UNIVERSAL DISPLAY CORP \PA\ Leases Disclosure
The Company has entered into operating leases to facilitate the expansion of its manufacturing, research and development, and selling, general and administrative activities. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when those events are reasonably certain to occur. The interest rate implicit in lease contracts is typically not readily determinable and as such the Company uses the appropriate incremental borrowing rate based on information available at the lease commencement date in determining the present value of the lease payments. Current lease agreements do not contain any residual value guarantees or material restrictive covenants. As of December 31, 2025, the Company did not have any finance leases and no additional operating leases that have not yet commenced.
The following table presents the Company’s operating lease cost and supplemental cash flow information related to the Company’s operating leases (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating lease cost |
|
$ |
3,992 |
|
|
$ |
4,343 |
|
|
$ |
4,639 |
|
Non-cash activity: |
|
|
|
|
|
|
|
|
|
|||
Right-of-use assets obtained in exchange for lease obligations |
|
$ |
4,979 |
|
|
$ |
— |
|
|
$ |
1,072 |
|
The following table presents the Company’s operating lease right-of-use assets and liabilities (in thousands):
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Right-of-use assets |
|
$ |
19,925 |
|
|
$ |
19,867 |
|
|
|
4,752 |
|
|
|
3,848 |
|
|
|
|
19,217 |
|
|
|
19,135 |
|
|
For the years ended December 31, 2025 and 2024, the Company determined to record a right-of-use impairment of $1.6 million and $1.4 million, respectively, due to the closure of OVJP Corp's California location and related restructuring.
The following table presents weighted average assumptions used to compute the Company’s right-of-use assets and lease liabilities:
|
|
December 31, 2025 |
|
|
Weighted average remaining lease term (in years) |
|
|
5.2 |
|
Weighted average discount rate |
|
|
3.9 |
% |
As of December 31, 2025, current operating leases had remaining terms between and six years with options to extend the lease terms.
Undiscounted future minimum lease payments as of December 31, 2025, by year and in the aggregate, having non-cancelable lease terms in excess of one year were as follows (in thousands):
|
|
Maturities of |
|
|
|
|
Operating Lease Liabilities |
|
|
2026 |
|
$ |
5,342 |
|
2027 |
|
|
5,310 |
|
2028 |
|
|
5,012 |
|
2029 |
|
|
3,628 |
|
2030 |
|
|
3,396 |
|
Thereafter |
|
|
3,313 |
|
Total lease payments |
|
|
26,001 |
|
Less: imputed interest |
|
|
(1,758 |
) |
Present value of lease payments |
|
$ |
24,243 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 20, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.