I would like to welcome everyone to the Universal Corporation’s third quarter fiscal year 2008 conference call. (Operator Instructions) Thank you. Ms. Whelan, you may begin your conference.

Thank you very much, and 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 these 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 May 7, 2008. If you’re 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 our 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. As such, they are based on our current knowledge and some assumptions about the future events. 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 customer-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 un-audited allocations and is subject to reclassification. As we have to the last several quarters, we will only discuss continuing operation with you today. Income from continuing operations for the third quarter this year increased by 42% to about $51 million, or a $1.56 per diluted share. Last year, it was about $36 million, or $1.17 per diluted share. For the nine months, we earned about a $109 million from continuing operations;…

(Opeartor Instructions) Your first question comes from the line of Ann Gurkin – Davenport & Co. Ann Gurkin – Davenport & Co.: I wanted to start with your comment about nearing completion of shipping in some regions. Can you tell us the percentage of your annual shipping volume that you have completed now?

Ann, we don’t have a precise percentage. But we know proportionally, we have shipped more tobacco out of the most of the regions – those are crops we handle in those regions – in the current year. So we just, proportionally, have shipped a lot more tobacco than we did at same point in time last year. Ann Gurkin – Davenport & Co.: Okay. What was shipped in the fourth quarter, some of that was pulled into the third quarter? Is that fair?

That’s right. Ann Gurkin – Davenport & Co.: Okay.

If you just look at, for example, places like Africa, where the crops are smaller, we didn’t simply reduce the same percentage of our shipments by the percentage that the crop is lower. We are still shipping at a normal pace, or faster, but there is less crop to ship, so some of them are nearly finished. And you can see that in our inventory reduction. Ann Gurkin – Davenport & Co.: So it’s more the crop size than customers pulling volume forward, because are they nervous?

I would never characterize our customers as nervous. Ann Gurkin – Davenport & Co.: Okay. Sales were up 12%. Can you give us the percentage of that 12% that was due to timing of shipments? That’s another way of asking.

Again we just don’t look at it that way; we don’t spend any time to try to figure that out. Maybe we should, but we don’t. Ann Gurkin – Davenport & Co.: Okay.

I would suspect that good chunk of it is, though. Ann Gurkin – Davenport & Co.: The chunk would be 50%?

Maybe even more than that. A very large part of the change in Other Tobacco Operations is shipment timing. Ann Gurkin – Davenport & Co.: Okay. Can give me the amount of the gains from the sale of the investment in the oriental joint venture?

I don’t know if we’ve disclosed that before or not. Our share of it was less then $2 million.

Comparison to this year is only a $2 million increase, year-to-date. So it’s not a huge number. Ann Gurkin – Davenport & Co.: Okay. Last, can you give us any update on how are contract negotiations going, particularly in Brazil?

I think they are at the normal place they would be at this time in a year. Ann Gurkin – Davenport & Co.: Are you finding in discussions with manufacturers or customers that they are trying to price leaf on a global basis, rather than market by market? Are they trying to shift how they do their business with you?

I would say the answer to that is no. Ann Gurkin – Davenport & Co.: Okay. They are still doing market by market?

I don’t think there has been a change in how we do business with our customers. Ann Gurkin – Davenport & Co.: That’s great. Thank you.

Your next question comes from the line Steve Marascia – Anderson & Strudwick. Steve Marascia – Anderson & Strudwick : Good afternoon, and congrats on a good quarter. Just couple of questions for you. First, assuming the U.S. dollar, which has been rallying of late, continues, how should we look at that as impacting your overall businesses going forward? Generally speaking, of course.

It’s a uniform weakness change around the world. So I think it’s safe to say that all of our costs in local currency costs will be going up. Some places have been stronger than others, like Brazil. And that’s partly the strength of Brazil as a commodity producer. So it’s generally a negative effect on our costs. Steve Marascia – Anderson & Strudwick : And a question I’m asking pretty much every corporation nowadays. With your financing situation, tell me what you have seen. Have you felt any effects from what’s going on in the subprime contagion, in terms of any type of collateralized; or I guess you wouldn’t own any. But in terms of any short-term finance you are seeking, has it affected rates, or do you see it affecting or availability of short-term rates for you?

No, we are in a really nice position in today’s market, in that we have a substantial amount of cash. We are monitoring the investment of that very closely. Steve Marascia – Anderson & Strudwick : Okay. So you have no subprime exposure? Or there are some that you are just monitoring?

I don’t think we have any. There is no direct subprime exposure at all. Steve Marascia – Anderson & Strudwick : Okay. Thank you very much.

Your next question comes form the line of Dax Vlassis – Gates Capital Management. Dax Vlassis – Gates Capital Management : You talked about some pricing increases in the quarter versus a year ago, can you expand on that? You said it was by region. Can you give me any more information on that?

To the extent we have prior leaf costs, and we try to pass that through, we’re getting higher leaf prices. It doesn’t mean we’re passing it entirely through in every region, but it’s typically an effect of higher leaf prices for the farmers. Dax Vlassis – Gates Capital Management : Okay. But has there been any change in the customer? Are these previously negotiated, and then basically, they give you an increase because your costs are up?

I think it depends on the timing of the negotiation and the customer. Dax Vlassis – Gates Capital Management : Okay.

We would have expected everybody has seen the dollar weakening for some time. So in discussions with customers, you are certainly talking about currency changes and cost increases, particularly in place like Africa, were the crops are short. You know that costs are going up. Dax Vlassis – Gates Capital Management : Right. And you start negotiating pricing for the next big part of the year at this time of the year?

Some origins. Dax Vlassis – Gates Capital Management : Okay. What was your uncommitted inventory at the end of the quarter?

About $63 million. Dax Vlassis – Gates Capital Management : Okay. And I noticed that minority interests went down quite a bit, year over year, in the quarter. Can you explain that?

That’s coming out of Africa, Dax. It’s a little bit complicated, but you have a local entity in Africa that we don’t own 100% of, and in the prior year, there were a lot of shipments from that company through our system. Dax Vlassis – Gates Capital Management : So, last year was abnormally high?

It’s a matter of shipment timing. Dax Vlassis – Gates Capital Management : Okay. And then, with the split from Altria and Philip Morris International, will there be any impact on your business?

We work with both entities as they are working through the split. And it’s too early to say what effect it could have. Dax Vlassis – Gates Capital Management : Okay. Does that trigger any contract terminations, or anything as far as re-negotiating those contracts? Or are they just season by season?

We have a remaining contract in the Untied States. There are no issues. Dax Vlassis – Gates Capital Management : Okay. And then on the cash, some of the $500 million would at some point go back into building back up your inventories. They seem historically at a very, very low point. How much of that $502 million do you assume is available for use for a repurchases or debt pay down, etc.?

Next week, we are going to pay down $150 million of debt that’s maturing. Dax Vlassis – Gates Capital Management : Right.

And we are just at the very beginning – actually end of December – we hadn’t spent much at all on the Brazil season, which is fairly substantial season. So, we think we have a use for that, but if everything works the way at should, what goes out for inventory will come back. Our stock repurchase program is based on free cash flow. Dax Vlassis – Gates Capital Management : Right, which was fairly large in the quarter. It doesn’t seem like you bought back any stock.

We’ve not been in the market for a full quarter, Dax. Dax Vlassis – Gates Capital Management : Yes.

So we expect that to continue as the same pattern that we did. We had an extended share repurchase from 1998 to 2003, and our typical pattern is to be in the market every day. So that will continue. Dax Vlassis – Gates Capital Management : Right. But what portion of your cash do you view as available,,if you assume you pay down the $150 million, it’d be $350 million roughly.

Our program is a $150 million. Dax Vlassis – Gates Capital Management : Okay. And then, I think you still have an under-funded pension plan. Are you planning on making contributions to that this year? And if so, how much?

The pension plan is not unfunded.

What you see when you look at our footnote includes an unfunded plan, basically. It’s not an ERISA plan. So that’s why it looks under-funded. We put in extra money last year. But the plan looks fairly well funded right now. So we’ll continue to put some in, because that’s what we do to be responsible to the plan. But we don’t think we’re under-funded. Dax Vlassis – Gates Capital Management : Okay. And last question. How come you didn’t buy back stock in the quarter if you had the availability, and cash flow generation was fairly strong?

We bought $4 million worth of stock in the quarter. I don’t think that’s nothing. Dax Vlassis – Gates Capital Management : Okay. Thank you.

Your next question comes from the line of Christopher Dechiario – ISI Capital. Christopher Dechiario – ISI Capital: Just couple of questions. Your level of provisions for farmer receivables, would you characterize that as back to a normal level now; is there an average level? I see you had a significant reduction, just in the nine months, for provision of farmer receivables. Is that something that, going forward over the next fiscal year, there will be more reduction? Or are you pretty much at a level that you consider to be normal?

It’s going to vary seasonally. As the Brazilian crops come in, and we withhold money from the farmers, you will see a change in the amount. But we think it’s at a fairly normal level now. Christopher Dechiario – ISI Capital: Right. So other than seasonal effects.

Yes. Christopher Dechiario – ISI Capital: That’s fairly normal. Okay. Maybe just ask about the Brazil season a little differently. If you compare what you know so far in terms of this year crop and this year’s real, versus what you had at this point going to last year? How would you characterize the crop, one versus the other? And in terms of the impact the real would have on you, basically, so far?

The crop is going to be more expensive, for sure. Christopher Dechiario – ISI Capital: And in terms of quality?

The quality – it’s just starting to come in. And there was some cold weather early on. I think we had either too much rain, or too little rain, I don’t recall which now, so it might be slightly off. Christopher Dechiario – ISI Capital: And in terms of currency, if we just make the broad assumption, let’s just say the real stays exactly where it is right now for the next four, five months. Would that mean that you basically wouldn’t really be affected by the real? Is this a period where the real moving doesn’t really affect you? Other than the fact of prices are higher from last year, I think that you haven’t finished negotiations with your customers yet. You can probably make a pretty good case already for passing this along. If the real happens to stay roughly flat here, do you think you’d have much in the way of unexpected real losses? Or crop prices that you can’t pass through?

The big effect on the real is the year-to-year change, because we fund in dollars what we buy. So during the season, weakening real will just cost us more through the season. Christopher Dechiario – ISI Capital: Right.

But in your scenario, there is no change from now. You wouldn’t have a surprise, but you certainly would already have higher costs that you were expecting. We’ve also had balance sheet re-measurement gains, and those actually aren’t realized yet. Those are on local currency assets; until they’re realized they are not done. So that could change. Christopher Dechiario – ISI Capital: Okay. To the extent that whatever movements happened between last year and now, while you’re still negotiating with your customers, how receptive have they’ve been to allowing you to recover those costs so far?

We’re still in discussions, so that remains to be seen. Christopher Dechiario – ISI Capital: Okay. And my last question. Has the improvement in sales you have had, in spite of some of the problems, does any of that come from a change in market share between you and AOI, that you can see? In any of your markets?

We always hope for market share change. I think to the extent we have it, with only two players, it tends to be fairly ephemeral. It comes back and forth, and there are a few regional players that may be picking up share. But on a permanent basis, I would never expect it. Christopher Dechiario – ISI Capital: And then, let say the last nine months, is that something you would have seen that would have, so to say, temporarily gone one way or the other?

I don’t think we ought to comment on that. Christopher Dechiario – ISI Capital: Okay. Thank you.

(Opeartor Instructions) And your next question comes from the line of Bryan Hunt – Wachovia. Bryan Hunt – Wachovia : I was wondering if you could just comment on the recent headlines of Malawi crop damage, what impact it could have on quality and overall volume? Do you know how much of the crop may have been damaged?

I actually haven’t seen those headlines Bryan. We are aware that they have had a lot of rain this year in that region, as they did last year in Malawi and Mozambique. But it’s a little too early to say what effect that’s going to have on the crop. A very large crop was planted. So, we still would like to see more volume there. The headlines you are talking about, when were those? Bryan Hunt – Wachovia : I think it was two weeks ago.

Okay. Bryan Hunt – Wachovia : And then, with regards to, you say a very large crop, last year’s crop was obviously short, or small, relative to expectations and needs. Do you believe the amount of tobacco that’s being planted in Malawi and Mozambique is in line with your demands and your customers’ demand are in that region?

We think that if the entire crop came in, a very large crop, the world market would still be a bit short of burley. But it would go a long way toward helping the situation.

Normally with the size of the shortage that we started with, when the crops were planted, we knew it wouldn’t get rectified with one crop. It would take at least two. Bryan Hunt – Wachovia : Okay. And then switching gears and focusing back on Brazil and some of the comments you made. If you were to look at the Brazil quality of the flue-cured crop, so far, I know it’s early, would you say in line with historical average quality from this standpoint? Or do you feel like you’re on the low-end or the high-end of average? Is there a better metric in which you could describe the quality of the crop for us?

Bryan, I really don’t have a characterization of it, but I am not aware of any huge problem with the quality of the crop. I urge you, though, to stay in touch with our website, because we do publish every month an update on that. And there should be one in another ten days. Bryan Hunt – Wachovia : Okay. And then, when we look at industry inventory, your uncommitted inventory is very low from historical standards. So is your competitor, just in our opinion, based on the tightness of inventory in the industry. Do you feel like that gives the merchant tobacco producers pricing power relative to historical inventory levels? And what do you feel like the inventory levels are at your customers? Do you feel like their inventory levels are tight?

Low uncommitted inventories are little bit of it of a double-edged sword, unless you have big crops coming in, because you might get some pricing power, but you wouldn’t have anything to sell. We have said for a long time that we have very big customers who rely on us for continuity of supply. They stay with us through tough times, and we don’t gouge them when the crop is short. Having said that, we do need to cover our costs, and we’ve been working to that end. I have no way of knowing what customer inventories are. That’s not something that’s reported anywhere. But I am sure that burley given just the shortness in current crops is probably a concern there. Bryan Hunt – Wachovia : And digging a little bit more into your statement, you don’t gouge them when the crop is short. Does the company feel like, or the Board of Directors of UVV feel like, that the company’s return on invested capital has been sufficient in the last couple of years?

We work with our customers continually on that, and that’s not an issue. I think it would just be short-sighted if we held our tobacco out to the highest bidder. We have very large customers, and they look to us. Bryan Hunt – Wachovia : Looking in the context of the industry shortage, are you all pushing your farmers to plant bigger crops next year? And are your customers looking for you to commit more to committed inventories in light of the industry shortages?

I am not sure how to answer that, Bryan. We are pretty early in the game on some of this. The crops that are coming in for fiscal year 2009 are already planted. And all the numbers, or what we see for crops worldwide, are out there.

Your question is about six months too soon.

And then it would be fiscal year 2010. Bryan Hunt – Wachovia : Right, got you.

We are just now beginning to kick off the major purchases in South America, and Africa will start in April. Bryan Hunt – Wachovia : Given that the U.S. is more commission process market, do you think the tobacco companies – since we haven’t planted tobacco in North America yet – do you think they will push hard to increase acreage in North America?

I don’t know. I think certainly the weakness of the dollar has been benefiting the U.S. farmer, and we are all reading stories about how they may be returning to tobacco growing. So you could see that. I think also, on our website, we have some projections for crops for 2008, which would be this year. I think there is an increased projection there. Bryan Hunt – Wachovia : All right, I appreciate your time. Thank you very much.

Your next question is a follow-up from the line of Dax Vlassis – Gates Capital Management. Dax Vlassis – Gates Capital Management : On cash flow statement, there is a deposit to escrow account. What is that?

We have a guaranteed bond in our appeal, on the EU fines. And there was a change in banks, and we ended up cash collateralizing that temporarily. That will be coming back. Dax Vlassis – Gates Capital Management : Okay. When do you expect to get that back?

Maybe tomorrow; maybe next week. It’s very soon. Dax Vlassis – Gates Capital Management : Okay. And then you’d mentioned some of the regional players in the market. Has the competition increased from them, or with shortness of crops, are they getting a bunch of the crops that are – I don’t know how to say this, but taken from other fields? Or however they get their crops?

We are at the point in the world market where we’re starting to buy in Brazil; Africa’s crops are just barely coming in. So, in terms of the coming crop, there’s just hasn’t been much action. We always think that that our dedication to quality and to the market should stand us in good stead with our customers and that the regional competitors will do well up to a point. But they may have limited inroads. But we’ll see. They can certainly improve their quality, as well. Dax Vlassis – Gates Capital Management : Okay, thanks.

(Opeartor Instructions) There are no further questions at this time.

Thanks very much. And thank all of you for joining us for the third quarter call, and we’ll talk to you next quarter. Thank you.

This concludes today’s conference call. You may now disconnect.