Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jun. 30, 2019 | Aug. 02, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 001-00652 | |
Document Fiscal Year Focus | 2020 | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 54-0414210 | |
Entity Address, Address Line One | 9201 Forest Hill Avenue, | |
Entity Address, City or Town | Richmond, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23235 | |
City Area Code | 804 | |
Local Phone Number | 359-9311 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | UVV | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | UNIVERSAL CORPORATION | |
Entity Central Index Key | 0000102037 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,971,489 |
Consolidated Statements Of Inco
Consolidated Statements Of Income And Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | ||
Sales and other operating revenues | $ 296,915 | $ 379,719 | |
Costs and expenses | |||
Cost of goods sold | 238,265 | 307,498 | |
Selling, general and administrative expenses | 51,136 | 63,852 | |
Operating income | 7,514 | 8,369 | |
Equity in pretax earnings of unconsolidated affiliates | [1] | 40 | 539 |
Other non-operating income (expense) | 627 | 190 | |
Interest income | 1,008 | 512 | |
Interest expense | 4,028 | 3,949 | |
Income before income taxes and other items | 5,161 | 5,661 | |
Income taxes | 4,266 | (5,399) | |
Net income | 895 | 11,060 | |
Less: net (income) loss attributable to noncontrolling interests in subsidiaries | 1,177 | 2,119 | |
Net income attributable to Universal Corporation | $ 2,072 | $ 13,179 | |
Earnings per share: | |||
Basic | $ 0.08 | $ 0.53 | |
Diluted | $ 0.08 | $ 0.52 | |
Weighted average common shares outstanding: | |||
Basic | 25,158,369 | 25,064,420 | |
Diluted | 25,284,258 | 25,284,700 | |
Total comprehensive income (loss) | |||
Total comprehensive income (loss), net of income taxes | $ (3,452) | $ (2,477) | |
Less: comprehensive (income) loss attributable to noncontrolling interests | 1,054 | 2,278 | |
Comprehensive income (loss) attributable to Universal Corporation | $ (2,398) | $ (199) | |
Dividends declared per common share | $ 0.76 | $ 0.75 | |
[1] | 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 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
ASSETS | |||
Cash and cash equivalents | $ 167,996 | $ 297,556 | $ 66,008 |
Accounts receivable, net | 217,905 | 368,110 | 247,812 |
Advances to suppliers, net | 80,032 | 106,850 | 70,731 |
Accounts receivable—unconsolidated affiliates | 63,388 | 30,951 | 101,483 |
Inventories—at lower of cost or net realizable value: | |||
Tobacco | 898,409 | 629,606 | 947,520 |
Other | 77,654 | 69,611 | 73,358 |
Prepaid income taxes | 20,985 | 14,264 | 20,242 |
Other current assets | 75,689 | 71,197 | 71,511 |
Total current assets | 1,602,058 | 1,588,145 | 1,598,665 |
Property, plant and equipment | |||
Land | 22,785 | 22,952 | 23,041 |
Buildings | 262,688 | 261,976 | 268,789 |
Machinery and equipment | 611,209 | 608,191 | 636,425 |
Total property, plant and equipment | 896,682 | 893,119 | 928,255 |
Less accumulated depreciation | (597,257) | (590,625) | (604,765) |
Property, plant and equipment, net | 299,425 | 302,494 | 323,490 |
Other assets | |||
Operating lease right-of-use assets | 34,472 | 0 | 0 |
Goodwill and other intangibles | 98,029 | 97,994 | 98,892 |
Investments in unconsolidated affiliates | 80,985 | 80,482 | 83,327 |
Deferred income taxes | 15,582 | 13,357 | 19,162 |
Other noncurrent assets | 47,333 | 50,712 | 45,632 |
Other noncurrent assets | 276,401 | 242,545 | 247,013 |
Total assets | 2,177,884 | 2,133,184 | 2,169,168 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Notes payable and overdrafts | 73,640 | 54,023 | 73,291 |
Accounts payable and accrued expenses | 179,297 | 145,506 | 199,214 |
Accounts payable—unconsolidated affiliates | 10 | 106 | 0 |
Customer advances and deposits | 4,397 | 21,675 | 3,414 |
Accrued compensation | 23,084 | 31,372 | 20,969 |
Income taxes payable | 1,576 | 1,066 | 6,813 |
Current portion of operating lease liabilities | 8,938 | 0 | 0 |
Current portion of long-term debt | 0 | 0 | 0 |
Total current liabilities | 290,942 | 253,748 | 303,701 |
Long-term debt | 368,568 | 368,503 | 369,174 |
Pensions and other postretirement benefits | 59,364 | 59,257 | 60,360 |
Long-term operating lease liabilities | 23,098 | 0 | 0 |
Other long-term liabilities | 52,387 | 43,214 | 45,628 |
Deferred income taxes | 31,447 | 28,584 | 28,033 |
Total liabilities | 825,806 | 753,306 | 806,896 |
Shareholders' equity | |||
Series A Junior Participating Preferred Stock, no par value, 500,000 shares authorized, none issued or outstanding | 0 | 0 | 0 |
Common stock, no par value, 100,000,000 shares authorized 24,971,489 shares issued and outstanding (24,957,418 at June 30, 2018 and 24,989,946 at March 31, 2019) | 325,515 | 326,600 | 322,889 |
Retained earnings | 1,084,987 | 1,106,178 | 1,072,230 |
Accumulated other comprehensive loss | (100,161) | (95,691) | (73,442) |
Total Universal Corporation shareholders' equity | 1,310,341 | 1,337,087 | 1,321,677 |
Noncontrolling interests in subsidiaries | 41,737 | 42,791 | 40,595 |
Total shareholders' equity | 1,352,078 | 1,379,878 | 1,362,272 |
Total liabilities and shareholders' equity | $ 2,177,884 | $ 2,133,184 | $ 2,169,168 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Common Stock [Member] | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 24,971,489 | 24,989,946 | 24,957,418 |
Common stock, shares outstanding | 24,971,489 | 24,989,946 | 24,957,418 |
Series A Junior Participating Preferred Stock [Member] | |||
Preferred stock, shares authorized | 500,000 | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 895 | $ 11,060 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Depreciation | 9,067 | 8,645 |
Net provision for losses (recoveries) on advances and guaranteed loans to suppliers | (165) | (797) |
Foreign currency remeasurement (gain) loss, net | (1,497) | (943) |
Other, net | 3,780 | (6,928) |
Changes in operating assets and liabilities, net | (128,819) | (179,366) |
Net cash used by operating activities | (116,739) | (168,329) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property, plant and equipment | (5,679) | (11,018) |
Proceeds from sale of property, plant and equipment | 226 | 589 |
Net cash used by investing activities | (5,453) | (10,429) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance (repayment) of short-term debt, net | 19,257 | 28,978 |
Repurchase of common stock | (5,214) | (1,443) |
Dividends paid on common stock | (18,742) | (13,712) |
Other | (2,883) | (2,656) |
Net cash provided (used) by financing activities | (7,582) | 11,167 |
Effect of exchange rate changes on cash | 214 | (529) |
Net decrease in cash and cash equivalents | (129,560) | (168,120) |
Cash and cash equivalents at beginning of year | 297,556 | 234,128 |
Cash and cash equivalents at end of period | $ 167,996 | $ 66,008 |
Basis Of Presentation
Basis Of Presentation | 3 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | BASIS OF PRESENTATION Universal Corporation, which together with its subsidiaries is referred to herein as “Universal” or the “Company,” is the leading global leaf tobacco supplier. Because of the seasonal nature of the Company’s business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year. All adjustments necessary to state fairly the results for the period have been included and were of a normal recurring nature. Certain amounts in prior year statements have been reclassified to conform to the current year presentation. This Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019. |
Accounting Pronouncements
Accounting Pronouncements | 3 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Pronouncements | ACCOUNTING PRONOUNCEMENTS Recently Adopted Pronouncements The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) effective April 1, 2019, the beginning of the current fiscal year. For leases with fixed payment arrangements, ASU 2016-02 requires a lessee to recognize lease payment obligations as a lease liability and corresponding right-of-use asset in the balance sheet for the term of the lease. This guidance superseded Topic 840 “Leases.” The Company elected the practical expedient to not include leases with terms less than 12 months on the consolidated balance sheet. The Company elected the transition package of practical expedients that retained the historical lease identification, lease classification, and treatment of initial direct costs for leases prior to the adoption of ASU 2016-02. Additionally, as permitted under the new guidance the Company elected to not separate lease and non-lease components for certain classes of leased assets, including real estate. The Company elected the modified retrospective transition adoption method. Accordingly, on the date of adoption $36.6 million of operating lease right-of use assets and corresponding operating lease liabilities of $34.2 million were recognized on the Company's consolidated balance sheet. The adoption of ASU 2016-02 did not result in a cumulative-effect adjustment to retained earnings. The disclosures required for lease accounting under the new guidance are provided in Note 7. Pronouncements to be Adopted in Future Periods In January 2017, the FASB issued Accounting Standards Update No. 2017-04, "Intangibles - Goodwill and Other (Topic 350)" ("ASU 2017-04"). Under current accounting guidance, the fair value of a reporting unit to which a specific goodwill balance relates is first compared to its carrying value in the financial statements (Step 1). If that comparison indicates that the goodwill is impaired, an implied fair value for the goodwill must then be calculated by deducting the individual fair values of all other assets and liabilities, including any unrecognized intangible assets, from the total fair value of the reporting unit. ASU 2017-04 simplifies the accounting guidance by eliminating Step 2 from the goodwill impairment test and using the fair value of the reporting unit determined in Step 1 to measure the goodwill impairment loss. The updated guidance is effective for fiscal years beginning after December 15, 2019. The Company will be required to adopt ASU 2017-04 effective April 1, 2020, which is the beginning of its fiscal year ending March 31, 2021, although early adoption is permitted. The Company is currently evaluating the impact that the updated guidance will have on its consolidated financial statements. |
Revenue from Contract with Cust
Revenue from Contract with Customer Revenue from Contract with Customer | 3 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | REVENUE FROM CONTRACTS WITH CUSTOMERS The majority of the Company’s consolidated revenue consists of sales of processed leaf tobacco to customers. The Company also earns revenue from processing leaf tobacco owned by customers and from various other services provided to customers. Payment terms with customers vary depending on customer creditworthiness, product types, services provided, and other factors. Contract durations and payment terms for all revenue categories generally do not exceed one year. Therefore, the Company has applied a practical expedient to not adjust the transaction price for the effects of financing components, as the Company expects that the period from the time the revenue for a transaction is recognized to the time the customer pays for the related good or service transferred will be one year or less. Below is a description of the major revenue-generating categories from contracts with customers. Tobacco Sales The majority of the Company’s business involves purchasing leaf tobacco from farmers in the origins where it is grown, processing and packing the tobacco in its factories, and then transferring ownership and control of the tobacco to customers. On a much smaller basis, the Company also sources processed tobacco from third-party suppliers for resale to customers. The contracts for tobacco sales with customers create a performance obligation to transfer tobacco to the customer. Transaction prices for the sale of tobaccos are primarily based on negotiated fixed prices, but the Company does have a small number of cost-plus contracts with certain customers. Cost-plus arrangements provide the Company reimbursement of the cost to purchase and process the tobacco, plus a contractually agreed-upon profit margin. The Company utilizes the most likely amount methodology under the accounting guidance to recognize revenue for cost-plus arrangements with customers. Shipping and handling costs under tobacco sales contracts with customers are treated as fulfillment costs and included in the transaction price. Taxes assessed by government authorities on the sale of leaf tobacco products are excluded from the transaction price. At the point in time that the customer obtains control over the tobacco, which is typically aligned with physical shipment under the contractual terms with the customer, the Company completes its performance obligation and recognizes the revenue for the sale. Processing Revenue Processing and packing of customer-owned leaf tobacco is a short-duration process. Processing charges are primarily based on negotiated fixed prices per unit of weight processed. Under normal operating conditions, customer-owned raw tobacco that is placed into the production line exits as processed and packed tobacco within one hour and is then later transported to customer-designated storage facilities. The revenue for these services is recognized when the performance obligation is satisfied, which is generally when processing is completed. The Company’s operating history and contract analyses indicate that customer requirements for processed tobacco are consistently met upon completion of processing. Other Revenue From time to time, the Company enters into various arrangements with customers to provide other value-added services that may include blending, chemical and physical testing of tobacco, and service cutting for select manufacturers. These other arrangements are a much smaller portion of the Company’s business, are typically less frequent, and are separate and distinct contractual agreements from the Company’s tobacco sales or processing arrangements with customers. The transaction prices and timing of revenue recognition of these items are determined by the specifics of each contract. Disaggregation of Revenue from Contracts with Customers The following table disaggregates the Company’s revenue by significant revenue-generating category: Three Months Ended June 30, (in thousands of dollars) 2019 2018 Tobacco sales $ 268,057 $ 345,137 Processing revenue 18,434 21,707 Other sales and revenue from contracts with customers 9,410 8,126 Total revenue from contracts with customers 295,901 374,970 Other operating sales and revenues 1,014 4,749 Consolidated sales and other operating revenues $ 296,915 $ 379,719 Other operating sales and revenues consists principally of interest on advances to suppliers and dividend income from unconsolidated affiliates. |
Guarantees, Other Contingent Li
Guarantees, Other Contingent Liabilities, And Other Matters | 3 Months Ended |
Jun. 30, 2019 | |
Guarantees, Other Contingent Liabilities, And Other Matters [Abstract] | |
Guarantees, Other Contingent Liabilities, And Other Matters | GUARANTEES, OTHER CONTINGENT LIABILITIES, AND OTHER MATTERS Guarantees and Other Contingent Liabilities Guarantees of Bank Loans and Other Contingent Liabilities Guarantees of bank loans to tobacco growers for crop financing have long been industry practice in Brazil and support the farmers’ production of tobacco there. The Company's operating subsidiary in Brazil had guarantees outstanding at June 30, 2019 , all of which expire within one year. The subsidiary withholds payments due to the farmers on delivery of tobacco and forwards those payments to the third-party banks. Failure of farmers to deliver sufficient quantities of tobacco to the subsidiary to cover its obligations to the third-party banks could result in a liability for the subsidiary under the related guarantees; however, in that case, the subsidiary would have recourse against the farmers. The maximum potential amount of future payments that the Company’s subsidiary could be required to make at June 30, 2019 , was the face amount, $2 million including unpaid accrued interest ( $3 million at June 30, 2018 , and $17 million at March 31, 2019 ). The fair value of the guarantees was a liability of approximately $1 million at June 30, 2019 ( $1 million at June 30, 2018 , and $1 million at March 31, 2019 ). In addition to these guarantees, the Company has other contingent liabilities totaling approximately $1 million at June 30, 2019 , primarily related to outstanding letters of credit. Value-Added Tax Assessments in Brazil As further discussed below, the Company’s local operating subsidiaries pay significant amounts of value-added tax (“VAT”) in connection with their operations, which generate tax credits that they normally are entitled to recover through offset, refund, or sale to third parties. In Brazil, VAT is assessed at the state level when green tobacco is transferred between states. The Company’s operating subsidiary there pays VAT when tobaccos grown in the states of Santa Catarina and Parana are transferred to its factory in the state of Rio Grande do Sul for processing. The subsidiary has received assessments for additional VAT plus interest and penalties from tax authorities for the states of Santa Catarina and Parana based on audits of the subsidiary’s VAT filings for specified periods. In June 2011, tax authorities for the state of Santa Catarina issued assessments for tax, interest, and penalties for periods from 2006 through 2009 totaling approximately $12 million . In September 2014, tax authorities for the state of Parana issued an assessment for tax, interest, and penalties for periods from 2009 through 2014 totaling approximately $14 million . Those amounts are based on the exchange rate for the Brazilian currency at June 30, 2019 . Management of the operating subsidiary and outside counsel believe that errors were made by the tax authorities for both states in determining all or significant portions of these assessments and that various defenses support the subsidiary’s positions. With respect to the Santa Catarina assessments, the subsidiary took appropriate steps to contest the full amount of the claims. As of June 30, 2019 , a portion of the subsidiary’s arguments had been accepted, and the outstanding assessment had been reduced. The reduced assessment, together with the related accumulated interest through the end of the current reporting period, totaled approximately $12 million (at the June 30, 2019 exchange rate). The subsidiary is continuing to contest the full remaining amount of the assessment. While the range of reasonably possible loss is zero up to the full $12 million remaining assessment with interest, based on the strength of the subsidiary’s defenses, no loss within that range is considered probable at this time and no liability has been recorded at June 30, 2019 . With respect to the Parana assessment, management of the subsidiary and outside counsel challenged the full amount of the claim. A significant portion of the Parana assessment was based on positions taken by the tax authorities that management and outside counsel believe deviate significantly from the underlying statutes and relevant case law. In addition, under the law, the subsidiary’s tax filings for certain periods covered in the assessment were no longer open to any challenge by the tax authorities. In December 2015, the Parana tax authorities withdrew the initial claim and subsequently issued a new assessment covering the same tax periods. The new assessment totaled approximately $6 million at the June 30, 2019 exchange rate, reflecting a substantial reduction from the original $14 million assessment. Notwithstanding the reduction, management and outside counsel continue to believe that the new assessment is not supported by the underlying statutes and relevant case law and have challenged the full amount of the claim. The range of reasonably possible loss is considered to be zero up to the full $6 million assessment. However, based on the strength of the subsidiary's defenses, no loss within that range is considered probable at this time and no liability has been recorded at June 30, 2019 . In both states, the process for reaching a final resolution to the assessments is expected to be lengthy, and management is not currently able to predict when either case will be concluded. Should the subsidiary ultimately be required to pay any tax, interest, or penalties in either case, the portion paid for tax would generate VAT credits that the subsidiary may be able to recover. Tanzania Fair Competition Commission Proceeding In June 2012, the Company’s Tanzanian subsidiary, Tanzania Leaf Tobacco Company Ltd. (“TLTC”), entered into a two crop-year supply agreement for unprocessed “green” tobacco with a newly-formed Tanzanian subsidiary of one of the Company’s major customers. The agreement involved green tobacco purchases from four of the approximately 400 grower cooperatives in Tanzania, which allowed the customer and its Tanzanian subsidiary on a small test basis to evaluate whether it would be a viable alternative for the customer to establish its own vertically integrated supply operations in that market. Prior to that time, the customer’s subsidiary did not exist, and it only purchased processed Tanzanian tobacco from tobacco dealers in specified amounts and only for certain grades and stalk positions. In contrast, the agreement with TLTC required the customer’s subsidiary to purchase green tobacco on a “run of crop” basis. “Run of crop” requires the purchase of all green tobacco produced on the tobacco plant, regardless of grade or stalk position. The agreement, therefore, enabled the customer’s subsidiary on a small test basis to evaluate the quality of green tobacco purchased on a “run of crop” basis and to assess how such tobacco would be suited to the customer's tobacco requirements. The customer unilaterally elected to establish its own vertically integrated supply operations in Tanzania after the expiration of the agreement, and its subsidiary began purchasing green tobacco directly from Tanzanian grower cooperatives during the second crop year thereafter. Despite the pro-competitive object and effect of the agreement between TLTC and the customer’s subsidiary, in October 2016, the Tanzania Fair Competition Commission (“FCC”) notified TLTC and the customer’s subsidiary that it reviewed the agreement and provisionally concluded that it infringed Tanzania antitrust law by having the object and effect of preventing competition in the purchase of unprocessed green tobacco in the area in which the four grower cooperatives were located. The FCC also provisionally concluded that the Company’s U.S. subsidiary, Universal Leaf Tobacco Company, Inc. (“ULT”), and additional subsidiaries of the customer, were jointly and severally liable for the actions of TLTC and the customer’s Tanzanian subsidiary, respectively. TLTC and ULT submitted a written response contesting the FCC’s allegations, and on February 27, 2018, the FCC issued its decision to TLTC and ULT which ignored TLTC's and ULT's submissions and confirmed its initial conclusion that the agreement infringed Tanzanian antitrust law. In its decision, the FCC concluded incorrectly that the parties to the agreement unfairly benefited in the amount of $105 thousand . The FCC arbitrarily assessed a fine jointly against TLTC and ULT of approximately $197 million and a fine jointly against the customer’s Tanzanian subsidiary and another subsidiary of the customer exceeding $1 billion . TLTC and ULT have worked closely with expert legal advisors and economists on this matter. Based on these engagements and consultations, the Company firmly believes the FCC’s allegations are frivolous and clearly without merit or support from the facts, law or economic analysis. The Company further believes the FCC’s proceedings were rife with irregularities and did not comply with applicable legal and regulatory procedures with respect to this matter, including failing to establish jurisdiction over ULT or to offer a legal justification for including ULT in the proceeding. To the contrary, the Company believes the facts, law, and economic analysis clearly support the legality and pro-competitive nature of the agreement and support a proper conclusion that there was no infringement of Tanzania antitrust law, and the agreement had no negative impact on the Tanzania tobacco market. The Company further believes the FCC’s proposed fine is ludicrous, unwarranted, and contrary to Tanzania law. TLTC and ULT immediately appealed the FCC findings to the Tanzania Fair Competition Tribunal, which immediately stayed the execution of any FCC fines. The Company is unable to predict how long the appeal process will take; however, the Company believes it could last several years. At this time, the Company believes that the likelihood of incurring any material liability in this matter is remote, and no amount has been recorded. On January 22, 2019, the FCC delivered provisional findings regarding two new allegations of antitrust violations. In those two new provisional findings, the FCC has manufactured claims against ULT and ULT's subsidiaries in Tanzania, in addition to other parties in Tanzania. ULT and its Tanzania subsidiaries have already begun working closely with expert legal advisors on these matters and have prepared and submited to the FCC proper and comprehensive responses. Based on the legal consultations to date the Company firmly believes the FCC's new allegations are frivolous and clearly without merit and lack facts, law or economic analysis to support them. In one of the two new matters, based on the Company's review of the provisional findings and consultation with counsel, the Company believes the FCC is seeking an equally large, ludicrous, unwarranted, and unlawful fine as the one sought in the current matter. The FCC's motivations for initiating these additional, spurious allegations against the Company's subsidiaries are unclear. At this time, the Company is unable to predict how long it will take to defend against the new matters including, if necessary, to appeal any final FCC decisions; however, the Company believes it could last several years. At this time, the Company believes that the likelihood of incurring any material liability in the new matters is remote, and no amount has been recorded for either one. Other Legal and Tax Matters Various subsidiaries of the Company are involved in litigation and tax examinations incidental to their business activities. While the outcome of these matters cannot be predicted with certainty, management is vigorously defending the matters and does not currently expect that any of them will have a material adverse effect on the Company’s business or financial position. However, should one or more of these matters be resolved in a manner adverse to management’s current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material. Advances to Suppliers In many sourcing origins where the Company operates, it provides agronomy services and seasonal advances of seed, seedlings, fertilizer, and other supplies to tobacco farmers for crop production, or makes seasonal cash advances to farmers for the procurement of those inputs. These advances are short term, are repaid upon delivery of tobacco to the Company, and are reported in advances to suppliers in the consolidated balance sheets. In several origins, the Company has made long-term advances to tobacco farmers to finance curing barns and other farm infrastructure. In some years, due to low crop yields and other factors, individual farmers may not deliver sufficient volumes of tobacco to fully repay their seasonal advances, and the Company may extend repayment of those advances into future crop years. The long-term portion of advances is included in other noncurrent assets in the consolidated balance sheets. Both the current and the long-term portions of advances to suppliers are reported net of allowances recorded when the Company determines that amounts outstanding are not likely to be collected. Short-term and long-term advances to suppliers totaled $101 million at June 30, 2019 , $94 million at June 30, 2018 , and $129 million at March 31, 2019 . The related valuation allowances totaled $18 million at June 30, 2019 , $19 million at June 30, 2018 , and $18 million at March 31, 2019 , and were estimated based on the Company’s historical loss information and crop projections. The allowances were reduced by net recoveries of approximately $0.2 million and $0.8 million in the three -month periods ended June 30, 2019 and 2018 , respectively. These net provisions and recoveries are included in selling, general, and administrative expenses in the consolidated statements of income. Interest on advances is recognized in earnings upon the farmers’ delivery of tobacco in payment of principal and interest. Recoverable Value-Added Tax Credits In many foreign countries, the Company’s local operating subsidiaries pay significant amounts of value-added tax (“VAT”) on purchases of unprocessed and processed tobacco, crop inputs, packing materials, and various other goods and services. In some countries, VAT is a national tax, and in other countries it is assessed at the state level. Items subject to VAT vary from jurisdiction to jurisdiction, as do the rates at which the tax is assessed. When tobacco is sold to customers in the country of origin, the operating subsidiaries generally collect VAT on those sales. The subsidiaries are normally permitted to offset their VAT payments against the collections and remit only the incremental VAT collections to the tax authorities. When tobacco is sold for export, VAT is normally not assessed. In countries where tobacco sales are predominately for export markets, VAT collections generated on downstream sales are often not sufficient to fully offset the subsidiaries’ VAT payments. In those situations, unused VAT credits can accumulate. Some jurisdictions have procedures that allow companies to apply for refunds of unused VAT credits from the tax authorities, but the refund process often takes an extended period of time and it is not uncommon for refund applications to be challenged or rejected in part on technical grounds. Other jurisdictions may permit companies to sell or transfer unused VAT credits to third parties in private transactions, although approval for such transactions must normally be obtained from the tax authorities, limits on the amounts that can be transferred may be imposed, and the proceeds realized may be heavily discounted from the face value of the credits. Due to these factors, local operating subsidiaries in some countries can accumulate significant balances of VAT credits over time. The Company reviews these balances on a regular basis and records valuation allowances on the credits to reflect amounts that are not expected to be recovered, as well as discounts anticipated on credits that are expected to be sold or transferred. At June 30, 2019 , the aggregate balance of recoverable tax credits held by the Company’s subsidiaries totaled approximately $61 million ( $53 million at June 30, 2018 , and $53 million at March 31, 2019 ), and the related valuation allowances totaled approximately $18 million ( $16 million at June 30, 2018 , and $17 million at March 31, 2019 ). The net balances are reported in other current assets and other noncurrent assets in the consolidated balance sheets. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended June 30, (in thousands, except share and per share data) 2019 2018 Basic Earnings Per Share Numerator for basic earnings per share Net income attributable to Universal Corporation $ 2,072 $ 13,179 Denominator for basic earnings per share Weighted average shares outstanding 25,158,369 25,064,420 Basic earnings per share $ 0.08 $ 0.53 Diluted Earnings Per Share Numerator for diluted earnings per share Net income attributable to Universal Corporation $ 2,072 $ 13,179 Denominator for diluted earnings per share: Weighted average shares outstanding 25,158,369 25,064,420 Effect of dilutive securities Employee share-based awards 125,889 220,280 Denominator for diluted earnings per share 25,284,258 25,284,700 Diluted earnings per share $ 0.08 $ 0.52 |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company operates in the United States and many foreign countries and is subject to the tax laws of many jurisdictions. Changes in tax laws or the interpretation of tax laws can affect the Company’s earnings, as can the resolution of pending and contested tax issues. The Company's consolidated effective income tax rate is affected by a number of factors, including the mix of domestic and foreign earnings and the effect of exchange rate changes on deferred taxes. Effective tax rates also reflect the benefit of various tax planning opportunities, as well as the net effect of items that were accounted for on a discrete basis in each period. For the three months ended June 30, 2019 , the Company's consolidated effective income tax rate of 83% was affected by a $2.8 million net tax provision related to an unresolved tax matter at a foreign subsidiary. Without the discrete item for the unresolved tax matter, income taxes for the quarter would have been an expense of approximately $1.5 million , or a consolidated effective income tax rate of approximately 29% . For the three months ended June 30, 2018 , the Company reported a net tax benefit on pretax earnings due to a benefit from reversing a portion of the liability previously recorded for dividend withholding taxes on the cumulative retained earnings of a foreign subsidiary. The reversal followed the resolution of uncertainties with the local country taxing authorities with respect to the inclusion of the tax under a tax holiday applicable to the subsidiary and was attributable to the portion of cumulative retained earnings that the Company expects to distribute prior to the expiration of the holiday. Without the dividend withholding tax reversal, income taxes for the quarter would have been an expense of approximately $1.5 million , or a consolidated effective tax rate of approximately 27% . |
Leases Leases
Leases Leases | 3 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases of Lessee Disclosure | LEASES The Company, as a lessee, enters into operating leases for land, buildings, equipment, and vehicles. For all operating leases with terms greater than 12 months and with fixed payment arrangements, a lease liability and corresponding right-of-use asset are recognized in the balance sheet for the term of the lease by calculating the net present value of future lease payments. On the date of lease commencement, the present value of lease liabilities is determined by discounting the future lease payments by the Company’s collateralized incremental borrowing rate, adjusted for the lease term and currency of the lease payments. If a lease contains a renewal option that the Company is reasonably certain to exercise, the Company accounts for the original lease term and expected renewal term in the calculation of the lease liability and right-of-use asset. The following table sets forth the right-of-use assets and lease liabilities for operating leases included in the Company’s consolidated balance sheet: (in thousands) June 30, 2019 Assets Operating lease right-of-use assets $ 34,472 Liabilities Current portion of operating lease liabilities 8,938 Long-term operating lease liabilities 23,098 Total operating lease liabilities $ 32,036 The following table sets forth the location and amount of operating lease costs included in the Company's consolidated statement of income: Three Months Ended June 30, (in thousands) 2019 Income Statement Location Cost of goods sold $ 2,617 Selling, general, and administrative expenses 1,987 Total operating lease costs (1) $ 4,604 (1) Includes variable operating lease costs. For the fiscal year ended March 31, 2019 , the Company recorded $ 17.6 million of total expense for operating leases. The following table reconciles the undiscounted cash flows to the operating lease liabilities in the Company’s consolidated balance sheet: (in thousands) June 30, 2019 Maturity of Operating Lease Liabilities 2020 (excluding the three months ended June 30, 2019) $ 7,731 2021 8,303 2022 5,261 2023 4,018 2024 3,025 2025 and thereafter 8,675 Total undiscounted cash flows for operating leases $ 37,013 Less: Imputed interest (4,977 ) Total operating lease liabilities $ 32,036 As of June 30, 2019 , the Company has entered into additional operating leases that have not yet commenced, representing $4.8 million of future payments. The following table sets forth supplemental information related to operating leases: (in thousands, except lease term and incremental borrowing rate) Three Months Ended June 30, 2019 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of operating lease liabilities $ 3,046 Right-of-use assets obtained in exchange for new operating leases $ 468 Weighted Average Remaining Lease Term (years) 5.98 Weighted Average Collateralized Incremental Borrowing Rate 4.93 % |
Derivatives And Hedging Activit
Derivatives And Hedging Activities | 3 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives And Hedging Activities | DERIVATIVES AND HEDGING ACTIVITIES Universal is exposed to various risks in its worldwide operations and uses derivative financial instruments to manage two specific types of risks – interest rate risk and foreign currency exchange rate risk. Interest rate risk has been managed by entering into interest rate swap agreements, and foreign currency exchange rate risk has been managed by entering into forward and option foreign currency exchange contracts. However, the Company’s policy also permits other types of derivative instruments. In addition, foreign currency exchange rate risk is also managed through strategies that do not involve derivative instruments, such as using local borrowings and other approaches to minimize net monetary positions in non-functional currencies. The disclosures below provide additional information about the Company’s hedging strategies, the derivative instruments used, and the effects of these activities on the consolidated statements of income and comprehensive income and the consolidated balance sheets. In the consolidated statements of cash flows, the cash flows associated with all of these activities are reported in net cash provided by operating activities. Cash Flow Hedging Strategy for Interest Rate Risk In February 2019, the Company entered into receive-floating/pay-fixed interest rate swap agreements that were designated and qualify as hedges of the exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on two outstanding non-amortizing bank term loans that were funded as part of a new bank credit facility in December 2018. Although no significant ineffectiveness is expected with this hedging strategy, the effectiveness of the interest rate swaps is evaluated on a quarterly basis. At June 30, 2019 , the total notional amount of the interest rate swaps was $370 million , which corresponded with the aggregate outstanding balance of the term loans. Previously, the Company had receive-floating/pay-fixed interest rate swap agreements that were designated and qualified as cash flow hedges for two outstanding non-amortizing bank loans that were repaid concurrent with closing on the new bank credit facility. Those swap agreements were subsequently terminated in February 2019 concurrent with the inception of the new swap agreements. The fair value of the previous swap agreements, approximately $5.4 million , was received from the counterparties upon termination and is being amortized from accumulated other comprehensive loss into earnings as a reduction of interest expense through the original maturity dates of those agreements. Cash Flow Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Sales of Crop Inputs, Forecast Purchases of Tobacco, and Related Processing Costs The majority of the tobacco production in most countries outside the United States where Universal operates is sold in export markets at prices denominated in U.S. dollars. However, sales of crop inputs (such as seeds and fertilizers) to farmers, purchases of tobacco from farmers, and most processing costs (such as labor and energy) in those countries are usually denominated in the local currency. Changes in exchange rates between the U.S. dollar and the local currencies where tobacco is grown and processed affect the ultimate U.S. dollar sales of crop inputs and cost of processed tobacco. From time to time, the Company enters into forward and option contracts to buy U.S. dollars and sell the local currency at future dates that coincide with the sale of crop inputs to farmers. In the case of forecast purchases of tobacco and the related processing costs, the Company enters into forward and option contracts to sell U.S. dollars and buy the local currency at future dates that coincide with the expected timing of a portion of the tobacco purchases and processing costs. These strategies offset the variability of future U.S. dollar cash flows for sales of crop inputs, tobacco purchases, and processing costs for the foreign currency notional amount hedged. These hedging strategies have been used mainly for sales of crop inputs, tobacco purchases, and processing costs in Brazil, although the Company has entered forward contracts to hedge exchange rate risk for a portion of the forecast tobacco purchases from the 2019 crop in Mozambique. The aggregate U.S. dollar notional amount of forward and option contracts entered for these purposes during the first three months of fiscal years 2020 and 2019 was as follows: Three Months Ended June 30, (in millions of dollars) 2019 2018 Tobacco purchases $ 72.0 $ 59.8 Processing costs 26.3 16.5 Crop input sales 21.7 — Total $ 120.0 $ 76.3 The increased U.S. dollar notional amounts for tobacco purchases and processing costs hedged during the three months ended June 30, 2019 , primarily reflect purchase and processing hedges entered into for the 2020 crop year in Brazil, which historically were entered into during the fourth quarter of the fiscal year. All contracts related to tobacco purchases were designated and qualify as hedges of the future cash flows associated with the forecast purchases of tobacco. As a result, changes in fair values of the forward contracts have been recognized in comprehensive income as they occurred, but only recognized in earnings upon sale of the related tobacco to third-party customers. Forward and option contracts related to sales of crop inputs and processing costs have not been designated as hedges, and gains and losses on those contracts have been recognized in earnings on a mark-to-market basis. For substantially all hedge gains and losses related to 2019 crops recorded in accumulated other comprehensive income at June 30, 2019, the Company expects to complete the sale of the tobacco and recognize the amounts in earnings during fiscal year 2020. Purchases of the 2019 Brazilian crop are expected to be completed by August 2019, and all forward contracts to hedge these purchases will mature and be settled by that time. For hedged gains and losses related to 2020 crops recorded in accumulated other comprehensive income at June 30, 2019, the Company expects to complete the sale of tobacco and recognize the amounts in earnings during fiscal year 2021. Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Net Local Currency Monetary Assets and Liabilities of Foreign Subsidiaries sell the local currency at future dates coinciding with expected changes in the overall net local currency monetary asset position of the subsidiary. Gains and losses on the forward contracts are recorded in earnings as a component of selling, general, and administrative expenses for each reporting period as they occur, and thus directly offset the related remeasurement losses or gains in the consolidated statements of income for the notional amount hedged. The Company does not designate these contracts as hedges for accounting purposes. The contracts are generally arranged to hedge the subsidiary's projected exposure to currency remeasurement risk for specified periods of time, and new contracts are entered as necessary throughout the year to replace previous contracts as they mature. The Company is currently using forward currency contracts to manage its exposure to currency remeasurement risk in Brazil. The total notional amounts of contracts outstanding at June 30, 2019 and 2018 , and March 31, 2019 , were approximately $7.6 million , $24.9 million , and $24.8 million , respectively. To further mitigate currency remeasurement exposure, the Company’s foreign subsidiaries may utilize short-term local currency financing during certain periods. This strategy, while not involving the use of derivative instruments, is intended to minimize the subsidiary’s net monetary position by financing a portion of the local currency monetary assets with local currency monetary liabilities, thus hedging a portion of the overall position. Several of the Company’s foreign subsidiaries transact the majority of their sales and finance the majority of their operating requirements in their local currency, and therefore use their respective local currencies as the functional currency for reporting purposes. From time to time, these subsidiaries sell tobacco to customers in transactions that are not denominated in the functional currency. In those situations, the subsidiaries routinely enter into forward exchange contracts to offset currency risk for the period of time that a fixed-price order and the related trade account receivable are outstanding with the customer. The contracts are not designated as hedges for accounting purposes. Effect of Derivative Financial Instruments on the Consolidated Statements of Income The table below outlines the effects of the Company’s use of derivative financial instruments on the consolidated statements of income: Three Months Ended June 30, (in thousands of dollars) 2019 2018 Cash Flow Hedges - Interest Rate Swap Agreements Derivative Effective Portion of Hedge Gain (loss) recorded in accumulated other comprehensive loss $ (9,812 ) $ 1,556 Gain (loss) reclassified from accumulated other comprehensive loss into earnings $ (5 ) $ 291 Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings $ 779 $ — 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 - Foreign Currency Exchange Contracts Derivative Effective Portion of Hedge Gain (loss) recorded in accumulated other comprehensive loss $ 2,032 $ (3,031 ) Gain (loss) reclassified from accumulated other comprehensive loss into earnings $ (11 ) $ (25 ) 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 $ — $ — Location of gain (loss) recognized in earnings Selling, general and administrative expenses Hedged Item Description of hedged item Forecast purchases of tobacco in Brazil and Mozambique Derivatives Not Designated as Hedges - Foreign Currency Exchange Contracts Gain (loss) recognized in earnings $ 51 $ (5,445 ) Location of gain (loss) recognized in earnings Selling, general and administrative expenses For the interest rate swap agreements, the effective portion of the gain or loss on the derivative is recorded in accumulated other comprehensive loss and any ineffective portion is recorded in selling, general and administrative expenses. For the forward foreign currency exchange contracts designated as cash flow hedges of tobacco purchases in Brazil and Mozambique, a net hedge gain of approximately $2.4 million remained in accumulated other comprehensive gain at June 30, 2019 . That balance reflects gains and losses on contracts related to the 2019 and 2020 Brazil crops and 2019 Mozambique crop, less the amount reclassified to earnings related to tobacco sold through June 30, 2019 . The balance in accumulated other comprehensive loss associated with the 2019 crops in Brazil and Mozambique is expected to be recognized in earnings as a component of cost of goods sold in fiscal year 2020 as those tobaccos are sold to customers. The balance in accumulated other comprehensive loss related to the 2020 Brazil crop is expected to be recognized in earnings in fiscal year 2021 as that tobacco is sold to customers. Based on the hedging strategy, as the gain or loss is recognized in earnings, it is expected to be offset by a change in the direct cost for the tobacco or by a change in sales prices if the strategy has been mandated by the customer. Generally, margins on the sale of the tobacco will not be significantly affected. Effect of Derivative Financial Instruments on the Consolidated Balance Sheets The table below outlines the effects of the Company’s derivative financial instruments on the consolidated balance sheets at June 30, 2019 and 2018 , and March 31, 2019 : 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) June 30, 2019 June 30, March 31, 2019 June 30, June 30, March 31, 2019 Derivatives Designated as Hedging Instruments Interest rate swap agreements Other non-current assets $ — $ 9,527 $ — Other long-term liabilities $ 16,158 $ — $ 6,351 Foreign currency exchange contracts Other current assets 1,812 — 307 Accounts payable and accrued expenses 19 193 — Total $ 1,812 $ 9,527 $ 307 $ 16,177 $ 193 $ 6,351 Derivatives Not Designated as Hedging Instruments Foreign currency exchange contracts Other current assets $ 1,052 $ 10 $ 233 Accounts payable and accrued expenses $ 46 $ 1,298 $ 386 Total $ 1,052 $ 10 $ 233 $ 46 $ 1,298 $ 386 Substantially all of the Company's foreign exchange derivative instruments are subject to master netting arrangements whereby the right to offset occurs in the event of default by a participating party. The Company has elected to present these contracts on a gross basis in the consolidated balance sheets. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Universal measures certain financial and nonfinancial assets and liabilities at fair value based on applicable accounting guidance. The financial assets and liabilities measured at fair value include money market funds, trading securities associated with deferred compensation plans, interest rate swap agreements, forward foreign currency exchange contracts, and guarantees of bank loans to tobacco growers. The application of the fair value guidance to nonfinancial assets and liabilities primarily includes the determination of fair values for goodwill and long-lived assets when indicators of potential impairment are present. Under the accounting guidance, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The framework for measuring fair value is based on a fair value hierarchy that distinguishes between observable inputs and unobservable inputs. Observable inputs are based on market data obtained from independent sources. Unobservable inputs require the Company to make its own assumptions about the value placed on an asset or liability by market participants because little or no market data exists. There are three levels within the fair value hierarchy: 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. As permitted under the accounting guidance, the Company uses net asset value per share ("NAV") as a practical expedient to measure the fair value of its money market funds. The fair values for those funds are presented under the heading "NAV" in the tables that follow in this disclosure. In measuring the fair value of liabilities, the Company considers the risk of non-performance in determining fair value. Universal has not elected to report at fair value any financial instruments or any other assets or liabilities that are not required to be reported at fair value under current accounting guidance. Recurring Fair Value Measurements At June 30, 2019 and 2018 , and at March 31, 2019 , the Company had certain financial assets and financial liabilities that were required to be measured and reported at fair value on a recurring basis. These assets and liabilities are listed in the tables below and are classified based on how their values were determined under the fair value hierarchy or the NAV practical expedient: June 30, 2019 Fair Value Hierarchy (in thousands of dollars) NAV Level 1 Level 2 Level 3 Total Assets Money market funds $ 77,229 $ — $ — $ — $ 77,229 Trading securities associated with deferred compensation plans — 16,356 — — 16,356 Foreign currency exchange contracts — — 2,864 — 2,864 Total financial assets measured and reported at fair value $ 77,229 $ 16,356 $ 2,864 $ — $ 96,449 Liabilities Guarantees of bank loans to tobacco growers $ — $ — $ — $ 785 $ 785 Interest rate swap agreements — — 16,158 — 16,158 Foreign currency exchange contracts — — 65 — 65 Total financial liabilities measured and reported at fair value $ — $ — $ 16,223 $ 785 $ 17,008 June 30, 2018 Fair Value Hierarchy (in thousands of dollars) NAV Level 1 Level 2 Level 3 Total Assets Money market funds $ 1,700 $ — $ — $ — $ 1,700 Trading securities associated with deferred compensation plans — 16,910 — — 16,910 Interest rate swap agreements — — 9,527 — 9,527 Foreign currency exchange contracts — — 10 — 10 Total financial assets measured and reported at fair value $ 1,700 $ 16,910 $ 9,537 $ — $ 28,147 Liabilities Guarantees of bank loans to tobacco growers $ — $ — $ — $ 1,201 $ 1,201 Foreign currency exchange contracts — — 1,491 — 1,491 Total financial liabilities measured and reported at fair value $ — $ — $ 1,491 $ 1,201 $ 2,692 March 31, 2019 Fair Value Hierarchy (in thousands of dollars) NAV Level 1 Level 2 Level 3 Total Assets Money market funds $ 156,864 $ — $ — $ — $ 156,864 Trading securities associated with deferred compensation plans — 16,315 — — 16,315 Foreign currency exchange contracts — — 540 — 540 Total financial assets measured and reported at fair value $ 156,864 $ 16,315 $ 540 $ — $ 173,719 Liabilities Guarantees of bank loans to tobacco growers $ — $ — $ — $ 803 $ 803 Interest rate swap agreements — — 6,351 — 6,351 Foreign currency exchange contracts — — 386 — 386 Total financial liabilities measured and reported at fair value $ — $ — $ 6,737 $ 803 $ 7,540 Money market funds The fair value of money market funds, which are reported in cash and cash equivalents in the consolidated balance sheets, is based on NAV, which is the amount at which the funds are redeemable and is used as a practical expedient for fair value. These funds are not classified in the fair value hierarchy, but are disclosed as part of the fair value table above. Trading securities associated with deferred compensation plans Trading securities represent mutual fund investments that are matched to employee deferred compensation obligations. These investments are bought and sold as employees defer compensation, receive distributions, or make changes in the funds underlying their accounts. Quoted market prices (Level 1) are used to determine the fair values of the mutual funds. Interest rate swap agreements The fair values of interest rate swap agreements are determined based on dealer quotes using a discounted cash flow model matched to the contractual terms of each instrument. Since inputs to the model are observable and significant judgment is not required in determining the fair values, interest rate swaps are classified within Level 2 of the fair value hierarchy. Foreign currency exchange contracts The fair values of forward and option foreign currency exchange contracts are also determined based on dealer quotes using a discounted cash flow model matched to the contractual terms of each instrument. Since inputs to the model are observable and significant judgment is not required in determining the fair values, forward and option foreign currency exchange contracts are classified within Level 2 of the fair value hierarchy. Guarantees of bank loans to tobacco growers The Company guarantees bank loans to tobacco growers in Brazil for crop financing. In the event that the farmers default on their payments to the banks, the Company would be required to perform under the guarantees. The Company regularly evaluates the likelihood of farmer defaults based on an expected loss analysis and records the fair value of its guarantees as an obligation in its consolidated financial statements. The fair value of the guarantees is determined using the expected loss data for all loans outstanding at each measurement date. The present value of the cash flows associated with the estimated losses is then calculated at a risk-adjusted interest rate that is aligned with the expected duration of the liability and includes an adjustment for nonperformance risk. This approach is sometimes referred to as the “contingent claims valuation method.” Although historical loss data is an observable input, significant judgment is required in applying this information to the portfolio of guaranteed loans outstanding at each measurement date and in selecting a risk-adjusted interest rate. Significant increases or decreases in the risk-adjusted interest rate may result in a significantly higher or lower fair value measurement. The guarantees of bank loans to tobacco growers are therefore classified within Level 3 of the fair value hierarchy. A reconciliation of the change in the balance of the financial liability for guarantees of bank loans to tobacco growers (Level 3) for the three months ended June 30, 2019 and 2018 is provided below. Three Months Ended June 30, (in thousands of dollars) 2019 2018 Balance at beginning of year $ 803 $ 974 Payments under the guarantees and transfers to allowance for loss on direct loans to farmers (removal of prior crop year loans from portfolio) 58 348 Provision for loss or transfers from allowance for loss on direct loans to farmers (addition of current crop year loans) (79 ) 35 Change in discount rate and estimated collection period (5 ) 36 Currency remeasurement 8 (192 ) Balance at end of period $ 785 $ 1,201 Long-term Debt The fair value of the Company’s long-term debt, including the current portion, was approximately $370 million at each of the balance sheet dates June 30, 2019 , June 30, 2018 , and March 31, 2019 . The Company estimates the fair value of its long-term debt using Level 2 inputs which are based upon quoted market prices for the same or similar obligations or on calculations that are based on the current interest rates available to the Company for debt of similar terms and maturities. Nonrecurring Fair Value Measurements Long-Lived Assets The Company reviews long-lived assets for impairment whenever events, changes in business conditions, or other circumstances provide an indication that such assets may be impaired. Due to business changes that affected the leaf tobacco market in Tanzania and the Company's operations there, an impairment charge of the the long-lived assets in Tanzania was recorded in fiscal year 2019 to reduce their carrying value to fair value at March 31, 2019 . The long-lived assets consist principally of the Company's processing facility and equipment, storage facilities, tobacco buying and receiving stations, employee housing, and vehicles and transportation equipment. The aggregate fair value of those assets was approximately $17 million at March 31, 2019 |
Pension And Other Postretiremen
Pension And Other Postretirement Benefit Plans | 3 Months Ended |
Jun. 30, 2019 | |
Defined Benefit Plan [Abstract] | |
Pension and Other Postretirement Benefits Disclosure | PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The Company sponsors several defined benefit pension plans covering U.S. salaried employees and certain foreign and other employee groups. These plans provide retirement benefits based primarily on employee compensation and years of service. The Company also sponsors defined benefit plans that provide postretirement health and life insurance benefits for eligible U.S. employees attaining specific age and service levels, although postretirement life insurance is no longer provided for active employees. The components of the Company’s net periodic benefit cost were as follows: Pension Benefits Other Postretirement Benefits Three Months Ended June 30, Three Months Ended June 30, (in thousands of dollars) 2019 2018 2019 2018 Service cost $ 1,589 $ 1,455 $ 53 $ 59 Interest cost 2,737 2,481 333 340 Expected return on plan assets (4,216 ) (3,694 ) (27 ) (25 ) Net amortization and deferral 698 902 (152 ) (194 ) Net periodic benefit cost $ 808 $ 1,144 $ 207 $ 180 During the three months ended June 30, 2019 , the Company made contributions of approximately $0.3 million to its pension plans. Additional contributions of $5.7 million are expected during the remaining nine months of fiscal year 2020 . |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION Universal’s shareholders have approved Executive Stock Plans (“Plans”) under which officers, directors, and employees of the Company may receive grants and awards of common stock, restricted stock, restricted stock units (“RSUs”), performance share awards (“PSAs”), stock appreciation rights (“SARs”), incentive stock options, and non-qualified stock options. The Company’s practice is to award grants of stock-based compensation to officers on an annual basis at the first regularly-scheduled meeting of the Compensation Committee of the Board of Directors (the “Compensation Committee”) in the fiscal year following the public release of the Company’s financial results for the prior year. The Compensation Committee administers the Company’s Plans consistently, following previously defined guidelines. In recent years, the Compensation Committee has awarded only grants of RSUs and PSAs. Awards of restricted stock, RSUs, and PSAs are currently outstanding under the Plans. The RSUs vest five years from the grant date and are then paid out in shares of common stock. Under the terms of the RSU awards, grantees receive dividend equivalents in the form of additional RSUs that vest and are paid out on the same date as the original RSU grant. The PSAs vest at the end of a three -year performance period that begins with the year of the grant, are paid out in shares of common stock shortly after the vesting date, and do not carry rights to dividends or dividend equivalents prior to vesting. Shares ultimately paid out under PSA grants are dependent on the achievement of predetermined performance measures established by the Compensation Committee and can range from zero to 150% of the stated award. The Company’s outside directors automatically receive RSUs following each annual meeting of shareholders and previously received restricted stock. RSUs awarded to outside directors vest three years after the grant date, and restricted shares vest upon the individual’s retirement from service as a director. During the three -month periods ended June 30, 2019 and 2018 , Universal issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company: Three Months Ended June 30, 2019 2018 RSUs: Number granted 55,490 59,150 Grant date fair value $ 59.07 $ 66.00 PSAs: Number granted 46,300 53,250 Grant date fair value $ 50.16 $ 57.17 Fair value expense for stock-based compensation is recognized ratably over the period from grant date to the earlier of: (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For employees who are already eligible to retire at the date an award is granted, the total fair value of all non-forfeitable awards is recognized as expense at the date of grant. As a result, Universal typically incurs higher stock compensation expense in the first quarter of each fiscal year when grants are awarded to officers than in the other three quarters. For PSAs, the Company generally recognizes fair value expense ratably over the performance and vesting period based on management’s judgment of the ultimate award that is likely to be paid out based on the achievement of the predetermined performance measures. The Company accounts for forfeitures of stock-based awards as they occur. For the three -month periods ended June 30, 2019 and 2018 , the Company recorded total stock-based compensation expense of approximately $2.7 million and $4.2 million , respectively. The Company expects to recognize stock-based compensation expense of approximately $2.9 million during the remaining nine months of fiscal year 2020 . |
Operating Segments
Operating Segments | 3 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Operating Segments | OPERATING SEGMENTS The principal approach used by management to evaluate the Company’s performance is by geographic region, although the dark air-cured and oriental tobacco businesses are each evaluated on the basis of their worldwide operations. The Company evaluates the performance of its segments based on operating income after allocated overhead expenses (excluding significant non-recurring charges or credits), plus equity in the pretax earnings of unconsolidated affiliates. Operating results for the Company’s reportable segments for each period presented in the consolidated statements of income and comprehensive income were as follows: Three Months Ended June 30, (in thousands of dollars) 2019 2018 SALES AND OTHER OPERATING REVENUES Flue-Cured and Burley Leaf Tobacco Operations: North America $ 27,659 $ 115,556 Other Regions (1) 202,065 207,932 Subtotal 229,724 323,488 Other Tobacco Operations (2) 67,191 56,231 Consolidated sales and other operating revenue $ 296,915 $ 379,719 OPERATING INCOME Flue-Cured and Burley Leaf Tobacco Operations: North America $ 890 $ 8,952 Other Regions (1) (3,815 ) (2,017 ) Subtotal (2,925 ) 6,935 Other Tobacco Operations (2) 10,479 1,973 Segment operating income 7,554 8,908 Deduct: Equity in pretax earnings of unconsolidated affiliates (3) (40 ) (539 ) Consolidated operating income $ 7,514 $ 8,369 (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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the three months ended June 30, 2019 and 2018 : Three Months Ended June 30, (in thousands of dollars) 2019 2018 Foreign currency translation: Balance at beginning of year $ (40,101 ) $ (23,942 ) Other comprehensive income (loss) attributable to Universal Corporation: Net gain (loss) on foreign currency translation 1,937 (10,783 ) Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests (123 ) 159 Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes 1,814 (10,624 ) Balance at end of period $ (38,287 ) $ (34,566 ) Foreign currency hedge: Balance at beginning of year $ (376 ) $ (35 ) Other comprehensive income (loss) attributable to Universal Corporation: Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(378) and $613) 3,109 (4,475 ) Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(2) and $(4)) (1) (1,134 ) 146 Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes 1,975 (4,329 ) Balance at end of period $ 1,599 $ (4,364 ) Interest rate hedge: Balance at beginning of year $ (934 ) $ 6,528 Other comprehensive income (loss) attributable to Universal Corporation: Net gain (loss) on derivative instruments (net of tax (expense) benefit of $2,061 and $(327) (7,752 ) 1,229 Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(1) and $61) (2) (775 ) (230 ) Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes (8,527 ) 999 Balance at end of period $ (9,461 ) $ 7,527 Pension and other postretirement benefit plans: Balance at beginning of year $ (54,280 ) $ (42,615 ) Other comprehensive income (loss) attributable to Universal Corporation: Amortization included in earnings (net of tax expense (benefit) of $(102) and $(156) (3) 268 576 Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes 268 576 Balance at end of period $ (54,012 ) $ (42,039 ) Total accumulated other comprehensive loss at end of period $ (100,161 ) $ (73,442 ) (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 8 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 as amortized to interest expense over the period to original maturity for terminated swap agreements. See Note 8 for additional information. (3) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 10 for additional information. |
Changes In Shareholders' Equity
Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries | 3 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries | CHANGES IN SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS IN SUBSIDIARIES A reconciliation of the changes in Universal Corporation shareholders’ equity and noncontrolling interests in subsidiaries for the three months ended June 30, 2019 and 2018 is as follows: Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 (in thousands of dollars) Universal Corporation Non-controlling Interests Total Universal Corporation Non-controlling Interests Total Balance at beginning of year $ 1,337,087 $ 42,791 $ 1,379,878 $ 1,342,429 $ 42,873 $ 1,385,302 Changes in common stock Repurchase of common stock (1,174 ) — (1,174 ) (397 ) — (397 ) Accrual of stock-based compensation 2,728 — 2,728 4,198 — 4,198 Withholding of shares from stock-based compensation for grantee income taxes (2,883 ) — (2,883 ) (2,656 ) — (2,656 ) Dividend equivalents on RSUs 244 — 244 185 — 185 Changes in retained earnings Net income 2,072 (1,177 ) 895 13,179 (2,119 ) 11,060 Cash dividends declared Common stock (18,979 ) — (18,979 ) (18,718 ) — (18,718 ) Repurchase of common stock (4,040 ) — (4,040 ) (1,046 ) — (1,046 ) Dividend equivalents on RSUs (244 ) — (244 ) (185 ) — (185 ) Adoption of FASB Accounting Standards Update 2016-16 eliminating deferred income taxes on unrecognized gains on intra-entity transfers of assets other than inventory — — — (1,934 ) — (1,934 ) Other comprehensive income (loss) (4,470 ) 123 (4,347 ) (13,378 ) (159 ) (13,537 ) Balance at end of period $ 1,310,341 $ 41,737 $ 1,352,078 $ 1,321,677 $ 40,595 $ 1,362,272 |
Revenue from Contract with Cu_2
Revenue from Contract with Customer Revenue from Contract with Customer (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates the Company’s revenue by significant revenue-generating category: Three Months Ended June 30, (in thousands of dollars) 2019 2018 Tobacco sales $ 268,057 $ 345,137 Processing revenue 18,434 21,707 Other sales and revenue from contracts with customers 9,410 8,126 Total revenue from contracts with customers 295,901 374,970 Other operating sales and revenues 1,014 4,749 Consolidated sales and other operating revenues $ 296,915 $ 379,719 Other operating sales and revenues consists principally of interest on advances to suppliers and dividend income from unconsolidated affiliates. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended June 30, (in thousands, except share and per share data) 2019 2018 Basic Earnings Per Share Numerator for basic earnings per share Net income attributable to Universal Corporation $ 2,072 $ 13,179 Denominator for basic earnings per share Weighted average shares outstanding 25,158,369 25,064,420 Basic earnings per share $ 0.08 $ 0.53 Diluted Earnings Per Share Numerator for diluted earnings per share Net income attributable to Universal Corporation $ 2,072 $ 13,179 Denominator for diluted earnings per share: Weighted average shares outstanding 25,158,369 25,064,420 Effect of dilutive securities Employee share-based awards 125,889 220,280 Denominator for diluted earnings per share 25,284,258 25,284,700 Diluted earnings per share $ 0.08 $ 0.52 |
Leases Leases of Lessess (Table
Leases Leases of Lessess (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Leases of Lessees [Abstract] | |
Schedule of supplemental balance sheet information related to leases [Table Text Block] | The following table sets forth the right-of-use assets and lease liabilities for operating leases included in the Company’s consolidated balance sheet: (in thousands) June 30, 2019 Assets Operating lease right-of-use assets $ 34,472 Liabilities Current portion of operating lease liabilities 8,938 Long-term operating lease liabilities 23,098 Total operating lease liabilities $ 32,036 |
Schedule of supplemental income statement information related to leases [Table Text Block] | The following table sets forth the location and amount of operating lease costs included in the Company's consolidated statement of income: Three Months Ended June 30, (in thousands) 2019 Income Statement Location Cost of goods sold $ 2,617 Selling, general, and administrative expenses 1,987 Total operating lease costs (1) $ 4,604 (1) Includes variable operating lease costs. |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The following table reconciles the undiscounted cash flows to the operating lease liabilities in the Company’s consolidated balance sheet: (in thousands) June 30, 2019 Maturity of Operating Lease Liabilities 2020 (excluding the three months ended June 30, 2019) $ 7,731 2021 8,303 2022 5,261 2023 4,018 2024 3,025 2025 and thereafter 8,675 Total undiscounted cash flows for operating leases $ 37,013 Less: Imputed interest (4,977 ) Total operating lease liabilities $ 32,036 |
Supplemental information related to operating leases [Table Text Block] | The following table sets forth supplemental information related to operating leases: (in thousands, except lease term and incremental borrowing rate) Three Months Ended June 30, 2019 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of operating lease liabilities $ 3,046 Right-of-use assets obtained in exchange for new operating leases $ 468 Weighted Average Remaining Lease Term (years) 5.98 Weighted Average Collateralized Incremental Borrowing Rate 4.93 % |
Derivatives And Hedging Activ_2
Derivatives And Hedging Activities (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional Amount of Forward Contracts | The aggregate U.S. dollar notional amount of forward and option contracts entered for these purposes during the first three months of fiscal years 2020 and 2019 was as follows: Three Months Ended June 30, (in millions of dollars) 2019 2018 Tobacco purchases $ 72.0 $ 59.8 Processing costs 26.3 16.5 Crop input sales 21.7 — Total $ 120.0 $ 76.3 |
Effect Of Derivative Financial Instruments On The Consolidated Statements Of Income | The table below outlines the effects of the Company’s use of derivative financial instruments on the consolidated statements of income: Three Months Ended June 30, (in thousands of dollars) 2019 2018 Cash Flow Hedges - Interest Rate Swap Agreements Derivative Effective Portion of Hedge Gain (loss) recorded in accumulated other comprehensive loss $ (9,812 ) $ 1,556 Gain (loss) reclassified from accumulated other comprehensive loss into earnings $ (5 ) $ 291 Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings $ 779 $ — 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 - Foreign Currency Exchange Contracts Derivative Effective Portion of Hedge Gain (loss) recorded in accumulated other comprehensive loss $ 2,032 $ (3,031 ) Gain (loss) reclassified from accumulated other comprehensive loss into earnings $ (11 ) $ (25 ) 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 $ — $ — Location of gain (loss) recognized in earnings Selling, general and administrative expenses Hedged Item Description of hedged item Forecast purchases of tobacco in Brazil and Mozambique Derivatives Not Designated as Hedges - Foreign Currency Exchange Contracts Gain (loss) recognized in earnings $ 51 $ (5,445 ) Location of gain (loss) recognized in earnings Selling, general and administrative expenses |
Effect Of Derivative Financial Instruments On The Consolidated Balance Sheets | The table below outlines the effects of the Company’s derivative financial instruments on the consolidated balance sheets at June 30, 2019 and 2018 , and March 31, 2019 : 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) June 30, 2019 June 30, March 31, 2019 June 30, June 30, March 31, 2019 Derivatives Designated as Hedging Instruments Interest rate swap agreements Other non-current assets $ — $ 9,527 $ — Other long-term liabilities $ 16,158 $ — $ 6,351 Foreign currency exchange contracts Other current assets 1,812 — 307 Accounts payable and accrued expenses 19 193 — Total $ 1,812 $ 9,527 $ 307 $ 16,177 $ 193 $ 6,351 Derivatives Not Designated as Hedging Instruments Foreign currency exchange contracts Other current assets $ 1,052 $ 10 $ 233 Accounts payable and accrued expenses $ 46 $ 1,298 $ 386 Total $ 1,052 $ 10 $ 233 $ 46 $ 1,298 $ 386 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Assets And Liabilities Measured At Fair Value On Recurring Basis | At June 30, 2019 and 2018 , and at March 31, 2019 , the Company had certain financial assets and financial liabilities that were required to be measured and reported at fair value on a recurring basis. These assets and liabilities are listed in the tables below and are classified based on how their values were determined under the fair value hierarchy or the NAV practical expedient: June 30, 2019 Fair Value Hierarchy (in thousands of dollars) NAV Level 1 Level 2 Level 3 Total Assets Money market funds $ 77,229 $ — $ — $ — $ 77,229 Trading securities associated with deferred compensation plans — 16,356 — — 16,356 Foreign currency exchange contracts — — 2,864 — 2,864 Total financial assets measured and reported at fair value $ 77,229 $ 16,356 $ 2,864 $ — $ 96,449 Liabilities Guarantees of bank loans to tobacco growers $ — $ — $ — $ 785 $ 785 Interest rate swap agreements — — 16,158 — 16,158 Foreign currency exchange contracts — — 65 — 65 Total financial liabilities measured and reported at fair value $ — $ — $ 16,223 $ 785 $ 17,008 June 30, 2018 Fair Value Hierarchy (in thousands of dollars) NAV Level 1 Level 2 Level 3 Total Assets Money market funds $ 1,700 $ — $ — $ — $ 1,700 Trading securities associated with deferred compensation plans — 16,910 — — 16,910 Interest rate swap agreements — — 9,527 — 9,527 Foreign currency exchange contracts — — 10 — 10 Total financial assets measured and reported at fair value $ 1,700 $ 16,910 $ 9,537 $ — $ 28,147 Liabilities Guarantees of bank loans to tobacco growers $ — $ — $ — $ 1,201 $ 1,201 Foreign currency exchange contracts — — 1,491 — 1,491 Total financial liabilities measured and reported at fair value $ — $ — $ 1,491 $ 1,201 $ 2,692 March 31, 2019 Fair Value Hierarchy (in thousands of dollars) NAV Level 1 Level 2 Level 3 Total Assets Money market funds $ 156,864 $ — $ — $ — $ 156,864 Trading securities associated with deferred compensation plans — 16,315 — — 16,315 Foreign currency exchange contracts — — 540 — 540 Total financial assets measured and reported at fair value $ 156,864 $ 16,315 $ 540 $ — $ 173,719 Liabilities Guarantees of bank loans to tobacco growers $ — $ — $ — $ 803 $ 803 Interest rate swap agreements — — 6,351 — 6,351 Foreign currency exchange contracts — — 386 — 386 Total financial liabilities measured and reported at fair value $ — $ — $ 6,737 $ 803 $ 7,540 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | A reconciliation of the change in the balance of the financial liability for guarantees of bank loans to tobacco growers (Level 3) for the three months ended June 30, 2019 and 2018 is provided below. Three Months Ended June 30, (in thousands of dollars) 2019 2018 Balance at beginning of year $ 803 $ 974 Payments under the guarantees and transfers to allowance for loss on direct loans to farmers (removal of prior crop year loans from portfolio) 58 348 Provision for loss or transfers from allowance for loss on direct loans to farmers (addition of current crop year loans) (79 ) 35 Change in discount rate and estimated collection period (5 ) 36 Currency remeasurement 8 (192 ) Balance at end of period $ 785 $ 1,201 |
Pension And Other Postretirem_2
Pension And Other Postretirement Benefit Plans (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Defined Benefit Plan [Abstract] | |
Components of Company's Net Periodic Benefit Cost | The components of the Company’s net periodic benefit cost were as follows: Pension Benefits Other Postretirement Benefits Three Months Ended June 30, Three Months Ended June 30, (in thousands of dollars) 2019 2018 2019 2018 Service cost $ 1,589 $ 1,455 $ 53 $ 59 Interest cost 2,737 2,481 333 340 Expected return on plan assets (4,216 ) (3,694 ) (27 ) (25 ) Net amortization and deferral 698 902 (152 ) (194 ) Net periodic benefit cost $ 808 $ 1,144 $ 207 $ 180 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Awards Issued During The Period | During the three -month periods ended June 30, 2019 and 2018 , Universal issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company: Three Months Ended June 30, 2019 2018 RSUs: Number granted 55,490 59,150 Grant date fair value $ 59.07 $ 66.00 PSAs: Number granted 46,300 53,250 Grant date fair value $ 50.16 $ 57.17 |
Operating Segments (Tables)
Operating Segments (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Operating Results For The Company's Reportable Segments | Operating results for the Company’s reportable segments for each period presented in the consolidated statements of income and comprehensive income were as follows: Three Months Ended June 30, (in thousands of dollars) 2019 2018 SALES AND OTHER OPERATING REVENUES Flue-Cured and Burley Leaf Tobacco Operations: North America $ 27,659 $ 115,556 Other Regions (1) 202,065 207,932 Subtotal 229,724 323,488 Other Tobacco Operations (2) 67,191 56,231 Consolidated sales and other operating revenue $ 296,915 $ 379,719 OPERATING INCOME Flue-Cured and Burley Leaf Tobacco Operations: North America $ 890 $ 8,952 Other Regions (1) (3,815 ) (2,017 ) Subtotal (2,925 ) 6,935 Other Tobacco Operations (2) 10,479 1,973 Segment operating income 7,554 8,908 Deduct: Equity in pretax earnings of unconsolidated affiliates (3) (40 ) (539 ) Consolidated operating income $ 7,514 $ 8,369 (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. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the three months ended June 30, 2019 and 2018 : Three Months Ended June 30, (in thousands of dollars) 2019 2018 Foreign currency translation: Balance at beginning of year $ (40,101 ) $ (23,942 ) Other comprehensive income (loss) attributable to Universal Corporation: Net gain (loss) on foreign currency translation 1,937 (10,783 ) Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests (123 ) 159 Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes 1,814 (10,624 ) Balance at end of period $ (38,287 ) $ (34,566 ) Foreign currency hedge: Balance at beginning of year $ (376 ) $ (35 ) Other comprehensive income (loss) attributable to Universal Corporation: Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(378) and $613) 3,109 (4,475 ) Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(2) and $(4)) (1) (1,134 ) 146 Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes 1,975 (4,329 ) Balance at end of period $ 1,599 $ (4,364 ) Interest rate hedge: Balance at beginning of year $ (934 ) $ 6,528 Other comprehensive income (loss) attributable to Universal Corporation: Net gain (loss) on derivative instruments (net of tax (expense) benefit of $2,061 and $(327) (7,752 ) 1,229 Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(1) and $61) (2) (775 ) (230 ) Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes (8,527 ) 999 Balance at end of period $ (9,461 ) $ 7,527 Pension and other postretirement benefit plans: Balance at beginning of year $ (54,280 ) $ (42,615 ) Other comprehensive income (loss) attributable to Universal Corporation: Amortization included in earnings (net of tax expense (benefit) of $(102) and $(156) (3) 268 576 Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes 268 576 Balance at end of period $ (54,012 ) $ (42,039 ) Total accumulated other comprehensive loss at end of period $ (100,161 ) $ (73,442 ) (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 8 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 as amortized to interest expense over the period to original maturity for terminated swap agreements. See Note 8 for additional information. (3) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 10 for additional information. |
Changes In Shareholders' Equi_2
Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Reconciliation Of Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries | A reconciliation of the changes in Universal Corporation shareholders’ equity and noncontrolling interests in subsidiaries for the three months ended June 30, 2019 and 2018 is as follows: Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 (in thousands of dollars) Universal Corporation Non-controlling Interests Total Universal Corporation Non-controlling Interests Total Balance at beginning of year $ 1,337,087 $ 42,791 $ 1,379,878 $ 1,342,429 $ 42,873 $ 1,385,302 Changes in common stock Repurchase of common stock (1,174 ) — (1,174 ) (397 ) — (397 ) Accrual of stock-based compensation 2,728 — 2,728 4,198 — 4,198 Withholding of shares from stock-based compensation for grantee income taxes (2,883 ) — (2,883 ) (2,656 ) — (2,656 ) Dividend equivalents on RSUs 244 — 244 185 — 185 Changes in retained earnings Net income 2,072 (1,177 ) 895 13,179 (2,119 ) 11,060 Cash dividends declared Common stock (18,979 ) — (18,979 ) (18,718 ) — (18,718 ) Repurchase of common stock (4,040 ) — (4,040 ) (1,046 ) — (1,046 ) Dividend equivalents on RSUs (244 ) — (244 ) (185 ) — (185 ) Adoption of FASB Accounting Standards Update 2016-16 eliminating deferred income taxes on unrecognized gains on intra-entity transfers of assets other than inventory — — — (1,934 ) — (1,934 ) Other comprehensive income (loss) (4,470 ) 123 (4,347 ) (13,378 ) (159 ) (13,537 ) Balance at end of period $ 1,310,341 $ 41,737 $ 1,352,078 $ 1,321,677 $ 40,595 $ 1,362,272 |
Accounting Pronouncements Adopt
Accounting Pronouncements Adoption of Account Standards Update 2016-16 (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Operating lease right-of-use assets | $ 34,472 | $ 0 | $ 0 |
Total operating lease liabilities | 32,036 | ||
Accounting Standards Update 2016-02 [Member] | |||
Operating lease right-of-use assets | 36,600 | ||
Total operating lease liabilities | $ 34,200 |
Revenue from Contract with Cu_3
Revenue from Contract with Customer Revenue from Contract with Customer (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 295,901 | $ 374,970 |
Other operating sales and revenues | 1,014 | 4,749 |
Sales and other operating revenues | 296,915 | 379,719 |
Tobacco sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 268,057 | 345,137 |
Processing revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 18,434 | 21,707 |
Other sales and revenue from contracts with customers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 9,410 | $ 8,126 |
Guarantees, Other Contingent _2
Guarantees, Other Contingent Liabilities, And Other Matters (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2019 | |
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Face amount of guarantee including unpaid accrued interest | $ 2,000,000 | $ 3,000,000 | $ 17,000,000 |
Fair value of the guarantees | 785,000 | 1,201,000 | 803,000 |
Other contingent liabilities | $ 1,000,000 | ||
Crops supply agreement, term | 2 years | ||
Unfair benefit from green tobacco purchase contract | $ 105,000 | ||
Net provision for losses (recoveries) on advances and guaranteed loans to suppliers | (165,000) | (797,000) | |
Advances to suppliers [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Advances to suppliers current and non-current | 101,000,000 | 94,000,000 | 129,000,000 |
Valuation allowances | 18,000,000 | 19,000,000 | 18,000,000 |
Net provision for losses (recoveries) on advances and guaranteed loans to suppliers | (200,000) | (800,000) | |
Recoverable value added tax credits [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Aggregate balance of recoverable value added tax credits | 61,000,000 | 53,000,000 | 53,000,000 |
Valuation allowances | 18,000,000 | $ 16,000,000 | $ 17,000,000 |
Pending Litigation [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Loss contingency amount accrued | 0 | ||
The Company and subsidiary [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Loss contingency amount accrued | 0 | ||
Fines imposed by FCC | 197,000,000 | ||
The customer and subsidiary [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Fines imposed by FCC | 1,000,000,000 | ||
Cooperatives under contract [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Growers cooperative | 4 | ||
Total Cooperatives [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Growers cooperative | 400 | ||
Santa Catarina [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits | 12,000,000 | ||
Reduced Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits | 12,000,000 | ||
Loss contingency amount accrued | 0 | ||
Santa Catarina [Member] | Minimum [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Estimate of possible loss on remaining VAT audit assessment | 0 | ||
Santa Catarina [Member] | Maximum [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Estimate of possible loss on remaining VAT audit assessment | 12,000,000 | ||
Parana [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits | 14,000,000 | ||
Reduced Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits | 6,000,000 | ||
Loss contingency amount accrued | 0 | ||
Parana [Member] | Minimum [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Estimate of possible loss on remaining VAT audit assessment | 0 | ||
Parana [Member] | Maximum [Member] | |||
Guarantees, Other Contingent Liabilities, and Other Matters [Line Items] | |||
Estimate of possible loss on remaining VAT audit assessment | $ 6,000,000 |
Earnings Per Share (Computation
Earnings Per Share (Computation Of Basic And Diluted Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator for basic earnings per share | ||
Net income attributable to Universal Corporation | $ 2,072 | $ 13,179 |
Denominator for basic earnings per share | ||
Weighted average shares outstanding | 25,158,369 | 25,064,420 |
Basic earnings per share | $ 0.08 | $ 0.53 |
Numerator for diluted earnings per share | ||
Net income attributable to Universal Corporation | $ 2,072 | $ 13,179 |
Denominator for diluted earnings per share: | ||
Weighted average shares outstanding | 25,158,369 | 25,064,420 |
Employee share-based awards | 125,889 | 220,280 |
Denominator for diluted earnings per share | 25,284,258 | 25,284,700 |
Diluted earnings per share | $ 0.08 | $ 0.52 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Line Items] | ||
Effective income tax rate | 83.00% | |
Net tax provision related to unresolved tax matter at a foreign subsidiary | $ 2,800 | |
Income taxes | $ 4,266 | $ (5,399) |
Unresolved tax matter foreign jurisdiction [Member] | ||
Income Tax Disclosure [Line Items] | ||
Effective income tax rate | 29.00% | |
Income taxes | $ 1,500 | |
Tax benefit - excluding dividend tax reversal [Member] | ||
Income Tax Disclosure [Line Items] | ||
Effective income tax rate | 27.00% | |
Income taxes | $ 1,500 |
Leases Leases of Lessees (Narra
Leases Leases of Lessees (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2019 | |
Operating Lease, Expense | $ 17.6 | |
Additional operating leases that have not yet commenced | $ 4.8 |
Leases Supplemental balance she
Leases Supplemental balance sheet information related to leases (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Operating lease right-of-use assets | $ 34,472 | $ 0 | $ 0 |
Current portion of operating lease liabilities | 8,938 | 0 | 0 |
Long-term operating lease liabilities | 23,098 | $ 0 | $ 0 |
Total operating lease liabilities | $ 32,036 |
Leases Supplemental income stat
Leases Supplemental income statement information related to leases (Details) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019USD ($) | ||
Supplemental income statement information related to leases [Line Items] | ||
Operating Lease, Cost | $ 4,604 | [1] |
Cost of goods sold [Member] | ||
Supplemental income statement information related to leases [Line Items] | ||
Operating Lease, Cost | 2,617 | |
Selling, General and Administrative Expenses [Member] | ||
Supplemental income statement information related to leases [Line Items] | ||
Operating Lease, Cost | $ 1,987 | |
[1] | Includes variable operating lease costs. |
Leases Maturities of operating
Leases Maturities of operating lease liabilities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
2020 (excluding the three months ended June 30, 2019) | $ 7,731 |
2021 | 8,303 |
2022 | 5,261 |
2023 | 4,018 |
2024 | 3,025 |
2025 and thereafter | 8,675 |
Total undiscounted cash flows for operating leases | 37,013 |
Less: Imputed interest | (4,977) |
Total operating lease liabilities | $ 32,036 |
Leases Supplemental information
Leases Supplemental information related to leases (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 3,046 |
Right-of-use assets obtained in exchange for new operating leases | $ 468 |
Weighted Average Remaining Lease Term (years) | 5 years 11 months 23 days |
Weighted Average Collateralized Incremental Borrowing Rate | 4.93% |
Derivatives And Hedging Activ_3
Derivatives And Hedging Activities (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | |
Foreign Exchange Forward [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative contracts | $ 7.6 | $ 24.8 | $ 24.9 |
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Notional amount of derivative contracts | 370 | ||
Derivative, Fair Value, Net | 5.4 | ||
Cash Flow Hedging [Member] | Foreign Exchange Forward [Member] | |||
Derivative [Line Items] | |||
Net unrealized gain on foreign currency derivatives designated as cash flow hedges | $ (2.4) |
Derivatives And Hedging Activ_4
Derivatives And Hedging Activities Notional Amount of Forward Contracts (Details) - Forward Foreign Currency Exchange Contract [Member] - USD ($) $ in Millions | Jun. 30, 2019 | Jun. 30, 2018 |
Derivative [Line Items] | ||
Notional amount of derivative contracts | $ 120 | $ 76.3 |
Derivatives related to tobacco purchases [Member] | Tobacco purchases [Member] | ||
Derivative [Line Items] | ||
Notional amount of derivative contracts | 72 | 59.8 |
Derivatives related to processing costs [Member] | Processing costs [Member] | ||
Derivative [Line Items] | ||
Notional amount of derivative contracts | 26.3 | 16.5 |
Derivatives related to processing costs [Member] | Crop input sales [Member] | ||
Derivative [Line Items] | ||
Notional amount of derivative contracts | $ 21.7 | $ 0 |
Derivatives And Hedging Activ_5
Derivatives And Hedging Activities (Effect Of Derivative Financial Instruments On The Consolidated Statements Of Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Derivatives Designated As Hedges [Member] | Interest Rate Swap Agreements [Member] | Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recorded in accumulated other comprehensive loss | $ (9,812) | $ 1,556 |
Gain (loss) reclassified from accumulated other comprehensive loss into earnings | (5) | 291 |
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings | 779 | 0 |
Derivatives Designated As Hedges [Member] | Interest Rate Swap Agreements [Member] | Selling, General And Administrative Expenses [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in earnings from ineffective portion and early de-designation of cash flow hedges | 0 | 0 |
Derivatives Designated As Hedges [Member] | Forward Foreign Currency Exchange Contracts [Member] | Cost Of Goods Sold [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recorded in accumulated other comprehensive loss | 2,032 | (3,031) |
Gain (loss) reclassified from accumulated other comprehensive loss into earnings | (11) | (25) |
Derivatives Designated As Hedges [Member] | Forward Foreign Currency Exchange Contracts [Member] | Selling, General And Administrative Expenses [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in earnings from ineffective portion and early de-designation of cash flow hedges | 0 | 0 |
Derivatives Not Designated As Hedges [Member] | Forward Foreign Currency Exchange Contracts [Member] | Selling, General And Administrative Expenses [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in earnings | $ 51 | $ (5,445) |
Derivatives And Hedging Activ_6
Derivatives And Hedging Activities (Effect Of Derivative Financial Instruments On The Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Derivative [Line Items] | |||
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments | $ 1,812 | $ 307 | $ 9,527 |
Derivatives in a Fair Value Liability Position Designated as Hedging Instruments | 16,177 | 6,351 | 193 |
Derivatives in a Fair Value Asset Position Not Designated as Hedging Instruments | 1,052 | 233 | 10 |
Derivatives in a Fair Value Liability Position Not Designated as Hedging Instruments | 46 | 386 | 1,298 |
Interest Rate Swap Agreements [Member] | Other Non-Current Assets [Member] | |||
Derivative [Line Items] | |||
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments | 0 | 0 | 9,527 |
Interest Rate Swap Agreements [Member] | Other Long-Term Liabilities [Member] | |||
Derivative [Line Items] | |||
Derivatives in a Fair Value Liability Position Designated as Hedging Instruments | 16,158 | 6,351 | 0 |
Forward Foreign Currency Exchange Contract [Member] | Other Current Assets [Member] | |||
Derivative [Line Items] | |||
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments | 1,812 | 307 | 0 |
Derivatives in a Fair Value Asset Position Not Designated as Hedging Instruments | 1,052 | 233 | 10 |
Forward Foreign Currency Exchange Contract [Member] | Accounts Payable and Accrued Expenses [Member] | |||
Derivative [Line Items] | |||
Derivatives in a Fair Value Liability Position Designated as Hedging Instruments | 19 | 0 | 193 |
Derivatives in a Fair Value Liability Position Not Designated as Hedging Instruments | $ 46 | $ 386 | $ 1,298 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term Debt, Fair Value | $ 370 | $ 370 | $ 370 |
Nonrecurring fair value measurements [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired fixed assets | $ 17 |
Fair Value Measurements (Financ
Fair Value Measurements (Financial Assets And Liabilities Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Assets: | |||
Money market funds | $ 77,229 | $ 156,864 | $ 1,700 |
Trading securities associated with deferred compensation plans | 16,356 | 16,315 | 16,910 |
Interest rate swap agreements | 9,527 | ||
Forward foreign currency exchange contracts | 2,864 | 540 | 10 |
Total financial assets measured and reported at fair value | 96,449 | 173,719 | 28,147 |
Liabilities: | |||
Guarantees of bank loans to tobacco growers | 785 | 803 | 1,201 |
Interest Rate Derivative Liabilities, at Fair Value | 16,158 | 6,351 | |
Forward foreign currency exchange contracts | 65 | 386 | 1,491 |
Total financial liabilities measured and reported at fair value | 17,008 | 7,540 | 2,692 |
Net Asset Value [Member] | |||
Assets: | |||
Money market funds | 77,229 | 156,864 | 1,700 |
Trading securities associated with deferred compensation plans | 0 | 0 | 0 |
Interest rate swap agreements | 0 | ||
Forward foreign currency exchange contracts | 0 | 0 | 0 |
Total financial assets measured and reported at fair value | 77,229 | 156,864 | 1,700 |
Liabilities: | |||
Guarantees of bank loans to tobacco growers | 0 | 0 | 0 |
Interest Rate Derivative Liabilities, at Fair Value | 0 | 0 | |
Forward foreign currency exchange contracts | 0 | 0 | 0 |
Total financial liabilities measured and reported at fair value | 0 | 0 | 0 |
Level 1 [Member] | |||
Assets: | |||
Money market funds | 0 | 0 | 0 |
Trading securities associated with deferred compensation plans | 16,356 | 16,315 | 16,910 |
Interest rate swap agreements | 0 | ||
Forward foreign currency exchange contracts | 0 | 0 | 0 |
Total financial assets measured and reported at fair value | 16,356 | 16,315 | 16,910 |
Liabilities: | |||
Guarantees of bank loans to tobacco growers | 0 | 0 | 0 |
Interest Rate Derivative Liabilities, at Fair Value | 0 | 0 | |
Forward foreign currency exchange contracts | 0 | 0 | 0 |
Total financial liabilities measured and reported at fair value | 0 | 0 | 0 |
Level 2 [Member] | |||
Assets: | |||
Money market funds | 0 | 0 | 0 |
Trading securities associated with deferred compensation plans | 0 | 0 | 0 |
Interest rate swap agreements | 9,527 | ||
Forward foreign currency exchange contracts | 2,864 | 540 | 10 |
Total financial assets measured and reported at fair value | 2,864 | 540 | 9,537 |
Liabilities: | |||
Guarantees of bank loans to tobacco growers | 0 | 0 | 0 |
Interest Rate Derivative Liabilities, at Fair Value | 16,158 | 6,351 | |
Forward foreign currency exchange contracts | 65 | 386 | 1,491 |
Total financial liabilities measured and reported at fair value | 16,223 | 6,737 | 1,491 |
Level 3 [Member] | |||
Assets: | |||
Money market funds | 0 | 0 | 0 |
Trading securities associated with deferred compensation plans | 0 | 0 | 0 |
Interest rate swap agreements | 0 | ||
Forward foreign currency exchange contracts | 0 | 0 | 0 |
Total financial assets measured and reported at fair value | 0 | 0 | 0 |
Liabilities: | |||
Guarantees of bank loans to tobacco growers | 785 | 803 | 1,201 |
Interest Rate Derivative Liabilities, at Fair Value | 0 | 0 | |
Forward foreign currency exchange contracts | 0 | 0 | 0 |
Total financial liabilities measured and reported at fair value | $ 785 | $ 803 | $ 1,201 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation Of Change In Balance Of Financial Liability For Guarantees Of Bank Loans To Tobacco Growers) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | ||
Balance at beginning of year | $ 803 | $ 974 |
Payments under the guarantees and transfers to allowance for loss on direct loans to farmers (removal of prior crop year loans from portfolio) | 58 | 348 |
Provision for loss or transfers from allowance for loss on direct loans to farmers (addition of current crop year loans) | (79) | 35 |
Change in discount rate and estimated collection period | (5) | 36 |
Currency remeasurement | 8 | (192) |
Balance at end of period | $ 785 | $ 1,201 |
Pension And Other Postretirem_3
Pension And Other Postretirement Benefit Plans Pension And Other Postretirement Benefit Plans (Narrative) (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2019USD ($) | |
Pension and Other Postretirement Benefits [Line Items] | |
Contributions to qualified and non-qualified pension plans | $ 0.3 |
Expected additional contributions in the current fiscal year | $ 5.7 |
Pension And Other Postretirem_4
Pension And Other Postretirement Benefit Plans (Components Of Company's Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1,589 | $ 1,455 |
Interest cost | 2,737 | 2,481 |
Expected return on plan assets | (4,216) | (3,694) |
Net amortization and deferral | 698 | 902 |
Net periodic benefit cost | 808 | 1,144 |
Other Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 53 | 59 |
Interest cost | 333 | 340 |
Expected return on plan assets | (27) | (25) |
Net amortization and deferral | (152) | (194) |
Net periodic benefit cost | $ 207 | $ 180 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 2.7 | $ 4.2 |
Expected stock based compensation for remaining fiscal year | $ 2.9 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 5 years | |
Performance Share Awards (PSAs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Minimum [Member] | Performance Share Awards (PSAs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of award grant paid | 0.00% | |
Maximum [Member] | Performance Share Awards (PSAs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of award grant paid | 150.00% | |
Outside Directors [Member] | Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock-Based Awards Issued During The Period) (Details) - $ / shares | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number granted | 55,490 | 59,150 |
Grant date fair value | $ 59.07 | $ 66 |
Performance Share Awards (PSAs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number granted | 46,300 | 53,250 |
Grant date fair value | $ 50.16 | $ 57.17 |
Operating Segments (Operating R
Operating Segments (Operating Results For The Company's Reportable Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | ||
Segment Reporting Information [Line Items] | |||
Sales and other operating revenues | $ 296,915 | $ 379,719 | |
Deduct: Equity in pretax earnings of unconsolidated affiliates (3) | [1] | (40) | (539) |
Consolidated operating income | 7,514 | 8,369 | |
Flue-Cured And Burley Leaf Tobacco Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales and other operating revenues | 229,724 | 323,488 | |
Consolidated operating income | (2,925) | 6,935 | |
Flue-Cured And Burley Leaf Tobacco Operations [Member] | North America [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales and other operating revenues | 27,659 | 115,556 | |
Consolidated operating income | 890 | 8,952 | |
Flue-Cured And Burley Leaf Tobacco Operations [Member] | Other Regions [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales and other operating revenues | [2] | 202,065 | 207,932 |
Consolidated operating income | [2] | (3,815) | (2,017) |
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Consolidated operating income | 7,554 | 8,908 | |
Other Tobacco Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales and other operating revenues | [3] | 67,191 | 56,231 |
Consolidated operating income | [3] | $ 10,479 | $ 1,973 |
[1] | 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 | ||
[2] | Includes South America, Africa, Europe, and Asia regions, as well as inter-region eliminations. | ||
[3] | 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. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2019 | ||
Other Comprehensive Income (Loss), Tax [Abstract] | ||||
Accumulated other comprehensive loss | $ (100,161) | $ (73,442) | $ (95,691) | |
Accumulated Translation Adjustment [Member] | ||||
Foreign currency translation: | ||||
Balance at beginning of year | (40,101) | (23,942) | ||
Net gain (loss) on foreign currency translation | 1,937 | (10,783) | ||
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests | (123) | 159 | ||
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes | 1,814 | (10,624) | ||
Balance at end of period | (38,287) | (34,566) | ||
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Forward Foreign Currency Exchange Contract [Member] | ||||
Cash flow hedges: [Abstract] | ||||
Balance at beginning of year | (376) | (35) | ||
Net gain (loss) on derivative instruments, net of income taxes | 3,109 | (4,475) | ||
Reclassifications to earnings, net of income taxes | [1] | (1,134) | 146 | |
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes | 1,975 | (4,329) | ||
Balance at end of period | 1,599 | (4,364) | ||
Other Comprehensive Income (Loss), Tax [Abstract] | ||||
Taxes on net gain (loss) on derivative instruments | (378) | 613 | ||
Taxes on reclassifications to net income | (2) | (4) | ||
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Interest Rate Swap [Member] | ||||
Cash flow hedges: [Abstract] | ||||
Balance at beginning of year | (934) | 6,528 | ||
Net gain (loss) on derivative instruments, net of income taxes | (7,752) | 1,229 | ||
Reclassifications to earnings, net of income taxes | [2] | (775) | (230) | |
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes | (8,527) | 999 | ||
Balance at end of period | (9,461) | 7,527 | ||
Other Comprehensive Income (Loss), Tax [Abstract] | ||||
Taxes on net gain (loss) on derivative instruments | 2,061 | (327) | ||
Taxes on reclassifications to net income | (1) | 61 | ||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Pension and other postretirement benefit plans: | ||||
Balance at beginning of year | (54,280) | (42,615) | ||
Amortization included in earnings (net of tax expense (benefit) of $(102) and $(156) (3) | [3] | 268 | 576 | |
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes | 268 | 576 | ||
Balance at end of period | (54,012) | (42,039) | ||
Other Comprehensive Income (Loss), Tax [Abstract] | ||||
Taxes on amortization included in net income | $ (102) | $ (156) | ||
[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 8 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 as amortized to interest expense over the period to original maturity for terminated swap agreements. See Note 8 for additional information. | |||
[3] | This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 10 for additional information. |
Changes In Shareholders' Equi_3
Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries (Reconciliation Of Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Schedule of Capitalization, Equity [Line Items] | ||
Total stockholders' equity attributable to parent, beginning balance | $ 1,337,087 | |
Noncontrolling interests in subsidiaries, beginning balance | 42,791 | |
Total shareholders' equity, beginning balance | 1,379,878 | $ 1,385,302 |
Accrual of stock-based compensation | 2,728 | 4,198 |
Withholding of shares from stock-based compensation for grantee income taxes (RSUs, and PSAs) | (2,883) | (2,656) |
Dividend equivalents on RSUs | 244 | 185 |
Net income (loss) attributable to parent | 2,072 | 13,179 |
Net income attributable to noncontrolling interest | (1,177) | (2,119) |
Net (income) loss | 895 | 11,060 |
Common stock dividends declared | (18,979) | (18,718) |
Repurchase of stock, retained earnings | (4,040) | (1,046) |
Dividend equivalents on RSUs | (244) | (185) |
Adoption of FASB Accounting Standards Update 2016-16 eliminating deferred income taxes on unrecognized gains on intra-entity transfers of assets other than inventory | 0 | (1,934) |
Other comprehensive income (loss) | (4,347) | (13,537) |
Total stockholders' equity attributable to parent, ending balance | 1,310,341 | 1,321,677 |
Noncontrolling interest in subsidiaries, ending balance | 41,737 | 40,595 |
Total shareholders' equity, ending balance | 1,352,078 | 1,362,272 |
Universal Corporation [Member] | ||
Schedule of Capitalization, Equity [Line Items] | ||
Total stockholders' equity attributable to parent, beginning balance | 1,337,087 | 1,342,429 |
Accrual of stock-based compensation | 2,728 | 4,198 |
Withholding of shares from stock-based compensation for grantee income taxes (RSUs, and PSAs) | (2,883) | (2,656) |
Dividend equivalents on RSUs | 244 | 185 |
Net income (loss) attributable to parent | 2,072 | 13,179 |
Common stock dividends declared | (18,979) | (18,718) |
Repurchase of stock, retained earnings | (4,040) | (1,046) |
Dividend equivalents on RSUs | (244) | (185) |
Adoption of FASB Accounting Standards Update 2016-16 eliminating deferred income taxes on unrecognized gains on intra-entity transfers of assets other than inventory | 0 | (1,934) |
Other comprehensive income (loss) attributable to parent | (4,470) | (13,378) |
Total stockholders' equity attributable to parent, ending balance | 1,310,341 | 1,321,677 |
Noncontrolling Interests [Member] | ||
Schedule of Capitalization, Equity [Line Items] | ||
Noncontrolling interests in subsidiaries, beginning balance | 42,791 | 42,873 |
Accrual of stock-based compensation | 0 | 0 |
Withholding of shares from stock-based compensation for grantee income taxes (RSUs, and PSAs) | 0 | 0 |
Dividend equivalents on RSUs | 0 | 0 |
Net income attributable to noncontrolling interest | (1,177) | (2,119) |
Common stock dividends declared | 0 | 0 |
Repurchase of stock, retained earnings | 0 | 0 |
Dividend equivalents on RSUs | 0 | 0 |
Adoption of FASB Accounting Standards Update 2016-16 eliminating deferred income taxes on unrecognized gains on intra-entity transfers of assets other than inventory | 0 | 0 |
Other comprehensive income (loss) attributable to noncontrolling interest | 123 | (159) |
Noncontrolling interest in subsidiaries, ending balance | 41,737 | 40,595 |
Common Stock [Member] | ||
Schedule of Capitalization, Equity [Line Items] | ||
Repurchase of common stock | (1,174) | (397) |
Common Stock [Member] | Universal Corporation [Member] | ||
Schedule of Capitalization, Equity [Line Items] | ||
Repurchase of common stock | (1,174) | (397) |
Common Stock [Member] | Noncontrolling Interests [Member] | ||
Schedule of Capitalization, Equity [Line Items] | ||
Repurchase of common stock | $ 0 | $ 0 |