Company: LGN
Filing Date: 2025-12-09
Form Type: S-1
Source: 0001193125-25-312729
Chunk: 260

Company: Legence Corp.
Filing Date: 2025-12-09
Form: S-1
Chunk 260
---
 operations.

Results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that will be realized for the
year ended December 31, 2025, or for any future period.

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation

The unaudited Condensed
Consolidated Financial Statements include the accounts of Legence Corp., its wholly owned subsidiaries and certain Variable Interest Entities (“VIE”) of which the Company is the primary beneficiary. The Company assesses whether it is the
primary beneficiary of a VIE, which is the case if the Company, in combination with its related parties, has both (1) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and
(2) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. When the Company is deemed to be the primary beneficiary, the VIE is consolidated and the interest in the VIE held by a
third-party is accounted for as a noncontrolling interest. For VIEs that are not consolidated, the Company accounts for its investments using the equity method.

All intercompany accounts and transactions have been eliminated.

Refer to “Note 6—Variable Interest Entities and Equity Method Investments” for additional information.

Deferred Offering Costs

Offering costs include legal,
accounting, printing, and other third-party fees that were incremental and directly related to the Company’s IPO. Prior to the completion of the IPO, the Company deferred $28.4 million of offering costs within Other assets on the
Condensed Consolidated Balance Sheets. Upon completion of the IPO, these costs were reclassified into Additional paid-in capital as a reduction against the proceeds received from the IPO.

Stock-Based Compensation

Series A Interests and Restricted Series C Interests

Management Aggregator I and Management Aggregator II issue Series A Interests and Restricted Series C Interests to the
Company’s employees. As their value is indexed to the value of the Company’s Class A Common

F-15

Legence Corp.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Stock and settled in Management Aggregator I and Management Aggregator II interests or assets, and the Company does not reimburse these entities for the awards, the Company accounts for these
awards as stock-based payment awards under ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). The Company recognizes