Company: LGN
Filing Date: 2025-09-02
Form Type: S-1/A
Source: 0001193125-25-193346
Chunk: 285

Company: Legence Corp.
Filing Date: 2025-09-02
Form: S-1/A
Chunk 285
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 exercise the option to terminate. Short-term leases, which are leases with an initial term of 12 months or less or
leases that are cancellable by the lessee and lessor without significant penalties, are not recorded on the Consolidated Balance Sheets and are expensed on a straight-line basis over the lease term.

For leases of real estate, the Company elected not to separate the accounting for lease and non-lease components. For
all other lease asset classes, the Company separates the accounting for lease and non-lease components.

Please
refer to “” for additional lease information and disclosures.

F-22

Legence Holdings LLC and Subsidiaries

Notes to Consolidated Financial Statements

Member’s Equity

Contributions to the Company from the Parent and distributions from the Company to the Parent are accounted for by the Company as adjustments to Member’s
equity. Additionally, Parent may issue Parent interests to the Company’s employees or to other parties in connection with certain transactions, which the Company accounts for as a capital contribution from or on behalf of Parent recorded
within Member’s equity.

Please refer to “” for additional information related to equity.

Stock-Based Compensation

Parent issues Series A profits
interests (“Series A Profits Interests”) awards and Restricted Series C common interests (“Restricted Series C Common Interests”) awards as compensation to the Company’s employees. Because these Parent interests are
issued to the Company’s employees, are indexed and settled in Parent interests, and the Company does not reimburse the Parent for the awards, the Company accounts for these awards as stock-based payment awards under ASC Topic 718,
Compensation—Stock Compensation(“ASC 718”).The Company recognizes compensation expense for equity-classified awards at their fair value measured as of the grant date. The Company recognizes compensation expense for
liability-classified awards at their fair value measured as of the reporting date, with an offset to stock-based compensation liability in Other long-term liabilities on the Consolidated Balance Sheets.

Series A Profits Interests awards are comprised of time vesting (60%) (“Time Interests”), performance vesting (20%) (“Performance
Interests”), and exit vesting (20%) (“Exit Interests”). Time Interests and Restricted Series C Common Interests are service based awards, and the Company accounts for these awards as liability-classified awards under ASC 718. The
awards are liability-classified due to a below fair value repurchase feature that is exercisable by the Parent under certain employment termination scenarios. The Company recognizes compensation