Vector Group Ltd. (NYSE: VGR) today announced financial results
for the three and six months ended June 30, 2015.
GAAP Financial Results
Second quarter 2015 revenues were $416.2 million, compared to
revenues of $406.6 million in the second quarter of 2014. The
Company recorded operating income of $56.0 million in the second
quarter of 2015, compared to operating income of $60.3 million in
the second quarter of 2014. Net income attributed to Vector Group
Ltd. for the 2015 second quarter was $17.9 million, or $0.15 per
diluted common share, compared to net income of $7.9 million, or
$0.08 per diluted common share, in the 2014 second quarter.
For the six months ended June 30, 2015, revenues
were $776.9 million, compared to $753.8 million for
the first six months of 2014. The Company recorded
operating income of $100.0 million for the
2015 six-month period, compared to operating income
of $103.0 million for the 2014 six-month period. Net
income attributed to Vector Group Ltd. for the 2015 six-month
period was $38.8 million, or $0.34 per diluted
common share, compared to net income of $10.5 million,
or $0.10 per diluted common share, for the
first six months of 2014.
Non-GAAP Financial Results
Non-GAAP financial results also include adjustments for purchase
accounting associated with the Company's acquisition of its
additional 20.59% interest in Douglas Elliman Realty, LLC in
December 2013, litigation settlement and judgment expenses in the
Company's tobacco business, 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, 2015 and 2014 are included in Tables 2 through
10.
Three months ended June 30, 2015 compared to the three
months ended June 30, 2014
Second quarter 2015 Pro-forma Adjusted Revenues (as described in
Table 2 attached hereto) were $416.7 million compared to $406.6
million in 2014. The increase was primarily due to an increase in
Pro-forma Adjusted Revenues at Douglas Elliman of $22.1 million and
an increase of $4.3 million from the Company's Tobacco segment
offset by the absence in 2015 of a $14.4 million property sale,
which occurred in the 2014 period and a decline of $2.3 million
from the Company's E-cigarette segment.
Pro-forma Adjusted EBITDA attributed to Vector Group (as
described below and in Table 3 attached hereto) were $64.0 million
for the second quarter of 2015 as compared to $59.5 million for the
second quarter of 2014. The increase in Pro-forma Adjusted EBITDA
attributed to Vector Group for the three months ended June 30, 2015
was primarily attributable to higher profits in the tobacco segment
and a reduction of losses from the Company's E-cigarette segment.
This was offset by a decline of Pro-forma Adjusted EBITDA at
Douglas Elliman.
Pro-forma Adjusted Net Income (as described below and in Table 4
attached hereto) was $21.1 million or $0.18 per diluted share for
the three months ended June 30, 2015 and $15.5 million or $0.15 per
diluted share for the three months ended June 30, 2014.
Pro-forma Adjusted Operating Income (as described below and in
Table 5 attached hereto) was $60.8 million for the three months
ended June 30, 2015 and $60.6 million for the three months ended
June 30, 2014.
Six months ended June 30, 2015 compared to
the six months ended June 30, 2014
For the six months ended June 30, 2015 Pro-forma
Adjusted Revenues (as described in Table 2 attached hereto)
were $777.9 million compared to $755.5
million in 2014. The increase was primarily due to an
increase in revenues of $44.9 million at Douglas Elliman offset by
the absence in 2015 of a $14.4 million property sale, which
occurred in the 2014 period and a decline of $7.7 million from the
Company's E-cigarette segment.
Pro-forma Adjusted EBITDA attributed to Vector Group (as
described below and in Table 3 attached hereto) was $115.5
million for the six months ended June 30,
2015 as compared to $109.3 million for
the six-month period of 2014. The increase in Pro-forma
Adjusted EBITDA attributed to Vector Group were primarily
attributable to higher profits in the Tobacco segment. This was
offset by a decline of Pro-forma Adjusted EBITDA at the Company's
Real Estate segment as well as increased losses from the Company’s
E-cigarette segment in the 2015 period.
Pro-forma Adjusted Net Income (as described below and in Table 4
attached hereto) was $43.0 million or $0.37 per
diluted share for the six months ended June 30,
2015 and $30.1 million or $0.29 per
diluted share for the six months ended June 30, 2014.
Pro-forma Adjusted Operating Income (as described below and in
Table 5 attached hereto) was $107.4 million for
the six months ended June 30, 2015 and $108.2
million for the six months ended June 30, 2014.
Tobacco Business Financial Results
For the second quarter 2015, the Company's tobacco business had
revenues of $254.9 million, compared to $250.6 million for the
second quarter 2014. The increase in revenues was primarily due to
favorable net pricing variances partially offset by a 0.7% decline
in unit sales volume.
Tobacco Adjusted Operating Income (described below and included
in Table 6 attached hereto) for the second quarter 2015 and 2014
was $59.1 million and $50.1 million, respectively.
For the six months ended June 30, 2015, the Company's
tobacco business had revenues of $483.0 million, compared
to $483.9 million for the six months ended
June 30, 2014. The decline in revenues was primarily due to a
2.7% decline in unit 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, 2015 and 2014 was $109.6
million and $94.5 million, respectively.
For the three and six months ended June 30, 2015, the Company's
tobacco business had conventional cigarette sales of approximately
2.16 billion and 4.10 billion units compared to 2.18 billion and
4.21 billion units for the three and six months ended June 30,
2014.
Real Estate Business Financial Results
For the second quarter 2015, the Company's real estate segment
had Pro-forma Adjusted Revenues of $161.5 million, compared to
$153.5 million for the second quarter 2014. The increase in
revenues was primarily due to an increase in revenues at Douglas
Elliman. For the second quarter 2015, Real Estate Pro-forma
Adjusted EBITDA attributed to the Company were $7.4 million,
compared to $13.2 million for the second quarter 2014.
For the six months ended June 30, 2015, the Company's real
estate segment had Pro-forma Adjusted Revenues of $294.2 million,
compared to $263.2 million for the six months ended June 30,
2014. The increase in revenues was primarily due to an increase in
revenues at Douglas Elliman. For the six months ended June 30,
2015, Real Estate Pro-forma Adjusted EBITDA attributed to the
Company were $11.7 million, compared to $20.3 million for the six
months ended June 30, 2014.
Douglas Elliman's results are included in Vector Group Ltd.'s
Real Estate segment and Douglas Elliman continued its strong growth
by reporting increases in its Pro-Forma Adjusted Revenues of 18.3%
for the six months ended June 30, 2015 from the comparable 2014
period. During 2015, Douglas Elliman continued to make strategic
investments by bolstering its development marketing division and
incurring increased advertising and marketing expenses to
strengthen the long-term value of the Douglas Elliman brand.
Douglas Elliman's Pro-Forma Adjusted Revenues for the second
quarter 2015 were $160.1 million, compared to $137.9 million for
the second quarter 2014. For the second quarter 2015, Douglas
Elliman's Pro-forma Adjusted EBITDA were $9.9 million ($7.0 million
attributed to the Company), compared to $15.8 million ($11.1
million attributed to the Company) for the second quarter 2014.
Douglas Elliman's Pro-Forma Adjusted Revenues for the six months
ended June 30, 2015 were $290.3 million, compared to $245.5
million for the six months ended June 30, 2014. For the six
months ended June 30, 2015, Douglas Elliman's Pro-forma
Adjusted EBITDA were $13.6 million ($9.6 million attributed to the
Company), compared to $23.2 million ($16.4 million attributed to
the Company) for the six months ended June 30, 2014.
For the three and six months ended June 30, 2015, Douglas
Elliman achieved closed sales of approximately $5.5 billion and
$9.6 billion, compared to $4.6 billion and $8.1 billion for the
three and six months ended June 30, 2014.
E-cigarettes
For the second quarter 2015, the Company's E-cigarette segment
had Pro-forma Adjusted Revenues of $0.3 million and a loss of
Pro-forma Adjusted EBITDA of $2.4 million compared to Pro-forma
Adjusted Revenues of $2.6 million and a loss of Pro-forma Adjusted
EBITDA of $3.8 million for the second quarter 2014.
For the six months ended June 30, 2015, the Company's
E-cigarette segment had Pro-forma Adjusted Revenues of $0.7 million
and a loss of Pro-forma Adjusted EBITDA of $5.6 million compared to
Pro-forma Adjusted Revenues of $8.4 million and a loss of Pro-forma
Adjusted EBITDA of $4.2 million for the six months ended June 30,
2014.
As a result of the amount of operating losses in the Company's
E-cigarette segment, effective as of September 30, 2014, when
compared to the remaining components of the Company's Corporate and
Other segment, the Company reevaluated its operating segments and
has separated the operations of the Company's E-cigarette segment
from the Corporate and Other segment for previously reported 2014
periods. Thus, information reported prior to September 30, 2014 has
been recast to conform to the current presentation. This change did
not have an impact to the Company's historical consolidated
results.
Non-GAAP Financial Measures
Pro-forma Adjusted Revenues, Pro-forma Adjusted EBITDA,
Pro-forma Adjusted Net Income, Pro-forma Adjusted Operating Income,
Tobacco Adjusted Operating Income, New Valley LLC Pro-forma
Adjusted Revenues, New Valley LLC Pro-forma Adjusted EBITDA,
Douglas Elliman Realty, LLC Adjusted Revenues, and Douglas Elliman
Realty, LLC Adjusted EBITDA (hereafter referred to as "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,
capital investment cycles and ages of related assets among
otherwise comparable companies. 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 10 is
information relating to the Company's the Non-GAAP Financial
Measures for the three and six months ended June 30, 2015 and
2014.
Conference Call to Discuss Second Quarter 2015
Results
As previously announced, the Company will host a conference call
and webcast on Thursday, July 30, 2015 at 9:00 A.M. (ET) to
discuss second quarter 2015 results. Investors can access the call
by dialing 800-859-8150 and entering 24708438 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 30, 2015 through August 30, 2015. To access
the replay, dial 877-656-8905 and enter 24708438 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.
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, 2015 2014 2015 2014 (Unaudited)
(Unaudited) Revenues Tobacco* $ 254,890 $ 250,556 $
482,975 $ 483,948 Real estate 161,022 153,488 293,278 261,532
E-Cigarettes 261 2,569 680 8,369 Total
revenues 416,173 406,613 776,933 753,849 Expenses: Cost of
sales: Tobacco* 174,867 179,773 331,897 347,939 Real estate 103,870
97,763 188,228 165,087 E-Cigarettes 467 1,746 1,097
5,293 Total cost of sales 279,204 279,282 521,222
518,319 Operating, selling, administrative and general
expenses 79,679 67,023 153,623 131,000 Litigation settlement and
judgment expense 1,250 — 2,093 1,500
Operating income 56,040 60,308 99,995 103,030 Other income
(expenses): Interest expense (31,761 ) (44,183 ) (63,507 ) (79,636
) Change in fair value of derivatives embedded within convertible
debt 5,256 1,970 11,716 320 Acceleration of interest expense
related to debt conversion — (439 ) — (4,118 ) Equity income (loss)
from real estate ventures 1,856 (1,808 ) 2,194 (256 ) Equity (loss)
income on long-term investments
(1,657
)
(273 )
(1,694
)
633 Gain (loss) on sale of investment securities available for sale
(190 ) (18 ) 12,839 (71 ) Other, net
1,525
3,575
3,421
5,701 Income before provision for income taxes 31,069
19,132 64,964 25,603 Income tax expense 11,364 6,101
24,043 9,043 Net income 19,705 13,031 40,921
16,560 Net income attributed to non-controlling interest
(1,837 ) (5,106 ) (2,097 ) (6,055 ) Net income attributed to
Vector Group Ltd. $ 17,868 $ 7,925 $ 38,824 $
10,505 Per basic common share: Net income
applicable to common shares attributed to Vector Group Ltd. $ 0.15
$ 0.08 $ 0.34 $ 0.10 Per diluted
common share: Net income applicable to common shares
attributed to Vector Group Ltd. $ 0.15 $ 0.08 $ 0.34
$ 0.10 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
$108,912, $109,695, $206,271 and $212,108 respectively.
TABLE 2
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF PRO-FORMA ADJUSTED
REVENUES
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six
Months Ended June 30, June 30, June 30, 2015 2015 2014 2015
2014 Revenues $ 1,614,399 $ 416,173 $ 406,613
$ 776,933 $ 753,849 Purchase accounting adjustments
(a) 1,048 482 29 963 1,683 Total
adjustments 1,048 482 29 963 1,683 Pro-forma Adjusted
Revenues $ 1,615,447 $ 416,655 $ 406,642 $
777,896 $ 755,532
Pro-forma Adjusted Revenues by
Segment Tobacco $ 1,020,286 $ 254,890 $ 250,556 $ 482,975 $
483,948 E-cigarettes 900 261 2,569 680 8,369 Real Estate (b)
594,261 161,504 153,517 294,241 263,215 Corporate and Other —
— — — — Total $ 1,615,447 $
416,655 $ 406,642 $ 777,896 $ 755,532
a. 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. b. Includes Pro-forma Adjusted Revenues from
Douglas Elliman Realty, LLC of $588,095 for the last twelve months
ended June 30, 2015 and $160,098, $137,949, $290,326, and $245,461
for the three and six months ended June 30, 2015 and 2014,
respectively.
TABLE 3
VECTOR GROUP LTD. AND
SUBSIDIARIES
COMPUTATION OF PRO-FORMA
ADJUSTED EBITDA
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2015 2015 2014 2015
2014 Net income attributed to Vector Group Ltd. $ 66,313 $
17,868 $ 7,925 $ 38,824 $ 10,505 Interest expense 144,862 31,761
44,183 63,507 79,636 Income tax expense 48,859 11,364 6,101 24,043
9,043 Net income attributed to non-controlling interest 8,300 1,837
5,106 2,097 6,055 Depreciation and amortization 24,668 6,442
5,462 12,723 12,554 EBITDA $ 293,002 $
69,272 $ 68,777 $ 141,194 $ 117,793 Change in fair value of
derivatives embedded within convertible debt (a) (30,805 ) (5,256 )
(1,970 ) (11,716 ) (320 ) Equity (gain) loss on long-term
investments (b) (540 )
1,657
273
1,694
(633 ) (Gain) loss on sale of investment securities available for
sale (12,899 ) 190 18 (12,839 ) 71 Equity income (loss) from real
estate ventures (c) (6,553 ) (1,856 ) 1,808 (2,194 ) 256 Pension
settlement charge 1,607 1,607 — 1,607 — Acceleration of interest
expense related to debt conversion 1,087 — 439 — 4,118 Stock-based
compensation expense (d) 4,664 1,236 464 2,400 987 Litigation
settlement and judgment expense (e) 3,068 1,250 — 2,093 1,500
Impact of MSA settlement (f)
—
—
(1,419 ) — (1,419 ) Purchase accounting adjustments (g) 1,562 358
367 690 606 Other, net (8,271 )
(1,525
)
(3,575 )
(3,421
) (5,701 ) Pro-forma Adjusted EBITDA $ 245,922 $ 66,933 $ 65,182 $
119,508 $ 117,258 Pro-forma Adjusted EBITDA attributed to
non-controlling interest (11,901 ) (2,913 ) (5,712 ) (3,997 )
(7,954 ) Pro-forma Adjusted EBITDA attributed to Vector Group Ltd.
$ 234,021 $ 64,020 $ 59,470 $ 115,511 $
109,304
Pro-forma Adjusted EBITDA by Segment
Tobacco $ 226,476 $ 62,024 $ 53,273 $ 115,496 $ 100,188
E-cigarettes (14,498 ) (2,400 ) (3,765 ) (5,564 ) (4,190 ) Real
Estate (h) 43,533 10,326 18,890 15,717 28,220 Corporate and Other
(9,589 ) (3,017 ) (3,216 ) (6,141 ) (6,960 ) Total $ 245,922
$ 66,933 $ 65,182 $ 119,508 $ 117,258
Pro-forma Adjusted EBITDA Attributed to Vector Group by
Segment Tobacco $ 226,476 $ 62,024 $ 53,273 $ 115,496 $ 100,188
E-cigarettes (14,498 ) (2,400 ) (3,765 ) (5,564 ) (4,190 ) Real
Estate (i) 31,632 7,413 13,178 11,720 20,266 Corporate and Other
(9,589 ) (3,017 ) (3,216 ) (6,141 ) (6,960 ) Total $ 234,021
$ 64,020 $ 59,470 $ 115,511 $ 109,304
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 accruals for settlements of
judgments in the Engle progeny tobacco litigation.
f. Represents the Company's tobacco business's settlement of a
long-standing dispute related to the Master Settlement Agreement.
g. 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. h. Includes Pro-forma Adjusted EBITDA for Douglas Elliman
Realty, LLC of $41,071 for the last twelve months ended June 30,
2015 and $9,906, $15,791, $13,591,and $23,175 for the three and six
months ended June 30, 2015 and 2014, respectively. Amounts reported
in this footnote reflect 100% of Douglas Elliman Realty, LLC's
entire Pro-forma Adjusted EBITDA. i.
Includes Pro-forma Adjusted EBITDA for
Douglas Elliman Realty, LLC less non-controlling interest of
$28,992 for the last twelve months ended June 30, 2015 and $6,993,
$11,147, $9,594, and $16,359 the three and six months ended June
30, 2015 and 2014, 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, 2015 2014 2015 2014 Net
income attributed to Vector Group Ltd. $ 17,868 $ 7,925 $
38,824 $ 10,505 Acceleration of interest expense
related to debt conversion — 439 — 4,118 Change in fair value of
derivatives embedded within convertible debt (5,256 ) (1,970 )
(11,716 ) (320 ) Non-cash amortization of debt discount on
convertible debt 6,516 14,691 12,459 27,147 Litigation settlement
and judgment expense (a) 1,250 — 2,093 1,500 Pension settlement
charge 1,607 — 1,607 — Impact of MSA settlement (b) — (1,419 ) —
(1,419 ) Out-of-period adjustment related to Douglas Elliman
acquisition in 2013 (c) — — — (1,231 ) Douglas Elliman Realty, LLC
purchase accounting adjustments (d) 1,343 1,223 2,594
3,579 Total adjustments 5,460 12,964 7,037 33,374
Tax expense related to adjustments (2,258 ) (5,360 ) (2,910
) (13,800 ) Pro-forma Adjusted Net
Income attributed to Vector Group Ltd. $ 21,070 $ 15,529
$ 42,951 $ 30,079 Per diluted common
share: Pro-forma Adjusted Net Income applicable to common
shares attributed to Vector Group Ltd. $ 0.18 $ 0.15
$ 0.37 $ 0.29 a.
Represents accruals for settlements of
judgments in the Engle progeny tobacco litigation.
b. Represents the Company's tobacco business's settlement of a
long-standing dispute related to the Master Settlement Agreement.
c. Represents an out-of-period adjustment related to a non-accrual
of a receivable from Douglas Elliman Realty in the fourth quarter
of 2013 and would have increased the Company's gain on acquisition
of Douglas Elliman in 2013. d. Represents 70.59% of purchase
accounting adjustments in the periods presented for assets acquired
in connection with the increase of the Company's ownership of
Douglas Elliman Realty, LLC, which occurred in 2013.
TABLE 5
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF PRO-FORMA ADJUSTED
OPERATING INCOME
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six
Months Ended June 30, June 30, June 30, 2015 2015 2014 2015
2014 Operating income $ 210,353 $ 56,040 $ 60,308 $
99,995 $ 103,030 Litigation settlement and judgment expense
(a) 3,068 1,250 — 2,093 1,500 Pension settlement charge 1,607 1,607
— 1,607 — Impact of MSA settlement (b) — — (1,419 ) — (1,419 )
Douglas Elliman Realty, LLC purchase accounting adjustments (c)
7,132 1,903 1,733 3,675 5,070
Total adjustments 11,807 4,760 314 7,375 5,151 Pro-forma
Adjusted Operating Income (d) $ 222,160 $ 60,800 $
60,622 $ 107,370 $ 108,181 a.
Represents accruals for settlements of judgments 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. 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.
TABLE 6
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF TOBACCO ADJUSTED
OPERATING INCOME
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six
Months Ended June 30, June 30, June 30, 2015 2015 2014 2015
2014 Operating income from tobacco business $ 210,602
$ 56,215 $ 51,506 $ 105,885 $ 94,402 Litigation settlement
and judgment expense (a) 3,068 1,250 — 2,093 1,500 Pension
settlement charge 1,607 1,607 — 1,607 — Impact of MSA settlement
(b) — — (1,419 ) — (1,419 ) Total adjustments
4,675 2,857 (1,419 ) 3,700 81 Tobacco Adjusted Operating
Income $ 215,277 $ 59,072 $ 50,087 $ 109,585
$ 94,483 a. Represents accruals for
settlements of judgments 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 7
VECTOR GROUP LTD. AND
SUBSIDIARIES
ANALYSIS OF NEW VALLEY LLC PRO-FORMA
ADJUSTED REVENUES
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six
Months Ended June 30, June 30, June 30, 2015 2015 2014 2015
2014 New Valley LLC revenues $ 593,213 $ 161,022
$ 153,488 $ 293,278 $ 261,532 Purchase
accounting adjustments (a) 1,048 482 29 963
1,683 Total adjustments 1,048 482 29 963 1,683 New
Valley LLC Pro-forma Adjusted Revenues (b) $ 594,261 $
161,504 $ 153,517 $ 294,241 $ 263,215
a. Amounts represent purchase accounting adjustments
recorded in connection with the increase of the Company's ownership
of Douglas Elliman Realty, LLC., which occurred in 2013. b.
Includes Pro-forma Adjusted Revenues from Douglas Elliman Realty,
LLC of $588,095 for the last twelve months ended June 30, 2015 and
$160,098, $137,949, $290,326,and $245,461 for the three and six
months ended June 30, 2015 and 2014, respectively.
TABLE 8
VECTOR GROUP LTD. AND
SUBSIDIARIES
COMPUTATION OF NEW VALLEY LLC PRO-FORMA
ADJUSTED EBITDA
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2015 2015 2014 2015 2014
Net income attributed to Vector Group Ltd. from subsidiary
non-guarantors (a) $ 17,511 $ 4,070 $ 6,234 $ 5,520 $
9,459 Interest expense (a) 7 2 3 3 37 Income tax expense (a) 13,147
3,201 5,249 4,509 8,790 Net income (loss) attributed to
non-controlling interest (a) 8,300 1,837 5,106 2,097 6,055
Depreciation and amortization 11,219 3,076 2,622
5,984 6,969 EBITDA $ 50,184 $ 12,186 $ 19,214
$ 18,113 $ 31,310 Income from non-guarantors other than New Valley
95 51 47 67 65 Equity income (loss) from real estate ventures (b)
(6,553 ) (1,856 ) 1,808 (2,194 ) 256 Purchase accounting
adjustments (c) 1,562 358 367 690 606 Other, net (1,734 ) (429 )
(2,577 ) (981 ) (4,063 ) Pro-forma Adjusted EBITDA $ 43,554 $
10,310 $ 18,859 $ 15,695 $ 28,174 Pro-forma Adjusted EBITDA
attributed to non-controlling interest (11,901 ) (2,913 ) (5,712 )
(3,997 ) (7,954 ) Pro-forma Adjusted EBITDA attributed to New
Valley LLC $ 31,653 $ 7,397 $ 13,147 $ 11,698
$ 20,220 Pro-forma Adjusted EBITDA by Segment
Real Estate (d) $ 43,533 $ 10,326 $ 18,890 $ 15,717 $ 28,220
Corporate and Other 21 (16 ) (31 ) (22 ) (46 ) Total (f) $
43,554 $ 10,310 $ 18,859 $ 15,695 $
28,174 Pro-forma Adjusted EBITDA Attributed to New
Valley LLC by Segment Real Estate (e) $ 31,632 $ 7,413 $ 13,178 $
11,720 $ 20,266 Corporate and Other 21 (16 ) (31 ) (22 ) (46
) Total (f) $ 31,653 $ 7,397 $ 13,147 $ 11,698
$ 20,220 a. Amounts are derived from
Vector Group Ltd.'s Consolidated Financial Statements. See Note
entitled "Vector Group Ltd.'s Condensed Consolidating Financial
Information" contained in Vector Group Ltd.'s Form 10-K and Form
10-Q for the year ended December 31, 2014 and the quarterly period
ended June 30, 2015. b.
Represents equity income (loss) recognized
from the Company's investment in certain real estate businesses
that are not consolidated in its financial results.
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.
Includes Pro-forma Adjusted EBITDA for
Douglas Elliman Realty, LLC of $41,071 for the twelve months ended
June 30, 2015 and $9,906, $15,791, $13,591,and $23,175 for the
three and six months ended June 30, 2015 and 2014, respectively.
Amounts reported in this footnote reflect 100% of Douglas Elliman
Realty, LLC's entire Pro-forma Adjusted EBITDA.
e.
Includes Pro-forma Adjusted EBITDA for
Douglas Elliman Realty, LLC less non-controlling interest
of $28,992 for the last twelve months ended June 30,
2015 and $6,993, $11,147, $9,594, and $16,359 the three and six
months ended June 30, 2015 and 2014,
respectively. Amounts reported in this footnote have
adjusted Douglas Elliman Realty, LLC's Pro-forma Adjusted EBITDA
for non-controlling interest.
f.
New Valley's Pro-forma Adjusted EBITDA
does not include an allocation of Vector Group Ltd.'s "Corporate
and Other" segment's expenses (for purposes of computing Pro-Forma
Adjusted EBITDA contained in Table 3 of this press release) of
$9,589 for the last twelve months ended June 30, 2015 and $6,141
and $6,960 for the six months ended June 30, 2015 and 2014,
respectively.
TABLE 9
VECTOR GROUP LTD. AND
SUBSIDIARIES
ANALYSIS OF DOUGLAS ELLIMAN REALTY, LLC
PRO-FORMA ADJUSTED REVENUES
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2015 2015 2014 2015 2014
Douglas Elliman Realty, LLC revenues $ 587,047 $ 159,616 $
137,920 $ 289,363 $ 243,778 Purchase accounting
adjustments (a) 1,048 482 29 963 1,683
Total adjustments 1,048 482 29 963 1,683 Douglas Elliman
Realty, LLC Pro-forma Adjusted Revenues $ 588,095 $ 160,098
$ 137,949 $ 290,326 $ 245,461 a.
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.
TABLE 10
VECTOR GROUP LTD. AND
SUBSIDIARIES
COMPUTATION OF DOUGLAS ELLIMAN REALTY,
LLC PRO-FORMA ADJUSTED EBITDA
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended
Six Months Ended June 30, June 30, June 30, 2015 2015 2014
2015 2014 Net income attributed to Douglas Elliman
Realty, LLC $ 28,365 $ 6,391 $ 14,097 $ 7,276 $ 17,325
Interest expense 7 2 2 3 34 Income tax expense 1,313 284 409 527
588 Depreciation and amortization 10,957 3,017 2,518
5,866 6,764 Douglas Elliman Realty, LLC EBITDA
$ 40,642 $ 9,694 $ 17,026 $ 13,672 $ 24,711 Equity income (loss)
from real estate ventures (a) 1,306 (104 ) (1,593 ) (697 ) (2,113 )
Purchase accounting adjustments (b) 1,562 358 367 690 606 Other,
net (2,439 ) (42 ) (9 ) (74 ) (29 ) Douglas Elliman Realty, LLC
Pro-forma Adjusted EBITDA $ 41,071 $ 9,906 $ 15,791
$ 13,591 $ 23,175 a. Represents
equity income recognized from the Company's investment in certain
real estate businesses that are not consolidated in its financial
results. b. 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20150729006757/en/
Sard Verbinnen & CoEmily Deissler/Benjamin
Spicehandler/Spencer Waybright212-687-8080orSard Verbinnen & Co
- EuropeJonathan Doorley/Conrad Harrington+44 (0)20 3178
8914orVector Group Ltd.J. Bryant Kirkland III, 305-579-8000
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