Fiscal Year Ended March 31, 2022, Compared to the Fiscal Year Ended March 31, 2021

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

Reconciliation of Certain Non-GAAP Financial Measures

Fair value adjustment to contingent consideration for FruitSmart acquisition(3)

Adjusted Net Income and Diluted Earnings Per Share Reconciliation

Fair value adjustment to contingent consideration for FruitSmart acquisition(3)

Interest expense related to an uncertain tax matter at a foreign subsidiary

Income tax benefit from dividend withholding tax liability reversal(5)

(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.

Fiscal Year Ended March 31, 2021, Compared to the Fiscal Year Ended March 31, 2020

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 in plant-based ingredients businesses that utilize our assets and capabilities; and

•Returning excess capital through share repurchases.

Outstanding Debt and Other Financing Arrangements

Our contractual obligations as of March 31, 2022, were as follows:

For additional disclosures on income taxes, see Notes 1 and 6 to the consolidated financial statements in Item 8.

Pension and Other Postretirement Benefit Plans

•Discount rate - The discount rate is based on investment yields on a hypothetical portfolio of actual long-term corporate bonds rated AA that align with the cash flows for our benefit obligations.

•Salary scale - The salary scale assumption is based on our long-term actual experience for salary increases, the near-term outlook, and expected inflation.

Growth of Alternative Tobacco Products

Global Regulation of Tobacco Products

Public Acceptance of Increased Global Regulation on Tobacco Products

Strengthened Global Cooperation in the Regulation on Tobacco Products

While we cannot predict the extent or speed at which the efforts of the FCTC will reduce tobacco consumption, a proliferation of national laws and regulations spurred by the recommendations of the FCTC would likely reduce demand for both tobacco products and leaf.

United States FDA's Continued Enforcement of the Tobacco Control Act

Global Acceptance of the Continuum of Risk in the Regulation of Novel Tobacco Products

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