Company: LGN
Filing Date: 2025-09-02
Form Type: S-1/A
Source: 0001193125-25-193346
Chunk: 327

Company: Legence Corp.
Filing Date: 2025-09-02
Form: S-1/A
Chunk 327
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 for prior acquisitions, the Company does not expect any permanent expiration of net operating losses. As of December 31, 2024, 2023 and 2022, the Company has gross unrecognized tax benefits of $10.4 million, $2.7 million and $2.7 million, respectively, all of which would affect the effective income tax rate if recognized in F-58

Legence Holdings LLC and Subsidiaries Notes to Consolidated Financial Statements future periods. During the year ended December 31, 2024, the Company’s unrecognized tax benefits increased by $7.7 million due to consolidated VIEs that were acquired in the AMA acquisition. The Company anticipates that the unrecognized tax benefits could decrease by as much as approximately $2.5 million over the next 12 months. The Company’s policy is to classify interest and penalties as income tax expense. As of December 31, 2024, the Company has interest and penalty accruals of $1.4 million and $2.9 million, respectively, related to unrecognized tax benefits, of which $1.2 million and $2.9 million, respectively, relate to consolidated VIEs that were acquired in the AMA acquisition. As of December 31, 2023, the Company had no interest or penalty accruals associated with uncertain tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows (in thousands):

|                                                                |     |   |   2024 |     |   |  2023 |     |   |  2022 |
|:---------------------------------------------------------------|:----|:--|-------:|:----|:--|------:|:----|:--|------:|
| Unrecognized tax benefits at the beginning of period           |     | $ |  2,677 |     | $ | 2,677 |     | $ | 2,677 |
| Increases based on tax positions related to the current period |     |   |      — |     |   |     — |     |   |     — |
| Increases based on tax positions related to prior periods      |     |   |  7,681 |     |   |     — |     |   |     — |
| Decreases based on tax positions related to prior periods      |     |   |      — |     |   |     — |     |   |     — |
| Decreases related to cash settlements with taxing authorities  |