Company: LGN
Filing Date: 2025-12-09
Form Type: S-1
Source: 0001193125-25-312729
Chunk: 309

Company: Legence Corp.
Filing Date: 2025-12-09
Form: S-1
Chunk 309
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 joint venture, presented in the Company’s Consolidated Statements of Operations, reflects the Company’s share of joint venture income or loss, as well as
any impairment loss. Distributions received from the joint venture investment are accounted for under the cumulative earnings approach, which compares the Company’s cumulative distributions received from the joint venture against its
cumulative equity in earnings of joint venture. The Company assesses its equity method investments for impairment if there are changes in facts and circumstances that indicate a loss in value may have occurred. If a loss is deemed to have occurred
and the loss is determined to be other than temporary, the carrying value of the equity method investment is written down to fair value and an impairment recorded. An immaterial impairment charge was recorded for the year ended December 31,
2024. No impairment charge was recorded for the year ended December 31, 2023.

Insurance

Legence maintains insurance for general liability, workers’ compensation, automobile liability and professional liability, subject to
policy limits. Most of the Company’s insurance policies also include deductibles. The Company has umbrella and excess coverage attached to these policies that insure the Company for certain amounts in excess of the related insurance policy
limits. The Company is self-insured for its medical coverage and is covered by stop-loss insurance for claims in excess of a contractual limit.

Insurance liabilities are estimated based on (i) reported claims and (ii) amounts incurred but not reported. The liability for
reported claims is estimated by evaluating the facts and circumstances of each claim and are adjusted from time to time based upon the status of each claim and the Company’s historical experience with similar claims. The liability for amounts
incurred but not reported is estimated each reporting period by a third-party and includes provisions for expected claims to be reported in the future but which have occurred prior to the accounting date. Insurance liabilities are reflected in the
Consolidated Balance Sheets in Accrued and other current liabilities. Any adjustments to these liabilities are recorded in the Consolidated Statements of Operations.

Debt Issuance Costs

The Company has
obtained debt financing using term loans, delayed draw term loan (“DDTL”) commitments, and a revolving line of credit. Debt issuance costs incurred to obtain financing are amortized over the expected term of the underlying debt.
Unamortized debt issuance costs related to term loans are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of Long-term debt, net of current portion, consistent with debt discounts, and amortized using the