Reynolds American Inc. (NYSE:RAI) Q2 2016 Earnings Conference Call - Final Transcript
Jul 26, 2016 • 09:00 am ET
Good morning ladies and gentlemen. My name is Sally and I will be your conference operator today. At this time, I would like to welcome everyone to the Reynolds American second quarter earnings conference call. [Operator Instructions].
Thank you. I will now turn the conference over to Mr. Bob Bannon, Vice President Investor Relations. Please go ahead, sir.
Good morning, and thank you for joining our call. Today, we'll review Reynolds American's results for the second quarter and first half, as well as our revised outlook for the rest of the year. As usual, our discussion will include adjusted non-GAAP results as management believes this provides additional perspective on our underlying business performance. RAI's use of adjusted results are intended to be supplemental in nature; and should not be viewed as a substitute for reported GAAP results. Reconciliations are reported to adjusted earnings are on Schedules 2 and 3 of our press release, which is available on our website at reynoldsamerican.com.
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 or cautionary statements. I'd also remind you that RAI's website is our primary source of publicly disclosed news, and that we also use Twitter to disseminate company news.
And now, I'll turn the call over to Susan.
Thank you, Bob. And good morning everyone Reynolds American turned in a strong performance for the second quarter and the first half, supported by continued excellent results across our operating companies, as well as a stable and positive macroeconomic environment for adult tobacco consumers. As you can see from today's report, our transformational acquisition of warlords just over a year ago, and the steps we've taken since then, have greatly enhance the financial strength of our RAI. And we're now at a point where we can deliver on our post acquisition promise to refocus on ways to create even more value for our shareholders.
Andrew will discuss our progress on debt reduction and other parts of development shortly there I do want to highlight or board's approval of an increase in audience dividend payout targets from 75% to 80% of adjusted net income, with a corresponding increase in our quarterly dividend by 9.5%, as well as its authorization of a new $2 billion share repurchase program. These decisions reflect our deep commitment to rewarding shareholders.
It's fair to say that these decisions also reflect the confidence that our RAI's management and board have in our operating companies business strategies, and in their ability to drive sustainable long term growth in a dynamic environment. I'm also very pleased to report that