Reynolds American (RAI) 10-Q 26 Jul 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 05, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Trading Symbol	RAI
Entity Registrant Name	REYNOLDS AMERICAN INC
Entity Central Index Key	1,275,283
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,427,341,241

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Net sales	[1]	$ 3,141	$ 2,349	$ 6,003	$ 4,324
Net sales, related party		54	54	109	136
Net sales		3,195	2,403	6,112	4,460
Costs and expenses:
Cost of products sold	[1]	1,275	1,084	2,440	1,934
Selling, general and administrative expenses		499	451	964	962
Gain on divestitures			(3,499)	(4,861)	(3,499)
Amortization expense		6	3	12	6
Operating income		1,415	4,364	7,557	5,057
Interest and debt expense		152	105	326	196
Interest income		(2)		(5)	(1)
Other (income) expense, net		(1)	20	251	3
Income before income taxes		1,266	4,239	6,985	4,859
Provision for income taxes		470	2,311	2,624	2,542
Net income		$ 796	$ 1,928	$ 4,361	$ 2,317
Basic income per share:
Net income		$ 0.56	$ 1.70	$ 3.06	$ 2.11
Diluted income per share:
Net income		0.56	1.69	3.05	2.10
Dividends declared per share		$ 0.42	$ 0.335	$ 0.84	$ 0.67
[1]	Excludes excise taxes of $1,120 million and $987 million for the three months ended June 30, 2016 and 2015, respectively; and $2,150 million and $1,827 million for the six months ended June 30, 2016 and 2015, respectively.

CONDENSED CONSOLIDATED STATEME3

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Excise taxes	$ 1,120	$ 987	$ 2,150	$ 1,827

CONDENSED CONSOLIDATED STATEME4

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 796	$ 1,928	$ 4,361	$ 2,317
Other comprehensive income (loss), net of tax (benefit) expense:
Retirement benefits, net of tax of $25, $(12), $21 and $(16), respectively	39	(20)	33	(26)
Unrealized gain on long-term investments, net of tax of $2 and $2, respectively	4	0	5	0
Realized gain on long-term investments, net of tax of $1	0	0	(2)	0
Realized loss on hedging instruments, net of tax of $6	0	0	11	0
Amortization of realized loss on hedging instruments, net of tax	0	1	0	1
Cumulative translation adjustment and other, net of tax of $(2), $2, $9 and $(10), respectively	(5)	10	17	(17)
Comprehensive income	$ 834	$ 1,919	$ 4,425	$ 2,275

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
Tax expense (benefit), retirement benefits	$ 25	$ (12)	$ 21	$ (16)
Tax expense (benefit), unrealized gain on long-term investments	2		2
Tax expense, realized gain on long-term investments			1
Tax expense, realized loss on hedging instruments			6
Tax expense (benefit), cumulative translation adjustment and other	$ (2)	$ 2	$ 9	$ (10)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from (used in) operating activities:
Net income	$ 4,361	$ 2,317
Adjustments to reconcile to net cash flows from (used in) operating activities:
Gain on divestitures	(4,861)	(3,499)
Loss on early extinguishment of debt and related expenses	239
Depreciation and amortization expense	61	56
Deferred income tax expense (benefit)	104	(381)
Pension and postretirement	(397)	(63)
Tobacco settlement	(1,114)	(590)
Income taxes payable	770	2,246
Other, net	112	362
Net cash flows from (used in) operating activities	(725)	448
Cash flows from (used in) investing activities:
Capital expenditures	(94)	(64)
Proceeds from settlement of short-term investments	159
Acquisition, net of cash acquired		(17,219)
Proceeds from divestitures	5,015	7,056
Proceeds from settlement of long-term investments	23	1
Net cash flows from (used in) investing activities	5,103	(10,226)
Cash flows from (used in) financing activities:
Dividends paid on common stock	(1,113)	(712)
Repurchase of common stock	(149)	(40)
Proceeds from BAT Share Purchase		4,673
Early extinguishment of debt	(3,650)
Redemption premium for early extinguishment of debt	(119)
Make-whole premium for early extinguishment of debt	(88)
Proceeds from termination of interest rate swaps	66
Debt issuance costs and financing fees	(7)	(64)
Issuance of long-term debt		8,975
Borrowings under revolving credit facility		1,400
Repayments of borrowings under revolving credit facility		(1,400)
Excess tax benefit on stock-based compensation plans	26	15
Net cash flows from (used in) financing activities	(5,034)	12,847
Effect of exchange rate changes on cash and cash equivalents	7	(22)
Net change in cash and cash equivalents	(649)	3,047
Cash and cash equivalents at beginning of period	2,567	966
Cash and cash equivalents at end of period	1,918	4,013
Income taxes paid, net of refunds	1,699	645
Interest paid	$ 378	159
Fair value of equity consideration issued in the Merger		$ 7,555

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 1,918	$ 2,567
Short-term investments	26	149
Accounts receivable	89	68
Accounts receivable, related party	33	38
Other receivables	13	35
Inventories	1,541	1,734
Deferred income taxes, net	1,018	1,032
Other current assets	267	564
Total current assets	4,905	6,187
Property, plant and equipment, net of accumulated depreciation (2016 — $1,666; 2015 — $1,643)	1,295	1,255
Trademarks and other intangible assets, net of accumulated amortization	29,455	29,467
Goodwill	15,993	15,993
Other assets and deferred charges	124	230
Total assets	51,772	53,132
Current liabilities:
Accounts payable	191	179
Tobacco settlement accruals	1,696	2,816
Due to related party	2	9
Deferred revenue, related party	16	33
Current maturities of long-term debt	501	506
Dividends payable on common stock	599	514
Income taxes payable	628
Other current liabilities	1,145	1,234
Total current liabilities	4,778	5,291
Long-term debt (less current maturities)	13,192	16,849
Deferred income taxes, net	10,366	10,236
Long-term retirement benefits (less current portion)	1,813	2,265
Other noncurrent liabilities	223	239
Commitments and contingencies:
Shareholders’ equity:
Common stock (shares issued: 2016 — 1,427,341,241; 2015 — 1,427,341,341)	0	0
Paid-in capital	18,329	18,402
Retained earnings	3,345	188
Accumulated other comprehensive loss	(274)	(338)
Total shareholders’ equity	21,400	18,252
Total liabilities and shareholders' equity	$ 51,772	$ 53,132

CONDENSED CONSOLIDATED BALANCE8

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Property, plant and equipment, accumulated depreciation	$ 1,666	$ 1,643
Common stock, shares issued	1,427,341,241	1,427,341,341

Business and Summary of Signifi

Business and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Business and Summary of Significant Accounting Policies	Note 1 — Business and Summary of Significant Accounting Policies Overview The condensed consolidated financial statements (unaudited) include the accounts of Reynolds American Inc., referred to as RAI, and its wholly owned subsidiaries. RAI’s wholly owned operating subsidiaries include R. J. Reynolds Tobacco Company; Santa Fe Natural Tobacco Company, Inc., referred to as SFNTC; American Snuff Company, LLC, referred to as American Snuff Co.; R. J. Reynolds Vapor Company, referred to as RJR Vapor; Niconovum USA, Inc.; Niconovum AB; and until their sale on January 13, 2016, as described below, SFR Tobacco International GmbH, referred to as SFRTI, and various foreign subsidiaries affiliated with SFRTI. RAI was incorporated as a holding company in the State of North Carolina in 2004, and its common stock is listed on the New York Stock Exchange, referred to as NYSE, under the symbol “RAI.” RAI was created to facilitate the business combination of the U.S. business of Brown & Williamson Holdings, Inc., referred to as B&W, an indirect wholly owned subsidiary of British American Tobacco p.l.c., referred to as BAT, with R. J. Reynolds Tobacco Company on July 30, 2004, with such combination referred to as the B&W business combination. References to RJR Tobacco prior to July 30, 2004, relate to R. J. Reynolds Tobacco Company, a New Jersey corporation and a wholly owned subsidiary of R.J. Reynolds Tobacco Holdings, Inc., referred to as RJR. References to RJR Tobacco on and subsequent to July 30, 2004, relate to the combined U.S. assets, liabilities and operations of B&W and R. J. Reynolds Tobacco Company, a North Carolina corporation. Recent Transactions On June 12, 2015, RAI acquired Lorillard Inc., n/k/a Lorillard, LLC, referred to as Lorillard, in a cash and stock transaction, valued at $25.8 billion, referred to as the Merger. Also on June 12, 2015, a wholly owned subsidiary, n/k/a ITG Brands, LLC, referred to as ITG, of Imperial Brands, PLC, f/k/a Imperial Tobacco Group PLC, acquired for approximately $7.1 billion, in a transaction referred to as the Divestiture, certain assets (1) owned by RAI subsidiaries or affiliates relating to the cigarette brands WINSTON, KOOL and SALEM, and (2) owned by Lorillard subsidiaries or affiliates related to the cigarette brand MAVERICK and the “e-vapor” brand blu (including SKYCIG), as well as Lorillard’s owned and leased real property, and certain transferred employees, together with associated liabilities. As a result of the Divestiture, RAI recognized a pre-tax gain of approximately $3.5 billion. Additionally on June 12, 2015, shortly after completion of the Merger, Lorillard Tobacco Company, LLC, a wholly owned subsidiary of Lorillard, referred to as Lorillard Tobacco, merged with and into RJR Tobacco, with RJR Tobacco continuing as the surviving entity, referred to as the Lorillard Tobacco Merger. On June 12, 2015, concurrently with the completion of the Merger and Divestiture, BAT indirectly (through a wholly owned subsidiary) purchased 77,680,259 shares of RAI common stock, prior to giving effect to RAI’s 2015 two-for-one stock split, referred to as the BAT Share Purchase, for approximately $4.7 billion, which was sufficient for BAT and its subsidiaries collectively to maintain their approximately 42% beneficial ownership in RAI. On January 13, 2016, RAI, through various subsidiaries, referred to as the Sellers, completed the sale of the international rights to the NATURAL AMERICAN SPIRIT brand name and associated trademarks, along with SFRTI and other international companies that distributed and marketed the brand outside the United States to JT International Holding BV, referred to as JTI Holding, a subsidiary of Japan Tobacco Inc., referred to as JTI, in an all-cash transaction of approximately $5 billion. The transaction did not include the rights to the NATURAL AMERICAN SPIRIT brand name and associated trademarks in the U.S. market, U.S. duty-free locations and U.S. territories or in U.S. military outlets, all of which were retained by SFNTC. See note 2 for additional information on this transaction. Operating Segments RAI’s reportable operating segments are RJR Tobacco, Santa Fe and American Snuff. The RJR Tobacco segment consists principally of the primary operations of R. J. Reynolds Tobacco Company. The Santa Fe segment consists of the domestic operations of SFNTC. The American Snuff segment consists of the primary operations of American Snuff Co. Included in All Other, among other RAI subsidiaries, are RJR Vapor, Niconovum USA, Inc., Niconovum AB, and until their sale on January 13, 2016, as described above, SFRTI and various foreign subsidiaries affiliated with SFRTI. The segments were identified based on how RAI’s chief operating decision maker allocates resources and assesses performance. Certain of RAI’s operating subsidiaries have entered into intercompany agreements for products or services with other subsidiaries. As a result, certain activities of an operating subsidiary may be included in a different segment of RAI. RAI’s operating subsidiaries primarily conduct their businesses in the United States. Basis of Presentation The accompanying interim condensed consolidated financial statements (unaudited) have been prepared in accordance with accounting principles generally accepted in the United States of America, referred to as GAAP, for interim financial information and, in management’s opinion, contain all adjustments, consisting only of normal recurring items, necessary for a fair presentation of the results for the periods presented. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All material intercompany balances have been eliminated. For interim reporting purposes, certain costs and expenses are charged to operations in proportion to the estimated total annual amount expected to be incurred primarily based on sales volumes. The results for the interim periods ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The condensed consolidated financial statements (unaudited) should be read in conjunction with the consolidated financial statements and related footnotes, which appear in RAI’s Annual Report on Form 10-K for the year ended December 31, 2015. Certain reclassifications were made to conform prior years’ financial statements to the current presentation. Certain amounts presented in note 10 are rounded in the aggregate and may not sum from the individually presented components. All dollar amounts, other than per share amounts, are presented in millions, except for amounts set forth in note 10 and as otherwise noted. All share and per share amounts reflect the two-for-one split of RAI’s common stock on August 31, 2015, unless otherwise noted. Cost of Products Sold Cost of products sold includes, among other expenses, the expenses for the Master Settlement Agreement, referred to as the MSA, and other settlement agreements with the States of Mississippi, Florida, Texas and Minnesota, which together with the MSA are collectively referred to as the State Settlement Agreements, and the user fees charged by the U.S. Food and Drug Administration, referred to as the FDA. These expenses were as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 State Settlement Agreements $ 719 $ 571 $ 1,349 $ 965 FDA user fees 49 38 99 73 In 2012, RJR Tobacco, Lorillard Tobacco, SFNTC and certain other participating manufacturers, referred to as the PMs, entered into a term sheet, referred to as the Term Sheet, with 17 states, the District of Columbia and Puerto Rico to settle certain claims related to the MSA non-participating manufacturer adjustment, referred to as the NPM Adjustment. The Term Sheet resolved claims related to volume years from 2003 through 2012 and put in place a revised method to determine future adjustments from 2013 forward as to jurisdictions that join the agreement. Subsequently, five additional states joined the Term Sheet, including two states that were found to have not diligently enforced their qualifying statutes, some on terms that were marginally more favorable to the PMs than those of the original signatories. The parties to the Term Sheet represent an allocable share of 49.87%. As a result of meeting the performance requirements associated with the Term Sheet, RJR Tobacco and Santa Fe, collectively, recognized credits of $74 million and $69 million for the three months ended June 30, 2016 and 2015, respectively, and $143 million and $135 million for the six months ended June 30, 2016 and 2015, respectively. Credits recognized in the three and six months ended June 30, 2016 and 2015, include the benefit of the additional credits received as a result of the Lorillard Tobacco Merger. In September 2013, an arbitration panel ruled six states had not diligently enforced their qualifying statutes in 2003 related to the NPM Adjustment. Certain findings by the arbitration panel against four of these states are currently in litigation and as such, the full amount of recovery from these states is uncertain. For the amounts that were certain and estimable, RJR Tobacco and Santa Fe, collectively, recognized $70 million as a reduction of cost of products sold in the six months ended June 30, 2015. No comparable amounts were recognized in the six months ended June 30, 2016. In October 2015, RJR Tobacco, SFNTC and certain other PMs entered into a settlement agreement, referred to as the NY Settlement Agreement, with the State of New York to settle certain claims related to the NPM Adjustment. The NY Settlement Agreement resolved NPM Adjustment claims related to payment years from 2004 through 2014, providing RJR Tobacco and SFNTC, collectively, with credits, of approximately $290 million, plus interest, that will be recognized through 2018 subject to meeting various performance obligations. These credits will be applied against annual payments under the MSA over a four-year period, which commenced with the April 2016 MSA payment. In addition, the NY Settlement Agreement put in place a new method to determine future adjustments from 2015 forward as to New York. RJR Tobacco and Santa Fe, collectively, recognized credits of $24 million and $46 million as a reduction to costs of products sold for the three and six months ended June 30, 2016, respectively. For additional information related to the NPM Adjustment settlement and the 2003 NPM Adjustment claim, see “—Litigation Affecting the Cigarette Industry —State Settlement Agreements—Enforcement and Validity; Adjustments” in note 10. Pension and Postretirement Pension and postretirement benefits require balance sheet recognition of the net asset or liability for the overfunded or underfunded status of defined benefit pension and other postretirement benefit plans, on a plan-by-plan basis, and recognition of changes in the funded status in the year in which the changes occur. Actuarial gains or losses are changes in the amount of either the benefit obligation or the fair value of plan assets resulting from experience different from that assumed or from changes in assumptions. Differences between actual results and actuarial assumptions are accumulated and recognized as a mark-to-market adjustment, referred to as an MTM adjustment, to the extent such net gains and losses exceed 10% of the greater of the fair value of plan assets or benefit obligations, referred to as the corridor. Actuarial gains and losses outside the corridor are generally recognized annually as of December 31, or when a plan is remeasured during an interim period. Prior service costs (credits) for pension benefits, which are changes in benefit obligations due to plan amendments, are amortized on a straight-line basis over the average remaining service period for active employees, or average remaining life expectancies for inactive employees if most of the plan obligations are due to inactive employees. Prior service costs (credits) for postretirement benefits, which are changes in benefit obligations due to plan amendments, are amortized on a straight-line basis over the expected service period to full eligibility age for active employees, or average remaining life expectancies for inactive employees if most of the plan obligations are due to inactive employees. The components of the pension benefits and the postretirement benefits are set forth below: For the Three Months Ended June 30, For the Six Months Ended June 30, Postretirement Postretirement Pension Benefits Benefits Pension Benefits Benefits 2016 2015 2016 2015 2016 2015 2016 2015 Service cost $ 4 $ 7 $ — $ — $ 8 $ 13 $ 1 $ 1 Interest cost 74 67 11 12 148 131 24 24 Expected return on plan assets (93 ) (90 ) (2 ) (3 ) (186 ) (178 ) (5 ) (6 ) Amortization of prior service cost (credit) — — (10 ) (10 ) 1 1 (21 ) (21 ) Total benefit income $ (15 ) $ (16 ) $ (1 ) $ (1 ) $ (29 ) $ (33 ) $ (1 ) $ (2 ) RAI disclosed in its financial statements for the year ended December 31, 2015, that it expects to contribute $335 million to its pension plans in 2016, of which $330 million was contributed during the first six months of 2016. Fair Value Measurement RAI determines the fair value of assets and liabilities using a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions based on the best information available in the circumstances. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. The levels of the fair value hierarchy are: Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. RAI evaluates its investments for possible impairment based on current economic conditions, credit loss experience and other criteria on a quarterly basis. The evaluation of investments for impairment requires significant judgments, including: · the identification of potentially impaired securities; · the determination of their estimated fair value; · the assessment of whether any decline in estimated fair value is other-than-temporary; and · the likelihood of selling before recovery. If there is a decline in a security’s net realizable value that is other-than-temporary and it is not likely to be sold before recovery, the decline is separated into the amount of impairment related to credit loss and the amount of impairment related to all other factors. The decline related to the credit loss is recognized in earnings, while the decline related to all other factors is recognized in accumulated other comprehensive loss. Recently Adopted Accounting Pronouncements In April 2015, the Financial Accounting Standards Board, referred to as FASB, issued an Accounting Standards Update, referred to as ASU, 2015-03, Simplifying the Presentation of Debt Issuance Costs. Interest—Imputation of Interest (Subtopic 835-30), In April 2015, the FASB issued ASU 2015-05, Internal Use Software, Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, Revenue from Contracts with Customers (Topic 606)—Deferral of the Effective Date, · ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), · ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, · ASU 2016-11, Revenue Recognition (Topic 605) and Derivative and Hedging (Topic 815) – Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting; · ASU 2016-12, Revenue Recognition from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, RAI continues to evaluate the effect this guidance will have on its results of operations, cash flows and financial position. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities, In February 2016, the FASB issued ASU 2016-02, Leases, Revenue from Contracts with Customers. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting,

Sale of International Rights to

Sale of International Rights to the Natural American Spirit Brand	6 Months Ended
	Jun. 30, 2016
Sale Of International Brand Rights [Abstract]
Sale of International Rights to the Natural American Spirit Brand	Note 2 — Sale of International Rights to the NATURAL AMERICAN SPIRIT Brand On January 13, 2016, RAI, through the Sellers, completed the sale of the international rights to the NATURAL AMERICAN SPIRIT brand name and associated trademarks, along with the international companies that distributed and marketed the brand outside the United States to JTI Holding in an all-cash transaction of approximately $5 billion. The purchase agreement, dated as of September 28, 2015, between the Sellers and JTI Holding, referred to as the 2015 Purchase Agreement, contains customary representations, warranties and covenants made by the Sellers and JTI Holding, and, for certain provisions, RAI and JTI, and contains indemnification provisions, subject to customary limitations, with respect to these and other matters, including potential litigation relating to specified claims. The 2015 Purchase Agreement also contains a guarantee of Sellers’ obligations by RAI, and a guarantee of JTI Holding’s obligations by JTI. Further, in the 2015 Purchase Agreement, RAI has agreed not to, and agreed to cause its controlled affiliates not to, engage in the business of producing, selling, distributing and developing natural, organic and additive-free combustible tobacco cigarettes and roll-your-own or make-your-own tobacco products outside of the United States, and JTI has agreed not to, and agreed to cause its controlled affiliates not to, engage in the conduct of such business in the United States, in each case, for five years following the closing of the transaction. The transaction did not include the rights to the NATURAL AMERICAN SPIRIT brand name and associated trademarks in the U.S. market, U.S. duty-free locations, and U.S. territories or in U.S. military outlets, all of which have been retained by SFNTC. With this transaction completed, the international rights to nearly all of RAI’s operating companies’ cigarette trademarks are now owned by international tobacco companies. The components of the pre-tax gain, which was recorded in the first six months of 2016, were as follows: Purchase price $ 5,015 Net assets and liabilities divested (154 ) Gain on divestiture $ 4,861

Fair Value

Fair Value	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value	Note 3 — Fair Value Fair Value of Financial Assets Financial assets carried at fair value were as follows: June 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash equivalents $ 1,865 $ — $ — $ 1,865 $ 2,454 $ — $ — $ 2,454 Short-term investments: Corporate debt securities — — — — — 96 — 96 U.S. Governmental agency obligations — — — — — 43 — 43 Commercial paper — — — — — 10 — 10 Auction rate securities — — 26 26 — — — — Other assets and deferred charges: Auction rate securities — — 34 34 — — 79 79 Mortgage-backed security — — 9 9 — — 10 10 Marketable equity security — — — — 1 — — 1 Interest rate swaps — — — — — 53 — 53 There were no transfers between the levels for the six months ended June 30, 2016, or during the year ended December 31, 2015. As of December 31, 2015, RAI’s short-term investments included corporate debt securities, U.S. Government agency obligations and commercial paper. The fair value of these investments, classified as Level 2, utilized quoted prices for identical assets in less active markets or quoted prices for similar assets in active markets. All investments classified as short-term investments as of December 31, 2015, were sold or matured during the six months ended June 30, 2016. As of December 31, 2015, RAI had investments in auction rate securities linked to corporate credit risk, in auction rate securities related to financial insurance companies, and in a mortgage-backed security, each classified as Level 3. In addition, RAI had an investment in a marketable equity security classified as Level 1. During the six months ended June 30, 2016, the auction rate securities related to financial insurance companies and the marketable equity security were sold. In addition, one of the auction rate securities linked to corporate credit risk was called by the issuer at par value of $20 million and two were reclassified to short-term as their maturities are within one year as of June 30, 2016. Any unrealized gains and losses, net of tax, were included in accumulated other comprehensive loss in RAI’s condensed consolidated balance sheet (unaudited) as of June 30, 2016, and consolidated balance sheet as of December 31, 2015. No other-than-temporary losses were recognized in the three and six months ended June 30, 2016 and 2015, respectively, related to the auction rate and mortgage-backed investments. RAI has the intent and ability to hold these investments for a period of time sufficient to allow for the recovery in market value. The fair value of the auction rate securities are linked to the longer-term credit risk of a diverse range of corporations, including, but not limited to, corporations in the manufacturing, financial and insurance sectors, and was determined by utilizing an income approach model. RAI considers the market for its auction rate securities to be inactive. Maturity dates for the remaining auction rate securities are in 2017. The fair value for the mortgage-backed security utilized a market approach. RAI has deemed the market for its mortgage-backed security to be inactive. The maturity of the mortgage-backed security has been extended to March 2017, with the annual option to extend an additional year. Given the underlying collateral and RAI’s intent to continue to extend this security, it is classified as a noncurrent asset. Financial assets classified as Level 3 investments were as follows: June 30, 2016 December 31, 2015 Cost Gross Unrealized Loss Estimated Fair Value Cost Gross Unrealized Loss Estimated Fair Value Auction rate securities $ 75 $ (15 ) $ 60 $ 99 $ (20 ) $ 79 Mortgage-backed security 15 (6 ) 9 16 (6 ) 10 $ 90 $ (21 ) $ 69 $ 115 $ (26 ) $ 89 Interest Rate Management From time to time, RAI and RJR have used interest rate swaps to manage interest rate risk on a portion of their respective debt obligations. At December 31, 2015, the fair value of the interest rate swaps, classified as Level 2, was determined by utilizing a market approach model using the notional amount of the interest rate swaps and observable inputs of time to maturity and market interest rates. As part of the Lorillard Tobacco Merger, RJR Tobacco assumed fixed to floating interest rate swap agreements that Lorillard Tobacco designated as fair value hedges of its 8.125% notes due in 2019. Under the swap agreements, RJR Tobacco received interest based on a fixed rate of 8.125% and paid interest based on a floating one-month LIBOR rate plus a spread of 4.625%. The net settlement reduced interest expense by approximately $3 million for the six months ended June 30, 2016, and $1 million for the three and six months ended June 30, 2015, respectively. In the six months ended June 30, 2016, RJR Tobacco terminated these interest rate swap agreements and received $66 million in cash. The fair value adjustment of the notes designated as the hedging instrument is being amortized as a reduction of interest expense over the expected remaining life of the notes. As of June 30, 2016, RAI and RJR Tobacco had no outstanding interest rate swaps. See note 9 for additional information relating to the interest rate swap agreements.

Intangible Assets

Intangible Assets	6 Months Ended
	Jun. 30, 2016
Goodwill And Intangible Assets Disclosure [Abstract]
Intangible Assets	Note 4 — Intangible Assets The changes in the carrying amounts of goodwill by segment were as follows: RJR Tobacco Santa Fe American Snuff All Other Consolidated Balance as of December 31, 2015 Goodwill $ 17,069 $ 197 $ 2,501 $ 17 $ 19,784 Less: accumulated impairment charges (3,763 ) — (28 ) — (3,791 ) $ 13,306 $ 197 $ 2,473 $ 17 $ 15,993 Balance as of June 30, 2016 Goodwill $ 17,069 $ 197 $ 2,501 $ 17 $ 19,784 Less: accumulated impairment charges (3,763 ) — (28 ) — (3,791 ) $ 13,306 $ 197 $ 2,473 $ 17 $ 15,993 The carrying amounts and changes therein of trademarks and other intangible assets by segment were as follows: RJR Tobacco Santa Fe American Snuff All Other Consolidated Trademarks Other Trademarks Trademarks Other Trademarks Other Indefinite-lived: Balance as of December 31, 2015 $ 27,826 $ 87 $ 136 $ 1,136 $ — $ 29,098 $ 87 Balance as of June 30, 2016 $ 27,826 $ 87 $ 136 $ 1,136 $ — $ 29,098 $ 87 Finite-lived: Balance as of December 31, 2015 $ 17 $ 259 $ — $ 6 $ — $ 23 $ 259 Intercompany transfer — (13 ) — — 13 — — Amortization (3 ) (9 ) — — — (3 ) (9 ) Balance as of June 30, 2016 $ 14 $ 237 $ — $ 6 $ 13 $ 20 $ 250 Details of finite-lived intangible assets were as follows: June 30, 2016 December 31, 2015 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer lists $ 240 $ (13 ) $ 227 $ 240 $ (7 ) $ 233 Contract manufacturing agreements 151 (141 ) 10 151 (139 ) 12 Trademarks 124 (104 ) 20 124 (101 ) 23 Other intangibles 15 (2 ) 13 15 (1 ) 14 $ 530 $ (260 ) $ 270 $ 530 $ (248 ) $ 282 The estimated remaining amortization expense associated with finite-lived intangible assets is expected to be as follows: Year Amount Remainder of 2016 $ 11 2017 23 2018 22 2019 16 2020 15 Thereafter 183 $ 270

Income Per Share

Income Per Share	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Income Per Share	Note 5 — Income Per Share The components of the calculation of income per share were as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 Net income $ 796 $ 1,928 $ 4,361 $ 2,317 Basic weighted average shares, in thousands 1,427,413 1,136,354 1,427,430 1,099,704 Effect of dilutive potential shares: Restricted stock units 2,554 3,002 3,088 3,497 Diluted weighted average shares, in thousands 1,429,967 1,139,356 1,430,518 1,103,201

Inventories

Inventories	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
Inventories	Note 6 — Inventories The major components of inventories were as follows: June 30, 2016 December 31, 2015 Leaf tobacco $ 1,327 $ 1,495 Other raw materials 82 110 Work in process 84 88 Finished products 183 173 Other 24 22 Total 1,700 1,888 LIFO allowance (159 ) (154 ) $ 1,541 $ 1,734 RJR Tobacco performs its annual LIFO inventory valuation at December 31. Interim periods represent an estimate of the expected annual valuation.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Note 7 — Income Taxes The provision for income taxes was as follows: For the Three Months For the Six Months Ended June 30, Ended June 30, 2016 2015 2016 2015 Provision for income taxes $ 470 $ 2,311 $ 2,624 $ 2,542 Effective tax rate 37.1 % 54.5 % 37.6 % 52.3 % The effective tax rate for the six months ended June 30, 2016, was impacted by an increase in tax attributable to the sale of the international rights to the NATURAL AMERICAN SPIRIT brand name and associated trademarks, along with the international companies that distributed and marketed the brand outside the United States. The effective tax rate for the three and six months ended June 30, 2015, was unfavorably impacted by an increase in tax attributable to nondeductible costs related to the Merger, partially offset by a decrease in tax attributable to a reduction in state income taxes. The effective tax rate for each period differed from the federal statutory rate of 35% due to the domestic manufacturing deduction of the American Jobs Creation Act of 2004, state income taxes and certain nondeductible items.

Credit Agreement

Credit Agreement	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Credit Agreement	Note 8 — Credit Agreement In December 2014, RAI entered into a credit agreement, referred to as the Credit Agreement, with a syndicate of lenders, providing for a five-year, $2 billion senior unsecured revolving credit facility, which may be increased to $2.35 billion at the discretion of the lenders upon the request of RAI. In October 2015, the requisite lenders agreed, at RAI’s request, to extend the maturity date of the Credit Agreement by 12 months to December 18, 2020. Subject to the terms and conditions stated therein, the maturity date of the Credit Agreement may be extended further, upon the request of RAI and with the consent of the requisite lenders, an additional 12 months to December 18, 2021. Subject to certain conditions, RAI is able to use the revolving credit facility under the Credit Agreement for borrowings and issuances of letters of credit at its option, subject to a $300 million sublimit on the aggregate amount of letters of credit. Issuances of letters of credit reduce availability under such revolving credit facility. The Credit Agreement contains certain customary restrictive covenants, and two financial covenants – a consolidated leverage ratio covenant and a consolidated interest coverage ratio covenant. The Credit Agreement contains customary events of default, including upon a change in control, as defined therein, which could result in the acceleration of all amounts and cancellation of all commitments outstanding under the Credit Agreement. The lenders’ obligations under the Credit Agreement to fund borrowings are subject to the accuracy of RAI’s representations and warranties and the absence of any default, provided, however, that the accuracy of RAI’s representation as to the absence of any material adverse effect, as defined in the Credit Agreement, is not a condition to borrowing for the purpose of refinancing any maturing commercial paper. Under the terms of the Credit Agreement, RAI is required to pay a facility fee of between 0.100% and 0.275%, based generally on the ratings of RAI’s senior, unsecured, long-term indebtedness, per annum on the lender commitments in respect of the revolving credit facility thereunder. Borrowings under the Credit Agreement bear interest, at the option of RAI, at a rate equal to an applicable margin based generally on the ratings of RAI’s senior, unsecured, long-term indebtedness, plus: · the alternate base rate, which is the higher of (1) the federal funds effective rate from time to time plus 0.5%, (2) the prime rate and (3) the reserve adjusted eurodollar rate for a one month interest period plus 1%; or · the eurodollar rate, which is the reserve adjusted rate at which eurodollar deposits for one, two, three or six months are offered in the interbank eurodollar market. Overdue principal outstanding under the revolving credit facility under the Credit Agreement bears interest at a rate equal to the rate then in effect with respect to such borrowings, plus 2.0% per annum. Any amount besides principal that becomes overdue bears interest at a rate equal to 2.0% per annum in excess of the rate of interest applicable to base rate loans. Certain of RAI’s subsidiaries, including its Material Subsidiaries, as defined in the Credit Agreement, have guaranteed, on an unsecured basis, RAI’s obligations under the Credit Agreement. Under the Credit Agreement, any new Material Subsidiary of RAI must be added as a guarantor of the Credit Agreement. As of June 30, 2016, there were no outstanding borrowings and $6 million of letters of credit outstanding under the Credit Agreement.

Long-Term Debt

Long-Term Debt	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Long-Term Debt	Note 9 — Long-Term Debt Tender Offer and Redemption RAI’s cash tender offer for up to $2.81 billion aggregate purchase price (excluding accrued and unpaid interest to, but not including, the settlement date of February 22, 2016, and excluding related fees and expenses), referred to as the Tender Cap, for certain of its outstanding notes listed in the table below, collectively referred to as the Tender Notes, expired as of 11:59 p.m., New York City time on March 3, 2016. RAI accepted for purchase $2.69 billion in aggregate principal amount of Tender Notes validly tendered and not validly withdrawn on or prior to 5 p.m., New York City time, on February 18, 2016, referred to as the Early Tender Date. On February 22, 2016, RAI paid, with cash on hand, aggregate total consideration of $2.81 billion (including the early tender premium of $30 per $1,000 principal amount of Tender Notes of approximately $118 million, but excluding accrued and unpaid interest) for such Tender Notes accepted for purchase. In addition, RAI recognized $22 million of unamortized discount and unamortized debt issuance costs related to the Tender Notes as a loss on early extinguishment of debt. As described in the Offer to Purchase, dated February 4, 2016, and the related Letter of Transmittal, as amended, collectively referred to as the Tender Offer Documents, RAI accepted for purchase 100% of the Tender Notes validly tendered and not validly withdrawn for the series listed in the table below in acceptance priority levels 1 through 3. Due to oversubscription, RAI accepted for purchase Tender Notes validly tendered and not validly withdrawn for the series listed in the table below in acceptance priority level 4 on a pro rata basis in accordance with the proration procedures described in the Tender Offer Documents. RAI did not accept for purchase any of the Tender Notes for the series listed in the table below in acceptance priority levels 5 through 7. Title of Security Acceptance Priority Level Principal Tendered at Expiration Principal Amount of Tender Notes Accepted for Purchase Percentage of Outstanding Tender Notes Purchased 4.750% Senior Notes due 2042 1 $ 827 $ 827 82.71% 3.250% Senior Notes due 2022 2 942 942 85.59% 3.750% Senior Notes due 2023 3 444 444 93.76% 3.250% Senior Notes due 2020 (1) 4 1,039 479 38.34% 4.000% Senior Notes due 2022 5 766 — 0.00% 4.450% Senior Notes due 2025 6 1,773 — 0.00% 4.850% Senior Notes due 2023 7 416 — 0.00% (1) Series prorated Since aggregate consideration payable to holders of Tender Notes validly tendered and not validly withdrawn exceeded the Tender Cap on or prior to the Early Tender Date, RAI did not accept for purchase any additional tenders of Tender Notes made after the Early Tender Date. In May 2012, RAI entered into forward starting interest rate contracts with an aggregate notional amount of $1 billion. RAI designated those derivatives as cash flow hedges of a future debt issuance. In October 2012, RAI completed the sale of notes that had been forecasted, and the 3.250% Tender Notes due 2022 and the 4.750% Tender Notes due 2042 were designated as the hedged instruments under these derivative contracts. The forward starting interest rate contracts were immediately terminated, and the effective portion of the loss incurred was recorded in accumulated other comprehensive loss in the consolidated balance sheets and was amortized over the life of the related debt. The amount of 3.250% Tender Notes due 2022 and the 4.750% Tender Notes due 2042 repurchased in the tender offer exceeded the original notional amount of the forward starting interest rate contracts and, accordingly, the remaining unamortized loss related to the forward starting interest rate contracts of $16 million was recognized as expense upon completion of the tender offer. The 3.750% Tender Notes due 2023 had a carrying value that exceeded face value as this debt was assumed in the Lorillard Tobacco Merger and recorded at fair value in purchase accounting. Approximately 94% of this fair value adjustment, or $11 million, which represents the proportional amount of Tender Notes repurchased in this series, was recognized as part of the loss on early extinguishment of debt. Pursuant to its previously announced redemption call, on March 5, 2016, RAI redeemed all $700 million outstanding aggregate principal amount of its 6.750% Senior Notes due 2017 and all $250 million outstanding aggregate principal amount of its 7.750% Senior Notes due 2018. In connection with the redemption, RAI recorded a loss on early extinguishment of debt of $90 million, which consisted of $88 million in make-whole premiums paid to noteholders as part of the redemption and $2 million for unamortized discount and unamortized debt issuance costs related to the redeemed notes. In 2009, RAI and RJR entered into offsetting floating to fixed interest rate swap agreements with the same financial institution that held certain fixed to floating interest rate swaps for the same notional amount. The swaps were designated as fair value hedges. In September 2011, the original and offsetting interest rate swap agreements were terminated with the carrying value of the hedged debt reflecting a fair value adjustment treated as a premium, at the date of termination. At that point, RAI began amortizing the fair value adjustment. As of December 31, 2015, the $700 million of 6.750% notes due 2017 represented the remaining debt that had been hedged with these interest rate swap agreements. Upon the redemption of these notes, the remaining unamortized fair value adjustment for the terminated swaps of $25 million was recognized and, accordingly, reduced the loss on early extinguishment of debt. In the aggregate, expenses related to the cash tender offer and redemption of approximately $239 million, which included legal and bank fees of approximately $7 million, were recognized in other (income) expense, net in the condensed consolidated statements of income (unaudited) for the six months ended June 30, 2016. RAI and RJR Tobacco Total Long-Term Debt Information, including a schedule of maturities regarding RAI’s and RJR Tobacco’s long-term debt, is provided below: June 30, 2016 December 31, 2015 RAI 3.500% notes due 08/04/2016 $ 415 $ 415 6.750% notes due 06/15/2017 — 700 2.300% notes due 08/21/2017 447 447 7.750% notes due 06/01/2018 — 250 2.300% notes due 06/12/2018 1,250 1,250 8.125% notes due 06/23/2019 * 669 669 6.875% notes due 05/01/2020 641 641 3.250% notes due 06/12/2020 771 1,250 4.000% notes due 06/12/2022 1,000 1,000 3.250% notes due 11/01/2022 158 1,100 3.750% notes due 05/20/2023 30 474 4.850% notes due 09/15/2023 550 550 4.450% notes due 06/12/2025 2,500 2,500 5.700% notes due 08/15/2035 750 750 7.250% notes due 06/15/2037 450 450 8.125% notes due 05/01/2040 237 237 7.000% notes due 08/04/2041 240 240 4.750% notes due 11/01/2042 173 1,000 6.150% notes due 09/15/2043 550 550 5.850% notes due 08/15/2045 2,250 2,250 Total principal 13,081 16,723 Fair value adjustments 311 348 Unamortized discounts (29 ) (37 ) Unamortized debt issuance costs (71 ) (92 ) Total RAI long-term debt at carrying value $ 13,292 $ 16,942 RJR Tobacco 3.500% notes due 08/04/2016 $ 85 $ 85 2.300% notes due 08/21/2017 53 53 8.125% notes due 06/23/2019* 81 81 6.875% notes due 05/01/2020 109 109 3.750% notes due 05/20/2023 19 26 8.125% notes due 05/01/2040 13 13 7.000% notes due 08/04/2041 9 10 Total principal 369 377 Fair value adjustments 32 36 Total RJR Tobacco long-term debt at carrying value $ 401 $ 413 Total long-term debt at carrying value $ 13,693 $ 17,355 Less current maturities of long-term debt at carrying value 501 506 Total long-term debt (less current maturities) at carrying value $ 13,192 $ 16,849 * The interest rate payable on these notes generally is subject to adjustment from time to time (as detailed in the form of these notes) based upon the credit rating assigned to these notes, provided that in no event will (1) the interest rate for these notes be reduced below 8.125% or (2) the total increase in the interest rate on these notes exceed 2.0% above 8.125%. During the three months ended June 30, 2016, RJR Tobacco repurchased $8.4 million of its outstanding notes. As of June 30, 2016, the maturities of RAI’s and RJR Tobacco’s notes, excluding fair value adjustments and unamortized discounts and debt issuance costs, were as follows: Year RAI RJR Tobacco Total 2016 $ 415 $ 85 $ 500 2017 447 53 500 2018 1,250 — 1,250 2019 669 81 750 2020 1,412 109 1,521 2022 and thereafter 8,888 41 8,929 Total principal maturities $ 13,081 $ 369 $ 13,450 Fair Value of Debt The estimated fair value of RAI’s outstanding consolidated debt, in the aggregate, was $15.7 billion and $18.2 billion, with an effective average annual interest rate of approximately 4.9% and 4.6% as of June 30, 2016 and December 31, 2015, respectively. The fair values are based on available market quotes, credit spreads and discounted cash flows, as appropriate. Interest Rate Swap Agreements Termination In the first six months of 2016, RJR Tobacco terminated the interest rate swap agreements assumed in the Lorillard Tobacco Merger. The remaining fair value adjustment of $7 million for the 8.125% notes due June 23, 2019, is being amortized as a reduction of interest expense over the expected remaining life of the notes. See note 3 for additional information on interest rate management.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2016
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 10 — Commitments and Contingencies Tobacco Litigation — General Introduction Litigation, claims, and other legal proceedings relating to the use of, exposure to, or purchase of tobacco products are pending or may be instituted in the future against RJR Tobacco (including as successor by merger to Lorillard Tobacco), American Snuff Co., SFNTC, RJR Vapor, RAI, Lorillard, other RAI affiliates, and indemnitees (including B&W), sometimes referred to collectively as Reynolds Defendants. These pending legal proceedings include claims relating to cigarette products manufactured by RJR Tobacco, Lorillard Tobacco, SFNTC or certain of their affiliates or indemnitees, smokeless tobacco products manufactured by American Snuff Co., and e-cigarette products manufactured on behalf of and marketed by RJR Vapor. A discussion of the legal proceedings relating to cigarette products (and e-cigarettes) is set forth below under the heading “— Litigation Affecting the Cigarette Industry.” All of the references under that heading to tobacco-related litigation, smoking and health litigation and other similar references are references to legal proceedings relating to cigarette products or e-cigarettes, as the case may be, and are not references to legal proceedings involving smokeless tobacco products, and case numbers under that heading include only cases involving cigarette products and e-cigarettes. The legal proceedings relating to the smokeless tobacco products manufactured by American Snuff Co. are discussed separately under the heading “— Smokeless Tobacco Litigation” below. In connection with the B&W business combination, RJR Tobacco undertook certain indemnification obligations with respect to B&W and its affiliates, including its indirect parent, BAT. See “— Litigation Affecting the Cigarette Industry – Overview – Introduction” below. In connection with the Merger and Divestiture, as applicable, RAI and RJR Tobacco undertook certain indemnification obligations. See “— Litigation Affecting the Cigarette Industry – Overview – Introduction,” “— Other Contingencies – ITG Indemnity,” and “— Other Contingencies – Loews Indemnity” below. In addition, in connection with the sale of the non-U.S. operations and business of the NATURAL AMERICAN SPIRIT brand, the Sellers have agreed to indemnify the buyer for certain claims. See “— Other Contingencies – JTI Indemnities” below. Certain Terms and Phrases Certain terms and phrases used in this disclosure may require some explanation. The term “judgment” or “final judgment” refers to the final decision of the court resolving the dispute and determining the rights and obligations of the parties. At the trial court level, for example, a final judgment generally is entered by the court after a jury verdict and after post-verdict motions have been decided. In most cases, the losing party can appeal a verdict only after a final judgment has been entered by the trial court. The term “damages” refers to the amount of money sought by a plaintiff in a complaint, or awarded to a party by a jury or, in some cases, by a judge. “Compensatory damages” are awarded to compensate the prevailing party for actual losses suffered, if liability is proved. In cases in which there is a finding that a defendant has acted willfully, maliciously or fraudulently, generally based on a higher burden of proof than is required for a finding of liability for compensatory damages, a plaintiff also may be awarded “punitive damages.” Although damages may be awarded at the trial court stage, a losing party generally may be protected from paying any damages until all appellate avenues have been exhausted by posting a supersedeas bond. The amount of such a bond is governed by the law of the relevant jurisdiction and generally is set at the amount of damages plus some measure of statutory interest, modified at the discretion of the appropriate court or subject to limits set by court or statute. The term “per curiam” refers to a decision entered by an appellate court that is not signed by an individual judge. In most cases, it is used to indicate that the opinion entered is a brief announcement of the court’s decision and is not accompanied by an opinion explaining the court’s reasoning. The term “settlement” refers to certain types of cases in which cigarette manufacturers, including RJR Tobacco, B&W and Lorillard Tobacco, have agreed to resolve disputes with certain plaintiffs without resolving the cases through trial. The principal terms of certain settlements entered into by RJR Tobacco, B&W and Lorillard Tobacco are explained below under “— Accounting for Tobacco-Related Litigation Contingencies.” Theories of Recovery The plaintiffs seek recovery on a variety of legal theories, including negligence, strict liability in tort, design defect, failure to warn, fraud, misrepresentation, violations of unfair and deceptive trade practices statutes, conspiracy, medical monitoring and violations of state and federal antitrust laws. In certain of these cases, the plaintiffs claim that cigarette smoking exacerbated injuries caused by exposure to asbestos or, in the case of certain claims asserted against Lorillard Tobacco, that they were injured by exposure to filters containing asbestos used in one cigarette brand for roughly four years before 1957, the latter cases referred to as Filter Cases. The plaintiffs seek various forms of relief, including compensatory and, where available, punitive damages, treble or multiple damages and statutory damages and penalties, creation of medical monitoring and smoking cessation funds, disgorgement of profits, and injunctive and other equitable relief. Although alleged damages often are not determinable from a complaint, and the law governing the pleading and calculation of damages varies from jurisdiction to jurisdiction, compensatory and punitive damages have been specifically pleaded in a number of cases, sometimes in amounts ranging into the hundreds of millions and even billions of dollars. Defenses The defenses raised by Reynolds Defendants include, where applicable and otherwise appropriate, preemption by the Federal Cigarette Labeling and Advertising Act of some or all claims arising after 1969, or by the Comprehensive Smokeless Tobacco Health Education Act for claims arising after 1986, the lack of any defect in the product, assumption of the risk, contributory or comparative fault, lack of proximate cause, remoteness, lack of standing, statutes of limitations or repose and others. RAI, RJR and Lorillard have asserted additional defenses, including jurisdictional defenses, in many of the cases in which they are named. Accounting for Tobacco-Related Litigation Contingencies In accordance with GAAP, RAI and its subsidiaries record any loss concerning litigation at such time as an unfavorable outcome becomes probable and the amount can be reasonably estimated on an individual case-by-case basis. For the reasons set forth below, RAI’s management continues to conclude that the loss of any particular pending tobacco-related litigation claim against the Reynolds Defendants, when viewed on an individual basis, is not probable, except for certain Engle Reynolds Defendants believe that they have valid defenses to the tobacco-related litigation claims against them, as well as valid bases for appeal of adverse verdicts against them. Reynolds Defendants have, through their counsel, filed pleadings and memoranda in pending tobacco-related litigation that set forth and discuss a number of grounds and defenses that they and their counsel believe have a valid basis in law and fact. With the exception of the Engle Engle RAI’s condensed consolidated balance sheet (unaudited) as of June 30, 2016, contains accruals for the following Engle Hiott Starr-Blundell Clayton Ward Cohen Thibault Buonomo, Soffer, Ciccone, Odum, Taylor, Hallgren Hubbird. Hiott Thibault Clayton Cohen Ciccone Hallgren Taylor Odum U.S. Department of Justice It is the policy of Reynolds Defendants to defend tobacco-related litigation claims vigorously; generally, Reynolds Defendants and indemnitees do not settle such claims. However, Reynolds Defendants may enter into settlement discussions in some cases, if they believe it is in their best interests to do so. Exceptions to this general approach include actions taken pursuant to “offer of judgment” statutes, as described below in “ — Litigation Affecting the Cigarette Industry – Overview,” and Filter Cases, as described below in “— Litigation Affecting the Cigarette Industry – Filter Cases,” as well as other historical examples discussed below. With respect to smoking and health tobacco litigation claims, the only significant settlements reached by RJR Tobacco, Lorillard Tobacco and B&W involved: · the State Settlement Agreements and the funding by various tobacco companies of a $5.2 billion trust fund contemplated by the MSA to benefit tobacco growers; · the original Broin Broin II · most of the Engle The circumstances surrounding the State Settlement Agreements and the funding of a trust fund to benefit the tobacco growers are readily distinguishable from the current categories of tobacco-related litigation claims involving Reynolds Defendants. In the claims underlying the State Settlement Agreements, the states sought to recover funds paid for health care and medical and other assistance to state citizens suffering from diseases and conditions allegedly related to tobacco use. The State Settlement Agreements settled all the health-care cost recovery actions brought by, or on behalf of, the settling jurisdictions and contain releases of various additional present and future claims. In accordance with the MSA, various tobacco companies agreed to fund a $5.2 billion trust fund to be used to address the possible adverse economic impact of the MSA on tobacco growers. A discussion of the State Settlement Agreements, and a table depicting the related payment schedule, is set forth below under “— Litigation Affecting the Cigarette Industry – Health-Care Cost Recovery Cases.” As with claims that were resolved by the State Settlement Agreements, the other cases settled by RJR Tobacco can be distinguished from existing cases pending against the Reynolds Defendants. The original Broin Broin II The federal Engle Engle Engle Engle Engle Engle Engle Engle In 2010, RJR Tobacco entered into a comprehensive agreement with the Canadian federal, provincial and territorial governments, which resolved all civil claims related to the movement of contraband tobacco products in Canada during the period 1985 through 1999 that the Canadian governments could assert against RJR Tobacco and its affiliates. These claims involved different theories of recovery than the other tobacco-related litigation claims pending against the Reynolds Defendants. Also, in 2004, RJR Tobacco and B&W separately settled the antitrust case DeLoach v. Philip Morris Cos., Inc., DeLoach Finally, as discussed under “— Litigation Affecting the Cigarette Industry – State Settlement Agreements—Enforcement and Validity; Adjustments,” RJR Tobacco, B&W and Lorillard Tobacco each has settled certain cases brought by states concerning the enforcement of State Settlement Agreements. Despite legal defenses believed to be valid, these cases were settled to avoid further contentious litigation with the states involved. These enforcement actions involve alleged breaches of State Settlement Agreements based on specific actions taken by particular defendants. Accordingly, any future enforcement actions involving State Settlement Agreements will be reviewed by RJR Tobacco on the merits and should not be affected by the settlement of prior enforcement cases. Cautionary Statement Even though RAI’s management continues to believe that the loss of particular pending tobacco-related litigation claims against Reynolds Defendants when viewed on an individual case-by-case basis, is not probable or estimable (except for certain Engle Although Reynolds Defendants believe that they have valid bases for appeals of adverse verdicts in their pending cases and valid defenses to all actions and intend to defend them vigorously as described above, it is possible that there could be further adverse developments in pending cases, and that additional cases could be decided unfavorably against Reynolds Defendants. Determinations of liability or adverse rulings in such cases or in similar cases involving other cigarette manufacturers as defendants, even if such judgments are not final, could have a material adverse effect on the litigation against Reynolds Defendants and could encourage the commencement of additional tobacco-related litigation. Reynolds Defendants also may enter into settlement discussions in some cases, if they believe it is in their best interests to do so. In addition, a number of political, legislative, regulatory and other developments relating to the tobacco industry and cigarette smoking have received wide media attention. These developments may negatively affect the outcomes of tobacco-related legal actions and encourage the commencement of additional similar litigation. Although it is impossible to predict the outcome of such events on pending litigation and the rate new lawsuits may be filed against Reynolds Defendants, a significant increase in litigation or in adverse outcomes for tobacco defendants, or difficulties in obtaining the bonding required to stay execution of judgments on appeal, could have a material adverse effect on any or all of these entities. Moreover, notwithstanding the quality of defenses available to Reynolds Defendants in litigation matters, it is possible that RAI’s results of operations, cash flows or financial position could be materially adversely affected by the ultimate outcome of certain pending litigation or future claims against Reynolds Defendants. Litigation Affecting the Cigarette Industry Table of Contents Page Overview 22 Individual Smoking and Health 26 West Virginia IPIC 27 Engle and Engle Progeny Cases 27 Broin II 43 Class Actions 43 Filter Cases 48 Health-Care Cost Recovery 48 State Settlement Agreements—Enforcement and Validity; Adjustments 53 Other Litigation and Developments 56 Overview Introduction. In connection with the B&W business combination, RJR Tobacco agreed to indemnify B&W and its affiliates against, among other things, certain litigation liabilities, costs and expenses incurred by B&W or its affiliates arising out of the U.S. cigarette and tobacco business of B&W. Also, as a result of the Lorillard Tobacco Merger, Lorillard Tobacco was merged into RJR Tobacco with RJR Tobacco being the surviving entity, Lorillard Tobacco ceasing to exist, and RJR Tobacco succeeding to Lorillard Tobacco’s liabilities, including Lorillard Tobacco’s litigation liabilities, costs and expenses. Although Lorillard Tobacco no longer exists as a result of the Lorillard Tobacco Merger, it will remain as a named party in cases pending on the date of the Lorillard Tobacco Merger until courts grant motions to substitute RJR Tobacco for Lorillard Tobacco or the claims are dismissed. The cases discussed below include cases brought against RJR Tobacco, Lorillard Tobacco and their affiliates and indemnitees, including RAI, RJR, B&W and Lorillard. Cases brought against SFNTC and RJR Vapor also are discussed. During the second quarter of 2016, 34 tobacco-related cases were served against Reynolds Defendants. On June 30, 2016, there were, subject to the exclusions described immediately below, 286 cases pending against Reynolds Defendants: 269 in the United States and 17 in Canada, as compared with 262 total cases on June 30, 2015. Of the U.S. cases pending on June 30, 2016, 36 are pending in federal court, 232 in state court and one in tribal court, primarily in the following states: Maryland (47 cases); Illinois (47 cases); Florida (29 cases); New York (19 cases); Missouri (19 cases); California (15 cases); and New Mexico (13 cases). The U.S. case number excludes the approximately 564 individual smoker cases pending in West Virginia state court as a consolidated action, 2,967 Engle Broin II The following table lists the categories of the U.S. tobacco-related cases pending against Reynolds Defendants as of June 30, 2016, compared with the number of cases pending against Reynolds Defendants as of March 31, 2016, as reported in RAI’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016, filed with the SEC on April 26, 2016, and a cross-reference to the discussion of each case type. Case Type U.S. Case Numbers as of June 30, 2016 Change in Number of Cases Since March 31, 2016 Increase/(Decrease) Individual Smoking and Health 121 2 West Virginia IPIC (Number of Plaintiffs)* 1 (approx. 564) No change Engle Progeny (Number of Plaintiffs)** 2,967 (approx. 3,839) 4 (12) Broin 2,473 (15) Class Action 24 (9) Filter Cases 76 15 Health-Care Cost Recovery 2 No change State Settlement Agreements—Enforcement and Validity; Adjustments 28 No change Other Litigation and Developments 17 3 * Includes as one case the approximately 564 cases pending as a consolidated action In Re: Tobacco Litigation Individual Personal Injury Cases West Virginia IPIC West Virginia IPIC ** The Engle The Florida state court class-action case, Engle v. R. J. Reynolds Tobacco Co. Engle Engle Engle Engle Engle Scheduled Trials Trial Results Engle Engle Engle Engle Engle In November 1998, the major U.S. cigarette manufacturers, including RJR Tobacco, B&W and Lorillard Tobacco, entered into the MSA with 46 U.S. states, Washington, D.C. and certain U.S. territories and possessions. These cigarette manufacturers previously settled four other cases, brought on behalf of Mississippi, Florida, Texas and Minnesota, by separate agreements with each state. These State Settlement Agreements: · settled all health-care cost recovery actions brought by, or on behalf of, the settling jurisdictions; · released the major U.S. cigarette manufacturers from various additional present and potential future claims; · imposed future payment obligations in perpetuity on RJR Tobacco, B&W, Lorillard Tobacco and other major U.S. cigarette manufacturers; and · placed significant restrictions on their ability to market and sell cigarettes and smokeless tobacco products. Payments under the State Settlement Agreements are subject to various adjustments for, among other things, the volume of cigarettes sold, relative market share, operating profit and inflation. See “— Health-Care Cost Recovery Cases — State Settlement Agreements” below for a detailed discussion of the State Settlement Agreements, including RAI’s operating subsidiaries’ monetary obligations under these agreements. RJR Tobacco records the allocation of settlement charges as products are shipped. Scheduled Trials. Trial schedules are subject to change, and many cases are dismissed before trial. There are 34 cases, exclusive of Progeny cases, scheduled for trial as of June 30, 2016 through June 30, 2017 , for RJR Tobacco, B&W, Lorillard Tobacco or their affiliates and indemnitees: five individual smoking and health cases, 24 Filter Cases and five cases. There are approximately 105 Progeny cases against RJR Tobacco, B&W and/or Lorillard Tobacco set for trial through June 30, 2017, but it is not known how many of these cases will actually be tried. Trial Results. From January 1, 2013 through June 30, 2016, 131 smoking and health, Progeny and health-care cost recovery cases in which RJR Tobacco, B&W and/or Lorillard Tobacco were defendants were tried, including eight trials for cases where mistrials were declared in the original proceedings. Verdicts in favor of RJR Tobacco, B&W and Lorillard Tobacco and, in some cases, RJR Tobacco, B&W, Lorillard Tobacco and/or other defendants, were returned in 64 cases, including 16 mistrials, tried in Florida (62), West Virginia (1), and California (1). Verdicts in favor of the plaintiffs were returned in 60 cases tried in Florida, and one in California. Four cases in Florida were dismissed during trial. One case in Florida was a retrial only as to the amount of damages. In another case in Florida, the jury entered a partial verdict that did not include compensatory or punitive damages, and post-trial motions are pending. In the second quarter of 2016, ten Engle · In Davis v. R. J. Reynolds Tobacco Co. · In Dupre v. R. J. Reynolds Tobacco Co. · In Turner v. R. J. Reynolds Tobacco Co. · In Enochs v. R. J. Reynolds Tobacco Co. · In Pardue v. R. J. Reynolds Tobacco Co. · In Dion v. R. J. Reynolds Tobacco Co. · In Nally v. R. J. Reynolds Tobacco Co. · In McCabe v. R. J. Reynolds Tobacco Co. · In Durrance v. R. J. Reynolds Tobacco Co. · In Mooney v. R. J. Reynolds Tobacco Co. In addition, since the end of the second quarter of 2016, two other Engle · In Sermons v. Philip Morris USA Inc. · In Varner v. R. J. Reynolds Tobacco Co. For a detailed description of the above-described cases, see “— Engle Engle In the second quarter of 2016, no non- Engle For information on the verdicts in the Engle Engle Engle Engle Engle Date of Verdict Case Name/Type Jurisdiction Verdict August 17, 2006 United States v. Philip Morris USA, Inc. [Governmental Health-Care Cost Recovery] U.S. District Court, District of Columbia, (Washington, D.C.) RJR Tobacco, B&W and Lorillard Tobacco were found liable for civil RICO claims; were enjoined from using certain brand descriptors and from making certain misrepresentations; and were ordered to make corrective communications on five subjects, including smoking and health and addiction, to reimburse the U.S. Department of Justice appropriate costs associated with the lawsuit, and to maintain document web sites. May 26, 2010 Izzarelli v. R. J. Reynolds Tobacco Co. [Individual] U.S. District Court, District of Connecticut, (Bridgeport, CT) $13.76 million in compensatory damages; 58% of fault assigned to RJR Tobacco, which reduced the award to $8.08 million against RJR Tobacco; $3.97 million in punitive damages. September 13, 2013 DeLisle v. A. W. Chesterton Co. [Filter] Circuit Court, Broward County, (Ft. Lauderdale, FL) $8 million in compensatory damages; 44% of fault assigned to Lorillard Tobacco, which reduced the award to $3.52 million against Lorillard Tobacco. July 30, 2014 Major v. Lorillard Tobacco Co. [Individual] Superior Court, Los Angeles County, (Los Angeles, CA) $17.74 million in compensatory damages; 17% of fault assigned to Lorillard Tobacco. July 8, 2015 Larkin v. R. J. Reynolds Tobacco Co. [Individual] Circuit Court, Miami-Dade County, (Miami, FL) $4.96 million in compensatory damages; 62% of fault assigned to RJR Tobacco; $8.5 million in punitive damages. For information on the post-trial status of individual smoking and health cases, the governmental health-care cost recovery case and the Filter Cases, see “— Individual Smoking and Health Cases,” “— Health-Care Cost Recovery Cases – U.S. Department of Justice Case,” and “— Filter Cases,” respectively, below. Individual Smoking and Health Cases As of June 30, 2016, 121 individual cases were pending in the United States against RJR Tobacco, B&W (as RJR Tobacco’s indemnitee), Lorillard Tobacco or all three. This category of cases includes smoking and health cases alleging personal injuries caused by tobacco use or exposure brought by or on behalf of individual plaintiffs based on theories of negligence, strict liability, breach of express or implied warranty, and violations of state deceptive trade practices or consumer protection statutes. The plaintiffs seek to recover compensatory damages, attorneys’ fees and costs, and punitive damages. The category does not include the Broin II, Engle West Virginia IPIC Below is a description of the non- Engle On May 26, 2010, in Izzarelli v. R. J. Reynolds Tobacco Co On July 30, 2014, in Major v. Lorillard Tobacco Co. On July 8, 2015, in Larkin v. R. J. Reynolds Tobacco Co. On February 8, 2016, in Pooshs v. Philip Morris USA, Inc. West Virginia IPIC In re: Tobacco Litigation Individual Personal Injury Cases (Cir. Ct. Ohio County, W. Va., filed beginning in 1999), is a series of roughly 1,200 individual cases asserting claims against Philip Morris USA Inc., Lorillard Tobacco, RJR Tobacco, B&W and The American Tobacco Company based on alleged personal injuries The cases were consolidated for a Phase I trial on various defense conduct issues, to be followed in Phase II by individual trials of remaining claims. On May 15, 2013, the Phase I jury found that defendants’ cigarettes were not defectively designed; defendants’ cigarettes were not defective due to a failure to warn before July 1, 1969; defendants were not negligent, did not breach warranties, and did not engage in conduct warranting punitive damages; and defendants’ ventilated filter cigarettes manufactured and sold between 1964 and July 1, 1969 were defective for a failure to instruct. In November 2014, the West Virginia Supreme Court affirmed the verdict. On June 8, 2015, the U.S. Supreme Court denied the plaintiffs’ petition for writ of certiorari. On the same date, the trial court issued an order finding that only 30 plaintiffs are alleged to have smoked ventilated filter cigarettes in the relevant period. On October 9, 2015, the trial court outlined the procedures it will follow for resolving the claims of the 30 Phase II plaintiffs, which claims will focus on whether plaintiffs blocked cigarette vents and, if so, whether blocking proximately caused their alleged injuries. Five cases have been selected to be the first claims tried, and they were tentatively scheduled to be tried beginning on May 1, 2018 . In June 2016, the court granted the defendants’ motion to compel and required the plaintiffs to file additional expert disclosures necessary to attempt to proceed with their claims. The court will set a revised discovery and trial schedule after the expert disclosures are tested for admissibility. In addition to the foregoing claims, various plaintiffs in 1999 and 2000 asserted claims against retailers and distributors. Those claims were severed and stayed pending the outcome of Phase I. Also, 41 plaintiffs asserted smokeless tobacco claims against various smokeless manufacturers, including 14 claims against certain Reynolds Defendants. Those claims were severed from IPIC Engle and Engle Progeny Cases In July 1998, trial began in Engle v. R. J. Reynolds Tobacco Co., , On July 14, 2000, the jury in Phase II awarded the class a total of approximately $145 billion in punitive damages, which were apportioned $36.3 billion to RJR Tobacco, $17.6 billion to B&W, and $16.3 billion to Lorillard Tobacco. The defendants appealed. On December 21, 2006, the Florida Supreme Court prospectively decertified the class and set aside the jury’s Phase II punitive damages award. But the court preserved certain of the jury’s Phase I findings, including that cigarettes can cause certain diseases, nicotine is addictive, and defendants placed defective cigarettes on the market, breached duties of care, concealed health-related information, and conspired. The court also authorized former class members to file individual lawsuits within one year, and it stated that the preserved findings would have res judicata In the year after the Florida Supreme Court’s Engle Engle Engle Engle Engle Engle At the beginning of the Engle Engle Engle en banc Engle Hess v. Philip Morris USA Inc. Russo v. Philip Morris USA Inc. Engle Graham v. R. J. Reynolds Tobacco Co. Engle en banc Marotta v. R. J. Reynolds Tobacco Co. Graham Engle Marotta, In June 2009, Florida amended its existing bond cap statute by adding a $200 million bond cap that applied to all Engle Engle During the first quarter of 2015, RJR Tobacco and Lorillard Tobacco, together with Philip Morris USA Inc., tentatively settled virtually all of the Engle pro se Engle One hundred twenty-six Engle Engle Hiott Starr-Blundell Clayton Ward Cohen Thibault, Buonomo, Soffer Ciccone Odum Taylor Hallgren Hubbird Hiott Starr-Blundell Clayton Buonomo Thibault, Soffer Hubbird Plaintiff Case Name RJR Tobacco Allocation of Fault Lorillard Tobacco Allocation of Fault Compensatory Damages (as adjusted) (1) Punitive Damages Appeal Status Hiott 40% — $ 730,000 $ — Florida Supreme Court declined to accept jurisdiction of the case; RJR Tobacco paid approximately $4.1 million in satisfaction of the judgment on July 1, 2016 Starr-Blundell 10% — 50,000 — Florida Supreme Court accepted jurisdiction of the case, quashed the First DCA's decision, and remanded for reconsideration in light of Soffer, Clayton 10% — 60,000 — Florida Supreme Court accepted jurisdiction of the case, quashed the First DCA's decision, and remanded for reconsideration in light of Soffer Buonomo 77.5% — 4,060,000 25,000,000 Florida Supreme Court accepted jurisdiction of the case, quashed the decision being reviewed, and reinstated the jury verdict; appeal of the reinstated punitive damages award pending in Fourth DCA; oral argument scheduled for September 20, 2016 Thibault 70% — 1,750,000 1,275,000 First DCA affirmed the judgment, per curiam; Florida Supreme Court declined to accept jurisdiction of the case; RJR Tobacco paid approximately $5 million in satisfaction of the judgment on July 1, 2016 Hubbird 50% — 3,000,000 25,000,000 Third DCA affirmed the judgment, per curiam; deadline to file a petition for writ of certiorari with the U.S. Supreme Court is August 30, 2016 Soffer 40% — 2,000,000 — Remanded to First DCA for further proceedings consistent with Florida Supreme Court's March 17, 2016 opinion; new trial scheduled for May 1, 2017 Totals $ 11,650,000 $ 51,275,000 (1) Compensatory damages are adjusted to reflect the reduction that may be required by the allocation of fault. Punitive damages are not adjusted and reflect the amount of the final judgment(s) signed by the trial court judge(s). The amounts listed above do not include attorneys’ fees or statutory interest of approximately $26.1 million. The following chart lists judgments in all other individual Engle Plaintiff Case Name RJR Tobacco Allocation of Fault Lorillard Tobacco Allocation of Fault Compensatory Damages (as adjusted) (1) Punitive Damages Appeal Status Putney 30% — $ — $ — Reversed and remanded for further proceedings; Florida Supreme Court accepted jurisdiction; quashed the decision being reviewed and reinstated the verdict; defendants' motion for clarification granted on March 15, 2016, with an order stating that the remand was for reconsideration only on the issue of the statute of repose; pending on supplemental briefing in the Fourth DCA Andy Allen 24% — 2,475,000 7,756,000 Reversed and remanded for new trial; new trial completed on November 26, 2014; pending - First DCA Calloway 27% 18% 7,245,000 (2) — Fourth DCA affirmed compensatory award (with instructions to reduce to reflect the smoker's fault if plaintiff does not agree to new trial), set aside punitive damages, and remanded for partial new trial; motions for rehearing are pending James Smith 55% — 600,000 (2) 20,000 Pending – Eleventh Circuit Evers 60% 9% 2,950,000 12,360,000 Second DCA reinstated punitive damage award of $12.36 million the trial court had set aside; the verdict was reinstated on remand; a subsequent appeal is pending in the Second DCA Schoeff 75% — 7,875,000 — Fourth DCA affirmed compensatory award, set aside punitive award, and remanded for further proceedings; Florida Supreme Court accepted jurisdiction on May 26, 2016; briefing is underway Marotta 58% — 3,480,000 — Pending – Florida Supreme Court Searcy 30% — 500,000 (2) 1,670,000 Pending – Eleventh Circuit Earl Graham 20% — 550,000 — Eleventh Circuit held that federal law impliedly preempts claims for strict liability and negligence based on the defect and negligence findings from Engle en banc Skolnick 30% — — — Fourth DCA set aside judgment and ordered a partial new trial Grossman 75% — 15,350,000 (2) 22,500,000 Pending – Fourth DCA Gafney 33% 33% — — Fourth DCA reversed the judgment and remanded for a new trial; plaintiff filed a notice to invoke the discretionary jurisdiction of the Florida Supreme Court; briefing is underway Burkhart 25% 10% 3,500,000 (2) 1,750,000 Pending – Eleventh Circuit Bakst (Odom) 75% — 4,504,000 14,000,000 Pending – Fourth DCA Robinson 71% — 16,900,000 16,900,000 Pending – First DCA Harris 15% 10% 1,100,000 (2) — Post-trial motions are pending (3) Wilcox 70% — 4,900,000 8,500,000 Pending – Third DCA Irimi 15% 15% — — Defendants' motion for new trial granted; pending - Fourth DCA Lourie 3% 7% 137,000 — Pending – Second DCA Kerrivan 31% — 6,046,660 (2) 9,600,000 Post-trial motions are pending (3) Schleider 70% — 14,700,000 (2) — P

Shareholders' Equity

Shareholders' Equity	6 Months Ended
	Jun. 30, 2016
Equity [Abstract]
Shareholders' Equity	Note 11 — Shareholders’ Equity Common Stock Paid-In Retained Earnings Accumulated Total Shareholders’ Equity Balance as of December 31, 2015 $ — $ 18,402 $ 188 $ (338 ) $ 18,252 Net income — — 4,361 — 4,361 Retirement benefits, net of $21 million tax expense — — — 33 33 Unrealized gain on long-term investments, net of $2 million tax expense — — — 5 5 Realized gain on long-term investments, net of $1 million tax expense — — — (2 ) (2 ) Realized loss on hedging instruments, net of $6 million tax expense — — — 11 11 Cumulative translation adjustment and other, net of $9 million tax expense — — — 17 17 Dividends - $0.84 per share — — (1,204 ) — (1,204 ) Common stock repurchased — (149 ) — — (149 ) Equity incentive award plan and stock-based compensation — 50 — — 50 Excess tax benefit on stock-based compensation plans — 26 — — 26 Balance as of June 30, 2016 $ — $ 18,329 $ 3,345 $ (274 ) $ 21,400 Common Stock Paid-In Capital (Accumulated Deficit) Retained Earnings Accumulated Total Shareholders’ Equity Balance as of December 31, 2014 $ — $ 6,200 $ (1,314 ) $ (364 ) $ 4,522 Net income — — 2,317 — 2,317 Retirement benefits, net of $16 million tax benefit — — — (26 ) (26 ) Amortization of realized loss on hedging instruments, net of tax — — — 1 1 Cumulative translation adjustment and other, net of $10 million tax benefit — — — (17 ) (17 ) Dividends - $0.67 per share — — (718 ) — (718 ) Issuance of additional shares as Merger consideration — 7,555 — — 7,555 Issuance of additional shares for BAT Share Purchase — 4,673 — — 4,673 Common stock repurchased — (40 ) — — (40 ) Equity incentive award plan and stock-based compensation — 44 — — 44 Excess tax benefit on stock-based compensation plans — 15 — — 15 Balance as of June 30, 2015 $ — $ 18,447 $ 285 $ (406 ) $ 18,326 Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2016 were as follows: Retirement Benefits Unrealized Loss on Long-Term Investments Realized Loss on Hedging Instruments Cumulative Translation Adjustment and Other Total Balance as of December 31, 2015 $ (244 ) $ (14 ) $ (11 ) $ (69 ) $ (338 ) Other comprehensive income (losses) before reclassifications 45 5 — (10 ) 40 Amounts reclassified from accumulated other comprehensive loss (12 ) (2 ) 11 27 24 Net current-period other comprehensive income (loss) 33 3 11 17 64 Balance as of June 30, 2016 $ (211 ) $ (11 ) $ — $ (52 ) $ (274 ) The components of accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2015, were as follows: Retirement Benefits Unrealized Loss on Long-Term Investments Realized Loss on Hedging Instruments Cumulative Translation Adjustment and Other Total Balance as of December 31, 2014 $ (294 ) $ (14 ) $ (12 ) $ (44 ) $ (364 ) Other comprehensive losses before reclassifications (13 ) — — (17 ) (30 ) Amounts reclassified from accumulated other comprehensive loss (13 ) — 1 — (12 ) Net current-period other comprehensive income (loss) (26 ) — 1 (17 ) (42 ) Balance as of June 30, 2015 $ (320 ) $ (14 ) $ (11 ) $ (61 ) $ (406 ) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidated statement of income (unaudited) for the three months ended June 30, were as follows: Components Amounts Reclassified Affected Line Item 2016 2015 Defined benefit pension and postretirement plans: Amortization of prior service costs $ (5 ) $ (6 ) Cost of products sold Amortization of prior service costs (5 ) (4 ) Selling, general and administrative expenses (10 ) (10 ) Operating income Deferred taxes 4 3 Provision for income taxes Net of tax (6 ) (7 ) Net income Hedging instruments: Amortization of realized loss — 1 Interest and debt expense Total reclassifications $ (6 ) $ (6 ) Net income Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidated statement of income (unaudited) for the six months ended June 30, were as follows: Components Amounts Reclassified Affected Line Item 2016 2015 Defined benefit pension and postretirement plans: Amortization of prior service costs $ (10 ) $ (11 ) Cost of products sold Amortization of prior service costs (10 ) (9 ) Selling, general and administrative expenses (20 ) (20 ) Operating income Deferred taxes 8 7 Provision for income taxes Net of tax (12 ) (13 ) Net income Long-term investments: Realized gain on long-term investments (3 ) — Other (income) expense, net Deferred taxes 1 — Provision for income taxes Net of tax (2 ) — Net income Hedging instruments: Forward starting interest rate contracts 17 — Other (income) expense, net Amortization of realized loss — 1 Interest and debt expense 17 1 Income before income taxes Deferred taxes (6 ) — Provision for income taxes Net of tax 11 1 Net income Cumulative translation adjustment: Derecognition of cumulative translation adjustment 27 — Gain on divestitures Total reclassifications $ 24 $ (12 ) Net income Share Repurchases and Other Restricted stock units granted in March 2013 and May 2015 under the Amended and Restated 2009 Omnibus Incentive Compensation Plan, referred to as the Omnibus Plan, vested in March 2016 and May 2016, respectively, and were settled with the issuance of 2,864,029 shares of RAI common stock. In addition, during the first six months of 2016, at a cost of $56 million, RAI purchased 1,118,283 shares of RAI common stock that were forfeited and cancelled with respect to tax liabilities associated with restricted stock units vesting under the Omnibus Plan. In November 2011, RAI, B&W and BAT entered into Amendment No. 3 to the governance agreement, dated as of July 30, 2004, as amended, referred to as the Governance Agreement, pursuant to which RAI has agreed that, so long as the beneficial ownership interest of BAT and its subsidiaries in RAI has not dropped below 25%, if RAI issues shares of its common stock or any other RAI equity security to certain designated persons, including its directors, officers or employees, then RAI will repurchase a number of shares of outstanding RAI common stock so that the number of outstanding shares of RAI common stock are not increased, and the beneficial ownership interest of BAT and its subsidiaries in RAI is not decreased, by such issuance after taking into account such repurchase. During the first six months of 2016, RAI repurchased 1,817,846 shares of RAI common stock for $93 million in accordance with the Governance Agreement. Due to RAI’s incorporation in North Carolina, which does not recognize treasury shares, the shares repurchased were cancelled at time of purchase. On February 10, 2016, and May 5, 2016, RAI’s board of directors declared a quarterly cash dividend of $0.42 per common share, or $1.68 on an annualized basis, payable to shareholders of record as of March 10, 2016 and June 10, 2016, respectively.

Stock Plans

Stock Plans	6 Months Ended
	Jun. 30, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock Plans	Note 12 — Stock Plans Three-Year Grant In February 2016, the board of directors of RAI approved a grant to key employees of RAI and its subsidiaries, effective March 1, 2016, of 1,071,544 nonvested restricted stock units under the Omnibus Plan. The restricted stock units generally will vest on March 1, 2019. Upon settlement, each grantee will receive a number of shares of RAI’s common stock equal to the product of the number of vested units and a percentage up to 150% based on the average RAI annual incentive award plan score over the three-year period ending December 31, 2018. As an equity-based grant, compensation expense relating to the 2016 grant will take into account the vesting period lapsed and will be calculated based on the per share closing price of RAI common stock on the date of grant, or $50.49. Following the vesting date, each grantee will receive a cash dividend equivalent payment equal to the aggregate amount of dividends per share paid on shares of RAI common stock during the performance period multiplied by the actual number of restricted stock units earned by the grantee. One-Year Grant In May 2016, the board of directors of RAI approved a grant to a key employee of RAI, effective May 5, 2016, of 164,841 nonvested restricted stock units under the Omnibus Plan. The restricted stock units generally will vest on May 1, 2017. Upon settlement, the grantee will receive a number of shares of RAI’s common stock equal to the product of the number of vested units and a percentage up to 200% based on the overall performance of RAI and its subsidiaries during the one-year performance period beginning May 1, 2016, and ending April 30, 2017, against RAI’s 2016 annual incentive award program metrics and other performance factors. As an equity-based grant, compensation expense relating to this one-year grant will take into account the vesting period lapsed and will be calculated based on the per share closing price of RAI common stock as of the end of each quarter, which was $53.93 as of June 30, 2016. Following the vesting date, the grantee will receive a cash dividend equivalent payment equal to the aggregate amount of dividends per share paid on shares of RAI common stock during the performance period multiplied by the actual number of restricted stock units earned by the grantee. If RAI fails to pay its shareholders cumulative dividends of at least $1.68 per share for the one-year performance period ending April 30, 2017, then the award will be reduced by an amount equal to three times the percentage of the dividend underpayment, up to a maximum reduction of 50%. Other Grants In January 2016, RAI approved two grants to a key employee, effective January 19, 2016: · a retention grant of 16,094 nonvested restricted stock units, which will vest 100% on December 15, 2018; and · a make-whole grant of 47,210 nonvested restricted stock units, of which 50% will vest on each of December 15, 2016 and December 15, 2017. As equity-based grants, compensation expense relating to these grants will take into account the vesting period lapsed and will be calculated on the per share closing price of RAI common stock on the date of grant, or $46.93. These grants do not contain a performance measure.

Segment Information

Segment Information	6 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
Segment Information	Note 13 — Segment Information RAI’s reportable operating segments are RJR Tobacco, Santa Fe and American Snuff. The RJR Tobacco segment consists principally of the primary operations of R. J. Reynolds Tobacco Company. The Santa Fe segment consists of the domestic operations of SFNTC. The American Snuff segment consists of the primary operations of American Snuff Co. Included in All Other, among other RAI subsidiaries, are RJR Vapor, Niconovum USA, Inc., Niconovum AB, and until their sale on January 13, 2016, SFRTI and various foreign subsidiaries affiliated with SFRTI. The segments were identified based on how RAI’s chief operating decision maker allocates resources and assesses performance. Certain of RAI’s operating subsidiaries have entered into intercompany agreements for products or services with other subsidiaries. As a result, certain activities of an operating subsidiary may be included in a different segment of RAI. RJR Tobacco is RAI’s largest reportable operating segment, and is the second largest tobacco company in the United States. Its brands include three of the best-selling cigarettes in the United States: NEWPORT, CAMEL and PALL MALL. These brands, and its other brands, including DORAL, MISTY and CAPRI, are manufactured in a variety of styles and marketed in the United States. As part of its total tobacco strategy, RJR Tobacco also offers a smoke-free tobacco product, CAMEL Snus. RJR Tobacco manages contract manufacturing of cigarette and tobacco products through arrangements with BAT affiliates, and manages the export of tobacco products to U.S. territories, U.S. duty-free shops and U.S. overseas military bases. RJR Tobacco manages the super-premium cigarette brands, DUNHILL and STATE EXPRESS 555, which are licensed from BAT. Santa Fe manufactures and markets super-premium cigarettes and other tobacco products under the NATURAL AMERICAN SPIRIT brand in the United States. American Snuff is the second largest smokeless tobacco products manufacturer in the United States. American Snuff’s primary brands include its largest selling moist snuff brands, GRIZZLY and KODIAK. RJR Vapor is a marketer of digital vapor cigarettes, manufactured on its behalf by RJR Tobacco, under the VUSE brand name in the United States. Niconovum USA, Inc. and Niconovum AB are marketers of nicotine replacement therapy products in the United States and Sweden, respectively, under the ZONNIC brand name. SFRTI and various foreign subsidiaries affiliated with SFRTI distributed the NATURAL AMERICAN SPIRIT brand outside of the United States. On January 13, 2016, RAI, through the Sellers, completed the sale of the international rights to the NATURAL AMERICAN SPIRIT brand name and associated trademarks, along with the international companies that distributed and marketed the brand outside the United States to JTI Holding, in an all-cash transaction of approximately $5 billion. See note 2 for additional information. Intersegment revenues and items below the operating income line of the condensed consolidated statements of income (unaudited) are not presented by segment, since they are excluded from the measure of segment profitability reviewed by RAI’s chief operating decision maker. Additionally, information about total assets by segment is not reviewed by RAI’s chief operating decision maker and therefore is not disclosed. Segment Data: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 Net sales: RJR Tobacco $ 2,646 $ 1,876 $ 5,057 $ 3,484 Santa Fe 247 218 465 389 American Snuff 232 218 448 419 All Other 70 91 142 168 Net sales $ 3,195 $ 2,403 $ 6,112 $ 4,460 Operating income (loss): RJR Tobacco $ 1,216 $ 727 $ 2,323 $ 1,315 Santa Fe 133 125 256 217 American Snuff 138 130 271 248 All Other (43 ) (35 ) (77 ) (96 ) Gain on divestitures — 3,499 4,861 3,499 Corporate expense (29 ) (82 ) (77 ) (126 ) Operating income $ 1,415 $ 4,364 $ 7,557 $ 5,057 Reconciliation to income before income taxes: Operating income $ 1,415 $ 4,364 $ 7,557 $ 5,057 Interest and debt expense 152 105 326 196 Interest income (2 ) — (5 ) (1 ) Other (income) expense, net (1 ) 20 251 3 Income before income taxes $ 1,266 $ 4,239 $ 6,985 $ 4,859

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2016
Related Party Transactions [Abstract]
Related Party Transactions	Note 14 — Related Party Transactions RAI and RAI’s operating subsidiaries engage in transactions with affiliates of BAT. BAT, through its subsidiaries, beneficially owns approximately 42% of RAI’s outstanding common stock. A summary of balances and transactions with such BAT affiliates is as follows: Balances: June 30, 2016 December 31, 2015 Accounts receivable, related party $ 33 $ 38 Due to related party 2 9 Deferred revenue, related party 16 33 Other current liabilities — 2 Significant transactions: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 Net sales $ 54 $ 54 $ 109 $ 136 Purchases 6 12 8 14 BAT Share Purchase — 4,673 — 4,673 RJR Tobacco sells contract-manufactured cigarettes, tobacco leaf and processed tobacco to BAT affiliates. In December 2012, RJR Tobacco entered into an amendment to its contract manufacturing agreement (relating to the production of cigarettes to be sold in Japan) with a BAT affiliate, which amendment, among other things, requires either party to provide three years’ notice to the other party to terminate the agreement without cause, with any such notice to be given no earlier than January 1, 2016. On January 4, 2016, RJR Tobacco received written notice from a BAT affiliate terminating that contract manufacturing agreement effective January 5, 2019. In July 2016, RJR Tobacco further amended the contract manufacturing agreement with a BAT affiliate, effective October 1, 2016, to permit an early transition of the cigarette production covered by the agreement to BAT facilities over several months beginning in the fourth quarter of 2016. The amendment provides for a BAT affiliate to make a payment to RJR Tobacco of $89.6 million in two installments of $7.4 million on or before September 30, 2016, and $82.2 million on or before March 31, 2017, in exchange for RJR Tobacco’s commitment to provide contingent manufacturing capacity to a BAT affiliate through December 31, 2018. RJR Tobacco will recognize the income ratably from the effective date of the amendment to December 31, 2018. Net sales to BAT affiliates, primarily cigarettes, represented approximately 2% of RAI’s total net sales during each of the three and six months ended June 30, 2016. Net sales to BAT affiliates, primarily cigarettes, represented approximately 2% and 3% of RAI’s total net sales during the three and six months ended June 30, 2015, respectively. RJR Tobacco recorded deferred sales revenue relating to leaf sold to BAT affiliates that had not been delivered as of the end of the respective quarter, given that RJR Tobacco has a legal right to bill the BAT affiliates. Leaf sales revenue to BAT affiliates is recognized when the product is shipped to the customer. RAI’s operating subsidiaries also purchase unprocessed leaf at market prices, and import cigarettes at prices not to exceed manufacturing costs plus 10%, from BAT affiliates. In January 2016, SFRTI paid $6 million to a BAT affiliate pursuant to a contract amendment, whereby the BAT affiliate agreed to contract manufacture certain tobacco products for SFRTI. The $6 million fee paid to amend the contract was recognized within selling, general and administrative expenses. In December 2015, RJR Tobacco and Nicoventures Holdings Limited, a subsidiary of BAT, signed a definitive vapor technology-sharing and licensing agreement, pursuant to which the companies will collaborate on the development of next generation vapor products.

RAI Guaranteed, Unsecured Notes

RAI Guaranteed, Unsecured Notes - Condensed Consolidating Financial Statements	6 Months Ended
	Jun. 30, 2016
Guarantees [Abstract]
RAI Guaranteed, Unsecured Notes - Condensed Consolidating Financial Statements	Note 15 — RAI Guaranteed, Unsecured Notes — Condensed Consolidating Financial Statements The following condensed consolidating financial statements relate to the guaranties of RAI’s $13.1 billion aggregate principal amount of unsecured notes. See note 9 for additional information relating to these notes. Certain of RAI’s direct, wholly owned subsidiaries and certain of its indirectly owned subsidiaries have fully and unconditionally, and jointly and severally, guaranteed these notes. The following condensed consolidating financial statements include: the accounts and activities of RAI, the parent issuer; RJR, RJR Tobacco, American Snuff Co., SFNTC and certain of RAI’s other subsidiaries, the Guarantors; other direct and indirect subsidiaries of RAI that are not Guarantors; and elimination adjustments. Condensed Consolidating Statements of Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net sales $ — $ 3,122 $ 48 $ (29 ) $ 3,141 Net sales, related party — 54 — — 54 Net sales — 3,176 48 (29 ) 3,195 Cost of products sold — 1,254 52 (31 ) 1,275 Selling, general and administrative expenses 6 457 34 2 499 Amortization expense — 6 — — 6 Operating income (loss) (6 ) 1,459 (38 ) — 1,415 Interest and debt expense 149 22 2 (21 ) 152 Interest income (21 ) (2 ) — 21 (2 ) Other income — (9 ) (3 ) 11 (1 ) Income (loss) before income taxes (134 ) 1,448 (37 ) (11 ) 1,266 Provision for (benefit from) income taxes (48 ) 532 (14 ) — 470 Equity income from subsidiaries 882 2 — (884 ) — Net income (loss) $ 796 $ 918 $ (23 ) $ (895 ) $ 796 For the Three Months Ended June 30, 2015 Net sales $ — $ 2,320 $ 82 $ (53 ) $ 2,349 Net sales, related party — 54 — — 54 Net sales — 2,374 82 (53 ) 2,403 Cost of products sold — 1,082 53 (51 ) 1,084 Selling, general and administrative expenses 43 337 71 — 451 Gain on divestitures — (3,499 ) — — (3,499 ) Amortization expense — 3 — — 3 Operating income (loss) (43 ) 4,451 (42 ) (2 ) 4,364 Interest and debt expense 98 33 2 (28 ) 105 Interest income (28 ) — — 28 — Other (income) expense, net 14 (11 ) 7 10 20 Income (loss) before income taxes (127 ) 4,429 (51 ) (12 ) 4,239 Provision for (benefit from) income taxes (77 ) 2,424 (36 ) — 2,311 Equity income from subsidiaries 1,978 18 — (1,996 ) — Net income (loss) $ 1,928 $ 2,023 $ (15 ) $ (2,008 ) $ 1,928 Condensed Consolidating Statements of Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Net sales $ — $ 5,961 $ 97 $ (55 ) $ 6,003 Net sales, related party — 109 — — 109 Net sales — 6,070 97 (55 ) 6,112 Cost of products sold — 2,403 95 (58 ) 2,440 Selling, general and administrative expenses 22 858 82 2 964 Gain on divestitures — (4,843 ) (16 ) (2 ) (4,861 ) Amortization expense — 12 — — 12 Operating income (loss) (22 ) 7,640 (64 ) 3 7,557 Interest and debt expense 323 45 4 (46 ) 326 Interest income (47 ) (4 ) — 46 (5 ) Other (income) expense, net 240 (15 ) 4 22 251 Income (loss) before income taxes (538 ) 7,614 (72 ) (19 ) 6,985 Provision for (benefit from) income taxes (190 ) 2,840 (26 ) — 2,624 Equity income from subsidiaries 4,709 2 — (4,711 ) — Net income (loss) $ 4,361 $ 4,776 $ (46 ) $ (4,730 ) $ 4,361 For the Six Months Ended June 30, 2015 Net sales $ — $ 4,319 $ 150 $ (145 ) $ 4,324 Net sales, related party — 136 — — 136 Net sales — 4,455 150 (145 ) 4,460 Cost of products sold — 1,951 123 (140 ) 1,934 Selling, general and administrative expenses 62 762 138 — 962 Gain on divestitures — (3,499 ) — — (3,499 ) Amortization expense — 6 — — 6 Operating income (loss) (62 ) 5,235 (111 ) (5 ) 5,057 Interest and debt expense 189 50 4 (47 ) 196 Interest income (47 ) (1 ) — 47 (1 ) Other (income) expense, net 15 (21 ) (12 ) 21 3 Income (loss) before income taxes (219 ) 5,207 (103 ) (26 ) 4,859 Provision for (benefit from) income taxes (104 ) 2,705 (59 ) — 2,542 Equity income from subsidiaries 2,432 38 — (2,470 ) — Net income (loss) $ 2,317 $ 2,540 $ (44 ) $ (2,496 ) $ 2,317 Condensed Consolidating Statements of Comprehensive Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net income (loss) $ 796 $ 918 $ (23 ) $ (895 ) $ 796 Other comprehensive income (loss), net of tax: Retirement benefits 39 40 (1 ) (39 ) 39 Unrealized gain on long-term investments 4 4 — (4 ) 4 Cumulative translation adjustment and other (5 ) (5 ) (7 ) 12 (5 ) Comprehensive income (loss) $ 834 $ 957 $ (31 ) $ (926 ) $ 834 For the Three Months Ended June 30, 2015 Net income (loss) $ 1,928 $ 2,023 $ (15 ) $ (2,008 ) $ 1,928 Other comprehensive income (loss), net of tax: Retirement benefits (20 ) (17 ) (1 ) 18 (20 ) Amortization of realized loss on hedging instruments 1 — — — 1 Cumulative translation adjustment and other 10 10 13 (23 ) 10 Comprehensive income (loss) $ 1,919 $ 2,016 $ (3 ) $ (2,013 ) $ 1,919 For the Six Months Ended June 30, 2016 Net income (loss) $ 4,361 $ 4,776 $ (46 ) $ (4,730 ) $ 4,361 Other comprehensive income (loss), net of tax: Retirement benefits 33 34 (1 ) (33 ) 33 Unrealized gain on long-term investments 5 5 — (5 ) 5 Realized gain on long-term investments (2 ) (2 ) — 2 (2 ) Realized loss on hedging instruments 11 — — — 11 Cumulative translation adjustment and other 17 17 26 (43 ) 17 Comprehensive income (loss) $ 4,425 $ 4,830 $ (21 ) $ (4,809 ) $ 4,425 For the Six Months Ended June 30, 2015 Net income (loss) $ 2,317 $ 2,540 $ (44 ) $ (2,496 ) $ 2,317 Other comprehensive income (loss), net of tax: Retirement benefits (26 ) (23 ) (1 ) 24 (26 ) Amortization of realized loss on hedging instruments 1 — — — 1 Cumulative translation adjustment and other (17 ) (17 ) (27 ) 44 (17 ) Comprehensive income (loss) $ 2,275 $ 2,500 $ (72 ) $ (2,428 ) $ 2,275 Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (5 ) $ — $ — $ (5 ) Cost of products sold Amortization of prior service costs — (5 ) — — (5 ) Selling, general and administrative expenses — (10 ) — — (10 ) Operating income (loss) Deferred taxes — 4 — — 4 Provision for income taxes Net of tax — (6 ) — — (6 ) Net income (loss) Equity income from subsidiaries (6 ) — — 6 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (6 ) $ — $ 6 $ (6 ) Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (6 ) $ — $ — $ (6 ) Cost of products sold Amortization of prior service costs — (4 ) — — (4 ) Selling, general and administrative expenses — (10 ) — — (10 ) Operating income (loss) Deferred taxes — 3 — — 3 Provision for income taxes Net of tax — (7 ) — — (7 ) Net income (loss) Hedging instruments: Amortization of realized loss 1 — — — 1 Interest and debt expense Equity income from subsidiaries (7 ) — — 7 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (7 ) $ — $ 7 $ (6 ) Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (10 ) $ — $ — $ (10 ) Cost of products sold Amortization of prior service costs — (10 ) — — (10 ) Selling, general and administrative expenses — (20 ) — — (20 ) Operating income (loss) Deferred taxes — 8 — — 8 Provision for income taxes Net of tax — (12 ) — — (12 ) Net income (loss) Long-term investments: Realized gain on long-term investments — (3 ) — — (3 ) Other (income) expense, net Deferred taxes — 1 — — 1 Provision for income taxes Net of tax — (2 ) — — (2 ) Net income (loss) Hedging instruments: Forward starting interest rate contracts 17 — — — 17 Other (income) expense, net Deferred taxes (6 ) — — — (6 ) Provision for income taxes Net of tax 11 — — — 11 Net income (loss) Cumulative translation adjustment: Derecognition of cumulative translation adjustment — — 27 — 27 Gain on divestitures Equity income from subsidiaries 13 27 — (40 ) — Equity income from subsidiaries Total reclassifications $ 24 $ 13 $ 27 $ (40 ) $ 24 Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (11 ) $ — $ — $ (11 ) Cost of products sold Amortization of prior service costs — (9 ) — — (9 ) Selling, general and administrative expenses — (20 ) — — (20 ) Operating income (loss) Deferred taxes — 7 — — 7 Provision for income taxes Net of tax — (13 ) — — (13 ) Net income (loss) Hedging instruments: Amortization of realized loss 1 — — — 1 Interest and debt expense Equity income from subsidiaries (13 ) — — 13 — Equity income from subsidiaries Total reclassifications $ (12 ) $ (13 ) $ — $ 13 $ (12 ) Net income (loss) Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Cash flows from (used in) operating activities $ (1,012 ) $ 603 $ (23 ) $ (293 ) $ (725 ) Cash flows from (used in) investing activities: Capital expenditures — (89 ) (5 ) — (94 ) Proceeds from settlement of short-term investments — 159 — — 159 Proceeds from divestitures 5,015 — — — 5,015 Proceeds from settlement of long-term investments — 23 — — 23 Return of intercompany investments 412 26 — (438 ) — Other, net 260 11 — (271 ) — Net cash flows from (used in) investing activities 5,687 130 (5 ) (709 ) 5,103 Cash flows from (used in) financing activities: Dividends paid on common stock (1,113 ) (247 ) (25 ) 272 (1,113 ) Repurchase of common stock (149 ) — — — (149 ) Early extinguishment of debt (3,642 ) (8 ) — — (3,650 ) Redemption premium for early extinguishment of debt (118 ) (1 ) — — (119 ) Make-whole premium for early extinguishment of debt (88 ) — — — (88 ) Proceeds from termination of interest rate swaps — 66 — — 66 Debt issuance costs and financing fees (7 ) — — — (7 ) Excess tax benefit on stock-based compensation plans 26 — — — 26 Dividends paid on preferred stock (21 ) — — 21 — Distribution of equity — (412 ) (26 ) 438 — Other, net (11 ) (260 ) — 271 — Net cash flows used in financing activities (5,123 ) (862 ) (51 ) 1,002 (5,034 ) Effect of exchange rate changes on cash and cash equivalents — — 7 — 7 Net change in cash and cash equivalents (448 ) (129 ) (72 ) — (649 ) Cash and cash equivalents at beginning of period 575 1,544 448 — 2,567 Cash and cash equivalents at end of period $ 127 $ 1,415 $ 376 $ — $ 1,918 Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2015 Cash flows from (used in) operating activities $ 125 $ 826 $ (3 ) $ (500 ) $ 448 Cash flows from (used in) investing activities: Capital expenditures — (60 ) (3 ) (1 ) (64 ) Return of intercompany investments 185 — — (185 ) — Acquisition, net of cash acquired (18,278 ) 1,002 57 — (17,219 ) Proceeds from divestitures 7,056 — — — 7,056 Proceeds from settlement of long-term investments — 1 — — 1 Other, net (710 ) 11 (1 ) 700 — Net cash flows (used in) from investing activities (11,747 ) 954 53 514 (10,226 ) Cash flows from (used in) financing activities: Dividends paid on common stock (712 ) (479 ) — 479 (712 ) Repurchase of common stock (40 ) — — — (40 ) Proceeds from BAT Share Purchase 4,673 — — — 4,673 Debt issuance costs and financing fees (64 ) — — — (64 ) Issuance of long-term debt 8,975 — — — 8,975 Borrowings under revolving credit facility 1,400 — — — 1,400 Repayments of borrowings under revolving credit facility (1,400 ) — — — (1,400 ) Excess tax benefit on stock-based compensation plans 15 — — — 15 Dividends paid on preferred stock (21 ) — — 21 — Distribution of equity — (185 ) — 185 — Other, net (11 ) 680 30 (699 ) — Net cash flows from financing activities 12,815 16 30 (14 ) 12,847 Effect of exchange rate changes on cash and cash equivalents — — (22 ) — (22 ) Net change in cash and cash equivalents 1,193 1,796 58 — 3,047 Cash and cash equivalents at beginning of period 102 469 395 — 966 Cash and cash equivalents at end of period $ 1,295 $ 2,265 $ 453 $ — $ 4,013 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated June 30, 2016 Assets Cash and cash equivalents $ 127 $ 1,415 $ 376 $ — $ 1,918 Short-term investments — 26 — — 26 Accounts receivable — 81 8 — 89 Accounts receivable, related party — 33 — — 33 Other receivables 65 3,438 16 (3,506 ) 13 Inventories — 1,520 22 (1 ) 1,541 Deferred income taxes, net 9 1,002 7 — 1,018 Other current assets 8 259 75 (75 ) 267 Total current assets 209 7,774 504 (3,582 ) 4,905 Property, plant and equipment, net 3 1,259 33 — 1,295 Trademarks and other intangible assets, net — 29,442 15 (2 ) 29,455 Goodwill — 15,977 16 — 15,993 Long-term intercompany notes receivable 1,322 159 — (1,481 ) — Investment in subsidiaries 37,981 393 — (38,374 ) — Other assets and deferred charges 162 100 34 (172 ) 124 Total assets $ 39,677 $ 55,104 $ 602 $ (43,611 ) $ 51,772 Liabilities and shareholders’ equity Accounts payable $ 1 $ 184 $ 6 $ — $ 191 Tobacco settlement accruals — 1,696 — — 1,696 Due to related party — 2 — — 2 Deferred revenue, related party — 16 — — 16 Current maturities of long-term debt 416 85 — — 501 Dividends payable on common stock 599 — — — 599 Income taxes payable 702 4 — (78 ) 628 Other current liabilities 3,428 1,015 208 (3,506 ) 1,145 Total current liabilities 5,146 3,002 214 (3,584 ) 4,778 Long-term intercompany notes payable 159 1,000 322 (1,481 ) — Long-term debt (less current maturities) 12,876 316 — — 13,192 Deferred income taxes, net — 10,535 — (169 ) 10,366 Long-term retirement benefits (less current portion) 55 1,716 42 — 1,813 Other noncurrent liabilities 41 182 — — 223 Shareholders’ equity 21,400 38,353 24 (38,377 ) 21,400 Total liabilities and shareholders’ equity $ 39,677 $ 55,104 $ 602 $ (43,611 ) $ 51,772 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated December 31, 2015 Assets Cash and cash equivalents $ 575 $ 1,544 $ 448 $ — $ 2,567 Short-term investments — 149 — — 149 Accounts receivable — 62 6 — 68 Accounts receivable, related party — 38 — — 38 Other receivables 70 3,459 91 (3,585 ) 35 Inventories — 1,694 44 (4 ) 1,734 Deferred income taxes, net 14 1,011 7 — 1,032 Other current assets 116 323 129 (4 ) 564 Total current assets 775 8,280 725 (3,593 ) 6,187 Property, plant and equipment, net 3 1,223 29 — 1,255 Trademarks and other intangible assets, net — 29,467 — — 29,467 Goodwill — 15,976 17 — 15,993 Long-term intercompany notes receivable 1,583 169 — (1,752 ) — Investment in subsidiaries 37,151 662 — (37,813 ) — Other assets and deferred charges 175 212 31 (188 ) 230 Total assets $ 39,687 $ 55,989 $ 802 $ (43,346 ) $ 53,132 Liabilities and shareholders’ equity Accounts payable $ 2 $ 173 $ 4 $ — $ 179 Tobacco settlement accruals — 2,816 — — 2,816 Due to related party — 9 — — 9 Deferred revenue, related party — 33 — — 33 Current maturities of long-term debt 420 86 — — 506 Dividends payable on common stock 514 — — — 514 Other current liabilities 3,707 1,039 79 (3,591 ) 1,234 Total current liabilities 4,643 4,156 83 (3,591 ) 5,291 Long-term intercompany notes payable 169 1,260 323 (1,752 ) — Long-term debt (less current maturities) 16,522 327 — — 16,849 Deferred income taxes, net — 10,421 — (185 ) 10,236 Long-term retirement benefits (less current portion) 57 2,153 55 — 2,265 Other noncurrent liabilities 44 195 — — 239 Shareholders’ equity 18,252 37,477 341 (37,818 ) 18,252 Total liabilities and shareholders’ equity $ 39,687 $ 55,989 $ 802 $ (43,346 ) $ 53,132

RJR Tobacco Guaranteed, Unsecur

RJR Tobacco Guaranteed, Unsecured Notes - Condensed Consolidating Financial Statements	6 Months Ended
	Jun. 30, 2016
RAI Guaranteed, Unsecured Notes - Condensed Consolidating Financial Statements	Note 15 — RAI Guaranteed, Unsecured Notes — Condensed Consolidating Financial Statements The following condensed consolidating financial statements relate to the guaranties of RAI’s $13.1 billion aggregate principal amount of unsecured notes. See note 9 for additional information relating to these notes. Certain of RAI’s direct, wholly owned subsidiaries and certain of its indirectly owned subsidiaries have fully and unconditionally, and jointly and severally, guaranteed these notes. The following condensed consolidating financial statements include: the accounts and activities of RAI, the parent issuer; RJR, RJR Tobacco, American Snuff Co., SFNTC and certain of RAI’s other subsidiaries, the Guarantors; other direct and indirect subsidiaries of RAI that are not Guarantors; and elimination adjustments. Condensed Consolidating Statements of Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net sales $ — $ 3,122 $ 48 $ (29 ) $ 3,141 Net sales, related party — 54 — — 54 Net sales — 3,176 48 (29 ) 3,195 Cost of products sold — 1,254 52 (31 ) 1,275 Selling, general and administrative expenses 6 457 34 2 499 Amortization expense — 6 — — 6 Operating income (loss) (6 ) 1,459 (38 ) — 1,415 Interest and debt expense 149 22 2 (21 ) 152 Interest income (21 ) (2 ) — 21 (2 ) Other income — (9 ) (3 ) 11 (1 ) Income (loss) before income taxes (134 ) 1,448 (37 ) (11 ) 1,266 Provision for (benefit from) income taxes (48 ) 532 (14 ) — 470 Equity income from subsidiaries 882 2 — (884 ) — Net income (loss) $ 796 $ 918 $ (23 ) $ (895 ) $ 796 For the Three Months Ended June 30, 2015 Net sales $ — $ 2,320 $ 82 $ (53 ) $ 2,349 Net sales, related party — 54 — — 54 Net sales — 2,374 82 (53 ) 2,403 Cost of products sold — 1,082 53 (51 ) 1,084 Selling, general and administrative expenses 43 337 71 — 451 Gain on divestitures — (3,499 ) — — (3,499 ) Amortization expense — 3 — — 3 Operating income (loss) (43 ) 4,451 (42 ) (2 ) 4,364 Interest and debt expense 98 33 2 (28 ) 105 Interest income (28 ) — — 28 — Other (income) expense, net 14 (11 ) 7 10 20 Income (loss) before income taxes (127 ) 4,429 (51 ) (12 ) 4,239 Provision for (benefit from) income taxes (77 ) 2,424 (36 ) — 2,311 Equity income from subsidiaries 1,978 18 — (1,996 ) — Net income (loss) $ 1,928 $ 2,023 $ (15 ) $ (2,008 ) $ 1,928 Condensed Consolidating Statements of Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Net sales $ — $ 5,961 $ 97 $ (55 ) $ 6,003 Net sales, related party — 109 — — 109 Net sales — 6,070 97 (55 ) 6,112 Cost of products sold — 2,403 95 (58 ) 2,440 Selling, general and administrative expenses 22 858 82 2 964 Gain on divestitures — (4,843 ) (16 ) (2 ) (4,861 ) Amortization expense — 12 — — 12 Operating income (loss) (22 ) 7,640 (64 ) 3 7,557 Interest and debt expense 323 45 4 (46 ) 326 Interest income (47 ) (4 ) — 46 (5 ) Other (income) expense, net 240 (15 ) 4 22 251 Income (loss) before income taxes (538 ) 7,614 (72 ) (19 ) 6,985 Provision for (benefit from) income taxes (190 ) 2,840 (26 ) — 2,624 Equity income from subsidiaries 4,709 2 — (4,711 ) — Net income (loss) $ 4,361 $ 4,776 $ (46 ) $ (4,730 ) $ 4,361 For the Six Months Ended June 30, 2015 Net sales $ — $ 4,319 $ 150 $ (145 ) $ 4,324 Net sales, related party — 136 — — 136 Net sales — 4,455 150 (145 ) 4,460 Cost of products sold — 1,951 123 (140 ) 1,934 Selling, general and administrative expenses 62 762 138 — 962 Gain on divestitures — (3,499 ) — — (3,499 ) Amortization expense — 6 — — 6 Operating income (loss) (62 ) 5,235 (111 ) (5 ) 5,057 Interest and debt expense 189 50 4 (47 ) 196 Interest income (47 ) (1 ) — 47 (1 ) Other (income) expense, net 15 (21 ) (12 ) 21 3 Income (loss) before income taxes (219 ) 5,207 (103 ) (26 ) 4,859 Provision for (benefit from) income taxes (104 ) 2,705 (59 ) — 2,542 Equity income from subsidiaries 2,432 38 — (2,470 ) — Net income (loss) $ 2,317 $ 2,540 $ (44 ) $ (2,496 ) $ 2,317 Condensed Consolidating Statements of Comprehensive Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net income (loss) $ 796 $ 918 $ (23 ) $ (895 ) $ 796 Other comprehensive income (loss), net of tax: Retirement benefits 39 40 (1 ) (39 ) 39 Unrealized gain on long-term investments 4 4 — (4 ) 4 Cumulative translation adjustment and other (5 ) (5 ) (7 ) 12 (5 ) Comprehensive income (loss) $ 834 $ 957 $ (31 ) $ (926 ) $ 834 For the Three Months Ended June 30, 2015 Net income (loss) $ 1,928 $ 2,023 $ (15 ) $ (2,008 ) $ 1,928 Other comprehensive income (loss), net of tax: Retirement benefits (20 ) (17 ) (1 ) 18 (20 ) Amortization of realized loss on hedging instruments 1 — — — 1 Cumulative translation adjustment and other 10 10 13 (23 ) 10 Comprehensive income (loss) $ 1,919 $ 2,016 $ (3 ) $ (2,013 ) $ 1,919 For the Six Months Ended June 30, 2016 Net income (loss) $ 4,361 $ 4,776 $ (46 ) $ (4,730 ) $ 4,361 Other comprehensive income (loss), net of tax: Retirement benefits 33 34 (1 ) (33 ) 33 Unrealized gain on long-term investments 5 5 — (5 ) 5 Realized gain on long-term investments (2 ) (2 ) — 2 (2 ) Realized loss on hedging instruments 11 — — — 11 Cumulative translation adjustment and other 17 17 26 (43 ) 17 Comprehensive income (loss) $ 4,425 $ 4,830 $ (21 ) $ (4,809 ) $ 4,425 For the Six Months Ended June 30, 2015 Net income (loss) $ 2,317 $ 2,540 $ (44 ) $ (2,496 ) $ 2,317 Other comprehensive income (loss), net of tax: Retirement benefits (26 ) (23 ) (1 ) 24 (26 ) Amortization of realized loss on hedging instruments 1 — — — 1 Cumulative translation adjustment and other (17 ) (17 ) (27 ) 44 (17 ) Comprehensive income (loss) $ 2,275 $ 2,500 $ (72 ) $ (2,428 ) $ 2,275 Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (5 ) $ — $ — $ (5 ) Cost of products sold Amortization of prior service costs — (5 ) — — (5 ) Selling, general and administrative expenses — (10 ) — — (10 ) Operating income (loss) Deferred taxes — 4 — — 4 Provision for income taxes Net of tax — (6 ) — — (6 ) Net income (loss) Equity income from subsidiaries (6 ) — — 6 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (6 ) $ — $ 6 $ (6 ) Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (6 ) $ — $ — $ (6 ) Cost of products sold Amortization of prior service costs — (4 ) — — (4 ) Selling, general and administrative expenses — (10 ) — — (10 ) Operating income (loss) Deferred taxes — 3 — — 3 Provision for income taxes Net of tax — (7 ) — — (7 ) Net income (loss) Hedging instruments: Amortization of realized loss 1 — — — 1 Interest and debt expense Equity income from subsidiaries (7 ) — — 7 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (7 ) $ — $ 7 $ (6 ) Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (10 ) $ — $ — $ (10 ) Cost of products sold Amortization of prior service costs — (10 ) — — (10 ) Selling, general and administrative expenses — (20 ) — — (20 ) Operating income (loss) Deferred taxes — 8 — — 8 Provision for income taxes Net of tax — (12 ) — — (12 ) Net income (loss) Long-term investments: Realized gain on long-term investments — (3 ) — — (3 ) Other (income) expense, net Deferred taxes — 1 — — 1 Provision for income taxes Net of tax — (2 ) — — (2 ) Net income (loss) Hedging instruments: Forward starting interest rate contracts 17 — — — 17 Other (income) expense, net Deferred taxes (6 ) — — — (6 ) Provision for income taxes Net of tax 11 — — — 11 Net income (loss) Cumulative translation adjustment: Derecognition of cumulative translation adjustment — — 27 — 27 Gain on divestitures Equity income from subsidiaries 13 27 — (40 ) — Equity income from subsidiaries Total reclassifications $ 24 $ 13 $ 27 $ (40 ) $ 24 Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (11 ) $ — $ — $ (11 ) Cost of products sold Amortization of prior service costs — (9 ) — — (9 ) Selling, general and administrative expenses — (20 ) — — (20 ) Operating income (loss) Deferred taxes — 7 — — 7 Provision for income taxes Net of tax — (13 ) — — (13 ) Net income (loss) Hedging instruments: Amortization of realized loss 1 — — — 1 Interest and debt expense Equity income from subsidiaries (13 ) — — 13 — Equity income from subsidiaries Total reclassifications $ (12 ) $ (13 ) $ — $ 13 $ (12 ) Net income (loss) Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Cash flows from (used in) operating activities $ (1,012 ) $ 603 $ (23 ) $ (293 ) $ (725 ) Cash flows from (used in) investing activities: Capital expenditures — (89 ) (5 ) — (94 ) Proceeds from settlement of short-term investments — 159 — — 159 Proceeds from divestitures 5,015 — — — 5,015 Proceeds from settlement of long-term investments — 23 — — 23 Return of intercompany investments 412 26 — (438 ) — Other, net 260 11 — (271 ) — Net cash flows from (used in) investing activities 5,687 130 (5 ) (709 ) 5,103 Cash flows from (used in) financing activities: Dividends paid on common stock (1,113 ) (247 ) (25 ) 272 (1,113 ) Repurchase of common stock (149 ) — — — (149 ) Early extinguishment of debt (3,642 ) (8 ) — — (3,650 ) Redemption premium for early extinguishment of debt (118 ) (1 ) — — (119 ) Make-whole premium for early extinguishment of debt (88 ) — — — (88 ) Proceeds from termination of interest rate swaps — 66 — — 66 Debt issuance costs and financing fees (7 ) — — — (7 ) Excess tax benefit on stock-based compensation plans 26 — — — 26 Dividends paid on preferred stock (21 ) — — 21 — Distribution of equity — (412 ) (26 ) 438 — Other, net (11 ) (260 ) — 271 — Net cash flows used in financing activities (5,123 ) (862 ) (51 ) 1,002 (5,034 ) Effect of exchange rate changes on cash and cash equivalents — — 7 — 7 Net change in cash and cash equivalents (448 ) (129 ) (72 ) — (649 ) Cash and cash equivalents at beginning of period 575 1,544 448 — 2,567 Cash and cash equivalents at end of period $ 127 $ 1,415 $ 376 $ — $ 1,918 Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2015 Cash flows from (used in) operating activities $ 125 $ 826 $ (3 ) $ (500 ) $ 448 Cash flows from (used in) investing activities: Capital expenditures — (60 ) (3 ) (1 ) (64 ) Return of intercompany investments 185 — — (185 ) — Acquisition, net of cash acquired (18,278 ) 1,002 57 — (17,219 ) Proceeds from divestitures 7,056 — — — 7,056 Proceeds from settlement of long-term investments — 1 — — 1 Other, net (710 ) 11 (1 ) 700 — Net cash flows (used in) from investing activities (11,747 ) 954 53 514 (10,226 ) Cash flows from (used in) financing activities: Dividends paid on common stock (712 ) (479 ) — 479 (712 ) Repurchase of common stock (40 ) — — — (40 ) Proceeds from BAT Share Purchase 4,673 — — — 4,673 Debt issuance costs and financing fees (64 ) — — — (64 ) Issuance of long-term debt 8,975 — — — 8,975 Borrowings under revolving credit facility 1,400 — — — 1,400 Repayments of borrowings under revolving credit facility (1,400 ) — — — (1,400 ) Excess tax benefit on stock-based compensation plans 15 — — — 15 Dividends paid on preferred stock (21 ) — — 21 — Distribution of equity — (185 ) — 185 — Other, net (11 ) 680 30 (699 ) — Net cash flows from financing activities 12,815 16 30 (14 ) 12,847 Effect of exchange rate changes on cash and cash equivalents — — (22 ) — (22 ) Net change in cash and cash equivalents 1,193 1,796 58 — 3,047 Cash and cash equivalents at beginning of period 102 469 395 — 966 Cash and cash equivalents at end of period $ 1,295 $ 2,265 $ 453 $ — $ 4,013 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated June 30, 2016 Assets Cash and cash equivalents $ 127 $ 1,415 $ 376 $ — $ 1,918 Short-term investments — 26 — — 26 Accounts receivable — 81 8 — 89 Accounts receivable, related party — 33 — — 33 Other receivables 65 3,438 16 (3,506 ) 13 Inventories — 1,520 22 (1 ) 1,541 Deferred income taxes, net 9 1,002 7 — 1,018 Other current assets 8 259 75 (75 ) 267 Total current assets 209 7,774 504 (3,582 ) 4,905 Property, plant and equipment, net 3 1,259 33 — 1,295 Trademarks and other intangible assets, net — 29,442 15 (2 ) 29,455 Goodwill — 15,977 16 — 15,993 Long-term intercompany notes receivable 1,322 159 — (1,481 ) — Investment in subsidiaries 37,981 393 — (38,374 ) — Other assets and deferred charges 162 100 34 (172 ) 124 Total assets $ 39,677 $ 55,104 $ 602 $ (43,611 ) $ 51,772 Liabilities and shareholders’ equity Accounts payable $ 1 $ 184 $ 6 $ — $ 191 Tobacco settlement accruals — 1,696 — — 1,696 Due to related party — 2 — — 2 Deferred revenue, related party — 16 — — 16 Current maturities of long-term debt 416 85 — — 501 Dividends payable on common stock 599 — — — 599 Income taxes payable 702 4 — (78 ) 628 Other current liabilities 3,428 1,015 208 (3,506 ) 1,145 Total current liabilities 5,146 3,002 214 (3,584 ) 4,778 Long-term intercompany notes payable 159 1,000 322 (1,481 ) — Long-term debt (less current maturities) 12,876 316 — — 13,192 Deferred income taxes, net — 10,535 — (169 ) 10,366 Long-term retirement benefits (less current portion) 55 1,716 42 — 1,813 Other noncurrent liabilities 41 182 — — 223 Shareholders’ equity 21,400 38,353 24 (38,377 ) 21,400 Total liabilities and shareholders’ equity $ 39,677 $ 55,104 $ 602 $ (43,611 ) $ 51,772 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated December 31, 2015 Assets Cash and cash equivalents $ 575 $ 1,544 $ 448 $ — $ 2,567 Short-term investments — 149 — — 149 Accounts receivable — 62 6 — 68 Accounts receivable, related party — 38 — — 38 Other receivables 70 3,459 91 (3,585 ) 35 Inventories — 1,694 44 (4 ) 1,734 Deferred income taxes, net 14 1,011 7 — 1,032 Other current assets 116 323 129 (4 ) 564 Total current assets 775 8,280 725 (3,593 ) 6,187 Property, plant and equipment, net 3 1,223 29 — 1,255 Trademarks and other intangible assets, net — 29,467 — — 29,467 Goodwill — 15,976 17 — 15,993 Long-term intercompany notes receivable 1,583 169 — (1,752 ) — Investment in subsidiaries 37,151 662 — (37,813 ) — Other assets and deferred charges 175 212 31 (188 ) 230 Total assets $ 39,687 $ 55,989 $ 802 $ (43,346 ) $ 53,132 Liabilities and shareholders’ equity Accounts payable $ 2 $ 173 $ 4 $ — $ 179 Tobacco settlement accruals — 2,816 — — 2,816 Due to related party — 9 — — 9 Deferred revenue, related party — 33 — — 33 Current maturities of long-term debt 420 86 — — 506 Dividends payable on common stock 514 — — — 514 Other current liabilities 3,707 1,039 79 (3,591 ) 1,234 Total current liabilities 4,643 4,156 83 (3,591 ) 5,291 Long-term intercompany notes payable 169 1,260 323 (1,752 ) — Long-term debt (less current maturities) 16,522 327 — — 16,849 Deferred income taxes, net — 10,421 — (185 ) 10,236 Long-term retirement benefits (less current portion) 57 2,153 55 — 2,265 Other noncurrent liabilities 44 195 — — 239 Shareholders’ equity 18,252 37,477 341 (37,818 ) 18,252 Total liabilities and shareholders’ equity $ 39,687 $ 55,989 $ 802 $ (43,346 ) $ 53,132
RJR Tobacco
RAI Guaranteed, Unsecured Notes - Condensed Consolidating Financial Statements	Note 16 — RJR Tobacco Guaranteed, Unsecured Notes — Condensed Consolidating Financial Statements The following condensed consolidating financial statements relate to the guaranties of RJR Tobacco’s $369 million aggregate principal amount of unsecured notes. See note 9 for additional information related to these notes. RAI and RJR have fully and unconditionally, and jointly and severally, guaranteed these notes. The following condensed consolidating financial statements include: the accounts and activities of RAI, the Parent Guarantor; RJR Tobacco, the Issuer; RJR, a Guarantor; other direct and indirect subsidiaries of RAI that are not Guarantors; and elimination adjustments. Condensed Consolidating Statements of Income (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net sales $ — $ 2,626 $ — $ 557 $ (42 ) $ 3,141 Net sales, related party — 54 — — — 54 Net sales — 2,680 — 557 (42 ) 3,195 Cost of products sold — 1,108 — 210 (43 ) 1,275 Selling, general and administrative expenses, net 6 714 — (223 ) 2 499 Amortization expense — 5 — 1 — 6 Operating income (loss) (6 ) 853 — 569 (1 ) 1,415 Interest and debt expense 149 3 — 22 (22 ) 152 Interest income (21 ) (1 ) (1 ) (1 ) 22 (2 ) Other (income) expense, net — 2 (10 ) (4 ) 11 (1 ) Income (loss) before income taxes (134 ) 849 11 552 (12 ) 1,266 Provision for (benefit from) income taxes (48 ) 325 — 193 — 470 Equity income from subsidiaries 882 220 746 — (1,848 ) — Net income $ 796 $ 744 $ 757 $ 359 $ (1,860 ) $ 796 For the Three Months Ended June 30, 2015 Net sales $ — $ 1,875 $ — $ 524 $ (50 ) $ 2,349 Net sales, related party — 54 — — — 54 Net sales — 1,929 — 524 (50 ) 2,403 Cost of products sold — 953 — 180 (49 ) 1,084 Selling, general and administrative expenses 43 375 — 33 — 451 (Gain) loss on divestitures — 1,891 — (5,390 ) — (3,499 ) Amortization expense — 2 — 1 — 3 Operating income (loss) (43 ) (1,292 ) — 5,700 (1 ) 4,364 Interest and debt expense 98 9 — 27 (29 ) 105 Interest income (28 ) — (1 ) — 29 — Other (income) expense, net 14 — (11 ) 6 11 20 Income (loss) before income taxes (127 ) (1,301 ) 12 5,667 (12 ) 4,239 Provision for (benefit from) income taxes (77 ) 313 — 2,075 — 2,311 Equity income from subsidiaries 1,978 3,449 1,864 — (7,291 ) — Net income $ 1,928 $ 1,835 $ 1,876 $ 3,592 $ (7,303 ) $ 1,928 Condensed Consolidating Statements of Income (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Net sales $ — $ 5,009 $ — $ 1,081 $ (87 ) $ 6,003 Net sales, related party — 109 — — — 109 Net sales — 5,118 — 1,081 (87 ) 6,112 Cost of products sold — 2,125 — 404 (89 ) 2,440 Selling, general and administrative expenses, net 22 1,349 — (409 ) 2 964 Gain on divestitures — — — (4,861 ) — (4,861 ) Amortization expense — 9 — 3 — 12 Operating income (loss) (22 ) 1,635 — 5,944 — 7,557 Interest and debt expense 323 3 — 48 (48 ) 326 Interest income (47 ) (3 ) (2 ) (1 ) 48 (5 ) Other (income) expense, net 240 6 (20 ) 3 22 251 Income (loss) before income taxes (538 ) 1,629 22 5,894 (22 ) 6,985 Provision for (benefit from) income taxes (190 ) 652 — 2,162 — 2,624 Equity income from subsidiaries 4,709 404 1,402 — (6,515 ) — Net income $ 4,361 $ 1,381 $ 1,424 $ 3,732 $ (6,537 ) $ 4,361 For the Six Months Ended June 30, 2015 Net sales $ — $ 3,496 $ — $ 958 $ (130 ) $ 4,324 Net sales, related party — 136 — — — 136 Net sales — 3,632 — 958 (130 ) 4,460 Cost of products sold — 1,711 — 349 (126 ) 1,934 Selling, general and administrative expenses 62 827 — 73 — 962 (Gain) loss on divestitures — 1,891 — (5,390 ) — (3,499 ) Amortization expense — 3 — 3 — 6 Operating income (loss) (62 ) (800 ) — 5,923 (4 ) 5,057 Interest and debt expense 189 14 — 42 (49 ) 196 Interest income (47 ) (1 ) (2 ) — 49 (1 ) Other (income) expense, net 15 — (21 ) (12 ) 21 3 Income (loss) before income taxes (219 ) (813 ) 23 5,893 (25 ) 4,859 Provision for (benefit from) income taxes (104 ) 489 — 2,157 — 2,542 Equity income from subsidiaries 2,432 3,527 2,252 — (8,211 ) — Net income $ 2,317 $ 2,225 $ 2,275 $ 3,736 $ (8,236 ) $ 2,317 Condensed Consolidating Statements of Comprehensive Income (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net income $ 796 $ 744 $ 757 $ 359 $ (1,860 ) $ 796 Other comprehensive income (loss), net of tax: Retirement benefits 39 44 42 (3 ) (83 ) 39 Unrealized gain on long-term investments 4 4 4 — (8 ) 4 Realized loss on hedging instruments — — — — — — Cumulative translation adjustment and other (5 ) (4 ) (5 ) (5 ) 14 (5 ) Comprehensive income $ 834 $ 788 $ 798 $ 351 $ (1,937 ) $ 834 For the Three Months Ended June 30, 2015 Net income $ 1,928 $ 1,835 $ 1,876 $ 3,592 $ (7,303 ) $ 1,928 Other comprehensive income (loss), net of tax: Retirement benefits (20 ) (13 ) (14 ) (5 ) 32 (20 ) Amortization of realized loss on hedging instruments 1 — — — — 1 Cumulative translation adjustment and other 10 10 10 10 (30 ) 10 Comprehensive income $ 1,919 $ 1,832 $ 1,872 $ 3,597 $ (7,301 ) $ 1,919 For the Six Months Ended June 30, 2016 Net income $ 4,361 $ 1,381 $ 1,424 $ 3,732 $ (6,537 ) $ 4,361 Other comprehensive income (loss), net of tax: Retirement benefits 33 38 36 (3 ) (71 ) 33 Unrealized gain on long-term investments 5 5 5 — (10 ) 5 Realized gain on long-term investments (2 ) (2 ) (2 ) — 4 (2 ) Realized loss on hedging instruments 11 — — — — 11 Cumulative translation adjustment and other 17 17 17 17 (51 ) 17 Comprehensive income $ 4,425 $ 1,439 $ 1,480 $ 3,746 $ (6,665 ) $ 4,425 For the Six Months Ended June 30, 2015 Net income $ 2,317 $ 2,225 $ 2,275 $ 3,736 $ (8,236 ) $ 2,317 Other comprehensive income (loss), net of tax: Retirement benefits (26 ) (18 ) (19 ) (5 ) 42 (26 ) Amortization of realized loss on hedging instruments 1 — — — — 1 Cumulative translation adjustment and other (17 ) (17 ) (16 ) (17 ) 50 (17 ) Comprehensive income $ 2,275 $ 2,190 $ 2,240 $ 3,714 $ (8,144 ) $ 2,275 Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (5 ) $ — $ — $ — $ (5 ) Cost of products sold Amortization of prior service costs — (5 ) — — — (5 ) Selling, general and administrative expenses, net — (10 ) — — — (10 ) Operating income (loss) Deferred taxes — 4 — — — 4 Provision for income taxes Net of tax — (6 ) — — — (6 ) Net income Equity income from subsidiaries (6 ) — (6 ) — 12 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (6 ) $ (6 ) $ — $ 12 $ (6 ) Net income Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (5 ) $ — $ (1 ) $ — $ (6 ) Cost of products sold Amortization of prior service costs — (4 ) — — — (4 ) Selling, general and administrative expenses — (9 ) — (1 ) — (10 ) Operating income (loss) Deferred taxes — 3 — — — 3 Provision for income taxes Net of tax — (6 ) — (1 ) — (7 ) Net income Loss on hedging instruments: Amortization of realized loss 1 — — — — 1 Interest and debt expense Equity income from subsidiaries (7 ) (1 ) (7 ) — 15 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (7 ) $ (7 ) $ (1 ) $ 15 $ (6 ) Net income Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (10 ) $ — $ — $ — $ (10 ) Cost of products sold Amortization of prior service costs — (10 ) — — — (10 ) Selling, general and administrative expenses, net — (20 ) — — — (20 ) Operating income (loss) Deferred taxes — 8 — — — 8 Provision for income taxes Net of tax — (12 ) — — — (12 ) Net income Long-term investments: Realized gain on long-term investments — (3 ) — — — (3 ) Other (income) expense, net Deferred taxes — 1 — — — 1 Provision for income taxes Net of tax — (2 ) — — — (2 ) Net income Hedging instruments: Forward starting interest rate contracts 17 — — — — 17 Other (income) expense, net Deferred taxes (6 ) — — — — (6 ) Provision for income taxes Net of tax 11 — — — — 11 Net income Cumulative translation adjustment: Derecognition of cumulative translation adjustment — — — 27 — 27 Gain on divestitures Equity income from subsidiaries 13 27 13 — (53 ) — Equity income from subsidiaries Total reclassifications $ 24 $ 13 $ 13 $ 27 $ (53 ) $ 24 Net income Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (10 ) $ — $ (1 ) $ — $ (11 ) Cost of products sold Amortization of prior service costs — (9 ) — — — (9 ) Selling, general and administrative expenses — (19 ) — (1 ) — (20 ) Operating income (loss) Deferred taxes — 7 — — — 7 Provision for income taxes Net of tax — (12 ) — (1 ) — (13 ) Net income (loss) Loss on hedging instruments: Amortization of realized loss 1 — — — — 1 Interest and debt expense Equity income from subsidiaries (13 ) (1 ) (13 ) — 27 — Equity income from subsidiaries Total reclassifications $ (12 ) $ (13 ) $ (13 ) $ (1 ) $ 27 $ (12 ) Net income (loss) Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Cash flows from (used in) operating activities $ (1,012 ) $ 120 $ 38 $ 611 $ (482 ) $ (725 ) Cash flows from (used in) investing activities: Capital expenditures — (59 ) — (35 ) — (94 ) Proceeds from settlement of short-term investments — 159 — — — 159 Proceeds from divestitures 5,015 — — — — 5,015 Proceeds from settlement of long-term investments — 23 — — — 23 Return of intercompany investments 412 495 598 — (1,505 ) — Other, net 260 — 8 11 (279 ) — Net cash flows from (used in) investing activities 5,687 618 606 (24 ) (1,784 ) 5,103 Cash flows from (used in) financing activities: Dividends paid on common stock (1,113 ) (9 ) (247 ) (205 ) 461 (1,113 ) Repurchase of common stock (149 ) — — — — (149 ) Early extinguishment of debt (3,642 ) (8 ) — — — (3,650 ) Redemption premium for early extinguishment of debt (118 ) (1 ) — — — (119 ) Make-whole premium for early extinguishment of debt (88 ) — — — — (88 ) Proceeds from termination of interest rate swaps — 66 — — — 66 Debt issuance costs and financing fees (7 ) — — — — (7 ) Excess tax benefit on stock-based compensation plans 26 — — — — 26 Dividends paid on preferred stock (21 ) — — — 21 — Distribution of equity — (580 ) (412 ) (513 ) 1,505 — Other, net (11 ) — — (268 ) 279 — Net cash flows used in financing activities (5,123 ) (532 ) (659 ) (986 ) 2,266 (5,034 ) Effect of exchange rate changes on cash and cash equivalents — — — 7 — 7 Net change in cash and cash equivalents (448 ) 206 (15 ) (392 ) — (649 ) Cash and cash equivalents at beginning of period 575 809 19 1,164 — 2,567 Cash and cash equivalents at end of period $ 127 $ 1,015 $ 4 $ 772 $ — $ 1,918 Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2015 Cash flows from operating activities $ 125 $ 700 $ 485 $ 208 $ (1,070 ) $ 448 Cash flows from (used in) investing activities: Capital expenditures — (34 ) — (29 ) (1 ) (64 ) Return of intercompany investments 185 10 184 — (379 ) — Acquisition, net of cash acquired (18,278 ) 524 — 535 — (17,219 ) Proceeds from divestitures 7,056 — — — — 7,056 Proceeds from settlement of long-term investments — 1 1 Other, net (710 ) — 8 11 691 — Net cash flows (used in) from investing activities (11,747 ) 501 192 517 311 (10,226 ) Cash flows from (used in) financing activities: Dividends paid on common stock (712 ) (461 ) (479 ) (110 ) 1,050 (712 ) Repurchase of common stock (40 ) — — — — (40 ) Proceeds from BAT Share Purchase 4,673 — — — — 4,673 Debt issuance costs and financing fees (64 ) — — — — (64 ) Issuance of long-term debt 8,975 — — — — 8,975 Borrowings under revolving credit facility 1,400 — — — — 1,400 Repayments of borrowings under revolving credit facility (1,400 ) — — — — (1,400 ) Excess tax benefit on stock-based compensation plans 15 — — — — 15 Dividends paid on preferred stock (21 ) — — — 21 — Distribution of equity — (184 ) (185 ) (10 ) 379 — Other, net (11 ) 700 — 2 (691 ) — Net cash flows from (used in) financing activities 12,815 55 (664 ) (118 ) 759 12,847 Effect of exchange rate changes on cash and cash equivalents — — — (22 ) — (22 ) Net change in cash and cash equivalents 1,193 1,256 13 585 — 3,047 Cash and cash equivalents at beginning of period 102 327 3 534 — 966 Cash and cash equivalents at end of period $ 1,295 $ 1,583 $ 16 $ 1,119 $ — $ 4,013 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated June 30, 2016 Assets Cash and cash equivalents $ 127 $ 1,015 $ 4 $ 772 $ — $ 1,918 Short-term investments — 26 — — — 26 Accounts receivable — 57 — 32 — 89 Accounts receivable, related party — 33 — — — 33 Other receivables 65 9 17 4,783 (4,861 ) 13 Inventories — 825 — 717 (1 ) 1,541 Deferred income taxes, net 9 903 1 105 — 1,018 Other current assets 8 226 — 104 (71 ) 267 Total current assets 209 3,094 22 6,513 (4,933 ) 4,905 Property, plant and equipment, net 3 817 — 475 — 1,295 Trademarks and other intangible assets, net — 324 — 29,133 (2 ) 29,455 Goodwill — 3,453 9,853 2,687 — 15,993 Long-term intercompany notes receivable 1,322 — 82 159 (1,563 ) — Investment in subsidiaries 37,981 22,893 24,898 — (85,772 ) — Other assets and deferred charges 162 543 10 16 (607 ) 124 Total assets $ 39,677 $ 31,124 $ 34,865 $ 38,983 $ (92,877 ) $ 51,772 Liabilities and shareholders’ equity Accounts payable $ 1 $ 166 $ — $ 24 $ — $ 191 Tobacco settlement accruals — 1,606 — 90 — 1,696 Due to related party — 2 — — — 2 Deferred revenue, related party — 16 — — — 16 Current maturities of long-term debt 416 85 — — — 501 Dividends payable on common stock 599 — — — — 599 Income taxes payable 702 — — — (74 ) 628 Other current liabilities 3,428 2,310 21 247 (4,861 ) 1,145 Total current liabilities 5,146 4,185 21 361 (4,935 ) 4,778 Long-term intercompany notes payable 159 — — 1,404 (1,563 ) — Long-term debt (less current maturities) 12,876 316 — — — 13,192 Deferred income taxes, net — 1 — 10,969 (604 ) 10,366 Long-term retirement benefits (less current portion) 55 1,606 27 125 — 1,813 Other noncurrent liabilities 41 159 — 23 — 223 Shareholders’ equity 21,400 24,857 34,817 26,101 (85,775 ) 21,400 Total liabilities and shareholders’ equity $ 39,677 $ 31,124 $ 34,865 $ 38,983 $ (92,877 ) $ 51,772 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated December 31, 2015 Assets Cash and cash equivalents $ 575 $ 809 $ 19 $ 1,164 $ — $ 2,567 Short-term investments — 149 — — — 149 Accounts receivable — 48 — 20 — 68 Accounts receivable, related party — 38 — — — 38 Other receivables 70 30 17 4,890 (4,972 ) 35 Inventories — 941 — 797 (4 ) 1,734 Deferred income taxes, net 14 928 1 89 — 1,032 Other current assets 116 236 — 212 — 564 Total current assets 775 3,179 37 7,172 (4,976 ) 6,187 Property, plant and equipment, net 3 792 — 460 — 1,255 Trademarks and other intangible assets, net — 346 — 29,121 — 29,467 Goodwill — 3,453 9,853 2,687 — 15,993 Long-term intercompany notes receivable 1,583 — 90 169 (1,842 ) — Investment in subsidiaries 37,151 23,199 24,276 — (84,626 ) — Other assets and deferred charges 175 783 13 9 (750 ) 230 Total assets $ 39,687 $ 31,752 $ 34,269 $ 39,618 $ (92,194 ) $ 53,132 Liabilities and shareholders’ equity Accounts payable $ 2 $ 146 $ — $ 31 $ — $ 179 Tobacco settlement accruals — 2,673 — 143 — 2,816 Due to related party — 9 — — — 9 Deferred revenue, related party — 33 — — — 33 Current maturities of long-term debt 420 86 — — — 506 Dividends payable on common stock 514 — — — — 514 Other current liabilities 3,707 2,189 31 284 (4,977 ) 1,234 Total current liabilities 4,643 5,136 31 458 (4,977 ) 5,291 Long-term intercompany notes payable 169 — — 1,673 (1,842 ) — Long-term debt (less current maturities) 16,522 327 — — — 16,849 Deferred income taxes, net — 1 — 10,981 (746 ) 10,236 Long-term retirement benefits (less current portion) 57 2,036 30 142 — 2,265 Other noncurrent liabilities 44 182 — 13 — 239 Shareholders’ equity 18,252 24,070 34,208 26,351 (84,629 ) 18,252 Total liabilities and shareholders’ equity $ 39,687 $ 31,752 $ 34,269 $ 39,618 $ (92,194 ) $ 53,132

Business and Summary of Signi25

Business and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Operating Segments	Operating Segments RAI’s reportable operating segments are RJR Tobacco, Santa Fe and American Snuff. The RJR Tobacco segment consists principally of the primary operations of R. J. Reynolds Tobacco Company. The Santa Fe segment consists of the domestic operations of SFNTC. The American Snuff segment consists of the primary operations of American Snuff Co. Included in All Other, among other RAI subsidiaries, are RJR Vapor, Niconovum USA, Inc., Niconovum AB, and until their sale on January 13, 2016, as described above, SFRTI and various foreign subsidiaries affiliated with SFRTI. The segments were identified based on how RAI’s chief operating decision maker allocates resources and assesses performance. Certain of RAI’s operating subsidiaries have entered into intercompany agreements for products or services with other subsidiaries. As a result, certain activities of an operating subsidiary may be included in a different segment of RAI. RAI’s operating subsidiaries primarily conduct their businesses in the United States.
Basis of Presentation	Basis of Presentation The accompanying interim condensed consolidated financial statements (unaudited) have been prepared in accordance with accounting principles generally accepted in the United States of America, referred to as GAAP, for interim financial information and, in management’s opinion, contain all adjustments, consisting only of normal recurring items, necessary for a fair presentation of the results for the periods presented. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All material intercompany balances have been eliminated. For interim reporting purposes, certain costs and expenses are charged to operations in proportion to the estimated total annual amount expected to be incurred primarily based on sales volumes. The results for the interim periods ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The condensed consolidated financial statements (unaudited) should be read in conjunction with the consolidated financial statements and related footnotes, which appear in RAI’s Annual Report on Form 10-K for the year ended December 31, 2015. Certain reclassifications were made to conform prior years’ financial statements to the current presentation. Certain amounts presented in note 10 are rounded in the aggregate and may not sum from the individually presented components. All dollar amounts, other than per share amounts, are presented in millions, except for amounts set forth in note 10 and as otherwise noted. All share and per share amounts reflect the two-for-one split of RAI’s common stock on August 31, 2015, unless otherwise noted.
Cost of Products Sold	Cost of Products Sold Cost of products sold includes, among other expenses, the expenses for the Master Settlement Agreement, referred to as the MSA, and other settlement agreements with the States of Mississippi, Florida, Texas and Minnesota, which together with the MSA are collectively referred to as the State Settlement Agreements, and the user fees charged by the U.S. Food and Drug Administration, referred to as the FDA. These expenses were as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 State Settlement Agreements $ 719 $ 571 $ 1,349 $ 965 FDA user fees 49 38 99 73 In 2012, RJR Tobacco, Lorillard Tobacco, SFNTC and certain other participating manufacturers, referred to as the PMs, entered into a term sheet, referred to as the Term Sheet, with 17 states, the District of Columbia and Puerto Rico to settle certain claims related to the MSA non-participating manufacturer adjustment, referred to as the NPM Adjustment. The Term Sheet resolved claims related to volume years from 2003 through 2012 and put in place a revised method to determine future adjustments from 2013 forward as to jurisdictions that join the agreement. Subsequently, five additional states joined the Term Sheet, including two states that were found to have not diligently enforced their qualifying statutes, some on terms that were marginally more favorable to the PMs than those of the original signatories. The parties to the Term Sheet represent an allocable share of 49.87%. As a result of meeting the performance requirements associated with the Term Sheet, RJR Tobacco and Santa Fe, collectively, recognized credits of $74 million and $69 million for the three months ended June 30, 2016 and 2015, respectively, and $143 million and $135 million for the six months ended June 30, 2016 and 2015, respectively. Credits recognized in the three and six months ended June 30, 2016 and 2015, include the benefit of the additional credits received as a result of the Lorillard Tobacco Merger. In September 2013, an arbitration panel ruled six states had not diligently enforced their qualifying statutes in 2003 related to the NPM Adjustment. Certain findings by the arbitration panel against four of these states are currently in litigation and as such, the full amount of recovery from these states is uncertain. For the amounts that were certain and estimable, RJR Tobacco and Santa Fe, collectively, recognized $70 million as a reduction of cost of products sold in the six months ended June 30, 2015. No comparable amounts were recognized in the six months ended June 30, 2016. In October 2015, RJR Tobacco, SFNTC and certain other PMs entered into a settlement agreement, referred to as the NY Settlement Agreement, with the State of New York to settle certain claims related to the NPM Adjustment. The NY Settlement Agreement resolved NPM Adjustment claims related to payment years from 2004 through 2014, providing RJR Tobacco and SFNTC, collectively, with credits, of approximately $290 million, plus interest, that will be recognized through 2018 subject to meeting various performance obligations. These credits will be applied against annual payments under the MSA over a four-year period, which commenced with the April 2016 MSA payment. In addition, the NY Settlement Agreement put in place a new method to determine future adjustments from 2015 forward as to New York. RJR Tobacco and Santa Fe, collectively, recognized credits of $24 million and $46 million as a reduction to costs of products sold for the three and six months ended June 30, 2016, respectively. For additional information related to the NPM Adjustment settlement and the 2003 NPM Adjustment claim, see “—Litigation Affecting the Cigarette Industry —State Settlement Agreements—Enforcement and Validity; Adjustments” in note 10.
Pension and Postretirement	Pension and Postretirement Pension and postretirement benefits require balance sheet recognition of the net asset or liability for the overfunded or underfunded status of defined benefit pension and other postretirement benefit plans, on a plan-by-plan basis, and recognition of changes in the funded status in the year in which the changes occur. Actuarial gains or losses are changes in the amount of either the benefit obligation or the fair value of plan assets resulting from experience different from that assumed or from changes in assumptions. Differences between actual results and actuarial assumptions are accumulated and recognized as a mark-to-market adjustment, referred to as an MTM adjustment, to the extent such net gains and losses exceed 10% of the greater of the fair value of plan assets or benefit obligations, referred to as the corridor. Actuarial gains and losses outside the corridor are generally recognized annually as of December 31, or when a plan is remeasured during an interim period. Prior service costs (credits) for pension benefits, which are changes in benefit obligations due to plan amendments, are amortized on a straight-line basis over the average remaining service period for active employees, or average remaining life expectancies for inactive employees if most of the plan obligations are due to inactive employees. Prior service costs (credits) for postretirement benefits, which are changes in benefit obligations due to plan amendments, are amortized on a straight-line basis over the expected service period to full eligibility age for active employees, or average remaining life expectancies for inactive employees if most of the plan obligations are due to inactive employees. The components of the pension benefits and the postretirement benefits are set forth below: For the Three Months Ended June 30, For the Six Months Ended June 30, Postretirement Postretirement Pension Benefits Benefits Pension Benefits Benefits 2016 2015 2016 2015 2016 2015 2016 2015 Service cost $ 4 $ 7 $ — $ — $ 8 $ 13 $ 1 $ 1 Interest cost 74 67 11 12 148 131 24 24 Expected return on plan assets (93 ) (90 ) (2 ) (3 ) (186 ) (178 ) (5 ) (6 ) Amortization of prior service cost (credit) — — (10 ) (10 ) 1 1 (21 ) (21 ) Total benefit income $ (15 ) $ (16 ) $ (1 ) $ (1 ) $ (29 ) $ (33 ) $ (1 ) $ (2 ) RAI disclosed in its financial statements for the year ended December 31, 2015, that it expects to contribute $335 million to its pension plans in 2016, of which $330 million was contributed during the first six months of 2016.
Fair Value Measurement	Fair Value Measurement RAI determines the fair value of assets and liabilities using a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions based on the best information available in the circumstances. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. The levels of the fair value hierarchy are: Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. RAI evaluates its investments for possible impairment based on current economic conditions, credit loss experience and other criteria on a quarterly basis. The evaluation of investments for impairment requires significant judgments, including: · the identification of potentially impaired securities; · the determination of their estimated fair value; · the assessment of whether any decline in estimated fair value is other-than-temporary; and · the likelihood of selling before recovery. If there is a decline in a security’s net realizable value that is other-than-temporary and it is not likely to be sold before recovery, the decline is separated into the amount of impairment related to credit loss and the amount of impairment related to all other factors. The decline related to the credit loss is recognized in earnings, while the decline related to all other factors is recognized in accumulated other comprehensive loss.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In April 2015, the Financial Accounting Standards Board, referred to as FASB, issued an Accounting Standards Update, referred to as ASU, 2015-03, Simplifying the Presentation of Debt Issuance Costs. Interest—Imputation of Interest (Subtopic 835-30), In April 2015, the FASB issued ASU 2015-05, Internal Use Software,
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, Revenue from Contracts with Customers (Topic 606)—Deferral of the Effective Date, · ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), · ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, · ASU 2016-11, Revenue Recognition (Topic 605) and Derivative and Hedging (Topic 815) – Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting; · ASU 2016-12, Revenue Recognition from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, RAI continues to evaluate the effect this guidance will have on its results of operations, cash flows and financial position. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities, In February 2016, the FASB issued ASU 2016-02, Leases, Revenue from Contracts with Customers. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting,

Business and Summary of Signi26

Business and Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Certain Component Of Cost Of Products Sold	Cost of products sold includes, among other expenses, the expenses for the Master Settlement Agreement, referred to as the MSA, and other settlement agreements with the States of Mississippi, Florida, Texas and Minnesota, which together with the MSA are collectively referred to as the State Settlement Agreements, and the user fees charged by the U.S. Food and Drug Administration, referred to as the FDA. These expenses were as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 State Settlement Agreements $ 719 $ 571 $ 1,349 $ 965 FDA user fees 49 38 99 73
Components of Pension Benefits and Postretirement Benefits	The components of the pension benefits and the postretirement benefits are set forth below: For the Three Months Ended June 30, For the Six Months Ended June 30, Postretirement Postretirement Pension Benefits Benefits Pension Benefits Benefits 2016 2015 2016 2015 2016 2015 2016 2015 Service cost $ 4 $ 7 $ — $ — $ 8 $ 13 $ 1 $ 1 Interest cost 74 67 11 12 148 131 24 24 Expected return on plan assets (93 ) (90 ) (2 ) (3 ) (186 ) (178 ) (5 ) (6 ) Amortization of prior service cost (credit) — — (10 ) (10 ) 1 1 (21 ) (21 ) Total benefit income $ (15 ) $ (16 ) $ (1 ) $ (1 ) $ (29 ) $ (33 ) $ (1 ) $ (2 )

Sale of International Rights 27

Sale of International Rights to the Natural American Spirit Brand (Tables)	6 Months Ended
	Jun. 30, 2016
Business Combinations [Abstract]
Summary of Pre-tax Gain	The components of the pre-tax gain, which was recorded in the first six months of 2016, were as follows: Purchase price $ 5,015 Net assets and liabilities divested (154 ) Gain on divestiture $ 4,861

Fair Value (Tables)

Fair Value (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value of Financial Assets	Financial assets carried at fair value were as follows: June 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash equivalents $ 1,865 $ — $ — $ 1,865 $ 2,454 $ — $ — $ 2,454 Short-term investments: Corporate debt securities — — — — — 96 — 96 U.S. Governmental agency obligations — — — — — 43 — 43 Commercial paper — — — — — 10 — 10 Auction rate securities — — 26 26 — — — — Other assets and deferred charges: Auction rate securities — — 34 34 — — 79 79 Mortgage-backed security — — 9 9 — — 10 10 Marketable equity security — — — — 1 — — 1 Interest rate swaps — — — — — 53 — 53
Financial Assets Classified as Level 3 Investments	Financial assets classified as Level 3 investments were as follows: June 30, 2016 December 31, 2015 Cost Gross Unrealized Loss Estimated Fair Value Cost Gross Unrealized Loss Estimated Fair Value Auction rate securities $ 75 $ (15 ) $ 60 $ 99 $ (20 ) $ 79 Mortgage-backed security 15 (6 ) 9 16 (6 ) 10 $ 90 $ (21 ) $ 69 $ 115 $ (26 ) $ 89

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2016
Goodwill And Intangible Assets Disclosure [Abstract]
Changes in Carrying Amounts of Goodwill by Segment	The changes in the carrying amounts of goodwill by segment were as follows: RJR Tobacco Santa Fe American Snuff All Other Consolidated Balance as of December 31, 2015 Goodwill $ 17,069 $ 197 $ 2,501 $ 17 $ 19,784 Less: accumulated impairment charges (3,763 ) — (28 ) — (3,791 ) $ 13,306 $ 197 $ 2,473 $ 17 $ 15,993 Balance as of June 30, 2016 Goodwill $ 17,069 $ 197 $ 2,501 $ 17 $ 19,784 Less: accumulated impairment charges (3,763 ) — (28 ) — (3,791 ) $ 13,306 $ 197 $ 2,473 $ 17 $ 15,993
Carrying Amounts and Changes of Trademarks and Other Intangible Assets by Segment	The carrying amounts and changes therein of trademarks and other intangible assets by segment were as follows: RJR Tobacco Santa Fe American Snuff All Other Consolidated Trademarks Other Trademarks Trademarks Other Trademarks Other Indefinite-lived: Balance as of December 31, 2015 $ 27,826 $ 87 $ 136 $ 1,136 $ — $ 29,098 $ 87 Balance as of June 30, 2016 $ 27,826 $ 87 $ 136 $ 1,136 $ — $ 29,098 $ 87 Finite-lived: Balance as of December 31, 2015 $ 17 $ 259 $ — $ 6 $ — $ 23 $ 259 Intercompany transfer — (13 ) — — 13 — — Amortization (3 ) (9 ) — — — (3 ) (9 ) Balance as of June 30, 2016 $ 14 $ 237 $ — $ 6 $ 13 $ 20 $ 250
Details of Finite-Lived Intangible Assets	Details of finite-lived intangible assets were as follows: June 30, 2016 December 31, 2015 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer lists $ 240 $ (13 ) $ 227 $ 240 $ (7 ) $ 233 Contract manufacturing agreements 151 (141 ) 10 151 (139 ) 12 Trademarks 124 (104 ) 20 124 (101 ) 23 Other intangibles 15 (2 ) 13 15 (1 ) 14 $ 530 $ (260 ) $ 270 $ 530 $ (248 ) $ 282
Finite-Lived Intangible Assets Estimated Future Amortization Expense	The estimated remaining amortization expense associated with finite-lived intangible assets is expected to be as follows: Year Amount Remainder of 2016 $ 11 2017 23 2018 22 2019 16 2020 15 Thereafter 183 $ 270

Income Per Share (Tables)

Income Per Share (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Components of Calculation of Income Per Share	The components of the calculation of income per share were as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 Net income $ 796 $ 1,928 $ 4,361 $ 2,317 Basic weighted average shares, in thousands 1,427,413 1,136,354 1,427,430 1,099,704 Effect of dilutive potential shares: Restricted stock units 2,554 3,002 3,088 3,497 Diluted weighted average shares, in thousands 1,429,967 1,139,356 1,430,518 1,103,201

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
Components of Inventories	The major components of inventories were as follows: June 30, 2016 December 31, 2015 Leaf tobacco $ 1,327 $ 1,495 Other raw materials 82 110 Work in process 84 88 Finished products 183 173 Other 24 22 Total 1,700 1,888 LIFO allowance (159 ) (154 ) $ 1,541 $ 1,734

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Provision for Income Taxes	The provision for income taxes was as follows: For the Three Months For the Six Months Ended June 30, Ended June 30, 2016 2015 2016 2015 Provision for income taxes $ 470 $ 2,311 $ 2,624 $ 2,542 Effective tax rate 37.1 % 54.5 % 37.6 % 52.3 %

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Schedule of Securities and Tender Offer	As described in the Offer to Purchase, dated February 4, 2016, and the related Letter of Transmittal, as amended, collectively referred to as the Tender Offer Documents, RAI accepted for purchase 100% of the Tender Notes validly tendered and not validly withdrawn for the series listed in the table below in acceptance priority levels 1 through 3. Due to oversubscription, RAI accepted for purchase Tender Notes validly tendered and not validly withdrawn for the series listed in the table below in acceptance priority level 4 on a pro rata basis in accordance with the proration procedures described in the Tender Offer Documents. RAI did not accept for purchase any of the Tender Notes for the series listed in the table below in acceptance priority levels 5 through 7. Title of Security Acceptance Priority Level Principal Tendered at Expiration Principal Amount of Tender Notes Accepted for Purchase Percentage of Outstanding Tender Notes Purchased 4.750% Senior Notes due 2042 1 $ 827 $ 827 82.71% 3.250% Senior Notes due 2022 2 942 942 85.59% 3.750% Senior Notes due 2023 3 444 444 93.76% 3.250% Senior Notes due 2020 (1) 4 1,039 479 38.34% 4.000% Senior Notes due 2022 5 766 — 0.00% 4.450% Senior Notes due 2025 6 1,773 — 0.00% 4.850% Senior Notes due 2023 7 416 — 0.00% (1) Series prorated
Long-Term Debt, Net of Discounts	RAI and RJR Tobacco Total Long-Term Debt Information, including a schedule of maturities regarding RAI’s and RJR Tobacco’s long-term debt, is provided below: June 30, 2016 December 31, 2015 RAI 3.500% notes due 08/04/2016 $ 415 $ 415 6.750% notes due 06/15/2017 — 700 2.300% notes due 08/21/2017 447 447 7.750% notes due 06/01/2018 — 250 2.300% notes due 06/12/2018 1,250 1,250 8.125% notes due 06/23/2019 * 669 669 6.875% notes due 05/01/2020 641 641 3.250% notes due 06/12/2020 771 1,250 4.000% notes due 06/12/2022 1,000 1,000 3.250% notes due 11/01/2022 158 1,100 3.750% notes due 05/20/2023 30 474 4.850% notes due 09/15/2023 550 550 4.450% notes due 06/12/2025 2,500 2,500 5.700% notes due 08/15/2035 750 750 7.250% notes due 06/15/2037 450 450 8.125% notes due 05/01/2040 237 237 7.000% notes due 08/04/2041 240 240 4.750% notes due 11/01/2042 173 1,000 6.150% notes due 09/15/2043 550 550 5.850% notes due 08/15/2045 2,250 2,250 Total principal 13,081 16,723 Fair value adjustments 311 348 Unamortized discounts (29 ) (37 ) Unamortized debt issuance costs (71 ) (92 ) Total RAI long-term debt at carrying value $ 13,292 $ 16,942 RJR Tobacco 3.500% notes due 08/04/2016 $ 85 $ 85 2.300% notes due 08/21/2017 53 53 8.125% notes due 06/23/2019* 81 81 6.875% notes due 05/01/2020 109 109 3.750% notes due 05/20/2023 19 26 8.125% notes due 05/01/2040 13 13 7.000% notes due 08/04/2041 9 10 Total principal 369 377 Fair value adjustments 32 36 Total RJR Tobacco long-term debt at carrying value $ 401 $ 413 Total long-term debt at carrying value $ 13,693 $ 17,355 Less current maturities of long-term debt at carrying value 501 506 Total long-term debt (less current maturities) at carrying value $ 13,192 $ 16,849 * The interest rate payable on these notes generally is subject to adjustment from time to time (as detailed in the form of these notes) based upon the credit rating assigned to these notes, provided that in no event will (1) the interest rate for these notes be reduced below 8.125% or (2) the total increase in the interest rate on these notes exceed 2.0% above 8.125%.
Maturities of RAI 's and RJR Tobacco's Notes, Excluding Fair Value Adjustments and Unamortized Discounts and Debt Issuance Costs	As of June 30, 2016, the maturities of RAI’s and RJR Tobacco’s notes, excluding fair value adjustments and unamortized discounts and debt issuance costs, were as follows: Year RAI RJR Tobacco Total 2016 $ 415 $ 85 $ 500 2017 447 53 500 2018 1,250 — 1,250 2019 669 81 750 2020 1,412 109 1,521 2022 and thereafter 8,888 41 8,929 Total principal maturities $ 13,081 $ 369 $ 13,450

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2016
Commitments And Contingencies Disclosure [Abstract]
U.S. Tobacco-related Cases Pending Against RJR Tobacco or its Affiliates or Indemnities	The following table lists the categories of the U.S. tobacco-related cases pending against Reynolds Defendants as of June 30, 2016, compared with the number of cases pending against Reynolds Defendants as of March 31, 2016, as reported in RAI’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016, filed with the SEC on April 26, 2016, and a cross-reference to the discussion of each case type. Case Type U.S. Case Numbers as of June 30, 2016 Change in Number of Cases Since March 31, 2016 Increase/(Decrease) Individual Smoking and Health 121 2 West Virginia IPIC (Number of Plaintiffs)* 1 (approx. 564) No change Engle Progeny (Number of Plaintiffs)** 2,967 (approx. 3,839) 4 (12) Broin 2,473 (15) Class Action 24 (9) Filter Cases 76 15 Health-Care Cost Recovery 2 No change State Settlement Agreements—Enforcement and Validity; Adjustments 28 No change Other Litigation and Developments 17 3 * Includes as one case the approximately 564 cases pending as a consolidated action In Re: Tobacco Litigation Individual Personal Injury Cases West Virginia IPIC West Virginia IPIC ** The Engle
Verdicts In Individual Cases That Have Been Tried And Remain Pending	Plaintiff Case Name RJR Tobacco Allocation of Fault Lorillard Tobacco Allocation of Fault Compensatory Damages (as adjusted) (1) Punitive Damages Appeal Status Hiott 40% — $ 730,000 $ — Florida Supreme Court declined to accept jurisdiction of the case; RJR Tobacco paid approximately $4.1 million in satisfaction of the judgment on July 1, 2016 Starr-Blundell 10% — 50,000 — Florida Supreme Court accepted jurisdiction of the case, quashed the First DCA's decision, and remanded for reconsideration in light of Soffer, Clayton 10% — 60,000 — Florida Supreme Court accepted jurisdiction of the case, quashed the First DCA's decision, and remanded for reconsideration in light of Soffer Buonomo 77.5% — 4,060,000 25,000,000 Florida Supreme Court accepted jurisdiction of the case, quashed the decision being reviewed, and reinstated the jury verdict; appeal of the reinstated punitive damages award pending in Fourth DCA; oral argument scheduled for September 20, 2016 Thibault 70% — 1,750,000 1,275,000 First DCA affirmed the judgment, per curiam; Florida Supreme Court declined to accept jurisdiction of the case; RJR Tobacco paid approximately $5 million in satisfaction of the judgment on July 1, 2016 Hubbird 50% — 3,000,000 25,000,000 Third DCA affirmed the judgment, per curiam; deadline to file a petition for writ of certiorari with the U.S. Supreme Court is August 30, 2016 Soffer 40% — 2,000,000 — Remanded to First DCA for further proceedings consistent with Florida Supreme Court's March 17, 2016 opinion; new trial scheduled for May 1, 2017 Totals $ 11,650,000 $ 51,275,000 (1) Compensatory damages are adjusted to reflect the reduction that may be required by the allocation of fault. Punitive damages are not adjusted and reflect the amount of the final judgment(s) signed by the trial court judge(s). The amounts listed above do not include attorneys’ fees or statutory interest of approximately $26.1 million. The following chart lists judgments in all other individual Engle Plaintiff Case Name RJR Tobacco Allocation of Fault Lorillard Tobacco Allocation of Fault Compensatory Damages (as adjusted) (1) Punitive Damages Appeal Status Putney 30% — $ — $ — Reversed and remanded for further proceedings; Florida Supreme Court accepted jurisdiction; quashed the decision being reviewed and reinstated the verdict; defendants' motion for clarification granted on March 15, 2016, with an order stating that the remand was for reconsideration only on the issue of the statute of repose; pending on supplemental briefing in the Fourth DCA Andy Allen 24% — 2,475,000 7,756,000 Reversed and remanded for new trial; new trial completed on November 26, 2014; pending - First DCA Calloway 27% 18% 7,245,000 (2) — Fourth DCA affirmed compensatory award (with instructions to reduce to reflect the smoker's fault if plaintiff does not agree to new trial), set aside punitive damages, and remanded for partial new trial; motions for rehearing are pending James Smith 55% — 600,000 (2) 20,000 Pending – Eleventh Circuit Evers 60% 9% 2,950,000 12,360,000 Second DCA reinstated punitive damage award of $12.36 million the trial court had set aside; the verdict was reinstated on remand; a subsequent appeal is pending in the Second DCA Schoeff 75% — 7,875,000 — Fourth DCA affirmed compensatory award, set aside punitive award, and remanded for further proceedings; Florida Supreme Court accepted jurisdiction on May 26, 2016; briefing is underway Marotta 58% — 3,480,000 — Pending – Florida Supreme Court Searcy 30% — 500,000 (2) 1,670,000 Pending – Eleventh Circuit Earl Graham 20% — 550,000 — Eleventh Circuit held that federal law impliedly preempts claims for strict liability and negligence based on the defect and negligence findings from Engle en banc Skolnick 30% — — — Fourth DCA set aside judgment and ordered a partial new trial Grossman 75% — 15,350,000 (2) 22,500,000 Pending – Fourth DCA Gafney 33% 33% — — Fourth DCA reversed the judgment and remanded for a new trial; plaintiff filed a notice to invoke the discretionary jurisdiction of the Florida Supreme Court; briefing is underway Burkhart 25% 10% 3,500,000 (2) 1,750,000 Pending – Eleventh Circuit Bakst (Odom) 75% — 4,504,000 14,000,000 Pending – Fourth DCA Robinson 71% — 16,900,000 16,900,000 Pending – First DCA Harris 15% 10% 1,100,000 (2) — Post-trial motions are pending (3) Wilcox 70% — 4,900,000 8,500,000 Pending – Third DCA Irimi 15% 15% — — Defendants' motion for new trial granted; pending - Fourth DCA Lourie 3% 7% 137,000 — Pending – Second DCA Kerrivan 31% — 6,046,660 (2) 9,600,000 Post-trial motions are pending (3) Schleider 70% — 14,700,000 (2) — Pending – Third DCA Perrotto 20% 6% 1,063,000 — Pending – Fourth DCA Ellen Gray 50% — 3,000,000 — Post-trial motions are pending (3) Sowers 50% — 2,125,000 — Post-trial motions are pending (3) Caprio 20% 10% 167,700 — Pending – Fourth DCA Zamboni 30% — 102,000 — Final judgment has not been entered Pollari 43% — 4,250,000 1,500,000 Pending – Fourth DCA Gore 23% — 460,000 — Pending – Fourth DCA Ryan 65% — 13,975,000 25,000,000 Pending – Fourth DCA Hardin 13% — 100,880 — Pending – Third DCA McCoy 25% 20% 675,000 6,000,000 Pending – Fourth DCA Block 50% — 463,000 800,000 Pending – Fourth DCA Lewis 25% — 187,500 — Pending – Fifth DCA Cooper 40% — 1,200,000 — Pending – Fourth DCA Duignan 30% — 2,690,000 2,500,000 Pending – Second DCA O'Hara 85% — 14,700,000 20,000,000 Pending – First DCA Marchese 22.5% — 225,000 250,000 Pending – Fourth DCA Barbose 42.5% — 5,000,000 500,000 Pending – Second DCA Monroe 58% — 6,380,000 — Pending – First DCA Ledoux 47% — 5,000,000 12,500,000 Pending – Third DCA Ewing 2% — 4,800 — Post-trial motions denied; final judgment has not been entered Ahrens 44% — 5,800,000 2,500,000 Pending – Second DCA Turner 80% — 2,400,000 10,000,000 Post-trial motions denied; deadline to file notice of appeal is August 4, 2016 Enochs 66% — 13,860,000 6,250,000 Pending – Fourth DCA Dion 75% — 12,000,000 30,000 Post-trial motions are pending (3) Nally 75% — 6,000,000 (2) 12,000,000 Post-trial motions are pending (3) McCabe 30% — 1,500,000 6,500,000 Post-trial motions are pending (3) Sermons 5% — 3,250 17,075 Post-trial motions are pending (3) Totals $ 196,144,790 $ 201,403,075 (1) Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material. (2) The court did not apply comparative fault in the final judgment. (3) Should the pending post-trial motions be denied, RJR Tobacco will likely file a notice of appeal with the appropriate appellate court.
Commitments and Contingencies Related to Settlements	Set forth below is the unadjusted tobacco industry settlement payment schedule (in millions) for 2014 and thereafter: 2014 2015 2016 and thereafter First Four States’ Settlements: (1) Mississippi Annual Payment $ 136 $ 136 $ 136 Florida Annual Payment 440 440 440 Texas Annual Payment 580 580 580 Minnesota Annual Payment 204 204 204 Master Settlement Agreement: Annual Payments (1) 8,004 8,004 8,004 Total $ 9,364 $ 9,364 $ 9,364 RAI’s operating subsidiaries expenses and payments under the State Settlement Agreements for 2014 and 2015 and the projected expenses and payments for 2016 and thereafter (in millions) are set forth below. (1)(2) 2014 2015 2016 2017 2018 2019 and thereafter Settlement expenses $ 1,917 $ 2,403 — — — — Settlement cash payments $ 1,985 $ 2,166 — — — — Projected settlement expenses $>2,800 $>3,100 $>3,100 $>3,300 Projected settlement cash payments $>3,000 $>2,800 $>3,100 $>3,100 (1) (2)
Disputed Portion of MSA Payment Obligation	The approximate maximum principal amounts of RJR Tobacco’s and Lorillard Tobacco’s shares of the disputed NPM Adjustments for the years 2004 through 2014 (in millions), as currently calculated by the Independent Auditor, and the remaining amounts after the settlements of certain NPM Adjustments claims (see below), are as follows (1) RJR Tobacco Lorillard Tobacco Volume Year Disputed Remaining after settlements Disputed Remaining after settlements 2004 $ 562 $ 210 $ 111 $ 41 2005 445 166 76 29 2006 419 156 73 27 2007 435 166 83 32 2008 468 179 104 40 2009 472 180 107 41 2010 470 179 119 46 2011 422 161 88 34 2012 428 163 96 37 2013 455 173 91 35 2014 430 164 92 36

Shareholders' Equity (Tables)

Shareholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2016
Equity [Abstract]
Shareholders' Equity	Common Stock Paid-In Retained Earnings Accumulated Total Shareholders’ Equity Balance as of December 31, 2015 $ — $ 18,402 $ 188 $ (338 ) $ 18,252 Net income — — 4,361 — 4,361 Retirement benefits, net of $21 million tax expense — — — 33 33 Unrealized gain on long-term investments, net of $2 million tax expense — — — 5 5 Realized gain on long-term investments, net of $1 million tax expense — — — (2 ) (2 ) Realized loss on hedging instruments, net of $6 million tax expense — — — 11 11 Cumulative translation adjustment and other, net of $9 million tax expense — — — 17 17 Dividends - $0.84 per share — — (1,204 ) — (1,204 ) Common stock repurchased — (149 ) — — (149 ) Equity incentive award plan and stock-based compensation — 50 — — 50 Excess tax benefit on stock-based compensation plans — 26 — — 26 Balance as of June 30, 2016 $ — $ 18,329 $ 3,345 $ (274 ) $ 21,400 Common Stock Paid-In Capital (Accumulated Deficit) Retained Earnings Accumulated Total Shareholders’ Equity Balance as of December 31, 2014 $ — $ 6,200 $ (1,314 ) $ (364 ) $ 4,522 Net income — — 2,317 — 2,317 Retirement benefits, net of $16 million tax benefit — — — (26 ) (26 ) Amortization of realized loss on hedging instruments, net of tax — — — 1 1 Cumulative translation adjustment and other, net of $10 million tax benefit — — — (17 ) (17 ) Dividends - $0.67 per share — — (718 ) — (718 ) Issuance of additional shares as Merger consideration — 7,555 — — 7,555 Issuance of additional shares for BAT Share Purchase — 4,673 — — 4,673 Common stock repurchased — (40 ) — — (40 ) Equity incentive award plan and stock-based compensation — 44 — — 44 Excess tax benefit on stock-based compensation plans — 15 — — 15 Balance as of June 30, 2015 $ — $ 18,447 $ 285 $ (406 ) $ 18,326
Components of Accumulated Other Comprehensive Loss Net of Tax	The components of accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2016 were as follows: Retirement Benefits Unrealized Loss on Long-Term Investments Realized Loss on Hedging Instruments Cumulative Translation Adjustment and Other Total Balance as of December 31, 2015 $ (244 ) $ (14 ) $ (11 ) $ (69 ) $ (338 ) Other comprehensive income (losses) before reclassifications 45 5 — (10 ) 40 Amounts reclassified from accumulated other comprehensive loss (12 ) (2 ) 11 27 24 Net current-period other comprehensive income (loss) 33 3 11 17 64 Balance as of June 30, 2016 $ (211 ) $ (11 ) $ — $ (52 ) $ (274 ) The components of accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2015, were as follows: Retirement Benefits Unrealized Loss on Long-Term Investments Realized Loss on Hedging Instruments Cumulative Translation Adjustment and Other Total Balance as of December 31, 2014 $ (294 ) $ (14 ) $ (12 ) $ (44 ) $ (364 ) Other comprehensive losses before reclassifications (13 ) — — (17 ) (30 ) Amounts reclassified from accumulated other comprehensive loss (13 ) — 1 — (12 ) Net current-period other comprehensive income (loss) (26 ) — 1 (17 ) (42 ) Balance as of June 30, 2015 $ (320 ) $ (14 ) $ (11 ) $ (61 ) $ (406 )
Reclassification Out of Accumulated Other Comprehensive Income Net of Tax	Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidated statement of income (unaudited) for the three months ended June 30, were as follows: Components Amounts Reclassified Affected Line Item 2016 2015 Defined benefit pension and postretirement plans: Amortization of prior service costs $ (5 ) $ (6 ) Cost of products sold Amortization of prior service costs (5 ) (4 ) Selling, general and administrative expenses (10 ) (10 ) Operating income Deferred taxes 4 3 Provision for income taxes Net of tax (6 ) (7 ) Net income Hedging instruments: Amortization of realized loss — 1 Interest and debt expense Total reclassifications $ (6 ) $ (6 ) Net income Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidated statement of income (unaudited) for the six months ended June 30, were as follows: Components Amounts Reclassified Affected Line Item 2016 2015 Defined benefit pension and postretirement plans: Amortization of prior service costs $ (10 ) $ (11 ) Cost of products sold Amortization of prior service costs (10 ) (9 ) Selling, general and administrative expenses (20 ) (20 ) Operating income Deferred taxes 8 7 Provision for income taxes Net of tax (12 ) (13 ) Net income Long-term investments: Realized gain on long-term investments (3 ) — Other (income) expense, net Deferred taxes 1 — Provision for income taxes Net of tax (2 ) — Net income Hedging instruments: Forward starting interest rate contracts 17 — Other (income) expense, net Amortization of realized loss — 1 Interest and debt expense 17 1 Income before income taxes Deferred taxes (6 ) — Provision for income taxes Net of tax 11 1 Net income Cumulative translation adjustment: Derecognition of cumulative translation adjustment 27 — Gain on divestitures Total reclassifications $ 24 $ (12 ) Net income

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
Segment Information Related to Sales, Income, and Assets	Segment Data: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 Net sales: RJR Tobacco $ 2,646 $ 1,876 $ 5,057 $ 3,484 Santa Fe 247 218 465 389 American Snuff 232 218 448 419 All Other 70 91 142 168 Net sales $ 3,195 $ 2,403 $ 6,112 $ 4,460 Operating income (loss): RJR Tobacco $ 1,216 $ 727 $ 2,323 $ 1,315 Santa Fe 133 125 256 217 American Snuff 138 130 271 248 All Other (43 ) (35 ) (77 ) (96 ) Gain on divestitures — 3,499 4,861 3,499 Corporate expense (29 ) (82 ) (77 ) (126 ) Operating income $ 1,415 $ 4,364 $ 7,557 $ 5,057 Reconciliation to income before income taxes: Operating income $ 1,415 $ 4,364 $ 7,557 $ 5,057 Interest and debt expense 152 105 326 196 Interest income (2 ) — (5 ) (1 ) Other (income) expense, net (1 ) 20 251 3 Income before income taxes $ 1,266 $ 4,239 $ 6,985 $ 4,859

Related Party Transactions (Tab

Related Party Transactions (Tables)	6 Months Ended
	Jun. 30, 2016
Related Party Transactions [Abstract]
Summary of Balances and Transactions	A summary of balances and transactions with such BAT affiliates is as follows: Balances: June 30, 2016 December 31, 2015 Accounts receivable, related party $ 33 $ 38 Due to related party 2 9 Deferred revenue, related party 16 33 Other current liabilities — 2 Significant transactions: For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 Net sales $ 54 $ 54 $ 109 $ 136 Purchases 6 12 8 14 BAT Share Purchase — 4,673 — 4,673

RAI Guaranteed, Unsecured Not38

RAI Guaranteed, Unsecured Notes - Condensed Consolidating Financial Statements (Tables)	6 Months Ended
	Jun. 30, 2016
Guarantees [Abstract]
Condensed Consolidating Statements of Income	Condensed Consolidating Statements of Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net sales $ — $ 3,122 $ 48 $ (29 ) $ 3,141 Net sales, related party — 54 — — 54 Net sales — 3,176 48 (29 ) 3,195 Cost of products sold — 1,254 52 (31 ) 1,275 Selling, general and administrative expenses 6 457 34 2 499 Amortization expense — 6 — — 6 Operating income (loss) (6 ) 1,459 (38 ) — 1,415 Interest and debt expense 149 22 2 (21 ) 152 Interest income (21 ) (2 ) — 21 (2 ) Other income — (9 ) (3 ) 11 (1 ) Income (loss) before income taxes (134 ) 1,448 (37 ) (11 ) 1,266 Provision for (benefit from) income taxes (48 ) 532 (14 ) — 470 Equity income from subsidiaries 882 2 — (884 ) — Net income (loss) $ 796 $ 918 $ (23 ) $ (895 ) $ 796 For the Three Months Ended June 30, 2015 Net sales $ — $ 2,320 $ 82 $ (53 ) $ 2,349 Net sales, related party — 54 — — 54 Net sales — 2,374 82 (53 ) 2,403 Cost of products sold — 1,082 53 (51 ) 1,084 Selling, general and administrative expenses 43 337 71 — 451 Gain on divestitures — (3,499 ) — — (3,499 ) Amortization expense — 3 — — 3 Operating income (loss) (43 ) 4,451 (42 ) (2 ) 4,364 Interest and debt expense 98 33 2 (28 ) 105 Interest income (28 ) — — 28 — Other (income) expense, net 14 (11 ) 7 10 20 Income (loss) before income taxes (127 ) 4,429 (51 ) (12 ) 4,239 Provision for (benefit from) income taxes (77 ) 2,424 (36 ) — 2,311 Equity income from subsidiaries 1,978 18 — (1,996 ) — Net income (loss) $ 1,928 $ 2,023 $ (15 ) $ (2,008 ) $ 1,928 Condensed Consolidating Statements of Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Net sales $ — $ 5,961 $ 97 $ (55 ) $ 6,003 Net sales, related party — 109 — — 109 Net sales — 6,070 97 (55 ) 6,112 Cost of products sold — 2,403 95 (58 ) 2,440 Selling, general and administrative expenses 22 858 82 2 964 Gain on divestitures — (4,843 ) (16 ) (2 ) (4,861 ) Amortization expense — 12 — — 12 Operating income (loss) (22 ) 7,640 (64 ) 3 7,557 Interest and debt expense 323 45 4 (46 ) 326 Interest income (47 ) (4 ) — 46 (5 ) Other (income) expense, net 240 (15 ) 4 22 251 Income (loss) before income taxes (538 ) 7,614 (72 ) (19 ) 6,985 Provision for (benefit from) income taxes (190 ) 2,840 (26 ) — 2,624 Equity income from subsidiaries 4,709 2 — (4,711 ) — Net income (loss) $ 4,361 $ 4,776 $ (46 ) $ (4,730 ) $ 4,361 For the Six Months Ended June 30, 2015 Net sales $ — $ 4,319 $ 150 $ (145 ) $ 4,324 Net sales, related party — 136 — — 136 Net sales — 4,455 150 (145 ) 4,460 Cost of products sold — 1,951 123 (140 ) 1,934 Selling, general and administrative expenses 62 762 138 — 962 Gain on divestitures — (3,499 ) — — (3,499 ) Amortization expense — 6 — — 6 Operating income (loss) (62 ) 5,235 (111 ) (5 ) 5,057 Interest and debt expense 189 50 4 (47 ) 196 Interest income (47 ) (1 ) — 47 (1 ) Other (income) expense, net 15 (21 ) (12 ) 21 3 Income (loss) before income taxes (219 ) 5,207 (103 ) (26 ) 4,859 Provision for (benefit from) income taxes (104 ) 2,705 (59 ) — 2,542 Equity income from subsidiaries 2,432 38 — (2,470 ) — Net income (loss) $ 2,317 $ 2,540 $ (44 ) $ (2,496 ) $ 2,317
Condensed Consolidating Statements of Comprehensive Income	Condensed Consolidating Statements of Comprehensive Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net income (loss) $ 796 $ 918 $ (23 ) $ (895 ) $ 796 Other comprehensive income (loss), net of tax: Retirement benefits 39 40 (1 ) (39 ) 39 Unrealized gain on long-term investments 4 4 — (4 ) 4 Cumulative translation adjustment and other (5 ) (5 ) (7 ) 12 (5 ) Comprehensive income (loss) $ 834 $ 957 $ (31 ) $ (926 ) $ 834 For the Three Months Ended June 30, 2015 Net income (loss) $ 1,928 $ 2,023 $ (15 ) $ (2,008 ) $ 1,928 Other comprehensive income (loss), net of tax: Retirement benefits (20 ) (17 ) (1 ) 18 (20 ) Amortization of realized loss on hedging instruments 1 — — — 1 Cumulative translation adjustment and other 10 10 13 (23 ) 10 Comprehensive income (loss) $ 1,919 $ 2,016 $ (3 ) $ (2,013 ) $ 1,919 For the Six Months Ended June 30, 2016 Net income (loss) $ 4,361 $ 4,776 $ (46 ) $ (4,730 ) $ 4,361 Other comprehensive income (loss), net of tax: Retirement benefits 33 34 (1 ) (33 ) 33 Unrealized gain on long-term investments 5 5 — (5 ) 5 Realized gain on long-term investments (2 ) (2 ) — 2 (2 ) Realized loss on hedging instruments 11 — — — 11 Cumulative translation adjustment and other 17 17 26 (43 ) 17 Comprehensive income (loss) $ 4,425 $ 4,830 $ (21 ) $ (4,809 ) $ 4,425 For the Six Months Ended June 30, 2015 Net income (loss) $ 2,317 $ 2,540 $ (44 ) $ (2,496 ) $ 2,317 Other comprehensive income (loss), net of tax: Retirement benefits (26 ) (23 ) (1 ) 24 (26 ) Amortization of realized loss on hedging instruments 1 — — — 1 Cumulative translation adjustment and other (17 ) (17 ) (27 ) 44 (17 ) Comprehensive income (loss) $ 2,275 $ 2,500 $ (72 ) $ (2,428 ) $ 2,275
Reclassification Out of Accumulated Other Comprehensive Income Net of Tax	Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (5 ) $ — $ — $ (5 ) Cost of products sold Amortization of prior service costs — (5 ) — — (5 ) Selling, general and administrative expenses — (10 ) — — (10 ) Operating income (loss) Deferred taxes — 4 — — 4 Provision for income taxes Net of tax — (6 ) — — (6 ) Net income (loss) Equity income from subsidiaries (6 ) — — 6 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (6 ) $ — $ 6 $ (6 ) Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (6 ) $ — $ — $ (6 ) Cost of products sold Amortization of prior service costs — (4 ) — — (4 ) Selling, general and administrative expenses — (10 ) — — (10 ) Operating income (loss) Deferred taxes — 3 — — 3 Provision for income taxes Net of tax — (7 ) — — (7 ) Net income (loss) Hedging instruments: Amortization of realized loss 1 — — — 1 Interest and debt expense Equity income from subsidiaries (7 ) — — 7 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (7 ) $ — $ 7 $ (6 ) Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (10 ) $ — $ — $ (10 ) Cost of products sold Amortization of prior service costs — (10 ) — — (10 ) Selling, general and administrative expenses — (20 ) — — (20 ) Operating income (loss) Deferred taxes — 8 — — 8 Provision for income taxes Net of tax — (12 ) — — (12 ) Net income (loss) Long-term investments: Realized gain on long-term investments — (3 ) — — (3 ) Other (income) expense, net Deferred taxes — 1 — — 1 Provision for income taxes Net of tax — (2 ) — — (2 ) Net income (loss) Hedging instruments: Forward starting interest rate contracts 17 — — — 17 Other (income) expense, net Deferred taxes (6 ) — — — (6 ) Provision for income taxes Net of tax 11 — — — 11 Net income (loss) Cumulative translation adjustment: Derecognition of cumulative translation adjustment — — 27 — 27 Gain on divestitures Equity income from subsidiaries 13 27 — (40 ) — Equity income from subsidiaries Total reclassifications $ 24 $ 13 $ 27 $ (40 ) $ 24 Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (11 ) $ — $ — $ (11 ) Cost of products sold Amortization of prior service costs — (9 ) — — (9 ) Selling, general and administrative expenses — (20 ) — — (20 ) Operating income (loss) Deferred taxes — 7 — — 7 Provision for income taxes Net of tax — (13 ) — — (13 ) Net income (loss) Hedging instruments: Amortization of realized loss 1 — — — 1 Interest and debt expense Equity income from subsidiaries (13 ) — — 13 — Equity income from subsidiaries Total reclassifications $ (12 ) $ (13 ) $ — $ 13 $ (12 ) Net income (loss)
Condensed Consolidating Statements of Cash Flows	Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Cash flows from (used in) operating activities $ (1,012 ) $ 603 $ (23 ) $ (293 ) $ (725 ) Cash flows from (used in) investing activities: Capital expenditures — (89 ) (5 ) — (94 ) Proceeds from settlement of short-term investments — 159 — — 159 Proceeds from divestitures 5,015 — — — 5,015 Proceeds from settlement of long-term investments — 23 — — 23 Return of intercompany investments 412 26 — (438 ) — Other, net 260 11 — (271 ) — Net cash flows from (used in) investing activities 5,687 130 (5 ) (709 ) 5,103 Cash flows from (used in) financing activities: Dividends paid on common stock (1,113 ) (247 ) (25 ) 272 (1,113 ) Repurchase of common stock (149 ) — — — (149 ) Early extinguishment of debt (3,642 ) (8 ) — — (3,650 ) Redemption premium for early extinguishment of debt (118 ) (1 ) — — (119 ) Make-whole premium for early extinguishment of debt (88 ) — — — (88 ) Proceeds from termination of interest rate swaps — 66 — — 66 Debt issuance costs and financing fees (7 ) — — — (7 ) Excess tax benefit on stock-based compensation plans 26 — — — 26 Dividends paid on preferred stock (21 ) — — 21 — Distribution of equity — (412 ) (26 ) 438 — Other, net (11 ) (260 ) — 271 — Net cash flows used in financing activities (5,123 ) (862 ) (51 ) 1,002 (5,034 ) Effect of exchange rate changes on cash and cash equivalents — — 7 — 7 Net change in cash and cash equivalents (448 ) (129 ) (72 ) — (649 ) Cash and cash equivalents at beginning of period 575 1,544 448 — 2,567 Cash and cash equivalents at end of period $ 127 $ 1,415 $ 376 $ — $ 1,918 Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2015 Cash flows from (used in) operating activities $ 125 $ 826 $ (3 ) $ (500 ) $ 448 Cash flows from (used in) investing activities: Capital expenditures — (60 ) (3 ) (1 ) (64 ) Return of intercompany investments 185 — — (185 ) — Acquisition, net of cash acquired (18,278 ) 1,002 57 — (17,219 ) Proceeds from divestitures 7,056 — — — 7,056 Proceeds from settlement of long-term investments — 1 — — 1 Other, net (710 ) 11 (1 ) 700 — Net cash flows (used in) from investing activities (11,747 ) 954 53 514 (10,226 ) Cash flows from (used in) financing activities: Dividends paid on common stock (712 ) (479 ) — 479 (712 ) Repurchase of common stock (40 ) — — — (40 ) Proceeds from BAT Share Purchase 4,673 — — — 4,673 Debt issuance costs and financing fees (64 ) — — — (64 ) Issuance of long-term debt 8,975 — — — 8,975 Borrowings under revolving credit facility 1,400 — — — 1,400 Repayments of borrowings under revolving credit facility (1,400 ) — — — (1,400 ) Excess tax benefit on stock-based compensation plans 15 — — — 15 Dividends paid on preferred stock (21 ) — — 21 — Distribution of equity — (185 ) — 185 — Other, net (11 ) 680 30 (699 ) — Net cash flows from financing activities 12,815 16 30 (14 ) 12,847 Effect of exchange rate changes on cash and cash equivalents — — (22 ) — (22 ) Net change in cash and cash equivalents 1,193 1,796 58 — 3,047 Cash and cash equivalents at beginning of period 102 469 395 — 966 Cash and cash equivalents at end of period $ 1,295 $ 2,265 $ 453 $ — $ 4,013
Condensed Consolidating Balance Sheets	Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated June 30, 2016 Assets Cash and cash equivalents $ 127 $ 1,415 $ 376 $ — $ 1,918 Short-term investments — 26 — — 26 Accounts receivable — 81 8 — 89 Accounts receivable, related party — 33 — — 33 Other receivables 65 3,438 16 (3,506 ) 13 Inventories — 1,520 22 (1 ) 1,541 Deferred income taxes, net 9 1,002 7 — 1,018 Other current assets 8 259 75 (75 ) 267 Total current assets 209 7,774 504 (3,582 ) 4,905 Property, plant and equipment, net 3 1,259 33 — 1,295 Trademarks and other intangible assets, net — 29,442 15 (2 ) 29,455 Goodwill — 15,977 16 — 15,993 Long-term intercompany notes receivable 1,322 159 — (1,481 ) — Investment in subsidiaries 37,981 393 — (38,374 ) — Other assets and deferred charges 162 100 34 (172 ) 124 Total assets $ 39,677 $ 55,104 $ 602 $ (43,611 ) $ 51,772 Liabilities and shareholders’ equity Accounts payable $ 1 $ 184 $ 6 $ — $ 191 Tobacco settlement accruals — 1,696 — — 1,696 Due to related party — 2 — — 2 Deferred revenue, related party — 16 — — 16 Current maturities of long-term debt 416 85 — — 501 Dividends payable on common stock 599 — — — 599 Income taxes payable 702 4 — (78 ) 628 Other current liabilities 3,428 1,015 208 (3,506 ) 1,145 Total current liabilities 5,146 3,002 214 (3,584 ) 4,778 Long-term intercompany notes payable 159 1,000 322 (1,481 ) — Long-term debt (less current maturities) 12,876 316 — — 13,192 Deferred income taxes, net — 10,535 — (169 ) 10,366 Long-term retirement benefits (less current portion) 55 1,716 42 — 1,813 Other noncurrent liabilities 41 182 — — 223 Shareholders’ equity 21,400 38,353 24 (38,377 ) 21,400 Total liabilities and shareholders’ equity $ 39,677 $ 55,104 $ 602 $ (43,611 ) $ 51,772 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated December 31, 2015 Assets Cash and cash equivalents $ 575 $ 1,544 $ 448 $ — $ 2,567 Short-term investments — 149 — — 149 Accounts receivable — 62 6 — 68 Accounts receivable, related party — 38 — — 38 Other receivables 70 3,459 91 (3,585 ) 35 Inventories — 1,694 44 (4 ) 1,734 Deferred income taxes, net 14 1,011 7 — 1,032 Other current assets 116 323 129 (4 ) 564 Total current assets 775 8,280 725 (3,593 ) 6,187 Property, plant and equipment, net 3 1,223 29 — 1,255 Trademarks and other intangible assets, net — 29,467 — — 29,467 Goodwill — 15,976 17 — 15,993 Long-term intercompany notes receivable 1,583 169 — (1,752 ) — Investment in subsidiaries 37,151 662 — (37,813 ) — Other assets and deferred charges 175 212 31 (188 ) 230 Total assets $ 39,687 $ 55,989 $ 802 $ (43,346 ) $ 53,132 Liabilities and shareholders’ equity Accounts payable $ 2 $ 173 $ 4 $ — $ 179 Tobacco settlement accruals — 2,816 — — 2,816 Due to related party — 9 — — 9 Deferred revenue, related party — 33 — — 33 Current maturities of long-term debt 420 86 — — 506 Dividends payable on common stock 514 — — — 514 Other current liabilities 3,707 1,039 79 (3,591 ) 1,234 Total current liabilities 4,643 4,156 83 (3,591 ) 5,291 Long-term intercompany notes payable 169 1,260 323 (1,752 ) — Long-term debt (less current maturities) 16,522 327 — — 16,849 Deferred income taxes, net — 10,421 — (185 ) 10,236 Long-term retirement benefits (less current portion) 57 2,153 55 — 2,265 Other noncurrent liabilities 44 195 — — 239 Shareholders’ equity 18,252 37,477 341 (37,818 ) 18,252 Total liabilities and shareholders’ equity $ 39,687 $ 55,989 $ 802 $ (43,346 ) $ 53,132

RJR Tobacco Guaranteed, Unsec39

RJR Tobacco Guaranteed, Unsecured Notes - Condensed Consolidating Financial Statements (Tables)	6 Months Ended
	Jun. 30, 2016
Condensed Consolidating Statements of Income	Condensed Consolidating Statements of Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net sales $ — $ 3,122 $ 48 $ (29 ) $ 3,141 Net sales, related party — 54 — — 54 Net sales — 3,176 48 (29 ) 3,195 Cost of products sold — 1,254 52 (31 ) 1,275 Selling, general and administrative expenses 6 457 34 2 499 Amortization expense — 6 — — 6 Operating income (loss) (6 ) 1,459 (38 ) — 1,415 Interest and debt expense 149 22 2 (21 ) 152 Interest income (21 ) (2 ) — 21 (2 ) Other income — (9 ) (3 ) 11 (1 ) Income (loss) before income taxes (134 ) 1,448 (37 ) (11 ) 1,266 Provision for (benefit from) income taxes (48 ) 532 (14 ) — 470 Equity income from subsidiaries 882 2 — (884 ) — Net income (loss) $ 796 $ 918 $ (23 ) $ (895 ) $ 796 For the Three Months Ended June 30, 2015 Net sales $ — $ 2,320 $ 82 $ (53 ) $ 2,349 Net sales, related party — 54 — — 54 Net sales — 2,374 82 (53 ) 2,403 Cost of products sold — 1,082 53 (51 ) 1,084 Selling, general and administrative expenses 43 337 71 — 451 Gain on divestitures — (3,499 ) — — (3,499 ) Amortization expense — 3 — — 3 Operating income (loss) (43 ) 4,451 (42 ) (2 ) 4,364 Interest and debt expense 98 33 2 (28 ) 105 Interest income (28 ) — — 28 — Other (income) expense, net 14 (11 ) 7 10 20 Income (loss) before income taxes (127 ) 4,429 (51 ) (12 ) 4,239 Provision for (benefit from) income taxes (77 ) 2,424 (36 ) — 2,311 Equity income from subsidiaries 1,978 18 — (1,996 ) — Net income (loss) $ 1,928 $ 2,023 $ (15 ) $ (2,008 ) $ 1,928 Condensed Consolidating Statements of Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Net sales $ — $ 5,961 $ 97 $ (55 ) $ 6,003 Net sales, related party — 109 — — 109 Net sales — 6,070 97 (55 ) 6,112 Cost of products sold — 2,403 95 (58 ) 2,440 Selling, general and administrative expenses 22 858 82 2 964 Gain on divestitures — (4,843 ) (16 ) (2 ) (4,861 ) Amortization expense — 12 — — 12 Operating income (loss) (22 ) 7,640 (64 ) 3 7,557 Interest and debt expense 323 45 4 (46 ) 326 Interest income (47 ) (4 ) — 46 (5 ) Other (income) expense, net 240 (15 ) 4 22 251 Income (loss) before income taxes (538 ) 7,614 (72 ) (19 ) 6,985 Provision for (benefit from) income taxes (190 ) 2,840 (26 ) — 2,624 Equity income from subsidiaries 4,709 2 — (4,711 ) — Net income (loss) $ 4,361 $ 4,776 $ (46 ) $ (4,730 ) $ 4,361 For the Six Months Ended June 30, 2015 Net sales $ — $ 4,319 $ 150 $ (145 ) $ 4,324 Net sales, related party — 136 — — 136 Net sales — 4,455 150 (145 ) 4,460 Cost of products sold — 1,951 123 (140 ) 1,934 Selling, general and administrative expenses 62 762 138 — 962 Gain on divestitures — (3,499 ) — — (3,499 ) Amortization expense — 6 — — 6 Operating income (loss) (62 ) 5,235 (111 ) (5 ) 5,057 Interest and debt expense 189 50 4 (47 ) 196 Interest income (47 ) (1 ) — 47 (1 ) Other (income) expense, net 15 (21 ) (12 ) 21 3 Income (loss) before income taxes (219 ) 5,207 (103 ) (26 ) 4,859 Provision for (benefit from) income taxes (104 ) 2,705 (59 ) — 2,542 Equity income from subsidiaries 2,432 38 — (2,470 ) — Net income (loss) $ 2,317 $ 2,540 $ (44 ) $ (2,496 ) $ 2,317
Condensed Consolidating Statements of Comprehensive Income	Condensed Consolidating Statements of Comprehensive Income (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net income (loss) $ 796 $ 918 $ (23 ) $ (895 ) $ 796 Other comprehensive income (loss), net of tax: Retirement benefits 39 40 (1 ) (39 ) 39 Unrealized gain on long-term investments 4 4 — (4 ) 4 Cumulative translation adjustment and other (5 ) (5 ) (7 ) 12 (5 ) Comprehensive income (loss) $ 834 $ 957 $ (31 ) $ (926 ) $ 834 For the Three Months Ended June 30, 2015 Net income (loss) $ 1,928 $ 2,023 $ (15 ) $ (2,008 ) $ 1,928 Other comprehensive income (loss), net of tax: Retirement benefits (20 ) (17 ) (1 ) 18 (20 ) Amortization of realized loss on hedging instruments 1 — — — 1 Cumulative translation adjustment and other 10 10 13 (23 ) 10 Comprehensive income (loss) $ 1,919 $ 2,016 $ (3 ) $ (2,013 ) $ 1,919 For the Six Months Ended June 30, 2016 Net income (loss) $ 4,361 $ 4,776 $ (46 ) $ (4,730 ) $ 4,361 Other comprehensive income (loss), net of tax: Retirement benefits 33 34 (1 ) (33 ) 33 Unrealized gain on long-term investments 5 5 — (5 ) 5 Realized gain on long-term investments (2 ) (2 ) — 2 (2 ) Realized loss on hedging instruments 11 — — — 11 Cumulative translation adjustment and other 17 17 26 (43 ) 17 Comprehensive income (loss) $ 4,425 $ 4,830 $ (21 ) $ (4,809 ) $ 4,425 For the Six Months Ended June 30, 2015 Net income (loss) $ 2,317 $ 2,540 $ (44 ) $ (2,496 ) $ 2,317 Other comprehensive income (loss), net of tax: Retirement benefits (26 ) (23 ) (1 ) 24 (26 ) Amortization of realized loss on hedging instruments 1 — — — 1 Cumulative translation adjustment and other (17 ) (17 ) (27 ) 44 (17 ) Comprehensive income (loss) $ 2,275 $ 2,500 $ (72 ) $ (2,428 ) $ 2,275
Reclassification Out of Accumulated Other Comprehensive Income Net of Tax	Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (5 ) $ — $ — $ (5 ) Cost of products sold Amortization of prior service costs — (5 ) — — (5 ) Selling, general and administrative expenses — (10 ) — — (10 ) Operating income (loss) Deferred taxes — 4 — — 4 Provision for income taxes Net of tax — (6 ) — — (6 ) Net income (loss) Equity income from subsidiaries (6 ) — — 6 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (6 ) $ — $ 6 $ (6 ) Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (6 ) $ — $ — $ (6 ) Cost of products sold Amortization of prior service costs — (4 ) — — (4 ) Selling, general and administrative expenses — (10 ) — — (10 ) Operating income (loss) Deferred taxes — 3 — — 3 Provision for income taxes Net of tax — (7 ) — — (7 ) Net income (loss) Hedging instruments: Amortization of realized loss 1 — — — 1 Interest and debt expense Equity income from subsidiaries (7 ) — — 7 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (7 ) $ — $ 7 $ (6 ) Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (10 ) $ — $ — $ (10 ) Cost of products sold Amortization of prior service costs — (10 ) — — (10 ) Selling, general and administrative expenses — (20 ) — — (20 ) Operating income (loss) Deferred taxes — 8 — — 8 Provision for income taxes Net of tax — (12 ) — — (12 ) Net income (loss) Long-term investments: Realized gain on long-term investments — (3 ) — — (3 ) Other (income) expense, net Deferred taxes — 1 — — 1 Provision for income taxes Net of tax — (2 ) — — (2 ) Net income (loss) Hedging instruments: Forward starting interest rate contracts 17 — — — 17 Other (income) expense, net Deferred taxes (6 ) — — — (6 ) Provision for income taxes Net of tax 11 — — — 11 Net income (loss) Cumulative translation adjustment: Derecognition of cumulative translation adjustment — — 27 — 27 Gain on divestitures Equity income from subsidiaries 13 27 — (40 ) — Equity income from subsidiaries Total reclassifications $ 24 $ 13 $ 27 $ (40 ) $ 24 Net income (loss) Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Issuer Guarantors Non-Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (11 ) $ — $ — $ (11 ) Cost of products sold Amortization of prior service costs — (9 ) — — (9 ) Selling, general and administrative expenses — (20 ) — — (20 ) Operating income (loss) Deferred taxes — 7 — — 7 Provision for income taxes Net of tax — (13 ) — — (13 ) Net income (loss) Hedging instruments: Amortization of realized loss 1 — — — 1 Interest and debt expense Equity income from subsidiaries (13 ) — — 13 — Equity income from subsidiaries Total reclassifications $ (12 ) $ (13 ) $ — $ 13 $ (12 ) Net income (loss)
Condensed Consolidating Statements of Cash Flows	Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Cash flows from (used in) operating activities $ (1,012 ) $ 603 $ (23 ) $ (293 ) $ (725 ) Cash flows from (used in) investing activities: Capital expenditures — (89 ) (5 ) — (94 ) Proceeds from settlement of short-term investments — 159 — — 159 Proceeds from divestitures 5,015 — — — 5,015 Proceeds from settlement of long-term investments — 23 — — 23 Return of intercompany investments 412 26 — (438 ) — Other, net 260 11 — (271 ) — Net cash flows from (used in) investing activities 5,687 130 (5 ) (709 ) 5,103 Cash flows from (used in) financing activities: Dividends paid on common stock (1,113 ) (247 ) (25 ) 272 (1,113 ) Repurchase of common stock (149 ) — — — (149 ) Early extinguishment of debt (3,642 ) (8 ) — — (3,650 ) Redemption premium for early extinguishment of debt (118 ) (1 ) — — (119 ) Make-whole premium for early extinguishment of debt (88 ) — — — (88 ) Proceeds from termination of interest rate swaps — 66 — — 66 Debt issuance costs and financing fees (7 ) — — — (7 ) Excess tax benefit on stock-based compensation plans 26 — — — 26 Dividends paid on preferred stock (21 ) — — 21 — Distribution of equity — (412 ) (26 ) 438 — Other, net (11 ) (260 ) — 271 — Net cash flows used in financing activities (5,123 ) (862 ) (51 ) 1,002 (5,034 ) Effect of exchange rate changes on cash and cash equivalents — — 7 — 7 Net change in cash and cash equivalents (448 ) (129 ) (72 ) — (649 ) Cash and cash equivalents at beginning of period 575 1,544 448 — 2,567 Cash and cash equivalents at end of period $ 127 $ 1,415 $ 376 $ — $ 1,918 Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2015 Cash flows from (used in) operating activities $ 125 $ 826 $ (3 ) $ (500 ) $ 448 Cash flows from (used in) investing activities: Capital expenditures — (60 ) (3 ) (1 ) (64 ) Return of intercompany investments 185 — — (185 ) — Acquisition, net of cash acquired (18,278 ) 1,002 57 — (17,219 ) Proceeds from divestitures 7,056 — — — 7,056 Proceeds from settlement of long-term investments — 1 — — 1 Other, net (710 ) 11 (1 ) 700 — Net cash flows (used in) from investing activities (11,747 ) 954 53 514 (10,226 ) Cash flows from (used in) financing activities: Dividends paid on common stock (712 ) (479 ) — 479 (712 ) Repurchase of common stock (40 ) — — — (40 ) Proceeds from BAT Share Purchase 4,673 — — — 4,673 Debt issuance costs and financing fees (64 ) — — — (64 ) Issuance of long-term debt 8,975 — — — 8,975 Borrowings under revolving credit facility 1,400 — — — 1,400 Repayments of borrowings under revolving credit facility (1,400 ) — — — (1,400 ) Excess tax benefit on stock-based compensation plans 15 — — — 15 Dividends paid on preferred stock (21 ) — — 21 — Distribution of equity — (185 ) — 185 — Other, net (11 ) 680 30 (699 ) — Net cash flows from financing activities 12,815 16 30 (14 ) 12,847 Effect of exchange rate changes on cash and cash equivalents — — (22 ) — (22 ) Net change in cash and cash equivalents 1,193 1,796 58 — 3,047 Cash and cash equivalents at beginning of period 102 469 395 — 966 Cash and cash equivalents at end of period $ 1,295 $ 2,265 $ 453 $ — $ 4,013
Condensed Consolidating Balance Sheets	Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated June 30, 2016 Assets Cash and cash equivalents $ 127 $ 1,415 $ 376 $ — $ 1,918 Short-term investments — 26 — — 26 Accounts receivable — 81 8 — 89 Accounts receivable, related party — 33 — — 33 Other receivables 65 3,438 16 (3,506 ) 13 Inventories — 1,520 22 (1 ) 1,541 Deferred income taxes, net 9 1,002 7 — 1,018 Other current assets 8 259 75 (75 ) 267 Total current assets 209 7,774 504 (3,582 ) 4,905 Property, plant and equipment, net 3 1,259 33 — 1,295 Trademarks and other intangible assets, net — 29,442 15 (2 ) 29,455 Goodwill — 15,977 16 — 15,993 Long-term intercompany notes receivable 1,322 159 — (1,481 ) — Investment in subsidiaries 37,981 393 — (38,374 ) — Other assets and deferred charges 162 100 34 (172 ) 124 Total assets $ 39,677 $ 55,104 $ 602 $ (43,611 ) $ 51,772 Liabilities and shareholders’ equity Accounts payable $ 1 $ 184 $ 6 $ — $ 191 Tobacco settlement accruals — 1,696 — — 1,696 Due to related party — 2 — — 2 Deferred revenue, related party — 16 — — 16 Current maturities of long-term debt 416 85 — — 501 Dividends payable on common stock 599 — — — 599 Income taxes payable 702 4 — (78 ) 628 Other current liabilities 3,428 1,015 208 (3,506 ) 1,145 Total current liabilities 5,146 3,002 214 (3,584 ) 4,778 Long-term intercompany notes payable 159 1,000 322 (1,481 ) — Long-term debt (less current maturities) 12,876 316 — — 13,192 Deferred income taxes, net — 10,535 — (169 ) 10,366 Long-term retirement benefits (less current portion) 55 1,716 42 — 1,813 Other noncurrent liabilities 41 182 — — 223 Shareholders’ equity 21,400 38,353 24 (38,377 ) 21,400 Total liabilities and shareholders’ equity $ 39,677 $ 55,104 $ 602 $ (43,611 ) $ 51,772 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Issuer Guarantors Non- Guarantors Eliminations Consolidated December 31, 2015 Assets Cash and cash equivalents $ 575 $ 1,544 $ 448 $ — $ 2,567 Short-term investments — 149 — — 149 Accounts receivable — 62 6 — 68 Accounts receivable, related party — 38 — — 38 Other receivables 70 3,459 91 (3,585 ) 35 Inventories — 1,694 44 (4 ) 1,734 Deferred income taxes, net 14 1,011 7 — 1,032 Other current assets 116 323 129 (4 ) 564 Total current assets 775 8,280 725 (3,593 ) 6,187 Property, plant and equipment, net 3 1,223 29 — 1,255 Trademarks and other intangible assets, net — 29,467 — — 29,467 Goodwill — 15,976 17 — 15,993 Long-term intercompany notes receivable 1,583 169 — (1,752 ) — Investment in subsidiaries 37,151 662 — (37,813 ) — Other assets and deferred charges 175 212 31 (188 ) 230 Total assets $ 39,687 $ 55,989 $ 802 $ (43,346 ) $ 53,132 Liabilities and shareholders’ equity Accounts payable $ 2 $ 173 $ 4 $ — $ 179 Tobacco settlement accruals — 2,816 — — 2,816 Due to related party — 9 — — 9 Deferred revenue, related party — 33 — — 33 Current maturities of long-term debt 420 86 — — 506 Dividends payable on common stock 514 — — — 514 Other current liabilities 3,707 1,039 79 (3,591 ) 1,234 Total current liabilities 4,643 4,156 83 (3,591 ) 5,291 Long-term intercompany notes payable 169 1,260 323 (1,752 ) — Long-term debt (less current maturities) 16,522 327 — — 16,849 Deferred income taxes, net — 10,421 — (185 ) 10,236 Long-term retirement benefits (less current portion) 57 2,153 55 — 2,265 Other noncurrent liabilities 44 195 — — 239 Shareholders’ equity 18,252 37,477 341 (37,818 ) 18,252 Total liabilities and shareholders’ equity $ 39,687 $ 55,989 $ 802 $ (43,346 ) $ 53,132
RJR Tobacco
Condensed Consolidating Statements of Income	Condensed Consolidating Statements of Income (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net sales $ — $ 2,626 $ — $ 557 $ (42 ) $ 3,141 Net sales, related party — 54 — — — 54 Net sales — 2,680 — 557 (42 ) 3,195 Cost of products sold — 1,108 — 210 (43 ) 1,275 Selling, general and administrative expenses, net 6 714 — (223 ) 2 499 Amortization expense — 5 — 1 — 6 Operating income (loss) (6 ) 853 — 569 (1 ) 1,415 Interest and debt expense 149 3 — 22 (22 ) 152 Interest income (21 ) (1 ) (1 ) (1 ) 22 (2 ) Other (income) expense, net — 2 (10 ) (4 ) 11 (1 ) Income (loss) before income taxes (134 ) 849 11 552 (12 ) 1,266 Provision for (benefit from) income taxes (48 ) 325 — 193 — 470 Equity income from subsidiaries 882 220 746 — (1,848 ) — Net income $ 796 $ 744 $ 757 $ 359 $ (1,860 ) $ 796 For the Three Months Ended June 30, 2015 Net sales $ — $ 1,875 $ — $ 524 $ (50 ) $ 2,349 Net sales, related party — 54 — — — 54 Net sales — 1,929 — 524 (50 ) 2,403 Cost of products sold — 953 — 180 (49 ) 1,084 Selling, general and administrative expenses 43 375 — 33 — 451 (Gain) loss on divestitures — 1,891 — (5,390 ) — (3,499 ) Amortization expense — 2 — 1 — 3 Operating income (loss) (43 ) (1,292 ) — 5,700 (1 ) 4,364 Interest and debt expense 98 9 — 27 (29 ) 105 Interest income (28 ) — (1 ) — 29 — Other (income) expense, net 14 — (11 ) 6 11 20 Income (loss) before income taxes (127 ) (1,301 ) 12 5,667 (12 ) 4,239 Provision for (benefit from) income taxes (77 ) 313 — 2,075 — 2,311 Equity income from subsidiaries 1,978 3,449 1,864 — (7,291 ) — Net income $ 1,928 $ 1,835 $ 1,876 $ 3,592 $ (7,303 ) $ 1,928 Condensed Consolidating Statements of Income (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Net sales $ — $ 5,009 $ — $ 1,081 $ (87 ) $ 6,003 Net sales, related party — 109 — — — 109 Net sales — 5,118 — 1,081 (87 ) 6,112 Cost of products sold — 2,125 — 404 (89 ) 2,440 Selling, general and administrative expenses, net 22 1,349 — (409 ) 2 964 Gain on divestitures — — — (4,861 ) — (4,861 ) Amortization expense — 9 — 3 — 12 Operating income (loss) (22 ) 1,635 — 5,944 — 7,557 Interest and debt expense 323 3 — 48 (48 ) 326 Interest income (47 ) (3 ) (2 ) (1 ) 48 (5 ) Other (income) expense, net 240 6 (20 ) 3 22 251 Income (loss) before income taxes (538 ) 1,629 22 5,894 (22 ) 6,985 Provision for (benefit from) income taxes (190 ) 652 — 2,162 — 2,624 Equity income from subsidiaries 4,709 404 1,402 — (6,515 ) — Net income $ 4,361 $ 1,381 $ 1,424 $ 3,732 $ (6,537 ) $ 4,361 For the Six Months Ended June 30, 2015 Net sales $ — $ 3,496 $ — $ 958 $ (130 ) $ 4,324 Net sales, related party — 136 — — — 136 Net sales — 3,632 — 958 (130 ) 4,460 Cost of products sold — 1,711 — 349 (126 ) 1,934 Selling, general and administrative expenses 62 827 — 73 — 962 (Gain) loss on divestitures — 1,891 — (5,390 ) — (3,499 ) Amortization expense — 3 — 3 — 6 Operating income (loss) (62 ) (800 ) — 5,923 (4 ) 5,057 Interest and debt expense 189 14 — 42 (49 ) 196 Interest income (47 ) (1 ) (2 ) — 49 (1 ) Other (income) expense, net 15 — (21 ) (12 ) 21 3 Income (loss) before income taxes (219 ) (813 ) 23 5,893 (25 ) 4,859 Provision for (benefit from) income taxes (104 ) 489 — 2,157 — 2,542 Equity income from subsidiaries 2,432 3,527 2,252 — (8,211 ) — Net income $ 2,317 $ 2,225 $ 2,275 $ 3,736 $ (8,236 ) $ 2,317
Condensed Consolidating Statements of Comprehensive Income	Condensed Consolidating Statements of Comprehensive Income (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Three Months Ended June 30, 2016 Net income $ 796 $ 744 $ 757 $ 359 $ (1,860 ) $ 796 Other comprehensive income (loss), net of tax: Retirement benefits 39 44 42 (3 ) (83 ) 39 Unrealized gain on long-term investments 4 4 4 — (8 ) 4 Realized loss on hedging instruments — — — — — — Cumulative translation adjustment and other (5 ) (4 ) (5 ) (5 ) 14 (5 ) Comprehensive income $ 834 $ 788 $ 798 $ 351 $ (1,937 ) $ 834 For the Three Months Ended June 30, 2015 Net income $ 1,928 $ 1,835 $ 1,876 $ 3,592 $ (7,303 ) $ 1,928 Other comprehensive income (loss), net of tax: Retirement benefits (20 ) (13 ) (14 ) (5 ) 32 (20 ) Amortization of realized loss on hedging instruments 1 — — — — 1 Cumulative translation adjustment and other 10 10 10 10 (30 ) 10 Comprehensive income $ 1,919 $ 1,832 $ 1,872 $ 3,597 $ (7,301 ) $ 1,919 For the Six Months Ended June 30, 2016 Net income $ 4,361 $ 1,381 $ 1,424 $ 3,732 $ (6,537 ) $ 4,361 Other comprehensive income (loss), net of tax: Retirement benefits 33 38 36 (3 ) (71 ) 33 Unrealized gain on long-term investments 5 5 5 — (10 ) 5 Realized gain on long-term investments (2 ) (2 ) (2 ) — 4 (2 ) Realized loss on hedging instruments 11 — — — — 11 Cumulative translation adjustment and other 17 17 17 17 (51 ) 17 Comprehensive income $ 4,425 $ 1,439 $ 1,480 $ 3,746 $ (6,665 ) $ 4,425 For the Six Months Ended June 30, 2015 Net income $ 2,317 $ 2,225 $ 2,275 $ 3,736 $ (8,236 ) $ 2,317 Other comprehensive income (loss), net of tax: Retirement benefits (26 ) (18 ) (19 ) (5 ) 42 (26 ) Amortization of realized loss on hedging instruments 1 — — — — 1 Cumulative translation adjustment and other (17 ) (17 ) (16 ) (17 ) 50 (17 ) Comprehensive income $ 2,275 $ 2,190 $ 2,240 $ 3,714 $ (8,144 ) $ 2,275
Reclassification Out of Accumulated Other Comprehensive Income Net of Tax	Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (5 ) $ — $ — $ — $ (5 ) Cost of products sold Amortization of prior service costs — (5 ) — — — (5 ) Selling, general and administrative expenses, net — (10 ) — — — (10 ) Operating income (loss) Deferred taxes — 4 — — — 4 Provision for income taxes Net of tax — (6 ) — — — (6 ) Net income Equity income from subsidiaries (6 ) — (6 ) — 12 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (6 ) $ (6 ) $ — $ 12 $ (6 ) Net income Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the three months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (5 ) $ — $ (1 ) $ — $ (6 ) Cost of products sold Amortization of prior service costs — (4 ) — — — (4 ) Selling, general and administrative expenses — (9 ) — (1 ) — (10 ) Operating income (loss) Deferred taxes — 3 — — — 3 Provision for income taxes Net of tax — (6 ) — (1 ) — (7 ) Net income Loss on hedging instruments: Amortization of realized loss 1 — — — — 1 Interest and debt expense Equity income from subsidiaries (7 ) (1 ) (7 ) — 15 — Equity income from subsidiaries Total reclassifications $ (6 ) $ (7 ) $ (7 ) $ (1 ) $ 15 $ (6 ) Net income Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2016, were as follows: Components Amounts Reclassified Affected Line Item Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (10 ) $ — $ — $ — $ (10 ) Cost of products sold Amortization of prior service costs — (10 ) — — — (10 ) Selling, general and administrative expenses, net — (20 ) — — — (20 ) Operating income (loss) Deferred taxes — 8 — — — 8 Provision for income taxes Net of tax — (12 ) — — — (12 ) Net income Long-term investments: Realized gain on long-term investments — (3 ) — — — (3 ) Other (income) expense, net Deferred taxes — 1 — — — 1 Provision for income taxes Net of tax — (2 ) — — — (2 ) Net income Hedging instruments: Forward starting interest rate contracts 17 — — — — 17 Other (income) expense, net Deferred taxes (6 ) — — — — (6 ) Provision for income taxes Net of tax 11 — — — — 11 Net income Cumulative translation adjustment: Derecognition of cumulative translation adjustment — — — 27 — 27 Gain on divestitures Equity income from subsidiaries 13 27 13 — (53 ) — Equity income from subsidiaries Total reclassifications $ 24 $ 13 $ 13 $ 27 $ (53 ) $ 24 Net income Details about the reclassifications out of accumulated other comprehensive loss and the affected line items in the condensed consolidating statements of income (unaudited) for the six months ended June 30, 2015, were as follows: Components Amounts Reclassified Affected Line Item Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated Defined benefit pension and postretirement plans: Amortization of prior service costs $ — $ (10 ) $ — $ (1 ) $ — $ (11 ) Cost of products sold Amortization of prior service costs — (9 ) — — — (9 ) Selling, general and administrative expenses — (19 ) — (1 ) — (20 ) Operating income (loss) Deferred taxes — 7 — — — 7 Provision for income taxes Net of tax — (12 ) — (1 ) — (13 ) Net income (loss) Loss on hedging instruments: Amortization of realized loss 1 — — — — 1 Interest and debt expense Equity income from subsidiaries (13 ) (1 ) (13 ) — 27 — Equity income from subsidiaries Total reclassifications $ (12 ) $ (13 ) $ (13 ) $ (1 ) $ 27 $ (12 ) Net income (loss)
Condensed Consolidating Statements of Cash Flows	Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2016 Cash flows from (used in) operating activities $ (1,012 ) $ 120 $ 38 $ 611 $ (482 ) $ (725 ) Cash flows from (used in) investing activities: Capital expenditures — (59 ) — (35 ) — (94 ) Proceeds from settlement of short-term investments — 159 — — — 159 Proceeds from divestitures 5,015 — — — — 5,015 Proceeds from settlement of long-term investments — 23 — — — 23 Return of intercompany investments 412 495 598 — (1,505 ) — Other, net 260 — 8 11 (279 ) — Net cash flows from (used in) investing activities 5,687 618 606 (24 ) (1,784 ) 5,103 Cash flows from (used in) financing activities: Dividends paid on common stock (1,113 ) (9 ) (247 ) (205 ) 461 (1,113 ) Repurchase of common stock (149 ) — — — — (149 ) Early extinguishment of debt (3,642 ) (8 ) — — — (3,650 ) Redemption premium for early extinguishment of debt (118 ) (1 ) — — — (119 ) Make-whole premium for early extinguishment of debt (88 ) — — — — (88 ) Proceeds from termination of interest rate swaps — 66 — — — 66 Debt issuance costs and financing fees (7 ) — — — — (7 ) Excess tax benefit on stock-based compensation plans 26 — — — — 26 Dividends paid on preferred stock (21 ) — — — 21 — Distribution of equity — (580 ) (412 ) (513 ) 1,505 — Other, net (11 ) — — (268 ) 279 — Net cash flows used in financing activities (5,123 ) (532 ) (659 ) (986 ) 2,266 (5,034 ) Effect of exchange rate changes on cash and cash equivalents — — — 7 — 7 Net change in cash and cash equivalents (448 ) 206 (15 ) (392 ) — (649 ) Cash and cash equivalents at beginning of period 575 809 19 1,164 — 2,567 Cash and cash equivalents at end of period $ 127 $ 1,015 $ 4 $ 772 $ — $ 1,918 Condensed Consolidating Statements of Cash Flows (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated For the Six Months Ended June 30, 2015 Cash flows from operating activities $ 125 $ 700 $ 485 $ 208 $ (1,070 ) $ 448 Cash flows from (used in) investing activities: Capital expenditures — (34 ) — (29 ) (1 ) (64 ) Return of intercompany investments 185 10 184 — (379 ) — Acquisition, net of cash acquired (18,278 ) 524 — 535 — (17,219 ) Proceeds from divestitures 7,056 — — — — 7,056 Proceeds from settlement of long-term investments — 1 1 Other, net (710 ) — 8 11 691 — Net cash flows (used in) from investing activities (11,747 ) 501 192 517 311 (10,226 ) Cash flows from (used in) financing activities: Dividends paid on common stock (712 ) (461 ) (479 ) (110 ) 1,050 (712 ) Repurchase of common stock (40 ) — — — — (40 ) Proceeds from BAT Share Purchase 4,673 — — — — 4,673 Debt issuance costs and financing fees (64 ) — — — — (64 ) Issuance of long-term debt 8,975 — — — — 8,975 Borrowings under revolving credit facility 1,400 — — — — 1,400 Repayments of borrowings under revolving credit facility (1,400 ) — — — — (1,400 ) Excess tax benefit on stock-based compensation plans 15 — — — — 15 Dividends paid on preferred stock (21 ) — — — 21 — Distribution of equity — (184 ) (185 ) (10 ) 379 — Other, net (11 ) 700 — 2 (691 ) — Net cash flows from (used in) financing activities 12,815 55 (664 ) (118 ) 759 12,847 Effect of exchange rate changes on cash and cash equivalents — — — (22 ) — (22 ) Net change in cash and cash equivalents 1,193 1,256 13 585 — 3,047 Cash and cash equivalents at beginning of period 102 327 3 534 — 966 Cash and cash equivalents at end of period $ 1,295 $ 1,583 $ 16 $ 1,119 $ — $ 4,013
Condensed Consolidating Balance Sheets	Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated June 30, 2016 Assets Cash and cash equivalents $ 127 $ 1,015 $ 4 $ 772 $ — $ 1,918 Short-term investments — 26 — — — 26 Accounts receivable — 57 — 32 — 89 Accounts receivable, related party — 33 — — — 33 Other receivables 65 9 17 4,783 (4,861 ) 13 Inventories — 825 — 717 (1 ) 1,541 Deferred income taxes, net 9 903 1 105 — 1,018 Other current assets 8 226 — 104 (71 ) 267 Total current assets 209 3,094 22 6,513 (4,933 ) 4,905 Property, plant and equipment, net 3 817 — 475 — 1,295 Trademarks and other intangible assets, net — 324 — 29,133 (2 ) 29,455 Goodwill — 3,453 9,853 2,687 — 15,993 Long-term intercompany notes receivable 1,322 — 82 159 (1,563 ) — Investment in subsidiaries 37,981 22,893 24,898 — (85,772 ) — Other assets and deferred charges 162 543 10 16 (607 ) 124 Total assets $ 39,677 $ 31,124 $ 34,865 $ 38,983 $ (92,877 ) $ 51,772 Liabilities and shareholders’ equity Accounts payable $ 1 $ 166 $ — $ 24 $ — $ 191 Tobacco settlement accruals — 1,606 — 90 — 1,696 Due to related party — 2 — — — 2 Deferred revenue, related party — 16 — — — 16 Current maturities of long-term debt 416 85 — — — 501 Dividends payable on common stock 599 — — — — 599 Income taxes payable 702 — — — (74 ) 628 Other current liabilities 3,428 2,310 21 247 (4,861 ) 1,145 Total current liabilities 5,146 4,185 21 361 (4,935 ) 4,778 Long-term intercompany notes payable 159 — — 1,404 (1,563 ) — Long-term debt (less current maturities) 12,876 316 — — — 13,192 Deferred income taxes, net — 1 — 10,969 (604 ) 10,366 Long-term retirement benefits (less current portion) 55 1,606 27 125 — 1,813 Other noncurrent liabilities 41 159 — 23 — 223 Shareholders’ equity 21,400 24,857 34,817 26,101 (85,775 ) 21,400 Total liabilities and shareholders’ equity $ 39,677 $ 31,124 $ 34,865 $ 38,983 $ (92,877 ) $ 51,772 Condensed Consolidating Balance Sheets (Dollars in Millions) Parent Guarantor Issuer Guarantor Non- Guarantors Eliminations Consolidated December 31, 2015 Assets Cash and cash equivalents $ 575 $ 809 $ 19 $ 1,164 $ — $ 2,567 Short-term investments — 149 — — — 149 Accounts receivable — 48 — 20 — 68 Accounts receivable, related party — 38 — — — 38 Other receivables 70 30 17 4,890 (4,972 ) 35 Inventories — 941 — 797 (4 ) 1,734 Deferred income taxes, net 14 928 1 89 — 1,032 Other current assets 116 236 — 212 — 564 Total current assets 775 3,179 37 7,172 (4,976 ) 6,187 Property, plant and equipment, net 3 792 — 460 — 1,255 Trademarks and other intangible assets, net — 346 — 29,121 — 29,467 Goodwill — 3,453 9,853 2,687 — 15,993 Long-term intercompany notes receivable 1,583 — 90 169 (1,842 ) — Investment in subsidiaries 37,151 23,199 24,276 — (84,626 ) — Other assets and deferred charges 175 783 13 9 (750 ) 230 Total assets $ 39,687 $ 31,752 $ 34,269 $ 39,618 $ (92,194 ) $ 53,132 Liabilities and shareholders’ equity Accounts payable $ 2 $ 146 $ — $ 31 $ — $ 179 Tobacco settlement accruals — 2,673 — 143 — 2,816 Due to related party — 9 — — — 9 Deferred revenue, related party — 33 — — — 33 Current maturities of long-term debt 420 86 — — — 506 Dividends payable on common stock 514 — — — — 514 Other current liabilities 3,707 2,189 31 284 (4,977 ) 1,234 Total current liabilities 4,643 5,136 31 458 (4,977 ) 5,291 Long-term intercompany notes payable 169 — — 1,673 (1,842 ) — Long-term debt (less current maturities) 16,522 327 — — — 16,849 Deferred income taxes, net — 1 — 10,981 (746 ) 10,236 Long-term retirement benefits (less current portion) 57 2,036 30 142 — 2,265 Other noncurrent liabilities 44 182 — 13 — 239 Shareholders’ equity 18,252 24,070 34,208 26,351 (84,629 ) 18,252 Total liabilities and shareholders’ equity $ 39,687 $ 31,752 $ 34,269 $ 39,618 $ (92,194 ) $ 53,132

Business and Summary of Signi40

Business and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions	Jan. 13, 2016USD ($)	Oct. 31, 2015USD ($)	Aug. 31, 2015	Jun. 12, 2015USD ($)shares	Dec. 31, 2012	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Dec. 31, 2015USD ($)
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Asset sale				$ 7,100				$ 5,015	$ 7,056
Pre-tax gain on divestiture				3,500			$ 3,499	$ 4,861	3,499
BAT investment				$ 4,700					4,673
Stock split ratio			2	2
Common stock, stock split								two-for-one
Percentage of allocable shares					49.87%
NPM performance adjustment						$ 74	69	$ 143	135
NPM Adjustment credits		$ 290
Agreement period		4 years
NPM Additional adjustment credits recognized						24		$ 46
Defined benefit plan corridor percentage								10.00%
Expected pension contributions, current remaining fiscal year										$ 335
Pension contributions								$ 330
Debt issuance costs						71		71		92
Deferred income taxes, net						$ 1,018		1,018		1,032
ASU 2015-17
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Deferred income taxes, net										1,000
RJR Tobacco and Santa Fe
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
NPM Adjustment credits								$ 0	70	$ 93
JTI Holding
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Asset sale	$ 5,000
BAT
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued | shares				77,680,259
BAT Affiliate
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
BAT investment							$ 4,673		$ 4,673
Percentage of RAI's outstanding common stock				42.00%		42.00%		42.00%
Lorillard Inc.
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Cash paid to acquire business				$ 25,800

Certain Component of Cost of Pr

Certain Component of Cost of Products Sold (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accounting Policies [Abstract]
State Settlement Agreements	$ 719	$ 571	$ 1,349	$ 965
FDA user fees	$ 49	$ 38	$ 99	$ 73

Components of Pension Benefits

Components of Pension Benefits and Postretirement Benefits (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 4	$ 7	$ 8	$ 13
Interest cost	74	67	148	131
Expected return on plan assets	(93)	(90)	(186)	(178)
Amortization of prior service cost (credit)			1	1
Total benefit income	(15)	(16)	(29)	(33)
Postretirement Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost			1	1
Interest cost	11	12	24	24
Expected return on plan assets	(2)	(3)	(5)	(6)
Amortization of prior service cost (credit)	(10)	(10)	(21)	(21)
Total benefit income	$ (1)	$ (1)	$ (1)	$ (2)

Sale of International Rights 43

Sale of International Rights to the Natural American Spirit Brand - Additional Information (Detail) - USD ($) $ in Millions	Jan. 13, 2016	Jun. 12, 2015	Jun. 30, 2016	Jun. 30, 2015
Sale Of International Brand Rights [Line Items]
Proceeds from divestitures		$ 7,100	$ 5,015	$ 7,056
JTI Holding
Sale Of International Brand Rights [Line Items]
Proceeds from divestitures	$ 5,000
NAS Brand | JTI Holding
Sale Of International Brand Rights [Line Items]
Proceeds from divestitures	$ 5,000
Transaction period	5 years

Summary of Pre-tax Gain (Detail

Summary of Pre-tax Gain (Detail) - USD ($) $ in Millions	Jun. 12, 2015	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Discontinued Operations And Disposal Groups [Abstract]
Purchase price			$ 5,015
Net assets and liabilities divested			(154)
Gain on divestiture	$ 3,500	$ 3,499	$ 4,861	$ 3,499

Fair Value of Financial Assets

Fair Value of Financial Assets (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Cash and cash equivalents:
Cash equivalents	$ 1,865	$ 2,454
Short-term investments:
Short-term investments	26	149
Other assets and deferred charges:
Mortgage-backed security	9	10
Marketable equity security		1
Interest rate swaps		53
Level 1
Cash and cash equivalents:
Cash equivalents	1,865	2,454
Other assets and deferred charges:
Marketable equity security		1
Level 2
Other assets and deferred charges:
Interest rate swaps		53
Level 3
Other assets and deferred charges:
Mortgage-backed security	9	10
Corporate debt securities
Short-term investments:
Short-term investments		96
Corporate debt securities | Level 2
Short-term investments:
Short-term investments		96
U.S. Governmental agency obligations
Short-term investments:
Short-term investments		43
U.S. Governmental agency obligations | Level 2
Short-term investments:
Short-term investments		43
Commercial paper
Short-term investments:
Short-term investments		10
Commercial paper | Level 2
Short-term investments:
Short-term investments		10
Auction Rate Securities
Short-term investments:
Short-term investments	26
Other assets and deferred charges:
Financial assets, fair value	34	79
Auction Rate Securities | Level 3
Short-term investments:
Short-term investments	26
Other assets and deferred charges:
Financial assets, fair value	$ 34	$ 79

Fair Value - Additional Informa

Fair Value - Additional Information (Detail)	Jun. 12, 2015	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2016USD ($)Security	Jun. 30, 2015USD ($)	Dec. 31, 2015USD ($)
Derivative [Line Items]
Fair value transfers between levels				$ 0		$ 0
Number of auction rate securities linked to credit risk | Security				1
Auction rate securities linked to corporate credit risk at par value				$ 20,000,000
Other than temporary impairment loss		$ 0	$ 0	0	$ 0
Proceeds from termination of interest rate swaps				$ 66,000,000
8.125% guaranteed, notes due 2019 | RJR Tobacco | Lorillard Tobacco
Derivative [Line Items]
Debt instrument, interest rate	8.125%
Debt instrument description of variable rate basis				one-month LIBOR
Decrease in interest expense			$ 1,000,000	$ 3,000,000	$ 1,000,000
Proceeds from termination of interest rate swaps				66,000,000
8.125% guaranteed, notes due 2019 | RJR Tobacco | Lorillard Tobacco | One-month LIBOR
Derivative [Line Items]
Debt instrument, marginal interest rate	4.625%
Interest Rate Swap | 8.125% guaranteed, notes due 2019 | RJR Tobacco | Lorillard Tobacco
Derivative [Line Items]
Debt covered by fixed interest rate		$ 0		$ 0

Financial Assets Classified as

Financial Assets Classified as Level 3 Investments (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Cost	$ 90	$ 115
Gross Unrealized Loss	(21)	(26)
Estimated Fair Value	69	89
Auction Rate Securities
Schedule of Available-for-sale Securities [Line Items]
Cost	75	99
Gross Unrealized Loss	(15)	(20)
Estimated Fair Value	60	79
Mortgage Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Cost	15	16
Gross Unrealized Loss	(6)	(6)
Estimated Fair Value	$ 9	$ 10

Changes in Carrying Amounts of

Changes in Carrying Amounts of Goodwill by Segment (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Goodwill [Line Items]
Goodwill	$ 19,784	$ 19,784
Less: accumulated impairment charges	(3,791)	(3,791)
Net goodwill balance	15,993	15,993
RJR Tobacco
Goodwill [Line Items]
Goodwill	17,069	17,069
Less: accumulated impairment charges	(3,763)	(3,763)
Net goodwill balance	13,306	13,306
Santa Fe
Goodwill [Line Items]
Goodwill	197	197
Net goodwill balance	197	197
American Snuff
Goodwill [Line Items]
Goodwill	2,501	2,501
Less: accumulated impairment charges	(28)	(28)
Net goodwill balance	2,473	2,473
All Other
Goodwill [Line Items]
Goodwill	17	17
Net goodwill balance	$ 17	$ 17

Carrying Amount and Changes of

Carrying Amount and Changes of Trademarks and Other Indefinite-Lived Assets (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Trademarks
Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived assets	$ 29,098	$ 29,098
Other
Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived assets	87	87
RJR Tobacco | Trademarks
Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived assets	27,826	27,826
RJR Tobacco | Other
Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived assets	87	87
Santa Fe | Trademarks
Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived assets	136	136
American Snuff | Trademarks
Indefinite Lived Intangible Assets By Major Class [Line Items]
Indefinite-lived assets	$ 1,136	$ 1,136

Carrying Amount and Changes o50

Carrying Amount and Changes of Trademarks and Other Assets (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Finite Lived Intangible Assets [Line Items]
Beginning Balance			$ 282
Amortization	$ (6)	$ (3)	(12)	$ (6)
Ending Balance	270		270
Trademarks
Finite Lived Intangible Assets [Line Items]
Beginning Balance			23
Amortization			(3)
Ending Balance	20		20
Other
Finite Lived Intangible Assets [Line Items]
Beginning Balance			259
Amortization			(9)
Ending Balance	250		250
RJR Tobacco | Trademarks
Finite Lived Intangible Assets [Line Items]
Beginning Balance			17
Amortization			(3)
Ending Balance	14		14
RJR Tobacco | Other
Finite Lived Intangible Assets [Line Items]
Beginning Balance			259
Intercompany transfer			(13)
Amortization			(9)
Ending Balance	237		237
American Snuff | Trademarks
Finite Lived Intangible Assets [Line Items]
Beginning Balance			6
Ending Balance	6		6
All Other | Other
Finite Lived Intangible Assets [Line Items]
Intercompany transfer			13
Ending Balance	$ 13		$ 13

Details of Finite-Lived Intangi

Details of Finite-Lived Intangible Assets (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Finite Lived Intangible Assets [Line Items]
Gross	$ 530	$ 530
Accumulated Amortization	(260)	(248)
Net	270	282
Customer lists
Finite Lived Intangible Assets [Line Items]
Gross	240	240
Accumulated Amortization	(13)	(7)
Net	227	233
Contract manufacturing agreements
Finite Lived Intangible Assets [Line Items]
Gross	151	151
Accumulated Amortization	(141)	(139)
Net	10	12
Trademarks
Finite Lived Intangible Assets [Line Items]
Gross	124	124
Accumulated Amortization	(104)	(101)
Net	20	23
Other finite-lived intangibles
Finite Lived Intangible Assets [Line Items]
Gross	15	15
Accumulated Amortization	(2)	(1)
Net	$ 13	$ 14

Finite-Lived Intangible Assets

Finite-Lived Intangible Assets Estimated Future Amortization Expense (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Remainder of 2016	$ 11
2,017	23
2,018	22
2,019	16
2,020	15
Thereafter	183
Net	$ 270	$ 282

Components of Calculation of In

Components of Calculation of Income Per Share (Detail) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Net income	$ 796	$ 1,928	$ 4,361	$ 2,317
Basic weighted average shares, in thousands	1,427,413	1,136,354	1,427,430	1,099,704
Effect of dilutive potential shares:
Restricted stock units	2,554	3,002	3,088	3,497
Diluted weighted average shares, in thousands	1,429,967	1,139,356	1,430,518	1,103,201

Components of Inventories (Deta

Components of Inventories (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Leaf tobacco	$ 1,327	$ 1,495
Other raw materials	82	110
Work in process	84	88
Finished products	183	173
Other	24	22
Total	1,700	1,888
LIFO allowance	(159)	(154)
Inventory Net	$ 1,541	$ 1,734

Provision for Income Taxes (Det

Provision for Income Taxes (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 470	$ 2,311	$ 2,624	$ 2,542
Effective tax rate	37.10%	54.50%	37.60%	52.30%

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Federal statutory rate	35.00%

Credit Agreement - Additional I

Credit Agreement - Additional Information (Detail) - USD ($)	1 Months Ended
	Oct. 31, 2015	Dec. 31, 2014	Jun. 30, 2016
Line Of Credit Facility [Line Items]
Borrowings outstanding under the Credit Agreement			$ 0
Letters of credit outstanding amount			$ 6,000,000
New Credit Agreement
Line Of Credit Facility [Line Items]
Period of senior unsecured revolving credit facility		5 years
Credit facility under current borrowing capacity		$ 2,000,000,000
Credit facility under maximum borrowing capacity		$ 2,350,000,000
New Credit Agreement | Extended Maturity
Line Of Credit Facility [Line Items]
Period of senior unsecured revolving credit facility	12 months	12 months
Credit facility maturity date	Dec. 18, 2020	Dec. 18, 2021
Credit Agreement
Line Of Credit Facility [Line Items]
Sublimit on the aggregate amount of letters of credit		$ 300,000,000
Interest Rate		2.00%
Credit Agreement | Federal Funds Effective Swap Rate
Line Of Credit Facility [Line Items]
Debt instrument, marginal interest rate		0.50%
Credit Agreement | Eurodollar
Line Of Credit Facility [Line Items]
Debt instrument, marginal interest rate		1.00%
Credit Agreement | Minimum
Line Of Credit Facility [Line Items]
Pay rate of commitment fee per annum		0.10%
Credit Agreement | Maximum
Line Of Credit Facility [Line Items]
Pay rate of commitment fee per annum		0.275%

Long-Term Debt - Additional Inf

Long-Term Debt - Additional Information (Detail)	Mar. 05, 2016USD ($)	Feb. 22, 2016USD ($)$ / Note	Oct. 31, 2012USD ($)	Jun. 30, 2016USD ($)	Feb. 18, 2016USD ($)	Feb. 04, 2016	Dec. 31, 2015USD ($)	May 31, 2012USD ($)
Debt Instrument [Line Items]
Maximum debt purchase amount in cash				$ 2,810,000,000
Tender offer settlement date				Feb. 22, 2016
Tender notes expired date				Mar. 3, 2016
Repurchase of notes					$ 2,690,000,000
Payment to repurchase tender notes excluding accrued and unpaid interest		$ 2,810,000,000
Consideration premium per tender offer | $ / Note		30
Notes tendered principal amount		$ 1,000
Early tender premium		118,000,000
Unamortized discount and unamortized debt issuance costs	$ 2,000,000	$ 22,000,000
Percentage of tender notes accepted for purchase						100.00%
Notional amount, interest rate contracts								$ 1,000,000,000
Remaining unamortized loss of forward starting interest rate contracts, recognized as expense			$ 16,000,000
Loss on early extinguishment of debt	90,000,000			$ (239,000,000)
Debt instrument redemption date				Mar. 5, 2016
Premiums paid to noteholders as part of redemption	$ 88,000,000
Debt hedged with interest rate swap agreements				$ 501,000,000			$ 506,000,000
Estimated fair value of RAI’s outstanding debt				$ 15,700,000,000			$ 18,200,000,000
Debt weighted average interest rate				4.90%			4.60%
RJR Tobacco
Debt Instrument [Line Items]
Repurchase of notes				$ 8,400,000
Other (income) expense, net
Debt Instrument [Line Items]
Legal and bank fees				7,000,000
Expenses related to cash tender offer and redemption				$ 239,000,000
Interest Rate Swap | Lorillard Tobacco | 8.125% notes due 06/23/2019
Debt Instrument [Line Items]
Debt instrument, interest rate				8.125%
Fair value adjustment of notes				$ 7,000,000
3.250% guaranteed, notes due 2022
Debt Instrument [Line Items]
Debt instrument, interest rate			3.25%
Debt instrument maturity date			Nov. 1, 2022
4.750% guaranteed, notes due 2042
Debt Instrument [Line Items]
Debt instrument, interest rate			4.75%
Debt instrument maturity date			Nov. 1, 2042
3.750% Senior Notes due 2023
Debt Instrument [Line Items]
Debt instrument, interest rate				3.75%
Loss on early extinguishment of debt				$ 11,000,000
Fair value adjustment percentage				94.00%
6.750 % Senior Notes Due 2017
Debt Instrument [Line Items]
Debt instrument, interest rate	6.75%
Outstanding aggregate principle amount of debt redeemed	$ 700,000,000
6.750 % Senior Notes Due 2017 | Interest Rate Swap
Debt Instrument [Line Items]
Debt hedged with interest rate swap agreements							$ 700,000,000
Fair value adjustment of notes	$ 25,000,000
7.750% Senior Notes Due 2018
Debt Instrument [Line Items]
Debt instrument, interest rate	7.75%
Outstanding aggregate principle amount of debt redeemed	$ 250,000,000

Schedule of Securities and Tend

Schedule of Securities and Tender Offer (Detail) $ in Millions		Jun. 30, 2016USD ($)	Feb. 04, 2016USD ($)PriorityLevel
Debt Instrument [Line Items]
Principal Amount		$ 13,450
4.750% Senior Notes due 2042
Debt Instrument [Line Items]
Acceptance Priority Level | PriorityLevel			1
Percentage of Outstanding Tender Notes Purchased			82.71%
4.750% Senior Notes due 2042 | Tendered at Expiration
Debt Instrument [Line Items]
Principal Amount			$ 827
4.750% Senior Notes due 2042 | Accepted for Purchase
Debt Instrument [Line Items]
Principal Amount			$ 827
3.250% Senior Notes due 2022
Debt Instrument [Line Items]
Acceptance Priority Level | PriorityLevel			2
Percentage of Outstanding Tender Notes Purchased			85.59%
3.250% Senior Notes due 2022 | Tendered at Expiration
Debt Instrument [Line Items]
Principal Amount			$ 942
3.250% Senior Notes due 2022 | Accepted for Purchase
Debt Instrument [Line Items]
Principal Amount			$ 942
3.750% Senior Notes due 2023
Debt Instrument [Line Items]
Acceptance Priority Level | PriorityLevel			3
Percentage of Outstanding Tender Notes Purchased			93.76%
3.750% Senior Notes due 2023 | Tendered at Expiration
Debt Instrument [Line Items]
Principal Amount			$ 444
3.750% Senior Notes due 2023 | Accepted for Purchase
Debt Instrument [Line Items]
Principal Amount			$ 444
3.250% Senior Notes due 2020
Debt Instrument [Line Items]
Acceptance Priority Level | PriorityLevel	[1]		4
Percentage of Outstanding Tender Notes Purchased	[1]		38.34%
3.250% Senior Notes due 2020 | Tendered at Expiration
Debt Instrument [Line Items]
Principal Amount	[1]		$ 1,039
3.250% Senior Notes due 2020 | Accepted for Purchase
Debt Instrument [Line Items]
Principal Amount	[1]		$ 479
4.000% Senior Notes due 2022
Debt Instrument [Line Items]
Acceptance Priority Level | PriorityLevel			5
Percentage of Outstanding Tender Notes Purchased			0.00%
4.000% Senior Notes due 2022 | Tendered at Expiration
Debt Instrument [Line Items]
Principal Amount			$ 766
4.450% Senior Notes due 2025
Debt Instrument [Line Items]
Acceptance Priority Level | PriorityLevel			6
Percentage of Outstanding Tender Notes Purchased			0.00%
4.450% Senior Notes due 2025 | Tendered at Expiration
Debt Instrument [Line Items]
Principal Amount			$ 1,773
4.850% Senior Notes due 2023
Debt Instrument [Line Items]
Acceptance Priority Level | PriorityLevel			7
Percentage of Outstanding Tender Notes Purchased			0.00%
4.850% Senior Notes due 2023 | Tendered at Expiration
Debt Instrument [Line Items]
Principal Amount			$ 416
[1]	Series prorated

Long-Term Debt Net of Discounts

Long-Term Debt Net of Discounts (Detail) - USD ($) $ in Millions		6 Months Ended	12 Months Ended
		Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Total long-term debt		$ 13,450
Unamortized debt issuance costs		(71)	$ (92)
Total long-term debt at carrying value		13,693	17,355
Less current maturities of long-term debt at carrying value		501	506
Total long-term debt (less current maturities) at carrying value		13,192	16,849
RAI
Debt Instrument [Line Items]
Total long-term debt		13,081	16,723
Fair market value adjustments		311	348
Unamortized discounts		(29)	(37)
Unamortized debt issuance costs		(71)	(92)
Total long-term debt at carrying value		13,292	16,942
Less current maturities of long-term debt at carrying value		416	420
Total long-term debt (less current maturities) at carrying value		12,876	16,522
RAI | 3.500% notes due 08/04/2016
Debt Instrument [Line Items]
Total long-term debt		415	415
RAI | 6.750% notes due 06/15/2017
Debt Instrument [Line Items]
Total long-term debt			700
RAI | 2.300% notes due 08/21/2017
Debt Instrument [Line Items]
Total long-term debt		447	447
RAI | 7.750% notes due 06/01/2018
Debt Instrument [Line Items]
Total long-term debt			250
RAI | 2.300% notes due 06/12/2018
Debt Instrument [Line Items]
Total long-term debt		1,250	1,250
RAI | 8.125% notes due 06/23/2019
Debt Instrument [Line Items]
Total long-term debt	[1]	669	669
RAI | 6.875% notes due 05/01/2020
Debt Instrument [Line Items]
Total long-term debt		641	641
RAI | 3.250% notes due 06/12/2020
Debt Instrument [Line Items]
Total long-term debt		771	1,250
RAI | 4.000% notes due 06/12/2022
Debt Instrument [Line Items]
Total long-term debt		1,000	1,000
RAI | 3.250% notes due 11/01/2022
Debt Instrument [Line Items]
Total long-term debt		158	1,100
RAI | 3.750% notes due 05/20/2023
Debt Instrument [Line Items]
Total long-term debt		30	474
RAI | 4.850% notes due 09/15/2023
Debt Instrument [Line Items]
Total long-term debt		550	550
RAI | 4.450% notes due 06/12/2025
Debt Instrument [Line Items]
Total long-term debt		2,500	2,500
RAI | 5.700% notes due 08/15/2035
Debt Instrument [Line Items]
Total long-term debt		750	750
RAI | 7.250% notes due 06/15/2037
Debt Instrument [Line Items]
Total long-term debt		450	450
RAI | 8.125% notes due 05/01/2040
Debt Instrument [Line Items]
Total long-term debt		237	237
RAI | 7.000% notes due 08/04/2041
Debt Instrument [Line Items]
Total long-term debt		240	240
RAI | 4.750% notes due 11/01/2042
Debt Instrument [Line Items]
Total long-term debt		173	1,000
RAI | 6.150% notes due 09/15/2043
Debt Instrument [Line Items]
Total long-term debt		550	550
RAI | 5.850% notes due 08/15/2045
Debt Instrument [Line Items]
Total long-term debt		2,250	2,250
RJR Tobacco
Debt Instrument [Line Items]
Total long-term debt		369	377
Fair market value adjustments		32	36
Total long-term debt at carrying value		401	413
RJR Tobacco | 3.500% notes due 08/04/2016
Debt Instrument [Line Items]
Total long-term debt		85	85
RJR Tobacco | 2.300% notes due 08/21/2017
Debt Instrument [Line Items]
Total long-term debt		53	53
RJR Tobacco | 8.125% notes due 06/23/2019
Debt Instrument [Line Items]
Total long-term debt	[1]	81	81
RJR Tobacco | 6.875% notes due 05/01/2020
Debt Instrument [Line Items]
Total long-term debt		109	109
RJR Tobacco | 3.750% notes due 05/20/2023
Debt Instrument [Line Items]
Total long-term debt		19	26
RJR Tobacco | 8.125% notes due 05/01/2040
Debt Instrument [Line Items]
Total long-term debt		13	13
RJR Tobacco | 7.000% notes due 08/04/2041
Debt Instrument [Line Items]
Total long-term debt		$ 9	$ 10
[1]	The interest rate payable on these notes generally is subject to adjustment from time to time (as detailed in the form of these notes) based upon the credit rating assigned to these notes, provided that in no event will (1) the interest rate for these notes be reduced below 8.125% or (2) the total increase in the interest rate on these notes exceed 2.0% above 8.125%.

Long-Term Debt Net of Discoun61

Long-Term Debt Net of Discounts (Parenthetical) (Detail) - 8.125% notes due 2019	6 Months Ended
	Jun. 30, 2016
Debt Instrument [Line Items]
Interest rate description	The interest rate payable on these notes generally is subject to adjustment from time to time (as detailed in the form of these notes) based upon the credit rating assigned to these notes, provided that in no event will (1) the interest rate for these notes be reduced below 8.125% or (2) the total increase in the interest rate on these notes exceed 2.0% above 8.125%.
Debt Instrument interest rate on adjusted percentage	2.00%
Maximum
Debt Instrument [Line Items]
Debt Instrument interest rate adjusted percentage	8.125%
Minimum
Debt Instrument [Line Items]
Debt Instrument interest rate adjusted percentage	8.125%

Maturities of RAI 's and RJR To

Maturities of RAI 's and RJR Tobacco's Notes, Excluding Fair Value Adjustments and Unamortized Discounts and Debt Issuance Costs (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
2,016	$ 500
2,017	500
2,018	1,250
2,019	750
2,020	1,521
2022 and thereafter	8,929
Total principal maturities	13,450
RAI
Debt Instrument [Line Items]
2,016	415
2,017	447
2,018	1,250
2,019	669
2,020	1,412
2022 and thereafter	8,888
Total principal maturities	13,081	$ 16,723
RJR Tobacco
Debt Instrument [Line Items]
2,016	85
2,017	53
2,019	81
2,020	109
2022 and thereafter	41
Total principal maturities	$ 369

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) $ in Millions	Jul. 26, 2016USD ($)	Oct. 09, 2015Plaintiff	Jun. 30, 2016USD ($)LegalMatterPlaintiffTrial	Jun. 30, 2015LegalMatter
Loss Contingencies [Line Items]
Growers trust fund | $			$ 5,200
Number of cases filed			34
Number of cases pending			286	262
Number of cases pending in federal court			36
Number of cases pending in state court			232
UNITED STATES
Loss Contingencies [Line Items]
Number of cases pending			269
Canada
Loss Contingencies [Line Items]
Number of cases pending			17
Maryland
Loss Contingencies [Line Items]
Number of cases pending in state court			47
Illinois
Loss Contingencies [Line Items]
Number of cases pending in state court			47
Florida
Loss Contingencies [Line Items]
Number of cases pending in state court			29
New York
Loss Contingencies [Line Items]
Number of cases pending in state court			19
Missouri
Loss Contingencies [Line Items]
Number of cases pending in state court			19
New Mexico
Loss Contingencies [Line Items]
Number of cases pending in state court			13
California
Loss Contingencies [Line Items]
Number of cases pending in state court			15
Hiott, Thibault, Clayton, Cohen, Ciccone, Hallgren, Taylor and Odum | Subsequent Event
Loss Contingencies [Line Items]
Amount paid for verdicts including attorney's fees and interests | $	$ 17.7
Engle
Loss Contingencies [Line Items]
Number of cases pending in federal court			4,000
Number of cases after initial docket in federal court			400
Number of cases pending			2,967
Number of plaintiffs | Plaintiff			3,839
Number of cases pending in federal court			16
Number of cases pending in state court			2,951
Engle | Florida
Loss Contingencies [Line Items]
Number of claims filed			10,000
Number of new claims filed			0
Number of trials | Trial			200
Engle | RJR Tobacco
Loss Contingencies [Line Items]
Percentage of pending cases settled			90.00%
West Virginia IPIC
Loss Contingencies [Line Items]
Number of cases pending			564
Number of plaintiffs | Plaintiff		30	564
Broin II
Loss Contingencies [Line Items]
Number of cases pending			2,473
Tribal Court
Loss Contingencies [Line Items]
Number of cases pending			1

Categories of U.S. Tobacco-Rela

Categories of U.S. Tobacco-Related Cases Pending against RJR Tobacco (Detail)		Oct. 09, 2015Plaintiff	Jun. 30, 2016LegalMatterPlaintiff
Individual Smoking And Health Cases
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016			121
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)			2
West Virginia IPIC
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016	[1]		1
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)	[1]		0
Number of plaintiffs | Plaintiff		30	564
Increase/ (Decrease) in Number of Plaintiffs | Plaintiff			1
Engle
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016	[2]		2,967
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)	[2]		4
Number of plaintiffs | Plaintiff			3,839
Increase/ (Decrease) in Number of Plaintiffs | Plaintiff			(12)
Broin II
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016			2,473
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)			(15)
Class Action
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016			24
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)			(9)
Filter Cases
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016			76
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)			15
Healthcare Cost Recovery Cases
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016			2
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)			0
State Settlement Agreements Enforcement And Validity Adjustments
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016			28
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)			0
Other Litigation And Developments
Loss Contingencies [Line Items]
U.S. Case Numbers as of June 30, 2016			17
Change in Number of Cases Since March 31, 2016 Increase/(Decrease)			3
[1]	Includes as one case the approximately 564 cases pending as a consolidated action In Re: Tobacco Litigation Individual Personal Injury Cases, sometimes referred to as West Virginia IPIC cases, described below. The West Virginia IPIC cases have been separated from the Individual Smoking and Health cases for reporting purposes.
[2]	The Engle Progeny cases have been separated from the Individual Smoking and Health cases for reporting purposes. The number of cases will fluctuate as cases are dismissed or if any of the dismissed cases are appealed.

Categories of U.S. Tobacco-Re65

Categories of U.S. Tobacco-Related Cases Pending against RJR Tobacco (Parenthetical) (Detail) - LegalMatter	Jun. 30, 2016	Jun. 30, 2015
Loss Contingencies [Line Items]
Number of cases pending	286	262
West Virginia IPIC
Loss Contingencies [Line Items]
Number of cases pending	564

Commitments and Contingencies66

Commitments and Contingencies - Additional Information 1 (Detail)	1 Months Ended
	Nov. 30, 1998LegalMatterState	Jun. 30, 2016LegalMatterCase
Loss Contingencies [Line Items]
Number of states involved in MSA | State	46
Previously settled cases	4
Cases scheduled for trial		34
Broin II Cases
Loss Contingencies [Line Items]
Cases scheduled for trial		5
Individual Smoking And Health Cases
Loss Contingencies [Line Items]
Cases scheduled for trial		5
Filter Cases
Loss Contingencies [Line Items]
Cases scheduled for trial		24
Engle
Loss Contingencies [Line Items]
Cases scheduled for trial		105
Number of cases tried | Case		126
Smoking And Health Engle Progeny And Healthcare Cost Recovery Cases
Loss Contingencies [Line Items]
Number of cases tried		131
Number of mistrials declared		8
Verdicts returned for tobacco companies		64
Number of verdicts returned for tobacco companies by mistrial		16
Smoking And Health Engle Progeny And Healthcare Cost Recovery Cases | Florida
Loss Contingencies [Line Items]
Number of cases tried		62
Verdicts returned for plaintiff		60
Number of cases dismissed		4
Number of cases under retrial on amount of damages		1
Smoking And Health Engle Progeny And Healthcare Cost Recovery Cases | West Virginia
Loss Contingencies [Line Items]
Number of cases tried		1
Smoking And Health Engle Progeny And Healthcare Cost Recovery Cases | California
Loss Contingencies [Line Items]
Number of cases tried		1
Verdicts returned for plaintiff		1

Commitments and Contingencies67

Commitments and Contingencies - Additional Information 2 (Detail)

Nov. 06, 2015LegalMatter

Oct. 09, 2015PlaintiffCase

Jun. 30, 2016USD ($)LegalMatterPlaintiffCaseClaim

Dec. 31, 2015USD ($)

Jul. 06, 2016USD ($)

Jul. 01, 2016USD ($)LegalMatter

May 25, 2016USD ($)

May 20, 2016USD ($)

May 19, 2016USD ($)

May 17, 2016USD ($)

May 16, 2016USD ($)

May 12, 2016USD ($)

May 11, 2016USD ($)

May 09, 2016USD ($)

Apr. 27, 2016USD ($)

Apr. 26, 2016USD ($)

Apr. 22, 2016USD ($)

Apr. 21, 2016USD ($)

Jul. 31, 2015USD ($)

Jul. 08, 2015USD ($)

Jul. 01, 2015USD ($)

Jun. 30, 2015LegalMatter

Aug. 31, 2014USD ($)

Jul. 30, 2014USD ($)

Dec. 05, 2010USD ($)

May 26, 2010USD ($)

Loss Contingencies [Line Items]

Number of cases pending | LegalMatter

286

262

Number of cases pending in state court | LegalMatter

232

Number of cases pending in federal court | LegalMatter

36

Amount paid for verdicts

$ 334,900,000

Payment for compensatory and punitive damages

250,700,000

Payment for attorney fees and interest

$ 84,200,000

RJR Tobacco Indemnitee or Three

Loss Contingencies [Line Items]

Number of cases pending | LegalMatter

121

Engle

Loss Contingencies [Line Items]

Number of cases tried | Case

126

Punitive damages

$ 145,000,000,000

Number of cases pending | LegalMatter

2,967

Number of plaintiffs | Plaintiff

3,839

Punitive Damages 2

$ 36,300,000,000

Punitive Damages 3

17,600,000,000

Punitive Damages 4

$ 16,300,000,000

Number of cases pending in state court | LegalMatter

2,951

Number of cases pending in federal court | LegalMatter

16

Number of cases filed but not served | LegalMatter

11

Litigation settlement, amount

$ 100,000,000

Number of cases became final | LegalMatter

43

Engle | Lorillard Tobacco

Loss Contingencies [Line Items]

Litigation settlement, amount

15,000,000

Engle | RJR Tobacco or Lorillard Tobacco

Loss Contingencies [Line Items]

Number of cases tried | LegalMatter

10

Engle | RJR Tobacco or Lorillard Tobacco | Subsequent Event

Loss Contingencies [Line Items]

Number of additional cases tried | LegalMatter

2

Engle | RJR Tobacco

Loss Contingencies [Line Items]

Litigation settlement, amount

42,500,000

Engle | Philip Morris

Loss Contingencies [Line Items]

Litigation settlement, amount

$ 42,500,000

Turner

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

20.00%

20.00%

Compensatory damages

$ 3,000,000

$ 3,000,000

Punitive damages

$ 10,000,000

$ 10,000,000

Turner | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

80.00%

80.00%

Compensatory damages

2,400,000

Punitive damages

$ 10,000,000

Enochs

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

22.00%

22.00%

Compensatory damages

$ 21,000,000

$ 13,900,000

$ 21,000,000

Punitive damages

$ 6,250,000

$ 6,250,000

$ 6,250,000

Bond

$ 3,500,000

Enochs | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

12.00%

12.00%

Enochs | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

66.00%

66.00%

Dion

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

25.00%

25.00%

Compensatory damages

$ 12,000,000

$ 12,000,000

Punitive damages

$ 30,000

$ 30,000

Dion | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

Nally

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

25.00%

25.00%

Compensatory damages

$ 6,000,000

$ 6,000,000

Punitive damages

$ 12,000,000

$ 12,000,000

Nally | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

Compensatory damages

$ 6,000,000

Punitive damages

$ 12,000,000

McCabe

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

70.00%

70.00%

Compensatory damages

$ 5,000,000

$ 5,000,000

Punitive damages

$ 6,500,000

$ 6,500,000

McCabe | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

Sermons | Subsequent Event

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

80.00%

Compensatory damages

$ 65,000

Sermons | Other Defendant | Subsequent Event

Loss Contingencies [Line Items]

Allocation of fault

15.00%

Punitive damages

$ 51,225

Sermons | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

5.00%

Sermons | RJR Tobacco | Subsequent Event

Loss Contingencies [Line Items]

Allocation of fault

5.00%

Compensatory damages

$ 65,000

Punitive damages

$ 17,075

Individual Smoking And Health Cases | RJR Tobacco Indemnitee or Three

Loss Contingencies [Line Items]

Number of cases pending | LegalMatter

1

Izzarelli

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

42.00%

Allocation of fault

58.00%

Compensatory damages

$ 13,760,000

Punitive damages

$ 3,970,000

Total damages

11,950,000

Judgment interest awarded

15,800,000

Judgment Interest Per Day Awarded

4,000

Amended Final Judgment

$ 28,100,000

Major

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

50.00%

Compensatory damages

$ 135,000

Amended Final Judgment

3,780,000

Major | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

17.00%

Total damages

$ 3,900,000

Bond

9,100,000

Major | Pre Judgment Interest

Loss Contingencies [Line Items]

Judgment interest awarded

1,900,000

Major | Post Judgment Interest

Loss Contingencies [Line Items]

Judgment Interest Per Day Awarded

$ 1,100

Major | RJR Tobacco and Other Manufacturer

Loss Contingencies [Line Items]

Allocation of fault

33.00%

Compensatory damages

$ 17,740,000

Larkin

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

38.00%

Allocation of fault

62.00%

Compensatory damages

$ 4,960,000

Punitive damages

$ 8,500,000

Amount of final judgment

$ 13,460,000

West Virginia IPIC

Loss Contingencies [Line Items]

Number of cases pending | LegalMatter

564

Number of plaintiffs | Plaintiff

30

564

Number of cases scheduled for trial | Case

5

Various Smokeless Manufacturers

Loss Contingencies [Line Items]

Number of plaintiffs | Plaintiff

41

Various Smokeless Manufacturers | Reynolds Defendants

Loss Contingencies [Line Items]

Number of claims | Claim

14

Federal

Loss Contingencies [Line Items]

Number of cases pending in federal court | LegalMatter

1

Number of federal cases settled | LegalMatter

400

Number of federal cases tried | LegalMatter

12

Number of cases filed by different lawyers | LegalMatter

2

Verdicts in Individual Engle Pr

Verdicts in Individual Engle Progeny Cases have been Tried and Remain Pending (Detail) - USD ($)

Jun. 30, 2016

May 19, 2016

May 16, 2016

May 11, 2016

Apr. 29, 2016

Apr. 26, 2016

Apr. 21, 2016

Feb. 12, 2016

Jan. 26, 2016

Dec. 22, 2015

Dec. 18, 2015

Dec. 09, 2015

Oct. 02, 2015

Sep. 30, 2015

Sep. 11, 2015

Sep. 08, 2015

Sep. 01, 2015

Aug. 31, 2015

Aug. 06, 2015

Jul. 13, 2015

Jun. 30, 2015

Jun. 18, 2015

May 31, 2015

Apr. 17, 2015

Mar. 26, 2015

Mar. 25, 2015

Mar. 23, 2015

Feb. 26, 2015

Feb. 24, 2015

Feb. 11, 2015

Jan. 29, 2015

Nov. 24, 2014

Nov. 21, 2014

Nov. 18, 2014

Oct. 20, 2014

Oct. 10, 2014

Sep. 30, 2014

Aug. 28, 2014

Aug. 27, 2014

Jul. 17, 2014

Jun. 23, 2014

May 15, 2014

Mar. 17, 2014

Sep. 20, 2013

Jul. 31, 2013

Jun. 19, 2013

Jun. 14, 2013

Jun. 04, 2013

May 31, 2013

May 23, 2013

Apr. 01, 2013

Mar. 20, 2013

Feb. 13, 2013

Feb. 11, 2013

Oct. 17, 2012

Aug. 01, 2012

May 17, 2012

Oct. 31, 2011

Jun. 16, 2011

Apr. 26, 2011

Aug. 31, 2010

Jun. 30, 2010

May 20, 2010

Apr. 29, 2010

Apr. 26, 2010

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 196,144,790

Punitive Damages

201,403,075

Hiott

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[2]

$ 730,000

Hiott | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

40.00%

40.00%

Starr Blundell

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[2]

$ 50,000

Starr Blundell | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

10.00%

10.00%

Clayton

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[2]

$ 60,000

Clayton | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

10.00%

10.00%

Buonomo

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 4,060,000

[2]

$ 4,060,000

Punitive Damages

$ 25,000,000

$ 15,700,000

Buonomo | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

77.50%

77.50%

Thibault

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[2]

$ 1,750,000

Punitive Damages

$ 1,275,000

Thibault | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

70.00%

70.00%

Hubbird

Loss Contingencies [Line Items]

Allocation of fault

50.00%

Compensatory damages (as adjusted)

[2]

$ 3,000,000

Punitive Damages

$ 25,000,000

Hubbird | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

50.00%

Soffer

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[2]

$ 2,000,000

Soffer | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

40.00%

40.00%

Verdicts In Individual Cases Pending

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[2]

$ 11,650,000

Punitive Damages

$ 51,275,000

Putney

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

4,500,000

Punitive Damages

$ 2,500,000

Putney | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

Andy Allen

Loss Contingencies [Line Items]

Allocation of fault

24.00%

Compensatory damages (as adjusted)

[1]

$ 2,475,000

Punitive Damages

$ 7,756,000

$ 7,750,000

$ 8,100,000

Andy Allen | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

24.00%

45.00%

Calloway

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1],[3]

$ 7,245,000

Calloway | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

18.00%

18.00%

Calloway | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

27.00%

27.00%

James Smith

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1],[3]

$ 600,000

Punitive Damages

$ 20,000

James Smith | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

55.00%

55.00%

Evers

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 2,950,000

Punitive Damages

$ 12,360,000

Evers | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

9.00%

9.00%

Evers | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

60.00%

60.00%

Schoeff

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 7,875,000

Schoeff | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

Marotta

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 3,480,000

[1]

$ 3,480,000

Marotta | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

58.00%

58.00%

Searcy

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 1,000,000

[1],[3]

$ 6,000,000

Punitive Damages

$ 1,670,000

$ 10,000,000

Searcy | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

Earl Graham

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 550,000

[1]

$ 550,000

Earl Graham | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

20.00%

20.00%

Skolnick

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 766,500

Skolnick | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

Grossman

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 15,350,000

[1],[3]

$ 484,000

Punitive Damages

$ 22,500,000

Grossman | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

25.00%

Gafney | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

33.00%

33.00%

Gafney | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

33.00%

33.00%

Burkhart

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1],[3]

$ 3,500,000

Punitive Damages

$ 1,750,000

Burkhart | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

10.00%

10.00%

Burkhart | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

25.00%

25.00%

Bakst (Odom)

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 4,504,000

[1]

$ 4,500,000

Punitive Damages

$ 14,000,000

Bakst (Odom) | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

Robinson

Loss Contingencies [Line Items]

Allocation of fault

70.50%

Compensatory damages (as adjusted)

[1]

$ 16,900,000

Punitive Damages

$ 16,900,000

Robinson | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

71.00%

Harris

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1],[3]

$ 1,100,000

Harris | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

10.00%

Harris | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

15.00%

Wilcox

Loss Contingencies [Line Items]

Allocation of fault

70.00%

Compensatory damages (as adjusted)

$ 4,900,000

[1]

$ 4,900,000

Punitive Damages

$ 8,500,000

Wilcox | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

70.00%

Irimi

Loss Contingencies [Line Items]

Allocation of fault

14.50%

Irimi | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

15.00%

14.50%

Irimi | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

15.00%

Lourie

Loss Contingencies [Line Items]

Allocation of fault

3.00%

Compensatory damages (as adjusted)

[1]

$ 137,000

Lourie | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

7.00%

7.00%

Lourie | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

3.00%

Kerrivan

Loss Contingencies [Line Items]

Allocation of fault

31.00%

Compensatory damages (as adjusted)

[1],[3]

$ 6,046,660

Punitive Damages

$ 9,600,000

Kerrivan | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

31.00%

Schleider

Loss Contingencies [Line Items]

Allocation of fault

70.00%

Compensatory damages (as adjusted)

$ 14,700,000

[1],[3]

$ 14,700,000

Schleider | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

70.00%

Perrotto

Loss Contingencies [Line Items]

Allocation of fault

20.00%

Compensatory damages (as adjusted)

[1]

$ 1,063,000

Perrotto | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

6.00%

6.00%

Perrotto | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

20.00%

Ellen Gray

Loss Contingencies [Line Items]

Allocation of fault

50.00%

Compensatory damages (as adjusted)

[1]

$ 3,000,000

Ellen Gray | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

50.00%

Sowers

Loss Contingencies [Line Items]

Allocation of fault

50.00%

Compensatory damages (as adjusted)

[1]

$ 2,125,000

Sowers | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

50.00%

Caprio

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 167,700

Caprio | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

10.00%

10.00%

Caprio | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

20.00%

20.00%

Zamboni

Loss Contingencies [Line Items]

Allocation of fault

30.00%

Compensatory damages (as adjusted)

[1]

$ 102,000

Zamboni | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

Pollari

Loss Contingencies [Line Items]

Allocation of fault

42.50%

Compensatory damages (as adjusted)

$ 4,250,000

[1]

$ 10,000,000

Punitive Damages

$ 1,500,000

$ 1,500,000

Pollari | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

43.00%

Gore

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 460,000

Gore | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

23.00%

23.00%

Ryan

Loss Contingencies [Line Items]

Allocation of fault

65.00%

Compensatory damages (as adjusted)

$ 13,975,000

[1]

$ 14,000,000

$ 21,500,000

Punitive Damages

$ 25,000,000

$ 25,000,000

$ 25,000,000

Ryan | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

65.00%

Hardin

Loss Contingencies [Line Items]

Allocation of fault

13.00%

Compensatory damages (as adjusted)

[1]

$ 100,880

Hardin | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

13.00%

Mc Coy

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 675,000

[1]

1,500,000

Punitive Damages

$ 6,000,000

$ 3,000,000

Mc Coy | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

20.00%

20.00%

Mc Coy | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

25.00%

25.00%

Block

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 463,000

[1]

$ 926,000

Punitive Damages

$ 800,000

800,000

Block | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

50.00%

50.00%

Lewis

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 187,500

Lewis | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

25.00%

25.00%

Cooper

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 1,200,000

Cooper | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

40.00%

40.00%

Duignan

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 2,690,000

[1]

$ 6,000,000

Punitive Damages

$ 2,500,000

Duignan | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

Punitive Damages

$ 2,500,000

O'Hara

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 14,700,000

[1]

14,700,000

Punitive Damages

$ 20,000,000

$ 20,000,000

O'Hara | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

85.00%

85.00%

Marchese

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1],[3]

$ 225,000

Punitive Damages

$ 250,000

Marchese | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

22.50%

22.50%

Barbose

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 5,000,000

Punitive Damages

$ 500,000

Barbose | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

42.50%

Monroe

Loss Contingencies [Line Items]

Allocation of fault

58.00%

Compensatory damages (as adjusted)

[1]

$ 6,380,000

Monroe | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

58.00%

Ledoux

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 5,000,000

[1]

$ 10,000,000

Punitive Damages

$ 12,500,000

$ 12,500,000

Ledoux | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

47.00%

47.00%

Ewing

Loss Contingencies [Line Items]

Allocation of fault

2.00%

Compensatory damages (as adjusted)

[1]

$ 4,800

Ewing | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

2.00%

Ahrens

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 5,800,000

Punitive Damages

$ 2,500,000

Ahrens | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

44.00%

44.00%

Turner

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 2,400,000

Punitive Damages

$ 10,000,000

Turner | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

80.00%

80.00%

Enochs

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 13,860,000

Punitive Damages

$ 6,250,000

Enochs | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

66.00%

66.00%

Sermons

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 3,250

Punitive Damages

$ 17,075

Sermons | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

5.00%

Dion

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 12,000,000

Punitive Damages

$ 30,000

Dion | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

Nally

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1],[3]

$ 6,000,000

Punitive Damages

$ 12,000,000

Nally | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

McCabe

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 1,500,000

Punitive Damages

$ 6,500,000

McCabe | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

[1]

Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.

[2]

Compensatory damages are adjusted to reflect the reduction that may be required by the allocation of fault. Punitive damages are not adjusted and reflect the amount of the final judgment(s) signed by the trial court judge(s). The amounts listed above do not include attorneys’ fees or statutory interest of approximately $26.1 million.

[3]

The court did not apply comparative fault in the final judgment.

Verdicts in Individual Engle 69

Verdicts in Individual Engle Progeny Cases have been Tried and Remain Pending (Parenthetical) (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2016USD ($)
Loss Contingencies [Line Items]
Payment for attorney fees and interest	$ 84.2
Verdicts In Individual Cases Pending
Loss Contingencies [Line Items]
Payment for attorney fees and interest	$ 26.1

Commitments and Contingencies70

Commitments and Contingencies - Additional Information 3 (Detail) - USD ($)

Jul. 26, 2016

Jun. 09, 2016

Jun. 30, 2016

Aug. 31, 2013

Jul. 31, 2013

Aug. 31, 2010

Jul. 31, 2010

Jun. 30, 2010

Apr. 29, 2010

Apr. 26, 2010

Mar. 24, 2010

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 196,144,790

Punitive damages - adjusted

201,403,075

Outstanding Judgments

397,547,865

Amount paid for verdicts

334,900,000

Payment for attorney fees and interest

$ 84,200,000

Robin Cohen

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 3,330,000

$ 10,000,000

Punitive damages - adjusted

$ 10,000,000

Allocation of fault to plaintiff

33.30%

Punitive damages

$ 20,000,000

Amount paid for verdicts

$ 18,800,000

Robin Cohen | Subsequent Event

Loss Contingencies [Line Items]

Payment for attorney fees and interest

$ 840,000

Robin Cohen | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

33.30%

Robin Cohen | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

33.30%

Putney

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 4,500,000

Punitive damages - adjusted

$ 2,500,000

Allocation of fault to plaintiff

35.00%

Punitive damages

$ 2,500,000

Compensatory damages

$ 15,100,000

Putney | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

Putney | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

35.00%

Grossman

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

$ 15,350,000

[1],[2]

$ 484,000

Punitive damages - adjusted

$ 22,500,000

Allocation of fault to plaintiff

25.00%

70.00%

Punitive damages

$ 22,500,000

Compensatory damages

$ 15,350,000

$ 1,900,000

Bond

$ 5,000,000

Grossman | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

25.00%

Grossman | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

5.00%

[1]

Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.

[2]

The court did not apply comparative fault in the final judgment.

Commitments and Contingencies71

Commitments and Contingencies - Additional Information 4 (Detail) - USD ($)

Jun. 30, 2016

Sep. 30, 2015

Aug. 31, 2015

Apr. 30, 2015

Nov. 26, 2014

Nov. 24, 2014

Oct. 31, 2011

May 31, 2011

Apr. 26, 2011

Aug. 31, 2010

May 20, 2010

Loss Contingencies [Line Items]

Punitive damages - adjusted

$ 201,403,075

Compensatory damages (as adjusted)

[1]

196,144,790

Buonomo

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

22.50%

Compensatory damages

$ 5,200,000

Punitive damages

25,000,000

Punitive damages - adjusted

25,000,000

$ 15,700,000

Compensatory damages (as adjusted)

$ 4,060,000

[2]

$ 4,060,000

Amended Final Judgment

$ 29,100,000

Buonomo | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

77.50%

77.50%

Andy Allen

Loss Contingencies [Line Items]

Allocation of fault

24.00%

Allocation of fault to plaintiff

70.00%

40.00%

Compensatory damages

$ 3,100,000

$ 6,000,000

Punitive damages

$ 7,750,000

$ 17,000,000

Punitive damages - adjusted

$ 7,756,000

$ 7,750,000

$ 8,100,000

Compensatory damages (as adjusted)

[1]

$ 2,475,000

Total damages

$ 3,100,000

$ 19,700,000

Bond

$ 2,500,000

Andy Allen | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

6.00%

15.00%

Andy Allen | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

24.00%

45.00%

[1]

Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.

[2]

Compensatory damages are adjusted to reflect the reduction that may be required by the allocation of fault. Punitive damages are not adjusted and reflect the amount of the final judgment(s) signed by the trial court judge(s). The amounts listed above do not include attorneys’ fees or statutory interest of approximately $26.1 million.

Commitments and Contingencies72

Commitments and Contingencies - Additional Information 5 (Detail) - USD ($)

Jul. 21, 2016

Jul. 18, 2016

Jun. 17, 2016

Jun. 07, 2016

Jun. 30, 2016

Mar. 31, 2012

Jan. 26, 2012

Jan. 24, 2012

Sep. 30, 2011

Jul. 15, 2011

Jun. 16, 2011

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 196,144,790

Amount paid for verdicts

334,900,000

Payment for attorney fees and interest

84,200,000

Punitive damages - adjusted

201,403,075

Soffer

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

60.00%

Compensatory damages

$ 5,000,000

Total damages

$ 2,000,000

Compensatory damages (as adjusted)

[2]

$ 2,000,000

Soffer | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

40.00%

40.00%

Ciccone

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

70.00%

Compensatory damages

$ 3,200,000

Punitive damages

$ 50,000

Compensatory damages (as adjusted)

$ 1,010,000

Amount paid for verdicts

$ 3,700,000

Ciccone | Subsequent Event

Loss Contingencies [Line Items]

Payment for attorney fees and interest

$ 500,000

Ciccone | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

Hallgren

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

50.00%

Compensatory damages

$ 2,000,000

Punitive damages

$ 750,000

Compensatory damages (as adjusted)

$ 1,000,000

Amount paid for verdicts

$ 2,240,000

Punitive damages - adjusted

$ 750,000

Hallgren | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

25.00%

Hallgren | Subsequent Event

Loss Contingencies [Line Items]

Amount paid for verdicts

$ 105,000

Hallgren | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

25.00%

[1]

Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.

[2]

Compensatory damages are adjusted to reflect the reduction that may be required by the allocation of fault. Punitive damages are not adjusted and reflect the amount of the final judgment(s) signed by the trial court judge(s). The amounts listed above do not include attorneys’ fees or statutory interest of approximately $26.1 million.

Commitments and Contingencies73

Commitments and Contingencies - Additional Information 6 (Detail) - USD ($)	Jul. 02, 2016	Jun. 30, 2016	Aug. 02, 2012	Aug. 01, 2012	May 31, 2012	May 17, 2012
Loss Contingencies [Line Items]
Amount paid for verdicts		$ 334,900,000
Calloway
Loss Contingencies [Line Items]
Allocation of fault to plaintiff						20.50%
Compensatory damages						$ 20,500,000
Share of damages					$ 25,000,000
Calloway | Lorillard Tobacco
Loss Contingencies [Line Items]
Punitive damages					12,600,000
Allocation of fault		18.00%				18.00%
Calloway | RJR Tobacco
Loss Contingencies [Line Items]
Punitive damages					$ 17,250,000
Allocation of fault		27.00%				27.00%
Calloway | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault						34.50%
Hiott
Loss Contingencies [Line Items]
Punitive damages			$ 0
Allocation of fault to plaintiff				60.00%
Compensatory damages				$ 1,830,000
Total damages				$ 730,000
Hiott | Subsequent Event
Loss Contingencies [Line Items]
Amount paid for verdicts	$ 4,100,000
Hiott | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		40.00%		40.00%

Commitments and Contingencies74

Commitments and Contingencies - Additional Information 7 (Detail) - USD ($) $ in Thousands	Jun. 09, 2016	Jun. 30, 2016	Jun. 25, 2013	Jun. 03, 2013	Oct. 18, 2012	Oct. 17, 2012	Sep. 21, 2012	Sep. 20, 2012
Loss Contingencies [Line Items]
Amount paid for verdicts		$ 334,900
Sikes
Loss Contingencies [Line Items]
Punitive damages							$ 2,000
Allocation of fault to plaintiff								49.00%
Compensatory damages								$ 4,100
Amended Final Judgment			$ 5,500	$ 6,100
Amount paid for verdicts	$ 10,400
Sikes | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault								51.00%
James Smith
Loss Contingencies [Line Items]
Punitive damages					$ 20
Allocation of fault to plaintiff						45.00%
Compensatory damages						$ 600
Total damages					620
Bond					$ 620
James Smith | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		55.00%				55.00%

Commitments and Contingencies75

Commitments and Contingencies - Additional Information 8 (Detail) - USD ($)

Jun. 30, 2016

Apr. 11, 2016

Nov. 30, 2013

Sep. 30, 2013

Apr. 30, 2013

Apr. 01, 2013

Mar. 20, 2013

Feb. 14, 2013

Feb. 13, 2013

Feb. 12, 2013

Feb. 11, 2013

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 196,144,790

Punitive damages - adjusted

201,403,075

Evers

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

31.00%

Compensatory damages

$ 3,230,000

Punitive damages

$ 12,360,000

Compensatory damages (as adjusted)

[1]

2,950,000

Punitive damages - adjusted

$ 12,360,000

Evers | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

9.00%

9.00%

Total damages

$ 266,000

Evers | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

60.00%

60.00%

Total damages

$ 1,770,000

Bond

$ 5,000,000

Schoeff

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

25.00%

Compensatory damages

$ 10,500,000

Punitive damages

$ 30,000,000

$ 30,000,000

Total damages

$ 7,880,000

Compensatory damages (as adjusted)

[1]

$ 7,875,000

Schoeff | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

Marotta

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

42.00%

Compensatory damages

$ 6,000,000

Compensatory damages (as adjusted)

$ 3,480,000

[1]

$ 3,480,000

Marotta | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

58.00%

58.00%

Searcy

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

40.00%

Compensatory damages

$ 6,000,000

Punitive damages

10,000,000

Bond

$ 2,200,000

Compensatory damages (as adjusted)

$ 1,000,000

[1],[2]

6,000,000

Punitive damages - adjusted

$ 1,670,000

$ 10,000,000

Remitted compensatory damages

$ 1,000,000

Remitted punitive damages

$ 1,670,000

Searcy | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

30.00%

Searcy | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

[1]

Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.

[2]

The court did not apply comparative fault in the final judgment.

Commitments and Contingencies76

Commitments and Contingencies - Additional Information 9 (Detail) - USD ($)		Jun. 30, 2016		Nov. 30, 2013	Jul. 31, 2013	Jun. 14, 2013	Jun. 04, 2013	May 31, 2013	May 23, 2013	May 02, 2013
Loss Contingencies [Line Items]
Compensatory damages (as adjusted)	[1]	$ 196,144,790
David Cohen
Loss Contingencies [Line Items]
Allocation of fault to plaintiff										40.00%
Compensatory damages (as adjusted)								$ 617,000
Compensatory damages										$ 2,060,000
David Cohen | Lorillard Tobacco
Loss Contingencies [Line Items]
Allocation of fault										20.00%
Compensatory damages (as adjusted)								411,000
David Cohen | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault										30.00%
David Cohen | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault										10.00%
Earl Graham
Loss Contingencies [Line Items]
Allocation of fault to plaintiff									70.00%
Compensatory damages (as adjusted)		$ 550,000	[1]					$ 550,000
Compensatory damages									$ 2,750,000
Earl Graham | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		20.00%							20.00%
Earl Graham | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault									10.00%
Starr Blundell
Loss Contingencies [Line Items]
Allocation of fault to plaintiff							80.00%
Compensatory damages (as adjusted)	[2]	$ 50,000
Compensatory damages							$ 500,000
Amount of final judgment				$ 50,000
Starr Blundell | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		10.00%					10.00%
Starr Blundell | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault							10.00%
Skolnick
Loss Contingencies [Line Items]
Allocation of fault to plaintiff						40.00%
Compensatory damages (as adjusted)					$ 766,500
Compensatory damages						$ 2,560,000
Skolnick | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		30.00%				30.00%
Skolnick | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault						30.00%
[1]	Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.
[2]	Compensatory damages are adjusted to reflect the reduction that may be required by the allocation of fault. Punitive damages are not adjusted and reflect the amount of the final judgment(s) signed by the trial court judge(s). The amounts listed above do not include attorneys’ fees or statutory interest of approximately $26.1 million.

Commitments and Contingencies77

Commitments and Contingencies - Additional Information 10 (Detail) - USD ($)	Jul. 02, 2016	Apr. 29, 2016	Jun. 30, 2016	Feb. 27, 2014	Jan. 31, 2014	Jan. 28, 2014	Sep. 30, 2013	Sep. 20, 2013	Jun. 30, 2013	Jun. 21, 2013	Jun. 19, 2013
Loss Contingencies [Line Items]
Amount paid for verdicts			$ 334,900,000
Thibault
Loss Contingencies [Line Items]
Allocation of fault to plaintiff											30.00%
Compensatory damages											$ 1,750,000
Punitive damages										$ 1,280,000
Total damages									$ 3,030,000
Thibault | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault			70.00%								70.00%
Gafney
Loss Contingencies [Line Items]
Allocation of fault to plaintiff								34.00%
Compensatory damages								$ 5,800,000
Total damages							$ 1,900,000
Gafney | Lorillard Tobacco
Loss Contingencies [Line Items]
Allocation of fault			33.00%					33.00%
Total damages							$ 1,900,000
Gafney | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault			33.00%					33.00%
Cheeley
Loss Contingencies [Line Items]
Allocation of fault to plaintiff						50.00%
Compensatory damages			$ 1,500,000			$ 3,000,000
Punitive damages			$ 2,000,000		$ 2,000,000
Amount paid for verdicts		$ 5,500,000
Cheeley | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault						50.00%
Banks
Loss Contingencies [Line Items]
Allocation of fault to plaintiff				85.00%
Compensatory damages				$ 0
Banks | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault				0.00%
Banks | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault				15.00%
Subsequent Event | Thibault
Loss Contingencies [Line Items]
Amount paid for verdicts	$ 5,000,000

Commitments and Contingencies78

Commitments and Contingencies - Additional Information 11 (Detail) - USD ($)		Jul. 14, 2016	Jun. 09, 2016	Jul. 31, 2014	Jun. 30, 2016	May 16, 2014	May 15, 2014	Mar. 31, 2014	Mar. 26, 2014	Mar. 17, 2014
Loss Contingencies [Line Items]
Amount paid for verdicts					$ 334,900,000
Compensatory damages (as adjusted)	[1]				196,144,790
Clayton
Loss Contingencies [Line Items]
Allocation of fault to plaintiff										90.00%
Compensatory damages				$ 60,000						$ 600,000
Punitive damages										$ 0
Taxable costs				163,469
Amount of final judgment				$ 223,469
Compensatory damages (as adjusted)	[2]				$ 60,000
Clayton | Subsequent Event
Loss Contingencies [Line Items]
Amount paid for verdicts		$ 2,740,000
Clayton | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault					10.00%					10.00%
Bowden
Loss Contingencies [Line Items]
Allocation of fault to plaintiff									40.00%
Compensatory damages									$ 5,000,000
Punitive damages									$ 0
Amount paid for verdicts			$ 2,660,000
Compensatory damages (as adjusted)								$ 1,500,000
Bowden | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault									30.00%
Bowden | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault									30.00%
Burkhart
Loss Contingencies [Line Items]
Allocation of fault to plaintiff							50.00%
Compensatory damages							$ 5,000,000
Compensatory damages (as adjusted)	[1],[3]				$ 3,500,000
Burkhart | Lorillard Tobacco
Loss Contingencies [Line Items]
Allocation of fault					10.00%		10.00%
Punitive damages						$ 500,000
Burkhart | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault							15.00%
Punitive damages						750,000
Burkhart | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault					25.00%		25.00%
Punitive damages						$ 1,250,000
[1]	Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.
[2]	Compensatory damages are adjusted to reflect the reduction that may be required by the allocation of fault. Punitive damages are not adjusted and reflect the amount of the final judgment(s) signed by the trial court judge(s). The amounts listed above do not include attorneys’ fees or statutory interest of approximately $26.1 million.
[3]	The court did not apply comparative fault in the final judgment.

Commitments and Contingencies79

Commitments and Contingencies - Additional Information 12 (Detail) - USD ($)		Jun. 30, 2016		Feb. 28, 2015	Jan. 27, 2015	Sep. 30, 2014	Aug. 27, 2014	Jul. 31, 2014	Jul. 18, 2014	Jul. 17, 2014	Jun. 23, 2014
Loss Contingencies [Line Items]
Compensatory damages (as adjusted)	[1]	$ 196,144,790
Bakst (Odom)
Loss Contingencies [Line Items]
Allocation of fault to plaintiff											25.00%
Compensatory damages											$ 6,000,000
Compensatory damages (as adjusted)		$ 4,504,000	[1]								4,500,000
Punitive damages											14,000,000
Bond											$ 5,000,000
Bakst (Odom) | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		75.00%									75.00%
Robinson
Loss Contingencies [Line Items]
Allocation of fault to plaintiff										29.50%
Allocation of fault										70.50%
Compensatory damages								$ 16,900,000		$ 16,900,000
Compensatory damages (as adjusted)	[1]	$ 16,900,000
Punitive damages									$ 23,600,000,000
Bond				$ 5,000,000
Remitted punitive damages					$ 16,900,000
Robinson | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		71.00%
Harris
Loss Contingencies [Line Items]
Compensatory damages (as adjusted)	[1],[2]	$ 1,100,000
Harris | Survival claim
Loss Contingencies [Line Items]
Allocation of fault to plaintiff								60.00%
Allocation of fault								15.00%
Compensatory damages								$ 1,300,000
Harris | Wrongful death claim
Loss Contingencies [Line Items]
Allocation of fault to plaintiff								70.00%
Allocation of fault								10.00%
Compensatory damages								$ 400,000
Harris | Lorillard Tobacco
Loss Contingencies [Line Items]
Allocation of fault		10.00%
Harris | Lorillard Tobacco | Survival claim
Loss Contingencies [Line Items]
Allocation of fault								10.00%
Harris | Lorillard Tobacco | Wrongful death claim
Loss Contingencies [Line Items]
Allocation of fault								10.00%
Harris | Other Defendant | Survival claim
Loss Contingencies [Line Items]
Allocation of fault								15.00%
Harris | Other Defendant | Wrongful death claim
Loss Contingencies [Line Items]
Allocation of fault								10.00%
Harris | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		15.00%
Wilcox
Loss Contingencies [Line Items]
Allocation of fault to plaintiff							30.00%
Allocation of fault							70.00%
Compensatory damages							$ 7,000,000
Compensatory damages (as adjusted)		$ 4,900,000	[1]			$ 4,900,000
Punitive damages							$ 8,500,000
Bond						5,000,000
Projected settlement expenses						$ 8,500,000
Wilcox | RJR Tobacco
Loss Contingencies [Line Items]
Allocation of fault		70.00%
[1]	Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.
[2]	The court did not apply comparative fault in the final judgment.

Commitments and Contingencies80

Commitments and Contingencies - Additional Information 13 (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2014	Nov. 30, 2014	Oct. 22, 2014	Oct. 20, 2014	Oct. 10, 2014	Aug. 29, 2014	Aug. 28, 2014	Aug. 27, 2014
Hubbird
Loss Contingencies [Line Items]
Allocation of fault to plaintiff									50.00%
Allocation of fault									50.00%
Compensatory damages									$ 3,000
Punitive damages							$ 25,000
Total damages		$ 28,000
Bond		$ 5,000
Irimi
Loss Contingencies [Line Items]
Allocation of fault to plaintiff								70.00%
Allocation of fault								14.50%
Compensatory damages								$ 3,100
Total damages								$ 453
Irimi | Lorillard Tobacco
Loss Contingencies [Line Items]
Allocation of fault	15.00%							14.50%
Total damages								$ 453
Irimi | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault								1.00%
Total damages								$ 31
Lourie
Loss Contingencies [Line Items]
Allocation of fault to plaintiff						63.00%
Allocation of fault						3.00%
Compensatory damages						$ 1,370
Bond			$ 41
Lourie | Lorillard Tobacco
Loss Contingencies [Line Items]
Allocation of fault	7.00%					7.00%
Bond			$ 96
Lourie | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault						27.00%
Kerrivan
Loss Contingencies [Line Items]
Allocation of fault to plaintiff					19.00%
Allocation of fault					31.00%
Compensatory damages					$ 15,800
Punitive damages				$ 9,600
Kerrivan | Other Defendant
Loss Contingencies [Line Items]
Allocation of fault					50.00%
Punitive damages				$ 15,700

Commitments and Contingencies81

Commitments and Contingencies - Additional Information 14 (Detail)

Oct. 31, 1997USD ($)

Jul. 06, 2016USD ($)

Jul. 01, 2016USD ($)

Jun. 30, 2016USD ($)LegalMatter

May 27, 2016USD ($)

May 25, 2016USD ($)

May 20, 2016USD ($)

May 19, 2016USD ($)

May 17, 2016USD ($)

May 16, 2016USD ($)

May 12, 2016USD ($)

May 11, 2016USD ($)

May 09, 2016USD ($)

Apr. 29, 2016USD ($)

Apr. 27, 2016USD ($)

Apr. 26, 2016USD ($)

Apr. 22, 2016USD ($)

Apr. 21, 2016USD ($)

Apr. 13, 2016USD ($)

Mar. 31, 2016USD ($)

Feb. 29, 2016USD ($)

Feb. 13, 2016USD ($)

Feb. 12, 2016USD ($)

Jan. 26, 2016USD ($)

Jan. 12, 2016USD ($)

Jan. 04, 2016USD ($)

Dec. 31, 2015USD ($)

Dec. 22, 2015USD ($)

Dec. 18, 2015USD ($)

Dec. 09, 2015USD ($)

Nov. 18, 2015USD ($)

Nov. 17, 2015USD ($)

Oct. 06, 2015USD ($)

Oct. 02, 2015USD ($)

Sep. 30, 2015USD ($)

Sep. 11, 2015USD ($)

Sep. 08, 2015USD ($)

Sep. 01, 2015USD ($)

Aug. 31, 2015USD ($)

Aug. 07, 2015USD ($)

Aug. 06, 2015USD ($)

Jul. 17, 2015USD ($)

Jul. 16, 2015USD ($)

Jul. 13, 2015USD ($)

Jun. 30, 2015USD ($)

Jun. 18, 2015USD ($)

May 31, 2015USD ($)

Apr. 21, 2015USD ($)

Apr. 17, 2015USD ($)

Mar. 26, 2015USD ($)

Mar. 25, 2015USD ($)

Mar. 23, 2015USD ($)

Feb. 28, 2015USD ($)

Feb. 26, 2015USD ($)

Feb. 24, 2015USD ($)

Feb. 12, 2015USD ($)

Feb. 11, 2015USD ($)

Jan. 29, 2015USD ($)

Nov. 21, 2014USD ($)

Nov. 18, 2014USD ($)

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 196,144,790

Punitive damages - adjusted

201,403,075

Schleider

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

30.00%

Allocation of fault

70.00%

Compensatory damages

$ 21,000,000

Compensatory damages (as adjusted)

$ 14,700,000

[1],[2]

$ 14,700,000

Bond

$ 5,000,000

Schleider | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

70.00%

Perrotto

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

49.00%

Allocation of fault

20.00%

Compensatory damages

$ 4,100,000

Compensatory damages (as adjusted)

[1]

$ 1,063,000

Total damages

$ 818,000

Perrotto | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

20.00%

Perrotto | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

6.00%

6.00%

Total damages

$ 245,000

Perrotto | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

25.00%

Ellen Gray

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

50.00%

Allocation of fault

50.00%

Compensatory damages

$ 6,000,000

Compensatory damages (as adjusted)

[1]

$ 3,000,000

Total damages

$ 3,000,000

Punitive damages

$ 0

Ellen Gray | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

50.00%

Sowers

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

50.00%

Allocation of fault

50.00%

Compensatory damages

$ 4,250,000

Compensatory damages (as adjusted)

[1]

$ 2,125,000

Total damages

$ 2,130,000

Punitive damages

$ 0

Sowers | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

50.00%

Caprio

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

40.00%

Compensatory damages (as adjusted)

[1]

$ 167,700

Economic damages

$ 559,000

Caprio | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

20.00%

20.00%

Caprio | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

10.00%

10.00%

Caprio | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

30.00%

Zamboni

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

60.00%

Allocation of fault

30.00%

Compensatory damages

$ 340,000

Compensatory damages (as adjusted)

[1]

$ 102,000

Punitive damages

$ 0

Zamboni | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

Zamboni | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

10.00%

Pollari

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

15.00%

Allocation of fault

42.50%

Compensatory damages

$ 4,250,000

$ 10,000,000

Compensatory damages (as adjusted)

$ 4,250,000

[1]

$ 10,000,000

Bond

2,500,000

Punitive damages

$ 1,500,000

1,500,000

Punitive damages - adjusted

$ 1,500,000

$ 1,500,000

Pollari | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

43.00%

Pollari | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

42.50%

Gore

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

54.00%

Compensatory damages

$ 2,000,000

Compensatory damages (as adjusted)

[1]

$ 460,000

Bond

$ 460,000

Total damages

460,000

Gore | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

23.00%

23.00%

Gore | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

23.00%

Ryan

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

35.00%

Allocation of fault

65.00%

Compensatory damages

$ 21,500,000

Compensatory damages (as adjusted)

$ 13,975,000

[1]

$ 14,000,000

$ 21,500,000

Bond

$ 5,000,000

Punitive damages

$ 25,000,000

Punitive damages - adjusted

$ 25,000,000

$ 25,000,000

$ 25,000,000

Ryan | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

65.00%

Hardin

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

87.00%

Allocation of fault

13.00%

Compensatory damages

$ 776,000

Compensatory damages (as adjusted)

[1]

$ 100,880

Total damages

$ 100,880

Punitive damages

$ 0

Hardin | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

13.00%

Mc Coy

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

35.00%

Compensatory damages

$ 1,500,000

Compensatory damages (as adjusted)

$ 675,000

[1]

$ 1,500,000

Bond

$ 3,350,000

Punitive damages

$ 3,000,000

Punitive damages - adjusted

$ 6,000,000

$ 3,000,000

Mc Coy | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

25.00%

25.00%

Compensatory damages

370,000

Punitive damages

3,000,000

Mc Coy | Lorillard Tobacco

Loss Contingencies [Line Items]

Allocation of fault

20.00%

20.00%

Compensatory damages

300,000

Punitive damages

3,000,000

Mc Coy | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

20.00%

Compensatory damages

300,000

Punitive damages

$ 3,000,000

Block

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

50.00%

Compensatory damages

$ 463,000

$ 1,030,000

Compensatory damages (as adjusted)

$ 463,000

[1]

926,000

Bond

1,300,000

Punitive damages

$ 800,000

$ 800,000

Punitive damages - adjusted

$ 800,000

800,000

Block | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

50.00%

50.00%

Lewis

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

75.00%

Compensatory damages

$ 750,000

Compensatory damages (as adjusted)

[1]

$ 187,500

Bond

$ 187,500

Total damages

$ 187,500

Lewis | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

25.00%

25.00%

Cooper

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

50.00%

Compensatory damages

$ 1,200,000

$ 4,500,000

Compensatory damages (as adjusted)

[1]

$ 1,200,000

Bond

1,200,000

Cooper | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

40.00%

40.00%

Cooper | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

10.00%

Duignan

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

33.00%

Compensatory damages

$ 6,000,000

Compensatory damages (as adjusted)

$ 2,690,000

[1]

6,000,000

Bond

$ 2,300,000

Punitive damages - adjusted

$ 2,500,000

Duignan | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

Punitive damages

$ 2,500,000

Punitive damages - adjusted

$ 2,500,000

Duignan | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

37.00%

Punitive damages

$ 3,500,000

Punitive damages - adjusted

$ 3,500,000

O'Hara

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

15.00%

Compensatory damages

$ 14,700,000

Compensatory damages (as adjusted)

$ 14,700,000

[1]

14,700,000

Bond

5,000,000

Punitive damages

$ 20,000,000

Punitive damages - adjusted

$ 20,000,000

$ 20,000,000

O'Hara | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

85.00%

85.00%

Marchese

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

55.00%

Compensatory damages

$ 450,000

$ 1,000,000

Compensatory damages (as adjusted)

[1],[2]

$ 225,000

Bond

$ 475,000

Punitive damages

250,000

$ 250,000

Punitive damages - adjusted

$ 250,000

Marchese | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

22.50%

22.50%

Marchese | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

22.50%

Barbose

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

15.00%

Compensatory damages

$ 10,000,000

Compensatory damages (as adjusted)

[1]

$ 5,000,000

Bond

$ 2,500,000

Punitive damages

$ 500,000

Punitive damages - adjusted

$ 500,000

Barbose | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

42.50%

Barbose | R J R Tobacco Indemnitee Or Both

Loss Contingencies [Line Items]

Allocation of fault

42.50%

Barbose | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

42.50%

Monroe

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

42.00%

Allocation of fault

58.00%

Compensatory damages

$ 11,000,000

Compensatory damages (as adjusted)

[1]

$ 6,380,000

Bond

$ 5,000,000

Monroe | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

58.00%

Monroe | R J R Tobacco Indemnitee Or Both

Loss Contingencies [Line Items]

Compensatory damages

$ 6,380,000

Ledoux

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

6.00%

Compensatory damages

$ 10,000,000

Compensatory damages (as adjusted)

$ 5,000,000

[1]

$ 10,000,000

Bond

$ 5,000,000

Punitive damages

12,500,000

Punitive damages - adjusted

$ 12,500,000

$ 12,500,000

Ledoux | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

47.00%

47.00%

Ledoux | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

47.00%

Ewing

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

98.00%

Allocation of fault

2.00%

Compensatory damages

$ 240,000

Compensatory damages (as adjusted)

[1]

$ 4,800

Ewing | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

2.00%

Ewing | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

0.00%

Ahrens

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

32.00%

Compensatory damages

$ 9,000,000

Compensatory damages (as adjusted)

[1]

$ 5,800,000

Bond

$ 2,500,000

Punitive damages

$ 2,500,000

Punitive damages - adjusted

$ 2,500,000

Ahrens | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

44.00%

44.00%

Ahrens | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

24.00%

Turner

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

20.00%

20.00%

Compensatory damages

$ 3,000,000

$ 3,000,000

Compensatory damages (as adjusted)

[1]

2,400,000

Punitive damages

10,000,000

$ 10,000,000

Punitive damages - adjusted

$ 10,000,000

Turner | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

80.00%

80.00%

Compensatory damages

2,400,000

Punitive damages

$ 10,000,000

Enochs

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

22.00%

22.00%

Compensatory damages

$ 21,000,000

$ 13,900,000

$ 21,000,000

Compensatory damages (as adjusted)

[1]

13,860,000

Bond

$ 3,500,000

Punitive damages

6,250,000

$ 6,250,000

$ 6,250,000

Punitive damages - adjusted

$ 6,250,000

Enochs | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

66.00%

66.00%

Enochs | Other Defendant

Loss Contingencies [Line Items]

Allocation of fault

12.00%

12.00%

Dion

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

25.00%

25.00%

Compensatory damages

$ 12,000,000

$ 12,000,000

Compensatory damages (as adjusted)

[1]

12,000,000

Punitive damages

30,000

$ 30,000

Punitive damages - adjusted

$ 30,000

Dion | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

Nally

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

25.00%

25.00%

Compensatory damages

$ 6,000,000

$ 6,000,000

Compensatory damages (as adjusted)

[1],[2]

6,000,000

Punitive damages

12,000,000

$ 12,000,000

Punitive damages - adjusted

$ 12,000,000

Nally | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

75.00%

75.00%

Compensatory damages

$ 6,000,000

Punitive damages

$ 12,000,000

McCabe

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

70.00%

70.00%

Compensatory damages

$ 5,000,000

$ 5,000,000

Compensatory damages (as adjusted)

[1]

1,500,000

Punitive damages

6,500,000

$ 6,500,000

Punitive damages - adjusted

$ 6,500,000

McCabe | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

30.00%

30.00%

Sermons

Loss Contingencies [Line Items]

Compensatory damages (as adjusted)

[1]

$ 3,250

Punitive damages - adjusted

$ 17,075

Sermons | Subsequent Event

Loss Contingencies [Line Items]

Allocation of fault to plaintiff

80.00%

Compensatory damages

$ 65,000

Sermons | RJR Tobacco

Loss Contingencies [Line Items]

Allocation of fault

5.00%

Sermons | RJR Tobacco | Subsequent Event

Loss Contingencies [Line Items]

Allocation of fault

5.00%

Compensatory damages

$ 65,000

Punitive damages

$ 17,075

Sermons | Other Defendant | Subsequent Event

Loss Contingencies [Line Items]

Allocation of fault

15.00%

Punitive damages

$ 51,225

Broin

Loss Contingencies [Line Items]

Litigation settlement, amount

$ 300,000,000

Annual installment of settlement

100,000,000

Fees and expenses

49,000,000

Broin | RJR Tobacco

Loss Contingencies [Line Items]

Litigation settlement, amount

86,000,000

Broin | Brown And Williamson Holdings Inc.

Loss Contingencies [Line Items]

Litigation settlement, amount

31,000,000

Broin | Lorillard Tobacco

Loss Contingencies [Line Items]

Litigation settlement, amount

$ 57,000,000

Broin II | Florida

Loss Contingencies [Line Items]

Lawsuits pending | LegalMatter

2,473

[1]

Unless otherwise noted, compensatory damages in these cases are adjusted to reflect the jury’s allocation of comparative fault. Punitive damages are not so adjusted. The amounts listed above do not include attorneys’ fees or statutory interest that may apply to the judgments and such fees and interest may be material.

[2]

The court did not apply comparative fault in the final judgment.

Commitments and Contingencies82

Commitments and Contingencies - Additional Information 15 (Detail)	Oct. 01, 2006USD ($)	Nov. 30, 1998LegalMatter	Jun. 30, 2016USD ($)LegalMatterCase	Jun. 30, 2016USD ($)LegalMatterCase	Jun. 30, 2015LegalMatter	Nov. 06, 2013USD ($)	Sep. 13, 2013USD ($)	Mar. 31, 2003USD ($)	Dec. 31, 1999USD ($)
Loss Contingencies [Line Items]
Number of cases pending | LegalMatter			286	286	262
Claims resolved, Number | LegalMatter		4
Number of cases pending in state court | LegalMatter			232	232
Filter Cases | Lorillard Tobacco and Lorillard, Inc.
Loss Contingencies [Line Items]
Number of cases pending | Case			76	76
Filter Cases | Lorillard Tobacco
Loss Contingencies [Line Items]
Litigation settlement, amount				$ 43,700,000
Claims resolved, Number | LegalMatter				160
Light Case | Philip Morris
Loss Contingencies [Line Items]
Compensatory damages								$ 7,100,000,000
Punitive damages								$ 3,000,000,000
Center for Environmental Health v. NJoy, Inc. | R. J. Reynolds Vapor Co.
Loss Contingencies [Line Items]
Litigation settlement, amount			$ 94,750
Sateriale | Camel Cash Cases
Loss Contingencies [Line Items]
Fees and expenses	$ 4,750,000
Parsons
Loss Contingencies [Line Items]
Judgment sought against each defendant			1,000,000	$ 1,000,000
De Lisle | Filter Cases
Loss Contingencies [Line Items]
Compensatory damages							$ 8,000,000
De Lisle | Filter Cases | Hollingsworth & Vose
Loss Contingencies [Line Items]
Percentage of compensatory damages							22.00%
De Lisle | Filter Cases | Other Defendant
Loss Contingencies [Line Items]
Percentage of compensatory damages							56.00%
De Lisle | Filter Cases | Lorillard Tobacco
Loss Contingencies [Line Items]
Compensatory damages						$ 3,520,000
Percentage of compensatory damages							22.00%
United States v. Philip Morris USA Inc | U.S. Department of Justice Case
Loss Contingencies [Line Items]
Disgorgement charges sought									$ 280,000,000,000
DOJ
Loss Contingencies [Line Items]
Accrued estimated cost for corrective communication			$ 20,000,000
State Settlement Agreements
Loss Contingencies [Line Items]
Number of cases pending in state court | Case			28	28
UNITED STATES
Loss Contingencies [Line Items]
Number of cases pending | LegalMatter			269	269
UNITED STATES | Class Action
Loss Contingencies [Line Items]
Number of cases pending | LegalMatter			23	23

Commitments and Contingencies R

Commitments and Contingencies Related to Settlements (Detail) - USD ($) $ in Millions		6 Months Ended	12 Months Ended
		Jun. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
2,014
Master Settlement Agreement:
Annual Payments	[1]			$ 8,004
Total				9,364
Settlement expenses	[1],[2]	$ 1,917
Settlement cash payments	[1],[2]	1,985
2,015
Master Settlement Agreement:
Annual Payments	[1]		$ 8,004
Total			9,364
Settlement expenses	[1],[2]	2,403
Settlement cash payments	[1],[2]	2,166
2016 and thereafter
Master Settlement Agreement:
Annual Payments	[1]	8,004
Total		9,364
2016 | Minimum
Master Settlement Agreement:
Projected settlement expenses	[1],[2]	2,800
Projected settlement cash payments	[1],[2]	3,000
2017 | Minimum
Master Settlement Agreement:
Projected settlement expenses	[1],[2]	3,100
Projected settlement cash payments	[1],[2]	2,800
2018 | Minimum
Master Settlement Agreement:
Projected settlement expenses	[1],[2]	3,100
Projected settlement cash payments	[1],[2]	3,100
2019 and thereafter | Minimum
Master Settlement Agreement:
Projected settlement expenses	[1],[2]	3,300
Projected settlement cash payments	[1],[2]	3,100
Mississippi | 2014
First Four States' Settlements:
Annual Settlement Payment	[1]			136
Mississippi | 2015
First Four States' Settlements:
Annual Settlement Payment	[1]		136
Mississippi | 2016 and thereafter
First Four States' Settlements:
Annual Settlement Payment	[1]	136
Florida | 2014
First Four States' Settlements:
Annual Settlement Payment	[1]			440
Florida | 2015
First Four States' Settlements:
Annual Settlement Payment	[1]		440
Florida | 2016 and thereafter
First Four States' Settlements:
Annual Settlement Payment	[1]	440
Texas | 2014
First Four States' Settlements:
Annual Settlement Payment	[1]			580
Texas | 2015
First Four States' Settlements:
Annual Settlement Payment	[1]		580
Texas | 2016 and thereafter
First Four States' Settlements:
Annual Settlement Payment	[1]	580
Minnesota | 2014
First Four States' Settlements:
Annual Settlement Payment	[1]			$ 204
Minnesota | 2015
First Four States' Settlements:
Annual Settlement Payment	[1]		$ 204
Minnesota | 2016 and thereafter
First Four States' Settlements:
Annual Settlement Payment	[1]	$ 204
[1]	Subject to adjustments for changes in sales volume, inflation, operating profit and other factors. Payments are allocated among the companies on the basis of relative market share or other methods. For further information, see “— State Settlement Agreements—Enforcement and Validity; Adjustments” below.
[2]	The amounts above reflect the impact of the Term Sheet and the NY State Settlement described below under “— State Settlement Agreements—Enforcement and Validity; Adjustments – Partial Settlement of Certain NPM Adjustment Claims.”

Commitments and Contingencies84

Commitments and Contingencies - Additional Information 16 (Detail) $ in Millions	Nov. 03, 2011	Oct. 31, 2015USD ($)	Sep. 30, 2013USD ($)	Dec. 31, 2012	Jan. 31, 2009State	Jun. 30, 2016USD ($)Case	Dec. 31, 2006State	May 31, 2006USD ($)	Nov. 30, 1998State
Loss Contingencies [Line Items]
Percentage of Allocable shares				49.87%
Number of states involved in MSA | State									46
NPM Adjustment Claim For 2003
Loss Contingencies [Line Items]
Number of states seeking declaratory orders for Qualifying Statuses | State							37
Number of states in arbitration for diligent enforcement | State							52
Courts deciding whether dispute is arbitrable | Case						47
Percentage of Allocable shares					90.00%
Percentage of Reduction in Ultimate Liability					20.00%
Number of states involved in MSA | State					45
Combined allocable shares percentage maximum	14.00%
Collectively allocable shares percentage			14.68%
NPM Adjustment Claim For 2003 | Maximum
Loss Contingencies [Line Items]
Courts deciding whether dispute is arbitrable | Case						48
NPM Adjustment Claim For 2003 | Lorillard Tobacco
Loss Contingencies [Line Items]
2006 MSA Disputed Payment						$ 109
NPM Adjustment Claim For 2003 | RJR Tobacco
Loss Contingencies [Line Items]
2006 MSA Disputed Payment						$ 615
Florida
Loss Contingencies [Line Items]
Payment Sought Under State Settlement Agreement								$ 12.4
Interest Payment Sought Under State Settlement Agreement								$ 17
Indiana And Kentucky | NPM Adjustment Claim For 2003
Loss Contingencies [Line Items]
Collectively allocable shares percentage			3.80%
PANAMA | Lorillard Tobacco
Loss Contingencies [Line Items]
Reduction in recovery from claims due to modification of judgment reduction method			$ 9.5
PANAMA | RJR Tobacco
Loss Contingencies [Line Items]
Reduction in recovery from claims due to modification of judgment reduction method			54
Missouri | NPM Adjustment Claim For 2003 | Lorillard Tobacco
Loss Contingencies [Line Items]
Reduction in recovery from claims due to modification of judgment reduction method			3.8
Missouri | NPM Adjustment Claim For 2003 | RJR Tobacco
Loss Contingencies [Line Items]
Reduction in recovery from claims due to modification of judgment reduction method			$ 21.4
Maryland | NPM Adjustment Claim For 2003 | Lorillard Tobacco
Loss Contingencies [Line Items]
Reduction in recovery from claims due to modification of judgment reduction method		$ 3.7
Maryland | NPM Adjustment Claim For 2003 | RJR Tobacco
Loss Contingencies [Line Items]
Reduction in recovery from claims due to modification of judgment reduction method		$ 21.2

Commitments and Contingencies85

Commitments and Contingencies - Additional Information 17 (Detail)	Oct. 31, 2015USD ($)	Oct. 20, 2015State	Dec. 31, 2012	Jan. 31, 2009	Jun. 30, 2016USD ($)Plaintiff	Jun. 30, 2015USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)	May 18, 2016USD ($)	Feb. 17, 2016USD ($)	Jun. 26, 2014State
Loss Contingencies [Line Items]
NPM Adjustment credits	$ 290,000,000
Arbitration Panel ruling					$ 0
NPM Adjustments remaining after settlements					$ 26,000,000
Percentage of Allocable shares			49.87%
Number of jurisdictions that have joined the settlement | State											24
Total Cost of FETRA buyout								$ 9,900,000,000
Attorneys fees and expenses payable									$ 215,000
Puerto Rico subsidiaries
Loss Contingencies [Line Items]
Collectively allocable share of settlement percentage					42.00%
RJR Tobacco
Loss Contingencies [Line Items]
NPM Adjustments disputed, 2015							$ 481,000,000
RJR Tobacco and Santa Fe
Loss Contingencies [Line Items]
NPM Adjustment credits					$ 0	$ 70,000,000	93,000,000
Santa Fe
Loss Contingencies [Line Items]
NPM Adjustments disputed					67,000,000
NPM Adjustments disputed, 2015							18,000,000
NPM Adjustment Claim For 2003
Loss Contingencies [Line Items]
Arbitration Panel ruling					$ 108,000,000
Percentage of Allocable shares				90.00%
NPM Adjustment Claim For 2009 | RJR Tobacco
Loss Contingencies [Line Items]
Percentage of amount to Fund States' Antitrust/Consumer Protection Tobacco					47.00%
NPM Adjustment Claim For 2004 | RJR Tobacco and Lorillard Tobacco
Loss Contingencies [Line Items]
Arbitration Panel ruling					$ 251,000,000
State Settlement Agreements | Kentucky And Indiana
Loss Contingencies [Line Items]
Percentage of Allocable shares					49.87%
State Settlement Agreements | New York
Loss Contingencies [Line Items]
Collectively allocable share of settlement percentage		12.76%
State Settlement Agreements | RJR Tobacco | New York
Loss Contingencies [Line Items]
Collectively allocable share of settlement percentage		62.63%
Number of jurisdictions that have joined the settlement | State		25
JTI Judgment
Loss Contingencies [Line Items]
Judgment Entered Against JTI in Brazil That JTI Believes RJR and RJR Tobacco Liable For					$ 1,850,000
West Virginia IPIC
Loss Contingencies [Line Items]
Number of plaintiffs | Plaintiff					7
Loss contingency period of inaction					15 years
FETRA Buyout
Loss Contingencies [Line Items]
FETRA payable to Quota tobacco holders								9,600,000,000
Liquidation of Quota tobacco stock								$ 290,000,000
Assessment expiry date								Sep. 30, 2014
Share of FETRA buyout					$ 2,500,000,000
Corwin
Loss Contingencies [Line Items]
Plaintiff request for attorney's fees and costs										$ 415,000
Lorillard Tobacco
Loss Contingencies [Line Items]
Arbitration Panel ruling					$ 19,000,000
NPM Adjustments disputed, 2015							$ 41,000,000
Lorillard Tobacco | NPM Adjustment Claim For 2009
Loss Contingencies [Line Items]
Percentage of amount to Fund States' Antitrust/Consumer Protection Tobacco					20.00%

Commitments and Contingencies86

Commitments and Contingencies (Details 1) (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2016USD ($)
State Settlement Payment Expense [Line Items]
Year for which NPM Adjustment calculated year one	2,004
Year for which NPM Adjustment calculated year two	2,005
Year for which NPM Adjustment calculated year three	2,006
Year for which NPM Adjustment calculated year four	2,007
Year for which NPM Adjustment Calculated year five	2,008
Year for which NPM Adjustment calculated year six	2,009
Year for which NPM Adjustment calculated year seven	2,010
Year for which NPM Adjustment calculated year eight	2,011
Year for which NPM Adjustment calculated year nine	2,012
Year for which NPM Adjustment calculated year ten	2,013
Year for which NPM Adjustment calculated year eleven	2,014
Lorillard Tobacco
State Settlement Payment Expense [Line Items]
NPM Adjustments disputed, 2004	$ 111
NPM Adjustments disputed, 2005	76
NPM Adjustments disputed, 2006	73
NPM Adjustments disputed, 2007	83
NPM Adjustments disputed, 2008	104
NPM Adjustments disputed, 2009	107
NPM Adjustments disputed, 2010	119
NPM Adjustments disputed, 2011	88
NPM Adjustments disputed, 2012	96
NPM Adjustments disputed, 2013	91
NPM Adjustments disputed, 2014	92
NPM Adjustments remaining after settlements, 2004	41
NPM Adjustments remaining after settlements, 2005	29
NPM Adjustments remaining after settlements, 2006	27
NPM Adjustments remaining after settlements, 2007	32
NPM Adjustments remaining after settlements, 2008	40
NPM Adjustments remaining after settlements, 2009	41
NPM Adjustments remaining after settlements, 2010	46
NPM Adjustments remaining after settlements, 2011	34
NPM Adjustments remaining after settlements, 2012	37
NPM Adjustments remaining after settlements, 2013	35
NPM Adjustments remaining after settlements, 2014	36
RJR Tobacco
State Settlement Payment Expense [Line Items]
NPM Adjustments disputed, 2004	562
NPM Adjustments disputed, 2005	445
NPM Adjustments disputed, 2006	419
NPM Adjustments disputed, 2007	435
NPM Adjustments disputed, 2008	468
NPM Adjustments disputed, 2009	472
NPM Adjustments disputed, 2010	470
NPM Adjustments disputed, 2011	422
NPM Adjustments disputed, 2012	428
NPM Adjustments disputed, 2013	455
NPM Adjustments disputed, 2014	430
NPM Adjustments remaining after settlements, 2004	210
NPM Adjustments remaining after settlements, 2005	166
NPM Adjustments remaining after settlements, 2006	156
NPM Adjustments remaining after settlements, 2007	166
NPM Adjustments remaining after settlements, 2008	179
NPM Adjustments remaining after settlements, 2009	180
NPM Adjustments remaining after settlements, 2010	179
NPM Adjustments remaining after settlements, 2011	161
NPM Adjustments remaining after settlements, 2012	163
NPM Adjustments remaining after settlements, 2013	173
NPM Adjustments remaining after settlements, 2014	$ 164

Shareholders' Equity (Detail)

Shareholders' Equity (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Stockholders Equity Note Disclosure [Line Items]
Beginning Balance			$ 18,252	$ 4,522
Net income	$ 796	$ 1,928	4,361	2,317
Retirement benefits, net of tax expense (benefit)	39	(20)	33	(26)
Unrealized gain on long-term investments, net of tax expense	4	0	5	0
Realized gain on long-term investments, net of tax of $1	0	0	(2)	0
Realized loss on hedging instruments, net of tax expense			11	1
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	(5)	10	17	(17)
Dividends			(1,204)	(718)
Issuance of additional shares as Merger consideration				7,555
Issuance of additional shares for BAT Share Purchase				4,673
Common stock repurchased			(149)	(40)
Equity incentive award plan and stock-based compensation			50	44
Excess tax benefit on stock-based compensation plans			26	15
Ending Balance	21,400	18,326	21,400	18,326
Paid-in Capital
Stockholders Equity Note Disclosure [Line Items]
Beginning Balance			18,402	6,200
Issuance of additional shares as Merger consideration				7,555
Issuance of additional shares for BAT Share Purchase				4,673
Common stock repurchased			(149)	(40)
Equity incentive award plan and stock-based compensation			50	44
Excess tax benefit on stock-based compensation plans			26	15
Ending Balance	18,329	18,447	18,329	18,447
(Accumulated Deficit) Retained Earnings
Stockholders Equity Note Disclosure [Line Items]
Beginning Balance			188	(1,314)
Net income			4,361	2,317
Dividends			(1,204)	(718)
Ending Balance	3,345	285	3,345	285
Accumulated Other Comprehensive Loss
Stockholders Equity Note Disclosure [Line Items]
Beginning Balance			(338)	(364)
Retirement benefits, net of tax expense (benefit)			33	(26)
Unrealized gain on long-term investments, net of tax expense			5
Realized gain on long-term investments, net of tax of $1			(2)
Realized loss on hedging instruments, net of tax expense			11	1
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)			17	(17)
Ending Balance	$ (274)	$ (406)	$ (274)	$ (406)

Shareholders' Equity (Parenthet

Shareholders' Equity (Parenthetical) (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Equity [Abstract]
Tax expense (benefit), retirement benefits	$ 25	$ (12)	$ 21	$ (16)
Tax expense (benefit), unrealized gain on long-term investments	2		2
Tax expense, realized gain on long-term investments			1
Tax expense, realized loss on hedging instruments			6
Tax expense (benefit), cumulative translation adjustment and other	$ (2)	$ 2	$ 9	$ (10)
Dividends, per share	$ 0.42	$ 0.335	$ 0.84	$ 0.67

Components of Accumulated Other

Components of Accumulated Other Comprehensive Loss Net of Tax (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ (338)	$ (364)
Other comprehensive income (losses) before reclassifications	40	(30)
Amounts reclassified from accumulated other comprehensive loss	24	(12)
Net current-period other comprehensive income (loss)	64	(42)
Ending balance	(274)	(406)
Accumulated Defined Benefit Plans Adjustment
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(244)	(294)
Other comprehensive income (losses) before reclassifications	45	(13)
Amounts reclassified from accumulated other comprehensive loss	(12)	(13)
Net current-period other comprehensive income (loss)	33	(26)
Ending balance	(211)	(320)
Accumulated Net Unrealized Investment Gain (Loss)
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(14)	(14)
Other comprehensive income (losses) before reclassifications	5
Amounts reclassified from accumulated other comprehensive loss	(2)
Net current-period other comprehensive income (loss)	3
Ending balance	(11)	(14)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(11)	(12)
Amounts reclassified from accumulated other comprehensive loss	11	1
Net current-period other comprehensive income (loss)	11	1
Ending balance		(11)
Accumulated Translation Adjustment and Other
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(69)	(44)
Other comprehensive income (losses) before reclassifications	(10)	(17)
Amounts reclassified from accumulated other comprehensive loss	27
Net current-period other comprehensive income (loss)	17	(17)
Ending balance	$ (52)	$ (61)

Reclassification Out of Accumul

Reclassification Out of Accumulated Other Comprehensive Loss and Affected Line Items in Condensed Consolidated Statement of Income (Detail) - USD ($) $ in Millions		Jun. 12, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold	[1]		$ (1,275)	$ (1,084)	$ (2,440)	$ (1,934)
Selling, general and administrative expenses			(499)	(451)	(964)	(962)
Operating income			1,415	4,364	7,557	5,057
Other (income) expense, net			1	(20)	(251)	(3)
Interest and debt expense			152	105	326	196
Income before income taxes			1,266	4,239	6,985	4,859
Provision for income taxes			(470)	(2,311)	(2,624)	(2,542)
Gain on divestitures		$ 3,500		3,499	4,861	3,499
Net income			796	1,928	4,361	2,317
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Income before income taxes					17	1
Net income			(6)	(6)	24	(12)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			(5)	(6)	(10)	(11)
Selling, general and administrative expenses			(5)	(4)	(10)	(9)
Operating income			(10)	(10)	(20)	(20)
Provision for income taxes			4	3	8	7
Net income			$ (6)	(7)	(12)	(13)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other (income) expense, net					17
Interest and debt expense				$ 1		1
Provision for income taxes					(6)
Net income					11	$ 1
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Unrealized Investment Gain (Loss)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other (income) expense, net					(3)
Provision for income taxes					1
Net income					(2)
Reclassification out of Accumulated Other Comprehensive Income | Cumulative Translation Adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Gain on divestitures					$ 27
[1]	Excludes excise taxes of $1,120 million and $987 million for the three months ended June 30, 2016 and 2015, respectively; and $2,150 million and $1,827 million for the six months ended June 30, 2016 and 2015, respectively.

Shareholders' Equity - Addition

Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	May 05, 2016	Feb. 10, 2016	Nov. 30, 2011	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Shareholders Equity [Line Items]
Issuance of shares of RAI common stock on settlement						2,864,029
Cost of shares purchased that forfeited with respect to tax liabilities associated with restricted stock vesting						$ 56
Number of shares purchased that forfeited with respect to tax liabilities associated with restricted stock vesting under its LTIP						1,118,283
Cash dividend per share, declared				$ 0.42	$ 0.335	$ 0.84	$ 0.67
Dividends record date	Jun. 10, 2016	Mar. 10, 2016
Decrease in ownership percentage of RAI's common stock			25.00%
Common stock repurchased						$ 149	$ 40
Stock Repurchase Program
Shareholders Equity [Line Items]
Shares repurchased						1,817,846
Common stock repurchased						$ 93
Quarterly Dividend
Shareholders Equity [Line Items]
Cash dividend per share, declared	$ 0.42	$ 0.42
Annualized Dividend
Shareholders Equity [Line Items]
Cash dividend per share, declared	$ 1.68	$ 1.68

Stock Plans - Additional Inform

Stock Plans - Additional Information (Detail)	May 05, 2016shares	Mar. 01, 2016shares	Jan. 19, 2016shares	May 31, 2016	Jan. 31, 2016Grant$ / shares	Jun. 30, 2016$ / shares
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average grant date fair value outstanding					$ 46.93
Number of grants | Grant					2
Restricted Stock Units | Retention Grant
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for grant | shares			16,094
Restricted Stock Units | Retention Grant | Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting date			Dec. 15, 2018
Grant vesting percentage			100.00%
Restricted Stock Units | Make-whole Grant
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for grant | shares			47,210
Restricted Stock Units | Make-whole Grant | Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting date			Dec. 15, 2016
Grant vesting percentage			50.00%
Restricted Stock Units | Make-whole Grant | Tranche Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting date			Dec. 15, 2017
Grant vesting percentage			50.00%
Three Year Grant | Omnibus Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for grant | shares		1,071,544
Restricted stock unit award adjustment upper end of range		150.00%
Weighted average grant date fair value outstanding						$ 50.49
Cumulative dividend threshold						$ 5.04
Three Year Grant | Omnibus Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock unit award adjustment						50.00%
Three Year Grant | Restricted Stock Units | Omnibus Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting date		Mar. 1, 2019
One Year Grant | Omnibus Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock unit award adjustment upper end of range				200.00%
Weighted average grant date fair value outstanding						$ 53.93
Cumulative dividend threshold						$ 1.68
Number of shares granted | shares	164,841
Ending date of performance period				Apr. 30, 2017		Apr. 30, 2017
One Year Grant | Omnibus Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock unit award adjustment						50.00%
One Year Grant | Restricted Stock Units | Omnibus Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting date				May 1, 2017

Segment Information - Additiona

Segment Information - Additional Information (Detail) - USD ($) $ in Millions	Jan. 13, 2016	Jun. 12, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Proceeds from divestitures		$ 7,100	$ 5,015	$ 7,056
JTI Holding
Segment Reporting Information [Line Items]
Proceeds from divestitures	$ 5,000
NAS Brand | JTI Holding
Segment Reporting Information [Line Items]
Proceeds from divestitures	$ 5,000

Segment Information (Detail)

Segment Information (Detail) - USD ($) $ in Millions	Jun. 12, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Net sales		$ 3,195	$ 2,403	$ 6,112	$ 4,460
Operating income (loss)		1,415	4,364	7,557	5,057
Gain on divestitures	$ 3,500		3,499	4,861	3,499
Interest and debt expense		152	105	326	196
Interest income		(2)		(5)	(1)
Other (income) expense, net		(1)	20	251	3
Income before income taxes		1,266	4,239	6,985	4,859
Operating Segments | RJR Tobacco
Segment Reporting Information [Line Items]
Net sales		2,646	1,876	5,057	3,484
Operating income (loss)		1,216	727	2,323	1,315
Operating Segments | Santa Fe
Segment Reporting Information [Line Items]
Net sales		247	218	465	389
Operating income (loss)		133	125	256	217
Operating Segments | American Snuff
Segment Reporting Information [Line Items]
Net sales		232	218	448	419
Operating income (loss)		138	130	271	248
Operating Segments | All Other
Segment Reporting Information [Line Items]
Net sales		70	91	142	168
Operating income (loss)		(43)	(35)	(77)	(96)
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Operating income (loss)		$ (29)	$ (82)	$ (77)	$ (126)

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Detail) - BAT Affiliate - USD ($) $ in Millions	Mar. 31, 2017	Sep. 30, 2016	Jul. 31, 2016	Jan. 31, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 12, 2015
Related Party Transaction [Line Items]
Percentage of RAI's outstanding common stock					42.00%		42.00%		42.00%
Revenue percentage from related parties					2.00%	2.00%	2.00%	3.00%
Percentage of maximum purchase price							10.00%
Contract manufacturing amendment fee				$ 6
Scenario Forecast [Member] | RJR Tobacco
Related Party Transaction [Line Items]
Payment after amendment of contract	$ 82.2	$ 7.4	$ 89.6

Summary of Balances and Transac

Summary of Balances and Transactions (Detail) - USD ($) $ in Millions	Jun. 12, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Accounts receivable, related party		$ 33		$ 33		$ 38
Due to related party		2		2		9
Deferred revenue, related party		16		16		33
Other current liabilities		1,145		1,145		1,234
Net sales		54	$ 54	109	$ 136
BAT Share Purchase	$ 4,700				4,673
BAT Affiliate
Related Party Transaction [Line Items]
Accounts receivable, related party		33		33		38
Due to related party		2		2		9
Deferred revenue, related party		16		16		33
Other current liabilities						$ 2
Net sales		54	54	109	136
Purchases		$ 6	12	$ 8	14
BAT Share Purchase			$ 4,673		$ 4,673

RAI Guaranteed Unsecured Notes

RAI Guaranteed Unsecured Notes - Condensed Consolidating Financial Statements (Detail) $ in Billions	Jun. 30, 2016USD ($)
RAI
Condensed Financial Statements Captions [Line Items]
Aggregate principal amount of unsecured notes	$ 13.1

Condensed Consolidating Stateme

Condensed Consolidating Statements of Income (Detail) - USD ($) $ in Millions		Jun. 12, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Condensed Financial Statements Captions [Line Items]
Net sales	[1]		$ 3,141	$ 2,349	$ 6,003	$ 4,324
Net sales, related party			54	54	109	136
Net sales			3,195	2,403	6,112	4,460
Cost of products sold	[1]		1,275	1,084	2,440	1,934
Selling, general and administrative expenses			499	451	964	962
Gain on divestitures		$ (3,500)		(3,499)	(4,861)	(3,499)
Amortization expense			6	3	12	6
Operating income			1,415	4,364	7,557	5,057
Interest and debt expense			152	105	326	196
Interest income			(2)		(5)	(1)
Other (income) expense, net			(1)	20	251	3
Income before income taxes			1,266	4,239	6,985	4,859
Provision for income taxes			470	2,311	2,624	2,542
Net income			796	1,928	4,361	2,317
RAI
Condensed Financial Statements Captions [Line Items]
Selling, general and administrative expenses			6	43	22	62
Operating income			(6)	(43)	(22)	(62)
Interest and debt expense			149	98	323	189
Interest income			(21)	(28)	(47)	(47)
Other (income) expense, net				14	240	15
Income before income taxes			(134)	(127)	(538)	(219)
Provision for income taxes			(48)	(77)	(190)	(104)
Equity income from subsidiaries			882	1,978	4,709	2,432
Net income			796	1,928	4,361	2,317
Guarantors
Condensed Financial Statements Captions [Line Items]
Net sales			3,122	2,320	5,961	4,319
Net sales, related party			54	54	109	136
Net sales			3,176	2,374	6,070	4,455
Cost of products sold			1,254	1,082	2,403	1,951
Selling, general and administrative expenses			457	337	858	762
Gain on divestitures				(3,499)	(4,843)	(3,499)
Amortization expense			6	3	12	6
Operating income			1,459	4,451	7,640	5,235
Interest and debt expense			22	33	45	50
Interest income			(2)		(4)	(1)
Other (income) expense, net			(9)	(11)	(15)	(21)
Income before income taxes			1,448	4,429	7,614	5,207
Provision for income taxes			532	2,424	2,840	2,705
Equity income from subsidiaries			2	18	2	38
Net income			918	2,023	4,776	2,540
Guarantors | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Interest income			(1)	(1)	(2)	(2)
Other (income) expense, net			(10)	(11)	(20)	(21)
Income before income taxes			11	12	22	23
Equity income from subsidiaries			746	1,864	1,402	2,252
Net income			757	1,876	1,424	2,275
Non-Guarantors
Condensed Financial Statements Captions [Line Items]
Net sales			48	82	97	150
Net sales			48	82	97	150
Cost of products sold			52	53	95	123
Selling, general and administrative expenses			34	71	82	138
Gain on divestitures					(16)
Operating income			(38)	(42)	(64)	(111)
Interest and debt expense			2	2	4	4
Other (income) expense, net			(3)	7	4	(12)
Income before income taxes			(37)	(51)	(72)	(103)
Provision for income taxes			(14)	(36)	(26)	(59)
Net income			(23)	(15)	(46)	(44)
Non-Guarantors | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Net sales			557	524	1,081	958
Net sales			557	524	1,081	958
Cost of products sold			210	180	404	349
Selling, general and administrative expenses			(223)	33	(409)	73
Gain on divestitures				(5,390)	(4,861)	(5,390)
Amortization expense			1	1	3	3
Operating income			569	5,700	5,944	5,923
Interest and debt expense			22	27	48	42
Interest income			(1)		(1)
Other (income) expense, net			(4)	6	3	(12)
Income before income taxes			552	5,667	5,894	5,893
Provision for income taxes			193	2,075	2,162	2,157
Net income			359	3,592	3,732	3,736
RJR | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Net sales			2,626	1,875	5,009	3,496
Net sales, related party			54	54	109	136
Net sales			2,680	1,929	5,118	3,632
Cost of products sold			1,108	953	2,125	1,711
Selling, general and administrative expenses			714	375	1,349	827
Gain on divestitures				1,891		1,891
Amortization expense			5	2	9	3
Operating income			853	(1,292)	1,635	(800)
Interest and debt expense			3	9	3	14
Interest income			(1)		(3)	(1)
Other (income) expense, net			2		6
Income before income taxes			849	(1,301)	1,629	(813)
Provision for income taxes			325	313	652	489
Equity income from subsidiaries			220	3,449	404	3,527
Net income			744	1,835	1,381	2,225
Eliminations
Condensed Financial Statements Captions [Line Items]
Net sales			(29)	(53)	(55)	(145)
Net sales			(29)	(53)	(55)	(145)
Cost of products sold			(31)	(51)	(58)	(140)
Selling, general and administrative expenses			2		2
Gain on divestitures					(2)
Operating income				(2)	3	(5)
Interest and debt expense			(21)	(28)	(46)	(47)
Interest income			21	28	46	47
Other (income) expense, net			11	10	22	21
Income before income taxes			(11)	(12)	(19)	(26)
Equity income from subsidiaries			(884)	(1,996)	(4,711)	(2,470)
Net income			(895)	(2,008)	(4,730)	(2,496)
Eliminations | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Net sales			(42)	(50)	(87)	(130)
Net sales			(42)	(50)	(87)	(130)
Cost of products sold			(43)	(49)	(89)	(126)
Selling, general and administrative expenses			2		2
Operating income			(1)	(1)		(4)
Interest and debt expense			(22)	(29)	(48)	(49)
Interest income			22	29	48	49
Other (income) expense, net			11	11	22	21
Income before income taxes			(12)	(12)	(22)	(25)
Equity income from subsidiaries			(1,848)	(7,291)	(6,515)	(8,211)
Net income			$ (1,860)	$ (7,303)	$ (6,537)	$ (8,236)
[1]	Excludes excise taxes of $1,120 million and $987 million for the three months ended June 30, 2016 and 2015, respectively; and $2,150 million and $1,827 million for the six months ended June 30, 2016 and 2015, respectively.

Condensed Consolidating State99

Condensed Consolidating Statements of Comprehensive Income (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Condensed Financial Statements Captions [Line Items]
Net income (loss)	$ 796	$ 1,928	$ 4,361	$ 2,317
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	39	(20)	33	(26)
Unrealized gain on long-term investments, net of tax expense	4	0	5	0
Realized gain on long-term investments	0	0	(2)	0
Realized loss on hedging instruments	0	0	11	0
Amortization of realized loss on hedging instruments	0	1	0	1
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	(5)	10	17	(17)
Comprehensive income	834	1,919	4,425	2,275
RAI
Condensed Financial Statements Captions [Line Items]
Net income (loss)	796	1,928	4,361	2,317
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	39	(20)	33	(26)
Unrealized gain on long-term investments, net of tax expense	4		5
Realized gain on long-term investments			(2)
Realized loss on hedging instruments			11
Amortization of realized loss on hedging instruments		1		1
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	(5)	10	17	(17)
Comprehensive income	834	1,919	4,425	2,275
Guarantors
Condensed Financial Statements Captions [Line Items]
Net income (loss)	918	2,023	4,776	2,540
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	40	(17)	34	(23)
Unrealized gain on long-term investments, net of tax expense	4		5
Realized gain on long-term investments			(2)
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	(5)	10	17	(17)
Comprehensive income	957	2,016	4,830	2,500
Guarantors | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Net income (loss)	757	1,876	1,424	2,275
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	42	(14)	36	(19)
Unrealized gain on long-term investments, net of tax expense	4		5
Realized gain on long-term investments			(2)
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	(5)	10	17	(16)
Comprehensive income	798	1,872	1,480	2,240
Non-Guarantors
Condensed Financial Statements Captions [Line Items]
Net income (loss)	(23)	(15)	(46)	(44)
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	(1)	(1)	(1)	(1)
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	(7)	13	26	(27)
Comprehensive income	(31)	(3)	(21)	(72)
Non-Guarantors | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Net income (loss)	359	3,592	3,732	3,736
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	(3)	(5)	(3)	(5)
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	(5)	10	17	(17)
Comprehensive income	351	3,597	3,746	3,714
RJR | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Net income (loss)	744	1,835	1,381	2,225
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	44	(13)	38	(18)
Unrealized gain on long-term investments, net of tax expense	4		5
Realized gain on long-term investments			(2)
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	(4)	10	17	(17)
Comprehensive income	788	1,832	1,439	2,190
Eliminations
Condensed Financial Statements Captions [Line Items]
Net income (loss)	(895)	(2,008)	(4,730)	(2,496)
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	(39)	18	(33)	24
Unrealized gain on long-term investments, net of tax expense	(4)		(5)
Realized gain on long-term investments			2
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	12	(23)	(43)	44
Comprehensive income	(926)	(2,013)	(4,809)	(2,428)
Eliminations | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Net income (loss)	(1,860)	(7,303)	(6,537)	(8,236)
Other comprehensive income (loss), net of tax:
Retirement benefits, net of tax expense (benefit)	(83)	32	(71)	42
Unrealized gain on long-term investments, net of tax expense	(8)		(10)
Realized gain on long-term investments			4
Cumulative translation adjustment and other, net of tax (benefit) expense (2016 — $11; 2015 — $10)	14	(30)	(51)	50
Comprehensive income	$ (1,937)	$ (7,301)	$ (6,665)	$ (8,144)

Reclassification Out of Accu100

Reclassification Out of Accumulated Other Comprehensive Loss and Affected Line Items in Condensed Consolidating Statements of Income (Detail) - USD ($) $ in Millions		Jun. 12, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold	[1]		$ (1,275)	$ (1,084)	$ (2,440)	$ (1,934)
Selling, general and administrative expenses			(499)	(451)	(964)	(962)
Operating income			1,415	4,364	7,557	5,057
Other (income) expense, net			1	(20)	(251)	(3)
Interest and debt expense			152	105	326	196
Provision for income taxes			(470)	(2,311)	(2,624)	(2,542)
Net income			796	1,928	4,361	2,317
Gain on divestitures		$ 3,500		3,499	4,861	3,499
Income before income taxes			1,266	4,239	6,985	4,859
RAI
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Selling, general and administrative expenses			(6)	(43)	(22)	(62)
Operating income			(6)	(43)	(22)	(62)
Other (income) expense, net				(14)	(240)	(15)
Interest and debt expense			149	98	323	189
Provision for income taxes			48	77	190	104
Equity income from subsidiaries			882	1,978	4,709	2,432
Net income			796	1,928	4,361	2,317
Income before income taxes			(134)	(127)	(538)	(219)
Guarantors
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			(1,254)	(1,082)	(2,403)	(1,951)
Selling, general and administrative expenses			(457)	(337)	(858)	(762)
Operating income			1,459	4,451	7,640	5,235
Other (income) expense, net			9	11	15	21
Interest and debt expense			22	33	45	50
Provision for income taxes			(532)	(2,424)	(2,840)	(2,705)
Equity income from subsidiaries			2	18	2	38
Net income			918	2,023	4,776	2,540
Gain on divestitures				3,499	4,843	3,499
Income before income taxes			1,448	4,429	7,614	5,207
Guarantors | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other (income) expense, net			10	11	20	21
Equity income from subsidiaries			746	1,864	1,402	2,252
Net income			757	1,876	1,424	2,275
Income before income taxes			11	12	22	23
Non-Guarantors
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			(52)	(53)	(95)	(123)
Selling, general and administrative expenses			(34)	(71)	(82)	(138)
Operating income			(38)	(42)	(64)	(111)
Other (income) expense, net			3	(7)	(4)	12
Interest and debt expense			2	2	4	4
Provision for income taxes			14	36	26	59
Net income			(23)	(15)	(46)	(44)
Gain on divestitures					16
Income before income taxes			(37)	(51)	(72)	(103)
Non-Guarantors | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			(210)	(180)	(404)	(349)
Selling, general and administrative expenses			223	(33)	409	(73)
Operating income			569	5,700	5,944	5,923
Other (income) expense, net			4	(6)	(3)	12
Interest and debt expense			22	27	48	42
Provision for income taxes			(193)	(2,075)	(2,162)	(2,157)
Net income			359	3,592	3,732	3,736
Gain on divestitures				5,390	4,861	5,390
Income before income taxes			552	5,667	5,894	5,893
RJR | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			(1,108)	(953)	(2,125)	(1,711)
Selling, general and administrative expenses			(714)	(375)	(1,349)	(827)
Operating income			853	(1,292)	1,635	(800)
Other (income) expense, net			(2)		(6)
Interest and debt expense			3	9	3	14
Provision for income taxes			(325)	(313)	(652)	(489)
Equity income from subsidiaries			220	3,449	404	3,527
Net income			744	1,835	1,381	2,225
Gain on divestitures				(1,891)		(1,891)
Income before income taxes			849	(1,301)	1,629	(813)
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net income			(6)	(6)	24	(12)
Income before income taxes					17	1
Reclassification out of Accumulated Other Comprehensive Income | RAI
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Equity income from subsidiaries			(6)	(7)	13	(13)
Net income			(6)	(6)	24	(12)
Reclassification out of Accumulated Other Comprehensive Income | Guarantors
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net income			(6)	(7)	13	(13)
Reclassification out of Accumulated Other Comprehensive Income | Guarantors | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Equity income from subsidiaries			(6)	(7)	13	(13)
Net income			(6)	(7)	13	(13)
Reclassification out of Accumulated Other Comprehensive Income | Non-Guarantors
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net income					27
Reclassification out of Accumulated Other Comprehensive Income | Non-Guarantors | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net income				(1)	27	(1)
Reclassification out of Accumulated Other Comprehensive Income | RJR | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Equity income from subsidiaries				(1)	27	(1)
Net income			(6)	(7)	13	(13)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			(5)	(6)	(10)	(11)
Selling, general and administrative expenses			(5)	(4)	(10)	(9)
Operating income			(10)	(10)	(20)	(20)
Provision for income taxes			4	3	8	7
Net income			(6)	(7)	(12)	(13)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment | Guarantors
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			(5)	(6)	(10)	(11)
Selling, general and administrative expenses			(5)	(4)	(10)	(9)
Operating income			(10)	(10)	(20)	(20)
Provision for income taxes			4	3	8	7
Net income			(6)	(7)	(12)	(13)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment | Non-Guarantors | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold				(1)		(1)
Operating income				(1)		(1)
Net income				(1)		(1)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment | RJR | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			(5)	(5)	(10)	(10)
Selling, general and administrative expenses			(5)	(4)	(10)	(9)
Operating income			(10)	(9)	(20)	(19)
Provision for income taxes			4	3	8	7
Net income			(6)	(6)	(12)	(12)
Reclassification out of Accumulated Other Comprehensive Income | Cumulative Translation Adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Gain on divestitures					27
Reclassification out of Accumulated Other Comprehensive Income | Cumulative Translation Adjustment | RAI
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Equity income from subsidiaries			(6)		13
Reclassification out of Accumulated Other Comprehensive Income | Cumulative Translation Adjustment | Guarantors
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Equity income from subsidiaries					27
Reclassification out of Accumulated Other Comprehensive Income | Cumulative Translation Adjustment | Non-Guarantors
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Gain on divestitures					27
Reclassification out of Accumulated Other Comprehensive Income | Cumulative Translation Adjustment | Non-Guarantors | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Gain on divestitures					27
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other (income) expense, net					17
Interest and debt expense				1		1
Provision for income taxes					(6)
Net income					11	1
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | RAI
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other (income) expense, net					17
Interest and debt expense				1		1
Provision for income taxes					(6)
Net income					11
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Unrealized Investment Gain (Loss)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other (income) expense, net					(3)
Provision for income taxes					1
Net income					(2)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Unrealized Investment Gain (Loss) | Guarantors
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other (income) expense, net					(3)
Provision for income taxes					1
Net income					(2)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Unrealized Investment Gain (Loss) | RJR | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Other (income) expense, net					(3)
Provision for income taxes					1
Net income					(2)
Eliminations
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			31	51	58	140
Selling, general and administrative expenses			(2)		(2)
Operating income				(2)	3	(5)
Other (income) expense, net			(11)	(10)	(22)	(21)
Interest and debt expense			(21)	(28)	(46)	(47)
Equity income from subsidiaries			(884)	(1,996)	(4,711)	(2,470)
Net income			(895)	(2,008)	(4,730)	(2,496)
Gain on divestitures					2
Income before income taxes			(11)	(12)	(19)	(26)
Eliminations | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold			43	49	89	126
Selling, general and administrative expenses			(2)		(2)
Operating income			(1)	(1)		(4)
Other (income) expense, net			(11)	(11)	(22)	(21)
Interest and debt expense			(22)	(29)	(48)	(49)
Equity income from subsidiaries			(1,848)	(7,291)	(6,515)	(8,211)
Net income			(1,860)	(7,303)	(6,537)	(8,236)
Income before income taxes			(12)	(12)	(22)	(25)
Eliminations | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Equity income from subsidiaries				7		13
Net income			6	7	(40)	13
Eliminations | Reclassification out of Accumulated Other Comprehensive Income | RJR Tobacco
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Equity income from subsidiaries			12	15	(53)	27
Net income			12	$ 15	(53)	$ 27
Eliminations | Reclassification out of Accumulated Other Comprehensive Income | Cumulative Translation Adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Equity income from subsidiaries			$ 6		$ (40)
[1]	Excludes excise taxes of $1,120 million and $987 million for the three months ended June 30, 2016 and 2015, respectively; and $2,150 million and $1,827 million for the six months ended June 30, 2016 and 2015, respectively.

Condensed Consolidating Stat101

Condensed Consolidating Statements of Cash Flows (Detail) - USD ($) $ in Millions	Jun. 12, 2015	Jun. 30, 2016	Jun. 30, 2015
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		$ (725)	$ 448
Cash flows from (used in) investing activities:
Capital expenditures		(94)	(64)
Proceeds from settlement of short-term investments		159
Acquisition, net of cash acquired			(17,219)
Proceeds from divestitures	$ 7,100	5,015	7,056
Proceeds from settlement of long-term investments		23	1
Net cash flows from (used in) investing activities		5,103	(10,226)
Cash flows from (used in) financing activities:
Dividends paid on common stock		(1,113)	(712)
Repurchase of common stock		(149)	(40)
Early extinguishment of debt		(3,650)
Redemption premium for early extinguishment of debt		(119)
Make-whole premium for early extinguishment of debt		(88)
Proceeds from termination of interest rate swaps		66
Proceeds from BAT Share Purchase	$ 4,700		4,673
Debt issuance costs and financing fees		(7)	(64)
Issuance of long-term debt			8,975
Borrowings under revolving credit facility			1,400
Repayments of borrowings under revolving credit facility			(1,400)
Excess tax benefit on stock-based compensation plans		26	15
Net cash flows from (used in) financing activities		(5,034)	12,847
Effect of exchange rate changes on cash and cash equivalents		7	(22)
Net change in cash and cash equivalents		(649)	3,047
Cash and cash equivalents at beginning of period		2,567	966
Cash and cash equivalents at end of period		1,918	4,013
RAI
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		(1,012)	125
Cash flows from (used in) investing activities:
Acquisition, net of cash acquired			(18,278)
Proceeds from divestitures		5,015	7,056
Payment after amendment of contract		412	185
Other, net		260	(710)
Net cash flows from (used in) investing activities		5,687	(11,747)
Cash flows from (used in) financing activities:
Dividends paid on common stock		(1,113)	(712)
Repurchase of common stock		(149)	(40)
Early extinguishment of debt		(3,642)
Redemption premium for early extinguishment of debt		(118)
Make-whole premium for early extinguishment of debt		(88)
Proceeds from BAT Share Purchase			4,673
Debt issuance costs and financing fees		(7)	(64)
Issuance of long-term debt			8,975
Borrowings under revolving credit facility			1,400
Repayments of borrowings under revolving credit facility			(1,400)
Excess tax benefit on stock-based compensation plans		26	15
Dividends paid on preferred stock		(21)	(21)
Other, net		(11)	(11)
Net cash flows from (used in) financing activities		(5,123)	12,815
Net change in cash and cash equivalents		(448)	1,193
Cash and cash equivalents at beginning of period		575	102
Cash and cash equivalents at end of period		127	1,295
Guarantors
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		603	826
Cash flows from (used in) investing activities:
Capital expenditures		(89)	(60)
Proceeds from settlement of short-term investments		159
Acquisition, net of cash acquired			1,002
Proceeds from settlement of long-term investments		23	1
Payment after amendment of contract		26
Other, net		11	11
Net cash flows from (used in) investing activities		130	954
Cash flows from (used in) financing activities:
Dividends paid on common stock		(247)	(479)
Early extinguishment of debt		(8)
Redemption premium for early extinguishment of debt		(1)
Proceeds from termination of interest rate swaps		66
Distribution of equity		(412)	(185)
Other, net		(260)	680
Net cash flows from (used in) financing activities		(862)	16
Net change in cash and cash equivalents		(129)	1,796
Cash and cash equivalents at beginning of period		1,544	469
Cash and cash equivalents at end of period		1,415	2,265
Guarantors | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		38	485
Cash flows from (used in) investing activities:
Payment after amendment of contract		598	184
Other, net		8	8
Net cash flows from (used in) investing activities		606	192
Cash flows from (used in) financing activities:
Dividends paid on common stock		(247)	(479)
Distribution of equity		(412)	(185)
Net cash flows from (used in) financing activities		(659)	(664)
Net change in cash and cash equivalents		(15)	13
Cash and cash equivalents at beginning of period		19	3
Cash and cash equivalents at end of period		4	16
Non-Guarantors
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		(23)	(3)
Cash flows from (used in) investing activities:
Capital expenditures		(5)	(3)
Acquisition, net of cash acquired			57
Other, net			(1)
Net cash flows from (used in) investing activities		(5)	53
Cash flows from (used in) financing activities:
Dividends paid on common stock		(25)
Distribution of equity		(26)
Other, net			30
Net cash flows from (used in) financing activities		(51)	30
Effect of exchange rate changes on cash and cash equivalents		7	(22)
Net change in cash and cash equivalents		(72)	58
Cash and cash equivalents at beginning of period		448	395
Cash and cash equivalents at end of period		376	453
Non-Guarantors | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		611	208
Cash flows from (used in) investing activities:
Capital expenditures		(35)	(29)
Acquisition, net of cash acquired			535
Other, net		11	11
Net cash flows from (used in) investing activities		(24)	517
Cash flows from (used in) financing activities:
Dividends paid on common stock		(205)	(110)
Distribution of equity		(513)	(10)
Other, net		(268)	2
Net cash flows from (used in) financing activities		(986)	(118)
Effect of exchange rate changes on cash and cash equivalents		7	(22)
Net change in cash and cash equivalents		(392)	585
Cash and cash equivalents at beginning of period		1,164	534
Cash and cash equivalents at end of period		772	1,119
RJR | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		120	700
Cash flows from (used in) investing activities:
Capital expenditures		(59)	(34)
Proceeds from settlement of short-term investments		159
Acquisition, net of cash acquired			524
Proceeds from settlement of long-term investments		23	1
Payment after amendment of contract		495	10
Net cash flows from (used in) investing activities		618	501
Cash flows from (used in) financing activities:
Dividends paid on common stock		(9)	(461)
Early extinguishment of debt		(8)
Redemption premium for early extinguishment of debt		(1)
Proceeds from termination of interest rate swaps		66
Distribution of equity		(580)	(184)
Other, net			700
Net cash flows from (used in) financing activities		(532)	55
Net change in cash and cash equivalents		206	1,256
Cash and cash equivalents at beginning of period		809	327
Cash and cash equivalents at end of period		1,015	1,583
Eliminations
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		(293)	(500)
Cash flows from (used in) investing activities:
Capital expenditures			(1)
Payment after amendment of contract		(438)	(185)
Other, net		(271)	700
Net cash flows from (used in) investing activities		(709)	514
Cash flows from (used in) financing activities:
Dividends paid on common stock		272	479
Dividends paid on preferred stock		21	21
Distribution of equity		438	185
Other, net		271	(699)
Net cash flows from (used in) financing activities		1,002	(14)
Eliminations | RJR Tobacco
Condensed Financial Statements Captions [Line Items]
Cash flows from (used in) operating activities		(482)	(1,070)
Cash flows from (used in) investing activities:
Capital expenditures			(1)
Payment after amendment of contract		(1,505)	(379)
Other, net		(279)	691
Net cash flows from (used in) investing activities		(1,784)	311
Cash flows from (used in) financing activities:
Dividends paid on common stock		461	1,050
Dividends paid on preferred stock		21	21
Distribution of equity		1,505	379
Other, net		279	(691)
Net cash flows from (used in) financing activities		$ 2,266	$ 759

Condensed Consolidating Balance

Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 1,918	$ 2,567	$ 4,013	$ 966
Short-term investments	26	149
Accounts receivable	89	68
Accounts receivable, related party	33	38
Other receivables	13	35
Inventories	1,541	1,734
Deferred income taxes, net	1,018	1,032
Other current assets	267	564
Total current assets	4,905	6,187
Property, plant and equipment, net	1,295	1,255
Trademarks and other intangible assets, net	29,455	29,467
Goodwill	15,993	15,993
Other assets and deferred charges	124	230
Total assets	51,772	53,132
Liabilities and shareholders’ equity
Accounts payable	191	179
Tobacco settlement accruals	1,696	2,816
Due to related party	2	9
Deferred revenue, related party	16	33
Current maturities of long-term debt	501	506
Dividends payable on common stock	599	514
Income taxes payable	628
Other current liabilities	1,145	1,234
Total current liabilities	4,778	5,291
Long-term debt (less current maturities)	13,192	16,849
Deferred income taxes, net	10,366	10,236
Long-term retirement benefits (less current portion)	1,813	2,265
Other noncurrent liabilities	223	239
Shareholders’ equity	21,400	18,252	18,326	4,522
Total liabilities and shareholders' equity	51,772	53,132
RJR Tobacco
Assets
Goodwill	13,306	13,306
RAI
Assets
Cash and cash equivalents	127	575	1,295	102
Other receivables	65	70
Deferred income taxes, net	9	14
Other current assets	8	116
Total current assets	209	775
Property, plant and equipment, net	3	3
Long-term intercompany notes receivable	1,322	1,583
Investment in subsidiaries	37,981	37,151
Other assets and deferred charges	162	175
Total assets	39,677	39,687
Liabilities and shareholders’ equity
Accounts payable	1	2
Current maturities of long-term debt	416	420
Dividends payable on common stock	599	514
Income taxes payable	702
Other current liabilities	3,428	3,707
Total current liabilities	5,146	4,643
Long-term intercompany notes payable	159	169
Long-term debt (less current maturities)	12,876	16,522
Long-term retirement benefits (less current portion)	55	57
Other noncurrent liabilities	41	44
Shareholders’ equity	21,400	18,252
Total liabilities and shareholders' equity	39,677	39,687
Guarantors
Assets
Cash and cash equivalents	1,415	1,544	2,265	469
Short-term investments	26	149
Accounts receivable	81	62
Accounts receivable, related party	33	38
Other receivables	3,438	3,459
Inventories	1,520	1,694
Deferred income taxes, net	1,002	1,011
Other current assets	259	323
Total current assets	7,774	8,280
Property, plant and equipment, net	1,259	1,223
Trademarks and other intangible assets, net	29,442	29,467
Goodwill	15,977	15,976
Long-term intercompany notes receivable	159	169
Investment in subsidiaries	393	662
Other assets and deferred charges	100	212
Total assets	55,104	55,989
Liabilities and shareholders’ equity
Accounts payable	184	173
Tobacco settlement accruals	1,696	2,816
Due to related party	2	9
Deferred revenue, related party	16	33
Current maturities of long-term debt	85	86
Income taxes payable	4
Other current liabilities	1,015	1,039
Total current liabilities	3,002	4,156
Long-term intercompany notes payable	1,000	1,260
Long-term debt (less current maturities)	316	327
Deferred income taxes, net	10,535	10,421
Long-term retirement benefits (less current portion)	1,716	2,153
Other noncurrent liabilities	182	195
Shareholders’ equity	38,353	37,477
Total liabilities and shareholders' equity	55,104	55,989
Guarantors | RJR Tobacco
Assets
Cash and cash equivalents	4	19	16	3
Other receivables	17	17
Deferred income taxes, net	1	1
Total current assets	22	37
Goodwill	9,853	9,853
Long-term intercompany notes receivable	82	90
Investment in subsidiaries	24,898	24,276
Other assets and deferred charges	10	13
Total assets	34,865	34,269
Liabilities and shareholders’ equity
Other current liabilities	21	31
Total current liabilities	21	31
Long-term retirement benefits (less current portion)	27	30
Shareholders’ equity	34,817	34,208
Total liabilities and shareholders' equity	34,865	34,269
Non-Guarantors
Assets
Cash and cash equivalents	376	448	453	395
Accounts receivable	8	6
Other receivables	16	91
Inventories	22	44
Deferred income taxes, net	7	7
Other current assets	75	129
Total current assets	504	725
Property, plant and equipment, net	33	29
Trademarks and other intangible assets, net	15
Goodwill	16	17
Other assets and deferred charges	34	31
Total assets	602	802
Liabilities and shareholders’ equity
Accounts payable	6	4
Other current liabilities	208	79
Total current liabilities	214	83
Long-term intercompany notes payable	322	323
Long-term retirement benefits (less current portion)	42	55
Shareholders’ equity	24	341
Total liabilities and shareholders' equity	602	802
Non-Guarantors | RJR Tobacco
Assets
Cash and cash equivalents	772	1,164	1,119	534
Accounts receivable	32	20
Other receivables	4,783	4,890
Inventories	717	797
Deferred income taxes, net	105	89
Other current assets	104	212
Total current assets	6,513	7,172
Property, plant and equipment, net	475	460
Trademarks and other intangible assets, net	29,133	29,121
Goodwill	2,687	2,687
Long-term intercompany notes receivable	159	169
Other assets and deferred charges	16	9
Total assets	38,983	39,618
Liabilities and shareholders’ equity
Accounts payable	24	31
Tobacco settlement accruals	90	143
Other current liabilities	247	284
Total current liabilities	361	458
Long-term intercompany notes payable	1,404	1,673
Deferred income taxes, net	10,969	10,981
Long-term retirement benefits (less current portion)	125	142
Other noncurrent liabilities	23	13
Shareholders’ equity	26,101	26,351
Total liabilities and shareholders' equity	38,983	39,618
RJR | RJR Tobacco
Assets
Cash and cash equivalents	1,015	809	$ 1,583	$ 327
Short-term investments	26	149
Accounts receivable	57	48
Accounts receivable, related party	33	38
Other receivables	9	30
Inventories	825	941
Deferred income taxes, net	903	928
Other current assets	226	236
Total current assets	3,094	3,179
Property, plant and equipment, net	817	792
Trademarks and other intangible assets, net	324	346
Goodwill	3,453	3,453
Investment in subsidiaries	22,893	23,199
Other assets and deferred charges	543	783
Total assets	31,124	31,752
Liabilities and shareholders’ equity
Accounts payable	166	146
Tobacco settlement accruals	1,606	2,673
Due to related party	2	9
Deferred revenue, related party	16	33
Current maturities of long-term debt	85	86
Other current liabilities	2,310	2,189
Total current liabilities	4,185	5,136
Long-term debt (less current maturities)	316	327
Deferred income taxes, net	1	1
Long-term retirement benefits (less current portion)	1,606	2,036
Other noncurrent liabilities	159	182
Shareholders’ equity	24,857	24,070
Total liabilities and shareholders' equity	31,124	31,752
Eliminations
Assets
Other receivables	(3,506)	(3,585)
Inventories	(1)	(4)
Other current assets	(75)	(4)
Total current assets	(3,582)	(3,593)
Trademarks and other intangible assets, net	(2)
Long-term intercompany notes receivable	(1,481)	(1,752)
Investment in subsidiaries	(38,374)	(37,813)
Other assets and deferred charges	(172)	(188)
Total assets	(43,611)	(43,346)
Liabilities and shareholders’ equity
Income taxes payable	(78)
Other current liabilities	(3,506)	(3,591)
Total current liabilities	(3,584)	(3,591)
Long-term intercompany notes payable	(1,481)	(1,752)
Deferred income taxes, net	(169)	(185)
Shareholders’ equity	(38,377)	(37,818)
Total liabilities and shareholders' equity	(43,611)	(43,346)
Eliminations | RJR Tobacco
Assets
Other receivables	(4,861)	(4,972)
Inventories	(1)	(4)
Other current assets	(71)
Total current assets	(4,933)	(4,976)
Trademarks and other intangible assets, net	(2)
Long-term intercompany notes receivable	(1,563)	(1,842)
Investment in subsidiaries	(85,772)	(84,626)
Other assets and deferred charges	(607)	(750)
Total assets	(92,877)	(92,194)
Liabilities and shareholders’ equity
Income taxes payable	(74)
Other current liabilities	(4,861)	(4,977)
Total current liabilities	(4,935)	(4,977)
Long-term intercompany notes payable	(1,563)	(1,842)
Deferred income taxes, net	(604)	(746)
Shareholders’ equity	(85,775)	(84,629)
Total liabilities and shareholders' equity	$ (92,877)	$ (92,194)

RJR Tobacco Guaranteed Unsecure

RJR Tobacco Guaranteed Unsecured Notes - Condensed Consolidating Financial Statements - Additional Information (Detail) $ in Millions	Jun. 30, 2016USD ($)
RJR
Condensed Financial Statements Captions [Line Items]
Aggregate principal amount of unsecured notes	$ 369