Operating Segments

12 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Operating Segments

OPERATING SEGMENTS

Universal’s operations involve selecting, procuring, processing, packing, storing, shipping, and financing leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products throughout the world. Through various operating subsidiaries located in tobacco-growing countries around the world and significant ownership interests in unconsolidated affiliates, the Company processes and/or sells flue-cured and burley tobaccos, dark air-cured tobaccos, and oriental tobaccos. Flue-cured, burley, and oriental tobaccos are used principally in the manufacture of cigarettes, and dark air-cured tobaccos are used mainly in the manufacture of cigars, pipe tobacco, and smokeless tobacco products. A substantial portion of the Company’s revenues are derived from sales to a limited number of large, multinational cigarette manufacturers.

The principal approach used by management to evaluate the Company’s performance is by geographic region, although the dark air-cured and oriental tobacco businesses are each evaluated on the basis of their worldwide operations. Oriental tobacco operations consist principally of a 49% interest in an affiliate, and the performance of those operations is evaluated based on the Company’s equity in the pretax earnings of that affiliate. Under this structure, the Company has the following primary operating segments: North America, South America, Africa, Europe, Asia, Dark Air-Cured, Oriental, and Special Services. North America, South America, Africa, Europe, and Asia are primarily involved in flue-cured and/or burley leaf tobacco operations for supply to cigarette manufacturers. The Dark Air-Cured group supplies dark air-cured tobacco principally to manufacturers of cigars, pipe tobacco, and smokeless tobacco products, and the Oriental business supplies oriental tobacco to cigarette manufacturers. From time to time, the segments may trade in tobaccos that differ from their main varieties, but those activities are not significant to their overall results. Special Services includes the Company's laboratory services business, which provides physical and chemical product testing and smoke testing for customers, as well as its liquid nicotine joint venture and its food and vegetable ingredients business.

The five regional operating segments serving the Company’s cigarette manufacturer customer base share similar characteristics in the nature of their products and services, production processes, class of customer, product distribution methods, and regulatory environment. Based on the applicable accounting guidance, four of the regions – South America, Africa, Europe, and Asia – are aggregated into a single reporting segment, “Other Regions”, because they also have similar economic characteristics. North America is reported as an individual operating segment because its economic characteristics differ from the other regions, generally because its operations require lower working capital investments for crop financing and inventory. The Dark Air-Cured, Oriental and Special Services segments, which have dissimilar characteristics in some of the categories mentioned above, are reported together as “Other Tobacco Operations” because each is below the measurement threshold for separate reporting.

Universal incurs overhead expenses related to senior management, finance, legal, and other functions that are centralized at its corporate headquarters, as well as functions performed at several sales and administrative offices around the world. These overhead expenses are allocated to the various operating segments, generally on the basis of tobacco volumes planned to be purchased and/or processed. Management believes this method of allocation is representative of the value of the related services provided to the operating segments. The Company evaluates the performance of its segments based on operating income after allocated overhead expenses, plus equity in the pretax earnings of unconsolidated affiliates.

Reportable segment data as of, or for, the fiscal years ended March 31, 2015, 2014, and 2013, is as follows:

	Sales and Other Operating Revenues						Operating Income
	Fiscal Year Ended March 31,						Fiscal Year Ended March 31,
	2015		2014		2013		2015			2014			2013
Flue-Cured and Burley Leaf Tobacco Operations:
North America	$	305,028	$	348,627	$	334,676	$	31,060		$	23,217		$	19,740
Other Regions(1)	1,739,781		1,932,228		1,871,880		125,839			133,447			192,556
Subtotal	2,044,809		2,280,855		2,206,556		156,899			156,664			212,296
Other Tobacco Operations(2)	226,992		261,260		255,143		10,326			18,511			20,461
Segment total	2,271,801		2,542,115		2,461,699		167,225			175,175			232,757
Deduct: Equity in pretax earnings of unconsolidated affiliates (3)							(7,137		)	(3,897		)	(5,635		)
Restructuring costs(4)							(4,890		)	(6,746		)	(4,113		)
Add: Other income(5)							12,676			81,619			—
Consolidated total	$	2,271,801	$	2,542,115	$	2,461,699	$	167,874		$	246,151		$	223,009
	Segment Assets						Goodwill
	March 31,						March 31,
	2015		2014		2013		2015			2014			2013
Flue-Cured and Burley Leaf Tobacco Operations:
North America	$	289,792	$	277,028	$	295,785	$	—		$	—		$	—
Other Regions(1)	1,611,083		1,677,654		1,682,581		97,372			97,367			96,667
Subtotal	1,900,875		1,954,682		1,978,366		97,372			97,367			96,667
Other Tobacco Operations(2)	297,598		316,225		327,789		1,713			1,713			1,713
Segment and consolidated totals	$	2,198,473	$	2,270,907	$	2,306,155	$	99,085		$	99,080		$	98,380
	Depreciation and Amortization						Capital Expenditures
	Fiscal Year Ended March 31,						Fiscal Year Ended March 31,
	2015		2014		2013		2015			2014			2013
Flue-Cured and Burley Leaf Tobacco Operations:
North America	$	4,284	$	6,018	$	11,017	$	5,814		$	2,676		$	2,459
Other Regions(1)	28,827		29,044		30,118		39,303			37,584			24,886
Subtotal	33,111		35,062		41,135		45,117			40,260			27,345
Other Tobacco Operations (2)	4,213		3,837		3,981		13,268			5,589			3,438
Segment and consolidated totals	$	37,324	$	38,899	$	45,116	$	58,385		$	45,849		$	30,783

⁽¹⁾  Includes South America, Africa, Europe, and Asia regions, as well as inter-region eliminations.

⁽²⁾  Includes Dark Air-Cured, Oriental, and Special Services, as well as inter-company eliminations. Sales and other operating revenues, goodwill, depreciation and amortization, and capital expenditures include limited amounts or no amounts for Oriental because the business is accounted for on the equity method and its financial results consist principally of equity in the pretax earnings of the unconsolidated affiliate. The investment in the unconsolidated affiliate is included in segment assets and was approximately $74.9 million, $93.3 million, and $91.8 million, at March 31, 2015, 2014, and 2013, respectively.

⁽³⁾  Equity in pretax earnings of unconsolidated affiliates is included in segment operating income (Other Tobacco Operations segment), but is reported below consolidated operating income and excluded from that total in the consolidated statements of income.

⁽⁴⁾  Restructuring costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income (see Note 2).

⁽⁵⁾  Other income represents the reversal of a valuation allowance on the remaining unused balance of IPI excise tax credits in Brazil in fiscal year 2015 and the gain on the favorable outcome of the IPI tax credit case in fiscal year 2014 (see Note 14).

Geographic data as of, or for, the fiscal years ended March 31, 2015, 2014, and 2013, is presented below. Sales and other operating revenues are attributed to individual countries based on the final destination of the shipment. Long-lived assets generally consist of net property, plant, and equipment, goodwill, and other intangibles.

Geographic Data	Sales and Other Operating Revenues
	Fiscal Year Ended March 31,
	2015		2014		2013
United States	$	290,950	$	304,527	$	324,285
Belgium	226,562		218,550		203,539
China	174,872		210,956		229,112
Germany	170,338		173,872		128,144
Russia	126,652		123,114		130,906
Poland	114,765		106,443		126,826
Netherlands	113,297		208,031		174,481
All other countries	1,054,365		1,196,622		1,144,406
Consolidated total	$	2,271,801	$	2,542,115	$	2,461,699
	Long-Lived Assets
	March 31,
	2015		2014		2013
United States	$	70,929	$	61,347	$	64,235
Brazil	135,980		135,359		137,133
Mozambique	55,733		49,543		48,016
All other countries	141,893		149,750		137,132
Consolidated total	$	404,535	$	395,999	$	386,516