Summary Full Year 2006 Financial Results
PR Newswire Winston Salem, NC February 8, 2007

Reynolds American (RAI) all operating companies posting 2006 full-year profit gains," said Susan M. Ivey, RAI's chairman and chief executive officer. "Conwood is a powerful addition to the Reynolds American family," Ivey said. "Its performance has exceeded our expectations, and the acquisition added to earnings in its first seven months. "Our largest subsidiary, R.J. Reynolds, continued to post strong growth- brand gains and remains on track to achieve overall share growth by the end of 2010," she continued. "R.J. Reynolds posted significant achievements in 2006," said Daniel M. Delen, who joined the company as R.J. Reynolds' president on Jan. 1, 2007. "We continued to enhance our overall performance, and we further refined our marketing strategies to fuel additional gains on Camel, Kool and Pall Mall." On a combined basis, these three brands commanded 12.41 percent of the market in 2006 -- up 1.09 share points from the prior year. Delen noted that Camel was the cigarette industry's fastest-growing brand in 2006. More than half of the brand's full-year gain of 0.68 share points came from the company's increased focus on the performance of Camel's menthol brand-styles. This focus, which included the introduction of Camel Wides Menthol, has strengthened the brand's position in the important and growing menthol category.

Delen said he was pleased with the Camel Snus test market, which is providing valuable learning that will enhance the product's potential. "This year, Camel will continue to provide innovative entries that satisfy unmet consumer desires," Delen said. "A good example is this month's launch of Camel No. 9 (February 2007), which we developed with feedback from adult female smokers. Camel No. 9's regular and menthol styles each offer a 'light and luscious' blend in a distinctive pack." R.J. Reynolds' total retail cigarette market-share for 2006 was 29.78 percent, down 0.50 points from the prior year.

Conwood's performance in 2006 further solidified the company's position as the smokeless-tobacco growth leader, with the company delivering strong gains in volume, market share and profits. In 2006, one of every four cans of moist snuff sold in the United States was manufactured by Conwood. The company's full-year share of moist-snuff shipments was 25.15 percent, up 2.48 points from the prior-year period. That performance was largely driven by an exceptional 3.42 point market- share gain by Grizzly, the nation's leading moist-snuff value brand. In the five years since it was introduced, it's captured 20 percent of the moist-snuff market." Kodiak, the company's leading premium brand. Like competitive premium brands, Kodiak's performance had been soft, as the demand for value brands increased.

Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company; Conwood Company, LLC; Santa Fe Natural Tobacco Company, Inc.; 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, Kool, Winston, Salem and Doral. Conwood Company, LLC is the nation’s second-largest manufacturer of smokeless tobacco products. Its leading brands are Kodiak, Grizzly and Levi Garrett. Conwood also distributes a variety of tobacco products manufactured by Lane Limited, including little cigars and roll-your-own tobacco. Santa Fe Natural Tobacco Company, Inc. manufactures Natural American Spirit cigarettes and other 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.