Company: LGN
Filing Date: 2025-05-14
Form Type: DRS/A
Source: 0000950123-25-005247
Chunk: 134

Company: Legence Corp.
Filing Date: 2025-05-14
Form: DRS/A
Chunk 134
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or Expense represents the                                                                                                                                        
 cost of third-party contractors that we use and is included in Cost of Revenue. We typically incur Subcontractor Expense in connection with the provision of construction management services. On jobs where we use subcontractors, we may pass those 
 costs directly through to our customers or include them in our overall price for the job.                                                                                                                                                             |

| (2) | We define Self-Perform Contribution as revenue less Subcontractor Expense. |

| (3) | We define Self-Perform Margin as Adjusted EBITDA divided by Self-Perform Contribution. |

Backlog and Awarded Contracts and Book-to-BillRatio We track backlog and awarded contracts. We believe that these measures enable us to more effectively forecast our future results and working capital needs, as well as better identify future operating trends that may not otherwise be apparent. We believe this measure is also useful for investors in forecasting our future results and comparing us to our competitors. We also track our book-to-billratio, based on backlog and awarded contracts, for the same reasons. Our backlog is equivalent to our remaining performance obligations. As a result, there are no adjustments being made that would be reflected in a reconciliation. Our methodology for calculating backlog and awarded contracts or book-to-billratio may not be consistent with methodologies used by other companies. Our backlog and awarded contracts measure has two components: backlog and awarded contracts. Backlog represents, as of any date of determination, the expected revenue values of the remaining performance obligations under our contracted fixed-price projects. Awarded contracts represents as of any date of determination, the expected revenue values of projects awarded to us following a request for proposals but for which a formal contract has not yet been signed. We only include fixed-price contracts in our backlog and awarded contracts because they 91

Confidential Treatment Requested by Legence Corp. Pursuant to 17 C.F.R. Section 200.83 have defined revenue values. We do not include cost-plus contracts, including maintenance service contracts, in our backlog and awarded contracts, because their total revenue values are not known. Historically, cost-plus projects have comprised a relatively small portion of our revenue. We calculate our book-to-bill ratio by taking our additions to backlog and awarded contracts, excluding additions that were attained through acquisition, for the period, and dividing it by revenue from fixed-price contracts for the same period. A book-to-bill ratio of 1.0 indicates that we are booking backlog and awarded contracts at the same pace as we are recognizing revenue, suggesting stable