Company: LGN
Filing Date: 2025-12-09
Form Type: S-1
Source: 0001193125-25-312729
Chunk: 338

Company: Legence Corp.
Filing Date: 2025-12-09
Form: S-1
Chunk 338
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 respectively. The fair value of the term loan as of December 31, 2024 and 2023 was derived by taking the mid-pointof the trading prices from observable market inputs in the secondary bond market for the term loan (Level 2 measurement) and multiplying it by the outstanding face value of the term loan. The carrying value of the term loan as of December 31, 2024 and 2023 was $1,576.5 million and $1,021.8 million, respectively; see “ Note 9—Debt.” F-83

The estimated fair value of the promissory notes in Notes payable included in Total debt as shown in “ Note 9—Debt” as of December 31, 2024 and 2023 is approximately $19.4 million and $18.2 million, respectively. The fair value was calculated using a discounted cash flow methodology under the income approach, using interest rate curves, risk premiums, and adjustments for the size and subordination of the instrument (Level 3 measurement). The carrying value of promissory notes in Notes payable included in Total debt as of December 31, 2024 and 2023 was $22.7 million and $20.8 million, respectively. The carrying value of the remaining Notes payable and Finance lease liabilities approximates fair value as of December 31, 2024 and 2023. Note 11—Derivatives I nterest Rate Swaps:The Company has multiple interest rate swap agreements designated as cash flow hedges. The Company utilizes these interest rate swap agreements to reduce exposure to fluctuations in variable interest rates for future interest payments on its term loan. The total notional amount is $815.0 million and $675.0 million as of December 31, 2024 and 2023, respectively. During the first quarter of 2023, the Company amended the swap agreements to transition its benchmark interest from LIBOR to SOFR. Failure of the interest rate swap counterparties to make payments may result in the loss of any potential benefit to the Company under the interest rate swap agreements. The Company mitigates risk of non-performanceby counterparties by dealing with highly rated counterparties. The Company does not use financial instruments for trading or speculative purposes. Additional information regarding the accounting policies and relevant fair value information for the Company’s interest rate swaps can be found in “ Note 2—Summary of Significant Accounting Policies” and “ Note 10—Fair Value Measurements.” The fair value of