CORRECTING and REPLACING Vector Group Reports Second Quarter 2014 Financial Results

CORRECTION...by Vector Group Ltd.

MIAMI--()--Please replace the release with the following corrected version due to multiple revisions.

The corrected release reads:

VECTOR GROUP REPORTS SECOND QUARTER 2014 FINANCIAL RESULTS

Vector Group Ltd. (NYSE:VGR) today announced financial results for the three and six months ended June 30, 2014.

On December 13, 2013, Vector Group increased its ownership of Douglas Elliman Realty, LLC from 50% to 70.59%. Consequently, after December 13, 2013, Vector Group consolidates the operations and financial position of Douglas Elliman Realty in its financial statements. It had previously accounted for its interest in Douglas Elliman under the equity method of accounting.

GAAP Financial Results

Second quarter 2014 revenues were $406.6 million, compared to revenues of $256.2 million in the second quarter of 2013. The increase in revenues in 2014 was primarily due to the acquisition and consolidated presentation of Douglas Elliman. The Company recorded operating income of $60.3 million in the second quarter of 2014, compared to operating income of $44.2 million in the second quarter of 2013. Net income attributed to Vector Group Ltd. for the 2014 second quarter was $7.9 million, or $0.08 per diluted common share, compared to net income of $13.5 million, or $0.14 per diluted common share, in the 2013 second quarter.

For the six months ended June 30, 2014, revenues were $753.8 million, compared to $502.4 million for the first six months of 2013. The increase in revenues in 2014 was primarily due to the acquisition and consolidated presentation of Douglas Elliman. The Company recorded operating income of $103.0 million for the 2014 six-month period, compared to operating income of $87.3 million for the 2013 six-month period. Net income attributed to Vector Group Ltd. for the 2014 six-month period was $10.5 million, or $0.11 per diluted common share, compared to net income of $11.8 million, or $0.13 per diluted common share, for the first six months of 2013.

Non-GAAP Financial Results

The Company's non-GAAP financial results are presented assuming the Company's acquisition of its additional 20.59% interest in Douglas Elliman Realty, LLC, and the related purchase accounting adjustments, occurred prior to January 1, 2013. Non-GAAP financial results also include adjustments for litigation settlement and judgment expenses in the Company's tobacco business, a one-time charge in 2013 related to the extinguishment of the Company's 11% Senior Secured Notes, non-cash stock compensation expense (for purposes of Pro-forma Adjusted EBITDA only), and non-cash interest items associated with the Company's convertible debt. Reconciliations of non-GAAP financial results to the comparable GAAP financial results for the three and six months ended June 30, 2014 and 2013 are included in Tables 2, 3, 4, 5 and 6.

Three months ended June 30, 2014 compared to the three months ended June 30, 2013

Second quarter 2014 Pro-forma Adjusted Revenues (as described in Table 2 attached hereto) were $406.6 million compared to $369.9 million in 2013. The increase was primarily due to an increase in real estate revenues at Douglas Elliman and from the sale of the Company's Indian Creek, Florida property.

Pro-forma Adjusted EBITDA attributed to Vector Group (as described below and in Table 3 attached hereto) was $59.2 million for the second quarter of 2014 as compared to $55.8 million for the second quarter of 2013. The increase in Pro-forma Adjusted EBITDA attributed to Vector Group were primarily attributable to higher profits in the tobacco and real estate segments.

Pro-forma Adjusted Net Income (as described below and in Table 4 attached hereto) was $15.5 million or $0.16 per diluted share for the three months ended June 30, 2014 and $17.8 million or $0.19 per diluted share for the three months ended June 30, 2013.

Pro-forma Adjusted Operating Income (as described below and in Table 5 attached hereto) was $60.6 million for the three months ended June 30, 2014 and $55.4 million for the three months ended June 30, 2013.

Six months ended June 30, 2014 compared to the six months ended June 30, 2013

For the six months ended June 30, 2014 Pro-forma Adjusted Revenues (as described in Table 2 attached hereto) were $755.5 million compared to $690.6 million in 2013. The increase was primarily due to an increase in real estate revenues at Douglas Elliman.

Pro-forma Adjusted EBITDA attributed to Vector Group (as described below and in Table 3 attached hereto) was $108.9 million for the six months ended June 30, 2014 as compared to $97.1 million for the six-month period of 2013. The increase in Pro-forma Adjusted EBITDA attributed to Vector Group were primarily attributable to higher profits in the tobacco and real estate segments.

Pro-forma Adjusted Net Income (as described below and in Table 4 attached hereto) was $30.1 million or $0.31 per diluted share for the six months ended June 30, 2014 and $28.9 million or $0.31 per diluted share for the six months ended June 30, 2013.

Pro-forma Adjusted Operating Income (as described below and in Table 5 attached hereto) was $108.2 million for the six months ended June 30, 2014 and $92.8 million for the six months ended June 30, 2013.

Tobacco Business Financial Results

For the second quarter 2014, the Company's tobacco business had revenues of $250.6 million, compared to $249.1 million for the second quarter 2013. The increase in revenues was due to favorable net pricing variances partially offset by a 2.7% decline in sales volume. Tobacco Adjusted Operating Income (described below and included in Table 6 attached hereto) for the second quarter 2014 and 2013 was $50.1 million and $46.9 million, respectively.

For the six months ended June 30, 2014, the Company's tobacco business had revenues of $483.9 million, compared to $489.5 million for the six months ended June 30, 2013. The decline in revenues was primarily due to a 4.3% decline in sales volume partially offset by favorable net pricing variances. Tobacco Adjusted Operating Income (described below and included in Table 6 attached hereto) for the six months ended June 30, 2014 and 2013 was $94.5 million and $88.5 million, respectively.

For the three and six months ended June 30, 2014, the Company's tobacco business had conventional cigarette sales of approximately 2.18 billion units and 4.21 billion units, respectively, compared to 2.24 billion units and 4.40 billion for the three and six months ended June 30, 2013.

Real Estate Business Financial Results

For the second quarter 2014, the Company's real estate segment had Pro-forma Adjusted Revenues of $153.5 million, compared to $120.8 million for the second quarter 2013. For the six months ended June 30, 2014, the Company's real estate segment's Pro-forma Adjusted Revenues were $263.2 million compared to $201.1 million for the six months ended June 30, 2013. The increase in revenues was primarily due to an increase in revenues at Douglas Elliman combined with the sale of the Company's Indian Creek property. For the second quarter 2014, Real Estate Pro-forma Adjusted EBITDA attributed to the Company were $12.6 million, compared to $9.3 million for the second quarter 2013. For the six months ended June 30, 2014, Real Estate Pro-forma Adjusted EBITDA attributed to the Company were $19.6 million, compared to $10.2 million for the six months ended June 30, 2013.

Douglas Elliman's results are included in the Real Estate segment. Douglas Elliman's Pro-Forma Adjusted Revenues for the second quarter 2014 were $137.9 million, compared to $119.5 million for the second quarter 2013. For the six months ended June 30, 2014, Douglas Elliman's Pro-forma Adjusted Revenues were $245.5 million compared to $197.7 million for the six months ended June 30, 2013. For the second quarter 2014, Douglas Elliman's Pro-forma Adjusted EBITDA were $15.8 million ($11.1 million attributed to the Company), compared to $13.5 million ($9.5 million attributed to the Company) for the second quarter 2013. For the six months ended June 30, 2014, Douglas Elliman's Pro-forma Adjusted EBITDA were $23.2 million ($16.4 million attributed to the Company), compared to $14.1 million ($9.9 million attributed to the Company) for the six months ended June 30, 2013.

For the three and six months ended June 30, 2014, Douglas Elliman achieved closed sales of approximately $4.6 billion and $8.1 billion, respectively, compared to $3.9 billion and $6.3 billion for the three and six months ended June 30, 2013.

Non-GAAP Financial Measures

Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusted Operating Income are financial measures not prepared in accordance with generally accepted accounting principles (“GAAP”). The Company believes that Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusted Operating Income are important measures that supplement discussions and analysis of its results of operations and enhances an understanding of its operating performance. The Company believes Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusted Operating Income provide investors and analysts with a useful measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. Management uses Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusted Operating Income 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 (Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusted Operating Income) of the Company's business. While management considers Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusted Operating Income 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, Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusted Operating Income are susceptible to varying calculations and the Company's measurement of Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusted Operating Income may not be comparable to those of other companies. Attached hereto as Tables 2, 3, 4, 5 and 6 is information relating to the Company's Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA, Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income and Tobacco Adjusting Operating Income for the three and six months ended June 30, 2014 and 2013.

Conference Call to Discuss Second Quarter 2014 Results

As previously announced, the Company will host a conference call and webcast on Thursday, July 31, 2014 at 9:00 A.M. (ET) to discuss second quarter 2014 results. Investors can access the call by dialing 800-859-8150 and entering 95591962 as the conference ID number. The call will also be available via live webcast at www.investorcalendar.com. 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 July 31, 2014 through August 31, 2014. To access the replay, dial 877-656-8905 and enter 95591962 as the conference ID number. The archived webcast will also be available at www.investorcalendar.com for one year.

Vector Group is a holding company that indirectly owns Liggett Group LLC, Vector Tobacco Inc. and Zoom E-Cigs LLC and directly owns New Valley LLC, which owns a controlling interest in 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Amounts)

 
  Three Months Ended   Six Months Ended
June 30, June 30,
2014     2013   2014     2013  
(Unaudited) (Unaudited)
Revenues    
Tobacco* $ 250,556 $ 249,120 $ 483,948 $ 489,522
Real estate 153,488 7,106 261,532 12,873
E-Cigarettes 2,569     8,369    
Total revenues 406,613 256,226 753,849 502,395
 
Expenses:
Cost of sales:
Tobacco* 179,773 180,430 347,939 353,386
Real estate 97,763 6,015 165,087 10,236
E-Cigarettes 1,746     5,293    
Total cost of sales 279,282 186,445 518,319 363,622
 
Operating, selling, administrative and general expenses 67,023   25,541   132,500   51,437  
Operating income 60,308 44,240 103,030 87,336
 
Other income (expenses):
Interest expense (44,183 ) (32,086 ) (79,636 ) (65,462 )
Loss on extinguishment of debt (21,458 )
Change in fair value of derivatives embedded within convertible debt 1,970 2,450 320 5,499
Acceleration of interest expense related to debt conversion (439 ) (4,118 )
Equity income from non-consolidated real estate businesses (1,808 ) 6,804 (256 ) 7,285
Equity (loss) income on long-term investments (273 ) 846 633 823
(Loss) gain on sale of investment securities available for sale (18 ) (197 ) (71 ) 5,209
Other, net 3,575   1,471   5,701   2,280  
Income before provision for income taxes 19,132 23,528 25,603 21,512
Income tax expense 6,101   10,017   9,043   9,682  
 
Net income 13,031 13,511 16,560 11,830
 
Net income attributed to non-controlling interest (5,106 )   (6,055 )  
 
Net income attributed to Vector Group Ltd. $ 7,925   $ 13,511   $ 10,505   $ 11,830  
 
Per basic common share:
 
Net income applicable to common shares attributed to Vector Group Ltd. $ 0.08   $ 0.14   $ 0.11   $ 0.13  
 
Per diluted common share:
 
Net income applicable to common shares attributed to Vector Group Ltd. $ 0.08   $ 0.14   $ 0.11   $ 0.13  
 
Cash distributions and dividends declared per share $ 0.40   $ 0.38   $ 0.80   $ 0.76  
* Revenues and Cost of goods sold include excise taxes of $109,695, $112,596, $212,108 and $221,507, respectively.
 
 

TABLE 2

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF PRO-FORMA ADJUSTED REVENUES

(Unaudited)

(Dollars in Thousands)

 
  Three Months Ended   Six Months Ended
June 30, June 30,
2014     2013   2014     2013
 
Revenues $ 406,613     $ 256,226 $ 753,849     $ 502,395
 
Reclassification of revenues as a result of the consolidation of Douglas Elliman (a) 113,647 188,184
Purchase accounting adjustments (b) 29     1,683  
Total adjustments 29 113,647 1,683 188,184
 
Pro-forma Adjusted Revenues $ 406,642   $ 369,873   $ 755,532   $ 690,579
 
Pro-forma Adjusted Revenues by Segment
Tobacco $ 250,556 $ 249,120 $ 483,948 $ 489,522
Real Estate (c) 153,517 120,753 263,215 201,057
Corporate and Other 2,569     8,369  
Total $ 406,642   $ 369,873   $ 755,532   $ 690,579

_____________________

 
a.   Represents revenues of Douglas Elliman Realty, LLC in the respective 2013 periods. On December 13, 2013, the Company increased its ownership of Douglas Elliman Realty, LLC from 50% to 70.59%. Consequently, after December 13, 2013, the Company consolidates the operations and financial position of Douglas Elliman Realty, LLC in its financial statements. The Company had previously accounted for its interest in Douglas Elliman Realty, LLC under the equity method and revenues from Douglas Elliman Realty, LLC were not included in the Company's revenues.
b. Amounts represent one-time purchase accounting adjustments to fair value for deferred revenues recorded in connection with the increase of the Company's ownership of Douglas Elliman Realty, LLC on December 13, 2013.
c. Includes Pro-Forma Adjusted Revenues from Douglas Elliman Realty, LLC of $137,949, $119,539, $245,461, and $197,703 for the three and six months ended June 30, 2014 and 2013, respectively.
 
 

TABLE 3

VECTOR GROUP LTD. AND SUBSIDIARIES

COMPUTATION OF PRO-FORMA ADJUSTED EBITDA

(Unaudited)

(Dollars in Thousands)

 
  Three Months Ended   Six Months Ended
June 30, June 30,
2014     2013   2014     2013  
 
Net income attributed to Vector Group Ltd. $ 7,925   $ 13,511 $ 10,505   $ 11,830
Interest expense 44,183 32,086 79,636 65,462
Income tax expense 6,101 10,017 9,043 9,682
Net income attributed to non-controlling interest 5,106 6,055
Depreciation and amortization 5,462   2,637   12,554   5,233  
EBITDA $ 68,777 $ 58,251 $ 117,793 $ 92,207
Change in fair value of derivatives embedded within convertible debt (a) (1,970 ) (2,450 ) (320 ) (5,499 )
Equity loss (gain) on long-term investments (b) 273 (846 ) (633 ) (823 )
Loss (gain) on sale of investment securities available for sale 18 197 71 (5,209 )
Equity income from non-consolidated real estate businesses (c) 1,808 (6,804 ) 256 (7,285 )
Loss on extinguishment of debt 21,458
Acceleration of interest expense related to debt conversion 439 4,118
Stock-based compensation expense (d) 464 686 987 1,255
Litigation settlement and judgment expense (e) 1,500
Impact of MSA Settlement (f) (1,419 ) (1,345 ) (1,419 ) (6,947 )
Reclassification of EBITDA as a result of the consolidation of Douglas Elliman (g) 13,554 14,477
Other, net (3,575 ) (1,471 ) (5,701 ) (2,280 )
Pro-forma Adjusted EBITDA $ 64,815 $ 59,772 $ 116,652 $ 101,354
Pro-forma Adjusted EBITDA attributed to non-controlling interest (5,604 ) (3,986 ) (7,776 ) (4,257 )
Pro-forma Adjusted EBITDA attributed to Vector Group Ltd. $ 59,211   $ 55,786   $ 108,876   $ 97,097  
 
Pro-forma Adjusted EBITDA by Segment
Tobacco $ 53,273 $ 49,323 $ 100,188 $ 93,271
Real Estate (h)

18,243

13,299

27,334

14,436
Corporate and Other (6,701 ) (2,850 ) (10,870 ) (6,353 )
Total $

64,815

  $ 59,772   $

116,652

  $ 101,354  
 
Pro-forma Adjusted EBITDA Attributed to Vector Group by Segment
Tobacco $ 53,273 $ 49,323 $ 100,188 $ 93,271
Real Estate (i)

12,639

9,313

19,558

10,179
Corporate and Other (6,701 ) (2,850 ) (10,870 ) (6,353 )
Total $

59,211

  $ 55,786   $

108,876

  $ 97,097  

_____________________

 

a.   Represents income or losses recognized from changes in the fair value of the derivatives embedded in the Company's convertible debt.
b. Represents income or losses recognized on long-term investments that the Company accounts for under the equity method.
c. Represents equity income recognized from the Company's investment in certain real estate businesses that are not consolidated in its financial results.
d. Represents amortization of stock-based compensation.
e. Represents accrual for a settlement of an Engle progeny judgment.
f. Represents the Company's tobacco business's settlement of a long-standing dispute related to the Master Settlement Agreement.
g. Represents Adjusted EBITDA of Douglas Elliman Realty, LLC in the respective 2013 periods. On December 13, 2013, the Company increased its ownership of Douglas Elliman Realty, LLC from 50% to 70.59%. Consequently, after December 13, 2013, the Company consolidates the operations and financial position of Douglas Elliman Realty, LLC in its financial statements . The Company had previously accounted for its interest in Douglas Elliman Realty, LLC under the equity method, and operating income as well as depreciation and amortization expense from Douglas Elliman Realty, LLC were not included in the Company's Adjusted EBITDA.
h. Includes $15,789, $13,465, $23,175 and $14,146 of Pro-forma Adjusted EBITDA for Douglas Elliman Realty, LLC for the three and six months ended June 30, 2014 and 2013, respectively. Amounts reported in this footnote reflect 100% of Douglas Elliman Realty, LLC's entire Pro-forma Adjusted EBITDA.
i. Includes $11,145, $9,479, $16,359 and $9,889 of Pro-forma Adjusted EBITDA for Douglas Elliman Realty, LLC less non-controlling interest for the three and six months ended June 30, 2014 and 2013, respectively. Amounts reported in this footnote have adjusted Douglas Elliman Realty, LLC's Pro-forma Adjusted EBITDA for non-controlling interest.
 
 

TABLE 4

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF PRO-FORMA ADJUSTED NET INCOME

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts)

 
  Three Months Ended   Six Months Ended
June 30, June 30,
2014     2013   2014     2013  
 
Net income attributed to Vector Group Ltd. $ 7,925   $ 13,511 $ 10,505   $ 11,830
 
Acceleration of interest expense related to debt conversion 439 4,118
Change in fair value of derivatives embedded within convertible debt (1,970 ) (2,450 ) (320 ) (5,499 )
Non-cash amortization of debt discount on convertible debt

14,691

8,464

27,147

15,812
Loss on extinguishment of 11% Senior Secured Notes due 2015 21,458
Litigation settlement and judgment expense (a) 1,500
Impact of MSA Settlement (b) (1,419 ) (1,345 ) (1,419 ) (6,947 )
Adjustment to reflect additional 20.59% of net income from Douglas Elliman Realty, LLC (c) 2,571 2,590
Out-of-period adjustment related to Douglas Elliman acquisition in 2013 (d) (1,231 )
Douglas Elliman Realty, LLC purchase accounting adjustments (e) 1,223     3,579    
Total adjustments

12,964

7,240

33,374

27,414
 
Tax expense related to adjustments

(5,360

) (2,947 )

(13,800

) (10,354 )
               
Pro-forma Adjusted Net Income attributed to Vector Group Ltd. $

15,529

  $ 17,804   $

30,079

  $ 28,890  
 
Per diluted common share:
 
Pro-forma Adjusted Net Income applicable to common shares attributed to Vector Group Ltd. $

0.16

  $ 0.19   $

0.31

  $ 0.31  

_________________

 
a.   Represents accrual for a settlement of an Engle progeny judgment.
b. Represents the Company's tobacco segment's settlement of a long-standing dispute related to the Master Settlement Agreement.
c. Represents 20.59% of Douglas Elliman Realty LLC's net income in the respective 2013 periods. On December 13, 2013, the Company increased its ownership of Douglas Elliman Realty, LLC from 50% to 70.59%. Consequently, after December 13, 2013, the Company includes an additional 20.59% of Adjusted Net Income from Douglas Elliman Realty, LLC in the Company's Adjusted Net Income.
d. Represents an out-of-period adjustment related to a non-accrual of a receivable from Douglas Elliman in the fourth quarter of 2013 and would have increased the Company’s gain on acquisition of Douglas Elliman in 2013.
e. Amounts represent 70.59% of one-time purchase accounting adjustments to fair value for assets acquired in connection with the increase of the Company's ownership of Douglas Elliman Realty, LLC on December 13, 2013.
 
 

TABLE 5

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF PRO-FORMA ADJUSTED OPERATING INCOME

(Unaudited)

(Dollars in Thousands)

 
  Three Months Ended   Six Months Ended
June 30, June 30,
2014     2013   2014     2013  
 
Operating income $ 60,308   $ 44,240 $ 103,030   $ 87,336
 
Litigation settlement and judgment expense (a) 1,500
Impact of MSA Settlement (b) (1,419 ) (1,345 ) (1,419 ) (6,947 )
Reclassification of operating income as a result of the consolidation of Douglas Elliman Realty, LLC (c) 12,514 12,408
Douglas Elliman purchase accounting adjustments (d) 1,733     5,070    
Total adjustments 314 11,169 5,151 5,461
 
Pro-forma Adjusted Operating Income (e) $ 60,622   $ 55,409   $ 108,181   $ 92,797  

_________________

 
a.   Represents accrual for a settlement of an Engle progeny judgment.
b. Represents the Company's tobacco segment's settlement of a long-standing dispute related to the Master Settlement Agreement.
c. Represents Adjusted Operating Income of Douglas Elliman Realty, LLC in the respective 2013 periods. On December 13, 2013, the Company increased its ownership of Douglas Elliman Realty, LLC from 50% to 70.59%. Consequently, after December 13, 2013, the Company consolidates the operations and financial position of Douglas Elliman Realty in its financial statements. The Company had previously accounted for its interest in Douglas Elliman under the equity method and operating income from Douglas Elliman Realty, LLC was not included in the Company's operating income.
d. Amounts represent one-time purchase accounting adjustments to fair value for assets acquired in connection with the increase of the Company's ownership of Douglas Elliman Realty, LLC on December 13, 2013.
e. Does not include a reduction for 29.41% non-controlling interest in Douglas Elliman Realty, LLC.
 
 

TABLE 6

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF TOBACCO ADJUSTED OPERATING INCOME

(Unaudited)

(Dollars in Thousands)

 
Three Months Ended   Six Months Ended
June 30, June 30,
2014     2013   2014     2013  
 
Operating income from tobacco business $ 51,506   $ 48,294 $ 94,402   $ 95,454
 
Litigation settlement and judgment expense (a) 1,500
Impact of MSA Settlement (b) (1,419 ) (1,345 ) (1,419 ) (6,947 )
Total adjustments (1,419 ) (1,345 ) 81 (6,947 )
 
Tobacco Adjusted Operating Income $ 50,087   $ 46,949   $ 94,483   $ 88,507  

________________

 
a.   Represents accrual for a settlement of an Engle progeny judgment.
b. Represents the Company's tobacco segment's settlement of a long-standing dispute related to the Master Settlement Agreement.
 

Contacts

Sard Verbinnen & Co
Paul Caminiti/Emily Deissler/Benjamin Spicehandler
212-687-8080

Release Summary

VECTOR GROUP REPORTS SECOND QUARTER 2014 FINANCIAL RESULTS

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Contacts

Sard Verbinnen & Co
Paul Caminiti/Emily Deissler/Benjamin Spicehandler
212-687-8080