Company: LGN
Filing Date: 2025-02-14
Form Type: DRS
Source: 0000950123-25-002471
Chunk: 113

Company: Legence Corp.
Filing Date: 2025-02-14
Form: DRS
Chunk 113
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 contingent consideration liabilities.

76

Confidential Treatment Requested by Legence Corp.

Pursuant to 17 C.F.R. Section 200.83

Depreciation and Amortization

Depreciation and amortization expenses primarily consist of depreciation on property or equipment such as vehicles, computer equipment,
leasehold improvements, tools and other equipment. The amortization of our intangible assets includes tradenames, customer relationships, contract backlog, and right of use assets of our finance leases.

Goodwill Impairment

Goodwill
impairment includes the expense recorded in a reporting period for impairment when we determine that the carrying value of goodwill exceeds fair value. We conduct our annual goodwill impairment testing at the beginning of our fourth quarter each
year.

Interest Expense

Interest expense includes interest on the indebtedness, amortization of deferred debt issuance costs and debt issuing discounts, as well as
gains and losses from interest rate related derivative instruments.

Income Tax (Expense) Benefit

We are subject to federal, state and local taxes based on income in the jurisdictions in which we operate. Accordingly, our effective tax rate
is subject to significant variation due to several factors, including variability in our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, changes in how we do business,
acquisitions, tax audit developments, changes in our deferred tax assets and liabilities, changes in statutes, regulations, case law and administrative practices, principles and interpretations related to tax and relative changes of expenses or
losses for which tax benefits are not recognized.

Legence Parent is treated as a partnership for federal and state income tax purposes
and indirectly owns 100% of the shares of multiple corporations. As a result, the members of Legence Parent are taxed individually on their proportionate share of our income or losses. The corporations owned by Legence Parent are subject to entity
level taxation and, as a result, provision for federal, state and local income taxes.

Income taxes for these entities are provided for
under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized.

Factors Affecting the Comparability of Our Financial Results

Our future results of operations may not be comparable to the historical results of operations