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Brown-Forman Corporation (NYSE:BF.B)

F3Q10 (Qtr End 01/31/10) Earnings Call

March 10, 2010 10:00 am ET

Executives

Ben Marmor – Assistant VP and Director, IR

Paul Varga – President and CEO

Don Berg – EVP and CFO

Jane Morreau – SVP, Finance

Analysts

Lauren Torres – HSBC

Tim Ramey – D.A. Davidson & Company

Bill Leach – TIAA-CREF

Lindsay Drucker Mann – Goldman Sachs

Kaumil Gajrawala – UBS

Ann Gurkin – Davenport

Neil Norwich [ph] – J.P. Morgan

Kevin Dreyer – Gabelli & Company

Rob Forker – Loomis Sayles

Operator

Good morning, my name is Bernel and I will be your conference operator today. At this time, I would like to welcome everyone to the third quarter fiscal 2010 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

Thank you. Mr. Marmor, you may begin your conference.

Ben Marmor

Thank you. Good morning, everyone and thank you for joining us for Brown-Forman's fiscal 2010 third quarter earnings call. This is Ben Marmor, the Director of Investor Relations at Brown-Forman. Joining me today are Paul Varga, our President and Chief Executive Officer, Don Berg, Executive Vice President and Chief Financial Officer and Jane Morreau, Senior Vice President, Finance. Don will begin our call this morning with a few remarks about the quarter and our guidance. Paul will provide additional commentary on our performance.

As always, this morning's conference call contains forward-looking statements based on our current expectations. Numerous risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements. Many of the factors that will determine future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward-looking statements and the company undertakes no obligation to update any of these statements whether due to new information, future events or otherwise. This morning, we issued a press release containing our results for the fiscal 2010 third quarter. This release can be found on our website under the section titled Investor Relations. We have listed in the press release a number of risk factors that you could consider in conjunction with our forward-looking statements. Other significant risk factors are described in our Form 10-K, Form 8-K and Form 10-Q reports filed with the Securities and Exchange Commission. During this call, we will also discuss certain non-GAAP financial measures. These measures and the reason management believes they provide useful information to investors regarding the company's financial conditions and results of operations are contained in the press release.

And with, that I will turn the call over to Don.

Don Berg

Good morning, everyone. Back in December, during our second quarter earnings call, we said that we believed our underlying net sales had performed within the top tier of the industry. We also said at the time that we expect to continue our top tier performance. Today, we announced in our third quarter we posted 2% underlying net sales growth, suggesting that Brown-Forman has continued to achieve this goal.

Let's take a look at how we achieve this growth in the quarter. Looking first at volumes, starting with the U.S., Jack Daniel's Tennessee Whiskey third quarter depletions grew 1% and depletions grew in the double digits for both Gentleman Jack and Jack Daniel’s Single Barrel. For the rest of our brands in the United States, depletions advanced in the low single digits. Depletion growth was experienced in the quarter for several brands including Korbel, Bonterra, Canadian Mist, el Jimador, Little Black Dress, Woodford Reserve, Sonoma-Cutrer, Pepe Lopez, Finlandia Vodka, Herradura, Old Forester and Chambord. These gains more than offset the parts of our portfolio that declined during this time.

While we continue to be cautious given the level of trading down that we have seen throughout the U.S., we remain particularly encouraged about the future of our premium and super-premium brands. Looking outside the U.S., overall, we continue to benefit from our geographic diversification. For Jack Daniel’s, the brand family showed double digit depletion growth for the quarter. The trademark's growth was led by a combination of both Jack and Cola and Jack Daniel’s Tennessee Whiskey in Australia, Germany and Mexico as well as strong performances by Jack Daniel’s Tennessee Whiskey in France and Poland.

Additionally, Gentleman Jack and Jack Daniel’s Single Barrel grew international depletions by over 50% and over 20% respectively albeit off relatively small bases. While Jack Daniel's Tennessee Whiskey did experienced depletion declines in Italy and the U.K., the brands international depletions overall grew in the high single digits.

Finally, for the rest of our portfolio outside the United States, depletions declined 3% during the quarter. Most of this decrease was attributed to lower volumes in agency brands, particularly in Poland. The balance of the decline was mostly due to lower depletions of Southern Comfort, Finlandia and New Mix, partially offset by growth in el Jimador, Herradura, Antiguo, Pepe Lopez, Early Times, Chambord, Sonoma-Cutrer and Woodford Reserve.

Moving from volume trends to pricing. The pricing environment has been very competitive throughout the year, particularly during the holiday season. If you refer to Schedule B in our press release this morning, you will see that for several of our brands on a global year-to-date basis, our constant currency net sales performed better than depletions. Overall, we have been very pleased with our relative performance in this very competitive operating environment.

Looking at the U.S., Nielson data for food, drug, liquor and mass all combined which covers approximately 29% of U.S. spirits consumption shows that price mix was negative for total distilled spirits for the three-month period through January 9 which encompassed the holiday season.

During this period, the Nielson data showed that Jack Daniel’s pricing was essentially flat. I know a number of folks tend to focus on data that that only tracks food and drug channels which only covers about 14% of spirit consumption. These channels tend to be more competitive in pricing and typically have painted a much different picture than the full dataset. For example, while Jack Daniel’s price mix was nearly flat in the full dataset, its price mix in the food and drug only channels was down 1%, approximately the same as total distilled spirits.

Importantly, this data supports our belief that we continue to outperform many brands in finding the right balance in pricing and discounting in this environment. Whether you look at the food and drug channel only or the larger dataset, Jack Daniel’s was discounted less than many major brands in its competitive set including Crown Royal, Captain Morgan, Absolut, Jose Cuervo and Grey Goose. Although, overall value was slightly down for Jack Daniel’s for the period, it outperformed each of the competitive brands I just mentioned on overall value change, suggesting that their more aggressive pricing was not offset by additional volume.

Looking at a longer 12-month timeframe, shows relatively similar results with Jack Daniel’s price mix up about 1% and very competitive among the largest brands.

Let me speak for a few minutes about the level of brand support. When you look at all of the support we are placing behind our brands, we believe we are providing meaningful and appropriate investment for this environment. We believe we have done a sound job using the various tools at our disposal and have been able to adapt quickly to changing market conditions. Similarly this support came through media and some through target price promotions, as I mentioned before.

Beyond traditional media support and pricing, we also have reallocated resources from areas such as on-premise vending and sponsorships toward off-premise promotional activities, package enhancements and line extensions, especially in the ready-to-drink and ready-to-pour arenas. And we believe our innovative approaches of supporting our brands is one of the largest contributing factors to our top tier performance in underlying net sales growth. When you consider all of this brand support and not just what is reported as advertising expenses under U.S. GAAP, for the year to date, we estimate that we have increased spending about 6%.

You may also remember from our last earnings call that we were expecting to cycle against a difficult comparable period for SG&A expenses in the third quarter. Recall last year's third quarter was when the business began to feel the full effect of the economic downturn. At the time, we tightened discretionary spending significantly and lowered performance-related incentive compensation expenses. So while we have continued to closely manage our SG&A expenses, they were up in the third quarter compared to last year but this percentage increase is not our new run rate. Again, it is driven in large part by difficult comps.

A few words about our trademarks. In accordance with U.S. GAAP, we reviewed the value of our trademarks at least once per year. In the third quarter, we evaluated the trademarks purchased with the cost editor acquisition along with Chambord and Don Eduardo.

As a result of this review, as mentioned in our earnings release, we recognized a non-cash charge of approximately $12 million or nearly $0.07 per share on Don Eduardo, a small high-priced tequila brand which has been affected by the economic downturn in the United States.

Finally, as noted in the earnings release, our balance sheet remains strong, our cash flow is robust. And as of January 31, our trailing 12-month return on invested capital was what we believe to be industry-leading at nearly 17%.

Before moving to our outlook, let me speak for a minute on our route to consumer network outside the United States since a number of contracts expire at the end of April. Our strategy has long been to review each market individually and determine what we believe to be the most appropriate model for our long-term growth. From having nearly all agency arrangements 10 years ago, today we have a blend of a number of different models and have more direct responsibility for key consumer-driven commercial and brand-building activities.

Last month, we announced that we would be setting up our own distribution business in Germany. We will be making that transition during our fiscal 2011 year and in the meantime, we will continue to partner with Bacardi in that market. We are also continuing discussions with various partners in several Western European markets including France, Spain, Italy and Greece. In addition to Russia, a host of smaller European markets, Brazil and Canada.

We plan to communicate more information about these markets, once agreements are completed. Moving on to our outlook and how we are thinking about the fourth quarter, while our year to date earnings per share is up 8%, we are forecasting our full-year performance EPS to increase between 4 and 7%. That represents a narrowing of fiscal 2010 earnings guidance to a range of $2.98 to $3.08 per share. For the full year, our guidance anticipates underlying operating income will grow in the mid-single digits.

We believe this represents continued performance in the top tier of our industry. And reflects our confidence in our ability to operate effectively in what remains a competitive and uncertain environment. It also projects that underlying operating income will decline again year-over-year in the fourth quarter, as we continue to cycle against a significant operating expense reductions, started during the latter part of fiscal 2009. And as we shift spending to the fourth quarter.

More specifically, when our guidance is compared to the range provided in our second quarter call, of $2.95 to $3.15, our current guidance includes anticipated fourth quarter net sales growth, in line with our year to date trends. Also, additional underlying investments in both A&P and SG&A. And the $0.07 non-cash Don Eduardo trademark impairment.

We are anticipating foreign exchange to essentially be neutral for the year. And therefore we expect to give back the approximate $0.05 benefit from foreign exchange in our third quarter, given our current hedge program and recent exchange rates. Our updated guidance also includes projected costs of up to $0.03 per share, related to potential route to consumer changes. In terms of our tax rate, we now believe our full fiscal year effective rate will be in the range of 33 to 33.5%.

Before turning to Paul, I would like to step back for a moment and make some concluding comments about Brown-Forman's overall performance. While we operate and report on a fiscal year basis, the world generally operates on a calendar year. And it is not unusual for a host of industry publications to report on various annual statistics. Impact in its February issue reported its annual listing of the world's top 100 premium spirit brands. Jack Daniel's is the fifth largest brand on this list. The top four brands, ahead of Jack, were Smirnoff, Bacardi, Johnnie Walker and Absolut.

Of these top five, Jack was the only brand that grew volume for the 2009 calendar year. Interestingly, the depletions reported for the top four brands included performances for their entire trademark family, excluding low proof extensions. While Jack's numbers only include Tennessee Whiskey, had Gentleman Jack and Single Barrel been included, the performance margin would have been even wider. To put Jack's growth in a clearer perspective, Impact reports that the top four brands collectively lost more than 4 million cases in 2009, while Jack grew around 100,000 cases.

We believe these results demonstrate the resiliency of Jack Daniel's and the continuing potential we believe this brand has. In terms of potential, we believe that Jack Daniel's has only scratched the surface of its global opportunity. There are only a handful of brands that either are or have the potential to be truly global, with a meaningful presence in all-important markets. Johnnie Walker, Chivas Regal and Hennessy would arguably be examples of this. While these brands have been on the global stage for quite some time, Jack Daniel's is relatively early in its life cycle, just about everywhere.

In terms of Jack's strength and resilience, we believe that part of it comes from Jack Daniel's unique and differentiated taste. If you like its charcoal mellowed flavor, it is the only brand that really delivers it outside the United States. We also believe that part of its strength comes from the balance between premium pricing and accessibility. This was well articulated recently in an article in Marketing Week, a U.K. publication, which reported on a global study down by ISIS, a marketing agency.

The article focused on the U.K. part of the study and noted that 28% of the U.K. respondents say they are prepared to pay more for Jack Daniel's whiskey, compared with 11% for Johnnie Walker. An ISIS representative is quoted in this article as saying, arguably, Johnnie Walker is a more premium product, yet it significantly underperforms here from a consumer perspective. The data in the study supports the hypothesis that in the U.K, Jack Daniel's has done a much better job of making its premiumness more accessible to people. We can't say it better than that.

We also believe that part of Jack Daniel's success is due to its mix ability. And that it is well placed, should that trend continue across the world. And perhaps most importantly, this iconic brand with its strong package and its pervasiveness in pop culture has proven to be very appealing for those aspiring to western lifestyles. A trend that we expect will continue particularly in the emerging markets. For all of these reasons, we continue to be optimistic about both Jack's near-term and long-term potential.

Before I move on, let me note one other data point from Impact's 2009 list. I would also like to highlight el Jimador's performance. The brand moved up the list from number 100 to number 90. El Jimador was the fastest-growing tequila and the 13th fastest growing brand overall. Finally, let me make some brief comments about Brown-Forman's performance overall.

First, we believe our performance speaks for itself. We have consistently proven our ability to compete effectively both near and long-term. We also believe we are well-positioned within the industry, particularly where there is growth potential. The categories we focused on are some of most attractive. American whiskey continues to be particularly attractive and has performed well in relation to other categories throughout the economic downturn. Also, our ready-to-drink offerings have allowed the consumer to enjoy their favorite drinks at home in a convenient manner, while also providing more awareness of the apparent brands.

Additionally, tequila continues to be a nice growth category. And our tequila offerings have performed well. Particularly el Jimador, with its very attractive premium price position as a 100% agave tequila. In addition to being able to focus on some of the most attractive category, we believe our size allows us to adapt quickly to changes in consumer behavior, such as the dramatic switch to the off-premise and we have been able to step up our innovation, particularly as it relates to line extensions and package changes. We have discussed our successes in these areas over the last year. And we believe we continue to reap the benefits.

We also have plans to continue introducing innovation on our brands in fiscal 2011, including primary package or label changes for eight of our brands, line extensions for southern comfort, Chambord and Early Times, a new whiskey product. And a number of flavor extensions. We believe that our results show that not only does the broad diversification of brands and geography bring resiliency, but also that we are well equipped to meet these challenges, in the same way we have consistently met the challenges of the past. While there is still significant uncertainty in the market today, we continue to have confidence in our belief that we have the wherewithal to continue to perform overall at the top end of the industry.

At this point, let me turn the call over to Paul for some additional insight about our company.

Paul Varga

Thank you, Don and good morning, everyone. I hope that Don's comments help you understand why we are generally pleased with the company's performance, in both the quarter and fiscal year to date.

During our third quarter, all of us turned the page on the first decade of the 21st century. Because of that and because of the need to strike a proper balance between short and long-term results, I wanted to take just a few minutes to recap Brown-Forman's progress over the 10-year period which recently drew to an end. Of course it is hard to discuss that progress without considering the landscape against which it happened.

The last decade began with great difficulty, as we all know, as the burst of the Internet bubble and the events of 9/11 rocked consumer confidence and restrained shareholder return. That period was followed by an incredible period of expansion and strong consumption through the middle of the decade only to see the 10 years finish with a severe global financial crisis and a worldwide recession. It was some kind of rollercoaster ride to say the least.

In addition to the environmental backdrop, observers of the industry tend to place significant emphasis on the chaining ownership of brands or companies and this past decade no doubt set their appetite for big deals. Some of the decade's most noteworthy spirit and wine acquisitions enhanced the size of Diageo, Pernod Ricard, Fortune Brands, Bacardi, Constellation and Fosters.

At the same time, these transactions brought to an end, industry leaders such as Seagram Allied Domecq, Wine & Spirit, Mondavi, Beringer and Southcorp. In this example, five companies that existed at the beginning of the decade became larger and six other competitor companies that existed at the beginning of the decade simply went away. Against this backdrop of significant ownership change, Brown-Forman while not at the forefront of the decade's biggest deals worked steadily to make important portfolio changes to improve the company's long-term growth and return profile.

Over the last 10 years, we sold our low growth, low return Lenox and Hartmann consumer durable businesses. We also divested our popular priced Italian wines and our minority interest in Glenmorangie, with both of these beverage transactions bringing nice gains for our shareholders.

At the same time, we added to our beverage portfolio with the acquisitions of Finlandia, Tuaca, Chambord and the Casa Herradura brand. The shift from consumer durables to long-term growth categories like vodka, liqueurs and tequila has been and we believe will continue to be a favorable shift in the company's portfolio.

In addition to the changing composition of our portfolio, Brown-Forman's route-to-market around the world developed significantly since the turn of the 21 century. Over the last decade, we made a number of investments to improve our end market knowledge and our influence over important brand building activities.

As we entered 2010, we have distribution assets in the company's largest six markets and a growing influence in nearly all of our most important countries around the world. Just 10 years ago, this degree of influence was confined to only one of our top 10 global markets. The acquisitions of Finlandia and Casa Herradura respectively played a major role in advancing our route-to-market in Poland and Mexico, for example. While these acquisitions did not transform Brown-Forman overall, at least not in the very short-term, they did transform Brown-Forman Poland and Brown-Forman Mexico.

Importantly, these acquisitions and distribution platforms have also provided us the opportunity to build our business in those countries beyond the vodka and tequila categories. It's no coincidence that today, Poland and Mexico are two of the fastest growing markets in the world for the Jack Daniel's trademark.

This type of route-to-market development has required a thoughtful investment in people and the tools that support them. Changes in our employee population statistics tell the story very well. 10 years ago, our beverage employee population was 2,730 people with only 8% of those employed being based outside the United States. Today, we have 3,750 employees with 43% being based outside the U.S.

Brown-Forman is indeed a very different company today than it was just 10 years ago. While, it's important to emphasize the changes to our portfolio and route-to-market over the decade. A large part of what drove Brown-Forman's business most significantly over the decade was the brand building that our people carried out on behalf of brands that we had when the decade began. And I believe this is a testament to our ability to organically build our brands and business over time.

Of course, our Jack Daniel's brand led this organic growth and I'm sure you can tell from Don's comments that we're pleased with the brand's current position in the marketplace and what we believe is a remaining opportunity for growth and expansion.

Over the last 10 years, we believe that Jack Daniel's black label, when measured as an individual brand and compared to other single brand expressions, which excludes everyone's line extensions became the largest spirit brand in the world in terms of sales revenue. While, we're happy with this accomplishment over the decade, what has us even more enthused is the remaining opportunity that we believe still exists for Jack Daniel's black label and the trademark overall in the decade we have just begun.

Now, while Jack Daniel's was the lead story of the decade other strong Brown-Forman brands showed excellent progress over the past 10 years as well. The revitalization of southern comfort and a steady upward price repositioning in its largest market the U.S., helped us more than double the brand sales. And after acquiring Finlandia in the first half of the decade the brand became one of the world's fastest growing premium vodkas led by significant development throughout Eastern Europe.

Over the last decade, Finlandia became the 30 largest premium distilled spirit brand in the world up from 55 just 10 years ago. In super-premium American whiskey, Brown-Forman began the decade with a little more than 150,000 cases of business above the Jack Daniel's price point. Due to the steady and impressive growth of gentleman Jack, Jack Daniel's single barrel and Woodford Reserve, Brown-Forman grew this business to well over 500,000 cases over the decade and we now have a credible foundation from, which to build the super premium whiskey brands further.

Similarly, our company's work in premium and super premium wine saw our Bonterra and Sonoma-Cutrer brands exert great leadership. By standing out in a sea of wine choice, these two brands on a combined basis grew at a 10% Tanger over the last 10 years and are approaching a combined total of 600,000 cases.

And nearer to the end of the decade, our efforts to expand the recently acquired to el Jimador, Herradura and Antigua brands begin to bear fruit and these trademarks will no doubt playing important role for Brown-Forman over the next 10 years. These are just a few of the brand development examples that helped propel our company over the last decade and we cite them to remind both you and ourselves of the importance of building brands consistently well over time to ensure that they have long and healthy lives.

The high quality of this brand development requires a sufficient and consistent investment behind both our people and our brands. Over the decade, our cumulative investment behind A&P and SG&A over the 10 years came to $8.75 billion. And we also invested meaningfully behind both product and packaging initiatives, which are captured in the cost of sales line.

As you well know, brand performance naturally fluctuates quarter-to-quarter and that can make it difficult to understand what is really happening in terms of true brand progress. But brand development, measured over the course of a decade tells a more complete story of bona fide growth and the rewards that are derived from it. For Brown-Forman, these rewards are summarized nicely in our 9% compounded annual growth rate and reported operating income over the decade that just concluded.

The rewards that are sought and reaped from the brand results – from this type of brand development are only one part of the equation. The other part is the risk that any company incurs in order to achieve these lucrative rewards and for this assessment, I will reference our stewardship of capital over the last 10 years.

We started the decade with an A credit rating and we never relinquished it across the 10 year timeframe, even while adding $500 million to our net debt position. Along the way, cash from operations grew compounded at 10.5% per year and nearly tripled. Cumulatively, over the decade Brown-Forman generated over $3.8 billion in cash from operations and when combining these cash flows with the increase in net debt. The company had roughly $4.3 billion available for investment and distribution.

Here is what we did with those funds over the decade. We reinvested just short of $1.9 billion in our business with an incremental $130 million in working capital, $668 million in capital expenditures while also investing around $1.1 billion on acquisitions, net of the divestitures.

Additionally, we returned $2.4 billion to shareholders with over $1.2 billion in dividends around $200 million in the Lenox distribution and approximately $1 billion in share repurchases. With those repurchases occurring at an overall average split adjusted share price of $34.48 per share.

We believe our financial flexibility served us well, particularly near the end of the decade and we take pride in the balance we exhibited in the deployment of our strong cash flows. As we were able to sufficiently reinvest in our business and provide nice liquidity to our shareholders.

Of course, two financial performance metrics which capture how we have deployed our cash, our return on invested capital and total shareholder return. As the decade came to a close, Brown-Forman 17% return on invested capital was at the very top of our industry competitive set and stands as a nice testament to the company's ability to produce strong organic growth. And because of our operating income growth, our industry leading ROIC and the consistency with which we return cash to our investors Brown-Forman will a very strong 11.3% compound annual growth in total shareholder return over the decade. This growth rate compares quite favorably to the S&P 500 compound annual decline of 0.9% in TSR over the last 10 years.

In summary, against a turbulent economic backdrop and an ever-changing landscape of supplier consolidation, we stayed highly focused on our long-term pursuit of being superb brand builders while making important strategic progress on both our portfolio and our route to market. We were flexible at times that called for it and we provided sufficient and consistent investment behind our business without taking on unacceptable levels of capital risk.

As a result of all of this, we were rewarded with excellent long-term results across the decade and these results paired with our ability to return cash to shareholders enabled long-term investors in Brown-Forman to enjoy very strong total shareholder return on both an absolute and relative basis.

In closing, I would like to thank our shareholders for their long-term support and I would like to congratulate and thank all of our employees, past and present, who were responsible for these excellent long-term results. And I thank all of you for taking the time to listen to us this morning and now we will take any questions that you might have.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question is from the line of Lauren Torres with HSBC.

Lauren Torres – HSBC

Good morning, everyone. My first question is just regarding your narrowed EPS range. I just wanted to just make sure here, with this narrowed range of $2.98 to $3.08, you are including the impairment charge. This obviously wasn't factored into your guidance last quarter. So I guess to look at it on an apples-to-apples basis, excluding that charge, you're actually taking us to the high end of your old range or taking us to a range of $3.05 or $3.15. Is that a correct way of looking at it?

Don Berg

Yes. You've got it right.

Paul Varga

Correct.

Lauren Torres – HSBC

Okay. And also, you said that, I guess before you weren't you were factoring in a slight currency benefit, but now neutral currency?

Don Berg

It depends on what you're comparing it to. If you're comparing it to the last second quarter call, currency was just about neutral there as well, maybe slightly up. And so it is going from kind of slightly up to neutral at this point.

Lauren Torres – HSBC

And you said that is because of some hedging and what you're looking forward to in the fourth quarter?

Don Berg

And where the current spot rates are today.

Lauren Torres – HSBC

Okay. Okay. That's helpful. And then just secondly, Paul, once again, you're talking about the weak on-premise channel and trading down and competitive behavior. Just curious, compared to what you spoke on back in December with respect to how trends have been shaping up, curious how things have progressed, if things have gotten tougher on each of those metrics over the last couple of months. Did we see anything stabilizing here? How are you thinking of those trends going forward in this calendar year?

Paul Varga

I think we are going to watch it unfold. It is a hard one to forecast. Every time we thought it had sort of stabilized, we might watch it a couple of months, make it – actually continue to have some of this shift from off to on. I think in a very broad sense, thinking about it globally, my view is that we're still in about the same circumstance where we haven't seen a lot of increased traffic back in the global on premise environment. So a lot of the comments that Don made related to where we're placing our emphasis and investment and particularly as it relates to packaging as well are geared toward just that increasing consumer presence in the off-premise.

Lauren Torres – HSBC

Great. Thanks.

Paul Varga

Sure.

Operator

Thank you. Our next question is from the line of Tim Ramey with D.A. Davidson & Company.

Tim Ramey – D.A. Davidson & Company

Congratulations on a great quarter. I wonder, when you bought the Herradura acquisitions, my impression was that the focus was more on the Herradura brand and that the star has been the el Jimador brand. Is that true from your internal perspectives? And is that essentially just an adaptation to the trade own that’s going on now?

Don Berg

Yeah. I will start with that. The – to a certain extent, it’s probably, there is some truth to all of that. At the time that we made the Casa Herradura acquisition, it was before the economic downturn. The on-premise was doing particularly well and we saw a lot of this trading up towards super premium brands. And so we certainly, I think at the time had higher hopes of where Herradura would be able to go given the environment that we were in. We had some pretty high expectations for el Jimador.

Although those expectations, the results have been better than what those expectations were at the time. If you remember when we did that acquisition, there were a number of pieces to it that we actually had quite a bit of interest in. Beyond just the brand side, we were really looking forward to having some brands that would be particularly relevant to the growing Hispanic consumer base in the United States and so we were looking for both el Jimador and Herradura to help us with that and we were also looking to have our own distribution platform in Mexico. And within that, Jack Daniels has been doing particularly well.

Even through this downturn within Mexico, the whiskey category has continued to grow at something like 17%, according to Nielson's and Jack has been growing at a far higher rate than that. And then the other thing that was a little bit of a surprise coming out was that through the acquisition, we also acquired quite a large position in the ready-to-drink market in Mexico through a brand they had there called New Mix. And that arena has continued to grow throughout this period, certainly at faster rates than we were expecting at the time that we did the acquisition and it has also now allowed us an opportunity to bring Jack and Cola into the Mexican market that we have introduced this year. And so, if you look specifically at Herradura, yes, it probably hasn't performed quite at the level that we were hoping that it would, but it has been more than offset by a lot of the other areas that came about through that acquisition.

Paul Varga

Tim, one thing I might add too is that any time you do these acquisitions, one of the first things you think about is how can we add value from where these brands stand and any point in time and the one thing that is, I think helping el Jimador, particularly relative to Herradura is that one of the most important changes we made was actually a product change, which we were able to make more rapidly in some of these packaging changes. These packaging changes take quite a bit of time. They're very permanent in terms of the commitments you make, at least for a multi-year commitment. And so I think el Jimador has been a little bit ahead of Herradura in terms of the impact we've been able to have in terms of our sales and marketing efforts. So –

Tim Ramey – D.A. Davidson & Company

The 100% agave? Yeah.

Paul Varga

Yeah. Actually, we made the change from a mixtos product to 100% agave. We can do that relatively quick. Changing the packaging and altering and improving it on any of these brands, particularly ones that already have very strong brand equity like the Herradura brand in Mexico, you're just going to be a little more careful with it, study it, make sure you got it right before you move.

Tim Ramey – D.A. Davidson & Company

And just a quick question on Finlanda. The performance in Eastern Europe, I guess I had in my mind that it was really sort of traded down there, but Don, I think said something about performance of agency brands. Would you elaborate a little bit more on that?

Don Berg

Well, part of it, we have a very nice agency brand there, Maximus, which is a vodka position just below Finlanda in terms of price, a very good-sized brand there. It has done well. And it took some pricing there and I think that has had an impact on it.

Another thing that has influenced through the course of the first nine months in Poland for the Finlanda brand has been some de-stocking. It has actually been we've seen some inventory reduction there. A lot going on in that market. We're a very big brand with Finlanda. New flavors, flavors are an important part of that business there. But I think the two biggest factors on year-to-date performance have been some de-stocking on Finlanda because we look at the consumer takeaway there and Finlanda has held up pretty well compared to the results we see at the depletion level. And then the other part is really this Maximus.

Tim Ramey – D.A. Davidson & Company

Thank you.

Operator

Thank you. Our next question is from the line of Bill Leach with TIAA-CREF.

Bill Leach – TIAA-CREF

Good morning. Could you just clarify the accounting treatment for the impairment charge you took? Is that a tax deductible charge? And where was it recorded, in SG&A or in other charges?

Jane Morreau

That was recorded in other income and expense. And there was a portion of it that was tax deductible as it relates to the U.S. and there was a portion of it that was not tax deductible.

Bill Leach – TIAA-CREF

What was the pre-tax charge?

Jane Morreau

The pre-tax charge was $11.6 million.

Bill Leach – TIAA-CREF

And the after-tax charge is about $10 million?

Jane Morreau

Roughly, yes.

Bill Leach – TIAA-CREF

Okay. And then in terms of your tax rate, looking at your full-year guidance, it would appear that you're guiding to a tax rate of about 30% in the fourth quarter. Is that right?

Jane Morreau

We are projecting our full year to be somewhere between 33 and 33.5%. And so we are right now at what 33.9%? So we're expecting the fourth quarter to come in the 32.5 or 33 range to come up with the 33 to 33.5.

Bill Leach – TIAA-CREF

Okay. Thank you.

Operator

Thank you. Our next question is from the line of Lindsay Drucker Mann with Goldman Sachs.

Lindsay Drucker Mann – Goldman Sachs

Hey, good morning, everyone.

Don Berg

Good morning.

Paul Varga

Good morning.

Lindsay Drucker Mann – Goldman Sachs

I was just hoping you could put a bit more clarity on trends in Jack Daniel’s Tennessee Whiskey in some of your core markets from a depletions perspective.

Paul Varga

Sure. You mean just generally? I mean, I think –

Lindsay Drucker Mann – Goldman Sachs

Just if you could disclose the depletions growth of Jack Daniel’s Tennessee Whiskey. I may have missed it, but in the U.S. and then some of the U.K., some of the bigger markets.

Paul Varga

Well, I think it was referenced in Don's opening remarks. We can repeat that here that for the quarter, the Jack Daniel’s depletions were low single digit growth for the quarter, for third quarter. And I think, I know Don referenced this in his comments that we were higher single digit on an international basis for the quarter. So a really nice recovery there during an important part of the year, of course, during the holiday season. So that’s a one cut of it between sort of the U.S. and international on that. And so overall, that was a very strong quarter for the brand, particularly when contrasted against Q1 and Q2.

Lindsay Drucker Mann – Goldman Sachs

Okay. So were Tennessee Whiskey depletions down in the U.S. then or flattish?

Paul Varga

No. They were up about 1%.

Lindsay Drucker Mann – Goldman Sachs

Okay. Sorry. I guess what I was trying to understand is how the ready-to-drink products that you are getting some real nice growth from are impacting overall volume performance, whether – how much of that is coming from Australia or as you reformulated the alcohol content and lapping the excise tax increase? And what of that is from new introductions in the U.S.?

Paul Varga

I will tell that you just generally, I think we commented on this pretty extensively in Q1, but I will reiterate it, because this trend has continued. The ready-to-drink offering, particularly for Jack Daniel's, has had a major impact on this fiscal year's performance. And it really comes in two forms. One, the economic benefit we derived from the sale of the products themselves. And the Australia example is a wonderful one, where it is growing so nicely at a time when – the thing we take note of is that Jack Daniel's Tennessee Whiskey at the same time in that market is continuing to grow as well, very nicely.

And it really sends you the signal to look closely at what might be going on. Because oftentimes, one would assume that if the ready-to-drink brand was growing, it might be cannibalizing the full strength product. But the reality is that these ready-to-drinks, particularly when they are positioned right and marketed and sold well, that they actually become a very important marketing tool, which does not get reported on any line item in a P&L. They become a tool for brand presence in the marketplace. They are a major contributor to the promotion of mix ability.

And they create for, particularly brands that have been around a long time and particularly those which have a more traditional positioning such as many whiskey brands. It gives it a contemporary edge and boost that sometimes we try to achieve through more traditional marketing. So I think on a multitude of levels, the RTDs have helped us and reminded us of the importance of utilizing them, not just for their contributions to sales and profitability, but also to help with the overall communications and marketing effort on behalf of the full strength brand.

Now, I would not want to you take that and say that's all you have to do in order to market these full-strength brands. It takes a wide array of activities. But we are really pleased with the work that has gone on with these RTDs. And it has gone beyond Australia. Our lessons in Australia over the last several years have had us making good progress in Europe, most notably for the last several years in Germany, but also more recently in the UK. And then just this past year, we have been seeing great results from the introduction of Jack Daniel's ready-to-drinks down in Mexico, where we already have a very strong, not only distribution presence, but very good ready-to-drink business through the New Mix brands.

Lindsay Drucker Mann – Goldman Sachs

Okay. Thanks. And then I was hoping you could shed some light on the solid underlying 3% gross profit, growth figure that you reported. I know that the comp was a little bit easier versus what the other quarters have been, but what else is driving some of the boost, especially considering that it seems like revenue per unit is coming under some pressure.

Jane Morreau

Yes. The benefits that we received in the quarter on costs were reduction efficiencies that became permanent in nature. I would recommend that we look at the year-to-date performance so that relationship between gross profit and sales, as opposed to taking what happened in the quarter and assuming that is going to go throughout the rest of the year. So it is largely production efficiencies, which are real, but it is more of a timing of recognition.

Don Berg

It is also driven in part by a better net sales performance as well. So there is the COGS, the benefit and that, the production variance. But actually, the Q3 net sales performance elevated as well. And so that actually helped, of course, the 3% gross profit that you referenced.

Lindsay Drucker Mann – Goldman Sachs

Okay. And are the economics of your ready-to-drink brands more favorable on a per unit basis than the full strength liquor products?

Paul Varga

They sure are. And we always fret around here about how to report these, because if you don't do it regularly, it can be confusing. Because you have to convert both the – sometimes we do it on an equivalent basis and we will convert the ready-to-drinks to a whiskey equivalent and then of course, you take the same equivalent and multiply it to the sales price or the gross profit per case.

And so because of that translation, you find that these are highly profitable on that basis and it is why we – again, going back to this, they not only are beneficial to us on the income statement, but they become a source of marketing. And I would really direct you, because we too, of course, we're studying this. I think you referenced the revenue per unit. We of course are looking at that real closely, but when it all comes out in the wash, you need to look at underlying net sales performance. And because sometimes those investments at a time when consumers are really struggling with discretionary income are really investments in your consumer franchise so that they can continue to consume your brand.

And you just got it make sure you're not too deep or do anything that will hurt you long-term. We think we're doing that balancing act well. And when we look at the year-to-date underlying net sales growth of Jack Daniel's at 6%, we think that is about as strong a performance as we could expect in this environment.

Don Berg

Hey Lindsey, just to be sure that we're talking in the same language, when you say per unit, Paul is talking about this on a per drink basis and that's how we're thinking about it, on a per unit basis. If you're thinking per unit on a nine liter basis that generally is how we've been reporting the case information on this. But Paul's comments is on a per, when he talks per unit, he is talking on a per drink basis. On a per drink basis, ready-to-drink is more profitable than full strength.

Lindsay Drucker Mann – Goldman Sachs

Okay. Thanks very much.

Operator

Thank you. Our next question is from the line of Kaumil Gajrawala with UBS.

Kaumil Gajrawala – UBS

Hey, guys.

Don Berg

Good morning.

Paul Varga

Good morning.

Kaumil Gajrawala – UBS

As Don, as you talked about Jack Daniel's and the consumer demand for it around the world, it seems like something that would work very well in Asia, yet it is a small part of your business. It doesn't seem to be on the front lines of focus as you think about the next couple of years. Could you give us an update on how you view that market and how you fare there currently?

Don Berg

Sure. Asia, Asia really is an exciting area of the world. And one of the things about Asia related to Jack Daniel's, it is some of our highest priced markets in the world. It is an area that, where consumers really do appreciate and demand premiumness. And so it is an important part of how we think about our future. We have got quite – we've done quite a nice job in Japan over a long period of time. And in fact, I believe now Jack Daniel's is either the largest selling whiskey in Japan or close to the largest selling whiskey in Japan as we just continue to build and evolve that brand over time.

We've got, hopefully, similar aspirations for the rest of Asia, although, we are looking at it from a very long-term perspective. We have been in China for probably around 14, 15 years now. And we were seeing some very nice growth in that market up until a couple of years ago when things got far more competitive. We have tended to focus in Asia against the consumer, the younger consumer who aspires towards the western lifestyle. And using a lot of that iconography of Jack Daniel's to the sense that they are aspirational to western lifestyles.

And so we have tended to focus most of our brand building time and attention more in the western style bars where those consumers go as opposed to the other area of the business that tends to be out in China. A large part of the business which tends to be in the business entertainment environment, where it tends to be a lot more price and discounting sensitive in terms of what brands get into those outlets and where you don't have the opportunity to build the kind of brand loyalty over time that we're looking for.

And so we've tended to concentrate less on the volume part of the business, which that tends to be more the longer-term developing brand loyalty part of the business with people that we're looking to bring into the franchise or looking more for that western aspirational lifestyle. Paul, I don't know if you want to add anything to that.

Paul Varga

I just think the only other thing is that we've made some conscious choices not to – and this is, I would say a little dated in terms of its reference, but putting aside maybe the last half a year or to a year, but the preceding several years, the cost to play in that market for the kind of brand development we would have been hoping for were extraordinarily high.

And so when we had other alternatives which we thought where we could invest behind our Jack Daniel's development or the Finlandia, wherever it happened to be, that we're, for us, we felt more valuable. And it doesn't mean it is not an either, or. It was – at the same time that we've been constantly checking and rechecking our strategy in a place like China, but it also extends out to Korea and some of these other markets where we think there is great long-term opportunity.

And because I think some of our competitors have – one of the influences here is Europe, Western and Eastern Europe, where we've had a lot of remaining growth and we've continued to see a lot of growth. We're spreading our resources. I think around more broadly to seize that growth where a number of our competitors have tended to concentrate it in some of the key brick markets.

And while we're there, we have high ambitions, particularly long-term there. We just haven't been willing so far to put up the kind of investments that are – particularly in China that we felt – we just didn't think they were worthwhile at that time. So we are going to continue to look at it. I suspect we probably have altered in some way our China strategy in those 14 years, Don referenced about every three years because the market dynamic changes and we will probably continue to do that. It is going to be a huge, I think, market for Jack Daniel's over the very long-term. It is just that it right now is not offering some of the near-term growth that other markets might be.

Kaumil Gajrawala – UBS

Got it. Thank you.

Don Berg

You're welcome.

Operator

Thank you. Our next question is from the line of Ann Gurkin with Davenport.

Ann Gurkin – Davenport

Good morning.

Paul Varga

Good morning. Hi.

Ann Gurkin – Davenport

Just continuing on the discussion about China, do you think it is now necessary to make an acquisition to further that growth in China? Your competitor recently announced or increased their stake in a Chinese company, so I was just curious.

Don Berg

I will tell you, it is interesting. It is something that we've been looking at for the 14 years that I mentioned. We looked at – we're probably one of the first ones actually, to originally look at to a buys you company there and it just happened to be at a time that you couldn't just buy the buy you company. You got the hospitals and the schools and everything else with it. And the market has changed quite a bit since then. But like anything we talk about in this arena. I mean it's an area that we keep our eye open for and we're constantly looking at and thinking about.

Paul Varga

One thing I will just say, when we compare these markets too is our – in reference to all of the portfolio development where we added vodkas and tequilas and some of these markets as we go around, we look for markets where we can also do more than just Jack Daniel's. And right now, for whatever reason the Chinese market is mostly a cognac and whiskey market. It's at least dominated by those it doesn't mean that there won't be long-term opportunity there for other categories.

There are other markets around the world that are really nice whiskey and vodka or whiskey, vodka and tequila markets or offer nice liqueur markets. And so some of these markets where they fit more naturally for the portfolio we have. We tend to give them a little extra consideration and priority.

So China for us, really is very much a – it would be a whiskey play for us today. We tried some of the other brands in our portfolio with a little bit of success. But they are not the kind of success that you can get in other parts of the world for those brands and those categories. So that is another influencing condition to when we go make these investments and allocate the resources around the world is to how these – how the categories set up for the portfolio we have today.

Ann Gurkin – Davenport

Okay. And then one more question about other international markets and how you weigh setting up your own distribution network versus partnering with somebody. Are you changing how you approach that equation? Or can you help me understand that a little more?

Paul Varga

Maybe Don and I will both comment on that. And I don't think we're changing it. We have clearly, I think I referenced it in my comments evolved to a point where as part of it is our growth, part of it is our portfolio, where with the natural development of the company and the evolution of particularly our investment in our own people over time to put them in marketplaces. Where then we subsequently built knowledge and then would have identified opportunities, whether they're for the base business that was already there or new opportunities for other brands in our portfolio.

In some of these instances, it's natural for when we're in a partnership particularly with another supplier, I mean the foremost of those being – historically, it has been Bacardi. Where our ambitions at that point in time are different than they might have been five or 10 years earlier and of course, these companies that we partner with their portfolios and their ambitions change as well.

So you're constantly in a state of checking in with one another to make sure you can renew and more often than not, we find ways to work through what might be a change in those ambitions or a portfolio conflict or something like that. And but sometimes we also get to a point where we say this is a guide point for us to go try to do it more with a new arrangement or more on our own, as is the case with some of them. I think part of it is just a natural byproduct of our company's growth expansion and evolution versus some new strategic direction that will have us mandating some type of almost single minded philosophy related throughout the market, anything?

Ann Gurkin – Davenport

All right.

Don Berg

Hopefully, I didn't misconstrue where we were going, because it wasn't – I mean it's meant to be an evolutionary path as opposed to all of a sudden, some kind of – we've got some kind of lightning bolt and we're making a major change. And we've been moving in this direction for quite some time and if you look at where we were, I made a reference where we were 10 years ago.

And we had very, very, very few people in any of these markets. And over that time, we continue to put people in the markets, we've gotten to know these markets better. By getting to know the markets better, we've gotten to know what other opportunities there might be from our portfolio beyond just Jack Daniel's. And as we continue to grow our portfolio aspirations, the route-to-consumer piece of that is really critical in terms of how we think about that success.

Ann Gurkin – Davenport

Okay. And I'm sorry. One more question. In terms of trade inventories globally, can you comment on – do you think they will go down further? Are there more reductions to come? Can you talk about trade inventory levels?

Don Berg

Yeah. And just to be clear, in terms of how you're thinking about trade. Because some people can mean distributors and some can mean retailers and some can mean both. We strip out the distributor piece in what we report as being underlying. And so what is left out there is fluctuations that you might see at the retail level. I would say that compared to what we were seeing a year ago, inventory levels are fairly stable.

They continue to fluctuate, throughout the calendar year, just because of seasonal reasons. We have seen probably a little bit of restocking over the course of the year, if you look at it on a nine months basis. But I think at this point in time, we see this being somewhat kind of stable and going back to what the normal patterns have historically been.

Ann Gurkin – Davenport

That's great. Thank you very much.

Don Berg

Thank you.

Operator

Thank you. Our next question is from the line of Neil Norwich [ph] with J.P. Morgan.

Neil Norwich – J.P. Morgan

Hi, thanks. Just a follow-up on FX. As we look at Q4, I think you're cycling a hit to sales, but a benefit from a hedging gain to operating income. So as we look at Q4, can you just comment on what we should expect from a sales and an operating income impact from foreign exchange? Thanks.

Jane Morreau

Let me try to answer the operating income. I think that is the simplest one to look at. Don alluded to this or discussed this in his outlook for the year. We benefited from FX in the quarter about a nickel. So that's about $11 million or so. And we expect that give back – that to be given back in the fourth quarter due to the, not only the spot rates but our hedging position this year compared to the same period last year. Does that help?

Neil Norwich – J.P. Morgan

That helps. And on the sales line though. It looks like it would continue to be a benefit in Q4 though, is that correct?

Jane Morreau

No. Not when you consider – we book our hedges into sales and so I think when you look at hedging activity this year versus hedging activity last year. What that effective rate is, I think that we will not get a benefit at that line.

Neil Norwich – J.P. Morgan

Okay. Thank you.

Operator

Thank you. Our next question is from the line of Kevin Dreyer with Gabelli & Company.

Kevin Dreyer – Gabelli & Company

Hi, good morning. And congratulations on the quarter. My question was actually about China as well, which you pretty much talked at length about. But I guess just one follow-up on it. One of your competitors, I guess Pernod specifically now talks about China being their third biggest market in terms of profit.

And I know in the past, it has been the sponsorship the high requirements of sponsorship of bars that has been maybe a hurdle that you haven't been able to get over in order to grow more in China. And even though it seems like other markets are maybe more of a focus. Clearly a big opportunity and at what point does that change in terms of your willingness to invest in that market?

Paul Varga

Well, I think – we're investing there. It's just that there was a one, two punch that was going on that I was referencing. One was the investment in the accounts. I think the other one was the investment in above the line media that was partnered with it. And the combination of those were an extraordinary investment by both Diageo and Pernod in our view. And then other companies have come in as well and made significant investments.

So last time I saw the numbers, the media part had come down considerably, which we think helps to make it more attractive. We have been investing in media and I don't want to leave the impression we're not investing there. We definitely are investing there. But it just pales in comparison to the, at times what people would referred to as sort of the free for all that was going on 18 to 24 months ago.

I do think that, as I said earlier, I think it's really going to be an important market for us over the long-term. We're going to continue to look at the strategies that are necessary for us to compete smartly there. But we also when we look at the broad landscape against which we can allocate our resources, we just don't want to take some kind of 2,000 or 3,000 index of resource allocation and put it singularly in that market. And I will give you an example, Pernod Ricard, I mean we just all would know this, that they happen to have both strong whiskey and a cognac for that market.

By comparison for us, I will just go a little bit over to Russia where we think whiskey and of course vodka, it's one of the premiere vodka markets in the world, as well as the growing a tequila business would fit very, very well. And so I'm not trying to say Russia is going to be a more important long-term market. It is just for today that it meets I think where our portfolio sits and gives us some ability to produce some near-term results that may be greater than in the near-term in China.

But I think – my belief is that just like we saw in Japan on Jack Daniel's going back 30 years ago. Jack Daniel's will continue through its entire trademark, just not black label to have a wonderful opportunity in China. We've got to figure out the right mix to do it and do it on Brown-Forman's terms, I think which is not ignorant of what is going on in the market. But allows us to compete the way we think we should be competing, which is not to play the game that the larger players are playing.

Kevin Dreyer – Gabelli & Company

Great. Thank you.

Paul Varga

Sure.

Operator

Thank you. Our next question is from the line Rob Forker with Loomis Sayles.

Rob Forker – Loomis Sayles

Hi, thanks for taking the question. Other market participants have suggested that they intended to slowdown promotional activities after the holiday season. And I was just wondering if have you notice that changed in the marketplace?

Paul Varga

I haven't seen enough results yet that have been reflected. I think the way we've been looking at it is in some ways that go beneath in my view. What a lot of the superficial assessments will do when one looks at individual P&L line items. It has taken us a couple of years honestly, to get and this varies by brand and varies by region. The recipes right for how to make our brands perform well in this environment. And one of the things liberated us is to think consistently across the P&L.

So up and down, through packaging by looking at the pricing and but also thinking about value-added, also looking at what needs are there for either awareness or distribution building through A&P and then importantly, probably the most important ingredient is the people themselves.

And so it's always so – there is a great temptation to just default quickly to the media budget. And I got to tell you, the media is an important tool in this industry, but many, many, many, many brands in this industry particularly the most powerful ones are built with recipes that go well beyond just an investment in media.

Media is really important, but the social aspect of this business. And what we sometimes refer to as the brand equity that comes from this business being a social business is really important to understand. And one of the ways you can get at that is in ways beyond just media. And so we think we are working hard to try to understand that for all of our brands. And I think on Jack Daniel's particularly, we have had a nice recipe the last year and we're prone to changing it based on changes in the environment as well.

Rob Forker – Loomis Sayles

Great. And if I could follow-up with one. Duty free trends have been pretty strong recently? Do you think that's a good leading indicator of your industry?

Paul Varga

I hadn't thought about it, Don. And I just…

Don Berg

No. I mean clearly, we tend to look at travel retail as a channel and it's an important channel. And I think that any time that you start to see pickup in the travel area, whether it be on the business side or on the vacation side. It's going to be something that's going to be good for us. So hopefully you're right and it is a leading indicator and we will continue to see that picking up.

Paul Varga

And we've seen some good results there, more recently. We really have too, just like the industry. So it's a good question. We will probably look into that more closely to see how much – because it you could probably study if it led into recoveries, yeah.

Rob Forker – Loomis Sayles

Great. Thanks. Thanks so much.

Paul Varga

Thank you. And I am showing there are no further questions at this time. I would now like to turn the call back over to Mr. Marmor.

Ben Marmor

Thank you, Bernel. We don't have any further closing remarks today. And thank you everyone, for joining us on the call.

Operator

Thank you for your participation in today's conference call. You may now disconnect.

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Source: Brown-Forman Corporation F3Q10 (Qtr End 01/31/10) Earnings Call Transcript
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