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    Reynolds American Issues Earnings Guidance

    Company projects 2004 operating income of $1 to $1.05 billion.

    CHARLOTTE, N.C. -- Reynolds American Inc., the tobacco company created by the recent merger of R.J. Reynolds Tobacco Co. and Brown & Williamson Tobacco Corp., told Wall Street investors Wednesday that it expects to report 2004 earnings per share in the $5.75 to $6.05 range, reported the Associated Press.

    The Winston-Salem-based company also projected 2004 operating income of $1 billion to $1.05 billion and net income of $645 million to $675 million.

    Since the merger was announced last October, shares of R.J. Reynolds have nearly doubled from about $42 to their current level.

    "As you all know, on July 30 we completed the combination of R.J. Reynolds and the U.S. businesses of Brown & Williamson," Dianne Neal, Reynolds American's CFO, told industry analysts on a conference call. "Since the merger, we have implemented many changes. Our first month has gone well."

    CEO Susan Ivey said in a statement that the merger was proceeding smoothly. "In the six weeks since we completed the merger, we've made considerable progress in integrating R.J. Reynolds and the U.S. business of B&W," she said.

    "The marketing and sales organizations have already been consolidated, and we have begun developing a combined brand-portfolio strategy that we plan to implement in early 2005," she added. "I am very pleased with the passion and commitment that all of our employees are bringing to the new, combined company."

    The company said the operating income includes $500 million to $550 million of cost savings associated with the restructuring plan announced in the fall of 2003.

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