Company: LGN
Filing Date: 2025-04-30
Form Type: DRS/A
Source: 0000950123-25-003868
Chunk: 133

Company: Legence Corp.
Filing Date: 2025-04-30
Form: DRS/A
Chunk 133
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83 Interest Expense, Net of Capitalized Interest The increase in interest expense, net of capitalized interest is primarily attributable to additional borrowings. This includes $155.0 million of borrowings under the Term Loan Credit Facility during 2023, as well as the full year impact of $146.7 million of borrowings under the Term Loan Credit Facility during 2022. Income Tax Expense (Benefit) Income tax benefit was $7.9 million in the year ended December 31, 2023, and the effective tax rate was 14.5%, as compared to income tax expense of $7.6 million in the year ended December 31, 2022 and an effective tax rate of negative 10.3%. These rates are lower than the federal statutory rate of 21%. The effective tax rate in the year ended December 31, 2023 was primarily due to a significant portion of the pre-taxloss being generated by pass-through entities that are not subject to income taxes at the Company level, partially offset by favorable return-to-provisionadjustments in the tax paying C corporations. The effective tax rate in the year ended December 31, 2022 was primarily due to a significant portion of the pre-taxloss being generated by pass-through entities that are not subject to income taxes at the Company level and to taxable income in the tax paying C corporations. Non-GAAPFinancial Measures Self-Perform Contribution, Self-Perform Margin, Adjusted EBITDA and Adjusted EBITDA Margin are financial measures not presented in accordance with GAAP but are intended to provide useful and supplemental information to investors and analysts as they evaluate our performance. Self-Perform Contribution is a financial measure that management historically has used and continues to use to evaluate our financial performance by analyzing the fees for services that are performed or managed by our workforce separately from the work that is performed by our subcontractors. Self-Perform Contribution is defined as revenue less Subcontractor Expense. Self-Perform Margin is defined as Adjusted EBITDA divided by Self-Perform Contribution. Management believes this is a helpful measure to evaluate the efficiency and profitability of the service teams we employ and manage directly. EBITDA is defined as earnings before interest and other financing expenses, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude goodwill impairment, net loss on sale and disposition of property and equipment, changes in the fair value of contingent consideration liabilities, acquisition and integration costs, system deployment costs, strategic initiative costs, stock