PYXUS INTERNATIONAL, INC. 10-K

Item 8. Financial Statements and Supplementary Data Table of Contents Page No. Consolidated Statements of Operations 36 Consolidated Statements of Comprehensive Income (Loss) 37 Consolidated Balance Sheets 38 Consolidated Statements of Stockholders' Equity 39 Consolidated Statements of Cash Flows 40 Notes to Consolidated Financial Statements 41 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 81 35 Pyxus International, Inc. and Subsidiaries Consolidated Statements of Operations Years Ended March 31, (in thousands, except per share data) 2024 2023 2022 Sales and other operating revenues $ 2,032,559 $ 1,914,881 $ 1,639,862 Cost of goods and services sold 1,720,224 1,653,864 1,412,805 Gross profit 312,335 261,017 227,057 Selling, general, and administrative expenses 160,910 151,531 142,021 Other expense, net 9,439 11,023 3,102 Restructuring and asset impairment charges 4,799 4,685 8,031 Goodwill impairment — — 32,186 Operating income 137,187 93,778 41,717 Loss on deconsolidation/disposition of subsidiaries — 648 10,701 Loss on pension settlement 12,008 2,588 — (Gain) loss on debt retirement ( 15,914 ) — 1,997 Interest expense, net 125,620 113,164 108,383 Income (loss) before income taxes and other items 15,473 ( 22,622 ) ( 79,364 ) Income tax expense 27,281 34,127 12,640 Income from unconsolidated affiliates, net 14,992 18,512 9,950 Net income (loss) 3,184 ( 38,237 ) ( 82,054 ) Net income attributable to noncontrolling interests 521 904 65 Net income (loss) attributable to Pyxus International, Inc. $ 2,663 $ ( 39,141 ) $ ( 82,119 ) Earnings (loss) per share: Basic and diluted $ 0.11 $ ( 1.57 ) $ ( 3.28 ) Weighted average number of shares outstanding: Basic and diluted 25,000 25,000 25,000 See "Notes to Consolidated Financial Statements" 36 Pyxus International, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) Years Ended March 31, (in thousands) 2024 2023 2022 Net income (loss) $ 3,184 $ ( 38,237 ) $ ( 82,054 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment 700 2,481 ( 4,224 ) Pension and other postretirement benefit plans 4,419 2,044 5,777 Cash flow hedges ( 2,860 ) ( 2,777 ) 8,974 Total other comprehensive income, net of tax 2,259 1,748 10,527 Total comprehensive income (loss) 5,443 ( 36,489 ) ( 71,527 ) Comprehensive income attributable to noncontrolling interests 509 941 55 Comprehensive income (loss) attributable to Pyxus International, Inc. $ 4,934 $ ( 37,430 ) $ ( 71,582 ) See "Notes to Consolidated Financial Statements" 37 Pyxus International, Inc. and Subsidiaries Consolidated Balance Sheets March 31, (in thousands) 2024 2023 Assets Current assets Cash and cash equivalents $ 92,569 $ 136,733 Restricted cash 7,224 2,176 Trade receivables, net 168,764 185,351 Other receivables 18,704 17,387 Inventories, net 931,654 775,071 Advances to suppliers, net 20,397 42,305 Recoverable income taxes 4,455 5,815 Prepaid expenses 50,185 37,555 Other current assets 16,254 18,172 Total current assets 1,310,206 1,220,565 Investments in unconsolidated affiliates 101,255 100,750 Intangible assets, net 33,879 38,572 Deferred income taxes, net 7,196 6,662 Long-term recoverable income taxes 2,963 2,863 Other noncurrent assets 32,617 43,761 Right-of-use assets 35,639 35,892 Property, plant, and equipment, net 134,158 133,398 Total assets $ 1,657,913 $ 1,582,463 Liabilities and Stockholders’ Equity Current liabilities Notes payable $ 499,312 $ 382,544 Accounts payable 181,247 170,287 Advances from customers 90,719 42,472 Accrued expenses and other current liabilities 96,954 92,693 Income taxes payable 8,539 18,264 Operating leases payable 8,100 8,723 Current portion of long-term debt 20,294 75 Total current liabilities 905,165 715,058 Long-term taxes payable 2,678 4,978 Long-term debt 497,734 618,430 Deferred income taxes 7,934 9,900 Liability for unrecognized tax benefits 17,742 14,175 Long-term leases 26,136 25,581 Pension, postretirement, and other long-term liabilities 53,701 52,511 Total liabilities 1,511,090 1,440,633 Commitments and contingencies Stockholders’ equity Common stock— no par value: Authorized shares ( 250,000 for all periods) Issued and outstanding shares ( 25,000 for all periods) 389,789 390,290 Retained deficit ( 255,291 ) ( 257,954 ) Accumulated other comprehensive income 7,786 5,515 Total stockholders’ equity of Pyxus International, Inc. 142,284 137,851 Noncontrolling interests 4,539 3,979 Total stockholders' equity 146,823 141,830 Total liabilities and stockholders' equity $ 1,657,913 $ 1,582,463 See "Notes to Consolidated Financial Statements" 38 Pyxus International, Inc. and Subsidiaries Consolidated Statements of Stockholders’ Equity Attributable to Pyxus International, Inc. Accumulated Other Comprehensive Income (Loss) (in thousands) Common Stock Retained Deficit Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Noncontrolling Interests Total Stockholders’ Equity Balance, March 31, 2023 $ 390,290 $ ( 257,954 ) $ ( 6,392 ) $ 8,335 $ 3,572 $ 3,979 $ 141,830 Net income (loss) — 804 — — — ( 34 ) 770 Other comprehensive income, net of tax — — 707 — 862 — 1,569 Balance, June 30, 2023 $ 390,290 $ ( 257,150 ) $ ( 5,685 ) $ 8,335 $ 4,434 $ 3,945 $ 144,169 Net income (loss) — 8,095 — — — ( 199 ) 7,896 Other — — — — — 493 493 Other comprehensive loss, net of tax — — ( 1,545 ) — ( 1,000 ) — ( 2,545 ) Balance, September 30, 2023 $ 390,290 $ ( 249,055 ) $ ( 7,230 ) $ 8,335 $ 3,434 $ 4,239 $ 150,013 Net income — 3,835 — — — 344 4,179 Other ( 501 ) — — — — 8 ( 493 ) Dividends paid — — — — — ( 450 ) ( 450 ) Other comprehensive income (loss), net of tax — — 2,185 3,511 ( 1,288 ) — 4,408 Balance, December 31, 2023 $ 389,789 $ ( 245,220 ) $ ( 5,045 ) $ 11,846 $ 2,146 $ 4,141 $ 157,657 Net (loss) income — ( 10,071 ) — — — 410 ( 9,661 ) Other comprehensive (loss) income, net of tax — — ( 647 ) 920 ( 1,434 ) ( 12 ) ( 1,173 ) Balance, March 31, 2024 $ 389,789 $ ( 255,291 ) $ ( 5,692 ) $ 12,766 $ 712 $ 4,539 $ 146,823 See "Notes to Consolidated Financial Statements" Pyxus International, Inc. and Subsidiaries Consolidated Statements of Stockholders’ Equity (continued) Attributable to Pyxus International, Inc. Accumulated Other Comprehensive Income (Loss) (in thousands) Common Stock Retained Deficit Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Noncontrolling Interests Total Stockholders’ Equity Balance, March 31, 2022 $ 390,290 $ ( 218,813 ) $ ( 8,873 ) $ 6,328 $ 6,349 $ 6,090 $ 181,371 Net (loss) income — ( 14,663 ) — — — 158 ( 14,505 ) Other — — ( 3,052 ) ( 3,052 ) Other comprehensive income (loss), net of tax — — 947 — ( 1,503 ) — ( 556 ) Balance, June 30, 2022 $ 390,290 $ ( 233,476 ) $ ( 7,926 ) $ 6,328 $ 4,846 $ 3,196 $ 163,258 Net loss — ( 1,537 ) — — — ( 13 ) ( 1,550 ) Other comprehensive loss, net of tax — — ( 4,801 ) ( 1,562 ) ( 1,768 ) — ( 8,131 ) Balance, September 30, 2022 $ 390,290 $ ( 235,013 ) $ ( 12,727 ) $ 4,766 $ 3,078 $ 3,183 $ 153,577 Net (loss) income — ( 2,333 ) — — — 96 ( 2,237 ) Other comprehensive income (loss), net of tax — — 4,855 ( 78 ) ( 371 ) — 4,406 Balance, December 31, 2022 $ 390,290 $ ( 237,346 ) $ ( 7,872 ) $ 4,688 $ 2,707 $ 3,279 $ 155,746 Net (loss) income — ( 20,608 ) — — — 663 ( 19,945 ) Other comprehensive income, net of tax — — 1,480 3,647 865 37 6,029 Balance, March 31, 2023 $ 390,290 $ ( 257,954 ) $ ( 6,392 ) $ 8,335 $ 3,572 $ 3,979 $ 141,830 See "Notes to Consolidated Financial Statements" Pyxus International, Inc. and Subsidiaries Consolidated Statements of Stockholders’ Equity (continued) Attributable to Pyxus International, Inc. Accumulated Other Comprehensive Income (Loss) (in thousands) Common Stock Retained Deficit Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Noncontrolling Interest Total Stockholders’ Equity Balance, March 31, 2021 $ 391,089 $ ( 136,686 ) $ ( 4,649 ) $ 541 $ ( 2,625 ) $ 6,270 $ 253,940 Net loss — ( 11,508 ) — — — ( 120 ) ( 11,628 ) Other — ( 8 ) 8 — Other comprehensive income, net of tax — — 689 — 4,328 — 5,017 Balance, June 30, 2021 $ 391,089 $ ( 148,202 ) $ ( 3,960 ) $ 541 $ 1,703 $ 6,158 $ 247,329 Net loss — ( 9,681 ) — — — ( 342 ) ( 10,023 ) Other — — — — — ( 88 ) ( 88 ) Other comprehensive loss, net of tax — — ( 1,591 ) ( 512 ) ( 2,896 ) — ( 4,999 ) Balance, September 30, 2021 $ 391,089 $ ( 157,883 ) $ ( 5,551 ) $ 29 $ ( 1,193 ) $ 5,728 $ 232,219 Net (loss) income — ( 30,100 ) — — — 43 ( 30,057 ) Other ( 799 ) — — — — ( 155 ) ( 954 ) Other comprehensive loss, net of tax — — ( 1,753 ) ( 35 ) ( 1,550 ) — ( 3,338 ) Balance, December 31, 2021 $ 390,290 $ ( 187,983 ) $ ( 7,304 ) $ ( 6 ) $ ( 2,743 ) $ 5,616 $ 197,870 Net (loss) income — ( 30,830 ) — — — 484 ( 30,346 ) Other comprehensive (loss) income, net of tax — — ( 1,569 ) 6,334 9,092 ( 10 ) 13,847 Balance, March 31, 2022 $ 390,290 $ ( 218,813 ) $ ( 8,873 ) $ 6,328 $ 6,349 $ 6,090 $ 181,371 See "Notes to Consolidated Financial Statements" 39 Pyxus International, Inc. and Subsidiaries Consolidated Statements of Cash Flows Years Ended March 31, (in thousands) 2024 2023 2022 Operating activities: Net income (loss) $ 3,184 $ ( 38,237 ) $ ( 82,054 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 19,250 19,137 16,676 Debt amortization/interest 8,559 18,466 22,639 (Gain) loss on debt retirement ( 15,914 ) — 1,512 Loss on foreign currency transactions 4,009 6,028 2,885 Asset impairment charges 2,990 4,035 37,925 Loss on deconsolidation/disposition of subsidiaries — 648 10,701 Loss on pension settlement 12,008 2,588 — Bad debt expenses 640 426 4,404 Income from unconsolidated affiliates, net of dividends ( 506 ) ( 5,835 ) 4 Changes in operating assets and liabilities, net: Trade and other receivables ( 167,600 ) ( 111,932 ) ( 261,908 ) Inventories and advances to tobacco suppliers ( 136,010 ) ( 21,110 ) ( 31,461 ) Deferred items 3,240 ( 14,758 ) ( 10,929 ) Recoverable income taxes ( 2,689 ) 2,353 ( 2,603 ) Payables and accrued expenses 17,531 5,147 59,324 Advances from customers 55,302 ( 10,693 ) 41,168 Prepaid expenses ( 4,506 ) 4,761 4,710 Income taxes ( 8,207 ) 13,116 ( 2,799 ) Other operating assets and liabilities 3,474 5,698 1,661 Other, net ( 9,725 ) ( 17,660 ) ( 10,620 ) Net cash used in operating activities $ ( 214,970 ) $ ( 137,822 ) $ ( 198,765 ) Investing activities: Purchases of property, plant, and equipment $ ( 21,043 ) $ ( 16,307 ) $ ( 14,827 ) Proceeds from sale of property, plant, and equipment 4,312 3,060 4,084 Collections from beneficial interests in securitized trade receivables 175,911 165,262 189,440 Loan to deconsolidated subsidiary — — ( 5,229 ) Collection of loan from deconsolidated subsidiary — — 10,996 Proceeds from settlement of debt claims from deconsolidated subsidiaries — 2,011 — Other, net 269 919 ( 3,223 ) Net cash provided by investing activities $ 159,449 $ 154,945 $ 181,241 Financing activities: Net proceeds from short-term borrowings $ 122,483 $ 5,234 $ 9,208 Proceeds from DDTL facility — — 117,600 Repayment of DDTL facility — ( 110,250 ) ( 15,375 ) Proceeds from term loan facility — 100,000 — Proceeds from revolving loan facilities 331,000 170,000 115,394 Repayment of revolving loan facilities ( 356,000 ) ( 235,000 ) ( 93,500 ) Proceeds from long-term borrowings — 578,439 151 Repayment of long-term borrowings ( 60,342 ) ( 578,162 ) ( 1,636 ) Debt issuance costs ( 11,751 ) ( 7,686 ) ( 8,097 ) Fees paid to refinance the DDTL facility — ( 4,000 ) — Fees paid to retire or exchange debt ( 269 ) ( 1,575 ) — Other, net 440 — ( 485 ) Net cash provided by (used in) financing activities $ 25,561 $ ( 83,000 ) $ 123,260 Effect of exchange rate changes on cash ( 9,156 ) 3,472 ( 2,135 ) (Decrease) increase in cash, cash equivalents, and restricted cash ( 39,116 ) ( 62,405 ) 103,601 Cash and cash equivalents at beginning of period 136,733 198,777 92,705 Restricted cash at beginning of period 2,176 2,537 5,008 Cash, cash equivalents, and restricted cash at end of period $ 99,793 $ 138,909 $ 201,314 Other information: Cash paid for income taxes, net $ 22,501 $ 18,696 $ 24,576 Cash paid for income taxes related to debt exchange 12,543 — — Cash paid for interest, net 109,518 93,425 86,852 Noncash investing activities: Noncash amounts obtained as a beneficial interest in exchange for transferring trade receivables in a securitization transaction 160,041 164,404 205,515 See "Notes to Consolidated Financial Statements" 40 Pyxus International, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 1 Basis of Presentation and Summary of Significant Accounting Policies 42 Note 2 New Accounting Standards 48 Note 3 Revenue Recognition 48 Note 4 Other Expense, Net 49 Note 5 Restructuring and Asset Impairment Charges 49 Note 6 Income Taxes 50 Note 7 Earnings (Loss) Per Share 52 Note 8 Restricted Cash 53 Note 9 Inventories, Net 53 Note 10 Advances to Suppliers, Net 53 Note 11 Acquisitions and Dispositions 53 Note 12 Equity Method Investments 54 Note 13 Variable Interest Entities 54 Note 14 Intangible Assets, Net and Goodwill 55 Note 15 Leases 56 Note 16 Property, Plant, and Equipment, Net 57 Note 17 Debt Arrangements 58 Note 18 Securitized Receivables 64 Note 19 Guarantees 65 Note 20 Derivative Financial Instruments 66 Note 21 Fair Value Measurements 66 Note 22 Pension and Other Postretirement Benefits 67 Note 23 Contingencies and Other Information 74 Note 24 Other Comprehensive Income (Loss) 75 Note 25 Government Assistance 76 Note 2 6 Equity-Based Compensation 76 Note 2 7 Related Party Transactions 76 Note 2 8 Segment Information 78 Note 2 9 Subsequent Events 80 41 1. Basis of Presentation and Summary of Significant Accounting Policies Pyxus International, Inc. (the "Company" or "Pyxus") is a global agricultural company with businesses having more than 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. As the context requires, the "Company" and "Pyxus" also includes the consolidated subsidiaries of Pyxus International, Inc. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission applicable to annual reporting on Form 10-K. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries. Intercompany accounts and transactions have been eliminated. Equity Method Investments The Company’s equity method investments and its cost method investments are non-marketable securities. When not required to consolidate its investment in another entity, the Company uses the equity method if it (i) can exercise significant influence over the other entity, and (ii) holds common stock and/or in-substance common stock of the other entity. Under the equity method, investments are carried at cost, plus or minus the Company’s equity in the increases or decreases of the investee’s net assets after the date of acquisition. The Company continually monitors its equity method investments for factors indicating other-than-temporary impairment. The Company's proportionate share of the net income or loss of these entities is included in income from unconsolidated affiliates, net within the consolidated statements of operations. Dividends received from the investee reduce the carrying amount of the investment. Distributions from equity method investees are accounted for based on the cumulative earnings approach to determine whether they represent a return of investment, or a return on investment. Variable Interest Entities The Company holds variable interests in multiple variable interest entities, which primarily procure or process inventory on behalf of the Company or are securitization entities. These variable interests relate to equity investments, receivables, guarantees, and securitized receivables. The Company is not the primary beneficiary of the majority of these entities as it does not have the power to direct the activities that most significantly impact the economic performance of the entities, due to the entities’ management and board of directors’ structure. As a result, the majority of these variable interest entities are not consolidated. Creditors of the Company’s variable interest entities do not have recourse against the general credit of the Company. The Company's investments in unconsolidated variable interest entities are classified as investments in unconsolidated affiliates in the consolidated balance sheets. The Company's assets and liabilities with variable interest entities are classified as related party balances. The Company's maximum exposure to loss in these variable interest entities is represented by the investments, receivables, guarantees, and the deferred purchase price on the sale of securitized receivables. Use of Estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. These estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. Actual results may differ from the Company's estimates and assumptions. Estimates are used in accounting for, among other things, revenue recognition, pension and postretirement health care benefits, inventory reserves, credit loss reserves, bank loan guarantees to suppliers and unconsolidated subsidiaries, advances to suppliers reserves, useful lives for depreciation and amortization, future cash flows associated with impairment testing for long-lived assets, deferred tax assets an d uncertain income tax positions, intrastate tax credits, incremental borrowing rates for the present value of lease payments, fair value determinations of financial assets and liabilities, including derivatives, securitized beneficial interests, and counterparty risk. Reclassifications Certain prior-period amounts were reclassified to conform to the current-year presentation in the consolidated statements of cash flows, and in the income taxes footnote disclosure related to the summaries of deferred tax assets and liabilities. Segment Information The Company reviewed its operations in Africa, Asia, Europe, North America, and South America and concluded the economic characteristics of these five Leaf regional operations were similar. Each geographic region derives its revenues mainly from shipping processed tobacco to manufacturers of cigarettes and other consumer tobacco products around the world, with a smaller percentage of revenue in each region being derived from performing third-party tobacco processing services. The three product category operating segments other than Leaf do not individually or in the aggregate meet the quantitative and 42 qualitative thresholds to be individually reportable and have been combined and reported in an "All Other" category. The one Leaf reportable segment is consistent with information used by the chief operating decision maker ("CODM") to assess performance, make operating decisions, and allocate resources. The Company evaluates the operating performance of its one segment based upon information included in management reports. Corporate general expenses are allocated to the segments based upon segment selling, general, and administrative expenses. The Company has eight operating segments organized by geographic area and product category that are aggregated into one reportable segment for financial reporting purposes: Leaf. The All Other category is included for purposes of reconciliation of respective balances for the Leaf segment to the consolidated financial statements. Revenue Recognition The Company's revenue consists primarily of the sale of processed tobacco and fees charged for processing and related services to the manufacturers of tobacco products. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company’s performance obligations are satisfied when the transfer of control of the distinct product or service to the customer occurs. For products, control is transferred and revenue is recognized at a point in time, in accordance with the shipping terms of the contract. For services, control is transferred and revenue is recognized over time using the input method based on a kilogram of packed tobacco. A kilogram of processed tobacco (or tobacco processing services resulting in a kilogram of processed tobacco) is the only material and distinct performance obligation for the Company’s tobacco revenue streams. Consideration is attributed to the performance of this obligation. The Company does not disclose information related to its unsatisfied performance obligations with an expected duration of one year or less. Revenue is measured as the amount of consideration to which the Company expects to be entitled to receive in exchange for transferring goods or providing services. Contract costs primarily include labor, material, shipping and handling, and overhead expenses. Contract Balances The Company generally records a receivable when revenue is recognized as the timing of revenue recognition may differ from the timing of payment from customers. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 60 days. The Company's trade receivables do not bear interest, and they are recorded at the invoiced amount less an estimated allowance for expected credit losses. In addition to estimating an allowance based on specific identification of certain receivables that have a higher probability of not being paid, the Company also records an estimate for expected credit losses for the remaining receivables in the aggregate using a loss-rate method that considers historical bad debts, age of customer receivable balances, and current customer receivable balances. Additionally, the Company considers future reasonable and supportable forecasts of economic conditions to adjust historical loss rate percentages, as necessary. Balances are written-off when determined to be uncollectible. T he provision for expected credit losses is recorded in selling, general, and administrative expenses in the consolidated statements of operations. Significant Judgments The Company identified two main forms of variable consideration in its contracts with customers: warehousing fees for storing customer-controlled tobacco until the customer requests shipment and claims resulting from tobacco that does not meet customer specifications. Warehousing fees are either included in the price of tobacco based on the customers' best estimate of the date they will request shipment or separately charged using a per-day storage rate. When the Company enters into a contract with a customer, the price communicated is the amount of consideration the Company expects to receive. Price adjustments for tobacco not meeting customer specifications for shrinkage, improper blend, or chemical makeup, etc. are handled through a claims allowance that is assessed quarterly. The Company estimates the amount of expected claims using the expected value method due to the large number of contracts with similar characteristics that we enter into with customers, the high volumes of tobacco we sell each year, and our actual history of past claims. Taxes Collected from Customers Certain subsidiaries are subject to value-added taxes on local sales. Value-added taxes on local sales are recorded in sales and other operating revenues and cost of goods and services sold in the consolidated statements of operations. Shipping and Handling The Company elected to account for shipping and handling as activities to fulfill its performance obligations, regardless of when control transfers. Shipping and handling fees that are billed to customers are recognized in sales and other operating revenues and the associated shipping and handling costs are recognized in cost of goods and services sold in the consolidated statements of operations. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities reflect the expected future tax consequences of events that are recognized in the consolidated financial statements in different periods than they are recognized for tax purposes. Deferred tax assets and liabilities are established using enacted tax rates in effect for the year in which these items are expected to reverse. 43 The realization of deferred tax assets is dependent on generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. When assessing the need for a valuation allowance, the Company considers carryback potential, historical earnings, future reversals of existing taxable temporary differences (including liabilities for unrecognized tax benefits), forecasted operating profits and tax planning strategies. The Company’s provision for income taxes is based on pre-tax income, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. The Company recognizes tax benefits from uncertainties if it believes it is more-likely-than-not it will be sustained based on the technical merits. Penalties and interest related to income taxes, if incurred, are included in income tax expense. Cash and Cash Equivalents Cash and cash equivalents include cash in banks and highly liquid investments with original maturities of three months or less and are stated at cost, which approximates fair value. Inventories, Net Costs in inventory include processed tobacco inventory, unprocessed tobacco inventory, and other inventory. Costs of unprocessed tobacco inventories are determined by the average cost method, which include the cost of green tobacco. Costs of processed tobacco inventories are determined by the average cost method, which include both the cost of unprocessed tobacco, as well as direct and indirect costs related to processing the product. Costs of other inventory are determined by the first-in, first-out method, which include costs of packing materials, non-tobacco agricultural products, and agricultural supplies including seed, fertilizer, herbicides, and pesticides. Inventories are carried at the lower of cost or net realizable value ("LCM"). The Company evaluates its inventories for LCM adjustments by country and type of inventory. Processed tobacco and unprocessed tobacco are evaluated separately for LCM purposes. The Company compares the cost of its processed tobacco to net realizable value based on the estimated selling price of similar grades when evaluating those balances for LCM adjustments. The Company also considers whether its processed tobacco is committed to a customer, whereby the expected sales price is utilized in determining the net realizable value for committed tobacco. In addition, the Company writes-down inventory balances for estimates of obsolescence. LCM and obsolescence inventory write-downs are recorded in cost of goods and services sold within the consolidated statements of operations. Advances to Tobacco Suppliers, Net The Company purchases seeds, fertilizer, pesticides, and other products related to growing tobacco and advances them to tobacco suppliers to assist in crop production. These seasonal advances are short term, represent prepaid inventory, and are recorded as advances to tobacco suppliers. Upon delivery of tobacco, part of the purchase price to the supplier is paid in cash and part through a reduction of the advance balance. The advances applied to the delivery are reclassified from advances to unprocessed inventory. The Company also has noncurrent advances, which generally represent the cost of advances to tobacco suppliers for infrastructure, such as curing barns, recovered through the delivery of tobacco to the Company by the tobacco suppliers. Tobacco suppliers may not be able to settle the entire amount of advances due in a given year. In these situations, the Company may allow the farmers to deliver tobacco over future crop years to recover its advances. Noncurrent advances to tobacco suppliers are recorded in other noncurrent assets in the consolidated balance sheets. The Company accounts for its advances to tobacco suppliers using a cost accumulation model, which reports advances at the lower of cost or recoverable amounts, exclusive of the mark-up and interest. The mark-up and interest on its advances are recognized upon delivery of tobacco as a decrease in the cost of the current crop. A provision for tobacco supplier bad debts is recorded in cost of goods and services sold in the consolidated statements of operations for abnormal yield adjustments or unrecovered advances. Normal yield adjustments are capitalized into the cost of the current crop and are recorded in cost of goods and services sold as that crop is sold. Intangible Assets, Net The Company has intangible assets with definite useful lives. These intangible assets are assessed annually and tested for impairment whenever factors indicate the carrying amount may not be recoverable. The trade name, customer relationship, and technology intangibles are amortized on a straight-line basis over fourteen , nine to twelve years , and eight years , respectively. The amortization period is the term of the contract or, if no term is specified in the contract, management’s best estimate of the useful life based on past experience. Technology includes internally developed software that is amortized on a straight-line basis over three to five years . Amortization commences once su bstantial testing activities are completed and the software is ready for its intended use. Events and changes in circumstance may either result in a revision in the estimated useful life or 44 impairment of an intangible. Amortization expense associated with finite-lived intangible assets is recorded in selling, general, and administrative expenses in the consolidated statements of operations. Leases The Company has operating leases for land, buildings, automobiles, and other equipment that expire at various dates through fiscal year 2040. The Company does not have material finance leases. Leases for real estate generally have initial terms ranging from two to fifteen years , excluding renewal options. Leases for equipment generally have initial terms ranging from two to five years excluding renewal options. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes. These lease terms may include optional renewals, terminations or purchases, which are considered in the Company’s assessments when such options are reasonably certain to be exercised. The Company measures right-of-use assets and related lease liabilities based on the present value of remaining lease payments, including in-substance fixed payments, the current payment amount when payments depend on an index or rate (e.g., inflation adjustments, market renewals), and the amount the Company believes is probable to be paid to the lessor under residual value guarantees, when applicable. Lease contracts may include fixed payments for non-lease components, such as maintenance, which are included in the measurement of lease liabilities for certain asset classes based on the Company’s election to combine lease and non-lease components. The Company does not recognize short-term leases, those lease contracts with durations of twelve months or less, in the consolidated balance sheets. As applicable borrowing rates are not typically implied within the lease arrangements, the Company discounts lease payments based on its estimated incremental borrowing rate at lease commencement, or modification, which is based on the Company’s estimated credit rating, the lease term at commencement, and the contract currency of the lease arrangement. Property, Plant, and Equipment, Net Property, plant, and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Buildings are depreciated over a range of nine to forty years . Machinery and equipment are depreciated over a range of two to nineteen years . Repairs and maintenance costs are expensed as incurred. The cost of major improvements are capitalized. Upon sale or disposition of an asset, the cost and related accumulated depreciation are removed from the balance sheet accounts and the resulting gain or loss is included in o ther expense, net in the consolidated statements of operations. Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows at which the asset could be bought or sold in a current transaction between willing parties and may be estimated using a number of techniques, including quoted market prices or valuations, present value techniques based on estimates of cash flows, or multiples of earnings or revenue performance measures. Guarantees The Company's guarantees are primarily related to bank loans to suppliers for crop production financing. The Company guarantees bank loans of certain unconsolidated subsidiaries in Asia and South America. Under longer-term arrangements, the Company may guarantee financing on suppliers’ construction of curing barns or other tobacco production assets. Guaranteed loans are generally repaid concurrent with the delivery of tobacco to the Company. The Company is obligated to repay guaranteed loans should the supplier default. If default occurs, the Company has recourse against its various suppliers and their production assets. The fair value of the Company's guarantees are recorded in accrued expenses and other current liabilities in the consolidated balance sheets and included in crop costs, except for the joint venture in Brazil, which are included in other receivables. In Brazil, certain suppliers obtain government subsidized rural credit financing from local banks that is guaranteed by the Company. Upon delivery of tobacco, the Company remits payments to the local banks on behalf of the suppliers before paying the supplier. Amounts owed to suppliers are recorded in accounts payable in the consolidated balance sheets. Rural credit financing repayment is due to local banks based on contractual due dates. Derivative Financial Instruments The Company uses forward or option currency contracts to manage risks associated with foreign currency exchange rates on foreign operations. These contracts are for green tobacco purchases, processing costs, and selling, general, and administrative expenses. The Company does not hold derivatives contracts for speculative or trading purposes. Derivative financial instruments are recorded in other current assets and other current liabilities in the consolidated balance sheets and are measured at fair value. Changes in fair value are recognized in earnings, unless the derivative is designated and qualifies to be in a hedge accounting relationship. For derivatives designated in a hedge accounting relationship, the Company evaluates hedge effectiveness at inception and on an ongoing basis. If a hedge relationship is no longer expected to be effective, the derivative in that relationship is de-designated and hedge accounting is discontinued. 45 Changes in fair value of foreign currency derivatives designated in cash flow hedging relationships are recorded in accumulated other comprehensive income in the consolidated balance sheets and reclassified to earnings when the hedged item affects earnings. Cash flows from derivatives are classified in the consolidated statements of cash flows in the same category as the cash flows from the underlying hedged items. The Company has elected not to offset fair value amounts recognized for derivative instruments with the same counterparty under a master netting agreement. Pension and Other Postretirement Benefits Retirement Benefits The Company maintains various excess benefit and supplemental plans that provide additional benefits to certain individuals in key positions and individuals whose compensation and the resulting benefits that would have actually been paid are limited by regulations imposed by the Internal Revenue Code. In addition, a Supplemental Retirement Account Plan defined contribution plan is maintained. Additional non-U.S. plans sponsored by certain subsidiaries cover certain of the full-time employees located in Germany, Turkey, and the United Kingdom. Postretirement Health and Life Insurance Benefits The Company provides certain health and life insurance benefits to retired U.S. employees (and their eligible dependents) who meet specified age and service requirements. The plan excludes new employees after September 2005 and caps the Company’s annual cost commitment to postretirement benefits for retirees. The Company retains the right, subject to existing agreements, to modify or eliminate these postretirement health and life insurance benefits in the future. The Company provides certain health and life insurance benefits to retired Brazilian directors and certain retirees located in Europe including their eligible dependents who meet specified requirements. Plan Assets The Company's policy is to contribute amounts to the plans sufficient to meet or exceed funding requirements of local governmental rules and regulations. The Company's investment objectives for plan assets are to generate consistent total investment return to pay anticipated plan benefits, while minimizing long-term costs and portfolio volatility. The financial objectives underlying this policy include maintaining plan contributions at a reasonable level relative to benefits provided and assuring unfunded obligations do not grow to a level that would adversely affect the Company's financial health. Portfolio performance is measured against investment objectives and objective benchmarks, including but not limited to: FTSE 90 Day Treasury Bill, Bloomberg Intermediate Govt/Credit, Bloomberg Aggregate, Russell 1000 Value, Russell 1000 Growth, Russell 2500 Value, Russell 2500 Growth, MSCI EAFE, HFR Absolute Return, and HFR Equity Hedge. The portfolio objective is to exceed the actuarial return on assets assumption. The Company is exploring partial risk transfers and/or full plan terminations. Management and the plan's consultant regularly review portfolio allocations and periodically rebalance the portfolio to the targeted allocations according to the guidelines set forth in the Company's investment policy. Equity securities do not include the Company's common stock. The Company's diversification and risk control processes serve to minimize the concentration and experience of risk. There are no significant concentrations of risk, in terms of sector, industry, geography, or individual company or companies. The Company’s plan assets primarily consist of cash and cash equivalents, equity and fixed income funds, real estate investments, and diversified investments. Plan assets are measured at fair value annually on March 31, the measurement date. The following are descriptions, valuation methodologies, and inputs used to determine the fair value of each major category of plan assets: • Cash and cash equivalents include short-term investment funds, primarily in diversified portfolios of investment grade money market instruments that are valued using quoted market prices or other valuation methods, and classified as Level 1 or Level 2 in the fair value hierarchy. • Investments in equity and fixed income mutual funds are publicly traded and valued primarily using quoted market prices and generally classified as Level 1 in the fair value hierarchy. Investments in commingled funds used in certain non-U.S. pension plans are not publicly traded, but the underlying assets held in these funds are traded in active markets and the prices for these assets are readily observable. Holdings in these commingled funds are generally classified as Level 2 measurements. • Real estate investments include those in private limited partnerships that invest in various domestic and international commercial and residential real estate projects and publicly traded REIT securities. The fair values of private real estate assets are typically determined by using income and/or cost approaches or comparable sales approach, taking into consideration discount and capitalization rates, financial conditions, local market conditions, and the status of the capital markets, and are generally classified as Level 3 in the fair value hierarchy. Publicly traded REIT securities are valued primarily using quoted market prices and are generally classified as Level 1 in the fair value hierarchy. • Diversified investments include mutual funds with an absolute return strategy. Mutual fund investments with absolute return strategies are publicly traded and valued using quoted market prices and are generally classified as Level 1 in the fair value hierarchy. 46 Foreign Currency Translation and Remeasurement The Company translates assets and liabilities of its foreign subsidiaries from their respective functional currencies to USD using exchange rates in effect at period end. The Company's results of operations and its cash flows are translated using average exchange rates for each reporting period. Resulting currency translation adjustments are reflected as a separate component of accumulated other comprehensive income in the consolidated balance sheets. The financial statements of foreign subsidiaries, for which the USD is the functional currency and which have certain transactions denominated in a local currency, are remeasured into USD. The remeasurement of local currencies into USD results in remeasurement adjustments that are included in net income. Exchange gains (losses) from remeasurement are recorded in cost of goods and services sold and o ther expense, net within the consolidated statements of operations. Securitized Receivables The Company sells trade receivables to unaffiliated financial institutions under multiple accounts receivable securitization facilities. Under the facilities, the receivables sold for cash are removed from the consolidated balance sheets. Under some of the facilities, a portion of the purchase price for the receivables is paid by the unaffiliated financial institutions in cash and the balance is a deferred purchase price receivable, which is paid as payments on the receivables are collected from account debtors. The net cash proceeds received by the Company in cash at the time of sale (cash purchase price) are disclosed as an operating activity in the consolidated statements of cash flows. The deferred purchase price receivable represents a continuing involvement and a beneficial interest in the transferred financial assets and is recognized at fair value as part of the sale transaction. The deferred purchase price receivables are included in trade and other receivables, net in the consolidated balance sheets and are valued using unobservable inputs (i.e., Level 3 inputs), primarily discounted cash flow. The net cash proceeds received by the Company as deferred purchase price are disclosed as an investing activity in the consolidated statements of cash flows. Additionally, beneficial interests received for transferring trade receivables in a securitization transaction are disclosed as a noncash investing activity in the consolidated statements of cash flows. The difference between the carrying amount of the receivables sold under these facilities and the sum of the cash and fair value of the other assets received at the time of transfer is recognized as a loss on sale of the related receivables and recorded in o ther expense, net in the consolidated statements of operations. Program costs are recorded in o ther expense, net in the consolidated statements of operations. Government Assistance On occasion, the Company and its subsidiaries receive grants and other assistance (collectively "assistance") from governments and intergovernmental agencies to support operations and capital projects in various jurisdictions. The Company accounts for government assistance by analogy to International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance , which follows a grant accounting model. Under this accounting framework, government assistance is recognized when it is probable the Company will receive assistance and comply with the conditions attached to the assistance. Operational related assistance is recorded on a systematic basis over the periods in which the related cost or expenditures for which it is intended to compensate have occurred and is presented as a reduction in the related expense for which it is intended to defray. Capital related assistance is recorded as long-term deferred revenue, included within pension, postretirement, and other long-term liabilities in the consolidated balance sheets, and is recognized in other income over the asset's useful life as an offset against depreciation expense. Equity-Based Compensation The Company’s Board of Directors adopted the 2020 Incentive Plan on November 18, 2020 (the "Incentive Plan"), and on March 21, 2024 the Board of Directors amended and restated the Company's Incentive Plan to increase the number of shares of the Company's common stock authorized to be issued thereunder. The Incentive Plan provides the Company the flexibility to grant a variety of equity-based awards including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance share awards, and incentive awards to its officers, directors, and employees. For equity-based awards without performance conditions, the Company recognizes equity-based compensation cost on a straight-line basis over the vesting period of the award. For equity-based awards with performance conditions, the Company recognizes equity-based compensation cost using the accelerated attribution method over the requisite service period when the Company determines it is probable that the performance condition will be satisfied. The Company estimates forfeitures of equity-based awards using historical experience. Equity-based compensation expense, if any, is included in selling, general, and administrative expenses in the consolidated statements of operations. 47 2. New Accounting Standards Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures . This ASU amends FASB Topic 280 to permit the disclosure of multiple measures of a segment's profit or loss, and requires an entity with a single reportable segment to apply FASB Topic 280 in its entirety. In addition, this ASU requires the following new segment disclosures: • Significant segment expenses by reportable segment if regularly provided to the CODM and included within the reported measure of segment profit or loss; • Other segment items, which represents the difference between reported segment revenues less the significant segment expenses less reported segment profit or loss; and • Title and position of the CODM. Disclosures required under this new ASU and the existing segment profit or loss and assets disclosures currently required annually by FASB Topic 280 are to be disclosed in interim periods. The annual disclosure requirements are effective for the Company's fiscal year ending March 31, 2025, and the interim period disclosure requirements are effective beginning April 1, 2025. Early adoption is permitted. The Company is currently evaluating the impact that this new accounting standard will have on its segment disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures , to provide more disaggregation of income tax information mainly related to the effective tax rate reconciliation and the income taxes paid disclosure requirements. Under the new accounting rules, the tabular effective tax rate reconciliation must include specific categories with certain reconciling items based on the expected tax further disaggregated by nature and/or jurisdiction. Income taxes paid, net of refunds received, must be broken out by federal, state, and foreign taxes, and further disaggregated by individual jurisdictions based on total income taxes paid. These new annual disclosure requirements are effective for the Company's fiscal year ending March 31, 2026. Early adoption is permitted. The Company is currently evaluating the impact that this new accounting standard will have on its income tax disclosures. 3. Revenue Recognition Product revenue is primarily processed tobacco sold to the customer. Processing and other revenues are mainly contracts to process customer-owned green tobacco. During such processing, ownership remains with the customers. All Other revenue is primarily composed of revenue from the sale of e-liquids and non-tobacco agriculture products. The following disaggregates sales and other operating revenues by major source, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the consolidated financial statements : Years Ended March 31, 2024 2023 2022 Leaf: Product revenue $ 1,912,438 $ 1,812,170 $ 1,531,805 Processing and other revenues 117,177 88,388 95,433 Total sales and other operating revenues 2,029,615 1,900,558 1,627,238 All Other: Total sales and other operating revenues 2,944 14,323 12,624 Total sales and other operating revenues $ 2,032,559 $ 1,914,881 $ 1,639,862 Significant Judgments The following summarizes activity in the claims allowance: Years Ended March 31, 2024 2023 2022 Balance, beginning of period $ 2,350 $ 1,130 $ 1,830 Additions 6,191 4,680 1,586 Payments ( 5,228 ) ( 3,460 ) ( 2,286 ) Balance, end of period $ 3,313 $ 2,350 $ 1,130 48 Contract Balances The following summarizes activity in the allowance for expected credit losses: Years Ended March 31, 2024 2023 2022 Balance, beginning of period $ ( 24,730 ) $ ( 24,541 ) $ ( 20,900 ) Additions ( 1,535 ) ( 2,316 ) ( 4,212 ) Write-offs and other adjustments 2,325 2,127 571 Balance, end of period ( 23,940 ) ( 24,730 ) ( 24,541 ) Trade receivables 192,704 210,081 272,218 Trade receivables, net $ 168,764 $ 185,351 $ 247,677 Taxes Collected from Customers Value-added taxes were $ 34,905 , $ 28,302 , and $ 27,274 for the years ended March 31, 2024, 2023, and 2022 respectively. 4. Other Expense, Net The following summarizes the components of other expense, net: Years Ended March 31, 2024 2023 2022 Losses on sale of receivables (1) $ ( 13,121 ) $ ( 10,434 ) $ ( 5,833 ) Foreign currency (losses) gains ( 251 ) 1,057 ( 2,776 ) Note receivable write-off — ( 2,050 ) — Gain on sale of fixed assets 2,300 1,389 3,818 Miscellaneous income (expense), net 1,633 ( 985 ) 1,689 Total $ ( 9,439 ) $ ( 11,023 ) $ ( 3,102 ) (1) See " Note 18. Securitized Receivables " for additional information. 5. Restructuring and Asset Impairment Charges The Company continued its focus on cost-saving initiatives. The employee separation charges for the year ended March 31, 2024 were primarily related to changes in the corporate organizational structure and the continued restructuring of certain leaf operations. The asset impairment charges for the year ended March 31, 2024 were related to continued restructuring of certain non-leaf agriculture operations. The employee separation and asset impairment charges for the year ended March 31, 2023 were primarily related to the restructuring of certain non-leaf agriculture operations . The employee separation and asset impairment charges for the year ended March 31, 2022 were primarily related to the write-off of the Company's remaining industrial hemp cannabidiol ("CBD") extraction equipment and the continued restructuring of certain leaf operations. The following summarizes the Company's restructuring and asset impairment charges: Years Ended March 31, 2024 2023 2022 Employee separation charges $ 1,809 $ 650 $ 2,292 Asset impairment and other non-cash charges 2,990 4,035 5,739 Restructuring and asset impairment charges $ 4,799 $ 4,685 $ 8,031 49 6. Income Taxes Income Tax Provision The components of income (loss) before income taxes and other items consisted of the following: Years Ended March 31, 2024 2023 2022 U.S. $ ( 17,697 ) $ ( 43,874 ) $ ( 68,489 ) Non-U.S. 33,170 21,252 ( 10,875 ) Total $ 15,473 $ ( 22,622 ) $ ( 79,364 ) The details of the amount shown for income taxes in the consolidated statements of operations are as follows: Years Ended March 31, 2024 2023 2022 Current: Federal (1) $ 5,319 $ 16,353 $ 12 State ( 59 ) 337 — Non-U.S. 24,385 17,593 16,515 Total Current 29,645 34,283 16,527 Deferred: Federal 968 ( 592 ) ( 243 ) State ( 9 ) 2 — Non-U.S. ( 3,323 ) 434 ( 3,644 ) Total Deferred ( 2,364 ) ( 156 ) ( 3,887 ) Income tax expense $ 27,281 $ 34,127 $ 12,640 (1) Current federal expense for fiscal year 2023 is primarily due to the Debt Exchange Transactions. Refer to " Note 17. Debt Arrangements " for further details regarding the Debt Exchange Transactions. The difference between income tax expense based on income (loss) before income taxes and other items and the amount computed by applying the U.S. statutory federal income tax rate to income are as follows: Years Ended March 31, 2024 2023 2022 Tax benefit at U.S. statutory rate $ 3,249 $ ( 4,750 ) $ ( 16,666 ) Effect of non-U.S. income taxes 23 ( 3,418 ) ( 961 ) U.S. taxes on non-U.S. earnings 9,264 6,389 205 Increase (decrease) in reserves for uncertain tax positions 8,120 2,397 ( 315 ) Withholding tax expense 544 3,058 1,488 Tax credits ( 5,270 ) ( 3,853 ) ( 1,150 ) Tax incentives — ( 2,280 ) — Nondeductible interest 1,340 2,559 2,610 Waived intercompany interest expense — — 3,960 Exchange effects and currency translation ( 5,110 ) 3,101 4,344 Goodwill impairment — — 7,148 Change in valuation allowance (1) 15,340 30,412 8,053 Other, net ( 219 ) 512 3,924 Income tax expense $ 27,281 $ 34,127 $ 12,640 (1) The increase in valuation allowance, is presented without exchange effects and currency translation, for the years ended March 31, 2024, 2023, and 2022. For the year ended March 31, 2023 the change in valuation allowance was primarily driven by $20,823 of deferred tax assets generated by the Debt Exchange Transactions for which the Company is not likely to realize a future benefit. Refer to " Note 17. Debt Arrangements " for further details regarding the Debt Exchange Transactions. 50 The following summarizes deferred tax assets (liabilities): March 31, 2024 2023 Deferred tax assets: Non-deductible interest carryforward $ 30,858 $ 24,331 Original issue discount (1) 14,714 20,326 Reserves and accruals 21,662 25,734 Tax loss carryforwards 16,329 15,886 Unrealized exchange losses 5,961 — Lease obligations 7,344 — Other 10,290 5,686 Gross deferred tax assets 107,158 91,963 Valuation allowance (1) ( 70,391 ) ( 59,506 ) Total deferred tax assets $ 36,767 $ 32,457 Deferred tax liabilities: Unremitted earnings of foreign subsidiaries $ ( 29,523 ) $ ( 29,045 ) Right of use asset ( 7,956 ) — Other ( 25 ) ( 6,650 ) Total deferred tax liabilities $ ( 37,504 ) $ ( 35,695 ) Net deferred tax liability $ ( 737 ) $ ( 3,238 ) (1) The increase in valuation allowance, which is presented without exchange effects and currency translation, for the year ended March 31, 2023 was primarily driven by $20,823 of deferred tax assets generated by the Debt Exchange Transactions for which the Company is not likely to realize a future benefit. Refer to " Note 17. Debt Arrangements " for further details regarding the Debt Exchange Transactions. The following summarizes the change in the valuation allowance for deferred tax assets: Balance at March 31, 2021 $ 25,273 Changes to expenses 8,624 Changes to other comprehensive income ( 1,256 ) Balance at March 31, 2022 32,641 Changes to expenses (1) 27,598 Changes to other comprehensive income ( 733 ) Balance at March 31, 2023 59,506 Changes to expenses 10,727 Changes to other comprehensive income 158 Balance at March 31, 2024 $ 70,391 (1) The increase in valuation allowance, which is presented without exchange effects and currency translation, for the years ended March 31, 2024, 2023, and 2022. The increase in valuation allowance as of March 31, 2023 was primarily driven by $ 20,823 of deferred tax assets generated by the Debt Exchange Transactions for which the Company is not likely to realize a future benefit. Refer to " Note 1 7 . Debt Arrangements " for further details regarding the Debt Exchange Transactions. As of March 31, 2024, the Company had foreign net operating loss carryforwards of $ 53,092 , of which $ 23,336 relates to jurisdictions with definite lived carryforward periods and $ 29,756 relates to jurisdictions with indefinite lived carryforward periods. Under current U.S. tax regulations, in general, repatriation of foreign earnings to the U.S. can be completed without incurring material incremental U.S. tax. However, repatriation of foreign earnings could subject the Company to U.S. state and non-U.S. jurisdictional taxes (including withholding taxes) on distributions or sales of minority owned investments. 51 The Company has not recorded a deferred tax liability for U.S. federal, U.S. state, or foreign tax from foreign subsidiary unremitted earnings and profits where an indefinite reinvestment assertion was made on the basis that this group of foreign subsidiaries does not expect to have available excess cash and cash equivalents to remit in the foreseeable future or has specific needs for available excess cash. The unrecorded tax liability associated with indefinitely reinvested foreign subsidiary earnings is not practicable to estimate due to the inherent complexity of the Company's global operations. Accounting for Uncertainty in Income Taxes The following summarizes the changes to unrecognized tax benefits and related interest and penalties: Years Ended March 31, 2024 2023 Balance at April 1 $ 16,085 $ 17,725 Increase (decrease) for prior year tax positions 6,392 1,449 Increase for current year tax positions 1,630 634 Reduction for settlements ( 4,662 ) ( 3,480 ) Impact of changes in exchange rates ( 2,553 ) ( 243 ) Balance at March 31 (1) $ 16,892 $ 16,085 Accrued interest 2,065 1,753 Accrued penalties 2,372 1,447 Balance at March 31 (1) $ 21,329 $ 19,285 (1) As of March 31, 2024, $ 17,742 would impact the Company's effective tax rate, if recognized. Due to the Company’s global operations, numerous tax audits may be ongoing throughout the world at any point in time. The Company's income tax liabilities are based on estimates of potential income taxes due upon the conclusion of such audits and are updated to reflect changes in facts and circumstances, as they become known. Due to the uncertain and complex application of tax regulations, it is possible that the resolution of audits may result in liabilities which could be materially different from these estimates. The Company will record additional income tax expense or benefit in the period in which such resolution occurs or if estimates or judgments change. The Company believes it is reasonably possible that its unrecognized tax benefits may decrease by approximately $ 3,587 within the next twelve months as a result of lapses in statutes of limitations. The Company and its subsidiaries file a U.S. federal consolidated income tax return as well as returns in several U.S. states and a number of foreign jurisdictions. As of March 31, 2024, the Company’s earliest open tax year for U.S. federal income tax purposes relate to tax periods ending in 2020. Open tax years in state and foreign jurisdictions generally range from three to six years. In applicable jurisdictions, the Company’s tax attributes from prior periods remain subject to adjustment. 7. Earnings (Loss) Per Share The following summarizes the computation of earnings (loss) per share: Years Ended March 31, 2024 2023 2022 Basic and diluted earnings (loss) per share: Net income (loss) attributable to Pyxus International, Inc. $ 2,663 $ ( 39,141 ) $ ( 82,119 ) Shares: Weighted average number of shares outstanding 25,000 25,000 25,000 Basic and diluted earnings (loss) per share $ 0.11 $ ( 1.57 ) $ ( 3.28 ) 52 8. Restricted Cash The following summarizes the composition of restricted cash: March 31, 2024 2023 Compensating balance for short-term borrowings $ 516 $ 379 Escrow 2,647 1,472 Grants (1) 1,375 — Other 2,686 325 Total $ 7,224 $ 2,176 (1) See " Note 25. Government Assistance " for additional information. 9. Inventories, Net The following summarizes the composition of inventories, net: March 31, 2024 2023 Processed tobacco $ 585,280 $ 498,398 Unprocessed tobacco 305,928 231,651 Other tobacco related 31,213 39,670 All Other 9,233 5,352 Total $ 931,654 $ 775,071 10. Advances to Suppliers, Ne t The following summarizes the composition of advances to suppliers, net: March 31, 2024 2023 Advances to tobacco suppliers, net $ 17,068 $ 38,111 Advances to non-tobacco suppliers 3,329 4,194 Total in current assets 20,397 42,305 Long-term advances to tobacco suppliers, net (1) 1,821 1,564 Total current and long-term $ 22,218 $ 43,869 (1) Classified as other noncurrent assets in the consolidated balance sheets. The mark-up and interest on advances to tobacco suppliers, net capitalized, or to be capitalized into inventory for the current crop, were $ 16,905 and $ 22,102 for the year ended March 31, 2024 and 2023, respectively. Unrecoverable advances and other costs capitalized, or to be capitalized into the current crop, were $ 7,975 and $ 8,322 as of March 31, 2024 and 2023, respectively. 11. Acquisitions and Dispositions Disposition of Humble Juice Co., LLC On November 23, 2021, the Company disposed of its ownership interests in Humble Juice Co., LLC ("Humble Juice"), a manufacturer and distributor of flavored e-liquids, in exchange for royalties on future revenue. Humble Juice's financial results are included in the Company's consolidated results through the transaction date within the All Other category . On the date of the transaction, Humble Juice's assets, liabilities, and equity components were eliminated from the Company's consolidated financial statements . The Company recognized a loss on the disposition of Humble Juice of $ 5,374 during the year ended March 31, 2022. 53 12. Equity Method Investments The following summarizes the Company's equity method investments as of March 31, 2024: Investee Name Location Primary Purpose Ownership Percentage Basis Difference (1) Adams International Ltd. Thailand Purchase and process tobacco 49 % $ ( 4,526 ) Alliance One Industries India Private Ltd. India Purchase and process tobacco 49 % ( 5,770 ) China Brasil Tobacos Exportadora SA Brazil Purchase and process tobacco 49 % 43,000 Oryantal Tütün Paketleme Sanayi ve Ticaret A.Ş. Turkey Process tobacco 50 % ( 416 ) Purilum, LLC U.S. Produce flavor formulations and consumable e-liquids 50 % 4,589 Siam Tobacco Export Company Thailand Purchase and process tobacco 49 % ( 6,098 ) (1) Basis differences for the Company's equity method investments were primarily due to fair value adjustments recorded during the year ended March 31, 2021. The following summarizes aggregate financial information for these equity method investments: Years Ended March 31, 2024 2023 2022 Operations statement: Sales $ 505,262 $ 489,532 $ 292,777 Gross profit 82,614 76,206 56,752 Net income 33,101 40,447 22,729 Company's dividends received 14,486 12,677 9,671 March 31, 2024 2023 Balance sheet: Current assets $ 542,702 $ 419,229 Property, plant, and equipment and other assets 50,925 48,174 Current liabilities 446,597 323,899 Long-term obligations and other liabilities 3,356 3,887 13. Variable Interest Entities The Company holds variable interests in multiple entities that primarily procure or process inventory or are securitization entities. These variable interests relate to equity investments, receivables, guarantees, and securitized receivables. The following summarizes the Company's financial relationships with its unconsolidated variable interest entities: March 31, 2024 2023 Investments in variable interest entities $ 94,609 $ 93,754 Receivables with variable interest entities — 2,617 Guaranteed amounts to variable interest entities (not to exceed) 11,113 68,265 54 14. Intangible Assets, Net and Goodwill Intangible Assets, Net The gross carrying amount and accumulated amortization of intangible assets consist of the following: March 31, 2024 Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangibles subject to amortization: Customer relationships 8.4 years $ 26,101 $ ( 7,794 ) $ 18,307 Technology 4.4 years 12,948 ( 5,784 ) 7,164 Trade names 10.4 years 11,300 ( 2,892 ) 8,408 Total $ 50,349 $ ( 16,470 ) $ 33,879 March 31, 2023 Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangibles subject to amortization: Customer relationships 9.4 years $ 26,101 $ ( 5,619 ) $ 20,482 Technology 5.2 years 13,132 ( 4,257 ) 8,875 Trade names 11.4 years 11,300 ( 2,085 ) 9,215 Total $ 50,533 $ ( 11,961 ) $ 38,572 The following summarizes amortization expense for definite-lived intangible assets: Years Ended March 31, 2024 2023 2022 Amortization expense $ 4,631 $ 6,489 $ 5,461 The following summarizes the estimated intangible asset amortization expense for the next five years and beyond: For Fiscal Years Ended Customer Relationships Technology (1) Trade Names Total 2025 $ 2,175 $ 1,550 $ 807 $ 4,532 2026 2,175 1,448 807 4,430 2027 2,175 1,490 807 4,472 2028 2,175 1,543 807 4,525 2029 2,175 741 807 3,723 Thereafter 7,432 392 4,373 12,197 Total $ 18,307 $ 7,164 $ 8,408 $ 33,879 (1) Estimated amortization expense for technology is based on costs accumulated as of March 31, 2024. These estimates will change as new costs are incurred and until the software is placed into service. 55 Goodwill During the year ended March 31, 2022, the Company performed its annual assessment of goodwill for its reporting units. The assessment of qualitative factors indicated that it was more likely than not that the fair value of each reporting unit was less than its carrying value primarily due to a sustained decline in the implied value of the Company's long-term debt and equity based on public trading as well as uncertainty in the Company's estimate of timing for future operating results due to the recent economic effects of the COVID-19 pandemic, including related variants. As a result, the Company performed a quantitative impairment test by comparing the fair value of each reporting unit to its carrying value. The fair value for each reporting unit was determined using the DCF method of the income approach. The quantitative impairment test conducted for each reporting unit concluded that the fair value of each reporting unit was less than its carrying value. The excess of carrying value over fair value for each reporting unit exceeded the amount of goodwill that was allocated to the reporting unit, leading the Company to record a full impairment of goodwill at each reporting unit as follows: Three months ended March 31, 2022 Leaf - Africa $ 8,341 Leaf - Asia 6,311 Leaf - Europe 5,566 Leaf - North America 3,901 Leaf - South America 5,730 E-liquids 1,965 Total* $ 31,814 *There was $ 372 of goodwill impairment recorded during the three months ended December 31, 2021. 15. Leases The following summarizes lease costs for operating leases: Years Ended March 31, 2024 2023 2022 Operating lease costs $ 16,028 $ 14,203 $ 14,752 Variable and short-term lease costs 8,964 8,023 7,991 Total lease costs $ 24,992 $ 22,226 $ 22,743 The following summarizes weighted average information associated with the measurement of remaining operating leases: March 31, 2024 2023 Weighted average remaining lease term 5.4 years 5.9 years Weighted average discount rate 15.8 % 14.4 % The following summarizes supplemental cash flow information related to operating leases: Years Ended March 31, 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows used by operating leases $ 15,764 $ 13,607 $ 13,677 Right-of-use assets obtained in exchange for new operating leases - noncash 10,444 9,967 7,054 56 The following reconciles maturities of operating lease liabilities to the lease liabilities reflected in the consolidated balance sheets as of March 31, 2024: 2025 $ 12,719 2026 9,753 2027 7,688 2028 5,897 2029 4,122 Thereafter 10,192 Total future minimum lease payments 50,371 Less: amounts related to imputed interest 16,135 Present value of future minimum lease payments 34,236 Less: operating lease liabilities, current 8,100 Operating lease liabilities, non-current $ 26,136 16. Property, Plant, and Equipment, Net The following summarizes property, plant, and equipment, net: March 31, 2024 2023 Land $ 29,144 $ 31,132 Buildings 45,065 43,911 Machinery and equipment 97,423 83,984 Total 171,632 159,027 Less: accumulated depreciation (1) ( 37,474 ) ( 25,629 ) Total property, plant, and equipment, net $ 134,158 $ 133,398 (1) This balance was partially reduced by the disposition of certain fully depreciated assets during the year ended March 31, 2024. The following summarizes depreciation expense recorded in cost of goods and services sold and selling, general, and administrative expenses: Years Ended March 31, 2024 2023 2022 Depreciation expense recorded in cost of goods and services sold $ 11,806 $ 10,132 $ 8,908 Depreciation expense recorded in selling, general, and administrative expenses 2,646 2,346 2,272 Total depreciation $ 14,452 $ 12,478 $ 11,180 57 17. Debt Arrangements The following table summarizes the Company’s debt financing as of the dates set forth below: Outstanding Interest March 31, Long Term Debt Repayment Schedule by Fiscal Year Rate 2024 2023 2025 2026 2027 2028 2029 Later Senior secured credit facility: ABL Credit Facility 8.5 % (1) $ — $ 25,000 $ — $ — $ — $ — $ — $ — Senior secured notes: 10.0% Notes Due 2024 (2) 10.0 % (1) 20,247 19,931 20,247 — — — — — 8.5% Notes Due 2027 (3) 8.5 % (1) 178,146 253,483 — — — 178,146 — — Senior secured term loans: Intabex Term Loans (4) 13.6 % (1) 186,659 186,194 — — — 186,659 — — Pyxus Term Loans (5) 13.6 % (1) 132,819 133,393 — — — 132,819 — — Other debt: Other long-term debt 8.5 % (1) 157 504 47 110 — — — — Notes payable (6) 9.8 % (1) 499,312 382,544 499,312 — — — — — Total debt $ 1,017,340 $ 1,001,049 $ 519,606 $ 110 $ — $ 497,624 $ — $ — Short-term (6) $ 499,312 $ 382,544 Long-term: Current portion of long-term debt $ 20,294 $ 75 Long-term debt 497,734 618,430 Total $ 518,028 $ 618,505 Letters of credit $ 5,070 $ 11,684 (1) Weighted average rate for the trailing twelve months ended March 31, 2024 or, for indebtedness outstanding only during a portion of such twelve-month period, for the portion of such period that such indebtedness was outstanding. (2) On February 6, 2023, $ 260,452 of the 10.0 % Notes due 2024 were exchanged for 8.5 % Notes due 2027. The remaining 10.0 % Notes due 2024 outstanding of $ 20,247 is net of a debt discount of $ 144 . Total repayment at maturity is $ 20,391 . (3) Balance of $ 178,146 is net of a debt discount of $ 4,384 . Total repayment at maturity is $182,530. (4) Balance of $ 186,659 is net of a debt discount of $ 2,374 . Total repayment at maturity is $ 189,033 , which includes a $ 2,000 exit fee payable upon repayment. (5) Balance of $ 132,819 is net of a debt premium of $ 2,269 . Total repayment at maturity is $ 130,550 . (6) Primarily foreign seasonal lines of credit. 58 Outstanding Senior Secured Debt ABL Credit Facility 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, which was subsequently amended on May 23, 2023 and October 24, 2023. The ABL Credit Agreement establishes 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 a maximum principal amount of $ 120,000 , subject to the limitations described below in this paragraph. The ABL Credit Facility includes a $ 20,000 uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the ABL Credit Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility not to exceed a maximum principal amount of $ 140,000 . The amount available under the ABL Credit Facility is limited by a borrowing base consisting of certain eligible accounts receivable and inventory, reduced by specified reserves, as follows: • 85 % of eligible accounts receivable, plus • the lesser of (i) 85 % of the book value of Eligible Extended Terms Receivables (as defined in the ABL Credit Agreement) and (ii) $ 5,000 , plus • 90 % of eligible credit insured accounts receivable, plus • the lesser of (i) 70 % of eligible inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits) or (ii) 85 % of the net-orderly-liquidation value percentage of eligible inventory, minus • applicable reserves. At March 31, 2024, no borrowings under the ABL Credit Facility were outstanding and $ 120,000 was available for borrowing under the ABL Credit Facility. Weighted average borrowings outstanding under the ABL Credit Facility during the fiscal year ended March 31, 2024 were $ 48,833 . 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 25.0 basis points if the outstanding borrowings equal or exceed $ 60,000 and 37.5 basis points if the outstanding borrowings are less than $ 60,000 . The ABL Credit Facility matures on February 8, 2027. As of March 31, 2024, there are no amounts outstanding under the ABL Credit Facility. The ABL Credit Facility may be prepaid from time to time, in whole or in part, without prepayment or premium, subject to a termination fee upon the permanent reduction of commitments under the ABL Credit Facility of 300 basis points for terminations in the first year after entry into the ABL Credit Agreement, 200 basis points for terminations in the second year and 100 basis points for termination in the third year. In addition, customary mandatory prepayments of the loans under the ABL Credit Facility are required upon the occurrence of certain events including, without limitation, outstanding borrowing exposures exceeding the borrowing base, certain dispositions of assets outside of the ordinary course of business in respect of certain collateral securing the ABL Credit Facility and certain casualty and condemnation events. With respect to base rate loans, accrued interest is payable monthly in arrears and, with respect to BSBY loans, accrued interest is payable monthly and on the last day of any applicable interest period. The Borrowers’ obligations under the ABL Credit Facility (and certain related obligations) are (a) guaranteed by Pyxus Parent, 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. Under the terms of the ABL Credit Facility, if (i) an event of default has occurred and is continuing, (ii) excess borrowing availability under the ABL Credit Facility (based on the lesser of the commitments thereunder and the borrowing base) (the "Excess Availability") falls below the greater of $ 10,000 or 10 % of the lesser of total commitments under the ABL Credit Facility at such time and the borrowing base at such time, or (iii) Domestic Availability (as defined in the ABL Credit Agreement) being less than the greater of $ 20,000 or 20 % of the lesser of total commitments under the ABL Credit Facility at such time and the borrowing base at such time, the ABL Loan Parties will become subject to cash dominion, which will require 59 daily prepayment of loans under the ABL Credit Facility with the cash deposited in certain deposit accounts of the ABL Loan Parties, including concentration accounts, and will restrict the ABL Loan Parties’ ability to transfer cash from their concentration accounts to their disbursement accounts. Such cash dominion period (a "Dominion Period") shall end when (i) if arising as a result of a continuing event of default, such event of default ceases to exist, (ii) if arising as a result of non-compliance with the Excess Availability threshold, no event of default is continuing and, for a period of 30 consecutive days, Excess Availability is equal to or greater than the greater of $ 10,000 or 10 % of the lesser of total commitments under the ABL Credit Facility and the borrowing base, or (iii) if arising as a result of Domestic Availability being less than the threshold, no event of default is continuing and, for a period of 30 consecutive days, Domestic Availability is greater than the greater of $ 20,000 or 20 % of the lesser of total commitments under the ABL Credit Facility and the borrowing base. Covenants. The ABL Credit Agreement governing the ABL Credit Facility contains (i) a springing covenant requiring that the Company’s fixed charge coverage ratio be no less than 1.10 to 1.00 during any Dominion Period and (ii) a covenant requiring Domestic Availability greater than $ 20,000 at all times until audited financial statements for fiscal year ending March 31, 2023 are delivered under the ABL Credit Agreement. The ABL Credit Agreement governing the ABL Credit Facility contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s ability to, among other things: • incur additional indebtedness or issue disqualified stock or preferred stock; • make investments; • pay dividends and make other restricted payments; • sell certain assets; • create liens; • enter into sale and leaseback transactions; • consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets; • enter into transactions with affiliates; and • designate subsidiaries as Unrestricted Subsidiaries (as defined in the ABL Credit Agreement). On March 31, 2024, the Borrowers were in compliance with all covenants under the ABL Credit Agreement. 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 $ 189,033 (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) $ 100,000 principal amount of the DDTL Term Loans, plus an additional $ 2,000 on account of the exit fee payable under the DDTL Credit Agreement and (ii) approximately $ 87,033 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 60 stock or preferred stock; make investments; pay dividends and make other restricted payments; sell certain assets; incur liens; 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, 2024, 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. 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 $ 130,550 (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. 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 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; incur liens; 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, 2024, 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. On March 21, 2024, Pyxus Holdings entered into an agreement (the "Debt Repurchase Agreement") with certain holders of its senior debt which included the right of Pyxus Holdings, at its option, to purchase from such holders $ 10,345 aggregate principal amount of the Pyxus Term Loans for $ 9,104 , a 12.0 % discount to par value, plus accrued and unpaid interest and specified customary fees. On April 12, 2024, Pyxus Holdings exercised its right to purchase such Pyxus Term Loans. Refer to " Note 29. Subsequent Events " 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 $ 260,452 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. 61 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; incur liens; 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, 2024, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture. Pursuant to the Debt Repurchase Agreement entered into on March 21, 2024, Pyxus Holdings agreed to purchase from the holders of its senior debt party to the Debt Repurchase Agreement $ 77,922 aggregate principal amount of the 2027 Notes for $ 60,000 , a 23.0 % discount to par value, plus accrued and unpaid interest and specified customary fees. The Debt Repurchase Agreement also included the right of Pyxus Holdings, at its option, to purchase from such holders an additional $ 34,191 aggregate principal amount of the 2027 Notes for $ 26,327 , a 23.0 % discount to par value, plus accrued and unpaid interest and customary fees. The purchase of $ 77,922 aggregate principal amount of the 2027 Notes pursuant to the Debt Repurchase Agreement was completed on March 28, 2024. On April 12, 2024, Pyxus Holdings exercised its right under the Debt Repurchase Agreement to purchase such additional $ 34,191 aggregate principal amount of the 2027 Notes. Refer to " Note 29. Subsequent Events " 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. On March 27, 2024, Alliance One International Tabak B.V. was merged with and into Intabex. 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. 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 62 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. 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. 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; and • 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 7,939 shares of the Company’s common stock, representing approximately 31.8 % of the outstanding shares of the Company’s common stock. Based on a Schedule 13D/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 shares of the Company’s common stock, representing approximately 24.6 % of the outstanding shares of the Company’s common stock. Based on a Schedule 13G/A filed with the SEC on February 10, 2022 by Owl Creek Asset Management, L.P. and Jeffrey A. Altman, Owl Creek Asset Management, L.P. is the investment manager of certain funds and reported beneficial ownership of 2,405 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. 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 Initial DDTL Credit Facility Agreement, the amendments thereto (including the DDTL Credit Agreement) and the Support Agreement, effected borrowings under the Initial DDTL Credit Facility Agreement and the DDTL Credit Agreement and commenced the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange. 63 The holders of senior debt that are parties to the Debt Repurchase Agreement are funds affiliated with the Monarch Investor and of which the Monarch Investor is the investment advisor. Refer to " Note 27. Related Party Transactions " for additional information. Other Outstanding Debt 2024 Notes 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, 2024, the remaining 2024 Notes outstanding is $ 20,247 , net of a debt discount of $ 144 . The total repayment amount due at maturity is $ 20,391 . On March 31, 2024, 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. Foreign Seasonal Lines of Credit Excluding its long-term credit agreements, the Company has typically financed its non-U.S. operations with uncommitted short-term seasonal lines of credit arrangements with a number of banks. These operating lines are generally seasonal in nature, typically extending for a term of 180 to 365 days corresponding to the tobacco crop cycle in that location. These facilities are typically uncommitted in that the lenders have the right to cease making loans and demand repayment of loans at any time 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, 2024, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 155,000 . At March 31, 2024 and 2023, the Company was permitted to borrow under foreign seasonal lines of credit, including letters of credit, up to a total of $ 776,756 and $ 716,080 , respectively, subject to limitations under the ABL Credit Agreement and the agreements governing the New Secured Debt. The weighted average variable interest rate for the years ended March 31, 2024 and 2023 was 9.8 % and 6.8 %, respectively. Certain of the foreign seasonal lines of credit with aggregate outstanding borrowings at March 31, 2024 and 2023 of $ 119,964 and $ 84,640 , respectively, are secured by trade receivables and inventories as collateral. At March 31, 2024 and 2023, respectively, $ 516 and $ 379 of cash was held on deposit as a compensating balance. At March 31, 2024, the Company and its subsidiaries were in compliance with the covenants associated with the short-term seasonal lines of credit. 18. Securitized Receivables The Company sells trade receivables to unaffiliated financial institutions under various accounts receivable securitization facilities, two of which are subject to annual renewal. Under the first facility, with Finacity Corporation (the "Finacity Facility"), the Company continuously sells a designated pool of trade receivables to a special purpose entity, which sells 100 % of the receivables to an unaffiliated financial institution. Following the sale and transfer of the receivables to the special purpose entity, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. This facility requires a minimum level of deferred purchase price be retained by the Company in connection with the sales of the receivables to the unaffiliated financial institution. The Company continues to service, administer, and collect the receivables on behalf of the special purpose entity and receives a servicing fee of 0.5 % of serviced receivables per annum. As the Company estimates the expected fee it receives in return for its obligation to service these receivables is at fair value, no servicing assets or liabilities are recognized. Servicing fees are recorded as a reduction of selling, general, and administrative expenses within the statements of consolidated operations. As of March 31, 2024, the investment limit of this facility was $ 100,000 of trade receivables. Under the second facility, the Company offers trade receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution. Following the sale and transfer of the receivables to the 64 unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. Although the Company continues to service, administer, and collect the receivables on behalf of the unaffiliated financial institution, the Company does not receive a servicing fee, and as a result, has established a servicing liability based upon unobservable inputs, primarily discounted cash flow. As of March 31, 2024, the investment limit under the second facility was $ 110,000 of trade receivables. As servicer for the Finacity Facility and the second facility, the Company may receive funds that are due to the unaffiliated financial institutions which are net settled on the next settlement date. As of March 31, 2024 and 2023, trade receivables, net in the consolidated balance sheets has been reduced by $ 15,036 and $ 3,193 as a result of the net settlement, respectively. As of March 31, 2024 and 2023, accrued expenses and other current liabilities in the consolidated balance sheets includes $ 10,279 and $ 0 of net payables for the Finacity Facility, respectively. Refer to " Note 21. Fair Value Measurements " for additional information. Under the other facilities, the Company offers trade receivables for sale to unaffiliated financial institutions, which are then subject to acceptance by the unaffiliated financial institutions. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. As of March 31, 2024, the investment limits under these other facilities were variable based on qualifying sales. The following summarizes the Company's accounts receivable outstanding in the securitization facilities, which represents trade receivables sold into the program that have not been collected from the customer, and related beneficial interests, which represents the Company's residual interest in receivables sold that have not been collected from the customer: March 31, 2024 2023 Receivables outstanding in facility $ 170,267 $ 173,979 Beneficial interest 15,036 19,522 Cash proceeds from the sale of trade receivables is comprised of a combination of cash and a deferred purchase price receivable. Deferred purchase price receivable is realized after the collection of the underlying trade receivables sold by the purchasers. The following summarizes the Company's cash purchase price and deferred purchase price: Years Ended March 31, 2024 2023 2022 Cash proceeds: Cash purchase price $ 649,680 $ 696,404 $ 441,054 Deferred purchase price 175,911 165,262 189,440 19. Guarantees In certain markets, the Company guarantees bank loans for suppliers to finance their crops. The Company also guarantees bank loans of certain unconsolidated subsidiaries. The following summarizes amounts guaranteed and the fair value of those guarantees: March 31, 2024 2023 Amounts guaranteed (not to exceed) $ 97,411 $ 152,032 Amounts outstanding under guarantee (1) 71,427 83,420 Fair value of guarantees 5,097 5,262 Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing 34,571 12,529 (1) Most of the guarantees outstanding at March 31, 2024 expire within one year . 65 20. Derivative Financial Instruments The Company uses forward or option currency contracts to manage risks associated with foreign currency exchange rates on foreign operations. These contracts are for green tobacco purchases, processing costs, and selling, general, and administrative expenses. The Company recorded a net gain of $ 6,356 , 6,764 , and $ 2,482 from its derivative financial instruments in cost of goods and services sold for the years ended March 31, 2024, 2023, and 2022, respectively. As of March 31, 2024 and 2023, accumulated other comprehensive income includes $( 2,860 ) and $( 2,777 ), respectively, net of $ 1,021 and $ 1,690 of tax, respectively, for net unrealized (losses) and gains related to designated cash flow hedges. As of March 31, 2024 and 2023, the Company recorded current derivative assets of $ 0 and $ 3,970 within other current assets, respectively. Refer to " Note 21. Fair Value Measurements " for additional information. The following summarizes the U.S. Dollar notional amount of derivative contracts outstanding: March 31, 2024 2023 U.S. Dollar notional outstanding $ — $ 63,622 21. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The inputs used to measure fair value are prioritized based on a three-level valuation hierarchy, which is comprised of observable and non-observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These three levels of inputs create the following fair value hierarchy: • Level 1 inputs - Quoted prices in active markets for identical assets or liabilities. • Level 2 inputs - Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and observable inputs (other than quoted prices) for the assets or liabilities. • Level 3 inputs - Unobservable inputs for the assets or liabilities. The following summarizes assets and liabilities measured at fair value on a recurring basis: March 31, 2024 2023 Level 2 Level 3 Total Assets / Liabilities at Fair Value Level 2 Level 3 Total Assets / Liabilities at Fair Value Financial assets Derivative financial instruments $ — $ — $ — $ 3,970 $ — $ 3,970 Securitized beneficial interests — 15,036 15,036 — 19,522 19,522 Total assets $ — $ 15,036 $ 15,036 $ 3,970 $ 19,522 $ 23,492 Financial liabilities Long-term debt (1) $ 462,987 $ 160 $ 463,147 $ 523,758 $ 514 $ 524,272 Guarantees — 5,097 5,097 — 5,262 5,262 Total liabilities $ 462,987 $ 5,257 $ 468,244 $ 523,758 $ 5,776 $ 529,534 (1) This fair value measurement disclosure does not affect the consolidated balance sheets. Level 2 measurements • Debt: The fair value of debt is based on the market price for similar financial instruments or model-derived valuations with observable inputs. The primary inputs to the valuation include market expectations, the Company's credit risk, and the contractual terms of the debt instrument. • Derivatives: The fair value of derivatives is based on the discounted cash flow analysis of the expected future cash flows. The primary inputs to the valuation include forward yield curves, implied volatilities, LIBOR rates, and credit valuation adjustments. 66 Level 3 measurements • Guarantees: The fair value of guarantees is based on the discounted cash flow analysis of the expected future cash flows or historical loss rates. The historical loss rate was weighted by the principal balance of the loans. • Securitized beneficial interests: The fair value of securitized beneficial interests is based on the present value of future expected cash flows. The discount rate was weighted by the outstanding interest. Payment speed was weighted by the avera ge days outstanding. • Debt: The fair value of debt is based on the present value of future payments. The primary inputs to this valuation include treasury notes interest and borrowing rates . The borrowing rates were weighted by average loans outstanding. Reconciliation of Change in Recurring Level 3 Balances The following summarizes the changes in Level 3 instruments measured on a recurring basis. Securitized Beneficial Interests Long-Term Debt Guarantees Beginning balance at March 31, 2022 $ 28,072 $ 246 $ 2,956 Sales of receivables/issuance of guarantees 166,165 — 6,187 Settlements ( 164,679 ) ( 37 ) ( 1,864 ) Additions — 305 — Losses recognized in earnings ( 10,036 ) — ( 2,017 ) Ending balance at March 31, 2023 $ 19,522 $ 514 $ 5,262 Sales of receivables/issuance of guarantees 162,229 — 7,184 Settlements ( 154,659 ) ( 354 ) ( 4,801 ) Losses recognized in earnings ( 12,056 ) — ( 2,548 ) Ending balance at March 31, 2024 $ 15,036 $ 160 $ 5,097 The amount of total losses included in earnings for the years ended March 31, 2024, 2023 and 2022 are attributable to the change in unrealized losses relating to assets still held at the respective dates was $ 1,027 , $ 659 and $ 1,148 on securitized beneficial interests. Gains and losses included in earnings are reported in other expense, net. Information about Fair Value Measurements Using Significant Unobservable Inputs The following summarizes significant unobservable inputs and the valuation techniques utilized: Fair value at March 31, 2024 Valuation Technique Unobservable Input Range (Weighted Average) Securitized Beneficial Interests $ 15,036 Discounted Cash Flow Discount Rate 5.6 % to 7.9 % Payment Speed 58 days to 83 days Guarantees $ 5,097 Historical Loss Historical Loss 0.7 % to 37.3 % Fair value at March 31, 2023 Valuation Technique Unobservable Input Range (Weighted Average) Securitized Beneficial Interests $ 19,522 Discounted Cash Flow Discount Rate 2.3 % to 7.3 % Payment Speed 38 days to 88 days Guarantees $ 5,262 Historical Loss Historical Loss 1.2 % to 40.0 % 22. Pension and Other Postretirement Benefits Defined Benefit Plans The Company terminated one of its defined benefit pension plans in the United Kingdom ("U.K. Pension Plan") during the year ended March 31, 2024. The U.K. Pension Plan was over-funded. During the year ended March 31, 2024, the Company utilized the surplus assets to pay termination fees and received a $ 1,106 cash distribution from the plan termination. The Company recorded a noncash pension settlement charge of $ 12,008 during the year ended March 31, 2024, which included the disposition of the U.K. Pension Plan assets and the reclassification of $ 3,511 unrecognized net pension losses, net of $ 1,170 tax benefit, 67 within accumulated other comprehensive income into the Company's consolidated statements of operations. The Company terminated one of its defined benefit pension plans in the United States ("U.S. Pension Plan") during the year ended March 31, 2023. The Company settled benefits with vested participants that elected a lump sum payout and made a cash contribution of $ 5,300 to fully fund the U.S. Pension Plan liabilities that was used to purchase a group annuity contract to administer payments to the remaining U.S. Pension Plan participants. The Company recorded a noncash pension settlement charge of $ 2,588 for the year ended March 31, 2023, which included the recognition of unrecognized net pension gains within accumulated other comprehensive income into the Company's consolidated statements of operations. The following summarizes benefit obligations, plan assets, and funded status for the defined benefit pension plans: U.S. Plans Non-U.S. Plans Total March 31, 2024 Benefit obligation, beginning $ 35,710 $ 44,671 $ 80,381 Service cost — 181 181 Interest cost 1,705 1,780 3,485 Actuarial (gains) losses ( 538 ) 7,743 7,205 Plan settlements — ( 29,957 ) ( 29,957 ) Effects of currency translation — ( 17 ) ( 17 ) Benefits paid ( 3,183 ) ( 3,135 ) ( 6,318 ) Benefit obligation, ending $ 33,694 $ 21,266 $ 54,960 Fair value of plan assets, beginning $ — $ 52,027 $ 52,027 Actual return on plan assets — 3,171 3,171 Employer contributions 3,183 896 4,079 Plan settlements — ( 31,064 ) ( 31,064 ) Effects of currency translation — 485 485 Benefits paid ( 3,183 ) ( 3,135 ) ( 6,318 ) Fair value of plan assets, ending $ — $ 22,380 $ 22,380 Funded status of the plan $ ( 33,694 ) $ 1,114 $ ( 32,580 ) U.S. Plans Non-U.S. Plans Total March 31, 2023 Benefit obligation, beginning $ 62,797 $ 58,931 $ 121,728 Service cost 300 176 476 Interest cost 1,711 1,564 3,275 Plan amendments — 139 139 Actuarial gains ( 4,106 ) ( 10,220 ) ( 14,326 ) Plan settlements ( 21,390 ) ( 720 ) ( 22,110 ) Effects of currency translation — ( 2,356 ) ( 2,356 ) Benefits paid ( 3,602 ) ( 2,843 ) ( 6,445 ) Benefit obligation, ending $ 35,710 $ 44,671 $ 80,381 Fair value of plan assets, beginning $ 19,812 $ 66,801 $ 86,613 Actual return on plan assets ( 3,974 ) ( 10,027 ) ( 14,001 ) Employer contributions 9,154 1,758 10,912 Plan settlements ( 21,390 ) ( 720 ) ( 22,110 ) Effects of currency translation — ( 2,942 ) ( 2,942 ) Benefits paid ( 3,602 ) ( 2,843 ) ( 6,445 ) Fair value of plan assets, ending $ — $ 52,027 $ 52,027 Funded status of the plan $ ( 35,710 ) $ 7,356 $ ( 28,354 ) 68 The following summarizes amounts reported in the consolidated balance sheets for the defined benefit pension plans: U.S. Plans Non-U.S. Plans March 31, March 31, 2024 2023 2024 2023 Noncurrent benefit asset recorded in other noncurrent assets $ — $ — $ 7,562 $ 13,731 Accrued current benefit liability recorded in accrued expenses and other current liabilities ( 3,341 ) ( 3,290 ) ( 1,065 ) ( 972 ) Accrued noncurrent benefit liability recorded in pension, postretirement, and other long-term liabilities ( 30,353 ) ( 32,420 ) ( 5,383 ) ( 5,403 ) Funded status of the plan $ ( 33,694 ) $ ( 35,710 ) $ 1,114 $ 7,356 The following summarizes pension obligations for the defined benefit pension plans: U.S. Plans Non-U.S. Plans (1) March 31, March 31, 2024 2023 2024 2023 Information for pension plans with accumulated benefit obligation in excess of plan assets: Projected benefit obligation $ 33,694 $ 35,710 $ 6,448 $ 6,375 Accumulated benefit obligation 33,694 35,710 5,816 5,998 Fair value of plan assets — — — — (1) Certain of the Company's non-U.S. defined benefit pension plans in Europe were over-funded as of March 31, 2024 and 2023. 69 The following summarizes activity in accumulated other comprehen sive income for the defined benefit plans: U.S. and Non-U.S. Pension U.S. and Non-U.S. Post-retirement Total Prior service credit $ 56 $ — $ 56 Net actuarial gains 4,645 1,383 6,028 Deferred taxes 459 ( 215 ) 244 Balance at March 31, 2022 $ 5,160 $ 1,168 $ 6,328 Prior service cost $ ( 138 ) $ — $ ( 138 ) Net actuarial gains 1,238 609 1,847 Deferred taxes 372 ( 74 ) 298 Total change for 2023 $ 1,472 $ 535 $ 2,007 Prior service credit $ ( 82 ) $ — $ ( 82 ) Net actuarial gains 5,883 1,992 7,875 Deferred taxes 831 ( 289 ) 542 Balance at March 31, 2023 $ 6,632 $ 1,703 $ 8,335 Prior service cost $ 50 $ — $ 50 Net actuarial gains 5,855 ( 783 ) 5,072 Deferred taxes ( 940 ) 249 ( 691 ) Total change for 2024 $ 4,965 $ ( 534 ) $ 4,431 Prior service cost $ ( 32 ) $ — $ ( 32 ) Net actuarial gains 11,738 1,209 12,947 Deferred taxes ( 109 ) ( 40 ) ( 149 ) Balance at March 31, 2024 $ 11,597 $ 1,169 $ 12,766 The following assumptions were used to determine the expense for the pension plans: U.S. Plans Non-U.S. Plans March 31, March 31, 2024 2023 2022 2024 2023 2022 Discount rate 5.08 % 3.75 % 2.83 % 4.94 % 2.98 % 2.17 % Rate of increase in future compensation Not applicable Not applicable Not applicable 5.72 % 7.31 % 5.28 % Expected long-term rate of return on plan assets Not applicable Not applicable 5.75 % 4.20 % 2.16 % 2.12 % Interest crediting rate Not applicable 4.28 % 4.25 % Not applicable Not applicable Not applicable 70 The following weighted average assumptions were used to determine the benefit obligations for the pension plans: U.S. Plans Non-U.S. Plans March 31, March 31, 2024 2023 2022 2024 2023 2022 Discount rate 5.33 % 5.08 % 3.74 % 5.37 % 4.94 % 2.98 % Rate of increase in future compensation Not applicable Not applicable Not applicable 10.42 % 5.72 % 7.31 % Interest crediting rate Not applicable Not applicable 4.28 % Not applicable Not applicable Not applicable Plan Assets The following summarizes asset allocations and the percentage of the fair value of plan assets by asset category: Non-U.S. Plans March 31, 2024 2023 Asset category: Cash and cash equivalents 1.6 % 11.5 % Equity securities 57.7 % 20.3 % Debt securities 36.0 % 14.8 % Insurance contracts — % 50.9 % Real estate and other investments 4.7 % 2.5 % Total 100.0 % 100.0 % The fair values for the pension plans by asset category are as fol lows: Non-U.S. Pension Plans March 31, 2024 Total Level 1 Cash and cash equivalents $ 374 $ 374 U.S. equities / equity funds 8,616 8,616 International equities / equity funds 4,290 4,290 U.S. fixed income funds 5,578 5,578 International fixed income funds 2,477 2,477 Real estate and other (1) 1,045 1,045 Total $ 22,380 $ 22,380 (1) Certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. Non-U.S. Pension Plans March 31, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 5,964 $ 5,964 $ — $ — U.S. equities / equity funds 6,669 6,669 — — International equities / equity funds 3,909 3,909 — — U.S. fixed income funds 5,364 5,364 — — International fixed income funds 2,334 2,334 — — Global fixed income funds 26,472 — 26,472 — Real estate and other (1) 1,315 1,315 — — Total $ 52,027 $ 25,555 $ 26,472 $ — (1) Certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. 71 Postretirement Health and Life Insurance Benefits The following summarizes benefit obligations, plan assets, and funded status for the postretirement health and life insurance benefits plans: U.S. Plans Non-U.S. Plans Total March 31, 2024 Benefit obligation, beginning $ 3,369 $ 1,115 $ 4,484 Service cost 4 — 4 Interest cost 161 117 278 Effect of currency translation — 10 10 Actuarial gains 160 472 632 Benefits paid ( 169 ) ( 134 ) ( 303 ) Benefit obligation, ending $ 3,525 $ 1,580 $ 5,105 Fair value of plan assets, beginning $ — $ — $ — Employer contributions 169 134 303 Benefits paid ( 169 ) ( 134 ) ( 303 ) Fair value of plan assets, ending $ — $ — $ — Funded status of the plan $ ( 3,525 ) $ ( 1,580 ) $ ( 5,105 ) U.S. Plans Non-U.S. Plans Total March 31, 2024 Accrued current benefit liability recorded in accrued expenses and other current liabilities $ ( 337 ) $ ( 130 ) $ ( 467 ) Accrued non-current benefit liability recorded in pension, postretirement, and other long-term liabilities ( 3,188 ) ( 1,450 ) ( 4,638 ) Funded status of the plan $ ( 3,525 ) $ ( 1,580 ) $ ( 5,105 ) 72 U.S. Plans Non-U.S. Plans Total March 31, 2023 Benefit obligation, beginning $ 3,977 $ 1,454 $ 5,431 Service cost 5 — 5 Interest cost 134 121 255 Effect of currency translation — ( 97 ) ( 97 ) Actuarial gains ( 437 ) ( 288 ) ( 725 ) Benefits paid ( 310 ) ( 75 ) ( 385 ) Benefit obligation, ending $ 3,369 $ 1,115 $ 4,484 Fair value of plan assets, beginning $ — $ — $ — Employer contributions 310 75 385 Benefits paid ( 310 ) ( 75 ) ( 385 ) Fair value of plan assets, ending $ — $ — $ — Funded status of the plan $ ( 3,369 ) $ ( 1,115 ) $ ( 4,484 ) U.S. Plans Non-U.S. Plans Total March 31, 2023 Accrued current benefit liability recorded in accrued expenses and other current liabilities $ ( 297 ) $ ( 96 ) $ ( 393 ) Accrued non-current benefit liability recorded in pension, postretirement, and other long-term liabilities ( 3,072 ) ( 1,019 ) ( 4,091 ) Funded status of the plan $ ( 3,369 ) $ ( 1,115 ) $ ( 4,484 ) The following assumptions were used to determine postretirement benefit obligations: U.S. Plans Non-U.S. Plans March 31, March 31, 2024 2023 2022 2024 2023 2022 Discount rate 5.35 % 5.09 % 3.75 % 9.72 % 10.58 % 9.50 % Health care cost trend rate assumed for next year 6.58 % 5.49 % 5.62 % 8.75 % 9.40 % 7.90 % Cash Flows The Company expects to contribute the following to its benefit plans: Pension Benefits Postretirement Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Total Fiscal Year 2025 $ 3,341 $ 1,065 $ 337 $ 130 $ 4,873 The Company's contributions to the defined contribution plans are as follows: Years Ended March 31, 2024 2023 2022 Contributions $ 4,395 $ 5,478 $ 4,589 73 The following summarizes the expected benefit payments to be paid in future years, as of March 31, 2024: Pension Benefits Other Benefits U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Total 2025 $ 3,341 $ 2,669 $ 337 $ 130 $ 6,477 2026 3,277 2,209 326 133 5,945 2027 3,207 2,244 317 136 5,904 2028 3,129 2,223 309 139 5,800 2029 3,044 2,245 299 142 5,730 Thereafter 13,682 13,066 1,343 765 28,856 Total $ 29,680 $ 24,656 $ 2,931 $ 1,445 $ 58,712 23. Contingencies and Other Information Brazilian Tax Credits The government in the Brazilian State of Parana ("Parana") issued a tax assessment on October 26, 2007 with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil. At March 31, 2024, the assessment for intrastate trade tax credits taken is $ 2,642 and the total assessment including penalties and interest is $ 10,784 . On March 18, 2014, the government in Brazilian State of Santa Catarina also issued a tax assessment with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil. At March 31, 2024, the assessment for intrastate trade tax credits taken is $ 2,280 and the total assessment including penalties and interest is $ 6,841 . The Company believes it has properly complied with Brazilian law and will contest any assessment through the judicial process. Should the Company lose in the judicial process, the loss of the intrastate trade tax credits would have a material impact on the consolidated financial statements of the Company. The Company also has local intrastate trade tax credits in the Brazil State of Rio Grande do Sul. This jurisdiction permits the sale or transfer of excess credits to third parties, however approval must be obtained from the tax authorities. The Company has an agreement with the state government regarding the amounts and timing of credits that can be sold. The tax credits have a carrying value of $ 20,772 . The intrastate trade tax credits are monitored for impairment in future periods based on market conditions and the Company’s ability to use or sell the tax credits. Other Matters In addition to the above-mentioned matters, certain of the Company’s subsidiaries are involved in other litigation or legal matters incidental to their business activities, including tax matters. While the outcome of these matters cannot be predicted with certainty, they are being vigorously defended and the Company does not currently expect that any of them will have a material adverse effect on its business or financial position. However, should one or more of these matters be resolved in a manner adverse to its current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material. 74 24. Other Comprehensive Income (Loss) The following summarizes changes in each component of accumulated other comprehensive income, net of tax, attributable to the Company: Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Accumulated Other Comprehensive Income Balances at March 31, 2021 $ ( 4,649 ) $ 541 $ ( 2,625 ) $ ( 6,733 ) Other comprehensive (loss) income before reclassifications ( 4,224 ) 6,209 10,419 12,404 Amounts reclassified to net loss, net of tax — ( 422 ) ( 1,445 ) ( 1,867 ) Other comprehensive (loss) income, net of tax ( 4,224 ) 5,787 8,974 10,537 Balances at March 31, 2022 $ ( 8,873 ) $ 6,328 $ 6,349 $ 3,804 Other comprehensive income (loss) before reclassifications 2,481 1,873 1,750 6,104 Amounts reclassified to net loss, net of tax — 134 ( 4,527 ) ( 4,393 ) Other comprehensive income (loss), net of tax 2,481 2,007 ( 2,777 ) 1,711 Balances at March 31, 2023 $ ( 6,392 ) $ 8,335 $ 3,572 $ 5,515 Other comprehensive income (loss) before reclassifications 700 ( 4,436 ) 1,698 ( 2,038 ) Amounts reclassified to net income, net of tax — 8,867 ( 4,558 ) 4,309 Other comprehensive income (loss), net of tax 700 4,431 ( 2,860 ) 2,271 Balances at March 31, 2024 $ ( 5,692 ) $ 12,766 $ 712 $ 7,786 The following summarizes amounts by component, reclassified from accumulated other comprehensive income (loss) to net income (loss): Years Ended March 31, 2024 Affected Line Item in the Consolidated Statements of Operations Pension and postretirement plans (1) : Settlement loss $ 4,681 Loss on pension settlement Actuarial loss 6,780 Interest expense Amortization of prior service cost 4 Interest expense Amounts reclassified from equity to the income statement, gross 11,465 Tax effects of amounts reclassified from accumulated other comprehensive income to net income ( 2,598 ) Amounts reclassified from equity to the income statement, net $ 8,867 (1) Amounts are included in net periodic benefit costs for pension and postretirement plans. Years Ended March 31, Affected Line Item in the Consolidated Statements of Operations 2024 2023 2022 Derivatives: Gain reclassified to cost of goods sold $ ( 6,356 ) $ ( 6,764 ) $ ( 2,672 ) Amounts reclassified from equity to the income statement, gross ( 6,356 ) ( 6,764 ) ( 2,672 ) Cost of goods and services sold Tax effects of amounts reclassified from accumulated other comprehensive income to net loss 1,798 2,237 1,227 Amounts reclassified from equity to the income statement, net $ ( 4,558 ) $ ( 4,527 ) $ ( 1,445 ) 75 25. Government Assistance In fiscal year 2024, the Company partnered with the United States Agency for International Development ("USAID") to support programs that promote sustainable agriculture developments in certain markets. In conjunction with this partnership, USAID awarded a total of $ 16,600 in grants to be received over a five-year period based on the achievement of certain agreed-upon milestones. The grants awarded are governed by a fixed-amount cooperative agreement that outlines how the funds should be used, which includes providing crop financing to farmers, acquiring capital assets, and funding certain operating expenses to achieve desired outcomes. As of March 31, 2024, the Company received $ 4,900 in cash grants from USAID. 26. Equity –Based Compensation On March 21, 2024, the Board of Directors amended and restated the Incentive Plan to increase the number of shares of the Company's common stock authorized to be issued thereunder to 3,220 shares. The Incentive Plan permits the grant of options, stock appreciation rights (or SARs), stock awards, stock unit awards, performance share awards, and incentive awards. The awards outstanding at March 31, 2024 under the Incentive Plan are restricted stock units for an aggregate of 784 shares that become eligible for vesting, subject to continued employment in equal annual increments generally on March 31 of each year and stock units awarded to non-employee directors for an aggregate of 172 shares. The performance-based restricted stock units provided for the issuance of shares based on satisfaction of performance criteria over a three-year measurement ended March 31, 2024, subject to continued employment, with payouts at 50 % of the target level upon satisfaction of threshold performance levels, 100 % of the target level upon satisfaction of target performance levels and 150 % of the target level upon performance equaling or exceeding the maximum performance levels, with payouts interpolated for performance between these levels. Each of such time-vesting and performance-based restricted stock units is subject to an additional condition to vesting (the "Listing Condition") that the Company’s common stock be listed for trading on a national securities exchange or an approved foreign securities exchange by a specified date. As of March 31, 2024, the vesting requirements for these awards were not probable to occur. As a result, no equity-based compensation expense was recognized in the years ended March 31, 2024, 2023, and 2022. 27. Related Party Transactions The Company engages in transactions with its equity method investees primarily for the procuring and processing of inventory. The following summarizes sales and purchases transactions with related parties: Years Ended March 31, 2024 2023 2022 Sales $ 25,059 $ 22,695 $ 25,575 Purchases 204,193 158,140 135,261 The Company included the following related party balances in its consolidated balances sheets: March 31, 2024 2023 Location in Consolidated Balance Sheet Accounts receivable, related parties $ 50 $ 3,090 Other receivables Accounts payable, related parties 35,396 20,438 Accounts payable Advances from related parties 12,533 3,494 Advances from customers Transactions with Significant Shareholders As described in " Note 17. Debt Arrangements ," funds managed by the Glendon Investor, funds managed by the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P., (such funds are collectively referred to as the "Investor-Affiliated Funds") entered into the Support Agreement, and received the New Secured Debt pursuant to the Debt Exchange Transactions. The Company paid a total of $ 1,575 in transaction costs incurred by the parties receiving the New Secured Debt in the Debt Exchange Transactions, of which an aggregate $ 910 related to costs paid on behalf of the Investor-Affiliated Funds. On August 24, 2020, pursuant to the Exit Term Loan Credit Agreement, Pyxus Holdings became obligated with respect to the Exit Term Loans in an aggregate principal amount of approximately $ 213,418 . The Exit Term Loans accrued 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 August 24, 2021, the Exit Term Loans accrued "payment in kind" (PIK) interest in an annual rate equal to 100 basis points, which rate increased by an additional 100 basis points on August 24, 2022. The Exit Term Loans were exchanged upon consummation of the DDTL Facility Exchange and the Exit Facility Exchange on February 6, 2023. 76 On April 23, 2021 (the “DDTL Closing Date”), Intabex entered into a Term Loan Credit Agreement (as amended on May 21, 2021, the "Initial DDTL Facility Credit Agreement"), dated as of April 23, 2021, by and among (i) Intabex, as borrower, (ii) the Company, Pyxus Parent, Pyxus Holdings, Alliance One International, LLC, Alliance One International Holdings, Ltd, as guarantors (collectively, the "Parent Guarantors"), (iii) the lenders thereto, which included certain funds managed by Glendon Capital Management, L.P., Monarch Alternative Capital LP, and Owl Creek Asset Management, L.P. (collectively and, together other lenders that became parties thereto as lenders, the "DDTL Facility Lenders"), and (iv) Alter Domus, as administrative agent and collateral agent. The Initial DDTL Facility Credit Agreement established a $ 120,000 delayed-draw term loan credit facility (the "Initial DDTL Facility") under which the full amount was drawn (the "Initial DDTL Loans") by March 31, 2022. The proceeds of the Initial DDTL Loans were used to provide working capital and for other general corporate purposes of Intabex, the guarantors of the Initial DDTL Loans and their subsidiaries. Interest on the aggregate principal amount of outstanding Initial DDTL Loans accrued 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 Initial DDTL Facility Credit Agreement) plus 8.0 %. Pursuant to the Initial DDTL Facility Credit Agreement, the DDTL Facility Lenders received a non-refundable commitment fee equal to 2.0 % of the aggregate commitments under the Initial DDTL Facility, paid in cash in full on the DDTL Closing Date and netted from the proceeds of the Initial DDTL Loans borrowed on the DDTL Closing Date. The Initial DDTL Facility Credit Agreement provided for the payment by Intabex to the DDTL Facility Lenders of a non-refundable exit fee (the "Exit Fee") increasing in increments from 1.0 % for repayment on or before September 30, 2021 to 5.0 % for repayment after March 31, 2022 (whether prepaid voluntarily or paid following acceleration or at maturity). The obligations of Intabex under the Initial DDTL Facility Credit Agreement (and certain related obligations) were (a) guaranteed by the Parent Guarantors and Alliance One International Tabak B.V., then an indirect subsidiary of the Company, and each of the Company’s domestic and foreign subsidiaries that was or became a guarantor of borrowings under the Exit Term Loan Credit Agreement and (b) was secured by the pledge of all of the outstanding equity interests of (i) Alliance One Brasil Exportadora de Tabacos Ltda. ("AO Brazil"), which principally operates the Company’s leaf tobacco operations in Brazil, and (ii) Alliance One International Tabak B.V., which owned a 0.001 % interest of AO Brazil. The Initial DDTL Credit Facility Agreement was amended and restated by the DDTL Credit Agreement, which established a $ 100,000 term loan credit facility (the "DDTL Term Loan Facility") and required that Intabex use the net proceeds of the DDTL Term Loans made thereunder and other funds to repay in full its obligations under the Initial DDTL Facility Credit Agreement, including the payment of fees and expenses incurred in connection with repaying borrowings under the Initial DDTL Facility and incurring the DDTL Term Loans under the DDTL Credit Agreement. The DDTL Credit Agreement provided for a 2.0 % fee due with respect to any principal payment made after the one-year anniversary of the incurrence of the DDTL Term Loans, including a payment made at maturity. Interest on the outstanding principal amount of the DDTL Term Loans accrued at an annual rate of SOFR plus 7.5 %, subject to a SOFR floor of 1.0 %, for "SOFR loans" or, for loans that are not SOFR loans, at an annual rate of an alternate base rate (as specified in the DDTL Credit Agreement and subject to a specified floor) plus 6.5 %. Pursuant to the DDTL Credit Agreement, the DDTL Facility Lenders received a non-refundable commitment fee equal to 3.0 % of the aggregate commitments under the DDTL Term Loan Facility and a closing fee equal to 1.0 % of the aggregate commitments under the DDTL Term Loan Facility, as original issue discount. Under the DDTL Credit Agreement, the obligations of Intabex under the Amended Credit Agreement (and certain related obligations) continued to be guaranteed and secured by the same guarantors of, and the same collateral securing, Intabex’s obligations under the Initial DDTL Facility Credit Agreement. The DDTL Term Loans were exchanged upon consummation of the DDTL Facility Exchange on February 6, 2023. The Initial DDTL Credit Facility Agreement and the amendments thereto (including the DDTL Credit Agreement), any and all borrowings thereunder, the related guaranty transactions, the Support Agreement, the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange, 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. On December 30, 2021, the Investor-Affiliated Funds received $ 14,991 of the repayment of $ 15,375 principal amount of the Initial DDTL Loans. In connection with the effectiveness of the DDTL Credit Agreement on July 28, 2022, in addition to the deemed repayment of the Initial DDTL Loans, the Investor-Affiliated Funds received $ 5,119 of the aggregate $ 5,250 in exit fee payments from the repayment of the principal amount under the Initial DDTL Facility. In addition, the Investor-Affiliated Funds received in the aggregate $ 3,900 of the total $ 4,000 in commitment and closing fees with respect to the DDTL Credit Agreement, which were reflected as original issue discount, paid to all DDTL Facility Lenders in connection with the aggregate 77 $ 97,500 principal amount of the DDTL Term Loans made by them of the total $ 100,000 aggregate principal amount of the DDTL Term Loans made by all DDTL Facility Lenders. Accrued expenses and other current liabilities as presented in the consolidated balance sheets as of March 31, 2024 and 2023, includes $ 4,239 and $ 3,653 , respectively, of interest payable to Investor-Affiliated Funds and CI Investments, Inc. ("CI Investments"), which is also a beneficial owner of greater than five percent of the Company's common stock. Interest expense as presented in the consolidated statements of operations includes $ 40,909 , $ 35,649 , and $ 32,579 for the years ended March 31, 2024, 2023, and 2022, respectively, that relates to the Investor-Affiliated Funds and CI Investments. The holders of senior debt that are parties to the Debt Repurchase Agreement entered into on March 21, 2024 are funds affiliated with the Monarch Investor and of which the Monarch Investor is the investment advisor. The Company paid a total of $ 62,339 , which includes payment for accrued and unpaid interest and specified customary fees, to purchase from such funds the $ 77,922 aggregate principal amount of 2027 Notes in the transaction pursuant to the Debt Repurchase Agreement completed on March 28, 2024. The Debt Repurchase Agreement and the transactions contemplated thereby, including the exercise by Pyxus Holdings of its right to purchase the Pyxus Term Loans and additional 2027 Notes thereunder, 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. 28. Segment Information The following summarizes segment information, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the consolidated financial statements: Years Ended March 31, 2024 2023 2022 Sales and other operating revenues: Leaf $ 2,029,615 $ 1,900,558 $ 1,627,238 All Other 2,944 14,323 12,624 Consolidated sales and other operating revenues $ 2,032,559 $ 1,914,881 $ 1,639,862 Segment operating income (loss): Leaf $ 153,207 $ 117,056 $ 106,159 All Other ( 11,221 ) ( 18,593 ) ( 24,225 ) Segment operating income 141,986 98,463 81,934 Restructuring and asset impairment charges 4,799 4,685 8,031 Goodwill impairment — — 32,186 Consolidated operating income $ 137,187 $ 93,778 $ 41,717 March 31, 2024 Leaf All Other Total Segment assets $ 1,616,486 $ 41,427 $ 1,657,913 Trade and other receivables, net 187,083 336 187,419 Equity in net assets of investee companies 94,609 6,636 101,245 Depreciation and amortization 17,767 1,483 19,250 Capital expenditures 18,062 2,973 21,035 78 March 31, 2023 Leaf All Other Total Segment assets $ 1,544,798 $ 37,665 $ 1,582,463 Trade and other receivables, net 199,237 411 199,648 Equity in net assets of investee companies 93,754 6,985 100,739 Depreciation and amortization 16,157 2,980 19,137 Capital expenditures 13,565 2,390 15,955 The following summarizes geographic information for sales and other operating revenues by destination of the product shipped: Years Ended March 31, 2024 2023 2022 Sales and Other Operating Revenues: China $ 362,778 $ 338,174 $ 280,945 Indonesia 215,491 170,492 110,009 United States 192,745 220,266 209,953 United Arab Emirates 182,687 182,306 82,070 Belgium (1) 156,085 132,456 89,748 South Korea 74,665 49,504 48,394 Russia 70,794 20,175 57,808 Other 777,314 801,508 760,935 Total $ 2,032,559 $ 1,914,881 $ 1,639,862 (1) The Belgium destination represents a customer-owned storage and distribution center from which the tobacco will be shipped on to manufacturing facilities. The following summarizes the customers, including their respective affiliates, that account for 10% or more of total sales and other operating revenues for the respective periods, as indicated by an "x": Years Ended March 31, 2024 2023 2022 British American Tobacco x x China National Tobacco Corporation x x x Japan Tobacco International x Philip Morris International Inc. x x x The following summarizes geographic information for property, plant, and equipment by location: March 31, 2024 2023 Property, Plant, and Equipment, Net: Brazil $ 31,455 $ 29,163 Malawi 28,400 31,213 Zimbabwe 22,861 21,703 United States 21,429 21,945 Other 11,565 12,006 Jordan 10,664 11,352 Tanzania 7,784 6,016 Total $ 134,158 $ 133,398 79 29. Subsequent Events Debt Repurchase On April 12, 2024, Pyxus Holdings exercised its right under the Debt Repurchase Agreement to purchase from funds affiliated with the Monarch Investor $ 34,191 of aggregate principal amount of the 2027 Notes for $ 26,327 , a 23.0 % discount to par value, and $ 10,345 aggregate principal amount of the Pyxus Term Loans for $ 9,104 , a 12.0 % discount to par value. On May 31, 2024, a total of $ 9,435 was paid to retire $ 10,345 of aggregate principal amount of the Pyxus Term Loans, and included payment for accrued and unpaid interest through the day prior to payment. Equity-Based Compensation On May 10, 2024, the time-vesting restricted stock units granted under the Incentive Plan that were outstanding at March 31, 2024 were amended to extend the period by which the Listing Condition must be satisfied for the vesting of such restricted stock units from March 31, 2028 to March 31, 2031 and to provide that the Listing Condition shall be deemed to be satisfied on March 31, 2031 notwithstanding that the Company’s common stock has not been listed by that date on a national securities exchange or on any foreign securities exchange and, upon the occurrence of a "Change in Control" (as defined in the Incentive Plan) as a result of a merger, consolidation, share exchange or sale of all or substantially all of the assets of the Company, such restricted stock units would vest. On May 10, 2024, the performance-based restricted stock units granted under the Incentive Plan that were outstanding at March 31, 2024 were terminated upon certification that actual performance for the three-year period ended March 31, 2024 was below the threshold level for the issuance of any shares with respect to such restricted stock units. Securitized Receivables In May 2024, the investment limit of the Finacity Facility was increased from $ 100,000 to $ 120,000 of trade receivables and the existing arrangement was extended to May 31, 2025. In May 2024, the investment limit of the second facility was increased from $ 110,000 to $ 130,000 of trade receivables and the existing arrangement was extended to April 1, 2025. 80 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Pyxus International, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Pyxus International, Inc. and subsidiaries (the "Company") as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended March 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Income Taxes — Accounting for Uncertainty in Income Taxes — Refer to Note 1 and Note 6 to the financial statements Critical Audit Matter Description The Company’s annual tax rate is based on its pre-tax income by jurisdiction, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties. The Company records unrecognized tax benefits in multiple jurisdictions and evaluates the future potential outcomes of tax positions, based upon interpretation of the country-specific tax law and the likelihood of future settlement. Conclusions on recognizing and measuring uncertain tax positions involved significant management estimates and judgment and included complex considerations of local tax laws and related regulations in the various jurisdictions in which the Company operates. We identified uncertain tax positions as a critical accounting matter because of the significant estimates and assumptions involved in recording uncertain tax positions. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our tax specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates. 81 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to management’s estimates and assumptions utilized in the Company’s determination of uncertain tax positions included the following, among others: • With the assistance of our income tax specialists, we read and evaluated management’s documentation, including relevant accounting policies, relevant authoritative tax literature, and information obtained by management from outside tax specialists and attorneys, that detailed the basis of uncertain tax positions. • With the assistance of our income tax specialists, we evaluated management’s judgement of the appropriate unit of account for unrecognized tax benefits and audited the measurement calculations, as applicable. • We challenged the reasonableness of management’s judgments regarding the future resolution of uncertain tax positions, through evaluating the technical merits of uncertain tax positions by considering how tax law, including statutes, regulations, and case law, impacted management’s judgments and through consideration of the Company’s history of settlements. • For uncertain tax positions that had not been settled, we evaluated whether management had appropriately considered new information that could significantly change the recognition or measurement of uncertain tax positions through evaluation of correspondence with taxing authorities and evaluation of changes to issued guidance. /s/ Deloitte & Touche LLP Raleigh, North Carolina June 6, 2024 We have served as the Company’s auditor since its fiscal 2006. 82 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.