Reynolds American (RAI) Announces 8.9% Quarterly Dividend Increase to $0.49; Yields 3.3%; CEO Ivey to Retire; Board Approves Two-for-One Stock Split

The Reynolds American Inc. (NYSE: RAI) board of directors has approved an 8.9% increase in the company’s quarterly dividend and a two-for-one split of the company’s stock. In addition, Susan M. Ivey, currently chairman, president and CEO of RAI, has notified the board of directors of her intent to retire on Feb. 28, 2011. The board has elected Daniel (Daan) M. Delen, currently chairman, president and CEO of R.J. Reynolds Tobacco Company, to be president- and CEO-elect of RAI, and a member of the board of directors, effective Jan. 1, 2011. After ongoing evaluation, the board also decided to split the roles of chairman of the board and chief executive officer, in line with best-practice trends in corporate governance. Thomas C. Wajnert was elected non-executive chairman of RAI’s board, effective Nov. 1, 2010. Wajnert has served as the board’s lead director since 2008, serves as the chair of the board’s compensation and leadership development committee, and is a member of the corporate governance and nominating committee. He chaired the board’s audit and finance committee from 2004 to 2009. Stock Split The stock split will be in the form of a special 100 percent stock dividend. Shareholders of record on Nov. 1, 2010, will receive one additional share of RAI common stock for each share they own. The new shares will be issued on Nov. 15, 2010. This is the second twofor-one stock split since the company became publicly traded in 2004. After the split, there will be approximately 583 million shares of RAI common stock outstanding. Dividend On a split-adjusted basis, RAI’s quarterly dividend will increase from $0.45 to $0.49, or from $1.80 to $1.96 on an annualized basis. On a pre-split basis, the dividend increase equates to an increase of $0.32 per share, from $3.60 to $3.92, on an annualized basis. The dividend will be payable on Jauary 3, 2011, to shareholders of record on December 10, 2010. The ex-dividend date is December 8, 2010. Yield on the dividend is 3.3%.... Read more

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