Financial Highlights

Results include the contribution from Altadis since completion of the acquisition on 25 January 2008 and the 2007 per share figures have been restated to reflect the bonus element of the related rights issue.

Profit from operations, profit before tax, attributable earnings, basic and diluted earnings per share are impacted, where applicable, by amortisation of acquired intangibles, restructuring costs, certain fair value gains and losses on derivative financial instruments, an exceptional gain on brand divestments, charges for one-off acquisition accounting adjustments, retirement benefit net financing income and related taxation effects. Further detail of these items is included in the Financial Review.

Earnings per share amounts are calculated using the weighted average shares in issue of 846.5 million (2007: 775.5 million). Dividend per share has been determined using the current shares eligible for the final dividend of 1,011.3 million (2007: 672.8 million), applying our policy of distributing around 50 per cent of adjusted attributable earnings.

Management believes that reporting adjusted measures provides a useful comparison of business performance and reflects the way in which the business is controlled. Accordingly, as outlined in our accounting policy note, adjusted measures of profit from operations, net finance costs, profit before tax, attributable earnings, taxation and earnings per share exclude, where applicable, amortisation of acquired intangibles, restructuring costs, retirement benefits net financing income, fair value gains and losses on derivative financial instruments in respect of commercially effective hedges, one-off acquisition accounting adjustments, brand divestment gains and related taxation effects. Reconciliations between adjusted and reported profit from operations are included within note 1 to the financial statements, adjusted and reported finance costs in note 5, adjusted and reported taxation in note 6, and adjusted and reported earnings per share in note 8. The adjusted measures in this report are not defined terms under International Financial Reporting Standards and may not be comparable with similarly titled measures reported by other companies.