Company: LGN
Filing Date: 2025-08-25
Form Type: S-1/A
Source: 0001193125-25-186788
Chunk: 278

Company: Legence Corp.
Filing Date: 2025-08-25
Form: S-1/A
Chunk 278
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 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-19

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 determined that a triggering event had occurred for long lived assets related to a reporting unit in the Engineering &
Consulting segment. The triggering event occurred as a result of a decline in projected cash flows due to lower revenue projections, among other factors. Lower revenue projections primarily reflected the impact of delayed contract awards and the
uncertainty that revenue will be realized for these contracts which are point-in-time revenue recognition contracts. The triggering event resulted in the performance of a recoverability test for the long-lived assets in the related asset group prior
to assessing goodwill for impairment. The Company determined that the estimated undiscounted cash flows were sufficient to cover the carrying values and concluded that no impairments were necessary. No impairment charge was recorded against
long-lived assets