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8-K - FORM 8-K - REYNOLDS AMERICAN INCd526018d8k.htm

Exhibit 99.1

 

LOGO

Reynolds American Inc.

P.O. Box 2990

Winston-Salem, NC 27102-2990

 

 

Contact:   

Investor Relations:

Morris Moore

(336) 741-3116

  

Media:

Jane Seccombe

(336) 741-5068

   RAI 2013-05

RAI delivers strong first-quarter results;

Company reaffirms full-year EPS guidance

WINSTON-SALEM, N.C. – April 23, 2013

 

First Quarter 2013 – At a Glance

 

   

Adjusted EPS: First quarter at $0.72, up 14.3 percent from prior-year quarter

 

   

Excludes 2013 Master Settlement Agreement (MSA) payment credit for 2012 volume year and other special items*

 

   

Reported EPS: First quarter at $0.92, up 95.7 percent

 

   

RAI adjusted margin grows to 36.6 percent

 

   

RAI reaffirms 2013 guidance: Adjusted EPS range of $3.15 to $3.30

 

   

Excludes 2013 MSA payment credit and other special items*

 

   

Key-brand market share gains:

 

   

Camel share up 0.1 pts. at 8.5 percent

 

   

Pall Mall share up 0.5 pts. at 9.0 percent

 

   

Grizzly share up 1.1 pts. at 29.8 percent

 

   

Natural American Spirit share up 0.2 pts. at 1.3 percent

 

* Special items are detailed in Schedule 2 and include 2013 implementation cost, 2012 restructuring charge, and charges for Engle progeny cases for both periods.

All references in this release to “reported” numbers refer to GAAP measurements; all “adjusted” numbers are non-GAAP, as defined in schedules 2 and 3 of this release, which reconcile reported to adjusted results.

 

1


Reynolds American Inc. (NYSE: RAI) today announced first-quarter 2013 adjusted EPS of $0.72, up 14.3 percent from the prior-year quarter, as higher pricing and lower MSA expense more than offset cigarette volume declines and additional investments in innovations and brand-equity building. Adjusted EPS excludes $0.21 for the 2013 MSA payment credit and $0.01 for implementation cost.

RAI reaffirmed 2013 adjusted EPS guidance in the range of $3.15 to $3.30, up 6 percent to 11 percent from 2012’s adjusted EPS of $2.97. This guidance excludes the above-referenced 2013 MSA payment credit and implementation cost.

 

 

First-Quarter 2013 Financial Results –

Highlights

(unaudited)

(all dollars in millions, except per-share amounts;

for reconciliations, including GAAP to non-GAAP, see schedules 2 and 3)

 

 
      For the Three Months Ended
March 31
 
      2013      2012      %
Change
 

Net sales

   $ 1,883       $ 1,933         (2.6 )% 
   

Operating income

          

Reported (GAAP)

   $ 887       $ 486         82.5

Adjusted (Non-GAAP)

     690         636         8.5
   

Net income

          

Reported (GAAP)

   $ 508       $ 270         88.1

Adjusted (Non-GAAP)

     398         364         9.3
   

Net income per diluted share

          

Reported (GAAP)

   $ 0.92       $ 0.47         95.7

Adjusted (Non-GAAP)

     0.72         0.63         14.3

 

 

2


MANAGEMENT’S PERSPECTIVE

Overview

“The first quarter reflected strong growth in RAI’s earnings and margins, and I’m particularly pleased to report that our operating companies’ four key brands performed extremely well in the competitive marketplace,” said Daniel M. Delen, president and chief executive officer.

In addition to gains in market share, all of RAI’s reportable business segments – RJR Tobacco, American Snuff and Santa Fe – generated higher first-quarter operating income and margin. Delen noted that RJR Tobacco benefitted from the partial resolution of the Master Settlement Agreement (MSA) NPM disputes.

“Overall, the external environment remained challenging,” Delen said. “Industry cigarette volumes were negatively impacted by higher energy prices, the expiration of the payroll-tax holiday and fewer shipping days,” he said. “However, our operating companies’ initiatives to strengthen the equity of their key brands are paying off, and this is helping to carve out new areas of growth in their traditional tobacco businesses.”

Investment in innovative new products to meet the changing preferences of adult tobacco consumers continued in the quarter, and these investments will increase as the company moves through the year.

Delen said that R.J. Reynolds Vapor Company is making great progress on the development of its highly differentiated Vuse e-cigarette. “You’ll be hearing more about Vuse’s exciting expansion plans soon,” he said. Delen also noted that Niconovum USA’s Zonnic nicotine replacement therapy gum has been generating valuable feedback since it went into its first market of Des Moines, Iowa, late last year.

Delen said that RAI’s operating companies have consistently demonstrated their ability to manage through difficult environments, while remaining focused on productivity improvements and building their platforms for sustainable growth.

“As a result of this performance, and taking into account the challenges and opportunities that lie ahead this year, RAI today reaffirmed full-year adjusted EPS growth in the range of 6 percent to 11 percent over 2012’s adjusted results,” Delen said.

This guidance excludes the credit against the April 2013 MSA payment and other special items as detailed in Schedule 2.

 

3


RJR Tobacco

RJR Tobacco’s first-quarter adjusted operating income increased 9.2 percent from the prior-year quarter, to $563 million, as higher pricing, productivity gains and the favorable impact of the partial resolution of the MSA NPM disputes more than offset declines in cigarette volume. Adjusted results exclude the 2013 MSA payment credit of $202 million, as well as charges of $4 million for implementation cost and $3 million for Engle progeny cases.

RJR Tobacco’s first-quarter adjusted operating margin increased 4.4 percentage points to 36.0 percent, again reflecting the company’s ongoing balance between profitability and market share.

Higher gas prices and the expiration of the payroll-tax holiday reduced consumers’ disposable income in the first quarter. These factors, combined with two fewer shipping days, negatively impacted the company’s cigarette volumes. Wholesale cigarette inventories remained relatively stable.

RJR Tobacco’s first-quarter cigarette shipments declined 8.7 percent from the prior-year quarter, while industry volume declined 6.2 percent. However, after adjusting for the two fewer shipping days, RJR Tobacco estimates its volume declined by about 5.6 percent.

The company’s total first-quarter cigarette market share declined 0.6 percentage points from the prior-year quarter, to 26.1 percent. This decline was driven by the company’s Doral value brand, which was down 0.5 percentage points.

Camel and Pall Mall, RJR Tobacco’s growth brands, performed extremely well in the first quarter, given significant competitive activity. Their combined market share increased 0.6 percentage points from the prior-year quarter, to 17.5 percent. These brands now represent more than two-thirds of the company’s total market share.

Strong consumer interest in Camel’s innovative premium menthol styles drove an increase of 0.1 percentage points in the brand’s first-quarter market share, to 8.5 percent. These menthol styles increased their first-quarter market share by 0.5 percentage points from the prior-year quarter, to 3.3 percent, and now account for almost 40 percent of Camel’s total share.

Camel SNUS continued to lead the growing U.S. snus category with a share of nearly 80 percent in the first quarter. Camel SNUS introduced Fresh Seal packaging in February, helping to keep this premium product fresh and flavorful without refrigeration, from the first pouch to the last.

Pall Mall, RJR Tobacco’s other growth brand, made a strong start to the year, gaining 0.5 percentage points in the first quarter, to 9.0 percent, despite continued competitive pressure. The recent expansion of its menthol portfolio is providing incremental growth to the brand.

 

4


American Snuff

American Snuff’s first-quarter operating income increased 10.3 percent from the prior-year quarter, to $93 million, driven by continued strong performance in the company’s flagship Grizzly brand.

The company’s first-quarter operating margin benefited from higher moist-snuff volume and pricing, increasing 2.5 percentage points from the prior-year quarter, to 55.7 percent.

American Snuff’s first-quarter moist-snuff volume increased 1.1 percent from the prior-year quarter, while the company’s moist-snuff market share increased 0.8 percentage points, to 33.0 percent.

Grizzly, the nation’s best-selling moist-snuff brand, increased first-quarter shipment volume by 2.1 percent. This performance was negatively impacted by two fewer shipping days in the quarter and the timing of promotional shipments in the prior-year quarter. However, the brand’s market share continued to grow, gaining 1.1 percentage points, to 29.8 percent.

Grizzly’s pouch sales continued to be a performance highlight of the quarter, with shipments increasing by more than 30 percent.

Santa Fe

Santa Fe increased first-quarter adjusted operating income by 15.5 percent from the prior-year quarter, to $52 million, as the company’s undiscounted Natural American Spirit super-premium brand continued to build momentum on its 100 percent additive-free tobacco products and styles made with organic tobacco. Adjusted results exclude the 2013 MSA payment credit of $2 million.

The company’s first-quarter adjusted operating margin increased 0.2 percentage points from the prior-year quarter, to 45.2 percent.

Natural American Spirit again delivered substantial gains in the quarter. The brand’s volume rose by 14.7 percent compared with the prior-year quarter, and was up 16.6 percent when adjusted for the two fewer shipping days. The brand’s market share was up 0.2 percentage points from the prior-year quarter, at 1.3 percent.

FINANCIAL UPDATE

Reynolds American’s first-quarter adjusted EPS was $0.72, up 14.3 percent from the prior-year quarter on higher pricing, productivity improvements, the impact of the share repurchase program and lower MSA cost. Adjusted EPS excludes $0.21 for the 2013 MSA payment credit for the 2012 volume year and $0.01 for implementation cost.

 

5


On a reported basis, first-quarter EPS was $0.92, up 95.7 percent from the prior-year quarter.

RAI’s first-quarter adjusted operating margin increased 3.7 percentage points, to 36.6 percent.

RAI continued to make progress on its $2.5 billion share repurchase program during the quarter, purchasing 6.8 million shares for $300 million. That brought total repurchases under the program to 38.6 million shares for $1.6 billion.

The company ended the first quarter with $2.8 billion in cash balances. In mid-April, R.J. Reynolds satisfied its MSA obligation of $1.84 billion, which was reduced by a credit of $202 million from the partial resolution of the NPM disputes, resulting in a net payment of $1.64 billion. This payment included a deposit of approximately $460 million into the Disputed Payments Account, principally for the 2010 NPM Adjustment. Separately, the company deposited $419 million in the Disputed Payments Account for the 2006 NPM Adjustment, an amount that had been previously withheld.

RAI borrowed $500 million on April 10 under its previously announced term-loan agreement.

“I’m very pleased with the first quarter’s achievements by RAI and its operating companies, and this strong performance allows us to reaffirm our expectations for 2013 adjusted EPS in the range of $3.15 to $3.30,” said Thomas R. Adams, RAI’s chief financial officer.

This guidance excludes the credit against the April 2013 MSA payment and other special items as detailed in Schedule 2. Guidance also reflects significant investments to support expansion of the Vuse e-cigarette and other innovations, as well as initiatives that continue to build the equity of RAI’s operating companies’ four key brands.

CONFERENCE CALL WEBCAST TODAY

Reynolds American will webcast a conference call to discuss first-quarter 2013 results at 9:00 a.m. Eastern Time on Tuesday, April 23, 2013. The call will be available live online on a listen-only basis. To register for the call, please go to http://www.reynoldsamerican.com/events.cfm. A replay of the call will be available on the site. Investors, analysts and members of the news media can also listen to the live call by phone, by dialing (877) 390-5533 (toll free) or (678) 894-3969 (international). Remarks made during the conference call will be current at the time of the call and will not be updated to reflect subsequent material developments. Although news media representatives will not be permitted to ask questions during the call, they are welcome to monitor the remarks on a listen-only basis. Following the call, media representatives may direct inquiries to Jane Seccombe at (336) 741-5068.

 

6


WEB DISCLOSURE

RAI’s website, www.reynoldsamerican.com, is the primary source of publicly disclosed news about RAI and its operating companies. We use the website as our primary means of distributing quarterly earnings and other company news. We encourage investors and others to register at www.reynoldsamerican.com to receive alerts when news about the company has been posted.

RISK FACTORS

Statements included in this news release that are not historical in nature are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements regarding future events or the future performance or results of RAI and its subsidiaries inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

These risks and uncertainties include:

 

   

the substantial and increasing taxation and regulation of tobacco products, including the regulation of tobacco products by the U.S. Food and Drug Administration (FDA);

 

   

the possibility that the FDA will issue a regulation prohibiting menthol as a flavor in cigarettes or prohibit mint or wintergreen as a flavor in smokeless tobacco products;

 

   

decreased sales resulting from the future issuance of “corrective communications” required by the order in the U.S. Department of Justice case on five subjects, including smoking and health, and addiction;

 

   

various legal actions, proceedings and claims relating to the sale, distribution, manufacture, development, advertising, marketing and claimed health effects of tobacco products that are pending or may be instituted against RAI or its subsidiaries;

 

   

the possibility of being required to pay various adverse judgments in the Engle progeny and/or other litigation;

 

   

the substantial payment obligations with respect to cigarette sales, and the substantial limitations on the advertising and marketing of cigarettes (and of R.J. Reynolds’ smoke-free tobacco products) under the State Settlement Agreements;

 

   

the possibility that the Arbitration Panel’s Award reflecting the partial resolution of the NPM disputes will be vacated or otherwise modified;

 

   

the continuing decline in volume in the U.S. cigarette industry and RAI’s dependence on the U.S. cigarette industry;

 

   

concentration of a material amount of sales with a single customer or distributor;

 

   

competition from other manufacturers, including industry consolidations or any new entrants in the marketplace;

 

7


   

increased promotional activities by competitors, including manufacturers of deep-discount cigarette brands;

 

   

the success or failure of new product innovations and acquisitions;

 

   

the responsiveness of both the trade and consumers to new products, marketing strategies and promotional programs;

 

   

the ability to achieve efficiencies in the businesses of RAI’s operating companies without negatively affecting financial or operating results;

 

   

the reliance on a limited number of suppliers for certain raw materials;

 

   

the cost of tobacco leaf, and other raw materials and other commodities used in products;

 

   

the effect of market conditions on interest-rate risk, foreign currency exchange-rate risk and the return on corporate cash;

 

   

changes in the financial position or strength of lenders participating in RAI’s credit facility;

 

   

the impairment of goodwill and other intangible assets, including trademarks;

 

   

the effect of market conditions on the performance of pension assets or any adverse effects of any new legislation or regulations changing pension expense accounting or required pension funding levels;

 

   

the substantial amount of RAI debt;

 

   

the credit ratings assigned to RAI, and to the senior unsecured long-term debt and the revolving credit facility of RAI;

 

   

any restrictive covenants imposed under RAI’s debt agreements;

 

   

the possibility of natural or man-made disasters or other disruptions that may adversely affect manufacturing or other operations and other facilities;

 

   

the significant ownership interest of Brown & Williamson Holdings, Inc. (B&W), RAI’s largest shareholder, in RAI and the rights of B&W under the governance agreement between the companies;

 

   

the expiration of the standstill provisions of the governance agreement on July 30, 2014;

 

8


   

a termination of the governance agreement or certain provisions of it in accordance with its terms, including the limitations on B&W’s representation on RAI’s board and its board committees;

 

   

RAI’s shareholder rights plan (which, generally, will expire on July 30, 2014) not applying to British American Tobacco p.l.c. except in limited circumstances; and

 

   

the expiration of the non-competition agreement between RAI and BAT on July 30, 2014.

Due to these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Except as provided by federal securities laws, RAI is not required to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

ABOUT US

Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company; American Snuff Company, LLC; Santa Fe Natural Tobacco Company, Inc.; and Niconovum AB.

 

   

R.J. Reynolds Tobacco Company is the second-largest U.S. tobacco company. The company’s brands include many of the best-selling cigarettes in the U.S.: Camel, Pall Mall, Winston, Kool, Doral and Salem.

 

   

American Snuff Company, LLC is the nation’s second-largest manufacturer of smokeless tobacco products. Its leading brands are Grizzly and Kodiak.

 

   

Santa Fe Natural Tobacco Company, Inc. manufactures and markets Natural American Spirit 100% additive-free natural tobacco products, including styles made with organic tobacco.

 

   

Niconovum AB markets innovative nicotine replacement therapy products in Sweden under the Zonnic brand name.

Copies of RAI’s news releases, annual reports, SEC filings and other financial materials, including risk factors containing forward-looking information, are available at www.reynoldsamerican.com. To learn more about how Reynolds American and its operating companies are transforming the tobacco industry, visit http://TransformingTobacco.com.

(financial and volume schedules follow)

 

9


Schedule 1

REYNOLDS AMERICAN INC.

Condensed Consolidated Statements of Income—GAAP

(Dollars in Millions, Except Per Share Amounts)

(Unaudited)

 

     Three Months Ended  
     March 31,  
     2013     2012  

Net sales, external

   $ 1,802      $ 1,856   

Net sales, related party

     81        77   
  

 

 

   

 

 

 

Net sales

     1,883        1,933   

Cost of products sold

     694        994   

Selling, general and administrative expenses

     301        298   

Amortization expense

     1        6   

Restructuring charge

     —          149   
  

 

 

   

 

 

 

Operating income

     887        486   

Interest and debt expense

     62        56   

Interest income

     (2     (2

Other (income) expense, net

     (2     3   
  

 

 

   

 

 

 

Income from continuing operations before income taxes

     829        429   

Provision for income taxes

     321        159   
  

 

 

   

 

 

 

Net income

   $ 508      $ 270   
  

 

 

   

 

 

 

Basic net income per share

   $ 0.92      $ 0.47   
  

 

 

   

 

 

 

Diluted net income per share

   $ 0.92      $ 0.47   
  

 

 

   

 

 

 

Basic weighted average shares, in thousands

     551,353        574,456   
  

 

 

   

 

 

 

Diluted weighted average shares, in thousands

     553,450        577,539   
  

 

 

   

 

 

 

Segment data:

    

Net sales:

    

R.J. Reynolds

   $ 1,558      $ 1,631   

American Snuff

     167        158   

Santa Fe

     115        100   

All Other

     43        44   
  

 

 

   

 

 

 
   $ 1,883      $ 1,933   
  

 

 

   

 

 

 

Operating income:

    

R.J. Reynolds

   $ 758      $ 377   

American Snuff

     93        84   

Santa Fe

     54        45   

All Other

     (4     8   

Corporate

     (14     (28
  

 

 

   

 

 

 
   $ 887      $ 486   
  

 

 

   

 

 

 

Supplemental information:

    

Excise tax expense

   $ 855      $ 923   

Master Settlement Agreement and other state settlement expense

   $ 268      $ 557   

Federal tobacco buyout expense

   $ 52      $ 56   

FDA fees

   $ 32      $ 30   


Schedule 2

REYNOLDS AMERICAN INC.

Reconciliation of GAAP to Adjusted Results

(Dollars in Millions)

(Unaudited)

RAI management uses “adjusted” (non-GAAP) measurements to set performance goals and to measure the performance of the overall company, and believes that investors’ understanding of the underlying performance of the company’s continuing operations is enhanced through the disclosure of these metrics. “Adjusted” (non-GAAP) results are not, and should not be viewed as, substitutes for “reported” (GAAP) results.

 

     Three Months Ended March 31,  
     2013     2012  
     Operating
Income
    Net
Income
    Diluted
EPS
    Operating
Income
     Net
Income
     Diluted
EPS
 

GAAP results

   $ 887      $ 508      $ 0.92      $ 486       $ 270       $ 0.47   

The GAAP results include the following:

              

2013 MSA payment credit

     (204     (115     (0.21     —           —            —     

Implementation costs

     4        3        0.01        —           —            —     

Engle Progeny cases

     3        2        —          1         1         —     

Restructuring charge

     —          —          —          149         93         0.16   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Total adjustments

     (197     (110     (0.20     150         94         0.16   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Adjusted results

   $ 690      $ 398      $ 0.72      $ 636       $ 364       $ 0.63   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Condensed Consolidated Balance Sheets

(Dollars in Millions)

(Unaudited)

 

     March 31,      Dec. 31,  
     2013      2012  

Assets

     

Cash and cash equivalents

   $ 2,778       $ 2,502   

Other current assets

     2,251         2,310   

Trademarks and other intangible assets, net

     2,454         2,455   

Goodwill

     8,011         8,011   

Other noncurrent assets

     1,284         1,279   
  

 

 

    

 

 

 
   $ 16,778       $ 16,557   
  

 

 

    

 

 

 

Liabilities and shareholders’ equity

     

Tobacco settlement accruals

   $ 2,757       $ 2,489   

Other current liabilities

     1,388         1,280   

Long-term debt (less current maturities)

     5,028         5,035   

Deferred income taxes, net

     482         461   

Long-term retirement benefits (less current portion)

     1,798         1,821   

Other noncurrent liabilities

     207         214   

Shareholders’ equity

     5,118         5,257   
  

 

 

    

 

 

 
   $ 16,778       $ 16,557   
  

 

 

    

 

 

 


Schedule 3

REYNOLDS AMERICAN INC.

Reconciliation of GAAP to Adjusted Operating Income by Segment

The R.J. Reynolds segment consists of the primary operations of R.J. Reynolds Tobacco Company, the second-largest tobacco company in the United States and which also manages a contract manufacturing business.

The American Snuff segment consists of the primary operations of American Snuff Company, LLC, the second-largest smokeless tobacco products manufacturer in the United States.

The Santa Fe segment consists of the primary operations of Santa Fe Natural Tobacco Company, Inc., which manufactures Natural American Spirit cigarettes and other additive-free tobacco products.

Management uses “adjusted” (non-GAAP) measurements to set performance goals and to measure the performance of the company, and believes that investors’ understanding of the underlying performance of the company’s continuing operations is enhanced through the disclosure of these metrics.

 

     Three Months Ended March 31,  
     2013     2012  
     R.J. Reynolds     American Snuff      Santa Fe     R.J. Reynolds      American Snuff      Santa Fe  

GAAP operating income

   $ 758      $ 93       $ 54      $ 377       $ 84       $ 45   

The GAAP results include the following:

               

2013 MSA payment credit

     (202     —           (2        

Implementation costs

     4        —           —          —           —           —     

Engle Progeny cases

     3        —           —          1         —           —     

Restructuring charge (1)

     —          —           —          138         —           —     
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total adjustments

     (195     —           (2     139         —           —     
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Adjusted operating income

   $ 563      $ 93       $ 52      $ 516       $ 84       $ 45   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

(1) For the three months ended March 31, 2012, RAI and its operating companies recorded aggregate restructuring charges of $149 million, including $11 million in corporate costs.


Schedule 4

R.J. REYNOLDS CIGARETTE VOLUMES AND RETAIL SHARE OF MARKET

VOLUME (in billions):

 

     Three Months Ended  
     Mar 31,     Change  
     2013     2012     Units     %  

Camel

     4.8        5.1        (0.3     -5.5

Pall Mall

     4.8        4.9        (0.1     -2.0
  

 

 

   

 

 

   

 

 

   

Total growth brands

     9.6        10.0        (0.4     -3.8

Other

     5.3        6.3        (1.0     -16.4
  

 

 

   

 

 

   

 

 

   

Total R.J. Reynolds domestic

     14.9        16.3        (1.4     -8.7

Total premium

     8.7        9.5        (0.9     -9.1

Total value

     6.2        6.7        (0.5     -8.1

Premium/total mix

     58.3     58.5     -0.3  

Industry

     62.7        66.8        (4.1     -6.2

Premium

     44.7        47.4        (2.7     -5.8

Value

     18.1        19.4        (1.4     -7.0

Premium/total mix

     71.2     70.9     0.3  
        

RETAIL SHARE OF MARKET:

 

     Three Months Ended  
     Mar 31,  
     2013     2012     Change  

Camel

     8.5     8.4     0.1   

Pall Mall

     9.0     8.4     0.5   
  

 

 

   

 

 

   

 

 

 

Total growth brands

     17.5     16.9     0.6   

Other

     8.6     9.9     (1.3
  

 

 

   

 

 

   

 

 

 

Total R.J. Reynolds domestic

     26.1     26.7     (0.6

Amounts are rounded on an individual basis and, accordingly, may not sum in the aggregate.

Industry volume data based on information from Management Science Associates, Inc.

Retail shares of market are as reported by SymphonyIRI Group, Inc. and Capstone Research Inc.


Schedule 5

AMERICAN SNUFF MOIST-SNUFF VOLUMES AND RETAIL SHARE OF MARKET

VOLUME (in millions of cans):

 

     Three Months Ended  
     Mar 31,      Change  
     2013      2012      Units     %  

Grizzly

     94.9         93.0         1.9        2.1

Other

     10.7         11.5         (0.8     -6.9
  

 

 

    

 

 

    

 

 

   

Total moist snuff cans

     105.6         104.4         1.1        1.1

RETAIL SHARE OF MARKET:

 

     Three Months Ended  
     Mar 31,  
     2013     2012     Change  

Grizzly

     29.8     28.7     1.1   

Other

     3.2     3.5     (0.3
  

 

 

   

 

 

   

 

 

 

Total retail share of market

     33.0     32.2     0.8   

SANTA FE CIGARETTE VOLUMES AND RETAIL SHARE OF MARKET

VOLUME (in billions):

 

     Three Months Ended  
     Mar 31,      Change  
     2013      2012      Units      %  

Natural American Spirit

     0.7         0.6         0.1         14.7

RETAIL SHARE OF MARKET:

 

     Three Months Ended  
     Mar 31,  
     2013     2012     Change  

Natural American Spirit

     1.3     1.1     0.2   

Amounts are rounded on an individual basis and, accordingly, may not sum in the aggregate.

Retail shares of market are as reported by SymphonyIRI Group, Inc. and Capstone Research Inc.