What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-03 compared with 2021-08-04 · 117 added, 80 removed, 131 unchanged (60% of the section changed)

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We believe these non-GAAP financial measures, which exclude items that we believe are not indicative of our core operating results, provide investors with important information that is useful in understanding our business results and trends.

Results for our Tobacco Operations segment improved on higher African carryover tobacco shipments and a favorable tobacco product mix in the three months ended June 30, 2021, compared to the three months ended June 30, 2020.

Our Ingredients Operations segment, which includes our October 2020 acquisition of Silva International, Inc.

(“Silva”), delivered very strong performance in the three months ended June 30, 2021.

We are beginning to see the positive outcome from our capital allocation strategy, which we put in place in May 2018 with the goal of ensuring that we are well positioned for the future.

Investments in our tobacco business have enabled us to expand the supply chain services we provide our customers and to create footprint rationalization efficiencies, and we are seeing the returns from those investments in our results.

Our plant-based ingredients platform is coming together nicely;

we continue to

believe we are on track for our ingredients businesses to meet our previously announced goal of representing 10% to 20% of our results in fiscal year 2022.

We are excited about the performance of our investments thus far and will continue to seek prudent, strategic opportunities to enhance our businesses and return value to our shareholders.

Our tobacco and plant-based ingredients businesses are both currently performing according to our plans.

Like other industries, we are seeing some logistical constraints around the world with regard to vessel and container availability stemming from the ongoing COVID-19 pandemic;

however at this time, we do not know what significance such constraints may have on shipment timing or our results.

We are continuing to monitor these and other pandemic-related conditions which affect our operations.

As part of our ongoing efforts to set high standards of social and environmental performance to support a sustainable supply chain, we have developed targets to reduce greenhouse gas emissions which are consistent with the levels required to meet the goals of the Paris Agreement – limiting global warming to well-below 2°C above pre-industrial levels.

Our targets were recently approved by the Science Based Targets initiative (SBTi), and reflect our commitment to reduce our global greenhouse gas emissions by 30% by 2030.

In the six months ended September 30, 2021, tobacco operations results improved on a favorable product mix consisting of a higher percentage of lamina tobacco and fewer carryover sales of lower margin tobaccos, compared to the same period in the prior fiscal year.

In addition, our uncommitted inventory level of 11% of tobacco inventories at September 30, 2021, was significantly below our uncommitted inventory level of 16% of tobacco inventories at September 30, 2020.

At the same time, we continue to have logistical challenges related to worldwide shipping availability stemming from the ongoing COVID-19 pandemic.

To address these challenges, we are working closely with our customers to accelerate tobacco shipments in some origins where vessels and containers have been available while diligently managing slower tobacco shipments in origins with reduced container and vessel availability.

Our lamina tobacco sales volumes for the first half of fiscal year 2022 were just slightly

below those in the first half of fiscal year 2021, and we expect our tobacco crop shipments to be heavily weighted to the second half of fiscal year 2022.

We are continuing to monitor global supply chain constraints.

However, at this time, we do not know if we will encounter significant shipment timing delays which may push shipments into fiscal year 2023.

We are also seeing rising rates of inflation, increases in freight costs, and labor constraints in some locations which are driving up costs.

Although we currently do not know the significance of the impact at this time, we are anticipating these increased costs will especially affect our ingredient operations later in the fiscal year.

On October 4, 2021, we announced the closing of our purchase of Shank’s, which will enhance our plant-based ingredients platform through growing the value-added services available to our customers by adding flavors, custom packaging and bottling, and product development capabilities.

As we move into the second half of fiscal year 2022, we look to maintain our strong level of performance despite ongoing global supply chain challenges.

At the same time, we remain committed to setting high standards of social and environmental performance essential to supporting a sustainable supply chain, and recently released goals and targets around agricultural labor practices and environmental impacts, which are available on our website.

FINANCIAL HIGHLIGHTS

Three Months Ended June 30, Change

Six Months Ended September 30, Change

(in millions of dollars, except per share data) 2021 2020 $ %

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*See Reconciliation of Certain Non-GAAP Financial Measures in Other Items below.

Net income for the quarter ended June 30, 2021, was $6.4 million, or $0.26 per diluted share, compared with $7.3 million, or $0.29 per diluted share, for the quarter ended June 30, 2020.

Excluding restructuring and impairment costs and certain other non-recurring items, detailed in Other Items below, net income and diluted earnings per share increased by $6.8 million and $0.28, respectively, for the quarter ended June 30, 2021, compared to the quarter ended June 30, 2020.

Operating income of $10.6 million for the quarter ended June 30, 2021, increased by $2.1 million, compared to operating income of $8.5 million for the quarter ended June 30, 2020.

Adjusted operating income, detailed in Other Items below, of $12.6 million increased by $8.3 million for the first quarter of fiscal year 2022, compared to adjusted operating income of $4.4 million for the first quarter of fiscal year 2021.

Consolidated revenues increased by $34.2 million to $350.0 million for the three months ended June 30, 2021, compared to the same period in fiscal year 2021, on the addition of the business acquired in October 2020 in the Ingredients Operations segment, offset in part by modestly lower comparative leaf tobacco sales volumes.

Net income for the six months ended September 30, 2021, was $25.9 million, or $1.04 per diluted share, compared with $14.8 million, or $0.60 per diluted share, for the six months ended September 30, 2020.

Excluding restructuring and impairment costs and certain other non-recurring items, detailed in Other Items below, net income and diluted earnings per share increased by $14.2 million and $0.56, respectively, for the six months ended September 30, 2021, compared to the six months ended September 30, 2020.

Operating income of $40.4 million for the six months ended September 30, 2021, increased by $15.5 million, compared to operating income of $24.9 million for the six months ended September 30, 2020.

Adjusted operating income, detailed in Other Items below, of $41.6 million increased by $19.3 million for the first half of fiscal year 2022, compared to adjusted operating income of $22.4 million for the first half of fiscal year 2021.

Net income for the quarter ended September 30, 2021, was $19.5 million, or $0.78 per diluted share, compared with $7.5 million, or $0.30 per diluted share, for the quarter ended September 30, 2020.

Excluding restructuring and impairment costs and certain other non-recurring items, detailed in Other Items below, net income and diluted earnings per share increased by $7.4 million and $0.29, respectively, for the quarter ended September 30, 2021, compared to the quarter ended September 30, 2020.

Operating income of $29.8 million for the quarter ended September 30, 2021, increased by $13.4 million, compared to operating

income of $16.4 million for the quarter ended September 30, 2020.

Adjusted operating income, detailed in Other Items below, of $29.0 million increased by $11.0 million for the second quarter of fiscal year 2022, compared to adjusted operating income of $18.0 million for the second quarter of fiscal year 2021.

Consolidated revenues increased by $111.1 million to $804.0 million and by $76.9 million to $454.0 million, respectively, for the six months and quarter ended September 30, 2021, compared to the same periods in fiscal year 2021, on the addition of the business acquired in October 2020 in the Ingredients Operations segment and a better product mix and higher sales prices in the Tobacco Operations segment.

Tobacco Operations

The first fiscal quarter is historically a slow quarter for our tobacco businesses.

Operating income for the Tobacco Operations segment increased by $3.8 million to $8.9 million for the quarter ended June 30, 2021, compared with the quarter

ended June 30, 2020.

Although tobacco sales volumes were down modestly, Tobacco Operations segment results improved on carryover shipments, product mix, and increased supply chain services to customers in the quarter ended June 30, 2021, compared to the same quarter in the prior fiscal year.

Carryover crop shipments were higher in Africa in the quarter ended June 30, 2021, compared to the same quarter in the prior fiscal year, in part due to some shipments that were delayed from fiscal year 2021.

Brazil experienced an improved product mix on lower volumes in the quarter ended June 30, 2021, compared to the quarter ended June 30, 2020, when high volumes of lower margin carryover crops shipped.

Carryover tobacco crop shipments were lower and product mix was less favorable in Asia in the first quarter of fiscal year 2022, compared to the same quarter in fiscal year 2021.

In the first quarter of fiscal year 2022, we also provided increased supply chain services to customers for wrapper tobacco, compared to the same quarter in the prior fiscal year.

Selling, general, and administrative expenses for the Tobacco Operations segment were lower in the quarter ended June 30, 2021, compared to June 30, 2020, primarily on higher recoveries of value-added taxes and advances to suppliers.

Revenues for the Tobacco Operations segment of $293.8 million for the quarter ended June 30, 2021, were down $4.5 million, compared to the same period in the prior fiscal year, on modestly lower tobacco sales volumes.

Operating income for the Tobacco Operations segment increased by $12.3 million to $35.8 million and by $8.4 million to $26.9 million, respectively, for the six months and quarter ended September 30, 2021, compared to the same periods in fiscal year 2021.

Tobacco Operations segment results improved largely due to a favorable product mix consisting of a higher percentage of lamina tobacco and a reduced amount of carryover sales of lower margin tobaccos, as well as increased value-added services to customers, in the six months and quarter ended September 30, 2021, compared to the six months and quarter ended September 30, 2020.

Africa sales volumes were higher in the six months and quarter ended September 30, 2021, compared to the same periods in fiscal year 2021, on accelerated shipments as well as some shipments of carryover tobacco.

In contrast, sales volumes for Brazil were lower in the six months and quarter ended September 30, 2021, compared to the same periods in the prior year, when high volumes of lower margin carryover tobaccos shipped.

In addition, reduced vessel availability slowed shipments out of Brazil.

Our operations in Asia saw a more favorable product mix, as well as increased value-added services for customers during the quarter ended September 30, 2021, compared to the quarter ended September 30, 2020.

Selling, general, and administrative expenses for the Tobacco Operations segment were higher in the six months and quarter ended September 30, 2021, compared to the six months and quarter ended September 30, 2020, primarily due to unfavorable foreign currency comparisons, mainly remeasurement.

Revenues for the Tobacco Operations segment of $690.6 million for the six months and $396.8 million for the quarter ended September 30, 2021, were up $35.6 million and $40.1 million, respectively, compared to the same periods in the prior fiscal year, on a more favorable product mix as well as higher sales prices.

Ingredients Operations

Operating income for the Ingredients Operations segment was $4.3 million for the quarter ended June 30, 2021, compared to an operating loss of $0.7 million for the quarter ended June 30, 2020.

Results for the segment improved year-over-year on the inclusion of the October 2020 Silva acquisition.

For the quarter ended June 30, 2021, our Ingredients Operations saw strong volumes in both human and pet food categories as well as some rebound in demand from sectors that have been suffering during the ongoing COVID-19 pandemic.

Selling, general, and administrative expenses increased in the quarter ended June 30, 2021, compared to the same quarter in the prior fiscal year, on the addition of the acquired business.

Revenues for the Ingredients Operations segment of $56.2 million for the quarter ended June 30, 2021, were up $38.7 million compared to the quarter ended June 30, 2020, primarily on the addition of the revenues for the acquired business.

Operating income for the Ingredients Operations segment was $7.1 million and $2.7 million, respectively, for the six months and quarter ended September 30, 2021, compared to operating losses of $2.2 million and $1.5 million, respectively, for the six months and quarter ended September 30, 2020.

Results for the segment improved in the six months and quarter ended September 30, 2021, compared to the same periods in the prior fiscal year, on the inclusion of the October 2020 Silva acquisition.

For both the six months and quarter ended September 30, 2021, our Ingredients Operations saw strong volumes in both human and pet food categories as well as some rebound in demand from sectors that have been suffering during the ongoing COVID-19 pandemic.

Selling, general, and administrative expenses for the segment increased in the six months and quarter ended September 30, 2021, compared to the same periods in the prior fiscal year, on the addition of the acquired business.

Revenues for the Ingredients Operations segment increased by $75.5 million to $113.4 million and by $36.8 million to $57.2 million, respectively, for the six months and quarter ended September 30, 2021, compared to the six months and quarter ended September 30, 2020, primarily on the addition of the revenues for the acquired business.

COVID-19 Pandemic Impact

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In addition, our plant-based ingredients platform has seen some shifts in product mix due to the ongoing COVID-19 pandemic related to changes in customer demand.

Since March 2020, we have at times also experienced increased volatility in foreign currency exchange rates, which we believe is in part related to the continued uncertainties from COVID-19, as well as actions taken by governments and central banks in response to COVID-19.

We are currently seeing and monitoring some logistical constraints around worldwide vessel and container availability stemming from the ongoing COVID-19 pandemic.

Since March 2020, we have at times also experienced increased volatility in foreign currency exchange rates, which we believe is in part related to the continued

uncertainties from COVID-19, as well as actions taken by governments and central banks in response to COVID-19.

We are currently seeing and monitoring some logistical constraints around worldwide vessel and container availability and increased costs stemming from the ongoing COVID-19 pandemic.

We believe we currently have sufficient liquidity to meet our current obligations and our business operations remain fundamentally unchanged other than shipping delays, which could continue to impact quarterly comparisons.

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We will take additional steps and reevaluate current protocols to address the spread of COVID-19 and its impacts, as necessary, and remain thankful for the hard work of our employees and the continued support of our customers, growers, and other partners during these challenging times.

Cost of goods sold in the quarter ended June 30, 2021, increased by 10% to $287.6 million, compared with the same period in the prior fiscal year, as a result of the acquisition of the business in the Ingredients Operations segment, offset in part by variances in tobacco sales volumes and product mix.

Selling, general, and administrative costs for the quarter ended June 30, 2021, increased by $0.4 million to $49.8 million, compared to the same period in the prior fiscal year, as additional costs from the business acquisition in the Ingredients Operations segment were largely offset by lower costs in the Tobacco Operations segment primarily on higher recoveries of value-added taxes and advances to suppliers.

Interest expense for the quarter ended June 30, 2021, decreased by $0.6 million to $6.2 million as increased costs from higher debt balances were more than offset in comparison to the quarter ended June 30, 2020, which included a non-recurring interest expense item of $1.8 million associated with the settlement of an uncertain tax matter at a foreign subsidiary.

For the three months ended June 30, 2021, the Company’s effective tax rate on pre-tax income was 23.7%.

For the three months ended June 30, 2020, the Company reported a net tax benefit on pretax earnings of $5.0 million, mainly due to a $4.4 million benefit for final tax regulations issued in the quarter regarding the treatment of dividends paid by foreign subsidiaries.

Without this benefit, income taxes for the quarter ended June 30, 2020, would have been a benefit of approximately $0.6 million.

Cost of goods sold in the six months and quarter ended September 30, 2021, increased by 14% and 17% to $648.8 million and $361.3 million, respectively, compared with the same periods in the prior fiscal year, as a result of the acquisition of Silva in the Ingredients Operations segment as well as variances in product mix in the Tobacco Operations segment.

Selling, general, and administrative costs for the six months and quarter ended September 30, 2021, increased by $13.4 million to $115.2 million and by $13.0 million to $65.4 million, respectively, compared to the same periods in the prior fiscal year, on unfavorable foreign currency comparisons, mainly remeasurement, as well as additional costs from the acquisition of Silva in the Ingredients Operations segment.

Unfavorable foreign currency comparisons were approximately $6.4 million and $1.4 million, respectively, in the six months and quarter ended September 30, 2021, compared to the same periods in the prior year.

Interest expense for the six months and quarter ended September 30, 2021, increased by $0.9 million to $13.3 million and by $1.5 million to $7.1 million, respectively, largely on increased costs from higher debt balances.

Interest expense for the six months ended September 30, 2020, included a non-recurring interest expense item of $1.8 million associated with the settlement of an uncertain tax matter at a foreign subsidiary.

For the six months and quarter ended September 30, 2021, the Company’s effective tax rate on pre-tax income was 15.1% and 16.5% respectively.

In the three months ended September 30, 2021, the Company recognized a $1.7 million income tax benefit related to a foreign subsidiary.

Without this income tax benefit, the adjusted effective tax rates were 22.0% and 21.7% for the six months and quarter ended September 30, 2021, respectively.

For the six months and quarter ended September 30, 2020, the Company’s effective tax rate on pre-tax income was (14%) and 28%, respectively.

For the six months ended September 30, 2020, income taxes included a $4.4 million benefit for final tax regulations regarding the treatment of dividends paid by foreign subsidiaries.

Without this benefit, income taxes for the six months ended September 30, 2020, would have been an expense of approximately $2.5 million, or a consolidated effective tax rate of approximately 19%.

Reconciliation of Certain Non-GAAP Financial Measures

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Adjusted Operating Income Reconciliation

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

(in thousands) 2021 2020 2021 2020

Consolidated operating income $ 29,813 $ 16,351 $ 40,418 $ 24,879

Transaction costs for acquisitions (1)

1,713 1,663 1,713 1,663

Restructuring and impairment costs (2)

Fair value adjustment to contingent consideration for FruitSmart acquisition (3)

(2,532) — (2,532) (4,173)

Adjusted operating income $ 28,994 $ 18,014 $ 41,623 $ 22,369

Adjusted Net Income and Diluted Earnings Per Share

(in thousands and reported net of income taxes) Three Months Ended June 30,

(in thousands and reported net of income taxes) Three Months Ended September 30, Six Months Ended September 30,

2021 2020 2021 2020

Net income available to Universal Corporation $ 19,510 $ 7,502 $ 25,867 $ 14,776

Transaction costs for acquisitions (1)

1,713 1,663 1,713 1,663

Restructuring and impairment costs (2)

Fair value adjustment to contingent consideration for FruitSmart acquisition (3)

Interest expense related to an uncertain tax matter at a foreign subsidiary — 1,849

Income tax benefit on dividends paid from foreign subsidiaries (3)

(2,532) — (2,532) (4,173)

Interest (income) expense related to tax matters at foreign subsidiaries (470) — (470) 1,849

Income tax benefit on a final tax ruling (fiscal year 2022) and dividends paid from foreign subsidiaries (fiscal year 2021) (4)

(1,686) — (1,686) (4,421)

Adjusted net income available to Universal Corporation $ 16,535 $ 9,165 $ 23,897 $ 9,694

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Diluted earnings per share $ 0.66 $ 0.37 $ 0.96 $ 0.40

(1) The Company incurred selling, general, and administrative expenses for due diligence and other transaction costs associated with the acquisitions of Shank's (effective October 4, 2021) and Silva (effective October 1, 2020).

These costs are not deductible for U.S.

income tax purposes.

(2) Restructuring and impairment costs are included in consolidated operating income in the consolidated statements of income, but excluded for purposes of Adjusted operating income, Adjusted net income available to Universal Corporation, and Adjusted diluted earnings per share.

See Note 4 for additional information.

(2) The Company reversed a portion of the contingent consideration liability for the FruitSmart acquisition, as a result of certain performance metrics that did not meet the required threshold stipulated in the purchase agreement.

(3) The Company recognized an income tax benefit for final U.S.

tax regulations on certain dividends paid by foreign subsidiaries in a prior fiscal year.

(3) The Company reversed the contingent consideration liability for the FruitSmart acquisition, as a result of certain performance metrics that did not meet the required threshold stipulated in the purchase agreement.

(4) The Company recognized an income tax benefit in both fiscal years presented related to a favorable final income tax ruling at a foreign subsidiary (fiscal year 2022) and final U.S.

tax regulations on certain dividends paid by foreign subsidiaries (fiscal year 2021).

Liquidity and Capital Resources

Our first fiscal quarter is usually a period of significant working capital investment in both Africa and South America as tobacco crops are delivered by farmers.

We funded our working capital needs in the quarter ended June 30, 2021, using a combination of cash on hand, short-term borrowings, customer advances, and operating cash flows.

Our first six months of the fiscal year is usually a period of significant working capital investment in both Africa and South America as tobacco crops are delivered by farmers.

We funded our working capital needs in the six months ended September 30, 2021, using a combination of cash on hand, short-term borrowings, customer advances, and operating cash flows.

We expect tobacco crop shipments to be weighted to the second half of the fiscal year.

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Peak working capital requirements are generally reached during the first and second fiscal quarters.

Each geographic area follows a cycle of buying, processing, and shipping tobacco, and in many regions, we also provide agricultural materials to farmers during the growing season.

Each geographic area follows a

cycle of buying, processing, and shipping tobacco, and in many regions, we also provide agricultural materials to farmers during the growing season.

The timing of the elements of each cycle is influenced by such factors as local weather conditions and individual customer shipping requirements, which may change the level or the duration of crop financing.

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We also periodically have large cash balances that we utilize to meet our working capital requirements.

To date, COVID-19 has not had a significant impact on our operations, and we currently anticipate our current cash balances, cash flows from operations, and our available sources of liquidity will be sufficient to meet our cash requirements for at least the next twelve months.

This is, however, a rapidly evolving situation, and we cannot predict the extent, resurgence, or duration of the ongoing COVID-19 pandemic, the effects of it on the global, national or local economy, including the impacts on our ability to access capital, or its effects on our business, financial position, results of operations, and cash flows.

To date, the ongoing COVID-19 pandemic has not had a material impact on our operations, although we are seeing logistical constraints around worldwide vessel and container availability and increased costs stemming from the ongoing COVID-19 pandemic.

We currently anticipate our current cash balances, cash flows from operations, and our available sources of liquidity will be sufficient to meet our cash requirements for at least the next twelve months.

This is, however, a rapidly evolving situation, and we cannot predict the extent, resurgence, or duration of the ongoing COVID-19 pandemic, the effects of it on the global, national or local economies, including the impacts on our ability to access capital, or its effects on our business, financial position, results of operations, and cash flows.

We continue to monitor developments affecting our employees, customers and operations.

Operating Activities

We used $120.9 million in net cash flows from our operations during the quarter ended June 30, 2021, compared to generating $0.1 million from our operations in the quarter ended June 30, 2020.

Our working capital needs to fund our operations in the quarter ended June 30, 2021, were higher, compared to the quarter ended June 30, 2020, on the tobacco shipment and purchase timing as well as our acquisition of Silva in October 2020.

Crop purchase timing was slower in the quarter ended June 30, 2020, in part due to COVID-19 working restrictions.

Tobacco inventory levels increased by $233.7 million from March 31, 2021 levels to $874.4 million at June 30, 2021, on seasonal leaf purchases.

Tobacco inventory levels were $15.4 million above June 30, 2020 levels, mainly due to tobacco shipment timing.

We used $121.3 million in net cash flows from our operations during the six months ended September 30, 2021.

That amount was $28.6 million lower than during the same period last fiscal year.

Tobacco inventory levels increased by $213.7 million from March 31, 2021 levels to $854.3 million at September 30, 2021, on seasonal leaf purchases.

Tobacco inventory levels were $33.9 million below September 30, 2020 levels, mainly due to tobacco shipment timing.

We generally do not purchase material quantities of tobacco on a speculative basis.

However, when we contract directly with tobacco farmers, we are often obligated to buy all stalk positions, which may contain less marketable leaf styles.

At June 30, 2021, our uncommitted tobacco inventories were $158.6 million, or about 18% of total tobacco inventory, compared to $139.2 million, or about 22% of our March 31, 2021 tobacco inventory, and $176.3 million, or about 21% of our June 30, 2020 tobacco inventory.

At September 30, 2021, our uncommitted tobacco inventories were $94.5 million, or about 11% of total tobacco inventory, compared to $139.2 million, or about 22% of our March 31, 2021 tobacco inventory, and $141.5 million, or about 16% of our September 30, 2020 tobacco inventory.

While we target committed inventory levels of 80% or more of total tobacco inventory, the level of these uncommitted inventory percentages is influenced by timing of farmer deliveries of new crops, as well as the receipt of customer orders.

Our balance sheet accounts reflected seasonal patterns in the quarter ended June 30, 2021, on deliveries of crops by farmers in both South America and Africa.

Our balance sheet accounts reflected seasonal patterns in the six months ended September 30, 2021, on deliveries of crops by farmers in both South America, Africa, and North America.

Cash and cash equivalent balances and accounts receivable decreased by $96.5 million and $70.0 million, respectively, from March 31, 2021 levels, as we used cash, including collections on receivables, to fund seasonal working capital needs.

Advances to suppliers were $70.4 million at June 30, 2021, a reduction of $51.2 million from March 31, 2021 as tobacco crops were delivered in payment on some of those balances, net of new advances on current tobacco crops.

Notes payable and overdrafts was up $52.0 million from March 31, 2021 levels, on seasonal increases.

Accounts receivable and accounts receivable—unconsolidated affiliates were both up $57.7 million and $19.2 million, respectively for the quarter ended June 30, 2021, compared to the same quarter in the prior fiscal year, on the timing of crop purchases and shipments.

Inventories—Other were also up in the quarter ended June 30 2021, compared to the quarter ended June 30, 2020, on our acquisition of Silva.

Advances to suppliers were $82.2 million at September 30, 2021, a reduction of $39.4 million from March 31, 2021, as tobacco crops were delivered in payment on some of those balances, net of new advances on current tobacco crops.

Accounts receivable—unconsolidated affiliates and notes payable and overdrafts were up $62.5 million and $83.7 million, respectively, from March 31, 2021 levels, on seasonal increases and shipment timing.

Accounts receivable were down $31.9 million for the six months ended September 30, 2021, compared to the same period in the prior fiscal year, on the timing of crop purchases and shipments.

Inventories—Other were up $44.7 million in the six months ended September 30 2021, compared to the six months ended September 30, 2020, primarily on our acquisition of Silva.