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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Vector Group Ltd | NYSE:VGR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.30 | -2.90% | 10.03 | 10.395 | 10.23 | 10.36 | 819,728 | 00:57:26 |
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Delaware
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1-5759
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65-0949535
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(State or other jurisdiction of incorporation
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Commission File Number
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(I.R.S. Employer Identification No.)
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incorporation or organization)
|
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x
Large accelerated filer
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o
Accelerated filer
|
o
Non-accelerated filer
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o
Smaller reporting company
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(Do not check if a smaller reporting company)
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Page
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PART I. FINANCIAL INFORMATION
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|
|
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Item 1. Vector Group Ltd. Condensed Consolidated Financial Statements (Unaudited):
|
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June 30,
2016 |
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December 31,
2015 |
||||
ASSETS:
|
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||||
Current assets:
|
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|
||||
Cash and cash equivalents
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$
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474,738
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|
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$
|
240,368
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Investment securities available for sale
|
160,854
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|
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181,976
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Accounts receivable - trade, net
|
25,076
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|
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23,889
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Inventories
|
92,735
|
|
|
86,516
|
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Income taxes receivable, net
|
218
|
|
|
2,841
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|
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Restricted assets
|
9,437
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|
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9,195
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Other current assets
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40,163
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|
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38,954
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Total current assets
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803,221
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|
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583,739
|
|
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Property, plant and equipment, net
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71,904
|
|
|
75,632
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|
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Investments in real estate, net
|
23,328
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|
|
23,318
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Long-term investments
|
59,369
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|
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62,726
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Investments in real estate ventures
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206,139
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217,168
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Restricted assets
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9,386
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|
|
12,303
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|
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Goodwill and other intangible assets, net
|
262,866
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|
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263,959
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Prepaid pension costs
|
21,302
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|
|
20,650
|
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Other assets
|
21,985
|
|
|
21,120
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Total assets
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$
|
1,479,500
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|
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$
|
1,280,615
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
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|
||||
Current liabilities:
|
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|
||||
Current portion of notes payable and long-term debt
|
$
|
16,615
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|
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$
|
8,919
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Current payments due under the Master Settlement Agreement
|
56,972
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|
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29,241
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Current portion of employee benefits
|
914
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|
|
915
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|
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Income taxes payable, net
|
—
|
|
|
96
|
|
||
Litigation accruals
|
3,514
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|
|
22,904
|
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Other current liabilities
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140,388
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|
|
154,217
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Total current liabilities
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218,403
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|
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216,292
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Notes payable, long-term debt and other obligations, less current portion
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1,110,731
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856,108
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Fair value of derivatives embedded within convertible debt
|
126,932
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144,042
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Non-current employee benefits
|
55,308
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|
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55,055
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Deferred income taxes, net
|
87,914
|
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79,429
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Payments due under the Master Settlement Agreement
|
22,257
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20,094
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Litigation accruals
|
22,619
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24,718
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Other liabilities
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10,772
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7,038
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Total liabilities
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1,654,936
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1,402,776
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Commitments and contingencies (Note 7)
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Stockholders' deficiency:
|
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|
||||
Preferred stock, par value $1.00 per share, 10,000,000 shares authorized
|
—
|
|
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—
|
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Common stock, par value $0.10 per share, 250,000,000 shares authorized, 123,842,329 and 123,792,329 shares issued and outstanding
|
12,384
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12,379
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|
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Accumulated deficit
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(261,370
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)
|
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(210,113
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)
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Accumulated other comprehensive income
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(8,539
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)
|
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(8,313
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)
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Total Vector Group Ltd. stockholders' deficiency
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(257,525
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)
|
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(206,047
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)
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Non-controlling interest
|
82,089
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83,886
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Total stockholders' deficiency
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(175,436
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)
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(122,161
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)
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Total liabilities and stockholders' deficiency
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$
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1,479,500
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$
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1,280,615
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2016
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2015
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2016
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2015
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||||||||
Revenues:
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||||||||
Tobacco*
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$
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255,498
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$
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254,890
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$
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476,513
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$
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482,975
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Real estate
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182,765
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161,022
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342,512
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293,278
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E-Cigarettes
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10
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261
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48
|
|
|
680
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|
||||
Total revenues
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438,273
|
|
|
416,173
|
|
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819,073
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776,933
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Expenses:
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Cost of sales:
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||||||||
Tobacco*
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168,607
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|
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174,867
|
|
|
305,345
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|
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331,897
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|
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Real estate
|
115,017
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103,870
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214,695
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188,228
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E-Cigarettes
|
7
|
|
|
467
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13
|
|
|
1,097
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|
||||
Total cost of sales
|
283,631
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|
|
279,204
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520,053
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521,222
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||||
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||||||||
Operating, selling, administrative and general expenses
|
83,922
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|
|
79,916
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|
163,750
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|
154,097
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Litigation settlement and judgment expense
|
—
|
|
|
1,250
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|
|
2,350
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|
2,093
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Restructuring charges
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—
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—
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41
|
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—
|
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||||
Operating income
|
70,720
|
|
|
55,803
|
|
|
132,879
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|
|
99,521
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||||
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||||||||
Other income (expenses):
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||||||||
Interest expense
|
(36,369
|
)
|
|
(31,761
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)
|
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(67,089
|
)
|
|
(63,507
|
)
|
||||
Change in fair value of derivatives embedded within convertible debt
|
7,416
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|
|
5,256
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|
|
17,110
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|
|
11,716
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|
||||
Equity in earnings from real estate ventures
|
2,813
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|
1,856
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|
2,306
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|
|
2,194
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||||
Equity in earnings (losses) from investments
|
1,089
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(2,163
|
)
|
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(582
|
)
|
|
(1,551
|
)
|
||||
Gain (loss) on sale of investment securities available for sale
|
139
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|
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(190
|
)
|
|
706
|
|
|
12,839
|
|
||||
Impairment of investment securities available for sale
|
(49
|
)
|
|
—
|
|
|
(4,862
|
)
|
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—
|
|
||||
Other, net
|
581
|
|
|
1,821
|
|
|
1,628
|
|
|
3,758
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|
||||
Income before provision for income taxes
|
46,340
|
|
|
30,622
|
|
|
82,096
|
|
|
64,970
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|
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Income tax expense
|
19,003
|
|
|
11,178
|
|
|
33,366
|
|
|
24,045
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||||
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||||||||
Net income
|
27,337
|
|
|
19,444
|
|
|
48,730
|
|
|
40,925
|
|
||||
|
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|
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|
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|
||||||||
Net income attributed to non-controlling interest
|
(3,322
|
)
|
|
(1,837
|
)
|
|
(5,377
|
)
|
|
(2,097
|
)
|
||||
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|
|
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|
|
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||||||||
Net income attributed to Vector Group Ltd.
|
$
|
24,015
|
|
|
$
|
17,607
|
|
|
$
|
43,353
|
|
|
$
|
38,828
|
|
|
|
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||||||||
Per basic common share:
|
|
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|
|
|
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|
||||||||
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||||||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.20
|
|
|
$
|
0.14
|
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
|
|
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||||||||
Per diluted common share:
|
|
|
|
|
|
|
|
||||||||
|
|
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||||||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.20
|
|
|
$
|
0.14
|
|
|
$
|
0.35
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share
|
$
|
0.40
|
|
|
$
|
0.38
|
|
|
$
|
0.80
|
|
|
$
|
0.76
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
||||||||||||
Net income
|
$
|
27,337
|
|
|
$
|
19,444
|
|
|
$
|
48,730
|
|
|
$
|
40,925
|
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized losses on investment securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized (losses) gains
|
(820
|
)
|
|
(4,493
|
)
|
|
(5,454
|
)
|
|
16,417
|
|
||||
Net unrealized (gains) losses reclassified into net income
|
(90
|
)
|
|
190
|
|
|
4,156
|
|
|
(12,839
|
)
|
||||
Net unrealized (losses) gains on investment securities available for sale
|
(910
|
)
|
|
(4,303
|
)
|
|
(1,298
|
)
|
|
3,578
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Net unrealized gains on long-term investments accounted for under the equity method:
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized gains
|
—
|
|
|
1,176
|
|
|
—
|
|
|
1,190
|
|
||||
Net unrealized losses reclassified into net income
|
—
|
|
|
1,624
|
|
|
—
|
|
|
1,624
|
|
||||
Net unrealized gains on long-term investments accounted for under the equity method
|
—
|
|
|
2,800
|
|
|
—
|
|
|
2,814
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net change in forward contracts
|
9
|
|
|
16
|
|
|
18
|
|
|
32
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net change in pension-related amounts
|
|
|
|
|
|
|
|
||||||||
Net loss arising during the year
|
—
|
|
|
1,607
|
|
|
—
|
|
|
1,607
|
|
||||
Amortization of loss
|
445
|
|
|
254
|
|
|
890
|
|
|
521
|
|
||||
Net change in pension-related amounts
|
445
|
|
|
1,861
|
|
|
890
|
|
|
2,128
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income
|
(456
|
)
|
|
374
|
|
|
(390
|
)
|
|
8,552
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax effect on:
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized (losses) gains on investment securities
|
337
|
|
|
1,857
|
|
|
2,245
|
|
|
(6,603
|
)
|
||||
Net unrealized losses (gains) reclassified into net income on investment securities
|
37
|
|
|
(78
|
)
|
|
(1,708
|
)
|
|
5,309
|
|
||||
Change in unrealized gains on long-term investments accounted for under the equity method
|
—
|
|
|
(478
|
)
|
|
—
|
|
|
(484
|
)
|
||||
Net unrealized losses reclassified into net income on long-term investments accounted for under the equity method
|
—
|
|
|
(672
|
)
|
|
—
|
|
|
(672
|
)
|
||||
Forward contracts
|
(4
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|
(13
|
)
|
||||
Pension-related amounts
|
(183
|
)
|
|
(769
|
)
|
|
(366
|
)
|
|
(880
|
)
|
||||
Income tax benefit (provision) on other comprehensive income
|
187
|
|
|
(147
|
)
|
|
164
|
|
|
(3,343
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income, net of tax
|
(269
|
)
|
|
227
|
|
|
(226
|
)
|
|
5,209
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
27,068
|
|
|
19,671
|
|
|
48,504
|
|
|
46,134
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income attributed to non-controlling interest
|
(3,322
|
)
|
|
(1,837
|
)
|
|
(5,377
|
)
|
|
(2,097
|
)
|
||||
Comprehensive income attributed to Vector Group Ltd.
|
$
|
23,746
|
|
|
$
|
17,834
|
|
|
$
|
43,127
|
|
|
$
|
44,037
|
|
|
Vector Group Ltd. Stockholders' Deficiency
|
|
|
|
||||||||||||||||||||||
|
|
|
Additional
|
|
|
|
Accumulated
Other
|
|
|
|
|
|||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Accumulated
|
|
Comprehensive
|
|
Non-controlling
|
|
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Income
|
|
Interest
|
|
Total
|
|||||||||||||
Balance, January 1, 2016
|
123,792,329
|
|
|
$
|
12,379
|
|
|
$
|
—
|
|
|
$
|
(210,113
|
)
|
|
$
|
(8,313
|
)
|
|
$
|
83,886
|
|
|
$
|
(122,161
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
43,353
|
|
|
—
|
|
|
5,377
|
|
|
48,730
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(226
|
)
|
|
—
|
|
|
(226
|
)
|
||||||
Total comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,504
|
|
||||||
Distributions and dividends on common stock
|
—
|
|
|
—
|
|
|
(4,833
|
)
|
|
(94,610
|
)
|
|
—
|
|
|
—
|
|
|
(99,443
|
)
|
||||||
Restricted stock grant
|
50,000
|
|
|
5
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,838
|
|
||||||
Contributions from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248
|
|
|
248
|
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,422
|
)
|
|
(7,422
|
)
|
||||||
Balance as of June 30, 2016
|
123,842,329
|
|
|
$
|
12,384
|
|
|
$
|
—
|
|
|
$
|
(261,370
|
)
|
|
$
|
(8,539
|
)
|
|
$
|
82,089
|
|
|
$
|
(175,436
|
)
|
|
Six Months Ended
|
|
Six Months Ended
|
||||
|
June 30,
2016 |
|
June 30,
2015 |
||||
Net cash provided by operating activities
|
$
|
78,825
|
|
|
$
|
83,885
|
|
Cash flows from investing activities:
|
|
|
|
||||
Sale of investment securities
|
67,033
|
|
|
118,261
|
|
||
Maturities of investment securities
|
343
|
|
|
1,737
|
|
||
Purchase of investment securities
|
(56,691
|
)
|
|
(113,595
|
)
|
||
Proceeds from sale or liquidation of long-term investments
|
1,000
|
|
|
1,254
|
|
||
Purchase of long-term investments
|
(50
|
)
|
|
(5,000
|
)
|
||
Investments in real estate ventures
|
(11,806
|
)
|
|
(34,857
|
)
|
||
Distributions from investments in real estate ventures
|
17,983
|
|
|
—
|
|
||
Increase in cash surrender value of life insurance policies
|
(393
|
)
|
|
(1,118
|
)
|
||
Decrease (increase) in restricted assets
|
2,674
|
|
|
(7,934
|
)
|
||
Issuance of notes receivable
|
—
|
|
|
(4,410
|
)
|
||
Proceeds from sale of fixed assets
|
5
|
|
|
3
|
|
||
Capital expenditures
|
(7,615
|
)
|
|
(5,379
|
)
|
||
Pay downs of investment securities
|
4,926
|
|
|
3,530
|
|
||
Proceeds from sale of preferred securities
|
—
|
|
|
1,000
|
|
||
Investments in real estate, net
|
(81
|
)
|
|
(12,502
|
)
|
||
Net cash provided by (used in) investing activities
|
17,328
|
|
|
(59,010
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of debt
|
243,282
|
|
|
22
|
|
||
Deferred financing costs
|
(6,600
|
)
|
|
(625
|
)
|
||
Repayments of debt
|
(2,917
|
)
|
|
(3,374
|
)
|
||
Borrowings under revolver
|
89,695
|
|
|
126,727
|
|
||
Repayments on revolver
|
(80,223
|
)
|
|
(144,492
|
)
|
||
Dividends and distributions on common stock
|
(97,846
|
)
|
|
(92,778
|
)
|
||
Contributions from non-controlling interest
|
248
|
|
|
—
|
|
||
Distributions to non-controlling interest
|
(7,422
|
)
|
|
—
|
|
||
Proceeds from exercise of Vector options
|
—
|
|
|
1,219
|
|
||
Tax benefit of options exercised
|
—
|
|
|
384
|
|
||
Net cash provided by (used in) financing activities
|
138,217
|
|
|
(112,917
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
234,370
|
|
|
(88,042
|
)
|
||
Cash and cash equivalents, beginning of period
|
240,368
|
|
|
326,365
|
|
||
Cash and cash equivalents, end of period
|
$
|
474,738
|
|
|
$
|
238,323
|
|
1
.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
(a)
|
Basis of Presentation
:
|
|
|
December 31, 2015
|
||||||||||
|
|
As Previously Reported
|
|
ASU Adoption
|
|
As Revised
|
||||||
|
|
|
|
|
|
|
||||||
Other assets
|
|
$
|
51,261
|
|
|
$
|
(30,141
|
)
|
|
$
|
21,120
|
|
Total assets
|
|
$
|
1,310,756
|
|
|
$
|
(30,141
|
)
|
|
$
|
1,280,615
|
|
|
|
|
|
|
|
|
||||||
Notes payable, long-term debt and other obligations, less current portion
|
|
$
|
886,249
|
|
|
$
|
(30,141
|
)
|
|
$
|
856,108
|
|
Total liabilities
|
|
1,432,917
|
|
|
(30,141
|
)
|
|
1,402,776
|
|
|||
Total stockholders' deficiency
|
|
(122,161
|
)
|
|
—
|
|
|
(122,161
|
)
|
|||
Total liabilities and stockholders' deficiency
|
|
$
|
1,310,756
|
|
|
$
|
(30,141
|
)
|
|
$
|
1,280,615
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
June 30, 2015
|
|
June 30, 2015
|
||||||||||||||||||||
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating, selling, administrative and general expenses
|
$
|
79,679
|
|
|
$
|
237
|
|
|
$
|
79,916
|
|
|
$
|
153,623
|
|
|
$
|
474
|
|
|
$
|
154,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
56,040
|
|
|
(237
|
)
|
|
55,803
|
|
|
99,995
|
|
|
(474
|
)
|
|
99,521
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in losses from investments
|
(1,657
|
)
|
|
(506
|
)
|
|
(2,163
|
)
|
|
(1,694
|
)
|
|
143
|
|
|
(1,551
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other, net
|
1,525
|
|
|
296
|
|
|
1,821
|
|
|
3,421
|
|
|
337
|
|
|
3,758
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before provision for income taxes
|
31,069
|
|
|
(447
|
)
|
|
30,622
|
|
|
64,964
|
|
|
6
|
|
|
64,970
|
|
||||||
Income tax expense
|
11,364
|
|
|
(186
|
)
|
|
11,178
|
|
|
24,043
|
|
|
2
|
|
|
24,045
|
|
||||||
Net income
|
19,705
|
|
|
(261
|
)
|
|
19,444
|
|
|
40,921
|
|
|
4
|
|
|
40,925
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributed to Vector Group Ltd.
|
17,868
|
|
|
(261
|
)
|
|
17,607
|
|
|
38,824
|
|
|
4
|
|
|
38,828
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income, net of tax
|
(2,781
|
)
|
|
3,008
|
|
|
227
|
|
|
(782
|
)
|
|
5,991
|
|
|
5,209
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income
|
16,924
|
|
|
2,747
|
|
|
19,671
|
|
|
40,139
|
|
|
5,995
|
|
|
46,134
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income attributed to Vector Group Ltd.
|
$
|
15,087
|
|
|
$
|
2,747
|
|
|
$
|
17,834
|
|
|
$
|
38,042
|
|
|
$
|
5,995
|
|
|
$
|
44,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Distributions and Dividends on Common Stock
:
|
(c)
|
Revenue Recognition
:
|
(d)
|
Earnings Per Share (“EPS”)
:
|
|
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
|
|
Income attributed to participating securities
|
(784
|
)
|
|
(521
|
)
|
|
(1,417
|
)
|
|
(1,151
|
)
|
||||
Net income available to common shares attributed to Vector Group Ltd.
|
$
|
23,231
|
|
|
$
|
17,086
|
|
|
$
|
41,936
|
|
|
$
|
37,677
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Weighted-average number of shares issuable upon
conversion of debt
|
24,895,477
|
|
|
24,895,477
|
|
|
24,895,477
|
|
|
25,334,835
|
|
||||
Weighted-average conversion price
|
$
|
19.63
|
|
|
$
|
19.63
|
|
|
$
|
19.63
|
|
|
$
|
19.48
|
|
(e)
|
Fair Value of Derivatives Embedded within Convertible Debt
:
|
(f)
|
Investment in Real Estate Ventures:
|
(g)
|
Other Income, Net
:
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interest and dividend income
|
$
|
1,452
|
|
|
$
|
1,795
|
|
|
$
|
2,776
|
|
|
$
|
3,535
|
|
Gain on long-term investment
|
—
|
|
|
24
|
|
|
—
|
|
|
224
|
|
||||
Impairment of long-term investments
|
(921
|
)
|
|
—
|
|
|
(1,203
|
)
|
|
—
|
|
||||
Other income (expense)
|
50
|
|
|
2
|
|
|
55
|
|
|
(1
|
)
|
||||
Other income, net
|
$
|
581
|
|
|
$
|
1,821
|
|
|
$
|
1,628
|
|
|
$
|
3,758
|
|
(h)
|
Other Current Liabilities
:
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Accounts payable
|
$
|
10,265
|
|
|
$
|
19,639
|
|
Accrued promotional expenses
|
22,269
|
|
|
24,816
|
|
||
Accrued excise and payroll taxes payable, net
|
16,784
|
|
|
26,556
|
|
||
Accrued interest
|
35,028
|
|
|
28,147
|
|
||
Commissions payable
|
9,885
|
|
|
11,008
|
|
||
Accrued salary and benefits
|
18,179
|
|
|
22,774
|
|
||
Other current liabilities
|
27,978
|
|
|
21,277
|
|
||
Total other current liabilities
|
$
|
140,388
|
|
|
$
|
154,217
|
|
(i)
|
Goodwill and Other Intangible Assets
:
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Goodwill
|
|
$
|
70,791
|
|
|
$
|
70,791
|
|
|
|
|
|
|
||||
Indefinite life intangibles:
|
|
|
|
|
||||
Intangible asset associated with benefit under the MSA
|
|
107,511
|
|
|
107,511
|
|
||
Trademark - Douglas Elliman
|
|
80,000
|
|
|
80,000
|
|
||
|
|
|
|
|
||||
Intangibles with a finite life, net
|
|
4,564
|
|
|
5,657
|
|
||
|
|
|
|
|
||||
Total goodwill and other intangible assets, net
|
|
$
|
262,866
|
|
|
$
|
263,959
|
|
(j)
|
Commitments
:
|
(k)
|
New Accounting Pronouncements
:
|
2
.
|
INVENTORIES
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Leaf tobacco
|
$
|
49,537
|
|
|
$
|
49,856
|
|
Other raw materials
|
3,586
|
|
|
3,578
|
|
||
Work-in-process
|
606
|
|
|
789
|
|
||
Finished goods
|
67,219
|
|
|
61,493
|
|
||
E-Cigarettes
|
67
|
|
|
80
|
|
||
Inventories at current cost
|
121,015
|
|
|
115,796
|
|
||
LIFO adjustments
|
(28,280
|
)
|
|
(29,280
|
)
|
||
|
$
|
92,735
|
|
|
$
|
86,516
|
|
3
.
|
INVESTMENT SECURITIES AVAILABLE FOR SALE
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Marketable equity securities
|
$
|
38,172
|
|
|
$
|
17,343
|
|
|
$
|
(206
|
)
|
|
$
|
55,309
|
|
Mutual funds invested in fixed income securities
|
20,307
|
|
|
211
|
|
|
—
|
|
|
20,518
|
|
||||
Marketable debt securities
|
83,865
|
|
|
1,162
|
|
|
—
|
|
|
85,027
|
|
||||
Total investment securities available for sale
|
$
|
142,344
|
|
|
$
|
18,716
|
|
|
$
|
(206
|
)
|
|
$
|
160,854
|
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Marketable equity securities
|
$
|
47,502
|
|
|
$
|
19,833
|
|
|
$
|
(62
|
)
|
|
$
|
67,273
|
|
Mutual funds invested in fixed income securities
|
20,126
|
|
|
—
|
|
|
(15
|
)
|
|
20,111
|
|
||||
Marketable debt securities
|
94,540
|
|
|
52
|
|
|
—
|
|
|
94,592
|
|
||||
Total investment securities available for sale
|
$
|
162,168
|
|
|
$
|
19,885
|
|
|
$
|
(77
|
)
|
|
$
|
181,976
|
|
Investment Type:
|
Market Value
|
|
Under 1 Year
|
|
1 Year up to 5 Years
|
|
More than 5 Years
|
||||||||
U.S. Government securities
|
$
|
27,456
|
|
|
$
|
—
|
|
|
$
|
27,456
|
|
|
$
|
—
|
|
Corporate securities
|
35,660
|
|
|
2,271
|
|
|
33,389
|
|
|
—
|
|
||||
U.S. mortgage-backed securities
|
7,343
|
|
|
—
|
|
|
49
|
|
|
7,294
|
|
||||
Commercial mortgage-backed securities
|
3,675
|
|
|
—
|
|
|
—
|
|
|
3,675
|
|
||||
U.S. asset-backed securities
|
2,115
|
|
|
—
|
|
|
2,115
|
|
|
—
|
|
||||
Commercial paper
|
7,985
|
|
|
7,985
|
|
|
—
|
|
|
—
|
|
||||
Index-linked U.S. bonds
|
793
|
|
|
—
|
|
|
793
|
|
|
—
|
|
||||
Total marketable debt securities by maturity dates
|
$
|
85,027
|
|
|
$
|
10,256
|
|
|
$
|
63,802
|
|
|
$
|
10,969
|
|
|
In loss position for
|
|
|
|
|
||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
|
|
|
||||||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
|
Total Fair Value
|
|
Total Unrealized Losses
|
||||||||||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketable equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,794
|
|
|
$
|
(206
|
)
|
|
$
|
5,794
|
|
|
$
|
(206
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,794
|
|
|
$
|
(206
|
)
|
|
$
|
5,794
|
|
|
$
|
(206
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketable equity securities
|
$
|
5,938
|
|
|
$
|
(62
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,938
|
|
|
$
|
(62
|
)
|
Mutual funds invested in fixed income securities
|
10,053
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
10,053
|
|
|
(15
|
)
|
||||||
|
$
|
15,991
|
|
|
$
|
(77
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,991
|
|
|
$
|
(77
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Gross realized gains on sales
|
$
|
206
|
|
|
$
|
520
|
|
|
$
|
955
|
|
|
$
|
14,084
|
|
Gross realized losses on sales
|
(67
|
)
|
|
(710
|
)
|
|
(249
|
)
|
|
(1,245
|
)
|
||||
Gains (losses) on sale of investment securities available for sale
|
$
|
139
|
|
|
$
|
(190
|
)
|
|
$
|
706
|
|
|
$
|
12,839
|
|
|
|
|
|
|
|
|
|
||||||||
Gross realized losses on other-than-temporary impairments
|
$
|
(49
|
)
|
|
$
|
—
|
|
|
$
|
(4,862
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
4
.
|
LONG-TERM INVESTMENTS
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Investments accounted at cost
|
$
|
39,028
|
|
|
$
|
41,231
|
|
Investments accounted for under the equity method
|
20,341
|
|
|
21,495
|
|
||
|
$
|
59,369
|
|
|
$
|
62,726
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
||||||||
|
Value
|
|
Value
|
|
Value
|
|
Value
|
||||||||
Investments partnerships
|
$
|
38,527
|
|
|
$
|
41,522
|
|
|
$
|
40,730
|
|
|
$
|
44,217
|
|
Real estate partnership
|
501
|
|
|
504
|
|
|
501
|
|
|
552
|
|
||||
|
$
|
39,028
|
|
|
$
|
42,026
|
|
|
$
|
41,231
|
|
|
$
|
44,769
|
|
|
June 30,
2016 |
|
December 31, 2015
|
||||
Indian Creek Investors LP
|
$
|
4,929
|
|
|
$
|
4,989
|
|
Boyar Value Fund
|
7,312
|
|
|
7,302
|
|
||
Ladenburg Thalmann Financial Services Inc.
|
8,100
|
|
|
9,204
|
|
||
Castle Brands, Inc.
|
—
|
|
|
—
|
|
||
|
$
|
20,341
|
|
|
$
|
21,495
|
|
5
.
|
NEW VALLEY LLC
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
10 Madison Square Park (1107 Broadway)
|
$
|
9,188
|
|
|
$
|
11,391
|
|
The Marquand (11 East 68th Street)
|
9,333
|
|
|
13,900
|
|
||
11 Beach Street
|
13,702
|
|
|
13,209
|
|
||
20 Times Square (701 Seventh Avenue)
|
16,487
|
|
|
14,985
|
|
||
111 Murray Street
|
25,308
|
|
|
25,567
|
|
||
160 Leroy Street
|
4,511
|
|
|
3,952
|
|
||
215 Chrystie Street
|
5,729
|
|
|
5,592
|
|
||
The Dutch (25-19 43rd Avenue)
|
1,129
|
|
|
1,077
|
|
||
Queens Plaza (23-10 Queens Plaza South)
|
16,834
|
|
|
16,177
|
|
||
87 Park (8701 Collins Avenue)
|
8,846
|
|
|
8,658
|
|
||
125 Greenwich Street
|
9,780
|
|
|
9,750
|
|
||
West Hollywood Edition (9040 Sunset Boulevard)
|
7,050
|
|
|
10,510
|
|
||
76 Eleventh Avenue
|
18,867
|
|
|
17,967
|
|
||
Monad Terrace
|
7,774
|
|
|
6,608
|
|
||
Takanasee
|
4,916
|
|
|
4,680
|
|
||
Condominium and Mixed Use Development
|
159,454
|
|
|
164,023
|
|
||
|
|
|
|
||||
Maryland Portfolio
|
—
|
|
|
—
|
|
||
ST Portfolio
|
9,193
|
|
|
15,754
|
|
||
Apartment Buildings
|
9,193
|
|
|
15,754
|
|
||
|
|
|
|
||||
Park Lane Hotel
|
21,138
|
|
|
19,697
|
|
||
Hotel Taiwana
|
7,786
|
|
|
7,069
|
|
||
Coral Beach and Tennis Club
|
3,162
|
|
|
3,159
|
|
||
Hotels
|
32,086
|
|
|
29,925
|
|
||
|
|
|
|
||||
The Plaza at Harmon Meadow
|
3,682
|
|
|
5,449
|
|
||
Commercial
|
3,682
|
|
|
5,449
|
|
||
|
|
|
|
||||
Other
|
1,724
|
|
|
2,017
|
|
||
|
|
|
|
||||
Investments in real estate ventures
|
$
|
206,139
|
|
|
$
|
217,168
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Escena, net
|
$
|
10,644
|
|
|
$
|
10,716
|
|
Sagaponack
|
12,684
|
|
|
12,602
|
|
||
Investments in real estate, net
|
$
|
23,328
|
|
|
$
|
23,318
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Land and land improvements
|
$
|
8,907
|
|
|
$
|
8,907
|
|
Building and building improvements
|
1,874
|
|
|
1,875
|
|
||
Other
|
2,001
|
|
|
1,923
|
|
||
|
12,782
|
|
|
12,705
|
|
||
Less accumulated depreciation
|
(2,138
|
)
|
|
(1,989
|
)
|
||
|
$
|
10,644
|
|
|
$
|
10,716
|
|
6
.
|
NOTES PAYABLE, LONG-TERM DEBT AND OTHER OBLIGATIONS
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Vector:
|
|
|
|
||||
7.75% Senior Secured Notes due 2021, including premium of $15,391 and $8,014
|
$
|
850,391
|
|
|
$
|
608,014
|
|
7.5% Variable Interest Senior Convertible Notes due 2019, net of unamortized discount of $121,788 and $132,119*
|
108,212
|
|
|
97,881
|
|
||
5.5% Variable Interest Senior Convertible Debentures due 2020, net of unamortized discount of $79,010 and $86,136*
|
179,740
|
|
|
172,614
|
|
||
Liggett:
|
|
|
|
||||
Revolving credit facility
|
12,808
|
|
|
3,213
|
|
||
Term loan under credit facility
|
3,147
|
|
|
3,269
|
|
||
Equipment loans
|
6,866
|
|
|
9,716
|
|
||
Other
|
354
|
|
|
461
|
|
||
Notes payable, long-term debt and other obligations
|
1,161,518
|
|
|
895,168
|
|
||
Less:
|
|
|
|
||||
Debt issuance costs
|
(34,172
|
)
|
|
(30,141
|
)
|
||
Total notes payable, long-term debt and other obligations
|
1,127,346
|
|
|
865,027
|
|
||
Less:
|
|
|
|
||||
Current maturities
|
(16,615
|
)
|
|
(8,919
|
)
|
||
Amount due after one year
|
$
|
1,110,731
|
|
|
$
|
856,108
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Conversion Price
|
|
Shares per $1,000
|
|
Conversion Price
|
|
Shares per $1,000
|
||||||
|
|
|
|
|
|
|
|
||||||
7.5% Variable Interest Senior Convertible Notes due 2019
|
$
|
15.98
|
|
|
62.5743
|
|
|
$
|
15.98
|
|
|
62.5743
|
|
5.5% Variable Interest Senior Convertible Debentures due 2020
|
$
|
24.64
|
|
|
40.5891
|
|
|
$
|
24.64
|
|
|
40.5891
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amortization of debt discount, net
|
$
|
8,653
|
|
|
$
|
6,213
|
|
|
$
|
16,609
|
|
|
$
|
11,840
|
|
Amortization of debt issuance costs
|
1,401
|
|
|
1,022
|
|
|
2,569
|
|
|
1,988
|
|
||||
|
$
|
10,054
|
|
|
$
|
7,235
|
|
|
$
|
19,178
|
|
|
$
|
13,828
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
||||||||
|
Value
|
|
Value
|
|
Value
|
|
Value
|
||||||||
Notes payable and long-term debt
|
$
|
1,161,518
|
|
(1)
|
$
|
1,513,012
|
|
|
$
|
895,168
|
|
(1)
|
$
|
1,297,875
|
|
|
|
|
|
|
|
|
|
7
.
|
CONTINGENCIES
|
State
|
|
Number
of Cases
|
Maryland
|
|
13
|
Florida
|
|
11
|
New York
|
|
7
|
Louisiana
|
|
3
|
West Virginia
|
|
2
|
Missouri
|
|
1
|
Ohio
|
|
1
|
Date
|
|
Case Name
|
|
County
|
|
Liggett Compensatory
Damages (as adjusted) (1) |
|
Liggett Punitive Damages
|
|
Status
(2)
|
June 2002
|
|
Lukacs v. R.J. Reynolds
|
|
Miami-Dade
|
|
$12,418
|
|
$—
|
|
Liggett satisfied the judgment and the case is concluded.
|
August 2009
|
|
Campbell v. R.J. Reynolds
|
|
Escambia
|
|
156
|
|
—
|
|
Liggett satisfied the judgment and the case is concluded.
|
March 2010
|
|
Douglas v. R.J. Reynolds
|
|
Hillsborough
|
|
1,350
|
|
—
|
|
Liggett satisfied the judgment and the case is concluded.
|
April 2010
|
|
Clay v. R.J. Reynolds
|
|
Escambia
|
|
349
|
|
1,000
|
|
Liggett satisfied the judgment and the case is concluded.
|
April 2010
|
|
Putney v. R.J. Reynolds
|
|
Broward
|
|
3,008
|
|
—
|
|
On June 12, 2013, the Fourth District Court of Appeal reversed and remanded the case for further proceedings regarding the amount of the award. Both sides sought discretionary review from the Florida Supreme Court. In February 2016, the Florida Supreme Court reinstated the jury's verdict. The defendants moved for clarification of that order, which was granted in March 2016. The court clarified that it reversed the district court's decision regarding the statute of repose only, leaving the remaining portions of the decision intact. The case will be remanded to the trial court for proceedings consistent with those portions of the district court's decision that were not reversed.
|
April 2011
|
|
Tullo v. R.J. Reynolds
|
|
Palm Beach
|
|
225
|
|
—
|
|
Liggett satisfied the judgment and other than an issue with respect to the calculation of interest on the judgment and the amount of costs owed by Liggett, the case is concluded.
|
January 2012
|
|
Ward v. R.J. Reynolds
|
|
Escambia
|
|
1
|
|
—
|
|
Liggett satisfied the merits judgment. Subsequently, the trial court entered a joint and several final judgment on attorneys' fees and costs for $981 and defendants appealed that judgment.
|
May 2012
|
|
Calloway v. R.J. Reynolds
|
|
Broward
|
|
1,530
|
|
—
|
|
A joint and several judgment for $16,100 was entered against R.J. Reynolds, Philip Morris, Lorillard and Liggett. On January 6, 2016, the Fourth District Court of Appeal reversed in part, including the $7,600 punitive damages award against Liggett, and remanded the case to the trial court for a new trial on certain issues. Both sides have moved for rehearing.
|
December 2012
|
|
Buchanan v. R.J. Reynolds
|
|
Leon
|
|
2,750
|
|
—
|
|
Liggett satisfied the judgment and the case is concluded.
|
May 2013
|
|
Cohen v. R.J. Reynolds
|
|
Palm Beach
|
|
—
|
|
—
|
|
In May 2013, the jury awarded compensatory damages in the amount of $2,055 and apportioned 10% of the fault to Liggett ($205). Defendants' motion seeking a new trial was granted by the trial court. Plaintiff appealed and defendants cross-appealed. Oral argument occurred on June 7, 2016. A decision is pending.
|
August 2013
|
|
Rizzuto v. R.J. Reynolds
|
|
Hernando
|
|
3,479
|
|
—
|
|
Liggett settled its portion of the judgment for $1,500 and the case is concluded as to Liggett.
|
August 2014
|
|
Irimi v. R.J. Reynolds
|
|
Broward
|
|
—
|
|
—
|
|
In August 2014, the jury awarded compensatory damages in the amount of $3,123 and apportioned 1% of the fault to Liggett ($31). In January 2015, the trial court granted defendants' motion for a new trial. Plaintiff appealed.
|
October 2014
|
|
Lambert v. R.J. Reynolds
|
|
Pinellas
|
|
3,600
|
|
9,500
|
|
Liggett satisfied the judgment and the case is concluded.
|
November 2014
|
|
Boatright v. R.J. Reynolds
|
|
Polk
|
|
—
|
|
300
|
|
In November 2014, the jury awarded compensatory damages in the amount of $15,000 with 15% fault apportioned to plaintiff and 85% to Philip Morris. The jury further assessed punitive damages against Philip Morris for $19,700 and Liggett for $300. Post trial motions were denied. A joint and several judgment was entered in the amount of $12,750 on the compensatory damages. Judgment was further entered against Liggett for $300 in punitive damages. Defendants appealed and plaintiff cross-appealed.
|
June 2015
|
|
Caprio v. R.J. Reynolds
|
|
Broward
|
|
—
|
|
—
|
|
In February 2015, the jury answered certain questions on the verdict form, but were deadlocked as to others. The jury returned a verdict of $559 in economic damages. The court entered a partial judgment and ordered a new trial on the remaining issues, including comparative fault and punitive damages. Defendants appealed.
|
Total Damages Awarded:
|
28,866
|
|
10,800
|
|
|
|||||
Amounts accrued, paid or compromised:
|
(24,328)
|
|
(10,500)
|
|
|
|||||
Damages remaining on Appeal:
|
$4,538
|
|
$300
|
|
|
|||||
(1) Compensatory damages are adjusted to reflect the jury's allocation of comparative fault and only include Liggett's jury allocated share, regardless of whether a judgment was joint and several. The amounts listed above do not include attorneys' fees or statutory interest.
|
||||||||||
(2) See Exhibit 99.1 for a more complete description of the cases currently on appeal.
|
•
|
all claims of the Settling States and their respective political subdivisions and other recipients of state health care funds, relating to: (i) past conduct arising out of the use, sale, distribution, manufacture, development, advertising and marketing of tobacco products; (ii) the health effects of, the exposure to, or research, statements or warnings about, tobacco products; and
|
•
|
all monetary claims of the Settling States and their respective subdivisions and other recipients of state health care funds relating to future conduct arising out of the use of, or exposure to, tobacco products that have been manufactured in the ordinary course of business.
|
|
Current Liabilities
|
|
Non-Current Liabilities
|
||||||||||||||||||||
|
Payments due under Master Settlement Agreement
|
|
Litigation Accruals
|
|
Total
|
|
Payments due under Master Settlement Agreement
|
|
Litigation Accruals
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at January 1, 2016
|
$
|
29,241
|
|
|
$
|
22,904
|
|
|
$
|
52,145
|
|
|
$
|
20,094
|
|
|
$
|
24,718
|
|
|
$
|
44,812
|
|
Expenses
|
42,637
|
|
|
2,583
|
|
|
45,220
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Change in MSA obligations capitalized as inventory
|
69
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
(12,847
|
)
|
|
(25,545
|
)
|
|
(38,392
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification to/(from) non-current liabilities
|
(2,163
|
)
|
|
3,252
|
|
|
1,089
|
|
|
2,163
|
|
|
(3,252
|
)
|
|
(1,089
|
)
|
||||||
Interest on withholding
|
35
|
|
|
320
|
|
|
355
|
|
|
—
|
|
|
1,153
|
|
|
1,153
|
|
||||||
Balance as of June 30, 2016
|
$
|
56,972
|
|
|
$
|
3,514
|
|
|
$
|
60,486
|
|
|
$
|
22,257
|
|
|
$
|
22,619
|
|
|
$
|
44,876
|
|
|
Current Liabilities
|
|
Non-Current Liabilities
|
||||||||||||||||||||
|
Payments due under Master Settlement Agreement
|
|
Litigation Accruals
|
|
Total
|
|
Payments due under Master Settlement Agreement
|
|
Litigation Accruals
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at January 1, 2015
|
$
|
26,322
|
|
|
$
|
3,149
|
|
|
$
|
29,471
|
|
|
$
|
25,809
|
|
|
$
|
25,700
|
|
|
$
|
51,509
|
|
Expenses
|
53,435
|
|
|
2,490
|
|
|
55,925
|
|
|
—
|
|
|
(195
|
)
|
|
(195
|
)
|
||||||
Change in MSA obligations capitalized as inventory
|
1,011
|
|
|
—
|
|
|
1,011
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
(18,142
|
)
|
|
(5,645
|
)
|
|
(23,787
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification from non-current liabilities
|
—
|
|
|
3,305
|
|
|
3,305
|
|
|
—
|
|
|
(3,305
|
)
|
|
(3,305
|
)
|
||||||
Interest on withholding
|
—
|
|
|
178
|
|
|
178
|
|
|
—
|
|
|
1,244
|
|
|
1,244
|
|
||||||
Balance as of June 30, 2015
|
$
|
62,626
|
|
|
$
|
3,477
|
|
|
$
|
66,103
|
|
|
$
|
25,809
|
|
|
$
|
23,444
|
|
|
$
|
49,253
|
|
8
.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Service cost — benefits earned during the period
|
$
|
137
|
|
|
$
|
133
|
|
|
$
|
274
|
|
|
$
|
265
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
4
|
|
Interest cost on projected benefit obligation
|
1,355
|
|
|
1,280
|
|
|
2,710
|
|
|
2,598
|
|
|
97
|
|
|
93
|
|
|
194
|
|
|
185
|
|
||||||||
Expected return on assets
|
(1,519
|
)
|
|
(1,888
|
)
|
|
(3,038
|
)
|
|
(3,813
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlement loss
|
—
|
|
|
1,607
|
|
|
—
|
|
|
1,607
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Amortization of net loss (gain)
|
464
|
|
|
278
|
|
|
928
|
|
|
569
|
|
|
(19
|
)
|
|
(24
|
)
|
|
(38
|
)
|
|
(48
|
)
|
||||||||
Net expense
|
$
|
437
|
|
|
$
|
1,410
|
|
|
$
|
874
|
|
|
$
|
1,226
|
|
|
$
|
79
|
|
|
$
|
71
|
|
|
$
|
158
|
|
|
$
|
141
|
|
9
.
|
RESTRUCTURING
|
|
|
Employee Severance and Benefits
|
|
Contract Termination/Exit Costs
|
|
Other
|
|
Total
|
||||||||
Accrual balance as of January 1, 2016
|
|
$
|
422
|
|
|
$
|
48
|
|
|
$
|
20
|
|
|
$
|
490
|
|
Restructuring charges
|
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
||||
Utilized
|
|
(315
|
)
|
|
(89
|
)
|
|
(20
|
)
|
|
(424
|
)
|
||||
Accrual balance as of June 30, 2016
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107
|
|
|
|
|
|
|
|
|
|
|
10
.
|
INCOME TAXES
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income before provision for income taxes
|
$
|
46,340
|
|
|
$
|
30,622
|
|
|
$
|
82,096
|
|
|
$
|
64,970
|
|
Income tax expense using estimated annual effective income tax rate
|
18,793
|
|
|
11,347
|
|
|
33,317
|
|
|
24,145
|
|
||||
Changes in effective tax rates
|
210
|
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
||||
Impact of discrete items, net
|
—
|
|
|
(91
|
)
|
|
49
|
|
|
(100
|
)
|
||||
Income tax expense
|
$
|
19,003
|
|
|
$
|
11,178
|
|
|
$
|
33,366
|
|
|
$
|
24,045
|
|
11
.
|
INVESTMENTS AND FAIR VALUE MEASUREMENTS
|
|
|
Fair Value Measurements as of June 30, 2016
|
|
|
||||||||||||||||
Description
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs (Level 2) |
|
Significant Unobservable Inputs (Level 3) |
|
Total Gains (Losses)
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
|
$
|
336,845
|
|
|
$
|
336,845
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial paper
|
|
42,044
|
|
|
—
|
|
|
42,044
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certificates of deposit
|
|
2,976
|
|
|
—
|
|
|
2,976
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bonds
|
|
10,767
|
|
|
10,767
|
|
|
—
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
|
55,309
|
|
|
55,309
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Mutual funds invested in fixed income securities
|
|
20,518
|
|
|
20,518
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
|
27,456
|
|
|
—
|
|
|
27,456
|
|
|
—
|
|
|
|
||||||
Corporate securities
|
|
35,660
|
|
|
—
|
|
|
35,660
|
|
|
—
|
|
|
|
||||||
U.S. government and federal agency
|
|
7,343
|
|
|
—
|
|
|
7,343
|
|
|
—
|
|
|
|
||||||
Commercial mortgage-backed securities
|
|
3,675
|
|
|
—
|
|
|
3,675
|
|
|
—
|
|
|
|
||||||
U.S. asset-backed securities
|
|
2,115
|
|
|
—
|
|
|
2,115
|
|
|
—
|
|
|
|
||||||
Commercial paper
|
|
7,985
|
|
|
—
|
|
|
7,985
|
|
|
—
|
|
|
|
||||||
Index-linked U.S. bonds
|
|
793
|
|
|
—
|
|
|
793
|
|
|
—
|
|
|
|
||||||
Total fixed income securities
|
|
85,027
|
|
|
—
|
|
|
85,027
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investment securities available for sale
|
|
160,854
|
|
|
75,827
|
|
|
85,027
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
553,486
|
|
|
$
|
423,439
|
|
|
$
|
130,047
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
126,932
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
126,932
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term investments (1)
|
|
$
|
6,396
|
|
|
|
|
|
|
$
|
6,396
|
|
|
$
|
(1,203
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Long-term investments with a carrying amount of
$7,599
were written down to their fair value of
$6,396
, resulting in an impairment charge of
$1,203
, which was included in earnings.
|
|
|
Fair Value Measurements as of December 31, 2015
|
|
|
||||||||||||||||
Description
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs (Level 2) |
|
Significant Unobservable Inputs (Level 3) |
|
Total Gains (Losses)
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
|
$
|
93,915
|
|
|
$
|
93,915
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certificates of deposit
|
|
3,469
|
|
|
—
|
|
|
3,469
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bonds
|
|
12,767
|
|
|
12,767
|
|
|
—
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
|
67,273
|
|
|
67,273
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Mutual funds invested in fixed income securities
|
|
20,111
|
|
|
20,111
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
|
28,132
|
|
|
—
|
|
|
28,132
|
|
|
—
|
|
|
|
||||||
Corporate securities
|
|
41,561
|
|
|
—
|
|
|
41,561
|
|
|
—
|
|
|
|
||||||
U.S. government and federal agency
|
|
5,790
|
|
|
—
|
|
|
5,790
|
|
|
—
|
|
|
|
||||||
Commercial mortgage-backed securities
|
|
8,728
|
|
|
—
|
|
|
8,728
|
|
|
—
|
|
|
|
||||||
U.S. asset-backed securities
|
|
8,276
|
|
|
—
|
|
|
8,276
|
|
|
—
|
|
|
|
||||||
Index-linked U.S. bonds
|
|
2,105
|
|
|
—
|
|
|
2,105
|
|
|
—
|
|
|
|
||||||
Total fixed income securities
|
|
94,592
|
|
|
—
|
|
|
94,592
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investment securities available for sale
|
|
181,976
|
|
|
87,384
|
|
|
94,592
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
292,127
|
|
|
$
|
194,066
|
|
|
$
|
98,061
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
144,042
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
144,042
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term investments (1)
|
|
$
|
11,189
|
|
|
|
|
|
|
$
|
11,189
|
|
|
$
|
(811
|
)
|
||||
Investments in real estate, net (2)
|
|
3,780
|
|
|
|
|
|
|
3,780
|
|
|
(230
|
)
|
|||||||
|
|
$
|
14,969
|
|
|
|
|
|
|
$
|
14,969
|
|
|
$
|
(1,041
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Long-term investments with a carrying amount of
$12,000
were written down to their fair value of
$11,189
, resulting in an impairment charge of
$811
, which was included in earnings.
|
(2)
|
Investment in real estate, net with a carrying value of
$4,010
was written down to its fair value of
$3,780
, resulting in an impairment charge of
$230
, which was included in earnings.
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||
|
|
Fair Value at
|
|
|
|
|
|
|
||||
|
|
June 30,
2016 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Actual)
|
||||
|
|
|
|
|
|
|
|
|
||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
126,932
|
|
|
Discounted cash flow
|
|
Assumed annual stock dividend
|
|
5
|
%
|
|
|
|
|
|
|
|
Assumed annual cash dividend
|
|
$
|
1.60
|
|
||
|
|
|
|
|
|
Stock price
|
|
$
|
22.42
|
|
||
|
|
|
|
|
|
Convertible trading price (as a percentage of par value)
|
|
110.88
|
%
|
|||
|
|
|
|
|
|
Volatility
|
|
19.33
|
%
|
|||
|
|
|
|
|
|
Risk-free rate
|
|
Term structure of US Treasury Securities
|
||||
|
|
|
|
|
|
Implied credit spread
|
|
6.0% - 7.0% (6.5%)
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||
|
|
Fair Value at
|
|
|
|
|
|
|
||||
|
|
December 31,
2015 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Actual)
|
||||
|
|
|
|
|
|
|
|
|
||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
144,042
|
|
|
Discounted cash flow
|
|
Assumed annual stock dividend
|
|
5
|
%
|
|
|
|
|
|
|
|
Assumed annual cash dividend
|
|
$
|
1.60
|
|
||
|
|
|
|
|
|
Stock price
|
|
$
|
23.59
|
|
||
|
|
|
|
|
|
Convertible trading price (as a percentage of par value)
|
|
114.31
|
%
|
|||
|
|
|
|
|
|
Volatility
|
|
18.30
|
%
|
|||
|
|
|
|
|
|
Risk-free rate
|
|
Term structure of US Treasury Securities
|
||||
|
|
|
|
|
|
Implied credit spread
|
|
5.0% - 5.5% (5.25%)
|
|
12
.
|
SEGMENT INFORMATION
|
|
|
|
|
|
Real
|
|
Corporate
|
|
|
||||||||||
|
Tobacco
|
|
E-Cigarettes
|
|
Estate
|
|
and Other
|
|
Total
|
||||||||||
Three months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
255,498
|
|
|
$
|
10
|
|
|
$
|
182,765
|
|
|
$
|
—
|
|
|
$
|
438,273
|
|
Operating income (loss)
|
66,016
|
|
|
(91
|
)
|
|
11,706
|
|
|
(6,911
|
)
|
|
70,720
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
2,813
|
|
|
—
|
|
|
2,813
|
|
|||||
Depreciation and amortization
|
2,499
|
|
|
—
|
|
|
2,943
|
|
|
428
|
|
|
5,870
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
254,890
|
|
|
$
|
261
|
|
|
$
|
161,022
|
|
|
$
|
—
|
|
|
$
|
416,173
|
|
Operating income (loss)
|
56,215
|
|
(1)
|
(2,400
|
)
|
|
6,892
|
|
|
(4,904
|
)
|
|
55,803
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
1,856
|
|
|
—
|
|
|
1,856
|
|
|||||
Depreciation and amortization
|
2,931
|
|
|
—
|
|
|
3,076
|
|
|
435
|
|
|
6,442
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Six months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
476,513
|
|
|
$
|
48
|
|
|
$
|
342,512
|
|
|
$
|
—
|
|
|
$
|
819,073
|
|
Operating income (loss)
|
127,499
|
|
(2)
|
(284
|
)
|
|
19,380
|
|
|
(13,716
|
)
|
|
132,879
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
2,306
|
|
|
—
|
|
|
2,306
|
|
|||||
Depreciation and amortization
|
4,939
|
|
|
—
|
|
|
5,225
|
|
|
870
|
|
|
11,034
|
|
|||||
Capital expenditures
|
3,716
|
|
|
—
|
|
|
3,873
|
|
|
26
|
|
|
7,615
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Six months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
482,975
|
|
|
$
|
680
|
|
|
$
|
293,278
|
|
|
$
|
—
|
|
|
$
|
776,933
|
|
Operating income (loss)
|
105,885
|
|
(3)
|
(5,564
|
)
|
|
9,043
|
|
|
(9,843
|
)
|
|
99,521
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
2,194
|
|
|
—
|
|
|
2,194
|
|
|||||
Depreciation and amortization
|
5,867
|
|
|
—
|
|
|
5,984
|
|
|
872
|
|
|
12,723
|
|
|||||
Capital expenditures
|
2,350
|
|
|
—
|
|
|
3,029
|
|
|
—
|
|
|
5,379
|
|
|||||
|
|
|
|
|
|
|
|
|
|
(1)
|
Operating income includes
$1,250
of litigation settlement expense and
$1,607
of pension settlement expense.
|
(2)
|
Operating income includes
$2,350
of litigation settlement expense, and
$41
of restructuring expense.
|
(3)
|
Operating income includes
$2,093
of litigation settlement expense and
$1,607
of pension settlement expense.
|
|
|
|
June 30, 2016
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
335,034
|
|
|
$
|
32,246
|
|
|
$
|
107,458
|
|
|
$
|
—
|
|
|
$
|
474,738
|
|
Investment securities available for sale
|
120,283
|
|
|
40,571
|
|
|
—
|
|
|
—
|
|
|
160,854
|
|
|||||
Accounts receivable - trade, net
|
—
|
|
|
15,015
|
|
|
10,061
|
|
|
—
|
|
|
25,076
|
|
|||||
Intercompany receivables
|
16,435
|
|
|
—
|
|
|
—
|
|
|
(16,435
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
92,735
|
|
|
—
|
|
|
—
|
|
|
92,735
|
|
|||||
Income taxes receivable, net
|
12,342
|
|
|
—
|
|
|
—
|
|
|
(12,124
|
)
|
|
218
|
|
|||||
Restricted assets
|
—
|
|
|
8,523
|
|
|
914
|
|
|
—
|
|
|
9,437
|
|
|||||
Other current assets
|
618
|
|
|
3,794
|
|
|
35,751
|
|
|
—
|
|
|
40,163
|
|
|||||
Total current assets
|
484,712
|
|
|
192,884
|
|
|
154,184
|
|
|
(28,559
|
)
|
|
803,221
|
|
|||||
Property, plant and equipment, net
|
1,452
|
|
|
51,122
|
|
|
19,330
|
|
|
—
|
|
|
71,904
|
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
23,328
|
|
|
—
|
|
|
23,328
|
|
|||||
Long-term investments
|
58,414
|
|
|
454
|
|
|
501
|
|
|
—
|
|
|
59,369
|
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
206,139
|
|
|
—
|
|
|
206,139
|
|
|||||
Investments in consolidated subsidiaries
|
517,365
|
|
|
—
|
|
|
—
|
|
|
(517,365
|
)
|
|
—
|
|
|||||
Restricted assets
|
1,720
|
|
|
7,666
|
|
|
—
|
|
|
—
|
|
|
9,386
|
|
|||||
Goodwill and other intangible assets, net
|
—
|
|
|
107,511
|
|
|
155,355
|
|
|
—
|
|
|
262,866
|
|
|||||
Prepaid pension costs
|
—
|
|
|
21,302
|
|
|
—
|
|
|
—
|
|
|
21,302
|
|
|||||
Other assets
|
7,621
|
|
|
12,002
|
|
|
2,362
|
|
|
—
|
|
|
21,985
|
|
|||||
Total assets
|
$
|
1,071,284
|
|
|
$
|
392,941
|
|
|
$
|
561,199
|
|
|
$
|
(545,924
|
)
|
|
$
|
1,479,500
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of notes payable and long-term debt
|
$
|
—
|
|
|
$
|
16,523
|
|
|
$
|
92
|
|
|
$
|
—
|
|
|
$
|
16,615
|
|
Current portion of employee benefits
|
—
|
|
|
914
|
|
|
—
|
|
|
—
|
|
|
914
|
|
|||||
Intercompany payables
|
—
|
|
|
585
|
|
|
15,850
|
|
|
(16,435
|
)
|
|
—
|
|
|||||
Income taxes payable, net
|
—
|
|
|
11,501
|
|
|
623
|
|
|
(12,124
|
)
|
|
—
|
|
|||||
Litigation accruals and current payments due under the Master Settlement Agreement
|
—
|
|
|
60,486
|
|
|
—
|
|
|
—
|
|
|
60,486
|
|
|||||
Other current liabilities
|
44,520
|
|
|
55,350
|
|
|
40,518
|
|
|
—
|
|
|
140,388
|
|
|||||
Total current liabilities
|
44,520
|
|
|
145,359
|
|
|
57,083
|
|
|
(28,559
|
)
|
|
218,403
|
|
|||||
Notes payable, long-term debt and other obligations, less current portion
|
1,104,171
|
|
|
6,338
|
|
|
222
|
|
|
—
|
|
|
1,110,731
|
|
|||||
Fair value of derivatives embedded within convertible debt
|
126,932
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126,932
|
|
|||||
Non-current employee benefits
|
40,075
|
|
|
15,233
|
|
|
—
|
|
|
—
|
|
|
55,308
|
|
|||||
Deferred income taxes, net
|
7,826
|
|
|
35,138
|
|
|
44,950
|
|
|
—
|
|
|
87,914
|
|
|||||
Other liabilities, primarily litigation accruals and payments due under the Master Settlement Agreement
|
5,285
|
|
|
45,010
|
|
|
5,353
|
|
|
—
|
|
|
55,648
|
|
|||||
Total liabilities
|
1,328,809
|
|
|
247,078
|
|
|
107,608
|
|
|
(28,559
|
)
|
|
1,654,936
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' (deficiency) equity attributed to Vector Group Ltd.
|
(257,525
|
)
|
|
145,863
|
|
|
371,502
|
|
|
(517,365
|
)
|
|
(257,525
|
)
|
|||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
82,089
|
|
|
—
|
|
|
82,089
|
|
|||||
Total stockholders' (deficiency) equity
|
(257,525
|
)
|
|
145,863
|
|
|
453,591
|
|
|
(517,365
|
)
|
|
(175,436
|
)
|
|||||
Total liabilities and stockholders' deficiency
|
$
|
1,071,284
|
|
|
$
|
392,941
|
|
|
$
|
561,199
|
|
|
$
|
(545,924
|
)
|
|
$
|
1,479,500
|
|
|
|
|
December 31, 2015
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
111,470
|
|
|
$
|
12,375
|
|
|
$
|
116,523
|
|
|
$
|
—
|
|
|
$
|
240,368
|
|
Investment securities available for sale
|
131,810
|
|
|
50,166
|
|
|
—
|
|
|
—
|
|
|
181,976
|
|
|||||
Accounts receivable - trade, net
|
—
|
|
|
15,913
|
|
|
7,976
|
|
|
—
|
|
|
23,889
|
|
|||||
Intercompany receivables
|
11,293
|
|
|
—
|
|
|
—
|
|
|
(11,293
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
86,516
|
|
|
—
|
|
|
—
|
|
|
86,516
|
|
|||||
Income taxes receivable, net
|
8,213
|
|
|
—
|
|
|
—
|
|
|
(5,372
|
)
|
|
2,841
|
|
|||||
Restricted assets
|
—
|
|
|
7,781
|
|
|
1,414
|
|
|
—
|
|
|
9,195
|
|
|||||
Other current assets
|
575
|
|
|
3,747
|
|
|
34,632
|
|
|
—
|
|
|
38,954
|
|
|||||
Total current assets
|
263,361
|
|
|
176,498
|
|
|
160,545
|
|
|
(16,665
|
)
|
|
583,739
|
|
|||||
Property, plant and equipment, net
|
1,711
|
|
|
54,097
|
|
|
19,824
|
|
|
—
|
|
|
75,632
|
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
23,318
|
|
|
—
|
|
|
23,318
|
|
|||||
Long-term investments
|
61,747
|
|
|
478
|
|
|
501
|
|
|
—
|
|
|
62,726
|
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
217,168
|
|
|
—
|
|
|
217,168
|
|
|||||
Investments in consolidated subsidiaries
|
532,501
|
|
|
—
|
|
|
—
|
|
|
(532,501
|
)
|
|
—
|
|
|||||
Restricted assets
|
1,713
|
|
|
10,590
|
|
|
—
|
|
|
—
|
|
|
12,303
|
|
|||||
Goodwill and other intangible assets, net
|
—
|
|
|
107,511
|
|
|
156,448
|
|
|
—
|
|
|
263,959
|
|
|||||
Prepaid pension costs
|
—
|
|
|
20,650
|
|
|
—
|
|
|
—
|
|
|
20,650
|
|
|||||
Other assets
|
7,582
|
|
|
11,769
|
|
|
1,769
|
|
|
—
|
|
|
21,120
|
|
|||||
Total assets
|
$
|
868,615
|
|
|
$
|
381,593
|
|
|
$
|
579,573
|
|
|
$
|
(549,166
|
)
|
|
$
|
1,280,615
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of notes payable and long-term debt
|
$
|
—
|
|
|
$
|
8,733
|
|
|
$
|
186
|
|
|
$
|
—
|
|
|
$
|
8,919
|
|
Current portion of employee benefits
|
—
|
|
|
915
|
|
|
—
|
|
|
—
|
|
|
915
|
|
|||||
Intercompany payables
|
—
|
|
|
586
|
|
|
10,707
|
|
|
(11,293
|
)
|
|
—
|
|
|||||
Income taxes payable, net
|
—
|
|
|
5,464
|
|
|
4
|
|
|
(5,372
|
)
|
|
96
|
|
|||||
Litigation accruals and current payments due under the Master Settlement Agreement
|
—
|
|
|
52,145
|
|
|
—
|
|
|
—
|
|
|
52,145
|
|
|||||
Other current liabilities
|
38,140
|
|
|
74,083
|
|
|
41,994
|
|
|
—
|
|
|
154,217
|
|
|||||
Total current liabilities
|
38,140
|
|
|
141,926
|
|
|
52,891
|
|
|
(16,665
|
)
|
|
216,292
|
|
|||||
Notes payable, long-term debt and other obligations, less current portion
|
848,368
|
|
|
7,519
|
|
|
221
|
|
|
—
|
|
|
856,108
|
|
|||||
Fair value of derivatives embedded within convertible debt
|
144,042
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,042
|
|
|||||
Non-current employee benefits
|
39,244
|
|
|
15,811
|
|
|
—
|
|
|
—
|
|
|
55,055
|
|
|||||
Deferred income taxes, net
|
2,675
|
|
|
33,791
|
|
|
42,963
|
|
|
—
|
|
|
79,429
|
|
|||||
Other liabilities, primarily litigation accruals and payments due under the Master Settlement Agreement
|
2,193
|
|
|
44,982
|
|
|
4,675
|
|
|
—
|
|
|
51,850
|
|
|||||
Total liabilities
|
1,074,662
|
|
|
244,029
|
|
|
100,750
|
|
|
(16,665
|
)
|
|
1,402,776
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' (deficiency) equity attributed to Vector Group Ltd.
|
(206,047
|
)
|
|
137,564
|
|
|
394,937
|
|
|
(532,501
|
)
|
|
(206,047
|
)
|
|||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
83,886
|
|
|
—
|
|
|
83,886
|
|
|||||
Total stockholders' (deficiency) equity
|
(206,047
|
)
|
|
137,564
|
|
|
478,823
|
|
|
(532,501
|
)
|
|
(122,161
|
)
|
|||||
Total liabilities and stockholders' deficiency
|
$
|
868,615
|
|
|
$
|
381,593
|
|
|
$
|
579,573
|
|
|
$
|
(549,166
|
)
|
|
$
|
1,280,615
|
|
|
|
|
Three Months Ended June 30, 2016
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
255,648
|
|
|
$
|
182,765
|
|
|
$
|
(140
|
)
|
|
$
|
438,273
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
168,614
|
|
|
115,017
|
|
|
—
|
|
|
283,631
|
|
|||||
Operating, selling, administrative and general expenses
|
9,019
|
|
|
18,943
|
|
|
56,100
|
|
|
(140
|
)
|
|
83,922
|
|
|||||
Management fee expense
|
—
|
|
|
2,663
|
|
|
—
|
|
|
(2,663
|
)
|
|
—
|
|
|||||
Operating (loss) income
|
(9,019
|
)
|
|
65,428
|
|
|
11,648
|
|
|
2,663
|
|
|
70,720
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(35,522
|
)
|
|
(843
|
)
|
|
(4
|
)
|
|
—
|
|
|
(36,369
|
)
|
|||||
Change in fair value of derivatives embedded within convertible debt
|
7,416
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,416
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
2,813
|
|
|
—
|
|
|
2,813
|
|
|||||
Equity in earnings (loss) from investments
|
1,097
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
1,089
|
|
|||||
Gain on sale of investment securities available for sale
|
139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|||||
Impairment of investment securities available for sale
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|||||
Equity in earnings in consolidated subsidiaries
|
46,441
|
|
|
—
|
|
|
—
|
|
|
(46,441
|
)
|
|
—
|
|
|||||
Management fee income
|
2,663
|
|
|
—
|
|
|
—
|
|
|
(2,663
|
)
|
|
—
|
|
|||||
Other, net
|
(93
|
)
|
|
244
|
|
|
430
|
|
|
—
|
|
|
581
|
|
|||||
Income before provision for income taxes
|
13,073
|
|
|
64,821
|
|
|
14,887
|
|
|
(46,441
|
)
|
|
46,340
|
|
|||||
Income tax benefit (expense)
|
10,942
|
|
|
(24,907
|
)
|
|
(5,038
|
)
|
|
—
|
|
|
(19,003
|
)
|
|||||
Net income
|
24,015
|
|
|
39,914
|
|
|
9,849
|
|
|
(46,441
|
)
|
|
27,337
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(3,322
|
)
|
|
—
|
|
|
(3,322
|
)
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
24,015
|
|
|
$
|
39,914
|
|
|
$
|
6,527
|
|
|
$
|
(46,441
|
)
|
|
$
|
24,015
|
|
Comprehensive income attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,322
|
)
|
|
$
|
—
|
|
|
$
|
(3,322
|
)
|
Comprehensive income attributed to Vector Group Ltd.
|
$
|
23,746
|
|
|
$
|
39,793
|
|
|
$
|
6,527
|
|
|
$
|
(46,320
|
)
|
|
$
|
23,746
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
255,291
|
|
|
$
|
161,022
|
|
|
$
|
(140
|
)
|
|
$
|
416,173
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
175,334
|
|
|
103,870
|
|
|
—
|
|
|
279,204
|
|
|||||
Operating, selling, administrative and general expenses
|
7,174
|
|
|
22,555
|
|
|
50,327
|
|
|
(140
|
)
|
|
79,916
|
|
|||||
Litigation settlement and judgment expense
|
—
|
|
|
1,250
|
|
|
—
|
|
|
—
|
|
|
1,250
|
|
|||||
Management fee expense
|
—
|
|
|
2,563
|
|
|
—
|
|
|
(2,563
|
)
|
|
—
|
|
|||||
Operating (loss) income
|
(7,174
|
)
|
|
53,589
|
|
|
6,825
|
|
|
2,563
|
|
|
55,803
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(30,880
|
)
|
|
(879
|
)
|
|
(2
|
)
|
|
—
|
|
|
(31,761
|
)
|
|||||
Change in fair value of derivatives embedded within convertible debt
|
5,256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,256
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
1,856
|
|
|
—
|
|
|
1,856
|
|
|||||
Equity in loss from investments
|
(2,147
|
)
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(2,163
|
)
|
|||||
Loss on sale of investment securities available for sale
|
(190
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(190
|
)
|
|||||
Equity in earnings in consolidated subsidiaries
|
35,745
|
|
|
—
|
|
|
—
|
|
|
(35,745
|
)
|
|
—
|
|
|||||
Management fee income
|
2,563
|
|
|
—
|
|
|
—
|
|
|
(2,563
|
)
|
|
—
|
|
|||||
Other, net
|
1,192
|
|
|
200
|
|
|
429
|
|
|
—
|
|
|
1,821
|
|
|||||
Income before provision for income taxes
|
4,365
|
|
|
52,894
|
|
|
9,108
|
|
|
(35,745
|
)
|
|
30,622
|
|
|||||
Income tax benefit (expense)
|
13,242
|
|
|
(21,219
|
)
|
|
(3,201
|
)
|
|
—
|
|
|
(11,178
|
)
|
|||||
Net income
|
17,607
|
|
|
31,675
|
|
|
5,907
|
|
|
(35,745
|
)
|
|
19,444
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(1,837
|
)
|
|
—
|
|
|
(1,837
|
)
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
17,607
|
|
|
$
|
31,675
|
|
|
$
|
4,070
|
|
|
$
|
(35,745
|
)
|
|
$
|
17,607
|
|
Comprehensive income attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,837
|
)
|
|
$
|
—
|
|
|
$
|
(1,837
|
)
|
Comprehensive income attributed to Vector Group Ltd.
|
$
|
17,834
|
|
|
$
|
31,131
|
|
|
$
|
4,070
|
|
|
$
|
(35,201
|
)
|
|
$
|
17,834
|
|
|
|
|
Six Months Ended June 30, 2016
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
476,790
|
|
|
$
|
342,512
|
|
|
$
|
(229
|
)
|
|
$
|
819,073
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
305,358
|
|
|
214,695
|
|
|
—
|
|
|
520,053
|
|
|||||
Operating, selling, administrative and general expenses
|
18,215
|
|
|
37,216
|
|
|
108,548
|
|
|
(229
|
)
|
|
163,750
|
|
|||||
Litigation settlement and judgment expense
|
—
|
|
|
2,350
|
|
|
—
|
|
|
—
|
|
|
2,350
|
|
|||||
Management fee expense
|
—
|
|
|
5,325
|
|
|
—
|
|
|
(5,325
|
)
|
|
—
|
|
|||||
Restructuring charges
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|||||
Operating (loss) income
|
(18,215
|
)
|
|
126,500
|
|
|
19,269
|
|
|
5,325
|
|
|
132,879
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(65,280
|
)
|
|
(1,802
|
)
|
|
(7
|
)
|
|
—
|
|
|
(67,089
|
)
|
|||||
Change in fair value of derivatives embedded within convertible debt
|
17,110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,110
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
2,306
|
|
|
—
|
|
|
2,306
|
|
|||||
Equity in losses from investments
|
(558
|
)
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(582
|
)
|
|||||
Gain on sale of investment securities available for sale
|
315
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
706
|
|
|||||
Impairment of investment securities available for sale
|
(90
|
)
|
|
(4,772
|
)
|
|
—
|
|
|
—
|
|
|
(4,862
|
)
|
|||||
Equity in earnings in consolidated subsidiaries
|
82,051
|
|
|
—
|
|
|
—
|
|
|
(82,051
|
)
|
|
—
|
|
|||||
Management fee income
|
5,325
|
|
|
—
|
|
|
—
|
|
|
(5,325
|
)
|
|
—
|
|
|||||
Other, net
|
307
|
|
|
481
|
|
|
840
|
|
|
—
|
|
|
1,628
|
|
|||||
Income before provision for income taxes
|
20,965
|
|
|
120,774
|
|
|
22,408
|
|
|
(82,051
|
)
|
|
82,096
|
|
|||||
Income tax benefit (expense)
|
22,388
|
|
|
(48,293
|
)
|
|
(7,461
|
)
|
|
—
|
|
|
(33,366
|
)
|
|||||
Net income
|
43,353
|
|
|
72,481
|
|
|
14,947
|
|
|
(82,051
|
)
|
|
48,730
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(5,377
|
)
|
|
—
|
|
|
(5,377
|
)
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
43,353
|
|
|
$
|
72,481
|
|
|
$
|
9,570
|
|
|
$
|
(82,051
|
)
|
|
$
|
43,353
|
|
Comprehensive income attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,377
|
)
|
|
$
|
—
|
|
|
$
|
(5,377
|
)
|
Comprehensive income attributed to Vector Group Ltd.
|
$
|
43,127
|
|
|
$
|
72,503
|
|
|
$
|
9,570
|
|
|
$
|
(82,073
|
)
|
|
$
|
43,127
|
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
||||||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
483,914
|
|
|
$
|
293,278
|
|
|
$
|
(259
|
)
|
|
$
|
776,933
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
332,994
|
|
|
188,228
|
|
|
—
|
|
|
521,222
|
|
|||||
Operating, selling, administrative and general expenses
|
14,368
|
|
|
43,892
|
|
|
96,096
|
|
|
(259
|
)
|
|
154,097
|
|
|||||
Litigation settlement and judgment expense
|
—
|
|
|
2,093
|
|
|
—
|
|
|
—
|
|
|
2,093
|
|
|||||
Management fee expense
|
—
|
|
|
5,125
|
|
|
—
|
|
|
(5,125
|
)
|
|
—
|
|
|||||
Operating (loss) income
|
(14,368
|
)
|
|
99,810
|
|
|
8,954
|
|
|
5,125
|
|
|
99,521
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(61,634
|
)
|
|
(1,870
|
)
|
|
(3
|
)
|
|
—
|
|
|
(63,507
|
)
|
|||||
Change in fair value of derivatives embedded within convertible debt
|
11,716
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,716
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
2,194
|
|
|
—
|
|
|
2,194
|
|
|||||
(Loss) gain on sale of investment securities available for sale
|
(336
|
)
|
|
13,175
|
|
|
—
|
|
|
—
|
|
|
12,839
|
|
|||||
Equity in losses from investments
|
(1,543
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(1,551
|
)
|
|||||
Equity in earnings in consolidated subsidiaries
|
71,744
|
|
|
—
|
|
|
—
|
|
|
(71,744
|
)
|
|
—
|
|
|||||
Management fee income
|
5,125
|
|
|
—
|
|
|
—
|
|
|
(5,125
|
)
|
|
—
|
|
|||||
Other, net
|
2,257
|
|
|
520
|
|
|
981
|
|
|
—
|
|
|
3,758
|
|
|||||
Income before provision for income taxes
|
12,961
|
|
|
111,627
|
|
|
12,126
|
|
|
(71,744
|
)
|
|
64,970
|
|
|||||
Income tax benefit (expense)
|
25,867
|
|
|
(45,403
|
)
|
|
(4,509
|
)
|
|
—
|
|
|
(24,045
|
)
|
|||||
Net income
|
38,828
|
|
|
66,224
|
|
|
7,617
|
|
|
(71,744
|
)
|
|
40,925
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(2,097
|
)
|
|
—
|
|
|
(2,097
|
)
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
38,828
|
|
|
$
|
66,224
|
|
|
$
|
5,520
|
|
|
$
|
(71,744
|
)
|
|
$
|
38,828
|
|
Comprehensive income attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,097
|
)
|
|
$
|
—
|
|
|
$
|
(2,097
|
)
|
Comprehensive income attributed to Vector Group Ltd.
|
$
|
44,037
|
|
|
$
|
63,398
|
|
|
$
|
5,520
|
|
|
$
|
(68,918
|
)
|
|
$
|
44,037
|
|
|
|
|
Six Months Ended June 30, 2016
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Net cash provided by operating activities
|
$
|
73,915
|
|
|
$
|
75,513
|
|
|
$
|
28,437
|
|
|
$
|
(99,040
|
)
|
|
$
|
78,825
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sale of investment securities
|
62,312
|
|
|
4,721
|
|
|
—
|
|
|
—
|
|
|
67,033
|
|
|||||
Maturities of investment securities
|
343
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
343
|
|
|||||
Purchase of investment securities
|
(56,691
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,691
|
)
|
|||||
Proceeds from sale or liquidation of long-term investments
|
1,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|||||
Purchase of long-term investments
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
(11,806
|
)
|
|
—
|
|
|
(11,806
|
)
|
|||||
Distributions from investments in real estate ventures
|
—
|
|
|
—
|
|
|
17,983
|
|
|
—
|
|
|
17,983
|
|
|||||
Increase in cash surrender value of life insurance policies
|
—
|
|
|
(393
|
)
|
|
—
|
|
|
—
|
|
|
(393
|
)
|
|||||
(Increase) decrease in restricted assets
|
(7
|
)
|
|
2,181
|
|
|
500
|
|
|
—
|
|
|
2,674
|
|
|||||
Investments in subsidiaries
|
(987
|
)
|
|
—
|
|
|
—
|
|
|
987
|
|
|
—
|
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|||||
Capital expenditures
|
(26
|
)
|
|
(3,716
|
)
|
|
(3,873
|
)
|
|
—
|
|
|
(7,615
|
)
|
|||||
Pay downs of investment securities
|
4,926
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,926
|
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
(81
|
)
|
|
—
|
|
|
(81
|
)
|
|||||
Net cash provided by investing activities
|
10,870
|
|
|
2,797
|
|
|
2,674
|
|
|
987
|
|
|
17,328
|
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
243,225
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
243,282
|
|
|||||
Deferred financing costs
|
(6,600
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,600
|
)
|
|||||
Repayments of debt
|
—
|
|
|
(2,863
|
)
|
|
(54
|
)
|
|
—
|
|
|
(2,917
|
)
|
|||||
Borrowings under revolver
|
—
|
|
|
89,695
|
|
|
—
|
|
|
—
|
|
|
89,695
|
|
|||||
Repayments on revolver
|
—
|
|
|
(80,223
|
)
|
|
—
|
|
|
—
|
|
|
(80,223
|
)
|
|||||
Capital contributions received
|
—
|
|
|
600
|
|
|
387
|
|
|
(987
|
)
|
|
—
|
|
|||||
Intercompany dividends paid
|
—
|
|
|
(65,648
|
)
|
|
(33,392
|
)
|
|
99,040
|
|
|
—
|
|
|||||
Dividends and distributions on common stock
|
(97,846
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97,846
|
)
|
|||||
Contributions from non-controlling interest
|
—
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|
248
|
|
|||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
(7,422
|
)
|
|
—
|
|
|
(7,422
|
)
|
|||||
Net cash provided by (used in) financing activities
|
138,779
|
|
|
(58,439
|
)
|
|
(40,176
|
)
|
|
98,053
|
|
|
138,217
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
223,564
|
|
|
19,871
|
|
|
(9,065
|
)
|
|
—
|
|
|
234,370
|
|
|||||
Cash and cash equivalents, beginning of period
|
111,470
|
|
|
12,375
|
|
|
116,523
|
|
|
—
|
|
|
240,368
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
335,034
|
|
|
$
|
32,246
|
|
|
$
|
107,458
|
|
|
$
|
—
|
|
|
$
|
474,738
|
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Net cash provided by operating activities
|
$
|
42,679
|
|
|
$
|
99,159
|
|
|
$
|
13,057
|
|
|
$
|
(71,010
|
)
|
|
$
|
83,885
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sale of investment securities
|
103,846
|
|
|
14,415
|
|
|
—
|
|
|
—
|
|
|
118,261
|
|
|||||
Maturities of investment securities
|
1,737
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,737
|
|
|||||
Purchase of investment securities
|
(112,119
|
)
|
|
(1,476
|
)
|
|
—
|
|
|
—
|
|
|
(113,595
|
)
|
|||||
Proceeds from sale or liquidation of long-term investments
|
1,106
|
|
|
—
|
|
|
148
|
|
|
—
|
|
|
1,254
|
|
|||||
Purchase of long-term investments
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
(34,857
|
)
|
|
—
|
|
|
(34,857
|
)
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
(12,502
|
)
|
|
—
|
|
|
(12,502
|
)
|
|||||
Increase in cash surrender value of life insurance policies
|
(717
|
)
|
|
(401
|
)
|
|
—
|
|
|
—
|
|
|
(1,118
|
)
|
|||||
Increase in restricted assets
|
(1,327
|
)
|
|
(6,607
|
)
|
|
—
|
|
|
—
|
|
|
(7,934
|
)
|
|||||
Issuance of notes receivable
|
—
|
|
|
—
|
|
|
(4,410
|
)
|
|
—
|
|
|
(4,410
|
)
|
|||||
Pay downs of investment securities
|
3,530
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,530
|
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Investments in subsidiaries
|
(42,808
|
)
|
|
—
|
|
|
—
|
|
|
42,808
|
|
|
—
|
|
|||||
Proceeds from sale of preferred securities
|
—
|
|
|
—
|
|
|
1,000
|
|
|
|
|
1,000
|
|
||||||
Capital expenditures
|
—
|
|
|
(2,350
|
)
|
|
(3,029
|
)
|
|
—
|
|
|
(5,379
|
)
|
|||||
Net cash (used in) provided by investing activities
|
(51,752
|
)
|
|
3,584
|
|
|
(53,650
|
)
|
|
42,808
|
|
|
(59,010
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Deferred financing costs
|
—
|
|
|
(625
|
)
|
|
—
|
|
|
—
|
|
|
(625
|
)
|
|||||
Repayments of debt
|
—
|
|
|
(3,254
|
)
|
|
(120
|
)
|
|
—
|
|
|
(3,374
|
)
|
|||||
Borrowings under revolver
|
—
|
|
|
126,727
|
|
|
—
|
|
|
—
|
|
|
126,727
|
|
|||||
Repayments on revolver
|
—
|
|
|
(144,492
|
)
|
|
—
|
|
|
—
|
|
|
(144,492
|
)
|
|||||
Capital contributions received
|
—
|
|
|
2,250
|
|
|
40,558
|
|
|
(42,808
|
)
|
|
—
|
|
|||||
Intercompany dividends paid
|
—
|
|
|
(69,075
|
)
|
|
(1,935
|
)
|
|
71,010
|
|
|
—
|
|
|||||
Dividends and distributions on common stock
|
(92,778
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92,778
|
)
|
|||||
Proceeds from exercise of Vector options
|
1,219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,219
|
|
|||||
Tax benefit of options exercised
|
384
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
384
|
|
|||||
Net cash (used in) provided by financing activities
|
(91,175
|
)
|
|
(88,447
|
)
|
|
38,503
|
|
|
28,202
|
|
|
(112,917
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(100,248
|
)
|
|
14,296
|
|
|
(2,090
|
)
|
|
—
|
|
|
(88,042
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
211,751
|
|
|
9,724
|
|
|
104,890
|
|
|
—
|
|
|
326,365
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
111,503
|
|
|
$
|
24,020
|
|
|
$
|
102,800
|
|
|
$
|
—
|
|
|
$
|
238,323
|
|
•
|
the manufacture and sale of cigarettes in the United States through our Liggett Group LLC and Vector Tobacco Inc. subsidiaries,
|
•
|
the sale of electronic cigarettes in the United States through our Zoom E-Cigs LLC subsidiary, and
|
•
|
the real estate business through our New Valley LLC subsidiary, which is seeking to acquire or invest in additional real estate properties or projects. New Valley owns 70.59% of Douglas Elliman, which operates the largest residential brokerage company in the New York metropolitan area
|
|
Three Months Ended
|
|
Six Months Ended
|
|
||||||||||||
|
June 30,
|
|
June 30,
|
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
Revenues
:
|
|
|
|
|
|
|
|
|
||||||||
Tobacco
|
$
|
255,498
|
|
|
$
|
254,890
|
|
|
$
|
476,513
|
|
|
$
|
482,975
|
|
|
E-Cigarettes
|
10
|
|
|
261
|
|
|
48
|
|
|
680
|
|
|
||||
Real Estate
|
182,765
|
|
|
161,022
|
|
|
342,512
|
|
|
293,278
|
|
|
||||
Total revenues
|
$
|
438,273
|
|
|
$
|
416,173
|
|
|
$
|
819,073
|
|
|
$
|
776,933
|
|
|
Operating income (loss)
:
|
|
|
|
|
|
|
|
|
||||||||
Tobacco
|
$
|
66,016
|
|
|
$
|
56,215
|
|
(1)
|
$
|
127,499
|
|
(2)
|
$
|
105,885
|
|
(3)
|
E-Cigarettes
|
(91
|
)
|
|
(2,400
|
)
|
|
(284
|
)
|
|
(5,564
|
)
|
|
||||
Real Estate
|
11,706
|
|
|
6,892
|
|
|
19,380
|
|
|
9,043
|
|
|
||||
Corporate and Other
|
(6,911
|
)
|
|
(4,904
|
)
|
|
(13,716
|
)
|
|
(9,843
|
)
|
|
||||
Total operating income
|
$
|
70,720
|
|
|
$
|
55,803
|
|
|
$
|
132,879
|
|
|
$
|
99,521
|
|
|
(1)
|
Operating income includes
$1,250
of litigation settlement expense and
$1,607
of pension settlement expense.
|
(2)
|
Operating income includes
$2,350
of litigation settlement expense, and
$41
of restructuring expense.
|
(3)
|
Operating income includes
$2,093
of litigation settlement expense and
$1,607
of pension settlement expense.
|
|
|
|
|
Three Months Ended
|
|
||||||
|
|
|
|
June 30,
|
|
||||||
|
|
|
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||||
Manufacturing overhead, raw materials and labor
|
|
$
|
29,558
|
|
|
$
|
32,301
|
|
|
||
Federal Excise Taxes, net
|
|
|
106,861
|
|
|
108,912
|
|
|
|||
Tobacco quota buyout expense
|
|
|
—
|
|
|
664
|
|
(1)
|
|||
FDA expense
|
|
|
4,386
|
|
|
4,315
|
|
|
|||
MSA expense, net of market share exemption
|
|
|
27,802
|
|
|
28,675
|
|
|
|||
Total cost of sales
|
|
|
$
|
168,607
|
|
|
$
|
174,867
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The quarterly assessments due under the Fair and Equitable Tobacco Reform Act (shown as “Tobacco quota buyout expense” above) expired at the end of 2014. The
$664
for the three months ended
June 30, 2015
represents a final assessment for the fourth quarter of 2014, which was received in the second quarter of 2015.
|
|
Three Months Ended
|
||||||
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Real Estate Revenues
:
|
|
|
|
||||
Commission and other brokerage income
|
$
|
173,368
|
|
|
$
|
151,020
|
|
Property management income
|
7,346
|
|
|
7,473
|
|
||
Title fees
|
1,016
|
|
|
1,123
|
|
||
Sales on facilities primarily from Escena
|
1,035
|
|
|
1,179
|
|
||
Other
|
—
|
|
|
227
|
|
||
Total real estate revenues
|
$
|
182,765
|
|
|
$
|
161,022
|
|
|
|
|
|
||||
Real Estate Cost of Sales:
|
|
|
|
||||
Commission and other brokerage income
|
$
|
113,953
|
|
|
$
|
102,767
|
|
Cost of sales on facilities primarily from Escena
|
893
|
|
|
934
|
|
||
Title fees
|
171
|
|
|
169
|
|
||
Total real estate cost of sales
|
$
|
115,017
|
|
|
$
|
103,870
|
|
|
|
|
|
Six Months Ended
|
|
||||||
|
|
|
|
June 30,
|
|
||||||
|
|
|
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||||
Manufacturing overhead, raw materials and labor
|
|
$
|
55,369
|
|
|
$
|
61,963
|
|
|
||
Federal Excise Taxes, net
|
|
|
197,707
|
|
|
206,271
|
|
|
|||
Tobacco quota buyout expense
|
|
|
—
|
|
|
664
|
|
(1)
|
|||
FDA expense
|
|
|
9,632
|
|
|
9,564
|
|
|
|||
MSA expense, net of market share exemption
|
|
|
42,637
|
|
|
53,435
|
|
|
|||
|
Total cost of sales
|
|
|
$
|
305,345
|
|
|
$
|
331,897
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The quarterly assessments due under the Fair and Equitable Tobacco Reform Act (shown as “Tobacco quota buyout expense” above) expired at the end of 2014. The
$664
for the
six
months ended
June 30, 2015
represents a final assessment for the fourth quarter of 2014, which was received in 2015.
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Real Estate Revenues
:
|
|
|
|
||||
Commission and other brokerage income
|
$
|
322,722
|
|
|
$
|
272,726
|
|
Property management income
|
14,464
|
|
|
14,686
|
|
||
Title fees
|
2,128
|
|
|
1,951
|
|
||
Sales on facilities primarily from Escena
|
3,195
|
|
|
3,524
|
|
||
Other
|
3
|
|
|
391
|
|
||
Total real estate revenues
|
$
|
342,512
|
|
|
$
|
293,278
|
|
|
|
|
|
||||
Real Estate Cost of Sales
:
|
|
|
|
||||
Commission and other brokerage income
|
$
|
212,365
|
|
|
$
|
185,864
|
|
Cost of sales on facilities primarily from Escena
|
2,010
|
|
|
2,055
|
|
||
Title fees
|
320
|
|
|
309
|
|
||
Total real estate cost of sales
|
$
|
214,695
|
|
|
$
|
188,228
|
|
|
(Dollars in Thousands. Area and Unit Information in Ones)
|
||||||||||||||||||||||||||
|
Location
|
Date of Initial Investment
|
Percentage Owned
|
Net Cash Invested
|
Cumulative Earnings (Losses)
|
Carrying Value as of June 30, 2016
|
Future Capital Commit-
ments from New Valley (1) |
Projected Residential and/or Hotel Area
|
Projected Commercial Space
|
Projected Number of Residential Lots, Units and/or Hotel Rooms
|
Projected Construction Start Date
|
Projected Construction End Date
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sagaponack
|
Sagaponack, NY
|
April 2015
|
100
|
%
|
$
|
12,684
|
|
$
|
—
|
|
$
|
12,684
|
|
$
|
—
|
|
TBD
|
|
|
N/A
|
|
|
TBD
|
|
|
N/A
|
N/A
|
Escena, net
|
Master planned community, golf course, restaurant and shop in Palm Springs, CA
|
March 2008
|
100
|
%
|
2,644
|
|
8,000
|
|
10,644
|
|
—
|
|
450
|
|
Acres
|
|
|
667
450 |
|
R Lots
H |
N/A
|
N/A
|
|||||
Investments in real estate, net
|
|
|
|
$
|
15,328
|
|
$
|
8,000
|
|
$
|
23,328
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
10 Madison Square West (1107 Broadway)
|
Flatiron District/NoMad neighborhood, Manhattan, NY
|
October 2011
|
5.0
|
%
|
$
|
1,351
|
|
$
|
7,837
|
|
$
|
9,188
|
|
$
|
—
|
|
260,000
|
|
SF
|
20,000
|
|
SF
|
124
|
|
R
|
August 2012
|
December 2016
|
The Marquand (11 East 68th Street)
|
Upper East Side, Manhattan, NY
|
December 2011
|
18.0
|
%
|
3,396
|
|
5,937
|
|
9,333
|
|
—
|
|
90,000
|
|
SF
|
—
|
|
|
29
|
|
R
|
June 2012
|
Completed
|
||||
11 Beach Street
|
TriBeCa, Manhattan, NY
|
June 2012
|
49.5
|
%
|
12,328
|
|
1,374
|
|
13,702
|
|
—
|
|
97,000
|
|
SF
|
—
|
|
|
27
|
|
R
|
May 2014
|
December 2016
|
||||
20 Times Square (701 Seventh Avenue)
|
Times Square, Manhattan, NY
|
August 2012
|
7.1
|
%
|
14,280
|
|
2,207
|
|
16,487
|
|
—
|
|
252,000
|
|
SF
|
80,000
|
|
SF
|
452
|
|
H
|
September 2013
|
January 2018
|
||||
111 Murray Street
|
TriBeCa, Manhattan, NY
|
May 2013
|
9.5
|
%
|
25,719
|
|
(411
|
)
|
25,308
|
|
—
|
|
330,000
|
|
SF
|
1,700
|
|
SF
|
157
|
|
R
|
September 2014
|
September 2018
|
||||
160 Leroy Street (2)
|
West Greenwich Village, Manhattan, NY
|
March 2013
|
3.1
|
%
|
2,664
|
|
1,847
|
|
4,511
|
|
—
|
|
130,000
|
|
SF
|
—
|
|
|
57
|
|
R
|
Fall 2015
|
March 2018
|
||||
215 Chrystie Street
|
Lower East Side, Manhattan, NY
|
December 2012
|
18.4
|
%
|
5,297
|
|
432
|
|
5,729
|
|
—
|
|
246,000
|
|
SF
|
—
|
|
|
11
367 |
|
R
H |
June 2014
|
March 2017
|
||||
The Dutch (25-19 43rd Avenue)
|
Long Island City, NY
|
May 2014
|
9.9
|
%
|
980
|
|
149
|
|
1,129
|
|
|
65,000
|
|
SF
|
—
|
|
|
86
|
|
R
|
September 2014
|
January 2017
|
|||||
Queens Plaza (23-10 Queens Plaza South)
|
Long Island City, NY
|
December 2012
|
45.4
|
%
|
14,711
|
|
2,123
|
|
16,834
|
|
—
|
|
260,000
|
|
SF
|
25,000
|
|
SF
|
391
|
|
R
|
March 2014
|
October 2016
|
||||
87 Park (8701 Collins Avenue)
|
Miami Beach, FL
|
December 2013
|
15.0
|
%
|
8,275
|
|
571
|
|
8,846
|
|
—
|
|
160,000
|
|
SF
|
TBD
|
|
|
70
|
|
R
|
October 2015
|
September 2018
|
||||
125 Greenwich Street (2)
|
Financial District, Manhattan, NY
|
August 2014
|
13.3
|
%
|
7,992
|
|
1,788
|
|
9,780
|
|
—
|
|
306,000
|
|
SF
|
16,000
|
|
SF
|
273
|
|
R
|
March 2015
|
March 2019
|
||||
West Hollywood Edition (9040 Sunset Boulevard)
|
West Hollywood, CA
|
October 2014
|
48.5
|
%
|
6,028
|
|
1,022
|
|
7,050
|
|
—
|
|
210,000
|
|
SF
|
—
|
|
|
20
190 |
|
R
H |
May 2015
|
April 2018
|
||||
76 Eleventh Avenue
|
West Chelsea, Manhattan, NY
|
May 2015
|
5.1
|
%
|
17,000
|
|
1,867
|
|
18,867
|
|
—
|
|
620,000
|
|
SF
|
48,000
|
|
SF
|
250
|
|
H
|
September 2016
|
March 2019
|
||||
Monad Terrace
|
Miami Beach, FL
|
May 2015
|
31.3
|
%
|
7,635
|
|
139
|
|
7,774
|
|
—
|
|
160,000
|
|
SF
|
—
|
|
|
TBD
|
|
R
|
May 2016
|
May 2018
|
||||
Takanasee
|
Long Branch, NJ
|
December 2015
|
22.8
|
%
|
4,428
|
|
488
|
|
4,916
|
|
—
|
|
TBD
|
|
|
N/A
|
|
|
TBD
|
|
R
|
TBD
|
TBD
|
||||
Condominium and Mixed Use Development
|
|
|
|
$
|
132,084
|
|
$
|
27,370
|
|
$
|
159,454
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Maryland Portfolio
|
Primarily Baltimore County, MD
|
July 2012
|
7.6
|
%
|
$
|
1,395
|
|
$
|
(1,395
|
)
|
$
|
—
|
|
$
|
—
|
|
N/A
|
|
|
N/A
|
|
|
5,517
|
|
R
|
N/A
|
N/A
|
ST Portfolio
|
Houston, TX and Stamford, CT
|
November 2013
|
16.3
|
%
|
5,976
|
|
3,217
|
|
9,193
|
|
—
|
|
640,576
|
|
SF
|
20,065
|
|
SF
|
488
|
|
R
|
N/A
|
N/A
|
||||
Apartment Buildings
|
|
|
|
$
|
7,371
|
|
$
|
1,822
|
|
$
|
9,193
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Park Lane Hotel
|
Central Park South, Manhattan, NY
|
November 2013
|
5.2
|
%
|
$
|
26,211
|
|
$
|
(5,073
|
)
|
$
|
21,138
|
|
$
|
—
|
|
445,600
|
|
SF
|
—
|
|
|
628
|
|
H
|
N/A
|
N/A
|
Hotel Taiwana
|
St. Barthelemy, French West Indies
|
October 2011
|
17.0
|
%
|
7,941
|
|
(155
|
)
|
7,786
|
|
—
|
|
61,300
|
|
SF
|
4,300
|
|
SF
|
22
|
|
H
|
N/A
|
N/A
|
||||
Coral Beach and Tennis Club
|
Coral Beach, Bermuda
|
December 2013
|
49.0
|
%
|
6,048
|
|
(2,886
|
)
|
3,162
|
|
—
|
|
52
|
|
Acres
|
—
|
|
|
101
|
|
H
|
N/A
|
N/A
|
||||
Hotels
|
|
|
|
$
|
40,200
|
|
$
|
(8,114
|
)
|
$
|
32,086
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
The Plaza at Harmon Meadow
|
Secaucus, NJ
|
March 2015
|
49.0
|
%
|
$
|
5,217
|
|
$
|
(1,535
|
)
|
$
|
3,682
|
|
$
|
—
|
|
—
|
|
—
|
217,613
|
|
SF
|
—
|
|
—
|
N/A
|
N /A
|
Commercial
|
|
|
|
$
|
5,217
|
|
$
|
(1,535
|
)
|
$
|
3,682
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Carrying Value
|
|
|
|
$
|
200,200
|
|
$
|
27,543
|
|
$
|
227,743
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) This column only represents capital commitments required under the various joint venture agreements. However, many of the operating agreements provide for the operating partner to call capital. If a joint venture partner, such as New Valley, declines to fund the capital call, then the partner’s ownership percentage could either be diluted or, in some situations, the character of a funding member’s contribution would be converted from a capital contribution to a member loan.
|
|||||||||||||||||||||||||||
(2) Carrying value as of June 30, 2016, includes non-controlling interest of $2,172 and $1,853, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
N/A - Not applicable
|
SF - Square feet
|
H - Hotel rooms
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
TBD -To be determined
|
R - Residential Units
|
R Lots - Residential lots
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indenture
|
|
June 30,
2016 |
|
December 31,
2015 |
Covenant
|
|
Requirement
|
|
|
||
Consolidated EBITDA, as defined
|
|
$75,000
|
|
$314,861
|
|
$268,870
|
Leverage ratio, as defined
|
|
<3.0 to 1
|
|
1.71 to 1
|
|
1.95 to 1
|
Secured leverage ratio, as defined
|
|
<1.5 to 1
|
|
0.8 to 1
|
|
0.9 to 1
|
•
|
prohibits the sale of modified risk tobacco products (including those described as “light,” “low,” or “mild”) unless authorized by FDA;
|
•
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requires FDA review to market new tobacco products introduced after the proposed grandfathered date of February 15, 2007.
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•
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economic outlook,
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•
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capital expenditures,
|
•
|
cost reduction,
|
•
|
legislation and regulations,
|
•
|
cash flows,
|
•
|
operating performance,
|
•
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litigation,
|
•
|
impairment charges and cost saving associated with restructurings of our tobacco operations, and
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•
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related industry developments (including trends affecting our business, financial condition and results of operations).
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•
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general economic and market conditions and any changes therein, due to acts of war and terrorism or otherwise,
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•
|
governmental regulations and policies,
|
•
|
effects of industry competition,
|
•
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impact of business combinations, including acquisitions and divestitures, both internally for us and externally in the tobacco industry,
|
•
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impact of legislation on our competitors’ payment obligations, results of operations and product costs, i.e. the impact of federal legislation eliminating the federal tobacco quota system and providing for regulation of tobacco products by the FDA,
|
•
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impact of substantial increases in federal, state and local excise taxes,
|
•
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uncertainty related to product liability and other tobacco-related litigations including the
Engle
progeny cases pending in Florida and other individual and class action cases where certain plaintiffs have alleged compensatory and punitive damage amounts ranging into the hundreds of million and even billions of dollars; and,
|
•
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potential additional payment obligations for us under the MSA and other settlement agreements with the states.
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•
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In June 2015, Douglas Elliman employed a new Chief Financial Officer, who is a licensed Certified Public Accountant (“CPA”) with more than 30 years of experience in the financial departments of publicly-traded companies. In addition, in 2015, Douglas Elliman also added a Director of Sarbanes-Oxley Section 404 Compliance, a corporate controller, who is licensed as a CPA and previously served as a senior manager at a Big Four accounting firm, two regional controllers, who are both currently licensed as CPAs and previously served as managers at Big Four accounting firms, and two accounting managers who are both licensed as CPAs.
|
•
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In August 2015, Douglas Elliman employed a new Chief Technology Officer (“CTO”) who was previously a technology executive with a large U.S. financial institution. Douglas Elliman’s new CTO oversees, among other things, security of the accuracy and completeness of the Company’s financial reporting.
|
•
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During 2015, Douglas Elliman improved its documentation of internal controls into a more robust format that has been designed to detect errors that could lead to material misstatements in the Company’s consolidated financial statements.
|
•
|
During 2015, the Company redesigned and implemented a series of newly-created internal controls related to previously improper internal controls related to segregation of duties by accounting and finance personnel at Douglas Elliman.
|
(i)
|
Douglas Elliman’s previous failure to monitor controls in certain areas relating to the period-end financial reporting process,
|
(ii)
|
Douglas Elliman’s previous failure to maintain effective controls over period-end financial reporting processes, including controls over the preparation, analysis and review of certain significant account reconciliations required to assess the appropriateness of account balances at period-end, as well as controls over the preparation and review of the interim and annual financial statements; and,
|
(iii)
|
Douglas Elliman’s previous ineffective controls over the processing and recording of recurring and non-recurring journal entries.
|
(i)
|
Certain controls at Douglas Elliman related to segregation of duties with accounting and finance personnel were designed, but not operating, properly at December 31, 2015; and,
|
(ii)
|
Douglas Elliman did not maintain effective controls over access to its information technology system for finance and accounting (“IT System”). Specifically, root level access to Douglas Elliman’s IT System was shared with the third party software provider that allowed unrestricted and unmonitored access to the application and it database. Further, the Company did not have an effective change management process to reasonably assure that changes to the IT System were properly documented, tracked, reviewed, tested and approved.
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|
|
|
|
|
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4.1
|
Fourth Supplemental Indenture, dated as of May 9, 2016, among Vector Group Ltd., the guarantors named therein and U.S. Bank National Association, as trustee. (incorporated by reference to Exhibit 4.5 of Vector Group Ltd.’s Current Report on Form 8-K dated May 9, 2016).
|
|
|
4.2
|
Registration Rights Agreement, dated as of May 9, 2016, among Vector Group Ltd., the guarantors named therein and Jefferies LLC, as the initial purchaser. (incorporated by reference to Exhibit 4.6 of Vector Group Ltd.’s Current Report on Form 8-K dated May 9, 2016).
|
|
|
12.1
|
Computation of Ratio of Earnings to Fixed Charges for each of the five years within the period ended December 31, 2015 and for each of the six months within the periods ended June 30, 2016 and 2015.
|
|
|
31.1
|
Certification of Chief Executive Officer, Pursuant to Exchange Act Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of Chief Financial Officer, Pursuant to Exchange Act Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2
|
Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
99.1
|
Material Legal Proceedings
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
VECTOR GROUP LTD.
|
|
|
(Registrant)
|
|
|
|
|
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By: /s/ J. Bryant Kirkland III
|
|
|
J. Bryant Kirkland III
|
|
|
Senior Vice President, Treasurer and
|
|
|
Chief Financial Officer
|
Date:
|
August 5, 2016
|
|
1 Year Vector Chart |
1 Month Vector Chart |
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