Welcome to the Universal Corporation First Quarter Fiscal Year 2017 Earnings Call. I would like to turn the call over to Candace Formacek, Vice President and Treasurer for Universal Corporation. Ma’am, you may begin.

Thank you, Jason and thank you for joining us. George Freeman, our Chairman, President and CEO and David Moore, our Chief Financial Officer are here with me today and they will join me in answering questions after these 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 through November 4, 2016. Other than the replay, we have not authorized and disclaim responsibility for any recording, replay or distribution of any transcription of this call. This call is copyrighted and may not be used without our permission. 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 and are representative as of today only. Actual results could differ materially from projected or estimated results, and we assume no obligation to update any forward-looking statements. For information on some of the factors that can affect our estimates, I urge you to read our 10-K for the year ended March 31, 2016, as well as our Form 10-Q for the first fiscal quarter of 2017. Such factors include, but are not limited to, customer-mandated timing of shipments, weather conditions, political and economic environment, government regulation, changes in currency, industry consolidation and evolution, and changes in market structure or sources. Some of the information I have for you today is based on unaudited allocations and are subject to reclassification. In an effort to provide useful information to investors, our comments today may include non-GAAP financial measures. For details on these measures, including reconciliations to the most comparable GAAP measures, please refer to our current earnings press release. Results for the first quarter of fiscal year 2017, which…

[Operator Instructions] And your first question comes from the line of Ann Gurkin.

Good evening, everyone.

Hello, Ann.

Wanted to start with your comment regarding the supply of flue-cured and burley in line with demand, can you tell me about the quality of the leaf globally?

Well, Brazil – I think Brazil was average.

I don’t think we are seeing any particular quality issues at this point.

There is not really anything out of line and they are either on – in either direction. No, again, there is always been high-quality tobaccos. High-quality grades are always kind of tight, but in general, it’s sort of just average.

Okay. With that scenario then putting us at a smaller crop in Brazil, I would think your customer orders were pretty lean or certainly not in an oversupply situation. So, I would think, excluding Brazil, you should have pretty decent demand from your customers. Is there anything wrong with that thought process?

There is – that’s exact – Brazil is all by itself this year. It’s just a fluke, yes.

Okay. But besides that, demand looks pretty solid from your customers for leaves?

Yes.

Okay, great. And then Candace, in your comments, you referenced the carryover in North America, can you give us a percentage of – can you give us any other numbers on that carryover amount?

We are really not giving the percentages. I don’t know if I even have that number right now. We mentioned last quarter that, that was going to be a factor in the first quarter and this is a result of the shift in timing from the change to our business there from toll processing to full service sales of packed tobaccos. And some of those styles come in later in the fiscal year, so we will carry over into this first year. So, you are seeing a timing difference in this first fiscal quarter, but this is the last time you will see that timing difference.

Right, right, that should be the new normal.

Right. And so I mean, you can look. We did sort of indicate that, that as well as the one change in timing on the Guatemala recognition of income, those are the two factors that are the main drivers in the differences there.

Okay. I am always asking about SG&A up in the quarter, I am assuming currency. How should I think about the balance of the year?

Gosh, Ann, yes, that’s always – currency is really challenging. And some of the currency was also compared to more positive currency results last year, so it was a relative issue, but that’s always something that is hard to predict. And I think as we have said in the past, we always worked to improve our SG&A. Some other currencies that are devaluing do influence somewhat from lower costs there. Depending on where we are with volumes and throughput that can be a factor as well in trying to predict currency in the future quarters’ movements, I am not going to go there.

Especially given our wonderful political situation.

Demand for reconstituted lease, can you comment on that at all, is that improving at all? I think you referenced sheet tobacco.

No. I mean, I guess, you can look at other – there is another public recon maker that just issued their earnings and that’s a different kind, but you can see that. It’s a steady...

Specialty area.

Yes, it’s a steady business. It’s not...

But we did see benefits in our Europe region this quarter driven by...

But given that tighter market for leaf, lots of times that will start increasing demand….

Yes, but it’s going to be a big crop in Brazil and it’s turned now – I mean, the U.S. crop is kind of sneaking up everyday, so...

Okay. You talked about an objective for fiscal ‘17 of improving efficiencies in the market. Can you give me any detail on what that means?

It’s similar to Hungary as an example. There is a lot of opportunity to reduce excess capacity and use things more efficiently.

Okay. And then China, I know it’s hard to predict, but you have seen cigarette volumes down last year estimated to be down this year, how are they in terms of participating on the leaf global market?

They have been very, very – outside of China, they have been very constant the last few years and I don’t see that change even with reduction – even with production reducing.

Okay. And then George, one more question, you had two board members retire today, and one was elected. You seem to have one more spot. Any update on whether you will fill that additional board member seat?

Yes, we probably will. It’s probably – I mean, we are fine with our – with this number. I don’t think – but if we find the right person, we will fill it. So, I expect we will fill it, but we may – it’s all about timing. We may not find someone by the time someone else rolls off. I don’t see it constitute – 7 or 8 outsiders has worked fine.

Great, great. Thank you for your time.

Thanks, Ann.

Thank you, Ann.

And we have no further questions at this time over the phone.

Alright.

That’s great. Thank you, Jason and thank you all for joining us on our call today.

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.