Obligation Global Alliance One Inc. 9.875% ( US018772AS22 ) en USD

Global Alliance One Inc.

100 % ▲

Etats-unis

US018772AS22 ( en USD )

9.875% par an ( paiement semestriel ) - Obligation en défaut, paiements suspendus

14/07/2021 - Obligation échue

Prospectus brochure de l'obligation Alliance One International Inc US018772AS22 en USD 9.875%, échue

2 000 USD

730 950 000 USD

018772AS2

D ( En défaut )

Alliance One International est une entreprise agro-industrielle américaine spécialisée dans la production, le traitement et la vente de tabac, opérant dans plusieurs pays à travers le monde.

L'Obligation émise par Global Alliance One Inc. ( Etats-unis ) , en USD, avec le code ISIN US018772AS22, paye un coupon de 9.875% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 14/07/2021

L'Obligation émise par Global Alliance One Inc. ( Etats-unis ) , en USD, avec le code ISIN US018772AS22, a été notée NR par l'agence de notation Moody's.

L'Obligation émise par Global Alliance One Inc. ( Etats-unis ) , en USD, avec le code ISIN US018772AS22, a été notée D ( En défaut ) par l'agence de notation Standard & Poor's ( S&P ).

Rule 424 (b)(3) Filing
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424B3 1 d626199d424b3.htm RULE 424 (B)(3) FILING
Table of Contents

Filed pursuant to Rule 424(b)(3)
Registration No. 333-192306
PROSPECTUS

Offer to Exchange All Outstanding
$735,000,000 9.875% Senior Secured Second Lien Notes due 2021
for
$735,000,000 9.875% Senior Secured Second Lien Notes due 2021
which have been registered under the Securities Act

We are offering to exchange new 9.875% Senior Secured Second Lien Notes due 2021 (which we refer to as the "new notes") for our
currently outstanding 9.875% Senior Secured Second Lien Notes due 2021 (which we refer to as the "old notes") on the terms and
subject to the conditions detailed in this prospectus and the accompanying letter of transmittal.

· The exchange offer will expire at 5:00 p.m., New York City time, on Friday, December 20, 2013, unless extended.

· All old notes that are validly tendered and not validly withdrawn will be exchanged.

· Tenders of old notes may be withdrawn any time prior to 5:00 p.m., New York City time, on the date of expiration of the

exchange offer.

· The exchange of notes will not be a taxable exchange for U.S. federal income tax purposes.

· We will not receive any proceeds from the exchange offer.

· The terms of the new notes to be issued are identical in all material respects to the outstanding old notes, except that the
new notes have been registered under the Securities Act of 1933, as amended, or the "Securities Act," and will not have

any of the transfer restrictions and certain additional interest provisions relating to the old notes. The new notes will
represent the same debt as the old notes and we will issue the new notes under the same indenture.

· We do not intend to apply for listing of the new notes on any securities exchange or to arrange for them to be quoted on any

quotation system. A public market for the new notes may not develop, which could make selling the new notes difficult.
Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such new notes. The letter of transmittal states that by so acknowledging and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This
prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of
new notes received in exchange for old notes where such old notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date of the exchange offer, we
will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

See "Risk Factors" beginning on page 19 for a discussion of matters that participants in the exchange
offer should consider.
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal
offense.

The date of this prospectus is November 20, 2013
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TABLE OF CONTENTS

Page
INDUSTRY AND MARKET DATA
ii
INCORPORATION BY REFERENCE
ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
iii
SUMMARY
1
RISK FACTORS
19
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
40
USE OF PROCEEDS
41
CAPITALIZATION
42
RATIO OF EARNINGS TO FIXED CHARGES
43
DESCRIPTION OF OTHER INDEBTEDNESS
44
THE EXCHANGE OFFER
48
DESCRIPTION OF NOTES
58
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
119
PLAN OF DISTRIBUTION
119
LEGAL MATTERS
120
EXPERTS
120
WHERE YOU CAN FIND MORE INFORMATION
120

Rather than repeat certain information in this prospectus that we have already included in reports filed with the
Securities and Exchange Commission (the "SEC"), this prospectus incorporates important business and financial information
about us that is not included in or delivered with this prospectus. We will provide this information to you at no charge upon
written or oral request directed to: Alliance One International, Inc., Attention: Investor Relations, 8001 Aerial Center
Parkway, Post Office Box 2009, Morrisville, North Carolina 27560-2009. In order to ensure timely delivery of the information,
any request should be made no later than five business days before the expiration date of the exchange offer.
You should rely only on the information contained or incorporated by reference in this document or to which we have
referred you. We have not authorized anyone to provide you with information that is different. This document may only be
used where it is legal to sell these securities. The information in this document may only be accurate on the date of this
document.

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INDUSTRY AND MARKET DATA
Information regarding market share, market position and industry data pertaining to our business contained in this prospectus
consists of our estimates based on data and reports compiled by industry professional organizations (including Euromonitor
International), industry analysts and our management's knowledge of our business and markets.
Although we believe that the sources are reliable, we have not independently verified market industry data provided by third
parties or by industry or general publications. Similarly, while we believe our internal estimates with respect to our industry are
reliable, our estimates have not been verified by any independent sources. While we are not aware of any misstatements regarding
any industry data presented in this prospectus, our estimates involve risks and uncertainties and are subject to changes based on
various factors, including those discussed under "Risk Factors" in this prospectus and in our Annual Report on Form 10-K for the
fiscal year ended March 31, 2013 incorporated herein by reference.
INCORPORATION BY REFERENCE
The information that we incorporate by reference is considered a part of this prospectus. We incorporate by reference the
following documents we filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"):

·
our Annual Report on Form 10-K for the fiscal year ended March 31, 2013 filed with the SEC on June 17, 2013 (the "2013

Form 10-K");

·
our Quarterly Report on Form 10-Q for the period ended June 30, 2013 filed with the SEC on August 9, 2013 and our

Quarterly Report on Form 10-Q for the period ended September 30, 2013 filed with the SEC on November 5, 2013 (the
"September 30, 2013 Form 10-Q")

·
our Current Reports on Form 8-K (including amendments filed on Form 8-K/A) filed with the SEC on June 13,

2013, June 18, 2013, July 1, 2013, July 17, 2013, July 26, 2013 (two reports), July 29, 2013, August 1, 2013, August 9,
2013 and August 30, 2013;

·
our Definitive Proxy Statement on Schedule 14A filed with the SEC on July 8, 2013; and

·
additional reports filed with the SEC subsequent to the date hereof under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act and prior to the termination or completion of the exchange offer, including any period during which we have

agreed to make this prospectus available to broker-dealers for resales as described herein (other than information
furnished pursuant to Items 2.02 or 7.01 of any Current Report on Form 8-K).
Documents incorporated by reference are available from us without charge. You may obtain documents incorporated by
reference in this prospectus by requesting them in writing or by telephone from:
Alliance One International, Inc.
Attention: Investor Relations
8001 Aerial Center Parkway
Post Office Box 2009
Morrisville, NC 27560-2009
(919) 379-4300
In order to obtain timely delivery, you must request the information no later than Friday, December 13, 2013, which is
five business days before the initial scheduled expiration date of the exchange offer.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These statements may be made directly in this prospectus or may be
incorporated into this prospectus by reference to other documents. You can identify these forward-looking statements by use of words
such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals,"
"targets" and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or
current facts.
These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially
from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be
achieved. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to
subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of
anticipated or unanticipated events.
We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our
plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or
unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially
from those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements in this
prospectus.
In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are identifying
important risk factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those
contained in any forward-looking statements made by us; any such statement is qualified by reference to the following cautionary
statements. These factors include those appearing under the heading "Risk Factors" in this prospectus and the factors discussed under
the heading "Risk Factors" in the 2013 Form 10-K, the factors discussed below and any other cautionary statements, written or oral,
which may be made or referred to in connection with any such forward-looking statements.

· Our reliance on a small number of significant customers.

· Continued vertical integration by our customers.

· Global shifts in sourcing customer requirements.

· Shifts in the global supply and demand position for tobacco products.

· Changes in the timing of anticipated shipments.

· Migration of suppliers who have historically grown tobacco and from whom we have purchased tobacco toward growing

other crops.

· Risks related to our advancement of inputs to tobacco suppliers to be settled upon the suppliers delivering us unprocessed

tobacco at the end of the growing season.

· Changes in anticipated geographic product sourcing and that tobacco that we purchase directly from suppliers may not meet

our customers' quality and quantity requirements.

· Weather and other environmental conditions that can affect the marketability of our inventory.

· Government actions that significantly affect the sourcing of tobacco, including governmental actions to identify and assess

crop diversification initiatives and alternatives to leaf tobacco growing in countries whose economies depend upon
tobacco production.

· International business risks, including political instability in sourcing locations, expropriation, import and export

restrictions, exchange controls, inflationary economies, currency risks and risks related to the restrictions on repatriation of
earnings or proceeds from liquidated assets of foreign subsidiaries.

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· Exposure to foreign tax regimes in which the rules are not clear, are not consistently applied and are subject to sudden

change.

· Fluctuations in foreign currency exchange and interest rates.

· Competition with the other primary global independent leaf tobacco merchant and independent leaf merchants.

· Disruption, failure or security breaches of our information technology systems.

· Risks related to our capital structure, including risks related to our significant debt and our ability to continue to finance

our non-U.S. local operations with uncommitted short term operating credit lines at the local level.

· Our ability to continue to access capital markets to obtain long-term and short-term financing.

· The volatility and disruption of global credit markets.

· Potential failure of foreign banks in which our subsidiaries maintain deposits or the failure by such banks to transfer funds

or honor withdrawals.

· Failure by counterparties to derivative transactions to perform their obligations.

· Reductions in demand for consumer tobacco products.

· The impact of litigation on our customers.

· Legislative and regulatory initiatives that may reduce consumption of consumer tobacco products and demand for our

services and increase regulatory burdens on us or our customers.

· Low investment performance by our defined benefit pension plan assets which may require us to fund a larger portion of

our pension obligations, thus, diverting funds from other potential uses.
We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In
addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this prospectus
may not in fact occur. We undertake no obligation to update or revise any forward-looking statement as a result of new information,
future events or otherwise, except as otherwise required by law.

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SUMMARY
This summary highlights information appearing elsewhere in, or incorporated by reference into, this prospectus. This
summary is not complete and does not contain all of the information that you should consider before tendering old notes in
the exchange offer. You should carefully read the entire prospectus, including the section entitled "Risk Factors," along with
the financial data and related notes and the other documents that we incorporate by reference in this prospectus. Except as
otherwise indicated or otherwise required by the context, references in this prospectus to "we," "us," "our," "Alliance One,"
the "Company" or the "Issuer" refer to the combined business of Alliance One International, Inc. and its subsidiaries.
The "old notes" consisting of the 9.875% Senior Secured Second Lien Notes due 2021, $735,000,000 in aggregate
principal amount of which were issued on August 1, 2013, and the "new notes" consisting of the 9.875% Senior Secured
Second Lien Notes due 2021 offered pursuant to this prospectus are sometimes collectively referred to in this prospectus as
the "notes." This prospectus and the letter of transmittal that accompanies it collectively constitute the exchange offer.
Our fiscal year ends on March 31. References to a fiscal year are to the fiscal year ending in that year. For example, our
fiscal year 2013 ended on March 31, 2013.
Our Company
We are one of only two global independent publicly held leaf tobacco merchants, each with similar global market shares.
We have broad geographic processing capabilities, a diversified product offering and an established customer base, including all
of the major consumer tobacco product manufacturers. We select, purchase, process, store, pack and ship tobacco grown in more
than 35 countries, serving manufacturers of cigarettes and other consumer tobacco products in approximately 90 countries around
the world. We process tobacco through a complex mechanized threshing and separating operation and then dry it to meet precise
moisture levels in accordance with the customer's specifications. The processing of leaf tobacco facilitates shipping and prevents
spoilage and is an essential service to our customers because the quality of processed leaf tobacco substantially affects the
quality of the manufacturer's end product. In an increasing number of important markets, we also provide agronomy expertise for
growing leaf tobacco.
We have developed an extensive international network through which we purchase, process and sell tobacco, and we hold a
leading position in most tobacco growing regions in the world. We process tobacco in more than 35 owned and third-party
facilities around the world including in the United States, Brazil, Malawi, Turkey, China, Argentina, India and Thailand.
We sell our processed tobacco primarily to large multinational cigarette manufacturers, including Philip Morris
International, Inc., Japan Tobacco, Inc., Imperial Tobacco Group, PLC, China Tobacco International, Inc., British American
Tobacco, Philip Morris USA, Inc., Eastern Company S.A.E., R. J. Reynolds Tobacco Company, Lorillard Tobacco Company and
others. Through our predecessor companies, we have a long operating history in the leaf tobacco industry and have maintained
relationships with many of our major customers for more than 50 years, with some of these relationships beginning in the early
1900s. We do not manufacture cigarettes or other consumer tobacco products.
Our fiscal year 2013 revenues were approximately $2.2 billion. Our revenues are primarily comprised of sales of processed
tobacco and fees charged for processing and related services to manufacturers of tobacco products around the world. Processing
fees and other revenues have historically been less than 5% of our revenues.

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The Industry
Tobacco remains one of the world's major consumer products industries with 21% of the adult worldwide population
smoking tobacco products as estimated by Euromonitor International in an October 2012 report. Euromonitor International
estimates cigarette demand in 2012 of 5.8 trillion cigarette sticks, growing at a rate of 0.19% from 2011 and by 4% from 2006
through 2011. According to Euromonitor International, the cigarette market is forecast to grow by some 7% in volume from 2011
to 2016. Developing markets, and in particular China, drive global sales growth. Per Euromonitor International, the cigarette
smoking population in the Asia Pacific region grew by some 7% from 2006 to 2011, and the region makes up over 60% of the
global market for cigarettes by volume. The cigarette smoking population also increased by 9% in such period in the Middle East
and Africa but declined in North America, Western Europe and Eastern Europe by between approximately 2% to 4%. China is
forecast to increase its share of global cigarette volumes from 41% in 2011 to 46% in 2016, according to Euromonitor
International, with China's domestic cigarette market forecast to grow 19% over such period, equating to some 450 billion
cigarette sticks. Sales of premium cigarettes grew by nearly 10% globally in 2012, according to Euromonitor International, and
from 2013 to 2017 Euromonitor International estimates premium product sales to increase by approximately 30% in China, which
is the world's largest, fastest growing market.
We believe the following are important trends impacting the leaf tobacco industry:
Regional Growth. Euromonitor International forecasts indicate continued increases in cigarette consumption in China and
the remaining Asia Pacific region and, once local political turmoil stabilizes, in the Middle East and Africa as well, with overall
consumption in most other regions, including the United States and Western Europe, continuing to decline. Euromonitor
International estimates that there will be some 35 million more cigarette smokers in 2016 than in 2011, of which China will
account for 12 million, with declines in the developed regions more than matched by growth principally in China. The cigarette
smoking population is expected to rise by almost 4% from 2011 to 2016. As the large international cigarette manufacturers grow
in developing markets, we believe they will look to trusted advisors for a reliable source of quality flue-cured tobacco, the
primary component of the Virginia, Modified Virginia and Chinese-style cigarettes traditionally consumed in those markets.
Further, as the international manufacturers continue to penetrate those markets and the adult population in those markets continues
to grow in number with more disposable income as forecasted by Euromonitor International, there may be an increase in
consumption of American-blend cigarettes, causing an increased demand for export quality tobacco.
Consolidation Among Multinational Cigarette Manufacturers and Expansion of Non-U.S. Operations. Increased
competition in the global tobacco industry as well as the desire to grow and compete in new markets have resulted in
multinational cigarette manufacturers looking for new product and market penetration opportunities as well as economies of scale
in order to leverage their brands, manufacturing, distribution and marketing capabilities and enhance profitability. Consequently,
multinational cigarette manufacturers have looked for mergers and acquisitions to remain competitive. While the global tobacco
market has been relatively quiet in terms of acquisition in recent years, product expansion acquisitions have occurred, including
Lorillard Tobacco Company's acquisition of Blu, a leading U.S. electronic cigarette marketer, and Japan Tobacco's acquisition of
Gryson, a leading roll-your-own and make-your own manufacturer in a number of Western European countries. Other significant
recent acquisitions include British American Tobacco's purchase of Bentoel in June 2009 and British American Tobacco's
acquisition of Protabaco in Colombia in early 2011. Large multinational cigarette manufacturers have also increased their
presence in developing countries throughout the world, including Asia and Africa, consistent with reported growth trends in
cigarette sales in those areas. Other privatizations of monopolies are expected, and the large manufacturers are entering joint or
licensed manufacturing ventures to attempt to capitalize on the growth in China. As cigarette manufacturers expand their global
operations, we believe that demand for local sources of leaf tobacco and local tobacco processing facilities

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will increase, primarily due to beneficial tariff rates and lower freight costs. We also believe that the international expansion of
cigarette manufacturers will cause these manufacturers to rely more on the leaf tobacco merchants like us that can source and
process tobacco on a global and local basis.
Growing Importance of Global Independent Leaf Tobacco Merchants. Our customers are experiencing increased margin
pressure due to the impact of rising taxes on cigarette prices, anti-smoking campaigns, the current global economic downturn and
the global competition for market share. As they battle for market share in a high-margin, consumer product business, they are
increasingly focused on managing their cost structures, and accordingly look to their leaf suppliers to increase efficiency in their
operations. Tobacco merchant customers are also placing a greater emphasis on sourcing tobaccos from suppliers with solid
sustainability programs, good agricultural practices and strong compliance policies, including the ability to trace the source of
tobacco leaf from planting to shipping to the customer. As the large international manufacturers compete in the emerging markets
of Asia Pacific, the India Sub-continent and Africa, we believe that they will need a dynamic mix of tobaccos as they provide
Virginia, Modified Virginia and Chinese-style cigarettes traditionally consumed in those markets and monitor each region's
progression toward sustainably produced, quality tobaccos. As a result, we believe that cigarette manufacturers increasingly
consider global leaf merchants to be value added partners, in large part because of their global scope and expertise in sourcing,
processing and packing leaf tobacco to meet specific customer needs while adhering to their best practices. We are one of only
two leaf tobacco merchants with a global footprint and access to a wide range of tobacco products, working toward sustainable
tobacco production.
Vertical Integration. In recent years, certain cigarette manufacturers have taken steps to partially vertically integrate their
operations, whether through the acquisition of leaf merchants, establishing new operations, entering into joint ventures or
contracting directly with suppliers. In 2009, Japan Tobacco enhanced its direct leaf procurement capabilities with the acquisition
of small leaf processors in Malawi and Brazil and the formation of a joint venture for the procurement and processing of U.S. leaf
tobacco. Philip Morris International has also strengthened its direct leaf procurement capabilities with the acquisition in 2010 of
supplier contracts and the related assets from Alliance One and from another tobacco merchant in Brazil. In January 2012, we
announced an agreement with China Tobacco to form a new joint venture company in Brazil, which remains pending. It is
uncertain whether steps by cigarette manufacturers toward greater vertical integration will continue, and we believe vertical
integration may be reversing in some markets, as we believe we are the more cost effective alternative, while also providing
compliant security of supply. We continue to work with these customers in each of these markets and will continue to work with
our customers to meet all their needs as their buying patterns and business models change, while continuing to be a provider of
quality tobacco products and innovative solutions.
Our Competitive Strengths
We believe our principal competitive strengths include the following:
Market Leadership. Alliance One is one of only two global independent leaf tobacco merchants, each with similar global
market shares. We have broad geographic processing capabilities, a diversified product offering and an established customer
base, including all of the major tobacco consumer product companies. We own approximately 12 processing facilities in 8
countries, including all the principal export markets for flue-cured, burley and oriental tobacco, and we are working towards
sustainable tobacco production. We offer the ability to track tobacco as it is harvested, received, graded, processed, stored,
packed and shipped to the cigarette manufacturer, so that manufacturer can trace the source of the tobacco in its end product. We
believe that the significant scale of our operations and the quality of our managerial talent enable us to achieve efficiencies in key
markets by, among other things, reducing redundant operating expenses, improving facility and inventory management and
implementing best practices across our businesses. As a result of our scale, global reach and financial resources, we believe we
are well-suited to serve the needs of large multinational cigarette manufacturers.

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Strong Customer Relationships. The majority of our tobacco customers, including Philip Morris International, Japan
Tobacco, China Tobacco, Imperial Tobacco, British American Tobacco, Lorillard, Philip Morris USA, Inc., and R.J. Reynolds
are diversified leaders in their respective markets with strong track records in the industry. We have maintained relationships
with many major customers for more than 50 years, providing us with extensive knowledge of customers' purchasing needs and
quality requirements. We believe our sourcing and agronomic expertise at the local level, processing and packing capabilities and
other value-added services (including efforts with our customers to restrict the sale of tobacco through illicit trade) have led our
customers to increasingly rely on our operations.
Global Diversity. We purchase tobacco grown in more than 35 countries and serve manufacturers of cigarettes and other
consumer tobacco products located in approximately 90 countries around the world. We have access to a diverse supply of
tobacco grown in a number of different regions throughout the world and are positioned to respond to weather, political or
economic conditions causing fluctuations in the quality, yield or price of tobacco grown in any one region. In particular, our
relationships with tobacco producers in key origins, such as Brazil, China, Tanzania, Thailand, India and Malawi, enable us to
increasingly market the improved quality of leaf from these origins at competitive pricing. We continue to develop new crops or
expand existing ones in strategic locations to provide improved security of supply and tariff-friendly products where regional
tariff advantages exist. As a result of this flexibility, we believe customers will continue to look to us to source increased amounts
of tobacco from these and other tobacco-producing countries.
Experienced Management Team. We have a dedicated and experienced management team. Our five senior executive
officers have an average of 24 years of experience in the domestic and international tobacco industry. We believe that this
combination of background and experience will enable us to maintain and strengthen long-term relationships with customers and
leverage our market leadership position.
Operating Efficiencies. Alliance One is focused on achieving optimal operating efficiencies and cost savings throughout
our organization. As part of this ongoing process we have:

·
rationalized facilities and reduced fixed factory costs and administration;

·
reduced corporate and regional overhead; and

·
eliminated redundant headcount in areas such as sales, support, insurance, human resources, information technology and

related functions.
In addition to these cost savings, we have realized improved operating efficiencies by implementing our expertise and
capabilities and spreading combined volumes over a streamlined asset base. The focus on cost savings and operating efficiencies
has better positioned us to serve and grow with our customers as they respond to global industry conditions.
Our Business Strategy
Our business strategy is focused on the following key strategic areas, which we believe will help us capitalize on our
strengths and tobacco industry trends.
Meeting Future Global Demand Efficiently. Global requirements for tobacco leaf continue to evolve as growth in
cigarette sales shifts to Asia, and in particular China, regulatory changes require reductions in the use of flavorings in many
markets and our customers' focus on growth of premium strategic brands. The result of these shifts is increasing demand for
higher quality and value flavor-type tobaccos from the regions where we have a developed global footprint. We have invested in
our global operations to improve efficiencies in these key locations, combined with reduced head count in some and increased
available capacity in others to meet future demand. These investments have been completed with a near-term payback horizon and
a strategic view on

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