PHIBRO ANIMAL HEALTH CORP

(in thousands, except per share amounts)

(unaudited)

1. Description of Business

Phibro Animal Health Corporation (“Phibro” or “PAHC”) and its subsidiaries (together, the “Company”) is a diversified global developer, manufacturer and marketer of a broad range of animal health and mineral nutrition products for food and companion animals including poultry, beef and dairy cattle, swine, aquaculture and dogs. The Company is also a manufacturer and marketer of performance products for use in the personal care, industrial chemical and chemical catalyst industries. Unless otherwise indicated or the context requires otherwise, references in this report to “we,” “our,” “us,” and similar expressions refer to Phibro and its subsidiaries.

The unaudited consolidated financial information for the three months ended September 30, 2026 and 2025, is presented on the same basis as the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (the “Annual Report”), filed with the Securities and Exchange Commission on August 26, 2026 (File no. 001-36410). In the opinion of management, these financial statements include all adjustments necessary for a fair statement of the financial position, results of operations and cash flows of the Company for the interim periods, and the adjustments are of a normal and recurring nature. The financial results for any interim period are not necessarily indicative of the results for the full year. The consolidated balance sheet information as of June 30, 2026, was derived from the audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report.

The consolidated financial statements include the accounts of Phibro and its consolidated subsidiaries. Intercompany balances and transactions have been eliminated from the consolidated financial statements. The decision whether to consolidate an entity requires consideration of majority voting interests, as well as effective control over the entity.

2. Summary of Significant Accounting Policies and New Accounting Standards

Our significant accounting policies are described in the notes to the consolidated financial statements included in our Annual Report. As of September 30, 2026, there have been no material changes to any of the significant accounting policies contained therein.

Net Income per Share and Weighted Average Shares

Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period.

Diluted net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period, adjusted for dilutive common share equivalents resulting from the assumed vesting of restricted stock units (“RSUs”), unless the effect would be antidilutive, or if the minimum stock price targets for our performance-based RSUs were not achieved during the reporting period. The calculation of diluted net income per share for the three months ended September 30, 2026 excluded common share equivalents for 300,000 performance-based RSUs because the minimum stock price targets were not achieved during the period; all other common share equivalents related to time- and performance-based RSUs were included. For the three months ended September 30, 2025, all outstanding common share equivalents related to time- and performance-based RSUs were included in the calculation of diluted net income per share.

New Accounting Standards

Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2024-03,(Subtopic 220-40): Disaggregation of Income Statement Expenses and ASU 2025-01, Clarifying the Effective Date, requires disclosure, in the notes to the financial statements, of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption, as well as a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 also requires disclosure of the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses. The ASU will be effective for Phibro’s fiscal year ending June 30, 2028 and for interim periods thereafter, and it can be applied on a prospective basis or on a retrospective basis to all periods presented. Early adoption is permitted. We areevaluating the impact of this standard on our footnote disclosures.

ASU 2025-06,(Subtopic 350-40): Intangibles - Goodwill and Other - Internal-Use Software :Targeted Improvements to the Accounting for Internal-Use Software, amends existing guidance regarding when entities may begin to capitalize internal-use software costs. Under the updated framework, entities must assess when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 will be effective for Phibro’s fiscal year ending June 30, 2029, including interim periods within that year, and it can be applied on a prospective basis, on a retrospective basis to all periods presented, or with a modified transition approach. Early adoption is permitted. We areevaluating the impact of this standard on our consolidated financial statements and disclosures.

ASU 2025-09,(Topic 815): Hedge Accounting Improvements, amends existing guidance and provides improvements to hedge accounting, including expanded eligibility of forecasted transactions, increased flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The ASU will be effective for Phibro’s fiscal year ending June 30, 2028, including interim periods within that fiscal year. Early adoption is permitted. We areevaluating the impact of this standard on our consolidated financial statements and disclosures.

ASU 2025-10,(Topic 832): Accounting for Government Grants Received by Business Entities, provides recognition, measurement, presentation, and disclosure requirements for government grants. This ASU requires that proceeds from government grants be recognized in earnings in the same period as the costs related to the grant and also introduces two permitted approaches for grant proceeds used to purchase capital assets: a deferred income approach or a cost accumulation approach. The ASU will be effective for Phibro’s fiscal year ending June 30, 2030, including interim periods within that fiscal year. The amendments in this ASU may be applied using a modified prospective, modified retrospective, or retrospective approach. Early adoption is permitted. We are evaluating the impact of this standard on our consolidated financial statements and disclosures.

ASU 2025-11,(Topic 270): Interim Reporting Narrow Scope Improvements, amends the existing guidance and provides clarifications intended to improve the consistency and usability of interim disclosure requirements. The ASU does not change the underlying objectives of interim reporting but is intended to enhance clarity in application. The ASU will be effective for Phibro’s fiscal year ending June 30, 2029, including interim periods within that fiscal year. We are evaluating the impact of this standard on our consolidated financial statements and disclosures.

3. Restructuring

In August 2026, management decided to close the Company’s manufacturing facility in Chicago Heights, Illinois (“Chicago Heights”) as part of a strategic consolidation of our plant network. Production shutdown is expected to be completed in the summer of 2027, and the manufacturing of products made at this facility is expected to be relocated to third party contract manufacturers and our other manufacturing facilities.

We expect to incur approximately $5,000 of one-time severance and other employee termination costs in connection with the Chicago Heights closure, which are expected to be paid in the second half of calendar 2027. The Company also expects to incur additional costs in connection with the closure, which may include equipment and inventory transfer costs, facility restoration costs, legal and professional fees, and other transition costs. The Company may also recognize noncash charges, including accelerated depreciation, as the plans for the facility and related assets are finalized. Costs associated with exit or disposal activities are recognized in the period in which they are incurred. One-time employee termination benefits for which employees are required to render service through their termination date in order to receive such benefits are recognized ratably over the future service period. All restructuring-related costs will be recognized in our Animal Health segment.

For the three months ended September 30, 2026, we recognized $649 of restructuring charges, consisting of one-time severance and other employee termination costs of $508 accrued in connection with the plant closure and $141 of professional fees. These restructuring charges were recorded inselling, general and administrative expenses in the consolidated statement of operations, and the related liability is included in accrued expenses and other current liabilities in the consolidated balance sheet.

The Company is evaluating the eventual disposition or transfer of property, plant and equipment associated with the facility and other activities necessary to complete the plant closure. As these plans have not been finalized, the Company cannot reasonably estimate the amount or range of the additional costs or potential gains, if any, associated with these activities, which may include accelerated depreciation and gains, if any, on the disposal of certain fixed assets. Such additional charges or potential gains, if any, could be material and will be recognized as the closure, transition and disposition activity plans are finalized and implemented.

Given the uncertainty surrounding its disposition plans, the Company concluded that the asset group did not meet the criteria for held for sale classification. Management performed a recoverability assessment of the Chicago Heights asset group and determined that the estimated undiscounted future cash flows expected to be generated by the asset group exceeded its carrying amount. Accordingly, the Company concluded that the asset group was recoverable, andno impairment charge was recognized in the current quarter.

The Company expects the closure activities to be ongoing through fiscal year 2028. The estimates and timing described in this disclosure are based on information currently available and are subject to change as the closure and related transition activities progress.

4. Statements of Operations—Additional Information

Disaggregated revenue, deferred revenue and customer payment terms

We develop, manufacture and market a broad range of products for food and companion animals including poultry, beef and dairy cattle, swine, aquaculture, and dogs. The products help prevent, control and treat diseases and enhance nutrition to help improve animal health and well-being. We sell animal health and mineral nutrition products directly to integrated poultry, cattle and swine customers and through commercial animal feed manufacturers, distributors and veterinarians. The animal health industry and demand for many of the animal health products in a particular region are affected by changing disease pressures and by weather conditions, as product usage follows varying weather patterns and seasons. Our operations are primarily focused on regions where the majority of livestock production is consolidated in large commercial farms.

We have a diversified portfolio of products that are classified within ourthree reportable business segments—Animal Health, Mineral Nutrition and Performance Products. Each segment has its own dedicated management and sales team.

Animal Health

The Animal Health business develops, manufactures and markets products in three main categories:

Mineral Nutrition

The Mineral Nutrition business is comprised of formulations and concentrations of trace minerals such as zinc, manganese, copper, iron and other compounds, with a focus on customers in North America. Our customers use these products to fortify the daily feed requirements of their livestock’s diets and maintain an optimal balance of trace elements in each animal. We manufacture and market a broad range of mineral nutrition products for food animals including poultry, beef and dairy cattle and swine.

Performance Products

The Performance Products business manufactures and markets specialty ingredients for use in the personal care, industrial chemical and chemical catalyst industries.

The following tables present our revenues disaggregated by major product category and geographic region:

Net Sales by Product Type

Net Sales by Region

Net sales by region are based on country of destination.

Our customer payment terms generally range from 30 to 120 days globally and do not include any significant financing components. Payment terms vary based on industry and business practices within the regions in which we operate. Our average worldwide collection period for accounts receivable is approximately 60 days after the revenue is recognized.

Interest Expense, Net

Depreciation and Amortization

Income Tax Expense

The Company is currently subject to income tax examinations by certain taxing authorities. The examinations are ongoing, and the Company cannot predict with certainty their ultimate outcome or timing of resolution. Management believes that the Company's provision for income taxes appropriately reflects its assessment of uncertain tax positions based on available information as of the balance sheet date. However, the ultimate resolution of these examinations may differ from management's current expectations and could result in future adjustments to the Company's provision for income taxes that may be material to its consolidated results of operations in the period in which such adjustments are determined and recognized. It is reasonably possible we will resolve a foreign tax audit in a future quarter during this fiscal year that may have a favorable impact on our income tax rate. The Company cannot yet estimate the impact of this potential future benefit on its financial statements.

5. Balance Sheets—Additional Information

6. Debt

Term Loans and Revolving Credit Facilities

2024 Credit Agreement

In July 2024, we entered into a Credit Agreement, (the “2024 Credit Agreement”) with a group of lenders. Initial borrowings were used to refinance all our outstanding debt, to pay fees and expenses of the transaction and for ongoing working capital requirements and general corporate purposes. Borrowings under the Delayed Draw Term A-1 Loans (as defined below) and Delayed Draw Term A-2 Loans (as defined below) were drawn on October 31, 2024 and used to finance the purchase price of the medicated feed additive portfolio, certain water-soluble products and related products from Zoetis Inc.

The 2024 Credit Agreement provides for: (i) Initial Term A-1 Loans in an initial aggregate principal amount of $162,000 (the “Initial Term A-1 Loans”), (ii) Delayed Draw Term A-1 Loans in an initial aggregate principal amount of $189,000 (the “Delayed Draw Term A-1 Loans” and, together with the Initial Term A-1 Loans, the “Term A-1 Loans”), (iii) Initial Term A-2 Loans in an initial aggregate principal amount of$138,000 (the “Initial Term A-2 Loans”), (iv) Delayed Draw Term A-2 Loans in an initial aggregate principal amount of $161,000 (the “Delayed Draw Term A-2 Loans” and, together with the Initial Term A-2 Loans, the “Term A-2 Loans”), and (v) Revolving Credit Commitments in an initial aggregate principal amount of $310,000 (the “Revolving Credit Commitments” and, together with the Term A-1 Loans and Term A-2 Loans, the “2024 Credit Facilities”). The 2024 Credit Facilities mature in July 2029 in the case of the Term A-1 Loans and the Revolving Credit Commitments and in July 2031 in the case of the Term A-2 Loans.

On April 28, 2026, the 2024 Credit Agreement was amended (the “Amended 2024 Credit Agreement”) to increase our borrowing capacity by expanding the Revolving Credit Commitments by $125,000, from $310,000 to an aggregate commitment of $435,000 (the “Amended Revolving Credit Commitments” and, together with the Term A-1 Loans and Term A-2 Loans, the “Amended 2024 Credit Facilities”). The expanded borrowing capacity provides the Company with enhanced operating flexibility.

Borrowings under the Amended 2024 Credit Facilities bear interest at rates based on the ratio of the Company and its subsidiaries’ net consolidated indebtedness to the Company and its subsidiaries’ consolidated EBITDA (the “Net Leverage Ratio”). The interest rates per annum for loans under the Amended 2024 Credit Facilities are based on a fluctuating rate of interest as selected by the Company plus an applicable rate as set forth in the table below:

The Company may receive patronage from the lenders providing the Term A-2 Loans, to the extent eligible under such lender’s patronage program, as determined by such lender in its sole discretion.

Pursuant to the terms of the Amended 2024 Credit Agreement, the Amended 2024 Credit Facilities are subject to various covenants that, among other things and subject to the permitted exceptions described therein, restrict us and our subsidiaries with respect to: (i) incurring additional debt; (ii) making certain restricted payments or making optional redemptions of other indebtedness; (iii) making investments or acquiring assets; (iv) disposing of assets (other than in the ordinary course of business); (v) creating any liens on our assets; (vi) entering into transactions with affiliates; (vii) entering into merger or consolidation transactions; and (viii) creating guarantee obligations; provided, however, that we are permitted to pay distributions to stockholders out of available cash subject to certain annual limitations and a quarterly maximum Net Leverage Ratio of 4.0 x and so long as no default or event of default under the Amended 2024 Credit Facilities shall have occurred and be continuing at the time such distribution is declared. Indebtedness under the Amended 2024 Credit Facilities is collateralized by a first priority lien on substantially all assets of Phibro and certain of our domestic subsidiaries. The Amended 2024 Credit Agreement contains an acceleration clause should an Event of Default (as defined therein) occur.

The Amended 2024 Credit Agreement requires, among other things, compliance with financial covenants regarding: (i) a maximum Net Leverage Ratio and (ii) a minimum interest coverage ratio, each calculated on a trailing four-quarter basis, as follows:

As of September 30, 2026, we were in compliance with the financial covenants of the Amended 2024 Credit Agreement.

As of September 30, 2026, we had $124,000 in borrowings drawn under the Amended Revolving Credit Commitments and had outstanding letters of credit of $2,083, leaving $308,917 available for further borrowings and letters of credit under the Amended Revolving Credit Commitments, subject to restrictions in our Amended 2024 Credit Facilities. We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The terms of these letters of credit are all less thanone year.

Debt Balances and Interest Rate Information

Long-Term Debt Balances

Interest Rates

Interest rates as of the balance sheet dates and the weighted-average rates for the periods presented were:

Interest rates as of the balance sheet dates are based on rates in effect as of those dates, including SOFR fluctuating rates of interest, applicable rates and the interest rate swap agreements.

In September 2024, we entered into an interest rate swap agreement on $150,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt issued under the Amended 2024 Credit Facilities to a fixed rate of 3.18% through September 2029.

In March 2025, we entered into an interest rate swap agreement on $275,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt issued under the Amended 2024 Credit Facilities to a fixed rate of 3.64% through February 2030.

We designated the interest rate swaps as highly effective cash flow hedges. For additional details, see “Note 10 — Derivatives.”

7. Related Party Transactions

Certain relatives of Jack C. Bendheim, our Executive Chairman, provided services to the Company as employees or consultants and received aggregate compensation and benefits of approximately $1,336 and $1,198 during the three months ended September 30, 2026 and 2025, respectively. Mr. Jack Bendheim has sole authority to vote shares of our stock owned by BFI Co., LLC, an investment vehicle of the Bendheim family.

8. Stock Incentive Plan

Restricted Stock Units

In July 2026, the Company granted 300,000 RSUs to its Chief Executive Officer (“CEO”), Daniel M. Bendheim, pursuant to the Company’s Incentive Plan and the CEO’s RSU award agreement. The RSUs have a grant date fair value of $3,623 ($12.08 per share) and will vest on June 30, 2031, in increments of 25% (with linear interpolation to apply for achievement between increments) based upon achievement of the arithmetic average of the Company’s closing stock price per share for each trading day in the 90-calendar day period ending on June 30, 2031 (the “90-Day Average”) from $70 to $100 and above, subject to Mr. D. Bendheim’s continued employment on such date. None of the RSUs will vest if the 90-Day Average is below $70, and the maximum vesting percentage for the RSUs is 100% for achievement of a 90-Day Average of $100 or above.

On August 1, 2026, the Company granted 109,418 time-based RSUs with a grant date fair value of $3,876 ($35.42 per share) to certain senior-level employees. These RSUs vest inthree equal annual amounts on each anniversary of August 1, 2026, subject to continued employment through the applicable vesting date, and the related compensation expense will be recognized on a straight-line basis over thethree-year vesting period based on the grant date fair value.

On August 1, 2025, the Company granted 113,944 time-based restricted stock units (“RSUs”) with a grant date fair value of $2,870 ($25.19 per share) to certain senior-level employees pursuant to the Company’s Incentive Plan. Each RSU represents the right to receive a share of our common stock upon vesting. These RSUs vest inthree equal annual amounts on each anniversary of August 1, 2025, subject to continued employment through the applicable vesting date.

The fair value of time-based RSUs is equal to the closing market price of the underlying common stock on the grant date, less the present value of expected dividends over the vesting period. A Monte Carlo simulation model was used to determine the grant date fair value of the performance-based RSUs. We recognize stock-based compensation expense for the RSUs on a straight-line basis over the vesting periods.

Stock-based compensation expense related to the RSUs was $804 and $339 for the three months ended September 30, 2026 and 2025, respectively.

For the three months ended September 30, 2026, changes to the number of outstanding RSUs were as follows:

During the three months ended September 30, 2026, the fair value of the time-based RSUs that vested was $1,368 and the excess tax benefit recognized on the vesting of these RSUs was $62. During the three months ended September 30, 2025, there wereno RSUs that vested. As of September 30, 2026, there was $9,872 of unrecognized compensation expense related to the RSUs, which will be recognized over a weighted average period of 3.2 years.

9. Commitments and Contingencies

Environmental

Our operations and properties are subject to extensive federal, state, local and foreign laws and regulations, including those governing pollution; protection of the environment; the use, management, and release of hazardous materials, substances and wastes; air emissions; greenhouse gas emissions; water use, supply and discharges; the investigation and remediation of contamination; the manufacture, distribution, and sale of regulated materials, including pesticides; the importing, exporting and transportation of products; and the health and safety of our employees (collectively, “Environmental Laws”). As such, the nature of our current and former operations exposes us to the risk of claims with respect to such matters, including fines, penalties, and remediation obligations that may be imposed by regulatory authorities. Under certain circumstances, we might be required to curtail operations until a particular problem is remedied. Known costs and expenses under Environmental Laws incidental to ongoing operations, including the cost of litigation proceedings relating to environmental matters, are included within operating results. Potential costs and expenses may also be incurred in connection with the repair or upgrade of facilities to meet existing or new requirements under Environmental Laws or to investigate or remediate potential or actual contamination, and from time to time we establish reserves for such contemplated investigation and remediation costs. In many instances, the ultimate costs under Environmental Laws and the period during which such costs are likely to be incurred are difficult to predict.

While we believe that our operations are currently in material compliance with Environmental Laws, we have, from time to time, received notices of violation from governmental authorities, and have been involved in civil or criminal action for such violations. Additionally, at various sites, our subsidiaries are engaged in continuing investigation, remediation and/or monitoring efforts to address contamination associated with historic operations of the sites. We devote considerable resources to complying with Environmental Laws and managing environmental liabilities. We have developed programs to identify requirements under and maintain compliance with Environmental Laws; however, we cannot predict with certainty the effect of increased and more stringent regulation on our operations, future capital expenditure requirements, or the cost of compliance.

The nature of our current and former operations exposes us to the risk of claims with respect to environmental matters and we cannot assure we will not incur material costs and liabilities in connection with such claims. Based on our experience, we believe that the future cost of compliance with existing Environmental Laws, and liabilities for known environmental claims pursuant to such Environmental Laws, will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity.

Based upon information available, to the extent such costs can be estimated with reasonable certainty, we estimated the cost for further investigation and remediation of identified soil and groundwater problems at operating sites, closed sites and third-party sites, and closure costs for closed sites to be approximately $4,241 and $4,260 at September 30, 2026 and June 30, 2026, respectively, which is included in current and long-term liabilities on the consolidated balance sheets. However, future events, such as new information, changes in existing Environmental Laws or their interpretation, and more vigorous enforcement policies of regulatory agencies, may give rise to additional expenditures or liabilities that could be material. For all purposes of the discussion under this caption and elsewhere in this report, it should be noted that we take and have taken the position that neither PAHC nor any of our subsidiaries are liable for environmental or other claims made against one or more of our other subsidiaries or for which any of such other subsidiaries may ultimately be responsible.

Claims and Litigation

PAHC and its subsidiaries are party to various claims and lawsuits arising out of the normal course of business including product liabilities, payment disputes and governmental regulation. Certain of these actions seek damages in various amounts. In many cases, such claims are covered by insurance. We believe that none of the claims or pending lawsuits, either individually or in the aggregate, will have a material adverse effect on our financial position, results of operations, cash flows or liquidity.

United States Tariffs

In February 2026, the Supreme Court of the United States (the “Supreme Court”) ruled that tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) from February 4, 2025 to February 24, 2026 were not authorized. In response to this ruling, we have engaged in efforts to pursue the recovery of IEEPA tariffs previously paid. As of the date of this Form 10-Q filing, we have confirmed acceptance of claims submitted through the Consolidated Administration and Processing of Entries (“CAPE”) portal administered by the U.S. Customs and Border Protection (“CBP”) for the refund of approximately $13.4 million in tariffs previously paid by the Company and have recovered $12.3 million.

We have elected to use the loss recovery model to account for the recoveries of our claims accepted by the CBP. Under this model, a loss recovery is recorded when the recovery is probable and estimable. A summary of the financial statement impacts of our IEEPA tariff recovery efforts by fiscal reporting period is below.

As of June 30, 2026, we had confirmed acceptance of claims submitted through the CAPE portal administered by the CBP for the refund of approximately $11.7 million in tariffs previously paid by the Company, which we recorded as a receivable within other current assets as of that date. Of this amount, $8.5 million related to tariffs on inventory previously sold to customers and was recorded as a reduction of cost of goods sold for the three and twelve months ended June 30, 2026, and $3.2 million related to tariffs on inventory held as of June 30, 2026 and was recorded as a reduction of inventory. The amount recorded as a reduction of inventory will be recognized as a reduction of cost of goods sold as the related inventory is sold.

During the three months ended September 30, 2026, we received a full refund of the $11.7 million claim submission from the CBP, plus $0.4 million of interest income. The interest income was recognized in our consolidated statements of operations for the three months ended September 30, 2026.

During the three months ended September 30, 2026, we had confirmed acceptance of additional claims submitted through the CAPE portal administered by the CBP for the refund of approximately $1.7 million in tariffs previously paid by the Company. Of this amount, $1.6 million related to tariffs on inventory previously sold to customers and was recorded as a reduction of cost of goods sold for the three months ended September 30, 2026, and $0.1 million related to tariffs on inventory held as of September 30, 2026 and was recorded as a reduction of inventory. The amount recorded as a reduction of inventory will be recognized as a reduction of cost of goods sold as the related inventory is sold. During the three months ended September 30, 2026, we received a refund related to these claims of $0.6 million, and as of September 30, 2026, $1.1 million was recorded as receivable within other current assets for the remaining amount expected to be recovered.

10. Derivatives

We monitor our exposure to foreign currency exchange rates and interest rates and from time-to-time use derivatives to manage certain of these risks. We designate derivatives as a hedge of a forecasted transaction or of the variability of the cash flows to be received or paid in the future related to a recognized asset or liability (cash flow hedge). All changes in the fair value of a highly effective cash flow hedge are recorded in accumulated other comprehensive income (loss).

We routinely assess whether the derivatives used to hedge transactions are effective. If we determine that a derivative ceases to be an effective hedge, we discontinue hedge accounting in the period of the assessment for that derivative, and immediately recognize any unrealized gains or losses related to the fair value of that derivative in the consolidated statements of operations.

We record derivatives at fair value in the consolidated balance sheets. For additional details regarding fair value, see “Note 11— Fair Value Measurements.”

In September 2024, we entered into an interest rate swap agreement on $150,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt issued under the 2024 Credit Facilities to a fixed rate of 3.18% through September 2029.

In March 2025, we entered into an interest rate swap agreement on $275,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt issued under the 2024 Credit Facilities to a fixed rate of 3.64% through February 2030.

We have designated the interest rate swaps as highly effective cash flow hedges.

We are a party to foreign currency option contracts used to hedge cash flows related to monthly inventory purchases. The individual option contracts mature monthly through March 2027. The forecasted inventory purchases were probable of occurring, and the individual option contracts were designated as highly effective cash flow hedges.

The consolidated balance sheet includes the net fair values of our outstanding foreign currency option contracts within the respective line items, based on the net financial position and maturity date of the individual contracts. The consolidated balance sheet includes the net fair values of our outstanding interest rate swaps within the respective balance sheet line items, based on the expected timing of the cash flows. The consolidated balance sheet includes assets and liabilities for the fair values of outstanding derivatives that are designated and effective as cash flow hedges as follows:

Notional amounts of the derivatives as of the balance sheet date were:

The consolidated statements of operations and statements of comprehensive income for the periods ended September 30, 2026 and 2025 included the effects of derivatives as follows:

We recognize gains and losses related to foreign currency derivatives as a component of cost of goods sold at the time the hedged item is sold.

11. Fair Value Measurements

Cash Equivalents

Our cash equivalents consist of time deposits with an original maturity of less than three months held at financial institutions. We consider the carrying amounts of these current assets to be recorded at their fair value because of the current nature of these items.

Short-term Investments

Our short-term investments consist of cash deposits with original maturity of greater than three months, but no greater than twelve months, held at financial institutions. We consider the carrying amounts of these current assets to be recorded at their fair value because of the current nature of these items.

Current Assets and Liabilities

We consider the carrying amounts of current assets and current liabilities to be representative of their fair value because of the current nature of these items.

Debt

We record debt, including term loans and revolver balances, at amortized cost in our consolidated financial statements. We believe the carrying value of the debt is approximately equal to its fair value, due to the variable nature of the instruments and our evaluation of estimated market prices.

Derivatives

We determine the fair value of derivative instruments based upon pricing models using observable market inputs for these types of financial instruments, such as spot and forward currency translation rates.

Non-financial Assets

Our non-financial assets, which primarily consist of goodwill, other intangible assets, property and equipment, and lease-related right-of-use (“ROU”) assets, are not required to be measured at fair value on a recurring basis, and instead are reported at carrying value in the consolidated balance sheet. Assets and liabilities may be required to be measured at fair value on a non-recurring basis, either upon initial recognition or for subsequent accounting or reporting, including the initial recognition of net assets acquired in a business combination. These fair value measurements involve unobservable inputs that reflect estimates and assumptions that represent Level 3 inputs.

Fair Value of Assets (Liabilities)

There wereno transfers between levels during the periods presented.

12. Business Segments

We evaluate performance and allocate resources based on the Animal Health, Mineral Nutrition and Performance Products reporting segments. The Chief Executive Officer is the chief operating decision-maker (“CODM”) for the Company. We evaluate performance of our segments based on Adjusted EBITDA. Included in the segment Adjusted EBITDA analyses provided to the CODM is information on segment cost of sales and selling, general and administrative expenses. There are no other significant segment expense categories regularly provided to the CODM.

We calculate Adjusted EBITDA as net income plus (a) interest expense, net, (b) provision for income taxes or less benefit for income taxes, (c) depreciation and amortization, (d) other non-operating expense or less other income, as separately reported on our consolidated statements of operations, including foreign currency (gains) losses, net and (e) certain items that we consider to be unusual, non-operational or non-recurring. However, some of these items may not be applicable to the calculation of Adjusted EBITDA for our segments, as we do not typically include interest, other non-operating items, or income tax-related items in our segment results.

Certain of our costs and assets are not directly attributable to a segment or segments, and we refer to these items as Corporate. We do not allocate Corporate costs or assets to the other segments because they are not used to evaluate the segments’ operating results or financial position. Corporate costs include certain costs related to executive management, information technology, legal, finance, human resources and business development. The accounting policies of our segments are the same as those described in the summary of significant accounting policies included in Note 2 — Summary of Significant Accounting Policies and New Accounting Standards included in the Annual Report.

For all segments, the CODM uses segment Adjusted EBITDA in the annual budgeting and quarterly forecasting process and considers budget-to-actual and current period to prior period variances to evaluate performance and allocate resources for each segment.

The geographic location of property, plant and equipment, net and ROU operating lease assets was:

Asset information is not provided for reportable segments in the information regularly provided to the CODM. Accordingly, such information is not disclosed in this footnote.