What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-06-06 compared with 2022-06-14 · 222 added, 352 removed, 289 unchanged (67% of the section changed)

5 unchanged sentences

If underlying assumptions prove inaccurate, or if known or unknown risks or uncertainties materialize, actual results could vary materially from those anticipated, estimated, or projected.

Some of these risks and uncertainties include the risks, uncertainties, and other factors set forth in " Item 1A, Risk Factors " in this Annual Report and in our other filings with the Securities and Exchange Commission.

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

Some of these risks and uncertainties include the risks, uncertainties, and other factors set forth in this Annual Report, including in " Item 1A.

Risk Factors " and in our other filings with the Securities and Exchange Commission.

Any forward-looking statement is qualified by reference to these cautionary statements.

It is not possible to predict or identify all risks and uncertainties relevant to these forward-looking statements.

Consequently, the risks and uncertainties identified in this Annual Report should not be considered a complete discussion of all potential risks or uncertainties.

We do not undertake to update any forward-looking statement that we may make from time to time except as may be required by law.

Non-GAAP Financial Measure

9 unchanged sentences

Executive Summary

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 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.

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:

In fiscal year 2023, we experienced the third consecutive year of La Niña weather patterns, which limited tobacco supplies and increased tobacco costs in certain markets.

We utilized our global footprint to offset reduced production in these markets and were able to meet our customers' demand for sustainably grown compliant leaf in a short crop year.

In addition, the Company overcame challenges with inflationary tobacco costs, increasing interest rates, and lingering geopolitical issues by growing revenue for the full year by 16.8% to $1.9 billion, improving gross margin per kilo by 13.0% to $0.61, and accelerating our operating cycle.

We strategically utilized some of the funds generated by increased revenue and improvement in our operating

cycle to partially repay the Company's outstanding indebtedness under the ABL Credit Facility as of March 31, 2023, which provides the Company with increased financial flexibility as we approach the buying cycle.

In February 2023, the Company successfully completed an exchange of its existing long-term debt with varying maturity dates for new long-term debt with maturity dates in 2027.

Our new capital structure addresses approaching maturity dates, provides the Company with increased financial flexibility, and relief from certain restrictive covenants.

Pyxus is a global agricultural company with 150 years of experience delivering value-added products and services to businesses and customers.

The Company is a trusted provider of responsibly sourced, independently verified, sustainable, and traceable products and ingredients.

The Company has 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 " for additional information.

Bankruptcy Proceedings

On June 15, 2020, Old Pyxus (then named Pyxus International, Inc.) and its then subsidiaries Alliance One International, LLC, Alliance One North America, LLC, Alliance One Specialty Products, LLC and GSP Properties, LLC (collectively, the "Debtors") filed voluntary petitions (the "Chapter 11 Cases") under Chapter 11 of the United States Bankruptcy Code with the Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") to implement a prepackaged Chapter 11 plan of reorganization to effectuate a financial restructuring (the "Restructuring") of Old Pyxus’ secured debt.

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 "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.

Pursuant to the Confirmation Order and the Plan, at the effectiveness of the Plan, all outstanding shares of common stock, and rights to acquire the common stock, of Old Pyxus were cancelled and the shares of common stock of the Company were delivered to certain creditors of Old Pyxus.

Accordingly, upon the effectiveness of the Plan the Company, through its subsidiaries, operated all of the businesses operated by Old Pyxus and its subsidiaries immediately prior to the effectiveness of the Plan and the Company is the successor issuer to Old Pyxus.

Other than our Chief Executive Officer, our Board of Directors does not include any of the individuals who served as directors of Old Pyxus at the time the Chapter 11 Cases were commenced or at the effectiveness of the Plan.

Refer to " Note 3.

Emergence from Voluntary Reorganization under Chapter 11 " to the "Notes to Consolidated Financial Statements" for additional information.

Development of Businesses

Beginning in 2017, we undertook a strategic process designed to diversify the Company's products and services by leveraging our core strengths in agronomy and traceability.

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 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.

In December 2020, the Company commenced actions to exit operations of the industrial hemp businesses, including the production and sale of products containing extracts of industrial hemp, including CBD products, by Criticality.

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 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").

On January 21, 2021 (the "Order Date"), upon application by the Canadian Cannabis Subsidiaries, the Canadian Court issued an order for creditor protection of the Canadian Cannabis Subsidiaries pursuant to the provisions of the CCAA and the appointment of FTI Consulting Canada Inc.

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

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" 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.

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.

Deterioration in the collectability of accounts receivable from extended billing and collection cycles would adversely affect our results of operations, financial condition, and cash flows, leading to working capital constraints.

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 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 above).

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.

Refer to " Note 4.

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 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.

GAAP, the table and discussion below also present the combined results for these periods.

The combined results (referenced as "Combined (Non-GAAP)" or "combined") for the fiscal year ended March 31, 2021 represent the sum of the reported amounts for the Predecessor period April 1, 2020 through August 31, 2020 combined with the Successor period from September 1, 2020 through March 31, 2021.

These combined results are not considered to be prepared in accordance with U.S.

The combined operating results are presented for supplemental purposes only, may not reflect the actual results we would have achieved absent our emergence from bankruptcy, may not be indicative of future results and should not be viewed as a substitute for the financial results of the Predecessor period and Successor period presented in accordance with U.S.

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 years ended March 31, 2022 and 2020.

See " Note 1.

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

Results of Operations

Years Ended March 31, 2023 and 2022

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

Consolidated* Year Ended March 31, 2023 Year Ended March 31, 2022 Change

(in millions) $ %

Sales and other operating revenues $ 1,914.9 $ 1,639.9 $ 275.0 16.8

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Goodwill impairment — 32.2 (32.2) (100.0)

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

Operating income 93.8 41.7 52.1 124.9

Loss on deconsolidation/disposition of subsidiaries 0.6 10.7 (10.1) (94.4)

Loss on pension settlement 2.6 — 2.6 100.0

Debt retirement expense — 2.0 (2.0) (100.0)

Interest expense, net 113.2 108.4 4.8 4.4

Reorganization items, net — — 106.0 106.0

Income tax expense 34.1 12.6 21.5 170.6

Income from unconsolidated affiliates, net 18.5 10.0 8.5 85.0

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

Net income attributable to noncontrolling interests 0.9 0.1 0.8 800.0

Net loss attributable to Pyxus International, Inc.

$ (39.1) $ (82.1) $ 43.0 52.4

Sales and other operating revenues $ 1,812.2 $ 1,531.8 $ 280.4 18.3

Tobacco costs 1,474.0 1,233.7 240.3 19.5

10 unchanged sentences

Processing and other gross margin 24.4 29.5 (5.1) (17.3)

Processing and other gross margin as a percent of sales 27.6 % 30.9 %

Sales and other operating revenues $ 14.3 $ 12.6 $ 1.7 13.5

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Gross loss (2.6) (8.4) 5.8 69.0

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.

Gross loss as a percent of sales (18.2) % (66.7) %

*Dollar and percentage changes may not calculate exactly due to rounding

Sales and other operating revenues increased $275.0 million, or 16.8%, to $1,914.9 million for the year ended March 31, 2023 from $1,639.9 million for the year ended March 31, 2022.

This increase was due to a 16.2% increase in average price per kilo driven by higher tobacco prices and a 1.8% increase in kilo volume primarily from Asia.

Cost of goods and services sold increased $241.1 million, or 17.1%, to $1,653.9 million for the year ended March 31, 2023 from $1,412.8 million for the year ended March 31, 2022.

This increase was driven by a 16.7% increase in a verage cost per kilo primarily due to undersupply conditions and inflation.

Gross profit as a percent of sales decreased to 13.6% for the year ended March 31, 2023 from 13.8% for the year ended March 31, 2022.

Average gross profit per kilo increased 13.0% primarily due to product mix in Asia and customer mix in North America.

Selling, general, and administrative expenses increased $9.5 million, or 6.7%, to $151.5 million for the year ended March 31, 2023 from $142.0 million for the year ended March 31, 2022.

This increase was primarily due to increased accrued bonus compensation, costs incurred in conjunction with the Debt Exchange Transactions, the normalization of travel expenses post-COVID, and rising healthcare costs.

These increases were partially offset by lower legal and professional service fees driven by strategic cost cutting initiatives.

Selling, general, and administrative expenses as a percent of sales decreased to 7.9% for the year ended March 31, 2023 from 8.7% for the year ended March 31, 2022.

This decrease was related to increased sales and other operating revenues.

Operating income of $93.8 million for the year ended March 31, 2023 increased $52.1 million, or 124.9%, from operating income of $41.7 million for the year ended March 31, 2022.

This increase was mainly due to higher leaf sales and other operating revenues and increased average leaf gross margin per kilo.

Other expense, net increased $7.9 million, or 254.8%, to $11.0 million for the year ended March 31, 2023 from $3.1 million for the year ended March 31, 2022.

This increase was primarily due to higher utilization of securitization facilities.

See " Note 4.

Other Expense, Net " for additional information.

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.

1 unchanged sentence

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

(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 $ 884.3 $ 447.6 $ 1,331.9 $ 1,527.3

Total cost of goods and services sold 767.9 402.6 1,170.5 1,302.6

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

Other (expense) income, net (9.6) (0.5) (10.1) 2.1

Restructuring and asset impairment charges 11.8 0.6 12.4 5.6

Goodwill impairment 1.1 — 1.1 33.8

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

Loss on deconsolidation/disposition of subsidiaries 70.2 — 70.2 —

Debt retirement expense — 0.8 0.8 —

Interest expense, net 55.4 45.2 100.6 132.8

Reorganization items — 106.0 106.0 —

Income tax expense 13.2 0.3 13.5 131.8

Income from unconsolidated affiliates 11.9 2.4 14.3 5.9

Net loss attributable to noncontrolling interests (6.3) (1.0) (7.3) (5.7)

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.

Combined sales and other operating revenues decreased $195.4 million, or 12.8%, to $1,331.9 million for the year ended March 31, 2021 from $1,527.3 million for the year ended March 31, 2020.

This decrease was due to a 4.8% decrease in leaf volume and a 10.3% decrease in leaf average selling prices.

These decreases were partially offset by 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.

The 4.8% decrease in leaf volume was primarily due to smaller crop sizes in Africa and shipments delayed into fiscal 2022 by the COVID-19 pandemic in Africa, Asia, and North America, as well as customer shipping instructions in North America .

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

The 10.3% decrease in leaf average sales prices 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 having a higher concentration of lamina in Asia, North America, and South America.

Combined cost of goods sold decreased $132.1 million, or 10.1%, to $1,170.5 million for the year ended March 31, 2021 from $1,302.6 million for the year ended March 31, 2020.

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

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 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 All Other category 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 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.

This increase was attributable to 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, and the continued restructuring of certain African operations.

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.

Combined reorganization items of $106.0 million for the year ended March 31, 2021 were comprised of the $462.3 million gain on settlement of liabilities subject to compromise as a result of the Chapter 11 Cases, partially offset by fees and costs incurred in connection with the Chapter 11 Cases, including with respect to the debtor-in-possession financing, and fresh start reporting adjustments.

Combined income tax expense decreased $118.3 million, or 89.8%, to $13.5 million for the year ended March 31, 2021 from $131.8 million for the year ended March 31, 2020.

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.

Income tax expense increased $21.5 million, or 170.6%, to $34.1 million for the year ended March 31, 2023 from $12.6 million for the year ended March 31, 2022.

This increase was primarily due to $20.8 million of non-recurring expense associated with a valuation allowance for deferred assets recognized in conjunction with the Debt Exchange Transactions.

See " Note 16.

Debt Arrangements " for additional information regarding the debt exchange transactions completed in February 2023.

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 primary sources of liquidity are cash generated from operations, short-term borrowings under our foreign seasonal lines of credit, availability under ABL Credit Facility (defined below), and cash collections from our securitized receivables.

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 year end.

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.

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

We believe our sources of liquidity will be sufficient to fund our anticipated operating needs for the next twelve months.

During such time our liquidity needs for operations may 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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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.

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

See " Note 16.

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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 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 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 10.0% 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 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.

The Notes mature on August 24, 2024.

At March 31, 2022, the aggregate principal amount of the Notes outstanding was approximately $270.8 million.

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.

Senior Secured Debt

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.

On February 8, 2022, our wholly owned subsidiary, Pyxus Holdings, Inc.

("Pyxus Holdings"), certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the "Borrowers"), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc.

("Pyxus Parent"), as guarantors, entered into an ABL Credit Agreement (as amended, 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 provide for the ongoing working capital and general corporate purposes of the Borrowers, the Company, Pyxus Parent, and their subsidiaries.

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.

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• 85% of eligible accounts receivable, plus

• the lesser of (i) 85% of the book value of Eligible Extended Terms Receivables (as defined in the ABL Credit Agreement) and (ii) $5.0 million, plus

• 90% of eligible credit insured accounts receivable, plus

1 unchanged sentence

• 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.

At March 31, 2023, $75.0 million was available for borrowing under the ABL Credit Facility, after reducing availability by the aggregate borrowings under the ABL Credit Facility of $25.0 million outstanding on that date and the $20.0 million of

Domestic Availability (as defined in the ABL Credit Agreement) required to be maintained.

Weighted average borrowings outstanding under the ABL Credit Facility during the fiscal year ended March 31, 2023 were $70.2 million.

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 Agreement was amended on May 23, 2023, which extended the maturity of the ABL Credit Facility to February 8, 2027.

The outstanding amount under the ABL Credit Facility is recorded as noncurrent as of March 31, 2023.

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.

1 unchanged sentence

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.

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

Cash Dominion.

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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 (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 9.0%, 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 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

Based on a Schedule 13D filed with the SEC on September 3, 2020 by Glendon Capital Management, L.P., Glendon Opportunities Fund, L.P.

Intabex Term Loans

Pursuant to (i) an exchange offer (the "DDTL Facility Exchange") made to, and accepted by, holders of 100.0% of the outstanding term loans (the "DDTL Term Loans") under the Amended and Restated Term Loan Credit Agreement, effectuated pursuant to that certain Amendment and Restatement Agreement, dated as of June 2, 2022 (the "DDTL Credit Agreement"), by and among Intabex Netherlands B.V., as borrower ("Intabex"), the guarantors party thereto, the administrative agent and collateral agent thereunder, and the several lenders from time to time party thereto and (ii) an exchange offer (the "Exit Facility Exchange") made to, and accepted by, holders of 100.0% of the outstanding term loans (the "Exit Term Loans") under the Exit Term Loan Credit Agreement, dated as of August 24, 2020 (the "Exit Term Loan Credit Agreement"), by and among Pyxus Holdings, as borrower, the guarantors party thereto, the administrative agent and collateral agent thereunder, and the several lenders from time to time party thereto, on February 6, 2023, Pyxus Holdings entered into the Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "Intabex Term Loan Credit Agreement"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus (US) LLC ("Alter Domus"), as administrative agent and senior collateral agent.

The Intabex Term Loan Credit Agreement established a term loan credit facility in an aggregate principal amount of approximately $189.0 million (the "Intabex Credit Facility"), under which term loans in the full aggregate principal amount of the Intabex Credit Facility (the "Intabex Term Loans") were deemed made in exchange for (i) $100.0 million principal amount of the DDTL Term Loans, plus an additional $2.0 million on account of the exit fee payable under the DDTL Credit Agreement and (ii) approximately $87.0 million principal amount of Exit Term Loans, representing 40.0% of the outstanding principal amount thereof (including the applicable accrued and unpaid PIK interest thereon).

The Intabex Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5%) plus 8.0% per annum or (ii) an alternate base rate plus 7.0% per annum.

The Intabex Term Loans are stated to mature on December 31, 2027.

The Intabex Term Loans may be prepaid from time to time, in whole or in part, without prepayment or penalty.

With respect to alternate base rate loans, accrued interest is payable quarterly in arrears on the last business day of each calendar quarter and, with respect to SOFR loans, accrued interest is payable on the last day of each applicable interest period but no less frequently than every three months.

The Intabex Term Loan Credit Agreement 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 and its restricted subsidiaries’ 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;

consolidate, merge, sell or otherwise dispose of all or substantially all their assets;

enter into transactions with affiliates;

designate subsidiaries as unrestricted subsidiaries;

and, in the case of Intabex, undertake business activities and sell certain subsidiaries.

On March 31, 2023, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with all covenants under the Intabex Term Loan Credit Agreement.

See " Note 16.

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

Pyxus Term Loans

Pursuant to the Exit Facility Exchange, on February 6, 2023, Pyxus Holdings entered into the Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the "Pyxus Term Loan Credit Agreement"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus, as administrative agent and senior collateral agent, to establish a term loan credit facility in an aggregate principal amount of approximately $130.5 million (the "Pyxus Credit Facility"), under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans" and, together with the Intabex Term Loans, the "New Term Loans") were deemed made in exchange for 60.0% of the outstanding principal amount of Exit Term Loans (including the applicable accrued and unpaid PIK interest thereon).

The Pyxus Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5%) plus 8.0% per annum or (ii) an alternate base rate plus 7.0% per annum.

The Pyxus Term Loans are stated to mature on December 31, 2027.

The Pyxus Term Loans may be prepaid from time to time, in whole or in part, without prepayment or penalty.

The Pyxus Term Loan Credit Agreement 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 and its restricted subsidiaries’ 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;

consolidate, merge, sell or otherwise dispose of all or substantially all their assets;

enter into transactions with affiliates;

and designate subsidiaries as unrestricted subsidiaries.

On March 31, 2023, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with all covenants under the Pyxus Term Loan Credit Agreement.

See " Note 16.

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

8.50% Senior Secured Notes due 2027

Pursuant to an exchange offer (the "Notes Exchange" and, together with the DDTL Facility Exchange and the Exit Facility Exchange, the "Debt Exchange Transactions") made by Pyxus Holdings and accepted by holders of approximately 92.7% of the aggregate principal amount of the outstanding 10.0% Senior Secured First Lien Notes due 2024 issued by Pyxus Holdings (the "2024 Notes") pursuant to that certain Indenture, dated as of August 24, 2020 (the "2024 Notes Indenture"), by and among Pyxus Holdings, the guarantors party thereto and the trustee, collateral agent, registrar and paying agent thereunder, on February 6, 2023, Pyxus Holdings issued approximately $260.5 million in aggregate principal amount of 8.5% Senior Secured Notes due December 31, 2027 (the "2027 Notes" and, together with the New Term Loans, the "New Secured Debt") to the exchanging holders of the 2024 Notes for an equal principal amount of 2024 Notes.

The 2027 Notes were issued pursuant to the Indenture, dated as of February 6, 2023 (the "2027 Notes Indenture"), among Pyxus Holdings, the guarantors party thereto, and Wilmington Trust, National Association, as trustee, and Alter Domus, as collateral agent.

The 2027 Notes bear interest at a rate of 8.5% per annum, which interest is computed on the basis of a 360-day year comprised of twelve 30-day months.

Interest accrues on the 2027 Notes from the date of issuance and is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2023.

The 2027 Notes are stated to mature on December 31, 2027.

At any time from time to time, Pyxus Holdings may redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100.0% of the principal amount of 2027 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

The 2027 Notes Indenture contains customary affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ 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;

consolidate, merge, sell or otherwise dispose of all or substantially all their assets;

enter into transactions with affiliates;

and designate subsidiaries as unrestricted subsidiaries.

On March 31, 2023, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.

See " Note 16.

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

Guarantees and Collateral

The obligations of Pyxus Holdings under the ABL Credit Agreement and the New Secured Debt are fully and unconditionally guaranteed by the Company, Pyxus Parent and all of the Company’s domestic subsidiaries and certain of the Company’s foreign subsidiaries, subject to certain limitations (the "Senior Secured Debt Obligors").

In addition, under the Intabex Term Loan Credit Facility, Intabex and Alliance One International Tabak B.V.

(which were obligors under the DDTL Term Loans) also guarantee the Intabex Credit Facility (together, the "Specified Intabex Obligors") but do not guarantee the 2027 Notes, the Pyxus Term Loans or obligations under the ABL Credit Agreement.

In addition, certain assets of the Specified Intabex Obligors (which were pledged as collateral for the DDTL Term Loans) are pledged as collateral to secure the Intabex Term Loans (the "Intabex Collateral") but do not secure the 2027 Notes, the Pyxus Term Loans or obligations under the ABL Credit Agreement.

The Senior Secured Debt Obligors’ obligations under the ABL Credit Agreement are secured by (i) a first-priority senior lien the ABL Priority Collateral (as defined in the ABL/New Secured Debt Intercreditor Agreement (as defined below)), which includes certain accounts receivable and inventory and certain related intercompany notes, cash, deposit accounts, related general intangibles and instruments, certain other related assets and proceeds of the foregoing of the Senior Secured Debt Obligors, and (ii) a junior-priority lien on substantially all assets of the Senior Secured Debt Obligors other than certain exclusions and the ABL Priority Collateral.

The New Secured Debt is secured by (i) a first-priority senior lien on substantially all assets of the Senior Secured Debt Obligors other than certain exclusions and the ABL Priority Collateral and (ii) a junior-priority lien on the ABL Priority Collateral.

The Intabex Term Loans are further secured by a first-priority lien on the Intabex Collateral.

The obligations under the New Secured Debt share a single lien, held by Alter Domus, as senior collateral agent (the "Senior Collateral Agent"), on the Collateral (as defined below) subject to the payment waterfall pursuant to the intercreditor

arrangements described below.

See " Note 16.

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

Intercreditor Agreements

The priority of the obligations under the ABL Credit Agreement and the New Secured Debt are set forth in the two intercreditor agreements entered into in connection with consummation of the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange.

ABL/New Secured Debt Intercreditor Agreement .

On February 6, 2023, Pyxus Holdings, Inc., the guarantors party thereto, PNC Bank, National Association, as ABL Agent, Alter Domus, as Pyxus Term Loan Administrative Agent, Intabex Term Loan Administrative Agent and Senior Collateral Agent, and Wilmington Trust, National Association, as Senior Notes Trustee entered into an Amended and Restated ABL Intercreditor Agreement, dated as of February 6, 2023 (the "ABL/New Secured Debt Intercreditor Agreement") to provide for the intercreditor relationship between, (i) on one hand, the holders of obligations under the ABL Credit Facility, the guarantees thereof and certain related obligations and (ii) on the other hand, the holders of obligations under the New Secured Debt, the guarantees thereof and certain related obligations.

Pursuant to the terms of the ABL/Term Loan/Notes Intercreditor Agreement, Pyxus Holdings’ obligations under the ABL Credit Facility, the guarantees thereof and certain related obligations have first-priority senior liens on the ABL Priority Collateral, which includes certain accounts receivable and inventory and certain related intercompany notes, cash, deposit accounts, related general intangibles and instruments, certain other related assets of the foregoing entities and proceeds of the foregoing, with the obligations under the New Secured Debt having junior-priority liens on the ABL Priority Collateral.

Pursuant to the ABL/New Secured Debt Intercreditor Agreement, Pyxus Holdings’ collective obligations under the New Secured Debt, the guarantees thereof and certain related obligations have first-priority senior liens on the collateral that is not ABL Priority Collateral, including owned material real property in the United States, capital stock of subsidiaries owned directly by Pyxus Holdings or a guarantor (other than the Intabex Collateral), existing and after acquired intellectual property rights, equipment, related general intangibles and instruments and certain other assets related to the foregoing and proceeds of the foregoing, with the obligations under the ABL Credit Facility having junior-priority liens on such collateral, other than real property.

The ABL Credit Facility is not secured by real property.

New Secured Debt Intercreditor Agreement .

On February 6, 2023, the New Secured Debt Obligors, together with the representative for the holders of the New Secured Debt and the Senior Collateral Agent, entered into the Intercreditor and Collateral Agency Agreement, dated as of February 6, 2023 (the "New Secured Debt Intercreditor Agreement"), pursuant to which the Senior Collateral Agent, serves as joint collateral agent for the benefit of the holders of the 2027 Notes, the Pyxus Term Loans and the Intabex Term Loans with respect to all common collateral securing such indebtedness (the "Collateral";

which excludes Intabex Collateral).

The New Secured Debt Intercreditor Agreement provides that Collateral or proceeds thereof received in connection with or upon the exercise of secured creditor remedies will be distributed (subject to the provisions described in the next paragraph) first to holders of the New Secured Debt on a pro rata basis based on the aggregate principal amount of each class of New Secured Debt, and then to holders of future junior debt secured by such Collateral on a pro rata basis based on the aggregate principal amount of each class of future junior debt (and in each case permitted refinancing indebtedness thereof).

Exercise of rights and remedies against the Collateral and certain rights in a bankruptcy or insolvency proceeding (including the right to object to debtor-in-possession financing or to credit bid) by the Senior Collateral Agent will be controlled first by the holders of a majority in principal amount of the New Term Loans (including, in any event, each holder holding at least 20.0% of the New Term Loans as of February 6, 2023, provided such holder holds at least 15.0% of the New Term Loans as of the date of determination), second, after repayment in full of the New Term Loans, by the holders of a majority in principal amount of the 2027 Notes and last, after repayment in full of the New Term Loans and the 2027 Notes, by holders of a majority in principal amount of any future junior debt secured by the Collateral.

Any such future junior debt will be subject to certain customary waivers of rights in a bankruptcy or insolvency proceeding in favor of the Senior Collateral Agent, including, but not limited to, with respect to debtor-in-possession financing, adequate protection and credit bidding.

See " Note 16.

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

Related Party Transactions

The Company, Pyxus Parent and Pyxus Holdings (collectively, the "Holding Companies") entered into a Support and Exchange Agreement, effective as of December 27, 2022 (as amended, including by joinders thereto, the "Support Agreement"), with a group of creditors, including Glendon Capital Management LP, Monarch Alternative Capital LP, Nut Tree Capital Management, L.P., Intermarket Corporation and Owl Creek Asset Management, L.P.

on behalf of certain funds managed by them and/or certain of their advisory clients, as applicable (collectively, the "Supporting Holders"), holding in aggregate:

• approximately 99.7% of the DDTL Term Loans outstanding under the DDTL Credit Agreement;

• approximately 68.1% of the Exit Term Loans outstanding under the Exit Term Loan Credit Agreement;

• approximately 64.1% of the 2024 Notes outstanding under the 2024 Notes Indenture.

Pursuant to the Support Agreement, the Supporting Holders agreed to participate in the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange.

Based on a Schedule 13D/A filed with the SEC on January 4, 2023 by Glendon Capital Management, L.P.

(the "Glendon Investor"), Glendon Opportunities Fund, L.P.

and Glendon Opportunities Fund II, L.P., Glendon Capital Management, L.P.

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 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 13D/A filed with the SEC on January 23, 2023, by Monarch Alternative Capital LP (the "Monarch Investor"), 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.

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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.

Kim is a Partner at Glendon Capital Management L.P.

Fallon is a Managing Principal at Monarch Alternative Capital LP.

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.

A representative of the Glendon Investor and a representative of the Monarch Investor served as directors of Pyxus at the time the Company and its applicable subsidiaries entered into the DDTL Credit Agreement, its predecessor agreement and the amendments thereto, and the Support Agreement, effected borrowings under the DDTL Credit Agreement and its predecessor agreement and commenced the Debt Exchange Transactions.

The DDTL Credit Agreement, its predecessor agreement and the amendments thereto, any and all borrowings thereunder, the related guaranty transactions, the Support Agreement, the Debt Exchange Transactions, including the Intabex Term Loan Credit Agreement, the Intabex Term Loans, the Pyxus Term Loan Credit Agreement, the Pyxus Term Loans, the 2027 Notes and the 2027 Notes Indenture 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.

See " Note 16.

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 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.

In conjunction with the Notes Exchange, Pyxus Holdings received consents from requisite holders of 2024 Notes to amend the 2024 Notes Indenture, the 2024 Notes and the related intercreditor and security documents to, among other things, (i) eliminate most of the restrictive covenants and certain of the affirmative covenants in the 2024 Notes Indenture, (ii) eliminate the change of control repurchase obligation in the 2024 Notes Indenture, (iii) subordinate the 2024 Notes in right of payment to existing and future senior indebtedness (including the New Secured Debt), (iv) eliminate certain events of default and (v) release all of the collateral securing the 2024 Notes.

On February 6, 2023, the relevant parties to the 2024 Notes Indenture entered into the Second Supplemental Indenture, dated as of February 6, 2023 (the "2024 Notes Supplemental Indenture"), to the 2024 Notes Indenture, pursuant to which the 2024 Notes Indenture, the 2024 Notes and the related intercreditor and security documents were amended to effect these changes.

The 2024 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 2024 Notes are stated to mature on August 24, 2024.

At March 31, 2023, the remaining 2024 Notes outstanding is $19.9 million, net of a debt discount of $0.5 million.

The total repayment amount due at maturity is $20.4 million.

On March 31, 2023, Pyxus Holdings and the guarantors of the 2024 Notes were in compliance with all covenants under the 2024 Notes Indenture, as amended by the 2024 Notes Supplemental Indenture.

See " Note 16.

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

Short-Term Seasonal Lines of Credit

Foreign Seasonal Lines of Credit

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

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These operating lines are generally seasonal in nature, typically extending for a term of 180 to 365 days corresponding to the tobacco crop cycle in that location.

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, 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.

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

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

Certain of the foreign seasonal lines of credit are guaranteed by the Company and certain of its subsidiaries.

At March 31, 2023, the total borrowing capacity under individual foreign seasonal lines of credit range up to $131.8 million.

At March 31, 2023, the aggregate outstanding borrowings of the Company under these seasonal credit lines was approximately $365.1 million and approximately $332.3 million was available for borrowing under these seasonal credit lines, subject to limitations as provided under the ABL Credit Agreement and the agreements governing the New Secured Debt.

The weighted average variable interest rate for these seasonal lines of credit for the year ended March 31, 2023 was 6.8%.

Certain of the foreign seasonal lines of credit, with aggregate outstanding borrowings at March 31, 2023 of approximately $84.6 million, are secured by trade receivables and inventories as collateral.

At March 31, 2023, the Company and its subsidiaries were in compliance with the covenants associated with the short-term seasonal lines of credit.

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

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(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.

Aggregated peak borrowings for the year ended March 31, 2023 occurred during the first q uarter, which represents peak timing for green tobacco purchases and repayments being made in Africa and South America, due to increased borrowing capacity in certain markets.

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, 2023, see " Note 16.

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

The following summarizes our total borrowing capacity at March 31, 2023 and 2022 under our short-term and long-term credit lines and letter of credit facilities and the remaining available amount after the reduction for outstanding borrowings and amounts reserved for outstanding letters of credit:

March 31, 2023 March 31, 2022

(in millions) Total Borrowing Capacity Remaining Amounts Available Total Borrowing Capacity Remaining Amounts Available

Senior Secured Credit Facilities:

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Net debt $ 864.3 $ 868.2

(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.

(1) The decrease in the current portion of long-term debt is due to the refinancing of the DDTL Term Loans on a long-term basis.

(2) The increase in long-term debt is primarily due to the refinancing of the DDTL Term Loans on a long-term basis, partially offset by net repayments on the ABL Credit Facility.

(3) The decrease in cash and cash equivalents is driven by net repayments on the ABL Credit Facility.

Working Capital

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Accrued expenses and other current liabilities 92.7 82.2 10.5 12.8

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 0.1 107.9 (107.8) (99.9)

Other current liabilities $ 27.0 $ 13.7 13.3 97.1

Total current liabilities $ 715.1 $ 814.4 (99.3) (12.2)

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*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.

Working capital decreased $7.7 million, or 1.5%, to $505.5 million as of March 31, 2023 from $513.2 million as of March 31, 2022 due to a decrease in cash, cash equivalents, and restricted cash and a decrease in accounts receivable through higher utilization of securitization programs.

Higher collections of cash through securitization facilities enabled us to purchase more expensive green tobacco inventories without significantly increasing borrowings under our seasonal foreign lines of credit, and the ability to partially repay the outstanding indebtedness under the ABL Credit Facility, which is classified as long-term debt.

Current liabilities decreased mainly due to the refinancing of the DDTL Term Loans on a long-term basis.

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

March 31, 2022 March 31, 2021

(in millions) March 31, 2023 March 31, 2022

Committed $ 479.4 $ 471.9

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Total processed tobacco $ 498.4 $ 517.6

Processed tobacco decreased 19.2 million, or 3.7%, to $498.4 million as of March 31, 2023 from $517.6 million as of March 31, 2022 due to undersupply conditions in the global tobacco market and higher sales of inventories.

See " Note 1.

Basis of Presentation and Summary of Significant Accounting Policies " and " Note 8.

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

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

Sources and Uses of Cash

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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.

As of March 31, 2023 our cash, cash equivalents, and restricted cash was $138.9 million, of which $76.5 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.

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

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

Operating activities $ (198.8) $ (44.5) $ (182.1) $ (226.6)

Investing activities 181.2 71.8 61.7 133.5

Financing activities 123.3 (49.3) 63.7 14.4

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

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.

(in millions) Year Ended March 31, 2023 Year Ended March 31, 2022

Trade and other receivables $ (111.9) $ (261.9)

Inventories and advances to tobacco suppliers (21.1) (31.5)

Payables and accrued expenses 5.1 59.3

Advances from customers (10.7) 41.2

Other 0.8 (5.9)

Net cash used in operating activities $ (137.8) $ (198.8)

Collections from beneficial interests in securitized trade receivables 165.3 189.4

Other (10.4) (8.2)

Net cash provided by investing activities $ 154.9 $ 181.2

Net proceeds of short-term borrowings 5.2 9.2

Proceeds from DDTL facility — 117.6

Net (repayment of) proceeds from revolving loan facilities (65.0) 21.9

Other (23.2) (25.4)

Net cash (used in) provided by financing activities $ (83.0) $ 123.3

Increase (decrease) from exchange rate changes on cash 3.5 (2.1)

(Decrease) increase in cash, cash equivalents, and restricted cash $ (62.4) $ 103.6

The change in cash, cash equivalents, and restricted cash decreased $166.0 million for the fiscal year ended March 31, 2023 compared to the fiscal year ended March 31, 2022.

The decrease was primarily from net repayments made on the outstanding indebtedness under the ABL Credit Facility in the current fiscal year, and proceeds from the DDTL Facility during the prior fiscal year that did not reoccur.

These decreases were partially offset by improvements in trade accounts receivable due to higher sales and higher utilization of securitization facilities, which resulted in less cash used by operating activities.

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.

We are estimating $21.1 million i n capital investments for fiscal 2024 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.

We sell trade receivables to unaffiliated financial institutions under multiple revolving trade accounts receivable securitization facilities.

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.

Under the third and fourth programs, 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 17.

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Long-Term Debt Obligations (1)

$ 618.4 $ — $ 20.3 $ 598.1 $ —

Short-Term Debt Obligations (2)

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Commercial Commitments $ 2,253.6 $ 1,282.8 $ 185.1 $ 738.1 $ 47.6

(1) On May 23, 2023, the ABL Credit Agreement was amended to extend the maturity of the ABL Credit Facility to February 8, 2027.

(2) 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 long-term debt, including the DDTL Loans and indebtedness under the ABL Credit Facility.

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

The projected interest includes both fixed and variable rate debt.

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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.

Tobacco and other purchase obligations increased $143.1 million, or 27.8%, from $515.5 million to $658.6 million primarily due to higher tobacco prices.

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.

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

See " Note 18.

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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 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.

These processes are followed using an appropriate combination of internal staff at both the subsidiary and corporate levels as well as independent outside advisors in review of the various tax laws and in compliance reporting for the various operations.

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 earnings that are determined to no longer be indefinitely invested.

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

We regularly review of the income tax requirements of each of our operations, file appropriate returns, and make appropriate income tax planning analyses.

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

If the undistributed earnings are needed in the U.S., we may be required to pay state income and/or foreign local withholding taxes upon repatriation.

We provide deferred income taxes, net of creditable foreign taxes, if applicable, on earnings that are not indefinitely invested.

See " Note 6.

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Management believes the following accounting estimates are most critical to our business operations and to an understanding of our financial condition and results of operations and reflect the more significant estimates and assumptions used in the preparation of our consolidated financial statements.

Application of Fresh Start Reporting

We applied FASB ASC 852 in preparing the consolidated financial statements.

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

We elected to apply fresh start reporting using a convenience date of August 31, 2020.

We evaluated and concluded that the events between August 24, 2020 and August 31, 2020 were not material to our financial reporting on both a quantitative or qualitative basis.

In accordance with ASC 852 and the application of fresh start reporting, we allocated our reorganization value to our individual assets based on our estimated fair values in conformity with ASC 805, Business Combinations .

Deferred income tax amounts were determined in accordance with ASC 740, Income Taxes ("ASC 740").

Reorganization value represents the fair value of the Successor Company's assets before considering liabilities.

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 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.

Among the most material judgments, assumptions, and estimates utilized was our determination of reorganization value.

The reorganization value was derived from, and falls within the court approved range of, enterprise values associated with the Plan.

The enterprise values were based on management projections and the valuation models as determined by the Plan of Reorganization.

We determined the enterprise and corresponding equity value of the Successor using various valuation approaches and methods, including:

(i) the income approach using a calculation of the present value of future cash flows based on our financial projections, (ii) the market approach using selling prices of similar business/assets and (iii) the cost approach, using estimated costs to replace or rebuild our assets.

We primarily utilized the discounted cash flow ("DCF") method of the income approach, utilizing detailed revenue and expense projections that reflected the financial and operational facts and circumstances specific to the business.

Our future cash flows were projected based on estimates of future revenues, gross margins, operating income, capital expenditures, and other cash flow factors, including income taxes and net working capital requirements.

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.

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

We then calculated a present value of the respective cash flows and adjusted for the value of other aspects not reflected in the projections, such as excess net working capital, the value of non-consolidated investments, and non-operating assets and liabilities to arrive at an estimate of fair value under the income approach.

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

See " Note 4.

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

Our annual effective income tax rate is based on our jurisdictional mix of pretax income, statutory tax rates, exchange rates, and tax planning opportunities available to us in the various jurisdictions in which we operate.

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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 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.

Based upon anticipated changes in assumptions, pension and postretirement expense is expected to decrease by $3.1 million in the year ended March 31, 2024 as compared to March 31, 2023.

The cash contribution to our employee benefit plans during the year ended March 31, 2023 was $11.3 million and is expected to be $7.0 mil lion in fiscal 2024.

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

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1% decrease in salary increase assumption $ (124) $ (37)

1% increase in cash balance crediting rate $ 650 $ 25

1% decrease in cash balance crediting rate $ (588) $ (25)

1% increase in rate of return on assets $ (509)

7 unchanged sentences

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