Reynolds American Inc. (NYSE:RAI) Q4 2015 Earnings Conference Call - Final Transcript

Feb 11, 2016 • 09:00 am ET


Reynolds American Inc. (NYSE:RAI) Q4 2015 Earnings Conference Call - Final Transcript


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Good morning. My name is Sean and I will be your conference operator today. At this time, I would like to welcome everyone to the Reynolds American Fourth Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Mr. Morris Moore, Vice President of Investor Relations, please go ahead, sir.

Morris Moore

Good morning and thank you for joining our call. Today, we'll review Reynolds American's results for the fourth quarter and full year as well as our 2016 outlook. As usual, our discussion will include adjusted results as management believes this provides additional perspective on our underlying business performance. A reconciliation of reported to adjusted earnings is in our press release, which is available on our website at

Joining me this morning are RAI's President and CEO, Susan Cameron; and Andrew Gilchrist, our CFO.

The information we're about to discuss includes forward-looking statements. When we talk about future results or events, a number of factors could generate results that are materially different from our projections today. These factors include, but are not limited to, items detailed in our press release and SEC filings. Except as provided by federal securities laws, we are not required to publicly update or revise any forward-looking statements.

I'd also remind you that RAI's website is our primary source of publically disclosed news and that we also use Twitter to disseminate company news.

And now, I'll turn the call over to Susan.

Susan Cameron

Thank you, Morris, and good morning, everyone. I am absolutely delighted by our strong finish to what was already shaping up to be a remarkable year. RAI and all of our operating companies reported excellent results and the integration of Newport continued to go very well.

2015 was truly a transformational year for RAI and its operating companies. And we've started the New Year with significant momentum, especially in terms of returning value to our shareholders, a topic many of you are most interested in. Since the 1st of the year, we've taken three steps, in particular, that benefit our investors.

First, as we announced this morning, we're increasing our dividend by 16.7%. Second, we successfully completed the sale of Natural American Spirit's business outside the United States for $5 billion in cash. And third, we've recently announced a tender offer and redemption for the early repayment of some of the company's outstanding debt.

As we've said in the past, deleveraging is a priority for RAI and we're making good progress. And we're taking all these steps whilst still investing in our core businesses, as well as in innovations that are key to the success of our long-term growth and our transformation strategies.

Before I discuss our core business performance, I'd like to give you an update on the innovations front. As you know, we recently created the RAI Innovations Company, which is focused on product development and commercialization of leading-edge vapor and nicotine products.