PYXUS INTERNATIONAL, INC. 10-K

Item 8. Financial Statements and Supplementary Data Table of Contents Page No. Consolidated Statements of Operations 38 Consolidated Statements of Comprehensive Income (Loss) 39 Consolidated Balance Sheets 40 Consolidated Statements of Stockholders' Equity 41 Consolidated Statements of Cash Flows 42 Notes to Consolidated Financial Statements 43 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 83 37 Pyxus International, Inc. and Subsidiaries Consolidated Statements of Operations Years Ended March 31, (in thousands, except per share data) 2025 2024 2023 Sales and other operating revenues $ 2,481,260 $ 2,032,559 $ 1,914,881 Cost of goods and services sold 2,138,276 1,720,224 1,653,864 Gross profit 342,984 312,335 261,017 Selling, general, and administrative expenses 170,998 160,910 151,531 Other expense, net 16,410 9,439 11,023 Restructuring and asset impairment charges 2,259 4,799 4,685 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 ) Income tax expense 25,053 27,281 34,127 Income from unconsolidated affiliates, net 8,132 14,992 18,512 Net income (loss) 16,533 3,184 ( 38,237 ) Net income attributable to noncontrolling interests 1,367 521 904 Net income (loss) attributable to Pyxus International, Inc. $ 15,166 $ 2,663 $ ( 39,141 ) Earnings (loss) per share: Basic $ 0.59 $ 0.11 $ ( 1.57 ) Diluted $ 0.59 $ 0.11 $ ( 1.57 ) Weighted average number of shares outstanding: Basic 25,643 25,000 25,000 Diluted 25,667 25,000 25,000 See "Notes to Consolidated Financial Statements" 38 Pyxus International, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) Years Ended March 31, (in thousands) 2025 2024 2023 Net income (loss) $ 16,533 $ 3,184 $ ( 38,237 ) Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment ( 353 ) 700 2,481 Pension and other postretirement benefit plans ( 250 ) 4,419 2,044 Cash flow hedges 132 ( 2,860 ) ( 2,777 ) Total other comprehensive (loss) income, net of tax ( 471 ) 2,259 1,748 Total comprehensive income (loss) 16,062 5,443 ( 36,489 ) Comprehensive income attributable to noncontrolling interests 1,367 509 941 Comprehensive income (loss) attributable to Pyxus International, Inc. $ 14,695 $ 4,934 $ ( 37,430 ) See "Notes to Consolidated Financial Statements" 39 Pyxus International, Inc. and Subsidiaries Consolidated Balance Sheets March 31, (in thousands) 2025 2024 Assets Current assets Cash and cash equivalents $ 78,254 $ 92,569 Restricted cash 7,290 7,224 Trade receivables, net 189,239 168,764 Other receivables 15,040 18,704 Inventories, net 761,951 931,654 Advances to suppliers, net 30,745 20,397 Recoverable income taxes 6,616 4,455 Prepaid expenses 47,151 50,185 Other current assets 21,874 16,254 Total current assets 1,158,160 1,310,206 Investments in unconsolidated affiliates 96,928 101,255 Intangible assets, net 28,507 33,879 Deferred income taxes, net 13,567 7,196 Long-term recoverable income taxes 5,669 2,963 Other noncurrent assets 33,094 32,617 Right-of-use assets 29,742 35,639 Property, plant, and equipment, net 138,176 134,158 Total assets $ 1,503,843 $ 1,657,913 Liabilities and Stockholders’ Equity Current liabilities Notes payable $ 395,030 $ 499,312 Accounts payable 132,871 181,247 Advances from customers 135,607 90,719 Accrued expenses and other current liabilities 90,912 96,954 Income taxes payable 11,001 8,539 Operating leases payable 8,514 8,100 Current portion of long-term debt 12 20,294 Total current liabilities 773,947 905,165 Long-term taxes payable 5,187 2,678 Long-term debt 454,850 497,734 Deferred income taxes 8,818 7,934 Liability for unrecognized tax benefits 18,635 17,742 Long-term leases 19,584 26,136 Pension, postretirement, and other long-term liabilities 57,052 53,701 Total liabilities $ 1,338,073 $ 1,511,090 Commitments and contingencies Stockholders’ equity Common stock— no par value: Authorized shares ( 250,000 for all periods) Issued and outstanding shares ( 24,608 and 25,000 as of March 31, 2025 and 2024, respectively) $ 392,899 $ 389,789 Retained deficit ( 240,125 ) ( 255,291 ) Accumulated other comprehensive income 7,315 7,786 Total stockholders’ equity of Pyxus International, Inc. 160,089 142,284 Noncontrolling interests 5,681 4,539 Total stockholders' equity 165,770 146,823 Total liabilities and stockholders' equity $ 1,503,843 $ 1,657,913 See "Notes to Consolidated Financial Statements" 40 Pyxus International, Inc. and Subsidiaries Consolidated Statements of Stockholders’ Equity Attributable to Pyxus International, Inc. Accumulated Other Comprehensive Income (in thousands) Common Stock Retained Deficit Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Noncontrolling Interests Total Stockholders’ Equity Balance, March 31, 2024 $ 389,789 $ ( 255,291 ) $ ( 5,692 ) $ 12,766 $ 712 $ 4,539 $ 146,823 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 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 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 Balance, March 31, 2025 $ 392,899 $ ( 240,125 ) $ ( 6,045 ) $ 12,516 $ 844 $ 5,681 $ 165,770 See "Notes to Consolidated Financial Statements" Pyxus International, Inc. and Subsidiaries Consolidated Statements of Stockholders’ Equity (continued) Attributable to Pyxus International, Inc. Accumulated Other Comprehensive Income (in thousands) Common Stock Retained Deficit Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Noncontrolling Interests Total Stockholders’ Equity Balance, March 31, 2023 $ 390,290 $ ( 257,954 ) $ ( 6,392 ) $ 8,335 $ 3,572 $ 3,979 $ 141,830 Net income (loss) — 804 — — — ( 34 ) 770 Other comprehensive income, net of tax — — 707 — 862 — 1,569 Balance, June 30, 2023 $ 390,290 $ ( 257,150 ) $ ( 5,685 ) $ 8,335 $ 4,434 $ 3,945 $ 144,169 Net income (loss) — 8,095 — — — ( 199 ) 7,896 Other — — — — — 493 493 Other comprehensive loss, net of tax — — ( 1,545 ) — ( 1,000 ) — ( 2,545 ) Balance, September 30, 2023 $ 390,290 $ ( 249,055 ) $ ( 7,230 ) $ 8,335 $ 3,434 $ 4,239 $ 150,013 Net income — 3,835 — — — 344 4,179 Other ( 501 ) — — — — 8 ( 493 ) Dividends — — — — — ( 450 ) ( 450 ) Other comprehensive income (loss), net of tax — — 2,185 3,511 ( 1,288 ) — 4,408 Balance, December 31, 2023 $ 389,789 $ ( 245,220 ) $ ( 5,045 ) $ 11,846 $ 2,146 $ 4,141 $ 157,657 Net (loss) income — ( 10,071 ) — — — 410 ( 9,661 ) Other comprehensive (loss) income, net of tax — — ( 647 ) 920 ( 1,434 ) ( 12 ) ( 1,173 ) Balance, March 31, 2024 $ 389,789 $ ( 255,291 ) $ ( 5,692 ) $ 12,766 $ 712 $ 4,539 $ 146,823 See "Notes to Consolidated Financial Statements" Pyxus International, Inc. and Subsidiaries Consolidated Statements of Stockholders’ Equity (continued) Attributable to Pyxus International, Inc. Accumulated Other Comprehensive Income (Loss) (in thousands) Common Stock Retained Deficit Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Noncontrolling Interest Total Stockholders’ Equity Balance, March 31, 2022 $ 390,290 $ ( 218,813 ) $ ( 8,873 ) $ 6,328 $ 6,349 $ 6,090 $ 181,371 Net (loss) income — ( 14,663 ) — — — 158 ( 14,505 ) Other — — — — — ( 3,052 ) ( 3,052 ) Other comprehensive income (loss), net of tax — — 947 — ( 1,503 ) — ( 556 ) Balance, June 30, 2022 $ 390,290 $ ( 233,476 ) $ ( 7,926 ) $ 6,328 $ 4,846 $ 3,196 $ 163,258 Net loss — ( 1,537 ) — — — ( 13 ) ( 1,550 ) Other comprehensive loss, net of tax — — ( 4,801 ) ( 1,562 ) ( 1,768 ) — ( 8,131 ) Balance, September 30, 2022 $ 390,290 $ ( 235,013 ) $ ( 12,727 ) $ 4,766 $ 3,078 $ 3,183 $ 153,577 Net (loss) income — ( 2,333 ) — — — 96 ( 2,237 ) Other comprehensive income (loss), net of tax — — 4,855 ( 78 ) ( 371 ) — 4,406 Balance, December 31, 2022 $ 390,290 $ ( 237,346 ) $ ( 7,872 ) $ 4,688 $ 2,707 $ 3,279 $ 155,746 Net (loss) income — ( 20,608 ) — — — 663 ( 19,945 ) Other comprehensive income, net of tax — — 1,480 3,647 865 37 6,029 Balance, March 31, 2023 $ 390,290 $ ( 257,954 ) $ ( 6,392 ) $ 8,335 $ 3,572 $ 3,979 $ 141,830 See "Notes to Consolidated Financial Statements" 41 Pyxus International, Inc. and Subsidiaries Consolidated Statements of Cash Flows Years Ended March 31, (in thousands) 2025 2024 2023 Operating activities: Net income (loss) $ 16,533 $ 3,184 $ ( 38,237 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 20,334 19,250 19,137 Debt amortization/interest 11,235 8,559 18,466 Gain on debt retirement ( 8,178 ) ( 15,914 ) — Loss on foreign currency transactions 4,922 4,009 6,028 Loss on pension settlement — 12,008 2,588 Equity-based compensation 4,110 — — Income from unconsolidated affiliates, net of dividends 4,317 ( 506 ) ( 5,835 ) Changes in operating assets and liabilities, net: Trade and other receivables ( 208,374 ) ( 167,600 ) ( 111,932 ) Inventories and advances to suppliers 156,309 ( 136,010 ) ( 21,110 ) Deferred items 1,052 3,240 ( 14,758 ) Payables and accrued expenses ( 49,190 ) 17,531 5,147 Advances from customers 45,937 55,302 ( 10,693 ) Prepaid expenses 8,943 ( 4,506 ) 4,761 Income taxes payable 2,719 ( 8,207 ) 13,116 Other operating assets and liabilities ( 13,140 ) 1,425 8,477 Other, net ( 10,915 ) ( 6,735 ) ( 12,977 ) Net cash used in operating activities $ ( 13,386 ) $ ( 214,970 ) $ ( 137,822 ) Investing activities: Purchases of property, plant, and equipment $ ( 23,028 ) $ ( 21,043 ) $ ( 16,307 ) Proceeds from sale of property, plant, and equipment 3,770 4,312 3,060 Collections from beneficial interests in securitized trade receivables 188,312 175,911 165,262 Other, net 1,584 269 2,930 Net cash provided by investing activities $ 170,638 $ 159,449 $ 154,945 Financing activities: Net (repayments) proceeds from short-term borrowings $ ( 102,550 ) $ 122,483 $ 5,234 Repayment of DDTL facility — — ( 110,250 ) Proceeds from term loan facility — — 100,000 Proceeds from revolving loan facilities 363,000 331,000 170,000 Repayment of revolving loan facilities ( 363,000 ) ( 356,000 ) ( 235,000 ) Proceeds from long-term borrowings — — 578,439 Repayment of long-term borrowings ( 55,822 ) ( 60,342 ) ( 578,162 ) Debt issuance costs ( 9,106 ) ( 11,751 ) ( 7,686 ) Other, net 217 171 ( 5,575 ) 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 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 Restricted cash at beginning of period 7,224 2,176 2,537 Cash, cash equivalents, and restricted cash at end of period $ 85,544 $ 99,793 $ 138,909 Other information: Cash paid for income taxes, net $ 31,101 $ 22,501 $ 18,696 Cash paid for income taxes related to debt exchange — 12,543 — Cash paid for interest, net 115,009 109,518 93,425 Noncash investing activities: Noncash amounts obtained as a beneficial interest in exchange for transferring trade receivables in a securitization transaction 241,069 160,041 164,404 See "Notes to Consolidated Financial Statements" 42 Pyxus International, Inc. and Subsidiaries Notes to Consolidated Financial Statements (in thousands, except per share data) Page No. Note 1 Basis of Presentation and Summary of Significant Accounting Policies 44 Note 2 New Accounting Standards 50 Note 3 Revenue Recognition 51 Note 4 Other Expense, Net 52 Note 5 Income Taxes 52 Note 6 Earnings (Loss) Per Share 55 Note 7 Restricted Cash 55 Note 8 Inventories, Net 55 Note 9 Advances to Suppliers, Net 56 Note 10 Equity Method Investments 56 Note 11 Variable Interest Entities 57 Note 12 Intangible Assets, Net 57 Note 13 Leases 58 Note 14 Property, Plant, and Equipment, Net 59 Note 15 Debt Arrangements 60 Note 16 Securitized Receivables 66 Note 17 Guarantees 67 Note 18 Derivative Financial Instruments 67 Note 19 Fair Value Measurements 68 Note 20 Pension and Other Postretirement Benefits 69 Note 21 Contingencies and Other Information 74 Note 22 Other Comprehensive Income (Loss) 75 Note 23 Government Assistance 76 Note 24 Equity-Based Compensation 76 Note 25 Related Party Transactions 78 Note 26 Segment Information 80 Note 27 Subsequent Events 82 43 1. Basis of Presentation and Summary of Significant Accounting Policies Pyxus International, Inc. (the "Company" or "Pyxus") is a global agricultural company with businesses having more than 150 years of experience delivering value-added products and services to businesses and customers. The Company is a trusted provider of responsibly sourced, independently verified, sustainable, and traceable products and ingredients. As the context requires, the "Company" and "Pyxus" also includes the consolidated subsidiaries of Pyxus International, Inc. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission applicable to annual reporting on Form 10-K. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries. Intercompany accounts and transactions have been eliminated. Equity Method Investments The Company’s equity method investments and its cost method investments are non-marketable securities. When not required to consolidate its investment in another entity, the Company uses the equity method if it (i) can exercise significant influence over the other entity, and (ii) holds common stock and/or in-substance common stock of the other entity. Under the equity method, investments are carried at cost, plus or minus the Company’s equity in the increases or decreases of the investee’s net assets after the date of acquisition. The Company continually monitors its equity method investments for factors indicating other-than-temporary impairment. The Company's proportionate share of the net income or loss of these entities is included in income from unconsolidated affiliates, net within the consolidated statements of operations. Dividends received from the investee reduce the carrying amount of the investment. Distributions from equity method investees are accounted for based on the cumulative earnings approach to determine whether they represent a return of investment, or a return on investment. Variable Interest Entities The Company holds variable interests in multiple variable interest entities, which primarily procure or process inventory on behalf of the Company or are securitization entities. These variable interests relate to equity investments, receivables, guarantees, and securitized receivables. The Company is not the primary beneficiary of 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. The Company's investments in unconsolidated variable interest entities are classified as investments in unconsolidated affiliates in the consolidated balance sheets. The Company's assets and liabilities with variable interest entities are classified as related party balances. The Company's maximum exposure to loss in these variable interest entities is represented by the investments, receivables, guarantees, and the deferred purchase price on the sale of securitized receivables. Use of Estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. These estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. Actual results may differ from the Company's estimates and assumptions. Estimates are used in accounting for, among other things, revenue recognition, pension and postretirement health care benefits, inventory reserves, credit loss reserves, bank loan guarantees to suppliers and unconsolidated subsidiaries, advances to suppliers reserves, useful lives for depreciation and amortization, future cash flows associated with impairment testing for long-lived assets, deferred tax assets an d uncertain income tax positions, intrastate tax credits, incremental borrowing rates for the present value of lease payments, fair value determinations of financial assets and liabilities, including derivatives, securitized beneficial interests, and counterparty risk. Reclassifications Certain prior-period amounts were reclassified to conform to the current-year presentation in the consolidated statements of cash flows, and in the income taxes footnote disclosure related to unrecognized tax benefits and related interest and penalties. Segment Information The Company reviewed its operations in Africa, Asia, Europe, North America, and South America and concluded the economic characteristics of these five Leaf regional operations were similar. Each geographic region derives its revenues mainly from shipping processed tobacco to manufacturers of cigarettes and other consumer tobacco products around the world, with a smaller percentage of revenue in each region being derived from performing third-party tobacco processing services. The 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's CODM, comprised of both the chief executive 44 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 seven operating segments organized by geographic area and product category that are aggregated into one reportable segment for financial reporting purposes: Leaf. The All Other category 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 The Company's revenue consists primarily of the sale of processed tobacco and fees charged for processing and related services to the manufacturers of tobacco products. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company’s performance obligations are satisfied when the transfer of control of the distinct product or service to the customer occurs. For products, control is transferred, and revenue is recognized, at a point in time, in accordance with the shipping terms of the contract. For 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 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. Significant Judgments The Company identified two main forms of variable consideration in its contracts with customers: warehousing fees for storing customer-controlled tobacco until the customer requests shipment and claims resulting from tobacco that does not meet customer specifications. Warehousing fees are either included in the price of tobacco based on the customers' best estimate of the date they will request shipment or separately charged using a per-day storage rate. When the Company enters into a contract with a customer, the price communicated is the amount of consideration the Company expects to receive. Price adjustments for tobacco not meeting customer specifications for shrinkage, improper blend, or chemical makeup, etc. are handled through a claims allowance that is assessed quarterly. The Company estimates 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. 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. Taxes Collected from Customers Certain subsidiaries are subject to value-added taxes on local sales. Value-added taxes on local sales are recorded in sales and other operating revenues and cost of goods and services sold in the consolidated statements of operations. Shipping and Handling The Company elected to account for shipping and handling as activities to fulfill its performance obligations, regardless of when control transfers. Shipping and handling fees that are billed to customers are recognized in sales and other operating revenues and the associated shipping and handling costs are recognized in cost of goods and services sold in the consolidated statements of operations. 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. 45 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities reflect the expected future tax consequences of events that are recognized in the consolidated financial statements in different periods than they are recognized for tax purposes. Deferred tax assets and liabilities are established using enacted tax rates in effect for the year in which these items are expected to reverse. The realization of deferred tax assets is dependent on generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. When assessing the need for a valuation allowance, the Company considers carryback potential, historical earnings, future reversals of existing taxable temporary differences (including liabilities for unrecognized tax benefits), forecasted operating profits and tax planning strategies. The Company’s provision for income taxes is based on pre-tax income, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. The Company recognizes tax benefits from uncertainties if it believes it is more-likely-than-not it will be sustained based on the technical merits. Penalties and interest related to income taxes, if incurred, are included in income tax expense. 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 Cash and cash equivalents include cash in banks and highly liquid investments with original maturities of three months or less and are stated at cost, which approximates fair value. Inventories, Net Costs in inventory include processed tobacco inventory, unprocessed tobacco inventory, and other inventory. Costs of unprocessed tobacco inventories are determined by the average cost method, which include the cost of green tobacco. Costs of processed tobacco inventories are determined by the average cost method, which include both the cost of unprocessed tobacco, as well as direct and indirect costs related to processing the product. Costs of other inventory are determined by the first-in, first-out method, which include costs of packing materials, 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"). The Company evaluates its inventories for LCM adjustments by country and type of inventory. Processed tobacco and unprocessed tobacco are evaluated separately for LCM purposes. The Company compares the cost of its processed tobacco to net realizable value based on the estimated selling price of similar grades when evaluating those balances for LCM adjustments. The Company also considers whether its processed tobacco is committed to a customer, whereby the expected sales price is utilized in determining the net realizable value for committed tobacco. In addition, the Company writes-down inventory balances for estimates of obsolescence. LCM and obsolescence inventory write-downs are recorded in cost of goods and services sold within the consolidated statements of operations. Advances to Tobacco Suppliers, Net The Company purchases seeds, fertilizer, pesticides, and other products related to growing tobacco and advances them to tobacco suppliers to assist in crop production. These seasonal advances are short term, represent prepaid inventory, and are recorded as advances to tobacco suppliers. Upon delivery of tobacco, part of the purchase price to the supplier is paid in cash and part through a reduction of the advance balance. The advances applied to the delivery are reclassified from advances to unprocessed inventory. The Company also has noncurrent advances, which generally represent the cost of advances to tobacco suppliers for infrastructure, such as curing barns, recovered through the delivery of tobacco to the Company by the tobacco suppliers. Tobacco suppliers may not be able to settle the 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. Noncurrent advances to tobacco suppliers are recorded in other noncurrent assets in the consolidated balance sheets. 46 The Company accounts for its advances to tobacco suppliers using a cost accumulation model, which reports advances at the lower of cost or recoverable amounts, exclusive of the mark-up and interest. The mark-up and interest on its advances are recognized upon delivery of tobacco as a decrease in the cost of the current crop. A provision for tobacco supplier bad debts is recorded in cost of goods and services sold in the consolidated statements of operations for abnormal yield adjustments or unrecovered advances. Normal yield adjustments are capitalized into the cost of the current crop and are recorded in cost of goods and services sold as that crop is sold. Intangible Assets, Net The Company has intangible assets with definite useful lives. These intangible assets are assessed annually and tested for impairment whenever factors indicate the carrying amount may not be recoverable. The trade name, customer relationship, and technology intangibles are amortized on a straight-line basis over fourteen , nine to twelve years , and eight years , respectively. The amortization period is the term of the contract or, if no term is specified in the contract, management’s best estimate of the useful life based on 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. Amortization expense associated with finite-lived intangible assets is recorded in selling, general, and administrative expenses in the consolidated statements of operations. Leases The Company has operating leases for land, buildings, automobiles, and other equipment that expire at various dates through fiscal year 2040. The Company does not have material finance leases. Leases for real estate generally have initial terms ranging from two to fifteen years , excluding renewal options. Leases for equipment generally have initial terms ranging from two to five years excluding renewal options. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes. These lease terms may include optional renewals, terminations, or purchases, which are considered in the Company’s assessments when such options are reasonably certain to be exercised. The Company measures right-of-use assets and related lease liabilities based on the present value of remaining lease payments, including in-substance fixed payments, the current payment amount when payments depend on an index or rate (e.g., inflation adjustments, market renewals), and the amount the Company believes is probable to be paid to the lessor under residual value guarantees, when applicable. Lease contracts may include fixed payments for non-lease components, such as maintenance, which are included in the measurement of lease liabilities for certain asset classes based on the Company’s election to combine lease and non-lease components. The Company does not recognize short-term leases, those lease contracts with durations of twelve months or less, in the consolidated balance sheets. As applicable borrowing rates are not typically implied within the lease arrangements, the Company discounts lease payments based on its estimated incremental borrowing rate at lease commencement, or modification, which is based on the Company’s estimated credit rating, the lease term at commencement, and the contract currency of the lease arrangement. Property, Plant, and Equipment, Net Property, plant, and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Buildings are depreciated over a range of nine to forty years . Machinery and equipment are depreciated over a range of two to nineteen years . Repairs and maintenance costs are expensed as incurred. The cost of major improvements 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 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. Guarantees The Company's guarantees are primarily related to bank loans to suppliers for crop production financing. The Company guarantees bank loans of certain unconsolidated subsidiaries in Asia and South America. Under longer-term arrangements, the Company may guarantee financing on suppliers’ construction of curing barns or other tobacco production assets. Guaranteed loans are generally repaid concurrent with the delivery of tobacco to the Company. The Company is obligated to repay guaranteed loans should the supplier default. If default occurs, the Company has recourse against its various suppliers and their production assets. The fair value of the Company's guarantees 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. 47 In Brazil, certain suppliers obtain government subsidized rural credit financing from local banks that is guaranteed by the Company. Upon delivery of tobacco, the Company remits payments to the local banks on behalf of the suppliers before paying the supplier. Amounts owed to suppliers are recorded in accounts payable in the consolidated balance sheets. Rural credit financing repayment is due to local banks based on contractual due dates. Derivative Financial Instruments The Company uses forward or option currency contracts to manage risks associated with foreign currency exchange rates on foreign operations. These contracts are for green tobacco purchases, processing costs, and selling, general, and administrative expenses. The Company does not hold derivatives contracts for speculative or trading purposes. Derivative financial instruments are recorded in other current assets and other current liabilities in the consolidated balance sheets and are measured at fair value. Changes in fair value are recognized in earnings, unless the derivative is designated and qualifies to be in a hedge accounting relationship. For derivatives designated in a hedge accounting relationship, the Company evaluates hedge effectiveness at inception and on an ongoing basis. If a hedge relationship is no longer expected to be effective, the derivative in that relationship is de-designated and hedge accounting is discontinued. Changes in fair value of foreign currency derivatives designated in cash flow hedging relationships are recorded in accumulated other comprehensive income in the consolidated balance sheets and reclassified to earnings when the hedged item affects earnings. Cash flows from derivatives are classified in the consolidated statements of cash flows in the same category as the cash flows from the underlying hedged items. The Company has elected not to offset fair value amounts recognized for derivative instruments with the same counterparty under a master netting agreement. Pension and Other Postretirement Benefits Retirement Benefits The Company maintains various excess benefit and supplemental plans that provide additional benefits to certain individuals in key positions and individuals whose compensation and the resulting benefits that would have 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 current and former employees. Postretirement Health and Life Insurance Benefits The Company provides certain health and life insurance benefits to retired U.S. employees (and their eligible dependents) who meet specified age and service requirements. The plan excludes new employees after September 2005 and caps the Company’s annual cost commitment to postretirement benefits for retirees. The Company retains the right, subject to existing agreements, to modify or eliminate these postretirement health and life insurance benefits in the future. The Company provides certain health and life insurance benefits to retired Brazilian directors and certain retirees located in Europe including their eligible dependents who meet specified requirements. Plan Assets The Company's policy is to contribute amounts to the plans sufficient to meet or exceed funding requirements of local governmental rules and regulations. The Company's investment objectives for plan assets are to generate consistent total investment return to pay anticipated plan benefits, while minimizing long-term costs and portfolio volatility. The financial objectives underlying this policy include maintaining plan contributions at a reasonable level relative to benefits provided and assuring unfunded obligations do not grow to a level that would adversely affect the Company's financial health. Portfolio performance is measured against investment objectives and objective benchmarks. The portfolio objective is to exceed the actuarial return on assets assumption. 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. Equity securities do not include the Company's common stock. The Company's diversification and risk control processes serve to minimize the concentration and experience of risk. There are no significant concentrations of risk, in terms of sector, industry, geography, or individual company or companies. The Company’s plan assets primarily consist of cash and cash equivalents 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. The following are descriptions, valuation methodologies, and inputs used to determine the fair value of each major category of plan assets: • Cash and cash equivalents include short-term investment funds, primarily in diversified portfolios of investment grade money market instruments that are valued using quoted market prices or other valuation methods and classified as Level 1 or Level 2 in the fair value hierarchy. 48 • 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. • Real estate investments include those in private limited partnerships that invest in various domestic and international commercial and residential real estate projects and publicly traded REIT securities. The fair values of private real estate assets are typically determined by using income and/or cost approaches or comparable sales approach, taking into consideration discount and capitalization rates, financial conditions, local market conditions, and the status of the capital markets, and are generally classified as Level 3 in the fair value hierarchy. Publicly traded REIT securities are valued primarily using quoted market prices and are generally classified as Level 1 in the fair value hierarchy. • Diversified investments include mutual funds with an absolute return strategy. Mutual fund investments with absolute return strategies are publicly traded and valued using quoted market prices and are generally classified as Level 1 in the fair value hierarchy. Foreign Currency Translation and Remeasurement The Company translates assets and liabilities of its foreign subsidiaries from their respective functional currencies to USD using exchange rates in effect at period end. The Company's results of operations and its cash flows are translated using average exchange rates for each reporting period. Resulting currency translation adjustments are reflected as a separate component of accumulated other comprehensive income in the consolidated balance sheets. The financial statements of foreign subsidiaries, for which the USD is the functional currency, and which have certain transactions denominated in a local currency, are remeasured into USD. The remeasurement of local currencies into USD results in remeasurement adjustments that are included in net income. Exchange gains (losses) from remeasurement are recorded in cost of goods and services sold and o ther expense, net within the consolidated statements of operations. Securitized Receivables The Company sells trade receivables to unaffiliated financial institutions under multiple accounts receivable securitization facilities. Under 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. The net cash proceeds received by the Company in cash at the time of sale (cash purchase price) are disclosed as an operating activity in the consolidated statements of cash flows. The deferred purchase price receivable represents a continuing involvement and a beneficial interest in the transferred financial assets and is recognized at fair value as part of the sale transaction. The deferred purchase price receivables are included in trade and other receivables, net in the consolidated balance sheets and are valued using unobservable inputs (i.e., Level 3 inputs), primarily discounted cash flow. The net cash proceeds received by the Company as deferred purchase price are disclosed as an investing activity in the consolidated statements of cash flows. Additionally, beneficial interests received for transferring trade receivables in a securitization transaction are disclosed as a noncash investing activity in the consolidated statements of cash flows. The difference between the carrying amount of the receivables sold under these facilities and the sum of the cash and fair value of the other assets received at the time of transfer is recognized as a loss on sale of the related receivables and recorded in o ther expense, net in the consolidated statements of operations. Program costs are recorded in o ther expense, net in the consolidated statements of operations. Government Assistance 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. Under this accounting framework, government assistance is recognized when it is probable the Company will receive assistance and comply with the conditions attached to the assistance. Operational related assistance is recorded on a systematic basis over the periods in which the related cost or expenditures for which it is intended to compensate have occurred and is presented as a reduction in the related expense for which it is intended to defray. Capital related assistance is recorded as long-term deferred revenue, included within pension, postretirement, and other long-term liabilities in the consolidated balance sheets, and is recognized in other income over the asset's useful life as an offset against depreciation expense. Equity-Based Compensation The Company’s Board of Directors adopted the 2020 Incentive Plan on November 18, 2020 (the "Incentive Plan"), and on March 21, 2024 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 49 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 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. 2. New Accounting Standards Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures . This ASU amends FASB Topic 280 to permit the disclosure of multiple measures of a segment's profit or loss and requires an entity with a single reportable segment to apply FASB Topic 280 in its entirety. In addition, this ASU requires the following new segment disclosures: • Significant segment expenses by reportable segment if regularly provided to the CODM and included within the reported measure of segment profit or loss, • Other segment items, which represents the difference between reported segment revenues less the significant segment expenses less reported segment profit or loss, and • Title and position of the CODM. Disclosures required under this new ASU and the existing segment profit or loss, and assets disclosures currently required annually by FASB Topic 280 are to be disclosed in interim periods. The 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. 2023-09, Income Taxes: Improvements to Income Tax Disclosures , to provide more disaggregation of income tax information mainly related to the effective tax rate reconciliation and the income taxes paid disclosure requirements. Under the new accounting rules, the tabular effective tax rate reconciliation must include specific categories with certain reconciling items based on the expected tax further disaggregated by nature and/or jurisdiction. Income taxes paid, net of refunds received, must be broken out by federal, state, and foreign taxes, and further disaggregated by individual jurisdictions based on total income taxes paid. These new annual disclosure requirements are effective for the Company's fiscal year ending March 31, 2026. Early adoption is permitted. The Company is currently evaluating the impact that this new accounting standard will have on its income tax disclosures. 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. 50 3. Revenue Recognition Product revenue is primarily processed tobacco sold to the customer. Processing and other revenues are mainly contracts to process customer-owned green tobacco. During such processing, ownership remains with the customers. All Other revenue is primarily composed of revenue from the sale of non-tobacco agriculture products. The following disaggregates sales and other operating revenues by major source, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the consolidated financial statements : Years Ended March 31, 2025 2024 2023 Leaf: Product revenue $ 2,335,107 $ 1,912,438 $ 1,812,170 Processing and other revenues 135,877 117,177 88,388 Leaf sales and other operating revenues 2,470,984 2,029,615 1,900,558 All Other: 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 Significant Judgments The following summarizes activity in the claims allowance: Years Ended March 31, 2025 2024 2023 Balance, beginning of period $ 3,313 $ 2,350 $ 1,130 Additions 2,010 6,191 4,680 Payments and other adjustments ( 2,887 ) ( 5,228 ) ( 3,460 ) Balance, end of period $ 2,436 $ 3,313 $ 2,350 The following summarizes activity in the allowance for expected credit losses: Years Ended March 31, 2025 2024 2023 Balance, beginning of period $ ( 23,940 ) $ ( 24,730 ) $ ( 24,541 ) Additions ( 1,299 ) ( 1,535 ) ( 2,316 ) Write-offs and other adjustments 1,204 2,325 2,127 Balance, end of period ( 24,035 ) ( 23,940 ) ( 24,730 ) Trade receivables 213,274 192,704 210,081 Trade receivables, net $ 189,239 $ 168,764 $ 185,351 Taxes Collected from Customers Value-added taxes were $ 43,298 , $ 34,905 , and $ 28,302 for the years ended March 31, 2025, 2024, and 2023, respectively. 51 4. Other Expense, Net The following summarizes the components of other expense, net: Years Ended March 31, 2025 2024 2023 Losses on sale of receivables (1) $ 19,565 $ 13,121 $ 10,434 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 expense (income), net 1,389 ( 1,633 ) 985 Total $ 16,410 $ 9,439 $ 11,023 (1) See " Note 16. Securitized Receivables " for additional information. 5. Income Taxes Income Tax Provision The components of income (loss) before income taxes and other items consisted of the following: Years Ended March 31, 2025 2024 2023 U.S. $ ( 4,579 ) $ ( 17,697 ) $ ( 43,874 ) Non-U.S. 38,033 33,170 21,252 Total $ 33,454 $ 15,473 $ ( 22,622 ) The details of the amount shown for income taxes in the consolidated statements of operations are as follows: Years Ended March 31, 2025 2024 2023 Current: Federal (1) $ 6,837 $ 5,319 $ 16,353 State 261 ( 59 ) 337 Non-U.S. 23,611 24,385 17,593 Total Current 30,709 29,645 34,283 Deferred: Federal (2) ( 10,307 ) 968 ( 592 ) State ( 155 ) ( 9 ) 2 Non-U.S. 4,806 ( 3,323 ) 434 Total Deferred ( 5,656 ) ( 2,364 ) ( 156 ) Income tax expense $ 25,053 $ 27,281 $ 34,127 (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. 52 The difference between income tax expense based on income (loss) before income taxes and other items and the amount computed by applying the U.S. statutory federal income tax rate to income are as follows: Years Ended March 31, 2025 2024 2023 Tax benefit at U.S. statutory rate $ 7,025 $ 3,249 $ ( 4,750 ) Effect of non-U.S. income taxes ( 2,602 ) 23 ( 3,418 ) U.S. taxes on non-U.S. earnings 7,759 9,264 6,389 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 Tax credits ( 6,482 ) ( 5,270 ) ( 3,853 ) Tax incentives — — ( 2,280 ) Nondeductible interest 2,969 1,340 2,559 Exchange effects and currency translation 9,367 ( 5,110 ) 3,101 Change in valuation allowance (1) ( 9,456 ) 15,340 30,412 Other, net 7,224 ( 1,510 ) ( 1,265 ) Income tax expense $ 25,053 $ 27,281 $ 34,127 (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. Refer to " Note 15. 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): March 31, 2025 2024 Deferred tax assets: Non-deductible interest carryforward $ 34,940 $ 30,858 Original issue discount 10,439 14,714 Reserves and accruals 22,691 21,662 Tax loss carryforwards 16,653 16,329 Unrealized exchange losses 1,448 5,961 Lease obligations 6,511 7,344 Other 9,971 10,290 Gross deferred tax assets 102,653 107,158 Valuation allowance ( 60,302 ) ( 70,391 ) Total deferred tax assets $ 42,351 $ 36,767 Deferred tax liabilities: Unremitted earnings of foreign subsidiaries $ ( 27,560 ) $ ( 29,523 ) Right of use asset ( 7,050 ) ( 7,956 ) Other ( 2,989 ) ( 25 ) Total deferred tax liabilities $ ( 37,599 ) $ ( 37,504 ) Net deferred tax assets (liabilities) $ 4,752 $ ( 737 ) 53 The following summarizes the change in the valuation allowance for deferred tax assets: Balance at March 31, 2022 $ 32,641 Changes to expenses (1) 27,598 Changes to other comprehensive income ( 733 ) Balance at March 31, 2023 59,506 Changes to expenses 10,727 Changes to other comprehensive income 158 Balance at March 31, 2024 70,391 Changes to expenses ( 10,081 ) Changes to other comprehensive income ( 8 ) Balance at March 31, 2025 $ 60,302 (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. Debt Arrangements " for further details regarding the Debt Exchange Transactions. As of March 31, 2025, the Company had foreign net operating loss carryforwards of $ 54,846 , of which $ 26,930 relates to jurisdictions with definite lived carryforward periods and $ 27,916 relates to jurisdictions with indefinite lived carryforward periods. Under current U.S. tax regulations, in general, repatriation of foreign earnings to the U.S. can be completed without incurring material incremental U.S. tax. However, repatriation of foreign earnings could subject the Company to U.S. state and non-U.S. jurisdictional taxes (including withholding taxes) on distributions or sales of minority owned investments. The Company has not recorded a deferred tax liability for U.S. federal, U.S. state, or foreign tax from foreign subsidiary unremitted earnings and profits where an indefinite reinvestment assertion was made on the basis that this group of foreign subsidiaries does not expect to have available excess cash and cash equivalents to remit in the foreseeable future or has specific needs for available excess cash. The unrecorded tax liability associated with indefinitely reinvested foreign subsidiary earnings is not practicable to estimate due to the inherent complexity of the Company's global operations. Accounting for Uncertainty in Income Taxes The following summarizes the changes to unrecognized tax benefits and related interest and penalties: Years Ended March 31, 2025 2024 Balance at April 1 $ 16,892 $ 16,085 Increase (decrease) for prior year tax positions 2,989 7,100 Increase for current year tax positions 4,854 1,630 Reduction for settlements ( 8,020 ) ( 4,662 ) Impact of changes in exchange rates ( 210 ) ( 2,553 ) Reduction of statute of limitation expirations ( 3,699 ) ( 708 ) Balance at March 31 (1) $ 12,806 $ 16,892 Accrued interest 1,929 2,065 Accrued penalties 3,900 2,372 Balance at March 31 (1) $ 18,635 $ 21,329 (1) As of March 31, 2025, $ 18,635 would impact the Company's effective tax rate, if recognized. Due to the Company’s global operations, numerous tax audits may be ongoing throughout the world at any point in time. The Company's income tax liabilities are based on estimates of potential income taxes due upon the conclusion of such audits and 54 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 $ 2,919 within the next twelve months from lapses in statutes of limitations. The Company and its subsidiaries file a U.S. federal consolidated income tax return as well as returns in several U.S. states and a number of foreign jurisdictions. As of March 31, 2025, the Company’s earliest open tax year for U.S. federal income tax purposes relate to tax periods ending in 2021. Open tax years in state and foreign jurisdictions generally range from three to six years. In applicable jurisdictions, the Company’s tax attributes from prior periods remain subject to adjustment. 6. Earnings (Loss) Per Share The following summarizes the computation of earnings (loss) per share: Years Ended March 31, 2025 2024 2023 Net income (loss) attributable to Pyxus International, Inc. $ 15,166 $ 2,663 $ ( 39,141 ) Basic weighted average shares outstanding $ 25,643 25,000 25,000 Plus: 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 ) 7. Restricted Cash The following summarizes the composition of restricted cash: March 31, 2025 2024 Compensating balance for short-term borrowings $ 542 $ 516 Escrow 3,534 2,647 Grants (1) 3,116 1,375 Other 98 2,686 Total $ 7,290 $ 7,224 (1) Includes grants from a government entity. See " Note 23. Government Assistance " for additional information. 8. Inventories, Net The following summarizes the composition of inventories, net: March 31, 2025 2024 Processed tobacco $ 490,410 $ 585,280 Unprocessed tobacco 241,832 305,928 Other tobacco related 25,643 31,213 All Other 4,066 9,233 Total $ 761,951 $ 931,654 55 9. Advances to Suppliers, Ne t The following summarizes the composition of advances to suppliers, net: March 31, 2025 2024 Advances to tobacco suppliers, net $ 29,144 $ 17,068 Advances to non-tobacco suppliers 1,601 3,329 Total in current assets 30,745 20,397 Long-term advances to tobacco suppliers, net 4,980 1,821 Total current and long-term $ 35,725 $ 22,218 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. 10. Equity Method Investments The following summarizes the Company's equity method investments as of March 31, 2025: Investee Name Location Primary Purpose Ownership Percentage Basis Difference (1) Adams International Ltd. Thailand Purchase and process tobacco 49 % $ ( 4,526 ) Alliance One Industries India Private Ltd. India Purchase and process tobacco 49 % ( 5,770 ) China Brasil Tabacos Exportadora S.A. Brazil Purchase and process tobacco 49 % 43,000 Oryantal Tütün Paketleme Sanayi ve Ticaret A.Ş. Turkey Process tobacco 50 % ( 416 ) Purilum, LLC U.S. Produce flavor formulations and consumable e-liquids 50 % 4,589 Siam Tobacco Export 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. The following summarizes aggregate financial information for these equity method investments: Years Ended March 31, 2025 2024 2023 Statement of Operations Sales $ 611,152 $ 505,262 $ 489,532 Gross profit 70,208 82,614 76,206 Net income 16,851 33,101 40,447 March 31, 2025 2024 Balance sheet: Current assets $ 419,192 $ 542,702 Property, plant, and equipment and other assets 49,243 50,925 Current liabilities 328,818 446,597 Long-term obligations and other liabilities 4,560 3,356 56 11. Variable Interest Entities The Company holds variable interests in multiple entities that primarily procure or process inventory or are securitization entities. These variable interests relate to equity investments, receivables, guarantees, and securitized receivables. The following summarizes the Company's financial relationships with its unconsolidated variable interest entities: March 31, 2025 2024 Investments in variable interest entities $ 90,239 $ 94,609 Guaranteed amounts to variable interest entities (not to exceed) 15,995 11,113 12. Intangible Assets, Net The gross carrying amount and accumulated amortization of intangible assets consist of the following: March 31, 2025 Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangibles subject to amortization: Customer relationships 7.4 years $ 26,101 $ ( 9,969 ) $ 16,132 Technology 3.4 years 11,618 ( 6,844 ) 4,774 Trade names 9.4 years 11,300 ( 3,699 ) 7,601 Total $ 49,019 $ ( 20,512 ) $ 28,507 March 31, 2024 Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Intangibles subject to amortization: Customer relationships 8.4 years $ 26,101 $ ( 7,794 ) $ 18,307 Technology 4.4 years 12,948 ( 5,784 ) 7,164 Trade names 10.4 years 11,300 ( 2,892 ) 8,408 Total $ 50,349 $ ( 16,470 ) $ 33,879 The following summarizes amortization expense for definite-lived intangible assets: Years Ended March 31, 2025 2024 2023 Amortization expense $ 4,532 $ 4,631 $ 6,489 57 The following summarizes the estimated intangible asset amortization expense for the next five years and beyond: For Fiscal Years Ended Customer Relationships Technology (1) Trade Names Total 2026 $ 2,175 $ 1,448 $ 807 $ 4,430 2027 2,175 1,378 807 4,360 2028 2,175 1,375 807 4,357 2029 2,175 573 807 3,555 2030 2,175 — 807 2,982 Thereafter 5,257 — 3,566 8,823 Total $ 16,132 $ 4,774 $ 7,601 $ 28,507 (1) Estimated amortization expense for technology is based on costs accumulated as of March 31, 2025. These estimates will change as new costs are incurred and until the software is placed into service. 13. Leases The following summarizes lease costs for operating leases: Years Ended March 31, 2025 2024 2023 Operating lease costs $ 14,199 $ 16,028 $ 14,203 Variable and short-term lease costs 14,848 8,964 8,023 Total lease costs $ 29,047 $ 24,992 $ 22,226 The following summarizes weighted average information associated with the measurement of remaining operating leases: March 31, 2025 2024 Weighted average remaining lease term 4.8 years 5.4 years Weighted average discount rate 15.4 % 15.8 % The following summarizes supplemental cash flow information related to operating leases: Years Ended March 31, 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities - operating cash flows used by operating leases $ 14,145 $ 15,764 $ 13,607 Right-of-use assets obtained in exchange for new operating leases - noncash 3,964 10,444 9,967 58 The following reconciles maturities of operating lease liabilities to the lease liabilities reflected in the consolidated balance sheets as of March 31, 2025: 2026 $ 12,099 2027 8,342 2028 5,487 2029 3,476 2030 2,957 Thereafter 6,880 Total future minimum lease payments 39,241 Less: amounts related to imputed interest 11,143 Present value of future minimum lease payments 28,098 Less: operating lease liabilities, current 8,514 Operating lease liabilities, non-current $ 19,584 14. Property, Plant, and Equipment, Net The following summarizes property, plant, and equipment, net: March 31, 2025 2024 Land $ 26,815 $ 29,144 Buildings 45,982 45,065 Machinery and equipment 109,247 97,423 Total 182,044 171,632 Less: accumulated depreciation (1) ( 43,868 ) ( 37,474 ) Total property, plant, and equipment, net $ 138,176 $ 134,158 (1) This balance was partially reduced by the disposition of certain fully depreciated assets during the year ended March 31, 2025. The following summarizes depreciation expense recorded in cost of goods and services sold and selling, general, and administrative expenses: Years Ended March 31, 2025 2024 2023 Depreciation expense recorded in cost of goods and services sold $ 13,264 $ 11,806 $ 10,132 Depreciation expense recorded in selling, general, and administrative expenses 2,380 2,646 2,346 Total depreciation $ 15,644 $ 14,452 $ 12,478 59 15. Debt Arrangements The following table summarizes the Company’s debt financing as of the dates set forth below: Outstanding Interest March 31, Long Term Debt Repayment Schedule by Fiscal Year Rate 2025 2024 2026 2027 2028 2029 2030 Later Senior secured credit facility: ABL Credit Facility 8.1 % (1) $ — $ — $ — $ — $ — $ — $ — $ — Senior secured notes: 10.0% Notes Due 2024 10.0 % (1) — 20,247 — — — — — — 8.5% Notes Due 2027 (2) 8.5 % (1) 145,820 178,146 — — 145,820 — — — Senior secured term loans: Intabex Term Loans (3) 13.2 % (1) 187,144 186,659 — — 187,144 — — — Pyxus Term Loans (4) 13.2 % (1) 121,886 132,819 — — 121,886 — — — Other debt: Other long-term debt 8.8 % (1) 12 157 12 — — — — — Notes payable (5) 9.4 % (1) 395,030 499,312 395,030 — — — — — Total debt $ 849,892 $ 1,017,340 $ 395,042 $ — $ 454,850 $ — $ — $ — Short-term (5) $ 395,030 $ 499,312 Long-term: Current portion of long-term debt $ 12 $ 20,294 Long-term debt 454,850 497,734 Total $ 454,862 $ 518,028 Letters of credit $ 7,790 $ 5,070 (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) Balance of $ 145,820 is net of a debt discount of $ 2,519 . Total repayment at maturity is $ 148,339 . (3) Balance of $ 187,144 is net of a debt discount of $ 1,889 . Total repayment at maturity is $ 189,033 , which includes a $ 2,000 exit fee payable upon repayment. (4) Balance of $ 121,886 is net of a debt premium of $ 1,681 . Total repayment at maturity is $ 120,205 . (5) Primarily seasonal lines of credit. Outstanding Senior Secured Debt ABL Credit Facility Our wholly owned subsidiary, Pyxus Holdings, Inc. ("Pyxus Holdings"), certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the "Borrowers"), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc. ("Pyxus Parent"), as guarantors, entered into an ABL Credit Agreement (as amended, the "ABL Credit Agreement"), dated as of February 8, 2022, by and among Pyxus Holdings, as Borrower Agent, the Borrowers and parent guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as Administrative Agent and Collateral Agent, which was subsequently amended on May 23, 2023 and October 24, 2023. 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. The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to a maximum principal amount of $ 120,000 , subject to the limitations described below in this paragraph. The ABL Credit Facility includes a $ 20,000 uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the ABL Credit Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility not to exceed a maximum principal amount of 60 $ 140,000 . The amount available under the ABL Credit Facility is limited by a borrowing base consisting of certain eligible accounts receivable and inventory, reduced by specified reserves, as follows: • 85 % of eligible accounts receivable, plus • the lesser of (i) 85 % of the book value of Eligible Extended Terms Receivables (as defined in the ABL Credit Agreement) and (ii) $ 5,000 , plus • 90 % of eligible credit insured accounts receivable, plus • the lesser of (i) 70 % of eligible inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits) or (ii) 85 % of the net-orderly-liquidation value percentage of eligible inventory, minus • applicable reserves. At March 31, 2025, no borrowings under the ABL Credit Facility were outstanding and $ 120,000 was available for borrowing under the ABL Credit Facility. Weighted average borrowings outstanding under the ABL Credit Facility during the fiscal year ended March 31, 2025 were $ 56,332 . 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. The ABL Credit Facility may be prepaid from time to time, in whole or in part, without prepayment or premium, subject to a termination fee upon the permanent reduction of commitments under the ABL Credit Facility of 300 basis points for terminations in the first year after entry into the ABL Credit Agreement, 200 basis points for terminations in the second year and 100 basis points for termination in the third year. In addition, customary mandatory prepayments of the loans under the ABL Credit Facility are required upon the occurrence of certain events including, without limitation, outstanding borrowing exposures exceeding the borrowing base, certain dispositions of assets outside of the ordinary course of business in respect of certain collateral securing the ABL Credit Facility and certain casualty and condemnation events. With respect to base rate loans, accrued interest is payable monthly in arrears and, with respect to 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. Covenants. The ABL Credit Agreement governing the ABL Credit Facility contains (i) a springing covenant requiring that the Company’s fixed charge coverage ratio be no less than 1.10 to 1.00 during any Dominion Period and (ii) a covenant requiring Domestic Availability greater than $ 20,000 at all times until audited financial statements for fiscal year ending March 31, 2023 are delivered under the ABL Credit Agreement. 61 The ABL Credit Agreement governing the ABL Credit Facility contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s ability to, among other things: • incur additional indebtedness or issue disqualified stock or preferred stock, • make investments, • pay dividends and make other restricted payments, • sell certain assets, • create liens, • enter into sale and leaseback transactions, • consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets, • enter into transactions with affiliates, and • designate subsidiaries as Unrestricted Subsidiaries (as defined in the ABL Credit Agreement). On March 31, 2025, the Borrowers were in compliance with the covenants under the ABL Credit Agreement. Intabex Term Loans Pursuant to (i) an exchange offer (the "DDTL Facility Exchange") made to, and accepted by, holders of 100.0 % of the outstanding term loans (the "DDTL Term Loans") under the Amended and Restated Term Loan Credit Agreement, effectuated pursuant to that certain Amendment and Restatement Agreement, dated as of June 2, 2022 (the "DDTL Credit Agreement"), by and among Intabex Netherlands B.V., as borrower ("Intabex"), the guarantors party thereto, the administrative agent and collateral agent thereunder, and the several lenders from time to time party thereto and (ii) an exchange offer (the "Exit Facility Exchange") made to, and accepted by, holders of 100.0 % of the outstanding term loans (the "Exit Term Loans") under the Exit Term Loan Credit Agreement, dated as of August 24, 2020 (the "Exit Term Loan Credit Agreement"), by and among Pyxus Holdings, as borrower, the guarantors party thereto, the administrative agent and collateral agent thereunder, and the several lenders from time to time party thereto, on February 6, 2023, Pyxus Holdings entered into the Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "Intabex Term Loan Credit Agreement"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus (US) LLC ("Alter Domus"), as administrative agent and senior collateral agent. The Intabex Term Loan Credit Agreement established a term loan credit facility in an aggregate principal amount of approximately $ 189,033 (the "Intabex Credit Facility"), under which term loans in the full aggregate principal amount of the Intabex Credit Facility (the "Intabex Term Loans") were deemed made in exchange for (i) $ 100,000 principal amount of the DDTL Term Loans, plus an additional $ 2,000 on account of the exit fee payable under the DDTL Credit Agreement and (ii) approximately $ 87,033 principal amount of Exit Term Loans, representing 40.0 % of the outstanding principal amount thereof (including the applicable accrued and unpaid PIK interest thereon). The Intabex Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum. The Intabex Term Loans are stated to mature on December 31, 2027. The Intabex Term Loans may be prepaid from time to time, in whole or in part, without prepayment or penalty. With respect to alternate base rate loans, accrued interest is payable quarterly in arrears on the last business day of each calendar quarter and, with respect to SOFR loans, accrued interest is payable on the last day of each applicable interest period but no less frequently than every three months. The Intabex Term Loan Credit Agreement contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ ability to, among other things, incur additional indebtedness or issue disqualified stock or preferred stock; make investments; pay dividends and make other restricted payments; sell certain assets; incur liens; consolidate, merge, sell or otherwise dispose of all or substantially all their assets; enter into transactions with affiliates; designate subsidiaries as unrestricted subsidiaries; and, in the case of Intabex, undertake business activities and sell certain subsidiaries. On March 31, 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"), 62 under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans" and, together with the Intabex Term Loans, the "New Term Loans") were deemed made in exchange for 60.0 % of the outstanding principal amount of Exit Term Loans (including the applicable accrued and unpaid PIK interest thereon). The Pyxus Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum. The Pyxus Term Loans are stated to mature on December 31, 2027. The Pyxus Term Loans may be prepaid from time to time, in whole or in part, without prepayment or penalty. With respect to alternate base rate loans, accrued interest is payable quarterly in arrears on the last business day of each calendar quarter and, with respect to SOFR loans, accrued interest is payable on the last day of each applicable interest period but no less frequently than every three months. The Pyxus Term Loan Credit Agreement contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ ability to, among other things, incur additional indebtedness or issue disqualified stock or preferred stock; make investments; pay dividends and make other restricted payments; sell certain assets; incur liens; consolidate, merge, sell or otherwise dispose of all or substantially all their assets; enter into transactions with affiliates; and designate subsidiaries as unrestricted subsidiaries. On March 31, 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 Pursuant to an exchange offer (the "Notes Exchange" and, together with the DDTL Facility Exchange and the Exit Facility Exchange, the "Debt Exchange Transactions") made by Pyxus Holdings and accepted by holders of approximately 92.7 % of the aggregate principal amount of the outstanding 10.0 % Senior Secured First Lien Notes due 2024 issued by Pyxus Holdings (the "2024 Notes") pursuant to that certain Indenture, dated as of August 24, 2020 (the "2024 Notes Indenture"), by and among Pyxus Holdings, the guarantors party thereto and the trustee, collateral agent, registrar and paying agent thereunder, on February 6, 2023, Pyxus Holdings issued approximately $ 260,452 in aggregate principal amount of 8.5 % Senior Secured Notes due December 31, 2027 (the "2027 Notes" and, together with the New Term Loans, the "New Secured Debt") to the exchanging holders of the 2024 Notes for an equal principal amount of 2024 Notes. The 2027 Notes were issued pursuant to the Indenture, dated as of February 6, 2023 (the "2027 Notes Indenture"), among Pyxus Holdings, the guarantors party thereto, and Wilmington Trust, National Association, as trustee, and Alter Domus, as collateral agent. The 2027 Notes bear interest at a rate of 8.5 % per annum, which interest is computed 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, Pyxus Holdings may redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100.0 % of the principal amount of 2027 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date. The 2027 Notes Indenture contains customary affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ ability to, among other things, incur additional indebtedness or issue disqualified stock or preferred stock; make investments; pay dividends and make other restricted payments; sell certain assets; incur liens; consolidate, merge, sell or otherwise dispose of all or substantially all their assets; enter into transactions with affiliates; and designate subsidiaries as unrestricted subsidiaries. On March 31, 2025, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with the covenants under the 2027 Notes Indenture. Guarantees and Collateral The obligations of Pyxus Holdings under the ABL Credit Agreement and the New Secured Debt are fully and unconditionally guaranteed by the Company, Pyxus Parent and all of the Company’s domestic subsidiaries and certain of the Company’s foreign subsidiaries, subject to certain limitations (the "Senior Secured Debt Obligors"). In addition, under the Intabex Term Loan Credit Facility, Intabex and Alliance One International Tabak B.V. (which were obligors under the DDTL Term Loans) also guarantee the Intabex Credit Facility (together, the "Specified Intabex Obligors") but do not guarantee the 2027 Notes, the Pyxus Term Loans or obligations under the ABL Credit Agreement. In addition, certain assets of the Specified Intabex Obligors 63 (which were pledged as collateral for the DDTL Term Loans) are pledged as collateral to secure the Intabex Term Loans (the "Intabex Collateral") but do not secure the 2027 Notes, the Pyxus Term Loans, or obligations under the ABL Credit Agreement. On March 27, 2024, Alliance One International Tabak B.V. was merged with and into Intabex. The Senior Secured Debt Obligors’ obligations under the ABL Credit Agreement are secured by (i) a first-priority senior lien the ABL Priority Collateral (as defined in the ABL/New Secured Debt Intercreditor Agreement (as defined below)), which includes certain accounts receivable and inventory and certain related intercompany notes, cash, deposit accounts, related general intangibles and instruments, certain other related assets and proceeds of the foregoing of the Senior Secured Debt Obligors, and (ii) a junior-priority lien on substantially all assets of the Senior Secured Debt Obligors other than certain exclusions and the ABL Priority Collateral. The New Secured Debt is secured by (i) a first-priority senior lien on substantially all assets of the Senior Secured Debt Obligors other than certain exclusions and the ABL Priority Collateral and (ii) a junior-priority lien on the ABL Priority Collateral. The Intabex Term Loans are further secured by a first-priority lien on the Intabex Collateral. The obligations under the New Secured Debt share a single lien, held by Alter Domus, as senior collateral agent (the "Senior Collateral Agent"), on the Collateral (as defined below) subject to the payment waterfall pursuant to the intercreditor arrangements described below. Intercreditor Agreements The priority of the obligations under the ABL Credit Agreement and the New Secured Debt are set forth in the two intercreditor agreements entered into in connection with consummation of the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange. ABL/New Secured Debt Intercreditor Agreement . On February 6, 2023, Pyxus Holdings, Inc., the guarantors party thereto, PNC Bank, National Association, as ABL Agent, Alter Domus, as Pyxus Term Loan Administrative Agent, Intabex Term Loan Administrative Agent and Senior Collateral Agent, and Wilmington Trust, National Association, as Senior Notes Trustee entered into an Amended and Restated ABL Intercreditor Agreement, dated as of February 6, 2023 (the "ABL/New Secured Debt Intercreditor Agreement") to provide for the intercreditor relationship between, (i) on one hand, the holders of obligations under the ABL Credit Facility, the guarantees thereof and certain related obligations and (ii) on the other hand, the holders of obligations under the New Secured Debt, the guarantees thereof and certain related obligations. Pursuant to the terms of the 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. Secured Debt Intercreditor Agreement . On February 6, 2023, the New Secured Debt Obligors, together with the representative for the holders of the New Secured Debt and the Senior Collateral Agent, entered into the Intercreditor and Collateral Agency Agreement, dated as of February 6, 2023 (the "New Secured Debt Intercreditor Agreement"), pursuant to which the Senior Collateral Agent, serves as joint collateral agent for the benefit of the holders of the 2027 Notes, the Pyxus Term Loans and the Intabex Term Loans with respect to all common collateral securing such indebtedness (the "Collateral"; which excludes Intabex Collateral). The New Secured Debt Intercreditor Agreement provides that Collateral or proceeds thereof received in connection with or upon the exercise of secured creditor remedies will be distributed (subject to the provisions described in the next paragraph) first to holders of the New Secured Debt on a pro rata basis based on the aggregate principal amount of each class of New Secured Debt, and then to holders of future junior debt secured by such Collateral on a pro rata basis based on the aggregate principal amount of each class of future junior debt (and in each case permitted refinancing indebtedness thereof). Exercise of rights and remedies against the Collateral and certain rights in a bankruptcy or insolvency proceeding (including the right to object to debtor-in-possession financing or to credit bid) by the Senior Collateral Agent will be controlled first by the holders of a majority in principal amount of the New Term Loans (including, in any event, each holder holding at least 20.0 % of the New Term Loans as of February 6, 2023, provided such holder holds at least 15.0 % of the New Term Loans as of the date of determination), second, after repayment in full of the New Term Loans, by the holders of a majority in principal amount of the 2027 Notes and last, after repayment in full of the New Term Loans and the 2027 Notes, by holders of a majority in 64 principal amount of any future junior debt secured by the Collateral. Any such future junior debt will be subject to certain customary waivers of rights in a bankruptcy or insolvency proceeding in favor of the Senior Collateral Agent, including, but not limited to, with respect to debtor-in-possession financing, adequate protection, and credit bidding. Related Party Transactions The Company, Pyxus Parent and Pyxus Holdings (collectively, the "Holding Companies") entered into a Support and Exchange Agreement, effective as of December 27, 2022 (as amended, including by joinders thereto, the "Support Agreement"), with a group of creditors, including Glendon Capital Management LP, Monarch Alternative Capital LP, Nut Tree Capital Management, L.P., Intermarket Corporation and Owl Creek Asset Management, L.P. on behalf of certain funds managed by them and/or certain of their advisory clients, as applicable (collectively, the "Supporting Holders"), holding in aggregate: • approximately 99.7 % of the DDTL Term Loans outstanding under the DDTL Credit Agreement, • approximately 68.1 % of the Exit Term Loans outstanding under the Exit Term Loan Credit Agreement, and • approximately 64.1 % of the 2024 Notes outstanding under the 2024 Notes Indenture. Pursuant to the Support Agreement, the Supporting Holders agreed to participate in the DDTL Facility Exchange, the Exit Facility Exchange, and the Notes Exchange, 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. (the "Glendon Investor"), Glendon Opportunities Fund, L.P. and Glendon Opportunities Fund II, L.P., Glendon Capital Management, L.P. reported beneficial ownership of 7,939 shares of the Company’s common stock, representing approximately 31.8 % of the outstanding shares of the Company’s common stock. Based on a Schedule 13D/A filed with the SEC on January 23, 2023, by Monarch Alternative Capital LP (the "Monarch Investor"), MDRA GP LP and Monarch GP LLC, Monarch Alternative Capital LP reported beneficial ownership of 6,140 shares of the Company’s common stock, representing approximately 24.6 % of the outstanding shares of the Company’s common stock. Based on a Schedule 13G/A filed with the SEC on February 10, 2022 by Owl Creek Asset Management, L.P. and Jeffrey A. Altman, Owl Creek Asset Management, L.P. is the investment manager of certain funds and reported beneficial ownership of 2,405 shares of the Company’s common stock on December 31, 2021, representing approximately 9.6 % of the outstanding shares of the Company’s common stock. A representative of the Glendon Investor and a representative of the Monarch Investor served as directors of Pyxus at the time the Company and its applicable subsidiaries entered into the Initial DDTL Credit Facility Agreement, the amendments thereto (including the DDTL Credit Agreement) and the Support Agreement, effected borrowings under the Initial DDTL Credit Facility Agreement and the DDTL Credit Agreement and commenced the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange. 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. Related Party Transactions " for additional information. Other Outstanding Debt 2024 Notes 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 65 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. 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 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 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. At March 31, 2025, the Company and its subsidiaries were in compliance with the covenants associated with the short-term seasonal lines of credit. 16. Securitized Receivables The Company sells trade receivables to unaffiliated financial institutions under various accounts receivable securitization facilities, two of which are subject to annual renewal. Under the first facility, with Finacity Corporation (the "Finacity Facility"), the Company continuously sells a designated pool of trade receivables to a special purpose entity, which sells 100 % of the receivables to an unaffiliated financial institution. Following the sale and transfer of the receivables to the special purpose entity, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. This facility requires a minimum level of deferred purchase price be retained by the Company in connection with the sales of the receivables to the unaffiliated financial institution. The Company continues to service, administer, and collect the receivables on behalf of the special purpose entity and receives a servicing fee of 0.5 % of serviced receivables per annum. As the Company estimates the expected fee it receives in return for its obligation to service these receivables is at fair value, no servicing assets or liabilities are recognized. Servicing fees are recorded as a reduction of selling, general, and administrative expenses within the statements of consolidated operations. As of March 31, 2025, the investment limit of this facility was $ 160,000 of trade receivables. Under the second facility, the Company offers trade receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. Although the Company continues to service, administer, and collect the receivables on behalf of the unaffiliated financial institution, the Company does not receive a servicing fee, and as a result, has established a servicing liability based upon unobservable inputs, primarily discounted cash flow. As of March 31, 2025, the investment limit under the second facility was $ 160,000 of trade receivables. As servicer for the Finacity Facility and the second facility, the Company may receive funds that are due to the unaffiliated financial institutions which are net settled on the next settlement date. As of March 31, 2025 and 2024, trade receivables, net in the consolidated balance sheets has been reduced by $ 2,190 and $ 15,036 as a result of the net settlement, respectively. As of March 31, 2025 and 2024, accrued expenses and other current liabilities in the consolidated balance sheets includes $ 0 and $ 10,279 of net payables for the Finacity Facility, respectively. Refer to " Note 19. Fair Value Measurements " for additional information. Under the other facilities, the Company offers trade receivables for sale to unaffiliated financial institutions, which are then subject to acceptance by the unaffiliated financial institutions. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. As of March 31, 2025, the investment limits under these other facilities were variable based on qualifying sales. 66 The following summarizes the Company's accounts receivable outstanding in the securitization facilities, which represents trade receivables sold into the program that have not been collected from the customer, and related beneficial interests, which represents the Company's residual interest in receivables sold that have not been collected from the customer: March 31, 2025 2024 Receivables outstanding in facility $ 355,246 $ 170,267 Beneficial interest 29,354 15,036 Cash proceeds from the sale of trade receivables is comprised of a combination of cash and a deferred purchase price receivable. Deferred purchase price receivable is realized after the collection of the underlying trade receivables sold by the purchasers. The following summarizes the Company's cash purchase price and deferred purchase price: Years Ended March 31, 2025 2024 2023 Cash proceeds: Cash purchase price $ 981,560 $ 649,680 $ 696,404 Deferred purchase price 188,312 175,911 165,262 17. Guarantees In certain markets, the Company guarantees bank loans for suppliers to finance their crops. The Company also guarantees bank loans of certain unconsolidated subsidiaries. The following summarizes amounts guaranteed and the fair value of those guarantees: March 31, 2025 2024 Amounts guaranteed (not to exceed) $ 110,660 $ 97,411 Amounts outstanding under guarantee (1) 80,045 71,427 Fair value of guarantees 6,459 5,097 Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing 13,787 34,571 (1) Most of the guarantees outstanding at March 31, 2025 expire within one year . 18. Derivative Financial Instruments The Company uses forward or option currency contracts to manage risks associated with foreign currency exchange rates on foreign operations. These contracts are for green tobacco purchases, processing costs, and selling, general, and administrative expenses. The Company recorded a net (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. Fair Value Measurements " for additional information. The following summarizes the U.S. Dollar notional amount of derivative contracts outstanding: March 31, 2025 2024 U.S. Dollar notional outstanding $ 49,500 $ — 67 19. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The inputs used to measure fair value are prioritized based on a three-level valuation hierarchy, which is comprised of observable and non-observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These three levels of inputs create the following fair value hierarchy: • Level 1 inputs - Quoted prices in active markets for identical assets or liabilities. • Level 2 inputs - Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and observable inputs (other than quoted prices) for the assets or liabilities. • Level 3 inputs - Unobservable inputs for the assets or liabilities. The following summarizes assets and liabilities measured at fair value on a recurring basis: March 31, 2025 2024 Level 2 Level 3 Total Assets / Liabilities at Fair Value Level 2 Level 3 Total Assets / Liabilities at Fair Value Financial assets: Derivative financial instruments $ 982 $ — $ 982 $ — $ — $ — Securitized beneficial interests — 29,354 29,354 — 15,036 15,036 Total assets $ 982 $ 29,354 $ 30,336 $ — $ 15,036 $ 15,036 Financial liabilities: Derivative financial instruments $ 57 $ — $ 57 $ — $ — $ — Long-term debt (1) 433,885 12 433,897 462,987 160 463,147 Guarantees — 6,459 6,459 — 5,097 5,097 Total liabilities $ 433,942 $ 6,471 $ 440,413 $ 462,987 $ 5,257 $ 468,244 (1) This fair value measurement disclosure does not affect the consolidated balance sheets. Level 2 measurements • Debt: The fair value of debt is based on the market price for similar financial instruments or model-derived valuations with observable inputs. The primary inputs to the valuation include market expectations, the Company's credit risk, and the contractual terms of the debt instrument. • Derivatives: The fair value of derivatives is based on the discounted cash flow analysis of the expected future cash flows. The primary inputs to the valuation include forward yield curves, implied volatilities, interest rates, and credit valuation adjustments. Level 3 measurements • Guarantees: The fair value of guarantees is based on the discounted cash flow analysis of the expected future cash flows or historical loss rates. The historical loss rate was weighted by the principal balance of the loans. • Securitized beneficial interests: The fair value of securitized beneficial interests is based on the present value of future expected cash flows. The discount rate was weighted by the outstanding interest. Payment speed was weighted by the avera ge days outstanding. • Debt: The fair value of debt is based on the present value of future payments. The primary inputs to this valuation include treasury notes interest and borrowing rates . The borrowing rates were weighted by average loans outstanding. 68 Reconciliation of Change in Recurring Level 3 Balances The following summarizes the changes in Level 3 instruments measured on a recurring basis. Securitized Beneficial Interests Long-Term Debt Guarantees Beginning balance at March 31, 2023 $ 19,522 $ 514 $ 5,262 Sales of receivables/issuance of guarantees 162,229 — 7,184 Settlements ( 154,659 ) ( 354 ) ( 4,801 ) Losses recognized in earnings ( 12,056 ) — ( 2,548 ) Ending balance at March 31, 2024 $ 15,036 $ 160 $ 5,097 Sales of receivables/issuance of guarantees 244,886 — 7,639 Settlements ( 212,964 ) ( 148 ) ( 2,421 ) Losses recognized in earnings ( 17,604 ) — ( 3,856 ) Ending balance at March 31, 2025 $ 29,354 $ 12 $ 6,459 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. Information about Fair Value Measurements Using Significant Unobservable Inputs The following summarizes significant unobservable inputs and the valuation techniques utilized: Valuation Technique Unobservable Input Range (Weighted Average) Securitized Beneficial Interests Discounted Cash Flow Discount Rate 3.0 % to 6.9 % Payment Speed 64 days to 91 days Guarantees Historical Loss Historical Loss 0.7 % to 37.3 % Valuation Technique Unobservable Input Range (Weighted Average) Securitized Beneficial Interests Discounted Cash Flow Discount Rate 5.6 % to 7.9 % Payment Speed 58 days to 83 days Guarantees Historical Loss Historical Loss 0.7 % to 37.3 % 20. Pension and Other Postretirement Benefits Defined Benefit Plans The Company terminated one of its defined benefit pension plans in the United Kingdom ("U.K. Pension Plan") during the year ended March 31, 2024. The U.K. Pension Plan was over-funded. During the year ended March 31, 2024, the Company utilized the surplus assets to pay termination fees and received a $ 1,106 cash distribution from the plan termination. The Company recorded a noncash pension settlement charge of $ 12,008 during the year ended March 31, 2024, which included the disposition of the U.K. Pension Plan assets and the reclassification of $ 3,511 unrecognized net pension losses, net of $ 1,170 tax benefit, 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. ("U.S. Pension Plan") during the year ended March 31, 2023. The Company settled benefits with vested participants that elected a lump sum payout and made a cash contribution of $ 5,300 to fully fund the U.S. Pension Plan liabilities that was used to purchase a group annuity contract to administer payments to the remaining U.S. Pension Plan participants. The Company recorded a noncash pension settlement charge of $ 2,588 for the year ended March 31, 2023, which included the recognition of unrecognized net pension gains within accumulated other comprehensive income into the Company's consolidated statements of operations. 69 The following summarizes benefit obligations, plan assets, and funded status for the defined benefit pension plans: U.S. Plans Non-U.S. Plans Total March 31, 2025 Benefit obligation, beginning $ 33,694 $ 21,266 $ 54,960 Service cost — 235 235 Interest cost 1,679 1,038 2,717 Actuarial losses (gains) 838 ( 1,132 ) ( 294 ) Plan settlements — ( 224 ) ( 224 ) Effects of currency translation — ( 51 ) ( 51 ) Benefits paid ( 3,334 ) ( 1,561 ) ( 4,895 ) Benefit obligation, ending $ 32,877 $ 19,571 $ 52,448 Fair value of plan assets, beginning $ — $ 22,380 $ 22,380 Actual return on plan assets — 1,011 1,011 Employer contributions 3,334 815 4,149 Plan settlements — ( 224 ) ( 224 ) Benefits paid ( 3,334 ) ( 1,561 ) ( 4,895 ) Fair value of plan assets, ending $ — $ 22,421 $ 22,421 Funded status of the plan $ ( 32,877 ) $ 2,850 $ ( 30,027 ) U.S. Plans Non-U.S. Plans Total March 31, 2024 Benefit obligation, beginning $ 35,710 $ 44,671 $ 80,381 Service cost — 181 181 Interest cost 1,705 1,780 3,485 Actuarial (gains) losses ( 538 ) 7,743 7,205 Plan settlements — ( 29,957 ) ( 29,957 ) Effects of currency translation — ( 17 ) ( 17 ) Benefits paid ( 3,183 ) ( 3,135 ) ( 6,318 ) Benefit obligation, ending $ 33,694 $ 21,266 $ 54,960 Fair value of plan assets, beginning $ — $ 52,027 $ 52,027 Actual return on plan assets — 3,171 3,171 Employer contributions 3,183 896 4,079 Plan settlements — ( 31,064 ) ( 31,064 ) Effects of currency translation — 485 485 Benefits paid ( 3,183 ) ( 3,135 ) ( 6,318 ) Fair value of plan assets, ending $ — $ 22,380 $ 22,380 Funded status of the plan $ ( 33,694 ) $ 1,114 $ ( 32,580 ) The following summarizes amounts reported in the consolidated balance sheets for the defined benefit pension plans: U.S. Plans Non-U.S. Plans March 31, March 31, 2025 2024 2025 2024 Noncurrent benefit asset recorded in other noncurrent assets $ — $ — $ 8,752 $ 7,562 Accrued current benefit liability recorded in accrued expenses and other current liabilities ( 3,313 ) ( 3,341 ) ( 729 ) ( 1,065 ) Accrued noncurrent benefit liability recorded in pension, postretirement, and other long-term liabilities ( 29,564 ) ( 30,353 ) ( 5,173 ) ( 5,383 ) Funded status of the plan $ ( 32,877 ) $ ( 33,694 ) $ 2,850 $ 1,114 70 The following summarizes pension obligations for the defined benefit pension plans: U.S. Plans Non-U.S. Plans (1) March 31, March 31, 2025 2024 2025 2024 Information for pension plans with accumulated benefit obligation in excess of plan assets: Projected benefit obligation $ 32,877 $ 33,694 $ 5,902 $ 6,448 Accumulated benefit obligation 32,877 33,694 5,448 5,816 (1) Certain of the Company's non-U.S. defined benefit pension plans in Europe were over-funded as of March 31, 2025 and 2024. The following summarizes activity in accumulated other comprehen sive income for the defined benefit plans: U.S. and Non-U.S. Pension U.S. and Non-U.S. Post-retirement Total Prior service cost $ ( 82 ) $ — $ ( 82 ) Net actuarial gains 5,883 1,992 7,875 Deferred taxes 831 ( 289 ) 542 Balance at March 31, 2023 $ 6,632 $ 1,703 $ 8,335 Prior service cost $ 50 $ — $ 50 Net actuarial gains 5,855 ( 783 ) 5,072 Deferred taxes ( 940 ) 249 ( 691 ) Total change for 2024 $ 4,965 $ ( 534 ) $ 4,431 Prior service cost $ ( 32 ) $ — $ ( 32 ) Net actuarial gains 11,738 1,209 12,947 Deferred taxes ( 109 ) ( 40 ) ( 149 ) Balance at March 31, 2024 $ 11,597 $ 1,169 $ 12,766 Prior service cost $ 13 $ — $ 13 Net actuarial gains ( 100 ) 28 ( 72 ) Deferred taxes ( 118 ) ( 73 ) ( 191 ) Total change for 2025 $ ( 205 ) $ ( 45 ) $ ( 250 ) Prior service cost $ ( 19 ) $ — $ ( 19 ) Net actuarial gains 11,638 1,237 12,875 Deferred taxes ( 227 ) ( 113 ) ( 340 ) Balance at March 31, 2025 $ 11,392 $ 1,124 $ 12,516 71 The following assumptions were used to determine the expense for the pension plans: U.S. Plans Non-U.S. Plans March 31, March 31, 2025 2024 2023 2025 2024 2023 Discount rate 5.33 % 5.08 % 3.75 % 5.37 % 4.94 % 2.98 % 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 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: U.S. Plans Non-U.S. Plans March 31, March 31, 2025 2024 2023 2025 2024 2023 Discount rate 5.37 % 5.33 % 5.08 % 5.75 % 5.37 % 4.94 % Rate of increase in future compensation Not applicable Not applicable Not applicable 7.52 % 10.42 % 5.72 % Plan Assets The following summarizes asset allocations and the percentage of the fair value of plan assets by asset category: Non-U.S. Plans March 31, 2025 2024 Asset category: Cash and cash equivalents 96.1 % 1.6 % Equity securities — % 57.7 % Debt securities — % 36.0 % Real estate and other investments 3.9 % 4.7 % Total 100.0 % 100.0 % The fair values for the pension plans by asset category are as fol lows: Non-U.S. Pension Plans March 31, 2025 March 31, 2024 Total Level 1 Total Level 1 Cash and cash equivalents $ 21,538 $ 21,538 $ 374 $ 374 U.S. equities / equity funds — — 8,616 8,616 International equities / equity funds — — 4,290 4,290 U.S. fixed income funds — — 5,578 5,578 International fixed income funds — — 2,477 2,477 Real estate and other (1) 883 — 1,045 1,045 Total $ 22,421 $ 21,538 $ 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. 72 Postretirement Health and Life Insurance Benefits The following summarizes benefit obligations, plan assets, and funded status for the postretirement health and life insurance benefits plans: U.S. Plans Non-U.S. Plans Total March 31, 2025 Benefit obligation, beginning $ 3,525 $ 1,580 $ 5,105 Service cost 2 — 2 Interest cost 177 129 306 Effect of currency translation — ( 199 ) ( 199 ) Actuarial (gains) losses ( 177 ) 19 ( 158 ) Benefits paid ( 156 ) ( 143 ) ( 299 ) Benefit obligation, ending 3,371 1,386 4,757 Funded status of the plan $ ( 3,371 ) $ ( 1,386 ) $ ( 4,757 ) U.S. Plans Non-U.S. Plans Total March 31, 2025 Accrued current benefit liability recorded in accrued expenses and other current liabilities $ ( 334 ) $ ( 133 ) $ ( 467 ) Accrued non-current benefit liability recorded in pension, postretirement, and other long-term liabilities ( 3,037 ) ( 1,253 ) ( 4,290 ) Funded status of the plan $ ( 3,371 ) $ ( 1,386 ) $ ( 4,757 ) U.S. Plans Non-U.S. Plans Total March 31, 2024 Benefit obligation, beginning $ 3,369 $ 1,115 $ 4,484 Service cost 4 — 4 Interest cost 161 117 278 Effect of currency translation — 10 10 Actuarial losses 160 472 632 Benefits paid ( 169 ) ( 134 ) ( 303 ) Benefit obligation, ending 3,525 1,580 5,105 Funded status of the plan $ ( 3,525 ) $ ( 1,580 ) $ ( 5,105 ) U.S. Plans Non-U.S. Plans Total March 31, 2024 Accrued current benefit liability recorded in accrued expenses and other current liabilities $ ( 337 ) $ ( 130 ) $ ( 467 ) Accrued non-current benefit liability recorded in pension, postretirement, and other long-term liabilities ( 3,188 ) ( 1,450 ) ( 4,638 ) Funded status of the plan $ ( 3,525 ) $ ( 1,580 ) $ ( 5,105 ) 73 The following assumptions were used to determine postretirement benefit obligations: U.S. Plans Non-U.S. Plans March 31, March 31, 2025 2024 2023 2025 2024 2023 Discount rate 5.45 % 5.35 % 5.09 % 11.67 % 9.72 % 10.58 % Health care cost trend rate assumed for next year 6.47 % 6.58 % 5.49 % 8.94 % 8.75 % 9.40 % Cash Flows The Company expects to contribute the following to its benefit plans: Pension Benefits Postretirement Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Total Fiscal Year 2026 $ 3,313 $ 729 $ 334 $ 133 $ 4,509 The Company's contributions to the defined contribution plans are as follows: Years Ended March 31, 2025 2024 2023 Contributions $ 4,459 $ 4,395 $ 5,478 The following summarizes the expected benefit payments to be paid in future fiscal years, as of March 31, 2025: Pension Benefits Other Benefits U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Total 2026 $ 3,313 $ 1,729 $ 334 $ 133 $ 5,509 2027 3,246 1,627 323 136 5,332 2028 3,172 1,550 313 140 5,175 2029 3,091 1,586 302 143 5,122 2030 3,002 1,764 292 146 5,204 Thereafter 13,424 10,552 1,293 787 26,056 Total $ 29,248 $ 18,808 $ 2,857 $ 1,485 $ 52,398 21. Contingencies and Other Information Brazilian Tax Credits The government in the Brazilian State of Parana ("Parana") issued a tax assessment on October 26, 2007, with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil. At March 31, 2025, the assessment for intrastate trade tax credits taken is $ 2,299 and the total assessment including penalties and interest is $ 9,774 . 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. Other 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. However, should one or more of these matters be resolved in a manner adverse to its current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material. 74 22. Other Comprehensive Income (Loss) The following summarizes changes in each component of accumulated other comprehensive income, net of tax, attributable to the Company: Currency Translation Adjustment Pensions, Net of Tax Derivatives, Net of Tax Accumulated Other Comprehensive Income Balances at March 31, 2022 $ ( 8,873 ) $ 6,328 $ 6,349 $ 3,804 Other comprehensive income (loss) before reclassifications 2,481 1,873 1,750 6,104 Amounts reclassified to net loss, net of tax — 134 ( 4,527 ) ( 4,393 ) Other comprehensive income (loss), net of tax 2,481 2,007 ( 2,777 ) 1,711 Balances at March 31, 2023 $ ( 6,392 ) $ 8,335 $ 3,572 $ 5,515 Other comprehensive income (loss) before reclassifications 700 ( 4,436 ) 1,698 ( 2,038 ) Amounts reclassified to net income, net of tax — 8,867 ( 4,558 ) 4,309 Other comprehensive income (loss), net of tax 700 4,431 ( 2,860 ) 2,271 Balances at March 31, 2024 $ ( 5,692 ) $ 12,766 $ 712 $ 7,786 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 2025 2024 Pension and postretirement plans (1) : Settlement loss $ — $ 4,681 Loss on pension settlement Actuarial (gain) loss ( 581 ) 6,780 Interest expense Amortization of prior service cost 3 4 Interest expense Amounts reclassified from equity to the income statement, gross ( 578 ) 11,465 Tax effects of amounts reclassified from accumulated other comprehensive income to net income 266 ( 2,598 ) Amounts reclassified from equity to the income statement, net $ ( 312 ) $ 8,867 (1) Amounts are included in net periodic benefit costs for pension and postretirement plans. 75 Years Ended March 31, Affected Line Item in the Consolidated Statements of Operations 2025 2024 2023 Derivatives: 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. 23. Government Assistance 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. 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. 24. Equity-Based Compensation 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. The 76 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) 956 $ 3.50 Granted 862 3.41 Canceled or forfeited ( 94 ) 3.50 Nonvested, March 31, 2025 1,724 $ 3.46 (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 589 $ — Granted 605 4.36 Canceled or forfeited (1) ( 642 ) 4.36 Nonvested, March 31, 2025* 553 $ 4.36 *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. 77 25. Related Party Transactions The Company engages in transactions with its equity method investees primarily for the procuring and processing of inventory. The following summarizes sales and purchases transactions with related parties: Years Ended March 31, 2025 2024 2023 Sales $ 16,512 $ 25,059 $ 22,695 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: March 31, 2025 2024 Location in Consolidated Balance Sheet Accounts receivable, related parties $ 50 $ 50 Other receivables Accounts payable, related parties 19,731 35,396 Accounts payable Advances from related parties — 12,533 Advances from customers Transactions with Significant Shareholders As described in " Note 15. Debt Arrangements ," funds managed by the Glendon Investor, funds managed by the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P., (such funds are collectively referred to as the "Investor-Affiliated Funds") entered into the Support Agreement, and received the New Secured Debt pursuant to the Debt Exchange Transactions. The Company paid a total of $ 1,575 in transaction costs incurred by the parties receiving the New Secured Debt in the Debt Exchange Transactions, of which an aggregate $ 910 related to costs paid on behalf of the Investor-Affiliated Funds. On August 24, 2020, pursuant to the Exit Term Loan Credit Agreement, Pyxus Holdings became obligated with respect to the Exit Term Loans in an aggregate principal amount of approximately $ 213,418 . The Exit Term Loans accrued interest at an annual rate equal to LIBOR plus 800 basis points or 700 basis points above base rate, as applicable. In addition to the cash interest payments, from and after August 24, 2021, the Exit Term Loans accrued "payment in kind" (PIK) interest in an annual rate equal to 100 basis points, which rate increased by an additional 100 basis points on August 24, 2022. The Exit Term Loans were exchanged upon consummation of the DDTL Facility Exchange and the Exit Facility Exchange on February 6, 2023. On April 23, 2021 (the “DDTL Closing Date”), Intabex entered into a Term Loan Credit Agreement (as amended on May 21, 2021, the "Initial DDTL Facility Credit Agreement"), dated as of April 23, 2021, by and among (i) Intabex, as borrower, (ii) the Company, Pyxus Parent, Pyxus Holdings, Alliance One International, LLC, Alliance One International Holdings, Ltd, as guarantors (collectively, the "Parent Guarantors"), (iii) the lenders thereto, which included certain funds managed by Glendon Capital Management, L.P., Monarch Alternative Capital LP, and Owl Creek Asset Management, L.P. (collectively and, together other lenders that became parties thereto as lenders, the "DDTL Facility Lenders"), and (iv) Alter Domus, as administrative agent and collateral agent. The Initial DDTL Facility Credit Agreement established a $ 120,000 delayed-draw term loan credit facility (the "Initial DDTL Facility") under which the full amount was drawn (the "Initial DDTL Loans") by March 31, 2022. The proceeds of the Initial DDTL Loans were used to provide working capital and for other general corporate purposes of Intabex, the guarantors of the Initial DDTL Loans and their subsidiaries. Interest on the aggregate principal amount of outstanding Initial DDTL Loans accrued at an annual rate of LIBOR plus 9.0 %, subject to a LIBOR floor of 1.5 %, for LIBOR loans or, for loans that are not LIBOR loans, at an annual rate of an alternative base rate (as specified in the Initial DDTL Facility Credit Agreement) plus 8.0 %. Pursuant to the Initial DDTL Facility Credit Agreement, the DDTL Facility Lenders received a non-refundable commitment fee equal to 2.0 % of the aggregate commitments under the Initial DDTL Facility, paid in cash in full on the DDTL Closing Date and netted from the proceeds of the Initial DDTL Loans borrowed on the DDTL Closing Date. The Initial DDTL Facility Credit Agreement provided for the payment by Intabex to the DDTL Facility Lenders of a non-refundable exit fee (the "Exit Fee") increasing in increments from 1.0 % for repayment on or before September 30, 2021 to 5.0 % for repayment after March 31, 2022 (whether prepaid voluntarily or paid following acceleration or at maturity). The obligations of Intabex under the Initial DDTL Facility Credit Agreement (and certain related obligations) were (a) guaranteed by the Parent Guarantors and Alliance One International Tabak B.V., then an indirect subsidiary of the Company, and each of the Company’s domestic and foreign subsidiaries that was or became a guarantor of borrowings under the Exit Term Loan Credit Agreement and (b) was secured by the pledge of all of the outstanding equity interests of (i) Alliance One 78 Brasil Exportadora de Tabacos Ltda. ("AO Brazil"), which principally operates the Company’s leaf tobacco operations in Brazil, and (ii) Alliance One International Tabak B.V., which owned a 0.001 % interest of AO Brazil. The Initial DDTL Credit Facility Agreement was amended and restated by the DDTL Credit Agreement, which established a $ 100,000 term loan credit facility (the "DDTL Term Loan Facility") and required that Intabex use the net proceeds of the DDTL Term Loans made thereunder and other funds to repay in full its obligations under the Initial DDTL Facility Credit Agreement, including the payment of fees and expenses incurred in connection with repaying borrowings under the Initial DDTL Facility and incurring the DDTL Term Loans under the DDTL Credit Agreement. The DDTL Credit Agreement provided for a 2.0 % fee due with respect to any principal payment made after the one-year anniversary of the incurrence of the DDTL Term Loans, including a payment made at maturity. Interest on the outstanding principal amount of the DDTL Term Loans accrued at an annual rate of SOFR plus 7.5 %, subject to a SOFR floor of 1.0 %, for "SOFR loans" or, for loans that are not SOFR loans, at an annual rate of an alternate base rate (as specified in the DDTL Credit Agreement and subject to a specified floor) plus 6.5 %. Pursuant to the DDTL Credit Agreement, the DDTL Facility Lenders received a non-refundable commitment fee equal to 3.0 % of the aggregate commitments under the DDTL Term Loan Facility and a closing fee equal to 1.0 % of the aggregate commitments under the DDTL Term Loan Facility, as original issue discount. Under the DDTL Credit Agreement, the obligations of Intabex under the Amended Credit Agreement (and certain related obligations) continued to be guaranteed and secured by the same guarantors of, and the same collateral securing, Intabex’s obligations under the Initial DDTL Facility Credit Agreement. The DDTL Term Loans were exchanged upon consummation of the DDTL Facility Exchange on February 6, 2023. The Initial DDTL Credit Facility Agreement and the amendments thereto (including the DDTL Credit Agreement), any and all borrowings thereunder, the related guaranty transactions, the Support Agreement, the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange, including the Intabex Term Loan Credit Agreement, the Intabex Term Loans, the Pyxus Term Loan Credit Agreement, the Pyxus Term Loans, the 2027 Notes and the 2027 Notes Indenture were approved, and determined to be on terms and conditions at least as favorable to the Company and its subsidiaries as could reasonably have been obtained in a comparable arm’s-length transaction with an unaffiliated party, by a majority of the disinterested members of the Board of Directors of Pyxus. On December 30, 2021, the Investor-Affiliated Funds received $ 14,991 of the repayment of $ 15,375 principal amount of the Initial DDTL Loans. In connection with the effectiveness of the DDTL Credit Agreement on July 28, 2022, in addition to the deemed repayment of the Initial DDTL Loans, the Investor-Affiliated Funds received $ 5,119 of the aggregate $ 5,250 in exit fee payments from the repayment of the principal amount under the Initial DDTL Facility. In addition, the Investor-Affiliated Funds received in the aggregate $ 3,900 of the total $ 4,000 in commitment and closing fees with respect to the DDTL Credit Agreement, which were reflected as original issue discount, paid to all DDTL Facility Lenders in connection with the aggregate $ 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 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. Under the 79 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. 26. Segment Information The following summarizes segment information, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the consolidated financial statements: Years Ended March 31, 2025 2024 2023 Sales and other operating revenues: Leaf $ 2,470,984 $ 2,029,615 $ 1,900,558 All Other 10,276 2,944 14,323 Consolidated sales and other operating revenues 2,481,260 2,032,559 1,914,881 Cost of goods and services sold: Leaf 2,125,756 1,714,053 1,636,378 All Other 12,520 6,171 17,486 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: (1) 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 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. 80 March 31, 2025 Leaf All Other Total Segment assets $ 1,466,400 $ 37,443 $ 1,503,843 Trade and other receivables, net 204,054 175 204,229 Equity in net assets of investee companies 90,238 6,690 96,928 Depreciation and amortization 18,772 1,562 20,334 Capital expenditures 21,137 2,977 24,114 March 31, 2024 Leaf All Other Total Segment assets $ 1,616,486 $ 41,427 $ 1,657,913 Trade and other receivables, net 187,083 336 187,419 Equity in net assets of investee companies 94,609 6,636 101,245 Depreciation and amortization 17,767 1,483 19,250 Capital expenditures 18,062 2,973 21,035 The following summarizes geographic information for sales and other operating revenues by destination of the product shipped: Years Ended March 31, 2025 2024 2023 Sales and Other Operating Revenues: China $ 497,437 $ 362,778 $ 338,174 U.S. 244,556 192,745 220,266 Indonesia 227,369 215,491 170,492 United Arab Emirates 213,321 182,687 182,306 Belgium (1) 160,337 156,085 132,456 Egypt 133,023 43,495 52,428 Turkey 84,957 62,089 50,559 Other 920,260 817,189 768,200 Total $ 2,481,260 $ 2,032,559 $ 1,914,881 (1) The Belgium destination represents a customer-owned storage and distribution center from which the tobacco will be shipped on to manufacturing facilities. The following summarizes the customers, including their respective affiliates, that account for 10% or more of total sales and other operating revenues for the respective periods, as indicated by an "x": Years Ended March 31, 2025 2024 2023 British American Tobacco x China National Tobacco Corporation x x x Japan Tobacco International x x Philip Morris International Inc. x x x 81 The following summarizes geographic information for property, plant, and equipment by location: March 31, 2025 2024 Property, Plant, and Equipment, Net: Brazil $ 33,720 $ 31,455 Malawi 26,091 28,400 Zimbabwe 24,049 22,861 U.S. 22,293 21,429 Other 11,304 11,565 Jordan 9,588 10,664 Tanzania 11,131 7,784 Total $ 138,176 $ 134,158 27. Subsequent Events Securitized Receivables 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. 82 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Pyxus International, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Pyxus International, Inc. and subsidiaries (the "Company") as of March 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended March 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Income Taxes — Accounting for Uncertainty in Income Taxes — Refer to Note 1 and Note 5 to the financial statements Critical Audit Matter Description The Company’s annual tax rate is based on its pre-tax income by jurisdiction, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties. The Company records unrecognized tax benefits in multiple jurisdictions and evaluates the future potential outcomes of tax positions, based upon interpretation of the country-specific tax law and the likelihood of future settlement. Conclusions on recognizing and measuring uncertain tax positions involved significant management estimates and judgment and included complex considerations of local tax laws and related regulations in the various jurisdictions in which the Company operates. We identified 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. 83 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 these 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 these uncertain tax positions. • 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. 84 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.