Reconsolidation of MTC

12 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Reconsolidation of MTC

Reconsolidation of MTC

On March 31, 2016, the Company regained control over its wholly owned Zimbabwe subsidiary, Mashonaland Tobacco Company, LTD (“MTC”). The change in control was a result of the change in the political landscape in Zimbabwe and the recent issuance of clarifications to the indigenization laws within Zimbabwe that resulted in the elimination of significant doubt about the Company's ability to control MTC. The reconsolidation of MTC has been treated as a purchase business combination and as such, the fair value of the assets and liabilities has been recorded at their fair value.

Since the Company already owned 100% of the equity interest, no consideration was transferred as part of the reconsolidation. The Company estimated the fair value of its equity interest in MTC at March 31, 2016 to be $94,395 based on a discounted cash flow model. The amount was then allocated to the fair value of the acquired assets and liabilities, which were recorded on the Consolidated Balance Sheet at March 31, 2016. The fair value of the recognized assets included a customer relationship intangible asset of $24,830 and goodwill of $13,669. The effect of the reconsolidation under the purchase business combination guidance resulted in a gain of $106,203 which has been recorded and shown in “Other Income” on the Statement of Consolidated Operations for the year ended March 31, 2016. The gain is the result of the fair value of the equity interest of $94,395 and the reversal of a deferred liability of $11,808.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA(continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(continued)

Alliance One International, Inc. and Subsidiaries

(in thousands)

Note 22 - Reconsolidation of MTC (continued)

The following table summarizes the fair values of the assets acquired and liabilities assumed as of March 31, 2016.

thousands	March 31, 2016
Cash and cash equivalents	$	10,277
Trade and other receivables, net	4,377
Net intercompany receivable (eliminated in consolidation)	100,423
Inventories	38,087
Other current assets	1,663
Property, plant and equipment	51,295
Goodwill and other intangible assets	38,499
Other noncurrent assets	288
Total assets acquired	244,909
Notes payable to banks (1)	130,600
Accounts payable	3,344
Other current liabilities	5,480
Deferred tax liabilities	11,090
Total liabilities	150,514
Fair value of equity interest	$	94,395

(1) Includes $130,600 of debt owed by MTC under a short-term credit facility in which one of the Company’s other subsidiaries, Intabex Netherlands BV (“Intabex”), has a participation interest in the lender’s rights and obligations under the facility. At March 31, 2016, $84,258 of that amount was attributed to outstanding borrowings by MTC funded under that facility by Intabex pursuant to that participation interest. Because Intabex’s funding is pursuant to a participation interest through a third-party lender and not a direct intercompany loan between Intabex and MTC, the total amount of debt under the facility is required to be reflected as consolidated debt upon the reconsolidation of MTC.

As indicated in the above table, the goodwill and intangible asset balance relative to the reconsolidation of MTC is $38,499 within the “Other Regions” segment and is non-deductible for tax purposes. Included within this balance is goodwill attributable in part to the workforce of the acquired business and a finite-lived customer relationship intangible of $24,830, which is being amortized over a useful life of fifteen years.

Alliance One Selected Unaudited Pro Forma Combined Financial Information

The unaudited pro forma information in the table below summarizes the combined results of the Company and MTC for the years ended March 31, 2016 and 2015 as if the companies were combined as of April 1, 2014. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the reconsolidation taken place at the beginning of each period or results of future periods. The following information has been adjusted for intercompany eliminations as required for consolidation accounting.

	Unaudited Proforma Twelve Months Ended March 31,
thousands except per share data	2016			2015
Revenues	$	1,912,324		$	2,077,732
Operating income	114,615			108,669
Net loss	(31,409		)	(24,885		)