XML 26 R12.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The Company operates in the United States and many foreign countries and is subject to the tax laws of many jurisdictions. Changes in tax laws or the interpretation of tax laws can affect the Company’s earnings, as can the resolution of pending and contested tax issues. The Company's consolidated effective income tax rate is affected by a number of factors, including the mix of domestic and foreign earnings, the effect of exchange rate changes on deferred taxes, and the Company’s ability to utilize foreign tax credits. Income Tax Expense Income taxes for the fiscal years ended March 31, 2017, 2016, and 2015 consisted of the following:
| Fiscal Year Ended March 31,
| 2017 |  | 2016 |  | 2015
Current |  |  |  |  |
United States | $ | 3,422 |  |  | $ | 5,371 |  |  | $ | 4,126 |
State and local | 147 |  |  | 1,116 |  |  | 657 |
Foreign | 36,537 |  |  | 32,897 |  |  | 46,885 |
| 40,106 |  |  | 39,384 |  |  | 51,668 |
Deferred |  |  |  |  |
United States | 5,434 |  |  | 5,780 |  |  | 3,352 |
State and local | 561 |  |  | (445 | ) |  | 159 |
Foreign | 10,631 |  |  | 9,711 |  |  | (17,173 | )
| 16,626 |  |  | 15,046 |  |  | (13,662 | )
Total | $ | 56,732 |  |  | $ | 54,430 |  |  | $ | 38,006 |
Foreign taxes include U.S. tax expense on earnings of foreign subsidiaries. The Company has no undistributed earnings of consolidated foreign subsidiaries that are classified as permanently reinvested. Consolidated Effective Income Tax Rate A reconciliation of the statutory U.S. federal rate to the Company’s effective income tax rate is as follows:
| Fiscal Year Ended March 31,
| 2017 |  | 2016 |  | 2015
Statutory tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal benefit | 0.3 |  |  | 0.3 |  |  | 0.3 |
Dividends received from deconsolidated operations | (2.3 | ) |  | (1.5 | ) |  | (1.3 | )
Effect of exchange rate changes on deferred income taxes | 0.4 |  |  | (1.6 | ) |  | (4.9 | )
Tax benefit arising from payment of a portion of a fine by a subsidiary | — |  |  | — |  |  | (5.0 | )
Other, including changes in liabilities recorded for uncertain tax positions | 0.1 |  |  | (0.7 | ) |  | (0.1 | )
Effective income tax rate | 33.5 | % |  | 31.5 | % |  | 24.0 | %
During the first quarter of fiscal year 2015, the Company recorded a consolidated income tax benefit of $8 million arising from the ability of its subsidiary, Deltafina S.p.A., to pay a significant portion of a fine and related interest charges in Italy that were settled during that quarter following the unsuccessful appeal of a case involving anti-competitive activities in the Italian tobacco market. Deltafina and Universal Corporation were jointly liable for the fine and interest charges. The Company’s initial accrual of the amounts imposed in September 2011 assumed that the entire obligation would be paid by Universal Corporation due to uncertainty with respect to Deltafina’s financial capacity to bear any significant portion of the cost upon the eventual settlement and to uncertainty as to when the payment would be made. Deltafina ultimately was able to assume responsibility for approximately $30 million of the total $53 million obligation for the fine and interest when those amounts were paid. Although the portion of the fine paid by Deltafina was not deductible for income tax purposes in Italy, it reduced the subsidiary’s cumulative undistributed earnings and the associated consolidated tax liability, resulting in the $8 million benefit in the Company's consolidated income tax provision. This discrete item reduced the effective income tax rate for fiscal year 2015 by 5.0%. Components of Income Before Income Taxes The U.S. and foreign components of income before income taxes were as follows:
| Fiscal Year Ended March 31,
| 2017 |  | 2016 |  | 2015
United States | $ | 31,468 |  |  | $ | 37,877 |  |  | $ | 27,181 |
Foreign | 137,770 |  |  | 134,701 |  |  | 131,286 |
Total | $ | 169,238 |  |  | $ | 172,578 |  |  | $ | 158,467 |
Deferred Income Tax Liabilities and Assets Significant components of deferred tax liabilities and assets were as follows:
| March 31,
| 2017 |  | 2016
Liabilities |  |  |
Foreign withholding taxes | $ | 44,702 |  |  | $ | 39,770 |
Undistributed earnings | 24,629 |  |  | 19,553 |
Goodwill | 30,851 |  |  | 30,851 |
All other | 11,015 |  |  | 10,424 |
Total deferred tax liabilities | $ | 111,197 |  |  | $ | 100,598 |
Assets |  |  |
Employee benefit plans | $ | 38,804 |  |  | $ | 43,362 |
Reserves and accruals | 11,756 |  |  | 12,911 |
Deferred income | 4,672 |  |  | 3,938 |
Currency translation losses of foreign subsidiaries | 13,244 |  |  | 9,939 |
Local currency exchange losses of foreign subsidiaries | 3,669 |  |  | 3,597 |
Foreign tax credit carryforward | 2,799 |  |  | 4,664 |
All other | 14,327 |  |  | 16,546 |
Total deferred tax assets | 89,271 |  |  | 94,957 |
Valuation allowance | (636 | ) |  | — |
Net deferred tax assets | $ | 88,635 |  |  | $ | 94,957 |
At March 31, 2017, the Company had no material net operating loss carryforwards in either its domestic or foreign operations. Combined Income Tax Expense (Benefit) The combined income tax expense (benefit) allocable to continuing operations, other comprehensive income, and direct adjustments to shareholders' equity was as follows:
| Fiscal Year Ended March 31,
| 2017 |  | 2016 |  | 2015
Continuing operations | $ | 56,732 |  |  | $ | 54,430 |  |  | $ | 38,006 |
Other comprehensive income | 1,503 |  |  | 1,423 |  |  | (21,900 | )
Direct adjustments to shareholders' equity | — |  |  | (805 | ) |  | (932 | )
Total | $ | 58,235 |  |  | $ | 55,048 |  |  | $ | 15,174 |
Uncertain Tax Positions A reconciliation of the beginning and ending balance of the gross liability for uncertain tax positions for the fiscal years ended March 31, 2017, 2016 and 2015, is as follows:
| Fiscal Year Ended March 31,
| 2017 |  | 2016 |  | 2015
Liability for uncertain tax positions, beginning of year | $ | 2,407 |  |  | $ | 2,894 |  |  | $ | 3,809 |
Additions: |  |  |  |  |
Related to tax positions for the current year | 94 |  |  | 98 |  |  | 272 |
Related to tax positions for prior years | — |  |  | — |  |  | — |
Reductions: |  |  |  |  |
Due to lapses of statutes of limitations | (112 | ) |  | (215 | ) |  | (478 | )
Related to tax positions for prior years | (3 | ) |  | — |  |  | (143 | )
Effect of currency rate movement | 40 |  |  | (370 | ) |  | (566 | )
Liability for uncertain tax positions, end of year | $ | 2,426 |  |  | $ | 2,407 |  |  | $ | 2,894 |
Of the total liability for uncertain tax positions at March 31, 2017, approximately $1.8 million could have an effect on the consolidated effective tax rate if the tax benefits are recognized. The liability for uncertain tax positions includes $0.1 million related to tax positions for which it is reasonably possible that the amounts could change significantly before March 31, 2018. This amount reflects a possible decrease in the liability for uncertain tax positions that could result from the completion and resolution of tax audits and the expiration of open tax years in various tax jurisdictions. The Company recognizes accrued interest related to uncertain tax positions as interest expense, and it recognizes penalties as a component of income tax expense. Amounts accrued or reversed for interest and penalties were not material for any of the fiscal years 2015 through 2017, and liabilities recorded for interest and penalties at March 31, 2017 and 2016 also were not material. Universal and its subsidiaries file a U.S. federal consolidated income tax return, as well as returns in several U.S. states and a number of foreign jurisdictions. As of March 31, 2017, the Company's earliest open tax year for U.S. federal income tax purposes was its fiscal year ended 2014. Open tax years in state and foreign jurisdictions generally range from 3 to 6 years.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration