UVV » Topics » Financing

This excerpt taken from the UVV 10-Q filed Feb 6, 2009.

Financing

We consider the sum of notes payable and overdrafts, long-term debt (including current portion), and customer advances and deposits, less cash, cash equivalents, and short-term investments on our balance sheet to be our net debt. We also consider our net debt plus minority interests and shareholders’ equity to be our total capitalization. Net debt increased by about $182 million to $488 million during the nine months ended December 31, 2008. The increase reflects higher seasonal working capital requirements caused by higher green tobacco costs due to the weakness of the U.S. dollar during the primary buying periods in Africa and South America, and it also reflects the use of prior year cash flows for share repurchases. Net debt as a percentage of capitalization was approximately 32% at December 31, 2008, up from approximately 21% at March 31, 2008, and 20% at December 31, 2007. Net debt has increased by about $213 million since December 31, 2007, as we utilized cash balances and issued new short-term debt to fund higher seasonal working capital requirements and purchase common shares.

 

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As of December 31, 2008, we were in compliance with the covenants of our debt agreements. We had $400 million available under a committed revolving credit facility that will expire on August 31, 2012, and $94 million in cash, cash equivalents, and short-term investments. Our short-term debt and current maturities of long-term debt totaled $220 million. In addition, we had about $425 million in unused, uncommitted credit lines. Our seasonal working capital requirements typically increase from December to September by up to $200 million. In addition, we have $79.5 million in long-term debt maturing in September 2009, and we expect to provide up to $20 million in additional funding to our qualified pension plan. While available capital resources from our committed revolving credit facility and uncommitted credit lines exceed these anticipated needs, we may explore issuing additional long-term debt in order to better control liquidity risk. If we were to issue new long-term debt in the current markets, we believe that the cost of that debt would be substantially higher than our current, outstanding debt and that the increased interest expense would impact our future results. If we refinanced our maturing debt today, we believe our interest expense could increase by up to $3 million per year.

On November 7, 2007, we announced that our Board of Directors had approved the purchase of up to $150 million of our common stock through November 2009. The purchases are carried out from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. During the nine months ended December 31, 2008, we purchased 2.2 million shares of common stock at an aggregate cost of $110.5 million (average price per share of $49.59), which brought our total purchases under the program to 2.55 million shares at an aggregate cost of $128 million (average price per share of $50.05). As of December 31, 2008, we had approximately 25.0 million common shares outstanding.

This excerpt taken from the UVV 10-Q filed Nov 6, 2008.

Financing

Total debt and customer advances, less cash, cash equivalents, and short-term investments, increased by about $360 million to $665 million during the six months ended September 30, 2008, primarily due to seasonal working capital requirements and the use of prior year cash flows for share repurchases. That total as a percentage of capitalization (including total debt, customer advances, minority interests, and shareholders’ equity less cash, cash equivalents, and short-term investments) was approximately 39% at September 30, 2008, up from approximately 21% at March 31, 2008, and 27% at September 30, 2007. Net of cash, cash equivalents, and short-term investments, total debt and customer deposits has increased by about $266 million since September 30, 2007, as we utilized the cash balances and issued new short-term debt to fund higher seasonal working capital requirements.

Pension assets have declined, reflecting the current state of financial markets. Depending on their status on January 1, 2009, we may have additional funding requirements.

As of September 30, 2008, we were in compliance with the covenants of our debt agreements. We had $255 million available under a committed revolving credit facility that will expire on August 31, 2012, and $57 million in cash, cash equivalents, and short-term

 

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investments. Our short-term debt and current maturities of long-term debt totaled $340 million. In addition, we had about $400 million in unused, uncommitted credit lines. Thus, we believe that our liquidity and capital resources at September 30, 2008, remained adequate to support our foreseeable operating needs.

On November 7, 2007, we announced that our Board of Directors had approved the purchase of up to $150 million of our common stock through November 2009. The purchases are carried out from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. During the six months ended September 30, 2008, we purchased 2.1 million shares of common stock at an aggregate cost of $107 million (average price per share of $49.64), which brought our total purchases under the program to 2.5 million shares at an aggregate cost of $124 million (average price per share of $50.10). As of September 30, 2008, we had approximately 25.0 million common shares outstanding.

This excerpt taken from the UVV 10-Q filed Aug 6, 2008.

Financing

Total debt and customer advances, less cash, cash equivalents, and short-term investments, increased by about $350 million to $655 million during the quarter ended June 30, 2008, primarily due to seasonal working capital requirements. That total as a percentage of capitalization (including total debt, customer advances, minority interests, and shareholders’ equity less cash, cash equivalents, and short-term investments) was approximately 37.8% at June 30, 2008, up from approximately 21.4% at March 31, 2008, and 32.2% last year. Net of cash, cash equivalents, and short-term investments, total debt and customer deposits has increased by about $157 million since June 30, 2007, as we utilized the cash balances and issued new short-term debt to fund seasonal working capital requirements and share repurchases.

As of June 30, 2008, we were in compliance with the covenants of our debt agreements. We had $325 million available under a committed revolving credit facility that will expire on August 31, 2013 and $171 million in cash, cash equivalents, and short-term investments. Our short-term debt and current maturities of long-term debt totaled $261 million. In addition, we had about $500 million in unused, uncommitted credit lines. Thus, we believe that our liquidity and capital resources at June 30, 2008, remained adequate to support our foreseeable operating needs.

On November 7, 2007, we announced that our Board of Directors had approved the purchase of up to $150 million of our common stock through November 2009. The purchases will be carried out from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. During the quarter ended June 30, 2008, we purchased 1.1 million shares of common stock at an aggregate cost of $54 million (average price per share of $50.33), which brought our total purchases under the program to 1.4 million shares at an aggregate cost of $71 million (average price per share of $50.99). As of June 30, 2008, we had approximately 26.1 million common shares outstanding.

This excerpt taken from the UVV 10-Q filed Feb 7, 2008.

Financing

Total debt and customer advances decreased by over $50 million to $776 million during the nine months ended December 31, 2007, as we used cash on hand to fund our operating needs and repay $14 million in medium-term notes that matured during the period. Net of cash and cash equivalents, total debt and customer advances has decreased by about $195 million since March 31, 2007, and by about $368 million since December 31, 2006, due to higher operating cash flows from working capital reductions, the sale of our remaining non-tobacco businesses, and the proceeds from the issuance of stock pursuant to executive stock options. We plan to use cash on hand to retire $150 million in medium-term notes maturing in February 2008.

In August 2007, we entered into a new five-year revolving bank credit agreement and terminated an existing five-year revolving credit facility. The new agreement provides for a revolving credit facility of $400 million, which matures in August 2012. The covenants under the new facility require that we maintain a minimum level of tangible net worth and observe limits on debt levels. As of December 31, 2007, we were in compliance with the covenants of our debt agreements. Our notes payable and overdrafts and current maturities of long-term debt totaled $290 million. We had the entire $400 million available under our new committed revolving credit facility and $502 million in cash. In addition, we had more than $400 million in unused, uncommitted credit lines.

On November 7, 2007, we announced that our Board of Directors had approved the purchase of up to $150 million of our common stock through November 2009. The purchases will be carried out from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. The purchases are expected to be funded primarily from our operating cash flow. During the quarter ended December 31, 2007, we purchased 79 thousand shares of common stock for an aggregate cost of $4.1 million. We currently have approximately 27.3 million common shares outstanding. We believe that our liquidity and capital resources at December 31, 2007, remained adequate to support our foreseeable operating needs.

This excerpt taken from the UVV 10-Q filed Nov 8, 2007.

Financing

Total debt and customer advances decreased by about $48 million to $780 million during the six months ended September 30, 2007, despite seasonal working capital requirements, as we used cash on hand to fund our operating needs and repay a $10 million medium term note that matured during the period. Total debt and customer advances as a percentage of capitalization (including total debt, customer advances, minority interests, and shareholders’ equity) was approximately 42% at September 30, 2007, down from approximately 44% at March 31, 2007, and 53% last year. Net of cash and cash equivalents, total debt and customer advances has decreased by about $71 million since March 31, 2007, and decreased by about $373 million since September 30, 2006, as we used part of the proceeds from the sale of our non-tobacco businesses to retire debt and held the remainder as cash pending its use to fund operations and retire maturing debt.

In August 2007, we entered into a new five-year revolving bank credit agreement and terminated an existing five-year revolving credit facility. The new agreement provides for a revolving credit facility of $400 million, which matures in August 2012. The covenants under the new facility require that we maintain a minimum level of tangible net worth and observe limits on debt levels. As of September 30, 2007, we were in compliance with the covenants of our debt agreements. Our short-term debt and current maturities of long-term debt totaled $271 million. We had $400 million available under our new committed revolving credit facility and $381 million in cash. In addition, we had about $500 million in unused, uncommitted credit lines. On November 7, 2007, we announced that our Board of Directors had approved the purchase of up to $150 million of our common stock. The purchases will be carried out from time to time on the open market or in privately negotiated transactions at prices not exceeding prevailing market rates. The purchases are expected to be funded primarily from our operating cash flow. We currently have approximately 27.4 million common shares outstanding. We believe that our liquidity and capital resources at September 30, 2007, remained adequate to support our foreseeable operating needs.

This excerpt taken from the UVV 10-Q filed Aug 8, 2007.

Financing

Total debt and customer advances decreased by about $9 million to $819 million during the quarter ended June 30, 2007, despite seasonal working capital requirements, as we used cash on hand, the proceeds from the sale of a small agri-products business, and

 

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cash received from the exercise of stock options to fund our operating needs. Total debt and customer advances as a percentage of capitalization (including total debt, customer advances, minority interests, and shareholders’ equity) was approximately 43.6% at June 30, 2007, down from approximately 44.4% at March 31, 2007, and 56.8% last year. Net of cash and cash equivalents, total debt and customer deposits has increased by about $28.5 million since March 31, 2007, and decreased by about $725 million since June 30, 2006, as we used part of the proceeds from the sale of our non-tobacco businesses to retire debt and held the remainder as cash pending its use to fund operations and retire maturing debt.

As of June 30, 2007, we were in compliance with the covenants of our debt agreements. We had $500 million available under a committed revolving credit facility that expires on January 10, 2010, and $321 million in cash. Our short-term debt and current maturities of long-term debt totaled $288 million. In addition, we had about $500 million in unused, uncommitted credit lines. Thus, we believe that our liquidity and capital resources at June 30, 2007, remained adequate to support our foreseeable operating needs.

This excerpt taken from the UVV 10-Q filed Feb 8, 2007.

Financing

Total debt decreased by $349 million during the nine months ended December 31, 2006, primarily because we used the proceeds from the Deli Sale to reduce notes payable and long-term debt, including $145 million in crop financing repaid in September 2006 and $200 million of floating rate debt due in May 2008, which we repaid in November 2006. We intend to use the remaining proceeds, which we are currently holding in cash investments, to further reduce debt. Total debt net of cash and cash equivalents has decreased by about $507 million since March 31, 2006, and by $748 million since December 31, 2005. Total debt as a percentage of capitalization (including total debt, deferred taxes, minority interests, and shareholders’ equity) was approximately 42% at December 31, 2006, down from approximately 60% at December 31, 2005. The reduction is due to both the issuance of $220 million of convertible preferred stock in March and April 2006, and the use of the cash proceeds from the Deli Sale to strengthen our balance sheet. We expect that ratio to be further reduced as more debt is retired with the remaining proceeds.

Our cash and cash equivalents increased by $158 million since March 31, 2006. Seasonal cash received has been invested because short-term debt had been previously repaid using some of the proceeds from the Deli Sale. Notes payable and overdrafts as of December 31, 2006, were primarily composed of local borrowings in countries where we cannot efficiently fund our subsidiaries needs using excess U.S funds because of tax or fiscal constraints. Some of these cash balances will be used to fund the next crop cycle, and some will be used to retire debt. In addition, subsequent to December 31, 2006, we used $15 million of our cash balances to fund our domestic salaried and hourly pension plans. Although our ERISA-regulated defined benefit plans were nearly 90% funded in aggregate, the $15 million voluntary contribution is approximately $11 million higher than our normal annual contribution and is intended to ensure the security of the retirement benefits of our employees and bring us substantially within the 100% funding target established under the Pension Protection Act. The Pension Protection Act was passed in August 2006, and the new funding rules are effective in 2008 and require 100% funding in 2011.

As of December 31, 2006, we were in compliance with the covenants of our debt agreements. We had $500 million available under a committed revolving credit facility that expires on January 10, 2010, and $220 million in cash. Our short-term debt and current maturities of long-term debt totaled $192 million. In addition, we had over $500 million in unused, uncommitted credit lines. Thus, we believe that our liquidity and capital resources at December 31, 2006, remained adequate to support our foreseeable operating needs.

 

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