What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-06-14 compared with 2021-06-29 · 364 added, 332 removed, 277 unchanged (72% of the section changed)

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We do not undertake to update any forward-looking statements that we may make from time to time.

Non-GAAP Financial Measure

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

However, we use net debt, a non-GAAP financial measure, to evaluate our financial condition.

We believe that the presentation of this non-GAAP financial measure, when viewed as a supplement to our indebtedness reflected on our balance sheets prepared in accordance with U.S.

GAAP, provides useful information to investors in evaluating our indebtedness.

In addition, this non-GAAP measure addresses questions we routinely receive from analysts and investors and, in order to ensure that investors have access to similar data, we make this data available to the public.

This non-GAAP measure should not be considered as an alternative to total debt or any other measure derived in accordance with U.S.

This non-GAAP measure has important limitations as an analytical tool and should not be considered in isolation or as a substitute for financial measures presented in accordance with U.S.

The presentation of our non-GAAP financial measures may change from time to time, including as a result of changed business conditions, new accounting rules, or otherwise.

Further, our use of "net debt" may vary from the use of similarly-titled measures by other companies due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.

Executive Summary

In what was an unprecedented and challenging year, our Company adapted to constant change as we navigated the COVID-19 pandemic.

We appreciate the continued support from all of our stakeholders and, in particular, we would like to thank the entire Pyxus team for their hard work and unwavering commitment to the Company and the communities in which we operate under extraordinary circumstances.

During fiscal 2021, we implemented a series of restructurings and process changes that allowed our business to continue to operate throughout the year and positioned us for success in fiscal 2022 and beyond.

Through these actions, we were able to reduce our debt by $396.0 million and we made the strategic decision to exit our cash flow negative Canadian cannabis businesses.

The pending divestiture of the Canadian cannabis businesses further supports our SG&A cost containment efforts and provides us with more flexibility to utilize our working capital for the opportunities we anticipate in the tobacco and e-liquids industries.

Throughout the COVID-19 pandemic, our production facilities continued to operate although, in some instances, at lower production levels than planned due to social distancing requirements and safety practices implemented to reduce the spread of COVID-19 and protect our employees.

In addition, the COVID-19 pandemic resulted in shipping delays of leaf tobacco for certain customer orders from the fourth quarter of fiscal 2021 into fiscal 2022.

However, the effect of COVID-19 on our business yielded innovative changes that will enable us to be more flexible in the future and potentially accelerate certain activities in the crop cycle.

Also, COVID-19 has pushed the tobacco industry to continue to look for ways to reduce supply chain complexity in a responsible manner.

As a leader in sustainable and traceable crop production, we have demonstrated our ability to service the evolving needs of the tobacco industry over time and will continue to do so in fiscal 2022 and beyond.

We are proud of the progress made by the business during fiscal year 2022.

Our employees worked diligently to successfully increase volumes and revenue compared to the prior year while continuing to navigate global challenges, which largely stem from the ongoing impacts of COVID-19 and the unfortunate events in Ukraine.

We continued to expand our customer relationships as customers sought solutions to reduce supply chain complexities and improve operational efficiencies.

Expansion of these relationships, partially attributable to our environmental, social, and governance ("ESG") framework publicly announced in December 2021, increased our market share in Africa, Asia, and South America and contributed to a 16.8% increase in kilo volume compared to last year.

Our efforts in fiscal 2022 to execute on our strategy to increase financing sources and working capital lines around the globe resulted in a new asset-based lending ("ABL") credit facility with PNC Bank in February 2022, which provides the Company with an extended maturity date, reduced costs, and increased potential borrowing availability.

In addition, in June 2022, we entered into an agreement to amend our delayed draw term loan facility ("DDTL"), which provides the Company with an extended maturity date, reduced costs, and increased financial flexibility.

In January 2022, we completed the exit of our cash-flow-negative cannabinoid operations.

Our restructuring activities generated savings in SG&A, whic h contributed to a $55.9 million decrease in expense compared to last year.

As a result, our SG&A expense has normalized and is consistent with levels prior to our investments to develop those businesses.

Maintaining farmer livelihood and a supply chain of responsibly sourced, sustainable, and traceable products remains a top priority as we engage with customers about the impact of inflation on the cost and price of tobacco going forward.

Additionally, we have taken proactive measures to secure inputs for the next year, such as fertilizer and fuel, allowing us to remain focused on delivering stakeholder value as we work to grow a better world.

Historically, Pyxus’ core business has been as a tobacco leaf merchant, purchasing, processing, packing, storing and shipping tobacco to manufacturers of cigarettes and other consumer tobacco products throughout the world.

Through our predecessor companies, we have a long operating history in the leaf tobacco industry with some customer relationships beginning in the early 1900s.

Our core leaf tobacco operations continued to account for almost all of our revenues for the fiscal year ended March 31, 2021.

We are committed to responsible crop production that supports economic viability for the grower, provides a safe working atmosphere for those involved in crop production and minimizes negative environmental impact.

Our agronomists maintain frequent contact with growers prior to and during the growing and curing seasons to provide technical assistance to improve the quality and yield of the crop.

Our core leaf tobacco operations continued to account for almost all of our revenues for the year ended March 31, 2022.

We are committed to responsible crop production that supports economic viability for the supplier, provides a safe working atmosphere for those involved in crop production and minimizes negative environmental impact.

Our agronomists maintain frequent contact with suppliers prior to and during the growing and curing seasons to provide technical assistance to improve the quality and yield of the crop.

Throughout the entire production process, from seed through processing and final shipment, our SENTRI SM traceability system provides clear visibility into how products are produced throughout the supply chain, supporting product integrity.

In an increasing number of markets, we also provide agronomy expertise for growing leaf tobacco.

Our contracted tobacco grower base often produces a significant volume of non-tobacco crop utilizing the agronomic assistance that our team provides.

Pyxus is working to find markets for these crops as part of our ongoing efforts to improve farmer livelihoods and the communities in which they live.

Our consolidated operations are managed and reported in nine operating segments that are organized by product category and geographic area and aggregated into three reportable segments for financial reporting purposes:

We also provide agronomy expertise for growing leaf tobacco in numerous markets.

Our contracted tobacco grower base produces a significant volume of non-tobacco crop utilizing the agronomic assistance that our team provides.

Pyxus works with our grower base, as needed, to find markets for these crops as part of our ongoing efforts to improve farmer livelihoods and the communities in which they live.

Historically, the Company had nine operating segments that were organized by product category and geographic area and were aggregated into three reportable segments for financial reporting purposes:

Leaf - North America, Leaf - Other Regions, and Other Products and Services.

During year ended March 31, 2022, the Company reevaluated its operating and reportable segments under ASC Topic 280 - Segment Reporting in response to the effectiveness of the Plan in August 2020, the appointment of a new Board of Directors during the seven months ended March 31, 2021, the outcomes achieved from cost savings and restructuring initiatives implemented during the five months ended August 31, 2020 and the seven months ended March 31, 2021, the Company's exit from its industrial hemp, CBD, and Canadian cannabis businesses the seven months ended March 31, 2021, and changes to business operations as a result of the COVID-19 pandemic.

As a result of this reevaluation, effective during the fourth quarter of the year ended March 31, 2022, the Company has eight operating segments organized by geographic area and product category and are aggregated into one reportable segment for financial reporting purposes:

An All Other category is included for purposes of reconciliation of the results of the Leaf reportable segment to the consolidated results.

Refer to " Note 1.

Basis of Presentation and Summary of Significant Accounting Policies" to the "Notes to Consolidated Financial Statements" for additional information.

Basis of Presentation and Summary of Significant Accounting Policies " for additional information.

Bankruptcy Proceedings

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On August 21, 2020, the Bankruptcy Court issued an order (the "Confirmation Order") confirming the Amended Joint Prepackaged Chapter 11 Plan of Reorganization (the "Plan") filed by the Debtors in the Chapter 11 Cases.

On August 24, 2020, the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases.

On August 24, 2020 (the "Effective Date"), the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases.

In connection with the satisfaction of the conditions to effectiveness as set forth in the Confirmation Order and the Plan, Old Pyxus completed a series of transactions pursuant to which the business assets and operations of Old Pyxus were vested in a new Virginia corporation, Pyxus Holdings, Inc., which is an indirect subsidiary of the Company.

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In general, our diversification strategy focused on products that were value-added, required some degree of processing and offered a higher margin potential than our core tobacco leaf business.

In support of this strategy, the Company investments in e-liquids, industrial hemp/CBD, and legal cannabis in Canada.

In support of this strategy, the Company made certain investments in e-liquids and industrial hemp/CBD businesses in the United States and legal cannabis businesses in Canada.

Refer to " Item 1.

Business " for additional information regarding these investments.

As discussed below, we have generally divested or ceased operating these businesses and have returned our focus to our leaf tobacco businesses.

Following the effectiveness of the Plan and the election of additional members of our Board of Directors in October 2020, our Board of Directors determined to exit the industrial hemp, CBD and Canadian cannabis businesses in light of the Company’s limited capital resources and the continuing capital requirements to develop and expand these early-stage businesses.

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Criticality’s CBD extraction facility has ceased operations.

On November 23, 2021, the Company disposed of its ownership interests in Humble Juice, the Company's primary e-liquids business, in exchange for royalties on future revenue.

During the fourth quarter of the year ended March 31, 2022, the Company's remaining e-liquids subsidiary, Twelfth State Brands LLC, which markets e-liquids under the Bantam trademark, suspended the sourcing of additional inventory and reduced staffing pending action by the FDA on its applications to permit continued marketing of its remaining products.

CCAA Proceeding and Deconsolidation and Disposition of Canadian Cannabis Subsidiaries

On January 21, 2021, Figr East, Figr Norfolk, and Figr Brands, Inc., an indirect subsidiary of the Company and the majority parent corporation of Figr East and Figr Norfolk (“Figr Brands”, and together with Figr East and Figr Norfolk, the “Canadian Cannabis Subsidiaries”) applied for relief from their respective creditors pursuant to Canada’s Companies’ Creditors Arrangement Act (the “CCAA”) in the Ontario Superior Court of Justice (Commercial List) (the “Canadian Court”) in Ontario, Canada as Court File No.

On January 21, 2021, Figr Norfolk Inc.

("Figr Norfolk") and Figr Brands, Inc.

("Figr Brands"), which are indirect subsidiaries of the Company, and Canada’s Island Garden Inc.

("Figr East," and together with Figr Norfolk and Figr Brands, the "Canadian Cannabis Subsidiaries"), which, prior to its sale on June 28, 2021 was an indirect subsidiary of the Company, applied for relief from their respective creditors pursuant to Canada’s Companies’ Creditors Arrangement Act (the "CCAA") in the Ontario Superior Court of Justice (Commercial List) (the "Canadian Court") in Ontario, Canada as Court File No.

CV-21-00655373-00CL (the "CCAA Proceeding").

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to serve as the Canadian Court-appointed monitor of the Canadian Cannabis Subsidiaries during the pendency of the CCAA Proceeding (the "Monitor").

On January 29, 2021, the Canadian Court issued an order permitting the Canadian Cannabis Subsidiaries to initiate a sale and investment solicitation process to be conducted by the Monitor and its affiliate to solicit interest in, and opportunities for, a sale of, or investment in, all or substantially all, or one or more components, of the assets and/or the business operations of the Canadian Cannabis Subsidiaries.

The Canadian Court also approved a debtor-in-possession financing facility (the "Canadian DIP Facility") provided to Figr Brands by another non-U.S.

subsidiary of Pyxus (the "DIP Lender") in an initial amount of up to Cdn.$8.0 million, which following approval by the Canadian Court was increased to Cdn.$16.0 million, to fund the working capital needs of the Canadian Cannabis Subsidiaries.

While the Canadian Cannabis Subsidiaries have been majority owned by the Company, the administration of the CCAA Proceeding, including the Canadian Court’s appointment of the Monitor and the related authority of the Monitor, including approval rights with respect to significant actions of the Canadian Cannabis Subsidiaries during the pendency of the CCAA Proceeding, resulted in the Company losing control (in accordance with U.S.

GAAP) of the Canadian Cannabis Subsidiaries,

and the deconsolidation of the Canadian Cannabis Subsidiaries’ assets and liabilities and elimination of their equity components from the Company’s consolidated financial statements as of January 21, 2021.

The Canadian Cannabis Subsidiaries’ financial results are included in the Company’s consolidated results through January 20, 2021, which is the day prior to the Order Date.

Prior to the deconsolidation of the Canadian Cannabis Subsidiaries, they comprised an operating segment within the Other Products and Services reportable segment.

On May 10, 2021, a definitive agreement for the sale of the assets of Figr Norfolk was entered into for an estimated purchase price of Cdn.$5.0 million.

On June 10, 2021, the Canadian Court approved the sale agreement.

The consummation of the sale under this agreement is subject to approval of the buyers by Health Canada and the satisfaction of certain other conditions.

On May 25, 2021, a definitive agreement was entered into with a separate buyer for the sale of the outstanding equity of Figr East and certain intangible assets of Figr Brands for an estimated aggregate purchase price of Cdn.$24.8 million.

On June 10, 2021, the Canadian Court approved the sale agreement.

On June 25, 2021, Health Canada approved the buyers of Figr East and certain intangible assets of Figr Brands.

The consummation of the sale of Figr East and certain intangible assets of Figr Brands occurred on June 28, 2021.

The amount of recovery that the Company may receive from the sale of the assets of Figr Norfolk, the sale of the outstanding equity of Figr East, and the sale of certain intangible assets of Figr Brands will be impacted by the amount of claims against the Canadian Cannabis Subsidiaries submitted in the CCAA Proceeding, the extent to which such claims are approved by the Canadian Court, and the extent to which the Company's interest in the Canadian Cannabis Subsidiaries are determined by the Canadian Court to be debt claims entitled to recovery on the same basis as other unsecured creditor claims with respect to the Canadian Cannabis Subsidiaries.

These and other related matters are discussed in greater detail in “Note 5.

As a result of the commencement of the CCAA Proceeding and the appointment of the Monitor, and in accordance with U.S.

generally accepted accounting principles, the Canadian Cannabis Subsidiaries were deconsolidated from the Company's financial statements as of the Order Date.

As a result of a sale process under an order issued by the Canadian Court in the CCAA Proceeding, the sale of Figr East and certain intangible assets of Figr Brands was completed on June 28, 2021 and the sale of assets of Figr Norfolk was completed on January 28, 2022.

Pursuant to the CCAA Proceeding, we received funds in settlement of our debt claims with respect to the Canadian Cannabis Subsidiaries and did not receive any recovery with respect to our equity interest in the Canadian Cannabis Subsidiaries.

Refer to " Note 5.

CCAA Proceeding and Deconsolidation of Subsidiaries " and " Note 30.

Subsequent Events” to the “Notes to Consolidated Financial Statements”.

We continue to monitor the impact of the COVID-19 outbreak on our Company and our workforce.

In March 2020, the World Health Organization recognized the COVID-19 outbreak as a global pandemic.

The COVID-19 pandemic and government actions implemented to contain further spread of COVID-19 have severely restricted economic activity around the world.

Subsequent Events " to the "Notes to Consolidated Financial Statements" for additional information.

We continue to monitor the impact of the COVID-19 pandemic on our Company and workforce.

The COVID-19 pandemic and government actions implemented to contain further spread of COVID-19 have severely restricted economic activity around the world, and the onset of new variants of COVID-19 threaten to prolong the effects of the pandemic.

The leaf tobacco business continues to be impacted by COVID-related shipping constraints, including vessel and equipment availability, closure of port facilities due to quarantines, port congestion, and rising freight costs, which have resulted in delays in shipments to customers.

Our production facilities are still operating but, in some instances, at lower production levels than planned due to social distancing requirements and safety practices implemented in accordance with Company policy.

We continue to monitor the measures we implemented to reduce the spread of COVID-19 and make updates and improvements, as necessary.

While our supply chains and distribution channels continue to experience delays due to COVID-19, we currently have adequate supply of products to meet the near-term forecasted demand.

In addition, we have experienced procedural delays during fulfillment of customer orders for leaf tobacco due to COVID-19.

We implemented various measures to reduce the spread of COVID-19 including the implementation of health safety practices, providing personal protective equipment, the implementation of travel restrictions, work-from-home policies where possible, restricting visitors to production locations, splitting production workforce, reducing the on-site production workforce levels, screening workers before they enter facilities, implementing social distancing, and encouraging employees to adhere to prevention measures recommended by the Center for Disease Control and the World Health Organization.

In addition, we have developed a robust Return to Work Program to ensure our employees are returning to a safe working environment as federal, state, and local governments begin lifting their COVID-19 related restrictions.

While our supply chains and distribution channels continue to experience delays due to COVID-19 in certain markets, we currently have adequate supply of products to meet the near-term forecasted demand.

Broad economic factors from the COVID-19 pandemic, including increasing unemployment rates and reduced consumer spending, may extend billing and collection cycles.

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If general economic conditions in the markets in which we operate continue to deteriorate or remain uncertain for an extended period of time, our business, results of operations, financial condition, and cash flows will be adversely affected.

Due to the scope of our operations, including emerging markets, and our sale to customers around the world, the impact of the COVID-19 pandemic on our operations and the demand for our products may not coincide with impacts experienced in the United States in the event that the impacts in the United States improve over time due to increased vaccinations or improved medical treatments.

Accordingly, to the extent that the impact of the COVID-19 pandemic in the United States may improve over time, results of operations may continue to be adversely affected by COVID-19 impacts in other areas of the world.

We cannot predict the extent or duration of the COVID pandemic, the effects of the COVID pandemic on the global, national or local economy, or the effect of the COVID pandemic on our business, financial position, results of operations, and cash flows.

Due to the geographic scope of our operations, including emerging markets, and our sale to customers around the world, our operations and the demand for our products are subject to the impact of COVID-19 on a global scale.

In addition, we cannot predict the extent or duration of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the global, national or local economies, or the effect of the COVID-19 pandemic on our business, financial position, results of operations, and cash flows.

Fresh Start Reporting

The Company applied Financial Accounting Standards Board ("FASB") ASC Topic 852 – Reorganizations ("ASC 852") in preparing the consolidated financial statements.

For periods subsequent to the commencement of the Chapter 11 Cases, ASC 852 requires distinguishing transactions associated with the reorganization separate from activities related to the ongoing

operations of the business.

Upon the effectiveness of the Plan and the emergence of the Debtors from the Chapter 11 Cases, the Company determined it qualified for fresh start reporting under ASC 852, which resulted in the Company becoming a new entity for financial reporting purposes on the Effective Date (as defined below).

Our financial results for the five months ended August 31, 2020 and for the fiscal years ended March 31, 2020 and 2019 are referred to as those of the “Predecessor.” Our financial results for the seven months ended March 31, 2021 are referred to as those of the “Successor.” Our results of operations as reported in our Consolidated Financial Statements for these periods are prepared in accordance with fresh start reporting, which requires that we report on our results for the periods prior to the Effective Date separately from the period following the Effective Date.

The Company elected to apply fresh start reporting using a convenience date of August 31, 2020 (the "Fresh Start Reporting Date").

For periods subsequent to the commencement of the Chapter 11 Cases, ASC 852 requires distinguishing transactions associated with the reorganization separate from activities related to the ongoing operations of the business.

Our financial results for the year ended March 31, 2020 and for the five months ended August 31, 2020 are referred to as those of the "Predecessor." Our financial results for the seven months ended March 31, 2021 and for the year ended March 31, 2022 are referred to as those of the "Successor." Our results of operations as reported in our consolidated financial statements for these periods are prepared in accordance with fresh start reporting, which requires that we report on our results for the periods prior to the Effective Date separately from the period following the Effective Date.

The Company elected to apply fresh start reporting using a convenience date of August 31, 2020

(the "Fresh Start Reporting Date").

The Company evaluated and concluded the events between August 24, 2020 and August 31, 2020 were not material to the Company's financial reporting on both a quantitative or qualitative basis.

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Fresh Start Reporting " to the "Notes to Consolidated Financial Statements" for additional information.

We do not believe that reviewing the results of periods that span the Fresh Start Reporting Date in isolation would be useful in identifying any trends in or reaching any conclusions regarding our overall operating performance.

Management believes that operating metrics for the Successor for the seven months ended March 31, 2021 when combined with those of the Predecessor for the five months ended August 31, 2020 provides a more meaningful comparison to the results for the fiscal year ended March 31, 2020 and are useful in identifying current business trends.

We do not believe that reviewing the results of periods that span the Fresh Start Reporting Date in isolation would be useful in identifying trends in or reaching conclusions regarding our overall operating performance.

Management believes that operating metrics for the Successor for the seven months ended March 31, 2021 when combined with those of the Predecessor for the five months ended August 31, 2020 provides a more meaningful comparison to the results for the fiscal years ended March 31, 2020 and 2022 and are useful in identifying current business trends.

Accordingly, in addition to presenting our results of operations as reported in our consolidated financial statements in accordance with U.S.

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In the following discussion of results of operations, comparisons of combined results for the fiscal year ended March 31, 2021 are to the comparable U.S.

GAAP measures for the fiscal year ended March 31, 2020.

GAAP measures for the fiscal years ended March 31, 2022 and 2020.

Results of Operations

Years Ended March 31, 2022 and 2021

Successor Predecessor Combined

Consolidated Successor Predecessor Combined

(in millions) Year Ended March 31, 2022 Seven months ended March 31, 2021 Five months ended August 31, 2020 Year ended

March 31, 2021

Sales and other operating revenues $ 1,639.9 $ 884.3 $ 447.6 $ 1,331.9

Cost of goods and services sold 1,412.8 767.9 402.6 1,170.5

Gross profit* 227.1 116.5 45.0 161.5

Gross profit as a percent of sales 13.8 % 13.2 % 10.1 % 12.1 %

Selling, general, and administrative expenses $ 142.0 $ 110.0 $ 87.9 $ 197.9

Other expense, net 3.1 9.6 0.5 10.1

Restructuring and asset impairment charges 8.0 11.8 0.6 12.4

Goodwill impairment 32.2 1.1 — 1.1

Operating income (loss)* 41.7 (16.0) (44.0) (60.0)

Loss on deconsolidation/disposition of subsidiaries 10.7 70.2 — 70.2

Debt retirement expense 2.0 — 0.8 0.8

Interest expense, net 108.4 55.4 45.2 100.6

Reorganization items, net — — 106.0 106.0

Income tax expense 12.6 13.2 0.3 13.5

Income from unconsolidated affiliates, net 10.0 11.9 2.4 14.3

Net income (loss) attributable to noncontrolling interests 0.1 (6.3) (1.0) (7.3)

Net (loss) income attributable to Pyxus International, Inc.* $ (82.1) $ (136.7) $ 19.0 $ (117.7)

Product revenues $ 1,531.8 $ 814.5 $ 407.1 $ 1,221.6

Tobacco costs 1,233.7 645.2 331.3 976.5

Transportation, storage, and other period costs 92.2 50.2 21.2 71.4

Total cost of goods sold 1,325.9 695.4 352.5 1,047.9

Product revenue gross profit 205.9 119.1 54.6 173.7

Product revenue gross profit as a percent of sales 13.4 % 14.6 % 13.4 % 14.2 %

Kilos sold 381.0 214.2 112.0 326.2

Average price per kilo $ 4.02 $ 3.80 $ 3.63 $ 3.74

Average cost per kilo 3.48 3.25 3.15 3.21

Average gross profit per kilo 0.54 0.55 0.48 0.53

Processing and other revenues 95.4 50.0 31.1 81.1

Processing and other revenues costs of services sold 65.9 36.6 24.4 61.0

Processing and other gross margin 29.5 13.4 6.7 20.1

Sales and other operating revenues $ 12.6 $ 19.9 $ 9.4 $ 29.3

Cost of goods and services sold 21.0 35.9 25.7 61.6

Gross loss (8.4) (16.0) (16.3) (32.3)

Segment operating income (loss):

Leaf 106.2 43.7 (0.1) 43.6

All Other (24.2) (46.8) (43.3) (90.1)

Segment operating income (loss)* $ 81.9 $ (3.1) $ (43.4) $ (46.5)

*Amounts may not equal column totals due to rounding.

Segment operating income (loss) of $81.9 million for the year ended March 31, 2022 increased $128.5 million, or 276.1%, from combined operating loss of $46.5 million for the year ended March 31, 2021.

This increase was mainly due to higher leaf sales and other operating revenues and increased average leaf gross margin per kilo, as well as the deconsolidation of the Canadian Cannabis Subsidiaries in the fourth quarter of year ended March 31, 2021 and savings from restructuring initiatives contributing to gross profit improvement and the reduction of sales, general, and administrative expenses.

Sales and other operating revenues increased $308.0 million, or 23.1%, to $1,639.9 million for the year ended March 31, 2022 from combined sales and other operating revenues of $1,331.9 million for the year ended March 31, 2021.

This increase was due to a 16.8% increase in kilo volume and a 7.5% increase in average price per kilo.

The 16.8% increase in kilo volume was driven by larger crop sizes in Africa and increased market share in Africa, Asia, and South America partially due to customers reversing their vertical integration in certain markets.

In addition, 21.1 million kilos or $178.3 million of shipments were delayed by the COVID-19 pandemic and customer shipping instructions from the prior year into the current year and was offset by similar volume of shipments expected in the current year that has been delayed into next year in Africa, North America, and South America.

The 7.5% increase in average price per kilo was primarily due to product mix having a higher concentration of lamina in Asia, Africa, and Europe, as well as customer and grade mix in Africa and North America.

Cost of goods and services sold increased $242.3 million, or 20.7%, to $1,412.8 million for the year ended March 31, 2022 from combined cost of goods and services sold of $1,170.5 million for the year ended March 31, 2021.

This increase was driven by the increase in sales and other operating revenues.

Average cost per kilo increased primarily due to higher tobacco prices.

Gross profit as a percent of sales increased to 13.8% for the year ended March 31, 2022 from combined gross profit as a percent of sales of 12.1% for the year ended March 31, 2021.

This increase was mainly due to the deconsolidation of the Company's Canadian Cannabis Subsidiaries in the fourth quarter of the year ended March 31, 2021, the wind down of the industrial hemp and CBD businesses, and customer mix.

Average gross profit per kilo increased primarily due to customer mix.

Selling, general, and administrative expenses decreased $55.9 million, or 28.2%, to $142.0 million for the year ended March 31, 2022 from combined selling, general, and administrative expenses of $197.9 million for the year ended March 31, 2021.

Selling, general, and administrative expenses as a percent of sales decreased to 8.7% for the year ended March 31, 2022 from combined selling, general, and administrative expenses as a percent of sales of 14.9% for the year ended March 31, 2021.

These decreases were related to increased sales and other operating revenues, the deconsolidation of the Canadian Cannabis Subsidiaries in the fourth quarter of year ended March 31, 2021, and savings from restructuring initiatives.

Goodwill impairment charges of $32.2 million for the year ended March 31, 2022 were from the full write-off of the carrying value of goodwill for each of the Company's reporting units.

See " Note 16.

Goodwill and Other Intangibles, Net " for additional information.

Loss on deconsolidation/disposition of subsidiaries decreased $59.5 million, or 84.8%, to $10.7 million for the year ended March 31, 2022 from combined loss on deconsolidation/disposition of subsidiaries of $70.2 million for the year ended March 31, 2021.

The combined loss on deconsolidation/disposition of subsidiaries in the prior year was attributable to the deconsolidation of the Canadian Cannabis Subsidiaries in connection with the commencement of the CCAA Proceeding, while the loss on deconsolidation/disposition of subsidiaries in the current year was attributable to write-downs of the Company's related party receivable from the CCAA Proceeding and the disposition of Humble Juice during the three months ended December 31, 2021.

Combined reorganization items of $106.0 million for the year ended March 31, 2021 were incurred during the pendency of the Chapter 11 Cases.

Results of Operations

Years Ended March 31, 2021 and 2020

Consolidated Successor Predecessor Combined

(Non-GAAP) Predecessor

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Gross profit* 116.5 45.0 161.5 224.7

Gross profit as a percent of sales 13.2 % 10.1 % 12.1 % 14.7 %

Selling, general, and administrative expenses $ 110.0 $ 87.9 $ 197.9 $ 199.0

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Operating loss (16.0) (44.0) (60.0) (11.6)

Loss on deconsolidation of subsidiaries 70.2 — 70.2 —

Loss on deconsolidation/disposition of subsidiaries 70.2 — 70.2 —

Debt retirement expense — 0.8 0.8 —

Interest expense 56.7 46.6 103.3 136.7

Interest income 1.3 1.4 2.7 3.9

Interest expense, net 55.4 45.2 100.6 132.8

Reorganization items — 106.0 106.0 —

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Net (loss) income attributable to Pyxus International, Inc.* $ (136.7) $ 19.0 $ (117.7) $ (264.7)

Sales and other operating revenues $ 814.5 $ 407.1 $ 1,221.6 $ 1,428.6

Tobacco costs 645.2 331.3 976.5 1,142.4

Transportation, storage, and other period costs 50.2 21.2 71.4 83.9

Total cost of goods sold 695.4 352.5 1,047.9 1,226.3

Product revenue gross profit 119.1 54.6 173.7 202.3

Product revenue gross profit as a percent of sales 14.6 % 13.4 % 14.2 % 14.2 %

Kilos sold 214.2 112.0 326.2 342.8

Average price per kilo $ 3.80 $ 3.63 $ 3.74 $ 4.17

Average cost per kilo 3.25 3.15 3.21 3.58

Average gross profit per kilo 0.55 0.48 0.53 0.59

Processing and other revenues 50.0 31.1 81.1 78.8

Processing and other revenues costs of services sold 36.6 24.4 61.0 59.5

Processing and other gross margin 13.4 6.7 20.1 19.3

Sales and other operating revenues $ 19.9 $ 9.4 $ 29.3 $ 19.9

Cost of goods and services sold 35.9 25.7 61.6 16.8

Gross (loss) profit (16.0) (16.3) (32.3) 3.1

Segment operating (loss) income:

Leaf 43.7 (0.1) 43.6 99.0

All Other (46.8) (43.3) (90.1) (71.2)

Segment operating (loss) income $ (3.1) $ (43.4) $ (46.5) $ 27.8

*Amounts may not equal column totals due to rounding.

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This decrease was partially offset by $32.1 million of inventory write-offs related to the Company's actions to exit operations of the industrial hemp businesses and shifts in expected future products mix in response to market supply conditions.

Combined gross profit as a percent of sales decreased to 12.1% for the fiscal year ended March 31, 2021 from 14.7% for the fiscal year ended March 31, 2020.

Combined gross profit as a percent of sales decreased to 12.1% for the year ended March 31, 2021 from 14.7% for the year ended March 31, 2020.

This decrease was mainly due to the inventory write-offs described above and product mix in Africa and Europe having a lower concentration of lamina.

Combined selling, general, and administrative expenses decreased $1.1 million, or 0.6%, to $197.9 million for the year ended March 31, 2021 from $199.0 million for the year ended March 31, 2020.

This decrease was driven by lower travel expenses due to the COVID-19 pandemic, current-year savings from restructuring initiatives, and $13.8 million of costs incurred to evaluate and develop plans for a potential partial monetization of interests in subsidiaries in the Other Products and Services segment in the prior year.

The decrease was partially offset by $21.8 million of expenses in the current year associated with the Chapter 11 Cases.

Combined selling, general, and administrative expenses as a percent of sales increased to 14.9% for the year ended

March 31, 2021 from 13.0% for the year ended March 31, 2020 primarily due to the decrease in sales and other operating revenues.

Combined selling, general, and administrative expenses as a percent of sales increased to 14.9% for the year ended March 31, 2021 from 13.0% for the year ended March 31, 2020 primarily due to the decrease in sales and other operating revenues.

Combined restructuring and asset impairment charges increased $6.8 million or 121.4% to $12.4 million for the year ended March 31, 2021 from $5.6 million for the year ended March 31, 2020.

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operations, which included the industrial hemp and CBD businesses, and the continued restructuring of certain African operations.

Combined loss on deconsolidation of subsidiaries of $70.2 million in the fiscal year ended March 31, 2021 related to the deconsolidation of the Canadian Cannabis Subsidiaries in connection with the commencement of the CCAA Proceeding.

Combined interest expense decreased $33.4 million, or 24.4%, to $103.3 million for the year ended March 31, 2021 from $136.7 million for the year ended March 31, 2020.

Combined loss on deconsolidation/disposition of subsidiaries of $70.2 million in the year ended March 31, 2021 related to the deconsolidation of the Canadian Cannabis Subsidiaries in connection with the commencement of the CCAA Proceeding.

Combined interest expense, net decreased $32.2 million, or 24.2%, to $100.6 million for the year ended March 31, 2021 from $132.8 million for the year ended March 31, 2020.

This decrease was driven by lower outstanding long-term debt balances, as well as lower balances on the African seasonal lines of credit.

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This decrease was primarily due to the reversal of valuation allowances recorded in the prior year, which were driven by substantial doubt regarding the Company's ability to continue as a going concern prior to the implementation of the Plan.

Leaf - North America Region Supplemental Information

Successor Predecessor Combined

(Non-GAAP) Predecessor

(in millions, except per kilo amounts) Seven months ended March 31, 2021 Five months ended August 31, 2020 Year ended

March 31, 2021 Year ended

March 31, 2020

Kilos sold 19.8 9.5 29.3 36.1

Tobacco sales and other operating revenues:

Sales and other operating revenues $ 113.4 $ 51.2 $ 164.6 $ 192.5

Average price per kilo 5.73 5.39 5.62 5.33

Processing and other revenues 23.8 6.5 30.3 32.2

Total sales and other operating revenues 137.2 57.7 194.9 224.7

Tobacco cost of goods sold:

Tobacco costs 91.1 39.3 130.4 153.4

Transportation, storage and other period costs 8.9 5.6 14.5 18.4

Derivative financial instrument and exchange (gains) losses (0.1) 0.3 0.2 (0.1)

Total tobacco cost of goods sold 99.9 45.2 145.1 171.7

Average cost per kilo 5.05 4.76 4.95 4.76

Processing and other revenues costs of services sold 20.2 4.4 24.6 25.6

Total cost of goods and services sold 120.1 49.6 169.7 197.3

Gross profit 17.1 8.1 25.2 27.4

Selling, general, and administrative expenses 8.1 7.2 15.3 15.3

Other expense, net (0.3) (0.5) (0.8) (1.4)

Restructuring and asset impairment charges (recovery) 0.4 — 0.4 (0.1)

Goodwill impairment — — — 2.8

Operating income $ 8.3 $ 0.4 $ 8.7 $ 8.0

Combined total sales and other operating revenues decreased $29.8 million, or 13.3%, to $194.9 million f or the year ended March 31, 2021 from $224.7 million for the year ended March 31, 2020.

This decrease was due to an 18.8% decrease in volume attributable to shipments delayed into fiscal 2022 by the COVID-19 pandemic and customer shipping instructions.

This decrease was partially offset by a 5.4% increase in average sales price due to product mix having a higher concentration of lamina and changes in customer mix.

Combined cost of goods and services sold decreased $27.6 million, or 14.0%, to $169.7 million f or the year ended March 31, 2021 from $197.3 million for the year ended March 31, 2020.

This decrease was mainly due to the decrease in sales and other operating revenues.

Combined gross profit as a percent of sales increased slightly to 12.9% f or the year ended March 31, 2021 from 12.2% for the year ended March 31, 2020 due to a 5.4% increase in average sales price due to product mix having a higher concentration of lamina and changes in customer mix.

Leaf - Other Regions Supplemental Information

Successor Predecessor Combined

(Non-GAAP) Predecessor

(in millions, except per kilo amounts) Seven months ended March 31, 2021 Five months ended August 31, 2020 Year ended

March 31, 2021 Year ended

March 31, 2020

Kilos sold 194.4 102.5 296.9 306.7

Tobacco sales and other operating revenues:

Sales and other operating revenues $ 701.1 $ 355.9 $ 1,057.0 $ 1,236.0

Average price per kilo 3.61 3.47 3.56 4.03

Processing and other revenues 26.2 24.6 50.8 46.6

Total sales and other operating revenues 727.3 380.5 1,107.8 1,282.6

Tobacco cost of goods sold:

Tobacco costs 554.1 292.0 846.1 989.0

Transportation, storage and other period costs 39.5 16.9 56.4 57.4

Derivative financial instrument and exchange losses (gains) 1.9 (1.6) 0.3 8.2

Total tobacco cost of goods sold 595.5 307.3 902.8 1,054.6

Average cost per kilo 3.06 3.00 3.04 3.44

Processing and other revenues costs of services sold 16.4 20.0 36.4 33.9

Total cost of goods and services sold 611.9 327.3 939.2 1,088.5

Gross profit 115.4 53.2 168.6 194.1

Selling, general, and administrative expenses 67.1 54.5 121.6 119.0

Other (expense) income, net (13.3) 0.8 (12.5) 13.2

Restructuring and asset impairment charges 6.3 0.5 6.8 5.5

Goodwill impairment — — — 13.7

Operating income (loss) $ 28.7 $ (1.0) $ 27.7 $ 69.1

Combined total sales and other operating revenues decreased $174.8 million, or 13.6%, to $1,107.8 million f or the year ended March 31, 2021 from $1,282.6 million for the year ended March 31, 2020.

This decrease was due to an 11.7% decrease in average sales prices and a 3.2% decrease in volume.

The decrease in average sales price was due to changes in foreign exchange rates in Europe and South America and product mix in Africa and Europe having a lower concentration of lamina.

This decrease was partially offset by product mix in Asia and South America having a higher concentration of lamina.

The decrease in volume was driven by smaller crop sizes in Africa and shipments delayed into fiscal 2022 by the COVID-19 pandemic in Africa and Asia.

This decrease was partially offset by higher volume in South America driven by the timing of shipments.

Combined cost of goods and services sold decreased $149.3 million, or 13.7%, to $939.2 million f or the year ended March 31, 2021 from $1,088.5 million for the year ended March 31, 2020.

This decrease was mainly due to the decrease in sales and other operating revenues.

Combined gross profit as a percent of sales increased slightly to 15.2% f or the year ended March 31, 2021 from 15.1% for the year ended March 31, 2020 due to changes in foreign currency exchange rates in Europe and South America.

Combined selling, general, and administrative expenses increased $2.6 million, or 2.2%, to $121.6 million f or the year ended March 31, 2021 from $119.0 million for the year ended March 31, 2020 driven by higher accounts receivable write-offs and higher allocations of general corporate services.

This increase was partially offset by lower travel expenses due to the COVID-19 pandemic and changes in foreign currency exchange rates in Europe and South America.

Combined selling, general, and administrative expenses as a percent of sales increased to 11.0% f or the year ended March 31, 2021 from 9.3% for the year ended March 31, 2020 due to the decrease in sales and other operating revenues.

Restructuring and asset impairment charges increased $1.3 million, or 23.6%, to $6.8 million for the year ended March 31, 2021 from $5.5 million for the year ended March 31, 2020.

This increase was primarily due to employee separation and impairment charges for certain African operations.

Refer to "Note 8.

Restructuring and Asset Impairment Charges" to the "Notes to Consolidated Financial Statements" for additional information.

Other Products and Services Segment Supplemental Information

Successor Predecessor Combined

(Non-GAAP) Predecessor

(in millions) Seven months ended March 31, 2021 Five months ended August 31, 2020 Year ended

March 31, 2021 Year ended

March 31, 2020

Sales and other operating revenues $ 19.9 $ 9.4 $ 29.3 $ 19.9

Cost of goods and services sold 35.9 25.7 61.6 16.8

Gross (loss) profit (16.0) (16.3) (32.3) 3.1

Selling, general, and administrative expenses 34.8 26.2 61.0 64.7

Other income (expense), net 4.0 (0.8) 3.2 (9.6)

Restructuring and asset impairment charges 5.2 — 5.2 0.3

Goodwill impairment 1.1 — 1.1 17.3

Operating loss $ (53.1) $ (43.3) $ (96.4) $ (88.8)

Combined sales and other operating revenues increased $9.4 million, or 47.2%, to $29.3 million f or the year ended March 31, 2021 from $19.9 million for the year ended March 31, 2020.

This increase was primarily due to an increase in cannabinoid revenue attributable to sales occurring in most of the Canadian provinces, as well as the launch of the GO!

cannabinoid product line in Canada.

This increase was partially offset by a decrease in e-liquids revenue related to a general industry slow-down amid health and regulatory concerns, and by the global impact of the COVID-19 pandemic.

Combined cost of goods and services sold increased $44.8 million, or 266.7%, to $61.6 million f or the year ended March 31, 2021 from $16.8 million for the year ended March 31, 2020.

This increase was mainly due to $32.1 million of inventory write-offs of cannabis and industrial hemp inventory driven by a shift in expected future products mix in response to market supply conditions and continued market price compression, as well as the Company's actions to exit operations of the industrial hemp businesses.

Combined gross (loss) profit as a percent of sales decreased to (110.2)% f or the year ended March 31, 2021 from 15.6% for the year ended March 31, 2020.

This decrease was mainly due to the inventory write-downs described above.

Combined selling, general, and administrative expenses decreased $3.7 million, or 5.7%, to $61.0 million f or the year ended March 31, 2021 from $64.7 million for the year ended March 31, 2020.

Combined selling, general, and administrative expenses as a percent of sales decreased to 208.2% f or the year ended March 31, 2021 from 325.1% for the year ended March 31, 2020.

These decreases were mainly due to the increase in combined sales and other operating revenues and higher expenses in the prior year for the evaluation of a partial monetization of the Company's investments in certain businesses in the segment.

Restructuring and asset impairment charges of $5.2 million f or the year ended March 31, 2021 were incurred in connection with employee separation and impairment charges related to the CCAA Proceeding and the restructuring of certain U.S.

operations, which included the industrial hemp and CBD businesses.

Refer to "Note 8.

Restructuring and Asset Impairment Charges" to the "Notes to Consolidated Financial Statements" for additional information.

Goodwill impairment charges of $1.1 million for the year ended March 31, 2021 were related to the full write-off of the carrying value of goodwill for the Other Products and Services - Cannabis reporting unit.

Refer to "Note 17.

Goodwill and Other Intangible Assets, net" to the "Notes to Consolidated Financial Statements" for additional information.

Comparison of the Year Ended March 31, 2020 to the Year Ended March 31, 2019

For a comparison of our results of operations for the years ended March 31, 2020 to March 31, 2019, see "Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Annual Report on Form 10-K for the fiscal year ended March 31, 2020 of Old Pyxus, filed with the SEC on August 24, 2020.

Liquidity and Capital Resources

Our primary sources of liquidity are cash generated from operations, cash collections from our securitized receivables, and short-term borrowings under our foreign seasonal lines of credit.

Our liquidity requirements are affected by various factors from our core tobacco leaf business, including crop seasonality, foreign currency and interest rates, green tobacco prices, customer mix, crop size, and quality.

Our leaf tobacco business is seasonal, and purchasing, processing, and selling activities have several associated peaks where cash on-hand and outstanding indebtedness may vary significantly compared to fiscal year end.

Although we believe that our sources of liquidity will be sufficient to fund our anticipated needs for the next twelve months, we anticipate periods during which our liquidity needs will approach the levels of our anticipated available cash and permitted borrowings under our credit facilities.

The first three quarters generally represent the peak of our working capital requirements.

Although we believe that our sources of liquidity will be sufficient to fund our anticipated operating needs for the next twelve months, we anticipate periods during which our liquidity needs for operations will approach the levels of our anticipated available cash and permitted borrowings under our credit facilities.

Unanticipated developments affecting our liquidity needs, including with respect to the foregoing factors, and sources of liquidity, including impacts affecting our cash flows from operations and the availability of capital resources (including an inability to renew or refinance seasonal lines of credit), may result in a deficiency in liquidity.

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It is possible that, depending on the occurrence of events affecting our liquidity needs and sources of liquidity, such plans may not be sufficient to adequately or timely address a liquidity deficiency.

As of March 31, 2021, we are in our leaf working capital build.

In South America, we are in the process of purchasing and processing the most recent crop, while the peak tobacco sales season for South America is in its beginning stages.

Africa is in the beginning of its buying, processing, and selling season and is utilizing working capital funding as well.

Asia, Europe, and North America are still selling and planning for the next crop that is now being grown.

ABL Credit Facility

On the Effective Date, Pyxus Holdings entered into an Exit ABL Credit Agreement (the “ABL Credit Agreement”), dated as of August 24, 2020 by and among, amongst others, Pyxus Holdings, certain lenders party thereto (the “ABL Lenders”) and Wells Fargo Bank, National Association, as administrative agent and collateral agent to establish an asset-based revolving credit facility (the “ABL Credit Facility”).

The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to an initial maximum principal amount of $75.0 million, subject to the limitations described below in this paragraph.

Under certain conditions, Pyxus Holdings may solicit the ABL Lenders to provide additional revolving loan commitments under the ABL Credit Facility in an aggregate amount not to exceed $15.0 million.

The ABL Credit Facility is required to be drawn at all times in an amount greater than or equal to the lesser of (i) 25% of total commitments under the ABL Credit Facility and (ii) $18.75 million.

The amount available under the ABL Credit Facility is limited by a borrowing base consisting of eligible accounts receivable and inventory as follows:

• 85% of eligible accounts receivable, plus

• the lesser of (i) 70% of eligible inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits) or (ii) 85% of the appraised net-orderly-liquidation value of eligible inventory.

The ABL Credit Facility permits both base rate borrowings and LIBOR borrowings.

Borrowings under the ABL Credit Facility bear interest at an annual rate equal to LIBOR plus 475 basis points or 375 basis points above base rate, as applicable, with a fee on unutilized commitments at an annual rate of 100 basis points.

Pyxus Holdings’ obligations under the ABL Credit Facility (and certain related obligations) are (a) guaranteed by Pyxus Parent, Inc.

and the Company and all of Pyxus Holdings’ material domestic subsidiaries, and each of Pyxus Holdings’ future material domestic subsidiaries is required to guarantee the ABL Credit Facility on a senior secured basis (including Pyxus Holdings, collectively, the “ABL Loan Parties”) and (b) secured by certain collateral owned by the ABL Loan Parties.

Under the terms of the ABL Credit Facility, if (i) an event of default has occurred and is continuing or (ii) excess borrowing availability under the ABL Credit Facility (based on the lesser of the commitments thereunder and the borrowing base) (the “Excess Availability”) falls below the greater of (x) $7.5 million and (y) 10% of the lesser of (A) the commitments under the ABL Credit Facility at such time and (B) the borrowing base at such time (such greater amount being the “Cash Dominion Threshold”), the ABL Loan Parties will become subject to cash dominion, which will require daily prepayment of loans under the ABL Credit Facility with the cash deposited in certain deposit accounts of the ABL Loan Parties, including concentration accounts, and will restrict the ABL Loan Parties’ ability to transfer cash from their concentration accounts to their disbursement accounts.

Such cash dominion period (a “Dominion Period”) shall end when (i) if arising as a result of a continuing event of default, such event of default ceases to exist, or (ii) if arising as a result of non-compliance with the Excess Availability threshold, Excess Availability shall be equal to or greater than the Cash Dominion Threshold for a period of 30 consecutive days.

No Dominion Period existed as of March 31, 2021.

The ABL Credit Agreement governing the ABL Credit Facility contains a covenant requiring that the Company’s fixed charge coverage ratio be no less than 1.00 to 1.00 during any Dominion Period.

The ABL Credit Facility matures on February 24, 2023, subject to extension on terms and conditions set forth in the ABL Credit Agreement.

At March 31, 2021, $7.5 million was available for borrowing under the ABL Credit Facility, after reducing availability by the aggregate borrowings under the ABL Credit Facility of $67.5 million outstanding on that date.

As of March 31, 2021, Pyxus Holdings was in compliance with all covenants under the ABL Credit Agreement.

Term Loan Credit Facility

On the Effective Date, Pyxus Holdings entered into an Exit Term Loan Credit Agreement (the “Term Loan Credit Agreement”), dated as of August 24, 2020 by and among, amongst others, Pyxus Holdings, certain lenders party thereto and Alter Domus (US) LLC, as administrative agent and collateral agent to establish a term loan credit facility in an aggregate principal amount of approximately $213.4 million (the “Term Loan Credit Facility”).

The aggregate principal amount of loans outstanding under Debtors’ debtor-in-possession financing facility, and related fees, were converted into, or otherwise satisfied with the proceeds of, the Term Loan Credit Facility.

The Term Loan Credit Facility permits both base rate borrowings and LIBOR borrowings.

Borrowings under the Term Loan Credit Facility bear interest at an annual rate equal to LIBOR plus 800 basis points or 700 basis points above base rate, as applicable.

In addition to the cash interest payments, from and after the first anniversary of the Term Loan Credit Agreement, the term loans (the “Term Loans”) under the Term Loan Credit Facility bear “payment in kind” interest in an annual rate equal to 100 basis points, which rate increases by an additional 100 basis points on each of the second, third and fourth anniversaries of the Term Loan Credit Agreement.

Pyxus Holdings’ obligations under the Term Loan Credit Facility (and certain related obligations) are (a) guaranteed by Pyxus Parent, Inc.

and the Company, all of Pyxus Holdings’ material domestic subsidiaries and certain of Pyxus Holdings’ foreign subsidiaries (the “Foreign Guarantors”), and each of Pyxus Holdings’ future material domestic subsidiaries is required to guarantee the Term Loan Credit Facility on a senior secured basis (including Pyxus Holdings, collectively, the “Term Facility Loan Parties”) and (b) secured by certain collateral owned by the Term Facility Loan Parties.

The Term Loans and the Term Loan Credit Facility mature on February 24, 2025.

At March 31, 2021, the aggregate principal amount of the Term Loans outstanding was approximately $215.6 million.

As of March 31, 2021, Pyxus Holdings was in compliance with all covenants under the Term Loan Credit Agreement.

Debt Financing

We continue to finance our business with a combination of short-term and long-term seasonal credit lines, the long-term debt securities, advances from customers, and cash from operations when available.

See " Note 19.

Debt Arrangements " to the "Notes to Consolidated Financial Statements" for a summary of our short-term and long-term debt.

We continuously monitor and, as available, adjust funding sources as needed to enhance and drive various business opportunities.

From time to time we may take steps to reduce our debt or otherwise improve our financial position.

Such actions could include prepayments, open market debt repurchases, negotiated repurchases, other redemptions or retirements of outstanding debt, and refinancing of debt.

The amount of prepayments or the amount of debt that may be repurchased, refinanced, or otherwise retired, if any, will depend on market condition, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.

Exit Term Loan Credit Facility

On the Effective Date, Pyxus Holdings entered into an Exit Term Loan Credit Agreement (the "Exit Term Loan Credit Agreement"), to establish a term loan credit facility in an aggregate principal amount of approximately $213.4 million (the "Exit Term Loan Credit Facility").

The Exit Term Loan Credit Facility permits both base rate borrowings and LIBOR borrowings.

Borrowings under the Exit Term Loan Credit Facility bear interest at an annual rate equal to LIBOR plus 800 basis points or 700 basis points above base rate, as applicable.

In addition to the cash interest payments, from and after the first anniversary of the Exit Term Loan Credit Agreement, the term loans (the "Exit Term Loans") under the Exit Term Loan Credit Facility bear "payment in kind" interest in an annual rate equal to 100 basis points, which rate increases by an additional 100 basis points on each of the second, third and fourth anniversaries of the Exit Term Loan Credit Agreement.

Pyxus Holdings’ obligations under the Exit Term Loan Credit Facility (and certain related obligations) are (a) guaranteed by Pyxus Parent, Inc.

and the Company, all of Pyxus Holdings’ material domestic subsidiaries and certain of Pyxus Holdings’ foreign subsidiaries (the "Foreign Guarantors"), and each of Pyxus Holdings’ future material domestic subsidiaries is required to guarantee the Exit Term Loan Credit Facility on a senior secured basis (including Pyxus Holdings, collectively, the "Exit Term Facility Loan Parties") and (b) secured by certain collateral owned by the Exit Term Facility Loan Parties.

The Exit Term Loans and the Exit Term Loan Credit Facility mature on February 24, 2025.

At March 31, 2022, the aggregate principal amount of the Exit Term Loans outstanding was approximately $219.5 million.

As of March 31, 2022, Pyxus Holdings was in compliance with all covenants under the Exit Term Loan Credit Agreement.

Refer to " Note 19.

Debt Arrangements " to the "Notes to Consolidated Financial Statements" for additional information.

Senior Secured First Lien Notes

On the Effective Date, Pyxus Holdings issued approximately $280.8 million in aggregate principal amount of its 10.00% Senior Secured First Lien Notes due 2024 (the “Notes”) to holders of Allowed First Lien Notes Claims (as defined in the Plan) pursuant to the Indenture (the “Indenture”) dated as of the Effective Date among Pyxus Holdings, the initial guarantors party thereto, and Wilmington Trust, National Association, as trustee, and collateral agent.

On the Effective Date, Pyxus Holdings issued approximately $280.8 million in aggregate principal amount of its 10.0% Senior Secured First Lien Notes due 2024 (the "Notes") to holders of specified claims under the Plan pursuant to the Indenture (the "Indenture") dated as of the Effective Date among Pyxus Holdings, the initial guarantors party thereto, and Wilmington Trust, National Association, as trustee, and collateral agent.

The Notes bear interest at a rate of 10.0% per year, payable semi-annually in arrears in cash on February 15 and August 15 of each year.

The Notes are initially guaranteed on a senior secured basis by the Company, all of the Company’s material domestic subsidiaries (other than Pyxus Holdings) and the Foreign Guarantors, on a subordinated basis to the guarantees securing the Term Loan Facility, and each of its future material domestic subsidiaries are required to guarantee the Notes on a senior secured basis (collectively, the "Notes Guarantors").

The Notes are initially guaranteed on a senior secured basis by the Company, all of the Company’s material domestic subsidiaries (other than Pyxus Holdings) and the Foreign Guarantors, on

a subordinated basis to the guarantees securing the Exit Term Loan Facility, and each of its future material domestic subsidiaries are required to guarantee the Notes on a senior secured basis (collectively, the "Notes Guarantors").

The obligations of Pyxus Holdings and the Notes Guarantors with respect to the Notes and the Indenture are secured by certain collateral owned by Pyxus Holdings and the Notes Guarantors.

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At March 31, 2022, each of Pyxus Holdings and each guarantor of the Notes was in compliance with all covenants under the Indenture.

Refer to " Note 19.

Debt Arrangements " to the "Notes to Consolidated Financial Statements" for additional information.

ABL Credit Facility

On February 8, 2022, Pyxus Holdings, certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the "Borrowers"), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc., as guarantors, entered into an ABL Credit Agreement (the "ABL Credit Agreement"), dated as of February 8, 2022, by and among Pyxus Holdings, as Borrower Agent, the Borrowers and parent guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as Administrative Agent and Collateral Agent, to establish an asset-based revolving credit facility (the "ABL Credit Facility"), the proceeds of which may be used to refinance existing senior bank debt, pay fees and expenses related to the ABL Credit Facility, partially fund capital expenditures, and provide for the ongoing working capital needs of the Borrowers.

The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to an initial maximum principal amount of $100.0 million, subject to the limitations described below in this paragraph.

The ABL Credit Facility includes a $20.0 million uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the ABL Credit Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility not to exceed a maximum principal amount of $120.0 million.

The amount available under the ABL Credit Facility is limited by a borrowing base consisting of certain eligible accounts receivable and inventory, reduced by specified reserves, as follows:

• 85% of eligible accounts receivable, plus

• 90% of eligible credit insured accounts receivable, plus

• the lesser of (i) 70% of eligible inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits) or (ii) 85% of the net-orderly-liquidation value percentage of eligible inventory, minus

• applicable reserves.

At March 31, 2022, $10.0 million was available for borrowing under the ABL Credit facility, after reducing availability by the aggregate borrowings under the ABL Credit facility of $90.0 million outstanding on that date and the $20.0 million of Domestic Availability (as defined in the ABL Credit Agreement) required to be maintained.

The ABL Credit Facility permits both base rate borrowings and borrowings based upon the Bloomberg-Short-Term Bank Yield Index rate ("BSBY").

Borrowings under the ABL Credit Facility bear interest at an annual rate equal to one, three, or six-month reserve-adjusted BSBY Rate plus 300 basis points or 200 basis points above base rate, as applicable, with a fee on unutilized commitments at an annual rate of 37.5 basis points.

The ABL Credit Facility matures, subject to extension on terms and conditions set forth in the ABL Credit Agreement, on the earlier of February 8, 2027 or 90 days prior to the earliest maturity of obligations owing under the Exit Term Loan Credit Agreement and the Indenture.

The ABL Credit Facility may be prepaid from time to time, in whole or in part, without prepayment or premium, subject to a termination fee upon the permanent reduction of commitments under the ABL Credit Facility of 300 basis points for terminations in the first year after entry into the ABL Credit Agreement, 200 basis points for terminations in the second year and 100 basis points for termination in the third year.

In addition, customary mandatory prepayments of the loans under the ABL Credit Facility are required upon the occurrence of certain events including, without limitation, outstanding borrowing exposures exceeding the borrowing base, certain dispositions of assets outside of the ordinary course of business in respect of certain collateral securing the ABL Credit Facility and certain casualty and condemnation events.

With respect to base rate loans, accrued interest is payable monthly in arrears and, with respect to BSBY loans, accrued interest is payable monthly and on the last day of any applicable interest period.

The Borrowers’ obligations under the ABL Credit Facility (and certain related obligations) are (a) guaranteed by Pyxus Parent, Inc.

and the Company and all of Pyxus Holdings’ wholly owned domestic subsidiaries, and each of Pyxus Holdings’ future wholly owned domestic subsidiaries is required to guarantee the ABL Credit Facility on a senior secured basis (collectively, the "ABL Loan Parties") and (b) secured by the collateral, as described below, which is owned by the ABL Loan Parties.

The liens and other security interests granted by the ABL Loan Parties on the collateral for the benefit of the lenders under the ABL Credit Facility (and certain related secured parties) are, subject to certain permitted liens, secured by first-priority security interests on a pari passu basis with the security interests securing the ABL Loan Parties’ obligations under the Exit Term Loan Credit Agreement and the Notes.

The obligations of Pyxus Holdings and each other ABL Loan Party under the ABL Credit Facility and any related guarantee are repaid pursuant to a waterfall with respect to portions of the Collateral as set forth in the existing intercreditor agreements with respect to Pyxus Holdings’ senior secured debt.

Cash Dominion

Under the terms of the ABL Credit Facility, if (i) an event of default has occurred and is continuing, (ii) excess borrowing availability under the ABL Credit Facility (based on the lesser of the commitments thereunder and the borrowing base) (the "Excess Availability") falls below 10% of the total commitments under the ABL Credit Facility at such time, or (iii) Domestic Availability (as defined in the ABL Credit Agreement) being less than $20.0 million, the ABL Loan Parties will become subject to cash dominion, which will require daily prepayment of loans under the ABL Credit Facility with the cash deposited in certain deposit accounts of the ABL Loan Parties, including concentration accounts, and will restrict the ABL Loan Parties’ ability to transfer cash from their concentration accounts to their disbursement accounts.

Such cash dominion period (a "Dominion Period") shall end when (i) if arising as a result of a continuing event of default, such event of default ceases to exist, (ii) if arising as a result of non-compliance with the Excess Availability threshold, Excess Availability shall be equal to or greater than 10% of the total commitments under the ABL Credit Facility for a period of 30 consecutive days and no event of default is continuing, or (iii) if arising as a result of Domestic Availability being less than $20.0 million, Domestic Availability is greater than $20.0 million for a period of 30 consecutive days and no event of default is continuing.

The ABL Credit Agreement governing the ABL Credit Facility contains (i) a springing covenant requiring that the Company’s fixed charge coverage ratio be no less than 1.10 to 1.00 during any Dominion Period and (ii) a covenant requiring Domestic Availability greater than $20.0 million at all times until audited financial statements for fiscal year ending March 31, 2023 are delivered under the ABL Credit Agreement.

The ABL Credit Agreement governing the ABL Credit Facility contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s ability to, among other things:

• incur additional indebtedness or issue disqualified stock or preferred stock;

• make investments;

• pay dividends and make other restricted payments;

• sell certain assets;

• create liens;

• enter into sale and leaseback transactions;

• consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets;

• enter into transactions with affiliates;

• designate subsidiaries as Unrestricted Subsidiaries (as defined in the ABL Credit Agreement).

On March 31, 2022, the Borrowers were in compliance with all covenants under the ABL Credit Agreement.

See " Note 19.

Debt Arrangements " to the "Notes to Consolidated Financial Statements" for additional information.

DDTL Facility

On April 23, 2021, Intabex Netherlands B.V.

(“Intabex”), an indirect wholly owned subsidiary of the Company, entered into a Term Loan Credit Agreement (the “DDTL Facility Credit Agreement”), dated as of April 23, 2021 (the “Closing Date”), by and among (i) Intabex, as borrower, (ii) the Company, Pyxus Parent, Inc., Pyxus Holdings, Inc., Alliance One International, LLC, Alliance One International Holdings, Ltd, as guarantors (collectively, the “Parent Guarantors”), (iii) certain funds managed by Glendon Capital Management LP and Monarch Alternative Capital LP, as lenders (collectively and, together with any other lender that is or becomes a party thereto as a lender, the “DDTL Facility Lenders”), and (iv) Alter Domus (US) LLC, as administrative agent and collateral agent.

("Intabex"), an indirect wholly owned subsidiary of the Company, entered into a Term Loan Credit Agreement (as amended on May 21, 2021, the "DDTL Facility Credit Agreement"), dated as of April 23, 2021 (the "Closing Date"), by and among (i) Intabex, as borrower, (ii) the Company, Pyxus Parent, Inc., Pyxus Holdings, Inc., Alliance One International, LLC, Alliance One International Holdings, Ltd, as guarantors (collectively, the "Parent Guarantors"), (iii) the lenders party thereto, which currently include certain funds managed by Glendon Capital Management LP, Monarch Alternative Capital LP, and Owl Creek Asset Management, L.P.

(collectively and, together with any other lender that is or becomes a party thereto as a lender, the "DDTL Facility Lenders"), and (iv) Alter Domus (US) LLC, as administrative agent and collateral agent (the "DDTL Agent").

The DDTL Facility Credit Agreement establishes a $120.0 million delayed-draw term loan credit facility (the "DDTL Facility") permitting borrowings by Intabex in up to four draws on or prior to June 30, 2021 in a minimum amount of $30.0 million each (or, if less than $30.0 million remains available under the DDTL Facility, the remaining commitments under the DDTL Facility) (the "DDTL Loans").

The proceeds of the DDTL Loans are to be used to provide ongoing working capital and for other general corporate purposes of Intabex, the Guarantors (as defined below) and their subsidiaries.

Interest on the aggregate principal amount of outstanding DDTL Loans accrues at an annual rate of LIBOR plus 9.00%, subject to a LIBOR floor of 1.50%, for “LIBOR loans” or, for loans that are not LIBOR loans, at an annual rate of an alternative base rate (as specified in the DDTL Facility Credit Agreement) plus 8.00%.

The obligations of Intabex under the DDTL Facility

Credit Agreement (and certain related obligations) are (a) guaranteed by the Parent Guarantors and Alliance One International Tabak B.V., an indirect subsidiary of the Company, and each of the Company’s domestic and foreign subsidiaries that is or becomes a guarantor of borrowings under the Term Loan Credit Agreement (which subsidiaries are referred to collectively, together with the Parent Guarantors, as the “Guarantors”).

Interest on the aggregate principal amount of outstanding DDTL Loans accrues at an annual rate of LIBOR plus 9.0%, subject to a LIBOR floor of 1.5%, for "LIBOR loans" or, for loans that are not LIBOR loans, at an annual rate of an alternative base

rate (as specified in the DDTL Facility Credit Agreement) plus 8.0%.

The obligations of Intabex under the DDTL Facility Credit Agreement (and certain related obligations) are (a) guaranteed by the Parent Guarantors and Alliance One International Tabak B.V., an indirect subsidiary of the Company, and each of the Company’s domestic and foreign subsidiaries that is or becomes a guarantor of borrowings under the Exit Term Loan Credit Agreement (which subsidiaries are referred to collectively, together with the Parent Guarantors, as the "Guarantors").

The DDTL Facility and all DDTL Loans made thereunder mature on July 31, 2022.

At June 29, 2021, the DDTL Facility was fully drawn and the aggregate principal amount outstanding was $120.0 million, and the Company and each of the Guarantors were in compliance with all covenants under the DDTL Credit Facility Agreement.

At March 31, 2022, the aggregate principal amount of the DDTL Loans outstanding was $107.8 million, and the Company and each of the Guarantors were in compliance with all covenants under the DDTL Credit Facility Agreement.

Related Party Transaction

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reported beneficial ownership of 7,938,792 shares of the Company’s common stock, representing approximately 31.8% of the outstanding shares of the Company’s common stock.

Based on a Schedule 13D filed with the SEC on September 3, 2020 by Monarch Alternative Capital LP, MDRA GP LP and Monarch GP LLC, Monarch Alternative Capital LP reported beneficial ownership of 6,033,340 shares of the Company’s common stock, representing approximately 24.1% of the outstanding shares of the Company’s common stock.

Based on Form 4 filed with the SEC on July 15, 2021, as well as Schedule 13D filed with the SEC on September 3, 2020, by Monarch Alternative Capital LP, MDRA GP LP and Monarch GP LLC, Monarch Alternative Capital LP reported beneficial ownership of 6,140,270 shares of the Company’s common stock, representing approximately 24.6% of the outstanding shares of the Company’s common stock.

Based on a Schedule 13G/A filed with the SEC on February 10, 2022 by Owl Creek Asset Management, L.P.

and Jeffrey A.

Altman, Owl Creek Asset Management, L.P.

is the investment manager of certain funds and reported beneficial ownership of 2,405,287 shares of the Company’s common stock on December 31, 2021, representing approximately 9.6% of the outstanding shares of the Company’s common stock.

Pursuant to a Shareholders Agreement dated as of August 24, 2020 (the "Shareholders Agreement") among Pyxus and certain of its shareholders, including Glendon Capital Management L.P., on behalf of its managed funds and accounts, and Monarch Alternative Capital LP, as investment manager of Monarch Special Opportunities Master Fund Ltd, Monarch Debt Recovery Master Fund Ltd and Monarch Capital Master Partners IV LP, Holly Kim and Patrick Fallon were designated to serve as directors of Pyxus and each continues to serve as a director of Pyxus.

2 unchanged sentences

The DDTL Facility Credit Agreement, any and all borrowings thereunder and the guaranty transactions described above were approved, and determined to be on terms and conditions at least as favorable to the Company and its subsidiaries as could reasonably have been obtained in a comparable arm’s-length transaction with an unaffiliated party, by a majority of the disinterested members of the Board of Directors of Pyxus.

African Seasonal Lines of Credit

On August 13, 2020, certain then subsidiaries of Old Pyxus, which are now subsidiaries of the Company, Alliance One International Holdings, Ltd.

(“AOI Holdings”) and the subsidiaries in Kenya, Malawi, Tanzania, Uganda and Zambia (collectively, the “African Subsidiaries”) entered into an Amendment and Restatement Agreement (the “Initial TDB Facility Agreement”) with Eastern and Southern African Trade and Development Bank (“TDB”).

On August 24, 2020, AOI Holdings, the African Subsidiaries, the Company, Pyxus Parent, Inc., Pyxus Holdings and TDB entered into a Second Amendment and Restatement Agreement (the “TDB Facility Agreement”) to amend and restate the Initial TDB Facility Agreement to add the Company, Pyxus Parent, Inc.

and Pyxus Holdings as guarantors thereunder and to otherwise amend provisions thereof to permit the consummation of the transactions contemplated by the Plan.

The TDB Facility Agreement sets forth the terms that govern the foreign seasonal lines of credit of each of the African Subsidiaries with TDB and supersedes the prior terms in effect.

These lines of credit provide borrowings to fund the purchase of leaf tobacco in the respective jurisdictions to be repaid upon the sale of that tobacco.

The original aggregate maximum borrowing availability under these separate existing foreign seasonal lines of credit was $255.0 million, and the aggregate borrowings were $240.5 million as of August 13, 2020.

Subject to certain conditions, the TDB Facility Agreement increased the maximum aggregate borrowing capacity to $285.0 million, less the amount of outstanding loans borrowed under the existing foreign seasonal lines of credit with TDB.

Loans under the TDB Facility Agreement bear interest at LIBOR plus 6%.

The TDB Facility Agreement initially provided that it terminated on June 30, 2021 and may be renewed at TDB’s discretion.

On June 24, 2021, the Company and certain of its subsidiaries, including the African Subsidiaries, entered into a letter agreement with TDB to amend the TDB Facility Agreement to, among other things, extend the term of the separate lines of credit of each of the Company’s subsidiaries in Malawi, Tanzania, and Zambia by 365 days, effective from and including July 1, 2021, and to cancel the separate lines of credit of the Companies’ subsidiaries in Kenya and Uganda, effective from and including June 24, 2021(with outstanding borrowings for Kenya and Uganda to be repaid by June 30, 2021).

As a result of such amendment, the maximum aggregate borrowing pursuant to the lines of credit under the TDB Facility Agreement is $190.0 million, subject to an increase of an additional $15.0 million upon satisfaction of certain documentation requirements applicable to the line of credit of the Company’s subsidiary in Tanzania.

Refer to "Note 30.

Subsequent Events" to the "Notes to Consolidated Financial Statements” for additional information.

Each of AOI Holdings, the Company, Pyxus Parent, Inc.

and Pyxus Holdings guarantees the obligations of the African Subsidiaries under the TDB Facility Agreement.

The obligations of each African Subsidiary under the TDB Facility Agreement are required to be secured by a first priority pledge of:

• tobacco purchased by that African Subsidiary that is financed by TDB;

See " Note 19.

Debt Arrangements " to the "Notes to Consolidated Financial Statements" for additional information.

On June 2, 2022, we entered into an agreement with the DDTL Facility Lenders and the DDTL Agent, subject to the satisfaction of customary closing conditions, to amend and restate the DDTL Facility Credit Agreement to, among other things, replace the DDTL Facility with a $100.0 million term loan facility maturing on December 2, 2023.

See " Note 30.

Subsequent Events " for additional information.

African Lines of Credit

On August 12, 2021, the Company and certain subsidiaries of the Company, including the Company’s subsidiaries in Malawi, Tanzania, and Zambia (the "African Subsidiary Borrowers"), entered into the Third Amendment and Restatement Agreement (the "Restated TDB Agreement") with Eastern and Southern African Trade and Development Bank ("TDB").

The Restated TDB Agreement sets forth the terms that govern the foreign seasonal lines of credit of each of the African Subsidiary Borrowers with TDB in effect.

The Restated TDB Agreement provides for a lending commitment with respect to the line of credit of the Company’s Malawi subsidiary of $80.0 million, a lending commitment with respect to the line of credit of the Company’s Tanzania subsidiary of $85.0 million, and a lending commitment with respect to the line of credit of the Company’s Zambia subsidiary of $40.0 million, in each case with current borrowing availability reduced by the amount of outstanding loans borrowed under the respective existing line of credit with TDB.

Loans under the Restated TDB Agreement bear interest at LIBOR plus 6%.

The Restated TDB Agreement terminates on June 30, 2024, unless terminated sooner at TDB’s discretion on June 30, 2022 or June 30, 2023.

The terms of the Restated TDB Agreement may also be modified at TDB’s discretion on those dates.

Borrowings under the Restated TDB Agreement are due upon the termination of the Restated TDB Agreement.

Pursuant to the Restated TDB Agreement, each of the Company and its subsidiaries, Pyxus Parent, Inc., and Pyxus Holdings, guarantee the obligations of the African Subsidiary Borrowers under the Restated TDB Agreement.

In addition, the Restated TDB Agreement provides that obligations of each African Subsidiary Borrower under the Restated TDB Agreement are secured by a first priority pledge of:

• tobacco purchased by that African Subsidiary Borrower that is financed by TDB;

• intercompany receivables arising from the sale of the tobacco financed by TDB;

• customer receivables arising from the sale of the tobacco financed by TDB;

• such African Subsidiary’s local collection account receiving customer payments for purchases of tobacco financed by TDB.

The TDB Facility Agreement also requires Alliance One International, LLC, a subsidiary of the Company, to pledge customer receivables arising from the sale of the tobacco financed by TDB and pledge its collection accounts designated for receiving customer payments for purchases of tobacco financed by TDB.

The Company’s subsidiary in Tanzania failed to satisfy a loan-to-value ratio requirement under the TDB Facility Agreement during November and December of 2020 under the TDB Facility Agreement.

As a result, TDB was permitted to declare an event of default with respect to the Tanzania subsidiary’s borrowings under its credit facility under the TDB Facility Agreement and demand repayment of that subsidiary’s borrowings, which were approximately $50.4 million at December 31, 2020.

TDB entered into a First Amendment and Waiver Letter to the TDB Facility Agreement dated December 30, 2020 (the “TDB Waiver”) in which TDB waived the Tanzania subsidiary’s defaults and adjusted the required loan-to-value ratio for the Tanzania subsidiary for each month through June 2021.

The existence of these defaults by the Tanzania subsidiary under the TDB Facility Agreement (the “Tanzania Default”) resulted in defaults and events of default arising under the ABL Credit Facility and the Term Loan Credit Facility, which would have permitted the respective lenders thereunder to demand repayment of the amounts outstanding under the respective facility.

In December 2020, the required lenders under each of the ABL Credit Facility and the Term Loan Credit Facility entered into agreements with the Company waiving the defaults and events of default arising under the respective facility as a result of the Tanzania Default.

In April 2021, the Company discovered that, as a result of certain customer invoice coding errors, its subsidiary in Malawi failed to satisfy a loan-to-value ratio requirement under the TDB Facility Agreement at March 31, 2021 and prior periods.

The subsidiary in Malawi repaid a portion of its borrowings under its credit facility under the TDB Facility Agreement within the time allotted to cure such failure for the March 31, 2021 loan-to-value ratio requirement under the TDB Facility Agreement and, within three business days after the Company’s discovery of the invoicing errors for the prior periods.

TDB waived any default that arose therefrom including with respect to any failure of the subsidiary in Malawi to satisfy the loan-to-value ratio requirement.

Except for the failure by the Malawi subsidiary to satisfy a loan-to-value ratio requirement, which failure was waived as described above, at March 31, 2021, the Company and its subsidiaries party to the TDB Facility Agreement were in compliance with all covenants under the TDB Facility Agreement, as amended by the TDB Waivers, and $168.6 million was available for borrowing under the TDB Facility Agreement, after reducing availability by the aggregate borrowings under the TDB Facility Agreement of $116.4 million outstanding on that date.

Short-Term Borrowings

• such African Subsidiary Borrower's local collection account receiving customer payments for purchases of tobacco financed by TDB.

The Restated TDB Agreement also requires Alliance One International, LLC, a subsidiary of the Company, to pledge customer receivables arising from the sale of the tobacco financed by TDB and pledge its collection accounts designated for receiving customer payments for purchases of tobacco financed by TDB.

At March 31, 2022, the Company and its subsidiaries party to the Restated TDB Agreement were in compliance with all such covenants under the Restated TDB Agreement and $133.4 million was available for borrowing under the Restated TDB Agreement, after reducing availability by the aggregate borrowings under the Restated TDB Agreement of $71.6 million outstanding on that date.

See " Note 19.

Debt Arrangements " to the "Notes to Consolidated Financial Statements" for additional information.

Short-Term Seasonal Lines of Credit

Excluding its long-term credit arrangements, the Company has typically financed its non-U.S.

operations with uncommitted unsecured short-term seasonal lines of credit arrangements with a number of banks.

operations with uncommitted short-term seasonal lines of credit arrangements with a number of banks.

These operating lines are generally seasonal in nature, typically extending for a term of 180 to 270 days corresponding to the tobacco crop cycle in that location.

These facilities are typically uncommitted in that the lenders have the right to cease making loans and demand repayment of loans at any time.

Other than described below, these facilities are typically uncommitted in that the lenders have the right to cease making loans and demand repayment of loans at any time.

These loans are typically renewed at the outset of each tobacco season.

At March 31, 2021, the aggregate outstanding

borrowings of the Company under these seasonal credit lines was approximately $372.2 million and approximately $345.0 million was available for borrowing under these seasonal credit lines, subject to limitations as provided for in the ABL Credit Agreement.

At March 31, 2022, the aggregate outstanding borrowings of the Company under these seasonal credit lines was approximately $372.6 million and approximately $287.2 million was available for borrowing under these seasonal credit lines, subject to limitations as provided for in the ABL Credit Agreement.

The weighted average variable interest rate for these seasonal lines of credit for the year ended March 31, 2022 was 6.1%.

Certain of the foreign seasonal lines of credit, with aggregate outstanding borrowings at March 31, 2021 of approximately $172.5 million, are secured by inventories as collateral of $167.8 million at March 31, 2021.

Additional Information

Additional Information with respect to the ABL Credit Facility, the Term Loan Credit Facility, the Notes and the Indenture, the DDTL Facility, the TDB Facility Agreement and the Company’s seasonal lines of credit, including descriptions of respective affirmative, negative and financial covenants, payment obligations, including certain prepayment obligations, collateral and intercreditor arrangements with respect thereto, provisions establishing events of default thereunder, fees, and other terms and conditions, is set forth in "Note 20.

Debt Arrangements" to the "Notes to Consolidated Financial Statements,” and with respect to the DDTL Facility in "Note 30.

Subsequent Events" to the "Notes to Consolidated Financial Statements,” which information is incorporated by reference herein.

Certain of the foreign seasonal lines of credit, with aggregate outstanding borrowings at March 31, 2022 of approximately $109.4 million, are secured by trade receivables and inventories as collateral.

Seasonal liquidity beyond cash flow from operations is provided by our foreign seasonal lines of credit, advances from customers, and sales of accounts receivable.

For the years ended March 31, 2022 and 2021, our average short-term borrowings, aggregated peak short-term borrowings outstanding, and weighted-average interest rate on short-term borrowings were as follows:

(in millions) March 31, 2022 March 31, 2021

Average short-term borrowings (1)

$ 393.1 $ 461.8

Aggregated peak short-term borrowings outstanding (1)

$ 559.4 $ 818.9

Weighted-average interest rate on short-term borrowings 6.1 % 6.1 %

(1) The Company utilized borrowings under the DDTL Facility during the year ended March 31, 2022 to fund a portion of its tobacco purchasing commitments.

Aggregated peak borrowings for the year ended March 31, 2022 occurred during the fourth q uarter and were due to the timing of purchases of tobacco and repayments in Africa and South America.

Peak borrowings during the prior year and in the current year were repaid with cash provided by operating activities.

For further information on our debt financing as of March 31, 2022, see " Note 19.

Debt Arrangements " to the "Notes to Consolidated Financial Statements" for additional information.

Our borrowing capacity and available liquidity under our lines and letters of credit included the following:

March 31, 2022

(in millions) Borrowing Capacity Lines and Letters Available

Senior Secured Credit Facilities:

ABL Credit Facility $ 100.0 $ 10.0

Foreign seasonal lines of credit 659.7 287.2

Other long-term debt 0.7 0.4

Letters of credit 13.5 4.5

Total $ 773.9 $ 302.1

We refer to "Net debt", a non-GAAP measure, as total debt liabilities less cash and cash equivalents.

We believe this non-GAAP financial measure is useful to monitor leverage and to evaluate changes to the Company's capital structure.

A limitation associated with using net debt is that it subtracts cash and cash equivalents, and therefore, may imply that management intends to use cash and cash equivalents to reduce outstanding debt and that cash held in certain jurisdictions can be applied to repay obligations owing in other jurisdictions and without reduction for applicable taxes.

In addition, net debt suggests that our debt obligations are less than the most comparable GAAP measure indicates.

(in millions) March 31, 2022 March 31, 2021

Notes payable to banks $ 378.6 $ 372.2

Current portion of long-term debt (1)

Long-term debt (2)

Total debt liabilities $ 1,067.0 $ 925.5

Cash and cash equivalents (1)

Net debt $ 868.2 $ 832.8

(1) The increases in the current portion of long-term debt and cash and cash equivalents are driven by the DDTL Facility, which was implemented in during the year ended March 31, 2022.

(2) The increase in long-term debt is primarily due to the implementation of a new ABL Credit Facility in during the year ended March 31, 2022.

Working Capital

The following summarizes our working capital:

Successor Predecessor Change

(in millions except for current ratio) March 31, 2022 March 31, 2021 $ %

Cash and cash equivalents $ 92.7 $ 170.2 (77.5) (45.5)

Cash, cash equivalents, and restricted cash $ 200.9 $ 97.3 103.6 106.5

Trade and other receivables, net 260.2 203.8 56.4 27.7

Inventories and advances to

tobacco suppliers 771.5 768.9 2.6 0.3

Inventories and advances to tobacco suppliers, net 798.4 771.5 26.9 3.5

Recoverable income taxes 7.9 4.8 3.1 64.6

Prepaid expenses and other current assets 60.3 45.1 15.2 33.7

Total current assets* $ 1,327.6 $ 1,122.5 205.1 18.3

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Advances from customers 53.0 12.1 40.9 338.0

Accrued expenses and other current liabilities 82.2 71.7 10.5 14.6

Income taxes payable 5.6 8.3 (2.7) (32.5)

Operating leases payable 8.1 9.5 (1.4) (14.7)

Current portion of long-term debt 107.9 2.1 105.8 5,038.1

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Working capital $ 513.2 $ 520.8 (7.6) (1.5)

Long-term debt 551.2 904.3 (353.1) (39.0)

Stockholders’ equity (deficit) attributable to Pyxus International, Inc.

247.7 (78.0) 325.7 417.6

Our working capital increased to $520.8 million at March 31, 2021 from $443.3 million at March 31, 2020.

Our current ratio was 1.9 to 1 at March 31, 2021 and 1.6 to 1 at March 31, 2020.

The increase in working capital is attributable to the decrease in short-term borrowings primarily due to lower balances on the African seasonal lines of credit resulting from cash payments and shorter crops resulting in decreased inventory purchases.

*Amounts may not equal column totals due to rounding

The decrease in working capital and the current ratio between the periods was due to the increase in current liabilities outpacing the increase in current assets, which was driven by the following changes in account balances:

Cash, cash equivalents, and restricted cash increased $103.6 million, or 106.5%, to $200.9 million as of March 31, 2022 from $97.3 million as of March 31, 2021 due to higher net proceeds from short-term borrowings and higher collections of beneficial interests on securitized trade receivables.

Trade and other receivables, net increased $56.4 million, or 27.7%, to $260.2 million as of March 31, 2022 from $203.8 million as of March 31, 2021 due primarily from the increase in sales.

Inventories and advances to tobacco suppliers, net increased $26.9 million, or 3.5%, to $798.4 million as of March 31, 2022 from $771.5 million as of March 31, 2021.

This increase was mainly due to higher green tobacco prices in South America.

These increases were partially offset by the restructuring of certain African operations in the prior year where the Company no longer operates.

Advances from customers increased $40.9 million, or 338.0%, to $53.0 million as of March 31, 2022 from $12.1 million as of March 31, 2021 due to increased prepayments from certain customers for inventory purchases to be made next year.

Current portion of long-term debt increased $105.8 million, or 5,038.1%, to $107.9 million as of March 31, 2022 from $2.1 million as of March 31, 2021 due to the reclassification of the DDTL facility from long-term debt to current portion of long-term debt during the year ended March 31, 2022.

The following summarizes inventory committed to a customer and uncommitted inventory balances for processed tobacco:

March 31, 2022 March 31, 2021

Committed $ 471.9 $ 437.0

Uncommitted $ 45.7 $ 97.7

Total processed tobacco $ 517.6 $ 534.7

See " Note 1.

Basis of Presentation and Summary of Significant Accounting Policies " and " Note 11.

Inventories " to the "Notes to Consolidated Financial Statements" for further information.

Sources and Uses of Cash

Our primary sources of liquidity are cash generated from operations, cash collections from our securitized receivables, short-term borrowings under our foreign seasonal lines of credit, and borrowings under the DDTL Facility.

We have typically financed our non-U.S.

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We maintain various other financing arrangements to meet the cash requirements of our businesses.

Refer to "Note 20.

See " Note 19.

Debt Arrangements " to the "Notes to Consolidated Financial Statements" for additional information.

We utilize capital in excess of cash flow from operations to finance accounts receivable, inventory, and advances to tobacco suppliers in foreign countries.

In addition, we may periodically elect to purchase, redeem, repay, retire, or cancel indebtedness prior to stated maturity under our various foreign credit lines and senior secured credit agreement or indentures, as permitted therein.

In addition, we may periodically elect to purchase, redeem, repay, retire, or cancel indebtedness prior to stated maturity under our various foreign credit lines.

As of March 31, 2022 our cash and cash equivalents was $198.8 million, of which $69.7 million was held in foreign jurisdictions and subject to exchange controls and tax consequences that could limit our ability to fully repatriate these funds.

Fluctuation of the U.S.

dollar versus many of the currencies in which we incur costs may have an impact on our working capital requirements.

We will continue to monitor and hedge foreign currency costs, as needed.

The following summarizes our sources and uses of our cash flows:

Successor Predecessor Combined

(Non-GAAP) Predecessor

(in millions) Seven months ended March 31, 2021 Five months ended August 31, 2020 Year ended

March 31, 2021 Year ended

(in millions) Year Ended March 31, 2022 Seven months ended March 31, 2021 Five months ended August 31, 2020 Year Ended

March 31, 2021

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Effect of exchange rate changes on cash (2.1) 1.7 1.6 3.3

Decrease in cash, cash equivalents, and restricted cash (20.3) (55.1) $ (75.4) (24.7)

Cash and cash equivalents at beginning of period 93.1 170.2 $ 263.3 192.0

Restricted cash at beginning of period 24.8 2.9 $ 27.7 5.8

Cash, cash equivalents, and restricted cash at end of period $ 97.6 $ 118.0 $ 215.6 $ 173.1

Net cash used by operating activities decreased on a combined basis for the seven months ended March 31, 2021 and the five months ended August 31, 2020 compared to the twelve months ended March 31, 2020 primarily due to (excluding non-cash activities) decreased inventory driven by smaller crop sizes in Africa and currency devaluation in Europe and South America.

Net cash provided by investing activities decreased on a combined basis for the seven months ended March 31, 2021 and the five months ended August 31, 2020 compared to the twelve months ended March 31, 2020 primarily due to lower collections on beneficial interests on securitized trade receivables driven by lower tobacco sales and lower qualifying receivables available for sale into securitization facilities.

Net cash provided by financing activities decreased on a combined basis for the seven months ended March 31, 2021 and the five months ended August 31, 2020 compared to the twelve months ended March 31, 2020 primarily due to lower net proceeds resulting from higher repayments of short term borrowings and the repayment of the ABL facility in place at the Petition Date, partially offset by proceeds from debtor-in-possession financing facility in place during the pendency of the Chapter 11 Cases and borrowings under ABL Credit Facility.

Fluctuation of the USD versus many of the currencies in which we have costs may have an impact on our working capital requirements.

We monitor and hedge foreign currency costs, as needed.

Approximately $50.7 million of our outstanding cash balance at March 31, 2021 was held in foreign jurisdictions.

If these funds in foreign jurisdictions were repatriated, the tax cost of repatriation would not have a material financial impact.

Debt Financing

Seasonal liquidity beyond cash flow from operations is provided by our foreign seasonal lines of credit, advances from customers, and sales of accounts receivable.

For the years ended March 31, 2021 and 2020, our average short-term borrowings, aggregated peak short-term borrowings outstanding, and weighted-average interest rate on short-term borrowings were as follows:

Successor Predecessor

(in millions) March 31, 2021 March 31, 2020

Average short-term borrowings $ 461.8 $ 543.1

Aggregated peak short-term borrowings outstanding $ 818.9 $ 712.4

Weighted-average interest rate on short-term borrowings 6.1 % 6.9 %

Aggregated peak borrowings for fiscal 2021 occurred during the first q uarter and were due to the timing of purchases of tobacco and repayments in Africa and South America.

Peak borrowings for fiscal 2021 and fiscal 2020 were repaid with cash provided by operating activities.

For further information on our debt financing as of March 31, 2021, refer to "Note 20.

Debt Arrangements" to the "Notes to Consolidated Financial Statements" for additional information.

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements within the meaning of Item 303(a)(4) of SEC Regulation S-K.

Increase (decrease) in cash, cash equivalents, and restricted cash* $ 103.6 $ (20.3) $ (55.1) $ (75.4)

*Amounts may not equal column totals due to rounding.

Net cash used by operating activities decreased for the year ended March 31, 2022 compared to the combined seven months ended March 31, 2021 and the five months ended August 31, 2020 primarily due to lower net loss from not incurring

reorganization expenses in the year ended March 31, 2022 for the Chapter 11 Cases.

This decrease was partially offset by higher receivables outstanding in the current period due to increased sales.

Net cash provided by investing activities increased for the year ended March 31, 2022 compared to the combined seven months ended March 31, 2021 and the five months ended August 31, 2020 primarily due to higher collections of beneficial interests on securitized trade receivables driven by increased sales over the same period and lower capital expenditures.

Net cash provided by financing activities increased for the year ended March 31, 2022 compared to the combined seven months ended March 31, 2021 and the five months ended August 31, 2020 primarily due to higher net proceeds from short term borrowings and net proceeds from the DDTL.

These increases were partially offset by proceeds from the debtor-in-possession financing facility ("DIP facility") in place during the pendency of the Chapter 11 Cases in the prior year that did not recur in the current year.

Planned Capital Expenditures

We are estimatin g $21.3 million i n capital investments for fiscal 2023 for routine replacement of equipment, as well as investments in assets that will add value to the customer or increase efficiency.

Securitized Receivables

We sell accounts receivable under three revolving trade accounts receivable securitization programs.

Under the first and second programs, we receive a discount from the face value of the receivable sold, less contractual dilutions which limit the amount that may be outstanding from any one particular customer and insurance reserves that also have the effect of limiting the risk attributable to any one customer.

Our beneficial interests in the first and second facilities is subordinate to the purchaser of the receivables.

Under the third program, we receive an amount equal to the face value of the receivable sold, less a discount rate tied to a benchmark rate, which varies based on the invoice currency.

See " Note 20.

Securitized Receivables " to the "Notes to Consolidated Financial Statements" for additional information.

Aggregate Contractual Obligations and Commitments

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(1) Short-term debt obligations consist of the current portion of long-term debt and our seasonal foreign credit lines.

(2) Interest obligations includes interest for the ABL Facility and other long-term debt.

(2) Interest obligations includes interest for long-term debt, including the DDTL Loans and indebtedness under the ABL Credit Facility.

The projected interest includes both fixed and variable rate debt.

The variable rate used in the projections is the rate that was being charged on our variable rate debt as of March 31, 2022.

Furthermore, we assume there will be no additional drawings after March 31, 2021 on the ABL Facility until the maturity on February 24, 2023 in these calculations.

These calculations also assume there is no refinancing of debt.

Tobacco and Other Purchase Obligations

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Other purchase obligations consist primarily of purchase commitments of agricultural material.

Tobacco and other purchase obligations increased $104.4 million, or 25.4%, from $411.1 million to $515.5 million primarily due to increased customer demand.

Amounts Guaranteed for Tobacco Suppliers

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In the event these suppliers should default, we would be responsible for repayment of the funds provided to these suppliers.

We also provide guarantees for the financing of certain unconsolidated subsidiaries in Asia and South America.

Refer to "Note 22.

We also provide

guarantees for the financing of certain unconsolidated subsidiaries in Asia and South America.

See " Note 21.

Guarantees " to the "Notes to Consolidated Financial Statements" for additional information.

Planned Capital Expenditures

We are estimatin g $17.2 million i n capital investments, primarily in leaf operations, for the 2022 fiscal year for routine replacement of equipment, as well as investments in assets that will add value to the customer or increase efficiency.

Beneficial Interest in Receivables Sold

We sell accounts receivable under two revolving trade accounts receivable securitization programs.

Under the agreements, we receive either 80% or 90% of the face value of the receivable sold, less contractual dilutions which limit the amount that may be outstanding from any one particular customer and insurance reserves that also have the effect of limiting the risk attributable to any one customer.

Our beneficial interest is subordinate to the purchaser of the receivables.

Refer to "Note 21.

Securitized Receivables” to the "Notes to Consolidated Financial Statements" for additional information.

Tax and Repatriation Matters

We are subject to income tax laws in each of the countries in which we do business through wholly owned subsidiaries and through affiliates.

We make a comprehensive review of the income tax requirements of each of our operations, file appropriate returns, and make appropriate income tax planning analyses directed toward the minimization of our income tax obligations in these countries.

We regularly review of the income tax requirements of each of our operations, file appropriate returns, and make appropriate income tax planning analyses directed toward the minimization of our income tax obligations in these countries.

Appropriate income tax provisions are determined on an individual subsidiary level and at the corporate level on both an interim and annual basis.

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We regularly review the status of the accumulated unremitted earnings of each of our foreign subsidiaries.

We would provide deferred income taxes, net of creditable foreign taxes, if applicable, on any earnings that are determined to no longer be indefinitely invested.

Refer to "Note 9.

We would provide deferred income taxes, net of creditable foreign taxes, if applicable, on earnings that are determined to no longer be indefinitely invested.

See " Note 9.

Income Taxes " to the "Notes to Consolidated Financial Statements" for additional information.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in accordance with generally accepted accounting principles in the United States ("U.S.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in accordance with U.S.

GAAP requires the use of estimates and assumptions that have an impact on the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities.

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The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill.

The Effective Date fair values of the Successor assets and liabilities differ materially from their recorded values as reflected on the historical balance sheet of the Predecessor and required the use of a number of judgments, assumptions, and estimates.

The Effective Date fair values of the Successor assets and liabilities differ materially from their recorded values as reflected in the historical balance sheet of the Predecessor and required the use of a number of judgments, assumptions, and estimates.

It is reasonably possible that changes in these judgments, assumptions, and estimates could have a material effect on our allocation of reorganization value to our individual assets.

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We utilized estimated revenue growth rates and cash flow projections.

The discount rates utilized in the DCF method were based on a weighted-average cost of capital determined from relevant market comparisons and adjusted for specific risk premiums, country risk premiums, and capital structure.

The discount rates utilized in the DCF method were based on a

weighted-average cost of capital determined from relevant market comparisons and adjusted for specific risk premiums, country risk premiums, and capital structure.

A terminal value estimated growth rate was applied to the final year of the projected period and reflected our estimate of perpetual growth.

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We then reconciled the estimated fair value to the court approved range of enterprise values associated with the Plan .

Refer to “Note 4.

See " Note 4.

Fresh Start Reporting " to the "Notes to Consolidated Financial Statements" for additional information.

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Significant judgment is required in determining our tax expense and in evaluating our tax positions including evaluating uncertainties under ASC 740.

We record unrecognized tax benefits in multiple jurisdictions and evaluate the future potential outcomes of tax

positions, based upon our interpretation of the country-specific tax law and the likelihood of future settlement.

We record unrecognized tax benefits in multiple jurisdictions and evaluate the future potential outcomes of tax positions, based upon our interpretation of the country-specific tax law, and the likelihood of future settlement.

We review our tax positions quarterly and adjust the balances as new information becomes available.

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years.

Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating loss and tax credit carryforwards.

Such assets arise from temporary differences between the financial reporting and tax bases of assets and liabilities and from net operating loss and tax credit carryforwards.

We evaluate the recoverability of these future tax deductions by assessing the impact from changes in or issuance of new tax law and the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies.

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To provide insight, we use our historical experience along with our short and long-range business forecasts.

In addition, we make adjustments to historical data for objectively verifiable information when deemed appropriate.

In addition, we make adjustments to historical data for objectively verifiable information where appropriate.

We believe it is more likely than not that a portion of the deferred income tax assets may expire as unused and have established a valuation allowance against them.

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However, deferred tax assets could be reduced in the near term if estimates of taxable income are significantly reduced or available tax planning strategies are no longer viable.

Refer to "Note 9.

See " Note 9.

Income Taxes " to the "Notes to Consolidated Financial Statements" for additional information.

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The valuation of our pension and other postretirement health care and life insurance plans requires the use of assumptions and estimates that are used to develop actuarial valuations of expenses, assets and liabilities.

These assumptions include discount rates, investment returns, projected salary increases and benefits and mortality rates.

These assumptions include discount rates, investment returns, projected salary increases, benefits, and mortality rates.

The significant assumptions used in the calculation of pension and postretirement obligations are:

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Changes in assumptions are made if there are significant deviations or if future expectations change significantly.

Based upon anticipated changes in assumptions, pension and postretirement expense is expected to decrease b y $0.8 million i n the fiscal year ended March 31, 2022 as compared to March 31, 2021.

Th e cash contribution to our employee benefit plans in fiscal 2021 for the seven months ended March 31, 2021 and the five months ended August 31, 2020 were $3.8 million and $2.3 million respectively, and is expected to be $5.9 million in fiscal 2022.

Based upon anticipated changes in assumptions, pension and postretirement expense is expected to increase b y $1.8 million i n the year ended March 31, 2023 as compared to March 31, 2022.

Th e cash contribution to our employee benefit plans during the year ended March 31, 2022 was $5.6 million and is expected to be $4.6 million in fiscal 2023.

The effect of actual results differing from our assumptions are accumulated and amortized over future periods.

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Changes in assumptions for other postretirement benefits are no longer applicable as the benefit is capped and no longer subject to inflation.

Refer to "Note 25.

See " Note 24.

Pension and Other Postretirement Benefits " to the "Notes to Consolidated Financial Statements" for additional information.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis