Company: LGN
Filing Date: 2025-08-25
Form Type: S-1/A
Source: 0001193125-25-186788
Chunk: 279

Company: Legence Corp.
Filing Date: 2025-08-25
Form: S-1/A
Chunk 279
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 for the years ended December 31, 2024, 2023 or 2022.

Equity Method Investments

The Company has investments in a number of joint ventures, some of which are VIEs. For VIEs where the Company is not the primary beneficiary, the Company
accounts for its investments using the equity method of accounting. Any investment in a joint venture that is not a VIE and for which the Company has investments between 20% and 50% is accounted for using the equity method of accounting when the
Company has the ability to exercise significant influence, but not control. The joint venture investments are included in Other assets on the Consolidated Balance Sheets and are adjusted for contributions made, distributions received, impairments
and the Company’s share of income or loss. Equity in earnings of joint venture, presented in the Company’s Consolidated Statements of Operations, reflects the Company’s 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 the Company’s cumulative distributions received from the joint venture against its cumulative
equity in earnings of joint venture. The Company assesses its equity method investments for impairment if there are changes in facts and circumstances that indicate a loss in value may have occurred. If a loss is deemed to have occurred and the loss
is determined to be other than temporary, the carrying value of the equity method investment is written down to fair value and an impairment recorded. An immaterial impairment charge was recorded for the year ended December 31, 2024. No
impairment charge was recorded for the year ended December 31, 2023.

F-20

Legence Holdings LLC and Subsidiaries

Notes to Consolidated Financial Statements

Insurance

Legence maintains insurance for general liability, workers’ compensation, automobile liability and professional liability, subject to policy limits. Most
of the Company’s insurance policies also include deductibles. The Company has umbrella and excess coverage attached to these policies that insure the Company for certain amounts in excess of the related insurance policy limits. The Company is
self-insured for its medical coverage and is covered by stop-loss insurance for claims in excess of a contractual limit.

Insurance liabilities are
estimated based on (i) reported claims and (ii) amounts incurred but not reported. The liability for reported claims is estimated by evaluating the facts and circumstances of each claim and are adjusted from time to time based upon the
status of