PHIBRO ANIMAL HEALTH CORP Leases Disclosure
7. Leases
Our lease portfolio consists of real estate, vehicles and equipment ROU assets, classified as operating leases. The remaining non-cancelable lease terms, inclusive of renewal options reasonably certain of exercise, range from to 20 years.
The following table summarizes the ROU assets and the related lease liabilities recorded on the consolidated balance sheet:
As of June 30 |
| 2025 |
| 2024 |
| Balance Sheet Classification | ||
Assets: |
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Operating lease ROU assets | $ | 41,339 | $ | 37,604 |
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Liabilities: |
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Current portion |
| 9,127 |
| 7,460 |
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Non-current portion |
| 33,740 |
| 29,915 |
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Total operating lease liabilities | $ | 42,867 | $ | 37,375 |
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The following table summarizes the composition of net lease expense:
For the Year Ended June 30 |
| 2025 | 2024 |
| 2023 | ||||
Operating lease expense | $ | 9,809 | $ | 8,888 | $ | 8,363 | |||
Variable lease expense |
| 2,059 |
| 1,150 |
| 1,139 | |||
Short-term lease expense |
| 1,477 |
| 1,397 |
| 1,522 | |||
Total lease expense | $ | 13,345 | $ | 11,435 | $ | 11,024 | |||
The following tables include other supplemental information:
For the Year Ended June 30 |
| 2025 |
| 2024 | 2023 | ||||
Operating cash flows used for ROU operating leases | $ | 9,670 | $ | 8,231 | $ | 7,798 | |||
Non-cash changes to ROU operating assets and lease liabilities | $ | 11,458 | $ | 9,283 | $ | 5,114 | |||
As of June 30 |
| 2025 |
| 2024 | |
Weighted average remaining lease term (in years) - operating leases |
| 9.1 | 9.6 | ||
Weighted average discount rate - operating leases |
| 5.01 | % | 4.73 | % |
At June 30, 2025 maturities of future lease liabilities were:
For the Years Ending June 30 |
| ||
2026 | $ | 10,151 | |
2027 |
| 8,157 | |
2028 |
| 6,232 | |
2029 |
| 4,459 | |
2030 |
| 3,613 | |
2031 and thereafter |
| 19,315 | |
Total lease payments |
| 51,926 | |
Less: interest |
| 9,059 | |
Total operating lease liabilities | $ | 42,867 |
There were no significant future payment obligations related to executed lease agreements for which the related lease had not yet commenced as of June 30, 2025. Our lease agreements do not contain any material restrictive covenants or residual value guarantee provisions.
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.