{"url_path":"/sec/pyyx/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-04","source_url":"https://www.sec.gov/Archives/edgar/data/939930/0000939930-26-000017-index.html","accession_number":"0000939930-26-000017","cik":"0000939930","ticker":"PYYX","issuer_name":"PYXUS INTERNATIONAL, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/939930/0000939930-26-000017-index.html","primary_entity_key":"0000939930","primary_entity_name":"PYXUS INTERNATIONAL, INC."},"word_count":20862,"has_tables":true,"body_markdown":"Item 8. Financial Statements and Supplementary Data\n\nTable of Contents\n\nPage No.\n\n[Consolidated Statements of Operations](#i6f44eae8422d46cd9f377051509c10a4_115)\n\n[39](#i6f44eae8422d46cd9f377051509c10a4_115)\n\n[Consolidated Statements of Comprehensive Income](#i6f44eae8422d46cd9f377051509c10a4_118)\n\n[40](#i6f44eae8422d46cd9f377051509c10a4_118)\n\n[Consolidated Balance Sheets](#i6f44eae8422d46cd9f377051509c10a4_121)\n\n[41](#i6f44eae8422d46cd9f377051509c10a4_121)\n\n[Consolidated Statements of Stockholders’ Equity](#i6f44eae8422d46cd9f377051509c10a4_124)\n\n[42](#i6f44eae8422d46cd9f377051509c10a4_124)\n\n[Consolidated Statements of Cash Flows](#i6f44eae8422d46cd9f377051509c10a4_127)\n\n[43](#i6f44eae8422d46cd9f377051509c10a4_127)\n\n[Notes to Consolidated Financial Statements](#i6f44eae8422d46cd9f377051509c10a4_133)\n\n[44](#i6f44eae8422d46cd9f377051509c10a4_133)\n\n[Report of Independent Registered Public Accounting Firm](#i6f44eae8422d46cd9f377051509c10a4_226) (PCAOB ID No. 34)\n\n[84](#i6f44eae8422d46cd9f377051509c10a4_226)\n\n38\n\nPyxus International, Inc. and Subsidiaries\n\nConsolidated Statements of Operations\n\nYears Ended March 31,\n\n(in thousands, except per share data)202620252024\n\nSales and other operating revenues$2,413,000 $2,481,260 $2,032,559 \n\nCost of goods and services sold2,065,321 2,138,276 1,720,224 \n\nGross profit347,679 342,984 312,335 \n\nSelling, general, and administrative expenses162,934 170,998 160,910 \n\nOther expense, net19,193 16,410 9,439 \n\nRestructuring and asset impairment charges2,852 2,259 4,799 \n\nOperating income162,700 153,317 137,187 \n\nGain on debt retirement— 8,178 15,914 \n\nGain (loss) on pension settlement283 — (12,008)\n\nInterest expense, net134,353 128,041 125,620 \n\nIncome before income taxes and other items28,630 33,454 15,473 \n\nIncome tax expense30,344 25,053 27,281 \n\nIncome from unconsolidated affiliates, net17,371 8,132 14,992 \n\nNet income15,657 16,533 3,184 \n\nNet income attributable to noncontrolling interests1,088 1,367 521 \n\nNet income attributable to Pyxus International, Inc.$14,569 $15,166 $2,663 \n\nEarnings per share:\n\nBasic$0.56 $0.59 $0.11 \n\nDiluted$0.56 $0.59 $0.11 \n\nWeighted average number of shares outstanding:\n\nBasic25,790 25,643 25,000 \n\nDiluted25,957 25,667 25,000 \n\nSee accompanying notes to consolidated financial statements.\n\n39\n\nPyxus International, Inc. and Subsidiaries\n\nConsolidated Statements of Comprehensive Income\n\nYears Ended March 31,\n\n(in thousands)202620252024\n\nNet income$15,657 $16,533 $3,184 \n\nOther comprehensive (loss) income, net of tax:\n\nForeign currency translation adjustment936 (353)700 \n\nPension and other postretirement benefit plans(2,307)(250)4,419 \n\nCash flow hedges164 132 (2,860)\n\nTotal other comprehensive (loss) income, net of tax$(1,207)$(471)$2,259 \n\nTotal comprehensive income14,450 16,062 5,443 \n\nComprehensive income attributable to noncontrolling interests1,088 1,367 509 \n\nComprehensive income attributable to Pyxus International, Inc.$13,362 $14,695 $4,934 \n\nSee accompanying notes to consolidated financial statements.\n\n40\n\nPyxus International, Inc. and Subsidiaries\n\nConsolidated Balance Sheets\n\nMarch 31,\n\n(in thousands)20262025\n\nAssets\n\nCurrent assets\n\nCash and cash equivalents$134,337 $78,254 \n\nRestricted cash3,316 7,290 \n\nTrade receivables, net239,456 189,239 \n\nOther receivables25,451 15,040 \n\nInventories, net817,950 761,951 \n\nAdvances to suppliers, net36,337 30,745 \n\nRecoverable income taxes2,886 6,616 \n\nPrepaid expenses49,000 47,151 \n\nOther current assets21,751 21,874 \n\nTotal current assets1,330,484 1,158,160 \n\nInvestments in unconsolidated affiliates105,863 96,928 \n\nIntangible assets, net24,076 28,507 \n\nDeferred income taxes, net14,507 13,567 \n\nLong-term recoverable income taxes9,467 5,669 \n\nOther noncurrent assets35,424 33,094 \n\nRight-of-use assets31,717 29,742 \n\nProperty, plant, and equipment, net143,154 138,176 \n\nTotal assets$1,694,692 $1,503,843 \n\nLiabilities and Stockholders’ Equity\n\nCurrent liabilities\n\nNotes payable$477,132 $395,030 \n\nAccounts payable146,828 132,871 \n\nAdvances from customers174,995 135,607 \n\nAccrued expenses and other current liabilities114,760 90,912 \n\nIncome taxes payable9,145 11,001 \n\nOperating leases payable9,915 8,514 \n\nCurrent portion of long-term debt— 12 \n\nTotal current liabilities932,775 773,947 \n\nLong-term taxes payable4,112 5,187 \n\nLong-term debt455,757 454,850 \n\nDeferred income taxes11,961 8,818 \n\nLiability for unrecognized tax benefits28,074 18,635 \n\nLong-term leases21,020 19,584 \n\nPension, postretirement, and other long-term liabilities59,886 57,052 \n\nTotal liabilities$1,513,585 $1,338,073 \n\nCommitments and contingencies\n\nStockholders’ equity\n\nCommon stock—no par value:\n\nAuthorized shares (250,000 for all periods)\n\nIssued and outstanding shares (24,608 for all periods)\n$393,921 $392,899 \n\nRetained deficit(225,556)(240,125)\n\nAccumulated other comprehensive income6,123 7,315 \n\nTotal stockholders’ equity of Pyxus International, Inc.174,488 160,089 \n\nNoncontrolling interests6,619 5,681 \n\nTotal stockholders’ equity181,107 165,770 \n\nTotal liabilities and stockholders’ equity$1,694,692 $1,503,843 \n\nSee accompanying notes to consolidated financial statements.\n\n41\n\nPyxus International, Inc. and Subsidiaries\n\nConsolidated Statements of Stockholders’ Equity\n\nAttributable to Pyxus International, Inc.\n\nAccumulated Other Comprehensive Income\n\n(in thousands)Common\nStockRetained\nDeficitCurrency\nTranslation\nAdjustmentPensions,\nNet of TaxDerivatives,\nNet of TaxNoncontrolling\nInterestsTotal\nStockholders’\nEquity\n\nBalance, March 31, 2025$392,899 $(240,125)$(6,045)$12,516 $844 $5,681 $165,770 \n\nNet (loss) income— (15,825)— — — 562 (15,263)\n\nEquity-based compensation237 — — — — — 237 \n\nOther comprehensive income, net of tax— — 2,039 — 1,457 — 3,496 \n\nBalance, June 30, 2025$393,136 $(255,950)$(4,006)$12,516 $2,301 $6,243 $154,240 \n\nNet loss— (879)— — — (23)(902)\n\nDividends— — — — — (135)(135)\n\nEquity-based compensation256 — — — — — 256 \n\nOther comprehensive loss, net of tax— — (477)— (1,016)— (1,493)\n\nBalance, September 30, 2025$393,392 $(256,829)$(4,483)$12,516 $1,285 $6,085 $151,966 \n\nNet income— 16,903 — — — 259 17,162 \n\nEquity-based compensation272 — — — — — 272 \n\nOther comprehensive income (loss), net of tax— — 154 (1,521)(444)— (1,811)\n\nBalance, December 31, 2025$393,664 $(239,926)$(4,329)$10,995 $841 $6,344 $167,589 \n\nNet income— 14,370 — — — 290 14,660 \n\nEquity-based compensation257 — — — — — 257 \n\nOther comprehensive (loss) income, net of tax— — (780)(771)167 (15)(1,399)\n\nBalance, March 31, 2026$393,921 $(225,556)$(5,109)$10,224 $1,008 $6,619 $181,107 \n\nSee accompanying notes to consolidated financial statements.\n\nPyxus International, Inc. and Subsidiaries\n\nConsolidated Statements of Stockholders’ Equity (continued)\n\nAttributable to Pyxus International, Inc.\n\nAccumulated Other Comprehensive Income\n\n(in thousands)Common\nStockRetained\nDeficitCurrency\nTranslation\nAdjustmentPensions,\nNet of TaxDerivatives,\nNet of TaxNoncontrolling\nInterestsTotal\nStockholders’\nEquity\n\nBalance, March 31, 2024$389,789 $(255,291)$(5,692)$12,766 $712 $4,539 $146,823 \n\nNet income— 4,642 — — — 310 4,952 \n\nEquity-based compensation3,031 — — — — — 3,031 \n\nOther comprehensive income (loss), net of tax— — 543 — (2,237)— (1,694)\n\nBalance, June 30, 2024$392,820 $(250,649)$(5,149)$12,766 $(1,525)$4,849 $153,112 \n\nNet loss— (3,227)— — — (46)(3,273)\n\nDividends— — — — — (225)(225)\n\nEquity-based compensation601 — — — — — 601 \n\nShare repurchases(1,000)— — — — — (1,000)\n\nOther comprehensive income, net of tax— — 278 — 1,266 — 1,544 \n\nBalance, September 30, 2024$392,421 $(253,876)$(4,871)$12,766 $(259)$4,578 $150,759 \n\nNet income— 18,898 — — — 512 19,410 \n\nEquity-based compensation267 — — — — — 267 \n\nOther comprehensive loss, net of tax— — (976)— (2,453)— (3,429)\n\nBalance, December 31, 2024$392,688 $(234,978)$(5,847)$12,766 $(2,712)$5,090 $167,007 \n\nNet (loss) income— (5,147)— — — 591 (4,556)\n\nEquity-based compensation211 — — — — — 211 \n\nOther comprehensive (loss) income, net of tax— — (198)(250)3,556 — 3,108 \n\nBalance, March 31, 2025$392,899 $(240,125)$(6,045)$12,516 $844 $5,681 $165,770 \n\nSee accompanying notes to consolidated financial statements.\n\nPyxus International, Inc. and Subsidiaries\n\nConsolidated Statements of Stockholders’ Equity (continued)\n\nAttributable to Pyxus International, Inc.\n\nAccumulated Other Comprehensive Income\n\n(in thousands)Common\nStockRetained\nDeficitCurrency\nTranslation\nAdjustmentPensions,\nNet of TaxDerivatives,\nNet of TaxNoncontrolling\nInterestTotal\nStockholders’\nEquity\n\nBalance, March 31, 2023$390,290 $(257,954)$(6,392)$8,335 $3,572 $3,979 $141,830 \n\nNet income (loss)— 804 — — — (34)770 \n\nOther comprehensive income, net of tax— — 707 — 862 — 1,569 \n\nBalance, June 30, 2023$390,290 $(257,150)$(5,685)$8,335 $4,434 $3,945 $144,169 \n\nNet income (loss)— 8,095 — — — (199)7,896 \n\nOther— — — — — 493 493 \n\nOther comprehensive loss, net of tax— — (1,545)— (1,000)— (2,545)\n\nBalance, September 30, 2023$390,290 $(249,055)$(7,230)$8,335 $3,434 $4,239 $150,013 \n\nNet income— 3,835 — — — 344 4,179 \n\nOther(501)— — — — 8 (493)\n\nDividends— — — — — (450)(450)\n\nOther comprehensive income (loss), net of tax— — 2,185 3,511 (1,288)— 4,408 \n\nBalance, December 31, 2023$389,789 $(245,220)$(5,045)$11,846 $2,146 $4,141 $157,657 \n\nNet (loss) income— (10,071)— — — 410 (9,661)\n\nOther comprehensive (loss) income, net of tax— — (647)920 (1,434)(12)(1,173)\n\nBalance, March 31, 2024$389,789 $(255,291)$(5,692)$12,766 $712 $4,539 $146,823 \n\nSee accompanying notes to consolidated financial statements.\n\n42\n\nPyxus International, Inc. and Subsidiaries\n\nConsolidated Statements of Cash Flows\n\nYears Ended March 31,\n\n(in thousands)202620252024\n\nOperating activities:\n\nNet income$15,657 $16,533 $3,184 \n\nAdjustments to reconcile net income to net cash used in operating activities:\n\nDepreciation and amortization20,893 20,334 19,250 \n\nDebt amortization/interest10,567 11,235 8,559 \n\nGain on debt retirement— (8,178)(15,914)\n\nLoss on foreign currency transactions6,554 4,922 4,009 \n\n(Gain) loss on pension settlement(283)— 12,008 \n\nEquity-based compensation1,022 4,110 — \n\nIncome from unconsolidated affiliates, net of dividends(8,935)4,317 (506)\n\nChanges in operating assets and liabilities, net:\n\nTrade and other receivables(254,881)(208,374)(167,600)\n\nInventories and advances to suppliers(60,350)156,309 (136,010)\n\nDeferred items11,539 1,052 3,240 \n\nRecoverable income taxes(1,486)(4,721)(2,689)\n\nPayables and accrued expenses31,512 (49,190)17,531 \n\nAdvances from customers34,798 45,937 55,302 \n\nPrepaid expenses(1,642)8,943 (4,506)\n\nIncome taxes(2,182)2,719 (8,207)\n\nOther operating assets and liabilities(1,221)(8,419)4,114 \n\nOther, net(10,013)(10,915)(6,735)\n\nNet cash used in operating activities$(208,451)$(13,386)$(214,970)\n\nInvesting activities:\n\nPurchases of property, plant, and equipment$(22,051)$(23,028)$(21,043)\n\nProceeds from sale of property, plant, and equipment5,215 3,770 4,312 \n\nCollections from beneficial interests in securitized trade receivables200,684 188,312 175,911 \n\nOther, net7,575 1,584 269 \n\nNet cash provided by investing activities$191,423 $170,638 $159,449 \n\nFinancing activities:\n\nNet proceeds (repayments) from short-term borrowings$77,293 $(102,550)$122,483 \n\nProceeds from revolving loan facilities281,000 363,000 331,000 \n\nRepayment of revolving loan facilities(281,000)(363,000)(356,000)\n\nRepayment of long-term borrowings— (55,822)(60,342)\n\nDebt issuance costs(5,350)(9,106)(11,751)\n\nOther, net580 217 171 \n\nNet cash provided by (used in) financing activities$72,523 $(167,261)$25,561 \n\nEffect of exchange rate changes on cash(3,386)(4,240)(9,156)\n\nIncrease (decrease) in cash, cash equivalents, and restricted cash52,109 (14,249)(39,116)\n\nCash and cash equivalents at beginning of period78,254 92,569 136,733 \n\nRestricted cash at beginning of period7,290 7,224 2,176 \n\nCash, cash equivalents, and restricted cash at end of period$137,653 $85,544 $99,793 \n\nOther information:\n\nCash paid for income taxes, net$20,440 $31,101 $22,501 \n\nCash paid for income taxes related to debt exchange— — 12,543 \n\nCash paid for interest, net119,470 115,009 109,518 \n\nNoncash investing activities:\n\nNoncash amounts obtained as a beneficial interest in exchange for transferring trade receivables in a securitization transaction198,567 241,069 160,041 \n\nSee accompanying notes to consolidated financial statements.\n\n43\n\nPyxus International, Inc. and Subsidiaries\n\nNotes to Consolidated Financial Statements\n\n(in thousands, except per share data)Page No.\n\n[Note 1](#i6f44eae8422d46cd9f377051509c10a4_136)\n\n[Basis of Presentation and Summary of Significant Accounting Policies](#i6f44eae8422d46cd9f377051509c10a4_136)\n\n[45](#i6f44eae8422d46cd9f377051509c10a4_136)\n\n[Note 2](#i6f44eae8422d46cd9f377051509c10a4_139)\n\n[New Accounting Standards](#i6f44eae8422d46cd9f377051509c10a4_139)\n\n[51](#i6f44eae8422d46cd9f377051509c10a4_139)\n\n[Note 3](#i6f44eae8422d46cd9f377051509c10a4_142)\n\n[Revenue Recognition](#i6f44eae8422d46cd9f377051509c10a4_142)\n\n[52](#i6f44eae8422d46cd9f377051509c10a4_142)\n\n[Note 4](#i6f44eae8422d46cd9f377051509c10a4_145)\n\n[Other Expense, Net](#i6f44eae8422d46cd9f377051509c10a4_145)\n\n[52](#i6f44eae8422d46cd9f377051509c10a4_145)\n\n[Note 5](#i6f44eae8422d46cd9f377051509c10a4_148)\n\n[Income Taxes](#i6f44eae8422d46cd9f377051509c10a4_148)\n\n[53](#i6f44eae8422d46cd9f377051509c10a4_148)\n\n[Note 6](#i6f44eae8422d46cd9f377051509c10a4_151)\n\n[Earnings](#i6f44eae8422d46cd9f377051509c10a4_151)[Per Share](#i6f44eae8422d46cd9f377051509c10a4_151)\n\n[57](#i6f44eae8422d46cd9f377051509c10a4_151)\n\n[Note 7](#i6f44eae8422d46cd9f377051509c10a4_154)\n\n[Restricted Cash](#i6f44eae8422d46cd9f377051509c10a4_154)\n\n[57](#i6f44eae8422d46cd9f377051509c10a4_154)\n\n[Note 8](#i6f44eae8422d46cd9f377051509c10a4_2161)\n\n[Trade Receivables, Net](#i6f44eae8422d46cd9f377051509c10a4_2161)\n\n[57](#i6f44eae8422d46cd9f377051509c10a4_2161)\n\n[Note 9](#i6f44eae8422d46cd9f377051509c10a4_157)\n\n[Inventories, Net](#i6f44eae8422d46cd9f377051509c10a4_157)\n\n[58](#i6f44eae8422d46cd9f377051509c10a4_157)\n\n[Note 10](#i6f44eae8422d46cd9f377051509c10a4_160)\n\n[Advances to Suppliers, Net](#i6f44eae8422d46cd9f377051509c10a4_160)\n\n[58](#i6f44eae8422d46cd9f377051509c10a4_160)\n\n[Note 11](#i6f44eae8422d46cd9f377051509c10a4_163)\n\n[Equity Method Investments](#i6f44eae8422d46cd9f377051509c10a4_163)\n\n[58](#i6f44eae8422d46cd9f377051509c10a4_163)\n\n[Note 12](#i6f44eae8422d46cd9f377051509c10a4_166)\n\n[Variable Interest Entities](#i6f44eae8422d46cd9f377051509c10a4_166)\n\n[59](#i6f44eae8422d46cd9f377051509c10a4_166)\n\n[Note 13](#i6f44eae8422d46cd9f377051509c10a4_169)\n\n[Intangible Assets, Net](#i6f44eae8422d46cd9f377051509c10a4_169)\n\n[59](#i6f44eae8422d46cd9f377051509c10a4_169)\n\n[Note 14](#i6f44eae8422d46cd9f377051509c10a4_172)\n\n[Leases](#i6f44eae8422d46cd9f377051509c10a4_172)\n\n[60](#i6f44eae8422d46cd9f377051509c10a4_172)\n\n[Note 15](#i6f44eae8422d46cd9f377051509c10a4_175)\n\n[Property, Plant, and Equipment, Net](#i6f44eae8422d46cd9f377051509c10a4_175)\n\n[61](#i6f44eae8422d46cd9f377051509c10a4_175)\n\n[Note 16](#i6f44eae8422d46cd9f377051509c10a4_178)\n\n[Debt Arrangements](#i6f44eae8422d46cd9f377051509c10a4_178)\n\n[62](#i6f44eae8422d46cd9f377051509c10a4_178)\n\n[Note 17](#i6f44eae8422d46cd9f377051509c10a4_181)\n\n[Securitized Receivables](#i6f44eae8422d46cd9f377051509c10a4_181)\n\n[67](#i6f44eae8422d46cd9f377051509c10a4_181)\n\n[Note 18](#i6f44eae8422d46cd9f377051509c10a4_184)\n\n[Guarantees](#i6f44eae8422d46cd9f377051509c10a4_184)\n\n[68](#i6f44eae8422d46cd9f377051509c10a4_184)\n\n[Note 19](#i6f44eae8422d46cd9f377051509c10a4_187)\n\n[Derivative Financial Instruments](#i6f44eae8422d46cd9f377051509c10a4_187)\n\n[68](#i6f44eae8422d46cd9f377051509c10a4_187)\n\n[Note 20](#i6f44eae8422d46cd9f377051509c10a4_190)\n\n[Fair Value Measurements](#i6f44eae8422d46cd9f377051509c10a4_190)\n\n[69](#i6f44eae8422d46cd9f377051509c10a4_190)\n\n[Note 21](#i6f44eae8422d46cd9f377051509c10a4_193)\n\n[Pension and Other Postretirement Benefits](#i6f44eae8422d46cd9f377051509c10a4_193)\n\n[70](#i6f44eae8422d46cd9f377051509c10a4_193)\n\n[Note 22](#i6f44eae8422d46cd9f377051509c10a4_196)\n\n[Contingencies and Other Information](#i6f44eae8422d46cd9f377051509c10a4_196)\n\n[75](#i6f44eae8422d46cd9f377051509c10a4_196)\n\n[Note 23](#i6f44eae8422d46cd9f377051509c10a4_199)\n\n[Accumulated Other Comprehensive](#i6f44eae8422d46cd9f377051509c10a4_199)[Income](#i6f44eae8422d46cd9f377051509c10a4_199)\n\n[76](#i6f44eae8422d46cd9f377051509c10a4_199)\n\n[Note 24](#i6f44eae8422d46cd9f377051509c10a4_205)\n\n[Equity-Based Compensation](#i6f44eae8422d46cd9f377051509c10a4_205)\n\n[77](#i6f44eae8422d46cd9f377051509c10a4_205)\n\n[Note 25](#i6f44eae8422d46cd9f377051509c10a4_208)\n\n[Related Party Transactions](#i6f44eae8422d46cd9f377051509c10a4_208)\n\n[79](#i6f44eae8422d46cd9f377051509c10a4_208)\n\n[Note 26](#i6f44eae8422d46cd9f377051509c10a4_211)\n\n[Segment Information](#i6f44eae8422d46cd9f377051509c10a4_211)\n\n[80](#i6f44eae8422d46cd9f377051509c10a4_211)\n\n[Note 27](#i6f44eae8422d46cd9f377051509c10a4_214)\n\n[Subsequent Events](#i6f44eae8422d46cd9f377051509c10a4_214)\n\n[83](#i6f44eae8422d46cd9f377051509c10a4_214)\n\n44\n\n1. Basis of Presentation and Summary of Significant Accounting Policies\n\nPyxus International, Inc. (the \"Company,\" \"Pyxus,\" \"we,\" \"us,\" or \"our\") is a global agricultural company with businesses having more than 150 years of experience delivering value-added products and services to businesses and customers. Pyxus and its subsidiaries are trusted providers of responsibly sourced, independently verified, sustainable, and traceable products and ingredients. The Company has a diversified geographic footprint with operations in Africa, Asia, Europe, North America, and South America.\n\nAs the context requires, the \"Company\" and \"Pyxus\" also includes the consolidated subsidiaries of Pyxus International, Inc. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (\"U.S. GAAP\") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission applicable to annual reporting on Form 10-K.\n\nPrinciples of Consolidation\n\nThe consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries. Intercompany accounts and transactions have been eliminated.\n\nEquity Method Investments\n\nThe Company’s equity method investments and its cost method investments are non-marketable securities. When not required to consolidate its investment in another entity, the Company uses the equity method if it (i) can exercise significant influence over the other entity, and (ii) holds common stock and/or in-substance common stock of the other entity. Under the equity method, investments are carried at cost, plus or minus the Company’s equity in the increases or decreases of the investee’s net assets after the date of acquisition. The Company continually monitors its equity method investments for factors indicating other-than-temporary impairment. The Company’s proportionate share of the net income or loss of these entities is included in income from unconsolidated affiliates, net within the consolidated statements of operations. Dividends received from the investee reduce the carrying amount of the investment. Distributions from equity method investees are accounted for based on the cumulative earnings approach to determine whether they represent a return of investment or a return on investment.\n\nVariable Interest Entities\n\nThe Company holds variable interests in multiple variable interest entities, which primarily procure or process inventory on behalf of the Company or are securitization entities. These variable interests relate to equity investments, receivables, guarantees, and securitized receivables. The Company is not the primary beneficiary of most of these entities as it does not have the power to direct the activities that most significantly impact the economic performance of these entities, due to these entities’ management and board of directors’ structure. As a result, most of these variable interest entities are not consolidated. Creditors of the Company’s variable interest entities do not have recourse against the general credit of the Company.\n\nThe Company’s investments in unconsolidated variable interest entities are classified as investments in unconsolidated affiliates in the consolidated balance sheets. The Company’s assets and liabilities with variable interest entities are classified as related party balances. The Company’s maximum exposure to loss in these variable interest entities is represented by the investments, receivables, guarantees, and the deferred purchase price on the sale of securitized receivables.\n\nUse of Estimates\n\nThe preparation of these consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. These estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. Actual results may differ from the Company’s estimates and assumptions. Estimates are used in accounting for, among other things, revenue recognition, pension and postretirement health care benefits, inventory reserves, credit loss reserves, bank loan guarantees to suppliers and unconsolidated subsidiaries, reserves for advances to suppliers, useful lives for depreciation and amortization, future cash flows associated with impairment testing for long-lived assets, deferred tax assets and uncertain income tax positions, intrastate tax credits, incremental borrowing rates for the present value of lease payments, fair value determinations of financial assets and liabilities, including derivatives, securitized beneficial interests, and counterparty risk.\n\nReclassifications\n\nCertain prior-period amounts were reclassified to conform to the current-year presentation in the consolidated statements of cash flows and the segment information footnote disclosure.\n\nRevenue Recognition\n\nThe Company’s revenue consists primarily of the sale of processed tobacco and fees charged for processing and related services to the manufacturers of tobacco products. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company’s performance obligations are satisfied when the transfer of control of the distinct\n\n45\n\nproduct or service to the customer occurs. For products, control is transferred, and revenue is recognized, at a point in time, in accordance with the shipping terms of the contract. For processing and related services, control is transferred, and revenue is recognized, over time using the input method based on a kilogram of packed tobacco. A kilogram of processed tobacco (or tobacco processing services resulting in a kilogram of processed tobacco) is the only material and distinct performance obligation for the Company’s tobacco revenue streams. The Company does not disclose information related to its unsatisfied performance obligations with an expected original duration of one year or less. Contract costs primarily include labor, material, shipping and handling, and overhead expenses.\n\nThe transaction price is the amount of consideration to which the Company expects to be entitled to receive in exchange for transferring goods or providing services under the contract. The transaction price consists of fixed cash consideration, which is the invoiced amount, and an estimate for variable consideration. The Company's variable consideration includes price adjustments for claims resulting from tobacco that does not meet customer specifications due to various reasons such as shrinkage, improper blend, or chemical makeup, etc. The Company's process to handle customer claims includes a claims allowance that is assessed quarterly and recorded within accrued expenses and other current liabilities in the consolidated balance sheets and as contra-revenue within sales and other operating revenues. The Company estimates expected claims using the expected value method due to the large number of contracts with similar characteristics that we enter into with customers, the high volumes of tobacco we sell each year, and our actual history of past claims.\n\nWarehousing fees for storing customer-controlled tobacco until the customer requests shipment represents another form of variable consideration present in certain contracts with our customers. Warehousing fees are either included in the transaction price for tobacco based on the customers’ best estimate of the date they will request shipment, or is separately charged using a per-day storage rate. When the Company enters into a contract with a customer, the price communicated is the amount of consideration the Company expects to receive.\n\nTaxes Collected from Customers\n\nCertain subsidiaries are subject to value-added taxes on local sales. Value-added taxes on local sales are recorded in sales and other operating revenues and cost of goods and services sold in the consolidated statements of operations.\n\nShipping and Handling\n\nThe Company elected to account for shipping and handling as activities to fulfill its performance obligations, regardless of when control transfers. Shipping and handling fees that are billed to customers are recognized in sales and other operating revenues and the associated shipping and handling costs are recognized in cost of goods and services sold in the consolidated statements of operations.\n\nAdvances From Customers\n\nOn occasion, the Company receives advances and deposits from customers for future promises to deliver goods or services. These cash advance payments are refundable to the customer without penalty. The balance in advances from customers is reduced as the Company satisfies performance obligations under the contract with the customer and the criteria for revenue recognition is met.\n\nIncome Taxes\n\nIncome taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities reflect the expected future tax consequences of events that are recognized in the consolidated financial statements in different periods than they are recognized for tax purposes. Deferred tax assets and liabilities are established using enacted tax rates in effect for the year in which these items are expected to reverse.\n\nThe realization of deferred tax assets is dependent on generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. When assessing the need for a valuation allowance, the Company considers carryback potential, historical earnings, future reversals of existing taxable temporary differences (including liabilities for unrecognized tax benefits), forecasted operating profits and tax planning strategies.\n\nThe Company’s provision for income taxes is based on pre-tax income, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. The Company recognizes tax benefits from uncertainties if it believes it is more-likely-than-not it will be sustained based on the technical merits. Penalties and interest related to income taxes, if incurred, are included in income tax expense.\n\n46\n\nEarnings Per Share\n\nThe calculations of basic and diluted earnings per share are based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively. Under the treasury stock method, restricted stock units will have a dilutive effect when the respective period’s average market price of the Company’s common stock exceeds the assumed exercise proceeds, and the average amount of cost not yet recognized. Performance based stock units are included in diluted earnings per share if the performance targets have been met at the end of the reporting period. Share-based payment awards that provide contingently issuable shares upon a performance or market condition are included in basic and diluted earnings per share only if the condition is met as of the end of the reporting period.\n\nCash, Cash Equivalents, and Restricted Cash\n\nCash and cash equivalents include cash in banks and highly liquid investments with original maturities of three months or less and are stated at cost, which approximates fair value. Cash that is subject to legal restrictions for withdrawal or use in our operations is classified as restricted cash, and primarily relates to amounts held in escrow for customs or performance bonds.\n\nTrade Receivables, Net\n\nTrade receivables are recorded at the invoiced amount less an estimated allowance for expected credit losses. The Company's trade receivables do not bear interest. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 60 days. In addition to estimating an allowance based on specific identification of certain receivables that have a higher probability of not being paid, the Company also records an estimate for expected credit losses for the remaining receivables in the aggregate using a loss-rate method that considers historical bad debts, age of customer receivable balances, and current customer receivable balances. The Company has elected the practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the customer receivable. Balances are written-off when determined to be uncollectible. The provision for expected credit losses is recorded in selling, general, and administrative expenses in the consolidated statements of operations.\n\nSecuritized Receivables\n\nThe Company sells trade receivables to unaffiliated financial institutions under multiple accounts receivable securitization facilities. Under these facilities, receivables sold for cash are removed from the consolidated balance sheets. Under some of the facilities, a portion of the purchase price for the receivables is paid by the unaffiliated financial institutions in cash and the balance is a deferred purchase price receivable, which is paid as payments on the receivables are collected from account debtors.\n\nThe net cash proceeds received by the Company at the time of sale are disclosed as an operating activity in the consolidated statements of cash flows. The deferred purchase price receivable represents a continuing involvement and a beneficial interest in the transferred financial assets and is recognized at fair value as part of the sale transaction. The deferred purchase price receivables are included in trade and other receivables, net in the consolidated balance sheets and are valued using unobservable inputs (i.e., Level 3 inputs), primarily discounted cash flow. The net cash proceeds received by the Company as deferred purchase price are disclosed as an investing activity in the consolidated statements of cash flows. Additionally, beneficial interests received in exchange for transferring trade receivables in a securitization transaction are disclosed as a noncash investing activity in the consolidated statements of cash flows.\n\nThe difference between the carrying amount of the receivables sold under these facilities and the sum of the cash and fair value of the other assets received at the time of transfer is recognized as a loss on sale of the related receivables and recorded in other expense, net in the consolidated statements of operations. Program costs are recorded in other expense, net in the consolidated statements of operations.\n\nInventories, Net\n\nCosts in inventory include processed tobacco inventory, unprocessed tobacco inventory, and other inventory. Costs of unprocessed tobacco inventories are determined by the average cost method, which include the cost of green tobacco. Costs of processed tobacco inventories are determined by the average cost method, which include both the cost of unprocessed tobacco, as well as direct and indirect costs related to processing the product. Costs of other inventory are determined by the first-in, first-out method, which include costs of packing materials, agricultural supplies such as seed, fertilizer, herbicides, and pesticides, and non-tobacco agricultural products.\n\nInventories are carried at the lower of cost and net realizable value (\"NRV\"). NRV represents the estimated selling price in the ordinary course of business for similar grades of tobacco for uncommitted inventories, and the expected selling price to the customer for committed inventories, less reasonably predictable costs of completion, disposal, and transportation. If the NRV is estimated to be less than the cost, the Company writes down the carrying value of its inventories to NRV. When valuing its inventories, the Company also takes into consideration obsolescence based on the age and quality of the tobacco. Inventory write-downs resulting from NRV adjustments or due to obsolescence are recorded in cost of goods and services sold in the consolidated statements of operations.\n\n47\n\nAdvances to Tobacco Suppliers, Net\n\nThe Company purchases seeds, fertilizer, pesticides, and other products related to growing tobacco and advances them to tobacco suppliers to assist in crop production. These seasonal advances are short term, represent prepaid inventory, and are recorded as advances to tobacco suppliers. Upon delivery of tobacco, part of the purchase price to the supplier is paid in cash and part through a reduction of the advance balance. The advances applied to the delivery are reclassified from advances to unprocessed inventory.\n\nThe Company also has noncurrent advances, which generally represent the cost of advances to tobacco suppliers for infrastructure, such as curing barns, recovered through the delivery of tobacco to the Company by the tobacco suppliers. Tobacco suppliers may not be able to settle the entirety of advances due each year. In these situations, the Company may allow the farmers to deliver tobacco over future crop years to recover its advances. Noncurrent advances to tobacco suppliers are recorded in other noncurrent assets in the consolidated balance sheets.\n\nThe Company accounts for its advances to tobacco suppliers using a cost accumulation model, which reports advances at the lower of cost or recoverable amounts, exclusive of the mark-up and interest. The mark-up and interest on its advances are recognized upon delivery of tobacco as a decrease in the cost of the current crop. A provision for tobacco supplier bad debts is recorded in cost of goods and services sold in the consolidated statements of operations for abnormal yield adjustments or unrecovered advances. Normal yield adjustments are capitalized into the cost of the current crop and are recorded in cost of goods and services sold as that crop is sold.\n\nIntangible Assets, Net\n\nThe Company has intangible assets with definite useful lives. These intangible assets are assessed annually and tested for impairment whenever factors indicate the carrying amount may not be recoverable. The trade name, customer relationship, and technology intangibles are amortized on a straight-line basis over fourteen, nine to twelve years, and eight years, respectively. The amortization period is the term of the contract or, if no term is specified in the contract, management’s best estimate of the useful life based on experience. Technology includes internally developed software that is amortized on a straight-line basis over three to five years. Amortization commences once substantial testing activities are completed, and the software is ready for its intended use. Events and changes in circumstance may either result in a revision in the estimated useful life or impairment of an intangible. Amortization expense associated with finite-lived intangible assets is recorded in selling, general, and administrative expenses in the consolidated statements of operations.\n\nLeases\n\nThe Company has operating leases for land, buildings, automobiles, and other equipment that expire at various dates through fiscal year 2040. The Company does not have material finance leases. Leases for real estate generally have initial terms ranging from two to thirteen years, excluding renewal options. Leases for equipment generally have initial terms ranging from two to five years excluding renewal options. Most leases have fixed rentals, with many of the real estate leases requiring additional payments for real estate taxes. These lease terms may include optional renewals, terminations, or purchases, which are considered in the Company’s assessments when such options are reasonably certain to be exercised.\n\nThe Company measures right-of-use assets and related lease liabilities based on the present value of remaining lease payments, including in-substance fixed payments, the current payment amount when payments depend on an index or rate (e.g., inflation adjustments, market renewals), and the amount the Company believes is probable to be paid to the lessor under residual value guarantees, when applicable. Lease contracts may include fixed payments for non-lease components, such as maintenance, which are included in the measurement of lease liabilities for certain asset classes based on the Company’s election to combine lease and non-lease components. Certain of our leases contain variable lease payments that are not known at the commencement date and are determinable based on the performance or use of the underlying asset. Variable lease payments are not included in the consolidated balance sheets and are expensed as incurred. The Company does not recognize short-term leases, those lease contracts with durations of twelve months or less, in the consolidated balance sheets, and the related lease payments are expensed on a straight-line basis over the lease term.\n\nAs applicable borrowing rates are not typically implied within the lease arrangements, the Company discounts lease payments based on its estimated incremental borrowing rate at lease commencement, or modification, which is based on the Company’s estimated credit rating, the lease term at commencement, and the contract currency of the lease arrangement.\n\nProperty, Plant, and Equipment, Net\n\nProperty, plant, and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Buildings are depreciated over a range of nine to forty years. Machinery and equipment are depreciated over a range of two to nineteen years. Repairs and maintenance costs are expensed as incurred. The cost of major improvements is capitalized. Upon sale or disposition of an asset, the cost and related accumulated depreciation are removed from the balance sheet accounts and the resulting gain or loss is included in other expense, net in the consolidated statements of operations.\n\n48\n\nLong-lived assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows at which the asset could be bought or sold in a current transaction between willing parties and may be estimated using several techniques, including quoted market prices or valuations, present value techniques based on estimates of cash flows, or multiples of earnings or revenue performance measures.\n\nGuarantees\n\nThe Company’s guarantees are primarily related to bank loans to suppliers for crop production financing. The Company also guarantees bank loans of certain unconsolidated subsidiaries primarily in Asia and South America. Under longer-term arrangements, the Company may guarantee financing on suppliers’ construction of curing barns or other tobacco production assets. Guaranteed loans are generally repaid concurrent with the delivery of tobacco to the Company. The Company is obligated to repay guaranteed loans should the supplier default. If default occurs, the Company has recourse against its various suppliers and their production assets. The fair value of the Company’s guarantees is recorded in accrued expenses and other current liabilities in the consolidated balance sheets and included in crop costs, except for the joint venture in Brazil, which are included in other receivables.\n\nIn Brazil, certain suppliers obtain government subsidized rural credit financing from local banks that is guaranteed by the Company. Upon delivery of tobacco, the Company remits payments to the local banks on behalf of the suppliers before paying the supplier. Amounts owed to suppliers are recorded in accounts payable in the consolidated balance sheets. Rural credit financing repayment is due to local banks based on contractual due dates.\n\nDerivative Financial Instruments\n\nWe are exposed to foreign currency exchange rate risk due to the scope of the Company's international operations. To manage fluctuations in foreign currency exchange rates, the Company may enter into forward or option currency contracts. These derivative financial instruments are either designated as cash flow hedges of forecasted transactions, including purchases of green tobacco, other processing-related costs, and selling, general, and administrative expenses, or are not designated as hedging instruments and are used to partially offset the immediate earnings impact of foreign currency exchange rate fluctuations on certain foreign currency denominated transactions, or monetary assets and liabilities. The Company does not enter into derivative instruments for speculative or trading purposes.\n\nDerivative assets and liabilities are recorded in other current assets and accrued expenses and other current liabilities, respectively, within the consolidated balance sheets and are measured at fair value. Changes in fair value are recognized in earnings, unless the derivative is designated and qualifies to be in a hedge accounting relationship. For derivatives designated in a hedge accounting relationship, the Company evaluates hedge effectiveness at inception and on an ongoing basis. If a hedge relationship is no longer expected to be effective, the derivative in that relationship is de-designated and hedge accounting is discontinued.\n\nChanges in fair value of foreign currency derivatives designated in cash flow hedging relationships are recorded in accumulated other comprehensive income in the consolidated balance sheets and reclassified to earnings when the hedged item affects earnings. Cash flows from derivatives are classified in the consolidated statements of cash flows in the same category as the cash flows from the underlying hedged items. The Company has elected not to offset fair value amounts recognized for derivative instruments with the same counterparty under a master netting agreement.\n\nPension and Other Postretirement Benefits\n\nRetirement Benefits\n\nThe Company maintains various excess benefit and supplemental plans that provide additional benefits to certain individuals in key positions and individuals whose compensation and the resulting benefits that would have been paid are limited by regulations imposed by the Internal Revenue Code. In addition, a Supplemental Retirement Account Plan defined contribution plan is maintained. Additional non-U.S. plans sponsored by certain subsidiaries cover certain current and former employees.\n\nPostretirement Health and Life Insurance Benefits\n\nThe Company provides certain health and life insurance benefits to retired U.S. employees (and their eligible dependents) who meet specified age and service requirements. The plan excludes new employees after September 2005 and caps the Company’s annual cost commitment to postretirement benefits for retirees. The Company retains the right, subject to existing agreements, to modify or eliminate these postretirement health and life insurance benefits in the future. The Company provides certain health and life insurance benefits to retired Brazilian directors and certain retirees located in Europe including their eligible dependents who meet specified requirements.\n\n49\n\nPlan Assets\n\nThe Company’s policy is to contribute amounts to the plans sufficient to meet or exceed funding requirements of local governmental rules and regulations. The Company’s investment objectives for plan assets are to generate consistent total investment return to pay anticipated plan benefits, while minimizing long-term costs and portfolio volatility. The financial objectives underlying this policy include maintaining plan contributions at a reasonable level relative to benefits provided and assuring unfunded obligations do not grow to a level that would adversely affect the Company’s financial health. Portfolio performance is measured against investment objectives and objective benchmarks. The portfolio objective is to exceed the actuarial return on assets assumption. The Company is exploring partial risk transfers and/or full plan terminations and has implemented a Liability Driven Investment (\"LDI\") strategy to maintain the high funded status and immunize the portfolio from excessive market volatility. Management and the plan’s consultant regularly review portfolio allocations and periodically rebalance the portfolio to the targeted allocations according to the guidelines set forth in the Company’s investment policy. Equity securities do not include the Company’s common stock. The Company’s diversification and risk control processes serve to minimize the concentration and experience of risk. There are no significant concentrations of risk, in terms of sector, industry, geography, or individual company or companies.\n\nThe Company’s plan assets primarily consist of cash and cash equivalents, GBP Sterling denominated fixed income securities, and real estate investments. The Plan has transitioned to a LDI strategy, which consists of high-quality sovereign and corporate bonds whose interest rate sensitivity matches that of the plans’ liabilities. Plan assets are measured at fair value annually on March 31, the measurement date. The following are descriptions, valuation methodologies, and inputs used to determine the fair value of each major category of plan assets:\n\n•Cash and cash equivalents include short-term investment funds, primarily in diversified portfolios of investment grade money market instruments that are valued using quoted market prices or other valuation methods and classified as Level 1 or Level 2 in the fair value hierarchy.\n\n•Investments in equity and fixed income mutual funds are publicly traded and valued primarily using quoted market prices and generally classified as Level 1 in the fair value hierarchy.\n\n•Fixed income securities are diversified and publicly traded, and are valued using quoted market prices or other valuation methods classified as Level 1 or Level 2 in the fair value hierarchy.\n\n•Real estate investments include those in private limited partnerships that invest in various domestic and international commercial and residential real estate projects and publicly traded REIT securities. The fair values of private real estate assets are typically determined by using income and/or cost approaches or comparable sales approach, taking into consideration discount and capitalization rates, financial conditions, local market conditions, and the status of the capital markets, and are generally classified as Level 3 in the fair value hierarchy. Publicly traded REIT securities are valued primarily using quoted market prices and are generally classified as Level 1 in the fair value hierarchy.\n\n•Diversified investments include mutual funds with an absolute return strategy. Mutual fund investments with absolute return strategies are publicly traded and valued using quoted market prices and are generally classified as Level 1 in the fair value hierarchy.\n\nForeign Currency Translation and Remeasurement\n\nThe Company translates assets and liabilities of its foreign subsidiaries from their respective functional currencies to USD using exchange rates in effect at period end. The Company’s results of operations and its cash flows are translated using average exchange rates for each reporting period. Resulting currency translation adjustments are reflected as a separate component of accumulated other comprehensive income in the consolidated balance sheets.\n\nThe financial statements of foreign subsidiaries, for which the USD is the functional currency, and which have certain transactions denominated in a local currency, are remeasured into USD. The remeasurement of local currencies into USD results in remeasurement adjustments that are included in net income.\n\nRealized and unrealized foreign currency exchange gains and losses resulting from remeasurement and settlement of foreign currency transactions denominated in a currency other than the functional currency of an entity are recorded in cost of goods and services sold and other expense, net within the consolidated statements of operations.\n\nEquity-Based Compensation\n\nThe Company’s Board of Directors adopted the 2020 Incentive Plan on November 18, 2020 (the \"Incentive Plan\"), and on March 21, 2024 and March 19, 2025, the Board of Directors amended and restated the Company's Incentive Plan to increase the number of shares of the Company’s common stock authorized to be issued thereunder. The Incentive Plan provides the Company the flexibility to grant a variety of equity-based awards including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance share awards, and incentive awards to its officers, directors, and employees. For equity-based awards without performance conditions, the Company recognizes equity-based compensation cost on a straight-line basis over the vesting period of the award. For equity-based awards with performance conditions, the Company recognizes equity-based compensation cost using the accelerated attribution method over the requisite service period\n\n50\n\nwhen the Company determines it is probable that the performance condition will be satisfied. The Company recognizes forfeitures of equity-based awards as they occur. Equity-based compensation expense is recorded in selling, general, and administrative expenses within the consolidated statements of operations.\n\n2. New Accounting Standards\n\nRecently Adopted Accounting Pronouncements\n\nIn December 2023, the Financial Accounting Standards Board (\"FASB\") issued Accounting Standards Update (\"ASU\") No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures, to provide more disaggregation of income tax information mainly related to the effective tax rate reconciliation and the income taxes paid disclosure requirements. Under the new accounting rules, the tabular effective tax rate reconciliation must include specific categories with certain reconciling items based on the expected tax further disaggregated by nature and/or jurisdiction. Income taxes paid, net of refunds received, must be broken out by federal, state, and foreign taxes, and further disaggregated by individual jurisdictions based on total income taxes paid. The Company adopted these new and enhanced annual income tax disclosures on a retrospective basis beginning with the fiscal year ended March 31, 2026. Prior period disclosures have been recast to reflect the new disclosure requirements. The adoption of this new rule resulted in expanded income tax disclosures, which are included in \"[Note 5. Income Taxes](#i6f44eae8422d46cd9f377051509c10a4_148),\" and did not have an impact on the Company's financial condition, results of operations, or cash flows.\n\nIn July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses: Measurement of Credit Losses for Accounts Receivable and Contract Assets, to include a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets. This new practical expedient allows an entity to assume current economic conditions as of the balance sheet date will not change for the life of the asset, thereby eliminating the need for an entity to develop and consider reasonable and supportable forecasts of future economic conditions. This amendment is effective for the Company’s fiscal year beginning April 1, 2026, with early adoption permitted. The Company early adopted this new ASU in the fourth quarter of fiscal year 2026 and elected to apply the practical expedient. The adoption of this practical expedient did not have a material impact on the Company’s financial condition, results of operations, or cash flows.\n\nAccounting Pronouncements Not Yet Adopted\n\nIn November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses, which requires a tabular disclosure of relevant expense captions into prescribed natural expense categories. The annual disclosure requirements are effective for the Company’s fiscal year ending March 31, 2028, and the interim period disclosure requirements are effective beginning April 1, 2028. Early adoption is permitted. This new standard will result in additional disclosures within the footnotes to the financial statements, and is not expected to have an impact on the Company’s financial condition, results of operations, or cash flows.\n\nIn September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software, changing the existing model used to determine when cost capitalization is to occur based on various project stages of software development with a more modern approach that introduces a probable-to-complete recognition threshold. The scope of this new guidance also includes the costs an entity incurs to implement a cloud computing arrangement as a customer. This amendment is effective for the Company’s annual and interim periods beginning April 1, 2028. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.\n\nIn November 2025, the FASB issued ASU No. 2025-09, Hedge Accounting Improvements, to clarify certain aspects of existing hedge accounting guidance, and to more closely align hedge accounting with the economics of an entity's risk management activities. This amendment is effective for the Company’s annual and interim periods beginning April 1, 2027 and requires adoption on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.\n\nIn December 2025, the FASB issued ASU No. 2025-10, Accounting for Government Grants Received by Business Entities, to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. This new guidance is effective for the Company’s fiscal year beginning April 1, 2029, including interim periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.\n\n51\n\n3. Revenue Recognition\n\nProduct revenues are primarily processed tobacco sold to the customer. Processing and other revenues are mainly contracts to process customer-owned green tobacco. During such processing, ownership remains with the customers. All Other revenue is primarily composed of revenue from the sale of non-tobacco agricultural products. The following disaggregates sales and other operating revenues by major source, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company’s sole reportable segment) to the consolidated financial statements:\n\nYears Ended March 31,\n\n202620252024\n\nLeaf:\n\nProduct revenues$2,235,763 $2,335,107 $1,912,438 \n\nProcessing and other revenues169,310 135,877 117,177 \n\nLeaf sales and other operating revenues2,405,073 2,470,984 2,029,615 \n\nAll Other:\n\nAll Other sales and other operating revenues7,927 10,276 2,944 \n\nTotal sales and other operating revenues$2,413,000 $2,481,260 $2,032,559 \n\nThe following summarizes activity in the claims allowance:\n\nYears Ended March 31,\n\n202620252024\n\nBalance, beginning of period$2,436 $3,313 $2,350 \n\nAdditions8,318 2,010 6,191 \n\nPayments and other adjustments(4,846)(2,887)(5,228)\n\nBalance, end of period$5,908 $2,436 $3,313 \n\nTaxes Collected from Customers\n\nValue-added taxes were $50,656, $43,298, and $34,905 for the years ended March 31, 2026, 2025, and 2024, respectively.\n\n4. Other Expense, Net\n\nThe following summarizes the components of other expense, net:\n\nYears Ended March 31,\n\n202620252024\n\nLosses on sale of receivables(1)\n$14,101 $19,565 $13,121 \n\nForeign currency losses (gains)1,739 (2,121)251 \n\nLoss on resolution of customs matter6,440 — — \n\nGain on sale of fixed assets(3,114)(2,423)(2,300)\n\nMiscellaneous expense (income), net27 1,389 (1,633)\n\nTotal$19,193 $16,410 $9,439 \n\n(1) See \"[Note 17. Securitized Receivables](#i6f44eae8422d46cd9f377051509c10a4_181)\" for additional information.\n\n52\n\n5. Income Taxes\n\nIncome Tax Provision\n\nThe components of income before income taxes and other items consisted of the following:\n\nYears Ended March 31,\n\n202620252024\n\nDomestic$(20,603)$(4,579)$(17,697)\n\nForeign49,233 38,033 33,170 \n\nTotal$28,630 $33,454 $15,473 \n\nThe details of the amount shown for income taxes in the consolidated statements of operations are as follows:\n\nYears Ended March 31,\n\n202620252024\n\nCurrent:\n\n    Federal$1,323 $6,837 $5,319 \n\n    State(280)261 (59)\n\n    Foreign26,522 23,611 24,385 \n\nTotal Current27,565 30,709 29,645 \n\nDeferred:\n\n    Federal(1)\n(151)(10,307)968 \n\n    State6 (155)(9)\n\n    Foreign2,924 4,806 (3,323)\n\nTotal Deferred2,779 (5,656)(2,364)\n\nIncome tax expense$30,344 $25,053 $27,281 \n\n(1) Deferred federal expense for fiscal year 2025 was primarily due to release of a valuation allowance in the U.S. from improved profitability.\n\n53\n\nThe difference between income tax expense based on income before income taxes and other items and the amount computed by applying the U.S. statutory federal income tax rate to income are as follows:\n\nYears Ended March 31,\n\n202620252024\n\n$%$%$%\n\nU.S. federal statutory tax rate6,012 21.07,025 21.03,249 21.0\n\nState and local income taxes, net of federal income tax effect(1)\n(196)(0.7)51 0.2(102)(0.7)\n\nForeign tax effects\n\nArgentina\n\nChanges in valuation allowances1,679 5.95,563 16.6484 3.1\n\nExchange effects and currency translation(396)(1.4)(2,580)(7.7)1,517 9.8\n\nOther(351)(1.2)(2,492)(7.4)(792)(5.1)\n\nBrazil\n\nExchange effects and currency translation(1,357)(4.7)6,640 19.8(2,307)(14.9)\n\nHybrid dividends(3,073)(10.7)(3,142)(9.4)— —\n\nTax on unremitted foreign earnings1,165 4.1(2,264)(6.8)(426)(2.8)\n\nOther2,538 8.93,036 9.12,508 16.2\n\nMalawi\n\nChanges in valuation allowances36 0.1(4,757)(14.2)7,638 49.4\n\nExchange effects and currency translation704 2.55,729 17.1(4,683)(30.3)\n\nOther1,910 6.72,965 8.9(404)(2.6)\n\nTanzania\n\nNondeductible interest3,646 12.71,346 4.0673 4.3\n\nOther1,333 4.71,606 4.877 0.5\n\nZambia\n\nChanges in valuation allowances(2,878)(10.1)(2,433)(7.3)2,739 17.7\n\nExchange effects and currency translation2,317 8.1(361)(1.1)(810)(5.2)\n\nOther2,355 8.21,200 3.6— —\n\nOther foreign jurisdictions3,179 11.12,844 8.5(560)(3.6)\n\nEffect of cross-border tax laws\n\nGlobal intangible low-taxed income6,855 23.97,081 21.24,578 29.6\n\nU.S. taxes on foreign earnings2,467 8.6509 1.54,240 27.4\n\nOther860 3.0442 1.31,225 7.9\n\nTax credits\n\nForeign tax credits(7,270)(25.4)(4,308)(12.9)(4,999)(32.3)\n\nOther— —(42)(0.1)(39)(0.3)\n\nChanges in valuation allowances524 1.8(7,574)(22.6)4,105 26.5\n\nNontaxable or nondeductible items1,494 5.2(1,243)(3.7)(2,396)(15.5)\n\nChanges in unrecognized tax benefits7,614 26.68,789 26.39,585 61.9\n\nOther, net(823)(2.9)1,423 4.32,181 14.1\n\nIncome tax expense30,344 106.025,053 74.927,281 176.3\n\n(1) The effects of individual state and local jurisdictions are immaterial.\n\n54\n\nThe following summarizes the components of deferred tax assets (liabilities):\n\nMarch 31,\n\n20262025\n\nDeferred tax assets:\n\nNon-deductible interest carryforward$37,406 $34,940 \n\nOriginal issue discount7,165 10,439 \n\nReserves and accruals26,520 22,691 \n\nTax loss carryforwards17,393 16,653 \n\nUnrealized exchange losses— 1,448 \n\nLease obligations7,333 6,511 \n\nOther12,608 9,971 \n\nGross deferred tax assets108,425 102,653 \n\nValuation allowance(60,632)(60,302)\n\nTotal deferred tax assets$47,793 $42,351 \n\nDeferred tax liabilities:\n\nUnremitted earnings of foreign subsidiaries$(31,607)$(27,560)\n\nRight of use asset(7,567)(7,050)\n\nUnrealized exchange gains(4,176)— \n\nOther(1,894)(2,989)\n\nTotal deferred tax liabilities$(45,244)$(37,599)\n\nNet deferred tax assets$2,549 $4,752 \n\nThe following summarizes the change in the valuation allowance for deferred tax assets:\n\nYears Ended March 31,\n\n202620252024\n\nBalance, beginning of period$60,302 $70,391 $59,506 \n\nChanges to expenses(1)\n632 (10,081)10,727 \n\nChanges to other comprehensive income(302)(8)158 \n\nBalance, end of period$60,632 $60,302 $70,391 \n\n(1) For the years ended March 31, 2025 and 2024, respectively, the change was primarily driven by a reduction in the valuation allowance in the U.S. and an increase in the valuation allowances across various African jurisdictions.\n\nAs of March 31, 2026, the Company had foreign net operating loss carryforwards of $55,740, of which $34,096 relates to jurisdictions with definite lived carryforward periods and $21,644 relates to jurisdictions with indefinite lived carryforward periods.\n\nUnder current U.S. tax regulations, in general, repatriation of foreign earnings to the U.S. can be completed without incurring material incremental U.S. tax. However, repatriation of foreign earnings could subject the Company to domestic, state, or foreign jurisdictional taxes (including withholding taxes) on distributions or sales of minority owned investments.\n\nThe Company has not recorded a deferred tax liability for U.S. federal, U.S. state, or foreign tax from foreign subsidiary unremitted earnings and profits where an indefinite reinvestment assertion was made on the basis that this group of foreign subsidiaries does not expect to have available excess cash and cash equivalents to remit in the foreseeable future or has specific needs for available excess cash. The unrecorded tax liability associated with indefinitely reinvested foreign subsidiary earnings is not practicable to estimate due to the inherent complexity of the Company’s global operations.\n\n55\n\nAccounting for Uncertainty in Income Taxes\n\nThe following summarizes the changes to unrecognized tax benefits and related interest and penalties:\n\nYears Ended March 31,\n\n20262025\n\nBalance at April 1$12,806 $16,892 \n\nIncrease for prior year tax positions5,208 2,989 \n\nIncrease for current year tax positions3,319 4,854 \n\nReduction for settlements(331)(8,020)\n\nImpact of changes in exchange rates(123)(210)\n\nReduction of statute of limitation expirations(36)(3,699)\n\nBalance at March 31(1)\n$20,843 $12,806 \n\nAccrued interest3,253 1,929 \n\nAccrued penalties5,277 3,900 \n\nBalance at March 31(1)\n$29,373 $18,635 \n\n(1) As of March 31, 2026, $29,680 would impact the Company's effective tax rate, if recognized. This includes indirect effects such as related valuation allowance releases.\n\n    \n\nDue to the Company’s global operations, numerous tax audits may be ongoing throughout the world at any point in time. The Company’s income tax liabilities are based on estimates of potential income taxes due upon the conclusion of such audits and are updated to reflect changes in facts and circumstances, as they become known. Due to the uncertain and complex application of tax regulations, it is possible that the resolution of audits may result in liabilities which could be materially different from these estimates. The Company will record additional income tax expense or benefit in the period in which such resolution occurs or if estimates or judgments change.\n\nThe Company and its subsidiaries file a U.S. federal consolidated income tax return as well as returns in several U.S. states and a number of foreign jurisdictions. As of March 31, 2026, the Company’s earliest open tax year for U.S. federal income tax purposes relate to tax periods ending in 2022. Open tax years in state and foreign jurisdictions generally range from three to six years. In applicable jurisdictions, the Company’s tax attributes from prior periods remain subject to adjustment.\n\nCash Paid for Income Taxes, Net\n\nThe following summarizes cash paid for income taxes (net of refunds) by jurisdiction:\n\nYears Ended March 31,\n\n202620252024\n\nU.S. federal$1,621 $2,300 $6,438 \n\nDebt exchange— — 12,543 \n\nU.S. state and local(42)92 299 \n\n1,579 2,392 19,280 \n\nForeign\n\nBrazil$3,462 $3,895 $(1,359)\n\nIndonesia1,753 2,110 3,184 \n\nMalawi3,027 1,402 542 \n\nTanzania973 5,389 1,235 \n\nTurkey3,180 3,265 3,823 \n\nOther(1)\n6,466 12,648 8,339 \n\n$18,861 $28,709 $15,764 \n\nTotal$20,440 $31,101 $35,044 \n\n(1) Includes amounts paid to settle certain income tax matters that were subject to litigation in various jurisdictions.\n\n56\n\n6. Earnings Per Share\n\nThe following summarizes the computation of earnings per share:\n\nYears Ended March 31,\n\n202620252024\n\nNet income attributable to Pyxus International, Inc.$14,569 $15,166 $2,663 \n\nBasic weighted average shares outstanding25,790 25,643 25,000 \n\nPlus: Dilutive equity awards167 24 — \n\nDiluted weighted average shares outstanding25,957 25,667 25,000 \n\nEarnings per share:\n\nBasic$0.56 $0.59 $0.11 \n\nDiluted$0.56 $0.59 $0.11 \n\n7. Restricted Cash\n\nThe following summarizes the composition of restricted cash:\n\nMarch 31,\n\n20262025\n\nCompensating balance for short-term borrowings$107 $542 \n\nEscrow1,953 3,534 \n\nGrants458 3,116 \n\nOther798 98 \n\nTotal$3,316 $7,290 \n\n8. Trade Receivables, Net\n\nTrade receivables are net of an allowance for expected credit losses. The following summarizes activity in the allowance for expected credit losses:\n\nYears Ended March 31,\n\n202620252024\n\nBalance, beginning of period$(24,035)$(23,940)$(24,730)\n\nAdditions(160)(1,299)(1,535)\n\nWrite-offs and other adjustments7,316 1,204 2,325 \n\nBalance, end of period(16,879)(24,035)(23,940)\n\nTrade receivables256,335 213,274 192,704 \n\nTrade receivables, net$239,456 $189,239 $168,764 \n\n57\n\n9. Inventories, Net\n\nThe following summarizes the composition of inventories, net with the All Other category primarily composed of non-tobacco agricultural products:\n\nMarch 31,\n\n20262025\n\nProcessed tobacco$507,380 $490,410 \n\nUnprocessed tobacco279,348 241,832 \n\nOther tobacco related26,883 25,643 \n\nAll Other4,339 4,066 \n\nTotal$817,950 $761,951 \n\n10. Advances to Suppliers, Net\n\nThe following summarizes the composition of advances to suppliers, net:\n\nMarch 31,\n\n20262025\n\nAdvances to tobacco suppliers, net$33,257 $29,144 \n\nAdvances to non-tobacco suppliers3,080 1,601 \n\nTotal in current assets36,337 30,745 \n\nLong-term advances to tobacco suppliers, net6,928 4,980 \n\nTotal current and long-term$43,265 $35,725 \n\nThe mark-up and interest on advances to tobacco suppliers, net capitalized, or to be capitalized into inventory for the current crop, were $20,732 and $17,066 for the year ended March 31, 2026 and 2025, respectively. Unrecoverable advances and other costs capitalized, or to be capitalized into the current crop, were $10,911 and $11,833 as of March 31, 2026 and 2025, respectively.\n\n11. Equity Method Investments\n\nThe following summarizes the Company's equity method investments as of March 31, 2026:\n\nInvestee NameLocationPrimary PurposeOwnership Percentage\nBasis Difference(1)\n\nAdams International Ltd.ThailandPurchase and process tobacco49%$(4,526)\n\nAlliance One Industries India Private Ltd.IndiaPurchase and process tobacco49%(5,770)\n\nChina Brasil Tabacos Exportadora S.A.BrazilPurchase and process tobacco49%43,000\n\nOryantal Tütün Paketleme Sanayi ve Ticaret A.Ş.TurkeyProcess tobacco50%(416)\n\nPurilum, LLCU.S.Produce flavor formulations and consumable nicotine products50%4,589\n\nSiam Tobacco Export Corporation Ltd.ThailandPurchase and process tobacco49%(6,098)\n\n(1) Basis differences for the Company’s equity method investments are due to fair value adjustments recorded during fiscal 2021.\n\n58\n\nThe following summarizes aggregate financial information for these equity method investments:\n\nYears Ended March 31,\n\n202620252024\n\nStatement of operations:\n\nSales$581,169 $611,152 $505,262 \n\nGross profit80,965 70,208 82,614 \n\nNet income 35,780 16,851 33,101 \n\nMarch 31,\n\n20262025\n\nBalance sheet:\n\nCurrent assets$457,219 $419,192 \n\nProperty, plant, and equipment and other assets65,716 49,243 \n\nCurrent liabilities362,790 328,818 \n\nLong-term obligations and other liabilities6,333 4,560 \n\n12. Variable Interest Entities\n\nThe following summarizes the Company’s financial relationships with its unconsolidated variable interest entities:\n\nMarch 31,\n\n20262025\n\nInvestments in variable interest entities$99,239 $90,239 \n\nGuaranteed amounts to variable interest entities (not to exceed)18,483 15,995 \n\nSee \"[Note 25. Related Party Transactions](#i6f44eae8422d46cd9f377051509c10a4_208)\" for the asset and liability balances associated with our equity investments. See \"[Note 17](#i6f44eae8422d46cd9f377051509c10a4_181)[. Secur](#i6f44eae8422d46cd9f377051509c10a4_181)[itized](#i6f44eae8422d46cd9f377051509c10a4_181)[Receivables](#i6f44eae8422d46cd9f377051509c10a4_181)\" for the beneficial interests with certain of our securitization facilities.\n\n13. Intangible Assets, Net\n\nThe gross carrying amount and accumulated amortization of intangible assets consist of the following:\n\nMarch 31, 2026\n\nWeighted Average Remaining Useful LifeGross Carrying AmountAccumulated AmortizationIntangible Assets, Net\n\nIntangibles subject to amortization:\n\nCustomer relationships6.4 years$26,101 $(12,144)$13,957 \n\nTechnology2.4 years11,618 (8,292)3,326 \n\nTrade names8.4 years11,300 (4,507)6,793 \n\nTotal$49,019 $(24,943)$24,076 \n\n59\n\nMarch 31, 2025\n\nWeighted Average Remaining Useful LifeGross Carrying AmountAccumulated AmortizationIntangible Assets, Net\n\nIntangibles subject to amortization:\n\nCustomer relationships7.4 years$26,101 $(9,969)$16,132 \n\nTechnology3.4 years11,618 (6,844)4,774 \n\nTrade names9.4 years11,300 (3,699)7,601 \n\nTotal$49,019 $(20,512)$28,507 \n\nThe following summarizes amortization expense for definite-lived intangible assets:\n\nYears Ended March 31,\n\n202620252024\n\nAmortization expense$4,431 $4,532 $4,631 \n\nThe following summarizes the estimated intangible asset amortization expense for the next five fiscal years and beyond:\n\nCustomer Relationships\nTechnology(1)\nTrade NamesTotal\n\n2027$2,175 $1,378 $807 $4,360 \n\n20282,175 1,375 807 4,357 \n\n20292,175 573 807 3,555 \n\n20302,175 — 807 2,982 \n\n20312,175 — 807 2,982 \n\nThereafter3,082 — 2,758 5,840 \n\nTotal$13,957 $3,326 $6,793 $24,076 \n\n(1) Estimated amortization expense for technology is based on costs accumulated as of March 31, 2026. These estimates will change as new costs are incurred and until the software is placed into service.\n\n14. Leases\n\nThe following summarizes lease costs:\n\nYears Ended March 31,\n\n202620252024\n\nOperating lease costs$14,998 $14,199 $16,028 \n\nVariable and short-term lease costs19,640 14,848 8,964 \n\nTotal lease costs$34,638 $29,047 $24,992 \n\nThe following summarizes the measurement of remaining operating lease terms and discount rates:\n\nMarch 31,\n\n20262025\n\nWeighted average remaining lease term4.3 years4.8 years\n\nWeighted average discount rate16.1%15.4%\n\n60\n\nThe following summarizes supplemental cash flow information related to operating leases:\n\nYears Ended March 31,\n\n202620252024\n\nCash paid for amounts included in the measurement of lease liabilities:\n\nOperating cash flows used for operating leases$14,664 $14,145 $15,764 \n\nNoncash investing activity:\n\nRight-of-use assets obtained in exchange for new operating lease liabilities12,164 3,964 10,444 \n\nFuture minimum lease payments required under operating lease agreements, including those with extended lease term options that are reasonably certain of being exercised, as of March 31, 2026 are summarized by fiscal year as follows:\n\nOperating Leases\n\n2027$13,971 \n\n20289,798 \n\n20295,793 \n\n20304,409 \n\n20312,960 \n\nThereafter5,265 \n\nTotal future minimum lease payments42,196 \n\nLess: amounts related to imputed interest11,261 \n\nPresent value of lease liabilities(1)\n$30,935 \n\n(1) This amount is comprised of $9,915 and $21,020 of current and noncurrent operating lease liabilities, respectively, included in the consolidated balance sheets.\n\n15. Property, Plant, and Equipment, Net\n\nThe following summarizes property, plant, and equipment, net:\n\nMarch 31,\n\n20262025\n\nLand$27,434 $26,815 \n\nBuildings47,512 45,982 \n\nMachinery and equipment122,820 109,247 \n\nTotal197,766 182,044 \n\nLess: accumulated depreciation (1)\n(54,612)(43,868)\n\nTotal property, plant, and equipment, net$143,154 $138,176 \n\n(1) This balance was partially reduced by the disposition of certain fully depreciated assets during the year ended March 31, 2026.\n\nThe following summarizes the classification of depreciation expense recorded in the consolidated statements of operations:\n\nYears Ended March 31,\n\n202620252024\n\nDepreciation expense recorded in cost of goods and services sold$14,220 $13,264 $11,806 \n\nDepreciation expense recorded in selling, general, and administrative expenses2,036 2,380 2,646 \n\nTotal depreciation expense$16,256 $15,644 $14,452 \n\n61\n\n16. Debt Arrangements\n\nThe following summarizes debt and notes payable:\n\nOutstanding\n\nInterestMarch 31, Long-Term Debt Repayment Schedule by Fiscal Year\n\nRate(1)\n2026202520272028202920302031Later\n\nSenior secured credit facility:\n\n   ABL Credit Facility7.0 %$— $— $— $— $— $— $— $— \n\nSenior secured notes:\n\n8.5% Notes Due 2027(2)\n8.5 %146,662 145,820 — 146,662 — — — — \n\nSenior secured term loans:\n\nIntabex Term Loans(3)\n12.4 %187,752 187,144 — 187,752 — — — — \n\nPyxus Term Loans(4)\n12.4 %121,343 121,886 — 121,343 — — — — \n\nOther debt:\n\nOther long-term debt8.8 %— 12 — — — — — — \n\nNotes payable(5)\n8.8 %477,132 395,030 477,132 — — — — — \n\n   Total debt$932,889 $849,892 $477,132 $455,757 $— $— $— $— \n\nShort-term(5)\n$477,132 $395,030 \n\nLong-term:\n\nCurrent portion of long-term debt$— $12 \n\nLong-term debt455,757 454,850 \n\nTotal$455,757 $454,862 \n\nLetters of credit$8,024 $7,790 \n\n(1) Weighted average stated rate for the trailing twelve months ended March 31, 2026 or, for indebtedness outstanding only during a portion of such twelve-month period, for the portion of such period that such indebtedness was outstanding.\n\n(2) Balance of $146,662 is net of a debt discount of $1,677. Total repayment at maturity is $148,339.\n\n(3) Balance of $187,752 is net of a debt discount of $1,281. Total repayment at maturity is $189,033, which includes a $2,000 exit fee payable upon repayment.\n\n(4) Balance of $121,343 is net of a debt premium of $1,138. Total repayment at maturity is $120,205.\n\n(5) Primarily foreign seasonal lines of credit.\n\nOutstanding Senior Secured Debt\n\nABL Credit Facility\n\nThe Company’s wholly owned subsidiary, Pyxus Holdings, Inc. (\"Pyxus Holdings\"), certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the \"Borrowers\"), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc. (\"Pyxus Parent\"), as parent guarantors, entered into an ABL Credit Agreement (as amended, the \"ABL Credit Agreement\"), dated as of February 8, 2022, by and among Pyxus Holdings, as Borrower Agent, the Borrowers and parent guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as Administrative Agent and Collateral Agent (the \"ABL Agent\"), which was subsequently amended on January 5, 2023, May 23, 2023, October 24, 2023, and May 12, 2025.\n\nThe ABL Credit Agreement establishes the ABL Credit Facility, an asset-based revolving credit facility the proceeds of which may be used to provide for the ongoing working capital and general corporate purposes of the Borrowers, the Company, Pyxus Parent, and their subsidiaries, and for other permitted purposes described in the ABL Credit Agreement. The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to a maximum principal amount of $150,000, subject to the borrowing base limitations described below in this paragraph. The ABL Credit Facility includes a $20,000 uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the ABL Credit Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility not to exceed a maximum principal amount of $170,000. The amount available under the ABL Credit Facility is limited by a borrowing base consisting of certain eligible accounts receivable and the value of inventory, as reduced by specified reserves, as follows:\n\n62\n\n•85% of the book value of eligible accounts receivable, plus\n\n•the lesser of (i) 85% of the book value of Eligible Extended Terms Receivables (as defined in the ABL Credit Agreement) and (ii) $5,000, plus\n\n•90% of eligible credit insured accounts receivable (to the extent the ABL Agent is named as a beneficiary or loss payee with respect to the applicable policy), plus\n\n•the lesser of (i) 70% of eligible inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits) or (ii) 85% of the net-orderly-liquidation value percentage of eligible inventory, plus\n\n•the least of (i) 70% of the eligible foreign in-transit inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits), (ii) 85% of the net-orderly-liquidation value percentage of eligible foreign in-transit inventory, and (iii) $10,000, minus\n\n•applicable reserves established by the ABL Agent from time to time.\n\nAt March 31, 2026, no borrowings under the ABL Credit Facility were outstanding and $150,000 was available for borrowing under the ABL Credit Facility. Weighted average borrowings outstanding under the ABL Credit Facility during the fiscal year ended March 31, 2026 were $47,373.\n\nThe ABL Credit Facility permits both base rate borrowings and borrowings based upon the Secured Overnight Financing Rate (\"SOFR\"). Borrowings under the ABL Credit Facility bear interest at an annual rate equal to one, three, or six-month reserve-adjusted SOFR Rate plus 275 basis points or 175 basis points above base rate, as applicable, with a fee on unutilized commitments at an annual rate of 25.0 basis points.\n\nThe ABL Credit Facility may be prepaid from time to time, in whole or in part, without prepayment or premium, subject to a termination fee upon the permanent reduction of some or all of the commitments under the ABL Credit Facility in the amount of (i) 2% of the amount of commitments permanently reduced on or prior to May 12, 2026 and (ii) 1% of the amount of commitments permanently reduced on or prior to May 12, 2027 but after May 12, 2026. No such termination fee is payable for reductions after May 12, 2027. In addition, customary mandatory prepayments of the loans under the ABL Credit Facility are required upon the occurrence of certain events including, without limitation, outstanding borrowing exposures exceeding the borrowing base, certain dispositions of assets outside of the ordinary course of business in respect of certain collateral securing the ABL Credit Facility and certain casualty and condemnation events. With respect to base rate loans, accrued interest is payable monthly in arrears and, with respect to SOFR loans, accrued interest is payable monthly and on the last day of any applicable interest period.\n\nThe Borrowers’ obligations under the ABL Credit Facility (and certain related obligations) are (a) guaranteed by Pyxus Parent, and the Company and all of Pyxus Holdings’ wholly owned domestic subsidiaries, and each of Pyxus Holdings’ future wholly owned domestic subsidiaries is required to guarantee the ABL Credit Facility on a senior secured basis (collectively, the \"ABL Loan Parties\") and (b) secured by the collateral, as described below, which is owned by the ABL Loan Parties.\n\nCash Dominion. Under the terms of the ABL Credit Facility, if (i) an event of default has occurred and is continuing, (ii) excess borrowing availability under the ABL Credit Facility (based on the lesser of the commitments thereunder and the borrowing base) (the \"Excess Availability\") falls below the greater of $12,500 and 10% of the lesser of total revolving loan commitments under the ABL Credit Facility at such time and the borrowing base at such time, or (iii) Domestic Availability (as defined in the ABL Credit Agreement) being less than the greater of $25,000 and 20% of the lesser of total revolving loan commitments under the ABL Credit Facility at such time and the borrowing base at such time, the ABL Loan Parties will become subject to cash dominion, which will require daily prepayment of loans under the ABL Credit Facility with the cash deposited in certain deposit accounts of the ABL Loan Parties, including concentration accounts, and will restrict the ABL Loan Parties’ ability to transfer cash from their concentration accounts to their disbursement accounts. Such cash dominion period (a \"Dominion Period\") shall end when (i) if arising as a result of a continuing event of default, such event of default ceases to exist, (ii) if arising as a result of non-compliance with the Excess Availability threshold, no event of default is continuing and, for a period of 30 consecutive days, Excess Availability is equal to or greater than the greater of $12,500 and 10% of the lesser of total revolving loan commitments under the ABL Credit Facility and the borrowing base, or (iii) if arising as a result of Domestic Availability being less than the threshold, no event of default is continuing and, for a period of 30 consecutive days, Domestic Availability is greater than the greater of $25,000 and 20% of the lesser of total revolving loan commitments under the ABL Credit Facility and the borrowing base.\n\nCovenants. The ABL Credit Agreement governing the ABL Credit Facility contains a covenant requiring that the Company’s fixed charge coverage ratio be no less than 1.10 to 1.00 during any Dominion Period.\n\n63\n\nThe ABL Credit Agreement governing the ABL Credit Facility contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s ability to, among other things:\n\n•incur additional indebtedness or issue disqualified stock or preferred stock,\n\n•make investments,\n\n•pay dividends and make other restricted payments,\n\n•sell certain assets,\n\n•create liens,\n\n•enter into sale and leaseback transactions,\n\n•consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets,\n\n•enter into transactions with affiliates,\n\n•engage directly or indirectly in any business other than the businesses engaged in by the Company,\n\n•directly or indirectly open, maintain or otherwise have accounts other than permitted accounts under the ABL Credit Agreement, and\n\n•designate subsidiaries as Unrestricted Subsidiaries (as defined in the ABL Credit Agreement).\n\nMaturity. The ABL Credit Facility matures on May 12, 2030 or, if earlier, 90 days prior to the earliest maturity date of (i) the Company's existing senior secured notes and the senior secured term loans (each scheduled to mature on December 31, 2027) in the event any such notes or loans remain outstanding or (ii) any indebtedness that refinances any of the foregoing.\n\nOn March 31, 2026, the Borrowers were in compliance with the covenants under the ABL Credit Agreement.\n\nIntabex Term Loans\n\nPursuant to (i) an exchange offer (the \"DDTL Facility Exchange\") made to, and accepted by, holders of 100.0% of the outstanding term loans (the \"DDTL Term Loans\") under the Amended and Restated Term Loan Credit Agreement, effectuated pursuant to that certain Amendment and Restatement Agreement, dated as of June 2, 2022 (the \"DDTL Credit Agreement\"), by and among Intabex Netherlands B.V., as borrower (\"Intabex\"), the guarantors party thereto, the administrative agent and collateral agent thereunder, and the several lenders from time to time party thereto and (ii) an exchange offer (the \"Exit Facility Exchange\") made to, and accepted by, holders of 100.0% of the outstanding term loans (the \"Exit Term Loans\") under the Exit Term Loan Credit Agreement, dated as of August 24, 2020 (the \"Exit Term Loan Credit Agreement\"), by and among Pyxus Holdings, as borrower, the guarantors party thereto, the administrative agent and collateral agent thereunder, and the several lenders from time to time party thereto, on February 6, 2023, Pyxus Holdings entered into the Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the \"Intabex Term Loan Credit Agreement\"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus (US) LLC (\"Alter Domus\"), as administrative agent and senior collateral agent. The Intabex Term Loan Credit Agreement established a term loan credit facility in an aggregate principal amount of approximately $189,033 (the \"Intabex Credit Facility\"), under which term loans in the full aggregate principal amount of the Intabex Credit Facility (the \"Intabex Term Loans\") were deemed made in exchange for (i) $100,000 principal amount of the DDTL Term Loans, plus an additional $2,000 on account of the exit fee payable under the DDTL Credit Agreement and (ii) approximately $87,033 principal amount of Exit Term Loans, representing 40.0% of the outstanding principal amount thereof (including the applicable accrued and unpaid PIK interest thereon).\n\nThe Intabex Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5%) plus 8.0% per annum or (ii) an alternate base rate plus 7.0% per annum. The Intabex Term Loans are stated to mature on December 31, 2027.\n\nThe Intabex Term Loans may be prepaid from time to time, in whole or in part, without prepayment or penalty. With respect to alternate base rate loans, accrued interest is payable quarterly in arrears on the last business day of each calendar quarter and, with respect to SOFR loans, accrued interest is payable on the last day of each applicable interest period but no less frequently than every three months.\n\nThe Intabex Term Loan Credit Agreement contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ ability to, among other things, incur additional indebtedness or issue disqualified stock or preferred stock; make investments; pay dividends and make other restricted payments; sell certain assets; incur liens; consolidate, merge, sell or otherwise dispose of all or substantially all their assets; enter into transactions with affiliates; designate subsidiaries as unrestricted subsidiaries; and, in the case of Intabex, undertake business activities and sell certain subsidiaries.\n\nOn March 31, 2026, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with the covenants under the Intabex Term Loan Credit Agreement.\n\n64\n\nPyxus Term Loans\n\nPursuant to the Exit Facility Exchange, on February 6, 2023, Pyxus Holdings entered into the Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the \"Pyxus Term Loan Credit Agreement\"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus, as administrative agent and senior collateral agent, to establish a term loan credit facility in an aggregate principal amount of approximately $130,550 (the \"Pyxus Credit Facility\"), under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the \"Pyxus Term Loans\" and, together with the Intabex Term Loans, the \"Senior Secured Term Loans\") were deemed made in exchange for 60.0% of the outstanding principal amount of Exit Term Loans (including the applicable accrued and unpaid PIK interest thereon).\n\nThe Pyxus Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5%) plus 8.0% per annum or (ii) an alternate base rate plus 7.0% per annum. The Pyxus Term Loans are stated to mature on December 31, 2027.\n\nThe Pyxus Term Loans may be prepaid from time to time, in whole or in part, without prepayment or penalty. With respect to alternate base rate loans, accrued interest is payable quarterly in arrears on the last business day of each calendar quarter and, with respect to SOFR loans, accrued interest is payable on the last day of each applicable interest period but no less frequently than every three months.\n\nThe Pyxus Term Loan Credit Agreement contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ ability to, among other things, incur additional indebtedness or issue disqualified stock or preferred stock; make investments; pay dividends and make other restricted payments; sell certain assets; incur liens; consolidate, merge, sell or otherwise dispose of all or substantially all their assets; enter into transactions with affiliates; and designate subsidiaries as unrestricted subsidiaries.\n\nOn March 31, 2026, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with the covenants under the Pyxus Term Loan Credit Agreement.\n\n8.50% Senior Secured Notes due 2027\n\nPursuant to an exchange offer (the \"Notes Exchange\" and, together with the DDTL Facility Exchange and the Exit Facility Exchange, the \"Debt Exchange Transactions\") made by Pyxus Holdings and accepted by holders of approximately 92.7% of the aggregate principal amount of the outstanding 10.0% Senior Secured First Lien Notes due 2024 issued by Pyxus Holdings (the \"2024 Notes\") pursuant to that certain Indenture, dated as of August 24, 2020 (the \"2024 Notes Indenture\"), by and among Pyxus Holdings, the guarantors party thereto and the trustee, collateral agent, registrar and paying agent thereunder, on February 6, 2023, Pyxus Holdings issued approximately $260,452 in aggregate principal amount of 8.5% Senior Secured Notes due December 31, 2027 (the \"2027 Notes\" and, together with the Senior Secured Term Loans, the \"Senior Secured Term Debt\") to the exchanging holders of the 2024 Notes for an equal principal amount of 2024 Notes. The 2027 Notes were issued pursuant to the Indenture, dated as of February 6, 2023 (the \"2027 Notes Indenture\"), among Pyxus Holdings, the guarantors party thereto, and Wilmington Trust, National Association, as trustee, and Alter Domus, as collateral agent.\n\nThe 2027 Notes bear interest at a rate of 8.5% per annum, which interest is computed based on a 360-day year comprised of twelve 30-day months. Interest accrues on the 2027 Notes from the date of issuance and is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2023. The 2027 Notes are stated to mature on December 31, 2027.\n\nAt any time, Pyxus Holdings may redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100.0% of the principal amount of 2027 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date.\n\nThe 2027 Notes Indenture contains customary affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ ability to, among other things, incur additional indebtedness or issue disqualified stock or preferred stock; make investments; pay dividends and make other restricted payments; sell certain assets; incur liens; consolidate, merge, sell or otherwise dispose of all or substantially all their assets; enter into transactions with affiliates; and designate subsidiaries as unrestricted subsidiaries.\n\nOn March 31, 2026, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with the covenants under the 2027 Notes Indenture.\n\n65\n\nGuarantees and Collateral\n\nThe obligations of Pyxus Holdings under the ABL Credit Agreement and the Senior Secured Term Debt are fully and unconditionally guaranteed by the Company, Pyxus Parent and all of the Company’s domestic subsidiaries and certain of the Company’s foreign subsidiaries, subject to certain limitations (the \"Senior Secured Debt Obligors\"). In addition, under the Intabex Term Loan Credit Facility, Intabex and Alliance One International Tabak B.V. (which were obligors under the DDTL Term Loans) also guarantee the Intabex Credit Facility (together, the \"Specified Intabex Obligors\") but do not guarantee the 2027 Notes, the Pyxus Term Loans or obligations under the ABL Credit Agreement. In addition, certain assets of the Specified Intabex Obligors (which were pledged as collateral for the DDTL Term Loans) are pledged as collateral to secure the Intabex Term Loans (the \"Intabex Collateral\") but do not secure the 2027 Notes, the Pyxus Term Loans, or obligations under the ABL Credit Agreement. On March 27, 2024, Alliance One International Tabak B.V. was merged with and into Intabex.\n\nThe Senior Secured Debt Obligors’ obligations under the ABL Credit Agreement are secured by (i) a first-priority senior lien the ABL Priority Collateral (as defined in the ABL/Senior Secured Term Debt Intercreditor Agreement (as defined below)), which includes certain accounts receivable and inventory and certain related intercompany notes, cash, deposit accounts, related general intangibles and instruments, certain other related assets and proceeds of the foregoing of the Senior Secured Debt Obligors, and (ii) a junior-priority lien on substantially all assets of the Senior Secured Debt Obligors other than certain exclusions and the ABL Priority Collateral. The Senior Secured Term Debt is secured by (i) a first-priority senior lien on substantially all assets of the Senior Secured Debt Obligors other than certain exclusions and the ABL Priority Collateral and (ii) a junior-priority lien on the ABL Priority Collateral. The Intabex Term Loans are further secured by a first-priority lien on the Intabex Collateral.\n\nThe obligations under the Senior Secured Term Debt share a single lien, held by Alter Domus, as senior collateral agent (the \"Senior Collateral Agent\"), on the Collateral (as defined below) subject to the payment waterfall pursuant to the intercreditor arrangements described below.\n\nIntercreditor Agreements\n\nThe priority of the obligations under the ABL Credit Agreement and the Senior Secured Term Debt are set forth in the two intercreditor agreements entered into in connection with consummation of the DDTL Facility Exchange, the Exit Facility Exchange and the Notes Exchange.\n\nABL/Senior Secured Term Debt Intercreditor Agreement. On February 6, 2023, Pyxus Holdings, Inc., the guarantors party thereto, PNC Bank, National Association, as ABL Agent, Alter Domus, as Pyxus Term Loan Administrative Agent, Intabex Term Loan Administrative Agent and Senior Collateral Agent, and Wilmington Trust, National Association, as Senior Notes Trustee entered into an Amended and Restated ABL Intercreditor Agreement, dated as of February 6, 2023 (the \"ABL/Senior Secured Term Debt Intercreditor Agreement\") to provide for the intercreditor relationship between, (i) on one hand, the holders of obligations under the ABL Credit Facility, the guarantees thereof and certain related obligations and (ii) on the other hand, the holders of obligations under the Senior Secured Term Debt, the guarantees thereof and certain related obligations. Pursuant to the terms of the ABL/Term Loan/Notes Intercreditor Agreement, Pyxus Holdings’ obligations under the ABL Credit Facility, the guarantees thereof and certain related obligations have first-priority senior liens on the ABL Priority Collateral, which includes certain accounts receivable and inventory and certain related intercompany notes, cash, deposit accounts, related general intangibles and instruments, certain other related assets of the foregoing entities and proceeds of the foregoing, with the obligations under the Senior Secured Term Debt having junior-priority liens on the ABL Priority Collateral. Pursuant to the ABL/Senior Secured Term Debt Intercreditor Agreement, Pyxus Holdings’ collective obligations under the Senior Secured Term Debt, the guarantees thereof and certain related obligations have first-priority senior liens on the collateral that is not ABL Priority Collateral, including owned material real property in the U.S., capital stock of subsidiaries owned directly by Pyxus Holdings or a guarantor (other than the Intabex Collateral), existing and after acquired intellectual property rights, equipment, related general intangibles and instruments and certain other assets related to the foregoing and proceeds of the foregoing, with the obligations under the ABL Credit Facility having junior-priority liens on such collateral, other than real property. The ABL Credit Facility is not secured by real property.\n\nSecured Debt Intercreditor Agreement. On February 6, 2023, the Senior Secured Debt Obligors, together with the representative for the holders of the Senior Secured Term Debt and the Senior Collateral Agent, entered into the Intercreditor and Collateral Agency Agreement, dated as of February 6, 2023 (the \"Senior Secured Term Debt Intercreditor Agreement\"), pursuant to which the Senior Collateral Agent, serves as joint collateral agent for the benefit of the holders of the 2027 Notes, the Pyxus Term Loans and the Intabex Term Loans with respect to all common collateral securing such indebtedness (the \"Collateral,\" which excludes Intabex Collateral). The Senior Secured Term Debt Intercreditor Agreement provides that Collateral or proceeds thereof received in connection with or upon the exercise of secured creditor remedies will be distributed (subject to the provisions described in the next paragraph) first to holders of the Senior Secured Term Debt on a pro rata basis based on the aggregate principal amount of each class of Senior Secured Term Debt, and then to holders of future junior debt\n\n66\n\nsecured by such Collateral on a pro rata basis based on the aggregate principal amount of each class of future junior debt (and in each case permitted refinancing indebtedness thereof).\n\nExercise of rights and remedies against the Collateral and certain rights in a bankruptcy or insolvency proceeding (including the right to object to debtor-in-possession financing or to credit bid) by the Senior Collateral Agent will be controlled first by the holders of a majority in principal amount of the Senior Secured Term Loans (including, in any event, each holder holding at least 20.0% of the Senior Secured Term Loans as of February 6, 2023, provided such holder holds at least 15.0% of the Senior Secured Term Loans as of the date of determination), second, after repayment in full of the Senior Secured Term Loans, by the holders of a majority in principal amount of the 2027 Notes and last, after repayment in full of the Senior Secured Term Loans and the 2027 Notes, by holders of a majority in principal amount of any future junior debt secured by the Collateral. Any such future junior debt will be subject to certain customary waivers of rights in a bankruptcy or insolvency proceeding in favor of the Senior Collateral Agent, including, but not limited to, with respect to debtor-in-possession financing, adequate protection, and credit bidding.\n\nOther Outstanding Debt\n\nForeign Seasonal Lines of Credit\n\nExcluding its long-term credit agreements, the Company has typically financed its foreign operations with committed and uncommitted short-term seasonal lines of credit arrangements with a number of banks. These operating lines are generally seasonal in nature, typically extending for a term of 180 to 365 days corresponding to the tobacco crop cycle in that location. For uncommitted facilities, the lenders have the right to cease making loans and demand repayment of loans at any time or at specified dates. These loans are generally renewed at the outset of each tobacco season. Certain of the seasonal lines of credit are secured by trade receivables and inventories as collateral and are guaranteed by the Company and certain of its subsidiaries. At March 31, 2026, the total borrowing capacity under individual seasonal lines of credit range up to $170,000. At March 31, 2026 and 2025, the Company was permitted to borrow under foreign seasonal lines of credit, including letters of credit, up to a total of $1,064,468 and $918,372, respectively, subject to limitations under the ABL Credit Agreement and the agreements governing the Senior Secured Term Debt. The weighted average variable interest rate for the years ended March 31, 2026 and 2025 was 8.8% and 9.4%, respectively. Certain of the seasonal lines of credit with aggregate outstanding borrowings at March 31, 2026 and 2025 of $106,850 and $93,243, respectively, are secured by trade receivables and inventories as collateral. At March 31, 2026 and 2025, respectively, $107 and $542 of cash was held on deposit as a compensating balance. At March 31, 2026, the Company and its subsidiaries were in compliance with the covenants associated with the short-term foreign seasonal lines of credit.\n\n17. Securitized Receivables\n\nThe Company sells trade receivables to unaffiliated financial institutions under various accounts receivable securitization facilities, two of which are subject to annual renewal.\n\nUnder the first facility, with Finacity Corporation (the \"Finacity Facility\"), the Company continuously sells a designated pool of trade receivables to a special purpose entity, which sells 100% of the receivables to an unaffiliated financial institution. Following the sale and transfer of the receivables to the special purpose entity, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. This facility requires a minimum level of deferred purchase price be retained by the Company in connection with the sales of the receivables to the unaffiliated financial institution. The Company continues to service, administer, and collect the receivables on behalf of the special purpose entity and receives a servicing fee of 0.5% of serviced receivables per annum. The Company estimates the expected fee it receives in return for its obligation to service these receivables reflects fair value, and accordingly, no servicing assets or liabilities are recognized. Servicing fees are recorded as a reduction of selling, general, and administrative expenses within the consolidated statements of operations. Under this facility, the Company may request a temporary increase in the investment limit up to an additional $40,000, applicable only for the period from January 1, 2026 through May 31, 2026. As of March 31, 2026, the investment limit of this facility was $160,000 of trade receivables, inclusive of the temporary increase.\n\nUnder the second facility, the Company offers trade receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. Although the Company continues to service, administer, and collect the receivables on behalf of the unaffiliated financial institution, the Company does not receive a servicing fee, and as a result, has established a servicing liability based\n\n67\n\nupon unobservable inputs, primarily discounted cash flow. As of March 31, 2026, the investment limit under the second facility was $160,000 of trade receivables.\n\nAs servicer for the Finacity Facility and the second facility, the Company may receive funds that are due to the unaffiliated financial institutions which are net settled on the next settlement date. As of March 31, 2026 and 2025, trade receivables, net in the consolidated balance sheets have been reduced by $13,610 and $2,190 as a result of the net settlement, respectively. See \"[Note 20. Fair Value Measurements](#i6f44eae8422d46cd9f377051509c10a4_190)\" for additional information.\n\nUnder the other facilities, the Company offers trade receivables for sale to unaffiliated financial institutions, which are then subject to acceptance by the unaffiliated financial institutions. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. As of March 31, 2026, the investment limits under these other facilities were variable based on qualifying sales.\n\nThe following summarizes the Company’s accounts receivable outstanding in the securitization facilities, which represents trade receivables sold into the program that have not been collected from the customer, and related beneficial interests, applicable only to the first and second facilities, which represents the Company’s residual interest in receivables sold that have not been collected from the customer:\n\nMarch 31,\n\n20262025\n\nReceivables outstanding in facility$341,679 $355,246 \n\nBeneficial interest29,034 29,354 \n\nCash proceeds from the sale of trade receivables are comprised of an initial cash payment received at the time of transfer and a deferred purchase price receivable, applicable only to the first and second facilities, which represents the Company's right to receive the remaining consideration upon collection of the underlying trade receivables by the purchasers. The following summarizes the Company’s cash collections from both the initial cash proceeds and the deferred purchase price receivable:\n\nYears Ended March 31,\n\n202620252024\n\nCash collections from:\n\n   Initial proceeds$842,093 $981,560 $649,680 \n\n   Deferred purchase price receivable200,684 188,312 175,911 \n\n18. Guarantees\n\nIn certain sourcing regions, the Company guarantees bank loans for suppliers to finance their crops. The Company also guarantees bank loans of certain unconsolidated affiliates. See \"[Note 20. Fair Value Measurements](#i6f44eae8422d46cd9f377051509c10a4_190)\" for the fair value of the Company’s guarantee liability and corresponding fair value classification. The following summarizes amounts guaranteed:\n\nMarch 31,\n\n20262025\n\nAmounts guaranteed (not to exceed)$119,728 $110,660 \n\nAmounts outstanding under guarantee(1)\n92,550 80,045 \n\nAmounts due to local banks on behalf of suppliers for government subsidized rural credit financing10,204 13,787 \n\n (1) Most of the guarantees outstanding at March 31, 2026 expire within one year.\n\n19. Derivative Financial Instruments\n\nAs of March 31, 2026 and 2025, the Company’s derivative financial instruments outstanding were designated as cash flow hedges and were primarily used to hedge Brazilian real denominated purchases of green tobacco and the related processing costs. See \"[Note 23. Accumulated Other](#i6f44eae8422d46cd9f377051509c10a4_199)[Comprehensive Income](#i6f44eae8422d46cd9f377051509c10a4_199)\" for a summary of cash flow hedging activity within accumulated other comprehensive income. See \"[Note 20. Fair Value Measurements](#i6f44eae8422d46cd9f377051509c10a4_190)\" for the fair values of the Company’s outstanding derivative assets and liabilities and corresponding fair value classifications.\n\n68\n\nThe following summarizes the U.S. dollar notional amount of derivative contracts outstanding:\n\nMarch 31,\n\n20262025\n\nForeign currency exchange contracts$54,100 $49,500 \n\nThe following summarizes the impact of foreign currency exchange contracts designated as cash flow hedges (\"hedged derivatives\") and non-designated hedges (\"non-hedged derivatives\") within cost of goods and services sold in the consolidated statements of operations:\n\nYears Ended March 31,\n\n202620252024\n\nForeign currency exchange contracts gains (losses), net from:\n\nHedged derivatives$4,022 $(2,411)$6,356 \n\nNon-hedged derivatives(1)\n4,887 — — \n\n(1) There were foreign currency exchange contracts not designated as hedging instruments (related to the Malawian kwacha) outstanding during the year ended March 31, 2026, but all had expired or settled by period end.\n\n20. Fair Value Measurements\n\nFair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The inputs used to measure fair value are prioritized based on a three-level valuation hierarchy, which is comprised of observable and non-observable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These three levels of inputs create the following fair value hierarchy:\n\n•Level 1 inputs are quoted prices in active markets for identical assets or liabilities.\n\n•Level 2 inputs include data points that are observable such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other data points that are observable (other than quoted prices) or can be corroborated by observable market data.\n\n•Level 3 inputs are unobservable data points that are supported by little or no market activity, which requires management of the Company to develop its own assumptions.\n\n       \n\nThe following summarizes the fair value of the Company's financial assets and liabilities measured on a recurring basis, along with their corresponding level within the fair value hierarchy:\n\nMarch 31,\n\n20262025\n\nLevel 2Level 3Total at Fair ValueLevel 2Level 3Total at Fair Value\n\nFinancial assets:\n\nDerivative financial instruments$649 $— $649 $982 $— $982 \n\nSecuritized beneficial interests— 29,034 29,034 — 29,354 29,354 \n\nTotal assets$649 $29,034 $29,683 $982 $29,354 $30,336 \n\nFinancial liabilities:\n\nDerivative financial instruments$— $— $— $57 $— $57 \n\nLong-term debt(1)\n433,490 — 433,490 433,885 12 433,897 \n\nGuarantees— 7,537 7,537 — 6,459 6,459 \n\nTotal liabilities$433,490 $7,537 $441,027 $433,942 $6,471 $440,413 \n\n(1) This fair value measurement disclosure does not affect the consolidated balance sheets.\n\n69\n\nLevel 2 measurements\n\n•Debt: The fair value of debt is based on the market price for similar financial instruments or model-derived valuations with observable inputs. The primary inputs to the valuation include market expectations, the Company’s credit risk, and the contractual terms of the debt instrument.\n\n•Derivatives: The fair value of derivatives is based on the discounted cash flow analysis of the expected future cash flows. The primary inputs to the valuation include forward yield curves, implied volatilities, interest rates, and credit valuation adjustments.\n\nLevel 3 measurements\n\n•Guarantees: The fair value of guarantees is based on the discounted cash flow analysis of the expected future cash flows or historical loss rates. The historical loss rate was weighted by the principal balance of the loans.\n\n•Securitized beneficial interests: The fair value of securitized beneficial interests is based on the present value of future expected cash flows. The discount rate was weighted by the outstanding interest. Payment speed was weighted by the average days outstanding.\n\n•Debt: The fair value of debt is based on the present value of future payments. The primary inputs to this valuation include treasury notes interest and borrowing rates. The borrowing rates were weighted by average loans outstanding.\n\nThe following summarizes the changes in Level 3 instruments measured on a recurring basis.\n\nYears Ended March 31,\n\n20262025\n\nSecuritized Beneficial InterestsLong-Term DebtGuaranteesSecuritized Beneficial InterestsLong-Term DebtGuarantees\n\nBalance, beginning of period$29,354 $12 $6,459 $15,036 $160 $5,097 \n\nIssuances198,567 — 8,026 244,886 — 7,639 \n\nSettlements(189,786)(12)(3,798)(212,964)(148)(2,421)\n\nLosses recognized in earnings(9,101)— (3,150)(17,604)— (3,856)\n\nBalance, end of period$29,034 $— $7,537 $29,354 $12 $6,459 \n\nThe following summarizes significant unobservable inputs and the valuation techniques utilized:\n\nYear Ended March 31, 2026\n\nValuation TechniqueUnobservable InputRange (Weighted Average)\n\nSecuritized Beneficial InterestsDiscounted Cash FlowDiscount Rate\n2.7% to 6.2%\n\nPayment Speed\n59 days to 91 days\n\nGuaranteesHistorical LossHistorical Loss\n1.2% to 39.1%\n\nYear Ended March 31, 2025\n\nValuation TechniqueUnobservable InputRange (Weighted Average)\n\nSecuritized Beneficial InterestsDiscounted Cash FlowDiscount Rate\n3.0% to 6.9%\n\nPayment Speed\n64 days to 91 days\n\nGuaranteesHistorical LossHistorical Loss\n0.7% to 37.3%\n\n21. Pension and Other Postretirement Benefits\n\nDefined Benefit Plans\n\nThe Company terminated one of its defined benefit pension plans in the United Kingdom (\"U.K. Pension Plan\") during the year ended March 31, 2024. The U.K. Pension Plan was over-funded. During the year ended March 31, 2024, the Company utilized the surplus assets to pay termination fees and received a $1,106 cash distribution from the plan termination. The Company recorded a noncash pension settlement charge of $12,008 during the year ended March 31, 2024, which included the disposition of the U.K. Pension Plan assets and the reclassification of $3,511 unrecognized net pension losses, net of $1,170 tax benefit, within accumulated other comprehensive income into the Company's consolidated statements of operations.\n\n70\n\nThe following summarizes benefit obligations, plan assets, and funded status for the defined benefit pension plans:\n\nU.S. PlansNon-U.S. PlansTotal\n\nMarch 31, 2026\n\nBenefit obligation, beginning$32,877 $19,571 $52,448 \n\nService cost— 211 211 \n\nInterest cost1,559 1,003 2,562 \n\nPlan amendments— 15 15 \n\nActuarial losses (gains)765 (666)99 \n\nPlan settlements— (1,032)(1,032)\n\nEffects of currency translation— 232 232 \n\nBenefits paid(3,337)(1,489)(4,826)\n\nBenefit obligation, ending$31,864 $17,845 $49,709 \n\nFair value of plan assets, beginning$— $22,421 $22,421 \n\nActual return on plan assets— (670)(670)\n\nEmployer contributions3,337 605 3,942 \n\nPlan settlements— (1,032)(1,032)\n\nBenefits paid(3,337)(1,489)(4,826)\n\nFair value of plan assets, ending$— $19,835 $19,835 \n\nFunded status of the plan$(31,864)$1,990 $(29,874)\n\nU.S. PlansNon-U.S. PlansTotal\n\nMarch 31, 2025\n\nBenefit obligation, beginning$33,694 $21,266 $54,960 \n\nService cost— 235 235 \n\nInterest cost1,679 1,038 2,717 \n\nActuarial losses (gains)838 (1,132)(294)\n\nPlan settlements— (224)(224)\n\nEffects of currency translation— (51)(51)\n\nBenefits paid(3,334)(1,561)(4,895)\n\nBenefit obligation, ending$32,877 $19,571 $52,448 \n\nFair value of plan assets, beginning$— $22,380 $22,380 \n\nActual return on plan assets— 1,011 1,011 \n\nEmployer contributions3,334 815 4,149 \n\nPlan settlements— (224)(224)\n\nBenefits paid(3,334)(1,561)(4,895)\n\nFair value of plan assets, ending$— $22,421 $22,421 \n\nFunded status of the plan$(32,877)$2,850 $(30,027)\n\nThe following summarizes amounts reported in the consolidated balance sheets for the defined benefit pension plans:\n\nU.S. PlansNon-U.S. Plans\n\nMarch 31,March 31,\n\n2026202520262025\n\nNoncurrent benefit asset recorded in other noncurrent assets$— $— $7,632 $8,752 \n\nAccrued current benefit liability recorded in accrued expenses and other current liabilities(3,306)(3,313)(653)(729)\n\nAccrued noncurrent benefit liability recorded in pension, postretirement, and other long-term liabilities(28,558)(29,564)(4,989)(5,173)\n\nFunded status of the plan$(31,864)$(32,877)$1,990 $2,850 \n\n71\n\nThe following summarizes pension obligations for the defined benefit pension plans:\n\nU.S. Plans\nNon-U.S. Plans(1)\n\nMarch 31,March 31,\n\n2026202520262025\n\nInformation for pension plans with accumulated benefit obligation in excess of plan assets:\n\nProjected benefit obligation$31,864 $32,877 $5,642 $5,902 \n\nAccumulated benefit obligation31,864 32,877 4,747 5,448 \n\n(1) Certain of the Company's non-U.S. defined benefit pension plans in Europe were over-funded as of March 31, 2026 and 2025.\n\nThe following summarizes activity in accumulated other comprehensive income for the defined benefit plans:\n\nU.S. and Non-U.S. PensionU.S. and Non-U.S. Post-retirementTotal\n\nPrior service cost$(32)$— $(32)\n\nNet actuarial gain11,738 1,209 12,947 \n\nDeferred taxes(109)(40)(149)\n\nBalance at March 31, 2024$11,597 $1,169 $12,766 \n\nPrior service credit$13 $— $13 \n\nNet actuarial (loss) gain(100)28 (72)\n\nDeferred taxes(118)(73)(191)\n\nTotal change for 2025$(205)$(45)$(250)\n\nPrior service cost$(19)$— $(19)\n\nNet actuarial gain11,638 1,237 12,875 \n\nDeferred taxes(227)(113)(340)\n\nBalance at March 31, 2025$11,392 $1,124 $12,516 \n\nPrior service cost$(10)$— $(10)\n\nNet actuarial loss(2,641)(281)(2,922)\n\nDeferred taxes518 122 640 \n\nTotal change for 2026$(2,133)$(159)$(2,292)\n\nPrior service cost$(29)$— $(29)\n\nNet actuarial gain8,997 956 9,953 \n\nDeferred taxes291 9 300 \n\nBalance at March 31, 2026$9,259 $965 $10,224 \n\n72\n\nThe following assumptions were used to determine the expense for the pension plans:\n\nU.S. PlansNon-U.S. Plans\n\nMarch 31,March 31,\n\n202620252024202620252024\n\nDiscount rate5.37%5.33%5.08%5.75%5.37%4.94%\n\nRate of increase in future compensationNot applicableNot applicableNot applicable7.52%10.42%5.72%\n\nExpected long-term rate of return on plan assetsNot applicableNot applicableNot applicable5.04%4.35%4.20%\n\nThe following weighted average assumptions were used to determine the benefit obligations for the pension plans:\n\nU.S. PlansNon-U.S. Plans\n\nMarch 31,March 31,\n\n202620252024202620252024\n\nDiscount rate5.44%5.37%5.33%6.35%5.75%5.37%\n\nRate of increase in future compensationNot applicableNot applicableNot applicable9.07%7.52%10.42%\n\nPlan Assets\n\nThe following summarizes asset allocations and the percentage of the fair value of plan assets by asset category:\n\nNon-U.S. Plans\n\nMarch 31,\n\n20262025\n\nAsset category:\n\nCash and cash equivalents42.3 %96.1 %\n\nDebt securities53.2 %— %\n\nReal estate and other investments4.5 %3.9 %\n\nTotal100.0 %100.0 %\n\nThe fair values for the pension plans by asset category are as follows:\n\nNon-U.S. Pension PlansMarch 31, 2026March 31, 2025\n\nTotalLevel 1TotalLevel 1\n\nCash and cash equivalents$8,390 $8,390 $21,538 $21,538 \n\nU.S. equities / equity funds— — — — \n\nInternational equities / equity funds— — — — \n\nU.S. fixed income funds— — — — \n\nInternational fixed income funds10,544 10,544 — — \n\nReal estate and other(1)\n901 — 883 — \n\nTotal$19,835 $18,934 $22,421 $21,538 \n\n(1) Certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy.\n\n73\n\nPostretirement Health and Life Insurance Benefits\n\nThe following summarizes benefit obligations, plan assets, and funded status for the postretirement health and life insurance benefits plans:\n\nU.S. PlansNon-U.S. PlansTotal\n\nMarch 31, 2026\n\nBenefit obligation, beginning$3,371 $1,386 $4,757 \n\nService cost2 — 2 \n\nInterest cost161 164 325 \n\nEffect of currency translation— 145 145 \n\nActuarial (gains) losses(123)318 195 \n\nBenefits paid(179)(145)(324)\n\nBenefit obligation, ending3,232 1,868 5,100 \n\nFair value of plan assets, beginning$— $— $— \n\nEmployer contributions179 145 324 \n\nBenefits paid(179)(145)(324)\n\nFair value of plan assets, ending$— $— $— \n\nFunded status of the plan$(3,232)$(1,868)$(5,100)\n\nU.S. PlansNon-U.S. PlansTotal\n\nMarch 31, 2026\n\nAccrued current benefit liability recorded in accrued expenses and other current liabilities$(332)$(173)$(505)\n\nAccrued non-current benefit liability recorded in pension, postretirement, and other long-term liabilities(2,900)(1,695)(4,595)\n\nFunded status of the plan$(3,232)$(1,868)$(5,100)\n\nU.S. PlansNon-U.S. PlansTotal\n\nMarch 31, 2025\n\nBenefit obligation, beginning$3,525 $1,580 $5,105 \n\nService cost2 — 2 \n\nInterest cost177 129 306 \n\nEffect of currency translation— (199)(199)\n\nActuarial (gains) losses(177)19 (158)\n\nBenefits paid(156)(143)(299)\n\nBenefit obligation, ending3,371 1,386 4,757 \n\nFair value of plan assets, beginning$— $— $— \n\nEmployer contributions156 143 299 \n\nBenefits paid(156)(143)(299)\n\nFair value of plan assets, ending$— $— $— \n\nFunded status of the plan$(3,371)$(1,386)$(4,757)\n\nU.S. PlansNon-U.S. PlansTotal\n\nMarch 31, 2025\n\nAccrued current benefit liability recorded in accrued expenses and other current liabilities$(334)$(133)$(467)\n\nAccrued non-current benefit liability recorded in pension, postretirement, and other long-term liabilities(3,037)(1,253)(4,290)\n\nFunded status of the plan$(3,371)$(1,386)$(4,757)\n\n74\n\nThe following assumptions were used to determine postretirement benefit obligations:\n\nU.S. PlansNon-U.S. Plans\n\nMarch 31,March 31,\n\n202620252024202620252024\n\nDiscount rate5.55 %5.45 %5.35 %11.46 %11.67 %9.72 %\n\nHealth care cost trend rate assumed for next year7.01 %6.47 %6.58 %8.76 %8.94 %8.75 %\n\nCash Flows\n\nThe Company expects to contribute the following to its benefit plans:\n\nPension BenefitsPostretirement Plans\n\nU.S. PlansNon-U.S. PlansU.S. PlansNon-U.S. PlansTotal\n\nFiscal Year 2027$3,306 $653 $332 $173 $4,464 \n\nThe Company’s contributions to the defined contribution plans are as follows:\n\nYears Ended March 31,\n\n202620252024\n\nContributions$4,856 $4,459 $4,395 \n\nThe following summarizes the expected benefit payments to be paid in future fiscal years, as of March 31, 2026:\n\nPension BenefitsOther Benefits\n\nU.S. PlansNon-U.S. PlansU.S. PlansNon-U.S. PlansTotal\n\n2027$3,306 $1,597 $332 $173 $5,408 \n\n20283,231 1,568 321 178 5,298 \n\n20293,148 1,422 309 183 5,062 \n\n20303,058 1,568 298 189 5,113 \n\n20312,960 1,353 285 194 4,792 \n\nThereafter13,083 9,922 1,255 1,056 25,316 \n\nTotal$28,786 $17,430 $2,800 $1,973 $50,989 \n\n22. Contingencies and Other Information\n\nBrazilian Tax Credits\n\nThe government in the Brazilian State of Parana (\"Parana\") issued a tax assessment on October 26, 2007, with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil. At March 31, 2026, the assessment for intrastate trade tax credits taken is $2,529 and the total assessment including penalties and interest is $11,306. The Company believes it has properly complied with Brazilian law and will contest any assessment through the judicial process. Should the Company lose in the judicial process, the loss of the intrastate trade tax credits would have a material impact on the consolidated financial statements of the Company.\n\nOther Matters\n\nIn addition to the above-mentioned matter, the Company or certain of its subsidiaries are involved in other litigation or legal matters incidental to their business activities, including tax matters. While the outcome of these matters cannot be predicted with certainty, they are being vigorously defended and the Company does not currently expect that any of them will have a material adverse effect on its business or financial position. However, should one or more of these matters be resolved in a manner adverse to its current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material.\n\n75\n\n23. Accumulated Other Comprehensive Income\n\nThe following summarizes changes in each component of accumulated other comprehensive income, net of tax, attributable to the Company:\n\nCurrency Translation AdjustmentPensions, Net of TaxDerivatives, Net of TaxAccumulated Other Comprehensive Income\n\nBalances at March 31, 2023$(6,392)$8,335 $3,572 $5,515 \n\nOther comprehensive income (loss) before reclassifications700 (4,436)1,698 (2,038)\n\nAmounts reclassified to net income, net of tax— 8,867 (4,558)4,309 \n\nOther comprehensive income (loss), net of tax700 4,431 (2,860)2,271 \n\nBalances at March 31, 2024$(5,692)$12,766 $712 $7,786 \n\nOther comprehensive (loss) income before reclassifications(353)62 (2,226)(2,517)\n\nAmounts reclassified to net income, net of tax— (312)2,358 2,046 \n\nOther comprehensive (loss) income, net of tax(353)(250)132 (471)\n\nBalances at March 31, 2025$(6,045)$12,516 $844 $7,315 \n\nOther comprehensive income (loss) before reclassifications1,366 (1,570)2,819 2,615 \n\nAmounts reclassified to net income, net of tax(430)(722)(2,655)(3,807)\n\nOther comprehensive income (loss), net of tax936 (2,292)164 (1,192)\n\nBalances at March 31, 2026$(5,109)$10,224 $1,008 $6,123 \n\nThe following summarizes amounts by component, reclassified from accumulated other comprehensive income to net income:\n\nYears Ended March 31,Affected Line Item in the Consolidated Statements of Operations\n\n202620252024\n\nPension and postretirement plans(1):\n\nSettlement (gain) loss$(283)$— $4,681 Gain (loss) on pension settlement\n\nActuarial (gain) loss(583)(581)6,780 Interest expense, net\n\nAmortization of prior service cost2 3 4 Interest expense, net\n\nAmounts reclassified from equity to the income statement, gross(864)(578)11,465 \n\nTax effects of amounts reclassified from accumulated other comprehensive income to net income142 266 (2,598)\n\nAmounts reclassified from equity to the income statement, net$(722)$(312)$8,867 \n\n(1) Amounts are included in net periodic benefit costs for pension and postretirement plans.\n\n76\n\nYears Ended March 31,Affected Line Item in the Consolidated Statements of Operations\n\n202620252024\n\nDerivatives:\n\n(Gain) loss on foreign exchange contracts designated as cash flow hedges$(4,022)$3,185 $(6,356)\nCost of goods and services sold;\n\nselling, general, and administrative expenses(1)\n\nAmounts reclassified from equity to the income statement, gross(4,022)3,185 (6,356)\n\nTax effects of amounts reclassified from accumulated other comprehensive income to net income1,367 (827)1,798 \n\nAmounts reclassified from equity to the income statement, net$(2,655)$2,358 $(4,558)\n\n(1) All amounts recorded in cost of goods and services sold, except during the year ended March 31, 2025, when $2,411 was recorded in cost of goods and services sold and $774 was recorded in selling, general, and administrative expenses.\n\n24. Equity-Based Compensation\n\nOn March 21, 2024 and March 19, 2025, the Board of Directors amended and restated the Incentive Plan to increase the number of shares of the Company’s common stock authorized to be issued thereunder to 3,220 shares and to 3,612 shares (which amounts are presented in thousands), respectively. Pursuant to the Incentive Plan, prior to May 10, 2024, the Company granted time-vesting restricted stock units, with the vesting of these restricted stock units being subject to continued employment or service through specified dates and the condition that the Company’s common stock be listed for trading on a national securities exchange or an approved foreign securities exchange by March 31, 2028 (the \"Listing Condition\").\n\nOn May 10, 2024 (the \"Modification Date\"), the restricted stock units granted under the Incentive Plan that were outstanding immediately prior to that date were amended to extend the period by which the Listing Condition must be satisfied for the vesting of such restricted stock units from March 31, 2028 to March 31, 2031 and to provide that the Listing Condition shall be deemed to be satisfied on March 31, 2031, regardless of whether the Company’s common stock has been listed by that date on a national securities exchange or foreign securities exchange and would vest earlier upon the occurrence of a \"Change in Control\" (as defined in the Incentive Plan) as a result of a merger, consolidation, share exchange or sale of all or substantially all of the assets of the Company (a \"change-in-control event\"). On the Modification Date, the amended Listing Condition was rendered nonsubstantive, and recipients of the outstanding restricted stock units had satisfied the continued service requirement, meaning the then-outstanding restricted stock units were fully earned for vesting.\n\nPerformance-based stock units awarded under the Incentive Plan prior to the fiscal year ended March 31, 2025 provided for the issuance of shares based on satisfaction of performance criteria over a three-year measurement period ended March 31, 2024, subject to continued employment, with payouts at 50% of the target level upon satisfaction of threshold performance levels, 100% of the target level upon satisfaction of target performance levels and 150% of the target level upon performance equaling or exceeding the maximum performance levels, with payouts interpolated for performance between these levels. Such performance-based restricted stock units were subject to an additional condition to vesting that the Company’s common stock be listed for trading on a national securities exchange or an approved foreign securities exchange by a specified date. The performance criteria for these performance-based stock units were not satisfied at the threshold level for the three-year measurement period ended March 31, 2024 and all such performance-based stock units were forfeited.\n\n77\n\nRestricted Stock Units\n\nRestricted stock units granted under the Incentive Plan on or after the Modification Date are earned ratably for certain employees, subject to their continued employment, from the date of the award to March 31, 2027, and for certain non-employee directors, subject to continued board service, from the date of the award to the Company’s next annual meeting of shareholders. Restricted stock units vest upon the earlier of March 31, 2031 or the occurrence of certain corporate events as specified in the restricted stock unit award agreement. The following summarizes activity for restricted stock units:\n\n(in thousands except grant date fair value)Restricted Stock UnitsWeighted Average Grant Date Fair Value Per Share\n\nNonvested, March 31, 2024(1)\n956 $3.50 \n\nGranted862 3.41 \n\nCanceled or forfeited(94)3.50 \n\nNonvested, March 31, 2025\n1,724 $3.46 \n\nGranted85 4.23 \n\nCanceled or forfeited(60)3.50 \n\nNonvested, March 31, 2026\n1,749 $3.49 \n\n(1) The weighted average grant date fair value per share is as of the Modification Date, the date at which these outstanding units were fully earned for vesting.\n\nThe following summarizes equity-based compensation expense for restricted stock units:\n\nYears Ended March 31,\n\n2026\n2025(1)\n2024\n\nEquity-based compensation expense$1,022 $4,110 $— \n\n(1) The amount recorded during the year ended March 31, 2025 included the impact of a cumulative catch-up adjustment of $3,263 due to the modification on May 10, 2024 of awards then outstanding under the Incentive Plan.\n\nUnrecognized compensation cost for restricted stock units is $979 as of March 31, 2026, and is expected to be recognized over a weighted average period of 0.93 years, representing the weighted average remaining service period related to the awards, subject to adjustments for actual forfeitures.\n\nPerformance-Based Stock Units\n\nPerformance-based stock units granted under the Incentive Plan on or after the Modification Date will vest if the per share price achieved in a liquidity event equals or exceeds the specified target level. The amount of common stock shares to be issued after a liquidity event will range from 0% to 200% of the number of performance-based stock units granted, contingent upon the per share price achieved in the liquidity event and subject to continued employment through the date of the liquidity event. The contingent liquidity event is not probable as of March 31, 2026, and accordingly, no equity-based compensation expense has been recognized for performance-based stock units. The following summarizes activity for performance-based stock units (at the target performance level):\n\n(in thousands except grant date fair value)Performance-Based Stock UnitsWeighted Average Grant Date Fair Value Per Share\n\nNonvested, March 31, 2024\n589 $— \n\nGranted605 4.36 \n\nCanceled or forfeited(1)\n(642)4.36 \n\nNonvested, March 31, 2025*\n553 $4.36 \n\nGranted23 6.79 \n\nCanceled or forfeited(67)4.36 \n\nNonvested, March 31, 2026*\n508 $4.47 \n\n*Amounts may not equal totals due to rounding.\n\n(1) On the Modification Date, the performance-based restricted stock units granted under the Incentive Plan that were outstanding at March 31, 2024 were canceled as the vesting requirements were not met.\n\n78\n\n25. Related Party Transactions\n\nThe Company engages in transactions with its equity method investees primarily for the procuring and processing of inventory. The following summarizes sales and purchases transactions with related parties:\n\nYears Ended March 31,\n\n202620252024\n\nSales$23,112 $16,512 $25,059 \n\nPurchases193,856 214,341 204,193 \n\nDividends received8,436 12,449 14,486 \n\n          \n\nThe Company included the following related party balances in its consolidated balance sheets:\n\nMarch 31,\n\n20262025Location in Consolidated Balance Sheet\n\nAccounts receivable, related parties$62 $50 Other receivables\n\nAccounts payable, related parties39,317 19,731 Accounts payable\n\nTransactions with Significant Shareholders\n\nBased on a Schedule 13D/A filed with the SEC on June 13, 2024 by Glendon Capital Management, L.P. (the \"Glendon Investor\"), Holly Kim Olsen, Glendon Opportunities Fund, L.P. and Glendon Opportunities Fund II, L.P., the Glendon Investor reported beneficial ownership of 8,315 shares of the Company’s common stock, representing approximately 33.8% of the outstanding shares of the Company’s common stock. A representative of the Glendon Investor serves as a director of Pyxus. Based on a Schedule 13D/A filed with the SEC on March 25, 2024, by Monarch Alternative Capital LP (the \"Monarch Investor\"), MDRA GP LP and Monarch GP LLC, the Monarch Investor reported beneficial ownership of 6,125 shares of the Company’s common stock, representing approximately 24.9% of the outstanding shares of the Company’s common stock. An individual designated by the Monarch Investor serves as a director of Pyxus. Based on a Schedule 13G/A filed with the SEC on September 3, 2024 by Owl Creek Asset Management, L.P. and Jeffrey A. Altman, Owl Creek Asset Management, L.P. is the investment manager of certain funds and reported beneficial ownership of 3,865 shares of the Company’s common stock on August 31, 2024, representing approximately 15.7% of the outstanding shares of the Company’s common stock. Funds managed by the Glendon Investor, funds managed by the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P., (such funds are collectively referred to as the \"Investor-Affiliated Funds\") were holders, in part, of the Intabex Term Loans, the Pyxus Term Loans and the 2027 Notes, which are described in \"[Note 16. Debt Arrangements](#i6f44eae8422d46cd9f377051509c10a4_178),\" during the fiscal year ended March 31, 2026.\n\nOn March 21, 2024, Pyxus Holdings entered into an agreement (the \"Debt Repurchase Agreement\") with funds affiliated with the Monarch Investor to purchase $77,922 of aggregate principal amount of their holdings in the 2027 Notes for $60,000, a 23.0% discount to par value, plus accrued and unpaid interest and specified customary fees. The Debt Repurchase Agreement also included the right of Pyxus Holdings, at its option, to purchase from such holders an additional $34,191 aggregate principal amount of the 2027 Notes for $26,327, a 23.0% discount to par value, plus accrued and unpaid interest, and $10,345 aggregate principal amount of the Pyxus Term Loans for $9,104, a 12.0% discount to par value, plus accrued and unpaid interest. On April 12, 2024, Pyxus Holdings exercised its rights to complete these repurchases by September 30, 2024.\n\nThe Debt Repurchase Agreement and the transactions contemplated thereby, including the exercise by Pyxus Holdings of its right to purchase the Pyxus Term Loans and additional 2027 Notes thereunder, were approved, and determined to be on terms and conditions at least as favorable to the Company and its subsidiaries as could reasonably have been obtained in a comparable arm’s-length transaction with an unaffiliated party, by a majority of the disinterested members of the Board of Directors of Pyxus.\n\nUnder the terms of the Debt Repurchase Agreement, the Company paid the following amounts to funds affiliated with the Monarch Investor:\n\n•On March 28, 2024, the Company paid a total of $62,339, which included $1,849 of accrued and unpaid interest and $490 in other fees, to retire $77,922 of aggregate principal amount of the 2027 Notes.\n\n•On May 31, 2024, the Company paid a total of $9,435, which included $332 of accrued and unpaid interest, to retire $10,345 of aggregate principal amount of the Pyxus Term Loans.\n\n•On August 2, 2024, the Company paid a total of $26,707, which included $379 of accrued and unpaid interest, to retire $34,191 of aggregate principal amount of the 2027 Notes.\n\n79\n\nUpon completion of the transactions under the Debt Repurchase Agreement, the Monarch Investor is no longer a holder of the 2027 Notes and the Pyxus Term Loans. The Monarch Investor remains a related party as a holder of a portion of the Intabex Term Loans and a beneficial owner of more than five percent of the Company's common stock outstanding.\n\nOn August 21, 2024, the Company entered into a privately negotiated transaction with CI Investments, Inc. (\"CI Investments\"), which at that time was a beneficial owner of greater than five percent of the Company’s common stock outstanding, to repurchase 392 (which amount is presented in thousands) shares of its common stock for approximately $1,000, inclusive of broker commission fees, which transaction was completed on August 22, 2024. This transaction was approved and determined to be on terms and conditions at least as favorable to the Company and its subsidiaries as could reasonably have been obtained in a comparable arm’s-length transaction with an unaffiliated party, by a majority of the disinterested members of the Board of Directors of Pyxus. Following the completion of this transaction and other contemporaneous dispositions of the Company’s common stock by CI Investments, CI Investments ceased to be a beneficial owner of more than five percent of the Company’s common stock outstanding.\n\nAccrued expenses and other current liabilities as presented in the consolidated balance sheets as of March 31, 2026 and 2025 included $1,352 and $1,600, respectively, of interest payable to Investor-Affiliated Funds. Interest expense as presented in the consolidated statements of operations included $21,534, $24,416 and $40,909 for the years ended March 31, 2026, 2025, and 2024, respectively, that related to the Investor-Affiliated Funds and CI Investments (applicable only for the periods in which CI Investments was a beneficial owner of more than five percent of the Company’s common stock outstanding).\n\n26. Segment Information\n\nThe Company is primarily engaged in the processing and sale of leaf tobacco to manufacturers of cigarettes and other consumer tobacco products around the world, with a smaller percentage of revenue in each region being derived from performing third-party tobacco processing services. The Company's leaf tobacco operations are organized by six operating segments, represented by five geographic regions and one product category. The geographic regions of Africa, Asia, Europe, North America, and South America, as well as Value-Added Tobacco Products (\"VATP\"), which is primarily comprised of the Company's cut rag tobacco operations, each have their own management teams responsible for the operating and financial results of their operating segment. Further, revenues for each geographic region and VATP are derived mainly from shipping processed tobacco. The Company evaluated its leaf tobacco operations and concluded they have similar economic characteristics and meet qualitative aggregation criteria to be combined into one reportable segment for financial reporting purposes: Leaf.\n\nThe one Leaf reportable segment is consistent with information used by the chief operating decision maker (\"CODM\") to assess performance, make operating decisions, and allocate resources. The Company’s CODM, comprised of both the chief executive officer and the chief financial officer, regularly evaluates performance using operating income as the measure of segment profitability. This measure is utilized during the budgeting and forecasting process to determine future operating plans and enable strategic decision making for the allocation of capital. Corporate general expenses are allocated to the segments based upon segment selling, general, and administrative expenses.\n\nAn All Other category exists to reflect business activities that are incidental to our core leaf tobacco operations, and primarily relate to the Company's non-tobacco agricultural products business. The All Other category does not meet the quantitative and qualitative thresholds to be reportable.\n\n80\n\nThe following summarizes financial information relating to the Leaf segment (the Company’s sole reportable segment) with the All Other category included for purposes of reconciliation of the Leaf segment balances to the consolidated financial statements:\n\nYears Ended March 31,\n\n202620252024\n\nSales and other operating revenues:\n\nLeaf$2,405,073 $2,470,984 $2,029,615 \n\nAll Other7,927 10,276 2,944 \n\nConsolidated sales and other operating revenues2,413,000 2,481,260 2,032,559 \n\nCost of goods and services sold:\n\nLeaf2,059,050 2,125,756 1,714,053 \n\nAll Other6,271 12,520 6,171 \n\nConsolidated cost of goods and services sold2,065,321 2,138,276 1,720,224 \n\nSelling, general, and administrative expenses:\n\nLeaf157,381 164,228 154,074 \n\nAll Other5,553 6,770 6,836 \n\nConsolidated selling, general, and administrative expenses162,934 170,998 160,910 \n\nOther segment items:(1)\n\nLeaf19,489 16,714 8,281 \n\nAll Other(296)(304)1,158 \n\nConsolidated other segment items19,193 16,410 9,439 \n\nLeaf segment operating income169,153 164,286 153,207 \n\nAll Other operating loss(3,601)(8,710)(11,221)\n\nRestructuring and asset impairment charges2,852 2,259 4,799 \n\nConsolidated operating income162,700 153,317 137,187 \n\nGain on debt retirement— 8,178 15,914 \n\nGain (loss) on pension settlement283 — (12,008)\n\nInterest expense, net134,353 128,041 125,620 \n\nIncome before income taxes and other items$28,630 $33,454 $15,473 \n\n(1) Represents the other expense, net caption within the consolidated statements of operations. See \"[Note 4. Other Expense, Net](#i6f44eae8422d46cd9f377051509c10a4_145)\" for additional information.\n\nYears Ended March 31,\n\n202620252024\n\nLeafAll OtherTotalLeafAll OtherTotalLeafAll OtherTotal\n\nDepreciation and amortization$19,375 $1,518 $20,893 $18,772 $1,562 $20,334 $17,767 $1,483 $19,250 \n\nCapital expenditures19,878 2,195 22,073 21,137 2,977 24,114 18,062 2,973 21,035 \n\n81\n\nMarch 31, 2026March 31, 2025\n\nLeafAll OtherTotalLeafAll OtherTotal\n\nAssets$1,660,016 $34,676 $1,694,692 $1,466,400 $37,443 $1,503,843 \n\nTrade and other receivables, net264,410 497 264,907 204,054 175 204,229 \n\nInvestments in unconsolidated affiliates99,239 6,624 105,863 90,238 6,690 96,928 \n\nThe following summarizes geographic information for sales and other operating revenues by destination of the product shipped:\n\nYears Ended March 31,\n\n202620252024\n\nSales and Other Operating Revenues:\n\nChina$354,250 $497,437 $362,778 \n\nIndonesia268,913 227,369 215,491 \n\nU.S.267,567 244,556 192,745 \n\nBelgium(1)\n205,644 160,337 156,085 \n\nUnited Arab Emirates204,674 213,321 182,687 \n\nTurkey116,376 84,957 62,089 \n\nPoland100,497 79,390 63,826 \n\nRussia75,496 53,564 70,794 \n\nEgypt35,411 133,023 43,495 \n\nOther784,172 787,306 682,569 \n\nTotal$2,413,000 $2,481,260 $2,032,559 \n\n(1) The Belgium destination represents a customer-owned storage and distribution center from which the tobacco will be shipped on to manufacturing facilities.\n\nThe following summarizes the customers, including their respective affiliates, that account for 10% or more of total sales and other operating revenues for the respective periods, as indicated by an \"x\":\n\nYears Ended March 31,\n\n202620252024\n\nChina National Tobacco Corporationxxx\n\nJapan Tobacco Internationalxxx\n\nPhilip Morris International Inc.xxx\n\nThe following summarizes geographic information for property, plant, and equipment by location:\n\nMarch 31,\n\n20262025\n\nProperty, Plant, and Equipment, Net:\n\nBrazil$37,648 $33,720 \n\nMalawi25,856 26,091 \n\nZimbabwe23,565 24,049 \n\nU.S.25,241 22,293 \n\nTanzania10,483 11,131 \n\nJordan8,626 9,588 \n\nOther11,735 11,304 \n\nTotal$143,154 $138,176 \n\n82\n\n27. Subsequent Events\n\nSecuritized Receivables\n\nOn May 29, 2026, the Finacity Facility arrangement was extended to May 31, 2027. Additionally, on June 1, 2026, the investment limit of the Finacity Facility was decreased from $160,000 to $120,000 of trade receivables.\n\n83\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nTo the shareholders and the Board of Directors of Pyxus International, Inc.\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Pyxus International, Inc. and subsidiaries (the \"Company\") as of March 31, 2026 and March 31, 2025, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended March 31, 2026, and the related notes (collectively referred to as the \"financial statements\"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and March 31, 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2026, in conformity with accounting principles generally accepted in the United States of America.\n\nBasis for Opinion\n\nThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\nOur audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nIncome Taxes — Accounting for Uncertainty in Income Taxes — Refer to Note 1 and Note 5 to the financial statements\n\nCritical Audit Matter Description\n\nThe Company’s annual tax rate is based on its pre-tax income by jurisdiction, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties. The Company records unrecognized tax benefits in multiple jurisdictions and evaluates the future potential outcomes of tax positions, based upon interpretation of the country-specific tax law and the likelihood of future settlement. Conclusions on recognizing and measuring uncertain tax positions involved significant management estimates and judgment and included complex considerations of local tax laws and related regulations in the various jurisdictions in which the Company operates.\n\nWe identified certain uncertain tax positions as a critical accounting matter because of the significant estimates and assumptions involved in recording uncertain tax positions. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our tax specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates.\n\n84\n\nHow the Critical Audit Matter Was Addressed in the Audit\n\nOur audit procedures related to management’s estimates and assumptions utilized in the Company’s determination of these uncertain tax positions included the following, among others:\n\n•With the assistance of our income tax specialists, we read and evaluated management’s documentation, including relevant accounting policies, relevant authoritative tax literature, and information obtained by management from outside tax specialists and attorneys, that detailed the basis of these uncertain tax positions.\n\n•With the assistance of our income tax specialists, we evaluated management’s judgment of the appropriate unit of account for unrecognized tax benefits and audited the measurement calculations, as applicable.\n\n•We challenged the reasonableness of management’s judgments regarding the future resolution of these uncertain tax positions, through evaluating the technical merits of the uncertain tax positions by considering how tax law, including statutes, regulations, and case law, impacted management’s judgments and through consideration of the Company’s history of settlements.\n\n•For these uncertain tax positions that had not been settled, we evaluated whether management had appropriately considered new information that could significantly change the recognition or measurement of uncertain tax positions through evaluation of correspondence with taxing authorities and evaluation of changes to issued guidance.\n\n/s/ Deloitte & Touche LLP\n\nRaleigh, North Carolina\n\nJune 4, 2026\n\nWe have served as the Company’s auditor since its fiscal 2006.\n\n85"}