PYXUS INTERNATIONAL : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

Forward-Looking Statements
Readers are cautioned that the statements contained in this report regarding
expectations of our performance or other matters that may affect our business,
results of operations, or financial condition are "forward-looking statements"
as defined in the Private Securities Litigation Reform Act of 1995. These
statements, which are based on current expectations of future events, may be
identified by the use of words such as "strategy," "expects," "continues,"
"plans," "anticipates," "believes," "will," "estimates," "intends," "projects,"
"goals," "targets," and other words of similar meaning. These statements also
may be identified by the fact that they do not relate strictly to historical or
current facts. If underlying assumptions prove inaccurate, or if known or
unknown risks or uncertainties materialize, actual results could vary materially
from those anticipated, estimated, or projected. Some of these risks and
uncertainties include the risks, uncertainties, and other factors set forth in

"Item 1A, Risk Factors" in this Annual Report and in our other filings with the Securities and Exchange Commission. We do not undertake to update any forward-looking statements that we may make from time to time.

Executive Summary
In what was an unprecedented and challenging year, our Company adapted to
constant change as we navigated the COVID-19 pandemic. We appreciate the
continued support from all of our stakeholders and, in particular, we would like
to thank the entire Pyxus team for their hard work and unwavering commitment to
the Company and the communities in which we operate under extraordinary
circumstances.

During fiscal 2021, we implemented a series of restructurings and process
changes that allowed our business to continue to operate throughout the year and
positioned us for success in fiscal 2022 and beyond. Through these actions, we
were able to reduce our debt by $396.0 million and we made the strategic
decision to exit our cash flow negative Canadian cannabis businesses. The
pending divestiture of the Canadian cannabis businesses further supports our
SG&A cost containment efforts and provides us with more flexibility to utilize
our working capital for the opportunities we anticipate in the tobacco and
e-liquids industries.

Throughout the COVID-19 pandemic, our production facilities continued to operate
although, in some instances, at lower production levels than planned due to
social distancing requirements and safety practices implemented to reduce the
spread of COVID-19 and protect our employees. In addition, the COVID-19 pandemic
resulted in shipping delays of leaf tobacco for certain customer orders from the
fourth quarter of fiscal 2021 into fiscal 2022. However, the effect of COVID-19
on our business yielded innovative changes that will enable us to be more
flexible in the future and potentially accelerate certain activities in the crop
cycle. Also, COVID-19 has pushed the tobacco industry to continue to look for
ways to reduce supply chain complexity in a responsible manner. As a leader in
sustainable and traceable crop production, we have demonstrated our ability to
service the evolving needs of the tobacco industry over time and will continue
to do so in fiscal 2022 and beyond.

Overview

Historically, Pyxus' core business has been as a tobacco leaf merchant,
purchasing, processing, packing, storing and shipping tobacco to manufacturers
of cigarettes and other consumer tobacco products throughout the world. Through
our predecessor companies, we have a long operating history in the leaf tobacco
industry with some customer relationships beginning in the early 1900s. Our core
leaf tobacco operations continued to account for almost all of our revenues for
the fiscal year ended March 31, 2021.

We are committed to responsible crop production that supports economic viability
for the grower, provides a safe working atmosphere for those involved in crop
production and minimizes negative environmental impact. Our agronomists maintain
frequent contact with growers prior to and during the growing and curing seasons
to provide technical assistance to improve the quality and yield of the crop.
Throughout the entire production process, from seed through processing and final
shipment, our SENTRISM traceability system provides clear visibility into how
products are produced throughout the supply chain, supporting product integrity.

In an increasing number of markets, we also provide agronomy expertise for
growing leaf tobacco. Our contracted tobacco grower base often produces a
significant volume of non-tobacco crop utilizing the agronomic assistance that
our team provides. Pyxus is working to find markets for these crops as part of
our ongoing efforts to improve farmer livelihoods and the communities in which
they live.
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Our consolidated operations are managed and reported in nine operating segments
that are organized by product category and geographic area and aggregated into
three reportable segments for financial reporting purposes: Leaf - North
America, Leaf - Other Regions, and Other Products and Services. Refer to   "Note
1. Basis of Presentation and Summary of Significant Accounting Policies"   to
the "Notes to Consolidated Financial Statements" for additional information.

U.S. Bankruptcy Proceedings
On June 15, 2020, Old Pyxus (then named Pyxus International, Inc.) and its then
subsidiaries Alliance One International, LLC, Alliance One North America, LLC,
Alliance One Specialty Products, LLC and GSP Properties, LLC (collectively, the
"Debtors") filed voluntary petitions (the "Chapter 11 Cases") under Chapter 11
of the United States Bankruptcy Code with the Bankruptcy Court for the District
of Delaware (the "Bankruptcy Court") to implement a prepackaged Chapter 11 plan
of reorganization to effectuate a financial restructuring (the "Restructuring")
of Old Pyxus' secured debt. On August 21, 2020, the Bankruptcy Court issued an
order (the "Confirmation Order") confirming the Amended Joint Prepackaged
Chapter 11 Plan of Reorganization (the "Plan") filed by the Debtors in the
Chapter 11 Cases. On August 24, 2020, the Plan became effective in accordance
with its terms, and the Debtors emerged from the Chapter 11 Cases. In connection
with the satisfaction of the conditions to effectiveness as set forth in the
Confirmation Order and the Plan, Old Pyxus completed a series of transactions
pursuant to which the business assets and operations of Old Pyxus were vested in
a new Virginia corporation, Pyxus Holdings, Inc., which is an indirect
subsidiary of the Company. Pursuant to the Confirmation Order and the Plan, at
the effectiveness of the Plan, all outstanding shares of common stock, and
rights to acquire the common stock, of Old Pyxus were cancelled and the shares
of common stock of the Company were delivered to certain creditors of Old Pyxus.
Accordingly, upon the effectiveness of the Plan the Company, through its
subsidiaries, operated all of the businesses operated by Old Pyxus and its
subsidiaries immediately prior to the effectiveness of the Plan and the Company
is the successor issuer to Old Pyxus. Other than our Chief Executive Officer,
our Board of Directors does not include any of the individuals who served as
directors of Old Pyxus at the time the Chapter 11 Cases were commenced or at the
effectiveness of the Plan. Refer to   "Note 3. Emergence from Voluntary
Reorganization under Chapter 11"   to the "Notes to Consolidated Financial
Statements" for additional information.

Development of Businesses
Beginning in 2017, we undertook a strategic process designed to diversify the
Company's products and services by leveraging our core strengths in agronomy and
traceability. In general, our diversification strategy focused on products that
were value-added, required some degree of processing and offered a higher margin
potential than our core tobacco leaf business. In support of this strategy, the
Company investments in e-liquids, industrial hemp/CBD, and legal cannabis in
Canada. Refer to   "Item 1. "Business"   for additional information regarding
these investments.

Following the effectiveness of the Plan and the election of additional members
of our Board of Directors in October 2020, our Board of Directors determined to
exit the industrial hemp, CBD and Canadian cannabis businesses in light of the
Company's limited capital resources and the continuing capital requirements to
develop and expand these early-stage businesses. In December 2020, the Company
commenced actions to exit operations of the industrial hemp businesses,
including the production and sale of products containing extracts of industrial
hemp, including CBD products, by Criticality. Criticality's CBD extraction
facility has ceased operations.

CCAA Proceeding and Deconsolidation and Disposition of Canadian Cannabis
Subsidiaries
On January 21, 2021, Figr East, Figr Norfolk, and Figr Brands, Inc., an indirect
subsidiary of the Company and the majority parent corporation of Figr East and
Figr Norfolk ("Figr Brands", and together with Figr East and Figr Norfolk, the
"Canadian Cannabis Subsidiaries") applied for relief from their respective
creditors pursuant to Canada's Companies' Creditors Arrangement Act (the "CCAA")
in the Ontario Superior Court of Justice (Commercial List) (the "Canadian
Court") in Ontario, Canada as Court File No. CV-21-00655373-00CL (the "CCAA
Proceeding"). On January 21, 2021 (the "Order Date"), upon application by the
Canadian Cannabis Subsidiaries, the Canadian Court issued an order for creditor
protection of the Canadian Cannabis Subsidiaries pursuant to the provisions of
the CCAA and the appointment of FTI Consulting Canada Inc. to serve as the
Canadian Court-appointed monitor of the Canadian Cannabis Subsidiaries during
the pendency of the CCAA Proceeding (the "Monitor"). On January 29, 2021, the
Canadian Court issued an order permitting the Canadian Cannabis Subsidiaries to
initiate a sale and investment solicitation process to be conducted by the
Monitor and its affiliate to solicit interest in, and opportunities for, a sale
of, or investment in, all or substantially all, or one or more components, of
the assets and/or the business operations of the Canadian Cannabis Subsidiaries.
The Canadian Court also approved a debtor-in-possession financing facility (the
"Canadian DIP Facility") provided to Figr Brands by another non-U.S. subsidiary
of Pyxus (the "DIP Lender") in an initial amount of up to Cdn.$8.0 million,
which following approval by the Canadian Court was increased to Cdn.$16.0
million, to fund the working capital needs of the Canadian Cannabis
Subsidiaries.

While the Canadian Cannabis Subsidiaries have been majority owned by the
Company, the administration of the CCAA Proceeding, including the Canadian
Court's appointment of the Monitor and the related authority of the Monitor,
including approval rights with respect to significant actions of the Canadian
Cannabis Subsidiaries during the pendency of the CCAA Proceeding, resulted in
the Company losing control (in accordance with U.S. GAAP) of the Canadian
Cannabis Subsidiaries,
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and the deconsolidation of the Canadian Cannabis Subsidiaries' assets and
liabilities and elimination of their equity components from the Company's
consolidated financial statements as of January 21, 2021. The Canadian Cannabis
Subsidiaries' financial results are included in the Company's consolidated
results through January 20, 2021, which is the day prior to the Order Date.
Prior to the deconsolidation of the Canadian Cannabis Subsidiaries, they
comprised an operating segment within the Other Products and Services reportable
segment.

On May 10, 2021, a definitive agreement for the sale of the assets of Figr
Norfolk was entered into for an estimated purchase price of Cdn.$5.0 million. On
June 10, 2021, the Canadian Court approved the sale agreement. The consummation
of the sale under this agreement is subject to approval of the buyers by Health
Canada and the satisfaction of certain other conditions.

On May 25, 2021, a definitive agreement was entered into with a separate buyer
for the sale of the outstanding equity of Figr East and certain intangible
assets of Figr Brands for an estimated aggregate purchase price of Cdn.$24.8
million. On June 10, 2021, the Canadian Court approved the sale agreement. On
June 25, 2021, Health Canada approved the buyers of Figr East and certain
intangible assets of Figr Brands. The consummation of the sale of Figr East and
certain intangible assets of Figr Brands occurred on June 28, 2021.

The amount of recovery that the Company may receive from the sale of the assets
of Figr Norfolk, the sale of the outstanding equity of Figr East, and the sale
of certain intangible assets of Figr Brands will be impacted by the amount of
claims against the Canadian Cannabis Subsidiaries submitted in the CCAA
Proceeding, the extent to which such claims are approved by the Canadian Court,
and the extent to which the Company's interest in the Canadian Cannabis
Subsidiaries are determined by the Canadian Court to be debt claims entitled to
recovery on the same basis as other unsecured creditor claims with respect to
the Canadian Cannabis Subsidiaries. These and other related matters are
discussed in greater detail in   "Note 5. CCAA Proceeding and Deconsolidation of
Subsidiaries"   and   "Note 30. Subsequent Events"   to the "Notes to
Consolidated Financial Statements".

COVID-19

We continue to monitor the impact of the COVID-19 outbreak on our Company and
our workforce. In March 2020, the World Health Organization recognized the
COVID-19 outbreak as a global pandemic. The COVID-19 pandemic and government
actions implemented to contain further spread of COVID-19 have severely
restricted economic activity around the world. Our production facilities are
still operating but, in some instances, at lower production levels than planned
due to social distancing requirements and safety practices implemented in
accordance with Company policy. We continue to monitor the measures we
implemented to reduce the spread of COVID-19 and make updates and improvements,
as necessary. While our supply chains and distribution channels continue to
experience delays due to COVID-19, we currently have adequate supply of products
to meet the near-term forecasted demand. In addition, we have experienced
procedural delays during fulfillment of customer orders for leaf tobacco due to
COVID-19.

We implemented various measures to reduce the spread of COVID-19 including the
implementation of health safety practices, providing personal protective
equipment, the implementation of travel restrictions, work-from-home policies
where possible, restricting visitors to production locations, splitting
production workforce, reducing the on-site production workforce levels,
screening workers before they enter facilities, implementing social distancing,
and encouraging employees to adhere to prevention measures recommended by the
Center for Disease Control and the World Health Organization. In addition, we
have developed a robust Return to Work Program to ensure our employees are
returning to a safe working environment as federal, state, and local governments
begin lifting their COVID-19 related restrictions.

Broad economic factors from the COVID-19 pandemic, including increasing
unemployment rates and reduced consumer spending, may extend billing and
collection cycles. Deterioration in the collectability of accounts receivable
from extended billing and collection cycles would adversely affect our results
of operations, financial condition, and cash flows, leading to working capital
constraints. If general economic conditions in the markets in which we operate
continue to deteriorate or remain uncertain for an extended period of time, our
business, results of operations, financial condition, and cash flows will be
adversely affected. Due to the scope of our operations, including emerging
markets, and our sale to customers around the world, the impact of the COVID-19
pandemic on our operations and the demand for our products may not coincide with
impacts experienced in the United States in the event that the impacts in the
United States improve over time due to increased vaccinations or improved
medical treatments. Accordingly, to the extent that the impact of the COVID-19
pandemic in the United States may improve over time, results of operations may
continue to be adversely affected by COVID-19 impacts in other areas of the
world. We cannot predict the extent or duration of the COVID pandemic, the
effects of the COVID pandemic on the global, national or local economy, or the
effect of the COVID pandemic on our business, financial position, results of
operations, and cash flows.

Fresh Start Reporting
The Company applied Financial Accounting Standards Board ("FASB") ASC Topic 852
- Reorganizations ("ASC 852") in preparing the consolidated financial
statements. For periods subsequent to the commencement of the Chapter 11 Cases,
ASC 852 requires distinguishing transactions associated with the reorganization
separate from activities related to the ongoing
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operations of the business. Upon the effectiveness of the Plan and the emergence
of the Debtors from the Chapter 11 Cases, the Company determined it qualified
for fresh start reporting under ASC 852, which resulted in the Company becoming
a new entity for financial reporting purposes on the Effective Date (as defined
below). Our financial results for the five months ended August 31, 2020 and for
the fiscal years ended March 31, 2020 and 2019 are referred to as those of the
"Predecessor." Our financial results for the seven months ended March 31, 2021
are referred to as those of the "Successor." Our results of operations as
reported in our Consolidated Financial Statements for these periods are prepared
in accordance with fresh start reporting, which requires that we report on our
results for the periods prior to the Effective Date separately from the period
following the Effective Date. The Company elected to apply fresh start reporting
using a convenience date of August 31, 2020 (the "Fresh Start Reporting Date").
The Company evaluated and concluded the events between August 24, 2020 and
August 31, 2020 were not material to the Company's financial reporting on both a
quantitative or qualitative basis. Refer to "  Note     4    . Fresh Start
Reporting  " to the "Notes to Consolidated Financial Statements" for additional
information.

We do not believe that reviewing the results of periods that span the Fresh
Start Reporting Date in isolation would be useful in identifying any trends in
or reaching any conclusions regarding our overall operating performance.
Management believes that operating metrics for the Successor for the seven
months ended March 31, 2021 when combined with those of the Predecessor for the
five months ended August 31, 2020 provides a more meaningful comparison to the
results for the fiscal year ended March 31, 2020 and are useful in identifying
current business trends. Accordingly, in addition to presenting our results of
operations as reported in our Consolidated Financial Statements in accordance
with U.S. GAAP, the table and discussion below also present the combined results
for these periods. The combined results (referenced as "Combined (Non-GAAP)" or
"combined") for the fiscal year ended March 31, 2021 represent the sum of the
reported amounts for the Predecessor period April 1, 2020 through August 31,
2020 combined with the Successor period from September 1, 2020 through March 31,
2021. These combined results are not considered to be prepared in accordance
with U.S. GAAP. The combined operating results are presented for supplemental
purposes only, may not reflect the actual results we would have achieved absent
our emergence from bankruptcy, may not be indicative of future results and
should not be viewed as a substitute for the financial results of the
Predecessor period and Successor period presented in accordance with U.S. GAAP.
In the following discussion of results of operations, comparisons of combined
results for the fiscal year ended March 31, 2021 are to the comparable U.S. GAAP
measures for the fiscal year ended March 31, 2020.

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Results of Operations

Years Ended March 31, 2021 and 2020

Consolidated

                                                                                       Combined
                                                Successor         Predecessor         (Non-GAAP)        Predecessor
                                               Seven months    Five months ended
                                             ended March 31,    August 31, 2020       Year ended         Year ended
(in millions)                                      2021                             March 31, 2021     March 31, 2020
Sales and other operating revenues           $       884.3    $          447.6    $       1,331.9    $       1,527.3
Total cost of goods and services sold                767.9               402.6            1,170.5            1,302.6
Gross profit*                                        116.5                45.0              161.5              224.7
Selling, general, and administrative
expenses                                             110.0                87.9              197.9              199.0
Other (expense) income, net                           (9.6)               (0.5)             (10.1)               2.1
Restructuring and asset impairment charges            11.8                 0.6               12.4                5.6
Goodwill impairment                                    1.1                   -                1.1               33.8
Operating loss                                       (16.0)              (44.0)             (60.0)             (11.6)
Loss on deconsolidation of subsidiaries               70.2                   -               70.2                  -
Debt retirement expense                                  -                 0.8                0.8                  -
Interest expense                                      56.7                46.6              103.3              136.7
Interest income                                        1.3                 1.4                2.7                3.9
Reorganization items                                     -               106.0              106.0                  -
Income tax expense                                    13.2                 0.3               13.5              131.8
Income from unconsolidated affiliates                 11.9                 2.4               14.3                5.9
Net loss attributable to noncontrolling
interests                                             (6.3)               (1.0)              (7.3)              (5.7)
Net (loss) income attributable to Pyxus
International, Inc.*                         $      (136.7)   $           

19.0 $ (117.7) $ (264.7)

*Amounts may not equal column totals due to rounding.

Combined sales and other operating revenues decreased $195.4 million, or 12.8%,
to $1,331.9 million for the year ended March 31, 2021 from $1,527.3 million for
the year ended March 31, 2020. This decrease was due to a 4.8% decrease in leaf
volume and a 10.3% decrease in leaf average selling prices. These decreases were
partially offset by an increase in cannabinoid revenue attributable to sales
occurring in most of the Canadian provinces, as well as the launch of the GO!
cannabinoid product line in Canada. The 4.8% decrease in leaf volume was
primarily due to smaller crop sizes in Africa and shipments delayed into fiscal
2022 by the COVID-19 pandemic in Africa, Asia, and North America as well as
customer shipping instructions in North America. This decrease was partially
offset by higher volume in South America driven by the timing of shipments. The
10.3% decrease in leaf average sales prices was due to changes in foreign
exchange rates in Europe and South America and product mix in Africa and Europe
having a lower concentration of lamina. This decrease was partially offset by
product mix having a higher concentration of lamina in Asia, North America, and
South America.

Combined cost of goods sold decreased $132.1 million, or 10.1%, to $1,170.5
million for the year ended March 31, 2021 from $1,302.6 million for the year
ended March 31, 2020. This decrease was mainly due to the reduction in sales and
other operating revenues. This decrease was partially offset by $32.1 million of
inventory write-offs related to the Company's actions to exit operations of the
industrial hemp businesses and shifts in expected future products mix in
response to market supply conditions.

Combined gross profit as a percent of sales decreased to 12.1% for the fiscal
year ended March 31, 2021 from 14.7% for the fiscal year ended March 31, 2020.
This decrease was mainly due to the inventory write-offs described above and
product mix in Africa and Europe having a lower concentration of lamina.

Combined selling, general, and administrative expenses decreased $1.1 million,
or 0.6%, to $197.9 million for the year ended March 31, 2021 from $199.0 million
for the year ended March 31, 2020. This decrease was driven by lower travel
expenses due to the COVID-19 pandemic, current-year savings from restructuring
initiatives, and $13.8 million of costs incurred to evaluate and develop plans
for a potential partial monetization of interests in subsidiaries in the Other
Products and Services segment in the prior year. The decrease was partially
offset by $21.8 million of expenses in the current year associated with the
Chapter 11 Cases. Combined selling, general, and administrative expenses as a
percent of sales increased to 14.9% for the year ended
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March 31, 2021 from 13.0% for the year ended March 31, 2020 primarily due to the decrease in sales and other operating revenues.

Combined restructuring and asset impairment charges increased $6.8 million or
121.4% to $12.4 million for the year ended March 31, 2021 from $5.6 million for
the year ended March 31, 2020. This increase was attributable to employee
separation and impairment charges related to the CCAA Proceeding and the
restructuring of certain U.S. operations, which included the industrial hemp and
CBD businesses, and the continued restructuring of certain African operations.

Combined loss on deconsolidation of subsidiaries of $70.2 million in the fiscal year ended March 31, 2021 related to the deconsolidation of the Canadian Cannabis Subsidiaries in connection with the commencement of the CCAA Proceeding.

Combined interest expense decreased $33.4 million, or 24.4%, to $103.3 million
for the year ended March 31, 2021 from $136.7 million for the year ended
March 31, 2020. This decrease was driven by lower outstanding long-term debt
balances, as well as lower balances on the African seasonal lines of credit.

Combined reorganization items of $106.0 million for the year ended March 31,
2021 were comprised of the $462.3 million gain on settlement of liabilities
subject to compromise as a result of the Chapter 11 Cases, partially offset by
fees and costs incurred in connection with the Chapter 11 Cases, including with
respect to the debtor-in-possession financing, and fresh start reporting
adjustments.

Combined income tax expense decreased $118.3 million, or 89.8%, to $13.5 million
for the year ended March 31, 2021 from $131.8 million for the year ended
March 31, 2020. This decrease was primarily due to the reversal of valuation
allowances recorded in the prior year, which were driven by substantial doubt
regarding the Company's ability to continue as a going concern prior to the
implementation of the Plan.
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Leaf - North America Region Supplemental Information

                                                                                                Combined
                                                       Successor           Predecessor         (Non-GAAP)        Predecessor
                                                  Seven months ended   

Five months ended Year ended Year ended (in millions, except per kilo amounts)

March 31, 2021

August 31, 2020 March 31, 2021 March 31, 2020 Kilos sold

                                                     19.8                 9.5               29.3               36.1

Tobacco sales and other operating revenues:

   Sales and other operating revenues            $            113.4    $    

51.2 $ 164.6 $ 192.5

   Average price per kilo                                      5.73                5.39               5.62               5.33
Processing and other revenues                                  23.8                 6.5               30.3               32.2
     Total sales and other operating revenues                 137.2                57.7              194.9              224.7

Tobacco cost of goods sold:

   Tobacco costs                                               91.1                39.3              130.4              153.4
   Transportation, storage and other period
costs                                                           8.9                 5.6               14.5               18.4
Derivative financial instrument and exchange
(gains) losses                                                 (0.1)                0.3                0.2               (0.1)
   Total tobacco cost of goods sold                            99.9                45.2              145.1              171.7
   Average cost per kilo                                       5.05                4.76               4.95               4.76
Processing and other revenues costs of services
sold                                                           20.2                 4.4               24.6               25.6
     Total cost of goods and services sold                    120.1                49.6              169.7              197.3
Gross profit                                                   17.1                 8.1               25.2               27.4
Selling, general, and administrative expenses                   8.1                 7.2               15.3               15.3
Other expense, net                                             (0.3)               (0.5)              (0.8)              (1.4)
Restructuring and asset impairment charges
(recovery)                                                      0.4                   -                0.4               (0.1)
Goodwill impairment                                               -                   -                  -                2.8
Operating income                                 $              8.3    $            0.4    $           8.7    $           8.0



Combined total sales and other operating revenues decreased $29.8 million, or
13.3%, to $194.9 million for the year ended March 31, 2021 from $224.7 million
for the year ended March 31, 2020. This decrease was due to an 18.8% decrease in
volume attributable to shipments delayed into fiscal 2022 by the COVID-19
pandemic and customer shipping instructions. This decrease was partially offset
by a 5.4% increase in average sales price due to product mix having a higher
concentration of lamina and changes in customer mix.

Combined cost of goods and services sold decreased $27.6 million, or 14.0%, to
$169.7 million for the year ended March 31, 2021 from $197.3 million for the
year ended March 31, 2020. This decrease was mainly due to the decrease in sales
and other operating revenues.

Combined gross profit as a percent of sales increased slightly to 12.9% for the
year ended March 31, 2021 from 12.2% for the year ended March 31, 2020 due to a
5.4% increase in average sales price due to product mix having a higher
concentration of lamina and changes in customer mix.
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Leaf - Other Regions Supplemental Information

                                                                                                Combined
                                                       Successor           Predecessor         (Non-GAAP)        Predecessor
                                                  Seven months ended   

Five months ended Year ended Year ended (in millions, except per kilo amounts)

March 31, 2021

August 31, 2020 March 31, 2021 March 31, 2020 Kilos sold

                                                    194.4               102.5              296.9              306.7

Tobacco sales and other operating revenues:

   Sales and other operating revenues            $            701.1    $    

355.9 $ 1,057.0 $ 1,236.0

   Average price per kilo                                      3.61                3.47               3.56               4.03
Processing and other revenues                                  26.2                24.6               50.8               46.6
     Total sales and other operating revenues                 727.3               380.5            1,107.8            1,282.6

Tobacco cost of goods sold:

   Tobacco costs                                              554.1               292.0              846.1              989.0
   Transportation, storage and other period
costs                                                          39.5                16.9               56.4               57.4
Derivative financial instrument and exchange
losses (gains)                                                  1.9                (1.6)               0.3                8.2
   Total tobacco cost of goods sold                           595.5               307.3              902.8            1,054.6
   Average cost per kilo                                       3.06                3.00               3.04               3.44
Processing and other revenues costs of services
sold                                                           16.4                20.0               36.4               33.9
     Total cost of goods and services sold                    611.9               327.3              939.2            1,088.5
Gross profit                                                  115.4                53.2              168.6              194.1
Selling, general, and administrative expenses                  67.1                54.5              121.6              119.0
Other (expense) income, net                                   (13.3)                0.8              (12.5)              13.2
Restructuring and asset impairment charges                      6.3                 0.5                6.8                5.5
Goodwill impairment                                               -                   -                  -               13.7
Operating income (loss)                          $             28.7    $    

(1.0) $ 27.7 $ 69.1

Combined total sales and other operating revenues decreased $174.8 million, or
13.6%, to $1,107.8 million for the year ended March 31, 2021 from $1,282.6
million for the year ended March 31, 2020. This decrease was due to an 11.7%
decrease in average sales prices and a 3.2% decrease in volume. The decrease in
average sales price was due to changes in foreign exchange rates in Europe and
South America and product mix in Africa and Europe having a lower concentration
of lamina. This decrease was partially offset by product mix in Asia and South
America having a higher concentration of lamina. The decrease in volume was
driven by smaller crop sizes in Africa and shipments delayed into fiscal 2022 by
the COVID-19 pandemic in Africa and Asia. This decrease was partially offset by
higher volume in South America driven by the timing of shipments.

Combined cost of goods and services sold decreased $149.3 million, or 13.7%, to
$939.2 million for the year ended March 31, 2021 from $1,088.5 million for the
year ended March 31, 2020. This decrease was mainly due to the decrease in sales
and other operating revenues.

Combined gross profit as a percent of sales increased slightly to 15.2% for the
year ended March 31, 2021 from 15.1% for the year ended March 31, 2020 due to
changes in foreign currency exchange rates in Europe and South America.

Combined selling, general, and administrative expenses increased $2.6 million,
or 2.2%, to $121.6 million for the year ended March 31, 2021 from $119.0 million
for the year ended March 31, 2020 driven by higher accounts receivable
write-offs and higher allocations of general corporate services. This increase
was partially offset by lower travel expenses due to the COVID-19 pandemic and
changes in foreign currency exchange rates in Europe and South America. Combined
selling, general, and administrative expenses as a percent of sales increased to
11.0% for the year ended March 31, 2021 from 9.3% for the year ended March 31,
2020 due to the decrease in sales and other operating revenues.

Restructuring and asset impairment charges increased $1.3 million, or 23.6%, to
$6.8 million for the year ended March 31, 2021 from $5.5 million for the year
ended March 31, 2020. This increase was primarily due to employee separation and
impairment charges for certain African operations. Refer to   "Note 8.
Restructuring and Asset Impairment Charges"   to the "Notes to Consolidated
Financial Statements" for additional information.

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Other Products and Services Segment Supplemental Information

                                                                                            Combined
                                                   Successor           Predecessor         (Non-GAAP)        Predecessor
                                              Seven months ended    Five months ended      Year ended         Year ended
(in millions)                                   March 31, 2021       August 31, 2020     March 31, 2021     March 31, 2020
Sales and other operating revenues           $             19.9    $            9.4    $          29.3    $          19.9
Cost of goods and services sold                            35.9                25.7               61.6               16.8
Gross (loss) profit                                       (16.0)              (16.3)             (32.3)               3.1
Selling, general, and administrative
expenses                                                   34.8                26.2               61.0               64.7
Other income (expense), net                                 4.0                (0.8)               3.2               (9.6)
Restructuring and asset impairment charges                  5.2                   -                5.2                0.3
Goodwill impairment                                         1.1                   -                1.1               17.3
Operating loss                               $            (53.1)   $          (43.3)   $         (96.4)   $         (88.8)



Combined sales and other operating revenues increased $9.4 million, or 47.2%, to
$29.3 million for the year ended March 31, 2021 from $19.9 million for the year
ended March 31, 2020. This increase was primarily due to an increase in
cannabinoid revenue attributable to sales occurring in most of the Canadian
provinces, as well as the launch of the GO! cannabinoid product line in Canada.
This increase was partially offset by a decrease in e-liquids revenue related to
a general industry slow-down amid health and regulatory concerns, and by the
global impact of the COVID-19 pandemic.

Combined cost of goods and services sold increased $44.8 million, or 266.7%, to
$61.6 million for the year ended March 31, 2021 from $16.8 million for the year
ended March 31, 2020. This increase was mainly due to $32.1 million of inventory
write-offs of cannabis and industrial hemp inventory driven by a shift in
expected future products mix in response to market supply conditions and
continued market price compression, as well as the Company's actions to exit
operations of the industrial hemp businesses.

Combined gross (loss) profit as a percent of sales decreased to (110.2)% for the
year ended March 31, 2021 from 15.6% for the year ended March 31, 2020. This
decrease was mainly due to the inventory write-downs described above.

Combined selling, general, and administrative expenses decreased $3.7 million,
or 5.7%, to $61.0 million for the year ended March 31, 2021 from $64.7 million
for the year ended March 31, 2020. Combined selling, general, and administrative
expenses as a percent of sales decreased to 208.2% for the year ended March 31,
2021 from 325.1% for the year ended March 31, 2020. These decreases were mainly
due to the increase in combined sales and other operating revenues and higher
expenses in the prior year for the evaluation of a partial monetization of the
Company's investments in certain businesses in the segment.

Restructuring and asset impairment charges of $5.2 million for the year ended
March 31, 2021 were incurred in connection with employee separation and
impairment charges related to the CCAA Proceeding and the restructuring of
certain U.S. operations, which included the industrial hemp and CBD businesses.
Refer to   "Note 8. Restructuring and Asset Impairment Charges"   to the "Notes
to Consolidated Financial Statements" for additional information.

Goodwill impairment charges of $1.1 million for the year ended March 31, 2021
were related to the full write-off of the carrying value of goodwill for the
Other Products and Services - Cannabis reporting unit. Refer to   "Note 17.
Goodwill and Other Intangible Assets, net"   to the "Notes to Consolidated
Financial Statements" for additional information.

Comparison of the Year Ended March 31, 2020 to the Year Ended March 31, 2019

For a comparison of our results of operations for the years ended March 31, 2020
to March 31, 2019, see "Part II, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" of the Annual Report on   Form
10-K for the fiscal year ended March 31, 2020   of Old Pyxus, filed with the SEC
on August 24, 2020.

                                       36
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Liquidity and Capital Resources

Overview

Our liquidity requirements are affected by various factors from our core tobacco
leaf business, including crop seasonality, foreign currency and interest rates,
green tobacco prices, customer mix, crop size, and quality. Our leaf tobacco
business is seasonal, and purchasing, processing, and selling activities have
several associated peaks where cash on-hand and outstanding indebtedness may
vary significantly compared to fiscal year end. Although we believe that our
sources of liquidity will be sufficient to fund our anticipated needs for the
next twelve months, we anticipate periods during which our liquidity needs will
approach the levels of our anticipated available cash and permitted borrowings
under our credit facilities. Unanticipated developments affecting our liquidity
needs, including with respect to the foregoing factors, and sources of
liquidity, including impacts affecting our cash flows from operations and the
availability of capital resources (including an inability to renew or refinance
seasonal lines of credit), may result in a deficiency in liquidity. To address a
potential liquidity deficiency, we may undertake plans to minimize cash
outflows, which could include exiting operations that do not generate positive
cash flow. It is possible that, depending on the occurrence of events affecting
our liquidity needs and sources of liquidity, such plans may not be sufficient
to adequately or timely address a liquidity deficiency.

As of March 31, 2021, we are in our leaf working capital build. In South
America, we are in the process of purchasing and processing the most recent
crop, while the peak tobacco sales season for South America is in its beginning
stages. Africa is in the beginning of its buying, processing, and selling season
and is utilizing working capital funding as well. Asia, Europe, and North
America are still selling and planning for the next crop that is now being
grown.

ABL Credit Facility
On the Effective Date, Pyxus Holdings entered into an Exit ABL Credit Agreement
(the "ABL Credit Agreement"), dated as of August 24, 2020 by and among, amongst
others, Pyxus Holdings, certain lenders party thereto (the "ABL Lenders") and
Wells Fargo Bank, National Association, as administrative agent and collateral
agent to establish an asset-based revolving credit facility (the "ABL Credit
Facility"). The ABL Credit Facility may be used for revolving credit loans and
letters of credit from time to time up to an initial maximum principal amount of
$75.0 million, subject to the limitations described below in this paragraph.
Under certain conditions, Pyxus Holdings may solicit the ABL Lenders to provide
additional revolving loan commitments under the ABL Credit Facility in an
aggregate amount not to exceed $15.0 million. The ABL Credit Facility is
required to be drawn at all times in an amount greater than or equal to the
lesser of (i) 25% of total commitments under the ABL Credit Facility and (ii)
$18.75 million. The amount available under the ABL Credit Facility is limited by
a borrowing base consisting of eligible accounts receivable and inventory as
follows:

•85% of eligible accounts receivable, plus
•the lesser of (i) 70% of eligible inventory valued at the lower of cost (based
on a first-in first-out basis) and market value thereof (net of intercompany
profits) or (ii) 85% of the appraised net-orderly-liquidation value of eligible
inventory.

The ABL Credit Facility permits both base rate borrowings and LIBOR borrowings.
Borrowings under the ABL Credit Facility bear interest at an annual rate equal
to LIBOR plus 475 basis points or 375 basis points above base rate, as
applicable, with a fee on unutilized commitments at an annual rate of 100 basis
points.

Pyxus Holdings' obligations under the ABL Credit Facility (and certain related
obligations) are (a) guaranteed by Pyxus Parent, Inc. and the Company and all of
Pyxus Holdings' material domestic subsidiaries, and each of Pyxus Holdings'
future material domestic subsidiaries is required to guarantee the ABL Credit
Facility on a senior secured basis (including Pyxus Holdings, collectively, the
"ABL Loan Parties") and (b) secured by certain collateral owned by the ABL Loan
Parties.

Under the terms of the ABL Credit Facility, if (i) an event of default has
occurred and is continuing or (ii) excess borrowing availability under the ABL
Credit Facility (based on the lesser of the commitments thereunder and the
borrowing base) (the "Excess Availability") falls below the greater of (x) $7.5
million and (y) 10% of the lesser of (A) the commitments under the ABL Credit
Facility at such time and (B) the borrowing base at such time (such greater
amount being the "Cash Dominion Threshold"), the ABL Loan Parties will become
subject to cash dominion, which will require daily prepayment of loans under the
ABL Credit Facility with the cash deposited in certain deposit accounts of the
ABL Loan Parties, including concentration accounts, and will restrict the ABL
Loan Parties' ability to transfer cash from their concentration accounts to
their disbursement accounts. Such cash dominion period (a "Dominion Period")
shall end when (i) if arising as a result of a continuing event of default, such
event of default ceases to exist, or (ii) if arising as a result of
non-compliance with the Excess Availability threshold, Excess Availability shall
be equal to or greater than the Cash Dominion Threshold for a period of 30
consecutive days. No Dominion Period existed as of March 31, 2021. The ABL
Credit Agreement governing the ABL Credit Facility contains a covenant requiring
that the Company's fixed charge coverage ratio be no less than 1.00 to 1.00
during any Dominion Period.

                                       37
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The ABL Credit Facility matures on February 24, 2023, subject to extension on
terms and conditions set forth in the ABL Credit Agreement. At March 31, 2021,
$7.5 million was available for borrowing under the ABL Credit Facility, after
reducing availability by the aggregate borrowings under the ABL Credit Facility
of $67.5 million outstanding on that date. As of March 31, 2021, Pyxus Holdings
was in compliance with all covenants under the ABL Credit Agreement.

Term Loan Credit Facility
On the Effective Date, Pyxus Holdings entered into an Exit Term Loan Credit
Agreement (the "Term Loan Credit Agreement"), dated as of August 24, 2020 by and
among, amongst others, Pyxus Holdings, certain lenders party thereto and Alter
Domus (US) LLC, as administrative agent and collateral agent to establish a term
loan credit facility in an aggregate principal amount of approximately $213.4
million (the "Term Loan Credit Facility"). The aggregate principal amount of
loans outstanding under Debtors' debtor-in-possession financing facility, and
related fees, were converted into, or otherwise satisfied with the proceeds of,
the Term Loan Credit Facility.

The Term Loan Credit Facility permits both base rate borrowings and LIBOR
borrowings. Borrowings under the Term Loan Credit Facility bear interest at an
annual rate equal to LIBOR plus 800 basis points or 700 basis points above base
rate, as applicable. In addition to the cash interest payments, from and after
the first anniversary of the Term Loan Credit Agreement, the term loans (the
"Term Loans") under the Term Loan Credit Facility bear "payment in kind"
interest in an annual rate equal to 100 basis points, which rate increases by an
additional 100 basis points on each of the second, third and fourth
anniversaries of the Term Loan Credit Agreement.

Pyxus Holdings' obligations under the Term Loan Credit Facility (and certain
related obligations) are (a) guaranteed by Pyxus Parent, Inc. and the Company,
all of Pyxus Holdings' material domestic subsidiaries and certain of Pyxus
Holdings' foreign subsidiaries (the "Foreign Guarantors"), and each of Pyxus
Holdings' future material domestic subsidiaries is required to guarantee the
Term Loan Credit Facility on a senior secured basis (including Pyxus Holdings,
collectively, the "Term Facility Loan Parties") and (b) secured by certain
collateral owned by the Term Facility Loan Parties.

The Term Loans and the Term Loan Credit Facility mature on February 24, 2025. At
March 31, 2021, the aggregate principal amount of the Term Loans outstanding was
approximately $215.6 million. As of March 31, 2021, Pyxus Holdings was in
compliance with all covenants under the Term Loan Credit Agreement.

Senior Secured First Lien Notes
On the Effective Date, Pyxus Holdings issued approximately $280.8 million in
aggregate principal amount of its 10.00% Senior Secured First Lien Notes due
2024 (the "Notes") to holders of Allowed First Lien Notes Claims (as defined in
the Plan) pursuant to the Indenture (the "Indenture") dated as of the Effective
Date among Pyxus Holdings, the initial guarantors party thereto, and Wilmington
Trust, National Association, as trustee, and collateral agent. The Notes bear
interest at a rate of 10.00% per year, payable semi-annually in arrears in cash
on February 15 and August 15 of each year. The Notes are initially guaranteed on
a senior secured basis by the Company, all of the Company's material domestic
subsidiaries (other than Pyxus Holdings) and the Foreign Guarantors, on a
subordinated basis to the guarantees securing the Term Loan Facility, and each
of its future material domestic subsidiaries are required to guarantee the Notes
on a senior secured basis (collectively, the "Notes Guarantors"). The
obligations of Pyxus Holdings and the Notes Guarantors with respect to the Notes
and the Indenture are secured by certain collateral owned by Pyxus Holdings and
the Notes Guarantors. The Notes mature on August 24, 2024. At March 31, 2021,
the aggregate principal amount of the Notes outstanding was approximately $280.8
million. At March 31, 2021, each of Pyxus Holdings and each guarantor of the
Notes was in compliance with all covenants under the Indenture.

DDTL Facility
On April 23, 2021, Intabex Netherlands B.V. ("Intabex"), an indirect wholly
owned subsidiary of the Company, entered into a Term Loan Credit Agreement (the
"DDTL Facility Credit Agreement"), dated as of April 23, 2021 (the "Closing
Date"), by and among (i) Intabex, as borrower, (ii) the Company, Pyxus Parent,
Inc., Pyxus Holdings, Inc., Alliance One International, LLC, Alliance One
International Holdings, Ltd, as guarantors (collectively, the "Parent
Guarantors"), (iii) certain funds managed by Glendon Capital Management LP and
Monarch Alternative Capital LP, as lenders (collectively and, together with any
other lender that is or becomes a party thereto as a lender, the "DDTL Facility
Lenders"), and (iv) Alter Domus (US) LLC, as administrative agent and collateral
agent. The DDTL Facility Credit Agreement establishes a $120.0 million
delayed-draw term loan credit facility (the "DDTL Facility") permitting
borrowings by Intabex in up to four draws on or prior to June 30, 2021 in a
minimum amount of $30.0 million each (or, if less than $30.0 million remains
available under the DDTL Facility, the remaining commitments under the DDTL
Facility) (the "DDTL Loans"). The proceeds of the DDTL Loans are to be used to
provide ongoing working capital and for other general corporate purposes of
Intabex, the Guarantors (as defined below) and their subsidiaries.

Interest on the aggregate principal amount of outstanding DDTL Loans accrues at
an annual rate of LIBOR plus 9.00%, subject to a LIBOR floor of 1.50%, for
"LIBOR loans" or, for loans that are not LIBOR loans, at an annual rate of an
alternative base rate (as specified in the DDTL Facility Credit Agreement) plus
8.00%. The obligations of Intabex under the DDTL Facility
                                       38
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Credit Agreement (and certain related obligations) are (a) guaranteed by the
Parent Guarantors and Alliance One International Tabak B.V., an indirect
subsidiary of the Company, and each of the Company's domestic and foreign
subsidiaries that is or becomes a guarantor of borrowings under the Term Loan
Credit Agreement (which subsidiaries are referred to collectively, together with
the Parent Guarantors, as the "Guarantors").

The DDTL Facility and all DDTL Loans made thereunder mature on July 31, 2022. At
June 29, 2021, the DDTL Facility was fully drawn and the aggregate principal
amount outstanding was $120.0 million, and the Company and each of the
Guarantors were in compliance with all covenants under the DDTL Credit Facility
Agreement.

Related Party Transaction
Based on a Schedule 13D filed with the SEC on September 3, 2020 by Glendon
Capital Management, L.P., Glendon Opportunities Fund, L.P. and Glendon
Opportunities Fund II, L.P., Glendon Capital Management, L.P. reported
beneficial ownership of 7,938,792 shares of the Company's common stock,
representing approximately 31.8% of the outstanding shares of the Company's
common stock. Based on a Schedule 13D filed with the SEC on September 3, 2020 by
Monarch Alternative Capital LP, MDRA GP LP and Monarch GP LLC, Monarch
Alternative Capital LP reported beneficial ownership of 6,033,340 shares of the
Company's common stock, representing approximately 24.1% of the outstanding
shares of the Company's common stock. Pursuant to a Shareholders Agreement dated
as of August 24, 2020 (the "Shareholders Agreement") among Pyxus and certain of
its shareholders, including Glendon Capital Management L.P., on behalf of its
managed funds and accounts, and Monarch Alternative Capital LP, as investment
manager of Monarch Special Opportunities Master Fund Ltd, Monarch Debt Recovery
Master Fund Ltd and Monarch Capital Master Partners IV LP, Holly Kim and Patrick
Fallon were designated to serve as directors of Pyxus and each continues to
serve as a director of Pyxus. Ms. Kim is a Partner at Glendon Capital Management
L.P. and Mr. Fallon is a Managing Principal at Monarch Alternative Capital LP.

The DDTL Facility Credit Agreement, any and all borrowings thereunder and the
guaranty transactions described above were approved, and determined to be on
terms and conditions at least as favorable to the Company and its subsidiaries
as could reasonably have been obtained in a comparable arm's-length transaction
with an unaffiliated party, by a majority of the disinterested members of the
Board of Directors of Pyxus.

African Seasonal Lines of Credit
On August 13, 2020, certain then subsidiaries of Old Pyxus, which are now
subsidiaries of the Company, Alliance One International Holdings, Ltd. ("AOI
Holdings") and the subsidiaries in Kenya, Malawi, Tanzania, Uganda and Zambia
(collectively, the "African Subsidiaries") entered into an Amendment and
Restatement Agreement (the "Initial TDB Facility Agreement") with Eastern and
Southern African Trade and Development Bank ("TDB"). On August 24, 2020, AOI
Holdings, the African Subsidiaries, the Company, Pyxus Parent, Inc., Pyxus
Holdings and TDB entered into a Second Amendment and Restatement Agreement (the
"TDB Facility Agreement") to amend and restate the Initial TDB Facility
Agreement to add the Company, Pyxus Parent, Inc. and Pyxus Holdings as
guarantors thereunder and to otherwise amend provisions thereof to permit the
consummation of the transactions contemplated by the Plan. The TDB Facility
Agreement sets forth the terms that govern the foreign seasonal lines of credit
of each of the African Subsidiaries with TDB and supersedes the prior terms in
effect. These lines of credit provide borrowings to fund the purchase of leaf
tobacco in the respective jurisdictions to be repaid upon the sale of that
tobacco. The original aggregate maximum borrowing availability under these
separate existing foreign seasonal lines of credit was $255.0 million, and the
aggregate borrowings were $240.5 million as of August 13, 2020. Subject to
certain conditions, the TDB Facility Agreement increased the maximum aggregate
borrowing capacity to $285.0 million, less the amount of outstanding loans
borrowed under the existing foreign seasonal lines of credit with TDB. Loans
under the TDB Facility Agreement bear interest at LIBOR plus 6%. The TDB
Facility Agreement initially provided that it terminated on June 30, 2021 and
may be renewed at TDB's discretion.

On June 24, 2021, the Company and certain of its subsidiaries, including the
African Subsidiaries, entered into a letter agreement with TDB to amend the TDB
Facility Agreement to, among other things, extend the term of the separate lines
of credit of each of the Company's subsidiaries in Malawi, Tanzania, and Zambia
by 365 days, effective from and including July 1, 2021, and to cancel the
separate lines of credit of the Companies' subsidiaries in Kenya and Uganda,
effective from and including June 24, 2021(with outstanding borrowings for Kenya
and Uganda to be repaid by June 30, 2021). As a result of such amendment, the
maximum aggregate borrowing pursuant to the lines of credit under the TDB
Facility Agreement is $190.0 million, subject to an increase of an additional
$15.0 million upon satisfaction of certain documentation requirements applicable
to the line of credit of the Company's subsidiary in Tanzania. Refer to   "Note
30. Subsequent Events"   to the "Notes to Consolidated Financial Statements" for
additional information.

Each of AOI Holdings, the Company, Pyxus Parent, Inc. and Pyxus Holdings
guarantees the obligations of the African Subsidiaries under the TDB Facility
Agreement. The obligations of each African Subsidiary under the TDB Facility
Agreement are required to be secured by a first priority pledge of:

•tobacco purchased by that African Subsidiary that is financed by TDB;

                                       39
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•intercompany receivables arising from the sale of the tobacco financed by TDB;
•customer receivables arising from the sale of the tobacco financed by TDB; and
•such African Subsidiary's local collection account receiving customer payments
for purchases of tobacco financed by TDB.

The TDB Facility Agreement also requires Alliance One International, LLC, a
subsidiary of the Company, to pledge customer receivables arising from the sale
of the tobacco financed by TDB and pledge its collection accounts designated for
receiving customer payments for purchases of tobacco financed by TDB.

The Company's subsidiary in Tanzania failed to satisfy a loan-to-value ratio
requirement under the TDB Facility Agreement during November and December of
2020 under the TDB Facility Agreement. As a result, TDB was permitted to declare
an event of default with respect to the Tanzania subsidiary's borrowings under
its credit facility under the TDB Facility Agreement and demand repayment of
that subsidiary's borrowings, which were approximately $50.4 million at December
31, 2020. TDB entered into a First Amendment and Waiver Letter to the TDB
Facility Agreement dated December 30, 2020 (the "TDB Waiver") in which TDB
waived the Tanzania subsidiary's defaults and adjusted the required
loan-to-value ratio for the Tanzania subsidiary for each month through June
2021. The existence of these defaults by the Tanzania subsidiary under the TDB
Facility Agreement (the "Tanzania Default") resulted in defaults and events of
default arising under the ABL Credit Facility and the Term Loan Credit Facility,
which would have permitted the respective lenders thereunder to demand repayment
of the amounts outstanding under the respective facility. In December 2020, the
required lenders under each of the ABL Credit Facility and the Term Loan Credit
Facility entered into agreements with the Company waiving the defaults and
events of default arising under the respective facility as a result of the
Tanzania Default.

In April 2021, the Company discovered that, as a result of certain customer
invoice coding errors, its subsidiary in Malawi failed to satisfy a
loan-to-value ratio requirement under the TDB Facility Agreement at March 31,
2021 and prior periods. The subsidiary in Malawi repaid a portion of its
borrowings under its credit facility under the TDB Facility Agreement within the
time allotted to cure such failure for the March 31, 2021 loan-to-value ratio
requirement under the TDB Facility Agreement and, within three business days
after the Company's discovery of the invoicing errors for the prior periods. TDB
waived any default that arose therefrom including with respect to any failure of
the subsidiary in Malawi to satisfy the loan-to-value ratio requirement.

Except for the failure by the Malawi subsidiary to satisfy a loan-to-value ratio
requirement, which failure was waived as described above, at March 31, 2021, the
Company and its subsidiaries party to the TDB Facility Agreement were in
compliance with all covenants under the TDB Facility Agreement, as amended by
the TDB Waivers, and $168.6 million was available for borrowing under the TDB
Facility Agreement, after reducing availability by the aggregate borrowings
under the TDB Facility Agreement of $116.4 million outstanding on that date.

Short-Term Borrowings
Excluding its long-term credit arrangements, the Company has typically financed
its non-U.S. operations with uncommitted unsecured short-term seasonal lines of
credit arrangements with a number of banks. These operating lines are generally
seasonal in nature, typically extending for a term of 180 to 270 days
corresponding to the tobacco crop cycle in that location. These facilities are
typically uncommitted in that the lenders have the right to cease making loans
and demand repayment of loans at any time. These loans are typically renewed at
the outset of each tobacco season. At March 31, 2021, the aggregate outstanding
borrowings of the Company under these seasonal credit lines was approximately
$372.2 million and approximately $345.0 million was available for borrowing
under these seasonal credit lines, subject to limitations as provided for in the
ABL Credit Agreement. The weighted average variable interest rate for these
seasonal lines of credit for the year ended March 31, 2021 was 6.1%. Certain of
the foreign seasonal lines of credit, with aggregate outstanding borrowings at
March 31, 2021 of approximately $172.5 million, are secured by inventories as
collateral of $167.8 million at March 31, 2021.

Additional Information
Additional Information with respect to the ABL Credit Facility, the Term Loan
Credit Facility, the Notes and the Indenture, the DDTL Facility, the TDB
Facility Agreement and the Company's seasonal lines of credit, including
descriptions of respective affirmative, negative and financial covenants,
payment obligations, including certain prepayment obligations, collateral and
intercreditor arrangements with respect thereto, provisions establishing events
of default thereunder, fees, and other terms and conditions, is set forth in
  "Note 20. Debt Arrangements"   to the "Notes to Consolidated Financial
Statements," and with respect to the DDTL Facility in   "Note 30. Subsequent
Events"   to the "Notes to Consolidated Financial Statements," which information
is incorporated by reference herein.

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Working Capital
The following summarizes our working capital:
                                                  Successor         Predecessor                  Change

(in millions except for current ratio) March 31, 2021 March 31, 2020 $

                %
Cash and cash equivalents                     $          92.7    $         170.2            (77.5)          (45.5)
Trade and other receivables, net                        188.4              239.7            (51.3)          (21.4)
Inventories and advances to
 tobacco suppliers                                      771.5              768.9              2.6             0.3
Total current assets                                  1,122.5            1,232.4           (109.9)           (8.9)
Notes payable to banks                                  372.2              540.2           (168.0)          (31.1)
Accounts payable                                        103.5               67.1             36.4            54.2
Advances from customers                                  12.1               18.8             (6.7)          (35.6)
Current portion of long-term debt                         2.1               45.0            (42.9)          (95.3)
Total current liabilities                               601.7              789.1           (187.4)          (23.7)
Current ratio                                           1.9 to 1           1.6 to 1
Working capital                                         520.8              443.3             77.5            17.5
Long-term debt                                          551.2              904.3           (353.1)          (39.0)
Stockholders' equity (deficit) attributable
to Pyxus International, Inc.                            247.7              (78.0)           325.7           417.6



Our working capital increased to $520.8 million at March 31, 2021 from $443.3
million at March 31, 2020. Our current ratio was 1.9 to 1 at March 31, 2021 and
1.6 to 1 at March 31, 2020. The increase in working capital is attributable to
the decrease in short-term borrowings primarily due to lower balances on the
African seasonal lines of credit resulting from cash payments and shorter crops
resulting in decreased inventory purchases.

Sources and Uses of Cash
Our primary sources of liquidity are cash generated from operations, cash
collections from our securitized receivables, short-term borrowings under our
foreign seasonal lines of credit, and borrowings under the DDTL Facility. We
have typically financed our non-U.S. tobacco operations with uncommitted
short-term foreign seasonal lines of credit. These foreign lines of credit are
generally seasonal in nature, normally extending for a term of 180 to 270 days,
corresponding to the tobacco crop cycle in that market. These short-term foreign
seasonal lines of credit are typically uncommitted and provide lenders the right
to cease making loans and demand repayment of loans. These short-term foreign
seasonal lines of credit are typically renewed at the outset of each tobacco
season. We maintain various other financing arrangements to meet the cash
requirements of our businesses. Refer to   "Note 20. Debt Arrangements"   to the
"Notes to Consolidated Financial Statements" for additional information.

We utilize capital in excess of cash flow from operations to finance accounts
receivable, inventory, and advances to tobacco suppliers in foreign countries.
In addition, we may periodically elect to purchase, redeem, repay, retire, or
cancel indebtedness prior to stated maturity under our various foreign credit
lines and senior secured credit agreement or indentures, as permitted therein.

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The following summarizes our sources and uses of our cash flows:

                                                                                    Combined
                                          Successor           Predecessor          (Non-GAAP)        Predecessor
                                     Seven months ended    Five months ended       Year ended         Year ended
(in millions)                          March 31, 2021       August 31, 2020      March 31, 2021     March 31, 2020
Operating activities                $            (44.5)   $          (182.1)   $        (226.6)   $        (358.6)
Investing activities                              71.8                 61.7    $         133.5              181.4
Financing activities                             (49.3)                63.7    $          14.4              159.9
Effect of exchange rate changes on
cash                                               1.7                  1.6    $           3.3               (7.3)
Decrease in cash, cash equivalents,
and restricted cash                              (20.3)               (55.1)   $         (75.4)             (24.7)
Cash and cash equivalents at
beginning of period                               93.1                170.2    $         263.3              192.0
Restricted cash at beginning of
period                                            24.8                  2.9    $          27.7                5.8
Cash, cash equivalents, and
restricted cash at end of period    $             97.6    $           118.0 

$ 215.6 $ 173.1

Net cash used by operating activities decreased on a combined basis for the
seven months ended March 31, 2021 and the five months ended August 31, 2020
compared to the twelve months ended March 31, 2020 primarily due to (excluding
non-cash activities) decreased inventory driven by smaller crop sizes in Africa
and currency devaluation in Europe and South America.

Net cash provided by investing activities decreased on a combined basis for the
seven months ended March 31, 2021 and the five months ended August 31, 2020
compared to the twelve months ended March 31, 2020 primarily due to lower
collections on beneficial interests on securitized trade receivables driven by
lower tobacco sales and lower qualifying receivables available for sale into
securitization facilities.

Net cash provided by financing activities decreased on a combined basis for the
seven months ended March 31, 2021 and the five months ended August 31, 2020
compared to the twelve months ended March 31, 2020 primarily due to lower net
proceeds resulting from higher repayments of short term borrowings and the
repayment of the ABL facility in place at the Petition Date, partially offset by
proceeds from debtor-in-possession financing facility in place during the
pendency of the Chapter 11 Cases and borrowings under ABL Credit Facility.

Fluctuation of the USD versus many of the currencies in which we have costs may
have an impact on our working capital requirements. We monitor and hedge foreign
currency costs, as needed.

Approximately $50.7 million of our outstanding cash balance at March 31, 2021
was held in foreign jurisdictions. If these funds in foreign jurisdictions were
repatriated, the tax cost of repatriation would not have a material financial
impact.

Debt Financing
Seasonal liquidity beyond cash flow from operations is provided by our foreign
seasonal lines of credit, advances from customers, and sales of accounts
receivable. For the years ended March 31, 2021 and 2020, our average short-term
borrowings, aggregated peak short-term borrowings outstanding, and
weighted-average interest rate on short-term borrowings were as follows:
                                                                 Successor             Predecessor
(in millions)                                                  March 31, 2021        March 31, 2020
Average short-term borrowings                              $             461.8    $            543.1
Aggregated peak short-term borrowings outstanding          $             818.9    $            712.4
Weighted-average interest rate on short-term borrowings                    6.1  %                6.9  %



Aggregated peak borrowings for fiscal 2021 occurred during the first quarter and
were due to the timing of purchases of tobacco and repayments in Africa and
South America. Peak borrowings for fiscal 2021 and fiscal 2020 were repaid with
cash provided by operating activities. For further information on our debt
financing as of March 31, 2021, refer to   "Note 20. Debt Arrangements"   to the
"Notes to Consolidated Financial Statements" for additional information.

Off-Balance Sheet Arrangements We do not have off-balance sheet arrangements within the meaning of Item 303(a)(4) of SEC Regulation S-K.

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Aggregate Contractual Obligations and Commitments
The following summarizes our contractual cash obligations and other commercial
commitments as of March 31, 2021:

                                                                  Payments / Expirations by Fiscal Year
                                                                            Years           Years          After
(in millions)                                Total          2022          2023-2024       2025-2026        2026
Long-Term Debt Obligations                $   551.2    $         -    $       68.2    $      483.0    $        -
Short-Term Debt Obligations(1)                374.3          374.3               -               -             -
Interest on Debt Obligations(2)               191.8           58.5           105.5            27.8             -
Pension and Postretirement Obligations         90.8           11.0            18.2            18.5          43.1
Operating Lease Obligations                    57.5           14.0            17.6             9.0          16.9

Tobacco and Other Purchase Obligations 411.1 411.1

      -               -             -
Amounts Guaranteed for Tobacco Suppliers       93.5           93.5               -               -             -

Total Contractual Obligations and Other

   Commercial Commitments                 $ 1,770.2    $     962.4    $      209.5    $      538.3    $     60.0

(1) Short-term debt obligations consist of the current portion of long-term debt and our seasonal foreign credit lines.

(2) Interest obligations includes interest for the ABL Facility and other
long-term debt. The projected interest includes both fixed and variable rate
debt. The variable rate used in the projections is the rate that was being
charged on our variable rate debt as of March 31, 2021. Furthermore, we assume
there will be no additional drawings after March 31, 2021 on the ABL Facility
until the maturity on February 24, 2023 in these calculations. These
calculations also assume there is no refinancing of debt.

Tobacco and Other Purchase Obligations
Tobacco purchase obligations result from contracts with suppliers, primarily in
Africa, Europe, North America, and South America, to buy either specified
quantities of tobacco or the supplier's total tobacco production. Amounts shown
as tobacco purchase obligations are estimates based on projected purchase prices
of the future crop tobacco. Payment of these obligations is net of our advances
to these suppliers. Our tobacco purchase obligations do not exceed our projected
requirements over the related terms and are in the normal course of business.
Other purchase obligations consist primarily of purchase commitments of
agricultural material.

Amounts Guaranteed for Tobacco Suppliers
In Africa and South America, we provide guarantees to ensure financing is
available to our tobacco suppliers. In the event these suppliers should default,
we would be responsible for repayment of the funds provided to these suppliers.
We also provide guarantees for the financing of certain unconsolidated
subsidiaries in Asia and South America. Refer to   "Note 22. Guarantees"   to
the "Notes to Consolidated Financial Statements" for additional information.

Planned Capital Expenditures
We are estimating $17.2 million in capital investments, primarily in leaf
operations, for the 2022 fiscal year for routine replacement of equipment, as
well as investments in assets that will add value to the customer or increase
efficiency.

Beneficial Interest in Receivables Sold
We sell accounts receivable under two revolving trade accounts receivable
securitization programs. Under the agreements, we receive either 80% or 90% of
the face value of the receivable sold, less contractual dilutions which limit
the amount that may be outstanding from any one particular customer and
insurance reserves that also have the effect of limiting the risk attributable
to any one customer. Our beneficial interest is subordinate to the purchaser of
the receivables. Refer to   "Note 21. Securitized Receivables"   to the "Notes
to Consolidated Financial Statements" for additional information.

Tax and Repatriation Matters
We are subject to income tax laws in each of the countries in which we do
business through wholly owned subsidiaries and through affiliates. We make a
comprehensive review of the income tax requirements of each of our operations,
file appropriate returns, and make appropriate income tax planning analyses
directed toward the minimization of our income tax obligations in these
countries. Appropriate income tax provisions are determined on an individual
subsidiary level and at the corporate level on both an interim and annual basis.
These processes are followed using an appropriate combination of internal staff
at both the subsidiary and corporate levels as well as independent outside
advisors in review of the various tax laws and in compliance reporting for the
various operations. We regularly review the status of the accumulated unremitted
earnings of each of our foreign subsidiaries. We would provide deferred income
taxes, net of creditable foreign taxes, if applicable, on any earnings that are
determined to no longer be indefinitely invested. Refer to   "Note 9. Income
Taxes"   to the "Notes to Consolidated Financial Statements" for additional
information.

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Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in accordance
with generally accepted accounting principles in the United States ("U.S. GAAP")
requires the use of estimates and assumptions that have an impact on the
reported amounts of assets, liabilities, revenues, expenses, and the disclosure
of contingent assets and liabilities. Management considers an accounting
estimate critical if it: (i) requires us to make judgments and estimates about
matters that are inherently uncertain, (ii) it is important to an understanding
of our financial condition or operating results, and (iii) has a material impact
to the financial statements.

We base our estimates on currently available information, historical experience,
and various other assumptions we believe to be reasonable under the
circumstances. Actual results could differ materially from these estimates.
Management has discussed the development, selection, and disclosure of our
critical accounting estimates with the Audit Committee of the Board of
Directors.
Management believes the following accounting estimates are most critical to our
business operations and to an understanding of our financial condition and
results of operations and reflect the more significant estimates and assumptions
used in the preparation of our consolidated financial statements.

Application of Fresh Start Reporting
We applied FASB ASC 852 in preparing the consolidated financial statements. For
periods subsequent to the Chapter 11 filing and before emergence, ASC 852
requires distinguishing transactions associated with the reorganization separate
from activities related to the ongoing operations of the business. Upon the
effectiveness of the Plan and the emergence of the Debtors from the Chapter 11
Cases, the Company determined it qualified for fresh start reporting under ASC
852, which resulted in the Company becoming a new entity for financial reporting
purposes on the Effective Date. We elected to apply fresh start reporting using
a convenience date of August 31, 2020. We evaluated and concluded that the
events between August 24, 2020 and August 31, 2020 were not material to our
financial reporting on both a quantitative or qualitative basis.

In accordance with ASC 852 and the application of fresh start reporting, we
allocated our reorganization value to our individual assets based on our
estimated fair values in conformity with ASC 805, Business Combinations.
Deferred income tax amounts were determined in accordance with ASC 740, Income
Taxes ("ASC 740"). Reorganization value represents the fair value of the
Successor Company's assets before considering liabilities. The excess
reorganization value over the fair value of identified tangible and intangible
assets is reported as goodwill.

The Effective Date fair values of the Successor assets and liabilities differ
materially from their recorded values as reflected on the historical balance
sheet of the Predecessor and required the use of a number of judgments,
assumptions, and estimates. It is reasonably possible that changes in these
judgments, assumptions, and estimates could have a material effect on our
allocation of reorganization value to our individual assets. Among the most
material judgments, assumptions, and estimates utilized was our determination of
reorganization value. The reorganization value was derived from, and falls
within the court approved range of, enterprise values associated with the Plan.
The enterprise values were based on management projections and the valuation
models as determined by the Plan of Reorganization.

We determined the enterprise and corresponding equity value of the Successor
using various valuation approaches and methods, including: (i) the income
approach using a calculation of the present value of future cash flows based on
our financial projections, (ii) the market approach using selling prices of
similar business/assets and (iii) the cost approach, using estimated costs to
replace or rebuild our assets. We primarily utilized the discounted cash flow
("DCF") method of the income approach, utilizing detailed revenue and expense
projections that reflected the financial and operational facts and circumstances
specific to the business. Our future cash flows were projected based on
estimates of future revenues, gross margins, operating income, capital
expenditures, and other cash flow factors, including income taxes and net
working capital requirements. We utilized estimated revenue growth rates and
cash flow projections. The discount rates utilized in the DCF method were based
on a weighted-average cost of capital determined from relevant market
comparisons and adjusted for specific risk premiums, country risk premiums, and
capital structure. A terminal value estimated growth rate was applied to the
final year of the projected period and reflected our estimate of perpetual
growth. We then calculated a present value of the respective cash flows and
adjusted for the value of other aspects not reflected in the projections, such
as excess net working capital, the value of non-consolidated investments, and
non-operating assets and liabilities to arrive at an estimate of fair value
under the income approach. We then reconciled the estimated fair value to the
court approved range of enterprise values associated with the Plan. Refer to

"Note 4. Fresh Start Reporting" to the "Notes to Consolidated Financial Statements" for additional information.

Income Taxes
Our annual effective income tax rate is based on our jurisdictional mix of
pretax income, statutory tax rates, exchange rates, and tax planning
opportunities available to us in the various jurisdictions in which we operate.
Tax laws are complex, subject to change, and subject to different
interpretations by the taxpayer and respective governmental taxing authorities.
Significant judgment is required in determining our tax expense and in
evaluating our tax positions including evaluating uncertainties under ASC 740.
We record unrecognized tax benefits in multiple jurisdictions and evaluate the
future potential outcomes of tax
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positions, based upon our interpretation of the country-specific tax law and the likelihood of future settlement. We review our tax positions quarterly and adjust the balances as new information becomes available.

Deferred income tax assets represent amounts available to reduce income taxes
payable on taxable income in future years. Such assets arise because of
temporary differences between the financial reporting and tax bases of assets
and liabilities, as well as from net operating loss and tax credit
carryforwards. We evaluate the recoverability of these future tax deductions by
assessing the impact from changes in or issuance of new tax law and the adequacy
of future expected taxable income from all sources, including reversal of
taxable temporary differences, forecasted operating earnings and available tax
planning strategies. These sources of income inherently rely on estimates. To
provide insight, we use our historical experience along with our short and
long-range business forecasts. In addition, we make adjustments to historical
data for objectively verifiable information when deemed appropriate.

We believe it is more likely than not that a portion of the deferred income tax
assets may expire as unused and have established a valuation allowance against
them. Although realization is not assured for the remaining deferred income tax
assets, we believe it is more likely than not such remaining deferred tax assets
will be fully recoverable within the applicable statutory expiration periods.
However, deferred tax assets could be reduced in the near term if estimates of
taxable income are significantly reduced or available tax planning strategies
are no longer viable. Refer to   "Note 9. Income Taxes"   to the "Notes to
Consolidated Financial Statements" for additional information.

Pensions and Postretirement Health Care and Life Insurance Benefits
The valuation of our pension and other postretirement health care and life
insurance plans requires the use of assumptions and estimates that are used to
develop actuarial valuations of expenses, assets and liabilities. These
assumptions include discount rates, investment returns, projected salary
increases and benefits and mortality rates. The significant assumptions used in
the calculation of pension and postretirement obligations are:
•Discount rate: The discount rate is based on investment yields available at the
measurement date on high-quality fixed income obligations, such as those
included in the Moody's Aa bond index.
•Salary increase assumption: The salary increase assumption reflects our
expectations with respect to long-term salary increases of our workforce.
Historical pay increases, expectations for the future, and anticipated inflation
and promotion rates are considered in developing this assumption.
•Cash balance crediting rate: Interest is credited on cash balance accounts
based on the yield on one-year Treasury Constant Maturities plus 1%. The assumed
crediting rate thus considers the discount rate, current treasury rates, current
inflation rates, and expectations for the future.
•Mortality rates: Mortality rates are based on gender-distinct group annuity
mortality tables.
•Expected return on plan assets: The expected return reflects asset allocations,
investment strategy, and our historical actual returns.
•Termination and retirement rates: Termination and retirement rates are based on
standard tables reflecting past experience and anticipated future experience
under the plan. No early retirement rates are used since benefits provided are
actuarially equivalent and there are not early retirement subsidies in the plan.
•Inflation: The inflation assumption is based on an evaluation of external
market indicators, including real gross domestic product growth and central bank
inflation targets.
•Expected contributions: The expected amount and timing of contributions are
based on an assessment of minimum requirements, cash availability, and other
considerations (e.g., funded status, avoidance of regulatory premiums, and
levies, and tax efficiency).
•Health care cost trends: The health care cost trend assumptions are developed
based on historical cost data, the near-term outlook, and an assessment of
likely long-term trends.

Assumptions are set at each year-end and are generally not changed during the
year unless there is a major plan event such as a curtailment or settlement that
would trigger a plan remeasurement.

Management periodically reviews actual demographic experience as it compares to
the actuarial assumptions. Changes in assumptions are made if there are
significant deviations or if future expectations change significantly. Based
upon anticipated changes in assumptions, pension and postretirement expense is
expected to decrease by $0.8 million in the fiscal year ended March 31, 2022 as
compared to March 31, 2021. The cash contribution to our employee benefit plans
in fiscal 2021 for the seven months ended March 31, 2021 and the five months
ended August 31, 2020 were $3.8 million and $2.3 million respectively, and is
expected to be $5.9 million in fiscal 2022.

The effect of actual results differing from our assumptions are accumulated and
amortized over future periods. Changes in other assumptions and future
investment returns could potentially have a material impact on our pension and
postretirement expenses and related funding requirements. The effect of a change
in certain assumptions is shown below:

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                                                          Estimated Change
                                                            in Projected         Estimated Change in
                                                         Benefit Obligation        Annual Expense
(in thousands)                                           Increase (Decrease)     Increase (Decrease)
Change in Assumption (Pension and Postretirement
Plans)
   1% increase in discount rate                        $            (15,002)   $                651
   1% decrease in discount rate                        $             17,490    $               (787)

   1% increase in salary increase assumption           $                171    $                 42
   1% decrease in salary increase assumption           $               (159)   $                (41)

   1% increase in cash balance crediting rate          $                814    $                 24
   1% decrease in cash balance crediting rate          $               (733)   $                (21)

   1% increase in rate of return on assets                                     $               (947)
   1% decrease in rate of return on assets                                     $                947

Changes in assumptions for other postretirement benefits are no longer applicable as the benefit is capped and no longer subject to inflation. Refer to

"Note 25. Pension and Other Postretirement Benefits" to the "Notes to Consolidated Financial Statements" for additional information.

Recent Accounting Pronouncements Not Yet Adopted
Information with respect to recent accounting pronouncements not yet adopted is
included in   "Note 2. New Accounting Standards"   to the "Notes to Consolidated
Financial Statements," which information is incorporated by reference herein.

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