Company: LGN
Filing Date: 2025-11-03
Form Type: DRS
Source: 0001193125-25-262782
Chunk: 259

Company: Legence Corp.
Filing Date: 2025-11-03
Form: DRS
Chunk 259
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 AOCI will be reclassified to Interest expense, net of capitalized interest in the current period.

Leases

The Company leases real estate,
vehicles and equipment. The Company determines whether the arrangement is or contains a lease at the inception of the contract and classifies leases as either operating or finance at the lease commencement date.

The Company records right-of-use assets and corresponding
lease liabilities for its leases, which are initially recognized based on the present value of lease payments over the lease term. Right-of-use assets also include
initial direct costs incurred, lease payments made at or before the commencement date, less any lease incentives received. When measuring the right-of-use asset and
lease liability, fixed payments and variable payments that depend on an index or a rate are included. Other variable payments are excluded from 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.

F-21

Confidential Treatment Requested by Legence Corp.

Pursuant to 17 C.F.R. Section 200.83

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.

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