Guarantees

3 Months Ended

Dec. 31, 2011

Guarantees

Guarantees [Text Block]

3.  GUARANTEES

The Company and certain of its foreign subsidiaries guarantee bank loans to suppliers to finance their crops.  Under longer-term arrangements, the Company may also guarantee financing on suppliers’ construction of curing barns or other tobacco production assets.  The Company also guarantees bank loans to certain tobacco cooperatives to assist with the financing of their suppliers’ crops.  Guaranteed loans are generally repaid concurrent with the delivery of tobacco to the Company.  The Company is obligated to repay any guaranteed loan should the supplier or tobacco cooperative default.  If default occurs, the Company has recourse against the supplier or cooperative.  The Company also guarantees bank loans of certain unconsolidated subsidiaries in Asia and Zimbabwe.

The following table summarizes amounts guaranteed and the fair value of those guarantees:

	December 31, 2011	December 31, 2010	March 31, 2011
Amounts guaranteed (not to exceed)	$   140,826	$   102,324	$   119,114
Amounts outstanding under guarantee	96,798	100,040	102,550
Fair value of guarantees	4,342	4,866	4,575

         Of the guarantees outstanding at December 31, 2011 approximately 95% will expire within one year and the remainder within five years.  The fair value of guarantees is recorded in Accrued Expenses and Other Current Liabilities in the Condensed Consolidated Balance Sheets and included in crop costs.

         In Brazil, some suppliers obtain government subsidized rural credit financing from local banks that is guaranteed by the Company.  The Company withholds amounts owed to suppliers related to the rural credit financing of the supplier upon delivery of tobacco to the Company.  The Company remits payments to the local banks on behalf of the guaranteed suppliers.  Terms of rural credit financing are such that repayment is due to local banks based on contractual due dates.  As of December 31, 2011 and 2010 and March 31, 2011, respectively, the Company had balances of $358, $301 and $27,750 that were due to local banks on behalf of suppliers.  These amounts are included in Accounts Payable in the Condensed Consolidated Balance Sheets.