Leases

9 Months Ended

Mar. 31, 2022

Note 9. – Leases

The Company has operating leases and a financing lease relating to its pharmacy operations, medical office buildings, certain medical equipment, and office equipment. All lease agreements generally require the Company to pay maintenance, repairs, property taxes and insurance costs, all of which are variable amounts based on actual costs. Variable lease costs also include escalating rent payments that are not fixed at commencement but are based on an index determined in future periods over the lease term based on changes in the Consumer Price Index or other measure of cost inflation. Some leases include one or more options to renew the lease at the end of the initial term, with renewal terms that generally extend the lease at the then market rental rates. Leases may also include an option to buy the underlying asset at or a short time prior to the termination of the lease. All such options are at the Company’s discretion and are evaluated at the commencement of the lease, with only those that are reasonably certain of exercise included in determining the appropriate lease term. The components of lease cost and rent expense for the three and nine months ended March 31, 2022 and 2021 are as follows:

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
Lease Cost	March 31, 2022		March 31, 2021		March 31, 2022		March 31, 2021
Operating lease cost:
Operating lease cost	$	112	$	127	$	362	$	387
Short-term rent expense		17		8		56		37
Variable lease cost		0		1		1		2
Total operating lease cost	$	129	$	136	$	419	$	426

Finance lease cost:
Amortization right-of-use assets	$	9	$	9	$	27	$	27
Interest on finance lease liabilities		1		2		4		6
Total finance lease cost	$	10	$	11	$	31	$	33

Supplemental balance sheet information relating to leases was as follows:

		As of		As of
		March 31,		June 30,
		2022		2021
Operating Leases:	Balance Sheet Classifications
Operating Lease ROU Assets	ROU Assets	$	1,223	$	1,251

Finance Leases:
Finance Lease ROU Assets	Property, plant and equipment		203		203
Accumulated amortization	Accumulated depreciation		96		72
Current finance lease liabilities	Current maturities of long-term debt		39		37
Long-term finance lease liabilities	Long-term debt		25		52

Supplemental cash flow and other information related to leases as of and for the three and nine months ended March 31, 2022 and 2021 are as follows:

	Three Months Ended						Nine Months Ended
Other information	March 31, 2022			March 31, 2021			March 31, 2022			March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	114		$	123		$	366		$	383
Operating cash flows from finance leases		1			2			4			6
Financing cash flow from finance leases		10			9			28			26
Right-of-use assets obtained in exchange for new operating lease liabilities		289			21			324			712
Weighted-average remaining lease term:
Operating leases	1.66 years			2.66 years			1.66 years			2.66 years
Finance leases	3.74 years			4.15 years			3.74 years			4.15 years
Weighted-average discount rate:
Operating leases		1.04	%		3.40	%		1.04	%		3.40	%
Finance leases		6.54	%		6.54	%		6.54	%		6.54	%

Commitments relating to non-cancellable operating and finance leases as of March 31, 2022 for each of the next five years and thereafter are as follows:

Payments due within	Operating Leases			Finance Leases
1 year	$	351		$	42
2 years		336			28
3 years		322			0
4 years		245			0
5 years		10			0
Over 5 years		3			0
Total minimum future payments		1,267			70
Less: Imputed interest		(25	)		(6	)
Total liabilities		1,242			64
Less: Current portion		(340	)		(39	)
Long-term liabilities	$	902		$	25