Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 109

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 109
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 increases in tax basis in Legence Holdings’ assets or other tax benefits that may be realized thereunder have been assumed in the unaudited pro forma consolidated financial      
 information. The Tax Receivable Agreement will be accounted for as a contingent liability, with amounts accrued when considered probable and reasonably estimable. The following are the Tax Receivable Agreement adjustments:                           |

| (1) | We will record a deferred tax asset of $    (or $    if the                                                                                                                                                                                     
 underwriters exercise in full their option to purchase additional shares of Class A Common Stock and after giving effect to the application of the net proceeds therefrom). To the extent we estimate that we will not realize the full benefit 
 represented by the deferred tax assets, based on an analysis of expected future earnings, we will reduce deferred tax assets with a valuation allowance;                                                                                        |

| (2) | We will record a $    liability under the tax receivable agreement (or                                                                                                                                              
 $    if the underwriters exercise in full their option to purchase additional shares of Class A Common Stock and after giving effect to the application of the net proceeds therefrom) based on our estimate of the 
 aggregate amount that we will pay to certain of the Existing Owners under the tax receivable agreement as a result of the Offering Transactions; and                                                                |

75

| (3) | We will record an adjustment to additional paid-in capital of                                                                                                                                                        
 $    , the difference between the increase in deferred tax assets and the increase in liabilities due to certain of the Existing Owners under the tax receivable agreement as a result of the Offering Transactions. |

Due to the uncertainty as to the amount and timing of future exchanges of LGN Units by the LGN Unit Holders and as to the price per share of our Class A Common Stock at the time of any such exchanges, the unaudited pro forma condensed consolidated financial information does not assume that exchanges of LGN Units have occurred. Therefore, no increases in tax basis in Legence’s assets or other tax benefits that may be realized as a result of any such future exchanges have been reflected in the unaudited pro forma condensed consolidated financial information. However, if all of the LGN Unit Holders were to exchange their LGN Units for shares of Class A Common Stock and all vested Series A Profits Interests were converted to LGN Units and subsequently exchanged for shares of Class