|
Delaware
|
|
1-5759
|
|
65-0949535
|
(State or other jurisdiction of incorporation
incorporation or organization)
|
|
Commission File Number
|
|
(I.R.S. Employer Identification No.)
|
4400 Biscayne Boulevard, Miami, Florida
(Address of principal executive offices)
|
|
33137
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, par value $.10 per share
|
|
New York Stock Exchange
|
Large accelerated filer þ
|
|
Accelerated filer o
|
|
Non-accelerated filer o
|
|
Smaller reporting company o
|
|
|
|
|
(Do not check if a smaller reporting company)
|
|
|
|
|
|
Page
|
|
|
|
|
||
|
||
|
||
Item 16.
|
Form 10-K Summary
|
|
EX-10.21
|
||
EX-10.22
|
||
EX-10.32
|
||
EX-12.1
|
||
EX-21
|
||
EX-23.1
|
||
EX-31.1
|
||
EX-31.2
|
||
EX-32.1
|
||
EX-32.2
|
||
EX-99.1
|
||
EX-101 INSTANCE DOCUMENT - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
||
EX-101 SCHEMA DOCUMENT
|
||
EX-101 CALCULATION LINKBASE DOCUMENT
|
||
EX-101 LABELS LINKBASE DOCUMENT
|
||
EX-101 PRESENTATION LINKBASE DOCUMENT
|
||
EX-101 DEFINITION LINKBASE DOCUMENT
|
ITEM 1.
|
BUSINESS
|
•
|
the manufacture and sale of cigarettes in the United States through our Liggett Group LLC (“Liggett”) and Vector Tobacco Inc. (“Vector Tobacco”) subsidiaries, and
|
•
|
the real estate business through our New Valley LLC (“New Valley”) subsidiary, which is seeking to acquire or invest in additional real estate properties or projects. New Valley owns 70.59% of Douglas Elliman Realty, LLC (“Douglas Elliman”), which operates the largest residential brokerage company in the New York metropolitan area and also conducts residential real estate brokerage operations in South Florida, Southern California, Connecticut and Aspen.
|
•
|
Capitalize on our tobacco subsidiaries’ cost advantage in the United States cigarette market due to the favorable treatment that they receive under the Master Settlement Agreement (“MSA”);
|
•
|
Focus marketing and selling efforts on the discount segment, continue to build volume and margin in core discount brands (PYRAMID, EAGLE 20’s, GRAND PRIX, LIGGETT SELECT and EVE) and utilize core brand equity to selectively build distribution;
|
•
|
Continue to provide the best quality products relative to other discount products in the marketplace;
|
•
|
Increase efficiency by developing and adopting an organizational structure to maximize profit potential;
|
•
|
Selectively expand the portfolio of private and control label partner brands utilizing a pricing strategy that offers long-term list price stability for customers; and
|
•
|
Identify, develop and launch relevant new tobacco products to the market in the future.
|
•
|
Continue to grow Douglas Elliman Realty’s operations by utilizing its strong brand name recognition and pursuing strategic and financial opportunities, including entry into new markets;
|
•
|
Continue to leverage our expertise as direct investors by actively pursuing real estate investments in the United States and abroad which we believe will generate above-market returns;
|
•
|
Acquire operating companies through mergers, asset purchases, stock acquisitions or other means; and
|
•
|
Invest our excess funds opportunistically in situations that we believe can maximize stockholder value.
|
•
|
PYRAMID — the industry’s first deep discount product with a brand identity relaunched in the second quarter of 2009,
|
•
|
EAGLE 20’s — a brand positioned in the deep discount segment for long-term growth re-launched as a national brand in 2013,
|
•
|
GRAND PRIX — re-launched as a national brand in 2005,
|
•
|
LIGGETT SELECT — a discount category brand originally launched in 1999,
|
•
|
EVE — a 120-millimeter cigarette in the branded discount category, and
|
•
|
USA and various Partner Brands and private label brands.
|
•
|
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; and (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.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
cash interest expense of approximately $106.3 million,
|
•
|
dividends on our outstanding common shares of approximately $222.9 million, and
|
•
|
other corporate expenses and taxes.
|
•
|
make it more difficult for us to satisfy our other obligations with respect to our debt, including repurchase obligations upon the occurrence of specified change of control events;
|
•
|
increase our vulnerability to general adverse economic and industry conditions;
|
•
|
limit our ability to obtain additional financing;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, reducing the amount of our cash flow available for dividends on our common stock and other general corporate purposes;
|
•
|
require us to sell other securities or to sell some or all of our assets, possibly on unfavorable terms, to meet payment obligations;
|
•
|
restrict us from making strategic acquisitions, investing in new capital assets or taking advantage of business opportunities;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and industry; and
|
•
|
place us at a competitive disadvantage compared to competitors that have less debt.
|
•
|
incur or guarantee additional indebtedness or issue preferred stock;
|
•
|
pay dividends or distributions on, or redeem or repurchase, capital stock;
|
•
|
create liens with respect to our assets;
|
•
|
make investments, loans or advances;
|
•
|
prepay subordinated indebtedness;
|
•
|
enter into transactions with affiliates; and
|
•
|
merge, consolidate, reorganize or sell our assets.
|
•
|
requires FDA to develop graphic warnings for cigarette packages, and grants FDA authority to require new warnings;
|
•
|
imposes new restrictions on the sale and distribution of tobacco products, including significant new restrictions on tobacco product advertising and promotion, as well as the use of brand and trade names;
|
•
|
bans the use of “light,” “mild,” “low” or similar descriptors on tobacco products;
|
•
|
bans the use of “characterizing flavors” in cigarettes other than tobacco or menthol;
|
•
|
gives FDA the authority to impose tobacco product standards that are appropriate for the protection of the public health (by, for example, requiring reduction or elimination of the use of particular constituents or components, requiring product testing, or addressing other aspects of tobacco product construction, constituents, properties or labeling);
|
•
|
requires manufacturers to obtain FDA review and authorization for the marketing of certain new or modified tobacco products, which could ultimately result in FDA prohibiting Liggett from selling certain of its products;
|
•
|
requires pre-market approval by FDA for tobacco products represented (through labels, labeling, advertising, or other means) as presenting a lower risk of harm or tobacco-related disease;
|
•
|
requires manufacturers to report ingredients and harmful constituents and requires FDA to disclose certain constituent information to the public;
|
•
|
mandates that manufacturers test and report on ingredients and constituents identified by FDA as requiring such testing to protect the public health, and allows FDA to require the disclosure of testing results to the public;
|
•
|
requires manufacturers to submit to FDA certain information regarding the health, toxicological, behavioral or physiological effects of tobacco products;
|
•
|
prohibits use of tobacco containing a pesticide chemical residue at a level greater than allowed under federal law;
|
•
|
requires FDA to establish “good manufacturing practices” to be followed at tobacco manufacturing facilities;
|
•
|
requires tobacco product manufacturers (and certain other entities) to register with FDA;
|
•
|
authorizes FDA to require the reduction of nicotine (although it may not require the reduction of nicotine yields of a tobacco product to zero) and the potential reduction or elimination of other constituents, including menthol;
|
•
|
imposes (and allows FDA to impose) various recordkeeping and reporting requirements on tobacco product manufacturers; and
|
•
|
grants FDA the regulatory authority to impose broad additional restrictions.
|
•
|
periods of economic slowdown or recession;
|
•
|
rising interest rates;
|
•
|
the general availability of mortgage financing;
|
•
|
a negative perception of the market for residential real estate;
|
•
|
commission pressure from brokers who discount their commissions;
|
•
|
an increase in the cost of homeowners’ insurance;
|
•
|
weak credit markets;
|
•
|
a low level of consumer confidence in the economy and/or the real estate market;
|
•
|
instability of financial institutions;
|
•
|
legislative, tax or regulatory changes that would adversely impact the real estate market, including but not limited to potential reform relating to Fannie Mae, Freddie Mac and other government sponsored entities that provide liquidity to
|
•
|
adverse changes in economic and general business conditions in the New York metropolitan area;
|
•
|
a decline in the affordability of homes;
|
•
|
declining demand for real estate;
|
•
|
decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership; and/or
|
•
|
acts of God, such as hurricanes, earthquakes and other natural disasters, or acts or threats of war or terrorism.
|
•
|
actual or anticipated fluctuations in our operating results;
|
•
|
changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
|
•
|
the operating and stock performance of our competitors;
|
•
|
announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
•
|
the initiation or outcome of litigation;
|
•
|
the failure or significant disruption of our operations from various causes related to our critical information technologies and systems including cybersecurity threats to our data and customer data as well as reputational or financial risks associated with a loss of any such data;
|
•
|
changes in interest rates;
|
•
|
general economic, market and political conditions;
|
•
|
additions or departures of key personnel; and
|
•
|
future sales of our equity or convertible securities.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
Type
|
|
Number of Offices
|
|
Location
|
|
Owned or Leased
|
|
Approximate Total
Square Footage
|
||
|
|
|
|
|
|
|
|
|
||
Offices
|
|
21
|
|
|
New York City, NY
|
|
Leased
|
|
184,000
|
|
Offices
|
|
38
|
|
|
Long Island, NY
|
|
Leased
|
|
123,000
|
|
Offices
|
|
17
|
|
|
South Florida
|
|
Leased
|
|
41,000
|
|
Offices
|
|
5
|
|
|
Westchester County, NY
|
|
Leased
|
|
14,000
|
|
Offices
|
|
22
|
|
|
California
|
|
Leased
|
|
67,000
|
|
Offices
|
|
7
|
|
|
Other
|
|
Leased
|
|
8,000
|
|
Type
|
|
Location
|
|
Owned or Leased
|
|
Approximate Total
Square Footage
|
|
|
|
|
|
|
|
|
|
Storage Facilities
|
|
Danville, VA
|
|
Owned
|
|
578,000
|
|
Office and Manufacturing Complex
|
|
Mebane, NC
|
|
Owned
|
|
240,000
|
|
Warehouse
|
|
Mebane, NC
|
|
Owned
|
|
60,000
|
|
Warehouse
|
|
Mebane, NC
|
|
Leased
|
|
125,000
|
|
Warehouse
|
|
Mebane, NC
|
|
Leased
|
|
22,000
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
|
Year
|
|
High
|
|
Low
|
|
Cash Dividends
|
||||||
2017:
|
|
|
|
|
|
|
|
|
||||
Fourth Quarter
|
|
$
|
23.14
|
|
|
$
|
20.24
|
|
|
$
|
0.40
|
|
Third Quarter
|
|
21.07
|
|
|
18.70
|
|
|
0.38
|
|
|||
Second Quarter
|
|
21.55
|
|
|
19.16
|
|
|
0.38
|
|
|||
First Quarter
|
|
22.13
|
|
|
18.85
|
|
|
0.38
|
|
|||
2016:
|
|
|
|
|
|
|
|
|
|
|||
Fourth Quarter
|
|
$
|
21.86
|
|
|
$
|
19.07
|
|
|
$
|
0.38
|
|
Third Quarter
|
|
21.34
|
|
|
19.48
|
|
|
0.36
|
|
|||
Second Quarter
|
|
20.84
|
|
|
18.41
|
|
|
0.36
|
|
|||
First Quarter
|
|
21.58
|
|
|
19.27
|
|
|
0.36
|
|
|
12/12
|
12/13
|
12/14
|
12/15
|
12/16
|
12/17
|
||||||
Vector Group Ltd.
|
100
|
|
127
|
|
188
|
|
234
|
|
254
|
|
283
|
|
S&P 500
|
100
|
|
132
|
|
150
|
|
153
|
|
171
|
|
208
|
|
S&P MidCap
|
100
|
|
133
|
|
146
|
|
143
|
|
173
|
|
201
|
|
NYSE Arca Tobacco
|
100
|
|
110
|
|
110
|
|
133
|
|
167
|
|
183
|
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
|
Year Individual
Became an
Executive Officer
|
|
Howard M. Lorber
|
|
69
|
|
|
President and Chief Executive Officer
|
|
2001
|
Richard J. Lampen
|
|
64
|
|
|
Executive Vice President
|
|
1996
|
J. Bryant Kirkland III
|
|
52
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
2006
|
Marc N. Bell
|
|
57
|
|
|
Senior Vice President, General Counsel and Secretary
|
|
1998
|
Ronald J. Bernstein
|
|
64
|
|
|
President and Chief Executive Officer of Liggett
|
|
2000
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended December 31,
|
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||
|
(dollars in thousands, except per share amounts)
|
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues (1)
|
$
|
1,807,476
|
|
|
$
|
1,690,949
|
|
|
$
|
1,657,197
|
|
|
$
|
1,591,315
|
|
|
$
|
1,079,921
|
|
|
Operating income (3)
|
$
|
233,688
|
|
|
$
|
232,997
|
|
|
$
|
199,920
|
|
|
$
|
212,438
|
|
|
$
|
111,186
|
|
|
Net income attributed to Vector Group Ltd.
|
$
|
84,572
|
|
|
$
|
71,127
|
|
|
$
|
59,198
|
|
|
$
|
36,856
|
|
|
$
|
37,300
|
|
(4)
|
Per basic common share (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.59
|
|
|
$
|
0.53
|
|
|
$
|
0.44
|
|
|
$
|
0.30
|
|
|
$
|
0.33
|
|
|
Per diluted common share (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.59
|
|
|
$
|
0.53
|
|
|
$
|
0.44
|
|
|
$
|
0.30
|
|
|
$
|
0.33
|
|
|
Cash distributions declared per common share (2)
|
$
|
1.54
|
|
|
$
|
1.47
|
|
|
$
|
1.40
|
|
|
$
|
1.33
|
|
|
$
|
1.27
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets
|
$
|
613,709
|
|
|
$
|
705,463
|
|
|
$
|
583,739
|
|
|
$
|
751,397
|
|
|
$
|
484,388
|
|
|
Total assets
|
$
|
1,328,278
|
|
|
$
|
1,404,035
|
|
|
$
|
1,280,615
|
|
|
$
|
1,389,042
|
|
|
$
|
1,089,965
|
|
|
Current liabilities
|
$
|
204,639
|
|
|
$
|
196,148
|
|
|
$
|
216,292
|
|
|
$
|
212,424
|
|
|
$
|
359,376
|
|
|
Notes payable, embedded derivatives, long-term debt and other obligations, less current portion
|
$
|
1,270,657
|
|
|
$
|
1,245,275
|
|
|
$
|
1,000,150
|
|
|
$
|
995,001
|
|
|
$
|
607,872
|
|
|
Non-current employee benefits, deferred income taxes and other long-term liabilities
|
$
|
184,742
|
|
|
$
|
215,884
|
|
|
$
|
186,334
|
|
|
$
|
202,297
|
|
|
$
|
173,322
|
|
|
Stockholders’ deficiency
|
$
|
(331,760
|
)
|
|
$
|
(253,272
|
)
|
|
$
|
(122,161
|
)
|
|
$
|
(20,680
|
)
|
|
$
|
(50,605
|
)
|
|
(1)
|
Revenues include federal excise taxes of $460,561, $425,980, $439,647, $446,086 and $456,703, respectively.
|
(2)
|
Per share computations include the impact of 5% stock dividends on September 28, 2017, September 29, 2016, September 29, 2015, September 26, 2014, and September 27, 2013.
|
(3)
|
Operating income includes $2,721 $4,364, $1,419 and $11,823 of income from MSA Settlements for the years ended December 31, 2017, 2015, 2014, and 2013, respectively and $247 of expense from MSA Settlements for the year ended December 31, 2016; and $6,591, $20,000, $20,072, $2,475 and $88,106 of litigation judgment and settlement expense for the years ended December 31, 2017, 2016, 2015, 2014, and 2013, respectively; and $41 and $7,257 of restructuring charges for the years ended December 31, 2016 and 2015, respectively; and $1,607 of pension settlement expense for the year ended December 31, 2015.
|
(4)
|
Net income attributed to Vector Group Ltd. includes a gain of $36,140, net of taxes, to account for the difference between the carrying value and the fair value of the previously held 50% interest in Douglas Elliman.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
the manufacture and sale of cigarettes in the United States through our Liggett Group LLC and Vector Tobacco Inc. subsidiaries, and
|
•
|
the real estate business through our New Valley 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 and also conducts residential real estate brokerage operations in South Florida, Southern California, Connecticut and Aspen.
|
•
|
PYRAMID — the industry’s first deep discount product with a brand identity re-launched in the second quarter of 2009,
|
•
|
EAGLE 20’s — a brand positioned in the deep discount segment for long-term growth re-launched as a national brand in 2013,
|
•
|
GRAND PRIX — re-launched as a national brand in 2005,
|
•
|
LIGGETT SELECT — a discount category brand originally launched in 1999,
|
•
|
EVE — a 120-millimeter cigarette in the branded discount category, and
|
•
|
USA and various Partner Brands and private label brands.
|
|
Year Ended December 31,
|
|
||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
|
(Dollars in thousands)
|
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Tobacco
|
$
|
1,080,950
|
|
|
|
$
|
1,011,620
|
|
|
|
$
|
1,017,761
|
|
|
E-Cigarettes
|
(838
|
)
|
|
|
(776
|
)
|
|
|
(1,970
|
)
|
|
|||
Real Estate
|
727,364
|
|
|
|
680,105
|
|
|
|
641,406
|
|
|
|||
Total revenues
|
$
|
1,807,476
|
|
|
|
$
|
1,690,949
|
|
|
|
$
|
1,657,197
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|||||
Tobacco
|
$
|
240,904
|
|
(1)
|
|
$
|
238,293
|
|
(2)
|
|
$
|
209,393
|
|
(3)
|
E-Cigarettes
|
(888
|
)
|
|
|
(1,403
|
)
|
|
|
(13,037
|
)
|
|
|||
Real Estate
|
21,439
|
|
|
|
23,001
|
|
|
|
24,087
|
|
|
|||
Corporate and Other
|
(27,767
|
)
|
|
|
(26,894
|
)
|
|
|
(20,523
|
)
|
|
|||
Total operating income
|
$
|
233,688
|
|
|
|
$
|
232,997
|
|
|
|
$
|
199,920
|
|
|
(1)
|
Operating income includes $2,721 of income from MSA Settlement, and $6,591 of litigation settlement and judgment expense.
|
(2)
|
Operating income includes $247 of expense from MSA Settlement, $20,000 of litigation settlement and judgment expense, and $41 of restructuring expense.
|
(3)
|
Operating income includes $4,364 of income from MSA Settlement, $20,072 of litigation judgment expense, $7,257 of restructuring expense, and $1,607 of pension settlement expense.
|
|
|
|
Year Ended December 31,
|
|
||||||
|
|
|
2017
|
|
2016
|
|
||||
|
|
|
|
|
||||||
Manufacturing overhead, raw materials and labor
|
$
|
122,562
|
|
|
$
|
116,713
|
|
|
||
Federal excise taxes
|
|
460,561
|
|
|
425,980
|
|
|
|||
FDA expense
|
|
21,011
|
|
|
19,252
|
|
|
|||
MSA expense, net of market share exemption
|
|
146,634
|
|
(1)
|
110,486
|
|
(2)
|
|||
|
Total cost of sales
|
|
$
|
750,768
|
|
|
$
|
672,431
|
|
|
|
|
|
|
|
|
|
(2)
|
Includes $247 increase in expense from MSA Settlement.
|
|
|
||||||
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Real Estate Revenues:
|
|
|
|
||||
Commission and other brokerage income
|
$
|
685,154
|
|
|
$
|
641,051
|
|
Property management income
|
31,924
|
|
|
29,883
|
|
||
Title fees
|
5,265
|
|
|
4,324
|
|
||
Sales on facilities primarily from Escena
|
5,021
|
|
|
4,844
|
|
||
Other
|
—
|
|
|
3
|
|
||
Total real estate revenues
|
$
|
727,364
|
|
|
$
|
680,105
|
|
|
|
|
|
||||
Real Estate Cost of Sales:
|
|
|
|
||||
Real estate agent commissions
|
$
|
472,753
|
|
|
$
|
420,317
|
|
Cost of sales on facilities primarily from Escena
|
3,882
|
|
|
3,833
|
|
||
Title fees
|
643
|
|
|
679
|
|
||
Total real estate cost of sales
|
$
|
477,278
|
|
|
$
|
424,829
|
|
|
|
|
|
|
|
||||||
|
|
|
|
Year Ended December 31,
|
|
||||||
|
|
|
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||||
Manufacturing overhead, raw materials and labor
|
|
$
|
116,713
|
|
|
$
|
124,814
|
|
|
||
Federal excise taxes
|
|
|
425,980
|
|
|
439,647
|
|
|
|||
Tobacco quota buyout expense
|
|
|
—
|
|
|
664
|
|
(1)
|
|||
FDA expense
|
|
|
19,252
|
|
|
18,856
|
|
|
|||
MSA expense, net of market share exemption
|
|
|
110,486
|
|
(2)
|
113,919
|
|
(3)
|
|||
|
Total cost of sales
|
|
|
$
|
672,431
|
|
|
$
|
697,900
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Real Estate Revenues:
|
|
|
|
||||
Commission and other brokerage income
|
$
|
641,051
|
|
|
$
|
601,937
|
|
Property management income
|
29,883
|
|
|
28,522
|
|
||
Title fees
|
4,324
|
|
|
4,616
|
|
||
Real estate held for sale
|
—
|
|
|
1,166
|
|
||
Sales on facilities primarily from Escena
|
4,844
|
|
|
5,165
|
|
||
Other
|
3
|
|
|
—
|
|
||
Total Real Estate revenues
|
$
|
680,105
|
|
|
$
|
641,406
|
|
|
|
|
|
||||
Real Estate Cost of Sales:
|
|
|
|
||||
Real estate agent commissions
|
$
|
420,317
|
|
|
$
|
405,678
|
|
Cost of sales on facilities primarily from Escena
|
3,833
|
|
|
3,866
|
|
||
Title fees
|
679
|
|
|
743
|
|
||
Total Real Estate cost of sales
|
$
|
424,829
|
|
|
$
|
410,287
|
|
|
(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 12/31/2017
|
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
|
%
|
$
|
13,467
|
|
$
|
—
|
|
$
|
13,467
|
|
$
|
—
|
|
TBD
|
|
|
N/A
|
|
|
1
|
|
R
|
N/A
|
N/A
|
Escena, net
|
Master planned community, golf course, restaurant and shop in Palm Springs, CA
|
March 2008
|
100
|
%
|
2,912
|
|
7,573
|
|
10,485
|
|
—
|
|
450
|
|
Acres
|
|
|
667
450 |
|
R Lots
H |
N/A
|
N/A
|
|||||
Investments in real estate, net
|
|
|
|
$
|
16,379
|
|
$
|
7,573
|
|
$
|
23,952
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
10 Madison Square West (1107 Broadway)
|
Flatiron District/NoMad neighborhood, Manhattan, NY
|
October 2011
|
5.0
|
%
|
$
|
(43,671
|
)
|
$
|
43,671
|
|
$
|
—
|
|
$
|
—
|
|
260,000
|
|
SF
|
20,000
|
|
SF
|
124
|
|
R
|
August 2012
|
Completed
|
The Marquand (11 East 68th Street)
|
Upper East Side, Manhattan, NY
|
December 2011
|
18.0
|
%
|
1,954
|
|
2,915
|
|
4,869
|
|
—
|
|
90,000
|
|
SF
|
—
|
|
|
29
|
|
R
|
June 2012
|
Completed
|
||||
11 Beach Street
|
TriBeCa, Manhattan, NY
|
June 2012
|
49.5
|
%
|
4,790
|
|
9,619
|
|
14,409
|
|
—
|
|
97,000
|
|
SF
|
—
|
|
|
27
|
|
R
|
May 2014
|
May 2018
|
||||
20 Times Square (701 Seventh Avenue)
|
Times Square, Manhattan, NY
|
August 2012
|
7.9
|
%
|
19,041
|
|
4,379
|
|
23,420
|
|
—
|
|
252,000
|
|
SF
|
80,000
|
|
SF
|
452
|
|
H
|
September 2013
|
August 2018
|
||||
111 Murray Street
|
TriBeCa, Manhattan, NY
|
May 2013
|
9.5
|
%
|
2,083
|
|
(958
|
)
|
1,125
|
|
—
|
|
330,000
|
|
SF
|
1,700
|
|
SF
|
157
|
|
R
|
September 2014
|
February 2019
|
||||
160 Leroy Street (2)
|
West Greenwich Village, Manhattan, NY
|
March 2013
|
3.1
|
%
|
1,114
|
|
3,246
|
|
4,360
|
|
—
|
|
130,000
|
|
SF
|
—
|
|
|
57
|
|
R
|
Fall 2015
|
March 2018
|
||||
215 Chrystie Street
|
Lower East Side, Manhattan, NY
|
December 2012
|
18.4
|
%
|
(1,683
|
)
|
1,683
|
|
—
|
|
—
|
|
246,000
|
|
SF
|
—
|
|
|
11
367 |
|
R
H |
June 2014
|
March 2018
|
||||
The Dutch (25-19 43rd Avenue)
|
Long Island City, NY
|
May 2014
|
9.9
|
%
|
980
|
|
285
|
|
1,265
|
|
|
65,000
|
|
SF
|
—
|
|
|
86
|
|
R
|
September 2014
|
April 2018
|
|||||
87 Park (8701 Collins Avenue)
|
Miami Beach, FL
|
December 2013
|
15.0
|
%
|
19,630
|
|
1,643
|
|
21,273
|
|
—
|
|
160,000
|
|
SF
|
TBD
|
|
|
70
|
|
R
|
October 2015
|
September 2019
|
||||
125 Greenwich Street (2)
|
Financial District, Manhattan, NY
|
August 2014
|
13.3
|
%
|
5,992
|
|
4,196
|
|
10,188
|
|
—
|
|
306,000
|
|
SF
|
16,000
|
|
SF
|
273
|
|
R
|
March 2015
|
February 2020
|
||||
West Hollywood Edition (9040 Sunset Boulevard)
|
West Hollywood, CA
|
October 2014
|
48.5
|
%
|
(1,552
|
)
|
578
|
|
(974
|
)
|
—
|
|
210,000
|
|
SF
|
—
|
|
|
20
190 |
|
R
H |
May 2015
|
November 2018
|
||||
The Eleventh (76 Eleventh Avenue)
|
West Chelsea, Manhattan, NY
|
May 2015
|
5.1
|
%
|
17,000
|
|
4,225
|
|
21,225
|
|
—
|
|
630,000
|
|
SF
|
85,000
|
|
SF
|
241
137 |
|
R
H |
September 2016
|
November 2019
|
||||
Monad Terrace
|
Miami Beach, FL
|
May 2015
|
18.0
|
%
|
7,635
|
|
829
|
|
8,464
|
|
—
|
|
160,000
|
|
SF
|
—
|
|
|
59
|
|
R
|
May 2016
|
September 2020
|
||||
Takanasee
|
Long Branch, NJ
|
December 2015
|
22.8
|
%
|
5,238
|
|
1,153
|
|
6,391
|
|
—
|
|
63,000
|
|
SF
|
—
|
|
|
13
|
|
R
|
June 2017
|
TBD
|
||||
New Brookland
|
Brooklyn, NY
|
April 2017
|
9.8
|
%
|
402
|
|
24
|
|
426
|
|
—
|
|
24,000
|
|
SF
|
—
|
|
|
33
|
|
R
|
August 2017
|
March 2019
|
||||
Dime
|
Brooklyn, NY
|
November 2017
|
19.8
|
%
|
8,650
|
|
58
|
|
8,708
|
|
$
|
—
|
|
100,000
|
|
SF
|
150,000
|
|
|
177
|
|
R
|
May 2017
|
September 2019
|
|||
Condominium and Mixed Use Development
|
|
|
|
$
|
47,603
|
|
$
|
77,546
|
|
$
|
125,149
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
1 QPS Tower (23-10 Queens Plaza South)
|
Long Island City, NY
|
December 2012
|
45.4
|
%
|
$
|
14,711
|
|
$
|
(3,801
|
)
|
$
|
10,910
|
|
$
|
—
|
|
260,000
|
|
SF
|
50,000
|
|
SF
|
391
|
|
R
|
March 2014
|
April 2018
|
ST Portfolio
|
|
November 2013
|
16.3
|
%
|
(1,383
|
)
|
1,640
|
|
257
|
|
—
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
N/A
|
||||
Maryland Portfolio
|
Primarily Baltimore County, MD
|
July 2012
|
7.6
|
%
|
910
|
|
(910
|
)
|
—
|
|
—
|
|
N/A
|
|
|
N/A
|
|
|
5,517
|
|
R
|
N/A
|
N/A
|
||||
Apartment Buildings
|
|
|
|
$
|
14,238
|
|
$
|
(3,071
|
)
|
$
|
11,167
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Park Lane Hotel
|
Central Park South, Manhattan, NY
|
November 2013
|
5.2
|
%
|
$
|
30,845
|
|
$
|
(11,229
|
)
|
$
|
19,616
|
|
—
|
|
446,000
|
|
SF
|
—
|
|
|
628
|
|
H
|
N/A
|
N/A
|
|
Coral Beach and Tennis Club
|
Coral Beach, Bermuda
|
December 2013
|
49.0
|
%
|
6,048
|
|
(3,248
|
)
|
2,800
|
|
—
|
|
52
|
|
Acres
|
—
|
|
|
101
|
|
H
|
N/A
|
N/A
|
||||
Hotels
|
|
|
|
$
|
36,893
|
|
$
|
(14,477
|
)
|
$
|
22,416
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
The Plaza at Harmon Meadow
|
Secaucus, NJ
|
March 2015
|
49.0
|
%
|
$
|
4,826
|
|
$
|
(2,389
|
)
|
$
|
2,437
|
|
$
|
—
|
|
—
|
|
—
|
219,000
|
|
SF
|
—
|
|
—
|
N/A
|
N /A
|
Wynn Las Vegas Retail
|
Las Vegas, NV
|
December 2016
|
1.9
|
%
|
15,238
|
|
404
|
|
15,642
|
|
—
|
|
—
|
|
—
|
160,000
|
|
SF
|
—
|
|
—
|
N/A
|
N/A
|
||||
Commercial
|
|
|
|
$
|
20,064
|
|
$
|
(1,985
|
)
|
$
|
18,079
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Witkoff GP Partners (3)
|
Multiple
|
March 2017
|
15.0
|
%
|
$
|
9,913
|
|
$
|
(109
|
)
|
$
|
9,804
|
|
$
|
4,800
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
N/A
|
Diverse Real Estate Portfolio
|
|
|
|
$
|
9,913
|
|
$
|
(109
|
)
|
$
|
9,804
|
|
$
|
4,800
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in real estate ventures
|
|
|
|
$
|
128,711
|
|
$
|
57,904
|
|
$
|
186,615
|
|
$
|
4,800
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Carrying Value
|
|
|
|
$
|
145,090
|
|
$
|
65,477
|
|
$
|
210,567
|
|
$
|
4,800
|
|
|
|
|
|
|
|
|
|
||||
_____________________________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(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 December 31, 2017, includes non-controlling interest of $2,018 and $1,755, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(3) The Witkoff GP Partner venture consisted of a $1,708 investment in 500 Broadway, a $7,600 investment in Fontainebleau Las Vegas, and a $496 investment in 1568 Broadway debt.
|
|||||||||||||||||||||||||||
N/A - Not applicable
|
SF - Square feet
|
H - Hotel rooms
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
TBD -To be determined
|
R - Residential Units
|
R Lots - Residential lots
|
|
|
|
|
|
|
|
|
|
|
|
Covenant
|
|
Indenture
Requirement
|
|
December 31,
2017 |
||||
Consolidated EBITDA, as defined
|
|
$
|
75,000
|
|
|
$
|
352,728
|
|
Leverage ratio, as defined
|
|
<3.0 to 1
|
|
|
2.02 to 1
|
|
||
Secured leverage ratio, as defined
|
|
<1.5 to 1
|
|
|
1.0 to 1
|
|
Contractual Obligations
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Notes payable, long-term debt and other obligations (1)
|
|
$
|
33,820
|
|
|
$
|
231,444
|
|
|
$
|
261,217
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
850,000
|
|
|
$
|
1,376,482
|
|
Operating leases (2)
|
|
31,436
|
|
|
31,774
|
|
|
26,664
|
|
|
24,783
|
|
|
21,594
|
|
|
118,216
|
|
|
254,467
|
|
|||||||
Inventory purchase commitments (3)
|
|
11,652
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,652
|
|
|||||||
Capital expenditure purchase commitments (4)
|
|
1,681
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,681
|
|
|||||||
Interest payments (5)
|
|
106,441
|
|
|
84,255
|
|
|
64,563
|
|
|
26,031
|
|
|
—
|
|
|
—
|
|
|
281,290
|
|
|||||||
Engle progeny settlements
|
|
—
|
|
|
—
|
|
|
3,426
|
|
|
3,426
|
|
|
3,426
|
|
|
20,556
|
|
|
30,834
|
|
|||||||
Total (6)
|
|
$
|
185,030
|
|
|
$
|
347,473
|
|
|
$
|
355,870
|
|
|
$
|
54,241
|
|
|
$
|
25,020
|
|
|
$
|
988,772
|
|
|
$
|
1,956,406
|
|
(1)
|
Notes payable, long-term debt and other obligations are shown before discount. For more information concerning our long-term debt, see “Liquidity and Capital Resources” above and Note 9 to our consolidated financial statements.
|
(2)
|
Operating lease obligations represent estimated lease payments for facilities and equipment. See Note 10 to our consolidated financial statements.
|
(3)
|
Inventory purchase commitments represent primarily purchase commitments under our leaf inventory management program. See Note 4 to our consolidated financial statements.
|
(4)
|
Capital expenditure purchase commitments represent purchase commitments for machinery and equipment at Liggett. See Note 5 to our consolidated financial statements.
|
(5)
|
Interest payments are based on current interest rates at December 31, 2017 and the assumption our current policy of a cash dividend of $0.40 per quarter and an annual 5% stock dividend will continue. For more information concerning our long-term debt, see “Liquidity and Capital Resources” above and Note 9 to our consolidated financial statements.
|
(6)
|
Because their future cash outflows are uncertain, the above table excludes our pension and post benefit plans unfunded obligations of $63,194 at December 31, 2017.
|
•
|
requires FDA to develop graphic warnings for cigarette packages, and grants FDA authority to require new warnings;
|
•
|
imposes new restrictions on the sale and distribution of tobacco products, including significant new restrictions on tobacco product advertising and promotion, as well as the use of brand and trade names;
|
•
|
bans the use of “light,” “mild,” “low” or similar descriptors on tobacco products;
|
•
|
bans the use of “characterizing flavors” in cigarettes other than tobacco or menthol;
|
•
|
gives FDA the authority to impose tobacco product standards that are appropriate for the protection of the public health (by, for example, requiring reduction or elimination of the use of particular constituents or components, requiring product testing, or addressing other aspects of tobacco product construction, constituents, properties or labeling);
|
•
|
requires manufacturers to obtain FDA review and authorization for the marketing of certain new or modified tobacco products which could ultimately result in FDA prohibiting Liggett from selling certain of its products;
|
•
|
requires pre-market approval by FDA for tobacco products represented (through labels, labeling, advertising, or other means) as presenting a lower risk of harm or tobacco-related disease;
|
•
|
requires manufacturers to report ingredients and harmful constituents and requires FDA to disclose certain constituent information to the public;
|
•
|
mandates that manufacturers test and report on ingredients and constituents identified by FDA as requiring such testing to protect the public health, and allows FDA to require the disclosure of testing results to the public;
|
•
|
requires manufacturers to submit to FDA certain information regarding the health, toxicological, behavioral or physiological effects of tobacco products;
|
•
|
prohibits use of tobacco containing a pesticide chemical residue at a level greater than allowed under federal law;
|
•
|
requires FDA to establish “good manufacturing practices” to be followed at tobacco manufacturing facilities;
|
•
|
requires tobacco product manufacturers (and certain other entities) to register with FDA;
|
•
|
authorizes FDA to require the reduction of nicotine (although it may not require the reduction of nicotine yields of a tobacco product to zero) and the potential reduction or elimination of other constituents, including menthol;
|
•
|
imposes (and allows FDA to impose) various recordkeeping and reporting requirements on tobacco product manufacturers; and
|
•
|
grants FDA broad regulatory authority to impose additional restrictions.
|
•
|
a recommendation on modified risk applications;
|
•
|
a recommendation on the effects of tobacco product nicotine yield alteration and whether there is a threshold level below which nicotine yields do not produce dependence;
|
•
|
a report on the public health impact of the use of menthol in cigarettes; and
|
•
|
a report on the public health impact of dissolvable tobacco products.
|
•
|
economic outlook,
|
•
|
capital expenditures,
|
•
|
cost reduction,
|
•
|
legislation and regulations,
|
•
|
cash flows,
|
•
|
operating performance,
|
•
|
litigation,
|
•
|
impairment charges and cost saving associated with restructurings of our tobacco operations, and
|
•
|
related industry developments (including trends affecting our business, financial condition and results of operations).
|
•
|
general economic and market conditions and any changes therein, due to acts of war and terrorism or otherwise,
|
•
|
governmental regulations and policies,
|
•
|
the impact of the Tax Act, including the deductibility of interest expense and the impact on the markets of our Real Estate segment,
|
•
|
effects of industry competition,
|
•
|
impact of business combinations, including acquisitions and divestitures, both internally for us and externally in the tobacco industry,
|
•
|
impact of legislation on our results of operations and product costs, i.e. the impact of federal legislation providing for regulation of tobacco products by FDA,
|
•
|
impact of substantial increases in federal, state and local excise taxes,
|
•
|
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,
|
•
|
potential additional payment obligations for us under the MSA and other settlement agreements with the states.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Schedule II — Valuation and Qualifying Accounts Page
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
* 3.1
|
|
Amended and Restated Certificate of Incorporation of Vector Group Ltd. (formerly known as Brooke Group Ltd.) (“Vector”) (incorporated by reference to Exhibit 3.1 in Vector’s Form 10-Q for the quarter ended September 30, 1999).
|
|
|
|
* 3.2
|
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Vector (incorporated by reference to Exhibit 3.1 in Vector’s Form 8-K dated May 24, 2000).
|
|
|
|
* 3.3
|
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Vector Group Ltd. (incorporated by reference to Exhibit 3.1 in Vector’s Form 10-Q for the quarter ended June 30, 2007).
|
|
|
|
* 3.4
|
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Vector Group Ltd. (incorporated by reference to Exhibit 3.1 in Vector’s Form 10-Q for the quarter ended June 30, 2014).
|
|
|
|
* 3.5
|
|
Amended and Restated By-Laws of Vector Group Ltd. (incorporated by reference to Exhibit 3.4 in Vector’s Form 8-K dated October 19, 2007).
|
|
|
|
* 4.1
|
|
Third Amended and Restated Loan and Security Agreement by and between Wells Fargo Bank, National Association, successor to Wachovia Bank, National Association as Lender, Liggett Group LLC as Borrower, and 100 Maple LLC, dated as of January 14, 2015 (incorporated by reference to Exhibit 4.4 of Vector’s Form 10-K for the year ended December 31, 2014).
|
|
|
|
* 4.2
|
|
Amendment No. 1 to Third Amended and Restated Credit Agreement, dated as of January 27, 2017, among Liggett Group LLC, 100 Maple LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to Vector’s Form 8-K dated January 27, 2017).
|
|
|
|
* 4.3
|
|
Share Lending Agreement, dated as of November 15, 2012, between Vector Group Ltd. and Jefferies & Company, Inc. (incorporated by reference to Exhibit 10.1 of Vector’s Form 8-K dated November 15, 2012).
|
|
|
|
* 4.4
|
|
Indenture, dated as of November 20, 2012, by and between Vector Group Ltd. and Wells Fargo Bank, N. A., as trustee, relating to the 7.5% Variable Interest Senior Convertible Notes due 2019 (incorporated by reference to Exhibit 4.1 of Vector’s Form 8-K dated November 20, 2012).
|
|
|
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
* 4.5
|
|
First Supplemental Indenture, dated as of November 20, 2012, to the Indenture dated November 20, 2012, by and between Vector Group Ltd. and Wells Fargo Bank, N. A., as trustee, relating to the 7.5% Variable Interest Senior Convertible Notes due 2019 (incorporated by reference to Exhibit 4.2 of Vector’s Form 8-K dated November 20, 2012).
|
|
|
|
* 4.6
|
|
Second Supplemental Indenture, dated as of March 24, 2014, to the Base Indenture, by and between Vector Group Ltd. and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 of Vector’s Form 8-K dated March 24, 2014).
|
|
|
|
* 4.7
|
|
Form of Global Note, relating to the 7.5% Variable Interest Senior Convertible Notes due 2019 (incorporated by reference to Exhibit 4.2 of Vector’s Form 8-K dated November 20, 2012).
|
|
|
|
* 4.8
|
|
Form of Global Note, relating to the 5.5% Variable Interest Senior Convertible Notes due 2020 (incorporated by reference to Exhibit 4.2 of Vector’s Form 8-K dated March 24, 2014).
|
|
|
|
* 4.9
|
|
Indenture, dated as of January 27, 2017, among Vector Group Ltd., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of Vector’s Form 8-K dated January 27, 2017).
|
|
|
|
* 4.10
|
|
Pledge Agreement, dated as of January 27, 2017, between VGR Holding LLC and U.S. Bank National Association, as collateral agent (incorporated by reference to Exhibit 4.2 of Vector’s Form 8-K dated January 27, 2017).
|
|
|
|
* 4.11
|
|
Security Agreement, dated as of January 27, 2017, by and between Vector Tobacco Inc. and U.S. Bank National Association, as collateral agent (incorporated by reference to Exhibit 4.3 of Vector’s Form 8-K dated January 27, 2017).
|
|
|
|
* 4.12
|
|
Security Agreement, dated as of January 27, 2017, among Liggett Group LLC, 100 Maple LLC and U.S. Bank National Association, as collateral agent (incorporated by reference to Exhibit 4.4 of Vector’s Form 8-K dated January 27, 2017).
|
|
|
|
* 4.13
|
|
Amended and Restated Intercreditor and Lien Subordination Agreement, dated as of January 27, 2017, among Liggett Group LLC, 100 Maple LLC, U.S. Bank National Association and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.5 of Vector’s Form 8-K dated January 27, 2017).
|
|
|
|
* 10.1
|
|
Settlement Agreement, dated March 15, 1996, by and among the State of West Virginia, State of Florida, State of Mississippi, Commonwealth of Massachusetts, and State of Louisiana, Brooke Group Holding and Liggett (incorporated by reference to Exhibit 15 in the Schedule 13D filed by Vector on March 11, 1996, as amended, with respect to the common stock of RJR Nabisco Holdings Corp.).
|
|
|
|
* 10.2
|
|
Addendum to Initial States Settlement Agreement (incorporated by reference to Exhibit 10.43 in Vector’s Form 10-Q for the quarter ended March 31, 1997).
|
|
|
|
* 10.3
|
|
Settlement Agreement, dated March 12, 1998, by and among the States listed in Appendix A thereto, Brooke Group Holding and Liggett (incorporated by reference to Exhibit 10.35 in Vector’s Form 10-K for the year ended December 31, 1997).
|
|
|
|
* 10.4
|
|
Master Settlement Agreement made by the Settling States and Participating Manufacturers signatories thereto (incorporated by reference to Exhibit 10.1 in Philip Morris Companies Inc.’s Form 8-K dated November 25, 1998, Commission File No. 1-8940).
|
|
|
|
* 10.5
|
|
General Liggett Replacement Agreement, dated as of November 23, 1998, entered into by each of the Settling States under the Master Settlement Agreement, and Brooke Group Holding and Liggett (incorporated by reference to Exhibit 10.34 in Vector’s Form 10-K for the year ended December 31, 1998).
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
* 10.6
|
|
Stipulation and Agreed Order regarding Stay of Execution Pending Review and Related Matters, dated May 7, 2001, entered into by Philip Morris Incorporated, Lorillard Tobacco Co., Liggett and Brooke Group Holding Inc. and the class counsel in Engel, et. al., v. R.J. Reynolds Tobacco Co., et. al. (incorporated by reference to Exhibit 99.2 in Philip Morris Companies Inc.’s Form 8-K dated May 7, 2001).
|
|
|
|
* 10.7
|
|
Term Sheet agreed to by Liggett, certain other Participating Manufacturers, 18 states, the District of Columbia and Puerto Rico (incorporated by reference to Exhibit 10.1 to Reynolds American Inc.’s (Commission File Number 1-32258) Form 8-K, dated March 12, 2013).
|
|
|
|
* 10.8
|
|
Settlement Agreement as of October 22, 2013, by, between and among: (a) Liggett and Vector and (b) Plaintiffs’ Coordinating Counsel, Participating Plaintiffs’ Counsel, and their respective clients who are plaintiffs in certain Engle Progeny Actions (incorporated by reference to Exhibit 10.18 to Vector’s Form 10-K for the year ended December 31, 2013).
|
|
|
|
* 10.9
|
|
Settlement Agreement as of October 22, 2013, by, between and among: (a) Liggett Group LLC and Vector, and (b) Plaintiffs’ Coordinating Counsel, The Wilner Firm, and The Wilner Firm’s clients who are plaintiffs in certain federal and state Engle Progeny Actions (incorporated by reference to Exhibit 10.19 to Vector’s Form 10-K for the year ended December 31, 2013).
|
|
|
|
* 10.10
|
|
Amended and Restated Employment Agreement dated as of January 27, 2006, between Vector and Howard M. Lorber (incorporated by reference to Exhibit 10.1 in Vector’s Form 8-K dated January 27, 2006).
|
|
|
|
* 10.11
|
|
Employment Agreement, dated as of January 27, 2006, between Vector and Richard J. Lampen (incorporated by reference to Exhibit 10.3 in Vector’s Form 8-K dated January 27, 2006).
|
|
|
|
* 10.12
|
|
Amendment to the Employment Agreement dated as of February 22, 2012 between Vector Group Ltd. and Richard J. Lampen (incorporated by reference to Exhibit 10.3 in Vector’s Form 8-K/A dated February 21, 2012).
|
|
|
|
* 10.13
|
|
Amended and Restated Employment Agreement, dated as of January 27, 2006, between Vector and Marc N. Bell (incorporated by reference to Exhibit 10.4 in Vector’s Form 8-K dated January 27, 2006).
|
|
|
|
* 10.14
|
|
Employment Agreement, dated as of November 11, 2005, between Liggett Group Inc. and Ronald J. Bernstein (incorporated by reference to Exhibit 10.1 in Vector’s Form 8-K dated November 11, 2005).
|
|
|
|
* 10.15
|
|
Amendment to Employment Agreement, dated as of January 14, 2011, between Liggett and Ronald J. Bernstein (incorporated by reference to Exhibit 10.17 in Vector’s Form 10-K for the year ended December 31, 2010).
|
|
|
|
* 10.16
|
|
Amendment to Employment Agreement, dated as of October 29, 2013, between Liggett and Ronald J. Bernstein (incorporated by reference to Exhibit 10.1 in Vector’s Form 8-K dated October 28, 2013).
|
|
|
|
* 10.17
|
|
Employment Agreement, dated as of January 27, 2006, between Vector and J. Bryant Kirkland III (incorporated by reference to Exhibit 10.5 in Vector’s Form 8-K dated January 27, 2006).
|
|
|
|
* 10.18
|
|
Amendment to Employment Agreement, dated as of February 29, 2016, by and between Vector Group Ltd. and J. Bryant Kirkland III (incorporated by reference to Exhibit 10.1 in Vector’s Form 8-K dated February 29, 2016).
|
|
|
|
* 10.19
|
|
Vector Group Ltd. Amended and Restated 1999 Long-Term Incentive Plan (incorporated by reference to Appendix B in Vector’s Proxy Statement dated April 21, 2004).
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
* 10.20
|
|
Vector Group Ltd. Management Incentive Plan (incorporated by reference to Exhibit 10.3 of Vector’s Form 8-K dated March 10, 2014).
|
|
|
|
|
Form of 1999 Amended and Restated Incentive Plan Option Agreement to Named Executive Officers.
|
|
|
|
|
|
Form of 2014 Management Incentive Plan Option Award to Named Executive Officers.
|
|
|
|
|
* 10.23
|
|
Restricted Share Award Agreement, dated as of October 28, 2013, between Vector Group Ltd. and Ronald J. Bernstein (incorporated by reference to Exhibit 10.42 to Vector’s Form 10-K for the year ended December 31, 2013).
|
|
|
|
* 10.24
|
|
Performance-Based Restricted Share Award Agreement, pursuant to Vector Group Ltd. Management Incentive Plan, dated as of July 23, 2014 by and between Vector Group Ltd. and Howard M. Lorber (incorporated by reference to Exhibit 10.6 of Schedule 13D as filed by Howard M. Lorber on July 25, 2014).
|
|
|
|
|
Performance-Based Restricted Share Award Agreement, pursuant to Vector Group Ltd. Management Incentive Plan, dated as of November 10, 2015 by and between Vector Group Ltd. and Howard M. Lorber (incorporated by reference to Exhibit 10.1 of Vector’s Form 8-K dated November 10, 2015).
|
|
|
|
|
* 10.26
|
|
Vector Supplemental Retirement Plan (as amended and restated April 24, 2008) (incorporated by reference to Exhibit 10.1 in Vector’s Form 10-Q for the quarter ended June 30, 2008).
|
|
|
|
* 10.27
|
|
Operating Agreement of Douglas Elliman Realty, LLC (formerly known as Montauk Battery Realty LLC) dated December 17, 2002 (incorporated by reference to Exhibit 10.1 in New Valley’s Form 8-K dated December 13, 2002).
|
|
|
|
* 10.28
|
|
First Amendment to Operating Agreement of Douglas Elliman Realty, LLC (formerly known as Montauk Battery Realty LLC), dated as of March 14, 2003 (incorporated by reference to Exhibit 10.1 in New Valley’s Form 10-Q for the quarter ended March 31, 2003).
|
|
|
|
* 10.29
|
|
Second Amendment to Operating Agreement of Douglas Elliman Realty, LLC, dated as of May 19, 2003 (incorporated by reference to Exhibit 10.1 in New Valley’s Form 10-Q for the quarter ended June 30, 2003).
|
|
|
|
* 10.30
|
|
Office Lease, dated as of September 10, 2012, between Vector Group Ltd. and Frost Real Estate Holdings, LLC. (incorporated by reference to Exhibit 10.1 in Vector’s Form 8-K dated September 10, 2012).
|
|
|
|
* 10.31
|
|
First Amendment, dated as of November 12, 2012, to Office Lease, dated as of September 10, 2012, between Vector Group Ltd. and Frost Real Estate Holdings, LLC. (incorporated by reference to Exhibit 10.40 of Vector’s Form 10-K dated December 31, 2012).
|
|
|
|
|
Second Amendment, dated as of September 1, 2017, to Office Lease, dated as of September 10, 2012, between Vector Group Ltd. and Frost Real Estate Holdings, LLC.
|
|
|
|
|
* 10.33
|
|
Vector Group Ltd. Equity Retention and Hedging Policy (incorporated by reference to Exhibit 10.1 of Vector’s Form 8-K dated January 15, 2013).
|
|
|
|
* 10.34
|
|
Vector Group Ltd. Stock Ownership Guidelines (incorporated by reference to Exhibit 10.1 of Vector’s Form 8-K dated March 10, 2014).
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
* 10.35
|
|
Vector Group Ltd. Executive Compensation Clawback Policy (incorporated by reference to Exhibit 10.2 of Vector’s Form 8-K dated March 10, 2014).
|
|
|
|
|
Computation of Ratio of Earnings to Fixed Charges for each of the five years within the period ended December 31, 2017.
|
|
|
|
|
|
Subsidiaries of Vector.
|
|
|
|
|
|
Consent of Deloitte & Touche LLP.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
Material Legal Proceedings.
|
*
|
Incorporated by reference
|
ITEM 16.
|
FORM 10-K SUMMARY.
|
|
|
VECTOR GROUP LTD.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ J. Bryant Kirkland III
|
|
|
|
J. Bryant Kirkland III
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
Date:
|
March 1, 2018
|
|
|
SIGNATURE
|
|
TITLE
|
|
|
|
/s/ Howard M. Lorber
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Howard M. Lorber
|
|
|
|
|
|
/s/ J. Bryant Kirkland III
|
|
Senior Vice President, Treasurer and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
J. Bryant Kirkland III
|
|
|
|
|
|
/s/ Bennett S. LeBow
|
|
Director
|
Bennett S. LeBow
|
|
|
|
|
|
/s/ Stanley S. Arkin
|
|
Director
|
Stanley S. Arkin
|
|
|
|
|
|
/s/ Henry C. Beinstein
|
|
Director
|
Henry C. Beinstein
|
|
|
|
|
|
/s/ Ronald J. Bernstein
|
|
Director
|
Ronald J. Bernstein
|
|
|
|
|
|
/s/ Jeffery S. Podell
|
|
Director
|
Jeffery S. Podell
|
|
|
|
|
|
/s/ Jean E. Sharpe
|
|
Director
|
Jean E. Sharpe
|
|
|
|
Page
|
|
|
|
|
FINANCIAL STATEMENTS:
|
|
|
Vector Group Ltd. Consolidated Financial Statements
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
|
Consolidated Statements of Operations for the year ended December 31, 2017, 2016 and 2015
|
|
|
Consolidated Statements of Comprehensive Income for the year ended December 31, 2017, 2016 and 2015
|
|
|
Consolidated Statements of Stockholders' Deficiency for the year ended December 31, 2017, 2016 and 2015
|
|
|
Consolidated Statements of Cash Flows for the year ended December 31, 2017, 2016 and 2015
|
|
|
Notes to Consolidated Financial Statements
|
|
|
FINANCIAL STATEMENT SCHEDULE:
|
|
|
Schedule II — Valuation and Qualifying Accounts
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
|
(Dollars in thousands, except per share amounts)
|
||||||
ASSETS:
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
301,353
|
|
|
$
|
393,530
|
|
Investment securities available for sale
|
150,489
|
|
|
156,903
|
|
||
Accounts receivable - trade, net
|
29,481
|
|
|
18,801
|
|
||
Inventories
|
89,790
|
|
|
89,834
|
|
||
Income taxes receivable, net
|
11,217
|
|
|
16,110
|
|
||
Restricted assets
|
10,258
|
|
|
7,330
|
|
||
Other current assets
|
21,121
|
|
|
22,955
|
|
||
Total current assets
|
613,709
|
|
|
705,463
|
|
||
Property, plant and equipment, net
|
85,516
|
|
|
80,448
|
|
||
Investments in real estate, net
|
23,952
|
|
|
23,640
|
|
||
Long-term investments
|
81,291
|
|
|
53,197
|
|
||
Investments in real estate ventures
|
188,131
|
|
|
221,258
|
|
||
Restricted assets
|
3,488
|
|
|
3,986
|
|
||
Goodwill and other intangible assets, net
|
267,708
|
|
|
261,918
|
|
||
Prepaid pension costs
|
27,697
|
|
|
22,273
|
|
||
Other assets
|
36,786
|
|
|
31,852
|
|
||
Total assets
|
$
|
1,328,278
|
|
|
$
|
1,404,035
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of notes payable and long-term debt
|
$
|
33,820
|
|
|
$
|
39,508
|
|
Current payments due under the Master Settlement Agreement
|
12,384
|
|
|
16,192
|
|
||
Current portion of employee benefits
|
952
|
|
|
937
|
|
||
Income taxes payable, net
|
100
|
|
|
—
|
|
||
Litigation accruals
|
260
|
|
|
3,659
|
|
||
Other current liabilities
|
157,123
|
|
|
135,852
|
|
||
Total current liabilities
|
204,639
|
|
|
196,148
|
|
||
Notes payable, long-term debt and other obligations, less current portion
|
1,194,244
|
|
|
1,132,943
|
|
||
Fair value of derivatives embedded within convertible debt
|
76,413
|
|
|
112,332
|
|
||
Non-current employee benefits
|
62,242
|
|
|
58,958
|
|
||
Deferred income taxes, net
|
58,801
|
|
|
93,085
|
|
||
Payments due under the Master Settlement Agreement
|
21,479
|
|
|
22,257
|
|
||
Litigation accruals
|
19,840
|
|
|
27,513
|
|
||
Other liabilities
|
22,380
|
|
|
14,071
|
|
||
Total liabilities
|
1,660,038
|
|
|
1,657,307
|
|
||
Commitments and contingencies (Notes 10 and 15)
|
|
|
|
||||
Stockholders' deficiency:
|
|
|
|
||||
Preferred stock, par value $1.00 per share, 10,000,000 shares authorized
|
—
|
|
|
—
|
|
||
Common stock, par value $0.10 per share, 250,000,000 shares authorized,134,365,424 and 127,739,481 shares issued and outstanding
|
13,437
|
|
|
12,774
|
|
||
Accumulated deficit
|
(414,785
|
)
|
|
(333,529
|
)
|
||
Accumulated other comprehensive loss
|
(12,571
|
)
|
|
(11,245
|
)
|
||
Total Vector Group Ltd. stockholders' deficiency
|
(413,919
|
)
|
|
(332,000
|
)
|
||
Non-controlling interest
|
82,159
|
|
|
78,728
|
|
||
Total stockholders' deficiency
|
(331,760
|
)
|
|
(253,272
|
)
|
||
Total liabilities and stockholders' deficiency
|
$
|
1,328,278
|
|
|
$
|
1,404,035
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Dollars in thousands, except per share amounts)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Tobacco*
|
$
|
1,080,950
|
|
|
$
|
1,011,620
|
|
|
$
|
1,017,761
|
|
Real estate
|
727,364
|
|
|
680,105
|
|
|
641,406
|
|
|||
E-cigarettes
|
(838
|
)
|
|
(776
|
)
|
|
(1,970
|
)
|
|||
Total revenues
|
1,807,476
|
|
|
1,690,949
|
|
|
1,657,197
|
|
|||
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
||||
Cost of sales:
|
|
|
|
|
|
||||||
Tobacco*
|
750,768
|
|
|
672,431
|
|
|
697,900
|
|
|||
Real estate
|
477,278
|
|
|
424,829
|
|
|
410,287
|
|
|||
E-cigarettes
|
—
|
|
|
84
|
|
|
1,540
|
|
|||
Total cost of sales
|
1,228,046
|
|
|
1,097,344
|
|
|
1,109,727
|
|
|||
|
|
|
|
|
|
||||||
Operating, selling, administrative and general expenses
|
339,151
|
|
|
340,567
|
|
|
320,221
|
|
|||
Litigation settlement and judgment expense
|
6,591
|
|
|
20,000
|
|
|
20,072
|
|
|||
Restructuring charges
|
—
|
|
|
41
|
|
|
7,257
|
|
|||
Operating income
|
233,688
|
|
|
232,997
|
|
|
199,920
|
|
|||
|
|
|
|
|
|
||||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
(173,685
|
)
|
|
(142,982
|
)
|
|
(120,691
|
)
|
|||
Loss on extinguishment of debt
|
(34,110
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of derivatives embedded within convertible debt
|
35,919
|
|
|
31,710
|
|
|
24,455
|
|
|||
Equity in losses from investments
|
(765
|
)
|
|
(2,754
|
)
|
|
(2,681
|
)
|
|||
Gain on sale of investment securities available for sale
|
169
|
|
|
2,907
|
|
|
11,138
|
|
|||
Equity in earnings from real estate ventures
|
21,395
|
|
|
5,200
|
|
|
2,001
|
|
|||
Impairment of investment securities available for sale
|
(465
|
)
|
|
(5,381
|
)
|
|
(12,846
|
)
|
|||
Other, net
|
7,022
|
|
|
4,732
|
|
|
6,409
|
|
|||
Income before provision for income taxes
|
89,168
|
|
|
126,429
|
|
|
107,705
|
|
|||
Income tax (benefit) expense
|
(1,582
|
)
|
|
49,163
|
|
|
41,233
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
90,750
|
|
|
77,266
|
|
|
66,472
|
|
|||
|
|
|
|
|
|
||||||
Net income attributed to non-controlling interest
|
(6,178
|
)
|
|
(6,139
|
)
|
|
(7,274
|
)
|
|||
|
|
|
|
|
|
||||||
Net income attributed to Vector Group Ltd.
|
$
|
84,572
|
|
|
$
|
71,127
|
|
|
$
|
59,198
|
|
|
|
|
|
|
|
||||||
Per basic common share:
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
||||||
Net income applicable to common share attributed to Vector Group Ltd.
|
$
|
0.59
|
|
|
$
|
0.53
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
||||||
Per diluted common share:
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||||
Net income applicable to common share attributed to Vector Group Ltd.
|
$
|
0.59
|
|
|
$
|
0.53
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
||||||
Cash distributions declared per share
|
$
|
1.54
|
|
|
$
|
1.47
|
|
|
$
|
1.40
|
|
*
|
Revenues and cost of sales include federal excise taxes of $460,561, $425,980 and $439,647 for the years ended December 31, 2017, 2016 and 2015, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net income
|
$
|
90,750
|
|
|
$
|
77,266
|
|
|
$
|
66,472
|
|
|
|
|
|
|
|
||||||
Net unrealized losses on investment securities available for sale:
|
|
|
|
|
|
||||||
Change in net unrealized losses
|
(6,655
|
)
|
|
(6,139
|
)
|
|
(12,710
|
)
|
|||
Net unrealized losses reclassified into net income
|
296
|
|
|
2,474
|
|
|
1,708
|
|
|||
Net unrealized losses on investment securities available for sale
|
(6,359
|
)
|
|
(3,665
|
)
|
|
(11,002
|
)
|
|||
|
|
|
|
|
|
||||||
Net unrealized gains on long-term investments accounted for under the equity method:
|
|
|
|
|
|
||||||
Change in net unrealized gains
|
—
|
|
|
—
|
|
|
1,190
|
|
|||
Net unrealized losses reclassified into net income
|
—
|
|
|
—
|
|
|
1,624
|
|
|||
Net unrealized gains on long-term investments accounted for under the equity method
|
—
|
|
|
—
|
|
|
2,814
|
|
|||
|
|
|
|
|
|
||||||
Net change in forward contracts
|
2
|
|
|
28
|
|
|
61
|
|
|||
|
|
|
|
|
|
||||||
Net change in pension-related amounts
|
|
|
|
|
|
||||||
Net gain (loss) arising during the year
|
1,768
|
|
|
(3,064
|
)
|
|
(8,620
|
)
|
|||
Amortization of loss
|
1,955
|
|
|
1,780
|
|
|
4,200
|
|
|||
Net change in pension-related amounts
|
3,723
|
|
|
(1,284
|
)
|
|
(4,420
|
)
|
|||
|
|
|
|
|
|
||||||
Other comprehensive loss
|
(2,634
|
)
|
|
(4,921
|
)
|
|
(12,547
|
)
|
|||
|
|
|
|
|
|
||||||
Income tax effect on:
|
|
|
|
|
|
||||||
Change in net unrealized losses on investment securities
|
2,707
|
|
|
2,490
|
|
|
5,650
|
|
|||
Net unrealized losses reclassified into net income on investment securities
|
(120
|
)
|
|
(1,004
|
)
|
|
(702
|
)
|
|||
Change in unrealized gains on long-term investments accounted for under the equity method
|
—
|
|
|
—
|
|
|
(484
|
)
|
|||
Net unrealized losses reclassified into net income on long-term investments accounted for under the equity method
|
—
|
|
|
—
|
|
|
(672
|
)
|
|||
Forward contracts
|
—
|
|
|
(11
|
)
|
|
(25
|
)
|
|||
Pension-related amounts
|
(1,279
|
)
|
|
514
|
|
|
1,810
|
|
|||
Income tax benefit on other comprehensive loss
|
1,308
|
|
|
1,989
|
|
|
5,577
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive loss, net of tax
|
(1,326
|
)
|
|
(2,932
|
)
|
|
(6,970
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
89,424
|
|
|
74,334
|
|
|
59,502
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income attributed to non-controlling interest
|
(6,178
|
)
|
|
(6,139
|
)
|
|
(7,274
|
)
|
|||
Comprehensive income attributed to Vector Group Ltd.
|
$
|
83,246
|
|
|
$
|
68,195
|
|
|
$
|
52,228
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Non-controlling Interest
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
Total
|
||||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||
Balance, January 1, 2015
|
114,501,014
|
|
|
$
|
11,450
|
|
|
$
|
—
|
|
|
$
|
(97,009
|
)
|
|
$
|
(1,343
|
)
|
|
$
|
(12,857
|
)
|
|
$
|
79,079
|
|
|
$
|
(20,680
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
59,198
|
|
|
—
|
|
|
—
|
|
|
7,274
|
|
|
66,472
|
|
|||||||
Change in net loss and prior service cost, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,610
|
)
|
|
—
|
|
|
—
|
|
|
(2,610
|
)
|
|||||||
Forward contract adjustments, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||||
Unrealized loss on long-term investment securities accounted for under the equity method, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,658
|
|
|
—
|
|
|
—
|
|
|
1,658
|
|
|||||||
Change in net unrealized loss on investment securities, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,060
|
)
|
|
—
|
|
|
—
|
|
|
(7,060
|
)
|
|||||||
Net unrealized loss reclassified into net income, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,006
|
|
|
—
|
|
|
—
|
|
|
1,006
|
|
|||||||
Unrealized loss on investment securities, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,054
|
)
|
|||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,970
|
)
|
|||||||
Total comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
59,502
|
|
|||||||
Distributions and dividends on common stock
|
—
|
|
|
—
|
|
|
(18,120
|
)
|
|
(171,718
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(189,838
|
)
|
|||||||
Restricted stock grant
|
1,200,000
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|||||||
Surrender of shares in connection with restricted stock vesting
|
(83,411
|
)
|
|
(8
|
)
|
|
(2,075
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,083
|
)
|
|||||||
Effect of stock dividend
|
5,837,144
|
|
|
584
|
|
|
—
|
|
|
(584
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Note conversion, net of income taxes of $367
|
2,227,552
|
|
|
223
|
|
|
25,299
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,522
|
|
|||||||
Exercise of stock options
|
110,030
|
|
|
10
|
|
|
1,311
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,321
|
|
|||||||
Cancellation of treasury shares
|
—
|
|
|
—
|
|
|
(12,857
|
)
|
|
—
|
|
|
—
|
|
|
12,857
|
|
|
—
|
|
|
—
|
|
|||||||
Tax benefit of options exercised
|
—
|
|
|
—
|
|
|
821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
821
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
5,621
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,621
|
|
|||||||
Contributions from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
813
|
|
|
813
|
|
|||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,280
|
)
|
|
(3,280
|
)
|
|||||||
Balance, December 31, 2015
|
123,792,329
|
|
|
12,379
|
|
|
—
|
|
|
(210,113
|
)
|
|
(8,313
|
)
|
|
—
|
|
|
83,886
|
|
|
(122,161
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
71,127
|
|
|
—
|
|
|
—
|
|
|
6,139
|
|
|
77,266
|
|
|||||||
Change in net loss and prior service cost, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(770
|
)
|
|
—
|
|
|
—
|
|
|
(770
|
)
|
|||||||
Forward contract adjustments, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||||
Change in net unrealized loss on investment securities, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,629
|
)
|
|
—
|
|
|
—
|
|
|
(3,629
|
)
|
|||||||
Net unrealized loss reclassified into net income, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,450
|
|
|
—
|
|
|
—
|
|
|
1,450
|
|
|||||||
Unrealized loss on investment securities, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,179
|
)
|
|||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
(2,932
|
)
|
|||||||
Total comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,334
|
|
|||||||
Distributions and dividends on common stock
|
—
|
|
|
—
|
|
|
(7,173
|
)
|
|
(193,934
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(201,107
|
)
|
|||||||
Restricted stock grant
|
50,000
|
|
|
5
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Surrender of shares in connection with restricted stock vesting
|
(187,577
|
)
|
|
(18
|
)
|
|
(4,034
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,052
|
)
|
|||||||
Effect of stock dividend
|
6,087,035
|
|
|
609
|
|
|
—
|
|
|
(609
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Cancellation of shares under share lending agreement
|
(2,034,212
|
)
|
|
(204
|
)
|
|
204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options
|
31,906
|
|
|
3
|
|
|
395
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
398
|
|
|||||||
Tax benefit of options exercised
|
—
|
|
|
—
|
|
|
579
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
579
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
10,034
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,034
|
|
|||||||
Contributions from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248
|
|
|
248
|
|
|||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,545
|
)
|
|
(11,545
|
)
|
|||||||
Balance, December 31, 2016
|
127,739,481
|
|
|
12,774
|
|
|
—
|
|
|
(333,529
|
)
|
|
(11,245
|
)
|
|
—
|
|
|
78,728
|
|
|
(253,272
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
84,572
|
|
|
—
|
|
|
—
|
|
|
6,178
|
|
|
90,750
|
|
|||||||
Change in net loss and prior service cost, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,444
|
|
|
—
|
|
|
—
|
|
|
2,444
|
|
|||||||
Forward contract adjustments, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Change in net unrealized loss on investment securities, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,948
|
)
|
|
—
|
|
|
—
|
|
|
(3,948
|
)
|
|||||||
Net unrealized loss reclassified into net income, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|||||||
Unrealized loss on investment securities, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,772
|
)
|
|||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,326
|
)
|
|||||||
Total comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89,424
|
|
|||||||
Distributions and dividends on common stock
|
—
|
|
|
—
|
|
|
(49,998
|
)
|
|
(165,184
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(215,182
|
)
|
|||||||
Surrender of shares in connection with restricted stock vesting
|
(191,967
|
)
|
|
(19
|
)
|
|
(4,081
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,100
|
)
|
|||||||
Effect of stock dividend
|
6,436,512
|
|
|
644
|
|
|
—
|
|
|
(644
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Cancellation of shares under share lending agreement
|
(1,618,602
|
)
|
|
(162
|
)
|
|
162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of common stock
|
2,000,000
|
|
|
200
|
|
|
43,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,230
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
10,887
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,887
|
|
|||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,747
|
)
|
|
(2,747
|
)
|
|||||||
Balance, December 31, 2017
|
134,365,424
|
|
|
$
|
13,437
|
|
|
$
|
—
|
|
|
$
|
(414,785
|
)
|
|
$
|
(12,571
|
)
|
|
$
|
—
|
|
|
$
|
82,159
|
|
|
$
|
(331,760
|
)
|
VECTOR GROUP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
|
|||||||||||
|
|
|
|
|
|
||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Dollars in thousands)
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Sale of investment securities
|
$
|
28,761
|
|
|
$
|
116,070
|
|
|
$
|
270,576
|
|
Maturities of investment securities
|
101,097
|
|
|
10,822
|
|
|
5,491
|
|
|||
Purchase of investment securities
|
(132,654
|
)
|
|
(117,211
|
)
|
|
(214,146
|
)
|
|||
Proceeds from sale or liquidation of long-term investments
|
966
|
|
|
4,552
|
|
|
1,303
|
|
|||
Purchase of long-term investments
|
(32,510
|
)
|
|
(50
|
)
|
|
(10,000
|
)
|
|||
(Increase) decrease in restricted assets
|
(2,286
|
)
|
|
10,181
|
|
|
(6,889
|
)
|
|||
Investments in real estate ventures
|
(38,807
|
)
|
|
(44,107
|
)
|
|
(70,272
|
)
|
|||
Distributions from real estate ventures
|
61,718
|
|
|
33,204
|
|
|
17,563
|
|
|||
Issuance of notes receivable
|
(1,633
|
)
|
|
—
|
|
|
(4,410
|
)
|
|||
Proceeds from sale of fixed assets
|
76
|
|
|
45
|
|
|
4
|
|
|||
Capital expenditures
|
(19,869
|
)
|
|
(26,691
|
)
|
|
(10,977
|
)
|
|||
Increase in cash surrender value of life insurance policies
|
(802
|
)
|
|
(484
|
)
|
|
(1,742
|
)
|
|||
Purchase of subsidiaries
|
(6,569
|
)
|
|
(250
|
)
|
|
—
|
|
|||
Repayment of notes receivable
|
—
|
|
|
4,410
|
|
|
4,000
|
|
|||
Pay down of investment securities
|
2,633
|
|
|
9,212
|
|
|
8,739
|
|
|||
Proceeds from sale of preferred securities
|
—
|
|
|
—
|
|
|
1,000
|
|
|||
Investments in real estate, net
|
(619
|
)
|
|
(245
|
)
|
|
(12,603
|
)
|
|||
Net cash used in investing activities
|
(40,498
|
)
|
|
(542
|
)
|
|
(22,363
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of debt
|
850,021
|
|
|
243,620
|
|
|
2,105
|
|
|||
Repayments of debt
|
(837,205
|
)
|
|
(5,365
|
)
|
|
(6,684
|
)
|
|||
Deferred financing costs
|
(19,200
|
)
|
|
(6,600
|
)
|
|
(624
|
)
|
|||
Borrowings under revolver
|
157,630
|
|
|
144,294
|
|
|
153,361
|
|
|||
Repayments on revolver
|
(163,474
|
)
|
|
(110,614
|
)
|
|
(167,915
|
)
|
|||
Dividends and distributions on common stock
|
(211,488
|
)
|
|
(198,947
|
)
|
|
(188,151
|
)
|
|||
Distributions to non-controlling interest
|
(2,779
|
)
|
|
(11,545
|
)
|
|
(3,280
|
)
|
|||
Contributions from non-controlling interest
|
—
|
|
|
248
|
|
|
813
|
|
|||
Proceeds from the issuance of Vector stock
|
43,230
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of Vector options
|
—
|
|
|
398
|
|
|
1,441
|
|
|||
Tax benefit of options exercised
|
—
|
|
|
579
|
|
|
821
|
|
|||
Net cash (used in) provided by financing activities
|
(183,265
|
)
|
|
56,068
|
|
|
(208,113
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(92,177
|
)
|
|
153,162
|
|
|
(85,997
|
)
|
|||
Cash and cash equivalents, beginning of year
|
393,530
|
|
|
240,368
|
|
|
326,365
|
|
|||
Cash and cash equivalents, end of year
|
$
|
301,353
|
|
|
$
|
393,530
|
|
|
$
|
240,368
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Net unrealized gains on investment securities available for sale, net of income taxes of $3,687, $6,272, and $7,758, respectively
|
$
|
6,097
|
|
|
$
|
9,869
|
|
|
$
|
12,048
|
|
Forward contracts adjustment, net of income taxes of $0, $0, and $11, respectively
|
—
|
|
|
(2
|
)
|
|
(19
|
)
|
|||
Pension-related amounts, net of income taxes of $13,212, $14,491, and $13,977, respectively
|
(18,668
|
)
|
|
(21,112
|
)
|
|
(20,342
|
)
|
|||
Accumulated other comprehensive loss
|
$
|
(12,571
|
)
|
|
$
|
(11,245
|
)
|
|
$
|
(8,313
|
)
|
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Interest and dividend income
|
$
|
7,391
|
|
|
$
|
6,018
|
|
|
$
|
7,038
|
|
Impairment of real estate, net
|
—
|
|
|
—
|
|
|
(230
|
)
|
|||
Loss on sale of assets
|
—
|
|
|
—
|
|
|
(78
|
)
|
|||
Gain on long-term investment
|
162
|
|
|
190
|
|
|
390
|
|
|||
Impairment of long-term investments
|
(525
|
)
|
|
(1,203
|
)
|
|
(811
|
)
|
|||
Other (expense) income
|
(6
|
)
|
|
(273
|
)
|
|
100
|
|
|||
Other, net
|
$
|
7,022
|
|
|
$
|
4,732
|
|
|
$
|
6,409
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Accounts payable
|
$
|
18,552
|
|
|
$
|
10,573
|
|
Accrued promotional expenses
|
30,691
|
|
|
23,763
|
|
||
Accrued excise and payroll taxes payable, net
|
11,946
|
|
|
10,044
|
|
||
Accrued interest
|
33,138
|
|
|
35,449
|
|
||
Commissions payable
|
14,320
|
|
|
6,164
|
|
||
Accrued salaries and benefits
|
29,639
|
|
|
26,958
|
|
||
Other current liabilities
|
18,837
|
|
|
22,901
|
|
||
Total other current liabilities
|
$
|
157,123
|
|
|
$
|
135,852
|
|
2.
|
EARNINGS PER SHARE
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income attributed to Vector Group Ltd.
|
$
|
84,572
|
|
|
$
|
71,127
|
|
|
$
|
59,198
|
|
Income attributable to participating securities
|
(6,071
|
)
|
|
(2,241
|
)
|
|
(1,752
|
)
|
|||
Net income available to common stockholders attributed to Vector Group Ltd.
|
$
|
78,501
|
|
|
$
|
68,886
|
|
|
$
|
57,446
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Weighted-average shares for basic EPS
|
132,414,514
|
|
|
130,233,375
|
|
|
129,830,993
|
|
Plus incremental shares related to stock options and non-vested restricted stock
|
258,337
|
|
|
239,180
|
|
|
35,314
|
|
Weighted-average shares for diluted EPS
|
132,672,851
|
|
|
130,472,555
|
|
|
129,866,307
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Weighted-average number of shares issuable upon conversion of debt
|
27,447,263
|
|
|
27,447,263
|
|
|
27,687,469
|
|
|||
Weighted-average conversion price
|
$
|
17.81
|
|
|
$
|
17.81
|
|
|
$
|
17.73
|
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Marketable equity securities
|
$
|
35,020
|
|
|
$
|
10,994
|
|
|
$
|
(1,380
|
)
|
|
$
|
44,634
|
|
Mutual funds invested in fixed income securities
|
20,977
|
|
|
93
|
|
|
(29
|
)
|
|
21,041
|
|
||||
Marketable debt securities
|
84,708
|
|
|
106
|
|
|
—
|
|
|
84,814
|
|
||||
Total investment securities available for sale
|
$
|
140,705
|
|
|
$
|
11,193
|
|
|
$
|
(1,409
|
)
|
|
$
|
150,489
|
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Marketable equity securities
|
$
|
34,956
|
|
|
$
|
16,141
|
|
|
$
|
(254
|
)
|
|
$
|
50,843
|
|
Mutual funds invested in fixed income securities
|
20,507
|
|
|
81
|
|
|
(6
|
)
|
|
20,582
|
|
||||
Marketable debt securities
|
85,297
|
|
|
181
|
|
|
—
|
|
|
85,478
|
|
||||
Total investment securities available for sale
|
$
|
140,760
|
|
|
$
|
16,403
|
|
|
$
|
(260
|
)
|
|
$
|
156,903
|
|
Investment Type:
|
Fair Value
|
|
Under 1 Year
|
|
1 Year up to 5 Years
|
|
More than 5 Years
|
||||||||
U.S. Government securities
|
$
|
28,502
|
|
|
$
|
—
|
|
|
$
|
28,502
|
|
|
$
|
—
|
|
Corporate securities
|
41,329
|
|
|
8,854
|
|
|
32,475
|
|
|
—
|
|
||||
U.S. mortgage-backed securities
|
4,564
|
|
|
—
|
|
|
18
|
|
|
4,546
|
|
||||
Commercial mortgage-backed securities
|
426
|
|
|
—
|
|
|
—
|
|
|
426
|
|
||||
Commercial paper
|
7,027
|
|
|
7,027
|
|
|
—
|
|
|
—
|
|
||||
Index-linked U.S. bonds
|
2,316
|
|
|
—
|
|
|
2,316
|
|
|
—
|
|
||||
Foreign fixed-income securities
|
650
|
|
|
—
|
|
|
650
|
|
|
—
|
|
||||
Total marketable debt securities by maturity dates
|
$
|
84,814
|
|
|
$
|
15,881
|
|
|
$
|
63,961
|
|
|
$
|
4,972
|
|
|
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
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketable equity securities
|
$
|
9,523
|
|
|
$
|
(1,380
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,523
|
|
|
$
|
(1,380
|
)
|
Mutual funds invested in fixed-income securities
|
10,483
|
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
10,483
|
|
|
(29
|
)
|
||||||
|
$
|
20,006
|
|
|
$
|
(1,409
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,006
|
|
|
$
|
(1,409
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketable equity securities
|
$
|
5,746
|
|
|
$
|
(254
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,746
|
|
|
$
|
(254
|
)
|
Mutual funds invested in fixed-income securities
|
10,253
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
10,253
|
|
|
(6
|
)
|
||||||
|
$
|
15,999
|
|
|
$
|
(260
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,999
|
|
|
$
|
(260
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Gross realized gains on sales
|
|
$
|
479
|
|
|
$
|
3,408
|
|
|
$
|
13,727
|
|
Gross realized losses on sales
|
|
(310
|
)
|
|
(501
|
)
|
|
(2,589
|
)
|
|||
Gains on sale of investment securities available for sale
|
|
$
|
169
|
|
|
$
|
2,907
|
|
|
$
|
11,138
|
|
|
|
|
|
|
|
|
||||||
Other-than-temporary impairments
|
|
$
|
(465
|
)
|
|
$
|
(5,381
|
)
|
|
$
|
(12,846
|
)
|
|
|
|
|
|
|
|
4.
|
INVENTORIES
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Leaf tobacco
|
$
|
45,801
|
|
|
$
|
46,253
|
|
Other raw materials
|
3,272
|
|
|
3,733
|
|
||
Work-in-process
|
358
|
|
|
633
|
|
||
Finished goods
|
63,363
|
|
|
65,052
|
|
||
Inventories at current cost
|
112,794
|
|
|
115,671
|
|
||
LIFO adjustments
|
(23,004
|
)
|
|
(25,837
|
)
|
||
|
$
|
89,790
|
|
|
$
|
89,834
|
|
5.
|
PROPERTY, PLANT AND EQUIPMENT
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Land and improvements
|
$
|
1,442
|
|
|
$
|
1,442
|
|
Buildings
|
16,280
|
|
|
16,010
|
|
||
Machinery and equipment
|
190,983
|
|
|
184,623
|
|
||
Leasehold improvements
|
45,760
|
|
|
32,419
|
|
||
|
254,465
|
|
|
234,494
|
|
||
Less accumulated depreciation and amortization
|
(168,949
|
)
|
|
(154,046
|
)
|
||
|
$
|
85,516
|
|
|
$
|
80,448
|
|
6.
|
LONG-TERM INVESTMENTS
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Investments accounted at cost
|
$
|
65,450
|
|
|
$
|
35,476
|
|
Investments accounted under the equity method
|
15,841
|
|
|
17,721
|
|
||
|
$
|
81,291
|
|
|
$
|
53,197
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Investment partnerships
|
$
|
65,450
|
|
|
$
|
74,111
|
|
|
$
|
34,975
|
|
|
$
|
40,569
|
|
Real estate partnership
|
—
|
|
|
—
|
|
|
501
|
|
|
494
|
|
||||
|
$
|
65,450
|
|
|
$
|
74,111
|
|
|
$
|
35,476
|
|
|
$
|
41,063
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Indian Creek Investors LP (“Indian Creek”)
|
$
|
4,498
|
|
|
$
|
5,248
|
|
Boyar Value Fund (“Boyar”)
|
9,026
|
|
|
7,816
|
|
||
Ladenburg Thalmann Financial Services Inc. (“LTS”)
|
2,317
|
|
|
4,657
|
|
||
Castle Brands, Inc. (“Castle”)
|
—
|
|
|
—
|
|
||
|
$
|
15,841
|
|
|
$
|
17,721
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Investment securities
|
$
|
48,050
|
|
|
$
|
67,546
|
|
Cash and cash equivalents
|
1,719
|
|
|
33
|
|
||
Other assets
|
74
|
|
|
28
|
|
||
Total assets
|
$
|
49,843
|
|
|
$
|
67,607
|
|
|
|
|
|
||||
Other liabilities
|
$
|
3,007
|
|
|
$
|
17,216
|
|
Total liabilities
|
3,007
|
|
|
17,216
|
|
||
Partners’ capital
|
46,836
|
|
|
50,391
|
|
||
Total liabilities and partners’ capital
|
$
|
49,843
|
|
|
$
|
67,607
|
|
|
Year Ended
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Investment income
|
$
|
792
|
|
|
$
|
438
|
|
|
$
|
565
|
|
Expenses
|
690
|
|
|
684
|
|
|
868
|
|
|||
Net investment gain (loss)
|
102
|
|
|
(246
|
)
|
|
(303
|
)
|
|||
Total net realized gain (loss) and net change in unrealized depreciation from investments
|
100
|
|
|
3,341
|
|
|
(14,809
|
)
|
|||
Net increase (decrease) in partners’ capital resulting from operations
|
$
|
202
|
|
|
$
|
3,095
|
|
|
$
|
(15,112
|
)
|
|
September 30,
2017 |
|
September 30,
2016 |
||||
Cash and cash equivalents
|
$
|
100,739
|
|
|
$
|
105,989
|
|
Receivables from clearing brokers, note receivable and other receivable, net
|
139,497
|
|
|
115,887
|
|
||
Goodwill and intangible assets, net
|
233,007
|
|
|
251,411
|
|
||
Other assets
|
79,372
|
|
|
70,469
|
|
||
Total assets
|
$
|
552,615
|
|
|
$
|
543,756
|
|
|
|
|
|
||||
Accrued compensation, commissions and fees payable
|
$
|
90,991
|
|
|
$
|
76,191
|
|
Accounts payable and accrued liabilities
|
42,895
|
|
|
37,189
|
|
||
Notes payable, net of $535 and $1,001 unamortized discount in 2017 and 2016, respectively
|
28,182
|
|
|
48,364
|
|
||
Other liabilities
|
31,718
|
|
|
30,716
|
|
||
Total liabilities
|
193,786
|
|
|
192,460
|
|
||
Preferred stock
|
2
|
|
|
1
|
|
||
Common stock
|
20
|
|
|
19
|
|
||
Additional paid-in capital
|
515,208
|
|
|
509,335
|
|
||
Accumulated deficit
|
(156,423
|
)
|
|
(158,055
|
)
|
||
Total controlling shareholders’ equity
|
358,807
|
|
|
351,300
|
|
||
Non-controlling interest
|
22
|
|
|
(4
|
)
|
||
Total shareholders’ equity
|
358,829
|
|
|
351,296
|
|
||
Total liabilities and shareholders’ equity
|
$
|
552,615
|
|
|
$
|
543,756
|
|
|
Twelve Months Ended
September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
1,221,195
|
|
|
$
|
1,104,227
|
|
|
$
|
1,122,735
|
|
Expenses
|
1,217,331
|
|
|
1,119,366
|
|
|
1,132,010
|
|
|||
Income (loss) before other items
|
3,864
|
|
|
(15,139
|
)
|
|
(9,275
|
)
|
|||
Change in fair value of contingent consideration
|
48
|
|
|
(154
|
)
|
|
31
|
|
|||
Income (loss) from continuing operations
|
3,912
|
|
|
(15,293
|
)
|
|
(9,244
|
)
|
|||
Net income (loss)
|
$
|
1,669
|
|
|
$
|
(25,159
|
)
|
|
$
|
4,396
|
|
|
September 30,
2017 |
|
September 30,
2016 |
||||
Current assets
|
$
|
49,328
|
|
|
$
|
42,285
|
|
Non-current assets
|
8,783
|
|
|
9,085
|
|
||
Total assets
|
$
|
58,111
|
|
|
$
|
51,370
|
|
|
|
|
|
||||
Current liabilities
|
$
|
17,586
|
|
|
$
|
12,583
|
|
Non-current liabilities
|
35,296
|
|
|
15,215
|
|
||
Total liabilities
|
52,882
|
|
|
27,798
|
|
||
Total controlling shareholders’ equity
|
2,386
|
|
|
19,838
|
|
||
Non-controlling interest
|
2,843
|
|
|
3,734
|
|
||
Total shareholders’ equity
|
5,229
|
|
|
23,572
|
|
||
Total liabilities and shareholders’ equity
|
$
|
58,111
|
|
|
$
|
51,370
|
|
|
Twelve Months Ended
September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
82,636
|
|
|
$
|
73,549
|
|
|
$
|
67,143
|
|
Expenses
|
48,257
|
|
|
44,236
|
|
|
41,317
|
|
|||
Gross profit
|
34,379
|
|
|
29,313
|
|
|
25,826
|
|
|||
Other expenses
|
31,404
|
|
|
28,338
|
|
|
25,920
|
|
|||
Income (loss) from continuing operations
|
2,975
|
|
|
975
|
|
|
(94
|
)
|
|||
Net income (loss)
|
$
|
1,008
|
|
|
$
|
(1,263
|
)
|
|
$
|
(2,946
|
)
|
|
Range of Ownership
|
December 31, 2017
|
December 31, 2016
|
||||
Condominium and Mixed Use Development:
|
|
|
|
||||
New York City SMSA
|
3.1% - 49.5%
|
$
|
96,386
|
|
$
|
131,770
|
|
All other U.S. areas
|
15.0% - 48.5%
|
28,763
|
|
40,950
|
|
||
|
|
125,149
|
|
172,720
|
|
||
Apartment Buildings:
|
|
|
|
||||
New York City SMSA
|
45.4%
|
10,910
|
|
—
|
|
||
All other U.S. areas
|
7.6% - 16.3%
|
257
|
|
8,287
|
|
||
|
|
11,167
|
|
8,287
|
|
||
Hotels:
|
|
|
|
||||
New York City SMSA
|
5.2%
|
19,616
|
|
21,895
|
|
||
International
|
49.0%
|
2,800
|
|
3,037
|
|
||
|
|
22,416
|
|
24,932
|
|
||
Commercial:
|
|
|
|
||||
New York City SMSA
|
49.0%
|
2,437
|
|
3,290
|
|
||
All other U.S. areas
|
1.9%
|
15,642
|
|
10,000
|
|
||
|
|
18,079
|
|
13,290
|
|
||
|
|
|
|
||||
Other
|
15.0% - 50.0%
|
11,320
|
|
2,029
|
|
||
Investments in real estate ventures
|
|
$
|
188,131
|
|
$
|
221,258
|
|
|
December 31, 2017
|
December 31, 2016
|
||||
Condominium and Mixed Use Development:
|
|
|
||||
New York City SMSA
|
$
|
11,465
|
|
$
|
5,661
|
|
All other U.S. areas
|
8,596
|
|
23,874
|
|
||
|
20,061
|
|
29,535
|
|
||
Hotels:
|
|
|
||||
New York City SMSA
|
3,068
|
|
4,082
|
|
||
International
|
—
|
|
490
|
|
||
|
3,068
|
|
4,572
|
|
||
Commercial:
|
|
|
||||
All other U.S. areas
|
5,753
|
|
10,000
|
|
||
|
5,753
|
|
10,000
|
|
||
|
|
|
||||
Other
|
9,925
|
|
—
|
|
||
Total contributions
|
$
|
38,807
|
|
$
|
44,107
|
|
|
December 31, 2017
|
December 31, 2016
|
||||
Condominium and Mixed Use Development:
|
|
|
||||
New York City SMSA
|
$
|
68,600
|
|
$
|
27,574
|
|
All other U.S. areas
|
20,859
|
|
10,336
|
|
||
|
89,459
|
|
37,910
|
|
||
Apartment Buildings:
|
|
|
||||
All other U.S. areas
|
7,498
|
|
9,055
|
|
||
|
7,498
|
|
9,055
|
|
||
Hotels:
|
|
|
||||
International
|
468
|
|
8,120
|
|
||
|
468
|
|
8,120
|
|
||
Commercial:
|
|
|
||||
New York City SMSA
|
111
|
|
515
|
|
||
All other U.S. areas
|
514
|
|
—
|
|
||
|
625
|
|
515
|
|
||
|
|
|
||||
Other
|
1,663
|
|
1,050
|
|
||
Total distributions
|
$
|
99,713
|
|
$
|
56,650
|
|
|
December 31, 2017
|
December 31, 2016
|
December 31, 2015
|
||||||
Condominium and Mixed Use Development:
|
|
|
|
||||||
New York City SMSA
|
$
|
35,578
|
|
$
|
7,432
|
|
$
|
4,533
|
|
All other U.S. areas
|
(2,063
|
)
|
(1,793
|
)
|
(869
|
)
|
|||
|
33,515
|
|
5,639
|
|
3,664
|
|
|||
Apartment Buildings:
|
|
|
|
||||||
New York City SMSA
|
(6,703
|
)
|
—
|
|
—
|
|
|||
All other U.S. areas
|
(532
|
)
|
1,588
|
|
527
|
|
|||
|
(7,235
|
)
|
1,588
|
|
527
|
|
|||
Hotels:
|
|
|
|
||||||
New York City SMSA
|
(5,347
|
)
|
(1,884
|
)
|
(1,540
|
)
|
|||
International
|
232
|
|
439
|
|
(1,594
|
)
|
|||
|
(5,115
|
)
|
(1,445
|
)
|
(3,134
|
)
|
|||
Commercial:
|
|
|
|
||||||
New York City SMSA
|
(742
|
)
|
(1,644
|
)
|
(2
|
)
|
|||
All other U.S. areas
|
403
|
|
—
|
|
—
|
|
|||
|
(339
|
)
|
(1,644
|
)
|
(2
|
)
|
|||
|
|
|
|
||||||
Other
|
569
|
|
1,062
|
|
946
|
|
|||
Total equity in earnings from real estate ventures
|
$
|
21,395
|
|
$
|
5,200
|
|
2,001
|
|
|
Year Ended
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
197,157
|
|
|
$
|
467,755
|
|
|
$
|
72,564
|
|
Cost of goods sold
|
116,120
|
|
|
248,917
|
|
|
43,269
|
|
|||
Other expenses
|
11,649
|
|
|
28,784
|
|
|
3,064
|
|
|||
Income from continuing operations
|
$
|
69,388
|
|
|
$
|
190,054
|
|
|
$
|
26,231
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
7,908
|
|
|
$
|
105,930
|
|
Total assets
|
32,929
|
|
|
224,704
|
|
||
Total debt
|
30,006
|
|
|
8,275
|
|
||
Total liabilities
|
30,006
|
|
|
106,994
|
|
||
Non-controlling interest
|
2,575
|
|
|
103,691
|
|
|
Year Ended
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
176,306
|
|
|
$
|
44,089
|
|
|
$
|
69,320
|
|
Cost of goods sold
|
93,766
|
|
|
54,103
|
|
|
49,568
|
|
|||
Other expenses
|
47,590
|
|
|
13,782
|
|
|
7,608
|
|
|||
Income (loss) from continuing operations
|
$
|
34,950
|
|
|
$
|
(23,796
|
)
|
|
$
|
12,144
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
3,720,332
|
|
|
$
|
3,307,998
|
|
Total assets
|
4,178,725
|
|
|
3,561,502
|
|
||
Total debt
|
2,806,648
|
|
|
2,470,299
|
|
||
Total liabilities
|
3,028,789
|
|
|
2,580,357
|
|
||
Non-controlling interest
|
472,459
|
|
|
460,503
|
|
|
Year Ended
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
70,804
|
|
|
$
|
87,225
|
|
|
$
|
83,871
|
|
Other expenses
|
82,939
|
|
|
83,117
|
|
|
75,384
|
|
|||
(Loss) income from continuing operations
|
$
|
(12,135
|
)
|
|
$
|
4,108
|
|
|
$
|
8,487
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
711,104
|
|
|
$
|
488,732
|
|
Total assets
|
737,509
|
|
|
522,459
|
|
||
Total debt
|
422,055
|
|
|
475,668
|
|
||
Total liabilities
|
639,809
|
|
|
484,377
|
|
||
Non-controlling interest
|
58,700
|
|
|
(9,931
|
)
|
|
Year Ended
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
75,862
|
|
|
$
|
81,517
|
|
|
$
|
83,324
|
|
Cost of goods sold
|
4,035
|
|
|
4,262
|
|
|
3,837
|
|
|||
Other expenses
|
112,124
|
|
|
114,582
|
|
|
112,069
|
|
|||
Loss from continuing operations
|
$
|
(40,297
|
)
|
|
$
|
(37,327
|
)
|
|
$
|
(32,582
|
)
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
776,577
|
|
|
$
|
781,461
|
|
Total assets
|
865,070
|
|
|
854,559
|
|
||
Total debt
|
491,200
|
|
|
491,200
|
|
||
Total liabilities
|
512,252
|
|
|
509,385
|
|
||
Non-controlling interest
|
319,322
|
|
|
312,113
|
|
|
Year Ended
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
6,636
|
|
|
$
|
8,410
|
|
|
$
|
5,638
|
|
Other expenses
|
3,294
|
|
|
11,195
|
|
|
5,642
|
|
|||
Income (loss) from continuing operations
|
$
|
3,342
|
|
|
$
|
(2,785
|
)
|
|
$
|
(4
|
)
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
53,586
|
|
|
$
|
61,091
|
|
Total assets
|
75,289
|
|
|
74,512
|
|
||
Total debt
|
55,625
|
|
|
55,625
|
|
||
Total liabilities
|
54,524
|
|
|
57,601
|
|
|
Year Ended
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
3,442
|
|
|
$
|
3,344
|
|
|
$
|
3,030
|
|
Other expenses
|
5,069
|
|
|
1,227
|
|
|
1,049
|
|
|||
(Loss) income from continuing operations
|
$
|
(1,627
|
)
|
|
$
|
2,117
|
|
|
$
|
1,981
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
824,745
|
|
|
$
|
—
|
|
Total assets
|
894,982
|
|
|
5,382
|
|
||
Total debt
|
470,000
|
|
|
—
|
|
||
Total liabilities
|
471,964
|
|
|
1,230
|
|
||
Non-controlling interest
|
356,632
|
|
|
—
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Escena, net
|
$
|
10,485
|
|
|
$
|
10,792
|
|
Sagaponack
|
13,467
|
|
|
12,848
|
|
||
Investment in real estate, net
|
$
|
23,952
|
|
|
$
|
23,640
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Land and land improvements
|
$
|
8,907
|
|
|
$
|
8,907
|
|
Building and building improvements
|
1,891
|
|
|
1,878
|
|
||
Other
|
2,111
|
|
|
2,028
|
|
||
|
12,909
|
|
|
12,813
|
|
||
Less accumulated depreciation
|
(2,424
|
)
|
|
(2,021
|
)
|
||
|
$
|
10,485
|
|
|
$
|
10,792
|
|
8.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Goodwill
|
|
$
|
77,059
|
|
|
$
|
70,815
|
|
|
|
|
|
|
||||
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
|
|
3,138
|
|
|
3,592
|
|
||
|
|
|
|
|
||||
Total goodwill and other intangible assets, net
|
|
$
|
267,708
|
|
|
$
|
261,918
|
|
|
Useful Lives in Years
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Intangible asset associated with benefit under the MSA
|
Indefinite
|
|
$
|
107,511
|
|
|
$
|
107,511
|
|
|
|
|
|
|
|
||||
Trademark - Douglas Elliman
|
Indefinite
|
|
80,000
|
|
|
80,000
|
|
||
|
|
|
|
|
|
||||
Favorable leases
|
1 - 10
|
|
13,444
|
|
|
13,444
|
|
||
Other intangibles
|
1 - 5
|
|
6,999
|
|
|
5,816
|
|
||
|
|
|
20,443
|
|
|
19,260
|
|
||
Less: Accumulated amortization on amortizable intangibles
|
|
|
(17,305
|
)
|
|
(15,668
|
)
|
||
Other intangibles, net
|
|
|
$
|
3,138
|
|
|
$
|
3,592
|
|
|
|
|
|
|
|
||||
Contract liabilities assumed:
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
Unfavorable leases
|
1 - 10
|
|
$
|
4,022
|
|
|
$
|
4,022
|
|
Less: Accumulated amortization on amortizable intangibles
|
|
|
(2,706
|
)
|
|
(2,204
|
)
|
||
Unfavorable leases, net
|
|
|
$
|
1,316
|
|
|
$
|
1,818
|
|
|
|
|
|
|
|
9.
|
NOTES PAYABLE, LONG-TERM DEBT AND OTHER OBLIGATIONS
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Vector:
|
|
|
|
|
|||
7.75% Senior Secured Notes due 2021, including premium of $13,954
|
$
|
—
|
|
|
$
|
848,954
|
|
6.125% Senior Secured Notes due 2025
|
850,000
|
|
|
—
|
|
||
5.5% Variable Interest Senior Convertible Debentures due 2020, net of unamortized discount of $53,687 and $71,247*
|
205,063
|
|
|
187,503
|
|
||
7.5% Variable Interest Senior Convertible Notes due 2019, net of unamortized discount of $69,253 and $108,480*
|
160,747
|
|
|
121,520
|
|
||
Liggett:
|
|
|
|
||||
Revolving credit facility
|
31,614
|
|
|
37,163
|
|
||
Term loan under credit facility
|
2,704
|
|
|
2,999
|
|
||
Equipment loans
|
2,662
|
|
|
4,519
|
|
||
Other
|
752
|
|
|
591
|
|
||
Total notes payable, long-term debt and other obligations
|
1,253,542
|
|
|
1,203,249
|
|
||
Less:
|
|
|
|
||||
Debt issuance costs
|
(25,478
|
)
|
|
(30,798
|
)
|
||
Total notes payable, long-term debt and other obligations
|
1,228,064
|
|
|
1,172,451
|
|
||
Less:
|
|
|
|
|
|
||
Current maturities
|
(33,820
|
)
|
|
(39,508
|
)
|
||
Amount due after one year
|
$
|
1,194,244
|
|
|
$
|
1,132,943
|
|
*
|
The fair value of the derivatives embedded within the 5.5% Variable Interest Senior Convertible Debentures ($45,249 at December 31, 2017 and $59,433 at December 31, 2016, respectively) and the 7.5% Variable Interest Senior Convertible Debentures ($31,164 at December 31, 2017 and $52,899 at December 31, 2016, respectively) is separately classified as a derivative liability in the consolidated balance sheets.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||
|
Conversion Price
|
|
Shares per $1,000
|
|
Conversion Price
|
|
Shares per $1,000
|
||||||
|
|
|
|
|
|
|
|
||||||
7.5% Convertible Notes
|
$
|
14.50
|
|
|
68.9882
|
|
|
$
|
14.50
|
|
|
68.9882
|
|
5.5% Convertible Notes
|
$
|
22.35
|
|
|
44.7495
|
|
|
$
|
22.35
|
|
|
44.7495
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
7.5% Convertible Notes
|
$
|
23,720
|
|
|
$
|
14,294
|
|
|
$
|
8,777
|
|
5.5% Convertible Notes
|
13,490
|
|
|
11,438
|
|
|
9,752
|
|
|||
Interest expense associated with embedded derivatives
|
$
|
37,210
|
|
|
$
|
25,732
|
|
|
$
|
18,529
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
7.5% Convertible Notes
|
$
|
21,734
|
|
|
$
|
19,184
|
|
|
$
|
15,555
|
|
5.5% Convertible Notes
|
14,185
|
|
|
12,526
|
|
|
8,905
|
|
|||
Gain on changes in fair value of derivatives embedded within convertible debt
|
$
|
35,919
|
|
|
$
|
31,710
|
|
|
$
|
24,460
|
|
|
6.75%
Note
|
|
7.5%
Convertible
Notes
|
|
5.5% Convertible Notes
|
|
Total
|
||||||||
Balance at January 1, 2015
|
$
|
884
|
|
|
$
|
87,638
|
|
|
$
|
80,864
|
|
|
$
|
169,386
|
|
Conversion of $25,000 of 6.75% Variable Interest Senior Convertible Note due February 15, 2015
|
(889
|
)
|
|
—
|
|
|
—
|
|
|
(889
|
)
|
||||
Loss (gain) from changes in fair value of embedded derivatives
|
5
|
|
|
(15,555
|
)
|
|
(8,905
|
)
|
|
(24,455
|
)
|
||||
Balance at December 31, 2015
|
—
|
|
|
72,083
|
|
|
71,959
|
|
|
144,042
|
|
||||
Gain from changes in fair value of embedded derivatives
|
—
|
|
|
(19,184
|
)
|
|
(12,526
|
)
|
|
(31,710
|
)
|
||||
Balance at December 31, 2016
|
—
|
|
|
52,899
|
|
|
59,433
|
|
|
112,332
|
|
||||
Gain from changes in fair value of embedded derivatives
|
—
|
|
|
(21,734
|
)
|
|
(14,185
|
)
|
|
(35,919
|
)
|
||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
31,165
|
|
|
$
|
45,248
|
|
|
$
|
76,413
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Amortization of beneficial conversion feature:
|
|
|
|
|
|
|
|
|
|||
7.5% Convertible Notes
|
$
|
15,507
|
|
|
$
|
9,345
|
|
|
$
|
5,738
|
|
5.5% Convertible Notes
|
4,070
|
|
|
3,451
|
|
|
2,943
|
|
|||
Interest expense associated with beneficial conversion feature
|
$
|
19,577
|
|
|
$
|
12,796
|
|
|
$
|
8,681
|
|
|
7.5%
Convertible
Notes
|
|
5.5% Convertible Notes
|
|
Total
|
||||||
Balance at January 1, 2015
|
$
|
146,634
|
|
|
$
|
98,831
|
|
|
$
|
245,465
|
|
Amortization of embedded derivatives
|
(8,777
|
)
|
|
(9,752
|
)
|
|
(18,529
|
)
|
|||
Amortization of beneficial conversion feature
|
(5,738
|
)
|
|
(2,943
|
)
|
|
(8,681
|
)
|
|||
Balance at December 31, 2015
|
132,119
|
|
|
86,136
|
|
|
218,255
|
|
|||
Amortization of embedded derivatives
|
(14,294
|
)
|
|
(11,438
|
)
|
|
(25,732
|
)
|
|||
Amortization of beneficial conversion feature
|
(9,345
|
)
|
|
(3,451
|
)
|
|
(12,796
|
)
|
|||
Balance at December 31, 2016
|
108,480
|
|
|
71,247
|
|
|
179,727
|
|
|||
Amortization of embedded derivatives
|
(23,720
|
)
|
|
(13,490
|
)
|
|
(37,210
|
)
|
|||
Amortization of beneficial conversion feature
|
(15,507
|
)
|
|
(4,070
|
)
|
|
(19,577
|
)
|
|||
Balance at December 31, 2017
|
$
|
69,253
|
|
|
$
|
53,687
|
|
|
$
|
122,940
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Notes payable and long-term debt
|
$
|
1,253,542
|
|
(1)
|
$
|
1,579,616
|
|
|
$
|
1,203,249
|
|
(1)
|
$
|
1,570,732
|
|
|
Principal
|
|
Unamortized
Discount/ (Premium)
|
|
Net
|
||||||
Year Ending December 31:
|
|
|
|
|
|
|
|
||||
2018
|
$
|
33,820
|
|
|
$
|
—
|
|
|
$
|
33,820
|
|
2019
|
231,444
|
|
|
69,253
|
|
|
162,191
|
|
|||
2020
|
261,217
|
|
|
53,687
|
|
|
207,530
|
|
|||
2021
|
1
|
|
|
—
|
|
|
1
|
|
|||
2022
|
—
|
|
|
—
|
|
|
—
|
|
|||
Thereafter
|
850,000
|
|
|
—
|
|
|
850,000
|
|
|||
Total
|
$
|
1,376,482
|
|
|
$
|
122,940
|
|
|
$
|
1,253,542
|
|
10.
|
COMMITMENTS
|
|
Lease
Commitments
|
|
||
Year Ending December 31:
|
|
|
|
|
2018
|
$
|
31,436
|
|
|
2019
|
31,774
|
|
|
|
2020
|
26,664
|
|
|
|
2021
|
24,783
|
|
|
|
2022
|
21,594
|
|
|
|
Thereafter
|
118,216
|
|
|
|
Total
|
$
|
254,467
|
|
|
11.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension Benefits
|
|
Other
Postretirement Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Benefit obligation at January 1
|
$
|
(132,721
|
)
|
|
$
|
(133,506
|
)
|
|
$
|
(8,682
|
)
|
|
$
|
(8,434
|
)
|
Service cost
|
(564
|
)
|
|
(547
|
)
|
|
(5
|
)
|
|
(5
|
)
|
||||
Interest cost
|
(5,059
|
)
|
|
(5,419
|
)
|
|
(368
|
)
|
|
(385
|
)
|
||||
Benefits paid
|
9,012
|
|
|
9,596
|
|
|
582
|
|
|
695
|
|
||||
Expenses paid
|
297
|
|
|
309
|
|
|
—
|
|
|
—
|
|
||||
Actuarial gain
|
(3,687
|
)
|
|
(3,154
|
)
|
|
(494
|
)
|
|
(553
|
)
|
||||
Benefit obligation at December 31
|
$
|
(132,722
|
)
|
|
$
|
(132,721
|
)
|
|
$
|
(8,967
|
)
|
|
$
|
(8,682
|
)
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets at January 1
|
$
|
103,781
|
|
|
$
|
106,620
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
11,373
|
|
|
6,720
|
|
|
—
|
|
|
—
|
|
||||
Expenses paid
|
(297
|
)
|
|
(309
|
)
|
|
—
|
|
|
—
|
|
||||
Contributions
|
347
|
|
|
346
|
|
|
582
|
|
|
695
|
|
||||
Benefits paid
|
(9,012
|
)
|
|
(9,596
|
)
|
|
(582
|
)
|
|
(695
|
)
|
||||
Fair value of plan assets at December 31
|
$
|
106,192
|
|
|
$
|
103,781
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unfunded status at December 31
|
$
|
(26,530
|
)
|
|
$
|
(28,940
|
)
|
|
$
|
(8,967
|
)
|
|
$
|
(8,682
|
)
|
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prepaid pension costs
|
$
|
27,697
|
|
|
$
|
22,273
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other accrued liabilities
|
(313
|
)
|
|
(316
|
)
|
|
(639
|
)
|
|
(621
|
)
|
||||
Non-current employee benefit liabilities
|
(53,914
|
)
|
|
(50,897
|
)
|
|
(8,328
|
)
|
|
(8,061
|
)
|
||||
Net amounts recognized
|
$
|
(26,530
|
)
|
|
$
|
(28,940
|
)
|
|
$
|
(8,967
|
)
|
|
$
|
(8,682
|
)
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Service cost — benefits earned during the period
|
$
|
564
|
|
|
$
|
547
|
|
|
$
|
532
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
8
|
|
Interest cost on projected benefit obligation
|
5,059
|
|
|
5,419
|
|
|
4,992
|
|
|
368
|
|
|
385
|
|
|
371
|
|
||||||
Expected return on assets
|
(5,424
|
)
|
|
(6,076
|
)
|
|
(7,378
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlement loss
|
—
|
|
|
—
|
|
|
3,214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Special termination benefit recognized
|
—
|
|
|
—
|
|
|
3,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net loss (gain)
|
2,009
|
|
|
1,855
|
|
|
1,083
|
|
|
(54
|
)
|
|
(75
|
)
|
|
(97
|
)
|
||||||
Net expense
|
$
|
2,208
|
|
|
$
|
1,745
|
|
|
$
|
6,274
|
|
|
$
|
319
|
|
|
$
|
315
|
|
|
$
|
282
|
|
|
Defined
Benefit
Pension Plans
|
|
Post-
Retirement
Plans
|
|
Total
|
||||||
Actuarial loss (gain)
|
$
|
1,804
|
|
|
$
|
(41
|
)
|
|
$
|
1,763
|
|
|
Defined
Benefit
Pension Plans
|
|
Post-
Retirement
Plans
|
|
Total
|
||||||
Accumulated other comprehensive (loss) income as of January 1, 2017
|
$
|
(35,914
|
)
|
|
$
|
311
|
|
|
$
|
(35,603
|
)
|
Amortization of loss (gain)
|
2,009
|
|
|
(54
|
)
|
|
1,955
|
|
|||
Net gain (loss) arising during the year
|
2,262
|
|
|
(494
|
)
|
|
1,768
|
|
|||
Accumulated other comprehensive loss as of December 31, 2017
|
$
|
(31,643
|
)
|
|
$
|
(237
|
)
|
|
$
|
(31,880
|
)
|
|
Defined
Benefit
Pension Plans
|
|
Post-
Retirement
Plans
|
|
Total
|
||||||
Accumulated other comprehensive (loss) income as of January 1, 2016
|
$
|
(35,258
|
)
|
|
$
|
939
|
|
|
$
|
(34,319
|
)
|
Amortization of gain (loss)
|
1,855
|
|
|
(75
|
)
|
|
1,780
|
|
|||
Net loss arising during the year
|
(2,511
|
)
|
|
(553
|
)
|
|
(3,064
|
)
|
|||
Accumulated other comprehensive (loss) income as of December 31, 2016
|
$
|
(35,914
|
)
|
|
$
|
311
|
|
|
$
|
(35,603
|
)
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
Discount rates — benefit obligation
|
3.25% - 3.7%
|
|
3.60% - 4.20%
|
|
3.75% - 4.50%
|
|
3.80%
|
|
4.40%
|
|
4.75%
|
Discount rates — service cost
|
3.6% - 4.2%
|
|
3.75% - 4.50%
|
|
2.75% - 4.25%
|
|
4.40%
|
|
4.75%
|
|
4.25%
|
Assumed rates of return on invested assets
|
5.50%
|
|
6.00%
|
|
6.00%
|
|
N/A
|
|
N/A
|
|
N/A
|
Salary increase assumptions
|
N/A
|
|
N/A
|
|
N/A
|
|
3.00%
|
|
3.00%
|
|
3.00%
|
|
Plan Assets at
December 31,
|
||||
|
2017
|
|
2016
|
||
Asset category:
|
|
|
|
|
|
Equity securities
|
56
|
%
|
|
54
|
%
|
Investment grade fixed income securities
|
35
|
%
|
|
30
|
%
|
High yield fixed income securities
|
9
|
%
|
|
10
|
%
|
Alternative investments
|
—
|
%
|
|
2
|
%
|
Short-term investments
|
—
|
%
|
|
4
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
|
Fair Value Measurements as of December 31, 2017
|
||||||||||||||
|
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant Other
Observable Inputs
|
|
Significant
Unobservable Inputs
|
||||||||
Description
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance contracts
|
|
$
|
2,245
|
|
|
$
|
—
|
|
|
$
|
2,245
|
|
|
$
|
—
|
|
Amounts in individually managed investment accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash
|
|
173
|
|
|
173
|
|
|
—
|
|
|
—
|
|
||||
U.S. equity securities
|
|
2,149
|
|
|
2,149
|
|
|
—
|
|
|
—
|
|
||||
Common collective trusts
|
|
91,470
|
|
|
—
|
|
|
91,470
|
|
|
—
|
|
||||
Investment partnership
|
|
10,155
|
|
|
—
|
|
|
10,028
|
|
|
127
|
|
||||
Total
|
|
$
|
106,192
|
|
|
$
|
2,322
|
|
|
$
|
103,743
|
|
|
$
|
127
|
|
|
|
Fair Value Measurements as of December 31, 2016
|
||||||||||||||
|
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant Other
Observable Inputs
|
|
Significant
Unobservable Inputs
|
||||||||
Description
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance contracts
|
|
$
|
1,765
|
|
|
$
|
—
|
|
|
$
|
1,765
|
|
|
$
|
—
|
|
Amounts in individually managed investment accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash, mutual funds and common stock
|
|
4,302
|
|
|
4,302
|
|
|
—
|
|
|
—
|
|
||||
U.S. equity securities
|
|
8,298
|
|
|
8,298
|
|
|
—
|
|
|
—
|
|
||||
Common collective trusts
|
|
76,969
|
|
|
—
|
|
|
76,969
|
|
|
—
|
|
||||
Investment partnership
|
|
12,447
|
|
|
—
|
|
|
10,457
|
|
|
1,990
|
|
||||
Total
|
|
$
|
103,781
|
|
|
$
|
12,600
|
|
|
$
|
89,191
|
|
|
$
|
1,990
|
|
|
2017
|
|
2016
|
||||
Balance as of January 1
|
$
|
1,990
|
|
|
$
|
3,414
|
|
Distributions
|
(1,962
|
)
|
|
(1,648
|
)
|
||
Unrealized gain on long-term investments
|
15
|
|
|
16
|
|
||
Realized gain on long-term investments
|
84
|
|
|
208
|
|
||
Balance as of December 31
|
$
|
127
|
|
|
$
|
1,990
|
|
|
1% Increase
|
|
1% Decrease
|
||||
Effect on total of service and interest cost components
|
$
|
3
|
|
|
$
|
(3
|
)
|
Effect on benefit obligation
|
63
|
|
|
(59
|
)
|
|
Pension
|
|
Postretirement
Medical
|
||||
2018
|
$
|
8,693
|
|
|
$
|
639
|
|
2019
|
8,198
|
|
|
638
|
|
||
2020
|
14,816
|
|
|
620
|
|
||
2021
|
7,225
|
|
|
616
|
|
||
2022
|
6,776
|
|
|
615
|
|
||
2023 - 2027
|
78,959
|
|
|
2,958
|
|
12.
|
|
|
|
Amounts expensed
through Year Ended December 31, |
||||||
|
|
2016
|
|
2015
|
||||
Cash Charges:
|
|
|
|
|
||||
Employee severance and benefits
|
|
$
|
—
|
|
|
$
|
1,094
|
|
Lease termination costs
|
|
41
|
|
|
203
|
|
||
Other restructuring expenses
|
|
—
|
|
|
68
|
|
||
|
|
41
|
|
|
1,365
|
|
||
Non-Cash:
|
|
|
|
|
||||
Employee pension benefits
|
|
—
|
|
|
5,438
|
|
||
Point of sale inventory impairment
|
|
—
|
|
|
454
|
|
||
|
|
—
|
|
|
5,892
|
|
||
|
|
|
|
|
||||
Total restructuring
|
|
$
|
41
|
|
|
$
|
7,257
|
|
|
|
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
|
|
(422
|
)
|
|
(89
|
)
|
|
(20
|
)
|
|
(531
|
)
|
||||
Accrual balance as of December 31, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
13.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
U.S. Federal
|
$
|
28,271
|
|
|
$
|
29,185
|
|
|
$
|
40,542
|
|
State
|
3,458
|
|
|
7,407
|
|
|
13,886
|
|
|||
|
$
|
31,729
|
|
|
$
|
36,592
|
|
|
$
|
54,428
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|||
U.S. Federal
|
$
|
(31,049
|
)
|
|
$
|
10,076
|
|
|
$
|
(9,943
|
)
|
State
|
(2,262
|
)
|
|
2,495
|
|
|
(3,252
|
)
|
|||
|
(33,311
|
)
|
|
12,571
|
|
|
(13,195
|
)
|
|||
Total
|
$
|
(1,582
|
)
|
|
$
|
49,163
|
|
|
$
|
41,233
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Employee benefit accruals
|
$
|
11,621
|
|
|
$
|
17,335
|
|
Impairment of investments
|
1,834
|
|
|
1,534
|
|
||
Impact of timing of settlement payments
|
14,367
|
|
|
28,266
|
|
||
Various U.S. state tax loss carryforwards
|
6,556
|
|
|
6,551
|
|
||
Other
|
1,110
|
|
|
2,803
|
|
||
|
35,488
|
|
|
56,489
|
|
||
Less: Valuation allowance
|
(3,664
|
)
|
|
(4,439
|
)
|
||
Net deferred tax assets
|
$
|
31,824
|
|
|
$
|
52,050
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Excess of tax basis over book-basis non-consolidated entities
|
$
|
(5,388
|
)
|
|
$
|
(7,494
|
)
|
Book/tax differences on fixed and intangible assets
|
(36,712
|
)
|
|
(54,776
|
)
|
||
Capitalized interest expense
|
(6,069
|
)
|
|
(8,673
|
)
|
||
Book/tax differences on inventory
|
(11,357
|
)
|
|
(16,143
|
)
|
||
Book/tax differences on long-term investments
|
(15,521
|
)
|
|
(23,937
|
)
|
||
Impact of accounting for convertible debt
|
(12,776
|
)
|
|
(27,362
|
)
|
||
Book/tax differences on available for sale securities
|
(2,802
|
)
|
|
(6,750
|
)
|
||
|
$
|
(90,625
|
)
|
|
$
|
(145,135
|
)
|
|
|
|
|
||||
Net deferred tax liabilities
|
$
|
(58,801
|
)
|
|
$
|
(93,085
|
)
|
Balance at January 1, 2015
|
$
|
1,744
|
|
Additions based on tax positions related to prior years
|
265
|
|
|
Settlements
|
(132
|
)
|
|
Expirations of the statute of limitations
|
(354
|
)
|
|
Balance at December 31, 2015
|
1,523
|
|
|
Additions based on tax positions related to prior years
|
72
|
|
|
Settlements
|
(119
|
)
|
|
Expirations of the statute of limitations
|
(961
|
)
|
|
Balance at December 31, 2016
|
515
|
|
|
Additions based on tax positions related to prior years
|
208
|
|
|
Settlements
|
—
|
|
|
Expirations of the statute of limitations
|
(95
|
)
|
|
Balance at December 31, 2017
|
$
|
628
|
|
14.
|
STOCK COMPENSATION
|
|
2017
|
|
2016
|
|
2015
|
|||
Risk-free interest rate
|
2.1% - 2.4%
|
|
|
1.5% - 1.7%
|
|
|
1.8% - 2.0%
|
|
Expected volatility
|
18.88% - 21.62%
|
|
|
16.49% - 18.13%
|
|
|
22.18% - 22.25%
|
|
Dividend yield
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
Expected holding period
|
6.00 – 10.00 years
|
|
7.00 – 10.00 years
|
|
7.00 – 10.00 years
|
|
||
Weighted-average grant date fair value (1)
|
$5.39 - $8.17
|
|
|
$5.09 - $6.88
|
|
|
$6.47 - $8.07
|
|
|
Number of
Shares
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average
Remaining
Contractual Term
(Years)
|
|
Aggregate
Intrinsic
Value(1)
|
|||||
Outstanding on January 1, 2015
|
3,808,356
|
|
|
$
|
11.58
|
|
|
6.4
|
|
$
|
25,977
|
|
Granted
|
448,580
|
|
|
$
|
19.95
|
|
|
|
|
|
|
|
Exercised
|
(127,373
|
)
|
|
$
|
10.90
|
|
|
|
|
|
|
|
Canceled
|
(5
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
Outstanding on December 31, 2015
|
4,129,558
|
|
|
$
|
12.53
|
|
|
5.9
|
|
$
|
36,612
|
|
Granted
|
427,219
|
|
|
$
|
21.08
|
|
|
|
|
|
|
|
Exercised
|
(35,176
|
)
|
|
$
|
11.30
|
|
|
|
|
|
|
|
Canceled
|
(6
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
Outstanding on December 31, 2016
|
4,521,595
|
|
|
$
|
13.35
|
|
|
5.3
|
|
$
|
37,557
|
|
Granted
|
406,875
|
|
|
$
|
21.72
|
|
|
|
|
|
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Canceled
|
(11
|
)
|
|
$
|
—
|
|
|
|
|
|
||
Outstanding on December 31, 2017
|
4,928,459
|
|
|
$
|
14.05
|
|
|
4.7
|
|
$
|
41,069
|
|
Options exercisable at:
|
|
|
|
|
|
|
|
|
|
|
||
December 31, 2015
|
2,243,968
|
|
|
|
|
|
|
|
|
|
||
December 31, 2016
|
2,217,584
|
|
|
|
|
|
|
|
|
|
||
December 31, 2017
|
3,174,786
|
|
|
|
|
|
|
|
|
|
(1)
|
The aggregate intrinsic value represents the amount by which the fair value of the underlying common stock ($22.38, $21.66 and $21.40 at December 31, 2017, 2016 and 2015, respectively) exceeds the option exercise price.
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||||||||
Range of Exercise Prices
|
|
Outstanding
as of
|
|
Weighted-Average
Remaining
Contractual Life
(Years)
|
|
Weighted-Average
Exercise Price
|
|
Exercisable
as of
|
|
Weighted-Average
Remaining
Contractual Life
(Years)
|
|
Weighted-Average
Exercise Price |
|
Aggregate Intrinsic Value
|
||||||||||||
|
12/31/2017
|
|
|
|
12/31/2017
|
|
|
|
||||||||||||||||||
$8.69
|
-
|
$10.86
|
|
1,654,743
|
|
|
1.9
|
|
|
$
|
9.55
|
|
|
1,654,743
|
|
|
1.9
|
|
|
$
|
9.55
|
|
|
$
|
—
|
|
$10.86
|
-
|
$13.03
|
|
1,520,043
|
|
|
4.4
|
|
|
$
|
12.50
|
|
|
1,520,043
|
|
|
4.4
|
|
|
$
|
12.50
|
|
|
—
|
|
|
$13.03
|
-
|
$15.20
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$15.20
|
-
|
$17.38
|
|
471,004
|
|
|
6.4
|
|
|
$
|
16.18
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$17.38
|
-
|
$19.55
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$19.55
|
-
|
$21.72
|
|
1,282,669
|
|
|
8.1
|
|
|
$
|
20.89
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
|
|
4,928,459
|
|
|
4.7
|
|
|
$
|
14.05
|
|
|
3,174,786
|
|
|
3.1
|
|
|
$
|
10.96
|
|
|
$
|
36,244
|
|
State
|
|
Number
of Cases
|
Florida
|
|
18
|
New York
|
|
3
|
Louisiana
|
|
2
|
West Virginia
|
|
2
|
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
|
|
17
|
|
—
|
|
In June 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. 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, which, among other things, reversed an approximately $3,000 compensatory award against Liggett. The case was remanded to the trial court for proceedings consistent with those portions of the district court's decision that were not reversed. In May 2017, the court granted Defendant's Motion for Remittitur and reduced the non-economic damages to $225. Plaintiff rejected the remittitur and a new trial will be conducted on non-economic damages. It is anticipated that the retrial will occur in 2018.
|
April 2011
|
|
Tullo v. R.J. Reynolds
|
|
Palm Beach
|
|
225
|
|
—
|
|
Liggett satisfied the judgment and the case is concluded.
|
Date
|
|
Case Name
|
|
County
|
|
Liggett Compensatory
Damages (as adjusted) (1) |
|
Liggett Punitive Damages
|
|
Status (2)
|
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. Liggett posted a supersedeas bond in the amount of $491. In January 2018, the First District Court of Appeal reversed the attorneys' fee award. Plaintiff moved to certify the issue for appeal to the Florida Supreme Court.
|
May 2012
|
|
Calloway v. R.J. Reynolds
|
|
Broward
|
|
—
|
|
—
|
|
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 moved for rehearing and in September 2016, the Fourth District Court of Appeal reversed the judgment in its entirety and remanded the case for a new trial. As a result, the $1,530 compensatory award against Liggett was also reversed. The plaintiff filed a notice to invoke the discretionary jurisdiction of the Florida Supreme Court. The court declined to accept jurisdiction. Plaintiff filed a petition for writ of certiorari to the United States Supreme Court which was denied. This case was settled in December 2016 as part of Engle Progeny Settlement II and the case in concluded as to Liggett.
|
December 2012
|
|
Buchanan v. R.J. Reynolds
|
|
Leon
|
|
2,750
|
|
—
|
|
Liggett satisfied the judgment and the case is concluded.
|
May 2013
|
|
D. Cohen v. R.J. Reynolds
|
|
Palm Beach
|
|
—
|
|
—
|
|
This case was settled in December 2016 as part of Engle Progeny Settlement II and the case is concluded as to Liggett.
|
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
|
|
—
|
|
—
|
|
This case was settled in December 2016 as part of Engle Progeny Settlement II and the case is concluded as to Liggett.
|
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. A joint and several judgment was entered in the amount of $12,750 on the compensatory damages. Judgment was also entered against Liggett for $300 in punitive damages. Defendants appealed and plaintiff cross-appealed. The Second District Court of Appeal reversed the trial court's decision to reduce the judgment by plaintiff's assessed fault and affirmed as to all other issues on that appeal. In a separate appeal, the Second District Court of Appeal also reversed the trial court's ruling that plaintiff's proposals for settlement were invalid and remanded for determination of attorney's fees. Defendants filed notices to invoke the discretionary jurisdiction of the Florida Supreme Court on both appeals. Both appeals are stayed pending resolution of other matters. In January 2018, the Florida Supreme Court ordered defendants to show cause why the court should not decline to exercise jurisdiction over the merits appeal in light of its decision in Schoeff.
|
|
|
|
|
|
|
|
|
|
|
Any potential liability as a result of the pending appeals is included in the amount Liggett will pay under Engle Progeny Settlement II.
|
June 2015
|
|
Caprio v. R.J. Reynolds
|
|
Broward
|
|
—
|
|
—
|
|
This case was settled in December 2016 as part of Engle Progeny Settlement II and the case is concluded as to Liggett.
|
March 2017
|
|
Santoro v. R.J. Reynolds
|
|
Broward
|
|
160
|
|
15
|
|
In April 2017, a joint and several judgment was entered against R.J. Reynolds, Philip Morris and Liggett for $1,027, for compensatory damages. Judgment was also entered against Liggett for $15 in punitive damages. A hearing on post trial motions occurred in October 2017. In December 2017, the court granted the motion as to all claims other than plaintiff's conspiracy claim. Defendants moved for rehearing with respect to that claim and plaintiff moved for entry of an amended final judgment to increase plaintiff’s recovery by the percentage of decedent’s fault in light of the Schoeff decision. A hearing on all remaining motions is scheduled for April 20, 2018.
|
Total Damages Awarded:
|
24,505
|
|
$10,815
|
|
|
|||||
Amounts accrued, paid or compromised:
|
(24,328)
|
|
(10,800)
|
|
|
|||||
Damages remaining on Appeal:
|
$177
|
|
$15
|
|
|
|||||
(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 as of January 1, 2015
|
$
|
26,322
|
|
|
$
|
3,149
|
|
|
$
|
29,471
|
|
|
$
|
25,809
|
|
|
$
|
25,700
|
|
|
$
|
51,509
|
|
Expenses
|
118,284
|
|
|
20,644
|
|
|
138,928
|
|
|
—
|
|
|
(195
|
)
|
|
(195
|
)
|
||||||
NPM Settlement adjustment
|
1,351
|
|
|
—
|
|
|
1,351
|
|
|
(5,715
|
)
|
|
—
|
|
|
(5,715
|
)
|
||||||
Change in MSA obligations capitalized as inventory
|
1,426
|
|
|
—
|
|
|
1,426
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
(118,142
|
)
|
|
(5,869
|
)
|
|
(124,011
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification from non-current liabilities
|
—
|
|
|
3,305
|
|
|
3,305
|
|
|
—
|
|
|
(3,305
|
)
|
|
(3,305
|
)
|
||||||
Interest on withholding
|
—
|
|
|
1,675
|
|
|
1,675
|
|
|
—
|
|
|
2,518
|
|
|
2,518
|
|
||||||
Balance as of December 31, 2015
|
29,241
|
|
|
22,904
|
|
|
52,145
|
|
|
20,094
|
|
|
24,718
|
|
|
44,812
|
|
||||||
Expenses
|
110,486
|
|
|
16,679
|
|
|
127,165
|
|
|
—
|
|
|
3,650
|
|
|
3,650
|
|
||||||
Change in MSA obligations capitalized as inventory
|
1,568
|
|
|
—
|
|
|
1,568
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
(122,977
|
)
|
|
(39,682
|
)
|
|
(162,659
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification from non-current liabilities
|
(2,163
|
)
|
|
3,252
|
|
|
1,089
|
|
|
2,163
|
|
|
(3,252
|
)
|
|
(1,089
|
)
|
||||||
Interest on withholding
|
37
|
|
|
506
|
|
|
543
|
|
|
—
|
|
|
2,397
|
|
|
2,397
|
|
||||||
Balance as of December 31, 2016
|
16,192
|
|
|
3,659
|
|
|
19,851
|
|
|
22,257
|
|
|
27,513
|
|
|
49,770
|
|
||||||
Expenses
|
149,355
|
|
|
6,566
|
|
|
155,921
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
NPM Settlement adjustment
|
(1,793
|
)
|
|
—
|
|
|
(1,793
|
)
|
|
(928
|
)
|
|
—
|
|
|
(928
|
)
|
||||||
Change in MSA obligations capitalized as inventory
|
76
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
(151,296
|
)
|
|
(17,537
|
)
|
|
(168,833
|
)
|
|
—
|
|
|
(3,426
|
)
|
|
(3,426
|
)
|
||||||
Reclassification from non-current liabilities
|
(150
|
)
|
|
7,143
|
|
|
6,993
|
|
|
150
|
|
|
(7,143
|
)
|
|
(6,993
|
)
|
||||||
Interest on withholding
|
—
|
|
|
429
|
|
|
429
|
|
|
—
|
|
|
2,896
|
|
|
2,896
|
|
||||||
Balance as of December 31, 2017
|
$
|
12,384
|
|
|
$
|
260
|
|
|
$
|
12,644
|
|
|
$
|
21,479
|
|
|
$
|
19,840
|
|
|
$
|
41,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
117,453
|
|
|
$
|
108,422
|
|
|
$
|
96,958
|
|
Income taxes
|
26,885
|
|
|
46,811
|
|
|
52,040
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
||||
Issuance of stock dividend
|
644
|
|
|
609
|
|
|
584
|
|
|||
Debt retired in conversion to stock
|
—
|
|
|
—
|
|
|
25,000
|
|
|||
Embedded derivative, net retired in conversion to stock
|
—
|
|
|
—
|
|
|
889
|
|
17.
|
RELATED PARTY TRANSACTIONS
|
18.
|
INVESTMENTS AND FAIR VALUE MEASUREMENTS
|
|
|
Fair Value Measurements as of December 31, 2017
|
|
|
||||||||||||||||
Description
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs (Level 2) |
|
Significant Unobservable Inputs (Level 3) |
|
Total Losses
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds (1)
|
|
$
|
166,915
|
|
|
$
|
166,915
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial paper (1)
|
|
43,781
|
|
|
—
|
|
|
43,781
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certificates of deposit (2)
|
|
2,497
|
|
|
—
|
|
|
2,497
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bonds (2)
|
|
2,990
|
|
|
2,990
|
|
|
—
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
|
44,634
|
|
|
44,634
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Mutual funds invested in fixed-income securities
|
|
21,041
|
|
|
21,041
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
|
28,502
|
|
|
—
|
|
|
28,502
|
|
|
—
|
|
|
|
||||||
Corporate securities
|
|
41,329
|
|
|
—
|
|
|
41,329
|
|
|
—
|
|
|
|
||||||
U.S. government and federal agency
|
|
4,564
|
|
|
—
|
|
|
4,564
|
|
|
—
|
|
|
|
||||||
Commercial mortgage-backed securities
|
|
426
|
|
|
—
|
|
|
426
|
|
|
—
|
|
|
|
||||||
Commercial paper
|
|
7,027
|
|
|
—
|
|
|
7,027
|
|
|
—
|
|
|
|
||||||
Index-linked U.S. bonds
|
|
2,316
|
|
|
—
|
|
|
2,316
|
|
|
—
|
|
|
|
||||||
Foreign fixed-income securities
|
|
650
|
|
|
—
|
|
|
650
|
|
|
—
|
|
|
|
||||||
Total fixed-income securities
|
|
84,814
|
|
|
—
|
|
|
84,814
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investment securities available for sale
|
|
150,489
|
|
|
65,675
|
|
|
84,814
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
366,672
|
|
|
$
|
235,580
|
|
|
$
|
131,092
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
76,413
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76,413
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term investments (3)
|
|
$
|
4,475
|
|
|
|
|
|
|
$
|
4,475
|
|
|
$
|
(525
|
)
|
||||
|
|
$
|
4,475
|
|
|
|
|
|
|
$
|
4,475
|
|
|
$
|
(525
|
)
|
(1)
|
Amounts included in cash and cash equivalents on the consolidated balance sheet.
|
(2)
|
Amounts included in current restricted assets and restricted assets on the consolidated balance sheet.
|
(3)
|
Long-term investments with a carrying amount of $5,000 were written down to their fair value of $4,475, resulting in an impairment charge of $525, which was included in earnings.
|
|
|
Fair Value Measurements as of December 31, 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 Losses
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds (1)
|
|
$
|
248,552
|
|
|
$
|
248,552
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial paper (1)
|
|
41,247
|
|
|
—
|
|
|
41,247
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certificates of deposit (2)
|
|
2,982
|
|
|
—
|
|
|
2,982
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bonds (2)
|
|
4,240
|
|
|
4,240
|
|
|
—
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
|
50,843
|
|
|
50,843
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Mutual funds invested in fixed-income securities
|
|
20,582
|
|
|
20,582
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. government securities
|
|
30,642
|
|
|
—
|
|
|
30,642
|
|
|
—
|
|
|
|
||||||
Corporate securities
|
|
36,687
|
|
|
—
|
|
|
36,687
|
|
|
—
|
|
|
|
||||||
U.S. government and federal agency
|
|
6,500
|
|
|
—
|
|
|
6,500
|
|
|
—
|
|
|
|
||||||
Commercial mortgage-backed securities
|
|
1,398
|
|
|
—
|
|
|
1,398
|
|
|
—
|
|
|
|
||||||
Commercial paper
|
|
8,980
|
|
|
—
|
|
|
8,980
|
|
|
—
|
|
|
|
||||||
Index-linked U.S. bonds
|
|
770
|
|
|
—
|
|
|
770
|
|
|
—
|
|
|
|
||||||
Foreign fixed-income securities
|
|
501
|
|
|
—
|
|
|
501
|
|
|
—
|
|
|
|
||||||
Total fixed-income securities
|
|
85,478
|
|
|
—
|
|
|
85,478
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investment securities available for sale
|
|
156,903
|
|
|
71,425
|
|
|
85,478
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
453,924
|
|
|
$
|
324,217
|
|
|
$
|
129,707
|
|
|
$
|
—
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
112,332
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112,332
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term investments (3)
|
|
$
|
6,396
|
|
|
|
|
|
|
$
|
6,396
|
|
|
$
|
(1,203
|
)
|
||||
|
|
$
|
6,396
|
|
|
|
|
|
|
$
|
6,396
|
|
|
$
|
(1,203
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts included in cash and cash equivalents on the consolidated balance sheet.
|
(2)
|
Amounts included in current restricted assets and restricted assets on the consolidated balance sheet.
|
(3)
|
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.
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||
|
|
Fair Value at
|
|
|
|
|
|
|
||||
|
|
December 31,
2017 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Actual)
|
||||
|
|
|
|
|
|
|
|
|
||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
76,413
|
|
|
Discounted cash flow
|
|
Assumed annual stock dividend
|
|
5
|
%
|
|
|
|
|
|
|
|
Assumed annual cash dividend
|
|
$
|
1.60
|
|
||
|
|
|
|
|
|
Stock price
|
|
$
|
22.38
|
|
||
|
|
|
|
|
|
Convertible trading price (as a percentage of par value)
|
|
115.19
|
%
|
|||
|
|
|
|
|
|
Volatility
|
|
17.98
|
%
|
|||
|
|
|
|
|
|
Risk-free rate
|
|
Term structure of US Treasury Securities
|
|
|||
|
|
|
|
|
|
Implied credit spread
|
|
3.0% - 4.0% (3.5%)
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||
|
|
Fair Value at
|
|
|
|
|
|
|
||||
|
|
December 31,
2016 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Actual)
|
||||
|
|
|
|
|
|
|
|
|
||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
112,332
|
|
|
Discounted cash flow
|
|
Assumed annual stock dividend
|
|
5
|
%
|
|
|
|
|
|
|
|
Assumed annual cash dividend
|
|
$
|
1.60
|
|
||
|
|
|
|
|
|
Stock price (1)
|
|
$
|
22.74
|
|
||
|
|
|
|
|
|
Convertible trading price (of par)
|
|
114.69
|
%
|
|||
|
|
|
|
|
|
Volatility
|
|
19.47
|
%
|
|||
|
|
|
|
|
|
Risk-free rate
|
|
Term structure of US Treasury Securities
|
|
|||
|
|
|
|
|
|
Implied credit spread
|
|
4.5% - 5.5% (5.0%)
|
|
|
|
|
|
|
Real
|
|
Corporate
|
|
|
||||||||||
|
Tobacco
|
|
E-Cigarettes
|
|
Estate
|
|
and Other
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,080,950
|
|
|
$
|
(838
|
)
|
|
$
|
727,364
|
|
|
$
|
—
|
|
|
$
|
1,807,476
|
|
Operating income (loss)
|
240,904
|
|
(1)
|
(888
|
)
|
|
21,439
|
|
|
(27,767
|
)
|
|
233,688
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
21,395
|
|
|
—
|
|
|
21,395
|
|
|||||
Identifiable assets
|
309,316
|
|
|
277
|
|
|
558,776
|
|
(4)
|
459,909
|
|
(5)
|
1,328,278
|
|
|||||
Depreciation and amortization
|
8,826
|
|
|
—
|
|
|
8,511
|
|
|
1,277
|
|
|
18,614
|
|
|||||
Capital expenditures
|
3,705
|
|
|
—
|
|
|
16,129
|
|
|
35
|
|
|
19,869
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,011,620
|
|
|
$
|
(776
|
)
|
|
$
|
680,105
|
|
|
$
|
—
|
|
|
$
|
1,690,949
|
|
Operating income (loss)
|
238,293
|
|
(2)
|
(1,403
|
)
|
|
23,001
|
|
|
(26,894
|
)
|
|
232,997
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
5,200
|
|
|
—
|
|
|
5,200
|
|
|||||
Identifiable assets
|
328,349
|
|
|
68
|
|
|
573,350
|
|
(4)
|
502,268
|
|
(5)
|
1,404,035
|
|
|||||
Depreciation and amortization
|
10,224
|
|
|
—
|
|
|
10,485
|
|
|
1,650
|
|
|
22,359
|
|
|||||
Capital expenditures
|
6,445
|
|
|
—
|
|
|
20,160
|
|
|
86
|
|
|
26,691
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,017,761
|
|
|
$
|
(1,970
|
)
|
|
$
|
641,406
|
|
|
$
|
—
|
|
|
$
|
1,657,197
|
|
Operating income (loss)
|
209,393
|
|
(3)
|
(13,037
|
)
|
|
24,087
|
|
|
(20,523
|
)
|
|
199,920
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
2,001
|
|
|
—
|
|
|
2,001
|
|
|||||
Identifiable assets
|
344,033
|
|
|
985
|
|
|
585,098
|
|
(4)
|
350,499
|
|
(5)
|
1,280,615
|
|
|||||
Depreciation and amortization
|
11,323
|
|
|
—
|
|
|
12,589
|
|
|
1,742
|
|
|
25,654
|
|
|||||
Capital expenditures
|
3,730
|
|
|
—
|
|
|
7,247
|
|
|
—
|
|
|
10,977
|
|
|||||
|
|
|
|
|
|
|
|
|
|
(1)
|
Operating income includes $2,721 of income from MSA Settlement, and $6,591 of litigation judgment expense.
|
(2)
|
Operating income includes $247 of expense from MSA Settlement, $20,000 of litigation judgment expense, and $41 of restructuring expense.
|
(3)
|
Operating income includes $4,364 of income from MSA Settlement, $20,072 of litigation settlement and judgment expense, $7,257 of restructuring expense, and $1,607 of pension settlement expense.
|
(4)
|
Includes real estate investments accounted for under the equity method of accounting of $188,131, $221,258 and $217,168 as of December 31, 2017, 2016 and 2015, respectively.
|
(5)
|
Corporate and Other identifiable assets primarily includes cash of $195,053, investment securities of $150,489, long-term investments accounted at cost of $65,450, and long-term investments accounted for under the equity method of accounting of $15,841 as of December 31, 2017. Corporate and other identifiable assets primarily includes cash of $280,691, investment securities of $156,903, long-term investments accounted at cost of $34,975, and long-term investments accounted for under the equity method of accounting of $17,721 as of December 31, 2016. Corporate and other identifiable assets primarily includes cash of $112,130, investment securities of $181,976, long-term investments accounted at cost of $40,730, and long-term investments accounted for under the equity method of accounting of $21,495 as of December 31, 2015.
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
||||||||
|
2017
|
|
2017
|
|
2017
|
|
2017
|
||||||||
Revenues
|
$
|
435,654
|
|
|
$
|
484,625
|
|
|
$
|
471,989
|
|
|
$
|
415,208
|
|
Gross Profit
|
136,541
|
|
|
146,509
|
|
|
157,095
|
|
|
139,285
|
|
||||
Operating income
|
47,714
|
|
|
59,233
|
|
|
73,810
|
|
|
52,931
|
|
||||
Net income (loss) applicable to common shares attributed to Vector Group Ltd.
|
$
|
42,724
|
|
|
$
|
19,264
|
|
|
$
|
26,811
|
|
|
$
|
(4,227
|
)
|
Per basic common share (1):
|
|
|
|
|
|
|
|
||||||||
Net income (loss) applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.31
|
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
(0.04
|
)
|
Per diluted common share (1):
|
|
|
|
|
|
|
|
||||||||
Net income (loss) applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.27
|
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
(0.04
|
)
|
(1)
|
Per share computations include the impact of a 5% stock dividend paid on September 28, 2017. Quarterly basic and diluted net income per common share were computed independently for each quarter and do not necessarily total to the year to date basic and diluted net income per common share.
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
||||||||
|
2016
|
|
2016
|
|
2016
|
|
2016
|
||||||||
Revenues
|
$
|
412,772
|
|
|
$
|
459,104
|
|
|
$
|
438,273
|
|
|
$
|
380,800
|
|
Gross Profit
|
138,923
|
|
|
155,662
|
|
|
154,642
|
|
|
144,378
|
|
||||
Operating income
|
30,754
|
|
|
69,364
|
|
|
70,720
|
|
|
62,159
|
|
||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
4,599
|
|
|
$
|
23,175
|
|
|
$
|
24,015
|
|
|
$
|
19,338
|
|
Per basic common share (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.03
|
|
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
Per diluted common share (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.03
|
|
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
(1)
|
Per share computations include the impact of a 5% stock dividend paid on September 29, 2016. Quarterly basic and diluted net income per common share were computed independently for each quarter and do not necessarily total to the year to date basic and diluted net income per common share.
|
|
|
|
December 31, 2017
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
194,719
|
|
|
$
|
17,141
|
|
|
$
|
89,493
|
|
|
$
|
—
|
|
|
$
|
301,353
|
|
Investment securities available for sale
|
121,282
|
|
|
29,207
|
|
|
—
|
|
|
—
|
|
|
150,489
|
|
|||||
Accounts receivable - trade, net
|
—
|
|
|
15,736
|
|
|
13,745
|
|
|
—
|
|
|
29,481
|
|
|||||
Intercompany receivables
|
29,541
|
|
|
—
|
|
|
—
|
|
|
(29,541
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
89,790
|
|
|
—
|
|
|
—
|
|
|
89,790
|
|
|||||
Income taxes receivable, net
|
22,661
|
|
|
—
|
|
|
—
|
|
|
(11,444
|
)
|
|
11,217
|
|
|||||
Restricted assets
|
—
|
|
|
3,052
|
|
|
7,206
|
|
|
—
|
|
|
10,258
|
|
|||||
Other current assets
|
20,549
|
|
|
3,429
|
|
|
17,151
|
|
|
(20,008
|
)
|
|
21,121
|
|
|||||
Total current assets
|
388,752
|
|
|
158,355
|
|
|
127,595
|
|
|
(60,993
|
)
|
|
613,709
|
|
|||||
Property, plant and equipment, net
|
696
|
|
|
42,493
|
|
|
42,327
|
|
|
—
|
|
|
85,516
|
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
23,952
|
|
|
—
|
|
|
23,952
|
|
|||||
Long-term investments
|
81,291
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,291
|
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
188,131
|
|
|
—
|
|
|
188,131
|
|
|||||
Investments in consolidated subsidiaries
|
469,436
|
|
|
—
|
|
|
—
|
|
|
(469,436
|
)
|
|
—
|
|
|||||
Restricted assets
|
1,501
|
|
|
1,987
|
|
|
—
|
|
|
—
|
|
|
3,488
|
|
|||||
Goodwill and other intangible assets, net
|
—
|
|
|
107,511
|
|
|
160,197
|
|
|
—
|
|
|
267,708
|
|
|||||
Prepaid pension costs
|
—
|
|
|
27,697
|
|
|
—
|
|
|
—
|
|
|
27,697
|
|
|||||
Other assets
|
7,843
|
|
|
12,355
|
|
|
16,588
|
|
|
—
|
|
|
36,786
|
|
|||||
Total assets
|
$
|
949,519
|
|
|
$
|
350,398
|
|
|
$
|
558,790
|
|
|
$
|
(530,429
|
)
|
|
$
|
1,328,278
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of notes payable and long-term debt
|
$
|
—
|
|
|
$
|
53,540
|
|
|
$
|
288
|
|
|
$
|
(20,008
|
)
|
|
$
|
33,820
|
|
Current portion of employee benefits
|
—
|
|
|
952
|
|
|
—
|
|
|
—
|
|
|
952
|
|
|||||
Intercompany payables
|
—
|
|
|
449
|
|
|
29,092
|
|
|
(29,541
|
)
|
|
—
|
|
|||||
Income taxes payable, net
|
—
|
|
|
11,542
|
|
|
2
|
|
|
(11,444
|
)
|
|
100
|
|
|||||
Litigation accruals and current payments due under the Master Settlement Agreement
|
—
|
|
|
12,644
|
|
|
—
|
|
|
—
|
|
|
12,644
|
|
|||||
Other current liabilities
|
49,088
|
|
|
62,353
|
|
|
45,682
|
|
|
—
|
|
|
157,123
|
|
|||||
Total current liabilities
|
49,088
|
|
|
141,480
|
|
|
75,064
|
|
|
(60,993
|
)
|
|
204,639
|
|
|||||
Notes payable, long-term debt and other obligations, less current portion
|
1,190,333
|
|
|
3,448
|
|
|
463
|
|
|
—
|
|
|
1,194,244
|
|
|||||
Fair value of derivatives embedded within convertible debt
|
76,413
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,413
|
|
|||||
Non-current employee benefits
|
45,442
|
|
|
16,800
|
|
|
—
|
|
|
—
|
|
|
62,242
|
|
|||||
Deferred income taxes, net
|
695
|
|
|
26,459
|
|
|
31,647
|
|
|
—
|
|
|
58,801
|
|
|||||
Other liabilities, primarily litigation accruals and payments due under the Master Settlement Agreement
|
1,467
|
|
|
41,315
|
|
|
20,917
|
|
|
—
|
|
|
63,699
|
|
|||||
Total liabilities
|
1,363,438
|
|
|
229,502
|
|
|
128,091
|
|
|
(60,993
|
)
|
|
1,660,038
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' (deficiency) equity attributed to Vector Group Ltd.
|
(413,919
|
)
|
|
120,896
|
|
|
348,540
|
|
|
(469,436
|
)
|
|
(413,919
|
)
|
|||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
82,159
|
|
|
—
|
|
|
82,159
|
|
|||||
Total stockholders' (deficiency) equity
|
(413,919
|
)
|
|
120,896
|
|
|
430,699
|
|
|
(469,436
|
)
|
|
(331,760
|
)
|
|||||
Total liabilities and stockholders' deficiency
|
$
|
949,519
|
|
|
$
|
350,398
|
|
|
$
|
558,790
|
|
|
$
|
(530,429
|
)
|
|
$
|
1,328,278
|
|
|
|
|
December 31, 2016
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
279,815
|
|
|
$
|
14,798
|
|
|
$
|
98,917
|
|
|
$
|
—
|
|
|
$
|
393,530
|
|
Investment securities available for sale
|
121,016
|
|
|
35,887
|
|
|
—
|
|
|
—
|
|
|
156,903
|
|
|||||
Accounts receivable - trade, net
|
—
|
|
|
11,775
|
|
|
7,026
|
|
|
—
|
|
|
18,801
|
|
|||||
Intercompany receivables
|
22,789
|
|
|
—
|
|
|
—
|
|
|
(22,789
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
89,834
|
|
|
—
|
|
|
—
|
|
|
89,834
|
|
|||||
Income taxes receivable, net
|
18,387
|
|
|
—
|
|
|
—
|
|
|
(2,277
|
)
|
|
16,110
|
|
|||||
Restricted assets
|
—
|
|
|
6,416
|
|
|
914
|
|
|
—
|
|
|
7,330
|
|
|||||
Other current assets
|
517
|
|
|
4,428
|
|
|
18,010
|
|
|
—
|
|
|
22,955
|
|
|||||
Total current assets
|
442,524
|
|
|
163,138
|
|
|
124,867
|
|
|
(25,066
|
)
|
|
705,463
|
|
|||||
Property, plant and equipment, net
|
1,134
|
|
|
48,314
|
|
|
31,000
|
|
|
—
|
|
|
80,448
|
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
23,640
|
|
|
—
|
|
|
23,640
|
|
|||||
Long-term investments
|
52,308
|
|
|
388
|
|
|
501
|
|
|
—
|
|
|
53,197
|
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
221,258
|
|
|
—
|
|
|
221,258
|
|
|||||
Investments in consolidated subsidiaries
|
501,659
|
|
|
—
|
|
|
—
|
|
|
(501,659
|
)
|
|
—
|
|
|||||
Restricted assets
|
1,728
|
|
|
2,258
|
|
|
—
|
|
|
—
|
|
|
3,986
|
|
|||||
Goodwill and other intangible assets,net
|
—
|
|
|
107,511
|
|
|
154,407
|
|
|
—
|
|
|
261,918
|
|
|||||
Prepaid pension costs
|
—
|
|
|
22,273
|
|
|
—
|
|
|
—
|
|
|
22,273
|
|
|||||
Other assets
|
7,534
|
|
|
12,118
|
|
|
12,200
|
|
|
—
|
|
|
31,852
|
|
|||||
Total assets
|
$
|
1,006,887
|
|
|
$
|
356,000
|
|
|
$
|
567,873
|
|
|
$
|
(526,725
|
)
|
|
$
|
1,404,035
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of notes payable and long-term debt
|
$
|
—
|
|
|
$
|
39,333
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
39,508
|
|
Current portion of employee benefits
|
—
|
|
|
937
|
|
|
—
|
|
|
—
|
|
|
937
|
|
|||||
Intercompany payables
|
—
|
|
|
24
|
|
|
22,765
|
|
|
(22,789
|
)
|
|
—
|
|
|||||
Income taxes payable, net
|
—
|
|
|
1,089
|
|
|
1,188
|
|
|
(2,277
|
)
|
|
—
|
|
|||||
Litigation accruals and current payments due under the Master Settlement Agreement
|
—
|
|
|
19,851
|
|
|
—
|
|
|
—
|
|
|
19,851
|
|
|||||
Other current liabilities
|
47,968
|
|
|
49,492
|
|
|
38,392
|
|
|
—
|
|
|
135,852
|
|
|||||
Total current liabilities
|
47,968
|
|
|
110,726
|
|
|
62,520
|
|
|
(25,066
|
)
|
|
196,148
|
|
|||||
Notes payable, long-term debt and other obligations, less current portion
|
1,127,180
|
|
|
5,372
|
|
|
391
|
|
|
—
|
|
|
1,132,943
|
|
|||||
Fair value of derivatives embedded within convertible debt
|
112,332
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112,332
|
|
|||||
Non-current employee benefits
|
42,818
|
|
|
16,140
|
|
|
—
|
|
|
—
|
|
|
58,958
|
|
|||||
Deferred income taxes, net
|
7,420
|
|
|
40,136
|
|
|
45,529
|
|
|
—
|
|
|
93,085
|
|
|||||
Other liabilities, primarily litigation accruals and payments due under the Master Settlement Agreement
|
1,169
|
|
|
49,861
|
|
|
12,811
|
|
|
—
|
|
|
63,841
|
|
|||||
Total liabilities
|
1,338,887
|
|
|
222,235
|
|
|
121,251
|
|
|
(25,066
|
)
|
|
1,657,307
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' (deficiency) equity attributed to Vector Group Ltd.
|
(332,000
|
)
|
|
133,765
|
|
|
367,894
|
|
|
(501,659
|
)
|
|
(332,000
|
)
|
|||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
78,728
|
|
|
—
|
|
|
78,728
|
|
|||||
Total stockholders' (deficiency) equity
|
(332,000
|
)
|
|
133,765
|
|
|
446,622
|
|
|
(501,659
|
)
|
|
(253,272
|
)
|
|||||
Total liabilities and stockholders' deficiency
|
$
|
1,006,887
|
|
|
$
|
356,000
|
|
|
$
|
567,873
|
|
|
$
|
(526,725
|
)
|
|
$
|
1,404,035
|
|
|
|
|
Year Ended December 31, 2017
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,080,590
|
|
|
$
|
727,364
|
|
|
$
|
(478
|
)
|
|
$
|
1,807,476
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
750,768
|
|
|
477,278
|
|
|
—
|
|
|
1,228,046
|
|
|||||
Operating, selling, administrative and general expenses
|
37,256
|
|
|
73,601
|
|
|
228,772
|
|
|
(478
|
)
|
|
339,151
|
|
|||||
Litigation settlement and judgment expense
|
—
|
|
|
6,591
|
|
|
—
|
|
|
—
|
|
|
6,591
|
|
|||||
Management fee expense
|
—
|
|
|
11,069
|
|
|
—
|
|
|
(11,069
|
)
|
|
—
|
|
|||||
Operating (loss) income
|
(37,256
|
)
|
|
238,561
|
|
|
21,314
|
|
|
11,069
|
|
|
233,688
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(169,910
|
)
|
|
(3,740
|
)
|
|
(35
|
)
|
|
—
|
|
|
(173,685
|
)
|
|||||
Change in fair value of derivatives embedded within convertible debt
|
35,919
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,919
|
|
|||||
Loss on extinguishment of debt
|
(34,110
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,110
|
)
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
21,395
|
|
|
—
|
|
|
21,395
|
|
|||||
Equity in losses from investments
|
(729
|
)
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(765
|
)
|
|||||
Gain on sale of investment securities available for sale
|
169
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
169
|
|
|||||
Impairment of investment securities available for sale
|
(465
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(465
|
)
|
|||||
Equity in earnings in consolidated subsidiaries
|
200,480
|
|
|
—
|
|
|
—
|
|
|
(200,480
|
)
|
|
—
|
|
|||||
Management fee income
|
11,069
|
|
|
—
|
|
|
—
|
|
|
(11,069
|
)
|
|
—
|
|
|||||
Other, net
|
4,067
|
|
|
1,631
|
|
|
1,324
|
|
|
—
|
|
|
7,022
|
|
|||||
Income before provision for income taxes
|
9,234
|
|
|
236,416
|
|
|
43,998
|
|
|
(200,480
|
)
|
|
89,168
|
|
|||||
Income tax benefit (expense)
|
75,338
|
|
|
(73,546
|
)
|
|
(210
|
)
|
|
—
|
|
|
1,582
|
|
|||||
Net income
|
84,572
|
|
|
162,870
|
|
|
43,788
|
|
|
(200,480
|
)
|
|
90,750
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(6,178
|
)
|
|
—
|
|
|
(6,178
|
)
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
84,572
|
|
|
$
|
162,870
|
|
|
$
|
37,610
|
|
|
$
|
(200,480
|
)
|
|
$
|
84,572
|
|
Comprehensive income attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,178
|
)
|
|
$
|
—
|
|
|
$
|
(6,178
|
)
|
Comprehensive income attributed to Vector Group Ltd.
|
$
|
83,246
|
|
|
$
|
161,577
|
|
|
$
|
37,610
|
|
|
$
|
(199,187
|
)
|
|
$
|
83,246
|
|
|
|
|
Year Ended December 31, 2016
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,011,322
|
|
|
$
|
680,105
|
|
|
$
|
(478
|
)
|
|
$
|
1,690,949
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
672,515
|
|
|
424,829
|
|
|
—
|
|
|
1,097,344
|
|
|||||
Operating, selling, administrative and general expenses
|
36,242
|
|
|
72,359
|
|
|
232,444
|
|
|
(478
|
)
|
|
340,567
|
|
|||||
Litigation settlement and judgment expense
|
—
|
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|||||
Management fee expense
|
—
|
|
|
10,649
|
|
|
—
|
|
|
(10,649
|
)
|
|
—
|
|
|||||
Restructuring charges
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|||||
Operating (loss) income
|
(36,242
|
)
|
|
235,758
|
|
|
22,832
|
|
|
10,649
|
|
|
232,997
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(139,524
|
)
|
|
(3,438
|
)
|
|
(20
|
)
|
|
—
|
|
|
(142,982
|
)
|
|||||
Change in fair value of derivatives embedded within convertible debt
|
31,710
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,710
|
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
5,200
|
|
|
—
|
|
|
5,200
|
|
|||||
Equity in losses from investments
|
(2,664
|
)
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
(2,754
|
)
|
|||||
Gain on sale of investment securities available for sale
|
376
|
|
|
2,531
|
|
|
—
|
|
|
—
|
|
|
2,907
|
|
|||||
Impairment of investment securities available for sale
|
(609
|
)
|
|
(4,772
|
)
|
|
—
|
|
|
—
|
|
|
(5,381
|
)
|
|||||
Equity in earnings in consolidated subsidiaries
|
161,471
|
|
|
—
|
|
|
—
|
|
|
(161,471
|
)
|
|
—
|
|
|||||
Management fee income
|
10,649
|
|
|
—
|
|
|
—
|
|
|
(10,649
|
)
|
|
—
|
|
|||||
Other, net
|
2,780
|
|
|
1,013
|
|
|
939
|
|
|
—
|
|
|
4,732
|
|
|||||
Income before provision for income taxes
|
27,947
|
|
|
231,002
|
|
|
28,951
|
|
|
(161,471
|
)
|
|
126,429
|
|
|||||
Income tax benefit (expense)
|
43,180
|
|
|
(83,008
|
)
|
|
(9,335
|
)
|
|
—
|
|
|
(49,163
|
)
|
|||||
Net income
|
71,127
|
|
|
147,994
|
|
|
19,616
|
|
|
(161,471
|
)
|
|
77,266
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(6,139
|
)
|
|
—
|
|
|
(6,139
|
)
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
71,127
|
|
|
$
|
147,994
|
|
|
$
|
13,477
|
|
|
$
|
(161,471
|
)
|
|
$
|
71,127
|
|
Comprehensive income attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,139
|
)
|
|
$
|
—
|
|
|
$
|
(6,139
|
)
|
Comprehensive income attributed to Vector Group Ltd.
|
$
|
68,195
|
|
|
$
|
146,841
|
|
|
$
|
13,477
|
|
|
$
|
(160,318
|
)
|
|
$
|
68,195
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||
|
Parent/
Issuer
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Non-
Guarantors
|
|
Consolidating
Adjustments
|
|
Consolidated
Vector Group
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,016,279
|
|
|
$
|
641,406
|
|
|
$
|
(488
|
)
|
|
$
|
1,657,197
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of sales
|
—
|
|
|
699,440
|
|
|
410,287
|
|
|
—
|
|
|
1,109,727
|
|
|||||
Operating, selling, administrative and general expenses
|
29,237
|
|
|
84,437
|
|
|
207,035
|
|
|
(488
|
)
|
|
320,221
|
|
|||||
Litigation settlement and judgment expense
|
—
|
|
|
20,072
|
|
|
—
|
|
|
—
|
|
|
20,072
|
|
|||||
Restructuring charges
|
—
|
|
|
7,257
|
|
|
—
|
|
|
—
|
|
|
7,257
|
|
|||||
Management fee expense
|
—
|
|
|
10,250
|
|
|
—
|
|
|
(10,250
|
)
|
|
—
|
|
|||||
Operating (loss) income
|
(29,237
|
)
|
|
194,823
|
|
|
24,084
|
|
|
10,250
|
|
|
199,920
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
(115,731
|
)
|
|
(4,953
|
)
|
|
(7
|
)
|
|
—
|
|
|
(120,691
|
)
|
|||||
Changes in fair value of derivatives embedded within convertible debt
|
24,455
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,455
|
|
|||||
Impairment of investment securities available for sale
|
(4,859
|
)
|
|
(7,987
|
)
|
|
—
|
|
|
—
|
|
|
(12,846
|
)
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
2,001
|
|
|
—
|
|
|
2,001
|
|
|||||
(Loss) gain on sale of investment securities available for sale
|
(2,037
|
)
|
|
13,175
|
|
|
—
|
|
|
—
|
|
|
11,138
|
|
|||||
Equity in losses from investments
|
(2,640
|
)
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
(2,681
|
)
|
|||||
Equity in earnings in consolidated subsidiaries
|
125,042
|
|
|
—
|
|
|
—
|
|
|
(125,042
|
)
|
|
—
|
|
|||||
Management fee income
|
10,250
|
|
|
—
|
|
|
—
|
|
|
(10,250
|
)
|
|
—
|
|
|||||
Other, net
|
4,016
|
|
|
639
|
|
|
1,754
|
|
|
—
|
|
|
6,409
|
|
|||||
Income before provision for income taxes
|
9,259
|
|
|
195,656
|
|
|
27,832
|
|
|
(125,042
|
)
|
|
107,705
|
|
|||||
Income tax benefit (expense)
|
49,939
|
|
|
(82,282
|
)
|
|
(8,890
|
)
|
|
—
|
|
|
(41,233
|
)
|
|||||
Net income
|
59,198
|
|
|
113,374
|
|
|
18,942
|
|
|
(125,042
|
)
|
|
66,472
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(7,274
|
)
|
|
—
|
|
|
(7,274
|
)
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
59,198
|
|
|
$
|
113,374
|
|
|
$
|
11,668
|
|
|
$
|
(125,042
|
)
|
|
$
|
59,198
|
|
Comprehensive income attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,274
|
)
|
|
$
|
—
|
|
|
$
|
(7,274
|
)
|
Comprehensive income attributed to Vector Group Ltd.
|
$
|
52,228
|
|
|
$
|
105,456
|
|
|
$
|
11,668
|
|
|
$
|
(117,124
|
)
|
|
$
|
52,228
|
|
|
|
|
Year Ended December 31, 2017
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Net cash provided by operating activities
|
$
|
177,259
|
|
|
$
|
164,449
|
|
|
$
|
59,202
|
|
|
$
|
(269,324
|
)
|
|
$
|
131,586
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sale of investment securities
|
28,761
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,761
|
|
|||||
Maturities of investment securities
|
101,097
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101,097
|
|
|||||
Purchase of investment securities
|
(132,654
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(132,654
|
)
|
|||||
Proceeds from sale or liquidation of long-term investments
|
500
|
|
|
—
|
|
|
466
|
|
|
—
|
|
|
966
|
|
|||||
Purchase of long-term investments
|
(31,650
|
)
|
|
—
|
|
|
(860
|
)
|
|
—
|
|
|
(32,510
|
)
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
(38,807
|
)
|
|
—
|
|
|
(38,807
|
)
|
|||||
Distributions from real estate ventures
|
—
|
|
|
—
|
|
|
61,718
|
|
|
—
|
|
|
61,718
|
|
|||||
Increase in cash surrender value of life insurance policies
|
(318
|
)
|
|
(484
|
)
|
|
—
|
|
|
—
|
|
|
(802
|
)
|
|||||
Decrease (increase) in restricted assets
|
227
|
|
|
3,635
|
|
|
(6,148
|
)
|
|
—
|
|
|
(2,286
|
)
|
|||||
Issuance of notes receivable
|
(20,000
|
)
|
|
—
|
|
|
(1,633
|
)
|
|
20,000
|
|
|
(1,633
|
)
|
|||||
Investments in subsidiaries
|
(38,458
|
)
|
|
—
|
|
|
—
|
|
|
38,458
|
|
|
—
|
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|||||
Purchase of subsidiaries
|
—
|
|
|
—
|
|
|
(6,569
|
)
|
|
—
|
|
|
(6,569
|
)
|
|||||
Capital expenditures
|
(35
|
)
|
|
(3,705
|
)
|
|
(16,129
|
)
|
|
—
|
|
|
(19,869
|
)
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
(619
|
)
|
|
—
|
|
|
(619
|
)
|
|||||
Pay down of investment securities
|
2,633
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,633
|
|
|||||
Net cash used in investing activities
|
(89,897
|
)
|
|
(478
|
)
|
|
(8,581
|
)
|
|
58,458
|
|
|
(40,498
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
850,000
|
|
|
20,000
|
|
|
21
|
|
|
(20,000
|
)
|
|
850,021
|
|
|||||
Deferred financing costs
|
(19,200
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,200
|
)
|
|||||
Repayments of debt
|
(835,000
|
)
|
|
(1,882
|
)
|
|
(323
|
)
|
|
—
|
|
|
(837,205
|
)
|
|||||
Borrowings under revolver
|
—
|
|
|
157,630
|
|
|
—
|
|
|
—
|
|
|
157,630
|
|
|||||
Repayments on revolver
|
—
|
|
|
(163,474
|
)
|
|
—
|
|
|
—
|
|
|
(163,474
|
)
|
|||||
Capital contributions received
|
—
|
|
|
2,400
|
|
|
36,058
|
|
|
(38,458
|
)
|
|
—
|
|
|||||
Intercompany dividends paid
|
—
|
|
|
(176,302
|
)
|
|
(93,022
|
)
|
|
269,324
|
|
|
—
|
|
|||||
Dividends and distributions on common stock
|
(211,488
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(211,488
|
)
|
|||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
(2,779
|
)
|
|
—
|
|
|
(2,779
|
)
|
|||||
Proceeds from the issuance of Vector stock
|
43,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,230
|
|
|||||
Net cash used in financing activities
|
(172,458
|
)
|
|
(161,628
|
)
|
|
(60,045
|
)
|
|
210,866
|
|
|
(183,265
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(85,096
|
)
|
|
2,343
|
|
|
(9,424
|
)
|
|
—
|
|
|
(92,177
|
)
|
|||||
Cash and cash equivalents, beginning of year
|
279,815
|
|
|
14,798
|
|
|
98,917
|
|
|
—
|
|
|
393,530
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
194,719
|
|
|
$
|
17,141
|
|
|
$
|
89,493
|
|
|
$
|
—
|
|
|
$
|
301,353
|
|
|
|
|
Year Ended December 31, 2016
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Net cash provided by operating activities
|
$
|
135,820
|
|
|
$
|
112,562
|
|
|
$
|
60,640
|
|
|
$
|
(211,386
|
)
|
|
$
|
97,636
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sale of investment securities
|
105,815
|
|
|
10,255
|
|
|
—
|
|
|
—
|
|
|
116,070
|
|
|||||
Maturities of investment securities
|
10,822
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,822
|
|
|||||
Purchase of investment securities
|
(117,211
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(117,211
|
)
|
|||||
Proceeds from sale or liquidation of long-term investments
|
4,552
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,552
|
|
|||||
Purchase of long-term investments
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
(44,107
|
)
|
|
—
|
|
|
(44,107
|
)
|
|||||
Distributions from real estate ventures
|
—
|
|
|
—
|
|
|
33,204
|
|
|
—
|
|
|
33,204
|
|
|||||
Increase in cash surrender value of life insurance policies
|
—
|
|
|
(484
|
)
|
|
—
|
|
|
—
|
|
|
(484
|
)
|
|||||
(Increase) decrease in restricted assets
|
(15
|
)
|
|
9,696
|
|
|
500
|
|
|
—
|
|
|
10,181
|
|
|||||
Investments in subsidiaries
|
(19,219
|
)
|
|
—
|
|
|
—
|
|
|
19,219
|
|
|
—
|
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
32
|
|
|
13
|
|
|
—
|
|
|
45
|
|
|||||
Purchase of subsidiaries
|
—
|
|
|
—
|
|
|
(250
|
)
|
|
—
|
|
|
(250
|
)
|
|||||
Repayments of notes receivable
|
—
|
|
|
—
|
|
|
4,410
|
|
|
—
|
|
|
4,410
|
|
|||||
Capital expenditures
|
(86
|
)
|
|
(6,445
|
)
|
|
(20,160
|
)
|
|
—
|
|
|
(26,691
|
)
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
(245
|
)
|
|
—
|
|
|
(245
|
)
|
|||||
Pay downs of investment securities
|
9,212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,212
|
|
|||||
Net cash (used in) provided by investing activities
|
(6,130
|
)
|
|
13,054
|
|
|
(26,685
|
)
|
|
19,219
|
|
|
(542
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
243,225
|
|
|
—
|
|
|
395
|
|
|
—
|
|
|
243,620
|
|
|||||
Deferred financing costs
|
(6,600
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,600
|
)
|
|||||
Repayments of debt
|
—
|
|
|
(5,226
|
)
|
|
(139
|
)
|
|
—
|
|
|
(5,365
|
)
|
|||||
Borrowings under revolver
|
—
|
|
|
144,294
|
|
|
—
|
|
|
—
|
|
|
144,294
|
|
|||||
Repayments on revolver
|
—
|
|
|
(110,614
|
)
|
|
—
|
|
|
—
|
|
|
(110,614
|
)
|
|||||
Capital contributions received
|
—
|
|
|
2,800
|
|
|
16,419
|
|
|
(19,219
|
)
|
|
—
|
|
|||||
Intercompany dividends paid
|
—
|
|
|
(154,447
|
)
|
|
(56,939
|
)
|
|
211,386
|
|
|
—
|
|
|||||
Dividends and distributions on common stock
|
(198,947
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(198,947
|
)
|
|||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
(11,545
|
)
|
|
—
|
|
|
(11,545
|
)
|
|||||
Contributions from non-controlling interest
|
—
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|
248
|
|
|||||
Proceeds from exercise of Vector options
|
398
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
398
|
|
|||||
Tax benefit of options exercised
|
579
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
579
|
|
|||||
Net cash provided by (used in) financing activities
|
38,655
|
|
|
(123,193
|
)
|
|
(51,561
|
)
|
|
192,167
|
|
|
56,068
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
168,345
|
|
|
2,423
|
|
|
(17,606
|
)
|
|
—
|
|
|
153,162
|
|
|||||
Cash and cash equivalents, beginning of year
|
111,470
|
|
|
12,375
|
|
|
116,523
|
|
|
—
|
|
|
240,368
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
279,815
|
|
|
$
|
14,798
|
|
|
$
|
98,917
|
|
|
$
|
—
|
|
|
$
|
393,530
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||
|
Parent/
Issuer
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Non-
Guarantors
|
|
Consolidating
Adjustments
|
|
Consolidated
Vector Group
Ltd.
|
||||||||||
Net cash provided by operating activities
|
$
|
136,370
|
|
|
$
|
172,065
|
|
|
$
|
45,715
|
|
|
$
|
(209,671
|
)
|
|
$
|
144,479
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sale of investment securities
|
256,161
|
|
|
14,415
|
|
|
—
|
|
|
—
|
|
|
270,576
|
|
|||||
Maturities of investment securities
|
5,491
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,491
|
|
|||||
Purchase of investment securities
|
(207,822
|
)
|
|
(6,324
|
)
|
|
—
|
|
|
—
|
|
|
(214,146
|
)
|
|||||
Proceeds from sale or liquidation of long-term investments
|
1,106
|
|
|
—
|
|
|
197
|
|
|
—
|
|
|
1,303
|
|
|||||
Purchase of long-term investments
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,000
|
)
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
(70,272
|
)
|
|
—
|
|
|
(70,272
|
)
|
|||||
Distributions from real estate ventures
|
—
|
|
|
—
|
|
|
17,563
|
|
|
—
|
|
|
17,563
|
|
|||||
Increase in cash surrender value of life insurance policies
|
(1,257
|
)
|
|
(485
|
)
|
|
—
|
|
|
—
|
|
|
(1,742
|
)
|
|||||
Increase in restricted assets
|
(6
|
)
|
|
(6,883
|
)
|
|
—
|
|
|
—
|
|
|
(6,889
|
)
|
|||||
Issuance of notes receivable
|
—
|
|
|
—
|
|
|
(4,410
|
)
|
|
—
|
|
|
(4,410
|
)
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Repayments of notes receivable
|
—
|
|
|
—
|
|
|
4,000
|
|
|
—
|
|
|
4,000
|
|
|||||
Investments in subsidiaries
|
(103,174
|
)
|
|
—
|
|
|
—
|
|
|
103,174
|
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
(3,730
|
)
|
|
(7,247
|
)
|
|
—
|
|
|
(10,977
|
)
|
|||||
Proceeds from sale of preferred securities
|
—
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
(12,603
|
)
|
|
—
|
|
|
(12,603
|
)
|
|||||
Pay downs of investment securities
|
8,739
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,739
|
|
|||||
Net cash used in investing activities
|
(50,762
|
)
|
|
(3,003
|
)
|
|
(71,772
|
)
|
|
103,174
|
|
|
(22,363
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of debt
|
—
|
|
|
1,799
|
|
|
306
|
|
|
—
|
|
|
2,105
|
|
|||||
Repayments of debt
|
—
|
|
|
(6,362
|
)
|
|
(322
|
)
|
|
—
|
|
|
(6,684
|
)
|
|||||
Deferred financing costs
|
—
|
|
|
(624
|
)
|
|
—
|
|
|
—
|
|
|
(624
|
)
|
|||||
Borrowings under revolver
|
—
|
|
|
153,361
|
|
|
—
|
|
|
—
|
|
|
153,361
|
|
|||||
Repayments on revolver
|
—
|
|
|
(167,915
|
)
|
|
—
|
|
|
—
|
|
|
(167,915
|
)
|
|||||
Capital contributions received
|
—
|
|
|
33,658
|
|
|
69,516
|
|
|
(103,174
|
)
|
|
—
|
|
|||||
Intercompany dividends paid
|
—
|
|
|
(181,825
|
)
|
|
(29,343
|
)
|
|
211,168
|
|
|
—
|
|
|||||
Dividends and distributions on common stock
|
(188,151
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(188,151
|
)
|
|||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
(3,280
|
)
|
|
—
|
|
|
(3,280
|
)
|
|||||
Contributions from non-controlling interest
|
—
|
|
|
—
|
|
|
813
|
|
|
—
|
|
|
813
|
|
|||||
Proceeds from exercise of Vector options
|
1,441
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,441
|
|
|||||
Tax benefit of options exercised
|
821
|
|
|
1,497
|
|
|
—
|
|
|
(1,497
|
)
|
|
821
|
|
|||||
Net cash (used in) provided by financing activities
|
(185,889
|
)
|
|
(166,411
|
)
|
|
37,690
|
|
|
106,497
|
|
|
(208,113
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(100,281
|
)
|
|
2,651
|
|
|
11,633
|
|
|
—
|
|
|
(85,997
|
)
|
|||||
Cash and cash equivalents, beginning of year
|
211,751
|
|
|
9,724
|
|
|
104,890
|
|
|
—
|
|
|
326,365
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
111,470
|
|
|
$
|
12,375
|
|
|
$
|
116,523
|
|
|
$
|
—
|
|
|
$
|
240,368
|
|
Description
|
|
Balance at
Beginning
of Period
|
|
Additions
Charged to
Costs and
Expenses
|
|
Deductions
|
|
Balance
at End
of Period
|
||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowances for:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Doubtful accounts
|
|
$
|
88
|
|
|
$
|
63
|
|
|
$
|
118
|
|
|
$
|
33
|
|
Cash discounts
|
|
273
|
|
|
27,685
|
|
|
27,593
|
|
|
365
|
|
||||
Deferred tax valuation allowance
|
|
4,439
|
|
|
—
|
|
|
775
|
|
|
3,664
|
|
||||
Sales returns
|
|
6,558
|
|
|
3,070
|
|
|
3,996
|
|
|
5,632
|
|
||||
Total
|
|
$
|
11,358
|
|
|
$
|
30,818
|
|
|
$
|
32,482
|
|
|
$
|
9,694
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowances for:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Doubtful accounts
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
88
|
|
Cash discounts
|
|
367
|
|
|
25,237
|
|
|
25,331
|
|
|
273
|
|
||||
Deferred tax valuation allowance
|
|
3,900
|
|
|
539
|
|
|
—
|
|
|
4,439
|
|
||||
Sales returns
|
|
7,822
|
|
|
4,962
|
|
|
6,226
|
|
|
6,558
|
|
||||
Total
|
|
$
|
12,201
|
|
|
$
|
30,738
|
|
|
$
|
31,581
|
|
|
$
|
11,358
|
|
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowances for:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Doubtful accounts
|
|
$
|
37
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
112
|
|
Cash discounts
|
|
415
|
|
|
25,616
|
|
|
25,664
|
|
|
367
|
|
||||
Deferred tax valuation allowance
|
|
4,933
|
|
|
—
|
|
|
1,033
|
|
|
3,900
|
|
||||
Sales returns
|
|
7,720
|
|
|
8,516
|
|
|
8,414
|
|
|
7,822
|
|
||||
Total
|
|
$
|
13,105
|
|
|
$
|
34,207
|
|
|
$
|
35,111
|
|
|
$
|
12,201
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings as defined:
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income
|
$
|
89,168
|
|
|
$
|
126,429
|
|
|
$
|
107,705
|
|
|
$
|
82,279
|
|
|
$
|
60,720
|
|
Distributions from investees
|
39,431
|
|
|
24,793
|
|
|
7,152
|
|
|
6,568
|
|
|
6,262
|
|
|||||
Interest expense
|
137,766
|
|
|
111,272
|
|
|
96,236
|
|
|
146,787
|
|
|
147,084
|
|
|||||
(Income) loss in equity of affiliate
|
(20,630
|
)
|
|
(2,446
|
)
|
|
680
|
|
|
(7,243
|
)
|
|
(26,051
|
)
|
|||||
Interest portion of rental expense (1)
|
11,619
|
|
|
9,079
|
|
|
8,149
|
|
|
7,505
|
|
|
2,174
|
|
|||||
Total earnings
|
$
|
257,354
|
|
|
$
|
269,127
|
|
|
$
|
219,922
|
|
|
$
|
235,896
|
|
|
$
|
190,189
|
|
Fixed charges as defined:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
137,766
|
|
|
$
|
111,272
|
|
|
$
|
96,236
|
|
|
$
|
146,787
|
|
|
$
|
147,084
|
|
Interest portion of rent expense (1)
|
11,619
|
|
|
9,079
|
|
|
8,149
|
|
|
7,505
|
|
|
2,174
|
|
|||||
Total fixed charges
|
$
|
149,385
|
|
|
$
|
120,351
|
|
|
$
|
104,385
|
|
|
$
|
154,292
|
|
|
$
|
149,258
|
|
Ratio of earnings to fixed charges
|
1.72
|
|
|
2.24
|
|
|
2.11
|
|
|
1.53
|
|
|
1.27
|
|
VGR Holding LLC
|
Delaware
|
Liggett Group LLC
|
Delaware
|
Vector Tobacco Inc.
|
Virginia
|
Liggett Vector Brands LLC
|
Delaware
|
Accommodations Acquisition Corporation
|
Delaware
|
New Valley LLC
|
Delaware
|
Douglas Elliman Realty, LLC
|
New York
|
New Valley PS LLC
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of Vector Group Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 1, 2018
|
|
|
|
|
|
|
/s/ Howard M. Lorber
|
|
|
Howard M. Lorber
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Vector Group Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(c)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(d)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
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March 1, 2018
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/s/ J. Bryant Kirkland III
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J. Bryant Kirkland III
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Senior Vice President, Treasurer and Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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March 1, 2018
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/s/ Howard M. Lorber
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Howard M. Lorber
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President and Chief Executive Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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March 1, 2018
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/s/ J. Bryant Kirkland III
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J. Bryant Kirkland III
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Senior Vice President, Treasurer and Chief Financial Officer
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(i)
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Engle Progeny Cases with trial dates through December 31, 2018.
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(ii)
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Post-Trial Engle Progeny Cases.
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