Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 149

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 149
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 assumptions the market participants would use in pricing the asset or liability based on the best available information. The following table presents the input level used to determine the fair value of the financial instruments measured at fair value on a recurring basis (in thousands):September 30, 2025Level 1Level 2Level 3Assets:Cash equivalents - money market$121,383 $— $— Interest rate swap instruments$— $1,172 $— Liabilities:Interest rate swap instruments$— $1,617 $— December 31, 2024Level 1Level 2Level 3Assets:Cash equivalents - money market$49,217 $— $— Interest rate swap instruments$— $9,248 $— Liabilities:Interest rate swap instruments$— $137 $— The carrying value of Cash approximates fair value due to its short-term nature.Interest Rate Swap Instruments: Additional derivative instrument disclosures for the Company’s interest rate swaps can be found in “Note 9—Derivatives”.For determining the fair value of the interest rate swap contracts, the Company uses significant observable market data or assumptions (Level 2 inputs) that market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk. The fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data, including interest rate curves.Financial Instruments Not Carried at Fair Value: The table below shows the fair value and carrying value of the term loan and promissory notes (a component of notes payable) included in Total debt as shown in "Note 7—Debt" (in thousands):September 30, 2025December 31, 2024Fair ValueCarrying ValueFair ValueCarrying ValueTerm loan$800,405 $792,002 $1,597,825 $1,576,502 Promissory notes$20,085 $22,004 $19,475 $22,646 The fair value of the term loan as of September 30, 2025 and December 31, 2024 was derived by taking the mid-point of the trading prices from observable market inputs in the secondary bond market for the term loan (Level 2 measurement) and multiplying it by the outstanding face value of the term loan.The fair value of the promissory notes as of September 30