Good morning. My name is Vernel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Brown-Forman second quarter fiscal year 2010 conference call. (Operator Instructions). I would now like to turn the call over to Ben Marmor, Director of Investor Relations. Mr. Marmor, you may begin your conference.

Thank you Vernel. Good morning everyone and thank you for joining us for Brown-Forman’s fiscal 2010 second 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. Paul will begin our call this morning with a few remarks about our performance and Don will provide additional commentary on the quarter and our guidance. 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 second quarter. The release can be found in our website under the section titled Investor Relations. We have listed in the press release a number of the risk factors that you should 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 also will discuss certain non-GAAP financial measures. These measures and the reason management believes they provide useful information to the 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 Paul.

Thanks Ben, and good morning and happy holidays to everyone. This morning we were very pleased to report first half results that we believe are excellent given the world’s economic challenges. Our people and our partners deserve great credit for producing a 15% growth and reported and underlying operating income at any time but they merit extra recognition for producing such strong results in the difficult environment of today. Let me say thanks to each and everyone of these professionals. During the 12 months which ended October 31, we all witnessed a staggering and for most of us, unprecedented decline in global economic conditions, since our second quarter’s end marked roughly one year since the onset of the global economic crisis, I thought we should review our 12 months results ending October to see how we performed during such challenging times. Of course, this is an unusual time in the modern era of business and accordingly the manner in which Brown-Forman derived its results was somewhat unusual, as we rely more heavily on operating leverage to produce our strong results. What was not unusual or unprecedented was the Brown Forman’s results, namely our performance on key metrics, such as underlying net sales, underlying operating income, and return on invested capital continued at or near the top of our industry competitive set. For the 12 months ended October 2009, our performance reflected flat underlying sales, a 10% reduction in underlying operating expenses and a 10% growth in underlying operating income. When paired with tight management of both capital spending and working capital. This underlying growth help drive an excellent 17% return on invested capital for the same period. We believe this RSOC stands at the very top of our industry competitive set. Our results were enhanced further by the quality of…

Thanks Paul. Good morning everyone and happy holidays. As Paul mentioned, we believe that Brown-Forman has continued to perform at or near the top of the industry for both the last six and twelve months for both underlying net sales and underlying operating income growth. Our growth and underlying operating income has come from reduced operating expenses as a result of cost reductions, cost efficiencies and productivity improvements. Operating expenses also appear lower due to reallocation of some investments from advertising and promotions to packaging innovations and value added packs that is recorded as cost of sales, and additional promotional discounting which is a reduction from gross sales. Given that, I’m going to focus most of my comments on what we’ve seen more recently in terms of our top line results. Thinking about our top tier underlying net sales performance, at times it seems as some who follow our business have a hard time understanding how we outperform the industry’s growth when we are not the biggest player. So let me delve a little more deep into the quarter’s results, because I think they speak to the resiliency of our brands and geographies, and the benefits that we get through the portfolio and geographic diversification that we have achieved. It’s easy to try and oversimplify Brown-Forman. I believe that in the past, we have mentioned that roughly half of our sales are from Jack Daniel’s Tennessee whiskey, and that roughly half of our sales are in the United States. Using those figures, it seems that many people will just watch Jack Daniel’s sales in the U.S. and think they have the Brown-Forman story. We are far more diversified in that, so let’s look at it a different way. Looking at net sales over the last 12 months, Jack Daniel’s Tennessee…

(Operator Instructions). Your first question is from the line of Lauren Torres - HSBC.

Don just to clarify as far as the guidance you mentioned the FX impact now is a slight benefit, is that what you set for the year?

That’s correct.

Okay, and that’s actually better I think last quarter you said that was six to eight correct, so you went from 12 to six to eight to now slightly a positive?

Yes that’s correct.

Okay just a clarification and secondly, I guess broadly speaking on your expense outlook for the second half of the year, obviously that’s been the benefit for you in the first half and you are aggressive also on the second half of last year. Any guidance how we think about what you will be doing both on the advertising line and the SG&A line in the second half, how aggressive do you expect to be more with respect to advertising and also on the SG&A line, is there room here for reductions or just tells that we shouldn’t expect to see any improvement on that line?

Yes, on the advertising expenses, and I think we mentioned this a little bit in the first quarter as well, there has been some timing shifts on all of that, and we are expecting that, we will be seeing more A&P activity towards the last half of the year in particularly during the course of this holiday period. On the SG&A front, we were probably be seeing something in the array of increases in SG&A over the last half of the year because those comps are so difficult, and so when you think about when we look at the total operating expense line, that’s what’s kind of bringing us to the conclusions that I talked about in terms of low to mid single digits in operating income growth for the whole fiscal year.

And if I guess just one more question trend wise, I guess I’m a bit surprised to hear about further trading down and further sensitivity to pricing, I guess within the consumer world we are hearing about maybe modest improvements in sentiment, is it something that you think that’s more reflective of the categories that you are in or the channels that are you skewed to because I guess, I am just trying to get a sense of how much worse these trends over the last couple months has gone or what you have seen over the last several months?

Yes I think, I mean I think part of it is the time that we are in right now, the holiday period is always a very competitive period, and so you hear a lot about different additional discount programs that might be out there, and so that gives us a little bit of pause for concern although, it’s early yet, we will have to see how the holidays end up when all of a sudden done. I think on the trading down front, it is particularly being seen in the U.S., although we see it in a couple of other countries outside the U.S. as well, and within the U.S. I mean when you follow kind of the NABCA and Nielsen data, I mean it continues to show stronger growth at the lower price points in our business; you are starting to see a little bit improvement at the higher end as well. It’s kind of in the middle where there seems to be a little bit of pressure. So hopefully, we will be through that soon, but that’s pretty much the data that we are looking at is giving us some cause for concern.

Yes, the way I might add to that Lauren is, versus those folks who you might be referencing that are seeing a reversal of prior trends, I mean we are seeing more stabilization, I would say of the trading down phenomenon and but it hasn’t yet turned the corner and started to go back toward better trends for the most premium price brands versus the value on top of their price.

Your next question is from the line of Tim Ramey - D. A. Davidson & Company. Timothy Ramey - D. A. Davidson & Company: Just thinking back you mentioned el Jimador just passed the 200,000 case level I think you said in the U.S., can you remind us what that was at the time of the acquisition, that must have doubled I think is that right or close to double?

Well I will tell you, it depends there was a lot of transition that was going on with the brands and all of its in the two primary countries, that even outside the U.S. and Mexico, but we would estimate sort of at the consumer level that the brand was somewhere in the 125,000 case range back a couple of years ago. Timothy Ramey - D. A. Davidson & Company: And just you’ve done a great job growing the ready-to-drink business, but yes, there is something that just continues to concern me that, that business isn’t as good a business as your high end spirits business, do you view that as a defensive adaptation for the times or is the shape of the spirits business to come?

That goes so far as your last statement that the shape of the spirits business to come, actually if you have had that expectation then I could see what you might be concerned, because I think by bringing a balance view to it would help. I actually think there is a perception that because these brands are in a single serve format that they therefore are trendy, and our experience if we just peg the primary markets where we have ready-to-drink entrance, we have been in existence successfully in those markets for probably on average in excess of a decade, the Australia business goes back now and it’s roughly around 15 years I think Don. The U.S. business where we’ve got a decent presence is a 20-year old business, the Germany business now, it’s probably more or like a six to seven year old business, Mexico the ready-to-drink brand down there, New Mix has been around for quite sometime. So, I know because we have seen the lot of volatility and in the trends that you see from especially those that break out and get to very high levels and they drop it gets that perception, but we tend to think of them more, if you market them more as extensions of your parent brand versus free standing trendy drinks, I think they have a better chance of endurance. On the profitability side of it, you have to remember that we tend to convert these to their how useful they are in the assets that we have such as whisky or vodka or tequila whatever it happens to be the expression, and you do, when you convert the overall business, I mean you can use conversion rates depending on the project from anywhere from eight to ten to one, and when you do that and multiply that also times the growth profit per case, they become very attractive alternative and hold up very well versus spirits brands. So in addition, there is not typically as much aged inventory in warehouses behind them. So, I think there is a lot of benefits to them, it have to managed carefully and thoughtfully like almost any business, but I think on some levels because of the fluctuation in trends for some of the leading brands at various times they have gotten a bad reputation for being too trendy.

I would just add a little bit to that Tim in just in terms of how to think about it, in most of the markets where we are actively involved in this, the offerings that we are giving tend to be the way that the brand gets consumed generally. So for example, in Australia, most of that business, predominantly Jack & Cola which is very, very prevalent throughout there, and so what happens is it’s a convenient form of drinking the beverage in the way a consumer likes to drink it, and it gets us into new drinking occasions, and particularly more beer drinking occasions that we don’t necessarily get into otherwise, and so while some have gone after this market more in the trendy way that Paul is talking about or is it really been more concentrated in taking the parent brand the uses it has today, and giving it to consumers in a convenient way.

Your next question is from the line of Lindsay Mann - Goldman Sachs

I guess so, you guys mentioned some of the strategic shifts that you have taken on in order to help both through the bottom-line during the recession, during the downturn and clearly you have had some nice benefits in terms of your underlying profit growth, but whereas so much of the very, very robust growth that you saw in the early part of the decade came from things like premiumisation, the badge of the brand, on-premise and all that sort of stuff. Can you talk about how things like investing in promotional activity, value packaging and even RTD expansion whether that dampens your ability to recover when we come off the bottom, whether the growth outlook, with the equation from the growth would be the same as it was when we started that very robust period.

Well might be Lindsay, that will depend more on how the environment recovers more so than what we’ve been doing in the interim, actually things what we’ve been doing will prepare us even better for any recovery, because of the fact we’ve kept our brands relevant during the time when in the absence of things like ready-to-drink and special packages that our brand trademarks could have become less relevant. It’s really just a shift in course that I think we’ve made to try to be where the consumer is, and in this case the large sort of within the industry term we referred to as the shift from on-premise to off-premise. As Don mentioned, with the media spending particularly here in the last several months is well down the impressions are up, so I feel like from a total marketing program in trying to meet the needs of our consumers today, we are doing the right job for today, but also positioning the business for any kind of recovery and depending upon how that recovery unfolds we will make that what we hope for the right adjustments to continue to stay with the consumer. So, I don’t have even a minute concern that we are doing something today that would hurt our chances in the future or would hurt our ability to participate in the future recovery.

Okay great, and you mentioned some of the promotional activity and we see it in the measure channel data really heating up into holiday. Could you give us just a bit more color on whether the geography or segments or parts of the market and the way in which that’s playing out?

Do you want to take that Don or do you want me to?

Sure, I mean there is no doubt that we have been seeing more and more pressure coming in from, particularly on the pricing side. We just looked at some of Nielsen data that came in as of November the 14th, and it’s interesting. If you look at the top five suppliers and clearly, the largest have really taken down their price mix, anywhere around 2% and whereas the other three have us, Fortune and Bacardi have continued to try to find ways to create additional value through the pricing mechanism, and so I don’t think there is any doubt that coming into those holiday season, pricing was going to be more of an issue particularly here in the United States. By having said that, I also think we will able to find the right ways to compete, I mean everyone is kind of out there with their coupons, we are out there with our FSIs, it’s a typically competitive period anyway, I think will end up finding ways that everybody will all get through it, but there is no doubt that we are starting to see some pricing pressure out there.

And then you know last year there was some issues with inventory around third and fourth quarter, inventory destocking hurt you, and as we approach lapping that, is there a chance that your shipments will actually get a boost as we lap that sort of destocking that happened or have people permanently taking inventories down to even below those levels.

Well I mean there is potential there for us to see a boost coming into the early part of next calendar year as we relap against those, getting against that same period last year, there is no doubt.

And that was both through that period that we saw from really, from last year’s end of Q2, all the way through the end of the year, we saw examples and they were in our numbers in the last half of not only distributable, we will call distributor inventory reductions, so it is also the most prominent period for retail inventory reductions as people dealt with the financial crisis, so I think there is the potential on both end that we could a beneficiary against those soft comps.

Your next question is form the line of Ann Gurkin - Davenport & Company. Ann Gurkin - Davenport & Company: In your comments if I heard it correctly you believe we will see a return premiumisation in the category, do you think will reach levels we saw before the economic downturn or do you think it will be change kind of in the mix or the level reached

Well hopefully overtime we will get back to that point, I think it will probably be pretty gradual, I think part of what’s boosting our confidence when we looked at some of the data that we have seen recently, two of the categories that seems to be doing particularly well at the higher end are whisky and tequila, and so it serves us particularly well if those trends to continue, but I do think in terms of some of the premiumisation that we saw in the past to get back to those levels it’s going to take some time.

And I would add to that, I think the Don comments I think are right on the money as it relates to most of the developing world. I actually think that in the emerging world, often whether people used the brick acronym or whatever, that the degree of premiumisation may be even stronger than what we would have experienced in places such as the United States or Europe over the prior 10 or 20 years, as those economies grow and the middle classes emerge, and they have more access to disposable income. I actually think premiumisation as you refer to the trading up should become a stronger phenomenon in those countries, and in terms of where the demographics are, and population growth, those should be very attractive markets as the global economy continues to recover, and they could come back faster in some cases to say the references we often make to the U.S. market or maybe a western Europe. Ann Gurkin - Davenport & Company: Okay, and do you have the competency you can raise prices on your portfolio in the U.S. over the next 12 to 18 months?

Sure, on various brands and various prices, I mean as we always say, I think in the aggregate which sure are going to look today’s opportunities, it will depend somewhat on the degree of competitiveness in each market from price discounting and things like that, but I think the last 12 months as Don referenced, we have been able in one of the more difficult environments that I can ever recall to be able to take frontline prices up and then hold on to most of the increase. So, on our key brands where we do have real pricing potential. So if things improve we would hope to be able to do that or do better. Ann Gurkin - Davenport & Company: That positive price mix incorporated in your 2010’s outlook.

For the remainder of the year it should be yes, just a continuation of it. Ann Gurkin - Davenport & Company: And then you mentioned you have distributor contracts coming up for renewal in Europe, are you looking at changing your strategy on how you go to market in those countries or can you give us any other detail on that?

It’s just too early we are still in really evaluation and consideration stage, but wanted the people to be aware that it could have the potential that third quarter or fiscal year end, they have an influence on our reported earnings, but it’s just too early right now to know what impact that might have. Ann Gurkin - Davenport & Company: So you may make some changes?

We don’t know, we truly are in the evaluation and given consideration of what we are going to do over there and it goes a little bit beyond Europe, but it’s mostly Europe.

And then Don, can you give us any update or what should you expect the tax rate and capital spending for fiscal 2011?

For 2011, let me take that, for 2011 I would have used a similar rate of 2010, so $32.5 to $33 is fine there and capital spending I don’t see increasing significantly from this year’s levels, so I think it bleeds us $40 to $50 million is appropriate for next year as well.

(Operator Instructions). Your next question comes from the line of Thomas Russo - Gardner Russo & Gardner Thomas Russo - Gardner Russo & Gardner: First just a quick question on the ready-to-drink for you, is any of that still malt based or are you going back to original spirits in these offerings.

The majority of it spirits around the world, the one exception have been in the United States where the country cocktails brands which is actually one of our first if not our first ready-to-drink expression, changed several years back to malt, but vast majority of its spirit based. Thomas Russo - Gardner Russo & Gardner: Okay, good, the Don referred to a price point on el Jimador I think it was something like $25 and the race of the question in general, in North America how are you positioning Jimador and Herradura and what’s your sense of how the brand DNAs evolving, what’s the message that consumers to either on-premise or off when they reflect across the tequila category as to why to buy both of those, either of those brands anything particular you are succeeding at?

Well I might talk a little bit Don you might fill in here, I think that I mean, we genuinely have a tiered pricing portfolio strategy for our entrance in the United states, and it goes everywhere from one of our products actually below the el Jimador price has been with us for a long time, which we think has a little bit better price fighting capability which is Pepe Lopez. Then el Jimador hit the sweet spot for us, at around that $20 price point and so being very premium priced, and at a 100% agave meeting one of the needs of the U.S. market place but also capturing, what we think is a wonderful opportunity for the U.S. Hispanic audience to consume el Jimador in America whereas, previously it was less available as Mexican American sorted out. Of course you mentioned Herradura which is the most premium priced, but even in between there is a brand that we are beginning to test in the United States, which is Antigua, which is a pretty large sized brand down in Mexico which is between the el Jimador and Herradura price points. You got quite a bit of excitement about it for filling the same role that el Jimador is right now, in terms of meeting the needs of Mexicans in America who are seeking that brand out, and of course Herradura has been in the country for a long time, it’s been under distributed in our view, and right now it’s got the same conditions, and issues that are confronting a lot of brands up above $40 a bottle that are skewed to the on–premise. But we are doing a pretty good job I would say with the new label launch which went out in the United States in September of getting added points to distribution and we are starting to see a little bit of pickup in the brand, which is really good despite the fact that the conditions are great. So we sort of run the gamut from $10 to $15 at the low end all the way up to above $40 and it was part of a tequila strategy we have when we purchased the company. Thomas Russo - Gardner Russo & Gardner: Thank you very much, and Herradura of course has sort of three or four price lines under its own label?

It actually does, depending on the expression. Actually they all will have slightly different prices based on the expression. Thomas Russo - Gardner Russo & Gardner: Yes good. And then the incentive comp comparison, that in fact the second half of last year, how will they express this second half, is it that you are going to invest more internal comps this year because of year to date?

Tom can you clarify that we’ve went out on just a minute there. Thomas Russo - Gardner Russo & Gardner: Just a reference to the incentive comp comparisons in the second half last year I gathered, they were lower and hence provided you with operating income lift, this year will they be higher is that what we should expect.

This year you would expect them to be back closer to normal.

Let me just reiterate or explain just a little bit Tom reminded me, last year through the first half our performance, it was very good as Don alluded to in his script. In the last half, particularly after the holiday season when the economy began to go down, and our business began to suffer to, and we adjusted our incentive comp in that quarter, and we recall that our incentive comp is based upon performance, how we are performing and what our expectations were for the year. So that adjustment we made last year was to take that in consideration how we are performing this year and Don alluded to is we pay it up based upon again our performance and that’s reflective in our guidance that will be a higher number than it was a year ago.

Tom one of the reasons it was so strong last year is, I mean, the third quarter into a lesser extend the fourth had to bear the entire brunt of the seasonalization of that expensing because, in the first half we wouldn’t have envisioned it in the first half, and then whereas this year we’ve been able to plan for it a little more through each quarter, so the delta is going to look pretty significant as we get into the third quarter. Thomas Russo - Gardner Russo & Gardner: Thank you last call, it sounded like Finlandia did well in North America, we’ve heard about other vodka brands are really competitively priced have done extremely well, so how were you able to get Finlandia to grow perform well again some very sharp price discounting?

Yes, Tom we are actually in the process of repositioning Finlandia in the United States right now. And so we have taken the price down on a permanent basis, while we have taken it to a spot that we think is probably represents kind of where the consumers sees a greatest price value relationship, and as a result of that that’s where we are seeing some of this nice growth coming through the United Sates right now.

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

Thank you Vernel. We don’t have any closing remarks today, but as you complete your holiday shopping remember your loved ones would be thrilled to receive a gift of Herradura or Jack Daniel’s Single Barrel or any of other fine products. So, thank you everyone for joining us and happy holidays.

Thank you all.

Thank you.

Thank you participating in today’s conference call, you may now disconnect.