Vector Group Ltd. (NYSE:VGR) today announced financial results
for the three and six months ended June 30, 2016.
GAAP Financial Results
Second quarter 2016 revenues were $438.3 million, compared to
revenues of $416.2 million in the second quarter of 2015. The
Company recorded operating income of $70.7 million in the second
quarter of 2016, compared to operating income of $55.8 million in
the second quarter of 2015. Net income attributed to Vector Group
Ltd. for the 2016 second quarter was $24.0 million, or $0.20 per
diluted common share, compared to net income of $17.6 million, or
$0.14 per diluted common share, in the 2015 second quarter.
For the six months ended June 30, 2016 revenues were $819.1
million, compared to revenues of $776.9 million for the six months
ended June 30, 2015. The Company recorded operating income of
$132.9 million for the six months ended June 30, 2016, compared to
operating income of $99.5 million for the six months ended June 30,
2015. Net income attributed to Vector Group Ltd. for the six months
ended June 30, 2016 was $43.4 million, or $0.35 per diluted common
share, compared to net income of $38.8 million, or $0.32 per
diluted common share for the six months ended June 30, 2015.
Non-GAAP Financial Measures
Non-GAAP financial measures 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 settlement expense in the Tobacco
segment, stock-based 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, 2016 and 2015 are
included in Tables 2 through 10.
Three months ended June 30, 2016 compared to the three
months ended June 30, 2015
Second quarter 2016 Adjusted Revenues (as described in Table 2
attached hereto) were $438.3 million compared to $416.7 million in
2015. The increase was primarily due to an increase in Adjusted
Revenues in the Real Estate segment.
Adjusted EBITDA attributed to Vector Group (as described
below and in Table 3 attached hereto) were $75.1 million for the
second quarter of 2016 as compared to $63.8 million for the second
quarter of 2015. The increase in Adjusted EBITDA attributed to
Vector Group for the three months ended June 30, 2016 was primarily
attributable to higher profits in the Tobacco and Real Estate
segments.
Adjusted Net Income (as described below and in Table 4 attached
hereto) was $24.6 million or $0.20 per diluted share for the three
months ended June 30, 2016 and $20.8 million or $0.17 per diluted
share for the three months ended June 30, 2015.
Adjusted Operating Income (as described below and in Table 5
attached hereto) was $71.5 million for the three months ended June
30, 2016 and $60.6 million for the three months ended June 30,
2015.
Six months ended June 30, 2016 compared to the six months
ended June 30, 2015
For the six months ended June 30, 2016 Adjusted Revenues
(as described in Table 2 attached hereto) were $819.1 million
compared to $777.9 million in 2015 . The increase was primarily due
to an increase in Adjusted Revenues in the Real Estate Segment of
$48.3 million.
Adjusted EBITDA attributed to Vector Group (as described
below and in Table 3 attached hereto) were $144.7 million for the
six months ended June 30, 2016 compared to $115.0 million in
2015. The increase in Adjusted EBITDA attributed to Vector Group
for the six months ended June 30, 2016 was primarily attributable
to higher profits in the Tobacco and Real Estate segments.
Adjusted Net Income (as described below and in Table 4 attached
hereto) was $42.7 million or $0.35 per diluted share for the six
months ended June 30, 2016 and $43.0 million or $0.35 per diluted
share for the six months ended June 30, 2015.
Adjusted Operating Income (as described below and in Table 5
attached hereto) was $136.8 million for the six months ended June
30, 2016 and $106.9 million for the six months ended June 30,
2015.
Tobacco Segment Financial Results
For the second quarter 2016, the Tobacco segment had revenues of
$255.5 million, compared to $254.9 million for the second quarter
2015. The increase in revenues was primarily due to favorable net
pricing variances partially offset by a 1.5% decline in unit sales
volume.
For the six months ended June 30, 2016, the Tobacco segment had
revenues of $476.5 million, compared to $483.0 million for the six
months ended June 30, 2015. The decrease in revenues was primarily
driven by a 4.2% decline in unit sales volume partially offset by
favorable net pricing variances.
Operating Income from the Tobacco segment was $66.0 million and
$127.5 million for the three and six months ended June 30, 2016
compared to $56.2 million and $105.9 million for the three and six
months ended June 30, 2015, respectively.
Non-GAAP Financial Measures
Tobacco Adjusted Operating Income (described below and included
in Table 6 attached hereto) for the second quarter 2016 and 2015
was $66.0 million and $59.1 million, respectively. Tobacco Adjusted
Operating Income for the six months ended June 30, 2016 and 2015
was $129.9 million and $109.6 million, respectively.
For the three months ended June 30, 2016, the Tobacco
segment had conventional cigarette (wholesale) shipments of
approximately 2.13 billion units compared to 2.16 billion units for
the three months ended June 30, 2015. For the six months ended
June 30, 2016, the Tobacco segment had conventional cigarette
(wholesale) shipments of approximately 3.93 billion units compared
to 4.10 billion for the six months ended June 30, 2015.
Liggett's retail market share remained stable at 3.4% during the
six months ended June 30, 2016. Compared to the six months ended
June 30, 2015, Liggett's retail shipments declined by 1.1% while
the overall industry's retail shipments declined by 2.0%, according
to data from Management Science Associates, Inc.
Real Estate Segment Financial Results
For the second quarter 2016, the Real Estate segment had
revenues of $182.8 million, compared to $161.0 million for the
second quarter 2015. For the six months ended June 30, 2016, the
Real Estate segment had revenues of $342.5 million compared to
$293.3 million for the six months ended June 30, 2015. For second
quarter 2016, the Real Estate segment reported Net Income of $6.5
million, compared to $4.1 million for the second quarter 2015. For
the six months ended June 30, 2016, the Real Estate segment
reported Net Income of $9.6 million compared to $5.5 million for
the six months ended June 30, 2015.
Douglas Elliman's results are included in Vector Group Ltd.'s
Real Estate segment. For the second quarter 2016, Douglas Elliman
had revenues of $181.7 million, compared to $159.6 million for the
second quarter 2015. For the six months ended June 30, 2016,
Douglas Elliman had revenues of $339.3 million compared to $289.4
million for the six months ended June 30, 2015. For second quarter
2016, Douglas Elliman reported Net Income of $11.4 million,
compared to $6.4 million for the second quarter 2015. For the six
months ended June 30, 2016, the Douglas Elliman Net Income of $18.5
million compared to $7.3 million for the six months ended June 30,
2015.
Non-GAAP Financial Measures
For the second quarter 2016, the Real Estate segment had
Adjusted Revenues of $182.8 million, compared to $161.5 million for
the second quarter 2015. The increase in revenues was primarily due
to an increase in commissions and other brokerage income at Douglas
Elliman. For the second quarter 2016, Real Estate Adjusted EBITDA
attributed to the Company were $10.6 million, compared to $7.4
million for the second quarter 2015.
For the six months ended June 30, 2016, the Real Estate segment
had Adjusted Revenues of $342.5 million compared to $294.2 million
for the six months ended June 30, 2015. The increase in revenues
was primarily due to an increase in commissions and other brokerage
income at Douglas Elliman. For the six months ended June 30, 2016,
Real Estate Adjusted EBITDA attributed to the Company were $18.1
million compared to $11.7 million for the six months ended June 30,
2015.
Douglas Elliman's results are included in Vector Group Ltd.'s
Real Estate segment. Douglas Elliman's Adjusted Revenues for
the second quarter 2016 were $181.7 million, compared to $160.1
million for the second quarter 2015.
For the second quarter 2016, Douglas Elliman's Adjusted EBITDA
were $14.8 million ($10.5 million attributed to the Company),
compared to $9.9 million ($7.0 million attributed to the Company)
for the second quarter 2015.
For the six months ended June 30, 2016, Douglas Elliman's
Adjusted Revenues were $339.3 million compared to $290.3 million
for the six months ended June 30, 2015.
For the six months ended June 30, 2016, Douglas Elliman's
Adjusted EBITDA were $23.9 million ($16.9 million attributed to the
Company), compared to $13.6 million ($9.6 million attributed to the
Company) for the six months ended June 30, 2015.
For the three and six months ended June 30, 2016 , Douglas
Elliman achieved closed sales of approximately $6.4 billion and
$12.1 billion, compared to $5.5 billion and $9.6 billion for the
three and six months ended June 30, 2015.
E-cigarettes Segment Financial Results
For the second quarter, the E-cigarette segment had a loss of
Adjusted EBITDA of $0.1 million compared to revenues of $0.3
million and a loss of Adjusted EBITDA of $2.4 million for the
second quarter 2015.
For the six months ended June 30, 2016, the E-cigarette segment
had a loss of Adjusted EBITDA of $0.3 million compared to revenues
of $0.7 million and a loss of Adjusted EBITDA of $5.6 million for
the six months ended June 30, 2015.
Retrospective Adjustment to Previously Reported
Results
Amounts previously reported for the three and six months ended
June 30, 2015 have been adjusted, as required by Generally Accepted
Accounting Principles, to retroactively apply the equity method of
accounting for two investments (Ladenburg Thalmann Financial
Services Inc. and Castle Brands, Inc.) since the inception of each
investment. Please refer to the Company’s Annual Report on Form
10-K for the year ended December 31, 2015 as well as the Company’s
Current Report on Form 8-K, dated April 1, 2016, for additional
information.
Non-GAAP Financial Measures
Adjusted Revenues, New Valley LLC Adjusted Revenues and Douglas
Elliman Realty, LLC Adjusted Revenues (hereafter referred to as
"the Non-GAAP Revenue Financial Measures") and Adjusted EBITDA,
Adjusted Net Income, Adjusted Operating Income, Tobacco Adjusted
Operating Income, New Valley LLC Adjusted EBITDA and Douglas
Elliman Realty, LLC Adjusted EBITDA (hereafter, along with the
Non-GAAP Revenue Measures 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 and ages of
related assets among otherwise comparable companies. In the case of
the Non-GAAP Revenue Financial Measures, management believes
revenue growth in its real estate segment is an important measure
of growth because increased revenues generally result in increased
gross margin as a result of absorption of fixed operating costs,
which management believes will lead to increased future
profitability as well as increased capacity to expand into new and
existing markets. A key strategy of the Company is its ability to
move into new markets and therefore gross revenues provide
information with respect to the Company's ability to achieve its
strategic objectives. Management also believes increased revenues
generally indicate increased market share in existing markets as
well as expansion into new markets. Consequently, management
believes the Non-GAAP Revenue Financial Measures are meaningful
indicators of operating performance.
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, 2016 and 2015.
Conference Call to Discuss Second
Quarter 2016 Results
As previously announced, the Company will host a conference call
and webcast on Thursday, July 28, 2016 at 8:30 AM. (ET)
to discuss second quarter 2016 results. Investors
can access the call by dialing 800-859-8150 and entering
68755577 as the conference ID number. The call will also be
available via live webcast atwww.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 28, 2016 through August 11, 2016. To access
the replay, dial 877-656-8905 and enter 68755577 as the
conference ID number. The archived webcast will also be available
at www.investorcalendar.com for one year.
Vector Group is a holding company that indirectly
owns Liggett Group LLC, Vector Tobacco
Inc. and Zoom E-Cigs LLC and directly owns New
Valley LLC, which owns a controlling interest in Douglas
Elliman Realty, LLC. Additional information concerning the company
is available on the Company's
website, www.VectorGroupLtd.com.
[Financial Tables Follow]
TABLE 1
VECTOR GROUP LTD. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in
Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended June 30,
June 30, 2016 2015 2016 2015 (Unaudited) (Unaudited)
Revenues Tobacco* $ 255,498 $ 254,890 $ 476,513 $
482,975 Real estate 182,765 161,022 342,512 293,278 E-Cigarettes 10
261 48 680 Total revenues 438,273
416,173 819,073 776,933 Expenses: Cost of sales: Tobacco*
168,607 174,867 305,345 331,897 Real estate 115,017 103,870 214,695
188,228 E-Cigarettes 7 467 13 1,097
Total cost of sales 283,631 279,204 520,053 521,222
Operating, selling, administrative and general expenses 83,922
79,916 163,750 154,097 Litigation, settlement and judgment expense
— 1,250 2,350 2,093 Restructuring charges — — 41
— Operating income 70,720 55,803 132,879 99,521
Other income (expenses): Interest expense (36,369 ) (31,761
) (67,089 ) (63,507 ) Change in fair value of derivatives embedded
within convertible debt 7,416 5,256 17,110 11,716 Equity in
earnings from real estate ventures 2,813 1,856 2,306 2,194 Equity
in earnings (losses) from investments 1,089 (2,163 ) (582 ) (1,551
) Gain (loss) on sale of investment securities available for sale
139 (190 ) 706 12,839 Impairment of investment securities available
for sale (49 ) — (4,862 ) — Other, net 581 1,821
1,628 3,758 Income before provision for income taxes
46,340 30,622 82,096 64,970 Income tax expense 19,003 11,178
33,366 24,045 Net income 27,337 19,444
48,730 40,925 Net income attributed to non-controlling
interest (3,322 ) (1,837 ) (5,377 ) (2,097 ) Net income
attributed to Vector Group Ltd. $ 24,015 $ 17,607 $
43,353 $ 38,828 Per basic common share:
Net income applicable to common shares attributed to Vector Group
Ltd. $ 0.20 $ 0.14 $ 0.36 $ 0.32
Per diluted common share: Net income applicable to common
shares attributed to Vector Group Ltd. $ 0.20 $ 0.14
$ 0.35 $ 0.32 Cash distributions declared per
share $ 0.40 $ 0.38 $ 0.80 $ 0.76
* Revenues and Cost of goods sold include excise taxes of
$106,861, $108,912, $197,707 and $206,271, respectively.
TABLE 2
VECTOR GROUP LTD. AND
SUBSIDIARIES
REVENUES AND RECONCILIATION OF ADJUSTED
REVENUES
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2016 2016 2015 2016 2015
Revenues $ 1,699,337 $ 438,273 $ 416,173 $ 819,073
$ 776,933 Purchase accounting adjustments (a) 962
— 482 — 963 Total adjustments 962 — 482
— 963 Adjusted Revenues (b) $ 1,700,299 $ 438,273
$ 416,655 $ 819,073 $ 777,896
Revenues by Segment
Tobacco (b) $ 1,011,299 $ 255,498 $ 254,890 $ 476,513 $ 482,975
E-cigarettes (2,602 ) 10 261 48 680 Real Estate (c) 690,640 182,765
161,022 342,512 293,278 Corporate and Other — — —
— — Total (b) $ 1,699,337 $ 438,273 $
416,173 $ 819,073 $ 776,933
Adjusted
Revenues by Segment Tobacco (b) $ 1,011,299 $ 255,498 $ 254,890
$ 476,513 $ 482,975 E-cigarettes (2,602 ) 10 261 48 680 Real Estate
(c) 691,602 182,765 161,504 342,512 294,241 Corporate and Other —
— — — — Total (b) $ 1,700,299 $
438,273 $ 416,655 $ 819,073 $ 777,896
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 $431,083 for the last twelve
months ended June 30, 2016 and $106,861, $108,912, $197,707
and $206,271 for the three and six months ended June 30, 2016
and 2015, respectively.c. Includes Adjusted Revenues from Douglas
Elliman Realty, LLC of $685,988 for the last twelve months ended
June 30, 2016 and $181,730, $160,098, $339,314 and $290,326
for the three and six months ended June 30, 2016 and 2015,
respectively.
TABLE 3
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED
EBITDA
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2016 2016 2015 2016 2015
Net income attributed to Vector Group Ltd. $ 63,723 $ 24,015
$ 17,607 $ 43,353 $ 38,828 Interest expense 124,273
36,369 31,761 67,089 63,507 Income tax expense 50,554 19,003 11,178
33,366 24,045 Net income attributed to non-controlling interest
10,554 3,322 1,837 5,377 2,097 Depreciation and amortization 23,965
5,870 6,442 11,034 12,723 EBITDA
$ 273,069 $ 88,579 $ 68,825 $ 160,219 $ 141,200 Change in fair
value of derivatives embedded within convertible debt (a) (29,849 )
(7,416 ) (5,256 ) (17,110 ) (11,716 ) Equity in losses (earnings)
from investments (b) 1,712 (1,089 ) 2,163 582 1,551 Loss (gain) on
sale of investment securities available for sale 995 (139 ) 190
(706 ) (12,839 ) Impairment of investment securities available for
sale 17,708 49 — 4,862 — Equity in earnings from real estate
ventures (c) (2,113 ) (2,813 ) (1,856 ) (2,306 ) (2,194 ) Pension
settlement charge — — 1,607 — 1,607 Stock-based compensation
expense (d) 8,059 2,532 1,236 4,839 2,400 Litigation settlement and
judgment expense (e) 20,329 — 1,250 2,350 2,093 Impact of MSA
settlement (f) (4,364 ) — — — — Restructuring charges 7,298 — — 41
— Purchase accounting adjustments (g) 1,293 348 358 548 690 Other,
net (4,279 ) (581 ) (1,821 ) (1,628 ) (3,758 ) Adjusted EBITDA $
289,858 $ 79,470 $ 66,696 $ 151,691 $ 119,034 Adjusted EBITDA
attributed to non-controlling interest (14,267 ) (4,358 ) (2,913 )
(6,997 ) (3,997 ) Adjusted EBITDA attributed to Vector Group Ltd. $
275,591 $ 75,112 $ 63,783 $ 144,694 $
115,037
Adjusted EBITDA by Segment Tobacco $
264,749 $ 68,536 $ 62,024 $ 134,871 $ 115,496 E-cigarettes (7,757 )
(91 ) (2,400 ) (284 ) (5,564 ) Real Estate (h) 47,547 14,997 10,326
25,153 15,717 Corporate and Other (14,681 ) (3,972 ) (3,254 )
(8,049 ) (6,615 ) Total $ 289,858 $ 79,470 $ 66,696
$ 151,691 $ 119,034
Adjusted EBITDA
Attributed to Vector Group by Segment Tobacco $ 264,749 $
68,536 $ 62,024 $ 134,871 $ 115,496 E-cigarettes (7,757 ) (91 )
(2,400 ) (284 ) (5,564 ) Real Estate (i) 33,280 10,639 7,413 18,156
11,720 Corporate and Other (14,681 ) (3,972 ) (3,254 ) (8,049 )
(6,615 ) Total $ 275,591 $ 75,112 $ 63,783 $
144,694 $ 115,037
a. Represents income or losses recognized from changes in the
fair value of the derivatives embedded in the Company's convertible
debt.b. Represents equity in (earnings) losses recognized from
investments that the Company accounts for under the equity
method.c. Represents equity in earnings 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 Adjusted EBITDA for Douglas Elliman Realty, LLC of $46,031
for the last twelve months ended June 30, 2016 and $14,818,
$9,906, $23,882 and $13,591 for the three and six months ended
June 30, 2016 and 2015, respectively. Amounts reported in this
footnote reflect 100% of Douglas Elliman Realty, LLC's entire
Adjusted EBITDA.i. Includes Adjusted EBITDA for Douglas Elliman
Realty, LLC less non-controlling interest of $32,493 for the last
twelve months ended June 30, 2016 and $10,460, $6,993, $16,858
and $9,594 for the three and six months ended June 30, 2016
and 2015, respectively. Amounts reported in this footnote have
adjusted Douglas Elliman Realty, LLC's Adjusted EBITDA for
non-controlling interest.
TABLE 4
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF ADJUSTED NET
INCOME
(Unaudited)
(Dollars in
Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended June 30,
June 30, 2016 2015 2016 2015 Net income
attributed to Vector Group Ltd. $ 24,015 $ 17,607 $ 43,353
$ 38,828 Change in fair value of derivatives embedded
within convertible debt (7,416 ) (5,256 ) (17,110 ) (11,716 )
Non-cash amortization of debt discount on convertible debt 9,170
6,516 17,456 12,459 Litigation settlement and judgment expense (a)
— 1,250 2,350 2,093 Pension settlement charge — 1,607 — 1,607
Impact of interest expense capitalized to real estate ventures, net
(1,315 ) — (4,835 ) — Restructuring charges — — 41 — Douglas
Elliman Realty, LLC purchase accounting adjustments (b) 581
1,343 1,057 2,594 Total adjustments 1,020
5,460 (1,041 ) 7,037 Tax expense related to adjustments (424
) (2,258 ) 433 (2,910 ) Adjusted Net
Income attributed to Vector Group Ltd. $ 24,611 $ 20,809
$ 42,745 $ 42,955 Per diluted common
share: Adjusted Net Income applicable to common shares
attributed to Vector Group Ltd. $ 0.20 $ 0.17 $ 0.35
$ 0.35
a. Represents accruals for settlements of judgment expenses in
the Engle progeny tobacco litigation.b. 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 ADJUSTED OPERATING
INCOME
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2016 2016 2015 2016 2015
Operating income $ 233,278 $ 70,720 $ 55,803 $
132,879 $ 99,521 Litigation settlement and judgment
expense (a) 20,329 — 1,250 2,350 2,093 Pension settlement charge —
— 1,607 — 1,607 Restructuring expense 7,298 — — 41 — Impact of MSA
settlement (b) (4,364 ) — — — — Douglas Elliman Realty, LLC
purchase accounting adjustments (c) 5,335 823 1,903
1,497 3,675 Total adjustments 28,598 823 4,760 3,888
7,375 Adjusted Operating Income (d) $ 261,876 $
71,543 $ 60,563 $ 136,767 $ 106,896
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
AND TOBACCO ADJUSTED EBITDA
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2016 2016 2015 2016 2015
Tobacco Adjusted Operating Income:
Operating income from tobacco segment $ 231,007 $ 66,016 $ 56,215 $
127,499 $ 105,885 Litigation settlement and judgment expense
(a) 20,329 — 1,250 2,350 2,093 Pension settlement charge — — 1,607
— 1,607 Restructuring expense 7,298 — — 41 — Impact of MSA
settlement (b) (4,364 ) — — — — Total
adjustments 23,263 — 2,857 2,391 3,700 Tobacco Adjusted
Operating Income $ 254,270 $ 66,016 $ 59,072 $
129,890 $ 109,585 LTM Three Months Ended
Six Months Ended June 30, June 30, June 30, 2016 2016
2015 2016 2015
Tobacco Adjusted EBITDA:
Operating income from tobacco segment $ 231,007 $ 66,016 $ 56,215 $
127,499 $ 105,885 Litigation settlement and judgment expense
(a) 20,329 — 1,250 2,350 2,093 Pension settlement charge — — 1,607
— 1,607 Restructuring expense 7,298 — — 41 — Impact of MSA
settlement (b) (4,364 ) — — — — Total
adjustments 23,263 — 2,857 2,391 3,700 Tobacco Adjusted
Operating Income 254,270 66,016 59,072 129,890 109,585
Depreciation and amortization 10,395 2,499 2,931 4,939 5,867
Stock-based compensation expense 84 21 21 42
44 Total adjustments 10,479 2,520 2,952 4,981 5,911
Tobacco Adjusted EBITDA $ 264,749 $ 68,536 $ 62,024
$ 134,871 $ 115,496
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
RECONCILIATION OF NEW VALLEY LLC
ADJUSTED REVENUES
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2016 2016 2015 2016 2015
New Valley LLC revenues $ 690,640 $ 182,765 $ 161,022
$ 342,512 $ 293,278 Purchase accounting adjustments
(a) 962 — 482 — 963 Total adjustments
962 — 482 — 963 New Valley LLC Adjusted Revenues (b) $
691,602 $ 182,765 $ 161,504 $ 342,512 $
294,241
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 Adjusted
Revenues from Douglas Elliman Realty, LLC of $685,988 for the last
twelve months ended June 30, 2016 and $181,730, $160,098,
$339,314 and $290,326 for the three and six months ended
June 30, 2016 and 2015, respectively.
TABLE 8
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF NEW VALLEY LLC
ADJUSTED EBITDA
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2016 2016 2015 2016 2015
Net income attributed to Vector Group Ltd. from subsidiary
non-guarantors (a) $ 15,718 $ 6,527 $ 4,070 $ 9,570 $
5,520 Interest expense (a) 11 4 2 7 3 Income tax expense (a) 11,842
5,038 3,201 7,461 4,509 Net income attributed to non-controlling
interest (a) 10,554 3,322 1,837 5,377 2,097 Depreciation and
amortization 11,830 2,943 3,076 5,225
5,984 EBITDA $ 49,955 $ 17,834 $ 12,186 $ 27,640 $ 18,113
Income from non-guarantors other than New Valley 100 42 51 76 67
Equity in earnings from real estate ventures (b) (2,113 ) (2,813 )
(1,856 ) (2,306 ) (2,194 ) Purchase accounting adjustments (c)
1,293 348 358 548 690 Other, net (1,613 ) (430 ) (429 ) (840 ) (981
) Adjusted EBITDA $ 47,622 $ 14,981 $ 10,310 $ 25,118 $ 15,695
Adjusted EBITDA attributed to non-controlling interest (14,267 )
(4,358 ) (2,913 ) (6,997 ) (3,997 ) Adjusted EBITDA attributed to
New Valley LLC $ 33,355 $ 10,623 $ 7,397 $
18,121 $ 11,698 Adjusted EBITDA by Segment
Real Estate (d) $ 47,547 $ 14,997 $ 10,326 $ 25,153 $ 15,717
Corporate and Other 75 (16 ) (16 ) (35 ) (22 ) Total (f) $
47,622 $ 14,981 $ 10,310 $ 25,118 $
15,695 Adjusted EBITDA Attributed to New Valley LLC
by Segment Real Estate (e) $ 33,280 $ 10,639 $ 7,413 $ 18,156 $
11,720 Corporate and Other 75 (16 ) (16 ) (35 ) (22 ) Total
(f) $ 33,355 $ 10,623 $ 7,397 $ 18,121
$ 11,698
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, 2015 and the quarterly period ended June 30, 2016,
respectively.b. Represents equity in earnings 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 Adjusted
EBITDA for Douglas Elliman Realty, LLC of $46,031 for the last
twelve months ended June 30, 2016 and $14,818, $9,906, $23,882
and $13,591 for the three and six months ended June 30, 2016
and 2015, respectively. Amounts reported in this footnote reflect
100% of Douglas Elliman Realty, LLC's entire Adjusted EBITDA.e.
Includes Adjusted EBITDA for Douglas Elliman Realty, LLC less
non-controlling interest of $32,493 for the last twelve months
ended June 30, 2016 and $10,460, $6,993, $16,858 and $9,594
for the three and six months ended June 30, 2016 and 2015,
respectively. Amounts reported in this footnote have adjusted
Douglas Elliman Realty, LLC's Adjusted EBITDA for non-controlling
interest.f. New Valley's Adjusted EBITDA does not include an
allocation of Vector Group Ltd.'s "Corporate and Other" segment's
expenses (for purposes of computing Adjusted EBITDA contained in
Table 3 of this press release) of $14,681 for the last twelve
months ended June 30, 2016 and $3,972, $3,254, $8,049 and
$6,615 for the three and six months ended June 30, 2016 and
2015, respectively.
TABLE 9
VECTOR GROUP LTD. AND
SUBSIDIARIES
RECONCILIATION OF DOUGLAS ELLIMAN
REALTY, LLC ADJUSTED REVENUES
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2016 2016 2015 2016 2015
Douglas Elliman Realty, LLC revenues $ 685,026 $ 181,730 $
159,616 $ 339,314 $ 289,363 Purchase accounting
adjustments (a) 962 — 482 — 963 Total
adjustments 962 — 482 — 963 Douglas Elliman Realty, LLC
Adjusted Revenues $ 685,988 $ 181,730 $ 160,098
$ 339,314 $ 290,326
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
RECONCILIATION OF DOUGLAS ELLIMAN
REALTY, LLC ADJUSTED EBITDA
AND DOUGLAS ELLIMAN REALTY, LLC
ADJUSTED EBITDA ATTRIBUTED TO REAL ESTATE SEGMENT
(Unaudited)
(Dollars in
Thousands)
LTM Three Months Ended Six Months Ended
June 30, June 30, June 30, 2016 2016 2015 2016 2015
Net income attributed to Douglas Elliman Realty, LLC $
33,384 $ 11,420 $ 6,391 $ 18,497 $ 7,276 Interest expense 1
— 2 — 3 Income tax expense 942 390 284 638 527 Depreciation and
amortization 11,536 2,859 3,017 5,059
5,866 Douglas Elliman Realty, LLC EBITDA $ 45,863 $ 14,669 $
9,694 $ 24,194 $ 13,672 Equity income from real estate ventures (a)
(1,005 ) (154 ) (104 ) (757 ) (697 ) Purchase accounting
adjustments (b) 1,293 348 358 548 690 Other, net (120 ) (45 ) (42 )
(103 ) (74 ) Douglas Elliman Realty, LLC Adjusted EBITDA $ 46,031 $
14,818 $ 9,906 $ 23,882 $ 13,591 Douglas Elliman Realty, LLC
Adjusted EBITDA attributed to non-controlling interest (13,538 )
(4,358 ) (2,913 ) (7,024 ) (3,997 ) Douglas Elliman Realty, LLC
Adjusted EBITDA attributed to Real Estate Segment 32,493
10,460 6,993 16,858 9,594
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/20160728005637/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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