Reynolds American Inc.

Contact

Investor Relations:

RAI 2006-24

Ken Whitehurst

Seth Moskowitz

(336) 741-0951

(336) 741-7698

Exhibit 99.1


*ReynoldsAmerican*
		Reynolds American Inc.
		P.O. Box 2990
		Winston-Salem, NC 27102-2990

RAI CEO:

‘Reynolds American Continues to Build Strength’

First Half ’06 Reported EPS up 35.6%; Adjusted EPS up 20.9%
Revises Full Year Forecast

At a Glance

	•		Reported EPS: second quarter up 50.0 percent at $2.55; first half up 35.6 percent at $4.88

	•		Adjusted EPS: second quarter up 32.8 percent at $2.51; first half up 20.9 percent at $4.39

	•		RAI completes purchase of Conwood, the second-largest U.S. smokeless- tobacco company

	•		R.J. Reynolds’ investment brands’ growth on track

	•		Revised guidance: full-year reported EPS of $8.30 to $8.50

	•		RAI to increase dividend 20 percent; split stock two-for-one

All references in this release to “reported” numbers refer to GAAP measurements; all “adjusted” numbers are non-GAAP, as defined in schedules 3 and 4 of this release, which reconcile reported to adjusted results for second-quarter and first-half 2006.

WINSTON-SALEM, N.C. — July 26, 2006 — Reynolds American Inc. (NYSE: RAI) today announced strong gains in second-quarter and first-half 2006 diluted EPS — on both a reported and an adjusted basis. Adjusted EPS of $2.51 for the quarter and $4.39 for the half was up 32.8 percent and 20.9 percent respectively, benefiting from improved pricing, productivity and strong R.J. Reynolds volume. The company revised its forecast and now expects full-year 2006 reported EPS of $8.30 to $8.50.

-more-

-2-

Second Quarter and First Half 2006 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							For the Six Months
	Ending June 30							Ending June 30
	2006		2005		% Change			2006		2005		% Change

Net sales	$	2,291	$	2,103		8.9	%	$	4,251	$	4,060		4.7	%

Operating income
Reported (GAAP)	$	616	$	417		47.7	%	$	1,062	$	884		20.1	%
Adjusted (Non-GAAP)		621		462		34.4	%		1,065		889		19.8	%

Net income
Reported (GAAP)	$	376	$	251		49.8	%	$	721	$	532		35.5	%
Adjusted (Non-GAAP)		370		279		32.6	%		649		536		21.1	%

Net income per diluted share
Reported (GAAP)	$	2.55	$	1.70		50.0	%	$	4.88	$	3.60		35.6	%
Adjusted (Non-GAAP)		2.51		1.89		32.8	%		4.39		3.63		20.9	%

MANAGEMENT’S PERSPECTIVE

Overview

“Reynolds American’s first-half results clearly demonstrate the company’s ongoing progress in delivering against its business plan and building long-term shareholder value,” said Susan M. Ivey, RAI’s chairman, president and chief executive officer.

During the first half of 2006, the company expanded the scope of its business by entering the smokeless tobacco category with the acquisition of Conwood. RAI achieved additional merger synergies and met productivity objectives, and the company’s largest operating subsidiary, R.J. Reynolds, further increased the strength of its investment brands.

“In addition,” Ivey said, “Reynolds American continues to enjoy a more favorable industry environment, which was further enhanced by a recent ruling that eliminated the $145 billion judgment against the industry in the Engle class-action lawsuit.

“Our year-to-date performance and our ability to deliver sustainable earnings growth drove our decision, announced last week, to increase RAI’s dividend by 20 percent and split our stock on a two-for-one basis,” Ivey said. “It is clear that Reynolds American continues to build strength.”

-3-

R.J. Reynolds

“R.J. Reynolds’ performance during the first half of 2006 again demonstrated the company’s operational and marketplace strength,” said Lynn J. Beasley, R.J. Reynolds’ president and chief operating officer.

R.J. Reynolds’ adjusted operating income of $554 million for the second quarter and $957 million for the first half was up 29.7 percent and 16.0 percent respectively. That performance was primarily the result of pricing gains and productivity improvements, coupled with strong shipment volume.

R.J. Reynolds’ shipment volume was essentially flat for the first half of the year. “However,” Beasley noted, “we estimate that our retail consumption was down about 4 percent.”

First-half volume reflected an extra shipping day and was also impacted by a wholesale-inventory build-up prior to the July 4^th holiday and the company’s successful implementation of a new SAP systems platform in early July. These dynamics inflated first-half volume and enhanced operating income and margins.

“Full-year shipment volumes should be down approximately 4 percent, consistent with the consumption decline during the first half,” Beasley said. “We expect second-half volume to be adversely impacted as the trade brings inventories back in line with consumption. In addition, R.J. Reynolds’ second-half operating earnings will be affected by incremental investments of about $40 million to address state ballot initiatives on cigarette taxes and smoking bans.”

First-half marketplace performance reflects the continued success of R.J. Reynolds’ brand portfolio strategy. Total retail market share was 29.92 percent, down 0.42 points for the first half, as expected declines of the company’s selective support and non-investment brand categories offset the continued strong performance of the company’s two investment brands, Camel and Kool.

Camel and Kool continued to build strength with a combined first-half share of 10.38 percent, up 0.83 share points from the first half of 2005. The 2006 first-half share for Camel’s filtered styles was 7.28 percent, up 0.66 points from the prior-year period. Kool delivered a 0.17 share-point gain, boosting its first-half share to 3.10 percent.

“This momentum reflects the focus that Camel and Kool are receiving as investment brands, as well as the strong positioning of the core brand-styles and continuing innovations on both brands,” Beasley said. “In the second quarter, Camel’s innovations included the launch of a two-market test of Camel Snus, a smokeless tobacco option that has the advantage of being spitless.”

Conwood

Reynolds American acquired Conwood Company, L.P., the nation’s second-largest smokeless-tobacco manufacturer, on May 31, 2006. Consequently, only Conwood’s June operating income of $27 million is included in RAI’s consolidated results for the second quarter and first half of 2006.

-4-

To enhance understanding of Conwood’s underlying performance, RAI is providing adjusted pro-forma results, computed as if Conwood had been owned by RAI since the beginning of 2005. On this basis, Conwood delivered strong gains in volume, share and operating income for both the second quarter and the first half of 2006, compared with the same periods in 2005.

On an adjusted pro-forma basis, Conwood’s second-quarter adjusted operating income climbed 12.3 percent to $73 million. First-half adjusted operating income rose 16.7 percent to $140 million.

During both periods, the company continued to show its strength as the growth leader in the moist-snuff category. Conwood finished the first half of 2006 with a moist-snuff share of shipments of 24.9 percent, up 2.7 points from the prior-year period.

Driving Conwood’s results is Grizzly, a price-value brand that continued its strong growth, posting a 3.7 share-point gain from the prior-year first half. Grizzly was introduced only five years ago, but it already commands about 19 percent of the moist-snuff market.

Conwood is the only smokeless tobacco company that competes in all five smokeless tobacco categories. The company holds the No. 1 or No. 2 position in every category, and it has more than doubled its total share of the moist-snuff market in the past six years.

REVISED FULL YEAR FORECAST

“We are pleased with Reynolds American’s performance in the first half. For the year, we now expect reported EPS of $8.30 to $8.50 on a pre-split basis,” said Dianne M. Neal, RAI’s chief financial officer. “This reflects some additional upside that is primarily due to incremental tax gains, as well as the impact from the Conwood acquisition.”

Neal said that Conwood promises to continue delivering strong results during the second half of the year. “However,” she said, “their earnings will be only slightly accretive in 2006, as the interest expense associated with financing the acquisition largely offsets the operating income that Conwood will generate during the remainder of the year.”

Neal noted that the company’s particularly strong first half has put it ahead of its full-year projection on a pro-rata basis. “The second half of the year — the third quarter in particular—will be significantly impacted by the R.J. Reynolds first-half shipping imbalance,” Neal said. “The second half will also be adversely affected by an investment of approximately $40 million that R.J. Reynolds is making to combat state ballot initiatives on cigarette excise tax increases and smoking restrictions.”

Neal said that the reported EPS estimate also includes the after-tax effect of:

	•		A $74 million extraordinary gain in the first half resulting from the favorable resolution of prior years’ tax matters;

	•		Between $225 million and $250 million in pre-tax incremental merger-related synergies and productivity initiatives; and

	•		$50 million in pre-tax acquisition and merger-related costs.

-5-

Neal said that the company’s full-year forecast does not include:

	•		Any expense that will result from the fair-value allocation of Conwood’s purchase price; or

	•		Any potential impact of the annual assessment of intangible asset valuations.

In addition, she noted that the revised year-end cash forecast does not include $ 100 million of cash collateral for the appellate bond in the Engle class-action lawsuit. “At this time it is difficult to accurately predict when these funds will be returned,” she said, “so we have excluded them from our year-end cash forecast.

“We expect our balance sheet to remain strong,” Neal said. “We should end the year with cash and short-term investments of about 2.4 billion dollars. We expect debt at year-end of about 4.7 billion dollars.”

CONFERENCE CALL WEBCAST TODAY

Reynolds American will webcast a conference call to discuss first-quarter 2006 results at 9:30 a.m. Eastern Time on Wednesday, July 26, 2006. The call will be available live online on a listen-only basis. To register for the call, please visit the “Investors” section of www.ReynoldsAmerican.com. A replay of the call will be available on the site for 30 days. 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 Seth Moskowitz at (336) 741-7698.

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. Forward-looking statements regarding RAI’s future performance and financial results 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 regulation and taxation of tobacco products;

	•		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 substantial payment obligations and limitations on the advertising and marketing of cigarettes under the MSA and other state settlement agreements;

	•		the continuing decline in volume in the domestic cigarette industry;

	•		competition from other manufacturers, including any new entrants in the marketplace;

	•		increased promotional activities by competitors and the growth of deep-discount cigarette brands;

-6-

	•		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 failure to realize the anticipated benefits arising from the Conwood acquisition;

	•		the ability to achieve efficiencies in manufacturing and distribution operations without negatively affecting sales;

	•		the cost of tobacco leaf and other raw materials and other commodities used in products, including future market pricing of tobacco leaf, which could adversely impact inventory valuations;

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

	•		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 rating of RAI’s and RJR’s securities;

	•		any restrictive covenants imposed under RAI’s and RJR’s debt agreements;

	•		the possibility of fire, violent weather and other disasters that may adversely affect the manufacturing facilities;

	•		any adverse effects from the transition of the packaging operations formerly conducted by RJR Packaging, LLC, a wholly owned subsidiary of RJR Tobacco, to the buyers of RJR Packaging, LLC’s businesses;

	•		any adverse effects arising out of the implementation of an SAP enterprise business system in the third quarter of 2006; and

	•		the potential existence of significant deficiencies or material weaknesses in internal control over financial reporting that may be identified during the performance of testing required under Section 404 of the Sarbanes-Oxley Act of 2002.

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; 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, Kool, Winston, Salem 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.

Schedule 1

REYNOLDS AMERICAN INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME-GAAP
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
Net sales, external	$	2,170		$	1,991		$	3,985		$	3,803
Net sales, related party		121			112			266			257

Net sales		2,291			2,103			4,251			4,060
Cost of products sold		1,276			1,241			2,441			2,352
Selling, general and administrative expenses		392			412			734			776
Amortization expense		7			9			14			24
Loss on sale of assets		—			25			—			25
Restructuring adjustments		—			(1	)		—			(1	)

Operating income		616			417			1,062			884
Interest and debt expense		52			26			87			50
Interest income		(23	)		(13	)		(59	)		(30	)
Other expense, net		(3	)		3			(3	)		7

Income from continuing operations before income taxes		590			401			1,037			857
Provision for income taxes		223			150			390			325

Income from continuing operations		367			251			647			532
Extraordinary item — gain on acquisition (1)		9			—			74			—

Net income	$	376		$	251		$	721		$	532


Basic income per share:
Income from continuing operations	$	2.49		$	1.70		$	4.39		$	3.61
Extraordinary item (1)		0.06			—			0.50			—

Net income	$	2.55		$	1.70		$	4.89		$	3.61

Diluted income per share:
Income from continuing operations	$	2.49		$	1.70		$	4.38		$	3.60
Extraordinary item (1)		0.06			—			0.50			—

Net income	$	2.55		$	1.70		$	4.88		$	3.60

Basic weighted average shares, in thousands		147,514			147,383			147,496			147,383

Diluted weighted average shares, in thousands		147,680			147,575			147,661			147,579


Segment data:
Net sales:
RJR Tobacco	$	2,103		$	1,961		$	3,930		$	3,767
Conwood		42			—			42			—
All Other		146			142			279			293

	$	2,291		$	2,103		$	4,251		$	4,060


Operating income:
RJR Tobacco	$	549		$	407		$	954		$	845
Conwood		27			—			27			—
All Other		49			19			97			55
Corporate Expense		(9	)		(9	)		(16	)		(16	)

	$	616		$	417		$	1,062		$	884


(1)		Includes adjustments to the 2000 extraordinary gain on acquisition, resulting from favorable resolution of prior-years’ tax matters.

Schedule 2

REYNOLDS AMERICAN INC.
Reconciliation of 2005 GAAP Results to 2006 GAAP Results
(Dollars In Millions)
(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	Operating			Net			Operating			Net
	Income			Income			Income			Income

2005 Results	$	417		$	251		$	884		$	532
Deduct 2005 Phase II growers’ trust offset		(14	)		(9	)		(79	)		(49	)
Add back 2005 federal tobacco buyout assessment		4			2			7			4
Add back 2005 merger/integration costs		30			19			52			32
Add back 2005 loss on sale of assets		25			16			25			16
Federal tobacco buyout assessment		—			—			9			6
Merger/integration costs		(5	)		(3	)		(12	)		(7	)
Extraordinary gain on acquisition		—			9			—			74
Operations and other		159			91			176			113

2006 Results	$	616		$	376		$	1,062		$	721

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)

On a preliminary basis, the $3.5 billion cost of the acquisition of Conwood has been allocated on the basis of historical net book value of assets acquired and liabilities assumed as of the acquisition date. The excess purchase price over the net book value was included in goodwill. The fair value of acquired tangible and intangible assets has not yet been determined. The allocation of purchase price to the fair value of assets acquired and liabilities assumed is expected to reduce goodwill in the second half of 2006.


	June 30,		December 31,
	2006		2005
Assets
Cash and cash equivalents	$	1,105	$	1,333
Short-term investments		717		1,373
Other current assets		2,261		2,359
Trademarks, net		2,182		2,188
Goodwill		9,059		5,672
Other noncurrent assets		1,610		1,594

	$	16,934	$	14,519


Liabilities and shareholders’ equity
Tobacco settlement and related accruals	$	1,499	$	2,254
Current maturities of long-term debt		314		190
Accrued liabilities and other current liabilities		1,736		1,705
Long-term debt (less current maturities)		4,413		1,558
Long-term deferred income taxes		580		639
Long-term retirement benefits		1,236		1,374
Other noncurrent liabilities		244		246
Shareholders’ equity		6,912		6,553

	$	16,934	$	14,519

Schedule 3

REYNOLDS AMERICAN INC.
Reconciliation of GAAP to Adjusted Results

Results include the acquired operations of Conwood since May 31, 2006. The fair value of acquired assets and liabilities assumed has not yet been determined. However, any adjustments resulting from such determination is not expected to have a significant impact on RAI’s results of operations.

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 June 30,
	2006								2005
	Operating		Net			Diluted			Operating			Net			Diluted
	Income		Income			EPS			Income			Income			EPS
GAAP results	$	616	$	376		$	2.55		$	417		$	251		$	1.70
The GAAP results include the following expense (income):
Federal tobacco buyout assessment		—		—			—			4			2			0.01
Phase II growers’ trust offset		—		—			—			(14	)		(9	)		(0.06	)
Merger/integration costs		5		3			0.02			30			19			0.13
Loss on sale of assets		—		—			—			25			16			0.11
Extraordinary gain on acquisition		—		(9	)		(0.06	)		—			—			—

Total adjustments		5		(6	)		(0.04	)		45			28			0.19

Adjusted results	$	621	$	370		$	2.51		$	462		$	279		$	1.89


	Six Months Ended June 30,
	2006									2005
	Operating			Net			Diluted			Operating			Net			Diluted
	Income			Income			EPS			Income			Income			EPS
GAAP results	$	1,062		$	721		$	4.88		$	884		$	532		$	3.60
The GAAP results include the following expense (income):
Federal tobacco buyout assessment		(9	)		(6	)		(0.04	)		7			4			0.03
Phase II growers’ trust offset		—			—			—			(79	)		(48	)		(0.33	)
Merger/integration costs		12			8			0.05			52			32			0.22
Loss on sale of assets		—			—			—			25			16			0.11
Extraordinary gain on acquisition		—			(74	)		(0.50	)		—			—			—

Total adjustments		3			(72	)		(0.49	)		5			4			0.03

Adjusted results	$	1,065		$	649		$	4.39		$	889		$	536		$	3.63

Schedule 4

REYNOLDS AMERICAN INC.
Reconciliation of GAAP to Proforma Adjusted Operating Income by Segment

R.J. Reynolds is the second-largest cigarette manufacturer in the United States and manages a contract manufacturing business. Conwood is the second largest smokeless tobacco products manufacturer in the United States.

Conwood’s GAAP operating income includes the operations acquired by RAI since May 31, 2006. Proforma operating income includes Conwood’s pre-acquisition operating income. The fair value of acquired assets and liabilities assumed has not yet been determined, and therefore, no resulting proforma adjustments have been made in the proforma adjusted operating income.

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 June 30,
	2006				2005
	R.J. Reynolds		Conwood		R.J. Reynolds			Conwood

GAAP operating income	$	549	$	27	$	407		$	—
The GAAP results include the following expense (income):
Federal tobacco buyout assessment		—		—		4			—
Phase II growers’ trust offset		—		—		(14	)		—
Merger/integration costs		5		—		30			—

Total adjustments		5		—		20			—

Adjusted operating income	$	554		27	$	427

Conwood pre-acquisition GAAP operating income				46					65

Proforma adjusted operating income			$	73				$	65


	Six Months Ended June 30,
	2006					2005
	R.J. Reynolds			Conwood		R.J. Reynolds			Conwood
GAAP operating income	$	954		$	27	$	845		$	—
The GAAP results include the following expense (income):
Federal tobacco buyout assessment		(9	)		—		7			—
Phase II growers’ trust offset		—			—		(79	)		—
Merger/integration costs		12			—		52			—

Total adjustments		3			—		(20	)		—

Adjusted operating results	$	957			27	$	825			—

Conwood pre-acquisition GAAP operating income					113					120

Proforma adjusted operating income				$	140				$	120

Schedule 5

REYNOLDS AMERICAN INC. / INDUSTRY VOLUMES
(Volume in Billion Units)


	Three Months Ended June 30,						Change						Six Months Ended June 30,						Change
	2006			2005			UNITS			%			2006			2005			UNITS			%
CAMEL (Filter Styles)		6.3			5.5			0.8			14.0	%		11.6			10.4			1.3			12.2	%
KOOL		3.1			3.0			0.1			3.5	%		5.9			5.7			0.2			3.8	%

TOTAL INVESTMENT BRANDS		9.4			8.5			0.9			10.3	%		17.6			16.1			1.5			9.2	%

TOTAL SELECTIVE SUPPORT BRANDS		11.7			11.5			0.2			1.7	%		21.9			22.1			-0.2			-0.9	%

TOTAL NON-SUPPORT BRANDS		6.8			7.6			-0.7			-9.8	%		13.0			14.4			-1.3			-9.3	%

TOTAL RJRT DOMESTIC		27.9			27.6			0.3			1.2	%		52.5			52.5			-0.1			-0.1	%
OTHER RAI COMPANIES		0.7			0.6			0.0			2.8	%		1.3			1.2			0.1			4.9	%

TOTAL RAI		28.6			28.2			0.3			1.2	%		53.7			53.7			0.0			0.0	%

TOTAL RJRT		27.9			27.6			0.3			1.2	%		52.5			52.5			-0.1			-0.1	%
TOTAL FP		17.1			16.6			0.5			2.7	%		32.1			31.6			0.5			1.5	%
TOTAL SAVINGS		10.8			11.0			-0.1			-1.1	%		20.4			21.0			-0.5			-2.6	%
FP/TOTAL MIX		61.2	%		60.3	%		0.9	%					61.1	%		60.1	%		1.0	%

INDUSTRY		96.7			100.0			-3.2			-3.3	%		184.7			187.9			-3.2			-1.7	%
FULL PRICE		70.0			71.5			-1.5			-2.1	%		133.6			134.2			-0.6			-0.5	%
SAVINGS		26.8			28.5			-1.7			-6.1	%		51.2			53.7			-2.6			-4.8	%
FP/TOTAL MIX		72.3	%		71.5	%		0.8	%					72.3	%		71.4	%		0.9	%

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

Other RAI Companies include U.S. volume for Lane Limited and Santa Fe Natural Tobacco Co., as well as volume for Puerto Rico and other U.S. territories.

Schedule 6

R.J.REYNOLDS — RETAIL SHARE OF MARKET


	Three Months Ended June 30,									Six Months Ended June 30,
	2006			2005			Change			2006			2005			Change
CAMEL (Filter Styles)		7.35	%		6.60	%		0.75			7.28	%		6.62	%		0.66
KOOL		3.12	%		2.99	%		0.12			3.10	%		2.94	%		0.17

TOTAL INVESTMENT BRANDS		10.46	%		9.59	%		0.88			10.38	%		9.55	%		0.83

TOTAL SELECTIVE SUPPORT BRANDS		12.18	%		12.44	%		(0.26	)		12.12	%		12.64	%		(0.53	)

TOTAL NON-SUPPORT BRANDS		7.25	%		8.06	%		(0.81	)		7.42	%		8.15	%		(0.73	)


TOTAL RJRT DOMESTIC		29.90	%		30.08	%		(0.19	)		29.92	%		30.34	%		(0.42	)

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

Retail shares of market are as reported by Information Resources Inc.


North Carolina	1-32258	20-0546644
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Number		Exhibit

99.1		Earnings Release of Reynolds American Inc., dated July 26, 2006.



REYNOLDS AMERICAN INC.

By:	/s/ McDara P. Folan, III

	Name:	McDara P. Folan, III
	Title:	Senior Vice President, Deputy General Counsel
		and Secretary


Number		Exhibit

99.1		Earnings Release of Reynolds American Inc., dated July 26, 2006.

	•		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.


	Three Months Ended June 30,				Change						Six Months Ended June 30,				Change
	2006		2005		Units			%			2006		2005		Units			%
KODIAK		14.9		15.7		(0.8	)		-5.1	%		28.7		30.2		(1.5	)		-4.9	%
Other premium		0.9		1.0		(0.0	)		-5.1	%		1.8		1.8		(0.0	)		-1.2	%
Total premium		15.9		16.7		(0.8	)		-5.1	%		30.5		32.0		(1.5	)		-4.7	%

GRIZZLY		50.6		37.8		12.7			33.7	%		95.2		71.4		23.9			33.4	%
Other price-value		0.8		1.1		(0.3	)		-27.6	%		1.6		2.3		(0.6	)		-27.2	%
Total price-value		51.4		38.9		12.4			31.9	%		96.9		73.6		23.3			31.6	%
Total moist snuff cans		67.2		55.6		11.6			20.8	%		127.3		105.6		21.8			20.6	%


	Three Months Ended June 30,									Six Months Ended June 30,
	2006			2005			Change			2006			2005			Change
Kodiak		5.38	%		6.20	%		(0.82	)		5.31	%		6.21	%		(0.90	)
Total premium		5.73	%		6.60	%		(0.87	)		5.66	%		6.60	%		(0.94	)

Grizzly		19.15	%		15.57	%		3.58			18.92	%		15.18	%		3.74
Total price-value		19.44	%		15.99	%		3.45			19.23	%		15.64	%		3.59

Total company		25.17	%		22.59	%		2.58			24.89	%		22.24	%		2.65