receipt of a Letter of Credit Request and Application
            for Letter of Credit, issue for the account of the Company

                                       4
<PAGE>
            and in support of the obligations of the Company or any of its
            Subsidiaries, one or more standby and/or commercial letters of
            credit (the "LETTERS OF CREDIT") payable on a sight basis, up to a
            maximum amount outstanding at any one time for all Letters of Credit
            of $10,000,000.00; PROVIDED that the Issuing Bank shall not issue
            any Letter of Credit if at the time of such issuance: (i) Letter of
            Credit Obligations shall be greater than an amount which, when added
            to the sum of all Advances then outstanding plus Letter of Credit
            Obligations, would exceed the lesser of (x) the Total Commitment,
            and (y) the Borrowing Base; or (ii) the expiry date or, in the case
            of any Letter of Credit containing an expiry date that is extendable
            at the option of the Issuing Bank, the initial expiry date, of such
            Letter of Credit is a date that is later than the Maturity Date."

      1.5   AMENDMENT TO SECTION 4.1: FEES.

            Section 4.1(a) of the Credit Agreement is hereby amended by deleting
the grid contained in Section 4.1(a) and substituting the following therefor:

                "FUNDED DEBT/EBITDA        COMMITMENT FEE RATE
            -------------------------------------------------------
            greater than or equal to $4.00x                      0.500%
    greater than or equal to $3.50x and less than 4.00x          0.500%
    greater than or equal to $3.00x and less than 3.50x          0.500%
    greater than or equal to $2.50x and less than 3.00x          0.500%
        greater than or equal to less than 2.50x                 0.375%"

      1.6   ADDITION OF SECTION 7.1(H): ADDITIONAL REPORTING REQUIREMENTS.

                  Section 7.1 of the Credit Agreement is hereby amended by
adding the following as subsection 7.1(h):

            "(h) As soon as available, and in any event within thirty (30) days
            after the end of each calendar month, the consolidated balance sheet
            of the Company and its Subsidiaries as of the end of such month and
            the related consolidated statements of income for such period, along
            with summaries of the accounts receivable and accounts payable
            balances as of the end of such month, all of which shall be
            certified by the treasurer, chief financial officer, or chief
            executive officer of the Company as fairly presenting in all
            material respects, the financial position of the Company and its
            Subsidiaries as of the end of such month in accordance with GAAP. In
            addition to the foregoing, the Company shall also provide at such
            time a schedule and

                                       5
<PAGE>
            explanation of the top fifteen (15) jobs in progress for which
            projections indicate a negative deviation from the original
            anticipated margins, which report shall include the amount of
            underbillings for each such job."

      1.7   ADDITION OF SECTION 7.1(I): BORROWING BASE CERTIFICATE.

            Section 7.1 of the Credit Agreement is hereby amended by adding the
following as subsection 7.1(i):

            "(i) Within thirty (30) days after the end of each calendar month, a
            completed Borrowing Base Certificate calculating and certifying the
            Borrowing Base as of the last day of such calendar month, signed by
            an officer and the secretary of the company and in the form attached
            hereto as Exhibit 7.1(i)."

      1.8   ADDITION OF SECTION 7.10: ADDITIONAL COLLATERAL.

            Article VII of the Credit Agreement is hereby amended by adding the
following as Section 7.10:

            "SECTION 7.10 ADDITIONAL COLLATERAL. The Company hereby agrees that
            on or before December 15, 2000, the Company and the Guarantors shall
            take, or cause to be taken all such actions, execute and deliver or
            cause to be executed and delivered all such agreements, documents
            and instruments, and make or cause to be made all such filings and
            recordings that may be necessary or, in the opinion of the Agents,
            desirable in order to create in favor of the Administrative Agent,
            for the benefit of the Banks, a valid (and upon such filing and
            recording) perfected First Priority security interest in all
            furniture, fixtures, machinery and equipment, (including, without
            limitation, leasehold improvements, computers, telecommunications
            equipment and vehicles) owned by the Company and the Guarantors as
            security for the Obligations, which furniture, fixtures, machinery
            and equipment shall be included in the definition of Collateral as
            such term is used in the Credit Agreement. Such actions shall
            include, without limitation, the following:

                  (i) Execution by the Company and delivery to the
            Administrative Agent of an Amended and Restated Company Security
            Agreement and Amended and Restated Subsidiary Security Agreements
            granting a Lien on such furniture, fixtures, machinery and equipment
            as security for the Obligations, which Amended and Restated Company
            Security Agreement and Amended and Restated Subsidiary Security
            Agreements shall be included in the definition of Collateral
            Documents as such term is used in the Credit Agreement;

                  (ii) Delivery to the Administrative Agent of (a) the results
            of a recent search, by a Person satisfactory to the Agents, of all
            jurisdictions where filings to

                                       6
<PAGE>
            perfect are material or a material portion of such furniture,
            fixtures, machinery and equipment are located, together with copies
            of all such filings disclosed by such search; and (b) UCC
            termination statements duly executed by all applicable Persons for
            filing in all applicable jurisdictions as may be necessary to
            terminate any effective UCC financing statements or fixture filings
            disclosed in such search and affecting such furniture, fixtures,
            machinery and equipment (other than any such financing statements or
            fixture filings in respect of Liens permitted to remain outstanding
            pursuant to the terms of this Agreement);

                  (iii) Delivery to the Administrative Agent of UCC financing
            statements duly executed by the Company and each applicable
            Guarantor with respect to all such furniture, fixtures, machinery
            and equipment of the Company or such Guarantor, for filing in all
            jurisdictions as may be necessary or, in the opinion of the Agents,
            desirable to perfect the security interests created in such
            furniture, fixtures, machinery and equipment pursuant to the
            Collateral Documents; and

                  (iv) If required by the Administrative Agent, delivery to the
            Administrative Agent of an opinion of counsel (which counsel shall
            be reasonably satisfactory to the Agents) under the laws of Texas
            and such other jurisdictions as Agents may reasonably require, in
            each case with respect to the creation and perfection of the
            security interests in favor of the Administrative Agent on behalf of
            the Banks in such furniture, fixtures, machinery and equipment and
            such other matters governed by the laws of such jurisdiction
            regarding such security interests as the Agents may reasonably
            request, in each case in form and substance reasonably satisfactory
            to Agents.

            Notwithstanding the foregoing, the Company and the Guarantors shall
            not be required to re-title or to otherwise indicate the
            Administrative Agent's lien on behalf of the Banks on the
            certificate of title of any titled vehicles until such time as the
            Administrative Agent notifies the Company that such action is
            required."

      1.9   AMENDMENT TO SECTION 8.2: CONSOLIDATION, MERGER OR SALE OF ASSETS.

            Section 8.2 of the Credit Agreement is hereby amended by (1)
deleting the word "and" immediately after clause (b) contained in such Section
8.2, and (2) deleting the period at the end of Section 8.2 and substituting the
following therefor:

            ", and (d) wind ups, liquidations, dissolutions, mergers or
            consolidations with respect to the Subsidiaries listed on Exhibit
            8.2(d) attached hereto and incorporated herein by reference and
            Asset Sales with respect to the stock of such Subsidiaries and the
            assets owned by such Subsidiaries as of the Amendment Effective Date
            for the Fourth Amendment to Credit Agreement; PROVIDED that all
            proceeds received from such transactions permitted by this Section
            8.2(d) shall be applied to the Obligations

                                       7
<PAGE>
            then outstanding under the Loan Documents. No amendment,
            modification, termination, waiver or consent shall be made with
            respect to this Section 8.2 or with respect to the definition of
            "Asset Sales" without the consent of Banks holding at least eighty
            percent (80%) of the Advances outstanding under the Loans, or, if no
            Advances are outstanding, Banks holding such percentage of the Total
            Commitment (notwithstanding any reduction or termination of the
            Total Commitment) or if there are no Advances or Commitments
            outstanding, Banks holding such percentage of outstanding Letters of
            Credit."

      1.10  AMENDMENT TO SECTION 8.5: INVESTMENTS.

            Section 8.5(d) of the Credit Agreement is hereby deleted in its
entirety and the following substituted therefor:

            "(d) Provided that the Company has obtained the prior written
            consent of the Majority Banks with respect thereto, Investments in
            the stock, warrants, stock appreciation rights, other securities
            and/or other assets of domestic entities engaged in the same general
            type of business as the Company on the Effective Date, in which the
            Company or one of its wholly owned Subsidiaries is the surviving
            entity."

      1.11  AMENDMENT TO SECTION 8.6: RESTRICTED PAYMENTS.

            Section 8.6 of the Credit Agreement is hereby deleted in its
entirety and the following substituted therefor:

            "The Company will not, without the prior written consent of the
            Majority Banks, (i) pay any dividend or other distribution, direct
            or indirect, on account of, or redeem, retire, purchase or guaranty
            the value of or make any other acquisition, direct or indirect, of
            any shares of any class of stock of the Company, or of any warrants,
            rights or options to acquire any such shares, now or hereafter
            outstanding, or (ii) make any Restricted Subordinated Debt Payments;
            PROVIDED the Company may, to the extent, and only to the extent,
            such payments are not otherwise prohibited pursuant to the terms of
            this Agreement, make payments of regularly scheduled interest in
            respect of any Subordinated Indebtedness, in accordance with the
            terms of and to the extent required by, and subject to the
            subordination provisions contained in, the documents establishing
            and evidencing such Subordinated Indebtedness."

      1.12  AMENDMENT TO SECTION 8.10: FUNDED SENIOR DEBT TO EBITDA RATIO.

            Section 8.10 of the Credit Agreement is deleted in its entirety and
the following is substituted therefor:

                                       8
<PAGE>
            "The Company will not, as of the last day of any fiscal quarter,
            permit the ratio of its total Funded Senior Debt on such day to
            EBITDA for the four consecutive fiscal quarters then ended to exceed
            the amounts set forth below:

                      DATE(S)                RATIO
                     --------                -----
                     09/30/00                3.20x
                     12/31/00                3.70x
                     03/31/01                3.75x
                     06/30/01                3.55x
                     09/30/01                3.10x

            For purposes of calculating the ratio in this Section 8.10, the
            calculation of Funded Senior Debt after the acquisition of assets or
            entities permitted under this Agreement shall include adjustments to
            account for the total Funded Senior Debt of or applicable to such
            acquired assets or entities during the relevant period."

      1.13  AMENDMENT TO SECTION 8.11: TOTAL FUNDED DEBT TO EBITDA RATIO.

            Section 8.11 of the Credit Agreement is deleted in its entirety and
the following is substituted therefor:

            "The Company will not, as of the last day of any fiscal quarter,
            permit the ratio of (i) its Total Funded Debt on such day to (ii)
            EBITDA for the four consecutive fiscal quarters then ended to exceed
            the amounts set forth below:

                      DATE(S)                RATIO
                     --------                -----
                     09/30/00                3.85x
                     12/31/00                4.50x
                     03/31/01                4.60x
                     06/30/01                4.35x
                     09/30/01                3.80x

            For purposes of calculating the ratio in this Section 8.11, the
            calculation of Total Funded Debt after the acquisition of assets or
            entities permitted under this Agreement

                                       9
<PAGE>
            shall include adjustments to account for the Total Funded Debt of or
            applicable to such acquired assets or entities during the relevant
            period."

      1.14  AMENDMENT TO SECTION 8.13: CAPITAL EXPENDITURES.

            Section 8.13 of the Credit Agreement is hereby amended by adding the
following provision at the end of such section:

            "Notwithstanding anything contained in this Agreement to the
            contrary, for the fiscal year 2001 the Company will not permit total
            consolidated capital expenditures (including Capitalized Lease
            Obligations but exclusive of (a) Investments permitted under SECTION
            8.5(D), and (b) consolidated capital expenditures with respect to
            casualty loss replacements) to be greater than the lesser of (i)
            $22,000,000.00, and (ii) two percent (2.00%) of gross revenues (pro
            forma gross revenues with respect to permitted acquisitions) for
            fiscal year 2001."

      1.15  AMENDMENT TO SECTION 8.14: INTEREST COVERAGE RATIO.

            Section 8.14 of the Credit Agreement is deleted in its entirety and
the following is substituted therefor:

            "The Company will not, as of the last day of any fiscal quarter,
            permit the ratio of EBITDA for the four consecutive fiscal quarters
            then ended to cash Interest Expense for such period to be less than
            the amounts set forth below:

                      DATE(S)                RATIO
                     --------                -----
                     09/30/00                3.10x
                     12/31/00                2.35x
                     03/31/01                2.15x
                     06/30/01                2.25x
                     09/30/01                2.50x"

      1.16  AMENDMENT OF SECTION 8.15: MINIMUM EBITDA.

            Section 8.15 of the Credit Agreement is deleted in its entirety and
the following is substituted therefor:

                                       10
<PAGE>
            "The Company will not, as of the last day of any fiscal quarter
            specified in the table below, permit its EBITDA for the three (3)
            months then ended to be less than the amounts set forth below:

                      DATE(S)           QUARTERLY EBITDA
                     --------           ----------------
                     09/30/00            $15,750,000.00
                     12/31/00            $15,300,000.00
                     03/31/01            $13,800,000.00
                     06/30/01            $17,400,000.00
                     09/30/01           $22,450,000.00"

      1.17  ADDITION OF EXHIBIT 7.1(I): FORM OF BORROWING BASE CERTIFICATE.

            The Credit Agreement is hereby amended by adding Exhibit 7.1(i)
attached hereto as Exhibit 7.1(i) to the Credit Agreement.

      1.18  ADDITION OF EXHIBIT 8.2(D): EXCEPTED SUBSIDIARIES.

            The Credit Agreement is hereby amended by adding Exhibit 8.2(d)
attached hereto as Exhibit 8.2(d) to the Credit Agreement.

      SECTION 2.  CONDITIONS TO EFFECTIVENESS

      Section 1 of this Amendment shall become effective only upon the prior or
concurrent satisfaction of all of the following conditions precedent (the date
of satisfaction of such conditions being referred to herein as the "AMENDMENT
EFFECTIVE DATE"):

      A. On or before the Amendment Effective Date, the Company shall deliver to
the Banks (or to the Agents for the Banks) the following, each, unless otherwise
noted, dated the Amendment Effective Date:

            1. A certificate of the secretary or an assistant secretary of the
Company and of the Guarantors certifying: (i) that the resolutions of the Board
of Directors of the Company and of the Guarantors approving and authorizing the
execution, delivery, and performance of the Amended Credit Agreement and
amendments thereto delivered on the Effective Date, are in full force and effect
and have not been amended, supplemented or otherwise modified since December 14,
1998 and (ii) the signature and incumbency of the officers of each of the
Company and of the Guarantors who are authorized to sign on behalf of the
Company or such Guarantor.

                                       11
<PAGE>
            2. Counterparts of this Amendment executed by the Majority Banks and
each of the other parties hereto.

            3. Payment to each of the Banks approving this Amendment, subject to
Majority Bank approval, of an amendment fee equal to twenty one hundredths of
one percent (0.20%) of such Bank's Commitment and payment to BOT as
administrative agent of any other fees agreed upon in writing by the Company and
BOT.

      B. On or before the Amendment Effective Date, all corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Agents, acting on behalf of the Banks, and their counsel shall
be satisfactory in form and substance to the Agents and such counsel, and the
Agents and such counsel shall have received all such counterpart originals or
certified copies of such documents as the Agents may reasonably request.

      SECTION 3.  REPRESENTATIONS AND WARRANTIES

      In order to induce the Banks to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, the Company and each Guarantor
party hereto represents and warrants to each Bank that the following statements
are true, correct and complete as to itself:

      A. CORPORATE POWER AND AUTHORITY. The Company and each Guarantor party
hereto has all requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated hereby and the Company
and each Guarantor party hereto has all requisite corporate power and authority
to carry out the transactions contemplated by, and perform its obligations
under, the Amended Credit Agreement.

      B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Credit Agreement have been duly
authorized by all necessary corporate action on the part of the Company and each
Guarantor party hereto, as the case may be.

      C. NO CONFLICT. The execution and delivery by the Company and each
Guarantor party hereto of this Amendment and the performance by the Company and
each Guarantor of this Amendment and the performance by the Company of the
Amended Credit Agreement do not and will not (i) violate any provision of any
law or any governmental rule or regulation applicable to the Company or any of
its Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of the
Company or any of its Subsidiaries or any order, judgment or decree of any court
or other agency of government binding on the Company or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any material agreement (other than
failure to pay the notes evidencing the Subordinated Debt in accordance with
this Amendment) to which the Company or any of its Subsidiaries is a party or by
which it is bound or to which it is subject, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of the
Company or any of its Subsidiaries (other than any Liens created under

                                       12
<PAGE>
any of the Loan Documents in favor of the Agents on behalf of the Banks), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any material agreement to which the Company or any of its
Subsidiaries is a party or by which it is bound or to which it is subject.

      D. GOVERNMENTAL CONSENTS. The execution and delivery by the Company and
each Guarantor party hereto of this Amendment and the performance by the Company
and each Guarantor of this Amendment and the performance by the Company and each
Guarantor of the Amended Credit Agreement do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body.

      E. BINDING OBLIGATION. This Amendment has been duly executed and delivered
by the Company and each Guarantor party hereto and this Amendment and the
Amended Credit Agreement are the legally valid and binding obligations of the
Company and each Guarantor, enforceable against the Company and each Guarantor
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.

      F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM AMENDED CREDIT
AGREEMENT. The representations and warranties contained in Article VI of the
Amended Credit Agreement are and will be true, correct and complete in all
material respects on and as of the Amendment Effective Date to the same extent
as though made on and as of that date, except (i) to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date, and (ii) to the extent such representations and warranties
relate to a default of any Subordinated Debt resulting from a failure to pay the
notes evidencing such Subordinated Debt in accordance with this amendment
resulting from the Company not being in Financial Compliance.

      G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would, after giving effect to this Amendment, constitute an Event of
Default or a Default.

      SECTION 4.  ACKNOWLEDGMENT AND CONSENT

      The Company is a party to certain Collateral Documents pursuant to which
the Company has created Liens in favor of the Agents on certain Collateral to
secure the Obligations. Each of the Guarantors party hereto is a party to
certain Collateral Documents and the Guaranty, pursuant to which each such
Guarantor has (i) guarantied the Obligations and (ii) created Liens in favor of
the Administrative Agent on certain Collateral to secure the Guaranteed
Obligations of such Guarantor under the Guaranty. The Guarantors party hereto
are collectively referred to herein as the "CREDIT SUPPORT PARTIES", and the
Collateral Documents and the Guaranty are collectively referred to herein as the
"CREDIT SUPPORT DOCUMENTS".

                                       13
<PAGE>
      Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement, the Collateral Documents and the
Guaranty and this Amendment and consents to the further amendment of the Credit
Agreement effected pursuant to this Amendment. Each Credit Support Party hereby
confirms that each Credit Support Document to which it is a party or otherwise
bound and all Collateral encumbered thereby will continue to guaranty or secure,
as the case may be, to the fullest extent possible the payment and performance
of all "Obligations," "Guarantied Obligations" and "Secured Obligations," as the
case may be (in each case as such terms are defined in the applicable Credit
Support Document), including without limitation the payment and performance of
all such "Obligations," "Guarantied Obligations" or "Secured Obligations," as
the case may be, in respect of the Obligations of the Company now or hereafter
existing under or in respect of the Amended Credit Agreement and the Notes.

      Each Credit Support Party acknowledges and agrees that any of the Credit
Support Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be valid
and enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Credit Support Party represents and
warrants that all representations and warranties contained in the Amended Credit
Agreement and the other Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Amendment Effective Date to the same extent as though made on and as
of that date, except (i) to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date, and (ii)
to the extent such representations and warranties relate to a default of any
Subordinated Debt resulting from a failure to pay the notes evidencing such
Subordinated Debt in accordance with this amendment resulting from the Company
not being in Financial Compliance.

      Each Credit Support Party acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Amendment, such Credit Support
Party is not required by the terms of the Credit Agreement or any other Loan
Document to consent to the amendments to the Credit Agreement effected pursuant
to this Amendment and (ii) nothing in the Amended Credit Agreement, this
Amendment or any other Loan Document shall be deemed to require the consent of
such Credit Support Party to any future amendments to the Amended Credit
Agreement.

                                       14
<PAGE>
      SECTION 5.  MISCELLANEOUS

      A. REFERENCE TO AND EFFECT ON THE AMENDED CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.

            (i) On and after the Amendment Effective Date, each reference in the
      Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
      words of like import referring to the Credit Agreement, and each reference
      in the other Loan Documents to the "Credit Agreement", "thereunder",
      "thereof" or words of like import referring to the Credit Agreement shall
      mean and be a reference to the Amended Credit Agreement.

            (ii) Except as specifically amended by this Amendment, the Credit
      Agreement and the other Loan Documents shall remain in full force and
      effect and are hereby ratified and confirmed.

            (iii) The execution, delivery and performance of this Amendment
      shall not, except as expressly provided herein, constitute a waiver of any
      provision of, or operate as a waiver of any right, power or remedy of any
      Agent or any Bank under, the Credit Agreement or any of the other Loan
      Documents.

      B. FEES AND EXPENSES. Company acknowledges that all reasonable costs, fees
and expenses as described in Section 12.4 of the Credit Agreement incurred by
the Agents and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of the Company.

      C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

      D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

      E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than the provisions of Section 1, which
shall become effective upon the satisfaction of each of the conditions set forth
in Section 2) shall become effective upon

                                       15
<PAGE>
the execution of a counterpart hereof by the Company, the Credit Support
Parties, the Guarantors and the Majority Banks and receipt by the Company and
the Agents of written or telephonic notification of such execution and
authorization of delivery of such counterpart.

                  [Remainder of page intentionally left blank]

                                       16
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.


                                    COMPANY:

                                    COMFORT SYSTEMS USA, INC.


                                    By:
                                       ---------------------------------
                                            J. Gordon Beittenmiller
                                           Senior Vice President and
                                            Chief Financial Officer

                                       17

<PAGE>
                             CREDIT SUPPORT PARTIES AND GUARANTORS:

                                    ADAMS MECHANICAL SERVICES, INC.
                                    ACCURATE AIR SYSTEMS, INC.
                                    AIR POWER SYSTEMS, INC.
                                    ALLSTATE MECHANICAL, INC.
                                    ATLAS AIR CONDITIONING COMPANY
                                    ATLAS COMFORT SERVICES USA, INC.
                                    BATCHELOR'S MECHANICAL CONTRACTORS, INC.
                                    BCM CONTROLS CORPORATION
                                    CEL, INC.
                                    CONTRACT SERVICE, INC.
                                    DESIGN MECHANICAL INCORPORATED
                                    DYNASTAR, INC.
                                    EASTERN HEATING & COOLING, INC.
                                    EASTERN REFRIGERATION CO., INC.
                                    EDS, INC.
                                    F&G MECHANICAL CORPORATION
                                    FRED HAYES MECHANICAL CONTRACTORS, INC.
                                    FREEWAY HEATING & AIR CONDITIONING, INC.
                                    GMS AIR CONDITIONING, INC.
                                    HELM CORPORATION
                                    HILLCREST SHEET METAL, INC.
                                    JAMES AIR CONDITIONING ENTERPRISES, INC.
                                    KUEMPEL SERVICE, INC.
                                    LAWRENCE SERVICE, INC.
                                    LOWRIE ELECTRIC CO., INC.
                                    MANDELL MECHANICAL CORPORATION
                                    MARTIN HEATING, INC.
                                    MEADOWLANDS FIRE PROTECTION CORP.
                                    MECHANICAL SERVICE GROUP, INC.
                                    MJ MECHANICAL SERVICES, INC.
                                    NOGLE & BLACK MECHANICAL, INC.
                                    NORTH JERSEY MECHANICAL CONTRACTORS, INC.
                                    OK SHEET METAL & AIR CONDITIONING, INC.
                                    QUALITY AIR HEATING & COOLING, INC.

                                       18
<PAGE>
                                    RHC ACQUISITION CORP.
                                    RIVER CITY MECHANICAL, INC.
                                    SALMON & ALDER, INC.
                                    SEASONAIR, INC.
                                    S&K AIR CONDITIONING CO., INC.
                                    S.M. LAWRENCE COMPANY, INC.
                                    STANDARD HEATING & AIR CONDITIONING
                                     COMPANY
                                    TECH HEATING AND AIR CONDITIONING, INC.
                                    TECH MECHANICAL, INC.
                                    TEMP-RIGHT SERVICE, INC.
                                    TRI-CITY MECHANICAL, INC.
                                    TROOST SERVICE CO.
                                    WALKER-J-WALKER, INC.
                                    WESTERN BUILDING SERVICES, INC.

                                    By:
                                          -----------------------------------
                                                  J. Gordon Beittenmiller
                                                    Vice President

                                       19
<PAGE>
AMOUNT OF COMMITMENT:               ADMINISTRATIVE AGENT/BANK:

$42,000,000.00                      BANK ONE, TEXAS, N.A.,
                                    AS ADMINISTRATIVE AGENT AND INDIVIDUALLY
                                    AS A BANK



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       20
<PAGE>
AMOUNT OF COMMITMENT:               SYNDICATION AGENT/BANK:

$32,666,667.00                      BANKERS TRUST COMPANY,
                                    AS SYNDICATION AGENT AND INDIVIDUALLY AS A
                                    BANK



                                    By:
                                        --------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       21
<PAGE>
AMOUNT OF COMMITMENT:               DOCUMENTATION AGENT/BANK:

$39,666,667.00                      BANK OF AMERICA, N.A. (FORMERLY KNOWN AS
                                    NATIONSBANK, N.A.), AS DOCUMENTATION AGENT
                                    AND INDIVIDUALLY, AS A BANK



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------
                                       22

<PAGE>
AMOUNT OF COMMITMENT:               CO-AGENT/BANK:

$23,333,333.00                      CREDIT LYONNAIS NEW YORK BRANCH,
                                    AS CO-AGENT AND INDIVIDUALLY, AS A BANK



                                    By:
                                        --------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       23
<PAGE>
AMOUNT OF COMMITMENT:               CO-AGENT/BANK:

$23,333,333.00                      NATIONAL CITY BANK,
                                    AS CO-AGENT AND INDIVIDUALLY, AS A BANK



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       24
<PAGE>
AMOUNT OF COMMITMENT:               CO-AGENT/BANK:

$23,333,333.00                      THE BANK OF NOVA SCOTIA, AS CO-AGENT AND
                                    INDIVIDUALLY, AS A BANK



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       25
<PAGE>
AMOUNT OF COMMITMENT:               BANK:

$18,666,667.00                      UNION BANK OF CALIFORNIA, N.A.



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------


                                       26
<PAGE>
AMOUNT OF COMMITMENT:               BANK:

$14,000,000.00                      COMERICA BANK



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------


                                       27
<PAGE>
AMOUNT OF COMMITMENT:               BANK:

$4,666,667.00                       BANK POLSKA, KASA OPIEKI S.A., PEKOA S.A.
                                      GROUP, NEW YORK BRANCH



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       28
<PAGE>
AMOUNT OF COMMITMENT:               BANK:

$28,000,000.00                      FIRSTAR BANK, NATIONAL ASSOCIATION



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       29
<PAGE>
AMOUNT OF COMMITMENT:               BANK:

$18,666,667.00                      LASALLE BANK NATIONAL ASSOCIATION



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       30
<PAGE>
AMOUNT OF COMMITMENT:               BANK:

$11,666,667.00                      GENERAL ELECTRIC CAPITAL
                                    CORPORATION



                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------

                                       31
<PAGE>
                                EXHIBIT 7.1(i)
                          BORROWING BASE CERTIFICATE


      The undersigned hereby certifies that the undersigned is the
___________________ of COMFORT SYSTEMS USA, INC., a Delaware corporation (the
"COMPANY"), and that such officer is authorized to execute this Borrowing Base
Certificate on behalf of the Company pursuant to the Third Amended and Restated
Credit Agreement dated as of December 14, 1998 (as it may be amended,
supplemented or restated from time to time, the "AGREEMENT"), by and among the
Company, BANK ONE, TEXAS, N.A., as Agent, and the other parties thereto. The
undersigned further certifies, represents and warrants that to the knowledge of
such officer, after due inquiry, that SCHEDULE 1 attached hereto has been duly
completed and is true and correct in all respects.


      Dated ________________________, 200__.


                                     COMFORT SYSTEMS USA, INC.


                                    By:
                                       ---------------------------------
                                    Name:
                                          ------------------------------
                                    Title:
                                           -----------------------------
<PAGE>
                          SCHEDULE 1 TO EXHIBIT 7.1(I)


                          BORROWING BASE CALCULATION


As of _________________, 200___ :

Eligible Accounts Receivable                    $
                                                  -----------

                                                  x 80% equals

Borrowing Base                                               $
                                                               ===========
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                               DEC-31-2000
<PERIOD-END>                                    SEP-30-2000
<CASH>                                                7,700
<SECURITIES>                                              0
<RECEIVABLES>                                       368,434
<ALLOWANCES>                                          7,917
<INVENTORY>                                          19,908
<CURRENT-ASSETS>                                    472,165
<PP&E>                                              106,496
<DEPRECIATION>                                      (60,236)
<TOTAL-ASSETS>                                      981,331
<CURRENT-LIABILITIES>                               274,041
<BONDS>                                             283,256
<PREFERRED-MANDATORY>                                     0
<PREFERRED>                                               0
<COMMON>                                                393
<OTHER-SE>                                          416,309
<TOTAL-LIABILITY-AND-EQUITY>                        981,331
<SALES>                                           1,191,458
<TOTAL-REVENUES>                                  1,191,458
<CGS>                                               978,869
<TOTAL-COSTS>                                       978,869
<OTHER-EXPENSES>                                    190,304
<LOSS-PROVISION>                                      3,864
<INTEREST-EXPENSE>                                   19,900
<INCOME-PRETAX>                                       (318)
<INCOME-TAX>                                            268
<INCOME-CONTINUING>                                   (586)
<DISCONTINUED>                                            0
<EXTRAORDINARY>                                           0
<CHANGES>                                                 0
<NET-INCOME>                                          (586)
<EPS-BASIC>                                          (0.02)
<EPS-DILUTED>                                        (0.02)


</TABLE>
</TEXT>
</DOCUMENT>
</SUBMISSION>
