Reynolds American Inc. (NYSE:RAI) Q3 2016 Earnings Conference Call - Final Transcript
Oct 19, 2016 • 09:00 am ET
My name is Denise, and I will be your conference operator today. At this time, I would like to welcome everyone to the Reynolds American Third 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. VP of IR, Bob Bannon, you may begin your conference.
Good morning and thank you for joining our call. Today, we will review Reynolds American's results for the third quarter and nine months, as well as our revised outlook for the full-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 measurements are intended to be supplemental in nature; and should not be viewed as a substitute for reported GAAP results.
Our press release includes an explanation of our use of adjusted EPS guidance and reconciliations of reported to adjusted results. Our press release is available on our website at reynoldsamerican.com.
Joining me this morning are RAI's President and CEO, Susan Cameron; R.J. Reynolds' President and COO, Debra Crew, who as you saw this morning has been named RAI's President and CEO elect; and we also have Andrew Gilchrist, our CFO.
(Forward-Looking Cautionary Statements) I would 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 will turn the call over to Susan.
Hello, everyone. Well, we do have plenty of news today, don't we? But before I speak to the upcoming changes in leadership here, let me touch on a few of the quarter's business highlights. First, our operating performance continued to be excellent, especially in light of the significant investment in our company's regulatory compliance, innovation pipeline and participation in current state political processes.
In addition, both Newport and Natural American Spirit made another impressive showing in the marketplace, and together with higher pricing in both cigarette and moist snuff, these premium brands were a key driver behind RAI's strong earnings growth for the third quarter and the first nine months.
Over the course of the year, we have also accelerated returns to our shareholders, and I remind you here of our significant debt reduction, two dividend increases and RAI's new share repurchase program. So, I am very pleased with the way this year has progressed and with Newport's integration now behind us, this is an appropriate time to layout our leadership succession plan.
As we announced today, I will become Executive Chairman of RAI on 1st of January; and Debra will succeed me as President and CEO. Yes, I really am retiring as CEO this time, and I have assured my husband there will be no round three. But I am fully committed to making a seamless and successful transition with Debra over the next few months, and as Board Chair I look forward to playing an integral role