diff --git a/compiler/frontend/src/org/jetbrains/kotlin/psi/JetPsiFactory.kt b/compiler/frontend/src/org/jetbrains/kotlin/psi/JetPsiFactory.kt
index 6942c58522c..6b57f2987d8 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/psi/JetPsiFactory.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/psi/JetPsiFactory.kt
@@ -360,7 +360,7 @@ public class JetPsiFactory(private val project: Project) {
         return JetBlockCodeFragment(project, "fragment.kt", text, null, context)
     }
 
-    public fun createIf(condition: JetExpression, thenExpr: JetExpression, elseExpr: JetExpression?): JetIfExpression {
+    public fun createIf(condition: JetExpression, thenExpr: JetExpression, elseExpr: JetExpression? = null): JetIfExpression {
         return (if (elseExpr != null)
             createExpressionByPattern("if ($0) $1 else $2", condition, thenExpr, elseExpr) as JetIfExpression
         else
diff --git a/idea/src/org/jetbrains/kotlin/idea/intentions/InvertIfConditionIntention.kt b/idea/src/org/jetbrains/kotlin/idea/intentions/InvertIfConditionIntention.kt
index 958ebf6caa9..f7e7efd2dc8 100644
--- a/idea/src/org/jetbrains/kotlin/idea/intentions/InvertIfConditionIntention.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/intentions/InvertIfConditionIntention.kt
@@ -208,13 +208,6 @@ public class InvertIfConditionIntention : JetSelfTargetingIntention<JetIfExpress
         return null
     }
 
-    private fun JetExpression.isExitStatement(): Boolean {
-        when (this) {
-            is JetContinueExpression, is JetBreakExpression, is JetThrowExpression, is JetReturnExpression -> return true
-            else -> return false
-        }
-    }
-
     companion object {
         private val NEGATABLE_OPERATORS = setOf(JetTokens.EQEQ, JetTokens.EXCLEQ, JetTokens.EQEQEQ,
                 JetTokens.EXCLEQEQEQ, JetTokens.IS_KEYWORD, JetTokens.NOT_IS, JetTokens.IN_KEYWORD,
diff --git a/idea/src/org/jetbrains/kotlin/idea/intentions/SplitIfIntention.kt b/idea/src/org/jetbrains/kotlin/idea/intentions/SplitIfIntention.kt
index ca774aa17cd..66dca630fdc 100644
--- a/idea/src/org/jetbrains/kotlin/idea/intentions/SplitIfIntention.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/intentions/SplitIfIntention.kt
@@ -21,6 +21,8 @@ import org.jetbrains.kotlin.lexer.JetTokens
 import org.jetbrains.kotlin.psi.psiUtil.getNonStrictParentOfType
 import com.intellij.psi.util.PsiTreeUtil
 import org.jetbrains.kotlin.psi.*
+import org.jetbrains.kotlin.psi.psiUtil.lastBlockStatementOrThis
+import org.jetbrains.kotlin.psi.psiUtil.startOffset
 
 public class SplitIfIntention : JetSelfTargetingIntention<JetExpression>(javaClass(), "Split if into 2 if's") {
     override fun isApplicableTo(element: JetExpression, caretOffset: Int): Boolean {
@@ -41,24 +43,36 @@ public class SplitIfIntention : JetSelfTargetingIntention<JetExpression>(javaCla
         val expression = operator.getParent() as JetBinaryExpression
         val rightExpression = JetPsiUtil.safeDeparenthesize(getRight(expression, ifExpression!!.getCondition()!!))
         val leftExpression = JetPsiUtil.safeDeparenthesize(expression.getLeft()!!)
-        val thenExpression = ifExpression.getThen()!!
-        val elseExpression = ifExpression.getElse()
+        val thenBranch = ifExpression.getThen()!!
+        val elseBranch = ifExpression.getElse()
 
         val psiFactory = JetPsiFactory(element)
-        val innerIf = psiFactory.createIf(rightExpression, thenExpression, elseExpression)
-        val newIf = when (operator.getReferencedNameElementType()) {
-            JetTokens.ANDAND -> psiFactory.createIf(leftExpression, psiFactory.wrapInABlock(innerIf), elseExpression)
 
-            JetTokens.OROR -> psiFactory.createIf(leftExpression, thenExpression, innerIf)
+        val innerIf = psiFactory.createIf(rightExpression, thenBranch, elseBranch)
+
+        when (operator.getReferencedNameElementType()) {
+            JetTokens.ANDAND -> ifExpression.replace(psiFactory.createIf(leftExpression, psiFactory.wrapInABlock(innerIf), elseBranch))
+
+            JetTokens.OROR -> {
+                val container = ifExpression.getParent()
+
+                if (container is JetBlockExpression && elseBranch == null && thenBranch.lastBlockStatementOrThis().isExitStatement()) { // special case
+                    container.addAfter(innerIf, ifExpression)
+                    container.addAfter(psiFactory.createNewLine(), ifExpression)
+                    ifExpression.replace(psiFactory.createIf(leftExpression, thenBranch))
+                    return
+                }
+
+                ifExpression.replace(psiFactory.createIf(leftExpression, thenBranch, innerIf))
+            }
 
             else -> throw IllegalArgumentException()
         }
-        ifExpression.replace(newIf)
     }
 
     private fun getRight(element: JetBinaryExpression, condition: JetExpression): JetExpression {
         //gets the textOffset of the right side of the JetBinaryExpression in context to condition
-        val startOffset = element.getRight()!!.getTextOffset() - condition.getTextOffset()
+        val startOffset = element.getRight()!!.startOffset - condition.startOffset
         val rightString = condition.getText()!!.substring(startOffset, condition.getTextLength())
 
         return JetPsiFactory(element).createExpression(rightString)
diff --git a/idea/src/org/jetbrains/kotlin/idea/intentions/Utils.kt b/idea/src/org/jetbrains/kotlin/idea/intentions/Utils.kt
index 8a6fd258fd1..a93347bf804 100644
--- a/idea/src/org/jetbrains/kotlin/idea/intentions/Utils.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/intentions/Utils.kt
@@ -114,3 +114,10 @@ fun JetQualifiedExpression.toResolvedCall(): ResolvedCall<out CallableDescriptor
     return callExpression.getResolvedCall(callExpression.analyze()) ?: return null
 }
 
+fun JetExpression.isExitStatement(): Boolean {
+    when (this) {
+        is JetContinueExpression, is JetBreakExpression, is JetThrowExpression, is JetReturnExpression -> return true
+        else -> return false
+    }
+}
+
diff --git a/idea/testData/intentions/splitIf/ifOrReturn.kt b/idea/testData/intentions/splitIf/ifOrReturn.kt
new file mode 100644
index 00000000000..501fb17406f
--- /dev/null
+++ b/idea/testData/intentions/splitIf/ifOrReturn.kt
@@ -0,0 +1,4 @@
+fun foo(p: Int): Boolean {
+    if (p < 0 <caret>|| p == 5) return false
+    return true
+}
\ No newline at end of file
diff --git a/idea/testData/intentions/splitIf/ifOrReturn.kt.after b/idea/testData/intentions/splitIf/ifOrReturn.kt.after
new file mode 100644
index 00000000000..2c05ea3d96d
--- /dev/null
+++ b/idea/testData/intentions/splitIf/ifOrReturn.kt.after
@@ -0,0 +1,5 @@
+fun foo(p: Int): Boolean {
+    if (p < 0) return false
+    if (p == 5) return false
+    return true
+}
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/idea/intentions/IntentionTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/intentions/IntentionTestGenerated.java
index 5b8bd30effb..7f65145f52e 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/intentions/IntentionTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/intentions/IntentionTestGenerated.java
@@ -6405,6 +6405,12 @@ public class IntentionTestGenerated extends AbstractIntentionTest {
             doTest(fileName);
         }
 
+        @TestMetadata("ifOrReturn.kt")
+        public void testIfOrReturn() throws Exception {
+            String fileName = JetTestUtils.navigationMetadata("idea/testData/intentions/splitIf/ifOrReturn.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("ifWithElse.kt")
         public void testIfWithElse() throws Exception {
             String fileName = JetTestUtils.navigationMetadata("idea/testData/intentions/splitIf/ifWithElse.kt");