ITEM 2.06 Material Impairments.
On September 9, 2008, Reynolds American Inc. ("RAI") announced, in addition to restructuring charges and a workforce reduction related to changes planned in the organization structures at RAI and its largest subsidiary, R. J. Reynolds Tobacco Company ("RJRT"), that RJRT was modifying its brand-portfolio strategy. The modification designated RJRT's premium menthol Kool brand as a support brand rather than as a growth brand.
Under generally accepted accounting principles in the United States, RJRT is required to test the carrying value of its intangible assets annually, or more frequently if events or changes in circumstances (a "triggering event") indicate that the asset might be impaired. The decision in the third quarter of 2008 to designate Kool as a support brand triggered testing of its trademark value for possible impairment.
Based on the discounted cash flow projections of Kool as a support brand, on October 7, 2008, RJRT concluded that the fair value of its Kool trademark was less than its carrying value. As a result, RJRT will record a pre-tax, non-cash impairment charge of approximately $175 million in the third quarter of 2008.
This impairment will not result in any future cash expenditures. This impairment charge does not affect the cash position of RJRT or RAI.
A copy of the press release announcing the impairment charge is attached to this Current Report on Form 8-K as Exhibit 99.1. ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following is furnished as an Exhibit to this Report.

Number Exhibit

99.1 Press Release of Reynolds American Inc., dated October 9, 2008.

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