Company: LGN
Filing Date: 2025-02-14
Form Type: DRS
Source: 0000950123-25-002471
Chunk: 250

Company: Legence Corp.
Filing Date: 2025-02-14
Form: DRS
Chunk 250
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 has material contract asset and liability balances. Contract assets represent revenue recognized in excess of amounts paid or payable to the Company on uncompleted contracts for which the right to bill is conditional on something other than the passage of time (e.g., the Company’s future performance on uncompleted contracts or performance obligations). Contract liabilities represent the Company’s obligation to perform on uncompleted contracts for which the Company has received payment. Contract assets and contract liabilities in the Consolidated Balance Sheet consist of the following amounts (in thousands):

| Contract assets:     |     | December 31, 
 2023         |         |     | 2022 |        |
|:---------------------|:----|:-------------|--------:|:----|:-----|-------:|
| Contract assets, net |     | $            | 125,373 |     | $    | 91,481 |
| Other assets         |     | $            |   1,772 |     | $    |  1,007 |
| Contract liabilities |     | $            | 164,598 |     | $    | 94,711 |

F-21

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

Contract assets include $83.1 million and $49.4 million of contract retentions as of
December 31, 2023 and December 31, 2022, respectively. Contract retentions included in contract assets are generally subject to substantial project completion and acceptance by the customer.

Contract assets and liabilities fluctuate based on factors that occur in the normal course of business, including the volume of projects in progress at period
end, the timing of negotiated payment terms, billing frequency and other differences in payment terms relative to revenue recognition.

The Company
recognized $10.3 million of contract assets and $22.2 million of contract liabilities related to acquisitions completed during the year ended December 31, 2023. The remaining increase in contract assets from December 31, 2022 to
December 31, 2023 is primarily due to the overall increase in the Company’s volume of project activity, reflected in increased total revenue for the year ended December 31, 2023, particularly in the Installation & Maintenance
segment. The increase in contract liabilities from December 31, 2022 to December 31, 2023 is due to the