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Item 8. Financial Statements and Supplementary Data

2025-06-10 compared with 2024-06-06 · 316 added, 320 removed, 1308 unchanged (33% of the section changed)

18 unchanged sentences

Restructuring and asset impairment charges 2,259 4,799 4,685

Goodwill impairment — — 32,186

Operating income 153,317 137,187 93,778

Gain on debt retirement 8,178 15,914 —

Loss on deconsolidation/disposition of subsidiaries — — 648

Loss on pension settlement — 12,008 2,588

(Gain) loss on debt retirement ( 15,914 ) — 1,997

Interest expense, net 128,041 125,620 113,164

7 unchanged sentences

Earnings (loss) per share:

Basic and diluted $ 0.11 $ ( 1.57 ) $ ( 3.28 )

Basic $ 0.59 $ 0.11 $ ( 1.57 )

Diluted $ 0.59 $ 0.11 $ ( 1.57 )

Weighted average number of shares outstanding:

Basic and diluted 25,000 25,000 25,000

Basic 25,643 25,000 25,000

Diluted 25,667 25,000 25,000

See "Notes to Consolidated Financial Statements"

5 unchanged sentences

Net income (loss) $ 16,533 $ 3,184 $ ( 38,237 )

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment ( 353 ) 700 2,481

1 unchanged sentence

Cash flow hedges 132 ( 2,860 ) ( 2,777 )

Total other comprehensive income, net of tax 2,259 1,748 10,527

Total other comprehensive (loss) income, net of tax ( 471 ) 2,259 1,748

Total comprehensive income (loss) 16,062 5,443 ( 36,489 )

47 unchanged sentences

Authorized shares ( 250,000 for all periods)

Issued and outstanding shares ( 25,000 for all periods)

Issued and outstanding shares ( 24,608 and 25,000 as of March 31, 2025 and 2024, respectively)

$ 392,899 $ 389,789

11 unchanged sentences

Attributable to Pyxus International, Inc.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income

(in thousands) Common

7 unchanged sentences

Balance, March 31, 2024 $ 389,789 $ ( 255,291 ) $ ( 5,692 ) $ 12,766 $ 712 $ 4,539 $ 146,823

Net income (loss) — 804 — — — ( 34 ) 770

Other comprehensive income, net of tax — — 707 — 862 — 1,569

Net income — 4,642 — — — 310 4,952

Equity-based compensation 3,031 — — — — — 3,031

Other comprehensive income (loss), net of tax — — 543 — ( 2,237 ) — ( 1,694 )

Balance, June 30, 2024 $ 392,820 $ ( 250,649 ) $ ( 5,149 ) $ 12,766 $ ( 1,525 ) $ 4,849 $ 153,112

Net income (loss) — 8,095 — — — ( 199 ) 7,896

Other — — — — — 493 493

Other comprehensive loss, net of tax — — ( 1,545 ) — ( 1,000 ) — ( 2,545 )

Net loss — ( 3,227 ) — — — ( 46 ) ( 3,273 )

Dividends — — — — — ( 225 ) ( 225 )

Equity-based compensation 601 — — — — — 601

Share repurchases ( 1,000 ) — — — — — ( 1,000 )

Other comprehensive income, net of tax — — 278 — 1,266 — 1,544

Balance, September 30, 2024 $ 392,421 $ ( 253,876 ) $ ( 4,871 ) $ 12,766 $ ( 259 ) $ 4,578 $ 150,759

Net income — 18,898 — — — 512 19,410

Other ( 501 ) — — — — 8 ( 493 )

Dividends paid — — — — — ( 450 ) ( 450 )

Other comprehensive income (loss), net of tax — — 2,185 3,511 ( 1,288 ) — 4,408

Equity-based compensation 267 — — — — — 267

Other comprehensive loss, net of tax — — ( 976 ) — ( 2,453 ) — ( 3,429 )

Balance, December 31, 2024 $ 392,688 $ ( 234,978 ) $ ( 5,847 ) $ 12,766 $ ( 2,712 ) $ 5,090 $ 167,007

Net (loss) income — ( 5,147 ) — — — 591 ( 4,556 )

Equity-based compensation 211 — — — — — 211

Other comprehensive (loss) income, net of tax — — ( 198 ) ( 250 ) 3,556 — 3,108

5 unchanged sentences

Attributable to Pyxus International, Inc.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income

(in thousands) Common

7 unchanged sentences

Balance, March 31, 2023 $ 390,290 $ ( 257,954 ) $ ( 6,392 ) $ 8,335 $ 3,572 $ 3,979 $ 141,830

Net (loss) income — ( 14,663 ) — — — 158 ( 14,505 )

Other — — ( 3,052 ) ( 3,052 )

Other comprehensive income (loss), net of tax — — 947 — ( 1,503 ) — ( 556 )

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 loss — ( 1,537 ) — — — ( 13 ) ( 1,550 )

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 (loss) income — ( 2,333 ) — — — 96 ( 2,237 )

Net income — 3,835 — — — 344 4,179

Other ( 501 ) — — — — 8 ( 493 )

Dividends — — — — — ( 450 ) ( 450 )

Other comprehensive income (loss), net of tax — — 2,185 3,511 ( 1,288 ) — 4,408

1 unchanged sentence

Net (loss) income — ( 10,071 ) — — — 410 ( 9,661 )

Other comprehensive income, net of tax — — 1,480 3,647 865 37 6,029

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

14 unchanged sentences

Balance, March 31, 2022 $ 390,290 $ ( 218,813 ) $ ( 8,873 ) $ 6,328 $ 6,349 $ 6,090 $ 181,371

Net loss — ( 11,508 ) — — — ( 120 ) ( 11,628 )

Net (loss) income — ( 14,663 ) — — — 158 ( 14,505 )

Other — — — — — ( 3,052 ) ( 3,052 )

Other comprehensive income, net of tax — — 689 — 4,328 — 5,017

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 — — — — — ( 88 ) ( 88 )

Other comprehensive loss, net of tax — — ( 4,801 ) ( 1,562 ) ( 1,768 ) — ( 8,131 )

1 unchanged sentence

Net (loss) income — ( 2,333 ) — — — 96 ( 2,237 )

Other ( 799 ) — — — — ( 155 ) ( 954 )

Other comprehensive loss, net of tax — — ( 1,753 ) ( 35 ) ( 1,550 ) — ( 3,338 )

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 (loss) income, net of tax — — ( 1,569 ) 6,334 9,092 ( 10 ) 13,847

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

10 unchanged sentences

Debt amortization/interest 11,235 8,559 18,466

(Gain) loss on debt retirement ( 15,914 ) — 1,512

Gain on debt retirement ( 8,178 ) ( 15,914 ) —

Loss on foreign currency transactions 4,922 4,009 6,028

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

Equity-based compensation 4,110 — —

Income from unconsolidated affiliates, net of dividends 4,317 ( 506 ) ( 5,835 )

1 unchanged sentence

Trade and other receivables ( 208,374 ) ( 167,600 ) ( 111,932 )

Inventories and advances to tobacco suppliers ( 136,010 ) ( 21,110 ) ( 31,461 )

Inventories and advances to suppliers 156,309 ( 136,010 ) ( 21,110 )

Deferred items 1,052 3,240 ( 14,758 )

Recoverable income taxes ( 2,689 ) 2,353 ( 2,603 )

Payables and accrued expenses ( 49,190 ) 17,531 5,147

1 unchanged sentence

Prepaid expenses 8,943 ( 4,506 ) 4,761

Income taxes ( 8,207 ) 13,116 ( 2,799 )

Income taxes payable 2,719 ( 8,207 ) 13,116

Other operating assets and liabilities ( 13,140 ) 1,425 8,477

5 unchanged sentences

Collections from beneficial interests in securitized trade receivables 188,312 175,911 165,262

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 1,584 269 2,930

1 unchanged sentence

Financing activities:

Net proceeds from short-term borrowings $ 122,483 $ 5,234 $ 9,208

Proceeds from DDTL facility — — 117,600

Net (repayments) proceeds from short-term borrowings $ ( 102,550 ) $ 122,483 $ 5,234

Repayment of DDTL facility — — ( 110,250 )

5 unchanged sentences

Debt issuance costs ( 9,106 ) ( 11,751 ) ( 7,686 )

Fees paid to refinance the DDTL facility — ( 4,000 ) —

Fees paid to retire or exchange debt ( 269 ) ( 1,575 ) —

Other, net 217 171 ( 5,575 )

Net cash provided by (used in) financing activities $ 25,561 $ ( 83,000 ) $ 123,260

Net cash (used in) provided by financing activities $ ( 167,261 ) $ 25,561 $ ( 83,000 )

Effect of exchange rate changes on cash ( 4,240 ) ( 9,156 ) 3,472

(Decrease) increase in cash, cash equivalents, and restricted cash ( 39,116 ) ( 62,405 ) 103,601

Decrease in cash, cash equivalents, and restricted cash ( 14,249 ) ( 39,116 ) ( 62,405 )

Cash and cash equivalents at beginning of period 92,569 136,733 198,777

11 unchanged sentences

Notes to Consolidated Financial Statements

(in thousands, except per share data) Page No.

Basis of Presentation and Summary of Significant Accounting Policies

2 unchanged sentences

Other Expense, Net

Restructuring and Asset Impairment Charges

Earnings (Loss) Per Share

2 unchanged sentences

Advances to Suppliers, Net

Acquisitions and Dispositions

Equity Method Investments

Variable Interest Entities

Intangible Assets, Net and Goodwill

Intangible Assets, Net

Property, Plant, and Equipment, Net

17 unchanged sentences

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.

GAAP") and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission applicable to annual reporting on Form 10-K.

Principles of Consolidation

12 unchanged sentences

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.

The Company is not the primary beneficiary of most of these entities as it does not have the power to direct the activities that most significantly impact the economic performance of these entities, due to these entities’ management and board of directors’ structure.

As a result, most 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.

9 unchanged sentences

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.

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 unrecognized tax benefits and related interest and penalties.

Segment Information

1 unchanged sentence

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

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.

The Company's CODM, comprised of both the chief executive

officer and the chief financial officer, regularly evaluates performance using operating income as the measure of segment profitability.

This measure is utilized during the budgeting and forecasting process to determine future operating plans and enable strategic decision making for the allocation of capital.

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:

The All Other category is included for purposes of reconciliation of respective balances for the Leaf segment to the consolidated financial statements.

The Company has seven operating segments organized by geographic area and product category that are aggregated into one reportable segment for financial reporting purposes:

The All Other category does not meet the quantitative and qualitative thresholds to be reportable and are included for purposes of reconciliation of respective balances for the Leaf segment to the consolidated financial statements.

Revenue Recognition

3 unchanged sentences

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.

For processing and related 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.

The Company does not disclose information related to its unsatisfied performance obligations with an expected original 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

5 unchanged sentences

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.

The Company estimates 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.

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.

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.

Taxes Collected from Customers

4 unchanged sentences

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.

Advances From Customers

On occasion, the Company receives advances and deposits from customers for future promises to deliver goods or services.

These cash advance payments are refundable to the customer without penalty.

The balance in advances from customers is reduced as the Company satisfies performance obligations under the contract with the customer and the criteria for revenue recognition is met.

Income taxes are accounted for under the asset and liability method.

8 unchanged sentences

Penalties and interest related to income taxes, if incurred, are included in income tax expense.

Earnings (Loss) Per Share

The calculations of basic and diluted earnings per share are based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively.

Under the treasury stock method, restricted stock units will have a dilutive effect when the respective period's average market price of the Company's common stock exceeds the assumed exercise proceeds, and the average amount of cost not yet recognized.

Performance based stock units are included in diluted earnings per share if the performance targets have been met at the end of the reporting period.

Share-based payment awards that provide contingently issuable shares upon a performance or market condition are included in basic and diluted earnings per share only if the condition is met as of the end of the reporting period.

Cash and Cash Equivalents

4 unchanged sentences

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.

Costs of other inventory are determined by the first-in, first-out method, which include costs of packing materials, agricultural supplies such as seed, fertilizer, herbicides, and pesticides, and non-tobacco agricultural products.

Inventories are carried at the lower of cost or net realizable value ("LCM").

11 unchanged sentences

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.

Tobacco suppliers may not be able to settle the entirety of advances due each year.

In these situations, the Company may allow the farmers to deliver tobacco over future crop years to recover its advances.

8 unchanged sentences

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.

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 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

impairment of an intangible.

Events and changes in circumstance may either result in a revision in the estimated useful life or 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.

14 unchanged sentences

Repairs and maintenance costs are expensed as incurred.

The cost of major improvements are capitalized.

The cost of major improvements is 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.

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 several techniques, including quoted market prices or valuations, present value techniques based on estimates of cash flows, or multiples of earnings or revenue performance measures.

The Company's guarantees are primarily related to bank loans to suppliers for crop production financing.

4 unchanged sentences

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.

The fair value of the Company's guarantees is 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.

15 unchanged sentences

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.

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 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.

plans sponsored by certain subsidiaries cover certain current and former employees.

Postretirement Health and Life Insurance Benefits

7 unchanged sentences

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.

Portfolio performance is measured against investment objectives and objective benchmarks.

The portfolio objective is to exceed the actuarial return on assets assumption.

The Company is exploring partial risk transfers and/or full plan terminations.

The Company is exploring partial risk transfers and/or full plan terminations and is implementing a Liability Driven Investment ("LDI") strategy to maintain the high funded status and immunize the portfolio from excessive market volatility.

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.

2 unchanged sentences

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.

The Company’s plan assets primarily consist of cash and cash equivalents and real estate investments.

The Plan is transitioning to a LDI strategy, which will consist of high-quality sovereign and corporate bonds whose interest rate sensitivity matches that of the plans' liabilities.

Plan assets are measured at fair value annually on March 31, the measurement date.

2 unchanged sentences

• 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.

12 unchanged sentences

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 these facilities, 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.

7 unchanged sentences

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 and its subsidiaries periodically 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.

3 unchanged sentences

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.

The Company’s Board of Directors adopted the 2020 Incentive Plan on November 18, 2020 (the "Incentive Plan"), and on March 21, 2024 and March 19, 2025, 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.

The Company recognizes forfeitures of equity-based awards as they occur.

Equity-based compensation expense is included in selling, general, and administrative expenses in the consolidated statements of operations.

New Accounting Standards

Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-07, Segment Reporting:

3 unchanged sentences

• 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;

• 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.

The Company adopted the annual period disclosure requirements for its fiscal year ended March 31, 2025, which are included in " Note 1.

Basis of Presentation and Summary of Significant Accounting Policies " and " Note 26.

Segment Information ".

The interim period disclosure requirements are effective beginning April 1, 2025.

The adoption of this new accounting standard resulted in additional disclosures for segment reporting, and did not have an impact on the Company's financial condition, results of operations, or cash flows.

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

6 unchanged sentences

The Company is currently evaluating the impact that this new accounting standard will have on its income tax disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses , which requires a tabular disclosure of relevant expense captions into prescribed natural expense categories.

The annual disclosure requirements are effective for the Company’s fiscal year ending March 31, 2028, and the interim period disclosure requirements are effective beginning April 1, 2028.

Early adoption is permitted.

This new standard will result in additional disclosures within the footnotes to the financial statements and is not expected to have an impact on the Company’s financial condition, results of operations, or cash flows.

Revenue Recognition

2 unchanged sentences

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.

All Other revenue is primarily composed of revenue from the sale of 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 :

3 unchanged sentences

Processing and other revenues 135,877 117,177 88,388

Total sales and other operating revenues 2,029,615 1,900,558 1,627,238

Total sales and other operating revenues 2,944 14,323 12,624

Leaf sales and other operating revenues 2,470,984 2,029,615 1,900,558

All Other sales and other operating revenues 10,276 2,944 14,323

Total sales and other operating revenues $ 2,481,260 $ 2,032,559 $ 1,914,881

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Additions 2,010 6,191 4,680

Payments ( 5,228 ) ( 3,460 ) ( 2,286 )

Payments and other adjustments ( 2,887 ) ( 5,228 ) ( 3,460 )

Balance, end of period $ 2,436 $ 3,313 $ 2,350

Contract Balances

The following summarizes activity in the allowance for expected credit losses:

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$ 19,565 $ 13,121 $ 10,434

Foreign currency (losses) gains ( 251 ) 1,057 ( 2,776 )

Foreign currency (gains) losses ( 2,121 ) 251 ( 1,057 )

Note receivable write-off — — 2,050

Gain on sale of fixed assets ( 2,423 ) ( 2,300 ) ( 1,389 )

Miscellaneous income (expense), net 1,633 ( 985 ) 1,689

Miscellaneous expense (income), net 1,389 ( 1,633 ) 985

Total $ 16,410 $ 9,439 $ 11,023

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Securitized Receivables " for additional information.

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

Income Tax Provision

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Total Current 30,709 29,645 34,283

Federal 968 ( 592 ) ( 243 )

( 10,307 ) 968 ( 592 )

State ( 155 ) ( 9 ) 2

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Income tax expense $ 25,053 $ 27,281 $ 34,127

(1) Current federal expense for fiscal year 2023 is primarily due to the Debt Exchange Transactions.

(1) Current federal expense for fiscal year 2023 was primarily due to the Debt Exchange Transactions.

Refer to " Note 15.

Debt Arrangements " for further details regarding the Debt Exchange Transactions.

(2) Deferred federal expense for fiscal year 2025 was primarily due to release of a valuation allowance in the U.S.

from improved profitability.

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.

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earnings 7,759 9,264 6,389

Increase (decrease) in reserves for uncertain tax positions 8,120 2,397 ( 315 )

Tax on unremitted foreign earnings ( 2,066 ) 1,291 1,777

Increase in reserves for uncertain tax positions 8,789 8,120 2,397

Withholding tax expense 2,526 544 3,058

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Nondeductible interest 2,969 1,340 2,559

Waived intercompany interest expense — — 3,960

Exchange effects and currency translation 9,367 ( 5,110 ) 3,101

Goodwill impairment — — 7,148

Change in valuation allowance (1)

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Income tax expense $ 25,053 $ 27,281 $ 34,127

(1) The increase in valuation allowance, is presented without exchange effects and currency translation, for the years ended March 31, 2024, 2023, and 2022.

(1) The change in valuation allowance, is presented without exchange effects and currency translation, for the years ended March 31, 2025, 2024, and 2023.

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.

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Debt Arrangements " for further details regarding the Debt Exchange Transactions.

For the year ended March 31, 2025, the improvement in the valuation allowance expense relates primarily to reductions in certain U.S.

and African valuation allowances due to improved profitability.

The following summarizes deferred tax assets (liabilities):

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Original issue discount 10,439 14,714

14,714 20,326

Reserves and accruals 22,691 21,662

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Valuation allowance ( 60,302 ) ( 70,391 )

( 70,391 ) ( 59,506 )

Total deferred tax assets $ 42,351 $ 36,767

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Total deferred tax liabilities $ ( 37,599 ) $ ( 37,504 )

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.

Net deferred tax assets (liabilities) $ 4,752 $ ( 737 )

The following summarizes the change in the valuation allowance for deferred tax assets:

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Balance at March 31, 2025 $ 60,302

(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.

(1) The change in valuation allowance, is presented without exchange effects and currency translation, for the years ended March 31, 2025, 2024, and 2023.

For the years ended March 31, 2025, 2024, and 2023 respectively, the change was primarily driven by a reduction in the valuation allowance in the U.S., an increase in the valuation allowances across various African jurisdictions, and an increase in the valuation allowance related to $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 15.

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Impact of changes in exchange rates ( 210 ) ( 2,553 )

Reduction of statute of limitation expirations ( 3,699 ) ( 708 )

Balance at March 31 (1)

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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.

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 believes it is reasonably possible that its unrecognized tax benefits may decrease by approximately $ 2,919 within the next twelve months from lapses in statutes of limitations.

The Company and its subsidiaries file a U.S.

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2025 2024 2023

Basic and diluted earnings (loss) per share:

Net income (loss) attributable to Pyxus International, Inc.

$ 15,166 $ 2,663 $ ( 39,141 )

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 )

Basic weighted average shares outstanding $ 25,643 25,000 25,000

Dilutive equity awards 24 — —

Diluted weighted average shares outstanding 25,667 25,000 25,000

Earnings (loss) per share:

Basic $ 0.59 $ 0.11 $ ( 1.57 )

Diluted $ 0.59 $ 0.11 $ ( 1.57 )

Restricted Cash

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Total $ 7,290 $ 7,224

(1) Includes grants from a government entity.

See " Note 23.

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Total current and long-term $ 35,725 $ 22,218

(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 $ 17,066 and $ 16,905 for the year ended March 31, 2025 and 2024, respectively.

Unrecoverable advances and other costs capitalized, or to be capitalized into the current crop, were $ 11,833 and $ 7,975 as of March 31, 2025 and 2024, respectively.

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.

Equity Method Investments

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India Purchase and process tobacco 49 % ( 5,770 )

China Brasil Tobacos Exportadora SA Brazil Purchase and process tobacco 49 % 43,000

China Brasil Tabacos Exportadora S.A.

Brazil Purchase and process tobacco 49 % 43,000

Oryantal Tütün Paketleme Sanayi ve Ticaret A.Ş.

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Produce flavor formulations and consumable e-liquids 50 % 4,589

Siam Tobacco Export Company Thailand Purchase and process tobacco 49 % ( 6,098 )

Siam Tobacco Export Corporation Ltd.

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.

2 unchanged sentences

2025 2024 2023

Operations statement:

Statement of Operations

Sales $ 611,152 $ 505,262 $ 489,532

1 unchanged sentence

Net income 16,851 33,101 40,447

Company's dividends received 14,486 12,677 9,671

Balance sheet:

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Investments in variable interest entities $ 90,239 $ 94,609

Receivables with variable interest entities — 2,617

Guaranteed amounts to variable interest entities (not to exceed) 15,995 11,113

Intangible Assets, Net and Goodwill

Intangible Assets, Net

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These estimates will change as new costs are incurred and until the software is placed into service.

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.

The following summarizes lease costs for operating leases:

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(1) Weighted average rate for the trailing twelve months ended March 31, 2025 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 .

(2) Balance of $ 145,820 is net of a debt discount of $ 2,519 .

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Total repayment at maturity is $ 120,205 .

(6) Primarily foreign seasonal lines of credit.

(5) Primarily seasonal lines of credit.

Outstanding Senior Secured Debt

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("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.

Refer to " Note 27.

Subsequent Events " for additional information regarding the Fourth Amendment to the ABL Credit Facility.

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.

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Weighted average borrowings outstanding under the ABL Credit Facility during the fiscal year ended March 31, 2025 were $ 56,332 .

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.

The ABL Credit Facility permits both base rate borrowings and borrowings based upon the Secured Overnight Financing Rate ("SOFR").

Borrowings under the ABL Credit Facility bear interest at an annual rate equal to one, three, or six-month reserve-adjusted SOFR 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 .

As of March 31, 2025, there are no amounts outstanding under the ABL Credit Facility.

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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.

With respect to base rate loans, accrued interest is payable monthly in arrears and, with respect to SOFR 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

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.

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

• enter into transactions with affiliates;

• 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.

On March 31, 2025, the Borrowers were in compliance with the covenants under the ABL Credit Agreement.

Intabex Term Loans

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

The Intabex Term Loan Credit Agreement contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ ability to, among other things, incur additional indebtedness or issue disqualified

stock or preferred stock;

make investments;

5 unchanged sentences

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.

On March 31, 2025, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with the 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).

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.

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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.

On March 31, 2025, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with the covenants under the Pyxus Term Loan Credit Agreement.

8.50 % Senior Secured Notes due 2027

1 unchanged sentence

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.

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

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

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

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

At any 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;

5 unchanged sentences

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 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.

On March 31, 2025, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with the covenants under the 2027 Notes Indenture.

Guarantees and Collateral

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(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.

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.

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

Pursuant to the terms of the

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

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

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

Pursuant to the ABL/New Secured Debt Intercreditor Agreement, Pyxus Holdings’ collective obligations under the New Secured Debt, the guarantees thereof and certain related obligations have first-priority senior liens on the collateral that is not ABL Priority Collateral, including owned material real property in the U.S., 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.

3 unchanged sentences

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.

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.

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

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

• approximately 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.

Pursuant to the Support Agreement, the Supporting Holders agreed to participate in the DDTL Facility Exchange, the Exit Facility Exchange, and the Notes Exchange, which were completed on February 6, 2023.

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

8 unchanged sentences

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.

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.

On March 21, 2024, Pyxus Holdings entered into an agreement (the "Debt Repurchase Agreement") with funds affiliated with the Monarch Investor to purchase $ 77,922 of aggregate principal amount of their holdings in the 2027 Notes for $ 60,000 , a 23.0 % discount to par value, plus accrued and unpaid interest and specified customary fees.

The purchase of $ 77,922 aggregate principal amount of the 2027 Notes for a total of $ 62,339 (including fees and accrued and unpaid interest) was completed on March 28, 2024.

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 $ 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.

On April 12, 2024, Pyxus Holdings exercised its right to complete these repurchases by September 30, 2024.

On May 31, 2024, Pyxus Holdings completed the purchase of $ 10,345 of aggregate principal amount of the Pyxus Term Loans for a total of $ 9,435 (including accrued and unpaid interest).

On August 2, 2024, Pyxus Holdings completed the purchase of $ 34,191 of aggregate principal amount of the 2027 Notes for a total of $ 26,707 (including accrued and unpaid interest).

The Debt Repurchase Agreement and the transactions contemplated 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.

Refer to " Note 25.

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Other Outstanding Debt

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.

The 2024 Notes bore 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.

On August 26, 2024, upon maturity of the 2024 Notes, Pyxus Holdings paid $ 20,442 , which included $ 51 for accrued and unpaid interest, to retire the 2024 Notes.

Seasonal Lines of Credit

Excluding its long-term credit agreements, the Company has typically financed its foreign operations with committed and 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.

For uncommitted facilities, 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.

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

At March 31, 2025, the total borrowing capacity under individual seasonal lines of credit range up to $ 170,000 .

At March 31, 2025 and 2024, the Company was permitted to borrow under seasonal lines of credit, including letters of credit, up to a total of $ 918,372 and $ 776,756 , 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, 2025 and 2024 was 9.4 % and 9.8 %, 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.

Certain of the seasonal lines of credit with aggregate outstanding borrowings at March 31, 2025 and 2024 of $ 93,243 and $ 119,964 , respectively, are secured by trade receivables and inventories as collateral.

At March 31, 2025 and 2024, respectively, $ 542 and $ 516 of cash was held on deposit as a compensating balance.

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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

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.

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.

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.

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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.

The Company recorded a net (loss) gain of $( 2,411 ), $ 6,356 , and $ 6,764 from its derivative financial instruments in cost of goods and services sold for the years ended March 31, 2025, 2024, and 2023, respectively.

As of March 31, 2025 and 2024, accumulated other comprehensive income includes $ 132 and $( 2,860 ), respectively, net of $( 92 ) and $ 1,021 of tax, respectively, for net unrealized gains and (losses) related to designated cash flow hedges.

As of March 31, 2025, the Company recorded current derivative assets of $ 982 , included within other current assets, and current derivative liabilities of $ 57 , included within accrued expenses and other current liabilities.

There were no derivative assets or liabilities outstanding as of March 31, 2024.

Refer to " Note 19.

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Financial liabilities:

Derivative financial instruments $ 57 $ — $ 57 $ — $ — $ —

Long-term debt (1)

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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.

The primary inputs to the valuation include forward yield curves, implied volatilities, interest rates, and credit valuation adjustments.

Level 3 measurements

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Settlements ( 154,659 ) ( 354 ) ( 4,801 )

Additions — 305 —

Losses recognized in earnings ( 12,056 ) — ( 2,548 )

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Ending balance at March 31, 2025 $ 29,354 $ 12 $ 6,459

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.

Total losses included in earnings for the years ended March 31, 2025, 2024 and 2023 were $ 1,633 , $ 1,027 , and $ 659 on securitized beneficial interests and were attributable to changes in unrealized losses relating to assets held at the respective dates.

Gains and losses included in earnings are reported in other expense, net.

1 unchanged sentence

The following summarizes significant unobservable inputs and the valuation techniques utilized:

Fair value at March 31, 2024 Valuation Technique Unobservable Input Range (Weighted Average)

Valuation Technique Unobservable Input Range (Weighted Average)

Securitized Beneficial Interests Discounted Cash Flow Discount Rate 3.0 % to 6.9 %

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Guarantees Historical Loss Historical Loss 0.7 % to 37.3 %

Fair value at March 31, 2023 Valuation Technique Unobservable Input Range (Weighted Average)

Valuation Technique Unobservable Input Range (Weighted Average)

Securitized Beneficial Interests Discounted Cash Flow Discount Rate 5.6 % to 7.9 %

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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,

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 assets and the reclassification of $ 3,511 unrecognized net pension losses, net of $ 1,170 tax benefit, 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 U.S.

Pension Plan") during the year ended March 31, 2023.

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Interest cost 1,679 1,038 2,717

Actuarial (gains) losses ( 538 ) 7,743 7,205

Actuarial losses (gains) 838 ( 1,132 ) ( 294 )

Plan settlements — ( 224 ) ( 224 )

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Plan settlements — ( 224 ) ( 224 )

Effects of currency translation — 485 485

Benefits paid ( 3,334 ) ( 1,561 ) ( 4,895 )

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Interest cost 1,705 1,780 3,485

Plan amendments — 139 139

Actuarial gains ( 4,106 ) ( 10,220 ) ( 14,326 )

Actuarial (gains) losses ( 538 ) 7,743 7,205

Plan settlements — ( 29,957 ) ( 29,957 )

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Accumulated benefit obligation 32,877 33,694 5,448 5,816

Fair value of plan assets — — — —

(1) Certain of the Company's non-U.S.

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Post-retirement Total

Prior service credit $ 56 $ — $ 56

Prior service cost $ ( 82 ) $ — $ ( 82 )

Net actuarial gains 5,883 1,992 7,875

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Total change for 2024 $ 4,965 $ ( 534 ) $ 4,431

Prior service credit $ ( 82 ) $ — $ ( 82 )

Prior service cost $ ( 32 ) $ — $ ( 32 )

Net actuarial gains 11,738 1,209 12,947

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Rate of increase in future compensation Not applicable Not applicable Not applicable 10.42 % 5.72 % 7.31 %

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

Expected long-term rate of return on plan assets Not applicable Not applicable Not applicable 4.35 % 4.20 % 2.16 %

Interest crediting rate Not applicable Not applicable 4.28 % Not applicable Not applicable Not applicable

The following weighted average assumptions were used to determine the benefit obligations for the pension plans:

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Rate of increase in future compensation Not applicable Not applicable Not applicable 7.52 % 10.42 % 5.72 %

Interest crediting rate Not applicable Not applicable 4.28 % Not applicable Not applicable Not applicable

The following summarizes asset allocations and the percentage of the fair value of plan assets by asset category:

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Debt securities — % 36.0 %

Insurance contracts — % 50.9 %

Real estate and other investments 3.9 % 4.7 %

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The fair values for the pension plans by asset category are as fol lows:

Pension Plans March 31, 2024

Total Level 1

Cash and cash equivalents $ 374 $ 374

equities / equity funds 8,616 8,616

International equities / equity funds 4,290 4,290

fixed income funds 5,578 5,578

International fixed income funds 2,477 2,477

Real estate and other (1)

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.

Pension Plans March 31, 2023

Total Level 1 Level 2 Level 3

Pension Plans March 31, 2025 March 31, 2024

Total Level 1 Total Level 1

Cash and cash equivalents $ 21,538 $ 21,538 $ 374 $ 374

3 unchanged sentences

International fixed income funds — — 2,477 2,477

Global fixed income funds 26,472 — 26,472 —

Real estate and other (1)

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Effect of currency translation — ( 199 ) ( 199 )

Actuarial gains 160 472 632

Actuarial (gains) losses ( 177 ) 19 ( 158 )

Benefits paid ( 156 ) ( 143 ) ( 299 )

Benefit obligation, ending 3,371 1,386 4,757

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 $ ( 3,371 ) $ ( 1,386 ) $ ( 4,757 )

10 unchanged sentences

Effect of currency translation — 10 10

Actuarial gains ( 437 ) ( 288 ) ( 725 )

Actuarial losses 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 310 75 385

Benefits paid ( 310 ) ( 75 ) ( 385 )

Fair value of plan assets, ending $ — $ — $ —

Funded status of the plan $ ( 3,525 ) $ ( 1,580 ) $ ( 5,105 )

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Contributions $ 4,459 $ 4,395 $ 5,478

The following summarizes the expected benefit payments to be paid in future years, as of March 31, 2024:

The following summarizes the expected benefit payments to be paid in future fiscal years, as of March 31, 2025:

Pension Benefits Other Benefits

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At March 31, 2025, the assessment for intrastate trade tax credits taken is $ 2,299 and the total assessment including penalties and interest is $ 9,774 .

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.

In addition to the above-mentioned matter, 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.

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Balances at March 31, 2022 $ ( 8,873 ) $ 6,328 $ 6,349 $ 3,804

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

6 unchanged sentences

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):

Other comprehensive (loss) income before reclassifications ( 353 ) 62 ( 2,226 ) ( 2,517 )

Amounts reclassified to net income, net of tax — ( 312 ) 2,358 2,046

Other comprehensive (loss) income, net of tax ( 353 ) ( 250 ) 132 ( 471 )

Balances at March 31, 2025 $ ( 6,045 ) $ 12,516 $ 844 $ 7,315

The following summarizes amounts by component, reclassified from accumulated other comprehensive income to net income (loss):

Years Ended March 31, Affected Line Item in the Consolidated Statements of Operations

1 unchanged sentence

Settlement loss $ — $ 4,681 Loss on pension settlement

Actuarial loss 6,780 Interest expense

Actuarial (gain) loss ( 581 ) 6,780 Interest expense

Amortization of prior service cost 3 4 Interest expense

5 unchanged sentences

2025 2024 2023

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

Loss (gain) on forward foreign exchange contracts designated as cash flow hedges $ 3,185 $ ( 6,356 ) $ ( 6,764 ) Cost of goods and services sold;

selling, general, and administrative expenses (1)

Amounts reclassified from equity to the income statement, gross 3,185 ( 6,356 ) ( 6,764 )

Tax effects of amounts reclassified from accumulated other comprehensive income to net income (loss) ( 827 ) 1,798 2,237

Amounts reclassified from equity to the income statement, net $ 2,358 $ ( 4,558 ) $ ( 4,527 )

(1) For the year ended March 31, 2025, $ 2,411 was included in cost of goods and services sold and $ 774 was included in selling, general, and administrative expenses.

For the years ended March 31, 2024 and 2023, the gains were included in cost of goods and services sold.

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 fiscal year 2024, the Company partnered with the U.S.

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.

Following the U.S.

Executive Order titled "Reevaluating and Realigning U.S.

Foreign Aid" of January 20, 2025, the grant award was terminated effective February 25, 2025 and the Company is in the process of utilizing the remaining funds from USAID.

The termination of the cooperative agreement did not have a material impact on the Company's consolidated financial condition, results of operations, or cash flows.

During the years ended March 31, 2025 and 2024, the Company received $ 3,840 and $ 4,900 , respectively, in cash grants from USAID.

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.

On March 21, 2024 and March 19, 2025, 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 and to 3,612 shares (which amounts are presented in thousands), respectively.

Pursuant to the Incentive Plan, prior to May 10, 2024, the Company granted time-vesting restricted stock units, with the vesting of these restricted stock units being subject to continued employment or service through specified dates and the condition that the Company’s common stock be listed for trading on a national securities exchange or an approved foreign securities exchange by March 31, 2028 (the "Listing Condition").

On May 10, 2024 (the "Modification Date"), the restricted stock units granted under the Incentive Plan that were outstanding immediately prior to that date 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, regardless of whether the Company’s common stock has been listed by that date on a national securities exchange or foreign securities exchange and would vest earlier 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 (a "change-in-control event").

On the Modification Date, the amended Listing Condition was rendered nonsubstantive, and recipients of the outstanding restricted stock units had satisfied the continued service requirement, meaning the then-outstanding restricted stock units were fully earned for vesting.

Performance-based stock units awarded under the Incentive Plan prior to the fiscal year ended March 31, 2025 provided for the issuance of shares based on satisfaction of performance criteria over a three-year measurement period 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.

Such performance-based restricted stock units were subject to an additional condition to vesting 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.

performance criteria for these performance-based stock units were not satisfied at the threshold level for the three-year measurement period ended March 31, 2024 and all such performance-based stock units were forfeited.

During the year ended March 31, 2025, the Company recognized total equity-based compensation expense of $ 4,110 , which is recorded in selling, general, and administrative expenses within the consolidated statements of operations.

The modified time-vesting restricted stock units accounted for $ 3,263 of the total equity-based compensation recognized year-to-date to reflect the cumulative catch-up required on the Modification Date.

No equity-based compensation expense was recognized in the years ended March 31, 2024 and 2023.

Restricted Stock Units

Restricted stock units granted under the Incentive Plan in the fiscal year ended March 31, 2025 are earned ratably, subject to continued employment, from the date of the award to March 31, 2027 for awards to employees and are earned, subject to continued service, from the date of the award to the earlier of August 15, 2025 or the Company's next annual shareholders meeting for awards to certain members of the Board of Directors of Pyxus.

Restricted stock units vest upon the earlier of March 31, 2031 or upon the occurrence of a change-in-control event or the listing of Pyxus' common stock in certain stock exchanges (a "liquidity event").

The following summarizes activity for restricted stock units:

(in thousands except grant date fair value) Restricted Stock Units Weighted Average Grant Date Fair Value Per Share

Nonvested, March 31, 2024 (1)

Granted 862 3.41

Canceled or forfeited ( 94 ) 3.50

Nonvested, March 31, 2025

(1) The weighted average grant date fair value per share is as of the Modification Date, the date at which these outstanding units were fully earned for vesting.

Unrecognized compensation costs for restricted stock units were $ 1,851 as of March 31, 2025 , and are expected to be recognized over a weighted average period of 1.96 years, representing the weighted average remaining service period related to the awards, subject to adjustments for actual forfeitures.

Performance-Based Stock Units

Performance-based stock units granted under the Incentive Plan in the fiscal year ended March 31, 2025 will vest if the per share price achieved in a liquidity event equals or exceeds the specified target level.

The amount of common stock shares to be issued after a liquidity event will range from 0 % to 200 % of the number of performance-based stock units granted, contingent upon the per share price achieved in the liquidity event and subject to continued employment through the date of the liquidity event.

A liquidity event was not probable as of March 31, 2025.

As a result, no equity-based compensation expense was recognized for the performance-based stock units in the year ended March 31, 2025 .

The following summarizes activity for performance-based stock units (at the target performance level):

(in thousands except grant date fair value) Performance-Based Stock Units Weighted Average Grant Date Fair Value Per Share

Nonvested, March 31, 2024

Granted 605 4.36

Canceled or forfeited (1)

Nonvested, March 31, 2025*

*Amounts may not equal totals due to rounding.

(1) On the Modification Date, the performance-based restricted stock units granted under the Incentive Plan that were outstanding at March 31, 2024 were canceled as the vesting requirements were not met.

Related Party Transactions

5 unchanged sentences

Purchases 214,341 204,193 158,140

Dividends received 12,449 14,486 12,677

The Company included the following related party balances in its consolidated balances sheets:

18 unchanged sentences

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.

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.

8 unchanged sentences

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.

$ 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.

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 $ 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.

On August 21, 2024, the Company entered into a privately negotiated transaction with CI Investments, Inc.

("CI Investments"), which at that time was a beneficial owner of greater than five percent of the Company's common stock outstanding, to repurchase 392 (which amount is presented in thousands) shares of its common stock for approximately $ 1,000 , inclusive of broker commission fees, which transaction was completed on August 22, 2024.

This transaction was 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.

Following the completion of this transaction and other contemporaneous dispositions of the Company’s common stock by CI Investments, CI Investments ceased to be a beneficial owner of more than five percent of the Company's common stock outstanding.

Accrued expenses and other current liabilities as presented in the consolidated balance sheets as of March 31, 2025 included $ 1,600 of interest payable to Investor-Affiliated Funds and $ 4,239 of interest payable to Investor-Affiliated Funds and CI Investments as of March 31, 2024.

Interest expense as presented in the consolidated statements of operations included $ 24,416 , $ 40,909 and $ 35,649 for the years ended March 31, 2025, 2024, and 2023, respectively, that related to the Investor-Affiliated Funds and CI Investments for the period during which such persons' beneficial ownership of the Company's common stock was five percent or more of the Company's common stock outstanding.

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.

terms of the Debt Repurchase Agreement, the Company has paid the following amounts to funds affiliated with the Monarch Investor:

• On March 28, 2024, the Company paid a total of $ 62,339 , which included $ 1,849 of accrued and unpaid interest and $ 490 in other fees, to retire $ 77,922 of aggregate principal amount of the 2027 Notes.

• On May 31, 2024, the Company paid a total of $ 9,435 , which included $ 332 of accrued and unpaid interest, to retire $ 10,345 of aggregate principal amount of the Pyxus Term Loans.

• On August 2, 2024, the Company paid a total of $ 26,707 , which included $ 379 of accrued and unpaid interest, to retire $ 34,191 of aggregate principal amount of the 2027 Notes.

Upon completion of the transactions under the Debt Repurchase Agreement, the Monarch Investor is no longer a holder of the 2027 Notes and the Pyxus Term Loans.

The Monarch Investor remains a related party as a holder of the Intabex Term Loan and a beneficial owner of more than five percent of the outstanding shares of common stock of the Company.

Segment Information

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Consolidated sales and other operating revenues 2,481,260 2,032,559 1,914,881

Segment operating income (loss):

Cost of goods and services sold:

Leaf 2,125,756 1,714,053 1,636,378

All Other 12,520 6,171 17,486

Segment operating income 141,986 98,463 81,934

Consolidated cost of goods and services sold 2,138,276 1,720,224 1,653,864

Selling, general, and administrative expenses:

Leaf 164,228 154,074 139,160

All Other 6,770 6,836 12,371

Consolidated selling, general, and administrative expenses 170,998 160,910 151,531

Other segment items:

Leaf 16,714 8,281 7,964

All Other ( 304 ) 1,158 3,059

Consolidated other segment items 16,410 9,439 11,023

Leaf segment operating income 164,286 153,207 117,056

All Other operating loss ( 8,710 ) ( 11,221 ) ( 18,593 )

Restructuring and asset impairment charges 2,259 4,799 4,685

Goodwill impairment — — 32,186

Consolidated operating income 153,317 137,187 93,778

Gain on debt retirement 8,178 15,914 —

Loss on deconsolidation/disposition of subsidiaries — — 648

Loss on pension settlement — 12,008 2,588

Interest expense, net 128,041 125,620 113,164

Income (loss) before income taxes and other items $ 33,454 $ 15,473 $ ( 22,622 )

(1) Represents the other expense, net caption within the consolidated statements of operations.

See " Note 4.

Other Expense, Net " for additional information.

March 31, 2025

17 unchanged sentences

China $ 497,437 $ 362,778 $ 338,174

244,556 192,745 220,266

Indonesia 227,369 215,491 170,492

United States 192,745 220,266 209,953

United Arab Emirates 213,321 182,687 182,306

160,337 156,085 132,456

South Korea 74,665 49,504 48,394

Russia 70,794 20,175 57,808

Egypt 133,023 43,495 52,428

Turkey 84,957 62,089 50,559

Other 920,260 817,189 768,200

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2025 2024 2023

British American Tobacco x x

British American Tobacco x

China National Tobacco Corporation x x x

Japan Tobacco International x

Japan Tobacco International x x

Philip Morris International Inc.

4 unchanged sentences

Zimbabwe 24,049 22,861

United States 21,429 21,945

22,293 21,429

Other 11,304 11,565

3 unchanged sentences

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.

On May 1, 2025, the investment limit of the Finacity Facility was decreased from $ 160,000 to $ 120,000 of trade receivables.

On May 30, 2025, the existing facility arrangement was extended to May 31, 2026, and, during specified periods, allows the Company to request a temporary increase with a 30-day notice.

Fourth Amendment to the ABL Credit Facility

On May 12, 2025, Pyxus Holdings, certain subsidiaries of Pyxus Holdings, and the Company and its wholly owned subsidiary, Pyxus Parent, entered into a Fourth Amendment to the ABL Credit Agreement (the "ABL Amendment"), with the lenders party thereto and PNC Bank, National Association, as Administrative Agent and Collateral Agent.

The ABL Amendment amends the ABL Credit Agreement to, among other things:

• increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility by $ 30,000 from $ 120,000 to $ 150,000 ,

• reduce the margin for the interest rate by 0.25 % per annum from 3.00 % to 2.75 % and eliminate the SOFR adjustment charge,

• reduce the commitment fee for the unused amounts of the ABL Credit Facility to 0.25 %, and

• extend the maturity to May 12, 2030 or, if earlier, 90 days prior to the earliest stated maturity date of (i) the outstanding senior secured notes and the senior secured term loans (each currently scheduled to mature on December 31, 2027) or (ii) any indebtedness that refinances any of the foregoing.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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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.

We identified certain 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.

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.

Our audit procedures related to management’s estimates and assumptions utilized in the Company’s determination of these uncertain tax positions included the following, among others:

• With the assistance of our income tax specialists, we evaluated management’s judgment 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 these 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 these 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 10, 2025

We have served as the Company’s auditor since its fiscal 2006.

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data