Updated Financials Reflect Positive Impact
of Reduced MSA Payment Estimates
Vector Group Ltd. (NYSE:VGR) today announced updates to its
previously issued fourth quarter and full-year 2015 financial
results to reflect the positive impact of changes in estimates
relating to the Master Settlement Agreement (“MSA”). The changes in
the Company’s Tobacco segment’s operations primarily resulted from
an updated calculation of the Company’s 2015 MSA liability, which
occurred after the initial receipt of a preliminary calculation
from the MSA’s Independent Auditor. Additional changes result from
a recent state court decision of a long-standing dispute related to
the MSA and the adjustment of a promotional accrual.
Impact on GAAP Financial Results
The impact on Vector Group’s previously reported Condensed
Consolidated Statement of Operations, which was previously included
as Table 1 to the Company's Press Release issued on February 29,
2016, is as follows:
- Revenues increased by $766,000 in both
the fourth quarter and full-year ended December 31, 2015;
- Cost of sales declined by $1.936
million in both the fourth quarter and full-year ended December 31,
2015;
- Operating income increased by $2.702
million in both the fourth quarter in full-year ended December 31,
2015;
- Income tax expense increased by $1.181
million in both the fourth quarter and full-year ended December 31,
2015;
- Net income increased $1.521 million in
both the fourth quarter and full-year ended December 31, 2015;
and,
- Earnings per diluted common share
attributable to Vector Group increased from $0.05 to $0.06 for the
quarter and from $0.48 to $0.49 for the year ended December 31,
2015.
Impact on Non-GAAP Financial Results
The impact on Vector Group's previously reported Non-GAAP
Financial Results in Tables 2 - 6 of the Company's press release
issued on February 29, 2016 is summarized below. There were no
changes to Tables 7 - 10 in the Company's press release issued on
February 29, 2016.
- Pro-forma Adjusted Revenues has been
updated to $430.8 million for the fourth-quarter (from $430.0
million) and $1.659 billion (from $1.658 billion) for the full-year
ended December 31, 2015;
- Pro-forma Adjusted EBITDA attributed to
Vector Group has been updated to $58.4 million (from $55.2 million)
for the fourth quarter and $245.9 million (from $242.7 million) for
the full-year ended December 31, 2015;
- Pro-forma Adjusted Net Income has been
updated to $16.4 million (from $14.6 million) for the fourth
quarter and $72.5 million (from $70.6 million) for the full-year
ended December 31, 2015;
- Pro-forma Adjusted Earnings per diluted
common share has been updated to $0.13 (from $0.12) for the fourth
quarter and $0.60 (from $0.58) for the full-year ended December 31,
2015;
- Pro-forma Adjusted Operating Income has
been updated to $54.3 million (from $51.0 million) and $232.0
million (from $228.8 million) for the full-year ended December 31,
2015; and,
- Tobacco Adjusted Operating Income has
been updated to $61.2 million (from $57.9 million) and $234.0
million (from $230.7 million).
Vector Group Ltd.’s Annual Report on Form 10-K is being filed
shortly and will include these adjustments.
The following is an updated report of Vector Group Ltd.’s fourth
quarter and full-year 2015 financial results, which impacts
both.
GAAP Financial Results
Fourth quarter 2015 revenues were $430.3 million, compared to
revenues of $417.6 million in the fourth quarter of 2014. The
Company recorded operating income of $31.0 million in the fourth
quarter of 2015, compared to operating income of $47.1 million in
the fourth quarter of 2014. Net income attributed to Vector Group
Ltd. for the 2015 fourth quarter was $7.9 million, or $0.06 per
diluted common share, compared to net income of $12.2 million, or
$0.11 per diluted common share, in the 2014 fourth quarter.
For the year ended December 31, 2015, revenues
were $1.66 billion, compared to $1.59 billion for
the year ended December 31, 2014. The Company recorded operating
income of $199.9 million for the year ended December 31,
2015, compared to operating income of $212.4 million for
the 2014 year. Net income attributed to Vector Group Ltd. for
the year ended December 31, 2015 was $59.2 million,
or $0.49 per diluted common share, compared to net income
of $36.9 million, or $0.33 per diluted common share,
for the year ended December 31, 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
Tobacco segment, settlements of long-standing disputes related to
the Master Settlement Agreement in the Tobacco segment,
restructuring and pension curtailment expense in the Tobacco
segment, 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 months and year ended December 31, 2015 and 2014 are
included in Tables 2 through 10.
Three months ended December 31, 2015 compared to the three
months ended December 31, 2014
Fourth quarter 2015 Pro-forma Adjusted Revenues (as described in
Table 2 attached hereto) were $430.8 million compared to $417.7
million in 2014. The increase was primarily due to an increase in
Pro-forma Adjusted Revenues in the Real Estate segment of $16.8
million offset by declines in the Company's Tobacco and E-cigarette
segments.
Pro-forma Adjusted EBITDA attributed to Vector Group (as
described below and in Table 3 attached hereto) were $58.4 million
for the fourth quarter of 2015 as compared to $53.2 million for the
fourth quarter of 2014. The increase in Pro-forma Adjusted EBITDA
attributed to Vector Group for the three months ended December 31,
2015 was primarily attributable to higher profits in the Tobacco
segment.
Pro-forma Adjusted Net Income (as described below and in Table 4
attached hereto) was $16.4 million or $0.13 per diluted share for
the three months ended December 31, 2015 and $12.5 million or $0.11
per diluted share for the three months ended December 31, 2014.
Pro-forma Adjusted Operating Income (as described below and in
Table 5 attached hereto) was $54.3 million for the three months
ended December 31, 2015 and $49.6 million for the three months
ended December 31, 2014.
Year ended December 31, 2015 compared to the year
ended December 31, 2014
For the year ended December 31, 2015 Pro-forma
Adjusted Revenues (as described in Table 2 attached hereto)
were $1.66 billion compared to $1.59
billion in 2014. The increase was primarily due to an
increase in Pro-forma Adjusted Revenues of $80.1 million in the
Real Estate segment offset by a decline of $10.6 million from the
E-cigarette segment.
Pro-forma Adjusted EBITDA attributed to Vector Group (as
described below and in Table 3 attached hereto) was $245.9
million for the year ended December 31, 2015 as
compared to $226.9 million for the year ended
December 31, 2014. The increase in Pro-forma Adjusted EBITDA
attributed to Vector Group was primarily attributable to higher
profits in the Tobacco segment. This was offset by a decline of
Pro-forma Adjusted EBITDA from the Real Estate segment.
Pro-forma Adjusted Net Income (as described below and in Table 4
attached hereto) was $72.5 million or $0.60 per
diluted share for the year ended December 31,
2015 and $63.8 million or $0.57 per
diluted share for the year ended December 31, 2014.
Pro-forma Adjusted Operating Income (as described below and in
Table 5 attached hereto) was $232.0 million for
the year ended December 31, 2015 and $222.0
million for the year ended December 31, 2014.
Tobacco Segment Financial Results
For the fourth quarter 2015, the Tobacco segment had revenues of
$270.6 million, compared to $272.8 million for the fourth quarter
2014. The decline in revenues was primarily due to a 0.2% 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 fourth quarter 2015 and 2014
was $61.2 million and $52.5 million, respectively.
For the year ended December 31, 2015, the Tobacco
segment had revenues of $1.018 billion, compared
to $1.021 billion for the year ended
December 31, 2014. The decline in revenues was primarily due
to a 1.9% 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 year ended
December 31, 2015 and 2014 was $234.0
million and $200.2 million, respectively.
For the three months and year ended December 31, 2015, the
Tobacco segment had conventional cigarette sales of approximately
2.35 billion and 8.69 billion units compared to 2.36 billion and
8.86 billion units for the three months and year ended December 31,
2014.
Real Estate Segment Financial Results
For the fourth quarter 2015, the Real Estate segment had
Pro-forma Adjusted Revenues of $163.0 million, compared to $146.3
million for the fourth quarter 2014. The increase in revenues was
primarily due to an increase in revenues at Douglas Elliman. For
the fourth quarter 2015, Real Estate Pro-forma Adjusted EBITDA
attributed to the Company were $3.9 million, compared to $6.2
million for the fourth quarter 2014.
For the year ended December 31, 2015, the Real Estate
segment had Pro-forma Adjusted Revenues of $643.3 million, compared
to $563.2 million for the year ended December 31, 2014. The
increase in revenues was primarily due to an increase in revenues
at Douglas Elliman. For the year ended December 31, 2015, Real
Estate Pro-forma Adjusted EBITDA attributed to the Company were
$26.8 million, compared to $40.2 million for the year ended
December 31, 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 17.3%
for the year ended December 31, 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 fourth
quarter 2015 were $161.2 million, compared to $144.6 million for
the fourth quarter 2014. For the fourth quarter 2015, Douglas
Elliman's Pro-forma Adjusted EBITDA were $5.9 million ($4.1 million
attributed to the Company), compared to $6.1 million ($4.3 million
attributed to the Company) for the fourth quarter 2014.
Douglas Elliman's Pro-Forma Adjusted Revenues for the year ended
December 31, 2015 were $637.0 million, compared to $543.2
million for the year ended December 31, 2014. For the year
ended December 31, 2015, Douglas Elliman's Pro-forma Adjusted
EBITDA were $35.7 million ($25.2 million attributed to the
Company), compared to $50.7 million ($35.8 million attributed to
the Company) for the year ended December 31, 2014.
For the fourth quarter and year ended December 31, 2015, Douglas
Elliman achieved closed sales of approximately $6.2 billion and
$22.4 billion, compared to $4.9 billion and $18.2 billion for the
three months and year ended December 31, 2014.
During the year ended December 31, 2014, the Company identified
material weaknesses in internal controls over financial reporting
at Douglas Elliman related to the effectiveness of its monitoring
process under Section 404 of the Sarbanes-Oxley Act of 2002. The
Company has concluded certain of these material weaknesses have
continued in 2015. Vector Group is continuing to take measures
associated with remediation of these weaknesses, including engaging
service providers that may be necessary and advisable, to address
these weaknesses.
E-cigarettes Segment Financial Results
For the fourth quarter 2015, the E-cigarette segment had
Pro-forma Adjusted Revenues of negative $2.9 million and a loss of
Pro-forma Adjusted EBITDA of $5.3 million compared to Pro-forma
Adjusted Revenues of negative $1.4 million and a loss of Pro-forma
Adjusted EBITDA of $6.0 million for the fourth quarter 2014.
For the year ended December 31, 2015, the E-cigarette segment
had Pro-forma Adjusted Revenues of negative $2.0 million and a loss
of Pro-forma Adjusted EBITDA of $13.0 million compared to Pro-forma
Adjusted Revenues of $8.6 million and a loss of Pro-forma Adjusted
EBITDA of $13.1 million for the year ended December 31, 2014.
Retroactive Adjustment to Previously Reported Results
During the fourth quarter of 2015, the Company adopted the
equity method of accounting for its investments in Ladenburg
Thalmann Financial Services Inc. and Castle Brands Inc. because the
Company determined that it had significant influence over these
investments. The Company had previously accounted for these
investments under the cost method as part of "Investments Available
for Sale". In accordance with Generally Accepted Accounting
Principles, the Company has adjusted its previously issued
financial statements, retroactively, as if the equity method of
accounting had been in effect since inception of each of these
investments.
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 months and years ended December 31,
2015 and 2014.
[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 Year ended December 31, December 31, 2015
2014 2015 2014 (Unaudited) (Unaudited) Revenues
Tobacco* $ 270,616 $ 272,791 $
1,017,761 $ 1,021,259 Real estate 162,565 146,187 641,406
561,467 E-Cigarettes (2,851 ) (1,388 ) (1,970 ) 8,589 Total
revenues 430,330 417,590 1,657,197 1,591,315 Expenses: Cost
of sales: Tobacco* 191,585 198,058 697,900 735,725 Real estate
100,981 92,497 410,287 354,028 E-Cigarettes 22 950
1,540 7,307 Total cost of sales 292,588 291,505
1,109,727 1,097,060 Operating, selling, administrative and
general expenses 86,772 78,199 320,221 279,342 Litigation,
settlement and judgment expense 14,229 750 20,072 2,475
Restructuring charges 5,709 — 7,257 —
Operating income 31,032 47,136 199,920 212,438 Other income
(expenses): Interest expense (24,286 ) (37,321 ) (120,691 )
(160,991 ) Change in fair value of derivatives embedded within
convertible debt 5,695 11,962 24,455 19,409 Acceleration of
interest expense related to debt conversion — (93 ) — (5,205 )
Equity in earnings from real estate ventures 723 1,101 2,001 4,103
Equity in (losses) earnings from investments (26 ) 926 (2,681 )
3,140 Gain (loss) on sale of investment securities available for
sale (880 ) 27 11,138 (11 ) Impairment of investment securities
available for sale (635 ) — (12,846 ) — Other, net 1,308
2,535 6,409 9,396 Income before provision for
income taxes 12,931 26,273 107,705 82,279 Income tax expense 3,494
12,681 41,233 33,165 Net income
9,437 13,592 66,472 49,114 Net (income) loss attributed to
non-controlling interest (1,533 ) (1,377 ) (7,274 ) (12,258 )
Net income attributed to Vector Group Ltd. $ 7,904
$ 12,215 $ 59,198 $
36,856 Per basic common share: Net income
applicable to common shares attributed to Vector Group Ltd. $
0.06 $ 0.11 $ 0.49 $
0.33 Per diluted common share: Net
income applicable to common shares attributed to Vector Group Ltd.
$ 0.06 $ 0.11 $ 0.49 $
0.33 Cash distributions declared per share $
0.40 $ 0.38 $ 1.54 $
1.47
* Revenues and Cost of goods sold include excise taxes of
$118,342, $118,652, $439,647 and $446,086 respectively.
TABLE 2 VECTOR GROUP LTD. AND
SUBSIDIARIES RECONCILIATION OF PRO-FORMA ADJUSTED
REVENUES (Unaudited)
(Dollars in
Thousands)
Three Months Ended Year ended December 31, December 31, 2015
2014 2015 2014 Revenues $ 430,330
$ 417,590 $ 1,657,197 $
1,591,315 Purchase accounting adjustments (a) 481 85
1,925 1,768 Total adjustments 481 85 1,925 1,768
Pro-forma Adjusted Revenues (b) $ 430,811 $
417,675 $ 1,659,122 $ 1,593,083
Pro-forma Adjusted Revenues by Segment Tobacco (b) $
270,616 $ 272,791 $ 1,017,761 $ 1,021,259 E-cigarettes (2,851 )
(1,388 ) (1,970 ) 8,589 Real Estate (c) 163,046 146,272 643,331
563,235 Corporate and Other — — — — Total (b)
$ 430,811 $ 417,675 $ 1,659,122
$ 1,593,083 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 excise taxes of $118,342,
$118,652, $439,647, and $446,086 for the quarter and year ended
December 31, 2015 and 2014, respectively.
c. Includes Pro-forma Adjusted Revenues from Douglas Elliman
Realty, LLC $161,193, $144,564, $637,000, and $543,230 for the
quarter and year ended December 31, 2015 and 2014, respectively.
TABLE 3 VECTOR GROUP LTD. AND
SUBSIDIARIES COMPUTATION OF PRO-FORMA ADJUSTED EBITDA
(Unaudited)
(Dollars in
Thousands)
Three Months Ended Year ended December 31, December 31, 2015
2014 2015 2014 Net income attributed to Vector
Group Ltd. $ 7,904 $ 12,215 $ 59,198
$ 36,856 Interest expense 24,286 37,321 120,691
160,991 Income tax expense 3,494 12,681 41,233 33,165 Net income
attributed to non-controlling interest 1,533 1,377 7,274 12,258
Depreciation and amortization 6,258 5,900 25,654
24,499 EBITDA $ 43,475 $ 69,494 $ 254,050 $ 267,769
Change in fair value of derivatives embedded within convertible
debt (a) (5,695 ) (11,962 ) (24,455 ) (19,409 ) Equity in losses
(earnings) from investments (b) 26 (926 ) 2,681 (3,140 ) Loss
(gain) on sale of investment securities available for sale 880 (27
) (11,138 ) 11 Impairment of investment securities available for
sale 635 — 12,846 — Equity in earnings from real estate ventures
(c) (723 ) (1,101 ) (2,001 ) (4,103 ) Pension settlement charge — —
1,607 — Acceleration of interest expense related to debt conversion
— 93 — 5,205 Stock-based compensation expense (d) 1,972 1,224 5,620
3,251 Litigation settlement and judgment expense (e) 14,229 750
20,072 2,475 Impact of MSA settlement (f) 1,357 — (4,364 ) (1,419 )
Restructuring charges 5,709 — 7,257 — Purchase accounting
adjustments (g) 379 465 1,435 1,478 Other, net (1,308 ) (2,535 )
(6,409 ) (9,396 ) Pro-forma Adjusted EBITDA $ 60,936 $ 55,475 $
257,201 $ 242,722 Pro-forma Adjusted EBITDA attributed to
non-controlling interest (2,535 ) (2,244 ) (11,267 ) (15,858 )
Pro-forma Adjusted EBITDA attributed to Vector Group Ltd. $
58,401 $ 53,231 $ 245,934 $
226,864
Pro-forma Adjusted EBITDA by
Segment Tobacco $ 63,800 $ 54,882 $ 245,374 $ 211,168
E-cigarettes (5,327 ) (6,023 ) (13,037 ) (13,124 ) Real Estate (h)
6,413 8,447 38,111 56,036 Corporate and Other (3,950 ) (1,831 )
(13,247 ) (11,358 ) Total $ 60,936 $ 55,475
$ 257,201 $ 242,722
Pro-forma Adjusted EBITDA Attributed to Vector Group by
Segment Tobacco $ 63,800 $ 54,882 $ 245,374 $ 211,168
E-cigarettes (5,327 ) (6,023 ) (13,037 ) (13,124 ) Real Estate (i)
3,878 6,203 26,844 40,178 Corporate and Other (3,950 ) (1,831 )
(13,247 ) (11,358 ) Total $ 58,401 $ 53,231
$ 245,934 $ 226,864
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 from investments that the Company accounts for under the
equity method. c. Represents equity income (loss) 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
judgment expenses in the Engle progeny tobacco litigation.
f. Represents the Company's tobacco segment'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 $5,855, $6,125, $35,740,and $50,655 for the quarter
and year ended December 31, 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 $4,133, $4,324, $25,229, and $35,757
the quarter and year ended December 31, 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 Year ended December 31, December 31, 2015
2014 2015 2014 Net income attributed to Vector
Group Ltd. $ 7,904 $ 12,215 $ 59,198
$ 36,856 Acceleration of interest expense
related to debt conversion — 93 — 5,205 Change in fair value of
derivatives embedded within convertible debt (5,695 ) (11,962 )
(24,455 ) (19,409 ) Non-cash amortization of debt discount on
convertible debt 7,565 9,744 27,211 51,472 Litigation settlement
and judgment expense (a) 14,229 750 20,072 2,475 Pension settlement
charge — — 1,607 — Interest expense capitalized to real estate
ventures (9,928 ) — (9,928 ) — Impact of MSA settlement (b) 1,357 —
(4,364 ) (1,419 ) Restructuring charges 5,709 — 7,257 —
Out-of-period adjustment related to Douglas Elliman acquisition in
2013 (c) — — — (1,231 ) Douglas Elliman Realty, LLC purchase
accounting adjustments (d) 1,358 1,189 5,303
6,019 Total adjustments 14,595 (186 ) 22,703 43,112
Tax expense related to adjustments (6,073 ) 77 (9,447 ) (17,827 )
Adjustments to income tax expense due to purchase accounting (e) —
365 — 1,670 Pro-forma Adjusted Net
Income attributed to Vector Group Ltd. $ 16,426 $
12,471 $ 72,454 $ 63,811
Per diluted common share: Pro-forma Adjusted Net
Income applicable to common shares attributed to Vector Group Ltd.
$ 0.13 $ 0.11 $ 0.60 $
0.57 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.
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. e. Represents
adjustments to income tax expense due to a change in the Company's
marginal income tax rate from 40.6% to 41.35% as a result of its
acquisition of 20.59% 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 Year ended December 31, December 31, 2015
2014 2015 2014 Operating income $
31,032 $ 47,136 $ 199,920 $
212,438 Litigation settlement and judgment expense (a)
14,229 750 20,072 2,475 Pension settlement charge — — 1,607 —
Restructuring expense 5,709 — 7,257 — Impact of MSA settlement (b)
1,357 — (4,364 ) (1,419 ) Douglas Elliman Realty, LLC purchase
accounting adjustments (c) 1,925 1,684 7,513
8,527 Total adjustments 23,220 2,434 32,085 9,583
Pro-forma Adjusted Operating Income (d) $ 54,252 $
49,570 $ 232,005 $ 222,021
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.
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)
Three Months Ended Year ended December 31, December 31, 2015
2014 2015 2014 Operating income from tobacco
segment $ 39,878 $ 51,724 $ 209,393
$ 199,119 Litigation settlement and judgment
expense (a) 14,229 750 20,072 2,475 Pension settlement charge — —
1,607 — Restructuring expense 5,709 — 7,257 — Impact of MSA
settlement (b) 1,357 — (4,364 ) (1,419 ) Total
adjustments 21,295 750 24,572 1,056 Tobacco Adjusted
Operating Income $ 61,173 $ 52,474 $
233,965 $ 200,175
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 7 VECTOR GROUP LTD. AND
SUBSIDIARIES ANALYSIS OF NEW VALLEY LLC PRO-FORMA ADJUSTED
REVENUES (Unaudited)
(Dollars in
Thousands)
Three Months Ended Year ended December 31, December 31, 2015
2014 2015 2014 New Valley LLC revenues $
162,565 $ 146,187 $ 641,406 $
561,467 Purchase accounting adjustments (a) 481
85 1,925 1,768 Total adjustments 481 85 1,925
1,768 New Valley LLC Pro-forma Adjusted Revenues (b) $
163,046 $ 146,272 $ 643,331
$ 563,235 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 $161,193, $144,564,
$637,000, and $543,230 for the quarter and year ended December 31,
2015 and 2014, respectively.
TABLE 8
VECTOR GROUP LTD. AND SUBSIDIARIES COMPUTATION OF NEW
VALLEY LLC PRO-FORMA ADJUSTED EBITDA (Unaudited)
(Dollars in
Thousands)
Three Months Ended Year ended December 31, December 31, 2015
2014 2015 2014 Net income attributed to Vector
Group Ltd. from subsidiary non-guarantors (a) $ 1,453
$ 3,759 $ 11,668 $ 21,420 Interest
expense (a) 3 1 7 41 Income tax expense (a) 986 2,008 8,890 17,428
Net income attributed to non-controlling interest (a) 1,533 1,377
7,274 12,258 Depreciation and amortization 3,217 2,495
12,589 12,204 EBITDA $ 7,192 $ 9,640 $ 40,428
$ 63,351 Income from non-guarantors other than New Valley 25 7 91
93 Equity in earnings from real estate ventures (b) (723 ) (1,101 )
(2,001 ) (4,103 ) Purchase accounting adjustments (c) 379 465 1,435
1,478 Other, net (468 ) (489 ) (1,754 ) (4,786 ) Pro-forma Adjusted
EBITDA $ 6,405 $ 8,522 $ 38,199 $ 56,033 Pro-forma Adjusted EBITDA
attributed to non-controlling interest (2,535 ) (2,244 ) (11,267 )
(15,858 ) Pro-forma Adjusted EBITDA attributed to New Valley LLC $
3,870 $ 6,278 $ 26,932 $
40,175 Pro-forma Adjusted EBITDA by Segment
Real Estate (d) $ 6,413 $ 8,447 $ 38,111 $ 56,036 Corporate and
Other (8 ) 75 88 (3 ) Total (f) $ 6,405
$ 8,522 $ 38,199 $ 56,033
Pro-forma Adjusted EBITDA Attributed to New Valley LLC by
Segment Real Estate (e) $ 3,878 $ 6,203 $ 26,844 $ 40,178 Corporate
and Other (8 ) 74 88 (3 ) Total (f) $ 3,870
$ 6,277 $ 26,932 $ 40,175
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
December 31, 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 $5,855, $6,125, $35,740, and $50,655 for the quarter and
year ended December 31, 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 $4,133, $4,324, $25,229, and $35,757
for the quarter and year ended December 31, 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
$3,950, $1,831, $13,247 and $11,358 for the quarter and year ended
December 31, 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)
Three Months Ended Year ended December 31, December 31, 2015
2014 2015 2014 Douglas Elliman Realty, LLC
revenues $ 160,712 $ 144,479 $ 635,075
$ 541,462 Purchase accounting adjustments (a) 481
85 1,925 1,768 Total adjustments 481 85 1,925
1,768 Douglas Elliman Realty, LLC Pro-forma Adjusted
Revenues $ 161,193 $ 144,564 $
637,000 $ 543,230 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)
Three Months Ended Year ended December 31, December 31, 2015
2014 2015 2014 Net income attributed to
Douglas Elliman Realty, LLC $ 2,450 $ 4,682 $
22,163 $ 38,414 Interest expense 1 1 4 38 Income tax
expense (45 ) 273 831 1,374 Depreciation and amortization 3,148
2,430 12,343 11,855 Douglas Elliman
Realty, LLC EBITDA $ 5,554 $ 7,386 $ 35,341 $ 51,681 Equity (loss)
income from real estate ventures (a) (37 ) (24 ) (945 ) (110 )
Purchase accounting adjustments (b) 379 (1,218 ) 1,435 1,478 Other,
net (41 ) (19 ) (91 ) (2,394 ) Douglas Elliman Realty, LLC
Pro-forma Adjusted EBITDA $ 5,855 $ 6,125
$ 35,740 $ 50,655
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160308006480/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 III305-579-8000
Vector (NYSE:VGR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Vector (NYSE:VGR)
Historical Stock Chart
From Apr 2023 to Apr 2024
