Company: LGN
Filing Date: 2025-08-25
Form Type: S-1/A
Source: 0001193125-25-186788
Chunk: 282

Company: Legence Corp.
Filing Date: 2025-08-25
Form: S-1/A
Chunk 282
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 such measurement and expensed as incurred. As the rate implicit in the lease is not readily determinable, the Company uses its
incremental borrowing rate for initial measurement. The incremental borrowing rate represents the rate of interest the Company would pay to borrow on a collateralized basis, over a similar term, an amount equal to the lease payments as of the
commencement date.

The lease term is the non-cancellable period of the lease, including the period covered by
options to renew the lease when it is reasonably certain that the Company will exercise the option. Many real estate leases contain options to renew or terminate the lease, generally at the Company’s discretion; however, options are often not
included in the lease term as the Company is not reasonably certain to exercise the options to renew or is reasonably certain not to exercise the option to terminate. Short-term leases, which are leases with an initial term of 12 months or less or
leases that are cancellable by the lessee and lessor without significant penalties, are not recorded on the Consolidated Balance Sheets and are expensed on a straight-line basis over the lease term.

For leases of real estate, the Company elected not to separate the accounting for lease and non-lease components. For
all other lease asset classes, the Company separates the accounting for lease and non-lease components.

Please
refer to “” for additional lease information and disclosures.

F-22

Legence Holdings LLC and Subsidiaries

Notes to Consolidated Financial Statements

Member’s Equity

Contributions to the Company from the Parent and distributions from the Company to the Parent are accounted for by the Company as adjustments to Member’s
equity. Additionally, Parent may issue Parent interests to the Company’s employees or to other parties in connection with certain transactions, which the Company accounts for as a capital contribution from or on behalf of Parent recorded
within Member’s equity.

Please refer to “” for additional information related to equity.

Stock-Based Compensation

Parent issues Series A profits
interests (“Series A Profits Interests”) awards and Restricted Series C common interests (“Restricted Series C Common Interests”) awards as compensation to the Company’s employees. Because these Parent interests are
issued to the Company’s employees, are indexed and settled in Parent interests, and the Company does not reimburse the Parent for the awards, the Company accounts for these awards as stock-based payment awards under ASC Topic 718,
Compensation—Stock Compensation(“ASC 718”).The Company recognizes compensation expense for equity-classified awards at