8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: February 5, 2004

(Date of earliest event reported)

UNIVERSAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Virginia	1-652	54-0414210
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1501 North Hamilton Street	23230
Richmond, Virginia	(Zip Code)
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code:

(804) 359-9311

Item  5. Other Events.

The press release issued by the Registrant on February 5, 2004, and attached hereto as Exhibit 99.1 is incorporated herein by reference.

Item  7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits.

No.	Description
99.1	Press release dated February 5, 2004, announcing quarterly dividend.*
99.2	Press release dated February 9, 2004, announcing earnings for period ended December 31, 2003.*

Item  12. Results of Operations and Financial Condition.

On February 9, 2004, Universal Corporation issued a press release announcing its financial results for the quarter ended December 31, 2003. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated into this Item 12. No information contained in or incorporated into this Item 12 shall be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.

*Filed Herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UNIVERSAL CORPORATION (Registrant)
Date: February 9, 2004	By:	/s/    George C. Freeman, III
		George C. Freeman, III General Counsel and Secretary

Exhibit Index

Exhibit Number	Document
99.1	Press release dated February 5, 2004, announcing quarterly dividend.*
99.2	Press release dated February 9, 2004, announcing earnings for period ended December 31, 2003.*

*Filed Herewith

EX-99.1

Universal Corporation

P.O. Box 25099 Richmond, VA 23260 phone: (804) 359-9311 fax (804) 254-3594

PRESS RELEASE

CONTACT	RELEASE
Karen M. L. Whelan	Immediately
Phone: (804) 359-9311 Fax: (804) 254-3594 Email: investor@universalleaf.com

Universal Corporation Announces Quarterly Dividend

Richmond, VA • February 5, 2004 / PRNEWSWIRE

Allen B. King, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE:UVV), announced that the company’s Board of Directors has declared a quarterly dividend of thirty-nine cents ($.39) per share on the common shares of the company, payable May 10, 2004, to common shareholders of record at the close of business on April 12, 2004.

Universal Corporation is a diversified company with operations in tobacco, lumber, and agri-products. Universal Corporation’s gross revenues for the fiscal year that ended on June 30, 2003, were approximately $2.6 billion. For more information on Universal Corporation, visit its web site at www.universalcorp.com.

# # #

EX-99.2

Universal Corporation

P.O. Box 25099 Richmond, VA 23260  ¨  phone: (804) 359-9311  ¨  fax (804) 254-3594

PRESS RELEASE

	CONTACT		RELEASE
Karen M. L. Whelan			4:00 p.m. EST
	Phone:	(804) 359-9311
	Fax:	(804) 254-3594
	Email:	investor@universalleaf.com

Universal Corporation Announces Earnings Increase

Richmond, VA, February 9, 2004 / PRNEWSWIRE

Allen B. King, Chairman, President, and Chief Executive Officer of Universal Corporation (NYSE:UVV), announced today that the Company’s earnings for the second quarter and the first six months of fiscal year 2004 were up significantly compared to the same periods a year ago. For the three-month period ended December 31, 2003, net income was $37.4 million, or $1.48 per diluted share, compared to $26.7 million, or $1.04 per diluted share, in the second quarter of fiscal year 2003. Net earnings for the first six months of fiscal year 2004 were $71.8 million, or $2.85 per diluted share, compared to $55.2 million, or $2.13 per diluted share, in the prior year. Six-month earnings in fiscal year 2003 are net of a $13.5 million before-tax restructuring charge ($8.7 million after taxes, or $0.34 per share) recorded in the first quarter of that year related to the consolidation of U.S. operations. Revenues were $801 million in the quarter and $1.6 billion for the first six months of fiscal year 2004, compared to $709 million and $1.4 billion, respectively, in the quarter and six-month periods last year.

Tobacco earnings were higher in both the quarter and the six months. U.S. operations reflected the benefit of a one-time shift in the allocation of fixed factory overhead associated with the change in the Company’s fiscal year end. Universal recognizes its fixed factory overhead expense in the United States in the quarters in which the tobacco is processed. Since processing does not normally occur during the period between April 1 and June 30, the projected overhead expense for that period has historically been allocated to the preceding three quarters of each fiscal year, based on volumes processed. Because of the change in fiscal year end to March 31, the factory overhead expense for the period from April 1 through June 30, 2004, will be reported in fiscal year 2005 results, and will be allocated to the subsequent quarters of that fiscal year. As a result, operating income for each quarter of the nine-month transitional year ending March 31, 2004, reflects favorable comparisons to the prior fiscal year. Had fiscal year 2004 included the estimated fixed factory overhead expense for April 1 though June 30, 2004, tobacco segment operating income would have been $6 million lower for the second quarter and $8 million lower for the six months. For the nine-month transitional year, management estimates that the impact on operating income would be a reduction of approximately $11 million to $12 million.

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U.S. operations also benefited from significant operating efficiencies and yield improvements realized from the tobacco processing operations at the new Nash County facility and the refurbished Danville plant. Plant throughput was also higher due to significant volumes processed for the Flue-Cured Tobacco Cooperative Stabilization Corporation in the second quarter.

South American volumes, which include shipments from both Brazil and Argentina, were higher in both periods. Volumes in Zimbabwe continue to decline as tobacco production shrinks in that country. As management has noted before, flue-cured marketings in the current fiscal year were only about 80 million kilos, and the upcoming crop is expected to decline further. These shortfalls have led customers to seek sources of supply in other African countries and in Brazil, where the Company has significant operations. Shipments from Malawi were also lower in both periods due to a smaller burley crop and reduced sales of carryover tobacco.

Including the estimated effect of the U.S. fixed factory overhead allocation for the transitional year, adjusted tobacco segment operating earnings were up $12.5 million for the quarter and $8.2 million for the six months.

	THREE MONTHS					SIX MONTHS
Periods ended December 31,	2003			2002		2003			2002
(in thousands of dollars)
Tobacco segment operating income, as reported	$	70,463		$	51,955	$	128,692		$	112,485
Adjustments for U.S. overhead allocation		(6,000	)		—		(8,000	)		—
Adjusted tobacco segment operating income	$	64,463		$	51,955	$	120,692		$	112,485

Lumber and building product revenues and earnings for the quarter and the six-month period continued to benefit from the strong euro and the inclusion of JéWé. The euro has strengthened by 16% for the quarter and by 18% for the six months compared to last year. Lumber and building product revenues were up $54 million in the quarter and $107 million for the six months. Excluding JéWé, euro revenues and results were down in both periods, reflecting continued weakness in sales volumes due to the lingering recession in the Netherlands and other European markets.

Agri-products results were up slightly in the quarter but down for the six months. Improvements were recorded in confectionery sunflower seeds and rubber, but nuts and dried fruit continue to lag last year’s record results. Agri-product revenues were up $22 million for the quarter and $43 million for the six months, primarily due to small acquisitions made last year.

Mr. King said, “The earnings outlook for the full nine-month fiscal year has improved. Growth in international cigarette sales appears to be generating increased leaf demand, at least outside the United States. Demand for U.S. leaf continues to fall reflecting non-competitive prices. The absence of any meaningful program reform while growers wait for a quota buyout means that the pricing of U.S. tobacco will not improve significantly in the near term. However, U.S. operations will benefit from new processing business from the Kentucky burley pool, which has moved some of its processing business out of Kentucky for the first time. The euro remains strong against the U.S. dollar, and the effects of the euro’s strength coupled with the results from JéWé, are expected to outweigh the impact of the sluggish European economy on our lumber and building products distribution operations. Our agri-products segment continues to do well despite difficult market conditions for a number of the products that we handle.

Universal Corporation

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“We are pleased with the earnings recorded through the first six months, and we now believe that net income for the nine months ending March 31, 2004, will be in the range of $95 to $105 million compared to our previous estimate of $85 to $95 million. Earnings for the first nine months of fiscal year 2003 were $79 million.”

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 the Company’s 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. Earnings of the lumber and building products segment are also affected by changes in exchange rates between the U.S. dollar and the euro. Actual results, therefore, could vary from those expected. For more details on important factors that could cause actual results to differ from expectations, see Item 1, Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7, and Notes to the Consolidated Financial Statements in Item 8 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2003, as filed with the Securities and Exchange Commission.

Universal Corporation

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UNIVERSAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

Three and Six Months Ended December 31, 2003 and 2002

(In thousands of dollars, except share and per share data)

	THREE MONTHS						SIX MONTHS
	2003			2002			2003			2002
	(Unaudited)						(Unaudited)
Sales and other operating revenues	$	801,011		$	708,578		$	1,587,612		$	1,365,854
Costs and expenses
Cost of goods sold		640,893			576,644			1,287,901			1,102,215
Selling, general and administrative expenses		83,621			74,942			163,560			142,141
Restructuring costs		—			—			—			13,498
Operating income		76,497			56,992			136,151			108,000
Equity in pretax earnings (loss) of unconsolidated affiliates		(1,880	)		(1,448	)		1,896			94
Interest expense		12,198			11,798			23,274			22,282
Income before income taxes and other items		62,419			43,746			114,773			85,812
Income taxes		22,471			15,528			41,318			30,463
Minority interests		2,581			1,475			1,660			129
Net income	$	37,367		$	26,743		$	71,795		$	55,220
Earnings per common share – basic	$	1.49		$	1.04		$	2.88		$	2.14
Earnings per common share – diluted	$	1.48		$	1.04		$	2.85		$	2.13
Retained earnings – beginning of period							$	592,673		$	569,059
Net income								71,795			55,220
Cash dividends declared ($.75 – 2003, $.70 – 2002)								(18,781	)		(17,891	)
Purchase of common stock, net of shares issued								(3,268	)		(31,591	)
Retained earnings – end of period							$	642,419		$	574,797

See accompanying notes.

Universal Corporation

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UNIVERSAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of dollars)

	December 31, 2003		December 31, 2002		June 30, 2003
	(Unaudited)		(Unaudited)
ASSETS
Current
Cash and cash equivalents	$	135,793	$	149,477	$	44,659
Accounts receivable		356,835		222,338		370,784
Advances to suppliers		124,870		121,609		115,928
Accounts receivable – unconsolidated affiliates		6,681		4,243		7,595
Inventories – at lower of cost or market:
Tobacco		565,635		548,391		529,736
Lumber and building products		134,190		84,913		140,647
Agri-products		82,276		66,574		82,527
Other		28,969		28,973		30,377
Prepaid income taxes		4,031		18,109		12,375
Deferred income taxes		6,249		6,637		6,168
Other current assets		23,613		20,727		34,201
Total current assets		1,469,142		1,271,991		1,374,997
Property, plant and equipment – at cost
Land		59,105		34,631		57,310
Buildings		348,153		291,648		338,115
Machinery and equipment		689,277		575,700		639,157
		1,096,535		901,979		1,034,582
Less accumulated depreciation		552,073		466,360		521,201
		544,462		435,619		513,381
Other assets
Goodwill and other intangibles		132,853		125,629		132,903
Investments in unconsolidated affiliates		92,510		82,722		90,119
Deferred income taxes		51,900		47,085		45,466
Other noncurrent assets		89,085		89,835		86,208
		366,348		345,271		354,696
	$	2,379,952	$	2,052,881	$	2,243,074

See accompanying notes.

Universal Corporation

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UNIVERSAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of dollars)

	December 31, 2003			December 31, 2002			June 30, 2003
	(Unaudited)			(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Notes payable and overdrafts	$	172,393		$	124,656		$	265,742
Accounts payable		329,872			307,430			361,058
Accounts payable – unconsolidated affiliates		4,783			4,159			2,073
Customer advances and deposits		111,973			109,180			42,093
Accrued compensation		30,691			17,730			31,959
Income taxes payable		15,726			25,673			20,969
Current portion of long-term obligations		64,418			183,365			100,387
Total current liabilities		729,856			772,193			824,281
Long-term obligations		775,358			514,527			614,994
Postretirement benefits other than pensions		40,989			39,335			40,305
Other long-term liabilities		98,059			74,432			96,522
Deferred income taxes		18,691			25,387			12,348
Minority interests		33,356			23,927			34,346
Shareholders’ equity
Preferred stock, no par value, authorized 5,000,000 shares, none issued or outstanding
Common stock, no par value, authorized 100,000,000 shares, 24,983,745 issued and outstanding shares (25,278,217 at December 31, 2002, and 24,920,083 at June 30, 2003)		94,912			87,920			90,665
Retained earnings		642,419			574,797			592,673
Accumulated other comprehensive loss		(53,688	)		(59,637	)		(63,060	)
Total shareholders’ equity		683,643			603,080			620,278
	$	2,379,952		$	2,052,881		$	2,243,074

See accompanying notes.

Universal Corporation

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UNIVERSAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended December 31, 2003 and 2002

(In thousands of dollars)

	SIX MONTHS
	2003			2002
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	71,795		$	55,220
Depreciation		26,000			23,000
Amortization		2,000			2,000
Other adjustments to reconcile net income to net cash provided by operating activities		(4,000	)		14,000
Changes in operating assets and liabilities		11,339			(27,746	)
Net cash provided by operating activities		107,134			66,474
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(38,000	)		(61,000	)
Net cash used in investing activities		(38,000	)		(61,000	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of short-term debt, net		(93,000	)		(2,000	)
Issuance of long-term debt		203,000			138,000
Repayment of long-term debt		(69,500	)		—
Issuance of common stock		4,000			—
Purchases of common stock		(3,500	)		(32,000	)
Dividends paid		(19,000	)		(18,000	)
Net cash provided by financing activities		22,000			86,000
Net increase in cash and cash equivalents		91,134			91,474
Cash and cash equivalents at beginning of year		44,659			58,003
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	135,793		$	149,477

See accompanying notes.

Universal Corporation

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NOTES

1). Universal Corporation, with its subsidiaries (the “Company” or “Universal”), has operations in tobacco, lumber and building products, and agri-products. Because of the seasonal nature of these businesses, 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.

2). Universal has decided to change its fiscal year-end to March 31 from June 30 effective for the current fiscal year. This change will bring all consolidated subsidiaries to the same reporting date and will better match the fiscal reporting period with the crop and operating cycles of the Company’s largest operations. The Company plans to file a Transitional Report on Form 10-K for the nine months ending March 31, 2004.

Universal recognizes its fixed factory overhead expense in the United States in the quarters in which the tobacco is processed. Since processing does not normally occur during the period between April 1 and June 30, the projected overhead expense for that period has historically been allocated to the preceding three quarters of each fiscal year, based on volumes processed. Because of the change in fiscal year end to March 31, the factory overhead expense for the period April 1 through June 30, 2004, will be reported in fiscal year 2005 results, and will be allocated to the subsequent quarters of that fiscal year. As a result, operating income for each quarter of the nine-month transitional year ending March 31, 2004, reflects favorable comparisons to the prior fiscal year. Had fiscal year 2004 included the estimated fixed factory overhead expense for April 1 through June 30, 2004, tobacco segment operating income would have been $6 million lower for the second quarter and $8 million lower for the six months. For the nine-month transitional year, management estimates that the impact on operating income would be a reduction of approximately $11 million to $12 million.

3). In January 2004, the Financial Accounting Standards Board (FASB) issued Staff Position No. 106-1 (FSP No. 106-1), “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003.” FSP No. 106-1 provides accounting and disclosure guidance related to the effects on a company’s postretirement benefit costs and obligations of recent legislation that adds a prescription drug benefit to the federal Medicare program, and provides a federal subsidy to companies that sponsor retiree medical programs with drug benefits that are actuarially equivalent to those now available under Medicare. Because the FASB has not yet issued authoritative guidance on accounting for the federal subsidy, FSP No. 106-1 allows companies to elect deferral of accounting recognition until such guidance is issued (or earlier if an amendment, settlement, or curtailment of a company’s plan occurs). Universal has chosen to defer recognition and, accordingly, the costs and obligations for retiree benefits currently included in its financial statements do not reflect the effects of the federal subsidy. The Company may be required to change previously reported information when authoritative accounting guidance is issued. At the present time, the Company does not expect that amendments to its postretirement benefits plan will be required to qualify for the subsidy.

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4). Guarantees of bank loans to growers for crop financing and construction of curing barns and other tobacco producing assets are industry practice in Brazil. At December 31, 2003, total exposure under subsidiaries’ guarantees issued for banking facilities of Brazilian farmers was approximately $139 million. About 63% of these guarantees expire within one year, and the remainder expire within 5 years. The Company withholds payments due to the farmer on delivery of tobacco and forwards those payments to the third-party bank. Failure of farmers to deliver sufficient quantities of tobacco to the Company to cover their obligations to third-party banks could result in a liability for the Company; however, in that case, the Company would have recourse against the farmers. In addition, the Company has contingent liabilities of approximately $9 million that consist primarily of bid and performance bonds. The Company considers the possibility of a material loss on any of the guarantees and other contingencies to be remote, and the accrual recorded for the value of the guarantees was not material at December 31, 2003.

In recent years, economic and political changes in Zimbabwe have led to a significant decline in tobacco production in that country. Universal has been able to offset the effect of this decline on its business with increased production in other countries and growing regions. If the political situation in Zimbabwe were to further deteriorate significantly, the Company’s ability to recover its assets there could be impaired. The Company’s equity in its net assets of subsidiaries in Zimbabwe was approximately $61 million at December 31, 2003. Net monetary assets denominated in Zimbabwe dollars represent a portion of this amount and include local currency deposits that have grown due to the country’s financial policies. The U.S. dollar value of these net monetary assets is exposed to changes in the value of the Zimbabwe dollar, and approximates $8.5 million when remeasured using the export exchange rate of approximately ZWD 800 to USD 1. Recently, the Zimbabwe dollar has traded in government-sponsored auctions in a range between ZWD 3,613 and ZWD 4,197 to USD 1. The auction rate will be used to remeasure the Company’s net monetary assets denominated in Zimbabwe dollars in the financial statements reported for the period ending March 31, 2004. If the recent auction exchange rate was applied to those assets at December 31, 2003, the Company’s equity in its net assets of subsidiaries in Zimbabwe would fall to approximately $56 million. The Company’s ability to reduce or limit further growth in the net monetary assets exposed to the value of the Zimbabwe dollar is dependent in part on the ability of its subsidiaries to utilize local currency deposits to pay costs and expenses.

5). The Competition Directorate-General of the European Commission (“DG Comp”) is investigating the buying practices of Spanish tobacco processors with the stated aim of determining to what extent the tobacco processing companies have jointly agreed on raw tobacco qualities and prices offered to Spanish tobacco growers. After conducting an investigation, the Company believes that Spanish tobacco processors, including the Company’s Spanish subsidiary, Tabacos Espanoles, S.A. (“TAES”), have jointly agreed to the terms of sale of green tobacco and quantities to be purchased from associations of farmers and have jointly negotiated with those associations. TAES is cooperating fully with the DG Comp in its investigation and believes that there are unusual, mitigating circumstances peculiar to the highly structured market for green tobacco in Spain. Current guidelines allow the DG Comp to assess fines in this case in amounts that would be material to the Company’s earnings. Although the Company expects to be assessed a fine, management is unable to estimate an amount at this time, and no liability has been recorded in the financial statements.

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6). During fiscal year 2003, the Company recorded about $33.0 million in restructuring charges associated with consolidation of U.S. and African tobacco operations. Approximately $28 million of the charges were to record the severance cost associated with 941 hourly employees and 366 salaried employees. The severance costs included $13.5 million recorded in the first quarter of fiscal year 2003 related to the U.S. operations. During the six months ended December 31, 2003, the Company paid approximately $2.7 million to 81 employees in connection with the restructuring plan.

Changes in severance liabilities are shown below:

	Six months ended December 31, 2003			Six months ended December 31, 2002			Fiscal year ended June 30, 2003
Severance Liabilities (in thousands of dollars)
Beginning balance	$	13,399		$	2,079		$	2,079
Restructuring charges		—			13,498			27,981
Payments		(2,719	)		(1,819	)		(16,661	)
Ending balance	$	10,680		$	13,758		$	13,399

7). As permitted under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” the Company applies the provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” to stock options granted to employees. Under Statement No 123, as amended by Statement No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” the Company discloses pro forma net income and basic and diluted earnings per share as if a fair value-based method had been applied to all awards.

	THREE MONTHS						SIX MONTHS
	2003			2002			2003			2002
Periods ended December 31,
Net income (in thousands of dollars)	$	37,367		$	26,743		$	71,795		$	55,220
Stock-based employee compensation cost, net of tax effect, under fair value accounting		(1,163	)		(962	)		(2,141	)		(1,924	)
Pro forma net income under fair value method	$	36,204		$	25,781		$	69,654		$	53,296
Earnings per share – basic	$	1.49		$	1.04		$	2.88		$	2.14
Per share stock-based employee compensation cost, net of tax effect, under fair value accounting		(0.05	)		(0.04	)		(0.09	)		(0.07	)
Pro forma earnings per share – basic	$	1.44		$	1.00		$	2.79		$	2.07
Earnings per share – diluted	$	1.48		$	1.04		$	2.85		$	2.13
Per share stock-based employee compensation cost, net of tax effect, under fair value accounting		(0.05	)		(0.04	)		(0.09	)		(0.07	)
Pro forma earnings per share – diluted	$	1.43		$	1.00		$	2.76		$	2.06

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8). The following table sets forth the computation of basic and diluted earnings per share.

	THREE MONTHS				SIX MONTHS
Periods ended December 31,	2003		2002		2003		2002
Net income (in thousands of dollars)	$	37,367	$	26,743	$	71,795	$	55,220
Denominator for basic earnings per share:
Weighted average shares		24,998,868		25,618,912		24,970,504		25,840,475
Effect of dilutive securities:
Employee stock options		166,754		40,569		180,228		42,452
Denominator for diluted earnings per share		25,165,622		25,659,481		25,150,732		25,882,927
Earnings per share – basic	$	1.49	$	1.04	$	2.88	$	2.14
Earnings per share – diluted	$	1.48	$	1.04	$	2.85	$	2.13

9). Comprehensive Income:

	THREE MONTHS				SIX MONTHS
Periods ended December 31,	2003		2002		2003		2002
(in thousands of dollars)
Net income	$	37,367	$	26,743	$	71,795	$	55,220
Foreign currency translation adjustment		7,525		1,275		9,372		11,584
Comprehensive income	$	44,892	$	28,018	$	81,167	$	66,804

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10). Segments are based on product categories. The Company evaluates performance based on segment operating income and equity in pretax earnings of unconsolidated affiliates.

	THREE MONTHS						SIX MONTHS
Periods ended December 31,	2003			2002			2003		2002
(in thousands of dollars)
SALES AND OTHER OPERATING REVENUES
Tobacco	$	473,026		$	455,979		$	929,715	$	857,757
Lumber and building products distribution		193,937			140,430			390,268		283,334
Agri-products		134,048			112,169			267,629		224,763
Consolidated total	$	801,011		$	708,578		$	1,587,612	$	1,365,854
OPERATING INCOME
Tobacco	$	70,463		$	51,955		$	128,692	$	112,485
Lumber and building products distribution		7,824			6,882			15,787		13,852
Agri-products		2,675			2,557			5,518		6,346
Total segment operating income		80,962			61,394			149,997		132,683
Less:
Corporate expenses		6,345			5,850			11,950		11,091
Restructuring costs		—			—			—		13,498
Equity in pretax earnings of unconsolidated affiliates		(1,880	)		(1,448	)		1,896		94
Consolidated total	$	76,497		$	56,992		$	136,151	$	108,000

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