Company: LGN
Filing Date: 2025-12-09
Form Type: S-1
Source: 0001193125-25-312729
Chunk: 105

Company: Legence Corp.
Filing Date: 2025-12-09
Form: S-1
Chunk 105
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 as vehicles, computer equipment,
leasehold improvements, tools and other equipment. The amortization of our intangible assets includes tradenames, customer relationships, contract backlog, and right of use assets of our finance leases.

Goodwill Impairment

Goodwill
impairment includes the expense recorded in a reporting period for impairment when we determine that the carrying value of goodwill exceeds its fair value. We conduct our annual goodwill impairment testing at the beginning of our fourth quarter each
year.

Equity in Earnings of Joint Venture

Equity in earnings of joint venture reflects our share of joint venture income or loss, as well as any impairment loss. Distributions received
from the joint venture investment are accounted for under the cumulative earnings approach, which compares our cumulative distributions received from the joint venture against our cumulative equity in earnings of joint venture.

Interest Expense, Net of Capitalized Interest

Interest expense includes interest on the indebtedness, amortization of deferred debt issuance costs and debt issuing discounts, as well as
gains and losses from interest rate related derivative instruments.

Interest Income

Interest income includes interest earned on our cash balances and short-term marketable securities.

Credit Agreement Amendment Fees

Credit agreement amendment fees represent costs incurred in connection with our debt refinancings or amendments.

Income Tax (Benefit) Expense

We
are subject to federal, state and local taxes based on income in the jurisdictions in which we operate. Accordingly, our effective tax rate is subject to significant variation due to several factors, including variability

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in our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, changes in how we do business, acquisitions, tax audit
developments, changes in our deferred tax assets and liabilities, changes in statutes, regulations, case law and administrative practices, principles and interpretations related to tax and relative changes of expenses or losses for which tax
benefits are not recognized.

Legence Parent is treated as a partnership for federal and state income tax purposes and indirectly owns
100% of the shares of multiple corporations. As a result, the members of Legence Parent are taxed individually on their proportionate share of our income or losses. The corporations owned by Legence Parent are subject to entity level taxation and,
as a result, provision for federal, state and local income taxes.

Income taxes for these entities are provided for under the asset and
liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax basis of assets and liabilities using enacted tax