Good day and welcome to this Universal Corporation Second Quarter Fiscal Year 2008 Results Conference Call. This call is being recorded. At this time for opening comments, I would like to turn the call over to Vice President and Treasurer, Ms. Karen Whelan. Karen, please go ahead.

Thank you all for joining us. Hart Roper, our Chief Financial Officer is here with me today and he will join me in answering questions after this brief remarks. This call is being webcast live and will be available on our website and on telephone taped replay. It will remain on our website until February 7. If you are listening to this call after that date or if you are reading a transcription, we have not authorized such recording or transcription, it has been made available to you without permission, review or approval and we take no responsibility for such presentation. Any transcription inaccuracies or omissions or failure to present available updates are the responsibility of the party who is providing it to you. Before I begin to discuss our results, I caution you that we will be making forward-looking statements that are based on our current knowledge and some assumptions about the future, so I urge you to read our 10-K for the year ended March 31, 2007 for information on some of the factors that can affect our estimates. Those factors can include such things as costumer mandated timing of shipments, weather conditions, political and economic environment, changes in currency and changes in market structure or sources. Finally, some of the information I have for you today is based on unaudited allocations and is subject to reclassification. We will only discuss continuing operations with you today. We had a good quarter with income from continuing operations up 9% to $40.5 million, or $1.25 per diluted share. For the six months, we earned $58.7 million from continuing operations or $1.81 per diluted share of almost 200% from the $0.63 we earned last year. Most regions showed solid improvement in the quarter and the six months. The key factors were…

We will take our first questions from the side of Ann Gurkin of Davenport. Go ahead please. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: I wanted to start with the announcement about the share repurchase plan and do you plan on repurchasing shares before the end of the calendar year?

As we said in the press release, it will be in the market from time to time. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: I fold up.

I could not tell you exactly when or how much, but yes. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: And do you plan to fund it through cash, cash flow, credit line?

Ann, we have not changed our philosophy about that and we are buying shares out of out free cash flow.

And we would definitely not borrow money to buy shares. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Okay, switching to shipments, can you give us any numbers on volume that was maybe shipped earlier in this quarter? Accelerated sales volumes? Can you give us any numbers around that statement?

Of course not. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Can you help us with interest expense for the year?

I think it would be reasonably safe and annualizing what we have, we have a big repayment coming up in February, so that is pretty close to the end of the year. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Okay, capital spending for the year, any changes?

Not material. We expect capital spending to be below depreciation, we are greatly under depreciation through the six months and we will be under for the year. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Currently, what are you forecasting for currency for the back half of the year?

Which currency? Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Riyal, and actually the dollar versus the Canadian dollar too.

The market seems to expect it to continue to strengthen, and conversely against other currencies, the market seems to expect the dollar to weaken. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: SG&A for the second half of the year, can you help us with that? Given that like this quarter have benefited from, or actually the first half has benefited from some one time thing.

Now, I do not think that is a benefit to this quarter. It is just the comparison is different. Last year was worse.

I cannot remember, Ann sitting here without looking at the disclosures and the 10-K, do you remember the 10-K we had at the table where we showed all the unusual stuff. And my memory is not very good, but I think most of the farmer write offs that we took last year were in the first half. So you should not see these kinds of “favorable” comparison on SG&A over the second half, but if you go look at that footnote in the K, if there are any major farmer write offs in the second half of the year, it will be disclosed there and that will give you a tip. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Great.

Also in the quarter footnote, whatever is there. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Over your uncommitted inventories at the end of the quarter?

They were $78 million. We do not have uncommitted inventory industry volumes for you though this quarter, I am sorry, Ann. Second quarter, we usually do not.

It was $60 million less than last September and it is 12% of the inventory this year. Last year, it was 18% in the record, so uncommitted is down to that. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Are there any issues with getting containers to ship lease?

I am not aware of any. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: We have heard from some other consumer companies that there are some little bit of issue in getting containers, but no problems?

That is not going to affect any of the numbers that we have here. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: And then, what should we look for for sales of lease in North America this year versus last year?

Sales of lease in North America, I mean, we have said that the one time burley sale that we had last year will not continue.

Is that what you are asking? Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Right. More on an organic basis, do you think, can you grow sales in North America on an organic basis versus last year?

But that is organic. We are not sure what you mean. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Well, backing out the one time sales of the older lease inventory?

Okay, on a normalized basis?

I think our export sales are actually up predicted, but the crop is less.

The crop is less than we expected because of the drought, but not, I think it is still above last year a little bit. Ann Gurkin - Davenport & Co. Of Virginia, Inc.: Okay, that is great. That is all I have. Thank you.

Thank you, we will take our next question from the side of Dex Vlassis of Gates Capital. Go ahead please. Dex Vlassis – Gates Capital: Hi, yes, I was wondering, can you give the absolute amounts for the inventory valuation adjustment, farmer receivable and current remeasurement for each quarter, not just the doubts of it, but the absolute amount.

Dex, I think we have that in the footnote to the 10-K. It might be footnote 15. Dex Vlassis – Gates Capital: I mean for the quarter.

It is the quarterly footnote, and this note 15 which talks about $12.8 million in lower of cost for market inventory charges. Uncollectable farmer advances in several countries of 25. It is footnote 15. Dex Vlassis – Gates Capital: Okay, and was there something special that happened as far as the cash flow looked really strong in the quarter. I was just wondering what was driving that if some of that is timing or have you permanently improved the working capital management?

Working capital management in our business is kind of an unusual concept because we have to buy the crops when it comes in and if the dollar is weak, you are going to spend that money and our customers know that is part of the green cost that is going to happen, so it is not terribly risky, but working capital is going to go up. In addition, because our customers pay a carrying cost, we often fold inventories, so working capital management as sort of an unusual concept for us. But what happened this year is the smaller crops in Africa in particular, there just wasn’t there to buy. So we would normally would have expected this to be a peak working capital investment period and it just did not happen that way. We had smaller crop in Canada, Africa is the big one and I think we had maybe some shipment timing in Brazil that benefited the inventory balances. Dex Vlassis – Gates Capital: Given that this would typically would be a peak, working capital, would you expect the back half of the year to be different than in the past?

No, I really do not. I think we just did not have the big investment. I guess you would not have the cash inflow in the second half from that African inventory that is not there because we have already had that, so maybe you have a little bit less in prior years. The other things that happened in the first half of the year, we had cash from employee option exercises. We sold two airplanes and we got cash from the sale of the non-tobacco businesses, so we had had additional cash flow. Dex Vlassis – Gates Capital: Has something changed because I believe in the past, you had talked about not be willing to do share repurchase before repaying some of the debt that was coming due in February, what sort of change since then?

Nothing really. Cash balances are still there to repay that debt. Our philosophy on share repurchase is that we use free cash flow after the balance sheet is in the right position. Our balance sheet is in the right position. It is very favorable at this time of the year and we have free cash flow coming out of last year that we could use and so that is what we are spending. Dex Vlassis – Gates Capital: Okay, thanks.

Thank you, we will take our next question from the side of Steve Marascia of Anderson & Strudwick, go ahead please. Steve Marascia -Anderson & Strudwick: Good afternoon everyone. Actually, Ann got two questions asked from you, but I have got two more to throw at you. While you guys would not comment on terms of a calendar parameter. In terms of buying back your stock, might the actual share price influence, your movements in that direction?

We really do not talk about share price in this at all. Steve Marascia -Anderson & Strudwick: And secondly, on a more generic question, with what is going on in the credit markets that started here and now spreading overseas, are you guys seeing any tightening of lending or credit in the overseas markets now?

Actually, it is one of the real benefits of having cash. We had not really seen any issues. In fact, we replaced our revolving credit facility this summer. And everything is fine. We have actually reduced our cost somewhat in doing that. We have not had an issue from it. Steve Marascia -Anderson & Strudwick: Good, thank you very much.

We will take our next question from the side of Chris Dechiario of ISI Capital, go ahead please.

Hi Karen, this is Peter Kim. Chris could not make it today, so I am asking a couple of questions for him. Could you give us a little more color in terms of what kind of improvements do you expect in Africa for the rest of this year?

We do not expect improvements in Africa particularly for the rest of the year because of other than that we are not going to have whatever kind of write offs that we had last year, Africa has done very well. We have had new management since last September, but they really have been fighting a tough issue with very short burley crops. There is just not enough tobacco to go around there, so the fact that the inventories are lower means they do not have tobacco to sell for the remainder of the year or as much tobacco to sell for the remainder of the year?

Could you describe the supply and demand balance for the flue-cured tobacco?

Flue-cured has been an over supply and it is moving towards balance, maybe spurred on by some of the shortages in burley in fact. I would say, it is moving towards balance and could probably even move to a short fall within the foreseeable future.

Okay, and the last question is, do you have any cost cutting initiatives in plan for the remainder of the fiscal year or perhaps next year, is there other quantifiable objectives that you are trying to reach?

No, we do not. We have a consistent and constant program to cut cost. We do have key retirement that might save cost. It depends on how much we pay his successor. But we do have an ongoing program. The most recent thing that we did was to sell corporate aircraft, particularly the one in the United States. We just simply could not justify that cause, so we are always looking at it. Our customers are not really willing to support waste in corporate management and so it is a constant review on our side.

Okay, that is all I have for now. Thank you very much.

So, we’ll take our next question from the side of Kevin Zietz of Goldman Sachs. Go ahead please.

A question on share repurchases, just real quick, have you at all changed the debt targets, the debted capitals are conceivably laid out historically or did you stop writing under those?

Well, historically we were higher. We set new targets at 35% to 45% net debt to capital. So that includes customer deposits. We count that really as, because we have to cover it at some point.

Okay.

We are at 27% right now.

We actually subtract cash from that as well because it is here.

With this program, is it sufficient to get you into that range or do you think--

Not if we are spending free cash flow.

Okay, so we can stay tuned for something to move you towards those targets perhaps.

I am not sure what you mean.

If this is going to still keep you under the 35% to 45% range then that would imply that there maybe more share repurchases or activities to get you to that target.

For our safety margin.

Is it too early to be asking about growing conditions in Brazil for the next year’s crop?

Yes, I mean it is planted. I think everything is going well so far. There was a dry period for a while, but it was pretty early in the game. So it is just awfully early to say one thing or the other.

Okay. I guess just looking at the SG&A and knowing that you have been focusing on controlling cost. Just a sort of the net of the farmer receivables, it looks SG&A was up a bit for the quarter so is there something, is there a current impact or something?

Other factors in there, one was we had a gain from asset sales last year in the quarter of about $3 million and there are exchange effects in the quarter fling is 3-1/2, so between the farmer’s stuff and those two items, you are right back basically the same level for our year.

Okay, and then I guess, sort of longer term if the burley crop is going to be under supply for a longer period of time, are there investments that you are thinking of making now to all through that, I guess, the converse of what you did with the flue-cured crops.

We probably would not undertake something like that lightly, again, but in the areas where the burley crop has been short, the infrastructure is there, and Malawi in fact is an auction market where the farmers would grow the crop independently. Mozambique is a contract market, but the infrastructure is already there, it is just a matter of encouraging the growth. Typically though, short supply does not last long very long. And we really do it, it is not like the paper industry. It takes years to build the new capacity.

The expectation is that the Malawi crop for example will go back to the far-year levels and 120 to 130 maybe as much as 140 million kilos.

The seedbeds have been planted and they are very large, so the early signs are the bad crop size will come up, now whether it is enough to undo this, the shortfall in one year—

It will probably take two crops to get us back.

Okay. I appreciate it, thanks.

Thank you we’ll take our next question as a follow up from the side of Dex Vlassis of Gates Capital. Go ahead please.

What was the currency remeasurement gain in the quarter if there was one?

The fling from last year was $3.5 million and was at a higher cost. So the gains were lower this year than last year.

Okay, do you have any update to the crop sizes for the different classes of tobacco?

What are you looking at in particular?

Just flue-cured, burley, oriental, just down the line.

Okay, Excluding China, to begin with flue-cured total exporters, we published this on our website.

You do not have an update now from the last time?

No.

No, this is dated October 18th.

Okay, I can pull that up.

Okay.

And then, you have talked about prices and speaking with your customers about getting price increases, can you provide any sort of update since the last quarter if some of those that you have been able to increase prices or the negotiations are leaning one way or another?

We continue to discuss this with our customers and particularly when the crops are in short supply. I keep saying that you are not gauge your good customers for pricing just because the crops are short because you know they will stand by you, but at the same time, they have to understand when it costs us more and I think that customers understand that, so very much impressive.

Have you seen any changes in the competitive environment from Alliance One or anybody else?

The only thing we would know of that is by rumor.

Any good rumors lately?

I never spread rumors.

Alright, Karen, thanks.

Thank you, currently there are no questions in the queue.

Well I appreciate you all joining us today. We had a good quarter and we are glad that you are here to share it with us. Thanks.

Thank you. This concludes today’s conference call, you may disconnect at any time.