Company: LGN
Filing Date: 2025-02-14
Form Type: DRS
Source: 0000950123-25-002471
Chunk: 81

Company: Legence Corp.
Filing Date: 2025-02-14
Form: DRS
Chunk 81
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N Unit Holders, and the tax distributions that Legence Holdings will be required to make may be substantial.

Legence Holdings will be treated as a partnership for U.S. federal tax purposes and, as such, is not subject to U.S. federal income tax.
Instead, taxable income will be allocated to the LGN Unit Holders and us. Pursuant to the Legence Holdings LLC Agreement, Legence Holdings will generally make pro rata cash distributions, or tax distributions, to the LGN Unit Holders and us,
calculated using the highest marginal tax rate applicable to . However, the board of managers of Legence Holdings may determine to increase the tax rate applicable to tax distributions by Legence Holdings.

Funds used by Legence Holdings to satisfy its tax distribution obligations will not be available for reinvestment in our business. Moreover,
the tax distributions that Legence Holdings will be required to make may be substantial. As a result of (i) potential differences in the amount of net taxable income allocable to us and to the LGN Unit Holders, (ii) the tax rate applicable
to and (iii) certain tax benefits that we anticipate from (a) future purchases or redemptions of LGN Units from the LGN Unit Holders, and (b) payments under the Tax Receivable Agreement, these tax distributions
may be in amounts that exceed our tax liabilities. Our board of directors will determine the appropriate uses for any excess cash so accumulated, which may include, among other uses, the payment of obligations under the Tax Receivable Agreement and
the payment of other expenses. We will have no obligation to distribute such cash (or other available cash) to our stockholders. To the extent we do not distribute such excess cash as dividends on our Class A Common Stock we may take other
actions with respect to such excess cash, for example, holding such excess cash, contributing such cash to Legence Holdings in exchange for additional LGN Units or lending it (or a portion thereof) to Legence Holdings. The LGN Unit Holders may
benefit from any value attributable to such cash balances if they acquire shares of Class A Common Stock in exchange for their LGN Units, notwithstanding that such LGN Unit Holders may have participated previously as LGN Unit Holders in
distributions that resulted in such excess cash balances.

Risks Related to This Offering

If the underwriters exercise their option to purchase additional shares of Class A Common Stock from us, the proceeds will be used to purchase or redeem outstanding