Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 154

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 154
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 related to the deductibles of insurance policies. Please 
 refer to “Note 9—Debt” in the Notes to Consolidated Financial Statements for further information.                                                                                                                                                         |

| • |     | Payments for collective bargaining agreements, multiemployer pension plan liabilities and liabilities related to                                                                                             
 our deferred compensation and other employee benefit plans, as discussed in “Note 13— Stock-Based Compensation” and “Note 14—Union-Sponsored Pension Plans and Other Employee Benefit Plans” in the Notes to 
 Consolidated Financial Statements.                                                                                                                                                                           |

Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our Consolidated Financial Statements. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Our significant accounting policies are discussed in the “Note 2—Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to areas involving a significant level of estimation uncertainty and have had or are likely to have a material impact on our financial statements. 111

Revenue Recognition

The Company recognizes revenue at the time the related performance obligation is satisfied by transferring the promised good or service to its
customers. A good or service is considered to be transferred when the customer obtains control. The Company can transfer control of a good or service and satisfy its performance obligations either over time or at a point in time, though the majority
of the Company’s contracts have over time performance obligations.

Management has concluded performance obligations related to
construction and service contracts are satisfied over time because the Company’s performance typically creates or enhances an asset that the customer controls. The Company primarily measures the progress toward complete satisfaction of the
performance obligation(s) using an input method (i.e., “cost-to-cost”), though some contracts use an output method (i.e., “milestone
achievement”) when our performance does not produce significant amounts of work in process prior to complete satisfaction of such performance obligation(s).

The accuracy of the Company’s revenue and profit recognition in each year at the balance sheet date depends on the accuracy of
management’s estimates of the cost to complete each project as well as variable consideration. There are several factors that can