Public Policy Holding Company, Inc.PPHC

Public Policy Holding Company, Inc. Leases Disclosure

10-KFiled Mar 31, 20262 min read
LEASES
The Company leases office space and equipment under non-cancelable operating leases, which may include renewal or termination options that are reasonably certain of exercise. Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company subleases office space to third parties under separate sublease agreements, which are generally month-to-month leases.
The Company uses our incremental borrowing rate on the commencement date in determining the present value of its lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, if readily determinable, or using the Company's collateralized credit-adjusted borrowing rate.
The following table presents lease costs and other quantitative information:
Year Ended December 31,
20252024
Operating lease cost (cost resulting from lease payments)$5,793 $5,322 
Variable lease cost (cost excluded from lease payments)582 435 
Sublease income(387)(337)
Net lease cost$5,988 $5,420 
Cash paid for amounts included in the measurement of lease liabilities$6,288 $5,468 
Weighted average lease term - operating leases4.1 years4.5 years
Weighted average discount rate - operating leases5.6%5.2%
As of December 31, 2025, the current and long term operating lease liabilities are $5.1 million and $16.5 million, respectively. Future payments of operating leases as of December 31, 2025 are listed in the table below:
YearAmount
2026$6,047 
20276,164 
20285,470 
20293,630 
20302,049 
Thereafter856 
Total future minimum lease payments24,216 
Amount representing interest(2,676)
Present value of net future minimum lease payments$21,540 

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.

Other Available Disclosures

Income TaxesRevenueFair ValueGoodwill & IntangiblesSegmentsStock CompensationNew Standards