Company: LGN
Filing Date: 2025-05-14
Form Type: DRS/A
Source: 0000950123-25-005247
Chunk: 130

Company: Legence Corp.
Filing Date: 2025-05-14
Form: DRS/A
Chunk 130
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 to Black Bear shareholders under the earnout agreement. Goodwill Impairment During the year ended December 31, 2023, it was determined the carrying amount of goodwill for one reporting unit in the Engineering & Consulting segment exceeded fair value, resulting in goodwill impairment charges of $5.1 million. The impairment was primarily driven by a decline in projected cash flows due to lower revenue projections and investments in support functions. During the year ended December 31, 2022, it was determined the carrying amount of goodwill for two reporting units in the Installation & Maintenance segment exceeded fair value, resulting in goodwill impairment charges of $23.4 million. The impairment was primarily driven by a decline in projected cash flows due to lower revenue projections, investments in support functions and increased cost of capital due to rising interest rates. 88

Confidential Treatment Requested by Legence Corp. Pursuant to 17 C.F.R. Section 200.83 Interest Expense, Net of Capitalized Interest The increase in interest expense, net of capitalized interest is primarily attributable to additional borrowings. This includes $155.0 million of borrowings under the Term Loan Credit Facility during 2023, as well as the full year impact of $146.7 million of borrowings under the Term Loan Credit Facility during 2022. Income Tax Expense (Benefit) Income tax benefit was $7.9 million in the year ended December 31, 2023, and the effective tax rate was 14.5%, as compared to income tax expense of $7.6 million in the year ended December 31, 2022 and an effective tax rate of negative 10.3%. These rates are lower than the federal statutory rate of 21%. The effective tax rate in the year ended December 31, 2023 was primarily due to a significant portion of the pre-taxloss being generated by pass-through entities that are not subject to income taxes at the Company level, partially offset by favorable return-to-provisionadjustments in the tax paying C corporations. The effective tax rate in the year ended December 31, 2022 was primarily due to a significant portion of the pre-taxloss being generated by pass-through entities that are not subject to income taxes at the Company level and to taxable income in the tax paying C corporations. Non-GAAPFinancial Measures Self-Perform Contribution, Self-Perform Margin, Adjusted EBITDA and Adjusted EBITDA Margin are financial measures not presented in accordance with GAAP but are intended to provide useful and