Vector Group Reports Fourth Quarter and Full Year 2019 Financial Results

MIAMI, Fla.--()--Vector Group Ltd. (NYSE:VGR) today announced financial results for the three months and year ended December 31, 2019.

GAAP Financial Results

Fourth quarter 2019 revenues were $439.6 million, compared to revenues of $445.9 million in the fourth quarter of 2018. The Company recorded operating income of $45.6 million in the fourth quarter of 2019, compared to operating income of $48.1 million in the fourth quarter of 2018. Net income attributed to Vector Group Ltd. for the fourth quarter of 2019 was $10.7 million, or $0.06 per diluted common share, compared to net income of $21.1 million, or $0.13 per diluted common share, in the fourth quarter of 2018.

For the year ended December 31, 2019 revenues were $1.90 billion, compared to revenues of $1.87 billion for the year ended December 31, 2018. The Company recorded operating income of $231.1 million for the year ended December 31, 2019, compared to operating income of $224.0 million for the year ended December 31, 2018. Net income attributed to Vector Group Ltd. for the year ended December 31, 2019 was $101.0 million, or $0.63 per diluted common share, compared to a net income of $58.1 million, or $0.35 per diluted common share, for the year ended December 31, 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, adjustment for the derivative associated with acquisition of 29.41% of Douglas Elliman Realty, LLC, 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 fourth quarter and full year ended December 31, 2019 and 2018 are included in Tables 2 through 7.

Three months ended December 31, 2019 compared to the three months ended December 31, 2018

Fourth quarter of 2019 Adjusted EBITDA attributed to Vector Group (as described in Table 2 attached hereto) were $52.5 million, compared to $54.0 million for the fourth quarter of 2018.

Adjusted Net Income (as described in Table 3 attached hereto) was $17.8 million, or $0.11 per diluted share, for the fourth quarter of 2019, and $31.8 million, or $0.20 per diluted share, for the fourth quarter of 2018.

Adjusted Operating Income (as described in Table 4 attached hereto) was $45.7 million for the fourth quarter of 2019, compared to $48.5 million for the fourth quarter of 2018.

Year ended December 31, 2019 compared to the year ended December 31, 2018

Adjusted EBITDA attributed to Vector Group Ltd. (as described in Table 2 attached hereto) were $259.4 million for the year ended December 31, 2019, compared to $245.3 million for the year ended December 31, 2018.

Adjusted Net Income (as described in Table 3 attached hereto) was $110.1 million, or $0.70 per diluted share, for the year ended December 31, 2019, and $88.2 million, or $0.55 per diluted share, for the year ended December 31, 2018.

Adjusted Operating Income (as described in Table 4 attached hereto) was $232.1 million for the year ended December 31, 2019, compared to $217.4 million for the year ended December 31, 2018.

Tobacco Segment Financial Results

For the fourth quarter of 2019, the Tobacco segment had revenues of $260.3 million, compared to $267.1 million for the fourth quarter of 2018. For the year ended December 31, 2019, the Tobacco segment had revenues of $1.115 billion, compared to $1.111 billion for the year ended December 31, 2018.

Operating Income from the Tobacco segment was $60.0 million and $261.6 million for the three months and year ended December 31, 2019, respectively, compared to $57.3 million and $246.5 million for the three months and year ended December 31, 2018, respectively.

Non-GAAP Financial Measures

Tobacco Adjusted Operating Income (as described in Table 5 attached hereto) for the fourth quarter of 2019 and 2018 was $60.1 million and $57.5 million, respectively. Tobacco Adjusted Operating Income for the year ended December 31, 2019 and 2018 was $262.6 million and $240.9 million, respectively.

For the fourth quarter of 2019, the Tobacco segment had conventional cigarette (wholesale) shipments of approximately 2.07 billion units, compared to 2.20 billion units for the fourth quarter of 2018. For the year ended December 31, 2019, the Tobacco segment had conventional cigarette (wholesale) shipments of approximately 8.97 billion units, compared to 9.33 billion units for the year ended December 31, 2018.

Liggett’s retail market share increased to 4.2% for the fourth quarter of 2019 and 4.2% for the year ended December 31, 2019, compared to 4.1% for the fourth quarter of 2018 and 4.1% for the year ended December 31, 2018. Compared to the fourth quarter of 2018, Liggett’s retail shipments declined by 2.7% while the overall industry’s retail shipments declined by 5.0%. Compared to the year ended December 31, 2018, Liggett’s retail shipments declined by 2.8% while the overall industry’s retail shipments declined by 5.7%, according to data from Management Science Associates, Inc.

Real Estate Segment Financial Results

For the fourth quarter of 2019, the Real Estate segment had revenues of $179.2 million, compared to $178.8 million for the fourth quarter of 2018. For the year ended December 31, 2019, the Real Estate segment had revenues of $788.9 million, compared to $759.2 million for the year ended December 31, 2018. For the fourth quarter of 2019, the Real Estate segment reported a net loss of $24.9 million, compared to a net income of $15.7 million for the fourth quarter of 2018. For the year ended December 31, 2019, the Real Estate segment reported a net loss of $11.4 million, compared to net income of $14.8 million for the year ended December 31, 2018.

Douglas Elliman’s results are included in Vector Group Ltd.’s Real Estate segment. For the fourth quarter of 2019, Douglas Elliman had revenues of $178.1 million, compared to $177.6 million for the fourth quarter of 2018. For the year ended December 31, 2019, Douglas Elliman had revenues of $784.1 million, compared to $754.1 million for the year ended December 31, 2018. For the fourth quarter of 2019, Douglas Elliman reported a net loss of $0.4 million, compared to a net loss of $2.6 million for the fourth quarter of 2018. For the year ended December 31, 2019, Douglas Elliman reported net income of $6.2 million, compared to net income of $5.2 million for the year ended December 31, 2018.

Non-GAAP Financial Measures

For the fourth quarter of 2019, Real Estate Adjusted EBITDA attributed to the Company (as described in Table 6 attached hereto) were negative $5.3 million, compared to negative $1.9 million for the fourth quarter of 2018.

For the year ended December 31, 2019, Real Estate Adjusted EBITDA attributed to the Company were $6.1 million, compared to $11.2 million for the year ended December 31, 2018.

For the fourth quarter of 2019, Douglas Elliman’s Adjusted EBITDA (as described in Table 7 attached hereto) were negative $5.7 million, compared to negative $0.5 million for the fourth quarter of 2018.

For the year ended December 31, 2019, Douglas Elliman’s Adjusted EBITDA were $5.3 million, compared to $11.3 million for the year ended December 31, 2018.

For the three months and year ended December 31, 2019, Douglas Elliman achieved closed sales of approximately $6.6 billion and $28.8 billion, respectively, compared to $6.7 billion and $28.1 billion for the three months and year ended December 31, 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 months and year ended December 31, 2019 and 2018, respectively. 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 fourth quarter and full year ended December 31, 2019 and 2018.

Conference Call to Discuss Fourth Quarter and Full-Year 2019 Results

As previously announced, the Company will host a conference call and webcast on Friday, February 28, 2020 at 9:00AM (ET) to discuss its fourth quarter 2019 results. Investors can access the call by dialing 800-859-8150 and entering 59308659 as the conference ID number. The call will also be available via live webcast at https://www.webcaster4.com/Webcast/Page/2271/33131. 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 February 28, 2020 through March 13, 2020. To access the replay, dial 877-656-8905 and enter 59308659 as the conference ID number. The archived webcast will also be available at https://www.webcaster4.com/Webcast/Page/2271/33131 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

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

(Unaudited)

 

(Unaudited)

Revenues:

 

 

 

 

 

 

 

Tobacco*

$

260,323

 

 

$

267,136

 

 

$

1,114,840

 

 

$

1,111,094

 

Real estate

179,242

 

 

178,803

 

 

788,871

 

 

759,168

 

Total revenues

439,565

 

 

445,939

 

 

1,903,711

 

 

1,870,262

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

Tobacco*

180,174

 

 

189,759

 

 

771,130

 

 

787,251

 

Real estate

121,755

 

 

115,382

 

 

530,449

 

 

505,233

 

Total cost of sales

301,929

 

 

305,141

 

 

1,301,579

 

 

1,292,484

 

 

 

 

 

 

 

 

 

Operating, selling, administrative and general expenses

91,960

 

 

92,552

 

 

370,007

 

 

355,513

 

Litigation settlement and judgment expense (income)

95

 

 

160

 

 

990

 

 

(1,784

)

Operating income

45,581

 

 

48,086

 

 

231,135

 

 

224,049

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

Interest expense

(35,212

)

 

(58,328

)

 

(138,448

)

 

(203,780

)

Loss on extinguishment of debt

(4,301

)

 

(4,066

)

 

(4,301

)

 

(4,066

)

Change in fair value of derivatives embedded within convertible debt

6,106

 

 

13,700

 

 

26,425

 

 

44,989

 

Equity in (losses) earnings from real estate ventures

(31,290

)

 

22,824

 

 

(19,288

)

 

14,446

 

Other, net

24,652

 

 

(9,739

)

 

38,305

 

 

3,921

 

Income before provision for income taxes

5,536

 

 

12,477

 

 

133,828

 

 

79,559

 

Income tax (benefit) expense

(5,131

)

 

(7,842

)

 

32,813

 

 

21,552

 

 

 

 

 

 

 

 

 

Net income

10,667

 

 

20,319

 

 

101,015

 

 

58,007

 

 

 

 

 

 

 

 

 

Net loss (income) attributed to non-controlling interest

39

 

 

755

 

 

(41

)

 

98

 

 

 

 

 

 

 

 

 

Net income attributed to Vector Group Ltd.

$

10,706

 

 

$

21,074

 

 

$

100,974

 

 

$

58,105

 

 

 

 

 

 

 

 

 

Per basic common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income applicable to common share attributed to Vector Group Ltd.

$

0.06

 

 

$

0.13

 

 

$

0.64

 

 

$

0.35

 

 

 

 

 

 

 

 

 

Per diluted common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income applicable to common share attributed to Vector Group Ltd.

$

0.06

 

 

$

0.13

 

 

$

0.63

 

 

$

0.35

 

* Revenues and cost of sales include federal excise taxes of $103,729, $110,637, $451,256 and $469,836, respectively.

 

 

TABLE 2

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED EBITDA

(Unaudited)

(Dollars in Thousands)

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

Net income attributed to Vector Group Ltd.

$

10,706

 

 

$

21,074

 

 

$

100,974

 

 

$

58,105

 

Interest expense

35,212

 

 

58,328

 

 

138,448

 

 

203,780

 

Income tax (benefit) expense

(5,131

)

 

(7,842

)

 

32,813

 

 

21,552

 

Net (loss) income attributed to non-controlling interest

(39

)

 

(755

)

 

41

 

 

(98

)

Depreciation and amortization

4,489

 

 

4,764

 

 

17,851

 

 

18,807

 

EBITDA

$

45,237

 

 

$

75,569

 

 

$

290,127

 

 

$

302,146

 

Change in fair value of derivatives embedded within convertible debt (a)

(6,106

)

 

(13,700

)

 

(26,425

)

 

(44,989

)

Equity in losses (earnings) from real estate ventures (b)

31,290

 

 

(22,824

)

 

19,288

 

 

(14,446

)

Loss on extinguishment of debt

4,301

 

 

4,066

 

 

4,301

 

 

4,066

 

Stock-based compensation expense (c)

2,347

 

 

2,527

 

 

9,469

 

 

9,951

 

Litigation settlement and judgment expense (income) (d)

95

 

 

160

 

 

990

 

 

(1,784

)

Impact of MSA settlement (e)

 

 

 

 

 

 

(6,298

)

Purchase accounting adjustments (f)

 

 

63

 

 

 

 

608

 

Other, net

(24,652

)

 

9,739

 

 

(38,305

)

 

(3,921

)

Adjusted EBITDA

$

52,512

 

 

$

55,600

 

 

$

259,445

 

 

$

245,333

 

Adjusted EBITDA attributed to non-controlling interest

 

 

(1,471

)

 

 

 

(3,319

)

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

 

 

(158

)

 

 

 

3,319

 

Adjusted EBITDA attributed to Vector Group Ltd.

$

52,512

 

 

$

53,971

 

 

$

259,445

 

 

$

245,333

 

 

 

 

 

 

 

 

 

Adjusted EBITDA by Segment

 

 

 

 

 

 

 

Tobacco

$

62,107

 

 

$

59,563

 

 

$

270,465

 

 

$

249,209

 

Real Estate (h)

(5,334

)

 

(249

)

 

6,103

 

 

11,154

 

Corporate and Other

(4,261

)

 

(3,714

)

 

(17,123

)

 

(15,030

)

Total

$

52,512

 

 

$

55,600

 

 

$

259,445

 

 

$

245,333

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Attributed to Vector Group Ltd. by Segment

 

 

 

 

 

 

 

Tobacco

$

62,107

 

 

$

59,563

 

 

$

270,465

 

 

$

249,209

 

Real Estate (h)

(5,334

)

 

(1,878

)

 

6,103

 

 

11,154

 

Corporate and Other

(4,261

)

 

(3,714

)

 

(17,123

)

 

(15,030

)

Total

$

52,512

 

 

$

53,971

 

 

$

259,445

 

 

$

245,333

 

  1. Represents income recognized from changes in the fair value of the derivatives embedded in the Company’s convertible debt.
  2. Represents equity in losses (earnings) recognized from the Company’s investment in certain real estate businesses that are not consolidated in its financial results.
  3. Represents amortization of stock-based compensation.
  4. 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.
  5. Represents the Company’s tobacco segment’s settlement of a long-standing dispute related to the Master Settlement Agreement.
  6. 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.
  7. 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%.
  8. Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of negative $5,693, negative $540, $5,333 and $11,284 for the fourth quarter and full year ended December 31, 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

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

Net income attributed to Vector Group Ltd.

$

10,706

 

 

$

21,074

 

 

$

100,974

 

 

$

58,105

 

 

 

 

 

 

 

 

 

Change in fair value of derivatives embedded within convertible debt

(6,106

)

 

(13,700

)

 

(26,425

)

 

(44,989

)

Non-cash amortization of debt discount on convertible debt

5,095

 

 

25,173

 

 

24,813

 

 

86,623

 

Loss on extinguishment of debt

4,301

 

 

4,066

 

 

4,301

 

 

4,066

 

Litigation settlement and judgment expense (income) (a)

95

 

 

160

 

 

990

 

 

(1,784

)

Impact of MSA settlement (b)

 

 

 

 

 

 

(6,298

)

Impact of net interest expense capitalized to real estate ventures

10,701

 

 

(472

)

 

13,189

 

 

1,303

 

Adjustment for derivative associated with acquisition of 29.41% of Douglas Elliman Realty, LLC

(3,157

)

 

 

 

(3,157

)

 

 

Douglas Elliman Realty, LLC purchase accounting adjustments (c)

 

 

265

 

 

 

 

1,406

 

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

 

 

(758

)

 

 

 

1,529

 

Total adjustments

10,929

 

 

14,734

 

 

13,711

 

 

41,856

 

 

 

 

 

 

 

 

 

Tax expense related to adjustments

(3,789

)

 

(4,046

)

 

(4,553

)

 

(11,718

)

 

 

 

 

 

 

 

 

Adjusted Net Income attributed to Vector Group Ltd.

$

17,846

 

 

$

31,762

 

 

$

110,132

 

 

$

88,243

 

 

 

 

 

 

 

 

 

Per diluted common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income applicable to common shares attributed to Vector Group Ltd.

$

0.11

 

 

$

0.20

 

 

$

0.70

 

 

$

0.55

 

 

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)

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

Operating income

$

45,581

 

 

$

48,086

 

 

$

231,135

 

 

$

224,049

 

 

 

 

 

 

 

 

 

Litigation settlement and judgment expense (income) (a)

95

 

 

160

 

 

990

 

 

(1,784

)

Impact of MSA settlement (b)

 

 

 

 

 

 

(6,298

)

Douglas Elliman Realty, LLC purchase accounting adjustments (c)

 

 

265

 

 

 

 

1,406

 

Total adjustments

95

 

 

425

 

 

990

 

 

(6,676

)

 

 

 

 

 

 

 

 

Adjusted Operating Income (d)

$

45,676

 

 

$

48,511

 

 

$

232,125

 

 

$

217,373

 

 

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 three months and year ended December 31, 2018.

 

 

TABLE 5

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF TOBACCO ADJUSTED OPERATING INCOME

AND TOBACCO ADJUSTED EBITDA

(Unaudited)

(Dollars in Thousands)

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

Tobacco Adjusted Operating Income:

 

 

 

 

 

 

 

Operating income from tobacco segment

$

60,036

 

 

$

57,342

 

 

$

261,630

 

 

$

246,527

 

 

 

 

 

 

 

 

 

Litigation settlement and judgment expense (a)

95

 

 

160

 

 

990

 

 

685

 

Impact of MSA settlement (b)

 

 

 

 

 

 

(6,298

)

Total adjustments

95

 

 

160

 

 

990

 

 

(5,613

)

 

 

 

 

 

 

 

 

Tobacco Adjusted Operating Income

$

60,131

 

 

$

57,502

 

 

$

262,620

 

 

$

240,914

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

Tobacco Adjusted EBITDA:

 

 

 

 

 

 

 

Operating income from tobacco segment

$

60,036

 

 

$

57,342

 

 

$

261,630

 

 

$

246,527

 

 

 

 

 

 

 

 

 

Litigation settlement and judgment expense (a)

95

 

 

160

 

 

990

 

 

685

 

Impact of MSA settlement (b)

 

 

 

 

 

 

(6,298

)

Total adjustments

95

 

 

160

 

 

990

 

 

(5,613

)

 

 

 

 

 

 

 

 

Tobacco Adjusted Operating Income

60,131

 

 

57,502

 

 

262,620

 

 

240,914

 

 

 

 

 

 

 

 

 

Depreciation and amortization

1,976

 

 

2,039

 

 

7,824

 

 

8,210

 

Stock-based compensation expense

 

 

22

 

 

21

 

 

85

 

Total adjustments

1,976

 

 

2,061

 

 

7,845

 

 

8,295

 

 

 

 

 

 

 

 

 

Tobacco Adjusted EBITDA

$

62,107

 

 

$

59,563

 

 

$

270,465

 

 

$

249,209

 

 

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)

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

Net (loss) income attributed to Vector Group Ltd. from subsidiary non-guarantors (a)

$

(24,908

)

 

$

15,694

 

 

$

(11,440

)

 

$

14,779

 

Interest expense (a)

228

 

 

4

 

 

913

 

 

67

 

Income tax (benefit) expense (a)

(11,397

)

 

5,775

 

 

(5,884

)

 

3,949

 

Net (loss) income attributed to non-controlling interest (a)

(39

)

 

(755

)

 

41

 

 

(98

)

Depreciation and amortization

2,268

 

 

2,475

 

 

9,033

 

 

9,580

 

EBITDA

$

(33,848

)

 

$

23,193

 

 

$

(7,337

)

 

$

28,277

 

(Income) loss from non-guarantors other than New Valley LLC

(6

)

 

15

 

 

51

 

 

86

 

Equity in losses (earnings) from real estate ventures (b)

31,290

 

 

(22,824

)

 

19,288

 

 

(14,446

)

Purchase accounting adjustments (c)

 

 

63

 

 

 

 

608

 

Litigation settlement and judgment income (d)

 

 

 

 

 

 

(2,469

)

Other, net

(2,785

)

 

(705

)

 

(5,929

)

 

(1,725

)

Adjusted EBITDA

$

(5,349

)

 

$

(258

)

 

$

6,073

 

 

$

10,331

 

Adjusted EBITDA attributed to non-controlling interest

 

 

(1,471

)

 

 

 

(3,319

)

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

 

 

(158

)

 

 

 

3,319

 

Adjusted EBITDA attributed to New Valley LLC

$

(5,349

)

 

$

(1,887

)

 

$

6,073

 

 

$

10,331

 

 

 

 

 

 

 

 

 

Adjusted EBITDA by Segment

 

 

 

 

 

 

 

Real Estate (f)

$

(5,334

)

 

$

(249

)

 

$

6,103

 

 

$

11,154

 

Corporate and Other

(15

)

 

(9

)

 

(30

)

 

(823

)

Total (g)

$

(5,349

)

 

$

(258

)

 

$

6,073

 

 

$

10,331

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Attributed to New Valley LLC by Segment

 

 

 

 

 

 

 

Real Estate (f)

$

(5,334

)

 

$

(1,878

)

 

$

6,103

 

 

$

11,154

 

Corporate and Other

(15

)

 

(9

)

 

(30

)

 

(823

)

Total (g)

$

(5,349

)

 

$

(1,887

)

 

$

6,073

 

 

$

10,331

 

 
  1. 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-K for the three months and year ended December 31, 2019.
  2. Represents equity in losses (earnings) recognized from the Company’s investment in certain real estate businesses that are not consolidated in its financial results.
  3. 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.
  4. Represents proceeds received from a litigation award at Douglas Elliman Realty, LLC.
  5. 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%.
  6. Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of negative $5,693, negative $540, $5,333 and $11,284 for the three months and year ended December 31, 2019 and 2018, respectively. Amounts reported in this footnote reflect 100% of Douglas Elliman Realty, LLC’s entire Adjusted EBITDA.
  7. 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 $4,261, $3,714, $17,123 and $15,030 for the three months and year ended December 31, 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)

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

Net (loss) income attributed to Douglas Elliman Realty, LLC

$

(432

)

 

$

(2,576

)

 

$

6,185

 

 

$

5,197

 

Interest expense

2

 

 

2

 

 

8

 

 

53

 

Income tax expense (benefit)

2

 

 

(1

)

 

368

 

 

400

 

Depreciation and amortization

2,181

 

 

2,374

 

 

8,638

 

 

9,171

 

Douglas Elliman Realty, LLC EBITDA

$

1,753

 

 

$

(201

)

 

$

15,199

 

 

$

14,821

 

Equity in earnings from real estate ventures (a)

(7,080

)

 

(92

)

 

(8,472

)

 

(1,243

)

Purchase accounting adjustments (b)

 

 

63

 

 

 

 

608

 

Litigation settlement and judgment income (c)

 

 

 

 

 

 

(2,469

)

Other, net

(366

)

 

(310

)

 

(1,394

)

 

(433

)

Douglas Elliman Realty, LLC Adjusted EBITDA

$

(5,693

)

 

$

(540

)

 

$

5,333

 

 

$

11,284

 

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

 

 

158

 

 

 

 

(3,319

)

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

)

 

 

 

3,319

 

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

$

(5,693

)

 

$

(540

)

 

$

5,333

 

 

$

11,284

 

  1. Represents equity in earnings recognized from the Company’s investment in certain real estate businesses that are not consolidated in its financial results.
  2. 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.
  3. Represents proceeds received from a litigation award at Douglas Elliman Realty, LLC.
  4. 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%.
 

 

Contacts

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

Contacts

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