EX-99.1 3 a2019q3pressrelease-ex991.htm EXHIBIT 99.1 Exhibit


svca05.jpg
FOR IMMEDIATE RELEASE
Contact:
 
Emily Claffey/Benjamin Spicehandler
/Columbia Clancy
 
 
Sard Verbinnen & Co
 
 
212-687-8080
 
 
Conrad Harrington
 
 
Sard Verbinnen & Co - Europe
 
 
+44 (0)20 3178 8914
 
 
J. Bryant Kirkland III, Vector Group Ltd.
 
 
305-579-8000
VECTOR GROUP REPORTS THIRD QUARTER 2019 FINANCIAL RESULTS

 
MIAMI, FL, November 5, 2019 - Vector Group Ltd. (NYSE:VGR) today announced financial results for the three and nine months ended September 30, 2019.

GAAP Financial Results

Third quarter 2019 revenues were $504.8 million, compared to revenues of $513.9 million in the third quarter of 2018. The Company recorded operating income of $66.7 million in the third quarter of 2019, compared to operating income of $66.0 million in the third quarter of 2018. Net income attributed to Vector Group Ltd. for the third quarter of 2019 was $36.0 million, or $0.23 per diluted common share, compared to net income of $12.0 million, or $0.07 per diluted common share, in the third quarter of 2018.

For the nine months ended September 30, 2019 revenues were $1.464 billion, compared to revenues of $1.424 billion for the nine months ended September 30, 2018. The Company recorded operating income of $185.6 million for the nine months ended September 30, 2019, compared to operating income of $176.0 million for the nine months ended September 30, 2018. Net income attributed to Vector Group Ltd. for the nine months ended September 30, 2019 was $90.3 million, or $0.56 per diluted common share, compared to a net income of $37.0 million, or $0.22 per diluted common share, for the nine months ended September 30, 2018.

Non-GAAP Financial Measures

Non-GAAP financial measures also include adjustments for purchase accounting associated with the Company’s 2013 acquisition of an additional 20.59% interest in Douglas Elliman Realty, LLC, the impact of non-controlling interest associated with the 29.41% of Douglas Elliman Realty, LLC that was purchased by the Company on December 31, 2018, litigation settlements and judgments, settlements of long-standing disputes related to the Master Settlement Agreement in the Tobacco segment, net interest expense capitalized to real estate ventures, stock-based compensation expense (for purposes of Adjusted EBITDA only) and non-cash interest expense associated with the Company’s convertible debt. Reconciliations of non-GAAP financial measures to the comparable GAAP financial results for the three and nine months ended September 30, 2019 and 2018 are included in Tables 2 through 7.





Three months ended September 30, 2019 compared to the three months ended September 30, 2018
Third quarter of 2019 Adjusted EBITDA attributed to Vector Group (as described in Table 2 attached hereto) were $73.7 million, compared to $73.4 million for the third quarter of 2018.
Adjusted Net Income (as described in Table 3 attached hereto) was $36.2 million, or $0.23 per diluted share, for the third quarter of 2019, and $23.1 million, or $0.15 per diluted share, for the third quarter of 2018.
Adjusted Operating Income (as described in Table 4 attached hereto) was $67.0 million for the third quarter of 2019, compared to $66.4 million for the third quarter of 2018.
Nine months ended September 30, 2019 compared to the nine months ended September 30, 2018
Adjusted EBITDA attributed to Vector Group Ltd. (as described in Table 2 attached hereto) were $206.9 million for the nine months ended September 30, 2019, compared to $191.4 million for the nine months ended September 30, 2018.
Adjusted Net Income (as described in Table 3 attached hereto) was $92.3 million, or $0.59 per diluted share, for the nine months ended September 30, 2019, and $56.5 million, or $0.35 per diluted share, for the nine months ended September 30, 2018.
Adjusted Operating Income (as described in Table 4 attached hereto) was $186.4 million for the nine months ended September 30, 2019, compared to $168.9 million for the nine months ended September 30, 2018.

Tobacco Segment Financial Results
For the third quarter of 2019, the Tobacco segment had revenues of $303.3 million, compared to $302.0 million for the third quarter of 2018. For the nine months ended September 30, 2019, the Tobacco segment had revenues of $854.5 million, compared to $844.0 million for the nine months ended September 30, 2018.
Operating Income from the Tobacco segment was $72.8 million and $201.6 million for the three and nine months ended September 30, 2019, respectively, compared to $63.3 million and $189.2 million for the three and nine months ended September 30, 2018, respectively.
Non-GAAP Financial Measures
Tobacco Adjusted Operating Income (as described in Table 5 attached hereto) for the third quarter of 2019 and 2018 was $73.0 million and $63.3 million, respectively. Tobacco Adjusted Operating Income for the nine months ended September 30, 2019 and 2018 was $202.5 million and $183.4 million, respectively.
For the third quarter of 2019, the Tobacco segment had conventional cigarette (wholesale) shipments of approximately 2.44 billion units, compared to 2.59 billion units for the third quarter of 2018. For the nine months ended September 30, 2019, the Tobacco segment had conventional cigarette (wholesale) shipments of approximately 6.90 billion units, compared to 7.13 billion units for the nine months ended September 30, 2018.
Liggett’s retail market share increased to 4.3% for the third quarter of 2019 and 4.2% for the nine months ended September 30, 2019, compared to 4.2% for the third quarter of 2018 and 4.1% for the nine months ended September 30, 2018. Compared to the third quarter of 2018, Liggett’s retail shipments declined by 3.5% while the overall industry’s retail shipments declined by 6.4%. Compared to the nine months ended September 30, 2018, Liggett’s retail shipments declined by 2.9% while the overall industry’s retail shipments declined by 5.9%, according to data from Management Science Associates, Inc.

Real Estate Segment Financial Results
For the third quarter of 2019, the Real Estate segment had revenues of $201.5 million, compared to $211.9 million for the third quarter of 2018. For the nine months ended September 30, 2019, the Real Estate segment had revenues of $609.6 million, compared to $580.4 million for the nine months ended September 30, 2018. For the third quarter of 2019, the Real Estate segment reported net income of $7.2 million, compared to a net income of $4.7 million for the third quarter of 2018. For the nine months ended September 30, 2019, the Real Estate segment reported a net income of $13.5 million, compared to net loss of $0.9 million for the nine months ended September 30, 2018.
Douglas Elliman’s results are included in Vector Group Ltd.’s Real Estate segment. For the third quarter of 2019, Douglas Elliman had revenues of $201.2 million, compared to $211.5 million for the third quarter of 2018. For the nine months ended September 30, 2019, Douglas Elliman had revenues of $606.0 million, compared to $576.5 million for the nine months ended September 30, 2018. For the third quarter of 2019, Douglas Elliman reported net income of $1.9 million, compared to net income of $10.0 million for the third quarter of 2018. For the nine months ended September 30, 2019, Douglas Elliman reported net income of $6.6 million, compared to net income of $7.8 million for the nine months ended September 30, 2018.




Non-GAAP Financial Measures
For the third quarter of 2019, Real Estate Adjusted EBITDA attributed to the Company (as described in Table 6 attached hereto) were $2.9 million, compared to $11.6 million for the third quarter of 2018.
For the nine months ended September 30, 2019, Real Estate Adjusted EBITDA attributed to the Company were $11.4 million, compared to $13.0 million for the nine months ended September 30, 2018.
For the third quarter of 2019, Douglas Elliman’s Adjusted EBITDA (as described in Table 7 attached hereto) were $3.4 million, compared to $12.0 million for the third quarter of 2018.
For the nine months ended September 30, 2019, Douglas Elliman’s Adjusted EBITDA were $11.0 million, compared to $11.8 million for the nine months ended September 30, 2018.
For the three and nine months ended September 30, 2019, Douglas Elliman achieved closed sales of approximately $7.4 billion and $22.1 billion, respectively, compared to $7.8 billion and $21.4 billion for the three and nine months ended September 30, 2018, respectively.

Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted Net Income, Adjusted Operating Income, Tobacco Adjusted Operating Income, Tobacco Adjusted EBITDA, New Valley LLC Adjusted EBITDA and Douglas Elliman Realty, LLC Adjusted EBITDA (“the Non-GAAP Financial Measures”) are financial measures not prepared in accordance with generally accepted accounting principles (“GAAP”). The Company believes that the Non-GAAP Financial Measures are important measures that supplement discussions and analysis of its results of operations and enhances an understanding of its operating performance. The Company believes the Non-GAAP Financial Measures provide investors and analysts with a useful measure of operating results unaffected by differences in capital structures and ages of related assets among otherwise comparable companies.

On December 31, 2018, New Valley LLC, the real estate subsidiary of Vector Group Ltd, acquired the 29.41% interest in Douglas Elliman Realty, LLC it did not previously own. Vector Group Ltd. has adjusted its presentation of Non-GAAP Financial Measures in Tables 2, 3, 6 and 7 to assume the transaction occurred on January 1, 2018 and to improve comparability between the three and nine months ended September 30, 2019 and 2018, respectively, as well as the twelve months ended September 30, 2019. Please refer to Vector Group Ltd.’s Form 8-K, which is dated May 3, 2019, for additional information.

Management uses the Non-GAAP Financial Measures as measures to review and assess operating performance of the Company’s business, and management and investors should review both the overall performance (GAAP net income) and the operating performance (the Non-GAAP Financial Measures) of the Company’s business. While management considers the Non-GAAP Financial Measures to be important, they should be considered in addition to, but not as substitutes for or superior to, other measures of financial performance prepared in accordance with GAAP, such as operating income, net income and cash flows from operations. In addition, the Non-GAAP Financial Measures are susceptible to varying calculations and the Company’s measurement of the Non-GAAP Financial Measures may not be comparable to those of other companies. Attached hereto as Tables 2 through 7 is information relating to the Company’s Non-GAAP Financial Measures for the three and nine months ended September 30, 2019 and 2018.

Conference Call to Discuss Third Quarter 2019 Results

As previously announced, the Company will host a conference call and webcast on Tuesday, November 5, 2019 at 4:30 PM (ET) to discuss its third quarter 2019 results. Investors can access the call by dialing 800-859-8150 and entering 38104109 as the conference ID number. The call will also be available via live webcast at https://www.investornetwork.com/event/presentation/56439. Webcast participants should allot extra time to register before the webcast begins.

A replay of the call will be available shortly after the call ends on November 5, 2019 through November 19, 2019. To access the replay, dial 877-656-8905 and enter 38104109 as the conference ID number. The archived webcast will also be available at https://www.investornetwork.com/event/presentation/56439 for one year.

Vector Group is a holding company for Liggett Group LLC, Vector Tobacco Inc., New Valley LLC, and Douglas Elliman Realty, LLC. Additional information concerning the company is available on the Company’s website, www.VectorGroupLtd.com.

[Financial Tables Follow]




TABLE 1
VECTOR GROUP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
 
(Unaudited)
 
(Unaudited)
Revenues:
 
 
 
 
 
 
 
   Tobacco*
$
303,260

 
$
302,009

 
$
854,517

 
$
843,958

   Real estate
201,530

 
211,860

 
609,629

 
580,365

       Total revenues
504,790

 
513,869

 
1,464,146

 
1,424,323

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 Cost of sales:
 
 
 
 
 
 
 
   Tobacco*
209,192

 
219,769

 
590,956

 
597,492

   Real estate
136,264

 
140,533

 
408,694

 
389,851

       Total cost of sales
345,456

 
360,302

 
999,650

 
987,343

 
 
 
 
 
 
 
 
Operating, selling, administrative and general expenses
92,374

 
87,549

 
278,047

 
262,961

Litigation settlement and judgment expense (income)
240

 
—

 
895

 
(1,944
)
Operating income
66,720

 
66,018

 
185,554

 
175,963

 
 
 
 
 
 
 
 
Other income (expenses):
 
 
 
 
 
 
 
Interest expense
(32,963
)
 
(51,084
)
 
(103,236
)
 
(145,452
)
Change in fair value of derivatives embedded within convertible debt
6,182

 
10,005

 
20,319

 
31,289

Equity in earnings (losses) from real estate ventures
8,050

 
294

 
12,002

 
(8,378
)
Other, net
1,755

 
4,481

 
13,653

 
13,660

Income before provision for income taxes
49,744

 
29,714

 
128,292

 
67,082

Income tax expense
13,736

 
14,686

 
37,944

 
29,394

 
 
 
 
 
 
 
 
Net income
36,008

 
15,028

 
90,348

 
37,688

 
 
 
 
 
 
 
 
Net income attributed to non-controlling interest
—

 
(3,026
)
 
(80
)
 
(657
)
 
 
 
 
 
 
 
 
Net income attributed to Vector Group Ltd.
$
36,008

 
$
12,002

 
$
90,268

 
$
37,031

 
 
 
 
 
 
 
 
Per basic common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income applicable to common share attributed to Vector Group Ltd.
$
0.23

 
$
0.07

 
$
0.57

 
$
0.23

 
 
 
 
 
 
 
 
Per diluted common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income applicable to common share attributed to Vector Group Ltd.
$
0.23

 
$
0.07

 
$
0.56

 
$
0.22


* Revenues and cost of sales include federal excise taxes of $122,951, $130,428, $347,527 and $359,199, respectively.




TABLE 2
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands)
 
LTM
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
September 30,
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
Net income attributed to Vector Group Ltd.
$
111,342

 
$
36,008

 
$
12,002

 
$
90,268

 
$
37,031

Interest expense
161,564

 
32,963

 
51,084

 
103,236

 
145,452

Income tax expense
30,102

 
13,736

 
14,686

 
37,944

 
29,394

Net (loss) income attributed to non-controlling interest
(675
)
 
—

 
3,026

 
80

 
657

Depreciation and amortization
18,126

 
4,430

 
4,707

 
13,362

 
14,043

EBITDA
$
320,459

 
$
87,137

 
$
85,505

 
$
244,890

 
$
226,577

Change in fair value of derivatives embedded within convertible debt (a)
(34,019
)
 
(6,182
)
 
(10,005
)
 
(20,319
)
 
(31,289
)
Equity in (earnings) losses from real estate ventures (b)
(34,826
)
 
(8,050
)
 
(294
)
 
(12,002
)
 
8,378

Loss on extinguishment of debt
4,066

 
—

 
—

 
—

 
—

Stock-based compensation expense (c)
9,649

 
2,348

 
2,584

 
7,122

 
7,424

Litigation settlement and judgment expense (income) (d)
1,055

 
240

 
—

 
895

 
(1,944
)
Impact of MSA settlement (e)
—

 
—

 
—

 
—

 
(6,298
)
Purchase accounting adjustments (f)
63

 
—

 
184

 
—

 
545

Other, net
(3,914
)
 
(1,755
)
 
(4,481
)
 
(13,653
)
 
(13,660
)
Adjusted EBITDA
$
262,533

 
$
73,738

 
$
73,493

 
$
206,933

 
$
189,733

Adjusted EBITDA attributed to non-controlling interest
(1,471
)
 
—

 
(3,638
)
 
—

 
(1,848
)
Adjustment to reflect additional 29.41% of Adjusted EBITDA from Douglas Elliman Realty, LLC (g)
(158
)
 
—

 
3,543

 
—

 
3,477

Adjusted EBITDA attributed to Vector Group Ltd.
$
260,904

 
$
73,738

 
$
73,398

 
$
206,933

 
$
191,362

 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
 
Tobacco
$
267,921

 
$
74,980

 
$
65,339

 
$
208,358

 
$
189,646

Real Estate (h)
11,188

 
2,868

 
11,697

 
11,437

 
11,403

Corporate and Other
(16,576
)
 
(4,110
)
 
(3,543
)
 
(12,862
)
 
(11,316
)
Total
$
262,533

 
$
73,738

 
$
73,493

 
$
206,933

 
$
189,733

 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA Attributed to Vector Group Ltd. by Segment
 
 
 
 
 
 
 
 
 
Tobacco
$
267,921

 
$
74,980

 
$
65,339

 
$
208,358

 
$
189,646

Real Estate (h)
9,559

 
2,868

 
11,602

 
11,437

 
13,032

Corporate and Other
(16,576
)
 
(4,110
)
 
(3,543
)
 
(12,862
)
 
(11,316
)
Total
$
260,904

 
$
73,738

 
$
73,398

 
$
206,933

 
$
191,362

                                      

a.
Represents income recognized from changes in the fair value of the derivatives embedded in the Company’s convertible debt.
b.
Represents equity in (earnings) losses recognized from the Company’s investment in certain real estate businesses that are not consolidated in its financial results.
c.
Represents amortization of stock-based compensation.
d.
Represents accruals for settlements of judgment expenses in the Engle progeny tobacco litigation and proceeds received from a litigation award at Douglas Elliman Realty, LLC.
e.
Represents the Company’s tobacco segment’s settlement of a long-standing dispute related to the Master Settlement Agreement.
f.
Represents purchase accounting adjustments recorded in the periods presented in connection with the increase of the Company’s ownership of Douglas Elliman Realty, LLC, which occurred in 2013.
g.
Represents 29.41% of Douglas Elliman Realty LLC's Adjusted EBITDA in the respective periods. On December 31, 2018, the Company increased its ownership of Douglas Elliman Realty, LLC from 70.59% to 100%.
h.
Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of $10,486 for the last twelve months ended September 30, 2019 and $3,368, $12,048, $11,026 and $11,824 for the three and nine months ended September 30, 2019 and 2018, respectively. Amounts reported in this footnote reflect 100% of Douglas Elliman Realty, LLC’s entire Adjusted EBITDA.




TABLE 3
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED NET INCOME
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)


 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
 
 
 
 
Net income attributed to Vector Group Ltd.
$
36,008

 
$
12,002

 
$
90,268

 
$
37,031

 
 
 
 
 
 
 
 
Change in fair value of derivatives embedded within convertible debt
(6,182
)
 
(10,005
)
 
(20,319
)
 
(31,289
)
Non-cash amortization of debt discount on convertible debt
5,746

 
22,871

 
19,718

 
61,450

Litigation settlement and judgment expense (income) (a)
240

 
—

 
895

 
(1,944
)
Impact of MSA settlement (b)
—

 
—

 
—

 
(6,298
)
Impact of net interest expense capitalized to real estate ventures
412

 
(596
)
 
2,488

 
1,775

Douglas Elliman Realty, LLC purchase accounting adjustments (c)
—

 
385

 
—

 
1,140

Adjustment to reflect additional 29.41% of net income from Douglas Elliman Realty, LLC (d)
—

 
2,931

 
—

 
2,287

Total adjustments
216

 
15,586

 
2,782

 
27,121

 
 
 
 
 
 
 
 
Tax expense related to adjustments
(59
)
 
(4,459
)
 
(764
)
 
(7,672
)
 
 
 
 
 
 
 
 
Adjusted Net Income attributed to Vector Group Ltd.
$
36,165

 
$
23,129

 
$
92,286

 
$
56,480

 
 
 
 
 
 
 
 
Per diluted common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Net Income applicable to common shares attributed to Vector Group Ltd.
$
0.23

 
$
0.15

 
$
0.59

 
$
0.35


                                      

a.
Represents accruals for settlements of judgment expenses in the Engle progeny tobacco litigation and proceeds received from a litigation award at Douglas Elliman Realty, LLC.
b.
Represents the Company’s tobacco segment’s settlement of a long-standing dispute related to the Master Settlement Agreement.
c.
Represents 100% of purchase accounting adjustments in the periods presented for assets acquired in connection with the Company’s acquisition of the 20.59% of Douglas Elliman Realty, LLC on December 31, 2013.
d.
Represents 29.41% of Douglas Elliman Realty LLC's net income in the respective 2018 period. On December 31, 2018, the Company increased its ownership of Douglas Elliman Realty, LLC from 70.59% to 100%.







    







TABLE 4
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED OPERATING INCOME
(Unaudited)
(Dollars in Thousands)


 
LTM
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
September 30,
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
Operating income
$
233,640

 
$
66,720

 
$
66,018

 
$
185,554

 
$
175,963

 
 
 
 
 
 
 
 
 
 
   Litigation settlement and judgment expense (income) (a)
1,055

 
240

 
—

 
895

 
(1,944
)
Impact of MSA settlement (b)
—

 
—

 
—

 
—

 
(6,298
)
Douglas Elliman Realty, LLC purchase accounting adjustments (c)
265

 
—

 
385

 
—

 
1,140

Total adjustments
1,320

 
240

 
385

 
895

 
(7,102
)
 
 
 
 
 
 
 
 
 
 
Adjusted Operating Income (d)
$
234,960

 
$
66,960

 
$
66,403

 
$
186,449

 
$
168,861


                                      

a.
Represents accruals for settlements of judgment expenses in the Engle progeny tobacco litigation and proceeds received from a litigation award at Douglas Elliman Realty, LLC.
b.
Represents the Company’s tobacco segment’s settlement of a long-standing dispute related to the Master Settlement Agreement.
c.
Amounts represent purchase accounting adjustments recorded in the periods presented in connection with the increase of the Company’s ownership of Douglas Elliman Realty, LLC, which occurred in 2013.
d.
Does not include a reduction for 29.41% non-controlling interest in Douglas Elliman Realty, LLC. for the last twelve months ended September 30, 2019 and three and nine months ended September 30, 2018.





TABLE 5
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF TOBACCO ADJUSTED OPERATING INCOME
AND TOBACCO ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands)


 
LTM
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
September 30,
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
Tobacco Adjusted Operating Income:
 
 
 
 
 
 
 
 
 
Operating income from tobacco segment
$
258,936

 
$
72,799

 
$
63,259

 
$
201,594

 
$
189,185

 
 
 
 
 
 
 
 
 
 
   Litigation settlement and judgment expense (a)
1,055

 
240

 
—

 
895

 
525

Impact of MSA settlement (b)
—

 
—

 
—

 
—

 
(6,298
)
Total adjustments
1,055

 
240

 
—

 
895

 
(5,773
)
 
 
 
 
 
 
 
 
 
 
Tobacco Adjusted Operating Income
$
259,991

 
$
73,039

 
$
63,259

 
$
202,489

 
$
183,412


 
LTM
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
September 30,
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
Tobacco Adjusted EBITDA:
 
 
 
 
 
 
 
 
 
Operating income from tobacco segment
$
258,936

 
$
72,799

 
$
63,259

 
$
201,594

 
$
189,185

 
 
 
 
 
 
 
 
 
 
   Litigation settlement and judgment expense (a)
1,055

 
240

 
—

 
895

 
525

Impact of MSA settlement (b)
—

 
—

 
—

 
—

 
(6,298
)
Total adjustments
1,055

 
240

 
—

 
895

 
(5,773
)
 
 
 
 
 
 
 
 
 
 
Tobacco Adjusted Operating Income
259,991

 
73,039

 
63,259

 
202,489

 
183,412

 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
7,887

 
1,941

 
2,059

 
5,848

 
6,171

Stock-based compensation expense
43

 
—

 
21

 
21

 
63

Total adjustments
7,930

 
1,941

 
2,080

 
5,869

 
6,234

 
 
 
 
 
 
 
 
 
 
Tobacco Adjusted EBITDA
$
267,921

 
$
74,980

 
$
65,339

 
$
208,358

 
$
189,646



                                      

a.
Represents accruals for settlements of judgment expenses in the Engle progeny tobacco litigation.
b.
Represents the Company’s tobacco segment’s settlement of a long-standing dispute related to the Master Settlement Agreement.





TABLE 6
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF REAL ESTATE SEGMENT (NEW VALLEY LLC) ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands)
 
LTM
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
September 30,
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
Net income (loss) attributed to Vector Group Ltd. from subsidiary non-guarantors (a)
$
29,162

 
$
7,246

 
$
4,703

 
$
13,468

 
$
(915
)
Interest expense (a)
689

 
228

 
7

 
685

 
63

Income tax expense (benefit) (a)
11,288

 
3,023

 
1,971

 
5,513

 
(1,826
)
Net (loss) income attributed to non-controlling interest (a)
(675
)
 
—

 
3,026

 
80

 
657

Depreciation and amortization
9,240

 
2,240

 
2,398

 
6,765

 
7,105

EBITDA
$
49,704

 
$
12,737

 
$
12,105

 
$
26,511

 
$
5,084

Loss from non-guarantors other than New Valley LLC
72

 
15

 
18

 
57

 
71

Equity in (earnings) losses from real estate ventures (b)
(34,826
)
 
(8,050
)
 
(294
)
 
(12,002
)
 
8,378

Purchase accounting adjustments (c)
63

 
—

 
184

 
—

 
545

Litigation settlement and judgment income (d)
—

 
—

 
—

 
—

 
(2,469
)
Other, net
(3,849
)
 
(1,808
)
 
(342
)
 
(3,144
)
 
(1,020
)
Adjusted EBITDA
$
11,164

 
$
2,894

 
$
11,671

 
$
11,422

 
$
10,589

Adjusted EBITDA attributed to non-controlling interest
(1,471
)
 
—

 
(3,638
)
 
—

 
(1,848
)
Adjustment to reflect additional 29.41% of Adjusted EBITDA from Douglas Elliman Realty, LLC (e)
(158
)
 
—

 
3,543

 
—

 
3,477

Adjusted EBITDA attributed to New Valley LLC
$
9,535

 
$
2,894

 
$
11,576

 
$
11,422

 
$
12,218

 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
 
Real Estate (f)
$
11,188

 
$
2,868

 
$
11,697

 
$
11,437

 
$
11,403

Corporate and Other
(24
)
 
26

 
(26
)
 
(15
)
 
(814
)
Total (g)
$
11,164

 
$
2,894

 
$
11,671

 
$
11,422

 
$
10,589

 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA Attributed to New Valley LLC by Segment
 
 
 
 
 
 
 
 
 
Real Estate (f)
$
9,559

 
$
2,868

 
$
11,602

 
$
11,437

 
$
13,032

Corporate and Other
(24
)
 
26

 
(26
)
 
(15
)
 
(814
)
Total (g)
$
9,535

 
$
2,894

 
$
11,576

 
$
11,422

 
$
12,218

             
a.
Amounts are derived from Vector Group Ltd.’s Condensed Consolidated Financial Statements. See Note entitled “Condensed Consolidating Financial Information” contained in Vector Group Ltd.’s Form 10-Q for the three and nine months ended September 30, 2019.
b.
Represents equity in (earnings) losses recognized from the Company’s investment in certain real estate businesses that are not consolidated in its financial results.
c.
Represents purchase accounting adjustments recorded in the periods presented in connection with the increase of the Company’s ownership of Douglas Elliman Realty, LLC, which occurred in 2013.
d.
Represents proceeds received from a litigation award at Douglas Elliman Realty, LLC.
e.
Represents 29.41% of Douglas Elliman Realty LLC's Adjusted EBITDA in the respective periods. On December 31, 2018, the Company increased its ownership of Douglas Elliman Realty, LLC from 70.59% to 100%.
f.
Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of $10,486 for the last twelve months ended September 30, 2019 and $3,368, $12,048, $11,026 and $11,824 for the three and nine months ended September 30, 2019 and 2018, respectively. Amounts reported in this footnote reflect 100% of Douglas Elliman Realty, LLC’s entire Adjusted EBITDA.
g.
New Valley’s Adjusted EBITDA does not include an allocation of Vector Group Ltd.’s “Corporate and Other” segment expenses (for purposes of computing Adjusted EBITDA contained in Table 2 of this press release) of $16,576 for the last twelve months ended September 30, 2019 and $4,110, $3,543, $12,862 and $11,316 for the three and nine months ended September 30, 2019 and 2018, respectively.





TABLE 7
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF DOUGLAS ELLIMAN REALTY, LLC ADJUSTED EBITDA
AND DOUGLAS ELLIMAN REALTY, LLC ADJUSTED EBITDA ATTRIBUTED TO REAL ESTATE SEGMENT
(Unaudited)
(Dollars in Thousands)
 
LTM
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
September 30,
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Net income attributed to Douglas Elliman Realty, LLC
$
4,041

 
$
1,893

 
$
9,965

 
$
6,617

 
$
7,773

Interest expense
8

 
1

 
3

 
6

 
51

Income tax expense (benefit)
365

 
265

 
(85
)
 
366

 
401

Depreciation and amortization
8,831

 
2,135

 
2,295

 
6,457

 
6,797

Douglas Elliman Realty, LLC EBITDA
$
13,245

 
$
4,294

 
$
12,178

 
$
13,446

 
$
15,022

Equity in earnings from real estate ventures (a)
(1,484
)
 
(458
)
 
(274
)
 
(1,392
)
 
(1,151
)
Purchase accounting adjustments (b)
63

 
—

 
184

 
—

 
545

Litigation settlement and judgment income (c)
—

 
—

 
—

 
—

 
(2,469
)
Other, net
(1,338
)
 
(468
)
 
(40
)
 
(1,028
)
 
(123
)
Douglas Elliman Realty, LLC Adjusted EBITDA
$
10,486

 
$
3,368

 
$
12,048

 
$
11,026

 
$
11,824

Douglas Elliman Realty, LLC Adjusted EBITDA attributed to non-controlling interest
158

 
—

 
(3,543
)
 
—

 
(3,477
)
Adjustment to reflect additional 29.41% of Adjusted EBITDA from Douglas Elliman Realty, LLC, which represents the additional interest acquired on December 31, 2018 (d)
(158
)
 
—

 
3,543

 
—

 
3,477

Douglas Elliman Realty, LLC Adjusted EBITDA attributed to Real Estate Segment
$
10,486

 
$
3,368

 
$
12,048

 
$
11,026

 
$
11,824

             
a.
Represents equity in earnings recognized from the Company’s investment in certain real estate businesses that are not consolidated in its financial results.
b.
Represents purchase accounting adjustments recorded in the periods presented in connection with the increase of the Company’s ownership of Douglas Elliman Realty, LLC, which occurred in 2013.
c.
Represents proceeds received from a litigation award at Douglas Elliman Realty, LLC.
d.
Represents 29.41% of Douglas Elliman Realty LLC's Adjusted EBITDA in the respective periods. On December 31, 2018, the Company increased its ownership of Douglas Elliman Realty, LLC from 70.59% to 100%.