What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-06-01 compared with 2025-05-30 · 202 added, 165 removed, 1487 unchanged (20% of the section changed)

9 unchanged sentences

Restructuring and impairment costs 1,833 10,573 3,523

Goodwill impairment 41,061 — —

Operating income 168,451 232,797 222,009

112 unchanged sentences

Equity in net income of unconsolidated affiliates, net of dividends 245 ( 3,031 ) ( 1,239 )

Brazil tax ruling — — ( 29,236 )

Goodwill impairment 41,061 — —

Restructuring and impairment costs 1,833 10,573 3,523

23 unchanged sentences

Dividends paid on common stock ( 81,299 ) ( 79,686 ) ( 78,402 )

Proceeds from termination of interest rate swap agreements — — 11,786

Settlement costs from termination of interest rate swap agreements ( 988 ) — —

Debt issuance costs and other ( 12,941 ) ( 3,715 ) ( 3,607 )

28 unchanged sentences

— ( 81,712 ) — — ( 81,712 )

Repurchase of common stock — — — — —

Dividend equivalents on restricted stock units (RSUs) — ( 917 ) — — ( 917 )

19 unchanged sentences

Changes in common stock

Repurchase of common stock ( 1,373 ) — — — ( 1,373 )

Accrual of stock-based compensation 8,531 — — — 8,531

5 unchanged sentences

— ( 80,048 ) — — ( 80,048 )

Repurchase of common stock — ( 3,371 ) — — ( 3,371 )

Dividend equivalents on restricted stock units (RSUs) — ( 1,214 ) — — ( 1,214 )

36 unchanged sentences

Dividends paid to noncontrolling shareholders — — — ( 10,572 ) ( 10,572 )

Other — — — ( 427 ) ( 427 )

Balance at end of year $ 345,596 $ 1,173,196 $ ( 81,585 ) $ 41,716 $ 1,478,923

23 unchanged sentences

These investments are accounted for under the equity method because Universal exercises significant influence over those companies, but not control.

The Company received $ 4.2 million in fiscal year 2025, no dividends in fiscal year 2024, and $ 5.6 million in fiscal year 2023, from companies accounted for under the equity method.

The Company received $ 1.9 million dividends in fiscal year 2026, $ 4.2 million in fiscal year 2025, and no dividends in fiscal year 2024, from companies accounted for under the equity method.

Investments where Universal has a voting interest of less than 20% are not significant and do not have readily determinable fair values.

46 unchanged sentences

All highly liquid investments with a maturity of three months or less at the time of purchase are classified as cash equivalents.

Restricted cash related to the acquisition of Silva International, Inc.

(“Silva”) was released to a selling shareholder in fiscal year ended March 31, 2023.

Advances to Tobacco Suppliers

9 unchanged sentences

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.

Advances on which interest accruals had been discontinued totaled approximately $ 2 million at March 31, 2025 and 2024, respectively.

Interest on advances is recognized in earnings as it is earned.

Advances on which interest accruals had been discontinued totaled approximately $ 2 million at both March 31, 2026 and 2025.

Inventories are valued at the lower of cost or net realizable value.

3 unchanged sentences

The predominant cost component of the Company’s inventories is the cost of the unprocessed tobacco.

Direct and indirect processing costs related to these raw materials are capitalized and

Direct and indirect processing costs related to these raw materials are capitalized and allocated to inventory in a systematic manner.

The Company does not capitalize any interest or sales-related costs in inventory.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

allocated to inventory in a systematic manner.

The Company does not capitalize any interest or sales-related costs in inventory.

In-bound freight costs are recorded in cost of goods sold.

Other inventories consist primarily of unprocessed and processed food and beverage ingredients, botanical extracts, seed, fertilizer, packing materials, and other supplies, and are valued using the specific cost method.

The Company records inventory write-downs to cost of goods sold for obsolete or unmarketable inventory in an amount equal to the difference between the carrying cost of inventory and the estimated net realizable value based upon assumptions about product demand and market conditions.

If ultimate market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required.

The Company recognized inventory write-downs in fiscal years 2026, 2025, and 2024 of $52.0 million, $19.8 million, and $9.2 million, respectively.

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.

At March 31, 2025 and 2024, the aggregate balances of recoverable tax credits held by the Company’s subsidiaries totaled approximately $ 64 million and $ 72 million, respectively, and the related valuation allowances totaled approximately $ 21 million at both dates.

At March 31, 2026 and 2025, the aggregate balances of recoverable tax credits held by the Company’s subsidiaries totaled approximately $ 66 million and $ 64 million, respectively, and the related valuation allowances totaled approximately $ 22 million and $ 21 million at March 31, 2026 and 2025.

The net balances are reported in other current assets and other noncurrent assets in the consolidated balance sheets.

19 unchanged sentences

Additional disclosures related to the Company’s leases are provided in Note 9.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Goodwill and Other Intangibles

3 unchanged sentences

Reporting units are distinct operating subsidiaries or groups of subsidiaries that typically compose the Company’s business in a specific country or location.

Goodwill is allocated to reporting units based on the country or location to which a

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

specific acquisition relates, or by allocation based on expected future cash flows if the acquisition relates to more than one country or location.

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 net cash flows if the acquisition relates to more than one country or location.

The majority of the Company’s goodwill relates to its reporting unit in Brazil and reporting units in the Ingredients operating segment.

See Note 6 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.

Significant adverse changes in the operations or estimated future net cash flows for a reporting unit with recorded goodwill could result in an impairment charge.

Accounting Standards Codification Topic 350 (“ASC 350”) permits companies to base initial assessments of potential goodwill impairment on qualitative factors, and the Company elected to use that approach at March 31, 2026 for all entities with allocated goodwill with the exception of Universal Ingredients–Shank’s.

For all entities, except Universal Ingredients–Shank’s, those factors did not indicate that it was more likely than not that the fair value of any of the reporting units was less than their respective carrying value, therefore no potential impairment of the Company’s recorded goodwill was noted at March 31, 2026.

The Company elected to use the qualitative approach at March 31, 2025 for all entities.

Those factors did not indicate that it was more likely than not that the fair value of any of the reporting units was less than their respective carrying value, therefore no potential impairment of the Company’s recorded goodwill was noted at March 31, 2025.

ASC 350 also allows companies to bypass the qualitative assessment and perform a quantitative assessment.

The quantitative goodwill assessment consists of comparing the fair value of each reporting unit to the carrying value of that reporting unit.

In the event that the carrying value of the reporting unit exceeds its fair value, an impairment of the reporting unit's goodwill is recognized, up to the amount of goodwill allocated to that reporting unit.

The Company elected to bypass the qualitative assessment and perform a quantitative assessment of goodwill impairment at March 31, 2024.

The goodwill associated with Universal Ingredients–Shank’s was tested utilizing a quantitative approach at March 31, 2026.

The quantitative approach was utilized because management determined it was more likely than not that the carrying value exceeded the fair value of the reporting unit based on management's lower internal profitability projections in future years due primarily to the impacts of persistent adverse market conditions for certain new and existing product offerings.

ASC 350 allows companies to bypass the qualitative assessment and perform a quantitative assessment.

The quantitative goodwill assessment consists of comparing the fair value of each reporting unit to the carrying value of that reporting unit.

Fair value was assessed using a discounted cash flow model, comprised of estimates of future cash flows and discount rates.

Based on this quantitative assessment, the Company determined there was no impairment of goodwill for any of its reporting units as of March 31, 2024.

The fair value of Universal Ingredients–Shank’s at March 31, 2026 was assessed using a combination of a discounted cash flow model, comprised of estimates of future net cash flows and discount rates, as well as a market-based approach that considered a subset of peer companies.

Based on this quantitative assessment, the Company determined the carrying value of Universal Ingredients–Shank’s at March 31, 2026 exceeded the derived fair value and recognized a $ 41.1 million non-cash goodwill impairment charge for the fiscal year ended March 31, 2026.

Other intangibles principally consists of finite lived intangible assets including customer-related intangibles, trade names, developed technology, and noncompetition agreements.

11 unchanged sentences

Additional disclosures related to the Company’s income taxes are disclosed in Note 5.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair Values of Financial Instruments

7 unchanged sentences

The Company enters into such contracts only with counterparties of good standing.

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

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

material to the financial statements or operations of the Company.

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 10.

7 unchanged sentences

dollars creates remeasurement gains and losses that are included in earnings as a component of selling, general, and administrative expenses.

The Company recognized net remeasurement losses of $ 6.1 million and $ 5.1 million in fiscal years 2025 and 2024, respectively, and net remeasurement gains of $ 3.9 million in fiscal year 2023.

The Company recognized net remeasurement losses of $ 6.7 million, $ 6.1 million, and $ 5.1 million in fiscal years 2026, 2025, and 2024, respectively.

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.

The Company recognized net foreign currency transaction losses of $ 2.2 million, $ 3.2 million and $ 8.8 million in fiscal years 2025, 2024 and 2023, respectively.

The Company recognized net foreign currency transaction gains of $ 1.9 million in fiscal year 2026 and net foreign currency transaction losses of $ 2.2 million and $ 3.2 million in fiscal years 2025 and 2024, respectively.

Customer Advances and Deposits

12 unchanged sentences

Processing and packing of leaf tobacco is a short-duration process.

Under normal operating conditions, raw tobacco that is placed into the production line exits as processed and packed tobacco within one hour, and is then later transported to customer-designated storage facilities.

Under normal operating conditions, raw tobacco that is placed into the production line exits as processed and packed tobacco within one hour, and is then

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

later transported to customer-designated storage facilities.

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.

5 unchanged sentences

Additional disclosures related to the Company’s revenue from contracts with customers are provided in Note 2.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock-Based Compensation

4 unchanged sentences

Actual results could differ from those estimates.

Trade Receivable Sales

During fiscal year 2026, the Company entered into an agreement to sell certain trade receivables, at its discretion, to a third-party financial institution at a discount.

The transactions have no recourse and qualify as a true sale, meaning upon receipt of the settlement amount, the associated receivable is removed from the balance sheet and the discount is recognized as an expense in selling, general, and administrative expense on the consolidated statements of income.

During the fiscal year ended March 31, 2026, the Company sold $ 208.7 million of receivables and recorded discounts of $ 1.8 million.

Accounting Pronouncements

Pronouncements Adopted in Fiscal Year 2023

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2020-04, “Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”).

ASU 2020-04 provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

ASU 2020-04 also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform.

The Company adopted the new standard effective December 31, 2022.

There was no material impact to the consolidated financial statements from the adoption of ASU 2020-04.

Pronouncements Adopted in Fiscal Year 2025

Accounting Pronouncements Adopted in Fiscal Year 2026

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosure” (“ASU 2023-09”).

ASU 2023-09 requires additional disclosures reconciling the rates of different categories of income tax (i.e.

federal, state, foreign, etc.) and a disaggregation of taxes paid and refunded.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and for interim periods in fiscal years beginning after December 15, 2025.

The Company adopted ASU 2023-09 in fiscal year 2026, incorporating additional income tax disclosures on a prospective basis in Note 5.

Accounting Pronouncements Adopted in Fiscal Year 2025

In November 2023, the FASB issued Accounting Standards Update No.

4 unchanged sentences

Accounting Pronouncements to be Adopted in Future Years

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosure” (“ASU 2023-09”).

ASU 2023-09 requires additional disclosures reconciling the rates of different categories of income tax (i.e.

federal , state, foreign, etc.) and a disaggregation of taxes paid and refunded.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and for interim periods in fiscal years beginning after December 15, 2025, although early adoption is permitted.

The Company is currently evaluating the impact of adopting this standard on its income tax disclosures.

In November 2024, the FASB issued Accounting Standards Update No.

3 unchanged sentences

The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Reclassifications

6 unchanged sentences

Contract durations and payment terms for all revenue categories generally do not exceed one year.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

transaction is recognized to the time the customer pays for the related good or service transferred will be one year or less.

Therefore, the Company has applied a practical expedient to not adjust the transaction price for the effects of financing components, as the Company expects that the period from the time the revenue for a transaction is recognized to the time the customer pays for the related good or service transferred will be one year or less.

Below is a description of the major revenue-generating categories from contracts with customers.

7 unchanged sentences

Shipping and handling costs under tobacco sales contracts with customers are treated as fulfillment costs and included in the transaction price.

Under agreements with certain customers, the Company will act as the importer of record, incurring various additional costs associated with the import activity, including tariffs, and applying for drawback of those costs when possible.

When the agreement with the customer provides for the reimbursement of those fees, the reimbursement is included in the transaction price.

Taxes assessed by government authorities on the sale of leaf tobacco products are excluded from the transaction price.

15 unchanged sentences

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, logistics, 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.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

arrangements with customers.

The transaction prices and timing of revenue recognition of these items are determined by the specifics of each contract.

Disaggregation of Revenue from Contracts with Customers

12 unchanged sentences

A material part of the Company’s business is dependent upon a few customers.

The Company’s six largest customers are British American Tobacco plc, China Tobacco International, Inc., Eastern Company S.A.E., Imperial Brands plc, Japan Tobacco, Inc., and Philip Morris International, Inc.

The Company’s six largest customers are Altria Group, Inc., British American Tobacco plc, China Tobacco International, Inc., Imperial Brands plc, Japan Tobacco, Inc., and Philip Morris International Inc.

In the aggregate, these customers have accounted for approximately 60 % of consolidated revenue for each of the past three fiscal years.

For the fiscal years ended March 31, 2026, 2025, and 2024, revenue from Philip Morris International Inc.

accounted for revenue of approximately $ 480 million, $ 630 million, and $ 460 million, respectively, Imperial Brands plc accounted for revenue of approximately $ 370 million, $ 340 million, and $ 430 million, respectively, and China Tobacco International, Inc.

accounted for revenue of approximately $ 620 million, $ 480 million, and $ 630 million, respectively, Imperial Brands plc accounted for revenue of approximately $ 400 million, $ 370 million, and $ 340 million, respectively, and Japan Tobacco, Inc.

accounted for revenue of approximately $ 250 million, $ 240 million, and $ 260 million, respectively.

3 unchanged sentences

During the fiscal years ended March 31, 2026, 2025 and 2024, Universal recorded restructuring and impairment costs related to business changes and various initiatives to adjust certain operations and reduce costs.

There were no restructuring costs incurred for the fiscal year ended March 31, 2023.

See Note 1 for goodwill impairment for the fiscal year ended March 31, 2026.

Fiscal Year Ended March 31, 2026

Tobacco Operations

During the fiscal year ended March 31, 2026, the Company recognized an additional $ 0.7 million of restructuring costs and $ 1.0 million of impairment costs related to the consolidation of its European sheet tobacco operations that began during the fiscal year ended March 31, 2025.

The Company also incurred $ 0.1 million of termination and impairment costs in other areas of the Tobacco Operations segment during the fiscal year ended March 31, 2026.

Fiscal Year Ended March 31, 2025

Tobacco Operations

During the fiscal year ended March 31, 2025, the Company began consolidating its European sheet tobacco operations into the Company’s facility in the Netherlands, by initiating a wind-down of activities at its sheet facility in Germany, incurring $ 10.5 million of restructuring and impairment costs.

3 unchanged sentences

During the fiscal year ended March 31, 2024, the Company incurred $ 1.8 million of restructuring and impairment costs for its Global Laboratory Services, Inc (“GLS”) facility in Wilson, NC.

GLS provided testing for crop protection agents and tobacco constituents in seed, leaf, and finished products, including e-cigarette liquids and vapors, and had capabilities for testing non-tobacco products.

The restructuring and impairment costs were net of approximately $ 0.2 million of income from the sale of GLS processes and procedures to a third-party buyer.

Additionally, during the fiscal year ended March 31, 2024, the Company also incurred $ 1.7 million of termination and impairment costs in other areas of the Tobacco Operations segment.

GLS provided testing for crop protection agents and tobacco constituents in seed, leaf, and finished products, including e-cigarette liquids and vapors, and had capabilities for testing

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

non-tobacco products.

The restructuring and impairment costs were net of approximately $ 0.2 million of income from the sale of GLS processes and procedures to a third-party buyer.

Additionally, during the fiscal year ended March 31, 2024, the Company also incurred $ 1.7 million of termination and impairment costs in other areas of the Tobacco Operations segment.

A summary of the restructuring and impairment costs incurred during the fiscal years ended March 31, 2026, 2025, and 2024 is as follows:

48 unchanged sentences

$ 1.30 $ 3.78 $ 4.78

I NCOME TAXES

The Company operates in the United States and many foreign countries and is subject to the tax laws of many jurisdictions.

The Company operates in the United States and many foreign countries and is subject to the tax laws of multiple jurisdictions.

Changes in tax laws or the interpretation of tax laws can affect the Company’s earnings, as can the resolution of pending and contested tax issues.

4 unchanged sentences

tax law imposes a tax on U.S.

shareholders on certain low-taxed income earned by controlled foreign corporations, referred to as global intangible low-taxed income (“GILTI”).

The Company has made an accounting policy election to account for any additional tax resulting from the GILTI provisions in the year in which it is incurred and has not recorded any deferred taxes on temporary book-tax differences related to this income.

shareholders on certain low-taxed income earned by controlled foreign corporations, referred to as net controlled foreign corporation tested income (“NCTI”).

The Company has made an accounting policy election to account for any additional tax resulting from the NCTI provisions in the year in which it is incurred and has not recorded any deferred taxes on temporary book-tax differences related to this income.

The Company continues to assume repatriation of all undistributed earnings of its consolidated foreign subsidiaries and has therefore provided for expected foreign withholding taxes on the distribution of those earnings where applicable, net of any U.S.

tax credit attributable to those withholding taxes.

Brazil enacted new legislation applying a 10% withholding tax on dividends approved after December 31, 2025 to nonresident shareholders.

The Company's tax holiday in Mozambique ended on December 31, 2025, increasing the local statutory rate to 32% and the withholding tax on dividends to 20%.

The Company has asserted permanent reinvestment of the book basis of certain foreign subsidiaries, and accordingly, no deferred income tax liability has been recorded for any potential taxable gain that may be realized on a future disposition or liquidation of any of those subsidiaries.

It is not practicable for the Company to quantify any deferred income tax liability that would be attributable to those events.

In various countries in which the Company operates, legislation has been enacted incorporating the Organization for Economic Cooperation and Development’s Global Anti-Base Erosion Pillar Two model rules establishing a 15% global minimum tax.

In certain countries this legislation became effective at the beginning of fiscal year 2025.

In various countries in which the Company operates, legislation has been enacted incorporating the Organisation for Economic Co-operation and Development’s Global Anti-Base Erosion Pillar Two model rules establishing a 15% global minimum tax.

The estimated tax impact of such legislation has been included in the provision for income taxes and is not material.

Like GILTI, this is treated as a period cost and does not have any additional deferred taxes related to these new laws.

Like NCTI, this is treated as a period cost and does not have any additional deferred taxes related to these new laws.

UNIVERSAL CORPORATION

14 unchanged sentences

Foreign taxes include any applicable U.S.

tax expense on the earnings of foreign subsidiaries.

tax expense on the earnings of foreign subsidiaries for fiscal years 2025 and 2024.

Consolidated Effective Income Tax Rate

1 unchanged sentence

federal statutory tax rate to the Company’s effective income tax rate is as follows:

March 31, 2026

Amount Percentage

Tax expense at U.S.

federal statutory rate $ 21,557 21.0 %

State and local income taxes ( 344 ) ( 0.3 ) %

International

Foreign rate differential 8,116 7.9 %

ICMS not included in tax base ( 8,093 ) ( 7.9 ) %

Local statutory differences 4,200 4.1 %

Withholding taxes 5,410 5.3 %

Dominican Republic

Foreign rate differential 3,478 3.4 %

Withholding taxes ( 1,656 ) ( 1.6 ) %

Foreign rate differential 5,179 5.0 %

Local statutory differences 480 0.5 %

Withholding taxes 1,031 1.0 %

Foreign rate differential ( 540 ) ( 0.5 ) %

Local statutory differences 2,515 2.4 %

Withholding taxes 216 0.2 %

Foreign rate differential ( 8,171 ) ( 8.0 ) %

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Local statutory differences ( 1,199 ) ( 1.2 ) %

Withholding taxes ( 93 ) ( 0.1 ) %

Foreign rate differential 621 0.6 %

Local statutory differences 208 0.2 %

Withholding taxes 1,367 1.3 %

Foreign rate differential ( 143 ) ( 0.1 ) %

Local statutory differences 121 0.1 %

Withholding taxes 2,194 2.1 %

Dividends paid from previously taxed earnings ( 3,533 ) ( 3.4 ) %

Withholding taxes paid on dividends paid from previously tax earnings 2,523 2.5 %

Other international jurisdictions local statutory differences 5,100 5.0 %

Effect of cross border tax laws

Net controlled foreign corporation tested income, net of foreign tax credits 6,241 6.1 %

Branch income, taxed in U.S., net of foreign tax credits 1,557 1.5 %

Other 1,833 1.8 %

Foreign tax credits ( 4,455 ) ( 4.3 ) %

Nontaxable or nondeductible items 817 0.8 %

Changes in unrecognized tax benefits 31 — %

All other 89 0.1 %

Total $ 46,657 45.5 %

For the fiscal year ending March 31, 2026, state taxes in Pennsylvania, New Jersey, and Illinois make up the majority (greater than 50%) of the state and local tax category.

Fiscal Year Ended March 31,

2025 2024 2023

federal statutory tax rate 21.0 % 21.0 %

3 unchanged sentences

Foreign dividend withholding taxes 6.7 2.9

Brazil tax ruling — — ( 17.1 )

Changes in uncertain tax positions — ( 0.2 )

1 unchanged sentence

Effective income tax rate 26.6 % 19.0 %

In fiscal year 2023, one of the Company’s subsidiaries in Brazil received a favorable final judgement from the Brazilian Superior Court of Justice.

The lawsuit asserted certain tax credits on exported goods should be excluded from taxable income.

The Brazilian revenue authority asserted certain tax credits generated on purchased goods and services that were ultimately exported from Brazil should be included in the calculation of taxable income.

The Brazilian Superior Court of Justice affirmed the tax credits are non-taxable in accordance with the historical and existing tax legislation in Brazil.

The ruling resulted in recognition of $ 26.6 million of Brazilian tax credits due to the recalculation of federal income taxes in Brazil for years 2015 through 2022.

The affirmative ruling also resulted in recognition of $ 5.0 million of interest income for the fiscal year ended March 31, 2023.

The tax credits and associated interest income credits were used to reduce federal non-income tax liabilities through the end of fiscal year 2025 and were exhausted as of March 31, 2025.

The tax credits were recognized as both current and noncurrent assets on the consolidated balance sheet based on when the credits were expected to be realized.

Additionally, the unused tax credits earned tax-exempt interest income through the utilization date, which were used to reduce both non-income tax and income tax liabilities.

The ruling resulted in a net income tax benefit of $ 24.2 million in fiscal year 2023.

The net income tax benefit of the Brazil tax ruling resulted in a $ 2.4 million income tax provision for U.S.

federal income taxes related to the fiscal year 2018 consolidated federal tax return.

Additionally, the Company sold its idled Tanzania operations and recognized $ 1.1 million of income taxes in the fiscal year ended March 31, 2023.

UNIVERSAL CORPORATION

46 unchanged sentences

Related to tax positions for the current year 63 71 65

Related to tax positions for prior years — — —

Due to lapses of statutes of limitations ( 49 ) ( 56 ) ( 56 )

3 unchanged sentences

The liability for uncertain tax positions at March 31, 2026 includes approximately $ 1.0 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 $ 0.8 million related to tax positions for which it is reasonably possible that the amounts could change significantly before March 31, 2026.

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.

The $ 1.7 million settlement in fiscal year 2023 represents the resolution of a tax matter with a foreign tax authority.

For fiscal year ended March 31, 2023, the Company recognized $ 1.8 million as a reduction to interest expense related to an uncertain tax position on the Tanzania operations that were sold in fiscal year 2023.

Amounts accrued or reversed for interest and penalties were not material for fiscal years 2024 through 2026, and liabilities recorded for penalties at March 31, 2026 and 2025 were also not material.

6 unchanged sentences

Federal fiscal year 2018 tax return due to the election on the amended return that extended the statute to 30 years.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

T he following table provides the cash income taxes paid, net of refunds for the year ended March 31, 2026:

March 31, 2026

Income tax payments (net of refunds):

United States:

Federal $ 7,602

State and Local 539

Total United States 8,141

Philippines 4,712

Singapore 4,985

Zimbabwe 2,523

Other Foreign 5,471

Total Foreign 34,976

Total $ 43,117

GOODWILL AND OTHER INTANGIBLES

2 unchanged sentences

Balance at beginning of year $ 213,840 $ 213,869

Goodwill impairment (1)

Foreign currency translation adjustment

1 unchanged sentence

Balance at end of year $ 172,695 $ 213,840

(1) A $ 41.1 million non-cash goodwill impairment charge for Universal Ingredients–Shank’s was recognized for the fiscal year ended March 31, 2026.

There is no remaining goodwill related to Universal Ingredients–Shank’s at March 31, 2026.

See Note 1 for additional information.

UNIVERSAL CORPORATION

19 unchanged sentences

Intangible assets are amortized on a straight-line basis over the asset’s estimated useful economic life as noted above.

The Company’s amortization expense for intangible assets for the years ended March 31, 2025, 2024, and 2023:

The Company’s amortization expense for intangible assets for the fiscal years ended March 31, 2026, 2025, and 2024:

Fiscal Year Ended March 31,

8 unchanged sentences

Bank Credit Agreement

The Company has a senior unsecured bank credit agreement that includes a $ 530 million five-year revolving credit facility (expiring December 15, 2027), a $ 275 million five-year term loan (due December 15, 2027), and a $ 345 million seven-

On December 9, 2025, the Company entered into a new senior unsecured bank credit agreement that replaced its then existing bank credit agreement.

In addition to extending the maturity dates of the underlying components of the facility, the new

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

year term loan (due December 15, 2029).

Borrowings under the revolving credit facility bear interest at a variable rate benchmarked to the Secured Overnight Financing Rate (“SOFR”), plus a margin that is based on the Company’s credit measures.

agreement includes a $ 780 million five-year revolving credit facility (expiring December 9, 2030), a $ 275 million five-year term loan (due December 9, 2030), and a $ 345 million seven-year term loan (due December 9, 2032).

The new facility may be expanded to allow for additional borrowings of up to $ 300 million under certain conditions.

Borrowings under the revolving credit facility bear interest at a variable rate benchmarked to the Secured Overnight Financing Rate (“SOFR”) plus a margin based on the Company’s credit measures.

In addition to interest, the Company pays a facility fee on the revolving credit facility.

$ 50 million was outstanding under the revolving credit facility at March 31, 2026.

The credit agreement provides for an expansion of the facility under certain conditions to allow additional borrowings of up to $ 200 million.

Additional information related to the term loans is provided in Note 8.

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 these financial covenants at March 31, 2025.

The Company may request that the lenders extend the applicable maturity date for the revolving credit facility, the five-year term loan and/or the seven-year term loan for up to two one-year extensions, subject to satisfaction of certain terms and conditions and consent of the requisite number of lenders.

The Company’s obligations under the new bank credit agreement are guaranteed by its subsidiary, Universal Ingredients.

The new credit agreement contains financial covenants that require the Company to maintain certain levels of tangible net worth and leverage.

These covenants are substantially the same as the covenants in the prior bank credit agreement, and the Company was in compliance with the covenants at March 31, 2026.

Short-Term Credit Facilities

11 unchanged sentences

Long-term debt $ 616,727 $ 617,918

As discussed in Note 7, the Company has a bank credit agreement that includes a $ 275 million five-year term loan and a $ 345 million seven-year term loan.

As discussed in Note 7, on December 9, 2025, the Company entered into a new bank credit agreement that replaced its then existing bank credit agreement.

In addition to extending the maturity dates of the underlying components of the facility, the new agreement includes a $ 275 million five-year term loan and a $ 345 million seven-year term loan.

Both term loans were fully funded at closing, require no amortization, and are repayable without penalty prior to maturity.

2 unchanged sentences

These agreements were terminated concurrently with the repayment of the prior term loans and replaced with new interest rate swap agreements that will continue to convert a portion of the variable benchmark rate to a fixed rate on each term loan through their respective maturity dates.

The proceeds for the fair value of the terminated interest rate swap agreements, approximately $ 11.8 million, were recognized in accumulated other comprehensive income and are being amortized into earnings as a reduction of interest expense through their original maturity dates.

With the swap agreements in place, the effective interest rates on the swapped portions of the five-year and seven-year term loans were 5.47 % and 6.13 % at March 31, 2026, respectively.

The weighted average effective interest rates, when taking into consideration both the swapped and unswapped interest payments for all outstanding long-term debt, were 5.96 % and 6.16 % at March 31, 2025 for the five-year and seven-year term loans, respectively.

The weighted average effective interest rates, when taking into consideration both the swapped and unswapped interest payments, were 5.57 % and 6.15 % at March 31, 2026 for the five-year and seven-year term loans, respectively.

Changes in the effective interest rates could result from a change in interest rates on the unhedged interest payments or a change in the Company’s credit measures that impact the applicable credit spreads specified in the underlying loan agreement.

2 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.

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.

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.

On the date of lease commencement, the present value of lease liabilities is determined by discounting the future lease payments by

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

the Company’s collateralized incremental borrowing rate, adjusted for the lease term and currency of the lease payments.

The following table sets forth the right-of-use assets and lease liabilities for operating leases included in the Company’s consolidated balance sheet:

45 unchanged sentences

At March 31, 2026, the total notional amount of the interest rate swaps was $ 310 million, which corresponded to a portion of the aggregate balance of the term loans.

Previously, the Company had receive-floating/pay-fixed interest rate swap agreements that were designated and qualified as cash flow hedges for two non-amortizing bank loans that were repaid concurrent with closing on the new bank credit facility in December 2022.

Previously, the Company entered into receive-floating/pay-fixed interest rate swap agreements in December 2022 that were designated and qualified as cash flow hedges for two non-amortizing bank loans that were repaid concurrent with the entry into the Company's new bank credit facility in December 2025.

Those swap agreements, which had an aggregate notional amount of $ 310 million corresponding to a portion of the principal balance on the repaid loans, were terminated concurrent with the inception of the new swap agreements.

The fair value of the previous swap agreements, approximately $ 11.8 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.

The fair value of the previous swap agreements, approximately $ 1.0 million, was paid to the counterparties in December 2025 upon termination and is being amortized from accumulated other comprehensive loss into earnings as interest expense through the original maturity dates of those agreements.

Cash Flow Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Forecast Purchases of Tobacco, Tobacco Processing Costs, and Crop Input Sales

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Crop input sales 2026 Brazil 2027

Crop input sales 2024 Brazil 2026

Forward contracts related to processing and operating 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.

34 unchanged sentences

Gain (loss) reclassified from accumulated other comprehensive loss into earnings $ 2,009 $ 4,676 $ 5,592

Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings $ 2,754 $ 5,397 $ 1,570

Gain (loss) on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings $ 1,968 $ 2,754 $ 5,397

Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings Interest expense

115 unchanged sentences

Accordingly, the nonrecurring measurement of the fair value of these assets and liabilities are classified within Level 3 of the fair value hierarchy.

See Note 1 for discussion of the goodwill impairment at Universal Ingredients–Shank’s.

Acquisition Accounting for Business Combinations

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As discussed in Note 3, during fiscal year 2025, the Company initiated a plan to consolidate the European Sheet tobacco operations into the Company’s facility in the Netherlands.

The Company is in the process of winding down its operations in Germany, resulting in an impairment charge of $ 4.9 million for the long-lived assets in the three-month period ended September 30, 2024, to reduce their carrying value to fair value.

The Company is in the process of winding down its operations in Germany, resulting in an impairment charge of $ 4.9 million for the long-lived assets for the fiscal year ended March 31, 2025, to reduce their carrying value to fair value.

The long-lived assets primarily consist of a processing facility, machinery and equipment, and administrative offices.

As part of the wind-down, the Company also recognized other impairment charges associated with inventory, certain accounts receivable and other assets during the three-month period ended September 30, 2024.

As part of the wind-down, the Company also recognized other impairment charges associated with inventory, certain accounts receivable and other assets in fiscal year 2025.

After reassessing the fair value of the

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

long-lived assets associated with the operations in Germany, an additional $ 1.0 million impairment charge was recognized in fiscal year 2026.

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

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The assumed long-term rate of return used to calculate annual benefit expense is based on the asset allocation and expected market returns for the respective asset classes.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The weighted–average target pension asset allocation and target ranges at the March 31, 2026 measurement date and the actual asset allocations at the March 31, 2026 and 2025 measurement dates by major asset category were as follows:

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(1) Actual amounts include high yield securities and cash balances held for the payment of benefits.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Universal makes regular contributions to its pension and other postretirement benefit plans.

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Real estate assets are valued using valuation models that incorporate income and market approaches, including external appraisals, to derive fair values.

The hedge fund allocation is a fund of hedge funds

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

and is valued by the manager based on the NAV of each fund.

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.

7 unchanged sentences

Total investments $ 141,169 $ 14,331 $ 19,317 $ 174,817

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2025

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At March 31, 2026, $ 100 million of the authorization remained available for share repurchases under the current program.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Repurchases of common stock under the programs for fiscal years 2026, 2025, and 2024 were as follows:

6 unchanged sentences

Executive Stock Plans

The Company’s shareholders have approved executive stock plans under which directors, officers, and employees of the Company may receive grants and awards of common stock, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”), stock appreciation rights (“SARs”), incentive stock options, and non-qualified stock options.

The Company’s shareholders have approved executive stock plans under which directors, officers, and employees of the Company may receive grants and awards of common stock, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”), stock appreciation rights, incentive stock options, and non-qualified stock options.

Currently, grants are outstanding under the 1997 Executive Stock Plan, the 2002 Executive Stock Plan, the 2007 Stock Incentive Plan, the 2017 Stock Incentive Plan, and the 2023 Stock Incentive Plan.

1 unchanged sentence

New awards may no longer be issued under the 1997, 2002, 2007, and 2017 Plans.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company’s practice is to award grants of stock-based compensation to officers at the first regularly-scheduled meeting of the Compensation and Human Resources Committee of the Board of Directors (the “Compensation Committee”) in the fiscal year following the public release of the Company’s financial results for the prior fiscal year.

2 unchanged sentences

Outside directors automatically receive restricted stock units following each annual meeting of shareholders.

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.

RSUs awarded to officers generally vest 3 years after the grant date.

After vesting RSUs are paid out in shares of common stock.

4 unchanged sentences

Additionally, restricted stock vests upon the individual’s retirement from service as a director.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

RSUs, Restricted Stock, and PSUs

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Fair value expense for stock-based compensation is recognized ratably over the period from grant date to the earlier of (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award.

For employees who are already eligible to retire at the date an award is granted, the total fair value of the award is recognized as expense at the date of grant.

For employees who are already eligible to retire at the date an award is granted, the total fair value of the award is recognized as expense at the date of

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the fiscal years ended March 31, 2026, 2025, and 2024, total stock-based compensation expense and the related income tax benefit recognized were as follows:

4 unchanged sentences

At March 31, 2026, the Company had $ 3.3 million of unrecognized compensation expense related to stock-based awards, which will be recognized over a weighted-average period of approximately 0.7 years.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

COMMITMENTS, CONTINGENCIES, AND OTHER MATTERS

2 unchanged sentences

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, 2025, the Company had contracts to purchase approximately $ 759 million of tobacco to be delivered during fiscal year 2026 and $ 167 million of tobacco to be delivered in subsequent years.

At March 31, 2026, the Company had contracts to purchase approximately $ 699 million of tobacco to be delivered during fiscal year 2027 and $ 159 million of tobacco to be delivered in subsequent fiscal years.

These amounts are estimates since actual quantities purchased will depend on crop yields, and prices will depend on the quality of the tobacco delivered and other market factors.

6 unchanged sentences

Value-Added Tax Assessments in Brazil

As discussed in Note 1, the Company’s local operating subsidiaries pay significant amounts of VAT in connection with their normal operations.

The Company’s local operating subsidiaries pay significant amounts of value-added tax (“VAT”) in connection with their operations, which generate tax credits that they normally are entitled to recover through offset, refund, or sale to third parties.

In Brazil, VAT is assessed at the state level when green tobacco is transferred between states.

The Company’s operating subsidiary in Brazil pays VAT when tobaccos grown in the state of Parana are transferred to its factory in the state of Rio Grande do Sul for processing.

The subsidiary received assessments for additional VAT plus interest and penalties from the tax authorities for the state of Parana based on an audit of the subsidiary’s VAT filings for specified periods.

In September 2014, tax authorities for the state of Parana issued an assessment for tax, interest, and penalties for periods from 2009 through 2014 totaling approximately $ 10 million.

These amounts are based on the exchange rate for the Brazilian currency at March 31, 2025.

Management of the operating subsidiary and outside counsel believe that errors were made by the tax authorities for the state of Parana in determining all or significant portions of this assessment and that various defenses support the subsidiary’s position.

Management of the subsidiary and outside counsel challenged the full amount of the claim.

A significant portion of the Parana assessment was based on positions taken by the tax authorities that management and outside counsel believe deviate significantly from the underlying statutes and relevant case law.

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.

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, 2025 exchange rate, reflecting a substantial reduction from the original $ 10 million assessment.

Notwithstanding the reduction, management and outside counsel continue to believe that the new assessment is not supported by the underlying statutes and relevant case law and have challenged the full amount of the claim.

The range of reasonably possible loss is considered to be zero up to the full $ 3 million assessment.

However, based on the strength of the subsidiary’s defenses, no loss within that range is considered probable at this time and no liability has been recorded at March 31, 2025.

The process for reaching a final resolution to the Parana assessment is expected to be lengthy, and management is not currently able to predict when the case will be concluded.

Should the subsidiary ultimately be required to pay any tax, interest, or penalties, the portion paid for tax would generate VAT credits that the subsidiary may be able to recover.

The Company’s Brazilian operating subsidiary pays VAT when tobaccos grown outside the state of Rio Grande do Sul are transferred to the factory for processing.

The subsidiary received assessments for additional VAT plus interest and penalties from tax authorities for the state of Parana based on audits of the subsidiary’s VAT filings for specified periods.

Management of the subsidiary and outside counsel challenged the Parana assessment claims.

In July 2025, a final and indisputable favorable ruling was issued by the Brazilian National Treasury Attorney's office declaring the Parana assessment without merit, requiring the state to withdraw and cancel all claims made against the Company's Brazilian operating subsidiary.

Other Legal and Tax Matters

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Management regularly evaluates the Company’s global business activities, including product and service offerings to its customers, as well as senior management’s operational and financial responsibilities.

Assessments include an analysis of how its

Assessments include an analysis of how its Chief Operating Decision Maker (“CODM”) measures business performance and allocates resources.

As a result of this analysis, senior management has determined the Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations.

UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Chief Operating Decision Maker (“CODM”) measures business performance and allocates resources.

As a result of this analysis, senior management has determined the Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations.

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.

5 unchanged sentences

The Ingredients Operations segment provides its customers with a broad variety of plant-based ingredients for both human and pet consumption.

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.

Customers for the Ingredients Operations segment include large multinational food and beverage companies, smaller independent manufacturers, and retail organizations.

FruitSmart, Inc.

(“FruitSmart”), Silva International, Inc.

(“Silva”), and Shank’s Extracts, LLC d/b/a Universal Ingredients–Shank’s (“Universal Ingredients–Shank’s”) are the primary operations for the Ingredients Operations segment.

FruitSmart, Silva, and Universal Ingredients–Shank’s are the primary operations for the Ingredients Operations segment.

FruitSmart supplies a broad set of juices, concentrates, pomaces, purees, fruit fibers, seeds, seed powders, and other value-added products to food, beverage, and flavor companies throughout the United States and internationally.

16 unchanged sentences

Corporate overhead allocated to the segments ( 61,928 ) ( 11,708 ) ( 73,636 ) ( 65,195 ) ( 12,142 ) ( 77,337 ) ( 61,655 ) ( 12,718 ) ( 74,373 )

Equity in pretax earnings (loss) of unconsolidated affiliates (1)

Equity in pretax earnings (loss) of unconsolidated

affiliates (1)

3,430 — 3,430 9,103 — 9,103 756 — 756

4 unchanged sentences

( 1,833 ) ( 10,573 ) ( 3,523 )

Goodwill impairment (3)

( 41,061 ) — —

Consolidated operating income $ 168,451 $ 232,797 $ 222,009

1 unchanged sentence

(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 3).

(3) Goodwill impairment is excluded from reportable segment operating income, but is included in consolidated operating income in the consolidated statements of income (see Note 1).

Segment Assets Accounts Receivable, net

27 unchanged sentences

Belgium 559,625 532,479 552,208

Indonesia 193,543 105,934 117,019

Poland 170,885 99,845 97,723

China 169,291 293,619 219,979

Egypt 143,527 18,892 19,465

Philippines 151,515 120,648 133,656

Germany 65,817 115,938 95,350

Indonesia 105,934 117,019 45,089

Poland 99,845 97,723 119,629

Italy 51,904 46,417 47,197

France 41,369 22,323 16,669

Netherlands 29,107 37,501 42,492

Mexico 22,830 29,073 26,438

France 22,999 16,669 64,563

All other countries 809,220 921,182 851,919

Consolidated total $ 2,924,470 $ 2,947,284 $ 2,748,573

Long-Lived Assets

Long-Lived Assets (net)

(in thousands) 2026 2025 2024

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Net gain (loss) on derivative instruments (net of tax (expense) benefit of $( 561 ), $ 1,440

and $( 1,160 ))

2,779 ( 4,860 ) ( 187 )

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Recognition of net actuarial loss for pension settlement, (net of tax benefit of $( 3,257 )) (4)

Amortization included in earnings (net of tax benefit of $ 158 , $ 339 , and $ 223 ) (5)

Amortization included in earnings (net of tax (expense) benefit of $( 34 ), $ 158 , and $ 339 ) (5)

168 ( 526 ) ( 1,236 )

22 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 30, 2025 expressed an adverse opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated June 1, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Description of the Matter The Company’s gross balance of recoverable value-added tax (“VAT”) credits totaled approximately $66 million as of March 31, 2026, and the related allowance totaled approximately $22 million.

As discussed in Note 1 of the financial statements, in many foreign countries, the Company pays and receives a significant amount of VAT on purchases and sales of tobacco and tobacco related material.

As discussed in Note 1 of the consolidated financial statements, in many foreign countries, the Company pays and receives a significant amount of VAT on purchases and sales of tobacco and tobacco related material.

Items subject to a VAT vary from jurisdiction to jurisdiction as do the rates at which the tax is assessed.

9 unchanged sentences

We analyzed the sensitivity of significant assumptions to evaluate the changes in the allowance that would result from changes in the assumptions and we considered subsequent events to identify potential sources of contrary information to Management’s assumptions.

Excess and Obsolete Inventory – Tobacco

Description of the Matter As discussed in Note 1 of the consolidated financial statements, net tobacco inventory totaled $832 million as of March 31, 2026 and is stated at the lower of its cost or net realizable value.

The Company records adjustments when the cost of tobacco inventory is not expected to be fully recoverable.

Auditing Management’s estimate of the net realizable value of its inventory, specifically its adjustments for excess and obsolete dark air-cured tobacco inventory, involved a higher degree of auditor judgment as the estimate is dependent on expectations about current and expected market trends and economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s internal controls for estimating its excess and obsolete inventory for dark air-cured tobacco.

To test excess and obsolete inventory for dark air-cured tobacco, our audit procedures included, among others, evaluating Management’s expectations about future sales, testing the accuracy and completeness of the underlying data used in management's calculation of the net realizable value of inventory, and recalculating the recorded reserve.

To evaluate Management’s expectations of future sales, market trends, and economic conditions, we reviewed actual historical sales by crop year, performed inquiries of sales personnel, assessed the historical accuracy of Management’s estimates and performed a sensitivity analysis on significant assumptions.

/s/ Ernst & Young LLP

5 unchanged sentences

We have audited Universal Corporation’s internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Universal Corporation (the Company) has not maintained effective internal control over financial reporting as of March 31, 2025, based on the COSO criteria.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness in controls related to inventory, specifically controls related to the physical counts of inventory and the related inventory reconciliations at certain of its subsidiaries.

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, 2025 and 2024, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)2.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and this report does not affect our report dated May 30, 2025 which expressed an unqualified opinion thereon.

In our opinion, Universal Corporation, (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2026, based on the COSO criteria.

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, 2026 and 2025, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2026, and the related notes and financial statement schedule listed in the Index at Item 15(a)2 and our report dated June 1, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data