BF.B (BF.B) Q3 2015 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the Brown-Forman Third Quarter Fiscal 2015 Earnings 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. Thank you. I would now like to turn the call over to Jay Koval, Vice President of Investor Relations. You may begin. Jason Koval - Vice President & Director-Investor Relations: Thanks, Victoria, and good morning, everyone. I want to thank you for joining us today for Brown-Forman's third quarter 2015 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 2015. 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, Form 8-K and Form 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'll turn the call over to Jane for her prepared remarks. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Thanks, Jay, and thanks for joining us for our third quarter earnings call. I'll cover two topics today, which should leave plenty time for questions after our prepared remarks. First, I'll review our year-to-date results including trends in the third quarter; and second, I'll discuss our updated outlook for 2015. So let me start by reviewing our recent results. Third quarter underlying net sales growth of over 5% is particularly impressive in light of the strong 8% underlying growth we delivered in the third quarter of last year, and against the competitive set that is showing little to no growth. Year-to-date, underlying sales are also up 5% with price/mix contributing 3 points of sales growth. Top line results in the United States continued to accelerate in the quarter, up 7% year-to-date compared to 5% for the first half. Market share gains in the U.S. are being driven by the great work our teams and partners are doing to capitalize on the renewed consumer interest and authentic American whiskey, including the Jack Daniel's family, Woodford Reserve and Old Forester. Premiumization trend and innovation have played key roles in driving our outperformance over the last few years, and we look to introduce new expressions over time that we believe can help us deliver sustainable long-term growth. Developed markets outside the United States grew underlying net sales 4% during the first nine months. France, the United Kingdom and Canada are all growing quite well, while Germany and Italy were up slightly. These markets helped offset sluggish results in Australia and Japan and in Spain where results were down double digits. And in the emerging markets, Jack Daniel's Tennessee Whiskey continues to grow mid-teens driven by strength in Turkey, Russia, Ukraine, Brazil, Indonesia, the Philippines and sub-Sahara Africa. Mexico results were flat as the mainstream tequila category remains quite competitive and we are actively repositioning our el Jimador brand at a higher price point. Additionally, large declines in Poland driven by Finlandia pulled down our total emerging market growth to 6% in the first nine months. Remember, Poland had large buy-ins in advance of last year's January first excise tax increase, so comparisons were challenging in calendar 2014. Excluding Poland, our emerging market sales growth would have been seven points higher. Furthermore, we estimate that year-to-date underlying net sales growth for the entire company, excluding Poland, would have been 1 point higher at 6.5%. Let's now move to the reconciliation of reported to underlying results. An appreciating U.S. dollar continue to weigh heavily on our reported results. Last quarter I used the euro as an example stating that it had declined 7% since our first quarter call. These declines continued in our third quarter as the euro dropped another 9%. In total, we experienced additional FX headwinds of approximately $0.04 in the third quarter beyond our expectations at the time of our second quarter call. So while our top line grew 5% on an underlying basis during the first nine months of fiscal 2015, foreign exchange negatively impacted our reported results by approximately 3 percentage points. An increase in estimated net distributor inventories helped reported results by 1 percentage point due to our route-to-consumer change in France. As a reminder, our former distributor fully depleted inventories of our brands during November and December of last fiscal year, leading to simply no shipments in the third quarter of 2014 in France, which negatively impacted our reported results last year. The absence of these reductions this year resulted in a favorable one-time comparison. This benefit combined with the negative effect of foreign exchange resulted in reported net sales growth of 3% over the nine-month period. Underlying A&P spend increased 4%, while underlying SG&A grew 9%. Both line items were a few points lower on a reported basis as foreign exchange helped our non-U.S. dollar denominated cost. Year-to-date SG&A increases have been driven in part by our route-to-market investments in France, but we expect lower full-year SG&A growth. Putting these all together, we delivered 7% year-to-date growth in underlying operating income. Foreign exchange headwinds hurt our reported operating income growth by seven points. This was due to transactional impact on net exposures and the revaluation of net current assets denominated in foreign currencies. The revaluations are captured in the $22 million negative swing in the other income and expense line item on the P&L. For the first nine months of the year, earnings per share came in at $2.54, up 4% year-over-year. Foreign exchange was an $0.18 drag on reported EPS, so year-over-year growth in EPS would have been approximately 11% excluding this impact. Moving now to my second and final topic, an update on our outlook for fiscal 2015. Today, we are reaffirming the ranges we shared with you for our full-year outlook for underlying net sales growth of 6% to 8%. Our year-to-date top line results are running slightly below the low end of this range due largely comparison issues with the prior year. Our business momentum remains robust, and we will be comping against last year's soft fourth quarter underlying sales growth of 3%, which was negatively impacted by givebacks in Poland. So, with two-year stacked sales growth running 14% in the third quarter and the expectation of easier comparison, we anticipate strong fourth quarter top line growth to pull our four years sales growth back in the 6% to 8% range. Regarding the national launch of the Jack Daniel's Tennessee Fire, our teams have been hard at work and we recently began shipping our first cases to the other 42 states. Our initial read through from our eight test states has been very encouraging, with Fire continuing to index quite favorably to Honey's introduction four years ago, and we believe that the limited rollout has helped fuel consumer interest in the brand. Equally important, we believe that Fire is not only complementing Jack Daniel's Tennessee Whiskey, but is showing little sign of slowing the rate of growth for Jack Daniel's Tennessee Honey in the initial test market. From an earnings perspective, we expect a few cents of benefit to fiscal 2015's reported results reflecting pipeline build. Year-to-date gross margin expansion of 70 basis points has been stronger than what we expect for the full year given our expectations for higher costs in the fourth quarter related to wood for our barrel-making operations caused by growing and increased interest for bourbon. Underlying SG&A growth moderated to 6% in the third quarter as we began to lap the route-to-market change in France on January 1. We anticipate additional moderation in the fourth quarter as we lap last year's 14% growth rate. In the aggregate we expect underlying operating income growth in the fourth quarter in the teens, which should result in full-year underlying operating income growth of 9% to 11%. Not surprisingly, FX remains a headwind, so given today's spot rates, which for reference are roughly 13% weaker than 35-year average versus the dollar, we expect foreign exchange to pull down our reported EPS in the fourth quarter. We anticipate FX will hurt our full-year operating income by over $60 million and EPS by over $0.20 assuming today's spot rates. This year full-year FX impact is a nickel worse than we expected at the time of our second quarter call and a driver for our revised EPS range of $3.15 to $3.25. As a sensitivity, assuming our foreign exchange cash flow exposures collectively move 10% in either direction, our EPS over the balance of the year will be impacted by approximately $0.04. And while it's too early in our planning process to share specific guidance on fiscal 2016, we remain optimistic about our prospects for continued growth given the health of our existing business, continued category momentum, and our disciplined innovation strategy. We'll share more specifics with you on our fourth quarter call. So, in closing, we continue to deliver strong underlying growth. We attribute this outperformance to our leading portfolio of American whiskey brand led by the Jack Daniel's trademark, strong and growing geographic diversification, and premiumization opportunities for our portfolio of brands. Our business model has been built around premium brands and the efficiencies inherent in single point production, leading to high gross margins and strong free cash flow. We approach our capital deployment with a very long term view supported by the health and strength of our balance sheet. This allows us to simultaneously invest in future growth as we are actively doing today behind Jack Daniel's and our other American whiskey brands, evaluate potential acquisitions and return cash to our shareholders as we have done to the tune of almost $0.5 billion so far this fiscal year through ongoing dividend and share buyback programs. So, let me turn the call over now to Paul for his comments. Paul? Paul C. Varga - Co-Chairman & Chief Executive Officer: Thank you, Jane, and good morning, everyone. First, let me say that I continue to be pleased with the company's results and I want to publicly thank my Brown-Forman colleagues worldwide for again producing them. I think we had another very good quarter of underlying performance, and I would highlight that our 5% sales growth and 8% operating income growth on an underlying basis came on top of a very strong Q3 last year. So with the expectation that we will finish the year along the lines of what we've guided today, I believe we will have recorded another excellent year of underlying growth and business progress at the company. One of the things that makes our underlying results stand out in my view is that they compare quite favorably to those we observe across our industry. And this has been a consistent reality over the last many years. One of the reasons for our differential underlying performance, I believe, is that Brown-Forman is uniquely well positioned through our American whiskey leadership and our ownership of the Jack Daniel's brand, which itself gives a superb geographic breadth, diversification and continuing opportunity. In our communications with you over the years, we've discussed an aspect of American whiskey that I believe is particularly unique. It is simultaneously enjoying the desirable attributes of both mixability and premiumization. Most often in distilled spirit categories, these two dimensions are observed as mutually exclusive. If you consider the two largest multi-country categories in the spirits industry by volume, and that's Scotch and vodka, this point is made rather clearly. Within Scotch, we frequently see leading trademarks positioned very successfully at many price points spanning from standard to luxury, and each case utilizing the same trademark name at each of the price points. Within vodka, the leading trademarks have not exhibited the same vertical agility. The leading brands at each successive price tranche in vodka typically carry a different brand name. By contrast, however, vodka has shown tremendous horizontal agility, if you will, through flavored vodkas and premixed RTDs which provide consumers with a broad range of flavor options for the consuming occasion. Scotch, on the other hand, has had little success extending their trademarks along the same flavor or mixability dimension. But uniquely within American whiskey and best evidenced by our own Jack Daniel's, the category's brands have shown the ability to be successful along both of these attractive dimensions within the same trademark. Let me give you an example of this. On the mixability and flavor front, Jack Daniel's is enjoyed today in a more varied fashion than its Scotch-whiskey competition through everyday mixed drinks like Jack and Coke, premium convenience offerings like Jack Daniel's RTDs, and proprietary flavored whiskey expressions like Jack Daniel's Tennessee Honey and our new Jack Daniel's Tennessee Fire, which is currently rolling out in the United States. At the same time that Jack Daniel's enjoys this consumption variety through its inherent mixability, the brand's reputation for crafting the finest American whiskeys is evidenced through the success of brands like Gentleman Jack and Jack Daniel's Single Barrel, two trademark expressions that have become sizeable brands in the ultra-premium American whiskey segment. In fact, these two brands figured prominently in a milestone Brown-Forman celebrated during our most recent quarter. For the first time, the combined 12-month volumes of Gentleman Jack, Jack Daniel's Single Barrel, and Woodford Reserve eclipsed 1 million cases. Beyond being our company's shining illustration of premiumization within American whiskey, these brands also represent a very valuable, ultra-premium whiskey business for Brown-Forman today given their attractive profitability, returns and growth rates. Now as nice as this 1 million case milestone is to recognize, just as exciting is the fact that the ultra-premium-plus price segment of American whiskey is still at a very early stage of development. Contrasting this price segment of American whiskey to the equivalent one in Scotch whiskey, we observed that this highest end represents only 2% to 3% of total American whiskey retail dollars, whereas the same price segment accounts for over 30% of total Scotch. So on a share of category basis alone, there is a 10- to 15-fold opportunity for the highest end of American whiskey if it can develop as ultra-premium Scotch has. And to reinforce the point in a different way, in pure retail dollar terms, because Scotch is so much larger than American whiskey, the highest end of Scotch today represents a segment that is more than 35 times the size of the American whiskey equivalent. Any way we view the data, we see this as an enormous long-term opportunity for Brown-Forman within the category that is most important to us and that we know best. So the brand-building capabilities our people have demonstrated in achieving this first 1 million case milestone will be the enabling factor as we strive for the next 1 million cases. And while my focus today has been on this one particular ultra-premium whiskey achievement, we also intend to apply these same capabilities to the significant opportunities we envision for other premium-plus brands such as Herradura, Sonoma-Cutrer and Old Forester to name just a few. The highest priority for our time and capabilities, however, will remain the responsible globalization and development of the Jack Daniel's Black Label brand as we continue to build its mixability and premiumness. Jack Daniel's Black Label is the foundation of the Jack Daniel's trademark overall as well as Brown-Forman's most meaningful growth opportunity for the foreseeable future. This concludes our prepared commentary this morning, and we're now happy to take any questions you might have.

Your first question comes from the line of Vivien Azer with Cowen. Vivien Nicole Azer - Cowen & Co. LLC: Hi. Good morning. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Hi, Vivien. Paul C. Varga - Co-Chairman & Chief Executive Officer: Hey, Vivien. Vivien Nicole Azer - Cowen & Co. LLC: So my first question has to do with the depletion trends in the quarter. It looks like they slowed a little bit, but I see that that's on a tough comp. So could you dive in a little bit more in terms of the depletion trends specifically for 3Q, please? Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes, Vivien. I think the way I would look at that – if you looked at our first quarter trends, I think they were a little bit softer, you're right. Q2 was a little bit stronger and Q3 is a little bit down versus Q2, but I think it's all relative to last year. So really, if you look at where we were through the first half, we were at 2%, we're still at 2%. So I don't really see a slowdown. I think it's really – can't really look at one quarter in isolation. If you will, in fact, I see improving trend, particularly in the U.S., we experienced some nice acceleration there. So I think a lot of what you're seeing is simply a difficult comps that I was referring to in my script and we also alluded to in our earnings release as it related to some buy-ins last year in Poland. But we are not seeing – I don't view it as a slowdown. You're going to see these one-off things happening when you look at quarter-to-quarters. Vivien Nicole Azer - Cowen & Co. LLC: That's very helpful. Thank you very much. Jane, you mentioned in your prepared remarks that Fire continues to track well relative to Tennessee Honey. At your Investor Day you indicated it was about 1.35 times. Can you give us a little bit more detail on how the trajectory has evolved as you've kind of included five more states in this comparison? Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes. So, just to reiterate how encouraged we are about what we are seeing and how excited our people are, the trade is and the consumer wanting and excited about seeing a super-premium cinnamon brand expression from Jack Daniel's. So, you're right, we did talk about the early test markets back at our investor conference. We are not seeing a slowing. We have continued to see somewhere in the 130% to 140% indexing. So, we've not seen it slow down, if you will. It's maintained and we're very encouraged by that. With that being said, these are uncharted waters for us a bit, given that it is a higher price offering versus what the category price point is that already exists. But nonetheless, we're very excited. We just started shipping our first cases out a couple weeks ago to the remaining 42 states, as I've said earlier. So, time will tell, but we're very, I think, very positioned well. Paul C. Varga - Co-Chairman & Chief Executive Officer: Yes. I mean the trade reaction so far is, if anything, because there was some pent-up demand. I'd say the national rollout is being received with as much or even more enthusiasm as the original test markets were. And the thing that's so interesting when you go national is your ability to use things like media, the ability for social media to help you, I mean, this brand – I would give you one sort of that I thought was an interesting thing I heard in the last month on this that the Jack Daniel's Tennessee Fire Twitter followers have already eclipsed the Jack Daniel's Tennessee Honey followers. And so while it's too early to know how the actual consumer acceptance in terms of real purchases in the marketplace will unfold, what we've seen so far both at trade and consumer on this is really encouraging. Vivien Nicole Azer - Cowen & Co. LLC: That is very good news. My last question, just in terms of the acceleration that you're seeing in the United States, can you talk about the balance between on- and off-premise? I think you guys pointed to some improving trends in on-premise last quarter, so I'm curious if that's continued. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes. I could talk a little bit and Paul can chime in. Paul C. Varga - Co-Chairman & Chief Executive Officer: Yes, sure. Jane C. Morreau - Chief Financial Officer & Executive Vice President: I think the latest NAFTA information through January indicated that the on-premise trends continue to accelerate, both overall spirits is up and Brown-Forman we're leading the overall spirits. So, Jack Daniel's itself continues to improve as well. I think we're up about 2% in the on-premise. It's up a point, about 0.5 point over the prior month, so we continuously since about last March or April have seen a continued improvement in overall trends in the on-premise, and it's impacted favorably our brands. I will say when I look at our brands, Old Forester is our fastest-growing on-premise brand by a long shot, but we've got a lot of other brands that are growing quite nicely in the on-premise too. Woodford Reserve, el Jimador, they're growing very, very strongly. Gentleman Jack is doing well. So the trends are improving. We'll see what kind of weather you guys are predicting there today, but we're predicting more snow here today. So, remember, last year the winter was quite bad. And I know the month of February has been dicey around United States. But we think we've got a couple more months of soft comps depending again how the weather goes over the next couple months. Paul C. Varga - Co-Chairman & Chief Executive Officer: Sure. And those are, of course, U.S. comments. We don't have as great a visibility and timeliness on international on-premise. But it's been our experience here that with the places where these economies have been difficult, the on-premise along with some of the off-premise has continued to show some weakness. But I would say that even though the on-premise is improving, the strength, particularly of this U.S. off-premise environment as spirit brands and I'll say premium spirit brands are very much affordable luxury still. And so if you just compare for drink the outlay by the consumer for either a bottle of Jack Daniel's or Woodford Reserve as compared to many other entertainment alternatives stacks up quite nice. So, I think the off-premise continues to really driving the U.S. market and not to diminish the impact of a recovering on-premise. But, at least our read of the last 12 months of U.S. distilled spirit sales, driven in great part by our core category bourbon and American whiskey has upticked a little bit. Vivien Nicole Azer - Cowen & Co. LLC: Terrific. Thanks very much. Paul C. Varga - Co-Chairman & Chief Executive Officer: Welcome.

Your next question comes from the line of John Faucher with JPMorgan.

Yes. Good morning. I apologize. I got a little confused in terms of the impact in France vis-à-vis the impact in Poland. Were they similar impacts? And with all of that in the most recent quarter. Is that the way we should look at that? And so that's more of a housekeeping question. And then sort of a longer-term question, Paul, you talked about being single source and that's been a huge advantage for you, allows you guys to build scale, what have you. But U.S. base manufacturing cost could provide a little bit of pressure over the next several years if we continue to see strength in the dollar. So, can you talk a little bit about how you guys are looking at that? If we do have a stronger dollar longer term, what you can do in place to offset some of the transactional FX impacts that you guys expect to face? Paul C. Varga - Co-Chairman & Chief Executive Officer: Sure. I'll tackle that while Jane considers your first question here. Yes, these are always tradeoffs, to be a single-point producer in the United States at the time of a strengthening dollar, yes, I mean it's all these tradeoffs. I will tell you it's better to be positioned at the very high end of a market versus low end when that's happening because proportionately the FX impact is less on your profits. And so I feel like net-net when you balance it all out, the efficiencies – and we've been well-served over these years – by the single point production and efficiency and, frankly, also just the importance of that home place and the imported status that's conferred to Jack Daniel's as an imported American whiskey when it leaves the shores of the United States have all been very important to the brand's development over the years. So I think there's both efficiency reasons but you asked the question if there are also some marketing ones. I do think there are things that are implied in some ways even more indirectly than directly as the dollar strengthens. I mean I think the most significant is, at least the way I think about it, and there might be a big rationalization here. But if you think about why the U.S. dollar has been strengthening, one of the contributing factors is the strength of the U.S. economy relative to other countries. And the way I look at it, we happen to have the good fortune of having, that's our largest country. It's the most valuable distilled spirits market in the world. It's our home country, which we know very well. And it also happens within our industry to be one of the most exciting times for our core category. So I know this might be a very simplistic way of thinking, but the way I think about it is, as it relates to things – everything is resource allocation or innovation or the way that we think about developing our business at the time when the U.S. dollar is strong is make sure you're maximizing the opportunities available to you in the United States market is one thing. And so that's one of the ways in this past year we certainly have upped our investment behind Jack Daniel's. You've heard us talk about the introduction here of Tennessee Fire, which is an innovative effort. I emphasized very strongly here the ultra-premium whiskeys, which have the predominant presence for them. The largest market in each one of those cases is the United States. So, I think it's a reminder to all of us, as Brown-Forman's managers, to really make sure you're doing the best possible job you can and the market's attractive that is in some ways causing the dollar to strengthen. And that's different than – I mean it's certainly – if you're a U.S.-based company, it's a wonderful time to either be making acquisitions in Europe or to be borrowing in European denominations, those kinds of things, but those alone aren't a reason to go do it. They increased, I think, the benefits of timing as you think about it. But I think the biggest takeaway is for us is to make sure we're doing the best possible job in the United States. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Okay. I'll follow up on your housekeeping questions. Let' see. I see France and Poland as two different things. The reason why we illustrated France for you was because it impacted our third quarter only reported results. So we're providing a reconciliation understanding between reported and underlying. So, with the reported aspect, Poland on the other hand has been something that has hurt us all 2014, following the excessive or huge significant tax increase taken last January 1. And as a result of that, it's been a market that has impacted our comparisons all year long, and we do expect easier comps as we go into the fourth quarter. That's a impact on our underlying results and that's why I isolated Poland as it related to our discussion. I hope that helps.

That does. But does that mean that the impact would be impacting Q3 the same? Did they offset each other generally and understanding the differences between the situations. Was there a rough offset between the two countries in the third quarter specifically? Jane C. Morreau - Chief Financial Officer & Executive Vice President: No. No. And again, one was on a reported basis and one is an underlying. France did not impact our underlying results. Paul C. Varga - Co-Chairman & Chief Executive Officer: Yes. The impact is...

It's not reported. Paul C. Varga - Co-Chairman & Chief Executive Officer: Right and...

Poland... Paul C. Varga - Co-Chairman & Chief Executive Officer: Yes. And the impact in France that we've highlighted, I think if I've got it right, would be larger than the direct impact that you were citing for the underlying in Poland, don't you think. I think as it relates to – even though one is an underlying and one is in the reported that there was a significant – in terms of estimated net change and distributor inventories, there was a six-point quarterly impact on France. And I don't know, the Poland impact was six points at the underlying. Jane C. Morreau - Chief Financial Officer & Executive Vice President: And the impact from emerging markets. Paul C. Varga - Co-Chairman & Chief Executive Officer: Emerging markets, yes. Jane C. Morreau - Chief Financial Officer & Executive Vice President: That's right. Paul C. Varga - Co-Chairman & Chief Executive Officer: Not the corporation. Yes.

Okay, great. Thank you very much. Paul C. Varga - Co-Chairman & Chief Executive Officer: Thank you.

Your next question comes from the line of Judy Hong with Goldman Sachs. Judy E. Hong - Goldman Sachs & Co.: Thank you. Hi, everyone. Just following up on Poland, I guess I'm curious to hear more about the underlying trends. I think, Jane, you had talked about last quarter where obviously the shipment numbers that you've been reporting has been impacted by the inventory movement, but the underlying trends were starting to improve, so just wanted to understand if that's continuing in the back half of the year. And then as it relates to the fourth quarter sales guidance, obviously, you're expecting pretty sizeable acceleration, the comps are easier but just in terms of thinking about some of the underlying trends, are you expecting any sizeable improvement in some of the markets. It sounds like maybe Tennessee Fire is adding about a couple of points to sales in terms of pipe fill. So, can you just verify that number and is there any inventory movement that we should be thinking about as it relates to the fourth quarter? Jane C. Morreau - Chief Financial Officer & Executive Vice President: A lot there, Judy. Paul C. Varga - Co-Chairman & Chief Executive Officer: I mean talk about (33:28). Jane C. Morreau - Chief Financial Officer & Executive Vice President: Let me talk about Poland. Paul C. Varga - Co-Chairman & Chief Executive Officer: Yes, you're ready on Poland because I could answer the last one, if you wanted. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes, I can start on Poland. And what we are seeing there and continue to see as it relates to the premium whiskey in the Polish market as well as Jack Daniel's from an underlying takeaway trend perspective, we see accelerating results. So, I'll just give you one example. The premium whiskey are growing 33% in Poland market on a three-month basis, up from 25% on a 12-month. So, similarly, Black Label is growing 13% on three-month, up 9% on a 12-month, so you can see the acceleration there. And, again, the excise tax as a comparison impacted the difficult comps that we've been talking about all along, it impacted both Jack Daniel's, Black Label, Finlandia, so neither brand has been growing at the takeaway trend rates that I'm showing here. The takeaway trends for Finlandia are much better than what we're seeing in our current results as well. So, 12-month trends are running 3% and we're down right now year-over-year, again. So, that gives you a little bit of flavor that the takeaway trends that consumer is taking, it's working its way through all the inventory and the adjustments from the excise tax a year ago. So, does that help on Poland? Judy E. Hong - Goldman Sachs & Co.: Yes. And are we done with all the inventory destocking that needed to get cleaned out? Jane C. Morreau - Chief Financial Officer & Executive Vice President: On Poland? Judy E. Hong - Goldman Sachs & Co.: Yes. Jane C. Morreau - Chief Financial Officer & Executive Vice President: It will be. Yes, that's behind it. Paul C. Varga - Co-Chairman & Chief Executive Officer: For purposes of comparison, we hope there's no more... Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes. Paul C. Varga - Co-Chairman & Chief Executive Officer: ...excise taxes there. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes, exactly. Paul C. Varga - Co-Chairman & Chief Executive Officer: But we always have the trading pace. But as it relates to what we're guiding today, yes. So, and then, Judy, I think the other question you had there was what are the components that give us the confidence, and you cited all of them. I'll just comment in a general way. The biggest thing are these soft comps that relate to, for example, Poland and Europe that we feel that where in Q4 last year that we do expect and would, as part of our guidance for the United States to continue to accelerate along the lines of what we've been saying. So not only is the industry and the category, but also our business has been accelerating. So, it's with that expectations that'll continue through the fourth quarter. And we think we've got the right sort of I think investments in programming and system effort around that to accomplish what we want. And then you mentioned the other one, which is Tennessee Fire. And then Tennessee Fire, in addition, which is – this is the U.S. comment. Its introduction to the United States on a national level is the other contributing factor that we would be incorporating into that acceleration. So those are the main three components that would be soft comps, U.S. acceleration with some Tennessee Fire on top of it. You also asked, would that create any inventory things, and the only inventory things and I think Jane might've highlighted a little bit would be on Tennessee Fire pipeline because you will shift some in, of course, on a national launch in advance of the depletion. And so there might be a little there, but otherwise we're expecting inventories to largely be in balance at the end of the year. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes, no different really from where we are. Judy E. Hong - Goldman Sachs & Co.: Okay. So, just to clarify on Fire because you had called out $0.02 of EPS benefit related to pipe fill in the fourth quarter. So, I guess that implies roughly 1.5 points to 2 points of sales impact that potentially would come... Paul C. Varga - Co-Chairman & Chief Executive Officer: (37:02). Jane C. Morreau - Chief Financial Officer & Executive Vice President: On a reported basis. Judy E. Hong - Goldman Sachs & Co.: On a reported basis. Okay, that makes sense. But that's not included in your underlying sales growth guidance. Jane C. Morreau - Chief Financial Officer & Executive Vice President: The impact on our underlying full-year impact is less than a 0.5 point, as I recall, less than that. Paul C. Varga - Co-Chairman & Chief Executive Officer: We're investing back behind the Fire launch. Judy E. Hong - Goldman Sachs & Co.: Okay. And then, Jane, just lastly on FX, I know we'll get obviously full year guidance for next year when you report next quarter and FX continues to be a moving target. But if I just take where the spot prices are today, I get to another $0.15 or so of negative FX. I just wanted to understand if there's anything missing in terms of hedging exposure or transaction that I'm missing as I calculate the impact as of today? Jane C. Morreau - Chief Financial Officer & Executive Vice President: The only thing that I would say, as I've been trying to explain as we've talked the last two quarters about, transactional and translational FX, so the translational being attributable to our translating our foreign denominated net current assets back to the U.S. dollars. Assuming the spot rates stay where they are today, we had a pretty significant impact. I talked about I think it was $22 million, $23 million that's showing up in other income and expense line item. I would consider that one-time in nature, if you will, if the spot rates stay where they are. So that would not repeat itself next year, if you're thinking about hits of FX from this year. So that would be a favorable comparison, if you will, next year. Judy E. Hong - Goldman Sachs & Co.: Okay, thanks. Got that. Jane C. Morreau - Chief Financial Officer & Executive Vice President: That's the only thing right now I would say. Judy E. Hong - Goldman Sachs & Co.: Yes. Understood, okay. Jane C. Morreau - Chief Financial Officer & Executive Vice President: In terms of just how we hedge, and I think we've discussed that before our hedging philosophy and how we roll in our hedges actually over time. Judy E. Hong - Goldman Sachs & Co.: Right, right. Okay, got it. Thank you very much. Jane C. Morreau - Chief Financial Officer & Executive Vice President: You're welcome.

Your next question comes from the line of Bryan Spillane with Bank of America.

Hey. Good morning, everyone. Paul C. Varga - Co-Chairman & Chief Executive Officer: Good morning. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Good morning.

Jane, just two quick questions relative to the quarter. One, I think you said that underlying SG&A was up 6% in the quarter. Did you give us what underlying advertising was up or down in the quarter? Jane C. Morreau - Chief Financial Officer & Executive Vice President: 4% in this quarter, I believe. Hold on, let me double check that. I'm sorry.

Yes. Jane C. Morreau - Chief Financial Officer & Executive Vice President: It was up 4% in the quarter?

Up 4%. Paul C. Varga - Co-Chairman & Chief Executive Officer: 3%. Jane C. Morreau - Chief Financial Officer & Executive Vice President: 3%. I'm sorry. Paul C. Varga - Co-Chairman & Chief Executive Officer: That's 3%. 4% year-to-date. Jane C. Morreau - Chief Financial Officer & Executive Vice President: 3%, 4% year-to-date. Yes.

Okay. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes.

And then second question, just I seem to recall from the 2Q earnings call that underlying sales growth was 7% and the expectation was that it had accelerated to 7% and it wouldn't move from that. So, I'm just trying to understand was the third quarter a little bit light relative to what you were expecting, or was that comment about you don't expect to get – you expect to hold that or get better, more of a comment of what you were thinking over the second half instead of specifically the third quarter. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yeah. Actually, Bryan, that's a great question, and what we were referring – what we said was with the back half, not – we weren't giving quarterly guidance, so we were saying we were expecting the back half to not – to go down, if you will, or to change. So, I think, the third quarter was largely in line with what we expected. We knew we were going to have difficult top-line comparisons to last year where we had a really strong third quarter, growing top-line 8%. So, our comment was more as it related to the back half. Paul C. Varga - Co-Chairman & Chief Executive Officer: Yeah. Overall, I think sort of met our expectations. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yeah. Paul C. Varga - Co-Chairman & Chief Executive Officer: I mean you can find a few of the places around the world, we would've hoped for more, but actually I think the U.S. actually surprised us on the upside a little bit from that point of view. So, but I think we're sticking to what we basically said back in – at the Q2 call as it relates to the back half.

Great. Thank you. Jane C. Morreau - Chief Financial Officer & Executive Vice President: You're welcome. Paul C. Varga - Co-Chairman & Chief Executive Officer: You're welcome.

Your next question comes from the line of Tim Ramey with Pivotal Research.

Thanks so much. Just skipping from kind of the macro negative of FX to what seem to me to be a couple of meaningful macro positives, gas prices and travel retail. Can you talk about – I mean I do recall hearing those as negatives on the way up. Are you starting to see benefits in – perhaps on-premise or travel retail segment. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yeah. So, we have – as I discussed a little bit earlier, mainly it was all around the U.S. but we do continue to see on-premise trends for our brands continuing, growing in the low single digit. So overall, we do think there has been – if you look back in when this deceleration began, there seems to be a correlation between when gas prices started going down. So, people perhaps, having a few extra pennies in their pockets to buy this affordable luxury, if you will. As it relates to travel retail business, we've actually had mixed results there, I think. We're seeing parts of the world doing very well, but places over in Europe, largely around Russia, our European operations because of the disruption going on in that part of the world and the number of consumers from Russia actually is a large percentage that actually purchase in the European market has been a little bit lighter than we would have had hoped for. And so, but we have seen good at certain parts – certain travel retail markets around the world, and I hope, that due to gas prices, and more affordable. But it's hard to say, I'd tell you, with FX and where people are coming from and how that may be way more than offsetting gas prices other than the consumers in the U.S., I think, is probably a larger trend to pay attention to. Paul C. Varga - Co-Chairman & Chief Executive Officer: Yeah. As it relates to the U.S. market, I don't – I mean, I don't have any specific data on this, but I do know anecdotally that we might even have stronger on-premise U.S. numbers, if particularly European tourism wasn't being hit by the strong dollar. I mean, actually, we've heard restaurants and we know from hotels and places like that that they're not as buoyant as they were six months or eight months ago. So, I mean, those are – all these things have offsets to each other as you go around the world for Brown-Forman. It's one of the benefits that we accrue from having such nice geographic diversity. But I think net-net for our business around the world, low gas prices are a help net-net and of course, they should be a help over – if they – particularly if they stayed down for quite some time, they would be a help too you'd expect in like fuel costs and energy and things like that make their way in. And – but on the flip side, what ends up happening is for a company like us, you end up having negative foreign exchange impact with it. So, these things offset each other in some ways, partially or not. But I will say this, we do spend some time looking at what foreign exchange rate indices look like. And I mean, I would note that I think the last time we looked at it, the current index is, the dollar is stronger than its sort of 20-year average and it always fluctuates above and below that average, of course. But this would be a particular time of strength. So, for those who are thinking about how much more will this run or how long, if you believe history at all, the U.S. dollar is at a stronger point than its historical index would indicate.

Perfect. Thanks. Paul C. Varga - Co-Chairman & Chief Executive Officer: Welcome. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Welcome, Tim.

Your next question comes from the line of Ian Shackleton with Nomura.

Yeah. Good morning. Two questions. Firstly, within the emerging markets, the commentary on Russia actually appears more positive. Now I remember you had some specific issues in Russia. Are they all now resolved now? And the second question was around the Investor Day in December, you did talk quite a bit about Scotch and Irish whiskey being attractive categories to go into. Is there any update you can provide us on that at this stage? Jane C. Morreau - Chief Financial Officer & Executive Vice President: I can talk about Russia real quick. We are pleased with Russia in terms of the total (45:57) – they're doing pretty well. There, we had a net sales growth of around 6% I think, year-to-date through nine months versus being hurt by the devaluation of ruble. But specifically, as it relates to our ability to sell our products and reach the consumers, and have things been up there, if you will, we're very encouraged by what we've seen and so, like we're able to sell our product in the marketplace at this point in time. Paul C. Varga - Co-Chairman & Chief Executive Officer: Yeah, Ian. And I think you are correct in your recall of our interest particularly I'd say in the – at the ultra-premium, super premium-plus segments of those particular categories. And I mean no real news to update you on other than to say we remain as excited about that as we study those marketplaces, and the continuing development of them. I mean, it's only been a couple months since we saw you in December, so I would say this, the only thing that might change is for a U.S.-based company, if you can find attractive properties in either one of those, it's even more attractive because of the currency, as I mentioned. And the detail probably from that initial comment that we really think and – I highlighted American whiskey, but we really think the premium end of whiskey is a very attractive place to play. I mean amongst the most that you can really find at, to be quite honest with you, not only within our industry, I just think it is an enormously attractive and valuable business, when you contrast it to many other industries. So, if you want to find the most attractive, then advisable investments you can make there, so we're scanning that as we – as you would expect us to.

So, just going back on Russia, because there was some sort of a boycott there by – has that all gone away, if I recall correctly? Jane C. Morreau - Chief Financial Officer & Executive Vice President: A boycott on our product, is that what you're saying?

Yeah. Yeah. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yeah, we had... Paul C. Varga - Co-Chairman & Chief Executive Officer: We had some administrative labeling things in a particular region of Russia that temporarily disrupted our sales into accounts there on Jack Daniel's Tennessee Honey. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Honey. Paul C. Varga - Co-Chairman & Chief Executive Officer: And it was, what was that? So, it was a very small part of Brown-Forman's total Russia business. And there's been some – I think, some generally positive administrative developments on that front. So, I would say things as it relates to type of larger question on Russia for us is just the impact of all of this on their economy, more so than what we would declare as any kind of administrative problems or trade restrictions or those kinds of things. It's really right now more of the impact on the economy.

Very good. Thanks for clarifying that. Thank you.

The next question comes from the line of Bill Chappell with SunTrust.

Hi. This is actually Stephanie in for Bill. My question has to do with advertising and if you could provide either on a reported or underlining perspective more details on what you expect next quarter, particularly with the launch of Tennessee Fire. And then just kind of going off of that, what you expect in terms of kind of – or what you're seeing with your competitors in terms of what they're doing for advertising? Jane C. Morreau - Chief Financial Officer & Executive Vice President: Okay. So, we are spending with fourth quarter – as you know, we're at 4% year-to-date underlying increase in net sales. We are going to expand to launch the brand quite nicely in the fourth quarter. So I would expect that number to pick up a little bit from where we are on a year-to-date basis for the – so, by the end of the year, the number will be more than 4%. I hope that answers that question. And then your other question is around competitors. And I can't really answer all the questions there in terms of what they're doing. They definitely – it varies by market, varies by brand... Paul C. Varga - Co-Chairman & Chief Executive Officer: And if I looked at a weighted average of our competition, we sometimes do try to study the difference between maybe their sales growth rate and their operating income growth rate as they guide. It looks to me like they – because they're – most of the industry, when you look at it, is growing at very low organic growth rate. And then when you translate to at least the way they're guiding as an operating income or EBITDA growth rate, it might be just a little bit higher, so it would appear to me that somewhere, I can't be specific to advertising, but somewhere between advertising and SG&A investment, they might be getting a point or may be 0.2 of leverage from whatever their reported – or whatever they are getting on sales. So a little bit of leverage but I can't imagine that people are in very strong investment mode or else it'll be showing up with a diminishment to operating income versus an increase. And so now, if you think about us, our fiscal year-to-date results are we've got 5% underlying growth rate and to-date it's 7% operating income growth, it's about two points of leverage between sales and operating income which is a little less than in some years in the past because we've been investing particularly in its brands rollout of the company over the last year. But that's in a way we're sort of guiding for the end of the fiscal year. That relationship sort of stays the same as you – even though we've got the soft comp and we expect a strong Q4, the relationship stays the same. So it would be my guess that we're investing today at the operating investment line ahead of most of the competition based on what I see from their numbers versus ours.

No, that's really helpful. Thank you so much.

Your next question comes from the line of Eric Serotta with Evercore ISI.

Hi. Thanks for taking the question. I'll try and keep this quick. Two questions. First, last quarter you highlighted some distributor inventory overhang that was still left from, I guess, going back in the first quarter in the U.S. and Germany. What was the impact of that reduction in the third quarter? And is that all behind us? And then the second question is in terms of how we should think about U.S. pricing going forward. Clearly, this year was one of much more constrained pricing in the U.S. following several years of robust pricing. I know you're not giving fiscal 2016 guidance yet, but conceptually, should we think about next year looking more like this year or more like previous years, somewhere in between? Any help would be greatly appreciated. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Okay. I'll talk to the distributor inventory for Germany as well as the U.S. It is behind us. It largely came through in the third quarter. I think we had isolated about a point of impact when we talked about it in the second quarter in terms of what it was impacting our overall results. Tom, you get your third quarter because we've got another quarter underweight with less than that on the quarter in terms of the overall impact to our growth, okay? Thomas Hinrichs - Senior Vice President & President-Europe Region: Yeah. And I mean, just on pricing, I mean, we'll get more specifically what our expectations are by the time we get out our Q4 release and set new expectations for F2016. But I mean, I think, one thing that would certainly be running through all of our math is where our core concentration is, which is more at the premium end of a category that has outstanding volume metric momentum right now. And I just really believe that you can be less aggressive with pricing when you're getting the sort of consumer interest and acceptance in bourbon and American whiskey like we're seeing. The high-end of this category is growing, I mean, strong double-digits, I mean the overall category is growing in the high-single digits in the United States. And so, I mean, I think, of course, all these will vary by region and country around the world as we go along. But I think it was the right move for the company with the momentum and sort of enthusiasm we were seeing around the category volumetrically to sort of, as you say, constrain the pricing progress in the way that we did in the last year and I think we're benefiting from it. So we'll be looking at that here over the next eight weeks or so as we set our plan and give you more information on it specifically when we get into sort of F2016 guidance.

Great. Thanks a lot. Thomas Hinrichs - Senior Vice President & President-Europe Region: You're welcome.

Your next question comes from the line of Bill Schmitz with Deutsche Bank.

Hey. Good morning. I'll also try to be quick here. Can we just talk about pricing on two fronts? The first is in emerging markets, when we have to take pricing in places like Russia and some of the other markets there where currencies has been such a big impact, and do you expect any big pre-buying ahead of those price increases and maybe, directionally how high they are? And then I just have a follow-up on how you priced Tennessee Fire relative to Fireball? Jane C. Morreau - Chief Financial Officer & Executive Vice President: So, to talk about emerging markets, firstly, I think, I must step back for a moment. Because FX is hurting us, it doesn't necessarily mean that we're going to take the price up to the consumer and the market. So it's something that we look at on a market by market basis. So I wanted to make sure that that was clear, we aren't going to jerk our prices up and down as FX goes up and down.

Okay. Sorry, you're not going to offset like even in Russia where you have like a 50% devaluation. Jane C. Morreau - Chief Financial Officer & Executive Vice President: No. Russia is an unusual one because this has been so significant for sure. Again, we look at these on a case by case basis and we have already went through a price increase there. And talk about buy-ins and stuff to move our needle, there hasn't been anything to move the needle that would warrant you to put something in your model as a place to (56:38) that. Paul C. Varga - Co-Chairman & Chief Executive Officer: Yeah. And remember we look not only at what the currency is doing in those instances, but you really are also looking at what your competition in the marketplace is doing. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Got you. Paul C. Varga - Co-Chairman & Chief Executive Officer: As you can imagine, that's a pretty dynamic consideration. But it's rare for us, I mean it's sort of rare for the currency to move like this rapidly as it has in Russia. But it's unusual for us, as Jane was citing, for us to start to make pricing moves based particularly on more moderate fluctuations in currency. And then your second question related to Jack Daniel's Tennessee Fire pricing philosophy.

Yeah, like relative to Fireball and I probably should know this but I don't think Fireball advertises at all, so I mean, when you guys go out would you have roughly 100% share of voice when you launch this thing? And kind of what kind of advertising are you going to do and how are you going to build trial? Paul C. Varga - Co-Chairman & Chief Executive Officer: It all depends on how you define advertising. I would say that they have an enormous presence in social media and I, today, I consider that very much advertising. So, I mean, if you're talking about television advertising on cable networks or whatever, I haven't observed any. But to the gist of your question, I think first and foremost, we priced Jack Daniel's Tennessee Fire off of Jack Daniel's Tennessee Whiskey. I mean, that is what's the foremost consideration and our price positioning for that, for a variety of what I consider to be very good reasons. Now, we're not ignorant of where the marketplace falls out in terms of pricing and volume metrics and all that, but we've really wanted to enter this category as the premium, also in this case super premium entrant in the cinnamon-flavor segment. And I consider that to be a pretty important part of our marketing program and something that I know our people consider very important and they'll stick to. And so far, what we've seen in our experience on Tennessee Honey with this, where they are today, lower-priced competitors and have been is that those prices have held up very well. And just to let you know, we have no internal designs or ambitions to do anything volumetrically that would compromise that price. So, we're not sending some internal ambition to be the number one brand by volume or anything else. It's really to build a responsible business that's super-premium and this particular opportunity and to, along the way, be really responsible in the way we manage the Jack Daniel's trademark. And actually, I just think our people have demonstrated the capacity to do that so well that we really don't worry about it that much. The better thing for us to focus on is these early stages of distribution in creating the awareness. And I would tell you that I don't know – we're still sort of were planning how we'll communicate on behalf of Jack Daniel's Tennessee Fire over this first year of its national launch. But I would expect social media just because of the importance of it to the brand's target audience but also just Jack Daniel's prominence and as a trademark and social media would be very important, Tennessee Fire as well.

Great. That's very helpful. Thank you. Paul C. Varga - Co-Chairman & Chief Executive Officer: You're welcome.

Your final question comes from the line of Mark Swartzberg with Stifel Financial. Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc.: Yes. Thanks. Good morning, everyone. Quick technical one on the quarter, and a few on the revenue outlook. On the quarter, did I hear you, Jane, say – I don't think I heard you right, are you saying FX you think that means the EPS will actually be down in the fourth quarter? And then like I said, I have a few revenue questions. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Yes. Just to clarify, the FX will hurt us in the fourth quarter. Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc.: Sure. Sure. Jane C. Morreau - Chief Financial Officer & Executive Vice President: So it will result in our reported numbers from underlying because we – I said, we will be up on an underlying basis in the teens. And I'm saying, we won't be up strongly on a reported basis. That's what I was implying because of FX. Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc.: Right. Right. Okay. You didn't say reported down. Okay. Great. I just needed to clarify that. And then on the revenue outlook, I guess a few things. Firstly, Paul, with ad spend, it's lagging sales a bit year-to-date. Can you just update us on how that relationship you think looks for the full year and from a longer-term perspective? And then with the quarter itself, you're looking for pretty healthy acceleration, Fire is going to contribute to that, I think 9% is the minimum number to hit your full year rate of growth. Can you just talk about how you think about trade inventories in the U.S. specifically, what your attitude towards them potentially increasing is putting aside the effect of Fire? I guess those are my two revenue related questions. Paul C. Varga - Co-Chairman & Chief Executive Officer: Okay. I mean, I guess I'll answer the second question first. As we said earlier in the call, we expect our inventories particularly if you exclude Fire at retail to be very much in line with our historical days of inventory around the globe. So no excessive building or diminishment either way. So I think it's a sort of normal course there. I would say on that point, I mean, it's always a swing factor as to how well received in the first sort of 60 days here. So Tennessee Fire's national launch, how much – just not only distribution, we expect that to be pretty rapid because the trade enthusiasm is so high, but also, then, it always comes down to how much display activity and promotional activity you get around that. So you hope for a nice piece of that and you would expect that the enthusiasm to convert to that, but that's a harder one for us to predict as it relates to what the April 30 retail inventories will be on really new brands. So I hope that helps you understand how to approach this. Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc.: Yeah. Yeah. Paul C. Varga - Co-Chairman & Chief Executive Officer: Otherwise beyond the Tennessee Fire, we expect it to be pretty normal course as it relates to days of inventory at retail. And your first question related to – I'm just going to repeat it to make sure I got it right because we had a little bit of a broken communication here. You just want to see if there was a relationship between the way we think either historically or philosophically on A&P investment as a percentage of sales. Am I reading that right? Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc.: Yeah. Basically, like last fiscal year, it grew faster than sales; this fiscal year it's lagged sales slightly, but just how you're thinking about it going forward? Paul C. Varga - Co-Chairman & Chief Executive Officer: I mean going forward – I mean, look, I think here's the way we've been and we talked about this over the last couple of years. I mean, I really feel like we've been at a significant level of reinvestment in the business over the last 36 months and it has come in three forms really. It's been A&P, what I would consider to be because our results have warranted it, and the A&P in fact is supported, have been ahead of our competition. And in some instances, you always have pockets where you have an opportunity to invest more, one example being the Jack Daniel's Black Label this past year in the United States, we upped our investment there. So, there's always pockets, and we were also at the same time, and I would highlight this last 18 months or so as it relates to France and the investment in route-to-market and before that, we were investing in Germany and Turkey and all kinds of places, we were adding at the SG&A line and the third area which isn't showing up in the as much right now is the capital investments we've been making to get the company ready for the growth we foresee out many, many years into the future. And those have been investments at Woodford, Jack Daniel's, prior to that even at Sonoma-Cutrer. So, we've had a string of capital investments that's been continuing most significantly, Cooperage as well as we're one of the only barrel operator – manufacturers and operators. So, there's not a wave here of investment and still with that, we've been able to get nice leverage across the many years. And so, I continue to expect – I really do feel like we're at a point where, particularly some of the SG&A, that we can start to leverage some of the investments we've made and particularly, the route to market around the world. I mean, I have, over long periods of time, liked to see generally A&P that it doesn't, I'm not worried about it in one particular quarter or year per se to track along with sales. And I just think it's a nice thing. It all depends on the brand building model and I do think social media will make it more efficient, not less efficient to actually invest over time. But I would expect, after many, many years of very systematic and continuous investment that the company should still be able from sales to operating income to be able to get a little leverage. I mean, there were times in our history, I mean, I know way back, where there was very little leverage. It was up and down the P&L the same number, and in terms of growth rate. But I really do feel like this will vary by what time you're operating in too and how the economies are and everything else. But as we stand right now, I mean, I think we cited we are at 5% growth right now converted to 7% and investing nicely behind the business. And we see that elevating by yearend because of the soft comps and the things we've cited. But as you go out, I feel like we would be gaining share of voice with mid-single-digit even growth rates in A&P compared to our competition right now and that's my take. Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc.: It's a great comparison too. If I could, just one last one, your comments on U.S. pricing, I found very interesting because you enjoy premium positioning in your various brands versus your nearest competition, and you also enjoy volume momentum. So that seems to favor being more – seeking more rates of price rise not only to strengthen the long-term position of your brands but to kind of be – it's the time to do it, if you will, when volumes are doing well. Yet you're saying you want to have a comparatively higher focus on maintaining volume on that. Could you just talk a little bit about does it have to do with the inventory you've already got sort of ready to come on stream? Can you just talk a little bit about why you have that attitude, because it seems you could make the opposite argument for being more disciplined on price. Paul C. Varga - Co-Chairman & Chief Executive Officer: You absolutely can make the opposite argument depending upon how you approach it. But I'll use the example here. And we do know, look, with aged product, a dollar of pricing is more valuable mathematically if you look at it than perhaps a dollar of volume. But in an expanding category where people are fighting for consumption occasions and consumers, you don't want to lose some of these consumers because we have found people who adopt and fall in love with the brand, will actually continue some of that consumption. And so, it can be more costly later to try to get it but I'd give you the example of, here we've got a Woodford Reserve, just take that as an example. And let's say you, the brand is growing 25% or 30%, I guess we could consider that just taking your example to – a specific thing to consider here is I guess, we could take our prices up on Woodford Reserve, 10% or 12% and deliver the same dollars through a lower growth rate. I mean, you could do the math on that. But I feel like for brands at an early stage of development, introducing the brand because you're still at relatively low levels of awareness and adoption, to introduce the brand to consumers and at lower prices, not that we're lowering price, I mean, even at 25% or 30% growth rate, we might be taking 2% or 3% price increase. So it's not like we're not taking pricing. It's just that you're delivering – the volumetrics are a reflection of the adoption of consumerism around the brand. And if you've already started that in this case with Woodford an ultra-premium price position, I mean, if you had a significant shortage in your stocks or something, sure you could do a supply-demand trade-off there and you might find yourself in those circumstances if your forecast weren't particularly accurate but that's not the case with us. And so, I mean, I think introducing 30% more occasions or consumers to the base of Woodford Reserve is today on balance better than asking the current base to pay 15% higher prices and only attracting 10% or 15% people. I mean, that's just a trade-off. You can definitely make the other argument, but at this stage of development, with its base of awareness and distribution on a brand like that, I would favor the way we're doing it. Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc.: It's very helpful. Great. Thank you, Paul. Thanks, Jane. Paul C. Varga - Co-Chairman & Chief Executive Officer: You're welcome. Jason Koval - Vice President & Director-Investor Relations: You're welcome. Thanks for that question, Mark. And thanks, Paul and Jane. Thanks to all of you for joining us today for Brown-Forman's third quarter earnings call and we hope you all have a great week. Paul C. Varga - Co-Chairman & Chief Executive Officer: Thanks, everyone. Jane C. Morreau - Chief Financial Officer & Executive Vice President: Thanks.

Again, thank you for your participation. This concludes today's call. You may now disconnect.