<SUBMISSION>
<ACCESSION-NUMBER>0000950129-02-004086
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20020630
<FILING-DATE>20020813
<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>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-13011
<FILM-NUMBER>02730858
</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>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>h98970e10vq.txt
<DESCRIPTION>COMFORT SYSTEMS USA, INC. - PERIOD JUNE 30, 2002
<TEXT>
<PAGE>

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

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                                   FORM 10-Q

<Table>
<C>          <S>
 (Mark One)
    [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934



             FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002



                                   OR




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



             FOR THE TRANSITION PERIOD FROM           TO
</Table>

                        COMMISSION FILE NUMBER: 1-13011

                           COMFORT SYSTEMS USA, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                   DELAWARE                                      76-0526487
         (State or other jurisdiction                         (I.R.S. Employer
      of incorporation or organization)                     Identification No.)
</Table>

                             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 August
12, 2002 was 37,834,219.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                           COMFORT SYSTEMS USA, INC.

                               INDEX TO FORM 10-Q
                      FOR THE QUARTER ENDED JUNE 30, 2002

<Table>
<Caption>
                                                                        PAGE
                                                                        ----
<S>       <C>                                                           <C>
                                   PART I

                           FINANCIAL INFORMATION
Item
  1 --    Financial Statements
          COMFORT SYSTEMS USA, INC.
            Consolidated Balance Sheets...............................    2
            Consolidated Statements of Operations.....................    3
            Consolidated Statements of Stockholders' Equity...........    4
            Consolidated Statements of Cash Flows.....................    5
            Condensed Notes to Consolidated Financial Statements......    6
Item
  2 --    Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................   17
Item
  3 --    Quantitative and Qualitative Disclosures about Market
          Risk........................................................   26

                                  PART II

                             OTHER INFORMATION
Item
  1 --    Legal Proceedings...........................................   27
Item
  2 --    Recent Sales of Unregistered Securities.....................   27
Item
  4 --    Submission of Matters to a Vote of Security Holders.........   27
Item
  6 --    Exhibits and Reports on Form 8-K............................   28
Signatures............................................................   29
</Table>

                                        1
<PAGE>

                           COMFORT SYSTEMS USA, INC.

                          CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<Table>
<Caption>
                                                              DECEMBER 31,    JUNE 30,
                                                                  2001          2002
                                                              ------------   -----------
                                                                             (UNAUDITED)
<S>                                                           <C>            <C>
                                         ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................    $  3,924      $  12,624
  Accounts receivable, less allowance of $9,633 and
     $6,111.................................................     175,028        175,778
  Other receivables.........................................       5,572          3,136
  Inventories...............................................      14,553         13,170
  Prepaid expenses and other................................      13,174          9,783
  Costs and estimated earnings in excess of billings........      19,384         20,283
  Assets related to discontinued operations.................     327,820          1,458
                                                                --------      ---------
          Total current assets..............................     559,455        236,232
PROPERTY AND EQUIPMENT, net.................................      18,812         17,314
GOODWILL....................................................     297,033        113,427
OTHER NONCURRENT ASSETS.....................................       1,325         14,389
                                                                --------      ---------
          Total assets......................................    $876,625      $ 381,362
                                                                ========      =========

                          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt......................    $     73      $  12,991
  Current maturities of notes to affiliates and former
     owners.................................................       2,374         16,251
  Accounts payable..........................................      57,489         62,647
  Accrued compensation and benefits.........................      23,611         19,813
  Billings in excess of costs and estimated earnings........      26,663         29,071
  Income taxes payable......................................       5,606         12,373
  Other current liabilities.................................      23,468         25,748
  Liabilities related to discontinued operations............     140,746            224
                                                                --------      ---------
          Total current liabilities.........................     280,030        179,118
LONG-TERM DEBT, NET OF CURRENT MATURITIES...................     164,012            426
NOTES TO AFFILIATES AND FORMER OWNERS, NET OF CURRENT
  MATURITIES................................................      15,569             --
OTHER LONG-TERM LIABILITIES.................................       3,193            273
                                                                --------      ---------
          Total liabilities.................................     462,804        179,817
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, 1,749,334 and 1,437,819 shares,
     respectively...........................................     (10,924)        (8,804)
  Additional paid-in capital................................     340,186        339,208
  Deferred compensation.....................................          --           (932)
  Retained earnings (deficit)...............................      84,166       (128,320)
                                                                --------      ---------
          Total stockholders' equity........................     413,821        201,545
                                                                --------      ---------
          Total liabilities and stockholders' equity........    $876,625      $ 381,362
                                                                ========      =========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        2
<PAGE>

                           COMFORT SYSTEMS USA, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<Table>
<Caption>
                                                         THREE MONTHS ENDED      SIX MONTHS ENDED
                                                              JUNE 30,               JUNE 30,
                                                         -------------------   --------------------
                                                           2001       2002       2001       2002
                                                         --------   --------   --------   ---------
<S>                                                      <C>        <C>        <C>        <C>
REVENUES...............................................  $227,667   $211,900   $430,559   $ 401,362
COST OF SERVICES.......................................   184,523    173,166    351,067     332,175
                                                         --------   --------   --------   ---------
    Gross profit.......................................    43,144     38,734     79,492      69,187
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES...........    35,553     30,554     70,922      62,983
GOODWILL AMORTIZATION..................................     2,057         --      4,114          --
RESTRUCTURING CHARGES..................................        --         --        238       1,878
                                                         --------   --------   --------   ---------
    Operating income...................................     5,534      8,180      4,218       4,326
OTHER INCOME (EXPENSE):
  Interest income......................................        15          8         51          38
  Interest expense.....................................    (2,536)    (1,102)    (4,973)     (3,001)
  Other................................................       236        804        322       1,114
                                                         --------   --------   --------   ---------
    Other income (expense).............................    (2,285)      (290)    (4,600)     (1,849)
                                                         --------   --------   --------   ---------
INCOME (LOSS) BEFORE INCOME TAXES......................     3,249      7,890       (382)      2,477
INCOME TAX EXPENSE.....................................     2,032      2,692        710       1,173
                                                         --------   --------   --------   ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS...............     1,217      5,198     (1,092)      1,304
DISCONTINUED OPERATIONS:
  Operating income (loss), net of applicable income tax
    benefit (expense) of $(1,504), $141, $(3,829) and
    $1,922.............................................     2,074       (261)     5,483        (113)
  Estimated loss on disposition, including income tax
    benefit (expense) of $91 and $(25,887).............        --       (169)        --     (11,156)
                                                         --------   --------   --------   ---------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN
  ACCOUNTING PRINCIPLE.................................     3,291      4,768      4,391      (9,965)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE,
  NET OF INCOME TAX BENEFIT OF $26,317.................        --         --         --    (202,521)
                                                         --------   --------   --------   ---------
NET INCOME (LOSS)......................................  $  3,291   $  4,768   $  4,391   $(212,486)
                                                         ========   ========   ========   =========
INCOME (LOSS) PER SHARE:
  Basic --
    Income (loss) from continuing operations...........  $   0.03   $   0.14   $  (0.03)  $    0.03
    Discontinued operations --
       Income (loss) from operations...................      0.06      (0.01)      0.15          --
       Estimated loss on disposition...................        --         --         --       (0.30)
    Cumulative effect of change in accounting
       principle.......................................        --         --         --       (5.37)
                                                         --------   --------   --------   ---------
    Net income (loss)..................................  $   0.09   $   0.13   $   0.12   $   (5.64)
                                                         ========   ========   ========   =========
  Diluted --
    Income (loss) from continuing operations...........  $   0.03   $   0.13   $  (0.03)  $    0.03
    Discontinued operations --
       Income (loss) from operations...................      0.06      (0.01)      0.15          --
       Estimated loss on disposition...................        --         --         --       (0.29)
    Cumulative effect of change in accounting
       principle.......................................        --         --         --       (5.30)
                                                         --------   --------   --------   ---------
    Net income (loss)..................................  $   0.09   $   0.12   $   0.12   $   (5.56)
                                                         ========   ========   ========   =========
SHARES USED IN COMPUTING INCOME (LOSS) PER SHARE:
       Basic...........................................    37,381     37,839     37,383      37,687
                                                         ========   ========   ========   =========
       Diluted.........................................    37,431     38,476     37,383      38,237
                                                         ========   ========   ========   =========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        3
<PAGE>

                           COMFORT SYSTEMS USA, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<Table>
<Caption>
                                    COMMON STOCK          TREASURY STOCK       ADDITIONAL   DEFERRED    RETAINED        TOTAL
                                 -------------------   ---------------------    PAID-IN      COMPEN-    EARNINGS    STOCKHOLDERS'
                                   SHARES     AMOUNT     SHARES      AMOUNT     CAPITAL      SATION     (DEFICIT)      EQUITY
                                 ----------   ------   ----------   --------   ----------   ---------   ---------   -------------
<S>                              <C>          <C>      <C>          <C>        <C>          <C>         <C>         <C>
BALANCE AT DECEMBER 31, 2000...  39,258,913    $393    (2,002,629)  $(13,119)   $341,923      $  --     $  71,042     $ 400,239
  Issuance of Treasury Stock:
    Issuance of Employee Stock
       Purchase Plan shares....          --      --       398,287      2,570      (1,737)        --            --           833
  Shares received from sale of
    businesses.................          --      --      (144,992)      (375)         --         --            --          (375)
  Net income...................          --      --            --         --          --         --        13,124        13,124
                                 ----------    ----    ----------   --------    --------      -----     ---------     ---------
BALANCE AT DECEMBER 31, 2001...  39,258,913     393    (1,749,334)   (10,924)    340,186         --        84,166       413,821
  Issuance of Treasury Stock:
    Issuance of shares for
       options exercised
       (unaudited).............          --      --       220,746      1,368        (733)        --            --           635
    Issuance of restricted
       stock (unaudited).......          --      --       200,000      1,239        (413)      (826)           --            --
  Shares exchanged in repayment
    of notes receivable
    (unaudited)................          --      --       (49,051)      (204)         --         --            --          (204)
  Shares received from sale of
    business (unaudited).......          --      --       (55,882)      (263)         --         --            --          (263)
  Shares received from
    settlement with former
    owner (unaudited)..........          --      --        (4,298)       (20)         --         --            --           (20)
  Amortization of deferred
    compensation (unaudited)...          --      --            --         --         168       (106)           --            62
  Net loss (unaudited).........          --      --            --         --          --         --      (212,486)     (212,486)
                                 ----------    ----    ----------   --------    --------      -----     ---------     ---------
BALANCE AT JUNE 30, 2002
  (unaudited)..................  39,258,913    $393    (1,437,819)  $ (8,804)   $339,208      $(932)    $(128,320)    $ 201,545
                                 ==========    ====    ==========   ========    ========      =====     =========     =========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        4
<PAGE>

                           COMFORT SYSTEMS USA, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<Table>
<Caption>
                                                                SIX MONTHS ENDED
                                                                    JUNE 30,
                                                              ---------------------
                                                                2001        2002
                                                              ---------   ---------
<S>                                                           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...........................................  $   4,391   $(212,486)
Adjustments to reconcile net income (loss) to net cash
  provided by operating activities --
  Cumulative effect of change in accounting principle.......         --     202,521
  Estimated loss on disposition of discontinued
     operations.............................................         --      11,156
  Restructuring charges.....................................        238       1,878
  Depreciation and amortization expense.....................     11,942       3,875
  Bad debt expense..........................................      2,783       2,531
  Deferred tax expense......................................      2,449       1,726
  Gain on sale of assets....................................       (129)       (901)
  Deferred compensation expense.............................         --          62
  Changes in operating assets and liabilities --
     (Increase) decrease in --
       Receivables, net.....................................      6,069       6,512
       Inventories..........................................        112       1,377
       Prepaid expenses and other current assets............      1,075       4,440
       Costs and estimated earnings in excess of billings...     (1,834)     (3,228)
       Other noncurrent assets..............................     (1,069)        426
     Increase (decrease) in --
       Accounts payable and accrued liabilities.............     (4,839)    (21,668)
       Billings in excess of costs and estimated earnings...     11,229       3,451
       Other, net...........................................       (411)         21
                                                              ---------   ---------
     Net cash provided by operating activities..............     32,006       1,693
                                                              ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment.......................     (3,148)     (3,070)
  Proceeds from sales of property and equipment.............        354       1,134
  Proceeds from businesses sold, net of cash sold and
     transaction costs......................................        954     154,565
                                                              ---------   ---------
     Net cash provided by (used in) investing activities....     (1,840)    152,629
                                                              ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on long-term debt................................   (130,310)   (240,622)
  Borrowings of long-term debt..............................    100,709      87,664
  Proceeds from issuance of common stock....................        566          --
  Proceeds from exercise of options.........................         --         635
                                                              ---------   ---------
     Net cash used in financing activities..................    (29,035)   (152,323)
                                                              ---------   ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS...................      1,131       1,999
CASH AND CASH EQUIVALENTS, beginning of period -- continuing
  operations and discontinued operations....................     16,021      10,625
                                                              ---------   ---------
CASH AND CASH EQUIVALENTS, end of period....................  $  17,152   $  12,624
                                                              =========   =========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        5
<PAGE>

                           COMFORT SYSTEMS USA, INC.

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 JUNE 30, 2002
                                  (UNAUDITED)

1.  BUSINESS AND ORGANIZATION

     Comfort Systems USA, Inc., a Delaware corporation ("Comfort Systems" and
collectively with its subsidiaries, the "Company"), is a national provider of
comprehensive heating, ventilation and air conditioning ("HVAC") installation,
maintenance, repair and replacement services within the mechanical services
industry. The Company operates primarily in the commercial and industrial HVAC
markets, and performs most of its services within office buildings, retail
centers, apartment complexes, manufacturing plants, and healthcare, education
and government facilities. In addition to standard HVAC services, the Company
provides specialized applications such as building automation control systems,
fire protection, process cooling, electronic monitoring and process piping.
Certain locations also perform related services such as electrical and plumbing.
Approximately 55% of the Company's consolidated 2002 revenues were attributable
to installation of systems in newly constructed facilities, with the remaining
45% attributable to maintenance, repair and replacement services. The Company's
consolidated 2002 revenues related to the following service activities:
HVAC-73%, plumbing-12%, building automation control systems-5%, electrical-2%,
fire protection-1% and other-7%. These service activities are within the
mechanical services industry which is the single industry segment served by
Comfort Systems.

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, 2001 (the "Form 10-K").

     The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 142, "Goodwill and Other Intangible Assets," which is discussed in Note 4
and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," which is discussed in Note 3 during the first quarter of 2002. There
were no other significant changes in the accounting policies of the Company
during the period. 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 assets and liabilities,
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The most
significant estimates used in the Company's financial statements include revenue
and cost recognition for construction contracts, allowance for doubtful accounts
and self-insurance accruals.

                                        6
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  CASH FLOW INFORMATION

     Cash paid for interest for the six months ended June 30, 2001 and 2002 was
approximately $11.6 million and $3.7 million, respectively. Cash paid for income
taxes for the six months ended June 30, 2001 and 2002 was approximately $2.1
million and $7.6 million, respectively.

  NEW ACCOUNTING PRONOUNCEMENTS

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 establishes new
accounting and reporting requirements for goodwill and other intangible assets.
The Company adopted this new standard effective January 1, 2002. See Note 4 for
further discussion.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." The Company adopted SFAS No. 144
effective January 1, 2002. Under SFAS No. 144, the operating results of
companies sold or held for sale meeting certain criteria, as well as any gain or
loss on the sale of these operations, are presented as discontinued operations
in the Company's statements of operations. See Note 3 for a discussion of the
Company's discontinued operations. The operating results for companies which
were sold or shut down during 2001 are presented as continuing operations
through the date of disposition. The adoption of SFAS No. 144 did affect the
presentation of discontinued operations in the consolidated financial
statements; however, it did not have a material financial impact on the
Company's results of operations, financial position or cash flows.

  SEGMENT DISCLOSURE

     Comfort Systems' activities are within the mechanical services industry
which is the single industry segment served by the Company. Under SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information," each
operating subsidiary represents an operating segment and these segments have
been aggregated, as no individual operating unit is material and the operating
units meet a majority of SFAS No. 131's aggregation criteria.

  RECLASSIFICATIONS

     Certain reclassifications have been made in prior period financial
statements to conform to current period presentation. These reclassifications
have not resulted in any changes to previously reported net income for any
periods.

3.  DISCONTINUED OPERATIONS

     On February 11, 2002, the Company entered into an agreement with Emcor
Group, Inc. ("Emcor") to sell 19 operations. This transaction closed on March 1,
2002. Under the terms of the agreement, the total purchase price was $186.25
million, including the assumption by Emcor of approximately $22.1 million of
subordinated notes to former owners of certain of the divested companies.

     The transaction with Emcor provided for a post-closing adjustment based on
a final accounting, done after the closing of the transaction, of the net assets
of the operations that were sold to Emcor. That accounting indicated that the
net assets transferred to Emcor were approximately $7 million greater than a
target amount that had been agreed to with Emcor. In accordance with the
transaction agreement, Emcor paid the Company that amount, and released $2.5
million that had been escrowed in connection with this element of the
transaction. The total of these two amounts, $9.5 million, was reflected as a
receivable in the Company's March 31, 2002 financial statements. The Company
received this payment during the second quarter.

                                        7
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     An additional $5 million of Emcor's purchase price was deposited into an
escrow account to secure potential obligations on the Company's part to
indemnify Emcor for future claims and contingencies arising from events and
circumstances prior to closing, all as specified in the transaction documents.
Because these escrow funds secure future claims and contingencies, the Company
does not know whether it will ultimately receive any of such funds, and if it
does, how much it will receive. Therefore, the Company has not recognized a
receivable for this escrowed portion of the Emcor transaction purchase price. If
the Company ultimately receives any of these escrowed funds, a corresponding
gain will be recorded as a component of discontinued operations when received.

     The net cash proceeds of approximately $164 million received to date from
the Emcor transaction have been used to reduce debt outstanding under the
Company's credit facility. An estimated tax liability of $16 million related to
this transaction was recorded at March 31, 2002 and is due in March 2003.

     Under SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," which took effect for the Company on January 1, 2002, the
operating results of the companies sold to Emcor as well as the loss on the sale
of these operations have been presented as discontinued operations in the
Company's statements of operations. The Company realized a loss of $10.6 million
including related tax expense related to the sale of these operations. As a
result of the adoption of SFAS No. 142, "Goodwill and Other Intangible Assets,"
the Company also recognized a goodwill impairment charge related to these
operations of $32.4 million, net of taxes, as of January 1, 2002. The reporting
of the Company's aggregate goodwill impairment charge in connection with
adopting SFAS No. 142 is discussed further in Note 4.

     In March 2002, the Company also decided to divest of an additional
operating company. This unit's operating loss for the first two quarters of 2002
of $0.1 million, net of taxes, has been reported in discontinued operations
under "Operating income (loss), net of applicable income taxes" in the Company's
statement of operations. In addition, an estimate of the loss the Company will
realize upon divestiture of this operation of $0.6 million has been included in
"Estimated loss on disposition, including income taxes" during the first quarter
of 2002 in the Company's statement of operations.

     During the second quarter of 2002, the Company sold a division of one of
its operations. The operating loss for this division for the first two quarters
of 2002 of $0.3 million, net of taxes, has been reported in discontinued
operations under "Operating income (loss), net of applicable income taxes" in
the Company's statement of operations. The Company realized a loss of $0.3
million on the sale of this division which is included in "Estimated loss on
disposition, including income taxes" during the second quarter of 2002 in the
Company's statement of operations.

                                        8
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Assets and liabilities related to discontinued operations were as follows (in
thousands):

<Table>
<Caption>
                                                              DECEMBER 31,     JUNE 30,
                                                                  2001           2002
                                                              ------------   ------------
<S>                                                           <C>            <C>
Accounts receivable, net....................................    $140,768       $    564
Other current assets........................................      30,477            772
Property and equipment, net.................................      13,968            122
Goodwill, net...............................................     141,415             --
Other noncurrent assets.....................................       1,192             --
                                                                --------       --------
     Total assets...........................................    $327,820       $  1,458
                                                                ========       ========
Current maturities of debt and notes........................    $  1,262       $     --
Accounts payable............................................      44,077            182
Other current liabilities...................................      68,676             42
Long-term debt and notes....................................      21,842             --
Other long-term liabilities.................................       4,889             --
                                                                --------       --------
     Total liabilities......................................    $140,746       $    224
                                                                ========       ========
</Table>

     Revenues and pre-tax income (loss) related to discontinued operations were
as follows (in thousands):

<Table>
<Caption>
                                                               SIX MONTHS ENDED
                                                                   JUNE 30,
                                                              ------------------
                                                                2001      2002
                                                              --------   -------
<S>                                                           <C>        <C>
Revenues....................................................  $329,710   $97,784
Pre-tax income (loss).......................................  $  9,312   $(2,035)
</Table>

4.  GOODWILL

     Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and
Other Intangible Assets." SFAS No. 142 requires companies to assess goodwill
asset amounts for impairment each year, and more frequently if circumstances
suggest an impairment may have occurred. In addition to discontinuing the
regular charge, or amortization, of goodwill against income, the new standard
also introduces more rigorous criteria for determining how much goodwill should
be reflected as an asset in a company's balance sheet.

     To perform the transitional impairment testing required by SFAS No. 142
under its new, more rigorous impairment criteria, the Company broke its
operations into "reporting units," as prescribed by the new standard, and tested
each of these reporting units for impairment by comparing the unit's fair value
to its carrying value. The fair value of each reporting unit was estimated using
a discounted cash flow model combined with market valuation approaches.
Significant estimates and assumptions were used in assessing the fair value of
reporting units. These estimates and assumptions involved future cash flows,
growth rates, discount rates, weighted average cost of capital and estimates of
market valuations for each of the reporting units.

     As provided by SFAS No. 142, the transitional impairment loss identified by
applying the standard's new, more rigorous valuation methodology upon initial
adoption of the standard was reflected as a cumulative effect of a change in
accounting principle in the Company's statement of operations. The resulting
non-cash charge was $202.5 million, net of taxes. Impairment charges recognized
after the initial adoption, if any, generally are to be reported as a component
of operating income.

                                        9
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The changes in the carrying amount of goodwill for the six months ended
June 30, 2002 are as follows (in thousands):

<Table>
<S>                                                           <C>
Goodwill balance as of January 1, 2002(a)...................  $ 438,448
Impairment adjustment.......................................   (228,838)
Goodwill related to sale of operations......................    (96,183)
                                                              ---------
Goodwill balance as of June 30, 2002........................  $ 113,427
                                                              =========
</Table>

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

(a)  A portion of this goodwill balance is included in assets related to
     discontinued operations in the Company's consolidated balance sheet.

     The unaudited results of operations presented below (in thousands) for the
three months and six months ended June 30, 2001 and 2002 reflect the adoption of
the non-amortization provisions of SFAS No. 142 effective January 1, 2001 and
exclude the impact of the cumulative effect of change in accounting principle
recorded in the first quarter of 2002. Therefore, the component of the
cumulative effect of change in accounting principle related to the operations
sold to Emcor is included in the estimated loss on disposition for purposes of
this table.

<Table>
<Caption>
                                               THREE MONTHS ENDED    SIX MONTHS ENDED
                                                    JUNE 30,             JUNE 30,
                                               ------------------   ------------------
                                                2001       2002      2001       2002
                                               -------   --------   -------   --------
<S>                                            <C>       <C>        <C>       <C>
Income (loss) from continuing operations.....  $ 1,217   $  5,198   $(1,092)  $  1,304
Add: Goodwill amortization, net of tax.......    1,895         --     3,790         --
                                               -------   --------   -------   --------
Adjusted income from continuing operations...    3,112      5,198     2,698      1,304
Discontinued operations --
Operating income (loss), net of tax..........    2,074       (261)    5,483       (113)
Add: Goodwill amortization, net of tax.......      758         --     1,516         --
                                               -------   --------   -------   --------
Adjusted operating income (loss), net of
  tax........................................    2,832       (261)    6,999       (113)
Estimated loss on disposition, including
  tax........................................       --     (1,571)       --    (45,124)
                                               -------   --------   -------   --------
Adjusted net income (loss)...................  $ 5,944   $  3,366   $ 9,697   $(43,933)
                                               =======   ========   =======   ========
Adjusted income (loss) per share:
  Basic --
     Income from continuing operations.......  $  0.08   $   0.14   $  0.07   $   0.03
     Discontinued operations --
       Income (loss) from operations.........     0.08      (0.01)     0.19         --
       Estimated loss on disposition.........       --      (0.04)       --      (1.20)
                                               -------   --------   -------   --------
     Net income (loss).......................  $  0.16   $   0.09   $  0.26   $  (1.17)
                                               =======   ========   =======   ========
  Diluted --
     Income from continuing operations.......  $  0.08   $   0.14   $  0.07   $   0.03
     Discontinued operations --
       Income (loss) from operations.........     0.08      (0.01)     0.19         --
       Estimated loss on disposition.........       --      (0.04)       --      (1.18)
                                               -------   --------   -------   --------
     Net income (loss).......................  $  0.16   $   0.09   $  0.26   $  (1.15)
                                               =======   ========   =======   ========
</Table>

                                        10
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5.  RESTRUCTURING CHARGES

     During the first quarter of 2002, the Company recorded restructuring
charges of approximately $1.9 million. These charges included approximately $0.8
million for severance costs primarily associated with the reduction in corporate
overhead in light of the Company's smaller size following the Emcor transaction.
The severance costs related to the termination of 33 employees, all of whom were
terminated as of March 31, 2002. In addition, these charges include
approximately $0.7 million for costs associated with decisions to merge or close
three smaller divisions and realign regional operating management. These
restructuring charges are primarily cash obligations but did include
approximately $0.3 million of non-cash writedowns associated with long-lived
assets.

     During the first quarter of 2001, the Company recorded restructuring
charges of approximately $0.2 million, primarily related to contractual
severance obligations of two operating presidents in connection with the
Company's significant restructuring program in the second half of 2000. These
restructuring charges are net of a gain of approximately $0.1 million related to
management's decision to sell a small operation during the first quarter of
2001.

     During the second half of 2000, the Company recorded restructuring charges
of approximately $25.3 million primarily associated with restructuring efforts
at certain underperforming operations. Management performed an extensive review
of its operations during the second half of 2000 and as part of this review
management decided to cease operating at three locations, sell four operations
(including two smaller satellite operations), and merge two companies into other
operations. The restructuring charges were primarily non-cash and included
goodwill impairments of approximately $11.5 million and the writedown of other
long-lived assets of approximately $8.5 million. The remaining items in these
restructuring charges primarily included severance and lease termination costs.

     Aggregated financial information for 2001 related to the operations
addressed by the 2000 and 2001 restructuring charges is as follows (in
thousands):

<Table>
<Caption>
                                                              SIX MONTHS ENDED
                                                               JUNE 30, 2001
                                                              ----------------
<S>                                                           <C>
Revenues....................................................      $ 4,715
Operating loss..............................................      $(1,937)
</Table>

     The following table shows the remaining liabilities associated with the
cash portion of the restructuring charges as of June 30, 2002 (in thousands):

<Table>
<Caption>
                                               BALANCE AT                          BALANCE AT
                                               JANUARY 1,                           JUNE 30,
                                                  2002      ADDITIONS   PAYMENTS      2002
                                               ----------   ---------   --------   ----------
<S>                                            <C>          <C>         <C>        <C>
Severance....................................    $  210      $  846     $(1,015)     $   41
Lease termination costs and other............     1,148         704        (591)      1,261
                                                 ------      ------     -------      ------
Total........................................    $1,358      $1,550     $(1,606)     $1,302
                                                 ======      ======     =======      ======
</Table>

                                        11
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6.  LONG-TERM DEBT OBLIGATIONS

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

<Table>
<Caption>
                                                              DECEMBER 31,     JUNE 30,
                                                                  2001           2002
                                                              ------------   ------------
                                                                             (UNAUDITED)
<S>                                                           <C>            <C>
Revolving credit facility...................................    $163,700       $ 12,900
Notes to affiliates and former owners.......................      17,943         16,251
Other.......................................................         385            517
                                                                --------       --------
     Total debt.............................................     182,028         29,668
     Less: current maturities...............................       2,447         29,242
                                                                --------       --------
                                                                $179,581       $    426
                                                                ========       ========
</Table>

  REVOLVING CREDIT FACILITY

     The Company's principal current debt financing and operating liquidity is
provided by a revolving credit facility (the "Credit Facility" or the
"Facility") with Bank One, Texas, N.A. ("Bank One") and other banks (including
Bank One, the "Bank Group"). The Facility's general terms allow for the Company
to borrow up to the lesser of $100 million or 80% of accounts receivable, net of
reserves ("Net Receivables"). Borrowings under the Facility are also effectively
limited by a requirement that they not result in the Company's ratios of
earnings before interest, taxes, depreciation and amortization ("EBITDA") to
interest expense and debt to EBITDA exceeding certain levels. Based on the most
restrictive of these ratio-related limits, effective borrowing capacity under
the Facility is currently $70.4 million. 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 January 1, 2003, 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 London Interbank Offered Rates or
"LIBOR") plus 2.5% to 3.5%. The additional margin for both options depends on
the ratio of the Company's debt to 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 and the repurchase of
shares 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 subordinate debt. The Credit Facility also
contains covenants providing 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.

     In the fourth quarter of 2001, the Company estimated and recorded an
allowance of $3.5 million against its receivables with the Kmart Corporation
based on Kmart's bankruptcy filing in January 2002. Including this reserve, the
Company's fourth quarter 2001 EBITDA did not meet the Facility's minimum EBITDA
covenant. The Bank Group agreed to exclude the Kmart reserve from covenant
calculations. In addition, the Company's first quarter 2002 EBITDA did not meet
the Facility's minimum EBITDA covenant. The Bank Group waived that covenant
violation. As a result, the Company has no unresolved covenant violations under
the Facility.

                                        12
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     As a result of its substantial reduction in debt following the Emcor
transaction, the Company currently complies with the Facility's debt to EBITDA
and EBITDA to interest expense covenants by comfortable margins. The Bank Group
agreed to adjust the Facility's minimum EBITDA covenants to reflect the
Company's reduced size following the Emcor transaction. While the Company
expects to be in compliance with the Facility's EBITDA requirements in the third
and fourth quarters, these covenants allow less room for variance than the
Facility's other financial covenants. If the Company violates the Facility's
minimum EBITDA covenants or any other of the Facility's covenants in the future,
it may have to negotiate new borrowing terms under the Facility or obtain new
financing. While the Company believes that its improved creditworthiness
following the Emcor transaction would enable it to negotiate new terms under the
Facility or obtain new financing from other sources if necessary, there can be
no absolute assurance that the Company would be successful in doing so.

     The financial covenants to which the Company is subject under the Facility
are as follows:

<Table>
<S>                                                            <C>
Minimum EBITDA:
  For the three months ended September 30, 2002.............   $9.2 million
  For the three months ended December 31, 2002..............   $7.7 million
</Table>

      The Company's actual EBITDA for the three months ended June 30, 2002,
      as determined in accordance with the Facility, was $10.0 million.

<Table>
<S>                                                           <C>
EBITDA to Interest Expense..................................  3.00
</Table>

      The Company's actual EBITDA to interest expense as of June 30, 2002,
      as determined in accordance with the Facility, was 4.99.

<Table>
<S>                                                           <C>
Senior Debt to EBITDA.......................................  2.50
</Table>

      The Company's actual senior debt to EBITDA as of June 30, 2002, as
      determined in accordance with the Facility, was 0.45.

<Table>
<S>                                                           <C>
Total Debt to EBITDA........................................  3.00
</Table>

      The Company's actual total debt to EBITDA as of June 30, 2002, as
      determined in accordance with the Facility, was 1.00.

     Net Worth -- a base amount of net worth, or stockholders' equity, set
     in the first quarter of 2001, plus 75% of net income thereafter,
     excluding the effects on both net income and stockholders' equity of
     adopting SFAS No. 142 relating to goodwill and the impairment
     adjustment that arose from that adoption; additionally, any amounts
     realized from raising new equity would also increase the covenant
     amount. The net worth covenant amount resulting from these conditions
     as of June 30, 2002 was $367.8 million. The Company's actual net worth
     measurement as of June 30, 2002 using the same conditions was $404.1
     million.

     Capital Expenditures -- the lesser of 2% of revenues or $22 million
     for any fiscal year. Based on year-to-date revenues through June 30,
     2002, the 2% limitation is $8.0 million. The Company's actual
     year-to-date capital expenditures were $3.1 million.

     As of June 30, 2002, the Company had $12.9 million in borrowings and $1.6
million in letters of credit outstanding under the Credit Facility. The
Company's unused borrowing capacity under the Facility, as measured by the most
restrictive covenant in the Facility, was $57.4 million as of June 30, 2002. The
Facility's interest rate terms as summarized above currently result in a
floating interest rate under the Facility of approximately 4.3%. In addition,
$0.6 million of remaining deferred Facility arrangement costs will be amortized
to interest expense over the remainder of this year up to the Facility's
maturity on January 1, 2003.

                                        13
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of August 12, 2002, $8.9 million in borrowings and $1.5 million in letters of
credit were outstanding under the Facility, and $61.5 million in unused capacity
was available as measured by the Facility's most restrictive covenant.

  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 $16.3 million as of June 30, 2002, and bear
interest, payable quarterly, at a weighted average interest rate of 9.81%. As of
August 12, 2002, there had been no change in the outstanding balance of these
notes. Substantially all of this debt is due on April 10, 2003, but is subject
to standstill terms that do not allow the debt to be accelerated until at least
one year after its current due date.

  OTHER LONG-TERM OBLIGATION DISCLOSURES

     As of June 30, 2002, the Company had total debt outstanding of $29.7
million, and total letters of credit outstanding of $1.6 million. Of these
amounts, $12.9 million was bank debt under the Credit Facility and $16.3 million
was subordinate debt. As of August 12, 2002, the Company had total debt
outstanding of approximately $25.7 million, and total letters of credit
outstanding of $1.5 million. Of these amounts, $8.9 million was bank debt under
the Credit Facility and $16.3 million was subordinate debt. As of August 12,
2002, $61.5 million in unused borrowing capacity was available under the Credit
Facility as measured by the Facility's most restrictive covenant. Bank debt
under the Credit Facility is due January 1, 2003. Substantially all of the
subordinate debt is due April 10, 2003, but is subject to standstill terms that
do not allow this debt to be accelerated until at least one year after its
current due date.

     The Company expects that free cash flow over upcoming quarters will result
in a minimal level of debt under the Credit Facility as of yearend. However, the
Company has a $16 million tax payment due in March 2003. In addition, the
Company may be called upon at any time under certain insurance arrangements to
post letters of credit totaling as much as $5.1 million as security for entities
that fund insurance costs on behalf of the Company. This insurance-related
letter of credit requirement will increase by $1.3 million per quarter through
the second quarter of 2003, for a cumulative total of $10.3 million that could
be required to be posted as of July 1, 2003. As a result, the Company expects
that, even if it succeeds in retiring all of its bank debt, it will continue to
need financing as of and subsequent to the January 1, 2003 maturity of its
current Credit Facility and the April 10, 2003 maturity of substantially all of
its subordinate debt.

     In view of the impending maturities of its debt and in view of the
importance of being able to offer long-term bonds on certain kinds of project
work, the Company is negotiating refinancing options both with its existing bank
group and with new financial institutions. Based on these negotiations as well
as on the Company's significantly improved financial position following the
Emcor transaction, management believes that it will be able to refinance a
significant portion of its debt in the current year, even though general
conditions in the financing markets are challenging. Accordingly, there can be
no absolute assurance that the Company will be able to complete this refinancing
when needed or on terms the Company deems acceptable.

     As noted above, the Company has agreed to relatively tight restrictions
under the Credit Facility. If the Company violates any of these restrictions, it
will be required to negotiate new terms with its banks. There can be no absolute
assurance that in that event, the Company will receive satisfactory new terms
from its banks, or that if the Company needs additional financing, that such
financing can be secured when needed or on terms the Company deems acceptable.

                                        14
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7.  COMMITMENTS AND CONTINGENCIES

  CLAIMS AND LAWSUITS

     The Company is party to litigation in the ordinary course of business. The
Company has estimated and provided accruals for probable losses and related
legal fees associated with certain of these actions in the accompanying
consolidated financial statements. 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.

  SELF-INSURANCE

     The Company retains the risk of worker's compensation, employer's
liability, auto liability, general liability and employee group health claims
resulting from uninsured deductibles per accident or occurrence. Losses up to
the deductible amounts are estimated and accrued based upon the Company's known
claims incurred and an estimate of claims incurred but not reported. The
accruals are based upon known facts and historical trends, and management
believes such accruals to be adequate. 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 that these
instruments will have a material effect on the Company's consolidated financial
statements.

8.  STOCKHOLDERS' EQUITY

  RESTRICTED STOCK GRANT

     The Company awarded 200,000 shares of restricted stock to its Chief
Executive Officer on March 22, 2002 under its 2000 Equity Incentive Plan. The
shares are subject to forfeiture if the Company does not meet certain
performance measures for the twelve-month period ending March 31, 2003 or if the
executive leaves voluntarily or is terminated for cause. Such forfeiture
provisions lapse upon achievement of the performance measures and pro rata over
a four-year period. Compensation expense relating to this grant will be charged
to earnings over the four-year period. The initial value of the award was
established based on the market price on the date of grant. The unearned
compensation is shown as a reduction of stockholders' equity in the accompanying
consolidated balance sheet and is being amortized against earnings based upon
the market value of the stock until the achievement of performance measures for
the twelve-month period ending March 31, 2003 is determined. The value of the
stock grant remaining after this determination will be amortized ratably over
the remaining three years of the restricted period.

  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

                                        15
<PAGE>
                           COMFORT SYSTEMS USA, INC.

      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 June 30, 2002, there were 1,171,112 shares of Restricted Voting Common
Stock remaining.

  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 to purchase 2.7 million shares of the Company's Common Stock
("Common Stock") at prices ranging from $6.00 to $21.44 per share were
outstanding for the three months and six months ended June 30, 2002 but were not
included in the computation of diluted EPS because the options' exercise prices
were greater than the average market price of the Common Stock. Options to
purchase 4.2 million shares of Common Stock at prices ranging from $3.63 to
$21.44 per share were outstanding for the three months ended June 30, 2001, but
were not included in the computation of diluted EPS because the options'
exercise prices were greater than the average market price of the Common Stock.
Options to purchase 7.1 million shares of Common Stock at prices ranging from
$2.14 to $21.44 per share were outstanding for the six months ended June 30,
2001, but were not included in the computation of diluted EPS because the
options had an anti-dilutive effect since the Company reported a loss from
continuing operations during the period.

     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 convertible subordinated notes had an
anti-dilutive effect during the three months ended June 30, 2001 and the six
months ended June 30, 2001 and 2002, and therefore, are not included in the
diluted EPS calculations. The convertibility provisions of the remaining
convertible subordinated notes expired during the first quarter of 2002.

     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):

<Table>
<Caption>
                                                      THREE MONTHS     SIX MONTHS ENDED
                                                     ENDED JUNE 30,        JUNE 30,
                                                     ---------------   -----------------
                                                      2001     2002     2001      2002
                                                     ------   ------   -------   -------
<S>                                                  <C>      <C>      <C>       <C>
Common shares outstanding, end of period...........  37,381   37,821   37,381    37,821
Effect of using weighted average common shares
  outstanding......................................      --       18        2      (134)
                                                     ------   ------   ------    ------
Shares used in computing earnings per
  share -- basic...................................  37,381   37,839   37,383    37,687
Effect of shares issuable under stock plans based
  on the treasury stock method.....................      50      637       --       550
                                                     ------   ------   ------    ------
Shares used in computing earnings per share --
  diluted..........................................  37,431   38,476   37,383    38,237
                                                     ======   ======   ======    ======
</Table>

                                        16
<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, 2001 (the "Form 10-K"). This discussion contains forward-looking
statements regarding the business and industry of Comfort Systems USA 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 uncertainties 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 national provider of comprehensive heating, ventilation
and air conditioning ("HVAC") installation, maintenance, repair and replacement
services within the mechanical services industry. The Company operates primarily
in the commercial and industrial HVAC markets, and performs most of its services
within office buildings, retail centers, apartment complexes, manufacturing
plants, and healthcare, education and government facilities. In addition to
standard HVAC services, the Company provides specialized applications such as
building automation control systems, fire protection, process cooling,
electronic monitoring and process piping. Certain locations also perform related
services such as electrical and plumbing. Approximately 55% of the Company's
consolidated 2002 revenues were attributable to installation of systems in newly
constructed facilities, with the remaining 45% attributable to maintenance,
repair and replacement services. The Company's consolidated 2002 revenues
related to the following service activities: HVAC-73%, plumbing-12%, building
automation control systems-5%, electrical-2%, fire protection-1% and other-7%.
These service activities are within the mechanical services industry which is
the single industry segment served by Comfort Systems.

     In response to the Securities and Exchange Commission's Release No.
33-8040, "Cautionary Advice Regarding Disclosure About Critical Accounting
Policies," the Company identified its critical accounting policies based upon
the significance of the accounting policy to the Company's overall financial
statement presentation, as well as the complexity of the accounting policy and
its use of estimates and subjective assessments. The Company concluded that its
critical accounting policy is its revenue recognition policy. This accounting
policy, as well as others, are described in Note 2 to the Consolidated Financial
Statements included in the Form 10-K.

     The Company enters into construction contracts with general contractors or
end-use customers based upon negotiated contracts and competitive bids. As part
of the negotiation and bidding processes, the Company estimates its contract
costs, which include all direct materials (net of estimated rebates), labor and
subcontract costs and indirect costs related to contract performance such as
indirect labor, supplies, tools, repairs and depreciation costs. Revenues from
construction contracts are recognized on the percentage-of-completion method in
accordance with the American Institute of Certified Public Accountants Statement
of Position 81-1, "Accounting for Performance of Construction-Type and Certain
Production-Type Contracts." Under this method, the amount of total contract
revenue recognizable at any given time during a contract is determined by
multiplying total contract revenue by the percentage of contract costs incurred
at any given time to total estimated contract costs. Accordingly, contract
revenues recognized in the statements of operations can and usually do differ
from amounts that can be billed or invoiced to the customer at any given point
during the contract.

     Changes in job performance, job conditions, estimated profitability and
final contract settlements may result in revisions to estimated costs and,
therefore, revenues. Such revisions are frequently based on estimates and
subjective assessments. The effects of these revisions are recognized in the
period in which the revisions are determined. When such revisions lead to a
conclusion that a loss will be recognized on a contract, the full
                                        17
<PAGE>

amount of the estimated ultimate loss is recognized in the period such a
conclusion is reached, regardless of what stage of completion the contract has
reached. Depending on the size of a particular project, variations from
estimated project costs could have a significant impact on the Company's
operating results.

     Revenues associated with maintenance, repair and monitoring services and
related contracts are recognized as services are performed.

     Approximately 55% of the Company's consolidated 2002 revenues were
attributable to installation of systems in newly constructed facilities. As a
result, if general economic activity in the U.S. slows significantly from
current levels, and leads to a corresponding decrease in new nonresidential
building construction, the Company's operating results could suffer.

     Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
Under this new standard, which is discussed in "Results of Operations" and "New
Accounting Pronouncements" below, new requirements for assessing whether
goodwill assets have been impaired involve market-based information. This
information, and its use in assessing goodwill, entails some degree of
subjective assessments. Additionally, amortization of goodwill has been
discontinued in 2002 operating results as a result of this standard.

     Effective January 1, 2002, the Company adopted SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets." Under this new standard,
the operating results of companies which were sold or held for sale as of June
30, 2002, have been reported as discontinued operations in the accompanying
consolidated statements of operations. However, the operating results for
companies which were sold or shut down during 2001 are presented as continuing
operations through the date of disposition.

RESULTS OF OPERATIONS

<Table>
<Caption>
                                    THREE MONTHS ENDED JUNE 30,            SIX MONTHS ENDED JUNE 30,
                                -----------------------------------   ------------------------------------
                                      2001               2002               2001               2002
                                ----------------   ----------------   ----------------   -----------------
                                                              (IN THOUSANDS)
<S>                             <C>        <C>     <C>        <C>     <C>        <C>     <C>         <C>
Revenues......................  $227,667   100.0%  $211,900   100.0%  $430,559   100.0%  $ 401,362   100.0%
Cost of services..............   184,523    81.0%   173,166    81.7%   351,067    81.5%    332,175    82.8%
                                --------           --------           --------           ---------
Gross profit..................    43,144    19.0%    38,734    18.3%    79,492    18.5%     69,187    17.2%
Selling, general and
  administrative expenses.....    35,553    15.6%    30,554    14.4%    70,922    16.5%     62,983    15.7%
Goodwill amortization.........     2,057     0.9%        --      --      4,114     1.0%         --      --
Restructuring charges.........        --      --         --      --        238     0.1%      1,878     0.5%
                                --------           --------           --------           ---------
Operating income..............     5,534     2.4%     8,180     3.9%     4,218     1.0%      4,326     1.1%
Other expense, net............    (2,285)   (1.0)%     (290)   (0.1)%   (4,600)   (1.1)%    (1,849)   (0.5%)
                                --------           --------           --------           ---------
Income (loss) before income
  taxes.......................     3,249     1.4%     7,890     3.7%      (382)     --       2,477     0.6%
Income tax expense............     2,032              2,692                710               1,173
                                --------           --------           --------           ---------
Income (loss) from continuing
  operations..................     1,217     0.5%     5,198     2.5%    (1,092)   (0.3)%     1,304     0.3%
Discontinued operations --
  Operating results, net of
    tax.......................     2,074               (261)             5,483                (113)
  Estimated loss on
    disposition, net of tax...        --               (169)                --             (11,156)
Cumulative effect of change in
  accounting principle, net of
  tax.........................        --                 --                 --            (202,521)
                                --------           --------           --------           ---------
Net income (loss).............  $  3,291           $  4,768           $  4,391           $(212,486)
                                ========           ========           ========           =========
</Table>

     Revenues -- Revenues decreased $15.8 million, or 6.9%, to $211.9 million
for the second quarter of 2002 and decreased $29.2 million, or 6.8%, to $401.4
million for the first six months of 2002 compared to the same

                                        18
<PAGE>

periods in 2001. The 6.9% decline in revenue for the quarter was comprised of a
6.1% decline in revenues at ongoing operations and a 0.8% decline in revenues
related to operations that were sold or shut down during 2001. The 6.8% decline
in revenues for the first six months of 2002 was comprised of a 5.7% decline in
revenues at ongoing operations and a 1.1% decline in revenues related to
operations that were sold or shut down during 2001.

     The Company's decline in revenues at ongoing operations for the first six
months of 2002 resulted primarily from the lagged effect of the general economic
slowdown that began last year which slowed decisions to proceed on both new and
retrofit projects. This general economic slowdown has also led to a more
competitive pricing environment. The Company's decline in revenue is also
consistent with management's decreased emphasis on revenue growth in favor of
improvement in profit margins, operating efficiency, and cash flow. In view of
these factors, the Company may continue to experience only modest revenue growth
or revenue declines in upcoming periods. There can be no assurance, however,
that this strategy will lead to improved profit margins in the near term. In
addition, if general economic activity in the U.S. slows significantly from
current levels, the Company may realize further decreases in revenue and lower
operating margins.

     Backlog primarily contains installation, retrofit project work and service
and maintenance agreements. These projects generally last less than a year.
Service work and short duration projects are generally billed as performed and
therefore do not flow through backlog. Accordingly, backlog represents only a
portion of the Company's revenues in any given future period, and it represents
revenues that should be reflected in the Company's operating results over the
next six to twelve months. As a result, the Company believes the predictive
value of backlog information is limited to indications of general revenue
direction over the near term, and should not be interpreted as indicative of
ongoing revenue performance over several quarters.

     The Company's backlog associated with continuing operations as of June 30,
2002 was $466.5 million, a 13.0% increase as compared to December 31, 2001
backlog of $412.8 million and a 1.0% decrease from June 30, 2001 backlog of
$471.0 million.

     Gross Profit -- Gross profit decreased $4.4 million, or 10.2%, to $38.7
million for the second quarter of 2002 and decreased $10.3 million, or 13.0%, to
$69.2 million for the first six months of 2002 compared to the same periods in
2001. As a percentage of revenues, gross profit decreased from 19.0% for the
three months ended June 30, 2001 to 18.3% for the three months ended June 30,
2002 and decreased from 18.5% for the six months ended June 30, 2001 to 17.2%
for the six months ended June 30, 2002.

     The decline in gross profit was primarily due to market-driven project
delays at a number of the Company's operations. These project delays affected
the Company's revenue volume and profitability throughout the first quarter of
2002, and continued to affect operations during the first part of the second
quarter. In addition, the Company recorded lower margins on certain of its
projects that were completed at one of its operating locations in the West
during the first quarter of 2002 as a result of execution shortfalls.

     Selling, General and Administrative Expenses ("SG&A") -- SG&A decreased
$5.0 million, or 14.1%, to $30.6 million for the second quarter of 2002 and
decreased $7.9 million, or 11.2%, to $63.0 million for the first six months of
2002 compared to the same periods in 2001. As a percentage of revenues, SG&A
decreased from 15.6% for the three months ended June 30, 2001 to 14.4% for the
three months ended June 30, 2002 and decreased from 16.5% for the six months
ended June 30, 2001 to 15.7% for the six months ended June 30, 2002. The
decrease in SG&A is primarily due to a concerted effort to reduce SG&A
throughout the Company. In response to the smaller size of the Company following
the sale of 19 units to Emcor as discussed further below under "Discontinued
Operations," the Company reduced corporate overhead at the end of the first
quarter of 2002. The cost of this workforce reduction is included in
restructuring charges recorded in March 2002. The Company realized lower
corporate overhead costs during the second quarter of 2002 as a result of these
steps. In addition, during the second quarter of 2002, the Company reversed $0.8
million of bad debt reserves that were established in the fourth quarter of 2001
related to the Company's receivables with Kmart based upon a post-bankruptcy
petition settlement agreement which was recently executed with Kmart.

                                        19
<PAGE>

     SG&A as a percentage of revenues for periods prior to the Emcor transaction
is higher than historical levels because the financial statements do not
allocate any corporate overhead to the discontinued operations. As a result,
SG&A for continuing operations reflects substantially the full amount of
corporate office overhead that was in place to support the Company's operations
prior to the sale of these operations.

     Goodwill Amortization -- Effective January 1, 2002, the Company adopted
SFAS No. 142, "Goodwill and Other Intangible Assets." This pronouncement
discontinued goodwill amortization. See "Cumulative Effect of Change in
Accounting Principle" for further discussion.

     Restructuring Charges -- During the first quarter of 2002, the Company
recorded restructuring charges of approximately $1.9 million. These charges
included approximately $0.8 million for severance costs primarily associated
with the reduction in corporate overhead in light of the Company's smaller size
following the Emcor transaction. The severance costs related to the termination
of 33 employees, all of whom were terminated as of March 31, 2002. In addition,
these charges include approximately $0.7 million for costs associated with
decisions to merge or close three smaller divisions and realign regional
operating management. These restructuring charges are primarily cash obligations
but did include approximately $0.3 million of non-cash writedowns associated
with long-lived assets.

     During the first quarter of 2001, the Company recorded restructuring
charges of approximately $0.2 million, primarily related to contractual
severance obligations of two operating presidents in connection with the
Company's significant restructuring program in the second half of 2000. These
restructuring charges are net of a gain of approximately $0.1 million related to
management's decision to sell a small operation during the first quarter of
2001.

     Other Expense, Net -- Other expense, net, primarily includes interest
expense, and decreased $2.0 million, or 87.3%, to $0.3 million for the second
quarter of 2002 and decreased $2.8 million, or 59.8%, to $1.8 million for the
first six months of 2002. A portion of the Company's actual interest expense in
both years has been allocated to the discontinued operations caption based upon
the Company's net investment in these operations. Therefore, interest expense
relating to continuing operations does not reflect the pro forma reduction of
interest expense from applying the proceeds from the sale of these operations to
reduce debt in any earlier period. Interest expense allocated to the
discontinued operations for the three months ended June 30, 2001 was $3.9
million and for the six months ended June 30, 2001 and 2002 was $7.7 million and
$1.5 million, respectively. In addition, first quarter 2002 interest expense in
continuing operations includes a non-cash writedown of $0.6 million, before
taxes, of loan arrangement costs in connection with the reduction in the
Company's borrowing capacity following the Emcor transaction, as discussed
further below under "Liquidity and Capital Resources." Other expense, net, for
the second quarter of 2002 also includes a gain of $0.6 million on the sale of
the residential portion of one of the Company's operations.

     Income Tax Expense -- The Company's effective tax rates associated with
results from continuing operations for the six months ended June 30, 2001 and
2002 were (185.9)% and 47.4%, respectively. As a result of the discontinuation
of goodwill amortization as a result of the adoption of SFAS No. 142 effective
January 1, 2002, there is no longer a permanent difference related to the
non-deductible goodwill amortization in the 2002 effective tax rate.

     Discontinued Operations -- On February 11, 2002, the Company entered into
an agreement with Emcor Group, Inc. ("Emcor") to sell 19 operations. This
transaction closed on March 1, 2002. Under the terms of the agreement, the total
purchase price was $186.25 million, including the assumption by Emcor of
approximately $22.1 million of subordinated notes to former owners of certain of
the divested companies.

     The transaction with Emcor provided for a post-closing adjustment based on
a final accounting, done after the closing of the transaction, of the net assets
of the operations that were sold to Emcor. That accounting indicated that the
net assets transferred to Emcor were approximately $7 million greater than a
target amount that had been agreed to with Emcor. In accordance with the
transaction agreement, Emcor paid the Company that amount, and released $2.5
million that had been escrowed in connection with this element of the
transaction. The total of these two amounts, $9.5 million, was reflected as a
receivable in the Company's March 31, 2002 financial statements. The Company
received this payment during the second quarter.

                                        20
<PAGE>

     An additional $5 million of Emcor's purchase price was deposited into an
escrow account to secure potential obligations on the Company's part to
indemnify Emcor for future claims and contingencies arising from events and
circumstances prior to closing, all as specified in the transaction documents.
Because these escrow funds secure future claims and contingencies, the Company
does not know whether it will ultimately receive any of such funds, and if it
does, how much it will receive. Therefore, the Company has not recognized a
receivable for this escrowed portion of the Emcor transaction purchase price. If
the Company ultimately receives any of these escrowed funds, a corresponding
gain will be recorded as a component of discontinued operations when received.

     The net cash proceeds of approximately $164 million received to date from
the Emcor transaction have been used to reduce debt outstanding under the
Company's credit facility. An estimated tax liability of $16 million related to
this transaction was recorded at March 31, 2002 and is due in March 2003.

     Under SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," which took effect for the Company on January 1, 2002, the
operating results of the companies sold to Emcor as well as the loss on the sale
of these operations have been presented as discontinued operations in the
Company's statements of operations. The Company realized a loss of $10.6 million
including related tax expense related to the sale of these operations. As a
result of the adoption of SFAS No. 142 "Goodwill and Other Intangible Assets,"
the Company also recognized a goodwill impairment charge related to these
operations of $32.4 million, net of taxes, as of January 1, 2002. The reporting
of the Company's aggregate goodwill impairment charge in connection with
adopting SFAS No. 142 is discussed further below under "Cumulative Effect of
Change in Accounting Principle."

     In March 2002, the Company also decided to divest of an additional
operating company. This unit's operating loss for the first two quarters of 2002
of $0.1 million, net of taxes, has been reported in discontinued operations
under "Operating results, net of tax" in the Company's results of operations. In
addition, an estimate of the loss the Company will realize upon divestiture of
this operation of $0.6 million has been included in "Estimated loss on
disposition, net of tax" during the first quarter of 2002 in the Company's
results of operations.

     During the second quarter of 2002, the Company sold a division of one of
its operations. The operating loss for this division for the first two quarters
of 2002 of $0.3 million, net of taxes, has been reported in discontinued
operations under "Operating results, net of tax" in the Company's results of
operations. The Company realized a loss of $0.3 million on the sale of this
division which is included in "Estimated loss on disposition, net of tax" during
the second quarter of 2002 in the Company's results of operations.

     Cumulative Effect of Change in Accounting Principle -- Effective January 1,
2002, the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets."
SFAS No. 142 requires companies to assess goodwill asset amounts for impairment
each year, and more frequently if circumstances suggest an impairment may have
occurred. In addition to discontinuing the regular charge, or amortization, of
goodwill against income, the new standard also introduces more rigorous criteria
for determining how much goodwill should be reflected as an asset in a company's
balance sheet.

     To perform the transitional impairment testing required by SFAS No. 142
under its new, more rigorous impairment criteria, the Company broke its
operations into "reporting units", as prescribed by the new standard, and tested
each of these reporting units for impairment by comparing the unit's fair value
to its carrying value. The fair value of each reporting unit was estimated using
a discounted cash flow model combined with market valuation approaches.
Significant estimates and assumptions were used in assessing the fair value of
reporting units. These estimates and assumptions involved future cash flows,
growth rates, discount rates, weighted average cost of capital and estimates of
market valuations for each of the reporting units.

     As provided by SFAS No. 142, the transitional impairment loss identified by
applying the standard's new, more rigorous valuation methodology upon initial
adoption of the standard was reflected as a cumulative effect of a change in
accounting principle in the Company's statement of operations. The resulting
non-cash charge

                                        21
<PAGE>

was $202.5 million, net of taxes. Impairment charges recognized after the
initial adoption, if any, generally are to be reported as a component of
operating income.

LIQUIDITY AND CAPITAL RESOURCES

     Cash Flow -- Cash provided by operating activities less customary capital
expenditures plus the proceeds from asset sales is generally called free cash
flow and, if positive, represents funds available to invest in significant
operating initiatives, to acquire other companies or to reduce a company's
outstanding debt or equity. If free cash flow is negative, additional debt or
equity is generally required to fund the outflow of cash.

     For the three months ended June 30, 2002, the Company had positive free
cash flow of $11.0 million as compared to $23.7 million for the same period in
2001. For the six months ended June 30, 2002, the Company had negative free cash
flow of $0.2 million as compared to positive free cash flow of $29.2 million for
the same period in 2001. The 2001 cash flow amounts include the 19 operations
the Company sold to Emcor in 2002. This primarily accounts for the lower amounts
in 2002.

     The transaction with Emcor provided for a post-closing adjustment based on
a final accounting, done after the closing of the transaction, of the net assets
of the operations that were sold to Emcor. That accounting indicated that the
net assets transferred to Emcor were approximately $7 million greater than a
target amount that had been agreed to with Emcor. In accordance with the
transaction agreement, Emcor paid the Company that amount, and released $2.5
million that had been escrowed in connection with this element of the
transaction. The total of these two amounts, $9.5 million, was reflected as a
receivable in the Company's March 31, 2002 financial statements. This payment
was received by the Company during the second quarter and is included in
"Proceeds from businesses sold, net of cash sold and transaction costs" in the
Company's statement of cash flows.

     The proceeds received at the closing of the Emcor transaction, the
post-closing adjustment and related escrow received from Emcor, and free cash
flow from the Company's operations were all used to reduce the Company's debt.

     Revolving Credit Facility -- The Company's principal current debt financing
and operating liquidity is provided by a revolving credit facility (the "Credit
Facility" or the "Facility") with Bank One, Texas, N.A. ("Bank One") and other
banks (including Bank One, the "Bank Group"). The Facility's general terms allow
for the Company to borrow up to the lesser of $100 million or 80% of accounts
receivable, net of reserves ("Net Receivables"). Borrowings under the Facility
are also effectively limited by a requirement that they not result in the
Company's ratios of earnings before interest, taxes, depreciation and
amortization ("EBITDA") to interest expense and debt to EBITDA exceeding certain
levels. Based on the most restrictive of these ratio-related limits, effective
borrowing capacity under the Facility is currently $70.4 million. 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 January 1, 2003, 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 London Interbank Offered Rates or
"LIBOR") plus 2.5% to 3.5%. The additional margin for both options depends on
the ratio of the Company's debt to 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 and the repurchase of
shares 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 subordinate debt. The Credit Facility also
contains covenants providing 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.

                                        22
<PAGE>

     In the fourth quarter of 2001, the Company estimated and recorded an
allowance of $3.5 million against its receivables with the Kmart Corporation
based on Kmart's bankruptcy filing in January 2002. Including this reserve, the
Company's fourth quarter 2001 EBITDA did not meet the Facility's minimum EBITDA
covenant. The Bank Group agreed to exclude the Kmart reserve from covenant
calculations. In addition, the Company's first quarter 2002 EBITDA did not meet
the Facility's minimum EBITDA covenant. The Bank Group waived that covenant
violation. As a result, the Company has no unresolved covenant violations under
the Facility.

     As a result of its substantial reduction in debt following the Emcor
transaction, the Company currently complies with the Facility's debt to EBITDA
and EBITDA to interest expense covenants by comfortable margins. The Bank Group
agreed to adjust the Facility's minimum EBITDA covenants to reflect the
Company's reduced size following the Emcor transaction. While the Company
expects to be in compliance with the Facility's EBITDA requirements in the third
and fourth quarters, these covenants allow less room for variance than the
Facility's other financial covenants. If the Company violates the Facility's
minimum EBITDA covenants or any other of the Facility's covenants in the future,
it may have to negotiate new borrowing terms under the Facility or obtain new
financing. While the Company believes that its improved creditworthiness
following the Emcor transaction would enable it to negotiate new terms under the
Facility or obtain new financing from other sources if necessary, there can be
no absolute assurance that the Company would be successful in doing so.

     The financial covenants to which the Company is subject under the Facility
are as follows:

<Table>
<S>                                                           <C>
Minimum EBITDA:
  For the three months ended September 30, 2002.............  $9.2 million
  For the three months ended December 31, 2002..............  $7.7 million
</Table>

      The Company's actual EBITDA for the three months ended June 30, 2002,
      as determined in accordance with the Facility, was $10.0 million.

<Table>
<S>                                                           <C>
EBITDA to Interest Expense..................................  3.00
</Table>

      The Company's actual EBITDA to interest expense as of June 30, 2002,
      as determined in accordance with the Facility, was 4.99.

<Table>
<S>                                                           <C>
Senior Debt to EBITDA.......................................  2.50
</Table>

      The Company's actual senior debt to EBITDA as of June 30, 2002, as
      determined in accordance with the Facility, was 0.45.

<Table>
<S>                                                           <C>
Total Debt to EBITDA........................................  3.00
</Table>

      The Company's actual total debt to EBITDA as of June 30, 2002, as
      determined in accordance with the Facility, was 1.00.

     Net Worth -- a base amount of net worth, or stockholders' equity, set
     in the first quarter of 2001, plus 75% of net income thereafter,
     excluding the effects on both net income and stockholders' equity of
     adopting SFAS No. 142 relating to goodwill and the impairment
     adjustment that arose from that adoption; additionally, any amounts
     realized from raising new equity would also increase the covenant
     amount. The net worth covenant amount resulting from these conditions
     as of June 30, 2002 was $367.8 million. The Company's actual net worth
     measurement as of June 30, 2002 using the same conditions was $404.1
     million.

     Capital Expenditures -- the lesser of 2% of revenues or $22 million
     for any fiscal year. Based on year-to-date revenues through June 30,
     2002, the 2% limitation is $8.0 million. The Company's actual
     year-to-date capital expenditures were $3.1 million.

     As of June 30, 2002, the Company had $12.9 million in borrowings and $1.6
million in letters of credit outstanding under the Credit Facility. The
Company's unused borrowing capacity under the Facility, as

                                        23
<PAGE>

measured by the most restrictive covenant in the Facility, was $57.4 million as
of June 30, 2002. The Facility's interest rate terms as summarized above
currently result in a floating interest rate under the Facility of approximately
4.3%. In addition, $0.6 million of remaining deferred Facility arrangement costs
will be amortized to interest expense over the remainder of this year up to the
Facility's maturity on January 1, 2003. As of August 12, 2002, $8.9 million in
borrowings and $1.5 million in letters of credit were outstanding under the
Facility, and $61.5 million in unused capacity was available as measured by the
Facility's most restrictive covenant.

     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 $16.3
million as of June 30, 2002, and bear interest, payable quarterly, at a weighted
average interest rate of 9.81%. As of August 12, 2002, there had been no change
in the outstanding balance of these notes. Substantially all of this debt is due
on April 10, 2003, but is subject to standstill terms that do not allow the debt
to be accelerated until at least one year after its current due date.

     Other Commitments -- As is common in the Company's industry, the Company
has entered into certain off-balance sheet arrangements in the ordinary course
of business that result in obligations not directly reflected in the Company's
balance sheets. The Company's most significant off-balance sheet obligations are
noncancelable operating leases for facilities and vehicles. The Company also has
other off-balance sheet obligations involving letters of credit and surety
guarantees.

     The Company enters into noncancelable operating leases for many of its
facility, vehicle and equipment needs. These leases allow the Company to
conserve cash by paying a monthly lease rental fee for use of facilities,
vehicles and equipment rather than purchasing them. At the end of the lease, the
Company has no further obligation to the lessor. The Company may decide to
cancel or terminate a lease before the end of its term. If the Company does so,
it typically would owe the lessor the remaining lease payments as of the
termination of the lease.

     Certain of the Company's vendors require letters of credit to ensure
reimbursement for amounts they are disbursing on behalf of the Company, such as
to beneficiaries under the Company's self-funded insurance programs. In
addition, some customers require the Company to post letters of credit to
guarantee performance under the Company's contracts and to ensure payment to the
Company's subcontractors and vendors under those contracts. Such letters of
credit are generally issued by a bank or similar financial institution. The
letter of credit commits the issuer to pay specified amounts to the holder of
the letter of credit if the holder demonstrates that the Company has failed to
perform specified actions. If this were to occur, the Company would be required
to reimburse the issuer of the letter of credit. Depending on the circumstances
of such a reimbursement, the Company may also have to record a charge to
earnings for the reimbursement. To date the Company has not had a claim made
against a letter of credit that resulted in payments by the issuer of the letter
of credit or by the Company. The Company believes that it is unlikely that it
will have to fund claims under a letter of credit in the foreseeable future.

     Many customers, particularly in connection with new construction, require
the Company to post performance and payment bonds issued by a financial
institution known as a surety. These bonds provide a guarantee to the customer
that the Company will perform under the terms of a contract and that the Company
will pay subcontractors and vendors. If the Company fails to perform under a
contract or to pay subcontractors and vendors, the customer may demand that the
surety make payments or provide services under the bond. The Company must
reimburse the surety for any expenses or outlays it incurs. To date, the Company
has not had any significant reimbursements to its surety for bond-related costs.
The Company believes that it is unlikely that it will have to fund claims under
its surety arrangements in the foreseeable future.

     The Company's future contractual obligations include (in thousands):

<Table>
<Caption>
                                       TWELVE MONTHS ENDED JUNE 30,
                                -------------------------------------------
                                 2003      2004     2005     2006     2007    THEREAFTER    TOTAL
                                -------   ------   ------   ------   ------   ----------   -------
<S>                             <C>       <C>      <C>      <C>      <C>      <C>          <C>
Debt obligations..............  $29,242   $   92   $   68   $   48   $   51    $   167     $29,668
Operating lease obligations...  $ 9,889   $8,087   $5,976   $4,895   $3,092    $15,126     $47,065
</Table>

                                        24
<PAGE>

     The Company's current letter of credit commitments expire as follows (in
thousands):

<Table>
<Caption>
                                       TWELVE MONTHS ENDED JUNE 30,
                                -------------------------------------------
                                 2003      2004     2005     2006     2007    THEREAFTER    TOTAL
                                -------   ------   ------   ------   ------   ----------   -------
<S>                             <C>       <C>      <C>      <C>      <C>      <C>          <C>
Letters of credit.............  $1,593    $  --    $  --    $  --    $  --      $  --      $1,593
</Table>

     Outlook -- As of June 30, 2002, the Company had total debt outstanding of
$29.7 million, and total letters of credit outstanding of $1.6 million. Of these
amounts, $12.9 million was bank debt under the Credit Facility and $16.3 million
was subordinate debt. As of August 12, 2002, the Company had total debt
outstanding of approximately $25.7 million, and total letters of credit
outstanding of $1.5 million. Of these amounts, $8.9 million was bank debt under
the Credit Facility and $16.3 million was subordinate debt. As of August 12,
2002, $61.5 million in unused borrowing capacity was available under the Credit
Facility as measured by the Facility's most restrictive covenant. Bank debt
under the Credit Facility is due January 1, 2003. Substantially all of the
subordinate debt is due April 10, 2003, but is subject to standstill terms that
do not allow this debt to be accelerated until at least one year after its
current due date.

     The Company expects that free cash flow over upcoming quarters will result
in a minimal level of debt under the Credit Facility as of yearend. However, the
Company has a $16 million tax payment due in March 2003. In addition, the
Company may be called upon at any time under certain insurance arrangements to
post letters of credit totaling as much as $5.1 million as security for entities
that fund insurance costs on behalf of the Company. This insurance-related
letter of credit requirement will increase by $1.3 million per quarter through
the second quarter of 2003, for a cumulative total of $10.3 million that could
be required to be posted as of July 1, 2003. As a result, the Company expects
that, even if it succeeds in retiring all of its bank debt, it will continue to
need financing as of and subsequent to the January 1, 2003 maturity of its
current Credit Facility and the April 10, 2003 maturity of substantially all of
its subordinate debt.

     In view of the impending maturities of its debt and in view of the
importance of being able to offer long-term bonds on certain kinds of project
work, the Company is negotiating refinancing options both with its existing bank
group and with new financial institutions. Based on these negotiations as well
as on the Company's significantly improved financial position following the
Emcor transaction, management believes that it will be able to refinance a
significant portion of its debt in the current year, even though general
conditions in the financing markets are challenging. Accordingly, there can be
no absolute assurance that the Company will be able to complete this refinancing
when needed or on terms the Company deems acceptable.

     As noted above, the Company has agreed to relatively tight restrictions
under the Credit Facility. If the Company violates any of these restrictions, it
will be required to negotiate new terms with its banks. There can be no absolute
assurance that in that event, the Company will receive satisfactory new terms
from its banks, 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 (the first quarter of the year) 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.

                                        25
<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 establishes new
accounting and reporting requirements for goodwill and other intangible assets.
The Company adopted this new standard effective January 1, 2002. See Note 4 of
the Consolidated Financial Statements for further discussion.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." The Company adopted SFAS No. 144
effective January 1, 2002. Under SFAS No. 144, the operating results of
companies sold or held for sale meeting certain criteria, as well as any gain or
loss on the sale of these operations, are presented as discontinued operations
in the Company's statements of operations. See Note 3 of the Consolidated
Financial Statements for a discussion of the Company's discontinued operations.
The operating results for companies which were sold or shut down during 2001 are
presented as continuing operations through the date of disposition. The adoption
of SFAS No. 144 did affect the presentation of discontinued operations in the
consolidated financial statements; however, it did not have a material financial
impact on the Company's results of operations, financial position or cash flows.

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.

                                        26
<PAGE>

                           COMFORT SYSTEMS USA, INC.

                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company is subject to certain claims and lawsuits arising in the normal
course of business and maintains various insurance coverages to minimize
financial risk associated with these claims. The Company has estimated and
provided accruals for probable losses and legal fees associated with certain of
these actions in its consolidated financial statements. In the opinion of
management, uninsured losses, if any, resulting from the ultimate resolution of
these matters will not have a material adverse effect on the Company's financial
position or results of operations.

ITEM 2.  RECENT SALES OF UNREGISTERED SECURITIES

     During the six month period ended June 30, 2002, the Company did not issue
any unregistered shares of its common stock.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company held its annual meeting of stockholders in Houston, Texas on
May 23, 2002. The following sets forth matters submitted to a vote of
stockholders:

          (a) The following individuals were elected to the Board of Directors
     as stated in the Company's Proxy Statement dated April 15, 2002, for terms
     expiring at the 2005 annual stockholders' meeting or until their successors
     have been elected and qualified -- Class II: directors are J. Gordon
     Beittenmiller, Robert D. Wagner, Jr., and Steven S. Harter. Every director
     was elected by a majority of the outstanding shares of Common Stock of the
     Company, except for Mr. Harter who was elected by a majority of the
     outstanding shares of Restricted Voting Common. Out of a potential
     36,560,253 shares of Common Stock outstanding, Mr. Beittenmiller had
     25,127,749 shares voted in favor, with 374,600 shares withheld, Mr. Wagner
     had 25,127,749 shares voted in favor, with 374,600 shares withheld. Out of
     a potential 1,191,112 shares of Restricted Voting Common, Mr. Harter had
     934,548 shares voted in favor, and no shares were withheld.

          (b) A majority of the outstanding shares of Common Stock of the
     Company approved the amendment of the 1997 Non-employee Directors' Stock
     Plan to (i) increase the number of shares issuable by 250,000 shares and
     (ii) change the amount of the automatic annual option grant to non-employee
     directors from 5,000 to 10,000 shares. Shares voted in favor 21,926,630,
     with 4,207,292 shares withheld, and 65,783 shares abstained.

          (c) A stockholder, the Sheet Metal Worker's International Association,
     mailed to certain stockholders a proxy solicitation "requesting policy
     against repricing or replacing stock options without prior shareholder
     approval". With respect to proxies and ballots received, 5,097,421 shares
     voted for the proposal, 4,432,270 shares voted against the proposal and
     5,000 shares abstained.

                                        27
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

<Table>
<S>    <C>
10.1   Employment Agreement between David Lanphar and the Company
       dated September 1, 2001. (Filed herewith)
10.2   Waiver dated as of May 10, 2002 to Section 8.15 of the
       Credit Agreement between the Company, the Guarantors, the
       Administrative Agent, the Co-Agents and the Banks that are
       parties to that certain Fourth Amended and Restated Credit
       Agreement dated as of March 22, 2001 as amended by that
       certain First Amendment thereto dated as of February 8,
       2002. (Filed herewith)
10.3   Amendment to 1997 Non-Employee Directors' Stock Plan dated
       May 23, 2002. (Filed herewith)
99.1   Certification of William F. Murdy, Chief Executive Officer,
       pursuant to Section 1350, Chapter 63 of Title 18, United
       States Code, as adopted pursuant to Section 906 of the
       Sarbanes-Oxley Act Of 2002. (Filed herewith)
99.2   Certification of J. Gordon Beittenmiller, Chief Financial
       Officer, pursuant to Section 1350, Chapter 63 of Title 18,
       United States Code, as adopted pursuant to Section 906 of
       the Sarbanes-Oxley Act Of 2002. (Filed herewith)
</Table>

     (b) report on Form 8-K

     (i) The Company filed a report on Form 8-K with the Securities and Exchange
Commission on May 30, 2002. Under Item 4 of that report, the Company disclosed
that effective May 24, 2002 the Company would no longer engage Arthur Andersen
LLP as the Company's independent public accountants and that as of May 24, 2002
Ernst & Young LLP, certified public accountants, would be appointed as the
Company's independent public accountants for 2002.

                                        28
<PAGE>

                                   SIGNATURES

     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.

August 13, 2002                                  /s/ WILLIAM F. MURDY
                                          --------------------------------------
                                          William F. Murdy
                                          Chairman of the Board and
                                          Chief Executive Officer

August 13, 2002                               /s/ J. GORDON BEITTENMILLER
                                          --------------------------------------
                                          J. Gordon Beittenmiller
                                          Executive Vice President,
                                          Chief Financial Officer and Director

                                        29
<PAGE>

                               INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER                            DESCRIPTION
-------                           -----------
<C>       <S>
 10.1     Employment Agreement between David Lanphar and the Company
          dated September 1, 2001. (Filed herewith)
 10.2     Waiver dated as of May 10, 2002 to Section 8.15 of the
          Credit Agreement between the Company, the Guarantors, the
          Administrative Agent, the Co-Agents and the Banks that are
          parties to that certain Fourth Amended and Restated Credit
          Agreement dated as of March 22, 2001 as amended by that
          certain First Amendment thereto dated as of February 8,
          2002. (Filed herewith)
 10.3     Amendment to 1997 Non-Employee Directors' Stock Plan dated
          May 23, 2002. (Filed herewith)
 99.1     Certification of William F. Murdy, Chief Executive Officer,
          pursuant to Section 1350, Chapter 63 of Title 18, United
          States Code, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act Of 2002. (Filed herewith)
 99.2     Certification of J. Gordon Beittenmiller, Chief Financial
          Officer, pursuant to Section 1350, Chapter 63 of Title 18,
          United States Code, as adopted pursuant to Section 906 of
          the Sarbanes-Oxley Act Of 2002. (Filed herewith)
</Table>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>h98970exv10w1.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - DAVID LANPHAR
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT (this "Agreement") between COMFORT SYSTEMS
USA, INC., a Delaware corporation (referred to herein individually as "Comfort"
and collectively with its subsidiaries and affiliates as the "Company"), and
David Lanphar ("Executive") is entered into and effective as of the 1st day of
September, 2001. This Agreement supersedes any other employment agreements or
understandings, written or oral, between the Company and Executive.

                                 R E C I T A L S

         The following statements are true and correct:

                  As of the date of this Agreement, the Company is engaged in
         the business of mechanical contracting services, including heating,
         ventilation and air conditioning, plumbing, piping, electrical and
         related services ("Services").

                  Executive is employed hereunder by the Company in a
         confidential relationship wherein Executive, in the course of
         Executive's employment with the Company, has and will continue to
         become familiar with and aware of information as to the Company's and
         its customers' specific manner of doing business, including the
         processes, techniques and trade secrets utilized by the Company, and
         future plans with respect thereto, all of which has been and will be
         established and maintained at great expense to the Company. This
         information is a trade secret and constitutes the valuable goodwill of
         the Company.

         NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each, the
Company and Executive hereby agree as follows:

                               A G R E E M E N T S

         1. Employment and Duties.

                  (a) The Company hereby employs Executive in an executive
         position and Executive hereby accepts this employment upon the terms
         and conditions herein contained. Executive agrees to devote
         substantially all of Executive's business time, attention and efforts
         to promote and further the business of the Company.

                  (b) Executive shall faithfully adhere to, execute and fulfill
         all lawful policies established by the Company, including the Company's
         Corporate Compliance Policy.

                  (c) Executive shall not, during the term of Executive's
         employment hereunder, be engaged in any other business activity pursued
         for gain, profit or other pecuniary advantage if such activity
         interferes in any material respect with Executive's



                                       1
<PAGE>

         duties and responsibilities hereunder. The foregoing limitations shall
         not be construed as prohibiting Executive from making personal
         investments in such form or manner as will neither require Executive's
         services in the operation or affairs of the companies or enterprises in
         which such investments are made nor violate the terms of Section 4
         hereof.

         2. Compensation. For all services rendered by Executive, the Company
shall compensate Executive as follows:

                  (a) Base Salary. Effective the date hereof, the base salary
         payable to Executive shall be $175,000 per year, payable on a regular
         basis in accordance with the Company's standard payroll procedures, but
         not less often than monthly.

                  (b) Executive Perquisites, Benefits and Other Compensation.
         Executive shall be entitled to receive additional benefits and
         compensation from the Company in such form and to the extent specified
         below:

                           (i) Coverage, subject to contributions required of
                  employees generally, for Executive and Executive's dependent
                  family members under health, hospitalization, disability,
                  dental, life and other insurance plans that the Company may
                  have in effect from time to time for the benefit of its
                  employees.

                           (ii) Reimbursement for all business travel and other
                  out-of-pocket expenses reasonably incurred by Executive in the
                  performance of Executive's services pursuant to this
                  Agreement. Reimbursable expenses shall be appropriately
                  documented in reasonable detail by Executive, and shall be in
                  a format consistent with the Company's expense reporting
                  policy.

                  (c ) Relocation. Employee has agreed that he will relocate his
         primary residence to the Houston, Texas area within six months of the
         date of this agreement. Company has agreed in consideration of such
         relocation that it will (i) reimburse employee up to an aggregate
         maximum of $35,000 for costs actually incurred in connection with such
         relocation (employee may apply up to one half of such amount to procure
         temporary accommodations in Houston prior to such relocation), and (ii)
         Company will pay to Executive a bonus equal to one year of base salary
         within twenty business days of the definitive and final closing of any
         change of control of Comfort Systems USA, Inc. (a transaction that
         results in the sale of a majority of the Comfort's voting capital stock
         or substantially all of Comfort's assets).

         3. Confidentiality.

                  (a) Confidential Information. As used herein, the term
         "Confidential Information" means any information, technical data or
         know-how of the Company, including, but not limited to, that which
         relates to customers, business affairs, business plans, financial
         matters, financial plans and projections, pending and proposed
         acquisitions, operational and hiring matters, contracts and agreements,
         marketing, sales



                                      2
<PAGE>

         and pricing, prospects of the Company, and any information, technical
         data or know-how that contain or reflect any of the foregoing, whether
         prepared by the Company, Executive or any other person or entity;
         provided, however, that the term "Confidential Information" shall not
         include information, technical data or know-how that Executive can
         demonstrate is generally available to the public not as a result of any
         breach of this Agreement by Executive.


                  (b) No Disclosure. Except in the performance of Executive's
         duties as an employee of the Company, Executive will not, during or
         after the term of Executive's engagement with the Company, disclose to
         any person or entity or use, for any reason whatsoever, any
         Confidential Information.

         4. Non-Competition Agreement.

                  (a) Competition. Executive will not, during the period of
         Executive's employment by or with the Company, and for a period of
         twelve months immediately following the termination of Executive's
         employment, for any reason whatsoever, directly or indirectly, on
         behalf of Executive or on behalf of or in conjunction with any other
         person, company, partnership, corporation or business of whatever
         nature:

                           (i) engage, as an officer, director, shareholder,
                  owner, partner, joint venturer, or in a managerial capacity,
                  whether as an employee, independent contractor, consultant or
                  advisor, or as a sales representative, or make or guarantee
                  loans or invest in or for any business engaged in Services in
                  competition with the Company within 100 miles of where the
                  Company conducts or has conducted business during the Term
                  (the "Territory");

                           (ii) call upon any person who is, at that time,
                  within the Territory, an employee of the Company in a
                  technical, managerial or sales capacity for the purpose or
                  with the intent of enticing such employee away from or out of
                  the employ of the Company;

                           (iii) call upon any person or entity which is, at
                  that time, or which has been, within two (2) years prior to
                  that time, a customer of the Company for the purpose of
                  soliciting or selling Services;

                           (iv) call upon any prospective acquisition candidate,
                  on Executive's own behalf or on behalf of any competitor,
                  which candidate was either called upon by the Executive on
                  behalf of the Company or for which the Executive made an
                  acquisition analysis on behalf of the Company for the purpose
                  of acquiring such entity.

         Notwithstanding the above, the foregoing covenants shall not be deemed
         to prohibit Executive from acquiring as an investment not more than one
         percent (1%) of the capital



                                       3
<PAGE>

         stock of a competing business whose stock is traded on a national
         securities exchange or on an over-the-counter or similar market.

                  (b) No Violation. It is specifically agreed that the period
         during which the agreements and covenants of Executive made in this
         Section 4 shall be effective shall be computed by excluding from such
         computation any time during which Executive is in violation of any
         provision of this Section 4.

         5. Term; Termination; Rights on Termination. The term of this Agreement
shall begin on the date hereof and continue for two (2) (the "Term"), unless
terminated sooner as herein provided. Beginning on the second anniversary and
thereafter on each anniversary this Agreement shall renew for consecutive
one-year terms unless either party shall give the other notice at least 30 days
prior to such anniversary. This Agreement and Executive's employment may be
terminated in any one of the following ways:

                  (a) Death. The death of Executive shall immediately terminate
         this Agreement with no severance compensation due to Executive's
         estate.

                  (b) Disability. If, as a result of incapacity due to physical
         or mental illness or injury, Executive shall have been absent from
         Executive's full-time duties hereunder for four (4) consecutive months,
         then thirty (30) days after receiving written notice (which notice may
         occur before or after the end of such four (4) month period, but which
         shall not be effective earlier than the last day of such four (4) month
         period), the Company may terminate Executive's employment hereunder,
         provided Executive is unable to resume Executive's full-time duties at
         the conclusion of such notice period. In the event this Agreement is
         terminated as a result of Executive's disability, Executive shall
         receive from the Company Executive's base salary at the rate then in
         effect for the lesser of the time period remaining under the Term of
         this Agreement or for one (1) year, and such amount shall be payable
         during such period in a manner consistent with Company's standard pay
         practices. The amount payable hereunder shall be decreased by the
         amount of benefits otherwise actually paid by the Company to Executive
         or on Executive's behalf or under any insurance procured by the
         Company.

                  (c) Good Cause. The Company may terminate this Agreement ten
         (10) days after written notice to Executive for good cause, which shall
         include any of the following: (i) Executive's willful or material
         breach of this Agreement; (ii) Executive's failure to perform any of
         his material duties following notice by the Company to Executive of
         such improper performance and Executive's failure to correct the
         improper performance to the satisfaction of the Company within a
         reasonable time; (iii) Executive's gross negligence in the performance
         or intentional nonperformance of any of Executive's material duties and
         responsibilities hereunder; (iv) Executive's willful dishonesty, fraud
         or misconduct with respect to the business or affairs of the Company or
         any other member of the Comfort Group; (v) Executive's conviction of a
         felony crime; (vi) Executive's confirmed positive illegal drug test
         result; (vii) sexual harassment by Executive; or (viii) willful or
         material failure by Executive to comply with Comfort's Corporate
         Compliance Policy or



                                       4
<PAGE>

         other Company policies. In the event of a termination for good cause,
         as enumerated above, Executive shall have no right to any severance
         compensation.

                  (d) Without Cause. At any time after the commencement of
         Executive's employment, Executive or the Company may, without cause,
         terminate this Agreement and Executive's employment, effective thirty
         (30) days after receipt of written notice. Should Executive be
         terminated by the Company without cause, Executive shall receive from
         the Company Executive's base salary at the rate then in effect for one
         (1) year, and such amount shall be payable during such period in a
         manner consistent with the Company's standard pay practices.

         6. Return of Company Property. All records, plans, manuals, "field
guides", memoranda, lists, documents, statements and other property delivered to
Executive by or on behalf of the Company, by any customer of the Company
(including but not limited to, any such customers obtained by Executive), by any
acquisition candidate of the Company, and all records compiled by Executive
which pertain to the business or activities of the Company shall be and remain
the property of the Company and shall be subject at all times to its discretion
and control. Likewise, all correspondence with customers, representatives or
acquisition candidates, reports, records, charts, advertising materials, and any
data collected by Executive, or by or on behalf of the Company or any
representative of the Company shall be delivered promptly to the Company without
request by it upon termination of Executive's engagement with the Company.

         7. Inventions. Executive shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by
Executive, solely or jointly with another, during the period of Executive's
employment or within one (1) year thereafter, and which are directly related to
the business or activities of the Company or which Executive conceives as a
result of Executive's employment by the Company. Executive hereby assigns and
agrees to assign all Executive's interests therein to the Company or its
nominee. Whenever requested to do so by the Company, Executive shall execute any
and all applications, assignments or other instruments that the Company shall
deem necessary to apply for and obtain Letters Patent of the United States or
any foreign country or to otherwise protect the Company's interest therein.

         8. Trade Secrets. Executive agrees that Executive will not, during or
after the Term, disclose the specific terms of the Company's relationships or
agreements with significant vendors or customers or any other significant and
material trade secret of the Company, whether in existence or proposed, to any
person, firm, partnership, corporation or business for any reason or purpose
whatsoever.

         9. No Prior Agreements. Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive and Executive's
employment by the Company and the performance of Executive's duties hereunder
will not violate or be a breach of any agreement with a former employer, client
or any other person or entity. Further, Executive agrees to indemnify the
Company for any claim, including, but not limited to, attorneys' fees and





                                       5
<PAGE>

expenses of investigation, by any such third party that such third party may now
have or may hereafter come to have against the Company based upon or arising out
of any non-competition agreement, invention or secrecy agreement between
Executive and such third party which was in existence as of the date of this
Agreement.

         10. Assignment; Binding Effect. Executive understands that Executive
has been selected for employment by the Company on the basis of Executive's
personal qualifications, experience and skills. Executive agrees, therefore,
that Executive cannot assign all or any portion of Executive's performance under
this Agreement. Executive, Executive's spouse and the estates of each shall not
have any right to encumber or dispose of any right to receive payments
hereunder, it being understood that such payments and the right thereto are
nonassignable and nontransferable; provided, however in the event of the death
of Executive, any payments that Executive is entitled to receive may be assigned
to the beneficiaries of Executive's estate. Subject to the preceding three (3)
sentences and the express provisions of Section 11 below, this Agreement shall
be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, legal representatives, successors and
assigns.

         11. Complete Agreement. Executive has no oral representations,
understandings or agreements with the Company or any of its officers, directors
or representatives covering the same subject matter as this Agreement. This
Agreement is the final, complete and exclusive statement and expression of the
agreement between the Company and Executive and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements.

         12. Amendment; Waiver. This Agreement may not be modified except in
writing signed by the parties, and no term of this Agreement may be waived
except by a writing signed by the party waiving the benefit of such terms. No
waiver by the parties hereto of any default or breach of any term, condition or
covenant of this Agreement shall be deemed to be a waiver of any subsequent
default or breach of the same or any other term, condition or covenant contained
herein.

         13. Notice. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:

         To the Company:          Comfort Systems USA, Inc.
                                  Three Riverway, Suite 200
                                  Houston, TX 77056
                                  Attention: General Counsel

         To Executive:            David Lanphar
                                  99 N. Post Oak Lane #7203
                                  Houston, TX 77024



                                       6
<PAGE>


Notice shall be deemed given and effective on the earlier of five (5) days after
the deposit in the U.S. mail of a writing addressed as above and sent first
class mail, certified, return receipt requested, or when actually received.
Either party may change the address for notice by notifying the other party of
such change in accordance with this Section 13.

         14. Severability; Enforceability. If any portion of this Agreement is
held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth in any
covenant contained herein are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the court
deems reasonable, and this Agreement shall thereby be reformed. Each of the
covenants contained in this Agreement shall be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of Executive against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of such covenants.

         15. Survival. The provisions and covenants of Sections 3, 4, 6, 7 and 8
shall survive termination of this Agreement.

         16. Specific Performance. Because of the difficulty of measuring
economic losses to the Company as a result of a breach of the covenants
contained in Sections 3, 4, 6, 7 and 8 and because of the immediate and
irreparable damage that could be caused to the Company for which it would have
no other adequate remedy, Executive agrees that the Company shall be entitled to
specific performance and that such covenants may be enforced by the Company in
the event of any breach or threatened breach by Executive, by injunctions,
restraining orders and other appropriate equitable relief. Executive further
agrees to waive any requirement for the securing or posting of any bond in
excess of $50,000 in connection with the obtaining of any such injunctive or any
other equitable relief.

         17. Arbitration. With the exception of Sections 4 and 8, any unresolved
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted by a single arbitrator in
Houston, Texas, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA") then in
effect, provided that the parties may agree to use arbitrators other than those
provided by the AAA. The arbitrators shall not have the authority to add to,
detract from, or modify any provision hereof nor to award punitive damages to
any injured party. The arbitrators shall have the authority to order back pay,
severance compensation, reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon. A decision by the arbitrator shall
be final and binding. Judgment may be entered on the arbitrator's award in any
court having jurisdiction. Responsibility for bearing the cost of the
arbitration shall be determined by the arbitrator and shall be proportional to
the arbitrator's decision on the merits.

         18. Attorney's Fees. If any litigation is instituted to enforce or
interpret the provisions of this Agreement or the transactions described herein,
the prevailing party in such action shall be



                                       7
<PAGE>

entitled to recover such party's reasonable attorneys' fees and other costs from
the other party hereto.

         19. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas.

         20. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.


EXECUTIVE:                             COMPANY:

                                       COMFORT SYSTEMS USA, INC.



/s/ David Lanphar                      /s/ William Murdy
-----------------                      -----------------
David Lanphar                          William Murdy
                                       President





                                       8

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>h98970exv10w2.txt
<DESCRIPTION>WAIVER OF THE CREDIT AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2

                                     WAIVER


         This Waiver dated as of May 10, 2002 ("Waiver") is among Comfort
Systems USA, Inc., a Delaware corporation (the "Company"), the Subsidiaries of
the Company listed on the signature pages hereto as Guarantors, the banks and
other financial institutions listed on the signature pages attached hereto (the
"Banks"), BANK ONE, N.A., individually as a Bank ("BOT") and as Administrative
Agent for the other Banks (in such capacity, the "Administrative Agent"),
BANKERS TRUST COMPANY, individually as a Bank and as Syndication Agent for the
other Banks, BANK OF AMERICA, N.A., individually as a Bank and as Documentation
Agent for the other Banks, CREDIT LYONNAIS NEW YORK BRANCH, individually as a
Bank and as 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.
Capitalized terms not defined herein shall have the meaning assigned to such
terms in the Credit Agreement.

                                  INTRODUCTION

         A. The Company, the Guarantors, the Administrative Agent, the Co-Agents
and the Banks are parties to that certain Fourth Amended and Restated Credit
Agreement dated as of March 22, 2001 as amended by that certain First Amendment
thereto dated as of February 8, 2002 (the "Credit Agreement").

         B. Section 8.15 of the Credit Agreement requires the Company's EBITDA
for the fiscal quarter ending March 31, 2002 to equal or exceed the amount of
$3,332,850.00. The Company has informed the Administrative Agent, Co-Agents and
the Banks that its EBITDA for such fiscal quarter will not equal or exceed such
amount; accordingly, there has occurred an Event of Default under Section 8.15
of the Credit Agreement.

         C. The Company has requested a one time waiver of the Event of Default
described in paragraph B above.

         D. The Administrative Agent, Co-Agents and the Banks are agreeable to
such requests upon the terms and conditions herein stated.

         THEREFORE, the Company, the Guarantors, the Administrative Agent, the
Co-Agents and the Banks hereby agree as follows:

     1.  The Banks hereby waive the Event of Default arising under Section 8.15
of the Credit Agreement solely by virtue of the Company's failure to achieve
EBITDA for the fiscal quarter ending March 31, 2002 of at least $3,332,850.00.

     2.  This Waiver shall be effective as of March 31, 2002 when the
Administrative Agent shall have received duly executed counterparts hereof
signed by the Company, the Guarantor and the Majority Banks (or, in the case of
any party as to which an executed counterpart shall not have been received, the
Administrative Agent shall have received telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party).

                                       -1-
<PAGE>

     3.  This Waiver is limited solely to the purposes and to the extent
provided herein and shall have no applicability to any obligation of the Company
except those described in Section 8.15 of the Credit Agreement which relate
solely to the fiscal quarter ending March 31, 2002. This Waiver shall not be
construed to be a waiver, except as specifically provided in paragraph 1 of this
Waiver, (i) of any term, condition or provision of the Credit Agreement or (ii)
of any Event of Default or Default that has or may have occurred or occurs other
than as specified in paragraph 1. Except as specifically provided herein, the
Credit Agreement will continue in full force and effect.

     4.  This Waiver (i) shall be binding on the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and their respective successors and assigns, (ii) may not be amended,
terminated or otherwise modified except by written consent of each party hereof,
(iii) may be executed in multiple counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument
and (iv) constitutes the entire agreement among the parties hereto with respect
to the matters addressed herein.

     5.  Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT THAT THE
LAWS OF THE UNITED STATES OF AMERICA AND ANY RULES, REGULATIONS OR ORDERS ISSUED
OR PROMULGATED THEREUNDER APPLICABLE TO THE AFFAIRS AND TRANSACTIONS OF THE
BANKS OTHERWISE PREEMPT TEXAS LAW, IN WHICH EVENT SUCH FEDERAL LAW SHALL
CONTROL.

     6.  Final Agreement of the Parties. THIS AGREEMENT, THE CREDIT AGREEMENT AS
AMENDED HEREBY AND THE OTHER LOAN DOCUMENTS CONSTITUTE A "LOAN AGREEMENT" AS
DEFINED IN SECTION 26.02(A) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


                                       -2-

<PAGE>

         EXECUTED effective as of May 10, 2002.

                                          COMPANY:

                                          COMFORT SYSTEMS USA, INC.



                                          By: /s/ William George
                                             -----------------------------------
                                                  William George
                                                  Senior Vice President


         By their execution of this Waiver below, the Guarantors acknowledge and
agree that their respective Guaranteed Obligations under the Credit Agreement
remain in full force and effect, unchanged by this Waiver.



                                       -3-
<PAGE>
                                GUARANTORS:

                                ACI MECHANICAL, INC.
                                ACCU-TEMP GP, INC.
                                ACCU-TEMP LP, INC.
                                ACCU-TEMP, LLC, by Accu-Temp LP, Inc.,
                                managing member
                                AIR SOLUTIONS USA, INC.
                                ARC COMFORT SYSTEMS USA, INC.
                                (fka  American Refrigeration Contractors, Inc.)
                                BATCHELOR'S MECHANICAL CONTRACTORS, INC.
                                BCM CONTROLS CORPORATION
                                CARSON BROTHERS, INC.
                                CEL, INC. (Casey Electric)
                                CENTRAL MECHANICAL, INC.
                                COMFORT SYSTEMS USA G.P., INC.
                                COMFORT SYSTEMS USA (ARKANSAS), INC.
                                (fka River City Mechanical, Incorporated)
                                COMFORT SYSTEMS USA (BRISTOL), INC.
                                (fka Fred Hayes Mechanical Contractors, Inc.)
                                COMFORT SYSTEMS USA (CLEVELAND), INC.
                                (fka Tech Heating and Air Conditioning, Inc.)
                                COMFORT SYSTEMS USA (HARTFORD), INC.
                                (fka The Harvey Robbin Company)
                                COMFORT SYSTEMS USA (INTERMOUNTAIN), INC.
                                (fka Contract Service, Inc.)
                                COMFORT SYSTEMS USA (OREGON), INC.
                                (fka A.C.I. Mechanical USA, Inc.)
                                COMFORT SYSTEMS USA (PHILADELPHIA), INC.
                                (fka Lower Bucks Cooling and
                                Heating Corporation)
                                COMFORT SYSTEMS USA (SOUTH BOSTON), INC.
                                (fka Climate Control, Inc.)
                                COMFORT SYSTEMS USA (SYRACUSE), INC.
                                (fka Armani Plumbing & Mechanical, Inc.)
                                COMFORT SYSTEMS USA (TEXAS), L.P., by
                                Comfort Systems USA G.P., Inc.,
                                sole general partner
                                COMFORT SYSTEMS USA (TWIN CITIES), INC.
                                (fka EDS, Inc.)
                                COMFORT SYSTEMS USA (WESTERN MICHIGAN), Inc.
                                (restructure River City Mechanical,
                                Inc. and H&H Plumbing & Heating, Inc.)

                                      -4-
<PAGE>
                                DESIGN MECHANICAL INCORPORATED
                                EASTERN HEATING & COOLING, INC.
                                EASTERN REFRIGERATION CO., INC.
                                ESS ENGINEERING, INC.
                                GULFSIDE MECHANICAL, INC.
                                H & M MECHANICAL, INC.
                                HELM CORPORATION
                                HELM CORPORATION SAN DIEGO
                                HESS MECHANICAL CORPORATION
                                INDUSTRIAL COOLING INC.
                                J & J MECHANICAL, INC.
                                JAMES AIR CONDITIONING ENTERPRISE INC.
                                MARTIN HEATING, INC.
                                MECHANICAL SERVICE GROUP, INC. (Page)
                                MJ MECHANICAL SERVICES, INC.
                                NEEL MECHANICAL CONTRACTORS, INC.
                                NORTH AMERICAN MECHANICAL, INC.
                                OK SHEET METAL AND AIR CONDITIONING, INC.
                                PLANT SERVICES INCORPORATED
                                QUALITY AIR HEATING & COOLING, INC.
                                ROSS & ASSOCIATES, INC.
                                S&K AIR CONDITIONING CO., INC.
                                S.I. GOLDMAN COMPANY, INC.
                                S.M. LAWRENCE COMPANY, INC.
                                SA ASSOCIATES, INC. (formerly
                                Salmon & Alder, Inc.)
                                SALMON & ALDER, LLC, by
                                SA Associates, Inc., sole member
                                SEASONAIR, INC.
                                SOUTHERN BLUEGRASS MECHANICAL, INC.
                                STANDARD HEATING & AIR CONDITIONING COMPANY
                                SUPERIOR MECHANICAL SYSTEMS
                                TARGET CONSTRUCTION, INC.
                                TEMP-RIGHT SERVICE, INC.
                                THE CAPITAL REFRIGERATION COMPANY
                                TRI-CITY MECHANICAL, INC.
                                TROOST SERVICE CO.
                                WEATHER ENGINEERING, INC.
                                WESTERN BUILDING SERVICES, INC.

                                By: /s/ William George
                                   --------------------------
                                     William George
                                     Vice President

                                      -5-
<PAGE>


                                ATLAS-ACCURATE HOLDINGS, L.L.C.
                                ATLAS-ACCURATE HOLDINGS, L.L.C., as
                                the  sole general partner of
                                Accurate Air Systems, L.P.
                                (restructure of Accurate Air Systems, Inc.)
                                Atlas Air Conditioning Company, L.P.
                                (restructure of Atlas Air Conditioning Company
                                and Atlas Comfort Services USA, Inc.)
                                Mechanical Technical, L.P.
                                United Environmental Services, L.P.
                                (restructure of United Environmental
                                Services, Inc./UES Conversion Corporation)



                                By:  COMFORT SYSTEMS USA, INC.,
                                          sole member



                                By: /s/ William George
                                   --------------------------
                                     William George
                                     Vice President


                                      -6-

<PAGE>
                                        ADMINISTRATIVE AGENT/BANK:


                                        BANK ONE, NA,
                                        as Administrative Agent and Individually
                                        as a Bank


                                        By: /s/ John A. Horst
                                           ----------------------------
                                        Name:  John Horst
                                        Title: Director




                                      -7-
<PAGE>

                                        SYNDICATION AGENT/BANK:

                                        BANKERS TRUST COMPANY,
                                        as Syndication Agent and Individually
                                        as a Bank


                                        By: /s/ Alexander Bici
                                           -----------------------------
                                        Name:  Alexander Bici
                                        Title: Vice President


                                      -8-

<PAGE>


                                        DOCUMENTATION AGENT/BANK:

                                        BANK OF AMERICA, N.A. (formerly known
                                        as NationsBank, N.A.), as Documentation
                                        Agent and Individually, as a Bank


                                        By: /s/ Michael W. Colon
                                           -----------------------------
                                        Name:  Michael W. Colon
                                        Title: Principal


                                      -9-



<PAGE>
                                        CO-AGENT/BANK:

                                        CREDIT LYONNAIS NEW YORK BRANCH,
                                        as Co-Agent and Individually as a Bank


                                        By: /s/ Attila Koc
                                        Name:  Attila Koc
                                           -----------------------------
                                        Title: Senior Vice President




                                      -10-


<PAGE>
                                        CO-AGENT/BANK:

                                        NATIONAL CITY BANK,
                                        as Co-Agent and Individually, as a Bank


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



                                      -11-


<PAGE>


                                        CO-AGENT/BANK:

                                        THE BANK OF NOVA SCOTIA,
                                        as Co-Agent and Individually, as a Bank



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


                                      -12-



<PAGE>
                                        BANK:

                                        UNION BANK OF CALIFORNIA, N.A.



                                        By: /s/ J. Scott Jessup
                                           -----------------------------
                                        Name:  J. Scott Jessup
                                        Title: Vice President


                                      -13-



<PAGE>


                                        BANK:

                                        COMERICA BANK



                                        By: /s/ William S. Rogers
                                           -----------------------------
                                        Name:  William S. Rogers
                                        Title: Vice President


                                      -14-



<PAGE>
                                        BANK:

                                        BANK POLSKA, KASA OPIEKI S.A., PEKOA
                                        S.A. GROUP, New York Branch


                                        By: /s/ Barry W. Henry
                                           -----------------------------
                                        Name:  Barry W. Henry
                                        Title: Vice President


                                      -15-



<PAGE>
                                        BANK:

                                        FIRSTAR BANK, NATIONAL ASSOCIATION



                                        By: /s/ William J. Hronek
                                           -----------------------------
                                        Name:  William J. Hronek
                                        Title: Senior Vice President



                                      -16-


<PAGE>
                                        BANK:

                                        LASALLE BANK NATIONAL ASSOCIATION



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



                                      -17-

<PAGE>

                                        BANK:

                                        GENERAL ELECTRIC CAPITAL
                                        CORPORATION



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


                                      -18-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>h98970exv10w3.txt
<DESCRIPTION>AMEND.TO NON-EMPLOYEE DIRECTORS' STOCK PLAN
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.3

                            COMFORT SYSTEMS USA, INC.
                     1997 NON-EMPLOYEE DIRECTORS' STOCK PLAN

                                    Amendment

     Pursuant to Section 9 of the Comfort Systems USA, Inc. 1997 Non-Employee
Directors' Stock Plan (the "Plan") and pursuant to a vote of the Board of
Directors of Comfort Systems USA, Inc. (the "Company") and, in the case of the
amendments described at paragraphs 1 and 2 below, subsequent stockholder
approval, the Plan has been amended as follows, effective as set forth in
paragraph 4 below:

     1.   The first sentence of Section 3 of the Plan is amended to read as
          follows:

             "Subject to adjustment as provided in Section 8, the total number
             of Shares reserved and available for issuance under the Plan is
             500,000."

     2.   The second and third sentences of Section 6 of the Plan are amended to
          read as follows:

             "In addition, an Option to purchase 10,000 Shares, subject to
             adjustment as provided in Section 8, will be automatically granted,
             at the close of business of each annual meeting of stockholders of
             the Company, to each member of the Board of Directors who is
             eligible under Section 5 at the close of business of such annual
             meeting. Notwithstanding the foregoing, any person who was
             automatically granted an Option to purchase 10,000 Shares at the
             effective date of the initial election to the Board of Directors
             shall not be automatically granted an Option to purchase 10,000
             Shares at the first annual meeting of stockholders following such
             initial election if such annual meeting takes place within three
             months of the effective date of such persons' initial election to
             the Board of Directors."

     3.   Section 7(f) of the Plan is deleted in its entirety.

     4.   The amendment made by paragraph 3 above shall take effect as of March
          22, 2002. The amendments made by paragraphs 1 and 2 above shall take
          effect as of May 23, 2002 and shall be deemed to have been in effect
          at the close of the annual meeting of stockholders held on that date.
<PAGE>
IN WITNESS WHEREOF, Comfort Systems USA, Inc. has caused this instrument to be
executed by its duly authorized officer this 23rd day of May, 2002.


                                    COMFORT SYSTEMS USA, INC.

                                    By: /s/ William F. Murdy
                                        ------------------------
                                        William F. Murdy
                                        Chairman of the Board, and
                                        Chief Executive Officer


                                      -2-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>h98970exv99w1.txt
<DESCRIPTION>CERTIFICATION OF WILLIAM F. MURDY, CEO
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.1


                            CERTIFICATION PURSUANT TO
            SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as
chief executive officer of Comfort Systems USA, Inc. (the "Company"), does
hereby certify that:

     1)  the Company's Quarterly Report pursuant to Section 13 or 15 (D) of the
         Securities Exchange Act Of 1934 (Form 10-Q) for the quarter ended June
         30, 2002 fully complies with the requirements of Section 13(a) or 15(d)
         of the Securities Exchange Act of 1934; and

     2)  the information contained in the Company's Form 10-Q fairly presents,
         in all material respects, the financial condition and results of
         operations of the Company.


                                       By: /s/ William F. Murdy
                                          ------------------------
                                       William F. Murdy
                                       Chairman of the Board and
                                       Chief Executive Officer


Dated: August 13, 2002


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>7
<FILENAME>h98970exv99w2.txt
<DESCRIPTION>CERTIFICATION OF J. GORDON BEITTENMILLER, CFO
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.2


                            CERTIFICATION PURSUANT TO
            SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as
chief financial officer of Comfort Systems USA, Inc. (the "Company"), does
hereby certify that:

     1)  the Company's Quarterly Report pursuant to Section 13 or 15 (D) of the
         Securities Exchange Act Of 1934 (Form 10-Q) for the quarter ended June
         30, 2002 fully complies with the requirements of Section 13(a) or 15(d)
         of the Securities Exchange Act of 1934; and

     2)  the information contained in the Company's Form 10-Q fairly presents,
         in all material respects, the financial condition and results of
         operations of the Company.


                                       By: /s/ J. Gordon Beitteniller
                                          ---------------------------
                                       J. Gordon Beittenmiller
                                       Executive Vice President and
                                       Chief Financial Officer


Dated: August 13, 2002







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