Company: LGN
Filing Date: 2025-11-03
Form Type: DRS
Source: 0001193125-25-262782
Chunk: 139

Company: Legence Corp.
Filing Date: 2025-11-03
Form: DRS
Chunk 139
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, (iii) attrition rate of customers, and (iv) the
estimated discount rates that reflect the level of risk associated with receiving future cash flows. The significant assumptions used in estimating fair value of trade names include discount rates and estimated royalties that would be paid to
license a comparable asset. The royalty rates used in this method are based on published comparable market royalty transactions.

Refer to
“Note 2—Summary of Significant Accounting Policies” and “Note 4—Acquisitions” in the Notes to Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements for further information on
valuation methods, inputs and assumptions.

93

Confidential Treatment Requested by Legence Corp.

Pursuant to 17 C.F.R. Section 200.83

Recent Accounting Pronouncements

See “Note 2—Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements and Notes to
Condensed Consolidated Financial Statements included elsewhere in this prospectus for more information regarding recent accounting pronouncements.

Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we are exposed to financial risks such as changes in interest rates and inflation risk associated with our
input costs. We utilize derivative instruments, classified as cash flow hedges, to manage interest rate exposures on our floating rate debt.

Interest Rate Risk

Our exposure
to market risk for changes in interest rates relates primarily to our long-term debt. The interest expense associated with our long-term debt will vary with market rates. We seek to mitigate this risk with an appropriate amount of fixed rate debt
obligations through interest rate derivative contracts that fix the interest rate on the respective floating rate debt obligations. Without taking into consideration the effect of our interest rate swap agreements, based upon our outstanding
principal amount of floating rate debt of $1,590.4 million as of December 31, 2024 and $1,582.1 million as of June 30, 2025, an increase in the current interest rate levels of 1% would result in an increase in our annual interest
expense of $15.9 million and $15.8 million, respectively.

Inflation Risk

While inflation pressures have recently and relatively subsided, rising or consistently high rates of inflation, including as a result of
geopolitical tensions and trade wars, have the potential to increase costs of labor and other inputs for our services. We have experienced, and may experience in the future, higher than expected inflation, including escalating transportation,
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