Company: LGN
Filing Date: 2025-04-30
Form Type: DRS/A
Source: 0000950123-25-003868
Chunk: 261

Company: Legence Corp.
Filing Date: 2025-04-30
Form: DRS/A
Chunk 261
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 may choose to bypass the qualitative assessment and proceed directly to the quantitative assessment. An impairment loss is recognized for a reporting unit to the extent fair value is less than the carrying value, limited to the amount of goodwill allocated to that reporting unit. Fair values of reporting units are estimated based on a market approach and an income approach. The income approach utilizes discounted future cash flows and assumptions critical to the fair value estimate of the discounted cash flow model including the revenue growth rate, forecasted margins, and discount rate. The market approach utilizes market multiples of invested capital from comparable publicly traded companies. The market multiples from invested capital include revenue, book equity plus debt, and earnings before interest, provision for income taxes, depreciation and amortization (“EBITDA”). If an impairment loss is determined, the loss is recognized in the Consolidated Statements of Operations. The Company completed its annual goodwill impairment test as of October 1, 2024. See “ Note 5— Goodwill and Intangible Assets” for additional information regarding Goodwill. F-14

Confidential Treatment Requested by Legence Corp.

Pursuant to 17 C.F.R. Section 200.83

Legence Holdings LLC and Subsidiaries

Notes to Consolidated Financial Statements

Intangible Assets, Net

The Company’s identifiable intangible assets include customer relationships, trade names, and contract backlog. All finite-lived identifiable intangible
assets are subject to amortization on a straight-line basis over their estimated lives. Refer to “” for additional information regarding intangible assets.

Long-Lived Assets Impairment

Long-lived assets, which
include property and equipment, operating lease right-of-use assets, and intangible assets subject to amortization, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability generally is determined by comparing the carrying value of an asset group to the expected undiscounted future cash flows of the asset
group. If the carrying value of an asset group exceeds its expected undiscounted future cash flows (i.e., not recoverable), the amount of impairment loss is measured as the difference between the carrying value of the asset group and its estimated
fair value generally using the expected discounted future cash flows. During the fourth quarter of 2024, the Company recognized a goodwill impairment related to a reporting unit in the Engineering & Consulting segment. This goodwill
impairment, among other factors, was a triggering event resulting in the performance of a recoverability test for