Analysis of Reportable Segments
Reynolds American Inc. operates in 3 segments: RJR Tobacco; Santa Fe; and American Snuff.
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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Segment Profit Margin
Reynolds American Inc., profit margin by reportable segment
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| RJR Tobacco | |||||
| Santa Fe | |||||
| American Snuff |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
The annual reportable segment profit margin data displays distinct trends across the three segments over the five-year period ending in 2016.
- RJR Tobacco Segment
- The profit margin exhibits notable variability, starting at 24.93% in 2012, experiencing a significant increase to 38.45% in 2013, followed by a decline to 32.11% in 2014. Afterward, the margin improves again, reaching 38.9% in 2015 and further rising to 47.72% in 2016. Overall, this segment demonstrates strong growth in profitability after a dip in 2014, culminating in the highest margin within the observed timeframe in 2016.
- Santa Fe Segment
- The profit margin for this segment shows a consistent upward trend throughout the period. Starting at 48.77% in 2012, the margin slightly increases to 48.95% in 2013 and continues climbing steadily each year to reach 56.12% in 2016. This reflects a stable and progressive improvement in profit margins over the five years.
- American Snuff Segment
- This segment consistently maintains the highest margins relative to the other segments, beginning at 54.92% in 2012 and increasing to 56.38% in 2013. The margin slightly decreases to 55.94% in 2014 but recovers and improves to 58.71% in 2015, and finally to 59.19% in 2016. The data indicates stable profitability with moderate growth despite slight fluctuations.
In summary, all segments exhibit growth in profit margins over the years, with American Snuff consistently presenting the highest margins, followed by Santa Fe and RJR Tobacco. The RJR Tobacco segment shows more volatility but a strong upward trend toward the end of the period, while Santa Fe demonstrates steady and consistent margin improvements.
Segment Profit Margin: RJR Tobacco
Reynolds American Inc.; RJR Tobacco; segment profit margin calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net sales
= 100 × ÷ =
- Operating Income (Loss)
- The operating income demonstrated an overall upward trend throughout the observed period. Beginning at 1,735 million USD in 2012, it increased significantly to 2,587 million USD in 2013, followed by a slight decline to 2,173 million USD in 2014. Subsequently, the operating income rebounded to 3,359 million USD in 2015 and continued its strong growth to reach 4,922 million USD by the end of 2016. This progression indicates a robust improvement in operational profitability, especially pronounced in the latter two years.
- Net Sales
- Net sales initially showed a downward movement, decreasing from 6,960 million USD in 2012 to 6,728 million USD in 2013. Sales then stabilized somewhat in 2014, with a slight increase to 6,767 million USD. A marked growth phase followed, with net sales rising substantially to 8,634 million USD in 2015 and further to 10,314 million USD in 2016. This pattern reflects a period of recovery and expansion in sales volume or pricing power starting in 2015.
- Segment Profit Margin
- The segment profit margin exhibited considerable variation over the timeframe. It began at 24.93% in 2012 and improved markedly to 38.45% in 2013. Despite a dip to 32.11% in 2014, the margin regained strength in 2015, reaching 38.9%, and achieved its highest level of 47.72% in 2016. This upward trajectory in profit margin suggests enhanced operational efficiency, better cost management, or improved pricing strategies during the latter years.
- Summary of Trends and Insights
- The data reflect a general pattern of recovery and strong growth after 2013, with both net sales and operating income increasing substantially from 2014 onwards. The marked improvement in segment profit margin in combination with rising operating income suggests that profitability was driven not only by increased sales but also by enhanced operational efficiency or cost control. The decline in net sales and operating income in 2013 and 2014 contrasts with the significant improvement after 2014, indicating a period of restructuring or market challenges followed by successful strategic execution. Overall, the segment displayed strengthening financial performance, culminating in record-high profitability indicators by 2016.
Segment Profit Margin: Santa Fe
Reynolds American Inc.; Santa Fe; segment profit margin calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net sales
= 100 × ÷ =
- Operating Income (Loss)
- The operating income exhibited a consistent upward trend over the analyzed five-year period. It increased from $237 million in 2012 to $546 million in 2016, representing more than a twofold growth. The largest annual increase occurred between 2014 and 2015, where operating income rose by $112 million.
- Net Sales
- Net sales also experienced steady growth each year, increasing from $486 million in 2012 to $973 million in 2016. This reflects a robust expansion in revenue, with the highest absolute increase observed between 2015 and 2016, amounting to $155 million.
- Segment Profit Margin
- The segment profit margin showed consistent improvement throughout the period. Starting at 48.77% in 2012, it increased each year to reach 56.12% by 2016. This indicates enhanced profitability and operational efficiency within the segment over time, with the margin rising by approximately 7.35 percentage points over five years.
- Overall Analysis
- The segment demonstrated strong financial performance characterized by growing sales and operating income, accompanied by improving profit margins. The parallel growth in revenue and profitability metrics suggests effective cost management and scalability. This trajectory implies positive momentum and increasing contribution to the overall financial health during the reviewed timeframe.
Segment Profit Margin: American Snuff
Reynolds American Inc.; American Snuff; segment profit margin calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net sales
= 100 × ÷ =
The financial performance exhibits a consistent upward trajectory across the reported periods. Net sales increased steadily from 681 million US dollars in 2012 to 914 million US dollars in 2016, indicating continuous growth in revenue generation over the five-year span.
Operating income also showed a persistent rise, growing from 374 million US dollars at the end of 2012 to 541 million US dollars by the end of 2016. This consistent increase in operating income reflects effective management of operating activities and possibly improved operational efficiencies.
The segment profit margin, expressed as a percentage, demonstrates a mildly positive trend. Starting at 54.92% in 2012, the margin improved to 59.19% by 2016, with slight fluctuations in intermediate years. This upward movement suggests a gradual enhancement in profitability, indicating that the segment is becoming more efficient at converting sales into profit.
- Net Sales
- Growth from 681 million US dollars in 2012 to 914 million US dollars in 2016, showing steady revenue expansion.
- Operating Income
- Incremental increase from 374 million US dollars in 2012 to 541 million US dollars in 2016, reflecting rising operational profitability.
- Segment Profit Margin
- Improvement from 54.92% to 59.19% between 2012 and 2016, indicating enhanced profitability and operational efficiency.
Overall, the data suggests sustained growth and strengthening financial performance in the segment throughout the five-year period analyzed.
Segment Capital Expenditures to Depreciation
Reynolds American Inc., capital expenditures to depreciation by reportable segment
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| RJR Tobacco | |||||
| Santa Fe | |||||
| American Snuff |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
The analysis of the annual segment capital expenditures to depreciation ratios over the five-year period reveals distinct trends among the three segments examined.
- RJR Tobacco
- The ratio for this segment demonstrates a consistent upward trend, starting at 0.36 in 2012 and progressively increasing each year to reach 1.69 by 2016. This steady increase indicates a growing level of capital expenditures relative to depreciation, suggesting increased investment in assets or expansion activities within this segment over time.
- Santa Fe
- The data for Santa Fe shows more volatility. The ratio begins at a high level of 2.00 in 2012, then decreases sharply to 0.67 in 2013. This is followed by a significant rise to 2.33 in 2014 and a pronounced peak at 5.33 in 2015, before declining to 3.00 in 2016. These fluctuations suggest irregular capital spending patterns relative to asset depreciation, possibly indicative of cyclical investment demands or project-based expenditures within this segment.
- American Snuff
- This segment exhibits a generally declining trend in the ratio from 1.26 in 2012 down to 0.59 in 2015, indicating reduced capital expenditures relative to depreciation over these years. However, there is a notable rebound in 2016 with the ratio rising sharply to 1.38. This pattern may reflect a period of reduced investment followed by renewed capital expenditure activity in the most recent year.
Overall, the data suggests varying capital expenditure strategies across the segments. The RJR Tobacco segment shows a steady increase in investment relative to asset depreciation, Santa Fe's capital spending is more erratic but considerably higher on average, and American Snuff presents a cycle of reduction followed by increased expenditure. These patterns can provide insights into segment-specific operational focus and capital allocation priorities over the analyzed timeframe.
Segment Capital Expenditures to Depreciation: RJR Tobacco
Reynolds American Inc.; RJR Tobacco; segment capital expenditures to depreciation calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Cash capital expenditures | |||||
| Depreciation and amortization expense | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Segment capital expenditures to depreciation = Cash capital expenditures ÷ Depreciation and amortization expense
= ÷ =
- Cash Capital Expenditures
- There is a clear upward trend in cash capital expenditures over the five-year period. The expenditures increased from 36 million US dollars in 2012 to 130 million US dollars in 2016. This represents a more than threefold increase, indicating a significant rise in investment spending within the segment.
- Depreciation and Amortization Expense
- The depreciation and amortization expense shows a decreasing trend from 99 million US dollars in 2012 to 65 million US dollars in 2014, followed by a modest increase to 77 million US dollars in 2016. Overall, the expense remains relatively stable with some fluctuations, suggesting that the segment's asset base has not undergone drastic changes in valuation or useful life assumptions during this period.
- Segment Capital Expenditures to Depreciation Ratio
- This ratio has steadily increased from 0.36 in 2012 to 1.69 in 2016. The rising ratio indicates that capital expenditures are growing at a faster pace relative to depreciation expenses. This may imply aggressive asset additions or upgrades, reflecting an expansion or modernization of the asset base. The ratio surpassing 1.00 from 2015 onwards highlights that investments are exceeding the asset wear and tear accounted for by depreciation.
Segment Capital Expenditures to Depreciation: Santa Fe
Reynolds American Inc.; Santa Fe; segment capital expenditures to depreciation calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Cash capital expenditures | |||||
| Depreciation and amortization expense | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Segment capital expenditures to depreciation = Cash capital expenditures ÷ Depreciation and amortization expense
= ÷ =
The analysis of the financial data reveals several notable trends in the segment's capital expenditure and depreciation activities from 2012 through 2016.
- Cash Capital Expenditures
- There is a fluctuating but generally increasing pattern in cash capital expenditures over the five-year period. The expenditures began at US$4 million in 2012, dropped to US$2 million in 2013, then experienced a significant rise to US$7 million in 2014. This upward trajectory continued more sharply in 2015, reaching US$16 million, before slightly decreasing to US$12 million in 2016. The substantial increase in 2015 indicates a period of intensified investment in capital assets.
- Depreciation and Amortization Expense
- Depreciation and amortization expenses showed a relatively stable trend with a slight upward movement. Starting at US$2 million in 2012, the expense increased to US$3 million in 2013 and remained steady at this level through 2015. In 2016, it rose to US$4 million. This gradual increase suggests consistent aging or capitalization of fixed assets over the years.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of segment capital expenditures to depreciation presents considerable variability. It began at a high level of 2.00 in 2012, dropped markedly to 0.67 in 2013, then surged to 2.33 in 2014. The peak was reached in 2015 at 5.33, reflecting a very high level of capital investment relative to depreciation expense. The ratio then decreased to 3.00 in 2016. This pattern indicates periods of intensified capital spending relative to the expense recognition, with notable peaks in 2014 and 2015 suggesting strategic investment phases or asset expansion initiatives.
Overall, the data suggest a strategic emphasis on capital investments particularly in 2014 and 2015, with an increasing depreciation expense reflecting asset usage and aging. The variability in capital expenditure relative to depreciation suggests a dynamic approach to asset management and investment timing within the segment.
Segment Capital Expenditures to Depreciation: American Snuff
Reynolds American Inc.; American Snuff; segment capital expenditures to depreciation calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Cash capital expenditures | |||||
| Depreciation and amortization expense | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Segment capital expenditures to depreciation = Cash capital expenditures ÷ Depreciation and amortization expense
= ÷ =
The analysis of the American Snuff segment's capital expenditures and depreciation trends from 2012 to 2016 reveals several notable patterns.
- Cash Capital Expenditures
- Cash capital expenditures decreased steadily from 24 million US dollars in 2012 to 10 million in 2015, indicating a reduction in investment activities during this period. However, in 2016, there was a significant increase to 22 million US dollars, suggesting a renewed focus on capital investment at the end of the observed period.
- Depreciation and Amortization Expense
- The depreciation and amortization expense exhibited a gradual decline over the five years, starting at 19 million US dollars in 2012 and falling to 16 million US dollars in 2016. This slow but steady decrease may reflect aging assets or reduced capitalized asset additions prior to 2016.
- Segment Capital Expenditures to Depreciation Ratio
- This ratio, which compares capital expenditures against depreciation, decreased from 1.26 in 2012 to a low of 0.59 in 2015, reflecting a period where capital spending was significantly below the depreciation expense, suggesting a potential underinvestment relative to asset consumption. The ratio then sharply increased to 1.38 in 2016, surpassing the initial 2012 level and indicating a robust capital expenditure surge relative to asset depreciation.
Overall, the segment experienced a period of reduced capital investment coupled with declining depreciation expenses through 2015. This trend reversed in 2016 with a marked increase in capital expenditures, implying an investment cycle renewal which may be aimed at asset replacement or expansion initiatives.
Net sales
Reynolds American Inc., net sales by reportable segment
US$ in millions
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| RJR Tobacco | |||||
| Santa Fe | |||||
| American Snuff | |||||
| All Other | |||||
| Consolidated |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
- RJR Tobacco Segment
- The net sales for this segment showed a moderate decline from 2012 to 2013, decreasing from 6960 million US dollars to 6728 million US dollars. The figure then remained relatively stable in 2014 at 6767 million US dollars. A notable increase occurred in the period from 2014 to 2015, with net sales rising sharply to 8634 million US dollars, followed by continued growth reaching 10314 million US dollars in 2016. Overall, the segment exhibited substantial expansion in the last two years of the period analyzed.
- Santa Fe Segment
- This segment demonstrated consistent growth across the entire span of the data. Beginning at 486 million US dollars in 2012, net sales increased steadily each year, reaching 572 million in 2013, 658 million in 2014, and 818 million in 2015, and further advancing to 973 million US dollars by 2016. The growth trajectory here was steady and positive, indicating strengthening performance in this segment throughout the five-year period.
- American Snuff Segment
- The American Snuff segment also experienced continual growth over the observed years. Starting at 681 million US dollars in 2012, sales increased each subsequent year, reaching 745 million in 2013, 783 million in 2014, 855 million in 2015, and finally 914 million US dollars in 2016. While the increments each year were somewhat modest, the trend reflected sustained expansion.
- All Other Segment
- This segment showed an overall upward trend in net sales from 2012 through 2015, escalating from 177 million US dollars in 2012 to 191 million in 2013, then a significant rise to 263 million in 2014, and further climbing to 368 million in 2015. However, a decline was observed in 2016 when sales dropped to 302 million US dollars. Despite this partial decrease, the segment’s net sales overall had increased markedly compared to the initial year.
- Consolidated Net Sales
- The consolidated net sales figures reflect the cumulative trends of all segments. Sales were relatively flat from 2012 to 2013, showing a slight decrease from 8304 million to 8236 million US dollars. This was followed by a modest rise to 8471 million in 2014. A significant increase occurred from 2014 to 2015, with consolidated net sales ascending sharply to 10675 million US dollars, and this positive momentum continued into 2016, culminating in total net sales of 12503 million US dollars. This pattern indicates overall growth driven primarily by strong performances in the RJR Tobacco, Santa Fe, and American Snuff segments, with some variability in the 'All Other' category.
Operating income (loss)
Reynolds American Inc., operating income (loss) by reportable segment
US$ in millions
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| RJR Tobacco | |||||
| Santa Fe | |||||
| American Snuff | |||||
| All Other | |||||
| Gain on divestitures | |||||
| Corporate Expense | |||||
| Consolidated |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
The data reveals several notable trends and shifts in the operating income of the various segments over the five-year period. The RJR Tobacco segment shows substantial growth, increasing from $1,735 million in 2012 to $4,922 million in 2016, with exceptions noted in 2014 where income dipped compared to the previous year. Despite this fluctuation, the overall trajectory is strongly upward, reflecting enhanced profitability within this segment.
Similarly, the Santa Fe segment demonstrates consistent growth, rising from $237 million in 2012 to $546 million in 2016. This steady increase indicates positive performance and expanding contribution to the overall income.
The American Snuff segment follows a comparable upward pattern, although the rate of increase is more moderate. Operating income progressed from $374 million in 2012 to $541 million in 2016, showing gradual strengthening across the years.
The "All Other" category displays persistent losses throughout the period, with negative values ranging from -$36 million in 2012 to a peak loss of -$265 million in 2015, before improving slightly to -$145 million in 2016. This pattern suggests recurring challenges or costs not fully offset by income in this grouping.
A significant development appears in 2015 and 2016 with the introduction of substantial gains on divestitures, recording $3,181 million and $4,861 million respectively. This infusion represents a large, non-recurring boost to income, markedly affecting consolidated results.
Corporate expenses have generally increased in magnitude from -$96 million in 2012 to a peak of -$273 million in 2015, before receding to -$156 million in 2016. This variation suggests fluctuations in overhead or administrative costs impacting overall profitability.
Consolidated operating income mirrors these combined dynamics, growing from $2,214 million in 2012 to $10,569 million in 2016. The pronounced surge from 2014 to 2015 corresponds with the recognition of divestiture gains, illustrating their significant influence on total income. Excluding these one-time gains, the consolidated income trend shows more modest growth aligned with improvements in core segments.
Overall, the data indicates robust underlying growth in primary tobacco segments, a persistent loss in minor categories, fluctuating corporate expenses, and an important impact from divestiture activities that have enhanced total operating income in the latter years under review.
Cash capital expenditures
Reynolds American Inc., cash capital expenditures by reportable segment
US$ in millions
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| RJR Tobacco | |||||
| Santa Fe | |||||
| American Snuff | |||||
| All Other | |||||
| Consolidated |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
- RJR Tobacco
- The capital expenditures for RJR Tobacco exhibit an overall upward trend throughout the observed period. Starting at 36 million USD in 2012, expenditures rose steadily to 55 million USD in 2013 and remained relatively stable at 53 million USD in 2014. A significant increase occurred in 2015 and 2016, with expenditures climbing to 84 million USD and then to 130 million USD, representing the highest level in the five-year period.
- Santa Fe
- Santa Fe's capital expenditures fluctuated over the five years, showing an initial decrease from 4 million USD in 2012 to 2 million USD in 2013. This was followed by a marked increase to 7 million USD in 2014 and a further rise to 16 million USD in 2015. However, in 2016, expenditures declined to 12 million USD. Despite these fluctuations, the overall trend from the low point in 2013 to a moderate level in 2016 indicates cautious capital investment.
- American Snuff
- Capital expenditures in American Snuff demonstrate a general declining trend from 2012 through 2015, dropping from 24 million USD in 2012 to 10 million USD in 2015. In 2016, there was a noticeable rebound to 22 million USD. This pattern suggests a reduction in investment activities over the initial years, followed by a strategic increase in the final year considered.
- All Other
- The "All Other" category saw a substantial increase in capital expenditures between 2012 and 2014, starting at 24 million USD and escalating sharply to 132 million USD in 2014. After this peak, expenditures declined to 64 million USD in 2015 and further to 42 million USD in 2016. This pattern indicates a period of concentrated investment followed by retrenchment in subsequent years.
- Consolidated
- At the consolidated level, capital expenditures rose consistently from 88 million USD in 2012 to 153 million USD in 2013 and further to 204 million USD in 2014. A slight decrease to 174 million USD was observed in 2015, followed by an increase to 206 million USD in 2016. The consolidated data reflect overall growth in capital investments, albeit with minor fluctuations during the mid-period, aligning with the individual segment trends.
Depreciation and amortization expense
Reynolds American Inc., depreciation and amortization expense by reportable segment
US$ in millions
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| RJR Tobacco | |||||
| Santa Fe | |||||
| American Snuff | |||||
| All Other | |||||
| Consolidated |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
- Overall Depreciation and Amortization Expense Trends
- The consolidated depreciation and amortization expense exhibited a decline from 131 million US dollars in 2012 to 103 million in 2013, followed by a slight recovery and stabilization around 106 million in 2014. This upward trend continued with an increase to 122 million in 2015 and a marginal rise to 123 million in 2016, indicating a general growth in these expenses after the initial decrease.
- Segment Analysis: RJR Tobacco
- RJR Tobacco, the largest contributor, showed a notable decrease in depreciation and amortization expense from 99 million in 2012 to 68 million in 2013. Subsequently, there was a gradual increase with values of 65 million in 2014, 71 million in 2015, and 77 million in 2016. This pattern suggests a recovery phase following the initial decline and a slightly upward trajectory in recent years.
- Segment Analysis: Santa Fe
- The Santa Fe segment maintained relatively low and stable depreciation and amortization expenses, starting at 2 million in 2012 and increasing marginally to 3 million in 2013, 2014, and 2015. A slight increase to 4 million was observed in 2016, indicating modest growth in expense allocation within this segment over the period.
- Segment Analysis: American Snuff
- American Snuff experienced a gradual decrease in depreciation and amortization expenses across the observed years, from 19 million in 2012 to 16 million in 2016. The reduction was steady, with minor declines between consecutive years, highlighting a consistent downward trend in these expenses for the segment.
- Segment Analysis: All Other
- The 'All Other' category demonstrated an increasing trend from 11 million in 2012 to a peak of 31 million in 2015. However, it experienced a drop to 26 million in 2016. This indicates an overall rising impact of other segments or miscellaneous expenses on total depreciation and amortization, with some volatility in the final year.