Company: LGN
Filing Date: 2025-02-14
Form Type: DRS
Source: 0000950123-25-002471
Chunk: 267

Company: Legence Corp.
Filing Date: 2025-02-14
Form: DRS
Chunk 267
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 Changes in the fair value of contingent consideration are recorded to Changes in the fair value of contingent consideration and Changes in the fair value of contingent consideration—related parties on the Company’s Consolidated Statements of Operations. F-36

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 The following is a Level 3 summary of changes in contingent consideration liabilities as of and for the year ended December 31, 2023 (in thousands):

| Balance, beginning of period                         |     | $ |  41,425 |   |
| Initial fair value for current year acquisitions     |     |   |  13,929 |   |
| Change in fair value included in earnings            |     |   |  31,071 |   |
| Payment of contingent consideration—cash             |     |   | (11,400 | ) |
| Payment of contingent consideration—Parent interests |     |   |  (9,325 | ) |
| Balance, end of period                               |     | $ |  65,700 |   |

The following amounts represent related party activity included in the table above: $13.9 million in Initial fair value for current year acquisitions, $13.4 million in Change in fair value included in earnings, $10.7 million in Payment of contingent consideration—cash, and $9.3 million in Payment of contingent consideration—Parent interests. During the year ended December 31, 2023, the contingent consideration liability for the 2022 Black Bear acquisition increased $27.0 million due to the achievement of the targeted EBITDA, as defined in the purchase agreement. As of December 31, 2023, $50.0 million in contingent consideration liability for Black Bear is included within Accrued and other current liabilities on the Consolidated Balance Sheet and was paid in 2024. Other contingent consideration recognized during the period include $12.0 million and $3.0 million related to the A.O. Reed and OCI acquisitions, respectively. These amounts were also included in Accrued and other current liabilities on the Consolidated Balance Sheet as of December 31, 2023 and were paid in 2024. Cash payments made for the settlement of contingent consideration liabilities are included within the financing section on the Consolidated Statements of Cash Flows for amounts up to the acquisition-date fair value of the liability. Noncash