Universal Corporation
Nov 5, 2009

Universal Corporation Reports Improved Six Month Results

RICHMOND, Va., Nov. 5 /PRNewswire-FirstCall/ --

 

HIGHLIGHTS

Six Months

Diluted earnings per share increased to $3.23 versus $2.02 last year.

Revenues flat as pricing and mix offset effect of shipment delays.

Operating income up 33%, to $146 million on lower currency costs and better product mix.

 

Quarter

Diluted earnings per share increased to $1.77 versus $1.38 last year.

Revenues down 18% to $648 million on lower volumes due to shipment timing.

Operating income up 7%, to $76 million on lower currency costs.

 

George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE: UVV), announced that net income for the first six months of fiscal year 2010, which ended on September 30, 2009, was $96.3 million, or $3.23 per diluted share. Results were above last year's net income of $62.9 million, or $2.02 per diluted share, mostly because of a $17 million decline in currency-related costs, better margins, and a favorable tax rate related to the reversal of provisions for uncertain tax positions due to expiration of the time period during which those positions could be challenged by the tax authorities. Revenues for the six months of about $1.3 billion were flat, as lower volumes due to later shipments and reduced old crop tobacco sales were offset by a better mix of business and higher prices in some areas.

 

For the second quarter of fiscal year 2010, net income was $52.5 million, or $1.77 per diluted share, compared to last year's net income of $41.8 million, or $1.38 per diluted share. The increase was primarily due to a $25 million decline in currency-related costs and the tax provision reversal. Revenues for the quarter of about $648 million were down significantly, as some shipments were either accelerated into the first quarter or delayed until later in the year.

 

Mr. Freeman stated, "We are very pleased with our performance so far this year. All of our operations continue to perform well, benefitting from continued cost controls and global coordination. Earlier shipments of Brazilian and European tobacco boosted results in our first fiscal quarter, so we expected lower volumes this period. In addition, some African shipments will be later this year than last. Our costs were lower this quarter, especially those related to currency movement, and that factor has offset the effect of reduced shipments.

 

"We do not foresee an oversupply of flue-cured tobacco in the coming year. In fact, rains in Brazil during the season could reduce the crop there. Although African burley crops were very large this year, they were smaller than we anticipated, and it appears that the supply has been absorbed by the market. We would not expect to see any significant increase in worldwide dealer inventories for flue-cured and burley tobacco. However, looking at the current worldwide situation, the U.S. dollar has weakened in recent weeks, which could increase costs as we enter the next purchasing season.

 

"As we look ahead in the intermediate term, we will maintain our relationship with Japan Tobacco Inc. ("JTI"), one of our largest customers, as they work on their previously announced steps to enhance direct leaf procurement capabilities in some origins by acquiring and entering joint ventures with smaller leaf merchants. They have made certain announcements in recent weeks regarding their progress toward that goal, and we believe that it is likely that our U.S. flue-cured and burley volumes for JTI as well as our Malawi burley volumes for them will be reduced or eliminated over time, although we expect these actions will have no effect on volumes this fiscal year. We remain focused on measuring the business impact of these volume reductions and believe that we will continue to sell them significant volumes of processed tobacco outside these two countries."

 

FLUE-CURED AND BURLEY LEAF TOBACCO OPERATIONS:

First Six Months

Operating income for the flue-cured and burley tobacco operations, which comprise the North America and Other Regions segments, increased by more than 30% to $134 million for the first half of this fiscal year, largely on the strength of lower currency-related costs and better margins. Revenues were flat, primarily because a better mix of business and higher prices in some areas offset the effect of lower volumes from shipment delays and lower old crop shipments. In North America, operating income increased by nearly $5 million due to higher prices and improved experience with farmer advances in some areas, although revenues declined on lower sales of old crop leaf and lower Canadian volumes. Earnings for the Other Regions segment were up by 28%, primarily due to lower currency-related costs in Brazil. Volumes improved in Asia and South America, although shipment delays in some areas limited that improvement. African shipments were substantially lower this year because the current crop will be shipped later and first quarter shipments of old crop were reduced. Earnings in Africa improved because of a better product mix and additional processing income. In Europe, lower margins and a weaker local currency reduced reported results. Revenues for Other Regions were nearly flat for the six months as lower volumes, especially in Africa, were offset by improved mix.

 

Second Quarter

In the second quarter of fiscal year 2010, operating income for flue-cured and burley operations increased by 5% to $69 million, compared to the same period last year. Revenues for the group at $597 million were markedly lower as improvements in product mix overall did not offset the impact of lower volumes, primarily related to late shipments in Africa and accelerated shipments from Brazil and Europe in the first quarter of fiscal year 2010. Operating income for the North America segment increased by $4 million, largely reflecting some pricing improvements and lower costs, which more than offset the effects of lower volumes shipped. Revenues for North America were down on lower volumes. Results for the Other Regions segment were flat on lower volumes, as operating margins improved mostly because of lower currency losses this year. Although average sales prices in the Other Regions segment were slightly higher in the quarter, that increase was not sufficient to offset the effect on segment revenues of lower shipments from Africa.

 

OTHER TOBACCO OPERATIONS:

The Other Tobacco Operations segment performed well during the first six months of fiscal year 2010. The dark tobacco group saw an improved mix of business that more than offset slightly lower volumes and costs of rationalizing their U.S. operations. Despite an improvement in product mix that benefited current year results, the oriental tobacco joint venture earnings were flat due to the absence of currency gains in the first half of this year. For the second quarter of fiscal year 2010, the segment was flat. Improvement in the dark tobacco business volumes and margin were offset by lower results from the oriental tobacco group where currency gains last year were not repeated. Revenues for the segment were higher in both the quarter and the six months ended September 30, 2009, on higher volumes in the quarter and flat volumes for the six months. Dark tobacco revenues, which are normally the predominant factor in this segment's revenues, were higher in the quarter due to higher prices caused by increased leaf costs during last year's purchasing season and a more favorable product mix. Revenues for dark tobacco were flat for the six months.

 

OTHER ITEMS:

Cost of sales decreased by 21% to about $500 million in the quarter ended September 30, 2009, on the lower volumes shipped, and lower costs, as the U.S. dollar had strengthened against the currencies of many origins during the leaf purchasing season. Selling, general, and administrative costs decreased by 15%, reflecting lower currency remeasurement losses this year. For the six months, the pattern was similar with somewhat lower volumes combining with lower costs to reduce cost of sales by about 5% and selling, general, and administrative expenses falling by 5% in response to lower currency remeasurement losses. Interest expense was about $3 million lower than that of fiscal year 2009 in the quarter and the six months because of lower average borrowing combined with lower average interest rates. The effective income tax rate at 30% for the six months is lower than that of last year because of the reversal of some taxes provided on uncertain tax positions due to expiration of the time period during which those positions could be challenged by the tax authorities. Absent that reversal, the rate would be lower than the U.S. statutory income tax rate due to the relative size of earnings in regions with lower statutory tax rates.

 

Additional information

Amounts included in the previous discussion are attributable to Universal Corporation and exclude earnings related to non-controlling interests in subsidiaries.

 

This information includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions readers that any statements contained herein regarding earnings and expectations for its performance are forward-looking statements based upon management's current knowledge and assumptions about future events, including anticipated levels of demand for and supply of its products and services; costs incurred in providing these products and services; timing of shipments to customers; changes in market structure; and general economic, political, market, and weather conditions. Actual results, therefore, could vary from those expected. A further list and description of these risks, uncertainties and other factors can be found in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2009, and in other documents the Company files with the Securities and Exchange Commission. This information should be read in conjunction with the Annual Report on Form 10-K for the year ended March 31, 2009.

 

At 5:00 p.m. (Eastern Time) on November 5, 2009, the Company will host a conference call to discuss these results. Those wishing to listen to the call may do so by visiting www.universalcorp.com at that time. A replay of the webcast will be available at that site for three months. A taped replay of the call will also be available until November 26, 2009, by dialing (800) 642-1687. The confirmation number to access the replay is 39756293.

 

Headquartered in Richmond, Virginia, Universal Corporation is the world's leading tobacco merchant and processor and conducts business in more than 30 countries. Its revenues for the fiscal year ended March 31, 2009, were $2.6 billion. For more information on Universal Corporation, visit its web site at www.universalcorp.com.

 

 

    UNIVERSAL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME
    (In thousands of dollars, except per share data)

                                  Three Months Ended     Six Months Ended
                                     September 30,         September 30,
                                     -------------         -------------
                                     2009      2008      2009        2008
                                     ----      ----      ----        ----
                                     (Unaudited)           (Unaudited)

    Sales and other operating
     revenues                    $647,918  $785,590  $1,264,030  $1,291,877

    Costs and expenses
        Cost of goods sold        500,575   630,447     977,323   1,033,700
        Selling, general and
         administrative expenses   71,478    83,948     141,070     148,795
                                   ------    ------     -------     -------

    Operating income               75,865    71,195     145,637     109,382
        Equity in pretax earnings
         of unconsolidated
         affiliates                 5,605     7,583       9,246       7,533
        Interest income               231       417         796       1,367
        Interest expense            6,694    10,113      14,849      17,779
                                    -----    ------      ------      ------

    Income before income taxes
     and other items               75,007    69,082     140,830     100,503
        Income taxes               20,335    23,115      42,354      33,396
                                   ------    ------      ------      ------

    Net income                     54,672    45,967      98,476      67,107

    Less:  net income attributable
     to noncontrolling interests
     in subsidiaries               (2,157)   (4,185)     (2,216)     (4,214)
                                   ------    ------      ------      ------

    Net income attributable
     to Universal Corporation      52,515    41,782      96,260      62,893

    Dividends on Universal
     Corporation convertible
     perpetual preferred stock     (3,713)   (3,713)     (7,425)     (7,425)
                                   ------    ------      ------      ------

    Earnings available to
     Universal Corporation
     common shareholders          $48,802   $38,069     $88,835     $55,468
                                  =======   =======     =======     =======

    Earnings per share
     attributable to
     Universal Corporation
     common shareholders:
        Basic                       $1.97     $1.50       $3.57       $2.12
                                    =====     =====       =====       =====
        Diluted                     $1.77     $1.38       $3.23       $2.02
                                    =====     =====       =====       =====


    See accompanying notes.

 

    UNIVERSAL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (In thousands of dollars)


                                  September 30,  September 30,   March 31,
                                        2009           2008        2009
                                        ----           ----        ----
                                    (Unaudited)    (Unaudited)
                ASSETS

    Current
        Cash and cash equivalents       $61,991        $40,765    $212,626
        Short-term investments                -         15,950           -
        Accounts receivable, net        293,985        284,107     263,383
        Advances to suppliers, net       89,169        169,342     214,282
        Accounts receivable -
         unconsolidated affiliates       39,199         34,403      20,371
        Inventories - at lower of
         cost or market:
            Tobacco                     919,842        778,053     586,136
            Other                        66,039         80,095      60,712
        Prepaid income taxes             23,544         10,058      13,181
        Deferred income taxes            48,503         32,979      68,264
        Other current assets             74,236         90,503      64,964
                                         ------         ------      ------
            Total current assets      1,616,508      1,536,255   1,503,919

    Property, plant and equipment
        Land                             16,188         16,133      15,773
        Buildings                       259,596        255,875     251,875
        Machinery and equipment         523,380        504,568     492,214
                                        -------        -------     -------
                                        799,164        776,576     759,862
            Less accumulated
             depreciation              (476,256)      (450,946)   (447,575)
                                       --------       --------    --------
                                        322,908        325,630     312,287
    Other assets
        Goodwill and other intangibles  106,036        106,267     106,097
        Investments in
         unconsolidated affiliates      120,608        108,137     103,987
        Deferred income taxes            15,080         33,512      17,376
        Other noncurrent assets         115,342         96,767      94,510
                                        -------         ------      ------
                                        357,066        344,683     321,970
                                        -------        -------     -------

            Total assets             $2,296,482     $2,206,568  $2,138,176
                                     ==========     ==========  ==========

    See accompanying notes.



    UNIVERSAL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (In thousands of dollars)

                                         September 30, September 30, March 31,
                                             2009         2008        2009
                                             ----         ----        ----
                                         (Unaudited)  (Unaudited)
    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current
        Notes payable and overdrafts        $301,376     $260,511    $168,608
        Accounts payable and accrued
         expenses                            214,729      205,166     236,837
        Accounts payable - unconsolidated
         affiliates                            6,988          320      19,191
        Customer advances and deposits        70,089       60,326      14,162
        Accrued compensation                  22,581       17,632      24,710
        Income taxes payable                  11,574        9,891       6,867
        Current portion of long-term
         obligations                               -       79,500      79,500
                                                  --       ------      ------
            Total current liabilities        627,337      633,346     549,875

    Long-term obligations                    331,905      321,617     331,808

    Pensions and other
     postretirement benefits                  86,888       91,562      91,248

    Other long-term liabilities               73,845       88,296      79,159

    Deferred income taxes                     55,035       35,335      52,842
                                              ------       ------      ------

            Total liabilities              1,175,010    1,170,156   1,104,932

    Shareholders' equity
      Universal Corporation:
        Preferred stock:
           Series A Junior Participating
            Preferred Stock, no par
            value, 500,000 shares
            authorized, none issued
            or outstanding                         -            -           -
           Series B 6.75% Convertible
            Perpetual Preferred Stock,
            no par value, 5,000,000 shares
            authorized, 219,999 shares
            issued and outstanding
            (219,999 at September 30,
            2008, and March 31, 2009)        213,023      213,023     213,023
        Common stock, no par value,
         100,000,000 shares authorized,
         24,715,901 shares issued and
         outstanding (25,026,040 at
         September 30, 2008, and
         24,999,127 at March 31, 2009)       195,227      193,643     194,037
        Retained earnings                    743,922      653,402     686,960
        Accumulated other comprehensive loss (36,745)     (30,944)    (64,547)
                                             -------      -------     -------
               Total Universal Corporation
                shareholders' equity       1,115,427    1,029,124   1,029,473

      Noncontrolling interests in subsidiaries 6,045        7,288       3,771
                                               -----        -----       -----

               Total shareholders' equity  1,121,472    1,036,412   1,033,244
                                           ---------    ---------   ---------

               Total liabilities and
                shareholders' equity      $2,296,482   $2,206,568  $2,138,176
                                          ==========   ==========  ==========


    See accompanying notes.



    UNIVERSAL CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands of dollars)
                                                             Six Months Ended
                                                               September 30,
                                                               -------------
                                                               2009      2008
                                                               ----      ----
                                                               (Unaudited)
    CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income                                           $98,476   $67,107
       Adjustments to reconcile net income to net
        cash used by operating activities:
          Depreciation                                       20,524    20,451
          Amortization                                        1,020       493
          Provisions for losses on advances and guaranteed
           loans to suppliers                                 8,827     9,972
          Remeasurement loss (gain), net                      8,562    24,603
          Other, net                                          8,562    10,006
          Changes in operating assets and liabilities, net (279,720) (321,938)
                                                           --------  --------
            Net cash used by operating activities          (133,749) (189,306)
                                                           --------  --------

    CASH FLOWS FROM INVESTING ACTIVITIES:
        Purchase of property, plant and equipment           (26,429)  (21,748)
        Purchases of short-term investments                       -    (9,658)
        Maturities and sales of short-term investments            -    52,740
        Proceeds from sale of property, plant and
         equipment, and other                                 2,134    14,298
                                                              -----    ------
            Net cash provided (used) by investing
             activities                                     (24,295)   35,632
                                                            -------    ------

    CASH FLOWS FROM FINANCING ACTIVITIES:
        Issuance of short-term debt, net                    125,997   144,884
        Repayment of long-term obligations                  (79,500)        -
        Issuance of common stock                                 72        37
        Repurchase of common stock                          (10,947) (105,689)
        Dividends paid on convertible perpetual
         preferred stock                                     (7,425)   (7,425)
        Dividends paid on common stock                      (22,950)  (22,962)
                                                            -------   -------
            Net cash provided by financing activities         5,247     8,845
                                                              -----     -----


    Effect of exchange rate changes on cash                   2,162      (476)
                                                              -----      ----
    Net decrease in cash and cash equivalents              (150,635) (145,305)
    Cash and cash equivalents at beginning of year          212,626   186,070
                                                            -------   -------

    Cash and cash equivalents at end of period              $61,991   $40,765
                                                            =======   =======


    See accompanying notes.



 

NOTE 1. BASIS OF PRESENTATION

Universal Corporation, with its subsidiaries ("Universal" or the "Company"), is the world's leading leaf tobacco merchant and processor. Because of the seasonal nature of the Company's business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year. All adjustments necessary to state fairly the results for the period have been included and were of a normal recurring nature. Certain amounts in prior year statements have been reclassified to conform to the current year presentation. This press release should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2009.

 

NOTE 2. ACCOUNTING PRONOUNCEMENTS

Effective April 1, 2009, Universal adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51" ("SFAS 160"). SFAS 160 requires that noncontrolling interests in subsidiaries that are included in a company's consolidated financial statements, commonly referred to as "minority interests," be reported as a component of shareholders' equity in the balance sheet. It also requires that a company's consolidated net income include the amounts attributable to both the company's interest and the noncontrolling interest in the subsidiary, identified separately in the financial statements. The new guidance requires certain disclosures about noncontrolling interests in the consolidated financial statements. Adoption of SFAS 160 did not have a material impact on the Company's financial statements.

 

NOTE 3. GUARANTEES AND OTHER CONTINGENT LIABILITIES

Guarantees of bank loans to growers for crop financing and construction of curing barns or other tobacco producing assets are industry practice in Brazil and support the farmers' production of tobacco there. At September 30, 2009, the Company's total exposure under guarantees issued by its operating subsidiary in Brazil for banking facilities of farmers in that country was approximately $154 million ($176 million face amount including unpaid accrued interest, less $22 million recorded for the fair value of the guarantees). About 70% of these guarantees expire within one year, and all of the remainder expire within five years. The subsidiary withholds payments due to the farmers on delivery of tobacco and forwards those payments to the third-party banks. Failure of farmers to deliver sufficient quantities of tobacco to the subsidiary to cover their obligations to the third-party banks could result in a liability for the subsidiary under the related guarantees; however, in that case, the subsidiary would have recourse against the farmers. The maximum potential amount of future payments that the Company's subsidiary could be required to make at September 30, 2009, was the face amount, $176 million including unpaid accrued interest ($163 million as of September 30, 2008, and $139 million at March 31, 2009). The fair value of the guarantees was a liability of approximately $22 million at September 30, 2009 ($28 million at September 30, 2008, and $35 million at March 31, 2009). In addition to these guarantees, the Company has other contingent liabilities totaling approximately $56 million, primarily related to a bank guarantee that bonds an appeal of a 2006 fine in the European Union. Various subsidiaries of the Company are involved in other litigation and tax examinations incidental to their business activities. While the outcome of these matters cannot be predicted with certainty, management is vigorously defending the claims and does not currently expect that any of them will have a material adverse effect on the Company's financial position. However, should one or more of these matters be resolved in a manner adverse to management's current expectation, the effect on the Company's results of operations for a particular fiscal reporting period could be material.

 

NOTE 4. EARNINGS PER SHARE

The following table sets forth the computation of earnings per share for the periods presented in the consolidated statements of income.

 

                                       Three Months Ended  Six Months Ended
                                           September 30,     September 30,
                                           -------------     -------------
    (in thousands, except per share data)   2009     2008     2009     2008
    -------------------------------------   ----     ----     ----     ----

    Basic Earnings Per Share
    ------------------------
    Numerator for basic earnings per share
       Net income attributable to
        Universal Corporation            $52,515  $41,782  $96,260  $62,893
       Less:  Dividends on convertible
        perpetual preferred stock         (3,713)  (3,713)  (7,425)  (7,425)
                                          ------   ------   ------   ------
       Earnings available to Universal
        Corporation common shareholders
        for calculation of basic
        earnings per share                48,802   38,069   88,835   55,468
                                          ------   ------   ------   ------


    Denominator for basic earnings per share
       Weighted average shares
        outstanding                       24,801   25,404   24,892   26,146
                                          ------   ------   ------   ------

    Basic earnings per share               $1.97    $1.50    $3.57    $2.12
                                           =====    =====    =====    =====

    Diluted Earnings Per Share
    --------------------------
    Numerator for diluted earnings per share
       Earnings available to Universal
        Corporation common shareholders  $48,802  $38,069  $88,835  $55,468
       Add:  Dividends on convertible
        perpetual preferred stock (if
        conversion assumed)                3,713    3,713    7,425    7,425
                                           -----    -----    -----    -----
       Earnings available to Universal
        Corporation common shareholders
        for calculation of diluted
        earnings per share                52,515   41,782   96,260   62,893
                                          ------   ------   ------   ------


    Denominator for diluted earnings per share:
       Weighted average shares
        outstanding                       24,801   25,404   24,892   26,146
       Effect of dilutive securities
        (if conversion or exercise assumed)
           Convertible perpetual
            preferred stock                4,732    4,716    4,730    4,715
           Employee share-based awards       162      229      147      224
                                             ---      ---      ---      ---

       Denominator for diluted earnings
        per share                         29,695   30,349   29,769   31,085
                                          ------   ------   ------   ------


    Diluted earnings per share             $1.77    $1.38    $3.23    $2.02
                                           =====    =====    =====    =====



 

For the three- and six-month periods ended September 30, 2009 and 2008, certain employee share-based awards were not included in the computation of diluted earnings per share because their effect would have been anti-dilutive. These awards included stock appreciation rights and stock options totaling 725,201 shares at a weighted-average exercise price of $50.33 for the quarter and six months ended September 30, 2009, and 404,800 shares at a weighted-average exercise price of $58.96 for the quarter and six months ended September 30, 2008.

 

NOTE 5. SEGMENT INFORMATION

The principal approach used by management to evaluate the Company's performance is by geographic region, although some components of the business are evaluated on the basis of their worldwide operations. The Company evaluates the performance of its segments based on operating income after allocated overhead expenses (excluding significant non-recurring charges or credits), plus equity in pretax earnings of unconsolidated affiliates.

 

Operating results for the Company's reportable segments for each period presented in the consolidated statements of income were as follows:

 

 

                                    Three Months Ended   Six Months Ended
                                       September 30,       September 30,
                                       -------------       -------------
    (in thousands of dollars)          2009     2008       2009       2008
                                       ----     ----       ----       ----
    SALES AND OTHER OPERATING REVENUES

      Flue-cured and burley leaf
       tobacco operations:
        North America                $49,874  $54,866    $86,006   $103,293
        Other regions (1)            547,177  686,276  1,068,349  1,087,761
                                     -------  -------  ---------  ---------
          Subtotal                   597,051  741,142  1,154,355  1,191,054
      Other tobacco
        operations (2)                50,867   44,448    109,675    100,823
                                      ------   ------    -------    -------

      Consolidated sales and
       other operating
       revenues                     $647,918 $785,590 $1,264,030 $1,291,877
                                    ======== ======== ========== ==========

    OPERATING INCOME

      Flue-cured and burley leaf
       tobacco operations:
        North America                 $7,948   $3,750     $8,254     $3,324
        Other regions (1)             61,477   62,453    125,386     97,638
                                      ------   ------    -------     ------
          Subtotal                    69,425   66,203    133,640    100,962
      Other tobacco
       operations (2)                 12,045   12,575     21,243     15,953
                                      ------   ------     ------     ------

      Segment operating income        81,470   78,778    154,883    116,915

      Less:
        Equity in pretax
         earnings of
         unconsolidated
         affiliates (3)                5,605    7,583      9,246      7,533
                                       -----    -----      -----      -----

      Consolidated operating
       income                        $75,865  $71,195   $145,637   $109,382
                                     =======  =======   ========   ========

    (1)  Includes South America, Africa, Europe, and Asia regions, as well as
         inter-region eliminations.
    (2)  Includes Dark Air-Cured, Special Services, and Oriental, as well as
         inter-company eliminations.  Sales and other operating revenues for
         this reportable segment include limited amounts for Oriental because
         its financial results consist principally of equity in the pretax
         earnings of an unconsolidated affiliate.
    (3)  Item is included in segment operating income, but not included in
         consolidated operating income.



 

SOURCE Universal Corporation

Karen M. L. Whelan of Universal Corporation, +1-804-359-9311, Fax, +1-804-254-3584, investor@universalleaf.com