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NYSE: RAI $64.50   +0.18 (0.279%)
Report Resources

Susan Cameron

Ceo Letter

2015 was a transformational year for RAI and its operating companies. Building on the momentum of the past few years, we continued to execute on our vision: to achieve market leadership by transforming the tobacco industry. Our operating companies delivered excellent results, and RAI closed the year with a 174.4 percent increase in reported (GAAP) operating income over 2014.

Some business highlights of the year included:

  • Completion of the acquisition of Lorillard, the third-largest tobacco company in the United States and its flagship Newport cigarette brand. Synergies and higher sales volumes generated by the acquisition will better position RAI’s operating companies to fuel continued investment in innovation for the long-term future of the company.
  • Consolidation of e-cigarette manufacturing operations at R.J. Reynolds’ Tobaccoville, N.C., manufacturing facility. The consolidation reduces costs and increases manufacturing efficiencies while minimizing our companies’ environmental footprint.
  • The sale of the international rights to the Natural American Spirit brand name and associated trademarks to the Japan Tobacco Group, for $5 billion. Santa Fe Natural Tobacco Company continues to market the super-premium cigarette brand in the U.S.
We believe our companies provide the most balanced portfolio of tobacco and vapor products in the industry, redefining enjoyment for adult tobacco consumers.

We understand that with the continued growth in our businesses, there is an increased expectation that we will continue to lead the transformation of our industry, and an expectation that we will champion sustainable practices within our companies and our industry. Our 2015 Sustainability Report microsite outlines many activities that RAI’s subsidiaries made toward improving the sustainability of its businesses, including:

  • Articulating goals and accountability for sustainability initiatives by our leadership team and our board of directors;
  • Increasing employee participation in the Right Decisions Right Now: Be Tobacco Free youth tobacco prevention program by 65 percent;
  • Creating a subsidiary focused on innovation and speed to market with new vapor and nicotine products that may have the potential to reduce the harm caused by smoking;
  • Bolstering our leadership in vapor innovations through a technology-sharing and licensing agreement with Nicoventures Holdings Limited, a subsidiary of British American Tobacco plc;
  • Quantifying the environmental impacts in our supply chain to better focus our efforts; and
  • Strengthening our processes for hiring, developing and retaining employees, our Transforming Tobacco trailblazers, from day one and throughout their career at RAI.

Most importantly, we are driving innovation through our businesses to meet the changing preferences of adult tobacco consumers and the expectations of society.

As you read through our sustainability microsite, I hope you will agree that RAI and its subsidiaries have made enormous progress in 2015 toward our Transforming Tobacco vision. This vision drives our sustainability strategy, and will guide our companies’ actions and growth in the years ahead.

Susan M. Cameron
President and Chief Executive Officer
Reynolds American Inc.