Restructuring And Impairment Costs

12 Months Ended

Mar. 31, 2013

Restructuring Costs [Abstract]

Restructuring And Impairment Costs

RESTRUCTURING AND IMPAIRMENT COSTS

During the fiscal years ended March 31, 2011, 2012 and 2013, Universal recorded restructuring and impairment costs related to various initiatives to adjust certain operations and reduce costs. A significant portion of the restructuring and impairment charges related to the Company’s November 2010 decision to close its leaf tobacco processing facility in Simcoe, Ontario, Canada. The Company continues to buy tobacco grown in Canada, but now processes that leaf at its U.S. factory in North Carolina. The Simcoe processing facility and a separate storage complex were classified as “held for sale” at the date the decision was made to close the operations, and an impairment charge of approximately $5.6 million was recorded in the third quarter of fiscal year 2011 to write those assets down to their fair values, net of selling costs. The sales of both properties were completed during fiscal year 2012 at prices approximating their adjusted book values. All full-time salaried employees at the Simcoe location were terminated by June 30, 2011. During fiscal year 2011, the Company recorded approximately $2.4 million in costs for termination benefits payable to those employees under Canadian law and $4.1 million in pension curtailment and settlement costs related to the termination of the Canadian employees’ defined benefit pension plan. The Canadian operations were included in the North America segment.

In addition to the restructuring and impairment costs related to the closure of the facility in Canada, the Company recorded restructuring costs associated with various other cost reduction initiatives during fiscal years 2011, 2012, and 2013. A significant portion of those costs consisted of employee termination benefits associated with voluntary early retirement offers and involuntary separations at the Company’s headquarters and operating locations in the United States, South America, Africa, Europe, and Asia that are part of the North America and Other Regions reportable segments. In addition, during fiscal year 2012, the Company recorded approximately $3.1 million in costs related to the termination of its business arrangements with a supplier and processor of tobacco in Europe in response to market changes. That cost related to an operating subsidiary that is part of the Other Regions reportable segment.

A summary of the restructuring and impairment costs recorded during fiscal years 2011, 2012, and 2013 is as follows:

	Employee Termination Benefits		Pension Curtailment and Settlement Costs		Other Restructuring Costs		Impairment of Property, Plant and Equipment		Total
Fiscal Year 2011 Costs:
Closure of processing facility in Canada	$	2,412	$	4,081	$	—	$	5,632	$	12,125
Other restructuring and cost reduction initiatives	8,743		—		636		—		9,379
Total	11,155		4,081		636		5,632		21,504
Fiscal Year 2012 Costs:
Other restructuring and cost reduction initiatives	8,564		—		3,097		—		11,661
Fiscal Year 2013 Costs:
Other restructuring and cost reduction initiatives	4,113		—		—		—		4,113
Total costs - fiscal years 2011, 2012 and 2013	$	23,832	$	4,081	$	3,733	$	5,632	$	37,278

A reconciliation of the Company’s liability for the employee termination benefits and other restructuring costs outlined above through March 31, 2013, is as follows:

	Employee Termination Benefits			Other Costs			Total
Fiscal Year 2011 Activity:
Costs charged to expense	$	11,155		$	636		$	11,791
Payments	(4,769		)	(411		)	(5,180		)
Balance at March 31, 2011	6,386			225			6,611
Fiscal Year 2012 Activity:
Costs charged to expense	8,564			3,097			11,661
Payments	(13,679		)	(3,031		)	(16,710		)
Balance at March 31, 2012	1,271			291			1,562
Fiscal Year 2013 Activity:
Costs charged to expense	4,113			—			4,113
Payments	(5,002		)	(291		)	(5,293		)
Balance at March 31, 2013	$	382		$	—		$	382

The majority of the restructuring liability at March 31, 2013 will be paid in the early part of fiscal year 2014. Universal continually reviews its business for opportunities to realize efficiencies, reduce costs, and realign its operations in response to business changes. The Company may incur additional restructuring costs and asset impairment charges in future periods as business changes occur and additional cost savings initiatives are implemented.