þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017
|
||
|
OR
|
|
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
FOR THE TRANSITION PERIOD FROM ______________TO_______________
|
Virginia
(State or other jurisdiction of
incorporation or organization)
|
|
54-0414210
(I.R.S. Employer
Identification Number)
|
|
|
|
9201 Forest Hill Avenue,
Richmond, Virginia
(Address of principal executive offices)
|
|
23235
(Zip Code)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
Item No.
|
|
Page
|
|
PART I
- FINANCIAL INFORMATION
|
|
1.
|
||
2.
|
||
3.
|
||
4.
|
||
|
PART II
- OTHER INFORMATION
|
|
1.
|
||
2.
|
Unregistered Sales
of Equity Securities
and Use of Proceeds
|
|
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
Sales and other operating revenues
|
|
$
|
488,248
|
|
|
$
|
456,942
|
|
|
$
|
772,870
|
|
|
$
|
752,417
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
|
395,172
|
|
|
369,098
|
|
|
625,937
|
|
|
612,376
|
|
||||
Selling, general and administrative expenses
|
|
48,101
|
|
|
40,834
|
|
|
95,403
|
|
|
101,033
|
|
||||
Restructuring and impairment costs
|
|
—
|
|
|
3,682
|
|
|
—
|
|
|
3,682
|
|
||||
Operating income
|
|
44,975
|
|
|
43,328
|
|
|
51,530
|
|
|
35,326
|
|
||||
Equity in pretax earnings of unconsolidated affiliates
|
|
667
|
|
|
1,260
|
|
|
232
|
|
|
1,130
|
|
||||
Interest income
|
|
526
|
|
|
271
|
|
|
1,196
|
|
|
634
|
|
||||
Interest expense
|
|
3,964
|
|
|
4,335
|
|
|
7,896
|
|
|
8,389
|
|
||||
Income before income taxes and other items
|
|
42,204
|
|
|
40,524
|
|
|
45,062
|
|
|
28,701
|
|
||||
Income taxes
|
|
13,898
|
|
|
14,026
|
|
|
13,435
|
|
|
9,707
|
|
||||
Net income
|
|
28,306
|
|
|
26,498
|
|
|
31,627
|
|
|
18,994
|
|
||||
Less: net (income) loss attributable to noncontrolling interests in subsidiaries
|
|
(2,139
|
)
|
|
(1,234
|
)
|
|
(1,883
|
)
|
|
794
|
|
||||
Net income attributable to Universal Corporation
|
|
26,167
|
|
|
25,264
|
|
|
29,744
|
|
|
19,788
|
|
||||
Dividends on Universal Corporation convertible perpetual preferred stock
|
|
—
|
|
|
(3,687
|
)
|
|
—
|
|
|
(7,374
|
)
|
||||
Earnings available to Universal Corporation common shareholders
|
|
$
|
26,167
|
|
|
$
|
21,577
|
|
|
$
|
29,744
|
|
|
$
|
12,414
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Universal Corporation common shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.03
|
|
|
$
|
0.95
|
|
|
$
|
1.17
|
|
|
$
|
0.55
|
|
Diluted
|
|
$
|
1.02
|
|
|
$
|
0.90
|
|
|
$
|
1.16
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
25,334,661
|
|
|
22,777,394
|
|
|
25,370,783
|
|
|
22,755,927
|
|
||||
Diluted
|
|
25,546,546
|
|
|
27,968,156
|
|
|
25,589,158
|
|
|
23,073,341
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total comprehensive income, net of income taxes
|
|
$
|
33,079
|
|
|
$
|
29,651
|
|
|
$
|
42,188
|
|
|
$
|
17,321
|
|
Less: comprehensive income attributable to noncontrolling interests, net of income taxes
|
|
(2,076
|
)
|
|
(1,007
|
)
|
|
(1,772
|
)
|
|
1,238
|
|
||||
Comprehensive income attributable to Universal Corporation, net of income taxes
|
|
$
|
31,003
|
|
|
$
|
28,644
|
|
|
$
|
40,416
|
|
|
$
|
18,559
|
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per common share
|
|
$
|
0.54
|
|
|
$
|
0.53
|
|
|
$
|
1.08
|
|
|
$
|
1.06
|
|
|
|
September 30,
|
|
September 30,
|
|
March 31,
|
||||||
|
|
2017
|
|
2016
|
|
2017
|
||||||
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
41,203
|
|
|
$
|
294,894
|
|
|
$
|
283,993
|
|
Accounts receivable, net
|
|
338,700
|
|
|
251,805
|
|
|
439,288
|
|
|||
Advances to suppliers, net
|
|
66,580
|
|
|
47,841
|
|
|
103,750
|
|
|||
Accounts receivable—unconsolidated affiliates
|
|
50,533
|
|
|
51,558
|
|
|
2,373
|
|
|||
Inventories—at lower of cost or net realizable value:
|
|
|
|
|
|
|
||||||
Tobacco
|
|
869,325
|
|
|
827,936
|
|
|
565,943
|
|
|||
Other
|
|
90,108
|
|
|
86,472
|
|
|
68,087
|
|
|||
Prepaid income taxes
|
|
21,110
|
|
|
24,448
|
|
|
16,713
|
|
|||
Other current assets
|
|
94,294
|
|
|
56,026
|
|
|
81,252
|
|
|||
Total current assets
|
|
1,571,853
|
|
|
1,640,980
|
|
|
1,561,399
|
|
|||
|
|
|
|
|
|
|
||||||
Property, plant and equipment
|
|
|
|
|
|
|
||||||
Land
|
|
22,822
|
|
|
22,914
|
|
|
22,852
|
|
|||
Buildings
|
|
268,702
|
|
|
266,107
|
|
|
266,802
|
|
|||
Machinery and equipment
|
|
612,722
|
|
|
599,897
|
|
|
597,213
|
|
|||
|
|
904,246
|
|
|
888,918
|
|
|
886,867
|
|
|||
Less accumulated depreciation
|
|
(587,465
|
)
|
|
(566,686
|
)
|
|
(569,527
|
)
|
|||
|
|
316,781
|
|
|
322,232
|
|
|
317,340
|
|
|||
Other assets
|
|
|
|
|
|
|
||||||
Goodwill and other intangibles
|
|
99,059
|
|
|
99,033
|
|
|
98,888
|
|
|||
Investments in unconsolidated affiliates
|
|
86,247
|
|
|
81,441
|
|
|
78,457
|
|
|||
Deferred income taxes
|
|
23,136
|
|
|
25,720
|
|
|
25,422
|
|
|||
Other noncurrent assets
|
|
42,434
|
|
|
49,107
|
|
|
41,899
|
|
|||
|
|
250,876
|
|
|
255,301
|
|
|
244,666
|
|
|||
|
|
|
|
|
|
|
||||||
Total assets
|
|
$
|
2,139,510
|
|
|
$
|
2,218,513
|
|
|
$
|
2,123,405
|
|
|
|
September 30,
|
|
September 30,
|
|
March 31,
|
||||||
|
|
2017
|
|
2016
|
|
2017
|
||||||
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
||||||
Notes payable and overdrafts
|
|
$
|
98,268
|
|
|
$
|
71,002
|
|
|
$
|
59,133
|
|
Accounts payable and accrued expenses
|
|
142,337
|
|
|
133,133
|
|
|
153,515
|
|
|||
Accounts payable—unconsolidated affiliates
|
|
56
|
|
|
—
|
|
|
7,231
|
|
|||
Customer advances and deposits
|
|
16,807
|
|
|
37,334
|
|
|
11,007
|
|
|||
Accrued compensation
|
|
19,509
|
|
|
18,885
|
|
|
32,007
|
|
|||
Income taxes payable
|
|
3,935
|
|
|
1,240
|
|
|
5,103
|
|
|||
Current portion of long-term debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total current liabilities
|
|
280,912
|
|
|
261,594
|
|
|
267,996
|
|
|||
|
|
|
|
|
|
|
||||||
Long-term debt
|
|
368,909
|
|
|
368,556
|
|
|
368,733
|
|
|||
Pensions and other postretirement benefits
|
|
74,636
|
|
|
80,005
|
|
|
80,689
|
|
|||
Other long-term liabilities
|
|
31,338
|
|
|
41,413
|
|
|
31,424
|
|
|||
Deferred income taxes
|
|
54,733
|
|
|
28,047
|
|
|
47,985
|
|
|||
Total liabilities
|
|
810,528
|
|
|
779,615
|
|
|
796,827
|
|
|||
|
|
|
|
|
|
|
||||||
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 at September 30, 2016, and none at March 31, 2017)
|
|
—
|
|
|
211,562
|
|
|
—
|
|
|||
Common stock, no par value, 100,000,000 shares authorized 25,114,349 shares issued and outstanding (22,783,633 at September 30, 2016, and 25,274,506 at March 31, 2017)
|
|
320,121
|
|
|
210,569
|
|
|
321,207
|
|
|||
Retained earnings
|
|
1,027,147
|
|
|
1,054,004
|
|
|
1,034,841
|
|
|||
Accumulated other comprehensive loss
|
|
(58,887
|
)
|
|
(73,579
|
)
|
|
(69,559
|
)
|
|||
Total Universal Corporation shareholders' equity
|
|
1,288,381
|
|
|
1,402,556
|
|
|
1,286,489
|
|
|||
Noncontrolling interests in subsidiaries
|
|
40,601
|
|
|
36,342
|
|
|
40,089
|
|
|||
Total shareholders' equity
|
|
1,328,982
|
|
|
1,438,898
|
|
|
1,326,578
|
|
|||
|
|
|
|
|
|
|
||||||
Total liabilities and shareholders' equity
|
|
$
|
2,139,510
|
|
|
$
|
2,218,513
|
|
|
$
|
2,123,405
|
|
|
|
Six Months Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(Unaudited)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income
|
|
$
|
31,627
|
|
|
$
|
18,994
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
17,485
|
|
|
17,324
|
|
||
Net provision for losses (recoveries) on advances and guaranteed loans to suppliers
|
|
937
|
|
|
(2,038
|
)
|
||
Foreign currency remeasurement (gain) loss, net
|
|
(3,944
|
)
|
|
11,119
|
|
||
Restructuring and impairment costs
|
|
—
|
|
|
3,682
|
|
||
Other, net
|
|
8,610
|
|
|
(1,108
|
)
|
||
Changes in operating assets and liabilities, net
|
|
(278,560
|
)
|
|
(25,548
|
)
|
||
Net cash provided (used) by operating activities
|
|
(223,845
|
)
|
|
22,425
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Purchase of property, plant and equipment
|
|
(14,769
|
)
|
|
(17,567
|
)
|
||
Proceeds from sale of property, plant and equipment
|
|
3,273
|
|
|
447
|
|
||
Net cash used by investing activities
|
|
(11,496
|
)
|
|
(17,120
|
)
|
||
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Issuance (repayment) of short-term debt, net
|
|
36,085
|
|
|
5,210
|
|
||
Dividends paid to noncontrolling interests
|
|
(1,260
|
)
|
|
(1,260
|
)
|
||
Repurchase of common stock
|
|
(12,639
|
)
|
|
—
|
|
||
Dividends paid on convertible perpetual preferred stock
|
|
—
|
|
|
(7,374
|
)
|
||
Dividends paid on common stock
|
|
(27,324
|
)
|
|
(24,106
|
)
|
||
Other
|
|
(2,828
|
)
|
|
(2,245
|
)
|
||
Net cash used by financing activities
|
|
(7,966
|
)
|
|
(29,775
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash
|
|
517
|
|
|
(83
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(242,790
|
)
|
|
(24,553
|
)
|
||
Cash and cash equivalents at beginning of year
|
|
283,993
|
|
|
319,447
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
|
$
|
41,203
|
|
|
$
|
294,894
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(in thousands, except share and per share data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Basic Earnings Per Share
|
|
|
|
|
|
|
|
|
||||||||
Numerator for basic earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Universal Corporation
|
|
$
|
26,167
|
|
|
$
|
25,264
|
|
|
$
|
29,744
|
|
|
$
|
19,788
|
|
Less: Dividends on convertible perpetual preferred stock
|
|
—
|
|
|
(3,687
|
)
|
|
—
|
|
|
(7,374
|
)
|
||||
Earnings available to Universal Corporation common shareholders for calculation of basic earnings per share
|
|
26,167
|
|
|
21,577
|
|
|
29,744
|
|
|
12,414
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
25,334,661
|
|
|
22,777,394
|
|
|
25,370,783
|
|
|
22,755,927
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
1.03
|
|
|
$
|
0.95
|
|
|
$
|
1.17
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
||||||||
Numerator for diluted earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Earnings available to Universal Corporation common shareholders
|
|
$
|
26,167
|
|
|
$
|
21,577
|
|
|
$
|
29,744
|
|
|
$
|
12,414
|
|
Add: Dividends on convertible perpetual preferred stock (if conversion assumed)
|
|
—
|
|
|
3,687
|
|
|
—
|
|
|
—
|
|
||||
Earnings available to Universal Corporation common shareholders for calculation of diluted earnings per share
|
|
26,167
|
|
|
25,264
|
|
|
29,744
|
|
|
12,414
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Denominator for diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
25,334,661
|
|
|
22,777,394
|
|
|
25,370,783
|
|
|
22,755,927
|
|
||||
Effect of dilutive securities (if conversion or exercise assumed)
|
|
|
|
|
|
|
|
|
||||||||
Convertible perpetual preferred stock
|
|
—
|
|
|
4,883,372
|
|
|
—
|
|
|
—
|
|
||||
Employee share-based awards
|
|
211,885
|
|
|
307,390
|
|
|
218,375
|
|
|
317,414
|
|
||||
Denominator for diluted earnings per share
|
|
25,546,546
|
|
|
27,968,156
|
|
|
25,589,158
|
|
|
23,073,341
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
|
$
|
1.02
|
|
|
$
|
0.90
|
|
|
$
|
1.16
|
|
|
$
|
0.54
|
|
|
|
Six Months Ended September 30,
|
||
|
|
2016
|
||
Potentially dilutive securities
|
|
127,400
|
|
|
Weighted-average exercise price
|
|
$
|
62.66
|
|
|
|
Six Months Ended September 30,
|
||||||
(in millions of dollars)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Tobacco purchases
|
|
$
|
19.4
|
|
|
$
|
9.7
|
|
Processing costs
|
|
7.3
|
|
|
2.7
|
|
||
Total
|
|
$
|
26.7
|
|
|
$
|
12.4
|
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Cash Flow Hedges - Interest Rate Swap Agreements
|
|
|
|
|
|
|
|
|
||||||||
Derivative
|
|
|
|
|
|
|
|
|
||||||||
Effective Portion of Hedge
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recorded in accumulated other comprehensive loss
|
|
$
|
86
|
|
|
$
|
2,012
|
|
|
$
|
(1,426
|
)
|
|
$
|
(2,392
|
)
|
Gain (loss) reclassified from accumulated other comprehensive loss into earnings
|
|
$
|
(353
|
)
|
|
$
|
(1,055
|
)
|
|
$
|
(917
|
)
|
|
$
|
(2,148
|
)
|
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 loan
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Cash Flow Hedges - Forward Foreign Currency Exchange Contracts
|
|
|
|
|
|
|
|
|
||||||||
Derivative
|
|
|
|
|
|
|
|
|
||||||||
Effective Portion of Hedge
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recorded in accumulated other comprehensive loss
|
|
$
|
491
|
|
|
$
|
—
|
|
|
$
|
(1,101
|
)
|
|
$
|
453
|
|
Gain (loss) reclassified from accumulated other comprehensive loss into earnings
|
|
$
|
(440
|
)
|
|
$
|
654
|
|
|
$
|
(442
|
)
|
|
$
|
668
|
|
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
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
246
|
|
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
|
|
$
|
(140
|
)
|
|
$
|
113
|
|
|
$
|
(703
|
)
|
|
$
|
(1,356
|
)
|
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
|
|
Balance
Sheet
Location
|
|
Fair Value as of
|
||||||||||||||||||||
(in thousands of dollars)
|
|
|
Sept. 30, 2017
|
|
Sept. 30, 2016
|
|
March 31, 2017
|
|
|
Sept. 30, 2017
|
|
Sept. 30, 2016
|
|
March 31, 2017
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swap agreements
|
|
Other
non-current
assets
|
|
$
|
1,640
|
|
|
$
|
—
|
|
|
$
|
2,149
|
|
|
Other
long-term
liabilities
|
|
$
|
—
|
|
|
$
|
11,010
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Forward foreign currency exchange contracts
|
|
Other
current
assets
|
|
—
|
|
|
—
|
|
|
56
|
|
|
Accounts
payable and
accrued
expenses
|
|
—
|
|
|
—
|
|
|
55
|
|
||||||
Total
|
|
|
|
$
|
1,640
|
|
|
$
|
—
|
|
|
$
|
2,205
|
|
|
|
|
$
|
—
|
|
|
$
|
11,010
|
|
|
$
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward foreign currency exchange contracts
|
|
Other
current
assets
|
|
$
|
394
|
|
|
$
|
140
|
|
|
$
|
917
|
|
|
Accounts
payable and
accrued
expenses
|
|
$
|
248
|
|
|
$
|
1,554
|
|
|
$
|
120
|
|
Total
|
|
|
|
$
|
394
|
|
|
$
|
140
|
|
|
$
|
917
|
|
|
|
|
$
|
248
|
|
|
$
|
1,554
|
|
|
$
|
120
|
|
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.
|
|
|
September 30, 2017
|
||||||||||||||||||
|
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
(in thousands of dollars)
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
|
$
|
1,622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,622
|
|
Trading securities associated with deferred compensation plans
|
|
—
|
|
|
17,386
|
|
|
—
|
|
|
—
|
|
|
17,386
|
|
|||||
Interest rate swap agreements
|
|
—
|
|
|
—
|
|
|
1,640
|
|
|
—
|
|
|
1,640
|
|
|||||
Forward foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
394
|
|
|
—
|
|
|
394
|
|
|||||
Total financial assets measured and reported at fair value
|
|
$
|
1,622
|
|
|
$
|
17,386
|
|
|
$
|
2,034
|
|
|
$
|
—
|
|
|
$
|
21,042
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Guarantees of bank loans to tobacco growers
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
970
|
|
|
$
|
970
|
|
Forward foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|
248
|
|
|||||
Total financial liabilities measured and reported at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
248
|
|
|
$
|
970
|
|
|
$
|
1,218
|
|
|
|
September 30, 2016
|
||||||||||||||||||
|
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
(in thousands of dollars)
|
|
NAV
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
|
$
|
136,879
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136,879
|
|
Trading securities associated with deferred compensation plans
|
|
—
|
|
|
17,310
|
|
|
—
|
|
|
—
|
|
|
17,310
|
|
|||||
Forward foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
|||||
Total financial assets measured and reported at fair value
|
|
$
|
136,879
|
|
|
$
|
17,310
|
|
|
$
|
140
|
|
|
$
|
—
|
|
|
$
|
154,329
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Guarantees of bank loans to tobacco growers
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,722
|
|
|
$
|
1,722
|
|
Interest rate swap agreements
|
|
—
|
|
|
—
|
|
|
11,010
|
|
|
—
|
|
|
11,010
|
|
|||||
Forward foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
1,554
|
|
|
—
|
|
|
1,554
|
|
|||||
Total financial liabilities measured and reported at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,564
|
|
|
$
|
1,722
|
|
|
$
|
14,286
|
|
|
|
March 31, 2017
|
||||||||||||||||||
|
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
(in thousands of dollars)
|
|
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
|
|
|
|
Six Months Ended September 30,
|
||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Balance at beginning of year
|
|
$
|
1,177
|
|
|
$
|
1,628
|
|
Payments under the guarantees and transfers to allowance for loss on direct loans to farmers (removal of prior crop year loans from portfolio)
|
|
(1,169
|
)
|
|
(1,848
|
)
|
||
Provision for loss or transfers from allowance for loss on direct loans to farmers (addition of current crop year loans)
|
|
960
|
|
|
1,756
|
|
||
Change in discount rate and estimated collection period
|
|
11
|
|
|
26
|
|
||
Currency remeasurement
|
|
(9
|
)
|
|
160
|
|
||
Balance at end of period
|
|
$
|
970
|
|
|
$
|
1,722
|
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
Three Months Ended September 30,
|
|
Three Months Ended September 30,
|
||||||||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
1,318
|
|
|
$
|
1,359
|
|
|
$
|
65
|
|
|
$
|
74
|
|
Interest cost
|
|
2,439
|
|
|
2,467
|
|
|
386
|
|
|
383
|
|
||||
Expected return on plan assets
|
|
(3,717
|
)
|
|
(3,589
|
)
|
|
(22
|
)
|
|
(11
|
)
|
||||
Net amortization and deferral
|
|
815
|
|
|
838
|
|
|
(71
|
)
|
|
(100
|
)
|
||||
Net periodic benefit cost
|
|
$
|
855
|
|
|
$
|
1,075
|
|
|
$
|
358
|
|
|
$
|
346
|
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
Six Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
2,629
|
|
|
$
|
2,720
|
|
|
$
|
129
|
|
|
$
|
147
|
|
Interest cost
|
|
4,873
|
|
|
4,936
|
|
|
769
|
|
|
758
|
|
||||
Expected return on plan assets
|
|
(7,434
|
)
|
|
(7,178
|
)
|
|
(44
|
)
|
|
(22
|
)
|
||||
Net amortization and deferral
|
|
1,630
|
|
|
1,676
|
|
|
(142
|
)
|
|
(200
|
)
|
||||
Net periodic benefit cost
|
|
$
|
1,698
|
|
|
$
|
2,154
|
|
|
$
|
712
|
|
|
$
|
683
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
RSUs:
|
|
|
|
|
||||
Number granted
|
|
59,550
|
|
|
63,425
|
|
||
Grant date fair value
|
|
$
|
66.05
|
|
|
$
|
55.93
|
|
|
|
|
|
|
||||
PSAs:
|
|
|
|
|
||||
Number granted
|
|
39,100
|
|
|
54,675
|
|
||
Grant date fair value
|
|
$
|
60.37
|
|
|
$
|
49.17
|
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
SALES AND OTHER OPERATING REVENUES
|
|
|
|
|
|
|
|
|
||||||||
Flue-Cured and Burley Leaf Tobacco Operations:
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
$
|
58,668
|
|
|
$
|
80,789
|
|
|
$
|
111,992
|
|
|
$
|
153,471
|
|
Other Regions
(1)
|
|
381,164
|
|
|
318,576
|
|
|
565,576
|
|
|
496,592
|
|
||||
Subtotal
|
|
439,832
|
|
|
399,365
|
|
|
677,568
|
|
|
650,063
|
|
||||
Other Tobacco Operations
(2)
|
|
48,416
|
|
|
57,577
|
|
|
95,302
|
|
|
102,354
|
|
||||
Consolidated sales and other operating revenue
|
|
$
|
488,248
|
|
|
$
|
456,942
|
|
|
$
|
772,870
|
|
|
$
|
752,417
|
|
|
|
|
|
|
|
|
|
|
||||||||
OPERATING INCOME (LOSS)
|
|
|
|
|
|
|
|
|
||||||||
Flue-Cured and Burley Leaf Tobacco Operations:
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
$
|
7,899
|
|
|
$
|
13,531
|
|
|
$
|
10,264
|
|
|
$
|
20,379
|
|
Other Regions
(1)
|
|
37,516
|
|
|
32,342
|
|
|
41,593
|
|
|
15,325
|
|
||||
Subtotal
|
|
45,415
|
|
|
45,873
|
|
|
51,857
|
|
|
35,704
|
|
||||
Other Tobacco Operations
(2)
|
|
227
|
|
|
2,397
|
|
|
(95
|
)
|
|
4,434
|
|
||||
Segment operating income
|
|
45,642
|
|
|
48,270
|
|
|
51,762
|
|
|
40,138
|
|
||||
Deduct: Equity in pretax earnings of unconsolidated affiliates
(3)
|
|
(667
|
)
|
|
(1,260
|
)
|
|
(232
|
)
|
|
(1,130
|
)
|
||||
Restructuring and impairment costs
(4)
|
|
—
|
|
|
(3,682
|
)
|
|
—
|
|
|
(3,682
|
)
|
||||
Consolidated operating income
|
|
$
|
44,975
|
|
|
$
|
43,328
|
|
|
$
|
51,530
|
|
|
$
|
35,326
|
|
(1)
|
Includes South America, Africa, Europe, and Asia regions, as well as inter-region eliminations.
|
(2)
|
Includes Dark Air-Cured, Special Services, and Oriental, as well as inter-company eliminations. Sales and other operating revenues for this reportable segment include limited 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 an unconsolidated affiliate.
|
(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 and comprehensive 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 and comprehensive income.
|
|
|
Six Months Ended September 30,
|
||||||
(in thousands of dollars)
|
|
2017
|
|
2016
|
||||
Foreign currency translation:
|
|
|
|
|
||||
Balance at beginning of year
|
|
$
|
(33,138
|
)
|
|
$
|
(26,992
|
)
|
Other comprehensive income (loss) attributable to Universal Corporation:
|
|
|
|
|
||||
Net gain (loss) on foreign currency translation (net of tax (expense) benefit of $(4,874) and $1,249)
|
|
9,053
|
|
|
(2,319
|
)
|
||
Less: Net loss on foreign currency translation attributable to noncontrolling interests
|
|
111
|
|
|
444
|
|
||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes
|
|
9,164
|
|
|
(1,875
|
)
|
||
Balance at end of period
|
|
$
|
(23,974
|
)
|
|
$
|
(28,867
|
)
|
|
|
|
|
|
||||
Foreign currency hedge:
|
|
|
|
|
||||
Balance at beginning of year
|
|
$
|
(258
|
)
|
|
$
|
675
|
|
Other comprehensive income (loss) attributable to Universal Corporation:
|
|
|
|
|
||||
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(573) and $58)
|
|
1,064
|
|
|
(107
|
)
|
||
Reclassification of (gain) loss to earnings (net of tax expense of $71 and $189)
(1)
|
|
(132
|
)
|
|
(351
|
)
|
||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes
|
|
932
|
|
|
(458
|
)
|
||
Balance at end of period
|
|
$
|
674
|
|
|
$
|
217
|
|
|
|
|
|
|
||||
Interest rate hedge:
|
|
|
|
|
||||
Balance at beginning of year
|
|
$
|
1,398
|
|
|
$
|
(6,997
|
)
|
Other comprehensive income (loss) attributable to Universal Corporation:
|
|
|
|
|
||||
Net gain (loss) on derivative instruments (net of tax benefit of $499 and $837)
|
|
(926
|
)
|
|
(1,556
|
)
|
||
Reclassification of loss to earnings (net of tax benefit of $(321) and $(752))
(2)
|
|
596
|
|
|
1,397
|
|
||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes
|
|
(330
|
)
|
|
(159
|
)
|
||
Balance at end of period
|
|
$
|
1,068
|
|
|
$
|
(7,156
|
)
|
|
|
|
|
|
||||
Pension and other postretirement benefit plans:
|
|
|
|
|
||||
Balance at beginning of year
|
|
$
|
(37,561
|
)
|
|
$
|
(39,036
|
)
|
Other comprehensive income (loss) attributable to Universal Corporation:
|
|
|
|
|
||||
Amortization included in earnings (net of tax benefit of $(488) and $(680))
(3)
|
|
906
|
|
|
1,263
|
|
||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes
|
|
906
|
|
|
1,263
|
|
||
Balance at end of period
|
|
$
|
(36,655
|
)
|
|
$
|
(37,773
|
)
|
|
|
|
|
|
||||
Total accumulated other comprehensive loss at end of period
|
|
$
|
(58,887
|
)
|
|
$
|
(73,579
|
)
|
(1)
|
Gain (loss) on foreign currency cash flow hedges related to forecast purchases of tobacco is reclassified from accumulated other comprehensive income (loss) to cost of goods sold when the tobacco is sold to customers. See Note 7 for additional information.
|
(2)
|
Gain (loss) on interest rate cash flow hedges is reclassified from accumulated other comprehensive income (loss) to interest expense when the related interest payments are made on the underlying debt or upon termination of the interest rate swap agreements prior to their scheduled maturity dates. See Note 7 for additional information.
|
(3)
|
This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 9 for additional information.
|
|
|
Six Months Ended September 30, 2017
|
|
Six Months Ended September 30, 2016
|
||||||||||||||||||||
(in thousands of dollars)
|
|
Universal Corporation
|
|
Non-controlling Interests
|
|
Total
|
|
Universal Corporation
|
|
Non-controlling Interests
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of year
|
|
$
|
1,286,489
|
|
|
$
|
40,089
|
|
|
$
|
1,326,578
|
|
|
$
|
1,414,222
|
|
|
$
|
38,840
|
|
|
$
|
1,453,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Repurchase of common stock
|
|
(2,790
|
)
|
|
—
|
|
|
(2,790
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Accrual of stock-based compensation
|
|
4,181
|
|
|
—
|
|
|
4,181
|
|
|
3,535
|
|
|
—
|
|
|
3,535
|
|
||||||
Withholding of shares from stock-based compensation for grantee income taxes
|
|
(2,828
|
)
|
|
—
|
|
|
(2,828
|
)
|
|
(2,245
|
)
|
|
—
|
|
|
(2,245
|
)
|
||||||
Dividend equivalents on RSUs
|
|
351
|
|
|
—
|
|
|
351
|
|
|
333
|
|
|
—
|
|
|
333
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in retained earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
29,744
|
|
|
1,883
|
|
|
31,627
|
|
|
19,788
|
|
|
(794
|
)
|
|
18,994
|
|
||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Series B 6.75% convertible perpetual preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,374
|
)
|
|
—
|
|
|
(7,374
|
)
|
||||||
Common stock
|
|
(27,238
|
)
|
|
—
|
|
|
(27,238
|
)
|
|
(24,141
|
)
|
|
—
|
|
|
(24,141
|
)
|
||||||
Repurchase of common stock
|
|
(9,849
|
)
|
|
—
|
|
|
(9,849
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividend equivalents on RSUs
|
|
(351
|
)
|
|
—
|
|
|
(351
|
)
|
|
(333
|
)
|
|
—
|
|
|
(333
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
10,672
|
|
|
(111
|
)
|
|
10,561
|
|
|
(1,229
|
)
|
|
(444
|
)
|
|
(1,673
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dividends paid to noncontrolling shareholders
|
|
—
|
|
|
(1,260
|
)
|
|
(1,260
|
)
|
|
—
|
|
|
(1,260
|
)
|
|
(1,260
|
)
|
||||||
Balance at end of period
|
|
$
|
1,288,381
|
|
|
$
|
40,601
|
|
|
$
|
1,328,982
|
|
|
$
|
1,402,556
|
|
|
$
|
36,342
|
|
|
$
|
1,438,898
|
|
Period
(1)
|
|
Total Number of Shares Repurchased
|
|
Average Price Paid Per Share
(2)
|
|
Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs
(3)
|
|
Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(3)
|
||||||
|
|
|
|
|
|
|
|
|
||||||
July1-31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
100,000,000
|
|
August 1-31, 2017
|
|
220,000
|
|
|
57.45
|
|
|
220,000
|
|
|
87,361,193
|
|
||
September 1-30, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87,361,193
|
|
||
Total
|
|
220,000
|
|
|
$
|
—
|
|
|
220,000
|
|
|
$
|
87,361,193
|
|
(1)
|
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.
|
(2)
|
Amounts listed for average price paid per share include broker commissions paid in the transactions.
|
(3)
|
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 authorized 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. This stock repurchase program was replaced in November 2017 when our Board of Directors approved a new authorization for the purchase of up to $100 million in our securities through November 15, 2019, or when we have exhausted the funds authorized for the program.
|
12
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101
|
|
Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language)).*
|
|
|
|
|
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Consolidated Statements of Income and Comprehensive Income for the three and six months ended September 30, 2017 and 2016, (ii) the Consolidated Balance Sheets at September 30, 2017, September 30, 2016, and March 31, 2017, (iii) the Consolidated Statements of Cash Flows for the six months ended September 30, 2017 and 2016, and (iv) the Notes to Consolidated Financial Statements.
|
Date:
|
November 7, 2017
|
|
UNIVERSAL CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
/s/ David C. Moore
|
|
|
|
David C. Moore, Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Robert M. Peebles
|
|
|
|
Robert M. Peebles, Vice President and Controller
|
|
|
|
(Principal Accounting Officer)
|
Exhibit No.
|
|
Description
|
|
|
|
12
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101
|
|
Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language)).*
|
|
|
|
|
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Consolidated Statements of Income and Comprehensive Income for the three and six months ended September 30, 2017 and 2016, (ii) the Consolidated Balance Sheets at September 30, 2017, September 30, 2016, and March 31, 2017, (iii) the Consolidated Statements of Cash Flows for the six months ended September 30, 2017 and 2016, and (iv) the Notes to Consolidated Financial Statements.
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
(in thousands, except for ratios)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings
|
|
|
|
|
|
|
|
|
||||||||
Pretax income before equity in pretax earnings of unconsolidated affiliates
|
|
$
|
41,537
|
|
|
$
|
39,264
|
|
|
$
|
44,830
|
|
|
$
|
27,571
|
|
Fixed charges (net of interest capitalized)
|
|
4,416
|
|
|
4,660
|
|
|
8,734
|
|
|
9,191
|
|
||||
Distribution of earnings from unconsolidated affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Earnings
|
|
$
|
45,953
|
|
|
$
|
43,924
|
|
|
$
|
53,564
|
|
|
$
|
36,762
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed Charges and Preference Dividends
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
$
|
3,964
|
|
|
$
|
4,335
|
|
|
$
|
7,896
|
|
|
$
|
8,389
|
|
Interest capitalized
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest component of rent expense
|
|
452
|
|
|
325
|
|
|
838
|
|
|
802
|
|
||||
Total Fixed Charges
|
|
4,416
|
|
|
4,660
|
|
|
8,734
|
|
|
9,191
|
|
||||
Dividends on convertible perpetual preferred stock (pretax)
(1)
|
|
—
|
|
|
5,673
|
|
|
—
|
|
|
11,345
|
|
||||
Total Fixed Charges and Preference Dividends
|
|
$
|
4,416
|
|
|
$
|
10,333
|
|
|
$
|
8,734
|
|
|
$
|
20,536
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ratio of Earnings to Fixed Charges
|
|
10.41
|
|
|
9.43
|
|
|
6.13
|
|
|
4.00
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Ratio of Earnings to Combined Fixed Charges and Preference Dividends
|
|
10.41
|
|
|
4.25
|
|
|
6.13
|
|
|
1.79
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Universal Corporation for the period ended
September 30, 2017
;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
Date: November 7, 2017
|
/s/ George C. Freeman, III
|
|
George C. Freeman, III
|
|
Chairman, President, and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Universal Corporation for the period ended
September 30, 2017
;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
Date: November 7, 2017
|
/s/ David C. Moore
|
|
David C. Moore
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 7, 2017
|
/s/ George C. Freeman, III
|
|
George C. Freeman, III
|
|
Chairman, President, and Chief Executive Officer
|
|
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 7, 2017
|
/s/ David C. Moore
|
|
David C. Moore
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|