Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 51

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 51
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 is insufficient historical exercise data to provide a reasonable basis on which to estimate expected term. Under the simplified method, the expected term is calculated as the midpoint between the vesting period and the contractual term.•Expected Volatility: The expected volatility is based on the historical equity volatility of a group of publicly traded guideline companies with similar size and industry characteristics, and is adjusted for differences in leverage, size, and stage of development, as well as volatility studies considering recent IPOs.•Risk-free rate: The risk-free interest rate is based on the United States Treasury yield curve in effect at the grant date, corresponding to the expected term of the stock options.•Dividend yield: The estimated dividend yield is zero as the Company does not currently intend to declare dividends in the foreseeable future. Earnings Per ShareThe Company calculates basic and diluted earnings per share ("EPS") in accordance with ASC Topic 260, Earnings Per Share, for the periods following the IPO and Corporate Reorganization. Basic EPS is calculated using Net income (loss) attributable to Legence divided by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted EPS is calculated using Net income (loss) attributable to Legence divided by the weighted-average number of shares of Class A Common Stock outstanding during the period, adjusted to give effect to potentially dilutive securities. The effect of potentially dilutive securities is not included in the computation of diluted EPS for periods in which there is a Net loss attributable to Legence, because to do so would be anti-dilutive. Class B Common Stock does not have economic rights in the Company, including no rights to dividends or distributions upon liquidation, and as a result, is 

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Legence Corp.Notes to Condensed Consolidated Financial Statements - (Continued)(Unaudited)

not considered a participating security for basic and diluted EPS. As such, basic and diluted EPS of Class B Common Stock has not been presented. The Company's potentially dilutive securities consist of (i) unvested and unexercised RSUs and stock options, with the dilutive effect calculated using the treasury stock method, and (ii) exchange of LGN B Units to shares of Class A Common Stock, with the dilutive effect calculated using the if-converted method.Refer to "Note 13—Earnings Per Share" for additional information.Tax Receivable AgreementIn connection with the IPO and Corporate Reorganization, the Company entered into a TRA with Legence Parent and Legence Parent II (the “TRA Members