Beam is off to a strong start as a stand-alone pure-play spirits company and before we get into the details of our strategy and performance, let me take a moment to recap the long-term goals we've set for this new business. Our goal at the top line is to grow sales faster than our markets, which we see expanding at a low to mid single-digit rate over the long term. We want to grow operating income faster than sales while targeting our long-term EPS to grow at a high single-digit annual rate and we aim to continue delivering strong cash flow and improving ROIC.As we consider these goals in our 2011 performance, we like where we are. Our comparable sales grew 12% in the third quarter and are up 10% year-to-date. At the OI line, Q3 operating income increased 4%, trailing our sales growth rate largely due to our strong double-digit increase in brand investment but ahead of our 2011 expectations. We delivered EPS growth of 13% in the quarter, benefiting partly from lower year-over-year interest expense resulting from debt reduction and we're now tracking towards the high end of our full-year earnings target range of high single-digit growth in adjusted pro forma EPS. And we continue to strengthen our balance sheet as we're on track for a year-end free cash flow conversion rate of 90% or better and a net debt to EBITDA ratio of 2.5x. Now looking closer at the third quarter. Beam delivered record third quarter sales that grew faster than our markets. We outperformed at the top line on strong global growth for our Power Brands, Rising Stars and successful new products. The quarter also benefited from a couple of one-off factors in the U.S. and Australia. In the U.S., our customers are finally able to build normal stocks of Skinnygirl as supply caught up with demand during the peak margarita season, thereby delivering a onetime benefit to the quarter.
In Australia, our new distribution model with Coca-Cola, Amatil, moved our sales from an agency relationship to a distributor model, which effectively brought some sales from the high-volume fourth quarter into Q3. Even before these timing benefits and the acquisition of Skinnygirl, we continue to outperform our low-single-digit market. Our investments in brand building and innovation continued to pay off in the quarter. Our Power Brands grew 11%, benefiting from very strong performance from some of our biggest assets such as Jim Beam, Teacher's and Courvoisier. Our Rising Star brands are sharply higher, led by continued strong growth from the Skinnygirl acquisition, which once again added to our overall share gain in the quarter as what has sustained double-digit growth to super premium brands such as Knob Creek Bourbon and Laphroaig Scotch.As anticipated, growth in the third quarter operating income was tempered by our increase of more than 20% in brand investment plus start-up costs related to new products. Beginning here in the fourth quarter, increases in brand investment were moderate to a rate more in-line with sales growth. Bob will take you through the numbers in more detail in a moment. But first I want to underscore how invigorated and passionate the worldwide Beam team is as we begin life as a stand-alone spirits company. We put together an organization that's built to win in the marketplace. It's a team that blends tremendous spirits industry experience with high performing talent from consumer packaged goods around the world. Together, our 3200 colleagues are highly committed to creating long-term value for shareholders. Fortune Brands completed the separation of its businesses on October 3 without a hitch. On October 4, Fortune Brands became known as Beam and began trading as a pure-play spirits company. As we discussed in our road show in September, a series of deliberate strategic decisions and investments over the past 6 years have positioned Beam very well for success as a stand-alone spirits company. First, in 2005 to '07, we transformed our portfolio doubling in size and we've added 11 of our top 14 brands in just the past 6 years. From 2008 to '09, we enhanced our reach to market, establishing a global distribution structure based on fully owned sales organizations and strategic partnerships, all of which brought us closer to our customers and consumers. Read the rest of this transcript for free on seekingalpha.com