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	SEPTEMBER 30, 2022
		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 November 1, 2022, the total number of shares of common stock outstanding was 24,555,361.

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	30
3.	Quantitative and Qualitative Disclosures About Market Risk	38
4.	Controls and Procedures	39
	PART II - OTHER INFORMATION
1.	Legal Proceedings	40
1A.	Risk Factors	40
2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
6.	Exhibits	41
	Signatures	42

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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 September 30,				Six Months Ended September 30,
	2022		2021		2022		2021
	(Unaudited)				(Unaudited)
Sales and other operating revenues	$	650,984	$	453,955	$	1,080,806	$	803,984
Costs and expenses
Cost of goods sold	540,725		361,272		890,829		648,828
Selling, general and administrative expenses	72,373		65,402		138,825		115,246
Other income	—		(2,532)		—		(2,532)
Restructuring and impairment costs	—		—		—		2,024
Operating income	37,886		29,813		51,152		40,418
Equity in pretax earnings (loss) of unconsolidated affiliates	416		2,363		(137)		2,972
Other non-operating income (expense)	(77)		54		(139)		102
Interest income	93		517		330		590
Interest expense	12,270		7,130		18,994		13,338
Income before income taxes and other items	26,048		25,617		32,212		30,744
Income taxes	6,642		3,862		10,005		5,077
Net income	19,406		21,755		22,207		25,667
Less: net loss (income) attributable to noncontrolling interests in subsidiaries	2,449		(2,245)		6,478		200
Net income attributable to Universal Corporation	$	21,855	$	19,510	$	28,685	$	25,867
Earnings per share:
Basic	$	0.88	$	0.79	$	1.16	$	1.05
Diluted	$	0.88	$	0.78	$	1.15	$	1.04
Weighted average common shares outstanding:
Basic	24,779,237		24,776,930		24,774,126		24,745,827
Diluted	24,939,427		24,916,346		24,937,491		24,894,366
Total comprehensive income (loss), net of income taxes	$	17,578	$	13,669	$	16,295	$	26,415
Less: comprehensive (income) loss attributable to noncontrolling interests	2,737		(2,060)		7,095		356
Comprehensive income (loss) attributable to Universal Corporation	$	20,315	$	11,609	$	23,390	$	26,771
Dividends declared per common share	$	0.79	$	0.78	$	1.58	$	1.56

See accompanying notes.

3

UNIVERSAL CORPORATION     

CONSOLIDATED BALANCE SHEETS

(in thousands of dollars)

	September 30,		September 30,		March 31,
	2022		2021		2022
	(Unaudited)		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	58,855	$	100,682	$	81,648
Accounts receivable, net	469,406		297,442		385,437
Advances to suppliers, net	106,475		82,192		129,838
Accounts receivable—unconsolidated affiliates	51,179		63,112		4,540
Inventories—at lower of cost or net realizable value:
Tobacco	968,167		854,331		822,513
Other	234,581		161,001		194,161
Prepaid income taxes	14,820		23,112		13,095
Other current assets	87,910		76,050		116,779
Total current assets	1,991,393		1,657,922		1,748,011
Property, plant and equipment
Land	23,998		22,502		23,959
Buildings	300,925		289,939		293,935
Machinery and equipment	659,409		653,789		668,451
	984,332		966,230		986,345
Less accumulated depreciation	(643,584)		(630,766)		(641,227)
	340,748		335,464		345,118
Other assets
Operating lease right-of-use assets	43,278		33,790		40,243
Goodwill, net	213,803		172,964		213,998
Other intangibles, net	86,129		67,510		92,571
Investments in unconsolidated affiliates	70,878		84,517		81,006
Deferred income taxes	18,180		17,193		11,616
Pension asset	12,740		13,381		12,667
Other noncurrent assets	36,848		43,057		41,115
	481,856		432,412		493,216
Total assets	$	2,813,997	$	2,425,798	$	2,586,345

See accompanying notes.

4

UNIVERSAL CORPORATION     

CONSOLIDATED BALANCE SHEETS

(in thousands of dollars)

	September 30,		September 30,		March 31,
	2022		2021		2022
	(Unaudited)		(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Notes payable and overdrafts	$	582,382	$	184,982	$	182,639
Accounts payable and accrued expenses	167,153		157,082		272,042
Accounts payable—unconsolidated affiliates	—		2,414		5,308
Customer advances and deposits	12,644		25,219		13,724
Accrued compensation	20,944		19,591		27,281
Income taxes payable	4,589		1,136		7,427
Current portion of operating lease liabilities	10,735		8,985		10,303
Current portion of long-term debt	—		—		—
Total current liabilities	798,447		399,409		518,724
Long-term debt	518,923		518,422		518,547
Pensions and other postretirement benefits	49,398		54,598		52,890
Long-term operating lease liabilities	27,905		22,530		29,617
Other long-term liabilities	15,302		55,174		34,464
Deferred income taxes	49,289		42,239		47,334
Total liabilities	1,459,264		1,092,372		1,201,576
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 24,555,361 shares issued and outstanding at September 30, 2022 (24,607,384 at September 30, 2021 and 24,550,019 at March 31, 2022)	333,540		328,836		330,662
Retained earnings	1,080,920		1,074,629		1,094,192
Accumulated other comprehensive loss	(89,606)		(106,133)		(84,311)
Total Universal Corporation shareholders' equity	1,324,854		1,297,332		1,340,543
Noncontrolling interests in subsidiaries	29,879		36,094		44,226
Total shareholders' equity	1,354,733		1,333,426		1,384,769
Total liabilities and shareholders' equity	$	2,813,997	$	2,425,798	$	2,586,345

See accompanying notes.

5

UNIVERSAL CORPORATION     

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of dollars)

	Six Months Ended September 30,
	2022		2021
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	22,207	$	25,667
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization	28,294		25,096
Net provision for losses (recoveries) on advances to suppliers	(1,034)		(44)
Foreign currency remeasurement (gain) loss, net	6,191		6,955
Foreign currency exchange contracts	13,562		2,486
Restructuring and impairment costs	—		2,024
Restructuring payments	—		(3,203)
Change in estimated fair value of contingent consideration for FruitSmart acquisition	—		(2,532)
Other, net	7,709		(4,916)
Changes in operating assets and liabilities, net	(423,177)		(172,304)
Net cash provided (used) by operating activities	(346,248)		(120,771)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(26,588)		(18,645)
Proceeds from sale of business, net of cash held by the business	1,168		—
Proceeds from sale of property, plant and equipment	1,644		6,767
Net cash used by investing activities	(23,776)		(11,878)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of short-term debt, net	399,924		82,250
Dividends paid to noncontrolling interests	(6,825)		(4,676)
Repurchase of common stock	(3,448)		—
Dividends paid on common stock	(38,594)		(38,047)
Other	(1,869)		(2,996)
Net cash provided (used) by financing activities	349,188		36,531
Effect of exchange rate changes on cash, restricted cash and cash equivalents	(1,957)		(421)
Net decrease in cash, restricted cash and cash equivalents	(22,793)		(96,539)
Cash, restricted cash and cash equivalents at beginning of year	87,648		203,221
Cash, restricted cash and cash equivalents at end of period	$	64,855	$	106,682
Supplemental Information:
Cash and cash equivalents	$	58,855	$	100,682
Restricted cash (Other noncurrent assets)	6,000		6,000
Total cash, restricted cash and cash equivalents	$	64,855	$	106,682

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, 2022 (the “2022 Annual Report on Form 10-K”).

    While the business environment in most of the jurisdictions in which we operate continues to move toward a state resembling pre-pandemic conditions, 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 continues to depend on future developments, which are highly uncertain and cannot be predicted. Such developments may include the ongoing geographic spread and mutations and subvariants 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 September 30, 2022, 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

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 does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.

NOTE 3.   BUSINESS COMBINATION

Acquisition of Shank's Extracts, LLC

On October 4, 2021, the Company acquired 100% of the capital stock of Shank's Extracts, LLC. (“Shank's”), a flavors and extracts processing company, for approximately $100 million in cash and $2.4 million of additional working capital on-hand at the date of acquisition. The acquisition of Shank's diversifies the Company's product offerings and generates new opportunities for its plant-based ingredients platform.

A portion of the goodwill recorded as part of the acquisition was attributable to the assembled workforce of Shank's. The goodwill and intangibles recognized for the Shank's acquisition are deductible for U.S. income tax purposes. The transaction was treated as an asset acquisition for U.S. Federal tax purposes, resulting in a step-up of tax basis to fair value. The Company determined the Shank's operations are not material to the Company’s consolidated results. Therefore, pro forma information is not presented.

For the fiscal year ended March 31, 2022, the Company incurred $2.3 million of acquisition-related transaction costs for the purchase of Shank's. The acquisition-related costs were expensed as incurred and recorded in selling, general, and administrative expense on the consolidated statements of income.

In November 2021, the Company acquired the land and buildings utilized by Shank's operations for $13.3 million. The purchase of the land and buildings resulted in the elimination of the $8.5 million operating lease right-of-use asset and lease liability recognized on the acquisition date for Shank's.

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The following table summarizes the final purchase price allocation of the assets acquired and liabilities assumed for the Shank's acquisition.

(in thousands of dollars)
	Shank's
	October 4, 2021
Assets
Cash and cash equivalents	$	754
Accounts receivable, net	6,643
Inventory	15,792
Other current assets	415
Property, plant and equipment (net)	11,000
Operating lease right-of-use assets	8,531
Intangibles
Customer relationships	24,000
Developed technology	4,500
Non-compete agreements	3,000
Goodwill	41,061
Total assets acquired	115,696
Liabilities
Accounts payable and accrued expenses	6,159
Customer advances and deposits	351
Accrued compensation	655
Current portion of operating lease liabilities	8,531
Total liabilities assumed	15,696
Total assets acquired and liabilities assumed	$	100,000

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.

There were no restructuring and impairment costs incurred for the three and six months ended September 30, 2022.

Tobacco Operations

During the six months ended September 30, 2021, the Company incurred $1.5 million of termination and impairment costs associated with restructuring of tobacco buying and administrative operations in Africa.

Ingredients Operations

During the six months ended September 30, 2021, the Company incurred $0.5 million of impairment costs on property, plant, and equipment associated with wind-down of Carolina Innovative Food Ingredients, Inc. (“CIFI”), a sweet potato processing operation located in Nashville, North Carolina that was announced in fiscal year 2021.

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. Additionally, the Company has fruit and vegetable processing operations, as well as flavor and extract services that

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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. Shipping and handling costs under sales contracts with customers are treated as fulfillment costs and included in the transaction price. 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. 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 the acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products, flavors, and extracts. These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps including sorting, cleaning, pressing, mixing, extracting, 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 September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Tobacco sales	$	544,879	$	370,702	$	864,896	$	640,966
Ingredient sales	76,059		52,517		153,605		104,405
Processing revenue	14,038		16,048		33,530		32,744
Other sales and revenue from contracts with customers	15,028		13,980		27,095		24,745
Total revenue from contracts with customers	650,004		453,247		1,079,126		802,860
Other operating sales and revenues	980		708		1,680		1,124
Consolidated sales and other operating revenues	$	650,984	$	453,955	$	1,080,806	$	803,984

    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 September 30, 2022, 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 $10 million. Those amounts are based on the exchange rate for the Brazilian currency at September 30, 2022. 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 September 30, 2022, 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 September 30, 2022 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 September 30, 2022.

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 September 30, 2022 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

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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 September 30, 2022.

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 $122 million at September 30, 2022, $98 million at September 30, 2021, and $153 million at March 31, 2022. The related valuation allowances totaled $14 million at September 30, 2022, $14 million at September 30, 2021, and $19 million at March 31, 2022, and were estimated based on the Company’s historical loss information and crop projections. The allowances were decreased by net recoveries of approximately $1.0 million and $44 thousand in the six-month periods ended September 30, 2022 and 2021, respectively. These net recoveries are included in selling, general, and administrative expenses in the consolidated statements of income. Interest on advances is recognized in earnings upon the farmers’ delivery of tobacco in payment of principal and interest.

Recoverable Value-Added Tax Credits

In many foreign countries, the Company’s local operating subsidiaries pay significant amounts of 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 September 30, 2022, the aggregate balance of recoverable tax credits held by the Company’s subsidiaries totaled approximately $70 million ($55 million at September 30, 2021, and $67 million at March 31, 2022), and the related valuation allowances totaled approximately $24 million ($20 million at September 30, 2021, and $21 million at March 31, 2022). 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

At September 30, 2022, the Company had a $225 million five-year term loan maturing December 2023 and a $295 million seven-year term loan maturing December 2025. Under the Company's senior unsecured bank credit facility, $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 September 30, 2022. 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 authorized the purchase of up to $100,000,000 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 $93 million of remaining capacity for repurchases of common and/or preferred stock at September 30, 2022. This stock repurchase program was replaced on November 2, 2022 when the Company's Board of Directors authorized a new stock repurchase plan up to $100,000,000 in common and/or preferred stock through November 15, 2024 or when funds for the program have been exhausted, subject to market conditions and other factors.

Sale of Idled Tanzania Operations

During the six months ended September 30, 2022, the Company entered into a sales agreement to sell all outstanding shares of common stock, which included all properties, of the idled companies in Tanzania for $8.5 million. The Company received $1.3 million when the transaction closed in June 2022. The remaining proceeds are expected to be received in installments by June 2023.

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NOTE 7.   EARNINGS PER SHARE

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

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands, except share and per share data)	2022		2021		2022		2021
Basic Earnings Per Share
Numerator for basic earnings per share
Net income attributable to Universal Corporation	$	21,855	$	19,510	$	28,685	$	25,867
Denominator for basic earnings per share
Weighted average shares outstanding	24,779,237		24,776,930		24,774,126		24,745,827
Basic earnings per share	$	0.88	$	0.79	$	1.16	$	1.05
Diluted Earnings Per Share
Numerator for diluted earnings per share
Net income attributable to Universal Corporation	$	21,855	$	19,510	$	28,685	$	25,867
Denominator for diluted earnings per share:
Weighted average shares outstanding	24,779,237		24,776,930		24,774,126		24,745,827
Effect of dilutive securities
Employee and outside director share-based awards	160,190		139,416		163,365		148,539
Denominator for diluted earnings per share	24,939,427		24,916,346		24,937,491		24,894,366
Diluted earnings per share	$	0.88	$	0.78	$	1.15	$	1.04

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 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 Company's consolidated effective income tax rate for the three and six months ended September 30, 2022 was 25.5% and 31.1%, respectively. The consolidated effective income tax rate for the six months ended September 30, 2022 was affected by the sale of the Company's idled Tanzania operations that resulted in $1.1 million of additional income taxes. Without this item, them consolidated effective income tax rate for the six months ended September 30, 2022 would have been approximately 27.5%. Additionally, the sale of the Company's idled Tanzania operations resulted in a $1.8 million reduction to consolidated interest expense related to the removal of an uncertain tax position.

    The Company's consolidated effective income tax rate for the three and six months ended September 30, 2021 was 15.1% and 16.5%, respectively. The consolidated effective income tax rate for the three and six months ended September 20, 2021 was affected by a $1.7 million benefit related to a final tax ruling at a foreign subsidiary. Without this item, the consolidated effective income tax rate for the three and six months ended September 30, 2021 would have been approximately 21.7% and 22.0%, respectively

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NOTE 9.   GOODWILL AND OTHER INTANGIBLES

The Company's changes in goodwill at September 30, 2022 and 2021 consisted of the following:

(in thousands of dollars)	Six Months Ended September 30,
	2022		2021
Balance at beginning of fiscal year	$	213,998	$	173,051
Foreign currency translation adjustment	(195)		(87)
Balance at end of period	$	213,803	$	172,964

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 September 30, 2022 and 2021 and at March 31, 2022:

(in thousands, except useful life)				September 30, 2022
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	86,500	$	(13,828)	$	72,672
Trade names		5		11,100		(4,935)		6,165
Developed technology	3	—	13	9,300		(4,746)		4,554
Noncompetition agreements	4	—	5	4,000		(1,300)		2,700
Other		5		639		(601)		38
Total intangible assets				$	111,539	$	(25,410)	$	86,129

				September 30, 2021
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	62,500	$	(6,097)	$	56,403
Trade names		5		11,100		(2,715)		8,385
Developed technology		3		4,800		(2,800)		2,000
Noncompetition agreements		5		1,000		(350)		650
Other		5		764		(692)		72
Total intangible assets				$	80,164	$	(12,654)	$	67,510

				March 31, 2022
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships(1)	11	—	13	$	86,500	$	(9,963)	$	76,537
Trade names		5		11,100		(3,825)		7,275
Developed technology(1)	3	—	13	9,300		(3,773)		5,527
Noncompetition agreements(1)	4	—	5	4,000		(825)		3,175
Other		5		736		(679)		57
Total intangible assets				$	111,636	$	(19,065)	$	92,571

(1)On October 4, 2021, the Company acquired 100% of the capital stock of Shank's for approximately $100 million in cash and $2.4 million of additional working capital on-hand at the date of acquisition. The Shank's acquisition resulted in $31.5 million of intangible assets. 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.

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The Company's amortization expense for intangible assets for the three and six months ended September 30, 2022 and 2021 was:

(in thousands of dollars)	Three Months Ended September 30,				Six Months Ended September 30,
	2022		2020		2022		2021
Amortization Expense	$	3,172	$	2,853	$	6,345	$	5,256

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

As of September 30, 2022, the expected future amortization expense for intangible assets is as follows:

Fiscal Year (in thousands of dollars)
2023 (excluding the six months ended September 30, 2022)	$	6,044
2024	11,264
2025	11,812
2026	8,452
2027 and thereafter	48,557
Total expected future amortization expense	$	86,129

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)	September 30, 2022		September 30, 2021		March 31, 2022
Assets
Operating lease right-of-use assets	$	43,278	$	33,790	$	40,243
Liabilities
Current portion of operating lease liabilities	$	10,735	$	8,985	$	10,303
Long-term operating lease liabilities	27,905		22,530		29,617
Total operating lease liabilities	$	38,640	$	31,515	$	39,920

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

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Income Statement Location
Cost of goods sold	$	2,632	$	2,721	$	5,336	$	5,299
Selling, general, and administrative expenses	2,718		2,261		5,221		4,566
Total operating lease costs(1)	$	5,350	$	4,982	$	10,557	$	9,865

(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)	September 30, 2022
Maturity of Operating Lease Liabilities
2023 (excluding the six months ended September 30, 2022)	$	6,498
2024	11,325
2025	8,983
2026	5,744
2027	4,379
2028 and thereafter	8,545
Total undiscounted cash flows for operating leases	$	45,474
Less: Imputed interest	(6,834)
Total operating lease liabilities	$	38,640

As of September 30, 2022, the Company had no leases that have not yet commenced.

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

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands, except lease term and incremental borrowing rate)	2022		2021		2022			2021
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,378	$	2,840	$	6,668		$	5,617
Right-of-use assets obtained in exchange for new operating leases	6,198		6,310		10,725			9,051
Weighted Average Remaining Lease Term (years)					5.13			5.51
Weighted Average Collateralized Incremental Borrowing Rate					5.68		%	4.02		%

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.

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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 September 30, 2022, the total notional amount of the interest rate swaps was $370 million, which corresponded with the 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 September 30, 2022, 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 was amortized from accumulated other comprehensive loss into earnings as a reduction of interest expense through the original maturity dates of those agreements. As of September 30, 2022, the entire deferred gain has been amortized.

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 six-month periods in fiscal years 2023 and 2022 was as follows:

	Six Months Ended September 30,
(in millions of dollars)	2022		2021
Tobacco purchases	$	30.4	$	99.7
Processing costs	5.4		18.7
Crop input sales	—		20.8
Total	$	35.8	$	139.2

Fluctuations 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.

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The table below presents the expected timing of when the remaining accumulated other comprehensive gains and losses as of September 30, 2022 for cash flows hedges of tobacco purchases and crop input sales are expected to be recognized in earnings.

Hedging Program	Crop Year	Geographic Location(s)	Fiscal Year Earnings
Tobacco purchases	2023	Brazil	2024
Tobacco purchases	2022	Brazil, Africa	2023
Crop input sales	2023	Brazil	2024
Crop input sales	2022	Brazil	2023

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 September 30, 2022 and 2021, and March 31, 2022, were approximately $112.3 million, $22.3 million, and $59.5 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 September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Cash Flow Hedges - Interest Rate Swap Agreements
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	9,348	$	(253)	$	13,249	$	(1,649)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(266)	$	(2,257)	$	(1,871)	$	(4,480)
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	$	—	$	355	$	—	$	708
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	$	943	$	(5,234)	$	(4)	$	2,999
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	2,084	$	1,805	$	3,041	$	1,289
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	$	605	$	(217)	$	(520)	$	451
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	$	(1,310)	$	(839)	$	(2,317)	$	3,765
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 $3.1 million remained in accumulated other comprehensive loss at September 30, 2022. That balance reflects gains and losses on contracts related to the 2023 and 2022 Brazil crops, the 2022 Africa crop, and the 2023 and 2022 Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through September 30, 2022. Based on the hedging strategy, as the gain or loss is recognized in earnings, it is

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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 September 30, 2022 and 2021, and March 31, 2022:

	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)		September 30, 2022		September 30, 2021		March 31, 2022			September 30, 2022		September 30, 2021		March 31, 2022
Derivatives Designated as Hedging Instruments
Interest rate swap agreements	Other non-current assets	$	13,959	$	—	$	—	Other long-term liabilities	$	—	$	22,888	$	1,161
Foreign currency exchange contracts	Other current assets	934		889		10,957		Accounts payable and accrued expenses	—		3,152		3,200
Total		$	14,893	$	889	$	10,957		$	—	$	26,040	$	4,361
Derivatives Not Designated as Hedging Instruments
Foreign currency exchange contracts	Other current assets	$	2,605	$	1,028	$	13,111	Accounts payable and accrued expenses	$	181	$	639	$	64
Total		$	2,605	$	1,028	$	13,111		$	181	$	639	$	64

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 September 30, 2022 and 2021, and at March 31, 2022, 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:

	September 30, 2022
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	334	$	—	$	—	$	—	$	334
Trading securities associated with deferred compensation plans	—		10,845		—		—		10,845
Interest rate swap agreements	—		—		13,959		—		13,959
Foreign currency exchange contracts	—		—		3,539		—		3,539
Total financial assets measured and reported at fair value	$	334	$	10,845	$	17,498	$	—	$	28,677
Liabilities
Foreign currency exchange contracts	$	—	$	—	$	181	$	—	$	181
Total financial liabilities measured and reported at fair value	$	—	$	—	$	181	$	—	$	181

	September 30, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	335	$	—	$	—	$	—	$	335
Trading securities associated with deferred compensation plans	—		14,557		—		—		14,557
Foreign currency exchange contracts	—		—		1,917		—		1,917
Total financial assets measured and reported at fair value	$	335	$	14,557	$	1,917	$	—	$	16,809
Liabilities
Interest rate swap agreements	$	—	$	—	$	22,888	$	—	$	22,888
Foreign currency exchange contracts	—		—		3,791		—		3,791
Total financial liabilities measured and reported at fair value	$	—	$	—	$	26,679	$	—	$	26,679

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	March 31, 2022
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	334	$	—	$	—	$	—	$	334
Trading securities associated with deferred compensation plans	—		13,655		—		—		13,655
Foreign currency exchange contracts	—		—		24,068		—		24,068
Total financial assets measured and reported at fair value	$	334	$	13,655	$	24,068	$	—	$	38,057
Liabilities
Interest rate swap agreements	$	—	$	—	$	1,161	$	—	$	1,161
Foreign currency exchange contracts	—		—		3,264		—		3,264
Total financial liabilities measured and reported at fair value	$	—	$	—	$	4,425	$	—	$	4,425

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. ("FruitSmart") 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. During the year ended March 31, 2022, the evaluation of the contingent liability resulted in a reduction of the remaining $2.5 million contingent consideration recorded. Significant judgment is applied to this model and therefore the acquisition-related contingent consideration obligation was classified within Level 3 of the fair value hierarchy.

22

A reconciliation of the change in the balance of the acquisition-related contingent consideration obligation (Level 3) for the six months ended September 30, 2022 and 2021 is provided below.

(in thousands of dollars)	Six Months Ended September 30,
	2022		2021
Balance beginning of year	$	—	$	2,532
Change in fair value of contingent consideration liability			(2,532)
Balance at end of period	$	—	$	—

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 September 30, 2022, and 2021 and March 31, 2022:

(in millions of dollars)	September 30, 2022		September 30, 2021		March 31, 2022
Fair market value of long term obligations	$	517	$	518	$	517
Carrying value of long term obligations	$	520	$	520	$	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.

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.

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

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended September 30,				Three Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Service cost	$	1,503	$	1,653	$	32	$	47
Interest cost	2,351		2,254		235		241
Expected return on plan assets	(3,324)		(3,387)		(19)		(22)
Net amortization and deferral	1,001		976		(167)		(116)
Net periodic benefit cost	$	1,531	$	1,496	$	81	$	150

	Pension Benefits				Other Postretirement Benefits
	Six Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Service cost	$	3,048	$	3,303	$	64	$	94
Interest cost	4,686		4,513		476		480
Expected return on plan assets	(6,648)		(6,772)		(38)		(44)
Net amortization and deferral	2,002		1,952		(339)		(231)
Net periodic benefit cost	$	3,088	$	2,996	$	163	$	299

During the six months ended September 30, 2022, the Company made contributions of approximately $3.2 million to its pension plans. Additional contributions of $0.9 million are expected during the remaining six months of fiscal year 2023.

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.

RSUs awarded prior to fiscal year 2022 vest 5 years after the grant date and those awarded beginning in fiscal year 2022 vest 3 years after the grant date. After vesting RSUs are 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 1 year after the grant date. Restricted shares vest upon the individual’s retirement from service as a director.

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During the six-month periods ended September 30, 2022 and 2021, Universal issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

	Six Months Ended September 30,
	2022		2021
RSUs:
Number granted	79,405		72,860
Grant date fair value	$	62.17	$	56.31
PSUs:
Number granted	48,315		48,650
Grant date fair value	$	54.46	$	47.95

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 six-month periods ended September 30, 2022 and 2021, the Company recorded total stock-based compensation expense of approximately $5.5 million and $4.1 million, respectively. The Company expects to recognize stock-based compensation expense of approximately $2.5 million during the remaining six months of fiscal year 2023.

NOTE 15. OPERATING SEGMENTS

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, dehydrated products, flavors, and botanical extracts. Customers for the Ingredients Operations segment include large multinational food and beverage companies, smaller independent manufacturers, and retail organizations. FruitSmart, Silva, and Shank's 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. Shank's manufactures flavors and botanical extracts and also offers bottling and custom packaging for customers.

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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.

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
SALES AND OTHER OPERATING REVENUES
Tobacco Operations	$	570,030	$	396,765	$	918,093	$	690,608
Ingredients Operations	80,954		57,190		162,713		113,376
Consolidated sales and other operating revenues	$	650,984	$	453,955	$	1,080,806	$	803,984
OPERATING INCOME
Tobacco Operations	$	33,790	$	26,914	$	41,906	$	35,803
Ingredients Operations	4,512		2,730		9,109		7,079
Segment operating income	38,302		29,644		51,015		42,882
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1)	(416)		(2,363)		137		(2,972)
Restructuring and impairment costs (2)	—		—		—		(2,024)
Add: Other income (loss)(3)	—		2,532		—		2,532
Consolidated operating income	$	37,886	$	29,813	$	51,152	$	40,418

(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 six months ended September 30, 2022 and 2021:

	Six Months Ended September 30,
(in thousands of dollars)	2022		2021
Foreign currency translation:
Balance at beginning of year	$	(40,965)	$	(35,135)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on foreign currency translation	(13,642)		(2,360)
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests	617		156
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	(13,025)		(2,204)
Balance at end of period	$	(53,990)	$	(37,339)
Foreign currency hedge:
Balance at beginning of year	$	3,579	$	(414)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(158) and $(512))	(4,146)		538
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $600 and $271) (1)	(1,214)		(718)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	(5,360)		(180)
Balance at end of period	$	(1,781)	$	(594)
Interest rate hedge:
Balance at beginning of year	$	(860)	$	(19,480)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(2,782) and $346)	10,467		(1,303)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(393) and $(792)) (2)	1,478		2,980
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	11,945		1,677
Balance at end of period	$	11,085	$	(17,803)
Pension and other postretirement benefit plans:
Balance at beginning of year	$	(46,065)	$	(52,008)
Other comprehensive income (loss) attributable to Universal Corporation:
Amortization included in earnings (net of tax expense (benefit) of $(285) and $(354))(3)	1,145		1,611
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	1,145		1,611
Balance at end of period	$	(44,920)	$	(50,397)
Total accumulated other comprehensive loss at end of period	$	(89,606)	$	(106,133)

(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 and six months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of three-month period	$	1,325,763	$	34,296	$	1,360,059	$	1,303,825	$	37,730	$	1,341,555
Changes in common stock
Repurchase of common stock	(893)		—		(893)		—		—		—
Accrual of stock-based compensation	1,622		—		1,622		1,119		—		1,119
Withholding of shares from stock-based compensation for grantee income taxes	—		—		—		(26)		—		(26)
Dividend equivalents on RSUs	291		—		291		272		—		272
Changes in retained earnings
Net income	21,855		(2,449)		19,406		19,510		2,245		21,755
Cash dividends declared
Common stock	(19,398)		—		(19,398)		(19,195)		—		(19,195)
Repurchase of common stock	(2,555)		—		(2,555)		—		—		—
Dividend equivalents on RSUs	(291)		—		(291)		(272)		—		(272)
Other comprehensive income (loss)	(1,540)		(288)		(1,828)		(7,901)		(185)		(8,086)
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(1,680)		(1,680)		—		(3,696)		(3,696)
Balance at end of period	$	1,324,854	$	29,879	$	1,354,733	$	1,297,332	$	36,094	$	1,333,426

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	Six Months Ended September 30, 2022						Six Months Ended September 30, 2021
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of year	$	1,340,543	$	44,226	$	1,384,769	$	1,307,299	$	41,126	$	1,348,425
Changes in common stock
Repurchase of common stock	(893)		—		(893)		—		—		—
Accrual of stock-based compensation	5,304		—		5,304		4,085		—		4,085
Withholding of shares from stock-based compensation for grantee income taxes	(2,090)		—		(2,090)		(2,458)		—		(2,458)
Dividend equivalents on RSUs	557		—		557		536		—		536
Changes in retained earnings
Net income	28,685		(6,478)		22,207		25,867		(200)		25,667
Cash dividends declared
Common stock	(38,845)		—		(38,845)		(38,365)		—		(38,365)
Repurchase of common stock	(2,555)		—		(2,555)		—		—		—
Dividend equivalents on RSUs	(557)		—		(557)		(536)		—		(536)
Other comprehensive income (loss)	(5,295)		(617)		(5,912)		904		(156)		748
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(6,825)		(6,825)		—		(4,676)		(4,676)
Other	—		(427)		(427)		—		—		—
Balance at end of period	$	1,324,854	$	29,879	$	1,354,733	$	1,297,332	$	36,094	$	1,333,426

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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 and new subvariants; 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; our 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 including increased transportation costs and delays attributed to global supply chain challenges; timing of shipments to customers; higher inflation rates; changes in market structure; government regulation and other stakeholder expectations; economic and political conditions in the countries in which we and our customers operate, including the ongoing impacts from the conflict in Ukraine; 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, 2022. 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, 2022.

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

Demand for both our tobacco and plant-based ingredients products remains very strong, and we are excited about how our fiscal year 2023 is developing. We are seeing improvement in shipping availability, particularly in Brazil, where we were able to ship large amounts of carryover tobacco in both the six months and quarter ended September 30, 2022. We also remain very pleased with our strategic investment in our plant-based ingredients platform. Our Ingredients Operations segment diversifies our earnings and delivered higher results driven by higher sales in both the six months and quarter ended September 30, 2022, compared to the same periods in the prior fiscal year.

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We believe we are through our peak seasonal working capital requirements for fiscal year 2023, and we expect a considerable reduction in debt levels over the next two fiscal quarters. We have already seen significant working capital receipts in October 2022. Our tobacco shipments, which are weighted to the second half of our fiscal year, should enable us to reduce our debt levels from the elevated September 30, 2022 levels, as payments are received from our customers.

Operating income for our Tobacco Operations segment for the six months and quarter ended September 30, 2022, was up significantly, compared to the six months and quarter ended September 30, 2021, driven by increased tobacco shipments. Improved container and vessel availability in Brazil enabled us to ship a greater amount of tobacco, particularly in the three months ended September 30, 2022. A large portion of the tobacco we shipped during the six months and quarter ended September 30, 2022, was carryover tobacco, and some tobacco we shipped was lower margin tobacco. While we are still having some shipping challenges in certain areas around the world, we are encouraged by the global easing of shipping constraints.

All types of leaf tobacco are currently in an undersupply position. We have worked diligently to secure the leaf tobacco desired by our customers, and our tobacco inventories were nearly 90% committed for sale to our customers at September 30, 2022. Burley tobacco crops have been particularly short in Africa, largely due to weather conditions, which has limited our sales opportunities.

Our Ingredients Operations segment again delivered healthy results in the six months and quarter ended September 30, 2022. Demand for our ingredients products remains strong, and we continue to capitalize on synergies across the plant-based ingredients platform. We have seen inflationary cost increases, particularly for raw materials and labor, but margins have held up nicely. As these businesses continue to find success with their established products, we are working to grow the platform offerings by investing in key sales and product development personnel to promote and expand the full range of our ingredients capabilities across the platform.

Universal remains focused on integrating sustainability into all aspect of our business. A key part of our sustainability efforts is reducing global emissions. To support us in developing our long-term strategy for reducing our global emissions footprint, we have engaged a third party to develop a low carbon transition plan and to prepare for updated guidance on meeting future net zero targets.

FINANCIAL HIGHLIGHTS
	Six Months Ended September 30,						Change
(in millions of dollars, except per share data)	2022			2021			$		%
Consolidated Results
Sales and other operating revenue	$	1,080.8		$	804.0		$	276.8	34	%
Cost of goods sold	$	890.8		$	648.8		$	242.0	37	%
Gross Profit Margin	17.6		%	19.3		%			-170 bps
Selling, general and administrative expenses	$	138.8		$	115.2		$	23.6	20	%
Restructuring and impairment costs	$	—		$	2.0		$	(2.0)	(100)	%
Operating income (as reported)	$	51.2		$	40.4		$	10.7	27	%
Adjusted operating income (non-GAAP)*	$	51.2		$	41.6		$	9.5	23	%
Diluted earnings per share (as reported)	$	1.15		$	1.04		$	0.11	11	%
Adjusted diluted earnings per share (non-GAAP)*	$	1.13		$	0.96		$	0.17	18	%
Segment Results
Tobacco operations sales and other operating revenues	$	918.1		$	690.6		$	227.5	33	%
Tobacco operations operating income	$	41.9		$	35.8		$	6.1	17	%
Ingredients operations sales and other operating revenues	$	162.7		$	113.4		$	49.3	44	%
Ingredient operations operating income	$	9.1		$	7.1		$	2.0	29	%

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

Net income for the six months ended September 30, 2022, was $28.7 million, or $1.15 per diluted share, compared with $25.9 million, or $1.04 per diluted share, for the six months ended September 30, 2021. 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

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$4.1 million and $0.17, respectively, for the six months ended September 30, 2022, compared to the six months ended September 30, 2021. Operating income of $51.2 million for the six months ended September 30, 2022, increased by $10.7 million, compared to operating income of $40.4 million for the six months ended September 30, 2021. Adjusted operating income, detailed in Other Items below, of $51.2 million increased by $9.5 million for the first half of fiscal year 2023, compared to adjusted operating income of $41.6 million for the first half of fiscal year 2022.

Net income for the quarter ended September 30, 2022, was $21.9 million, or $0.88 per diluted share, compared with $19.5 million, or $0.78 per diluted share, for the quarter ended September 30, 2021. 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 $5.3 million and $0.22, respectively, for the quarter ended September 30, 2022, compared to the quarter ended September 30, 2021. Operating income of $37.9 million for the quarter ended September 30, 2022, increased by $8.1 million, compared to operating income of $29.8 million for the quarter ended September 30, 2021. Adjusted operating income, detailed in Other Items below, of $37.9 million increased by $8.9 million for the second quarter of fiscal year 2023, compared to adjusted operating income of $29.0 million for the second quarter of fiscal year 2022.

Consolidated revenues increased by $276.8 million to $1.1 billion and by $197.0 million to $651.0 million, respectively, for the six months and quarter ended September 30, 2022, compared to the same periods in fiscal year 2022, on higher tobacco sales volumes and prices as well as the addition of the business acquired in October 2021 in the Ingredients Operations segment.

Tobacco Operations

Operating income for the Tobacco Operations segment increased by $6.1 million to $41.9 million and by $6.9 million to $33.8 million, respectively, for the six months and quarter ended September 30, 2022, compared to the same periods in fiscal year 2022. Tobacco Operations segment results improved largely due to substantial shipments of both carryover and current crop tobacco, in the six months and quarter ended September 30, 2022, compared to the six months and quarter ended September 30, 2021. While sales volumes were higher for the Tobacco Operations segment in the six months and quarter ended September 30, 2022, compared to the same periods in the prior fiscal year, the sales included some lower margin tobacco. Unfavorable foreign currency comparisons due to the strong U.S. dollar also negatively impacted Tobacco Operations segment results in the six months and quarter ended September 30, 2022. Carrryover and current crop tobacco shipments from Brazil were up significantly in the six months and quarter ended September 30, 2022, compared to the six months and quarter ended September 30, 2021. In Africa, carryover and current crop shipments from Mozambique and Malawi were lower in the six months and quarter ended September 30, 2022, compared to the same periods in fiscal year 2022, due to smaller crop sizes as well as some logistical delays. In North America, sales volumes were down, in part due to shipment timing, and the sales mix included some lower margin tobacco in the six months and quarter ended September 30, 2022, compared to the same periods in fiscal year 2022. Trading business was up in Asia in the first half of fiscal year 2023, compared to the first half of fiscal year 2022. Selling, general, and administrative expenses for the Tobacco Operations segment were higher in the six months and quarter ended September 30, 2022, compared to the six months and quarter ended September 30, 2021, primarily due to unfavorable foreign currency comparisons. Revenues for the Tobacco Operations segment of $918.1 million for the six months and $570.0 million for the quarter ended September 30, 2022, were up $227.5 million and $173.3 million, respectively, compared to the same periods in the prior fiscal year, on higher sales volumes and prices.

Ingredients Operations

Operating income for the Ingredients Operations segment was $9.1 million and $4.5 million, respectively, for the six months and quarter ended September 30, 2022, compared to $7.1 million and $2.7 million, respectively, for the six months and quarter ended September 30, 2021. Results for the Ingredients Operations segment improved in the six months and quarter ended September 30, 2021, compared to the same periods in the prior fiscal year, on the inclusion of the October 2021 purchase of Shank’s Extracts, LLC (“Shank’s”). For both the six months and quarter ended September 30, 2021, the Ingredients Operations segment continued to see strong demand and volumes in both human and pet food categories. Despite seeing higher costs for raw materials, labor, travel and marketing, margins for the Ingredients Operations segment in the first half of fiscal year 2023 continued to hold up well compared to those in the first half of fiscal year 2022. Selling, general, and administrative expenses for the segment increased in the six months and quarter ended September 30, 2022, compared to the same periods in the prior fiscal year, primarily on the addition of Shank’s. Revenues for the Ingredients Operations segment increased by $49.3 million to $162.7 million and by $23.8 million to $81.0 million, respectively, for the six months and quarter ended September 30, 2022, compared to the six months and quarter ended September 30, 2021, largely on the addition of the revenues for the acquired business as well as higher sales volumes and prices.

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Other Items

Cost of goods sold in the six months and quarter ended September 30, 2022, increased by 37% and 50% to $890.8 million and $540.7 million, respectively, compared to the same periods in the prior fiscal year, as a result of higher sales. The percentage increases in cost of goods sold were higher than comparable percentage increases in revenues in the same periods primarily due to some lower margin sales in the Tobacco Operations segment. Selling, general, and administrative costs for the six months and quarter ended September 30, 2022, increased by $23.6 million to $138.8 million and by $7.0 million to $72.4 million, respectively, compared to the same periods in the prior fiscal year, on additional costs from the acquisition of Shank’s in the Ingredients Operations segment, unfavorable foreign currency comparisons as well as higher compensation and travel costs. Unfavorable foreign currency comparisons were approximately $8.3 million and $1.7 million, respectively, in the six months and quarter ended September 30, 2022, compared to the same periods in the prior year. Interest expense for the six months and quarter ended September 30, 2022, increased by $5.6 million to $19.0 million and by $5.1 million to $12.3 million, respectively, largely on higher debt balances and interest rates.

For the six months and quarter ended September 30, 2022, our effective tax rate on pre-tax income was 31.1% and 25.5%, respectively. The consolidated effective income tax rate for the six months ended September 30, 2022, was affected by the sale of our idled Tanzania operations in the quarter ended June 30, 2022, which resulted in $1.1 million of additional income taxes. Without this item, the consolidated effective income tax rate for the six months ended September 30, 2022, would have been approximately 27.6%. Additionally, the sale of our idled Tanzania operations resulted in a $1.8 million reduction to consolidated interest expense related to an uncertain tax position.

For the six months and quarter ended September 30, 2021, our effective tax rate on pre-tax income was 16.5% and 15.1% respectively. In the three months ended September 30, 2021, we recognized a $1.7 million income tax benefit related to a foreign subsidiary. Without this income tax benefit, the adjusted effective tax rates were 22.0% and 21.7% for the six months and quarter ended September 30, 2021, respectively.

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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 September 30,				Six Months Ended September 30,
(in thousands)	2022		2021		2022		2021
As Reported: Consolidated operating income	$	37,886	$	29,813	$	51,152	$	40,418
Transaction costs for acquisitions(1)	—		1,713		—		1,713
Restructuring and impairment costs(2)	—		—		—		2,024
Fair value adjustment to contingent consideration for FruitSmart acquisition(3)	—		(2,532)		—		(2,532)
Adjusted operating income	$	37,886	$	28,994	$	51,152	$	41,623
Adjusted Net Income and Diluted Earnings Per Share
(in thousands and reported net of income taxes)	Three Months Ended September 30,				Six Months Ended September 30,
	2022		2021		2022		2021
As Reported: Net income available to Universal Corporation	$	21,855	$	19,510	$	28,685	$	25,867
Transaction costs for acquisitions(1)	—		1,713		—		1,713
Restructuring and impairment costs(2)	—		—		—		1,005
Fair value adjustment to contingent consideration for FruitSmart acquisition(3)	—		(2,532)		—		(2,532)
Interest income and income tax benefit on a final tax ruling at a foreign subsidiary	—		(2,156)		—		(2,156)
Interest expense reversal on uncertain tax position and income tax from sale of operations in Tanzania	—		—		(684)		—
Adjusted net income available to Universal Corporation	$	21,855	$	16,535	$	28,001	$	23,897
As reported: Diluted earnings per share	$	0.88	$	0.78	$	1.15	$	1.04
As adjusted: Diluted earnings per share	$	0.88	$	0.66	$	1.13	$	0.96

(1)The Company incurred selling, general, and administrative expenses for due diligence and other transaction costs associated with the acquisition of Shank's.

(2)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.

(3)The Company reversed 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.

COVID-19 Pandemic Impact

We continue to closely monitor developments related to the coronavirus (“COVID-19” or “COVID”) pandemic and have taken and continue to take steps intended to mitigate the potential risks and impacts to us. It is paramount that our employees who operate our businesses are safe and informed. We have assessed and regularly update our existing health and safety protocols, business continuity plans for our business, and related policies and practices in the context of this pandemic, and we will take additional steps and reevaluate them to address the spread of COVID and its impacts, as necessary. We also continue to work with our suppliers to mitigate the impacts to our supply chain due to the pandemic. To date, we have not experienced a material impact to our supply chain, although we experienced delays resulting from COVID in certain operations during fiscal year 2021, and since March 2020 we have at times experienced increased volatility in foreign currency exchange rates, which we believe in part related to the uncertainties from COVID as well as actions taken by governments and central banks in response to COVID. We continue to see and monitor some logistical constraints around worldwide vessel and container availability and increased costs stemming from the COVID pandemic.

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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. The extent to which COVID impacts our business, financial position, results of operations, and cash flows will depend on future developments which are highly uncertain and cannot be predicted including, without limitation, the extent, resurgence, variation or duration of COVID, governmental and other third party actions that may be taken in response to the same, and their effects on the global, national or local economy, including the impacts on our ability to access capital. We remain thankful for the hard work of our employees and the continued support of our customers, growers, and other partners during these challenging times.

Liquidity and Capital Resources

Overview

The first half of our fiscal year is usually a period of significant working capital investment in Africa, South America, and the United States as tobacco crops are delivered by farmers. We funded our working capital needs in the six months ended September 30, 2022, using a combination of cash on hand, short-term borrowings, customer advances, and operating cash flows. We are experiencing higher and longer duration working capital needs in fiscal year 2023 compared to historical levels due to increased costs, specifically higher leaf tobacco costs, and delayed tobacco shipment timing. Tobacco crop shipments are expected to be weighted to the second half of our 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 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. The extent to which COVID impacts our business, financial position, results of operations, and cash flows will depend on future developments which are highly uncertain and cannot be predicted including, without limitation, the extent, resurgence, variation or duration of COVID, governmental and other third party actions that may be taken in response to the same, and their effects on the global, national or local economy, including the impacts on our ability to access capital.

Operating Activities

We used $346.2 million in net cash flows from our operations during the six months ended September 30, 2022. That amount was $225.5 million higher than during the same period in fiscal year 2022. Our working capital needs to fund our operations in the six months ended September 30, 2022, were higher, compared to the six months ended September 30, 2021, primarily on higher green tobacco costs as well as tobacco shipment and purchase timing. Tobacco inventory levels increased by $145.7 million from March 31, 2022 levels to $968.2 million at September 30, 2022, on seasonal leaf purchases. Tobacco inventory levels were $113.8 million above September 30, 2021 levels, mainly due to higher green tobacco costs and 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 September 30, 2022, our uncommitted tobacco inventories were $109.1 million, or about 11% of total tobacco inventory, compared to $130.1 million, or about 16% of our March 31, 2022 tobacco inventory, and $94.5 million, or about 11% of our September 30, 2021 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.

Historically, our accounts receivable usually decrease in the first six months of our fiscal year as we use collections on receivables to fund seasonal working capital needs. However, in the first six months of fiscal year 2023, our accounts receivable increased by $84.0 million from March 31, 2022 levels, largely due to tobacco shipment timing in Brazil and increased tobacco

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trading business in Asia. Notes payable and overdrafts were up $400.0 million from March 31, 2022 levels, partly on increased short-term borrowings to fund seasonal working capital needs. Accounts payable and accrued expenses at September 30, 2022, were down $104.9 million from March 31, 2022 levels, primarily due to payments on acquired tobacco inventory.

Accounts receivable of $469.4 million at September 30, 2022, were $172.0 million higher, compared to the same period in the prior fiscal year, primarily on the timing of tobacco crop purchases and shipments, increased tobacco trading business, and higher leaf tobacco costs. Advances to suppliers were up $24.3 million at September 30, 2022, compared to at September 30, 2021, partly due to higher crop input costs. Inventories—Other were also up in the six months ended September 30 2022, compared to the six months ended September 30, 2021, on our acquisition of Shank’s as well as higher crop input costs. Notes payable and overdrafts were up $397.4 million compared to September 30, 2021 levels, on higher tobacco inventory costs, higher accounts receivable balances, and the acquisition of Shank’s in October 2021.

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 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 six months ended September 30, 2022 and 2021, we invested about $26.6 million and $18.6 million, respectively, in our property, plant and equipment. Depreciation expense was approximately $21.9 million and $19.8 million for the six months ended September 30, 2022 and 2021, 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, invest in sustainability projects, add value for our customers, and position ourselves for future growth. We currently expect to spend approximately $40 to $50 million over the next twelve months on capital projects for maintenance of our facilities and other investments to grow and improve our businesses.

On November 3, 2022, we announced that our Board of Directors had approved a new share repurchase program, which replaced the share repurchase program expiring in November 2022, for the purchase of up to $100 million of our common stock through November 15, 2024. Under the new program, 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 September 30, 2022, we purchased 66,124 shares of common stock at an aggregate cost of $3.4 million (average price per share $52.15). As of September 30, 2022, approximately 24.6 million shares of our common stock were outstanding.

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 44% at September 30, 2022, up from the September 30, 2021 level of approximately 33%, largely on higher debt balances due in part to the Shank’s acquisition in October 2021 as well as higher working capital requirements, and up from the March 31, 2022 level of approximately 32%. As of September 30, 2022, we had $58.9 million in cash and cash equivalents, our short-term debt totaled $582.4 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 September 30, 2022, we had $100 million available under a committed revolving credit facility that will mature in December 2023, and we had about $56 million in available, 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. We believe that we have gotten through our peak seasonal working capital requirements for fiscal year 2023. Our tobacco shipments are forecasted to be weighted to the second half of fiscal year 2023, and as payments

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are received from our customers, we expect our debt levels to decline. 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 September 30, 2022, the fair value of our outstanding interest rate swap agreements was an asset of about $14 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 September 30, 2022, the fair value of our open hedges was a net asset of about $0.9 million. We had forward contracts outstanding that were not designated as hedges, and the fair value of those contracts was a net asset of approximately $2.4 million at September 30, 2022.

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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 $732 million at September 30, 2022. Although a hypothetical 1% change in short-term interest rates would result in a change in annual interest expense of approximately $7.3 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 Exchange Act,, is recorded, processed, summarized and reported within the time periods specified in the SEC’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 Shank's, our wholly-owned subsidiary we acquired on October 4, 2021, which is included in our Consolidated Financial Statements, from our assessment of internal control over financial reporting as of September 30, 2022. Shank's represented 4% of consolidated total assets as of September 30, 2022 and 3% of consolidated sales and other operating revenues for the six months ending September 30, 2022. 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, 2022 (the "2022 Annual Report on Form 10-K"). In evaluating our risks, readers should carefully consider the risk factors discussed in our 2022 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 repurchased shares of our common stock during the three-month period ended September 30, 2022:

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)
July 1-31, 2022	3,568	$	52.99	3,568	$	96,757,603
August 1-31, 2022	62,556	52.10		62,556	93,498,277
September 1-30, 2022	—	—		—	93,498,277
Total	66,124	$	52.15	66,124	$	93,498,277

(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 the Company's Board of Directors, became effective and was publicly announced on November 5, 2020. This stock repurchase plan authorized 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 $93 million of remaining capacity for repurchases of common and/or preferred stock at September 30, 2022. This stock repurchase program was replaced on November 2, 2022 when the Company's Board of Directors authorized a new stock repurchase plan up to $100 million in common and/or preferred stock through November 15, 2024 or when funds for the program have been exhausted, subject to market conditions and other factors.

Our current dividend policy anticipates the payment of quarterly dividends in the future. However, the declaration and payment of dividends to holders of common stock is at the discretion of the Board of Directors and will be dependent upon our future earnings, financial condition, and capital requirements. Under certain of our credit facilities, we must meet financial covenants relating to minimum tangible net worth and maximum levels of debt. If we were not in compliance with them, these financial covenants could restrict our ability to pay dividends. We were in compliance with all such covenants at September 30, 2022.

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 ITEM 6.   EXHIBITS

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.

		UNIVERSAL CORPORATION
		(Registrant)
Date:	November 3, 2022	/s/ Johan C. Kroner
		Johan C. Kroner, Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)
Date:	November 3, 2022	/s/ Scott J. Bleicher
		Scott J. Bleicher, Vice President and Controller
		(Principal Accounting Officer)

42

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 September 30, 2022;

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:	November 3, 2022	/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 September 30, 2022;

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:	November 3, 2022	/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 September 30, 2022 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:	November 3, 2022	/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 September 30, 2022 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:	November 3, 2022	/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	6 Months Ended
	Sep. 30, 2022	Nov. 01, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Amendment Flag	false
Document Period End Date	Sep. 30, 2022
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		24,555,361
Entity Central Index Key	0000102037
Current Fiscal Year End Date	--03-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023

XML

Consolidated Statements Of Income And Comprehensive Income - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Sales and other operating revenues		$ 650,984	$ 453,955	$ 1,080,806	$ 803,984
Costs and expenses
Cost of goods sold		540,725	361,272	890,829	648,828
Selling, general and administrative expenses		72,373	65,402	138,825	115,246
Other income	[1]	0	(2,532)	0	(2,532)
Restructuring and impairment costs	[2]	0	0	0	2,024
Operating income		37,886	29,813	51,152	40,418
Equity in pretax earnings (loss) of unconsolidated affiliates	[3]	416	2,363	(137)	2,972
Other non-operating income (expense)		(77)	54	(139)	102
Interest income		93	517	330	590
Interest expense		12,270	7,130	18,994	13,338
Income before income taxes and other items		26,048	25,617	32,212	30,744
Income taxes		6,642	3,862	10,005	5,077
Net income		19,406	21,755	22,207	25,667
Less: net loss (income) attributable to noncontrolling interests in subsidiaries		2,449	(2,245)	6,478	200
Net income attributable to Universal Corporation		$ 21,855	$ 19,510	$ 28,685	$ 25,867
Earnings per share:
Basic		$ 0.88	$ 0.79	$ 1.16	$ 1.05
Diluted		$ 0.88	$ 0.78	$ 1.15	$ 1.04
Weighted average common shares outstanding:
Basic		24,779,237	24,776,930	24,774,126	24,745,827
Diluted		24,939,427	24,916,346	24,937,491	24,894,366
Total comprehensive income (loss)
Total comprehensive income (loss), net of income taxes		$ 17,578	$ 13,669	$ 16,295	$ 26,415
Less: comprehensive (income) loss attributable to noncontrolling interests		2,737	(2,060)	7,095	356
Comprehensive income (loss) attributable to Universal Corporation		$ 20,315	$ 11,609	$ 23,390	$ 26,771
Dividends declared per common share		$ 0.79	$ 0.78	$ 1.58	$ 1.56

[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	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021
ASSETS
Cash and cash equivalents	$ 58,855	$ 81,648	$ 100,682
Accounts receivable, net	469,406	385,437	297,442
Advances to suppliers, net	106,475	129,838	82,192
Accounts receivable—unconsolidated affiliates	51,179	4,540	63,112
Inventories—at lower of cost or net realizable value:
Tobacco	968,167	822,513	854,331
Other	234,581	194,161	161,001
Prepaid income taxes	14,820	13,095	23,112
Other current assets	87,910	116,779	76,050
Total current assets	1,991,393	1,748,011	1,657,922
Property, plant and equipment
Land	23,998	23,959	22,502
Buildings	300,925	293,935	289,939
Machinery and equipment	659,409	668,451	653,789
Total property, plant and equipment	984,332	986,345	966,230
Less accumulated depreciation	(643,584)	(641,227)	(630,766)
Property, plant and equipment, net	340,748	345,118	335,464
Other assets
Operating lease right-of-use assets	43,278	40,243	33,790
Goodwill, net	213,803	213,998	172,964
Other intangibles, net	86,129	92,571	67,510
Investments in unconsolidated affiliates	70,878	81,006	84,517
Deferred income taxes	18,180	11,616	17,193
Pension asset	12,740	12,667	13,381
Other noncurrent assets	36,848	41,115	43,057
Total other assets	481,856	493,216	432,412
Total assets	2,813,997	2,586,345	2,425,798
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable and overdrafts	582,382	182,639	184,982
Accounts payable and accrued expenses	167,153	272,042	157,082
Accounts payable—unconsolidated affiliates	0	5,308	2,414
Customer advances and deposits	12,644	13,724	25,219
Accrued compensation	20,944	27,281	19,591
Income taxes payable	4,589	7,427	1,136
Current portion of operating lease liabilities	10,735	10,303	8,985
Current portion of long-term debt	0	0	0
Total current liabilities	798,447	518,724	399,409
Long-term debt	518,923	518,547	518,422
Pensions and other postretirement benefits	49,398	52,890	54,598
Long-term operating lease liabilities	27,905	29,617	22,530
Other long-term liabilities	15,302	34,464	55,174
Deferred income taxes	49,289	47,334	42,239
Total liabilities	1,459,264	1,201,576	1,092,372
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 24,555,361 shares issued and outstanding at September 30, 2022 (24,607,384 at September 30, 2021 and 24,550,019 at March 31, 2022)	333,540	330,662	328,836
Retained earnings	1,080,920	1,094,192	1,074,629
Accumulated other comprehensive loss	(89,606)	(84,311)	(106,133)
Total Universal Corporation shareholders' equity	1,324,854	1,340,543	1,297,332
Noncontrolling interests in subsidiaries	29,879	44,226	36,094
Total shareholders' equity	1,354,733	1,384,769	1,333,426
Total liabilities and shareholders' equity	$ 2,813,997	$ 2,586,345	$ 2,425,798

XML

Consolidated Balance Sheets (Parenthetical) - shares	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021
Common Stock [Member]
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, shares issued	24,555,361	24,550,019	24,607,384
Common stock, shares outstanding	24,555,361	24,550,019	24,607,384
Series A Junior Participating Preferred Stock [Member]
Preferred stock, shares authorized	500,000	500,000	500,000
Preferred stock, shares issued	0	0	0
Preferred stock, shares outstanding	0	0	0

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$ 19,406	$ 21,755	$ 22,207	$ 25,667
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization				28,294	25,096
Net provision for losses (recoveries) on advances to suppliers				(1,034)	(44)
Foreign currency remeasurement (gain) loss, net				6,191	6,955
Foreign currency exchange contracts				13,562	2,486
Restructuring and impairment costs	[1]	0	0	0	2,024
Restructuring payments				0	(3,203)
Change in estimated fair value of contingent consideration for FruitSmart acquisition				0	(2,532)
Other, net				7,709	(4,916)
Changes in operating assets and liabilities, net				(423,177)	(172,304)
Net cash provided (used) by operating activities				(346,248)	(120,771)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment				(26,588)	(18,645)
Proceeds from sale of business, net of cash held by the business				1,168	0
Proceeds from sale of property, plant and equipment				1,644	6,767
Net cash used by investing activities				(23,776)	(11,878)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of short-term debt, net				399,924	82,250
Dividends paid to noncontrolling interests		(1,680)	(3,696)	(6,825)	(4,676)
Repurchase of common stock				(3,448)	0
Dividends paid on common stock				(38,594)	(38,047)
Other				(1,869)	(2,996)
Net cash provided (used) by financing activities				349,188	36,531
Effect of exchange rate changes on cash, restricted cash and cash equivalents				(1,957)	(421)
Net decrease in cash, restricted cash and cash equivalents				(22,793)	(96,539)
Cash, restricted cash and cash equivalents at beginning of year				87,648	203,221
Cash, restricted cash and cash equivalents at end of period		64,855	106,682	64,855	106,682
Supplemental Cash Flow Information [Abstract]
Cash and cash equivalents		58,855	100,682	58,855	100,682
Restricted cash (Other noncurrent assets)		6,000	6,000	6,000	6,000
Total cash, restricted cash and cash equivalents		$ 64,855	$ 106,682	$ 64,855	$ 106,682

[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	6 Months Ended
	Sep. 30, 2022
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, 2022 (the “2022 Annual Report on Form 10-K”).    While the business environment in most of the jurisdictions in which we operate continues to move toward a state resembling pre-pandemic conditions, 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 continues to depend on future developments, which are highly uncertain and cannot be predicted. Such developments may include the ongoing geographic spread and mutations and subvariants 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 September 30, 2022, 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

6 Months Ended

Sep. 30, 2022

Accounting Standards Update and Change in Accounting Principle [Abstract]

Accounting Pronouncements

ACCOUNTING PRONOUNCEMENTS

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 does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.

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Business Combinations

6 Months Ended

Sep. 30, 2022

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

BUSINESS COMBINATION

Acquisition of Shank's Extracts, LLC

On October 4, 2021, the Company acquired 100% of the capital stock of Shank's Extracts, LLC. (“Shank's”), a flavors and extracts processing company, for approximately $100 million in cash and $2.4 million of additional working capital on-hand at the date of acquisition. The acquisition of Shank's diversifies the Company's product offerings and generates new opportunities for its plant-based ingredients platform.

A portion of the goodwill recorded as part of the acquisition was attributable to the assembled workforce of Shank's. The goodwill and intangibles recognized for the Shank's acquisition are deductible for U.S. income tax purposes. The transaction was treated as an asset acquisition for U.S. Federal tax purposes, resulting in a step-up of tax basis to fair value. The Company determined the Shank's operations are not material to the Company’s consolidated results. Therefore, pro forma information is not presented.

For the fiscal year ended March 31, 2022, the Company incurred $2.3 million of acquisition-related transaction costs for the purchase of Shank's. The acquisition-related costs were expensed as incurred and recorded in selling, general, and administrative expense on the consolidated statements of income.

In November 2021, the Company acquired the land and buildings utilized by Shank's operations for $13.3 million. The purchase of the land and buildings resulted in the elimination of the $8.5 million operating lease right-of-use asset and lease liability recognized on the acquisition date for Shank's.

The following table summarizes the final purchase price allocation of the assets acquired and liabilities assumed for the Shank's acquisition.

(in thousands of dollars)
	Shank's
	October 4, 2021
Assets
Cash and cash equivalents	$	754
Accounts receivable, net	6,643
Inventory	15,792
Other current assets	415
Property, plant and equipment (net)	11,000
Operating lease right-of-use assets	8,531
Intangibles
Customer relationships	24,000
Developed technology	4,500
Non-compete agreements	3,000
Goodwill	41,061
Total assets acquired	115,696
Liabilities
Accounts payable and accrued expenses	6,159
Customer advances and deposits	351
Accrued compensation	655
Current portion of operating lease liabilities	8,531
Total liabilities assumed	15,696
Total assets acquired and liabilities assumed	$	100,000

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Restructuring and Related Activities

6 Months Ended

Sep. 30, 2022

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.

There were no restructuring and impairment costs incurred for the three and six months ended September 30, 2022.

Tobacco Operations

During the six months ended September 30, 2021, the Company incurred $1.5 million of termination and impairment costs associated with restructuring of tobacco buying and administrative operations in Africa.

Ingredients Operations

During the six months ended September 30, 2021, the Company incurred $0.5 million of impairment costs on property, plant, and equipment associated with wind-down of Carolina Innovative Food Ingredients, Inc. (“CIFI”), a sweet potato processing operation located in Nashville, North Carolina that was announced in fiscal year 2021.

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Revenue from Contract with Customer

6 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

REVENUE FROM CONTRACTS WITH CUSTOMERSThe 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. Additionally, the Company has fruit and vegetable processing operations, as well as flavor and extract services 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. Shipping and handling costs under sales contracts with customers are treated as fulfillment costs and included in the transaction price. 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. 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 the acquisition of established companies that offer customers a wide range of both liquid and dehydrated fruit and vegetable ingredient products, flavors, and extracts. These operations procure raw materials from domestic and international growers and suppliers and through a variety of processing steps including sorting, cleaning, pressing, mixing, extracting, 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 September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Tobacco sales	$	544,879	$	370,702	$	864,896	$	640,966
Ingredient sales	76,059		52,517		153,605		104,405
Processing revenue	14,038		16,048		33,530		32,744
Other sales and revenue from contracts with customers	15,028		13,980		27,095		24,745
Total revenue from contracts with customers	650,004		453,247		1,079,126		802,860
Other operating sales and revenues	980		708		1,680		1,124
Consolidated sales and other operating revenues	$	650,984	$	453,955	$	1,080,806	$	803,984

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

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Other Contingent Liabilities And Other Matters

6 Months Ended

Sep. 30, 2022

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 September 30, 2022, 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 $10 million. Those amounts are based on the exchange rate for the Brazilian currency at September 30, 2022. 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 September 30, 2022, 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 September 30, 2022 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 September 30, 2022.

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 September 30, 2022 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 September 30, 2022.

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 $122 million at September 30, 2022, $98 million at September 30, 2021, and $153 million at March 31, 2022. The related valuation allowances totaled $14 million at September 30, 2022, $14 million at September 30, 2021, and $19 million at March 31, 2022, and were estimated based on the Company’s historical loss information and crop projections. The allowances were decreased by net recoveries of approximately $1.0 million and $44 thousand in the six-month periods ended September 30, 2022 and 2021, respectively. These net recoveries are included in selling, general, and administrative expenses in the consolidated statements of income. Interest on advances is recognized in earnings upon the farmers’ delivery of tobacco in payment of principal and interest.

Recoverable Value-Added Tax Credits

In many foreign countries, the Company’s local operating subsidiaries pay significant amounts of 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 September 30, 2022, the aggregate balance of recoverable tax credits held by the Company’s subsidiaries totaled approximately $70 million ($55 million at September 30, 2021, and $67 million at March 31, 2022), and the related valuation allowances totaled approximately $24 million ($20 million at September 30, 2021, and $21 million at March 31, 2022). The net balances are reported in other current assets and other noncurrent assets in the consolidated balance sheets.

Long-Term Debt

At September 30, 2022, the Company had a $225 million five-year term loan maturing December 2023 and a $295 million seven-year term loan maturing December 2025. Under the Company's senior unsecured bank credit facility, $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 September 30, 2022. 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 authorized the purchase of up to $100,000,000 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 $93 million of remaining capacity for repurchases of common and/or preferred stock at September 30, 2022. This stock repurchase program was replaced on November 2, 2022 when the Company's Board of Directors authorized a new stock repurchase plan up to $100,000,000 in common and/or preferred stock through November 15, 2024 or when funds for the program have been exhausted, subject to market conditions and other factors.

Sale of Idled Tanzania Operations

During the six months ended September 30, 2022, the Company entered into a sales agreement to sell all outstanding shares of common stock, which included all properties, of the idled companies in Tanzania for $8.5 million. The Company received $1.3 million when the transaction closed in June 2022. The remaining proceeds are expected to be received in installments by June 2023.

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Earnings Per Share

6 Months Ended

Sep. 30, 2022

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 September 30,				Six Months Ended September 30,
(in thousands, except share and per share data)	2022		2021		2022		2021
Basic Earnings Per Share
Numerator for basic earnings per share
Net income attributable to Universal Corporation	$	21,855	$	19,510	$	28,685	$	25,867
Denominator for basic earnings per share
Weighted average shares outstanding	24,779,237		24,776,930		24,774,126		24,745,827
Basic earnings per share	$	0.88	$	0.79	$	1.16	$	1.05
Diluted Earnings Per Share
Numerator for diluted earnings per share
Net income attributable to Universal Corporation	$	21,855	$	19,510	$	28,685	$	25,867
Denominator for diluted earnings per share:
Weighted average shares outstanding	24,779,237		24,776,930		24,774,126		24,745,827
Effect of dilutive securities
Employee and outside director share-based awards	160,190		139,416		163,365		148,539
Denominator for diluted earnings per share	24,939,427		24,916,346		24,937,491		24,894,366
Diluted earnings per share	$	0.88	$	0.78	$	1.15	$	1.04

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Income Taxes

6 Months Ended

Sep. 30, 2022

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 Company's consolidated effective income tax rate for the three and six months ended September 30, 2022 was 25.5% and 31.1%, respectively. The consolidated effective income tax rate for the six months ended September 30, 2022 was affected by the sale of the Company's idled Tanzania operations that resulted in $1.1 million of additional income taxes. Without this item, them consolidated effective income tax rate for the six months ended September 30, 2022 would have been approximately 27.5%. Additionally, the sale of the Company's idled Tanzania operations resulted in a $1.8 million reduction to consolidated interest expense related to the removal of an uncertain tax position.

    The Company's consolidated effective income tax rate for the three and six months ended September 30, 2021 was 15.1% and 16.5%, respectively. The consolidated effective income tax rate for the three and six months ended September 20, 2021 was affected by a $1.7 million benefit related to a final tax ruling at a foreign subsidiary. Without this item, the consolidated effective income tax rate for the three and six months ended September 30, 2021 would have been approximately 21.7% and 22.0%, respectively

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Goodwill and Other Intangibles Goodwill and Other Intangibles

6 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

GOODWILL AND OTHER INTANGIBLES

The Company's changes in goodwill at September 30, 2022 and 2021 consisted of the following:

(in thousands of dollars)	Six Months Ended September 30,
	2022		2021
Balance at beginning of fiscal year	$	213,998	$	173,051
Foreign currency translation adjustment	(195)		(87)
Balance at end of period	$	213,803	$	172,964

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 September 30, 2022 and 2021 and at March 31, 2022:

(in thousands, except useful life)				September 30, 2022
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	86,500	$	(13,828)	$	72,672
Trade names		5		11,100		(4,935)		6,165
Developed technology	3	—	13	9,300		(4,746)		4,554
Noncompetition agreements	4	—	5	4,000		(1,300)		2,700
Other		5		639		(601)		38
Total intangible assets				$	111,539	$	(25,410)	$	86,129

				September 30, 2021
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	62,500	$	(6,097)	$	56,403
Trade names		5		11,100		(2,715)		8,385
Developed technology		3		4,800		(2,800)		2,000
Noncompetition agreements		5		1,000		(350)		650
Other		5		764		(692)		72
Total intangible assets				$	80,164	$	(12,654)	$	67,510

				March 31, 2022
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships(1)	11	—	13	$	86,500	$	(9,963)	$	76,537
Trade names		5		11,100		(3,825)		7,275
Developed technology(1)	3	—	13	9,300		(3,773)		5,527
Noncompetition agreements(1)	4	—	5	4,000		(825)		3,175
Other		5		736		(679)		57
Total intangible assets				$	111,636	$	(19,065)	$	92,571

(1)On October 4, 2021, the Company acquired 100% of the capital stock of Shank's for approximately $100 million in cash and $2.4 million of additional working capital on-hand at the date of acquisition. The Shank's acquisition resulted in $31.5 million of intangible assets. 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 and six months ended September 30, 2022 and 2021 was:

(in thousands of dollars)	Three Months Ended September 30,				Six Months Ended September 30,
	2022		2020		2022		2021
Amortization Expense	$	3,172	$	2,853	$	6,345	$	5,256

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

As of September 30, 2022, the expected future amortization expense for intangible assets is as follows:

Fiscal Year (in thousands of dollars)
2023 (excluding the six months ended September 30, 2022)	$	6,044
2024	11,264
2025	11,812
2026	8,452
2027 and thereafter	48,557
Total expected future amortization expense	$	86,129

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Leases

6 Months Ended

Sep. 30, 2022

Leases [Abstract]

Lessee, Operating Leases

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)	September 30, 2022		September 30, 2021		March 31, 2022
Assets
Operating lease right-of-use assets	$	43,278	$	33,790	$	40,243
Liabilities
Current portion of operating lease liabilities	$	10,735	$	8,985	$	10,303
Long-term operating lease liabilities	27,905		22,530		29,617
Total operating lease liabilities	$	38,640	$	31,515	$	39,920

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

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Income Statement Location
Cost of goods sold	$	2,632	$	2,721	$	5,336	$	5,299
Selling, general, and administrative expenses	2,718		2,261		5,221		4,566
Total operating lease costs(1)	$	5,350	$	4,982	$	10,557	$	9,865

(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)	September 30, 2022
Maturity of Operating Lease Liabilities
2023 (excluding the six months ended September 30, 2022)	$	6,498
2024	11,325
2025	8,983
2026	5,744
2027	4,379
2028 and thereafter	8,545
Total undiscounted cash flows for operating leases	$	45,474
Less: Imputed interest	(6,834)
Total operating lease liabilities	$	38,640

As of September 30, 2022, the Company had no leases that have not yet commenced.

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

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands, except lease term and incremental borrowing rate)	2022		2021		2022			2021
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,378	$	2,840	$	6,668		$	5,617
Right-of-use assets obtained in exchange for new operating leases	6,198		6,310		10,725			9,051
Weighted Average Remaining Lease Term (years)					5.13			5.51
Weighted Average Collateralized Incremental Borrowing Rate					5.68		%	4.02		%

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Derivatives And Hedging Activities

6 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives And Hedging Activities

DERIVATIVES AND HEDGING ACTIVITIESUniversal 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 September 30, 2022, the total notional amount of the interest rate swaps was $370 million, which corresponded with the 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 September 30, 2022, 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 was amortized from accumulated other comprehensive loss into earnings as a reduction of interest expense through the original maturity dates of those agreements. As of September 30, 2022, the entire deferred gain has been amortized.

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 six-month periods in fiscal years 2023 and 2022 was as follows:

	Six Months Ended September 30,
(in millions of dollars)	2022		2021
Tobacco purchases	$	30.4	$	99.7
Processing costs	5.4		18.7
Crop input sales	—		20.8
Total	$	35.8	$	139.2

Fluctuations 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.

The table below presents the expected timing of when the remaining accumulated other comprehensive gains and losses as of September 30, 2022 for cash flows hedges of tobacco purchases and crop input sales are expected to be recognized in earnings.

Hedging Program	Crop Year	Geographic Location(s)	Fiscal Year Earnings
Tobacco purchases	2023	Brazil	2024
Tobacco purchases	2022	Brazil, Africa	2023
Crop input sales	2023	Brazil	2024
Crop input sales	2022	Brazil	2023

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 September 30, 2022 and 2021, and March 31, 2022, were approximately $112.3 million, $22.3 million, and $59.5 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 September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Cash Flow Hedges - Interest Rate Swap Agreements
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	9,348	$	(253)	$	13,249	$	(1,649)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(266)	$	(2,257)	$	(1,871)	$	(4,480)
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	$	—	$	355	$	—	$	708
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	$	943	$	(5,234)	$	(4)	$	2,999
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	2,084	$	1,805	$	3,041	$	1,289
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	$	605	$	(217)	$	(520)	$	451
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	$	(1,310)	$	(839)	$	(2,317)	$	3,765
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 $3.1 million remained in accumulated other comprehensive loss at September 30, 2022. That balance reflects gains and losses on contracts related to the 2023 and 2022 Brazil crops, the 2022 Africa crop, and the 2023 and 2022 Brazil crop input sales, less the amounts reclassified to earnings related to tobacco sold through September 30, 2022. 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 September 30, 2022 and 2021, and March 31, 2022:

	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)		September 30, 2022		September 30, 2021		March 31, 2022			September 30, 2022		September 30, 2021		March 31, 2022
Derivatives Designated as Hedging Instruments
Interest rate swap agreements	Other non-current assets	$	13,959	$	—	$	—	Other long-term liabilities	$	—	$	22,888	$	1,161
Foreign currency exchange contracts	Other current assets	934		889		10,957		Accounts payable and accrued expenses	—		3,152		3,200
Total		$	14,893	$	889	$	10,957		$	—	$	26,040	$	4,361
Derivatives Not Designated as Hedging Instruments
Foreign currency exchange contracts	Other current assets	$	2,605	$	1,028	$	13,111	Accounts payable and accrued expenses	$	181	$	639	$	64
Total		$	2,605	$	1,028	$	13,111		$	181	$	639	$	64

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

6 Months Ended

Sep. 30, 2022

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 September 30, 2022 and 2021, and at March 31, 2022, 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:

	September 30, 2022
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	334	$	—	$	—	$	—	$	334
Trading securities associated with deferred compensation plans	—		10,845		—		—		10,845
Interest rate swap agreements	—		—		13,959		—		13,959
Foreign currency exchange contracts	—		—		3,539		—		3,539
Total financial assets measured and reported at fair value	$	334	$	10,845	$	17,498	$	—	$	28,677
Liabilities
Foreign currency exchange contracts	$	—	$	—	$	181	$	—	$	181
Total financial liabilities measured and reported at fair value	$	—	$	—	$	181	$	—	$	181

	September 30, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	335	$	—	$	—	$	—	$	335
Trading securities associated with deferred compensation plans	—		14,557		—		—		14,557
Foreign currency exchange contracts	—		—		1,917		—		1,917
Total financial assets measured and reported at fair value	$	335	$	14,557	$	1,917	$	—	$	16,809
Liabilities
Interest rate swap agreements	$	—	$	—	$	22,888	$	—	$	22,888
Foreign currency exchange contracts	—		—		3,791		—		3,791
Total financial liabilities measured and reported at fair value	$	—	$	—	$	26,679	$	—	$	26,679

	March 31, 2022
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	334	$	—	$	—	$	—	$	334
Trading securities associated with deferred compensation plans	—		13,655		—		—		13,655
Foreign currency exchange contracts	—		—		24,068		—		24,068
Total financial assets measured and reported at fair value	$	334	$	13,655	$	24,068	$	—	$	38,057
Liabilities
Interest rate swap agreements	$	—	$	—	$	1,161	$	—	$	1,161
Foreign currency exchange contracts	—		—		3,264		—		3,264
Total financial liabilities measured and reported at fair value	$	—	$	—	$	4,425	$	—	$	4,425

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. ("FruitSmart") 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. During the year ended March 31, 2022, the evaluation of the contingent liability resulted in a reduction of the remaining $2.5 million contingent consideration recorded. Significant judgment is applied to this model and therefore the acquisition-related contingent consideration obligation was 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 six months ended September 30, 2022 and 2021 is provided below.

(in thousands of dollars)	Six Months Ended September 30,
	2022		2021
Balance beginning of year	$	—	$	2,532
Change in fair value of contingent consideration liability			(2,532)
Balance at end of period	$	—	$	—

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 September 30, 2022, and 2021 and March 31, 2022:

(in millions of dollars)	September 30, 2022		September 30, 2021		March 31, 2022
Fair market value of long term obligations	$	517	$	518	$	517
Carrying value of long term obligations	$	520	$	520	$	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.

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Pension And Other Postretirement Benefit Plans

6 Months Ended

Sep. 30, 2022

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 September 30,				Three Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Service cost	$	1,503	$	1,653	$	32	$	47
Interest cost	2,351		2,254		235		241
Expected return on plan assets	(3,324)		(3,387)		(19)		(22)
Net amortization and deferral	1,001		976		(167)		(116)
Net periodic benefit cost	$	1,531	$	1,496	$	81	$	150

	Pension Benefits				Other Postretirement Benefits
	Six Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Service cost	$	3,048	$	3,303	$	64	$	94
Interest cost	4,686		4,513		476		480
Expected return on plan assets	(6,648)		(6,772)		(38)		(44)
Net amortization and deferral	2,002		1,952		(339)		(231)
Net periodic benefit cost	$	3,088	$	2,996	$	163	$	299

During the six months ended September 30, 2022, the Company made contributions of approximately $3.2 million to its pension plans. Additional contributions of $0.9 million are expected during the remaining six months of fiscal year 2023.

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Stock-Based Compensation

6 Months Ended

Sep. 30, 2022

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.

RSUs awarded prior to fiscal year 2022 vest 5 years after the grant date and those awarded beginning in fiscal year 2022 vest 3 years after the grant date. After vesting RSUs are 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 1 year after the grant date. Restricted shares vest upon the individual’s retirement from service as a director.

During the six-month periods ended September 30, 2022 and 2021, Universal issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

	Six Months Ended September 30,
	2022		2021
RSUs:
Number granted	79,405		72,860
Grant date fair value	$	62.17	$	56.31
PSUs:
Number granted	48,315		48,650
Grant date fair value	$	54.46	$	47.95

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 six-month periods ended September 30, 2022 and 2021, the Company recorded total stock-based compensation expense of approximately $5.5 million and $4.1 million, respectively. The Company expects to recognize stock-based compensation expense of approximately $2.5 million during the remaining six months of fiscal year 2023.

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Operating Segments

6 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Operating Segments

OPERATING SEGMENTS

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, dehydrated products, flavors, and botanical extracts. Customers for the Ingredients Operations segment include large multinational food and beverage companies, smaller independent manufacturers, and retail organizations. FruitSmart, Silva, and Shank's 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. Shank's manufactures flavors and botanical extracts and also offers bottling and custom packaging for customers.

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.

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
SALES AND OTHER OPERATING REVENUES
Tobacco Operations	$	570,030	$	396,765	$	918,093	$	690,608
Ingredients Operations	80,954		57,190		162,713		113,376
Consolidated sales and other operating revenues	$	650,984	$	453,955	$	1,080,806	$	803,984
OPERATING INCOME
Tobacco Operations	$	33,790	$	26,914	$	41,906	$	35,803
Ingredients Operations	4,512		2,730		9,109		7,079
Segment operating income	38,302		29,644		51,015		42,882
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1)	(416)		(2,363)		137		(2,972)
Restructuring and impairment costs (2)	—		—		—		(2,024)
Add: Other income (loss)(3)	—		2,532		—		2,532
Consolidated operating income	$	37,886	$	29,813	$	51,152	$	40,418

(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)

6 Months Ended

Sep. 30, 2022

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 six months ended September 30, 2022 and 2021:

	Six Months Ended September 30,
(in thousands of dollars)	2022		2021
Foreign currency translation:
Balance at beginning of year	$	(40,965)	$	(35,135)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on foreign currency translation	(13,642)		(2,360)
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests	617		156
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	(13,025)		(2,204)
Balance at end of period	$	(53,990)	$	(37,339)
Foreign currency hedge:
Balance at beginning of year	$	3,579	$	(414)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(158) and $(512))	(4,146)		538
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $600 and $271) (1)	(1,214)		(718)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	(5,360)		(180)
Balance at end of period	$	(1,781)	$	(594)
Interest rate hedge:
Balance at beginning of year	$	(860)	$	(19,480)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(2,782) and $346)	10,467		(1,303)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(393) and $(792)) (2)	1,478		2,980
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	11,945		1,677
Balance at end of period	$	11,085	$	(17,803)
Pension and other postretirement benefit plans:
Balance at beginning of year	$	(46,065)	$	(52,008)
Other comprehensive income (loss) attributable to Universal Corporation:
Amortization included in earnings (net of tax expense (benefit) of $(285) and $(354))(3)	1,145		1,611
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	1,145		1,611
Balance at end of period	$	(44,920)	$	(50,397)
Total accumulated other comprehensive loss at end of period	$	(89,606)	$	(106,133)

(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

6 Months Ended

Sep. 30, 2022

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 and six months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of three-month period	$	1,325,763	$	34,296	$	1,360,059	$	1,303,825	$	37,730	$	1,341,555
Changes in common stock
Repurchase of common stock	(893)		—		(893)		—		—		—
Accrual of stock-based compensation	1,622		—		1,622		1,119		—		1,119
Withholding of shares from stock-based compensation for grantee income taxes	—		—		—		(26)		—		(26)
Dividend equivalents on RSUs	291		—		291		272		—		272
Changes in retained earnings
Net income	21,855		(2,449)		19,406		19,510		2,245		21,755
Cash dividends declared
Common stock	(19,398)		—		(19,398)		(19,195)		—		(19,195)
Repurchase of common stock	(2,555)		—		(2,555)		—		—		—
Dividend equivalents on RSUs	(291)		—		(291)		(272)		—		(272)
Other comprehensive income (loss)	(1,540)		(288)		(1,828)		(7,901)		(185)		(8,086)
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(1,680)		(1,680)		—		(3,696)		(3,696)
Balance at end of period	$	1,324,854	$	29,879	$	1,354,733	$	1,297,332	$	36,094	$	1,333,426

	Six Months Ended September 30, 2022						Six Months Ended September 30, 2021
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of year	$	1,340,543	$	44,226	$	1,384,769	$	1,307,299	$	41,126	$	1,348,425
Changes in common stock
Repurchase of common stock	(893)		—		(893)		—		—		—
Accrual of stock-based compensation	5,304		—		5,304		4,085		—		4,085
Withholding of shares from stock-based compensation for grantee income taxes	(2,090)		—		(2,090)		(2,458)		—		(2,458)
Dividend equivalents on RSUs	557		—		557		536		—		536
Changes in retained earnings
Net income	28,685		(6,478)		22,207		25,867		(200)		25,667
Cash dividends declared
Common stock	(38,845)		—		(38,845)		(38,365)		—		(38,365)
Repurchase of common stock	(2,555)		—		(2,555)		—		—		—
Dividend equivalents on RSUs	(557)		—		(557)		(536)		—		(536)
Other comprehensive income (loss)	(5,295)		(617)		(5,912)		904		(156)		748
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(6,825)		(6,825)		—		(4,676)		(4,676)
Other	—		(427)		(427)		—		—		—
Balance at end of period	$	1,324,854	$	29,879	$	1,354,733	$	1,297,332	$	36,094	$	1,333,426

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Business Combinations Business Combinations (Tables)

6 Months Ended

Sep. 30, 2022

Business Combinations [Abstract]

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

The following table summarizes the final purchase price allocation of the assets acquired and liabilities assumed for the Shank's acquisition.

(in thousands of dollars)
	Shank's
	October 4, 2021
Assets
Cash and cash equivalents	$	754
Accounts receivable, net	6,643
Inventory	15,792
Other current assets	415
Property, plant and equipment (net)	11,000
Operating lease right-of-use assets	8,531
Intangibles
Customer relationships	24,000
Developed technology	4,500
Non-compete agreements	3,000
Goodwill	41,061
Total assets acquired	115,696
Liabilities
Accounts payable and accrued expenses	6,159
Customer advances and deposits	351
Accrued compensation	655
Current portion of operating lease liabilities	8,531
Total liabilities assumed	15,696
Total assets acquired and liabilities assumed	$	100,000

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Revenue from Contract with Customer (Tables)

6 Months Ended

Sep. 30, 2022

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 September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Tobacco sales	$	544,879	$	370,702	$	864,896	$	640,966
Ingredient sales	76,059		52,517		153,605		104,405
Processing revenue	14,038		16,048		33,530		32,744
Other sales and revenue from contracts with customers	15,028		13,980		27,095		24,745
Total revenue from contracts with customers	650,004		453,247		1,079,126		802,860
Other operating sales and revenues	980		708		1,680		1,124
Consolidated sales and other operating revenues	$	650,984	$	453,955	$	1,080,806	$	803,984

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

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Earnings Per Share (Tables)

6 Months Ended

Sep. 30, 2022

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 September 30,				Six Months Ended September 30,
(in thousands, except share and per share data)	2022		2021		2022		2021
Basic Earnings Per Share
Numerator for basic earnings per share
Net income attributable to Universal Corporation	$	21,855	$	19,510	$	28,685	$	25,867
Denominator for basic earnings per share
Weighted average shares outstanding	24,779,237		24,776,930		24,774,126		24,745,827
Basic earnings per share	$	0.88	$	0.79	$	1.16	$	1.05
Diluted Earnings Per Share
Numerator for diluted earnings per share
Net income attributable to Universal Corporation	$	21,855	$	19,510	$	28,685	$	25,867
Denominator for diluted earnings per share:
Weighted average shares outstanding	24,779,237		24,776,930		24,774,126		24,745,827
Effect of dilutive securities
Employee and outside director share-based awards	160,190		139,416		163,365		148,539
Denominator for diluted earnings per share	24,939,427		24,916,346		24,937,491		24,894,366
Diluted earnings per share	$	0.88	$	0.78	$	1.15	$	1.04

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Goodwill and Other Intangibles Goodwill and Other Intangibles (Tables)

6 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

The Company's changes in goodwill at September 30, 2022 and 2021 consisted of the following:

(in thousands of dollars)	Six Months Ended September 30,
	2022		2021
Balance at beginning of fiscal year	$	213,998	$	173,051
Foreign currency translation adjustment	(195)		(87)
Balance at end of period	$	213,803	$	172,964

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

The Company's intangible assets subject to amortization consisted of the following at September 30, 2022 and 2021 and at March 31, 2022:

(in thousands, except useful life)				September 30, 2022
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	86,500	$	(13,828)	$	72,672
Trade names		5		11,100		(4,935)		6,165
Developed technology	3	—	13	9,300		(4,746)		4,554
Noncompetition agreements	4	—	5	4,000		(1,300)		2,700
Other		5		639		(601)		38
Total intangible assets				$	111,539	$	(25,410)	$	86,129

				September 30, 2021
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	11	—	13	$	62,500	$	(6,097)	$	56,403
Trade names		5		11,100		(2,715)		8,385
Developed technology		3		4,800		(2,800)		2,000
Noncompetition agreements		5		1,000		(350)		650
Other		5		764		(692)		72
Total intangible assets				$	80,164	$	(12,654)	$	67,510

				March 31, 2022
	Useful Life (years)			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships(1)	11	—	13	$	86,500	$	(9,963)	$	76,537
Trade names		5		11,100		(3,825)		7,275
Developed technology(1)	3	—	13	9,300		(3,773)		5,527
Noncompetition agreements(1)	4	—	5	4,000		(825)		3,175
Other		5		736		(679)		57
Total intangible assets				$	111,636	$	(19,065)	$	92,571

(1)On October 4, 2021, the Company acquired 100% of the capital stock of Shank's for approximately $100 million in cash and $2.4 million of additional working capital on-hand at the date of acquisition. The Shank's acquisition resulted in $31.5 million of intangible assets. 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 and six months ended September 30, 2022 and 2021 was:

(in thousands of dollars)	Three Months Ended September 30,				Six Months Ended September 30,
	2022		2020		2022		2021
Amortization Expense	$	3,172	$	2,853	$	6,345	$	5,256

Amortization expense for the developed technology intangible asset is recorded in cost of goods sold in the consolidated statements of income. The amortization expense for 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 September 30, 2022, the expected future amortization expense for intangible assets is as follows:

Fiscal Year (in thousands of dollars)
2023 (excluding the six months ended September 30, 2022)	$	6,044
2024	11,264
2025	11,812
2026	8,452
2027 and thereafter	48,557
Total expected future amortization expense	$	86,129

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Leases of Lessess (Tables)

6 Months Ended

Sep. 30, 2022

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)	September 30, 2022		September 30, 2021		March 31, 2022
Assets
Operating lease right-of-use assets	$	43,278	$	33,790	$	40,243
Liabilities
Current portion of operating lease liabilities	$	10,735	$	8,985	$	10,303
Long-term operating lease liabilities	27,905		22,530		29,617
Total operating lease liabilities	$	38,640	$	31,515	$	39,920

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 statements of income:

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Income Statement Location
Cost of goods sold	$	2,632	$	2,721	$	5,336	$	5,299
Selling, general, and administrative expenses	2,718		2,261		5,221		4,566
Total operating lease costs(1)	$	5,350	$	4,982	$	10,557	$	9,865

(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)	September 30, 2022
Maturity of Operating Lease Liabilities
2023 (excluding the six months ended September 30, 2022)	$	6,498
2024	11,325
2025	8,983
2026	5,744
2027	4,379
2028 and thereafter	8,545
Total undiscounted cash flows for operating leases	$	45,474
Less: Imputed interest	(6,834)
Total operating lease liabilities	$	38,640

Supplemental information related to operating leases [Table Text Block]

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

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands, except lease term and incremental borrowing rate)	2022		2021		2022			2021
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,378	$	2,840	$	6,668		$	5,617
Right-of-use assets obtained in exchange for new operating leases	6,198		6,310		10,725			9,051
Weighted Average Remaining Lease Term (years)					5.13			5.51
Weighted Average Collateralized Incremental Borrowing Rate					5.68		%	4.02		%

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Derivatives And Hedging Activities (Tables)

6 Months Ended

Sep. 30, 2022

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 six-month periods in fiscal years 2023 and 2022 was as follows:

	Six Months Ended September 30,
(in millions of dollars)	2022		2021
Tobacco purchases	$	30.4	$	99.7
Processing costs	5.4		18.7
Crop input sales	—		20.8
Total	$	35.8	$	139.2

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 September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Cash Flow Hedges - Interest Rate Swap Agreements
Derivative
Effective Portion of Hedge
Gain (loss) recorded in accumulated other comprehensive loss	$	9,348	$	(253)	$	13,249	$	(1,649)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	(266)	$	(2,257)	$	(1,871)	$	(4,480)
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	$	—	$	355	$	—	$	708
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	$	943	$	(5,234)	$	(4)	$	2,999
Gain (loss) reclassified from accumulated other comprehensive loss into earnings	$	2,084	$	1,805	$	3,041	$	1,289
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	$	605	$	(217)	$	(520)	$	451
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	$	(1,310)	$	(839)	$	(2,317)	$	3,765
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 September 30, 2022 and 2021, and March 31, 2022:

	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)		September 30, 2022		September 30, 2021		March 31, 2022			September 30, 2022		September 30, 2021		March 31, 2022
Derivatives Designated as Hedging Instruments
Interest rate swap agreements	Other non-current assets	$	13,959	$	—	$	—	Other long-term liabilities	$	—	$	22,888	$	1,161
Foreign currency exchange contracts	Other current assets	934		889		10,957		Accounts payable and accrued expenses	—		3,152		3,200
Total		$	14,893	$	889	$	10,957		$	—	$	26,040	$	4,361
Derivatives Not Designated as Hedging Instruments
Foreign currency exchange contracts	Other current assets	$	2,605	$	1,028	$	13,111	Accounts payable and accrued expenses	$	181	$	639	$	64
Total		$	2,605	$	1,028	$	13,111		$	181	$	639	$	64

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Fair Value Measurements (Tables)

6 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

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

At September 30, 2022 and 2021, and at March 31, 2022, 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:

	September 30, 2022
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	334	$	—	$	—	$	—	$	334
Trading securities associated with deferred compensation plans	—		10,845		—		—		10,845
Interest rate swap agreements	—		—		13,959		—		13,959
Foreign currency exchange contracts	—		—		3,539		—		3,539
Total financial assets measured and reported at fair value	$	334	$	10,845	$	17,498	$	—	$	28,677
Liabilities
Foreign currency exchange contracts	$	—	$	—	$	181	$	—	$	181
Total financial liabilities measured and reported at fair value	$	—	$	—	$	181	$	—	$	181

	September 30, 2021
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	335	$	—	$	—	$	—	$	335
Trading securities associated with deferred compensation plans	—		14,557		—		—		14,557
Foreign currency exchange contracts	—		—		1,917		—		1,917
Total financial assets measured and reported at fair value	$	335	$	14,557	$	1,917	$	—	$	16,809
Liabilities
Interest rate swap agreements	$	—	$	—	$	22,888	$	—	$	22,888
Foreign currency exchange contracts	—		—		3,791		—		3,791
Total financial liabilities measured and reported at fair value	$	—	$	—	$	26,679	$	—	$	26,679

	March 31, 2022
			Fair Value Hierarchy
(in thousands of dollars)	NAV		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	334	$	—	$	—	$	—	$	334
Trading securities associated with deferred compensation plans	—		13,655		—		—		13,655
Foreign currency exchange contracts	—		—		24,068		—		24,068
Total financial assets measured and reported at fair value	$	334	$	13,655	$	24,068	$	—	$	38,057
Liabilities
Interest rate swap agreements	$	—	$	—	$	1,161	$	—	$	1,161
Foreign currency exchange contracts	—		—		3,264		—		3,264
Total financial liabilities measured and reported at fair value	$	—	$	—	$	4,425	$	—	$	4,425

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 six months ended September 30, 2022 and 2021 is provided below.

(in thousands of dollars)	Six Months Ended September 30,
	2022		2021
Balance beginning of year	$	—	$	2,532
Change in fair value of contingent consideration liability			(2,532)
Balance at end of period	$	—	$	—

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 September 30, 2022, and 2021 and March 31, 2022:

(in millions of dollars)	September 30, 2022		September 30, 2021		March 31, 2022
Fair market value of long term obligations	$	517	$	518	$	517
Carrying value of long term obligations	$	520	$	520	$	520

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Pension And Other Postretirement Benefit Plans (Tables)

6 Months Ended

Sep. 30, 2022

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 September 30,				Three Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Service cost	$	1,503	$	1,653	$	32	$	47
Interest cost	2,351		2,254		235		241
Expected return on plan assets	(3,324)		(3,387)		(19)		(22)
Net amortization and deferral	1,001		976		(167)		(116)
Net periodic benefit cost	$	1,531	$	1,496	$	81	$	150

	Pension Benefits				Other Postretirement Benefits
	Six Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
Service cost	$	3,048	$	3,303	$	64	$	94
Interest cost	4,686		4,513		476		480
Expected return on plan assets	(6,648)		(6,772)		(38)		(44)
Net amortization and deferral	2,002		1,952		(339)		(231)
Net periodic benefit cost	$	3,088	$	2,996	$	163	$	299

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Stock-Based Compensation (Tables)

6 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Awards Issued During The Period

During the six-month periods ended September 30, 2022 and 2021, Universal issued the following stock-based awards, representing the regular annual grants to officers and outside directors of the Company:

	Six Months Ended September 30,
	2022		2021
RSUs:
Number granted	79,405		72,860
Grant date fair value	$	62.17	$	56.31
PSUs:
Number granted	48,315		48,650
Grant date fair value	$	54.46	$	47.95

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Operating Segments (Tables)

6 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Operating Results For The Company's Reportable Segments

Operating results for the Company’s reportable segments for each period presented in the consolidated statements of income and comprehensive income were as follows.

	Three Months Ended September 30,				Six Months Ended September 30,
(in thousands of dollars)	2022		2021		2022		2021
SALES AND OTHER OPERATING REVENUES
Tobacco Operations	$	570,030	$	396,765	$	918,093	$	690,608
Ingredients Operations	80,954		57,190		162,713		113,376
Consolidated sales and other operating revenues	$	650,984	$	453,955	$	1,080,806	$	803,984
OPERATING INCOME
Tobacco Operations	$	33,790	$	26,914	$	41,906	$	35,803
Ingredients Operations	4,512		2,730		9,109		7,079
Segment operating income	38,302		29,644		51,015		42,882
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1)	(416)		(2,363)		137		(2,972)
Restructuring and impairment costs (2)	—		—		—		(2,024)
Add: Other income (loss)(3)	—		2,532		—		2,532
Consolidated operating income	$	37,886	$	29,813	$	51,152	$	40,418

(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)

6 Months Ended

Sep. 30, 2022

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 six months ended September 30, 2022 and 2021:

	Six Months Ended September 30,
(in thousands of dollars)	2022		2021
Foreign currency translation:
Balance at beginning of year	$	(40,965)	$	(35,135)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on foreign currency translation	(13,642)		(2,360)
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests	617		156
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	(13,025)		(2,204)
Balance at end of period	$	(53,990)	$	(37,339)
Foreign currency hedge:
Balance at beginning of year	$	3,579	$	(414)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(158) and $(512))	(4,146)		538
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $600 and $271) (1)	(1,214)		(718)
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	(5,360)		(180)
Balance at end of period	$	(1,781)	$	(594)
Interest rate hedge:
Balance at beginning of year	$	(860)	$	(19,480)
Other comprehensive income (loss) attributable to Universal Corporation:
Net gain (loss) on derivative instruments (net of tax (expense) benefit of $(2,782) and $346)	10,467		(1,303)
Reclassification of (gain) loss to earnings (net of tax expense (benefit) of $(393) and $(792)) (2)	1,478		2,980
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	11,945		1,677
Balance at end of period	$	11,085	$	(17,803)
Pension and other postretirement benefit plans:
Balance at beginning of year	$	(46,065)	$	(52,008)
Other comprehensive income (loss) attributable to Universal Corporation:
Amortization included in earnings (net of tax expense (benefit) of $(285) and $(354))(3)	1,145		1,611
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes	1,145		1,611
Balance at end of period	$	(44,920)	$	(50,397)
Total accumulated other comprehensive loss at end of period	$	(89,606)	$	(106,133)

(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)

6 Months Ended

Sep. 30, 2022

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 and six months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of three-month period	$	1,325,763	$	34,296	$	1,360,059	$	1,303,825	$	37,730	$	1,341,555
Changes in common stock
Repurchase of common stock	(893)		—		(893)		—		—		—
Accrual of stock-based compensation	1,622		—		1,622		1,119		—		1,119
Withholding of shares from stock-based compensation for grantee income taxes	—		—		—		(26)		—		(26)
Dividend equivalents on RSUs	291		—		291		272		—		272
Changes in retained earnings
Net income	21,855		(2,449)		19,406		19,510		2,245		21,755
Cash dividends declared
Common stock	(19,398)		—		(19,398)		(19,195)		—		(19,195)
Repurchase of common stock	(2,555)		—		(2,555)		—		—		—
Dividend equivalents on RSUs	(291)		—		(291)		(272)		—		(272)
Other comprehensive income (loss)	(1,540)		(288)		(1,828)		(7,901)		(185)		(8,086)
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(1,680)		(1,680)		—		(3,696)		(3,696)
Balance at end of period	$	1,324,854	$	29,879	$	1,354,733	$	1,297,332	$	36,094	$	1,333,426

	Six Months Ended September 30, 2022						Six Months Ended September 30, 2021
(in thousands of dollars)	Universal Corporation		Non-controlling Interests		Total		Universal Corporation		Non-controlling Interests		Total
Balance at beginning of year	$	1,340,543	$	44,226	$	1,384,769	$	1,307,299	$	41,126	$	1,348,425
Changes in common stock
Repurchase of common stock	(893)		—		(893)		—		—		—
Accrual of stock-based compensation	5,304		—		5,304		4,085		—		4,085
Withholding of shares from stock-based compensation for grantee income taxes	(2,090)		—		(2,090)		(2,458)		—		(2,458)
Dividend equivalents on RSUs	557		—		557		536		—		536
Changes in retained earnings
Net income	28,685		(6,478)		22,207		25,867		(200)		25,667
Cash dividends declared
Common stock	(38,845)		—		(38,845)		(38,365)		—		(38,365)
Repurchase of common stock	(2,555)		—		(2,555)		—		—		—
Dividend equivalents on RSUs	(557)		—		(557)		(536)		—		(536)
Other comprehensive income (loss)	(5,295)		(617)		(5,912)		904		(156)		748
Other changes in noncontrolling interests
Dividends paid to noncontrolling shareholders	—		(6,825)		(6,825)		—		(4,676)		(4,676)
Other	—		(427)		(427)		—		—		—
Balance at end of period	$	1,324,854	$	29,879	$	1,354,733	$	1,297,332	$	36,094	$	1,333,426

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Business Combinations Business Combinations (Narrative) (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended	6 Months Ended
	Oct. 04, 2021	Nov. 30, 2021	Jun. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2022
Business Acquisition [Line Items]
Payments to Acquire Property, Plant, and Equipment				$ 26,588	$ 18,645
Operating Lease, Liability				$ 38,640	$ 31,515	$ 39,920
Shank's Extracts [Member]
Business Acquisition [Line Items]
Business acquisition percentage of capital stock Acquired	100.00%
Purchase of business, net of cash held by the business	$ 100,000
Working capital adjustments	$ 2,400
Business Combination, Acquisition Related Costs			$ 2,300
Payments to Acquire Property, Plant, and Equipment		$ 13,300
Operating Lease, Liability		$ 8,500

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Business Combinations Business Combinations Assets Acquired and Liabilities Assumed (Silva) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Mar. 31, 2022	Oct. 04, 2021	Sep. 30, 2021	Mar. 31, 2021
Business Acquisition [Line Items]
Goodwill, net	$ 213,803	$ 213,998		$ 172,964	$ 173,051
Shank's Extracts [Member]
Business Acquisition [Line Items]
Cash and cash equivalents			$ 754
Accounts receivable, net			6,643
Inventory			15,792
Other current assets			415
Property, plant and equipment (net)			11,000
Operating lease right-of-use assets			8,531
Customer relationships			24,000
Developed technology			4,500
Non-compete agreements			3,000
Goodwill, net			41,061
Total assets acquired			115,696
Accounts payable and accrued expenses			6,159
Customer advances and deposits			351
Accrued compensation			655
Current portion of operating lease liabilities			8,531
Total liabilities assumed			15,696
Total assets acquired and liabilities assumed			$ 100,000

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Restructuring and Related Activities (Narrative) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment costs	[1]	$ 0	$ 0	$ 0	$ 2,024
Tobacco Operations
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment costs					1,500
Ingredients
Restructuring Cost and Reserve [Line Items]
Impairment, Long-Lived Asset, Held-for-Use					$ 500

[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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Revenue from Contract with Customer (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 650,004	$ 453,247	$ 1,079,126	$ 802,860
Other operating sales and revenues	980	708	1,680	1,124
Sales and other operating revenues	650,984	453,955	1,080,806	803,984
Manufactured Product [Member] | Tobacco Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	544,879	370,702	864,896	640,966
Manufactured Product [Member] | Food Ingredient Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	76,059	52,517	153,605	104,405
Processing revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	14,038	16,048	33,530	32,744
Other sales and revenue from contracts with customers [Member]
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 15,028	$ 13,980	$ 27,095	$ 24,745

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Other Contingent Liabilities And Other Matters (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2022
Other Contingent Liabilities and Other Matters [Line Items]
Other contingent liabilities	$ 1,000	$ 1,000
Net provision for losses (recoveries) on advances to suppliers		(1,034)	$ (44)
Unsecured variable rate debt	150,000	150,000
Proceeds from Sales of Business, Affiliate and Productive Assets	1,300
Sales agreement to sell common stock of subsidiary company, value	8,500
November 2020 Stock Repurchase Plan [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Stock repurchase program authorized amount	100,000	100,000
Stock repurchase program remaining authorized repurchase amount	93,000	93,000
November 2022 Stock Repurchase Plan [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Stock repurchase program authorized amount	100,000	100,000
Five-year term loan [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Long-Term Debt	225,000	225,000
Seven-year term loan [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Long-Term Debt	295,000	295,000
Advances to suppliers [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Advances to suppliers current and non-current	122,000	122,000	98,000	$ 153,000
Valuation allowances	14,000	14,000	14,000	19,000
Net provision for losses (recoveries) on advances to suppliers		(1,000)	(44)
Recoverable value added tax credits [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Aggregate balance of recoverable value added tax credits	70,000	70,000	55,000	67,000
Valuation allowances	24,000	24,000	$ 20,000	$ 21,000
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	9,000
Reduced Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits		9,000
Loss contingency amount accrued	0	0
Santa Catarina [Member] | Minimum [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Estimate of possible loss on remaining VAT audit assessment	0	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	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	10,000	10,000
Reduced Brazil audit assessment for tax, penalties, and interest on recoverable value added tax credits		3,000
Loss contingency amount accrued	0	0
Parana [Member] | Minimum [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Estimate of possible loss on remaining VAT audit assessment	0	0
Parana [Member] | Maximum [Member]
Other Contingent Liabilities and Other Matters [Line Items]
Estimate of possible loss on remaining VAT audit assessment	$ 3,000	$ 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		6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator for basic earnings per share
Net income attributable to Universal Corporation	$ 21,855	$ 19,510	$ 28,685	$ 25,867
Denominator for basic earnings per share
Weighted average shares outstanding	24,779,237	24,776,930	24,774,126	24,745,827
Basic earnings per share	$ 0.88	$ 0.79	$ 1.16	$ 1.05
Numerator for diluted earnings per share
Net income attributable to Universal Corporation	$ 21,855	$ 19,510	$ 28,685	$ 25,867
Denominator for diluted earnings per share:
Weighted average shares outstanding	24,779,237	24,776,930	24,774,126	24,745,827
Employee and outside director share-based awards	160,190	139,416	163,365	148,539
Denominator for diluted earnings per share	24,939,427	24,916,346	24,937,491	24,894,366
Diluted earnings per share	$ 0.88	$ 0.78	$ 1.15	$ 1.04

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Line Items]
Effective income tax rate	25.50%	15.10%	31.10%	16.50%
Interest expense	$ 12,270	$ 7,130	$ 18,994	$ 13,338
Unresolved tax matter foreign jurisdiction [Member]
Income Tax Disclosure [Line Items]
Interest expense			$ 1,800
Tax Expense - Sale of Business [Member]
Income Tax Disclosure [Line Items]
Effective income tax rate			27.50%
Tax Law Ruling [Member]
Income Tax Disclosure [Line Items]
Effective income tax rate		21.70%		22.00%
Income Tax Expense (Benefit)		$ (1,700)		$ (1,700)

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Goodwill and Other Intangibles Goodwill and Other Intangibles (Narrative) (Details) - Shank's Extracts, Inc. [Member] $ in Thousands	Oct. 04, 2021 USD ($)
Goodwill [Line Items]
Business acquisition percentage of capital stock Acquired	100.00%
Purchase of business, net of cash held by the business	$ 100,000
Business combination finite-lived intangibles	31,500
Working capital adjustments	$ 2,400

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Goodwill and Other Intangibles Change in Goodwill Balance (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Balance at beginning of year	$ 213,998	$ 173,051
Foreign currency translation adjustment	(195)	(87)
Balance at end of period	$ 213,803	$ 172,964

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Goodwill and Other Intangibles Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	$ 111,539	$ 80,164	$ 111,636
Accumulated amortization	(25,410)	(12,654)	(19,065)
Net carrying value	86,129	67,510	92,571
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	86,500	62,500	86,500	[1]
Accumulated amortization	(13,828)	(6,097)	(9,963)	[1]
Net carrying value	$ 72,672	$ 56,403	$ 76,537	[1]
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	11 years	11 years	11 years
Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	13 years	13 years	13 years
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	5 years	5 years	5 years
Gross carrying value	$ 11,100	$ 11,100	$ 11,100
Accumulated amortization	(4,935)	(2,715)	(3,825)
Net carrying value	6,165	$ 8,385	7,275
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life		3 years
Gross carrying value	9,300	$ 4,800	9,300	[1]
Accumulated amortization	(4,746)	(2,800)	(3,773)	[1]
Net carrying value	$ 4,554	$ 2,000	$ 5,527	[1]
Developed Technology Rights [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years		3 years
Developed Technology Rights [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	13 years		13 years
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life		5 years
Gross carrying value	$ 4,000	$ 1,000	$ 4,000	[1]
Accumulated amortization	(1,300)	(350)	(825)	[1]
Net carrying value	$ 2,700	$ 650	$ 3,175	[1]
Noncompete Agreements [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	4 years		4 years
Noncompete Agreements [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	5 years		5 years
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	5 years	5 years	5 years
Gross carrying value	$ 639	$ 764	$ 736
Accumulated amortization	(601)	(692)	(679)
Net carrying value	$ 38	$ 72	$ 57

[1] On October 4, 2021, the Company acquired 100% of the capital stock of Shank's for approximately $100 million in cash and $2.4 million of additional working capital on-hand at the date of acquisition. The Shank's acquisition resulted in $31.5 million of intangible assets. See Note 3 for additional information.

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Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 3,172	$ 2,853	$ 6,345	$ 5,256

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Goodwill and Other Intangibles Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (excluding the six months ended September 30, 2022)	$ 6,044
2024	11,264
2025	11,812
2026	8,452
2027 and thereafter	48,557
Total expected future amortization expense	$ 86,129	$ 92,571	$ 67,510

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Leases of Lessees (Narrative) (Details) $ in Millions	Sep. 30, 2022 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	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021
Operating lease right-of-use assets	$ 43,278	$ 40,243	$ 33,790
Current portion of operating lease liabilities	10,735	10,303	8,985
Long-term operating lease liabilities	27,905	29,617	22,530
Total operating lease liabilities	$ 38,640	$ 39,920	$ 31,515

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Supplemental income statement information related to leases (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Supplemental income statement information related to leases [Line Items]
Operating Lease, Cost	[1]	$ 5,350	$ 4,982	$ 10,557	$ 9,865
Cost of goods sold [Member]
Supplemental income statement information related to leases [Line Items]
Operating Lease, Cost		2,632	2,721	5,336	5,299
Selling, General and Administrative Expenses [Member]
Supplemental income statement information related to leases [Line Items]
Operating Lease, Cost		$ 2,718	$ 2,261	$ 5,221	$ 4,566

[1] Includes variable operating lease costs.

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Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021
2023 (excluding the six months ended September 30, 2022)	$ 6,498
2024	11,325
2025	8,983
2026	5,744
2027	4,379
2028 and thereafter	8,545
Total undiscounted cash flows for operating leases	45,474
Less: Imputed interest	(6,834)
Total operating lease liabilities	$ (38,640)	$ (39,920)	$ (31,515)

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Supplemental information related to leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Cash paid for amounts included in the measurement of operating lease liabilities	$ 3,378	$ 2,840	$ 6,668	$ 5,617
Right-of-use assets obtained in exchange for new operating leases	$ 6,198	$ 6,310	$ 10,725	$ 9,051
Weighted Average Remaining Lease Term (years)	5 years 1 month 17 days	5 years 6 months 3 days	5 years 1 month 17 days	5 years 6 months 3 days
Weighted Average Collateralized Incremental Borrowing Rate	5.68%	4.02%	5.68%	4.02%

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Derivatives And Hedging Activities (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	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	112,300	$ 59,500	$ 22,300
Cash Flow Hedging [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Notional amount of derivative contracts	370,000
Derivative, Fair Value, Net				$ 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	$ 3,100

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Notional Amount of Forward Contracts (Details) - Forward Foreign Currency Exchange Contract [Member] - USD ($) $ in Millions	Sep. 30, 2022	Sep. 30, 2021
Derivative [Line Items]
Notional amount of derivative contracts	$ 35.8	$ 139.2
Derivatives related to tobacco purchases [Member] | Tobacco purchases [Member]
Derivative [Line Items]
Notional amount of derivative contracts	30.4	99.7
Derivatives related to tobacco purchases [Member] | Crop input sales [Member]
Derivative [Line Items]
Notional amount of derivative contracts	0.0	20.8
Derivatives related to processing costs [Member] | Processing costs [Member]
Derivative [Line Items]
Notional amount of derivative contracts	$ 5.4	$ 18.7

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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		6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivatives Designated As Hedges [Member] | Interest Rate Swap Agreements [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax	$ 9,348	$ (253)	$ 13,249	$ (1,649)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax	(266)	(2,257)	(1,871)	(4,480)
Gain on terminated interest rate swaps amortized from accumulated other comprehensive loss into earnings	$ 0	$ 355	$ 0	$ 708
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest expense	Interest expense	Interest expense	Interest expense
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	$ 0	$ 0
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration]	Selling, general and administrative expenses	Selling, general and administrative expenses	Selling, general and administrative expenses	Selling, general and administrative expenses
Derivatives Designated As Hedges [Member] | Forward Foreign Currency Exchange Contracts [Member] | Cost of goods sold [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax	$ 943	$ (5,234)	$ (4)	$ 2,999
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax	$ 2,084	$ 1,805	$ 3,041	$ 1,289
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration]	Cost of goods sold	Cost of goods sold	Cost of goods sold	Cost of goods sold
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	$ 605	$ (217)	$ (520)	$ 451
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration]	Selling, general and administrative expenses	Selling, general and administrative expenses	Selling, general and administrative expenses	Selling, general and administrative expenses
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) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	$ (1,310)	$ (839)	$ (2,317)	$ 3,765
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Selling, general and administrative expenses	Selling, general and administrative expenses	Selling, general and administrative expenses	Selling, general and administrative expenses

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Derivatives And Hedging Activities (Effect Of Derivative Financial Instruments On The Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021
Derivative [Line Items]
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments	$ 14,893	$ 10,957	$ 889
Derivatives in a Fair Value Liability Position Designated as Hedging Instruments	0	4,361	26,040
Derivatives in a Fair Value Asset Position Not Designated as Hedging Instruments	2,605	13,111	1,028
Derivatives in a Fair Value Liability Position Not Designated as Hedging Instruments	181	64	639
Interest Rate Swap Agreements [Member] | Other Non-Current Assets [Member]
Derivative [Line Items]
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments	13,959	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	0	1,161	22,888
Forward Foreign Currency Exchange Contract [Member] | Other Current Assets [Member]
Derivative [Line Items]
Derivatives in a Fair Value Asset Position Designated as Hedging Instruments	934	10,957	889
Derivatives in a Fair Value Asset Position Not Designated as Hedging Instruments	2,605	13,111	1,028
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	0	3,200	3,152
Derivatives in a Fair Value Liability Position Not Designated as Hedging Instruments	$ 181	$ 64	$ 639

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Fair Value Measurements (Narrative) (Details) - FruitSmart, Inc. [Member] - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Mar. 31, 2021	Jan. 01, 2020
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		$ 2,500,000	$ 4,200,000

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Fair Value Measurements (Financial Assets And Liabilities Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021
Assets:
Money market funds	$ 334	$ 334	$ 335
Trading securities associated with deferred compensation plans	10,845	13,655	14,557
Interest Rate Derivative Assets, at Fair Value	13,959
Forward foreign currency exchange contracts	3,539	24,068	1,917
Total financial assets measured and reported at fair value	28,677	38,057	16,809
Liabilities:
Interest Rate Derivative Liabilities, at Fair Value		1,161	22,888
Forward foreign currency exchange contracts	181	3,264	3,791
Total financial liabilities measured and reported at fair value	181	4,425	26,679
Net Asset Value [Member]
Assets:
Money market funds	334	334	335
Trading securities associated with deferred compensation plans	0	0	0
Interest Rate Derivative Assets, at Fair Value	0
Forward foreign currency exchange contracts	0	0	0
Total financial assets measured and reported at fair value	334	334	335
Liabilities:
Interest Rate Derivative Liabilities, at Fair Value		0	0
Forward foreign currency exchange contracts	0	0	0
Total financial liabilities measured and reported at fair value	0	0	0
Level 1 [Member]
Assets:
Money market funds	0	0	0
Trading securities associated with deferred compensation plans	10,845	13,655	14,557
Interest Rate Derivative Assets, at Fair Value	0
Forward foreign currency exchange contracts	0	0	0
Total financial assets measured and reported at fair value	10,845	13,655	14,557
Liabilities:
Interest Rate Derivative Liabilities, at Fair Value		0	0
Forward foreign currency exchange contracts	0	0	0
Total financial liabilities measured and reported at fair value	0	0	0
Level 2 [Member]
Assets:
Money market funds	0	0	0
Trading securities associated with deferred compensation plans	0	0	0
Interest Rate Derivative Assets, at Fair Value	13,959
Forward foreign currency exchange contracts	3,539	24,068	1,917
Total financial assets measured and reported at fair value	17,498	24,068	1,917
Liabilities:
Interest Rate Derivative Liabilities, at Fair Value		1,161	22,888
Forward foreign currency exchange contracts	181	3,264	3,791
Total financial liabilities measured and reported at fair value	181	4,425	26,679
Level 3 [Member]
Assets:
Money market funds	0	0	0
Trading securities associated with deferred compensation plans	0	0	0
Interest Rate Derivative Assets, at Fair Value	0
Forward foreign currency exchange contracts	0	0	0
Total financial assets measured and reported at fair value	0	0	0
Liabilities:
Interest Rate Derivative Liabilities, at Fair Value		0	0
Forward foreign currency exchange contracts	0	0	0
Total financial liabilities measured and reported at fair value	$ 0	$ 0	$ 0

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Fair Value Measurements (Reconciliation of Contingent Consideration Liabilities Related to Acquisitions) (Details) - Contingent consideration [Member] - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance beginning of year	$ 0	$ 2,532	$ 2,532
Change in contingent consideration liability		(2,532)
Balance at end of period	$ 0	$ 0	$ 0

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Fair Value Measurements - Long Term Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	$ 517,000	$ 517,000	$ 518,000
Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	520,000	520,000	520,000
Long-term debt	$ 518,923	$ 518,547	$ 518,422

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Pension And Other Postretirement Benefit Plans (Narrative) (Details) $ in Millions	6 Months Ended
	Sep. 30, 2022 USD ($)
Pension and Other Postretirement Benefits [Line Items]
Contributions to qualified and non-qualified pension plans	$ 3.2
Expected additional contributions in the current fiscal year	$ 0.9

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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		6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1,503	$ 1,653	$ 3,048	$ 3,303
Interest cost	2,351	2,254	4,686	4,513
Expected return on plan assets	(3,324)	(3,387)	(6,648)	(6,772)
Net amortization and deferral	1,001	976	2,002	1,952
Net periodic benefit cost	1,531	1,496	3,088	2,996
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	32	47	64	94
Interest cost	235	241	476	480
Expected return on plan assets	(19)	(22)	(38)	(44)
Net amortization and deferral	(167)	(116)	(339)	(231)
Net periodic benefit cost	$ 81	$ 150	$ 163	$ 299

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Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 5,500	$ 4,100
Expected stock based compensation for remaining fiscal year	$ 2,500
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]
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	6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted	79,405	72,860
Grant date fair value	$ 62.17	$ 56.31
Performance Share Awards (PSAs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted	48,315	48,650
Grant date fair value	$ 54.46	$ 47.95

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Operating Segments (Operating Results For The Company's Reportable Segments) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Sales and other operating revenues		$ 650,984	$ 453,955	$ 1,080,806	$ 803,984
Deduct: Equity in pretax (earnings) loss of unconsolidated affiliates (1)	[1]	(416)	(2,363)	137	(2,972)
Restructuring Costs and Asset Impairment Charges	[2]	0	0	0	(2,024)
Other income	[3]	0	2,532	0	2,532
Consolidated operating income		37,886	29,813	51,152	40,418
Tobacco Operations
Segment Reporting Information [Line Items]
Sales and other operating revenues		570,030	396,765	918,093	690,608
Restructuring Costs and Asset Impairment Charges					(1,500)
Consolidated operating income		33,790	26,914	41,906	35,803
Ingredients
Segment Reporting Information [Line Items]
Sales and other operating revenues		80,954	57,190	162,713	113,376
Consolidated operating income		4,512	2,730	9,109	7,079
Operating Segments [Member]
Segment Reporting Information [Line Items]
Consolidated operating income		$ 38,302	$ 29,644	$ 51,015	$ 42,882

[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		6 Months Ended
		Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2022
Other Comprehensive Income (Loss), Tax [Abstract]
Accumulated other comprehensive loss		$ (89,606)	$ (106,133)	$ (84,311)
Accumulated Translation Adjustment [Member]
Foreign currency translation:
Balance at beginning of year		(40,965)	(35,135)
Net gain (loss) on foreign currency translation		(13,642)	(2,360)
Less: Net (gain) loss on foreign currency translation attributable to noncontrolling interests		617	156
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes		(13,025)	(2,204)
Balance at end of period		(53,990)	(37,339)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Forward Foreign Currency Exchange Contract [Member]
Cash flow hedges: [Abstract]
Balance at beginning of year		3,579	(414)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax		(4,146)	538
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax	[1]	(1,214)	(718)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax		(5,360)	(180)
Balance at the end of period		(1,781)	(594)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax		(158)	(512)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax		(600)	(271)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | Interest Rate Swap [Member]
Cash flow hedges: [Abstract]
Balance at beginning of year		(860)	(19,480)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax		10,467	(1,303)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax	[2]	1,478	2,980
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax		11,945	1,677
Balance at the end of period		11,085	(17,803)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax		(2,782)	346
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax		393	792
Accumulated Defined Benefit Plans Adjustment [Member]
Pension and other postretirement benefit plans:
Balance at beginning of year		(46,065)	(52,008)
Amortization included in earnings (net of tax expense (benefit) of $(285) and $(354))(3)	[3]	1,145	1,611
Other comprehensive income (loss) attributable to Universal Corporation, net of income taxes		1,145	1,611
Balance at end of period		(44,920)	(50,397)
Taxes on amortization included in net income		$ (285)	$ (354)

[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		6 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Schedule of Capitalization, Equity [Line Items]
Total stockholders' equity attributable to parent, beginning balance			$ 1,340,543
Noncontrolling interests in subsidiaries, beginning balance			44,226
Total shareholders' equity, beginning balance	$ 1,360,059	$ 1,341,555	1,384,769	$ 1,348,425
Repurchase of common stock	(893)	0	(893)	0
Accrual of stock-based compensation	1,622	1,119	5,304	4,085
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation	0	26	2,090	2,458
Dividend equivalents on RSUs	291	272	557	536
Net income (loss) attributable to parent	21,855	19,510	28,685	25,867
Net income attributable to noncontrolling interest	(2,449)	2,245	(6,478)	(200)
Net (income) loss	19,406	21,755	22,207	25,667
Common stock dividends declared	(19,398)	(19,195)	(38,845)	(38,365)
Repurchase of stock, retained earnings	(2,555)	0	(2,555)	0
Dividend equivalents on RSUs	(291)	(272)	(557)	(536)
Other comprehensive income (loss)	(1,828)	(8,086)	(5,912)	748
Dividends paid to noncontrolling interests	(1,680)	(3,696)	(6,825)	(4,676)
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders			(427)	0
Total stockholders' equity attributable to parent, ending balance	1,324,854	1,297,332	1,324,854	1,297,332
Noncontrolling interest in subsidiaries, ending balance	29,879	36,094	29,879	36,094
Total shareholders' equity, ending balance	1,354,733	1,333,426	1,354,733	1,333,426
Universal Corporation [Member]
Schedule of Capitalization, Equity [Line Items]
Total stockholders' equity attributable to parent, beginning balance	1,325,763	1,303,825	1,340,543	1,307,299
Repurchase of common stock	(893)	0	(893)	0
Accrual of stock-based compensation	1,622	1,119	5,304	4,085
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation	0	26	2,090	2,458
Dividend equivalents on RSUs	291	272	557	536
Net income (loss) attributable to parent	21,855	19,510	28,685	25,867
Common stock dividends declared	(19,398)	(19,195)	(38,845)	(38,365)
Repurchase of stock, retained earnings	(2,555)	0	(2,555)	0
Dividend equivalents on RSUs	(291)	(272)	(557)	(536)
Other comprehensive income (loss) attributable to parent	(1,540)	(7,901)	(5,295)	904
Dividends paid to noncontrolling interests	0	0	0	0
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders			0	0
Total stockholders' equity attributable to parent, ending balance	1,324,854	1,297,332	1,324,854	1,297,332
Noncontrolling Interests [Member]
Schedule of Capitalization, Equity [Line Items]
Noncontrolling interests in subsidiaries, beginning balance	34,296	37,730	44,226	41,126
Repurchase of common stock	0	0	0	0
Accrual of stock-based compensation	0	0	0	0
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation	0	0	0	0
Dividend equivalents on RSUs	0	0	0	0
Net income attributable to noncontrolling interest	(2,449)	2,245	(6,478)	(200)
Common stock dividends declared	0	0	0	0
Repurchase of stock, retained earnings	0	0	0	0
Dividend equivalents on RSUs	0	0	0	0
Other comprehensive income (loss) attributable to noncontrolling interest	(288)	(185)	(617)	(156)
Dividends paid to noncontrolling interests	(1,680)	(3,696)	(6,825)	(4,676)
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders			(427)	0
Noncontrolling interest in subsidiaries, ending balance	$ 29,879	$ 36,094	$ 29,879	$ 36,094