Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 17

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 17
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 the amortization of intangible assets, primarily from the impact of acquisitions completed during 2024. 

Interest Expense 

The increase in interest expense is primarily attributable to higher average borrowings during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Loss on debt extinguishment 

The loss on debt extinguishment is due to accelerated amortization of debt issuance costs related to the early debt payment of $780.3 million during the nine months ended September 30, 2025.

Income Tax Expense

Income tax expense was $13.7 million for the nine months ended September 30, 2025, and resulted in an effective tax rate of negative 152.4%, as compared to an income tax expense of $9.5 million for the nine months ended September 30, 2024 and an effective tax rate of 16,666.7%. For the nine months ended September 30, 2025, the effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to the loss before income tax from pass-through business not subject to income taxes at the Company level. For the nine months ended September 30, 2024, the effective tax rate was higher than the U.S. federal statutory rate of 21%, primarily due to the loss before income tax from pass-through business not subject to income taxes at the Company level.

Liquidity and Capital Resources

Overview 

As of September 30, 2025 and December 31, 2024, our primary sources of liquidity included cash and cash equivalents of $176.0 million and $81.2 million, respectively, and $84.8 million available to be borrowed under the revolving credit facility and cash flows from operations as of September 30, 2025 and December 31, 2024. Our revolving credit facility capacity was increased on October 30, 2025 (see "Debt" below). We expect our primary sources of liquidity to be cash flows from operations, borrowings incurred under our revolving credit facility or proceeds from offerings of debt or equity securities. Access to additional liquidity, such as a further increase in the capacity under our existing revolving credit facility or a new financing arrangement, will be dependent upon our future financial position and debt market conditions. Refer to "Recent Developments" above for information related to our IPO. 

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To date, our primary uses of capital have included funding working capital, capital expenditures