Reservoir Media, Inc. Leases Disclosure
NOTE 15. LEASES
The Company leases its business premises under operating leases which have expiration dates between 2025 – 2033. Many of the Company’s leases provide for future rent escalations and renewal options. Most of the Company’s leases also obligate the Company to pay, as lessee, variable lease cost related to an allocation of maintenance, insurance and property taxes.
The Company defines lease term as the noncancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on the Company’s assessment of relevant economic factors. The noncancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the Company, irrespective of when lease payments begin under the contract.
The Company recognizes a right-of-use (“ROU”) asset and lease liability at lease commencement, which are measured by discounting lease payments using the Company’s incremental borrowing rate as the discount rate. The Company determines the incremental borrowing rate applicable to each lease by reference to its outstanding secured borrowings and implied spreads over the risk-free discount rates that correspond to the term of each lease. Subsequent amortization of the ROU asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. Reductions of the ROU
asset and the change in the lease liability are included in changes in Other long-term assets and liabilities in the Consolidated Statement of Cash Flows.
The Company reassesses lease classification and remeasures ROU assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate contract or upon certain other events that require reassessment. Maintenance and property tax expenses are accounted for on an accrual basis as variable lease cost.
The following is a summary of lease cost for the fiscal years ended March 31, 2025 and 2024:
| 2025 |
| 2024 | |||
Operating lease cost | $ | 1,520,568 | $ | 1,502,702 | ||
Variable lease cost | 68,278 | 67,308 | ||||
Total lease cost | $ | 1,588,846 |
| $ | 1,570,010 | |
The following is a summary of supplemental cash flow information related to leases for the fiscal years ended March 31, 2025 and 2024:
2025 | 2024 | |||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 1,455,611 | $ | 1,215,691 | ||
Right-of-use assets received in exchange for operating lease obligations | $ | — | $ | 595,370 | ||
Supplemental balance sheet information related to leases is as follows:
| Classification |
| 2025 |
| 2024 | |||
Operating lease right-of-use assets |
| Operating lease right of use assets, net | $ | 5,949,418 | $ | 6,988,340 | ||
Current portion of operating lease liabilities |
| $ | 988,099 | $ | 968,420 | |||
Noncurrent portion of operating lease liabilities |
| Operating lease liabilities, net of current portion | $ | 5,723,930 | $ | 6,720,287 | ||
The following is a summary of the weighted average remaining lease term and average discount rate for the Company’s operating leases as of March 31, 2025 and 2024:
| 2025 |
| 2024 |
| |
Weighted-average remaining lease term (in years) |
| 7.0 |
| 7.9 | |
Weighted-average discount rate |
| 6.2 | % | 6.1 | % |
Maturities of the Company’s operating lease liabilities as of March 31, 2025 were as follows for the fiscal years ending March 31:
Fiscal year ended March 31: |
|
| |
2026 | $ | 1,397,698 | |
2027 |
| 1,142,188 | |
2028 |
| 952,370 | |
2029 |
| 1,001,225 | |
2030 |
| 896,986 | |
Thereafter | 3,111,506 | ||
Total lease payments | 8,501,973 | ||
Less: imputed interest | (1,789,944) | ||
Present value of operating lease payments | 6,712,029 | ||
Less: current portion of operating lease liabilities | (988,099) | ||
Operating lease liabilities, net of current portion | $ | 5,723,930 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | May 28, 2025 | Showing above |
| 2024 | May 30, 2024 | |
| 2023 | May 31, 2023 | |
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.