þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE FISCAL YEAR ENDED
MARCH 31, 2017
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OR
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o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM ______________TO_______________
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Virginia
(State or other jurisdiction of
incorporation or organization)
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54-0414210
(I.R.S. Employer
Identification Number)
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9201 Forest Hill Avenue,
Richmond, Virginia
(Address of principal executive offices)
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23235
(Zip Code)
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Title of each class
Common Stock, no par value
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Name of each exchange on
which registered
New York Stock Exchange
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Item No.
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Page
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A.
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The Company
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•
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Strategic market position
. We work closely with both our customers and suppliers to ensure that we deliver a product that meets our customers' needs while cultivating a strong, sustainable supplier base. We balance purchases of leaf tobacco against indicated customer demand and maintain global procurement and production operations to maximize supply chain efficiencies.
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•
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Strong local management
. Having strong local management in all of our key supply origins allows us to identify and react to constantly shifting market conditions. Empowered and experienced local management, coupled with global coordination, affords us the flexibility and knowledge necessary to adapt quickly in order to continually deliver high quality, competitively-priced products and services.
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•
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Compliant products
. Customers expect a sustainable supply of compliant, traceable, competitively-priced product, and we believe that we lead in delivering these products. Among other initiatives, we invest in training farmers in good agricultural practices that encompass crop quality, environmental stewardship and agricultural labor standards.
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•
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Diversified sources
. We operate in over
30
countries on
five
continents and maintain a presence in all major flue-cured, burley, oriental, and dark air-cured tobacco origin markets. This global presence allows us to meet our customers' diverse leaf requirements while minimizing the effects of adverse crop conditions and other localized supply disruptions.
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Financial strength
. Financial strength is critical and enables us to fund our global operations efficiently and to facilitate investment when suitable opportunities arise. Management of liquidity, interest expense and capital costs provides us with a competitive advantage and affords us flexibility when responding to customer requirements and market changes.
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B.
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Description of Business
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Experience dealing with large numbers of farmers,
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Expertise in delivering a sustainable supply of compliant, traceable, competitively-priced leaf tobacco,
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Capability to meet unique customer requirements for style, volume and quality,
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Longstanding customer relationships,
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Presence in all major leaf tobacco sourcing areas, and
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•
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Financial strength and flexibility.
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C.
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Employees
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D.
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Research and Development
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E.
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Patents, etc.
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F.
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Government Regulation, Environmental Matters, and Other Matters
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•
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trends in the global consumption of cigarettes,
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trends in consumption of cigars and other tobacco products,
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•
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trends in consumption of alternative tobacco products, such as electronic nicotine delivery systems and non-combustible products,
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levels of competition among our customers, and
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regulatory and governmental factors.
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•
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demographic shifts that change the number of farmers or the amount of land available to grow tobacco,
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decisions by farmers to grow crops other than leaf tobacco,
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volume of annual tobacco plantings and yields realized by farmers,
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•
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availability of crop inputs,
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•
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weather and natural disasters, including any adverse weather conditions that may result from climate change, and
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crop infestation and disease.
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restrictions on the use of tobacco products in public places and places of employment,
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legislation authorizing the U.S. Food and Drug Administration (the “FDA”) to regulate the manufacturing and marketing of all tobacco products,
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increases in the federal, state, and local excise taxes on cigarettes and other tobacco products, and
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the policy of the U.S. government to link certain federal grants to the enforcement of state laws restricting the sale of tobacco products.
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Location
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Principal Use
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Building Area
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(Square Feet)
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Flue-Cured and Burley Leaf Tobacco Operations:
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North America:
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United States
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Nash County, North Carolina
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Factory and storages
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1,323,000
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Other Regions:
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Brazil
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Santa Cruz
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Factory and storages
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2,386,000
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Malawi
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Lilongwe
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Factory and storages
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942,000
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Mozambique
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Tete
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Factory and storages
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770,000
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Philippines
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Agoo, La Union
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Factory and storages
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770,000
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Tanzania
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Morogoro
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Factory and storages
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895,000
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Zimbabwe
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Harare
(1)
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Factory and storages
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1,445,000
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Other Tobacco Operations:
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United States
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Lancaster, Pennsylvania
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Factory and storages
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793,000
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(1)
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Owned by an unconsolidated subsidiary.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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First Quarter
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Second Quarter
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Third Quarter
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Fourth Quarter
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Fiscal Year Ended March 31, 2017
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Cash dividends declared
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$
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0.53
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$
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0.53
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$
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0.54
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$
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0.54
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Market price range:
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High
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57.75
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61.69
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64.20
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83.35
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Low
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52.26
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55.29
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52.40
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63.30
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Fiscal Year Ended March 31, 2016
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Cash dividends declared
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$
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0.52
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$
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0.52
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$
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0.53
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$
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0.53
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Market price range:
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High
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57.76
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58.41
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57.72
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57.27
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Low
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46.80
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46.98
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49.70
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51.49
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Common Stock
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Series B 6.75% Convertible Perpetual Preferred Stock
(4)
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Period
(1)
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Total Number of Shares Repurchased
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Average Price Paid Per Share
(2)
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Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs
(3)
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Total Number of Shares Repurchased
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Average Price Paid Per Share
(2)
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Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs
(3)
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Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(3)
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January 1-31, 2017
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—
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$
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—
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—
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—
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$
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—
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—
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$
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100,000,000
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February 1-28, 2017
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—
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—
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—
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—
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—
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—
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100,000,000
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March 1-31, 2017
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—
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—
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—
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—
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—
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—
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100,000,000
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Total
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—
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$
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—
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—
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—
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$
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—
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—
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$
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100,000,000
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(1)
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Repurchases are based on the date the shares were traded. This presentation differs from the consolidated statement of cash flows, where the cost of share repurchases is based on the date the transactions were settled.
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(2)
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Amounts listed for average price paid per share include broker commissions paid in the transactions.
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(3)
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A stock repurchase plan, which was authorized by our Board of Directors, became effective and was publicly announced on November 5, 2015. This stock repurchase plan authorizes the purchase of up to $100 million in common and/or preferred stock in open market or privately negotiated transactions, subject to market conditions and other factors, and will expire on the earlier of November 15, 2017, or when we have exhausted the funds authorized for the program. The conversion of the remaining shares of our Series B 6.75% Convertible Perpetual Preferred Stock did not affect our stock repurchase plan.
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(4)
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On January 9, 2017, the Company announced a mandatory conversion of all
107,418
remaining outstanding shares of the preferred stock after meeting the requirements to initiate the mandatory conversion under the original terms of the preferred shares. The Company chose to satisfy the full conversion obligation for the mandatory conversion in cash, paying approximately
$178.4 million
for those preferred shares on January 31, 2017 to complete the conversion.
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Fiscal Year Ended March 31,
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2017
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2016
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2015
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2014
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2013
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(in thousands, except share and per share data, ratios, and number of shareholders)
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Summary of Operations
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Sales and other operating revenues
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$
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2,071,218
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$
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2,120,373
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$
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2,271,801
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$
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2,542,115
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$
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2,461,699
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Operating income
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$
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178,351
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$
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181,647
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$
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167,874
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$
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246,151
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$
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223,009
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Segment operating income
(1)
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$
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188,484
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$
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186,068
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$
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167,225
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$
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175,175
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$
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232,757
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Net income
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$
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112,506
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$
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118,148
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$
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120,461
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$
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155,155
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$
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140,919
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Net income attributable to Universal Corporation
(2)
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$
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106,304
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$
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109,016
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$
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114,608
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$
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149,009
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$
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132,750
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Earnings available to Universal Corporation common shareholders
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$
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20,890
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$
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94,268
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$
|
99,748
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$
|
134,159
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$
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117,900
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Return on beginning common shareholders’ equity
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1.7
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%
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8.2
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%
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8.6
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%
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12.8
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%
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12.1
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%
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Earnings per share attributable to
Universal Corporation common shareholders:
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Basic
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$
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0.89
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$
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4.16
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$
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4.33
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$
|
5.77
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$
|
5.05
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Diluted
|
$
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0.88
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$
|
3.92
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$
|
4.06
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$
|
5.25
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|
$
|
4.66
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||||||||||
Financial Position at Year End
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||||||||||
Current ratio
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5.83
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|
6.65
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|
5.96
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|
3.66
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|
2.77
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|||||
Total assets
|
$
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2,123,405
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$
|
2,231,177
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$
|
2,186,476
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$
|
2,264,401
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$
|
2,285,987
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Long-term debt
|
$
|
368,733
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$
|
368,380
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|
$
|
368,027
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$
|
239,508
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|
|
$
|
180,060
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Working capital
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$
|
1,293,403
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$
|
1,392,276
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$
|
1,329,770
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$
|
1,200,023
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$
|
1,094,764
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|
Total Universal Corporation shareholders’ equity
|
$
|
1,286,489
|
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$
|
1,414,222
|
|
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$
|
1,378,230
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|
|
$
|
1,378,230
|
|
|
$
|
1,258,571
|
|
|
|
|
|
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||||||||||
General
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||||||||||
Ratio of earnings to fixed charges
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10.25
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|
10.22
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|
8.46
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|
10.73
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|
|
8.87
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|||||
Ratio of earnings to combined fixed charges and preference dividends
|
5.30
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|
4.59
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|
4.05
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|
|
5.49
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|
|
4.69
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|||||
Number of common shareholders
|
1,131
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|
|
1,182
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|
|
1,225
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|
|
1,295
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|
|
1,354
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|||||
Weighted average common shares outstanding:
|
|
|
|
|
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|
|
|
|
||||||||||
Basic
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23,433,860
|
|
|
22,683,290
|
|
|
23,035,920
|
|
|
23,238,978
|
|
|
23,354,793
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Diluted
|
23,770,088
|
|
|
27,825,491
|
|
|
28,221,264
|
|
|
28,392,033
|
|
|
28,478,058
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|||||
Dividends per share of convertible perpetual preferred stock (annual)
|
$
|
50.63
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|
|
$
|
67.50
|
|
|
$
|
67.50
|
|
|
$
|
67.50
|
|
|
$
|
67.50
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|
Dividends per share of common stock (annual)
|
$
|
2.14
|
|
|
$
|
2.10
|
|
|
$
|
2.06
|
|
|
$
|
2.02
|
|
|
$
|
1.98
|
|
Book value per common share
|
$
|
50.90
|
|
|
$
|
52.94
|
|
|
$
|
50.95
|
|
|
$
|
50.19
|
|
|
$
|
44.79
|
|
•
|
Fiscal Year 2017 –
$4.4 million
restructuring and impairment costs, primarily related to our decision to close our tobacco processing facility in Hungary. We are now processing tobaccos sourced from Hungary in our facilities in Italy. The restructuring and impairment costs reduced net income by $2.8 million, or $0.10 per diluted share. In addition, all
218,490
outstanding shares of our Series B 6.75% Convertible Perpetual Preferred Stock were converted during the third and fourth quarters. Of the total shares converted,
107,418
shares were converted for cash, resulting in a reduction of retained earnings of approximately
$74.4 million
for the excess of the conversion cost over the carrying value of the shares. The reduction in retained earnings resulted in a corresponding one-time reduction of earnings available to common shareholders for purposes of determining the amounts reported for basic and diluted earnings per share for the year. The reduction in earnings available to common shareholders decreased diluted earnings per share by
$2.99
.
|
•
|
Fiscal Year 2016 – a
$3.4 million
pretax gain arising from the acquisition of a joint venture partner's 50% ownership interest in a tobacco processing entity in Guatemala. The transaction increased our ownership interest in the entity to 100%, requiring us to consolidate the financial statements of the entity and to remeasure our original 50% ownership interest to fair value, resulting in the gain. In addition, we recorded restructuring and impairment costs of
$2.4 million
related to a decision to significantly scale back our operations in Zambia. The net effect of the gain and the restructuring and impairment costs increased pretax income by $1 million and net income by $0.7 million, or $0.02 per diluted share.
|
•
|
Fiscal Year 2015 – a $12.7 million benefit to pretax earnings from the reversal of a valuation allowance on the remaining unused balance of the excise tax credits realized from the favorable outcome of litigation by our subsidiary in Brazil in fiscal year 2014. In addition, we recorded a consolidated income tax benefit of $8.0 million arising from the ability of our subsidiary, Deltafina S.p.A. ("Deltafina"), to pay a significant portion of the European Commission fine and related interest charges settled during the first quarter following the unsuccessful appeal of the case related to tobacco buying practices in Italy. The effect of those items was partially offset by restructuring costs of $4.9 million, primarily related to downsizing certain functions at our operations in Brazil and the decision to suspend our operations in Argentina. On a combined basis, the net effect of these items increased pretax income by $7.8 million and net income by $13.1 million, or $0.46 per diluted share.
|
•
|
Fiscal Year 2014 – an
$81.6 million
pretax gain resulting from the favorable outcome of litigation by our operating subsidiary in Brazil related to previous years’ excise tax credits. In addition to the gain, we recorded restructuring costs of $6.7 million, primarily related to the closure of a tobacco processing facility in Brazil and the consolidation of these operations into our main processing facility there. The net effect of the gain and the restructuring costs increased pretax income by $74.9 million and net income by $48.7 million, or $1.72 per diluted share.
|
•
|
Fiscal Year 2013 – $4.1 million in restructuring costs, primarily related to workforce reductions in Africa. The effect of those charges was a reduction in net income of $1.8 million, or $0.06 per diluted share.
|
(in thousands of dollars)
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
After 2022
|
||||||||||
Notes payable and long-term debt
(1)
|
|
$
|
479,404
|
|
|
$
|
73,007
|
|
|
$
|
173,012
|
|
|
$
|
233,385
|
|
|
$
|
—
|
|
Operating lease obligations
|
|
50,774
|
|
|
11,512
|
|
|
15,706
|
|
|
9,859
|
|
|
13,697
|
|
|||||
Inventory purchase obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tobacco
|
|
690,111
|
|
|
622,408
|
|
|
67,703
|
|
|
—
|
|
|
—
|
|
|||||
Agricultural materials
|
|
43,103
|
|
|
43,103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other purchase obligations
|
|
5,314
|
|
|
5,314
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
1,268,706
|
|
|
$
|
755,344
|
|
|
$
|
256,421
|
|
|
$
|
243,244
|
|
|
$
|
13,697
|
|
(1)
|
Includes interest payments. Interest payments on
$429.1 million
of variable rate debt were estimated based on rates as of
March 31, 2017
. The Company has entered into interest rate swaps that effectively convert the interest payments on the
$370.0 million
outstanding balance of its two bank term loans from variable to fixed. The fixed rate has been used to determine the contractual interest payments for all periods.
|
•
|
Discount rate – The discount rate is based on investment yields on a hypothetical portfolio of actual long-term corporate bonds rated AA that align with the cash flows for our benefit obligations.
|
•
|
Salary scale – The salary scale assumption is based on our long-term actual experience for salary increases, the near-term outlook, and expected inflation.
|
•
|
Expected long-term return on plan assets – The expected long-term return on plan assets reflects asset allocations and investment strategy adopted by the Pension Investment Committee of the Board of Directors.
|
•
|
Retirement and mortality rates – Retirement rates are based on actual plan experience along with our near-term outlook. Early retirement assumptions are based on our actual experience. Mortality rates are based on standard industry group annuity mortality tables which are updated to reflect projected improvements in life expectancy.
|
•
|
Healthcare cost trend rates – For postretirement medical plan obligations and costs, we make assumptions on future inflationary increases in medical costs. These assumptions are based on our actual experience, along with third-party forecasts of long-term medical cost trends.
|
(in thousands of dollars)
|
|
Effect on
2017 Projected
Benefit Obligation
Increase
(Decrease)
|
|
Effect on
2018 Annual Expense
Increase
(Decrease)
|
||||
Changes in Assumptions for Pension Benefits
|
|
|
|
|
||||
Discount Rate:
|
|
|
|
|
||||
1% increase
|
|
$
|
(26,653
|
)
|
|
$
|
(2,597
|
)
|
1% decrease
|
|
32,337
|
|
|
2,872
|
|
||
Expected Long-Term Return on Plan Assets:
|
|
|
|
|
||||
1% increase
|
|
—
|
|
|
(2,264
|
)
|
||
1% decrease
|
|
—
|
|
|
2,264
|
|
||
|
|
|
|
|
||||
Changes in Assumptions for Other Postretirement Benefits
|
|
|
|
|
||||
Discount Rate:
|
|
|
|
|
||||
1% increase
|
|
(3,055
|
)
|
|
(347
|
)
|
||
1% decrease
|
|
3,603
|
|
|
165
|
|
||
Healthcare Cost Trend Rate:
|
|
|
|
|
||||
1% increase
|
|
769
|
|
|
38
|
|
||
1% decrease
|
|
(688
|
)
|
|
(37
|
)
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in thousands of dollars, except share and per share data)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales and other operating revenues
|
$
|
2,071,218
|
|
|
$
|
2,120,373
|
|
|
$
|
2,271,801
|
|
|
|
|
|
|
|
||||||
Costs and expenses
|
|
|
|
|
|
||||||
Cost of goods sold
|
1,676,539
|
|
|
1,713,042
|
|
|
1,861,527
|
|
|||
Selling, general and administrative expenses
|
211,969
|
|
|
226,685
|
|
|
250,186
|
|
|||
Other income
|
—
|
|
|
(3,390
|
)
|
|
(12,676
|
)
|
|||
Restructuring and impairment costs
|
4,359
|
|
|
2,389
|
|
|
4,890
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
178,351
|
|
|
181,647
|
|
|
167,874
|
|
|||
Equity in pretax earnings of unconsolidated affiliates
|
5,774
|
|
|
5,422
|
|
|
7,137
|
|
|||
Interest income
|
1,397
|
|
|
1,178
|
|
|
576
|
|
|||
Interest expense
|
16,284
|
|
|
15,669
|
|
|
17,120
|
|
|||
|
|
|
|
|
|
||||||
Income before income taxes
|
169,238
|
|
|
172,578
|
|
|
158,467
|
|
|||
Income taxes
|
56,732
|
|
|
54,430
|
|
|
38,006
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
112,506
|
|
|
118,148
|
|
|
120,461
|
|
|||
Less: net income attributable to noncontrolling interests in subsidiaries
|
(6,202
|
)
|
|
(9,132
|
)
|
|
(5,853
|
)
|
|||
Net income attributable to Universal Corporation
|
106,304
|
|
|
109,016
|
|
|
114,608
|
|
|||
|
|
|
|
|
|
||||||
Dividends on Universal Corporation convertible perpetual preferred stock
|
(11,061
|
)
|
|
(14,748
|
)
|
|
(14,824
|
)
|
|||
Cost in excess of carrying value on conversion or repurchase of convertible perpetual preferred stock
|
(74,353
|
)
|
|
—
|
|
|
(36
|
)
|
|||
|
|
|
|
|
|
||||||
Earnings available to Universal Corporation common shareholders
|
$
|
20,890
|
|
|
$
|
94,268
|
|
|
$
|
99,748
|
|
|
|
|
|
|
|
||||||
Earnings per share attributable to Universal Corporation common shareholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.89
|
|
|
$
|
4.16
|
|
|
$
|
4.33
|
|
Diluted
|
$
|
0.88
|
|
|
$
|
3.92
|
|
|
$
|
4.06
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
23,433,860
|
|
|
22,683,290
|
|
|
23,035,920
|
|
|||
Diluted
|
23,770,088
|
|
|
27,825,491
|
|
|
28,221,264
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in thousands of dollars)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
112,506
|
|
|
$
|
118,148
|
|
|
$
|
120,461
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation, net of income taxes
|
(6,899
|
)
|
|
3,934
|
|
|
(22,625
|
)
|
|||
Foreign currency hedge, net of income taxes
|
(933
|
)
|
|
2,509
|
|
|
(2,603
|
)
|
|||
Interest rate hedge, net of income taxes
|
8,395
|
|
|
(5,015
|
)
|
|
(1,374
|
)
|
|||
Pension and other postretirement benefit plans, net of income taxes
|
1,475
|
|
|
1,004
|
|
|
(14,023
|
)
|
|||
Total other comprehensive income (loss), net of income taxes
|
2,038
|
|
|
2,432
|
|
|
(40,625
|
)
|
|||
Total comprehensive income
|
114,544
|
|
|
120,580
|
|
|
79,836
|
|
|||
Less: comprehensive income attributable to noncontrolling interests
|
(5,449
|
)
|
|
(8,920
|
)
|
|
(5,890
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income attributable to Universal Corporation
|
$
|
109,095
|
|
|
$
|
111,660
|
|
|
$
|
73,946
|
|
|
March 31,
|
||||||
(in thousands of dollars)
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
283,993
|
|
|
$
|
319,447
|
|
Accounts receivable, net
|
439,288
|
|
|
428,659
|
|
||
Advances to suppliers, net
|
103,750
|
|
|
101,890
|
|
||
Accounts receivable—unconsolidated affiliates
|
2,373
|
|
|
2,316
|
|
||
Inventories—at lower of cost or market:
|
|
|
|
||||
Tobacco
|
565,943
|
|
|
637,132
|
|
||
Other
|
68,087
|
|
|
60,888
|
|
||
Prepaid income taxes
|
16,713
|
|
|
17,814
|
|
||
Other current assets
|
81,252
|
|
|
70,400
|
|
||
Total current assets
|
1,561,399
|
|
|
1,638,546
|
|
||
|
|
|
|
||||
Property, plant and equipment
|
|
|
|
||||
Land
|
22,852
|
|
|
22,987
|
|
||
Buildings
|
266,802
|
|
|
264,838
|
|
||
Machinery and equipment
|
597,213
|
|
|
591,327
|
|
||
|
886,867
|
|
|
879,152
|
|
||
Less accumulated depreciation
|
(569,527
|
)
|
|
(553,265
|
)
|
||
|
317,340
|
|
|
325,887
|
|
||
Other assets
|
|
|
|
||||
Goodwill and other intangibles
|
98,888
|
|
|
99,071
|
|
||
Investments in unconsolidated affiliates
|
78,457
|
|
|
82,441
|
|
||
Deferred income taxes
|
25,422
|
|
|
23,853
|
|
||
Other noncurrent assets
|
41,899
|
|
|
61,379
|
|
||
|
244,666
|
|
|
266,744
|
|
||
|
|
|
|
||||
Total assets
|
$
|
2,123,405
|
|
|
$
|
2,231,177
|
|
|
March 31,
|
||||||
(in thousands of dollars)
|
2017
|
|
2016
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable and overdrafts
|
$
|
59,133
|
|
|
$
|
66,179
|
|
Accounts payable and accrued expenses
|
153,515
|
|
|
120,527
|
|
||
Accounts payable—unconsolidated affiliates
|
7,231
|
|
|
8,343
|
|
||
Customer advances and deposits
|
11,007
|
|
|
16,438
|
|
||
Accrued compensation
|
32,007
|
|
|
27,593
|
|
||
Income taxes payable
|
5,103
|
|
|
7,190
|
|
||
Current portion of long-term debt
|
—
|
|
|
—
|
|
||
Total current liabilities
|
267,996
|
|
|
246,270
|
|
||
|
|
|
|
||||
Long-term debt
|
368,733
|
|
|
368,380
|
|
||
Pensions and other postretirement benefits
|
80,689
|
|
|
92,177
|
|
||
Other long-term liabilities
|
31,424
|
|
|
41,794
|
|
||
Deferred income taxes
|
47,985
|
|
|
29,494
|
|
||
Total liabilities
|
796,827
|
|
|
778,115
|
|
||
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Universal Corporation:
|
|
|
|
||||
Preferred stock:
|
|
|
|
||||
Series A Junior Participating Preferred Stock, no par value, 500,000 shares authorized,
none issued or outstanding
|
—
|
|
|
—
|
|
||
Series B 6.75% Convertible Perpetual Preferred Stock, no par value, 220,000 shares authorized,
no shares outstanding (218,490 shares issued and outstanding at March 31, 2016)
|
—
|
|
|
211,562
|
|
||
Common stock, no par value, 100,000,000 shares authorized, 25,274,506 shares issued
and outstanding (22,717,735 at March 31, 2016)
|
321,207
|
|
|
208,946
|
|
||
Retained earnings
|
1,034,841
|
|
|
1,066,064
|
|
||
Accumulated other comprehensive loss
|
(69,559
|
)
|
|
(72,350
|
)
|
||
Total Universal Corporation shareholders' equity
|
1,286,489
|
|
|
1,414,222
|
|
||
Noncontrolling interests in subsidiaries
|
40,089
|
|
|
38,840
|
|
||
Total shareholders' equity
|
1,326,578
|
|
|
1,453,062
|
|
||
|
|
|
|
||||
Total liabilities and shareholders' equity
|
$
|
2,123,405
|
|
|
$
|
2,231,177
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in thousands of dollars)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash Flows From Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
112,506
|
|
|
$
|
118,148
|
|
|
$
|
120,461
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
35,911
|
|
|
36,754
|
|
|
35,394
|
|
|||
Provision for losses (recoveries) on advances and guaranteed loans to suppliers
|
(857
|
)
|
|
815
|
|
|
3,734
|
|
|||
Inventory write-downs
|
10,866
|
|
|
11,899
|
|
|
18,612
|
|
|||
Stock-based compensation expense
|
6,475
|
|
|
5,206
|
|
|
6,230
|
|
|||
Foreign currency remeasurement loss (gain), net
|
9,269
|
|
|
22,517
|
|
|
28,836
|
|
|||
Deferred income taxes
|
16,626
|
|
|
15,046
|
|
|
(13,662
|
)
|
|||
Equity in net income of unconsolidated affiliates, net of dividends
|
396
|
|
|
156
|
|
|
(1,075
|
)
|
|||
Gain on favorable outcome of excise tax case in Brazil
|
—
|
|
|
—
|
|
|
(12,676
|
)
|
|||
Fair value gain upon acquisition of partner's interest in joint venture
|
—
|
|
|
(3,390
|
)
|
|
—
|
|
|||
Restructuring and impairment costs
|
4,359
|
|
|
2,389
|
|
|
4,890
|
|
|||
Other, net
|
(4,463
|
)
|
|
13,204
|
|
|
(7,342
|
)
|
|||
Changes in operating assets and liabilities, net:
|
|
|
|
|
|
||||||
Accounts and notes receivable
|
(14,346
|
)
|
|
(2,806
|
)
|
|
49,414
|
|
|||
Inventories and other assets
|
52,139
|
|
|
(7,370
|
)
|
|
37,751
|
|
|||
Income taxes
|
(1,719
|
)
|
|
1,437
|
|
|
5,680
|
|
|||
Accounts payable and other accrued liabilities
|
28,643
|
|
|
(13,678
|
)
|
|
(63,257
|
)
|
|||
Customer advances and deposits
|
(5,490
|
)
|
|
(13,796
|
)
|
|
14,397
|
|
|||
Net cash provided by operating activities
|
250,315
|
|
|
186,531
|
|
|
227,387
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows From Investing Activities:
|
|
|
|
|
|
||||||
Purchase of property, plant and equipment
|
(35,630
|
)
|
|
(47,153
|
)
|
|
(58,385
|
)
|
|||
Purchase of partner's interest in joint venture, net of cash held by the business
|
—
|
|
|
(5,964
|
)
|
|
—
|
|
|||
Proceeds from sale of property, plant and equipment
|
2,174
|
|
|
2,982
|
|
|
4,522
|
|
|||
Other, net
|
(398
|
)
|
|
(796
|
)
|
|
(141
|
)
|
|||
Net cash used by investing activities
|
(33,854
|
)
|
|
(50,931
|
)
|
|
(54,004
|
)
|
|||
|
|
|
|
|
|
||||||
Cash Flows From Financing Activities:
|
|
|
|
|
|
||||||
Issuance (repayment) of short-term debt, net
|
(5,349
|
)
|
|
4,880
|
|
|
2,618
|
|
|||
Issuance of long-term debt
|
—
|
|
|
—
|
|
|
370,000
|
|
|||
Repayment of long-term debt
|
—
|
|
|
—
|
|
|
(356,250
|
)
|
|||
Dividends paid to noncontrolling interests
|
(4,200
|
)
|
|
(4,449
|
)
|
|
(4,183
|
)
|
|||
Issuance of common stock
|
—
|
|
|
—
|
|
|
187
|
|
|||
Conversion/repurchase of convertible perpetual preferred stock
|
(178,365
|
)
|
|
—
|
|
|
(1,497
|
)
|
|||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(31,227
|
)
|
|||
Dividends paid on convertible perpetual preferred stock
|
(11,061
|
)
|
|
(14,748
|
)
|
|
(14,824
|
)
|
|||
Dividends paid on common stock
|
(49,828
|
)
|
|
(47,389
|
)
|
|
(47,337
|
)
|
|||
Debt issuance costs and other
|
(2,441
|
)
|
|
(2,940
|
)
|
|
(4,511
|
)
|
|||
Net cash used by financing activities
|
(251,244
|
)
|
|
(64,646
|
)
|
|
(87,024
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
(671
|
)
|
|
(290
|
)
|
|
(1,108
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(35,454
|
)
|
|
70,664
|
|
|
85,251
|
|
|||
Cash and cash equivalents at beginning of year
|
319,447
|
|
|
248,783
|
|
|
163,532
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
283,993
|
|
|
$
|
319,447
|
|
|
$
|
248,783
|
|
|
|
|
|
|
|
||||||
Supplemental information—cash paid for:
|
|
|
|
|
|
||||||
Interest
|
$
|
16,284
|
|
|
$
|
15,704
|
|
|
$
|
19,184
|
|
Income taxes, net of refunds
|
$
|
37,294
|
|
|
$
|
38,732
|
|
|
$
|
46,044
|
|
|
|
Universal Corporation Shareholders
|
|
|
|
|
||||||||||||||||||
(in thousands of dollars)
|
|
Series B
6.75%
Convertible
Perpetual
Preferred
Stock
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
|
Non-
controlling
Interests
|
|
Total
Shareholders'
Equity
|
||||||||||||
Fiscal Year Ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of year
|
|
$
|
211,562
|
|
|
$
|
208,946
|
|
|
$
|
1,066,064
|
|
|
$
|
(72,350
|
)
|
|
$
|
38,840
|
|
|
$
|
1,453,062
|
|
Changes in preferred and common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Conversion of Series B 6.75% convertible perpetual preferred stock for common stock
|
|
(107,550
|
)
|
|
107,550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Conversion of Series B 6.75% convertible perpetual preferred stock for cash
|
|
(104,012
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104,012
|
)
|
||||||
Accrual of stock-based compensation
|
|
—
|
|
|
6,475
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,475
|
|
||||||
Withholding of shares from stock-based compensation for grantee income taxes
|
|
—
|
|
|
(2,440
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,440
|
)
|
||||||
Dividend equivalents on restricted stock units (RSUs)
|
|
—
|
|
|
676
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
676
|
|
||||||
Changes in retained earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
106,304
|
|
|
—
|
|
|
6,202
|
|
|
112,506
|
|
||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series B 6.75% convertible perpetual preferred stock ($50.63 per share)
|
|
—
|
|
|
—
|
|
|
(11,061
|
)
|
|
—
|
|
|
—
|
|
|
(11,061
|
)
|
||||||
Common stock ($2.14 per share)
|
|
—
|
|
|
—
|
|
|
(51,437
|
)
|
|
—
|
|
|
—
|
|
|
(51,437
|
)
|
||||||
Conversion of Series B 6.75% convertible perpetual preferred stock for cash
|
|
—
|
|
|
—
|
|
|
(74,353
|
)
|
|
—
|
|
|
—
|
|
|
(74,353
|
)
|
||||||
Dividend equivalents on restricted stock units (RSUs)
|
|
—
|
|
|
—
|
|
|
(676
|
)
|
|
—
|
|
|
—
|
|
|
(676
|
)
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,146
|
)
|
|
(753
|
)
|
|
(6,899
|
)
|
||||||
Foreign currency hedge, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(933
|
)
|
|
—
|
|
|
(933
|
)
|
||||||
Interest rate hedge, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,395
|
|
|
—
|
|
|
8,395
|
|
||||||
Pension and other postretirement benefit plans, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,475
|
|
|
—
|
|
|
1,475
|
|
||||||
Other changes in noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dividends paid to noncontrolling shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,200
|
)
|
|
(4,200
|
)
|
||||||
Balance at end of year
|
|
$
|
—
|
|
|
$
|
321,207
|
|
|
$
|
1,034,841
|
|
|
$
|
(69,559
|
)
|
|
$
|
40,089
|
|
|
$
|
1,326,578
|
|
|
|
Universal Corporation Shareholders
|
|
|
|
|
||||||||||||||||||
(in thousands of dollars)
|
|
Series B
6.75%
Convertible
Perpetual
Preferred
Stock
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
|
Non-
controlling
Interests
|
|
Total
Shareholders'
Equity
|
||||||||||||
Fiscal Year Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of year
|
|
$
|
211,562
|
|
|
$
|
206,002
|
|
|
$
|
1,020,155
|
|
|
$
|
(74,994
|
)
|
|
$
|
34,369
|
|
|
$
|
1,397,094
|
|
Changes in preferred and common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrual of stock-based compensation
|
|
—
|
|
|
5,206
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,206
|
|
||||||
Withholding of shares from stock-based compensation for grantee income taxes
|
|
—
|
|
|
(2,940
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,940
|
)
|
||||||
Dividend equivalents on restricted stock units (RSUs)
|
|
—
|
|
|
678
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
678
|
|
||||||
Changes in retained earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
109,016
|
|
|
—
|
|
|
9,132
|
|
|
118,148
|
|
||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series B 6.75% convertible perpetual preferred stock ($67.50 per share)
|
|
—
|
|
|
—
|
|
|
(14,748
|
)
|
|
—
|
|
|
—
|
|
|
(14,748
|
)
|
||||||
Common stock ($2.10 per share)
|
|
—
|
|
|
—
|
|
|
(47,681
|
)
|
|
—
|
|
|
—
|
|
|
(47,681
|
)
|
||||||
Dividend equivalents on restricted stock units (RSUs)
|
|
—
|
|
|
—
|
|
|
(678
|
)
|
|
—
|
|
|
—
|
|
|
(678
|
)
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,146
|
|
|
(212
|
)
|
|
3,934
|
|
||||||
Foreign currency hedge, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,509
|
|
|
—
|
|
|
2,509
|
|
||||||
Interest rate hedge, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,015
|
)
|
|
—
|
|
|
(5,015
|
)
|
||||||
Pension and other postretirement benefit plans, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,004
|
|
|
—
|
|
|
1,004
|
|
||||||
Other changes in noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dividends paid to noncontrolling shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,449
|
)
|
|
(4,449
|
)
|
||||||
Balance at end of year
|
|
$
|
211,562
|
|
|
$
|
208,946
|
|
|
$
|
1,066,064
|
|
|
$
|
(72,350
|
)
|
|
$
|
38,840
|
|
|
$
|
1,453,062
|
|
|
|
Universal Corporation Shareholders
|
|
|
|
|
||||||||||||||||||
(in thousands of dollars)
|
|
Series B
6.75%
Convertible
Perpetual
Preferred
Stock
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
|
Non-
controlling
Interests
|
|
Total
Shareholders'
Equity
|
||||||||||||
Fiscal Year Ended March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of year
|
|
$
|
213,023
|
|
|
$
|
206,446
|
|
|
$
|
993,093
|
|
|
$
|
(34,332
|
)
|
|
$
|
32,662
|
|
|
$
|
1,410,892
|
|
Changes in preferred and common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Repurchase of Series B 6.75% convertible perpetual preferred stock
|
|
(1,461
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,461
|
)
|
||||||
Issuance of common stock
|
|
—
|
|
|
187
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187
|
|
||||||
Repurchase of common stock
|
|
—
|
|
|
(6,439
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,439
|
)
|
||||||
Accrual of stock-based compensation
|
|
—
|
|
|
6,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,230
|
|
||||||
Withholding of shares from stock-based compensation for grantee income taxes
|
|
—
|
|
|
(1,076
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,076
|
)
|
||||||
Dividend equivalents on restricted stock units (RSUs)
|
|
—
|
|
|
654
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
654
|
|
||||||
Changes in retained earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
114,608
|
|
|
—
|
|
|
5,853
|
|
|
120,461
|
|
||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series B 6.75% convertible perpetual preferred stock ($67.50 per share)
|
|
—
|
|
|
—
|
|
|
(14,824
|
)
|
|
—
|
|
|
—
|
|
|
(14,824
|
)
|
||||||
Common stock ($2.06 per share)
|
|
—
|
|
|
—
|
|
|
(47,244
|
)
|
|
—
|
|
|
—
|
|
|
(47,244
|
)
|
||||||
Repurchase of Series B 6.75% convertible perpetual preferred stock
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
||||||
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
(24,788
|
)
|
|
—
|
|
|
—
|
|
|
(24,788
|
)
|
||||||
Dividend equivalents on restricted stock units (RSUs)
|
|
—
|
|
|
—
|
|
|
(654
|
)
|
|
—
|
|
|
—
|
|
|
(654
|
)
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,662
|
)
|
|
37
|
|
|
(22,625
|
)
|
||||||
Foreign currency hedge, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,603
|
)
|
|
—
|
|
|
(2,603
|
)
|
||||||
Interest rate hedge, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,374
|
)
|
|
—
|
|
|
(1,374
|
)
|
||||||
Pension and other postretirement benefit plans, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,023
|
)
|
|
—
|
|
|
(14,023
|
)
|
||||||
Other changes in noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dividends paid to noncontrolling shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,183
|
)
|
|
(4,183
|
)
|
||||||
Balance at end of year
|
|
$
|
211,562
|
|
|
$
|
206,002
|
|
|
$
|
1,020,155
|
|
|
$
|
(74,994
|
)
|
|
$
|
34,369
|
|
|
$
|
1,397,094
|
|
|
Fiscal Year Ended March 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Preferred Shares Outstanding:
|
|
|
|
|
|
|||
Series B 6.75% Convertible Perpetual Preferred Stock:
|
|
|
|
|
|
|||
Balance at beginning of year
|
218,490
|
|
|
218,490
|
|
|
219,999
|
|
Conversion of convertible perpetual preferred stock for common stock
|
(111,072
|
)
|
|
—
|
|
|
—
|
|
Conversion of convertible perpetual preferred stock for cash
|
(107,418
|
)
|
|
—
|
|
|
—
|
|
Repurchase of convertible perpetual preferred stock
|
—
|
|
|
—
|
|
|
(1,509
|
)
|
Balance at end of year
|
—
|
|
|
218,490
|
|
|
218,490
|
|
|
|
|
|
|
|
|||
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
Balance at beginning of year
|
22,717,735
|
|
|
22,593,266
|
|
|
23,216,312
|
|
Issuance of common stock
|
69,653
|
|
|
124,469
|
|
|
96,947
|
|
Conversion of convertible perpetual preferred stock for common stock
|
2,487,118
|
|
|
—
|
|
|
—
|
|
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(719,993
|
)
|
Balance at end of year
|
25,274,506
|
|
|
22,717,735
|
|
|
22,593,266
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Equity in pretax earnings reported in the consolidated statements of income
|
$
|
5,774
|
|
|
$
|
5,422
|
|
|
$
|
7,137
|
|
Less: Equity in income taxes
|
(1,092
|
)
|
|
(2,156
|
)
|
|
(834
|
)
|
|||
Equity in net income
|
4,682
|
|
|
3,266
|
|
|
6,303
|
|
|||
Less: Dividends received on investments
(1)
|
(5,078
|
)
|
|
(3,422
|
)
|
|
(5,228
|
)
|
|||
Equity in net income, net of dividends, reported in the consolidated statements of cash flows
|
$
|
(396
|
)
|
|
$
|
(156
|
)
|
|
$
|
1,075
|
|
(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.
|
|
|
Fiscal Years Ended March 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Restructuring Costs:
|
|
|
|
|
|
|
||||||
Employee termination benefits
|
|
$
|
2,083
|
|
|
$
|
1,629
|
|
|
$
|
4,354
|
|
Other restructuring costs
|
|
—
|
|
|
96
|
|
|
536
|
|
|||
|
|
2,083
|
|
|
1,725
|
|
|
4,890
|
|
|||
Impairment Costs:
|
|
|
|
|
|
|
||||||
Property and equipment and farmer loans
|
|
2,276
|
|
|
664
|
|
|
—
|
|
|||
Total restructuring and impairment costs
|
|
$
|
4,359
|
|
|
$
|
2,389
|
|
|
$
|
4,890
|
|
|
|
Employee
Termination
Benefits
|
|
Other Costs
|
|
Total
|
||||||
Balance at April 1, 2014
|
|
$
|
2,026
|
|
|
$
|
160
|
|
|
$
|
2,186
|
|
Fiscal Year 2015 Activity:
|
|
|
|
|
|
|
||||||
Costs charged to expense
|
|
4,354
|
|
|
536
|
|
|
4,890
|
|
|||
Payments
|
|
(5,684
|
)
|
|
(498
|
)
|
|
(6,182
|
)
|
|||
Balance at March 31, 2015
|
|
696
|
|
|
198
|
|
|
894
|
|
|||
Fiscal Year 2016 Activity:
|
|
|
|
|
|
|
||||||
Costs charged to expense
|
|
1,629
|
|
|
96
|
|
|
1,725
|
|
|||
Payments
|
|
(2,246
|
)
|
|
(92
|
)
|
|
(2,338
|
)
|
|||
Balance at March 31, 2016
|
|
79
|
|
|
202
|
|
|
281
|
|
|||
Fiscal Year 2017 Activity:
|
|
|
|
|
|
|
||||||
Costs charged to expense
|
|
2,083
|
|
|
—
|
|
|
2,083
|
|
|||
Payments
|
|
(1,861
|
)
|
|
(159
|
)
|
|
(2,020
|
)
|
|||
Balance at March 31, 2017
|
|
$
|
301
|
|
|
$
|
43
|
|
|
$
|
344
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in thousands, except share and per share data)
|
2017
|
|
2016
|
|
2015
|
||||||
Basic Earnings Per Share
|
|
|
|
|
|
||||||
Numerator for basic earnings per share
|
|
|
|
|
|
||||||
Net income attributable to Universal Corporation
|
$
|
106,304
|
|
|
$
|
109,016
|
|
|
$
|
114,608
|
|
Less: Dividends on convertible perpetual preferred stock
|
(11,061
|
)
|
|
(14,748
|
)
|
|
(14,824
|
)
|
|||
Less: Cost in excess of carrying value on conversion or repurchase of convertible perpetual preferred stock
|
(74,353
|
)
|
|
—
|
|
|
(36
|
)
|
|||
Earnings available to Universal Corporation common shareholders for
calculation of basic earnings per share
|
20,890
|
|
|
94,268
|
|
|
99,748
|
|
|||
|
|
|
|
|
|
||||||
Denominator for basic earnings per share
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
23,433,860
|
|
|
22,683,290
|
|
|
23,035,920
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
0.89
|
|
|
$
|
4.16
|
|
|
$
|
4.33
|
|
|
|
|
|
|
|
||||||
Diluted Earnings Per Share
|
|
|
|
|
|
||||||
Numerator for diluted earnings per share
|
|
|
|
|
|
||||||
Earnings available to Universal Corporation common shareholders
|
$
|
20,890
|
|
|
$
|
94,268
|
|
|
$
|
99,748
|
|
Add: Dividends on convertible perpetual preferred stock (if conversion assumed)
|
—
|
|
|
14,748
|
|
|
14,824
|
|
|||
Add: Cost in excess of carrying value on conversion or repurchase of convertible perpetual preferred stock (if dilutive)
|
—
|
|
|
—
|
|
|
36
|
|
|||
Earnings available to Universal Corporation common shareholders for
calculation of diluted earnings per share
|
20,890
|
|
|
109,016
|
|
|
114,608
|
|
|||
|
|
|
|
|
|
||||||
Denominator for diluted earnings per share
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
23,433,860
|
|
|
22,683,290
|
|
|
23,035,920
|
|
|||
Effect of dilutive securities (if conversion or exercise assumed)
|
|
|
|
|
|
||||||
Convertible perpetual preferred stock
|
—
|
|
|
4,853,268
|
|
|
4,843,309
|
|
|||
Employee share-based awards
|
336,228
|
|
|
288,933
|
|
|
342,035
|
|
|||
Denominator for diluted earnings per share
|
23,770,088
|
|
|
27,825,491
|
|
|
28,221,264
|
|
|||
|
|
|
|
|
|
||||||
Diluted earnings per share
|
$
|
0.88
|
|
|
$
|
3.92
|
|
|
$
|
4.06
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Potentially dilutive securities
|
—
|
|
|
133,600
|
|
|
156,200
|
|
|||
Weighted-average exercise price
|
$
|
—
|
|
|
$
|
62.66
|
|
|
$
|
61.83
|
|
|
Fiscal Year Ended March 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Statutory tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
Dividends received from deconsolidated operations
|
(2.3
|
)
|
|
(1.5
|
)
|
|
(1.3
|
)
|
Effect of exchange rate changes on deferred income taxes
|
0.4
|
|
|
(1.6
|
)
|
|
(4.9
|
)
|
Tax benefit arising from payment of a portion of a fine by a subsidiary
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
Other, including changes in liabilities recorded for uncertain tax positions
|
0.1
|
|
|
(0.7
|
)
|
|
(0.1
|
)
|
Effective income tax rate
|
33.5
|
%
|
|
31.5
|
%
|
|
24.0
|
%
|
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Liabilities
|
|
|
|
||||
Foreign withholding taxes
|
$
|
44,702
|
|
|
$
|
39,770
|
|
Undistributed earnings
|
24,629
|
|
|
19,553
|
|
||
Goodwill
|
30,851
|
|
|
30,851
|
|
||
All other
|
11,015
|
|
|
10,424
|
|
||
Total deferred tax liabilities
|
$
|
111,197
|
|
|
$
|
100,598
|
|
|
|
|
|
||||
Assets
|
|
|
|
||||
Employee benefit plans
|
$
|
38,804
|
|
|
$
|
43,362
|
|
Reserves and accruals
|
11,756
|
|
|
12,911
|
|
||
Deferred income
|
4,672
|
|
|
3,938
|
|
||
Currency translation losses of foreign subsidiaries
|
13,244
|
|
|
9,939
|
|
||
Local currency exchange losses of foreign subsidiaries
|
3,669
|
|
|
3,597
|
|
||
Foreign tax credit carryforward
|
2,799
|
|
|
4,664
|
|
||
All other
|
14,327
|
|
|
16,546
|
|
||
Total deferred tax assets
|
89,271
|
|
|
94,957
|
|
||
Valuation allowance
|
(636
|
)
|
|
—
|
|
||
Net deferred tax assets
|
$
|
88,635
|
|
|
$
|
94,957
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Continuing operations
|
$
|
56,732
|
|
|
$
|
54,430
|
|
|
$
|
38,006
|
|
Other comprehensive income
|
1,503
|
|
|
1,423
|
|
|
(21,900
|
)
|
|||
Direct adjustments to shareholders' equity
|
—
|
|
|
(805
|
)
|
|
(932
|
)
|
|||
Total
|
$
|
58,235
|
|
|
$
|
55,048
|
|
|
$
|
15,174
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Liability for uncertain tax positions, beginning of year
|
$
|
2,407
|
|
|
$
|
2,894
|
|
|
$
|
3,809
|
|
Additions:
|
|
|
|
|
|
||||||
Related to tax positions for the current year
|
94
|
|
|
98
|
|
|
272
|
|
|||
Related to tax positions for prior years
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reductions:
|
|
|
|
|
|
||||||
Due to lapses of statutes of limitations
|
(112
|
)
|
|
(215
|
)
|
|
(478
|
)
|
|||
Related to tax positions for prior years
|
(3
|
)
|
|
—
|
|
|
(143
|
)
|
|||
Effect of currency rate movement
|
40
|
|
|
(370
|
)
|
|
(566
|
)
|
|||
Liability for uncertain tax positions, end of year
|
$
|
2,426
|
|
|
$
|
2,407
|
|
|
$
|
2,894
|
|
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Senior bank term loans
|
$
|
370,000
|
|
|
$
|
370,000
|
|
Total outstanding
|
370,000
|
|
|
370,000
|
|
||
Less: current portion
|
—
|
|
|
—
|
|
||
Less: unamortized debt issuance costs
|
(1,267
|
)
|
|
(1,620
|
)
|
||
Long-term debt
|
$
|
368,733
|
|
|
$
|
368,380
|
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Tobacco purchases
|
|
$
|
70.7
|
|
|
$
|
43.1
|
|
|
$
|
105.6
|
|
Processing costs
|
|
24.0
|
|
|
13.2
|
|
|
22.9
|
|
|||
Total
|
|
$
|
94.7
|
|
|
$
|
56.3
|
|
|
$
|
128.5
|
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash Flow Hedges - Interest Rate Swap Agreements
|
|
|
|
|
|
|
||||||
Derivative
|
|
|
|
|
|
|
||||||
Effective Portion of Hedge
|
|
|
|
|
|
|
||||||
Gain (loss) recorded in accumulated other comprehensive loss
|
|
$
|
8,999
|
|
|
$
|
(12,824
|
)
|
|
$
|
(4,044
|
)
|
Gain (loss) reclassified from accumulated other comprehensive loss into earnings
|
|
$
|
(3,916
|
)
|
|
$
|
(5,108
|
)
|
|
$
|
(1,929
|
)
|
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings
|
|
Interest expense
|
||||||||||
Ineffective Portion of Hedge
|
|
|
|
|
|
|
||||||
Gain (loss) recognized in earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Location of gain (loss) recognized in earnings
|
|
Selling, general and administrative expenses
|
||||||||||
Hedged Item
|
|
|
|
|
|
|
||||||
Description of hedged item
|
|
Floating rate interest payments on term loans
|
||||||||||
|
|
|
|
|
|
|
||||||
Cash Flow Hedges - Forward Foreign Currency Exchange Contracts
|
|
|
|
|
|
|
||||||
Derivative
|
|
|
|
|
|
|
||||||
Effective Portion of Hedge
|
|
|
|
|
|
|
||||||
Gain (loss) recorded in accumulated other comprehensive loss
|
|
$
|
454
|
|
|
$
|
1,774
|
|
|
$
|
1,410
|
|
Gain (loss) reclassified from accumulated other comprehensive
loss into earnings
|
|
$
|
945
|
|
|
$
|
993
|
|
|
$
|
3,099
|
|
Location of gain (loss) reclassified from accumulated other
comprehensive loss into earnings
|
|
Cost of goods sold
|
||||||||||
Ineffective Portion and Early De-designation of Hedges
|
|
|
|
|
|
|
||||||
Gain (loss) recognized in earnings
|
|
$
|
246
|
|
|
$
|
685
|
|
|
$
|
257
|
|
Location of gain (loss) recognized in earnings
|
|
Selling, general and administrative expenses
|
||||||||||
Hedged Item
|
|
|
|
|
|
|
||||||
Description of hedged item
|
|
Forecast purchases of tobacco in Brazil
|
||||||||||
|
|
|
|
|
|
|
||||||
Derivatives Not Designated as Hedges -
Forward Foreign Currency Exchange Contracts
|
|
|
|
|
|
|
||||||
Gain (loss) recognized in earnings
|
|
$
|
(2,591
|
)
|
|
$
|
5,973
|
|
|
$
|
13,178
|
|
Location of gain (loss) recognized in earnings
|
|
Selling, general and administrative expenses
|
|
|
Derivatives in a Fair Value Asset Position
|
|
Derivatives in a Fair Value Liability Position
|
||||||||||||||||
|
|
Balance
Sheet
Location
|
|
Fair Value as of March 31,
|
|
Balance
Sheet
Location
|
|
Fair Value as of March 31,
|
||||||||||||
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
||||||||||
Derivatives Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
Other
non-current
assets
|
|
$
|
2,149
|
|
|
$
|
—
|
|
|
Other
long-term
liabilities
|
|
$
|
—
|
|
|
$
|
10,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Forward foreign currency exchange contracts
|
|
Other
current
assets
|
|
56
|
|
|
475
|
|
|
Accounts
payable and
accrued
expenses
|
|
55
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
2,205
|
|
|
$
|
475
|
|
|
|
|
$
|
55
|
|
|
$
|
10,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Forward foreign currency exchange contracts
|
|
Other
current
assets
|
|
$
|
917
|
|
|
$
|
297
|
|
|
Accounts
payable and
accrued
expenses
|
|
$
|
120
|
|
|
$
|
5
|
|
Total
|
|
|
|
$
|
917
|
|
|
$
|
297
|
|
|
|
|
$
|
120
|
|
|
$
|
5
|
|
Level
|
|
Description
|
|
|
|
1
|
|
quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date;
|
|
|
|
2
|
|
quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability; and
|
|
|
|
3
|
|
unobservable inputs for the asset or liability.
|
|
|
March 31, 2017
|
||||||||||||||||||
|
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
|
$
|
137,145
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
137,145
|
|
Trading securities associated with deferred compensation plans
|
|
—
|
|
|
17,726
|
|
|
—
|
|
|
—
|
|
|
17,726
|
|
|||||
Interest rate swap agreements
|
|
—
|
|
|
—
|
|
|
2,149
|
|
|
—
|
|
|
2,149
|
|
|||||
Forward foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
973
|
|
|
—
|
|
|
973
|
|
|||||
Total financial assets measured and reported at fair value
|
|
$
|
137,145
|
|
|
$
|
17,726
|
|
|
$
|
3,122
|
|
|
$
|
—
|
|
|
$
|
157,993
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Guarantees of bank loans to tobacco growers
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,177
|
|
|
$
|
1,177
|
|
Forward foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
|||||
Total financial liabilities measured and reported at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
175
|
|
|
$
|
1,177
|
|
|
$
|
1,352
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
March 31, 2016
|
||||||||||||||||||
|
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
|
$
|
116,618
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,618
|
|
Trading securities associated with deferred compensation plans
|
|
—
|
|
|
17,817
|
|
|
—
|
|
|
—
|
|
|
17,817
|
|
|||||
Forward foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
772
|
|
|
—
|
|
|
772
|
|
|||||
Total financial assets measured and reported at fair value
|
|
$
|
116,618
|
|
|
$
|
17,817
|
|
|
$
|
772
|
|
|
$
|
—
|
|
|
$
|
135,207
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Guarantees of bank loans to tobacco growers
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,628
|
|
|
$
|
1,628
|
|
Interest rate swap agreements
|
|
—
|
|
|
—
|
|
|
10,766
|
|
|
—
|
|
|
10,766
|
|
|||||
Forward foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Total financial liabilities measured and reported at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,771
|
|
|
$
|
1,628
|
|
|
$
|
12,399
|
|
|
|
Fiscal Year Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Balance at beginning of year
|
|
$
|
1,628
|
|
|
$
|
1,674
|
|
Payments under the guarantees and transfers to allowance for loss on direct loans to farmers (removal of prior crop year loans from the portfolio)
|
|
(2,550
|
)
|
|
(1,826
|
)
|
||
Provision for loss or transfers from allowance for loss on direct loans to farmers (addition of current crop year loans)
|
|
1,854
|
|
|
1,834
|
|
||
Change in discount rate and estimated collection period
|
|
59
|
|
|
106
|
|
||
Currency remeasurement
|
|
186
|
|
|
(160
|
)
|
||
Balance at end of year
|
|
$
|
1,177
|
|
|
$
|
1,628
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
Discount rates:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Benefit cost for plan year
|
4.10
|
%
|
|
3.80
|
%
|
|
4.50
|
%
|
|
3.80
|
%
|
|
3.70
|
%
|
|
4.30
|
%
|
Benefit obligation at end of plan year
|
4.10
|
%
|
|
4.10
|
%
|
|
3.80
|
%
|
|
3.90
|
%
|
|
3.80
|
%
|
|
3.70
|
%
|
Expected long-term return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Benefit cost for plan year
|
7.00
|
%
|
|
7.25
|
%
|
|
7.75
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
4.30
|
%
|
Salary scale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Benefit cost for plan year
|
4.00
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.00
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
Benefit obligation at end of plan year
|
4.00
|
%
|
|
4.00
|
%
|
|
4.50
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.50
|
%
|
Healthcare cost trend rate
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
6.70
|
%
|
|
7.00
|
%
|
|
7.20
|
%
|
|
Pension
Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Actuarial present value of benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Accumulated benefit obligation
|
$
|
266,764
|
|
|
$
|
273,479
|
|
|
|
|
|
||||
Projected benefit obligation
|
269,250
|
|
|
275,505
|
|
|
$
|
36,786
|
|
|
$
|
37,225
|
|
||
|
|
|
|
|
|
|
|
||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation, beginning of year
|
$
|
275,505
|
|
|
$
|
288,908
|
|
|
$
|
37,225
|
|
|
$
|
40,863
|
|
Service cost
|
5,382
|
|
|
5,953
|
|
|
247
|
|
|
286
|
|
||||
Interest cost
|
10,441
|
|
|
10,037
|
|
|
1,535
|
|
|
1,539
|
|
||||
Effect of discount rate change
|
489
|
|
|
(10,036
|
)
|
|
(191
|
)
|
|
(402
|
)
|
||||
Foreign currency exchange rate changes
|
(1,111
|
)
|
|
330
|
|
|
286
|
|
|
(215
|
)
|
||||
Settlements
|
(10,955
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
4,108
|
|
|
(486
|
)
|
|
766
|
|
|
(1,104
|
)
|
||||
Benefit payments
|
(14,609
|
)
|
|
(19,201
|
)
|
|
(3,082
|
)
|
|
(3,742
|
)
|
||||
Projected benefit obligation, end of year
|
$
|
269,250
|
|
|
$
|
275,505
|
|
|
$
|
36,786
|
|
|
$
|
37,225
|
|
|
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Plan assets at fair value, beginning of year
|
$
|
217,859
|
|
|
$
|
224,553
|
|
|
$
|
1,565
|
|
|
$
|
2,115
|
|
Actual return on plan assets
|
16,450
|
|
|
61
|
|
|
71
|
|
|
69
|
|
||||
Employer contributions
|
10,676
|
|
|
12,504
|
|
|
4,500
|
|
|
3,123
|
|
||||
Settlements
|
(10,322
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency exchange rate changes
|
97
|
|
|
(58
|
)
|
|
—
|
|
|
—
|
|
||||
Benefit payments
|
(14,609
|
)
|
|
(19,201
|
)
|
|
(3,082
|
)
|
|
(3,742
|
)
|
||||
Plan assets at fair value, end of year
|
$
|
220,151
|
|
|
$
|
217,859
|
|
|
$
|
3,054
|
|
|
$
|
1,565
|
|
|
|
|
|
|
|
|
|
||||||||
Funded status:
|
|
|
|
|
|
|
|
||||||||
Funded status of the plans, end of year
|
$
|
(49,099
|
)
|
|
$
|
(57,646
|
)
|
|
$
|
(33,732
|
)
|
|
$
|
(35,660
|
)
|
|
Pension
Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Non-current asset (included in other noncurrent assets)
|
$
|
1,710
|
|
|
$
|
2,044
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liability (included in accounts payable and accrued expenses)
|
(1,106
|
)
|
|
(630
|
)
|
|
(2,746
|
)
|
|
(2,543
|
)
|
||||
Non-current liability (reported as pensions and other postretirement benefits)
|
(49,703
|
)
|
|
(59,060
|
)
|
|
(30,986
|
)
|
|
(33,117
|
)
|
||||
Amounts recognized in the consolidated balance sheets
|
$
|
(49,099
|
)
|
|
$
|
(57,646
|
)
|
|
$
|
(33,732
|
)
|
|
$
|
(35,660
|
)
|
|
Pension
Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
For plans with a projected benefit obligation in excess of plan assets:
|
|
|
|
|
|
|
|
||||||||
Aggregate projected benefit obligation (PBO)
|
$
|
260,826
|
|
|
$
|
270,058
|
|
|
$
|
36,786
|
|
|
$
|
37,225
|
|
Aggregate fair value of plan assets
|
210,017
|
|
|
210,368
|
|
|
3,054
|
|
|
1,565
|
|
||||
For plans with an accumulated benefit obligation in excess of plan assets:
|
|
|
|
|
|
|
|
||||||||
Aggregate accumulated benefit obligation (ABO)
|
258,424
|
|
|
268,087
|
|
|
N/A
|
|
|
N/A
|
|
||||
Aggregate fair value of plan assets
|
210,017
|
|
|
210,368
|
|
|
N/A
|
|
|
N/A
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||||||||
|
Fiscal Year Ended March 31,
|
|
Fiscal Year Ended March 31,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
5,382
|
|
|
$
|
5,953
|
|
|
$
|
5,099
|
|
|
$
|
247
|
|
|
$
|
286
|
|
|
$
|
347
|
|
Interest cost
|
10,441
|
|
|
10,037
|
|
|
11,215
|
|
|
1,535
|
|
|
1,539
|
|
|
1,699
|
|
||||||
Expected return on plan assets
|
(15,154
|
)
|
|
(15,110
|
)
|
|
(15,493
|
)
|
|
(42
|
)
|
|
(58
|
)
|
|
(102
|
)
|
||||||
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,465
|
)
|
||||||
Settlement gain
|
(912
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net amortization and deferral
|
4,576
|
|
|
4,394
|
|
|
6,169
|
|
|
(394
|
)
|
|
(431
|
)
|
|
(671
|
)
|
||||||
Net periodic benefit cost
|
$
|
4,333
|
|
|
$
|
5,274
|
|
|
$
|
6,990
|
|
|
$
|
1,346
|
|
|
$
|
1,336
|
|
|
$
|
(192
|
)
|
|
Pension
Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in net actuarial loss (gain):
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss (gain), beginning of year
|
$
|
79,299
|
|
|
$
|
81,544
|
|
|
$
|
(7,234
|
)
|
|
$
|
(6,402
|
)
|
Losses (gains) arising during the year
|
2,313
|
|
|
4,787
|
|
|
554
|
|
|
(1,263
|
)
|
||||
Amortization included in net periodic benefit cost during the year
|
(7,567
|
)
|
|
(7,032
|
)
|
|
394
|
|
|
431
|
|
||||
Net actuarial loss (gain), end of year
|
74,045
|
|
|
79,299
|
|
|
(6,286
|
)
|
|
(7,234
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Change in prior service cost (benefit):
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit), beginning of year
|
(15,061
|
)
|
|
(17,630
|
)
|
|
(108
|
)
|
|
—
|
|
||||
Prior service cost (benefit) arising during the year
|
—
|
|
|
111
|
|
|
(4
|
)
|
|
(108
|
)
|
||||
Amortization included in net periodic benefit cost during the year
|
2,991
|
|
|
2,458
|
|
|
—
|
|
|
—
|
|
||||
Prior service cost (benefit), end of year
|
(12,070
|
)
|
|
(15,061
|
)
|
|
(112
|
)
|
|
(108
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Total amounts in accumulated other comprehensive loss
at end of year, before income taxes
|
$
|
61,975
|
|
|
$
|
64,238
|
|
|
$
|
(6,398
|
)
|
|
$
|
(7,342
|
)
|
|
|
|
|
|
|
|
Actual Allocation
|
||||||
|
Target Allocation
|
|
|
|
|
|
March 31,
|
||||||
Major Asset Category
|
|
Range
|
|
2017
|
|
2016
|
|||||||
Equity securities
|
26.0
|
%
|
|
16
|
%
|
-
|
36%
|
|
31.9
|
%
|
|
22.4
|
%
|
Fixed income securities
(1)
|
69.0
|
%
|
|
59
|
%
|
-
|
79%
|
|
61.7
|
%
|
|
71.5
|
%
|
Alternative investments
|
5.0
|
%
|
|
0
|
%
|
-
|
10%
|
|
6.4
|
%
|
|
6.1
|
%
|
Total
|
100.0
|
%
|
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
(1)
|
Actual amounts include high yield securities and cash balances held for the payment of benefits.
|
Fiscal Year
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||
2018
|
$
|
15,031
|
|
|
$
|
3,142
|
|
2019
|
22,040
|
|
|
3,129
|
|
||
2020
|
20,162
|
|
|
3,015
|
|
||
2021
|
16,727
|
|
|
2,930
|
|
||
2022
|
17,019
|
|
|
2,797
|
|
||
2023 - 2027
|
88,929
|
|
|
12,554
|
|
•
|
Equity securities: 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. These securities are classified as Level 1.
|
•
|
Fixed income securities: 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. These securities are classified as Level 1. Other fixed income investments are valued at an estimated price that a dealer would pay for a similar security on the valuation date using observable market inputs and are classified as Level 2. These market inputs may include yield curves for similarly rated securities. Small amounts of cash are held in common collective trusts. Fixed income securities also include insurance assets, which are valued based on an actuarial calculation. Those securities are classified as Level 3.
|
•
|
Alternative investments: 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 and is valued by the manager based on the net asset value of each fund. These models use significant unobservable inputs and are classified as Level 3 within the fair value hierarchy.
|
|
March 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equity securities
|
$
|
65,637
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65,637
|
|
Fixed income securities
(1)
|
128,215
|
|
|
10,134
|
|
|
3,072
|
|
|
141,421
|
|
||||
Alternative investments
|
—
|
|
|
—
|
|
|
13,094
|
|
|
13,094
|
|
||||
Total investments
|
$
|
193,852
|
|
|
$
|
10,134
|
|
|
$
|
16,166
|
|
|
$
|
220,152
|
|
|
March 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equity securities
|
$
|
43,807
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,807
|
|
Fixed income securities
(1)
|
141,218
|
|
|
7,491
|
|
|
13,382
|
|
|
162,091
|
|
||||
Alternative investments
|
—
|
|
|
—
|
|
|
11,961
|
|
|
11,961
|
|
||||
Total investments
|
$
|
185,025
|
|
|
$
|
7,491
|
|
|
$
|
25,343
|
|
|
$
|
217,859
|
|
(1)
|
Includes high yield securities and cash and cash equivalent balances.
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Common Stock
|
|
|
|
|
|
||||||
Number of shares repurchased
|
—
|
|
|
—
|
|
|
719,993
|
|
|||
Cost of shares repurchased (in thousands of dollars)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,227
|
|
Weighted-average cost per share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43.37
|
|
|
|
|
|
|
|
||||||
Series B 6.75% Convertible Perpetual Preferred Stock
|
|
|
|
|
|
||||||
Number of shares repurchased
|
—
|
|
|
—
|
|
|
1,509
|
|
|||
Cost of shares repurchased (in thousands of dollars)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.497
|
|
Weighted-average cost per share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
992.27
|
|
|
Shares
|
|
Weighted-Average
Exercise
Price
|
|||
Fiscal Year Ended March 31, 2015:
|
|
|
|
|||
Outstanding at beginning of year
|
257,340
|
|
|
$
|
54.83
|
|
Exercised
|
(63,539
|
)
|
|
38.50
|
|
|
Cancelled/expired
|
(24,200
|
)
|
|
62.66
|
|
|
Outstanding at end of year
|
169,601
|
|
|
59.82
|
|
|
|
|
|
|
|||
Fiscal Year Ended March 31, 2016:
|
|
|
|
|||
Exercised
|
(6,200
|
)
|
|
51.32
|
|
|
Cancelled/expired
|
(11,200
|
)
|
|
62.66
|
|
|
Outstanding at end of year
|
152,201
|
|
|
59.96
|
|
|
|
|
|
|
|||
Fiscal Year Ended March 31, 2017:
|
|
|
|
|||
Exercised
|
(135,334
|
)
|
|
61.72
|
|
|
Cancelled/expired
|
(16,867
|
)
|
|
45.82
|
|
|
Outstanding at end of year
|
—
|
|
|
$
|
—
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Total intrinsic value of stock options and SARs exercised
|
$
|
555
|
|
|
$
|
26
|
|
|
$
|
1,091
|
|
Total fair value of SARs vested
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
375
|
|
|
RSUs
|
|
Restricted Stock
|
|
PSAs
|
|||||||||||||||
|
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|||||||||
Fiscal Year Ended March 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Unvested at beginning of year
|
293,180
|
|
|
$
|
44.33
|
|
|
48,100
|
|
|
$
|
42.33
|
|
|
149,387
|
|
|
$
|
41.76
|
|
Granted
|
94,539
|
|
|
51.86
|
|
|
—
|
|
|
—
|
|
|
57,580
|
|
|
46.41
|
|
|||
Vested
|
(123,322
|
)
|
|
42.02
|
|
|
—
|
|
|
—
|
|
|
(50,092
|
)
|
|
31.95
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,400
|
)
|
|
53.56
|
|
|||
Unvested at end of year
|
264,397
|
|
|
48.10
|
|
|
48,100
|
|
|
42.33
|
|
|
153,475
|
|
|
45.58
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fiscal Year Ended March 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Granted
|
80,932
|
|
|
51.62
|
|
|
—
|
|
|
—
|
|
|
86,212
|
|
|
45.06
|
|
|||
Vested
|
(42,384
|
)
|
|
41.64
|
|
|
—
|
|
|
—
|
|
|
(85,387
|
)
|
|
38.14
|
|
|||
Unvested at end of year
|
302,945
|
|
|
49.95
|
|
|
48,100
|
|
|
42.33
|
|
|
154,300
|
|
|
48.13
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fiscal Year Ended March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Granted
|
74,776
|
|
|
55.27
|
|
|
—
|
|
|
—
|
|
|
58,805
|
|
|
49.17
|
|
|||
Vested
|
(51,544
|
)
|
|
44.57
|
|
|
(17,900
|
)
|
|
42.26
|
|
|
(52,230
|
)
|
|
53.56
|
|
|||
Forfeited
|
(539
|
)
|
|
55.63
|
|
|
—
|
|
|
—
|
|
|
(525
|
)
|
|
49.17
|
|
|||
Unvested at end of year
|
325,638
|
|
|
$
|
52.01
|
|
|
30,200
|
|
|
$
|
42.37
|
|
|
160,350
|
|
|
$
|
46.86
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Total stock-based compensation expense
|
$
|
6,475
|
|
|
$
|
5,206
|
|
|
$
|
6,230
|
|
Income tax benefit recorded on stock-based compensation expense
|
$
|
2,266
|
|
|
$
|
1,822
|
|
|
$
|
2,181
|
|
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Flue-Cured and Burley Leaf Tobacco Operations:
|
|
|
|
||||
North America
|
$
|
111,520
|
|
|
$
|
85,985
|
|
Other Regions
|
294,799
|
|
|
303,932
|
|
||
Subtotal
|
406,319
|
|
|
389,917
|
|
||
Other Tobacco Operations
|
32,969
|
|
|
38,742
|
|
||
Consolidated accounts receivable, net
|
$
|
439,288
|
|
|
$
|
428,659
|
|
|
Sales and Other Operating Revenues
|
|
Operating Income
|
||||||||||||||||||||
|
Fiscal Year Ended March 31,
|
|
Fiscal Year Ended March 31,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Flue-Cured and Burley Leaf Tobacco Operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
$
|
416,438
|
|
|
$
|
361,827
|
|
|
$
|
305,028
|
|
|
$
|
35,151
|
|
|
$
|
31,147
|
|
|
$
|
31,060
|
|
Other Regions
(1)
|
1,422,991
|
|
|
1,538,971
|
|
|
1,739,781
|
|
|
143,349
|
|
|
143,596
|
|
|
125,839
|
|
||||||
Subtotal
|
1,839,429
|
|
|
1,900,798
|
|
|
2,044,809
|
|
|
178,500
|
|
|
174,743
|
|
|
156,899
|
|
||||||
Other Tobacco Operations
(2)
|
231,789
|
|
|
219,575
|
|
|
226,992
|
|
|
9,984
|
|
|
11,325
|
|
|
10,326
|
|
||||||
Segment total
|
2,071,218
|
|
|
2,120,373
|
|
|
2,271,801
|
|
|
188,484
|
|
|
186,068
|
|
|
167,225
|
|
||||||
Deduct: Equity in pretax earnings of unconsolidated affiliates
(3)
|
|
|
|
|
|
|
(5,774
|
)
|
|
(5,422
|
)
|
|
(7,137
|
)
|
|||||||||
Restructuring and impairment costs
(4)
|
|
|
|
|
|
|
(4,359
|
)
|
|
(2,389
|
)
|
|
(4,890
|
)
|
|||||||||
Add: Other income
(5)
|
|
|
|
|
|
|
—
|
|
|
3,390
|
|
|
12,676
|
|
|||||||||
Consolidated total
|
$
|
2,071,218
|
|
|
$
|
2,120,373
|
|
|
$
|
2,271,801
|
|
|
$
|
178,351
|
|
|
$
|
181,647
|
|
|
$
|
167,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Segment Assets
|
|
Goodwill
|
||||||||||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Flue-Cured and Burley Leaf Tobacco Operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
$
|
357,406
|
|
|
$
|
364,003
|
|
|
$
|
281,449
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other Regions
(1)
|
1,465,109
|
|
|
1,548,517
|
|
|
1,607,846
|
|
|
97,159
|
|
|
97,318
|
|
|
97,372
|
|
||||||
Subtotal
|
1,822,515
|
|
|
1,912,520
|
|
|
1,889,295
|
|
|
97,159
|
|
|
97,318
|
|
|
97,372
|
|
||||||
Other Tobacco Operations
(2)
|
300,890
|
|
|
318,657
|
|
|
297,180
|
|
|
1,644
|
|
|
1,713
|
|
|
1,713
|
|
||||||
Segment and consolidated totals
|
$
|
2,123,405
|
|
|
$
|
2,231,177
|
|
|
$
|
2,186,475
|
|
|
$
|
98,803
|
|
|
$
|
99,031
|
|
|
$
|
99,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Depreciation and Amortization
|
|
Capital Expenditures
|
||||||||||||||||||||
|
Fiscal Year Ended March 31,
|
|
Fiscal Year Ended March 31,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Flue-Cured and Burley Leaf Tobacco Operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
$
|
4,626
|
|
|
$
|
4,314
|
|
|
$
|
4,284
|
|
|
$
|
4,202
|
|
|
$
|
2,282
|
|
|
$
|
5,814
|
|
Other Regions
(1)
|
26,106
|
|
|
29,187
|
|
|
28,827
|
|
|
21,619
|
|
|
25,122
|
|
|
39,303
|
|
||||||
Subtotal
|
30,732
|
|
|
33,501
|
|
|
33,111
|
|
|
25,821
|
|
|
27,404
|
|
|
45,117
|
|
||||||
Other Tobacco Operations
(2)
|
5,238
|
|
|
4,143
|
|
|
4,213
|
|
|
9,809
|
|
|
19,749
|
|
|
13,268
|
|
||||||
Segment and consolidated totals
|
$
|
35,970
|
|
|
$
|
37,644
|
|
|
$
|
37,324
|
|
|
$
|
35,630
|
|
|
$
|
47,153
|
|
|
$
|
58,385
|
|
(1)
|
Includes South America, Africa, Europe, and Asia regions, as well as inter-region eliminations.
|
(2)
|
Includes Dark Air-Cured, Oriental, and Special Services, as well as intercompany eliminations. Sales and other operating revenues, goodwill, depreciation and amortization, and capital expenditures include limited amounts or no amounts for Oriental because the business is accounted for on the equity method and its financial results consist principally of equity in the pretax earnings of the unconsolidated affiliate. The investment in the unconsolidated affiliate is included in segment assets and was approximately
$78.1 million
,
$81.8 million
, and
$74.9 million
, at
March 31, 2017
,
2016
, and
2015
, respectively.
|
(3)
|
Equity in pretax earnings of unconsolidated affiliates is included in segment operating income (Other Tobacco Operations segment), but is reported below consolidated operating income and excluded from that total in the consolidated statements of income.
|
(4)
|
Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income (see Note 2).
|
(5)
|
Other income in fiscal year 2016 represents a gain from remeasuring to fair value the Company's original 50% ownership in Procesadora Unitab, S.A., a tobacco processing joint venture in Guatemala, upon acquiring the 50% interest held by the Company's joint venture partner (See Note 13). Other income in fiscal year 2015 represents the reversal of a valuation allowance on IPI excise tax credits in Brazil (See Note 13).
|
Geographic Data
|
Sales and Other Operating Revenues
|
||||||||||
|
Fiscal Year Ended March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Belgium
|
$
|
320,735
|
|
|
$
|
371,580
|
|
|
$
|
336,396
|
|
United States
|
320,731
|
|
|
275,147
|
|
|
290,950
|
|
|||
Germany
|
123,649
|
|
|
155,180
|
|
|
170,338
|
|
|||
China
|
137,855
|
|
|
135,032
|
|
|
174,872
|
|
|||
Netherlands
|
91,266
|
|
|
121,767
|
|
|
113,297
|
|
|||
Russia
|
84,784
|
|
|
109,559
|
|
|
126,652
|
|
|||
All other countries
|
992,198
|
|
|
952,108
|
|
|
1,059,296
|
|
|||
Consolidated total
|
$
|
2,071,218
|
|
|
$
|
2,120,373
|
|
|
$
|
2,271,801
|
|
|
|
|
|
|
|
||||||
|
Long-Lived Assets
|
||||||||||
|
March 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
85,145
|
|
|
$
|
84,072
|
|
|
$
|
70,929
|
|
Brazil
|
134,074
|
|
|
133,727
|
|
|
135,980
|
|
|||
Mozambique
|
50,311
|
|
|
53,069
|
|
|
55,733
|
|
|||
All other countries
|
146,698
|
|
|
154,090
|
|
|
141,893
|
|
|||
Consolidated total
|
$
|
416,228
|
|
|
$
|
424,958
|
|
|
$
|
404,535
|
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign currency translation:
|
|
|
|
|
|
|
||||||
Balance at beginning of year
|
|
$
|
(26,992
|
)
|
|
$
|
(31,138
|
)
|
|
$
|
(8,476
|
)
|
Other comprehensive income (loss) attributable to Universal Corporation:
|
|
|
|
|
|
|
||||||
Net gain (loss) on foreign currency translation (net of tax (expense) benefit of $3,715, $(2,119), and $12,181)
|
|
(6,899
|
)
|
|
3,934
|
|
|
(22,625
|
)
|
|||
Less: Net loss (gain) on foreign currency translation attributable to noncontrolling interests
|
|
753
|
|
|
212
|
|
|
(37
|
)
|
|||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes
|
|
(6,146
|
)
|
|
4,146
|
|
|
(22,662
|
)
|
|||
Balance at end of year
|
|
$
|
(33,138
|
)
|
|
$
|
(26,992
|
)
|
|
$
|
(31,138
|
)
|
|
|
|
|
|
|
|
||||||
Foreign currency hedge:
|
|
|
|
|
|
|
||||||
Balance at beginning of year
|
|
$
|
675
|
|
|
$
|
(1,834
|
)
|
|
$
|
769
|
|
Other comprehensive income (loss) attributable to Universal Corporation:
|
|
|
|
|
|
|
||||||
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $991, $(1,060), and $2,304)
|
|
(1,841
|
)
|
|
1,969
|
|
|
(4,280
|
)
|
|||
Reclassification of net loss to earnings (net of tax benefit of $(489), $(291), and $(903))
(1)
|
|
908
|
|
|
540
|
|
|
1,677
|
|
|||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes
|
|
(933
|
)
|
|
2,509
|
|
|
(2,603
|
)
|
|||
Balance at end of year
|
|
$
|
(258
|
)
|
|
$
|
675
|
|
|
$
|
(1,834
|
)
|
|
|
|
|
|
|
|
||||||
Interest rate hedge:
|
|
|
|
|
|
|
||||||
Balance at beginning of year
|
|
$
|
(6,997
|
)
|
|
$
|
(1,982
|
)
|
|
$
|
(608
|
)
|
Other comprehensive income (loss) attributable to Universal Corporation:
|
|
|
|
|
|
|
||||||
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(3,150), $4,489, and $1,416)
|
|
5,849
|
|
|
(8,335
|
)
|
|
(2,628
|
)
|
|||
Reclassification of net loss to earnings (net of tax benefit of $(1,370), $(1,788), and $(675))
(2)
|
|
2,546
|
|
|
3,320
|
|
|
1,254
|
|
|||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes
|
|
8,395
|
|
|
(5,015
|
)
|
|
(1,374
|
)
|
|||
Balance at end of year
|
|
$
|
1,398
|
|
|
$
|
(6,997
|
)
|
|
$
|
(1,982
|
)
|
|
|
|
|
|
|
|
||||||
Pension and other postretirement benefit plans:
|
|
|
|
|
|
|
||||||
Balance at beginning of year
|
|
$
|
(39,036
|
)
|
|
$
|
(40,040
|
)
|
|
$
|
(26,017
|
)
|
Other comprehensive income (loss) attributable to Universal Corporation:
|
|
|
|
|
|
|
||||||
Net losses arising during the year (net of tax benefit of $751, $1,035, and $9,719)
(3)
|
|
(1,395
|
)
|
|
(1,921
|
)
|
|
(18,049
|
)
|
|||
Amortization included in earnings (net of tax benefit of $(1,546), $(1,576), and $(2,163))
(4)
|
|
2,870
|
|
|
2,925
|
|
|
4,026
|
|
|||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes
|
|
1,475
|
|
|
1,004
|
|
|
(14,023
|
)
|
|||
Balance at end of year
|
|
$
|
(37,561
|
)
|
|
$
|
(39,036
|
)
|
|
$
|
(40,040
|
)
|
|
|
|
|
|
|
|
||||||
Total accumulated other comprehensive income (loss) at end of year
|
|
$
|
(69,559
|
)
|
|
$
|
(72,350
|
)
|
|
$
|
(74,994
|
)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Fiscal Year Ended March 31, 2017
|
|
|
|
|
|
|
|
||||||||
Operating Results:
|
|
|
|
|
|
|
|
||||||||
Sales and other operating revenues
|
$
|
295,475
|
|
|
$
|
456,942
|
|
|
$
|
668,771
|
|
|
$
|
650,030
|
|
Gross profit
|
52,197
|
|
|
87,844
|
|
|
135,453
|
|
|
119,185
|
|
||||
Net income (loss)
|
(7,504
|
)
|
|
26,498
|
|
|
57,062
|
|
|
36,450
|
|
||||
Net income (loss) attributable to Universal Corporation
|
(5,476
|
)
|
|
25,264
|
|
|
53,647
|
|
|
32,869
|
|
||||
Earnings (loss) available to Universal Corporation common shareholders after dividends on convertible perpetual preferred stock
|
(9,163
|
)
|
|
21,577
|
|
|
49,960
|
|
|
(41,484
|
)
|
||||
Earnings (loss) per share attributable to Universal Corporation common shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
(0.40
|
)
|
|
0.95
|
|
|
2.17
|
|
|
(1.64
|
)
|
||||
Diluted
|
(0.40
|
)
|
|
0.90
|
|
|
1.92
|
|
|
(1.64
|
)
|
||||
Cash Dividends Declared:
|
|
|
|
|
|
|
|
||||||||
Per share of convertible perpetual preferred stock
|
16.88
|
|
|
16.87
|
|
|
16.88
|
|
|
—
|
|
||||
Per share of common stock
|
0.53
|
|
|
0.53
|
|
|
0.54
|
|
|
0.54
|
|
||||
Market Price Range of Common Stock:
|
|
|
|
|
|
|
|
||||||||
High
|
57.75
|
|
|
61.69
|
|
|
64.20
|
|
|
83.35
|
|
||||
Low
|
52.26
|
|
|
55.29
|
|
|
52.40
|
|
|
63.30
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Fiscal Year Ended March 31, 2016
|
|
|
|
|
|
|
|
||||||||
Operating Results:
|
|
|
|
|
|
|
|
||||||||
Sales and other operating revenues
|
$
|
275,419
|
|
|
$
|
456,382
|
|
|
$
|
584,592
|
|
|
$
|
803,980
|
|
Gross profit
|
48,389
|
|
|
98,094
|
|
|
119,906
|
|
|
140,942
|
|
||||
Net income (loss)
|
(6,125
|
)
|
|
25,064
|
|
|
46,615
|
|
|
52,594
|
|
||||
Net income (loss) attributable to Universal Corporation
|
(5,947
|
)
|
|
22,465
|
|
|
44,534
|
|
|
47,964
|
|
||||
Earnings (loss) available to Universal Corporation common shareholders after dividends on convertible perpetual preferred stock
|
(9,634
|
)
|
|
18,778
|
|
|
40,847
|
|
|
44,277
|
|
||||
Earnings (loss) per share attributable to Universal Corporation common shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
(0.43
|
)
|
|
0.83
|
|
|
1.80
|
|
|
1.95
|
|
||||
Diluted
|
(0.43
|
)
|
|
0.81
|
|
|
1.60
|
|
|
1.72
|
|
||||
Cash Dividends Declared:
|
|
|
|
|
|
|
|
||||||||
Per share of convertible perpetual preferred stock
|
16.88
|
|
|
16.87
|
|
|
16.88
|
|
|
16.87
|
|
||||
Per share of common stock
|
0.52
|
|
|
0.52
|
|
|
0.53
|
|
|
0.53
|
|
||||
Market Price Range of Common Stock:
|
|
|
|
|
|
|
|
||||||||
High
|
57.76
|
|
|
58.41
|
|
|
57.72
|
|
|
57.27
|
|
||||
Low
|
46.80
|
|
|
46.98
|
|
|
49.70
|
|
|
51.49
|
|
Note:
|
Earnings per share amounts for each fiscal year may not equal the total of the four quarterly amounts due to differences in weighted-average outstanding shares for the respective periods and to the fact that the Company’s convertible perpetual preferred stock may be antidilutive for some periods.
|
•
|
Second Quarter – Restructuring and impairment costs totaling
$3.7 million
, primarily related to the Company's decision to close its tobacco processing facility in Hungary. The Company is now processing tobaccos sourced from Hungary in its factories in Italy. The costs incurred for the change in operations in Hungary included statutory employee termination benefits and impairment charges related to certain property and equipment. Those costs reduced net income attributable to Universal Corporation by
$2.4 million
and diluted earnings per share by
$0.09
.
|
•
|
Fourth Quarter – The conversion of
107,418
shares of the Company's Series B 6.75% Convertible Perpetual Preferred Stock for cash resulted in a one-time reduction of retained earnings of approximately
$74.4 million
during the quarter ending
March 31, 2017
, representing the excess of the conversion cost over the carrying value of those preferred shares. The reduction in retained earnings resulted in a corresponding one-time reduction of earnings available to common shareholders for purposes of determining the amounts reported for basic and diluted earnings per share for those periods. The reduction in earnings available to common shareholders decreased diluted earnings per share for the quarter by
$2.90
.
|
•
|
First Quarter – Restructuring and impairment costs totaling
$2.4 million
, related to a decision to significantly scale back the Company's operations in Zambia. The costs included statutory employee termination benefits, impairment charges related to outstanding balances on loans to farmers whose contracts were terminated as a result of the decision, and impairment charges on certain property and equipment. The restructuring and impairment costs reduced net income attributable to Universal Corporation by
$1.6 million
and diluted earnings per share by
$0.06
.
|
•
|
Third Quarter – A
$3.4 million
pretax gain arising from the acquisition of a joint venture partner's 50% ownership interest in a tobacco processing entity in Guatemala. The transaction increased the Company's ownership interest in the entity to 100%, requiring consolidation of the financial statements of the entity and remeasurement of the Company's original 50% ownership interest to fair value, resulting in the gain. The gain increased net income attributable to Universal Corporation by
$2.2 million
and diluted earnings per share by
$0.08
.
|
Name and Age
|
|
Position
|
|
Business Experience During Past The Five Years
|
G. C. Freeman, III (53)
|
|
Chairman, President, and Chief Executive Officer
|
|
Mr. Freeman was elected Chairman of the Board in August 2008, Chief Executive Officer effective April 2008, President in December 2006, and Vice President in November 2005. Mr. Freeman served as General Counsel and Secretary from February 2001 until November 2005 and has been employed with the Company since 1997.
|
A. L. Hentschke (47)
|
|
Senior Vice President and Chief Operating Officer
|
|
Mr. Hentschke was elected Senior Vice President and Chief Operating Officer in April 2015. From January 2013 to April 2015, he served as Executive Vice President of Universal Leaf. Tobacco Company, Incorporated ("Universal Leaf"). From November 2009 to January 2013, Mr. Hentschke served as President and Chief Executive Officer of Universal Leaf Tabacos, Limitada, the Company's operating subsidiary in Brazil. He has been employed with the Company and its affiliates since 1991.
|
D. C. Moore (61)
|
|
Senior Vice President and Chief Financial Officer
|
|
Mr. Moore was elected Senior Vice President and Chief Financial Officer effective September 2008. Mr. Moore served as Vice President and Chief Administrative Officer from April 2006 until September 2008, as Senior Vice President of Universal Leaf from September 2005 until April 2006, and as Managing Director of Universal Leaf International SA from April 2002 until September 2005. He has been employed with the Company since 1978.
|
T. G. Broome (63)
|
|
Executive Vice President and Sales Director, Universal Leaf Tobacco Company, Inc.
|
|
Mr. Broome was elected Executive Vice President and Sales Director, Universal Leaf, in October 2012. From April 2011 through October 2012, Mr. Broome served as Executive Vice President. From September 1998 through March 2011, Mr. Broome served as Senior Vice President-Sales. He has been employed with the Company since 1994.
|
P. D. Wigner (48)
|
|
Vice President, General Counsel and Secretary
|
|
Mr. Wigner was elected Vice President in August 2007, and General Counsel and Secretary in November 2005 and also served as Chief Compliance Officer from November 2007 until September 2012. Mr. Wigner served as Senior Counsel of Universal Leaf from November 2004 until November 2005. He has been employed with the Company since 2003.
|
J. A. Huffman (55)
|
|
Senior Vice President, Information and Planning, Universal Leaf Tobacco Company, Inc.
|
|
Mr. Huffman was elected Senior Vice President, Information and Planning, Universal Leaf, in August 2007. From September 2003 to August 2007, Mr. Huffman served as Senior Vice President. From September 2002 to September 2003, Mr. Huffman served as Vice President and Controller. He has been employed with the Company since 1996.
|
C. C. Formacek (57)
|
|
Vice President and Treasurer
|
|
Ms. Formacek was elected Vice President and Treasurer effective April 2012. Ms. Formacek served as Treasurer of Universal Leaf from April 2011 through March 2012. She joined the Company in September 2009 and served as Assistant Treasurer of Universal Leaf from that time through March 2011.
|
R. M. Peebles (59)
|
|
Vice President and Controller
|
|
Mr. Peebles was elected Vice President and Controller in April 2011. Mr. Peebles joined the Company in September 2003 and served as Controller from that time through March 2011.
|
(a)
|
The following are filed as part of this Annual Report:
|
1.
|
Financial Statements
.
|
2.
|
Financial Statement Schedules
.
|
3.
|
Exhibits
. The exhibits are listed in the Exhibit Index immediately following the signature pages to this Annual Report.
|
(b)
|
Exhibits
|
Description
|
|
Balance at
Beginning
of Year
|
|
Net
Additions
(Reversals) Charged
to Expense
|
|
Additions
Charged
to Other
Accounts
|
|
Deductions
(1)
|
|
Balance
at End
of Year
|
||||||||||
(in thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal Year Ended March 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts (deducted from accounts receivable)
|
|
$
|
6,536
|
|
|
$
|
1,341
|
|
|
$
|
—
|
|
|
$
|
(2,395
|
)
|
|
$
|
5,482
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for supplier accounts (deducted from advances to suppliers and other noncurrent assets)
|
|
46,078
|
|
|
3,734
|
|
|
—
|
|
|
(15,139
|
)
|
|
34,673
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for recoverable taxes (deducted from other current assets and other noncurrent assets)
|
|
29,504
|
|
|
1,855
|
|
|
—
|
|
|
(8,141
|
)
|
|
23,218
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal Year Ended March 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts (deducted from accounts receivable)
|
|
$
|
5,482
|
|
|
$
|
6,970
|
|
|
$
|
—
|
|
|
$
|
(3,353
|
)
|
|
$
|
9,099
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for supplier accounts (deducted from advances to suppliers and other noncurrent assets)
|
|
34,673
|
|
|
815
|
|
|
—
|
|
|
(6,623
|
)
|
|
28,865
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for recoverable taxes (deducted from other current assets and other noncurrent assets)
|
|
23,218
|
|
|
1,755
|
|
|
—
|
|
|
(6,221
|
)
|
|
18,752
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal Year Ended March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts (deducted from accounts receivable)
|
|
$
|
9,099
|
|
|
$
|
(5,071
|
)
|
|
$
|
—
|
|
|
$
|
(81
|
)
|
|
$
|
3,947
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for supplier accounts (deducted from advances to suppliers and other noncurrent assets)
|
|
28,865
|
|
|
(857
|
)
|
|
—
|
|
|
(934
|
)
|
|
27,074
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for recoverable taxes (deducted from other current assets and other noncurrent assets)
|
|
18,752
|
|
|
(3,392
|
)
|
|
—
|
|
|
(2,808
|
)
|
|
12,552
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes direct write-offs of assets and currency remeasurement.
|
|
|
|
UNIVERSAL CORPORATION
|
May 26, 2017
|
|
|
|
|
|
By:
|
/s/ GEORGE C. FREEMAN, III
|
|
|
|
George C. Freeman, III
Chairman, President, and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
/s/ GEORGE C. FREEMAN, III
|
|
Chairman, President, Chief Executive Officer, and Director
|
|
May 26, 2017
|
George C. Freeman, III
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ DAVID C. MOORE
|
|
Senior Vice President and Chief Financial Officer
|
|
May 26, 2017
|
David C. Moore
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ ROBERT M. PEEBLES
|
|
Vice President and Controller
|
|
May 26, 2017
|
Robert M. Peebles
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ JOHN B. ADAMS, JR.
|
|
Director
|
|
May 26, 2017
|
John B. Adams, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ DIANA F. CANTOR
|
|
Director
|
|
May 26, 2017
|
Diana F. Cantor
|
|
|
|
|
|
|
|
|
|
/s/ LENNART R. FREEMAN
|
|
Director
|
|
May 26, 2017
|
Lennart R. Freeman
|
|
|
|
|
|
|
|
|
|
/s/ THOMAS H. JOHNSON
|
|
Director
|
|
May 26, 2017
|
Thomas H. Johnson
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL T. LAWTON
|
|
Director
|
|
May 26, 2017
|
Michael T. Lawton
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/s/ EDDIE N. MOORE, JR.
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Director
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May 26, 2017
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Eddie N. Moore, Jr.
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/s/ ROBERT C. SLEDD
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Director
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May 26, 2017
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Robert C. Sledd
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10.15
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Universal Corporation Executive Officer Annual Incentive Plan, as amended (incorporated herein by reference to the Registrant's definitive proxy statement filed June 25, 2014, File No. 001-00652).
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10.16
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Form of Universal Corporation 2010 Restricted Stock Units Agreement with Schedule of Awards to named executive officers (incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended March 31, 2010, File No. 001-00652).
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10.17
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Universal Leaf Tobacco Company, Incorporated Deferred Income Plan III, amended and restated as of December 31, 2008 (incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 2010, File No. 001-00652).
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10.18
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Universal Corporation Outside Directors' Deferred Income Plan III, amended and restated as of December 31, 2008, and amended as of February 1, 2010 (incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 2010, File No. 001-00652).
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10.19
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Form of Universal Corporation 2011 Restricted Stock Units Agreement (incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 2011, File No. 001-00652).
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10.20
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Form of Universal Corporation Performance Share Award Agreement (incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 2011, File No. 001-00652).
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10.21
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Credit Agreement dated December 30, 2014 among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, SunTrust Bank and AgFirst Farm Credit Bank, as Co-Syndication Agents and Keybank National Association and Capital One, National Association, as Co-Documentation Agents (incorporated herein by reference to the Registrant’s Current Report on Form 8-K dated December 30, 2014 (December 23, 2014), File No. 001-00652).
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12
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Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preference Dividends.*
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21
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Subsidiaries of the Registrant.*
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23
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Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.*
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31.1
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Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
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31.2
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Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
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32.1
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Statement of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.*
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32.2
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Statement of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.*
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101
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Interactive Data File (Annual Report on Form 10-K for the fiscal year ended March 31, 2017, furnished in XBRL (eXtensible Business Reporting Language)).*
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Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Consolidated Statements of Income for each of the three years ended March 31, 2017, 2016 and 2015, (ii) the Consolidated Statements of Comprehensive Income for each of the three years ended March 31, 2017, 2016 and 2015, (iii) the Consolidated Balance Sheets at March 31, 2017 and 2016, (iv) the Consolidated Statement of Cash Flows for each of the three years ended March 31, 2017, 2016 and 2015, (v) the Consolidated Statement of Shareholders’ Equity for each of the three years ended March 31, 2017, 2016 and 2015, (vi) the Notes to Consolidated Financial Statements, (vii) Schedule II - Valuation and Qualifying Accounts.
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Fiscal Year Ended March 31,
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2017
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2016
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2015
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2014
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2013
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(in thousands, except for ratios)
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Earnings
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Pretax income before equity in pretax earnings (loss) of unconsolidated affiliates
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$
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163,464
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$
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167,156
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$
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151,330
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$
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226,793
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$
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201,650
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Fixed charges (net of interest capitalized)
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18,222
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18,499
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20,993
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23,974
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25,646
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Distribution of earnings from unconsolidated affiliates
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5,078
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3,422
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5,228
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6,508
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123
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Total Earnings
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$
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186,764
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$
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189,077
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$
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177,551
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$
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257,275
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$
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227,419
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Fixed Charges and Preference Dividends
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Interest expense
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$
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16,284
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$
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15,669
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$
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17,120
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$
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20,307
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$
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22,013
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Interest capitalized
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—
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—
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—
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—
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—
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Amortization of premiums, discounts, and debt issuance cost
(1)
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—
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851
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1,600
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1,302
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1,343
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Interest component of rent expense
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1,938
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1,979
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2,273
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2,365
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2,290
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Total Fixed Charges
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18,222
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18,499
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20,993
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23,974
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25,646
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Dividends on convertible perpetual preferred stock (pretax)
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17,017
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22,689
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22,806
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22,846
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22,846
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Total Fixed Charges and Preference Dividends
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$
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35,239
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$
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41,188
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$
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43,799
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$
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46,820
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$
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48,492
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Ratio of Earnings to Fixed Charges
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10.25
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10.22
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8.46
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10.73
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8.87
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Ratio of Earnings to Combined Fixed Charges and Preference Dividends
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5.30
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4.59
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4.05
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5.49
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4.69
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Subsidiary Name
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Organized under law of
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Aviation and Regional Services, Ltd.
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Malawi
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B.V. Beleggings-en Beheermaatschappij "De Amstel"
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Netherlands
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CA Bautz GmbH
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Germany
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Carolina Innovative Food Ingredients, Inc.
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Virginia
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Carolina Recycled Ag Materials, LLC
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Virginia
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Casa Export, Limited
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Virginia
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CATSCO, Inc.
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British Virgin Isles
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CJSC Universal Tabak
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Russia
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Continental Tobacco S.A.
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Switzerland
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B.V. Deli-HTL Tabak Maatschappij
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Netherlands
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Deltafina, S.r.l.
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Italy
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Deutsch-hollandische Tabakgesellschaft mbH
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Germany
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Ermor Tabarama-Tabacos do Brasil Ltda.
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Brazil
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Gebrueder Kulenkampff GmbH
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Germany
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Global Laboratory Services, Inc.
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Virginia
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Harkema Services, Inc.
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Virginia
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Indoco International B.V.
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Netherlands
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Inetab-Kaubeck, SRL
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Dominican Republic
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Itofina, S.A.
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Switzerland
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J.P. Taylor Company, L.L.C.
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Virginia
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L’Agricola, S.r.l.
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Italy
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Lancaster Leaf Tobacco Company of Pennsylvania, Inc.
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Virginia
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Limbe Leaf Tobacco Company Limited
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Malawi
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Mozambique Leaf Tobacco, Limitada
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Mozambique
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Procesadora Unitab, S.A.
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Guatemala
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PT Pandu Sata Utama
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Indonesia
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PT Tempu Rejo
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Indonesia
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Tabacalera San Fernando S.R.L.
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Paraguay
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Tabacos Del Pacifico Norte, S.A. De C.V.
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Mexico
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TAES, S.L.
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Spain
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Tanzania Leaf Tobacco Co., Ltd.
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Tanzania
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Tanzania Tobacco Processors Ltd.
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Tanzania
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ULT Support Services India Private Ltd.
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India
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Ultoco, S.A.
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Switzerland
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Ultoco Limited
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British Virgin Islands
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Ultoco Services, S.A.
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Switzerland
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Universal Finance B.V.
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Netherlands
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Universal Innovations Corporation, Inc.
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Virginia
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Universal Leaf Africa (Pty) Ltd.
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South Africa
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Universal Leaf (Asia) Pte Ltd.
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Singapore
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Universal Leaf Far East Ltd.
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British Virgin Islands
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Universal Leaf Germany GmbH
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Germany
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Universal Leaf Nicaragua, S.A.
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Nicaragua
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Universal Leaf North America U. S., Inc.
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North Carolina
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Universal Leaf Philippines, Inc.
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Philippines
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Universal Leaf South Africa (Pty) Limited
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South Africa
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Universal Leaf Tabacos Ltda.
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Brazil
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Universal Leaf Tabacos S.R.L.
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Argentina
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Universal Leaf Tobacco Company, Inc.
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Virginia
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Universal Leaf Tobacco Hungary Private Limited Company
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Hungary
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Universal Leaf Tobacco International, Inc.
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Virginia
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Universal Leaf Tobacco Poland Sp. z o.o.
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Poland
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Virginia Tobacco Company, Inc.
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Virginia
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Zambia Leaf Tobacco Co., Ltd.
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Zambia
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Zimleaf Holdings (Private) Limited
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Zimbabwe
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Zimbabwe Leaf Tobacco Company (Private) Limited
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Zimbabwe
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(1)
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Registration Statements (Form S-3 No. 333-200433) of Universal Corporation, and
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1.
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I have reviewed this annual report on Form 10-K of Universal Corporation for the period ended March 31, 2017;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ GEORGE C. FREEMAN, III
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George C. Freeman, III
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Chairman, President, and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Universal Corporation for the period ended March 31, 2017;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ DAVID C. MOORE
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David C. Moore
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Senior Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ GEORGE C. FREEMAN, III
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George C. Freeman, III
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Chairman, President, and Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ DAVID C. MOORE
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David C. Moore
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Senior Vice President and Chief Financial Officer
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