Company: LGN
Filing Date: 2025-07-15
Form Type: DRS/A
Source: 0000950123-25-006399
Chunk: 281

Company: Legence Corp.
Filing Date: 2025-07-15
Form: DRS/A
Chunk 281
---
 typically do not constitute a significant financing component.

4) Allocate the transaction price to the performance obligations

For contracts that contain multiple performance obligations, the transaction price is allocated to each performance obligation based on their estimated
relative standalone selling prices. The Company generally estimates standalone selling price using the expected costs plus a margin.

5) Recognize revenue as performance obligations are satisfied

The Company recognizes revenue when or as a performance obligation is satisfied, which occurs when
the customer obtains control of the good or service. This can occur over time or at a point in time.

F-26

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 Company satisfies most performance obligations over time because the Company’s performance typically
either creates or enhances an asset the customer controls or because the customer simultaneously receives and consumes the benefit from the Company’s performance under the contract.

For most contracts, the Company measures progress using the input method (i.e.,
“Cost-to-Cost Input Method”). Under the Cost-to-Cost Input Method, costs
incurred to date are generally the best depiction of transfer of control. For some contracts, the Company has historically used an output method (i.e., milestone achievement), where an output method provides the most reliable information available
and the transfer of services at predetermined project milestones reasonably depicts the fulfillment of performance obligations. This determination requires judgment based on the nature of the services to be provided. For the years ended
December 31, 2024, 2023, and 2022, revenue recognized under the output method represented 2.3%, 7.8%, and 9.8% of revenues, respectively.

In
satisfying the Company’s performance obligations to its customers, the Company routinely procures goods and services from third parties that are inputs into an integrated performance obligation typically under fixed-price contracts. Procurement
from third parties often consists of goods and services provided by subcontractors that the Company engages to perform specified tasks on its behalf and/or under its direction. The Company earns a margin related to these costs under either
fixed-margin or fixed-price arrangements with its customers. The Company determined that it is the principal in these arrangements as the Company controls the goods and services provided by third parties, as the Company is primarily responsible for
fulfillment and acceptability by the customer, has inventory risk with respect to goods and services completed by third parties