Analysis of Reportable Segments
Reynolds American Inc. operates in 3 segments: RJR Tobacco; Santa Fe; and American Snuff.
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 | 47.72% | 38.90% | 32.11% | 38.45% | 24.93% |
| Santa Fe | 56.12% | 54.89% | 51.22% | 48.95% | 48.77% |
| American Snuff | 59.19% | 58.71% | 55.94% | 56.38% | 54.92% |
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).
| Segment profitability ratio | Reportable segment | The company |
|---|---|---|
| Segment profit margin | RJR Tobacco | RJR Tobacco segment profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Santa Fe | Santa Fe segment profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. | |
| American Snuff | American Snuff segment profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
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) | 4,922) | 3,359) | 2,173) | 2,587) | 1,735) |
| Net sales | 10,314) | 8,634) | 6,767) | 6,728) | 6,960) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 47.72% | 38.90% | 32.11% | 38.45% | 24.93% |
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 × 4,922 ÷ 10,314 = 47.72%
| Segment profitability ratio | Reportable segment | The company |
|---|---|---|
| Segment profit margin | RJR Tobacco | RJR Tobacco segment profit margin ratio improved from 2014 to 2015 and from 2015 to 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) | 546) | 449) | 337) | 280) | 237) |
| Net sales | 973) | 818) | 658) | 572) | 486) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 56.12% | 54.89% | 51.22% | 48.95% | 48.77% |
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 × 546 ÷ 973 = 56.12%
| Segment profitability ratio | Reportable segment | The company |
|---|---|---|
| Segment profit margin | Santa Fe | Santa Fe segment profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
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) | 541) | 502) | 438) | 420) | 374) |
| Net sales | 914) | 855) | 783) | 745) | 681) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 59.19% | 58.71% | 55.94% | 56.38% | 54.92% |
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 × 541 ÷ 914 = 59.19%
| Segment profitability ratio | Reportable segment | The company |
|---|---|---|
| Segment profit margin | American Snuff | American Snuff segment profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
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 | 1.69 | 1.18 | 0.82 | 0.81 | 0.36 |
| Santa Fe | 3.00 | 5.33 | 2.33 | 0.67 | 2.00 |
| American Snuff | 1.38 | 0.59 | 0.71 | 0.83 | 1.26 |
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).
| Segment financial ratio | Reportable segment | The company |
|---|---|---|
| Segment capital expenditures to depreciation | RJR Tobacco | RJR Tobacco segment capital expenditures to depreciation ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Santa Fe | Santa Fe segment capital expenditures to depreciation ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016 not reaching 2014 level. | |
| American Snuff | American Snuff segment capital expenditures to depreciation ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level. |
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 | 130) | 84) | 53) | 55) | 36) |
| Depreciation and amortization expense | 77) | 71) | 65) | 68) | 99) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.69 | 1.18 | 0.82 | 0.81 | 0.36 |
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
= 130 ÷ 77 = 1.69
| Segment financial ratio | Reportable segment | The company |
|---|---|---|
| Segment capital expenditures to depreciation | RJR Tobacco | RJR Tobacco segment capital expenditures to depreciation ratio improved from 2014 to 2015 and from 2015 to 2016. |
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 | 12) | 16) | 7) | 2) | 4) |
| Depreciation and amortization expense | 4) | 3) | 3) | 3) | 2) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 3.00 | 5.33 | 2.33 | 0.67 | 2.00 |
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
= 12 ÷ 4 = 3.00
| Segment financial ratio | Reportable segment | The company |
|---|---|---|
| Segment capital expenditures to depreciation | Santa Fe | Santa Fe segment capital expenditures to depreciation ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016 not reaching 2014 level. |
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 | 22) | 10) | 12) | 15) | 24) |
| Depreciation and amortization expense | 16) | 17) | 17) | 18) | 19) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.38 | 0.59 | 0.71 | 0.83 | 1.26 |
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
= 22 ÷ 16 = 1.38
| Segment financial ratio | Reportable segment | The company |
|---|---|---|
| Segment capital expenditures to depreciation | American Snuff | American Snuff segment capital expenditures to depreciation ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level. |
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 | 10,314) | 8,634) | 6,767) | 6,728) | 6,960) |
| Santa Fe | 973) | 818) | 658) | 572) | 486) |
| American Snuff | 914) | 855) | 783) | 745) | 681) |
| All Other | 302) | 368) | 263) | 191) | 177) |
| Consolidated | 12,503) | 10,675) | 8,471) | 8,236) | 8,304) |
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).
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 | 4,922) | 3,359) | 2,173) | 2,587) | 1,735) |
| Santa Fe | 546) | 449) | 337) | 280) | 237) |
| American Snuff | 541) | 502) | 438) | 420) | 374) |
| All Other | (145) | (265) | (234) | (70) | (36) |
| Gain on divestitures | 4,861) | 3,181) | —) | —) | —) |
| Corporate Expense | (156) | (273) | (183) | (85) | (96) |
| Consolidated | 10,569) | 6,953) | 2,531) | 3,132) | 2,214) |
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).
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 | 130) | 84) | 53) | 55) | 36) |
| Santa Fe | 12) | 16) | 7) | 2) | 4) |
| American Snuff | 22) | 10) | 12) | 15) | 24) |
| All Other | 42) | 64) | 132) | 81) | 24) |
| Consolidated | 206) | 174) | 204) | 153) | 88) |
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).
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 | 77) | 71) | 65) | 68) | 99) |
| Santa Fe | 4) | 3) | 3) | 3) | 2) |
| American Snuff | 16) | 17) | 17) | 18) | 19) |
| All Other | 26) | 31) | 21) | 14) | 11) |
| Consolidated | 123) | 122) | 106) | 103) | 131) |
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).