Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 50

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 50
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.S. Treasury yield for a term consistent with the expected life. The total equity value was calculated based on the full market capitalization of the 

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Legence Corp.Notes to Condensed Consolidated Financial Statements - (Continued)(Unaudited)

Company. The expected volatility assumption is based on the volatility of guideline public companies, adjusted for the Company’s size and leverage. Since Legence Parent and Legence Parent II do not have a history or expectation of future recurring dividends and there are no contractual dividends associated with the equity interests, the expected dividend yield assumption is nil.Prior to the IPO, the Company utilized the OPM and the hybrid method to determine the fair value of these awards using certain assumptions. The expected life assumption represents the period of time the interests are expected to be outstanding while the risk-free rate is based on the U.S. Treasury yield for a term consistent with the expected life. The expected volatility assumption is based on the volatility of guideline public companies, adjusted for the Company’s size and leverage. Since the interests do not have a provision for recurring distributions and the issuing entities do not have a history or expectation of future recurring distributions, the expected dividend yield assumption is nil. The hybrid method incorporates various future outcomes and allocates the value in each scenario using the OPM, which included IPO scenarios and delayed exit scenarios. Refer to "Note 1—Nature of Operations and Basis of Presentation" and “Note 11—Stock-Based Compensation” for additional information and further disclosures regarding stock-based compensation.RSUs and Stock OptionsThe Company accounts for RSUs and stock options based on their grant date fair value. RSUs and stock options are subject to service-based vesting conditions, and the corresponding stock-based compensation expense is recognized on a straight-line basis. The Company has elected to account for forfeitures as they occur for both the RSUs and the stock options.The Company uses the price of its Class A Common Stock on the date of grant as the fair value for RSUs. The Company estimates the fair value of stock options granted under the Omnibus Incentive Plan on the grant date using a Black-Scholes option-pricing model. The assumptions and estimates used as part of the Black-Scholes option-pricing model are as follows:•Stock price: The price of the Company's Class A Common Stock generally at the grant date.•Exercise price: The exercise price as stated per the terms of the option agreements.•Expected Term: The Company uses the simplified method for determining the expected term of stock options, as there