Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 79

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 79
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 to September 30, 2025, as there is net loss attributable to Legence, and to do so would be anti-dilutive.Anti-dilutive securities which could potentially dilute EPS in the future are set forth below (in thousands):September 12, 2025 through September 30, 2025Stock options669RSUs620LGN B Units exchangeable for Class A Common Stock46,681

Note 14 - Tax Receivable Agreement

In connection with the IPO and Corporate Reorganization, the Company entered into the TRA with the TRA Members, which are related parties. The TRA generally provides for the payment by the Company to the TRA Members of 85% of the net cash tax savings, if any, in U.S. federal, state and local income tax the Company realizes, or is deemed to realize, as a result of the Company’s (i) allocable share of existing tax basis acquired in connection with the IPO and increases to such allocable share of existing tax basis; (ii) the utilization of certain tax attributes of the blocker entities; (iii) increases in tax basis resulting from future redemptions or exchanges (or deemed exchanges in certain circumstances) of Legence Holdings interests for Class A Common Stock or cash and certain distributions (or deemed distributions) by Legence Holdings pursuant to the Exchange Agreement; and (iv) certain additional tax benefits arising from payments made under the Tax Receivable Agreement. The Company retains the benefit of the remaining 15% of these cash savings, if any. Payments under the TRA are not conditioned upon any continued ownership interest in Legence Holdings or the Company. 

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

The Company recorded an undiscounted liability of $146.5 million as of September 30, 2025 for TRA obligations that are both probable and reasonably estimable under ASC Topic 450, Contingencies. Based on the expected date of payment, the Company recorded $146.5 million in Tax receivable agreement liability as of September 30, 2025.The timing and amount of aggregate payments under the TRA may vary based on a number of factors, including the Company’s future taxable income, future exchanges of LGN B Units for Class A Common Stock, the fair market value of assets at the time of each exchange, and the enacted tax rates applicable in the periods when deductions are realized. The Company estimates its obligation using