Good morning my name is Holly and I will be your conference operator today. At this time I would like to welcome everyone to the Brown-Forman Corporation Third Quarter Fiscal 2014 Earnings Conference Call. (Operator Instructions). I would now like to turn the conference over to Mr. Jay Koval. Please go ahead.

Thanks, Holly and good morning, everyone. I want to thank you for joining us today for Brown-Forman's third quarter 2014 earnings call. Joining me today are Paul Varga, our President and Chief Executive Officer. Jane Morreau, Executive Vice President and Chief Financial Officer and Brian Fitzgerald, Chief Accounting Officer. 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 third quarter of fiscal 2014. The release can be found on our website under the section titled Investor Relations. In the press release, we have listed 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, 8-K, 10-Q reports filed with the Securities and Exchange Commission. During this call, we will be discussing certain non-GAAP financial measures. These measures and the reasons 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 Jane for her prepared remarks.

Thanks Jay and thanks for joining us for our third quarter earnings call. I plan on covering three topics today which will leave us with a plenty of time for Q&A after Paul’s brief comments. First, I will review our year-to-date results, second I will share some thoughts on what we believe is driving our top tier performance and third I will discuss our revised outlook for fiscal 2014. So let me start with a review of our year-to-date results. We’re pleased to report that our underlying net sales grew 8% in the third quarter slightly above the 7% underlying growth rate registered over the first nine months of the year. We’re encouraged by our ability to deliver strong outperformance in the important OND period against the back drop of softer results for many of our competitors. Let us look at some of our year-to-date growth by geography. Underlying net sales and emerging market accelerated in the third quarter looking at our year-to-date growth in these markets from 7% through the second quarter to almost 12% through the third quarter. The majority of our emerging markets enjoyed strong gains including double digit growth in China, Brazil, Russia, Thailand, Turkey, India in the former CIS countries. Our results in China have improved significantly through the first nine months of this fiscal year driven by our intense focus on driving profitable growth through higher pricing and lower discounting. It's worth mentioning that while our business today in China is relatively small it has accelerated despite the recent government clampdown on extravagant gift giving. We believe this is attributable to our portfolios skewed to premium rather than luxury price points. Poland also posted double digit net sales growth year-to-date reflecting significant buoyance at the retail level prior to the January 1, excess tax…

Thank you Jane. Good morning everyone. I really don’t have a lot to add to this morning’s release and Jane’s very nice summary of our Q3 and year-to-date results. Her detailing of the reasons for our performance relative to our broader industry is I believe the main storyline today and we worked very hard over the years to put the company in this position, balancing well I believe, risk and reward along the way and today we of course welcome what Jane mentioned the great momentum that exists for whiskey at premium and above price points and above all we cherish the opportunity to continue developing the Jack Daniel’s trademark around the world as our foremost opportunity in premium whiskey. In summary we’re in a great place today and we very much look forward to what lies ahead. Before we take your questions let me finish by congratulating our employees on our continued excellent results and on the comprehensive quality of the results that we announced today. They cannot happen without the collective effort that we observed each and every day across our company. So let me simply say well done every one. That concludes our prepared remarks and now we’re happy to take any questions you might have.

(Operator Instructions). And your first question will come from the line of Nik Modi with RBC Capital Markets.

This is Bill Kirk for Nik Modi. Real question you mentioned there would be some give back but have you quantified the 3-2 magnitude of the Poland buy-in ahead of the excise tax and is that reflected in the distributor inventory adjustments to calculate underlying net sales and operating income.

In terms of your two questions, the give back, the way I would characterize it is that combination of both Poland and by Germany buy-in was about a point and so that’s what we would expect to shift from third quarter to the fourth quarter in terms of the OI.

Just to clarify, it is not something that in the schedule we always provide that reflects inventory adjustments, this is something that is actually in our underlying operating performance and so we make note of it of course when we think there is it's not sustainable in this case because it is related to buy-in so we think the impact of OI will be, was it two points position?

It's one point for Poland and Germany and another point for the SG&A timing that’s it and Paul is correct the inventory it's not included in our inventory adjustment schedule.

Okay perfect and then real quick Winter Jack, it is branded as a seasonal offering but given it's success of the cider category on a larger basis. Are you considering allowing it or something like it to become a more year-round offering?

We’re looking at it. We have only had two passes at it so far first one in Germany and was very seasonal. I mean it was as intended and then in the United States we expanded it this year after just a couple of initial markets and really we’re encouraged by what we saw. So we’re like we always do in Jack Daniel’s [ph] in those line extension we always err on the side of caution and conservatism and so we’re taking a look at it but we’re aware of the appeal of that flavor profile and those offerings particularly in the U.S. market these days.

And your next question will come from the line of Judy Hong with Goldman Sachs.

Paul just wanted to get some perspective on the pricing environment in the U.S. I think in the Brown spirits pricing both seems to be pretty healthy here so just wanted to get your view on that and kind of the opportunity to take further pricing going forward also just in terms of the on-premise still somewhat soft for the industry as a whole how does that kind of factor in in terms of thinking about pricing?

Well Judy I think the first part is yeah we would agree with you I mean I think it is a tail really is you know maybe two categories if you were thinking Brown spirits versus White, it does appear that through the holiday period particularly that the combination of trade up to ultra-premium price points within the categories offering a form of price increase but then also within the trade mark you can see continued evidence of pricing going up less so of course particularly in the highly competitive vodka market and some of the other categories. But we think that potential continues to exists, I mean you do as we go into maybe what this now be the third year. We continue to look at cumulative impact as well as the individual impact and remember too for our most significant interest in this area is being the Jack Daniel’s trademark. It was not just for financial reasons or trying to cover costs and those sorts of things that we took pricing. Very prevalent our thinking all along has been continue to price Jack Daniel’s at the ultra-premium levels that we believe it should be around the world particularly as the segment above the Jack Daniel’s price point which we of course compete but so do others continue to develop and expand pretty rapidly. So of course we don’t want Jack Daniel’s to be seen as a midpriced or popular price brand. So there is some strategic reasons for us to continue to explore that. Always on this call when we get questions we’re always amidst our planning and budgeting for next fiscal year. So we will be taking a look at what the specific details are around pricing going forward but certainly as our hopes with the category momentum and some other factors they will be sensitive to the economies that we encounter around the world but we like the category momentum and that should encourage us to continue to take pricing where we can get it. So we will take a look at that as well as we go through our planning this year but I don’t have any sort of new news to report on that.

I will just build on what Paul said just to know a couple of our brands and the on-premise and how they are performing very, very well and that is Woodford Reserve which we also talked about in this call in our mission to get it to a million cases as well as Tennessee Honey, both of those brands are performing very well on the on-premise.

Yeah it picked up in recent months too.

So China of course is a low base for us and we have got double digits in the quarter. We have done a number of things over the past year as it relates, past couple of years as it relates to that market in terms of how we go to market. People there, the structure, the pricing, the discounting it's a whole host of new things that we’re doing there. Again, it is a small market ago we are very, very excited about what we've been seeing in the momentum we’re starting to see and again like I said it's up double digits for the quarter.

An your next will come from the line of Ian Shackleton with Nomura. Ian Shackleton – Nomura: Jack Daniel’s Tennessee Honey you kept saying run-rate is you had in the first six months the 30% and I think you’ve like you expected that to slow down a little bit in the second half. I mean what’s happened here? Is this renewed growth in the U.S. or is it new markets? Well why imagine to keep that growth rate going so strongly?

I think balance of all of them Ian, some of the influence to this is staging kind of the win we roll out in markets if you go all the way back to the beginning we started in the United States and we can track quite easily where and when we were introducing it and then as we have expanded it more globally and it's been pretty staged not everyone as was our tradition in the earlier parts of the roll out introducing the first 3 to 4 months of the fiscal year, our fiscal year. So actually we had some introductions occurring here after even the end of October so there is some Q3 introductions that contributed to that and I would say just the U.S. has continued to hold up well. I mean it's on slightly lower growth rate, soft to higher base but compared to some of the things we would have been concerned about you know when you get these products do very, very well at intro you always have lurking concern about whether they are going to be too trending and drop off when they start to cycle again. You know their early success is in this one we have been very pleased on two levels one is that it has continued to grow off it's expanding base and I think a big part of that is it's drawing in new consumers and the other one is just a minimal amounts of cannibalization that we would have observed as it relates to Jack Daniel’s Black Label. So far so good on it and as we do our plans for ’15 we will be looking closely at those expectations in the summer when we report full year we will update you guys on it. Ian Shackleton – Nomura: On the tax rate Jane you’ve given us the 31% for this year, I mean that’s slightly low probably than we have been thinking. Is that at a sustainable level, as the business becomes more international should we be expecting a slightly lower tax rate?

Just from the year I will say that and for the quarter we have a couple of discreet items that went through, so it is lower than we would normally expect ongoing but I would just step back for a moment and think about our tax rate in general and we’re a U.S. based company. We have a single, our flagship brand it has a single point of production in the U.S. as well and as you know the U.S. has one of the highest corporate tax rates around. But to your point as we do get more global and we have been seeing this over the past several years we get expense, where 60% of our revenues were outside of the U.S. last year, 40% in the U.S. We do expect the tax rate to come down slowly. With that being said we’re always actively looking for legitimate ways to have more efficient tax rate and we’re more proactive in that space.

Yeah. I mean I think your question the best aid to this if you really think over it long term, the next 10 year is this international development of the business which thankfully for us has been the main story for a long time. So we will continue to look for opportunities. We’re encouraged, this was I think the key focus on this point is how discreet this item was and these items were in the quarter to take the tax rate down.

Your next question will come from the line of Bill Chappell with SunTrust.

This is Sarah Miller on for Bill. I just had a kind of can you talk about number one the promotional industry environment during the holiday season, what was kind of the level of gifting and if there was an excessive promotional activity or kind of any commentary about what you saw there?

Well we wouldn’t have any provocative headlines I think in that area. I mean the holiday period is always competitive. I think one of the things that influences a bit of the discounting and promotional pricing around whiskies these days particularly in the categories that we pay the most attention to are supply demand dynamics that you know has been sort of well discussed around the world as it relates particularly to scotch and I think I would have observed that the pricing is pretty rational around the world these last couple of year probably as a result of that because I mean there if their supplies are precious they don't want to be giving away the product, the prices that is just inappropriate. So I think that might have been the longer range, it just more general influence for the ultra-premium areas where we tend to be concentrated. To be quite honest with you I know in categories like Vodka and more standard priced tequilas and things like that. I mean it's very competitive. I don’t know that I would say that the prices were lower so much as it was just tougher to get prices to go up.

Right. Just building on what Paul said this is more of a U.S. only comment and that’s only a smaller portion of our business as we go forward but according to the syndicated data that I believe you all receive or see both in Nielsen and NABCA over the holiday period the value actually grew and so meaning implying that we’re probably less discounting could be mix in there as well but the value growth of that period was actually picked up a little bit.

Yeah that’s about what we have to say on that.

And then we talked a lot about A&P and SG&A do you have any additional color you can add on kind of the gross margin side of what you expect going forward? Is pricing going to boost in the fourth quarter or is that going to be offset by kind of FX and that kind of stuff?

So as we talked this morning that our gross margin expanded about 70 basis points year-to-date and you also probably saw that in the quarter we didn’t get as much I think we were basically flat on margins and so one reason for that was the mix of ourselves that we had in the quarter, we talked about the buy-in in Poland, (indiscernible) largely was to 90 [ph] which has a lower margin for us in our business. So as I think ahead to our fourth quarter we still believe our full year we will have nice gross margin expansion. Sales will still exceed, our cost of goods, inflationary increase but I would think that would imply that our gross margin in the fourth quarter because of some of that give back should have some improving trends.

Yeah the nice thing I always look at that can help you with thinking about this longer term and we will update this of course when we get out to the full year results. The supplemental information we pulled [ph] on the earnings release on page 11 if you just look at the relationship as you go down the page between net sales gross profit and then down to operating income and look at last year, the full year and our first nine months to-date, I mean it's evident sort of operating leverage that the company has been able to accomplish just in this last that would be 21 month and we’re always looking at that to see what’s the appropriate level of it but we’re pleased that we’re able to get some leverage and it exists between both sales and gross profit and then between gross profit down to the operating income line and we feel like we’re investing well behind the business too. Jane outlined that as it related to the capital investments too that we’re making which would help us 10 years from now and beyond but then also the things that we need feel we need to do over the next sort of 12 to 36 months related to A&P and SG&A. So it's a great story, I think for the company right now and we always scrub this pretty hard during our planning process and then again we will update that with you here in I guess early June.

Our next question will come from the line of Mark Swartzberg with Stifel. Mark Swartzberg – Stifel: I guess a longer term question on the U.S. and millennials, could you update us on what kind of behavior you’re seeing among millennials in the North America whiskey segment to what extend it's mixing versus straight consumption, my bias is to think that if it's more mixing that’s favorable for the longer term outlook for the category and then what also does your research show about their behavior as they age behavior in the larger spirits segment, again you’re obviously making some optimistic and I think reasonable assumptions as you look out 4 or 5 years for product coming out of the barrel. So just wanted to get an update on what you’re seeing for the millennials that kind of undergirds that optimism.

Yeah I think maybe a couple of things I comment on there. Typically you will find early 20 sort of legal drinking age and I would say in the mid-20s maybe even in the late 20s you will see a mix component to it, the initial trial stage and interesting at least from my vantage point is that the mixtures actually change with the past of time. All of us who grew up in the industry would have these references to jack and coke and lot of the leading brands that would be mixed with sodas and there is of course the traditional ones (indiscernible) and things like that. But I mean all the new ways in which products are prepared and there is such, one of the great aspects of this booming bourbon business is the ownership of the account in creating the cocktails they are creating that make it delicious for a consumer to drink bourbon. So some of it has been classic cocktails but also variations of old classic cocktails. I mean I just some or the other day I mean it's a peach [ph] Manhattan for Woodford Reserve which you think I mean you think about if that sounds odd but how drinkable and it was just outstanding and so this whole mixability component of American Whiskey is perhaps one of the most important aspects of it's long term growth. I think you were sort of inferring that the ability to enjoy it in a variety of ways and to actually dilute the product so that’s not exclusively a straight consumption or a short consumption. It's really helpful aspect of what we think is being going on. People do tend to evolve even if they stay with the brand we know this from Jack Daniel’s over…

I think mixability relative to say even other whiskies that we see when we think even within whiskey mixability is there. I do think and we all would be speculating about how long running the contributing factor of say authenticity is. I mean many of us at the company are regularly talking right now even in public forums, I just did one here locally a few weeks ago where you’re challenged to think about why is urban and American whiskey doing what it's doing right now and how sustainable is it and how you might think about it. I think it's the core of it. It's tied up in all kinds of factors relating to not only to mixability but also very much and I think American whiskey particularly hits the sweet spot that sort of the best attributes of what scotch provides in terms of premiumness and authenticity and all these other things and all of the great attributes that vodka provides and those are the two world’s largest categories and so here American whiskey is poised to benefit from being at the intersection of the favorable attributes of two of them. I also think, don’t underestimate things like the hospitality and the realness and the ability to promote and do public relations because you actually have a real place where people can go and visit and meet the manufacturing, the people who make it, they can understand more about the product and deepen their knowledge and just as a reference point that’s far less a traditional in say vodka whereas it just deepens the sense of commitment and emotion and also the value equation that consumers will then associate with it. So it's kind of bourbon time right now, we have been waiting for it and to be quite honest with you, for a long time and are happy to have it but can I forecast 10 years out or even we know that these forecasts are required because we have to make the products so far in advance. I do say one of the things that’s a nice self-regulating mechanism it's really interesting because you’re levelheaded all of us are levelheaded as we plan 5 and 7 and 10 years out in the future you do this, you can’t have the explosive growth because you won't have the product that creates the trendiness that makes the business go away. It's self-regulating mechanism in whiskey that is you sit there while you could be growing it I don’t know nine and you can only grow seven or something and you’re frustrated but maybe that seven goes for a lot longer because you didn’t get the nine. And so that’s a way that I think for years I think bourbon manufacturers have had to think about this business. Mark Swartzberg – Stifel: That’s great, very helpful. We will try to self-regulate with our numbers as well.

And I congratulate you on being passé officially. Mark Swartzberg – Stifel: It's all good and thank you. I’m sure you’re on the same camp with me.

Yeah completely. That was long ago. Mark Swartzberg – Stifel: Very good. Thanks Paul.

Your next question will come from the line of Bryan Spillane with Bank of America Merrill Lynch.

Just couple of housekeeping questions and then I’ve got a I guess a little bit longer one or larger one for Paul, Jane have you given CapEx assumption for the full year?

We have a CapEx, I should revise I think before we had given, A, 140 to 160 range I think it's going to be more in the 120 to 140 range that money will end up being what we were projecting this year to be spent being a little bit less is actually this is going to be shifted until next year.

Okay so just a timing thing in terms of project?

Absolutely.

And then just the impact of the French, the distributor inventory changes in France in the fourth quarter have you talked it all about just kind of quantifying how we should think about that in the fourth quarter if there is an effect at all?

Yeah Bryan albeit from the distributor inventory and from the changeover happened through year-to-date January so we don’t expect any more at this point of time.

Okay so fourth quarter is clear there?

It should be clean.

On the inventory not on the SG&A.

And then just on the kind of the lumpiness in the way that SG&A has come in, so it's going to be higher in the fourth quarter so is that again just the timing thing first, and then second is SG&A I guess going to come in for the full year higher or lower or in line where you were originally planning.

Let me think about this SG&A thing, first of all, it is lumpy and we’re around 2% underlying right now. I think we have done a really good job thus far balancing the investment in our business with containing cost but as I said in my script we’re projecting if we take out all the benefits that we have had and timing through the first nine months we’re running probably a little bit over 4% on what we call a normalized basis. So when you look at the fourth quarter it is going to be up double digits, we do not expect that going forward to next year. It is highly unusual, some of the things that I mentioned let’s talk about first of all the we’re cooperage as an example we’re very excited, we’re going to have our new cooperage open in the Decatur, Alabama for full production here in a matter of weeks and those costs that are going to hit the fourth quarter are onetime in nature. So they won't be repeatable. I’ve mentioned the European office, regional office that’s part this year, part next year kind of thing. The France is an ongoing thing. This is the first quarter we will have full expense in it and we will continue to have at all of next year and beyond the comparability for the first eight months next year will be difficult because we didn’t have it in the previous year. So as a combination of things like that and so I would not expect what you’re seeing in the fourth quarter to be sustainable, we will have our numbers are coming pretty close to what we’re playing for the year which I think was your last question.

And then I guess Paul just this one last question, I guess since Beam was taken out there has been some speculation and we certainly feel lot of questions about just how Brown-Forman stands in terms of the industry consolidating with the company via takeout target and so I guess I’m not asking you to answer that directly but more I just kind of reflected back on the Investor Day in 2012 in the presentation that Garvin Brown had made, he really laid out how the Board and thinks about the stock, how the family thinks about it's ownership in the stock. So can you just talk a little bit about whether anything in that regard is changed and just you know overall how you think Brown-Forman is affected or is it not affected at all in terms of some of the consolidation you’ve seen in the industry?

I mean gosh I’m trying to think Bryan you might go back further than almost anybody on this call in this conversation. Actually I will give you that reference solely because I think the story and the message has been so consistent over that period of time and you know look how well served has the company and Brown-Forman have been, their continuing commitment to the business. So I mean I think I don’t know I can actually say it any better than Garvin in New York was that about 15 months ago or so, it was a little over a year ago I think and so no I don’t think there is any change in our point of view. I mean have I mean I just gave a speech were we used the initials of the company to reemphasize our highest ambition and that phrase is building forever and I don’t know Jane, there were others. We continue to have regular strategy conversations, the one of the more recent ones I had probably I don’t know 3 or 4 weeks ago we were heavily focused on 2035 I will just tell you that is the point. And we were spending a lot of time on what the business might look like and how the world might unfold in front of us and so that gives you an insight as to whether or not we’re lessening in our commitment or perspective about that. I think there is probably one good example as we feel about and I will tell you I think it's really interesting and of course you’ve correctly reflected on all the attention we’re of course observing what people are writing or speculating about but for us it's not really speculating. We know what we’re trying to do and we welcome the moment that exists right now in the industry and we think also we’re just so well-positioned as you would have observed over the years to own Jack Daniel’s and to be able to take it around the world. I think what we consider to be still relatively modest shares in the markets and against the categories that we measure ourselves. So we think there is just so much runway still for the company and on any of them. I mean I don’t really feel like there is any update that point of view other than things have been strengthening here at the company.

Your next question will come from the line of Robert Ottenstein with ISI Group.

Paul in the past you’ve talked about the on-premise as a leading indicator for the business as a whole and what changes me on premise could potentially drive your mix of marketing from push to pull and that it was really something to focus on. Do you think obviously some of the on-premise weakness is the weather, some of it's the economy maybe you can talk about the mix there, number one. Number two, refresh us on the percentage of your business in the U.S. that’s on-premise and off and then perhaps most importantly do you think that the changing patterns of consumptions of millennials for perhaps a variety of reasons to drink more at home any how perhaps invalidates the importance on-premise changes as a leading indicator for the rest of the business.

I think in the past when I’ve spoken about the on-premise, I’ve always felt this was just philosophical that if you can succeed as a brand in the on-premise it was the ultimate test to have a consumer go in and call usually in a noisy place, pay more than they would have if they were drinking at home and at the decision point know how to drink it and often times as is the case they like the brand so much they are willing to buy one for another person. I mean these are great tests I always felt of brand appeal and the connection between a brand and a consumer. And so it's less of a shopping experience is the way to think about it. It's so instantaneous and so brand strength I always felt it was measured there. I think your point is I sort of was referring to some of this in response to an earlier question is it's probably time to think about a new in many of these markets around the world what the implications are for the on-premise. I would not go so far to say that the on-premise doesn’t remain probably perhaps the greatest brand building environment for distilled spirits and a great differentiator of our industry relative to most packaged goods. I think your question and some of the things we would have been thinking about are a good reminders of how does things evolve based on whether it's millennials and new consumers and the way they interact with each other? What does technology impart upon the channel? Going back and thinking about pricing, I mean there was great question earlier about that. I think all those things are put in the mix and we haven't done a proper strategic consideration of that and let’s being honest I mean it changes market by market by market. You probably should do one for maybe U.S. and maybe more developed western international markets would be one cut. Some of these markets around the world particularly the emerging markets where things are sold by the bottle and food is often consumer, that’s a totally different consumption occasion and so you want to break it into it's component parts but I think it's a fair question for all of us to be asking ourselves is, are we at the beginning of something it's evolving and the way the consumer behavior is such that it might influence the business and I wouldn’t have a definitive answer to it but I think it's a fair question to be asking of us and the entire industry.

And so can you remind us just in the U.S. what your mix in terms of volume is on-premise and off and then what I’m kind of hearing from you is that the on-premise weakness that you referred to maybe it's a source of caution but it's not a big source of concern as you do your budgeting for next year.

I will say it's the source of caution and it's an area of focus which is not different just a concern. We’re trying to evaluate what the best posture is. I know in more recent months and as we have talked particularly just the U.S. as an example I mean our gang [ph] there wants to spend more time in energy and dollars against the on-premise because we’re so prominent with Southern Comfort and Jack Daniel’s and Tennessee Honey and Woodford and it is not as easy to go and as efficient from a personnel standpoint to cover the many, many, many outlooks that exist of on-premise as it is they going to a big chain or something. So you’ve to be thoughtful about how you do it, but no it's an area I mean concern I would say. I mean there is a lot of conversation going in our company but what’s going on with the on-premise and how do we support it? What can we do? I mean the greatest thing you can do is have the consumers just blissfully walking into the account asking for your brands. That’s the greatest defense. But short of that there is always a bit of a push component and a need to promote in the on-premise. And so our teams are looking at the best ways to do that. We will continue to think about it though, I think these questions you all have raised today about the on-premise are fair and we continue to think about it. I don’t think what I’ve seen so far in our own data that it's caused for some significant, what I would call in many cases overreactions or rash move and reallocation of resources between the two. I think we will be more thoughtful about it and then on your question about what percentage of our business of course have varied by brand but just to give you a really developed well brand in the United States generally might even if it has very strong call, it's going to be more like 25% to 35% on-premise and the other part off-premise and that would be for the big brand. You can get these really hot on-premise shot [ph] brands and they will be 80% on-premise but for Jack I don’t have the data in front of me but it is something more like a 20 to 25 and I think Southern Comfort might be in about that range something like that because the business continues from a distilled spirits basis overall to be more skewed to the off-premise.

Your next question will come from the line of Nick Cavallo with Deutsche Bank.

Just one quick one on share repurchase I guess. Looks like you guys didn’t buy back stock in the quarter. Is that just being more opportunistic around the stock price or maybe more compelling M&A opportunities out there that you’re looking at? Just trying to get a sense of sort of what your appetite might be for share purchase at these levels versus other uses of cash. Thanks.

To start I would take a step level first of all I will just remind everybody how we look at our capital allocation decisions and we always look over a long term horizon generally 10 years and we really that has served the company well, served the shareholders very well and has allowed us to be very flexible in our approach because we’re always looking for the opportunity to how best to create long term value for shareholders. So as you know what we do is we first go through our list. Our first priority is to always find opportunities to invest behind the organic growth of the business and we’re doing that just now. As you know we’re investing behind a new distillery at Jack Daniel’s. Without [ph] such major investments since pre-prohibition. We've got the cooperage that's going to get ready to be opened here soon in the Decatur, Alabama. We’re investing heavily behind our Woodford Reserve facility to meet the ambitions that we just talked about in this earnings release of over a million cases. We continue to build warehouses so that we have places to put our barrels into age with the whiskey that we are putting into which leads to working capital investments that we need to do. So all of those are investments that we do first and foremost and then we move on our list and we want to make sure that we’re growing our dividend and we generally look at growing our dividends in line with our earnings. Once we get past that we then do look at opportunistic acquisition, buying back stock and paying special dividend based on our excess cash. And so we do have a share repurchase, it is in share repurchase our part of our program as I just said part of the equation that we look at and we have up to $250 million of share repurchase that will expire this September. We have reported roughly $15 million so far. I think it's important to note that we have never ever been programmatic if you will in our buyback. So we’re not trying to get to a debt to EBITDA ratio with these things and so our buybacks are always subject to what’s going on around us in the market and opportunistic purchases and then we can take advantage of it when we pull back and so forth. So we’re always constantly evaluating the best ways to return cash to our shareholders and we do it over a long period of time not measured by quarters and that’s what I would say.

And your next question will come from the line of John Faucher with JPMorgan.

I realized it's still early days both in France and then looking at the consolidation of the Europe operations but can you talk a little bit about sort of the lessons learned as you’ve brought more distribution in house over the past couple of years in Europe and how we should think about that as you look at the balance of your business on a global basis and what are the key takeaways so far as you have really sort of changed your business model in Europe and what that implies for the rest of the world? Thanks.

It was over I guess six weeks ago for the launch of the French company so I will just use that as an example, a bunch of us went over to sort of help, get things kicked off and it's unbelievable the amount of excitement and this was of course a unique case and we got regular questions and observations while we were there about how no one really knew of any other people starting French companies or investing in, the observation sometimes is broader about investing in this way in Europe right now. And so we were sort of against the grain with as we were before with Germany to be quite honest. I mean the primary benefit of this is focus is the way you might think about it and when you go from being sold amongst many brands in this case for France particularly where it really is almost to start, it's starting out is very much the Jack Daniel’s business. Now one of the reasons to do it is so that it can become more than just the Jack Daniel’s business as we develop in a very attractive whiskey market. So what happens as you end up having this large group of people who are I mean enormously dedicated and incredibly passionate about going out and building something and that’s an intangible you can’t measure, you can’t put it on the income statement but that’s it. I mean that to be me is the differentiating factor between you know having an agency relationship and having another or all kinds of unique circumstances as we go up and down the P&L and can describe the cost and each case is a little bit different but if you want to know the common theme whether it was Australia, Turkey or Germany or France in this case, any of the ones that we have done historically it's really about getting the people focused on Brown-Forman’s work and in many instances particularly in international market that’s been the Jack Daniel’s trademark and so it's really the word focus and dedicated effort and enthusiasm and it comes from having your own people do the work on your behalf.

And we have reached the end of the allotted time for questions and answers. I will turn the conference back over to management for closing remarks.

Thank you Holly and thanks for all of you for joining us today for our third quarter earnings call. Please feel free to reach out to us if you’ve any additional questions. Have a great week.

Thanks everyone.

Thank you.

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