142 unchanged sentences
Issuance of long-term debt — 150,000 —
−Removed: Repayment of long-term debt — — ( 41,147 )
Dividends paid to noncontrolling interests in subsidiaries ( 13,390 ) ( 10,881 ) ( 6,251 )
1 unchanged sentence
Dividends paid on common stock ( 76,436 ) ( 75,177 ) ( 75,368 )
−Removed: Proceeds from termination of interest rate swap agreements — — 5,428
Debt issuance costs and other ( 3,167 ) ( 1,949 ) ( 3,184 )
24 unchanged sentences
Changes in common stock
+Added: Repurchase of common stock ( 782 ) — — — ( 782 )
Accrual of stock-based compensation 6,187 — — — 6,187
5 unchanged sentences
— ( 76,707 ) — — ( 76,707 )
+Added: Repurchase of common stock — ( 2,271 ) — — ( 2,271 )
Dividend equivalents on restricted stock units (RSUs) — ( 1,070 ) — — ( 1,070 )
19 unchanged sentences
Changes in common stock
−Removed: Repurchase of common stock ( 8,562 ) — — — ( 8,562 )
Accrual of stock-based compensation 6,106 — — — 6,106
5 unchanged sentences
— ( 75,493 ) — — ( 75,493 )
−Removed: Repurchase of common stock — ( 24,895 ) — — ( 24,895 )
Dividend equivalents on restricted stock units (RSUs) — ( 1,014 ) — — ( 1,014 )
29 unchanged sentences
Dividend equivalents on restricted stock units (RSUs) — ( 1,016 ) — — ( 1,016 )
−Removed: Adoption of FASB Accounting Standards Update 2016-16 eliminating deferred income taxes on unrecognized gains on intra-entity transfers of assets other than inventory — (1,934) — — (1,934)
Other comprehensive income (loss)
41 unchanged sentences
The Company reviews the carrying value of its investments in Socotab and its other unconsolidated affiliates on a regular basis and considers whether any factors exist that might indicate an impairment in value that is other than temporary.
−Removed: For the fiscal year ended March 31, 2021, the Company determined that no such factors existed with respect to those investments.
The Company's operations in Zimbabwe are deconsolidated under accounting requirements that apply under certain conditions to foreign subsidiaries that are subject to foreign exchange controls and other government restrictions.
−Removed: The investment in the Zimbabwe operations is accounted for at cost less impairment, and was zero at March 31, 2021 and 2020.
+Added: The investment in the Zimbabwe operations is accounted for at cost and was zero at March 31, 2022 and 2021.
The Company has a net foreign currency translation loss associated with the Zimbabwe operations of approximately $ 7.2 million, which remains a component of accumulated other comprehensive loss at March 31, 2022.
4 unchanged sentences
There were no material changes in the Company’s ownership percentage in any of these subsidiaries during fiscal years 2022, 2021, or 2020.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Investments in Unconsolidated Affiliates
5 unchanged sentences
If the fair value of an unconsolidated investee is determined to be lower than its carrying value, an impairment loss is recognized.
−Removed: The determination of fair value using discounted cash flow models is normally not based on
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: observable market data from independent sources and therefore requires significant management judgment with respect to estimates of future operating earnings and the selection of an appropriate discount rate.
+Added: The determination of fair value using discounted cash flow models is normally not based on observable market data from independent sources and therefore requires significant management judgment with respect to estimates of future operating earnings and the selection of an appropriate discount rate.
The use of different assumptions could increase or decrease estimated future operating cash flows, and the discounted value of those cash flows, and therefore could increase or decrease any impairment charge related to these investments.
+Added: During the fiscal year ended March 31, 2022, the Company recognized an immaterial impairment of an investment in an equity method investee in Africa.
In its consolidated statements of income, the Company reports its proportional share of the earnings of unconsolidated affiliates accounted for on the equity method based on the pretax earnings of those affiliates, as permitted under the applicable accounting guidance.
11 unchanged sentences
Equity in net income, net of dividends, reported in the consolidated statements of cash flows $ 329 $ 296 $ ( 1,101 )
−Removed: $ 296 $ ( 1,101 ) $ ( 3,659 )
(1) In accordance with the applicable accounting guidance, dividends received from unconsolidated affiliates accounted for on the equity method that represent a return on capital (i.e., a return of earnings on a cumulative basis) are presented as operating cash flows in the consolidated statements of cash flows.
5 unchanged sentences
Calculations of earnings per share for the fiscal years ended March 31, 2022, 2021, and 2020, are provided in Note 5.
−Removed: Cash and Cash Equivalents
+Added: Cash, Restricted Cash, and Cash Equivalents
All highly liquid investments with a maturity of three months or less at the time of purchase are classified as cash equivalents.
+Added: Restricted cash is associated with the acquisition of Silva International, Inc.
+Added: ("Silva") and is recognized as a component of other noncurrent assets at March 31, 2022 and 2021.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Advances to Tobacco Suppliers
In many sourcing origins where the Company operates, it provides agronomy services and seasonal advances of seed, fertilizer, and other supplies to tobacco farmers for crop production, or makes seasonal cash advances to farmers for the procurement of those inputs.
−Removed: These advances are short term, are repaid upon delivery of tobacco to the Company, and are reported in advances to suppliers in the consolidated balance sheets.
+Added: These advances are typically short term, are repaid upon delivery of tobacco to the Company, and are reported in advances to suppliers in the consolidated balance sheets.
In several origins, the Company has made long-term advances to tobacco farmers to finance curing barns and other farm infrastructure.
4 unchanged sentences
The related valuation allowances totaled $ 19 million at March 31, 2022, and $ 18 million at March 31, 2021, and were estimated based on the Company’s historical loss information and crop projections.
−Removed: The allowances were increased by net provisions for estimated uncollectible amounts of approximately $ 5.5 million in fiscal year 2021 and $ 1.0 million in fiscal year 2020, respectively, and reduced by net recoveries of approximately $ 2.3 million in fiscal year 2019.
−Removed: These net provisions and recoveries are included in selling, general, and administrative expenses in the consolidated statements of income.
+Added: The allowances were increased by net provisions for estimated uncollectible amounts of approximately $ 6.0 million in fiscal year 2022, $ 5.5 million in fiscal year 2021, and $ 1.0 million in fiscal year 2020.
+Added: These net provisions are included in selling, general, and administrative expenses in the consolidated statements of income.
Interest on advances is recognized in earnings upon the farmers’ delivery of tobacco in payment of principal and interest.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: which interest accrual had been discontinued totaled approximately $ 4 million at March 31, 2021 and $ 5 million at March 31, 2020.
+Added: Advances on which interest accrual had been discontinued totaled approximately $ 4 million at both March 31, 2022 and 2021.
Inventories are valued at the lower of cost or net realizable value.
6 unchanged sentences
Freight costs are recorded in cost of goods sold.
−Removed: Other inventories consist primarily of unprocessed and processed food and vegetable ingredients, seed, fertilizer, packing materials, and other supplies, and are valued principally at the lower of average cost or net realizable value.
+Added: Other inventories consist primarily of unprocessed and processed food and vegetable ingredients, extracts, seed, fertilizer, packing materials, and other supplies, and are valued using the specific cost method.
Recoverable Value-Added Tax Credits
11 unchanged sentences
The Company reviews these balances on a regular basis and records valuation allowances on the credits to reflect amounts that are not expected to be recovered, as well as discounts anticipated on credits that are expected to be sold or transferred.
−Removed: At March 31, 2021 and 2020, the aggregate balances of recoverable tax credits held by the Company’s subsidiaries totaled approximately $ 49 million and $ 52 million, respectively, and the related valuation allowances totaled approximately $ 19 million at both dates.
+Added: At March 31, 2022 and 2021, the aggregate balances of recoverable tax credits held by the Company’s subsidiaries totaled approximately $ 67 million and $ 49 million, respectively, and the related valuation allowances totaled approximately $ 21 million and $19 million, respectively.
The net balances are reported in other current assets and other noncurrent assets in the consolidated balance sheets.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Property, Plant and Equipment
10 unchanged sentences
No interest was capitalized in fiscal years 2022, 2021, or 2020.
−Removed: As discussed below under "Accounting Pronouncements", the Company adopted updated comprehensive accounting guidance for leases at the beginning of fiscal year 2020 (Accounting Standards Update No.
−Removed: 2016-02, "Leases (Topic 842)" and supplemental amendments, which superseded the lease accounting requirements in Topic 840).
The Company determines if an arrangement meets the definition of a lease at inception.
3 unchanged sentences
If a lease contains a renewal option that the Company is reasonably certain to exercise, the Company accounts for the original lease term and expected renewal term in the calculation of the lease liability and right-of-use asset.
−Removed: Certain of the Company’s leases include both lease and non-lease
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: components (e.g., common-area or other maintenance costs) which are accounted for as a single lease component, as the Company has elected the practical expedient to group lease and non-lease components for real estate leases.
+Added: Certain of the Company’s leases include both lease and non-lease components (e.g., common-area or other maintenance costs) which are accounted for as a single lease component, as the Company has elected the practical expedient to group lease and non-lease components for real estate leases.
Goodwill and Other Intangibles
6 unchanged sentences
Goodwill is allocated to reporting units based on the country or location to which a specific acquisition relates, or by allocation based on expected future cash flows if the acquisition relates to more than one country or location.
−Removed: The majority of the Company’s goodwill relates to its reporting unit in Brazil and recent acquisitions of Silva International Inc.
−Removed: and FruitSmart, Inc.
−Removed: See Note 2 for additional information.
+Added: The majority of the Company’s goodwill relates to its reporting unit in Brazil and reporting units in the Ingredients operating segment.
+Added: See Notes 2 and 7 for additional information.
Significant adverse changes in the operations or estimated future cash flows for a reporting unit with recorded goodwill could result in an impairment charge.
8 unchanged sentences
In many cases, this involves the use of discounted cash flow models that are not based on observable market data from independent sources (Level 3 of the fair value hierarchy under the accounting guidance).
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Company provides deferred income taxes on temporary differences between the book and tax basis of its assets and liabilities.
−Removed: Those differences arise principally from employee benefit accruals, depreciation, deferred compensation, undistributed earnings of unconsolidated affiliates, undistributed earnings of foreign subsidiaries, goodwill, and valuation allowances on farmer advances and value-added tax credits.
+Added: Those differences arise principally from employee benefit accruals, depreciation, deferred compensation, undistributed earnings of unconsolidated affiliates, undistributed earnings of foreign subsidiaries, goodwill, intangibles, and valuation allowances on farmer advances and VAT credits.
Income taxes provided on pretax amounts recorded in accumulated other comprehensive income (loss) are released when the related pretax amounts are reclassified to earnings.
9 unchanged sentences
The Company enters into such contracts only with counterparties of good standing.
−Removed: The credit exposure related to non-performance by the counterparties and the Company is considered in determining the fair values of the derivatives, and the effect has not been
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: material to the financial statements or operations of the Company.
+Added: The credit exposure related to non-performance by the counterparties and the Company is considered in determining the fair values of the derivatives, and the effect has not been material to the financial statements or operations of the Company.
Additional disclosures related to the Company’s derivatives and hedging activities are provided in Note 11.
7 unchanged sentences
dollars creates remeasurement gains and losses that are included in earnings as a component of selling, general, and administrative expenses.
−Removed: The Company recognized net remeasurement gains of $ 8.5 million in fiscal year 2021, and net remeasurement losses of $ 16.4 million in fiscal year 2020 and $ 1.8 million in fiscal year 2019.
+Added: The Company recognized net remeasurement losses of $ 19.0 million and $ 16.4 million in fiscal years 2022 and 2020 , and net remeasurement gains of $ 8.5 million in fiscal year 2021.
Foreign currency transactions and forward foreign currency exchange contracts that are not designated as hedges generate gains and losses when they are settled or when they are marked-to-market under the prescribed accounting guidance.
These transaction gains and losses are also included in earnings as a component of selling, general, and administrative expenses.
−Removed: The Company recognized net foreign currency transaction losses of $ 1.4 million in fiscal year 2021, $ 2.9 million in fiscal year 2020, and $ 4.3 million in fiscal year 2019.
+Added: The Company recognized net foreign currency transaction gains of $ 18.0 million in fiscal year 2022 and net foreign currency transaction losses of $ 1.4 million and $ 2.9 million in fiscal years 2021 and 2020, respectively.
Revenue Recognition
6 unchanged sentences
While most of the Company’s revenue is derived from tobacco that is purchased from farmers, processed and packed in its factories, and then sold to customers, some revenue is earned from processing tobacco owned by customers and from other value-added services.
−Removed: The arrangements for processing services usually exist in specific markets where the customers contract directly with farmers for leaf production, and they have accounted for less than 5 % of total revenue on an annual basis through the fiscal year ended March 31, 2021.
+Added: The arrangements for processing services usually exist in specific markets where the customers contract directly with farmers for leaf production, and they have accounted for less than 5 % of total revenue on an annual basis through the
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: fiscal year ended March 31, 2022.
Processing and packing of leaf tobacco is a short-duration process.
1 unchanged sentence
The revenue for these services is recognized when the performance obligation is met upon the completion of processing, and the Company's operating history indicates that customer requirements for processed tobacco are consistently met upon completion of processing.
−Removed: The Company has diversified its operations through acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products.
−Removed: These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps (including sorting, cleaning, pressing, mixing, and blending), manufacture finished goods utilized in both human and pet food.
+Added: The Company has diversified its operations through acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products, as well as botanical extracts and flavors.
+Added: These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps (including sorting, cleaning, pressing, mixing, extracting, and blending), manufacture finished goods utilized in both human and pet food.
The contracts for food ingredients with customers create a performance obligation to transfer the manufactured finished goods to the customer.
5 unchanged sentences
Additional disclosures related to stock-based compensation are included in Note 15.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Estimates and Assumptions
3 unchanged sentences
Pronouncements Adopted in Fiscal Year 2021
−Removed: In October 2016, the FASB issued Accounting Standards Update No.
−Removed: 2016-16, “Income Taxes (Topic 740):
−Removed: Intra-Entity Transfers of Assets Other Than Inventory” (“ASU 2016-16”).
−Removed: ASU 2016-16 requires companies to recognize the income tax effects of intercompany sales or transfers of assets other than inventory in the income statement as income tax expense in the period the sale or transfer occurs, rather than deferring those tax effects until the asset has been sold to a third-party or otherwise recognized in earnings through depreciation, amortization, or impairment.
−Removed: In prior fiscal reporting periods, various subsidiaries of the Company sold tobacco processing equipment to other subsidiaries, and the related income effects have been deferred as required under the previous accounting guidance.
−Removed: The Company adopted ASU 2016-16 effective April 1, 2018, the beginning of fiscal year 2019.
−Removed: Under the modified retrospective transition method required by the guidance, the Company recorded a $ 1.9 million reduction to retained earnings for the fiscal year ended March 31, 2019 for the cumulative effect of recognizing the deferred income tax effects on all prior intercompany sales of equipment as of the date of adoption.
−Removed: Pronouncements Adopted in Fiscal Year 2020
The Company adopted FASB Accounting Standards Update No.
−Removed: 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) effective April 1, 2019, the beginning of the current fiscal year.
−Removed: For leases with fixed payment arrangements, ASU 2016-02 requires a lessee to recognize lease payment obligations as a lease liability and corresponding right-of-use asset in the balance sheet for the term of the lease.
−Removed: This guidance superseded Topic 840 “Leases.” The Company elected the practical expedient to not include leases with terms less than 12 months on the consolidated balance sheet.
−Removed: The Company elected the transition package of practical expedients that retained the historical lease identification, lease classification, and treatment of initial direct costs for leases prior to the adoption of ASU 2016-02.
−Removed: Additionally, as permitted under the new guidance the Company elected to not separate lease and non-lease components for certain classes of leased assets, including real estate.
−Removed: The Company elected the modified retrospective transition adoption method.
−Removed: Accordingly, on the date of adoption $ 36.6 million of operating lease right-of use assets and corresponding operating lease liabilities of $ 34.2 million were recognized on the Company's consolidated balance sheet.
−Removed: The adoption of ASU 2016-02 did not result in a cumulative-effect adjustment to retained earnings.
−Removed: The disclosures required for lease accounting are provided in Note 10.
−Removed: The Company adopted FASB Accounting Standards Update No.
−Removed: 2017-04, “Intangibles - Goodwill and Other (Topic 350)” (“ASU 2017-04”) effective July 1, 2019.
−Removed: Under current accounting guidance, the fair value of a reporting unit to which a specific goodwill balance relates is first compared to its carrying value in the financial statements (Step 1).
−Removed: If that comparison indicates that the goodwill is impaired, an implied fair value for the goodwill must then be calculated by deducting the individual fair values of all other assets and liabilities, including any unrecognized intangible assets, from the total fair value of the reporting unit.
−Removed: ASU 2017-04 simplifies the accounting guidance by eliminating Step 2 from the goodwill impairment test and using the fair value of the reporting unit determined in Step 1 to measure the goodwill impairment loss.
−Removed: There was no material impact to the consolidated financial statements from the adoption of ASU 2017-04.
−Removed: Pronouncements Adopted in Fiscal Year 2021
−Removed: The Company adopted FASB Accounting Standards Update No.
2016-13, “Financial Instruments - Credit Losses (Topic 326):
7 unchanged sentences
Under that model, implementation costs are capitalized or expensed depending on the nature of the costs and the project stage during which they are incurred.
−Removed: Capitalized implementation costs are amortized over the term of the associated hosted cloud computing arrangement service contract on a straight-line basis, unless another systematic and rational basis is more representative of the pattern in which
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: the entity expects to benefit from its right to access the hosted software.
+Added: Capitalized implementation costs are amortized over the term of the associated hosted cloud computing arrangement service contract on a straight-line basis, unless another systematic and rational basis is more representative of the pattern in which the entity expects to benefit from its right to access the hosted software.
Capitalized implementation costs would then be assessed for impairment in a manner similar to long-lived assets.
There was no material impact to the consolidated financial statements from the adoption of ASU 2018-15.
−Removed: Pronouncements to be Adopted in Future Periods
−Removed: In December 2019, the FASB issued Accounting Standards Update No.
−Removed: 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”).
+Added: Pronouncements Adopted in Fiscal Year 2022
+Added: The Company adopted FASB issued Accounting Standards Update No.
+Added: 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”) effective April 1, 2021.
ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries.
The updated guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.
−Removed: The guidance in ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, although early adoption is permitted.
−Removed: The Company will be required to adopt the new standard effective April 1, 2021, which is the beginning of its fiscal year ending March 31, 2022, and is currently evaluating the impact that the guidance will have on its consolidated financial statements.
+Added: There was no material impact to the consolidated financial statements from the adoption of ASU 2019-12.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: Pronouncements to be Adopted in Future Periods
In March 2020, the FASB issued Accounting Standards Update No.
8 unchanged sentences
BUSINESS COMBINATIONS
+Added: Acquisition of Shank's Extracts, LLC
+Added: On October 4, 2021 , the Company acquired 100 % of the capital stock of Shank's Extract's, LLC (“Shank's”), a flavors and extracts processing company , for approximately $ 100 million in cash and $ 2.4 million of additional working capital on-hand at the date of acquisition.
+Added: The acquisition of Shank's diversifies the Company's product offerings and generates new opportunities for its plant-based ingredients platform.
+Added: The goodwill and intangibles recognized for the Shank's acquisition are deductible for U.S.
+Added: income tax purposes.
+Added: The transaction was treated as an asset acquisition for U.S.
+Added: Federal tax purposes, resulting in a step-up of tax basis to fair value.
+Added: For the fiscal year ended March 31, 2022 , the Company incurred $ 2.3 million for acquisition-related transaction costs for the purchase of Shank's.
+Added: The acquisition-related costs were expensed as incurred and recorded in selling, general, and administrative expense on the consolidated statements of income.
+Added: In November 2021, the Company acquired the land and buildings utilized by Shank's operations for $ 13.3 million.
+Added: The purchase of the land and buildings resulted in the elimination of the $ 8.5 million operating lease right-of-use asset and lease liability recognized on the acquisition date for Shank's.
Acquisition of Silva International, Inc.
1 unchanged sentence
("Silva"), a natural, specialty dehydrated vegetable, fruit, and herb processing company serving global markets, for approximately $ 164 million in cash and $ 5.9 million of additional working capital on-hand at the date of acquisition.
−Removed: The acquisition of Silva diversifies the Company's product offerings and generates new opportunities for its plant-based ingredients platform.
−Removed: The initial allocation of the purchase price for Silva was based on preliminary valuations and assumptions and is subject to change within the 12-month measurement period following the date of acquisition (October 1, 2020).
−Removed: The Company finalized a working capital settlement in the fourth quarter of fiscal year 2021 and adjusted the beginning balance sheet for certain tax related assets and liabilities.
−Removed: The Company is still reviewing tax related assets and liabilities.
−Removed: The final purchase price allocation will be completed by the second quarter of fiscal year 2022.
+Added: The acquisition of Silva diversified the Company's product offerings and generates new opportunities for its plant-based ingredients platform.
+Added: The tax basis of the assets acquired and liabilities assumed did not result in a step-up of tax basis and the related goodwill is not deductible for U.S.
+Added: income tax purposes.
The Company continues to employ one of Silva's selling shareholders and as stipulated in the Silva purchase agreement has transferred $ 6.0 million to a third-party escrow account that may ultimately be earned by the selling shareholder upon completion of a post-combination service period.
−Removed: Since the compensation agreement for the selling shareholder who remains employed with the Company includes a post-combination service period, the Company has excluded the entire $ 6 million in the purchase price to be allocated.
+Added: Since the compensation agreement for the selling shareholder who remains employed with the Company includes a post-combination service period, the Company excluded the entire $ 6.0 million in the purchase price to be allocated.
The $ 6.0 million in escrow is recognized as restricted cash in other noncurrent assets on the consolidated balance sheet at March 31, 2022 .
3 unchanged sentences
UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: Acquisition of FruitSmart, Inc.
−Removed: On January 1, 2020 the Company acquired 100 % of the capital stock of FruitSmart, Inc.
−Removed: (“FruitSmart”), an independent specialty fruit and vegetable ingredient processor serving global markets, for approximately $ 80 million in cash, up to $ 25 million of contingent consideration payments, and $ 3.8 million of additional working capital on-hand at the date of acquisition.
−Removed: The contingent consideration is based on FruitSmart’s achievement of certain adjusted gross profit metrics in calendar years 2020 and 2021 .
−Removed: The fair value of the contingent consideration, approximately $ 6.7 million, was recognized on the acquisition date and was measured using unobservable (Level 3) inputs.
−Removed: At June 30, 2020 the forecasted calendar year 2020 adjusted gross profit for FruitSmart was not expected to achieve the adjusted gross profit threshold required for a contingent consideration payment.
−Removed: Therefore, in the quarter ended June 30, 2020, the Company recorded $ 4.2 million in other operating income for the reversal of a portion of the contingent consideration liability.
−Removed: As of March 31, 2021, $ 2.5 million of contingent consideration liability related to the FruitSmart acquisition is included in accounts payable and accrued expenses on the consolidated balance sheet.
−Removed: For the fiscal year ended March 31, 2020, the Company incurred $ 4.7 million of acquisition-related transaction costs for the purchase of FruitSmart.
−Removed: The acquisition-related costs were expensed as incurred and recorded as selling, general, and administrative expenses on the consolidated statements of income.
−Removed: The following table summarizes the preliminary purchase price allocation of the assets acquired and liabilities assumed for the Silva acquisition and final purchase price allocation for the FruitSmart acquisition.
−Removed: Silva FruitSmart
−Removed: Assets October 1, 2020 January 1, 2020
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: The following table summarizes the final purchase price allocations of the assets acquired and liabilities assumed for the Shank's and Silva acquisitions.
+Added: Shank's Silva
+Added: Assets October 4, 2021 October 1, 2020
Cash and cash equivalents $ 754 $ 8,126
3 unchanged sentences
Other current assets 415 833
−Removed: Property, plant and equipment (net) 24,437 23,400
+Added: Property, plant and equipment 11,000 24,437
+Added: Operating lease right-of-use assets 8,531 —
Customer relationships 24,000 53,000
5 unchanged sentences
Accounts payable and accrued expenses 6,159 11,683
+Added: Customer advances and deposits 351 —
Accrued compensation 655 3,350
Income taxes payable — 946
+Added: Current portion operating lease liabilities 8,531 —
Deferred income taxes — 14,419
1 unchanged sentence
Total assets acquired and liabilities assumed $ 100,000 $ 164,000
−Removed: A portion of the goodwill recorded as part of the acquisitions was attributable to the assembled workforce of FruitSmart and Silva, respectively.
−Removed: The tax basis of the assets acquired and liabilities did not result in a step-up of tax basis and the related goodwill is not deductible for U.S.
−Removed: income tax purposes.
−Removed: The Company determined the FruitSmart and Silva operations were not material to the Company’s consolidated results.
+Added: A portion of the goodwill recorded as part of the acquisitions was attributable to the assembled workforce of Shank's and Silva, respectively.
+Added: The Company determined the Shank's and Silva operations were not material to the Company’s consolidated results.
Therefore, pro forma information is not presented.
1 unchanged sentence
The majority of the Company’s consolidated revenue consists of sales of processed leaf tobacco to customers.
−Removed: The Company also has fruit and vegetable processing operations that provide customers with a range of food ingredient products.
−Removed: In addition, the Company earns revenue from processing leaf tobacco owned by customers and from various other services provided to customers.
−Removed: Payment terms with customers vary depending on customer creditworthiness, product types, services provided, and
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: other factors.
+Added: The Company also earns revenue from processing leaf tobacco owned by customers and from various other services provided to customers.
+Added: Additionally, the Company has fruit and vegetable processing operations, as well as flavor and extract services that provide customers with a range of food ingredient products.
+Added: Payment terms with customers vary depending on customer creditworthiness, product types, services provided, and other factors.
Contract durations and payment terms for all revenue categories generally do not exceed one year.
6 unchanged sentences
Transaction prices for the sale of tobaccos are primarily based on negotiated fixed prices, but the Company does have a small number of cost-plus contracts with certain customers.
−Removed: Cost-plus arrangements provide the Company reimbursement of the cost to purchase and process the tobacco, plus a contractually agreed-upon profit margin.
+Added: Cost-plus arrangements provide the Company reimbursement of the cost to purchase and process the
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: tobacco, plus a contractually agreed-upon profit margin.
The Company utilizes the most likely amount methodology under the accounting guidance to recognize revenue for cost-plus arrangements with customers.
3 unchanged sentences
Ingredient Sales
−Removed: In recent fiscal years, the Company has diversified its operations through acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products.
−Removed: These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps (including sorting, cleaning, pressing, mixing, and blending) manufacture finished goods utilized in both human and pet food.
+Added: In recent fiscal years, the Company has diversified operations through acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products, flavors, and extracts.
+Added: These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps including sorting, cleaning, pressing, mixing, extracting, and blending to manufacture finished goods utilized in both human and pet food.
The contracts for food ingredients with customers create a performance obligation to transfer the manufactured finished goods to the customer.
2 unchanged sentences
Processing Revenue
−Removed: Processing and packing of customer-owned tobacco and food ingredients is a short-duration process.
+Added: Processing and packing of customer-owned tobacco and ingredients is a short-duration process.
Processing charges are primarily based on negotiated fixed prices per unit of weight processed.
−Removed: Under normal operating conditions, customer-owned raw materials that are placed into the production line exit as processed and packed product and are then later transported to customer-designated transfer locations.
+Added: Under normal operating conditions, customer-owned raw materials that are placed into the production line exits as processed and packed product and is then later transported to customer-designated transfer locations.
The revenue for these services is recognized when the performance obligation is satisfied, which is generally when processing is completed.
The Company’s operating history and contract analyses indicate that customer requirements for processed tobacco and food ingredients products are consistently met upon completion of processing.
−Removed: Other Operating Sales and Revenue
−Removed: From time to time, the Company enters into various arrangements with customers to provide other value-added services that may include sorting, blending, bobbinizing, chemical and physical testing of products, storage, and other tobacco services for select manufacturers.
+Added: Other Sales and Revenue from Contracts with Customers
+Added: From time to time, the Company enters into various arrangements with customers to provide other value-added services that may include blending, chemical and physical testing of products, storage, sorting, and tobacco cutting services for select manufacturers.
These other arrangements and operations are a much smaller portion of the Company’s business, and are separate and distinct contractual agreements from the Company’s tobacco and food ingredients sales or third-party processing arrangements with customers.
The transaction prices and timing of revenue recognition of these items are determined by the specifics of each contract.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Disaggregation of Revenue from Contracts with Customers
10 unchanged sentences
Other operating sales and revenues consists principally of interest on advances to tobacco suppliers and dividend income from unconsolidated affiliates.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Major Customers
1 unchanged sentence
The Company’s seven largest customers are Altria Group, Inc, British American Tobacco plc, China Tobacco International, Inc., Imperial Brands plc, Japan Tobacco, Inc., Philip Morris International, Inc., and Swedish Match AB.
−Removed: In the aggregate, these customers have accounted for approximately 70 % of consolidated revenue for each of the past three fiscal years.
−Removed: For the fiscal years ended March 31, 2021, 2020, and 2019, revenue from Philip Morris International, Inc.
−Removed: was approximately $ 460 million, $ 500 million, and $ 650 million, respectively.
−Removed: For the same periods, Imperial Brands plc accounted for revenue of approximately $ 340 million, $ 320 million, and $ 360 million, respectively, and British American Tobacco plc accounted for revenue of approximately $ 210 million, $ 190 million, and $ 270 million, respectively.
+Added: In the aggregate, these customers have accounted for more than 60 % of consolidated revenue for each of the past three fiscal years.
+Added: For the fiscal years ended March 31, 2022, 2021, and 2020, revenue from Imperial Brands plc accounted for revenue of approximately $ 380 million, $ 340 million, and $ 320 million, respectively, Philip Morris International, Inc.
+Added: accounted for revenue of approximately $ 320 million, $ 460 million, and $ 500 million, respectively, and British American Tobacco plc accounted for revenue of approximately $ 260 million, $ 210 million, and $ 190 million, respectively.
These customers do business with various affiliates in the Company’s Tobacco Operations segment.
4 unchanged sentences
Tobacco Operations
−Removed: In fiscal year 2021, the Company incurred $ 4.4 million of termination and impairment costs associated with restructuring of tobacco buying and administrative operations in Africa, $ 1.2 million of combined termination costs in other regions, and a $ 0.9 million charge for the liquidation of an idled service entity in Tanzania.
+Added: As a result of efforts to exit the idled tobacco operations in Tanzania, the Company reevaluated the carrying values of property, plant, and equipment associated with the Tanzania operations.
+Added: During the fiscal year ended March 31, 2022, the Company determined the carrying value exceeded the estimated fair value of those assets and recognized a $ 9.4 million impairment charge.
+Added: See Note 19 for additional information.
+Added: During the fiscal year ended March 31, 2022, the Company also incurred $ 2.2 million of termination costs for the Tobacco Operations segment.
+Added: Ingredients Operations
+Added: During the fiscal year ended March 31, 2022, the Company recognized $ 1.2 million of net gains on the sale of the remaining property, plant, and equipment associated with the wind-down of the CIFI operations that was announced in fiscal year 2021.
+Added: Fiscal Year Ended March 31, 2021
+Added: Tobacco Operations
+Added: During the fiscal year ended March 31, 2021, the Company incurred $ 4.4 million of termination and impairment costs associated with the restructuring of tobacco buying and administrative operations in Africa, $ 1.2 million of combined termination costs in other regions, and a $ 0.9 million charge for the liquidation of an idled service entity in Tanzania.
Total restructuring and impairments costs related to the Tobacco Operations segment were $ 6.5 million for the fiscal year ended March 31, 2021.
3 unchanged sentences
The CIFI operation was a start-up project initially undertaken by the Company in fiscal year 2015.
−Removed: The decision to wind down CIFI is consistent with the Company’s capital allocation strategy to focus on delivering shareholder value through building and enhancing a plant-based ingredients platform, which includes integrating and exploring the synergies of recently acquired businesses, FruitSmart and Silva.
+Added: The decision to wind down CIFI was consistent with the Company’s capital allocation strategy to focus on delivering shareholder value through building and enhancing a plant-based ingredients platform, which includes integrating and exploring the synergies of recently acquired businesses, FruitSmart and Silva.
The Company determined that CIFI was not a strategic fit for the platform’s long-term objectives.
CIFI’s single-product focused processing facility and ongoing international pricing pressures, among other factors, created challenges that proved insurmountable.
−Removed: Sales of existing inventory and certain administrative activities at CIFI will continue into fiscal year 2022, but no manufacturing occurred subsequent to December 31, 2020.
−Removed: As a result of the decision to wind down the CIFI operations, the Company incurred termination costs totaling approximately $ 0.6 million for employees whose permanent positions were eliminated.
+Added: As a result of the decision to wind down the CIFI operations, the Company paid termination benefits totaling approximately $ 0.6 million to employees whose permanent positions were eliminated.
In addition to the termination costs, the Company recognized various other costs associated with the wind-down of the CIFI facility.
−Removed: These costs include impairments of property, plant, and equipment (including the factory building), as well as
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: inventory and supply write-downs.
+Added: These costs include impairments of property, plant, and equipment (including the factory building), as well as inventory and supply write-downs.
The total restructuring and impairment charge incurred for the CIFI wind-down was $ 16.1 million for the fiscal year ended March 31, 2021.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fiscal Year Ended March 31, 2020
2 unchanged sentences
Restructuring and impairment costs were also incurred in connection with downsizing efforts at several other locations around the Company.
−Removed: Fiscal Year Ended March 31, 2019
−Removed: Tobacco Operations
−Removed: Due to the decline in customer demand for tobaccos from Tanzania, as well as regulatory, tax, and other business and operating considerations, the Company undertook a formal review of the Tanzania leaf tobacco market and its operations there in the third quarter of fiscal year 2019.
−Removed: Based on that review, the Company’s operating subsidiaries in Tanzania took steps to reduce operating costs going forward, including discontinuation of a year-round workforce.
−Removed: As a result of that initiative, the subsidiaries recorded a $ 4.0 million restructuring charge for termination benefits paid to employees whose permanent positions were eliminated.
−Removed: All amounts related to termination benefit costs were paid by the end of fiscal year 2019.
−Removed: In addition, as a result of the decrease in production volumes of Tanzania tobaccos and the associated reduced profitability, the Company determined that indicators of impairment in the carrying value of the property, plant and equipment comprising the Tanzania operations were present at December 31, 2018.
−Removed: Accordingly, based on the applicable accounting guidance, the Company tested the recoverability of those long-lived assets using undiscounted estimates of the future cash flows from the use of those assets and their eventual disposition.
−Removed: The property, plant and equipment were evaluated for recoverability using two distinct asset groups:
−Removed: (1) the land, building, and equipment comprising the processing facility, and (2) all remaining assets, which are substantially devoted to buying and receiving delivery of unprocessed leaf from farmers and marketing and shipping the processed tobacco to customers.
−Removed: The recoverability tests indicated that both asset groups were impaired at December 31, 2018.
−Removed: As a result, the Company determined the fair value of each asset group based principally on a probability-weighting of the discounted cash flows expected under multiple operating and disposition scenarios.
−Removed: An impairment charge of approximately $ 14.6 million was recorded to reduce the carrying value of the assets to their indicated fair values.
−Removed: The property, plant and equipment assets are used in buying, processing, and shipping and remain classified as “held and used” at this time as provided for under the accounting guidance.
−Removed: Should the expected cash flows from the future use and/or disposition of the assets change from the estimates on which their fair values were determined, additional impairment charges could be required, or gains or losses on any disposition of the assets could be recorded.
−Removed: The Company also had goodwill related to the Tanzanian operations of approximately $ 0.9 million which was separately tested for recoverability and fully written off based on the results of that test.
−Removed: Additional restructuring costs of approximately $ 0.9 million were incurred in connection with downsizing efforts at other locations around the Company during fiscal year 2019.
A summary of the restructuring and impairment costs incurred during the fiscal years ended March 31, 2022, 2021, and 2020 is as follows:
7 unchanged sentences
Property, plant, and equipment and other noncurrent assets 8,307 13,872 2,187
−Removed: Goodwill — — 889
$ 8,307 $ 13,872 $ 2,187
Total restructuring and impairment costs $ 10,457 $ 22,577 $ 7,543
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
A reconciliation of the Company’s liability for employee termination benefits and other restructuring costs for fiscal years 2020 through 2022 is as follows:
3 unchanged sentences
Costs charged to expense 5,356 — 5,356
−Removed: 4,608 223 4,831
Payments and write-offs ( 2,564 ) ( 223 ) ( 2,787 )
2 unchanged sentences
Costs charged to expense 5,237 3,468 8,705
−Removed: 5,356 — 5,356
Payments and write-offs ( 7,282 ) ( 2,855 ) ( 10,137 )
2 unchanged sentences
Costs charged to expense 2,174 ( 24 ) 2,150
−Removed: 5,237 3,468 8,705
Payments and write-offs ( 3,544 ) ( 589 ) ( 4,133 )
Balance at March 31, 2022 $ — $ — $ —
−Removed: The restructuring liability at March 31, 2021 is expected to be paid during fiscal year 2022.
Universal continually reviews its business for opportunities to realize efficiencies, reduce costs, and realign its operations in response to business changes.
The Company may incur additional restructuring and impairment costs in future periods as business changes occur and additional cost savings initiatives are implemented.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
EARNINGS PER SHARE
17 unchanged sentences
Diluted earnings per share $ 3.47 $ 3.53 $ 2.86
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Company operates in the United States and many foreign countries and is subject to the tax laws of many jurisdictions.
11 unchanged sentences
It is not practicable for the Company to quantify any deferred income tax liability that would be attributable to those events.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Tax Expense
13 unchanged sentences
tax expense on the earnings of foreign subsidiaries.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Consolidated Effective Income Tax Rate
8 unchanged sentences
Foreign dividend withholding taxes 2.3 5.3 5.1
−Removed: Reversal of dividend withholding tax due to foreign subsidiary tax holiday — — ( 5.1 )
Changes in uncertain tax positions ( 0.3 ) — 5.6
1 unchanged sentence
Effective income tax rate 27.2 % 23.4 % 31.1 %
+Added: In fiscal year 2022, the Company recognized a $ 1.7 million benefit related to a final tax law ruling at a foreign subsidiary.
Final United States GILTI regulations published in July 2020 significantly changed from the proposed regulations published in 2019.
6 unchanged sentences
The additional income tax expense for fiscal year 2020 increased the effective tax rate for the year by 2.4 %
−Removed: During fiscal year 2019, the Company reversed amounts previously recorded for dividend withholding taxes on distributed and undistributed retained earnings of a foreign subsidiary.
−Removed: The reversal followed the resolution of uncertainties with the local country taxing authorities with respect to the inclusion of the tax under a tax holiday applicable to the subsidiary and was attributable to cumulative retained earnings amounts previously distributed or expected to be distributed prior to the expiration of the tax holiday.
−Removed: The reversal reduced income tax expense for fiscal year 2019 by approximately $ 7.8 million, which decreased the effective tax rate for the year by 5.1 %, as noted in the above rate reconciliation.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Components of Income Before Income Taxes
5 unchanged sentences
Total $ 142,267 $ 125,726 $ 113,291
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred Income Tax Liabilities and Assets
5 unchanged sentences
Goodwill and other intangible assets 34,584 35,059
+Added: Local currency exchange gains of foreign subsidiaries 4,094 —
All other 3,414 4,876
12 unchanged sentences
At March 31, 2022, the Company had no material net operating loss carryforwards in either its domestic or foreign operations.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Combined Income Tax Expense (Benefit)
5 unchanged sentences
$ 45,218 $ 38,975 $ 20,896
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Uncertain Tax Positions
9 unchanged sentences
Liability for uncertain tax positions, end of year $ 2,024 $ 2,437 $ 2,377
−Removed: Of the total liability for uncertain tax positions at March 31, 2021, approximately $ 2.4 million could have an effect on the consolidated effective tax rate if the tax benefits are recognized.
+Added: The liability for uncertain tax positions at March 31, 2022 includes approximately $ 2.0 million that could have an effect on the consolidated effective tax rate if the tax benefits are recognized.
The liability for uncertain tax positions includes $ 0.1 million related to tax positions for which it is reasonably possible that the amounts could change significantly before March 31, 2023.
This amount reflects a possible decrease in the liability for uncertain tax positions that could result from the completion and resolution of tax audits and the expiration of open tax years in various tax jurisdictions.
−Removed: During fiscal year 2020, the Company resolved a transfer pricing matter related to a foreign subsidiary.
+Added: The $ 0.8 million settlement in fiscal year 2022 represents the resolution of a tax matter with a local country taxing authority.
+Added: The Company accrued $ 0.5 million of the fiscal year 2022 settlement in prior fiscal years.
The settlement in fiscal year 2020 represents the resolution of a tax matter with a local country taxing authority that resulted in a $ 8.9 million settlement of which $ 4.5 million was accrued in prior fiscal years.
1 unchanged sentence
Amounts accrued or reversed for interest were not material for fiscal years 2022 or 2020.
−Removed: Amounts accrued or reversed for penalties were not material for fiscal years 2019 through 2021, and liabilities recorded for interest and penalties at March 31, 2021 and 2020 also were not material.
+Added: Amounts accrued or reversed for penalties were not material for fiscal years 2022 through 2020, and liabilities recorded for penalties at March 31, 2022 and 2021 also were not material.
Universal and its subsidiaries file a U.S.
5 unchanged sentences
federal, state and foreign jurisdictions range from 3 to 6 years.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
GOODWILL AND OTHER INTANGIBLES
6 unchanged sentences
Balance at end of year $ 213,998 $ 173,051
−Removed: (1) On January 1, 2020 the Company acquired 100 % of the capital stock of FruitSmart for approximately $ 80 million in cash and up to $ 25 million of contingent consideration payments.
−Removed: The FruitSmart acquisition resulted in $ 28.9 million of goodwill.
+Added: (1) On October 4, 2021, the Company acquired 100 % of the capital stock of Shank's for approximately $ 100 million in cash and $ 2.4 million of additional working capital on-hand at the date of acquisition..
+Added: The Shank's acquisition resulted in $ 41.1 million of goodwill.
See Note 2 for additional information.
2 unchanged sentences
See Note 2 for additional information.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Company's intangible assets primarily consist of capitalized customer-related intangibles, trade names, proprietary developed technology and noncompetition agreements.
12 unchanged sentences
Total intangible assets $ 111,636 $ ( 19,065 ) $ 92,571 $ 80,160 $ ( 7,856 ) $ 72,304
−Removed: (1) The FruitSmart acquisition resulted in $ 18.6 million of intangibles.
+Added: (1) The Shank's acquisition resulted in $ 31.5 million of intangibles.
See Note 2 for additional information.
4 unchanged sentences
(in thousands) Fiscal Year Ended March 31,
+Added: 2022 2021 2020
Amortization Expense $ 11,209 $ 6,460 $ 722
1 unchanged sentence
The amortization expense for the other intangible assets is recorded in selling, general, and administrative expenses in the consolidated income statements of income.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of March 31, 2022, the expected future amortization expense for intangible assets is as follows:
+Added: 2023 $ 12,494
2027 and thereafter 48,557
7 unchanged sentences
In addition to interest, the Company pays a facility fee on the revolving credit facility.
−Removed: No amounts were outstanding under the revolving credit facility at March 31, 2021.
+Added: $ 100 million was outstanding under the revolving credit facility at March 31, 2022.
The credit agreement provides for an expansion of the facility under certain conditions to allow additional borrowings of up to $ 200 million.
−Removed: The credit agreement includes financial covenants that require the Company to maintain a
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: minimum level of tangible net worth and observe limits on debt levels.
+Added: The credit agreement includes financial covenants that require the Company to maintain a minimum level of tangible net worth and observe limits on debt levels.
The Company was in compliance with those covenants at March 31, 2022.
4 unchanged sentences
As of March 31, 2022 and 2021, approximately $ 83 million and $ 101 million, respectively, were outstanding under these uncommitted lines of credit.
−Removed: The weighted-average interest rates on short-term borrowings outstanding was 4.2 % as of both March 31, 2021 and 2020.
+Added: The weighted-average interest rates on short-term borrowings outstanding as of March 31, 2022 and 2021 were approximately 2.7 % and 4.2 %, respectively.
At March 31, 2022, the Company and its consolidated affiliates had unused uncommitted lines of credit totaling approximately $ 200 million.
13 unchanged sentences
Interest payments on the additional $ 150 million of new term loans in fiscal year 2021 remain unhedged at March 31, 2022.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As discussed in Note 11, the Company had receive-floating/pay-fixed interest rate swap agreements in place with respect to prior loans that were initially designated and carried over to hedge the variable interest payments on the new loans.
Those swap agreements were subsequently terminated in February 2019 and concurrently replaced with new interest rate swap agreements that convert the variable benchmark rate to a fixed rate through December 20, 2023 for the five-year term loan and through December 20, 2025 for the seven-year term loan.
−Removed: The proceeds received for the fair value of the terminated interest rate swap agreements, approximately $ 5.4 million, is being amortized from accumulated other comprehensive income into earnings as a reduction of interest expense through their original maturity dates.
−Removed: At March 31, 2021, $ 1.1 million remains to be amortized into interest expense.
+Added: The proceeds received for the fair value of the terminated interest rate swap agreements, approximately $ 5.4 million, was recognized in accumulated other comprehensive income, to be amortized into earnings as a reduction of interest expense through their original maturity dates.
+Added: At March 31, 2022, the entire gain from the terminated interest rate swap agreements has been amortized into interest expense.
With the swap agreements in place, the effective interest rates on the original $ 150 million five-year loan balance and the original $ 220 million seven-year loan balance were 4.19 % and 4.51 % at March 31, 2022, respectively.
7 unchanged sentences
For all operating leases with terms greater than 12 months and with fixed payment arrangements, a lease liability and corresponding right-of-use asset are recognized in the balance sheet for the term of the lease by calculating the net present value of future lease payments.
−Removed: UNIVERSAL CORPORATION
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On the date of lease commencement, the present value of lease liabilities is determined by discounting the future lease payments by the Company’s collateralized incremental borrowing rate, adjusted for the lease term and currency of the lease payments.
15 unchanged sentences
(1) Includes variable operating lease costs.
−Removed: For the fiscal year ended March 31, 2019, the Company recorded $ 17.3 million of total expense for operating leases.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table reconciles the undiscounted cash flows to the operating lease liabilities in the Company’s consolidated balance sheet:
1 unchanged sentence
Maturity of Operating Lease Liabilities
+Added: 2023 $ 11,977
2028 and thereafter 8,492
3 unchanged sentences
As of March 31, 2022, the Company had entered into no additional operating leases that have not yet commenced.
−Removed: UNIVERSAL CORPORATION
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table sets forth supplemental information related to operating leases:
6 unchanged sentences
Weighted Average Collateralized Incremental Borrowing Rate 5.43 % 4.05 %
+Added: As part of the acquisition of Shank's, the Company recognized $ 8.5 million of operating lease right-of-use assets and corresponding operating lease liabilities on the opening balance sheet related to leases of Shank's facilities.
+Added: The facilities were subsequently purchased in the three months ended December 31, 2021 and therefore excluded from the lease disclosures above.
DERIVATIVES AND HEDGING ACTIVITIES
10 unchanged sentences
During the third quarter of fiscal year 2021, the Company converted $ 150 million from the balance in its revolving credit line into the existing term loans, splitting the balance equally between them.
−Removed: At March 31, 2021, the Company is not hedging the interest payments on the additional $ 150 million of term loans.
+Added: At March 31, 2022, the Company is not hedging the interest payments on the additional $ 150
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: million of term loans.
The increase to the principal balance of the term loans does not have an impact on the effectiveness analysis of the interest rate swap agreements.
1 unchanged sentence
Those swap agreements were subsequently terminated in February 2019 concurrent with the inception of the new swap agreements.
−Removed: The fair value of the previous swap agreements, approximately $ 5.4 million, was received from the counterparties upon termination and is being amortized from accumulated other comprehensive loss into earnings as a reduction of interest expense through the original maturity dates of those agreements.
−Removed: As of March 31, 2021, $ 1.1 million remained in accumulated other comprehensive loss to be amortized through December 31, 2021.
+Added: The fair value of the previous swap agreements, approximately $ 5.4 million, was received from the counterparties upon termination and was amortized from accumulated other comprehensive loss into earnings as a reduction of interest expense through the original maturity dates of those agreements.
+Added: As of March 31, 2022, the entire deferred gain has been amortized.
Cash Flow Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Forecast Purchases of Tobacco, Tobacco Processing Costs, and Crop Input Sales
9 unchanged sentences
These strategies offset the variability of future U.S.
−Removed: UNIVERSAL CORPORATION
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
dollar cash flows for sales of crop inputs, tobacco purchases, and processing costs for the foreign currency notional amount hedged.
8 unchanged sentences
$ 232.5 $ 152.6 $ 180.0
−Removed: Variations in exchange rates and in the amount and timing of fixed-price orders from customers for their purchases from individual crop years routinely cause variations in the U.S.
+Added: Fluctuations in exchange rates and in the amount and timing of fixed-price orders from customers for their purchases from individual crop years routinely cause variations in the U.S.
dollar notional amount of forward contracts entered into from one year to the next.
−Removed: All contracts related to tobacco purchases and 2021 crop year input sales were designated and qualified as hedges of the future cash flows associated with the forecast purchases of tobacco.
−Removed: As a result, changes in fair values of the forward contracts have been recognized in comprehensive income as they occurred, but only recognized in earnings upon sale of the related tobacco to third-party customers.
−Removed: Forward contracts related to processing costs have not been designated as hedges, and gains and losses on those contracts have been recognized in earnings on a marked-to-market basis.
−Removed: In fiscal year 2020, option contracts entered for the sale of 2020 crop year input sales were not designated for hedge accounting.
−Removed: The gains and losses for the 2020 crop year option contracts entered into for the sale of crop inputs were recognized in earnings on a marked-to-market basis.
−Removed: For the remaining hedge gains and losses related to 2020 crops recorded in accumulated other comprehensive loss at March 31, 2021, the Company expects to complete the sale of the tobacco and recognize the amounts in earnings during fiscal year 2022.
−Removed: At March 31, 2021, all hedged forecast purchases of tobacco and crop input sales not yet completed remained probable of occurring within the originally designated time period and, as a result, no hedges had been discontinued.
−Removed: Purchases of the 2021 crops in Brazil and Africa are expected to be completed by August 2021, and all forward contracts to hedge those purchases will mature and be settled by that time.
−Removed: Purchases of the 2022 crops in Brazil are expected to be completed by August 2022 and all forward contracts to hedge those purchases will mature and be settled by that time.
+Added: Contracts related to tobacco purchases and crop input sales were designated and qualified as hedges of the future cash flows associated with the forecast purchases of tobacco.
+Added: As a result, changes in fair values of the forward contracts have been recognized in comprehensive income as they occurred, but only recognized in earnings as a component of cost of goods sold upon sale of the related tobacco to third-party customers.
+Added: In fiscal year 2022, only non-deliverable forward contracts were utilized for the sale of 2023 and 2022 crop year inputs.
+Added: Premium payments for option contracts entered into for the sale of crop inputs in fiscal year 2021 were expensed into earnings as incurred.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: The table below presents the expected timing of when the remaining accumulated other comprehensive gains and losses as of March 31, 2022 for cash flows hedges of tobacco purchases and crop input sales will be recognized in earnings.
+Added: Hedging Program Crop Year Geographic Location(s) Fiscal Year Earnings
+Added: Tobacco purchases 2023 Brazil 2024
+Added: Tobacco purchases 2022 Brazil, Africa 2023
+Added: Tobacco purchases 2021 Brazil 2023
+Added: Crop input sales 2023 Brazil 2024
+Added: Crop input sales 2022 Brazil 2023
+Added: Forward contracts related to processing costs have not been designated as hedges, and gains and losses on those contracts have been recognized in earnings on a mark-to-market basis.
Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Net Local Currency Monetary Assets and Liabilities of Foreign Subsidiaries
4 unchanged sentences
These subsidiaries normally have certain monetary assets and liabilities on their balance sheets that are denominated in the local currency.
−Removed: Those assets and liabilities can include cash and cash equivalents, accounts receivable and accounts payable, advances to farmers and suppliers, deferred income tax assets and liabilities, recoverable value-added taxes, operating lease liabilities, and other items.
+Added: Those assets and liabilities can include cash and cash equivalents, accounts receivable and accounts payable, advances to farmers and suppliers, deferred income tax assets and liabilities, recoverable VAT, operating lease liabilities, and other items.
Net monetary assets and liabilities denominated in the local currency are remeasured into U.S.
10 unchanged sentences
The total notional amounts of contracts outstanding at March 31, 2022 and 2021, were approximately $ 59.5 million and $ 16.6 million, respectively.
−Removed: To further mitigate currency remeasurement
−Removed: UNIVERSAL CORPORATION
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: exposure, the Company’s foreign subsidiaries may utilize short-term local currency financing during certain periods.
+Added: To further mitigate currency remeasurement exposure, the Company’s foreign subsidiaries may utilize short-term local currency financing during certain periods.
This strategy, while not involving the use of derivative instruments, is intended to minimize the subsidiary’s net monetary position by financing a portion of the local currency monetary assets with local currency monetary liabilities, thus hedging a portion of the overall position.
3 unchanged sentences
The contracts are not designated as hedges for accounting purposes.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Effect of Derivative Financial Instruments on the Consolidated Statements of Income
27 unchanged sentences
For the outstanding interest rate swap agreements, the effective portion of the gain or loss on the derivative is recorded in accumulated other comprehensive loss and any ineffective portion is recorded in selling, general and administrative expenses.
−Removed: For the terminated interest rates swaps previously designated as cash flow hedges, a $ 1.1 million net realized hedge gain remained in
−Removed: UNIVERSAL CORPORATION
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: accumulated other comprehensive loss at March 31, 2021.
−Removed: The Company expects to amortize the remaining unamortized gain into earnings as a reduction of interest expense in fiscal year 2022.
−Removed: For the forward foreign currency exchange contracts designated as cash flow hedges of tobacco purchases in Brazil and Africa, as well as the crop input sales in Brazil, a net hedge loss of approximately $ 0.8 million remained in accumulated other comprehensive loss at March 31, 2021.
−Removed: That balance reflects gains and losses on contracts related to the 2020, 2021, and 2022 Brazil crops, the 2021 Africa crop, and the 2021 Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through March 31, 2021.
−Removed: The remaining balance in accumulated other comprehensive loss associated with the 2020 and 2021 Brazil crop purchase hedges, along with the balances associated with the 2021 Brazil crop input sales and the 2021 Africa crops are expected to be recognized in earnings as a component of cost of goods sold in fiscal year 2022 as those tobaccos are sold to customers.
−Removed: The balance in accumulated other comprehensive loss related to the 2022 Brazil crop is expected to be recognized in earnings as a component of cost of goods sold in fiscal year 2023 when those tobaccos are sold to customers.
+Added: For the forward foreign currency exchange contracts designated as cash flow hedges of tobacco purchases in Brazil and Africa, as well as the crop input sales in Brazil, a net hedge gain of approximately $ 5.6 million remained in accumulated other comprehensive loss at March 31, 2022.
+Added: That balance reflects gains and losses on contracts related to the 2023, 2022, and 2021 Brazil crops, the 2022 Africa crop, and the 2023 and 2022 Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through March 31, 2022.
Based on the hedging strategy, as the gain or loss is recognized in earnings, it is expected to be offset by a change in the direct cost for the tobacco or by a change in sales prices if the strategy has been mandated by the customer.
Generally, margins on the sale of the tobacco will not be significantly affected.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Effect of Derivative Financial Instruments on the Consolidated Balance Sheets
21 unchanged sentences
The Company has elected to present these contracts on a gross basis in the consolidated balance sheets.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FAIR VALUE MEASUREMENTS
11 unchanged sentences
3 unobservable inputs for the asset or liability.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As permitted under the accounting guidance, the Company uses net asset value per share ("NAV") as a practical expedient to measure the fair value of its money market funds.
2 unchanged sentences
Universal has not elected to report at fair value any financial instruments or any other assets or liabilities that are not required to be reported at fair value under current accounting guidance.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Recurring Fair Value Measurements
8 unchanged sentences
Total financial assets measured and reported at fair value $ 334 $ 13,655 $ 24,068 $ — $ 38,057
−Removed: Acquisition-related contingent consideration obligations - long-term $ — $ — $ — $ 2,532 $ 2,532
Interest rate swap agreements $ — $ — $ 1,161 $ — $ 1,161
5 unchanged sentences
Money market funds $ 1,992 $ — $ — $ — $ 1,992
−Removed: $ 4,011 $ — $ — $ — $ 4,011
Trading securities associated with deferred compensation plans — 15,735 — — 15,735
−Removed: — 12,635 — — 12,635
Forward foreign currency exchange contracts — — 1,572 — 1,572
−Removed: — — 314 — 314
Total financial assets measured and reported at fair value $ 1,992 $ 15,735 $ 1,572 $ — $ 19,299
−Removed: Guarantees of bank loans to tobacco growers
−Removed: $ — $ — $ — $ 103 $ 103
−Removed: Acquisition-related contingent consideration obligations - short-term — — — 4,173 $ 4,173
Acquisition-related contingent consideration obligations - long-term $ — $ — $ — $ 2,532 $ 2,532
Interest rate swap agreements — — 25,719 — 25,719
−Removed: — — 37,163 — 37,163
Forward foreign currency exchange contracts — — 1,822 — 1,822
−Removed: — — 15,842 — 15,842
Total financial liabilities measured and reported at fair value $ — $ — $ 27,541 $ 2,532 $ 30,073
3 unchanged sentences
UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Trading securities associated with deferred compensation plans
10 unchanged sentences
The Company estimates the fair value of acquisition-related contingent consideration obligations by applying an income approach model that utilizes probability-weighted discounted cash flows.
−Removed: The Company acquired FruitSmart, Inc.
−Removed: in fiscal year 2020 and recognized a contingent consideration liability of $ 6.7 million on the date of acquisition.
+Added: The Company acquired FruitSmart, Inc.("FruitSmart") in fiscal year 2020 and recognized a contingent consideration liability of $ 6.7 million on the date of acquisition.
Each reporting period the Company evaluates the fair value of the acquisition-related contingent consideration obligations.
In the quarter ended June 30, 2020, the evaluation resulted in the reduction of $ 4.2 million of contingent consideration of the original $ 6.7 million liability recorded.
+Added: In the quarter ended September 30, 2021, an evaluation of the contingent liability resulted in a reduction of the remaining $ 2.5 million contingent liability recorded.
Significant judgment is applied to this model and therefore the acquisition-related contingent consideration obligation is classified within Level 3 of the fair value hierarchy.
2 unchanged sentences
Balance beginning of year $ 2,532 $ 6,705
−Removed: Additions — 6,705
Change in fair value of contingent consideration liability ( 2,532 ) ( 4,173 )
Balance at end of year $ — $ 2,532
−Removed: As of March 31, 2021, $ 2.5 million of contingent consideration liability related to the FruitSmart acquisition is included in accounts payable and accrued expenses on the consolidated balance sheet.
−Removed: Guarantees of bank loans to tobacco growers
−Removed: The majority of crop financing utilized for fiscal year 2021 in Brazil did not require guaranteed bank loans to tobacco growers, resulting in the elimination of guarantees at March 31, 2021 .
−Removed: For the majority of crop financing prior to fiscal year 2021, the Company relied heavily on guaranteed bank loans to tobacco growers in Brazil for crop financing.
−Removed: In the event that the farmers defaulted on their payments to the banks, the Company would be required to perform under the guarantees.
−Removed: The Company regularly evaluated the likelihood of farmer defaults based on an expected loss analysis and records the fair value of its guarantees as an obligation in its consolidated financial statements.
−Removed: The fair value of the guarantees was determined using the expected loss data for all loans outstanding at each measurement date.
−Removed: The present value of the cash flows associated with the estimated losses was then calculated at a risk-adjusted interest rate that was aligned with the expected duration of the liability and included an adjustment for nonperformance risk.
−Removed: This approach is sometimes referred to as the “contingent claims valuation method.” Although historical loss data is an observable input, significant judgment was required in applying this information to the portfolio of guaranteed loans outstanding at each measurement date and in selecting a risk-adjusted interest rate.
−Removed: Significant increases or decreases in the risk-adjusted interest rate may result in a significantly higher or lower fair value measurement.
−Removed: The guarantees of bank loans to tobacco growers were therefore classified within Level 3 of the fair value hierarchy.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: A reconciliation of the change in the balance of the financial liability for guarantees of bank loans to tobacco growers (Level 3) for the fiscal years ended March 31, 2021 and 2020 is provided below.
−Removed: Fiscal Year Ended March 31,
−Removed: Balance at beginning of year $ 103 $ 803
−Removed: Payments under the guarantees and transfers to allowance for loss on direct loans to farmers (removal of prior crop year loans from the portfolio)
−Removed: ( 96 ) ( 659 )
−Removed: Provision for loss or transfers from allowance for loss on direct loans to farmers (addition of current crop year loans)
−Removed: Change in discount rate and estimated collection period ( 2 ) ( 7 )
−Removed: Currency remeasurement ( 5 ) ( 29 )
−Removed: Balance at end of year $ — $ 103
Long-term Debt
6 unchanged sentences
See Note 9 for more information regarding long-term debt.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nonrecurring Fair Value Measurements
8 unchanged sentences
The Company reviews long-lived assets for impairment whenever events, changes in business conditions, or other circumstances provide an indication that such assets may be impaired.
−Removed: As a result of the announcement of the wind-down of the CIFI operation, an impairment of the related long-lived assets was recorded during the quarter ended December 31, 2020.
−Removed: The long-lived assets primarily consist of buildings, processing equipment, and other manufacturing related assets.
−Removed: The aggregate fair value and carrying value of those assets following the impairment adjustments was approximately $ 6 million.
−Removed: The fair values of the property, plant and equipment were principally determined using a market-based approach with consideration of the assets fair values to potential third-parties.
−Removed: Significant judgment was required in estimating the amount and timing of the future cash flows associated with the disposition of the assets.
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: Assets Held for Sale
Due to business changes that affected the leaf tobacco market in Tanzania and the Company's operations there, an impairment charge of the long-lived assets in Tanzania was recorded in fiscal year 2019 to reduce their carrying value to fair value at March 31, 2019.
−Removed: The long-lived assets consist principally of the Company's processing facility and equipment, storage facilities, tobacco buying and receiving stations, employee housing, and vehicles and transportation equipment.
−Removed: The aggregate fair value and carrying value of those assets following the impairment adjustments was approximately $ 17 million.
−Removed: The fair values of the property, plant and equipment were determined based principally on a probability-weighting of the discounted cash flows expected under multiple operating and disposition scenarios.
−Removed: Significant judgment was required in estimating the amount and timing of the future cash flows associated with the use and disposition of the assets, as well as the probabilities associated with the respective operating and disposition scenarios.
+Added: As a result of efforts to sell the idled Tanzania operations, in the third quarter of fiscal year 2022 an additional impairment charge of $ 9.4 million was recorded.
+Added: The remaining assets held for sales consist principally of receivables for VAT and the Company's office building, idled processing facility, and land.
+Added: The aggregate fair value and carrying value of the assets held for sale following the impairment adjustments is approximately $ 7 million at March 31, 2022.
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
14 unchanged sentences
These amounts represent the actuarial present value of estimated future benefit payments earned by participants in the benefit plans as of the balance sheet date.
−Removed: For pension benefits, the projected benefit obligation includes the estimated effect of future compensation increases on those benefits.
+Added: For pension benefits, the PBO includes the estimated effect of future compensation increases on those benefits.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Actuarial Assumptions
13 unchanged sentences
The expected long-term return on plan assets is developed from financial models used to project future returns on the underlying assets of the funded plans and is reviewed on an annual basis.
−Removed: The healthcare cost trend rate used by the Company is based on a study of medical cost inflation rates that is reviewed and updated annually for
−Removed: UNIVERSAL CORPORATION
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: continued applicability.
−Removed: The revised trend assumption of 6.17 % in 2021 declines gradually to 4.44 % in 2029 .
+Added: The healthcare cost trend rate used by the Company is based on a study of medical cost inflation rates that is reviewed and updated annually for continued applicability.
+Added: The trend assumption of 6.17 % in 2022 declines gradually to 4.44 % in 2031 .
The Company has caps in place on postretirement medical benefits that limit its cost for a large segment of the retiree population.
As a result, changes to the healthcare cost trend rate have a limited impact on the postretirement medical plan liability and expense.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Benefit Obligations, Plan Assets, and Funded Status
12 unchanged sentences
Foreign currency exchange rate changes ( 1,160 ) 776 566 ( 283 )
−Removed: Settlements — ( 6,038 ) — —
Other 1,736 ( 3,626 ) ( 1,245 ) 167
5 unchanged sentences
Employer contributions 6,147 8,472 2,448 3,229
−Removed: Settlements — ( 6,038 ) — —
Foreign currency exchange rate changes ( 3,313 ) ( 9 ) — —
5 unchanged sentences
pension plan, one of its foreign pension plans, and its postretirement medical plans on a pay-as-you-go basis as the benefit payments are incurred.
−Removed: The unfunded projected benefit obligation for those pension plans and postretirement benefit plans was $ 38.1 million and $ 23.7 million, respectively, at March 31, 2021.
−Removed: UNIVERSAL CORPORATION
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: The unfunded PBO for those pension plans and postretirement benefit plans was $ 33.3 million and $ 20.5 million, respectively, at March 31, 2022.
The funded status of the Company’s plans at the end of fiscal years 2022 and 2021 was reported in the consolidated balance sheets as follows:
6 unchanged sentences
Amounts recognized in the consolidated balance sheets $ ( 21,037 ) $ ( 26,741 ) $ ( 22,251 ) $ ( 25,893 )
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Additional information on the funded status of the Company’s plans as of the respective measurement dates for the fiscal years ended March 31, 2022 and 2021, is as follows:
20 unchanged sentences
Net periodic benefit cost $ 3,545 $ 6,604 $ 4,451 $ 612 $ 626 $ 752
−Removed: A one-percentage-point increase or decrease in the assumed healthcare cost trend rate would not result in a significant change to the March 31, 2021 accumulated postretirement benefit obligation or the aggregate service and interest cost components of the net periodic postretirement benefit expense for fiscal year 2022.
−Removed: Amounts Included in Accumulated Other Comprehensive Loss
−Removed: Amounts included in accumulated other comprehensive loss at the beginning of the year are amortized as a component of net periodic benefit cost during the year.
−Removed: The amounts recognized in other comprehensive income or loss for fiscal years 2021
+Added: A one-percentage-point increase or decrease in the assumed healthcare cost trend rate would not result in a significant change to the March 31, 2022 APBO or the aggregate service and interest cost components of the net periodic postretirement benefit expense for fiscal year 2023.
UNIVERSAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: and 2020 and the amounts included in accumulated other comprehensive loss at the end of those fiscal years are shown below.
+Added: Amounts Included in Accumulated Other Comprehensive Loss
+Added: Amounts included in accumulated other comprehensive loss at the beginning of the year are amortized as a component of net periodic benefit cost during the year.
+Added: The amounts recognized in other comprehensive income or loss for fiscal years 2022 and 2021 and the amounts included in accumulated other comprehensive loss at the end of those fiscal years are shown below.
All amounts shown are before allocated income taxes.
5 unchanged sentences
Losses (gains) arising during the year ( 1,727 ) ( 17,563 ) ( 2,533 ) 520
−Removed: Settlement — ( 529 ) — —
Amortization included in net periodic benefit cost during the year ( 3,598 ) ( 6,857 ) 247 450
28 unchanged sentences
(1) Actual amounts include high yield securities and cash balances held for the payment of benefits.
−Removed: Universal makes regular contributions to its pension and other postretirement benefit plans.
−Removed: As previously noted, for postretirement health benefits, contributions reflect funding of those benefits as they are incurred.
−Removed: The Company expects to make contributions of approximately $ 1.4 million to its ERISA regulated defined benefit pension plan and $ 5.9 million to its non-ERISA regulated pension plans in fiscal year 2022.
UNIVERSAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: Universal makes regular contributions to its pension and other postretirement benefit plans.
+Added: As previously noted, for postretirement health benefits, contributions reflect funding of those benefits as they are incurred.
+Added: The Company expects to make no contributions to its ERISA regulated defined benefit pension plan and $ 2.3 million to its non-ERISA regulated pension plans in fiscal year 2023.
Estimated future benefit payments to be made from the Company’s plans are as follows:
19 unchanged sentences
• Equity securities:
−Removed: Investments in equity securities through actively-traded mutual funds are valued based on the net asset values of the units held in the respective funds, which are determined by obtaining quoted prices on nationally recognized securities exchanges.
+Added: Investments in equity securities through actively-traded mutual funds are valued based on the NAVs of the units held in the respective funds, which are determined by obtaining quoted prices on nationally recognized securities exchanges.
These securities are classified as Level 1.
• Fixed income securities:
−Removed: Fixed income investments that are held through mutual funds are valued based on the net asset values of the units held in the respective funds, which are determined by obtaining quoted prices on nationally recognized securities exchanges.
+Added: Fixed income investments that are held through mutual funds are valued based on the NAVs of the units held in the respective funds, which are determined by obtaining quoted prices on nationally recognized securities exchanges.
These securities are classified as Level 1.
6 unchanged sentences
Real estate assets are valued using valuation models that incorporate income and market approaches, including external appraisals, to derive fair values.
−Removed: The hedge fund allocation is a fund of hedge funds and is valued by the manager based on the net asset value of each fund.
+Added: The hedge fund allocation is a fund of hedge funds and is valued by the manager based on the NAV of each fund.
These models use significant unobservable inputs and are classified as Level 3 within the fair value hierarchy.
37 unchanged sentences
It authorizes the purchase of up to $ 100 million of the Company's outstanding common stock and expires on the earlier of November 15, 2022, or when the funds authorized for the program have been exhausted.
−Removed: At March 31, 2021, the full $ 100 million authorization remained available for share repurchases under the current program.
+Added: At March 31, 2022, $ 97 million of the authorization remained available for share repurchases under the current program.
Repurchases of common stock under the programs for fiscal years 2022, 2021, and 2020 were as follows:
13 unchanged sentences
Outside directors automatically receive restricted stock units following each annual meeting of shareholders.
−Removed: RSUs awarded under the Plans vest 5 years from the grant date and are then paid out in shares of common stock.
+Added: RSUs awarded prior to fiscal year 2022 vest 5 years after the grant date and those awarded after fiscal year 2022 vest 3 years after the grant date.
+Added: After vesting RSUs are paid out in shares of common stock.
Under the terms of the RSU awards, grantees receive dividend equivalents in the form of additional RSUs that vest and are paid out on the same date as the original RSU grant.
1 unchanged sentence
Shares ultimately paid out under PSU grants are dependent on the achievement of predetermined performance measures established by the Compensation Committee and can range from zero to 150 % of the stated award.
−Removed: RSUs awarded to outside directors prior to fiscal 2020 vest 3 years after the grant date and those granted in fiscal 2020 vest in 1 year.
+Added: RSUs awarded to outside directors prior to fiscal year 2020 vest 3 years after the grant date and those granted after fiscal year 2020 vest 1 year after the grant date.
Additionally, restricted stock vests upon the individual’s retirement from service as a director.
36 unchanged sentences
UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
COMMITMENTS, CONTINGENCIES, AND OTHER MATTERS
1 unchanged sentence
Contracts in most countries cover one annual growing season.
−Removed: Primarily with the farmer contracts in Brazil, Malawi, Mozambique, the Philippines, Guatemala, and Mexico, the Company provides seasonal financing to support the farmers’ production of their crops or guarantees their financing from third-party banks.
+Added: Primarily with the farmer contracts in Brazil, Malawi, Mozambique, the Philippines, Guatemala, and Mexico, the Company provides seasonal financing to support the farmers’ production of their crops.
At March 31, 2022, the Company had contracts to purchase approximately $ 599 million of tobacco to be delivered during the coming fiscal year and $ 124 million of tobacco to be delivered in subsequent years.
2 unchanged sentences
The Company withholds payments due to farmers on delivery of the tobacco to satisfy repayment of the financing it provided to the farmers.
−Removed: As noted above and discussed in more detail below, the Company also has arrangements to guarantee bank loans to farmers in Brazil, and payments are also withheld on delivery of tobacco to satisfy repayment of those loans.
In addition to its contractual obligations to purchase tobacco, the Company had commitments related to agricultural materials, approved capital expenditures, and various other requirements that approximated $ 132 million at March 31, 2022.
−Removed: Guarantees and Other Contingent Liabilities
−Removed: Guarantees of Bank Loans and Other Contingent Liabilities
−Removed: The majority of crop financing utilized for fiscal year 2021 in Brazil did not require guaranteed bank loans to tobacco growers, resulting in the elimination of guarantees at March 31, 2021.
−Removed: For the majority of crop financing prior to fiscal year 2021, the Company relied heavily on guaranteed bank loans to tobacco growers in Brazil for crop financing.
−Removed: Bank guarantees for the Company's operating subsidiary in Brazil normally expire within one year.
−Removed: The subsidiary withheld payments due to the farmers on delivery of tobacco and forwarded those payments to the third-party banks.
−Removed: Failure of farmers to deliver sufficient quantities of tobacco to the subsidiary to cover its obligations to the third-party banks would result in a liability for the subsidiary under the related guarantees;
−Removed: however, in that case, the subsidiary would have recourse against the farmers.
−Removed: The maximum potential amount of future payments that the Company’s subsidiary would have been be required to make at March 31, 2020, was the face amount (which includes unpaid interest), which was $ 3 million.
−Removed: The fair value of the guarantees was a liability of approximately $ 0.1 million at March 31, 2020.
−Removed: In addition to these guarantees, the Company has other contingent liabilities totaling approximately $ 1 million at March 31, 2021, primarily under outstanding letters of credit.
+Added: Other Contingent Liabilities
+Added: Other Contingent Liabilities (Letters of credit)
+Added: The Company had other contingent liabilities totaling approximately $ 1 million at March 31, 2022, primarily under outstanding letters of credit.
Value-Added Tax Assessments in Brazil
−Removed: As discussed in Note 1, the Company's local operating subsidiaries pay significant amounts of value-added tax ("VAT") in connection with their normal operations.
+Added: As discussed in Note 1, the Company's local operating subsidiaries pay significant amounts of VAT in connection with their normal operations.
In Brazil, VAT is assessed at the state level when green tobacco is transferred between states.
13 unchanged sentences
In addition, under the law, the subsidiary's tax filings for certain periods covered in the assessment were no longer open to any challenge by the tax authorities.
−Removed: In December 2015, the Parana tax authorities withdrew the initial claim and subsequently issued a new assessment
−Removed: UNIVERSAL CORPORATION
−Removed: CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: covering the same tax periods.
+Added: In December 2015, the Parana tax authorities withdrew the initial claim and subsequently issued a new assessment covering the same tax periods.
The new assessment totaled approximately $ 3 million at the March 31, 2022 exchange rate, reflecting a substantial reduction from the original $ 12 million assessment.
3 unchanged sentences
In both states, the process for reaching a final resolution to the assessments is expected to be lengthy, and management is not currently able to predict when either case will be concluded.
−Removed: Should the subsidiary ultimately be required to pay any tax, interest, or penalties in either case, the portion paid for tax would generate value-added tax credits that the subsidiary may be able to recover.
+Added: Should the subsidiary ultimately be required to pay any tax, interest, or penalties in either case, the portion paid for tax would generate VAT credits that the subsidiary may be able to recover.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Legal and Tax Matters
3 unchanged sentences
OPERATING SEGMENTS
−Removed: As a result of recent acquisitions of plant-based ingredients companies in fiscal year 2020 and 2021, during the fiscal year ended March 31, 2021 management evaluated the Company’s global business activities, including product and service offerings to its customers, as well as senior management’s operational and financial responsibilities.
+Added: As a result of acquisitions of plant-based ingredients companies in fiscal year 2020 and 2021, during the fiscal year ended March 31, 2021 management evaluated the Company’s global business activities, including product and service offerings to its customers, as well as senior management’s operational and financial responsibilities.
This assessment included an analysis of how its chief operating decision maker measures business performance and allocates resources.
As a result of this analysis, senior management determined the Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations.
−Removed: The Tobacco Operations segment activities involve selecting, procuring, processing, packing, storing, shipping, and financing leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products throughout the world.
+Added: The Tobacco Operations segment activities involve contracting, procuring, processing, packing, storing, and shipping leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products throughout the world.
Through various operating subsidiaries located in tobacco-growing countries around the world and significant ownership interests in unconsolidated affiliates, the Company processes and/or sells flue-cured and burley tobaccos, dark air-cured tobaccos, and oriental tobaccos.
Flue-cured, burley, and oriental tobaccos are used principally in the manufacture of cigarettes, and dark air-cured tobaccos are used mainly in the manufacture of cigars, pipe tobacco, and smokeless tobacco products.
−Removed: Some of these tobacco types are also increasingly used in the manufacture of non-combustible tobacco products that are intended to provide consumers with an alternative to traditional combustible products.
+Added: Some of these tobacco types are also increasingly used in the manufacture of next generation tobacco products that are intended to provide consumers with an alternative to traditional combustible products.
The Tobacco Operations segment also provides physical and chemical product testing and smoke testing for tobacco customers.
1 unchanged sentence
The Ingredients Operations segment provides its customers with a broad variety of plant-based ingredients for both human and pet consumption.
−Removed: The Ingredients Operations segment utilizes a variety of value-added manufacturing processes converting raw materials into a wide spectrum of fruit and vegetable juices, concentrates, and dehydrated products.
−Removed: Customers for the Ingredients Operations segment include large multinational food and beverage companies, as well as smaller independent entities.
−Removed: FruitSmart, Silva, and CIFI are the primary operations for the Ingredients Operations segment.
+Added: The Ingredients Operations segment utilizes a variety of value-added manufacturing processes converting raw materials into a wide spectrum of fruit and vegetable juices, concentrates, dehydrated products, botanical extracts, and flavorings.
+Added: Customers for the Ingredients Operations segment include large multinational food and beverage companies, smaller independent manufacturers, and retail organizations.
+Added: FruitSmart, Silva, and Shank's are the primary operations for the Ingredients Operations segment.
FruitSmart manufactures fruit and vegetable juices, purees, concentrates, essences, fibers, seeds, seed oils, and seed powders.
Silva is primarily a dehydrated product manufacturer of fruit and vegetable based flakes, dices, granules, powders, and blends.
−Removed: In December 2020, the Company announced the wind-down of CIFI, a greenfield operation that primarily manufactured both dehydrated and liquid sweet potato products.
+Added: Shank's manufactures botanical extracts and flavorings and also offers bottling and custom packaging for customers.
+Added: In fiscal year 2021, the Company announced the wind-down of CIFI, a greenfield operation that primarily manufactured both dehydrated and liquid sweet potato products.
See Note 4 for additional information about the wind-down of CIFI.
Universal incurs overhead expenses related to senior management, sales, finance, legal, and other functions that are centralized at its corporate headquarters, as well as functions performed at several sales and administrative offices around the world.
−Removed: These overhead expenses are currently allocated to the reportable operating segments, generally on the basis of volumes planned to be purchased and/or processed.
+Added: These overhead expenses are currently allocated to the reportable operating segments, generally on the basis of projected annual financial and operational performance, including volumes planned to be purchased and/or processed.
Management believes this method of allocation is currently representative of the value of the related services provided to the operating segments.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
−Removed: Reportable segment data as of, or for, the fiscal years ended March 31, 2021, 2020, and 2019, is as follows, including a recast of the new reportable operating segments presentation for all periods:
+Added: Reportable segment data as of, or for, the fiscal years ended March 31, 2022, 2021, and 2020, is as follows, including a recast of fiscal year 2020 for the current reportable operating segment presentation:
Sales and Other Operating Revenues Operating Income
9 unchanged sentences
Other income (3)
+Added: 2,532 4,173 —
Consolidated total $ 2,103,601 $ 1,983,357 $ 1,909,979 $ 160,315 $ 147,810 $ 126,367
20 unchanged sentences
(2) Restructuring and impairment costs are excluded from reportable segment operating income, but are included in consolidated operating income in the consolidated statements of income (see Note 4) .
−Removed: (3) Other income represents the reversal of a portion of the contingent consideration liability associated with the acquisition of FruitSmart.
+Added: (3) Other income represents the reversal of the contingent consideration liability associated with the acquisition of FruitSmart.
See Note 2 for additional information.
9 unchanged sentences
Belgium 283,072 366,476 361,889
−Removed: Poland 97,001 84,011 145,478
−Removed: Germany 94,519 104,525 166,397
Philippines 147,876 94,493 68,143
China 97,826 52,837 105,683
−Removed: Mexico 51,448 35,475 64,700
+Added: Germany 93,057 94,519 104,525
+Added: Poland 90,270 97,001 84,011
+Added: Netherlands 45,297 40,754 55,532
All other countries 850,881 868,203 908,768
25 unchanged sentences
Other comprehensive income (loss) attributable to Universal Corporation:
−Removed: Net gain (loss) on derivative instruments (net of tax (expense) benefit of $( 130 ), $ 2,880 and $ 602 )
+Added: Net gain (loss) on derivative instruments (net of tax (expense) benefit of $( 2,199 ), $( 130 )
+Added: and $ 2,880 )
6,679 1,791 ( 12,391 )
−Removed: Reclassification of net (gain) loss to earnings (net of tax expense (benefit) of $( 2,726 ), $ 136 , and $( 640 )) (1)
+Added: Reclassification of net (gain) loss to earnings (net of tax expense (benefit) of $ 1,115 , $( 2,726 ),
+Added: and $ 136 ) (1)
( 2,686 ) 10,021 541
5 unchanged sentences
Other comprehensive income (loss) attributable to Universal Corporation:
−Removed: Net gain (loss) on derivative instruments (net of tax (expense) benefit of $( 637 ), $ 6,801 , and $ 1,574 )
+Added: Net gain (loss) on derivative instruments (net of tax (expense) benefit of $( 3,249 ), $( 637 ),
+Added: and $ 6,801 )
12,402 2,396 ( 25,588 )
−Removed: Reclassification of net (gain) loss to earnings (net of tax expense (benefit) of $( 1,469 ), $ 234 , and $ 409 ) (2)
+Added: Reclassification of net (gain) loss to earnings (net of tax expense (benefit) of $( 1,628 ), $( 1,469 ),
+Added: and $ 234 ) (2)
6,218 5,526 ( 880 )
22 unchanged sentences
See Note 13 for additional information.
+Added: UNIVERSAL CORPORATION
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
+Added: SUBSEQUENT EVENTS
+Added: On April 1, 2022, the Company entered into a sales agreement to sell all outstanding common stock of the idled tobacco companies operating in Tanzania for $ 8.5 million.
+Added: The sale is expected to close during fiscal year 2023 and is subject to various governmental and regulatory approvals.
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
47 unchanged sentences
We analyzed the sensitivity of significant assumptions to evaluate the changes in the allowance that that would result from changes in the assumptions and we considered subsequent events to identify potential sources of contrary information to Management’s assumptions.
−Removed: Accounting for Acquisition of Silva International, Inc.
−Removed: Description of the Matter As described in Note 1 and 2 to the consolidated financial statements, on October 1, 2020 the Company acquired 100% of the capital stock of Silva International, Inc.
−Removed: (“Silva”) for approximately $164 million in cash and $5.9 million of working capital on-hand at the date of acquisition.
−Removed: The acquisition of Silva was accounted for as a business combination.
+Added: Accounting for Acquisition of Shank's Extracts, LLC.
+Added: Description of the Matter As described in Note 1 and 2 to the consolidated financial statements, on October 4, 2021 the Company acquired 100% of the capital stock of Shank’s Extracts, LLC.
+Added: (“Shank’s”) for approximately $100 million in cash and $2.4 million of working capital on-hand at the date of acquisition.
+Added: The acquisition of Shank’s was accounted for as a business combination.
Auditing the Company's accounting for its business combination was complex due to the significant estimation required by Management to determine the fair value of identifiable intangible assets including customer relationships ($24 million).
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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)2 report dated May 27, 2022 expressed an unqualified opinion thereon.
−Removed: As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Silva International, Inc., which is included in the 2021 consolidated financial statements of the Company and constituted 8.5% and 12.5% of total and net assets, respectively, as of March 31, 2021 and 3.1% and 5.7% of net sales and net income, respectively, for the year then ended.
−Removed: Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Silva International, Inc.
+Added: As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Shank's Extracts, LLC, which is included in the 2022 consolidated financial statements of the Company and constituted 4.7% and 7.3% of total and net assets, respectively, as of March 31, 2022 and 1.5% and 0.9% of consolidated sales and other operating revenues and net income, respectively, for the year then ended.
+Added: Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Shank's Extracts, LLC.
Basis for Opinion
19 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.