Reynolds American Increases Quarterly Dividend by 20 Percent; Announces Two-for-One Stock Split

The Reynolds American Inc. (NYSE: RAI) board of directors today declared a 20 percent increase in RAI's quarterly cash dividend and approved a two-for-one split of the company's common stock.
The stock split will be in the form of a special, 100 percent stock dividend. The stock dividend will be issued on Aug. 14, 2006, to shareholders of record on July 31, 2006. Shareholders on the record date will receive one additional share of RAI common stock for each share that they own. After the split, there will be approximately 295 million shares outstanding of RAI common stock.
The quarterly cash dividend, on a split-adjusted basis, is $0.75 per common share, or $3 per share on an annualized basis (compared with a prior annualized dividend of $2.50 per share). That dividend will be payable on Oct. 2, 2006, to shareholders of record on Sept. 11, 2006. This is the ninth consecutive quarterly cash dividend that Reynolds American has declared since it became a publicly traded company on July 30, 2004. "This increase in our cash dividend reflects our continuing commitment to increase shareholder value," said Dianne M. Neal, RAI's chief financial officer, "and the two-for-one stock split is consistent with our desire to make Reynolds American stock more accessible to a broader range of investors."

Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company, Conwood Company, L.P., Santa Fe Natural Tobacco Company, Inc., Lane Limited and R.J. Reynolds Global Products, Inc. R.J. Reynolds Tobacco Company, the second-largest U.S. tobacco company, manufactures about one of every three cigarettes sold in the country. The company's brands include five of the 10 best-selling U.S. brands: Camel cigarettes, Kool cigarettes, Winston cigarettes, Salem cigarettes and Doral. Conwood Company, L.P. is the nation's second-largest manufacturer of smokeless tobacco products. Its leading brands are Kodiak, Grizzly and Levi Garrett. Santa Fe Natural Tobacco Company, Inc. manufactures Natural American Spirit cigarettes and other tobacco products for U.S. and international markets. Lane Limited manufactures several roll-your-own, pipe tobacco and little cigar brands, and distributes Dunhill tobacco products. R.J. Reynolds Global Products, Inc. manufactures, sells and distributes American-blend cigarettes and other tobacco products to a variety of customers worldwide. Copies of RAI's news releases, annual reports, SEC filings and other financial materials are available at http://www.reynoldsamerican.com/. source