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Reynolds American




Reynolds American is a publicly traded company having a good stock performance result. Reynolds American is a fortune 500 stock listed company trading under RAI. No doubt that is what R.J. Reynolds Tobacco Holdings and Brown & Williamson were thinking when the two merged in 2004 to create Reynolds American.
 
R.J. Reynolds has been smoking for more than 120 years, but increasing competition and the need to cut costs encouraged the 2 US tobacco company to merge with 3 Brown & Williamson. Reynolds American still trails the Altria Group, which steers nearly half of the US tobacco market. RJRT's Camel and Salem brands are among the best-selling cigarettes in the US and are joined by well-known brands Kool and Lucky Strike. Brown & Williamson's former parent British American Tobacco owns 42 percent of Reynolds American.

Reynolds American became their parent company on July 30, 2004, following a business transaction that combined the nation’s No. 2 and No. 3 tobacco companies, R.J. Reynolds Tobacco Company and the U.S. operations of Brown & Williamson Tobacco Corp. under the Reynolds Tobacco name.

For the second quarter 2005, net sales were 2.1 billion dollars, up 55.5 percent compared with 1.4 billion dollars in 2004. The increase was primarily due to incremental revenues resulting from the July 2004 business combination of R.J. Reynolds Tobacco Company and the U.S. operations of Brown & Williamson Tobacco Corporation, as well as improved pricing.
 
Operating income was 417 million dollars, up 56.8 percent from the prior year period, primarily due to the business combination, improved pricing, merger-related synergies and a benefit related to the MSA Phase II growers’ trust. These were partially offset by merger-related expenses. In addition, operating income was negatively impacted by 25 million dollars in net charges related to the sale of R.J. Reynolds’ packaging business.

On July 13, 2005, the board of directors of Reynolds American recently declared an 11 percent increase in the company’s quarterly cash dividend, increasing it to 1.05 dollars per common share from 0.95 dollars per share. The new quarterly dividend is payable Oct. 3, 2005, to stockholders of record on Sept. 9, 2005.  The dividend increase is equivalent to increasing the annual dividend rate from 3.80 dollars to 4.20 dollars per share. Reynolds American compromising their strong commitment to protecting the environment, safeguarding the health and safety of employees and neighbors.
 

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