Company: LGN
Filing Date: 2025-05-14
Form Type: DRS/A
Source: 0000950123-25-005247
Chunk: 34

Company: Legence Corp.
Filing Date: 2025-05-14
Form: DRS/A
Chunk 34
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, including those about future economic conditions, our overhead costs, the utilization and availability of labor, equipment and materials and other exigencies. We could
experience cost overruns if these estimates are originally inaccurate as a result of errors or ambiguities in the contract specifications or become inaccurate as a result of a change in circumstances following the submission of the estimate due to,
among other things, unanticipated technical or equipment problems, difficulties in obtaining permits or approvals, changes in local laws or labor conditions, weather delays, changes in the costs of raw materials or the inability of our vendors or
subcontractors to perform their obligations within budget.

If cost overruns occur, we could experience reduced profits or, in some cases,
a loss for that project. If a project is significant, or if there are one or more common issues that impact multiple projects, costs overruns could increase the unpredictability of our earnings, as well as have a material adverse impact on our
business, financial condition and results of operations. When cost overruns occur due to factors outside of our control, we may be able to recoup our revenues through change order; however, this process is subject to negotiations with the relevant
client or customer.

Certain of our contracts require us to satisfy specific design, engineering, procurement or construction
milestones in order to receive payment for the work completed or equipment or supplies procured prior to achievement of the applicable milestone. As a result, under these types of arrangements, we may incur significant costs or perform significant
amounts of services prior to receipt of payment. If a client determines not to proceed with the completion of the project or if the client defaults on its payment obligations, we may face difficulties in collecting payment of amounts due to us for
the costs previously incurred or for the amounts previously expended to purchase equipment or supplies.

Accounting for a contract
requires judgments relative to assessing the contract’s estimated risks, revenue, costs and other technical issues. Due to the size and nature of many of our contracts, the estimation of overall

22

Confidential Treatment Requested by Legence Corp.

Pursuant to 17 C.F.R. Section 200.83

risk, revenue and cost at completion is complicated and subject to many variables. Changes in underlying assumptions, circumstances or estimates may also adversely affect future period financial
performance. If we are unable to accurately estimate the overall revenue or costs on a contract, then we may experience a lower profit or incur a loss on the contract.

A failure to secure new contracts may adversely affect our cash