10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
		FOR THE QUARTERLY PERIOD ENDED	JUNE 30, 2021
		OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM ______________TO_______________

Commission File Number: 001-00652

UNIVERSAL CORPORATION

(Exact name of registrant as specified in its charter)

Virginia			54-0414210
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)
9201 Forest Hill Avenue,	Richmond,	Virginia	23235
(Address of principal executive offices)			(Zip Code)

804-359-9311

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of Exchange on which registered
Common Stock, no par value	UVV	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yesþ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	þ	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of August 2, 2021, the total number of shares of common stock outstanding was 24,577,880.

UNIVERSAL CORPORATION

FORM 10-Q

TABLE OF CONTENTS

Item No.		Page
	PART I - FINANCIAL INFORMATION
1.	Financial Statements	3
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
3.	Quantitative and Qualitative Disclosures About Market Risk	34
4.	Controls and Procedures	35
	PART II - OTHER INFORMATION
1.	Legal Proceedings	36
1A.	Risk Factors	36
2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
6.	Exhibits	37
	Signatures	38

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNIVERSAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(in thousands, except share and per share data)

	Three Months Ended June 30,
	2021		2020
	(Unaudited)
Sales and other operating revenues	$	350,029	$	315,811
Costs and expenses
Cost of goods sold	287,556		262,046
Selling, general and administrative expenses	49,844		49,410
Other income	—		(4,173)
Restructuring and impairment costs	2,024		—
Operating income	10,605		8,528
Equity in pretax earnings (loss) of unconsolidated affiliates	609		(7)
Other non-operating income (expense)	48		(18)
Interest income	73		159
Interest expense	6,208		6,810
Income before income taxes and other items	5,127		1,852
Income taxes	1,215		(5,048)
Net income	3,912		6,900
Less: net loss (income) attributable to noncontrolling interests in subsidiaries	2,445		374
Net income attributable to Universal Corporation	$	6,357	$	7,274
Earnings per share:
Basic	$	0.26	$	0.30
Diluted	$	0.26	$	0.29
Weighted average common shares outstanding:
Basic	24,694,489		24,602,610
Diluted	24,852,151		24,703,579
Total comprehensive income, net of income taxes	$	12,746	$	7,209
Less: comprehensive (income) loss attributable to noncontrolling interests	2,416		530
Comprehensive income (loss) attributable to Universal Corporation	$	15,162	$	7,739
Dividends declared per common share	$	0.78	$	0.77

See accompanying notes.

3

UNIVERSAL CORPORATION     

CONSOLIDATED BALANCE SHEETS

(in thousands of dollars)

	June 30,		June 30,		March 31,
	2021		2020		2021
	(Unaudited)		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	84,688	$	100,015	$	197,221
Accounts receivable, net	279,900		222,162		367,482
Advances to suppliers, net	70,377		65,221		121,618
Accounts receivable—unconsolidated affiliates	52,047		32,827		584
Inventories—at lower of cost or net realizable value:
Tobacco	874,381		858,940		640,653
Other	140,249		104,399		145,965
Prepaid income taxes	17,804		13,426		15,029
Other current assets	85,016		65,675		66,806
Total current assets	1,604,462		1,462,665		1,555,358
Property, plant and equipment
Land	23,439		21,454		22,400
Buildings	293,734		258,306		284,430
Machinery and equipment	661,753		644,092		658,826
	978,926		923,852		965,656
Less accumulated depreciation	(627,279)		(608,173)		(616,146)
	351,647		315,679		349,510
Other assets
Operating lease right-of-use assets	31,281		37,576		31,230
Goodwill, net	173,041		126,862		173,051
Other intangibles, net	69,905		17,114		72,304
Investments in unconsolidated affiliates	85,064		79,198		84,218
Deferred income taxes	18,013		23,085		12,149
Pension asset	11,764		—		11,950
Other noncurrent assets	50,916		44,661		52,154
	439,984		328,496		437,056
Total assets	$	2,396,093	$	2,106,840	$	2,341,924

See accompanying notes.

4

UNIVERSAL CORPORATION     

CONSOLIDATED BALANCE SHEETS

(in thousands of dollars)

	June 30,		June 30,		March 31,
	2021		2020		2021
	(Unaudited)		(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Notes payable and overdrafts	$	153,337	$	92,758	$	101,294
Accounts payable and accrued expenses	158,013		133,621		139,484
Accounts payable—unconsolidated affiliates	18		—		1,282
Customer advances and deposits	9,307		10,575		8,765
Accrued compensation	18,576		16,373		29,918
Income taxes payable	5,919		2,359		4,516
Current portion of operating lease liabilities	7,998		9,914		7,898
Current portion of long-term debt	—		—		—
Total current liabilities	353,168		265,600		293,157
Long-term debt	518,297		368,829		518,172
Pensions and other postretirement benefits	55,622		70,473		57,637
Long-term operating lease liabilities	20,826		24,040		19,725
Other long-term liabilities	59,815		75,130		59,814
Deferred income taxes	46,810		24,435		44,994
Total liabilities	1,054,538		828,507		993,499
Shareholders’ equity
Universal Corporation:
Preferred stock:
Series A Junior Participating Preferred Stock, no par value, 500,000 shares authorized, none issued or outstanding	—		—		—
Common stock, no par value, 100,000,000 shares authorized 24,577,254 shares issued and outstanding at June 30, 2021 (24,488,964 at June 30, 2020 and 24,514,867 at March 31, 2021)	327,471		322,449		326,673
Retained earnings	1,074,586		1,064,927		1,087,663
Accumulated other comprehensive loss	(98,232)		(151,132)		(107,037)
Total Universal Corporation shareholders' equity	1,303,825		1,236,244		1,307,299
Noncontrolling interests in subsidiaries	37,730		42,089		41,126
Total shareholders' equity	1,341,555		1,278,333		1,348,425
Total liabilities and shareholders' equity	$	2,396,093	$	2,106,840	$	2,341,924

See accompanying notes.

5

UNIVERSAL CORPORATION     

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of dollars)

	Three Months Ended June 30,
	2021		2020
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,912	$	6,900
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization	12,058		10,105
Net provision for losses (recoveries) on advances to suppliers	(328)		57
Foreign currency remeasurement (gain) loss, net	506		(4,691)
Foreign currency exchange contracts	1,127		(13,951)
Restructuring and impairment costs	2,024		—
Restructuring payments	(1,776)		(2,937)
Change in estimated fair value of contingent consideration for FruitSmart acquisition	—		(4,173)
Other, net	(2,726)		(3,350)
Changes in operating assets and liabilities, net	(141,720)		12,087
Net cash provided (used) by operating activities	(126,923)		47
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(14,428)		(8,386)
Proceeds from sale of property, plant and equipment	1,589		218
Net cash used by investing activities	(12,839)		(8,168)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of short-term debt, net	49,439		20,688
Dividends paid to noncontrolling interests	(980)		—
Dividends paid on common stock	(18,876)		(18,567)
Other	(2,432)		(1,930)
Net cash provided (used) by financing activities	27,151		191
Effect of exchange rate changes on cash, restricted cash and cash equivalents	78		515
Net decrease in cash, restricted cash and cash equivalents	(112,533)		(7,415)
Cash, restricted cash and cash equivalents at beginning of year	203,221		107,430
Cash, restricted cash and cash equivalents at end of period	$	90,688	$	100,015
Supplemental Information:
Cash and cash equivalents	$	84,688	$	100,015
Restricted cash (Other noncurrent assets)	6,000		—
Total cash, restricted cash and cash equivalents	$	90,688	$	100,015

See accompanying notes.

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UNIVERSAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   BASIS OF PRESENTATION

Universal Corporation, which together with its subsidiaries is referred to herein as “Universal” or the “Company,” is a global business-to-business agri-products supplier to consumer product manufacturers. The Company is the leading global leaf tobacco supplier and provides high-quality plant-based ingredients to food and beverage end markets. Because of the seasonal nature of the Company’s business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year. All adjustments necessary to state fairly the results for the period have been included and were of a normal recurring nature. This Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

    The extent to which the ongoing COVID-19 pandemic will impact the Company's financial condition, results of operations and demand for its products and services will depend on future developments, which are highly uncertain and cannot be predicted. Such developments may include the ongoing geographic spread and mutations of COVID-19, the severity of the pandemic, the duration of the COVID-19 outbreak and the type and duration of actions that may be taken by various governmental authorities in response to the COVID-19 pandemic and the impact on the U.S. and the global economies, markets and supply chains. At June 30, 2021, it is not possible to predict the overall impact of the ongoing COVID-19 pandemic on the Company's business, financial condition, results of operations and demand for its products and services.

NOTE 2.   ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

In December 2019, the FASB issued Accounting Standards Update No. 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The updated guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance in ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, although early adoption is permitted. The Company adopted the new standard effective April 1, 2021, which was the beginning of its fiscal year ending March 31, 2022. There was no material impact to the consolidated financial statements from the adoption of ASU 2019-12.

Pronouncements to be Adopted in Future Periods

In March 2020, the FASB issued Accounting Standards Update No. 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04"). ASU 2020-04 provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. ASU 2020-04 also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform. The standard is effective upon issuance and can be applied as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact that the guidance will have on its consolidated financial statements.

NOTE 3.   BUSINESS COMBINATION

Acquisition of Silva International, Inc.

On October 1, 2020 the Company acquired 100% of the capital stock of Silva International, Inc. (“Silva”), a natural, specialty dehydrated vegetable, fruit, and herb processing company serving global markets, for approximately $164 million in cash and $5.9 million of additional working capital on-hand at the date of acquisition. The acquisition of Silva diversifies the Company's product offerings and generates new opportunities for its plant-based ingredients platform.

The Company continues to employ one of Silva's selling shareholders and as stipulated in the Silva purchase agreement has transferred $6 million to a third-party escrow account that may ultimately be earned by the selling shareholder upon completion of a post-combination service period. Since the compensation agreement for the selling shareholder who remains employed with the Company includes a post-combination service period, the Company has excluded the entire $6 million in the

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purchase price to be allocated. The $6 million in escrow is recognized as restricted cash in other noncurrent assets on the consolidated balance sheet at June 30, 2021. The contingent consideration arrangement for the selling shareholder includes a post-combination service requirement and forfeitable payment provisions, therefore under ASC Topic 805, "Business Combinations," must be treated as compensation expense. This expense is being recognized ratably over the requisite service period in selling, general, and administrative expense on the consolidated statements of income.

The following preliminary allocation of the purchase price was based on third-party valuations and assumptions. At June 30, 2021, the Company is finalizing the fair value assigned to income tax related assets and liabilities. The final purchase price allocation is expected to be completed in the second quarter of fiscal year 2022. The following table summarizes the preliminary purchase price allocation of the assets acquired and liabilities assumed on October 1, 2020.

(in thousands of dollars)
Assets
Cash and cash equivalents	$	8,126
Accounts receivable, net	17,885
Advances to suppliers, net	3,011
Inventory	33,162
Other current assets	833
Property, plant and equipment (net)	24,437
Intangibles
Customer relationships	53,000
Trade names	7,800
Goodwill	46,144
Total assets acquired	194,398
Liabilities
Accounts payable and accrued expenses	11,683
Accrued compensation	3,350
Income taxes payable	946
Deferred income taxes	14,419
Total liabilities assumed	30,398
Total assets acquired and liabilities assumed	$	164,000

A portion of the goodwill recorded as part of the acquisition was attributable to the assembled workforce of Silva. The goodwill recognized for the Silva acquisition is not deductible for U.S. income tax purposes. The tax basis of the assets acquired and liabilities assumed did not result in a step-up of tax basis. The Company determined the Silva operations are not material to the Company’s consolidated results. Therefore, pro forma information is not presented.

NOTE 4.  RESTRUCTURING AND IMPAIRMENT COSTS

Universal continually reviews its business for opportunities to realize efficiencies, reduce costs, and realign its operations in response to business changes. Restructuring and impairment costs are periodically incurred in connection with those activities.

Tobacco Operations

In the three months ended June 30, 2021, the Company incurred and paid $1.5 million of termination costs associated with restructuring of tobacco processing and administrative operations in Africa.

Ingredients Operations

In the three months ended June 30, 2021, the Company incurred $0.5 million of impairment costs on property, plant, and equipment associated with the wind-down of the Carolina Innovative Food Ingredients, Inc. ("CIFI") operations that was announced in fiscal year 2021.

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There were no restructuring and impairment costs incurred for the three months ended June 30, 2020.

NOTE 5.  REVENUE FROM CONTRACTS WITH CUSTOMERS

The majority of the Company’s consolidated revenue consists of sales of processed leaf tobacco to customers. The Company also earns revenue from processing leaf tobacco owned by customers and from various other services provided to customers. The Company also has fruit and vegetable processing operations that provide customers with a range of food ingredient products. Payment terms with customers vary depending on customer creditworthiness, product types, services provided, and other factors. Contract durations and payment terms for all revenue categories generally do not exceed one year. Therefore, the Company has applied a practical expedient to not adjust the transaction price for the effects of financing components, as the Company expects that the period from the time the revenue for a transaction is recognized to the time the customer pays for the related good or service transferred will be one year or less. Below is a description of the major revenue-generating categories from contracts with customers.

Tobacco Sales

The majority of the Company’s business involves purchasing leaf tobacco from farmers in the origins where it is grown, processing and packing the tobacco in its factories, and then transferring ownership and control of the tobacco to customers. On a much smaller basis, the Company also sources processed tobacco from third-party suppliers for resale to customers. The contracts for tobacco sales with customers create a performance obligation to transfer tobacco to the customer. Transaction prices for the sale of tobaccos are primarily based on negotiated fixed prices, but the Company does have a small number of cost-plus contracts with certain customers. Cost-plus arrangements provide the Company reimbursement of the cost to purchase and process the tobacco, plus a contractually agreed-upon profit margin. The Company utilizes the most likely amount methodology under the accounting guidance to recognize revenue for cost-plus arrangements with customers. Shipping and handling costs under tobacco sales contracts with customers are treated as fulfillment costs and included in the transaction price. Taxes assessed by government authorities on the sale of leaf tobacco products are excluded from the transaction price. At the point in time that the customer obtains control over the tobacco, which is typically aligned with physical shipment under the contractual terms with the customer, the Company completes its performance obligation and recognizes the revenue for the sale.

Ingredient Sales

In recent fiscal years, the Company has diversified operations through acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products. These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps including sorting, cleaning, pressing, mixing, and blending to manufacture finished goods utilized in both human and pet food. The contracts for food ingredients with customers create a performance obligation to transfer the manufactured finished goods to the customer. Transaction prices for the sale of food ingredients are primarily based on negotiated fixed prices. At the point in time that the customer obtains control over the finished product, which is typically aligned with physical shipment under the contractual terms with the customer, the Company completes its performance obligation and recognizes the revenue for the sale.

Processing Revenue

Processing and packing of customer-owned tobacco and ingredients is a short-duration process. Processing charges are primarily based on negotiated fixed prices per unit of weight processed. Under normal operating conditions, customer-owned raw materials that are placed into the production line exits as processed and packed product and is then later transported to customer-designated transfer locations. The revenue for these services is recognized when the performance obligation is satisfied, which is generally when processing is completed. The Company’s operating history and contract analyses indicate that customer requirements for processed tobacco and food ingredients products are consistently met upon completion of processing.

Other Operating Sales and Revenue

From time to time, the Company enters into various arrangements with customers to provide other value-added services that may include blending, chemical and physical testing of products, storage, and tobacco cutting services for select manufacturers. These other arrangements and operations are a much smaller portion of the Company’s business, and are separate and distinct contractual agreements from the Company’s tobacco and food ingredients sales or third-party processing arrangements with customers. The transaction prices and timing of revenue recognition of these items are determined by the specifics of each contract.

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Disaggregation of Revenue from Contracts with Customers

The following table disaggregates the Company’s revenue by significant revenue-generating category:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Tobacco sales	$	270,264	$	275,142
Ingredient sales	51,888		16,356
Processing revenue	16,696		16,300
Other sales and revenue from contracts with customers	10,765		7,602
Total revenue from contracts with customers	349,613		315,400
Other operating sales and revenues	416		411
Consolidated sales and other operating revenues	$	350,029	$	315,811

    Other operating sales and revenues consists principally of interest on advances to suppliers.

NOTE 6. OTHER CONTINGENT LIABILITIES AND OTHER MATTERS

Other Contingent Liabilities

Other Contingent Liabilities (Letters of credit)

The Company had other contingent liabilities totaling approximately $1 million at June 30, 2021, primarily related to outstanding letters of credit.

Value-Added Tax Assessments in Brazil

As further discussed below, the Company’s local operating subsidiaries pay significant amounts of value-added tax (“VAT”) in connection with their operations, which generate tax credits that they normally are entitled to recover through offset, refund, or sale to third parties. In Brazil, VAT is assessed at the state level when green tobacco is transferred between states. The Company’s operating subsidiary there pays VAT when tobaccos grown in the states of Santa Catarina and Parana are transferred to its factory in the state of Rio Grande do Sul for processing. The subsidiary has received assessments for additional VAT plus interest and penalties from tax authorities for the states of Santa Catarina and Parana based on audits of the subsidiary’s VAT filings for specified periods. In June 2011, tax authorities for the state of Santa Catarina issued assessments for tax, interest, and penalties for periods from 2006 through 2009 totaling approximately $9 million. In September 2014, tax authorities for the state of Parana issued an assessment for tax, interest, and penalties for periods from 2009 through 2014 totaling approximately $11 million. Those amounts are based on the exchange rate for the Brazilian currency at June 30, 2021. Management of the operating subsidiary and outside counsel believe that errors were made by the tax authorities for both states in determining all or significant portions of these assessments and that various defenses support the subsidiary’s positions.

With respect to the Santa Catarina assessments, the subsidiary took appropriate steps to contest the full amount of the claims. As of June 30, 2021, a portion of the subsidiary’s arguments had been accepted, and the outstanding assessment had been reduced. The reduced assessment, together with the related accumulated interest through the end of the current reporting period, totaled approximately $9 million (at the June 30, 2021 exchange rate). The subsidiary is continuing to contest the full remaining amount of the assessment. While the range of reasonably possible loss is zero up to the full $9 million remaining assessment with interest, based on the strength of the subsidiary’s defenses, no loss within that range is considered probable at this time and no liability has been recorded at June 30, 2021.

With respect to the Parana assessment, management of the subsidiary and outside counsel challenged the full amount of the claim. A significant portion of the Parana assessment was based on positions taken by the tax authorities that management and outside counsel believe deviate significantly from the underlying statutes and relevant case law. In addition, under the law, the subsidiary’s tax filings for certain periods covered in the assessment were no longer open to any challenge by the tax authorities. In December 2015, the Parana tax authorities withdrew the initial claim and subsequently issued a new assessment covering the same tax periods, reflecting a substantial reduction from the original assessment. In fiscal year 2020, the Parana tax authorities acknowledged the statute of limitations related to claims prior to December 2010 had expired and reduced the assessment to $3 million (at the June 30, 2021 exchange rate). Notwithstanding the reduced assessment, management and outside counsel continue to believe that the new assessment is not supported by the underlying statutes and relevant case law and have challenged the full amount of the claim. The range of reasonably possible loss is considered to be zero up to the full $3 million

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assessment. However, based on the strength of the subsidiary's defenses, no loss within that range is considered probable at this time and no liability has been recorded at June 30, 2021.

In both states, the process for reaching a final resolution to the assessments is expected to be lengthy, and management is not currently able to predict when either case will be concluded. Should the subsidiary ultimately be required to pay any tax, interest, or penalties in either case, the portion paid for tax would generate VAT credits that the subsidiary may be able to recover.

Other Legal and Tax Matters

Various subsidiaries of the Company are involved in litigation and tax examinations incidental to their business activities.  While the outcome of these matters cannot be predicted with certainty, management is vigorously defending the matters and does not currently expect that any of them will have a material adverse effect on the Company’s business or financial position.  However, should one or more of these matters be resolved in a manner adverse to management’s current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material.

Advances to Suppliers

In many sourcing origins where the Company operates, it provides agronomy services and seasonal advances of seed, seedlings, fertilizer, and other supplies to tobacco farmers for crop production, or makes seasonal cash advances to farmers for the procurement of those inputs. These advances are short term, are repaid upon delivery of tobacco to the Company, and are reported in advances to suppliers in the consolidated balance sheets. In several origins, the Company has made long-term advances to tobacco farmers to finance curing barns and other farm infrastructure. In some years, due to low crop yields and other factors, individual farmers may not deliver sufficient volumes of tobacco to fully repay their seasonal advances, and the Company may extend repayment of those advances into future crop years. The long-term portion of advances is included in other noncurrent assets in the consolidated balance sheets. Both the current and the long-term portions of advances to suppliers are reported net of allowances recorded when the Company determines that amounts outstanding are not likely to be collected. Short-term and long-term advances to suppliers totaled $92 million at June 30, 2021, $83 million at June 30, 2020, and $144 million at March 31, 2021. The related valuation allowances totaled $18 million at June 30, 2021, $16 million at June 30, 2020, and $18 million at March 31, 2021, and were estimated based on the Company’s historical loss information and crop projections. The allowances were reduced by net recoveries of approximately $0.3 million and increased by net provisions of approximately $0.1 million in the three-month periods ended June 30, 2021 and 2020, respectively. These net recoveries and provisions are included in selling, general, and administrative expenses in the consolidated statements of income. Interest on advances is recognized in earnings upon the farmers’ delivery of tobacco in payment of principal and interest.

Recoverable Value-Added Tax Credits

In many foreign countries, the Company’s local operating subsidiaries pay significant amounts of VAT on purchases of unprocessed and processed tobacco, crop inputs, packing materials, and various other goods and services. In some countries, VAT is a national tax, and in other countries it is assessed at the state level. Items subject to VAT vary from jurisdiction to jurisdiction, as do the rates at which the tax is assessed. When tobacco is sold to customers in the country of origin, the operating subsidiaries generally collect VAT on those sales. The subsidiaries are normally permitted to offset their VAT payments against the collections and remit only the incremental VAT collections to the tax authorities. When tobacco is sold for export, VAT is normally not assessed. In countries where tobacco sales are predominately for export markets, VAT collections generated on downstream sales are often not sufficient to fully offset the subsidiaries’ VAT payments. In those situations, unused VAT credits can accumulate. Some jurisdictions have procedures that allow companies to apply for refunds of unused VAT credits from the tax authorities, but the refund process often takes an extended period of time and it is not uncommon for refund applications to be challenged or rejected in part on technical grounds. Other jurisdictions may permit companies to sell or transfer unused VAT credits to third parties in private transactions, although approval for such transactions must normally be obtained from the tax authorities, limits on the amounts that can be transferred may be imposed, and the proceeds realized may be heavily discounted from the face value of the credits. Due to these factors, local operating subsidiaries in some countries can accumulate significant balances of VAT credits over time. The Company reviews these balances on a regular basis and records valuation allowances on the credits to reflect amounts that are not expected to be recovered, as well as discounts anticipated on credits that are expected to be sold or transferred. At June 30, 2021, the aggregate balance of recoverable tax credits held by the Company’s subsidiaries totaled approximately $61 million ($54 million at June 30, 2020, and $49 million at March 31, 2021), and the related valuation allowances totaled approximately $19 million ($17 million at June 30, 2020, and $19 million at March 31, 2021). The net balances are reported in other current assets and other noncurrent assets in the consolidated balance sheets.

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Long-Term Debt

In December 2020, the Company repaid $150 million of revolving credit borrowings used to finance the purchase of Silva with term loans under its existing senior unsecured bank credit facility. The Company increased the borrowings of the senior unsecured five-year and seven-year term loans by $75 million each. At June 30, 2021, the five-year term loan maturing December 2023 and the seven-year term loan maturing December 2025 had outstanding borrowings of $225 million and $295 million, respectively. Under the senior unsecured bank credit facility, the additional $150 million of terms loans bear interest at variable rates plus a margin based on the Company's credit metrics and interest payments remained unhedged at June 30, 2021. The Company maintains receive-floating/pay-fixed interest rates swap agreements for a portion of the outstanding five and seven-year term loans. See Note 11 for additional information on outstanding interest rate swap agreements.

Shelf Registration and Stock Repurchase Plan

In November 2020, the Company filed an undenominated automatic universal shelf registration statement with the U.S. Securities and Exchange Commission to provide for the future issuance of an undefined amount of securities as determined by the Company and offered in one or more prospectus supplements prior to issuance.

A stock repurchase plan, which was authorized by the Company's Board of Directors, became effective and was publicly announced on November 5, 2020. This stock repurchase plan authorizes the purchase of up to $100 million in common and/or preferred stock in open market or privately negotiated transactions through November 15, 2022 or when funds for the program have been exhausted, subject to market conditions and other factors. The program had $100 million of remaining capacity for repurchases of common and/or preferred stock at June 30, 2021.

NOTE 7.   EARNINGS PER SHARE

    The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended June 30,
(in thousands, except share and per share data)	2021		2020
Basic Earnings Per Share
Numerator for basic earnings per share
Net income attributable to Universal Corporation	$	6,357	$	7,274
Denominator for basic earnings per share
Weighted average shares outstanding	24,694,489		24,602,610
Basic earnings per share	$	0.26	$	0.30
Diluted Earnings Per Share
Numerator for diluted earnings per share
Net income attributable to Universal Corporation	$	6,357	$	7,274
Denominator for diluted earnings per share:
Weighted average shares outstanding	24,694,489		24,602,610
Effect of dilutive securities
Employee and outside director share-based awards	157,662		100,969
Denominator for diluted earnings per share	24,852,151		24,703,579
Diluted earnings per share	$	0.26	$	0.29

NOTE 8.   INCOME TAXES

    The Company operates in the United States and many foreign countries and is subject to the tax laws of many jurisdictions. Changes in tax laws or the interpretation of tax laws can affect the Company’s earnings, as can the resolution of

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pending and contested tax issues. The Company's consolidated effective income tax rate is affected by a number of factors, including the mix and timing of domestic and foreign earnings, discrete items, and the effect of exchange rate changes on taxes.     

    The consolidated effective income tax rate for the three months ended June 30, 2021 was 24% . There were no discrete items that impacted the income tax provision for the three months ended June 30, 2021.

    The consolidated effective income tax rate for the three months ended June 30, 2020 was a benefit of $5.0 million. The Company's consolidated effective income tax rate for the three months ended June 30, 2020 was affected by a $4.4 net tax benefit for final U.S. tax regulations issued for hybrid dividends paid by foreign subsidiaries. Without this discrete item for the final U.S. tax regulations, the consolidated effective income tax rate for the three months ended June 30, 2020 would have been a benefit of approximately 24%. Additionally, for the three months ended June 30, 2020 the Company recognized $1.8 million as a component of interest expense related to a settlement of an uncertain tax position at foreign subsidiary.

NOTE 9.   GOODWILL AND OTHER INTANGIBLES

The Company's changes in goodwill at June 30, 2021 and 2020 consisted of the following:

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Balance at beginning of fiscal year	$	173,051	$	126,826
Foreign currency translation adjustment	(10)		36
Balance at end of period	$	173,041	$	126,862

The Company's intangible assets primarily consist of capitalized customer-related intangibles, trade names, proprietary developed technology and noncompetition agreements. The Company's intangible assets subject to amortization consisted of the following at June 30, 2021 and 2020:

(in thousands, except useful life)				June 30,
				2021						2020
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships(1)	11	—	13	$	62,500	$	(4,710)	$	57,790	$	9,500	$	(365)	$	9,135
Trade names(1)		5		11,100		(2,160)		8,940		3,300		(330)		2,970
Developed technology(1)		3		4,800		(2,400)		2,400		4,800		(800)		4,000
Noncompetition agreements(1)		5		1,000		(300)		700		1,000		(100)		900
Other		5		777		(703)		74		734		(625)		109
Total intangible assets				$	80,177	$	(10,273)	$	69,904	$	19,334	$	(2,220)	$	17,114

(1) On October 1, 2020 the Company acquired 100% of the capital stock of Silva for approximately $164.0 million in cash and $5.9 million of working capital on-hand at the date of acquisition. The Silva acquisition resulted in $60.8 million of intangibles. See Note 3 for additional information.

Intangible assets are amortized on a straight-line basis over the asset's estimated useful economic life as noted above.

The Company's amortization expense for intangible assets for the three months ended June 30, 2021 and 2020 was:

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Amortization Expense	$	2,403	$	808

Amortization expense for the developed technology intangible asset is recorded in cost of goods sold in the consolidated income statements of income. The amortization expense for the other intangible assets is recorded in selling, general, and administrative expenses in the consolidated statements of income.

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As of June 30, 2021, the expected future amortization expense for intangible assets is as follows:

Fiscal Year (in thousands of dollars)
2022 (excluding the three months ended June 30, 2021)	$	7,216
2023	9,204
2024	7,969
2025	8,534
2026 and thereafter	36,981
Total expected future amortization expense	$	69,904

NOTE 10.   LEASES

The Company, as a lessee, enters into operating leases for land, buildings, equipment, and vehicles. For all operating leases with terms greater than 12 months and with fixed payment arrangements, a lease liability and corresponding right-of-use asset are recognized in the balance sheet for the term of the lease by calculating the net present value of future lease payments. On the date of lease commencement, the present value of lease liabilities is determined by discounting the future lease payments by the Company’s collateralized incremental borrowing rate, adjusted for the lease term and currency of the lease payments. If a lease contains a renewal option that the Company is reasonably certain to exercise, the Company accounts for the original lease term and expected renewal term in the calculation of the lease liability and right-of-use asset.

The following table sets forth the right-of-use assets and lease liabilities for operating leases included in the Company’s consolidated balance sheet:

(in thousands of dollars)	June 30, 2021		June 30, 2020		March 31, 2021
Assets
Operating lease right-of-use assets	$	31,281	$	37,576	$	31,230
Liabilities
Current portion of operating lease liabilities	$	7,998	$	9,914	$	7,898
Long-term operating lease liabilities	20,826		24,040		19,725
Total operating lease liabilities	$	28,824	$	33,954	$	27,623

The following table sets forth the location and amount of operating lease costs included in the Company's consolidated statement of income:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Income Statement Location
Cost of goods sold	$	2,578	$	2,911
Selling, general, and administrative expenses	2,305		2,190
Total operating lease costs(1)	$	4,883	$	5,101

(1)Includes variable operating lease costs.

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The following table reconciles the undiscounted cash flows to the operating lease liabilities in the Company’s consolidated balance sheet:

(in thousands of dollars)	June 30, 2021
Maturity of Operating Lease Liabilities
2022 (excluding the three months ended June 30, 2021)	$	6,889
2023	7,279
2024	5,461
2025	4,560
2026	2,656
2027 and thereafter	5,805
Total undiscounted cash flows for operating leases	$	32,650
Less: Imputed interest	(3,826)
Total operating lease liabilities	$	28,824

As of June 30, 2021, the Company had no leases that did not yet commence.

The following table sets forth supplemental information related to operating leases:

	Three Months Ended June 30,
(in thousands, except lease term and incremental borrowing rate)	2021			2020
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,777		$	3,028
Right-of-use assets obtained in exchange for new operating leases	2,741			1,023
Weighted Average Remaining Lease Term (years)	5.54			5.55
Weighted Average Collateralized Incremental Borrowing Rate	4.12		%	4.04		%

NOTE 11.   DERIVATIVES AND HEDGING ACTIVITIES

Universal is exposed to various risks in its worldwide operations and uses derivative financial instruments to manage two specific types of risks – interest rate risk and foreign currency exchange rate risk. Interest rate risk has been managed by entering into interest rate swap agreements, and foreign currency exchange rate risk has been managed by entering into forward and option foreign currency exchange contracts. However, the Company’s policy also permits other types of derivative instruments. In addition, foreign currency exchange rate risk is also managed through strategies that do not involve derivative instruments, such as using local borrowings and other approaches to minimize net monetary positions in non-functional currencies. The disclosures below provide additional information about the Company’s hedging strategies, the derivative instruments used, and the effects of these activities on the consolidated statements of income and comprehensive income and the consolidated balance sheets. In the consolidated statements of cash flows, the cash flows associated with all of these activities are reported in net cash provided by operating activities.

Cash Flow Hedging Strategy for Interest Rate Risk

In February 2019, the Company entered into receive-floating/pay-fixed interest rate swap agreements that were designated and qualify as hedges of the exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on two outstanding non-amortizing bank term loans that were funded as part of a new bank credit facility in December 2018. Although no significant ineffectiveness is expected with this hedging strategy, the effectiveness of the interest rate swaps is evaluated on a quarterly basis. At June 30, 2021, the total notional amount of the interest rate swaps was $370 million, which corresponded with the former original outstanding balance of the term loans. During the third quarter of fiscal year 2021, the Company converted $150 million from the balance in its revolving credit line into the existing term loans, splitting the balance equally between them. At June 30, 2021, the Company is not hedging the interest payments on the additional $150 million of term loans. The increase to the principal balance of the term loans does not have an impact to the effectiveness analysis of the interest rate swap agreements.

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Previously, the Company had receive-floating/pay-fixed interest rate swap agreements that were designated and qualified as cash flow hedges for two outstanding non-amortizing bank loans that were repaid concurrent with closing on the new bank credit facility. Those swap agreements were subsequently terminated in February 2019 concurrent with the inception of the new swap agreements. The fair value of the previous swap agreements, approximately $5.4 million, was received from the counterparties upon termination and is being amortized from accumulated other comprehensive loss into earnings as a reduction of interest expense through the original maturity dates of those agreements. As of June 30, 2021, $0.7 million remained in accumulated other comprehensive loss to be amortized through December 31, 2021.

Cash Flow Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Sales of Crop Inputs, Forecast Purchases of Tobacco, and Related Processing Costs

The majority of the tobacco production in most countries outside the United States where Universal operates is sold in export markets at prices denominated in U.S. dollars. However, sales of crop inputs (such as seeds and fertilizers) to farmers, purchases of tobacco from farmers, and most processing costs (such as labor and energy) in those countries are usually denominated in the local currency. Changes in exchange rates between the U.S. dollar and the local currencies where tobacco is grown and processed affect the ultimate U.S. dollar sales of crop inputs and cost of processed tobacco. From time to time, the Company enters into forward and option contracts to buy U.S. dollars and sell the local currency at future dates that coincide with the sale of crop inputs to farmers. In the case of forecast purchases of tobacco and the related processing costs, the Company enters into forward and option contracts to sell U.S. dollars and buy the local currency at future dates that coincide with the expected timing of a portion of the tobacco purchases and processing costs. These strategies offset the variability of future U.S. dollar cash flows for sales of crop inputs, tobacco purchases, and processing costs for the foreign currency notional amount hedged. These hedging strategies have been used mainly for tobacco purchases, processing costs, and sales of crop inputs in Brazil, although the Company has also entered into hedges for a portion of the tobacco purchases in Africa.

The aggregate U.S. dollar notional amount of forward and option contracts entered into for these purposes during the three-month periods in fiscal years 2022 and 2021 was as follows:

	Three Months Ended June 30,
(in millions of dollars)	2021		2020
Tobacco purchases	$	42.0	$	30.2
Processing costs	10.2		8.0
Crop input sales	20.8		23.5
Total	$	73.0	$	61.7

Variations in exchange rates and in the amount and timing of fixed-price orders from customers for their purchases from individual crop years routinely cause variations in the U.S. dollar notional amount of forward contracts entered into from one year to the next. All contracts related to tobacco purchases and crop input sales were designated and qualified as hedges of the future cash flows associated with the forecast purchases of tobacco. As a result, changes in fair values of the forward contracts have been recognized in comprehensive income as they occurred, but only recognized in earnings as a component of cost of goods sold upon sale of the related tobacco to third-party customers. In fiscal year 2022, only non-deliverable forward contracts were utilized for the sale of 2022 crop year inputs. Premium payments for option contracts entered into for the sale of crop inputs in fiscal year 2021 were expensed into earnings as incurred.

The table below presents the expected timing of when the remaining accumulated other comprehensive gains and losses as of June 30, 2021 for cash flows hedges of tobacco purchases and crop input sales will be recognized in earnings.

Hedging Program	Crop Year	Geographic Location(s)	Fiscal Year Earnings
Tobacco purchases	2022	Brazil	2023
Tobacco purchases	2021	Brazil, Africa	2022
Tobacco purchases	2020	Brazil	2022
Crop input sales	2022	Brazil	2023
Crop input sales	2021	Brazil	2022

Forward contracts related to processing costs have not been designated as hedges, and gains and losses on those contracts have been recognized in earnings on a mark-to-market basis.

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Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Net Local Currency Monetary Assets and Liabilities of Foreign Subsidiaries

Most of the Company’s foreign subsidiaries transact the majority of their sales in U.S. dollars and finance the majority of their operating requirements with U.S. dollar borrowings, and therefore use the U.S. dollar as their functional currency. These subsidiaries normally have certain monetary assets and liabilities on their balance sheets that are denominated in the local currency. Those assets and liabilities can include cash and cash equivalents, accounts receivable and accounts payable, advances to farmers and suppliers, deferred income tax assets and liabilities, recoverable value-added taxes, operating lease liabilities, and other items. Net monetary assets and liabilities denominated in the local currency are remeasured into U.S. dollars each reporting period, generating gains and losses that the Company records in earnings as a component of selling, general, and administrative expenses. The level of net monetary assets or liabilities denominated in the local currency normally fluctuates throughout the year based on the operating cycle, but it is most common for monetary assets to exceed monetary liabilities, sometimes by a significant amount. When this situation exists and the local currency weakens against the U.S. dollar, remeasurement losses are generated. Conversely, remeasurement gains are generated on a net monetary asset position when the local currency strengthens against the U.S. dollar. To manage a portion of its exposure to currency remeasurement gains and losses, the Company enters into forward contracts to buy or sell the local currency at future dates coinciding with expected changes in the overall net local currency monetary asset position of the subsidiary. Gains and losses on the forward contracts are recorded in earnings as a component of selling, general, and administrative expenses for each reporting period as they occur, and thus directly offset the related remeasurement losses or gains in the consolidated statements of income for the notional amount hedged. The Company does not designate these contracts as hedges for accounting purposes. The contracts are generally arranged to hedge the subsidiary's projected exposure to currency remeasurement risk for specified periods of time, and new contracts are entered as necessary throughout the year to replace previous contracts as they mature. The Company is currently using forward currency contracts to manage its exposure to currency remeasurement risk in Brazil.  The total notional amounts of contracts outstanding at June 30, 2021 and 2020, and March 31, 2021, were approximately $16.7 million, $11.8 million, and $16.6 million, respectively. To further mitigate currency remeasurement exposure, the Company’s foreign subsidiaries may utilize short-term local currency financing during certain periods. This strategy, while not involving the use of derivative instruments, is intended to minimize the subsidiary’s net monetary position by financing a portion of the local currency monetary assets with local currency monetary liabilities, thus hedging a portion of the overall position.

Several of the Company’s foreign subsidiaries transact the majority of their sales and finance the majority of their operating requirements in their local currency, and therefore use their respective local currencies as the functional currency for reporting purposes. From time to time, these subsidiaries sell tobacco to customers in transactions that are not denominated in the functional currency. In those situations, the subsidiaries routinely enter into forward exchange contracts to offset currency risk for the period of time that a fixed-price order and the related trade account receivable are outstanding with the customer. The contracts are not designated as hedges for accounting purposes.

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Effect of Derivative Financial Instruments on the Consolidated Statements of Income

The table below outlines the effects of the Company’s use of derivative financial instruments on the consolidated statements of income:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Cash Flow Hedges - Interest Rate Swap Agreements
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	(1,396)	$	(3,697)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(2,223)	$	(1,838)
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	$	353	$	354
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings	Interest expense
Ineffective Portion of Hedge
Gain (loss) recognized in earnings	$	—	$	—
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses
Hedged Item
Description of hedged item	Floating rate interest payments on term loan
Cash Flow Hedges - Foreign Currency Exchange Contracts
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	8,233	$	(1,447)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(516)	$	(734)
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings	Cost of goods sold
Ineffective Portion and Early De-designation of Hedges
Gain (loss) recognized in earnings	$	668	$	—
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses
Hedged Item
Description of hedged item	Forecast purchases of tobacco in Brazil and Africa
Derivatives Not Designated as Hedges - Foreign Currency Exchange Contracts
Gain (loss) recognized in earnings	$	4,604	$	(144)
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses

For the interest rate swap agreements, the effective portion of the gain or loss on the derivative is recorded in accumulated other comprehensive loss and any ineffective portion is recorded in selling, general and administrative expenses.

For the forward foreign currency exchange contracts designated as cash flow hedges of tobacco purchases in Brazil and Africa and the crop input sales in Brazil, a net hedge gain of approximately $7.3 million remained in accumulated other comprehensive loss at June 30, 2021. That balance reflects gains and losses on contracts related to the 2022, 2021, and 2020 Brazil crops, the 2021 Africa crop, and the 2022 and 2021 Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through June 30, 2021. Based on the hedging strategy, as the gain or loss is recognized in earnings, it is expected

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to be offset by a change in the direct cost for the tobacco or by a change in sales prices if the strategy has been mandated by the customer. Generally, margins on the sale of the tobacco will not be significantly affected.

Effect of Derivative Financial Instruments on the Consolidated Balance Sheets

The table below outlines the effects of the Company’s derivative financial instruments on the consolidated balance sheets at June 30, 2021 and 2020, and March 31, 2021:

	Derivatives in a Fair Value Asset Position							Derivatives in a Fair Value Liability Position
	Balance Sheet Location	Fair Value as of						Balance Sheet Location	Fair Value as of
(in thousands of dollars)		June 30, 2021		June 30, 2020		March 31, 2021			June 30, 2021		June 30, 2020		March 31, 2021
Derivatives Designated as Hedging Instruments
Interest rate swap agreements	Other non-current assets	$	—	$	—	$	—	Other long-term liabilities	$	24,892	$	39,022	$	25,719
Foreign currency exchange contracts	Other current assets	5,423		571		1,137		Accounts payable and accrued expenses	2,063		1,390		1,031
Total		$	5,423	$	571	$	1,137		$	26,955	$	40,412	$	26,750
Derivatives Not Designated as Hedging Instruments
Foreign currency exchange contracts	Other current assets	$	3,124	$	149	$	435	Accounts payable and accrued expenses	$	88	$	702	$	791
Total		$	3,124	$	149	$	435		$	88	$	702	$	791

Substantially all of the Company's foreign exchange derivative instruments are subject to master netting arrangements whereby the right to offset occurs in the event of default by a participating party. The Company has elected to present these contracts on a gross basis in the consolidated balance sheets.

NOTE 12.   FAIR VALUE MEASUREMENTS

Universal measures certain financial and nonfinancial assets and liabilities at fair value based on applicable accounting guidance. The financial assets and liabilities measured at fair value include money market funds, trading securities associated with deferred compensation plans, interest rate swap agreements, forward foreign currency exchange contracts and acquisition-related contingent consideration obligations. The application of the fair value guidance to nonfinancial assets and liabilities primarily includes the determination of fair values for goodwill and long-lived assets when indicators of potential impairment are present.

    Under the accounting guidance, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The framework for measuring fair value is based on a fair value hierarchy that distinguishes between observable inputs and unobservable inputs. Observable inputs are based on market data obtained from independent sources. Unobservable inputs require the Company to make its own assumptions about the value placed on an asset or liability by market participants because little or no market data exists.

There are three levels within the fair value hierarchy:

Level	Description
1	quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date;
2	quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability; and
3	unobservable inputs for the asset or liability.

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    As permitted under the accounting guidance, the Company uses net asset value per share ("NAV") as a practical expedient to measure the fair value of its money market funds. The fair values for those funds are presented under the heading "NAV" in the tables that follow in this disclosure. In measuring the fair value of liabilities, the Company considers the risk of non-performance in determining fair value. Universal has not elected to report at fair value any financial instruments or any other assets or liabilities that are not required to be reported at fair value under current accounting guidance.

Recurring Fair Value Measurements

At June 30, 2021 and 2020, and at March 31, 2021, the Company had certain financial assets and financial liabilities that were required to be measured and reported at fair value on a recurring basis. These assets and liabilities are listed in the tables below and are classified based on how their values were determined under the fair value hierarchy or the NAV practical expedient:

	June 30, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	1,992	$	—	$	—	$	—	$	1,992
Trading securities associated with deferred compensation plans	—		15,735		—		—		15,735
Interest rate swap agreements	—		—		—		—		—
Foreign currency exchange contracts	—		—		8,547		—		8,547
Total financial assets measured and reported at fair value	$	1,992	$	15,735	$	8,547	$	—	$	26,274
Liabilities
Acquisition-related contingent consideration obligations - short term	$	—	$	—	$	—	$	2,532	$	2,532
Interest rate swap agreements	—		—		24,892		—		24,892
Foreign currency exchange contracts	—		—		2,151		—		2,151
Total financial liabilities measured and reported at fair value	$	—	$	—	$	27,043	$	2,532	$	29,575

	June 30, 2020
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	4,013	$	—	$	—	$	—	$	4,013
Trading securities associated with deferred compensation plans	—		13,963		—		—		13,963
Foreign currency exchange contracts	—		—		720		—		720
Total financial assets measured and reported at fair value	$	4,013	$	13,963	$	720	$	—	$	18,696
Liabilities
Acquisition-related contingent consideration obligations - long term	$	—	$	—	$	—	$	2,532	2,532
Interest rate swap agreements	—		—		39,022		—		39,022
Foreign currency exchange contracts	—		—		2,092		—		2,092
Total financial liabilities measured and reported at fair value	$	—	$	—	$	41,114	$	2,532	$	43,646

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	March 31, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	1,992	$	—	$	—	$	—	$	1,992
Trading securities associated with deferred compensation plans	—		15,735		—		—		15,735
Foreign currency exchange contracts	—		—		1,572		—		1,572
Total financial assets measured and reported at fair value	$	1,992	$	15,735	$	1,572	$	—	$	19,299
Liabilities
Acquisition-related contingent consideration obligations - long-term	$	—	$	—	$	—	$	2,532	$	2,532
Interest rate swap agreements	—		—		25,719		—		25,719
Foreign currency exchange contracts	—		—		1,822		—		1,822
Total financial liabilities measured and reported at fair value	$	—	$	—	$	27,541	$	2,532	$	30,073

Money market funds

The fair value of money market funds, which are reported in cash and cash equivalents in the consolidated balance sheets, is based on NAV, which is the amount at which the funds are redeemable and is used as a practical expedient for fair value. These funds are not classified in the fair value hierarchy, but are disclosed as part of the fair value table above.

Trading securities associated with deferred compensation plans

Trading securities represent mutual fund investments that are matched to employee deferred compensation obligations. These investments are bought and sold as employees defer compensation, receive distributions, or make changes in the funds underlying their accounts. Quoted market prices (Level 1) are used to determine the fair values of the mutual funds.

Interest rate swap agreements

The fair values of interest rate swap agreements are determined based on dealer quotes using a discounted cash flow model matched to the contractual terms of each instrument. Since inputs to the model are observable and significant judgment is not required in determining the fair values, interest rate swaps are classified within Level 2 of the fair value hierarchy.

Foreign currency exchange contracts

The fair values of forward and option foreign currency exchange contracts are also determined based on dealer quotes using a discounted cash flow model matched to the contractual terms of each instrument. Since inputs to the model are observable and significant judgment is not required in determining the fair values, forward and option foreign currency exchange contracts are classified within Level 2 of the fair value hierarchy.

Acquisition-related contingent consideration obligations

The Company estimates the fair value of acquisition-related contingent consideration obligations by applying an income approach model that utilizes probability-weighted discounted cash flows. The Company acquired FruitSmart, Inc. in fiscal year 2020 and recognized a contingent consideration liability of $6.7 million on the date of acquisition. Each period the Company evaluates the fair value of the acquisition-related contingent consideration obligations. During the year ended March 31, 2021, the evaluation resulted in a reduction of $4.2 million of contingent consideration of the original $6.7 million liability recorded. Significant judgment is applied to this model and therefore the acquisition-related contingent consideration obligation is classified within Level 3 of the fair value hierarchy.

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A reconciliation of the change in the balance of the acquisition-related contingent consideration obligation (Level 3) for the three months ended June 30, 2021 and 2020 is provided below.

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Balance beginning of year	$	2,532	$	6,705
Change in fair value of contingent consideration liability	—		(4,173)
Balance at end of period	$	2,532	$	2,532

Long-term Debt

The following table summarizes the fair and carrying value of the Company’s long-term debt, including the current portion at each of the balance sheet dates June 30, 2021, and 2020 and March 31, 2021:

(in millions of dollars)	June 30, 2021		June 30, 2020		March 31, 2021
Fair market value of long term obligations	$	517	$	370	$	517
Carrying value of long term obligations	$	520	$	370	$	520

The Company estimates the fair value of its long-term debt using Level 2 inputs which are based upon quoted market prices for the same or similar obligations or on calculations that are based on the current interest rates available to the Company for debt of similar terms and maturities.

Nonrecurring Fair Value Measurements

    Assets and liabilities that are measured at fair value on a nonrecurring basis primarily relate to long-lived assets, right-of-use operating lease assets and liabilities, goodwill and intangibles, and other current and noncurrent assets. These assets and liabilities fair values are also evaluated for impairment when potential indicators of impairment exist. Accordingly, the nonrecurring measurement of the fair value of these assets and liabilities are classified within Level 3 of the fair value hierarchy.

Acquisition Accounting for Business Combinations

The Company accounts for acquisitions qualifying under ASC 805, "Business Combinations," which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The fair values of consideration transferred and net assets acquired are determined using a combination of Level 2 and Level 3 inputs as specified in the fair value hierarchy in ASC 820, “Fair Value Measurements and Disclosures.” The Company believes that the fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions.

Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events, changes in business conditions, or other circumstances provide an indication that such assets may be impaired.

CIFI

As a result of the wind-down of the CIFI operation, impairments of $0.5 million and $16.1 million of the related long-lived assets were recorded in the three months ended June 30, 2021 and in fiscal year 2021, respectively. The long-lived assets primarily consist of buildings, processing equipment, and other manufacturing related assets. The aggregate fair value and carrying value of those assets following the impairment adjustments was approximately $5 million at June 30, 2021. The fair values of the property, plant and equipment were principally determined using a market-based approach with consideration of the assets fair values to potential third-parties. Significant judgment was required in estimating the amount and timing of the future cash flows associated with the disposition of the assets.

Tanzania

Due to business changes that affected the leaf tobacco market in Tanzania and the Company's operations there, an impairment charge of the long-lived assets in Tanzania was recorded in fiscal year 2019 to reduce their carrying value to fair value at March 31, 2019. The long-lived assets consist principally of the Company's processing facility and equipment, storage

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facilities, tobacco buying and receiving stations, employee housing, and vehicles and transportation equipment. The aggregate fair value and carrying value of those assets following the impairment adjustments was approximately $17 million. The fair values of the property, plant and equipment were determined based principally on a probability-weighting of the discounted cash flows expected under multiple operating and disposition scenarios. Significant judgment was required in estimating the amount and timing of the future cash flows associated with the use and disposition of the assets, as well as the probabilities associated with the respective operating and disposition scenarios.

NOTE 13.   PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The Company sponsors several defined benefit pension plans covering eligible U.S. salaried employees and certain foreign and other employee groups. These plans provide retirement benefits based primarily on employee compensation and years of service. The Company also sponsors defined benefit plans that provide postretirement health and life insurance benefits for eligible U.S. employees attaining specific age and service levels, although postretirement life insurance is no longer provided for active employees.

The components of the Company’s net periodic benefit cost were as follows:

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended June 30,				Three Months Ended June 30,
(in thousands of dollars)	2021		2020		2021		2020
Service cost	$	1,650	$	1,541	$	47	$	48
Interest cost	2,259		2,454		239		287
Expected return on plan assets	(3,385)		(3,677)		(22)		(24)
Net amortization and deferral	976		1,121		(115)		(143)
Net periodic benefit cost	$	1,500	$	1,439	$	149	$	168

During the three months ended June 30, 2021, the Company made contributions of approximately $2.5 million to its pension plans. Additional contributions of $3.7 million are expected during the remaining nine months of fiscal year 2022.

NOTE 14.   STOCK-BASED COMPENSATION

Universal’s shareholders have approved the Executive Stock Plan (“Plan”) under which officers, directors, and employees of the Company may receive grants and awards of common stock, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”), stock appreciation rights, incentive stock options, and non-qualified stock options. The Company’s practice is to award grants of stock-based compensation to officers on an annual basis at the first regularly-scheduled meeting of the Compensation Committee of the Board of Directors (the “Compensation Committee”) in the fiscal year following the public release of the Company’s financial results for the prior year. The Compensation Committee administers the Company’s Plan consistently, following previously defined guidelines. In recent years, the Compensation Committee has awarded only grants of RSUs and PSUs. Awards of restricted stock, RSUs, and PSUs are currently outstanding under the Plan.

The RSUs granted to employees vest either three or five years from the grant date and are then paid out in shares of common stock. Under the terms of the RSU awards, grantees receive dividend equivalents in the form of additional RSUs that vest and are paid out on the same date as the original RSU grant. The PSUs vest at the end of a performance period of three years that begins with the year of the grant, are paid out in shares of common stock shortly after the vesting date, and do not carry rights to dividends or dividend equivalents prior to vesting. Shares ultimately paid out under PSU grants are dependent on the achievement of predetermined performance measures established by the Compensation Committee and can range from zero to 150% of the stated award. The Company’s outside directors receive RSUs following the annual meeting of shareholders. RSUs awarded to outside directors vest in one or three years from the grant date. Restricted shares vest upon the individual’s retirement from service as a director.

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During the three-month periods ended June 30, 2021 and 2020, Universal issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

	Three Months Ended June 30,
(in thousands, except share fair value)	2021		2020
RSUs:
Number granted	58,160		63,050
Grant date fair value	$	57.41	$	43.66
PSUs:
Number granted	48,650		63,050
Grant date fair value	$	47.95	$	34.33

Fair value expense for restricted stock units is recognized ratably over the period from grant date to the earlier of: (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For employees who are already eligible to retire at the date an award is granted, the total fair value of all non-forfeitable awards is recognized as expense at the date of grant. As a result, Universal typically incurs higher stock compensation expense in the first quarter of each fiscal year when grants are awarded to officers than in the other three quarters. For PSUs, the Company generally recognizes fair value expense ratably over the performance and vesting period based on management’s judgment of the ultimate award that is likely to be paid out based on the achievement of the predetermined performance measures. The Company accounts for forfeitures of stock-based awards as they occur. For the three-month periods ended June 30, 2021 and 2020, the Company recorded total stock-based compensation expense of approximately $3.0 million and $2.6 million, respectively. The Company expects to recognize stock-based compensation expense of approximately $3.1 million during the remaining nine months of fiscal year 2022.

NOTE 15. OPERATING SEGMENTS

As a result of recent acquisitions of plant-based ingredients companies, during the three months ended December 31, 2020 management evaluated the Company’s global business activities, including product and service offerings to its customers, as well as senior management’s operational and financial responsibilities. This assessment included an analysis of how its chief operating decision maker measures business performance and allocates resources. As a result of this analysis, senior management determined the Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations.

The Tobacco Operations segment activities 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. Some of these tobacco types are also increasingly used in the manufacture of non-combustible tobacco products that are intended to provide consumers with an alternative to traditional combustible products. The Tobacco Operations segment also provides physical and chemical product testing and smoke testing for tobacco customers. A substantial portion of the Company’s Tobacco Operations' revenues are derived from sales to a limited number of large, multinational cigarette and cigar manufacturers.

The Ingredients Operations segment provides its customers with a broad variety of plant-based ingredients for both human and pet consumption. The Ingredients Operations segment utilizes a variety of value-added manufacturing processes converting raw materials into a wide spectrum of fruit and vegetable juices, concentrates, and dehydrated products. Customers for the Ingredients Operations segment include large multinational food and beverage companies, as well as smaller independent entities. FruitSmart, Silva, and CIFI are the primary operations for the Ingredients Operations segment. FruitSmart manufactures fruit and vegetable juices, purees, concentrates, essences, fibers, seeds, seed oils, and seed powders. Silva is primarily a dehydrated product manufacturer of fruit and vegetable based flakes, dices, granules, powders, and blends. In fiscal year 2021, the Company announced the wind-down of CIFI, a greenfield operation that primarily manufactured both dehydrated and liquid sweet potato products.

The Company currently evaluates the performance of its segments based on operating income after allocated overhead expenses, plus equity in the pretax earnings of unconsolidated affiliates. Operating results for the Company’s reportable segments

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for each period presented in the consolidated statements of income and comprehensive income were as follows, including a recast of the new reportable operating segments presentation for all periods presented below:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
SALES AND OTHER OPERATING REVENUES
Tobacco Operations	$	293,843	$	298,373
Ingredients Operations	56,186		17,438
Consolidated sales and other operating revenues	$	350,029	$	315,811
OPERATING INCOME
Tobacco Operations	$	8,889	$	5,049
Ingredients Operations	4,349		(701)
Segment operating income	13,238		4,348
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1)	(609)		7
Restructuring and impairment costs (2)	(2,024)		—
Add: Other income (loss)(3)	—		4,173
Consolidated operating income	$	10,605	$	8,528

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

(2)Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. See Note 4 for additional information.

(3)Other income represents the reversal of a portion of the contingent consideration liability associated with the acquisition of FruitSmart. See Note 12 for additional information.

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NOTE 16. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

    The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the three months ended June 30, 2021 and 2020:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Foreign currency translation:
Balance at beginning of year	$	(35,135)	$	(42,923)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on foreign currency translation	1,719		2,303
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests	(29)		(156)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	1,690		2,147
Balance at end of period	$	(33,445)	$	(40,776)
Foreign currency hedge:
Balance at beginning of year	$	(414)	$	(12,226)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(1,566) and $255)	5,698		(601)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(108) and $(152)) (1)	284		560
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	5,982		(41)
Balance at end of period	$	5,568	$	(12,267)
Interest rate hedge:
Balance at beginning of year	$	(19,480)	$	(27,402)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $293 and $776)	(1,103)		(2,921)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(392) and $(312)) (2)	1,477		1,172
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	374		(1,749)
Balance at end of period	$	(19,106)	$	(29,151)
Pension and other postretirement benefit plans:
Balance at beginning of year	$	(52,008)	$	(69,046)
Other comprehensive income (loss) attributable to Universal Corporation:
Amortization included in earnings (net of tax expense (benefit) of $(175) and $(193))(3)	759		108
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	759		108
Balance at end of period	$	(51,249)	$	(68,938)
Total accumulated other comprehensive loss at end of period	$	(98,232)	$	(151,132)

(1)     Gain (loss) on foreign currency cash flow hedges related to forecast purchases of tobacco and crop input sales is reclassified from accumulated other comprehensive income (loss) to cost of goods sold when the tobacco is sold to customers. See Note 11 for additional information.

(2) Gain (loss) on interest rate cash flow hedges is reclassified from accumulated other comprehensive income (loss) to interest expense when the related interest payments are made on the underlying debt, or as amortized to interest expense over the period to original maturity for terminated swap agreements. See Note 11 for additional information.

(3)     This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 13 for additional information.

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NOTE 17. CHANGES IN SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS IN SUBSIDIARIES

A reconciliation of the changes in Universal Corporation shareholders’ equity and noncontrolling interests in subsidiaries for the three months ended June 30, 2021 and 2020 is as follows:

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of year	$	1,307,299	$	41,126	$	1,348,425	$	1,246,665	$	42,619	$	1,289,284
Changes in common stock
Accrual of stock-based compensation	2,966		—		2,966		2,633		—		2,633
Withholding of shares from stock-based compensation for grantee income taxes	(2,432)		—		(2,432)		(1,930)		—		(1,930)
Dividend equivalents on RSUs	264		—		264		244		—		244
Changes in retained earnings
Net income	6,357		(2,445)		3,912		7,274		(374)		6,900
Cash dividends declared
Common stock	(19,170)		—		(19,170)		(18,863)		—		(18,863)
Dividend equivalents on RSUs	(264)		—		(264)		(244)		—		(244)
Other comprehensive income (loss)	8,805		29		8,834		465		(156)		309
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(980)		(980)		—		—		—
Balance at end of period	$	1,303,825	$	37,730	$	1,341,555	$	1,236,244	$	42,089	$	1,278,333

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context otherwise requires, the terms “we,” “our,” “us” or “Universal” or the “Company” refer to Universal Corporation together with its subsidiaries. This Quarterly Report on Form 10-Q and the following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Among other things, these statements relate to the Company’s financial condition, results of operation, and future business plans, operations, opportunities, and prospects. In addition, the Company and its representatives may from time to time make written or oral forward-looking statements, including statements contained in other filings with the Securities and Exchange Commission and in reports to shareholders. These forward-looking statements are generally identified by the use of words such as we “expect,” “believe,” “anticipate,” “could,” “should,” “may,” “plan,” “will,” “predict,” “estimate,” and similar expressions or words of similar import. These forward-looking statements are based upon management’s current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results, performance, or achievements to be materially different from any anticipated results, prospects, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: impacts of the ongoing COVID-19 pandemic; success in pursuing strategic investments or acquisitions and integration of new businesses and the impact of these new businesses on future results; product purchased not meeting quality and quantity requirements; reliance on a few large customers; our ability to maintain effective information systems and safeguard confidential information; anticipated levels of demand for and supply of our products and services; costs incurred in providing these products and services; timing of shipments to customers; changes in market structure; government regulation; product taxation; industry consolidation and evolution; changes in exchange rates and interest rates; impacts of regulation and litigation on our customers; industry-specific risks related to our plant-based ingredient businesses; exposure to certain regulatory and financial risks related to climate change; changes in estimates and assumptions underlying our critical accounting policies; the promulgation and adoption of new accounting standards; new government regulations and interpretation of existing standards and regulations; and general economic, political, market, and weather conditions. For a further description of factors that may cause actual results to differ materially from such forward-looking statements, see Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2021. We caution investors not to place undue reliance on any forward-looking statements as these statements speak only as of the date when made, and we undertake no obligation to update any forward-looking statements made in this report. This Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

Results of Operations

Amounts described as net income (loss) and earnings (loss) per diluted share in the following discussion are attributable to Universal Corporation and exclude earnings related to non-controlling interests in subsidiaries. Adjusted operating income (loss), adjusted net income (loss) attributable to Universal Corporation, adjusted diluted earnings (loss) per share, and the total for segment operating income (loss) referred to in this discussion are non-GAAP financial measures. These measures are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for operating income (loss), net income (loss) attributable to Universal Corporation, diluted earnings (loss) per share, cash from operating activities or any other operating or financial performance measure calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. A reconciliation of adjusted operating income (loss) to consolidated operating (income), adjusted net income (loss) attributable to Universal Corporation to consolidated net income (loss) attributable to Universal Corporation and adjusted diluted earnings (loss) per share to diluted earnings (loss) per share are provided in Other Items below. In addition, we have provided a reconciliation of the total for segment operating income (loss) to consolidated operating income (loss) in Note 15. "Operating Segments" to the consolidated financial statements. Management evaluates the consolidated Company and segment performance excluding certain significant charges or credits. We believe these non-GAAP financial measures, which exclude items that we believe are not indicative of our core operating results, provide investors with important information that is useful in understanding our business results and trends.

Overview

Results for our Tobacco Operations segment improved on higher African carryover tobacco shipments and a favorable tobacco product mix in the three months ended June 30, 2021, compared to the three months ended June 30, 2020. Our Ingredients Operations segment, which includes our October 2020 acquisition of Silva International, Inc. (“Silva”), delivered very strong performance in the three months ended June 30, 2021.

We are beginning to see the positive outcome from our capital allocation strategy, which we put in place in May 2018 with the goal of ensuring that we are well positioned for the future. Investments in our tobacco business have enabled us to expand the supply chain services we provide our customers and to create footprint rationalization efficiencies, and we are seeing the returns from those investments in our results. Our plant-based ingredients platform is coming together nicely; we continue to

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believe we are on track for our ingredients businesses to meet our previously announced goal of representing 10% to 20% of our results in fiscal year 2022. We are excited about the performance of our investments thus far and will continue to seek prudent, strategic opportunities to enhance our businesses and return value to our shareholders.

Our tobacco and plant-based ingredients businesses are both currently performing according to our plans. Like other industries, we are seeing some logistical constraints around the world with regard to vessel and container availability stemming from the ongoing COVID-19 pandemic; however at this time, we do not know what significance such constraints may have on shipment timing or our results. We are continuing to monitor these and other pandemic-related conditions which affect our operations.

As part of our ongoing efforts to set high standards of social and environmental performance to support a sustainable supply chain, we have developed targets to reduce greenhouse gas emissions which are consistent with the levels required to meet the goals of the Paris Agreement – limiting global warming to well-below 2°C above pre-industrial levels. Our targets were recently approved by the Science Based Targets initiative (SBTi), and reflect our commitment to reduce our global greenhouse gas emissions by 30% by 2030.

FINANCIAL HIGHLIGHTS
	Three Months Ended June 30,						Change
(in millions of dollars, except per share data)	2021			2020			$		%
Consolidated Results
Sales and other operating revenue	$	350.0		$	315.8		$	34.2	11	%
Cost of goods sold	$	287.6		$	262.0		$	25.5	10	%
Gross Profit Margin	17.8		%	17.0		%			80 bps
Selling, general and administrative expenses	$	49.8		$	49.4		$	0.4	1	%
Restructuring and impairment costs	$	2.0		$	—		$	2.0	(100)	%
Operating income (as reported)	$	10.6		$	8.5		$	2.1	24	%
Adjusted operating income (non-GAAP)*	$	12.6		$	4.4		$	8.3	190	%
Diluted earnings per share (as reported)	$	0.26		$	0.29		$	(0.03)	(10)	%
Adjusted diluted earnings per share (non-GAAP)*	$	0.30		$	0.02		$	0.28	1400	%
Segment Results
Tobacco operations sales and other operating revenues	$	293.8		$	298.4		$	(4.5)	(2)	%
Tobacco operations operating income	$	8.9		$	5.0		$	3.8	76	%
Ingredients operations sales and other operating revenues	$	56.2		$	17.4		$	38.7	222	%
Ingredient operations operating income	$	4.3		$	(0.7)		$	5.1	720	%

*See Reconciliation of Certain Non-GAAP Financial Measures in Other Items below.

Net income for the quarter ended June 30, 2021, was $6.4 million, or $0.26 per diluted share, compared with $7.3 million, or $0.29 per diluted share, for the quarter ended June 30, 2020. Excluding restructuring and impairment costs and certain other non-recurring items, detailed in Other Items below, net income and diluted earnings per share increased by $6.8 million and $0.28, respectively, for the quarter ended June 30, 2021, compared to the quarter ended June 30, 2020. Operating income of $10.6 million for the quarter ended June 30, 2021, increased by $2.1 million, compared to operating income of $8.5 million for the quarter ended June 30, 2020. Adjusted operating income, detailed in Other Items below, of $12.6 million increased by $8.3 million for the first quarter of fiscal year 2022, compared to adjusted operating income of $4.4 million for the first quarter of fiscal year 2021.

Consolidated revenues increased by $34.2 million to $350.0 million for the three months ended June 30, 2021, compared to the same period in fiscal year 2021, on the addition of the business acquired in October 2020 in the Ingredients Operations segment, offset in part by modestly lower comparative leaf tobacco sales volumes.

Tobacco Operations

The first fiscal quarter is historically a slow quarter for our tobacco businesses. Operating income for the Tobacco Operations segment increased by $3.8 million to $8.9 million for the quarter ended June 30, 2021, compared with the quarter

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ended June 30, 2020. Although tobacco sales volumes were down modestly, Tobacco Operations segment results improved on carryover shipments, product mix, and increased supply chain services to customers in the quarter ended June 30, 2021, compared to the same quarter in the prior fiscal year. Carryover crop shipments were higher in Africa in the quarter ended June 30, 2021, compared to the same quarter in the prior fiscal year, in part due to some shipments that were delayed from fiscal year 2021. Brazil experienced an improved product mix on lower volumes in the quarter ended June 30, 2021, compared to the quarter ended June 30, 2020, when high volumes of lower margin carryover crops shipped. Carryover tobacco crop shipments were lower and product mix was less favorable in Asia in the first quarter of fiscal year 2022, compared to the same quarter in fiscal year 2021. In the first quarter of fiscal year 2022, we also provided increased supply chain services to customers for wrapper tobacco, compared to the same quarter in the prior fiscal year. Selling, general, and administrative expenses for the Tobacco Operations segment were lower in the quarter ended June 30, 2021, compared to June 30, 2020, primarily on higher recoveries of value-added taxes and advances to suppliers. Revenues for the Tobacco Operations segment of $293.8 million for the quarter ended June 30, 2021, were down $4.5 million, compared to the same period in the prior fiscal year, on modestly lower tobacco sales volumes.

Ingredients Operations

Operating income for the Ingredients Operations segment was $4.3 million for the quarter ended June 30, 2021, compared to an operating loss of $0.7 million for the quarter ended June 30, 2020. Results for the segment improved year-over-year on the inclusion of the October 2020 Silva acquisition. For the quarter ended June 30, 2021, our Ingredients Operations saw strong volumes in both human and pet food categories as well as some rebound in demand from sectors that have been suffering during the ongoing COVID-19 pandemic. Selling, general, and administrative expenses increased in the quarter ended June 30, 2021, compared to the same quarter in the prior fiscal year, on the addition of the acquired business. Revenues for the Ingredients Operations segment of $56.2 million for the quarter ended June 30, 2021, were up $38.7 million compared to the quarter ended June 30, 2020, primarily on the addition of the revenues for the acquired business.

COVID-19 Pandemic Impact

On March 11, 2020, the World Health Organization declared the coronavirus (“COVID-19”) a pandemic. Foreign governmental organizations and governmental organizations in the United States have taken various actions to combat the spread of COVID-19, including imposing stay-at-home orders and closing “non-essential” businesses and their operations. We continue to closely monitor developments related to the ongoing COVID-19 pandemic and have taken and continue to take steps intended to mitigate the potential risks to us. It is paramount that our employees who operate our businesses are safe and informed. We have assessed and regularly update our existing business continuity plans for our business in the context of this pandemic. For example, we have taken precautions with regard to employee and facility hygiene, imposed travel limitations on our employees, implemented work-from-home procedures, and we continue to assess and reevaluate protocols designed to protect our employees, customers and the public.

We continue to work with our suppliers to mitigate the impacts to our supply chain due to the ongoing pandemic. To date, we have not experienced a material impact to our supply chain, although the ongoing COVID-19 pandemic resulted in delays in certain operations during fiscal year 2021. In addition, our plant-based ingredients platform has seen some shifts in product mix due to the ongoing COVID-19 pandemic related to changes in customer demand. Since March 2020, we have at times also experienced increased volatility in foreign currency exchange rates, which we believe is in part related to the continued uncertainties from COVID-19, as well as actions taken by governments and central banks in response to COVID-19. We are currently seeing and monitoring some logistical constraints around worldwide vessel and container availability stemming from the ongoing COVID-19 pandemic.

We believe we currently have sufficient liquidity to meet our current obligations and our business operations remain fundamentally unchanged other than shipping delays, which could continue to impact quarterly comparisons. This is, however, a rapidly evolving situation, and we cannot predict the extent, resurgence, or duration of the ongoing COVID-19 pandemic, the effects of it on the global, national or local economy, including the impacts on our ability to access capital, or its effects on our business, financial position, results of operations, and cash flows. We continue to monitor developments affecting our employees, customers and operations. We will take additional steps and reevaluate current protocols to address the spread of COVID-19 and its impacts, as necessary, and remain thankful for the hard work of our employees and the continued support of our customers, growers, and other partners during these challenging times.

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Other Items

Cost of goods sold in the quarter ended June 30, 2021, increased by 10% to $287.6 million, compared with the same period in the prior fiscal year, as a result of the acquisition of the business in the Ingredients Operations segment, offset in part by variances in tobacco sales volumes and product mix. Selling, general, and administrative costs for the quarter ended June 30, 2021, increased by $0.4 million to $49.8 million, compared to the same period in the prior fiscal year, as additional costs from the business acquisition in the Ingredients Operations segment were largely offset by lower costs in the Tobacco Operations segment primarily on higher recoveries of value-added taxes and advances to suppliers. Interest expense for the quarter ended June 30, 2021, decreased by $0.6 million to $6.2 million as increased costs from higher debt balances were more than offset in comparison to the quarter ended June 30, 2020, which included a non-recurring interest expense item of $1.8 million associated with the settlement of an uncertain tax matter at a foreign subsidiary.

For the three months ended June 30, 2021, the Company’s effective tax rate on pre-tax income was 23.7%. For the three months ended June 30, 2020, the Company reported a net tax benefit on pretax earnings of $5.0 million, mainly due to a $4.4 million benefit for final tax regulations issued in the quarter regarding the treatment of dividends paid by foreign subsidiaries. Without this benefit, income taxes for the quarter ended June 30, 2020, would have been a benefit of approximately $0.6 million.

Reconciliation of Certain Non-GAAP Financial Measures

The following tables set forth certain non-recurring items included in reported results to reconcile adjusted operating income to consolidated operating income and adjusted net income to net income attributable to Universal Corporation:

Adjusted Operating Income Reconciliation
	Three Months Ended June 30,
(in thousands)	2021		2020
As Reported: Consolidated operating income	$	10,605	$	8,528
Restructuring and impairment costs(1)	2,024		—
Fair value adjustment to contingent consideration for FruitSmart acquisition(2)	—		(4,173)
Adjusted operating income	$	12,629	$	4,355
Adjusted Net Income and Diluted Earnings Per Share
(in thousands and reported net of income taxes)	Three Months Ended June 30,
	2021		2020
As Reported: Net income available to Universal Corporation	$	6,357	$	7,274
Restructuring and impairment costs(1)	1,005		—
Fair value adjustment to contingent consideration for FruitSmart acquisition(2)	—		(4,173)
Interest expense related to an uncertain tax matter at a foreign subsidiary	—		1,849
Income tax benefit on dividends paid from foreign subsidiaries(3)	—		(4,421)
Adjusted net income available to Universal Corporation	$	7,362	$	529
As reported: Diluted earnings per share	$	0.26	$	0.29
As adjusted: Diluted earnings per share	$	0.30	$	0.02

(1)Restructuring and impairment costs are included in consolidated operating income in the consolidated statements of income, but excluded for purposes of Adjusted operating income, Adjusted net income available to Universal Corporation, and Adjusted diluted earnings per share. See Note 4 for additional information.

(2)The Company reversed a portion of the contingent consideration liability for the FruitSmart acquisition, as a result of certain performance metrics that did not meet the required threshold stipulated in the purchase agreement.

(3)The Company recognized an income tax benefit for final U.S. tax regulations on certain dividends paid by foreign subsidiaries in a prior fiscal year.

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Liquidity and Capital Resources

Overview

Our first fiscal quarter is usually a period of significant working capital investment in both Africa and South America as tobacco crops are delivered by farmers. We funded our working capital needs in the quarter ended June 30, 2021, using a combination of cash on hand, short-term borrowings, customer advances, and operating cash flows. We expect tobacco crop shipments to be weighted to the second half of the fiscal year.

Our liquidity and operating capital resource requirements are predominantly short term in nature and primarily relate to working capital for tobacco crop purchases. Working capital needs are seasonal within each geographic region. The geographic dispersion and the timing of working capital needs permit us to predict our general level of cash requirements, although tobacco crop size, prices paid to farmers, shipment and delivery timing, and currency fluctuations affect requirements each year. Peak working capital requirements are generally reached during the first and second fiscal quarters. Each geographic area follows a cycle of buying, processing, and shipping tobacco, and in many regions, we also provide agricultural materials to farmers during the growing season. The timing of the elements of each cycle is influenced by such factors as local weather conditions and individual customer shipping requirements, which may change the level or the duration of crop financing. Despite a predominance of short-term needs, we maintain a portion of our total debt as long-term to reduce liquidity risk. We also periodically have large cash balances that we utilize to meet our working capital requirements.

To date, COVID-19 has not had a significant impact on our operations, and we currently anticipate our current cash balances, cash flows from operations, and our available sources of liquidity will be sufficient to meet our cash requirements for at least the next twelve months. This is, however, a rapidly evolving situation, and we cannot predict the extent, resurgence, or duration of the ongoing COVID-19 pandemic, the effects of it on the global, national or local economy, including the impacts on our ability to access capital, or its effects on our business, financial position, results of operations, and cash flows. We continue to monitor developments affecting our employees, customers and operations.

Operating Activities

We used $120.9 million in net cash flows from our operations during the quarter ended June 30, 2021, compared to generating $0.1 million from our operations in the quarter ended June 30, 2020. Our working capital needs to fund our operations in the quarter ended June 30, 2021, were higher, compared to the quarter ended June 30, 2020, on the tobacco shipment and purchase timing as well as our acquisition of Silva in October 2020. Crop purchase timing was slower in the quarter ended June 30, 2020, in part due to COVID-19 working restrictions. Tobacco inventory levels increased by $233.7 million from March 31, 2021 levels to $874.4 million at June 30, 2021, on seasonal leaf purchases. Tobacco inventory levels were $15.4 million above June 30, 2020 levels, mainly due to tobacco shipment timing. We generally do not purchase material quantities of tobacco on a speculative basis. However, when we contract directly with tobacco farmers, we are often obligated to buy all stalk positions, which may contain less marketable leaf styles. At June 30, 2021, our uncommitted tobacco inventories were $158.6 million, or about 18% of total tobacco inventory, compared to $139.2 million, or about 22% of our March 31, 2021 tobacco inventory, and $176.3 million, or about 21% of our June 30, 2020 tobacco inventory. While we target committed inventory levels of 80% or more of total tobacco inventory, the level of these uncommitted inventory percentages is influenced by timing of farmer deliveries of new crops, as well as the receipt of customer orders.

Our balance sheet accounts reflected seasonal patterns in the quarter ended June 30, 2021, on deliveries of crops by farmers in both South America and Africa. Cash and cash equivalent balances and accounts receivable decreased by $112.5 million and $87.6 million, respectively, from March 31, 2021 levels, as we used cash, including collections on receivables, to fund seasonal working capital needs. Advances to suppliers were $70.4 million at June 30, 2021, a reduction of $51.2 million from March 31, 2021 as tobacco crops were delivered in payment on some of those balances, net of new advances on current tobacco crops. Notes payable and overdrafts was up $52.0 million from March 31, 2021 levels, on seasonal increases.

Accounts receivable and accounts receivable—unconsolidated affiliates were both up $57.7 million and $19.2 million, respectively for the quarter ended June 30, 2021, compared to the same quarter in the prior fiscal year, on the timing of crop purchases and shipments. Inventories—Other were also up in the quarter ended June 30 2021, compared to the quarter ended June 30, 2020, on our acquisition of Silva.

Investing Activities

Our capital allocation strategy focuses on four strategic priorities: strengthening and investing for growth in our leaf tobacco business; increasing our strong dividend; exploring growth opportunities for our plant-based ingredients platform that

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utilize our assets and capabilities; and returning excess capital to our shareholders. In deciding where to invest capital resources, we look for opportunities where we believe we can earn an adequate return as well as leverage our assets and expertise or enhance our farmer base. Our capital expenditures are generally limited to those that add value, replace or maintain equipment, increase efficiency, or position us for future growth. During the quarters ended June 30, 2021 and 2020, we invested about $14.4 million and $8.4 million, respectively, in our property, plant and equipment. Depreciation expense was approximately $9.7 million and $9.3 million for the three months ended June 30, 2021 and 2020, respectively. Typically, our capital expenditures for maintenance projects are less than $30 million per fiscal year. In addition, from time to time, we undertake projects that require capital expenditures when we identify opportunities to improve efficiencies, add value for our customers, and position ourselves for future growth. We currently expect to spend approximately $35 to $45 million over the next twelve months on capital projects for maintenance of our facilities and other investments to grow and improve our businesses.

Our Board of Directors approved our current share repurchase program in November 2020. The program authorizes the purchase of up to $100 million of our common stock through November 15, 2022. Under the current authorization, we may purchase shares from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. Repurchases of shares under the repurchase program may vary based on management discretion, as well as changes in cash flow generation and availability. During the three months ended June 30, 2021, we did not purchase any shares of common stock. As of June 30, 2021, approximately 24.6 million shares of our common stock were outstanding and our available authorization under our current share repurchase program was $100 million.

Financing Activities

We consider the sum of notes payable and overdrafts, long-term debt (including any current portion), and customer advances and deposits, less cash, cash equivalents, and short-term investments on our balance sheet to be our net debt. We also consider our net debt plus shareholders' equity to be our net capitalization. Net debt as a percentage of net capitalization was approximately 31% at June 30, 2021, up from the June 30, 2020 level of approximately 23%, largely on higher debt balances due in part to the Silva acquisition in October 2020 as well as higher working capital requirements, and up from the March 31, 2021 level of approximately 25%. As of June 30, 2021, we had $84.7 million in cash and cash equivalents, our short-term debt totaled $153.3 million, and we were in compliance with all covenants of our debt agreements, which require us to maintain certain levels of tangible net worth and observe restrictions on debt levels.

As of June 30, 2021, we had $405 million available under a committed revolving credit facility that will mature in December 2023, and we had about $138 million in unused, uncommitted credit lines. We also maintain an effective, undenominated universal shelf registration statement that provides for future issuance of additional debt or equity securities. We have no long-term debt maturing until fiscal year 2024. Our seasonal working capital requirements for our tobacco business typically increase significantly between March and September and decline after mid-year. Available capital resources from our cash balances, committed credit facility, and uncommitted credit lines exceed our normal working capital needs and currently anticipated capital expenditure requirements over the next twelve months.

Derivatives

From time to time, we use interest rate swap agreements to manage our exposure to changes in interest rates. At June 30, 2021, the fair value of our outstanding interest rate swap agreements was a liability of about $24.9 million, and the notional amount swapped was $370 million. We entered into these agreements to eliminate the variability of cash flows in the interest payments on a portion of our variable-rate term loans. Under the swap agreements we receive variable rate interest and pay fixed rate interest. The swaps are accounted for as cash flow hedges.

We also use derivative instruments from time to time to hedge certain foreign currency exposures, primarily related to forecasted purchases of tobacco, related processing costs, and crop input sales in Brazil, as well as our net monetary balance sheet exposures in local currency there. We generally account for our hedges of forecasted tobacco purchases as cash flow hedges. At June 30, 2021, the fair value of our open hedges was a net asset of about $3.4 million.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Currency

The international leaf tobacco trade generally is conducted in U.S. dollars, thereby limiting foreign exchange risk to that which is related to leaf purchase and production costs, overhead, and income taxes in the source country. We also provide farmer advances that are directly related to leaf purchases and are denominated in the local currency. Any currency gains or losses on those advances are usually offset by decreases or increases in the cost of tobacco, which is priced in the local currency. However, the effect of the offset may not occur until a subsequent quarter or fiscal year. Most of our tobacco operations are accounted for using the U.S. dollar as the functional currency. Because there are no forward foreign exchange markets in many of our major countries of tobacco origin, we often manage our foreign exchange risk by matching funding for inventory purchases with the currency of sale, which is usually the U.S. dollar, and by minimizing our net local currency monetary position in individual countries. We are vulnerable to currency remeasurement gains and losses to the extent that monetary assets and liabilities denominated in local currency do not offset each other. In addition to foreign exchange gains and losses, we are exposed to changes in the cost of tobacco due to changes in the value of the local currency in relation to the U.S. dollar. We routinely enter forward currency exchange contracts to hedge against the effects of currency movements on purchases of tobacco to reduce the volatility of costs. In addition, from time-to-time we enter forward contracts to hedge balance sheet exposures.

In certain tobacco markets that are primarily domestic, we use the local currency as the functional currency. Examples of these markets are Poland and the Philippines. In other markets, such as Western Europe, where export sales have been primarily in local currencies, we also use the local currency as the functional currency. In each case, reported earnings are affected by the translation of the local currency into the U.S. dollar.

Interest Rates

We generally use both fixed and floating interest rate debt to finance our operations. Changes in market interest rates expose us to changes in cash flows for floating rate instruments and to changes in fair value for fixed-rate instruments. We normally maintain a proportion of our debt in both variable and fixed interest rates to manage this exposure, and from time to time we may enter hedge agreements to swap the interest rates. In addition, our customers may pay market rates of interest for inventory purchased on order, which could mitigate a portion of the floating interest rate exposure. We also periodically have large cash balances and may receive deposits from customers, both of which we use to fund seasonal purchases of tobacco, reducing our financing needs. Excluding the portion of our bank term loans that have been converted to fixed-rate borrowings with interest rate swaps, debt carried at variable interest rates was approximately $303 million at June 30, 2021. Although a hypothetical 1% change in short-term interest rates would result in a change in annual interest expense of approximately $3.0 million, that amount would be at least partially mitigated by changes in charges to customers.

Derivatives Policies

Hedging interest rate exposure using swaps and hedging foreign exchange exposure using forward contracts are specifically contemplated to manage risk in keeping with management's policies. We may use derivative instruments, such as swaps, forwards, or futures, which are based directly or indirectly upon interest rates and currencies to manage and reduce the risks inherent in interest rate and currency fluctuations. When we use foreign currency derivatives to mitigate our exposure to exchange rate fluctuations, we may choose not to designate them as hedges for accounting purposes, which may result in the effects of the derivatives being recognized in our earnings in periods different from the items that created the exposure.

We do not utilize derivatives for speculative purposes, and we do not enter into market risk-sensitive instruments for trading purposes. Derivatives are transaction specific so that a specific debt instrument, forecast purchase, contract, or invoice determines the amount, maturity, and other specifics of the hedge. We routinely review counterparty risk as part of our derivative program.

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ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer (our Principal Executive Officer) and Chief Financial Officer (our Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.

We have excluded Silva International, Inc. ("Silva"), our wholly-owned subsidiary we acquired on October 1, 2020, which is included in our Consolidated Financial Statements, from our assessment of internal control over financial reporting as of June 30, 2021. Silva represented 8% of consolidated total assets as of June 30, 2021 and 9% of consolidated sales and other operating revenues for the three months ending June 30, 2021. Our Chief Executive Officer and Chief Financial Officer evaluated, with the participation of other members of management, the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, management concluded that our disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Other Legal Matters

Some of our subsidiaries are involved in litigation or legal matters incidental to their business activities.  While the outcome of these matters cannot be predicted with certainty, we are vigorously defending them and do not currently expect that any of them will have a material adverse effect on our business or financial position. However, should one or more of these matters be resolved in a manner adverse to our current expectation, the effect on our results of operations for a particular fiscal reporting period could be material.

ITEM 1A. RISK FACTORS

As of the date of this report, there are no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended March 31, 2021 (the "2021 Annual Report on Form 10-K"). In evaluating our risks, readers should carefully consider the risk factors discussed in our 2021 Annual Report on Form 10-K, which could materially affect our business, financial condition or operating results, in addition to the other information set forth in this report and in our other filings with the Securities and Exchange Commission.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

    As indicated in the following table, we did not repurchase shares of our common stock during the three-month period ended June 30, 2021:

Period (1)	Total Number of Shares Repurchased	Average Price Paid Per Share (2)		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs (3)	Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)
April 1-30, 2021	—	$	—	—	$	100,000,000
May 1-31, 2021	—	—		—	100,000,000
June 1-30, 2021	—	—		—	100,000,000
Total	—	$	—	—	$	100,000,000

(1)Repurchases are based on the date the shares were traded. This presentation differs from the consolidated statement of cash flows, where the cost of share repurchases is based on the date the transactions were settled.

(2)Amounts listed for average price paid per share include broker commissions paid in the transactions.

(3)A stock repurchase plan, which was authorized by our Board of Directors, became effective and was publicly announced on November 5, 2020. This stock repurchase plan authorizes the purchase of up to $100 million in common and/or preferred stock in open market or privately negotiated transactions through November 15, 2022 or when we have exhausted the funds authorized for the program, subject to market conditions and other factors.

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 ITEM 6.   EXHIBITS

10.1	Form of Universal Corporation 2021 Performance Stock Units Award Agreement*
10.2	Form of Universal Corporation 2021 Restricted Stock Units Award Agreement*
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.*
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.*
101	Interactive Data File (submitted electronically herewith).*
	101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section and shall not be part of any registration or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

    __________

    *Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	August 4, 2021	UNIVERSAL CORPORATION
		(Registrant)
		/s/ Johan C. Kroner
		Johan C. Kroner, Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)
		/s/ Scott J. Bleicher
		Scott J. Bleicher, Vice President and Controller
		(Principal Accounting Officer)

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EX-10.1

Exhibit 10.1

UNIVERSAL CORPORATION

Performance Stock Units Award Agreement

THIS PERFORMANCE STOCK UNITS AWARD AGREEMENT, effective as of the Award Date, between Universal Corporation, a Virginia corporation (the “Company”), and the Participant, is made pursuant and subject to the Company’s 2017 Stock Incentive Plan, as approved on August 3, 2017, which is incorporated herein by reference, and any future amendments thereto (the “Plan”). All terms used herein that are defined in the Plan shall have the same meanings given them in the Plan. For purposes of this Agreement, the term “Performance Stock Unit” shall have the same meaning as the term “Stock Unit” used in the Plan. This agreement, along with the accompanying letter detailing an award during 2021 of Performance Stock Units to the Participant (“Award Letter”), constitutes a single agreement governing the terms and conditions of the Participant’s award under the Plan, and is referred to herein as the “Agreement.”

1. Award of Performance Stock Units. Pursuant to the Plan and this Agreement, the Company granted to Participant the number of Performance Stock Units specified in the Award Letter. Each Performance Stock Unit represents the right to receive one share of Common Stock upon and to the extent of satisfaction of the requirements set forth in this Agreement.

2. Terms of Award and Definitions.

(a) Award Date is the date of the Award Letter.

(b) Change of Control means:

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of item (iii) of this subsection 2(b); or

(ii) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

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(iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(c) Participant is the individual named in the Award Letter.

(d) Performance Period means the period specified in the Award Letter over which the Award is earned.

(e) Performance Stock Units means an award denominated in the Company’s shares of Common Stock in the amount specified in the Award Letter.

(f) Retirement or Retire means, for purposes of this Agreement, the Participant’s “separation from service” (within the meaning of Section 1.409A-1(h) of the U.S. Treasury Regulations, applying the default terms thereof) on or after age 55 with at least five (5) years of service, with years of service as determined under the Employees’ Retirement Plan of Universal Leaf Tobacco Company, Incorporated and Designated Affiliated Companies as in effect at the time of such separation.

(g) Target means the level of attainment of the Performance Measure(s) established by the Committee and described in the Award Letter at which 100% of the Performance Stock Units are deemed to have been earned.

3. Earning the Award.

(a) Except as provided in subsection (b) below, the Award of Performance Stock Units is subject to the attainment of a Performance Measure(s) established by the Committee, and will be earned based on the level of attainment of the Performance Measure(s) relative to the Target described in the Award Letter.

(b) A Participant shall continue to be entitled to the Performance Stock Units if, while the Participant is employed by the Company or an Affiliate, the Participant Retires, dies or becomes

2

Disabled during the Performance Period, subject to attainment of the Performance Measure(s) through the end of the Performance Period unless provided otherwise below in the event of death and subject to Section 6. The amount, if any, actually earned by such Participant shall be determined based on attainment of the Performance Measure(s) relative to Target through the end of the Performance Period, and shall be paid to such Participant in accordance with Section 5 at the same time payment would have been made had the Participant remained actively employed; provided, however, in the event of the Participant’s death, the Committee, at its sole discretion, may do one or more of the following: (i) base the number of Performance Stock Units earned on attainment of the Performance Measure(s) relative to the Target through the date of the Participant’s death, or (ii) deem such Participant’s Performance Stock Units to have been earned at the Target as of the date of death, or (iii) accelerate payment upon death, provided payment is made no later than the last day of the first calendar year following the calendar year during which the Participant’s death occurs (but in no event shall payment occur later than the time of payment set forth in Section 5). The corresponding amounts payable for Performance Stock Units shall be paid in the form described in Section 5.

4. Vesting and Forfeiture of Award. Except as provided in this Agreement, Performance Stock Units will vest on the last day of the Performance Period. A Participant whose employment is terminated (other than for reasons of the Participant’s death, Retirement or following a determination of Disability) prior to the end of the Performance Period will forfeit the award of Performance Stock Units effective upon termination.

5. Settlement of Award. The Company shall deliver to the Participant a payment for each earned and vested Performance Stock Unit as determined in accordance with the Award Letter attached hereto, with such payment to be made in shares of Common Stock. Except to the extent Section 6 applies, payment shall be made within ninety (90) calendar days following the last day of the Performance Period, subject to the following:

(a) Except in the case of death, Disability or Retirement, the Participant must be employed by the Company or an Affiliate on the last day of the performance period, and shall have no right with respect to any Award or a portion thereof, until such Award vests in accordance with Section 4.

(b) Unless the Participant pays to the Company in cash (or provides for the payment of) the withholding taxes on the income realized from the payment for Performance Stock Units prior to or at the time of the date of payment, the Company shall withhold from the shares of Common Stock payable to the Participant the number of shares of Common Stock which on the payment date have a fair market value that equals the amount of taxes required to be withheld by the Company.

(c) If the Committee determines, in its sole discretion, that a Participant at any time has willfully engaged in any activity that the Committee determines was or is harmful to the Company, then the Committee may cause any unpaid pending Award to be forfeited in part or in whole. In the event of a material restatement of financial statements, the Committee may cause this Award to be forfeited or the Company may seek a recoupment of payments made under this Award. In addition, the Committee may cause this Award to be forfeited or the Company may seek a recoupment of payments made under this Award in the event of the Participant’s ethical misconduct. In addition, this Award shall be subject to any recoupment policy the Company may adopt to conform to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any other applicable law.

(d) Fractional shares of Common Stock shall not be issuable hereunder upon payment, and when any provision hereof may entitle the Participant to a fractional share, such fraction shall be disregarded.

6. Change of Control.

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(a) Notwithstanding any other provision of this Agreement to the contrary:

(i) in the event of a Change of Control as described in Sections 2(b)(ii)-(iv), all unvested Performance Stock Units not previously forfeited shall become vested and (if the Change of Control occurs prior to the end of the Performance Period) shall be deemed to be earned at the Target; and

(ii) in the event of a Change of Control as described in Section 2(b)(i), a portion of the unvested Performance Stock Units not previously forfeited shall become vested and (if the Change of Control occurs prior to the end of the Performance Period) shall be earned based on attainment of the Performance Measure(s) relative to the Target as of the date of the Change of Control, as though the Performance Period ended on such date. The portion that vests pursuant to the preceding sentence shall be determined by multiplying the total number of outstanding Performance Stock Units by a fraction, the numerator of which is the number of whole months in the Performance Period that have elapsed since the beginning of the Performance Period through the date of the Change of Control and the denominator of which is the number of whole months in the entire Performance Period. If the Participant has already vested due to death, Disability or Retirement prior to the date of the Change of Control but has not yet been paid, then, notwithstanding the provisions of Section 3(b), the above pro-ration shall apply to the Participant’s Performance Stock Units. The Committee shall have the power in accordance with Section 8 to calculate the attainment of the Performance Measure(s) as of the date of the Change of Control or determine the basis on which the attainment of the Performance Measure(s) as of such date will be calculated. For the avoidance of doubt, the Performance Stock Units lost due to pro-ration pursuant to this Section 6(a)(ii) will not vest and will be deemed forfeited upon the Change of Control event described in Section 2(b)(i).

(b) Notwithstanding any other provision of this Agreement to the contrary, upon a Change of Control, all Performance Stock Units, to the extent earned and vested, shall be settled in the form described in Section 5 but shall be paid upon the earlier of (i) within twenty-five (25) business days following the date of the event triggering vesting under this Section 6 or (ii) the original payment period set forth in Section 5; provided, however, that, if the Participant is or will become eligible for Retirement prior to the last day of the Performance Period, payment shall only be accelerated in accordance with subsection (b)(i) if the Change of Control is a change in ownership of stock or assets or change in effective control within the meaning set forth in Section 1.409A-3(i)(5) of the U.S. Treasury Regulations, but only to the extent such meaning is more restrictive than the definition otherwise provided in this Agreement.

7. No Rights of a Shareholder. The Participant does not have any rights of a shareholder until the Performance Stock Units are delivered to the Participant under Section 5 or Section 6. No dividend equivalents shall be paid or credited on the Performance Stock Units.

8. Nontransferability. The Performance Stock Units granted under this Agreement shall be nontransferable.

9. Administration. This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time by the Board of Directors, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, in its sole discretion, all of which shall be binding upon the Participant.

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10. No Right to Continued Employment. This Agreement does not confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate Participant’s employment at any time.

11. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Virginia.

12. Conflicts. In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall govern.

13. Participant Bound by Plan. Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

14. Binding Effect. Subject to the limitations stated herein and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees and personal representatives of Participant and the successors of the Company.

15. Section 409A. It is intended that the Performance Stock Units granted under this Agreement avoid application of, or, if the Participant is or will become eligible for Retirement prior to the last day of the Performance Period, comply in all respects with the requirements of, Sections 409A(a)(2) through (4) of the Code and the applicable U.S. Treasury Regulations and other generally applicable guidance issued thereunder (collectively, the “Applicable Regulations”), and this Performance Stock Unit Agreement shall be interpreted for all purposes in accordance with this intent. In the event that the amounts payable under this Agreement are subject to any taxes, penalties or interest under the Applicable Regulations, the Participant shall be solely liable for the payment of any such taxes, penalties or interest.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized officer, and Participant has affixed his signature hereto.

UNIVERSAL CORPORATION		PARTICIPANT
By:
	Catherine H. Claiborne	«PARTICIPANT»
	Vice President and Assistant Secretary	Date:
Date:	«AWARDDATE»

5

EX-10.2

Exhibit 10.2

UNIVERSAL CORPORATION

Restricted Stock Units Award Agreement

THIS RESTRICTED STOCK UNITS AWARD AGREEMENT, dated as of this «DAY» day of «MONTH», 2021, between Universal Corporation, a Virginia corporation (the “Company”) and «PARTICIPANT» (the “Participant”), is made pursuant and subject to the provisions of the Company’s 2017 Stock Incentive Plan and any future amendments thereto (the “Plan”). The Plan, as it may be amended from time to time, is incorporated herein by reference. All terms used herein that are defined in the Plan shall have the same meanings given them in the Plan.

1. Award of Restricted Stock Units. Pursuant to the Plan, the Company on «AWARDDATE» (the “Award Date”) granted to Participant «AWARDNUMBER» restricted stock units (the “Restricted Stock Units”) subject to the terms and conditions of the Plan and subject further to the restrictions, terms and conditions herein set forth.

2. Terms and Conditions. The award of Restricted Stock Units hereunder is subject to the following terms and conditions:

(a) Vesting. Except as provided in paragraph 3, this award of Restricted Stock Units shall become transferable and nonforfeitable (“Vested”) on the third anniversary of the Award Date (the “Vesting Date”).

(b) Payment. Payment for Participant’s Restricted Stock Units (“Payment”) shall be made at or as soon as administratively practicable (but in any event within 30 days) following the time the Restricted Stock Unit becomes Vested, subject in the Company’s discretion to any delay permitted by Section 1.409A-2(b)(7) of the Treasury Regulations, including as provided therein the Company’s discretion to delay provided the Company deems it reasonably necessary to avoid loss of the Company’s deduction with respect to the Payment under Section 162(m) of the Code. On Payment, the Company shall issue one share of Common Stock to the Participant for each Restricted Stock Unit that is to be paid.

(c) Dividend Equivalent Rights. Restricted Stock Units do not provide the Participant with the rights of a shareholder of Common Stock. However, the Participant shall accumulate dividend equivalent rights on all Restricted Stock Units in an amount equal to the dividends paid with respect to a share of Common Stock on each date prior to Payment that a dividend is paid on the Company’s Common Stock. The dividend equivalent rights shall be converted into additional Restricted Stock Units based on the Fair Market Value of a share of Common Stock on the date the dividend is paid, shall be subject to the same terms and conditions (including vesting terms) as the corresponding Restricted Stock Units and shall accumulate and be paid in additional shares of Common Stock if and when Payment for the corresponding Restricted Stock Units is made.

(d) Tax Withholding. The Company has the right to withhold from any Payment shares having an aggregate Fair Market Value on the date of the Payment equal to the amount of taxes required to be withheld or otherwise deducted and paid with respect to such issuance.

(e) Change of Control. For purposes of this Agreement, a Change of Control shall mean:

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a

1

“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of Common Stock (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of item (iii) of this subsection 2(e); or

(ii) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing to the contrary, if the Participant is or will become eligible for Retirement (as defined below) prior to the Vesting Date, “Change of Control” shall have the meaning set forth in Section 1.409A-3(i)(5) of the U.S. Treasury Regulations, but only to the extent such meaning is more restrictive than the definition otherwise provided above.

2

3. Death, Disability or Retirement. The Restricted Stock Units not yet Vested shall become Vested in the event that Participant dies, becomes Disabled while employed by the Company or an Affiliate or Retires.

4. Forfeiture. All Restricted Stock Units that are not then Vested shall be forfeited if Participant’s employment with the Company or an Affiliate terminates except as provided in Section 3 above or Section 7 below.

5. Retirement. Retirement means, for purposes of this Agreement, the Participant’s “separation from service” (within the meaning of Section 1.409A-1(h) of the U.S. Treasury Regulations, applying the default terms thereof) on or after age 55 with at least five (5) years of service, as determined under the Employees’ Retirement Plan of Universal Leaf Tobacco Company, Incorporated and Designated Affiliated Companies as in effect at the time of such separation. In the event the Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the date of his or her Retirement, then notwithstanding anything in this Agreement to the contrary, Payment shall not be made until the date which is six months after the date of the Participant’s Retirement (or the date of the Participant’s death, if earlier), or as soon as administratively practicable (but in any event within 30 days) thereafter. Whether the Participant is a “specified employee” shall be determined in accordance with guidelines the Company has adopted for this purpose or, in the absence of such guidelines, in accordance with Section 1.409A-1(i) of the U.S. Treasury Regulations, applying the default terms thereof.

6. Disability or Disabled. Disability or Disabled shall have the meaning of “disability” set forth in the Plan; provided, however, if the Participant is or will become eligible for Retirement prior to the Vesting Date, Disability shall have the meaning set forth in Section 409A(a)(2)(C) of the Code, but only to the extent such meaning is more restrictive than the definition otherwise set forth in the Plan.

7. Change of Control. Notwithstanding any other provision of this Agreement to the contrary, all unvested Restricted Stock Units not previously forfeited shall become Vested and shall be immediately paid, in the event of (a) (i) a Change of Control as described in Section 2(e)(ii)-(iv) (as modified by the last sentence of Section 2(e), if applicable) or (ii) a Change of Control as described in Section 2(e)(i) (as modified by the last sentence of Section 2(e), if applicable) and (b) within the two (2) year period following such Change of Control, the Participant’s employment is terminated other than for Cause or the Participant terminates employment for Good Reason (with “Cause” and “Good Reason” given the meaning assigned such terms in the Company’s form of Employment Agreement dated November 17, 2006, as it may be amended from time to time). Notwithstanding the preceding sentence to the contrary, if the Participant is or will become eligible for Retirement prior to the Vesting Date, then (y) the Participant’s termination of employment shall mean his or her “separation from service” (within the meaning of Section 1.409A-1(h) of the U.S. Treasury Regulations, applying the default terms thereof) and (z) if the Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the date the Participant’s employment is terminated other than for Cause or Disability or the Participant terminates employment for Good Reason as described in subclause (b) above, then notwithstanding anything in this Agreement to the contrary, payment shall not be made until the date which is six months after the date of such termination (or the date of the Participant’s death, if earlier), or as soon as administratively practicable (but in any event within 30 days) thereafter. Whether the Participant is a “specified employee” shall be determined in accordance with guidelines the Company has adopted for this purpose or, in the absence of such guidelines, in accordance with Section 1.409A-1(i) of the U.S. Treasury Regulations, applying the default terms thereof.

8. Change in Capital Structure. The number of Restricted Stock Units covered by this Agreement shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock of the Company resulting from a subdivision or consolidation of shares or the payment of a stock dividend (but only on the Common Stock), a stock split-up or any other increase or decrease in the

3

number of such shares effected without receipt of cash or property or labor or services by the Company. The Company may in its discretion in accordance with Section 1.409A-3(j)(4)(ix) of the Treasury Regulations, cause these Restricted Stock Units to terminate and be immediately paid in the event of a liquidation or dissolution of the Company taxed in accordance with Section 331 of the Code or approved by a bankruptcy court.

In the event of a change in the Common Stock of the Company as presently constituted, which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the Common Stock within the meaning of the Plan.

The award of these Restricted Stock Units pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets.

9. Recoupment. If the Committee determines, in its sole discretion, that a Participant at any time has willfully engaged in any activity that the Committee determines was or is harmful to the Company, then the Committee may cause any unvested Restricted Stock Units to be forfeited in part or in whole. In the event of a material restatement of financial statements, the Committee may cause any unvested Restricted Stock Units to be forfeited or the Company may seek a recoupment of payments made pursuant to this Agreement. In addition, the Committee may cause any unvested Restricted Stock Units to be forfeited or the Company may seek a recoupment of payments made under this Agreement in the event of the Participant’s ethical misconduct. In addition, this Award shall be subject to any recoupment policy the Company may adopt to conform to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any other applicable law.

10. Fractional Shares. Fractional shares of Common Stock shall not be issuable hereunder upon Payment, and when any provision hereof may entitle the Participant to a fractional share, such fraction shall be disregarded.

11. No Right to Continued Employment. This Agreement does not confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate Participant’s employment at any time.

12. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Virginia.

13. Conflicts. In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall govern.

14. Participant Bound by Plan. Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

15. Binding Effect. Subject to the limitations stated herein and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees and personal representatives of Participant and the successors of the Company.

16. Section 409A. It is intended that the Restricted Stock Units granted under this Agreement avoid application of, or, if the Participant is or will become eligible for Retirement prior to the Vesting Date, comply in all respects with the requirements of, Sections 409A(a)(2) through (4) of the Code and the

4

applicable U.S. Treasury Regulations and other generally applicable guidance issued thereunder (collectively, the “Applicable Regulations”), and this Restricted Stock Unit Agreement shall be interpreted for all purposes in accordance with this intent. In the event that the amounts payable under this Agreement are subject to any taxes, penalties or interest under the Applicable Regulations, the Participant shall be solely liable for the payment of any such taxes, penalties or interest.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized officer, and Participant has affixed his signature hereto.

UNIVERSAL CORPORATION
By:
	Catherine H. Claiborne Vice President and Assistant Secretary
PARTICIPANT
«PARTICIPANT»

5

EX-31.1

Exhibit 31.1

CERTIFICATION

I, George C. Freeman, III, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Universal Corporation for the period ended June 30, 2021;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 4, 2021	/s/ George C. Freeman, III
		George C. Freeman, III
		Chairman, President, and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Johan C. Kroner, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Universal Corporation for the period ended June 30, 2021;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 4, 2021	/s/ Johan C. Kroner
		Johan C. Kroner
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Universal Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, George C. Freeman, III, certify, to the best of my knowledge and belief, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 4, 2021	/s/ George C. Freeman, III
		George C. Freeman, III
		Chairman, President, and Chief Executive Officer
		(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Universal Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Johan C. Kroner, certify, to the best of my knowledge and belief, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 4, 2021	/s/ Johan C. Kroner
		Johan C. Kroner
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document Information - shares	3 Months Ended
	Jun. 30, 2021	Aug. 02, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Amendment Flag	false
Document Period End Date	Jun. 30, 2021
Entity File Number	001-00652
Entity Registrant Name	UNIVERSAL CORPORATION
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-0414210
Entity Address, Address Line One	9201 Forest Hill Avenue,
Entity Address, City or Town	Richmond,
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23235
City Area Code	804
Local Phone Number	359-9311
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	UVV
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		24,577,880
Entity Central Index Key	0000102037
Current Fiscal Year End Date	--03-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022

XML

Consolidated Statements Of Income And Comprehensive Income - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2021	Jun. 30, 2020
Sales and other operating revenues		$ 350,029	$ 315,811
Sales and other operating revenues		350,029	315,811
Costs and expenses
Cost of goods sold		287,556	262,046
Selling, general and administrative expenses		49,844	49,410
Other income	[1]	0	4,173
Restructuring and impairment costs	[2]	2,024	0
Operating income		10,605	8,528
Equity in pretax earnings (loss) of unconsolidated affiliates	[3]	609	(7)
Other non-operating income (expense)		48	(18)
Interest income		73	159
Interest expense		6,208	6,810
Income before income taxes and other items		5,127	1,852
Income taxes		1,215	(5,048)
Net income		3,912	6,900
Less: net loss (income) attributable to noncontrolling interests in subsidiaries		2,445	374
Net income attributable to Universal Corporation		$ 6,357	$ 7,274
Earnings per share:
Basic		$ 0.26	$ 0.30
Diluted		$ 0.26	$ 0.29
Weighted average common shares outstanding:
Basic		24,694,489	24,602,610
Diluted		24,852,151	24,703,579
Total comprehensive income (loss)
Total comprehensive income, net of income taxes		$ 12,746	$ 7,209
Less: comprehensive (income) loss attributable to noncontrolling interests		2,416	530
Comprehensive income (loss) attributable to Universal Corporation		$ 15,162	$ 7,739
Dividends declared per common share		$ 0.78	$ 0.77

[1] Other income represents the reversal of a portion of the contingent consideration liability associated with the acquisition of FruitSmart. See Note 12 for additional information.

[2] Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. See Note 4 for additional information.

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

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020
ASSETS
Cash and cash equivalents	$ 84,688	$ 197,221	$ 100,015
Accounts receivable, net	279,900	367,482	222,162
Advances to suppliers, net	70,377	121,618	65,221
Accounts receivable—unconsolidated affiliates	52,047	584	32,827
Inventories—at lower of cost or net realizable value:
Tobacco	874,381	640,653	858,940
Other	140,249	145,965	104,399
Prepaid income taxes	17,804	15,029	13,426
Other current assets	85,016	66,806	65,675
Total current assets	1,604,462	1,555,358	1,462,665
Property, plant and equipment
Land	23,439	22,400	21,454
Buildings	293,734	284,430	258,306
Machinery and equipment	661,753	658,826	644,092
Total property, plant and equipment	978,926	965,656	923,852
Less accumulated depreciation	(627,279)	(616,146)	(608,173)
Property, plant and equipment, net	351,647	349,510	315,679
Other assets
Operating lease right-of-use assets	31,281	31,230	37,576
Goodwill, net	173,041	173,051	126,862
Other intangibles, net	69,905	72,304	17,114
Investments in unconsolidated affiliates	85,064	84,218	79,198
Deferred income taxes	18,013	12,149	23,085
Pension asset	11,764	11,950	0
Other noncurrent assets	50,916	52,154	44,661
Total other assets	439,984	437,056	328,496
Total assets	2,396,093	2,341,924	2,106,840
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable and overdrafts	153,337	101,294	92,758
Accounts payable and accrued expenses	158,013	139,484	133,621
Accounts payable—unconsolidated affiliates	18	1,282	0
Customer advances and deposits	9,307	8,765	10,575
Accrued compensation	18,576	29,918	16,373
Income taxes payable	5,919	4,516	2,359
Current portion of operating lease liabilities	7,998	7,898	9,914
Current portion of long-term debt	0	0	0
Total current liabilities	353,168	293,157	265,600
Long-term debt	518,297	518,172	368,829
Pensions and other postretirement benefits	55,622	57,637	70,473
Long-term operating lease liabilities	20,826	19,725	24,040
Other long-term liabilities	59,815	59,814	75,130
Deferred income taxes	46,810	44,994	24,435
Total liabilities	1,054,538	993,499	828,507
Shareholders' equity
Series A Junior Participating Preferred Stock, no par value, 500,000 shares authorized, none issued or outstanding	0	0	0
Common stock, no par value, 100,000,000 shares authorized 24,577,254 shares issued and outstanding at June 30, 2021 (24,488,964 at June 30, 2020 and 24,514,867 at March 31, 2021)	327,471	326,673	322,449
Retained earnings	1,074,586	1,087,663	1,064,927
Accumulated other comprehensive loss	(98,232)	(107,037)	(151,132)
Total Universal Corporation shareholders' equity	1,303,825	1,307,299	1,236,244
Noncontrolling interests in subsidiaries	37,730	41,126	42,089
Total shareholders' equity	1,341,555	1,348,425	1,278,333
Total liabilities and shareholders' equity	$ 2,396,093	$ 2,341,924	$ 2,106,840

XML

Consolidated Balance Sheets (Parenthetical) - shares	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020
Common Stock [Member]
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, shares issued	24,577,254	24,514,867	24,488,964
Common stock, shares outstanding	24,577,254	24,514,867	24,488,964
Series A Junior Participating Preferred Stock [Member]
Preferred stock, shares authorized	500,000	500,000	500,000
Preferred stock, shares issued	0	0	0
Preferred stock, shares outstanding		0	0

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2021	Jun. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$ 3,912	$ 6,900
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization		12,058	10,105
Net provision for losses (recoveries) on advances to suppliers		(328)	57
Foreign currency remeasurement (gain) loss, net		506	(4,691)
Foreign currency exchange contracts		1,127	(13,951)
Restructuring and impairment costs	[1]	2,024	0
Restructuring payments		(1,776)	(2,937)
Change in estimated fair value of contingent consideration for FruitSmart acquisition		0	4,173
Other, net		(2,726)	(3,350)
Changes in operating assets and liabilities, net		(141,720)	12,087
Net cash provided (used) by operating activities		(126,923)	47
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(14,428)	(8,386)
Proceeds from sale of property, plant and equipment		1,589	218
Net cash used by investing activities		(12,839)	(8,168)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of short-term debt, net		49,439	20,688
Dividends paid to noncontrolling interests		(980)	0
Dividends paid on common stock		(18,876)	(18,567)
Other		(2,432)	(1,930)
Net cash provided (used) by financing activities		27,151	191
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents		78	515
Net decrease in cash, restricted cash and cash equivalents		(112,533)	(7,415)
Cash, restricted cash and cash equivalents at beginning of year		203,221	107,430
Cash, restricted cash and cash equivalents at end of period		90,688	100,015
Supplemental Cash Flow Information [Abstract]
Cash and cash equivalents		84,688	100,015
Restricted cash (Other noncurrent assets)		6,000	0
Total cash, restricted cash and cash equivalents		$ 90,688	$ 100,015

[1] Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. See Note 4 for additional information.

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Basis Of Presentation	3 Months Ended
	Jun. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis Of Presentation	BASIS OF PRESENTATION Universal Corporation, which together with its subsidiaries is referred to herein as “Universal” or the “Company,” is a global business-to-business agri-products supplier to consumer product manufacturers. The Company is the leading global leaf tobacco supplier and provides high-quality plant-based ingredients to food and beverage end markets. Because of the seasonal nature of the Company’s business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year. All adjustments necessary to state fairly the results for the period have been included and were of a normal recurring nature. This Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021.    The extent to which the ongoing COVID-19 pandemic will impact the Company's financial condition, results of operations and demand for its products and services will depend on future developments, which are highly uncertain and cannot be predicted. Such developments may include the ongoing geographic spread and mutations of COVID-19, the severity of the pandemic, the duration of the COVID-19 outbreak and the type and duration of actions that may be taken by various governmental authorities in response to the COVID-19 pandemic and the impact on the U.S. and the global economies, markets and supply chains. At June 30, 2021, it is not possible to predict the overall impact of the ongoing COVID-19 pandemic on the Company's business, financial condition, results of operations and demand for its products and services.

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Accounting Pronouncements

3 Months Ended

Jun. 30, 2021

Accounting Standards Update and Change in Accounting Principle [Abstract]

Accounting Pronouncements

ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

In December 2019, the FASB issued Accounting Standards Update No. 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The updated guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance in ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, although early adoption is permitted. The Company adopted the new standard effective April 1, 2021, which was the beginning of its fiscal year ending March 31, 2022. There was no material impact to the consolidated financial statements from the adoption of ASU 2019-12.

Pronouncements to be Adopted in Future Periods

In March 2020, the FASB issued Accounting Standards Update No. 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04"). ASU 2020-04 provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. ASU 2020-04 also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform. The standard is effective upon issuance and can be applied as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact that the guidance will have on its consolidated financial statements.

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Business Combinations

3 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

BUSINESS COMBINATION

Acquisition of Silva International, Inc.

On October 1, 2020 the Company acquired 100% of the capital stock of Silva International, Inc. (“Silva”), a natural, specialty dehydrated vegetable, fruit, and herb processing company serving global markets, for approximately $164 million in cash and $5.9 million of additional working capital on-hand at the date of acquisition. The acquisition of Silva diversifies the Company's product offerings and generates new opportunities for its plant-based ingredients platform.

The Company continues to employ one of Silva's selling shareholders and as stipulated in the Silva purchase agreement has transferred $6 million to a third-party escrow account that may ultimately be earned by the selling shareholder upon completion of a post-combination service period. Since the compensation agreement for the selling shareholder who remains employed with the Company includes a post-combination service period, the Company has excluded the entire $6 million in the

purchase price to be allocated. The $6 million in escrow is recognized as restricted cash in other noncurrent assets on the consolidated balance sheet at June 30, 2021. The contingent consideration arrangement for the selling shareholder includes a post-combination service requirement and forfeitable payment provisions, therefore under ASC Topic 805, "Business Combinations," must be treated as compensation expense. This expense is being recognized ratably over the requisite service period in selling, general, and administrative expense on the consolidated statements of income.

The following preliminary allocation of the purchase price was based on third-party valuations and assumptions. At June 30, 2021, the Company is finalizing the fair value assigned to income tax related assets and liabilities. The final purchase price allocation is expected to be completed in the second quarter of fiscal year 2022. The following table summarizes the preliminary purchase price allocation of the assets acquired and liabilities assumed on October 1, 2020.

(in thousands of dollars)
Assets
Cash and cash equivalents	$	8,126
Accounts receivable, net	17,885
Advances to suppliers, net	3,011
Inventory	33,162
Other current assets	833
Property, plant and equipment (net)	24,437
Intangibles
Customer relationships	53,000
Trade names	7,800
Goodwill	46,144
Total assets acquired	194,398
Liabilities
Accounts payable and accrued expenses	11,683
Accrued compensation	3,350
Income taxes payable	946
Deferred income taxes	14,419
Total liabilities assumed	30,398
Total assets acquired and liabilities assumed	$	164,000

A portion of the goodwill recorded as part of the acquisition was attributable to the assembled workforce of Silva. The goodwill recognized for the Silva acquisition is not deductible for U.S. income tax purposes. The tax basis of the assets acquired and liabilities assumed did not result in a step-up of tax basis. The Company determined the Silva operations are not material to the Company’s consolidated results. Therefore, pro forma information is not presented.

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Restructuring and Related Activities

3 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Impairment Costs Disclosure

RESTRUCTURING AND IMPAIRMENT COSTS

Universal continually reviews its business for opportunities to realize efficiencies, reduce costs, and realign its operations in response to business changes. Restructuring and impairment costs are periodically incurred in connection with those activities.

Tobacco Operations

In the three months ended June 30, 2021, the Company incurred and paid $1.5 million of termination costs associated with restructuring of tobacco processing and administrative operations in Africa.

Ingredients Operations

In the three months ended June 30, 2021, the Company incurred $0.5 million of impairment costs on property, plant, and equipment associated with the wind-down of the Carolina Innovative Food Ingredients, Inc. ("CIFI") operations that was announced in fiscal year 2021.

There were no restructuring and impairment costs incurred for the three months ended June 30, 2020.

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Revenue from Contract with Customer

3 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

REVENUE FROM CONTRACTS WITH CUSTOMERS

The majority of the Company’s consolidated revenue consists of sales of processed leaf tobacco to customers. The Company also earns revenue from processing leaf tobacco owned by customers and from various other services provided to customers. The Company also has fruit and vegetable processing operations that provide customers with a range of food ingredient products. Payment terms with customers vary depending on customer creditworthiness, product types, services provided, and other factors. Contract durations and payment terms for all revenue categories generally do not exceed one year. Therefore, the Company has applied a practical expedient to not adjust the transaction price for the effects of financing components, as the Company expects that the period from the time the revenue for a transaction is recognized to the time the customer pays for the related good or service transferred will be one year or less. Below is a description of the major revenue-generating categories from contracts with customers.

Tobacco Sales

The majority of the Company’s business involves purchasing leaf tobacco from farmers in the origins where it is grown, processing and packing the tobacco in its factories, and then transferring ownership and control of the tobacco to customers. On a much smaller basis, the Company also sources processed tobacco from third-party suppliers for resale to customers. The contracts for tobacco sales with customers create a performance obligation to transfer tobacco to the customer. Transaction prices for the sale of tobaccos are primarily based on negotiated fixed prices, but the Company does have a small number of cost-plus contracts with certain customers. Cost-plus arrangements provide the Company reimbursement of the cost to purchase and process the tobacco, plus a contractually agreed-upon profit margin. The Company utilizes the most likely amount methodology under the accounting guidance to recognize revenue for cost-plus arrangements with customers. Shipping and handling costs under tobacco sales contracts with customers are treated as fulfillment costs and included in the transaction price. Taxes assessed by government authorities on the sale of leaf tobacco products are excluded from the transaction price. At the point in time that the customer obtains control over the tobacco, which is typically aligned with physical shipment under the contractual terms with the customer, the Company completes its performance obligation and recognizes the revenue for the sale.

Ingredient Sales

In recent fiscal years, the Company has diversified operations through acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products. These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps including sorting, cleaning, pressing, mixing, and blending to manufacture finished goods utilized in both human and pet food. The contracts for food ingredients with customers create a performance obligation to transfer the manufactured finished goods to the customer. Transaction prices for the sale of food ingredients are primarily based on negotiated fixed prices. At the point in time that the customer obtains control over the finished product, which is typically aligned with physical shipment under the contractual terms with the customer, the Company completes its performance obligation and recognizes the revenue for the sale.

Processing Revenue

Processing and packing of customer-owned tobacco and ingredients is a short-duration process. Processing charges are primarily based on negotiated fixed prices per unit of weight processed. Under normal operating conditions, customer-owned raw materials that are placed into the production line exits as processed and packed product and is then later transported to customer-designated transfer locations. The revenue for these services is recognized when the performance obligation is satisfied, which is generally when processing is completed. The Company’s operating history and contract analyses indicate that customer requirements for processed tobacco and food ingredients products are consistently met upon completion of processing.

Other Operating Sales and Revenue

From time to time, the Company enters into various arrangements with customers to provide other value-added services that may include blending, chemical and physical testing of products, storage, and tobacco cutting services for select manufacturers. These other arrangements and operations are a much smaller portion of the Company’s business, and are separate and distinct contractual agreements from the Company’s tobacco and food ingredients sales or third-party processing arrangements with customers. The transaction prices and timing of revenue recognition of these items are determined by the specifics of each contract.

Disaggregation of Revenue from Contracts with Customers

The following table disaggregates the Company’s revenue by significant revenue-generating category:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Tobacco sales	$	270,264	$	275,142
Ingredient sales	51,888		16,356
Processing revenue	16,696		16,300
Other sales and revenue from contracts with customers	10,765		7,602
Total revenue from contracts with customers	349,613		315,400
Other operating sales and revenues	416		411
Consolidated sales and other operating revenues	$	350,029	$	315,811

    Other operating sales and revenues consists principally of interest on advances to suppliers.

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Other Contingent Liabilities And Other Matters

3 Months Ended

Jun. 30, 2021

Other Contingent Liabilities And Other Matters [Abstract]

Guarantees, Other Contingent Liabilities, And Other Matters

CONTINGENT LIABILITIES AND OTHER MATTERS

Other Contingent Liabilities

Other Contingent Liabilities (Letters of credit)

The Company had other contingent liabilities totaling approximately $1 million at June 30, 2021, primarily related to outstanding letters of credit.

Value-Added Tax Assessments in Brazil

As further discussed below, the Company’s local operating subsidiaries pay significant amounts of value-added tax (“VAT”) in connection with their operations, which generate tax credits that they normally are entitled to recover through offset, refund, or sale to third parties. In Brazil, VAT is assessed at the state level when green tobacco is transferred between states. The Company’s operating subsidiary there pays VAT when tobaccos grown in the states of Santa Catarina and Parana are transferred to its factory in the state of Rio Grande do Sul for processing. The subsidiary has received assessments for additional VAT plus interest and penalties from tax authorities for the states of Santa Catarina and Parana based on audits of the subsidiary’s VAT filings for specified periods. In June 2011, tax authorities for the state of Santa Catarina issued assessments for tax, interest, and penalties for periods from 2006 through 2009 totaling approximately $9 million. In September 2014, tax authorities for the state of Parana issued an assessment for tax, interest, and penalties for periods from 2009 through 2014 totaling approximately $11 million. Those amounts are based on the exchange rate for the Brazilian currency at June 30, 2021. Management of the operating subsidiary and outside counsel believe that errors were made by the tax authorities for both states in determining all or significant portions of these assessments and that various defenses support the subsidiary’s positions.

With respect to the Santa Catarina assessments, the subsidiary took appropriate steps to contest the full amount of the claims. As of June 30, 2021, a portion of the subsidiary’s arguments had been accepted, and the outstanding assessment had been reduced. The reduced assessment, together with the related accumulated interest through the end of the current reporting period, totaled approximately $9 million (at the June 30, 2021 exchange rate). The subsidiary is continuing to contest the full remaining amount of the assessment. While the range of reasonably possible loss is zero up to the full $9 million remaining assessment with interest, based on the strength of the subsidiary’s defenses, no loss within that range is considered probable at this time and no liability has been recorded at June 30, 2021.

With respect to the Parana assessment, management of the subsidiary and outside counsel challenged the full amount of the claim. A significant portion of the Parana assessment was based on positions taken by the tax authorities that management and outside counsel believe deviate significantly from the underlying statutes and relevant case law. In addition, under the law, the subsidiary’s tax filings for certain periods covered in the assessment were no longer open to any challenge by the tax authorities. In December 2015, the Parana tax authorities withdrew the initial claim and subsequently issued a new assessment covering the same tax periods, reflecting a substantial reduction from the original assessment. In fiscal year 2020, the Parana tax authorities acknowledged the statute of limitations related to claims prior to December 2010 had expired and reduced the assessment to $3 million (at the June 30, 2021 exchange rate). Notwithstanding the reduced assessment, management and outside counsel continue to believe that the new assessment is not supported by the underlying statutes and relevant case law and have challenged the full amount of the claim. The range of reasonably possible loss is considered to be zero up to the full $3 million

assessment. However, based on the strength of the subsidiary's defenses, no loss within that range is considered probable at this time and no liability has been recorded at June 30, 2021.

In both states, the process for reaching a final resolution to the assessments is expected to be lengthy, and management is not currently able to predict when either case will be concluded. Should the subsidiary ultimately be required to pay any tax, interest, or penalties in either case, the portion paid for tax would generate VAT credits that the subsidiary may be able to recover.

Other Legal and Tax Matters

Various subsidiaries of the Company are involved in litigation and tax examinations incidental to their business activities.  While the outcome of these matters cannot be predicted with certainty, management is vigorously defending the matters and does not currently expect that any of them will have a material adverse effect on the Company’s business or financial position.  However, should one or more of these matters be resolved in a manner adverse to management’s current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material.

Advances to Suppliers

In many sourcing origins where the Company operates, it provides agronomy services and seasonal advances of seed, seedlings, fertilizer, and other supplies to tobacco farmers for crop production, or makes seasonal cash advances to farmers for the procurement of those inputs. These advances are short term, are repaid upon delivery of tobacco to the Company, and are reported in advances to suppliers in the consolidated balance sheets. In several origins, the Company has made long-term advances to tobacco farmers to finance curing barns and other farm infrastructure. In some years, due to low crop yields and other factors, individual farmers may not deliver sufficient volumes of tobacco to fully repay their seasonal advances, and the Company may extend repayment of those advances into future crop years. The long-term portion of advances is included in other noncurrent assets in the consolidated balance sheets. Both the current and the long-term portions of advances to suppliers are reported net of allowances recorded when the Company determines that amounts outstanding are not likely to be collected. Short-term and long-term advances to suppliers totaled $92 million at June 30, 2021, $83 million at June 30, 2020, and $144 million at March 31, 2021. The related valuation allowances totaled $18 million at June 30, 2021, $16 million at June 30, 2020, and $18 million at March 31, 2021, and were estimated based on the Company’s historical loss information and crop projections. The allowances were reduced by net recoveries of approximately $0.3 million and increased by net provisions of approximately $0.1 million in the three-month periods ended June 30, 2021 and 2020, respectively. These net recoveries and provisions are included in selling, general, and administrative expenses in the consolidated statements of income. Interest on advances is recognized in earnings upon the farmers’ delivery of tobacco in payment of principal and interest.

Recoverable Value-Added Tax Credits

In many foreign countries, the Company’s local operating subsidiaries pay significant amounts of VAT on purchases of unprocessed and processed tobacco, crop inputs, packing materials, and various other goods and services. In some countries, VAT is a national tax, and in other countries it is assessed at the state level. Items subject to VAT vary from jurisdiction to jurisdiction, as do the rates at which the tax is assessed. When tobacco is sold to customers in the country of origin, the operating subsidiaries generally collect VAT on those sales. The subsidiaries are normally permitted to offset their VAT payments against the collections and remit only the incremental VAT collections to the tax authorities. When tobacco is sold for export, VAT is normally not assessed. In countries where tobacco sales are predominately for export markets, VAT collections generated on downstream sales are often not sufficient to fully offset the subsidiaries’ VAT payments. In those situations, unused VAT credits can accumulate. Some jurisdictions have procedures that allow companies to apply for refunds of unused VAT credits from the tax authorities, but the refund process often takes an extended period of time and it is not uncommon for refund applications to be challenged or rejected in part on technical grounds. Other jurisdictions may permit companies to sell or transfer unused VAT credits to third parties in private transactions, although approval for such transactions must normally be obtained from the tax authorities, limits on the amounts that can be transferred may be imposed, and the proceeds realized may be heavily discounted from the face value of the credits. Due to these factors, local operating subsidiaries in some countries can accumulate significant balances of VAT credits over time. The Company reviews these balances on a regular basis and records valuation allowances on the credits to reflect amounts that are not expected to be recovered, as well as discounts anticipated on credits that are expected to be sold or transferred. At June 30, 2021, the aggregate balance of recoverable tax credits held by the Company’s subsidiaries totaled approximately $61 million ($54 million at June 30, 2020, and $49 million at March 31, 2021), and the related valuation allowances totaled approximately $19 million ($17 million at June 30, 2020, and $19 million at March 31, 2021). The net balances are reported in other current assets and other noncurrent assets in the consolidated balance sheets.

Long-Term Debt

In December 2020, the Company repaid $150 million of revolving credit borrowings used to finance the purchase of Silva with term loans under its existing senior unsecured bank credit facility. The Company increased the borrowings of the senior unsecured five-year and seven-year term loans by $75 million each. At June 30, 2021, the five-year term loan maturing December 2023 and the seven-year term loan maturing December 2025 had outstanding borrowings of $225 million and $295 million, respectively. Under the senior unsecured bank credit facility, the additional $150 million of terms loans bear interest at variable rates plus a margin based on the Company's credit metrics and interest payments remained unhedged at June 30, 2021. The Company maintains receive-floating/pay-fixed interest rates swap agreements for a portion of the outstanding five and seven-year term loans. See Note 11 for additional information on outstanding interest rate swap agreements.

Shelf Registration and Stock Repurchase Plan

In November 2020, the Company filed an undenominated automatic universal shelf registration statement with the U.S. Securities and Exchange Commission to provide for the future issuance of an undefined amount of securities as determined by the Company and offered in one or more prospectus supplements prior to issuance.

A stock repurchase plan, which was authorized by the Company's Board of Directors, became effective and was publicly announced on November 5, 2020. This stock repurchase plan authorizes the purchase of up to $100 million in common and/or preferred stock in open market or privately negotiated transactions through November 15, 2022 or when funds for the program have been exhausted, subject to market conditions and other factors. The program had $100 million of remaining capacity for repurchases of common and/or preferred stock at June 30, 2021.

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Earnings Per Share

3 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

    The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended June 30,
(in thousands, except share and per share data)	2021		2020
Basic Earnings Per Share
Numerator for basic earnings per share
Net income attributable to Universal Corporation	$	6,357	$	7,274
Denominator for basic earnings per share
Weighted average shares outstanding	24,694,489		24,602,610
Basic earnings per share	$	0.26	$	0.30
Diluted Earnings Per Share
Numerator for diluted earnings per share
Net income attributable to Universal Corporation	$	6,357	$	7,274
Denominator for diluted earnings per share:
Weighted average shares outstanding	24,694,489		24,602,610
Effect of dilutive securities
Employee and outside director share-based awards	157,662		100,969
Denominator for diluted earnings per share	24,852,151		24,703,579
Diluted earnings per share	$	0.26	$	0.29

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Income Taxes

3 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES     The Company operates in the United States and many foreign countries and is subject to the tax laws of many jurisdictions. Changes in tax laws or the interpretation of tax laws can affect the Company’s earnings, as can the resolution of

pending and contested tax issues. The Company's consolidated effective income tax rate is affected by a number of factors, including the mix and timing of domestic and foreign earnings, discrete items, and the effect of exchange rate changes on taxes.     

    The consolidated effective income tax rate for the three months ended June 30, 2021 was 24% . There were no discrete items that impacted the income tax provision for the three months ended June 30, 2021.

    The consolidated effective income tax rate for the three months ended June 30, 2020 was a benefit of $5.0 million. The Company's consolidated effective income tax rate for the three months ended June 30, 2020 was affected by a $4.4 net tax benefit for final U.S. tax regulations issued for hybrid dividends paid by foreign subsidiaries. Without this discrete item for the final U.S. tax regulations, the consolidated effective income tax rate for the three months ended June 30, 2020 would have been a benefit of approximately 24%. Additionally, for the three months ended June 30, 2020 the Company recognized $1.8 million as a component of interest expense related to a settlement of an uncertain tax position at foreign subsidiary.

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Goodwill and Other Intangibles Goodwill and Other Intangibles

3 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

GOODWILL AND OTHER INTANGIBLES

The Company's changes in goodwill at June 30, 2021 and 2020 consisted of the following:

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Balance at beginning of fiscal year	$	173,051	$	126,826
Foreign currency translation adjustment	(10)		36
Balance at end of period	$	173,041	$	126,862

The Company's intangible assets primarily consist of capitalized customer-related intangibles, trade names, proprietary developed technology and noncompetition agreements. The Company's intangible assets subject to amortization consisted of the following at June 30, 2021 and 2020:

(in thousands, except useful life)				June 30,
				2021						2020
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships(1)	11	—	13	$	62,500	$	(4,710)	$	57,790	$	9,500	$	(365)	$	9,135
Trade names(1)		5		11,100		(2,160)		8,940		3,300		(330)		2,970
Developed technology(1)		3		4,800		(2,400)		2,400		4,800		(800)		4,000
Noncompetition agreements(1)		5		1,000		(300)		700		1,000		(100)		900
Other		5		777		(703)		74		734		(625)		109
Total intangible assets				$	80,177	$	(10,273)	$	69,904	$	19,334	$	(2,220)	$	17,114

(1) On October 1, 2020 the Company acquired 100% of the capital stock of Silva for approximately $164.0 million in cash and $5.9 million of working capital on-hand at the date of acquisition. The Silva acquisition resulted in $60.8 million of intangibles. See Note 3 for additional information.

Intangible assets are amortized on a straight-line basis over the asset's estimated useful economic life as noted above.

The Company's amortization expense for intangible assets for the three months ended June 30, 2021 and 2020 was:

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Amortization Expense	$	2,403	$	808

Amortization expense for the developed technology intangible asset is recorded in cost of goods sold in the consolidated income statements of income. The amortization expense for the other intangible assets is recorded in selling, general, and administrative expenses in the consolidated statements of income.

As of June 30, 2021, the expected future amortization expense for intangible assets is as follows:

Fiscal Year (in thousands of dollars)
2022 (excluding the three months ended June 30, 2021)	$	7,216
2023	9,204
2024	7,969
2025	8,534
2026 and thereafter	36,981
Total expected future amortization expense	$	69,904

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Leases

3 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases of Lessee Disclosure

LEASES

The Company, as a lessee, enters into operating leases for land, buildings, equipment, and vehicles. For all operating leases with terms greater than 12 months and with fixed payment arrangements, a lease liability and corresponding right-of-use asset are recognized in the balance sheet for the term of the lease by calculating the net present value of future lease payments. On the date of lease commencement, the present value of lease liabilities is determined by discounting the future lease payments by the Company’s collateralized incremental borrowing rate, adjusted for the lease term and currency of the lease payments. If a lease contains a renewal option that the Company is reasonably certain to exercise, the Company accounts for the original lease term and expected renewal term in the calculation of the lease liability and right-of-use asset.

The following table sets forth the right-of-use assets and lease liabilities for operating leases included in the Company’s consolidated balance sheet:

(in thousands of dollars)	June 30, 2021		June 30, 2020		March 31, 2021
Assets
Operating lease right-of-use assets	$	31,281	$	37,576	$	31,230
Liabilities
Current portion of operating lease liabilities	$	7,998	$	9,914	$	7,898
Long-term operating lease liabilities	20,826		24,040		19,725
Total operating lease liabilities	$	28,824	$	33,954	$	27,623

The following table sets forth the location and amount of operating lease costs included in the Company's consolidated statement of income:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Income Statement Location
Cost of goods sold	$	2,578	$	2,911
Selling, general, and administrative expenses	2,305		2,190
Total operating lease costs(1)	$	4,883	$	5,101

(1)Includes variable operating lease costs.

The following table reconciles the undiscounted cash flows to the operating lease liabilities in the Company’s consolidated balance sheet:

(in thousands of dollars)	June 30, 2021
Maturity of Operating Lease Liabilities
2022 (excluding the three months ended June 30, 2021)	$	6,889
2023	7,279
2024	5,461
2025	4,560
2026	2,656
2027 and thereafter	5,805
Total undiscounted cash flows for operating leases	$	32,650
Less: Imputed interest	(3,826)
Total operating lease liabilities	$	28,824

As of June 30, 2021, the Company had no leases that did not yet commence.

The following table sets forth supplemental information related to operating leases:

	Three Months Ended June 30,
(in thousands, except lease term and incremental borrowing rate)	2021			2020
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,777		$	3,028
Right-of-use assets obtained in exchange for new operating leases	2,741			1,023
Weighted Average Remaining Lease Term (years)	5.54			5.55
Weighted Average Collateralized Incremental Borrowing Rate	4.12		%	4.04		%

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Derivatives And Hedging Activities

3 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives And Hedging Activities

DERIVATIVES AND HEDGING ACTIVITIES

Universal is exposed to various risks in its worldwide operations and uses derivative financial instruments to manage two specific types of risks – interest rate risk and foreign currency exchange rate risk. Interest rate risk has been managed by entering into interest rate swap agreements, and foreign currency exchange rate risk has been managed by entering into forward and option foreign currency exchange contracts. However, the Company’s policy also permits other types of derivative instruments. In addition, foreign currency exchange rate risk is also managed through strategies that do not involve derivative instruments, such as using local borrowings and other approaches to minimize net monetary positions in non-functional currencies. The disclosures below provide additional information about the Company’s hedging strategies, the derivative instruments used, and the effects of these activities on the consolidated statements of income and comprehensive income and the consolidated balance sheets. In the consolidated statements of cash flows, the cash flows associated with all of these activities are reported in net cash provided by operating activities.

Cash Flow Hedging Strategy for Interest Rate Risk

In February 2019, the Company entered into receive-floating/pay-fixed interest rate swap agreements that were designated and qualify as hedges of the exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on two outstanding non-amortizing bank term loans that were funded as part of a new bank credit facility in December 2018. Although no significant ineffectiveness is expected with this hedging strategy, the effectiveness of the interest rate swaps is evaluated on a quarterly basis. At June 30, 2021, the total notional amount of the interest rate swaps was $370 million, which corresponded with the former original outstanding balance of the term loans. During the third quarter of fiscal year 2021, the Company converted $150 million from the balance in its revolving credit line into the existing term loans, splitting the balance equally between them. At June 30, 2021, the Company is not hedging the interest payments on the additional $150 million of term loans. The increase to the principal balance of the term loans does not have an impact to the effectiveness analysis of the interest rate swap agreements.

Previously, the Company had receive-floating/pay-fixed interest rate swap agreements that were designated and qualified as cash flow hedges for two outstanding non-amortizing bank loans that were repaid concurrent with closing on the new bank credit facility. Those swap agreements were subsequently terminated in February 2019 concurrent with the inception of the new swap agreements. The fair value of the previous swap agreements, approximately $5.4 million, was received from the counterparties upon termination and is being amortized from accumulated other comprehensive loss into earnings as a reduction of interest expense through the original maturity dates of those agreements. As of June 30, 2021, $0.7 million remained in accumulated other comprehensive loss to be amortized through December 31, 2021.

Cash Flow Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Sales of Crop Inputs, Forecast Purchases of Tobacco, and Related Processing Costs

The majority of the tobacco production in most countries outside the United States where Universal operates is sold in export markets at prices denominated in U.S. dollars. However, sales of crop inputs (such as seeds and fertilizers) to farmers, purchases of tobacco from farmers, and most processing costs (such as labor and energy) in those countries are usually denominated in the local currency. Changes in exchange rates between the U.S. dollar and the local currencies where tobacco is grown and processed affect the ultimate U.S. dollar sales of crop inputs and cost of processed tobacco. From time to time, the Company enters into forward and option contracts to buy U.S. dollars and sell the local currency at future dates that coincide with the sale of crop inputs to farmers. In the case of forecast purchases of tobacco and the related processing costs, the Company enters into forward and option contracts to sell U.S. dollars and buy the local currency at future dates that coincide with the expected timing of a portion of the tobacco purchases and processing costs. These strategies offset the variability of future U.S. dollar cash flows for sales of crop inputs, tobacco purchases, and processing costs for the foreign currency notional amount hedged. These hedging strategies have been used mainly for tobacco purchases, processing costs, and sales of crop inputs in Brazil, although the Company has also entered into hedges for a portion of the tobacco purchases in Africa.

The aggregate U.S. dollar notional amount of forward and option contracts entered into for these purposes during the three-month periods in fiscal years 2022 and 2021 was as follows:

	Three Months Ended June 30,
(in millions of dollars)	2021		2020
Tobacco purchases	$	42.0	$	30.2
Processing costs	10.2		8.0
Crop input sales	20.8		23.5
Total	$	73.0	$	61.7

Variations in exchange rates and in the amount and timing of fixed-price orders from customers for their purchases from individual crop years routinely cause variations in the U.S. dollar notional amount of forward contracts entered into from one year to the next. All contracts related to tobacco purchases and crop input sales were designated and qualified as hedges of the future cash flows associated with the forecast purchases of tobacco. As a result, changes in fair values of the forward contracts have been recognized in comprehensive income as they occurred, but only recognized in earnings as a component of cost of goods sold upon sale of the related tobacco to third-party customers. In fiscal year 2022, only non-deliverable forward contracts were utilized for the sale of 2022 crop year inputs. Premium payments for option contracts entered into for the sale of crop inputs in fiscal year 2021 were expensed into earnings as incurred.

The table below presents the expected timing of when the remaining accumulated other comprehensive gains and losses as of June 30, 2021 for cash flows hedges of tobacco purchases and crop input sales will be recognized in earnings.

Hedging Program	Crop Year	Geographic Location(s)	Fiscal Year Earnings
Tobacco purchases	2022	Brazil	2023
Tobacco purchases	2021	Brazil, Africa	2022
Tobacco purchases	2020	Brazil	2022
Crop input sales	2022	Brazil	2023
Crop input sales	2021	Brazil	2022

Forward contracts related to processing costs have not been designated as hedges, and gains and losses on those contracts have been recognized in earnings on a mark-to-market basis.

Hedging Strategy for Foreign Currency Exchange Rate Risk Related to Net Local Currency Monetary Assets and Liabilities of Foreign Subsidiaries

Most of the Company’s foreign subsidiaries transact the majority of their sales in U.S. dollars and finance the majority of their operating requirements with U.S. dollar borrowings, and therefore use the U.S. dollar as their functional currency. These subsidiaries normally have certain monetary assets and liabilities on their balance sheets that are denominated in the local currency. Those assets and liabilities can include cash and cash equivalents, accounts receivable and accounts payable, advances to farmers and suppliers, deferred income tax assets and liabilities, recoverable value-added taxes, operating lease liabilities, and other items. Net monetary assets and liabilities denominated in the local currency are remeasured into U.S. dollars each reporting period, generating gains and losses that the Company records in earnings as a component of selling, general, and administrative expenses. The level of net monetary assets or liabilities denominated in the local currency normally fluctuates throughout the year based on the operating cycle, but it is most common for monetary assets to exceed monetary liabilities, sometimes by a significant amount. When this situation exists and the local currency weakens against the U.S. dollar, remeasurement losses are generated. Conversely, remeasurement gains are generated on a net monetary asset position when the local currency strengthens against the U.S. dollar. To manage a portion of its exposure to currency remeasurement gains and losses, the Company enters into forward contracts to buy or sell the local currency at future dates coinciding with expected changes in the overall net local currency monetary asset position of the subsidiary. Gains and losses on the forward contracts are recorded in earnings as a component of selling, general, and administrative expenses for each reporting period as they occur, and thus directly offset the related remeasurement losses or gains in the consolidated statements of income for the notional amount hedged. The Company does not designate these contracts as hedges for accounting purposes. The contracts are generally arranged to hedge the subsidiary's projected exposure to currency remeasurement risk for specified periods of time, and new contracts are entered as necessary throughout the year to replace previous contracts as they mature. The Company is currently using forward currency contracts to manage its exposure to currency remeasurement risk in Brazil.  The total notional amounts of contracts outstanding at June 30, 2021 and 2020, and March 31, 2021, were approximately $16.7 million, $11.8 million, and $16.6 million, respectively. To further mitigate currency remeasurement exposure, the Company’s foreign subsidiaries may utilize short-term local currency financing during certain periods. This strategy, while not involving the use of derivative instruments, is intended to minimize the subsidiary’s net monetary position by financing a portion of the local currency monetary assets with local currency monetary liabilities, thus hedging a portion of the overall position.

Several of the Company’s foreign subsidiaries transact the majority of their sales and finance the majority of their operating requirements in their local currency, and therefore use their respective local currencies as the functional currency for reporting purposes. From time to time, these subsidiaries sell tobacco to customers in transactions that are not denominated in the functional currency. In those situations, the subsidiaries routinely enter into forward exchange contracts to offset currency risk for the period of time that a fixed-price order and the related trade account receivable are outstanding with the customer. The contracts are not designated as hedges for accounting purposes.

Effect of Derivative Financial Instruments on the Consolidated Statements of Income

The table below outlines the effects of the Company’s use of derivative financial instruments on the consolidated statements of income:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Cash Flow Hedges - Interest Rate Swap Agreements
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	(1,396)	$	(3,697)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(2,223)	$	(1,838)
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	$	353	$	354
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings	Interest expense
Ineffective Portion of Hedge
Gain (loss) recognized in earnings	$	—	$	—
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses
Hedged Item
Description of hedged item	Floating rate interest payments on term loan
Cash Flow Hedges - Foreign Currency Exchange Contracts
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	8,233	$	(1,447)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(516)	$	(734)
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings	Cost of goods sold
Ineffective Portion and Early De-designation of Hedges
Gain (loss) recognized in earnings	$	668	$	—
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses
Hedged Item
Description of hedged item	Forecast purchases of tobacco in Brazil and Africa
Derivatives Not Designated as Hedges - Foreign Currency Exchange Contracts
Gain (loss) recognized in earnings	$	4,604	$	(144)
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses

For the interest rate swap agreements, the effective portion of the gain or loss on the derivative is recorded in accumulated other comprehensive loss and any ineffective portion is recorded in selling, general and administrative expenses.

For the forward foreign currency exchange contracts designated as cash flow hedges of tobacco purchases in Brazil and Africa and the crop input sales in Brazil, a net hedge gain of approximately $7.3 million remained in accumulated other comprehensive loss at June 30, 2021. That balance reflects gains and losses on contracts related to the 2022, 2021, and 2020 Brazil crops, the 2021 Africa crop, and the 2022 and 2021 Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through June 30, 2021. Based on the hedging strategy, as the gain or loss is recognized in earnings, it is expected

to be offset by a change in the direct cost for the tobacco or by a change in sales prices if the strategy has been mandated by the customer. Generally, margins on the sale of the tobacco will not be significantly affected.

Effect of Derivative Financial Instruments on the Consolidated Balance Sheets

The table below outlines the effects of the Company’s derivative financial instruments on the consolidated balance sheets at June 30, 2021 and 2020, and March 31, 2021:

	Derivatives in a Fair Value Asset Position							Derivatives in a Fair Value Liability Position
	Balance Sheet Location	Fair Value as of						Balance Sheet Location	Fair Value as of
(in thousands of dollars)		June 30, 2021		June 30, 2020		March 31, 2021			June 30, 2021		June 30, 2020		March 31, 2021
Derivatives Designated as Hedging Instruments
Interest rate swap agreements	Other non-current assets	$	—	$	—	$	—	Other long-term liabilities	$	24,892	$	39,022	$	25,719
Foreign currency exchange contracts	Other current assets	5,423		571		1,137		Accounts payable and accrued expenses	2,063		1,390		1,031
Total		$	5,423	$	571	$	1,137		$	26,955	$	40,412	$	26,750
Derivatives Not Designated as Hedging Instruments
Foreign currency exchange contracts	Other current assets	$	3,124	$	149	$	435	Accounts payable and accrued expenses	$	88	$	702	$	791
Total		$	3,124	$	149	$	435		$	88	$	702	$	791

Substantially all of the Company's foreign exchange derivative instruments are subject to master netting arrangements whereby the right to offset occurs in the event of default by a participating party. The Company has elected to present these contracts on a gross basis in the consolidated balance sheets.

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Fair Value Measurements

3 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Universal measures certain financial and nonfinancial assets and liabilities at fair value based on applicable accounting guidance. The financial assets and liabilities measured at fair value include money market funds, trading securities associated with deferred compensation plans, interest rate swap agreements, forward foreign currency exchange contracts and acquisition-related contingent consideration obligations. The application of the fair value guidance to nonfinancial assets and liabilities primarily includes the determination of fair values for goodwill and long-lived assets when indicators of potential impairment are present.

    Under the accounting guidance, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The framework for measuring fair value is based on a fair value hierarchy that distinguishes between observable inputs and unobservable inputs. Observable inputs are based on market data obtained from independent sources. Unobservable inputs require the Company to make its own assumptions about the value placed on an asset or liability by market participants because little or no market data exists.

There are three levels within the fair value hierarchy:

Level	Description
1	quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date;
2	quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability; and
3	unobservable inputs for the asset or liability.

    As permitted under the accounting guidance, the Company uses net asset value per share ("NAV") as a practical expedient to measure the fair value of its money market funds. The fair values for those funds are presented under the heading "NAV" in the tables that follow in this disclosure. In measuring the fair value of liabilities, the Company considers the risk of non-performance in determining fair value. Universal has not elected to report at fair value any financial instruments or any other assets or liabilities that are not required to be reported at fair value under current accounting guidance.

Recurring Fair Value Measurements

At June 30, 2021 and 2020, and at March 31, 2021, the Company had certain financial assets and financial liabilities that were required to be measured and reported at fair value on a recurring basis. These assets and liabilities are listed in the tables below and are classified based on how their values were determined under the fair value hierarchy or the NAV practical expedient:

	June 30, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	1,992	$	—	$	—	$	—	$	1,992
Trading securities associated with deferred compensation plans	—		15,735		—		—		15,735
Interest rate swap agreements	—		—		—		—		—
Foreign currency exchange contracts	—		—		8,547		—		8,547
Total financial assets measured and reported at fair value	$	1,992	$	15,735	$	8,547	$	—	$	26,274
Liabilities
Acquisition-related contingent consideration obligations - short term	$	—	$	—	$	—	$	2,532	$	2,532
Interest rate swap agreements	—		—		24,892		—		24,892
Foreign currency exchange contracts	—		—		2,151		—		2,151
Total financial liabilities measured and reported at fair value	$	—	$	—	$	27,043	$	2,532	$	29,575

	June 30, 2020
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	4,013	$	—	$	—	$	—	$	4,013
Trading securities associated with deferred compensation plans	—		13,963		—		—		13,963
Foreign currency exchange contracts	—		—		720		—		720
Total financial assets measured and reported at fair value	$	4,013	$	13,963	$	720	$	—	$	18,696
Liabilities
Acquisition-related contingent consideration obligations - long term	$	—	$	—	$	—	$	2,532	2,532
Interest rate swap agreements	—		—		39,022		—		39,022
Foreign currency exchange contracts	—		—		2,092		—		2,092
Total financial liabilities measured and reported at fair value	$	—	$	—	$	41,114	$	2,532	$	43,646

	March 31, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	1,992	$	—	$	—	$	—	$	1,992
Trading securities associated with deferred compensation plans	—		15,735		—		—		15,735
Foreign currency exchange contracts	—		—		1,572		—		1,572
Total financial assets measured and reported at fair value	$	1,992	$	15,735	$	1,572	$	—	$	19,299
Liabilities
Acquisition-related contingent consideration obligations - long-term	$	—	$	—	$	—	$	2,532	$	2,532
Interest rate swap agreements	—		—		25,719		—		25,719
Foreign currency exchange contracts	—		—		1,822		—		1,822
Total financial liabilities measured and reported at fair value	$	—	$	—	$	27,541	$	2,532	$	30,073

Money market funds

The fair value of money market funds, which are reported in cash and cash equivalents in the consolidated balance sheets, is based on NAV, which is the amount at which the funds are redeemable and is used as a practical expedient for fair value. These funds are not classified in the fair value hierarchy, but are disclosed as part of the fair value table above.

Trading securities associated with deferred compensation plans

Trading securities represent mutual fund investments that are matched to employee deferred compensation obligations. These investments are bought and sold as employees defer compensation, receive distributions, or make changes in the funds underlying their accounts. Quoted market prices (Level 1) are used to determine the fair values of the mutual funds.

Interest rate swap agreements

The fair values of interest rate swap agreements are determined based on dealer quotes using a discounted cash flow model matched to the contractual terms of each instrument. Since inputs to the model are observable and significant judgment is not required in determining the fair values, interest rate swaps are classified within Level 2 of the fair value hierarchy.

Foreign currency exchange contracts

The fair values of forward and option foreign currency exchange contracts are also determined based on dealer quotes using a discounted cash flow model matched to the contractual terms of each instrument. Since inputs to the model are observable and significant judgment is not required in determining the fair values, forward and option foreign currency exchange contracts are classified within Level 2 of the fair value hierarchy.

Acquisition-related contingent consideration obligations

The Company estimates the fair value of acquisition-related contingent consideration obligations by applying an income approach model that utilizes probability-weighted discounted cash flows. The Company acquired FruitSmart, Inc. in fiscal year 2020 and recognized a contingent consideration liability of $6.7 million on the date of acquisition. Each period the Company evaluates the fair value of the acquisition-related contingent consideration obligations. During the year ended March 31, 2021, the evaluation resulted in a reduction of $4.2 million of contingent consideration of the original $6.7 million liability recorded. Significant judgment is applied to this model and therefore the acquisition-related contingent consideration obligation is classified within Level 3 of the fair value hierarchy.

A reconciliation of the change in the balance of the acquisition-related contingent consideration obligation (Level 3) for the three months ended June 30, 2021 and 2020 is provided below.

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Balance beginning of year	$	2,532	$	6,705
Change in fair value of contingent consideration liability	—		(4,173)
Balance at end of period	$	2,532	$	2,532

Long-term Debt

The following table summarizes the fair and carrying value of the Company’s long-term debt, including the current portion at each of the balance sheet dates June 30, 2021, and 2020 and March 31, 2021:

(in millions of dollars)	June 30, 2021		June 30, 2020		March 31, 2021
Fair market value of long term obligations	$	517	$	370	$	517
Carrying value of long term obligations	$	520	$	370	$	520

The Company estimates the fair value of its long-term debt using Level 2 inputs which are based upon quoted market prices for the same or similar obligations or on calculations that are based on the current interest rates available to the Company for debt of similar terms and maturities.

Nonrecurring Fair Value Measurements

    Assets and liabilities that are measured at fair value on a nonrecurring basis primarily relate to long-lived assets, right-of-use operating lease assets and liabilities, goodwill and intangibles, and other current and noncurrent assets. These assets and liabilities fair values are also evaluated for impairment when potential indicators of impairment exist. Accordingly, the nonrecurring measurement of the fair value of these assets and liabilities are classified within Level 3 of the fair value hierarchy.

Acquisition Accounting for Business Combinations

The Company accounts for acquisitions qualifying under ASC 805, "Business Combinations," which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The fair values of consideration transferred and net assets acquired are determined using a combination of Level 2 and Level 3 inputs as specified in the fair value hierarchy in ASC 820, “Fair Value Measurements and Disclosures.” The Company believes that the fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions.

Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events, changes in business conditions, or other circumstances provide an indication that such assets may be impaired.

CIFI

As a result of the wind-down of the CIFI operation, impairments of $0.5 million and $16.1 million of the related long-lived assets were recorded in the three months ended June 30, 2021 and in fiscal year 2021, respectively. The long-lived assets primarily consist of buildings, processing equipment, and other manufacturing related assets. The aggregate fair value and carrying value of those assets following the impairment adjustments was approximately $5 million at June 30, 2021. The fair values of the property, plant and equipment were principally determined using a market-based approach with consideration of the assets fair values to potential third-parties. Significant judgment was required in estimating the amount and timing of the future cash flows associated with the disposition of the assets.

Tanzania

Due to business changes that affected the leaf tobacco market in Tanzania and the Company's operations there, an impairment charge of the long-lived assets in Tanzania was recorded in fiscal year 2019 to reduce their carrying value to fair value at March 31, 2019. The long-lived assets consist principally of the Company's processing facility and equipment, storage

facilities, tobacco buying and receiving stations, employee housing, and vehicles and transportation equipment. The aggregate fair value and carrying value of those assets following the impairment adjustments was approximately $17 million. The fair values of the property, plant and equipment were determined based principally on a probability-weighting of the discounted cash flows expected under multiple operating and disposition scenarios. Significant judgment was required in estimating the amount and timing of the future cash flows associated with the use and disposition of the assets, as well as the probabilities associated with the respective operating and disposition scenarios.

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Pension And Other Postretirement Benefit Plans

3 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits Disclosure

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The Company sponsors several defined benefit pension plans covering eligible U.S. salaried employees and certain foreign and other employee groups. These plans provide retirement benefits based primarily on employee compensation and years of service. The Company also sponsors defined benefit plans that provide postretirement health and life insurance benefits for eligible U.S. employees attaining specific age and service levels, although postretirement life insurance is no longer provided for active employees.

The components of the Company’s net periodic benefit cost were as follows:

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended June 30,				Three Months Ended June 30,
(in thousands of dollars)	2021		2020		2021		2020
Service cost	$	1,650	$	1,541	$	47	$	48
Interest cost	2,259		2,454		239		287
Expected return on plan assets	(3,385)		(3,677)		(22)		(24)
Net amortization and deferral	976		1,121		(115)		(143)
Net periodic benefit cost	$	1,500	$	1,439	$	149	$	168

During the three months ended June 30, 2021, the Company made contributions of approximately $2.5 million to its pension plans. Additional contributions of $3.7 million are expected during the remaining nine months of fiscal year 2022.

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Stock-Based Compensation

3 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Universal’s shareholders have approved the Executive Stock Plan (“Plan”) under which officers, directors, and employees of the Company may receive grants and awards of common stock, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”), stock appreciation rights, incentive stock options, and non-qualified stock options. The Company’s practice is to award grants of stock-based compensation to officers on an annual basis at the first regularly-scheduled meeting of the Compensation Committee of the Board of Directors (the “Compensation Committee”) in the fiscal year following the public release of the Company’s financial results for the prior year. The Compensation Committee administers the Company’s Plan consistently, following previously defined guidelines. In recent years, the Compensation Committee has awarded only grants of RSUs and PSUs. Awards of restricted stock, RSUs, and PSUs are currently outstanding under the Plan.

The RSUs granted to employees vest either three or five years from the grant date and are then paid out in shares of common stock. Under the terms of the RSU awards, grantees receive dividend equivalents in the form of additional RSUs that vest and are paid out on the same date as the original RSU grant. The PSUs vest at the end of a performance period of three years that begins with the year of the grant, are paid out in shares of common stock shortly after the vesting date, and do not carry rights to dividends or dividend equivalents prior to vesting. Shares ultimately paid out under PSU grants are dependent on the achievement of predetermined performance measures established by the Compensation Committee and can range from zero to 150% of the stated award. The Company’s outside directors receive RSUs following the annual meeting of shareholders. RSUs awarded to outside directors vest in one or three years from the grant date. Restricted shares vest upon the individual’s retirement from service as a director.

During the three-month periods ended June 30, 2021 and 2020, Universal issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

	Three Months Ended June 30,
(in thousands, except share fair value)	2021		2020
RSUs:
Number granted	58,160		63,050
Grant date fair value	$	57.41	$	43.66
PSUs:
Number granted	48,650		63,050
Grant date fair value	$	47.95	$	34.33

Fair value expense for restricted stock units is recognized ratably over the period from grant date to the earlier of: (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For employees who are already eligible to retire at the date an award is granted, the total fair value of all non-forfeitable awards is recognized as expense at the date of grant. As a result, Universal typically incurs higher stock compensation expense in the first quarter of each fiscal year when grants are awarded to officers than in the other three quarters. For PSUs, the Company generally recognizes fair value expense ratably over the performance and vesting period based on management’s judgment of the ultimate award that is likely to be paid out based on the achievement of the predetermined performance measures. The Company accounts for forfeitures of stock-based awards as they occur. For the three-month periods ended June 30, 2021 and 2020, the Company recorded total stock-based compensation expense of approximately $3.0 million and $2.6 million, respectively. The Company expects to recognize stock-based compensation expense of approximately $3.1 million during the remaining nine months of fiscal year 2022.

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Operating Segments

3 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Operating Segments

OPERATING SEGMENTS

As a result of recent acquisitions of plant-based ingredients companies, during the three months ended December 31, 2020 management evaluated the Company’s global business activities, including product and service offerings to its customers, as well as senior management’s operational and financial responsibilities. This assessment included an analysis of how its chief operating decision maker measures business performance and allocates resources. As a result of this analysis, senior management determined the Company conducts operations across two reportable operating segments, Tobacco Operations and Ingredients Operations.

The Tobacco Operations segment activities 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. Some of these tobacco types are also increasingly used in the manufacture of non-combustible tobacco products that are intended to provide consumers with an alternative to traditional combustible products. The Tobacco Operations segment also provides physical and chemical product testing and smoke testing for tobacco customers. A substantial portion of the Company’s Tobacco Operations' revenues are derived from sales to a limited number of large, multinational cigarette and cigar manufacturers.

The Ingredients Operations segment provides its customers with a broad variety of plant-based ingredients for both human and pet consumption. The Ingredients Operations segment utilizes a variety of value-added manufacturing processes converting raw materials into a wide spectrum of fruit and vegetable juices, concentrates, and dehydrated products. Customers for the Ingredients Operations segment include large multinational food and beverage companies, as well as smaller independent entities. FruitSmart, Silva, and CIFI are the primary operations for the Ingredients Operations segment. FruitSmart manufactures fruit and vegetable juices, purees, concentrates, essences, fibers, seeds, seed oils, and seed powders. Silva is primarily a dehydrated product manufacturer of fruit and vegetable based flakes, dices, granules, powders, and blends. In fiscal year 2021, the Company announced the wind-down of CIFI, a greenfield operation that primarily manufactured both dehydrated and liquid sweet potato products.

The Company currently evaluates the performance of its segments based on operating income after allocated overhead expenses, plus equity in the pretax earnings of unconsolidated affiliates. Operating results for the Company’s reportable segments

for each period presented in the consolidated statements of income and comprehensive income were as follows, including a recast of the new reportable operating segments presentation for all periods presented below:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
SALES AND OTHER OPERATING REVENUES
Tobacco Operations	$	293,843	$	298,373
Ingredients Operations	56,186		17,438
Consolidated sales and other operating revenues	$	350,029	$	315,811
OPERATING INCOME
Tobacco Operations	$	8,889	$	5,049
Ingredients Operations	4,349		(701)
Segment operating income	13,238		4,348
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1)	(609)		7
Restructuring and impairment costs (2)	(2,024)		—
Add: Other income (loss)(3)	—		4,173
Consolidated operating income	$	10,605	$	8,528

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

(2)Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. See Note 4 for additional information.

(3)Other income represents the reversal of a portion of the contingent consideration liability associated with the acquisition of FruitSmart. See Note 12 for additional information.

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Jun. 30, 2021

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss), Net of Tax

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

    The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the three months ended June 30, 2021 and 2020:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Foreign currency translation:
Balance at beginning of year	$	(35,135)	$	(42,923)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on foreign currency translation	1,719		2,303
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests	(29)		(156)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	1,690		2,147
Balance at end of period	$	(33,445)	$	(40,776)
Foreign currency hedge:
Balance at beginning of year	$	(414)	$	(12,226)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(1,566) and $255)	5,698		(601)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(108) and $(152)) (1)	284		560
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	5,982		(41)
Balance at end of period	$	5,568	$	(12,267)
Interest rate hedge:
Balance at beginning of year	$	(19,480)	$	(27,402)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $293 and $776)	(1,103)		(2,921)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(392) and $(312)) (2)	1,477		1,172
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	374		(1,749)
Balance at end of period	$	(19,106)	$	(29,151)
Pension and other postretirement benefit plans:
Balance at beginning of year	$	(52,008)	$	(69,046)
Other comprehensive income (loss) attributable to Universal Corporation:
Amortization included in earnings (net of tax expense (benefit) of $(175) and $(193))(3)	759		108
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	759		108
Balance at end of period	$	(51,249)	$	(68,938)
Total accumulated other comprehensive loss at end of period	$	(98,232)	$	(151,132)

(1)     Gain (loss) on foreign currency cash flow hedges related to forecast purchases of tobacco and crop input sales is reclassified from accumulated other comprehensive income (loss) to cost of goods sold when the tobacco is sold to customers. See Note 11 for additional information.

(2) Gain (loss) on interest rate cash flow hedges is reclassified from accumulated other comprehensive income (loss) to interest expense when the related interest payments are made on the underlying debt, or as amortized to interest expense over the period to original maturity for terminated swap agreements. See Note 11 for additional information.

(3)     This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 13 for additional information.

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Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries

3 Months Ended

Jun. 30, 2021

Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]

Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries

CHANGES IN SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS IN SUBSIDIARIES

A reconciliation of the changes in Universal Corporation shareholders’ equity and noncontrolling interests in subsidiaries for the three months ended June 30, 2021 and 2020 is as follows:

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of year	$	1,307,299	$	41,126	$	1,348,425	$	1,246,665	$	42,619	$	1,289,284
Changes in common stock
Accrual of stock-based compensation	2,966		—		2,966		2,633		—		2,633
Withholding of shares from stock-based compensation for grantee income taxes	(2,432)		—		(2,432)		(1,930)		—		(1,930)
Dividend equivalents on RSUs	264		—		264		244		—		244
Changes in retained earnings
Net income	6,357		(2,445)		3,912		7,274		(374)		6,900
Cash dividends declared
Common stock	(19,170)		—		(19,170)		(18,863)		—		(18,863)
Dividend equivalents on RSUs	(264)		—		(264)		(244)		—		(244)
Other comprehensive income (loss)	8,805		29		8,834		465		(156)		309
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(980)		(980)		—		—		—
Balance at end of period	$	1,303,825	$	37,730	$	1,341,555	$	1,236,244	$	42,089	$	1,278,333

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Business Combinations Business Combinations (Tables)

3 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed - Silva Acquisition [Table Text Block]

The following table summarizes the preliminary purchase price allocation of the assets acquired and liabilities assumed on October 1, 2020.

(in thousands of dollars)
Assets
Cash and cash equivalents	$	8,126
Accounts receivable, net	17,885
Advances to suppliers, net	3,011
Inventory	33,162
Other current assets	833
Property, plant and equipment (net)	24,437
Intangibles
Customer relationships	53,000
Trade names	7,800
Goodwill	46,144
Total assets acquired	194,398
Liabilities
Accounts payable and accrued expenses	11,683
Accrued compensation	3,350
Income taxes payable	946
Deferred income taxes	14,419
Total liabilities assumed	30,398
Total assets acquired and liabilities assumed	$	164,000

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Revenue from Contract with Customer (Tables)

3 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by significant revenue-generating category:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Tobacco sales	$	270,264	$	275,142
Ingredient sales	51,888		16,356
Processing revenue	16,696		16,300
Other sales and revenue from contracts with customers	10,765		7,602
Total revenue from contracts with customers	349,613		315,400
Other operating sales and revenues	416		411
Consolidated sales and other operating revenues	$	350,029	$	315,811

    Other operating sales and revenues consists principally of interest on advances to suppliers.

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Earnings Per Share (Tables)

3 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended June 30,
(in thousands, except share and per share data)	2021		2020
Basic Earnings Per Share
Numerator for basic earnings per share
Net income attributable to Universal Corporation	$	6,357	$	7,274
Denominator for basic earnings per share
Weighted average shares outstanding	24,694,489		24,602,610
Basic earnings per share	$	0.26	$	0.30
Diluted Earnings Per Share
Numerator for diluted earnings per share
Net income attributable to Universal Corporation	$	6,357	$	7,274
Denominator for diluted earnings per share:
Weighted average shares outstanding	24,694,489		24,602,610
Effect of dilutive securities
Employee and outside director share-based awards	157,662		100,969
Denominator for diluted earnings per share	24,852,151		24,703,579
Diluted earnings per share	$	0.26	$	0.29

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Goodwill and Other Intangibles Goodwill and Other Intangibles (Tables)

3 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

The Company's changes in goodwill at June 30, 2021 and 2020 consisted of the following:

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Balance at beginning of fiscal year	$	173,051	$	126,826
Foreign currency translation adjustment	(10)		36
Balance at end of period	$	173,041	$	126,862

Schedule of Finite-Lived Intangible Assets [Table Text Block]

The Company's intangible assets subject to amortization consisted of the following at June 30, 2021 and 2020:

(in thousands, except useful life)				June 30,
				2021						2020
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships(1)	11	—	13	$	62,500	$	(4,710)	$	57,790	$	9,500	$	(365)	$	9,135
Trade names(1)		5		11,100		(2,160)		8,940		3,300		(330)		2,970
Developed technology(1)		3		4,800		(2,400)		2,400		4,800		(800)		4,000
Noncompetition agreements(1)		5		1,000		(300)		700		1,000		(100)		900
Other		5		777		(703)		74		734		(625)		109
Total intangible assets				$	80,177	$	(10,273)	$	69,904	$	19,334	$	(2,220)	$	17,114

(1) On October 1, 2020 the Company acquired 100% of the capital stock of Silva for approximately $164.0 million in cash and $5.9 million of working capital on-hand at the date of acquisition. The Silva acquisition resulted in $60.8 million of intangibles. See Note 3 for additional information.

Intangible assets are amortized on a straight-line basis over the asset's estimated useful economic life as noted above.

Finite-lived Intangible Assets Amortization Expense [Table Text Block]

The Company's amortization expense for intangible assets for the three months ended June 30, 2021 and 2020 was:

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Amortization Expense	$	2,403	$	808

Amortization expense for the developed technology intangible asset is recorded in cost of goods sold in the consolidated income statements of income. The amortization expense for the other intangible assets is recorded in selling, general, and administrative expenses in the consolidated statements of income.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

As of June 30, 2021, the expected future amortization expense for intangible assets is as follows:

Fiscal Year (in thousands of dollars)
2022 (excluding the three months ended June 30, 2021)	$	7,216
2023	9,204
2024	7,969
2025	8,534
2026 and thereafter	36,981
Total expected future amortization expense	$	69,904

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Leases of Lessess (Tables)

3 Months Ended

Jun. 30, 2021

Leases of Lessees [Abstract]

Schedule of supplemental balance sheet information related to leases [Table Text Block]

The following table sets forth the right-of-use assets and lease liabilities for operating leases included in the Company’s consolidated balance sheet:

(in thousands of dollars)	June 30, 2021		June 30, 2020		March 31, 2021
Assets
Operating lease right-of-use assets	$	31,281	$	37,576	$	31,230
Liabilities
Current portion of operating lease liabilities	$	7,998	$	9,914	$	7,898
Long-term operating lease liabilities	20,826		24,040		19,725
Total operating lease liabilities	$	28,824	$	33,954	$	27,623

Schedule of supplemental income statement information related to leases [Table Text Block]

The following table sets forth the location and amount of operating lease costs included in the Company's consolidated statement of income:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Income Statement Location
Cost of goods sold	$	2,578	$	2,911
Selling, general, and administrative expenses	2,305		2,190
Total operating lease costs(1)	$	4,883	$	5,101

(1)Includes variable operating lease costs.

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

The following table reconciles the undiscounted cash flows to the operating lease liabilities in the Company’s consolidated balance sheet:

(in thousands of dollars)	June 30, 2021
Maturity of Operating Lease Liabilities
2022 (excluding the three months ended June 30, 2021)	$	6,889
2023	7,279
2024	5,461
2025	4,560
2026	2,656
2027 and thereafter	5,805
Total undiscounted cash flows for operating leases	$	32,650
Less: Imputed interest	(3,826)
Total operating lease liabilities	$	28,824

Supplemental information related to operating leases [Table Text Block]

The following table sets forth supplemental information related to operating leases:

	Three Months Ended June 30,
(in thousands, except lease term and incremental borrowing rate)	2021			2020
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,777		$	3,028
Right-of-use assets obtained in exchange for new operating leases	2,741			1,023
Weighted Average Remaining Lease Term (years)	5.54			5.55
Weighted Average Collateralized Incremental Borrowing Rate	4.12		%	4.04		%

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Derivatives And Hedging Activities (Tables)

3 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notional Amount of Forward Contracts

The aggregate U.S. dollar notional amount of forward and option contracts entered into for these purposes during the three-month periods in fiscal years 2022 and 2021 was as follows:

	Three Months Ended June 30,
(in millions of dollars)	2021		2020
Tobacco purchases	$	42.0	$	30.2
Processing costs	10.2		8.0
Crop input sales	20.8		23.5
Total	$	73.0	$	61.7

Effect Of Derivative Financial Instruments On The Consolidated Statements Of Income

The table below outlines the effects of the Company’s use of derivative financial instruments on the consolidated statements of income:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Cash Flow Hedges - Interest Rate Swap Agreements
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	(1,396)	$	(3,697)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(2,223)	$	(1,838)
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	$	353	$	354
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings	Interest expense
Ineffective Portion of Hedge
Gain (loss) recognized in earnings	$	—	$	—
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses
Hedged Item
Description of hedged item	Floating rate interest payments on term loan
Cash Flow Hedges - Foreign Currency Exchange Contracts
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	8,233	$	(1,447)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(516)	$	(734)
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings	Cost of goods sold
Ineffective Portion and Early De-designation of Hedges
Gain (loss) recognized in earnings	$	668	$	—
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses
Hedged Item
Description of hedged item	Forecast purchases of tobacco in Brazil and Africa
Derivatives Not Designated as Hedges - Foreign Currency Exchange Contracts
Gain (loss) recognized in earnings	$	4,604	$	(144)
Location of gain (loss) recognized in earnings	Selling, general and administrative expenses

Effect Of Derivative Financial Instruments On The Consolidated Balance Sheets

The table below outlines the effects of the Company’s derivative financial instruments on the consolidated balance sheets at June 30, 2021 and 2020, and March 31, 2021:

	Derivatives in a Fair Value Asset Position							Derivatives in a Fair Value Liability Position
	Balance Sheet Location	Fair Value as of						Balance Sheet Location	Fair Value as of
(in thousands of dollars)		June 30, 2021		June 30, 2020		March 31, 2021			June 30, 2021		June 30, 2020		March 31, 2021
Derivatives Designated as Hedging Instruments
Interest rate swap agreements	Other non-current assets	$	—	$	—	$	—	Other long-term liabilities	$	24,892	$	39,022	$	25,719
Foreign currency exchange contracts	Other current assets	5,423		571		1,137		Accounts payable and accrued expenses	2,063		1,390		1,031
Total		$	5,423	$	571	$	1,137		$	26,955	$	40,412	$	26,750
Derivatives Not Designated as Hedging Instruments
Foreign currency exchange contracts	Other current assets	$	3,124	$	149	$	435	Accounts payable and accrued expenses	$	88	$	702	$	791
Total		$	3,124	$	149	$	435		$	88	$	702	$	791

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Fair Value Measurements (Tables)

3 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Financial Assets And Liabilities Measured At Fair Value On Recurring Basis [Table Text Block]

At June 30, 2021 and 2020, and at March 31, 2021, the Company had certain financial assets and financial liabilities that were required to be measured and reported at fair value on a recurring basis. These assets and liabilities are listed in the tables below and are classified based on how their values were determined under the fair value hierarchy or the NAV practical expedient:

	June 30, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	1,992	$	—	$	—	$	—	$	1,992
Trading securities associated with deferred compensation plans	—		15,735		—		—		15,735
Interest rate swap agreements	—		—		—		—		—
Foreign currency exchange contracts	—		—		8,547		—		8,547
Total financial assets measured and reported at fair value	$	1,992	$	15,735	$	8,547	$	—	$	26,274
Liabilities
Acquisition-related contingent consideration obligations - short term	$	—	$	—	$	—	$	2,532	$	2,532
Interest rate swap agreements	—		—		24,892		—		24,892
Foreign currency exchange contracts	—		—		2,151		—		2,151
Total financial liabilities measured and reported at fair value	$	—	$	—	$	27,043	$	2,532	$	29,575

	June 30, 2020
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	4,013	$	—	$	—	$	—	$	4,013
Trading securities associated with deferred compensation plans	—		13,963		—		—		13,963
Foreign currency exchange contracts	—		—		720		—		720
Total financial assets measured and reported at fair value	$	4,013	$	13,963	$	720	$	—	$	18,696
Liabilities
Acquisition-related contingent consideration obligations - long term	$	—	$	—	$	—	$	2,532	2,532
Interest rate swap agreements	—		—		39,022		—		39,022
Foreign currency exchange contracts	—		—		2,092		—		2,092
Total financial liabilities measured and reported at fair value	$	—	$	—	$	41,114	$	2,532	$	43,646

	March 31, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	1,992	$	—	$	—	$	—	$	1,992
Trading securities associated with deferred compensation plans	—		15,735		—		—		15,735
Foreign currency exchange contracts	—		—		1,572		—		1,572
Total financial assets measured and reported at fair value	$	1,992	$	15,735	$	1,572	$	—	$	19,299
Liabilities
Acquisition-related contingent consideration obligations - long-term	$	—	$	—	$	—	$	2,532	$	2,532
Interest rate swap agreements	—		—		25,719		—		25,719
Foreign currency exchange contracts	—		—		1,822		—		1,822
Total financial liabilities measured and reported at fair value	$	—	$	—	$	27,541	$	2,532	$	30,073

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

A reconciliation of the change in the balance of the acquisition-related contingent consideration obligation (Level 3) for the three months ended June 30, 2021 and 2020 is provided below.

(in thousands of dollars)	Three Months Ended June 30,
	2021		2020
Balance beginning of year	$	2,532	$	6,705
Change in fair value of contingent consideration liability	—		(4,173)
Balance at end of period	$	2,532	$	2,532

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

The following table summarizes the fair and carrying value of the Company’s long-term debt, including the current portion at each of the balance sheet dates June 30, 2021, and 2020 and March 31, 2021:

(in millions of dollars)	June 30, 2021		June 30, 2020		March 31, 2021
Fair market value of long term obligations	$	517	$	370	$	517
Carrying value of long term obligations	$	520	$	370	$	520

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Pension And Other Postretirement Benefit Plans (Tables)

3 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

Components of Company's Net Periodic Benefit Cost

The components of the Company’s net periodic benefit cost were as follows:

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended June 30,				Three Months Ended June 30,
(in thousands of dollars)	2021		2020		2021		2020
Service cost	$	1,650	$	1,541	$	47	$	48
Interest cost	2,259		2,454		239		287
Expected return on plan assets	(3,385)		(3,677)		(22)		(24)
Net amortization and deferral	976		1,121		(115)		(143)
Net periodic benefit cost	$	1,500	$	1,439	$	149	$	168

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Stock-Based Compensation (Tables)

3 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Awards Issued During The Period

During the three-month periods ended June 30, 2021 and 2020, Universal issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

	Three Months Ended June 30,
(in thousands, except share fair value)	2021		2020
RSUs:
Number granted	58,160		63,050
Grant date fair value	$	57.41	$	43.66
PSUs:
Number granted	48,650		63,050
Grant date fair value	$	47.95	$	34.33

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Operating Segments (Tables)

3 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Operating Results For The Company's Reportable Segments

Operating results for the Company’s reportable segments

for each period presented in the consolidated statements of income and comprehensive income were as follows, including a recast of the new reportable operating segments presentation for all periods presented below:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
SALES AND OTHER OPERATING REVENUES
Tobacco Operations	$	293,843	$	298,373
Ingredients Operations	56,186		17,438
Consolidated sales and other operating revenues	$	350,029	$	315,811
OPERATING INCOME
Tobacco Operations	$	8,889	$	5,049
Ingredients Operations	4,349		(701)
Segment operating income	13,238		4,348
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1)	(609)		7
Restructuring and impairment costs (2)	(2,024)		—
Add: Other income (loss)(3)	—		4,173
Consolidated operating income	$	10,605	$	8,528

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

(2)Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. See Note 4 for additional information.

(3)Other income represents the reversal of a portion of the contingent consideration liability associated with the acquisition of FruitSmart. See Note 12 for additional information.

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Jun. 30, 2021

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) attributable to the Company for the three months ended June 30, 2021 and 2020:

	Three Months Ended June 30,
(in thousands of dollars)	2021		2020
Foreign currency translation:
Balance at beginning of year	$	(35,135)	$	(42,923)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on foreign currency translation	1,719		2,303
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests	(29)		(156)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	1,690		2,147
Balance at end of period	$	(33,445)	$	(40,776)
Foreign currency hedge:
Balance at beginning of year	$	(414)	$	(12,226)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(1,566) and $255)	5,698		(601)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(108) and $(152)) (1)	284		560
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	5,982		(41)
Balance at end of period	$	5,568	$	(12,267)
Interest rate hedge:
Balance at beginning of year	$	(19,480)	$	(27,402)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $293 and $776)	(1,103)		(2,921)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(392) and $(312)) (2)	1,477		1,172
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	374		(1,749)
Balance at end of period	$	(19,106)	$	(29,151)
Pension and other postretirement benefit plans:
Balance at beginning of year	$	(52,008)	$	(69,046)
Other comprehensive income (loss) attributable to Universal Corporation:
Amortization included in earnings (net of tax expense (benefit) of $(175) and $(193))(3)	759		108
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	759		108
Balance at end of period	$	(51,249)	$	(68,938)
Total accumulated other comprehensive loss at end of period	$	(98,232)	$	(151,132)

(1)     Gain (loss) on foreign currency cash flow hedges related to forecast purchases of tobacco and crop input sales is reclassified from accumulated other comprehensive income (loss) to cost of goods sold when the tobacco is sold to customers. See Note 11 for additional information.

(2) Gain (loss) on interest rate cash flow hedges is reclassified from accumulated other comprehensive income (loss) to interest expense when the related interest payments are made on the underlying debt, or as amortized to interest expense over the period to original maturity for terminated swap agreements. See Note 11 for additional information.

(3)     This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 13 for additional information.

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Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries (Tables)

3 Months Ended

Jun. 30, 2021

Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]

Reconciliation Of Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries

A reconciliation of the changes in Universal Corporation shareholders’ equity and noncontrolling interests in subsidiaries for the three months ended June 30, 2021 and 2020 is as follows:

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of year	$	1,307,299	$	41,126	$	1,348,425	$	1,246,665	$	42,619	$	1,289,284
Changes in common stock
Accrual of stock-based compensation	2,966		—		2,966		2,633		—		2,633
Withholding of shares from stock-based compensation for grantee income taxes	(2,432)		—		(2,432)		(1,930)		—		(1,930)
Dividend equivalents on RSUs	264		—		264		244		—		244
Changes in retained earnings
Net income	6,357		(2,445)		3,912		7,274		(374)		6,900
Cash dividends declared
Common stock	(19,170)		—		(19,170)		(18,863)		—		(18,863)
Dividend equivalents on RSUs	(264)		—		(264)		(244)		—		(244)
Other comprehensive income (loss)	8,805		29		8,834		465		(156)		309
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(980)		(980)		—		—		—
Balance at end of period	$	1,303,825	$	37,730	$	1,341,555	$	1,236,244	$	42,089	$	1,278,333

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Business Combinations Business Combinations (Narrative) (Details) - USD ($) $ in Thousands	Oct. 01, 2020	Jun. 30, 2021	Jun. 30, 2020
Business Acquisition [Line Items]
Restricted cash (Other noncurrent assets)		$ 6,000	$ 0
Silva, International [Member]
Business Acquisition [Line Items]
Working capital adjustments	$ 5,900
Purchase of business, net of cash held by the business	$ 164,000
Business acquisition percentage of capital stock Acquired	100.00%
Restricted cash (Other noncurrent assets)		$ 6,000

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Business Combinations Business Combinations Assets Acquired and Liabilities Assumed (Silva) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Oct. 01, 2020	Jun. 30, 2020	Mar. 31, 2020
Business Acquisition [Line Items]
Goodwill, net	$ 173,041	$ 173,051		$ 126,862	$ 126,826
Silva, International [Member]
Business Acquisition [Line Items]
Cash and cash equivalents			$ 8,126
Accounts receivable, net			17,885
Advances to suppliers, net			3,011
Inventory			33,162
Other current assets			833
Property, plant and equipment (net)			24,437
Trade names			7,800
Customer relationships			53,000
Goodwill, net			46,144
Total assets acquired			194,398
Accounts payable and accrued expenses			11,683
Accrued compensation			3,350
Income taxes payable			946
Deferred income taxes			14,419
Total liabilities assumed			30,398
Total assets acquired and liabilities assumed			$ 164,000

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Restructuring and Related Activities (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2021	Mar. 31, 2021
Restructuring and Related Activities [Abstract]
Severance Costs	$ 1,500
Impairment of Long-Lived Assets Held-for-use	$ 500	$ 16,100

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Revenue from Contract with Customer (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 349,613	$ 315,400
Other operating sales and revenues	416	411
Sales and other operating revenues	350,029	315,811
Manufactured Product [Member] | Tobacco Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	270,264	275,142
Manufactured Product [Member] | Food Ingredient Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	51,888	16,356
Processing revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	16,696	16,300
Other sales and revenue from contracts with customers [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 10,765	$ 7,602

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Other Contingent Liabilities And Other Matters (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2021
Other Contingent Liabilities and Other Matters [Line Items]
Other contingent liabilities	$ 1,000
Net provision for losses (recoveries) on advances to suppliers	(328)	$ 57
Long-term Line of Credit	150,000
Loans Payable	150,000
Stock repurchase program authorized amount	100,000
Stock repurchase program remaining authorized repurchase amount	100,000
Five-year term loan [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Issuance of long-term debt	75,000
Loans Payable	225,000
Seven-year term loan [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Issuance of long-term debt	75,000
Loans Payable	295,000
Advances to suppliers [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Advances to suppliers current and non-current	92,000	83,000	$ 144,000
Valuation allowances	18,000	16,000	18,000
Net provision for losses (recoveries) on advances to suppliers	(300)	100
Recoverable value added tax credits [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Aggregate balance of recoverable value added tax credits	61,000	54,000	49,000
Valuation allowances	19,000	$ 17,000	$ 19,000
Santa Catarina [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits	9,000
Reduced Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits	9,000
Loss contingency amount accrued	0
Santa Catarina [Member] | Minimum [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Estimate of possible loss on remaining VAT audit assessment	0
Santa Catarina [Member] | Maximum [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Estimate of possible loss on remaining VAT audit assessment	9,000
Parana [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits	11,000
Reduced Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits	3,000
Loss contingency amount accrued	0
Parana [Member] | Minimum [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Estimate of possible loss on remaining VAT audit assessment	0
Parana [Member] | Maximum [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Estimate of possible loss on remaining VAT audit assessment	$ 3,000

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Earnings Per Share (Computation Of Basic And Diluted Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Numerator for basic earnings per share
Net income attributable to Universal Corporation	$ 6,357	$ 7,274
Denominator for basic earnings per share
Weighted average shares outstanding	24,694,489	24,602,610
Basic earnings per share	$ 0.26	$ 0.30
Numerator for diluted earnings per share
Net income attributable to Universal Corporation	$ 6,357	$ 7,274
Denominator for diluted earnings per share:
Weighted average shares outstanding	24,694,489	24,602,610
Employee and outside director share-based awards	157,662	100,969
Denominator for diluted earnings per share	24,852,151	24,703,579
Diluted earnings per share	$ 0.26	$ 0.29

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Income Tax Disclosure [Line Items]
Effective income tax rate	24.00%
Interest expense	$ 6,208	$ 6,810
Income Tax Expense (Benefit)		(5,000)
Unresolved tax matter foreign jurisdiction [Member]
Income Tax Disclosure [Line Items]
Interest expense	$ 1,800
Tax benefit - Hybrid Dividend [Member]
Income Tax Disclosure [Line Items]
Effective income tax rate reconciliation after other adjustments, percent	24.00%
Income Tax Expense (Benefit)		$ (4,400)

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Goodwill and Other Intangibles Goodwill and Other Intangibles (Narrative) (Details) - Silva, International [Member] $ in Thousands	Oct. 01, 2020 USD ($)
Goodwill [Line Items]
Business acquisition percentage of capital stock Acquired	100.00%
Purchase of business, net of cash held by the business	$ 164,000
Business combination finite-lived intangibles	60,800
Working capital adjustments	$ 5,900

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Goodwill and Other Intangibles Change in Goodwill Balance (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Balance at beginning of year	$ 173,051	$ 126,826
Foreign currency translation adjustment	(10)	36
Balance at end of period	$ 173,041	$ 126,862

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Goodwill and Other Intangibles Intangible Assets (Details) - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2021	Jun. 30, 2020
Finite-Lived Intangible Assets [Line Items]
Gross carrying value		$ 80,177	$ 19,334
Accumulated amortization		(10,273)	(2,220)
Net carrying value		69,904	17,114
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	[1]	62,500	9,500
Accumulated amortization	[1]	(4,710)	(365)
Net carrying value	[1]	$ 57,790	9,135
Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life		13 years
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life		11 years
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life		5 years
Gross carrying value	[1]	$ 11,100	3,300
Accumulated amortization	[1]	(2,160)	(330)
Net carrying value	[1]	$ 8,940	2,970
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life		3 years
Gross carrying value	[1]	$ 4,800	4,800
Accumulated amortization	[1]	(2,400)	(800)
Net carrying value	[1]	$ 2,400	4,000
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life		5 years
Gross carrying value	[1]	$ 1,000	1,000
Accumulated amortization	[1]	(300)	(100)
Net carrying value	[1]	$ 700	900
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life		5 years
Gross carrying value		$ 777	734
Accumulated amortization		(703)	(625)
Net carrying value		$ 74	$ 109

[1] (1) On October 1, 2020 the Company acquired 100% of the capital stock of Silva for approximately $164.0 million in cash and $5.9 million of working capital on-hand at the date of acquisition. The Silva acquisition resulted in $60.8 million of intangibles. See Note 3 for additional information.

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Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 2,403	$ 808

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Goodwill and Other Intangibles Future Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
2022	$ 7,216
2023	9,204
2024	7,969
2025	8,534
2026 and thereafter	36,981
Total expected future amortization expense	$ 69,904	$ 17,114

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Leases of Lessees (Narrative) (Details) $ in Millions	Jun. 30, 2021 USD ($)
Additional operating leases that have not yet commenced	$ 0.0

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Supplemental balance sheet information related to leases (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020
Operating lease right-of-use assets	$ 31,281	$ 31,230	$ 37,576
Current portion of operating lease liabilities	7,998	7,898	9,914
Long-term operating lease liabilities	20,826	19,725	24,040
Total operating lease liabilities	$ 28,824	$ 27,623	$ 33,954

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Supplemental income statement information related to leases (Details) - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2021	Jun. 30, 2020
Supplemental income statement information related to leases [Line Items]
Operating Lease, Cost	[1]	$ 4,883	$ 5,101
Cost of goods sold [Member]
Supplemental income statement information related to leases [Line Items]
Operating Lease, Cost		2,578	2,911
Selling, General and Administrative Expenses [Member]
Supplemental income statement information related to leases [Line Items]
Operating Lease, Cost		$ 2,305	$ 2,190

[1] Includes variable operating lease costs.

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Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020
2022 (excluding the three months ended June 30, 2021)	$ 6,889
2023	7,279
2024	5,461
2025	4,560
2026	2,656
2027 and thereafter	5,805
Total undiscounted cash flows for operating leases	32,650
Less: Imputed interest	(3,826)
Total operating lease liabilities	$ (28,824)	$ (27,623)	$ (33,954)

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Supplemental information related to leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash paid for amounts included in the measurement of operating lease liabilities	$ 2,777	$ 3,028
Right-of-use assets obtained in exchange for new operating leases	$ 2,741	$ 1,023
Weighted Average Remaining Lease Term (years)	5 years 6 months 14 days	5 years 6 months 18 days
Weighted Average Collateralized Incremental Borrowing Rate	4.12%	4.04%

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Derivatives And Hedging Activities (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Feb. 26, 2019
Derivative [Line Items]
Repayments of Lines of Credit	$ 150,000
Loans Payable	150,000
Foreign Exchange Forward [Member]
Derivative [Line Items]
Notional amount of derivative contracts	16,700	$ 16,600	$ 11,800
Cash Flow Hedging [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Notional amount of derivative contracts	370,000
Derivative, Fair Value, Net	700			$ 5,400
Cash Flow Hedging [Member] | Foreign Exchange Forward [Member]
Derivative [Line Items]
Net unrealized gain (loss) on foreign currency derivatives designated as cash flow hedges	$ 7,300

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Notional Amount of Forward Contracts (Details) - Forward Foreign Currency Exchange Contract [Member] - USD ($) $ in Millions	Jun. 30, 2021	Jun. 30, 2020
Derivative [Line Items]
Notional amount of derivative contracts	$ 73.0	$ 61.7
Derivatives related to tobacco purchases [Member] | Tobacco purchases [Member]
Derivative [Line Items]
Notional amount of derivative contracts	42.0	30.2
Derivatives related to processing costs [Member] | Processing costs [Member]
Derivative [Line Items]
Notional amount of derivative contracts	10.2	8.0
Derivatives related to processing costs [Member] | Crop input sales [Member]
Derivative [Line Items]
Notional amount of derivative contracts	$ 20.8	$ 23.5

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Derivatives And Hedging Activities (Effect Of Derivative Financial Instruments On The Consolidated Statements Of Income) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Derivatives Designated As Hedges [Member] | Interest Rate Swap Agreements [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recorded in accumulated other comprehensive loss	$ (1,396)	$ (3,697)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	(2,223)	(1,838)
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	353	354
Derivatives Designated As Hedges [Member] | Interest Rate Swap Agreements [Member] | Selling, General And Administrative Expenses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in earnings from ineffective portion and early de-designation of cash flow hedges	0	0
Derivatives Designated As Hedges [Member] | Forward Foreign Currency Exchange Contracts [Member] | Cost of goods sold [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recorded in accumulated other comprehensive loss	8,233	(1,447)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	(516)	(734)
Derivatives Designated As Hedges [Member] | Forward Foreign Currency Exchange Contracts [Member] | Selling, General And Administrative Expenses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in earnings from ineffective portion and early de-designation of cash flow hedges	668	0
Derivatives Not Designated As Hedges [Member] | Forward Foreign Currency Exchange Contracts [Member] | Selling, General And Administrative Expenses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in earnings	$ 4,604	$ (144)

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Derivatives And Hedging Activities (Effect Of Derivative Financial Instruments On The Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020
Derivative [Line Items]
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments	$ 5,423	$ 1,137	$ 571
Derivatives in a Fair Value Liability Position Designated as Hedging Instruments	26,955	26,750	40,412
Derivatives in a Fair Value Asset Position Not Designated as Hedging Instruments	3,124	435	149
Derivatives in a Fair Value Liability Position Not Designated as Hedging Instruments	88	791	702
Interest Rate Swap Agreements [Member] | Other Non-Current Assets [Member]
Derivative [Line Items]
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments	0	0	0
Interest Rate Swap Agreements [Member] | Other Long-Term Liabilities [Member]
Derivative [Line Items]
Derivatives in a Fair Value Liability Position Designated as Hedging Instruments	24,892	25,719	39,022
Forward Foreign Currency Exchange Contract [Member] | Other Current Assets [Member]
Derivative [Line Items]
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments	5,423	1,137	571
Derivatives in a Fair Value Asset Position Not Designated as Hedging Instruments	3,124	435	149
Forward Foreign Currency Exchange Contract [Member] | Accounts Payable and Accrued Expenses [Member]
Derivative [Line Items]
Derivatives in a Fair Value Liability Position Designated as Hedging Instruments	2,063	1,031	1,390
Derivatives in a Fair Value Liability Position Not Designated as Hedging Instruments	$ 88	$ 791	$ 702

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Fair Value Measurements (Narrative) (Details) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Mar. 31, 2020	Jan. 01, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of Long-Lived Assets Held-for-use	$ 500,000	$ 16,100,000
FruitSmart, Inc. [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value contingent consideration liability			$ 6,700,000
Change in contingent consideration liability	4,200,000
Nonrecurring fair value measurements [Member] | UNITED STATES
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired fixed assets	$ 5,000,000
Nonrecurring fair value measurements [Member] | TANZANIA, UNITED REPUBLIC OF
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired fixed assets			$ 17,000,000

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Fair Value Measurements (Financial Assets And Liabilities Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020
Assets:
Money market funds	$ 1,992	$ 1,992	$ 4,013
Trading securities associated with deferred compensation plans	15,735	15,735	13,963
Forward foreign currency exchange contracts	8,547	1,572	720
Total financial assets measured and reported at fair value	26,274	19,299	18,696
Liabilities:
Business Combination, Contingent Consideration, Liability, Current	2,532
Business Combination, Contingent Consideration, Liability, Noncurrent		2,532	2,532
Interest Rate Derivative Liabilities, at Fair Value	24,892	25,719	39,022
Forward foreign currency exchange contracts	2,151	1,822	2,092
Total financial liabilities measured and reported at fair value	29,575	30,073	43,646
Net Asset Value [Member]
Assets:
Money market funds	1,992	1,992	4,013
Trading securities associated with deferred compensation plans	0	0	0
Forward foreign currency exchange contracts	0	0	0
Total financial assets measured and reported at fair value	1,992	1,992	4,013
Liabilities:
Business Combination, Contingent Consideration, Liability, Current	0
Business Combination, Contingent Consideration, Liability, Noncurrent		0	0
Interest Rate Derivative Liabilities, at Fair Value	0	0	0
Forward foreign currency exchange contracts	0	0	0
Total financial liabilities measured and reported at fair value	0	0	0
Level 1 [Member]
Assets:
Money market funds	0	0	0
Trading securities associated with deferred compensation plans	15,735	15,735	13,963
Forward foreign currency exchange contracts	0	0	0
Total financial assets measured and reported at fair value	15,735	15,735	13,963
Liabilities:
Business Combination, Contingent Consideration, Liability, Current	0
Business Combination, Contingent Consideration, Liability, Noncurrent		0	0
Interest Rate Derivative Liabilities, at Fair Value	0	0	0
Forward foreign currency exchange contracts	0	0	0
Total financial liabilities measured and reported at fair value	0	0	0
Level 2 [Member]
Assets:
Money market funds	0	0	0
Trading securities associated with deferred compensation plans	0	0	0
Forward foreign currency exchange contracts	8,547	1,572	720
Total financial assets measured and reported at fair value	8,547	1,572	720
Liabilities:
Business Combination, Contingent Consideration, Liability, Current	0
Business Combination, Contingent Consideration, Liability, Noncurrent		0	0
Interest Rate Derivative Liabilities, at Fair Value	24,892	25,719	39,022
Forward foreign currency exchange contracts	2,151	1,822	2,092
Total financial liabilities measured and reported at fair value	27,043	27,541	41,114
Level 3 [Member]
Assets:
Money market funds	0	0	0
Trading securities associated with deferred compensation plans	0	0	0
Forward foreign currency exchange contracts	0	0	0
Total financial assets measured and reported at fair value	0	0	0
Liabilities:
Business Combination, Contingent Consideration, Liability, Current	2,532
Business Combination, Contingent Consideration, Liability, Noncurrent		2,532	2,532
Interest Rate Derivative Liabilities, at Fair Value	0	0	0
Forward foreign currency exchange contracts	0	0	0
Total financial liabilities measured and reported at fair value	$ 2,532	$ 2,532	$ 2,532

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Fair Value Measurements (Reconciliation of Contingent Consideration Liabilities Related to Acquisitions) (Details) - Contingent consideration [Member] - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance beginning of year	$ 2,532	$ 6,705	$ 6,705
Change in contingent consideration liability	0	(4,173)
Balance at end of period	$ 2,532	$ 2,532	$ 2,532

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Fair Value Measurements - Long Term Obligations (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	$ 517,000	$ 517,000	$ 370,000
Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	520,000	520,000	370,000
Long-term debt	$ 518,297	$ 518,172	$ 368,829

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Pension And Other Postretirement Benefit Plans (Narrative) (Details) $ in Millions	3 Months Ended
	Jun. 30, 2021 USD ($)
Pension and Other Postretirement Benefits [Line Items]
Contributions to qualified and non-qualified pension plans	$ 2.5
Expected additional contributions in the current fiscal year	$ 3.7

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Pension And Other Postretirement Benefit Plans (Components Of Company's Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1,650	$ 1,541
Interest cost	2,259	2,454
Expected return on plan assets	(3,385)	(3,677)
Net amortization and deferral	976	1,121
Net periodic benefit cost	1,500	1,439
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	47	48
Interest cost	239	287
Expected return on plan assets	(22)	(24)
Net amortization and deferral	(115)	(143)
Net periodic benefit cost	$ 149	$ 168

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Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 3,000	$ 2,600
Expected stock based compensation for remaining fiscal year	$ 3,100
Restricted Stock Units (RSUs) [Member] | Pre FY2022 Grants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years
Restricted Stock Units (RSUs) [Member] | FY2022 Grants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Performance Share Awards (PSAs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Minimum [Member] | Performance Share Awards (PSAs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award grant paid	0.00%
Maximum [Member] | Performance Share Awards (PSAs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of award grant paid	150.00%
Outside Directors [Member] | Restricted Stock Units (RSUs) [Member] | Pre FY2020 Grants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Outside Directors [Member] | Restricted Stock Units (RSUs) [Member] | FY2020 Grants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year

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Stock-Based Compensation (Stock-Based Awards Issued During The Period) (Details) - $ / shares	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted	58,160	63,050
Grant date fair value	$ 57.41	$ 43.66
Performance Share Awards (PSAs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted	48,650	63,050
Grant date fair value	$ 47.95	$ 34.33

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Operating Segments (Operating Results For The Company's Reportable Segments) (Details) - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information [Line Items]
Sales and other operating revenues		$ 350,029	$ 315,811
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1)	[1]	(609)	7
Restructuring Costs and Asset Impairment Charges	[2]	(2,024)	0
Other income	[3]	0	4,173
Consolidated operating income		10,605	8,528
Tobacco Operations [Member]
Segment Reporting Information [Line Items]
Sales and other operating revenues		293,843	298,373
Consolidated operating income		8,889	5,049
Ingredients Operations [Member]
Segment Reporting Information [Line Items]
Sales and other operating revenues		56,186	17,438
Consolidated operating income		4,349	(701)
Operating Segments [Member]
Segment Reporting Information [Line Items]
Consolidated operating income		$ 13,238	$ 4,348

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

[2] Restructuring and impairment costs are excluded from segment operating income, but are included in consolidated operating income in the consolidated statements of income and comprehensive income. See Note 4 for additional information.

[3] Other income represents the reversal of a portion of the contingent consideration liability associated with the acquisition of FruitSmart. See Note 12 for additional information.

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2021
Other Comprehensive Income (Loss), Tax [Abstract]
Accumulated other comprehensive loss		$ (98,232)	$ (151,132)	$ (107,037)
Accumulated Translation Adjustment [Member]
Foreign currency translation:
Balance at beginning of year		(35,135)	(42,923)
Net gain (loss) on foreign currency translation		1,719	2,303
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests		(29)	(156)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes		1,690	2,147
Balance at end of period		(33,445)	(40,776)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Forward Foreign Currency Exchange Contract [Member]
Cash flow hedges: [Abstract]
Balance at beginning of year		(414)	(12,226)
Net gain (loss) on derivative instruments, net of income taxes		5,698	(601)
Reclassifications to earnings, net of income taxes	[1]	284	560
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes		5,982	(41)
Balance at end of period		5,568	(12,267)
Other Comprehensive Income (Loss), Tax [Abstract]
Taxes on net gain (loss) on derivative instruments		(1,566)	255
Taxes on reclassifications to net income		(108)	(152)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Interest Rate Swap [Member]
Cash flow hedges: [Abstract]
Balance at beginning of year		(19,480)	(27,402)
Net gain (loss) on derivative instruments, net of income taxes		(1,103)	(2,921)
Reclassifications to earnings, net of income taxes	[2]	1,477	1,172
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes		374	(1,749)
Balance at end of period		(19,106)	(29,151)
Other Comprehensive Income (Loss), Tax [Abstract]
Taxes on net gain (loss) on derivative instruments		293	776
Taxes on reclassifications to net income		(392)	(312)
Accumulated Defined Benefit Plans Adjustment [Member]
Pension and other postretirement benefit plans:
Balance at beginning of year		(52,008)	(69,046)
Amortization included in earnings (net of tax expense (benefit) of $(175) and $(193))(3)	[3]	759	108
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes		759	108
Balance at end of period		(51,249)	(68,938)
Other Comprehensive Income (Loss), Tax [Abstract]
Taxes on amortization included in net income		$ (175)	$ (193)

[1] Gain (loss) on foreign currency cash flow hedges related to forecast purchases of tobacco and crop input sales is reclassified from accumulated other comprehensive income (loss) to cost of goods sold when the tobacco is sold to customers. See Note 11 for additional information.

[2] Gain (loss) on interest rate cash flow hedges is reclassified from accumulated other comprehensive income (loss) to interest expense when the related interest payments are made on the underlying debt, or as amortized to interest expense over the period to original maturity for terminated swap agreements. See Note 11 for additional information.

[3] This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 13 for additional information.

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Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries (Reconciliation Of Changes In Shareholders' Equity And Noncontrolling Interests In Subsidiaries) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Schedule of Capitalization, Equity [Line Items]
Total stockholders' equity attributable to parent, beginning balance	$ 1,307,299
Noncontrolling interests in subsidiaries, beginning balance	41,126
Total shareholders' equity, beginning balance	1,348,425	$ 1,289,284
Accrual of stock-based compensation	2,966	2,633
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation	2,432	1,930
Dividend equivalents on RSUs	264	244
Net income (loss) attributable to parent	6,357	7,274
Net income attributable to noncontrolling interest	(2,445)	(374)
Net (income) loss	3,912	6,900
Common stock dividends declared	(19,170)	(18,863)
Dividend equivalents on RSUs	(264)	(244)
Other comprehensive income (loss)	8,834	309
Dividends paid to noncontrolling interests	(980)	0
Total stockholders' equity attributable to parent, ending balance	1,303,825	1,236,244
Noncontrolling interest in subsidiaries, ending balance	37,730	42,089
Total shareholders' equity, ending balance	1,341,555	1,278,333
Universal Corporation [Member]
Schedule of Capitalization, Equity [Line Items]
Total stockholders' equity attributable to parent, beginning balance	1,307,299	1,246,665
Accrual of stock-based compensation	2,966	2,633
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation	2,432	1,930
Dividend equivalents on RSUs	264	244
Net income (loss) attributable to parent	6,357	7,274
Common stock dividends declared	(19,170)	(18,863)
Dividend equivalents on RSUs	(264)	(244)
Other comprehensive income (loss) attributable to parent	8,805	465
Dividends paid to noncontrolling interests	0	0
Total stockholders' equity attributable to parent, ending balance	1,303,825	1,236,244
Noncontrolling Interests [Member]
Schedule of Capitalization, Equity [Line Items]
Noncontrolling interests in subsidiaries, beginning balance	41,126	42,619
Accrual of stock-based compensation	0	0
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation	0	0
Dividend equivalents on RSUs	0	0
Net income attributable to noncontrolling interest	(2,445)	(374)
Common stock dividends declared	0	0
Dividend equivalents on RSUs	0	0
Other comprehensive income (loss) attributable to noncontrolling interest	29	(156)
Dividends paid to noncontrolling interests	(980)	0
Noncontrolling interest in subsidiaries, ending balance	$ 37,730	$ 42,089